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Public Act 102-1112 | ||||
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AN ACT concerning revenue.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 2. The Reimagining Electric Vehicles in Illinois | ||||
Act is amended by changing Sections 10, 15, 20, 30, and 40 as | ||||
follows: | ||||
(20 ILCS 686/10)
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Sec. 10. Definitions. As used in this Act: | ||||
"Advanced battery" means a battery that consists of a | ||||
battery cell that can be integrated into a module, pack, or | ||||
system to be used in energy storage applications, including a | ||||
battery used in an electric vehicle or the electric grid. | ||||
"Advanced battery component" means a component of an | ||||
advanced battery, including materials, enhancements, | ||||
enclosures, anodes, cathodes, electrolytes, cells, and other | ||||
associated technologies that comprise an advanced battery. | ||||
"Agreement" means the agreement between a taxpayer and the | ||||
Department under the provisions of Section 45 of this Act. | ||||
"Applicant" means a taxpayer that (i) operates a business | ||||
in Illinois or is planning to locate a business within the | ||||
State of Illinois and (ii) is engaged in interstate or | ||||
intrastate commerce for the purpose of manufacturing electric | ||||
vehicles, electric vehicle component parts, or electric |
vehicle power supply equipment. "Applicant" does not include a | ||
taxpayer who closes or substantially reduces by more than 50% | ||
operations at one location in the State and relocates | ||
substantially the same operation to another location in the | ||
State. This does not prohibit a Taxpayer from expanding its | ||
operations at another location in the State. This also does | ||
not prohibit a Taxpayer from moving its operations from one | ||
location in the State to another location in the State for the | ||
purpose of expanding the operation, provided that the | ||
Department determines that expansion cannot reasonably be | ||
accommodated within the municipality or county in which the | ||
business is located, or, in the case of a business located in | ||
an incorporated area of the county, within the county in which | ||
the business is located, after conferring with the chief | ||
elected official of the municipality or county and taking into | ||
consideration any evidence offered by the municipality or | ||
county regarding the ability to accommodate expansion within | ||
the municipality or county. | ||
"Battery raw materials" means the raw and processed form | ||
of a mineral, metal, chemical, or other material used in an | ||
advanced battery component. | ||
"Battery raw materials refining service provider" means a | ||
business that operates a facility that filters, sifts, and | ||
treats battery raw materials for use in an advanced battery. | ||
"Battery recycling and reuse manufacturer" means a | ||
manufacturer that is primarily engaged in the recovery, |
retrieval, processing, recycling, or recirculating of battery | ||
raw materials for new use in electric vehicle batteries. | ||
"Capital improvements" means the purchase, renovation, | ||
rehabilitation, or construction of permanent tangible land, | ||
buildings, structures, equipment, and furnishings in an | ||
approved project sited in Illinois and expenditures for goods | ||
or services that are normally capitalized, including | ||
organizational costs and research and development costs | ||
incurred in Illinois. For land, buildings, structures, and | ||
equipment that are leased, the lease must equal or exceed the | ||
term of the agreement, and the cost of the property shall be | ||
determined from the present value, using the corporate | ||
interest rate prevailing at the time of the application, of | ||
the lease payments. | ||
"Credit" means either a "REV Illinois Credit" or a "REV | ||
Construction Jobs Credit" agreed to between the Department and | ||
applicant under this Act. | ||
"Department" means the Department of Commerce and Economic | ||
Opportunity. | ||
"Director" means the Director of Commerce and Economic | ||
Opportunity. | ||
"Electric vehicle" means a vehicle that is exclusively | ||
powered by and refueled by electricity, including electricity | ||
generated through a hydrogen fuel cells or solar technology. | ||
"Electric vehicle" does not include hybrid electric vehicles, | ||
electric bicycles, or extended-range electric vehicles that |
are also equipped with conventional fueled propulsion or | ||
auxiliary engines. | ||
"Electric vehicle manufacturer" means a new or existing | ||
manufacturer that is primarily focused on reequipping, | ||
expanding, or establishing a manufacturing facility in | ||
Illinois that produces electric vehicles as defined in this | ||
Section. | ||
"Electric vehicle component parts manufacturer" means a | ||
new or existing manufacturer that is primarily focused on | ||
reequipping, expanding, or establishing a manufacturing | ||
facility in Illinois that produces parts or accessories used
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in electric vehicles advanced battery components or key | ||
components that directly support the electric functions of | ||
electric vehicles , as defined by this Section , including
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advanced battery component parts . The changes to this
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definition of "electric vehicle component parts manufacturer"
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apply to agreements under this Act that are entered into on or
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after the effective date of this amendatory Act of the 102nd
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General Assembly. | ||
"Electric vehicle power supply equipment" means the | ||
equipment used specifically for the purpose of delivering | ||
electricity to an electric vehicle, including hydrogen fuel | ||
cells or solar refueling infrastructure. | ||
"Electric vehicle power supply manufacturer" means a new | ||
or existing manufacturer that is focused on reequipping, | ||
expanding, or establishing a manufacturing facility in |
Illinois that produces electric vehicle power supply equipment | ||
used for the purpose of delivering electricity to an electric | ||
vehicle, including hydrogen fuel cell or solar refueling | ||
infrastructure. | ||
"Energy Transition Area" means a county with less than | ||
100,000 people or a municipality that contains one or more of | ||
the following: | ||
(1) a fossil fuel plant that was retired from service | ||
or has significant reduced service within 6 years before | ||
the time of the application or will be retired or have | ||
service significantly reduced within 6 years following the | ||
time of the application; or | ||
(2) a coal mine that was closed or had operations | ||
significantly reduced within 6 years before the time of | ||
the application or is anticipated to be closed or have | ||
operations significantly reduced within 6 years following | ||
the time of the application. | ||
"Full-time employee" means an individual who is employed | ||
for consideration for at least 35 hours each week or who | ||
renders any other standard of service generally accepted by | ||
industry custom or practice as full-time employment. An | ||
individual for whom a W-2 is issued by a Professional Employer | ||
Organization (PEO) is a full-time employee if employed in the | ||
service of the applicant for consideration for at least 35 | ||
hours each week. | ||
"Incremental income tax" means the total amount withheld |
during the taxable year from the compensation of new employees | ||
and, if applicable, retained employees under Article 7 of the | ||
Illinois Income Tax Act arising from employment at a project | ||
that is the subject of an agreement. | ||
"Institution of higher education" or "institution" means | ||
any accredited public or private university, college, | ||
community college, business, technical, or vocational school, | ||
or other accredited educational institution offering degrees | ||
and instruction beyond the secondary school level. | ||
"Minority person" means a minority person as defined in | ||
the Business Enterprise for Minorities, Women, and Persons | ||
with Disabilities Act. | ||
"New employee" means a newly-hired full-time employee | ||
employed to work at the project site and whose work is directly | ||
related to the project. | ||
"Noncompliance date" means, in the case of a taxpayer that | ||
is not complying with the requirements of the agreement or the | ||
provisions of this Act, the day following the last date upon | ||
which the taxpayer was in compliance with the requirements of | ||
the agreement and the provisions of this Act, as determined by | ||
the Director, pursuant to Section 70. | ||
"Pass-through entity" means an entity that is exempt from | ||
the tax under subsection (b) or (c) of Section 205 of the | ||
Illinois Income Tax Act. | ||
"Placed in service" means the state or condition of | ||
readiness, availability for a specifically assigned function, |
and the facility is constructed and ready to conduct its | ||
facility operations to manufacture goods. | ||
"Professional employer organization" (PEO) means an | ||
employee leasing company, as defined in Section 206.1 of the | ||
Illinois Unemployment Insurance Act. | ||
"Program" means the Reimagining Electric Vehicles in | ||
Illinois Program (the REV Illinois Program) established in | ||
this Act. | ||
"Project" or "REV Illinois Project" means a for-profit | ||
economic development activity for the manufacture of electric | ||
vehicles, electric vehicle component parts, or electric | ||
vehicle power supply equipment which is designated by the | ||
Department as a REV Illinois Project and is the subject of an | ||
agreement. | ||
"Recycling facility" means a location at which the | ||
taxpayer disposes of batteries and other component parts in | ||
manufacturing of electric vehicles, electric vehicle component | ||
parts, or electric vehicle power supply equipment. | ||
"Related member" means a person that, with respect to the | ||
taxpayer during any portion of the taxable year, is any one of | ||
the following: | ||
(1) An individual stockholder, if the stockholder and | ||
the members of the stockholder's family (as defined in | ||
Section 318 of the Internal Revenue Code) own directly, | ||
indirectly, beneficially, or constructively, in the | ||
aggregate, at least 50% of the value of the taxpayer's |
outstanding stock. | ||
(2) A partnership, estate, trust and any partner or | ||
beneficiary, if the partnership, estate, or trust, and its | ||
partners or beneficiaries own directly, indirectly, | ||
beneficially, or constructively, in the aggregate, at | ||
least 50% of the profits, capital, stock, or value of the | ||
taxpayer. | ||
(3) A corporation, and any party related to the | ||
corporation in a manner that would require an attribution | ||
of stock from the corporation under the attribution rules | ||
of Section 318 of the Internal Revenue Code, if the | ||
Taxpayer owns directly, indirectly, beneficially, or | ||
constructively at least 50% of the value of the | ||
corporation's outstanding stock. | ||
(4) A corporation and any party related to that | ||
corporation in a manner that would require an attribution | ||
of stock from the corporation to the party or from the | ||
party to the corporation under the attribution rules of | ||
Section 318 of the Internal Revenue Code, if the | ||
corporation and all such related parties own in the | ||
aggregate at least 50% of the profits, capital, stock, or | ||
value of the taxpayer. | ||
(5) A person to or from whom there is an attribution of | ||
stock ownership in accordance with Section 1563(e) of the | ||
Internal Revenue Code, except, for purposes of determining | ||
whether a person is a related member under this paragraph, |
20% shall be substituted for 5% wherever 5% appears in | ||
Section 1563(e) of the Internal Revenue Code. | ||
"Retained employee" means a full-time employee employed by | ||
the taxpayer prior to the term of the Agreement who continues | ||
to be employed during the term of the agreement whose job | ||
duties are directly and substantially related to the project. | ||
For purposes of this definition, "directly and substantially | ||
related to the project" means at least two-thirds of the | ||
employee's job duties must be directly related to the project | ||
and the employee must devote at least two-thirds of his or her | ||
time to the project. The term "retained employee" does not | ||
include any individual who has a direct or an indirect | ||
ownership interest of at least 5% in the profits, equity, | ||
capital, or value of the taxpayer or a child, grandchild, | ||
parent, or spouse, other than a spouse who is legally | ||
separated from the individual, of any individual who has a | ||
direct or indirect ownership of at least 5% in the profits, | ||
equity, capital, or value of the taxpayer. The changes to this
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definition of "retained employee" apply to agreements for
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credits under this Act that are entered into on or after the
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effective date of this amendatory Act of the 102nd General
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Assembly. | ||
"REV Illinois credit" means a credit agreed to between the | ||
Department and the applicant under this Act that is based on | ||
the incremental income tax attributable to new employees and, | ||
if applicable, retained employees, and on training costs for |
such employees at the applicant's project. | ||
"REV construction jobs credit" means a credit agreed to | ||
between the Department and the applicant under this Act that | ||
is based on the incremental income tax attributable to | ||
construction wages paid in connection with construction of the | ||
project facilities. | ||
"Statewide baseline" means the total number of full-time | ||
employees of the applicant and any related member employed by | ||
such entities at the time of application for incentives under | ||
this Act. | ||
"Taxpayer" means an individual, corporation, partnership, | ||
or other entity that has a legal obligation to pay Illinois | ||
income taxes and file an Illinois income tax return. | ||
"Training costs" means costs incurred to upgrade the | ||
technological skills of full-time employees in Illinois and | ||
includes: curriculum development; training materials | ||
(including scrap product costs); trainee domestic travel | ||
expenses; instructor costs (including wages, fringe benefits, | ||
tuition and domestic travel expenses); rent, purchase or lease | ||
of training equipment; and other usual and customary training | ||
costs. "Training costs" do not include costs associated with | ||
travel outside the United States (unless the Taxpayer receives | ||
prior written approval for the travel by the Director based on | ||
a showing of substantial need or other proof the training is | ||
not reasonably available within the United States), wages and | ||
fringe benefits of employees during periods of training, or |
administrative cost related to full-time employees of the | ||
taxpayer. | ||
"Underserved area" means any geographic areas as defined | ||
in Section 5-5 of the Economic Development for a Growing | ||
Economy Tax Credit Act.
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(Source: P.A. 102-669, eff. 11-16-21; 102-700, eff. 4-19-22.) | ||
(20 ILCS 686/15)
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Sec. 15. Powers of the Department. The Department, in | ||
addition to those powers granted under the Civil | ||
Administrative Code of Illinois, is granted and shall have all | ||
the powers necessary or convenient to administer the program | ||
under this Act and to carry out and effectuate the purposes and | ||
provisions of this Act, including, but not limited to, the | ||
power and authority to: | ||
(1) adopt rules deemed necessary and appropriate for | ||
the administration of the REV Illinois Program, the | ||
designation of REV Illinois Projects, and the awarding of | ||
credits; | ||
(2) establish forms for applications, notifications, | ||
contracts, or any other agreements and accept applications | ||
at any time during the year; | ||
(3) assist taxpayers pursuant to the provisions of | ||
this Act and cooperate with taxpayers that are parties to | ||
agreements under this Act to promote, foster, and support | ||
economic development, capital investment, and job creation |
or retention within the State; | ||
(4) enter into agreements and memoranda of | ||
understanding for participation of, and engage in | ||
cooperation with, agencies of the federal government, | ||
units of local government, universities, research | ||
foundations or institutions, regional economic development | ||
corporations, or other organizations to implement the | ||
requirements and purposes of this Act; | ||
(5) gather information and conduct inquiries, in the | ||
manner and by the methods it deems desirable, including | ||
without limitation, gathering information with respect to | ||
applicants for the purpose of making any designations or | ||
certifications necessary or desirable or to gather | ||
information to assist the Department with any | ||
recommendation or guidance in the furtherance of the | ||
purposes of this Act; | ||
(6) establish, negotiate and effectuate agreements and | ||
any term, agreement, or other document with any person, | ||
necessary or appropriate to accomplish the purposes of | ||
this Act; and to consent, subject to the provisions of any | ||
agreement with another party, to the modification or | ||
restructuring of any agreement to which the Department is | ||
a party; | ||
(7) fix, determine, charge, and collect any premiums, | ||
fees, charges, costs, and expenses from applicants, | ||
including, without limitation, any application fees, |
commitment fees, program fees, financing charges, or | ||
publication fees as deemed appropriate to pay expenses | ||
necessary or incident to the administration, staffing, or | ||
operation in connection with the Department's activities | ||
under this Act, or for preparation, implementation, and | ||
enforcement of the terms of the agreement, or for | ||
consultation, advisory and legal fees, and other costs; | ||
however, all fees and expenses incident thereto shall be | ||
the responsibility of the applicant; | ||
(8) provide for sufficient personnel to permit | ||
administration, staffing, operation, and related support | ||
required to adequately discharge its duties and | ||
responsibilities described in this Act from funds made | ||
available through charges to applicants or from funds as | ||
may be appropriated by the General Assembly for the | ||
administration of this Act; | ||
(9) require applicants, upon written request, to issue | ||
any necessary authorization to the appropriate federal, | ||
State, or local authority for the release of information | ||
concerning a project being considered under the provisions | ||
of this Act, with the information requested to include, | ||
but not be limited to, financial reports, returns, or | ||
records relating to the taxpayer or its project; | ||
(10) require that a taxpayer shall at all times keep | ||
proper books of record and account in accordance with | ||
generally accepted accounting principles consistently |
applied, with the books, records, or papers related to the | ||
agreement in the custody or control of the taxpayer open | ||
for reasonable Department inspection and audits, and | ||
including, without limitation, the making of copies of the | ||
books, records, or papers, and the inspection or appraisal | ||
of any of the taxpayer or project assets; | ||
(11) take whatever actions are necessary or | ||
appropriate to protect the State's interest in the event | ||
of bankruptcy, default, foreclosure, or noncompliance with | ||
the terms and conditions of financial assistance or | ||
participation required under this Act, including the power | ||
to sell, dispose, lease, or rent, upon terms and | ||
conditions determined by the Director to be appropriate, | ||
real or personal property that the Department may receive | ||
as a result of these actions ; and .
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(12) determine the conditions and procedures for
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renewing the REV Illinois Credit awarded in accordance
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with this Act. | ||
(Source: P.A. 102-669, eff. 11-16-21.) | ||
(20 ILCS 686/20)
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Sec. 20. REV Illinois Program; project applications. | ||
(a) The Reimagining Electric Vehicles in Illinois (REV | ||
Illinois) Program is hereby established and shall be | ||
administered by the Department. The Program will provide | ||
financial incentives to any one or more of the following: (1) |
eligible manufacturers of electric vehicles, electric vehicle | ||
component parts, and electric vehicle power supply equipment; | ||
(2) battery recycling and reuse manufacturers; or (3) battery | ||
raw materials refining service providers. | ||
(b) Any taxpayer planning a project to be located in | ||
Illinois may request consideration for designation of its | ||
project as a REV Illinois Project, by formal written letter of | ||
request or by formal application to the Department, in which | ||
the applicant states its intent to make at least a specified | ||
level of investment and intends to hire a specified number of | ||
full-time employees at a designated location in Illinois. As | ||
circumstances require, the Department shall require a formal | ||
application from an applicant and a formal letter of request | ||
for assistance. | ||
(c) In order to qualify for credits under the REV Illinois | ||
Program, an applicant must: | ||
(1) for an electric vehicle manufacturer: | ||
(A) make an investment of at least $1,500,000,000 | ||
in capital improvements at the project site; | ||
(B) to be placed in service within the State | ||
within a 60-month period after approval of the | ||
application; and | ||
(C) create at least 500 new full-time employee | ||
jobs; or | ||
(2) for an electric vehicle component parts | ||
manufacturer: |
(A) make an investment of at least $300,000,000 in | ||
capital improvements at the project site; | ||
(B) manufacture one or more parts that are | ||
primarily used for electric vehicle manufacturing; | ||
(C) to be placed in service within the State | ||
within a 60-month period after approval of the | ||
application; and | ||
(D) create at least 150 new full-time employee | ||
jobs; or | ||
(3) for an electric vehicle manufacturer, an electric | ||
vehicle power supply equipment manufacturer, an electric | ||
vehicle component part manufacturer that does not qualify | ||
under paragraph (2) above, a battery recycling and reuse | ||
manufacturer, or a battery raw materials refining service | ||
provider: | ||
(A) make an investment of at least $20,000,000 in | ||
capital improvements at the project site; | ||
(B) for electric vehicle component part | ||
manufacturers, manufacture one or more parts that are | ||
primarily used for electric vehicle manufacturing; | ||
(C) to be placed in service within the State | ||
within a 48-month period after approval of the | ||
application; and | ||
(D) create at least 50 new full-time employee | ||
jobs; or | ||
(4) for an electric vehicle manufacturer or electric |
vehicle component parts manufacturer with existing | ||
operations within Illinois that intends to convert or | ||
expand, in whole or in part, the existing facility from | ||
traditional manufacturing to primarily electric vehicle | ||
manufacturing, electric vehicle component parts | ||
manufacturing, or electric vehicle power supply equipment | ||
manufacturing: | ||
(A) make an investment of at least $100,000,000 in | ||
capital improvements at the project site; | ||
(B) to be placed in service within the State | ||
within a 60-month period after approval of the | ||
application; and | ||
(C) create the lesser of 75 new full-time employee | ||
jobs or new full-time employee jobs equivalent to 10% | ||
of the Statewide baseline applicable to the taxpayer | ||
and any related member at the time of application. | ||
(d) For agreements entered into prior to April 19, 2022 | ||
( the effective date of Public Act 102-700) this amendatory Act | ||
of the 102nd General Assembly , for any applicant creating the | ||
full-time employee jobs noted in subsection (c), those jobs | ||
must have a total compensation equal to or greater than 120% of | ||
the average wage paid to full-time employees in the county | ||
where the project is located, as determined by the U.S. Bureau | ||
of Labor Statistics. For agreements entered into on or after | ||
April 19, 2022 ( the effective date of Public Act 102-700) this | ||
amendatory Act of the 102nd General Assembly , for any |
applicant creating the full-time employee jobs noted in | ||
subsection (c), those jobs must have a compensation equal to | ||
or greater than 120% of the average wage paid to full-time | ||
employees in a similar position within an occupational group | ||
in the county where the project is located, as determined by | ||
the Department U.S. Bureau of Labor Statistics . | ||
(e) For any applicant, within 24 months after being placed | ||
in service, it must certify to the Department that it is carbon | ||
neutral or has attained certification under one of more of the | ||
following green building standards: | ||
(1) BREEAM for New Construction or BREEAM In-Use; | ||
(2) ENERGY STAR; | ||
(3) Envision; | ||
(4) ISO 50001 - energy management; | ||
(5) LEED for Building Design and Construction or LEED | ||
for Building Operations and Maintenance; | ||
(6) Green Globes for New Construction or Green Globes | ||
for Existing Buildings; or | ||
(7) UL 3223. | ||
(f) Each applicant must outline its hiring plan and | ||
commitment to recruit and hire full-time employee positions at | ||
the project site. The hiring plan may include a partnership | ||
with an institution of higher education to provide | ||
internships, including, but not limited to, internships | ||
supported by the Clean Jobs Workforce Network Program, or | ||
full-time permanent employment for students at the project |
site. Additionally, the applicant may create or utilize | ||
participants from apprenticeship programs that are approved by | ||
and registered with the United States Department of Labor's | ||
Bureau of Apprenticeship and Training. The applicant may apply | ||
for apprenticeship education expense credits in accordance | ||
with the provisions set forth in 14 Ill. Adm. Admin. Code 522. | ||
Each applicant is required to report annually, on or before | ||
April 15, on the diversity of its workforce in accordance with | ||
Section 50 of this Act. For existing facilities of applicants | ||
under paragraph (3) of subsection (b) above, if the taxpayer | ||
expects a reduction in force due to its transition to | ||
manufacturing electric vehicle, electric vehicle component | ||
parts, or electric vehicle power supply equipment, the plan | ||
submitted under this Section must outline the taxpayer's plan | ||
to assist with retraining its workforce aligned with the | ||
taxpayer's adoption of new technologies and anticipated | ||
efforts to retrain employees through employment opportunities | ||
within the taxpayer's workforce. | ||
(g) Each applicant must demonstrate a contractual or other | ||
relationship with a recycling facility, or demonstrate its own | ||
recycling capabilities, at the time of application and report | ||
annually a continuing contractual or other relationship with a | ||
recycling facility and the percentage of batteries used in | ||
electric vehicles recycled throughout the term of the | ||
agreement. | ||
(h) A taxpayer may not enter into more than one agreement |
under this Act with respect to a single address or location for | ||
the same period of time. Also, a taxpayer may not enter into an | ||
agreement under this Act with respect to a single address or | ||
location for the same period of time for which the taxpayer | ||
currently holds an active agreement under the Economic | ||
Development for a Growing Economy Tax Credit Act. This | ||
provision does not preclude the applicant from entering into | ||
an additional agreement after the expiration or voluntary | ||
termination of an earlier agreement under this Act or under | ||
the Economic Development for a Growing Economy Tax Credit Act | ||
to the extent that the taxpayer's application otherwise | ||
satisfies the terms and conditions of this Act and is approved | ||
by the Department. An applicant with an existing agreement | ||
under the Economic Development for a Growing Economy Tax | ||
Credit Act may submit an application for an agreement under | ||
this Act after it terminates any existing agreement under the | ||
Economic Development for a Growing Economy Tax Credit Act with | ||
respect to the same address or location. If a project that is | ||
subject to an existing agreement under the Economic
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Development for a Growing Economy Tax Credit Act meets the
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requirements to be designated as a REV Illinois project under
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this Act, including for actions undertaken prior to the
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effective date of this Act, the taxpayer that is subject to
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that existing agreement under the Economic Development for a
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Growing Economy Tax Credit Act may apply to the Department to
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amend the agreement to allow the project to become a
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designated REV Illinois project. Following the amendment, time
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accrued during which the project was eligible for credits
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under the existing agreement under the Economic Development
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for a Growing Economy Tax Credit Act shall count toward the
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duration of the credit subject to limitations described in
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Section 40 of this Act. | ||
(i) If, at any time following the designation of a project
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as a REV Illinois Project by the Department and prior to the
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termination or expiration of an agreement under this Act, the
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project ceases to qualify as a REV Illinois project because
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the taxpayer is no longer an electric vehicle manufacturer, an
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electric vehicle component manufacturer, an electric vehicle
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power supply equipment manufacturer, a battery recycling and
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reuse manufacturer, or a battery raw materials refining
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service provider, that project may receive tax credit awards
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as described in Section 5-15 and Section 5-51 of the Economic
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Development for a Growing Economy Tax Credit Act, as long as
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the project continues to meet requirements to obtain those
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credits as described in the Economic Development for a Growing
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Economy Tax Credit Act and remains compliant with terms
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contained in the Agreement under this Act not related to their
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status as an electric vehicle manufacturer, an electric
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vehicle component manufacturer, an electric vehicle power
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supply equipment manufacturer, a battery recycling and reuse
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manufacturer, or a battery raw materials refining service
| ||
provider. Time accrued during which the project was eligible
|
for credits under an agreement under this Act shall count
| ||
toward the duration of the credit subject to limitations
| ||
described in Section 5-45 of the Economic Development for a
| ||
Growing Economy Tax Credit Act.
