Illinois General Assembly - Full Text of SB3875
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Full Text of SB3875  101st General Assembly

SB3875 101ST GENERAL ASSEMBLY

  
  

 


 
101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB3875

 

Introduced 2/14/2020, by Sen. Ram Villivalam

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/201

    Amends the Illinois Income Tax Act. Provides that a taxpayer shall be allowed an income tax credit in an amount equal to 1.3% of the qualified research expenses made by the taxpayer in Illinois. Provides that the taxpayer is not required to have obtained a research and development credit with respect to his or her federal income taxes to qualify for the Illinois research and development credit.


LRB101 18631 HLH 68086 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB3875LRB101 18631 HLH 68086 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5changing Section 201 as follows:
 
6    (35 ILCS 5/201)
7    (Text of Section before amendment by P.A. 101-8)
8    Sec. 201. Tax imposed.
9    (a) In general. A tax measured by net income is hereby
10imposed on every individual, corporation, trust and estate for
11each taxable year ending after July 31, 1969 on the privilege
12of earning or receiving income in or as a resident of this
13State. Such tax shall be in addition to all other occupation or
14privilege taxes imposed by this State or by any municipal
15corporation or political subdivision thereof.
16    (b) Rates. The tax imposed by subsection (a) of this
17Section shall be determined as follows, except as adjusted by
18subsection (d-1):
19        (1) In the case of an individual, trust or estate, for
20    taxable years ending prior to July 1, 1989, an amount equal
21    to 2 1/2% of the taxpayer's net income for the taxable
22    year.
23        (2) In the case of an individual, trust or estate, for

 

 

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

 

 

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1    (ii) 3.75% of the taxpayer's net income for the period
2    after December 31, 2014, as calculated under Section 202.5.
3        (5.2) In the case of an individual, trust, or estate,
4    for taxable years beginning on or after January 1, 2015,
5    and ending prior to July 1, 2017, an amount equal to 3.75%
6    of the taxpayer's net income for the taxable year.
7        (5.3) In the case of an individual, trust, or estate,
8    for taxable years beginning prior to July 1, 2017, and
9    ending after June 30, 2017, an amount equal to the sum of
10    (i) 3.75% of the taxpayer's net income for the period prior
11    to July 1, 2017, as calculated under Section 202.5, and
12    (ii) 4.95% of the taxpayer's net income for the period
13    after June 30, 2017, as calculated under Section 202.5.
14        (5.4) In the case of an individual, trust, or estate,
15    for taxable years beginning on or after July 1, 2017, an
16    amount equal to 4.95% 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, 2015, an amount equal to 7% of the taxpayer's
16    net income for the taxable year.
17        (11) In the case of a corporation, for taxable years
18    beginning prior to January 1, 2015, and ending after
19    December 31, 2014, an amount equal to the sum of (i) 7% of
20    the taxpayer's net income for the period prior to January
21    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
22    of the taxpayer's net income for the period after December
23    31, 2014, as calculated under Section 202.5.
24        (12) In the case of a corporation, for taxable years
25    beginning on or after January 1, 2015, and ending prior to
26    July 1, 2017, an amount equal to 5.25% of the taxpayer's

 

 

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1    net income for the taxable year.
2        (13) In the case of a corporation, for taxable years
3    beginning prior to July 1, 2017, and ending after June 30,
4    2017, an amount equal to the sum of (i) 5.25% of the
5    taxpayer's net income for the period prior to July 1, 2017,
6    as calculated under Section 202.5, and (ii) 7% of the
7    taxpayer's net income for the period after June 30, 2017,
8    as calculated under Section 202.5.
9        (14) In the case of a corporation, for taxable years
10    beginning on or after July 1, 2017, an amount equal to 7%
11    of the taxpayer's net income for the taxable year.
12    The rates under this subsection (b) are subject to the
13provisions of Section 201.5.
14    (b-5) Surcharge; sale or exchange of assets, properties,
15and intangibles of organization gaming licensees. For each of
16taxable years 2019 through 2027, a surcharge is imposed on all
17taxpayers on income arising from the sale or exchange of
18capital assets, depreciable business property, real property
19used in the trade or business, and Section 197 intangibles (i)
20of an organization licensee under the Illinois Horse Racing Act
21of 1975 and (ii) of an organization gaming licensee under the
22Illinois Gambling Act. The amount of the surcharge is equal to
23the amount of federal income tax liability for the taxable year
24attributable to those sales and exchanges. The surcharge
25imposed shall not apply if:
26        (1) the organization gaming license, organization

 

 

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1    license, or racetrack property is transferred as a result
2    of any of the following:
3            (A) bankruptcy, a receivership, or a debt
4        adjustment initiated by or against the initial
5        licensee or the substantial owners of the initial
6        licensee;
7            (B) cancellation, revocation, or termination of
8        any such license by the Illinois Gaming Board or the
9        Illinois Racing Board;
10            (C) a determination by the Illinois Gaming Board
11        that transfer of the license is in the best interests
12        of Illinois gaming;
13            (D) the death of an owner of the equity interest in
14        a licensee;
15            (E) the acquisition of a controlling interest in
16        the stock or substantially all of the assets of a
17        publicly traded company;
18            (F) a transfer by a parent company to a wholly
19        owned subsidiary; or
20            (G) the transfer or sale to or by one person to
21        another person where both persons were initial owners
22        of the license when the license was issued; or
23        (2) the controlling interest in the organization
24    gaming license, organization license, or racetrack
25    property is transferred in a transaction to lineal
26    descendants in which no gain or loss is recognized or as a

 

 

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1    result of a transaction in accordance with Section 351 of
2    the Internal Revenue Code in which no gain or loss is
3    recognized; or
4        (3) live horse racing was not conducted in 2010 at a
5    racetrack located within 3 miles of the Mississippi River
6    under a license issued pursuant to the Illinois Horse
7    Racing Act of 1975.
8    The transfer of an organization gaming license,
9organization license, or racetrack property by a person other
10than the initial licensee to receive the organization gaming
11license is not subject to a surcharge. The Department shall
12adopt rules necessary to implement and administer this
13subsection.
14    (c) Personal Property Tax Replacement Income Tax.
15Beginning on July 1, 1979 and thereafter, in addition to such
16income tax, there is also hereby imposed the Personal Property
17Tax Replacement Income Tax measured by net income on every
18corporation (including Subchapter S corporations), partnership
19and trust, for each taxable year ending after June 30, 1979.
20Such taxes are imposed on the privilege of earning or receiving
21income in or as a resident of this State. The Personal Property
22Tax Replacement Income Tax shall be in addition to the income
23tax imposed by subsections (a) and (b) of this Section and in
24addition to all other occupation or privilege taxes imposed by
25this State or by any municipal corporation or political
26subdivision thereof.

 

 

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1    (d) Additional Personal Property Tax Replacement Income
2Tax Rates. The personal property tax replacement income tax
3imposed by this subsection and subsection (c) of this Section
4in the case of a corporation, other than a Subchapter S
5corporation and except as adjusted by subsection (d-1), shall
6be an additional amount equal to 2.85% of such taxpayer's net
7income for the taxable year, except that beginning on January
81, 1981, and thereafter, the rate of 2.85% specified in this
9subsection shall be reduced to 2.5%, and in the case of a
10partnership, trust or a Subchapter S corporation shall be an
11additional amount equal to 1.5% of such taxpayer's net income
12for the taxable year.
13    (d-1) Rate reduction for certain foreign insurers. In the
14case of a foreign insurer, as defined by Section 35A-5 of the
15Illinois Insurance Code, whose state or country of domicile
16imposes on insurers domiciled in Illinois a retaliatory tax
17(excluding any insurer whose premiums from reinsurance assumed
18are 50% or more of its total insurance premiums as determined
19under paragraph (2) of subsection (b) of Section 304, except
20that for purposes of this determination premiums from
21reinsurance do not include premiums from inter-affiliate
22reinsurance arrangements), beginning with taxable years ending
23on or after December 31, 1999, the sum of the rates of tax
24imposed by subsections (b) and (d) shall be reduced (but not
25increased) to the rate at which the total amount of tax imposed
26under this Act, net of all credits allowed under this Act,

 

 

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

 

 

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

 

 

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1    met the 1% growth in base employment for the first year in
2    which they file employment records with the Illinois
3    Department of Employment Security. The provisions added to
4    this Section by Public Act 85-1200 (and restored by Public
5    Act 87-895) shall be construed as declaratory of existing
6    law and not as a new enactment. If, in any year, the
7    increase in base employment within Illinois over the
8    preceding year is less than 1%, the additional credit shall
9    be limited to that percentage times a fraction, the
10    numerator of which is .5% and the denominator of which is
11    1%, but shall not exceed .5%. The investment credit shall
12    not be allowed to the extent that it would reduce a
13    taxpayer's liability in any tax year below zero, nor may
14    any credit for qualified property be allowed for any year
15    other than the year in which the property was placed in
16    service in Illinois. For tax years ending on or after
17    December 31, 1987, and on or before December 31, 1988, the
18    credit shall be allowed for the tax year in which the
19    property is placed in service, or, if the amount of the
20    credit exceeds the tax liability for that year, whether it
21    exceeds the original liability or the liability as later
22    amended, such excess may be carried forward and applied to
23    the tax liability of the 5 taxable years following the
24    excess credit years if the taxpayer (i) makes investments
25    which cause the creation of a minimum of 2,000 full-time
26    equivalent jobs in Illinois, (ii) is located in an

