Full Text of HB5867 97th General Assembly
HB5867 97TH GENERAL ASSEMBLY |
| | 97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012 HB5867 Introduced 2/16/2012, by Rep. Michael J. Zalewski SYNOPSIS AS INTRODUCED: | | 35 ILCS 5/201 | from Ch. 120, par. 2-201 |
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Amends the Illinois Income Tax Act. Makes a technical change in a Section
concerning the tax imposed.
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| | A BILL FOR |
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| 1 | | AN ACT concerning revenue.
| 2 | | Be it enacted by the People of the State of Illinois, | 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Income Tax Act is amended by | 5 | | changing Section 201 as follows: | 6 | | (35 ILCS 5/201) (from Ch. 120, par. 2-201) | 7 | | (Text of Section before amendment by P.A. 97-636 ) | 8 | | Sec. 201. Tax Imposed. | 9 | | (a) In general. A tax measured by net income is hereby | 10 | | imposed on every
individual, corporation, trust and and estate | 11 | | for each taxable year ending
after July 31, 1969 on the | 12 | | privilege of earning or receiving income in or
as a resident of | 13 | | this State. Such tax shall be in addition to all other
| 14 | | occupation or privilege taxes imposed by this State or by any | 15 | | municipal
corporation or political subdivision thereof. | 16 | | (b) Rates. The tax imposed by subsection (a) of this | 17 | | Section shall be
determined as follows, except as adjusted by | 18 | | subsection (d-1): | 19 | | (1) In the case of an individual, trust or estate, for | 20 | | taxable years
ending prior to July 1, 1989, an amount equal | 21 | | to 2 1/2% of the taxpayer's
net income for the taxable | 22 | | year. | 23 | | (2) In the case of an individual, trust or estate, for |
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| 1 | | taxable years
beginning prior to July 1, 1989 and ending | 2 | | after June 30, 1989, an amount
equal to the sum of (i) 2 | 3 | | 1/2% of the taxpayer's net income for the period
prior to | 4 | | July 1, 1989, as calculated under Section 202.3, and (ii) | 5 | | 3% of the
taxpayer's net income for the period after June | 6 | | 30, 1989, as calculated
under Section 202.3. | 7 | | (3) In the case of an individual, trust or estate, for | 8 | | taxable years
beginning after June 30, 1989, and ending | 9 | | prior to January 1, 2011, an amount equal to 3% of the | 10 | | taxpayer's net
income for the taxable year. | 11 | | (4) In the case of an individual, trust, or estate, for | 12 | | taxable years beginning prior to January 1, 2011, and | 13 | | ending after December 31, 2010, an amount equal to the sum | 14 | | of (i) 3% of the taxpayer's net income for the period prior | 15 | | to January 1, 2011, as calculated under Section 202.5, and | 16 | | (ii) 5% of the taxpayer's net income for the period after | 17 | | December 31, 2010, as calculated under Section 202.5. | 18 | | (5) In the case of an individual, trust, or estate, for | 19 | | taxable years beginning on or after January 1, 2011, and | 20 | | ending prior to January 1, 2015, an amount equal to 5% of | 21 | | the taxpayer's net income for the taxable year. | 22 | | (5.1) In the case of an individual, trust, or estate, | 23 | | for taxable years beginning prior to January 1, 2015, and | 24 | | ending after December 31, 2014, an amount equal to the sum | 25 | | of (i) 5% of the taxpayer's net income for the period prior | 26 | | to January 1, 2015, as calculated under Section 202.5, and |
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| 1 | | (ii) 3.75% of the taxpayer's net income for the period | 2 | | after December 31, 2014, as calculated under Section 202.5. | 3 | | (5.2) In the case of an individual, trust, or estate, | 4 | | for taxable years beginning on or after January 1, 2015, | 5 | | and ending prior to January 1, 2025, an amount equal to | 6 | | 3.75% of the taxpayer's net income for the taxable year. | 7 | | (5.3) In the case of an individual, trust, or estate, | 8 | | for taxable years beginning prior to January 1, 2025, and | 9 | | ending after December 31, 2024, an amount equal to the sum | 10 | | of (i) 3.75% of the taxpayer's net income for the period | 11 | | prior to January 1, 2025, as calculated under Section | 12 | | 202.5, and (ii) 3.25% of the taxpayer's net income for the | 13 | | period after December 31, 2024, as calculated under Section | 14 | | 202.5. | 15 | | (5.4) In the case of an individual, trust, or estate, | 16 | | for taxable years beginning on or after January 1, 2025, an | 17 | | amount equal to 3.25% of the taxpayer's net income for the | 18 | | taxable year. | 19 | | (6) In the case of a corporation, for taxable years
| 20 | | ending prior to July 1, 1989, an amount equal to 4% of the
| 21 | | taxpayer's net income for the taxable year. | 22 | | (7) In the case of a corporation, for taxable years | 23 | | beginning prior to
July 1, 1989 and ending after June 30, | 24 | | 1989, an amount equal to the sum of
(i) 4% of the | 25 | | taxpayer's net income for the period prior to July 1, 1989,
| 26 | | as calculated under Section 202.3, and (ii) 4.8% of the |
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| 1 | | taxpayer's net
income for the period after June 30, 1989, | 2 | | as calculated under Section
202.3. | 3 | | (8) In the case of a corporation, for taxable years | 4 | | beginning after
June 30, 1989, and ending prior to January | 5 | | 1, 2011, an amount equal to 4.8% of the taxpayer's net | 6 | | income for the
taxable year. | 7 | | (9) In the case of a corporation, for taxable years | 8 | | beginning prior to January 1, 2011, and ending after | 9 | | December 31, 2010, an amount equal to the sum of (i) 4.8% | 10 | | of the taxpayer's net income for the period prior to | 11 | | January 1, 2011, as calculated under Section 202.5, and | 12 | | (ii) 7% of the taxpayer's net income for the period after | 13 | | December 31, 2010, as calculated under Section 202.5. | 14 | | (10) In the case of a corporation, for taxable years | 15 | | beginning on or after January 1, 2011, and ending prior to | 16 | | January 1, 2015, an amount equal to 7% of the taxpayer's | 17 | | net income for the taxable year. | 18 | | (11) In the case of a corporation, for taxable years | 19 | | beginning prior to January 1, 2015, and ending after | 20 | | December 31, 2014, an amount equal to the sum of (i) 7% of | 21 | | the taxpayer's net income for the period prior to January | 22 | | 1, 2015, as calculated under Section 202.5, and (ii) 5.25% | 23 | | of the taxpayer's net income for the period after December | 24 | | 31, 2014, as calculated under Section 202.5. | 25 | | (12) In the case of a corporation, for taxable years | 26 | | beginning on or after January 1, 2015, and ending prior to |
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| 1 | | January 1, 2025, an amount equal to 5.25% of the taxpayer's | 2 | | net income for the taxable year. | 3 | | (13) In the case of a corporation, for taxable years | 4 | | beginning prior to January 1, 2025, and ending after | 5 | | December 31, 2024, an amount equal to the sum of (i) 5.25% | 6 | | of the taxpayer's net income for the period prior to | 7 | | January 1, 2025, as calculated under Section 202.5, and | 8 | | (ii) 4.8% of the taxpayer's net income for the period after | 9 | | December 31, 2024, as calculated under Section 202.5. | 10 | | (14) In the case of a corporation, for taxable years | 11 | | beginning on or after January 1, 2025, an amount equal to | 12 | | 4.8% of the taxpayer's net income for the taxable year. | 13 | | The rates under this subsection (b) are subject to the | 14 | | provisions of Section 201.5. | 15 | | (c) Personal Property Tax Replacement Income Tax.
| 16 | | Beginning on July 1, 1979 and thereafter, in addition to such | 17 | | income
tax, there is also hereby imposed the Personal Property | 18 | | Tax Replacement
Income Tax measured by net income on every | 19 | | corporation (including Subchapter
S corporations), partnership | 20 | | and trust, for each taxable year ending after
June 30, 1979. | 21 | | Such taxes are imposed on the privilege of earning or
receiving | 22 | | income in or as a resident of this State. The Personal Property
| 23 | | Tax Replacement Income Tax shall be in addition to the income | 24 | | tax imposed
by subsections (a) and (b) of this Section and in | 25 | | addition to all other
occupation or privilege taxes imposed by | 26 | | this State or by any municipal
corporation or political |
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| 1 | | subdivision thereof. | 2 | | (d) Additional Personal Property Tax Replacement Income | 3 | | Tax Rates.
The personal property tax replacement income tax | 4 | | imposed by this subsection
and subsection (c) of this Section | 5 | | in the case of a corporation, other
than a Subchapter S | 6 | | corporation and except as adjusted by subsection (d-1),
shall | 7 | | be an additional amount equal to
2.85% of such taxpayer's net | 8 | | income for the taxable year, except that
beginning on January | 9 | | 1, 1981, and thereafter, the rate of 2.85% specified
in this | 10 | | subsection shall be reduced to 2.5%, and in the case of a
| 11 | | partnership, trust or a Subchapter S corporation shall be an | 12 | | additional
amount equal to 1.5% of such taxpayer's net income | 13 | | for the taxable year. | 14 | | (d-1) Rate reduction for certain foreign insurers. In the | 15 | | case of a
foreign insurer, as defined by Section 35A-5 of the | 16 | | Illinois Insurance Code,
whose state or country of domicile | 17 | | imposes on insurers domiciled in Illinois
a retaliatory tax | 18 | | (excluding any insurer
whose premiums from reinsurance assumed | 19 | | are 50% or more of its total insurance
premiums as determined | 20 | | under paragraph (2) of subsection (b) of Section 304,
except | 21 | | that for purposes of this determination premiums from | 22 | | reinsurance do
not include premiums from inter-affiliate | 23 | | reinsurance arrangements),
beginning with taxable years ending | 24 | | on or after December 31, 1999,
the sum of
the rates of tax | 25 | | imposed by subsections (b) and (d) shall be reduced (but not
| 26 | | increased) to the rate at which the total amount of tax imposed |
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| 1 | | under this Act,
net of all credits allowed under this Act, | 2 | | shall equal (i) the total amount of
tax that would be imposed | 3 | | on the foreign insurer's net income allocable to
Illinois for | 4 | | the taxable year by such foreign insurer's state or country of
| 5 | | domicile if that net income were subject to all income taxes | 6 | | and taxes
measured by net income imposed by such foreign | 7 | | insurer's state or country of
domicile, net of all credits | 8 | | allowed or (ii) a rate of zero if no such tax is
imposed on such | 9 | | income by the foreign insurer's state of domicile.
For the | 10 | | purposes of this subsection (d-1), an inter-affiliate includes | 11 | | a
mutual insurer under common management. | 12 | | (1) For the purposes of subsection (d-1), in no event | 13 | | shall the sum of the
rates of tax imposed by subsections | 14 | | (b) and (d) be reduced below the rate at
which the sum of: | 15 | | (A) the total amount of tax imposed on such foreign | 16 | | insurer under
this Act for a taxable year, net of all | 17 | | credits allowed under this Act, plus | 18 | | (B) the privilege tax imposed by Section 409 of the | 19 | | Illinois Insurance
Code, the fire insurance company | 20 | | tax imposed by Section 12 of the Fire
Investigation | 21 | | Act, and the fire department taxes imposed under | 22 | | Section 11-10-1
of the Illinois Municipal Code, | 23 | | equals 1.25% for taxable years ending prior to December 31, | 24 | | 2003, or
1.75% for taxable years ending on or after | 25 | | December 31, 2003, of the net
taxable premiums written for | 26 | | the taxable year,
as described by subsection (1) of Section |
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| 1 | | 409 of the Illinois Insurance Code.
