103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB3273

 

Introduced 2/6/2024, by Sen. Celina Villanueva

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/203

    Amends the Illinois Income Tax Act. Creates a deduction for an amount equal to the amount included in the taxpayer's federal adjusted gross income that is attributable to student loan repayment assistance received by the taxpayer during the taxable year from a qualified community foundation if the taxpayer is a qualified worker. Effective immediately.


LRB103 39224 HLH 69375 b

 

 

A BILL FOR

 

SB3273LRB103 39224 HLH 69375 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 Income Tax Act is amended by
5changing Section 203 as follows:
 
6    (35 ILCS 5/203)
7    Sec. 203. Base income defined.
8    (a) Individuals.
9        (1) In general. In the case of an individual, base
10    income means an amount equal to the taxpayer's adjusted
11    gross income for the taxable year as modified by paragraph
12    (2).
13        (2) Modifications. The adjusted gross income referred
14    to in paragraph (1) shall be modified by adding thereto
15    the sum of the following amounts:
16            (A) An amount equal to all amounts paid or accrued
17        to the taxpayer as interest or dividends during the
18        taxable year to the extent excluded from gross income
19        in the computation of adjusted gross income, except
20        stock dividends of qualified public utilities
21        described in Section 305(e) of the Internal Revenue
22        Code;
23            (B) An amount equal to the amount of tax imposed by

 

 

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

 

 

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

 

 

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

 

 

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1        in gross income under Section 78 of the Internal
2        Revenue Code) with respect to the stock of the same
3        person to whom the interest was paid, accrued, or
4        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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1        stock of the same person to whom the premiums and costs
2        were directly or indirectly paid, incurred, or
3        accrued. The preceding sentence does not apply to the
4        extent that the same dividends caused a reduction to
5        the addition modification required under Section
6        203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this
7        Act;
8            (D-20) For taxable years beginning on or after
9        January 1, 2002 and ending on or before December 31,
10        2006, in the case of a distribution from a qualified
11        tuition program under Section 529 of the Internal
12        Revenue Code, other than (i) a distribution from a
13        College Savings Pool created under Section 16.5 of the
14        State Treasurer Act or (ii) a distribution from the
15        Illinois Prepaid Tuition Trust Fund, an amount equal
16        to the amount excluded from gross income under Section
17        529(c)(3)(B). For taxable years beginning on or after
18        January 1, 2007, in the case of a distribution from a
19        qualified tuition program under Section 529 of the
20        Internal Revenue Code, other than (i) a distribution
21        from a College Savings Pool created under Section 16.5
22        of the State Treasurer Act, (ii) a distribution from
23        the Illinois Prepaid Tuition Trust Fund, or (iii) a
24        distribution from a qualified tuition program under
25        Section 529 of the Internal Revenue Code that (I)
26        adopts and determines that its offering materials

 

 

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1        comply with the College Savings Plans Network's
2        disclosure principles and (II) has made reasonable
3        efforts to inform in-state residents of the existence
4        of in-state qualified tuition programs by informing
5        Illinois residents directly and, where applicable, to
6        inform financial intermediaries distributing the
7        program to inform in-state residents of the existence
8        of in-state qualified tuition programs at least
9        annually, an amount equal to the amount excluded from
10        gross income under Section 529(c)(3)(B).
11            For the purposes of this subparagraph (D-20), a
12        qualified tuition program has made reasonable efforts
13        if it makes disclosures (which may use the term
14        "in-state program" or "in-state plan" and need not
15        specifically refer to Illinois or its qualified
16        programs by name) (i) directly to prospective
17        participants in its offering materials or makes a
18        public disclosure, such as a website posting; and (ii)
19        where applicable, to intermediaries selling the
20        out-of-state program in the same manner that the
21        out-of-state program distributes its offering
22        materials;
23            (D-20.5) For taxable years beginning on or after
24        January 1, 2018, in the case of a distribution from a
25        qualified ABLE program under Section 529A of the
26        Internal Revenue Code, other than a distribution from

 

 