 

 

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1    enterprise zone established pursuant to the Illinois
2    Enterprise Zone Act and (iii) is certified by the
3    Department of Commerce and Community Affairs (now
4    Department of Commerce and Economic Opportunity) as
5    complying with the requirements specified in clause (i) and
6    (ii) by July 1, 1986. The Department of Commerce and
7    Community Affairs (now Department of Commerce and Economic
8    Opportunity) shall notify the Department of Revenue of all
9    such certifications immediately. For tax years ending
10    after December 31, 1988, the credit shall be allowed for
11    the tax year in which the property is placed in service,
12    or, if the amount of the credit exceeds the tax liability
13    for that year, whether it exceeds the original liability or
14    the liability as later amended, such excess may be carried
15    forward and applied to the tax liability of the 5 taxable
16    years following the excess credit years. The credit shall
17    be applied to the earliest year for which there is a
18    liability. If there is credit from more than one tax year
19    that is available to offset a liability, earlier credit
20    shall be applied first.
21        (2) The term "qualified property" means property
22    which:
23            (A) is tangible, whether new or used, including
24        buildings and structural components of buildings and
25        signs that are real property, but not including land or
26        improvements to real property that are not a structural

 

 

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

 

 

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1    this subsection (e) the term "mining" shall have the same
2    meaning as the term "mining" in Section 613(c) of the
3    Internal Revenue Code. For purposes of this subsection (e),
4    the term "retailing" means the sale of tangible personal
5    property for use or consumption and not for resale, or
6    services rendered in conjunction with the sale of tangible
7    personal property for use or consumption and not for
8    resale. For purposes of this subsection (e), "tangible
9    personal property" has the same meaning as when that term
10    is used in the Retailers' Occupation Tax Act, and, for
11    taxable years ending after December 31, 2008, does not
12    include the generation, transmission, or distribution of
13    electricity.
14        (4) The basis of qualified property shall be the basis
15    used to compute the depreciation deduction for federal
16    income tax purposes.
17        (5) If the basis of the property for federal income tax
18    depreciation purposes is increased after it has been placed
19    in service in Illinois 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        (6) The term "placed in service" shall have the same
23    meaning as under Section 46 of the Internal Revenue Code.
24        (7) 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 Illinois within 48
2    months after being placed in service, the Personal Property
3    Tax Replacement Income Tax for such taxable year shall be
4    increased. Such increase shall be determined by (i)
5    recomputing the investment credit which would have been
6    allowed for the year in which credit for such property was
7    originally allowed by eliminating such property from such
8    computation and, (ii) subtracting such recomputed credit
9    from the amount of credit previously allowed. For the
10    purposes of this paragraph (7), a reduction of the basis of
11    qualified property resulting from a redetermination of the
12    purchase price shall be deemed a disposition of qualified
13    property to the extent of such reduction.
14        (8) Unless the investment credit is extended by law,
15    the basis of qualified property shall not include costs
16    incurred after December 31, 2018, except for costs incurred
17    pursuant to a binding contract entered into on or before
18    December 31, 2018.
19        (9) Each taxable year ending before December 31, 2000,
20    a partnership may elect to pass through to its partners the
21    credits to which the partnership is entitled under this
22    subsection (e) for the taxable year. A partner may use the
23    credit allocated to him or her under this paragraph only
24    against the tax imposed in subsections (c) and (d) of this
25    Section. If the partnership makes that election, those
26    credits shall be allocated among the partners in the

 

 

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

 

 

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

 

 

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

 

 

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1    in service in the Enterprise Zone or River Edge
2    Redevelopment Zone by the taxpayer, the amount of such
3    increase shall be deemed property placed in service on the
4    date of such increase in basis.
5        (5) The term "placed in service" shall have the same
6    meaning as under Section 46 of the Internal Revenue Code.
7        (6) If during any taxable year, any property ceases to
8    be qualified property in the hands of the taxpayer within
9    48 months after being placed in service, or the situs of
10    any qualified property is moved outside the Enterprise Zone
11    or River Edge Redevelopment Zone within 48 months after
12    being placed in service, the tax imposed under subsections
13    (a) and (b) of this Section for such taxable year shall be
14    increased. Such increase shall be determined by (i)
15    recomputing the investment credit which would have been
16    allowed for the year in which credit for such property was
17    originally allowed by eliminating such property from such
18    computation, and (ii) subtracting such recomputed credit
19    from the amount of credit previously allowed. For the
20    purposes of this paragraph (6), a reduction of the basis of
21    qualified property resulting from a redetermination of the
22    purchase price shall be deemed a disposition of qualified
23    property to the extent of such reduction.
24        (7) There shall be allowed an additional credit equal
25    to 0.5% of the basis of qualified property placed in
26    service during the taxable year in a River Edge

 

 

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1    Redevelopment Zone, provided such property is placed in
2    service on or after July 1, 2006, and the taxpayer's base
3    employment within Illinois has increased by 1% or more over
4    the preceding year as determined by the taxpayer's
5    employment records filed with the Illinois Department of
6    Employment Security. Taxpayers who are new to Illinois
7    shall be deemed to have met the 1% growth in base
8    employment for the first year in which they file employment
9    records with the Illinois Department of Employment
10    Security. If, in any year, the increase in base employment
11    within Illinois over the preceding year is less than 1%,
12    the additional credit shall be limited to that percentage
13    times a fraction, the numerator of which is 0.5% and the
14    denominator of which is 1%, but shall not exceed 0.5%.
15        (8) For taxable years beginning on or after January 1,
16    2021, there shall be allowed an Enterprise Zone
17    construction jobs credit against the taxes imposed under
18    subsections (a) and (b) of this Section as provided in
19    Section 13 of the Illinois Enterprise Zone Act.
20        The credit or credits may not reduce the taxpayer's
21    liability to less than zero. If the amount of the credit or
22    credits exceeds the taxpayer's liability, the excess may be
23    carried forward and applied against the taxpayer's
24    liability in succeeding calendar years in the same manner
25    provided under paragraph (4) of Section 211 of this Act.
26    The credit or credits shall be applied to the earliest year

 

 

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1    for which there is a tax liability. If there are credits
2    from more than one taxable year that are available to
3    offset a liability, the earlier credit shall be applied
4    first.
5        For partners, shareholders of Subchapter S
6    corporations, and owners of limited liability companies,
7    if the liability company is treated as a partnership for
8    the purposes of federal and State income taxation, there
9    shall be allowed a credit under this Section to be
10    determined in accordance with the determination of income
11    and distributive share of income under Sections 702 and 704
12    and Subchapter S of the Internal Revenue Code.
13        The total aggregate amount of credits awarded under the
14    Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
15    amendatory Act of the 101st General Assembly) shall not
16    exceed $20,000,000 in any State fiscal year.
17        This paragraph (8) is exempt from the provisions of
18    Section 250.
19    (g) (Blank).
20    (h) Investment credit; High Impact Business.
21        (1) Subject to subsections (b) and (b-5) of Section 5.5
22    of the Illinois Enterprise Zone Act, a taxpayer shall be
23    allowed a credit against the tax imposed by subsections (a)
24    and (b) of this Section for investment in qualified
25    property which is placed in service by a Department of
26    Commerce and Economic Opportunity designated High Impact

 

 

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

 

 

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1    liability or the liability as later amended, such excess
2    may be carried forward and applied to the tax liability of
3    the 5 taxable years following the excess credit year. The
4    credit shall be applied to the earliest year for which
5    there is a liability. If there is credit from more than one
6    tax year that is available to offset a liability, the
7    credit accruing first in time shall be applied first.
8        Changes made in this subdivision (h)(1) by Public Act
9    88-670 restore changes made by Public Act 85-1182 and
10    reflect existing law.
11        (2) The term qualified property means property which:
12            (A) is tangible, whether new or used, including
13        buildings and structural components of buildings;
14            (B) is depreciable pursuant to Section 167 of the
15        Internal Revenue Code, except that "3-year property"
16        as defined in Section 168(c)(2)(A) of that Code is not
17        eligible for the credit provided by this subsection
18        (h);
19            (C) is acquired by purchase as defined in Section
20        179(d) of the Internal Revenue Code; and
21            (D) is not eligible for the Enterprise Zone
22        Investment Credit provided by subsection (f) of this
23        Section.
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 a federally designated Foreign Trade Zone or
4    Sub-Zone located in Illinois by the taxpayer, the amount of
5    such increase shall be deemed property placed in service on
6    the 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 ending on or before
10    December 31, 1996, any property ceases to be qualified
11    property in the hands of the taxpayer within 48 months
12    after being placed in service, or the situs of any
13    qualified property is moved outside Illinois within 48
14    months after being placed in service, the tax imposed under
15    subsections (a) and (b) of this Section for such taxable
16    year shall be increased. Such increase shall be determined
17    by (i) recomputing the investment credit which would have
18    been allowed for the year in which credit for such property
19    was originally allowed by eliminating such property from
20    such computation, and (ii) subtracting such recomputed
21    credit from the amount of credit previously allowed. For
22    the purposes of this paragraph (6), a reduction of the
23    basis of qualified property resulting from a
24    redetermination of the purchase price shall be deemed a
25    disposition of qualified property to the extent of such
26    reduction.

