Sen. Toi W. Hutchinson

Filed: 5/22/2017

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 9

2    AMENDMENT NO. ______. Amend Senate Bill 9 immediately above
3the enacting clause, by inserting the following:
4    "WHEREAS, the changes made by this Act are made under
5subsection (a) of Section 3 of Article IX of the Illinois
6Constitution. If there are future changes made to subsection
7(a) of Section 3 of Article IX of the Illinois Constitution,
8then it may result in evaluating the taxes on income imposed by
9this Act; therefore"; and
 
10by replacing everything after the enacting clause with the
11following:
 
12
"ARTICLE 5. BUDGET ECONOMIC STABILIZATION FUND ACT

 
13    Section 5-1. Short title. This Act may be cited as the
14Budget Economic Stabilization Fund Act.
 

 

 

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1    Section 5-5. Legislative intent.
2    The General Assembly finds that, in order to restore
3Illinois' fiscal health, retaining a share of above-trend State
4revenues for future needs and for reducing the need for new
5taxes or increasing any rate of tax or otherwise modifying the
6tax structure, including the elimination or modification of
7deductions, exclusions, or exemptions, is a priority.
 
8    Section 5-10. Definitions. As used in this Act:
9    "Above-trend revenues" means general funds revenue
10collections that exceed 2.4% of the prior fiscal year's general
11funds revenue collections.
12    "General funds" means the General Revenue Fund, the Common
13School Fund, the Education Assistance Fund, and the General
14Revenue Common School Special Account Fund.
15    "General funds revenue collections" means, for each fiscal
16year, all gross personal and corporate income taxes, other
17taxes, fees, and other revenues expected to be deposited into
18the State's general funds and recurring transfers into general
19funds from the State Lottery and gaming, but does not include
20other transfers and federal funds.
21    "Unpaid bills" means: pending vouchers approved for
22payment but not paid as of December 31st for each fiscal year
23by the Office of the Comptroller; pending transfers required by
24State statute that have been recorded but have not been paid
25from the General Revenue Fund, Common School Fund, or Education

 

 

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1Assistance Fund; and all vouchers for invoices that have been
2certified as a proper bill, as defined by the State Prompt
3Payment Act, by the Departments of Healthcare and Family
4Services, Central Management Services, Human Services,
5Revenue, and Aging but not yet approved by the Comptroller as
6of December 31st of each fiscal year from the General Revenue
7Fund, Common School Fund, Education Assistance Fund, Health
8Insurance Fund, Income Tax Refund Fund, and Healthcare Provider
9Relief Fund.
 
10    Section 5-15. Certification of the backlog of bills. The
11amount of unpaid bills shall be reported by the Comptroller and
12the Departments of Healthcare and Family Services, Central
13Management Services, Human Services, Revenue, and Aging to the
14Governor's Office of Management and Budget no later than
15January 10th of each year. By January 15th of each year, the
16Governor's Office of Management and Budget shall notify the
17Comptroller, Treasurer, the Speaker and Minority Leader of the
18House, and the President and Minority Leader of the Senate of
19the total amount of unpaid bills as of the preceding December
2031st.
 
21    Section 5-20. Payment of unpaid bills. If unpaid bills
22total more than $1,000,000,000, the Governor shall include in
23his or her budget for the next fiscal year an amount to pay
24unpaid bills equal to the lesser of (i) 50% of above-trend

 

 

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1revenues that the Governor projects to be received by the State
2in the next fiscal year or (ii) the amount of above-trend
3revenues needed to reduce the unpaid bills to $1,000,000,000.
4This amount to pay off unpaid bills shall be included in the
5Governor's budget as an appropriation to the Bill Backlog
6Payment Fund from the General Revenue Fund. Nothing in this Act
7prohibits the Governor from including in his or her budget, or
8the General Assembly from appropriating, additional moneys for
9the payment of unpaid bills. If for any reason the
10appropriations enacted are insufficient to meet the payment of
11unpaid bills required to be included in the Governor's budget
12under this Section, then there is hereby appropriated, on a
13continuing annual basis in each fiscal year, from the General
14Revenue Fund, the amounts necessary for this payment.
 
15    Section 5-25. Transfers into the Budget Economic
16Stabilization Fund.
17    (a) If unpaid bills total less than $1,000,000,000 the
18Governor shall include in his or her budget for the next fiscal
19year at least 50% of any above-trend revenues that the Governor
20projects to be received in the next fiscal year for deposit to
21the Budget Economic Stabilization Fund as an appropriation from
22the General Revenue Fund. Except as provided in subsection (b)
23of this Section, if for any reason the appropriations enacted
24are insufficient to make the deposit required by this Section,
25then this Section shall constitute a continuing appropriation

 

 

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1from the General Revenue Fund of all amounts necessary for this
2deposit.
3    (b) If the balance of the Budget Economic Stabilization
4Fund at the beginning of the next fiscal year is projected by
5the Governor to exceed 5% of the general funds revenue
6collections estimated for the next fiscal year, transfers into
7the Budget Economic Stabilization Fund are not required for
8that fiscal year.
 
9    Section 5-30. Withdrawal from Budget Economic
10Stabilization Fund.
11    (a) Upon the direction of the Governor at any time within a
12fiscal year and within the limitations set forth in this
13Section, the Comptroller and the Treasurer shall transfer the
14amounts designated by the Governor from the Budget Economic
15Stabilization Fund to general funds as specified by the
16Governor. The transfer shall be made as soon as practicable on
17or after the 30th day after the Governor has provided written
18notice of his or her direction to transfer to the Clerk of the
19House of Representatives, the Secretary of the Senate, and the
20Index Department of the Office of the Secretary of State, with
21copies of the notice provided to the Comptroller and Treasurer.
22The notice shall be published on the website of the Governor's
23Office of Management and Budget. The amount directed to be
24transferred may not exceed the limits set forth in subsection
25(c) of this Section. The Governor may direct a transfer from

 

 

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1the Budget Economic Stabilization Fund to any of the general
2funds only if: he or she estimates that general funds revenue
3collections for the current fiscal year will be less than the
4general funds revenue collections as estimated at the time of
5enactment of appropriations for the current fiscal year; the
6transfer is necessary to provide for the health, safety, and
7welfare of the people of the State of Illinois; and the funds
8transferred are to be spent within previously enacted
9appropriations.
10    (b) In addition to transfers directed by the Governor
11within a fiscal year, transfers or appropriations from the
12Budget Economic Stabilization Fund for the current or next
13fiscal year may be made by vote of the General Assembly if:
14        (1) the General Assembly projects that general funds
15    revenue collections for the current or next fiscal year are
16    less than the general funds revenue collections as
17    estimated at the time of enactment of appropriations for
18    the current fiscal year for the preceding year;
19        (2) the General Assembly finds that general funds
20    revenue collections have remained stagnant or dropped
21    during 2 consecutive fiscal quarters within the preceding
22    12 months as compared to the corresponding 2 fiscal
23    quarters of the prior fiscal year; or
24        (3) that the State Coincident Index for the State of
25    Illinois has remained stagnant or dropped over 2
26    consecutive quarters within the preceding 12 months, as

 

 

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1    published in the Federal Reserve Bank of Philadelphia's
2    publication entitled "State Coincident Indexes" or its
3    successor publication.
4    (c) Transfers or appropriations from the Budget Economic
5Stabilization Fund may not, during any fiscal year, exceed the
6lesser of:
7        (1) 50% of the Budget Economic Stabilization Fund's
8    balance;
9        (2) in the case of appropriation enacted by the General
10    Assembly, 50% of the difference between (i) general funds
11    revenue collections, as projected by the Commission on
12    Government Forecasting and Accountability to be received
13    in the next fiscal year, and (ii) a revised general fund
14    revenue collections projection for the current fiscal year
15    presented to the General Assembly by the Commission on
16    Government Forecasting and Accountability; or
17        (3) in the case of transfers to be directed by the
18    Governor within a fiscal year, 50% of the difference
19    between (i) general funds revenue collections, to be
20    received in the next fiscal year as projected by the
21    Governor, and (ii) a revised general fund revenue
22    collections projection for the current fiscal year as
23    projected by the Governor.
 
24    Section 5-35. Fund creation.
25    (a) There is created the Budget Economic Stabilization Fund

 

 

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1as a special fund in the State Treasury consisting of moneys
2appropriated or transferred to that Fund as provided in Section
35-30 of this Act and as otherwise provided by law. All earnings
4on Budget Economic Stabilization Fund investments shall be
5deposited into that Fund.
6    (b) There is created the Bill Backlog Payment Fund as a
7special fund in the State Treasury consisting of moneys
8appropriated or transferred to that Fund as provided in Section -
925 of this Act and as otherwise provided by law. All earnings
10on Bill Backlog Payment Fund investments shall be deposited
11into that Fund.
 
12
ARTICLE 10. VIDEO SERVICE TAX MODERNIZATION

 
13    Section 10-1. Short title. This Act may be cited as the
14Video Service Tax Modernization Act.
 
15    Section 10-5. Application. This Act applies to the
16provision of direct-to-home satellite service, direct
17broadcast satellite service, and digital audio-visual works on
18or after the effective date of this Act.
19    This Act does not apply to: (1) satellite radio service or
20subscription radio service whereby a digital radio signal is
21broadcast without any corresponding or related video
22programming or services; or (2) a satellite television
23transmission of simulcast horse races broadcast from or

 

 

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1received at locations operated by an organization licensee, an
2inter-track wagering licensee, or an inter-track wagering
3location licensee licensed under the Illinois Horse Racing Act
4of 1975.
 
5    Section 10-10. Definitions. As used in this Act:
6    "Department" means the Department of Revenue.
7    "Digital audio-visual works" means a series of related
8images that, when shown in succession, impart an impression of
9motion, together with accompanying sounds, if any, sold to an
10end user with rights of less than permanent use. "Digital
11audio-visual works" does not include cable service provided by
12a cable operator, as those terms are defined in 47 U.S.C. 522,
13and does not include video service provided by a holder, as
14those terms are defined in Article 21 of the Public Utilities
15Act.
16    "Direct broadcast satellite service" means video services
17transmitted or broadcast by satellite directly to the
18subscriber's premises with the use of or accompanied by ground
19receiving or distribution equipment, including, but not
20limited to, infrastructure to provide Internet access used in
21the transmission or broadcast of such video services, at the
22subscriber's premises, but not in the uplink process to the
23satellite, and includes, but is not limited to, the
24retransmission of local broadcast television, the provision of
25premium channels, other recurring monthly services, service

 

 

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1and pay-per-view, video-on-demand, and other event-based
2services.
3    "Direct-to-home satellite service" has the meaning given
4to that term in Public Law No. 104-104, Title VI, Section
5602(a), February 8, 1996, 110 Stat. 144 (reprinted at 47 U.S.C.
6152).
7    "End user" means any person other than a person who
8receives by contract a product transferred electronically for
9further commercial broadcast, rebroadcast, transmission,
10retransmission, licensing, relicensing, distribution,
11redistribution, or exhibition of the product, in whole or in
12part, to another person or persons.
13    "Gross revenue" means all consideration of any kind or
14nature received by a provider, or an affiliate of the provider,
15in connection with the provision of direct-to-home satellite
16service, direct broadcast satellite service, or digital
17audio-visual works to subscribers. "Gross revenue" does not
18include:
19        (1) charges for the rental of equipment related to the
20    provision of direct-to-home satellite service, direct
21    broadcast satellite service, or digital audiovisual works;
22        (2) activation, installation, repair, or maintenance
23    charges or similar service charges related to the provision
24    of direct-to-home satellite service, direct broadcast
25    satellite service, or digital audio-visual works;
26        (3) service order charges, service termination

 

 

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1    charges, or any other administrative charges related to the
2    provision of direct-to-home satellite service, direct
3    broadcast satellite service, or digital audiovisual works;
4        (4) revenue not actually received, regardless of
5    whether it is billed, including, but not limited to, bad
6    debts;
7        (5) revenue received by an affiliate or other person in
8    exchange for supplying goods and services used by a
9    provider;
10        (6) the amount of any refunds, rebates, or discounts
11    made to subscribers, advertisers, or other persons;
12        (7) revenue from any service that is subject to tax
13    under the Service Occupation Tax Act, Retailers'
14    Occupation Tax Act, Service Use Tax Act, or Use Tax Act;
15        (8) the tax imposed by this Act or any other tax of
16    general applicability imposed on a provider or a purchaser
17    of direct-to-home satellite service, direct broadcast
18    satellite service, or digital audio-visual works by a
19    federal, State, or local governmental entity and required
20    to be collected by a person and remitted to the taxing
21    entity;
22        (9) late payment fees collected from subscribers;
23        (10) charges, other than those charges specifically
24    described in this Act, that are aggregated or bundled with
25    such specifically-described charges on a subscriber's
26    bill, if the provider can reasonably identify the charges

 

 

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1    in its books and records kept in the regular course of
2    business;
3        (11) revenue from advertising services; or
4        (12) charges that may not be taxed pursuant to the
5    federal Internet Tax Freedom Act.
6    "Permanent" means perpetual or for an indefinite or
7unspecified length of time.
8    "Person" means a natural individual, firm, trust, estate,
9partnership, association, joint stock company, joint venture,
10corporation, or limited liability company, or a receiver,
11trustee, guardian, or other representative appointed by order
12of any court, and includes the federal and State governments,
13including State universities created by statute, and
14municipalities, counties, and other political subdivisions of
15this State.
16    "Premises" means a residence or place of business of a
17subscriber in this State.
18    "Provider" means a person who transmits, broadcasts,
19sells, or distributes direct-to-home satellite service, direct
20broadcast satellite service, or digital audio-visual works to
21subscribers in the State.
22    "Subscriber" means a member of the general public who
23receives direct-to-home satellite service, direct broadcast
24satellite service, or digital audio-visual works from a
25provider and does not further distribute the service in the
26ordinary course of business.
 

 

 

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1    Section 10-15. Imposition of tax.
2    (a) A tax is imposed upon the act or privilege of providing
3direct-to-home satellite service, direct broadcast satellite
4service, or digital audio-visual works to a subscriber in this
5State by any provider at the rate of 5% of the provider's gross
6revenues derived from or attributable to that subscriber.
7    (b) For purposes of the tax imposed by subsection (a), a
8subscriber is in this State if the subscriber's street address
9representative of where the subscriber's use or access of the
10direct-to-home satellite service, direct broadcast satellite
11service, or digital audio visual work primarily occurs, which
12must be the street address of the subscriber based on such
13other information kept by the provider in the regular course of
14its business.
15    (c) The tax imposed by subsection (a) may be passed through
16to, and collected from, the provider's subscribers in Illinois.
17To the extent allowed under federal or State law, a provider
18may identify as a separate line item on each regular bill
19issued to a subscriber the amount of the total bill assessed as
20a tax under this Act.
21    (d) To prevent actual multi-state taxation upon the act or
22privilege that is subject to taxation under this Act, any
23taxpayer, upon proof that that taxpayer has paid a tax in
24another state on such event, shall be allowed a credit against
25the tax imposed in this Act to the extent of the amount of such

 

 

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1tax properly due and paid in such other state. However, such
2tax is not imposed on the act or privilege to the extent such
3act or privilege may not, under the Constitution and statutes
4of the United States, be made the subject of taxation by the
5State.
 
6    Section 10-20. Remittances.
7    (a) On or before the twentieth day of each calendar month,
8every provider of direct-to-home satellite service, direct
9broadcast satellite service, or digital audio-visual works
10that provides such service or services to a subscriber in this
11State during the preceding calendar month shall file a return
12with the Department, in a form prescribed by the Department,
13stating:
14        (1) the name of the provider;
15        (2) the address of the provider's principal place of
16    business;
17        (3) the total amount of gross revenues received by the
18    provider during the preceding calendar month, quarter, or
19    year, as the case may be, from the provision of
20    direct-to-home satellite service, direct broadcast
21    satellite service, or digital audio-visual works during
22    that preceding calendar month, quarter, or year and upon
23    the basis of which the tax is imposed;
24        (4) the amount of tax due;
25        (5) the signature of the taxpayer; and

 

 

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1        (6) such other reasonable information as the
2    Department may require.
3    (b) If a taxpayer fails to sign a return within 30 days
4after the proper notice and demand for signature by the
5Department is received by the taxpayer, then the return shall
6be considered valid and any amount shown to be due on the
7return shall be deemed assessed.
8    (c) If the provider is otherwise required to file a monthly
9return, and if the provider's average monthly tax liability to
10the Department under this Act does not exceed $200, the
11Department may authorize the provider's returns to be filed on
12a quarter annual basis, with the return for January, February,
13and March of a given year being due by April 20 of that year;
14with the return for April, May, and June of a given year being
15due by July 20 of that year; with the return for July, August,
16and September of a given year being due by October 20 of that
17year, and with the return for October, November, and December
18of a given year being due by January 20 of the following year.
19    (d) If the provider is otherwise required to file a monthly
20or quarterly return, and if the provider's average monthly tax
21liability with the Department under this Act does not exceed
22$50, the Department may authorize the provider's returns to be
23filed on an annual basis, with the return for a given year
24being due by January 20 of the following year.
25    (e) Those quarterly and annual returns shall be subject to
26the same requirements as to form and substance as monthly

 

 

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1returns.
2    (f) A taxpayer who has an annual tax liability in the
3amount set forth in subsection (b) of Section 2505-210 of the
4Department of Revenue Law shall make all payments required by
5rules of the Department by electronic funds transfer.
6    Any taxpayer not required to make payments by electronic
7funds transfer may make payments by electronic funds transfer
8with the permission of the Department.
9    All taxpayers required to make payment by electronic funds
10transfer and any taxpayers authorized to voluntarily make
11payments by electronic funds transfer shall make those payments
12in the manner authorized by the Department.
 
13    Section 10-25. Records.
14    (a) A provider on whom the tax is imposed by this Act shall
15maintain the necessary records, and any other information
16required by the Department, to determine the amount of the tax
17that the provider is required to remit and any credit that the
18provider is entitled to claim under this Act.
19    (b) The records shall be open at all times to inspection by
20the Department.
 
21    Section 10-30. Rules. The Department is authorized to adopt
22and enforce any reasonable rules and to prescribe such forms
23relating to the administration and enforcement of this Act as
24it may deem appropriate.
 

 

 

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1    Section 10-35. Incorporation of Retailers' Occupation Tax
2Act and Uniform Penalty and Interest Act. All of the provisions
3of Sections 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i, and 5j of the
4Retailers' Occupation Tax Act, which are not inconsistent with
5this Act, and the Uniform Penalty and Interest Act, shall
6apply, as far as practicable, to the subject matter of this Act
7to the same extent as if such provisions were included herein.
8References in those incorporated Sections to taxpayers and to
9persons engaged in the business of selling tangible personal
10property at retail mean providers of direct-to-home satellite
11service, direct broadcast satellite service, or digital
12audio-visual works when used in this Act.
 
13
ARTICLE 15. ENTERTAINMENT TAX FAIRNESS ACT

 
14    Section 15-1. Short title. This Act may be cited as the
15Entertainment Tax Fairness Act.
 
16    Section 15-5. Application. This Act applies to all
17subscribers of entertainment in this State for the privilege to
18witness, view, or otherwise enjoy the entertainment.
19    This Act does not apply to: (1) satellite radio service or
20subscription radio service whereby a digital radio signal is
21broadcast without any corresponding or related video
22programming or services; or (2) a satellite television

 

 

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1transmission of simulcast horse races broadcast from or
2received at locations operated by an organization licensee, an
3inter-track wagering licensee, or an inter-track wagering
4location licensee licensed under the Illinois Horse Racing Act
5of 1975.
 
6    Section 15-10. Definitions. As used in this Act:
7    "Cable service" has the meaning given to that term in item
8(6) of 47 U.S.C. 522.
9    "Department" means the Department of Revenue.
10    "Digital audio-visual works service" means the
11transmission of a series of related images that, when shown in
12succession, impart an impression of motion, together with
13accompanying sounds, if any, sold to an end user with rights of
14less than permanent use. "Digital audio-visual works service"
15does not include cable service or video service.
16    "Direct broadcast satellite service" means video services
17transmitted or broadcast by satellite directly to the
18subscriber's premises with the use of or accompanied by ground
19receiving or distribution equipment, including, but not
20limited to, infrastructure to provide Internet access used in
21the transmission or broadcast of such video services, at the
22subscriber's premises, but not in the uplink process to the
23satellite, and includes, but is not limited to, the
24retransmission of local broadcast television, the provision of
25premium channels, other recurring monthly services, service

 

 

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1and pay-per-view, video-on-demand, and other event-based
2services.
3    "Direct-to-home satellite service" has the meaning given
4to that term in Public Law No. 104-104, Title VI, Section
5602(a), February 8, 1996, 110 Stat. 144 (reprinted at 47 U.S.C.
6152).
7    "End user" means any person other than a person who
8receives by contract a product transferred electronically for
9further commercial broadcast, rebroadcast, transmission,
10retransmission, licensing, relicensing, distribution,
11redistribution, or exhibition of the product, in whole or in
12part, to another person or persons.
13    "Entertainment" means any paid video programming whether
14transmitted by cable service, direct-to-home satellite
15service, direct broadcast satellite service, digital
16audio-visual works service, or video service to a subscriber in
17this State.
18    "Permanent" means perpetual or for an indefinite or
19unspecified length of time.
20    "Provider" means a person who transmits, broadcasts,
21sells, or distributes cable service, direct-to-home satellite
22service, direct broadcast satellite service, digital
23audio-visual works service, or video service to subscribers in
24the State.
25    "Subscriber" means a member of the general public who
26receives cable service, direct-to-home satellite service,

 

 

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1direct broadcast satellite service, or digital audio-visual
2works service, or video service from a provider and does not
3further distribute the service in the ordinary course of
4business.
5    "Video service" has the meaning given to that term in the
6Cable and Video Competition Law of 2007 of the Public Utilities
7Act.
 
8    Section 15-15. Imposition of tax.
9    (a) A tax is imposed upon the subscribers of entertainment
10in this State at the rate of 1% of the charges paid for the
11privilege to witness, view, or otherwise enjoy the
12entertainment.
13    (b) For purposes of the tax imposed by subsection (a), a
14subscriber is in this State if the subscriber's street address
15is representative of where the subscriber's use or access of
16the entertainment primarily occurs, which must be the street
17address of the subscriber based on such other information kept
18by the provider in the regular course of its business.
19    (c) The provider of the entertainment shall collect and
20secure from each subscriber the tax imposed by this Act and
21remit the tax to the Department as set forth in Section 15-20
22of this Act.
 
23    Section 15-20. Remittances.
24    (a) On or before the twentieth day of each calendar month,

 

 

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1every provider shall file a return with the Department, in a
2form prescribed by the Department, stating:
3        (1) the name of the provider;
4        (2) the address of the provider's principal place of
5    business;
6        (3) the total amount of tax revenues collected by the
7    provider under this Act during the preceding calendar
8    month, quarter, or year, as the case may be, during that
9    preceding calendar month, quarter, or year and upon the
10    basis of which the tax is imposed;
11        (4) the amount of tax due;
12        (5) the signature of the provider; and
13        (6) such other reasonable information as the
14    Department may require.
15    (b) If a provider fails to sign a return within 30 days
16after the proper notice and demand for signature by the
17Department is received by the provider, then the return shall
18be considered valid and any amount shown to be due on the
19return shall be deemed assessed.
20    (c) If the provider is otherwise required to file a monthly
21return, and if the amount collected by the provider under this
22Act does not exceed $200, the Department may authorize the
23provider's returns to be filed on a quarter annual basis, with
24the return for January, February, and March of a given year
25being due by April 20 of that year; with the return for April,
26May, and June of a given year being due by July 20 of that year;

 

 

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1with the return for July, August, and September of a given year
2being due by October 20 of that year, and with the return for
3October, November, and December of a given year being due by
4January 20 of the following year.
5    (d) If the provider is otherwise required to file a monthly
6or quarterly return, and if the amount collected by the
7provider under this Act does not exceed $50, the Department may
8authorize the provider's returns to be filed on an annual
9basis, with the return for a given year being due by January 20
10of the following year.
11    (e) Those quarterly and annual returns shall be subject to
12the same requirements as to form and substance as monthly
13returns.
14    (f) A provider responsible for collecting and remitting the
15amount set forth in subsection (b) of Section 2505-210 of the
16Department of Revenue Law shall make all payments required by
17rules of the Department by electronic funds transfer.
18    Any provider not required to make payments by electronic
19funds transfer may make payments by electronic funds transfer
20with the permission of the Department.
21    All providers required to make payment by electronic funds
22transfer and any taxpayers authorized to voluntarily make
23payments by electronic funds transfer shall make those payments
24in the manner authorized by the Department.
 
25    Section 15-25. Records.

 

 

10000SB0009sam006- 23 -LRB100 06347 HLH 26817 a

1    (a) A provider subject to this Act shall maintain the
2necessary records, and any other information required by the
3Department, to determine the amount of the tax that the
4provider is required to collect and remit and any credit that
5the provider is entitled to claim under this Act.
6    (b) The records shall be open at all times to inspection by
7the Department.
 
8    Section 15-30. Rules. The Department is authorized to adopt
9and enforce any reasonable rules and to prescribe such forms
10relating to the administration and enforcement of this Act as
11it may deem appropriate.
 
12    Section 15-35. Incorporation of Retailers' Occupation Tax
13Act and Uniform Penalty and Interest Act. All of the provisions
14of Sections 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i, and 5j of the
15Retailers' Occupation Tax Act, which are not inconsistent with
16this Act, and the Uniform Penalty and Interest Act, shall
17apply, as far as practicable, to the subject matter of this Act
18to the same extent as if such provisions were included herein.
19References in those incorporated Sections to taxpayers and to
20persons engaged in the business of selling tangible personal
21property at retail mean providers of direct-to-home satellite
22service, direct broadcast satellite service, or digital
23audio-visual works service when used in this Act.
 

 

 

10000SB0009sam006- 24 -LRB100 06347 HLH 26817 a

1
ARTICLE 30. AMENDATORY PROVISIONS

 
2    Section 30-5. The State Finance Act is amended by changing
3Section 6z-51 and by adding Sections 5.878 and 5.879 as
4follows:
 
5    (30 ILCS 105/5.878 new)
6    Sec. 5.878. The Budget Economic Stabilization Fund.
 
7    (30 ILCS 105/5.879 new)
8    Sec. 5.879. The Bill Backlog Payment Fund.
 
9    (30 ILCS 105/6z-51)
10    Sec. 6z-51. Budget Stabilization Fund.
11    (a) The Budget Stabilization Fund, a special fund in the
12State Treasury, shall consist of moneys appropriated or
13transferred to that Fund, as provided in Section 6z-43 and as
14otherwise provided by law. All earnings on Budget Stabilization
15Fund investments shall be deposited into that Fund.
16    (b) Until an initial transfer has been made to the Budget
17Economic Stabilization Fund under Section 5-30 of the Budget
18Economic Stabilization Fund Act, the The State Comptroller may
19direct the State Treasurer to transfer moneys from the Budget
20Stabilization Fund to the General Revenue Fund in order to meet
21cash flow deficits resulting from timing variations between
22disbursements and the receipt of funds within a fiscal year.

 

 

10000SB0009sam006- 25 -LRB100 06347 HLH 26817 a

1Any moneys so borrowed in any fiscal year other than Fiscal
2Year 2011 shall be repaid by June 30 of the fiscal year in
3which they were borrowed. Any moneys so borrowed in Fiscal Year
42011 shall be repaid no later than July 15, 2011.
5    (c) During Fiscal Year 2017 only, amounts may be expended
6from the Budget Stabilization Fund only pursuant to specific
7authorization by appropriation. Any moneys expended pursuant
8to appropriation shall not be subject to repayment.
9(Source: P.A. 99-523, eff. 6-30-16.)
 
