Full Text of HB6113 099th General Assembly
HB6113 99TH GENERAL ASSEMBLY |
| | 99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016 HB6113 Introduced 2/11/2016, by Rep. Avery Bourne SYNOPSIS AS INTRODUCED: |
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35 ILCS 405/2 | from Ch. 120, par. 405A-2 |
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Amends the Illinois Estate and Generation-Skipping Transfer Tax Act. Provides that, for persons dying on or after July 1, 2016, if the decedent was a farmer, then the exclusion amount for that decedent shall be the federal exclusion amount, including any deceased spousal unused exclusion amount. Provides that the term "farmer" means a decedent whose adjusted taxable estate consists of at least 75% farm property and who was engaged in active management of that farm property at any point during his or her lifetime. Effective immediately.
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| | | FISCAL NOTE ACT MAY APPLY | |
| | 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 Estate and Generation-Skipping | 5 | | Transfer Tax Act is amended by changing Section 2 as follows:
| 6 | | (35 ILCS 405/2) (from Ch. 120, par. 405A-2)
| 7 | | Sec. 2. Definitions.
| 8 | | "Federal estate tax" means the tax due to the United States | 9 | | with respect
to a taxable transfer under Chapter 11 of the | 10 | | Internal Revenue Code.
| 11 | | "Federal generation-skipping transfer tax" means the tax | 12 | | due to the
United States with respect to a taxable transfer | 13 | | under Chapter 13 of the
Internal Revenue Code.
| 14 | | "Federal return" means the federal estate tax return with | 15 | | respect to the
federal estate tax and means the federal | 16 | | generation-skipping transfer tax
return
with respect to the | 17 | | federal generation-skipping transfer tax.
| 18 | | "Federal transfer tax" means the federal estate tax or the | 19 | | federal
generation-skipping transfer tax.
| 20 | | "Illinois estate tax" means the tax due to this State with | 21 | | respect to a
taxable transfer.
| 22 | | "Illinois generation-skipping transfer tax" means the tax | 23 | | due to this State
with respect to a taxable transfer that gives |
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| 1 | | rise to a federal
generation-skipping transfer tax.
| 2 | | "Illinois transfer tax" means the Illinois estate tax or | 3 | | the Illinois
generation-skipping transfer tax.
| 4 | | "Internal Revenue Code" means, unless otherwise provided, | 5 | | the Internal
Revenue Code of 1986, as
amended from time to | 6 | | time.
| 7 | | "Non-resident trust" means a trust that is not a resident | 8 | | of this State
for purposes of the Illinois Income Tax Act, as | 9 | | amended from time to time.
| 10 | | "Person" means and includes any individual, trust, estate, | 11 | | partnership,
association, company or corporation.
| 12 | | "Qualified heir" means a qualified heir as defined in | 13 | | Section 2032A(e)(1)
of the Internal Revenue Code.
| 14 | | "Resident trust" means a trust that is a resident of this | 15 | | State for
purposes of the Illinois Income Tax Act, as amended | 16 | | from time to time.
| 17 | | "State" means any state, territory or possession of the | 18 | | United States and
the District of Columbia.
| 19 | | "State tax credit" means:
| 20 | | (a) For persons dying on or after January 1, 2003 and
| 21 | | through December 31, 2005, an amount
equal
to the full credit | 22 | | calculable under Section 2011 or Section 2604 of the
Internal | 23 | | Revenue
Code as the credit would have been computed and allowed | 24 | | under the Internal
Revenue
Code as in effect on December 31, | 25 | | 2001, without the reduction in the State
Death Tax
Credit as | 26 | | provided in Section 2011(b)(2) or the termination of the State |
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| 1 | | Death
Tax Credit
as provided in Section 2011(f) as enacted by | 2 | | the Economic Growth and Tax Relief
Reconciliation Act of 2001, | 3 | | but recognizing the increased applicable exclusion
amount
| 4 | | through December 31, 2005.
| 5 | | (b) For persons dying after December 31, 2005 and on or | 6 | | before December 31,
2009, and for persons dying after December | 7 | | 31, 2010, an amount equal to the full
credit
calculable under | 8 | | Section 2011 or 2604 of the Internal Revenue Code as the
credit | 9 | | would
have been computed and allowed under the Internal Revenue | 10 | | Code as in effect on
December 31, 2001, without the reduction | 11 | | in the State Death Tax Credit as
provided in
Section 2011(b)(2) | 12 | | or the termination of the State Death Tax Credit as provided
in
| 13 | | Section 2011(f) as enacted by the Economic Growth and Tax | 14 | | Relief Reconciliation
Act of
2001, but recognizing the | 15 | | exclusion amount of only (i) $2,000,000 for persons dying prior | 16 | | to January 1, 2012, (ii) $3,500,000 for persons dying on or | 17 | | after January 1, 2012 and prior to January 1, 2013, and (iii) | 18 | | $4,000,000 for persons dying on or after January 1, 2013, and | 19 | | with reduction to the adjusted taxable estate for any qualified | 20 | | terminable interest property election as defined in subsection | 21 | | (b-1) of this Section. Notwithstanding any other provision of | 22 | | law, for persons dying on or after July 1, 2016, if the | 23 | | decedent was a farmer, then the exclusion amount for that | 24 | | decedent shall be the applicable exclusion amount calculated | 25 | | under Section 2010 of the Internal Revenue Code, including any | 26 | | deceased spousal unused exclusion amount available after a |
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| 1 | | valid election is made under subparagraph (A) of paragraph (5) | 2 | | of subsection (c) of that Section.