 

 

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1        (7) Beginning with tax years ending after December 31,
2    1996, if a taxpayer qualifies for the credit under this
3    subsection (h) and thereby is granted a tax abatement and
4    the taxpayer relocates its entire facility in violation of
5    the explicit terms and length of the contract under Section
6    18-183 of the Property Tax Code, the tax imposed under
7    subsections (a) and (b) of this Section shall be increased
8    for the taxable year in which the taxpayer relocated its
9    facility by an amount equal to the amount of credit
10    received by the taxpayer under this subsection (h).
11    (h-5) High Impact Business construction constructions jobs
12credit. For taxable years beginning on or after January 1,
132021, there shall also be allowed a High Impact Business
14construction jobs credit against the tax imposed under
15subsections (a) and (b) of this Section as provided in
16subsections (i) and (j) of Section 5.5 of the Illinois
17Enterprise Zone Act.
18    The credit or credits may not reduce the taxpayer's
19liability to less than zero. If the amount of the credit or
20credits exceeds the taxpayer's liability, the excess may be
21carried forward and applied against the taxpayer's liability in
22succeeding calendar years in the manner provided under
23paragraph (4) of Section 211 of this Act. The credit or credits
24shall be applied to the earliest year for which there is a tax
25liability. If there are credits from more than one taxable year
26that are available to offset a liability, the earlier credit

 

 

SB3875- 26 -LRB101 18631 HLH 68086 b

1shall be applied first.
2    For partners, shareholders of Subchapter S corporations,
3and owners of limited liability companies, if the liability
4company is treated as a partnership for the purposes of federal
5and State income taxation, there shall be allowed a credit
6under this Section to be determined in accordance with the
7determination of income and distributive share of income under
8Sections 702 and 704 and Subchapter S of the Internal Revenue
9Code.
10    The total aggregate amount of credits awarded under the
11Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
12amendatory Act of the 101st General Assembly) shall not exceed
13$20,000,000 in any State fiscal year.
14    This subsection (h-5) is exempt from the provisions of
15Section 250.
16    (i) Credit for Personal Property Tax Replacement Income
17Tax. For tax years ending prior to December 31, 2003, a credit
18shall be allowed against the tax imposed by subsections (a) and
19(b) of this Section for the tax imposed by subsections (c) and
20(d) of this Section. This credit shall be computed by
21multiplying the tax imposed by subsections (c) and (d) of this
22Section by a fraction, the numerator of which is base income
23allocable to Illinois and the denominator of which is Illinois
24base income, and further multiplying the product by the tax
25rate imposed by subsections (a) and (b) of this Section.
26    Any credit earned on or after December 31, 1986 under this

 

 

SB3875- 27 -LRB101 18631 HLH 68086 b

1subsection which is unused in the year the credit is computed
2because it exceeds the tax liability imposed by subsections (a)
3and (b) for that year (whether it exceeds the original
4liability or the liability as later amended) may be carried
5forward and applied to the tax liability imposed by subsections
6(a) and (b) of the 5 taxable years following the excess credit
7year, provided that no credit may be carried forward to any
8year ending on or after December 31, 2003. This credit shall be
9applied first to the earliest year for which there is a
10liability. If there is a credit under this subsection from more
11than one tax year that is available to offset a liability the
12earliest credit arising under this subsection shall be applied
13first.
14    If, during any taxable year ending on or after December 31,
151986, the tax imposed by subsections (c) and (d) of this
16Section for which a taxpayer has claimed a credit under this
17subsection (i) is reduced, the amount of credit for such tax
18shall also be reduced. Such reduction shall be determined by
19recomputing the credit to take into account the reduced tax
20imposed by subsections (c) and (d). If any portion of the
21reduced amount of credit has been carried to a different
22taxable year, an amended return shall be filed for such taxable
23year to reduce the amount of credit claimed.
24    (j) Training expense credit. Beginning with tax years
25ending on or after December 31, 1986 and prior to December 31,
262003, a taxpayer shall be allowed a credit against the tax

 

 

SB3875- 28 -LRB101 18631 HLH 68086 b

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

 

 

SB3875- 29 -LRB101 18631 HLH 68086 b

1    (k) Research and development credit. For tax years ending
2after July 1, 1990 and prior to December 31, 2003, and
3beginning again for tax years ending on or after December 31,
42004, and ending prior to January 1, 2027, a taxpayer shall be
5allowed a credit against the tax imposed by subsections (a) and
6(b) of this Section for increasing research activities in this
7State. The credit allowed against the tax imposed by
8subsections (a) and (b) shall be equal to 6 1/2% of the
9qualifying expenditures for increasing research activities in
10this State. For partners, shareholders of subchapter S
11corporations, and owners of limited liability companies, if the
12liability company is treated as a partnership for purposes of
13federal and State income taxation, there shall be allowed a
14credit under this subsection to be determined in accordance
15with the determination of income and distributive share of
16income under Sections 702 and 704 and subchapter S of the
17Internal Revenue Code.
18    For purposes of this subsection, "qualifying expenditures"
19means the qualifying expenditures as defined for the federal
20credit for increasing research activities which would be
21allowable under Section 41 of the Internal Revenue Code and
22which are conducted in this State, "qualifying expenditures for
23increasing research activities in this State" means the excess
24of qualifying expenditures for the taxable year in which
25incurred over qualifying expenditures for the base period,
26"qualifying expenditures for the base period" means the average

 

 

SB3875- 30 -LRB101 18631 HLH 68086 b

1of the qualifying expenditures for each year in the base
2period, and "base period" means the 3 taxable years immediately
3preceding the taxable year for which the determination is being
4made.
5    Any credit in excess of the tax liability for the taxable
6year may be carried forward. A taxpayer may elect to have the
7unused credit shown on its final completed return carried over
8as a credit against the tax liability for the following 5
9taxable years or until it has been fully used, whichever occurs
10first; provided that no credit earned in a tax year ending
11prior to December 31, 2003 may be carried forward to any year
12ending on or after December 31, 2003.
13    If an unused credit is carried forward to a given year from
142 or more earlier years, that credit arising in the earliest
15year will be applied first against the tax liability for the
16given year. If a tax liability for the given year still
17remains, the credit from the next earliest year will then be
18applied, and so on, until all credits have been used or no tax
19liability for the given year remains. Any remaining unused
20credit or credits then will be carried forward to the next
21following year in which a tax liability is incurred, except
22that no credit can be carried forward to a year which is more
23than 5 years after the year in which the expense for which the
24credit is given was incurred.
25    No inference shall be drawn from Public Act 91-644 this
26amendatory Act of the 91st General Assembly in construing this

 

 

SB3875- 31 -LRB101 18631 HLH 68086 b

1Section for taxable years beginning before January 1, 1999.
2    It is the intent of the General Assembly that the research
3and development credit under this subsection (k) shall apply
4continuously for all tax years ending on or after December 31,
52004 and ending prior to January 1, 2027, including, but not
6limited to, the period beginning on January 1, 2016 and ending
7on July 6, 2017 (the effective date of Public Act 100-22) this
8amendatory Act of the 100th General Assembly. All actions taken
9in reliance on the continuation of the credit under this
10subsection (k) by any taxpayer are hereby validated.
11    A taxpayer is not required to have obtained a research and
12development credit with respect to his or her federal income
13taxes to qualify for a credit under this subsection.
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

 

 

SB3875- 32 -LRB101 18631 HLH 68086 b

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

 

 

SB3875- 33 -LRB101 18631 HLH 68086 b

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

 

 

SB3875- 34 -LRB101 18631 HLH 68086 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 (i) $500 for tax years
21ending prior to December 31, 2017, and (ii) $750 for tax years
22ending on or after December 31, 2017. In no event shall a
23credit under this subsection reduce the taxpayer's liability
24under this Act to less than zero. Notwithstanding any other
25provision of law, for taxable years beginning on or after
26January 1, 2017, no taxpayer may claim a credit under this

 

 