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1        a qualified ABLE program created under Section 16.6 of
2        the State Treasurer Act, an amount equal to the amount
3        excluded from gross income under Section 529A(c)(1)(B)
4        of the Internal Revenue Code;
5            (D-21) For taxable years beginning on or after
6        January 1, 2007, in the case of transfer of moneys from
7        a qualified tuition program under Section 529 of the
8        Internal Revenue Code that is administered by the
9        State to an out-of-state program, an amount equal to
10        the amount of moneys previously deducted from base
11        income under subsection (a)(2)(Y) of this Section;
12            (D-21.5) For taxable years beginning on or after
13        January 1, 2018, in the case of the transfer of moneys
14        from a qualified tuition program under Section 529 or
15        a qualified ABLE program under Section 529A of the
16        Internal Revenue Code that is administered by this
17        State to an ABLE account established under an
18        out-of-state ABLE account program, an amount equal to
19        the contribution component of the transferred amount
20        that was previously deducted from base income under
21        subsection (a)(2)(Y) or subsection (a)(2)(HH) of this
22        Section;
23            (D-22) For taxable years beginning on or after
24        January 1, 2009, and prior to January 1, 2018, in the
25        case of a nonqualified withdrawal or refund of moneys
26        from a qualified tuition program under Section 529 of

 

 

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1        the Internal Revenue Code administered by the State
2        that is not used for qualified expenses at an eligible
3        education institution, an amount equal to the
4        contribution component of the nonqualified withdrawal
5        or refund that was previously deducted from base
6        income under subsection (a)(2)(y) of this Section,
7        provided that the withdrawal or refund did not result
8        from the beneficiary's death or disability. For
9        taxable years beginning on or after January 1, 2018:
10        (1) in the case of a nonqualified withdrawal or
11        refund, as defined under Section 16.5 of the State
12        Treasurer Act, of moneys from a qualified tuition
13        program under Section 529 of the Internal Revenue Code
14        administered by the State, an amount equal to the
15        contribution component of the nonqualified withdrawal
16        or refund that was previously deducted from base
17        income under subsection (a)(2)(Y) of this Section, and
18        (2) in the case of a nonqualified withdrawal or refund
19        from a qualified ABLE program under Section 529A of
20        the Internal Revenue Code administered by the State
21        that is not used for qualified disability expenses, an
22        amount equal to the contribution component of the
23        nonqualified withdrawal or refund that was previously
24        deducted from base income under subsection (a)(2)(HH)
25        of this Section;
26            (D-23) An amount equal to the credit allowable to

 

 

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1        the taxpayer under Section 218(a) of this Act,
2        determined without regard to Section 218(c) of this
3        Act;
4            (D-24) For taxable years ending on or after
5        December 31, 2017, an amount equal to the deduction
6        allowed under Section 199 of the Internal Revenue Code
7        for the taxable year;
8            (D-25) In the case of a resident, an amount equal
9        to the amount of tax for which a credit is allowed
10        pursuant to Section 201(p)(7) of this Act;
11    and by deducting from the total so obtained the sum of the
12    following amounts:
13            (E) For taxable years ending before December 31,
14        2001, any amount included in such total in respect of
15        any compensation (including but not limited to any
16        compensation paid or accrued to a serviceman while a
17        prisoner of war or missing in action) paid to a
18        resident by reason of being on active duty in the Armed
19        Forces of the United States and in respect of any
20        compensation paid or accrued to a resident who as a
21        governmental employee was a prisoner of war or missing
22        in action, and in respect of any compensation paid to a
23        resident in 1971 or thereafter for annual training
24        performed pursuant to Sections 502 and 503, Title 32,
25        United States Code as a member of the Illinois
26        National Guard or, beginning with taxable years ending

 

 

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1        on or after December 31, 2007, the National Guard of
2        any other state. For taxable years ending on or after
3        December 31, 2001, any amount included in such total
4        in respect of any compensation (including but not
5        limited to any compensation paid or accrued to a
6        serviceman while a prisoner of war or missing in
7        action) paid to a resident by reason of being a member
8        of any component of the Armed Forces of the United
9        States and in respect of any compensation paid or
10        accrued to a resident who as a governmental employee
11        was a prisoner of war or missing in action, and in
12        respect of any compensation paid to a resident in 2001
13        or thereafter by reason of being a member of the
14        Illinois National Guard or, beginning with taxable
15        years ending on or after December 31, 2007, the
16        National Guard of any other state. The provisions of
17        this subparagraph (E) are exempt from the provisions
18        of Section 250;
19            (F) An amount equal to all amounts included in
20        such total pursuant to the provisions of Sections
21        402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
22        408 of the Internal Revenue Code, or included in such
23        total as distributions under the provisions of any
24        retirement or disability plan for employees of any
25        governmental agency or unit, or retirement payments to
26        retired partners, which payments are excluded in

 

 

