97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB3917

 

Introduced 1/10/2012, by Rep. Jerry F. Costello, II - Fred Crespo - Keith Farnham - Carol A. Sente - Michelle Mussman, et al.

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/201  from Ch. 120, par. 2-201
35 ILCS 5/901  from Ch. 120, par. 9-901

    Amends the Illinois Income Tax Act. Reduces the rate of tax on corporations to 4.8% for taxable years beginning on or after January 1, 2012. Makes corresponding changes concerning transfers from the General Revenue Fund to the Local Government Distributive Fund. Effective immediately.


LRB097 15567 HLH 60707 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3917LRB097 15567 HLH 60707 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5changing Sections 201 and 901 as follows:
 
6    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
7    Sec. 201. Tax Imposed.
8    (a) In general. A tax measured by net income is hereby
9imposed on every individual, corporation, trust and estate for
10each taxable year ending after July 31, 1969 on the privilege
11of earning or receiving income in or as a resident of this
12State. Such tax shall be in addition to all other occupation or
13privilege taxes imposed by this State or by any municipal
14corporation or political subdivision thereof.
15    (b) Rates. The tax imposed by subsection (a) of this
16Section shall be determined as follows, except as adjusted by
17subsection (d-1):
18        (1) In the case of an individual, trust or estate, for
19    taxable years ending prior to July 1, 1989, an amount equal
20    to 2 1/2% of the taxpayer's net income for the taxable
21    year.
22        (2) In the case of an individual, trust or estate, for
23    taxable years beginning prior to July 1, 1989 and ending

 

 

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1    after June 30, 1989, an amount equal to the sum of (i) 2
2    1/2% of the taxpayer's net income for the period prior to
3    July 1, 1989, as calculated under Section 202.3, and (ii)
4    3% of the taxpayer's net income for the period after June
5    30, 1989, as calculated under Section 202.3.
6        (3) In the case of an individual, trust or estate, for
7    taxable years beginning after June 30, 1989, and ending
8    prior to January 1, 2011, an amount equal to 3% of the
9    taxpayer's net income for the taxable year.
10        (4) In the case of an individual, trust, or estate, for
11    taxable years beginning prior to January 1, 2011, and
12    ending after December 31, 2010, an amount equal to the sum
13    of (i) 3% of the taxpayer's net income for the period prior
14    to January 1, 2011, as calculated under Section 202.5, and
15    (ii) 5% of the taxpayer's net income for the period after
16    December 31, 2010, as calculated under Section 202.5.
17        (5) In the case of an individual, trust, or estate, for
18    taxable years beginning on or after January 1, 2011, and
19    ending prior to January 1, 2015, an amount equal to 5% of
20    the taxpayer's net income for the taxable year.
21        (5.1) In the case of an individual, trust, or estate,
22    for taxable years beginning prior to January 1, 2015, and
23    ending after December 31, 2014, an amount equal to the sum
24    of (i) 5% of the taxpayer's net income for the period prior
25    to January 1, 2015, as calculated under Section 202.5, and
26    (ii) 3.75% of the taxpayer's net income for the period

 

 

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1    after December 31, 2014, as calculated under Section 202.5.
2        (5.2) In the case of an individual, trust, or estate,
3    for taxable years beginning on or after January 1, 2015,
4    and ending prior to January 1, 2025, an amount equal to
5    3.75% of the taxpayer's net income for the taxable year.
6        (5.3) In the case of an individual, trust, or estate,
7    for taxable years beginning prior to January 1, 2025, and
8    ending after December 31, 2024, an amount equal to the sum
9    of (i) 3.75% of the taxpayer's net income for the period
10    prior to January 1, 2025, as calculated under Section
11    202.5, and (ii) 3.25% of the taxpayer's net income for the
12    period after December 31, 2024, as calculated under Section
13    202.5.
14        (5.4) In the case of an individual, trust, or estate,
15    for taxable years beginning on or after January 1, 2025, an
16    amount equal to 3.25% of the taxpayer's net income for the
17    taxable year.
18        (6) In the case of a corporation, for taxable years
19    ending prior to July 1, 1989, an amount equal to 4% of the
20    taxpayer's net income for the taxable year.
21        (7) In the case of a corporation, for taxable years
22    beginning prior to July 1, 1989 and ending after June 30,
23    1989, an amount equal to the sum of (i) 4% of the
24    taxpayer's net income for the period prior to July 1, 1989,
25    as calculated under Section 202.3, and (ii) 4.8% of the
26    taxpayer's net income for the period after June 30, 1989,

 

 

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1    as calculated under Section 202.3.
2        (8) In the case of a corporation, for taxable years
3    beginning after June 30, 1989, and ending prior to January
4    1, 2011, an amount equal to 4.8% of the taxpayer's net
5    income for the taxable year.
6        (9) In the case of a corporation, for taxable years
7    beginning prior to January 1, 2011, and ending after
8    December 31, 2010, an amount equal to the sum of (i) 4.8%
9    of the taxpayer's net income for the period prior to
10    January 1, 2011, as calculated under Section 202.5, and
11    (ii) 7% of the taxpayer's net income for the period after
12    December 31, 2010, as calculated under Section 202.5.
13        (10) In the case of a corporation, for taxable years
14    beginning on or after January 1, 2011, and ending prior to
15    January 1, 2012 January 1, 2015, an amount equal to 7% of
16    the taxpayer's net income for the taxable year.
17        (11) In the case of a corporation, for taxable years
18    beginning prior to January 1, 2012 January 1, 2015, and
19    ending after December 31, 2011 December 31, 2014, an amount
20    equal to the sum of (i) 7% of the taxpayer's net income for
21    the period prior to January 1, 2012 January 1, 2015, as
22    calculated under Section 202.5, and (ii) 4.8% 5.25% of the
23    taxpayer's net income for the period after December 31,
24    2011 December 31, 2014, as calculated under Section 202.5.
25        (12) In the case of a corporation, for taxable years
26    beginning on or after January 1, 2012 January 1, 2015, and

 

 

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1    ending prior to January 1, 2025, an amount equal to 4.8%
2    5.25% of the taxpayer's net income for the taxable year.
3        (13) (Blank). In the case of a corporation, for taxable
4    years beginning prior to January 1, 2025, and ending after
5    December 31, 2024, an amount equal to the sum of (i) 5.25%
6    of the taxpayer's net income for the period prior to
7    January 1, 2025, as calculated under Section 202.5, and
8    (ii) 4.8% of the taxpayer's net income for the period after
9    December 31, 2024, as calculated under Section 202.5.
10        (14) (Blank). In the case of a corporation, for taxable
11    years beginning on or after January 1, 2025, an amount
12    equal to 4.8% of the taxpayer's net income for the taxable
13    year.
14    The rates under this subsection (b) are subject to the
15provisions of Section 201.5.
16    (c) Personal Property Tax Replacement Income Tax.
17Beginning on July 1, 1979 and thereafter, in addition to such
18income tax, there is also hereby imposed the Personal Property
19Tax Replacement Income Tax measured by net income on every
20corporation (including Subchapter S corporations), partnership
21and trust, for each taxable year ending after June 30, 1979.
22Such taxes are imposed on the privilege of earning or receiving
23income in or as a resident of this State. The Personal Property
24Tax Replacement Income Tax shall be in addition to the income
25tax imposed by subsections (a) and (b) of this Section and in
26addition to all other occupation or privilege taxes imposed by

 

 