This paragraph will in | 2 | | no event increase the rates imposed under subsections
(b) | 3 | | and (d). | 4 | | (2) Any reduction in the rates of tax imposed by this | 5 | | subsection shall be
applied first against the rates imposed | 6 | | by subsection (b) and only after the
tax imposed by | 7 | | subsection (a) net of all credits allowed under this | 8 | | Section
other than the credit allowed under subsection (i) | 9 | | has been reduced to zero,
against the rates imposed by | 10 | | subsection (d). | 11 | | This subsection (d-1) is exempt from the provisions of | 12 | | Section 250. | 13 | | (e) Investment credit. A taxpayer shall be allowed a credit
| 14 | | against the Personal Property Tax Replacement Income Tax for
| 15 | | investment in qualified property. | 16 | | (1) A taxpayer shall be allowed a credit equal to .5% | 17 | | of
the basis of qualified property placed in service during | 18 | | the taxable year,
provided such property is placed in | 19 | | service on or after
July 1, 1984. There shall be allowed an | 20 | | additional credit equal
to .5% of the basis of qualified | 21 | | property placed in service during the
taxable year, | 22 | | provided such property is placed in service on or
after | 23 | | July 1, 1986, and the taxpayer's base employment
within | 24 | | Illinois has increased by 1% or more over the preceding | 25 | | year as
determined by the taxpayer's employment records | 26 | | filed with the
Illinois Department of Employment Security. |
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| 1 | | Taxpayers who are new to
Illinois shall be deemed to have | 2 | | met the 1% growth in base employment for
the first year in | 3 | | which they file employment records with the Illinois
| 4 | | Department of Employment Security. The provisions added to | 5 | | this Section by
Public Act 85-1200 (and restored by Public | 6 | | Act 87-895) shall be
construed as declaratory of existing | 7 | | law and not as a new enactment. If,
in any year, the | 8 | | increase in base employment within Illinois over the
| 9 | | preceding year is less than 1%, the additional credit shall | 10 | | be limited to that
percentage times a fraction, the | 11 | | numerator of which is .5% and the denominator
of which is | 12 | | 1%, but shall not exceed .5%. The investment credit shall | 13 | | not be
allowed to the extent that it would reduce a | 14 | | taxpayer's liability in any tax
year below zero, nor may | 15 | | any credit for qualified property be allowed for any
year | 16 | | other than the year in which the property was placed in | 17 | | service in
Illinois. For tax years ending on or after | 18 | | December 31, 1987, and on or
before December 31, 1988, the | 19 | | credit shall be allowed for the tax year in
which the | 20 | | property is placed in service, or, if the amount of the | 21 | | credit
exceeds the tax liability for that year, whether it | 22 | | exceeds the original
liability or the liability as later | 23 | | amended, such excess may be carried
forward and applied to | 24 | | the tax liability of the 5 taxable years following
the | 25 | | excess credit years if the taxpayer (i) makes investments | 26 | | which cause
the creation of a minimum of 2,000 full-time |
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| 1 | | equivalent jobs in Illinois,
(ii) is located in an | 2 | | enterprise zone established pursuant to the Illinois
| 3 | | Enterprise Zone Act and (iii) is certified by the | 4 | | Department of Commerce
and Community Affairs (now | 5 | | Department of Commerce and Economic Opportunity) as | 6 | | complying with the requirements specified in
clause (i) and | 7 | | (ii) by July 1, 1986. The Department of Commerce and
| 8 | | Community Affairs (now Department of Commerce and Economic | 9 | | Opportunity) shall notify the Department of Revenue of all | 10 | | such
certifications immediately. For tax years ending | 11 | | after December 31, 1988,
the credit shall be allowed for | 12 | | the tax year in which the property is
placed in service, | 13 | | or, if the amount of the credit exceeds the tax
liability | 14 | | for that year, whether it exceeds the original liability or | 15 | | the
liability as later amended, such excess may be carried | 16 | | forward and applied
to the tax liability of the 5 taxable | 17 | | years following the excess credit
years. The credit shall | 18 | | be applied to the earliest year for which there is
a | 19 | | liability. If there is credit from more than one tax year | 20 | | that is
available to offset a liability, earlier credit | 21 | | shall be applied first. | 22 | | (2) The term "qualified property" means property | 23 | | which: | 24 | | (A) is tangible, whether new or used, including | 25 | | buildings and structural
components of buildings and | 26 | | signs that are real property, but not including
land or |
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| 1 | | improvements to real property that are not a structural | 2 | | component of a
building such as landscaping, sewer | 3 | | lines, local access roads, fencing, parking
lots, and | 4 | | other appurtenances; | 5 | | (B) is depreciable pursuant to Section 167 of the | 6 | | Internal Revenue Code,
except that "3-year property" | 7 | | as defined in Section 168(c)(2)(A) of that
Code is not | 8 | | eligible for the credit provided by this subsection | 9 | | (e); | 10 | | (C) is acquired by purchase as defined in Section | 11 | | 179(d) of
the Internal Revenue Code; | 12 | | (D) is used in Illinois by a taxpayer who is | 13 | | primarily engaged in
manufacturing, or in mining coal | 14 | | or fluorite, or in retailing, or was placed in service | 15 | | on or after July 1, 2006 in a River Edge Redevelopment | 16 | | Zone established pursuant to the River Edge | 17 | | Redevelopment Zone Act; and | 18 | | (E) has not previously been used in Illinois in | 19 | | such a manner and by
such a person as would qualify for | 20 | | the credit provided by this subsection
(e) or | 21 | | subsection (f). | 22 | | (3) For purposes of this subsection (e), | 23 | | "manufacturing" means
the material staging and production | 24 | | of tangible personal property by
procedures commonly | 25 | | regarded as manufacturing, processing, fabrication, or
| 26 | | assembling which changes some existing material into new |
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| 1 | | shapes, new
qualities, or new combinations. For purposes of | 2 | | this subsection
(e) the term "mining" shall have the same | 3 | | meaning as the term "mining" in
Section 613(c) of the | 4 | | Internal Revenue Code. For purposes of this subsection
(e), | 5 | | the term "retailing" means the sale of tangible personal | 6 | | property for use or consumption and not for resale, or
| 7 | | services rendered in conjunction with the sale of tangible | 8 | | personal property for use or consumption and not for | 9 | | resale. For purposes of this subsection (e), "tangible | 10 | | personal property" has the same meaning as when that term | 11 | | is used in the Retailers' Occupation Tax Act, and, for | 12 | | taxable years ending after December 31, 2008, does not | 13 | | include the generation, transmission, or distribution of | 14 | | electricity. | 15 | | (4) The basis of qualified property shall be the basis
| 16 | | used to compute the depreciation deduction for federal | 17 | | income tax purposes. | 18 | | (5) If the basis of the property for federal income tax | 19 | | depreciation
purposes is increased after it has been placed | 20 | | in service in Illinois by
the taxpayer, the amount of such | 21 | | increase shall be deemed property placed
in service on the | 22 | | date of such increase in basis. | 23 | | (6) The term "placed in service" shall have the same
| 24 | | meaning as under Section 46 of the Internal Revenue Code. | 25 | | (7) If during any taxable year, any property ceases to
| 26 | | be qualified property in the hands of the taxpayer within |
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| 1 | | 48 months after
being placed in service, or the situs of | 2 | | any qualified property is
moved outside Illinois within 48 | 3 | | months after being placed in service, the
Personal Property | 4 | | Tax Replacement Income Tax for such taxable year shall be
| 5 | | increased. Such increase shall be determined by (i) | 6 | | recomputing the
investment credit which would have been | 7 | | allowed for the year in which
credit for such property was | 8 | | originally allowed by eliminating such
property from such | 9 | | computation and, (ii) subtracting such recomputed credit
| 10 | | from the amount of credit previously allowed. For the | 11 | | purposes of this
paragraph (7), a reduction of the basis of | 12 | | qualified property resulting
from a redetermination of the | 13 | | purchase price shall be deemed a disposition
of qualified | 14 | | property to the extent of such reduction. | 15 | | (8) Unless the investment credit is extended by law, | 16 | | the
basis of qualified property shall not include costs | 17 | | incurred after
December 31, 2013, except for costs incurred | 18 | | pursuant to a binding
contract entered into on or before | 19 | | December 31, 2013. | 20 | | (9) Each taxable year ending before December 31, 2000, | 21 | | a partnership may
elect to pass through to its
partners the | 22 | | credits to which the partnership is entitled under this | 23 | | subsection
(e) for the taxable year. A partner may use the | 24 | | credit allocated to him or her
under this paragraph only | 25 | | against the tax imposed in subsections (c) and (d) of
this | 26 | | Section. If the partnership makes that election, those |
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| 1 | | credits shall be
allocated among the partners in the | 2 | | partnership in accordance with the rules
set forth in | 3 | | Section 704(b) of the Internal Revenue Code, and the rules
| 4 | | promulgated under that Section, and the allocated amount of | 5 | | the credits shall
be allowed to the partners for that | 6 | | taxable year. The partnership shall make
this election on | 7 | | its Personal Property Tax Replacement Income Tax return for
| 8 | | that taxable year. The election to pass through the credits | 9 | | shall be
irrevocable. | 10 | | For taxable years ending on or after December 31, 2000, | 11 | | a
partner that qualifies its
partnership for a subtraction | 12 | | under subparagraph (I) of paragraph (2) of
subsection (d) | 13 | | of Section 203 or a shareholder that qualifies a Subchapter | 14 | | S
corporation for a subtraction under subparagraph (S) of | 15 | | paragraph (2) of
subsection (b) of Section 203 shall be | 16 | | allowed a credit under this subsection
(e) equal to its | 17 | | share of the credit earned under this subsection (e) during
| 18 | | the taxable year by the partnership or Subchapter S | 19 | | corporation, determined in
accordance with the | 20 | | determination of income and distributive share of
income | 21 | | under Sections 702 and 704 and Subchapter S of the Internal | 22 | | Revenue
Code. This paragraph is exempt from the provisions | 23 | | of Section 250. | 24 | | (f) Investment credit; Enterprise Zone; River Edge | 25 | | Redevelopment Zone. | 26 | | (1) A taxpayer shall be allowed a credit against the |
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| 1 | | tax imposed
by subsections (a) and (b) of this Section for | 2 | | investment in qualified
property which is placed in service | 3 | | in an Enterprise Zone created
pursuant to the Illinois | 4 | | Enterprise Zone Act or, for property placed in service on | 5 | | or after July 1, 2006, a River Edge Redevelopment Zone | 6 | | established pursuant to the River Edge Redevelopment Zone | 7 | | Act. For partners, shareholders
of Subchapter S | 8 | | corporations, and owners of limited liability companies,
| 9 | | if the liability company is treated as a partnership for | 10 | | purposes of
federal and State income taxation, there shall | 11 | | be allowed a credit under
this subsection (f) to be | 12 | | determined in accordance with the determination
of income | 13 | | and distributive share of income under Sections 702 and 704 | 14 | | and
Subchapter S of the Internal Revenue Code. The credit | 15 | | shall be .5% of the
basis for such property. The credit | 16 | | shall be available only in the taxable
year in which the | 17 | | property is placed in service in the Enterprise Zone or | 18 | | River Edge Redevelopment Zone and
shall not be allowed to | 19 | | the extent that it would reduce a taxpayer's
liability for | 20 | | the tax imposed by subsections (a) and (b) of this Section | 21 | | to
below zero. For tax years ending on or after December | 22 | | 31, 1985, the credit
shall be allowed for the tax year in | 23 | | which the property is placed in
service, or, if the amount | 24 | | of the credit exceeds the tax liability for that
year, | 25 | | whether it exceeds the original liability or the liability | 26 | | as later
amended, such excess may be carried forward and |
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| 1 | | applied to the tax
liability of the 5 taxable years | 2 | | following the excess credit year.
The credit shall be | 3 | | applied to the earliest year for which there is a
| 4 | | liability. If there is credit from more than one tax year | 5 | | that is available
to offset a liability, the credit | 6 | | accruing first in time shall be applied
first. | 7 | | (2) The term qualified property means property which: | 8 | | (A) is tangible, whether new or used, including | 9 | | buildings and
structural components of buildings; | 10 | | (B) is depreciable pursuant to Section 167 of the | 11 | | Internal Revenue
Code, except that "3-year property" | 12 | | as defined in Section 168(c)(2)(A) of
that Code is not | 13 | | eligible for the credit provided by this subsection | 14 | | (f); | 15 | | (C) is acquired by purchase as defined in Section | 16 | | 179(d) of
the Internal Revenue Code; | 17 | | (D) is used in the Enterprise Zone or River Edge | 18 | | Redevelopment Zone by the taxpayer; and | 19 | | (E) has not been previously used in Illinois in | 20 | | such a manner and by
such a person as would qualify for | 21 | | the credit provided by this subsection
(f) or | 22 | | subsection (e). | 23 | | (3) The basis of qualified property shall be the basis | 24 | | used to compute
the depreciation deduction for federal | 25 | | income tax purposes. | 26 | | (4) If the basis of the property for federal income tax |
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| 1 | | depreciation
purposes is increased after it has been placed | 2 | | in service in the Enterprise
Zone or River Edge | 3 | | Redevelopment Zone by the taxpayer, the amount of such | 4 | | increase shall be deemed property
placed in service on the | 5 | | date of such increase in basis. | 6 | | (5) The term "placed in service" shall have the same | 7 | | meaning as under
Section 46 of the Internal Revenue Code. | 8 | | (6) If during any taxable year, any property ceases to | 9 | | be qualified
property in the hands of the taxpayer within | 10 | | 48 months after being placed
in service, or the situs of | 11 | | any qualified property is moved outside the
Enterprise Zone | 12 | | or River Edge Redevelopment Zone within 48 months after | 13 | | being placed in service, the tax
imposed under subsections | 14 | | (a) and (b) of this Section for such taxable year
shall be | 15 | | increased. Such increase shall be determined by (i) | 16 | | recomputing
the investment credit which would have been | 17 | | allowed for the year in which
credit for such property was | 18 | | originally allowed by eliminating such
property from such | 19 | | computation, and (ii) subtracting such recomputed credit
| 20 | | from the amount of credit previously allowed. For the | 21 | | purposes of this
paragraph (6), a reduction of the basis of | 22 | | qualified property resulting
from a redetermination of the | 23 | | purchase price shall be deemed a disposition
of qualified | 24 | | property to the extent of such reduction. | 25 | | (7) There shall be allowed an additional credit equal | 26 | | to 0.5% of the basis of qualified property placed in |
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| 1 | | service during the taxable year in a River Edge | 2 | | Redevelopment Zone, provided such property is placed in | 3 | | service on or after July 1, 2006, and the taxpayer's base | 4 | | employment within Illinois has increased by 1% or more over | 5 | | the preceding year as determined by the taxpayer's | 6 | | employment records filed with the Illinois Department of | 7 | | Employment Security. Taxpayers who are new to Illinois | 8 | | shall be deemed to have met the 1% growth in base | 9 | | employment for the first year in which they file employment | 10 | | records with the Illinois Department of Employment | 11 | | Security. If, in any year, the increase in base employment | 12 | | within Illinois over the preceding year is less than 1%, | 13 | | the additional credit shall be limited to that percentage | 14 | | times a fraction, the numerator of which is 0.5% and the | 15 | | denominator of which is 1%, but shall not exceed 0.5%.
