Illinois General Assembly - Full Text of HB2979
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Full Text of HB2979  102nd General Assembly

HB2979 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB2979

 

Introduced 2/19/2021, by Rep. Thomas Morrison

 

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

    Amends the Illinois Income Tax Act. Increases the maximum amount of the education expense credit to $1,500 (currently, $500). Adds athletic fees, driver's education fees, and fees and costs associated with certain out-of-school activities to the list of qualified education expenses. Effective immediately.


LRB102 14986 HLH 20341 b

 

 

A BILL FOR

 

HB2979LRB102 14986 HLH 20341 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 without the changes made by P.A. 101-8,
8which did not take effect (see Section 99 of P.A. 101-8))
9    Sec. 201. Tax imposed.
10    (a) In general. A tax measured by net income is hereby
11imposed on every individual, corporation, trust and estate for
12each taxable year ending after July 31, 1969 on the privilege
13of earning or receiving income in or as a resident of this
14State. Such tax shall be in addition to all other occupation or
15privilege taxes imposed by this State or by any municipal
16corporation or political subdivision thereof.
17    (b) Rates. The tax imposed by subsection (a) of this
18Section shall be determined as follows, except as adjusted by
19subsection (d-1):
20        (1) In the case of an individual, trust or estate, for
21    taxable years ending prior to July 1, 1989, an amount
22    equal to 2 1/2% of the taxpayer's net income for the
23    taxable year.

 

 

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

 

 

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1    to January 1, 2015, as calculated under Section 202.5, and
2    (ii) 3.75% of the taxpayer's net income for the period
3    after December 31, 2014, as calculated under Section
4    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
13    prior to July 1, 2017, as calculated under Section 202.5,
14    and (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, an
18    amount equal to 4.95% of the taxpayer's net income for the
19    taxable year.
20        (6) In the case of a corporation, for taxable years
21    ending prior to July 1, 1989, an amount equal to 4% of the
22    taxpayer's net income for the taxable year.
23        (7) In the case of a corporation, for taxable years
24    beginning prior to July 1, 1989 and ending after June 30,
25    1989, an amount equal to the sum of (i) 4% of the
26    taxpayer's net income for the period prior to July 1,

 

 

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

 

 

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1    beginning on or after January 1, 2015, and ending prior to
2    July 1, 2017, an amount equal to 5.25% of the taxpayer's
3    net income for the taxable year.
4        (13) In the case of a corporation, for taxable years
5    beginning prior to July 1, 2017, and ending after June 30,
6    2017, an amount equal to the sum of (i) 5.25% of the
7    taxpayer's net income for the period prior to July 1,
8    2017, as calculated under Section 202.5, and (ii) 7% of
9    the taxpayer's net income for the period after June 30,
10    2017, as calculated under Section 202.5.
11        (14) In the case of a corporation, for taxable years
12    beginning on or after July 1, 2017, an amount equal to 7%
13    of the taxpayer's net income for the taxable year.
14    The rates under this subsection (b) are subject to the
15provisions of Section 201.5.
16    (b-5) Surcharge; sale or exchange of assets, properties,
17and intangibles of organization gaming licensees. For each of
18taxable years 2019 through 2027, a surcharge is imposed on all
19taxpayers on income arising from the sale or exchange of
20capital assets, depreciable business property, real property
21used in the trade or business, and Section 197 intangibles (i)
22of an organization licensee under the Illinois Horse Racing
23Act of 1975 and (ii) of an organization gaming licensee under
24the Illinois Gambling Act. The amount of the surcharge is
25equal to the amount of federal income tax liability for the
26taxable year attributable to those sales and exchanges. The

 

 

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1surcharge imposed shall not apply if:
2        (1) the organization gaming license, organization
3    license, or racetrack property is transferred as a result
4    of any of the following:
5            (A) bankruptcy, a receivership, or a debt
6        adjustment initiated by or against the initial
7        licensee or the substantial owners of the initial
8        licensee;
9            (B) cancellation, revocation, or termination of
10        any such license by the Illinois Gaming Board or the
11        Illinois Racing Board;
12            (C) a determination by the Illinois Gaming Board
13        that transfer of the license is in the best interests
14        of Illinois gaming;
15            (D) the death of an owner of the equity interest in
16        a licensee;
17            (E) the acquisition of a controlling interest in
18        the stock or substantially all of the assets of a
19        publicly traded company;
20            (F) a transfer by a parent company to a wholly
21        owned subsidiary; or
22            (G) the transfer or sale to or by one person to
23        another person where both persons were initial owners
24        of the license when the license was issued; or
25        (2) the controlling interest in the organization
26    gaming license, organization license, or racetrack

 

 

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

 

 

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

 

 

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

 

 

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1    December 31, 2003, of the net taxable premiums written for
2    the taxable year, as described by subsection (1) of
3    Section 409 of the Illinois Insurance Code. This paragraph
4    will in no event increase the rates imposed under
5    subsections (b) and (d).
6        (2) Any reduction in the rates of tax imposed by this
7    subsection shall be applied first against the rates
8    imposed by subsection (b) and only after the tax imposed
9    by subsection (a) net of all credits allowed under this
10    Section other than the credit allowed under subsection (i)
11    has been reduced to zero, against the rates imposed by
12    subsection (d).
13    This subsection (d-1) is exempt from the provisions of
14Section 250.
15    (e) Investment credit. A taxpayer shall be allowed a
16credit against the Personal Property Tax Replacement Income
17Tax for investment in qualified property.
18        (1) A taxpayer shall be allowed a credit equal to .5%
19    of the basis of qualified property placed in service
20    during the taxable year, provided such property is placed
21    in service on or after July 1, 1984. There shall be allowed
22    an additional credit equal to .5% of the basis of
23    qualified property placed in service during the taxable
24    year, provided such property is placed in service on or
25    after July 1, 1986, and the taxpayer's base employment
26    within Illinois has increased by 1% or more over the

 

 

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

 

 

HB2979- 12 -LRB102 14986 HLH 20341 b

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

 

 

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

 

 

HB2979- 14 -LRB102 14986 HLH 20341 b

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

 

 

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1        (7) If during any taxable year, any property ceases to
2    be qualified property in the hands of the taxpayer within
3    48 months after being placed in service, or the situs of
4    any qualified property is moved outside Illinois within 48
5    months after being placed in service, the Personal
6    Property Tax Replacement Income Tax for such taxable year
7    shall be increased. Such increase shall be determined by
8    (i) recomputing the investment credit which would have
9    been allowed for the year in which credit for such
10    property was originally allowed by eliminating such
11    property from such computation and, (ii) subtracting such
12    recomputed credit from the amount of credit previously
13    allowed. For the purposes of this paragraph (7), a
14    reduction of the basis of qualified property resulting
15    from a redetermination of the purchase price shall be
16    deemed a disposition of qualified property to the extent
17    of such reduction.
18        (8) Unless the investment credit is extended by law,
19    the basis of qualified property shall not include costs
20    incurred after December 31, 2018, except for costs
21    incurred pursuant to a binding contract entered into on or
22    before December 31, 2018.
23        (9) Each taxable year ending before December 31, 2000,
24    a partnership may elect to pass through to its partners
25    the credits to which the partnership is entitled under
26    this subsection (e) for the taxable year. A partner may