SB3875- 35 -LRB101 18631 HLH 68086 b

1subsection (m) if the taxpayer's adjusted gross income for the
2taxable year exceeds (i) $500,000, in the case of spouses
3filing a joint federal tax return or (ii) $250,000, in the case
4of all other taxpayers. This subsection is exempt from the
5provisions of Section 250 of this Act.
6    For purposes of this subsection:
7    "Qualifying pupils" means individuals who (i) are
8residents of the State of Illinois, (ii) are under the age of
921 at the close of the school year for which a credit is
10sought, and (iii) during the school year for which a credit is
11sought were full-time pupils enrolled in a kindergarten through
12twelfth grade education program at any school, as defined in
13this subsection.
14    "Qualified education expense" means the amount incurred on
15behalf of a qualifying pupil in excess of $250 for tuition,
16book fees, and lab fees at the school in which the pupil is
17enrolled during the regular school year.
18    "School" means any public or nonpublic elementary or
19secondary school in Illinois that is in compliance with Title
20VI of the Civil Rights Act of 1964 and attendance at which
21satisfies the requirements of Section 26-1 of the School Code,
22except that nothing shall be construed to require a child to
23attend any particular public or nonpublic school to qualify for
24the credit under this Section.
25    "Custodian" means, with respect to qualifying pupils, an
26Illinois resident who is a parent, the parents, a legal

 

 

SB3875- 36 -LRB101 18631 HLH 68086 b

1guardian, or the legal guardians of the qualifying pupils.
2    (n) River Edge Redevelopment Zone site remediation tax
3credit.
4        (i) For tax years ending on or after December 31, 2006,
5    a taxpayer shall be allowed a credit against the tax
6    imposed by subsections (a) and (b) of this Section for
7    certain amounts paid for unreimbursed eligible remediation
8    costs, as specified in this subsection. For purposes of
9    this Section, "unreimbursed eligible remediation costs"
10    means costs approved by the Illinois Environmental
11    Protection Agency ("Agency") under Section 58.14a of the
12    Environmental Protection Act that were paid in performing
13    environmental remediation at a site within a River Edge
14    Redevelopment Zone for which a No Further Remediation
15    Letter was issued by the Agency and recorded under Section
16    58.10 of the Environmental Protection Act. The credit must
17    be claimed for the taxable year in which Agency approval of
18    the eligible remediation costs is granted. The credit is
19    not available to any taxpayer if the taxpayer or any
20    related party caused or contributed to, in any material
21    respect, a release of regulated substances on, in, or under
22    the site that was identified and addressed by the remedial
23    action pursuant to the Site Remediation Program of the
24    Environmental Protection Act. Determinations as to credit
25    availability for purposes of this Section shall be made
26    consistent with rules adopted by the Pollution Control

 

 

SB3875- 37 -LRB101 18631 HLH 68086 b

1    Board pursuant to the Illinois Administrative Procedure
2    Act for the administration and enforcement of Section 58.9
3    of the Environmental Protection Act. For purposes of this
4    Section, "taxpayer" includes a person whose tax attributes
5    the taxpayer has succeeded to under Section 381 of the
6    Internal Revenue Code and "related party" includes the
7    persons disallowed a deduction for losses by paragraphs
8    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
9    Code by virtue of being a related taxpayer, as well as any
10    of its partners. The credit allowed against the tax imposed
11    by subsections (a) and (b) shall be equal to 25% of the
12    unreimbursed eligible remediation costs in excess of
13    $100,000 per site.
14        (ii) A credit allowed under this subsection that is
15    unused in the year the credit is earned may be carried
16    forward to each of the 5 taxable years following the year
17    for which the credit is first earned until it is used. This
18    credit shall be applied first to the earliest year for
19    which there is a liability. If there is a credit under this
20    subsection from more than one tax year that is available to
21    offset a liability, the earliest credit arising under this
22    subsection shall be applied first. A credit allowed under
23    this subsection may be sold to a buyer as part of a sale of
24    all or part of the remediation site for which the credit
25    was granted. The purchaser of a remediation site and the
26    tax credit shall succeed to the unused credit and remaining

 

 

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1    carry-forward period of the seller. To perfect the
2    transfer, the assignor shall record the transfer in the
3    chain of title for the site and provide written notice to
4    the Director of the Illinois Department of Revenue of the
5    assignor's intent to sell the remediation site and the
6    amount of the tax credit to be transferred as a portion of
7    the sale. In no event may a credit be transferred to any
8    taxpayer if the taxpayer or a related party would not be
9    eligible under the provisions of subsection (i).
10        (iii) For purposes of this Section, the term "site"
11    shall have the same meaning as under Section 58.2 of the
12    Environmental Protection Act.
13    (o) For each of taxable years during the Compassionate Use
14of Medical Cannabis Program, a surcharge is imposed on all
15taxpayers on income arising from the sale or exchange of
16capital assets, depreciable business property, real property
17used in the trade or business, and Section 197 intangibles of
18an organization registrant under the Compassionate Use of
19Medical Cannabis Program Act. The amount of the surcharge is
20equal to the amount of federal income tax liability for the
21taxable year attributable to those sales and exchanges. The
22surcharge imposed does not apply if:
23        (1) the medical cannabis cultivation center
24    registration, medical cannabis dispensary registration, or
25    the property of a registration is transferred as a result
26    of any of the following:

 

 

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1            (A) bankruptcy, a receivership, or a debt
2        adjustment initiated by or against the initial
3        registration or the substantial owners of the initial
4        registration;
5            (B) cancellation, revocation, or termination of
6        any registration by the Illinois Department of Public
7        Health;
8            (C) a determination by the Illinois Department of
9        Public Health that transfer of the registration is in
10        the best interests of Illinois qualifying patients as
11        defined by the Compassionate Use of Medical Cannabis
12        Program Act;
13            (D) the death of an owner of the equity interest in
14        a registrant;
15            (E) the acquisition of a controlling interest in
16        the stock or substantially all of the assets of a
17        publicly traded company;
18            (F) a transfer by a parent company to a wholly
19        owned subsidiary; or
20            (G) the transfer or sale to or by one person to
21        another person where both persons were initial owners
22        of the registration when the registration was issued;
23        or
24        (2) the cannabis cultivation center registration,
25    medical cannabis dispensary registration, or the
26    controlling interest in a registrant's property is

 

 

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1    transferred in a transaction to lineal descendants in which
2    no gain or loss is recognized or as a result of a
3    transaction in accordance with Section 351 of the Internal
4    Revenue Code in which no gain or loss is recognized.
5    (p) Illinois Innovation Credit.
6        (1) For tax years ending on or after December 31, 2020,
7    a taxpayer shall be allowed a credit against the tax
8    imposed by subsections (a) and (b) of this Section in an
9    amount equal to 1.3% of the qualified research expenses
10    made by the taxpayer in Illinois. In no event shall a
11    credit under this subsection reduce the taxpayer's
12    liability under this Act to less than zero. A taxpayer may
13    elect to have the unused credit shown on its final
14    completed return carried over as a credit against his or
15    her tax liability for the following 5 taxable years or
16    until the credit has been fully used, whichever occurs
17    first. This subsection (p) is exempt from the provisions of
18    Section 250 of this Act.
19        (2) As used in this subsection:
20        "Qualified research" means activities designed to
21    promote any or all of the following:
22            (A) new computer modeling technology;
23            (B) new 3D modeling or imaging technology;
24            (C) new public infrastructure materials; or
25            (D) new public infrastructure design.
26        "Qualified research expenses" means:

 

 

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1            (A) any wages paid or incurred to an employee for
2        qualified services performed by such employee;
3            (B) any amount paid or incurred for supplies used
4        in the conduct of qualified research; and
5            (C) any amount paid or incurred by the taxpayer to
6        any person (other than an employee of the taxpayer) for
7        qualified research.
8(Source: P.A. 100-22, eff. 7-6-17; 101-9, eff. 6-5-19; 101-31,
9eff. 6-28-19; 101-207, eff. 8-2-19; 101-363, eff. 8-9-19;
10revised 9-17-19.)
 
11    (Text of Section after amendment by P.A. 101-8)
12    Sec. 201. Tax imposed.
13    (a) In general. A tax measured by net income is hereby
14imposed on every individual, corporation, trust and estate for
15each taxable year ending after July 31, 1969 on the privilege
16of earning or receiving income in or as a resident of this
17State. Such tax shall be in addition to all other occupation or
18privilege taxes imposed by this State or by any municipal
19corporation or political subdivision thereof.
20    (b) Rates. The tax imposed by subsection (a) of this
21Section shall be determined as follows, except as adjusted by
22subsection (d-1):
23        (1) In the case of an individual, trust or estate, for
24    taxable years ending prior to July 1, 1989, an amount equal
25    to 2 1/2% of the taxpayer's net income for the taxable

 

 

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

 

 

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1    of (i) 5% of the taxpayer's net income for the period prior
2    to January 1, 2015, as calculated under Section 202.5, and
3    (ii) 3.75% of the taxpayer's net income for the period
4    after December 31, 2014, as calculated under Section 202.5.
5        (5.2) In the case of an individual, trust, or estate,
6    for taxable years beginning on or after January 1, 2015,
7    and ending prior to July 1, 2017, an amount equal to 3.75%
8    of the taxpayer's net income for the taxable year.
9        (5.3) In the case of an individual, trust, or estate,
10    for taxable years beginning prior to July 1, 2017, and
11    ending after June 30, 2017, an amount equal to the sum of
12    (i) 3.75% of the taxpayer's net income for the period prior
13    to July 1, 2017, as calculated under Section 202.5, and
14    (ii) 4.95% of the taxpayer's net income for the period
15    after June 30, 2017, 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 July 1, 2017 and
18    beginning prior to January 1, 2021, an amount equal to
19    4.95% of the taxpayer's net income for the taxable year.
20        (5.5) In the case of an individual, trust, or estate,
21    for taxable years beginning on or after January 1, 2021, an
22    amount calculated under the rate structure set forth in
23    Section 201.1.
24        (6) In the case of a corporation, for taxable years
25    ending prior to July 1, 1989, an amount equal to 4% of the
26    taxpayer's net income for the taxable year.