| 16 | | (g) Jobs Tax Credit; Enterprise Zone, River Edge | 17 | | Redevelopment Zone, and Foreign Trade Zone or Sub-Zone. | 18 | | (1) A taxpayer conducting a trade or business in an | 19 | | enterprise zone
or a High Impact Business designated by the | 20 | | Department of Commerce and
Economic Opportunity or for | 21 | | taxable years ending on or after December 31, 2006, in a | 22 | | River Edge Redevelopment Zone conducting a trade or | 23 | | business in a federally designated
Foreign Trade Zone or | 24 | | Sub-Zone shall be allowed a credit against the tax
imposed | 25 | | by subsections (a) and (b) of this Section in the amount of | 26 | | $500
per eligible employee hired to work in the zone during |
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| 1 | | the taxable year. | 2 | | (2) To qualify for the credit: | 3 | | (A) the taxpayer must hire 5 or more eligible | 4 | | employees to work in an
enterprise zone, River Edge | 5 | | Redevelopment Zone, or federally designated Foreign | 6 | | Trade Zone or Sub-Zone
during the taxable year; | 7 | | (B) the taxpayer's total employment within the | 8 | | enterprise zone, River Edge Redevelopment Zone, or
| 9 | | federally designated Foreign Trade Zone or Sub-Zone | 10 | | must
increase by 5 or more full-time employees beyond | 11 | | the total employed in that
zone at the end of the | 12 | | previous tax year for which a jobs tax
credit under | 13 | | this Section was taken, or beyond the total employed by | 14 | | the
taxpayer as of December 31, 1985, whichever is | 15 | | later; and | 16 | | (C) the eligible employees must be employed 180 | 17 | | consecutive days in
order to be deemed hired for | 18 | | purposes of this subsection. | 19 | | (3) An "eligible employee" means an employee who is: | 20 | | (A) Certified by the Department of Commerce and | 21 | | Economic Opportunity
as "eligible for services" | 22 | | pursuant to regulations promulgated in
accordance with | 23 | | Title II of the Job Training Partnership Act, Training
| 24 | | Services for the Disadvantaged or Title III of the Job | 25 | | Training Partnership
Act, Employment and Training | 26 | | Assistance for Dislocated Workers Program. |
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| 1 | | (B) Hired after the enterprise zone, River Edge | 2 | | Redevelopment Zone, or federally designated Foreign
| 3 | | Trade Zone or Sub-Zone was designated or the trade or
| 4 | | business was located in that zone, whichever is later. | 5 | | (C) Employed in the enterprise zone, River Edge | 6 | | Redevelopment Zone, or Foreign Trade Zone or
Sub-Zone. | 7 | | An employee is employed in an
enterprise zone or | 8 | | federally designated Foreign Trade Zone or Sub-Zone
if | 9 | | his services are rendered there or it is the base of
| 10 | | operations for the services performed. | 11 | | (D) A full-time employee working 30 or more hours | 12 | | per week. | 13 | | (4) For tax years ending on or after December 31, 1985 | 14 | | and prior to
December 31, 1988, the credit shall be allowed | 15 | | for the tax year in which
the eligible employees are hired. | 16 | | For tax years ending on or after
December 31, 1988, the | 17 | | credit shall be allowed for the tax year immediately
| 18 | | following the tax year in which the eligible employees are | 19 | | hired. If the
amount of the credit exceeds the tax | 20 | | liability for that year, whether it
exceeds the original | 21 | | liability or the liability as later amended, such
excess | 22 | | may be carried forward and applied to the tax liability of | 23 | | the 5
taxable years following the excess credit year. The | 24 | | credit shall be
applied to the earliest year for which | 25 | | there is a liability. If there is
credit from more than one | 26 | | tax year that is available to offset a liability,
earlier |
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| 1 | | credit shall be applied first. | 2 | | (5) The Department of Revenue shall promulgate such | 3 | | rules and regulations
as may be deemed necessary to carry | 4 | | out the purposes of this subsection (g). | 5 | | (6) The credit shall be available for eligible | 6 | | employees hired on or
after January 1, 1986. | 7 | | (h) Investment credit; High Impact Business. | 8 | | (1) Subject to subsections (b) and (b-5) of Section
5.5 | 9 | | of the Illinois Enterprise Zone Act, a taxpayer shall be | 10 | | allowed a credit
against the tax imposed by subsections (a) | 11 | | and (b) of this Section for
investment in qualified
| 12 | | property which is placed in service by a Department of | 13 | | Commerce and Economic Opportunity
designated High Impact | 14 | | Business. The credit shall be .5% of the basis
for such | 15 | | property. The credit shall not be available (i) until the | 16 | | minimum
investments in qualified property set forth in | 17 | | subdivision (a)(3)(A) of
Section 5.5 of the Illinois
| 18 | | Enterprise Zone Act have been satisfied
or (ii) until the | 19 | | time authorized in subsection (b-5) of the Illinois
| 20 | | Enterprise Zone Act for entities designated as High Impact | 21 | | Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and | 22 | | (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone | 23 | | Act, and shall not be allowed to the extent that it would
| 24 | | reduce a taxpayer's liability for the tax imposed by | 25 | | subsections (a) and (b) of
this Section to below zero. The | 26 | | credit applicable to such investments shall be
taken in the |
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| 1 | | taxable year in which such investments have been completed. | 2 | | The
credit for additional investments beyond the minimum | 3 | | investment by a designated
high impact business authorized | 4 | | under subdivision (a)(3)(A) of Section 5.5 of
the Illinois | 5 | | Enterprise Zone Act shall be available only in the taxable | 6 | | year in
which the property is placed in service and shall | 7 | | not be allowed to the extent
that it would reduce a | 8 | | taxpayer's liability for the tax imposed by subsections
(a) | 9 | | and (b) of this Section to below zero.
For tax years ending | 10 | | on or after December 31, 1987, the credit shall be
allowed | 11 | | for the tax year in which the property is placed in | 12 | | service, or, if
the amount of the credit exceeds the tax | 13 | | liability for that year, whether
it exceeds the original | 14 | | liability or the liability as later amended, such
excess | 15 | | may be carried forward and applied to the tax liability of | 16 | | the 5
taxable years following the excess credit year. The | 17 | | credit shall be
applied to the earliest year for which | 18 | | there is a liability. If there is
credit from more than one | 19 | | tax year that is available to offset a liability,
the | 20 | | credit accruing first in time shall be applied first. | 21 | | Changes made in this subdivision (h)(1) by Public Act | 22 | | 88-670
restore changes made by Public Act 85-1182 and | 23 | | reflect existing law. | 24 | | (2) The term qualified property means property which: | 25 | | (A) is tangible, whether new or used, including | 26 | | buildings and
structural components of buildings; |
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| 1 | | (B) is depreciable pursuant to Section 167 of the | 2 | | Internal Revenue
Code, except that "3-year property" | 3 | | as defined in Section 168(c)(2)(A) of
that Code is not | 4 | | eligible for the credit provided by this subsection | 5 | | (h); | 6 | | (C) is acquired by purchase as defined in Section | 7 | | 179(d) of the
Internal Revenue Code; and | 8 | | (D) is not eligible for the Enterprise Zone | 9 | | Investment Credit provided
by subsection (f) of this | 10 | | Section. | 11 | | (3) The basis of qualified property shall be the basis | 12 | | used to compute
the depreciation deduction for federal | 13 | | income tax purposes. | 14 | | (4) If the basis of the property for federal income tax | 15 | | depreciation
purposes is increased after it has been placed | 16 | | in service in a federally
designated Foreign Trade Zone or | 17 | | Sub-Zone located in Illinois by the taxpayer,
the amount of | 18 | | such increase shall be deemed property placed in service on
| 19 | | the date of such increase in basis. | 20 | | (5) The term "placed in service" shall have the same | 21 | | meaning as under
Section 46 of the Internal Revenue Code. | 22 | | (6) If during any taxable year ending on or before | 23 | | December 31, 1996,
any property ceases to be qualified
| 24 | | property in the hands of the taxpayer within 48 months | 25 | | after being placed
in service, or the situs of any | 26 | | qualified property is moved outside
Illinois within 48 |
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| 1 | | months after being placed in service, the tax imposed
under | 2 | | subsections (a) and (b) of this Section for such taxable | 3 | | year shall
be increased. Such increase shall be determined | 4 | | by (i) recomputing the
investment credit which would have | 5 | | been allowed for the year in which
credit for such property | 6 | | was originally allowed by eliminating such
property from | 7 | | such computation, and (ii) subtracting such recomputed | 8 | | credit
from the amount of credit previously allowed. For | 9 | | the purposes of this
paragraph (6), a reduction of the | 10 | | basis of qualified property resulting
from a | 11 | | redetermination of the purchase price shall be deemed a | 12 | | disposition
of qualified property to the extent of such | 13 | | reduction. | 14 | | (7) Beginning with tax years ending after December 31, | 15 | | 1996, if a
taxpayer qualifies for the credit under this | 16 | | subsection (h) and thereby is
granted a tax abatement and | 17 | | the taxpayer relocates its entire facility in
violation of | 18 | | the explicit terms and length of the contract under Section
| 19 | | 18-183 of the Property Tax Code, the tax imposed under | 20 | | subsections
(a) and (b) of this Section shall be increased | 21 | | for the taxable year
in which the taxpayer relocated its | 22 | | facility by an amount equal to the
amount of credit | 23 | | received by the taxpayer under this subsection (h). | 24 | | (i) Credit for Personal Property Tax Replacement Income | 25 | | Tax.
For tax years ending prior to December 31, 2003, a credit | 26 | | shall be allowed
against the tax imposed by
subsections (a) and |
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| 1 | | (b) of this Section for the tax imposed by subsections (c)
and | 2 | | (d) of this Section. This credit shall be computed by | 3 | | multiplying the tax
imposed by subsections (c) and (d) of this | 4 | | Section by a fraction, the numerator
of which is base income | 5 | | allocable to Illinois and the denominator of which is
Illinois | 6 | | base income, and further multiplying the product by the tax | 7 | | rate
imposed by subsections (a) and (b) of this Section. | 8 | | Any credit earned on or after December 31, 1986 under
this | 9 | | subsection which is unused in the year
the credit is computed | 10 | | because it exceeds the tax liability imposed by
subsections (a) | 11 | | and (b) for that year (whether it exceeds the original
| 12 | | liability or the liability as later amended) may be carried | 13 | | forward and
applied to the tax liability imposed by subsections | 14 | | (a) and (b) of the 5
taxable years following the excess credit | 15 | | year, provided that no credit may
be carried forward to any | 16 | | year ending on or
after December 31, 2003. This credit shall be
| 17 | | applied first to the earliest year for which there is a | 18 | | liability. If
there is a credit under this subsection from more | 19 | | than one tax year that is
available to offset a liability the | 20 | | earliest credit arising under this
subsection shall be applied | 21 | | first. | 22 | | If, during any taxable year ending on or after December 31, | 23 | | 1986, the
tax imposed by subsections (c) and (d) of this | 24 | | Section for which a taxpayer
has claimed a credit under this | 25 | | subsection (i) is reduced, the amount of
credit for such tax | 26 | | shall also be reduced. Such reduction shall be
determined by |
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| 1 | | recomputing the credit to take into account the reduced tax
| 2 | | imposed by subsections (c) and (d). If any portion of the
| 3 | | reduced amount of credit has been carried to a different | 4 | | taxable year, an
amended return shall be filed for such taxable | 5 | | year to reduce the amount of
credit claimed. | 6 | | (j) Training expense credit. Beginning with tax years | 7 | | ending on or
after December 31, 1986 and prior to December 31, | 8 | | 2003, a taxpayer shall be
allowed a credit against the
tax | 9 | | imposed by subsections (a) and (b) under this Section
for all | 10 | | amounts paid or accrued, on behalf of all persons
employed by | 11 | | the taxpayer in Illinois or Illinois residents employed
outside | 12 | | of Illinois by a taxpayer, for educational or vocational | 13 | | training in
semi-technical or technical fields or semi-skilled | 14 | | or skilled fields, which
were deducted from gross income in the | 15 | | computation of taxable income. The
credit against the tax | 16 | | imposed by subsections (a) and (b) shall be 1.6% of
such | 17 | | training expenses. For partners, shareholders of subchapter S
| 18 | | corporations, and owners of limited liability companies, if the | 19 | | liability
company is treated as a partnership for purposes of | 20 | | federal and State income
taxation, there shall be allowed a | 21 | | credit under this subsection (j) to be
determined in accordance | 22 | | with the determination of income and distributive
share of | 23 | | income under Sections 702 and 704 and subchapter S of the | 24 | | Internal
Revenue Code. | 25 | | Any credit allowed under this subsection which is unused in | 26 | | the year
the credit is earned may be carried forward to each of |
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| 1 | | the 5 taxable
years following the year for which the credit is | 2 | | first computed until it is
used. This credit shall be applied | 3 | | first to the earliest year for which
there is a liability. If | 4 | | there is a credit under this subsection from more
than one tax | 5 | | year that is available to offset a liability the earliest
| 6 | | credit arising under this subsection shall be applied first. No | 7 | | carryforward
credit may be claimed in any tax year ending on or | 8 | | after
December 31, 2003. | 9 | | (k) Research and development credit. | 10 | | For tax years ending after July 1, 1990 and prior to
| 11 | | December 31, 2003, and beginning again for tax years ending on | 12 | | or after December 31, 2004, and ending prior to January 1, | 13 | | 2011, a taxpayer shall be
allowed a credit against the tax | 14 | | imposed by subsections (a) and (b) of this
Section for | 15 | | increasing research activities in this State. The credit
| 16 | | allowed against the tax imposed by subsections (a) and (b) | 17 | | shall be equal
to 6 1/2% of the qualifying expenditures for | 18 | | increasing research activities
in this State. For partners, | 19 | | shareholders of subchapter S corporations, and
owners of | 20 | | limited liability companies, if the liability company is | 21 | | treated as a
partnership for purposes of federal and State | 22 | | income taxation, there shall be
allowed a credit under this | 23 | | subsection to be determined in accordance with the
| 24 | | determination of income and distributive share of income under | 25 | | Sections 702 and
704 and subchapter S of the Internal Revenue | 26 | | Code. |
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| 1 | | For purposes of this subsection, "qualifying expenditures" | 2 | | means the
qualifying expenditures as defined for the federal | 3 | | credit for increasing
research activities which would be | 4 | | allowable under Section 41 of the
Internal Revenue Code and | 5 | | which are conducted in this State, "qualifying
expenditures for | 6 | | increasing research activities in this State" means the
excess | 7 | | of qualifying expenditures for the taxable year in which | 8 | | incurred
over qualifying expenditures for the base period, | 9 | | "qualifying expenditures
for the base period" means the average | 10 | | of the qualifying expenditures for
each year in the base | 11 | | period, and "base period" means the 3 taxable years
immediately | 12 | | preceding the taxable year for which the determination is
being | 13 | | made. | 14 | | Any credit in excess of the tax liability for the taxable | 15 | | year
may be carried forward. A taxpayer may elect to have the
| 16 | | unused credit shown on its final completed return carried over | 17 | | as a credit
against the tax liability for the following 5 | 18 | | taxable years or until it has
been fully used, whichever occurs | 19 | | first; provided that no credit earned in a tax year ending | 20 | | prior to December 31, 2003 may be carried forward to any year | 21 | | ending on or after December 31, 2003, and no credit may be | 22 | | carried forward to any taxable year ending on or after January | 23 | | 1, 2011. | 24 | | If an unused credit is carried forward to a given year from | 25 | | 2 or more
earlier years, that credit arising in the earliest | 26 | | year will be applied
first against the tax liability for the |
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| 1 | | given year. If a tax liability for
the given year still | 2 | | remains, the credit from the next earliest year will
then be | 3 | | applied, and so on, until all credits have been used or no tax
| 4 | | liability for the given year remains. Any remaining unused | 5 | | credit or
credits then will be carried forward to the next | 6 | | following year in which a
tax liability is incurred, except | 7 | | that no credit can be carried forward to
a year which is more | 8 | | than 5 years after the year in which the expense for
which the | 9 | | credit is given was incurred. | 10 | | No inference shall be drawn from this amendatory Act of the | 11 | | 91st General
Assembly in construing this Section for taxable | 12 | | years beginning before January
1, 1999. | 13 | | (l) Environmental Remediation Tax Credit. | 14 | | (i) For tax years ending after December 31, 1997 and on | 15 | | or before
December 31, 2001, a taxpayer shall be allowed a | 16 | | credit against the tax
imposed by subsections (a) and (b) | 17 | | of this Section for certain amounts paid
for unreimbursed | 18 | | eligible remediation costs, as specified in this | 19 | | subsection.