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(Source: P.A. 102-669, eff. 11-16-21; 102-700, eff. 4-19-22; | ||
revised 6-27-22.) | ||
(20 ILCS 686/30)
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Sec. 30. Tax credit awards. | ||
(a) Subject to the conditions set forth in this Act, a | ||
taxpayer is entitled to a credit against the tax imposed | ||
pursuant to subsections (a) and (b) of Section 201 of the | ||
Illinois Income Tax Act for a taxable year beginning on or | ||
after January 1, 2025 if the taxpayer is awarded a credit by | ||
the Department in accordance with an agreement under this Act. | ||
The Department has authority to award credits under this Act | ||
on and after January 1, 2022. | ||
(b) REV Illinois Credits. A taxpayer may receive a tax | ||
credit against the tax imposed under subsections (a) and (b) | ||
of Section 201 of the Illinois Income Tax Act, not to exceed | ||
the sum of (i) 75% of the incremental income tax attributable | ||
to new employees at the applicant's project and (ii) 10% of the | ||
training costs of the new employees. If the project is located | ||
in an underserved area or an energy transition area, then the | ||
amount of the credit may not exceed the sum of (i) 100% of the | ||
incremental income tax attributable to new employees at the |
applicant's project; and (ii) 10% of the training costs of the | ||
new employees. The percentage of training costs includable in | ||
the calculation may be increased by an additional 15% for | ||
training costs associated with new employees that are recent | ||
(2 years or less) graduates, certificate holders, or | ||
credential recipients from an institution of higher education | ||
in Illinois, or, if the training is provided by an institution | ||
of higher education in Illinois, the Clean Jobs Workforce | ||
Network Program, or an apprenticeship and training program | ||
located in Illinois and approved by and registered with the | ||
United States Department of Labor's Bureau of Apprenticeship | ||
and Training. An applicant is also eligible for a training | ||
credit that shall not exceed 10% of the training costs of | ||
retained employees for the purpose of upskilling to meet the | ||
operational needs of the applicant or the REV Illinois | ||
Project. The percentage of training costs includable in the | ||
calculation shall not exceed a total of 25%. If an applicant | ||
agrees to hire the required number of new employees, then the | ||
maximum amount of the credit for that applicant may be | ||
increased by an amount not to exceed 75% 25% of the incremental | ||
income tax attributable to retained employees at the | ||
applicant's project; provided that, in order to receive the | ||
increase for retained employees, the applicant must, if | ||
applicable, meet or exceed the statewide baseline. If the | ||
Project is in an underserved area or an energy transition | ||
area, the maximum amount of the credit attributable to |
retained employees for the applicant may be increased to an | ||
amount not to exceed 100% 50% of the incremental income tax | ||
attributable to retained employees at the applicant's project; | ||
provided that, in order to receive the increase for retained | ||
employees, the applicant must meet or exceed the statewide | ||
baseline. REV Illinois Credits awarded may include credit | ||
earned for incremental income tax withheld and training costs | ||
incurred by the taxpayer beginning on or after January 1, | ||
2022. Credits so earned and certified by the Department may be | ||
applied against the tax imposed by subsections (a) and (b) of | ||
Section 201 of the Illinois Income Tax Act for taxable years | ||
beginning on or after January 1, 2025. | ||
(c) REV Construction Jobs Credit. For construction wages | ||
associated with a project that qualified for a REV Illinois | ||
Credit under subsection (b), the taxpayer may receive a tax | ||
credit against the tax imposed under subsections (a) and (b) | ||
of Section 201 of the Illinois Income Tax Act in an amount | ||
equal to 50% of the incremental income tax attributable to | ||
construction wages paid in connection with construction of the | ||
project facilities, as a jobs credit for workers hired to | ||
construct the project. | ||
The REV Construction Jobs Credit may not exceed 75% of the | ||
amount of the incremental income tax attributable to | ||
construction wages paid in connection with construction of the | ||
project facilities if the project is in an underserved area or | ||
an energy transition area. |
(d) The Department shall certify to the Department of | ||
Revenue: (1) the identity of Taxpayers that are eligible for | ||
the REV Illinois Credit and REV Construction Jobs Credit; (2) | ||
the amount of the REV Illinois Credits and REV Construction | ||
Jobs Credits awarded in each calendar year; and (3) the amount | ||
of the REV Illinois Credit and REV Construction Jobs Credit | ||
claimed in each calendar year. REV Illinois Credits awarded | ||
may include credit earned for Incremental Income Tax withheld | ||
and Training Costs incurred by the Taxpayer beginning on or | ||
after January 1, 2022. Credits so earned and certified by the | ||
Department may be applied against the tax imposed by Section | ||
201(a) and (b) of the Illinois Income Tax Act for taxable years | ||
beginning on or after January 1, 2025. | ||
(e) Applicants seeking certification for a tax credits | ||
related to the construction of the project facilities in the | ||
State shall require the contractor to enter into a project | ||
labor agreement that conforms with the Project Labor | ||
Agreements Act. | ||
(f) Any applicant issued a certificate for a tax credit or | ||
tax exemption under this Act must annually report to the | ||
Department the total project tax benefits received. Reports | ||
are due no later than May 31 of each year and shall cover the | ||
previous calendar year. The first report is for the 2022 | ||
calendar year and is due no later than May 31, 2023. | ||
(g) Nothing in this Act shall prohibit an award of credit | ||
to an applicant that uses a PEO if all other award criteria are |
satisfied. | ||
(h) With respect to any portion of a REV Illinois Credit | ||
that is based on the incremental income tax attributable to | ||
new employees or retained employees, in lieu of the Credit | ||
allowed under this Act against the taxes imposed pursuant to | ||
subsections (a) and (b) of Section 201 of the Illinois Income | ||
Tax Act, a taxpayer that otherwise meets the criteria set | ||
forth in this Section, the taxpayer may elect to claim the | ||
credit, on or after January 1, 2025, against its obligation to | ||
pay over withholding under Section 704A of the Illinois Income | ||
Tax Act. The election shall be made in the manner prescribed by | ||
the Department of Revenue and once made shall be irrevocable.
| ||
(Source: P.A. 102-669, eff. 11-16-21.) | ||
(20 ILCS 686/40)
| ||
Sec. 40. Amount and duration of the credits; limitation to | ||
amount of costs of specified items. The Department shall | ||
determine the amount and duration of the REV Illinois Credit | ||
awarded under this Act, subject to the limitations set forth | ||
in this Act. For a project that qualified under paragraph (1), | ||
(2), or (4) of subsection (c) of Section 20, the duration of | ||
the credit may not exceed 15 taxable years , with an
option to | ||
renew the agreement for no more than one term not to
exceed an | ||
additional 15 taxable years . For project that qualified under | ||
paragraph (3) of subsection (c) of Section 20, the duration of | ||
the credit may not exceed 10 taxable years , with an option to |
renew the agreement for no
more than one term not to exceed an | ||
additional 10 taxable
years . The credit may be stated as a | ||
percentage of the incremental income tax and training costs | ||
attributable to the applicant's project and may include a | ||
fixed dollar limitation. | ||
Nothing in this Section shall prevent the Department, in | ||
consultation with the Department of Revenue, from adopting | ||
rules to extend the sunset of any earned, existing, and unused | ||
tax credit or credits a taxpayer may be in possession of, as | ||
provided for in Section 605-1055 of the Department of Commerce | ||
and Economic Opportunity Law of the Civil Administrative Code | ||
of Illinois, notwithstanding the carry-forward provisions | ||
pursuant to paragraph (4) of Section 211 of the Illinois | ||
Income Tax Act.
| ||
(Source: P.A. 102-669, eff. 11-16-21.) | ||
Section 5. The Illinois Income Tax Act is amended by | ||
changing Section 203 as follows: | ||
(35 ILCS 5/203) (from Ch. 120, par. 2-203) | ||
Sec. 203. Base income defined. | ||
(a) Individuals. | ||
(1) In general. In the case of an individual, base | ||
income means an
amount equal to the taxpayer's adjusted | ||
gross income for the taxable
year as modified by paragraph | ||
(2). |
(2) Modifications. The adjusted gross income referred | ||
to in
paragraph (1) shall be modified by adding thereto | ||
the sum of the
following amounts: | ||
(A) An amount equal to all amounts paid or accrued | ||
to the taxpayer
as interest or dividends during the | ||
taxable year to the extent excluded
from gross income | ||
in the computation of adjusted gross income, except | ||
stock
dividends of qualified public utilities | ||
described in Section 305(e) of the
Internal Revenue | ||
Code; | ||
(B) An amount equal to the amount of tax imposed by | ||
this Act to the
extent deducted from gross income in | ||
the computation of adjusted gross
income for the | ||
taxable year; | ||
(C) An amount equal to the amount received during | ||
the taxable year
as a recovery or refund of real | ||
property taxes paid with respect to the
taxpayer's | ||
principal residence under the Revenue Act of
1939 and | ||
for which a deduction was previously taken under | ||
subparagraph (L) of
this paragraph (2) prior to July | ||
1, 1991, the retrospective application date of
Article | ||
4 of Public Act 87-17. In the case of multi-unit or | ||
multi-use
structures and farm dwellings, the taxes on | ||
the taxpayer's principal residence
shall be that | ||
portion of the total taxes for the entire property | ||
which is
attributable to such principal residence; |
(D) An amount equal to the amount of the capital | ||
gain deduction
allowable under the Internal Revenue | ||
Code, to the extent deducted from gross
income in the | ||
computation of adjusted gross income; | ||
(D-5) An amount, to the extent not included in | ||
adjusted gross income,
equal to the amount of money | ||
withdrawn by the taxpayer in the taxable year from
a | ||
medical care savings account and the interest earned | ||
on the account in the
taxable year of a withdrawal | ||
pursuant to subsection (b) of Section 20 of the
| ||
Medical Care Savings Account Act or subsection (b) of | ||
Section 20 of the
Medical Care Savings Account Act of | ||
2000; | ||
(D-10) For taxable years ending after December 31, | ||
1997, an
amount equal to any eligible remediation | ||
costs that the individual
deducted in computing | ||
adjusted gross income and for which the
individual | ||
claims a credit under subsection (l) of Section 201; | ||
(D-15) For taxable years 2001 and thereafter, an | ||
amount equal to the
bonus depreciation deduction taken | ||
on the taxpayer's federal income tax return for the | ||
taxable
year under subsection (k) of Section 168 of | ||
the Internal Revenue Code; | ||
(D-16) If the taxpayer sells, transfers, abandons, | ||
or otherwise disposes of property for which the | ||
taxpayer was required in any taxable year to
make an |
addition modification under subparagraph (D-15), then | ||
an amount equal
to the aggregate amount of the | ||
deductions taken in all taxable
years under | ||
subparagraph (Z) with respect to that property. | ||
If the taxpayer continues to own property through | ||
the last day of the last tax year for which a | ||
subtraction is allowed with respect to that property | ||
under subparagraph (Z) and for which the taxpayer was | ||
allowed in any taxable year to make a subtraction | ||
modification under subparagraph (Z), then an amount | ||
equal to that subtraction modification.
| ||
The taxpayer is required to make the addition | ||
modification under this
subparagraph
only once with | ||
respect to any one piece of property; | ||
(D-17) An amount equal to the amount otherwise | ||
allowed as a deduction in computing base income for | ||
interest paid, accrued, or incurred, directly or | ||
indirectly, (i) for taxable years ending on or after | ||
December 31, 2004, to a foreign person who would be a | ||
member of the same unitary business group but for the | ||
fact that foreign person's business activity outside | ||
the United States is 80% or more of the foreign | ||
person's total business activity and (ii) for taxable | ||
years ending on or after December 31, 2008, to a person | ||
who would be a member of the same unitary business | ||
group but for the fact that the person is prohibited |
under Section 1501(a)(27) from being included in the | ||
unitary business group because he or she is ordinarily | ||
required to apportion business income under different | ||
subsections of Section 304. The addition modification | ||
required by this subparagraph shall be reduced to the | ||
extent that dividends were included in base income of | ||
the unitary group for the same taxable year and | ||
received by the taxpayer or by a member of the | ||
taxpayer's unitary business group (including amounts | ||
included in gross income under Sections 951 through | ||
964 of the Internal Revenue Code and amounts included | ||
in gross income under Section 78 of the Internal | ||
Revenue Code) with respect to the stock of the same | ||
person to whom the interest was paid, accrued, or | ||
incurred. | ||
This paragraph shall not apply to the following:
| ||
(i) an item of interest paid, accrued, or | ||
incurred, directly or indirectly, to a person who | ||
is subject in a foreign country or state, other | ||
than a state which requires mandatory unitary | ||
reporting, to a tax on or measured by net income | ||
with respect to such interest; or | ||
(ii) an item of interest paid, accrued, or | ||
incurred, directly or indirectly, to a person if | ||
the taxpayer can establish, based on a | ||
preponderance of the evidence, both of the |
following: | ||
(a) the person, during the same taxable | ||
year, paid, accrued, or incurred, the interest | ||
to a person that is not a related member, and | ||
(b) the transaction giving rise to the | ||
interest expense between the taxpayer and the | ||
person did not have as a principal purpose the | ||
avoidance of Illinois income tax, and is paid | ||
pursuant to a contract or agreement that | ||
reflects an arm's-length interest rate and | ||
terms; or
| ||
(iii) the taxpayer can establish, based on | ||
clear and convincing evidence, that the interest | ||
paid, accrued, or incurred relates to a contract | ||
or agreement entered into at arm's-length rates | ||
and terms and the principal purpose for the | ||
payment is not federal or Illinois tax avoidance; | ||
or
| ||
(iv) an item of interest paid, accrued, or | ||
incurred, directly or indirectly, to a person if | ||
the taxpayer establishes by clear and convincing | ||
evidence that the adjustments are unreasonable; or | ||
if the taxpayer and the Director agree in writing | ||
to the application or use of an alternative method | ||
of apportionment under Section 304(f).
| ||
Nothing in this subsection shall preclude the |
Director from making any other adjustment | ||
otherwise allowed under Section 404 of this Act | ||
for any tax year beginning after the effective | ||
date of this amendment provided such adjustment is | ||
made pursuant to regulation adopted by the | ||
Department and such regulations provide methods | ||
and standards by which the Department will utilize | ||
its authority under Section 404 of this Act;
| ||
(D-18) An amount equal to the amount of intangible | ||
expenses and costs otherwise allowed as a deduction in | ||
computing base income, and that were paid, accrued, or | ||
incurred, directly or indirectly, (i) for taxable | ||
years ending on or after December 31, 2004, to a | ||
foreign person who would be a member of the same | ||
unitary business group but for the fact that the | ||
foreign person's business activity outside the United | ||
States is 80% or more of that person's total business | ||
activity and (ii) for taxable years ending on or after | ||
December 31, 2008, to a person who would be a member of | ||
the same unitary business group but for the fact that | ||
the person is prohibited under Section 1501(a)(27) | ||
from being included in the unitary business group | ||
because he or she is ordinarily required to apportion | ||
business income under different subsections of Section | ||
304. The addition modification required by this | ||
subparagraph shall be reduced to the extent that |
dividends were included in base income of the unitary | ||
group for the same taxable year and received by the | ||
taxpayer or by a member of the taxpayer's unitary | ||
business group (including amounts included in gross | ||
income under Sections 951 through 964 of the Internal | ||
Revenue Code and amounts included in gross income | ||
under Section 78 of the Internal Revenue Code) with | ||
respect to the stock of the same person to whom the | ||
intangible expenses and costs were directly or | ||
indirectly paid, incurred, or accrued. The preceding | ||
sentence does not apply to the extent that the same | ||
dividends caused a reduction to the addition | ||
modification required under Section 203(a)(2)(D-17) of | ||
this Act. As used in this subparagraph, the term | ||
"intangible expenses and costs" includes (1) expenses, | ||
losses, and costs for, or related to, the direct or | ||
indirect acquisition, use, maintenance or management, | ||
ownership, sale, exchange, or any other disposition of | ||
intangible property; (2) losses incurred, directly or | ||
indirectly, from factoring transactions or discounting | ||
transactions; (3) royalty, patent, technical, and | ||
copyright fees; (4) licensing fees; and (5) other | ||
similar expenses and costs.