 

 

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

 

 

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1    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
2    of the taxpayer's net income for the period after December
3    31, 2014, as calculated under Section 202.5.
4        (12) In the case of a corporation, for taxable years
5    beginning on or after January 1, 2015, and ending prior to
6    July 1, 2017, an amount equal to 5.25% of the taxpayer's
7    net income for the taxable year.
8        (13) In the case of a corporation, for taxable years
9    beginning prior to July 1, 2017, and ending after June 30,
10    2017, an amount equal to the sum of (i) 5.25% of the
11    taxpayer's net income for the period prior to July 1, 2017,
12    as calculated under Section 202.5, and (ii) 7% of the
13    taxpayer's net income for the period after June 30, 2017,
14    as calculated under Section 202.5.
15        (14) In the case of a corporation, for taxable years
16    beginning on or after July 1, 2017 and beginning prior to
17    January 1, 2021, an amount equal to 7% of the taxpayer's
18    net income for the taxable year.
19        (15) In the case of a corporation, for taxable years
20    beginning on or after January 1, 2021, an amount equal to
21    7.99% of the taxpayer's net income for the taxable year.
22    The rates under this subsection (b) are subject to the
23provisions of Section 201.5.
24    (b-5) Surcharge; sale or exchange of assets, properties,
25and intangibles of organization gaming licensees. For each of
26taxable years 2019 through 2027, a surcharge is imposed on all

 

 

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1taxpayers on income arising from the sale or exchange of
2capital assets, depreciable business property, real property
3used in the trade or business, and Section 197 intangibles (i)
4of an organization licensee under the Illinois Horse Racing Act
5of 1975 and (ii) of an organization gaming licensee under the
6Illinois Gambling Act. The amount of the surcharge is equal to
7the amount of federal income tax liability for the taxable year
8attributable to those sales and exchanges. The surcharge
9imposed shall not apply if:
10        (1) the organization gaming license, organization
11    license, or racetrack property is transferred as a result
12    of any of the following:
13            (A) bankruptcy, a receivership, or a debt
14        adjustment initiated by or against the initial
15        licensee or the substantial owners of the initial
16        licensee;
17            (B) cancellation, revocation, or termination of
18        any such license by the Illinois Gaming Board or the
19        Illinois Racing Board;
20            (C) a determination by the Illinois Gaming Board
21        that transfer of the license is in the best interests
22        of Illinois gaming;
23            (D) the death of an owner of the equity interest in
24        a licensee;
25            (E) the acquisition of a controlling interest in
26        the stock or substantially all of the assets of a

 

 

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1        publicly traded company;
2            (F) a transfer by a parent company to a wholly
3        owned subsidiary; or
4            (G) the transfer or sale to or by one person to
5        another person where both persons were initial owners
6        of the license when the license was issued; or
7        (2) the controlling interest in the organization
8    gaming license, organization license, or racetrack
9    property is transferred in a transaction to lineal
10    descendants in which no gain or loss is recognized or as a
11    result of a transaction in accordance with Section 351 of
12    the Internal Revenue Code in which no gain or loss is
13    recognized; or
14        (3) live horse racing was not conducted in 2010 at a
15    racetrack located within 3 miles of the Mississippi River
16    under a license issued pursuant to the Illinois Horse
17    Racing Act of 1975.
18    The transfer of an organization gaming license,
19organization license, or racetrack property by a person other
20than the initial licensee to receive the organization gaming
21license is not subject to a surcharge. The Department shall
22adopt rules necessary to implement and administer this
23subsection.
24    (c) Personal Property Tax Replacement Income Tax.
25Beginning on July 1, 1979 and thereafter, in addition to such
26income tax, there is also hereby imposed the Personal Property

 

 

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1Tax Replacement Income Tax measured by net income on every
2corporation (including Subchapter S corporations), partnership
3and trust, for each taxable year ending after June 30, 1979.
4Such taxes are imposed on the privilege of earning or receiving
5income in or as a resident of this State. The Personal Property
6Tax Replacement Income Tax shall be in addition to the income
7tax imposed by subsections (a) and (b) of this Section and in
8addition to all other occupation or privilege taxes imposed by
9this State or by any municipal corporation or political
10subdivision thereof.
11    (d) Additional Personal Property Tax Replacement Income
12Tax Rates. The personal property tax replacement income tax
13imposed by this subsection and subsection (c) of this Section
14in the case of a corporation, other than a Subchapter S
15corporation and except as adjusted by subsection (d-1), shall
16be an additional amount equal to 2.85% of such taxpayer's net
17income for the taxable year, except that beginning on January
181, 1981, and thereafter, the rate of 2.85% specified in this
19subsection shall be reduced to 2.5%, and in the case of a
20partnership, trust or a Subchapter S corporation shall be an
21additional amount equal to 1.5% of such taxpayer's net income
22for the taxable year.
23    (d-1) Rate reduction for certain foreign insurers. In the
24case of a foreign insurer, as defined by Section 35A-5 of the
25Illinois Insurance Code, whose state or country of domicile
26imposes on insurers domiciled in Illinois a retaliatory tax

 

 

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

 

 

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1            (B) the privilege tax imposed by Section 409 of the
2        Illinois Insurance Code, the fire insurance company
3        tax imposed by Section 12 of the Fire Investigation
4        Act, and the fire department taxes imposed under
5        Section 11-10-1 of the Illinois Municipal Code,
6    equals 1.25% for taxable years ending prior to December 31,
7    2003, or 1.75% for taxable years ending on or after
8    December 31, 2003, of the net taxable premiums written for
9    the taxable year, as described by subsection (1) of Section
10    409 of the Illinois Insurance Code. This paragraph will in
11    no event increase the rates imposed under subsections (b)
12    and (d).
13        (2) Any reduction in the rates of tax imposed by this
14    subsection shall be applied first against the rates imposed
15    by subsection (b) and only after the tax imposed by
16    subsection (a) net of all credits allowed under this
17    Section other than the credit allowed under subsection (i)
18    has been reduced to zero, against the rates imposed by
19    subsection (d).
20    This subsection (d-1) is exempt from the provisions of
21Section 250.
22    (e) Investment credit. A taxpayer shall be allowed a credit
23against the Personal Property Tax Replacement Income Tax for
24investment in qualified property.
25        (1) A taxpayer shall be allowed a credit equal to .5%
26    of the basis of qualified property placed in service during

 

 

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1    the taxable year, provided such property is placed in
2    service on or after July 1, 1984. There shall be allowed an
3    additional credit equal to .5% of the basis of qualified
4    property placed in service during the taxable year,
5    provided such property is placed in service on or after
6    July 1, 1986, and the taxpayer's base employment within
7    Illinois has increased by 1% or more over the preceding
8    year as determined by the taxpayer's employment records
9    filed with the Illinois Department of Employment Security.
10    Taxpayers who are new to Illinois shall be deemed to have
11    met the 1% growth in base employment for the first year in
12    which they file employment records with the Illinois
13    Department of Employment Security. The provisions added to
14    this Section by Public Act 85-1200 (and restored by Public
15    Act 87-895) shall be construed as declaratory of existing
16    law and not as a new enactment. If, in any year, the
17    increase in base employment within Illinois over the
18    preceding year is less than 1%, the additional credit shall
19    be limited to that percentage times a fraction, the
20    numerator of which is .5% and the denominator of which is
21    1%, but shall not exceed .5%. The investment credit shall
22    not be allowed to the extent that it would reduce a
23    taxpayer's liability in any tax year below zero, nor may
24    any credit for qualified property be allowed for any year
25    other than the year in which the property was placed in
26    service in Illinois. For tax years ending on or after

 

 