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1this State or by any municipal corporation or political
2subdivision thereof.
3    (d) Additional Personal Property Tax Replacement Income
4Tax Rates. The personal property tax replacement income tax
5imposed by this subsection and subsection (c) of this Section
6in the case of a corporation, other than a Subchapter S
7corporation and except as adjusted by subsection (d-1), shall
8be an additional amount equal to 2.85% of such taxpayer's net
9income for the taxable year, except that beginning on January
101, 1981, and thereafter, the rate of 2.85% specified in this
11subsection shall be reduced to 2.5%, and in the case of a
12partnership, trust or a Subchapter S corporation shall be an
13additional amount equal to 1.5% of such taxpayer's net income
14for the taxable year.
15    (d-1) Rate reduction for certain foreign insurers. In the
16case of a foreign insurer, as defined by Section 35A-5 of the
17Illinois Insurance Code, whose state or country of domicile
18imposes on insurers domiciled in Illinois a retaliatory tax
19(excluding any insurer whose premiums from reinsurance assumed
20are 50% or more of its total insurance premiums as determined
21under paragraph (2) of subsection (b) of Section 304, except
22that for purposes of this determination premiums from
23reinsurance do not include premiums from inter-affiliate
24reinsurance arrangements), beginning with taxable years ending
25on or after December 31, 1999, the sum of the rates of tax
26imposed by subsections (b) and (d) shall be reduced (but not

 

 

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1increased) to the rate at which the total amount of tax imposed
2under this Act, net of all credits allowed under this Act,
3shall equal (i) the total amount of tax that would be imposed
4on the foreign insurer's net income allocable to Illinois for
5the taxable year by such foreign insurer's state or country of
6domicile if that net income were subject to all income taxes
7and taxes measured by net income imposed by such foreign
8insurer's state or country of domicile, net of all credits
9allowed or (ii) a rate of zero if no such tax is imposed on such
10income by the foreign insurer's state of domicile. For the
11purposes of this subsection (d-1), an inter-affiliate includes
12a mutual insurer under common management.
13        (1) For the purposes of subsection (d-1), in no event
14    shall the sum of the rates of tax imposed by subsections
15    (b) and (d) be reduced below the rate at which the sum of:
16            (A) the total amount of tax imposed on such foreign
17        insurer under this Act for a taxable year, net of all
18        credits allowed under this Act, plus
19            (B) the privilege tax imposed by Section 409 of the
20        Illinois Insurance Code, the fire insurance company
21        tax imposed by Section 12 of the Fire Investigation
22        Act, and the fire department taxes imposed under
23        Section 11-10-1 of the Illinois Municipal Code,
24    equals 1.25% for taxable years ending prior to December 31,
25    2003, or 1.75% for taxable years ending on or after
26    December 31, 2003, of the net taxable premiums written for

 

 

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1    the taxable year, as described by subsection (1) of Section
2    409 of the Illinois Insurance Code. This paragraph will in
3    no event increase the rates imposed under subsections (b)
4    and (d).
5        (2) Any reduction in the rates of tax imposed by this
6    subsection shall be applied first against the rates imposed
7    by subsection (b) and only after the tax imposed by
8    subsection (a) net of all credits allowed under this
9    Section other than the credit allowed under subsection (i)
10    has been reduced to zero, against the rates imposed by
11    subsection (d).
12    This subsection (d-1) is exempt from the provisions of
13Section 250.
14    (e) Investment credit. A taxpayer shall be allowed a credit
15against the Personal Property Tax Replacement Income Tax for
16investment in qualified property.
17        (1) A taxpayer shall be allowed a credit equal to .5%
18    of the basis of qualified property placed in service during
19    the taxable year, provided such property is placed in
20    service on or after July 1, 1984. There shall be allowed an
21    additional credit equal to .5% of the basis of qualified
22    property placed in service during the taxable year,
23    provided such property is placed in service on or after
24    July 1, 1986, and the taxpayer's base employment within
25    Illinois has increased by 1% or more over the preceding
26    year as determined by the taxpayer's employment records

 

 

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1    filed with the Illinois Department of Employment Security.
2    Taxpayers who are new to Illinois shall be deemed to have
3    met the 1% growth in base employment for the first year in
4    which they file employment records with the Illinois
5    Department of Employment Security. The provisions added to
6    this Section by Public Act 85-1200 (and restored by Public
7    Act 87-895) shall be construed as declaratory of existing
8    law and not as a new enactment. If, in any year, the
9    increase in base employment within Illinois over the
10    preceding year is less than 1%, the additional credit shall
11    be limited to that percentage times a fraction, the
12    numerator of which is .5% and the denominator of which is
13    1%, but shall not exceed .5%. The investment credit shall
14    not be allowed to the extent that it would reduce a
15    taxpayer's liability in any tax year below zero, nor may
16    any credit for qualified property be allowed for any year
17    other than the year in which the property was placed in
18    service in Illinois. For tax years ending on or after
19    December 31, 1987, and on or before December 31, 1988, the
20    credit shall be allowed for the tax year in which the
21    property is placed in service, or, if the amount of the
22    credit exceeds the tax liability for that year, whether it
23    exceeds the original liability or the liability as later
24    amended, such excess may be carried forward and applied to
25    the tax liability of the 5 taxable years following the
26    excess credit years if the taxpayer (i) makes investments

 

 

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1    which cause the creation of a minimum of 2,000 full-time
2    equivalent jobs in Illinois, (ii) is located in an
3    enterprise zone established pursuant to the Illinois
4    Enterprise Zone Act and (iii) is certified by the
5    Department of Commerce and Community Affairs (now
6    Department of Commerce and Economic Opportunity) as
7    complying with the requirements specified in clause (i) and
8    (ii) by July 1, 1986. The Department of Commerce and
9    Community Affairs (now Department of Commerce and Economic
10    Opportunity) shall notify the Department of Revenue of all
11    such certifications immediately. For tax years ending
12    after December 31, 1988, the credit shall be allowed for
13    the tax year in which the property is placed in service,
14    or, if the amount of the credit exceeds the tax liability
15    for that year, whether it exceeds the original liability or
16    the liability as later amended, such excess may be carried
17    forward and applied to the tax liability of the 5 taxable
18    years following the excess credit years. The credit shall
19    be applied to the earliest year for which there is a
20    liability. If there is credit from more than one tax year
21    that is available to offset a liability, earlier credit
22    shall be applied first.
23        (2) The term "qualified property" means property
24    which:
25            (A) is tangible, whether new or used, including
26        buildings and structural components of buildings and

 

 

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1        signs that are real property, but not including land or
2        improvements to real property that are not a structural
3        component of a building such as landscaping, sewer
4        lines, local access roads, fencing, parking lots, and
5        other appurtenances;
6            (B) is depreciable pursuant to Section 167 of the
7        Internal Revenue Code, except that "3-year property"
8        as defined in Section 168(c)(2)(A) of that Code is not
9        eligible for the credit provided by this subsection
10        (e);
11            (C) is acquired by purchase as defined in Section
12        179(d) of the Internal Revenue Code;
13            (D) is used in Illinois by a taxpayer who is
14        primarily engaged in manufacturing, or in mining coal
15        or fluorite, or in retailing, or was placed in service
16        on or after July 1, 2006 in a River Edge Redevelopment
17        Zone established pursuant to the River Edge
18        Redevelopment Zone Act; and
19            (E) has not previously been used in Illinois in
20        such a manner and by such a person as would qualify for
21        the credit provided by this subsection (e) or
22        subsection (f).
23        (3) For purposes of this subsection (e),
24    "manufacturing" means the material staging and production
25    of tangible personal property by procedures commonly
26    regarded as manufacturing, processing, fabrication, or

 

 

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1    assembling which changes some existing material into new
2    shapes, new qualities, or new combinations. For purposes of
3    this subsection (e) the term "mining" shall have the same
4    meaning as the term "mining" in Section 613(c) of the
5    Internal Revenue Code. For purposes of this subsection (e),
6    the term "retailing" means the sale of tangible personal
7    property for use or consumption and not for resale, or
8    services rendered in conjunction with the sale of tangible
9    personal property for use or consumption and not for
10    resale. For purposes of this subsection (e), "tangible
11    personal property" has the same meaning as when that term
12    is used in the Retailers' Occupation Tax Act, and, for
13    taxable years ending after December 31, 2008, does not
14    include the generation, transmission, or distribution of
15    electricity.
16        (4) The basis of qualified property shall be the basis
17    used to compute the depreciation deduction for federal
18    income tax purposes.
19        (5) If the basis of the property for federal income tax
20    depreciation purposes is increased after it has been placed
21    in service in Illinois by the taxpayer, the amount of such
22    increase shall be deemed property placed in service on the
23    date of such increase in basis.
24        (6) The term "placed in service" shall have the same
25    meaning as under Section 46 of the Internal Revenue Code.
26        (7) If during any taxable year, any property ceases to

