Illinois General Assembly - Full Text of SB2293
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Full Text of SB2293  102nd General Assembly

SB2293 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB2293

 

Introduced 2/26/2021, by Sen. Scott M. Bennett

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/201

    Amends the Illinois Income Tax Act. Creates a credit for financial institutions with less than $50,000,000,000 in assets in an amount equal to the aggregate amount of all fees, penalties, and any other income derived during the taxable year from each commercial loan transaction that is (i) less than $5,000,000, (ii) originated by the financial institution, (iii) made to a person residing or located in this State, and (iv) made primarily for a business or agricultural project in this State. Effective immediately.


LRB102 11738 HLH 17072 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB2293LRB102 11738 HLH 17072 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

 

 

SB2293- 8 -LRB102 11738 HLH 17072 b

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

 

 

SB2293- 9 -LRB102 11738 HLH 17072 b

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

 

 

SB2293- 10 -LRB102 11738 HLH 17072 b

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

 

 

SB2293- 11 -LRB102 11738 HLH 17072 b

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

 

 

SB2293- 12 -LRB102 11738 HLH 17072 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

 

 

SB2293- 14 -LRB102 11738 HLH 17072 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.

 

 

SB2293- 15 -LRB102 11738 HLH 17072 b

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

 

 

SB2293- 16 -LRB102 11738 HLH 17072 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.

 

 

SB2293- 17 -LRB102 11738 HLH 17072 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

 

 

SB2293- 18 -LRB102 11738 HLH 17072 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

 

 

SB2293- 20 -LRB102 11738 HLH 17072 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

 

 

SB2293- 26 -LRB102 11738 HLH 17072 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)

 

 

SB2293- 27 -LRB102 11738 HLH 17072 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

 

 

SB2293- 28 -LRB102 11738 HLH 17072 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

 

 

SB2293- 29 -LRB102 11738 HLH 17072 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"

 

 

SB2293- 30 -LRB102 11738 HLH 17072 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

 

 

SB2293- 31 -LRB102 11738 HLH 17072 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

 

 

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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.

 

 

SB2293- 33 -LRB102 11738 HLH 17072 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

 

 

SB2293- 34 -LRB102 11738 HLH 17072 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

 

 

SB2293- 35 -LRB102 11738 HLH 17072 b

1years ending prior to December 31, 2017, and (ii) $750 for tax
2years ending on or after December 31, 2017. In no event shall a
3credit under this subsection reduce the taxpayer's liability
4under this Act to less than zero. Notwithstanding any other
5provision of law, for taxable years beginning on or after
6January 1, 2017, no taxpayer may claim a credit under this
7subsection (m) if the taxpayer's adjusted gross income for the
8taxable year exceeds (i) $500,000, in the case of spouses
9filing a joint federal tax return or (ii) $250,000, in the case
10of all other taxpayers. This subsection is exempt from the
11provisions of Section 250 of this Act.
12    For purposes of this subsection:
13    "Qualifying pupils" means individuals who (i) are
14residents of the State of Illinois, (ii) are under the age of
1521 at the close of the school year for which a credit is
16sought, and (iii) during the school year for which a credit is
17sought were full-time pupils enrolled in a kindergarten
18through twelfth grade education program at any school, as
19defined in this subsection.
20    "Qualified education expense" means the amount incurred on
21behalf of a qualifying pupil in excess of $250 for tuition,
22book fees, and lab fees at the school in which the pupil is
23enrolled during the regular school year.
24    "School" means any public or nonpublic elementary or
25secondary school in Illinois that is in compliance with Title
26VI of the Civil Rights Act of 1964 and attendance at which

 

 

SB2293- 36 -LRB102 11738 HLH 17072 b

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

 

 

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

 

 

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

 

 

SB2293- 39 -LRB102 11738 HLH 17072 b

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

 

 

SB2293- 40 -LRB102 11738 HLH 17072 b

1        another person where both persons were initial owners
2        of the registration when the registration was issued;
3        or
4        (2) the cannabis cultivation center registration,
5    medical cannabis dispensary registration, or the
6    controlling interest in a registrant's property is
7    transferred in a transaction to lineal descendants in
8    which no gain or loss is recognized or as a result of a
9    transaction in accordance with Section 351 of the Internal
10    Revenue Code in which no gain or loss is recognized.
11    (p) For tax years ending after July 1, 2021, a financial
12institution with less than $50,000,000,000 in assets at the
13close of the preceding tax year shall be allowed a credit
14against the tax imposed by subsections (a) and (b) of this
15Section in an amount equal to the aggregate amount of all fees,
16penalties, and any other income derived during the taxable
17year from each commercial loan transaction that is (i) less
18than $5,000,000, (ii) originated by the financial institution,
19(iii) made to a person residing or located in this State, and
20(iv) made primarily for a business or agricultural project in
21this State.
22    For partners, shareholders of subchapter S corporations,
23and owners of limited liability companies, if the liability
24company is treated as a partnership for purposes of federal
25and State income taxation, there shall be allowed a credit
26under this subsection to be determined in accordance with the

