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Public Act 096-0520 |
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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 5. The Department of Revenue Law of the
Civil | ||||
Administrative Code of Illinois is amended by changing Section | ||||
2505-200 as follows:
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(20 ILCS 2505/2505-200) (was 20 ILCS 2505/39c-1a)
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Sec. 2505-200. Electronic filing rules. | ||||
(a) The Department may adopt
rules to authorize the | ||||
electronic filing of any return or document required to
be | ||||
filed under any Act administered by the Department. | ||||
(b) The Department may adopt rules to require the | ||||
electronic filing of the income and replacement tax return | ||||
required to be filed under the Illinois Income Tax Act for a | ||||
taxable year by any taxpayer (other than an individual) who is | ||||
required to file its federal income tax return electronically | ||||
for the taxable year. | ||||
(c)
In the case of an electronically filed return or other | ||||
document required to
be filed with the Department or maintained | ||||
by any taxpayer, these rules may set
forth standards that | ||||
provide for acceptance of a signature in a form other than
in | ||||
the proper handwriting of the person.
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(Source: P.A. 91-239, eff. 1-1-00.)
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Section 10. The Illinois Income Tax Act is amended by | ||
changing Sections 203, 502, 911.1, and 911.2 as follows:
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(35 ILCS 5/203) (from Ch. 120, par. 2-203)
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Sec. 203. Base income defined.
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(a) Individuals.
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(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 the | ||
taxpayer may claim a depreciation deduction for | ||
federal income tax purposes 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:
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(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
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(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
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(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;
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(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-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.
| ||
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 amendatory Act of the |
92nd General Assembly 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 an Enterprise
Zone or | ||
zones created under the Illinois Enterprise Zone Act or |
a River Edge Redevelopment Zone or zones created under | ||
the River Edge Redevelopment Zone Act, and conducts
| ||
substantially all of its operations in an Enterprise | ||
Zone or zones or 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);
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(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(2) of the Internal Revenue Code
of | ||
1954, as now or hereafter amended, and all amounts of | ||
expenses allocable
to interest and disallowed as |
deductions by Section 265(1) of the Internal
Revenue | ||
Code of 1954, as now or hereafter amended;
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; 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 of 1986;
| ||
(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;
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(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 of
1986, 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). 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); and | ||
(ii) for property on which a bonus | ||
depreciation deduction of 50% of the adjusted | ||
basis was taken, "x" equals "y" multiplied by | ||
1.0.
| ||
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 the | ||
taxpayer may claim a depreciation deduction for | ||
federal income tax purposes 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; and | ||
(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.
| ||
(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 the | ||
taxpayer may claim a depreciation deduction for | ||
federal income tax purposes 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;
| ||
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, as now
or hereafter amended, and all | ||
amounts of expenses allocable to interest and
| ||
disallowed as deductions by Section 265(a)(1) of the | ||
Internal Revenue Code,
as now or hereafter amended;
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; 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 an Enterprise Zone or | ||
zones created under
the Illinois Enterprise Zone Act or | ||
a River Edge Redevelopment Zone or zones created under | ||
the River Edge Redevelopment Zone Act and conducts | ||
substantially all of its
operations in an Enterprise | ||
Zone or zones or 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 Enterprise
Zone | ||
Investment Credit or 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
Enterprise | ||
Zone or the River Edge Redevelopment Zone. The | ||
subtraction modification available to 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
964 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. 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 of 1986;
| ||
(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); and | ||
(ii) for property on which a bonus |
depreciation deduction of 50% of the adjusted | ||
basis was taken, "x" equals "y" multiplied by | ||
1.0.
| ||
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 the | ||
taxpayer may claim a depreciation deduction for | ||
federal income tax purposes 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; and
| ||
(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)
| ||
(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,
shall mean | ||
the gross investment income for the taxable year.
| ||
(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 the | ||
taxpayer may claim a depreciation deduction for | ||
federal income tax purposes 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.
| ||
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, | ||
as now or hereafter amended, and all amounts of | ||
expenses allocable
to interest and disallowed as | ||
deductions by Section 265(1) of the Internal
Revenue | ||
Code of 1954, as now or hereafter amended;
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; 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 an
Enterprise Zone or | ||
zones created under the Illinois Enterprise Zone Act or | ||
a River Edge Redevelopment Zone or zones created under | ||
the River Edge Redevelopment Zone Act and
conducts | ||
substantially all of its operations in an Enterprise | ||
Zone or Zones or 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 of 1986;
|
(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); and | ||
(ii) for property on which a bonus | ||
depreciation deduction of 50% of the adjusted | ||
basis was taken, "x" equals "y" multiplied by | ||
1.0.
| ||
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 the | ||
taxpayer may claim a depreciation deduction for | ||
federal income tax purposes 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; and | ||
(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)
| ||
(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 the | ||
taxpayer may claim a depreciation deduction for | ||
federal income tax purposes 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.