 

 

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1    be qualified property in the hands of the taxpayer within
2    48 months after being placed in service, or the situs of
3    any qualified property is moved outside Illinois within 48
4    months after being placed in service, the Personal Property
5    Tax Replacement Income Tax for such taxable year shall be
6    increased. Such increase shall be determined by (i)
7    recomputing the investment credit which would have been
8    allowed for the year in which credit for such property was
9    originally allowed by eliminating such property from such
10    computation and, (ii) subtracting such recomputed credit
11    from the amount of credit previously allowed. For the
12    purposes of this paragraph (7), a reduction of the basis of
13    qualified property resulting from a redetermination of the
14    purchase price shall be deemed a disposition of qualified
15    property to the extent of such reduction.
16        (8) Unless the investment credit is extended by law,
17    the basis of qualified property shall not include costs
18    incurred after December 31, 2013, except for costs incurred
19    pursuant to a binding contract entered into on or before
20    December 31, 2013.
21        (9) Each taxable year ending before December 31, 2000,
22    a partnership may elect to pass through to its partners the
23    credits to which the partnership is entitled under this
24    subsection (e) for the taxable year. A partner may use the
25    credit allocated to him or her under this paragraph only
26    against the tax imposed in subsections (c) and (d) of this

 

 

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1    Section. If the partnership makes that election, those
2    credits shall be allocated among the partners in the
3    partnership in accordance with the rules set forth in
4    Section 704(b) of the Internal Revenue Code, and the rules
5    promulgated under that Section, and the allocated amount of
6    the credits shall be allowed to the partners for that
7    taxable year. The partnership shall make this election on
8    its Personal Property Tax Replacement Income Tax return for
9    that taxable year. The election to pass through the credits
10    shall be irrevocable.
11        For taxable years ending on or after December 31, 2000,
12    a partner that qualifies its partnership for a subtraction
13    under subparagraph (I) of paragraph (2) of subsection (d)
14    of Section 203 or a shareholder that qualifies a Subchapter
15    S corporation for a subtraction under subparagraph (S) of
16    paragraph (2) of subsection (b) of Section 203 shall be
17    allowed a credit under this subsection (e) equal to its
18    share of the credit earned under this subsection (e) during
19    the taxable year by the partnership or Subchapter S
20    corporation, determined in accordance with the
21    determination of income and distributive share of income
22    under Sections 702 and 704 and Subchapter S of the Internal
23    Revenue Code. This paragraph is exempt from the provisions
24    of Section 250.
25    (f) Investment credit; Enterprise Zone; River Edge
26Redevelopment Zone.

 

 

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1        (1) A taxpayer shall be allowed a credit against the
2    tax imposed by subsections (a) and (b) of this Section for
3    investment in qualified property which is placed in service
4    in an Enterprise Zone created pursuant to the Illinois
5    Enterprise Zone Act or, for property placed in service on
6    or after July 1, 2006, a River Edge Redevelopment Zone
7    established pursuant to the River Edge Redevelopment Zone
8    Act. For partners, shareholders of Subchapter S
9    corporations, and owners of limited liability companies,
10    if the liability company is treated as a partnership for
11    purposes of federal and State income taxation, there shall
12    be allowed a credit under this subsection (f) to be
13    determined in accordance with the determination of income
14    and distributive share of income under Sections 702 and 704
15    and Subchapter S of the Internal Revenue Code. The credit
16    shall be .5% of the basis for such property. The credit
17    shall be available only in the taxable year in which the
18    property is placed in service in the Enterprise Zone or
19    River Edge Redevelopment Zone and shall not be allowed to
20    the extent that it would reduce a taxpayer's liability for
21    the tax imposed by subsections (a) and (b) of this Section
22    to below zero. For tax years ending on or after December
23    31, 1985, the credit shall be allowed for the tax year in
24    which the property is placed in service, or, if the amount
25    of the credit exceeds the tax liability for that year,
26    whether it exceeds the original liability or the liability

 

 

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1    as later amended, such excess may be carried forward and
2    applied to the tax liability of the 5 taxable years
3    following the excess credit year. The credit shall be
4    applied to the earliest year for which there is a
5    liability. If there is credit from more than one tax year
6    that is available to offset a liability, the credit
7    accruing first in time shall be applied first.
8        (2) The term qualified property means property which:
9            (A) is tangible, whether new or used, including
10        buildings and structural components of buildings;
11            (B) is depreciable pursuant to Section 167 of the
12        Internal Revenue Code, except that "3-year property"
13        as defined in Section 168(c)(2)(A) of that Code is not
14        eligible for the credit provided by this subsection
15        (f);
16            (C) is acquired by purchase as defined in Section
17        179(d) of the Internal Revenue Code;
18            (D) is used in the Enterprise Zone or River Edge
19        Redevelopment Zone by the taxpayer; and
20            (E) has not been previously used in Illinois in
21        such a manner and by such a person as would qualify for
22        the credit provided by this subsection (f) or
23        subsection (e).
24        (3) The basis of qualified property shall be the basis
25    used to compute the depreciation deduction for federal
26    income tax purposes.

 

 

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1        (4) If the basis of the property for federal income tax
2    depreciation purposes is increased after it has been placed
3    in service in the Enterprise Zone or River Edge
4    Redevelopment Zone by the taxpayer, the amount of such
5    increase shall be deemed property placed in service on the
6    date of such increase in basis.
7        (5) The term "placed in service" shall have the same
8    meaning as under Section 46 of the Internal Revenue Code.
9        (6) If during any taxable year, any property ceases to
10    be qualified property in the hands of the taxpayer within
11    48 months after being placed in service, or the situs of
12    any qualified property is moved outside the Enterprise Zone
13    or River Edge Redevelopment Zone within 48 months after
14    being placed in service, the tax imposed under subsections
15    (a) and (b) of this Section for such taxable year shall be
16    increased. Such increase shall be determined by (i)
17    recomputing the investment credit which would have been
18    allowed for the year in which credit for such property was
19    originally allowed by eliminating such property from such
20    computation, and (ii) subtracting such recomputed credit
21    from the amount of credit previously allowed. For the
22    purposes of this paragraph (6), a reduction of the basis of
23    qualified property resulting from a redetermination of the
24    purchase price shall be deemed a disposition of qualified
25    property to the extent of such reduction.
26        (7) There shall be allowed an additional credit equal

 

 

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1    to 0.5% of the basis of qualified property placed in
2    service during the taxable year in a River Edge
3    Redevelopment Zone, provided such property is placed in
4    service on or after July 1, 2006, and the taxpayer's base
5    employment within Illinois has increased by 1% or more over
6    the preceding year as determined by the taxpayer's
7    employment records filed with the Illinois Department of
8    Employment Security. Taxpayers who are new to Illinois
9    shall be deemed to have met the 1% growth in base
10    employment for the first year in which they file employment
11    records with the Illinois Department of Employment
12    Security. If, in any year, the increase in base employment
13    within Illinois over the preceding year is less than 1%,
14    the additional credit shall be limited to that percentage
15    times a fraction, the numerator of which is 0.5% and the
16    denominator of which is 1%, but shall not exceed 0.5%.
17    (g) Jobs Tax Credit; Enterprise Zone, River Edge
18Redevelopment Zone, and Foreign Trade Zone or Sub-Zone.
19        (1) A taxpayer conducting a trade or business in an
20    enterprise zone or a High Impact Business designated by the
21    Department of Commerce and Economic Opportunity or for
22    taxable years ending on or after December 31, 2006, in a
23    River Edge Redevelopment Zone conducting a trade or
24    business in a federally designated Foreign Trade Zone or
25    Sub-Zone shall be allowed a credit against the tax imposed
26    by subsections (a) and (b) of this Section in the amount of