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1        computing net earnings from self employment by Section
2        1402 of the Internal Revenue Code and regulations
3        adopted pursuant thereto;
4            (G) The valuation limitation amount;
5            (H) An amount equal to the amount of any tax
6        imposed by this Act which was refunded to the taxpayer
7        and included in such total for the taxable year;
8            (I) An amount equal to all amounts included in
9        such total pursuant to the provisions of Section 111
10        of the Internal Revenue Code as a recovery of items
11        previously deducted from adjusted gross income in the
12        computation of taxable income;
13            (J) An amount equal to those dividends included in
14        such total which were paid by a corporation which
15        conducts business operations in a River Edge
16        Redevelopment Zone or zones created under the River
17        Edge Redevelopment Zone Act, and conducts
18        substantially all of its operations in a River Edge
19        Redevelopment Zone or zones. This subparagraph (J) is
20        exempt from the provisions of Section 250;
21            (K) An amount equal to those dividends included in
22        such total that were paid by a corporation that
23        conducts business operations in a federally designated
24        Foreign Trade Zone or Sub-Zone and that is designated
25        a High Impact Business located in Illinois; provided
26        that dividends eligible for the deduction provided in

 

 

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1        subparagraph (J) of paragraph (2) of this subsection
2        shall not be eligible for the deduction provided under
3        this subparagraph (K);
4            (L) For taxable years ending after December 31,
5        1983, an amount equal to all social security benefits
6        and railroad retirement benefits included in such
7        total pursuant to Sections 72(r) and 86 of the
8        Internal Revenue Code;
9            (M) With the exception of any amounts subtracted
10        under subparagraph (N), an amount equal to the sum of
11        all amounts disallowed as deductions by (i) Sections
12        171(a)(2) and 265(a)(2) of the Internal Revenue Code,
13        and all amounts of expenses allocable to interest and
14        disallowed as deductions by Section 265(a)(1) of the
15        Internal Revenue Code; and (ii) for taxable years
16        ending on or after August 13, 1999, Sections
17        171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
18        Internal Revenue Code, plus, for taxable years ending
19        on or after December 31, 2011, Section 45G(e)(3) of
20        the Internal Revenue Code and, for taxable years
21        ending on or after December 31, 2008, any amount
22        included in gross income under Section 87 of the
23        Internal Revenue Code; the provisions of this
24        subparagraph are exempt from the provisions of Section
25        250;
26            (N) An amount equal to all amounts included in

 

 

SB3273- 19 -LRB103 39224 HLH 69375 b

1        such total which are exempt from taxation by this
2        State either by reason of its statutes or Constitution
3        or by reason of the Constitution, treaties or statutes
4        of the 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
8        net of bond premium amortization;
9            (O) An amount equal to any contribution made to a
10        job training project established pursuant to the Tax
11        Increment Allocation Redevelopment Act;
12            (P) An amount equal to the amount of the deduction
13        used to compute the federal income tax credit for
14        restoration of substantial amounts held under claim of
15        right for the taxable year pursuant to Section 1341 of
16        the Internal Revenue Code or of any itemized deduction
17        taken from adjusted gross income in the computation of
18        taxable income for restoration of substantial amounts
19        held under claim of right for the taxable year;
20            (Q) An amount equal to any amounts included in
21        such total, received by the taxpayer as an
22        acceleration in the payment of life, endowment or
23        annuity benefits in advance of the time they would
24        otherwise be payable as an indemnity for a terminal
25        illness;
26            (R) An amount equal to the amount of any federal or

 

 

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1        State bonus paid to veterans of the Persian Gulf War;
2            (S) An amount, to the extent included in adjusted
3        gross income, equal to the amount of a contribution
4        made in the taxable year on behalf of the taxpayer to a
5        medical care savings account established under the
6        Medical Care Savings Account Act or the Medical Care
7        Savings Account Act of 2000 to the extent the
8        contribution is accepted by the account administrator
9        as provided in that Act;
10            (T) An amount, to the extent included in adjusted
11        gross income, equal to the amount of interest earned
12        in the taxable year on a medical care savings account
13        established under the Medical Care Savings Account Act
14        or the Medical Care Savings Account Act of 2000 on
15        behalf of the taxpayer, other than interest added
16        pursuant to item (D-5) of this paragraph (2);
17            (U) For one taxable year beginning on or after
18        January 1, 1994, an amount equal to the total amount of
19        tax imposed and paid under subsections (a) and (b) of
20        Section 201 of this Act on grant amounts received by
21        the taxpayer under the Nursing Home Grant Assistance
22        Act during the taxpayer's taxable years 1992 and 1993;
23            (V) Beginning with tax years ending on or after
24        December 31, 1995 and ending with tax years ending on
25        or before December 31, 2004, an amount equal to the
26        amount paid by a taxpayer who is a self-employed

 

 