 

 

HB2979- 16 -LRB102 14986 HLH 20341 b

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

 

 

HB2979- 17 -LRB102 14986 HLH 20341 b

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

 

 

HB2979- 18 -LRB102 14986 HLH 20341 b

1    placed in service, or, if the amount of the credit exceeds
2    the tax liability for that year, whether it exceeds the
3    original liability or the liability as later amended, such
4    excess may be carried forward and applied to the tax
5    liability of the 5 taxable years following the excess
6    credit year. The credit shall be applied to the earliest
7    year for which there is a liability. If there is credit
8    from more than one tax year that is available to offset a
9    liability, the credit accruing first in time shall be
10    applied first.
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        (f);
19            (C) is acquired by purchase as defined in Section
20        179(d) of the Internal Revenue Code;
21            (D) is used in the Enterprise Zone or River Edge
22        Redevelopment Zone by the taxpayer; and
23            (E) has not been previously used in Illinois in
24        such a manner and by such a person as would qualify for
25        the credit provided by this subsection (f) or
26        subsection (e).

 

 

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

 

 

HB2979- 20 -LRB102 14986 HLH 20341 b

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

 

 

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

 

 

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

 

 

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1    service and shall not be allowed to the extent that it
2    would reduce a taxpayer's liability for the tax imposed by
3    subsections (a) and (b) of this Section to below zero. For
4    tax years ending on or after December 31, 1987, the credit
5    shall be allowed for the tax year in which the property is
6    placed in service, or, if the amount of the credit exceeds
7    the tax liability for that year, whether it exceeds the
8    original liability or the liability as later amended, such
9    excess may be carried forward and applied to the tax
10    liability of the 5 taxable years following the excess
11    credit year. The credit shall be applied to the earliest
12    year for which there is a liability. If there is credit
13    from more than one tax year that is available to offset a
14    liability, the credit accruing first in time shall be
15    applied first.
16        Changes made in this subdivision (h)(1) by Public Act
17    88-670 restore changes made by Public Act 85-1182 and
18    reflect existing law.
19        (2) The term qualified property means property which:
20            (A) is tangible, whether new or used, including
21        buildings and structural components of buildings;
22            (B) is depreciable pursuant to Section 167 of the
23        Internal Revenue Code, except that "3-year property"
24        as defined in Section 168(c)(2)(A) of that Code is not
25        eligible for the credit provided by this subsection
26        (h);

 

 

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1            (C) is acquired by purchase as defined in Section
2        179(d) of the Internal Revenue Code; and
3            (D) is not eligible for the Enterprise Zone
4        Investment Credit provided by subsection (f) of this
5        Section.
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
10    tax depreciation purposes is increased after it has been
11    placed in service in a federally designated Foreign Trade
12    Zone or Sub-Zone located in Illinois by the taxpayer, the
13    amount of such increase shall be deemed property placed in
14    service on the 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 ending on or before
18    December 31, 1996, any property ceases to be qualified
19    property in the hands of the taxpayer within 48 months
20    after being placed in service, or the situs of any
21    qualified property is moved outside Illinois within 48
22    months after being placed in service, the tax imposed
23    under subsections (a) and (b) of this Section for such
24    taxable year shall be increased. Such increase shall be
25    determined by (i) recomputing the investment credit which
26    would have been allowed for the year in which credit for

 

 

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1    such property was originally allowed by eliminating such
2    property from such computation, and (ii) subtracting such
3    recomputed credit from the amount of credit previously
4    allowed. For the purposes of this paragraph (6), a
5    reduction of the basis of qualified property resulting
6    from a redetermination of the purchase price shall be
7    deemed a disposition of qualified property to the extent
8    of such reduction.
9        (7) Beginning with tax years ending after December 31,
10    1996, if a taxpayer qualifies for the credit under this
11    subsection (h) and thereby is granted a tax abatement and
12    the taxpayer relocates its entire facility in violation of
13    the explicit terms and length of the contract under
14    Section 18-183 of the Property Tax Code, the tax imposed
15    under subsections (a) and (b) of this Section shall be
16    increased for the taxable year in which the taxpayer
17    relocated its facility by an amount equal to the amount of
18    credit received by the taxpayer under this subsection (h).
19    (h-5) High Impact Business construction constructions jobs
20credit. For taxable years beginning on or after January 1,
212021, there shall also be allowed a High Impact Business
22construction jobs credit against the tax imposed under
23subsections (a) and (b) of this Section as provided in
24subsections (i) and (j) of Section 5.5 of the Illinois
25Enterprise Zone Act.
26    The credit or credits may not reduce the taxpayer's

 

 

HB2979- 26 -LRB102 14986 HLH 20341 b

1liability to less than zero. If the amount of the credit or
2credits exceeds the taxpayer's liability, the excess may be
3carried forward and applied against the taxpayer's liability
4in succeeding calendar years in the manner provided under
5paragraph (4) of Section 211 of this Act. The credit or credits
6shall be applied to the earliest year for which there is a tax
7liability. If there are credits from more than one taxable
8year that are available to offset a liability, the earlier
9credit shall be applied first.
10    For partners, shareholders of Subchapter S corporations,
11and owners of limited liability companies, if the liability
12company is treated as a partnership for the purposes of
13federal and State income taxation, there shall be allowed a
14credit under this Section to be determined in accordance with
15the determination of income and distributive share of income
16under Sections 702 and 704 and Subchapter S of the Internal
17Revenue Code.
18    The total aggregate amount of credits awarded under the
19Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
20amendatory Act of the 101st General Assembly) shall not exceed
21$20,000,000 in any State fiscal year.
22    This subsection (h-5) is exempt from the provisions of
23Section 250.
24    (i) Credit for Personal Property Tax Replacement Income
25Tax. For tax years ending prior to December 31, 2003, a credit
26shall be allowed against the tax imposed by subsections (a)

 

 

HB2979- 27 -LRB102 14986 HLH 20341 b

1and (b) of this Section for the tax imposed by subsections (c)
2and (d) of this Section. This credit shall be computed by
3multiplying the tax imposed by subsections (c) and (d) of this
4Section by a fraction, the numerator of which is base income
5allocable to Illinois and the denominator of which is Illinois
6base income, and further multiplying the product by the tax
7rate imposed by subsections (a) and (b) of this Section.
8    Any credit earned on or after December 31, 1986 under this
9subsection which is unused in the year the credit is computed
10because it exceeds the tax liability imposed by subsections
11(a) and (b) for that year (whether it exceeds the original
12liability or the liability as later amended) may be carried
13forward and applied to the tax liability imposed by
14subsections (a) and (b) of the 5 taxable years following the
15excess credit year, provided that no credit may be carried
16forward to any year ending on or after December 31, 2003. This
17credit shall be applied first to the earliest year for which
18there is a liability. If there is a credit under this
19subsection from more than one tax year that is available to
20offset a liability the earliest credit arising under this
21subsection shall be applied first.
22    If, during any taxable year ending on or after December
2331, 1986, the tax imposed by subsections (c) and (d) of this
24Section for which a taxpayer has claimed a credit under this
25subsection (i) is reduced, the amount of credit for such tax
26shall also be reduced. Such reduction shall be determined by