 

 

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1    $500 per eligible employee hired to work in the zone during
2    the taxable year.
3        (2) To qualify for the credit:
4            (A) the taxpayer must hire 5 or more eligible
5        employees to work in an enterprise zone, River Edge
6        Redevelopment Zone, or federally designated Foreign
7        Trade Zone or Sub-Zone during the taxable year;
8            (B) the taxpayer's total employment within the
9        enterprise zone, River Edge Redevelopment Zone, or
10        federally designated Foreign Trade Zone or Sub-Zone
11        must increase by 5 or more full-time employees beyond
12        the total employed in that zone at the end of the
13        previous tax year for which a jobs tax credit under
14        this Section was taken, or beyond the total employed by
15        the taxpayer as of December 31, 1985, whichever is
16        later; and
17            (C) the eligible employees must be employed 180
18        consecutive days in order to be deemed hired for
19        purposes of this subsection.
20        (3) An "eligible employee" means an employee who is:
21            (A) Certified by the Department of Commerce and
22        Economic Opportunity as "eligible for services"
23        pursuant to regulations promulgated in accordance with
24        Title II of the Job Training Partnership Act, Training
25        Services for the Disadvantaged or Title III of the Job
26        Training Partnership Act, Employment and Training

 

 

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1        Assistance for Dislocated Workers Program.
2            (B) Hired after the enterprise zone, River Edge
3        Redevelopment Zone, or federally designated Foreign
4        Trade Zone or Sub-Zone was designated or the trade or
5        business was located in that zone, whichever is later.
6            (C) Employed in the enterprise zone, River Edge
7        Redevelopment Zone, or Foreign Trade Zone or Sub-Zone.
8        An employee is employed in an enterprise zone or
9        federally designated Foreign Trade Zone or Sub-Zone if
10        his services are rendered there or it is the base of
11        operations for the services performed.
12            (D) A full-time employee working 30 or more hours
13        per week.
14        (4) For tax years ending on or after December 31, 1985
15    and prior to December 31, 1988, the credit shall be allowed
16    for the tax year in which the eligible employees are hired.
17    For tax years ending on or after December 31, 1988, the
18    credit shall be allowed for the tax year immediately
19    following the tax year in which the eligible employees are
20    hired. If the amount of the credit exceeds the tax
21    liability for that year, whether it exceeds the original
22    liability or the liability as later amended, such excess
23    may be carried forward and applied to the tax liability of
24    the 5 taxable years following the excess credit year. The
25    credit shall be applied to the earliest year for which
26    there is a liability. If there is credit from more than one

 

 

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1    tax year that is available to offset a liability, earlier
2    credit shall be applied first.
3        (5) The Department of Revenue shall promulgate such
4    rules and regulations as may be deemed necessary to carry
5    out the purposes of this subsection (g).
6        (6) The credit shall be available for eligible
7    employees hired on or after January 1, 1986.
8    (h) Investment credit; High Impact Business.
9        (1) Subject to subsections (b) and (b-5) of Section 5.5
10    of the Illinois Enterprise Zone Act, a taxpayer shall be
11    allowed a credit against the tax imposed by subsections (a)
12    and (b) of this Section for investment in qualified
13    property which is placed in service by a Department of
14    Commerce and Economic Opportunity designated High Impact
15    Business. The credit shall be .5% of the basis for such
16    property. The credit shall not be available (i) until the
17    minimum investments in qualified property set forth in
18    subdivision (a)(3)(A) of Section 5.5 of the Illinois
19    Enterprise Zone Act have been satisfied or (ii) until the
20    time authorized in subsection (b-5) of the Illinois
21    Enterprise Zone Act for entities designated as High Impact
22    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
23    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
24    Act, and shall not be allowed to the extent that it would
25    reduce a taxpayer's liability for the tax imposed by
26    subsections (a) and (b) of this Section to below zero. The

 

 

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1    credit applicable to such investments shall be taken in the
2    taxable year in which such investments have been completed.
3    The credit for additional investments beyond the minimum
4    investment by a designated high impact business authorized
5    under subdivision (a)(3)(A) of Section 5.5 of the Illinois
6    Enterprise Zone Act shall be available only in the taxable
7    year in which the property is placed in service and shall
8    not be allowed to the extent that it would reduce a
9    taxpayer's liability for the tax imposed by subsections (a)
10    and (b) of this Section to below zero. For tax years ending
11    on or after December 31, 1987, the credit shall be allowed
12    for the tax year in which the property is placed in
13    service, or, if the amount of the credit exceeds the tax
14    liability for that year, whether it exceeds the original
15    liability or the liability as later amended, such excess
16    may be carried forward and applied to the tax liability of
17    the 5 taxable years following the excess credit year. The
18    credit shall be applied to the earliest year for which
19    there is a liability. If there is credit from more than one
20    tax year that is available to offset a liability, the
21    credit accruing first in time shall be applied first.
22        Changes made in this subdivision (h)(1) by Public Act
23    88-670 restore changes made by Public Act 85-1182 and
24    reflect existing law.
25        (2) The term qualified property means property which:
26            (A) is tangible, whether new or used, including

 

 

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1        buildings and structural components of buildings;
2            (B) is depreciable pursuant to Section 167 of the
3        Internal Revenue Code, except that "3-year property"
4        as defined in Section 168(c)(2)(A) of that Code is not
5        eligible for the credit provided by this subsection
6        (h);
7            (C) is acquired by purchase as defined in Section
8        179(d) of the Internal Revenue Code; and
9            (D) is not eligible for the Enterprise Zone
10        Investment Credit provided by subsection (f) of this
11        Section.
12        (3) The basis of qualified property shall be the basis
13    used to compute the depreciation deduction for federal
14    income tax purposes.
15        (4) If the basis of the property for federal income tax
16    depreciation purposes is increased after it has been placed
17    in service in a federally designated Foreign Trade Zone or
18    Sub-Zone located in Illinois by the taxpayer, the amount of
19    such increase shall be deemed property placed in service on
20    the date of such increase in basis.
21        (5) The term "placed in service" shall have the same
22    meaning as under Section 46 of the Internal Revenue Code.
23        (6) If during any taxable year ending on or before
24    December 31, 1996, any property ceases to be qualified
25    property in the hands of the taxpayer within 48 months
26    after being placed in service, or the situs of any

 

 

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1    qualified property is moved outside Illinois within 48
2    months after being placed in service, the tax imposed under
3    subsections (a) and (b) of this Section for such taxable
4    year shall be increased. Such increase shall be determined
5    by (i) recomputing the investment credit which would have
6    been allowed for the year in which credit for such property
7    was originally allowed by eliminating such property from
8    such computation, and (ii) subtracting such recomputed
9    credit from the amount of credit previously allowed. For
10    the purposes of this paragraph (6), a reduction of the
11    basis of qualified property resulting from a
12    redetermination of the purchase price shall be deemed a
13    disposition of qualified property to the extent of such
14    reduction.
15        (7) Beginning with tax years ending after December 31,
16    1996, if a taxpayer qualifies for the credit under this
17    subsection (h) and thereby is granted a tax abatement and
18    the taxpayer relocates its entire facility in violation of
19    the explicit terms and length of the contract under Section
20    18-183 of the Property Tax Code, the tax imposed under
21    subsections (a) and (b) of this Section shall be increased
22    for the taxable year in which the taxpayer relocated its
23    facility by an amount equal to the amount of credit
24    received by the taxpayer under this subsection (h).
25    (i) Credit for Personal Property Tax Replacement Income
26Tax. For tax years ending prior to December 31, 2003, a credit

 

 

