97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB2522

 

Introduced 11/8/2011, by Sen. Kyle McCarter

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/201  from Ch. 120, par. 2-201
35 ILCS 5/207  from Ch. 120, par. 2-207
35 ILCS 405/Act rep.

    Amends the Illinois Income Tax Act. Provides that, for individuals, trusts, and estates, (i) for taxable years beginning on or after January 1, 2015 and ending prior to January 1, 2016, the rate of tax imposed under the Act is 3.75%, (ii) for taxable years beginning on or after January 1, 2016 and ending prior to January 1, 2017, the rate of tax imposed under the Act is 3.5%, and (iii) for taxable years beginning on or after January 1, 2017, the rate of tax imposed under the Act is 3%. Provides that no tax shall be imposed under the Act on corporations for taxable years beginning on or after January 1, 2015. Restores a net loss carryforward deduction that was suspended for taxable years ending after December 31, 2010 and prior to December 31, 2014. Provides that no net loss carryover deduction shall be allowed for corporations for any taxable year ending after December 31, 2015. Repeals the Illinois Estate and Generation-Skipping Transfer Tax Act. Effective immediately.


LRB097 14129 HLH 58821 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB2522LRB097 14129 HLH 58821 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 207 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, 2016 January 1, 2025, an
5    amount equal to 3.75% of the taxpayer's net income for the
6    taxable year.
7        (5.3) In the case of an individual, trust, or estate,
8    for taxable years beginning prior to January 1, 2016
9    January 1, 2025, and ending after December 31, 2015
10    December 31, 2024, an amount equal to the sum of (i) 3.75%
11    of the taxpayer's net income for the period prior to
12    January 1, 2016 January 1, 2025, as calculated under
13    Section 202.5, and (ii) 3.5% 3.25% of the taxpayer's net
14    income for the period after December 31, 2015 December 31,
15    2024, as calculated under Section 202.5.
16        (5.4) In the case of an individual, trust, or estate,
17    for taxable years beginning on or after January 1, 2016,
18    and ending prior to January 1, 2017 January 1, 2025, an
19    amount equal to 3.5% 3.25% of the taxpayer's net income for
20    the taxable year.
21        (5.5) In the case of an individual, trust, or estate,
22    for taxable years beginning prior to January 1, 2017, and
23    ending after December 31, 2016, an amount equal to the sum
24    of (i) 3.5% of the taxpayer's net income for the period
25    prior to January 1, 2017, as calculated under Section
26    202.5, and (ii) 3% of the taxpayer's net income for the

 

 

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1    period after December 31, 2016, as calculated under Section
2    202.5.
3        (5.6) In the case of an individual, trust, or estate,
4    for taxable years beginning on or after January 1, 2017, 3%
5    of the taxpayer's net income for the taxable year.
6        (6) In the case of a corporation, for taxable years
7    ending prior to July 1, 1989, an amount equal to 4% of the
8    taxpayer's net income for the taxable year.
9        (7) In the case of a corporation, for taxable years
10    beginning prior to July 1, 1989 and ending after June 30,
11    1989, an amount equal to the sum of (i) 4% of the
12    taxpayer's net income for the period prior to July 1, 1989,
13    as calculated under Section 202.3, and (ii) 4.8% of the
14    taxpayer's net income for the period after June 30, 1989,
15    as calculated under Section 202.3.
16        (8) In the case of a corporation, for taxable years
17    beginning after June 30, 1989, and ending prior to January
18    1, 2011, an amount equal to 4.8% of the taxpayer's net
19    income for the taxable year.
20        (9) In the case of a corporation, for taxable years
21    beginning prior to January 1, 2011, and ending after
22    December 31, 2010, an amount equal to the sum of (i) 4.8%
23    of the taxpayer's net income for the period prior to
24    January 1, 2011, as calculated under Section 202.5, and
25    (ii) 7% of the taxpayer's net income for the period after
26    December 31, 2010, as calculated under Section 202.5.

 

 

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1        (10) In the case of a corporation, for taxable years
2    beginning on or after January 1, 2011, and ending prior to
3    January 1, 2015, an amount equal to 7% of the taxpayer's
4    net income for the taxable year.
5        (11) In the case of a corporation, for taxable years
6    beginning prior to January 1, 2015, and ending after
7    December 31, 2014, an amount equal to the sum of (i) 7% of
8    the taxpayer's net income for the period prior to January
9    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
10    of the taxpayer's net income for the period after December
11    31, 2014, as calculated under Section 202.5.
12        (12) No tax shall be imposed under this Act on
13    corporations for taxable years beginning on or after
14    January 1, 2015. In the case of a corporation, for taxable
15    years beginning on or after January 1, 2015, and ending
16    prior to January 1, 2025, an amount equal to 5.25% of the
17    taxpayer's net income for the taxable year.
18        (13) (Blank). In the case of a corporation, for taxable
19    years beginning prior to January 1, 2025, and ending after
20    December 31, 2024, an amount equal to the sum of (i) 5.25%
21    of the taxpayer's net income for the period prior to
22    January 1, 2025, as calculated under Section 202.5, and
23    (ii) 4.8% of the taxpayer's net income for the period after
24    December 31, 2024, as calculated under Section 202.5.
25        (14) (Blank). In the case of a corporation, for taxable
26    years beginning on or after January 1, 2025, an amount

 

 

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1    equal to 4.8% of the taxpayer's net income for the taxable
2    year.
3    The rates under this subsection (b) are subject to the
4provisions of Section 201.5.
5    (c) Personal Property Tax Replacement Income Tax.
6Beginning on July 1, 1979 and thereafter, in addition to such
7income tax, there is also hereby imposed the Personal Property
8Tax Replacement Income Tax measured by net income on every
9corporation (including Subchapter S corporations), partnership
10and trust, for each taxable year ending after June 30, 1979.
11Such taxes are imposed on the privilege of earning or receiving
12income in or as a resident of this State. The Personal Property
13Tax Replacement Income Tax shall be in addition to the income
14tax imposed by subsections (a) and (b) of this Section and in
15addition to all other occupation or privilege taxes imposed by
16this State or by any municipal corporation or political
17subdivision thereof.
18    (d) Additional Personal Property Tax Replacement Income
19Tax Rates. The personal property tax replacement income tax
20imposed by this subsection and subsection (c) of this Section
21in the case of a corporation, other than a Subchapter S
22corporation and except as adjusted by subsection (d-1), shall
23be an additional amount equal to 2.85% of such taxpayer's net
24income for the taxable year, except that beginning on January
251, 1981, and thereafter, the rate of 2.85% specified in this
26subsection shall be reduced to 2.5%, and in the case of a