For purposes of this Section, "unreimbursed | 20 | | eligible remediation costs" means
costs approved by the | 21 | | Illinois Environmental Protection Agency ("Agency") under
| 22 | | Section 58.14 of the Environmental Protection Act that were | 23 | | paid in performing
environmental remediation at a site for | 24 | | which a No Further Remediation Letter
was issued by the | 25 | | Agency and recorded under Section 58.10 of the | 26 | | Environmental
Protection Act. The credit must be claimed |
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| 1 | | for the taxable year in which
Agency approval of the | 2 | | eligible remediation costs is granted. The credit is
not | 3 | | available to any taxpayer if the taxpayer or any related | 4 | | party caused or
contributed to, in any material respect, a | 5 | | release of regulated substances on,
in, or under the site | 6 | | that was identified and addressed by the remedial
action | 7 | | pursuant to the Site Remediation Program of the | 8 | | Environmental Protection
Act. After the Pollution Control | 9 | | Board rules are adopted pursuant to the
Illinois | 10 | | Administrative Procedure Act for the administration and | 11 | | enforcement of
Section 58.9 of the Environmental | 12 | | Protection Act, determinations as to credit
availability | 13 | | for purposes of this Section shall be made consistent with | 14 | | those
rules. For purposes of this Section, "taxpayer" | 15 | | includes a person whose tax
attributes the taxpayer has | 16 | | succeeded to under Section 381 of the Internal
Revenue Code | 17 | | and "related party" includes the persons disallowed a | 18 | | deduction
for losses by paragraphs (b), (c), and (f)(1) of | 19 | | Section 267 of the Internal
Revenue Code by virtue of being | 20 | | a related taxpayer, as well as any of its
partners. The | 21 | | credit allowed against the tax imposed by subsections (a) | 22 | | and
(b) shall be equal to 25% of the unreimbursed eligible | 23 | | remediation costs in
excess of $100,000 per site, except | 24 | | that the $100,000 threshold shall not apply
to any site | 25 | | contained in an enterprise zone as determined by the | 26 | | Department of
Commerce and Community Affairs (now |
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| 1 | | Department of Commerce and Economic Opportunity). The | 2 | | total credit allowed shall not exceed
$40,000 per year with | 3 | | a maximum total of $150,000 per site. For partners and
| 4 | | shareholders of subchapter S corporations, there shall be | 5 | | allowed a credit
under this subsection to be determined in | 6 | | accordance with the determination of
income and | 7 | | distributive share of income under Sections 702 and 704 and
| 8 | | subchapter S of the Internal Revenue Code. | 9 | | (ii) A credit allowed under this subsection that is | 10 | | unused in the year
the credit is earned may be carried | 11 | | forward to each of the 5 taxable years
following the year | 12 | | for which the credit is first earned until it is used.
The | 13 | | term "unused credit" does not include any amounts of | 14 | | unreimbursed eligible
remediation costs in excess of the | 15 | | maximum credit per site authorized under
paragraph (i). | 16 | | This credit shall be applied first to the earliest year
for | 17 | | which there is a liability. If there is a credit under this | 18 | | subsection
from more than one tax year that is available to | 19 | | offset a liability, the
earliest credit arising under this | 20 | | subsection shall be applied first. A
credit allowed under | 21 | | this subsection may be sold to a buyer as part of a sale
of | 22 | | all or part of the remediation site for which the credit | 23 | | was granted. The
purchaser of a remediation site and the | 24 | | tax credit shall succeed to the unused
credit and remaining | 25 | | carry-forward period of the seller. To perfect the
| 26 | | transfer, the assignor shall record the transfer in the |
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| 1 | | chain of title for the
site and provide written notice to | 2 | | the Director of the Illinois Department of
Revenue of the | 3 | | assignor's intent to sell the remediation site and the | 4 | | amount of
the tax credit to be transferred as a portion of | 5 | | the sale. In no event may a
credit be transferred to any | 6 | | taxpayer if the taxpayer or a related party would
not be | 7 | | eligible under the provisions of subsection (i). | 8 | | (iii) For purposes of this Section, the term "site" | 9 | | shall have the same
meaning as under Section 58.2 of the | 10 | | Environmental Protection Act. | 11 | | (m) Education expense credit. Beginning with tax years | 12 | | ending after
December 31, 1999, a taxpayer who
is the custodian | 13 | | of one or more qualifying pupils shall be allowed a credit
| 14 | | against the tax imposed by subsections (a) and (b) of this | 15 | | Section for
qualified education expenses incurred on behalf of | 16 | | the qualifying pupils.
The credit shall be equal to 25% of | 17 | | qualified education expenses, but in no
event may the total | 18 | | credit under this subsection claimed by a
family that is the
| 19 | | custodian of qualifying pupils exceed $500. In no event shall a | 20 | | credit under
this subsection reduce the taxpayer's liability | 21 | | under this Act to less than
zero. This subsection is exempt | 22 | | from the provisions of Section 250 of this
Act. | 23 | | For purposes of this subsection: | 24 | | "Qualifying pupils" means individuals who (i) are | 25 | | residents of the State of
Illinois, (ii) are under the age of | 26 | | 21 at the close of the school year for
which a credit is |
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| 1 | | sought, and (iii) during the school year for which a credit
is | 2 | | sought were full-time pupils enrolled in a kindergarten through | 3 | | twelfth
grade education program at any school, as defined in | 4 | | this subsection. | 5 | | "Qualified education expense" means the amount incurred
on | 6 | | behalf of a qualifying pupil in excess of $250 for tuition, | 7 | | book fees, and
lab fees at the school in which the pupil is | 8 | | enrolled during the regular school
year. | 9 | | "School" means any public or nonpublic elementary or | 10 | | secondary school in
Illinois that is in compliance with Title | 11 | | VI of the Civil Rights Act of 1964
and attendance at which | 12 | | satisfies the requirements of Section 26-1 of the
School Code, | 13 | | except that nothing shall be construed to require a child to
| 14 | | attend any particular public or nonpublic school to qualify for | 15 | | the credit
under this Section. | 16 | | "Custodian" means, with respect to qualifying pupils, an | 17 | | Illinois resident
who is a parent, the parents, a legal | 18 | | guardian, or the legal guardians of the
qualifying pupils. | 19 | | (n) River Edge Redevelopment Zone site remediation tax | 20 | | credit.