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1shall be allowed against the tax imposed by subsections (a) and
2(b) of this Section for the tax imposed by subsections (c) and
3(d) of this Section. This credit shall be computed by
4multiplying the tax imposed by subsections (c) and (d) of this
5Section by a fraction, the numerator of which is base income
6allocable to Illinois and the denominator of which is Illinois
7base income, and further multiplying the product by the tax
8rate imposed by subsections (a) and (b) of this Section.
9    Any credit earned on or after December 31, 1986 under this
10subsection which is unused in the year the credit is computed
11because it exceeds the tax liability imposed by subsections (a)
12and (b) for that year (whether it exceeds the original
13liability or the liability as later amended) may be carried
14forward and applied to the tax liability imposed by subsections
15(a) and (b) of the 5 taxable years following the excess credit
16year, provided that no credit may be carried forward to any
17year ending on or after December 31, 2003. This credit shall be
18applied first to the earliest year for which there is a
19liability. If there is a credit under this subsection from more
20than one tax year that is available to offset a liability the
21earliest credit arising under this subsection shall be applied
22first.
23    If, during any taxable year ending on or after December 31,
241986, the tax imposed by subsections (c) and (d) of this
25Section for which a taxpayer has claimed a credit under this
26subsection (i) is reduced, the amount of credit for such tax

 

 

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1shall also be reduced. Such reduction shall be determined by
2recomputing the credit to take into account the reduced tax
3imposed by subsections (c) and (d). If any portion of the
4reduced amount of credit has been carried to a different
5taxable year, an amended return shall be filed for such taxable
6year to reduce the amount of credit claimed.
7    (j) Training expense credit. Beginning with tax years
8ending on or after December 31, 1986 and prior to December 31,
92003, a taxpayer shall be allowed a credit against the tax
10imposed by subsections (a) and (b) under this Section for all
11amounts paid or accrued, on behalf of all persons employed by
12the taxpayer in Illinois or Illinois residents employed outside
13of Illinois by a taxpayer, for educational or vocational
14training in semi-technical or technical fields or semi-skilled
15or skilled fields, which were deducted from gross income in the
16computation of taxable income. The credit against the tax
17imposed by subsections (a) and (b) shall be 1.6% of such
18training expenses. For partners, shareholders of subchapter S
19corporations, and owners of limited liability companies, if the
20liability company is treated as a partnership for purposes of
21federal and State income taxation, there shall be allowed a
22credit under this subsection (j) to be determined in accordance
23with the determination of income and distributive share of
24income under Sections 702 and 704 and subchapter S of the
25Internal Revenue Code.
26    Any credit allowed under this subsection which is unused in

 

 

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1the year the credit is earned may be carried forward to each of
2the 5 taxable years following the year for which the credit is
3first computed until it is used. This credit shall be applied
4first to the earliest year for which there is a liability. If
5there is a credit under this subsection from more than one tax
6year that is available to offset a liability the earliest
7credit arising under this subsection shall be applied first. No
8carryforward credit may be claimed in any tax year ending on or
9after December 31, 2003.
10    (k) Research and development credit.
11    For tax years ending after July 1, 1990 and prior to
12December 31, 2003, and beginning again for tax years ending on
13or after December 31, 2004, and ending prior to January 1,
142011, a taxpayer shall be allowed a credit against the tax
15imposed by subsections (a) and (b) of this Section for
16increasing research activities in this State. The credit
17allowed against the tax imposed by subsections (a) and (b)
18shall be equal to 6 1/2% of the qualifying expenditures for
19increasing research activities in this State. For partners,
20shareholders of subchapter S corporations, and owners of
21limited liability companies, if the liability company is
22treated as a partnership for purposes of federal and State
23income taxation, there shall be allowed a credit under this
24subsection to be determined in accordance with the
25determination of income and distributive share of income under
26Sections 702 and 704 and subchapter S of the Internal Revenue

 

 

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1Code.
2    For purposes of this subsection, "qualifying expenditures"
3means the qualifying expenditures as defined for the federal
4credit for increasing research activities which would be
5allowable under Section 41 of the Internal Revenue Code and
6which are conducted in this State, "qualifying expenditures for
7increasing research activities in this State" means the excess
8of qualifying expenditures for the taxable year in which
9incurred over qualifying expenditures for the base period,
10"qualifying expenditures for the base period" means the average
11of the qualifying expenditures for each year in the base
12period, and "base period" means the 3 taxable years immediately
13preceding the taxable year for which the determination is being
14made.
15    Any credit in excess of the tax liability for the taxable
16year may be carried forward. A taxpayer may elect to have the
17unused credit shown on its final completed return carried over
18as a credit against the tax liability for the following 5
19taxable years or until it has been fully used, whichever occurs
20first; provided that no credit earned in a tax year ending
21prior to December 31, 2003 may be carried forward to any year
22ending on or after December 31, 2003, and no credit may be
23carried forward to any taxable year ending on or after January
241, 2011.
25    If an unused credit is carried forward to a given year from
262 or more earlier years, that credit arising in the earliest

 

 

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1year will be applied first against the tax liability for the
2given year. If a tax liability for the given year still
3remains, the credit from the next earliest year will then be
4applied, and so on, until all credits have been used or no tax
5liability for the given year remains. Any remaining unused
6credit or credits then will be carried forward to the next
7following year in which a tax liability is incurred, except
8that no credit can be carried forward to a year which is more
9than 5 years after the year in which the expense for which the
10credit is given was incurred.
11    No inference shall be drawn from this amendatory Act of the
1291st General Assembly in construing this Section for taxable
13years beginning before January 1, 1999.
14    (l) Environmental Remediation Tax Credit.
15        (i) For tax years ending after December 31, 1997 and on
16    or before December 31, 2001, a taxpayer shall be allowed a
17    credit against the tax imposed by subsections (a) and (b)
18    of this Section for certain amounts paid for unreimbursed
19    eligible remediation costs, as specified in this
20    subsection. For purposes of this Section, "unreimbursed
21    eligible remediation costs" means costs approved by the
22    Illinois Environmental Protection Agency ("Agency") under
23    Section 58.14 of the Environmental Protection Act that were
24    paid in performing environmental remediation at a site for
25    which a No Further Remediation Letter was issued by the
26    Agency and recorded under Section 58.10 of the

 

 

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1    Environmental Protection Act. The credit must be claimed
2    for the taxable year in which Agency approval of the
3    eligible remediation costs is granted. The credit is not
4    available to any taxpayer if the taxpayer or any related
5    party caused or contributed to, in any material respect, a
6    release of regulated substances on, in, or under the site
7    that was identified and addressed by the remedial action
8    pursuant to the Site Remediation Program of the
9    Environmental Protection Act. After the Pollution Control
10    Board rules are adopted pursuant to the Illinois
11    Administrative Procedure Act for the administration and
12    enforcement of Section 58.9 of the Environmental
13    Protection Act, determinations as to credit availability
14    for purposes of this Section shall be made consistent with
15    those rules. For purposes of this Section, "taxpayer"
16    includes a person whose tax attributes the taxpayer has
17    succeeded to under Section 381 of the Internal Revenue Code
18    and "related party" includes the persons disallowed a
19    deduction for losses by paragraphs (b), (c), and (f)(1) of
20    Section 267 of the Internal Revenue Code by virtue of being
21    a related taxpayer, as well as any of its partners. The
22    credit allowed against the tax imposed by subsections (a)
23    and (b) shall be equal to 25% of the unreimbursed eligible
24    remediation costs in excess of $100,000 per site, except
25    that the $100,000 threshold shall not apply to any site
26    contained in an enterprise zone as determined by the

 

 

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1    Department of Commerce and Community Affairs (now
2    Department of Commerce and Economic Opportunity). The
3    total credit allowed shall not exceed $40,000 per year with
4    a maximum total of $150,000 per site. For partners and
5    shareholders of subchapter S corporations, there shall be
6    allowed a credit under this subsection to be determined in
7    accordance with the determination of income and
8    distributive share of income under Sections 702 and 704 and
9    subchapter S of the Internal Revenue Code.
10        (ii) A credit allowed under this subsection that is
11    unused in the year the credit is earned may be carried
12    forward to each of the 5 taxable years following the year
13    for which the credit is first earned until it is used. The
14    term "unused credit" does not include any amounts of
15    unreimbursed eligible remediation costs in excess of the
16    maximum credit per site authorized under paragraph (i).
17    This credit shall be applied first to the earliest year for
18    which there is a liability. If there is a credit under this
19    subsection from more than one tax year that is available to
20    offset a liability, the earliest credit arising under this
21    subsection shall be applied first. A credit allowed under
22    this subsection may be sold to a buyer as part of a sale of
23    all or part of the remediation site for which the credit
24    was granted. The purchaser of a remediation site and the
25    tax credit shall succeed to the unused credit and remaining
26    carry-forward period of the seller. To perfect the