10    Section 30-10. The Illinois Income Tax Act is amended by
11changing Sections 201, 203, 204, 208, 212, 222, 804, 901, and
121501 and by adding Section 225 as follows:
 
13    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
14    Sec. 201. Tax Imposed.
15    (a) In general. A tax measured by net income is hereby
16imposed on every individual, corporation, trust and estate for
17each taxable year ending after July 31, 1969 on the privilege
18of earning or receiving income in or as a resident of this
19State. Such tax shall be in addition to all other occupation or
20privilege taxes imposed by this State or by any municipal
21corporation or political subdivision thereof.
22    (b) Rates. The tax imposed by subsection (a) of this
23Section shall be determined as follows, except as adjusted by
24subsection (d-1):

 

 

10000SB0009sam006- 26 -LRB100 06347 HLH 26817 a

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

 

 

10000SB0009sam006- 27 -LRB100 06347 HLH 26817 a

1        (5.1) In the case of an individual, trust, or estate,
2    for taxable years beginning prior to January 1, 2015, and
3    ending after December 31, 2014, an amount equal to the sum
4    of (i) 5% of the taxpayer's net income for the period prior
5    to January 1, 2015, as calculated under Section 202.5, and
6    (ii) 3.75% of the taxpayer's net income for the period
7    after December 31, 2014, as calculated under Section 202.5.
8        (5.2) In the case of an individual, trust, or estate,
9    for taxable years beginning on or after January 1, 2015,
10    and ending prior to January 1, 2017 January 1, 2025, an
11    amount equal to 3.75% of the taxpayer's net income for the
12    taxable year.
13        (5.3) In the case of an individual, trust, or estate,
14    for taxable years beginning prior to January 1, 2017
15    January 1, 2025, and ending after December 31, 2016
16    December 31, 2024, an amount equal to the sum of (i) 3.75%
17    of the taxpayer's net income for the period prior to
18    January 1, 2017 January 1, 2025, as calculated under
19    Section 202.5, and (ii) 4.95% 3.25% of the taxpayer's net
20    income for the period after December 31, 2016 December 31,
21    2024, as calculated under Section 202.5.
22        (5.4) In the case of an individual, trust, or estate,
23    for taxable years beginning on or after January 1, 2017
24    January 1, 2025, an amount equal to 4.95% 3.25% of the
25    taxpayer's net income for the taxable year.
26        (6) In the case of a corporation, for taxable years

 

 

10000SB0009sam006- 28 -LRB100 06347 HLH 26817 a

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

 

 

10000SB0009sam006- 29 -LRB100 06347 HLH 26817 a

1    December 31, 2014, an amount equal to the sum of (i) 7% of
2    the taxpayer's net income for the period prior to January
3    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
4    of the taxpayer's net income for the period after December
5    31, 2014, as calculated under Section 202.5.
6        (12) In the case of a corporation, for taxable years
7    beginning on or after January 1, 2015, and ending prior to
8    January 1, 2017 January 1, 2025, an amount equal to 5.25%
9    of the taxpayer's net income for the taxable year.
10        (13) In the case of a corporation, for taxable years
11    beginning prior to January 1, 2017 January 1, 2025, and
12    ending after December 31, 2016 December 31, 2024, an amount
13    equal to the sum of (i) 5.25% of the taxpayer's net income
14    for the period prior to January 1, 2017 January 1, 2025, as
15    calculated under Section 202.5, and (ii) 7% 4.8% of the
16    taxpayer's net income for the period after December 31,
17    2016 December 31, 2024, as calculated under Section 202.5.
18        (14) In the case of a corporation, for taxable years
19    beginning on or after January 1, 2017 January 1, 2025, an
20    amount equal to 7% 4.8% of the taxpayer's net income for
21    the taxable year.
22    The rates under this subsection (b) are subject to the
23provisions of Section 201.5.
24    (c) Personal Property Tax Replacement Income Tax.
25Beginning on July 1, 1979 and thereafter, in addition to such
26income tax, there is also hereby imposed the Personal Property

 

 

10000SB0009sam006- 30 -LRB100 06347 HLH 26817 a

1Tax Replacement Income Tax measured by net income on every
2corporation (including Subchapter S corporations), partnership
3and trust, for each taxable year ending after June 30, 1979.
4Such taxes are imposed on the privilege of earning or receiving
5income in or as a resident of this State. The Personal Property
6Tax Replacement Income Tax shall be in addition to the income
7tax imposed by subsections (a) and (b) of this Section and in
8addition to all other occupation or privilege taxes imposed by
9this State or by any municipal corporation or political
10subdivision thereof.
11    (d) Additional Personal Property Tax Replacement Income
12Tax Rates. The personal property tax replacement income tax
13imposed by this subsection and subsection (c) of this Section
14in the case of a corporation, other than a Subchapter S
15corporation and except as adjusted by subsection (d-1), shall
16be an additional amount equal to 2.85% of such taxpayer's net
17income for the taxable year, except that beginning on January
181, 1981, and thereafter, the rate of 2.85% specified in this
19subsection shall be reduced to 2.5%, and in the case of a
20partnership, trust or a Subchapter S corporation shall be an
21additional amount equal to 1.5% of such taxpayer's net income
22for the taxable year.
23    (d-1) Rate reduction for certain foreign insurers. In the
24case of a foreign insurer, as defined by Section 35A-5 of the
25Illinois Insurance Code, whose state or country of domicile
26imposes on insurers domiciled in Illinois a retaliatory tax

 

 

10000SB0009sam006- 31 -LRB100 06347 HLH 26817 a

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

 

 

10000SB0009sam006- 32 -LRB100 06347 HLH 26817 a

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

 

 

10000SB0009sam006- 33 -LRB100 06347 HLH 26817 a

1    the taxable year, provided such property is placed in
2    service on or after July 1, 1984. There shall be allowed an
3    additional credit equal to .5% of the basis of qualified
4    property placed in service during the taxable year,
5    provided such property is placed in service on or after
6    July 1, 1986, and the taxpayer's base employment within
7    Illinois has increased by 1% or more over the preceding
8    year as determined by the taxpayer's employment records
9    filed with the Illinois Department of Employment Security.
10    Taxpayers who are new to Illinois shall be deemed to have
11    met the 1% growth in base employment for the first year in
12    which they file employment records with the Illinois
13    Department of Employment Security. The provisions added to
14    this Section by Public Act 85-1200 (and restored by Public
15    Act 87-895) shall be construed as declaratory of existing
16    law and not as a new enactment. If, in any year, the
17    increase in base employment within Illinois over the
18    preceding year is less than 1%, the additional credit shall
19    be limited to that percentage times a fraction, the
20    numerator of which is .5% and the denominator of which is
21    1%, but shall not exceed .5%. The investment credit shall
22    not be allowed to the extent that it would reduce a
23    taxpayer's liability in any tax year below zero, nor may
24    any credit for qualified property be allowed for any year
25    other than the year in which the property was placed in
26    service in Illinois. For tax years ending on or after

 

 

10000SB0009sam006- 34 -LRB100 06347 HLH 26817 a

1    December 31, 1987, and on or before December 31, 1988, the
2    credit shall be allowed for the tax year in which the
3    property is placed in service, or, if the amount of the
4    credit exceeds the tax liability for that year, whether it
5    exceeds the original liability or the liability as later
6    amended, such excess may be carried forward and applied to
7    the tax liability of the 5 taxable years following the
8    excess credit years if the taxpayer (i) makes investments
9    which cause the creation of a minimum of 2,000 full-time
10    equivalent jobs in Illinois, (ii) is located in an
11    enterprise zone established pursuant to the Illinois
12    Enterprise Zone Act and (iii) is certified by the
13    Department of Commerce and Community Affairs (now
14    Department of Commerce and Economic Opportunity) as
15    complying with the requirements specified in clause (i) and
16    (ii) by July 1, 1986. The Department of Commerce and
17    Community Affairs (now Department of Commerce and Economic
18    Opportunity) shall notify the Department of Revenue of all
19    such certifications immediately. For tax years ending
20    after December 31, 1988, the credit shall be allowed for
21    the tax year in which the property is placed in service,
22    or, if the amount of the credit exceeds the tax liability
23    for that year, whether it exceeds the original liability or
24    the liability as later amended, such excess may be carried
25    forward and applied to the tax liability of the 5 taxable
26    years following the excess credit years. The credit shall

 

 

10000SB0009sam006- 35 -LRB100 06347 HLH 26817 a

1    be applied to the earliest year for which there is a
2    liability. If there is credit from more than one tax year
3    that is available to offset a liability, earlier credit
4    shall be applied first.
5        (2) The term "qualified property" means property
6    which:
7            (A) is tangible, whether new or used, including
8        buildings and structural components of buildings and
9        signs that are real property, but not including land or
10        improvements to real property that are not a structural
11        component of a building such as landscaping, sewer
12        lines, local access roads, fencing, parking lots, and
13        other appurtenances;
14            (B) is depreciable pursuant to Section 167 of the
15        Internal Revenue Code, except that "3-year property"
16        as defined in Section 168(c)(2)(A) of that Code is not
17        eligible for the credit provided by this subsection
18        (e);
19            (C) is acquired by purchase as defined in Section
20        179(d) of the Internal Revenue Code;
21            (D) is used in Illinois by a taxpayer who is
22        primarily engaged in manufacturing, or in mining coal
23        or fluorite, or in retailing, or was placed in service
24        on or after July 1, 2006 in a River Edge Redevelopment
25        Zone established pursuant to the River Edge
26        Redevelopment Zone Act; and

 

 

10000SB0009sam006- 36 -LRB100 06347 HLH 26817 a

1            (E) has not previously been used in Illinois in
2        such a manner and by such a person as would qualify for
3        the credit provided by this subsection (e) or
4        subsection (f).
5        (3) For purposes of this subsection (e),
6    "manufacturing" means the material staging and production
7    of tangible personal property by procedures commonly
8    regarded as manufacturing, processing, fabrication, or
9    assembling which changes some existing material into new
10    shapes, new qualities, or new combinations. For purposes of
11    this subsection (e) the term "mining" shall have the same
12    meaning as the term "mining" in Section 613(c) of the
13    Internal Revenue Code. For purposes of this subsection (e),
14    the term "retailing" means the sale of tangible personal
15    property for use or consumption and not for resale, or
16    services rendered in conjunction with the sale of tangible
17    personal property for use or consumption and not for
18    resale. For purposes of this subsection (e), "tangible
19    personal property" has the same meaning as when that term
20    is used in the Retailers' Occupation Tax Act, and, for
21    taxable years ending after December 31, 2008, does not
22    include the generation, transmission, or distribution of
23    electricity.
24        (4) The basis of qualified property shall be the basis
25    used to compute the depreciation deduction for federal
26    income tax purposes.

 

 

10000SB0009sam006- 37 -LRB100 06347 HLH 26817 a

1        (5) If the basis of the property for federal income tax
2    depreciation purposes is increased after it has been placed
3    in service in Illinois by the taxpayer, the amount of such
4    increase shall be deemed property placed in service on the
5    date of such increase in basis.
6        (6) The term "placed in service" shall have the same
7    meaning as under Section 46 of the Internal Revenue Code.
8        (7) If during any taxable year, any property ceases to
9    be qualified property in the hands of the taxpayer within
10    48 months after being placed in service, or the situs of
11    any qualified property is moved outside Illinois within 48
12    months after being placed in service, the Personal Property
13    Tax Replacement Income Tax for such taxable year shall be
14    increased. Such increase shall be determined by (i)
15    recomputing the investment credit which would have been
16    allowed for the year in which credit for such property was
17    originally allowed by eliminating such property from such
18    computation and, (ii) subtracting such recomputed credit
19    from the amount of credit previously allowed. For the
20    purposes of this paragraph (7), a reduction of the basis of
21    qualified property resulting from a redetermination of the
22    purchase price shall be deemed a disposition of qualified
23    property to the extent of such reduction.
24        (8) Unless the investment credit is extended by law,
25    the basis of qualified property shall not include costs
26    incurred after December 31, 2018, except for costs incurred

 

 

10000SB0009sam006- 38 -LRB100 06347 HLH 26817 a

1    pursuant to a binding contract entered into on or before
2    December 31, 2018.
3        (9) Each taxable year ending before December 31, 2000,
4    a partnership may elect to pass through to its partners the
5    credits to which the partnership is entitled under this
6    subsection (e) for the taxable year. A partner may use the
7    credit allocated to him or her under this paragraph only
8    against the tax imposed in subsections (c) and (d) of this
9    Section. If the partnership makes that election, those
10    credits shall be allocated among the partners in the
11    partnership in accordance with the rules set forth in
12    Section 704(b) of the Internal Revenue Code, and the rules
13    promulgated under that Section, and the allocated amount of
14    the credits shall be allowed to the partners for that
15    taxable year. The partnership shall make this election on
16    its Personal Property Tax Replacement Income Tax return for
17    that taxable year. The election to pass through the credits
18    shall be irrevocable.
19        For taxable years ending on or after December 31, 2000,
20    a partner that qualifies its partnership for a subtraction
21    under subparagraph (I) of paragraph (2) of subsection (d)
22    of Section 203 or a shareholder that qualifies a Subchapter
23    S corporation for a subtraction under subparagraph (S) of
24    paragraph (2) of subsection (b) of Section 203 shall be
25    allowed a credit under this subsection (e) equal to its
26    share of the credit earned under this subsection (e) during

 

 

10000SB0009sam006- 39 -LRB100 06347 HLH 26817 a

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

 

 

10000SB0009sam006- 40 -LRB100 06347 HLH 26817 a

1    River Edge Redevelopment Zone and shall not be allowed to
2    the extent that it would reduce a taxpayer's liability for
3    the tax imposed by subsections (a) and (b) of this Section
4    to below zero. For tax years ending on or after December
5    31, 1985, the credit shall be allowed for the tax year in
6    which the property is placed in service, or, if the amount
7    of the credit exceeds the tax liability for that year,
8    whether it exceeds the original liability or the liability
9    as later amended, such excess may be carried forward and
10    applied to the tax liability of the 5 taxable years
11    following the excess credit year. The credit shall be
12    applied to the earliest year for which there is a
13    liability. If there is credit from more than one tax year
14    that is available to offset a liability, the credit
15    accruing first in time shall be applied first.
16        (2) The term qualified property means property which:
17            (A) is tangible, whether new or used, including
18        buildings and structural components of buildings;
19            (B) is depreciable pursuant to Section 167 of the
20        Internal Revenue Code, except that "3-year property"
21        as defined in Section 168(c)(2)(A) of that Code is not
22        eligible for the credit provided by this subsection
23        (f);
24            (C) is acquired by purchase as defined in Section
25        179(d) of the Internal Revenue Code;
26            (D) is used in the Enterprise Zone or River Edge

 

 

10000SB0009sam006- 41 -LRB100 06347 HLH 26817 a

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

 

 

10000SB0009sam006- 42 -LRB100 06347 HLH 26817 a

1    originally allowed by eliminating such property from such
2    computation, and (ii) subtracting such recomputed credit
3    from the amount of credit previously allowed. For the
4    purposes of this paragraph (6), a reduction of the basis of
5    qualified property resulting from a redetermination of the
6    purchase price shall be deemed a disposition of qualified
7    property to the extent of such reduction.
8        (7) There shall be allowed an additional credit equal
9    to 0.5% of the basis of qualified property placed in
10    service during the taxable year in a River Edge
11    Redevelopment Zone, provided such property is placed in
12    service on or after July 1, 2006, and the taxpayer's base
13    employment within Illinois has increased by 1% or more over
14    the preceding year as determined by the taxpayer's
15    employment records filed with the Illinois Department of
16    Employment Security. Taxpayers who are new to Illinois
17    shall be deemed to have met the 1% growth in base
18    employment for the first year in which they file employment
19    records with the Illinois Department of Employment
20    Security. If, in any year, the increase in base employment
21    within Illinois over the preceding year is less than 1%,
22    the additional credit shall be limited to that percentage
23    times a fraction, the numerator of which is 0.5% and the
24    denominator of which is 1%, but shall not exceed 0.5%.
25    (g) (Blank).
26    (h) Investment credit; High Impact Business.

 

 

10000SB0009sam006- 43 -LRB100 06347 HLH 26817 a

1        (1) Subject to subsections (b) and (b-5) of Section 5.5
2    of the Illinois Enterprise Zone Act, a taxpayer shall be
3    allowed a credit against the tax imposed by subsections (a)
4    and (b) of this Section for investment in qualified
5    property which is placed in service by a Department of
6    Commerce and Economic Opportunity designated High Impact
7    Business. The credit shall be .5% of the basis for such
8    property. The credit shall not be available (i) until the
9    minimum investments in qualified property set forth in
10    subdivision (a)(3)(A) of Section 5.5 of the Illinois
11    Enterprise Zone Act have been satisfied or (ii) until the
12    time authorized in subsection (b-5) of the Illinois
13    Enterprise Zone Act for entities designated as High Impact
14    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
15    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
16    Act, and shall not be allowed to the extent that it would
17    reduce a taxpayer's liability for the tax imposed by
18    subsections (a) and (b) of this Section to below zero. The
19    credit applicable to such investments shall be taken in the
20    taxable year in which such investments have been completed.
21    The credit for additional investments beyond the minimum
22    investment by a designated high impact business authorized
23    under subdivision (a)(3)(A) of Section 5.5 of the Illinois
24    Enterprise Zone Act shall be available only in the taxable
25    year in which the property is placed in service and shall
26    not be allowed to the extent that it would reduce a

 

 

10000SB0009sam006- 44 -LRB100 06347 HLH 26817 a

1    taxpayer's liability for the tax imposed by subsections (a)
2    and (b) of this Section to below zero. For tax years ending
3    on or after December 31, 1987, the credit shall be allowed
4    for the tax year in which the property is placed in
5    service, or, if the amount of the credit exceeds the tax
6    liability for that year, whether it exceeds the original
7    liability or the liability as later amended, such excess
8    may be carried forward and applied to the tax liability of
9    the 5 taxable years following the excess credit year. The
10    credit shall be applied to the earliest year for which
11    there is a liability. If there is credit from more than one
12    tax year that is available to offset a liability, the
13    credit accruing first in time shall be applied first.
14        Changes made in this subdivision (h)(1) by Public Act
15    88-670 restore changes made by Public Act 85-1182 and
16    reflect existing law.
17        (2) The term qualified property means property which:
18            (A) is tangible, whether new or used, including
19        buildings and structural components of buildings;
20            (B) is depreciable pursuant to Section 167 of the
21        Internal Revenue Code, except that "3-year property"
22        as defined in Section 168(c)(2)(A) of that Code is not
23        eligible for the credit provided by this subsection
24        (h);
25            (C) is acquired by purchase as defined in Section
26        179(d) of the Internal Revenue Code; and

 

 

10000SB0009sam006- 45 -LRB100 06347 HLH 26817 a

1            (D) is not eligible for the Enterprise Zone
2        Investment Credit provided by subsection (f) of this
3        Section.
4        (3) The basis of qualified property shall be the basis
5    used to compute the depreciation deduction for federal
6    income tax purposes.
7        (4) If the basis of the property for federal income tax
8    depreciation purposes is increased after it has been placed
9    in service in a federally designated Foreign Trade Zone or
10    Sub-Zone located in Illinois by the taxpayer, the amount of
11    such increase shall be deemed property placed in service on
12    the date of such increase in basis.
13        (5) The term "placed in service" shall have the same
14    meaning as under Section 46 of the Internal Revenue Code.
15        (6) If during any taxable year ending on or before
16    December 31, 1996, any property ceases to be qualified
17    property in the hands of the taxpayer within 48 months
18    after being placed in service, or the situs of any
19    qualified property is moved outside Illinois within 48
20    months after being placed in service, the tax imposed under
21    subsections (a) and (b) of this Section for such taxable
22    year shall be increased. Such increase shall be determined
23    by (i) recomputing the investment credit which would have
24    been allowed for the year in which credit for such property
25    was originally allowed by eliminating such property from
26    such computation, and (ii) subtracting such recomputed

 

 

10000SB0009sam006- 46 -LRB100 06347 HLH 26817 a

1    credit from the amount of credit previously allowed. For
2    the purposes of this paragraph (6), a reduction of the
3    basis of qualified property resulting from a
4    redetermination of the purchase price shall be deemed a
5    disposition of qualified property to the extent of such
6    reduction.
7        (7) Beginning with tax years ending after December 31,
8    1996, if a taxpayer qualifies for the credit under this
9    subsection (h) and thereby is granted a tax abatement and
10    the taxpayer relocates its entire facility in violation of
11    the explicit terms and length of the contract under Section
12    18-183 of the Property Tax Code, the tax imposed under
13    subsections (a) and (b) of this Section shall be increased
14    for the taxable year in which the taxpayer relocated its
15    facility by an amount equal to the amount of credit
16    received by the taxpayer under this subsection (h).
17    (i) Credit for Personal Property Tax Replacement Income
18Tax. For tax years ending prior to December 31, 2003, a credit
19shall be allowed against the tax imposed by subsections (a) and
20(b) of this Section for the tax imposed by subsections (c) and
21(d) of this Section. This credit shall be computed by
22multiplying the tax imposed by subsections (c) and (d) of this
23Section by a fraction, the numerator of which is base income
24allocable to Illinois and the denominator of which is Illinois
25base income, and further multiplying the product by the tax
26rate imposed by subsections (a) and (b) of this Section.

 

 

10000SB0009sam006- 47 -LRB100 06347 HLH 26817 a

1    Any credit earned on or after December 31, 1986 under this
2subsection which is unused in the year the credit is computed
3because it exceeds the tax liability imposed by subsections (a)
4and (b) for that year (whether it exceeds the original
5liability or the liability as later amended) may be carried
6forward and applied to the tax liability imposed by subsections
7(a) and (b) of the 5 taxable years following the excess credit
8year, provided that no credit may be carried forward to any
9year ending on or after December 31, 2003. This credit shall be
10applied first to the earliest year for which there is a
11liability. If there is a credit under this subsection from more
12than one tax year that is available to offset a liability the
13earliest credit arising under this subsection shall be applied
14first.
15    If, during any taxable year ending on or after December 31,
161986, the tax imposed by subsections (c) and (d) of this
17Section for which a taxpayer has claimed a credit under this
18subsection (i) is reduced, the amount of credit for such tax
19shall also be reduced. Such reduction shall be determined by
20recomputing the credit to take into account the reduced tax
21imposed by subsections (c) and (d). If any portion of the
22reduced amount of credit has been carried to a different
23taxable year, an amended return shall be filed for such taxable
24year to reduce the amount of credit claimed.
25    (j) Training expense credit. Beginning with tax years
26ending on or after December 31, 1986 and prior to December 31,

 

 

10000SB0009sam006- 48 -LRB100 06347 HLH 26817 a

12003, a taxpayer shall be allowed a credit against the tax
2imposed by subsections (a) and (b) under this Section for all
3amounts paid or accrued, on behalf of all persons employed by
4the taxpayer in Illinois or Illinois residents employed outside
5of Illinois by a taxpayer, for educational or vocational
6training in semi-technical or technical fields or semi-skilled
7or skilled fields, which were deducted from gross income in the
8computation of taxable income. The credit against the tax
9imposed by subsections (a) and (b) shall be 1.6% of such
10training expenses. For partners, shareholders of subchapter S
11corporations, and owners of limited liability companies, if the
12liability company is treated as a partnership for purposes of
13federal and State income taxation, there shall be allowed a
14credit under this subsection (j) to be determined in accordance
15with the determination of income and distributive share of
16income under Sections 702 and 704 and subchapter S of the
17Internal Revenue Code.
18    Any credit allowed under this subsection which is unused in
19the year the credit is earned may be carried forward to each of
20the 5 taxable years following the year for which the credit is
21first computed until it is used. This credit shall be applied
22first to the earliest year for which there is a liability. If
23there is a credit under this subsection from more than one tax
24year that is available to offset a liability the earliest
25credit arising under this subsection shall be applied first. No
26carryforward credit may be claimed in any tax year ending on or

 

 

10000SB0009sam006- 49 -LRB100 06347 HLH 26817 a

1after December 31, 2003.
2    (k) Research and development credit. For tax years ending
3after July 1, 1990 and prior to December 31, 2003, and
4beginning again for tax years ending on or after December 31,
52004, and ending prior to January 1, 2016, a taxpayer shall be
6allowed a credit against the tax imposed by subsections (a) and
7(b) of this Section for increasing research activities in this
8State. The credit allowed against the tax imposed by
9subsections (a) and (b) shall be equal to 6 1/2% of the
10qualifying expenditures for increasing research activities in
11this State. For partners, shareholders of subchapter S
12corporations, and owners of limited liability companies, if the
13liability company is treated as a partnership for purposes of
14federal and State income taxation, there shall be allowed a
15credit under this subsection to be determined in accordance
16with the determination of income and distributive share of
17income under Sections 702 and 704 and subchapter S of the
18Internal Revenue Code.
19    For purposes of this subsection, "qualifying expenditures"
20means the qualifying expenditures as defined for the federal
21credit for increasing research activities which would be
22allowable under Section 41 of the Internal Revenue Code and
23which are conducted in this State, "qualifying expenditures for
24increasing research activities in this State" means the excess
25of qualifying expenditures for the taxable year in which
26incurred over qualifying expenditures for the base period,

 

 

10000SB0009sam006- 50 -LRB100 06347 HLH 26817 a

1"qualifying expenditures for the base period" means (i) for tax
2years ending prior to December 31, 2017, the average of the
3qualifying expenditures for each year in the base period; and
4(2) for tax years ending on or after December 31, 2017, 50% of
5the average of the qualifying expenditures for each year in the
6base period, and "base period" means the 3 taxable years
7immediately preceding the taxable year for which the
8determination is being made.
9    Any credit in excess of the tax liability for the taxable
10year may be carried forward. A taxpayer may elect to have the
11unused credit shown on its final completed return carried over
12as a credit against the tax liability for the following 5
13taxable years or until it has been fully used, whichever occurs
14first; provided that no credit earned in a tax year ending
15prior to December 31, 2003 may be carried forward to any year
16ending on or after December 31, 2003.
17    If an unused credit is carried forward to a given year from
182 or more earlier years, that credit arising in the earliest
19year will be applied first against the tax liability for the
20given year. If a tax liability for the given year still
21remains, the credit from the next earliest year will then be
22applied, and so on, until all credits have been used or no tax
23liability for the given year remains. Any remaining unused
24credit or credits then will be carried forward to the next
25following year in which a tax liability is incurred, except
26that no credit can be carried forward to a year which is more

 

 

10000SB0009sam006- 51 -LRB100 06347 HLH 26817 a

1than 5 years after the year in which the expense for which the
2credit is given was incurred.
3    No inference shall be drawn from this amendatory Act of the
491st General Assembly in construing this Section for taxable
5years beginning before January 1, 1999.
6    This subsection (k) is exempt from the provisions of
7Section 250.
8    It is the intent of the General Assembly that the research
9and development credit under this subsection (k) shall apply
10continuously for all tax years ending on or after December 31,
112004, including, but not limited to, the period beginning on
12January 1, 2016 and ending on the effective date of this
13amendatory Act of the 100th General Assembly. All actions taken
14in reliance on the continuation of the credit under this
15subsection (k) by any taxpayer are hereby validated.
16    (l) Environmental Remediation Tax Credit.
17        (i) For tax years ending after December 31, 1997 and on
18    or before December 31, 2001, a taxpayer shall be allowed a
19    credit against the tax imposed by subsections (a) and (b)
20    of this Section for certain amounts paid for unreimbursed
21    eligible remediation costs, as specified in this
22    subsection. For purposes of this Section, "unreimbursed
23    eligible remediation costs" means costs approved by the
24    Illinois Environmental Protection Agency ("Agency") under
25    Section 58.14 of the Environmental Protection Act that were
26    paid in performing environmental remediation at a site for

 

 

10000SB0009sam006- 52 -LRB100 06347 HLH 26817 a

1    which a No Further Remediation Letter was issued by the
2    Agency and recorded under Section 58.10 of the
3    Environmental Protection Act. The credit must be claimed
4    for the taxable year in which Agency approval of the
5    eligible remediation costs is granted. The credit is not
6    available to any taxpayer if the taxpayer or any related
7    party caused or contributed to, in any material respect, a
8    release of regulated substances on, in, or under the site
9    that was identified and addressed by the remedial action
10    pursuant to the Site Remediation Program of the
11    Environmental Protection Act. After the Pollution Control
12    Board rules are adopted pursuant to the Illinois
13    Administrative Procedure Act for the administration and
14    enforcement of Section 58.9 of the Environmental
15    Protection Act, determinations as to credit availability
16    for purposes of this Section shall be made consistent with
17    those rules. For purposes of this Section, "taxpayer"
18    includes a person whose tax attributes the taxpayer has
19    succeeded to under Section 381 of the Internal Revenue Code
20    and "related party" includes the persons disallowed a
21    deduction for losses by paragraphs (b), (c), and (f)(1) of
22    Section 267 of the Internal Revenue Code by virtue of being
23    a related taxpayer, as well as any of its partners. The
24    credit allowed against the tax imposed by subsections (a)
25    and (b) shall be equal to 25% of the unreimbursed eligible
26    remediation costs in excess of $100,000 per site, except

 

 

10000SB0009sam006- 53 -LRB100 06347 HLH 26817 a

1    that the $100,000 threshold shall not apply to any site
2    contained in an enterprise zone as determined by the
3    Department of Commerce and Community Affairs (now
4    Department of Commerce and Economic Opportunity). The
5    total credit allowed shall not exceed $40,000 per year with
6    a maximum total of $150,000 per site. For partners and
7    shareholders of subchapter S corporations, there shall be
8    allowed a credit under this subsection to be determined in
9    accordance with the determination of income and
10    distributive share of income under Sections 702 and 704 and
11    subchapter S of the Internal Revenue Code.
12        (ii) A credit allowed under this subsection that is
13    unused in the year the credit is earned may be carried
14    forward to each of the 5 taxable years following the year
15    for which the credit is first earned until it is used. The
16    term "unused credit" does not include any amounts of
17    unreimbursed eligible remediation costs in excess of the
18    maximum credit per site authorized under paragraph (i).
19    This credit shall be applied first to the earliest year for
20    which there is a liability. If there is a credit under this
21    subsection from more than one tax year that is available to
22    offset a liability, the earliest credit arising under this
23    subsection shall be applied first. A credit allowed under
24    this subsection may be sold to a buyer as part of a sale of
25    all or part of the remediation site for which the credit
26    was granted. The purchaser of a remediation site and the

 

 

10000SB0009sam006- 54 -LRB100 06347 HLH 26817 a

1    tax credit shall succeed to the unused credit and remaining
2    carry-forward period of the seller. To perfect the
3    transfer, the assignor shall record the transfer in the
4    chain of title for the site and provide written notice to
5    the Director of the Illinois Department of Revenue of the
6    assignor's intent to sell the remediation site and the
7    amount of the tax credit to be transferred as a portion of
8    the sale. In no event may a credit be transferred to any
9    taxpayer if the taxpayer or a related party would not be
10    eligible under the provisions of subsection (i).
11        (iii) For purposes of this Section, the term "site"
12    shall have the same meaning as under Section 58.2 of the
13    Environmental Protection Act.
14    (m) Education expense credit. Beginning with tax years
15ending after December 31, 1999, a taxpayer who is the custodian
16of one or more qualifying pupils shall be allowed a credit
17against the tax imposed by subsections (a) and (b) of this
18Section for qualified education expenses incurred on behalf of
19the qualifying pupils. The credit shall be equal to 25% of
20qualified education expenses, but in no event may the total
21credit under this subsection claimed by a family that is the
22custodian of qualifying pupils exceed (i) $500 for tax years
23ending prior to December 31, 2017, and (ii) $750 for tax years
24ending on or after December 31, 2017. In no event shall a
25credit under this subsection reduce the taxpayer's liability
26under this Act to less than zero. Notwithstanding any other

 

 

10000SB0009sam006- 55 -LRB100 06347 HLH 26817 a

1provision of law, for taxable years beginning on or after
2January 1, 2018, no taxpayer may claim a credit under this
3subsection (m) if the taxpayer's adjusted gross income for the
4taxable year exceeds (i) $500,000, in the case of spouses
5filing a joint federal tax return or (ii) $250,000, in the case
6of all other taxpayers. This subsection is exempt from the
7provisions of Section 250 of this Act.
8    For purposes of this subsection:
9    "Qualifying pupils" means individuals who (i) are
10residents of the State of Illinois, (ii) are under the age of
1121 at the close of the school year for which a credit is
12sought, and (iii) during the school year for which a credit is
13sought were full-time pupils enrolled in a kindergarten through
14twelfth grade education program at any school, as defined in
15this subsection.
16    "Qualified education expense" means the amount incurred on
17behalf of a qualifying pupil in excess of $250 for tuition,
18book fees, and lab fees at the school in which the pupil is
19enrolled during the regular school year.
20    "School" means any public or nonpublic elementary or
21secondary school in Illinois that is in compliance with Title
22VI of the Civil Rights Act of 1964 and attendance at which
23satisfies the requirements of Section 26-1 of the School Code,
24except that nothing shall be construed to require a child to
25attend any particular public or nonpublic school to qualify for
26the credit under this Section.

