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1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Estate and Generation-Skipping
5Transfer Tax Act is amended by changing Sections 2, 3, and 4 as
6follows:
 
7    (35 ILCS 405/2)  (from Ch. 120, par. 405A-2)
8    Sec. 2. Definitions.
9    "Federal estate tax" means the tax due to the United States
10with respect to a taxable transfer under Chapter 11 of the
11Internal Revenue Code.
12    "Federal generation-skipping transfer tax" means the tax
13due to the United States with respect to a taxable transfer
14under Chapter 13 of the Internal Revenue Code.
15    "Federal return" means the federal estate tax return with
16respect to the federal estate tax and means the federal
17generation-skipping transfer tax return with respect to the
18federal generation-skipping transfer tax.
19    "Federal transfer tax" means the federal estate tax or the
20federal generation-skipping transfer tax.
21    "Illinois estate tax" means the tax due to this State with
22respect to a taxable transfer.
23    "Illinois generation-skipping transfer tax" means the tax

 

 

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1due to this State with respect to a taxable transfer that gives
2rise to a federal generation-skipping transfer tax.
3    "Illinois transfer tax" means the Illinois estate tax or
4the Illinois generation-skipping transfer tax.
5    "Internal Revenue Code" means, unless otherwise provided,
6the Internal Revenue Code of 1986, as amended from time to
7time.
8    "Non-resident trust" means a trust that is not a resident
9of this State for purposes of the Illinois Income Tax Act, as
10amended from time to time.
11    "Person" means and includes any individual, trust, estate,
12partnership, association, company or corporation.
13    "Qualified heir" means a qualified heir as defined in
14Section 2032A(e)(1) of the Internal Revenue Code.
15    "Resident trust" means a trust that is a resident of this
16State for purposes of the Illinois Income Tax Act, as amended
17from time to time.
18    "State" means any state, territory or possession of the
19United States and the District of Columbia.
20    "State tax credit" means:
21    (a) For persons dying on or after January 1, 2003 and
22through December 31, 2005, an amount equal to the full credit
23calculable under Section 2011 or Section 2604 of the Internal
24Revenue Code as the credit would have been computed and allowed
25under the Internal Revenue Code as in effect on December 31,
262001, without the reduction in the State Death Tax Credit as

 

 

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1provided in Section 2011(b)(2) or the termination of the State
2Death Tax Credit as provided in Section 2011(f) as enacted by
3the Economic Growth and Tax Relief Reconciliation Act of 2001,
4but recognizing the increased applicable exclusion amount
5through December 31, 2005.
6    (b) For persons dying after December 31, 2005 and on or
7before December 31, 2009, and for persons dying after December
831, 2010 and prior to January 1, 2021, an amount equal to the
9full credit calculable under Section 2011 or 2604 of the
10Internal Revenue Code as the credit would have been computed
11and allowed under the Internal Revenue Code as in effect on
12December 31, 2001, without the reduction in the State Death Tax
13Credit as provided in Section 2011(b)(2) or the termination of
14the State Death Tax Credit as provided in Section 2011(f) as
15enacted by the Economic Growth and Tax Relief Reconciliation
16Act of 2001, but recognizing the exclusion amount of only (i)
17$2,000,000 for persons dying prior to January 1, 2012, (ii)
18$3,500,000 for persons dying on or after January 1, 2012 and
19prior to January 1, 2013, and (iii) $4,000,000 for persons
20dying on or after January 1, 2013, and with reduction to the
21adjusted taxable estate for any qualified terminable interest
22property election as defined in subsection (b-1) of this
23Section.
24    (b-1) The person required to file the Illinois return may
25elect on a timely filed Illinois return a marital deduction for
26qualified terminable interest property under Section

 

 