 

 

HB3917- 32 -LRB097 15567 HLH 60707 b

1    transfer, the assignor shall record the transfer in the
2    chain of title for the site and provide written notice to
3    the Director of the Illinois Department of Revenue of the
4    assignor's intent to sell the remediation site and the
5    amount of the tax credit to be transferred as a portion of
6    the sale. In no event may a credit be transferred to any
7    taxpayer if the taxpayer or a related party would not be
8    eligible under the provisions of subsection (i).
9        (iii) For purposes of this Section, the term "site"
10    shall have the same meaning as under Section 58.2 of the
11    Environmental Protection Act.
12    (m) Education expense credit. Beginning with tax years
13ending after December 31, 1999, a taxpayer who is the custodian
14of one or more qualifying pupils shall be allowed a credit
15against the tax imposed by subsections (a) and (b) of this
16Section for qualified education expenses incurred on behalf of
17the qualifying pupils. The credit shall be equal to 25% of
18qualified education expenses, but in no event may the total
19credit under this subsection claimed by a family that is the
20custodian of qualifying pupils exceed $500. In no event shall a
21credit under this subsection reduce the taxpayer's liability
22under this Act to less than zero. This subsection is exempt
23from the provisions of Section 250 of this Act.
24    For purposes of this subsection:
25    "Qualifying pupils" means individuals who (i) are
26residents of the State of Illinois, (ii) are under the age of

 

 

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121 at the close of the school year for which a credit is
2sought, and (iii) during the school year for which a credit is
3sought were full-time pupils enrolled in a kindergarten through
4twelfth grade education program at any school, as defined in
5this subsection.
6    "Qualified education expense" means the amount incurred on
7behalf of a qualifying pupil in excess of $250 for tuition,
8book fees, and lab fees at the school in which the pupil is
9enrolled during the regular school year.
10    "School" means any public or nonpublic elementary or
11secondary school in Illinois that is in compliance with Title
12VI of the Civil Rights Act of 1964 and attendance at which
13satisfies the requirements of Section 26-1 of the School Code,
14except that nothing shall be construed to require a child to
15attend any particular public or nonpublic school to qualify for
16the credit under this Section.
17    "Custodian" means, with respect to qualifying pupils, an
18Illinois resident who is a parent, the parents, a legal
19guardian, or the legal guardians of the qualifying pupils.
20    (n) River Edge Redevelopment Zone site remediation tax
21credit.
22        (i) For tax years ending on or after December 31, 2006,
23    a taxpayer shall be allowed a credit against the tax
24    imposed by subsections (a) and (b) of this Section for
25    certain amounts paid for unreimbursed eligible remediation
26    costs, as specified in this subsection. For purposes of

 

 

HB3917- 34 -LRB097 15567 HLH 60707 b

1    this Section, "unreimbursed eligible remediation costs"
2    means costs approved by the Illinois Environmental
3    Protection Agency ("Agency") under Section 58.14a of the
4    Environmental Protection Act that were paid in performing
5    environmental remediation at a site within a River Edge
6    Redevelopment Zone for which a No Further Remediation
7    Letter was issued by the Agency and recorded under Section
8    58.10 of the Environmental Protection Act. The credit must
9    be claimed for the taxable year in which Agency approval of
10    the eligible remediation costs is granted. The credit is
11    not available to any taxpayer if the taxpayer or any
12    related party caused or contributed to, in any material
13    respect, a release of regulated substances on, in, or under
14    the site that was identified and addressed by the remedial
15    action pursuant to the Site Remediation Program of the
16    Environmental Protection Act. Determinations as to credit
17    availability for purposes of this Section shall be made
18    consistent with rules adopted by the Pollution Control
19    Board pursuant to the Illinois Administrative Procedure
20    Act for the administration and enforcement of Section 58.9
21    of the Environmental Protection Act. For purposes of this
22    Section, "taxpayer" includes a person whose tax attributes
23    the taxpayer has succeeded to under Section 381 of the
24    Internal Revenue Code and "related party" includes the
25    persons disallowed a deduction for losses by paragraphs
26    (b), (c), and (f)(1) of Section 267 of the Internal Revenue

 

 

HB3917- 35 -LRB097 15567 HLH 60707 b

1    Code by virtue of being a related taxpayer, as well as any
2    of its partners. The credit allowed against the tax imposed
3    by subsections (a) and (b) shall be equal to 25% of the
4    unreimbursed eligible remediation costs in excess of
5    $100,000 per site.
6        (ii) A credit allowed under this subsection that is
7    unused in the year the credit is earned may be carried
8    forward to each of the 5 taxable years following the year
9    for which the credit is first earned until it is used. This
10    credit shall be applied first to the earliest year for
11    which there is a liability. If there is a credit under this
12    subsection from more than one tax year that is available to
13    offset a liability, the earliest credit arising under this
14    subsection shall be applied first. A credit allowed under
15    this subsection may be sold to a buyer as part of a sale of
16    all or part of the remediation site for which the credit
17    was granted. The purchaser of a remediation site and the
18    tax credit shall succeed to the unused credit and remaining
19    carry-forward period of the seller. To perfect the
20    transfer, the assignor shall record the transfer in the
21    chain of title for the site and provide written notice to
22    the Director of the Illinois Department of Revenue of the
23    assignor's intent to sell the remediation site and the
24    amount of the tax credit to be transferred as a portion of
25    the sale. In no event may a credit be transferred to any
26    taxpayer if the taxpayer or a related party would not be

 

 

HB3917- 36 -LRB097 15567 HLH 60707 b

1    eligible under the provisions of subsection (i).
2        (iii) For purposes of this Section, the term "site"
3    shall have the same meaning as under Section 58.2 of the
4    Environmental Protection Act.
5(Source: P.A. 96-115, eff. 7-31-09; 96-116, eff. 7-31-09;
696-937, eff. 6-23-10; 96-1000, eff. 7-2-10; 96-1496, eff.
71-13-11; 97-2, eff. 5-6-11.)
 
8    (35 ILCS 5/901)  (from Ch. 120, par. 9-901)
9    Sec. 901. Collection Authority.
10    (a) In general.
11    The Department shall collect the taxes imposed by this Act.
12The Department shall collect certified past due child support
13amounts under Section 2505-650 of the Department of Revenue Law
14(20 ILCS 2505/2505-650). Except as provided in subsections (c),
15(e), (f), and (g) of this Section, money collected pursuant to
16subsections (a) and (b) of Section 201 of this Act shall be
17paid into the General Revenue Fund in the State treasury; money
18collected pursuant to subsections (c) and (d) of Section 201 of
19this Act shall be paid into the Personal Property Tax
20Replacement Fund, a special fund in the State Treasury; and
21money collected under Section 2505-650 of the Department of
22Revenue Law (20 ILCS 2505/2505-650) shall be paid into the
23Child Support Enforcement Trust Fund, a special fund outside
24the State Treasury, or to the State Disbursement Unit
25established under Section 10-26 of the Illinois Public Aid

 

 