| 21 | | (i) For tax years ending on or after December 31, 2006, | 22 | | a taxpayer shall be allowed a credit against the tax | 23 | | imposed by subsections (a) and (b) of this Section for | 24 | | certain amounts paid for unreimbursed eligible remediation | 25 | | costs, as specified in this subsection. For purposes of | 26 | | this Section, "unreimbursed eligible remediation costs" |
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| 1 | | means costs approved by the Illinois Environmental | 2 | | Protection Agency ("Agency") under Section 58.14a of the | 3 | | Environmental Protection Act that were paid in performing | 4 | | environmental remediation at a site within a River Edge | 5 | | Redevelopment Zone for which a No Further Remediation | 6 | | Letter was issued by the Agency and recorded under Section | 7 | | 58.10 of the Environmental Protection Act. The credit must | 8 | | be claimed for the taxable year in which Agency approval of | 9 | | the eligible remediation costs is granted. The credit is | 10 | | not available to any taxpayer if the taxpayer or any | 11 | | related party caused or contributed to, in any material | 12 | | respect, a release of regulated substances on, in, or under | 13 | | the site that was identified and addressed by the remedial | 14 | | action pursuant to the Site Remediation Program of the | 15 | | Environmental Protection Act. Determinations as to credit | 16 | | availability for purposes of this Section shall be made | 17 | | consistent with rules adopted by the Pollution Control | 18 | | Board pursuant to the Illinois Administrative Procedure | 19 | | Act for the administration and enforcement of Section 58.9 | 20 | | of the Environmental Protection Act. For purposes of this | 21 | | Section, "taxpayer" includes a person whose tax attributes | 22 | | the taxpayer has succeeded to under Section 381 of the | 23 | | Internal Revenue Code and "related party" includes the | 24 | | persons disallowed a deduction for losses by paragraphs | 25 | | (b), (c), and (f)(1) of Section 267 of the Internal Revenue | 26 | | Code by virtue of being a related taxpayer, as well as any |
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| 1 | | of its partners. The credit allowed against the tax imposed | 2 | | by subsections (a) and (b) shall be equal to 25% of the | 3 | | unreimbursed eligible remediation costs in excess of | 4 | | $100,000 per site. | 5 | | (ii) A credit allowed under this subsection that is | 6 | | unused in the year the credit is earned may be carried | 7 | | forward to each of the 5 taxable years following the year | 8 | | for which the credit is first earned until it is used. This | 9 | | credit shall be applied first to the earliest year for | 10 | | which there is a liability. If there is a credit under this | 11 | | subsection from more than one tax year that is available to | 12 | | offset a liability, the earliest credit arising under this | 13 | | subsection shall be applied first. A credit allowed under | 14 | | this subsection may be sold to a buyer as part of a sale of | 15 | | all or part of the remediation site for which the credit | 16 | | was granted. The purchaser of a remediation site and the | 17 | | tax credit shall succeed to the unused credit and remaining | 18 | | carry-forward period of the seller. To perfect the | 19 | | transfer, the assignor shall record the transfer in the | 20 | | chain of title for the site and provide written notice to | 21 | | the Director of the Illinois Department of Revenue of the | 22 | | assignor's intent to sell the remediation site and the | 23 | | amount of the tax credit to be transferred as a portion of | 24 | | the sale. In no event may a credit be transferred to any | 25 | | taxpayer if the taxpayer or a related party would not be | 26 | | eligible under the provisions of subsection (i). |
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| 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 | | (Source: P.A. 96-115, eff. 7-31-09; 96-116, eff. 7-31-09; | 5 | | 96-937, eff. 6-23-10; 96-1000, eff. 7-2-10; 96-1496, eff. | 6 | | 1-13-11; 97-2, eff. 5-6-11.) | 7 | | (Text of Section after amendment by P.A. 97-636 ) | 8 | | Sec. 201. Tax Imposed. | 9 | | (a) In general. A tax measured by net income is hereby | 10 | | imposed on every
individual, corporation, trust and and estate | 11 | | for each taxable year ending
after July 31, 1969 on the | 12 | | privilege of earning or receiving income in or
as a resident of | 13 | | this State. Such tax shall be in addition to all other
| 14 | | occupation or privilege taxes imposed by this State or by any | 15 | | municipal
corporation or political subdivision thereof. | 16 | | (b) Rates. The tax imposed by subsection (a) of this | 17 | | Section shall be
determined as follows, except as adjusted by | 18 | | subsection (d-1): | 19 | | (1) In the case of an individual, trust or estate, for | 20 | | taxable years
ending prior to July 1, 1989, an amount equal | 21 | | to 2 1/2% of the taxpayer's
net income for the taxable | 22 | | year. | 23 | | (2) In the case of an individual, trust or estate, for | 24 | | taxable years
beginning prior to July 1, 1989 and ending | 25 | | after June 30, 1989, an amount
equal to the sum of (i) 2 |
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| 1 | | 1/2% of the taxpayer's net income for the period
prior to | 2 | | July 1, 1989, as calculated under Section 202.3, and (ii) | 3 | | 3% of the
taxpayer's net income for the period after June | 4 | | 30, 1989, as calculated
under Section 202.3. | 5 | | (3) In the case of an individual, trust or estate, for | 6 | | taxable years
beginning after June 30, 1989, and ending | 7 | | prior to January 1, 2011, an amount equal to 3% of the | 8 | | taxpayer's net
income for the taxable year. | 9 | | (4) In the case of an individual, trust, or estate, for | 10 | | taxable years beginning prior to January 1, 2011, and | 11 | | ending after December 31, 2010, an amount equal to the sum | 12 | | of (i) 3% of the taxpayer's net income for the period prior | 13 | | to January 1, 2011, as calculated under Section 202.5, and | 14 | | (ii) 5% of the taxpayer's net income for the period after | 15 | | December 31, 2010, as calculated under Section 202.5. | 16 | | (5) In the case of an individual, trust, or estate, for | 17 | | taxable years beginning on or after January 1, 2011, and | 18 | | ending prior to January 1, 2015, an amount equal to 5% of | 19 | | the taxpayer's net income for the taxable year. | 20 | | (5.1) In the case of an individual, trust, or estate, | 21 | | for taxable years beginning prior to January 1, 2015, and | 22 | | ending after December 31, 2014, an amount equal to the sum | 23 | | of (i) 5% of the taxpayer's net income for the period prior | 24 | | to January 1, 2015, as calculated under Section 202.5, and | 25 | | (ii) 3.75% of the taxpayer's net income for the period | 26 | | after December 31, 2014, as calculated under Section 202.5. |
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| 1 | | (5.2) In the case of an individual, trust, or estate, | 2 | | for taxable years beginning on or after January 1, 2015, | 3 | | and ending prior to January 1, 2025, an amount equal to | 4 | | 3.75% of the taxpayer's net income for the taxable year. | 5 | | (5.3) In the case of an individual, trust, or estate, | 6 | | for taxable years beginning prior to January 1, 2025, and | 7 | | ending after December 31, 2024, an amount equal to the sum | 8 | | of (i) 3.75% of the taxpayer's net income for the period | 9 | | prior to January 1, 2025, as calculated under Section | 10 | | 202.5, and (ii) 3.25% of the taxpayer's net income for the | 11 | | period after December 31, 2024, as calculated under Section | 12 | | 202.5. | 13 | | (5.4) In the case of an individual, trust, or estate, | 14 | | for taxable years beginning on or after January 1, 2025, an | 15 | | amount equal to 3.25% of the taxpayer's net income for the | 16 | | taxable year. | 17 | | (6) In the case of a corporation, for taxable years
| 18 | | ending prior to July 1, 1989, an amount equal to 4% of the
| 19 | | taxpayer's net income for the taxable year. | 20 | | (7) In the case of a corporation, for taxable years | 21 | | beginning prior to
July 1, 1989 and ending after June 30, | 22 | | 1989, an amount equal to the sum of
(i) 4% of the | 23 | | taxpayer's net income for the period prior to July 1, 1989,
| 24 | | as calculated under Section 202.3, and (ii) 4.8% of the | 25 | | taxpayer's net
income for the period after June 30, 1989, | 26 | | as calculated under Section
202.3. |
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| 1 | | (8) In the case of a corporation, for taxable years | 2 | | beginning after
June 30, 1989, and ending prior to January | 3 | | 1, 2011, an amount equal to 4.8% of the taxpayer's net | 4 | | income for the
taxable year. | 5 | | (9) In the case of a corporation, for taxable years | 6 | | beginning prior to January 1, 2011, and ending after | 7 | | December 31, 2010, an amount equal to the sum of (i) 4.8% | 8 | | of the taxpayer's net income for the period prior to | 9 | | January 1, 2011, as calculated under Section 202.5, and | 10 | | (ii) 7% of the taxpayer's net income for the period after | 11 | | December 31, 2010, as calculated under Section 202.5. | 12 | | (10) In the case of a corporation, for taxable years | 13 | | beginning on or after January 1, 2011, and ending prior to | 14 | | January 1, 2015, an amount equal to 7% of the taxpayer's | 15 | | net income for the taxable year. | 16 | | (11) In the case of a corporation, for taxable years | 17 | | beginning prior to January 1, 2015, and ending after | 18 | | December 31, 2014, an amount equal to the sum of (i) 7% of | 19 | | the taxpayer's net income for the period prior to January | 20 | | 1, 2015, as calculated under Section 202.5, and (ii) 5.25% | 21 | | of the taxpayer's net income for the period after December | 22 | | 31, 2014, as calculated under Section 202.5. | 23 | | (12) In the case of a corporation, for taxable years | 24 | | beginning on or after January 1, 2015, and ending prior to | 25 | | January 1, 2025, an amount equal to 5.25% of the taxpayer's | 26 | | net income for the taxable year. |
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| 1 | | (13) In the case of a corporation, for taxable years | 2 | | beginning prior to January 1, 2025, and ending after | 3 | | December 31, 2024, an amount equal to the sum of (i) 5.25% | 4 | | of the taxpayer's net income for the period prior to | 5 | | January 1, 2025, as calculated under Section 202.5, and | 6 | | (ii) 4.8% of the taxpayer's net income for the period after | 7 | | December 31, 2024, as calculated under Section 202.5. | 8 | | (14) In the case of a corporation, for taxable years | 9 | | beginning on or after January 1, 2025, an amount equal to | 10 | | 4.8% of the taxpayer's net income for the taxable year. | 11 | | The rates under this subsection (b) are subject to the | 12 | | provisions of Section 201.5. | 13 | | (c) Personal Property Tax Replacement Income Tax.
| 14 | | Beginning on July 1, 1979 and thereafter, in addition to such | 15 | | income
tax, there is also hereby imposed the Personal Property | 16 | | Tax Replacement
Income Tax measured by net income on every | 17 | | corporation (including Subchapter
S corporations), partnership | 18 | | and trust, for each taxable year ending after
June 30, 1979. | 19 | | Such taxes are imposed on the privilege of earning or
receiving | 20 | | income in or as a resident of this State. The Personal Property
| 21 | | Tax Replacement Income Tax shall be in addition to the income | 22 | | tax imposed
by subsections (a) and (b) of this Section and in | 23 | | addition to all other
occupation or privilege taxes imposed by | 24 | | this State or by any municipal
corporation or political | 25 | | subdivision thereof. | 26 | | (d) Additional Personal Property Tax Replacement Income |
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| 1 | | Tax Rates.
The personal property tax replacement income tax | 2 | | imposed by this subsection
and subsection (c) of this Section | 3 | | in the case of a corporation, other
than a Subchapter S | 4 | | corporation and except as adjusted by subsection (d-1),
shall | 5 | | be an additional amount equal to
2.85% of such taxpayer's net | 6 | | income for the taxable year, except that
beginning on January | 7 | | 1, 1981, and thereafter, the rate of 2.85% specified
in this | 8 | | subsection shall be reduced to 2.5%, and in the case of a
| 9 | | partnership, trust or a Subchapter S corporation shall be an | 10 | | additional
amount equal to 1.5% of such taxpayer's net income | 11 | | for the taxable year. | 12 | | (d-1) Rate reduction for certain foreign insurers. In the | 13 | | case of a
foreign insurer, as defined by Section 35A-5 of the | 14 | | Illinois Insurance Code,
whose state or country of domicile | 15 | | imposes on insurers domiciled in Illinois
a retaliatory tax | 16 | | (excluding any insurer
whose premiums from reinsurance assumed | 17 | | are 50% or more of its total insurance
premiums as determined | 18 | | under paragraph (2) of subsection (b) of Section 304,
except | 19 | | that for purposes of this determination premiums from | 20 | | reinsurance do
not include premiums from inter-affiliate | 21 | | reinsurance arrangements),
beginning with taxable years ending | 22 | | on or after December 31, 1999,
the sum of
the rates of tax | 23 | | imposed by subsections (b) and (d) shall be reduced (but not
| 24 | | increased) to the rate at which the total amount of tax imposed | 25 | | under this Act,
net of all credits allowed under this Act, | 26 | | shall equal (i) the total amount of
tax that would be imposed |
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| 1 | | on the foreign insurer's net income allocable to
Illinois for | 2 | | the taxable year by such foreign insurer's state or country of
| 3 | | domicile if that net income were subject to all income taxes | 4 | | and taxes
measured by net income imposed by such foreign | 5 | | insurer's state or country of
domicile, net of all credits | 6 | | allowed or (ii) a rate of zero if no such tax is
imposed on such | 7 | | income by the foreign insurer's state of domicile.
For the | 8 | | purposes of this subsection (d-1), an inter-affiliate includes | 9 | | a
mutual insurer under common management. | 10 | | (1) For the purposes of subsection (d-1), in no event | 11 | | shall the sum of the
rates of tax imposed by subsections | 12 | | (b) and (d) be reduced below the rate at
which the sum of: | 13 | | (A) the total amount of tax imposed on such foreign | 14 | | insurer under
this Act for a taxable year, net of all | 15 | | credits allowed under this Act, plus | 16 | | (B) the privilege tax imposed by Section 409 of the | 17 | | Illinois Insurance
Code, the fire insurance company | 18 | | tax imposed by Section 12 of the Fire
Investigation | 19 | | Act, and the fire department taxes imposed under | 20 | | Section 11-10-1
of the Illinois Municipal Code, | 21 | | equals 1.25% for taxable years ending prior to December 31, | 22 | | 2003, or
1.75% for taxable years ending on or after | 23 | | December 31, 2003, of the net
taxable premiums written for | 24 | | the taxable year,
as described by subsection (1) of Section | 25 | | 409 of the Illinois Insurance Code.