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1        taxpayer, a partner of a partnership, or a shareholder
2        in a Subchapter S corporation for health insurance or
3        long-term care insurance for that taxpayer or that
4        taxpayer's spouse or dependents, to the extent that
5        the amount paid for that health insurance or long-term
6        care insurance may be deducted under Section 213 of
7        the Internal Revenue Code, has not been deducted on
8        the federal income tax return of the taxpayer, and
9        does not exceed the taxable income attributable to
10        that taxpayer's income, self-employment income, or
11        Subchapter S corporation income; except that no
12        deduction shall be allowed under this item (V) if the
13        taxpayer is eligible to participate in any health
14        insurance or long-term care insurance plan of an
15        employer of the taxpayer or the taxpayer's spouse. The
16        amount of the health insurance and long-term care
17        insurance subtracted under this item (V) shall be
18        determined by multiplying total health insurance and
19        long-term care insurance premiums paid by the taxpayer
20        times a number that represents the fractional
21        percentage of eligible medical expenses under Section
22        213 of the Internal Revenue Code of 1986 not actually
23        deducted on the taxpayer's federal income tax return;
24            (W) For taxable years beginning on or after
25        January 1, 1998, all amounts included in the
26        taxpayer's federal gross income in the taxable year

 

 

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1        from amounts converted from a regular IRA to a Roth
2        IRA. This paragraph is exempt from the provisions of
3        Section 250;
4            (X) For taxable year 1999 and thereafter, an
5        amount equal to the amount of any (i) distributions,
6        to the extent includible in gross income for federal
7        income tax purposes, made to the taxpayer because of
8        his or her status as a victim of persecution for racial
9        or religious reasons by Nazi Germany or any other Axis
10        regime or as an heir of the victim and (ii) items of
11        income, to the extent includible in gross income for
12        federal income tax purposes, attributable to, derived
13        from or in any way related to assets stolen from,
14        hidden from, or otherwise lost to a victim of
15        persecution for racial or religious reasons by Nazi
16        Germany or any other Axis regime immediately prior to,
17        during, and immediately after World War II, including,
18        but not limited to, interest on the proceeds
19        receivable as insurance under policies issued to a
20        victim of persecution for racial or religious reasons
21        by Nazi Germany or any other Axis regime by European
22        insurance companies immediately prior to and during
23        World War II; provided, however, this subtraction from
24        federal adjusted gross income does not apply to assets
25        acquired with such assets or with the proceeds from
26        the sale of such assets; provided, further, this

 

 

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

 

 

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1        of this subparagraph, contributions made by an
2        employer on behalf of an employee, or matching
3        contributions made by an employee, shall be treated as
4        made by the employee. This subparagraph (Y) is exempt
5        from the provisions of Section 250;
6            (Z) For taxable years 2001 and thereafter, for the
7        taxable year in which the bonus depreciation deduction
8        is taken on the taxpayer's federal income tax return
9        under subsection (k) of Section 168 of the Internal
10        Revenue Code and for each applicable taxable year
11        thereafter, an amount equal to "x", where:
12                (1) "y" equals the amount of the depreciation
13            deduction taken for the taxable year on the
14            taxpayer's federal income tax return on property
15            for which the bonus depreciation deduction was
16            taken in any year under subsection (k) of Section
17            168 of the Internal Revenue Code, but not
18            including the bonus depreciation deduction;
19                (2) for taxable years ending on or before
20            December 31, 2005, "x" equals "y" multiplied by 30
21            and then divided by 70 (or "y" multiplied by
22            0.429); and
23                (3) for taxable years ending after December
24            31, 2005:
25                    (i) for property on which a bonus
26                depreciation deduction of 30% of the adjusted

 

 

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1                basis was taken, "x" equals "y" multiplied by
2                30 and then divided by 70 (or "y" multiplied
3                by 0.429);
4                    (ii) for property on which a bonus
5                depreciation deduction of 50% of the adjusted
6                basis was taken, "x" equals "y" multiplied by
7                1.0;
8                    (iii) for property on which a bonus
9                depreciation deduction of 100% of the adjusted
10                basis was taken in a taxable year ending on or
11                after December 31, 2021, "x" equals the
12                depreciation deduction that would be allowed
13                on that property if the taxpayer had made the
14                election under Section 168(k)(7) of the
15                Internal Revenue Code to not claim bonus
16                depreciation on that property; and
17                    (iv) for property on which a bonus
18                depreciation deduction of a percentage other
19                than 30%, 50% or 100% of the adjusted basis
20                was taken in a taxable year ending on or after
21                December 31, 2021, "x" equals "y" multiplied
22                by 100 times the percentage bonus depreciation
23                on the property (that is, 100(bonus%)) and
24                then divided by 100 times 1 minus the
25                percentage bonus depreciation on the property
26                (that is, 100(1-bonus%)).