 

 

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1partnership, trust or a Subchapter S corporation shall be an
2additional amount equal to 1.5% of such taxpayer's net income
3for the taxable year.
4    (d-1) Rate reduction for certain foreign insurers. In the
5case of a foreign insurer, as defined by Section 35A-5 of the
6Illinois Insurance Code, whose state or country of domicile
7imposes on insurers domiciled in Illinois a retaliatory tax
8(excluding any insurer whose premiums from reinsurance assumed
9are 50% or more of its total insurance premiums as determined
10under paragraph (2) of subsection (b) of Section 304, except
11that for purposes of this determination premiums from
12reinsurance do not include premiums from inter-affiliate
13reinsurance arrangements), beginning with taxable years ending
14on or after December 31, 1999, the sum of the rates of tax
15imposed by subsections (b) and (d) shall be reduced (but not
16increased) to the rate at which the total amount of tax imposed
17under this Act, net of all credits allowed under this Act,
18shall equal (i) the total amount of tax that would be imposed
19on the foreign insurer's net income allocable to Illinois for
20the taxable year by such foreign insurer's state or country of
21domicile if that net income were subject to all income taxes
22and taxes measured by net income imposed by such foreign
23insurer's state or country of domicile, net of all credits
24allowed or (ii) a rate of zero if no such tax is imposed on such
25income by the foreign insurer's state of domicile. For the
26purposes of this subsection (d-1), an inter-affiliate includes

 

 

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1a mutual insurer under common management.
2        (1) For the purposes of subsection (d-1), in no event
3    shall the sum of the rates of tax imposed by subsections
4    (b) and (d) be reduced below the rate at which the sum of:
5            (A) the total amount of tax imposed on such foreign
6        insurer under this Act for a taxable year, net of all
7        credits allowed under this Act, plus
8            (B) the privilege tax imposed by Section 409 of the
9        Illinois Insurance Code, the fire insurance company
10        tax imposed by Section 12 of the Fire Investigation
11        Act, and the fire department taxes imposed under
12        Section 11-10-1 of the Illinois Municipal Code,
13    equals 1.25% for taxable years ending prior to December 31,
14    2003, or 1.75% for taxable years ending on or after
15    December 31, 2003, of the net taxable premiums written for
16    the taxable year, as described by subsection (1) of Section
17    409 of the Illinois Insurance Code. This paragraph will in
18    no event increase the rates imposed under subsections (b)
19    and (d).
20        (2) Any reduction in the rates of tax imposed by this
21    subsection shall be applied first against the rates imposed
22    by subsection (b) and only after the tax imposed by
23    subsection (a) net of all credits allowed under this
24    Section other than the credit allowed under subsection (i)
25    has been reduced to zero, against the rates imposed by
26    subsection (d).

 

 

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1    This subsection (d-1) is exempt from the provisions of
2Section 250.
3    (e) Investment credit. A taxpayer shall be allowed a credit
4against the Personal Property Tax Replacement Income Tax for
5investment in qualified property.
6        (1) A taxpayer shall be allowed a credit equal to .5%
7    of the basis of qualified property placed in service during
8    the taxable year, provided such property is placed in
9    service on or after July 1, 1984. There shall be allowed an
10    additional credit equal to .5% of the basis of qualified
11    property placed in service during the taxable year,
12    provided such property is placed in service on or after
13    July 1, 1986, and the taxpayer's base employment within
14    Illinois has increased by 1% or more over the preceding
15    year as determined by the taxpayer's employment records
16    filed with the Illinois Department of Employment Security.
17    Taxpayers who are new to Illinois shall be deemed to have
18    met the 1% growth in base employment for the first year in
19    which they file employment records with the Illinois
20    Department of Employment Security. The provisions added to
21    this Section by Public Act 85-1200 (and restored by Public
22    Act 87-895) shall be construed as declaratory of existing
23    law and not as a new enactment. If, in any year, the
24    increase in base employment within Illinois over the
25    preceding year is less than 1%, the additional credit shall
26    be limited to that percentage times a fraction, the

 

 

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1    numerator of which is .5% and the denominator of which is
2    1%, but shall not exceed .5%. The investment credit shall
3    not be allowed to the extent that it would reduce a
4    taxpayer's liability in any tax year below zero, nor may
5    any credit for qualified property be allowed for any year
6    other than the year in which the property was placed in
7    service in Illinois. For tax years ending on or after
8    December 31, 1987, and on or before December 31, 1988, the
9    credit shall be allowed for the tax year in which the
10    property is placed in service, or, if the amount of the
11    credit exceeds the tax liability for that year, whether it
12    exceeds the original liability or the liability as later
13    amended, such excess may be carried forward and applied to
14    the tax liability of the 5 taxable years following the
15    excess credit years if the taxpayer (i) makes investments
16    which cause the creation of a minimum of 2,000 full-time
17    equivalent jobs in Illinois, (ii) is located in an
18    enterprise zone established pursuant to the Illinois
19    Enterprise Zone Act and (iii) is certified by the
20    Department of Commerce and Community Affairs (now
21    Department of Commerce and Economic Opportunity) as
22    complying with the requirements specified in clause (i) and
23    (ii) by July 1, 1986. The Department of Commerce and
24    Community Affairs (now Department of Commerce and Economic
25    Opportunity) shall notify the Department of Revenue of all
26    such certifications immediately. For tax years ending

 

 

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1    after December 31, 1988, the credit shall be allowed for
2    the tax year in which the property is placed in service,
3    or, if the amount of the credit exceeds the tax liability
4    for that year, whether it exceeds the original liability or
5    the liability as later amended, such excess may be carried
6    forward and applied to the tax liability of the 5 taxable
7    years following the excess credit years. The credit shall
8    be applied to the earliest year for which there is a
9    liability. If there is credit from more than one tax year
10    that is available to offset a liability, earlier credit
11    shall be applied first.
12        (2) The term "qualified property" means property
13    which:
14            (A) is tangible, whether new or used, including
15        buildings and structural components of buildings and
16        signs that are real property, but not including land or
17        improvements to real property that are not a structural
18        component of a building such as landscaping, sewer
19        lines, local access roads, fencing, parking lots, and
20        other appurtenances;
21            (B) is depreciable pursuant to Section 167 of the
22        Internal Revenue Code, except that "3-year property"
23        as defined in Section 168(c)(2)(A) of that Code is not
24        eligible for the credit provided by this subsection
25        (e);
26            (C) is acquired by purchase as defined in Section