This paragraph will in | 26 | | no event increase the rates imposed under subsections
(b) |
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| 1 | | and (d). | 2 | | (2) Any reduction in the rates of tax imposed by this | 3 | | subsection shall be
applied first against the rates imposed | 4 | | by subsection (b) and only after the
tax imposed by | 5 | | subsection (a) net of all credits allowed under this | 6 | | Section
other than the credit allowed under subsection (i) | 7 | | has been reduced to zero,
against the rates imposed by | 8 | | subsection (d). | 9 | | This subsection (d-1) is exempt from the provisions of | 10 | | Section 250. | 11 | | (e) Investment credit. A taxpayer shall be allowed a credit
| 12 | | against the Personal Property Tax Replacement Income Tax for
| 13 | | investment in qualified property. | 14 | | (1) A taxpayer shall be allowed a credit equal to .5% | 15 | | of
the basis of qualified property placed in service during | 16 | | the taxable year,
provided such property is placed in | 17 | | service on or after
July 1, 1984. There shall be allowed an | 18 | | additional credit equal
to .5% of the basis of qualified | 19 | | property placed in service during the
taxable year, | 20 | | provided such property is placed in service on or
after | 21 | | July 1, 1986, and the taxpayer's base employment
within | 22 | | Illinois has increased by 1% or more over the preceding | 23 | | year as
determined by the taxpayer's employment records | 24 | | filed with the
Illinois Department of Employment Security. | 25 | | Taxpayers who are new to
Illinois shall be deemed to have | 26 | | met the 1% growth in base employment for
the first year in |
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| 1 | | which they file employment records with the Illinois
| 2 | | Department of Employment Security. The provisions added to | 3 | | this Section by
Public Act 85-1200 (and restored by Public | 4 | | Act 87-895) shall be
construed as declaratory of existing | 5 | | law and not as a new enactment. If,
in any year, the | 6 | | increase in base employment within Illinois over the
| 7 | | preceding year is less than 1%, the additional credit shall | 8 | | be limited to that
percentage times a fraction, the | 9 | | numerator of which is .5% and the denominator
of which is | 10 | | 1%, but shall not exceed .5%. The investment credit shall | 11 | | not be
allowed to the extent that it would reduce a | 12 | | taxpayer's liability in any tax
year below zero, nor may | 13 | | any credit for qualified property be allowed for any
year | 14 | | other than the year in which the property was placed in | 15 | | service in
Illinois. For tax years ending on or after | 16 | | December 31, 1987, and on or
before December 31, 1988, the | 17 | | credit shall be allowed for the tax year in
which the | 18 | | property is placed in service, or, if the amount of the | 19 | | credit
exceeds the tax liability for that year, whether it | 20 | | exceeds the original
liability or the liability as later | 21 | | amended, such excess may be carried
forward and applied to | 22 | | the tax liability of the 5 taxable years following
the | 23 | | excess credit years if the taxpayer (i) makes investments | 24 | | which cause
the creation of a minimum of 2,000 full-time | 25 | | equivalent jobs in Illinois,
(ii) is located in an | 26 | | enterprise zone established pursuant to the Illinois
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| 1 | | Enterprise Zone Act and (iii) is certified by the | 2 | | Department of Commerce
and Community Affairs (now | 3 | | Department of Commerce and Economic Opportunity) as | 4 | | complying with the requirements specified in
clause (i) and | 5 | | (ii) by July 1, 1986. The Department of Commerce and
| 6 | | Community Affairs (now Department of Commerce and Economic | 7 | | Opportunity) shall notify the Department of Revenue of all | 8 | | such
certifications immediately. For tax years ending | 9 | | after December 31, 1988,
the credit shall be allowed for | 10 | | the tax year in which the property is
placed in service, | 11 | | or, if the amount of the credit exceeds the tax
liability | 12 | | for that year, whether it exceeds the original liability or | 13 | | the
liability as later amended, such excess may be carried | 14 | | forward and applied
to the tax liability of the 5 taxable | 15 | | years following the excess credit
years. The credit shall | 16 | | be applied to the earliest year for which there is
a | 17 | | liability. If there is credit from more than one tax year | 18 | | that is
available to offset a liability, earlier credit | 19 | | shall be applied first. | 20 | | (2) The term "qualified property" means property | 21 | | which: | 22 | | (A) is tangible, whether new or used, including | 23 | | buildings and structural
components of buildings and | 24 | | signs that are real property, but not including
land or | 25 | | improvements to real property that are not a structural | 26 | | component of a
building such as landscaping, sewer |
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| 1 | | lines, local access roads, fencing, parking
lots, and | 2 | | other appurtenances; | 3 | | (B) is depreciable pursuant to Section 167 of the | 4 | | Internal Revenue Code,
except that "3-year property" | 5 | | as defined in Section 168(c)(2)(A) of that
Code is not | 6 | | eligible for the credit provided by this subsection | 7 | | (e); | 8 | | (C) is acquired by purchase as defined in Section | 9 | | 179(d) of
the Internal Revenue Code; | 10 | | (D) is used in Illinois by a taxpayer who is | 11 | | primarily engaged in
manufacturing, or in mining coal | 12 | | or fluorite, or in retailing, or was placed in service | 13 | | on or after July 1, 2006 in a River Edge Redevelopment | 14 | | Zone established pursuant to the River Edge | 15 | | Redevelopment Zone Act; and | 16 | | (E) has not previously been used in Illinois in | 17 | | such a manner and by
such a person as would qualify for | 18 | | the credit provided by this subsection
(e) or | 19 | | subsection (f). | 20 | | (3) For purposes of this subsection (e), | 21 | | "manufacturing" means
the material staging and production | 22 | | of tangible personal property by
procedures commonly | 23 | | regarded as manufacturing, processing, fabrication, or
| 24 | | assembling which changes some existing material into new | 25 | | shapes, new
qualities, or new combinations. For purposes of | 26 | | this subsection
(e) the term "mining" shall have the same |
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| 1 | | meaning as the term "mining" in
Section 613(c) of the | 2 | | Internal Revenue Code. For purposes of this subsection
(e), | 3 | | the term "retailing" means the sale of tangible personal | 4 | | property for use or consumption and not for resale, or
| 5 | | services rendered in conjunction with the sale of tangible | 6 | | personal property for use or consumption and not for | 7 | | resale. For purposes of this subsection (e), "tangible | 8 | | personal property" has the same meaning as when that term | 9 | | is used in the Retailers' Occupation Tax Act, and, for | 10 | | taxable years ending after December 31, 2008, does not | 11 | | include the generation, transmission, or distribution of | 12 | | electricity. | 13 | | (4) The basis of qualified property shall be the basis
| 14 | | used to compute the depreciation deduction for federal | 15 | | income tax purposes. | 16 | | (5) If the basis of the property for federal income tax | 17 | | depreciation
purposes is increased after it has been placed | 18 | | in service in Illinois by
the taxpayer, the amount of such | 19 | | increase shall be deemed property placed
in service on the | 20 | | date of such increase in basis. | 21 | | (6) The term "placed in service" shall have the same
| 22 | | meaning as under Section 46 of the Internal Revenue Code. | 23 | | (7) If during any taxable year, any property ceases to
| 24 | | be qualified property in the hands of the taxpayer within | 25 | | 48 months after
being placed in service, or the situs of | 26 | | any qualified property is
moved outside Illinois within 48 |
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| 1 | | months after being placed in service, the
Personal Property | 2 | | Tax Replacement Income Tax for such taxable year shall be
| 3 | | increased. Such increase shall be determined by (i) | 4 | | recomputing the
investment credit which would have been | 5 | | allowed for the year in which
credit for such property was | 6 | | originally allowed by eliminating such
property from such | 7 | | computation and, (ii) subtracting such recomputed credit
| 8 | | from the amount of credit previously allowed. For the | 9 | | purposes of this
paragraph (7), a reduction of the basis of | 10 | | qualified property resulting
from a redetermination of the | 11 | | purchase price shall be deemed a disposition
of qualified | 12 | | property to the extent of such reduction. | 13 | | (8) Unless the investment credit is extended by law, | 14 | | the
basis of qualified property shall not include costs | 15 | | incurred after
December 31, 2018, except for costs incurred | 16 | | pursuant to a binding
contract entered into on or before | 17 | | December 31, 2018. | 18 | | (9) Each taxable year ending before December 31, 2000, | 19 | | a partnership may
elect to pass through to its
partners the | 20 | | credits to which the partnership is entitled under this | 21 | | subsection
(e) for the taxable year. A partner may use the | 22 | | credit allocated to him or her
under this paragraph only | 23 | | against the tax imposed in subsections (c) and (d) of
this | 24 | | Section. If the partnership makes that election, those | 25 | | credits shall be
allocated among the partners in the | 26 | | partnership in accordance with the rules
set forth in |
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| 1 | | Section 704(b) of the Internal Revenue Code, and the rules
| 2 | | promulgated under that Section, and the allocated amount of | 3 | | the credits shall
be allowed to the partners for that | 4 | | taxable year. The partnership shall make
this election on | 5 | | its Personal Property Tax Replacement Income Tax return for
| 6 | | that taxable year. The election to pass through the credits | 7 | | shall be
irrevocable. | 8 | | For taxable years ending on or after December 31, 2000, | 9 | | a
partner that qualifies its
partnership for a subtraction | 10 | | under subparagraph (I) of paragraph (2) of
subsection (d) | 11 | | of Section 203 or a shareholder that qualifies a Subchapter | 12 | | S
corporation for a subtraction under subparagraph (S) of | 13 | | paragraph (2) of
subsection (b) of Section 203 shall be | 14 | | allowed a credit under this subsection
(e) equal to its | 15 | | share of the credit earned under this subsection (e) during
| 16 | | the taxable year by the partnership or Subchapter S | 17 | | corporation, determined in
accordance with the | 18 | | determination of income and distributive share of
income | 19 | | under Sections 702 and 704 and Subchapter S of the Internal | 20 | | Revenue
Code. This paragraph is exempt from the provisions | 21 | | of Section 250. | 22 | | (f) Investment credit; Enterprise Zone; River Edge | 23 | | Redevelopment Zone. | 24 | | (1) A taxpayer shall be allowed a credit against the | 25 | | tax imposed
by subsections (a) and (b) of this Section for | 26 | | investment in qualified
property which is placed in service |
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| 1 | | in an Enterprise Zone created
pursuant to the Illinois | 2 | | Enterprise Zone Act or, for property placed in service on | 3 | | or after July 1, 2006, a River Edge Redevelopment Zone | 4 | | established pursuant to the River Edge Redevelopment Zone | 5 | | Act. For partners, shareholders
of Subchapter S | 6 | | corporations, and owners of limited liability companies,
| 7 | | if the liability company is treated as a partnership for | 8 | | purposes of
federal and State income taxation, there shall | 9 | | be allowed a credit under
this subsection (f) to be | 10 | | determined in accordance with the determination
of income | 11 | | and distributive share of income under Sections 702 and 704 | 12 | | and
Subchapter S of the Internal Revenue Code. The credit | 13 | | shall be .5% of the
basis for such property. The credit | 14 | | shall be available only in the taxable
year in which the | 15 | | property is placed in service in the Enterprise Zone or | 16 | | River Edge Redevelopment Zone and
shall not be allowed to | 17 | | the extent that it would reduce a taxpayer's
liability for | 18 | | the tax imposed by subsections (a) and (b) of this Section | 19 | | to
below zero. For tax years ending on or after December | 20 | | 31, 1985, the credit
shall be allowed for the tax year in | 21 | | which the property is placed in
service, or, if the amount | 22 | | of the credit exceeds the tax liability for that
year, | 23 | | whether it exceeds the original liability or the liability | 24 | | as later
amended, such excess may be carried forward and | 25 | | applied to the tax
liability of the 5 taxable years | 26 | | following the excess credit year.
The credit shall be |
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| 1 | | applied to the earliest year for which there is a
| 2 | | liability. If there is credit from more than one tax year | 3 | | that is available
to offset a liability, the credit | 4 | | accruing first in time shall be applied
first. | 5 | | (2) The term qualified property means property which: | 6 | | (A) is tangible, whether new or used, including | 7 | | buildings and
structural components of buildings; | 8 | | (B) is depreciable pursuant to Section 167 of the | 9 | | Internal Revenue
Code, except that "3-year property" | 10 | | as defined in Section 168(c)(2)(A) of
that Code is not | 11 | | eligible for the credit provided by this subsection | 12 | | (f); | 13 | | (C) is acquired by purchase as defined in Section | 14 | | 179(d) of
the Internal Revenue Code; | 15 | | (D) is used in the Enterprise Zone or River Edge | 16 | | Redevelopment Zone by the taxpayer; and | 17 | | (E) has not been previously used in Illinois in | 18 | | such a manner and by
such a person as would qualify for | 19 | | the credit provided by this subsection
(f) or | 20 | | subsection (e). | 21 | | (3) The basis of qualified property shall be the basis | 22 | | used to compute
the depreciation deduction for federal | 23 | | income tax purposes. | 24 | | (4) If the basis of the property for federal income tax | 25 | | depreciation
purposes is increased after it has been placed | 26 | | in service in the Enterprise
Zone or River Edge |
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| 1 | | Redevelopment Zone by the taxpayer, the amount of such | 2 | | increase shall be deemed property
placed in service on the | 3 | | date of such increase in basis. | 4 | | (5) The term "placed in service" shall have the same | 5 | | meaning as under
Section 46 of the Internal Revenue Code. | 6 | | (6) If during any taxable year, any property ceases to | 7 | | be qualified
property in the hands of the taxpayer within | 8 | | 48 months after being placed
in service, or the situs of | 9 | | any qualified property is moved outside the
Enterprise Zone | 10 | | or River Edge Redevelopment Zone within 48 months after | 11 | | being placed in service, the tax
imposed under subsections | 12 | | (a) and (b) of this Section for such taxable year
shall be | 13 | | increased. Such increase shall be determined by (i) | 14 | | recomputing
the investment credit which would have been | 15 | | allowed for the year in which
credit for such property was | 16 | | originally allowed by eliminating such
property from such | 17 | | computation, and (ii) subtracting such recomputed credit
| 18 | | from the amount of credit previously allowed. For the | 19 | | purposes of this
paragraph (6), a reduction of the basis of | 20 | | qualified property resulting
from a redetermination of the | 21 | | purchase price shall be deemed a disposition
of qualified | 22 | | property to the extent of such reduction. | 23 | | (7) There shall be allowed an additional credit equal | 24 | | to 0.5% of the basis of qualified property placed in | 25 | | service during the taxable year in a River Edge | 26 | | Redevelopment Zone, provided such property is placed in |
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| 1 | | service on or after July 1, 2006, and the taxpayer's base | 2 | | employment within Illinois has increased by 1% or more over | 3 | | the preceding year as determined by the taxpayer's | 4 | | employment records filed with the Illinois Department of | 5 | | Employment Security. Taxpayers who are new to Illinois | 6 | | shall be deemed to have met the 1% growth in base | 7 | | employment for the first year in which they file employment | 8 | | records with the Illinois Department of Employment | 9 | | Security. If, in any year, the increase in base employment | 10 | | within Illinois over the preceding year is less than 1%, | 11 | | the additional credit shall be limited to that percentage | 12 | | times a fraction, the numerator of which is 0.5% and the | 13 | | denominator of which is 1%, but shall not exceed 0.5%.