 

 

HB2979- 28 -LRB102 14986 HLH 20341 b

1recomputing the credit to take into account the reduced tax
2imposed by subsections (c) and (d). If any portion of the
3reduced amount of credit has been carried to a different
4taxable year, an amended return shall be filed for such
5taxable year to reduce the amount of credit claimed.
6    (j) Training expense credit. Beginning with tax years
7ending on or after December 31, 1986 and prior to December 31,
82003, a taxpayer shall be allowed a credit against the tax
9imposed by subsections (a) and (b) under this Section for all
10amounts paid or accrued, on behalf of all persons employed by
11the taxpayer in Illinois or Illinois residents employed
12outside of Illinois by a taxpayer, for educational or
13vocational training in semi-technical or technical fields or
14semi-skilled or skilled fields, which were deducted from gross
15income in the computation of taxable income. The credit
16against the tax imposed by subsections (a) and (b) shall be
171.6% of such training expenses. For partners, shareholders of
18subchapter S corporations, and owners of limited liability
19companies, if the liability company is treated as a
20partnership for purposes of federal and State income taxation,
21there shall be allowed a credit under this subsection (j) to be
22determined in accordance with the determination of income and
23distributive share of income under Sections 702 and 704 and
24subchapter S of the Internal Revenue Code.
25    Any credit allowed under this subsection which is unused
26in the year the credit is earned may be carried forward to each

 

 

HB2979- 29 -LRB102 14986 HLH 20341 b

1of the 5 taxable years following the year for which the credit
2is first computed until it is used. This credit shall be
3applied first to the earliest year for which there is a
4liability. If there is a credit under this subsection from
5more than one tax year that is available to offset a liability,
6the earliest credit arising under this subsection shall be
7applied first. No carryforward credit may be claimed in any
8tax year ending on or after December 31, 2003.
9    (k) Research and development credit. For tax years ending
10after July 1, 1990 and prior to December 31, 2003, and
11beginning again for tax years ending on or after December 31,
122004, and ending prior to January 1, 2027, a taxpayer shall be
13allowed a credit against the tax imposed by subsections (a)
14and (b) of this Section for increasing research activities in
15this State. The credit allowed against the tax imposed by
16subsections (a) and (b) shall be equal to 6 1/2% of the
17qualifying expenditures for increasing research activities in
18this State. For partners, shareholders of subchapter S
19corporations, and owners of limited liability companies, if
20the liability company is treated as a partnership for purposes
21of federal and State income taxation, there shall be allowed a
22credit under this subsection to be determined in accordance
23with the determination of income and distributive share of
24income under Sections 702 and 704 and subchapter S of the
25Internal Revenue Code.
26    For purposes of this subsection, "qualifying expenditures"

 

 

HB2979- 30 -LRB102 14986 HLH 20341 b

1means the qualifying expenditures as defined for the federal
2credit for increasing research activities which would be
3allowable under Section 41 of the Internal Revenue Code and
4which are conducted in this State, "qualifying expenditures
5for increasing research activities in this State" means the
6excess of qualifying expenditures for the taxable year in
7which incurred over qualifying expenditures for the base
8period, "qualifying expenditures for the base period" means
9the average of the qualifying expenditures for each year in
10the base period, and "base period" means the 3 taxable years
11immediately preceding the taxable year for which the
12determination is being made.
13    Any credit in excess of the tax liability for the taxable
14year may be carried forward. A taxpayer may elect to have the
15unused credit shown on its final completed return carried over
16as a credit against the tax liability for the following 5
17taxable years or until it has been fully used, whichever
18occurs first; provided that no credit earned in a tax year
19ending prior to December 31, 2003 may be carried forward to any
20year ending on or after December 31, 2003.
21    If an unused credit is carried forward to a given year from
222 or more earlier years, that credit arising in the earliest
23year will be applied first against the tax liability for the
24given year. If a tax liability for the given year still
25remains, the credit from the next earliest year will then be
26applied, and so on, until all credits have been used or no tax

 

 

HB2979- 31 -LRB102 14986 HLH 20341 b

1liability for the given year remains. Any remaining unused
2credit or credits then will be carried forward to the next
3following year in which a tax liability is incurred, except
4that no credit can be carried forward to a year which is more
5than 5 years after the year in which the expense for which the
6credit is given was incurred.
7    No inference shall be drawn from Public Act 91-644 this
8amendatory Act of the 91st General Assembly in construing this
9Section for taxable years beginning before January 1, 1999.
10    It is the intent of the General Assembly that the research
11and development credit under this subsection (k) shall apply
12continuously for all tax years ending on or after December 31,
132004 and ending prior to January 1, 2027, including, but not
14limited to, the period beginning on January 1, 2016 and ending
15on July 6, 2017 (the effective date of Public Act 100-22) this
16amendatory Act of the 100th General Assembly. All actions
17taken in reliance on the continuation of the credit under this
18subsection (k) by any taxpayer are hereby validated.
19    (l) Environmental Remediation Tax Credit.
20        (i) For tax years ending after December 31, 1997 and
21    on or before December 31, 2001, a taxpayer shall be
22    allowed a credit against the tax imposed by subsections
23    (a) and (b) of this Section for certain amounts paid for
24    unreimbursed eligible remediation costs, as specified in
25    this subsection. For purposes of this Section,
26    "unreimbursed eligible remediation costs" means costs

 

 

HB2979- 32 -LRB102 14986 HLH 20341 b

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

 

 

HB2979- 33 -LRB102 14986 HLH 20341 b

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

 

 

HB2979- 34 -LRB102 14986 HLH 20341 b

1    credit allowed under this subsection may be sold to a
2    buyer as part of a sale of all or part of the remediation
3    site for which the credit was granted. The purchaser of a
4    remediation site and the tax credit shall succeed to the
5    unused credit and remaining carry-forward period of the
6    seller. To perfect the transfer, the assignor shall record
7    the transfer in the chain of title for the site and provide
8    written notice to the Director of the Illinois Department
9    of Revenue of the assignor's intent to sell the
10    remediation site and the amount of the tax credit to be
11    transferred as a portion of the sale. In no event may a
12    credit be transferred to any taxpayer if the taxpayer or a
13    related party would not be eligible under the provisions
14    of subsection (i).
15        (iii) For purposes of this Section, the term "site"
16    shall have the same meaning as under Section 58.2 of the
17    Environmental Protection Act.
18    (m) Education expense credit. Beginning with tax years
19ending after December 31, 1999, a taxpayer who is the
20custodian of one or more qualifying pupils shall be allowed a
21credit against the tax imposed by subsections (a) and (b) of
22this Section for qualified education expenses incurred on
23behalf of the qualifying pupils. The credit shall be equal to
2425% of qualified education expenses, but in no event may the
25total credit under this subsection claimed by a family that is
26the custodian of qualifying pupils exceed (i) $500 for tax

 

 