| ||
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;
| ||
(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 , provided that the | ||
deduction under this subparagraph (I) shall not be | ||
allowed to a publicly traded partnership under Section | ||
7704 of the Internal Revenue Code for any taxable year | ||
ending on or after December 31, 2009 ;
| ||
(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(2) of the Internal Revenue Code of | ||
1954,
as now or hereafter amended, and all amounts of |
expenses allocable to
interest and disallowed as | ||
deductions by Section 265(1) of the Internal
Revenue | ||
Code, as now or hereafter amended;
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; 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 an Enterprise
Zone or | ||
zones created under the Illinois Enterprise Zone Act, | ||
enacted by
the 82nd General Assembly, or a River Edge | ||
Redevelopment Zone or zones created under the River | ||
Edge Redevelopment Zone Act and
conducts substantially | ||
all of its operations
in an Enterprise Zone or Zones or | ||
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 of 1986;
| ||
(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); and | ||
(ii) for property on which a bonus | ||
depreciation deduction of 50% of the adjusted | ||
basis was taken, "x" equals "y" multiplied by | ||
1.0.
| ||
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 the | ||
taxpayer may claim a depreciation deduction for | ||
federal income tax purposes 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; and | ||
(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.
(T)
| ||
(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;
| ||
(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. 94-776, eff. 5-19-06; 94-789, eff. 5-19-06; | ||
94-1021, eff. 7-12-06; 94-1074, eff. 12-26-06; 95-23, eff. | ||
8-3-07; 95-233, eff. 8-16-07; 95-286, eff. 8-20-07; 95-331, | ||
eff. 8-21-07; 95-707, eff. 1-11-08; 95-876, eff. 8-21-08; | ||
revised 10-15-08.)
| ||
(35 ILCS 5/502) (from Ch. 120, par. 5-502)
| ||
Sec. 502. Returns and notices.
| ||
(a) In general. A return with respect to the taxes imposed | ||
by this
Act shall be made by every person for any taxable year:
| ||
(1) for which such person is liable for a tax imposed | ||
by this Act,
or
| ||
(2) in the case of a resident or in the case of a | ||
corporation which
is qualified to do business in this | ||
State, for which such person is
required to make a federal | ||
income tax return, regardless of whether such
person is | ||
liable for a tax imposed by this Act. However, this | ||
paragraph
shall not require a resident to make a return if | ||
such person has
an
Illinois base income of the basic amount | ||
in Section 204(b) or
less and is either claimed as a | ||
dependent on
another person's tax return under the Internal |
Revenue Code of 1986, or is
claimed as a dependent on | ||
another person's tax return under this Act.
| ||
Notwithstanding the provisions of paragraph (1), a | ||
nonresident whose Illinois income tax liability under | ||
subsections (a), (b), (c), and (d) of Section 201 of this Act | ||
is paid in full after taking into account the credits allowed | ||
under subsection (f) of this Section or allowed under Section | ||
709.5 of this Act shall not be required to file a return under | ||
this subsection (a).
| ||
(b) Fiduciaries and receivers.
| ||
(1) Decedents. If an individual is deceased, any return | ||
or notice
required of such individual under this Act shall | ||
be made by his
executor, administrator, or other person | ||
charged with the property of
such decedent.
| ||
(2) Individuals under a disability. If an individual is | ||
unable
to make a return or notice required under this Act, | ||
the return or notice
required of such individual shall be | ||
made by his duly authorized agent,
guardian, fiduciary or | ||
other person charged with the care
of the person or | ||
property of such individual.
| ||
(3) Estates and trusts. Returns or notices required of | ||
an estate
or a trust shall be made by the fiduciary | ||
thereof.
| ||
(4) Receivers, trustees and assignees for | ||
corporations. In a
case where a receiver, trustee in | ||
bankruptcy, or assignee, by order of a
court of competent |
jurisdiction, by operation of law, or otherwise, has
| ||
possession of or holds title to all or substantially all | ||
the property or
business of a corporation, whether or not | ||
such property or business is
being operated, such receiver, | ||
trustee, or assignee shall make the
returns and notices | ||
required of such corporation in the same manner and
form as | ||
corporations are required to make such returns and notices.
| ||
(c) Joint returns by husband and wife.
| ||
(1) Except as provided in paragraph (3) : , | ||
(A) if a husband and wife file a
joint federal | ||
income tax return for a taxable year ending before | ||
December 31, 2009, they shall file a joint
return under | ||
this Act for such taxable year and their liabilities | ||
shall be
joint and several ; , but | ||
(B) if a husband and wife file a joint federal | ||
income tax return for a taxable year ending on or after | ||
December 31, 2009, they may elect to file separate | ||
returns under this Act for such taxable year. The | ||
election under this paragraph must be made on or before | ||
the due date (including extensions) of the return and, | ||
once made, shall be irrevocable. If no election is | ||
timely made under this paragraph for a taxable year: | ||
(i) the couple must file a joint return under | ||
this Act for such taxable year, | ||
(ii) their liabilities shall be joint and | ||
several, and |
(iii) any overpayment for that taxable year | ||
may be withheld under Section 909 of this Act or | ||
under Section 2505-275 of the Civil Administrative | ||
Code of Illinois and applied against a debt of | ||
either spouse without regard to the amount of the | ||
overpayment attributable to the other spouse; and | ||
(C) if the federal income tax liability of either | ||
spouse is
determined on a separate federal income tax | ||
return, they shall file separate
returns under this | ||
Act.
| ||
(2) If neither spouse is required to file a federal | ||
income tax
return and either or both are required to file a | ||
return under this Act,
they may elect to file separate or | ||
joint returns and pursuant to such
election their | ||
liabilities shall be separate or joint and several.