 

 

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1            The aggregate amount deducted under this
2        subparagraph in all taxable years for any one piece of
3        property may not exceed the amount of the bonus
4        depreciation deduction taken on that property on the
5        taxpayer's federal income tax return under subsection
6        (k) of Section 168 of the Internal Revenue Code. This
7        subparagraph (Z) is exempt from the provisions of
8        Section 250;
9            (AA) 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 (D-15), then
13        an amount equal to that addition modification.
14            If the taxpayer continues to own property through
15        the last day of the last tax year for which a
16        subtraction is allowed with respect to that property
17        under subparagraph (Z) and for which the taxpayer was
18        required in any taxable year to make an addition
19        modification under subparagraph (D-15), then an amount
20        equal to that addition modification.
21            The taxpayer is allowed to take the deduction
22        under this subparagraph only once with respect to any
23        one piece of property.
24            This subparagraph (AA) is exempt from the
25        provisions of Section 250;
26            (BB) Any amount included in adjusted gross income,

 

 

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

 

 

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

 

 

SB3273- 29 -LRB103 39224 HLH 69375 b

1        included in the unitary business group because he or
2        she is ordinarily required to apportion business
3        income under different subsections of Section 304, but
4        not to exceed the addition modification required to be
5        made for the same taxable year under Section
6        203(a)(2)(D-18) for intangible expenses and costs
7        paid, accrued, or incurred, directly or indirectly, to
8        the same foreign person. This subparagraph (EE) is
9        exempt from the provisions of Section 250;
10            (FF) An amount equal to any amount awarded to the
11        taxpayer during the taxable year by the Court of
12        Claims under subsection (c) of Section 8 of the Court
13        of Claims Act for time unjustly served in a State
14        prison. This subparagraph (FF) is exempt from the
15        provisions of Section 250;
16            (GG) For taxable years ending on or after December
17        31, 2011, in the case of a taxpayer who was required to
18        add back any insurance premiums under Section
19        203(a)(2)(D-19), such taxpayer may elect to subtract
20        that part of a reimbursement received from the
21        insurance company equal to the amount of the expense
22        or loss (including expenses incurred by the insurance
23        company) that would have been taken into account as a
24        deduction for federal income tax purposes if the
25        expense or loss had been uninsured. If a taxpayer
26        makes the election provided for by this subparagraph

 

 

SB3273- 30 -LRB103 39224 HLH 69375 b

1        (GG), the insurer to which the premiums were paid must
2        add back to income the amount subtracted by the
3        taxpayer pursuant to this subparagraph (GG). This
4        subparagraph (GG) is exempt from the provisions of
5        Section 250;
6            (HH) For taxable years beginning on or after
7        January 1, 2018 and prior to January 1, 2028, a maximum
8        of $10,000 contributed in the taxable year to a
9        qualified ABLE account under Section 16.6 of the State
10        Treasurer Act, except that amounts excluded from gross
11        income under Section 529(c)(3)(C)(i) or Section
12        529A(c)(1)(C) of the Internal Revenue Code shall not
13        be considered moneys contributed under this
14        subparagraph (HH). For purposes of this subparagraph
15        (HH), contributions made by an employer on behalf of
16        an employee, or matching contributions made by an
17        employee, shall be treated as made by the employee;
18            (II) For taxable years that begin on or after
19        January 1, 2021 and begin before January 1, 2026, the
20        amount that is included in the taxpayer's federal
21        adjusted gross income pursuant to Section 61 of the
22        Internal Revenue Code as discharge of indebtedness
23        attributable to student loan forgiveness and that is
24        not excluded from the taxpayer's federal adjusted
25        gross income pursuant to paragraph (5) of subsection
26        (f) of Section 108 of the Internal Revenue Code; and

 

 

SB3273- 31 -LRB103 39224 HLH 69375 b

1            (JJ) For taxable years beginning on or after
2        January 1, 2023, for any cannabis establishment
3        operating in this State and licensed under the
4        Cannabis Regulation and Tax Act or any cannabis
5        cultivation center or medical cannabis dispensing
6        organization operating in this State and licensed
7        under the Compassionate Use of Medical Cannabis
8        Program Act, an amount equal to the deductions that
9        were disallowed under Section 280E of the Internal
10        Revenue Code for the taxable year and that would not be
11        added back under this subsection. The provisions of
12        this subparagraph (JJ) are exempt from the provisions
13        of Section 250; .
14            (KK) (JJ) To the extent includible in gross income
15        for federal income tax purposes, any amount awarded or
16        paid to the taxpayer as a result of a judgment or
17        settlement for fertility fraud as provided in Section
18        15 of the Illinois Fertility Fraud Act, donor
19        fertility fraud as provided in Section 20 of the
20        Illinois Fertility Fraud Act, or similar action in
21        another state; and .
22            (LL) For taxable years beginning on or after
23        January 1, 2025, if the taxpayer is a qualified
24        worker, an amount equal to the amount included in the
25        taxpayer's federal adjusted gross income that is
26        attributable to student loan repayment assistance