HB2979- 35 -LRB102 14986 HLH 20341 b

1years ending prior to December 31, 2017, and (ii) $750 for tax
2years ending on or after December 31, 2017 and prior to
3December 31, 2021, and (iii) $1,500 for tax years ending on or
4after December 31, 2021. In no event shall a credit under this
5subsection reduce the taxpayer's liability under this Act to
6less than zero. Notwithstanding any other provision of law,
7for taxable years beginning on or after January 1, 2017, no
8taxpayer may claim a credit under this subsection (m) if the
9taxpayer's adjusted gross income for the taxable year exceeds
10(i) $500,000, in the case of spouses filing a joint federal tax
11return or (ii) $250,000, in the case of all other taxpayers.
12This subsection is exempt from the provisions of Section 250
13of this Act.
14    For purposes of this subsection:
15    "Qualifying pupils" means individuals who (i) are
16residents of the State of Illinois, (ii) are under the age of
1721 at the close of the school year for which a credit is
18sought, and (iii) during the school year for which a credit is
19sought were full-time pupils enrolled in a kindergarten
20through twelfth grade education program at any school, as
21defined in this subsection.
22    "Qualified education expense" means the amount incurred on
23behalf of a qualifying pupil in excess of $250 for tuition,
24book fees, athletic fees, driver's education fees, and lab
25fees at the school in which the pupil is enrolled during the
26regular school year. Any fee or cost associated with an

 

 

HB2979- 36 -LRB102 14986 HLH 20341 b

1out-of-school activity that increases a student's access to:
2language acquisition; music; arts; trade skills; or Science,
3Technology, Engineering, and Math (STEM) learning shall also
4be considered a qualified education expense.
5    "School" means any public or nonpublic elementary or
6secondary school in Illinois that is in compliance with Title
7VI of the Civil Rights Act of 1964 and attendance at which
8satisfies the requirements of Section 26-1 of the School Code,
9except that nothing shall be construed to require a child to
10attend any particular public or nonpublic school to qualify
11for the credit under this Section.
12    "Custodian" means, with respect to qualifying pupils, an
13Illinois resident who is a parent, the parents, a legal
14guardian, or the legal guardians of the qualifying pupils.
15    (n) River Edge Redevelopment Zone site remediation tax
16credit.
17        (i) For tax years ending on or after December 31,
18    2006, a taxpayer shall be allowed a credit against the tax
19    imposed by subsections (a) and (b) of this Section for
20    certain amounts paid for unreimbursed eligible remediation
21    costs, as specified in this subsection. For purposes of
22    this Section, "unreimbursed eligible remediation costs"
23    means costs approved by the Illinois Environmental
24    Protection Agency ("Agency") under Section 58.14a of the
25    Environmental Protection Act that were paid in performing
26    environmental remediation at a site within a River Edge

 

 

HB2979- 37 -LRB102 14986 HLH 20341 b

1    Redevelopment Zone for which a No Further Remediation
2    Letter was issued by the Agency and recorded under Section
3    58.10 of the Environmental Protection Act. The credit must
4    be claimed for the taxable year in which Agency approval
5    of the eligible remediation costs is granted. The credit
6    is not available to any taxpayer if the taxpayer or any
7    related party caused or contributed to, in any material
8    respect, a release of regulated substances on, in, or
9    under the site that was identified and addressed by the
10    remedial action pursuant to the Site Remediation Program
11    of the Environmental Protection Act. Determinations as to
12    credit availability for purposes of this Section shall be
13    made consistent with rules adopted by the Pollution
14    Control Board pursuant to the Illinois Administrative
15    Procedure Act for the administration and enforcement of
16    Section 58.9 of the Environmental Protection Act. For
17    purposes of this Section, "taxpayer" includes a person
18    whose tax attributes the taxpayer has succeeded to under
19    Section 381 of the Internal Revenue Code and "related
20    party" includes the persons disallowed a deduction for
21    losses by paragraphs (b), (c), and (f)(1) of Section 267
22    of the Internal Revenue Code by virtue of being a related
23    taxpayer, as well as any of its partners. The credit
24    allowed against the tax imposed by subsections (a) and (b)
25    shall be equal to 25% of the unreimbursed eligible
26    remediation costs in excess of $100,000 per site.

 

 

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

 

 

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

 

 

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1        a registrant;
2            (E) the acquisition of a controlling interest in
3        the stock or substantially all of the assets of a
4        publicly traded company;
5            (F) a transfer by a parent company to a wholly
6        owned subsidiary; or
7            (G) the transfer or sale to or by one person to
8        another person where both persons were initial owners
9        of the registration when the registration was issued;
10        or
11        (2) the cannabis cultivation center registration,
12    medical cannabis dispensary registration, or the
13    controlling interest in a registrant's property is
14    transferred in a transaction to lineal descendants in
15    which no gain or loss is recognized or as a result of a
16    transaction in accordance with Section 351 of the Internal
17    Revenue Code in which no gain or loss is recognized.
18(Source: P.A. 100-22, eff. 7-6-17; 101-9, eff. 6-5-19; 101-31,
19eff. 6-28-19; 101-207, eff. 8-2-19; 101-363, eff. 8-9-19;
20revised 11-18-20.)
 
21    (Text of Section with the changes made by P.A. 101-8,
22which did not take effect (see Section 99 of P.A. 101-8))
23    Sec. 201. Tax imposed.
24    (a) In general. A tax measured by net income is hereby
25imposed on every individual, corporation, trust and estate for

 

 

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1each taxable year ending after July 31, 1969 on the privilege
2of earning or receiving income in or as a resident of this
3State. Such tax shall be in addition to all other occupation or
4privilege taxes imposed by this State or by any municipal
5corporation or political subdivision thereof.
6    (b) Rates. The tax imposed by subsection (a) of this
7Section shall be determined as follows, except as adjusted by
8subsection (d-1):
9        (1) In the case of an individual, trust or estate, for
10    taxable years ending prior to July 1, 1989, an amount
11    equal to 2 1/2% of the taxpayer's net income for the
12    taxable year.
13        (2) In the case of an individual, trust or estate, for
14    taxable years beginning prior to July 1, 1989 and ending
15    after June 30, 1989, an amount equal to the sum of (i) 2
16    1/2% of the taxpayer's net income for the period prior to
17    July 1, 1989, as calculated under Section 202.3, and (ii)
18    3% of the taxpayer's net income for the period after June
19    30, 1989, as calculated under Section 202.3.
20        (3) In the case of an individual, trust or estate, for
21    taxable years beginning after June 30, 1989, and ending
22    prior to January 1, 2011, an amount equal to 3% of the
23    taxpayer's net income for the taxable year.
24        (4) In the case of an individual, trust, or estate,
25    for taxable years beginning prior to January 1, 2011, and
26    ending after December 31, 2010, an amount equal to the sum

 

 