| ||
(3) If either husband or wife is a resident and the | ||
other is a
nonresident, they shall file separate returns in | ||
this State on such
forms as may be required by the | ||
Department in which event their tax
liabilities shall be | ||
separate; but if they file a joint federal income tax | ||
return for a taxable year, they may elect to determine | ||
their
joint net income and file a joint return for that | ||
taxable year under the provisions of paragraph (1) of this | ||
subsection as if both were residents and
in such case, | ||
their liabilities shall be joint and several.
| ||
(4) Innocent spouses.
|
(A) However, for tax liabilities arising and paid | ||
prior to August 13,
1999, an innocent spouse shall be | ||
relieved of
liability for tax
(including interest and | ||
penalties) for any taxable year for which a joint
| ||
return has been made, upon submission of proof that the | ||
Internal Revenue
Service has made a determination | ||
under Section 6013(e) of the Internal
Revenue Code, for | ||
the same taxable year, which determination relieved | ||
the
spouse from liability for federal income taxes.
If | ||
there is no federal income tax liability at issue for | ||
the
same taxable year, the Department shall rely on the | ||
provisions of Section
6013(e) to determine whether the | ||
person requesting innocent spouse abatement of
tax, | ||
penalty, and interest is entitled to that relief.
| ||
(B) For tax liabilities arising on and after August | ||
13, 1999 or which arose prior to that date, but remain | ||
unpaid as of that date, if
an individual
who filed a | ||
joint return for any taxable year has made an election | ||
under this
paragraph, the individual's liability for | ||
any tax shown on the joint return
shall not exceed the | ||
individual's separate return amount and the | ||
individual's
liability for any deficiency assessed for | ||
that taxable year shall not exceed
the portion of the | ||
deficiency properly allocable to the individual. For
| ||
purposes of this paragraph:
| ||
(i) An election properly made pursuant to |
Section 6015 of the Internal
Revenue Code shall | ||
constitute an election under this paragraph, | ||
provided that
the election shall not be effective | ||
until the individual has notified the
Department | ||
of the election in the form and manner prescribed | ||
by the Department.
| ||
(ii) If no election has been made under Section | ||
6015, the individual
may make an election under | ||
this paragraph in the form and manner prescribed by
| ||
the Department, provided that no election may be | ||
made if the Department finds
that assets were | ||
transferred
between individuals filing a joint | ||
return as part of a scheme by such
individuals to | ||
avoid payment of Illinois income tax and the | ||
election shall not
eliminate the individual's | ||
liability for any portion of a deficiency
| ||
attributable to an error on the return of which the | ||
individual had actual
knowledge as of the date of | ||
filing.
| ||
(iii) In determining the separate return | ||
amount or portion of any
deficiency attributable | ||
to an individual, the Department shall follow the
| ||
provisions in subsections (c) and (d) of Section | ||
6015 of the Internal Revenue Code.
| ||
(iv) In determining the validity of an | ||
individual's election under
subparagraph (ii) and |
in determining an electing individual's separate | ||
return
amount or portion of any deficiency under | ||
subparagraph (iii), any determination
made by the | ||
Secretary of the Treasury, by the United States Tax | ||
Court on
petition for review of a determination by | ||
the Secretary of the Treasury, or on
appeal from | ||
the United States Tax Court under Section 6015 of
| ||
the Internal
Revenue Code regarding criteria for | ||
eligibility or under subsection (d) of
Section | ||
6015
of the Internal Revenue Code regarding the | ||
allocation of any item of income,
deduction, | ||
payment, or credit between an individual making | ||
the federal election
and that individual's spouse | ||
shall be conclusively presumed to be correct.
With | ||
respect to any item that is not the subject of a | ||
determination by the
Secretary of the Treasury or | ||
the federal courts, in any proceeding
involving | ||
this subsection, the
individual making the | ||
election shall have the burden of proof with | ||
respect to
any item except that the Department | ||
shall have the burden of proof with respect
to | ||
items in subdivision (ii).
| ||
(v) Any election made by an individual under | ||
this subsection shall
apply to all years for which | ||
that individual and the spouse named in the
| ||
election have filed a joint return.
|
(vi) After receiving a notice that the federal | ||
election has been made
or after receiving an | ||
election under subdivision (ii), the Department | ||
shall
take no collection action against the | ||
electing individual for any liability
arising from | ||
a joint return covered by the election until the | ||
Department has
notified the electing individual in | ||
writing that the election is invalid or of
the | ||
portion of the liability the Department has | ||
allocated to the electing
individual. Within 60 | ||
days (150 days if the individual is outside the | ||
United
States) after the issuance of such | ||
notification, the individual may file a
written | ||
protest of the denial of the election or of the | ||
Department's
determination of the liability | ||
allocated to him or her and shall be granted a
| ||
hearing within the Department under the provisions | ||
of Section 908. If a
protest is filed, the | ||
Department shall take no collection action against | ||
the
electing individual until the decision | ||
regarding the protest has become final
under | ||
subsection (d) of Section 908 or, if | ||
administrative review of the
Department's decision
| ||
is requested under Section 1201, until the | ||
decision of the court becomes
final.