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1Code, as directed by the Department of Healthcare and Family
2Services.
3    (b) Local Government Distributive Fund.
4    Beginning August 1, 1969, and continuing through June 30,
51994, the Treasurer shall transfer each month from the General
6Revenue Fund to a special fund in the State treasury, to be
7known as the "Local Government Distributive Fund", an amount
8equal to 1/12 of the net revenue realized from the tax imposed
9by subsections (a) and (b) of Section 201 of this Act during
10the preceding month. Beginning July 1, 1994, and continuing
11through June 30, 1995, the Treasurer shall transfer each month
12from the General Revenue Fund to the Local Government
13Distributive Fund an amount equal to 1/11 of the net revenue
14realized from the tax imposed by subsections (a) and (b) of
15Section 201 of this Act during the preceding month. Beginning
16July 1, 1995 and continuing through January 31, 2011, the
17Treasurer shall transfer each month from the General Revenue
18Fund to the Local Government Distributive Fund an amount equal
19to the net of (i) 1/10 of the net revenue realized from the tax
20imposed by subsections (a) and (b) of Section 201 of the
21Illinois Income Tax Act during the preceding month (ii) minus,
22beginning July 1, 2003 and ending June 30, 2004, $6,666,666,
23and beginning July 1, 2004, zero. Beginning February 1, 2011,
24and continuing through January 31, 2012 January 31, 2015, the
25Treasurer shall transfer each month from the General Revenue
26Fund to the Local Government Distributive Fund an amount equal

 

 

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1to the sum of (i) 6% (10% of the ratio of the 3% individual
2income tax rate prior to 2011 to the 5% individual income tax
3rate after 2010) of the net revenue realized from the tax
4imposed by subsections (a) and (b) of Section 201 of this Act
5upon individuals, trusts, and estates during the preceding
6month and (ii) 6.86% (10% of the ratio of the 4.8% corporate
7income tax rate prior to 2011 to the 7% corporate income tax
8rate after 2010) of the net revenue realized from the tax
9imposed by subsections (a) and (b) of Section 201 of this Act
10upon corporations during the preceding month. Beginning
11February 1, 2012, and continuing through January 31, 2015, the
12Treasurer shall transfer each month from the General Revenue
13Fund to the Local Government Distributive Fund an amount equal
14to the sum of (i) 6% (10% of the ratio of the 3% individual
15income tax rate prior to 2011 to the 5% individual income tax
16rate after 2010) of the net revenue realized from the tax
17imposed by subsections (a) and (b) of Section 201 of this Act
18upon individuals, trusts, and estates during the preceding
19month and (ii) 10% of the net revenue realized from the tax
20imposed by subsections (a) and (b) of Section 201 of this Act
21upon corporations during the preceding month. Beginning
22February 1, 2015 and continuing through January 31, 2025, the
23Treasurer shall transfer each month from the General Revenue
24Fund to the Local Government Distributive Fund an amount equal
25to the sum of (i) 8% (10% of the ratio of the 3% individual
26income tax rate prior to 2011 to the 3.75% individual income

 

 

HB3917- 39 -LRB097 15567 HLH 60707 b

1tax rate after 2014) of the net revenue realized from the tax
2imposed by subsections (a) and (b) of Section 201 of this Act
3upon individuals, trusts, and estates during the preceding
4month and (ii) 10% 9.14% (10% of the ratio of the 4.8%
5corporate income tax rate prior to 2011 to the 5.25% corporate
6income tax rate after 2014) of the net revenue realized from
7the tax imposed by subsections (a) and (b) of Section 201 of
8this Act upon corporations during the preceding month.
9Beginning February 1, 2025, the Treasurer shall transfer each
10month from the General Revenue Fund to the Local Government
11Distributive Fund an amount equal to the sum of (i) 9.23% (10%
12of the ratio of the 3% individual income tax rate prior to 2011
13to the 3.25% individual income tax rate after 2024) of the net
14revenue realized from the tax imposed by subsections (a) and
15(b) of Section 201 of this Act upon individuals, trusts, and
16estates during the preceding month and (ii) 10% of the net
17revenue realized from the tax imposed by subsections (a) and
18(b) of Section 201 of this Act upon corporations during the
19preceding month. Net revenue realized for a month shall be
20defined as the revenue from the tax imposed by subsections (a)
21and (b) of Section 201 of this Act which is deposited in the
22General Revenue Fund, the Education Assistance Fund, the Income
23Tax Surcharge Local Government Distributive Fund, the Fund for
24the Advancement of Education, and the Commitment to Human
25Services Fund during the month minus the amount paid out of the
26General Revenue Fund in State warrants during that same month

 

 

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1as refunds to taxpayers for overpayment of liability under the
2tax imposed by subsections (a) and (b) of Section 201 of this
3Act.
4    (c) Deposits Into Income Tax Refund Fund.
5        (1) Beginning on January 1, 1989 and thereafter, the
6    Department shall deposit a percentage of the amounts
7    collected pursuant to subsections (a) and (b)(1), (2), and
8    (3), of Section 201 of this Act into a fund in the State
9    treasury known as the Income Tax Refund Fund. The
10    Department shall deposit 6% of such amounts during the
11    period beginning January 1, 1989 and ending on June 30,
12    1989. Beginning with State fiscal year 1990 and for each
13    fiscal year thereafter, the percentage deposited into the
14    Income Tax Refund Fund during a fiscal year shall be the
15    Annual Percentage. For fiscal years 1999 through 2001, the
16    Annual Percentage shall be 7.1%. For fiscal year 2003, the
17    Annual Percentage shall be 8%. For fiscal year 2004, the
18    Annual Percentage shall be 11.7%. Upon the effective date
19    of this amendatory Act of the 93rd General Assembly, the
20    Annual Percentage shall be 10% for fiscal year 2005. For
21    fiscal year 2006, the Annual Percentage shall be 9.75%. For
22    fiscal year 2007, the Annual Percentage shall be 9.75%. For
23    fiscal year 2008, the Annual Percentage shall be 7.75%. For
24    fiscal year 2009, the Annual Percentage shall be 9.75%. For
25    fiscal year 2010, the Annual Percentage shall be 9.75%. For
26    fiscal year 2011, the Annual Percentage shall be 8.75%. For

 

 

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1    fiscal year 2012, the Annual Percentage shall be 8.75%. For
2    all other fiscal years, the Annual Percentage shall be
3    calculated as a fraction, the numerator of which shall be
4    the amount of refunds approved for payment by the
5    Department during the preceding fiscal year as a result of
6    overpayment of tax liability under subsections (a) and
7    (b)(1), (2), and (3) of Section 201 of this Act plus the
8    amount of such refunds remaining approved but unpaid at the
9    end of the preceding fiscal year, minus the amounts
10    transferred into the Income Tax Refund Fund from the
11    Tobacco Settlement Recovery Fund, and the denominator of
12    which shall be the amounts which will be collected pursuant
13    to subsections (a) and (b)(1), (2), and (3) of Section 201
14    of this Act during the preceding fiscal year; except that
15    in State fiscal year 2002, the Annual Percentage shall in
16    no event exceed 7.6%. The Director of Revenue shall certify
17    the Annual Percentage to the Comptroller on the last
18    business day of the fiscal year immediately preceding the
19    fiscal year for which it is to be effective.
20        (2) Beginning on January 1, 1989 and thereafter, the
21    Department shall deposit a percentage of the amounts
22    collected pursuant to subsections (a) and (b)(6), (7), and
23    (8), (c) and (d) of Section 201 of this Act into a fund in
24    the State treasury known as the Income Tax Refund Fund. The
25    Department shall deposit 18% of such amounts during the
26    period beginning January 1, 1989 and ending on June 30,

 

 