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1    of (i) 3% of the taxpayer's net income for the period prior
2    to January 1, 2011, as calculated under Section 202.5, and
3    (ii) 5% of the taxpayer's net income for the period after
4    December 31, 2010, as calculated under Section 202.5.
5        (5) In the case of an individual, trust, or estate,
6    for taxable years beginning on or after January 1, 2011,
7    and ending prior to January 1, 2015, an amount equal to 5%
8    of the taxpayer's net income for the taxable year.
9        (5.1) In the case of an individual, trust, or estate,
10    for taxable years beginning prior to January 1, 2015, and
11    ending after December 31, 2014, an amount equal to the sum
12    of (i) 5% of the taxpayer's net income for the period prior
13    to January 1, 2015, as calculated under Section 202.5, and
14    (ii) 3.75% of the taxpayer's net income for the period
15    after December 31, 2014, as calculated under Section
16    202.5.
17        (5.2) In the case of an individual, trust, or estate,
18    for taxable years beginning on or after January 1, 2015,
19    and ending prior to July 1, 2017, an amount equal to 3.75%
20    of the taxpayer's net income for the taxable year.
21        (5.3) In the case of an individual, trust, or estate,
22    for taxable years beginning prior to July 1, 2017, and
23    ending after June 30, 2017, an amount equal to the sum of
24    (i) 3.75% of the taxpayer's net income for the period
25    prior to July 1, 2017, as calculated under Section 202.5,
26    and (ii) 4.95% of the taxpayer's net income for the period

 

 

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1    after June 30, 2017, as calculated under Section 202.5.
2        (5.4) In the case of an individual, trust, or estate,
3    for taxable years beginning on or after July 1, 2017 and
4    beginning prior to January 1, 2021, an amount equal to
5    4.95% of the taxpayer's net income for the taxable year.
6        (5.5) In the case of an individual, trust, or estate,
7    for taxable years beginning on or after January 1, 2021,
8    an amount calculated under the rate structure set forth in
9    Section 201.1.
10        (6) In the case of a corporation, for taxable years
11    ending prior to July 1, 1989, an amount equal to 4% of the
12    taxpayer's net income for the taxable year.
13        (7) In the case of a corporation, for taxable years
14    beginning prior to July 1, 1989 and ending after June 30,
15    1989, an amount equal to the sum of (i) 4% of the
16    taxpayer's net income for the period prior to July 1,
17    1989, as calculated under Section 202.3, and (ii) 4.8% of
18    the taxpayer's net income for the period after June 30,
19    1989, as calculated under Section 202.3.
20        (8) In the case of a corporation, for taxable years
21    beginning after June 30, 1989, and ending prior to January
22    1, 2011, an amount equal to 4.8% of the taxpayer's net
23    income for the taxable year.
24        (9) In the case of a corporation, for taxable years
25    beginning prior to January 1, 2011, and ending after
26    December 31, 2010, an amount equal to the sum of (i) 4.8%

 

 

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1    of the taxpayer's net income for the period prior to
2    January 1, 2011, as calculated under Section 202.5, and
3    (ii) 7% of the taxpayer's net income for the period after
4    December 31, 2010, as calculated under Section 202.5.
5        (10) In the case of a corporation, for taxable years
6    beginning on or after January 1, 2011, and ending prior to
7    January 1, 2015, an amount equal to 7% of the taxpayer's
8    net income for the taxable year.
9        (11) In the case of a corporation, for taxable years
10    beginning prior to January 1, 2015, and ending after
11    December 31, 2014, an amount equal to the sum of (i) 7% of
12    the taxpayer's net income for the period prior to January
13    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
14    of the taxpayer's net income for the period after December
15    31, 2014, as calculated under Section 202.5.
16        (12) In the case of a corporation, for taxable years
17    beginning on or after January 1, 2015, and ending prior to
18    July 1, 2017, an amount equal to 5.25% of the taxpayer's
19    net income for the taxable year.
20        (13) In the case of a corporation, for taxable years
21    beginning prior to July 1, 2017, and ending after June 30,
22    2017, an amount equal to the sum of (i) 5.25% of the
23    taxpayer's net income for the period prior to July 1,
24    2017, as calculated under Section 202.5, and (ii) 7% of
25    the taxpayer's net income for the period after June 30,
26    2017, as calculated under Section 202.5.

 

 

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1        (14) In the case of a corporation, for taxable years
2    beginning on or after July 1, 2017 and beginning prior to
3    January 1, 2021, an amount equal to 7% of the taxpayer's
4    net income for the taxable year.
5        (15) In the case of a corporation, for taxable years
6    beginning on or after January 1, 2021, an amount equal to
7    7.99% of the taxpayer's net income for the taxable year.
8    The rates under this subsection (b) are subject to the
9provisions of Section 201.5.
10    (b-5) Surcharge; sale or exchange of assets, properties,
11and intangibles of organization gaming licensees. For each of
12taxable years 2019 through 2027, a surcharge is imposed on all
13taxpayers on income arising from the sale or exchange of
14capital assets, depreciable business property, real property
15used in the trade or business, and Section 197 intangibles (i)
16of an organization licensee under the Illinois Horse Racing
17Act of 1975 and (ii) of an organization gaming licensee under
18the Illinois Gambling Act. The amount of the surcharge is
19equal to the amount of federal income tax liability for the
20taxable year attributable to those sales and exchanges. The
21surcharge imposed shall not apply if:
22        (1) the organization gaming license, organization
23    license, or racetrack property is transferred as a result
24    of any of the following:
25            (A) bankruptcy, a receivership, or a debt
26        adjustment initiated by or against the initial

 

 

HB2979- 46 -LRB102 14986 HLH 20341 b

1        licensee or the substantial owners of the initial
2        licensee;
3            (B) cancellation, revocation, or termination of
4        any such license by the Illinois Gaming Board or the
5        Illinois Racing Board;
6            (C) a determination by the Illinois Gaming Board
7        that transfer of the license is in the best interests
8        of Illinois gaming;
9            (D) the death of an owner of the equity interest in
10        a licensee;
11            (E) the acquisition of a controlling interest in
12        the stock or substantially all of the assets of a
13        publicly traded company;
14            (F) a transfer by a parent company to a wholly
15        owned subsidiary; or
16            (G) the transfer or sale to or by one person to
17        another person where both persons were initial owners
18        of the license when the license was issued; or
19        (2) the controlling interest in the organization
20    gaming license, organization license, or racetrack
21    property is transferred in a transaction to lineal
22    descendants in which no gain or loss is recognized or as a
23    result of a transaction in accordance with Section 351 of
24    the Internal Revenue Code in which no gain or loss is
25    recognized; or
26        (3) live horse racing was not conducted in 2010 at a

 

 

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1    racetrack located within 3 miles of the Mississippi River
2    under a license issued pursuant to the Illinois Horse
3    Racing Act of 1975.
4    The transfer of an organization gaming license,
5organization license, or racetrack property by a person other
6than the initial licensee to receive the organization gaming
7license is not subject to a surcharge. The Department shall
8adopt rules necessary to implement and administer this
9subsection.
10    (c) Personal Property Tax Replacement Income Tax.
11Beginning on July 1, 1979 and thereafter, in addition to such
12income tax, there is also hereby imposed the Personal Property
13Tax Replacement Income Tax measured by net income on every
14corporation (including Subchapter S corporations), partnership
15and trust, for each taxable year ending after June 30, 1979.
16Such taxes are imposed on the privilege of earning or
17receiving income in or as a resident of this State. The
18Personal Property Tax Replacement Income Tax shall be in
19addition to the income tax imposed by subsections (a) and (b)
20of this Section and in addition to all other occupation or
21privilege taxes imposed by this State or by any municipal
22corporation or political subdivision thereof.
23    (d) Additional Personal Property Tax Replacement Income
24Tax Rates. The personal property tax replacement income tax
25imposed by this subsection and subsection (c) of this Section
26in the case of a corporation, other than a Subchapter S