 

 

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1        179(d) of the Internal Revenue Code;
2            (D) is used in Illinois by a taxpayer who is
3        primarily engaged in manufacturing, or in mining coal
4        or fluorite, or in retailing, or was placed in service
5        on or after July 1, 2006 in a River Edge Redevelopment
6        Zone established pursuant to the River Edge
7        Redevelopment Zone Act; and
8            (E) has not previously been used in Illinois in
9        such a manner and by such a person as would qualify for
10        the credit provided by this subsection (e) or
11        subsection (f).
12        (3) For purposes of this subsection (e),
13    "manufacturing" means the material staging and production
14    of tangible personal property by procedures commonly
15    regarded as manufacturing, processing, fabrication, or
16    assembling which changes some existing material into new
17    shapes, new qualities, or new combinations. For purposes of
18    this subsection (e) the term "mining" shall have the same
19    meaning as the term "mining" in Section 613(c) of the
20    Internal Revenue Code. For purposes of this subsection (e),
21    the term "retailing" means the sale of tangible personal
22    property for use or consumption and not for resale, or
23    services rendered in conjunction with the sale of tangible
24    personal property for use or consumption and not for
25    resale. For purposes of this subsection (e), "tangible
26    personal property" has the same meaning as when that term

 

 

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1    is used in the Retailers' Occupation Tax Act, and, for
2    taxable years ending after December 31, 2008, does not
3    include the generation, transmission, or distribution of
4    electricity.
5        (4) The basis of qualified property shall be the basis
6    used to compute the depreciation deduction for federal
7    income tax purposes.
8        (5) If the basis of the property for federal income tax
9    depreciation purposes is increased after it has been placed
10    in service in Illinois by the taxpayer, the amount of such
11    increase shall be deemed property placed in service on the
12    date of such increase in basis.
13        (6) The term "placed in service" shall have the same
14    meaning as under Section 46 of the Internal Revenue Code.
15        (7) If during any taxable year, any property ceases to
16    be qualified property in the hands of the taxpayer within
17    48 months after being placed in service, or the situs of
18    any qualified property is moved outside Illinois within 48
19    months after being placed in service, the Personal Property
20    Tax Replacement Income Tax for such taxable year shall be
21    increased. Such increase shall be determined by (i)
22    recomputing the investment credit which would have been
23    allowed for the year in which credit for such property was
24    originally allowed by eliminating such property from such
25    computation and, (ii) subtracting such recomputed credit
26    from the amount of credit previously allowed. For the

 

 

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1    purposes of this paragraph (7), a reduction of the basis of
2    qualified property resulting from a redetermination of the
3    purchase price shall be deemed a disposition of qualified
4    property to the extent of such reduction.
5        (8) Unless the investment credit is extended by law,
6    the basis of qualified property shall not include costs
7    incurred after December 31, 2013, except for costs incurred
8    pursuant to a binding contract entered into on or before
9    December 31, 2013.
10        (9) Each taxable year ending before December 31, 2000,
11    a partnership may elect to pass through to its partners the
12    credits to which the partnership is entitled under this
13    subsection (e) for the taxable year. A partner may use the
14    credit allocated to him or her under this paragraph only
15    against the tax imposed in subsections (c) and (d) of this
16    Section. If the partnership makes that election, those
17    credits shall be allocated among the partners in the
18    partnership in accordance with the rules set forth in
19    Section 704(b) of the Internal Revenue Code, and the rules
20    promulgated under that Section, and the allocated amount of
21    the credits shall be allowed to the partners for that
22    taxable year. The partnership shall make this election on
23    its Personal Property Tax Replacement Income Tax return for
24    that taxable year. The election to pass through the credits
25    shall be irrevocable.
26        For taxable years ending on or after December 31, 2000,

 

 

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1    a partner that qualifies its partnership for a subtraction
2    under subparagraph (I) of paragraph (2) of subsection (d)
3    of Section 203 or a shareholder that qualifies a Subchapter
4    S corporation for a subtraction under subparagraph (S) of
5    paragraph (2) of subsection (b) of Section 203 shall be
6    allowed a credit under this subsection (e) equal to its
7    share of the credit earned under this subsection (e) during
8    the taxable year by the partnership or Subchapter S
9    corporation, determined in accordance with the
10    determination of income and distributive share of income
11    under Sections 702 and 704 and Subchapter S of the Internal
12    Revenue Code. This paragraph is exempt from the provisions
13    of Section 250.
14    (f) Investment credit; Enterprise Zone; River Edge
15Redevelopment Zone.
16        (1) A taxpayer shall be allowed a credit against the
17    tax imposed by subsections (a) and (b) of this Section for
18    investment in qualified property which is placed in service
19    in an Enterprise Zone created pursuant to the Illinois
20    Enterprise Zone Act or, for property placed in service on
21    or after July 1, 2006, a River Edge Redevelopment Zone
22    established pursuant to the River Edge Redevelopment Zone
23    Act. For partners, shareholders of Subchapter S
24    corporations, and owners of limited liability companies,
25    if the liability company is treated as a partnership for
26    purposes of federal and State income taxation, there shall

 

 

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1    be allowed a credit under this subsection (f) to be
2    determined in accordance with the determination of income
3    and distributive share of income under Sections 702 and 704
4    and Subchapter S of the Internal Revenue Code. The credit
5    shall be .5% of the basis for such property. The credit
6    shall be available only in the taxable year in which the
7    property is placed in service in the Enterprise Zone or
8    River Edge Redevelopment Zone and shall not be allowed to
9    the extent that it would reduce a taxpayer's liability for
10    the tax imposed by subsections (a) and (b) of this Section
11    to below zero. For tax years ending on or after December
12    31, 1985, the credit shall be allowed for the tax year in
13    which the property is placed in service, or, if the amount
14    of the credit exceeds the tax liability for that year,
15    whether it exceeds the original liability or the liability
16    as later amended, such excess may be carried forward and
17    applied to the tax liability of the 5 taxable years
18    following the excess credit year. The credit shall be
19    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, the credit
22    accruing first in time shall be applied first.
23        (2) The term qualified property means property which:
24            (A) is tangible, whether new or used, including
25        buildings and structural components of buildings;
26            (B) is depreciable pursuant to Section 167 of the