 

 

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1determination of income and distributive share of income under
2Sections 702 and 704 and subchapter S of the Internal Revenue
3Code.
4    As used in this Section, "financial institution" means a
5partnership, association, limited liability company, or
6corporation doing business under and as permitted by any law
7of this State or of the United States relating to banks,
8savings and loan associations, or savings banks.
9    This Section is exempt from the provisions of Section 250.
10(Source: P.A. 100-22, eff. 7-6-17; 101-9, eff. 6-5-19; 101-31,
11eff. 6-28-19; 101-207, eff. 8-2-19; 101-363, eff. 8-9-19;
12revised 11-18-20.)
 
13    (Text of Section with the changes made by P.A. 101-8,
14which did not take effect (see Section 99 of P.A. 101-8))
15    Sec. 201. Tax imposed.
16    (a) In general. A tax measured by net income is hereby
17imposed on every individual, corporation, trust and estate for
18each taxable year ending after July 31, 1969 on the privilege
19of earning or receiving income in or as a resident of this
20State. Such tax shall be in addition to all other occupation or
21privilege taxes imposed by this State or by any municipal
22corporation or political subdivision thereof.
23    (b) Rates. The tax imposed by subsection (a) of this
24Section shall be determined as follows, except as adjusted by
25subsection (d-1):

 

 

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

 

 

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1        (5.1) In the case of an individual, trust, or estate,
2    for taxable years beginning prior to January 1, 2015, and
3    ending after December 31, 2014, an amount equal to the sum
4    of (i) 5% of the taxpayer's net income for the period prior
5    to January 1, 2015, as calculated under Section 202.5, and
6    (ii) 3.75% of the taxpayer's net income for the period
7    after December 31, 2014, as calculated under Section
8    202.5.
9        (5.2) In the case of an individual, trust, or estate,
10    for taxable years beginning on or after January 1, 2015,
11    and ending prior to July 1, 2017, an amount equal to 3.75%
12    of the taxpayer's net income for the taxable year.
13        (5.3) In the case of an individual, trust, or estate,
14    for taxable years beginning prior to July 1, 2017, and
15    ending after June 30, 2017, an amount equal to the sum of
16    (i) 3.75% of the taxpayer's net income for the period
17    prior to July 1, 2017, as calculated under Section 202.5,
18    and (ii) 4.95% of the taxpayer's net income for the period
19    after June 30, 2017, as calculated under Section 202.5.
20        (5.4) In the case of an individual, trust, or estate,
21    for taxable years beginning on or after July 1, 2017 and
22    beginning prior to January 1, 2021, an amount equal to
23    4.95% of the taxpayer's net income for the taxable year.
24        (5.5) In the case of an individual, trust, or estate,
25    for taxable years beginning on or after January 1, 2021,
26    an amount calculated under the rate structure set forth in

 

 

SB2293- 44 -LRB102 11738 HLH 17072 b

1    Section 201.1.
2        (6) In the case of a corporation, for taxable years
3    ending prior to July 1, 1989, an amount equal to 4% of the
4    taxpayer's net income for the taxable year.
5        (7) In the case of a corporation, for taxable years
6    beginning prior to July 1, 1989 and ending after June 30,
7    1989, an amount equal to the sum of (i) 4% of the
8    taxpayer's net income for the period prior to July 1,
9    1989, as calculated under Section 202.3, and (ii) 4.8% of
10    the taxpayer's net income for the period after June 30,
11    1989, as calculated under Section 202.3.
12        (8) In the case of a corporation, for taxable years
13    beginning after June 30, 1989, and ending prior to January
14    1, 2011, an amount equal to 4.8% of the taxpayer's net
15    income for the taxable year.
16        (9) In the case of a corporation, for taxable years
17    beginning prior to January 1, 2011, and ending after
18    December 31, 2010, an amount equal to the sum of (i) 4.8%
19    of the taxpayer's net income for the period prior to
20    January 1, 2011, as calculated under Section 202.5, and
21    (ii) 7% of the taxpayer's net income for the period after
22    December 31, 2010, as calculated under Section 202.5.
23        (10) In the case of a corporation, for taxable years
24    beginning on or after January 1, 2011, and ending prior to
25    January 1, 2015, an amount equal to 7% of the taxpayer's
26    net income for the taxable year.

