101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB1727

 

Introduced 2/15/2019, by Sen. William E. Brady

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 405/2  from Ch. 120, par. 405A-2
35 ILCS 405/3  from Ch. 120, par. 405A-3
35 ILCS 405/4  from Ch. 120, par. 405A-4

    Amends the Illinois Estate and Generation-Skipping Transfer Tax Act. Provides that no tax shall be imposed under the Act for persons dying on or after July 1, 2019 or for transfers made on or after July 1, 2019. Effective immediately.


LRB101 06742 HLH 51769 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB1727LRB101 06742 HLH 51769 b

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

 

 

SB1727- 2 -LRB101 06742 HLH 51769 b

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

 

 

SB1727- 3 -LRB101 06742 HLH 51769 b

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 July 1, 2019, an amount equal to the full
9credit calculable under Section 2011 or 2604 of the Internal
10Revenue Code as the credit would have been computed and allowed
11under the Internal Revenue Code as in effect on December 31,
122001, without the reduction in the State Death Tax Credit as
13provided in Section 2011(b)(2) or the termination of the State
14Death Tax Credit as provided in Section 2011(f) as enacted by
15the Economic Growth and Tax Relief Reconciliation Act of 2001,
16but recognizing the exclusion amount of only (i) $2,000,000 for
17persons dying prior to January 1, 2012, (ii) $3,500,000 for
18persons dying on or after January 1, 2012 and prior to January
191, 2013, and (iii) $4,000,000 for persons dying on or after
20January 1, 2013, and with reduction to the adjusted taxable
21estate for any qualified terminable interest property election
22as defined in subsection (b-1) of this Section.
23    (b-1) The person required to file the Illinois return may
24elect on a timely filed Illinois return a marital deduction for
25qualified terminable interest property under Section
262056(b)(7) of the Internal Revenue Code for purposes of the

 

 

SB1727- 4 -LRB101 06742 HLH 51769 b

1Illinois estate tax that is separate and independent of any
2qualified terminable interest property election for federal
3estate tax purposes. For purposes of the Illinois estate tax,
4the inclusion of property in the gross estate of a surviving
5spouse is the same as under Section 2044 of the Internal
6Revenue Code.
7    In the case of any trust for which a State or federal
8qualified terminable interest property election is made, the
9trustee may not retain non-income producing assets for more
10than a reasonable amount of time without the consent of the
11surviving spouse.
12    "Taxable transfer" means an event that gives rise to a
13state tax credit, including any credit as a result of the
14imposition of an additional tax under Section 2032A(c) of the
15Internal Revenue Code.
16    "Transferee" means a transferee within the meaning of
17Section 2603(a)(1) and Section 6901(h) of the Internal Revenue
18Code.
19    "Transferred property" means:
20        (1) With respect to a taxable transfer occurring at the
21    death of an individual, the deceased individual's gross
22    estate as defined in Section 2031 of the Internal Revenue
23    Code.
24        (2) With respect to a taxable transfer occurring as a
25    result of a taxable termination as defined in Section
26    2612(a) of the Internal Revenue Code, the taxable amount

 

 

SB1727- 5 -LRB101 06742 HLH 51769 b

1    determined under Section 2622(a) of the Internal Revenue
2    Code.
3        (3) With respect to a taxable transfer occurring as a
4    result of a taxable distribution as defined in Section
5    2612(b) of the Internal Revenue Code, the taxable amount
6    determined under Section 2621(a) of the Internal Revenue
7    Code.
8        (4) With respect to an event which causes the
9    imposition of an additional estate tax under Section
10    2032A(c) of the Internal Revenue Code, the qualified real
11    property that was disposed of or which ceased to be used
12    for the qualified use, within the meaning of Section
13    2032A(c)(1) of the Internal Revenue Code.
14    "Trust" includes a trust as defined in Section 2652(b)(1)
15of the Internal Revenue Code.
16(Source: P.A. 96-789, eff. 9-8-09; 96-1496, eff. 1-13-11;
1797-636, eff. 6-1-12.)
 
18    (35 ILCS 405/3)  (from Ch. 120, par. 405A-3)
19    Sec. 3. Illinois estate tax.
20    (a) Imposition of Tax. An Illinois estate tax is imposed on
21every taxable transfer involving transferred property having a
22tax situs within the State of Illinois.
23    (b) Amount of tax. On estates of persons dying before
24January 1, 2003, the amount of the Illinois estate tax shall be
25the state tax credit, as defined in Section 2 of this Act, with

 

 

SB1727- 6 -LRB101 06742 HLH 51769 b

1respect to the taxable transfer reduced by the lesser of:
2        (1) the amount of the state tax credit paid to any
3    other state or states; and
4        (2) the amount determined by multiplying the maximum
5    state tax credit allowable with respect to the taxable
6    transfer by the percentage which the gross value of the
7    transferred property not having a tax situs in Illinois
8    bears to the gross value of the total transferred property.
9    (c) On estates of persons dying on or after January 1, 2003
10and prior to July 1, 2019, the amount of the Illinois estate
11tax shall be the state tax credit, as defined in Section 2 of
12this Act, reduced by the amount determined by multiplying the
13state tax credit with respect to the taxable transfer by the
14percentage which the gross value of the transferred property
15not having a tax situs in Illinois bears to the gross value of
16the total transferred property.
17    (d) No tax shall be imposed under this Act for persons
18dying on or after July 1, 2019.
19(Source: P.A. 93-30, eff. 6-20-03; 94-419, eff. 8-2-05.)
 
20    (35 ILCS 405/4)  (from Ch. 120, par. 405A-4)
21    Sec. 4. Illinois generation-skipping transfer tax.
22    (a) Imposition of tax. An Illinois generation-skipping
23transfer tax is imposed on every taxable transfer resulting in
24federal generation-skipping transfer tax involving transferred
25property having a tax situs within the State of Illinois.

 

 

SB1727- 7 -LRB101 06742 HLH 51769 b

1    (b) Amount of tax. The amount of the Illinois
2generation-skipping transfer tax shall be the maximum state tax
3credit allowable with respect to the taxable transfer, reduced
4by the lesser of:
5        (1) the amount of the state tax credit paid to any
6    other state or states; and
7        (2) the amount determined by multiplying the maximum
8    state tax credit allowable with respect to the taxable
9    transfer by the percentage which the gross value of the
10    transferred property not having a tax situs in Illinois
11    bears to the gross value of the total transferred property.
12    (c) No tax shall be imposed under this Act for transfers
13occurring on or after July 1, 2019.
14(Source: P.A. 86-737.)
 
15    Section 99. Effective date. This Act takes effect upon
16becoming law.