 

 

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1        Internal Revenue Code, except that "3-year property"
2        as defined in Section 168(c)(2)(A) of that Code is not
3        eligible for the credit provided by this subsection
4        (f);
5            (C) is acquired by purchase as defined in Section
6        179(d) of the Internal Revenue Code;
7            (D) is used in the Enterprise Zone or River Edge
8        Redevelopment Zone by the taxpayer; and
9            (E) has not been previously used in Illinois in
10        such a manner and by such a person as would qualify for
11        the credit provided by this subsection (f) or
12        subsection (e).
13        (3) The basis of qualified property shall be the basis
14    used to compute the depreciation deduction for federal
15    income tax purposes.
16        (4) If the basis of the property for federal income tax
17    depreciation purposes is increased after it has been placed
18    in service in the Enterprise Zone or River Edge
19    Redevelopment Zone by the taxpayer, the amount of such
20    increase shall be deemed property placed in service on the
21    date of such increase in basis.
22        (5) The term "placed in service" shall have the same
23    meaning as under Section 46 of the Internal Revenue Code.
24        (6) If during any taxable year, any property ceases to
25    be qualified property in the hands of the taxpayer within
26    48 months after being placed in service, or the situs of

 

 

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1    any qualified property is moved outside the Enterprise Zone
2    or River Edge Redevelopment Zone within 48 months after
3    being placed in service, the tax imposed under subsections
4    (a) and (b) of this Section for such taxable year shall be
5    increased. Such increase shall be determined by (i)
6    recomputing the investment credit which would have been
7    allowed for the year in which credit for such property was
8    originally allowed by eliminating such property from such
9    computation, and (ii) subtracting such recomputed credit
10    from the amount of credit previously allowed. For the
11    purposes of this paragraph (6), a reduction of the basis of
12    qualified property resulting from a redetermination of the
13    purchase price shall be deemed a disposition of qualified
14    property to the extent of such reduction.
15        (7) There shall be allowed an additional credit equal
16    to 0.5% of the basis of qualified property placed in
17    service during the taxable year in a River Edge
18    Redevelopment Zone, provided such property is placed in
19    service on or after July 1, 2006, and the taxpayer's base
20    employment within Illinois has increased by 1% or more over
21    the preceding year as determined by the taxpayer's
22    employment records filed with the Illinois Department of
23    Employment Security. Taxpayers who are new to Illinois
24    shall be deemed to have met the 1% growth in base
25    employment for the first year in which they file employment
26    records with the Illinois Department of Employment

 

 

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1    Security. If, in any year, the increase in base employment
2    within Illinois over the preceding year is less than 1%,
3    the additional credit shall be limited to that percentage
4    times a fraction, the numerator of which is 0.5% and the
5    denominator of which is 1%, but shall not exceed 0.5%.
6    (g) Jobs Tax Credit; Enterprise Zone, River Edge
7Redevelopment Zone, and Foreign Trade Zone or Sub-Zone.
8        (1) A taxpayer conducting a trade or business in an
9    enterprise zone or a High Impact Business designated by the
10    Department of Commerce and Economic Opportunity or for
11    taxable years ending on or after December 31, 2006, in a
12    River Edge Redevelopment Zone conducting a trade or
13    business in a federally designated Foreign Trade Zone or
14    Sub-Zone shall be allowed a credit against the tax imposed
15    by subsections (a) and (b) of this Section in the amount of
16    $500 per eligible employee hired to work in the zone during
17    the taxable year.
18        (2) To qualify for the credit:
19            (A) the taxpayer must hire 5 or more eligible
20        employees to work in an enterprise zone, River Edge
21        Redevelopment Zone, or federally designated Foreign
22        Trade Zone or Sub-Zone during the taxable year;
23            (B) the taxpayer's total employment within the
24        enterprise zone, River Edge Redevelopment Zone, or
25        federally designated Foreign Trade Zone or Sub-Zone
26        must increase by 5 or more full-time employees beyond

 

 

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1        the total employed in that zone at the end of the
2        previous tax year for which a jobs tax credit under
3        this Section was taken, or beyond the total employed by
4        the taxpayer as of December 31, 1985, whichever is
5        later; and
6            (C) the eligible employees must be employed 180
7        consecutive days in order to be deemed hired for
8        purposes of this subsection.
9        (3) An "eligible employee" means an employee who is:
10            (A) Certified by the Department of Commerce and
11        Economic Opportunity as "eligible for services"
12        pursuant to regulations promulgated in accordance with
13        Title II of the Job Training Partnership Act, Training
14        Services for the Disadvantaged or Title III of the Job
15        Training Partnership Act, Employment and Training
16        Assistance for Dislocated Workers Program.
17            (B) Hired after the enterprise zone, River Edge
18        Redevelopment Zone, or federally designated Foreign
19        Trade Zone or Sub-Zone was designated or the trade or
20        business was located in that zone, whichever is later.
21            (C) Employed in the enterprise zone, River Edge
22        Redevelopment Zone, or Foreign Trade Zone or Sub-Zone.
23        An employee is employed in an enterprise zone or
24        federally designated Foreign Trade Zone or Sub-Zone if
25        his services are rendered there or it is the base of
26        operations for the services performed.