 

 

10000SB0009sam006- 56 -LRB100 06347 HLH 26817 a

1    "Custodian" means, with respect to qualifying pupils, an
2Illinois resident who is a parent, the parents, a legal
3guardian, or the legal guardians of the qualifying pupils.
4    (n) River Edge Redevelopment Zone site remediation tax
5credit.
6        (i) For tax years ending on or after December 31, 2006,
7    a taxpayer shall be allowed a credit against the tax
8    imposed by subsections (a) and (b) of this Section for
9    certain amounts paid for unreimbursed eligible remediation
10    costs, as specified in this subsection. For purposes of
11    this Section, "unreimbursed eligible remediation costs"
12    means costs approved by the Illinois Environmental
13    Protection Agency ("Agency") under Section 58.14a of the
14    Environmental Protection Act that were paid in performing
15    environmental remediation at a site within a River Edge
16    Redevelopment Zone for which a No Further Remediation
17    Letter was issued by the Agency and recorded under Section
18    58.10 of the Environmental Protection Act. The credit must
19    be claimed for the taxable year in which Agency approval of
20    the eligible remediation costs is granted. The credit is
21    not available to any taxpayer if the taxpayer or any
22    related party caused or contributed to, in any material
23    respect, a release of regulated substances on, in, or under
24    the site that was identified and addressed by the remedial
25    action pursuant to the Site Remediation Program of the
26    Environmental Protection Act. Determinations as to credit

 

 

10000SB0009sam006- 57 -LRB100 06347 HLH 26817 a

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

 

 

10000SB0009sam006- 58 -LRB100 06347 HLH 26817 a

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

 

 

10000SB0009sam006- 59 -LRB100 06347 HLH 26817 a

1    the property of a registration is transferred as a result
2    of any of the following:
3            (A) bankruptcy, a receivership, or a debt
4        adjustment initiated by or against the initial
5        registration or the substantial owners of the initial
6        registration;
7            (B) cancellation, revocation, or termination of
8        any registration by the Illinois Department of Public
9        Health;
10            (C) a determination by the Illinois Department of
11        Public Health that transfer of the registration is in
12        the best interests of Illinois qualifying patients as
13        defined by the Compassionate Use of Medical Cannabis
14        Pilot Program Act;
15            (D) the death of an owner of the equity interest in
16        a registrant;
17            (E) the acquisition of a controlling interest in
18        the stock or substantially all of the assets of a
19        publicly traded company;
20            (F) a transfer by a parent company to a wholly
21        owned subsidiary; or
22            (G) the transfer or sale to or by one person to
23        another person where both persons were initial owners
24        of the registration when the registration was issued;
25        or
26        (2) the cannabis cultivation center registration,

 

 

10000SB0009sam006- 60 -LRB100 06347 HLH 26817 a

1    medical cannabis dispensary registration, or the
2    controlling interest in a registrant's property is
3    transferred in a transaction to lineal descendants in which
4    no gain or loss is recognized or as a result of a
5    transaction in accordance with Section 351 of the Internal
6    Revenue Code in which no gain or loss is recognized.
7(Source: P.A. 97-2, eff. 5-6-11; 97-636, eff. 6-1-12; 97-905,
8eff. 8-7-12; 98-109, eff. 7-25-13; 98-122, eff. 1-1-14; 98-756,
9eff. 7-16-14.)
 
10    (35 ILCS 5/203)  (from Ch. 120, par. 2-203)
11    Sec. 203. Base income defined.
12    (a) Individuals.
13        (1) In general. In the case of an individual, base
14    income means an amount equal to the taxpayer's adjusted
15    gross income for the taxable year as modified by paragraph
16    (2).
17        (2) Modifications. The adjusted gross income referred
18    to in paragraph (1) shall be modified by adding thereto the
19    sum of the following amounts:
20            (A) An amount equal to all amounts paid or accrued
21        to the taxpayer as interest or dividends during the
22        taxable year to the extent excluded from gross income
23        in the computation of adjusted gross income, except
24        stock dividends of qualified public utilities
25        described in Section 305(e) of the Internal Revenue

 

 

10000SB0009sam006- 61 -LRB100 06347 HLH 26817 a

1        Code;
2            (B) An amount equal to the amount of tax imposed by
3        this Act to the extent deducted from gross income in
4        the computation of adjusted gross income for the
5        taxable year;
6            (C) An amount equal to the amount received during
7        the taxable year as a recovery or refund of real
8        property taxes paid with respect to the taxpayer's
9        principal residence under the Revenue Act of 1939 and
10        for which a deduction was previously taken under
11        subparagraph (L) of this paragraph (2) prior to July 1,
12        1991, the retrospective application date of Article 4
13        of Public Act 87-17. In the case of multi-unit or
14        multi-use structures and farm dwellings, the taxes on
15        the taxpayer's principal residence shall be that
16        portion of the total taxes for the entire property
17        which is attributable to such principal residence;
18            (D) An amount equal to the amount of the capital
19        gain deduction allowable under the Internal Revenue
20        Code, to the extent deducted from gross income in the
21        computation of adjusted gross income;
22            (D-5) An amount, to the extent not included in
23        adjusted gross income, equal to the amount of money
24        withdrawn by the taxpayer in the taxable year from a
25        medical care savings account and the interest earned on
26        the account in the taxable year of a withdrawal

 

 

10000SB0009sam006- 62 -LRB100 06347 HLH 26817 a

1        pursuant to subsection (b) of Section 20 of the Medical
2        Care Savings Account Act or subsection (b) of Section
3        20 of the Medical Care Savings Account Act of 2000;
4            (D-10) For taxable years ending after December 31,
5        1997, an amount equal to any eligible remediation costs
6        that the individual deducted in computing adjusted
7        gross income and for which the individual claims a
8        credit under subsection (l) of Section 201;
9            (D-15) For taxable years 2001 and thereafter, an
10        amount equal to the bonus depreciation deduction taken
11        on the taxpayer's federal income tax return for the
12        taxable year under subsection (k) of Section 168 of the
13        Internal Revenue Code;
14            (D-16) If the taxpayer sells, transfers, abandons,
15        or otherwise disposes of property for which the
16        taxpayer was required in any taxable year to make an
17        addition modification under subparagraph (D-15), then
18        an amount equal to the aggregate amount of the
19        deductions taken in all taxable years under
20        subparagraph (Z) with respect to that property.
21            If the taxpayer continues to own property through
22        the last day of the last tax year for which the
23        taxpayer may claim a depreciation deduction for
24        federal income tax purposes and for which the taxpayer
25        was allowed in any taxable year to make a subtraction
26        modification under subparagraph (Z), then an amount

 

 

10000SB0009sam006- 63 -LRB100 06347 HLH 26817 a

1        equal to that subtraction modification.
2            The taxpayer is required to make the addition
3        modification under this subparagraph only once with
4        respect to any one piece of property;
5            (D-17) An amount equal to the amount otherwise
6        allowed as a deduction in computing base income for
7        interest paid, accrued, or incurred, directly or
8        indirectly, (i) for taxable years ending on or after
9        December 31, 2004, to a foreign person who would be a
10        member of the same unitary business group but for the
11        fact that foreign person's business activity outside
12        the United States is 80% or more of the foreign
13        person's total business activity and (ii) for taxable
14        years ending on or after December 31, 2008, to a person
15        who would be a member of the same unitary business
16        group but for the fact that the person is prohibited
17        under Section 1501(a)(27) from being included in the
18        unitary business group because he or she is ordinarily
19        required to apportion business income under different
20        subsections of Section 304. The addition modification
21        required by this subparagraph shall be reduced to the
22        extent that dividends were included in base income of
23        the unitary group for the same taxable year and
24        received by the taxpayer or by a member of the
25        taxpayer's unitary business group (including amounts
26        included in gross income under Sections 951 through 964

 

 

10000SB0009sam006- 64 -LRB100 06347 HLH 26817 a

1        of the Internal Revenue Code and amounts included in
2        gross income under Section 78 of the Internal Revenue
3        Code) with respect to the stock of the same person to
4        whom the interest was paid, accrued, or incurred.
5            This paragraph shall not apply to the following:
6                (i) an item of interest paid, accrued, or
7            incurred, directly or indirectly, to a person who
8            is subject in a foreign country or state, other
9            than a state which requires mandatory unitary
10            reporting, to a tax on or measured by net income
11            with respect to such interest; or
12                (ii) an item of interest paid, accrued, or
13            incurred, directly or indirectly, to a person if
14            the taxpayer can establish, based on a
15            preponderance of the evidence, both of the
16            following:
17                    (a) the person, during the same taxable
18                year, paid, accrued, or incurred, the interest
19                to a person that is not a related member, and
20                    (b) the transaction giving rise to the
21                interest expense between the taxpayer and the
22                person did not have as a principal purpose the
23                avoidance of Illinois income tax, and is paid
24                pursuant to a contract or agreement that
25                reflects an arm's-length interest rate and
26                terms; or

 

 

10000SB0009sam006- 65 -LRB100 06347 HLH 26817 a

1                (iii) the taxpayer can establish, based on
2            clear and convincing evidence, that the interest
3            paid, accrued, or incurred relates to a contract or
4            agreement entered into at arm's-length rates and
5            terms and the principal purpose for the payment is
6            not federal or Illinois tax avoidance; or
7                (iv) an item of interest paid, accrued, or
8            incurred, directly or indirectly, to a person if
9            the taxpayer establishes by clear and convincing
10            evidence that the adjustments are unreasonable; or
11            if the taxpayer and the Director agree in writing
12            to the application or use of an alternative method
13            of apportionment under Section 304(f).
14                Nothing in this subsection shall preclude the
15            Director from making any other adjustment
16            otherwise allowed under Section 404 of this Act for
17            any tax year beginning after the effective date of
18            this amendment provided such adjustment is made
19            pursuant to regulation adopted by the Department
20            and such regulations provide methods and standards
21            by which the Department will utilize its authority
22            under Section 404 of this Act;
23            (D-18) An amount equal to the amount of intangible
24        expenses and costs otherwise allowed as a deduction in
25        computing base income, and that were paid, accrued, or
26        incurred, directly or indirectly, (i) for taxable

 

 

10000SB0009sam006- 66 -LRB100 06347 HLH 26817 a

1        years ending on or after December 31, 2004, to a
2        foreign person who would be a member of the same
3        unitary business group but for the fact that the
4        foreign person's business activity outside the United
5        States is 80% or more of that person's total business
6        activity and (ii) for taxable years ending on or after
7        December 31, 2008, to a person who would be a member of
8        the same unitary business group but for the fact that
9        the person is prohibited under Section 1501(a)(27)
10        from being included in the unitary business group
11        because he or she is ordinarily required to apportion
12        business income under different subsections of Section
13        304. The addition modification required by this
14        subparagraph shall be reduced to the extent that
15        dividends were included in base income of the unitary
16        group for the same taxable year and received by the
17        taxpayer or by a member of the taxpayer's unitary
18        business group (including amounts included in gross
19        income under Sections 951 through 964 of the Internal
20        Revenue Code and amounts included in gross income under
21        Section 78 of the Internal Revenue Code) with respect
22        to the stock of the same person to whom the intangible
23        expenses and costs were directly or indirectly paid,
24        incurred, or accrued. The preceding sentence does not
25        apply to the extent that the same dividends caused a
26        reduction to the addition modification required under

 

 

10000SB0009sam006- 67 -LRB100 06347 HLH 26817 a

1        Section 203(a)(2)(D-17) of this Act. As used in this
2        subparagraph, the term "intangible expenses and costs"
3        includes (1) expenses, losses, and costs for, or
4        related to, the direct or indirect acquisition, use,
5        maintenance or management, ownership, sale, exchange,
6        or any other disposition of intangible property; (2)
7        losses incurred, directly or indirectly, from
8        factoring transactions or discounting transactions;
9        (3) royalty, patent, technical, and copyright fees;
10        (4) licensing fees; and (5) other similar expenses and
11        costs. For purposes of this subparagraph, "intangible
12        property" includes patents, patent applications, trade
13        names, trademarks, service marks, copyrights, mask
14        works, trade secrets, and similar types of intangible
15        assets.
16            This paragraph shall not apply to the following:
17                (i) any item of intangible expenses or costs
18            paid, accrued, or incurred, directly or
19            indirectly, from a transaction with a person who is
20            subject in a foreign country or state, other than a
21            state which requires mandatory unitary reporting,
22            to a tax on or measured by net income with respect
23            to such item; or
24                (ii) any item of intangible expense or cost
25            paid, accrued, or incurred, directly or
26            indirectly, if the taxpayer can establish, based

 

 

10000SB0009sam006- 68 -LRB100 06347 HLH 26817 a

1            on a preponderance of the evidence, both of the
2            following:
3                    (a) the person during the same taxable
4                year paid, accrued, or incurred, the
5                intangible expense or cost to a person that is
6                not a related member, and
7                    (b) the transaction giving rise to the
8                intangible expense or cost between the
9                taxpayer and the person did not have as a
10                principal purpose the avoidance of Illinois
11                income tax, and is paid pursuant to a contract
12                or agreement that reflects arm's-length terms;
13                or
14                (iii) any item of intangible expense or cost
15            paid, accrued, or incurred, directly or
16            indirectly, from a transaction with a person if the
17            taxpayer establishes by clear and convincing
18            evidence, that the adjustments are unreasonable;
19            or if the taxpayer and the Director agree in
20            writing to the application or use of an alternative
21            method of apportionment under Section 304(f);
22                Nothing in this subsection shall preclude the
23            Director from making any other adjustment
24            otherwise allowed under Section 404 of this Act for
25            any tax year beginning after the effective date of
26            this amendment provided such adjustment is made

 

 

10000SB0009sam006- 69 -LRB100 06347 HLH 26817 a

1            pursuant to regulation adopted by the Department
2            and such regulations provide methods and standards
3            by which the Department will utilize its authority
4            under Section 404 of this Act;
5            (D-19) For taxable years ending on or after
6        December 31, 2008, an amount equal to the amount of
7        insurance premium expenses and costs otherwise allowed
8        as a deduction in computing base income, and that were
9        paid, accrued, or incurred, directly or indirectly, to
10        a person who would be a member of the same unitary
11        business group but for the fact that the person is
12        prohibited under Section 1501(a)(27) from being
13        included in the unitary business group because he or
14        she is ordinarily required to apportion business
15        income under different subsections of Section 304. The
16        addition modification required by this subparagraph
17        shall be reduced to the extent that dividends were
18        included in base income of the unitary group for the
19        same taxable year and received by the taxpayer or by a
20        member of the taxpayer's unitary business group
21        (including amounts included in gross income under
22        Sections 951 through 964 of the Internal Revenue Code
23        and amounts included in gross income under Section 78
24        of the Internal Revenue Code) with respect to the stock
25        of the same person to whom the premiums and costs were
26        directly or indirectly paid, incurred, or accrued. The

 

 

10000SB0009sam006- 70 -LRB100 06347 HLH 26817 a

1        preceding sentence does not apply to the extent that
2        the same dividends caused a reduction to the addition
3        modification required under Section 203(a)(2)(D-17) or
4        Section 203(a)(2)(D-18) of this Act.
5            (D-20) For taxable years beginning on or after
6        January 1, 2002 and ending on or before December 31,
7        2006, in the case of a distribution from a qualified
8        tuition program under Section 529 of the Internal
9        Revenue Code, other than (i) a distribution from a
10        College Savings Pool created under Section 16.5 of the
11        State Treasurer Act or (ii) a distribution from the
12        Illinois Prepaid Tuition Trust Fund, an amount equal to
13        the amount excluded from gross income under Section
14        529(c)(3)(B). For taxable years beginning on or after
15        January 1, 2007, in the case of a distribution from a
16        qualified tuition program under Section 529 of the
17        Internal Revenue Code, other than (i) a distribution
18        from a College Savings Pool created under Section 16.5
19        of the State Treasurer Act, (ii) a distribution from
20        the Illinois Prepaid Tuition Trust Fund, or (iii) a
21        distribution from a qualified tuition program under
22        Section 529 of the Internal Revenue Code that (I)
23        adopts and determines that its offering materials
24        comply with the College Savings Plans Network's
25        disclosure principles and (II) has made reasonable
26        efforts to inform in-state residents of the existence

 

 

10000SB0009sam006- 71 -LRB100 06347 HLH 26817 a

1        of in-state qualified tuition programs by informing
2        Illinois residents directly and, where applicable, to
3        inform financial intermediaries distributing the
4        program to inform in-state residents of the existence
5        of in-state qualified tuition programs at least
6        annually, an amount equal to the amount excluded from
7        gross income under Section 529(c)(3)(B).
8            For the purposes of this subparagraph (D-20), a
9        qualified tuition program has made reasonable efforts
10        if it makes disclosures (which may use the term
11        "in-state program" or "in-state plan" and need not
12        specifically refer to Illinois or its qualified
13        programs by name) (i) directly to prospective
14        participants in its offering materials or makes a
15        public disclosure, such as a website posting; and (ii)
16        where applicable, to intermediaries selling the
17        out-of-state program in the same manner that the
18        out-of-state program distributes its offering
19        materials;
20            (D-21) For taxable years beginning on or after
21        January 1, 2007, in the case of transfer of moneys from
22        a qualified tuition program under Section 529 of the
23        Internal Revenue Code that is administered by the State
24        to an out-of-state program, an amount equal to the
25        amount of moneys previously deducted from base income
26        under subsection (a)(2)(Y) of this Section;

 

 

10000SB0009sam006- 72 -LRB100 06347 HLH 26817 a

1            (D-22) For taxable years beginning on or after
2        January 1, 2009, in the case of a nonqualified
3        withdrawal or refund of moneys from a qualified tuition
4        program under Section 529 of the Internal Revenue Code
5        administered by the State that is not used for
6        qualified expenses at an eligible education
7        institution, an amount equal to the contribution
8        component of the nonqualified withdrawal or refund
9        that was previously deducted from base income under
10        subsection (a)(2)(y) of this Section, provided that
11        the withdrawal or refund did not result from the
12        beneficiary's death or disability;
13            (D-23) An amount equal to the credit allowable to
14        the taxpayer under Section 218(a) of this Act,
15        determined without regard to Section 218(c) of this
16        Act;
17            (D-24) For taxable years beginning on or after
18        January 1, 2017, an amount equal to the deduction
19        allowed under Section 199 of the Internal Revenue Code
20        for the taxable year;
21    and by deducting from the total so obtained the sum of the
22    following amounts:
23            (E) For taxable years ending before December 31,
24        2001, any amount included in such total in respect of
25        any compensation (including but not limited to any
26        compensation paid or accrued to a serviceman while a

 

 

10000SB0009sam006- 73 -LRB100 06347 HLH 26817 a

1        prisoner of war or missing in action) paid to a
2        resident by reason of being on active duty in the Armed
3        Forces of the United States and in respect of any
4        compensation paid or accrued to a resident who as a
5        governmental employee was a prisoner of war or missing
6        in action, and in respect of any compensation paid to a
7        resident in 1971 or thereafter for annual training
8        performed pursuant to Sections 502 and 503, Title 32,
9        United States Code as a member of the Illinois National
10        Guard or, beginning with taxable years ending on or
11        after December 31, 2007, the National Guard of any
12        other state. For taxable years ending on or after
13        December 31, 2001, any amount included in such total in
14        respect of any compensation (including but not limited
15        to any compensation paid or accrued to a serviceman
16        while a prisoner of war or missing in action) paid to a
17        resident by reason of being a member of any component
18        of the Armed Forces of the United States and in respect
19        of any compensation paid or accrued to a resident who
20        as a governmental employee was a prisoner of war or
21        missing in action, and in respect of any compensation
22        paid to a resident in 2001 or thereafter by reason of
23        being a member of the Illinois National Guard or,
24        beginning with taxable years ending on or after
25        December 31, 2007, the National Guard of any other
26        state. The provisions of this subparagraph (E) are

 

 

10000SB0009sam006- 74 -LRB100 06347 HLH 26817 a

1        exempt from the provisions of Section 250;
2            (F) An amount equal to all amounts included in such
3        total pursuant to the provisions of Sections 402(a),
4        402(c), 403(a), 403(b), 406(a), 407(a), and 408 of the
5        Internal Revenue Code, or included in such total as
6        distributions under the provisions of any retirement
7        or disability plan for employees of any governmental
8        agency or unit, or retirement payments to retired
9        partners, which payments are excluded in computing net
10        earnings from self employment by Section 1402 of the
11        Internal Revenue Code and regulations adopted pursuant
12        thereto;
13            (G) The valuation limitation amount;
14            (H) An amount equal to the amount of any tax
15        imposed by this Act which was refunded to the taxpayer
16        and included in such total for the taxable year;
17            (I) An amount equal to all amounts included in such
18        total pursuant to the provisions of Section 111 of the
19        Internal Revenue Code as a recovery of items previously
20        deducted from adjusted gross income in the computation
21        of taxable income;
22            (J) An amount equal to those dividends included in
23        such total which were paid by a corporation which
24        conducts business operations in a River Edge
25        Redevelopment Zone or zones created under the River
26        Edge Redevelopment Zone Act, and conducts

 

 

10000SB0009sam006- 75 -LRB100 06347 HLH 26817 a

1        substantially all of its operations in a River Edge
2        Redevelopment Zone or zones. This subparagraph (J) is
3        exempt from the provisions of Section 250;
4            (K) An amount equal to those dividends included in
5        such total that were paid by a corporation that
6        conducts business operations in a federally designated
7        Foreign Trade Zone or Sub-Zone and that is designated a
8        High Impact Business located in Illinois; provided
9        that dividends eligible for the deduction provided in
10        subparagraph (J) of paragraph (2) of this subsection
11        shall not be eligible for the deduction provided under
12        this subparagraph (K);
13            (L) For taxable years ending after December 31,
14        1983, an amount equal to all social security benefits
15        and railroad retirement benefits included in such
16        total pursuant to Sections 72(r) and 86 of the Internal
17        Revenue Code;
18            (M) With the exception of any amounts subtracted
19        under subparagraph (N), an amount equal to the sum of
20        all amounts disallowed as deductions by (i) Sections
21        171(a) (2), and 265(2) of the Internal Revenue Code,
22        and all amounts of expenses allocable to interest and
23        disallowed as deductions by Section 265(1) of the
24        Internal Revenue Code; and (ii) for taxable years
25        ending on or after August 13, 1999, Sections 171(a)(2),
26        265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue

 

 

10000SB0009sam006- 76 -LRB100 06347 HLH 26817 a

1        Code, plus, for taxable years ending on or after
2        December 31, 2011, Section 45G(e)(3) of the Internal
3        Revenue Code and, for taxable years ending on or after
4        December 31, 2008, any amount included in gross income
5        under Section 87 of the Internal Revenue Code; the
6        provisions of this subparagraph are exempt from the
7        provisions of Section 250;
8            (N) An amount equal to all amounts included in such
9        total which are exempt from taxation by this State
10        either by reason of its statutes or Constitution or by
11        reason of the Constitution, treaties or statutes of the
12        United States; provided that, in the case of any
13        statute of this State that exempts income derived from
14        bonds or other obligations from the tax imposed under
15        this Act, the amount exempted shall be the interest net
16        of bond premium amortization;
17            (O) An amount equal to any contribution made to a
18        job training project established pursuant to the Tax
19        Increment Allocation Redevelopment Act;
20            (P) An amount equal to the amount of the deduction
21        used to compute the federal income tax credit for
22        restoration of substantial amounts held under claim of
23        right for the taxable year pursuant to Section 1341 of
24        the Internal Revenue Code or of any itemized deduction
25        taken from adjusted gross income in the computation of
26        taxable income for restoration of substantial amounts

 

 

10000SB0009sam006- 77 -LRB100 06347 HLH 26817 a

1        held under claim of right for the taxable year;
2            (Q) An amount equal to any amounts included in such
3        total, received by the taxpayer as an acceleration in
4        the payment of life, endowment or annuity benefits in
5        advance of the time they would otherwise be payable as
6        an indemnity for a terminal illness;
7            (R) An amount equal to the amount of any federal or
8        State bonus paid to veterans of the Persian Gulf War;
9            (S) An amount, to the extent included in adjusted
10        gross income, equal to the amount of a contribution
11        made in the taxable year on behalf of the taxpayer to a
12        medical care savings account established under the
13        Medical Care Savings Account Act or the Medical Care
14        Savings Account Act of 2000 to the extent the
15        contribution is accepted by the account administrator
16        as provided in that Act;
17            (T) An amount, to the extent included in adjusted
18        gross income, equal to the amount of interest earned in
19        the taxable year on a medical care savings account
20        established under the Medical Care Savings Account Act
21        or the Medical Care Savings Account Act of 2000 on
22        behalf of the taxpayer, other than interest added
23        pursuant to item (D-5) of this paragraph (2);
24            (U) For one taxable year beginning on or after
25        January 1, 1994, an amount equal to the total amount of
26        tax imposed and paid under subsections (a) and (b) of

 

 