 

 

SB2293- 45 -LRB102 11738 HLH 17072 b

1        (11) In the case of a corporation, for taxable years
2    beginning prior to January 1, 2015, and ending after
3    December 31, 2014, an amount equal to the sum of (i) 7% of
4    the taxpayer's net income for the period prior to January
5    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
6    of the taxpayer's net income for the period after December
7    31, 2014, as calculated under Section 202.5.
8        (12) In the case of a corporation, for taxable years
9    beginning on or after January 1, 2015, and ending prior to
10    July 1, 2017, an amount equal to 5.25% of the taxpayer's
11    net income for the taxable year.
12        (13) In the case of a corporation, for taxable years
13    beginning prior to July 1, 2017, and ending after June 30,
14    2017, an amount equal to the sum of (i) 5.25% of the
15    taxpayer's net income for the period prior to July 1,
16    2017, as calculated under Section 202.5, and (ii) 7% of
17    the taxpayer's net income for the period after June 30,
18    2017, as calculated under Section 202.5.
19        (14) In the case of a corporation, for taxable years
20    beginning on or after July 1, 2017 and beginning prior to
21    January 1, 2021, an amount equal to 7% of the taxpayer's
22    net income for the taxable year.
23        (15) In the case of a corporation, for taxable years
24    beginning on or after January 1, 2021, an amount equal to
25    7.99% of the taxpayer's net income for the taxable year.
26    The rates under this subsection (b) are subject to the

 

 

SB2293- 46 -LRB102 11738 HLH 17072 b

1provisions of Section 201.5.
2    (b-5) Surcharge; sale or exchange of assets, properties,
3and intangibles of organization gaming licensees. For each of
4taxable years 2019 through 2027, a surcharge is imposed on all
5taxpayers on income arising from the sale or exchange of
6capital assets, depreciable business property, real property
7used in the trade or business, and Section 197 intangibles (i)
8of an organization licensee under the Illinois Horse Racing
9Act of 1975 and (ii) of an organization gaming licensee under
10the Illinois Gambling Act. The amount of the surcharge is
11equal to the amount of federal income tax liability for the
12taxable year attributable to those sales and exchanges. The
13surcharge imposed shall not apply if:
14        (1) the organization gaming license, organization
15    license, or racetrack property is transferred as a result
16    of any of the following:
17            (A) bankruptcy, a receivership, or a debt
18        adjustment initiated by or against the initial
19        licensee or the substantial owners of the initial
20        licensee;
21            (B) cancellation, revocation, or termination of
22        any such license by the Illinois Gaming Board or the
23        Illinois Racing Board;
24            (C) a determination by the Illinois Gaming Board
25        that transfer of the license is in the best interests
26        of Illinois gaming;

 

 

SB2293- 47 -LRB102 11738 HLH 17072 b

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

 

 

SB2293- 48 -LRB102 11738 HLH 17072 b

1subsection.
2    (c) Personal Property Tax Replacement Income Tax.
3Beginning on July 1, 1979 and thereafter, in addition to such
4income tax, there is also hereby imposed the Personal Property
5Tax Replacement Income Tax measured by net income on every
6corporation (including Subchapter S corporations), partnership
7and trust, for each taxable year ending after June 30, 1979.
8Such taxes are imposed on the privilege of earning or
9receiving income in or as a resident of this State. The
10Personal Property Tax Replacement Income Tax shall be in
11addition to the income tax imposed by subsections (a) and (b)
12of this Section and in addition to all other occupation or
13privilege taxes imposed by this State or by any municipal
14corporation or political subdivision thereof.
15    (d) Additional Personal Property Tax Replacement Income
16Tax Rates. The personal property tax replacement income tax
17imposed by this subsection and subsection (c) of this Section
18in the case of a corporation, other than a Subchapter S
19corporation and except as adjusted by subsection (d-1), shall
20be an additional amount equal to 2.85% of such taxpayer's net
21income for the taxable year, except that beginning on January
221, 1981, and thereafter, the rate of 2.85% specified in this
23subsection shall be reduced to 2.5%, and in the case of a
24partnership, trust or a Subchapter S corporation shall be an
25additional amount equal to 1.5% of such taxpayer's net income
26for the taxable year.