 

 

SB3273- 32 -LRB103 39224 HLH 69375 b

1        received by the taxpayer during the taxable year from
2        a qualified community foundation.
3            As used in this paragraph (LL):
4            "Full-time employee" means an individual who is
5        employed for consideration for at least 35 hours each
6        week or who renders any other standard of service
7        generally accepted by industry custom or practice as
8        full-time employment.
9            "Qualified community foundation" means a community
10        foundation or similar publicly supported organization
11        described in Section 170(b)(1)(A)(vi) of the Internal
12        Revenue Code of 1986 that is organized or operating in
13        this State and that substantially complies, as
14        determined by the Department of Revenue, with the
15        national standards for United States community
16        foundations established by the National Council on
17        Foundations.
18            "Qualified worker" means an individual who meets
19        all of the following:
20                (1) the individual is a full-time employee of
21            a business that meets one or more of the
22            following:
23                    (A) the business is a qualified new
24                business venture that is registered with the
25                Department of Commerce and Economic
26                Opportunity under Section 220 of the Illinois

 

 

SB3273- 33 -LRB103 39224 HLH 69375 b

1                Income Tax Act;
2                    (B) the business is primarily engaged in a
3                targeted growth industry;
4                    (C) the business is a minority-owned
5                business, a women-owned business, or a
6                business owned by a person with a disability,
7                as those terms are defined in the Business
8                Enterprise for Minorities, Women, and Persons
9                with Disabilities Act; or
10                    (D) the business is a not-for-profit
11                corporation, as defined in the General Not For
12                Profit Corporation Act of 1986;
13                (2) the individual is employed by the business
14            described in paragraph (1) at a job site that is
15            located in an Enterprise Zone, an Opportunity
16            Zone, an underserved area, or an area that has a
17            bachelor's degree attainment rate for the
18            population that is below the State or national
19            average for the population, as determined by the
20            United States Census Bureau;
21                (3) the individual is a United States citizen
22            or an eligible non-citizen;
23                (4) the individual (i) received a bachelor's
24            degree or higher and has an outstanding balance
25            due on a qualified education loan, as defined in
26            Section 221 of the Internal Revenue Code, or (ii)

 

 

SB3273- 34 -LRB103 39224 HLH 69375 b

1            the individual accrued educational debt while
2            pursuing skilled trades and related schooling; and
3                (5) the individual does not receive any other
4            student loan forgiveness.
5            "Student loan repayment assistance" means grants
6        or post-graduation scholarships made by a community
7        foundation directly to a student loan servicer on
8        behalf of a qualified worker.
9            "Targeted growth industry means one or more of the
10        following:
11                (1) advanced manufacturing;
12                (2) agribusiness and food processing;
13                (3) transportation distribution and logistics;
14                (4) life sciences and biotechnology;
15                (5) business and professional services; or
16                (6) energy.
17            "Underserved area" has the meaning given to that
18        term in Section 5-5 of the Economic Development for a
19        Growing Economy Tax Credit Act.
20            This subparagraph (LL) is exempt from the
21        provisions of Section 250.
 
22    (b) Corporations.
23        (1) In general. In the case of a corporation, base
24    income means an amount equal to the taxpayer's taxable
25    income for the taxable year as modified by paragraph (2).

 

 

SB3273- 35 -LRB103 39224 HLH 69375 b

1        (2) Modifications. The taxable income referred to in
2    paragraph (1) shall be modified by adding thereto the sum
3    of the following amounts:
4            (A) An amount equal to all amounts paid or accrued
5        to the taxpayer as interest and all distributions
6        received from regulated investment companies during
7        the taxable year to the extent excluded from gross
8        income in the computation of taxable income;
9            (B) An amount equal to the amount of tax imposed by
10        this Act to the extent deducted from gross income in
11        the computation of taxable income for the taxable
12        year;
13            (C) In the case of a regulated investment company,
14        an amount equal to the excess of (i) the net long-term
15        capital gain for the taxable year, over (ii) the
16        amount of the capital gain dividends designated as
17        such in accordance with Section 852(b)(3)(C) of the
18        Internal Revenue Code and any amount designated under
19        Section 852(b)(3)(D) of the Internal Revenue Code,
20        attributable to the taxable year (this amendatory Act
21        of 1995 (Public Act 89-89) is declarative of existing
22        law and is not a new enactment);
23            (D) The amount of any net operating loss deduction
24        taken in arriving at taxable income, other than a net
25        operating loss carried forward from a taxable year
26        ending prior to December 31, 1986;