10000SB0009sam006- 78 -LRB100 06347 HLH 26817 a

1        Section 201 of this Act on grant amounts received by
2        the taxpayer under the Nursing Home Grant Assistance
3        Act during the taxpayer's taxable years 1992 and 1993;
4            (V) Beginning with tax years ending on or after
5        December 31, 1995 and ending with tax years ending on
6        or before December 31, 2004, an amount equal to the
7        amount paid by a taxpayer who is a self-employed
8        taxpayer, a partner of a partnership, or a shareholder
9        in a Subchapter S corporation for health insurance or
10        long-term care insurance for that taxpayer or that
11        taxpayer's spouse or dependents, to the extent that the
12        amount paid for that health insurance or long-term care
13        insurance may be deducted under Section 213 of the
14        Internal Revenue Code, has not been deducted on the
15        federal income tax return of the taxpayer, and does not
16        exceed the taxable income attributable to that
17        taxpayer's income, self-employment income, or
18        Subchapter S corporation income; except that no
19        deduction shall be allowed under this item (V) if the
20        taxpayer is eligible to participate in any health
21        insurance or long-term care insurance plan of an
22        employer of the taxpayer or the taxpayer's spouse. The
23        amount of the health insurance and long-term care
24        insurance subtracted under this item (V) shall be
25        determined by multiplying total health insurance and
26        long-term care insurance premiums paid by the taxpayer

 

 

10000SB0009sam006- 79 -LRB100 06347 HLH 26817 a

1        times a number that represents the fractional
2        percentage of eligible medical expenses under Section
3        213 of the Internal Revenue Code of 1986 not actually
4        deducted on the taxpayer's federal income tax return;
5            (W) For taxable years beginning on or after January
6        1, 1998, all amounts included in the taxpayer's federal
7        gross income in the taxable year from amounts converted
8        from a regular IRA to a Roth IRA. This paragraph is
9        exempt from the provisions of Section 250;
10            (X) For taxable year 1999 and thereafter, an amount
11        equal to the amount of any (i) distributions, to the
12        extent includible in gross income for federal income
13        tax purposes, made to the taxpayer because of his or
14        her status as a victim of persecution for racial or
15        religious reasons by Nazi Germany or any other Axis
16        regime or as an heir of the victim and (ii) items of
17        income, to the extent includible in gross income for
18        federal income tax purposes, attributable to, derived
19        from or in any way related to assets stolen from,
20        hidden from, or otherwise lost to a victim of
21        persecution for racial or religious reasons by Nazi
22        Germany or any other Axis regime immediately prior to,
23        during, and immediately after World War II, including,
24        but not limited to, interest on the proceeds receivable
25        as insurance under policies issued to a victim of
26        persecution for racial or religious reasons by Nazi

 

 

10000SB0009sam006- 80 -LRB100 06347 HLH 26817 a

1        Germany or any other Axis regime by European insurance
2        companies immediately prior to and during World War II;
3        provided, however, this subtraction from federal
4        adjusted gross income does not apply to assets acquired
5        with such assets or with the proceeds from the sale of
6        such assets; provided, further, this paragraph shall
7        only apply to a taxpayer who was the first recipient of
8        such assets after their recovery and who is a victim of
9        persecution for racial or religious reasons by Nazi
10        Germany or any other Axis regime or as an heir of the
11        victim. The amount of and the eligibility for any
12        public assistance, benefit, or similar entitlement is
13        not affected by the inclusion of items (i) and (ii) of
14        this paragraph in gross income for federal income tax
15        purposes. This paragraph is exempt from the provisions
16        of Section 250;
17            (Y) For taxable years beginning on or after January
18        1, 2002 and ending on or before December 31, 2004,
19        moneys contributed in the taxable year to a College
20        Savings Pool account under Section 16.5 of the State
21        Treasurer Act, except that amounts excluded from gross
22        income under Section 529(c)(3)(C)(i) of the Internal
23        Revenue Code shall not be considered moneys
24        contributed under this subparagraph (Y). For taxable
25        years beginning on or after January 1, 2005, a maximum
26        of $10,000 contributed in the taxable year to (i) a

 

 

10000SB0009sam006- 81 -LRB100 06347 HLH 26817 a

1        College Savings Pool account under Section 16.5 of the
2        State Treasurer Act or (ii) the Illinois Prepaid
3        Tuition Trust Fund, except that amounts excluded from
4        gross income under Section 529(c)(3)(C)(i) of the
5        Internal Revenue Code shall not be considered moneys
6        contributed under this subparagraph (Y). For purposes
7        of this subparagraph, contributions made by an
8        employer on behalf of an employee, or matching
9        contributions made by an employee, shall be treated as
10        made by the employee. This subparagraph (Y) is exempt
11        from the provisions of Section 250;
12            (Z) For taxable years 2001 and thereafter, for the
13        taxable year in which the bonus depreciation deduction
14        is taken on the taxpayer's federal income tax return
15        under subsection (k) of Section 168 of the Internal
16        Revenue Code and for each applicable taxable year
17        thereafter, an amount equal to "x", where:
18                (1) "y" equals the amount of the depreciation
19            deduction taken for the taxable year on the
20            taxpayer's federal income tax return on property
21            for which the bonus depreciation deduction was
22            taken in any year under subsection (k) of Section
23            168 of the Internal Revenue Code, but not including
24            the bonus depreciation deduction;
25                (2) for taxable years ending on or before
26            December 31, 2005, "x" equals "y" multiplied by 30

 

 

10000SB0009sam006- 82 -LRB100 06347 HLH 26817 a

1            and then divided by 70 (or "y" multiplied by
2            0.429); and
3                (3) for taxable years ending after December
4            31, 2005:
5                    (i) for property on which a bonus
6                depreciation deduction of 30% of the adjusted
7                basis was taken, "x" equals "y" multiplied by
8                30 and then divided by 70 (or "y" multiplied by
9                0.429); and
10                    (ii) for property on which a bonus
11                depreciation deduction of 50% of the adjusted
12                basis was taken, "x" equals "y" multiplied by
13                1.0.
14            The aggregate amount deducted under this
15        subparagraph in all taxable years for any one piece of
16        property may not exceed the amount of the bonus
17        depreciation deduction taken on that property on the
18        taxpayer's federal income tax return under subsection
19        (k) of Section 168 of the Internal Revenue Code. This
20        subparagraph (Z) is exempt from the provisions of
21        Section 250;
22            (AA) If the taxpayer sells, transfers, abandons,
23        or otherwise disposes of property for which the
24        taxpayer was required in any taxable year to make an
25        addition modification under subparagraph (D-15), then
26        an amount equal to that addition modification.

 

 

10000SB0009sam006- 83 -LRB100 06347 HLH 26817 a

1            If the taxpayer continues to own property through
2        the last day of the last tax year for which the
3        taxpayer may claim a depreciation deduction for
4        federal income tax purposes and for which the taxpayer
5        was required in any taxable year to make an addition
6        modification under subparagraph (D-15), then an amount
7        equal to that addition modification.
8            The taxpayer is allowed to take the deduction under
9        this subparagraph only once with respect to any one
10        piece of property.
11            This subparagraph (AA) is exempt from the
12        provisions of Section 250;
13            (BB) Any amount included in adjusted gross income,
14        other than salary, received by a driver in a
15        ridesharing arrangement using a motor vehicle;
16            (CC) The amount of (i) any interest income (net of
17        the deductions allocable thereto) taken into account
18        for the taxable year with respect to a transaction with
19        a taxpayer that is required to make an addition
20        modification with respect to such transaction under
21        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
22        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
23        the amount of that addition modification, and (ii) any
24        income from intangible property (net of the deductions
25        allocable thereto) taken into account for the taxable
26        year with respect to a transaction with a taxpayer that

 

 

10000SB0009sam006- 84 -LRB100 06347 HLH 26817 a

1        is required to make an addition modification with
2        respect to such transaction under Section
3        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
4        203(d)(2)(D-8), but not to exceed the amount of that
5        addition modification. This subparagraph (CC) is
6        exempt from the provisions of Section 250;
7            (DD) An amount equal to the interest income taken
8        into account for the taxable year (net of the
9        deductions allocable thereto) with respect to
10        transactions with (i) a foreign person who would be a
11        member of the taxpayer's unitary business group but for
12        the fact that the foreign person's business activity
13        outside the United States is 80% or more of that
14        person's total business activity and (ii) for taxable
15        years ending on or after December 31, 2008, to a person
16        who would be a member of the same unitary business
17        group but for the fact that the person is prohibited
18        under Section 1501(a)(27) from being included in the
19        unitary business group because he or she is ordinarily
20        required to apportion business income under different
21        subsections of Section 304, but not to exceed the
22        addition modification required to be made for the same
23        taxable year under Section 203(a)(2)(D-17) for
24        interest paid, accrued, or incurred, directly or
25        indirectly, to the same person. This subparagraph (DD)
26        is exempt from the provisions of Section 250;

 

 

10000SB0009sam006- 85 -LRB100 06347 HLH 26817 a

1            (EE) An amount equal to the income from intangible
2        property taken into account for the taxable year (net
3        of the deductions allocable thereto) with respect to
4        transactions with (i) a foreign person who would be a
5        member of the taxpayer's unitary business group but for
6        the fact that the foreign person's business activity
7        outside the United States is 80% or more of that
8        person's total business activity and (ii) for taxable
9        years ending on or after December 31, 2008, to a person
10        who would be a member of the same unitary business
11        group but for the fact that the person is prohibited
12        under Section 1501(a)(27) from being included in the
13        unitary business group because he or she is ordinarily
14        required to apportion business income under different
15        subsections of Section 304, but not to exceed the
16        addition modification required to be made for the same
17        taxable year under Section 203(a)(2)(D-18) for
18        intangible expenses and costs paid, accrued, or
19        incurred, directly or indirectly, to the same foreign
20        person. This subparagraph (EE) is exempt from the
21        provisions of Section 250;
22            (FF) An amount equal to any amount awarded to the
23        taxpayer during the taxable year by the Court of Claims
24        under subsection (c) of Section 8 of the Court of
25        Claims Act for time unjustly served in a State prison.
26        This subparagraph (FF) is exempt from the provisions of

 

 

10000SB0009sam006- 86 -LRB100 06347 HLH 26817 a

1        Section 250; and
2            (GG) For taxable years ending on or after December
3        31, 2011, in the case of a taxpayer who was required to
4        add back any insurance premiums under Section
5        203(a)(2)(D-19), such taxpayer may elect to subtract
6        that part of a reimbursement received from the
7        insurance company equal to the amount of the expense or
8        loss (including expenses incurred by the insurance
9        company) that would have been taken into account as a
10        deduction for federal income tax purposes if the
11        expense or loss had been uninsured. If a taxpayer makes
12        the election provided for by this subparagraph (GG),
13        the insurer to which the premiums were paid must add
14        back to income the amount subtracted by the taxpayer
15        pursuant to this subparagraph (GG). This subparagraph
16        (GG) is exempt from the provisions of Section 250.
 
17    (b) Corporations.
18        (1) In general. In the case of a corporation, base
19    income means an amount equal to the taxpayer's taxable
20    income for the taxable year as modified by paragraph (2).
21        (2) Modifications. The taxable income referred to in
22    paragraph (1) shall be modified by adding thereto the sum
23    of the following amounts:
24            (A) An amount equal to all amounts paid or accrued
25        to the taxpayer as interest and all distributions

 

 

10000SB0009sam006- 87 -LRB100 06347 HLH 26817 a

1        received from regulated investment companies during
2        the taxable year to the extent excluded from gross
3        income in the computation of taxable income;
4            (B) An amount equal to the amount of tax imposed by
5        this Act to the extent deducted from gross income in
6        the computation of taxable income for the taxable year;
7            (C) In the case of a regulated investment company,
8        an amount equal to the excess of (i) the net long-term
9        capital gain for the taxable year, over (ii) the amount
10        of the capital gain dividends designated as such in
11        accordance with Section 852(b)(3)(C) of the Internal
12        Revenue Code and any amount designated under Section
13        852(b)(3)(D) of the Internal Revenue Code,
14        attributable to the taxable year (this amendatory Act
15        of 1995 (Public Act 89-89) is declarative of existing
16        law and is not a new enactment);
17            (D) The amount of any net operating loss deduction
18        taken in arriving at taxable income, other than a net
19        operating loss carried forward from a taxable year
20        ending prior to December 31, 1986;
21            (E) For taxable years in which a net operating loss
22        carryback or carryforward from a taxable year ending
23        prior to December 31, 1986 is an element of taxable
24        income under paragraph (1) of subsection (e) or
25        subparagraph (E) of paragraph (2) of subsection (e),
26        the amount by which addition modifications other than

 

 

10000SB0009sam006- 88 -LRB100 06347 HLH 26817 a

1        those provided by this subparagraph (E) exceeded
2        subtraction modifications in such earlier taxable
3        year, with the following limitations applied in the
4        order that they are listed:
5                (i) the addition modification relating to the
6            net operating loss carried back or forward to the
7            taxable year from any taxable year ending prior to
8            December 31, 1986 shall be reduced by the amount of
9            addition modification under this subparagraph (E)
10            which related to that net operating loss and which
11            was taken into account in calculating the base
12            income of an earlier taxable year, and
13                (ii) the addition modification relating to the
14            net operating loss carried back or forward to the
15            taxable year from any taxable year ending prior to
16            December 31, 1986 shall not exceed the amount of
17            such carryback or carryforward;
18            For taxable years in which there is a net operating
19        loss carryback or carryforward from more than one other
20        taxable year ending prior to December 31, 1986, the
21        addition modification provided in this subparagraph
22        (E) shall be the sum of the amounts computed
23        independently under the preceding provisions of this
24        subparagraph (E) for each such taxable year;
25            (E-5) For taxable years ending after December 31,
26        1997, an amount equal to any eligible remediation costs

 

 

10000SB0009sam006- 89 -LRB100 06347 HLH 26817 a

1        that the corporation deducted in computing adjusted
2        gross income and for which the corporation claims a
3        credit under subsection (l) of Section 201;
4            (E-10) For taxable years 2001 and thereafter, an
5        amount equal to the bonus depreciation deduction taken
6        on the taxpayer's federal income tax return for the
7        taxable year under subsection (k) of Section 168 of the
8        Internal Revenue Code;
9            (E-11) If the taxpayer sells, transfers, abandons,
10        or otherwise disposes of property for which the
11        taxpayer was required in any taxable year to make an
12        addition modification under subparagraph (E-10), then
13        an amount equal to the aggregate amount of the
14        deductions taken in all taxable years under
15        subparagraph (T) with respect to that property.
16            If the taxpayer continues to own property through
17        the last day of the last tax year for which the
18        taxpayer may claim a depreciation deduction for
19        federal income tax purposes and for which the taxpayer
20        was allowed in any taxable year to make a subtraction
21        modification under subparagraph (T), then an amount
22        equal to that subtraction modification.
23            The taxpayer is required to make the addition
24        modification under this subparagraph only once with
25        respect to any one piece of property;
26            (E-12) An amount equal to the amount otherwise

 

 

10000SB0009sam006- 90 -LRB100 06347 HLH 26817 a

1        allowed as a deduction in computing base income for
2        interest paid, accrued, or incurred, directly or
3        indirectly, (i) for taxable years ending on or after
4        December 31, 2004, to a foreign person who would be a
5        member of the same unitary business group but for the
6        fact the foreign person's business activity outside
7        the United States is 80% or more of the foreign
8        person's total business activity and (ii) for taxable
9        years ending on or after December 31, 2008, to a person
10        who would be a member of the same unitary business
11        group but for the fact that the person is prohibited
12        under Section 1501(a)(27) from being included in the
13        unitary business group because he or she is ordinarily
14        required to apportion business income under different
15        subsections of Section 304. The addition modification
16        required by this subparagraph shall be reduced to the
17        extent that dividends were included in base income of
18        the unitary group for the same taxable year and
19        received by the taxpayer or by a member of the
20        taxpayer's unitary business group (including amounts
21        included in gross income pursuant to Sections 951
22        through 964 of the Internal Revenue Code and amounts
23        included in gross income under Section 78 of the
24        Internal Revenue Code) with respect to the stock of the
25        same person to whom the interest was paid, accrued, or
26        incurred.

 

 

10000SB0009sam006- 91 -LRB100 06347 HLH 26817 a

1            This paragraph shall not apply to the following:
2                (i) an item of interest paid, accrued, or
3            incurred, directly or indirectly, to a person who
4            is subject in a foreign country or state, other
5            than a state which requires mandatory unitary
6            reporting, to a tax on or measured by net income
7            with respect to such interest; or
8                (ii) an item of interest paid, accrued, or
9            incurred, directly or indirectly, to a person if
10            the taxpayer can establish, based on a
11            preponderance of the evidence, both of the
12            following:
13                    (a) the person, during the same taxable
14                year, paid, accrued, or incurred, the interest
15                to a person that is not a related member, and
16                    (b) the transaction giving rise to the
17                interest expense between the taxpayer and the
18                person did not have as a principal purpose the
19                avoidance of Illinois income tax, and is paid
20                pursuant to a contract or agreement that
21                reflects an arm's-length interest rate and
22                terms; or
23                (iii) the taxpayer can establish, based on
24            clear and convincing evidence, that the interest
25            paid, accrued, or incurred relates to a contract or
26            agreement entered into at arm's-length rates and

 

 

10000SB0009sam006- 92 -LRB100 06347 HLH 26817 a

1            terms and the principal purpose for the payment is
2            not federal or Illinois tax avoidance; or
3                (iv) an item of interest paid, accrued, or
4            incurred, directly or indirectly, to a person if
5            the taxpayer establishes by clear and convincing
6            evidence that the adjustments are unreasonable; or
7            if the taxpayer and the Director agree in writing
8            to the application or use of an alternative method
9            of apportionment under Section 304(f).
10                Nothing in this subsection shall preclude the
11            Director from making any other adjustment
12            otherwise allowed under Section 404 of this Act for
13            any tax year beginning after the effective date of
14            this amendment provided such adjustment is made
15            pursuant to regulation adopted by the Department
16            and such regulations provide methods and standards
17            by which the Department will utilize its authority
18            under Section 404 of this Act;
19            (E-13) An amount equal to the amount of intangible
20        expenses and costs otherwise allowed as a deduction in
21        computing base income, and that were paid, accrued, or
22        incurred, directly or indirectly, (i) for taxable
23        years ending on or after December 31, 2004, to a
24        foreign person who would be a member of the same
25        unitary business group but for the fact that the
26        foreign person's business activity outside the United

 

 

10000SB0009sam006- 93 -LRB100 06347 HLH 26817 a

1        States is 80% or more of that person's total business
2        activity and (ii) for taxable years ending on or after
3        December 31, 2008, to a person who would be a member of
4        the same unitary business group but for the fact that
5        the person is prohibited under Section 1501(a)(27)
6        from being included in the unitary business group
7        because he or she is ordinarily required to apportion
8        business income under different subsections of Section
9        304. The addition modification required by this
10        subparagraph shall be reduced to the extent that
11        dividends were included in base income of the unitary
12        group for the same taxable year and received by the
13        taxpayer or by a member of the taxpayer's unitary
14        business group (including amounts included in gross
15        income pursuant to Sections 951 through 964 of the
16        Internal Revenue Code and amounts included in gross
17        income under Section 78 of the Internal Revenue Code)
18        with respect to the stock of the same person to whom
19        the intangible expenses and costs were directly or
20        indirectly paid, incurred, or accrued. The preceding
21        sentence shall not apply to the extent that the same
22        dividends caused a reduction to the addition
23        modification required under Section 203(b)(2)(E-12) of
24        this Act. As used in this subparagraph, the term
25        "intangible expenses and costs" includes (1) expenses,
26        losses, and costs for, or related to, the direct or

 

 

10000SB0009sam006- 94 -LRB100 06347 HLH 26817 a

1        indirect acquisition, use, maintenance or management,
2        ownership, sale, exchange, or any other disposition of
3        intangible property; (2) losses incurred, directly or
4        indirectly, from factoring transactions or discounting
5        transactions; (3) royalty, patent, technical, and
6        copyright fees; (4) licensing fees; and (5) other
7        similar expenses and costs. For purposes of this
8        subparagraph, "intangible property" includes patents,
9        patent applications, trade names, trademarks, service
10        marks, copyrights, mask works, trade secrets, and
11        similar types of intangible assets.
12            This paragraph shall not apply to the following:
13                (i) any item of intangible expenses or costs
14            paid, accrued, or incurred, directly or
15            indirectly, from a transaction with a person who is
16            subject in a foreign country or state, other than a
17            state which requires mandatory unitary reporting,
18            to a tax on or measured by net income with respect
19            to such item; or
20                (ii) any item of intangible expense or cost
21            paid, accrued, or incurred, directly or
22            indirectly, if the taxpayer can establish, based
23            on a preponderance of the evidence, both of the
24            following:
25                    (a) the person during the same taxable
26                year paid, accrued, or incurred, the

 

 

10000SB0009sam006- 95 -LRB100 06347 HLH 26817 a

1                intangible expense or cost to a person that is
2                not a related member, and
3                    (b) the transaction giving rise to the
4                intangible expense or cost between the
5                taxpayer and the person did not have as a
6                principal purpose the avoidance of Illinois
7                income tax, and is paid pursuant to a contract
8                or agreement that reflects arm's-length terms;
9                or
10                (iii) any item of intangible expense or cost
11            paid, accrued, or incurred, directly or
12            indirectly, from a transaction with a person if the
13            taxpayer establishes by clear and convincing
14            evidence, that the adjustments are unreasonable;
15            or if the taxpayer and the Director agree in
16            writing to the application or use of an alternative
17            method of apportionment under Section 304(f);
18                Nothing in this subsection shall preclude the
19            Director from making any other adjustment
20            otherwise allowed under Section 404 of this Act for
21            any tax year beginning after the effective date of
22            this amendment provided such adjustment is made
23            pursuant to regulation adopted by the Department
24            and such regulations provide methods and standards
25            by which the Department will utilize its authority
26            under Section 404 of this Act;

 

 

10000SB0009sam006- 96 -LRB100 06347 HLH 26817 a

1            (E-14) For taxable years ending on or after
2        December 31, 2008, an amount equal to the amount of
3        insurance premium expenses and costs otherwise allowed
4        as a deduction in computing base income, and that were
5        paid, accrued, or incurred, directly or indirectly, to
6        a person who would be a member of the same unitary
7        business group but for the fact that the person is
8        prohibited under Section 1501(a)(27) from being
9        included in the unitary business group because he or
10        she is ordinarily required to apportion business
11        income under different subsections of Section 304. The
12        addition modification required by this subparagraph
13        shall be reduced to the extent that dividends were
14        included in base income of the unitary group for the
15        same taxable year and received by the taxpayer or by a
16        member of the taxpayer's unitary business group
17        (including amounts included in gross income under
18        Sections 951 through 964 of the Internal Revenue Code
19        and amounts included in gross income under Section 78
20        of the Internal Revenue Code) with respect to the stock
21        of the same person to whom the premiums and costs were
22        directly or indirectly paid, incurred, or accrued. The
23        preceding sentence does not apply to the extent that
24        the same dividends caused a reduction to the addition
25        modification required under Section 203(b)(2)(E-12) or
26        Section 203(b)(2)(E-13) of this Act;

 

 

10000SB0009sam006- 97 -LRB100 06347 HLH 26817 a

1            (E-15) For taxable years beginning after December
2        31, 2008, any deduction for dividends paid by a captive
3        real estate investment trust that is allowed to a real
4        estate investment trust under Section 857(b)(2)(B) of
5        the Internal Revenue Code for dividends paid;
6            (E-16) An amount equal to the credit allowable to
7        the taxpayer under Section 218(a) of this Act,
8        determined without regard to Section 218(c) of this
9        Act;
10            (E-17) For taxable years beginning on or after
11        January 1, 2017, an amount equal to the deduction
12        allowed under Section 199 of the Internal Revenue Code
13        for the taxable year;
14    and by deducting from the total so obtained the sum of the
15    following amounts:
16            (F) An amount equal to the amount of any tax
17        imposed by this Act which was refunded to the taxpayer
18        and included in such total for the taxable year;
19            (G) An amount equal to any amount included in such
20        total under Section 78 of the Internal Revenue Code;
21            (H) In the case of a regulated investment company,
22        an amount equal to the amount of exempt interest
23        dividends as defined in subsection (b) (5) of Section
24        852 of the Internal Revenue Code, paid to shareholders
25        for the taxable year;
26            (I) With the exception of any amounts subtracted

 

 

10000SB0009sam006- 98 -LRB100 06347 HLH 26817 a

1        under subparagraph (J), an amount equal to the sum of
2        all amounts disallowed as deductions by (i) Sections
3        171(a) (2), and 265(a)(2) and amounts disallowed as
4        interest expense by Section 291(a)(3) of the Internal
5        Revenue Code, and all amounts of expenses allocable to
6        interest and disallowed as deductions by Section
7        265(a)(1) of the Internal Revenue Code; and (ii) for
8        taxable years ending on or after August 13, 1999,
9        Sections 171(a)(2), 265, 280C, 291(a)(3), and
10        832(b)(5)(B)(i) of the Internal Revenue Code, plus,
11        for tax years ending on or after December 31, 2011,
12        amounts disallowed as deductions by Section 45G(e)(3)
13        of the Internal Revenue Code and, for taxable years
14        ending on or after December 31, 2008, any amount
15        included in gross income under Section 87 of the
16        Internal Revenue Code and the policyholders' share of
17        tax-exempt interest of a life insurance company under
18        Section 807(a)(2)(B) of the Internal Revenue Code (in
19        the case of a life insurance company with gross income
20        from a decrease in reserves for the tax year) or
21        Section 807(b)(1)(B) of the Internal Revenue Code (in
22        the case of a life insurance company allowed a
23        deduction for an increase in reserves for the tax
24        year); the provisions of this subparagraph are exempt
25        from the provisions of Section 250;
26            (J) An amount equal to all amounts included in such

 

 

10000SB0009sam006- 99 -LRB100 06347 HLH 26817 a

1        total which are exempt from taxation by this State
2        either by reason of its statutes or Constitution or by
3        reason of the Constitution, treaties or statutes of the
4        United States; provided that, in the case of any
5        statute of this State that exempts income derived from
6        bonds or other obligations from the tax imposed under
7        this Act, the amount exempted shall be the interest net
8        of bond premium amortization;
9            (K) An amount equal to those dividends included in
10        such total which were paid by a corporation which
11        conducts business operations in a River Edge
12        Redevelopment Zone or zones created under the River
13        Edge Redevelopment Zone Act and conducts substantially
14        all of its operations in a River Edge Redevelopment
15        Zone or zones. This subparagraph (K) is exempt from the
16        provisions of Section 250;
17            (L) An amount equal to those dividends included in
18        such total that were paid by a corporation that
19        conducts business operations in a federally designated
20        Foreign Trade Zone or Sub-Zone and that is designated a
21        High Impact Business located in Illinois; provided
22        that dividends eligible for the deduction provided in
23        subparagraph (K) of paragraph 2 of this subsection
24        shall not be eligible for the deduction provided under
25        this subparagraph (L);
26            (M) For any taxpayer that is a financial

 

 

10000SB0009sam006- 100 -LRB100 06347 HLH 26817 a

1        organization within the meaning of Section 304(c) of
2        this Act, an amount included in such total as interest
3        income from a loan or loans made by such taxpayer to a
4        borrower, to the extent that such a loan is secured by
5        property which is eligible for the River Edge
6        Redevelopment Zone Investment Credit. To determine the
7        portion of a loan or loans that is secured by property
8        eligible for a Section 201(f) investment credit to the
9        borrower, the entire principal amount of the loan or
10        loans between the taxpayer and the borrower should be
11        divided into the basis of the Section 201(f) investment
12        credit property which secures the loan or loans, using
13        for this purpose the original basis of such property on
14        the date that it was placed in service in the River
15        Edge Redevelopment Zone. The subtraction modification
16        available to taxpayer in any year under this subsection
17        shall be that portion of the total interest paid by the
18        borrower with respect to such loan attributable to the
19        eligible property as calculated under the previous
20        sentence. This subparagraph (M) is exempt from the
21        provisions of Section 250;
22            (M-1) For any taxpayer that is a financial
23        organization within the meaning of Section 304(c) of
24        this Act, an amount included in such total as interest
25        income from a loan or loans made by such taxpayer to a
26        borrower, to the extent that such a loan is secured by

 

 