 

 

HB2979- 48 -LRB102 14986 HLH 20341 b

1corporation and except as adjusted by subsection (d-1), shall
2be an additional amount equal to 2.85% of such taxpayer's net
3income for the taxable year, except that beginning on January
41, 1981, and thereafter, the rate of 2.85% specified in this
5subsection shall be reduced to 2.5%, and in the case of a
6partnership, trust or a Subchapter S corporation shall be an
7additional amount equal to 1.5% of such taxpayer's net income
8for the taxable year.
9    (d-1) Rate reduction for certain foreign insurers. In the
10case of a foreign insurer, as defined by Section 35A-5 of the
11Illinois Insurance Code, whose state or country of domicile
12imposes on insurers domiciled in Illinois a retaliatory tax
13(excluding any insurer whose premiums from reinsurance assumed
14are 50% or more of its total insurance premiums as determined
15under paragraph (2) of subsection (b) of Section 304, except
16that for purposes of this determination premiums from
17reinsurance do not include premiums from inter-affiliate
18reinsurance arrangements), beginning with taxable years ending
19on or after December 31, 1999, the sum of the rates of tax
20imposed by subsections (b) and (d) shall be reduced (but not
21increased) to the rate at which the total amount of tax imposed
22under this Act, net of all credits allowed under this Act,
23shall equal (i) the total amount of tax that would be imposed
24on the foreign insurer's net income allocable to Illinois for
25the taxable year by such foreign insurer's state or country of
26domicile if that net income were subject to all income taxes

 

 

HB2979- 49 -LRB102 14986 HLH 20341 b

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

 

 

HB2979- 50 -LRB102 14986 HLH 20341 b

1    subsection shall be applied first against the rates
2    imposed by subsection (b) and only after the tax imposed
3    by subsection (a) net of all credits allowed under this
4    Section other than the credit allowed under subsection (i)
5    has been reduced to zero, against the rates imposed by
6    subsection (d).
7    This subsection (d-1) is exempt from the provisions of
8Section 250.
9    (e) Investment credit. A taxpayer shall be allowed a
10credit against the Personal Property Tax Replacement Income
11Tax for investment in qualified property.
12        (1) A taxpayer shall be allowed a credit equal to .5%
13    of the basis of qualified property placed in service
14    during the taxable year, provided such property is placed
15    in service on or after July 1, 1984. There shall be allowed
16    an additional credit equal to .5% of the basis of
17    qualified property placed in service during the taxable
18    year, provided such property is placed in service on or
19    after July 1, 1986, and the taxpayer's base employment
20    within Illinois has increased by 1% or more over the
21    preceding year as determined by the taxpayer's employment
22    records filed with the Illinois Department of Employment
23    Security. Taxpayers who are new to Illinois shall be
24    deemed to have met the 1% growth in base employment for the
25    first year in which they file employment records with the
26    Illinois Department of Employment Security. The provisions

 

 

HB2979- 51 -LRB102 14986 HLH 20341 b

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

 

 

HB2979- 52 -LRB102 14986 HLH 20341 b

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

 

 

HB2979- 53 -LRB102 14986 HLH 20341 b

1            (B) is depreciable pursuant to Section 167 of the
2        Internal Revenue Code, except that "3-year property"
3        as defined in Section 168(c)(2)(A) of that Code is not
4        eligible for the credit provided by this subsection
5        (e);
6            (C) is acquired by purchase as defined in Section
7        179(d) of the Internal Revenue Code;
8            (D) is used in Illinois by a taxpayer who is
9        primarily engaged in manufacturing, or in mining coal
10        or fluorite, or in retailing, or was placed in service
11        on or after July 1, 2006 in a River Edge Redevelopment
12        Zone established pursuant to the River Edge
13        Redevelopment Zone Act; and
14            (E) has not previously been used in Illinois in
15        such a manner and by such a person as would qualify for
16        the credit provided by this subsection (e) or
17        subsection (f).
18        (3) For purposes of this subsection (e),
19    "manufacturing" means the material staging and production
20    of tangible personal property by procedures commonly
21    regarded as manufacturing, processing, fabrication, or
22    assembling which changes some existing material into new
23    shapes, new qualities, or new combinations. For purposes
24    of this subsection (e) the term "mining" shall have the
25    same meaning as the term "mining" in Section 613(c) of the
26    Internal Revenue Code. For purposes of this subsection

 

 

HB2979- 54 -LRB102 14986 HLH 20341 b

1    (e), the term "retailing" means the sale of tangible
2    personal property for use or consumption and not for
3    resale, or services rendered in conjunction with the sale
4    of tangible personal property for use or consumption and
5    not for resale. For purposes of this subsection (e),
6    "tangible personal property" has the same meaning as when
7    that term is used in the Retailers' Occupation Tax Act,
8    and, for taxable years ending after December 31, 2008,
9    does not include the generation, transmission, or
10    distribution of electricity.
11        (4) The basis of qualified property shall be the basis
12    used to compute the depreciation deduction for federal
13    income tax purposes.
14        (5) If the basis of the property for federal income
15    tax depreciation purposes is increased after it has been
16    placed in service in Illinois by the taxpayer, the amount
17    of such increase shall be deemed property placed in
18    service on the date of such increase in basis.
19        (6) The term "placed in service" shall have the same
20    meaning as under Section 46 of the Internal Revenue Code.
21        (7) If during any taxable year, any property ceases to
22    be qualified property in the hands of the taxpayer within
23    48 months after being placed in service, or the situs of
24    any qualified property is moved outside Illinois within 48
25    months after being placed in service, the Personal
26    Property Tax Replacement Income Tax for such taxable year

 

 

HB2979- 55 -LRB102 14986 HLH 20341 b

1    shall be increased. Such increase shall be determined by
2    (i) recomputing the investment credit which would have
3    been allowed for the year in which credit for such
4    property was originally allowed by eliminating such
5    property from such computation and, (ii) subtracting such
6    recomputed credit from the amount of credit previously
7    allowed. For the purposes of this paragraph (7), a
8    reduction of the basis of qualified property resulting
9    from a redetermination of the purchase price shall be
10    deemed a disposition of qualified property to the extent
11    of such reduction.
12        (8) Unless the investment credit is extended by law,
13    the basis of qualified property shall not include costs
14    incurred after December 31, 2018, except for costs
15    incurred pursuant to a binding contract entered into on or
16    before December 31, 2018.
17        (9) Each taxable year ending before December 31, 2000,
18    a partnership may elect to pass through to its partners
19    the credits to which the partnership is entitled under
20    this subsection (e) for the taxable year. A partner may
21    use the credit allocated to him or her under this
22    paragraph only against the tax imposed in subsections (c)
23    and (d) of this Section. If the partnership makes that
24    election, those credits shall be allocated among the
25    partners in the partnership in accordance with the rules
26    set forth in Section 704(b) of the Internal Revenue Code,

 

 

HB2979- 56 -LRB102 14986 HLH 20341 b

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

 

 

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

 

 

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

 

 