SB3875- 52 -LRB101 18631 HLH 68086 b

1    December 31, 1987, and on or before December 31, 1988, the
2    credit shall be allowed for the tax year in which the
3    property is placed in service, or, if the amount of the
4    credit exceeds the tax liability for that year, whether it
5    exceeds the original liability or the liability as later
6    amended, such excess may be carried forward and applied to
7    the tax liability of the 5 taxable years following the
8    excess credit years if the taxpayer (i) makes investments
9    which cause the creation of a minimum of 2,000 full-time
10    equivalent jobs in Illinois, (ii) is located in an
11    enterprise zone established pursuant to the Illinois
12    Enterprise Zone Act and (iii) is certified by the
13    Department of Commerce and Community Affairs (now
14    Department of Commerce and Economic Opportunity) as
15    complying with the requirements specified in clause (i) and
16    (ii) by July 1, 1986. The Department of Commerce and
17    Community Affairs (now Department of Commerce and Economic
18    Opportunity) shall notify the Department of Revenue of all
19    such certifications immediately. For tax years ending
20    after December 31, 1988, the credit shall be allowed for
21    the tax year in which the property is placed in service,
22    or, if the amount of the credit exceeds the tax liability
23    for that year, whether it exceeds the original liability or
24    the liability as later amended, such excess may be carried
25    forward and applied to the tax liability of the 5 taxable
26    years following the excess credit years. The credit shall

 

 

SB3875- 53 -LRB101 18631 HLH 68086 b

1    be applied to the earliest year for which there is a
2    liability. If there is credit from more than one tax year
3    that is available to offset a liability, earlier credit
4    shall be applied first.
5        (2) The term "qualified property" means property
6    which:
7            (A) is tangible, whether new or used, including
8        buildings and structural components of buildings and
9        signs that are real property, but not including land or
10        improvements to real property that are not a structural
11        component of a building such as landscaping, sewer
12        lines, local access roads, fencing, parking lots, and
13        other appurtenances;
14            (B) is depreciable pursuant to Section 167 of the
15        Internal Revenue Code, except that "3-year property"
16        as defined in Section 168(c)(2)(A) of that Code is not
17        eligible for the credit provided by this subsection
18        (e);
19            (C) is acquired by purchase as defined in Section
20        179(d) of the Internal Revenue Code;
21            (D) is used in Illinois by a taxpayer who is
22        primarily engaged in manufacturing, or in mining coal
23        or fluorite, or in retailing, or was placed in service
24        on or after July 1, 2006 in a River Edge Redevelopment
25        Zone established pursuant to the River Edge
26        Redevelopment Zone Act; and

 

 

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1            (E) has not previously been used in Illinois in
2        such a manner and by such a person as would qualify for
3        the credit provided by this subsection (e) or
4        subsection (f).
5        (3) For purposes of this subsection (e),
6    "manufacturing" means the material staging and production
7    of tangible personal property by procedures commonly
8    regarded as manufacturing, processing, fabrication, or
9    assembling which changes some existing material into new
10    shapes, new qualities, or new combinations. For purposes of
11    this subsection (e) the term "mining" shall have the same
12    meaning as the term "mining" in Section 613(c) of the
13    Internal Revenue Code. For purposes of this subsection (e),
14    the term "retailing" means the sale of tangible personal
15    property for use or consumption and not for resale, or
16    services rendered in conjunction with the sale of tangible
17    personal property for use or consumption and not for
18    resale. For purposes of this subsection (e), "tangible
19    personal property" has the same meaning as when that term
20    is used in the Retailers' Occupation Tax Act, and, for
21    taxable years ending after December 31, 2008, does not
22    include the generation, transmission, or distribution of
23    electricity.
24        (4) 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        (5) If the basis of the property for federal income tax
2    depreciation purposes is increased after it has been placed
3    in service in Illinois by the taxpayer, the amount of such
4    increase shall be deemed property placed in service on the
5    date of such increase in basis.
6        (6) The term "placed in service" shall have the same
7    meaning as under Section 46 of the Internal Revenue Code.
8        (7) If during any taxable year, any property ceases to
9    be qualified property in the hands of the taxpayer within
10    48 months after being placed in service, or the situs of
11    any qualified property is moved outside Illinois within 48
12    months after being placed in service, the Personal Property
13    Tax Replacement Income Tax for such taxable year shall be
14    increased. Such increase shall be determined by (i)
15    recomputing the investment credit which would have been
16    allowed for the year in which credit for such property was
17    originally allowed by eliminating such property from such
18    computation and, (ii) subtracting such recomputed credit
19    from the amount of credit previously allowed. For the
20    purposes of this paragraph (7), a reduction of the basis of
21    qualified property resulting from a redetermination of the
22    purchase price shall be deemed a disposition of qualified
23    property to the extent of such reduction.
24        (8) Unless the investment credit is extended by law,
25    the basis of qualified property shall not include costs
26    incurred after December 31, 2018, except for costs incurred

 

 

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1    pursuant to a binding contract entered into on or before
2    December 31, 2018.
3        (9) Each taxable year ending before December 31, 2000,
4    a partnership may elect to pass through to its partners the
5    credits to which the partnership is entitled under this
6    subsection (e) for the taxable year. A partner may use the
7    credit allocated to him or her under this paragraph only
8    against the tax imposed in subsections (c) and (d) of this
9    Section. If the partnership makes that election, those
10    credits shall be allocated among the partners in the
11    partnership in accordance with the rules set forth in
12    Section 704(b) of the Internal Revenue Code, and the rules
13    promulgated under that Section, and the allocated amount of
14    the credits shall be allowed to the partners for that
15    taxable year. The partnership shall make this election on
16    its Personal Property Tax Replacement Income Tax return for
17    that taxable year. The election to pass through the credits
18    shall be irrevocable.
19        For taxable years ending on or after December 31, 2000,
20    a partner that qualifies its partnership for a subtraction
21    under subparagraph (I) of paragraph (2) of subsection (d)
22    of Section 203 or a shareholder that qualifies a Subchapter
23    S corporation for a subtraction under subparagraph (S) of
24    paragraph (2) of subsection (b) of Section 203 shall be
25    allowed a credit under this subsection (e) equal to its
26    share of the credit earned under this subsection (e) during

 

 

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

 

 

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1    River Edge Redevelopment Zone and shall not be allowed to
2    the extent that it would reduce a taxpayer's liability for
3    the tax imposed by subsections (a) and (b) of this Section
4    to below zero. For tax years ending on or after December
5    31, 1985, the credit shall be allowed for the tax year in
6    which the property is placed in service, or, if the amount
7    of the credit exceeds the tax liability for that year,
8    whether it exceeds the original liability or the liability
9    as later amended, such excess may be carried forward and
10    applied to the tax liability of the 5 taxable years
11    following the excess credit year. The credit shall be
12    applied to the earliest year for which there is a
13    liability. If there is credit from more than one tax year
14    that is available to offset a liability, the credit
15    accruing first in time shall be applied first.
16        (2) The term qualified property means property which:
17            (A) is tangible, whether new or used, including
18        buildings and structural components of buildings;
19            (B) is depreciable pursuant to Section 167 of the
20        Internal Revenue Code, except that "3-year property"
21        as defined in Section 168(c)(2)(A) of that Code is not
22        eligible for the credit provided by this subsection
23        (f);
24            (C) is acquired by purchase as defined in Section
25        179(d) of the Internal Revenue Code;
26            (D) is used in the Enterprise Zone or River Edge

 

 

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

 

 

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1    originally allowed by eliminating such property from such
2    computation, and (ii) subtracting such recomputed credit
3    from the amount of credit previously allowed. For the
4    purposes of this paragraph (6), a reduction of the basis of
5    qualified property resulting from a redetermination of the
6    purchase price shall be deemed a disposition of qualified
7    property to the extent of such reduction.
8        (7) There shall be allowed an additional credit equal
9    to 0.5% of the basis of qualified property placed in
10    service during the taxable year in a River Edge
11    Redevelopment Zone, provided such property is placed in
12    service on or after July 1, 2006, and the taxpayer's base
13    employment within Illinois has increased by 1% or more over
14    the preceding year as determined by the taxpayer's
15    employment records filed with the Illinois Department of
16    Employment Security. Taxpayers who are new to Illinois
17    shall be deemed to have met the 1% growth in base
18    employment for the first year in which they file employment
19    records with the Illinois Department of Employment
20    Security. If, in any year, the increase in base employment
21    within Illinois over the preceding year is less than 1%,
22    the additional credit shall be limited to that percentage
23    times a fraction, the numerator of which is 0.5% and the
24    denominator of which is 1%, but shall not exceed 0.5%.
25        (8) For taxable years beginning on or after January 1,
26    2021, there shall be allowed an Enterprise Zone

 

 

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1    construction jobs credit against the taxes imposed under
2    subsections (a) and (b) of this Section as provided in
3    Section 13 of the Illinois Enterprise Zone Act.
4        The credit or credits may not reduce the taxpayer's
5    liability to less than zero. If the amount of the credit or
6    credits exceeds the taxpayer's liability, the excess may be
7    carried forward and applied against the taxpayer's
8    liability in succeeding calendar years in the same manner
9    provided under paragraph (4) of Section 211 of this Act.
10    The credit or credits shall be applied to the earliest year
11    for which there is a tax liability. If there are credits
12    from more than one taxable year that are available to
13    offset a liability, the earlier credit shall be applied
14    first.
15        For partners, shareholders of Subchapter S
16    corporations, and owners of limited liability companies,
17    if the liability company is treated as a partnership for
18    the purposes of federal and State income taxation, there
19    shall be allowed a credit under this Section to be
20    determined in accordance with the determination of income
21    and distributive share of income under Sections 702 and 704
22    and Subchapter S of the Internal Revenue Code.
23        The total aggregate amount of credits awarded under the
24    Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
25    amendatory Act of the 101st General Assembly) shall not
26    exceed $20,000,000 in any State fiscal year.