10000SB0009sam006- 101 -LRB100 06347 HLH 26817 a

1        property which is eligible for the High Impact Business
2        Investment Credit. To determine the portion of a loan
3        or loans that is secured by property eligible for a
4        Section 201(h) investment credit to the borrower, the
5        entire principal amount of the loan or loans between
6        the taxpayer and the borrower should be divided into
7        the basis of the Section 201(h) investment credit
8        property which secures the loan or loans, using for
9        this purpose the original basis of such property on the
10        date that it was placed in service in a federally
11        designated Foreign Trade Zone or Sub-Zone located in
12        Illinois. No taxpayer that is eligible for the
13        deduction provided in subparagraph (M) of paragraph
14        (2) of this subsection shall be eligible for the
15        deduction provided under this subparagraph (M-1). The
16        subtraction modification available to taxpayers in any
17        year under this subsection shall be that portion of the
18        total interest paid by the borrower with respect to
19        such loan attributable to the eligible property as
20        calculated under the previous sentence;
21            (N) Two times any contribution made during the
22        taxable year to a designated zone organization to the
23        extent that the contribution (i) qualifies as a
24        charitable contribution under subsection (c) of
25        Section 170 of the Internal Revenue Code and (ii) must,
26        by its terms, be used for a project approved by the

 

 

10000SB0009sam006- 102 -LRB100 06347 HLH 26817 a

1        Department of Commerce and Economic Opportunity under
2        Section 11 of the Illinois Enterprise Zone Act or under
3        Section 10-10 of the River Edge Redevelopment Zone Act.
4        This subparagraph (N) is exempt from the provisions of
5        Section 250;
6            (O) An amount equal to: (i) 85% for taxable years
7        ending on or before December 31, 1992, or, a percentage
8        equal to the percentage allowable under Section
9        243(a)(1) of the Internal Revenue Code of 1986 for
10        taxable years ending after December 31, 1992, of the
11        amount by which dividends included in taxable income
12        and received from a corporation that is not created or
13        organized under the laws of the United States or any
14        state or political subdivision thereof, including, for
15        taxable years ending on or after December 31, 1988,
16        dividends received or deemed received or paid or deemed
17        paid under Sections 951 through 965 of the Internal
18        Revenue Code, exceed the amount of the modification
19        provided under subparagraph (G) of paragraph (2) of
20        this subsection (b) which is related to such dividends,
21        and including, for taxable years ending on or after
22        December 31, 2008, dividends received from a captive
23        real estate investment trust; plus (ii) 100% of the
24        amount by which dividends, included in taxable income
25        and received, including, for taxable years ending on or
26        after December 31, 1988, dividends received or deemed

 

 

10000SB0009sam006- 103 -LRB100 06347 HLH 26817 a

1        received or paid or deemed paid under Sections 951
2        through 964 of the Internal Revenue Code and including,
3        for taxable years ending on or after December 31, 2008,
4        dividends received from a captive real estate
5        investment trust, from any such corporation specified
6        in clause (i) that would but for the provisions of
7        Section 1504 (b) (3) of the Internal Revenue Code be
8        treated as a member of the affiliated group which
9        includes the dividend recipient, exceed the amount of
10        the modification provided under subparagraph (G) of
11        paragraph (2) of this subsection (b) which is related
12        to such dividends. This subparagraph (O) is exempt from
13        the provisions of Section 250 of this Act;
14            (P) An amount equal to any contribution made to a
15        job training project established pursuant to the Tax
16        Increment Allocation Redevelopment Act;
17            (Q) An amount equal to the amount of the deduction
18        used to compute the federal income tax credit for
19        restoration of substantial amounts held under claim of
20        right for the taxable year pursuant to Section 1341 of
21        the Internal Revenue Code;
22            (R) On and after July 20, 1999, in the case of an
23        attorney-in-fact with respect to whom an interinsurer
24        or a reciprocal insurer has made the election under
25        Section 835 of the Internal Revenue Code, 26 U.S.C.
26        835, an amount equal to the excess, if any, of the

 

 

10000SB0009sam006- 104 -LRB100 06347 HLH 26817 a

1        amounts paid or incurred by that interinsurer or
2        reciprocal insurer in the taxable year to the
3        attorney-in-fact over the deduction allowed to that
4        interinsurer or reciprocal insurer with respect to the
5        attorney-in-fact under Section 835(b) of the Internal
6        Revenue Code for the taxable year; the provisions of
7        this subparagraph are exempt from the provisions of
8        Section 250;
9            (S) For taxable years ending on or after December
10        31, 1997, in the case of a Subchapter S corporation, an
11        amount equal to all amounts of income allocable to a
12        shareholder subject to the Personal Property Tax
13        Replacement Income Tax imposed by subsections (c) and
14        (d) of Section 201 of this Act, including amounts
15        allocable to organizations exempt from federal income
16        tax by reason of Section 501(a) of the Internal Revenue
17        Code. This subparagraph (S) is exempt from the
18        provisions of Section 250;
19            (T) For taxable years 2001 and thereafter, for the
20        taxable year in which the bonus depreciation deduction
21        is taken on the taxpayer's federal income tax return
22        under subsection (k) of Section 168 of the Internal
23        Revenue Code and for each applicable taxable year
24        thereafter, an amount equal to "x", where:
25                (1) "y" equals the amount of the depreciation
26            deduction taken for the taxable year on the

 

 

10000SB0009sam006- 105 -LRB100 06347 HLH 26817 a

1            taxpayer's federal income tax return on property
2            for which the bonus depreciation deduction was
3            taken in any year under subsection (k) of Section
4            168 of the Internal Revenue Code, but not including
5            the bonus depreciation deduction;
6                (2) for taxable years ending on or before
7            December 31, 2005, "x" equals "y" multiplied by 30
8            and then divided by 70 (or "y" multiplied by
9            0.429); and
10                (3) for taxable years ending after December
11            31, 2005:
12                    (i) for property on which a bonus
13                depreciation deduction of 30% of the adjusted
14                basis was taken, "x" equals "y" multiplied by
15                30 and then divided by 70 (or "y" multiplied by
16                0.429); and
17                    (ii) for property on which a bonus
18                depreciation deduction of 50% of the adjusted
19                basis was taken, "x" equals "y" multiplied by
20                1.0.
21            The aggregate amount deducted under this
22        subparagraph in all taxable years for any one piece of
23        property may not exceed the amount of the bonus
24        depreciation deduction taken on that property on the
25        taxpayer's federal income tax return under subsection
26        (k) of Section 168 of the Internal Revenue Code. This

 

 

10000SB0009sam006- 106 -LRB100 06347 HLH 26817 a

1        subparagraph (T) is exempt from the provisions of
2        Section 250;
3            (U) If the taxpayer sells, transfers, abandons, or
4        otherwise disposes of property for which the taxpayer
5        was required in any taxable year to make an addition
6        modification under subparagraph (E-10), then an amount
7        equal to that addition modification.
8            If the taxpayer continues to own property through
9        the last day of the last tax year for which the
10        taxpayer may claim a depreciation deduction for
11        federal income tax purposes and for which the taxpayer
12        was required in any taxable year to make an addition
13        modification under subparagraph (E-10), then an amount
14        equal to that addition modification.
15            The taxpayer is allowed to take the deduction under
16        this subparagraph only once with respect to any one
17        piece of property.
18            This subparagraph (U) is exempt from the
19        provisions of Section 250;
20            (V) The amount of: (i) any interest income (net of
21        the deductions allocable thereto) taken into account
22        for the taxable year with respect to a transaction with
23        a taxpayer that is required to make an addition
24        modification with respect to such transaction under
25        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
26        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed

 

 

10000SB0009sam006- 107 -LRB100 06347 HLH 26817 a

1        the amount of such addition modification, (ii) any
2        income from intangible property (net of the deductions
3        allocable thereto) taken into account for the taxable
4        year with respect to a transaction with a taxpayer that
5        is required to make an addition modification with
6        respect to such transaction under Section
7        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
8        203(d)(2)(D-8), but not to exceed the amount of such
9        addition modification, and (iii) any insurance premium
10        income (net of deductions allocable thereto) taken
11        into account for the taxable year with respect to a
12        transaction with a taxpayer that is required to make an
13        addition modification with respect to such transaction
14        under Section 203(a)(2)(D-19), Section
15        203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
16        203(d)(2)(D-9), but not to exceed the amount of that
17        addition modification. This subparagraph (V) is exempt
18        from the provisions of Section 250;
19            (W) An amount equal to the interest income taken
20        into account for the taxable year (net of the
21        deductions allocable thereto) with respect to
22        transactions with (i) a foreign person who would be a
23        member of the taxpayer's unitary business group but for
24        the fact that the foreign person's business activity
25        outside the United States is 80% or more of that
26        person's total business activity and (ii) for taxable

 

 

10000SB0009sam006- 108 -LRB100 06347 HLH 26817 a

1        years ending on or after December 31, 2008, to a person
2        who would be a member of the same unitary business
3        group but for the fact that the person is prohibited
4        under Section 1501(a)(27) from being included in the
5        unitary business group because he or she is ordinarily
6        required to apportion business income under different
7        subsections of Section 304, but not to exceed the
8        addition modification required to be made for the same
9        taxable year under Section 203(b)(2)(E-12) for
10        interest paid, accrued, or incurred, directly or
11        indirectly, to the same person. This subparagraph (W)
12        is exempt from the provisions of Section 250;
13            (X) An amount equal to the income from intangible
14        property taken into account for the taxable year (net
15        of the deductions allocable thereto) with respect to
16        transactions with (i) a foreign person who would be a
17        member of the taxpayer's unitary business group but for
18        the fact that the foreign person's business activity
19        outside the United States is 80% or more of that
20        person's total business activity and (ii) for taxable
21        years ending on or after December 31, 2008, to a person
22        who would be a member of the same unitary business
23        group but for the fact that the person is prohibited
24        under Section 1501(a)(27) from being included in the
25        unitary business group because he or she is ordinarily
26        required to apportion business income under different

 

 

10000SB0009sam006- 109 -LRB100 06347 HLH 26817 a

1        subsections of Section 304, but not to exceed the
2        addition modification required to be made for the same
3        taxable year under Section 203(b)(2)(E-13) for
4        intangible expenses and costs paid, accrued, or
5        incurred, directly or indirectly, to the same foreign
6        person. This subparagraph (X) is exempt from the
7        provisions of Section 250;
8            (Y) For taxable years ending on or after December
9        31, 2011, in the case of a taxpayer who was required to
10        add back any insurance premiums under Section
11        203(b)(2)(E-14), such taxpayer may elect to subtract
12        that part of a reimbursement received from the
13        insurance company equal to the amount of the expense or
14        loss (including expenses incurred by the insurance
15        company) that would have been taken into account as a
16        deduction for federal income tax purposes if the
17        expense or loss had been uninsured. If a taxpayer makes
18        the election provided for by this subparagraph (Y), the
19        insurer to which the premiums were paid must add back
20        to income the amount subtracted by the taxpayer
21        pursuant to this subparagraph (Y). This subparagraph
22        (Y) is exempt from the provisions of Section 250; and
23            (Z) The difference between the nondeductible
24        controlled foreign corporation dividends under Section
25        965(e)(3) of the Internal Revenue Code over the taxable
26        income of the taxpayer, computed without regard to

 

 

10000SB0009sam006- 110 -LRB100 06347 HLH 26817 a

1        Section 965(e)(2)(A) of the Internal Revenue Code, and
2        without regard to any net operating loss deduction.
3        This subparagraph (Z) is exempt from the provisions of
4        Section 250.
5        (3) Special rule. For purposes of paragraph (2) (A),
6    "gross income" in the case of a life insurance company, for
7    tax years ending on and after December 31, 1994, and prior
8    to December 31, 2011, shall mean the gross investment
9    income for the taxable year and, for tax years ending on or
10    after December 31, 2011, shall mean all amounts included in
11    life insurance gross income under Section 803(a)(3) of the
12    Internal Revenue Code.
 
13    (c) Trusts and estates.
14        (1) In general. In the case of a trust or estate, base
15    income means an amount equal to the taxpayer's taxable
16    income for the taxable year as modified by paragraph (2).
17        (2) Modifications. Subject to the provisions of
18    paragraph (3), the taxable income referred to in paragraph
19    (1) shall be modified by adding thereto the sum of the
20    following amounts:
21            (A) An amount equal to all amounts paid or accrued
22        to the taxpayer as interest or dividends during the
23        taxable year to the extent excluded from gross income
24        in the computation of taxable income;
25            (B) In the case of (i) an estate, $600; (ii) a

 

 

10000SB0009sam006- 111 -LRB100 06347 HLH 26817 a

1        trust which, under its governing instrument, is
2        required to distribute all of its income currently,
3        $300; and (iii) any other trust, $100, but in each such
4        case, only to the extent such amount was deducted in
5        the computation of taxable income;
6            (C) An amount equal to the amount of tax imposed by
7        this Act to the extent deducted from gross income in
8        the computation of taxable income for the taxable year;
9            (D) The amount of any net operating loss deduction
10        taken in arriving at taxable income, other than a net
11        operating loss carried forward from a taxable year
12        ending prior to December 31, 1986;
13            (E) For taxable years in which a net operating loss
14        carryback or carryforward from a taxable year ending
15        prior to December 31, 1986 is an element of taxable
16        income under paragraph (1) of subsection (e) or
17        subparagraph (E) of paragraph (2) of subsection (e),
18        the amount by which addition modifications other than
19        those provided by this subparagraph (E) exceeded
20        subtraction modifications in such taxable year, with
21        the following limitations applied in the order that
22        they are listed:
23                (i) the addition modification relating to the
24            net operating loss carried back or forward to the
25            taxable year from any taxable year ending prior to
26            December 31, 1986 shall be reduced by the amount of

 

 

10000SB0009sam006- 112 -LRB100 06347 HLH 26817 a

1            addition modification under this subparagraph (E)
2            which related to that net operating loss and which
3            was taken into account in calculating the base
4            income of an earlier taxable year, and
5                (ii) the addition modification relating to the
6            net operating loss carried back or forward to the
7            taxable year from any taxable year ending prior to
8            December 31, 1986 shall not exceed the amount of
9            such carryback or carryforward;
10            For taxable years in which there is a net operating
11        loss carryback or carryforward from more than one other
12        taxable year ending prior to December 31, 1986, the
13        addition modification provided in this subparagraph
14        (E) shall be the sum of the amounts computed
15        independently under the preceding provisions of this
16        subparagraph (E) for each such taxable year;
17            (F) For taxable years ending on or after January 1,
18        1989, an amount equal to the tax deducted pursuant to
19        Section 164 of the Internal Revenue Code if the trust
20        or estate is claiming the same tax for purposes of the
21        Illinois foreign tax credit under Section 601 of this
22        Act;
23            (G) An amount equal to the amount of the capital
24        gain deduction allowable under the Internal Revenue
25        Code, to the extent deducted from gross income in the
26        computation of taxable income;

 

 

10000SB0009sam006- 113 -LRB100 06347 HLH 26817 a

1            (G-5) For taxable years ending after December 31,
2        1997, an amount equal to any eligible remediation costs
3        that the trust or estate deducted in computing adjusted
4        gross income and for which the trust or estate claims a
5        credit under subsection (l) of Section 201;
6            (G-10) For taxable years 2001 and thereafter, an
7        amount equal to the bonus depreciation deduction taken
8        on the taxpayer's federal income tax return for the
9        taxable year under subsection (k) of Section 168 of the
10        Internal Revenue Code; and
11            (G-11) If the taxpayer sells, transfers, abandons,
12        or otherwise disposes of property for which the
13        taxpayer was required in any taxable year to make an
14        addition modification under subparagraph (G-10), then
15        an amount equal to the aggregate amount of the
16        deductions taken in all taxable years under
17        subparagraph (R) with respect to that property.
18            If the taxpayer continues to own property through
19        the last day of the last tax year for which the
20        taxpayer may claim a depreciation deduction for
21        federal income tax purposes and for which the taxpayer
22        was allowed in any taxable year to make a subtraction
23        modification under subparagraph (R), then an amount
24        equal to that subtraction modification.
25            The taxpayer is required to make the addition
26        modification under this subparagraph only once with

 

 

10000SB0009sam006- 114 -LRB100 06347 HLH 26817 a

1        respect to any one piece of property;
2            (G-12) An amount equal to the amount otherwise
3        allowed as a deduction in computing base income for
4        interest paid, accrued, or incurred, directly or
5        indirectly, (i) for taxable years ending on or after
6        December 31, 2004, to a foreign person who would be a
7        member of the same unitary business group but for the
8        fact that the foreign person's business activity
9        outside the United States is 80% or more of the foreign
10        person's total business activity and (ii) for taxable
11        years ending on or after December 31, 2008, to a person
12        who would be a member of the same unitary business
13        group but for the fact that the person is prohibited
14        under Section 1501(a)(27) from being included in the
15        unitary business group because he or she is ordinarily
16        required to apportion business income under different
17        subsections of Section 304. The addition modification
18        required by this subparagraph shall be reduced to the
19        extent that dividends were included in base income of
20        the unitary group for the same taxable year and
21        received by the taxpayer or by a member of the
22        taxpayer's unitary business group (including amounts
23        included in gross income pursuant to Sections 951
24        through 964 of the Internal Revenue Code and amounts
25        included in gross income under Section 78 of the
26        Internal Revenue Code) with respect to the stock of the

 

 

10000SB0009sam006- 115 -LRB100 06347 HLH 26817 a

1        same person to whom the interest was paid, accrued, or
2        incurred.
3            This paragraph shall not apply to the following:
4                (i) an item of interest paid, accrued, or
5            incurred, directly or indirectly, to a person who
6            is subject in a foreign country or state, other
7            than a state which requires mandatory unitary
8            reporting, to a tax on or measured by net income
9            with respect to such interest; or
10                (ii) an item of interest paid, accrued, or
11            incurred, directly or indirectly, to a person if
12            the taxpayer can establish, based on a
13            preponderance of the evidence, both of the
14            following:
15                    (a) the person, during the same taxable
16                year, paid, accrued, or incurred, the interest
17                to a person that is not a related member, and
18                    (b) the transaction giving rise to the
19                interest expense between the taxpayer and the
20                person did not have as a principal purpose the
21                avoidance of Illinois income tax, and is paid
22                pursuant to a contract or agreement that
23                reflects an arm's-length interest rate and
24                terms; or
25                (iii) the taxpayer can establish, based on
26            clear and convincing evidence, that the interest

 

 

10000SB0009sam006- 116 -LRB100 06347 HLH 26817 a

1            paid, accrued, or incurred relates to a contract or
2            agreement entered into at arm's-length rates and
3            terms and the principal purpose for the payment is
4            not federal or Illinois tax avoidance; or
5                (iv) an item of interest paid, accrued, or
6            incurred, directly or indirectly, to a person if
7            the taxpayer establishes by clear and convincing
8            evidence that the adjustments are unreasonable; or
9            if the taxpayer and the Director agree in writing
10            to the application or use of an alternative method
11            of apportionment under Section 304(f).
12                Nothing in this subsection shall preclude the
13            Director from making any other adjustment
14            otherwise allowed under Section 404 of this Act for
15            any tax year beginning after the effective date of
16            this amendment provided such adjustment is made
17            pursuant to regulation adopted by the Department
18            and such regulations provide methods and standards
19            by which the Department will utilize its authority
20            under Section 404 of this Act;
21            (G-13) An amount equal to the amount of intangible
22        expenses and costs otherwise allowed as a deduction in
23        computing base income, and that were paid, accrued, or
24        incurred, directly or indirectly, (i) for taxable
25        years ending on or after December 31, 2004, to a
26        foreign person who would be a member of the same

 

 

10000SB0009sam006- 117 -LRB100 06347 HLH 26817 a

1        unitary business group but for the fact that the
2        foreign person's business activity outside the United
3        States is 80% or more of that person's total business
4        activity and (ii) for taxable years ending on or after
5        December 31, 2008, to a person who would be a member of
6        the same unitary business group but for the fact that
7        the person is prohibited under Section 1501(a)(27)
8        from being included in the unitary business group
9        because he or she is ordinarily required to apportion
10        business income under different subsections of Section
11        304. The addition modification required by this
12        subparagraph shall be reduced to the extent that
13        dividends were included in base income of the unitary
14        group for the same taxable year and received by the
15        taxpayer or by a member of the taxpayer's unitary
16        business group (including amounts included in gross
17        income pursuant to Sections 951 through 964 of the
18        Internal Revenue Code and amounts included in gross
19        income under Section 78 of the Internal Revenue Code)
20        with respect to the stock of the same person to whom
21        the intangible expenses and costs were directly or
22        indirectly paid, incurred, or accrued. The preceding
23        sentence shall not apply to the extent that the same
24        dividends caused a reduction to the addition
25        modification required under Section 203(c)(2)(G-12) of
26        this Act. As used in this subparagraph, the term

 

 

10000SB0009sam006- 118 -LRB100 06347 HLH 26817 a

1        "intangible expenses and costs" includes: (1)
2        expenses, losses, and costs for or related to the
3        direct or indirect acquisition, use, maintenance or
4        management, ownership, sale, exchange, or any other
5        disposition of intangible property; (2) losses
6        incurred, directly or indirectly, from factoring
7        transactions or discounting transactions; (3) royalty,
8        patent, technical, and copyright fees; (4) licensing
9        fees; and (5) other similar expenses and costs. For
10        purposes of this subparagraph, "intangible property"
11        includes patents, patent applications, trade names,
12        trademarks, service marks, copyrights, mask works,
13        trade secrets, and similar types of intangible assets.
14            This paragraph shall not apply to the following:
15                (i) any item of intangible expenses or costs
16            paid, accrued, or incurred, directly or
17            indirectly, from a transaction with a person who is
18            subject in a foreign country or state, other than a
19            state which requires mandatory unitary reporting,
20            to a tax on or measured by net income with respect
21            to such item; or
22                (ii) any item of intangible expense or cost
23            paid, accrued, or incurred, directly or
24            indirectly, if the taxpayer can establish, based
25            on a preponderance of the evidence, both of the
26            following:

 

 

10000SB0009sam006- 119 -LRB100 06347 HLH 26817 a

1                    (a) the person during the same taxable
2                year paid, accrued, or incurred, the
3                intangible expense or cost to a person that is
4                not a related member, and
5                    (b) the transaction giving rise to the
6                intangible expense or cost between the
7                taxpayer and the person did not have as a
8                principal purpose the avoidance of Illinois
9                income tax, and is paid pursuant to a contract
10                or agreement that reflects arm's-length terms;
11                or
12                (iii) any item of intangible expense or cost
13            paid, accrued, or incurred, directly or
14            indirectly, from a transaction with a person if the
15            taxpayer establishes by clear and convincing
16            evidence, that the adjustments are unreasonable;
17            or if the taxpayer and the Director agree in
18            writing to the application or use of an alternative
19            method of apportionment under Section 304(f);
20                Nothing in this subsection shall preclude the
21            Director from making any other adjustment
22            otherwise allowed under Section 404 of this Act for
23            any tax year beginning after the effective date of
24            this amendment provided such adjustment is made
25            pursuant to regulation adopted by the Department
26            and such regulations provide methods and standards

 

 

10000SB0009sam006- 120 -LRB100 06347 HLH 26817 a

1            by which the Department will utilize its authority
2            under Section 404 of this Act;
3            (G-14) For taxable years ending on or after
4        December 31, 2008, an amount equal to the amount of
5        insurance premium expenses and costs otherwise allowed
6        as a deduction in computing base income, and that were
7        paid, accrued, or incurred, directly or indirectly, to
8        a person who would be a member of the same unitary
9        business group but for the fact that the person is
10        prohibited under Section 1501(a)(27) from being
11        included in the unitary business group because he or
12        she is ordinarily required to apportion business
13        income under different subsections of Section 304. The
14        addition modification required by this subparagraph
15        shall be reduced to the extent that dividends were
16        included in base income of the unitary group for the
17        same taxable year and received by the taxpayer or by a
18        member of the taxpayer's unitary business group
19        (including amounts included in gross income under
20        Sections 951 through 964 of the Internal Revenue Code
21        and amounts included in gross income under Section 78
22        of the Internal Revenue Code) with respect to the stock
23        of the same person to whom the premiums and costs were
24        directly or indirectly paid, incurred, or accrued. The
25        preceding sentence does not apply to the extent that
26        the same dividends caused a reduction to the addition

 

 

10000SB0009sam006- 121 -LRB100 06347 HLH 26817 a

1        modification required under Section 203(c)(2)(G-12) or
2        Section 203(c)(2)(G-13) of this Act;
3            (G-15) An amount equal to the credit allowable to
4        the taxpayer under Section 218(a) of this Act,
5        determined without regard to Section 218(c) of this
6        Act;
7            (G-16) For taxable years beginning on or after
8        January 1, 2017, an amount equal to the deduction
9        allowed under Section 199 of the Internal Revenue Code
10        for the taxable year;
11    and by deducting from the total so obtained the sum of the
12    following amounts:
13            (H) An amount equal to all amounts included in such
14        total pursuant to the provisions of Sections 402(a),
15        402(c), 403(a), 403(b), 406(a), 407(a) and 408 of the
16        Internal Revenue Code or included in such total as
17        distributions under the provisions of any retirement
18        or disability plan for employees of any governmental
19        agency or unit, or retirement payments to retired
20        partners, which payments are excluded in computing net
21        earnings from self employment by Section 1402 of the
22        Internal Revenue Code and regulations adopted pursuant
23        thereto;
24            (I) The valuation limitation amount;
25            (J) An amount equal to the amount of any tax
26        imposed by this Act which was refunded to the taxpayer

 

 

10000SB0009sam006- 122 -LRB100 06347 HLH 26817 a

1        and included in such total for the taxable year;
2            (K) An amount equal to all amounts included in
3        taxable income as modified by subparagraphs (A), (B),
4        (C), (D), (E), (F) and (G) which are exempt from
5        taxation by this State either by reason of its statutes
6        or Constitution or by reason of the Constitution,
7        treaties or statutes of the United States; provided
8        that, in the case of any statute of this State that
9        exempts income derived from bonds or other obligations
10        from the tax imposed under this Act, the amount
11        exempted shall be the interest net of bond premium
12        amortization;
13            (L) With the exception of any amounts subtracted
14        under subparagraph (K), an amount equal to the sum of
15        all amounts disallowed as deductions by (i) Sections
16        171(a) (2) and 265(a)(2) of the Internal Revenue Code,
17        and all amounts of expenses allocable to interest and
18        disallowed as deductions by Section 265(1) of the
19        Internal Revenue Code; and (ii) for taxable years
20        ending on or after August 13, 1999, Sections 171(a)(2),
21        265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue
22        Code, plus, (iii) for taxable years ending on or after
23        December 31, 2011, Section 45G(e)(3) of the Internal
24        Revenue Code and, for taxable years ending on or after
25        December 31, 2008, any amount included in gross income
26        under Section 87 of the Internal Revenue Code; the

 

 

10000SB0009sam006- 123 -LRB100 06347 HLH 26817 a

1        provisions of this subparagraph are exempt from the
2        provisions of Section 250;
3            (M) An amount equal to those dividends included in
4        such total which were paid by a corporation which
5        conducts business operations in a River Edge
6        Redevelopment Zone or zones created under the River
7        Edge Redevelopment Zone Act and conducts substantially
8        all of its operations in a River Edge Redevelopment
9        Zone or zones. This subparagraph (M) is exempt from the
10        provisions of Section 250;
11            (N) An amount equal to any contribution made to a
12        job training project established pursuant to the Tax
13        Increment Allocation Redevelopment Act;
14            (O) An amount equal to those dividends included in
15        such total that were paid by a corporation that
16        conducts business operations in a federally designated
17        Foreign Trade Zone or Sub-Zone and that is designated a
18        High Impact Business located in Illinois; provided
19        that dividends eligible for the deduction provided in
20        subparagraph (M) of paragraph (2) of this subsection
21        shall not be eligible for the deduction provided under
22        this subparagraph (O);
23            (P) An amount equal to the amount of the deduction
24        used to compute the federal income tax credit for
25        restoration of substantial amounts held under claim of
26        right for the taxable year pursuant to Section 1341 of

 

 

10000SB0009sam006- 124 -LRB100 06347 HLH 26817 a

1        the Internal Revenue Code;
2            (Q) For taxable year 1999 and thereafter, an amount
3        equal to the amount of any (i) distributions, to the
4        extent includible in gross income for federal income
5        tax purposes, made to the taxpayer because of his or
6        her status as a victim of persecution for racial or
7        religious reasons by Nazi Germany or any other Axis
8        regime or as an heir of the victim and (ii) items of
9        income, to the extent includible in gross income for
10        federal income tax purposes, attributable to, derived
11        from or in any way related to assets stolen from,
12        hidden from, or otherwise lost to a victim of
13        persecution for racial or religious reasons by Nazi
14        Germany or any other Axis regime immediately prior to,
15        during, and immediately after World War II, including,
16        but not limited to, interest on the proceeds receivable
17        as insurance under policies issued to a victim of
18        persecution for racial or religious reasons by Nazi
19        Germany or any other Axis regime by European insurance
20        companies immediately prior to and during World War II;
21        provided, however, this subtraction from federal
22        adjusted gross income does not apply to assets acquired
23        with such assets or with the proceeds from the sale of
24        such assets; provided, further, this paragraph shall
25        only apply to a taxpayer who was the first recipient of
26        such assets after their recovery and who is a victim of