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1    1989. Beginning with State fiscal year 1990 and for each
2    fiscal year thereafter, the percentage deposited into the
3    Income Tax Refund Fund during a fiscal year shall be the
4    Annual Percentage. For fiscal years 1999, 2000, and 2001,
5    the Annual Percentage shall be 19%. For fiscal year 2003,
6    the Annual Percentage shall be 27%. For fiscal year 2004,
7    the Annual Percentage shall be 32%. Upon the effective date
8    of this amendatory Act of the 93rd General Assembly, the
9    Annual Percentage shall be 24% for fiscal year 2005. For
10    fiscal year 2006, the Annual Percentage shall be 20%. For
11    fiscal year 2007, the Annual Percentage shall be 17.5%. For
12    fiscal year 2008, the Annual Percentage shall be 15.5%. For
13    fiscal year 2009, the Annual Percentage shall be 17.5%. For
14    fiscal year 2010, the Annual Percentage shall be 17.5%. For
15    fiscal year 2011, the Annual Percentage shall be 17.5%. For
16    fiscal year 2012, the Annual Percentage shall be 17.5%. For
17    all other fiscal years, the Annual Percentage shall be
18    calculated as a fraction, the numerator of which shall be
19    the amount of refunds approved for payment by the
20    Department during the preceding fiscal year as a result of
21    overpayment of tax liability under subsections (a) and
22    (b)(6), (7), and (8), (c) and (d) of Section 201 of this
23    Act plus the amount of such refunds remaining approved but
24    unpaid at the end of the preceding fiscal year, and the
25    denominator of which shall be the amounts which will be
26    collected pursuant to subsections (a) and (b)(6), (7), and

 

 

HB3917- 43 -LRB097 15567 HLH 60707 b

1    (8), (c) and (d) of Section 201 of this Act during the
2    preceding fiscal year; except that in State fiscal year
3    2002, the Annual Percentage shall in no event exceed 23%.
4    The Director of Revenue shall certify the Annual Percentage
5    to the Comptroller on the last business day of the fiscal
6    year immediately preceding the fiscal year for which it is
7    to be effective.
8        (3) The Comptroller shall order transferred and the
9    Treasurer shall transfer from the Tobacco Settlement
10    Recovery Fund to the Income Tax Refund Fund (i) $35,000,000
11    in January, 2001, (ii) $35,000,000 in January, 2002, and
12    (iii) $35,000,000 in January, 2003.
13    (d) Expenditures from Income Tax Refund Fund.
14        (1) Beginning January 1, 1989, money in the Income Tax
15    Refund Fund shall be expended exclusively for the purpose
16    of paying refunds resulting from overpayment of tax
17    liability under Section 201 of this Act, for paying rebates
18    under Section 208.1 in the event that the amounts in the
19    Homeowners' Tax Relief Fund are insufficient for that
20    purpose, and for making transfers pursuant to this
21    subsection (d).
22        (2) The Director shall order payment of refunds
23    resulting from overpayment of tax liability under Section
24    201 of this Act from the Income Tax Refund Fund only to the
25    extent that amounts collected pursuant to Section 201 of
26    this Act and transfers pursuant to this subsection (d) and

 

 

HB3917- 44 -LRB097 15567 HLH 60707 b

1    item (3) of subsection (c) have been deposited and retained
2    in the Fund.
3        (3) As soon as possible after the end of each fiscal
4    year, the Director shall order transferred and the State
5    Treasurer and State Comptroller shall transfer from the
6    Income Tax Refund Fund to the Personal Property Tax
7    Replacement Fund an amount, certified by the Director to
8    the Comptroller, equal to the excess of the amount
9    collected pursuant to subsections (c) and (d) of Section
10    201 of this Act deposited into the Income Tax Refund Fund
11    during the fiscal year over the amount of refunds resulting
12    from overpayment of tax liability under subsections (c) and
13    (d) of Section 201 of this Act paid from the Income Tax
14    Refund Fund during the fiscal year.
15        (4) As soon as possible after the end of each fiscal
16    year, the Director shall order transferred and the State
17    Treasurer and State Comptroller shall transfer from the
18    Personal Property Tax Replacement Fund to the Income Tax
19    Refund Fund an amount, certified by the Director to the
20    Comptroller, equal to the excess of the amount of refunds
21    resulting from overpayment of tax liability under
22    subsections (c) and (d) of Section 201 of this Act paid
23    from the Income Tax Refund Fund during the fiscal year over
24    the amount collected pursuant to subsections (c) and (d) of
25    Section 201 of this Act deposited into the Income Tax
26    Refund Fund during the fiscal year.

 

 

HB3917- 45 -LRB097 15567 HLH 60707 b

1        (4.5) As soon as possible after the end of fiscal year
2    1999 and of each fiscal year thereafter, the Director shall
3    order transferred and the State Treasurer and State
4    Comptroller shall transfer from the Income Tax Refund Fund
5    to the General Revenue Fund any surplus remaining in the
6    Income Tax Refund Fund as of the end of such fiscal year;
7    excluding for fiscal years 2000, 2001, and 2002 amounts
8    attributable to transfers under item (3) of subsection (c)
9    less refunds resulting from the earned income tax credit.
10        (5) This Act shall constitute an irrevocable and
11    continuing appropriation from the Income Tax Refund Fund
12    for the purpose of paying refunds upon the order of the
13    Director in accordance with the provisions of this Section.
14    (e) Deposits into the Education Assistance Fund and the
15Income Tax Surcharge Local Government Distributive Fund.
16    On July 1, 1991, and thereafter, of the amounts collected
17pursuant to subsections (a) and (b) of Section 201 of this Act,
18minus deposits into the Income Tax Refund Fund, the Department
19shall deposit 7.3% into the Education Assistance Fund in the
20State Treasury. Beginning July 1, 1991, and continuing through
21January 31, 1993, of the amounts collected pursuant to
22subsections (a) and (b) of Section 201 of the Illinois Income
23Tax Act, minus deposits into the Income Tax Refund Fund, the
24Department shall deposit 3.0% into the Income Tax Surcharge
25Local Government Distributive Fund in the State Treasury.
26Beginning February 1, 1993 and continuing through June 30,

 

 

HB3917- 46 -LRB097 15567 HLH 60707 b

11993, of the amounts collected pursuant to subsections (a) and
2(b) of Section 201 of the Illinois Income Tax Act, minus
3deposits into the Income Tax Refund Fund, the Department shall
4deposit 4.4% into the Income Tax Surcharge Local Government
5Distributive Fund in the State Treasury. Beginning July 1,
61993, and continuing through June 30, 1994, of the amounts
7collected under subsections (a) and (b) of Section 201 of this
8Act, minus deposits into the Income Tax Refund Fund, the
9Department shall deposit 1.475% into the Income Tax Surcharge
10Local Government Distributive Fund in the State Treasury.
11    (f) Deposits into the Fund for the Advancement of
12Education. Beginning February 1, 2015, the Department shall
13deposit the following portions of the revenue realized from the
14tax imposed upon individuals, trusts, and estates by
15subsections (a) and (b) of Section 201 of this Act during the
16preceding month, minus deposits into the Income Tax Refund
17Fund, into the Fund for the Advancement of Education:
18        (1) beginning February 1, 2015, and prior to February
19    1, 2025, 1/30; and
20        (2) beginning February 1, 2025, 1/26.
21    If the rate of tax imposed by subsection (a) and (b) of
22Section 201 is reduced pursuant to Section 201.5 of this Act,
23the Department shall not make the deposits required by this
24subsection (f) on or after the effective date of the reduction.
25    (g) Deposits into the Commitment to Human Services Fund.
26Beginning February 1, 2015, the Department shall deposit the

 

 

HB3917- 47 -LRB097 15567 HLH 60707 b

1following portions of the revenue realized from the tax imposed
2upon individuals, trusts, and estates by subsections (a) and
3(b) of Section 201 of this Act during the preceding month,
4minus deposits into the Income Tax Refund Fund, into the
5Commitment to Human Services Fund:
6        (1) beginning February 1, 2015, and prior to February
7    1, 2025, 1/30; and
8        (2) beginning February 1, 2025, 1/26.
9    If the rate of tax imposed by subsection (a) and (b) of
10Section 201 is reduced pursuant to Section 201.5 of this Act,
11the Department shall not make the deposits required by this
12subsection (g) on or after the effective date of the reduction.
13(Source: P.A. 96-45, eff. 7-15-09; 96-328, eff. 8-11-09;
1496-959, eff. 7-1-10; 96-1496, eff. 1-13-11; 97-72, eff.
157-1-11.)
 
16    Section 99. Effective date. This Act takes effect upon
17becoming law.