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1    Redevelopment Zone by the taxpayer, the amount of such
2    increase shall be deemed property placed in service on the
3    date of such increase in basis.
4        (5) The term "placed in service" shall have the same
5    meaning as under Section 46 of the Internal Revenue Code.
6        (6) If during any taxable year, any property ceases to
7    be qualified property in the hands of the taxpayer within
8    48 months after being placed in service, or the situs of
9    any qualified property is moved outside the Enterprise
10    Zone or River Edge Redevelopment Zone within 48 months
11    after being placed in service, the tax imposed under
12    subsections (a) and (b) of this Section for such taxable
13    year shall be increased. Such increase shall be determined
14    by (i) recomputing the investment credit which would have
15    been allowed for the year in which credit for such
16    property was originally allowed by eliminating such
17    property from such computation, and (ii) subtracting such
18    recomputed credit from the amount of credit previously
19    allowed. For the purposes of this paragraph (6), a
20    reduction of the basis of qualified property resulting
21    from a redetermination of the purchase price shall be
22    deemed a disposition of qualified property to the extent
23    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
4    over 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
9    employment records with the Illinois Department of
10    Employment Security. If, in any year, the increase in base
11    employment within Illinois over the preceding year is less
12    than 1%, the additional credit shall be limited to that
13    percentage times a fraction, the numerator of which is
14    0.5% and the denominator of which is 1%, but shall not
15    exceed 0.5%.
16        (8) For taxable years beginning on or after January 1,
17    2021, there shall be allowed an Enterprise Zone
18    construction jobs credit against the taxes imposed under
19    subsections (a) and (b) of this Section as provided in
20    Section 13 of the Illinois Enterprise Zone Act.
21        The credit or credits may not reduce the taxpayer's
22    liability to less than zero. If the amount of the credit or
23    credits exceeds the taxpayer's liability, the excess may
24    be carried forward and applied against the taxpayer's
25    liability in succeeding calendar years in the same manner
26    provided under paragraph (4) of Section 211 of this Act.

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    deemed a disposition of qualified property to the extent
2    of such reduction.
3        (7) Beginning with tax years ending after December 31,
4    1996, if a taxpayer qualifies for the credit under this
5    subsection (h) and thereby is granted a tax abatement and
6    the taxpayer relocates its entire facility in violation of
7    the explicit terms and length of the contract under
8    Section 18-183 of the Property Tax Code, the tax imposed
9    under subsections (a) and (b) of this Section shall be
10    increased for the taxable year in which the taxpayer
11    relocated its facility by an amount equal to the amount of
12    credit received by the taxpayer under this subsection (h).
13    (h-5) High Impact Business construction constructions jobs
14credit. For taxable years beginning on or after January 1,
152021, there shall also be allowed a High Impact Business
16construction jobs credit against the tax imposed under
17subsections (a) and (b) of this Section as provided in
18subsections (i) and (j) of Section 5.5 of the Illinois
19Enterprise Zone Act.
20    The credit or credits may not reduce the taxpayer's
21liability to less than zero. If the amount of the credit or
22credits exceeds the taxpayer's liability, the excess may be
23carried forward and applied against the taxpayer's liability
24in succeeding calendar years in the manner provided under
25paragraph (4) of Section 211 of this Act. The credit or credits
26shall be applied to the earliest year for which there is a tax

 

 

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

 

 

HB2979- 67 -LRB102 14986 HLH 20341 b

1rate imposed by subsections (a) and (b) of this Section.
2    Any credit earned on or after December 31, 1986 under this
3subsection which is unused in the year the credit is computed
4because it exceeds the tax liability imposed by subsections
5(a) and (b) for that year (whether it exceeds the original
6liability or the liability as later amended) may be carried
7forward and applied to the tax liability imposed by
8subsections (a) and (b) of the 5 taxable years following the
9excess credit year, provided that no credit may be carried
10forward to any year ending on or after December 31, 2003. This
11credit shall be applied first to the earliest year for which
12there is a liability. If there is a credit under this
13subsection from more than one tax year that is available to
14offset a liability the earliest credit arising under this
15subsection shall be applied first.
16    If, during any taxable year ending on or after December
1731, 1986, the tax imposed by subsections (c) and (d) of this
18Section for which a taxpayer has claimed a credit under this
19subsection (i) is reduced, the amount of credit for such tax
20shall also be reduced. Such reduction shall be determined by
21recomputing the credit to take into account the reduced tax
22imposed by subsections (c) and (d). If any portion of the
23reduced amount of credit has been carried to a different
24taxable year, an amended return shall be filed for such
25taxable year to reduce the amount of credit claimed.
26    (j) Training expense credit. Beginning with tax years

 

 

HB2979- 68 -LRB102 14986 HLH 20341 b

1ending on or after December 31, 1986 and prior to December 31,
22003, a taxpayer shall be allowed a credit against the tax
3imposed by subsections (a) and (b) under this Section for all
4amounts paid or accrued, on behalf of all persons employed by
5the taxpayer in Illinois or Illinois residents employed
6outside of Illinois by a taxpayer, for educational or
7vocational training in semi-technical or technical fields or
8semi-skilled or skilled fields, which were deducted from gross
9income in the computation of taxable income. The credit
10against the tax imposed by subsections (a) and (b) shall be
111.6% of such training expenses. For partners, shareholders of
12subchapter S corporations, and owners of limited liability
13companies, if the liability company is treated as a
14partnership for purposes of federal and State income taxation,
15there shall be allowed a credit under this subsection (j) to be
16determined in accordance with the determination of income and
17distributive share of income under Sections 702 and 704 and
18subchapter S of the Internal Revenue Code.
19    Any credit allowed under this subsection which is unused
20in the year the credit is earned may be carried forward to each
21of the 5 taxable years following the year for which the credit
22is first computed until it is used. This credit shall be
23applied first to the earliest year for which there is a
24liability. If there is a credit under this subsection from
25more than one tax year that is available to offset a liability,
26the earliest credit arising under this subsection shall be

 

 

HB2979- 69 -LRB102 14986 HLH 20341 b

1applied first. No carryforward credit may be claimed in any
2tax year ending on or after December 31, 2003.
3    (k) Research and development credit. For tax years ending
4after July 1, 1990 and prior to December 31, 2003, and
5beginning again for tax years ending on or after December 31,
62004, and ending prior to January 1, 2027, a taxpayer shall be
7allowed a credit against the tax imposed by subsections (a)
8and (b) of this Section for increasing research activities in
9this State. The credit allowed against the tax imposed by
10subsections (a) and (b) shall be equal to 6 1/2% of the
11qualifying expenditures for increasing research activities in
12this State. For partners, shareholders of subchapter S
13corporations, and owners of limited liability companies, if
14the liability company is treated as a partnership for purposes
15of federal and State income taxation, there shall be allowed a
16credit under this subsection to be determined in accordance
17with the determination of income and distributive share of
18income under Sections 702 and 704 and subchapter S of the
19Internal Revenue Code.
20    For purposes of this subsection, "qualifying expenditures"
21means the qualifying expenditures as defined for the federal
22credit for increasing research activities which would be
23allowable under Section 41 of the Internal Revenue Code and
24which are conducted in this State, "qualifying expenditures
25for increasing research activities in this State" means the
26excess of qualifying expenditures for the taxable year in

 

 