 

 

SB2293- 49 -LRB102 11738 HLH 17072 b

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

 

 

SB2293- 50 -LRB102 11738 HLH 17072 b

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

 

 

SB2293- 51 -LRB102 11738 HLH 17072 b

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

 

 

SB2293- 52 -LRB102 11738 HLH 17072 b

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

 

 

SB2293- 53 -LRB102 11738 HLH 17072 b

1    or, if the amount of the credit exceeds the tax liability
2    for that year, whether it exceeds the original liability
3    or the liability as later amended, such excess may be
4    carried forward and applied to the tax liability of the 5
5    taxable years following the excess credit years. The
6    credit shall be applied to the earliest year for which
7    there is a liability. If there is credit from more than one
8    tax year that is available to offset a liability, earlier
9    credit shall be applied first.
10        (2) The term "qualified property" means property
11    which:
12            (A) is tangible, whether new or used, including
13        buildings and structural components of buildings and
14        signs that are real property, but not including land
15        or improvements to real property that are not a
16        structural component of a building such as
17        landscaping, sewer lines, local access roads, fencing,
18        parking lots, and other appurtenances;
19            (B) is depreciable pursuant to Section 167 of the
20        Internal Revenue Code, except that "3-year property"
21        as defined in Section 168(c)(2)(A) of that Code is not
22        eligible for the credit provided by this subsection
23        (e);
24            (C) is acquired by purchase as defined in Section
25        179(d) of the Internal Revenue Code;
26            (D) is used in Illinois by a taxpayer who is

 

 

SB2293- 54 -LRB102 11738 HLH 17072 b

1        primarily engaged in manufacturing, or in mining coal
2        or fluorite, or in retailing, or was placed in service
3        on or after July 1, 2006 in a River Edge Redevelopment
4        Zone established pursuant to the River Edge
5        Redevelopment Zone Act; and
6            (E) has not previously been used in Illinois in
7        such a manner and by such a person as would qualify for
8        the credit provided by this subsection (e) or
9        subsection (f).
10        (3) For purposes of this subsection (e),
11    "manufacturing" means the material staging and production
12    of tangible personal property by procedures commonly
13    regarded as manufacturing, processing, fabrication, or
14    assembling which changes some existing material into new
15    shapes, new qualities, or new combinations. For purposes
16    of this subsection (e) the term "mining" shall have the
17    same meaning as the term "mining" in Section 613(c) of the
18    Internal Revenue Code. For purposes of this subsection
19    (e), the term "retailing" means the sale of tangible
20    personal property for use or consumption and not for
21    resale, or services rendered in conjunction with the sale
22    of tangible personal property for use or consumption and
23    not for resale. For purposes of this subsection (e),
24    "tangible personal property" has the same meaning as when
25    that term is used in the Retailers' Occupation Tax Act,
26    and, for taxable years ending after December 31, 2008,

 

 

SB2293- 55 -LRB102 11738 HLH 17072 b

1    does not include the generation, transmission, or
2    distribution of electricity.
3        (4) The basis of qualified property shall be the basis
4    used to compute the depreciation deduction for federal
5    income tax purposes.
6        (5) If the basis of the property for federal income
7    tax depreciation purposes is increased after it has been
8    placed in service in Illinois by the taxpayer, the amount
9    of such increase shall be deemed property placed in
10    service on the date of such increase in basis.
11        (6) The term "placed in service" shall have the same
12    meaning as under Section 46 of the Internal Revenue Code.
13        (7) If during any taxable year, any property ceases to
14    be qualified property in the hands of the taxpayer within
15    48 months after being placed in service, or the situs of
16    any qualified property is moved outside Illinois within 48
17    months after being placed in service, the Personal
18    Property Tax Replacement Income Tax for such taxable year
19    shall be increased. Such increase shall be determined by
20    (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 (7), a
26    reduction of the basis of qualified property resulting

 

 

SB2293- 56 -LRB102 11738 HLH 17072 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        (8) Unless the investment credit is extended by law,
5    the basis of qualified property shall not include costs
6    incurred after December 31, 2018, except for costs
7    incurred pursuant to a binding contract entered into on or
8    before December 31, 2018.
9        (9) Each taxable year ending before December 31, 2000,
10    a partnership may elect to pass through to its partners
11    the credits to which the partnership is entitled under
12    this subsection (e) for the taxable year. A partner may
13    use the credit allocated to him or her under this
14    paragraph only against the tax imposed in subsections (c)
15    and (d) of this Section. If the partnership makes that
16    election, those credits shall be allocated among the
17    partners in the partnership in accordance with the rules
18    set forth in Section 704(b) of the Internal Revenue Code,
19    and the rules promulgated under that Section, and the
20    allocated amount of the credits shall be allowed to the
21    partners for that taxable year. The partnership shall make
22    this election on its Personal Property Tax Replacement
23    Income Tax return for that taxable year. The election to
24    pass through the credits shall be irrevocable.
25        For taxable years ending on or after December 31,
26    2000, a partner that qualifies its partnership for a