| ||
(d) Partnerships. Every partnership having any base income
|
allocable to this State in accordance with section 305(c) shall | ||
retain
information concerning all items of income, gain, loss | ||
and
deduction; the names and addresses of all of the partners, | ||
or names and
addresses of members of a limited liability | ||
company, or other
persons who would be entitled to share in the | ||
base income of the
partnership if distributed; the amount of | ||
the distributive share of
each; and such other pertinent | ||
information as the Department may by
forms or regulations | ||
prescribe. The partnership shall make that information
| ||
available to the Department when requested by the Department.
| ||
(e) For taxable years ending on or after December 31, 1985, | ||
and before
December 31, 1993, taxpayers
that are corporations | ||
(other than Subchapter S corporations) having the
same taxable | ||
year and that are members of the same unitary business group
| ||
may elect to be treated as one taxpayer for purposes of any | ||
original return,
amended return which includes the same | ||
taxpayers of the unitary group which
joined in the election to | ||
file the original return, extension, claim for
refund, | ||
assessment, collection and payment and determination of the
| ||
group's tax liability under this Act. This subsection (e) does | ||
not permit the
election to be made for some, but not all, of | ||
the purposes enumerated above.
For taxable years ending on or | ||
after December 31, 1987, corporate members
(other than | ||
Subchapter S corporations) of the same unitary business group
| ||
making this subsection (e) election are not required to have | ||
the same taxable
year.
|
For taxable years ending on or after December 31, 1993, | ||
taxpayers that are
corporations (other than Subchapter S | ||
corporations) and that are members of
the same unitary business | ||
group shall be treated as one taxpayer for purposes
of any | ||
original return, amended return which includes the same | ||
taxpayers of the
unitary group which joined in filing the | ||
original return, extension, claim for
refund, assessment, | ||
collection and payment and determination of the group's tax
| ||
liability under this Act.
| ||
(f) The Department may promulgate regulations to permit | ||
nonresident
individual partners of the same partnership, | ||
nonresident Subchapter S
corporation shareholders of the same | ||
Subchapter S corporation, and
nonresident individuals | ||
transacting an insurance business in Illinois under
a Lloyds | ||
plan of operation, and nonresident individual members of the | ||
same
limited liability company that is treated as a partnership | ||
under Section 1501
(a)(16) of this Act, to file composite | ||
individual income tax returns
reflecting the composite income | ||
of such individuals allocable to Illinois
and to make composite | ||
individual income tax payments. The Department may
by | ||
regulation also permit such composite returns to include the | ||
income tax
owed by Illinois residents attributable to their | ||
income from partnerships,
Subchapter S corporations, insurance | ||
businesses organized under a Lloyds
plan of operation, or | ||
limited liability companies that are treated as
partnership | ||
under Section 1501(a)(16) of this Act, in which case such
|
Illinois residents will be permitted to claim credits on their | ||
individual
returns for their shares of the composite tax | ||
payments. This paragraph of
subsection (f) applies to taxable | ||
years ending on or after December 31, 1987.
| ||
For taxable years ending on or after December 31, 1999, the | ||
Department may,
by regulation, also permit any persons | ||
transacting an insurance business
organized under a Lloyds plan | ||
of operation to file composite returns reflecting
the income of | ||
such persons allocable to Illinois and the tax rates applicable
| ||
to such persons under Section 201 and to make composite tax | ||
payments and shall,
by regulation, also provide that the income | ||
and apportionment factors
attributable to the transaction of an | ||
insurance business organized under a
Lloyds plan of operation | ||
by any person joining in the filing of a composite
return | ||
shall, for purposes of allocating and apportioning income under | ||
Article
3 of this Act and computing net income under Section | ||
202 of this Act, be
excluded from any other income and | ||
apportionment factors of that person or of
any unitary business | ||
group, as defined in subdivision (a)(27) of Section 1501,
to | ||
which that person may belong.
| ||
For taxable years ending on or after December 31, 2008, | ||
every nonresident shall be allowed a credit against his or her | ||
liability under subsections (a) and (b) of Section 201 for any | ||
amount of tax reported on a composite return and paid on his or | ||
her behalf under this subsection (f). Residents (other than | ||
persons transacting an insurance business organized under a |
Lloyds plan of operation) may claim a credit for taxes reported | ||
on a composite return and paid on their behalf under this | ||
subsection (f) only as permitted by the Department by rule.
| ||
(f-5) For taxable years ending on or after December 31, | ||
2008, the Department may adopt rules to provide that, when a | ||
partnership or Subchapter S corporation has made an error in | ||
determining the amount of any item of income, deduction, | ||
addition, subtraction, or credit required to be reported on its | ||
return that affects the liability imposed under this Act on a | ||
partner or shareholder, the partnership or Subchapter S | ||
corporation may report the changes in liabilities of its | ||
partners or shareholders and claim a refund of the resulting | ||
overpayments, or pay the resulting underpayments, on behalf of | ||
its partners and shareholders.
| ||
(g) The Department may adopt rules to authorize the | ||
electronic filing of
any return required to be filed under this | ||
Section.
| ||
(Source: P.A. 94-1074, eff. 12-26-06; 95-233, eff. 8-16-07.)