 

 

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1            (D) A full-time employee working 30 or more hours
2        per week.
3        (4) For tax years ending on or after December 31, 1985
4    and prior to December 31, 1988, the credit shall be allowed
5    for the tax year in which the eligible employees are hired.
6    For tax years ending on or after December 31, 1988, the
7    credit shall be allowed for the tax year immediately
8    following the tax year in which the eligible employees are
9    hired. If the amount of the credit exceeds the tax
10    liability for that year, whether it exceeds the original
11    liability or the liability as later amended, such excess
12    may be carried forward and applied to the tax liability of
13    the 5 taxable years following the excess credit year. The
14    credit shall be applied to the earliest year for which
15    there is a liability. If there is credit from more than one
16    tax year that is available to offset a liability, earlier
17    credit shall be applied first.
18        (5) The Department of Revenue shall promulgate such
19    rules and regulations as may be deemed necessary to carry
20    out the purposes of this subsection (g).
21        (6) The credit shall be available for eligible
22    employees hired on or after January 1, 1986.
23    (h) Investment credit; High Impact Business.
24        (1) Subject to subsections (b) and (b-5) of Section 5.5
25    of the Illinois Enterprise Zone Act, a taxpayer shall be
26    allowed a credit against the tax imposed by subsections (a)

 

 

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1    and (b) of this Section for investment in qualified
2    property which is placed in service by a Department of
3    Commerce and Economic Opportunity designated High Impact
4    Business. The credit shall be .5% of the basis for such
5    property. The credit shall not be available (i) until the
6    minimum investments in qualified property set forth in
7    subdivision (a)(3)(A) of Section 5.5 of the Illinois
8    Enterprise Zone Act have been satisfied or (ii) until the
9    time authorized in subsection (b-5) of the Illinois
10    Enterprise Zone Act for entities designated as High Impact
11    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
12    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
13    Act, and shall not be allowed to the extent that it would
14    reduce a taxpayer's liability for the tax imposed by
15    subsections (a) and (b) of this Section to below zero. The
16    credit applicable to such investments shall be taken in the
17    taxable year in which such investments have been completed.
18    The credit for additional investments beyond the minimum
19    investment by a designated high impact business authorized
20    under subdivision (a)(3)(A) of Section 5.5 of the Illinois
21    Enterprise Zone Act shall be available only in the taxable
22    year in which the property is placed in service and shall
23    not be allowed to the extent that it would reduce a
24    taxpayer's liability for the tax imposed by subsections (a)
25    and (b) of this Section to below zero. For tax years ending
26    on or after December 31, 1987, the credit shall be allowed

 

 

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1    for the tax year in which the property is placed in
2    service, or, if the amount of the credit exceeds the tax
3    liability for that year, whether it exceeds the original
4    liability or the liability as later amended, such excess
5    may be carried forward and applied to the tax liability of
6    the 5 taxable years following the excess credit year. The
7    credit shall be applied to the earliest year for which
8    there is a liability. If there is credit from more than one
9    tax year that is available to offset a liability, the
10    credit accruing first in time shall be applied first.
11        Changes made in this subdivision (h)(1) by Public Act
12    88-670 restore changes made by Public Act 85-1182 and
13    reflect existing law.
14        (2) The term qualified property means property which:
15            (A) is tangible, whether new or used, including
16        buildings and structural components of buildings;
17            (B) is depreciable pursuant to Section 167 of the
18        Internal Revenue Code, except that "3-year property"
19        as defined in Section 168(c)(2)(A) of that Code is not
20        eligible for the credit provided by this subsection
21        (h);
22            (C) is acquired by purchase as defined in Section
23        179(d) of the Internal Revenue Code; and
24            (D) is not eligible for the Enterprise Zone
25        Investment Credit provided by subsection (f) of this
26        Section.

 

 

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1        (3) The basis of qualified property shall be the basis
2    used to compute the depreciation deduction for federal
3    income tax purposes.
4        (4) If the basis of the property for federal income tax
5    depreciation purposes is increased after it has been placed
6    in service in a federally designated Foreign Trade Zone or
7    Sub-Zone located in Illinois by the taxpayer, the amount of
8    such increase shall be deemed property placed in service on
9    the date of such increase in basis.
10        (5) The term "placed in service" shall have the same
11    meaning as under Section 46 of the Internal Revenue Code.
12        (6) If during any taxable year ending on or before
13    December 31, 1996, any property ceases to be qualified
14    property in the hands of the taxpayer within 48 months
15    after being placed in service, or the situs of any
16    qualified property is moved outside Illinois within 48
17    months after being placed in service, the tax imposed under
18    subsections (a) and (b) of this Section for such taxable
19    year shall be increased. Such increase shall be determined
20    by (i) recomputing the investment credit which would have
21    been allowed for the year in which credit for such property
22    was originally allowed by eliminating such property from
23    such computation, and (ii) subtracting such recomputed
24    credit from the amount of credit previously allowed. For
25    the purposes of this paragraph (6), a reduction of the
26    basis of qualified property resulting from a

 

 

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1    redetermination of the purchase price shall be deemed a
2    disposition of qualified property to the extent of such
3    reduction.
4        (7) Beginning with tax years ending after December 31,
5    1996, if a taxpayer qualifies for the credit under this
6    subsection (h) and thereby is granted a tax abatement and
7    the taxpayer relocates its entire facility in violation of
8    the explicit terms and length of the contract under Section
9    18-183 of the Property Tax Code, the tax imposed under
10    subsections (a) and (b) of this Section shall be increased
11    for the taxable year in which the taxpayer relocated its
12    facility by an amount equal to the amount of credit
13    received by the taxpayer under this subsection (h).
14    (i) Credit for Personal Property Tax Replacement Income
15Tax. For tax years ending prior to December 31, 2003, a credit
16shall be allowed against the tax imposed by subsections (a) and
17(b) of this Section for the tax imposed by subsections (c) and
18(d) of this Section. This credit shall be computed by
19multiplying the tax imposed by subsections (c) and (d) of this
20Section by a fraction, the numerator of which is base income
21allocable to Illinois and the denominator of which is Illinois
22base income, and further multiplying the product by the tax
23rate imposed by subsections (a) and (b) of this Section.
24    Any credit earned on or after December 31, 1986 under this
25subsection which is unused in the year the credit is computed
26because it exceeds the tax liability imposed by subsections (a)

 

 