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    employment records with the Illinois Department of
2    Employment Security. If, in any year, the increase in base
3    employment within Illinois over the preceding year is less
4    than 1%, the additional credit shall be limited to that
5    percentage times a fraction, the numerator of which is
6    0.5% and the denominator of which is 1%, but shall not
7    exceed 0.5%.
8        (8) For taxable years beginning on or after January 1,
9    2021, there shall be allowed an Enterprise Zone
10    construction jobs credit against the taxes imposed under
11    subsections (a) and (b) of this Section as provided in
12    Section 13 of the Illinois Enterprise Zone Act.
13        The credit or credits may not reduce the taxpayer's
14    liability to less than zero. If the amount of the credit or
15    credits exceeds the taxpayer's liability, the excess may
16    be carried forward and applied against the taxpayer's
17    liability in succeeding calendar years in the same manner
18    provided under paragraph (4) of Section 211 of this Act.
19    The credit or credits shall be applied to the earliest
20    year for which there is a tax liability. If there are
21    credits from more than one taxable year that are available
22    to offset a liability, the earlier credit shall be applied
23    first.
24        For partners, shareholders of Subchapter S
25    corporations, and owners of limited liability companies,
26    if the liability company is treated as a partnership for

 

 

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1    the purposes of federal and State income taxation, there
2    shall be allowed a credit under this Section to be
3    determined in accordance with the determination of income
4    and distributive share of income under Sections 702 and
5    704 and Subchapter S of the Internal Revenue Code.
6        The total aggregate amount of credits awarded under
7    the Blue Collar Jobs Act (Article 20 of Public Act 101-9
8    this amendatory Act of the 101st General Assembly) shall
9    not exceed $20,000,000 in any State fiscal year.
10        This paragraph (8) is exempt from the provisions of
11    Section 250.
12    (g) (Blank).
13    (h) Investment credit; High Impact Business.
14        (1) Subject to subsections (b) and (b-5) of Section
15    5.5 of the Illinois Enterprise Zone Act, a taxpayer shall
16    be allowed a credit against the tax imposed by subsections
17    (a) and (b) of this Section for investment in qualified
18    property which is placed in service by a Department of
19    Commerce and Economic Opportunity designated High Impact
20    Business. The credit shall be .5% of the basis for such
21    property. The credit shall not be available (i) until the
22    minimum investments in qualified property set forth in
23    subdivision (a)(3)(A) of Section 5.5 of the Illinois
24    Enterprise Zone Act have been satisfied or (ii) until the
25    time authorized in subsection (b-5) of the Illinois
26    Enterprise Zone Act for entities designated as High Impact

 

 

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

 

 

SB2293- 64 -LRB102 11738 HLH 17072 b

1    applied first.
2        Changes made in this subdivision (h)(1) by Public Act
3    88-670 restore changes made by Public Act 85-1182 and
4    reflect existing law.
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        (h);
13            (C) is acquired by purchase as defined in Section
14        179(d) of the Internal Revenue Code; and
15            (D) is not eligible for the Enterprise Zone
16        Investment Credit provided by subsection (f) of this
17        Section.
18        (3) The basis of qualified property shall be the basis
19    used to compute the depreciation deduction for federal
20    income tax purposes.
21        (4) If the basis of the property for federal income
22    tax depreciation purposes is increased after it has been
23    placed in service in a federally designated Foreign Trade
24    Zone or Sub-Zone located in Illinois by the taxpayer, the
25    amount of such increase shall be deemed property placed in
26    service on the date of such increase in basis.

 

 

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1        (5) The term "placed in service" shall have the same
2    meaning as under Section 46 of the Internal Revenue Code.
3        (6) If during any taxable year ending on or before
4    December 31, 1996, any property ceases to be qualified
5    property in the hands of the taxpayer within 48 months
6    after being placed in service, or the situs of any
7    qualified property is moved outside Illinois within 48
8    months after being placed in service, the tax imposed
9    under subsections (a) and (b) of this Section for such
10    taxable year shall be increased. Such increase shall be
11    determined by (i) recomputing the investment credit which
12    would have been allowed for the year in which credit for
13    such property was originally allowed by eliminating such
14    property from such computation, and (ii) subtracting such
15    recomputed credit from the amount of credit previously
16    allowed. For the purposes of this paragraph (6), a
17    reduction of the basis of qualified property resulting
18    from a redetermination of the purchase price shall be
19    deemed a disposition of qualified property to the extent
20    of such reduction.
21        (7) Beginning with tax years ending after December 31,
22    1996, if a taxpayer qualifies for the credit under this
23    subsection (h) and thereby is granted a tax abatement and
24    the taxpayer relocates its entire facility in violation of
25    the explicit terms and length of the contract under
26    Section 18-183 of the Property Tax Code, the tax imposed