| ||
(35 ILCS 5/911.1) (from Ch. 120, par. 9-911.1)
| ||
Sec. 911.1. If the Department withholds any refund due | ||
under this Act
because of any other liability to the State and | ||
if the return for which
such refund is due is a joint return | ||
for a taxable year ending before December 31, 2009 , the | ||
taxpayer who jointly filed such
return and who is not liable to | ||
the State shall be entitled to that portion
of the refund |
attributable to himself or herself.
| ||
(Source: P.A. 85-473.)
| ||
(35 ILCS 5/911.2)
| ||
Sec. 911.2. Refunds withheld; tax claims of other states.
| ||
(a) Definitions. In this Section the following terms have | ||
the meanings
indicated.
| ||
"Claimant state" means any state or the District of | ||
Columbia that requests
the withholding of a refund pursuant to | ||
this Section and that extends a like
comity for the collection | ||
of taxes owed to this State.
| ||
"Income tax" means any amount of income tax imposed on | ||
taxpayers under the
laws of the State of Illinois or the | ||
claimant state, including additions to tax
for penalties and | ||
interest.
| ||
"Refund" means a refund of overpaid income taxes imposed by | ||
the State of
Illinois or the claimant state.
| ||
"Tax officer" means a unit or official of the claimant | ||
state, or the duly
authorized agent of that unit or official, | ||
charged with the imposition,
assessment, or collection of state | ||
income taxes.
| ||
"Taxpayer" means any individual person identified by a | ||
claimant state under
this Section
as owing taxes to that | ||
claimant state, and in the case of a refund arising from
the | ||
filing of a joint return, the taxpayer's spouse.
| ||
(b) In general. Except as provided in subsection (c) of |
this Section, a tax
officer may:
| ||
(1) certify to the Director the existence of a | ||
taxpayer's delinquent
income tax liability; and
| ||
(2) request the Director to withhold any refund to | ||
which the taxpayer is
entitled.
| ||
(c) Comity. A tax officer may not certify or request the | ||
Director to
withhold a refund unless the laws of the claimant | ||
state:
| ||
(1) allow the Director to certify an income tax | ||
liability;
| ||
(2) allow the Director to request the tax officer to | ||
withhold the
taxpayer's tax refund; and
| ||
(3) provide for the payment of the refund to the State | ||
of Illinois.
| ||
(d) Certification. A certification by a tax officer to the | ||
Director shall
include:
| ||
(1) the full name and address of the taxpayer and any | ||
other names known to
be used by the taxpayer;
| ||
(2) the social security number or federal tax | ||
identification number of the
taxpayer;
| ||
(3) the amount of the income tax liability; and
| ||
(4) a statement that all administrative and judicial | ||
remedies and appeals
have been exhausted or have lapsed and | ||
that the assessment of tax, interest,
and penalty has | ||
become final.
| ||
(e) Notification. As to any taxpayer due a refund, the |
Director shall:
| ||
(1) notify the taxpayer that a claimant state has | ||
provided certification
of the existence of an income tax | ||
liability;
| ||
(2) inform the taxpayer of the tax liability certified, | ||
including a
detailed statement for each taxable year | ||
showing tax, interest, and penalty;
| ||
(3) inform the taxpayer that failure to file a protest | ||
in accordance with
subsection (f) of this Section shall | ||
constitute a waiver of any demand against
this State for | ||
the amount certified;
| ||
(3.5) inform the taxpayer that the refund has been | ||
withheld and that the
tax liability has been paid to the | ||
claimant state as provided in subsection (i)
of this | ||
Section;
| ||
(4) provide the taxpayer with notice of an opportunity | ||
to request a
hearing to challenge the certification; and
| ||
(5) inform the taxpayer that the hearing may be | ||
requested (i) pursuant to
Section 910 of this Act, or (ii) | ||
with the tax officer, in accordance with the
laws of the | ||
claimant state.
| ||
(f) Protest of withholding. A taxpayer may protest the | ||
withholding of a
refund pursuant to Section 910 of this Act | ||
(except that the protest shall be
filed within 30 days after | ||
the date of the Director's notice of certification
pursuant to | ||
subsection (e) of this Section).
|
(g) Certification as prima facie evidence. If the taxpayer | ||
requests a
hearing pursuant to Section 910 of this Act, the | ||
certification of the tax
officer shall be prima facie evidence | ||
of the correctness of the taxpayer's
delinquent income tax | ||
liability to the certifying state.
| ||
(h) Rights of spouses to refunds from joint returns. If a | ||
certification is
based upon the tax debt of only one taxpayer | ||
and if the refund is based upon a
joint personal income tax | ||
return for a taxable year ending before December 31, 2009 , the | ||
nondebtor spouse shall have the right to:
| ||
(1) notification, as provided in subsection (e) of this | ||
Section;
| ||
(2) protest, as to the withholding of such spouse's | ||
share of the refund,
as provided in subsection (f) of this | ||
Section; and
| ||
(3) payment of his or her share of the refund, provided | ||
the amount of the
overpayment refunded to the spouse shall | ||
not exceed the amount of the joint
overpayment.