 

 

10000SB0009sam006- 125 -LRB100 06347 HLH 26817 a

1        persecution for racial or religious reasons by Nazi
2        Germany or any other Axis regime or as an heir of the
3        victim. The amount of and the eligibility for any
4        public assistance, benefit, or similar entitlement is
5        not affected by the inclusion of items (i) and (ii) of
6        this paragraph in gross income for federal income tax
7        purposes. This paragraph is exempt from the provisions
8        of Section 250;
9            (R) For taxable years 2001 and thereafter, for the
10        taxable year in which the bonus depreciation deduction
11        is taken on the taxpayer's federal income tax return
12        under subsection (k) of Section 168 of the Internal
13        Revenue Code and for each applicable taxable year
14        thereafter, an amount equal to "x", where:
15                (1) "y" equals the amount of the depreciation
16            deduction taken for the taxable year on the
17            taxpayer's federal income tax return on property
18            for which the bonus depreciation deduction was
19            taken in any year under subsection (k) of Section
20            168 of the Internal Revenue Code, but not including
21            the bonus depreciation deduction;
22                (2) for taxable years ending on or before
23            December 31, 2005, "x" equals "y" multiplied by 30
24            and then divided by 70 (or "y" multiplied by
25            0.429); and
26                (3) for taxable years ending after December

 

 

10000SB0009sam006- 126 -LRB100 06347 HLH 26817 a

1            31, 2005:
2                    (i) for property on which a bonus
3                depreciation deduction of 30% of the adjusted
4                basis was taken, "x" equals "y" multiplied by
5                30 and then divided by 70 (or "y" multiplied by
6                0.429); and
7                    (ii) for property on which a bonus
8                depreciation deduction of 50% of the adjusted
9                basis was taken, "x" equals "y" multiplied by
10                1.0.
11            The aggregate amount deducted under this
12        subparagraph in all taxable years for any one piece of
13        property may not exceed the amount of the bonus
14        depreciation deduction taken on that property on the
15        taxpayer's federal income tax return under subsection
16        (k) of Section 168 of the Internal Revenue Code. This
17        subparagraph (R) is exempt from the provisions of
18        Section 250;
19            (S) If the taxpayer sells, transfers, abandons, or
20        otherwise disposes of property for which the taxpayer
21        was required in any taxable year to make an addition
22        modification under subparagraph (G-10), then an amount
23        equal to that addition modification.
24            If the taxpayer continues to own property through
25        the last day of the last tax year for which the
26        taxpayer may claim a depreciation deduction for

 

 

10000SB0009sam006- 127 -LRB100 06347 HLH 26817 a

1        federal income tax purposes and for which the taxpayer
2        was required in any taxable year to make an addition
3        modification under subparagraph (G-10), then an amount
4        equal to that addition modification.
5            The taxpayer is allowed to take the deduction under
6        this subparagraph only once with respect to any one
7        piece of property.
8            This subparagraph (S) is exempt from the
9        provisions of Section 250;
10            (T) The amount of (i) any interest income (net of
11        the deductions allocable thereto) taken into account
12        for the taxable year with respect to a transaction with
13        a taxpayer that is required to make an addition
14        modification with respect to such transaction under
15        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
16        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
17        the amount of such addition modification and (ii) any
18        income from intangible property (net of the deductions
19        allocable thereto) taken into account for the taxable
20        year with respect to a transaction with a taxpayer that
21        is required to make an addition modification with
22        respect to such transaction under Section
23        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
24        203(d)(2)(D-8), but not to exceed the amount of such
25        addition modification. This subparagraph (T) is exempt
26        from the provisions of Section 250;

 

 

10000SB0009sam006- 128 -LRB100 06347 HLH 26817 a

1            (U) An amount equal to the interest income taken
2        into account for the taxable year (net of the
3        deductions allocable thereto) with respect to
4        transactions with (i) a foreign person who would be a
5        member of the taxpayer's unitary business group but for
6        the fact the foreign person's business activity
7        outside the United States is 80% or more of that
8        person's total business activity and (ii) for taxable
9        years ending on or after December 31, 2008, to a person
10        who would be a member of the same unitary business
11        group but for the fact that the person is prohibited
12        under Section 1501(a)(27) from being included in the
13        unitary business group because he or she is ordinarily
14        required to apportion business income under different
15        subsections of Section 304, but not to exceed the
16        addition modification required to be made for the same
17        taxable year under Section 203(c)(2)(G-12) for
18        interest paid, accrued, or incurred, directly or
19        indirectly, to the same person. This subparagraph (U)
20        is exempt from the provisions of Section 250;
21            (V) An amount equal to the income from intangible
22        property taken into account for the taxable year (net
23        of the deductions allocable thereto) with respect to
24        transactions with (i) a foreign person who would be a
25        member of the taxpayer's unitary business group but for
26        the fact that the foreign person's business activity

 

 

10000SB0009sam006- 129 -LRB100 06347 HLH 26817 a

1        outside the United States is 80% or more of that
2        person's total business activity and (ii) for taxable
3        years ending on or after December 31, 2008, to a person
4        who would be a member of the same unitary business
5        group but for the fact that the person is prohibited
6        under Section 1501(a)(27) from being included in the
7        unitary business group because he or she is ordinarily
8        required to apportion business income under different
9        subsections of Section 304, but not to exceed the
10        addition modification required to be made for the same
11        taxable year under Section 203(c)(2)(G-13) for
12        intangible expenses and costs paid, accrued, or
13        incurred, directly or indirectly, to the same foreign
14        person. This subparagraph (V) is exempt from the
15        provisions of Section 250;
16            (W) in the case of an estate, an amount equal to
17        all amounts included in such total pursuant to the
18        provisions of Section 111 of the Internal Revenue Code
19        as a recovery of items previously deducted by the
20        decedent from adjusted gross income in the computation
21        of taxable income. This subparagraph (W) is exempt from
22        Section 250;
23            (X) an amount equal to the refund included in such
24        total of any tax deducted for federal income tax
25        purposes, to the extent that deduction was added back
26        under subparagraph (F). This subparagraph (X) is

 

 

10000SB0009sam006- 130 -LRB100 06347 HLH 26817 a

1        exempt from the provisions of Section 250; and
2            (Y) For taxable years ending on or after December
3        31, 2011, in the case of a taxpayer who was required to
4        add back any insurance premiums under Section
5        203(c)(2)(G-14), such taxpayer may elect to subtract
6        that part of a reimbursement received from the
7        insurance company equal to the amount of the expense or
8        loss (including expenses incurred by the insurance
9        company) that would have been taken into account as a
10        deduction for federal income tax purposes if the
11        expense or loss had been uninsured. If a taxpayer makes
12        the election provided for by this subparagraph (Y), the
13        insurer to which the premiums were paid must add back
14        to income the amount subtracted by the taxpayer
15        pursuant to this subparagraph (Y). This subparagraph
16        (Y) is exempt from the provisions of Section 250.
17        (3) Limitation. The amount of any modification
18    otherwise required under this subsection shall, under
19    regulations prescribed by the Department, be adjusted by
20    any amounts included therein which were properly paid,
21    credited, or required to be distributed, or permanently set
22    aside for charitable purposes pursuant to Internal Revenue
23    Code Section 642(c) during the taxable year.
 
24    (d) Partnerships.
25        (1) In general. In the case of a partnership, base

 

 

10000SB0009sam006- 131 -LRB100 06347 HLH 26817 a

1    income means an amount equal to the taxpayer's taxable
2    income for the taxable year as modified by paragraph (2).
3        (2) Modifications. The taxable income referred to in
4    paragraph (1) shall be modified by adding thereto the sum
5    of the following amounts:
6            (A) An amount equal to all amounts paid or accrued
7        to the taxpayer as interest or dividends during the
8        taxable year to the extent excluded from gross income
9        in the computation of taxable income;
10            (B) An amount equal to the amount of tax imposed by
11        this Act to the extent deducted from gross income for
12        the taxable year;
13            (C) The amount of deductions allowed to the
14        partnership pursuant to Section 707 (c) of the Internal
15        Revenue Code in calculating its taxable income;
16            (D) An amount equal to the amount of the capital
17        gain deduction allowable under the Internal Revenue
18        Code, to the extent deducted from gross income in the
19        computation of taxable income;
20            (D-5) For taxable years 2001 and thereafter, an
21        amount equal to the bonus depreciation deduction taken
22        on the taxpayer's federal income tax return for the
23        taxable year under subsection (k) of Section 168 of the
24        Internal Revenue Code;
25            (D-6) If the taxpayer sells, transfers, abandons,
26        or otherwise disposes of property for which the

 

 

10000SB0009sam006- 132 -LRB100 06347 HLH 26817 a

1        taxpayer was required in any taxable year to make an
2        addition modification under subparagraph (D-5), then
3        an amount equal to the aggregate amount of the
4        deductions taken in all taxable years under
5        subparagraph (O) with respect to that property.
6            If the taxpayer continues to own property through
7        the last day of the last tax year for which the
8        taxpayer may claim a depreciation deduction for
9        federal income tax purposes and for which the taxpayer
10        was allowed in any taxable year to make a subtraction
11        modification under subparagraph (O), then an amount
12        equal to that subtraction modification.
13            The taxpayer is required to make the addition
14        modification under this subparagraph only once with
15        respect to any one piece of property;
16            (D-7) An amount equal to the amount otherwise
17        allowed as a deduction in computing base income for
18        interest paid, accrued, or incurred, directly or
19        indirectly, (i) for taxable years ending on or after
20        December 31, 2004, to a foreign person who would be a
21        member of the same unitary business group but for the
22        fact the foreign person's business activity outside
23        the United States is 80% or more of the foreign
24        person's total business activity and (ii) for taxable
25        years ending on or after December 31, 2008, to a person
26        who would be a member of the same unitary business

 

 

10000SB0009sam006- 133 -LRB100 06347 HLH 26817 a

1        group but for the fact that the person is prohibited
2        under Section 1501(a)(27) from being included in the
3        unitary business group because he or she is ordinarily
4        required to apportion business income under different
5        subsections of Section 304. The addition modification
6        required by this subparagraph shall be reduced to the
7        extent that dividends were included in base income of
8        the unitary group for the same taxable year and
9        received by the taxpayer or by a member of the
10        taxpayer's unitary business group (including amounts
11        included in gross income pursuant to Sections 951
12        through 964 of the Internal Revenue Code and amounts
13        included in gross income under Section 78 of the
14        Internal Revenue Code) with respect to the stock of the
15        same person to whom the interest was paid, accrued, or
16        incurred.
17            This paragraph shall not apply to the following:
18                (i) an item of interest paid, accrued, or
19            incurred, directly or indirectly, to a person who
20            is subject in a foreign country or state, other
21            than a state which requires mandatory unitary
22            reporting, to a tax on or measured by net income
23            with respect to such interest; or
24                (ii) an item of interest paid, accrued, or
25            incurred, directly or indirectly, to a person if
26            the taxpayer can establish, based on a

 

 

10000SB0009sam006- 134 -LRB100 06347 HLH 26817 a

1            preponderance of the evidence, both of the
2            following:
3                    (a) the person, during the same taxable
4                year, paid, accrued, or incurred, the interest
5                to a person that is not a related member, and
6                    (b) the transaction giving rise to the
7                interest expense between the taxpayer and the
8                person did not have as a principal purpose the
9                avoidance of Illinois income tax, and is paid
10                pursuant to a contract or agreement that
11                reflects an arm's-length interest rate and
12                terms; or
13                (iii) the taxpayer can establish, based on
14            clear and convincing evidence, that the interest
15            paid, accrued, or incurred relates to a contract or
16            agreement entered into at arm's-length rates and
17            terms and the principal purpose for the payment is
18            not federal or Illinois tax avoidance; or
19                (iv) an item of interest paid, accrued, or
20            incurred, directly or indirectly, to a person if
21            the taxpayer establishes by clear and convincing
22            evidence that the adjustments are unreasonable; or
23            if the taxpayer and the Director agree in writing
24            to the application or use of an alternative method
25            of apportionment under Section 304(f).
26                Nothing in this subsection shall preclude the

 

 

10000SB0009sam006- 135 -LRB100 06347 HLH 26817 a

1            Director from making any other adjustment
2            otherwise allowed under Section 404 of this Act for
3            any tax year beginning after the effective date of
4            this amendment provided such adjustment is made
5            pursuant to regulation adopted by the Department
6            and such regulations provide methods and standards
7            by which the Department will utilize its authority
8            under Section 404 of this Act; and
9            (D-8) An amount equal to the amount of intangible
10        expenses and costs otherwise allowed as a deduction in
11        computing base income, and that were paid, accrued, or
12        incurred, directly or indirectly, (i) for taxable
13        years ending on or after December 31, 2004, to a
14        foreign person who would be a member of the same
15        unitary business group but for the fact that the
16        foreign person's business activity outside the United
17        States is 80% or more of that person's total business
18        activity and (ii) for taxable years ending on or after
19        December 31, 2008, to a person who would be a member of
20        the same unitary business group but for the fact that
21        the person is prohibited under Section 1501(a)(27)
22        from being included in the unitary business group
23        because he or she is ordinarily required to apportion
24        business income under different subsections of Section
25        304. The addition modification required by this
26        subparagraph shall be reduced to the extent that

 

 

10000SB0009sam006- 136 -LRB100 06347 HLH 26817 a

1        dividends were included in base income of the unitary
2        group for the same taxable year and received by the
3        taxpayer or by a member of the taxpayer's unitary
4        business group (including amounts included in gross
5        income pursuant to Sections 951 through 964 of the
6        Internal Revenue Code and amounts included in gross
7        income under Section 78 of the Internal Revenue Code)
8        with respect to the stock of the same person to whom
9        the intangible expenses and costs were directly or
10        indirectly paid, incurred or accrued. The preceding
11        sentence shall not apply to the extent that the same
12        dividends caused a reduction to the addition
13        modification required under Section 203(d)(2)(D-7) of
14        this Act. As used in this subparagraph, the term
15        "intangible expenses and costs" includes (1) expenses,
16        losses, and costs for, or related to, the direct or
17        indirect acquisition, use, maintenance or management,
18        ownership, sale, exchange, or any other disposition of
19        intangible property; (2) losses incurred, directly or
20        indirectly, from factoring transactions or discounting
21        transactions; (3) royalty, patent, technical, and
22        copyright fees; (4) licensing fees; and (5) other
23        similar expenses and costs. For purposes of this
24        subparagraph, "intangible property" includes patents,
25        patent applications, trade names, trademarks, service
26        marks, copyrights, mask works, trade secrets, and

 

 

10000SB0009sam006- 137 -LRB100 06347 HLH 26817 a

1        similar types of intangible assets;
2            This paragraph shall not apply to the following:
3                (i) any item of intangible expenses or costs
4            paid, accrued, or incurred, directly or
5            indirectly, from a transaction with a person who is
6            subject in a foreign country or state, other than a
7            state which requires mandatory unitary reporting,
8            to a tax on or measured by net income with respect
9            to such item; or
10                (ii) any item of intangible expense or cost
11            paid, accrued, or incurred, directly or
12            indirectly, if the taxpayer can establish, based
13            on a preponderance of the evidence, both of the
14            following:
15                    (a) the person during the same taxable
16                year paid, accrued, or incurred, the
17                intangible expense or cost to a person that is
18                not a related member, and
19                    (b) the transaction giving rise to the
20                intangible expense or cost between the
21                taxpayer and the person did not have as a
22                principal purpose the avoidance of Illinois
23                income tax, and is paid pursuant to a contract
24                or agreement that reflects arm's-length terms;
25                or
26                (iii) any item of intangible expense or cost

 

 

10000SB0009sam006- 138 -LRB100 06347 HLH 26817 a

1            paid, accrued, or incurred, directly or
2            indirectly, from a transaction with a person if the
3            taxpayer establishes by clear and convincing
4            evidence, that the adjustments are unreasonable;
5            or if the taxpayer and the Director agree in
6            writing to the application or use of an alternative
7            method of apportionment under Section 304(f);
8                Nothing in this subsection shall preclude the
9            Director from making any other adjustment
10            otherwise allowed under Section 404 of this Act for
11            any tax year beginning after the effective date of
12            this amendment provided such adjustment is made
13            pursuant to regulation adopted by the Department
14            and such regulations provide methods and standards
15            by which the Department will utilize its authority
16            under Section 404 of this Act;
17            (D-9) For taxable years ending on or after December
18        31, 2008, an amount equal to the amount of insurance
19        premium expenses and costs otherwise allowed as a
20        deduction in computing base income, and that were paid,
21        accrued, or incurred, directly or indirectly, to a
22        person who would be a member of the same unitary
23        business group but for the fact that the person is
24        prohibited under Section 1501(a)(27) from being
25        included in the unitary business group because he or
26        she is ordinarily required to apportion business

 

 

10000SB0009sam006- 139 -LRB100 06347 HLH 26817 a

1        income under different subsections of Section 304. The
2        addition modification required by this subparagraph
3        shall be reduced to the extent that dividends were
4        included in base income of the unitary group for the
5        same taxable year and received by the taxpayer or by a
6        member of the taxpayer's unitary business group
7        (including amounts included in gross income under
8        Sections 951 through 964 of the Internal Revenue Code
9        and amounts included in gross income under Section 78
10        of the Internal Revenue Code) with respect to the stock
11        of the same person to whom the premiums and costs were
12        directly or indirectly paid, incurred, or accrued. The
13        preceding sentence does not apply to the extent that
14        the same dividends caused a reduction to the addition
15        modification required under Section 203(d)(2)(D-7) or
16        Section 203(d)(2)(D-8) of this Act;
17            (D-10) An amount equal to the credit allowable to
18        the taxpayer under Section 218(a) of this Act,
19        determined without regard to Section 218(c) of this
20        Act;
21            (D-11) For taxable years beginning on or after
22        January 1, 2017, an amount equal to the deduction
23        allowed under Section 199 of the Internal Revenue Code
24        for the taxable year;
25    and by deducting from the total so obtained the following
26    amounts:

 

 

10000SB0009sam006- 140 -LRB100 06347 HLH 26817 a

1            (E) The valuation limitation amount;
2            (F) An amount equal to the amount of any tax
3        imposed by this Act which was refunded to the taxpayer
4        and included in such total for the taxable year;
5            (G) An amount equal to all amounts included in
6        taxable income as modified by subparagraphs (A), (B),
7        (C) and (D) which are exempt from taxation by this
8        State either by reason of its statutes or Constitution
9        or by reason of the Constitution, treaties or statutes
10        of the United States; provided that, in the case of any
11        statute of this State that exempts income derived from
12        bonds or other obligations from the tax imposed under
13        this Act, the amount exempted shall be the interest net
14        of bond premium amortization;
15            (H) Any income of the partnership which
16        constitutes personal service income as defined in
17        Section 1348 (b) (1) of the Internal Revenue Code (as
18        in effect December 31, 1981) or a reasonable allowance
19        for compensation paid or accrued for services rendered
20        by partners to the partnership, whichever is greater;
21        this subparagraph (H) is exempt from the provisions of
22        Section 250;
23            (I) An amount equal to all amounts of income
24        distributable to an entity subject to the Personal
25        Property Tax Replacement Income Tax imposed by
26        subsections (c) and (d) of Section 201 of this Act

 

 

10000SB0009sam006- 141 -LRB100 06347 HLH 26817 a

1        including amounts distributable to organizations
2        exempt from federal income tax by reason of Section
3        501(a) of the Internal Revenue Code; this subparagraph
4        (I) is exempt from the provisions of Section 250;
5            (J) With the exception of any amounts subtracted
6        under subparagraph (G), an amount equal to the sum of
7        all amounts disallowed as deductions by (i) Sections
8        171(a) (2), and 265(2) of the Internal Revenue Code,
9        and all amounts of expenses allocable to interest and
10        disallowed as deductions by Section 265(1) of the
11        Internal Revenue Code; and (ii) for taxable years
12        ending on or after August 13, 1999, Sections 171(a)(2),
13        265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue
14        Code, plus, (iii) for taxable years ending on or after
15        December 31, 2011, Section 45G(e)(3) of the Internal
16        Revenue Code and, for taxable years ending on or after
17        December 31, 2008, any amount included in gross income
18        under Section 87 of the Internal Revenue Code; the
19        provisions of this subparagraph are exempt from the
20        provisions of Section 250;
21            (K) An amount equal to those dividends included in
22        such total which were paid by a corporation which
23        conducts business operations in a River Edge
24        Redevelopment Zone or zones created under the River
25        Edge Redevelopment Zone Act and conducts substantially
26        all of its operations from a River Edge Redevelopment

 

 

10000SB0009sam006- 142 -LRB100 06347 HLH 26817 a

1        Zone or zones. This subparagraph (K) is exempt from the
2        provisions of Section 250;
3            (L) An amount equal to any contribution made to a
4        job training project established pursuant to the Real
5        Property Tax Increment Allocation Redevelopment Act;
6            (M) An amount equal to those dividends included in
7        such total that were paid by a corporation that
8        conducts business operations in a federally designated
9        Foreign Trade Zone or Sub-Zone and that is designated a
10        High Impact Business located in Illinois; provided
11        that dividends eligible for the deduction provided in
12        subparagraph (K) of paragraph (2) of this subsection
13        shall not be eligible for the deduction provided under
14        this subparagraph (M);
15            (N) An amount equal to the amount of the deduction
16        used to compute the federal income tax credit for
17        restoration of substantial amounts held under claim of
18        right for the taxable year pursuant to Section 1341 of
19        the Internal Revenue Code;
20            (O) For taxable years 2001 and thereafter, for the
21        taxable year in which the bonus depreciation deduction
22        is taken on the taxpayer's federal income tax return
23        under subsection (k) of Section 168 of the Internal
24        Revenue Code and for each applicable taxable year
25        thereafter, an amount equal to "x", where:
26                (1) "y" equals the amount of the depreciation

 

 

10000SB0009sam006- 143 -LRB100 06347 HLH 26817 a

1            deduction taken for the taxable year on the
2            taxpayer's federal income tax return on property
3            for which the bonus depreciation deduction was
4            taken in any year under subsection (k) of Section
5            168 of the Internal Revenue Code, but not including
6            the bonus depreciation deduction;
7                (2) for taxable years ending on or before
8            December 31, 2005, "x" equals "y" multiplied by 30
9            and then divided by 70 (or "y" multiplied by
10            0.429); and
11                (3) for taxable years ending after December
12            31, 2005:
13                    (i) for property on which a bonus
14                depreciation deduction of 30% of the adjusted
15                basis was taken, "x" equals "y" multiplied by
16                30 and then divided by 70 (or "y" multiplied by
17                0.429); and
18                    (ii) for property on which a bonus
19                depreciation deduction of 50% of the adjusted
20                basis was taken, "x" equals "y" multiplied by
21                1.0.
22            The aggregate amount deducted under this
23        subparagraph in all taxable years for any one piece of
24        property may not exceed the amount of the bonus
25        depreciation deduction taken on that property on the
26        taxpayer's federal income tax return under subsection

 

 

10000SB0009sam006- 144 -LRB100 06347 HLH 26817 a

1        (k) of Section 168 of the Internal Revenue Code. This
2        subparagraph (O) is exempt from the provisions of
3        Section 250;
4            (P) If the taxpayer sells, transfers, abandons, or
5        otherwise disposes of property for which the taxpayer
6        was required in any taxable year to make an addition
7        modification under subparagraph (D-5), then an amount
8        equal to that addition modification.
9            If the taxpayer continues to own property through
10        the last day of the last tax year for which the
11        taxpayer may claim a depreciation deduction for
12        federal income tax purposes and for which the taxpayer
13        was required in any taxable year to make an addition
14        modification under subparagraph (D-5), then an amount
15        equal to that addition modification.
16            The taxpayer is allowed to take the deduction under
17        this subparagraph only once with respect to any one
18        piece of property.
19            This subparagraph (P) is exempt from the
20        provisions of Section 250;
21            (Q) The amount of (i) any interest income (net of
22        the deductions allocable thereto) taken into account
23        for the taxable year with respect to a transaction with
24        a taxpayer that is required to make an addition
25        modification with respect to such transaction under
26        Section 203(a)(2)(D-17), 203(b)(2)(E-12),

 

 

10000SB0009sam006- 145 -LRB100 06347 HLH 26817 a

1        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
2        the amount of such addition modification and (ii) any
3        income from intangible property (net of the deductions
4        allocable thereto) taken into account for the taxable
5        year with respect to a transaction with a taxpayer that
6        is required to make an addition modification with
7        respect to such transaction under Section
8        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
9        203(d)(2)(D-8), but not to exceed the amount of such
10        addition modification. This subparagraph (Q) is exempt
11        from Section 250;
12            (R) An amount equal to the interest income taken
13        into account for the taxable year (net of the
14        deductions allocable thereto) with respect to
15        transactions with (i) a foreign person who would be a
16        member of the taxpayer's unitary business group but for
17        the fact that the foreign person's business activity
18        outside the United States is 80% or more of that
19        person's total business activity and (ii) for taxable
20        years ending on or after December 31, 2008, to a person
21        who would be a member of the same unitary business
22        group but for the fact that the person is prohibited
23        under Section 1501(a)(27) from being included in the
24        unitary business group because he or she is ordinarily
25        required to apportion business income under different
26        subsections of Section 304, but not to exceed the

 

 

10000SB0009sam006- 146 -LRB100 06347 HLH 26817 a

1        addition modification required to be made for the same
2        taxable year under Section 203(d)(2)(D-7) for interest
3        paid, accrued, or incurred, directly or indirectly, to
4        the same person. This subparagraph (R) is exempt from
5        Section 250;
6            (S) An amount equal to the income from intangible
7        property taken into account for the taxable year (net
8        of the deductions allocable thereto) with respect to
9        transactions with (i) a foreign person who would be a
10        member of the taxpayer's unitary business group but for
11        the fact that the foreign person's business activity
12        outside the United States is 80% or more of that
13        person's total business activity and (ii) for taxable
14        years ending on or after December 31, 2008, to a person
15        who would be a member of the same unitary business
16        group but for the fact that the person is prohibited
17        under Section 1501(a)(27) from being included in the
18        unitary business group because he or she is ordinarily
19        required to apportion business income under different
20        subsections of Section 304, but not to exceed the
21        addition modification required to be made for the same
22        taxable year under Section 203(d)(2)(D-8) for
23        intangible expenses and costs paid, accrued, or
24        incurred, directly or indirectly, to the same person.
25        This subparagraph (S) is exempt from Section 250; and
26            (T) For taxable years ending on or after December

 

 

10000SB0009sam006- 147 -LRB100 06347 HLH 26817 a

1        31, 2011, in the case of a taxpayer who was required to
2        add back any insurance premiums under Section
3        203(d)(2)(D-9), such taxpayer may elect to subtract
4        that part of a reimbursement received from the
5        insurance company equal to the amount of the expense or
6        loss (including expenses incurred by the insurance
7        company) that would have been taken into account as a
8        deduction for federal income tax purposes if the
9        expense or loss had been uninsured. If a taxpayer makes
10        the election provided for by this subparagraph (T), the
11        insurer to which the premiums were paid must add back
12        to income the amount subtracted by the taxpayer
13        pursuant to this subparagraph (T). This subparagraph
14        (T) is exempt from the provisions of Section 250.
 