For purposes of this | ||
subparagraph, "intangible property" includes patents, | ||
patent applications, trade names, trademarks, service | ||
marks, copyrights, mask works, trade secrets, and |
similar types of intangible assets. | ||
This paragraph shall not apply to the following: | ||
(i) any item of intangible expenses or costs | ||
paid, accrued, or incurred, directly or | ||
indirectly, from a transaction with a person who | ||
is subject in a foreign country or state, other | ||
than a state which requires mandatory unitary | ||
reporting, to a tax on or measured by net income | ||
with respect to such item; or | ||
(ii) any item of intangible expense or cost | ||
paid, accrued, or incurred, directly or | ||
indirectly, if the taxpayer can establish, based | ||
on a preponderance of the evidence, both of the | ||
following: | ||
(a) the person during the same taxable | ||
year paid, accrued, or incurred, the | ||
intangible expense or cost to a person that is | ||
not a related member, and | ||
(b) the transaction giving rise to the | ||
intangible expense or cost between the | ||
taxpayer and the person did not have as a | ||
principal purpose the avoidance of Illinois | ||
income tax, and is paid pursuant to a contract | ||
or agreement that reflects arm's-length terms; | ||
or | ||
(iii) any item of intangible expense or cost |
paid, accrued, or incurred, directly or | ||
indirectly, from a transaction with a person if | ||
the taxpayer establishes by clear and convincing | ||
evidence, that the adjustments are unreasonable; | ||
or if the taxpayer and the Director agree in | ||
writing to the application or use of an | ||
alternative method of apportionment under Section | ||
304(f);
| ||
Nothing in this subsection shall preclude the | ||
Director from making any other adjustment | ||
otherwise allowed under Section 404 of this Act | ||
for any tax year beginning after the effective | ||
date of this amendment provided such adjustment is | ||
made pursuant to regulation adopted by the | ||
Department and such regulations provide methods | ||
and standards by which the Department will utilize | ||
its authority under Section 404 of this Act;
| ||
(D-19) For taxable years ending on or after | ||
December 31, 2008, an amount equal to the amount of | ||
insurance premium expenses and costs otherwise allowed | ||
as a deduction in computing base income, and that were | ||
paid, accrued, or incurred, directly or indirectly, to | ||
a person who would be a member of the same unitary | ||
business group but for the fact that the person is | ||
prohibited under Section 1501(a)(27) from being | ||
included in the unitary business group because he or |
she is ordinarily required to apportion business | ||
income under different subsections of Section 304. The | ||
addition modification required by this subparagraph | ||
shall be reduced to the extent that dividends were | ||
included in base income of the unitary group for the | ||
same taxable year and received by the taxpayer or by a | ||
member of the taxpayer's unitary business group | ||
(including amounts included in gross income under | ||
Sections 951 through 964 of the Internal Revenue Code | ||
and amounts included in gross income under Section 78 | ||
of the Internal Revenue Code) with respect to the | ||
stock of the same person to whom the premiums and costs | ||
were directly or indirectly paid, incurred, or | ||
accrued. The preceding sentence does not apply to the | ||
extent that the same dividends caused a reduction to | ||
the addition modification required under Section | ||
203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this | ||
Act;
| ||
(D-20) For taxable years beginning on or after | ||
January 1,
2002 and ending on or before December 31, | ||
2006, in
the
case of a distribution from a qualified | ||
tuition program under Section 529 of
the Internal | ||
Revenue Code, other than (i) a distribution from a | ||
College Savings
Pool created under Section 16.5 of the | ||
State Treasurer Act or (ii) a
distribution from the | ||
Illinois Prepaid Tuition Trust Fund, an amount equal |
to
the amount excluded from gross income under Section | ||
529(c)(3)(B). For taxable years beginning on or after | ||
January 1, 2007, in the case of a distribution from a | ||
qualified tuition program under Section 529 of the | ||
Internal Revenue Code, other than (i) a distribution | ||
from a College Savings Pool created under Section 16.5 | ||
of the State Treasurer Act, (ii) a distribution from | ||
the Illinois Prepaid Tuition Trust Fund, or (iii) a | ||
distribution from a qualified tuition program under | ||
Section 529 of the Internal Revenue Code that (I) | ||
adopts and determines that its offering materials | ||
comply with the College Savings Plans Network's | ||
disclosure principles and (II) has made reasonable | ||
efforts to inform in-state residents of the existence | ||
of in-state qualified tuition programs by informing | ||
Illinois residents directly and, where applicable, to | ||
inform financial intermediaries distributing the | ||
program to inform in-state residents of the existence | ||
of in-state qualified tuition programs at least | ||
annually, an amount equal to the amount excluded from | ||
gross income under Section 529(c)(3)(B). | ||
For the purposes of this subparagraph (D-20), a | ||
qualified tuition program has made reasonable efforts | ||
if it makes disclosures (which may use the term | ||
"in-state program" or "in-state plan" and need not | ||
specifically refer to Illinois or its qualified |
programs by name) (i) directly to prospective | ||
participants in its offering materials or makes a | ||
public disclosure, such as a website posting; and (ii) | ||
where applicable, to intermediaries selling the | ||
out-of-state program in the same manner that the | ||
out-of-state program distributes its offering | ||
materials; | ||
(D-20.5) For taxable years beginning on or after | ||
January 1, 2018, in the case of a distribution from a | ||
qualified ABLE program under Section 529A of the | ||
Internal Revenue Code, other than a distribution from | ||
a qualified ABLE program created under Section 16.6 of | ||
the State Treasurer Act, an amount equal to the amount | ||
excluded from gross income under Section 529A(c)(1)(B) | ||
of the Internal Revenue Code; | ||
(D-21) For taxable years beginning on or after | ||
January 1, 2007, in the case of transfer of moneys from | ||
a qualified tuition program under Section 529 of the | ||
Internal Revenue Code that is administered by the | ||
State to an out-of-state program, an amount equal to | ||
the amount of moneys previously deducted from base | ||
income under subsection (a)(2)(Y) of this Section; | ||
(D-21.5) For taxable years beginning on or after | ||
January 1, 2018, in the case of the transfer of moneys | ||
from a qualified tuition program under Section 529 or | ||
a qualified ABLE program under Section 529A of the |
Internal Revenue Code that is administered by this | ||
State to an ABLE account established under an | ||
out-of-state ABLE account program, an amount equal to | ||
the contribution component of the transferred amount | ||
that was previously deducted from base income under | ||
subsection (a)(2)(Y) or subsection (a)(2)(HH) of this | ||
Section; | ||
(D-22) For taxable years beginning on or after | ||
January 1, 2009, and prior to January 1, 2018, in the | ||
case of a nonqualified withdrawal or refund of moneys | ||
from a qualified tuition program under Section 529 of | ||
the Internal Revenue Code administered by the State | ||
that is not used for qualified expenses at an eligible | ||
education institution, an amount equal to the | ||
contribution component of the nonqualified withdrawal | ||
or refund that was previously deducted from base | ||
income under subsection (a)(2)(y) of this Section, | ||
provided that the withdrawal or refund did not result | ||
from the beneficiary's death or disability. For | ||
taxable years beginning on or after January 1, 2018: | ||
(1) in the case of a nonqualified withdrawal or | ||
refund, as defined under Section
16.5 of the State | ||
Treasurer Act, of moneys from a qualified tuition | ||
program under Section 529 of the Internal Revenue Code | ||
administered by the State, an amount equal to the | ||
contribution component of the nonqualified withdrawal |
or refund that was previously deducted from base
| ||
income under subsection (a)(2)(Y) of this Section, and | ||
(2) in the case of a nonqualified withdrawal or refund | ||
from a qualified ABLE program under Section 529A of | ||
the Internal Revenue Code administered by the State | ||
that is not used for qualified disability expenses, an | ||
amount equal to the contribution component of the | ||
nonqualified withdrawal or refund that was previously | ||
deducted from base income under subsection (a)(2)(HH) | ||
of this Section; | ||
(D-23) An amount equal to the credit allowable to | ||
the taxpayer under Section 218(a) of this Act, | ||
determined without regard to Section 218(c) of this | ||
Act; | ||
(D-24) For taxable years ending on or after | ||
December 31, 2017, an amount equal to the deduction | ||
allowed under Section 199 of the Internal Revenue Code | ||
for the taxable year; | ||
(D-25) In the case of a resident, an amount equal | ||
to the amount of tax for which a credit is allowed | ||
pursuant to Section 201(p)(7) of this Act; | ||
and by deducting from the total so obtained the
sum of the | ||
following amounts: | ||
(E) For taxable years ending before December 31, | ||
2001,
any amount included in such total in respect of | ||
any compensation
(including but not limited to any |
compensation paid or accrued to a
serviceman while a | ||
prisoner of war or missing in action) paid to a | ||
resident
by reason of being on active duty in the Armed | ||
Forces of the United States
and in respect of any | ||
compensation paid or accrued to a resident who as a
| ||
governmental employee was a prisoner of war or missing | ||
in action, and in
respect of any compensation paid to a | ||
resident in 1971 or thereafter for
annual training | ||
performed pursuant to Sections 502 and 503, Title 32,
| ||
United States Code as a member of the Illinois | ||
National Guard or, beginning with taxable years ending | ||
on or after December 31, 2007, the National Guard of | ||
any other state.
For taxable years ending on or after | ||
December 31, 2001, any amount included in
such total | ||
in respect of any compensation (including but not | ||
limited to any
compensation paid or accrued to a | ||
serviceman while a prisoner of war or missing
in | ||
action) paid to a resident by reason of being a member | ||
of any component of
the Armed Forces of the United | ||
States and in respect of any compensation paid
or | ||
accrued to a resident who as a governmental employee | ||
was a prisoner of war
or missing in action, and in | ||
respect of any compensation paid to a resident in
2001 | ||
or thereafter by reason of being a member of the | ||
Illinois National Guard or, beginning with taxable | ||
years ending on or after December 31, 2007, the |
National Guard of any other state.
The provisions of | ||
this subparagraph (E) are exempt
from the provisions | ||
of Section 250; | ||
(F) An amount equal to all amounts included in | ||
such total pursuant
to the provisions of Sections | ||
402(a), 402(c), 403(a), 403(b), 406(a), 407(a),
and | ||
408 of the Internal Revenue Code, or included in such | ||
total as
distributions under the provisions of any | ||
retirement or disability plan for
employees of any | ||
governmental agency or unit, or retirement payments to
| ||
retired partners, which payments are excluded in | ||
computing net earnings
from self employment by Section | ||
1402 of the Internal Revenue Code and
regulations | ||
adopted pursuant thereto; | ||
(G) The valuation limitation amount; | ||
(H) An amount equal to the amount of any tax | ||
imposed by this Act
which was refunded to the taxpayer | ||
and included in such total for the
taxable year; | ||
(I) An amount equal to all amounts included in | ||
such total pursuant
to the provisions of Section 111 | ||
of the Internal Revenue Code as a
recovery of items | ||
previously deducted from adjusted gross income in the
| ||
computation of taxable income; | ||
(J) An amount equal to those dividends included in | ||
such total which were
paid by a corporation which | ||
conducts business operations in a River Edge |
Redevelopment Zone or zones created under the River | ||
Edge Redevelopment Zone Act, and conducts
| ||
substantially all of its operations in a River Edge | ||
Redevelopment Zone or zones. This subparagraph (J) is | ||
exempt from the provisions of Section 250; | ||
(K) An amount equal to those dividends included in | ||
such total that
were paid by a corporation that | ||
conducts business operations in a federally
designated | ||
Foreign Trade Zone or Sub-Zone and that is designated | ||
a High Impact
Business located in Illinois; provided | ||
that dividends eligible for the
deduction provided in | ||
subparagraph (J) of paragraph (2) of this subsection
| ||
shall not be eligible for the deduction provided under | ||
this subparagraph
(K); | ||
(L) For taxable years ending after December 31, | ||
1983, an amount equal to
all social security benefits | ||
and railroad retirement benefits included in
such | ||
total pursuant to Sections 72(r) and 86 of the | ||
Internal Revenue Code; | ||
(M) With the exception of any amounts subtracted | ||
under subparagraph
(N), an amount equal to the sum of | ||
all amounts disallowed as
deductions by (i) Sections | ||
171(a)(2) and 265(a)(2) of the Internal Revenue Code, | ||
and all amounts of expenses allocable
to interest and | ||
disallowed as deductions by Section 265(a)(1) of the | ||
Internal
Revenue Code;
and (ii) for taxable years
|
ending on or after August 13, 1999, Sections | ||
171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of the | ||
Internal Revenue Code, plus, for taxable years ending | ||
on or after December 31, 2011, Section 45G(e)(3) of | ||
the Internal Revenue Code and, for taxable years | ||
ending on or after December 31, 2008, any amount | ||
included in gross income under Section 87 of the | ||
Internal Revenue Code; the provisions of this
| ||
subparagraph are exempt from the provisions of Section | ||
250; | ||
(N) An amount equal to all amounts included in | ||
such total which are
exempt from taxation by this | ||
State either by reason of its statutes or
Constitution
| ||
or by reason of the Constitution, treaties or statutes | ||
of the United States;
provided that, in the case of any | ||
statute of this State that exempts income
derived from | ||
bonds or other obligations from the tax imposed under | ||
this Act,
the amount exempted shall be the interest | ||
net of bond premium amortization; | ||
(O) An amount equal to any contribution made to a | ||
job training
project established pursuant to the Tax | ||
Increment Allocation Redevelopment Act; | ||
(P) An amount equal to the amount of the deduction | ||
used to compute the
federal income tax credit for | ||
restoration of substantial amounts held under
claim of | ||
right for the taxable year pursuant to Section 1341 of |
the
Internal Revenue Code or of any itemized deduction | ||
taken from adjusted gross income in the computation of | ||
taxable income for restoration of substantial amounts | ||
held under claim of right for the taxable year; | ||
(Q) An amount equal to any amounts included in | ||
such total, received by
the taxpayer as an | ||
acceleration in the payment of life, endowment or | ||
annuity
benefits in advance of the time they would | ||
otherwise be payable as an indemnity
for a terminal | ||
illness; | ||
(R) An amount equal to the amount of any federal or | ||
State bonus paid
to veterans of the Persian Gulf War; | ||
(S) An amount, to the extent included in adjusted | ||
gross income, equal
to the amount of a contribution | ||
made in the taxable year on behalf of the
taxpayer to a | ||
medical care savings account established under the | ||
Medical Care
Savings Account Act or the Medical Care | ||
Savings Account Act of 2000 to the
extent the | ||
contribution is accepted by the account
administrator | ||
as provided in that Act; | ||
(T) An amount, to the extent included in adjusted | ||
gross income, equal to
the amount of interest earned | ||
in the taxable year on a medical care savings
account | ||
established under the Medical Care Savings Account Act | ||
or the Medical
Care Savings Account Act of 2000 on | ||
behalf of the
taxpayer, other than interest added |
pursuant to item (D-5) of this paragraph
(2); | ||
(U) For one taxable year beginning on or after | ||
January 1,
1994, an
amount equal to the total amount of | ||
tax imposed and paid under subsections (a)
and (b) of | ||
Section 201 of this Act on grant amounts received by | ||
the taxpayer
under the Nursing Home Grant Assistance | ||
Act during the taxpayer's taxable years
1992 and 1993; | ||
(V) Beginning with tax years ending on or after | ||
December 31, 1995 and
ending with tax years ending on | ||
or before December 31, 2004, an amount equal to
the | ||
amount paid by a taxpayer who is a
self-employed | ||
taxpayer, a partner of a partnership, or a
shareholder | ||
in a Subchapter S corporation for health insurance or | ||
long-term
care insurance for that taxpayer or that | ||
taxpayer's spouse or dependents, to
the extent that | ||
the amount paid for that health insurance or long-term | ||
care
insurance may be deducted under Section 213 of | ||
the Internal Revenue Code, has not been deducted on | ||
the federal income tax return of the taxpayer,
and | ||
does not exceed the taxable income attributable to | ||
that taxpayer's income,
self-employment income, or | ||
Subchapter S corporation income; except that no
| ||
deduction shall be allowed under this item (V) if the | ||
taxpayer is eligible to
participate in any health | ||
insurance or long-term care insurance plan of an
| ||
employer of the taxpayer or the taxpayer's
spouse. The |
amount of the health insurance and long-term care | ||
insurance
subtracted under this item (V) shall be | ||
determined by multiplying total
health insurance and | ||
long-term care insurance premiums paid by the taxpayer
| ||
times a number that represents the fractional | ||
percentage of eligible medical
expenses under Section | ||
213 of the Internal Revenue Code of 1986 not actually
| ||
deducted on the taxpayer's federal income tax return; | ||
(W) For taxable years beginning on or after | ||
January 1, 1998,
all amounts included in the | ||
taxpayer's federal gross income
in the taxable year | ||
from amounts converted from a regular IRA to a Roth | ||
IRA.
This paragraph is exempt from the provisions of | ||
Section
250; | ||
(X) For taxable year 1999 and thereafter, an | ||
amount equal to the
amount of any (i) distributions, | ||
to the extent includible in gross income for
federal | ||
income tax purposes, made to the taxpayer because of | ||
his or her status
as a victim of persecution for racial | ||
or religious reasons by Nazi Germany or
any other Axis | ||
regime or as an heir of the victim and (ii) items
of | ||
income, to the extent
includible in gross income for | ||
federal income tax purposes, attributable to,
derived | ||
from or in any way related to assets stolen from, | ||
hidden from, or
otherwise lost to a victim of
| ||
persecution for racial or religious reasons by Nazi |
Germany or any other Axis
regime immediately prior to, | ||
during, and immediately after World War II,
including, | ||
but
not limited to, interest on the proceeds | ||
receivable as insurance
under policies issued to a | ||
victim of persecution for racial or religious
reasons
| ||
by Nazi Germany or any other Axis regime by European | ||
insurance companies
immediately prior to and during | ||
World War II;
provided, however, this subtraction from | ||
federal adjusted gross income does not
apply to assets | ||
acquired with such assets or with the proceeds from | ||
the sale of
such assets; provided, further, this | ||
paragraph shall only apply to a taxpayer
who was the | ||
first recipient of such assets after their recovery | ||
and who is a
victim of persecution for racial or | ||
religious reasons
by Nazi Germany or any other Axis | ||
regime or as an heir of the victim. The
amount of and | ||
the eligibility for any public assistance, benefit, or
| ||
similar entitlement is not affected by the inclusion | ||
of items (i) and (ii) of
this paragraph in gross income | ||
for federal income tax purposes.
This paragraph is | ||
exempt from the provisions of Section 250; | ||
(Y) For taxable years beginning on or after | ||
January 1, 2002
and ending
on or before December 31, | ||
2004, moneys contributed in the taxable year to a | ||
College Savings Pool account under
Section 16.5 of the | ||
State Treasurer Act, except that amounts excluded from
|
gross income under Section 529(c)(3)(C)(i) of the | ||
Internal Revenue Code
shall not be considered moneys | ||
contributed under this subparagraph (Y). For taxable | ||
years beginning on or after January 1, 2005, a maximum | ||
of $10,000
contributed
in the
taxable year to (i) a | ||
College Savings Pool account under Section 16.5 of the
| ||
State
Treasurer Act or (ii) the Illinois Prepaid | ||
Tuition Trust Fund,
except that
amounts excluded from | ||
gross income under Section 529(c)(3)(C)(i) of the
| ||
Internal
Revenue Code shall not be considered moneys | ||
contributed under this subparagraph
(Y). For purposes | ||
of this subparagraph, contributions made by an | ||
employer on behalf of an employee, or matching | ||
contributions made by an employee, shall be treated as | ||
made by the employee. This
subparagraph (Y) is exempt | ||
from the provisions of Section 250; | ||
(Z) For taxable years 2001 and thereafter, for the | ||
taxable year in
which the bonus depreciation deduction
| ||
is taken on the taxpayer's federal income tax return | ||
under
subsection (k) of Section 168 of the Internal | ||
Revenue Code and for each
applicable taxable year | ||
thereafter, an amount equal to "x", where: | ||
(1) "y" equals the amount of the depreciation | ||
deduction taken for the
taxable year
on the | ||
taxpayer's federal income tax return on property | ||
for which the bonus
depreciation deduction
was |
taken in any year under subsection (k) of Section | ||
168 of the Internal
Revenue Code, but not | ||
including the bonus depreciation deduction; | ||
(2) for taxable years ending on or before | ||
December 31, 2005, "x" equals "y" multiplied by 30 | ||
and then divided by 70 (or "y"
multiplied by | ||
0.429); and | ||
(3) for taxable years ending after December | ||
31, 2005: | ||
(i) for property on which a bonus | ||
depreciation deduction of 30% of the adjusted | ||
basis was taken, "x" equals "y" multiplied by | ||
30 and then divided by 70 (or "y"
multiplied | ||
by 0.429); | ||
(ii) for property on which a bonus | ||
depreciation deduction of 50% of the adjusted | ||
basis was taken, "x" equals "y" multiplied by | ||
1.0; | ||
(iii) for property on which a bonus | ||
depreciation deduction of 100% of the adjusted | ||
basis was taken in a taxable year ending on or | ||
after December 31, 2021, "x" equals the | ||
depreciation deduction that would be allowed | ||
on that property if the taxpayer had made the | ||
election under Section 168(k)(7) of the | ||
Internal Revenue Code to not claim bonus |
depreciation on that property; and | ||
(iv) for property on which a bonus | ||
depreciation deduction of a percentage other | ||
than 30%, 50% or 100% of the adjusted basis | ||
was taken in a taxable year ending on or after | ||
December 31, 2021, "x" equals "y" multiplied | ||
by 100 times the percentage bonus depreciation | ||
on the property (that is, 100(bonus%)) and | ||
then divided by 100 times 1 minus the | ||
percentage bonus depreciation on the property | ||
(that is, 100(1–bonus%)). | ||
The aggregate amount deducted under this | ||
subparagraph in all taxable
years for any one piece of | ||
property may not exceed the amount of the bonus
| ||
depreciation deduction
taken on that property on the | ||
taxpayer's federal income tax return under
subsection | ||
(k) of Section 168 of the Internal Revenue Code. This | ||
subparagraph (Z) is exempt from the provisions of | ||
Section 250; | ||
(AA) If the taxpayer sells, transfers, abandons, | ||
or otherwise disposes of
property for which the | ||
taxpayer was required in any taxable year to make an
| ||
addition modification under subparagraph (D-15), then | ||
an amount equal to that
addition modification.
| ||
If the taxpayer continues to own property through | ||
the last day of the last tax year for which a |
subtraction is allowed with respect to that property | ||
under subparagraph (Z) and for which the taxpayer was | ||
required in any taxable year to make an addition | ||
modification under subparagraph (D-15), then an amount | ||
equal to that addition modification.