| ||
(i) Withholding and payment of refund. Upon receipt of a | ||
request for withholding in accordance
with subsection (b) of | ||
this Section, the Director shall:
| ||
(1) withhold any refund that is certified by the tax | ||
officer;
| ||
(2) pay to the claimant state the entire refund or the | ||
amount certified,
whichever is less;
| ||
(3) pay any refund in excess of the amount certified to |
the taxpayer; and
| ||
(4) if a refund is less than the amount certified, | ||
withhold amounts from
subsequent refunds due the taxpayer, | ||
if the laws of the claimant state provide
that the claimant | ||
state shall withhold subsequent refunds of taxpayers
| ||
certified to that state by the Director.
| ||
(j) Determination that withholding cannot be made. After | ||
receiving a
certification from a tax officer, the Director | ||
shall notify the claimant state
if the Director determines that | ||
a withholding cannot be made.
| ||
(k) Director's authority. The Director shall have the | ||
authority to enter
into agreements with the tax officers of | ||
claimant state relating to:
| ||
(1) procedures and methods to be employed by a claimant | ||
state with
respect to the operation of this Section;
| ||
(2) safeguards against the disclosure or inappropriate | ||
use of any
information obtained or maintained pursuant to | ||
this Section that identifies,
directly or indirectly, a | ||
particular taxpayer;
| ||
(3) a minimum tax debt, amounts below which, in light | ||
of administrative
expenses and efficiency, shall, in the | ||
Director's discretion, not be subject to
the withholding | ||
procedures set forth in this Section.
| ||
(l) Remedy not exclusive. The collection procedures | ||
prescribed by this
Section are in addition to, and not in | ||
substitution for, any other remedy
available by law.
|
(Source: P.A. 92-492, eff. 1-1-02; 92-826, eff. 8-21-02.)
| ||
Section 15. The Use Tax Act is amended by changing Section | ||
10 as follows:
| ||
(35 ILCS 105/10) (from Ch. 120, par. 439.10)
| ||
Sec. 10. Except as to motor vehicles, aircraft, watercraft, | ||
and
trailers, and except as to cigarettes as defined in the | ||
Cigarette Use Tax, when tangible personal
property is
purchased | ||
from a retailer for use in this State by a purchaser
who did | ||
not pay the tax imposed by this Act to the retailer, and who | ||
does not
file returns with the Department as a retailer under | ||
Section 9 of this
Act, such purchaser (by the last day of the | ||
month following the calendar
month in which such purchaser | ||
makes any payment upon the selling price of
such property) | ||
shall, except as provided in this Section, file
a return with | ||
the Department and pay the tax upon that portion of the
selling | ||
price so paid by the purchaser during the preceding calendar | ||
month.
When tangible personal property, including but not | ||
limited to motor vehicles
and aircraft, is purchased by a | ||
lessor, under a lease for
one year or longer, executed or in | ||
effect at the time of purchase to an
interstate carrier for | ||
hire, who did not pay the tax imposed by this Act to the
| ||
retailer, such lessor (by the last day of the month following | ||
the calendar
month in which such property reverts to the use of | ||
such lessor) shall file
a return with the Department and pay |
the tax upon the fair market value of
such property on the date | ||
of such reversion.
However, in determining the fair market | ||
value at the time of reversion, the
fair market value of such | ||
property shall not exceed the original purchase price
of the | ||
property that was paid by the lessor at the time of purchase.
| ||
Such return shall be filed on
a form prescribed by the | ||
Department and shall contain such information as
the Department | ||
may reasonably require. Such return and payment from the
| ||
purchaser shall be submitted to the Department sooner than the | ||
last day of
the month after the month in which the purchase is | ||
made to the extent that
that may be necessary in order to | ||
secure the title to a motor vehicle or
the certificate of | ||
registration for an aircraft. However, except as to motor
| ||
vehicles and aircraft, and except as to cigarettes as defined | ||
in the Cigarette Use Tax Act, if the
purchaser's annual use tax | ||
liability does not exceed $600, the purchaser
may file the | ||
return on an annual basis on or before April 15th of the year
| ||
following the year use tax liability was incurred.
| ||
If cigarettes, as defined in the Cigarette Use Tax Act, are | ||
purchased from a retailer for use in this State by a purchaser | ||
who did not pay the tax imposed by this Act to the retailer, | ||
and who does not file returns with the Department as a retailer | ||
under Section 9 of this Act, such purchaser must, within 30 | ||
days after acquiring the cigarettes, file a return with the | ||
Department and pay the tax upon that portion of the selling | ||
price so paid by the purchaser for the cigarettes. |
In addition with respect to motor vehicles,
aircraft, | ||
watercraft, and trailers, a purchaser of such tangible personal
| ||
property for use in this
State, who purchases such tangible | ||
personal property from an out-of-state
retailer, shall file | ||
with the Department, upon a form to be prescribed and
supplied | ||
by the Department, a return for each such item of tangible
| ||
personal property purchased, except that if, in the same | ||
transaction, (i) a
purchaser of motor vehicles,
aircraft, | ||
watercraft, or trailers who is a retailer of motor vehicles,
| ||
aircraft, watercraft, or trailers purchases more than one motor | ||
vehicle,
aircraft, watercraft, or trailer for the purpose of | ||
resale or (ii) a purchaser
of motor vehicles, aircraft, | ||
watercraft, or trailers purchases more
than one motor vehicle, | ||
aircraft, watercraft, or trailer for use as qualifying
rolling | ||
stock as provided in Section 3-55 of this Act, then the | ||
purchaser may
report the purchase of all motor vehicles, | ||
aircraft, watercraft, or trailers
involved in that transaction | ||
to the Department on a single return prescribed by
the | ||
Department. Such return in the case of motor vehicles and
| ||
aircraft must show the name and address of the seller, the | ||
name, address of
purchaser, the amount of the selling price | ||
including the amount allowed by
the retailer for traded in | ||
property, if any; the amount allowed by the
retailer for the | ||
traded-in tangible personal property, if any, to the
extent to | ||
which Section 2 of this Act allows an exemption for the value | ||
of
traded-in property; the balance payable after deducting such |
trade-in
allowance from the total selling price; the amount of | ||
tax due from the
purchaser with respect to such transaction; | ||
the amount of tax collected
from the purchaser by the retailer | ||
on such transaction (or satisfactory
evidence that such tax is | ||
not due in that particular instance if that is
claimed to be | ||
the fact); the place and date of the sale, a sufficient
| ||
identification of the property sold, and such other information | ||
as the
Department may reasonably require.