15    (e) Gross income; adjusted gross income; taxable income.
16        (1) In general. Subject to the provisions of paragraph
17    (2) and subsection (b) (3), for purposes of this Section
18    and Section 803(e), a taxpayer's gross income, adjusted
19    gross income, or taxable income for the taxable year shall
20    mean the amount of gross income, adjusted gross income or
21    taxable income properly reportable for federal income tax
22    purposes for the taxable year under the provisions of the
23    Internal Revenue Code. Taxable income may be less than
24    zero. However, for taxable years ending on or after
25    December 31, 1986, net operating loss carryforwards from

 

 

10000SB0009sam006- 148 -LRB100 06347 HLH 26817 a

1    taxable years ending prior to December 31, 1986, may not
2    exceed the sum of federal taxable income for the taxable
3    year before net operating loss deduction, plus the excess
4    of addition modifications over subtraction modifications
5    for the taxable year. For taxable years ending prior to
6    December 31, 1986, taxable income may never be an amount in
7    excess of the net operating loss for the taxable year as
8    defined in subsections (c) and (d) of Section 172 of the
9    Internal Revenue Code, provided that when taxable income of
10    a corporation (other than a Subchapter S corporation),
11    trust, or estate is less than zero and addition
12    modifications, other than those provided by subparagraph
13    (E) of paragraph (2) of subsection (b) for corporations or
14    subparagraph (E) of paragraph (2) of subsection (c) for
15    trusts and estates, exceed subtraction modifications, an
16    addition modification must be made under those
17    subparagraphs for any other taxable year to which the
18    taxable income less than zero (net operating loss) is
19    applied under Section 172 of the Internal Revenue Code or
20    under subparagraph (E) of paragraph (2) of this subsection
21    (e) applied in conjunction with Section 172 of the Internal
22    Revenue Code.
23        (2) Special rule. For purposes of paragraph (1) of this
24    subsection, the taxable income properly reportable for
25    federal income tax purposes shall mean:
26            (A) Certain life insurance companies. In the case

 

 

10000SB0009sam006- 149 -LRB100 06347 HLH 26817 a

1        of a life insurance company subject to the tax imposed
2        by Section 801 of the Internal Revenue Code, life
3        insurance company taxable income, plus the amount of
4        distribution from pre-1984 policyholder surplus
5        accounts as calculated under Section 815a of the
6        Internal Revenue Code;
7            (B) Certain other insurance companies. In the case
8        of mutual insurance companies subject to the tax
9        imposed by Section 831 of the Internal Revenue Code,
10        insurance company taxable income;
11            (C) Regulated investment companies. In the case of
12        a regulated investment company subject to the tax
13        imposed by Section 852 of the Internal Revenue Code,
14        investment company taxable income;
15            (D) Real estate investment trusts. In the case of a
16        real estate investment trust subject to the tax imposed
17        by Section 857 of the Internal Revenue Code, real
18        estate investment trust taxable income;
19            (E) Consolidated corporations. In the case of a
20        corporation which is a member of an affiliated group of
21        corporations filing a consolidated income tax return
22        for the taxable year for federal income tax purposes,
23        taxable income determined as if such corporation had
24        filed a separate return for federal income tax purposes
25        for the taxable year and each preceding taxable year
26        for which it was a member of an affiliated group. For

 

 

10000SB0009sam006- 150 -LRB100 06347 HLH 26817 a

1        purposes of this subparagraph, the taxpayer's separate
2        taxable income shall be determined as if the election
3        provided by Section 243(b) (2) of the Internal Revenue
4        Code had been in effect for all such years;
5            (F) Cooperatives. In the case of a cooperative
6        corporation or association, the taxable income of such
7        organization determined in accordance with the
8        provisions of Section 1381 through 1388 of the Internal
9        Revenue Code, but without regard to the prohibition
10        against offsetting losses from patronage activities
11        against income from nonpatronage activities; except
12        that a cooperative corporation or association may make
13        an election to follow its federal income tax treatment
14        of patronage losses and nonpatronage losses. In the
15        event such election is made, such losses shall be
16        computed and carried over in a manner consistent with
17        subsection (a) of Section 207 of this Act and
18        apportioned by the apportionment factor reported by
19        the cooperative on its Illinois income tax return filed
20        for the taxable year in which the losses are incurred.
21        The election shall be effective for all taxable years
22        with original returns due on or after the date of the
23        election. In addition, the cooperative may file an
24        amended return or returns, as allowed under this Act,
25        to provide that the election shall be effective for
26        losses incurred or carried forward for taxable years

 

 

10000SB0009sam006- 151 -LRB100 06347 HLH 26817 a

1        occurring prior to the date of the election. Once made,
2        the election may only be revoked upon approval of the
3        Director. The Department shall adopt rules setting
4        forth requirements for documenting the elections and
5        any resulting Illinois net loss and the standards to be
6        used by the Director in evaluating requests to revoke
7        elections. Public Act 96-932 is declaratory of
8        existing law;
9            (G) Subchapter S corporations. In the case of: (i)
10        a Subchapter S corporation for which there is in effect
11        an election for the taxable year under Section 1362 of
12        the Internal Revenue Code, the taxable income of such
13        corporation determined in accordance with Section
14        1363(b) of the Internal Revenue Code, except that
15        taxable income shall take into account those items
16        which are required by Section 1363(b)(1) of the
17        Internal Revenue Code to be separately stated; and (ii)
18        a Subchapter S corporation for which there is in effect
19        a federal election to opt out of the provisions of the
20        Subchapter S Revision Act of 1982 and have applied
21        instead the prior federal Subchapter S rules as in
22        effect on July 1, 1982, the taxable income of such
23        corporation determined in accordance with the federal
24        Subchapter S rules as in effect on July 1, 1982; and
25            (H) Partnerships. In the case of a partnership,
26        taxable income determined in accordance with Section

 

 

10000SB0009sam006- 152 -LRB100 06347 HLH 26817 a

1        703 of the Internal Revenue Code, except that taxable
2        income shall take into account those items which are
3        required by Section 703(a)(1) to be separately stated
4        but which would be taken into account by an individual
5        in calculating his taxable income.
6        (3) Recapture of business expenses on disposition of
7    asset or business. Notwithstanding any other law to the
8    contrary, if in prior years income from an asset or
9    business has been classified as business income and in a
10    later year is demonstrated to be non-business income, then
11    all expenses, without limitation, deducted in such later
12    year and in the 2 immediately preceding taxable years
13    related to that asset or business that generated the
14    non-business income shall be added back and recaptured as
15    business income in the year of the disposition of the asset
16    or business. Such amount shall be apportioned to Illinois
17    using the greater of the apportionment fraction computed
18    for the business under Section 304 of this Act for the
19    taxable year or the average of the apportionment fractions
20    computed for the business under Section 304 of this Act for
21    the taxable year and for the 2 immediately preceding
22    taxable years.
 
23    (f) Valuation limitation amount.
24        (1) In general. The valuation limitation amount
25    referred to in subsections (a) (2) (G), (c) (2) (I) and

 

 

10000SB0009sam006- 153 -LRB100 06347 HLH 26817 a

1    (d)(2) (E) is an amount equal to:
2            (A) The sum of the pre-August 1, 1969 appreciation
3        amounts (to the extent consisting of gain reportable
4        under the provisions of Section 1245 or 1250 of the
5        Internal Revenue Code) for all property in respect of
6        which such gain was reported for the taxable year; plus
7            (B) The lesser of (i) the sum of the pre-August 1,
8        1969 appreciation amounts (to the extent consisting of
9        capital gain) for all property in respect of which such
10        gain was reported for federal income tax purposes for
11        the taxable year, or (ii) the net capital gain for the
12        taxable year, reduced in either case by any amount of
13        such gain included in the amount determined under
14        subsection (a) (2) (F) or (c) (2) (H).
15        (2) Pre-August 1, 1969 appreciation amount.
16            (A) If the fair market value of property referred
17        to in paragraph (1) was readily ascertainable on August
18        1, 1969, the pre-August 1, 1969 appreciation amount for
19        such property is the lesser of (i) the excess of such
20        fair market value over the taxpayer's basis (for
21        determining gain) for such property on that date
22        (determined under the Internal Revenue Code as in
23        effect on that date), or (ii) the total gain realized
24        and reportable for federal income tax purposes in
25        respect of the sale, exchange or other disposition of
26        such property.

 

 

10000SB0009sam006- 154 -LRB100 06347 HLH 26817 a

1            (B) If the fair market value of property referred
2        to in paragraph (1) was not readily ascertainable on
3        August 1, 1969, the pre-August 1, 1969 appreciation
4        amount for such property is that amount which bears the
5        same ratio to the total gain reported in respect of the
6        property for federal income tax purposes for the
7        taxable year, as the number of full calendar months in
8        that part of the taxpayer's holding period for the
9        property ending July 31, 1969 bears to the number of
10        full calendar months in the taxpayer's entire holding
11        period for the property.
12            (C) The Department shall prescribe such
13        regulations as may be necessary to carry out the
14        purposes of this paragraph.
 
15    (g) Double deductions. Unless specifically provided
16otherwise, nothing in this Section shall permit the same item
17to be deducted more than once.
 
18    (h) Legislative intention. Except as expressly provided by
19this Section there shall be no modifications or limitations on
20the amounts of income, gain, loss or deduction taken into
21account in determining gross income, adjusted gross income or
22taxable income for federal income tax purposes for the taxable
23year, or in the amount of such items entering into the
24computation of base income and net income under this Act for

 

 

10000SB0009sam006- 155 -LRB100 06347 HLH 26817 a

1such taxable year, whether in respect of property values as of
2August 1, 1969 or otherwise.
3(Source: P.A. 96-45, eff. 7-15-09; 96-120, eff. 8-4-09; 96-198,
4eff. 8-10-09; 96-328, eff. 8-11-09; 96-520, eff. 8-14-09;
596-835, eff. 12-16-09; 96-932, eff. 1-1-11; 96-935, eff.
66-21-10; 96-1214, eff. 7-22-10; 97-333, eff. 8-12-11; 97-507,
7eff. 8-23-11; 97-905, eff. 8-7-12.)
 
8    (35 ILCS 5/204)  (from Ch. 120, par. 2-204)
9    Sec. 204. Standard Exemption.
10    (a) Allowance of exemption. In computing net income under
11this Act, there shall be allowed as an exemption the sum of the
12amounts determined under subsections (b), (c) and (d),
13multiplied by a fraction the numerator of which is the amount
14of the taxpayer's base income allocable to this State for the
15taxable year and the denominator of which is the taxpayer's
16total base income for the taxable year.
17    (b) Basic amount. For the purpose of subsection (a) of this
18Section, except as provided by subsection (a) of Section 205
19and in this subsection, each taxpayer shall be allowed a basic
20amount of $1000, except that for corporations the basic amount
21shall be zero for tax years ending on or after December 31,
222003, and for individuals the basic amount shall be:
23        (1) for taxable years ending on or after December 31,
24    1998 and prior to December 31, 1999, $1,300;
25        (2) for taxable years ending on or after December 31,

 

 

10000SB0009sam006- 156 -LRB100 06347 HLH 26817 a

1    1999 and prior to December 31, 2000, $1,650;
2        (3) for taxable years ending on or after December 31,
3    2000 and prior to December 31, 2012, $2,000;
4        (4) for taxable years ending on or after December 31,
5    2012 and prior to December 31, 2013, $2,050;
6        (5) for taxable years ending on or after December 31,
7    2013, $2,050 plus the cost-of-living adjustment under
8    subsection (d-5).
9For taxable years ending on or after December 31, 1992, a
10taxpayer whose Illinois base income exceeds the basic amount
11and who is claimed as a dependent on another person's tax
12return under the Internal Revenue Code shall not be allowed any
13basic amount under this subsection.
14    (c) Additional amount for individuals. In the case of an
15individual taxpayer, there shall be allowed for the purpose of
16subsection (a), in addition to the basic amount provided by
17subsection (b), an additional exemption equal to the basic
18amount for each exemption in excess of one allowable to such
19individual taxpayer for the taxable year under Section 151 of
20the Internal Revenue Code.
21    (d) Additional exemptions for an individual taxpayer and
22his or her spouse. In the case of an individual taxpayer and
23his or her spouse, he or she shall each be allowed additional
24exemptions as follows:
25        (1) Additional exemption for taxpayer or spouse 65
26    years of age or older.

 

 

10000SB0009sam006- 157 -LRB100 06347 HLH 26817 a

1            (A) For taxpayer. An additional exemption of
2        $1,000 for the taxpayer if he or she has attained the
3        age of 65 before the end of the taxable year.
4            (B) For spouse when a joint return is not filed. An
5        additional exemption of $1,000 for the spouse of the
6        taxpayer if a joint return is not made by the taxpayer
7        and his spouse, and if the spouse has attained the age
8        of 65 before the end of such taxable year, and, for the
9        calendar year in which the taxable year of the taxpayer
10        begins, has no gross income and is not the dependent of
11        another taxpayer.
12        (2) Additional exemption for blindness of taxpayer or
13    spouse.
14            (A) For taxpayer. An additional exemption of
15        $1,000 for the taxpayer if he or she is blind at the
16        end of the taxable year.
17            (B) For spouse when a joint return is not filed. An
18        additional exemption of $1,000 for the spouse of the
19        taxpayer if a separate return is made by the taxpayer,
20        and if the spouse is blind and, for the calendar year
21        in which the taxable year of the taxpayer begins, has
22        no gross income and is not the dependent of another
23        taxpayer. For purposes of this paragraph, the
24        determination of whether the spouse is blind shall be
25        made as of the end of the taxable year of the taxpayer;
26        except that if the spouse dies during such taxable year

 

 

10000SB0009sam006- 158 -LRB100 06347 HLH 26817 a

1        such determination shall be made as of the time of such
2        death.
3            (C) Blindness defined. For purposes of this
4        subsection, an individual is blind only if his or her
5        central visual acuity does not exceed 20/200 in the
6        better eye with correcting lenses, or if his or her
7        visual acuity is greater than 20/200 but is accompanied
8        by a limitation in the fields of vision such that the
9        widest diameter of the visual fields subtends an angle
10        no greater than 20 degrees.
11    (d-5) Cost-of-living adjustment. For purposes of item (5)
12of subsection (b), the cost-of-living adjustment for any
13calendar year and for taxable years ending prior to the end of
14the subsequent calendar year is equal to $2,050 times the
15percentage (if any) by which:
16        (1) the Consumer Price Index for the preceding calendar
17    year, exceeds
18        (2) the Consumer Price Index for the calendar year
19    2011.
20    The Consumer Price Index for any calendar year is the
21average of the Consumer Price Index as of the close of the
2212-month period ending on August 31 of that calendar year.
23    The term "Consumer Price Index" means the last Consumer
24Price Index for All Urban Consumers published by the United
25States Department of Labor or any successor agency.
26    If any cost-of-living adjustment is not a multiple of $25,

 

 

10000SB0009sam006- 159 -LRB100 06347 HLH 26817 a

1that adjustment shall be rounded to the next lowest multiple of
2$25.
3    (e) Cross reference. See Article 3 for the manner of
4determining base income allocable to this State.
5    (f) Application of Section 250. Section 250 does not apply
6to the amendments to this Section made by Public Act 90-613.
7    (g) Notwithstanding any other provision of law, for taxable
8years beginning on or after January 1, 2018, no taxpayer may
9claim an exemption under this Section if the taxpayer's
10adjusted gross income for the taxable year exceeds (i)
11$500,000, in the case of spouses filing a joint federal tax
12return or (ii) $250,000, in the case of all other taxpayers.
13(Source: P.A. 97-507, eff. 8-23-11; 97-652, eff. 6-1-12.)
 
14    (35 ILCS 5/208)  (from Ch. 120, par. 2-208)
15    Sec. 208. Tax credit for residential real property taxes.
16Beginning with tax years ending on or after December 31, 1991,
17every individual taxpayer shall be entitled to a tax credit
18equal to 5% of real property taxes paid by such taxpayer during
19the taxable year on the principal residence of the taxpayer. In
20the case of multi-unit or multi-use structures and farm
21dwellings, the taxes on the taxpayer's principal residence
22shall be that portion of the total taxes which is attributable
23to such principal residence. Notwithstanding any other
24provision of law, for taxable years beginning on or after
25January 1, 2018, no taxpayer may claim a credit under this

 

 

10000SB0009sam006- 160 -LRB100 06347 HLH 26817 a

1Section if the taxpayer's adjusted gross income for the taxable
2year exceeds (i) $500,000, in the case of spouses filing a
3joint federal tax return, or (ii) $250,000, in the case of all
4other taxpayers.
5(Source: P.A. 87-17.)
 
6    (35 ILCS 5/212)
7    Sec. 212. Earned income tax credit.
8    (a) With respect to the federal earned income tax credit
9allowed for the taxable year under Section 32 of the federal
10Internal Revenue Code, 26 U.S.C. 32, each individual taxpayer
11is entitled to a credit against the tax imposed by subsections
12(a) and (b) of Section 201 in an amount equal to (i) 5% of the
13federal tax credit for each taxable year beginning on or after
14January 1, 2000 and ending prior to December 31, 2012, (ii)
157.5% of the federal tax credit for each taxable year beginning
16on or after January 1, 2012 and ending prior to December 31,
172013, and (iii) 10% of the federal tax credit for each taxable
18year beginning on or after January 1, 2013 and beginning prior
19to January 1, 2017, and (iv) 15% of the federal tax credit for
20each taxable year beginning on or after January 1, 2017.
21    For a non-resident or part-year resident, the amount of the
22credit under this Section shall be in proportion to the amount
23of income attributable to this State.
24    (b) For taxable years beginning before January 1, 2003, in
25no event shall a credit under this Section reduce the

 

 

10000SB0009sam006- 161 -LRB100 06347 HLH 26817 a

1taxpayer's liability to less than zero. For each taxable year
2beginning on or after January 1, 2003, if the amount of the
3credit exceeds the income tax liability for the applicable tax
4year, then the excess credit shall be refunded to the taxpayer.
5The amount of a refund shall not be included in the taxpayer's
6income or resources for the purposes of determining eligibility
7or benefit level in any means-tested benefit program
8administered by a governmental entity unless required by
9federal law.
10    (c) This Section is exempt from the provisions of Section
11250.
12(Source: P.A. 97-652, eff. 6-1-12.)
 
13    (35 ILCS 5/222)
14    Sec. 222. Live theater production credit.
15    (a) For tax years beginning on or after January 1, 2012 and
16beginning prior to January 1, 2027, a taxpayer who has received
17a tax credit award under the Live Theater Production Tax Credit
18Act is entitled to a credit against the taxes imposed under
19subsections (a) and (b) of Section 201 of this Act in an amount
20determined under that Act by the Department of Commerce and
21Economic Opportunity.
22    (b) If the taxpayer is a partnership, limited liability
23partnership, limited liability company, or Subchapter S
24corporation, the tax credit award is allowed to the partners,
25unit holders, or shareholders in accordance with the

 

 

10000SB0009sam006- 162 -LRB100 06347 HLH 26817 a

1determination of income and distributive share of income under
2Sections 702 and 704 and Subchapter S of the Internal Revenue
3Code.
4    (c) A sale, assignment, or transfer of the tax credit award
5may be made by the taxpayer earning the credit within one year
6after the credit is awarded in accordance with rules adopted by
7the Department of Commerce and Economic Opportunity.
8    (d) The Department of Revenue, in cooperation with the
9Department of Commerce and Economic Opportunity, shall adopt
10rules to enforce and administer the provisions of this Section.
11    (e) The tax credit award may not be carried back. If the
12amount of the credit exceeds the tax liability for the year,
13the excess may be carried forward and applied to the tax
14liability of the 5 tax years following the excess credit year.
15The tax credit award shall be applied to the earliest year for
16which there is a tax liability. If there are credits from more
17than one tax year that are available to offset liability, the
18earlier credit shall be applied first. In no event may a credit
19under this Section reduce the taxpayer's liability to less than
20zero.
21(Source: P.A. 97-636, eff. 6-1-12.)
 
22    (35 ILCS 5/225 new)
23    Sec. 225. Credit for instructional materials and supplies.
24For taxable years beginning on and after January 1, 2017, a
25taxpayer shall be allowed a credit in the amount paid by the

 

 

10000SB0009sam006- 163 -LRB100 06347 HLH 26817 a

1taxpayer during the taxable year for instructional materials
2and supplies with respect to classroom based instruction in a
3qualified school, or $250, whichever is less, provided that the
4taxpayer is a teacher, instructor, counselor, principal, or
5aide in a qualified school for at least 900 hours during a
6school year.
7    The credit may not be carried back and may not reduce the
8taxpayer's liability to less than zero. If the amount of the
9credit exceeds the tax liability for the year, the excess may
10be carried forward and applied to the tax liability of the 5
11taxable years following the excess credit year. The tax credit
12shall be applied to the earliest year for which there is a tax
13liability. If there are credits for more than one year that are
14available to offset a liability, the earlier credit shall be
15applied first.
16    For purposes of this Section, the term "materials and
17supplies" means amounts paid for instructional materials or
18supplies that are designated for classroom use in any qualified
19school. For purposes of this Section, the term "qualified
20school" means a public school or non-public school located in
21Illinois.
22    This Section is exempt from the provisions of Section 250.
 
23    (35 ILCS 5/804)  (from Ch. 120, par. 8-804)
24    Sec. 804. Failure to Pay Estimated Tax.
25    (a) In general. In case of any underpayment of estimated

 

 

10000SB0009sam006- 164 -LRB100 06347 HLH 26817 a

1tax by a taxpayer, except as provided in subsection (d) or (e),
2the taxpayer shall be liable to a penalty in an amount
3determined at the rate prescribed by Section 3-3 of the Uniform
4Penalty and Interest Act upon the amount of the underpayment
5(determined under subsection (b)) for each required
6installment.
7    (b) Amount of underpayment. For purposes of subsection (a),
8the amount of the underpayment shall be the excess of:
9        (1) the amount of the installment which would be
10    required to be paid under subsection (c), over
11        (2) the amount, if any, of the installment paid on or
12    before the last date prescribed for payment.
13    (c) Amount of Required Installments.
14        (1) Amount.
15            (A) In General. Except as provided in paragraphs
16        (2) and (3), the amount of any required installment
17        shall be 25% of the required annual payment.
18            (B) Required Annual Payment. For purposes of
19        subparagraph (A), the term "required annual payment"
20        means the lesser of:
21                (i) 90% of the tax shown on the return for the
22            taxable year, or if no return is filed, 90% of the
23            tax for such year;
24                (ii) for installments due prior to February 1,
25            2011, and after January 31, 2012, 100% of the tax
26            shown on the return of the taxpayer for the

 

 

10000SB0009sam006- 165 -LRB100 06347 HLH 26817 a

1            preceding taxable year if a return showing a
2            liability for tax was filed by the taxpayer for the
3            preceding taxable year and such preceding year was
4            a taxable year of 12 months; or
5                (iii) for installments due after January 31,
6            2011, and prior to February 1, 2012, 150% of the
7            tax shown on the return of the taxpayer for the
8            preceding taxable year if a return showing a
9            liability for tax was filed by the taxpayer for the
10            preceding taxable year and such preceding year was
11            a taxable year of 12 months.
12        (2) Lower Required Installment where Annualized Income
13    Installment is Less Than Amount Determined Under Paragraph
14    (1).
15            (A) In General. In the case of any required
16        installment if a taxpayer establishes that the
17        annualized income installment is less than the amount
18        determined under paragraph (1),
19                (i) the amount of such required installment
20            shall be the annualized income installment, and
21                (ii) any reduction in a required installment
22            resulting from the application of this
23            subparagraph shall be recaptured by increasing the
24            amount of the next required installment determined
25            under paragraph (1) by the amount of such
26            reduction, and by increasing subsequent required

 

 

10000SB0009sam006- 166 -LRB100 06347 HLH 26817 a

1            installments to the extent that the reduction has
2            not previously been recaptured under this clause.
3            (B) Determination of Annualized Income
4        Installment. In the case of any required installment,
5        the annualized income installment is the excess, if
6        any, of:
7                (i) an amount equal to the applicable
8            percentage of the tax for the taxable year computed
9            by placing on an annualized basis the net income
10            for months in the taxable year ending before the
11            due date for the installment, over
12                (ii) the aggregate amount of any prior
13            required installments for the taxable year.
14            (C) Applicable Percentage.
15        In the case of the followingThe applicable
16        required installments:percentage is:
17        1st ...............................22.5%
18        2nd ...............................45%
19        3rd ...............................67.5%
20        4th ...............................90%
21            (D) Annualized Net Income; Individuals. For
22        individuals, net income shall be placed on an
23        annualized basis by:
24                (i) multiplying by 12, or in the case of a
25            taxable year of less than 12 months, by the number
26            of months in the taxable year, the net income

 

 

10000SB0009sam006- 167 -LRB100 06347 HLH 26817 a

1            computed without regard to the standard exemption
2            for the months in the taxable year ending before
3            the month in which the installment is required to
4            be paid;
5                (ii) dividing the resulting amount by the
6            number of months in the taxable year ending before
7            the month in which such installment date falls; and
8                (iii) deducting from such amount the standard
9            exemption allowable for the taxable year, such
10            standard exemption being determined as of the last
11            date prescribed for payment of the installment.
12            (E) Annualized Net Income; Corporations. For
13        corporations, net income shall be placed on an
14        annualized basis by multiplying by 12 the taxable
15        income
16                (i) for the first 3 months of the taxable year,
17            in the case of the installment required to be paid
18            in the 4th month,
19                (ii) for the first 3 months or for the first 5
20            months of the taxable year, in the case of the
21            installment required to be paid in the 6th month,
22                (iii) for the first 6 months or for the first 8
23            months of the taxable year, in the case of the
24            installment required to be paid in the 9th month,
25            and
26                (iv) for the first 9 months or for the first 11

 

 

10000SB0009sam006- 168 -LRB100 06347 HLH 26817 a

1            months of the taxable year, in the case of the
2            installment required to be paid in the 12th month
3            of the taxable year,
4        then dividing the resulting amount by the number of
5        months in the taxable year (3, 5, 6, 8, 9, or 11 as the
6        case may be).
7        (3) Notwithstanding any other provision of this
8    subsection (c), in the case of a federally regulated
9    exchange that elects to apportion its income under Section
10    304(c-1) of this Act, the amount of each required
11    installment due prior to June 30 of the first taxable year
12    to which the election applies shall be 25% of the tax that
13    would have been shown on the return for that taxable year
14    if the taxpayer had not made such election.
15    (d) Exceptions. Notwithstanding the provisions of the
16preceding subsections, the penalty imposed by subsection (a)
17shall not be imposed if the taxpayer was not required to file
18an Illinois income tax return for the preceding taxable year,
19or, for individuals, if the taxpayer had no tax liability for
20the preceding taxable year and such year was a taxable year of
2112 months. The penalty imposed by subsection (a) shall also not
22be imposed on any underpayments of estimated tax due before the
23effective date of this amendatory Act of 1998 which
24underpayments are solely attributable to the change in
25apportionment from subsection (a) to subsection (h) of Section
26304. The provisions of this amendatory Act of 1998 apply to tax

 

 

10000SB0009sam006- 169 -LRB100 06347 HLH 26817 a

1years ending on or after December 31, 1998.
2    (e) The penalty imposed for underpayment of estimated tax
3by subsection (a) of this Section shall not be imposed to the
4extent that the Director or his or her designate determines,
5pursuant to Section 3-8 of the Uniform Penalty and Interest Act
6that the penalty should not be imposed.
7    (f) Definition of tax. For purposes of subsections (b) and
8(c), the term "tax" means the excess of the tax imposed under
9Article 2 of this Act, over the amounts credited against such
10tax under Sections 601(b) (3) and (4).
11    (g) Application of Section in case of tax withheld under
12Article 7. For purposes of applying this Section:
13        (1) tax withheld from compensation for the taxable year
14    shall be deemed a payment of estimated tax, and an equal
15    part of such amount shall be deemed paid on each
16    installment date for such taxable year, unless the taxpayer
17    establishes the dates on which all amounts were actually
18    withheld, in which case the amounts so withheld shall be
19    deemed payments of estimated tax on the dates on which such
20    amounts were actually withheld;
21        (2) amounts timely paid by a partnership, Subchapter S
22    corporation, or trust on behalf of a partner, shareholder,
23    or beneficiary pursuant to subsection (f) of Section 502 or
24    Section 709.5 and claimed as a payment of estimated tax
25    shall be deemed a payment of estimated tax made on the last
26    day of the taxable year of the partnership, Subchapter S

 

 

10000SB0009sam006- 170 -LRB100 06347 HLH 26817 a

1    corporation, or trust for which the income from the
2    withholding is made was computed; and
3        (3) all other amounts pursuant to Article 7 shall be
4    deemed a payment of estimated tax on the date the payment
5    is made to the taxpayer of the amount from which the tax is
6    withheld.
7    (g-5) Amounts withheld under the State Salary and Annuity
8Withholding Act. An individual who has amounts withheld under
9paragraph (10) of Section 4 of the State Salary and Annuity
10Withholding Act may elect to have those amounts treated as
11payments of estimated tax made on the dates on which those
12amounts are actually withheld.
13    (g-10) Notwithstanding any other provision of law, no
14penalty shall apply with respect to an underpayment of
15estimated tax for the first, second, or third quarter of any
16taxable year beginning on or after January 1, 2017 and
17beginning prior to January 1, 2018 if (i) the underpayment was
18due to the changes made by this amendatory Act of the 100th
19General Assembly, (ii) the payment was otherwise timely made,
20and (iii) the balance due is included with the taxpayer's
21estimated tax payment for the fourth quarter.
22    (i) Short taxable year. The application of this Section to
23taxable years of less than 12 months shall be in accordance
24with regulations prescribed by the Department.
25    The changes in this Section made by Public Act 84-127 shall
26apply to taxable years ending on or after January 1, 1986.

 

 

10000SB0009sam006- 171 -LRB100 06347 HLH 26817 a

1(Source: P.A. 96-1496, eff. 1-13-11; 97-507, eff. 8-23-11;
297-636, eff. 6-1-12.)
 