 

 

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1        This paragraph (8) is exempt from the provisions of
2    Section 250.
3    (g) (Blank).
4    (h) Investment credit; High Impact Business.
5        (1) Subject to subsections (b) and (b-5) of Section 5.5
6    of the Illinois Enterprise Zone Act, a taxpayer shall be
7    allowed a credit against the tax imposed by subsections (a)
8    and (b) of this Section for investment in qualified
9    property which is placed in service by a Department of
10    Commerce and Economic Opportunity designated High Impact
11    Business. The credit shall be .5% of the basis for such
12    property. The credit shall not be available (i) until the
13    minimum investments in qualified property set forth in
14    subdivision (a)(3)(A) of Section 5.5 of the Illinois
15    Enterprise Zone Act have been satisfied or (ii) until the
16    time authorized in subsection (b-5) of the Illinois
17    Enterprise Zone Act for entities designated as High Impact
18    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
19    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
20    Act, and shall not be allowed to the extent that it would
21    reduce a taxpayer's liability for the tax imposed by
22    subsections (a) and (b) of this Section to below zero. The
23    credit applicable to such investments shall be taken in the
24    taxable year in which such investments have been completed.
25    The credit for additional investments beyond the minimum
26    investment by a designated high impact business authorized

 

 

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1    under subdivision (a)(3)(A) of Section 5.5 of the Illinois
2    Enterprise Zone Act shall be available only in the taxable
3    year in which the property is placed in service and shall
4    not be allowed to the extent that it would reduce a
5    taxpayer's liability for the tax imposed by subsections (a)
6    and (b) of this Section to below zero. For tax years ending
7    on or after December 31, 1987, the credit shall be allowed
8    for the tax year in which the property is placed in
9    service, or, 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, the
17    credit accruing first in time shall be applied first.
18        Changes made in this subdivision (h)(1) by Public Act
19    88-670 restore changes made by Public Act 85-1182 and
20    reflect existing law.
21        (2) The term qualified property means property which:
22            (A) is tangible, whether new or used, including
23        buildings and structural components of buildings;
24            (B) is depreciable pursuant to Section 167 of the
25        Internal Revenue Code, except that "3-year property"
26        as defined in Section 168(c)(2)(A) of that Code is not

 

 

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

 

 

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1    by (i) recomputing the investment credit which would have
2    been allowed for the year in which credit for such property
3    was originally allowed by eliminating such property from
4    such computation, and (ii) subtracting such recomputed
5    credit from the amount of credit previously allowed. For
6    the purposes of this paragraph (6), a reduction of the
7    basis of qualified property resulting from a
8    redetermination of the purchase price shall be deemed a
9    disposition of qualified property to the extent of such
10    reduction.
11        (7) Beginning with tax years ending after December 31,
12    1996, if a taxpayer qualifies for the credit under this
13    subsection (h) and thereby is granted a tax abatement and
14    the taxpayer relocates its entire facility in violation of
15    the explicit terms and length of the contract under Section
16    18-183 of the Property Tax Code, the tax imposed under
17    subsections (a) and (b) of this Section shall be increased
18    for the taxable year in which the taxpayer relocated its
19    facility by an amount equal to the amount of credit
20    received by the taxpayer under this subsection (h).
21    (h-5) High Impact Business construction constructions jobs
22credit. For taxable years beginning on or after January 1,
232021, there shall also be allowed a High Impact Business
24construction jobs credit against the tax imposed under
25subsections (a) and (b) of this Section as provided in
26subsections (i) and (j) of Section 5.5 of the Illinois

 

 

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1Enterprise Zone Act.
2    The credit or credits may not reduce the taxpayer's
3liability to less than zero. If the amount of the credit or
4credits exceeds the taxpayer's liability, the excess may be
5carried forward and applied against the taxpayer's liability in
6succeeding calendar years in the manner provided under
7paragraph (4) of Section 211 of this Act. The credit or credits
8shall be applied to the earliest year for which there is a tax
9liability. If there are credits from more than one taxable year
10that are available to offset a liability, the earlier credit
11shall be applied first.
12    For partners, shareholders of Subchapter S corporations,
13and owners of limited liability companies, if the liability
14company is treated as a partnership for the purposes of federal
15and State income taxation, there shall be allowed a credit
16under this Section to be determined in accordance with the
17determination of income and distributive share of income under
18Sections 702 and 704 and Subchapter S of the Internal Revenue
19Code.
20    The total aggregate amount of credits awarded under the
21Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
22amendatory Act of the 101st General Assembly) shall not exceed
23$20,000,000 in any State fiscal year.
24    This subsection (h-5) is exempt from the provisions of
25Section 250.
26    (i) Credit for Personal Property Tax Replacement Income

 

 

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1Tax. For tax years ending prior to December 31, 2003, a credit
2shall be allowed against the tax imposed by subsections (a) and
3(b) of this Section for the tax imposed by subsections (c) and
4(d) of this Section. This credit shall be computed by
5multiplying the tax imposed by subsections (c) and (d) of this
6Section by a fraction, the numerator of which is base income
7allocable to Illinois and the denominator of which is Illinois
8base income, and further multiplying the product by the tax
9rate imposed by subsections (a) and (b) of this Section.
10    Any credit earned on or after December 31, 1986 under this
11subsection which is unused in the year the credit is computed
12because it exceeds the tax liability imposed by subsections (a)
13and (b) for that year (whether it exceeds the original
14liability or the liability as later amended) may be carried
15forward and applied to the tax liability imposed by subsections
16(a) and (b) of the 5 taxable years following the excess credit
17year, provided that no credit may be carried forward to any
18year ending on or after December 31, 2003. This credit shall be
19applied first to the earliest year for which there is a
20liability. If there is a credit under this subsection from more
21than one tax year that is available to offset a liability the
22earliest credit arising under this subsection shall be applied
23first.
24    If, during any taxable year ending on or after December 31,
251986, the tax imposed by subsections (c) and (d) of this
26Section for which a taxpayer has claimed a credit under this

 

 

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1subsection (i) is reduced, the amount of credit for such tax
2shall also be reduced. Such reduction shall be determined by
3recomputing the credit to take into account the reduced tax
4imposed by subsections (c) and (d). If any portion of the
5reduced amount of credit has been carried to a different
6taxable year, an amended return shall be filed for such taxable
7year to reduce the amount of credit claimed.
8    (j) Training expense credit. Beginning with tax years
9ending on or after December 31, 1986 and prior to December 31,
102003, a taxpayer shall be allowed a credit against the tax
11imposed by subsections (a) and (b) under this Section for all
12amounts paid or accrued, on behalf of all persons employed by
13the taxpayer in Illinois or Illinois residents employed outside
14of Illinois by a taxpayer, for educational or vocational
15training in semi-technical or technical fields or semi-skilled
16or skilled fields, which were deducted from gross income in the
17computation of taxable income. The credit against the tax
18imposed by subsections (a) and (b) shall be 1.6% of such
19training expenses. For partners, shareholders of subchapter S
20corporations, and owners of limited liability companies, if the
21liability company is treated as a partnership for purposes of
22federal and State income taxation, there shall be allowed a
23credit under this subsection (j) to be determined in accordance
24with the determination of income and distributive share of
25income under Sections 702 and 704 and subchapter S of the
26Internal Revenue Code.