| ||
Such return shall be filed not later than 30 days after | ||
such motor
vehicle or aircraft is brought into this State for | ||
use.
| ||
For purposes of this Section, "watercraft" means a Class 2, | ||
Class 3, or
Class 4 watercraft as defined in Section 3-2 of the | ||
Boat Registration and
Safety Act, a personal watercraft, or any | ||
boat equipped with an inboard
motor.
| ||
The return and tax remittance or proof of exemption from | ||
the tax that is
imposed by this Act may be transmitted to the | ||
Department by way of the
State agency with which, or State | ||
officer with whom, the tangible personal
property must be | ||
titled or registered (if titling or registration is
required) | ||
if the Department and such agency or State officer determine | ||
that
this procedure will expedite the processing of | ||
applications for title or
registration.
| ||
With each such return, the purchaser shall remit the proper | ||
amount of tax
due (or shall submit satisfactory evidence that | ||
the sale is not taxable if
that is the case), to the Department |
or its agents, whereupon the
Department shall issue, in the | ||
purchaser's name, a tax receipt (or a
certificate of exemption | ||
if the Department is satisfied that the particular
sale is tax | ||
exempt) which such purchaser may submit to the agency with
| ||
which, or State officer with whom, he must title or register | ||
the tangible
personal property that is involved (if titling or | ||
registration is required)
in support of such purchaser's | ||
application for an Illinois certificate or
other evidence of | ||
title or registration to such tangible personal property.
| ||
When a purchaser pays a tax imposed by this Act directly to | ||
the Department,
the Department (upon request therefor from such | ||
purchaser) shall issue an
appropriate receipt to such purchaser | ||
showing that he has paid such tax to
the Department. Such | ||
receipt shall be sufficient to relieve the purchaser
from | ||
further liability for the tax to which such receipt may refer.
| ||
A user who is liable to pay use tax directly to the | ||
Department only
occasionally and not on a frequently recurring | ||
basis, and who is not
required to file returns with the | ||
Department as a retailer under Section 9
of this Act, or under | ||
the "Retailers' Occupation Tax Act", or as a
registrant with | ||
the Department under the "Service Occupation Tax Act" or
the | ||
"Service Use Tax Act", need not register with the Department.
| ||
However, if such a user has a frequently recurring direct use | ||
tax liability
to pay to the Department, such user shall be | ||
required to register with the
Department on forms prescribed by | ||
the Department and to obtain and display
a certificate of |
registration from the Department. In that event, all of
the | ||
provisions of Section 9 of this Act concerning the filing of | ||
regular
monthly, quarterly or annual tax returns and all of the | ||
provisions of
Section 2a of the "Retailers' Occupation Tax Act" | ||
concerning the
requirements for registrants to post bond or | ||
other security with the
Department, as the provisions of such | ||
sections now exist or may hereafter
be amended, shall apply to | ||
such users to the same extent as if such
provisions were | ||
included herein.
| ||
(Source: P.A. 91-541, eff. 8-13-99; 91-901, eff. 1-1-01.)
| ||
Section 20. The Environmental Protection Act is amended by | ||
changing Sections 55.8 and 55.10 as follows:
| ||
(415 ILCS 5/55.8) (from Ch. 111 1/2, par. 1055.8)
| ||
Sec. 55.8. Tire retailers.
| ||
(a) Any person selling new or used tires at
retail or | ||
offering new or used tires for retail sale in this State shall:
| ||
(1) beginning on June 20, 2003 (the effective date of | ||
Public Act
93-32), collect from retail customers a fee of | ||
$2 per new or used
tire sold and delivered in this State, | ||
to be paid to the Department of
Revenue and deposited into | ||
the Used Tire Management Fund, less a collection
allowance | ||
of 10 cents per tire to be retained by the retail seller | ||
and a
collection allowance of 10 cents per tire to be | ||
retained by the Department of
Revenue and paid into the |
General Revenue Fund ; the collection allowance for retail | ||
sellers, however, shall be allowed only if the return is | ||
filed timely and only for the amount that is paid timely in | ||
accordance with this Title XIV ;
| ||
(1.5) beginning on July 1, 2003, collect from retail | ||
customers an
additional 50 cents per new or used tire sold | ||
and delivered in this State;
the money collected from this | ||
fee shall be deposited into the Emergency Public
Health | ||
Fund;
| ||
(2) accept for recycling used tires from customers, at | ||
the point of
transfer, in a quantity equal to the number of | ||
new tires purchased; and
| ||
(3) post in a conspicuous place a written notice at | ||
least 8.5 by 11
inches in size that includes the universal | ||
recycling symbol and the
following statements: "DO NOT put | ||
used tires in the trash.";
"Recycle your used tires."; and | ||
"State law requires us to accept used tires
for recycling, | ||
in exchange for new tires purchased.".