HB2979- 70 -LRB102 14986 HLH 20341 b

1which incurred over qualifying expenditures for the base
2period, "qualifying expenditures for the base period" means
3the average of the qualifying expenditures for each year in
4the base period, and "base period" means the 3 taxable years
5immediately preceding the taxable year for which the
6determination is being made.
7    Any credit in excess of the tax liability for the taxable
8year may be carried forward. A taxpayer may elect to have the
9unused credit shown on its final completed return carried over
10as a credit against the tax liability for the following 5
11taxable years or until it has been fully used, whichever
12occurs first; provided that no credit earned in a tax year
13ending prior to December 31, 2003 may be carried forward to any
14year ending on or after December 31, 2003.
15    If an unused credit is carried forward to a given year from
162 or more earlier years, that credit arising in the earliest
17year will be applied first against the tax liability for the
18given year. If a tax liability for the given year still
19remains, the credit from the next earliest year will then be
20applied, and so on, until all credits have been used or no tax
21liability for the given year remains. Any remaining unused
22credit or credits then will be carried forward to the next
23following year in which a tax liability is incurred, except
24that no credit can be carried forward to a year which is more
25than 5 years after the year in which the expense for which the
26credit is given was incurred.

 

 

HB2979- 71 -LRB102 14986 HLH 20341 b

1    No inference shall be drawn from Public Act 91-644 this
2amendatory Act of the 91st General Assembly in construing this
3Section for taxable years beginning before January 1, 1999.
4    It is the intent of the General Assembly that the research
5and development credit under this subsection (k) shall apply
6continuously for all tax years ending on or after December 31,
72004 and ending prior to January 1, 2027, including, but not
8limited to, the period beginning on January 1, 2016 and ending
9on July 6, 2017 (the effective date of Public Act 100-22) this
10amendatory Act of the 100th General Assembly. All actions
11taken in reliance on the continuation of the credit under this
12subsection (k) by any taxpayer are hereby validated.
13    (l) Environmental Remediation Tax Credit.
14        (i) For tax years ending after December 31, 1997 and
15    on or before December 31, 2001, a taxpayer shall be
16    allowed a credit against the tax imposed by subsections
17    (a) and (b) of this Section for certain amounts paid for
18    unreimbursed eligible remediation costs, as specified in
19    this subsection. For purposes of this Section,
20    "unreimbursed eligible remediation costs" means costs
21    approved by the Illinois Environmental Protection Agency
22    ("Agency") under Section 58.14 of the Environmental
23    Protection Act that were paid in performing environmental
24    remediation at a site 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

 

 

HB2979- 72 -LRB102 14986 HLH 20341 b

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

 

 

HB2979- 73 -LRB102 14986 HLH 20341 b

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

 

 

HB2979- 74 -LRB102 14986 HLH 20341 b

1    the transfer in the chain of title for the site and provide
2    written notice to the Director of the Illinois Department
3    of Revenue of the assignor's intent to sell the
4    remediation site and the amount of the tax credit to be
5    transferred as a portion of the sale. In no event may a
6    credit be transferred to any taxpayer if the taxpayer or a
7    related party would not be eligible under the provisions
8    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
14custodian of one or more qualifying pupils shall be allowed a
15credit against the tax imposed by subsections (a) and (b) of
16this Section for qualified education expenses incurred on
17behalf of the qualifying pupils. The credit shall be equal to
1825% of qualified education expenses, but in no event may the
19total credit under this subsection claimed by a family that is
20the custodian of qualifying pupils exceed (i) $500 for tax
21years ending prior to December 31, 2017, and (ii) $750 for tax
22years ending on or after December 31, 2017 and prior to
23December 31, 2021, and (iii) $1,500 for tax years ending on or
24after December 31, 2021. In no event shall a credit under this
25subsection reduce the taxpayer's liability under this Act to
26less than zero. Notwithstanding any other provision of law,

 

 

HB2979- 75 -LRB102 14986 HLH 20341 b

1for taxable years beginning on or after January 1, 2017, no
2taxpayer may claim a credit under this subsection (m) if the
3taxpayer's adjusted gross income for the taxable year exceeds
4(i) $500,000, in the case of spouses filing a joint federal tax
5return or (ii) $250,000, in the case of all other taxpayers.
6This subsection is exempt from the provisions of Section 250
7of this Act.
8    For purposes of this subsection:
9    "Qualifying pupils" means individuals who (i) are
10residents of the State of Illinois, (ii) are under the age of
1121 at the close of the school year for which a credit is
12sought, and (iii) during the school year for which a credit is
13sought were full-time pupils enrolled in a kindergarten
14through twelfth grade education program at any school, as
15defined in this subsection.
16    "Qualified education expense" means the amount incurred on
17behalf of a qualifying pupil in excess of $250 for tuition,
18book fees, athletic fees, driver's education fees, and lab
19fees at the school in which the pupil is enrolled during the
20regular school year. Any fee or cost associated with an
21out-of-school activity that increases a student's access to:
22language acquisition; music; arts; trade skills; or Science,
23Technology, Engineering, and Math (STEM) learning shall also
24be considered a qualified education expense.
25    "School" means any public or nonpublic elementary or
26secondary school in Illinois that is in compliance with Title

 

 

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

 

 

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

 

 

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1    subsection from more than one tax year that is available
2    to offset a liability, the earliest credit arising under
3    this subsection shall be applied first. A credit allowed
4    under this subsection may be sold to a buyer as part of a
5    sale of all or part of the remediation site for which the
6    credit was granted. The purchaser of a remediation site
7    and the tax credit shall succeed to the unused credit and
8    remaining carry-forward period of the seller. To perfect
9    the transfer, the assignor shall record the transfer in
10    the chain of title for the site and provide written notice
11    to the Director of the Illinois Department of Revenue of
12    the assignor's intent to sell the remediation site and the
13    amount of the tax credit to be transferred as a portion of
14    the sale. In no event may a credit be transferred to any
15    taxpayer if the taxpayer or a related party would not be
16    eligible under the provisions of subsection (i).
17        (iii) For purposes of this Section, the term "site"
18    shall have the same meaning as under Section 58.2 of the
19    Environmental Protection Act.
20    (o) For each of taxable years during the Compassionate Use
21of Medical Cannabis Program, a surcharge is imposed on all
22taxpayers on income arising from the sale or exchange of
23capital assets, depreciable business property, real property
24used in the trade or business, and Section 197 intangibles of
25an organization registrant under the Compassionate Use of
26Medical Cannabis Program Act. The amount of the surcharge is

 

 

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

 

 

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1            (G) the transfer or sale to or by one person to
2        another person where both persons were initial owners
3        of the registration when the registration was issued;
4        or
5        (2) the cannabis cultivation center registration,
6    medical cannabis dispensary registration, or the
7    controlling interest in a registrant's property is
8    transferred in a transaction to lineal descendants in
9    which no gain or loss is recognized or as a result of a
10    transaction in accordance with Section 351 of the Internal
11    Revenue Code in which no gain or loss is recognized.
12(Source: P.A. 100-22, eff. 7-6-17; 101-8, see Section 99 for
13effective date; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
14101-207, eff. 8-2-19; 101-363, eff. 8-9-19; revised 11-18-20.)
 
15    Section 99. Effective date. This Act takes effect upon
16becoming law.