 

 

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1    Any credit allowed under this subsection which is unused in
2the year the credit is earned may be carried forward to each of
3the 5 taxable years following the year for which the credit is
4first computed until it is used. This credit shall be applied
5first to the earliest year for which there is a liability. If
6there is a credit under this subsection from more than one tax
7year that is available to offset a liability, the earliest
8credit arising under this subsection shall be applied first. No
9carryforward credit may be claimed in any tax year ending on or
10after December 31, 2003.
11    (k) Research and development credit. For tax years ending
12after July 1, 1990 and prior to December 31, 2003, and
13beginning again for tax years ending on or after December 31,
142004, and ending prior to January 1, 2027, a taxpayer shall be
15allowed a credit against the tax imposed by subsections (a) and
16(b) of this Section for increasing research activities in this
17State. The credit allowed against the tax imposed by
18subsections (a) and (b) shall be equal to 6 1/2% of the
19qualifying expenditures for increasing research activities in
20this State. For partners, shareholders of subchapter S
21corporations, and owners of limited liability companies, if the
22liability company is treated as a partnership for purposes of
23federal and State income taxation, there shall be allowed a
24credit under this subsection to be determined in accordance
25with the determination of income and distributive share of
26income under Sections 702 and 704 and subchapter S of the

 

 

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1Internal Revenue Code.
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.
23    If an unused credit is carried forward to a given year from
242 or more earlier years, that credit arising in the earliest
25year will be applied first against the tax liability for the
26given year. If a tax liability for the given year still

 

 

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1remains, the credit from the next earliest year will then be
2applied, and so on, until all credits have been used or no tax
3liability for the given year remains. Any remaining unused
4credit or credits then will be carried forward to the next
5following year in which a tax liability is incurred, except
6that no credit can be carried forward to a year which is more
7than 5 years after the year in which the expense for which the
8credit is given was incurred.
9    No inference shall be drawn from Public Act 91-644 this
10amendatory Act of the 91st General Assembly in construing this
11Section for taxable years beginning before January 1, 1999.
12    It is the intent of the General Assembly that the research
13and development credit under this subsection (k) shall apply
14continuously for all tax years ending on or after December 31,
152004 and ending prior to January 1, 2027, including, but not
16limited to, the period beginning on January 1, 2016 and ending
17on July 6, 2017 (the effective date of Public Act 100-22) this
18amendatory Act of the 100th General Assembly. All actions taken
19in reliance on the continuation of the credit under this
20subsection (k) by any taxpayer are hereby validated.
21    A taxpayer is not required to have obtained a research and
22development credit with respect to his or her federal income
23taxes to qualify for a credit under this subsection.
24    (l) Environmental Remediation Tax Credit.
25        (i) For tax years ending after December 31, 1997 and on
26    or before December 31, 2001, a taxpayer shall be allowed a

 

 

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

 

 

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

 

 

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1    This credit shall be applied first to the earliest year for
2    which there is a liability. If there is a credit under this
3    subsection from more than one tax year that is available to
4    offset a liability, the earliest credit arising under this
5    subsection shall be applied first. A credit allowed under
6    this subsection may be sold to a buyer as part of a sale of
7    all or part of the remediation site for which the credit
8    was granted. The purchaser of a remediation site and the
9    tax credit shall succeed to the unused credit and remaining
10    carry-forward period of the seller. To perfect the
11    transfer, the assignor shall record the transfer in the
12    chain of title for the site and provide written notice to
13    the Director of the Illinois Department of Revenue of the
14    assignor's intent to sell the remediation site and the
15    amount of the tax credit to be transferred as a portion of
16    the sale. In no event may a credit be transferred to any
17    taxpayer if the taxpayer or a related party would not be
18    eligible under the provisions of subsection (i).
19        (iii) For purposes of this Section, the term "site"
20    shall have the same meaning as under Section 58.2 of the
21    Environmental Protection Act.
22    (m) Education expense credit. Beginning with tax years
23ending after December 31, 1999, a taxpayer who is the custodian
24of one or more qualifying pupils shall be allowed a credit
25against the tax imposed by subsections (a) and (b) of this
26Section for qualified education expenses incurred on behalf of

 

 

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1the qualifying pupils. The credit shall be equal to 25% of
2qualified education expenses, but in no event may the total
3credit under this subsection claimed by a family that is the
4custodian of qualifying pupils exceed (i) $500 for tax years
5ending prior to December 31, 2017, and (ii) $750 for tax years
6ending on or after December 31, 2017. In no event shall a
7credit under this subsection reduce the taxpayer's liability
8under this Act to less than zero. Notwithstanding any other
9provision of law, for taxable years beginning on or after
10January 1, 2017, no taxpayer may claim a credit under this
11subsection (m) if the taxpayer's adjusted gross income for the
12taxable year exceeds (i) $500,000, in the case of spouses
13filing a joint federal tax return or (ii) $250,000, in the case
14of all other taxpayers. This subsection is exempt from the
15provisions of Section 250 of this Act.
16    For purposes of this subsection:
17    "Qualifying pupils" means individuals who (i) are
18residents of the State of Illinois, (ii) are under the age of
1921 at the close of the school year for which a credit is
20sought, and (iii) during the school year for which a credit is
21sought were full-time pupils enrolled in a kindergarten through
22twelfth grade education program at any school, as defined in
23this subsection.
24    "Qualified education expense" means the amount incurred on
25behalf of a qualifying pupil in excess of $250 for tuition,
26book fees, and lab fees at the school in which the pupil is

 

 

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1enrolled during the regular school year.
2    "School" means any public or nonpublic elementary or
3secondary school in Illinois that is in compliance with Title
4VI of the Civil Rights Act of 1964 and attendance at which
5satisfies the requirements of Section 26-1 of the School Code,
6except that nothing shall be construed to require a child to
7attend any particular public or nonpublic school to qualify for
8the credit under this Section.
9    "Custodian" means, with respect to qualifying pupils, an
10Illinois resident who is a parent, the parents, a legal
11guardian, or the legal guardians of the qualifying pupils.
12    (n) River Edge Redevelopment Zone site remediation tax
13credit.
14        (i) For tax years ending on or after December 31, 2006,
15    a taxpayer shall be allowed a credit against the tax
16    imposed by subsections (a) and (b) of this Section for
17    certain amounts paid for unreimbursed eligible remediation
18    costs, as specified in this subsection. For purposes of
19    this Section, "unreimbursed eligible remediation costs"
20    means costs approved by the Illinois Environmental
21    Protection Agency ("Agency") under Section 58.14a of the
22    Environmental Protection Act that were paid in performing
23    environmental remediation at a site within a River Edge
24    Redevelopment Zone for which a No Further Remediation
25    Letter was issued by the Agency and recorded under Section
26    58.10 of the Environmental Protection Act. The credit must

 

 

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

 

 

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

 

 

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1used in the trade or business, and Section 197 intangibles of
2an organization registrant under the Compassionate Use of
3Medical Cannabis Program Act. The amount of the surcharge is
4equal to the amount of federal income tax liability for the
5taxable year attributable to those sales and exchanges. The
6surcharge imposed does not apply if:
7        (1) the medical cannabis cultivation center
8    registration, medical cannabis dispensary registration, or
9    the property of a registration is transferred as a result
10    of any of the following:
11            (A) bankruptcy, a receivership, or a debt
12        adjustment initiated by or against the initial
13        registration or the substantial owners of the initial
14        registration;
15            (B) cancellation, revocation, or termination of
16        any registration by the Illinois Department of Public
17        Health;
18            (C) a determination by the Illinois Department of
19        Public Health that transfer of the registration is in
20        the best interests of Illinois qualifying patients as
21        defined by the Compassionate Use of Medical Cannabis
22        Program Act;
23            (D) the death of an owner of the equity interest in
24        a registrant;
25            (E) the acquisition of a controlling interest in
26        the stock or substantially all of the assets of a

 

 

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1        publicly traded company;
2            (F) a transfer by a parent company to a wholly
3        owned subsidiary; or
4            (G) the transfer or sale to or by one person to
5        another person where both persons were initial owners
6        of the registration when the registration was issued;
7        or
8        (2) the cannabis cultivation center registration,
9    medical cannabis dispensary registration, or the
10    controlling interest in a registrant's property is
11    transferred in a transaction to lineal descendants in which
12    no gain or loss is recognized or as a result of a
13    transaction in accordance with Section 351 of the Internal
14    Revenue Code in which no gain or loss is recognized.
15    (p) Illinois Innovation Credit.
16        (1) For tax years ending on or after December 31, 2020,
17    a taxpayer shall be allowed a credit against the tax
18    imposed by subsections (a) and (b) of this Section in an
19    amount equal to 1.3% of the qualified research expenses
20    made by the taxpayer in Illinois. In no event shall a
21    credit under this subsection reduce the taxpayer's
22    liability under this Act to less than zero. A taxpayer may
23    elect to have the unused credit shown on its final
24    completed return carried over as a credit against his or
25    her tax liability for the following 5 taxable years or
26    until the credit has been fully used, whichever occurs

 

 

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1    first. This subsection (p) is exempt from the provisions of
2    Section 250 of this Act.
3        (2) As used in this subsection:
4        "Qualified research" means activities designed to
5    promote any or all of the following:
6            (A) new computer modeling technology;
7            (B) new 3D modeling or imaging technology;
8            (C) new public infrastructure materials; or
9            (D) new public infrastructure design.
10        "Qualified research expenses" means:
11            (A) any wages paid or incurred to an employee for
12        qualified services performed by such employee;
13            (B) any amount paid or incurred for supplies used
14        in the conduct of qualified research; and
15            (C) any amount paid or incurred by the taxpayer to
16        any person (other than an employee of the taxpayer) for
17        qualified research.
18(Source: P.A. 100-22, eff. 7-6-17; 101-8, see Section 99 for
19effective date; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
20101-207, eff. 8-2-19; 101-363, eff. 8-9-19; revised 9-17-19.)
 
21    Section 95. No acceleration or delay. Where this Act makes
22changes in a statute that is represented in this Act by text
23that is not yet or no longer in effect (for example, a Section
24represented by multiple versions), the use of that text does
25not accelerate or delay the taking effect of (i) the changes

 

 

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1made by this Act or (ii) provisions derived from any other
2Public Act.