| 14 | | (g) Jobs Tax Credit; Enterprise Zone, River Edge | 15 | | Redevelopment Zone, and Foreign Trade Zone or Sub-Zone. | 16 | | (1) A taxpayer conducting a trade or business in an | 17 | | enterprise zone
or a High Impact Business designated by the | 18 | | Department of Commerce and
Economic Opportunity or for | 19 | | taxable years ending on or after December 31, 2006, in a | 20 | | River Edge Redevelopment Zone conducting a trade or | 21 | | business in a federally designated
Foreign Trade Zone or | 22 | | Sub-Zone shall be allowed a credit against the tax
imposed | 23 | | by subsections (a) and (b) of this Section in the amount of | 24 | | $500
per eligible employee hired to work in the zone during | 25 | | the taxable year. | 26 | | (2) To qualify for the credit: |
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| 1 | | (A) the taxpayer must hire 5 or more eligible | 2 | | employees to work in an
enterprise zone, River Edge | 3 | | Redevelopment Zone, or federally designated Foreign | 4 | | Trade Zone or Sub-Zone
during the taxable year; | 5 | | (B) the taxpayer's total employment within the | 6 | | enterprise zone, River Edge Redevelopment Zone, or
| 7 | | federally designated Foreign Trade Zone or Sub-Zone | 8 | | must
increase by 5 or more full-time employees beyond | 9 | | the total employed in that
zone at the end of the | 10 | | previous tax year for which a jobs tax
credit under | 11 | | this Section was taken, or beyond the total employed by | 12 | | the
taxpayer as of December 31, 1985, whichever is | 13 | | later; and | 14 | | (C) the eligible employees must be employed 180 | 15 | | consecutive days in
order to be deemed hired for | 16 | | purposes of this subsection. | 17 | | (3) An "eligible employee" means an employee who is: | 18 | | (A) Certified by the Department of Commerce and | 19 | | Economic Opportunity
as "eligible for services" | 20 | | pursuant to regulations promulgated in
accordance with | 21 | | Title II of the Job Training Partnership Act, Training
| 22 | | Services for the Disadvantaged or Title III of the Job | 23 | | Training Partnership
Act, Employment and Training | 24 | | Assistance for Dislocated Workers Program. | 25 | | (B) Hired after the enterprise zone, River Edge | 26 | | Redevelopment Zone, or federally designated Foreign
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| 1 | | Trade Zone or Sub-Zone was designated or the trade or
| 2 | | business was located in that zone, whichever is later. | 3 | | (C) Employed in the enterprise zone, River Edge | 4 | | Redevelopment Zone, or Foreign Trade Zone or
Sub-Zone. | 5 | | An employee is employed in an
enterprise zone or | 6 | | federally designated Foreign Trade Zone or Sub-Zone
if | 7 | | his services are rendered there or it is the base of
| 8 | | operations for the services performed. | 9 | | (D) A full-time employee working 30 or more hours | 10 | | per week. | 11 | | (4) For tax years ending on or after December 31, 1985 | 12 | | and prior to
December 31, 1988, the credit shall be allowed | 13 | | for the tax year in which
the eligible employees are hired. | 14 | | For tax years ending on or after
December 31, 1988, the | 15 | | credit shall be allowed for the tax year immediately
| 16 | | following the tax year in which the eligible employees are | 17 | | hired. If the
amount of the credit exceeds the tax | 18 | | liability for that year, whether it
exceeds the original | 19 | | liability or the liability as later amended, such
excess | 20 | | may be carried forward and applied to the tax liability of | 21 | | the 5
taxable years following the excess credit year. The | 22 | | credit shall be
applied to the earliest year for which | 23 | | there is a liability. If there is
credit from more than one | 24 | | tax year that is available to offset a liability,
earlier | 25 | | credit shall be applied first. | 26 | | (5) The Department of Revenue shall promulgate such |
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| 1 | | rules and regulations
as may be deemed necessary to carry | 2 | | out the purposes of this subsection (g). | 3 | | (6) The credit shall be available for eligible | 4 | | employees hired on or
after January 1, 1986. | 5 | | (h) Investment credit; High Impact Business. | 6 | | (1) Subject to subsections (b) and (b-5) of Section
5.5 | 7 | | of the Illinois Enterprise Zone Act, a taxpayer shall be | 8 | | allowed a credit
against the tax imposed by subsections (a) | 9 | | and (b) of this Section for
investment in qualified
| 10 | | property which is placed in service by a Department of | 11 | | Commerce and Economic Opportunity
designated High Impact | 12 | | Business. The credit shall be .5% of the basis
for such | 13 | | property. The credit shall not be available (i) until the | 14 | | minimum
investments in qualified property set forth in | 15 | | subdivision (a)(3)(A) of
Section 5.5 of the Illinois
| 16 | | Enterprise Zone Act have been satisfied
or (ii) until the | 17 | | time authorized in subsection (b-5) of the Illinois
| 18 | | Enterprise Zone Act for entities designated as High Impact | 19 | | Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and | 20 | | (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone | 21 | | Act, and shall not be allowed to the extent that it would
| 22 | | reduce a taxpayer's liability for the tax imposed by | 23 | | subsections (a) and (b) of
this Section to below zero. The | 24 | | credit applicable to such investments shall be
taken in the | 25 | | taxable year in which such investments have been completed. | 26 | | The
credit for additional investments beyond the minimum |
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| 1 | | investment by a designated
high impact business authorized | 2 | | under subdivision (a)(3)(A) of Section 5.5 of
the Illinois | 3 | | Enterprise Zone Act shall be available only in the taxable | 4 | | year in
which the property is placed in service and shall | 5 | | not be allowed to the extent
that it would reduce a | 6 | | taxpayer's liability for the tax imposed by subsections
(a) | 7 | | and (b) of this Section to below zero.
For tax years ending | 8 | | on or after December 31, 1987, the credit shall be
allowed | 9 | | for the tax year in which the property is placed in | 10 | | service, or, if
the amount of the credit exceeds the tax | 11 | | liability for that year, whether
it exceeds the original | 12 | | liability or the liability as later amended, such
excess | 13 | | may be carried forward and applied to the tax liability of | 14 | | the 5
taxable years following the excess credit year. The | 15 | | credit shall be
applied to the earliest year for which | 16 | | there is a liability. If there is
credit from more than one | 17 | | tax year that is available to offset a liability,
the | 18 | | credit accruing first in time shall be applied first. | 19 | | Changes made in this subdivision (h)(1) by Public Act | 20 | | 88-670
restore changes made by Public Act 85-1182 and | 21 | | reflect existing law. | 22 | | (2) The term qualified property means property which: | 23 | | (A) is tangible, whether new or used, including | 24 | | buildings and
structural components of buildings; | 25 | | (B) is depreciable pursuant to Section 167 of the | 26 | | Internal Revenue
Code, except that "3-year property" |
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| 1 | | as defined in Section 168(c)(2)(A) of
that Code is not | 2 | | eligible for the credit provided by this subsection | 3 | | (h); | 4 | | (C) is acquired by purchase as defined in Section | 5 | | 179(d) of the
Internal Revenue Code; and | 6 | | (D) is not eligible for the Enterprise Zone | 7 | | Investment Credit provided
by subsection (f) of this | 8 | | Section. | 9 | | (3) The basis of qualified property shall be the basis | 10 | | used to compute
the depreciation deduction for federal | 11 | | income tax purposes. | 12 | | (4) If the basis of the property for federal income tax | 13 | | depreciation
purposes is increased after it has been placed | 14 | | in service in a federally
designated Foreign Trade Zone or | 15 | | Sub-Zone located in Illinois by the taxpayer,
the amount of | 16 | | such increase shall be deemed property placed in service on
| 17 | | the date of such increase in basis. | 18 | | (5) The term "placed in service" shall have the same | 19 | | meaning as under
Section 46 of the Internal Revenue Code. | 20 | | (6) If during any taxable year ending on or before | 21 | | December 31, 1996,
any property ceases to be qualified
| 22 | | property in the hands of the taxpayer within 48 months | 23 | | after being placed
in service, or the situs of any | 24 | | qualified property is moved outside
Illinois within 48 | 25 | | months after being placed in service, the tax imposed
under | 26 | | subsections (a) and (b) of this Section for such taxable |
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| 1 | | year shall
be increased. Such increase shall be determined | 2 | | by (i) recomputing the
investment credit which would have | 3 | | been allowed for the year in which
credit for such property | 4 | | was originally allowed by eliminating such
property from | 5 | | such computation, and (ii) subtracting such recomputed | 6 | | credit
from the amount of credit previously allowed. For | 7 | | the purposes of this
paragraph (6), a reduction of the | 8 | | basis of qualified property resulting
from a | 9 | | redetermination of the purchase price shall be deemed a | 10 | | disposition
of qualified property to the extent of such | 11 | | reduction. | 12 | | (7) Beginning with tax years ending after December 31, | 13 | | 1996, if a
taxpayer qualifies for the credit under this | 14 | | subsection (h) and thereby is
granted a tax abatement and | 15 | | the taxpayer relocates its entire facility in
violation of | 16 | | the explicit terms and length of the contract under Section
| 17 | | 18-183 of the Property Tax Code, the tax imposed under | 18 | | subsections
(a) and (b) of this Section shall be increased | 19 | | for the taxable year
in which the taxpayer relocated its | 20 | | facility by an amount equal to the
amount of credit | 21 | | received by the taxpayer under this subsection (h). | 22 | | (i) Credit for Personal Property Tax Replacement Income | 23 | | Tax.
For tax years ending prior to December 31, 2003, a credit | 24 | | shall be allowed
against the tax imposed by
subsections (a) and | 25 | | (b) of this Section for the tax imposed by subsections (c)
and | 26 | | (d) of this Section. This credit shall be computed by |
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| 1 | | multiplying the tax
imposed by subsections (c) and (d) of this | 2 | | Section by a fraction, the numerator
of which is base income | 3 | | allocable to Illinois and the denominator of which is
Illinois | 4 | | base income, and further multiplying the product by the tax | 5 | | rate
imposed by subsections (a) and (b) of this Section. | 6 | | Any credit earned on or after December 31, 1986 under
this | 7 | | subsection which is unused in the year
the credit is computed | 8 | | because it exceeds the tax liability imposed by
subsections (a) | 9 | | and (b) for that year (whether it exceeds the original
| 10 | | liability or the liability as later amended) may be carried | 11 | | forward and
applied to the tax liability imposed by subsections | 12 | | (a) and (b) of the 5
taxable years following the excess credit | 13 | | year, provided that no credit may
be carried forward to any | 14 | | year ending on or
after December 31, 2003. This credit shall be
| 15 | | applied first to the earliest year for which there is a | 16 | | liability. If
there is a credit under this subsection from more | 17 | | than one tax year that is
available to offset a liability the | 18 | | earliest credit arising under this
subsection shall be applied | 19 | | first. | 20 | | If, during any taxable year ending on or after December 31, | 21 | | 1986, the
tax imposed by subsections (c) and (d) of this | 22 | | Section for which a taxpayer
has claimed a credit under this | 23 | | subsection (i) is reduced, the amount of
credit for such tax | 24 | | shall also be reduced. Such reduction shall be
determined by | 25 | | recomputing the credit to take into account the reduced tax
| 26 | | imposed by subsections (c) and (d). If any portion of the
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| 1 | | reduced amount of credit has been carried to a different | 2 | | taxable year, an
amended return shall be filed for such taxable | 3 | | year to reduce the amount of
credit claimed. | 4 | | (j) Training expense credit. Beginning with tax years | 5 | | ending on or
after December 31, 1986 and prior to December 31, | 6 | | 2003, a taxpayer shall be
allowed a credit against the
tax | 7 | | imposed by subsections (a) and (b) under this Section
for all | 8 | | amounts paid or accrued, on behalf of all persons
employed by | 9 | | the taxpayer in Illinois or Illinois residents employed
outside | 10 | | of Illinois by a taxpayer, for educational or vocational | 11 | | training in
semi-technical or technical fields or semi-skilled | 12 | | or skilled fields, which
were deducted from gross income in the | 13 | | computation of taxable income. The
credit against the tax | 14 | | imposed by subsections (a) and (b) shall be 1.6% of
such | 15 | | training expenses. For partners, shareholders of subchapter S
| 16 | | corporations, and owners of limited liability companies, if the | 17 | | liability
company is treated as a partnership for purposes of | 18 | | federal and State income
taxation, there shall be allowed a | 19 | | credit under this subsection (j) to be
determined in accordance | 20 | | with the determination of income and distributive
share of | 21 | | income under Sections 702 and 704 and subchapter S of the | 22 | | Internal
Revenue Code. | 23 | | Any credit allowed under this subsection which is unused in | 24 | | the year
the credit is earned may be carried forward to each of | 25 | | the 5 taxable
years following the year for which the credit is | 26 | | first computed until it is
used. This credit shall be applied |
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| 1 | | first to the earliest year for which
there is a liability. If | 2 | | there is a credit under this subsection from more
than one tax | 3 | | year that is available to offset a liability the earliest
| 4 | | credit arising under this subsection shall be applied first. No | 5 | | carryforward
credit may be claimed in any tax year ending on or | 6 | | after
December 31, 2003. | 7 | | (k) Research and development credit. | 8 | | For tax years ending after July 1, 1990 and prior to
| 9 | | December 31, 2003, and beginning again for tax years ending on | 10 | | or after December 31, 2004, and ending prior to January 1, | 11 | | 2016, a taxpayer shall be
allowed a credit against the tax | 12 | | imposed by subsections (a) and (b) of this
Section for | 13 | | increasing research activities in this State. The credit
| 14 | | allowed against the tax imposed by subsections (a) and (b) | 15 | | shall be equal
to 6 1/2% of the qualifying expenditures for | 16 | | increasing research activities
in this State. For partners, | 17 | | shareholders of subchapter S corporations, and
owners of | 18 | | limited liability companies, if the liability company is | 19 | | treated as a
partnership for purposes of federal and State | 20 | | income taxation, there shall be
allowed a credit under this | 21 | | subsection to be determined in accordance with the
| 22 | | determination of income and distributive share of income under | 23 | | Sections 702 and
704 and subchapter S of the Internal Revenue | 24 | | Code. | 25 | | For purposes of this subsection, "qualifying expenditures" | 26 | | means the
qualifying expenditures as defined for the federal |
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| 1 | | credit for increasing
research activities which would be | 2 | | allowable under Section 41 of the
Internal Revenue Code and | 3 | | which are conducted in this State, "qualifying
expenditures for | 4 | | increasing research activities in this State" means the
excess | 5 | | of qualifying expenditures for the taxable year in which | 6 | | incurred
over qualifying expenditures for the base period, | 7 | | "qualifying expenditures
for the base period" means the average | 8 | | of the qualifying expenditures for
each year in the base | 9 | | period, and "base period" means the 3 taxable years
immediately | 10 | | preceding the taxable year for which the determination is
being | 11 | | made. | 12 | | Any credit in excess of the tax liability for the taxable | 13 | | year
may be carried forward. A taxpayer may elect to have the
| 14 | | unused credit shown on its final completed return carried over | 15 | | as a credit
against the tax liability for the following 5 | 16 | | taxable years or until it has
been fully used, whichever occurs | 17 | | first; provided that no credit earned in a tax year ending | 18 | | prior to December 31, 2003 may be carried forward to any year | 19 | | ending on or after December 31, 2003. | 20 | | If an unused credit is carried forward to a given year from | 21 | | 2 or more
earlier years, that credit arising in the earliest | 22 | | year will be applied
first against the tax liability for the | 23 | | given year. If a tax liability for
the given year still | 24 | | remains, the credit from the next earliest year will
then be | 25 | | applied, and so on, until all credits have been used or no tax
| 26 | | liability for the given year remains. Any remaining unused |
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| 1 | | credit or
credits then will be carried forward to the next | 2 | | following year in which a
tax liability is incurred, except | 3 | | that no credit can be carried forward to
a year which is more | 4 | | than 5 years after the year in which the expense for
which the | 5 | | credit is given was incurred. | 6 | | No inference shall be drawn from this amendatory Act of the | 7 | | 91st General
Assembly in construing this Section for taxable | 8 | | years beginning before January
1, 1999. | 9 | | (l) Environmental Remediation Tax Credit. | 10 | | (i) For tax years ending after December 31, 1997 and on | 11 | | or before
December 31, 2001, a taxpayer shall be allowed a | 12 | | credit against the tax
imposed by subsections (a) and (b) | 13 | | of this Section for certain amounts paid
for unreimbursed | 14 | | eligible remediation costs, as specified in this | 15 | | subsection.