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1and (b) for that year (whether it exceeds the original
2liability or the liability as later amended) may be carried
3forward and applied to the tax liability imposed by subsections
4(a) and (b) of the 5 taxable years following the excess credit
5year, provided that no credit may be carried forward to any
6year ending on or after December 31, 2003. This credit shall be
7applied first to the earliest year for which there is a
8liability. If there is a credit under this subsection from more
9than one tax year that is available to offset a liability the
10earliest credit arising under this subsection shall be applied
11first.
12    If, during any taxable year ending on or after December 31,
131986, the tax imposed by subsections (c) and (d) of this
14Section for which a taxpayer has claimed a credit under this
15subsection (i) is reduced, the amount of credit for such tax
16shall also be reduced. Such reduction shall be determined by
17recomputing the credit to take into account the reduced tax
18imposed by subsections (c) and (d). If any portion of the
19reduced amount of credit has been carried to a different
20taxable year, an amended return shall be filed for such taxable
21year to reduce the amount of credit claimed.
22    (j) Training expense credit. Beginning with tax years
23ending on or after December 31, 1986 and prior to December 31,
242003, a taxpayer shall be allowed a credit against the tax
25imposed by subsections (a) and (b) under this Section for all
26amounts paid or accrued, on behalf of all persons employed by

 

 

SB2522- 27 -LRB097 14129 HLH 58821 b

1the taxpayer in Illinois or Illinois residents employed outside
2of Illinois by a taxpayer, for educational or vocational
3training in semi-technical or technical fields or semi-skilled
4or skilled fields, which were deducted from gross income in the
5computation of taxable income. The credit against the tax
6imposed by subsections (a) and (b) shall be 1.6% of such
7training expenses. For partners, shareholders of subchapter S
8corporations, and owners of limited liability companies, if the
9liability company is treated as a partnership for purposes of
10federal and State income taxation, there shall be allowed a
11credit under this subsection (j) to be determined in accordance
12with the determination of income and distributive share of
13income under Sections 702 and 704 and subchapter S of the
14Internal Revenue Code.
15    Any credit allowed under this subsection which is unused in
16the year the credit is earned may be carried forward to each of
17the 5 taxable years following the year for which the credit is
18first computed until it is used. This credit shall be applied
19first to the earliest year for which there is a liability. If
20there is a credit under this subsection from more than one tax
21year that is available to offset a liability the earliest
22credit arising under this subsection shall be applied first. No
23carryforward credit may be claimed in any tax year ending on or
24after December 31, 2003.
25    (k) Research and development credit.
26    For tax years ending after July 1, 1990 and prior to

 

 

SB2522- 28 -LRB097 14129 HLH 58821 b

1December 31, 2003, and beginning again for tax years ending on
2or after December 31, 2004, and ending prior to January 1,
32011, a taxpayer shall be allowed a credit against the tax
4imposed by subsections (a) and (b) of this Section for
5increasing research activities in this State. The credit
6allowed against the tax imposed by subsections (a) and (b)
7shall be equal to 6 1/2% of the qualifying expenditures for
8increasing research activities in this State. For partners,
9shareholders of subchapter S corporations, and owners of
10limited liability companies, if the liability company is
11treated as a partnership for purposes of federal and State
12income taxation, there shall be allowed a credit under this
13subsection to be determined in accordance with the
14determination of income and distributive share of income under
15Sections 702 and 704 and subchapter S of the Internal Revenue
16Code.
17    For purposes of this subsection, "qualifying expenditures"
18means the qualifying expenditures as defined for the federal
19credit for increasing research activities which would be
20allowable under Section 41 of the Internal Revenue Code and
21which are conducted in this State, "qualifying expenditures for
22increasing research activities in this State" means the excess
23of qualifying expenditures for the taxable year in which
24incurred over qualifying expenditures for the base period,
25"qualifying expenditures for the base period" means the average
26of the qualifying expenditures for each year in the base

 

 

SB2522- 29 -LRB097 14129 HLH 58821 b

1period, and "base period" means the 3 taxable years immediately
2preceding the taxable year for which the determination is being
3made.
4    Any credit in excess of the tax liability for the taxable
5year may be carried forward. A taxpayer may elect to have the
6unused credit shown on its final completed return carried over
7as a credit against the tax liability for the following 5
8taxable years or until it has been fully used, whichever occurs
9first; provided that no credit earned in a tax year ending
10prior to December 31, 2003 may be carried forward to any year
11ending on or after December 31, 2003, and no credit may be
12carried forward to any taxable year ending on or after January
131, 2011.
14    If an unused credit is carried forward to a given year from
152 or more earlier years, that credit arising in the earliest
16year will be applied first against the tax liability for the
17given year. If a tax liability for the given year still
18remains, the credit from the next earliest year will then be
19applied, and so on, until all credits have been used or no tax
20liability for the given year remains. Any remaining unused
21credit or credits then will be carried forward to the next
22following year in which a tax liability is incurred, except
23that no credit can be carried forward to a year which is more
24than 5 years after the year in which the expense for which the
25credit is given was incurred.
26    No inference shall be drawn from this amendatory Act of the

 

 

SB2522- 30 -LRB097 14129 HLH 58821 b

191st General Assembly in construing this Section for taxable
2years beginning before January 1, 1999.
3    (l) Environmental Remediation Tax Credit.
4        (i) For tax years ending after December 31, 1997 and on
5    or before December 31, 2001, a taxpayer shall be allowed a
6    credit against the tax imposed by subsections (a) and (b)
7    of this Section for certain amounts paid for unreimbursed
8    eligible remediation costs, as specified in this
9    subsection. For purposes of this Section, "unreimbursed
10    eligible remediation costs" means costs approved by the
11    Illinois Environmental Protection Agency ("Agency") under
12    Section 58.14 of the Environmental Protection Act that were
13    paid in performing environmental remediation at a site for
14    which a No Further Remediation Letter was issued by the
15    Agency and recorded under Section 58.10 of the
16    Environmental Protection Act. The credit must be claimed
17    for the taxable year in which Agency approval of the
18    eligible remediation costs is granted. The credit is not
19    available to any taxpayer if the taxpayer or any related
20    party caused or contributed to, in any material respect, a
21    release of regulated substances on, in, or under the site
22    that was identified and addressed by the remedial action
23    pursuant to the Site Remediation Program of the
24    Environmental Protection Act. After the Pollution Control
25    Board rules are adopted pursuant to the Illinois
26    Administrative Procedure Act for the administration and

 

 