 

 

SB2293- 66 -LRB102 11738 HLH 17072 b

1    under subsections (a) and (b) of this Section shall be
2    increased for the taxable year in which the taxpayer
3    relocated its facility by an amount equal to the amount of
4    credit received by the taxpayer under this subsection (h).
5    (h-5) High Impact Business construction constructions jobs
6credit. For taxable years beginning on or after January 1,
72021, there shall also be allowed a High Impact Business
8construction jobs credit against the tax imposed under
9subsections (a) and (b) of this Section as provided in
10subsections (i) and (j) of Section 5.5 of the Illinois
11Enterprise Zone Act.
12    The credit or credits may not reduce the taxpayer's
13liability to less than zero. If the amount of the credit or
14credits exceeds the taxpayer's liability, the excess may be
15carried forward and applied against the taxpayer's liability
16in succeeding calendar years in the manner provided under
17paragraph (4) of Section 211 of this Act. The credit or credits
18shall be applied to the earliest year for which there is a tax
19liability. If there are credits from more than one taxable
20year that are available to offset a liability, the earlier
21credit shall be applied first.
22    For partners, shareholders of Subchapter S corporations,
23and owners of limited liability companies, if the liability
24company is treated as a partnership for the purposes of
25federal and State income taxation, there shall be allowed a
26credit under this Section to be determined in accordance with

 

 

SB2293- 67 -LRB102 11738 HLH 17072 b

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

 

 

SB2293- 68 -LRB102 11738 HLH 17072 b

1excess credit year, provided that no credit may be carried
2forward to any year ending on or after December 31, 2003. This
3credit shall be applied first to the earliest year for which
4there is a liability. If there is a credit under this
5subsection from more than one tax year that is available to
6offset a liability the earliest credit arising under this
7subsection shall be applied first.
8    If, during any taxable year ending on or after December
931, 1986, the tax imposed by subsections (c) and (d) of this
10Section for which a taxpayer has claimed a credit under this
11subsection (i) is reduced, the amount of credit for such tax
12shall also be reduced. Such reduction shall be determined by
13recomputing the credit to take into account the reduced tax
14imposed by subsections (c) and (d). If any portion of the
15reduced amount of credit has been carried to a different
16taxable year, an amended return shall be filed for such
17taxable year to reduce the amount of credit claimed.
18    (j) Training expense credit. Beginning with tax years
19ending on or after December 31, 1986 and prior to December 31,
202003, a taxpayer shall be allowed a credit against the tax
21imposed by subsections (a) and (b) under this Section for all
22amounts paid or accrued, on behalf of all persons employed by
23the taxpayer in Illinois or Illinois residents employed
24outside of Illinois by a taxpayer, for educational or
25vocational training in semi-technical or technical fields or
26semi-skilled or skilled fields, which were deducted from gross

 

 

SB2293- 69 -LRB102 11738 HLH 17072 b

1income in the computation of taxable income. The credit
2against the tax imposed by subsections (a) and (b) shall be
31.6% of such training expenses. For partners, shareholders of
4subchapter S corporations, and owners of limited liability
5companies, if the liability company is treated as a
6partnership for purposes of federal and State income taxation,
7there shall be allowed a credit under this subsection (j) to be
8determined in accordance with the determination of income and
9distributive share of income under Sections 702 and 704 and
10subchapter S of the Internal Revenue Code.
11    Any credit allowed under this subsection which is unused
12in the year the credit is earned may be carried forward to each
13of the 5 taxable years following the year for which the credit
14is first computed until it is used. This credit shall be
15applied first to the earliest year for which there is a
16liability. If there is a credit under this subsection from
17more than one tax year that is available to offset a liability,
18the earliest credit arising under this subsection shall be
19applied first. No carryforward credit may be claimed in any
20tax year ending on or after December 31, 2003.
21    (k) Research and development credit. For tax years ending
22after July 1, 1990 and prior to December 31, 2003, and
23beginning again for tax years ending on or after December 31,
242004, and ending prior to January 1, 2027, a taxpayer shall be
25allowed a credit against the tax imposed by subsections (a)
26and (b) of this Section for increasing research activities in

 

 