| ||
The taxpayer is allowed to take the deduction | ||
under this subparagraph
only once with respect to any | ||
one piece of property. | ||
This subparagraph (AA) is exempt from the | ||
provisions of Section 250; | ||
(BB) Any amount included in adjusted gross income, | ||
other
than
salary,
received by a driver in a | ||
ridesharing arrangement using a motor vehicle; | ||
(CC) The amount of (i) any interest income (net of | ||
the deductions allocable thereto) taken into account | ||
for the taxable year with respect to a transaction | ||
with a taxpayer that is required to make an addition | ||
modification with respect to such transaction under | ||
Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||
203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||
the amount of that addition modification, and
(ii) any | ||
income from intangible property (net of the deductions | ||
allocable thereto) taken into account for the taxable | ||
year with respect to a transaction with a taxpayer | ||
that is required to make an addition modification with | ||
respect to such transaction under Section |
203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||
203(d)(2)(D-8), but not to exceed the amount of that | ||
addition modification. This subparagraph (CC) is | ||
exempt from the provisions of Section 250; | ||
(DD) An amount equal to the interest income taken | ||
into account for the taxable year (net of the | ||
deductions allocable thereto) with respect to | ||
transactions with (i) a foreign person who would be a | ||
member of the taxpayer's unitary business group but | ||
for the fact that the foreign person's business | ||
activity outside the United States is 80% or more of | ||
that person's total business activity and (ii) for | ||
taxable years ending on or after December 31, 2008, to | ||
a person who would be a member of the same unitary | ||
business group but for the fact that the person is | ||
prohibited under Section 1501(a)(27) from being | ||
included in the unitary business group because he or | ||
she is ordinarily required to apportion business | ||
income under different subsections of Section 304, but | ||
not to exceed the addition modification required to be | ||
made for the same taxable year under Section | ||
203(a)(2)(D-17) for interest paid, accrued, or | ||
incurred, directly or indirectly, to the same person. | ||
This subparagraph (DD) is exempt from the provisions | ||
of Section 250; | ||
(EE) An amount equal to the income from intangible |
property taken into account for the taxable year (net | ||
of the deductions allocable thereto) with respect to | ||
transactions with (i) a foreign person who would be a | ||
member of the taxpayer's unitary business group but | ||
for the fact that the foreign person's business | ||
activity outside the United States is 80% or more of | ||
that person's total business activity and (ii) for | ||
taxable years ending on or after December 31, 2008, to | ||
a person who would be a member of the same unitary | ||
business group but for the fact that the person is | ||
prohibited under Section 1501(a)(27) from being | ||
included in the unitary business group because he or | ||
she is ordinarily required to apportion business | ||
income under different subsections of Section 304, but | ||
not to exceed the addition modification required to be | ||
made for the same taxable year under Section | ||
203(a)(2)(D-18) for intangible expenses and costs | ||
paid, accrued, or incurred, directly or indirectly, to | ||
the same foreign person. This subparagraph (EE) is | ||
exempt from the provisions of Section 250; | ||
(FF) An amount equal to any amount awarded to the | ||
taxpayer during the taxable year by the Court of | ||
Claims under subsection (c) of Section 8 of the Court | ||
of Claims Act for time unjustly served in a State | ||
prison. This subparagraph (FF) is exempt from the | ||
provisions of Section 250; |
(GG) For taxable years ending on or after December | ||
31, 2011, in the case of a taxpayer who was required to | ||
add back any insurance premiums under Section | ||
203(a)(2)(D-19), such taxpayer may elect to subtract | ||
that part of a reimbursement received from the | ||
insurance company equal to the amount of the expense | ||
or loss (including expenses incurred by the insurance | ||
company) that would have been taken into account as a | ||
deduction for federal income tax purposes if the | ||
expense or loss had been uninsured. If a taxpayer | ||
makes the election provided for by this subparagraph | ||
(GG), the insurer to which the premiums were paid must | ||
add back to income the amount subtracted by the | ||
taxpayer pursuant to this subparagraph (GG). This | ||
subparagraph (GG) is exempt from the provisions of | ||
Section 250; and | ||
(HH) For taxable years beginning on or after | ||
January 1, 2018 and prior to January 1, 2028 January 1, | ||
2023 , a maximum of $10,000 contributed in the taxable | ||
year to a qualified ABLE account under Section 16.6 of | ||
the State Treasurer Act, except that amounts excluded | ||
from gross income under Section 529(c)(3)(C)(i) or | ||
Section 529A(c)(1)(C) of the Internal Revenue Code | ||
shall not be considered moneys contributed under this | ||
subparagraph (HH). For purposes of this subparagraph | ||
(HH), contributions made by an employer on behalf of |
an employee, or matching contributions made by an | ||
employee, shall be treated as made by the employee ; | ||
and . | ||
(II) For taxable years that begin on or after | ||
January 1, 2021 and begin before January 1, 2026, the | ||
amount that is included in the taxpayer's federal | ||
adjusted gross income pursuant to Section 61 of the | ||
Internal Revenue Code as discharge of indebtedness | ||
attributable to student loan forgiveness and that is | ||
not excluded from the taxpayer's federal adjusted | ||
gross income pursuant to paragraph (5) of subsection | ||
(f) of Section 108 of the Internal Revenue Code. | ||
(b) Corporations. | ||
(1) In general. In the case of a corporation, base | ||
income means an
amount equal to the taxpayer's taxable | ||
income for the taxable year as
modified by paragraph (2). | ||
(2) Modifications. The taxable income referred to in | ||
paragraph (1)
shall be modified by adding thereto the sum | ||
of the following amounts: | ||
(A) An amount equal to all amounts paid or accrued | ||
to the taxpayer
as interest and all distributions | ||
received from regulated investment
companies during | ||
the taxable year to the extent excluded from gross
| ||
income in the computation of taxable income; | ||
(B) An amount equal to the amount of tax imposed by |
this Act to the
extent deducted from gross income in | ||
the computation of taxable income
for the taxable | ||
year; | ||
(C) In the case of a regulated investment company, | ||
an amount equal to
the excess of (i) the net long-term | ||
capital gain for the taxable year, over
(ii) the | ||
amount of the capital gain dividends designated as | ||
such in accordance
with Section 852(b)(3)(C) of the | ||
Internal Revenue Code and any amount
designated under | ||
Section 852(b)(3)(D) of the Internal Revenue Code,
| ||
attributable to the taxable year (this amendatory Act | ||
of 1995
(Public Act 89-89) is declarative of existing | ||
law and is not a new
enactment); | ||
(D) The amount of any net operating loss deduction | ||
taken in arriving
at taxable income, other than a net | ||
operating loss carried forward from a
taxable year | ||
ending prior to December 31, 1986; | ||
(E) For taxable years in which a net operating | ||
loss carryback or
carryforward from a taxable year | ||
ending prior to December 31, 1986 is an
element of | ||
taxable income under paragraph (1) of subsection (e) | ||
or
subparagraph (E) of paragraph (2) of subsection | ||
(e), the amount by which
addition modifications other | ||
than those provided by this subparagraph (E)
exceeded | ||
subtraction modifications in such earlier taxable | ||
year, with the
following limitations applied in the |
order that they are listed: | ||
(i) the addition modification relating to the | ||
net operating loss
carried back or forward to the | ||
taxable year from any taxable year ending
prior to | ||
December 31, 1986 shall be reduced by the amount | ||
of addition
modification under this subparagraph | ||
(E) which related to that net operating
loss and | ||
which was taken into account in calculating the | ||
base income of an
earlier taxable year, and | ||
(ii) the addition modification relating to the | ||
net operating loss
carried back or forward to the | ||
taxable year from any taxable year ending
prior to | ||
December 31, 1986 shall not exceed the amount of | ||
such carryback or
carryforward; | ||
For taxable years in which there is a net | ||
operating loss carryback or
carryforward from more | ||
than one other taxable year ending prior to December
| ||
31, 1986, the addition modification provided in this | ||
subparagraph (E) shall
be the sum of the amounts | ||
computed independently under the preceding
provisions | ||
of this subparagraph (E) for each such taxable year; | ||
(E-5) For taxable years ending after December 31, | ||
1997, an
amount equal to any eligible remediation | ||
costs that the corporation
deducted in computing | ||
adjusted gross income and for which the
corporation | ||
claims a credit under subsection (l) of Section 201; |
(E-10) For taxable years 2001 and thereafter, an | ||
amount equal to the
bonus depreciation deduction taken | ||
on the taxpayer's federal income tax return for the | ||
taxable
year under subsection (k) of Section 168 of | ||
the Internal Revenue Code; | ||
(E-11) If the taxpayer sells, transfers, abandons, | ||
or otherwise disposes of property for which the | ||
taxpayer was required in any taxable year to
make an | ||
addition modification under subparagraph (E-10), then | ||
an amount equal
to the aggregate amount of the | ||
deductions taken in all taxable
years under | ||
subparagraph (T) with respect to that property. | ||
If the taxpayer continues to own property through | ||
the last day of the last tax year for which a | ||
subtraction is allowed with respect to that property | ||
under subparagraph (T) and for which the taxpayer was | ||
allowed in any taxable year to make a subtraction | ||
modification under subparagraph (T), then an amount | ||
equal to that subtraction modification.
| ||
The taxpayer is required to make the addition | ||
modification under this
subparagraph
only once with | ||
respect to any one piece of property; | ||
(E-12) An amount equal to the amount otherwise | ||
allowed as a deduction in computing base income for | ||
interest paid, accrued, or incurred, directly or | ||
indirectly, (i) for taxable years ending on or after |
December 31, 2004, to a foreign person who would be a | ||
member of the same unitary business group but for the | ||
fact the foreign person's business activity outside | ||
the United States is 80% or more of the foreign | ||
person's total business activity and (ii) for taxable | ||
years ending on or after December 31, 2008, to a person | ||
who would be a member of the same unitary business | ||
group but for the fact that the person is prohibited | ||
under Section 1501(a)(27) from being included in the | ||
unitary business group because he or she is ordinarily | ||
required to apportion business income under different | ||
subsections of Section 304. The addition modification | ||
required by this subparagraph shall be reduced to the | ||
extent that dividends were included in base income of | ||
the unitary group for the same taxable year and | ||
received by the taxpayer or by a member of the | ||
taxpayer's unitary business group (including amounts | ||
included in gross income pursuant to Sections 951 | ||
through 964 of the Internal Revenue Code and amounts | ||
included in gross income under Section 78 of the | ||
Internal Revenue Code) with respect to the stock of | ||
the same person to whom the interest was paid, | ||
accrued, or incurred.
| ||
This paragraph shall not apply to the following:
| ||
(i) an item of interest paid, accrued, or | ||
incurred, directly or indirectly, to a person who |
is subject in a foreign country or state, other | ||
than a state which requires mandatory unitary | ||
reporting, to a tax on or measured by net income | ||
with respect to such interest; or | ||
(ii) an item of interest paid, accrued, or | ||
incurred, directly or indirectly, to a person if | ||
the taxpayer can establish, based on a | ||
preponderance of the evidence, both of the | ||
following: | ||
(a) the person, during the same taxable | ||
year, paid, accrued, or incurred, the interest | ||
to a person that is not a related member, and | ||
(b) the transaction giving rise to the | ||
interest expense between the taxpayer and the | ||
person did not have as a principal purpose the | ||
avoidance of Illinois income tax, and is paid | ||
pursuant to a contract or agreement that | ||
reflects an arm's-length interest rate and | ||
terms; or
| ||
(iii) the taxpayer can establish, based on | ||
clear and convincing evidence, that the interest | ||
paid, accrued, or incurred relates to a contract | ||
or agreement entered into at arm's-length rates | ||
and terms and the principal purpose for the | ||
payment is not federal or Illinois tax avoidance; | ||
or
|
(iv) an item of interest paid, accrued, or | ||
incurred, directly or indirectly, to a person if | ||
the taxpayer establishes by clear and convincing | ||
evidence that the adjustments are unreasonable; or | ||
if the taxpayer and the Director agree in writing | ||
to the application or use of an alternative method | ||
of apportionment under Section 304(f).
| ||
Nothing in this subsection shall preclude the | ||
Director from making any other adjustment | ||
otherwise allowed under Section 404 of this Act | ||
for any tax year beginning after the effective | ||
date of this amendment provided such adjustment is | ||
made pursuant to regulation adopted by the | ||
Department and such regulations provide methods | ||
and standards by which the Department will utilize | ||
its authority under Section 404 of this Act;
| ||
(E-13) An amount equal to the amount of intangible | ||
expenses and costs otherwise allowed as a deduction in | ||
computing base income, and that were paid, accrued, or | ||
incurred, directly or indirectly, (i) for taxable | ||
years ending on or after December 31, 2004, to a | ||
foreign person who would be a member of the same | ||
unitary business group but for the fact that the | ||
foreign person's business activity outside the United | ||
States is 80% or more of that person's total business | ||
activity and (ii) for taxable years ending on or after |
December 31, 2008, to a person who would be a member of | ||
the same unitary business group but for the fact that | ||
the person is prohibited under Section 1501(a)(27) | ||
from being included in the unitary business group | ||
because he or she is ordinarily required to apportion | ||
business income under different subsections of Section | ||
304. The addition modification required by this | ||
subparagraph shall be reduced to the extent that | ||
dividends were included in base income of the unitary | ||
group for the same taxable year and received by the | ||
taxpayer or by a member of the taxpayer's unitary | ||
business group (including amounts included in gross | ||
income pursuant to Sections 951 through 964 of the | ||
Internal Revenue Code and amounts included in gross | ||
income under Section 78 of the Internal Revenue Code) | ||
with respect to the stock of the same person to whom | ||
the intangible expenses and costs were directly or | ||
indirectly paid, incurred, or accrued. The preceding | ||
sentence shall not apply to the extent that the same | ||
dividends caused a reduction to the addition | ||
modification required under Section 203(b)(2)(E-12) of | ||
this Act.
As used in this subparagraph, the term | ||
"intangible expenses and costs" includes (1) expenses, | ||
losses, and costs for, or related to, the direct or | ||
indirect acquisition, use, maintenance or management, | ||
ownership, sale, exchange, or any other disposition of |
intangible property; (2) losses incurred, directly or | ||
indirectly, from factoring transactions or discounting | ||
transactions; (3) royalty, patent, technical, and | ||
copyright fees; (4) licensing fees; and (5) other | ||
similar expenses and costs.
For purposes of this | ||
subparagraph, "intangible property" includes patents, | ||
patent applications, trade names, trademarks, service | ||
marks, copyrights, mask works, trade secrets, and | ||
similar types of intangible assets. | ||
This paragraph shall not apply to the following: | ||
(i) any item of intangible expenses or costs | ||
paid, accrued, or incurred, directly or | ||
indirectly, from a transaction with a person who | ||
is subject in a foreign country or state, other | ||
than a state which requires mandatory unitary | ||
reporting, to a tax on or measured by net income | ||
with respect to such item; or | ||
(ii) any item of intangible expense or cost | ||
paid, accrued, or incurred, directly or | ||
indirectly, if the taxpayer can establish, based | ||
on a preponderance of the evidence, both of the | ||
following: | ||
(a) the person during the same taxable | ||
year paid, accrued, or incurred, the | ||
intangible expense or cost to a person that is | ||
not a related member, and |
(b) the transaction giving rise to the | ||
intangible expense or cost between the | ||
taxpayer and the person did not have as a | ||
principal purpose the avoidance of Illinois | ||
income tax, and is paid pursuant to a contract | ||
or agreement that reflects arm's-length terms; | ||
or | ||
(iii) any item of intangible expense or cost | ||
paid, accrued, or incurred, directly or | ||
indirectly, from a transaction with a person if | ||
the taxpayer establishes by clear and convincing | ||
evidence, that the adjustments are unreasonable; | ||
or if the taxpayer and the Director agree in | ||
writing to the application or use of an | ||
alternative method of apportionment under Section | ||
304(f);
| ||
Nothing in this subsection shall preclude the | ||
Director from making any other adjustment | ||
otherwise allowed under Section 404 of this Act | ||
for any tax year beginning after the effective | ||
date of this amendment provided such adjustment is | ||
made pursuant to regulation adopted by the | ||
Department and such regulations provide methods | ||
and standards by which the Department will utilize | ||
its authority under Section 404 of this Act;
| ||
(E-14) For taxable years ending on or after |
December 31, 2008, an amount equal to the amount of | ||
insurance premium expenses and costs otherwise allowed | ||
as a deduction in computing base income, and that were | ||
paid, accrued, or incurred, directly or indirectly, to | ||
a person who would be a member of the same unitary | ||
business group but for the fact that the person is | ||
prohibited under Section 1501(a)(27) from being | ||
included in the unitary business group because he or | ||
she is ordinarily required to apportion business | ||
income under different subsections of Section 304. The | ||
addition modification required by this subparagraph | ||
shall be reduced to the extent that dividends were | ||
included in base income of the unitary group for the | ||
same taxable year and received by the taxpayer or by a | ||
member of the taxpayer's unitary business group | ||
(including amounts included in gross income under | ||
Sections 951 through 964 of the Internal Revenue Code | ||
and amounts included in gross income under Section 78 | ||
of the Internal Revenue Code) with respect to the | ||
stock of the same person to whom the premiums and costs | ||
were directly or indirectly paid, incurred, or | ||
accrued. The preceding sentence does not apply to the | ||
extent that the same dividends caused a reduction to | ||
the addition modification required under Section | ||
203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this | ||
Act;
|
(E-15) For taxable years beginning after December | ||
31, 2008, any deduction for dividends paid by a | ||
captive real estate investment trust that is allowed | ||
to a real estate investment trust under Section | ||
857(b)(2)(B) of the Internal Revenue Code for | ||
dividends paid; | ||
(E-16) An amount equal to the credit allowable to | ||
the taxpayer under Section 218(a) of this Act, | ||
determined without regard to Section 218(c) of this | ||
Act; | ||
(E-17) For taxable years ending on or after | ||
December 31, 2017, an amount equal to the deduction | ||
allowed under Section 199 of the Internal Revenue Code | ||
for the taxable year; | ||
(E-18) for taxable years beginning after December | ||
31, 2018, an amount equal to the deduction allowed | ||
under Section 250(a)(1)(A) of the Internal Revenue | ||
Code for the taxable year; | ||
(E-19) for taxable years ending on or after June | ||
30, 2021, an amount equal to the deduction allowed | ||
under Section 250(a)(1)(B)(i) of the Internal Revenue | ||
Code for the taxable year; | ||
(E-20) for taxable years ending on or after June | ||
30, 2021, an amount equal to the deduction allowed | ||
under Sections 243(e) and 245A(a) of the Internal | ||
Revenue Code for the taxable year. |
and by deducting from the total so obtained the sum of the | ||
following
amounts: | ||
(F) An amount equal to the amount of any tax | ||
imposed by this Act
which was refunded to the taxpayer | ||
and included in such total for the
taxable year; | ||
(G) An amount equal to any amount included in such | ||
total under
Section 78 of the Internal Revenue Code; | ||
(H) In the case of a regulated investment company, | ||
an amount equal
to the amount of exempt interest | ||
dividends as defined in subsection (b)(5) of Section | ||
852 of the Internal Revenue Code, paid to shareholders
| ||
for the taxable year; | ||
(I) With the exception of any amounts subtracted | ||
under subparagraph
(J),
an amount equal to the sum of | ||
all amounts disallowed as
deductions by (i) Sections | ||
171(a)(2) and 265(a)(2) and amounts disallowed as
| ||
interest expense by Section 291(a)(3) of the Internal | ||
Revenue Code, and all amounts of expenses allocable to | ||
interest and
disallowed as deductions by Section | ||
265(a)(1) of the Internal Revenue Code;
and (ii) for | ||
taxable years
ending on or after August 13, 1999, | ||
Sections
171(a)(2), 265,
280C, 291(a)(3), and | ||
832(b)(5)(B)(i) of the Internal Revenue Code, plus, | ||
for tax years ending on or after December 31, 2011, | ||
amounts disallowed as deductions by Section 45G(e)(3) | ||
of the Internal Revenue Code and, for taxable years |
ending on or after December 31, 2008, any amount | ||
included in gross income under Section 87 of the | ||
Internal Revenue Code and the policyholders' share of | ||
tax-exempt interest of a life insurance company under | ||
Section 807(a)(2)(B) of the Internal Revenue Code (in | ||
the case of a life insurance company with gross income | ||
from a decrease in reserves for the tax year) or | ||
Section 807(b)(1)(B) of the Internal Revenue Code (in | ||
the case of a life insurance company allowed a | ||
deduction for an increase in reserves for the tax | ||
year); the
provisions of this
subparagraph are exempt | ||
from the provisions of Section 250; | ||
(J) An amount equal to all amounts included in | ||
such total which are
exempt from taxation by this | ||
State either by reason of its statutes or
Constitution
| ||
or by reason of the Constitution, treaties or statutes | ||
of the United States;
provided that, in the case of any | ||
statute of this State that exempts income
derived from | ||
bonds or other obligations from the tax imposed under | ||
this Act,
the amount exempted shall be the interest | ||
net of bond premium amortization; | ||
(K) An amount equal to those dividends included in | ||
such total
which were paid by a corporation which | ||
conducts
business operations in a River Edge | ||
Redevelopment Zone or zones created under the River | ||
Edge Redevelopment Zone Act and conducts substantially |
all of its
operations in a River Edge Redevelopment | ||
Zone or zones. This subparagraph (K) is exempt from | ||
the provisions of Section 250; | ||
(L) An amount equal to those dividends included in | ||
such total that
were paid by a corporation that | ||