| 3 | | For the purposes of this subsection (b): | 4 | | "Farmer" means a decedent whose adjusted taxable estate | 5 | | consists of at least 75% farm property and who was engaged in | 6 | | active management of that farm property at any point during his | 7 | | or her lifetime. | 8 | | "Active management" means material participation, as | 9 | | defined in Section 469 of the Internal Revenue Code. | 10 | | "Farm property" means any real property or tangible | 11 | | personal property used for farming purposes. | 12 | | "Farming purposes" means: | 13 | | (1) cultivating the soil or raising or harvesting | 14 | | any agricultural or horticultural commodity, including | 15 | | the raising, shearing, feeding, caring for, training, | 16 | | and management of animals on a farm; | 17 | | (2) handling, drying, packing, grading, or storing | 18 | | on a farm any agricultural or horticultural commodity | 19 | | in its unmanufactured state, but only if the owner, | 20 | | tenant, or operator of the farm regularly produces more | 21 | | than one-half of the commodity so treated; and | 22 | | (3) the planting, cultivating, caring for, or | 23 | | cutting of trees, or the preparation, other than | 24 | | milling, of trees for market. | 25 | | (b-1) The person required to file the Illinois return may | 26 | | elect on a timely filed Illinois return a marital deduction for |
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| 1 | | qualified terminable interest property under Section | 2 | | 2056(b)(7) of the Internal Revenue Code for purposes of the | 3 | | Illinois estate tax that is separate and independent of any | 4 | | qualified terminable interest property election for federal | 5 | | estate tax purposes. For purposes of the Illinois estate tax, | 6 | | the inclusion of property in the gross estate of a surviving | 7 | | spouse is the same as under Section 2044 of the Internal | 8 | | Revenue Code. | 9 | | In the case of any trust for which a State or federal | 10 | | qualified terminable interest property election is made, the | 11 | | trustee may not retain non-income producing assets for more | 12 | | than a reasonable amount of time without the consent of the | 13 | | surviving spouse.
| 14 | | "Taxable transfer" means an event that gives rise to a | 15 | | state tax credit,
including any credit as a result of the | 16 | | imposition of an
additional tax under Section 2032A(c) of the | 17 | | Internal Revenue Code.
| 18 | | "Transferee" means a transferee within the meaning of | 19 | | Section 2603(a)(1)
and Section 6901(h) of the Internal Revenue | 20 | | Code.
| 21 | | "Transferred property" means:
| 22 | | (1) With respect to a taxable transfer occurring at the | 23 | | death of an
individual, the
deceased individual's gross | 24 | | estate as defined in Section 2031 of the
Internal Revenue | 25 | | Code.
| 26 | | (2) With respect to a taxable transfer occurring as a |
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| 1 | | result of a
taxable termination as defined in Section | 2 | | 2612(a) of the Internal Revenue Code,
the taxable amount | 3 | | determined under Section 2622(a) of the Internal Revenue
| 4 | | Code.
| 5 | | (3) With respect to a taxable transfer occurring as a | 6 | | result of a
taxable distribution as defined in Section | 7 | | 2612(b) of the Internal Revenue Code,
the taxable amount | 8 | | determined under Section 2621(a) of the Internal Revenue
| 9 | | Code.
| 10 | | (4) With respect to an event which causes the | 11 | | imposition of an
additional estate tax under Section | 12 | | 2032A(c) of the Internal Revenue Code,
the
qualified real | 13 | | property that was disposed of or which ceased to be used | 14 | | for
the qualified use, within the meaning of Section | 15 | | 2032A(c)(1) of the Internal
Revenue Code.
| 16 | | "Trust" includes a trust as defined in Section 2652(b)(1) | 17 | | of the Internal
Revenue Code.
| 18 | | (Source: P.A. 96-789, eff. 9-8-09; 96-1496, eff. 1-13-11; | 19 | | 97-636, eff. 6-1-12 .)
| 20 | | Section 99. Effective date. This Act takes effect upon | 21 | | becoming law.
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