SB2293- 70 -LRB102 11738 HLH 17072 b

1this State. The credit allowed against the tax imposed by
2subsections (a) and (b) shall be equal to 6 1/2% of the
3qualifying expenditures for increasing research activities in
4this State. For partners, shareholders of subchapter S
5corporations, and owners of limited liability companies, if
6the liability company is treated as a partnership for purposes
7of federal and State income taxation, there shall be allowed a
8credit under this subsection to be determined in accordance
9with the determination of income and distributive share of
10income under Sections 702 and 704 and subchapter S of the
11Internal Revenue Code.
12    For purposes of this subsection, "qualifying expenditures"
13means the qualifying expenditures as defined for the federal
14credit for increasing research activities which would be
15allowable under Section 41 of the Internal Revenue Code and
16which are conducted in this State, "qualifying expenditures
17for increasing research activities in this State" means the
18excess of qualifying expenditures for the taxable year in
19which incurred over qualifying expenditures for the base
20period, "qualifying expenditures for the base period" means
21the average of the qualifying expenditures for each year in
22the base period, and "base period" means the 3 taxable years
23immediately preceding the taxable year for which the
24determination is being made.
25    Any credit in excess of the tax liability for the taxable
26year may be carried forward. A taxpayer may elect to have the

 

 

SB2293- 71 -LRB102 11738 HLH 17072 b

1unused credit shown on its final completed return carried over
2as a credit against the tax liability for the following 5
3taxable years or until it has been fully used, whichever
4occurs first; provided that no credit earned in a tax year
5ending prior to December 31, 2003 may be carried forward to any
6year ending on or after December 31, 2003.
7    If an unused credit is carried forward to a given year from
82 or more earlier years, that credit arising in the earliest
9year will be applied first against the tax liability for the
10given year. If a tax liability for the given year still
11remains, the credit from the next earliest year will then be
12applied, and so on, until all credits have been used or no tax
13liability for the given year remains. Any remaining unused
14credit or credits then will be carried forward to the next
15following year in which a tax liability is incurred, except
16that no credit can be carried forward to a year which is more
17than 5 years after the year in which the expense for which the
18credit is given was incurred.
19    No inference shall be drawn from Public Act 91-644 this
20amendatory Act of the 91st General Assembly in construing this
21Section for taxable years beginning before January 1, 1999.
22    It is the intent of the General Assembly that the research
23and development credit under this subsection (k) shall apply
24continuously for all tax years ending on or after December 31,
252004 and ending prior to January 1, 2027, including, but not
26limited to, the period beginning on January 1, 2016 and ending

 

 

SB2293- 72 -LRB102 11738 HLH 17072 b

1on July 6, 2017 (the effective date of Public Act 100-22) this
2amendatory Act of the 100th General Assembly. All actions
3taken in reliance on the continuation of the credit under this
4subsection (k) by any taxpayer are hereby validated.
5    (l) Environmental Remediation Tax Credit.
6        (i) For tax years ending after December 31, 1997 and
7    on or before December 31, 2001, a taxpayer shall be
8    allowed a credit against the tax imposed by subsections
9    (a) and (b) of this Section for certain amounts paid for
10    unreimbursed eligible remediation costs, as specified in
11    this subsection. For purposes of this Section,
12    "unreimbursed eligible remediation costs" means costs
13    approved by the Illinois Environmental Protection Agency
14    ("Agency") under Section 58.14 of the Environmental
15    Protection Act that were paid in performing environmental
16    remediation at a site for which a No Further Remediation
17    Letter was issued by the Agency and recorded under Section
18    58.10 of the Environmental Protection Act. The credit must
19    be claimed for the taxable year in which Agency approval
20    of the eligible remediation costs is granted. The credit
21    is not available to any taxpayer if the taxpayer or any
22    related party caused or contributed to, in any material
23    respect, a release of regulated substances on, in, or
24    under the site that was identified and addressed by the
25    remedial action pursuant to the Site Remediation Program
26    of the Environmental Protection Act. After the Pollution

 

 

SB2293- 73 -LRB102 11738 HLH 17072 b

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

 

 

SB2293- 74 -LRB102 11738 HLH 17072 b

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

 

 