conducts business operations in a federally
designated | ||
Foreign Trade Zone or Sub-Zone and that is designated | ||
a High Impact
Business located in Illinois; provided | ||
that dividends eligible for the
deduction provided in | ||
subparagraph (K) of paragraph 2 of this subsection
| ||
shall not be eligible for the deduction provided under | ||
this subparagraph
(L); | ||
(M) For any taxpayer that is a financial | ||
organization within the meaning
of Section 304(c) of | ||
this Act, an amount included in such total as interest
| ||
income from a loan or loans made by such taxpayer to a | ||
borrower, to the extent
that such a loan is secured by | ||
property which is eligible for the River Edge | ||
Redevelopment Zone Investment Credit. To determine the | ||
portion of a loan or loans that is
secured by property | ||
eligible for a Section 201(f) investment
credit to the | ||
borrower, the entire principal amount of the loan or | ||
loans
between the taxpayer and the borrower should be | ||
divided into the basis of the
Section 201(f) | ||
investment credit property which secures the
loan or | ||
loans, using for this purpose the original basis of |
such property on
the date that it was placed in service | ||
in the River Edge Redevelopment Zone. The subtraction | ||
modification available to the taxpayer in any
year | ||
under this subsection shall be that portion of the | ||
total interest paid
by the borrower with respect to | ||
such loan attributable to the eligible
property as | ||
calculated under the previous sentence. This | ||
subparagraph (M) is exempt from the provisions of | ||
Section 250; | ||
(M-1) For any taxpayer that is a financial | ||
organization within the
meaning of Section 304(c) of | ||
this Act, an amount included in such total as
interest | ||
income from a loan or loans made by such taxpayer to a | ||
borrower,
to the extent that such a loan is secured by | ||
property which is eligible for
the High Impact | ||
Business Investment Credit. To determine the portion | ||
of a
loan or loans that is secured by property eligible | ||
for a Section 201(h) investment credit to the | ||
borrower, the entire principal amount of
the loan or | ||
loans between the taxpayer and the borrower should be | ||
divided into
the basis of the Section 201(h) | ||
investment credit property which
secures the loan or | ||
loans, using for this purpose the original basis of | ||
such
property on the date that it was placed in service | ||
in a federally designated
Foreign Trade Zone or | ||
Sub-Zone located in Illinois. No taxpayer that is
|
eligible for the deduction provided in subparagraph | ||
(M) of paragraph (2) of
this subsection shall be | ||
eligible for the deduction provided under this
| ||
subparagraph (M-1). The subtraction modification | ||
available to taxpayers in
any year under this | ||
subsection shall be that portion of the total interest
| ||
paid by the borrower with respect to such loan | ||
attributable to the eligible
property as calculated | ||
under the previous sentence; | ||
(N) Two times any contribution made during the | ||
taxable year to a
designated zone organization to the | ||
extent that the contribution (i)
qualifies as a | ||
charitable contribution under subsection (c) of | ||
Section 170
of the Internal Revenue Code and (ii) | ||
must, by its terms, be used for a
project approved by | ||
the Department of Commerce and Economic Opportunity | ||
under Section 11 of the Illinois Enterprise Zone Act | ||
or under Section 10-10 of the River Edge Redevelopment | ||
Zone Act. This subparagraph (N) is exempt from the | ||
provisions of Section 250; | ||
(O) An amount equal to: (i) 85% for taxable years | ||
ending on or before
December 31, 1992, or, a | ||
percentage equal to the percentage allowable under
| ||
Section 243(a)(1) of the Internal Revenue Code of 1986 | ||
for taxable years ending
after December 31, 1992, of | ||
the amount by which dividends included in taxable
|
income and received from a corporation that is not | ||
created or organized under
the laws of the United | ||
States or any state or political subdivision thereof,
| ||
including, for taxable years ending on or after | ||
December 31, 1988, dividends
received or deemed | ||
received or paid or deemed paid under Sections 951 | ||
through
965 of the Internal Revenue Code, exceed the | ||
amount of the modification
provided under subparagraph | ||
(G) of paragraph (2) of this subsection (b) which
is | ||
related to such dividends, and including, for taxable | ||
years ending on or after December 31, 2008, dividends | ||
received from a captive real estate investment trust; | ||
plus (ii) 100% of the amount by which dividends,
| ||
included in taxable income and received, including, | ||
for taxable years ending on
or after December 31, | ||
1988, dividends received or deemed received or paid or
| ||
deemed paid under Sections 951 through 964 of the | ||
Internal Revenue Code and including, for taxable years | ||
ending on or after December 31, 2008, dividends | ||
received from a captive real estate investment trust, | ||
from
any such corporation specified in clause (i) that | ||
would but for the provisions
of Section 1504(b)(3) of | ||
the Internal Revenue Code be treated as a member of
the | ||
affiliated group which includes the dividend | ||
recipient, exceed the amount
of the modification | ||
provided under subparagraph (G) of paragraph (2) of |
this
subsection (b) which is related to such | ||
dividends. For taxable years ending on or after June | ||
30, 2021, (i) for purposes of this subparagraph, the | ||
term "dividend" does not include any amount treated as | ||
a dividend under Section 1248 of the Internal Revenue | ||
Code, and (ii) this subparagraph shall not apply to | ||
dividends for which a deduction is allowed under | ||
Section 245(a) of the Internal Revenue Code. This | ||
subparagraph (O) is exempt from the provisions of | ||
Section 250 of this Act; | ||
(P) An amount equal to any contribution made to a | ||
job training project
established pursuant to the Tax | ||
Increment Allocation Redevelopment Act; | ||
(Q) An amount equal to the amount of the deduction | ||
used to compute the
federal income tax credit for | ||
restoration of substantial amounts held under
claim of | ||
right for the taxable year pursuant to Section 1341 of | ||
the
Internal Revenue Code; | ||
(R) On and after July 20, 1999, in the case of an | ||
attorney-in-fact with respect to whom an
interinsurer | ||
or a reciprocal insurer has made the election under | ||
Section 835 of
the Internal Revenue Code, 26 U.S.C. | ||
835, an amount equal to the excess, if
any, of the | ||
amounts paid or incurred by that interinsurer or | ||
reciprocal insurer
in the taxable year to the | ||
attorney-in-fact over the deduction allowed to that
|
interinsurer or reciprocal insurer with respect to the | ||
attorney-in-fact under
Section 835(b) of the Internal | ||
Revenue Code for the taxable year; the provisions of | ||
this subparagraph are exempt from the provisions of | ||
Section 250; | ||
(S) For taxable years ending on or after December | ||
31, 1997, in the
case of a Subchapter
S corporation, an | ||
amount equal to all amounts of income allocable to a
| ||
shareholder subject to the Personal Property Tax | ||
Replacement Income Tax imposed
by subsections (c) and | ||
(d) of Section 201 of this Act, including amounts
| ||
allocable to organizations exempt from federal income | ||
tax by reason of Section
501(a) of the Internal | ||
Revenue Code. This subparagraph (S) is exempt from
the | ||
provisions of Section 250; | ||
(T) For taxable years 2001 and thereafter, for the | ||
taxable year in
which the bonus depreciation deduction
| ||
is taken on the taxpayer's federal income tax return | ||
under
subsection (k) of Section 168 of the Internal | ||
Revenue Code and for each
applicable taxable year | ||
thereafter, an amount equal to "x", where: | ||
(1) "y" equals the amount of the depreciation | ||
deduction taken for the
taxable year
on the | ||
taxpayer's federal income tax return on property | ||
for which the bonus
depreciation deduction
was | ||
taken in any year under subsection (k) of Section |
168 of the Internal
Revenue Code, but not | ||
including the bonus depreciation deduction; | ||
(2) for taxable years ending on or before | ||
December 31, 2005, "x" equals "y" multiplied by 30 | ||
and then divided by 70 (or "y"
multiplied by | ||
0.429); and | ||
(3) for taxable years ending after December | ||
31, 2005: | ||
(i) for property on which a bonus | ||
depreciation deduction of 30% of the adjusted | ||
basis was taken, "x" equals "y" multiplied by | ||
30 and then divided by 70 (or "y"
multiplied | ||
by 0.429); | ||
(ii) for property on which a bonus | ||
depreciation deduction of 50% of the adjusted | ||
basis was taken, "x" equals "y" multiplied by | ||
1.0; | ||
(iii) for property on which a bonus | ||
depreciation deduction of 100% of the adjusted | ||
basis was taken in a taxable year ending on or | ||
after December 31, 2021, "x" equals the | ||
depreciation deduction that would be allowed | ||
on that property if the taxpayer had made the | ||
election under Section 168(k)(7) of the | ||
Internal Revenue Code to not claim bonus | ||
depreciation on that property; and |
(iv) for property on which a bonus | ||
depreciation deduction of a percentage other | ||
than 30%, 50% or 100% of the adjusted basis | ||
was taken in a taxable year ending on or after | ||
December 31, 2021, "x" equals "y" multiplied | ||
by 100 times the percentage bonus depreciation | ||
on the property (that is, 100(bonus%)) and | ||
then divided by 100 times 1 minus the | ||
percentage bonus depreciation on the property | ||
(that is, 100(1–bonus%)). | ||
The aggregate amount deducted under this | ||
subparagraph in all taxable
years for any one piece of | ||
property may not exceed the amount of the bonus
| ||
depreciation deduction
taken on that property on the | ||
taxpayer's federal income tax return under
subsection | ||
(k) of Section 168 of the Internal Revenue Code. This | ||
subparagraph (T) is exempt from the provisions of | ||
Section 250; | ||
(U) If the taxpayer sells, transfers, abandons, or | ||
otherwise disposes of
property for which the taxpayer | ||
was required in any taxable year to make an
addition | ||
modification under subparagraph (E-10), then an amount | ||
equal to that
addition modification. | ||
If the taxpayer continues to own property through | ||
the last day of the last tax year for which a | ||
subtraction is allowed with respect to that property |
under subparagraph (T) and for which the taxpayer was | ||
required in any taxable year to make an addition | ||
modification under subparagraph (E-10), then an amount | ||
equal to that addition modification.
| ||
The taxpayer is allowed to take the deduction | ||
under this subparagraph
only once with respect to any | ||
one piece of property. | ||
This subparagraph (U) is exempt from the | ||
provisions of Section 250; | ||
(V) The amount of: (i) any interest income (net of | ||
the deductions allocable thereto) taken into account | ||
for the taxable year with respect to a transaction | ||
with a taxpayer that is required to make an addition | ||
modification with respect to such transaction under | ||
Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||
203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||
the amount of such addition modification,
(ii) any | ||
income from intangible property (net of the deductions | ||
allocable thereto) taken into account for the taxable | ||
year with respect to a transaction with a taxpayer | ||
that is required to make an addition modification with | ||
respect to such transaction under Section | ||
203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||
203(d)(2)(D-8), but not to exceed the amount of such | ||
addition modification, and (iii) any insurance premium | ||
income (net of deductions allocable thereto) taken |
into account for the taxable year with respect to a | ||
transaction with a taxpayer that is required to make | ||
an addition modification with respect to such | ||
transaction under Section 203(a)(2)(D-19), Section | ||
203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section | ||
203(d)(2)(D-9), but not to exceed the amount of that | ||
addition modification. This subparagraph (V) is exempt | ||
from the provisions of Section 250;
| ||
(W) An amount equal to the interest income taken | ||
into account for the taxable year (net of the | ||
deductions allocable thereto) with respect to | ||
transactions with (i) a foreign person who would be a | ||
member of the taxpayer's unitary business group but | ||
for the fact that the foreign person's business | ||
activity outside the United States is 80% or more of | ||
that person's total business activity and (ii) for | ||
taxable years ending on or after December 31, 2008, to | ||
a person who would be a member of the same unitary | ||
business group but for the fact that the person is | ||
prohibited under Section 1501(a)(27) from being | ||
included in the unitary business group because he or | ||
she is ordinarily required to apportion business | ||
income under different subsections of Section 304, but | ||
not to exceed the addition modification required to be | ||
made for the same taxable year under Section | ||
203(b)(2)(E-12) for interest paid, accrued, or |
incurred, directly or indirectly, to the same person. | ||
This subparagraph (W) is exempt from the provisions of | ||
Section 250;
| ||
(X) An amount equal to the income from intangible | ||
property taken into account for the taxable year (net | ||
of the deductions allocable thereto) with respect to | ||
transactions with (i) a foreign person who would be a | ||
member of the taxpayer's unitary business group but | ||
for the fact that the foreign person's business | ||
activity outside the United States is 80% or more of | ||
that person's total business activity and (ii) for | ||
taxable years ending on or after December 31, 2008, to | ||
a person who would be a member of the same unitary | ||
business group but for the fact that the person is | ||
prohibited under Section 1501(a)(27) from being | ||
included in the unitary business group because he or | ||
she is ordinarily required to apportion business | ||
income under different subsections of Section 304, but | ||
not to exceed the addition modification required to be | ||
made for the same taxable year under Section | ||
203(b)(2)(E-13) for intangible expenses and costs | ||
paid, accrued, or incurred, directly or indirectly, to | ||
the same foreign person. This subparagraph (X) is | ||
exempt from the provisions of Section 250;
| ||
(Y) For taxable years ending on or after December | ||
31, 2011, in the case of a taxpayer who was required to |
add back any insurance premiums under Section | ||
203(b)(2)(E-14), such taxpayer may elect to subtract | ||
that part of a reimbursement received from the | ||
insurance company equal to the amount of the expense | ||
or loss (including expenses incurred by the insurance | ||
company) that would have been taken into account as a | ||
deduction for federal income tax purposes if the | ||
expense or loss had been uninsured. If a taxpayer | ||
makes the election provided for by this subparagraph | ||
(Y), the insurer to which the premiums were paid must | ||
add back to income the amount subtracted by the | ||
taxpayer pursuant to this subparagraph (Y). This | ||
subparagraph (Y) is exempt from the provisions of | ||
Section 250; and | ||
(Z) The difference between the nondeductible | ||
controlled foreign corporation dividends under Section | ||
965(e)(3) of the Internal Revenue Code over the | ||
taxable income of the taxpayer, computed without | ||
regard to Section 965(e)(2)(A) of the Internal Revenue | ||
Code, and without regard to any net operating loss | ||
deduction. This subparagraph (Z) is exempt from the | ||
provisions of Section 250. | ||
(3) Special rule. For purposes of paragraph (2)(A), | ||
"gross income"
in the case of a life insurance company, | ||
for tax years ending on and after
December 31, 1994,
and | ||
prior to December 31, 2011, shall mean the gross |
investment income for the taxable year and, for tax years | ||
ending on or after December 31, 2011, shall mean all | ||
amounts included in life insurance gross income under | ||
Section 803(a)(3) of the Internal Revenue Code. | ||
(c) Trusts and estates. | ||
(1) In general. In the case of a trust or estate, base | ||
income means
an amount equal to the taxpayer's taxable | ||
income for the taxable year as
modified by paragraph (2). | ||
(2) Modifications. Subject to the provisions of | ||
paragraph (3), the
taxable income referred to in paragraph | ||
(1) shall be modified by adding
thereto the sum of the | ||
following amounts: | ||
(A) An amount equal to all amounts paid or accrued | ||
to the taxpayer
as interest or dividends during the | ||
taxable year to the extent excluded
from gross income | ||
in the computation of taxable income; | ||
(B) In the case of (i) an estate, $600; (ii) a | ||
trust which, under
its governing instrument, is | ||
required to distribute all of its income
currently, | ||
$300; and (iii) any other trust, $100, but in each such | ||
case,
only to the extent such amount was deducted in | ||
the computation of
taxable income; | ||
(C) An amount equal to the amount of tax imposed by | ||
this Act to the
extent deducted from gross income in | ||
the computation of taxable income
for the taxable |
year; | ||
(D) The amount of any net operating loss deduction | ||
taken in arriving at
taxable income, other than a net | ||
operating loss carried forward from a
taxable year | ||
ending prior to December 31, 1986; | ||
(E) For taxable years in which a net operating | ||
loss carryback or
carryforward from a taxable year | ||
ending prior to December 31, 1986 is an
element of | ||
taxable income under paragraph (1) of subsection (e) | ||
or subparagraph
(E) of paragraph (2) of subsection | ||
(e), the amount by which addition
modifications other | ||
than those provided by this subparagraph (E) exceeded
| ||
subtraction modifications in such taxable year, with | ||
the following limitations
applied in the order that | ||
they are listed: | ||
(i) the addition modification relating to the | ||
net operating loss
carried back or forward to the | ||
taxable year from any taxable year ending
prior to | ||
December 31, 1986 shall be reduced by the amount | ||
of addition
modification under this subparagraph | ||
(E) which related to that net
operating loss and | ||
which was taken into account in calculating the | ||
base
income of an earlier taxable year, and | ||
(ii) the addition modification relating to the | ||
net operating loss
carried back or forward to the | ||
taxable year from any taxable year ending
prior to |
December 31, 1986 shall not exceed the amount of | ||
such carryback or
carryforward; | ||
For taxable years in which there is a net | ||
operating loss carryback or
carryforward from more | ||
than one other taxable year ending prior to December
| ||
31, 1986, the addition modification provided in this | ||
subparagraph (E) shall
be the sum of the amounts | ||
computed independently under the preceding
provisions | ||
of this subparagraph (E) for each such taxable year; | ||
(F) For taxable years ending on or after January | ||
1, 1989, an amount
equal to the tax deducted pursuant | ||
to Section 164 of the Internal Revenue
Code if the | ||
trust or estate is claiming the same tax for purposes | ||
of the
Illinois foreign tax credit under Section 601 | ||
of this Act; | ||
(G) An amount equal to the amount of the capital | ||
gain deduction
allowable under the Internal Revenue | ||
Code, to the extent deducted from
gross income in the | ||
computation of taxable income; | ||
(G-5) For taxable years ending after December 31, | ||
1997, an
amount equal to any eligible remediation | ||
costs that the trust or estate
deducted in computing | ||
adjusted gross income and for which the trust
or | ||
estate claims a credit under subsection (l) of Section | ||
201; | ||
(G-10) For taxable years 2001 and thereafter, an |
amount equal to the
bonus depreciation deduction taken | ||
on the taxpayer's federal income tax return for the | ||
taxable
year under subsection (k) of Section 168 of | ||
the Internal Revenue Code; and | ||
(G-11) If the taxpayer sells, transfers, abandons, | ||
or otherwise disposes of property for which the | ||
taxpayer was required in any taxable year to
make an | ||
addition modification under subparagraph (G-10), then | ||
an amount equal
to the aggregate amount of the | ||
deductions taken in all taxable
years under | ||
subparagraph (R) with respect to that property. | ||
If the taxpayer continues to own property through | ||
the last day of the last tax year for which a | ||
subtraction is allowed with respect to that property | ||
under subparagraph (R) and for which the taxpayer was | ||
allowed in any taxable year to make a subtraction | ||
modification under subparagraph (R), then an amount | ||
equal to that subtraction modification.
| ||
The taxpayer is required to make the addition | ||
modification under this
subparagraph
only once with | ||
respect to any one piece of property; | ||
(G-12) An amount equal to the amount otherwise | ||
allowed as a deduction in computing base income for | ||
interest paid, accrued, or incurred, directly or | ||
indirectly, (i) for taxable years ending on or after | ||
December 31, 2004, to a foreign person who would be a |
member of the same unitary business group but for the | ||
fact that the foreign person's business activity | ||
outside the United States is 80% or more of the foreign | ||
person's total business activity and (ii) for taxable | ||
years ending on or after December 31, 2008, to a person | ||
who would be a member of the same unitary business | ||
group but for the fact that the person is prohibited | ||
under Section 1501(a)(27) from being included in the | ||
unitary business group because he or she is ordinarily | ||
required to apportion business income under different | ||
subsections of Section 304. The addition modification | ||
required by this subparagraph shall be reduced to the | ||
extent that dividends were included in base income of | ||
the unitary group for the same taxable year and | ||
received by the taxpayer or by a member of the | ||
taxpayer's unitary business group (including amounts | ||
included in gross income pursuant to Sections 951 | ||
through 964 of the Internal Revenue Code and amounts | ||
included in gross income under Section 78 of the | ||
Internal Revenue Code) with respect to the stock of | ||
the same person to whom the interest was paid, | ||
accrued, or incurred.
| ||
This paragraph shall not apply to the following:
| ||
(i) an item of interest paid, accrued, or | ||
incurred, directly or indirectly, to a person who | ||
is subject in a foreign country or state, other |
than a state which requires mandatory unitary | ||
reporting, to a tax on or measured by net income | ||
with respect to such interest; or | ||
(ii) an item of interest paid, accrued, or | ||
incurred, directly or indirectly, to a person if | ||
the taxpayer can establish, based on a | ||
preponderance of the evidence, both of the | ||
following: | ||
(a) the person, during the same taxable | ||
year, paid, accrued, or incurred, the interest | ||
to a person that is not a related member, and | ||
(b) the transaction giving rise to the | ||
interest expense between the taxpayer and the | ||
person did not have as a principal purpose the | ||
avoidance of Illinois income tax, and is paid | ||
pursuant to a contract or agreement that | ||
reflects an arm's-length interest rate and | ||
terms; or
| ||
(iii) the taxpayer can establish, based on | ||
clear and convincing evidence, that the interest | ||
paid, accrued, or incurred relates to a contract | ||
or agreement entered into at arm's-length rates | ||
and terms and the principal purpose for the | ||
payment is not federal or Illinois tax avoidance; | ||
or
| ||
(iv) an item of interest paid, accrued, or |
incurred, directly or indirectly, to a person if | ||
the taxpayer establishes by clear and convincing | ||
evidence that the adjustments are unreasonable; or | ||
if the taxpayer and the Director agree in writing | ||
to the application or use of an alternative method | ||
of apportionment under Section 304(f).