 

 

SB3273- 36 -LRB103 39224 HLH 69375 b

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

 

 

SB3273- 37 -LRB103 39224 HLH 69375 b

1        31, 1986, the addition modification provided in this
2        subparagraph (E) shall be the sum of the amounts
3        computed independently under the preceding provisions
4        of this subparagraph (E) for each such taxable year;
5            (E-5) For taxable years ending after December 31,
6        1997, an amount equal to any eligible remediation
7        costs that the corporation deducted in computing
8        adjusted gross income and for which the corporation
9        claims a credit under subsection (l) of Section 201;
10            (E-10) For taxable years 2001 and thereafter, an
11        amount equal to the bonus depreciation deduction taken
12        on the taxpayer's federal income tax return for the
13        taxable year under subsection (k) of Section 168 of
14        the Internal Revenue Code;
15            (E-11) If the taxpayer sells, transfers, abandons,
16        or otherwise disposes of property for which the
17        taxpayer was required in any taxable year to make an
18        addition modification under subparagraph (E-10), then
19        an amount equal to the aggregate amount of the
20        deductions taken in all taxable years under
21        subparagraph (T) with respect to that property.
22            If the taxpayer continues to own property through
23        the last day of the last tax year for which a
24        subtraction is allowed with respect to that property
25        under subparagraph (T) and for which the taxpayer was
26        allowed in any taxable year to make a subtraction

 

 

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1        modification under subparagraph (T), then an amount
2        equal to that subtraction modification.
3            The taxpayer is required to make the addition
4        modification under this subparagraph only once with
5        respect to any one piece of property;
6            (E-12) An amount equal to the amount otherwise
7        allowed as a deduction in computing base income for
8        interest paid, accrued, or incurred, directly or
9        indirectly, (i) for taxable years ending on or after
10        December 31, 2004, to a foreign person who would be a
11        member of the same unitary business group but for the
12        fact the foreign person's business activity outside
13        the United States is 80% or more of the foreign
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. The addition modification
22        required by this subparagraph shall be reduced to the
23        extent that dividends were included in base income of
24        the unitary group for the same taxable year and
25        received by the taxpayer or by a member of the
26        taxpayer's unitary business group (including amounts

 

 

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1        included in gross income pursuant to Sections 951
2        through 964 of the Internal Revenue Code and amounts
3        included in gross income under Section 78 of the
4        Internal Revenue Code) with respect to the stock of
5        the same person to whom the interest was paid,
6        accrued, or incurred.
7            This paragraph shall not apply to the following:
8                (i) an item of interest paid, accrued, or
9            incurred, directly or indirectly, to a person who
10            is subject in a foreign country or state, other
11            than a state which requires mandatory unitary
12            reporting, to a tax on or measured by net income
13            with respect to such interest; or
14                (ii) an item of interest paid, accrued, or
15            incurred, directly or indirectly, to a person if
16            the taxpayer can establish, based on a
17            preponderance of the evidence, both of the
18            following:
19                    (a) the person, during the same taxable
20                year, paid, accrued, or incurred, the interest
21                to a person that is not a related member, and
22                    (b) the transaction giving rise to the
23                interest expense between the taxpayer and the
24                person did not have as a principal purpose the
25                avoidance of Illinois income tax, and is paid
26                pursuant to a contract or agreement that

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1        and amounts included in gross income under Section 78
2        of the Internal Revenue Code) with respect to the
3        stock of the same person to whom the premiums and costs
4        were directly or indirectly paid, incurred, or
5        accrued. The preceding sentence does not apply to the
6        extent that the same dividends caused a reduction to
7        the addition modification required under Section
8        203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this
9        Act;
10            (E-15) For taxable years beginning after December
11        31, 2008, any deduction for dividends paid by a
12        captive real estate investment trust that is allowed
13        to a real estate investment trust under Section
14        857(b)(2)(B) of the Internal Revenue Code for
15        dividends paid;
16            (E-16) An amount equal to the credit allowable to
17        the taxpayer under Section 218(a) of this Act,
18        determined without regard to Section 218(c) of this
19        Act;
20            (E-17) For taxable years ending on or after
21        December 31, 2017, an amount equal to the deduction
22        allowed under Section 199 of the Internal Revenue Code
23        for the taxable year;
24            (E-18) for taxable years beginning after December
25        31, 2018, an amount equal to the deduction allowed
26        under Section 250(a)(1)(A) of the Internal Revenue