SB2522- 31 -LRB097 14129 HLH 58821 b

1    enforcement of Section 58.9 of the Environmental
2    Protection Act, determinations as to credit availability
3    for purposes of this Section shall be made consistent with
4    those rules. For purposes of this Section, "taxpayer"
5    includes a person whose tax attributes the taxpayer has
6    succeeded to under Section 381 of the Internal Revenue Code
7    and "related party" includes the persons disallowed a
8    deduction for losses by paragraphs (b), (c), and (f)(1) of
9    Section 267 of the Internal Revenue Code by virtue of being
10    a related taxpayer, as well as any of its partners. The
11    credit allowed against the tax imposed by subsections (a)
12    and (b) shall be equal to 25% of the unreimbursed eligible
13    remediation costs in excess of $100,000 per site, except
14    that the $100,000 threshold shall not apply to any site
15    contained in an enterprise zone as determined by the
16    Department of Commerce and Community Affairs (now
17    Department of Commerce and Economic Opportunity). The
18    total credit allowed shall not exceed $40,000 per year with
19    a maximum total of $150,000 per site. For partners and
20    shareholders of subchapter S corporations, there shall be
21    allowed a credit under this subsection to be determined in
22    accordance with the determination of income and
23    distributive share of income under Sections 702 and 704 and
24    subchapter S of the Internal Revenue Code.
25        (ii) A credit allowed under this subsection that is
26    unused in the year the credit is earned may be carried

 

 

SB2522- 32 -LRB097 14129 HLH 58821 b

1    forward to each of the 5 taxable years following the year
2    for which the credit is first earned until it is used. The
3    term "unused credit" does not include any amounts of
4    unreimbursed eligible remediation costs in excess of the
5    maximum credit per site authorized under paragraph (i).
6    This credit shall be applied first to the earliest year for
7    which there is a liability. If there is a credit under this
8    subsection from more than one tax year that is available to
9    offset a liability, the earliest credit arising under this
10    subsection shall be applied first. A credit allowed under
11    this subsection may be sold to a buyer as part of a sale of
12    all or part of the remediation site for which the credit
13    was granted. The purchaser of a remediation site and the
14    tax credit shall succeed to the unused credit and remaining
15    carry-forward period of the seller. To perfect the
16    transfer, the assignor shall record the transfer in the
17    chain of title for the site and provide written notice to
18    the Director of the Illinois Department of Revenue of the
19    assignor's intent to sell the remediation site and the
20    amount of the tax credit to be transferred as a portion of
21    the sale. In no event may a credit be transferred to any
22    taxpayer if the taxpayer or a related party would not be
23    eligible under the provisions of subsection (i).
24        (iii) For purposes of this Section, the term "site"
25    shall have the same meaning as under Section 58.2 of the
26    Environmental Protection Act.

 

 

SB2522- 33 -LRB097 14129 HLH 58821 b

1    (m) Education expense credit. Beginning with tax years
2ending after December 31, 1999, a taxpayer who is the custodian
3of one or more qualifying pupils shall be allowed a credit
4against the tax imposed by subsections (a) and (b) of this
5Section for qualified education expenses incurred on behalf of
6the qualifying pupils. The credit shall be equal to 25% of
7qualified education expenses, but in no event may the total
8credit under this subsection claimed by a family that is the
9custodian of qualifying pupils exceed $500. In no event shall a
10credit under this subsection reduce the taxpayer's liability
11under this Act to less than zero. This subsection is exempt
12from the provisions of Section 250 of this Act.
13    For purposes of this subsection:
14    "Qualifying pupils" means individuals who (i) are
15residents of the State of Illinois, (ii) are under the age of
1621 at the close of the school year for which a credit is
17sought, and (iii) during the school year for which a credit is
18sought were full-time pupils enrolled in a kindergarten through
19twelfth grade education program at any school, as defined in
20this subsection.
21    "Qualified education expense" means the amount incurred on
22behalf of a qualifying pupil in excess of $250 for tuition,
23book fees, and lab fees at the school in which the pupil is
24enrolled during the regular school year.
25    "School" means any public or nonpublic elementary or
26secondary school in Illinois that is in compliance with Title

 

 

SB2522- 34 -LRB097 14129 HLH 58821 b

1VI of the Civil Rights Act of 1964 and attendance at which
2satisfies the requirements of Section 26-1 of the School Code,
3except that nothing shall be construed to require a child to
4attend any particular public or nonpublic school to qualify for
5the credit under this Section.
6    "Custodian" means, with respect to qualifying pupils, an
7Illinois resident who is a parent, the parents, a legal
8guardian, or the legal guardians of the qualifying pupils.
9    (n) River Edge Redevelopment Zone site remediation tax
10credit.
11        (i) For tax years ending on or after December 31, 2006,
12    a taxpayer shall be allowed a credit against the tax
13    imposed by subsections (a) and (b) of this Section for
14    certain amounts paid for unreimbursed eligible remediation
15    costs, as specified in this subsection. For purposes of
16    this Section, "unreimbursed eligible remediation costs"
17    means costs approved by the Illinois Environmental
18    Protection Agency ("Agency") under Section 58.14a of the
19    Environmental Protection Act that were paid in performing
20    environmental remediation at a site within a River Edge
21    Redevelopment Zone for which a No Further Remediation
22    Letter was issued by the Agency and recorded under Section
23    58.10 of the Environmental Protection Act. The credit must
24    be claimed for the taxable year in which Agency approval of
25    the eligible remediation costs is granted. The credit is
26    not available to any taxpayer if the taxpayer or any

 

 

SB2522- 35 -LRB097 14129 HLH 58821 b

1    related party caused or contributed to, in any material
2    respect, a release of regulated substances on, in, or under
3    the site that was identified and addressed by the remedial
4    action pursuant to the Site Remediation Program of the
5    Environmental Protection Act. Determinations as to credit
6    availability for purposes of this Section shall be made
7    consistent with rules adopted by the Pollution Control
8    Board pursuant to the Illinois Administrative Procedure
9    Act for the administration and enforcement of Section 58.9
10    of the Environmental Protection Act. For purposes of this
11    Section, "taxpayer" includes a person whose tax attributes
12    the taxpayer has succeeded to under Section 381 of the
13    Internal Revenue Code and "related party" includes the
14    persons disallowed a deduction for losses by paragraphs
15    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
16    Code by virtue of being a related taxpayer, as well as any
17    of its partners. The credit allowed against the tax imposed
18    by subsections (a) and (b) shall be equal to 25% of the
19    unreimbursed eligible remediation costs in excess of
20    $100,000 per site.
21        (ii) A credit allowed under this subsection that is
22    unused in the year the credit is earned may be carried
23    forward to each of the 5 taxable years following the year
24    for which the credit is first earned until it is used. This
25    credit shall be applied first to the earliest year for
26    which there is a liability. If there is a credit under this