| ||
Nothing in this subsection shall preclude the | ||
Director from making any other adjustment | ||
otherwise allowed under Section 404 of this Act | ||
for any tax year beginning after the effective | ||
date of this amendment provided such adjustment is | ||
made pursuant to regulation adopted by the | ||
Department and such regulations provide methods | ||
and standards by which the Department will utilize | ||
its authority under Section 404 of this Act;
| ||
(G-13) An amount equal to the amount of intangible | ||
expenses and costs otherwise allowed as a deduction in | ||
computing base income, and that were paid, accrued, or | ||
incurred, directly or indirectly, (i) for taxable | ||
years ending on or after December 31, 2004, to a | ||
foreign person who would be a member of the same | ||
unitary business group but for the fact that the | ||
foreign person's business activity outside the United | ||
States is 80% or more of that person's total business | ||
activity and (ii) for taxable years ending on or after | ||
December 31, 2008, to a person who would be a member of |
the same unitary business group but for the fact that | ||
the person is prohibited under Section 1501(a)(27) | ||
from being included in the unitary business group | ||
because he or she is ordinarily required to apportion | ||
business income under different subsections of Section | ||
304. The addition modification required by this | ||
subparagraph shall be reduced to the extent that | ||
dividends were included in base income of the unitary | ||
group for the same taxable year and received by the | ||
taxpayer or by a member of the taxpayer's unitary | ||
business group (including amounts included in gross | ||
income pursuant to Sections 951 through 964 of the | ||
Internal Revenue Code and amounts included in gross | ||
income under Section 78 of the Internal Revenue Code) | ||
with respect to the stock of the same person to whom | ||
the intangible expenses and costs were directly or | ||
indirectly paid, incurred, or accrued. The preceding | ||
sentence shall not apply to the extent that the same | ||
dividends caused a reduction to the addition | ||
modification required under Section 203(c)(2)(G-12) of | ||
this Act. As used in this subparagraph, the term | ||
"intangible expenses and costs" includes: (1) | ||
expenses, losses, and costs for or related to the | ||
direct or indirect acquisition, use, maintenance or | ||
management, ownership, sale, exchange, or any other | ||
disposition of intangible property; (2) losses |
incurred, directly or indirectly, from factoring | ||
transactions or discounting transactions; (3) royalty, | ||
patent, technical, and copyright fees; (4) licensing | ||
fees; and (5) other similar expenses and costs. For | ||
purposes of this subparagraph, "intangible property" | ||
includes patents, patent applications, trade names, | ||
trademarks, service marks, copyrights, mask works, | ||
trade secrets, and similar types of intangible assets. | ||
This paragraph shall not apply to the following: | ||
(i) any item of intangible expenses or costs | ||
paid, accrued, or incurred, directly or | ||
indirectly, from a transaction with a person who | ||
is subject in a foreign country or state, other | ||
than a state which requires mandatory unitary | ||
reporting, to a tax on or measured by net income | ||
with respect to such item; or | ||
(ii) any item of intangible expense or cost | ||
paid, accrued, or incurred, directly or | ||
indirectly, if the taxpayer can establish, based | ||
on a preponderance of the evidence, both of the | ||
following: | ||
(a) the person during the same taxable | ||
year paid, accrued, or incurred, the | ||
intangible expense or cost to a person that is | ||
not a related member, and | ||
(b) the transaction giving rise to the |
intangible expense or cost between the | ||
taxpayer and the person did not have as a | ||
principal purpose the avoidance of Illinois | ||
income tax, and is paid pursuant to a contract | ||
or agreement that reflects arm's-length terms; | ||
or | ||
(iii) any item of intangible expense or cost | ||
paid, accrued, or incurred, directly or | ||
indirectly, from a transaction with a person if | ||
the taxpayer establishes by clear and convincing | ||
evidence, that the adjustments are unreasonable; | ||
or if the taxpayer and the Director agree in | ||
writing to the application or use of an | ||
alternative method of apportionment under Section | ||
304(f);
| ||
Nothing in this subsection shall preclude the | ||
Director from making any other adjustment | ||
otherwise allowed under Section 404 of this Act | ||
for any tax year beginning after the effective | ||
date of this amendment provided such adjustment is | ||
made pursuant to regulation adopted by the | ||
Department and such regulations provide methods | ||
and standards by which the Department will utilize | ||
its authority under Section 404 of this Act;
| ||
(G-14) For taxable years ending on or after | ||
December 31, 2008, an amount equal to the amount of |
insurance premium expenses and costs otherwise allowed | ||
as a deduction in computing base income, and that were | ||
paid, accrued, or incurred, directly or indirectly, to | ||
a person who would be a member of the same unitary | ||
business group but for the fact that the person is | ||
prohibited under Section 1501(a)(27) from being | ||
included in the unitary business group because he or | ||
she is ordinarily required to apportion business | ||
income under different subsections of Section 304. The | ||
addition modification required by this subparagraph | ||
shall be reduced to the extent that dividends were | ||
included in base income of the unitary group for the | ||
same taxable year and received by the taxpayer or by a | ||
member of the taxpayer's unitary business group | ||
(including amounts included in gross income under | ||
Sections 951 through 964 of the Internal Revenue Code | ||
and amounts included in gross income under Section 78 | ||
of the Internal Revenue Code) with respect to the | ||
stock of the same person to whom the premiums and costs | ||
were directly or indirectly paid, incurred, or | ||
accrued. The preceding sentence does not apply to the | ||
extent that the same dividends caused a reduction to | ||
the addition modification required under Section | ||
203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this | ||
Act; | ||
(G-15) An amount equal to the credit allowable to |
the taxpayer under Section 218(a) of this Act, | ||
determined without regard to Section 218(c) of this | ||
Act; | ||
(G-16) For taxable years ending on or after | ||
December 31, 2017, an amount equal to the deduction | ||
allowed under Section 199 of the Internal Revenue Code | ||
for the taxable year; | ||
and by deducting from the total so obtained the sum of the | ||
following
amounts: | ||
(H) An amount equal to all amounts included in | ||
such total pursuant
to the provisions of Sections | ||
402(a), 402(c), 403(a), 403(b), 406(a), 407(a)
and 408 | ||
of the Internal Revenue Code or included in such total | ||
as
distributions under the provisions of any | ||
retirement or disability plan for
employees of any | ||
governmental agency or unit, or retirement payments to
| ||
retired partners, which payments are excluded in | ||
computing net earnings
from self employment by Section | ||
1402 of the Internal Revenue Code and
regulations | ||
adopted pursuant thereto; | ||
(I) The valuation limitation amount; | ||
(J) An amount equal to the amount of any tax | ||
imposed by this Act
which was refunded to the taxpayer | ||
and included in such total for the
taxable year; | ||
(K) An amount equal to all amounts included in | ||
taxable income as
modified by subparagraphs (A), (B), |
(C), (D), (E), (F) and (G) which
are exempt from | ||
taxation by this State either by reason of its | ||
statutes or
Constitution
or by reason of the | ||
Constitution, treaties or statutes of the United | ||
States;
provided that, in the case of any statute of | ||
this State that exempts income
derived from bonds or | ||
other obligations from the tax imposed under this Act,
| ||
the amount exempted shall be the interest net of bond | ||
premium amortization; | ||
(L) With the exception of any amounts subtracted | ||
under subparagraph
(K),
an amount equal to the sum of | ||
all amounts disallowed as
deductions by (i) Sections | ||
171(a)(2) and 265(a)(2) of the Internal Revenue
Code, | ||
and all amounts of expenses allocable
to interest and | ||
disallowed as deductions by Section 265(a)(1) of the | ||
Internal
Revenue Code;
and (ii) for taxable years
| ||
ending on or after August 13, 1999, Sections
| ||
171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of the | ||
Internal Revenue Code, plus, (iii) for taxable years | ||
ending on or after December 31, 2011, Section | ||
45G(e)(3) of the Internal Revenue Code and, for | ||
taxable years ending on or after December 31, 2008, | ||
any amount included in gross income under Section 87 | ||
of the Internal Revenue Code; the provisions of this
| ||
subparagraph are exempt from the provisions of Section | ||
250; |
(M) An amount equal to those dividends included in | ||
such total
which were paid by a corporation which | ||
conducts business operations in a River Edge | ||
Redevelopment Zone or zones created under the River | ||
Edge Redevelopment Zone Act and
conducts substantially | ||
all of its operations in a River Edge Redevelopment | ||
Zone or zones. This subparagraph (M) is exempt from | ||
the provisions of Section 250; | ||
(N) An amount equal to any contribution made to a | ||
job training
project established pursuant to the Tax | ||
Increment Allocation
Redevelopment Act; | ||
(O) An amount equal to those dividends included in | ||
such total
that were paid by a corporation that | ||
conducts business operations in a
federally designated | ||
Foreign Trade Zone or Sub-Zone and that is designated
| ||
a High Impact Business located in Illinois; provided | ||
that dividends eligible
for the deduction provided in | ||
subparagraph (M) of paragraph (2) of this
subsection | ||
shall not be eligible for the deduction provided under | ||
this
subparagraph (O); | ||
(P) An amount equal to the amount of the deduction | ||
used to compute the
federal income tax credit for | ||
restoration of substantial amounts held under
claim of | ||
right for the taxable year pursuant to Section 1341 of | ||
the
Internal Revenue Code; | ||
(Q) For taxable year 1999 and thereafter, an |
amount equal to the
amount of any
(i) distributions, | ||
to the extent includible in gross income for
federal | ||
income tax purposes, made to the taxpayer because of
| ||
his or her status as a victim of
persecution for racial | ||
or religious reasons by Nazi Germany or any other Axis
| ||
regime or as an heir of the victim and (ii) items
of | ||
income, to the extent
includible in gross income for | ||
federal income tax purposes, attributable to,
derived | ||
from or in any way related to assets stolen from, | ||
hidden from, or
otherwise lost to a victim of
| ||
persecution for racial or religious reasons by Nazi
| ||
Germany or any other Axis regime
immediately prior to, | ||
during, and immediately after World War II, including,
| ||
but
not limited to, interest on the proceeds | ||
receivable as insurance
under policies issued to a | ||
victim of persecution for racial or religious
reasons | ||
by Nazi Germany or any other Axis regime by European | ||
insurance
companies
immediately prior to and during | ||
World War II;
provided, however, this subtraction from | ||
federal adjusted gross income does not
apply to assets | ||
acquired with such assets or with the proceeds from | ||
the sale of
such assets; provided, further, this | ||
paragraph shall only apply to a taxpayer
who was the | ||
first recipient of such assets after their recovery | ||
and who is a
victim of
persecution for racial or | ||
religious reasons
by Nazi Germany or any other Axis |
regime or as an heir of the victim. The
amount of and | ||
the eligibility for any public assistance, benefit, or
| ||
similar entitlement is not affected by the inclusion | ||
of items (i) and (ii) of
this paragraph in gross income | ||
for federal income tax purposes.
This paragraph is | ||
exempt from the provisions of Section 250; | ||
(R) For taxable years 2001 and thereafter, for the | ||
taxable year in
which the bonus depreciation deduction
| ||
is taken on the taxpayer's federal income tax return | ||
under
subsection (k) of Section 168 of the Internal | ||
Revenue Code and for each
applicable taxable year | ||
thereafter, an amount equal to "x", where: | ||
(1) "y" equals the amount of the depreciation | ||
deduction taken for the
taxable year
on the | ||
taxpayer's federal income tax return on property | ||
for which the bonus
depreciation deduction
was | ||
taken in any year under subsection (k) of Section | ||
168 of the Internal
Revenue Code, but not | ||
including the bonus depreciation deduction; | ||
(2) for taxable years ending on or before | ||
December 31, 2005, "x" equals "y" multiplied by 30 | ||
and then divided by 70 (or "y"
multiplied by | ||
0.429); and | ||
(3) for taxable years ending after December | ||
31, 2005: | ||
(i) for property on which a bonus |
depreciation deduction of 30% of the adjusted | ||
basis was taken, "x" equals "y" multiplied by | ||
30 and then divided by 70 (or "y"
multiplied | ||
by 0.429); | ||
(ii) for property on which a bonus | ||
depreciation deduction of 50% of the adjusted | ||
basis was taken, "x" equals "y" multiplied by | ||
1.0; | ||
(iii) for property on which a bonus | ||
depreciation deduction of 100% of the adjusted | ||
basis was taken in a taxable year ending on or | ||
after December 31, 2021, "x" equals the | ||
depreciation deduction that would be allowed | ||
on that property if the taxpayer had made the | ||
election under Section 168(k)(7) of the | ||
Internal Revenue Code to not claim bonus | ||
depreciation on that property; and | ||
(iv) for property on which a bonus | ||
depreciation deduction of a percentage other | ||
than 30%, 50% or 100% of the adjusted basis | ||
was taken in a taxable year ending on or after | ||
December 31, 2021, "x" equals "y" multiplied | ||
by 100 times the percentage bonus depreciation | ||
on the property (that is, 100(bonus%)) and | ||
then divided by 100 times 1 minus the | ||
percentage bonus depreciation on the property |
(that is, 100(1–bonus%)). | ||
The aggregate amount deducted under this | ||
subparagraph in all taxable
years for any one piece of | ||
property may not exceed the amount of the bonus
| ||
depreciation deduction
taken on that property on the | ||
taxpayer's federal income tax return under
subsection | ||
(k) of Section 168 of the Internal Revenue Code. This | ||
subparagraph (R) is exempt from the provisions of | ||
Section 250; | ||
(S) If the taxpayer sells, transfers, abandons, or | ||
otherwise disposes of
property for which the taxpayer | ||
was required in any taxable year to make an
addition | ||
modification under subparagraph (G-10), then an amount | ||
equal to that
addition modification. | ||
If the taxpayer continues to own property through | ||
the last day of the last tax year for which a | ||
subtraction is allowed with respect to that property | ||
under subparagraph (R) and for which the taxpayer was | ||
required in any taxable year to make an addition | ||
modification under subparagraph (G-10), then an amount | ||
equal to that addition modification.
| ||
The taxpayer is allowed to take the deduction | ||
under this subparagraph
only once with respect to any | ||
one piece of property. | ||
This subparagraph (S) is exempt from the | ||
provisions of Section 250; |
(T) The amount of (i) any interest income (net of | ||
the deductions allocable thereto) taken into account | ||
for the taxable year with respect to a transaction | ||
with a taxpayer that is required to make an addition | ||
modification with respect to such transaction under | ||
Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||
203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||
the amount of such addition modification and
(ii) any | ||
income from intangible property (net of the deductions | ||
allocable thereto) taken into account for the taxable | ||
year with respect to a transaction with a taxpayer | ||
that is required to make an addition modification with | ||
respect to such transaction under Section | ||
203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||
203(d)(2)(D-8), but not to exceed the amount of such | ||
addition modification. This subparagraph (T) is exempt | ||
from the provisions of Section 250;
| ||
(U) An amount equal to the interest income taken | ||
into account for the taxable year (net of the | ||
deductions allocable thereto) with respect to | ||
transactions with (i) a foreign person who would be a | ||
member of the taxpayer's unitary business group but | ||
for the fact the foreign person's business activity | ||
outside the United States is 80% or more of that | ||
person's total business activity and (ii) for taxable | ||
years ending on or after December 31, 2008, to a person |
who would be a member of the same unitary business | ||
group but for the fact that the person is prohibited | ||
under Section 1501(a)(27) from being included in the | ||
unitary business group because he or she is ordinarily | ||
required to apportion business income under different | ||
subsections of Section 304, but not to exceed the | ||
addition modification required to be made for the same | ||
taxable year under Section 203(c)(2)(G-12) for | ||
interest paid, accrued, or incurred, directly or | ||
indirectly, to the same person. This subparagraph (U) | ||
is exempt from the provisions of Section 250; | ||
(V) An amount equal to the income from intangible | ||
property taken into account for the taxable year (net | ||
of the deductions allocable thereto) with respect to | ||
transactions with (i) a foreign person who would be a | ||
member of the taxpayer's unitary business group but | ||
for the fact that the foreign person's business | ||
activity outside the United States is 80% or more of | ||
that person's total business activity and (ii) for | ||
taxable years ending on or after December 31, 2008, to | ||
a person who would be a member of the same unitary | ||
business group but for the fact that the person is | ||
prohibited under Section 1501(a)(27) from being | ||
included in the unitary business group because he or | ||
she is ordinarily required to apportion business | ||
income under different subsections of Section 304, but |
not to exceed the addition modification required to be | ||
made for the same taxable year under Section | ||
203(c)(2)(G-13) for intangible expenses and costs | ||
paid, accrued, or incurred, directly or indirectly, to | ||
the same foreign person. This subparagraph (V) is | ||
exempt from the provisions of Section 250;
| ||
(W) in the case of an estate, an amount equal to | ||
all amounts included in such total pursuant to the | ||
provisions of Section 111 of the Internal Revenue Code | ||
as a recovery of items previously deducted by the | ||
decedent from adjusted gross income in the computation | ||
of taxable income. This subparagraph (W) is exempt | ||
from Section 250; | ||
(X) an amount equal to the refund included in such | ||
total of any tax deducted for federal income tax | ||
purposes, to the extent that deduction was added back | ||
under subparagraph (F). This subparagraph (X) is | ||
exempt from the provisions of Section 250; | ||
(Y) For taxable years ending on or after December | ||
31, 2011, in the case of a taxpayer who was required to | ||
add back any insurance premiums under Section | ||
203(c)(2)(G-14), such taxpayer may elect to subtract | ||
that part of a reimbursement received from the | ||
insurance company equal to the amount of the expense | ||
or loss (including expenses incurred by the insurance | ||
company) that would have been taken into account as a |
deduction for federal income tax purposes if the | ||
expense or loss had been uninsured. If a taxpayer | ||
makes the election provided for by this subparagraph | ||
(Y), the insurer to which the premiums were paid must | ||
add back to income the amount subtracted by the | ||
taxpayer pursuant to this subparagraph (Y). This | ||
subparagraph (Y) is exempt from the provisions of | ||
Section 250; and | ||
(Z) For taxable years beginning after December 31, | ||
2018 and before January 1, 2026, the amount of excess | ||
business loss of the taxpayer disallowed as a | ||
deduction by Section 461(l)(1)(B) of the Internal | ||
Revenue Code. | ||
(3) Limitation. The amount of any modification | ||
otherwise required
under this subsection shall, under | ||
regulations prescribed by the
Department, be adjusted by | ||
any amounts included therein which were
properly paid, | ||
credited, or required to be distributed, or permanently | ||
set
aside for charitable purposes pursuant to Internal | ||
Revenue Code Section
642(c) during the taxable year. | ||
(d) Partnerships. | ||
(1) In general. In the case of a partnership, base | ||
income means an
amount equal to the taxpayer's taxable | ||
income for the taxable year as
modified by paragraph (2). | ||
(2) Modifications. The taxable income referred to in |
paragraph (1)
shall be modified by adding thereto the sum | ||
of the following amounts: | ||
(A) An amount equal to all amounts paid or accrued | ||
to the taxpayer as
interest or dividends during the | ||
taxable year to the extent excluded from
gross income | ||
in the computation of taxable income; | ||
(B) An amount equal to the amount of tax imposed by | ||
this Act to the
extent deducted from gross income for | ||
the taxable year; | ||
(C) The amount of deductions allowed to the | ||
partnership pursuant to
Section 707 (c) of the | ||
Internal Revenue Code in calculating its taxable | ||
income; | ||
(D) An amount equal to the amount of the capital | ||
gain deduction
allowable under the Internal Revenue | ||
Code, to the extent deducted from
gross income in the | ||
computation of taxable income; | ||
(D-5) For taxable years 2001 and thereafter, an | ||
amount equal to the
bonus depreciation deduction taken | ||
on the taxpayer's federal income tax return for the | ||
taxable
year under subsection (k) of Section 168 of | ||
the Internal Revenue Code; | ||
(D-6) If the taxpayer sells, transfers, abandons, | ||
or otherwise disposes of
property for which the | ||
taxpayer was required in any taxable year to make an
| ||
addition modification under subparagraph (D-5), then |
an amount equal to the
aggregate amount of the | ||
deductions taken in all taxable years
under | ||
subparagraph (O) with respect to that property. | ||
If the taxpayer continues to own property through | ||
the last day of the last tax year for which a | ||
subtraction is allowed with respect to that property | ||
under subparagraph (O) and for which the taxpayer was | ||
allowed in any taxable year to make a subtraction | ||
modification under subparagraph (O), then an amount | ||
equal to that subtraction modification.
| ||
The taxpayer is required to make the addition | ||
modification under this
subparagraph
only once with | ||
respect to any one piece of property; | ||
(D-7) An amount equal to the amount otherwise | ||
allowed as a deduction in computing base income for | ||
interest paid, accrued, or incurred, directly or | ||
indirectly, (i) for taxable years ending on or after | ||
December 31, 2004, to a foreign person who would be a | ||
member of the same unitary business group but for the | ||
fact the foreign person's business activity outside | ||
the United States is 80% or more of the foreign | ||
person's total business activity and (ii) for taxable | ||
years ending on or after December 31, 2008, to a person | ||
who would be a member of the same unitary business | ||
group but for the fact that the person is prohibited | ||
under Section 1501(a)(27) from being included in the |
unitary business group because he or she is ordinarily | ||
required to apportion business income under different | ||
subsections of Section 304. The addition modification | ||
required by this subparagraph shall be reduced to the | ||
extent that dividends were included in base income of | ||
the unitary group for the same taxable year and | ||
received by the taxpayer or by a member of the | ||
taxpayer's unitary business group (including amounts | ||
included in gross income pursuant to Sections 951 | ||
through 964 of the Internal Revenue Code and amounts | ||
included in gross income under Section 78 of the | ||
Internal Revenue Code) with respect to the stock of | ||
the same person to whom the interest was paid, | ||
accrued, or incurred.