| ||
(b) A person who accepts used tires for recycling under | ||
subsection (a)
shall not allow the tires to accumulate for | ||
periods of more than 90 days.
| ||
(c) The requirements of subsection (a) of this Section do | ||
not apply
to mail order sales nor shall the retail sale of a | ||
motor vehicle be considered
to be the sale of tires at retail | ||
or offering of tires for retail sale.
Instead of filing | ||
returns, retailers of tires may remit the tire user fee of
|
$1.00 per tire to their suppliers of tires if the supplier of | ||
tires is a
registered retailer of tires and agrees or otherwise | ||
arranges to collect
and remit the tire fee to the Department of | ||
Revenue, notwithstanding the fact
that the sale of the tire is | ||
a sale for resale and not a sale at retail. A
tire supplier who | ||
enters into such an arrangement with a tire retailer shall
be | ||
liable for the tax on all tires sold to the tire retailer and | ||
must (i)
provide the tire retailer with a receipt that | ||
separately reflects the tire
tax collected from the retailer on | ||
each transaction and (ii) accept used tires
for recycling from | ||
the retailer's customers. The tire supplier shall be
entitled | ||
to the collection allowance of 10 cents per tire.
| ||
The retailer of the tires must maintain in its books and | ||
records evidence
that the appropriate fee was paid to the tire | ||
supplier and that the tire
supplier has agreed to remit the fee | ||
to the Department of Revenue for each tire
sold by the | ||
retailer. Otherwise, the tire retailer shall be directly liable
| ||
for the fee on all tires sold at retail. Tire retailers paying | ||
the fee to
their suppliers are not entitled to the collection | ||
allowance of 10 cents per
tire.
| ||
(d) The requirements of subsection (a) of this Section | ||
shall apply
exclusively to tires to be used for vehicles | ||
defined in Section 1-217 of
the Illinois Vehicle Code, aircraft | ||
tires, special mobile equipment, and
implements of husbandry.
| ||
(e) The requirements of paragraph (1) of subsection (a) do | ||
not
apply to the sale of reprocessed tires. For purposes of |
this Section,
"reprocessed tire" means a used tire that has | ||
been recapped, retreaded,
or regrooved and that has not been | ||
placed on a vehicle wheel rim.
| ||
(Source: P.A. 95-49, eff. 8-10-07; 95-331, eff. 8-21-07; | ||
95-876, eff. 8-21-08.)
| ||
(415 ILCS 5/55.10) (from Ch. 111 1/2, par. 1055.10)
| ||
Sec. 55.10. Tax returns by retailer. | ||
(a) Except as otherwise provided in this Section, for | ||
returns due on or before January 31, 2010, each Each retailer | ||
of tires
maintaining a place of business in this State
shall | ||
make a return to the Department of Revenue on a quarter annual | ||
basis,
with the return for January, February and March of a | ||
given year being due
by April 30 of that year; with the return | ||
for April, May and June of a
given year being due by July 31 of | ||
that year; with the return for July, August
and September of a | ||
given year being due by October 31 of that year; and
with the | ||
return for October, November and December of a given year being | ||
due
by January 31 of the following year.
| ||
For returns due after January 31, 2010, each retailer of | ||
tires maintaining a place of business in this State shall make | ||
a return to the Department of Revenue on a quarter annual | ||
basis, with the return for January, February, and March of a | ||
given year being due by April 20 of that year; with the return | ||
for April, May, and June of a given year being due by July 20 of | ||
that year; with the return for July, August, and September of a |
given year being due by October 20 of that year; and with the | ||
return for October, November, and December of a given year | ||
being due by January 20 of the following year. | ||
Notwithstanding any other provision of this Section to the | ||
contrary, the return for October, November, and December of | ||
2009 is due by February 20, 2010. | ||
(b) Each return made to the Department of Revenue shall | ||
state:
| ||
(1) the name of the retailer;
| ||
(2) the address of the retailer's principal place of | ||
business, and the
address of the principal place of | ||
business (if that is a different address)
from which the | ||
retailer engages in the business of making retail sales of
| ||
tires;
| ||
(3) total number of tires sold at retail for the | ||
preceding calendar
quarter;
| ||
(4) the amount of tax due; and
| ||
(5) such other reasonable information as the | ||
Department of Revenue
may require.
| ||
Notwithstanding any other provision of this Act concerning | ||
the time
within which a retailer may file his return, in the | ||
case of any retailer
who ceases to engage in the retail sale of | ||
tires, the retailer shall file
a final return under this Act | ||
with the Department of Revenue not more than
one month after | ||
discontinuing that business.
| ||
(Source: P.A. 87-727.)
|
Section 99. Effective date. This Act takes effect upon | ||
becoming law.
|