For purposes of this Section, "unreimbursed | 16 | | eligible remediation costs" means
costs approved by the | 17 | | Illinois Environmental Protection Agency ("Agency") under
| 18 | | Section 58.14 of the Environmental Protection Act that were | 19 | | paid in performing
environmental remediation at a site for | 20 | | which a No Further Remediation Letter
was issued by the | 21 | | Agency and recorded under Section 58.10 of the | 22 | | Environmental
Protection Act. The credit must be claimed | 23 | | for the taxable year in which
Agency approval of the | 24 | | eligible remediation costs is granted. The credit is
not | 25 | | available to any taxpayer if the taxpayer or any related | 26 | | party caused or
contributed to, in any material respect, a |
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| 1 | | release of regulated substances on,
in, or under the site | 2 | | that was identified and addressed by the remedial
action | 3 | | pursuant to the Site Remediation Program of the | 4 | | Environmental Protection
Act. After the Pollution Control | 5 | | Board rules are adopted pursuant to the
Illinois | 6 | | Administrative Procedure Act for the administration and | 7 | | enforcement of
Section 58.9 of the Environmental | 8 | | Protection Act, determinations as to credit
availability | 9 | | for purposes of this Section shall be made consistent with | 10 | | those
rules. For purposes of this Section, "taxpayer" | 11 | | includes a person whose tax
attributes the taxpayer has | 12 | | succeeded to under Section 381 of the Internal
Revenue Code | 13 | | and "related party" includes the persons disallowed a | 14 | | deduction
for losses by paragraphs (b), (c), and (f)(1) of | 15 | | Section 267 of the Internal
Revenue Code by virtue of being | 16 | | a related taxpayer, as well as any of its
partners. The | 17 | | credit allowed against the tax imposed by subsections (a) | 18 | | and
(b) shall be equal to 25% of the unreimbursed eligible | 19 | | remediation costs in
excess of $100,000 per site, except | 20 | | that the $100,000 threshold shall not apply
to any site | 21 | | contained in an enterprise zone as determined by the | 22 | | Department of
Commerce and Community Affairs (now | 23 | | Department of Commerce and Economic Opportunity). The | 24 | | total credit allowed shall not exceed
$40,000 per year with | 25 | | a maximum total of $150,000 per site. For partners and
| 26 | | shareholders of subchapter S corporations, there shall be |
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| 1 | | allowed a credit
under this subsection to be determined in | 2 | | accordance with the determination of
income and | 3 | | distributive share of income under Sections 702 and 704 and
| 4 | | subchapter S of the Internal Revenue Code. | 5 | | (ii) A credit allowed under this subsection that is | 6 | | unused in the year
the credit is earned may be carried | 7 | | forward to each of the 5 taxable years
following the year | 8 | | for which the credit is first earned until it is used.
The | 9 | | term "unused credit" does not include any amounts of | 10 | | unreimbursed eligible
remediation costs in excess of the | 11 | | maximum credit per site authorized under
paragraph (i). | 12 | | This credit shall be applied first to the earliest year
for | 13 | | which there is a liability. If there is a credit under this | 14 | | subsection
from more than one tax year that is available to | 15 | | offset a liability, the
earliest credit arising under this | 16 | | subsection shall be applied first. A
credit allowed under | 17 | | this subsection may be sold to a buyer as part of a sale
of | 18 | | all or part of the remediation site for which the credit | 19 | | was granted. The
purchaser of a remediation site and the | 20 | | tax credit shall succeed to the unused
credit and remaining | 21 | | carry-forward period of the seller. To perfect the
| 22 | | transfer, the assignor shall record the transfer in the | 23 | | chain of title for the
site and provide written notice to | 24 | | the Director of the Illinois Department of
Revenue of the | 25 | | assignor's intent to sell the remediation site and the | 26 | | amount of
the tax credit to be transferred as a portion of |
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| 1 | | the sale. In no event may a
credit be transferred to any | 2 | | taxpayer if the taxpayer or a related party would
not be | 3 | | eligible under the provisions of subsection (i). | 4 | | (iii) For purposes of this Section, the term "site" | 5 | | shall have the same
meaning as under Section 58.2 of the | 6 | | Environmental Protection Act. | 7 | | (m) Education expense credit. Beginning with tax years | 8 | | ending after
December 31, 1999, a taxpayer who
is the custodian | 9 | | of one or more qualifying pupils shall be allowed a credit
| 10 | | against the tax imposed by subsections (a) and (b) of this | 11 | | Section for
qualified education expenses incurred on behalf of | 12 | | the qualifying pupils.
The credit shall be equal to 25% of | 13 | | qualified education expenses, but in no
event may the total | 14 | | credit under this subsection claimed by a
family that is the
| 15 | | custodian of qualifying pupils exceed $500. In no event shall a | 16 | | credit under
this subsection reduce the taxpayer's liability | 17 | | under this Act to less than
zero. This subsection is exempt | 18 | | from the provisions of Section 250 of this
Act. | 19 | | For purposes of this subsection: | 20 | | "Qualifying pupils" means individuals who (i) are | 21 | | residents of the State of
Illinois, (ii) are under the age of | 22 | | 21 at the close of the school year for
which a credit is | 23 | | sought, and (iii) during the school year for which a credit
is | 24 | | sought were full-time pupils enrolled in a kindergarten through | 25 | | twelfth
grade education program at any school, as defined in | 26 | | this subsection. |
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| 1 | | "Qualified education expense" means the amount incurred
on | 2 | | behalf of a qualifying pupil in excess of $250 for tuition, | 3 | | book fees, and
lab fees at the school in which the pupil is | 4 | | enrolled during the regular school
year. | 5 | | "School" means any public or nonpublic elementary or | 6 | | secondary school in
Illinois that is in compliance with Title | 7 | | VI of the Civil Rights Act of 1964
and attendance at which | 8 | | satisfies the requirements of Section 26-1 of the
School Code, | 9 | | except that nothing shall be construed to require a child to
| 10 | | attend any particular public or nonpublic school to qualify for | 11 | | the credit
under this Section. | 12 | | "Custodian" means, with respect to qualifying pupils, an | 13 | | Illinois resident
who is a parent, the parents, a legal | 14 | | guardian, or the legal guardians of the
qualifying pupils. | 15 | | (n) River Edge Redevelopment Zone site remediation tax | 16 | | credit.
| 17 | | (i) For tax years ending on or after December 31, 2006, | 18 | | a taxpayer shall be allowed a credit against the tax | 19 | | imposed by subsections (a) and (b) of this Section for | 20 | | certain amounts paid for unreimbursed eligible remediation | 21 | | costs, as specified in this subsection. For purposes of | 22 | | this Section, "unreimbursed eligible remediation costs" | 23 | | means costs approved by the Illinois Environmental | 24 | | Protection Agency ("Agency") under Section 58.14a of the | 25 | | Environmental Protection Act that were paid in performing | 26 | | environmental remediation at a site within a River Edge |
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| 1 | | Redevelopment Zone for which a No Further Remediation | 2 | | Letter was issued by the Agency and recorded under Section | 3 | | 58.10 of the Environmental Protection Act. The credit must | 4 | | be claimed for the taxable year in which Agency approval of | 5 | | the eligible remediation costs is granted. The credit is | 6 | | not available to any taxpayer if the taxpayer or any | 7 | | related party caused or contributed to, in any material | 8 | | respect, a release of regulated substances on, in, or under | 9 | | the site that was identified and addressed by the remedial | 10 | | action pursuant to the Site Remediation Program of the | 11 | | Environmental Protection Act. Determinations as to credit | 12 | | availability for purposes of this Section shall be made | 13 | | consistent with rules adopted by the Pollution Control | 14 | | Board pursuant to the Illinois Administrative Procedure | 15 | | Act for the administration and enforcement of Section 58.9 | 16 | | of the Environmental Protection Act. For purposes of this | 17 | | Section, "taxpayer" includes a person whose tax attributes | 18 | | the taxpayer has succeeded to under Section 381 of the | 19 | | Internal Revenue Code and "related party" includes the | 20 | | persons disallowed a deduction for losses by paragraphs | 21 | | (b), (c), and (f)(1) of Section 267 of the Internal Revenue | 22 | | Code by virtue of being a related taxpayer, as well as any | 23 | | of its partners. The credit allowed against the tax imposed | 24 | | by subsections (a) and (b) shall be equal to 25% of the | 25 | | unreimbursed eligible remediation costs in excess of | 26 | | $100,000 per site. |
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| 1 | | (ii) A credit allowed under this subsection that is | 2 | | unused in the year the credit is earned may be carried | 3 | | forward to each of the 5 taxable years following the year | 4 | | for which the credit is first earned until it is used. This | 5 | | credit shall be applied first to the earliest year for | 6 | | which there is a liability. If there is a credit under this | 7 | | subsection from more than one tax year that is available to | 8 | | offset a liability, the earliest credit arising under this | 9 | | subsection shall be applied first. A credit allowed under | 10 | | this subsection may be sold to a buyer as part of a sale of | 11 | | all or part of the remediation site for which the credit | 12 | | was granted. The purchaser of a remediation site and the | 13 | | tax credit shall succeed to the unused credit and remaining | 14 | | carry-forward period of the seller. To perfect the | 15 | | transfer, the assignor shall record the transfer in the | 16 | | chain of title for the site and provide written notice to | 17 | | the Director of the Illinois Department of Revenue of the | 18 | | assignor's intent to sell the remediation site and the | 19 | | amount of the tax credit to be transferred as a portion of | 20 | | the sale. In no event may a credit be transferred to any | 21 | | taxpayer if the taxpayer or a related party would not be | 22 | | eligible under the provisions of subsection (i). | 23 | | (iii) For purposes of this Section, the term "site" | 24 | | shall have the same meaning as under Section 58.2 of the | 25 | | Environmental Protection Act. | 26 | | (Source: P.A. 96-115, eff. 7-31-09; 96-116, eff. 7-31-09; |
| | | HB5867 | - 71 - | LRB097 18418 HLH 63644 b |
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| 1 | | 96-937, eff. 6-23-10; 96-1000, eff. 7-2-10; 96-1496, eff. | 2 | | 1-13-11; 97-2, eff. 5-6-11; 97-636, eff. 6-1-12.) | 3 | | Section 95. No acceleration or delay. Where this Act makes | 4 | | changes in a statute that is represented in this Act by text | 5 | | that is not yet or no longer in effect (for example, a Section | 6 | | represented by multiple versions), the use of that text does | 7 | | not accelerate or delay the taking effect of (i) the changes | 8 | | made by this Act or (ii) provisions derived from any other | 9 | | Public Act. |
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