| ||
This paragraph shall not apply to the following:
| ||
(i) an item of interest paid, accrued, or | ||
incurred, directly or indirectly, to a person who | ||
is subject in a foreign country or state, other | ||
than a state which requires mandatory unitary | ||
reporting, to a tax on or measured by net income | ||
with respect to such interest; or | ||
(ii) an item of interest paid, accrued, or | ||
incurred, directly or indirectly, to a person if | ||
the taxpayer can establish, based on a | ||
preponderance of the evidence, both of the | ||
following: |
(a) the person, during the same taxable | ||
year, paid, accrued, or incurred, the interest | ||
to a person that is not a related member, and | ||
(b) the transaction giving rise to the | ||
interest expense between the taxpayer and the | ||
person did not have as a principal purpose the | ||
avoidance of Illinois income tax, and is paid | ||
pursuant to a contract or agreement that | ||
reflects an arm's-length interest rate and | ||
terms; or
| ||
(iii) the taxpayer can establish, based on | ||
clear and convincing evidence, that the interest | ||
paid, accrued, or incurred relates to a contract | ||
or agreement entered into at arm's-length rates | ||
and terms and the principal purpose for the | ||
payment is not federal or Illinois tax avoidance; | ||
or
| ||
(iv) an item of interest paid, accrued, or | ||
incurred, directly or indirectly, to a person if | ||
the taxpayer establishes by clear and convincing | ||
evidence that the adjustments are unreasonable; or | ||
if the taxpayer and the Director agree in writing | ||
to the application or use of an alternative method | ||
of apportionment under Section 304(f).
| ||
Nothing in this subsection shall preclude the | ||
Director from making any other adjustment |
otherwise allowed under Section 404 of this Act | ||
for any tax year beginning after the effective | ||
date of this amendment provided such adjustment is | ||
made pursuant to regulation adopted by the | ||
Department and such regulations provide methods | ||
and standards by which the Department will utilize | ||
its authority under Section 404 of this Act; and
| ||
(D-8) An amount equal to the amount of intangible | ||
expenses and costs otherwise allowed as a deduction in | ||
computing base income, and that were paid, accrued, or | ||
incurred, directly or indirectly, (i) for taxable | ||
years ending on or after December 31, 2004, to a | ||
foreign person who would be a member of the same | ||
unitary business group but for the fact that the | ||
foreign person's business activity outside the United | ||
States is 80% or more of that person's total business | ||
activity and (ii) for taxable years ending on or after | ||
December 31, 2008, to a person who would be a member of | ||
the same unitary business group but for the fact that | ||
the person is prohibited under Section 1501(a)(27) | ||
from being included in the unitary business group | ||
because he or she is ordinarily required to apportion | ||
business income under different subsections of Section | ||
304. The addition modification required by this | ||
subparagraph shall be reduced to the extent that | ||
dividends were included in base income of the unitary |
group for the same taxable year and received by the | ||
taxpayer or by a member of the taxpayer's unitary | ||
business group (including amounts included in gross | ||
income pursuant to Sections 951 through 964 of the | ||
Internal Revenue Code and amounts included in gross | ||
income under Section 78 of the Internal Revenue Code) | ||
with respect to the stock of the same person to whom | ||
the intangible expenses and costs were directly or | ||
indirectly paid, incurred or accrued. The preceding | ||
sentence shall not apply to the extent that the same | ||
dividends caused a reduction to the addition | ||
modification required under Section 203(d)(2)(D-7) of | ||
this Act. As used in this subparagraph, the term | ||
"intangible expenses and costs" includes (1) expenses, | ||
losses, and costs for, or related to, the direct or | ||
indirect acquisition, use, maintenance or management, | ||
ownership, sale, exchange, or any other disposition of | ||
intangible property; (2) losses incurred, directly or | ||
indirectly, from factoring transactions or discounting | ||
transactions; (3) royalty, patent, technical, and | ||
copyright fees; (4) licensing fees; and (5) other | ||
similar expenses and costs. For purposes of this | ||
subparagraph, "intangible property" includes patents, | ||
patent applications, trade names, trademarks, service | ||
marks, copyrights, mask works, trade secrets, and | ||
similar types of intangible assets; |
This paragraph shall not apply to the following: | ||
(i) any item of intangible expenses or costs | ||
paid, accrued, or incurred, directly or | ||
indirectly, from a transaction with a person who | ||
is subject in a foreign country or state, other | ||
than a state which requires mandatory unitary | ||
reporting, to a tax on or measured by net income | ||
with respect to such item; or | ||
(ii) any item of intangible expense or cost | ||
paid, accrued, or incurred, directly or | ||
indirectly, if the taxpayer can establish, based | ||
on a preponderance of the evidence, both of the | ||
following: | ||
(a) the person during the same taxable | ||
year paid, accrued, or incurred, the | ||
intangible expense or cost to a person that is | ||
not a related member, and | ||
(b) the transaction giving rise to the | ||
intangible expense or cost between the | ||
taxpayer and the person did not have as a | ||
principal purpose the avoidance of Illinois | ||
income tax, and is paid pursuant to a contract | ||
or agreement that reflects arm's-length terms; | ||
or | ||
(iii) any item of intangible expense or cost | ||
paid, accrued, or incurred, directly or |
indirectly, from a transaction with a person if | ||
the taxpayer establishes by clear and convincing | ||
evidence, that the adjustments are unreasonable; | ||
or if the taxpayer and the Director agree in | ||
writing to the application or use of an | ||
alternative method of apportionment under Section | ||
304(f);
| ||
Nothing in this subsection shall preclude the | ||
Director from making any other adjustment | ||
otherwise allowed under Section 404 of this Act | ||
for any tax year beginning after the effective | ||
date of this amendment provided such adjustment is | ||
made pursuant to regulation adopted by the | ||
Department and such regulations provide methods | ||
and standards by which the Department will utilize | ||
its authority under Section 404 of this Act;
| ||
(D-9) For taxable years ending on or after | ||
December 31, 2008, an amount equal to the amount of | ||
insurance premium expenses and costs otherwise allowed | ||
as a deduction in computing base income, and that were | ||
paid, accrued, or incurred, directly or indirectly, to | ||
a person who would be a member of the same unitary | ||
business group but for the fact that the person is | ||
prohibited under Section 1501(a)(27) from being | ||
included in the unitary business group because he or | ||
she is ordinarily required to apportion business |
income under different subsections of Section 304. The | ||
addition modification required by this subparagraph | ||
shall be reduced to the extent that dividends were | ||
included in base income of the unitary group for the | ||
same taxable year and received by the taxpayer or by a | ||
member of the taxpayer's unitary business group | ||
(including amounts included in gross income under | ||
Sections 951 through 964 of the Internal Revenue Code | ||
and amounts included in gross income under Section 78 | ||
of the Internal Revenue Code) with respect to the | ||
stock of the same person to whom the premiums and costs | ||
were directly or indirectly paid, incurred, or | ||
accrued. The preceding sentence does not apply to the | ||
extent that the same dividends caused a reduction to | ||
the addition modification required under Section | ||
203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act; | ||
(D-10) An amount equal to the credit allowable to | ||
the taxpayer under Section 218(a) of this Act, | ||
determined without regard to Section 218(c) of this | ||
Act; | ||
(D-11) For taxable years ending on or after | ||
December 31, 2017, an amount equal to the deduction | ||
allowed under Section 199 of the Internal Revenue Code | ||
for the taxable year; | ||
and by deducting from the total so obtained the following | ||
amounts: |
(E) The valuation limitation amount; | ||
(F) An amount equal to the amount of any tax | ||
imposed by this Act which
was refunded to the taxpayer | ||
and included in such total for the taxable year; | ||
(G) An amount equal to all amounts included in | ||
taxable income as
modified by subparagraphs (A), (B), | ||
(C) and (D) which are exempt from
taxation by this | ||
State either by reason of its statutes or Constitution | ||
or
by reason of
the Constitution, treaties or statutes | ||
of the United States;
provided that, in the case of any | ||
statute of this State that exempts income
derived from | ||
bonds or other obligations from the tax imposed under | ||
this Act,
the amount exempted shall be the interest | ||
net of bond premium amortization; | ||
(H) Any income of the partnership which | ||
constitutes personal service
income as defined in | ||
Section 1348(b)(1) of the Internal Revenue Code (as
in | ||
effect December 31, 1981) or a reasonable allowance | ||
for compensation
paid or accrued for services rendered | ||
by partners to the partnership,
whichever is greater; | ||
this subparagraph (H) is exempt from the provisions of | ||
Section 250; | ||
(I) An amount equal to all amounts of income | ||
distributable to an entity
subject to the Personal | ||
Property Tax Replacement Income Tax imposed by
| ||
subsections (c) and (d) of Section 201 of this Act |
including amounts
distributable to organizations | ||
exempt from federal income tax by reason of
Section | ||
501(a) of the Internal Revenue Code; this subparagraph | ||
(I) is exempt from the provisions of Section 250; | ||
(J) With the exception of any amounts subtracted | ||
under subparagraph
(G),
an amount equal to the sum of | ||
all amounts disallowed as deductions
by (i) Sections | ||
171(a)(2) and 265(a)(2) of the Internal Revenue Code, | ||
and all amounts of expenses allocable to
interest and | ||
disallowed as deductions by Section 265(a)(1) of the | ||
Internal
Revenue Code;
and (ii) for taxable years
| ||
ending on or after August 13, 1999, Sections
| ||
171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of the | ||
Internal Revenue Code, plus, (iii) for taxable years | ||
ending on or after December 31, 2011, Section | ||
45G(e)(3) of the Internal Revenue Code and, for | ||
taxable years ending on or after December 31, 2008, | ||
any amount included in gross income under Section 87 | ||
of the Internal Revenue Code; the provisions of this
| ||
subparagraph are exempt from the provisions of Section | ||
250; | ||
(K) An amount equal to those dividends included in | ||
such total which were
paid by a corporation which | ||
conducts business operations in a River Edge | ||
Redevelopment Zone or zones created under the River | ||
Edge Redevelopment Zone Act and
conducts substantially |
all of its operations
from a River Edge Redevelopment | ||
Zone or zones. This subparagraph (K) is exempt from | ||
the provisions of Section 250; | ||
(L) An amount equal to any contribution made to a | ||
job training project
established pursuant to the Real | ||
Property Tax Increment Allocation
Redevelopment Act; | ||
(M) An amount equal to those dividends included in | ||
such total
that were paid by a corporation that | ||
conducts business operations in a
federally designated | ||
Foreign Trade Zone or Sub-Zone and that is designated | ||
a
High Impact Business located in Illinois; provided | ||
that dividends eligible
for the deduction provided in | ||
subparagraph (K) of paragraph (2) of this
subsection | ||
shall not be eligible for the deduction provided under | ||
this
subparagraph (M); | ||
(N) An amount equal to the amount of the deduction | ||
used to compute the
federal income tax credit for | ||
restoration of substantial amounts held under
claim of | ||
right for the taxable year pursuant to Section 1341 of | ||
the
Internal Revenue Code; | ||
(O) For taxable years 2001 and thereafter, for the | ||
taxable year in
which the bonus depreciation deduction
| ||
is taken on the taxpayer's federal income tax return | ||
under
subsection (k) of Section 168 of the Internal | ||
Revenue Code and for each
applicable taxable year | ||
thereafter, an amount equal to "x", where: |
(1) "y" equals the amount of the depreciation | ||
deduction taken for the
taxable year
on the | ||
taxpayer's federal income tax return on property | ||
for which the bonus
depreciation deduction
was | ||
taken in any year under subsection (k) of Section | ||
168 of the Internal
Revenue Code, but not | ||
including the bonus depreciation deduction; | ||
(2) for taxable years ending on or before | ||
December 31, 2005, "x" equals "y" multiplied by 30 | ||
and then divided by 70 (or "y"
multiplied by | ||
0.429); and | ||
(3) for taxable years ending after December | ||
31, 2005: | ||
(i) for property on which a bonus | ||
depreciation deduction of 30% of the adjusted | ||
basis was taken, "x" equals "y" multiplied by | ||
30 and then divided by 70 (or "y"
multiplied | ||
by 0.429); | ||
(ii) for property on which a bonus | ||
depreciation deduction of 50% of the adjusted | ||
basis was taken, "x" equals "y" multiplied by | ||
1.0; | ||
(iii) for property on which a bonus | ||
depreciation deduction of 100% of the adjusted | ||
basis was taken in a taxable year ending on or | ||
after December 31, 2021, "x" equals the |
depreciation deduction that would be allowed | ||
on that property if the taxpayer had made the | ||
election under Section 168(k)(7) of the | ||
Internal Revenue Code to not claim bonus | ||
depreciation on that property; and | ||
(iv) for property on which a bonus | ||
depreciation deduction of a percentage other | ||
than 30%, 50% or 100% of the adjusted basis | ||
was taken in a taxable year ending on or after | ||
December 31, 2021, "x" equals "y" multiplied | ||
by 100 times the percentage bonus depreciation | ||
on the property (that is, 100(bonus%)) and | ||
then divided by 100 times 1 minus the | ||
percentage bonus depreciation on the property | ||
(that is, 100(1–bonus%)). | ||
The aggregate amount deducted under this | ||
subparagraph in all taxable
years for any one piece of | ||
property may not exceed the amount of the bonus
| ||
depreciation deduction
taken on that property on the | ||
taxpayer's federal income tax return under
subsection | ||
(k) of Section 168 of the Internal Revenue Code. This | ||
subparagraph (O) is exempt from the provisions of | ||
Section 250; | ||
(P) If the taxpayer sells, transfers, abandons, or | ||
otherwise disposes of
property for which the taxpayer | ||
was required in any taxable year to make an
addition |
modification under subparagraph (D-5), then an amount | ||
equal to that
addition modification. | ||
If the taxpayer continues to own property through | ||
the last day of the last tax year for which a | ||
subtraction is allowed with respect to that property | ||
under subparagraph (O) and for which the taxpayer was | ||
required in any taxable year to make an addition | ||
modification under subparagraph (D-5), then an amount | ||
equal to that addition modification.
| ||
The taxpayer is allowed to take the deduction | ||
under this subparagraph
only once with respect to any | ||
one piece of property. | ||
This subparagraph (P) is exempt from the | ||
provisions of Section 250; | ||
(Q) The amount of (i) any interest income (net of | ||
the deductions allocable thereto) taken into account | ||
for the taxable year with respect to a transaction | ||
with a taxpayer that is required to make an addition | ||
modification with respect to such transaction under | ||
Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||
203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||
the amount of such addition modification and
(ii) any | ||
income from intangible property (net of the deductions | ||
allocable thereto) taken into account for the taxable | ||
year with respect to a transaction with a taxpayer | ||
that is required to make an addition modification with |
respect to such transaction under Section | ||
203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||
203(d)(2)(D-8), but not to exceed the amount of such | ||
addition modification. This subparagraph (Q) is exempt | ||
from Section 250;
| ||
(R) An amount equal to the interest income taken | ||
into account for the taxable year (net of the | ||
deductions allocable thereto) with respect to | ||
transactions with (i) a foreign person who would be a | ||
member of the taxpayer's unitary business group but | ||
for the fact that the foreign person's business | ||
activity outside the United States is 80% or more of | ||
that person's total business activity and (ii) for | ||
taxable years ending on or after December 31, 2008, to | ||
a person who would be a member of the same unitary | ||
business group but for the fact that the person is | ||
prohibited under Section 1501(a)(27) from being | ||
included in the unitary business group because he or | ||
she is ordinarily required to apportion business | ||
income under different subsections of Section 304, but | ||
not to exceed the addition modification required to be | ||
made for the same taxable year under Section | ||
203(d)(2)(D-7) for interest paid, accrued, or | ||
incurred, directly or indirectly, to the same person. | ||
This subparagraph (R) is exempt from Section 250; | ||
(S) An amount equal to the income from intangible |
property taken into account for the taxable year (net | ||
of the deductions allocable thereto) with respect to | ||
transactions with (i) a foreign person who would be a | ||
member of the taxpayer's unitary business group but | ||
for the fact that the foreign person's business | ||
activity outside the United States is 80% or more of | ||
that person's total business activity and (ii) for | ||
taxable years ending on or after December 31, 2008, to | ||
a person who would be a member of the same unitary | ||
business group but for the fact that the person is | ||
prohibited under Section 1501(a)(27) from being | ||
included in the unitary business group because he or | ||
she is ordinarily required to apportion business | ||
income under different subsections of Section 304, but | ||
not to exceed the addition modification required to be | ||
made for the same taxable year under Section | ||
203(d)(2)(D-8) for intangible expenses and costs paid, | ||
accrued, or incurred, directly or indirectly, to the | ||
same person. This subparagraph (S) is exempt from | ||
Section 250; and
| ||
(T) For taxable years ending on or after December | ||
31, 2011, in the case of a taxpayer who was required to | ||
add back any insurance premiums under Section | ||
203(d)(2)(D-9), such taxpayer may elect to subtract | ||
that part of a reimbursement received from the | ||
insurance company equal to the amount of the expense |
or loss (including expenses incurred by the insurance | ||
company) that would have been taken into account as a | ||
deduction for federal income tax purposes if the | ||
expense or loss had been uninsured. If a taxpayer | ||
makes the election provided for by this subparagraph | ||
(T), the insurer to which the premiums were paid must | ||
add back to income the amount subtracted by the | ||
taxpayer pursuant to this subparagraph (T). This | ||
subparagraph (T) is exempt from the provisions of | ||
Section 250. | ||
(e) Gross income; adjusted gross income; taxable income. | ||
(1) In general. Subject to the provisions of paragraph | ||
(2) and
subsection (b)(3), for purposes of this Section | ||
and Section 803(e), a
taxpayer's gross income, adjusted | ||
gross income, or taxable income for
the taxable year shall | ||
mean the amount of gross income, adjusted gross
income or | ||
taxable income properly reportable for federal income tax
| ||
purposes for the taxable year under the provisions of the | ||
Internal
Revenue Code. Taxable income may be less than | ||
zero. However, for taxable
years ending on or after | ||
December 31, 1986, net operating loss
carryforwards from | ||
taxable years ending prior to December 31, 1986, may not
| ||
exceed the sum of federal taxable income for the taxable | ||
year before net
operating loss deduction, plus the excess | ||
of addition modifications over
subtraction modifications |
for the taxable year. For taxable years ending
prior to | ||
December 31, 1986, taxable income may never be an amount | ||
in excess
of the net operating loss for the taxable year as | ||
defined in subsections
(c) and (d) of Section 172 of the | ||
Internal Revenue Code, provided that when
taxable income | ||
of a corporation (other than a Subchapter S corporation),
| ||
trust, or estate is less than zero and addition | ||
modifications, other than
those provided by subparagraph | ||
(E) of paragraph (2) of subsection (b) for
corporations or | ||
subparagraph (E) of paragraph (2) of subsection (c) for
| ||
trusts and estates, exceed subtraction modifications, an | ||
addition
modification must be made under those | ||
subparagraphs for any other taxable
year to which the | ||
taxable income less than zero (net operating loss) is
| ||
applied under Section 172 of the Internal Revenue Code or | ||
under
subparagraph (E) of paragraph (2) of this subsection | ||
(e) applied in
conjunction with Section 172 of the | ||
Internal Revenue Code. | ||
(2) Special rule. For purposes of paragraph (1) of | ||
this subsection,
the taxable income properly reportable | ||
for federal income tax purposes
shall mean: | ||
(A) Certain life insurance companies. In the case | ||
of a life
insurance company subject to the tax imposed | ||
by Section 801 of the
Internal Revenue Code, life | ||
insurance company taxable income, plus the
amount of | ||
distribution from pre-1984 policyholder surplus |
accounts as
calculated under Section 815a of the | ||
Internal Revenue Code; | ||
(B) Certain other insurance companies. In the case | ||
of mutual
insurance companies subject to the tax | ||
imposed by Section 831 of the
Internal Revenue Code, | ||
insurance company taxable income; | ||
(C) Regulated investment companies. In the case of | ||
a regulated
investment company subject to the tax | ||
imposed by Section 852 of the
Internal Revenue Code, | ||
investment company taxable income; | ||
(D) Real estate investment trusts. In the case of | ||
a real estate
investment trust subject to the tax | ||
imposed by Section 857 of the
Internal Revenue Code, | ||
real estate investment trust taxable income; | ||
(E) Consolidated corporations. In the case of a | ||
corporation which
is a member of an affiliated group | ||
of corporations filing a consolidated
income tax | ||
return for the taxable year for federal income tax | ||
purposes,
taxable income determined as if such | ||
corporation had filed a separate
return for federal | ||
income tax purposes for the taxable year and each
| ||
preceding taxable year for which it was a member of an | ||
affiliated group.