 

 

SB2522- 36 -LRB097 14129 HLH 58821 b

1    subsection from more than one tax year that is available to
2    offset a liability, the earliest credit arising under this
3    subsection shall be applied first. A credit allowed under
4    this subsection may be sold to a buyer as part of a sale of
5    all or part of the remediation site for which the credit
6    was granted. The purchaser of a remediation site and the
7    tax credit shall succeed to the unused credit and remaining
8    carry-forward period of the seller. To perfect the
9    transfer, the assignor shall record the transfer in the
10    chain of title for the site and provide written notice to
11    the Director of the Illinois Department of Revenue of the
12    assignor's intent to sell the remediation site and the
13    amount of the tax credit to be transferred as a portion of
14    the sale. In no event may a credit be transferred to any
15    taxpayer if the taxpayer or a related party would not be
16    eligible under the provisions of subsection (i).
17        (iii) For purposes of this Section, the term "site"
18    shall have the same meaning as under Section 58.2 of the
19    Environmental Protection Act.
20(Source: P.A. 96-115, eff. 7-31-09; 96-116, eff. 7-31-09;
2196-937, eff. 6-23-10; 96-1000, eff. 7-2-10; 96-1496, eff.
221-13-11; 97-2, eff. 5-6-11.)
 
23    (35 ILCS 5/207)  (from Ch. 120, par. 2-207)
24    Sec. 207. Net Losses.
25    (a) If after applying all of the (i) modifications provided

 

 

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1for in paragraph (2) of Section 203(b), paragraph (2) of
2Section 203(c) and paragraph (2) of Section 203(d) and (ii) the
3allocation and apportionment provisions of Article 3 of this
4Act and subsection (c) of this Section, the taxpayer's net
5income results in a loss;
6        (1) for any taxable year ending prior to December 31,
7    1999, such loss shall be allowed as a carryover or
8    carryback deduction in the manner allowed under Section 172
9    of the Internal Revenue Code;
10        (2) for any taxable year ending on or after December
11    31, 1999 and prior to December 31, 2003, such loss shall be
12    allowed as a carryback to each of the 2 taxable years
13    preceding the taxable year of such loss and shall be a net
14    operating loss carryover to each of the 20 taxable years
15    following the taxable year of such loss; and
16        (3) for any taxable year ending on or after December
17    31, 2003, such loss shall be allowed as a net operating
18    loss carryover to each of the 12 taxable years following
19    the taxable year of such loss, except as provided in
20    subsection (d).
21    (a-5) Election to relinquish carryback and order of
22application of losses.
23            (A) For losses incurred in tax years ending prior
24        to December 31, 2003, the taxpayer may elect to
25        relinquish the entire carryback period with respect to
26        such loss. Such election shall be made in the form and

 

 

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1        manner prescribed by the Department and shall be made
2        by the due date (including extensions of time) for
3        filing the taxpayer's return for the taxable year in
4        which such loss is incurred, and such election, once
5        made, shall be irrevocable.
6            (B) The entire amount of such loss shall be carried
7        to the earliest taxable year to which such loss may be
8        carried. The amount of such loss which shall be carried
9        to each of the other taxable years shall be the excess,
10        if any, of the amount of such loss over the sum of the
11        deductions for carryback or carryover of such loss
12        allowable for each of the prior taxable years to which
13        such loss may be carried.
14    (b) Any loss determined under subsection (a) of this
15Section must be carried back or carried forward in the same
16manner for purposes of subsections (a) and (b) of Section 201
17of this Act as for purposes of subsections (c) and (d) of
18Section 201 of this Act.
19    (c) Notwithstanding any other provision of this Act, for
20each taxable year ending on or after December 31, 2008, for
21purposes of computing the loss for the taxable year under
22subsection (a) of this Section and the deduction taken into
23account for the taxable year for a net operating loss carryover
24under paragraphs (1), (2), and (3) of subsection (a) of this
25Section, the loss and net operating loss carryover shall be
26reduced in an amount equal to the reduction to the net

 

 

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1operating loss and net operating loss carryover to the taxable
2year, respectively, required under Section 108(b)(2)(A) of the
3Internal Revenue Code, multiplied by a fraction, the numerator
4of which is the amount of discharge of indebtedness income that
5is excluded from gross income for the taxable year (but only if
6the taxable year ends on or after December 31, 2008) under
7Section 108(a) of the Internal Revenue Code and that would have
8been allocated and apportioned to this State under Article 3 of
9this Act but for that exclusion, and the denominator of which
10is the total amount of discharge of indebtedness income
11excluded from gross income under Section 108(a) of the Internal
12Revenue Code for the taxable year. The reduction required under
13this subsection (c) shall be made after the determination of
14Illinois net income for the taxable year in which the
15indebtedness is discharged.
16    (d) In the case of a corporation (other than a Subchapter S
17corporation), no carryover deduction shall be allowed under
18this Section for any taxable year ending after December 31,
192015 December 31, 2010 and prior to December 31, 2014; provided
20that, for purposes of determining the taxable years to which a
21net loss may be carried under subsection (a) of this Section,
22no taxable year for which a deduction is disallowed under this
23subsection shall be counted.
24    (e) In the case of a residual interest holder in a real
25estate mortgage investment conduit subject to Section 860E of
26the Internal Revenue Code, the net loss in subsection (a) shall

 

 

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1be equal to:
2        (1) the amount computed under subsection (a), without
3    regard to this subsection (e), or if that amount is
4    positive, zero;
5        (2) minus an amount equal to the amount computed under
6    subsection (a), without regard to this subsection (e),
7    minus the amount that would be computed under subsection
8    (a) if the taxpayer's federal taxable income were computed
9    without regard to Section 860E of the Internal Revenue Code
10    and without regard to this subsection (e).
11    The modification in this subsection (e) is exempt from the
12provisions of Section 250.
13(Source: P.A. 96-1496, eff. 1-13-11; 97-507, eff. 8-23-11.)
 
14    (35 ILCS 405/Act rep.)
15    Section 10. The Illinois Estate and Generation-Skipping
16Transfer Tax Act is repealed.
 
17    Section 99. Effective date. This Act takes effect upon
18becoming law.