3    (35 ILCS 5/901)  (from Ch. 120, par. 9-901)
4    Sec. 901. Collection authority.
5    (a) In general.
6    The Department shall collect the taxes imposed by this Act.
7The Department shall collect certified past due child support
8amounts under Section 2505-650 of the Department of Revenue Law
9(20 ILCS 2505/2505-650). Except as provided in subsections (c),
10(e), (f), (g), and (h) of this Section, money collected
11pursuant to subsections (a) and (b) of Section 201 of this Act
12shall be paid into the General Revenue Fund in the State
13treasury; money collected pursuant to subsections (c) and (d)
14of Section 201 of this Act shall be paid into the Personal
15Property Tax Replacement Fund, a special fund in the State
16Treasury; and money collected under Section 2505-650 of the
17Department of Revenue Law (20 ILCS 2505/2505-650) shall be paid
18into the Child Support Enforcement Trust Fund, a special fund
19outside the State Treasury, or to the State Disbursement Unit
20established under Section 10-26 of the Illinois Public Aid
21Code, as directed by the Department of Healthcare and Family
22Services.
23    (b) Local Government Distributive Fund.
24    Beginning August 1, 1969, and continuing through June 30,
251994, the Treasurer shall transfer each month from the General

 

 

10000SB0009sam006- 172 -LRB100 06347 HLH 26817 a

1Revenue Fund to a special fund in the State treasury, to be
2known as the "Local Government Distributive Fund", an amount
3equal to 1/12 of the net revenue realized from the tax imposed
4by subsections (a) and (b) of Section 201 of this Act during
5the preceding month. Beginning July 1, 1994, and continuing
6through June 30, 1995, the Treasurer shall transfer each month
7from the General Revenue Fund to the Local Government
8Distributive Fund an amount equal to 1/11 of the net revenue
9realized from the tax imposed by subsections (a) and (b) of
10Section 201 of this Act during the preceding month. Beginning
11July 1, 1995 and continuing through January 31, 2011, the
12Treasurer shall transfer each month from the General Revenue
13Fund to the Local Government Distributive Fund an amount equal
14to the net of (i) 1/10 of the net revenue realized from the tax
15imposed by subsections (a) and (b) of Section 201 of the
16Illinois Income Tax Act during the preceding month (ii) minus,
17beginning July 1, 2003 and ending June 30, 2004, $6,666,666,
18and beginning July 1, 2004, zero. Beginning February 1, 2011,
19and continuing through January 31, 2015, the Treasurer shall
20transfer each month from the General Revenue Fund to the Local
21Government Distributive Fund an amount equal to the sum of (i)
226% (10% of the ratio of the 3% individual income tax rate prior
23to 2011 to the 5% individual income tax rate after 2010) of the
24net revenue realized from the tax imposed by subsections (a)
25and (b) of Section 201 of this Act upon individuals, trusts,
26and estates during the preceding month and (ii) 6.86% (10% of

 

 

10000SB0009sam006- 173 -LRB100 06347 HLH 26817 a

1the ratio of the 4.8% corporate income tax rate prior to 2011
2to the 7% corporate income tax rate after 2010) of the net
3revenue realized from the tax imposed by subsections (a) and
4(b) of Section 201 of this Act upon corporations during the
5preceding month. Beginning February 1, 2015 and continuing
6through January 31, 2017 January 31, 2025, the Treasurer shall
7transfer each month from the General Revenue Fund to the Local
8Government Distributive Fund an amount equal to the sum of (i)
98% (10% of the ratio of the 3% individual income tax rate prior
10to 2011 to the 3.75% individual income tax rate after 2014) of
11the net revenue realized from the tax imposed by subsections
12(a) and (b) of Section 201 of this Act upon individuals,
13trusts, and estates during the preceding month and (ii) 9.14%
14(10% of the ratio of the 4.8% corporate income tax rate prior
15to 2011 to the 5.25% corporate income tax rate after 2014) of
16the net revenue realized from the tax imposed by subsections
17(a) and (b) of Section 201 of this Act upon corporations during
18the preceding month. Beginning February 1, 2017 February 1,
192025, the Treasurer shall transfer each month from the General
20Revenue Fund to the Local Government Distributive Fund an
21amount equal to the sum of (i) 6.06% 9.23% (10% of the ratio of
22the 3% individual income tax rate prior to 2011 to the 4.95%
233.25% individual income tax rate beginning in 2017 after 2024)
24of the net revenue realized from the tax imposed by subsections
25(a) and (b) of Section 201 of this Act upon individuals,
26trusts, and estates during the preceding month and (ii) 6.86%

 

 

10000SB0009sam006- 174 -LRB100 06347 HLH 26817 a

1(10% of the ratio of the 4.8% corporate income tax rate prior
2to 2011 to the 7% corporate income tax rate beginning in 2017)
310% of the net revenue realized from the tax imposed by
4subsections (a) and (b) of Section 201 of this Act upon
5corporations during the preceding month. Net revenue realized
6for a month shall be defined as the revenue from the tax
7imposed by subsections (a) and (b) of Section 201 of this Act
8which is deposited in the General Revenue Fund, the Education
9Assistance Fund, the Income Tax Surcharge Local Government
10Distributive Fund, the Fund for the Advancement of Education,
11and the Commitment to Human Services Fund during the month
12minus the amount paid out of the General Revenue Fund in State
13warrants during that same month as refunds to taxpayers for
14overpayment of liability under the tax imposed by subsections
15(a) and (b) of Section 201 of this Act.
16    Beginning on August 26, 2014 (the effective date of Public
17Act 98-1052), the Comptroller shall perform the transfers
18required by this subsection (b) no later than 60 days after he
19or she receives the certification from the Treasurer as
20provided in Section 1 of the State Revenue Sharing Act.
21    (c) Deposits Into Income Tax Refund Fund.
22        (1) Beginning on January 1, 1989 and thereafter, the
23    Department shall deposit a percentage of the amounts
24    collected pursuant to subsections (a) and (b)(1), (2), and
25    (3), of Section 201 of this Act into a fund in the State
26    treasury known as the Income Tax Refund Fund. The

 

 

10000SB0009sam006- 175 -LRB100 06347 HLH 26817 a

1    Department shall deposit 6% of such amounts during the
2    period beginning January 1, 1989 and ending on June 30,
3    1989. Beginning with State fiscal year 1990 and for each
4    fiscal year thereafter, the percentage deposited into the
5    Income Tax Refund Fund during a fiscal year shall be the
6    Annual Percentage. For fiscal years 1999 through 2001, the
7    Annual Percentage shall be 7.1%. For fiscal year 2003, the
8    Annual Percentage shall be 8%. For fiscal year 2004, the
9    Annual Percentage shall be 11.7%. Upon the effective date
10    of this amendatory Act of the 93rd General Assembly, the
11    Annual Percentage shall be 10% for fiscal year 2005. For
12    fiscal year 2006, the Annual Percentage shall be 9.75%. For
13    fiscal year 2007, the Annual Percentage shall be 9.75%. For
14    fiscal year 2008, the Annual Percentage shall be 7.75%. For
15    fiscal year 2009, the Annual Percentage shall be 9.75%. For
16    fiscal year 2010, the Annual Percentage shall be 9.75%. For
17    fiscal year 2011, the Annual Percentage shall be 8.75%. For
18    fiscal year 2012, the Annual Percentage shall be 8.75%. For
19    fiscal year 2013, the Annual Percentage shall be 9.75%. For
20    fiscal year 2014, the Annual Percentage shall be 9.5%. For
21    fiscal year 2015, the Annual Percentage shall be 10%. For
22    all other fiscal years, the Annual Percentage shall be
23    calculated as a fraction, the numerator of which shall be
24    the amount of refunds approved for payment by the
25    Department during the preceding fiscal year as a result of
26    overpayment of tax liability under subsections (a) and

 

 

10000SB0009sam006- 176 -LRB100 06347 HLH 26817 a

1    (b)(1), (2), and (3) of Section 201 of this Act plus the
2    amount of such refunds remaining approved but unpaid at the
3    end of the preceding fiscal year, minus the amounts
4    transferred into the Income Tax Refund Fund from the
5    Tobacco Settlement Recovery Fund, and the denominator of
6    which shall be the amounts which will be collected pursuant
7    to subsections (a) and (b)(1), (2), and (3) of Section 201
8    of this Act during the preceding fiscal year; except that
9    in State fiscal year 2002, the Annual Percentage shall in
10    no event exceed 7.6%. The Director of Revenue shall certify
11    the Annual Percentage to the Comptroller on the last
12    business day of the fiscal year immediately preceding the
13    fiscal year for which it is to be effective.
14        (2) Beginning on January 1, 1989 and thereafter, the
15    Department shall deposit a percentage of the amounts
16    collected pursuant to subsections (a) and (b)(6), (7), and
17    (8), (c) and (d) of Section 201 of this Act into a fund in
18    the State treasury known as the Income Tax Refund Fund. The
19    Department shall deposit 18% of such amounts during the
20    period beginning January 1, 1989 and ending on June 30,
21    1989. Beginning with State fiscal year 1990 and for each
22    fiscal year thereafter, the percentage deposited into the
23    Income Tax Refund Fund during a fiscal year shall be the
24    Annual Percentage. For fiscal years 1999, 2000, and 2001,
25    the Annual Percentage shall be 19%. For fiscal year 2003,
26    the Annual Percentage shall be 27%. For fiscal year 2004,

 

 

10000SB0009sam006- 177 -LRB100 06347 HLH 26817 a

1    the Annual Percentage shall be 32%. Upon the effective date
2    of this amendatory Act of the 93rd General Assembly, the
3    Annual Percentage shall be 24% for fiscal year 2005. For
4    fiscal year 2006, the Annual Percentage shall be 20%. For
5    fiscal year 2007, the Annual Percentage shall be 17.5%. For
6    fiscal year 2008, the Annual Percentage shall be 15.5%. For
7    fiscal year 2009, the Annual Percentage shall be 17.5%. For
8    fiscal year 2010, the Annual Percentage shall be 17.5%. For
9    fiscal year 2011, the Annual Percentage shall be 17.5%. For
10    fiscal year 2012, the Annual Percentage shall be 17.5%. For
11    fiscal year 2013, the Annual Percentage shall be 14%. For
12    fiscal year 2014, the Annual Percentage shall be 13.4%. For
13    fiscal year 2015, the Annual Percentage shall be 14%. For
14    all other fiscal years, the Annual Percentage shall be
15    calculated as a fraction, the numerator of which shall be
16    the amount of refunds approved for payment by the
17    Department during the preceding fiscal year as a result of
18    overpayment of tax liability under subsections (a) and
19    (b)(6), (7), and (8), (c) and (d) of Section 201 of this
20    Act plus the amount of such refunds remaining approved but
21    unpaid at the end of the preceding fiscal year, and the
22    denominator of which shall be the amounts which will be
23    collected pursuant to subsections (a) and (b)(6), (7), and
24    (8), (c) and (d) of Section 201 of this Act during the
25    preceding fiscal year; except that in State fiscal year
26    2002, the Annual Percentage shall in no event exceed 23%.

 

 

10000SB0009sam006- 178 -LRB100 06347 HLH 26817 a

1    The Director of Revenue shall certify the Annual Percentage
2    to the Comptroller on the last business day of the fiscal
3    year immediately preceding the fiscal year for which it is
4    to be effective.
5        (3) The Comptroller shall order transferred and the
6    Treasurer shall transfer from the Tobacco Settlement
7    Recovery Fund to the Income Tax Refund Fund (i) $35,000,000
8    in January, 2001, (ii) $35,000,000 in January, 2002, and
9    (iii) $35,000,000 in January, 2003.
10    (d) Expenditures from Income Tax Refund Fund.
11        (1) Beginning January 1, 1989, money in the Income Tax
12    Refund Fund shall be expended exclusively for the purpose
13    of paying refunds resulting from overpayment of tax
14    liability under Section 201 of this Act, for paying rebates
15    under Section 208.1 in the event that the amounts in the
16    Homeowners' Tax Relief Fund are insufficient for that
17    purpose, and for making transfers pursuant to this
18    subsection (d).
19        (2) The Director shall order payment of refunds
20    resulting from overpayment of tax liability under Section
21    201 of this Act from the Income Tax Refund Fund only to the
22    extent that amounts collected pursuant to Section 201 of
23    this Act and transfers pursuant to this subsection (d) and
24    item (3) of subsection (c) have been deposited and retained
25    in the Fund.
26        (3) As soon as possible after the end of each fiscal

 

 

10000SB0009sam006- 179 -LRB100 06347 HLH 26817 a

1    year, the Director shall order transferred and the State
2    Treasurer and State Comptroller shall transfer from the
3    Income Tax Refund Fund to the Personal Property Tax
4    Replacement Fund an amount, certified by the Director to
5    the Comptroller, equal to the excess of the amount
6    collected pursuant to subsections (c) and (d) of Section
7    201 of this Act deposited into the Income Tax Refund Fund
8    during the fiscal year over the amount of refunds resulting
9    from overpayment of tax liability under subsections (c) and
10    (d) of Section 201 of this Act paid from the Income Tax
11    Refund Fund during the fiscal year.
12        (4) As soon as possible after the end of each fiscal
13    year, the Director shall order transferred and the State
14    Treasurer and State Comptroller shall transfer from the
15    Personal Property Tax Replacement Fund to the Income Tax
16    Refund Fund an amount, certified by the Director to the
17    Comptroller, equal to the excess of the amount of refunds
18    resulting from overpayment of tax liability under
19    subsections (c) and (d) of Section 201 of this Act paid
20    from the Income Tax Refund Fund during the fiscal year over
21    the amount collected pursuant to subsections (c) and (d) of
22    Section 201 of this Act deposited into the Income Tax
23    Refund Fund during the fiscal year.
24        (4.5) As soon as possible after the end of fiscal year
25    1999 and of each fiscal year thereafter, the Director shall
26    order transferred and the State Treasurer and State

 

 

10000SB0009sam006- 180 -LRB100 06347 HLH 26817 a

1    Comptroller shall transfer from the Income Tax Refund Fund
2    to the General Revenue Fund any surplus remaining in the
3    Income Tax Refund Fund as of the end of such fiscal year;
4    excluding for fiscal years 2000, 2001, and 2002 amounts
5    attributable to transfers under item (3) of subsection (c)
6    less refunds resulting from the earned income tax credit.
7        (5) This Act shall constitute an irrevocable and
8    continuing appropriation from the Income Tax Refund Fund
9    for the purpose of paying refunds upon the order of the
10    Director in accordance with the provisions of this Section.
11    (e) Deposits into the Education Assistance Fund and the
12Income Tax Surcharge Local Government Distributive Fund.
13    On July 1, 1991, and thereafter, of the amounts collected
14pursuant to subsections (a) and (b) of Section 201 of this Act,
15minus deposits into the Income Tax Refund Fund, the Department
16shall deposit 7.3% into the Education Assistance Fund in the
17State Treasury. Beginning July 1, 1991, and continuing through
18January 31, 1993, of the amounts collected pursuant to
19subsections (a) and (b) of Section 201 of the Illinois Income
20Tax Act, minus deposits into the Income Tax Refund Fund, the
21Department shall deposit 3.0% into the Income Tax Surcharge
22Local Government Distributive Fund in the State Treasury.
23Beginning February 1, 1993 and continuing through June 30,
241993, of the amounts collected pursuant to subsections (a) and
25(b) of Section 201 of the Illinois Income Tax Act, minus
26deposits into the Income Tax Refund Fund, the Department shall

 

 

10000SB0009sam006- 181 -LRB100 06347 HLH 26817 a

1deposit 4.4% into the Income Tax Surcharge Local Government
2Distributive Fund in the State Treasury. Beginning July 1,
31993, and continuing through June 30, 1994, of the amounts
4collected under subsections (a) and (b) of Section 201 of this
5Act, minus deposits into the Income Tax Refund Fund, the
6Department shall deposit 1.475% into the Income Tax Surcharge
7Local Government Distributive Fund in the State Treasury.
8    (f) Deposits into the Fund for the Advancement of
9Education. Beginning February 1, 2015, the Department shall
10deposit the following portions of the revenue realized from the
11tax imposed upon individuals, trusts, and estates by
12subsections (a) and (b) of Section 201 of this Act during the
13preceding month, minus deposits into the Income Tax Refund
14Fund, into the Fund for the Advancement of Education:
15        (1) beginning February 1, 2015, and prior to February
16    1, 2025, 1/30; and
17        (2) beginning February 1, 2025, 1/26.
18    If the rate of tax imposed by subsection (a) and (b) of
19Section 201 is reduced pursuant to Section 201.5 of this Act,
20the Department shall not make the deposits required by this
21subsection (f) on or after the effective date of the reduction.
22    (g) Deposits into the Commitment to Human Services Fund.
23Beginning February 1, 2015, the Department shall deposit the
24following portions of the revenue realized from the tax imposed
25upon individuals, trusts, and estates by subsections (a) and
26(b) of Section 201 of this Act during the preceding month,

 

 

10000SB0009sam006- 182 -LRB100 06347 HLH 26817 a

1minus deposits into the Income Tax Refund Fund, into the
2Commitment to Human Services Fund:
3        (1) beginning February 1, 2015, and prior to February
4    1, 2025, 1/30; and
5        (2) beginning February 1, 2025, 1/26.
6    If the rate of tax imposed by subsection (a) and (b) of
7Section 201 is reduced pursuant to Section 201.5 of this Act,
8the Department shall not make the deposits required by this
9subsection (g) on or after the effective date of the reduction.
10    (h) Deposits into the Tax Compliance and Administration
11Fund. Beginning on the first day of the first calendar month to
12occur on or after August 26, 2014 (the effective date of Public
13Act 98-1098), each month the Department shall pay into the Tax
14Compliance and Administration Fund, to be used, subject to
15appropriation, to fund additional auditors and compliance
16personnel at the Department, an amount equal to 1/12 of 5% of
17the cash receipts collected during the preceding fiscal year by
18the Audit Bureau of the Department from the tax imposed by
19subsections (a), (b), (c), and (d) of Section 201 of this Act,
20net of deposits into the Income Tax Refund Fund made from those
21cash receipts.
22(Source: P.A. 98-24, eff. 6-19-13; 98-674, eff. 6-30-14;
2398-1052, eff. 8-26-14; 98-1098, eff. 8-26-14; 99-78, eff.
247-20-15.)
 
25    (35 ILCS 5/1501)  (from Ch. 120, par. 15-1501)

 

 

10000SB0009sam006- 183 -LRB100 06347 HLH 26817 a

1    Sec. 1501. Definitions.
2    (a) In general. When used in this Act, where not otherwise
3distinctly expressed or manifestly incompatible with the
4intent thereof:
5        (1) Business income. The term "business income" means
6    all income that may be treated as apportionable business
7    income under the Constitution of the United States.
8    Business income is net of the deductions allocable thereto.
9    Such term does not include compensation or the deductions
10    allocable thereto. For each taxable year beginning on or
11    after January 1, 2003, a taxpayer may elect to treat all
12    income other than compensation as business income. This
13    election shall be made in accordance with rules adopted by
14    the Department and, once made, shall be irrevocable.
15        (1.5) Captive real estate investment trust:
16            (A) The term "captive real estate investment
17        trust" means a corporation, trust, or association:
18                (i) that is considered a real estate
19            investment trust for the taxable year under
20            Section 856 of the Internal Revenue Code;
21                (ii) the certificates of beneficial interest
22            or shares of which are not regularly traded on an
23            established securities market; and
24                (iii) of which more than 50% of the voting
25            power or value of the beneficial interest or
26            shares, at any time during the last half of the

 

 

10000SB0009sam006- 184 -LRB100 06347 HLH 26817 a

1            taxable year, is owned or controlled, directly,
2            indirectly, or constructively, by a single
3            corporation.
4            (B) The term "captive real estate investment
5        trust" does not include:
6                (i) a real estate investment trust of which
7            more than 50% of the voting power or value of the
8            beneficial interest or shares is owned or
9            controlled, directly, indirectly, or
10            constructively, by:
11                    (a) a real estate investment trust, other
12                than a captive real estate investment trust;
13                    (b) a person who is exempt from taxation
14                under Section 501 of the Internal Revenue Code,
15                and who is not required to treat income
16                received from the real estate investment trust
17                as unrelated business taxable income under
18                Section 512 of the Internal Revenue Code;
19                    (c) a listed Australian property trust, if
20                no more than 50% of the voting power or value
21                of the beneficial interest or shares of that
22                trust, at any time during the last half of the
23                taxable year, is owned or controlled, directly
24                or indirectly, by a single person;
25                    (d) an entity organized as a trust,
26                provided a listed Australian property trust

 

 

10000SB0009sam006- 185 -LRB100 06347 HLH 26817 a

1                described in subparagraph (c) owns or
2                controls, directly or indirectly, or
3                constructively, 75% or more of the voting power
4                or value of the beneficial interests or shares
5                of such entity; or
6                    (e) an entity that is organized outside of
7                the laws of the United States and that
8                satisfies all of the following criteria:
9                        (1) at least 75% of the entity's total
10                    asset value at the close of its taxable
11                    year is represented by real estate assets
12                    (as defined in Section 856(c)(5)(B) of the
13                    Internal Revenue Code, thereby including
14                    shares or certificates of beneficial
15                    interest in any real estate investment
16                    trust), cash and cash equivalents, and
17                    U.S. Government securities;
18                        (2) the entity is not subject to tax on
19                    amounts that are distributed to its
20                    beneficial owners or is exempt from
21                    entity-level taxation;
22                        (3) the entity distributes at least
23                    85% of its taxable income (as computed in
24                    the jurisdiction in which it is organized)
25                    to the holders of its shares or
26                    certificates of beneficial interest on an

 

 

10000SB0009sam006- 186 -LRB100 06347 HLH 26817 a

1                    annual basis;
2                        (4) either (i) the shares or
3                    beneficial interests of the entity are
4                    regularly traded on an established
5                    securities market or (ii) not more than 10%
6                    of the voting power or value in the entity
7                    is held, directly, indirectly, or
8                    constructively, by a single entity or
9                    individual; and
10                        (5) the entity is organized in a
11                    country that has entered into a tax treaty
12                    with the United States; or
13                (ii) during its first taxable year for which it
14            elects to be treated as a real estate investment
15            trust under Section 856(c)(1) of the Internal
16            Revenue Code, a real estate investment trust the
17            certificates of beneficial interest or shares of
18            which are not regularly traded on an established
19            securities market, but only if the certificates of
20            beneficial interest or shares of the real estate
21            investment trust are regularly traded on an
22            established securities market prior to the earlier
23            of the due date (including extensions) for filing
24            its return under this Act for that first taxable
25            year or the date it actually files that return.
26            (C) For the purposes of this subsection (1.5), the

 

 

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1        constructive ownership rules prescribed under Section
2        318(a) of the Internal Revenue Code, as modified by
3        Section 856(d)(5) of the Internal Revenue Code, apply
4        in determining the ownership of stock, assets, or net
5        profits of any person.
6            (D) For the purposes of this item (1.5), for
7        taxable years ending on or after August 16, 2007, the
8        voting power or value of the beneficial interest or
9        shares of a real estate investment trust does not
10        include any voting power or value of beneficial
11        interest or shares in a real estate investment trust
12        held directly or indirectly in a segregated asset
13        account by a life insurance company (as described in
14        Section 817 of the Internal Revenue Code) to the extent
15        such voting power or value is for the benefit of
16        entities or persons who are either immune from taxation
17        or exempt from taxation under subtitle A of the
18        Internal Revenue Code.
19        (2) Commercial domicile. The term "commercial
20    domicile" means the principal place from which the trade or
21    business of the taxpayer is directed or managed.
22        (3) Compensation. The term "compensation" means wages,
23    salaries, commissions and any other form of remuneration
24    paid to employees for personal services.
25        (4) Corporation. The term "corporation" includes
26    associations, joint-stock companies, insurance companies

 

 

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1    and cooperatives. Any entity, including a limited
2    liability company formed under the Illinois Limited
3    Liability Company Act, shall be treated as a corporation if
4    it is so classified for federal income tax purposes.
5        (5) Department. The term "Department" means the
6    Department of Revenue of this State.
7        (6) Director. The term "Director" means the Director of
8    Revenue of this State.
9        (7) Fiduciary. The term "fiduciary" means a guardian,
10    trustee, executor, administrator, receiver, or any person
11    acting in any fiduciary capacity for any person.
12        (8) Financial organization.
13            (A) The term "financial organization" means any
14        bank, bank holding company, trust company, savings
15        bank, industrial bank, land bank, safe deposit
16        company, private banker, savings and loan association,
17        building and loan association, credit union, currency
18        exchange, cooperative bank, small loan company, sales
19        finance company, investment company, or any person
20        which is owned by a bank or bank holding company. For
21        the purpose of this Section a "person" will include
22        only those persons which a bank holding company may
23        acquire and hold an interest in, directly or
24        indirectly, under the provisions of the Bank Holding
25        Company Act of 1956 (12 U.S.C. 1841, et seq.), except
26        where interests in any person must be disposed of

 

 

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1        within certain required time limits under the Bank
2        Holding Company Act of 1956.
3            (B) For purposes of subparagraph (A) of this
4        paragraph, the term "bank" includes (i) any entity that
5        is regulated by the Comptroller of the Currency under
6        the National Bank Act, or by the Federal Reserve Board,
7        or by the Federal Deposit Insurance Corporation and
8        (ii) any federally or State chartered bank operating as
9        a credit card bank.
10            (C) For purposes of subparagraph (A) of this
11        paragraph, the term "sales finance company" has the
12        meaning provided in the following item (i) or (ii):
13                (i) A person primarily engaged in one or more
14            of the following businesses: the business of
15            purchasing customer receivables, the business of
16            making loans upon the security of customer
17            receivables, the business of making loans for the
18            express purpose of funding purchases of tangible
19            personal property or services by the borrower, or
20            the business of finance leasing. For purposes of
21            this item (i), "customer receivable" means:
22                    (a) a retail installment contract or
23                retail charge agreement within the meaning of
24                the Sales Finance Agency Act, the Retail
25                Installment Sales Act, or the Motor Vehicle
26                Retail Installment Sales Act;

 

 

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1                    (b) an installment, charge, credit, or
2                similar contract or agreement arising from the
3                sale of tangible personal property or services
4                in a transaction involving a deferred payment
5                price payable in one or more installments
6                subsequent to the sale; or
7                    (c) the outstanding balance of a contract
8                or agreement described in provisions (a) or (b)
9                of this item (i).
10                A customer receivable need not provide for
11            payment of interest on deferred payments. A sales
12            finance company may purchase a customer receivable
13            from, or make a loan secured by a customer
14            receivable to, the seller in the original
15            transaction or to a person who purchased the
16            customer receivable directly or indirectly from
17            that seller.
18                (ii) A corporation meeting each of the
19            following criteria:
20                    (a) the corporation must be a member of an
21                "affiliated group" within the meaning of
22                Section 1504(a) of the Internal Revenue Code,
23                determined without regard to Section 1504(b)
24                of the Internal Revenue Code;
25                    (b) more than 50% of the gross income of
26                the corporation for the taxable year must be

 

 

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1                interest income derived from qualifying loans.
2                A "qualifying loan" is a loan made to a member
3                of the corporation's affiliated group that
4                originates customer receivables (within the
5                meaning of item (i)) or to whom customer
6                receivables originated by a member of the
7                affiliated group have been transferred, to the
8                extent the average outstanding balance of
9                loans from that corporation to members of its
10                affiliated group during the taxable year do not
11                exceed the limitation amount for that
12                corporation. The "limitation amount" for a
13                corporation is the average outstanding
14                balances during the taxable year of customer
15                receivables (within the meaning of item (i))
16                originated by all members of the affiliated
17                group. If the average outstanding balances of
18                the loans made by a corporation to members of
19                its affiliated group exceed the limitation
20                amount, the interest income of that
21                corporation from qualifying loans shall be
22                equal to its interest income from loans to
23                members of its affiliated groups times a
24                fraction equal to the limitation amount
25                divided by the average outstanding balances of
26                the loans made by that corporation to members

 

 

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1                of its affiliated group;
2                    (c) the total of all shareholder's equity
3                (including, without limitation, paid-in
4                capital on common and preferred stock and
5                retained earnings) of the corporation plus the
6                total of all of its loans, advances, and other
7                obligations payable or owed to members of its
8                affiliated group may not exceed 20% of the
9                total assets of the corporation at any time
10                during the tax year; and
11                    (d) more than 50% of all interest-bearing
12                obligations of the affiliated group payable to
13                persons outside the group determined in
14                accordance with generally accepted accounting
15                principles must be obligations of the
16                corporation.
17            This amendatory Act of the 91st General Assembly is
18        declaratory of existing law.