SB2293- 75 -LRB102 11738 HLH 17072 b

1        (iii) For purposes of this Section, the term "site"
2    shall have the same meaning as under Section 58.2 of the
3    Environmental Protection Act.
4    (m) Education expense credit. Beginning with tax years
5ending after December 31, 1999, a taxpayer who is the
6custodian of one or more qualifying pupils shall be allowed a
7credit against the tax imposed by subsections (a) and (b) of
8this Section for qualified education expenses incurred on
9behalf of the qualifying pupils. The credit shall be equal to
1025% of qualified education expenses, but in no event may the
11total credit under this subsection claimed by a family that is
12the custodian of qualifying pupils exceed (i) $500 for tax
13years ending prior to December 31, 2017, and (ii) $750 for tax
14years ending on or after December 31, 2017. In no event shall a
15credit under this subsection reduce the taxpayer's liability
16under this Act to less than zero. Notwithstanding any other
17provision of law, for taxable years beginning on or after
18January 1, 2017, no taxpayer may claim a credit under this
19subsection (m) if the taxpayer's adjusted gross income for the
20taxable year exceeds (i) $500,000, in the case of spouses
21filing a joint federal tax return or (ii) $250,000, in the case
22of all other taxpayers. This subsection is exempt from the
23provisions of Section 250 of this Act.
24    For purposes of this subsection:
25    "Qualifying pupils" means individuals who (i) are
26residents of the State of Illinois, (ii) are under the age of

 

 

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

 

 

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

 

 

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

 

 

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1    eligible under the provisions of subsection (i).
2        (iii) For purposes of this Section, the term "site"
3    shall have the same meaning as under Section 58.2 of the
4    Environmental Protection Act.
5    (o) For each of taxable years during the Compassionate Use
6of Medical Cannabis Program, a surcharge is imposed on all
7taxpayers on income arising from the sale or exchange of
8capital assets, depreciable business property, real property
9used in the trade or business, and Section 197 intangibles of
10an organization registrant under the Compassionate Use of
11Medical Cannabis Program Act. The amount of the surcharge is
12equal to the amount of federal income tax liability for the
13taxable year attributable to those sales and exchanges. The
14surcharge imposed does not apply if:
15        (1) the medical cannabis cultivation center
16    registration, medical cannabis dispensary registration, or
17    the property of a registration is transferred as a result
18    of any of the following:
19            (A) bankruptcy, a receivership, or a debt
20        adjustment initiated by or against the initial
21        registration or the substantial owners of the initial
22        registration;
23            (B) cancellation, revocation, or termination of
24        any registration by the Illinois Department of Public
25        Health;
26            (C) a determination by the Illinois Department of

 

 

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1        Public Health that transfer of the registration is in
2        the best interests of Illinois qualifying patients as
3        defined by the Compassionate Use of Medical Cannabis
4        Program Act;
5            (D) the death of an owner of the equity interest in
6        a registrant;
7            (E) the acquisition of a controlling interest in
8        the stock or substantially all of the assets of a
9        publicly traded company;
10            (F) a transfer by a parent company to a wholly
11        owned subsidiary; or
12            (G) the transfer or sale to or by one person to
13        another person where both persons were initial owners
14        of the registration when the registration was issued;
15        or
16        (2) the cannabis cultivation center registration,
17    medical cannabis dispensary registration, or the
18    controlling interest in a registrant's property is
19    transferred in a transaction to lineal descendants in
20    which no gain or loss is recognized or as a result of a
21    transaction in accordance with Section 351 of the Internal
22    Revenue Code in which no gain or loss is recognized.
23    (p) For tax years ending after July 1, 2021, a financial
24institution with less than $50,000,000,000 in assets at the
25close of the preceding tax year shall be allowed a credit
26against the tax imposed by subsections (a) and (b) of this

 

 

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1Section in an amount equal to the aggregate amount of all fees,
2penalties, and any other income derived during the taxable
3year from each commercial loan transaction that is (i) less
4than $5,000,000, (ii) originated by the financial institution,
5(iii) made to a person residing or located in this State, and
6(iv) made primarily for a business or agricultural project in
7this State.
8    For partners, shareholders of subchapter S corporations,
9and owners of limited liability companies, if the liability
10company is treated as a partnership for purposes of federal
11and State income taxation, there shall be allowed a credit
12under this subsection to be determined in accordance with the
13determination of income and distributive share of income under
14Sections 702 and 704 and subchapter S of the Internal Revenue
15Code.
16    As used in this Section, "financial institution" means a
17partnership, association, limited liability company, or
18corporation doing business under and as permitted by any law
19of this State or of the United States relating to banks,
20savings and loan associations, or savings banks.
21    This Section is exempt from the provisions of Section 250.
22(Source: P.A. 100-22, eff. 7-6-17; 101-8, see Section 99 for
23effective date; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
24101-207, eff. 8-2-19; 101-363, eff. 8-9-19; revised 11-18-20.)
 
25    Section 99. Effective date. This Act takes effect upon
26becoming law.