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12056(b)(7) of the Internal Revenue Code for purposes of the
2Illinois estate tax that is separate and independent of any
3qualified terminable interest property election for federal
4estate tax purposes. For purposes of the Illinois estate tax,
5the inclusion of property in the gross estate of a surviving
6spouse is the same as under Section 2044 of the Internal
7Revenue Code.
8    In the case of any trust for which a State or federal
9qualified terminable interest property election is made, the
10trustee may not retain non-income producing assets for more
11than a reasonable amount of time without the consent of the
12surviving spouse.
13    "Taxable transfer" means an event that gives rise to a
14state tax credit, including any credit as a result of the
15imposition of an additional tax under Section 2032A(c) of the
16Internal Revenue Code.
17    "Transferee" means a transferee within the meaning of
18Section 2603(a)(1) and Section 6901(h) of the Internal Revenue
19Code.
20    "Transferred property" means:
21        (1) With respect to a taxable transfer occurring at the
22    death of an individual, the deceased individual's gross
23    estate as defined in Section 2031 of the Internal Revenue
24    Code.
25        (2) With respect to a taxable transfer occurring as a
26    result of a taxable termination as defined in Section

 

 

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1    2612(a) of the Internal Revenue Code, the taxable amount
2    determined under Section 2622(a) of the Internal Revenue
3    Code.
4        (3) With respect to a taxable transfer occurring as a
5    result of a taxable distribution as defined in Section
6    2612(b) of the Internal Revenue Code, the taxable amount
7    determined under Section 2621(a) of the Internal Revenue
8    Code.
9        (4) With respect to an event which causes the
10    imposition of an additional estate tax under Section
11    2032A(c) of the Internal Revenue Code, the qualified real
12    property that was disposed of or which ceased to be used
13    for the qualified use, within the meaning of Section
14    2032A(c)(1) of the Internal Revenue Code.
15    "Trust" includes a trust as defined in Section 2652(b)(1)
16of the Internal Revenue Code.
17(Source: P.A. 96-789, eff. 9-8-09; 96-1496, eff. 1-13-11;
1897-636, eff. 6-1-12.)
 
19    (35 ILCS 405/3)  (from Ch. 120, par. 405A-3)
20    Sec. 3. Illinois estate tax.
21    (a) Imposition of Tax. An Illinois estate tax is imposed on
22every taxable transfer involving transferred property having a
23tax situs within the State of Illinois.
24    (b) Amount of tax. On estates of persons dying before
25January 1, 2003, the amount of the Illinois estate tax shall be

 

 

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1the state tax credit, as defined in Section 2 of this Act, with
2respect to the taxable transfer reduced by the lesser of:
3        (1) the amount of the state tax credit paid to any
4    other state or states; and
5        (2) the amount determined by multiplying the maximum
6    state tax credit allowable with respect to the taxable
7    transfer by the percentage which the gross value of the
8    transferred property not having a tax situs in Illinois
9    bears to the gross value of the total transferred property.
10    (c) On estates of persons dying on or after January 1, 2003
11and prior to January 1, 2021, the amount of the Illinois estate
12tax shall be the state tax credit, as defined in Section 2 of
13this Act, reduced by the amount determined by multiplying the
14state tax credit with respect to the taxable transfer by the
15percentage which the gross value of the transferred property
16not having a tax situs in Illinois bears to the gross value of
17the total transferred property.
18    (d) No tax shall be imposed under this Act for persons
19dying on or after January 1, 2021.
20(Source: P.A. 93-30, eff. 6-20-03; 94-419, eff. 8-2-05.)
 
21    (35 ILCS 405/4)  (from Ch. 120, par. 405A-4)
22    Sec. 4. Illinois generation-skipping transfer tax.
23    (a) Imposition of tax. An Illinois generation-skipping
24transfer tax is imposed on every taxable transfer resulting in
25federal generation-skipping transfer tax involving transferred

 

 

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1property having a tax situs within the State of Illinois.
2    (b) Amount of tax. The amount of the Illinois
3generation-skipping transfer tax shall be the maximum state tax
4credit allowable with respect to the taxable transfer, reduced
5by the lesser of:
6        (1) the amount of the state tax credit paid to any
7    other state or states; and
8        (2) the amount determined by multiplying the maximum
9    state tax credit allowable with respect to the taxable
10    transfer by the percentage which the gross value of the
11    transferred property not having a tax situs in Illinois
12    bears to the gross value of the total transferred property.
13    (c) No tax shall be imposed under this Act for transfers
14occurring on or after January 1, 2021.
15(Source: P.A. 86-737.)
 
16    Section 99. Effective date. This Act takes effect on
17January 1, 2021, but does not take effect at all unless Senate
18Joint Resolution Constitutional Amendment No. 1 of the 101st
19General Assembly is approved by the voters prior to that date.