For purposes of this subparagraph, | ||
the taxpayer's separate taxable
income shall be | ||
determined as if the election provided by Section
| ||
243(b)(2) of the Internal Revenue Code had been in |
effect for all such years; | ||
(F) Cooperatives. In the case of a cooperative | ||
corporation or
association, the taxable income of such | ||
organization determined in
accordance with the | ||
provisions of Section 1381 through 1388 of the
| ||
Internal Revenue Code, but without regard to the | ||
prohibition against offsetting losses from patronage | ||
activities against income from nonpatronage | ||
activities; except that a cooperative corporation or | ||
association may make an election to follow its federal | ||
income tax treatment of patronage losses and | ||
nonpatronage losses. In the event such election is | ||
made, such losses shall be computed and carried over | ||
in a manner consistent with subsection (a) of Section | ||
207 of this Act and apportioned by the apportionment | ||
factor reported by the cooperative on its Illinois | ||
income tax return filed for the taxable year in which | ||
the losses are incurred. The election shall be | ||
effective for all taxable years with original returns | ||
due on or after the date of the election. In addition, | ||
the cooperative may file an amended return or returns, | ||
as allowed under this Act, to provide that the | ||
election shall be effective for losses incurred or | ||
carried forward for taxable years occurring prior to | ||
the date of the election. Once made, the election may | ||
only be revoked upon approval of the Director. The |
Department shall adopt rules setting forth | ||
requirements for documenting the elections and any | ||
resulting Illinois net loss and the standards to be | ||
used by the Director in evaluating requests to revoke | ||
elections. Public Act 96-932 is declaratory of | ||
existing law; | ||
(G) Subchapter S corporations. In the case of: (i) | ||
a Subchapter S
corporation for which there is in | ||
effect an election for the taxable year
under Section | ||
1362 of the Internal Revenue Code, the taxable income | ||
of such
corporation determined in accordance with | ||
Section 1363(b) of the Internal
Revenue Code, except | ||
that taxable income shall take into
account those | ||
items which are required by Section 1363(b)(1) of the
| ||
Internal Revenue Code to be separately stated; and | ||
(ii) a Subchapter
S corporation for which there is in | ||
effect a federal election to opt out of
the provisions | ||
of the Subchapter S Revision Act of 1982 and have | ||
applied
instead the prior federal Subchapter S rules | ||
as in effect on July 1, 1982,
the taxable income of | ||
such corporation determined in accordance with the
| ||
federal Subchapter S rules as in effect on July 1, | ||
1982; and | ||
(H) Partnerships. In the case of a partnership, | ||
taxable income
determined in accordance with Section | ||
703 of the Internal Revenue Code,
except that taxable |
income shall take into account those items which are
| ||
required by Section 703(a)(1) to be separately stated | ||
but which would be
taken into account by an individual | ||
in calculating his taxable income. | ||
(3) Recapture of business expenses on disposition of | ||
asset or business. Notwithstanding any other law to the | ||
contrary, if in prior years income from an asset or | ||
business has been classified as business income and in a | ||
later year is demonstrated to be non-business income, then | ||
all expenses, without limitation, deducted in such later | ||
year and in the 2 immediately preceding taxable years | ||
related to that asset or business that generated the | ||
non-business income shall be added back and recaptured as | ||
business income in the year of the disposition of the | ||
asset or business. Such amount shall be apportioned to | ||
Illinois using the greater of the apportionment fraction | ||
computed for the business under Section 304 of this Act | ||
for the taxable year or the average of the apportionment | ||
fractions computed for the business under Section 304 of | ||
this Act for the taxable year and for the 2 immediately | ||
preceding taxable years.
| ||
(f) Valuation limitation amount. | ||
(1) In general. The valuation limitation amount | ||
referred to in
subsections (a)(2)(G), (c)(2)(I) and | ||
(d)(2)(E) is an amount equal to: |
(A) The sum of the pre-August 1, 1969 appreciation | ||
amounts (to the
extent consisting of gain reportable | ||
under the provisions of Section
1245 or 1250 of the | ||
Internal Revenue Code) for all property in respect
of | ||
which such gain was reported for the taxable year; | ||
plus | ||
(B) The lesser of (i) the sum of the pre-August 1, | ||
1969 appreciation
amounts (to the extent consisting of | ||
capital gain) for all property in
respect of which | ||
such gain was reported for federal income tax purposes
| ||
for the taxable year, or (ii) the net capital gain for | ||
the taxable year,
reduced in either case by any amount | ||
of such gain included in the amount
determined under | ||
subsection (a)(2)(F) or (c)(2)(H). | ||
(2) Pre-August 1, 1969 appreciation amount. | ||
(A) If the fair market value of property referred | ||
to in paragraph
(1) was readily ascertainable on | ||
August 1, 1969, the pre-August 1, 1969
appreciation | ||
amount for such property is the lesser of (i) the | ||
excess of
such fair market value over the taxpayer's | ||
basis (for determining gain)
for such property on that | ||
date (determined under the Internal Revenue
Code as in | ||
effect on that date), or (ii) the total gain realized | ||
and
reportable for federal income tax purposes in | ||
respect of the sale,
exchange or other disposition of | ||
such property. |
(B) If the fair market value of property referred | ||
to in paragraph
(1) was not readily ascertainable on | ||
August 1, 1969, the pre-August 1,
1969 appreciation | ||
amount for such property is that amount which bears
| ||
the same ratio to the total gain reported in respect of | ||
the property for
federal income tax purposes for the | ||
taxable year, as the number of full
calendar months in | ||
that part of the taxpayer's holding period for the
| ||
property ending July 31, 1969 bears to the number of | ||
full calendar
months in the taxpayer's entire holding | ||
period for the
property. | ||
(C) The Department shall prescribe such | ||
regulations as may be
necessary to carry out the | ||
purposes of this paragraph. | ||
(g) Double deductions. Unless specifically provided | ||
otherwise, nothing
in this Section shall permit the same item | ||
to be deducted more than once. | ||
(h) Legislative intention. Except as expressly provided by | ||
this
Section there shall be no modifications or limitations on | ||
the amounts
of income, gain, loss or deduction taken into | ||
account in determining
gross income, adjusted gross income or | ||
taxable income for federal income
tax purposes for the taxable | ||
year, or in the amount of such items
entering into the | ||
computation of base income and net income under this
Act for |
such taxable year, whether in respect of property values as of
| ||
August 1, 1969 or otherwise. | ||
(Source: P.A. 101-9, eff. 6-5-19; 101-81, eff. 7-12-19; | ||
102-16, eff. 6-17-21; 102-558, eff. 8-20-21; 102-658, eff. | ||
8-27-21; 102-813, eff. 5-13-22.)
| ||
Section 10. The Live Theater Production Tax Credit Act is | ||
amended by changing Sections 10-5, 10-10, 10-20, and 10-30 as | ||
follows: | ||
(35 ILCS 17/10-5)
| ||
Sec. 10-5. Purpose. The Illinois economy depends heavily | ||
on the commercial for-profit live theater industry and the | ||
accredited theater productions pre-Broadway and long-run shows | ||
that are presented in Illinois. As a result of intense | ||
competition from other prominent theater cities in the United | ||
States and abroad in attracting theater productions | ||
pre-Broadway and long-run shows , Illinois must move | ||
aggressively with new business development investment tools so | ||
that Illinois is more competitive in site location decision | ||
making for show producers. In an increasingly global economy, | ||
Illinois' long-term development will benefit from the | ||
rational, strategic use of State resources in support of | ||
accredited theater productions pre-Broadway live theater and | ||
long-run show development and growth . It is the purpose of | ||
this Act to preserve and expand the existing work force used in |
live theater and enhance the marketing of the presentation of | ||
live theater in Illinois. It shall be the policy of this State | ||
to promote and encourage the training and hiring of Illinois | ||
residents who represent the diversity of the Illinois | ||
population through the creation and implementation of | ||
training, education, and recruitment programs organized in | ||
cooperation with Illinois colleges and universities, labor | ||
organizations, and the commercial for-profit live theater | ||
industry.
| ||
(Source: P.A. 97-636, eff. 6-1-12 .) | ||
(35 ILCS 17/10-10)
| ||
Sec. 10-10. Definitions. As used in this Act: | ||
"Accredited theater production" means a for-profit live | ||
stage presentation in a qualified production facility, as | ||
defined in this Section, that is either (i) a pre-Broadway | ||
production or (ii) a long-run production for which the | ||
aggregate Illinois labor and marketing expenditures exceed | ||
$100,000. For credits awarded under this Act in State Fiscal | ||
Year 2023, "accredited theater production" also includes any | ||
commercial Broadway touring show. | ||
"Commercial Broadway touring show" means a production that | ||
(i) is performed in a qualified production facility and plays | ||
in more than 2 other markets in North America outside of | ||
Illinois within 12 months of its Illinois presentation and | ||
(ii) has Illinois production spending of not less than |
$100,000, as shown on the applicant's application for the | ||
credit. | ||
"Pre-Broadway production" means a live stage production | ||
that, in its original or adaptive version, is performed in a | ||
qualified production facility having a presentation scheduled | ||
for Broadway's Theater District in New York City within 12 | ||
months after its Illinois presentation. | ||
"Long-run production" means a live stage production that | ||
is performed in a qualified production facility for longer | ||
than 8 weeks, with at least 6 performances per week, and | ||
includes a production that spans the end of one tax year and | ||
the commencement of a new tax year that, in combination, meets | ||
the criteria set forth in this definition making it a long-run | ||
production eligible for a theater tax credit award in each tax | ||
year or portion thereof. | ||
"Accredited theater production certificate" means a | ||
certificate issued by the Department certifying that the | ||
production is an accredited theater production that meets the | ||
guidelines of this Act. | ||
"Applicant" means a taxpayer that is a theater producer, | ||
owner, licensee, operator, or presenter that is presenting or | ||
has presented a live stage presentation located within the | ||
State of Illinois who: | ||
(1) owns or licenses the theatrical rights of the | ||
stage presentation for the Illinois production period; or | ||
(2) has contracted or will contract directly with the |
owner or licensee of the theatrical rights or a person | ||
acting on behalf of the owner or licensee to provide live | ||
performances of the production. | ||
An applicant that directly or indirectly owns, controls, | ||
or operates multiple qualified production facilities shall be | ||
presumed to be and considered for the purposes of this Act to | ||
be a single applicant; provided, however, that as to each of | ||
the applicant's qualified production facilities, the applicant | ||
shall be eligible to separately and contemporaneously (i) | ||
apply for and obtain accredited theater production | ||
certificates, (ii) stage accredited theater productions, and | ||
(iii) apply for and receive a tax credit award certificate for | ||
each of the applicant's accredited theater productions | ||
performed at each of the applicant's qualified production | ||
facilities. | ||
"Department" means the Department of Commerce and Economic | ||
Opportunity. | ||
"Director" means the Director of the Department. | ||
"Illinois labor expenditure" means gross salary or wages | ||
including, but not limited to, taxes, benefits, and any other | ||
consideration incurred or paid to non-talent employees of the | ||
applicant for services rendered to and on behalf of the | ||
accredited theater production. To qualify as an Illinois labor | ||
expenditure, the expenditure must be: | ||
(1) incurred or paid by the applicant on or after the | ||
effective date of the Act for services related to any |
portion of an accredited theater production from its | ||
pre-production stages, including, but not limited to, the | ||
writing of the script, casting, hiring of service | ||
providers, purchases from vendors, marketing, advertising, | ||
public relations, load in, rehearsals, performances, other | ||
accredited theater production related activities, and load | ||
out; | ||
(2) directly attributable to the accredited theater | ||
production; | ||
(3) limited to the first $100,000 of wages incurred or | ||
paid to each employee of an accredited theater production | ||
in each tax year; | ||
(4) included in the federal income tax basis of the | ||
property; | ||
(5) paid in the tax year for which the applicant is | ||
claiming the tax credit award, or no later than 60 days | ||
after the end of the tax year; | ||
(6) paid to persons residing in Illinois at the time | ||
payments were made; and | ||
(7) reasonable in the circumstances. | ||
"Illinois production spending" means any and all expenses | ||
directly or indirectly incurred relating to an accredited | ||
theater production presented in any qualified production | ||
facility of the applicant, including, but not limited to, | ||
expenditures for: | ||
(1) national marketing, public relations, and the |
creation and placement of print, electronic, television, | ||
billboard, and other forms of advertising; and | ||
(2) the construction and fabrication of scenic | ||
materials and elements; provided, however, that the | ||
maximum amount of expenditures attributable to the | ||
construction and fabrication of scenic materials and | ||
elements eligible for a tax credit award shall not exceed | ||
$500,000 per applicant per production in any single tax | ||
year. | ||
"Qualified production facility" means a facility located | ||
in the State in which live theatrical productions are, or are | ||
intended to be, exclusively presented that contains at least | ||
one stage, a seating capacity of 1,200 or more seats, and | ||
dressing rooms, storage areas, and other ancillary amenities | ||
necessary for the accredited theater production. | ||
"Tax credit award" means the issuance to a taxpayer by the | ||
Department of a tax credit award in conformance with Sections | ||
10-40 and 10-45 of this Act. | ||
"Tax year" means a calendar year for the period January 1 | ||
to and including December 31.
| ||
(Source: P.A. 97-636, eff. 6-1-12 .) | ||
(35 ILCS 17/10-20)
| ||
Sec. 10-20. Tax credit award. Subject to the conditions | ||
set forth in this Act, an applicant is entitled to a tax credit | ||
award as approved by the Department for qualifying Illinois |
labor expenditures and Illinois production spending for each | ||
tax year in which the applicant is awarded an accredited | ||
theater production certificate issued by the Department. The | ||
amount of tax credits awarded pursuant to this Act shall not | ||
exceed $2,000,000 in any State fiscal year, except that the | ||
amount of tax credits awarded pursuant to this Act for the | ||
State fiscal year ending on June 30, 2023 shall not exceed | ||
$4,000,000. For the State fiscal year ending on June 30, 2023, | ||
no more than $2,000,000 in credits may be awarded to | ||
accredited theater productions that are not commercial | ||
Broadway touring shows, and no more than $2,000,000 in credits | ||
may be awarded to commercial Broadway touring shows. for State | ||
fiscal years ending on or before June 30, 2022 and ending on or | ||
after June 30, 2024. Due to the impact of the COVID-19 | ||
pandemic, for the State fiscal year ending on June 30, 2023, | ||
the amount of tax credits awarded pursuant to this Act shall | ||
not exceed $4,000,000. For the State fiscal year ending on | ||
June 30, 2023, credits awarded under this Act in excess of | ||
$2,000,000 must be awarded to applicants with Illinois | ||
production spending of not less than $2,500,000, as shown on | ||
the applicant's application for the credit. Credits shall be | ||
awarded on a first-come, first-served basis. Notwithstanding | ||
the foregoing, if the amount of credits applied for in any | ||
fiscal year exceeds the amount authorized to be awarded under | ||
this Section, the excess credit amount shall be awarded in the | ||
next fiscal year in which credits remain available for award |
and shall be treated as having been applied for on the first | ||
day of that fiscal year.
| ||
(Source: P.A. 102-700, eff. 4-19-22.) | ||
(35 ILCS 17/10-30)
| ||
Sec. 10-30. Review of application for accredited theater | ||
production certificate. | ||
(a) The Department shall issue an accredited theater | ||
production certificate to an applicant if it finds that by a | ||
preponderance the following conditions exist: | ||
(1) the applicant intends to make the expenditure in | ||
the State required for certification of the accredited | ||
theater production; | ||
(2) the applicant's accredited theater production is | ||
economically sound and will benefit the people of the | ||
State of Illinois by increasing opportunities for | ||
employment and will strengthen the economy of Illinois; | ||
(3) the following requirements related to the | ||
implementation of a diversity plan have been met: (i) the | ||
applicant has filed with the Department a diversity plan | ||
outlining specific goals for hiring Illinois labor | ||
expenditure eligible minority persons and women, as | ||
defined in the Business Enterprise for Minorities, Women, | ||
and Persons with Disabilities Act, and for using vendors | ||
receiving certification under the Business Enterprise for | ||
Minorities, Women, and Persons with Disabilities Act; (ii) |
the Department has approved the plan as meeting the | ||
requirements established by the Department and verified | ||
that the applicant has met or made good faith efforts in | ||
achieving those goals; and (iii) the Department has | ||
adopted any rules that are necessary to ensure compliance | ||
with the provisions set forth in this paragraph and | ||
necessary to require that the applicant's plan reflects | ||
the diversity of the population of this State; | ||
(4) the applicant's accredited theater production | ||
application indicates whether the applicant intends to | ||
participate in training, education, and recruitment | ||
programs that are organized in cooperation with Illinois | ||
colleges and universities, labor organizations, and the | ||
holders of accredited theater production certificates and | ||
are designed to promote and encourage the training and | ||
hiring of Illinois residents who represent the diversity | ||
of Illinois; | ||
(5) except for commercial Broadway touring shows | ||
qualifying in the State fiscal year ending June 30, 2023, | ||
if not for the tax credit award, the applicant's | ||
accredited theater production would not occur in Illinois, | ||
which may be demonstrated by any means, including, but not | ||
limited to, evidence that: (i) the applicant, presenter, | ||
owner, or licensee of the production rights has other | ||
state or international location options at which to | ||
present the production and could reasonably and |
efficiently locate outside of the State, (ii) at least one | ||
other state or nation could be considered for the | ||
production, (iii) the receipt of the tax award credit is a | ||
major factor in the decision of the applicant, presenter, | ||
production owner or licensee as to where the production | ||
will be presented and that without the tax credit award | ||
the applicant likely would not create or retain jobs in | ||
Illinois, or (iv) receipt of the tax credit award is | ||
essential to the applicant's decision to create or retain | ||
new jobs in the State; and | ||
(6) the tax credit award will result in an overall | ||
positive impact to the State, as determined by the | ||
Department using the best available data. | ||
(b) If any of the provisions in this Section conflict with | ||
any existing collective bargaining agreements, the terms and | ||
conditions of those collective bargaining agreements shall | ||
control.
| ||
(c) The Department shall act expeditiously regarding | ||
approval of applications for accredited theater production | ||
certificates so as to accommodate the pre-production work, | ||
booking, commencement of ticket sales, determination of | ||
performance dates, load in, and other matters relating to the | ||
live theater productions for which approval is sought.
| ||
(Source: P.A. 100-391, eff. 8-25-17.) | ||
Section 15. The Property Tax Code is amended by changing |
Section 21-25 as follows: | ||
(35 ILCS 200/21-25)
| ||
Sec. 21-25. Due dates; accelerated billing in counties of | ||
3,000,000 or more.
Except as hereinafter provided and as | ||
provided in Section 21-40, in
counties with 3,000,000 or more | ||
inhabitants
in which the accelerated method of billing and | ||
paying taxes provided for in
Section 21-30 is in effect, the | ||
estimated first installment of unpaid taxes
shall be deemed | ||
delinquent and shall bear interest after March 1 at the rate of
| ||
1 1/2% per month or portion thereof until paid or forfeited. | ||
For tax year 2010, the estimated first installment of unpaid | ||
taxes shall be deemed delinquent and shall bear interest after | ||
April 1 at the rate of 1.5% per month or portion thereof until | ||
paid or forfeited. For tax year 2022, the estimated first | ||
installment of unpaid taxes shall be deemed delinquent and | ||
shall bear interest after April 1, 2023 at the rate of 1.5% per | ||
month or portion thereof until paid or forfeited. For all tax | ||
years, the second
installment of unpaid taxes shall be deemed | ||
delinquent and shall bear interest
after August 1 annually at | ||
the same interest rate until paid or forfeited.
| ||
Notwithstanding any other provision of law, if a taxpayer owes | ||
an arrearage of taxes due to an administrative error, and if | ||
the county collector sends a separate bill for that arrearage | ||
as provided in Section 14-41, then any part of the arrearage of | ||
taxes that remains unpaid on the day after the due date |
specified on that tax bill
shall be deemed delinquent and | ||
shall bear interest after that date at the rate of
1 1/2% per | ||
month or portion thereof.
| ||
If the county board elects by ordinance adopted prior to | ||
July 1 of a levy
year to provide for taxes to be paid in 4 | ||
installments, each installment for
that levy year and each | ||
subsequent year shall be deemed delinquent and shall
begin to | ||
bear interest 30 days after the date specified by the | ||
ordinance for
mailing bills, at the rate of 1 1/2% per month or | ||
portion thereof, until paid
or forfeited.
| ||
Payment received by mail and postmarked on or before the | ||
required due date
is not delinquent.
| ||
Taxes levied on homestead property in which a member of | ||
the National Guard or
reserves of the armed forces of the | ||
United States who was called to active duty
on or after August | ||
1, 1990, and who has an ownership interest, shall not be
deemed | ||
delinquent and no interest shall accrue or be charged as a | ||
penalty on
such taxes due and payable in 1991 or 1992 until one | ||
year after that member
returns to civilian status.
| ||
If an Illinois resident who is a member of the Illinois | ||
National Guard
or a reserve component of the armed forces of | ||
the United States
and who has an ownership interest in | ||
property taxed under this Act is
called to
active duty
for | ||
deployment outside the continental United States
and
is on | ||
active duty on the due date of any installment of taxes due | ||
under
this Act, he or she shall not be deemed delinquent in the |
payment of the
installment and no interest shall accrue or be | ||
charged as a penalty on the
installment until 180 days after | ||
that member returns to
civilian
status.
To be deemed not | ||
delinquent in the payment of an installment of taxes and any
| ||
interest
on that installment, the reservist or guardsperson | ||
must make a reasonable effort to notify the county clerk and | ||
the county collector of his or her activation to active duty | ||
and must notify the county clerk and the county collector
| ||
within 180
days after his or her deactivation and provide | ||
verification of the date of his
or her
deactivation. An | ||
installment of property taxes on the property of any reservist
| ||
or
guardsperson who fails to provide timely notice and | ||
verification of
deactivation to the
county clerk is subject to | ||
interest and penalties as delinquent taxes under
this Code | ||
from
the date of deactivation.
| ||
(Source: P.A. 98-286, eff. 1-1-14.)
| ||
Section 99. Effective date. This Act takes effect upon | ||
becoming law.
|