 

 

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1        Code for the taxable year;
2            (E-19) for taxable years ending on or after June
3        30, 2021, an amount equal to the deduction allowed
4        under Section 250(a)(1)(B)(i) of the Internal Revenue
5        Code for the taxable year;
6            (E-20) for taxable years ending on or after June
7        30, 2021, an amount equal to the deduction allowed
8        under Sections 243(e) and 245A(a) of the Internal
9        Revenue Code for the taxable year.
10    and by deducting from the total so obtained the sum of the
11    following amounts:
12            (F) An amount equal to the amount of any tax
13        imposed by this Act which was refunded to the taxpayer
14        and included in such total for the taxable year;
15            (G) An amount equal to any amount included in such
16        total under Section 78 of the Internal Revenue Code;
17            (H) In the case of a regulated investment company,
18        an amount equal to the amount of exempt interest
19        dividends as defined in subsection (b)(5) of Section
20        852 of the Internal Revenue Code, paid to shareholders
21        for the taxable year;
22            (I) With the exception of any amounts subtracted
23        under subparagraph (J), an amount equal to the sum of
24        all amounts disallowed as deductions by (i) Sections
25        171(a)(2) and 265(a)(2) and amounts disallowed as
26        interest expense by Section 291(a)(3) of the Internal

 

 

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

 

 

SB3273- 48 -LRB103 39224 HLH 69375 b

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

 

 

SB3273- 49 -LRB103 39224 HLH 69375 b

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

 

 

SB3273- 50 -LRB103 39224 HLH 69375 b

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

 

 

SB3273- 51 -LRB103 39224 HLH 69375 b

1        or under Section 10-10 of the River Edge Redevelopment
2        Zone Act. This subparagraph (N) is exempt from the
3        provisions of Section 250;
4            (O) An amount equal to: (i) 85% for taxable years
5        ending on or before December 31, 1992, or, a
6        percentage equal to the percentage allowable under
7        Section 243(a)(1) of the Internal Revenue Code of 1986
8        for taxable years ending after December 31, 1992, of
9        the amount by which dividends included in taxable
10        income and received from a corporation that is not
11        created or organized under the laws of the United
12        States or any state or political subdivision thereof,
13        including, for taxable years ending on or after
14        December 31, 1988, dividends received or deemed
15        received or paid or deemed paid under Sections 951
16        through 965 of the Internal Revenue Code, exceed the
17        amount of the modification provided under subparagraph
18        (G) of paragraph (2) of this subsection (b) which is
19        related to such dividends, and including, for taxable
20        years ending on or after December 31, 2008, dividends
21        received from a captive real estate investment trust;
22        plus (ii) 100% of the amount by which dividends,
23        included in taxable income and received, including,
24        for taxable years ending on or after December 31,
25        1988, dividends received or deemed received or paid or
26        deemed paid under Sections 951 through 964 of the

 

 

SB3273- 52 -LRB103 39224 HLH 69375 b

1        Internal Revenue Code and including, for taxable years
2        ending on or after December 31, 2008, dividends
3        received from a captive real estate investment trust,
4        from any such corporation specified in clause (i) that
5        would but for the provisions of Section 1504(b)(3) of
6        the Internal Revenue Code be treated as a member of the
7        affiliated group which includes the dividend
8        recipient, exceed the amount of the modification
9        provided under subparagraph (G) of paragraph (2) of
10        this subsection (b) which is related to such
11        dividends. For taxable years ending on or after June
12        30, 2021, (i) for purposes of this subparagraph, the
13        term "dividend" does not include any amount treated as
14        a dividend under Section 1248 of the Internal Revenue
15        Code, and (ii) this subparagraph shall not apply to
16        dividends for which a deduction is allowed under
17        Section 245(a) of the Internal Revenue Code. This
18        subparagraph (O) is exempt from the provisions of
19        Section 250 of this Act;
20            (P) An amount equal to any contribution made to a
21        job training project established pursuant to the Tax
22        Increment Allocation Redevelopment Act;
23            (Q) 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

 

 

SB3273- 53 -LRB103 39224 HLH 69375 b

1        the Internal Revenue Code;
2            (R) On and after July 20, 1999, in the case of an
3        attorney-in-fact with respect to whom an interinsurer
4        or a reciprocal insurer has made the election under
5        Section 835 of the Internal Revenue Code, 26 U.S.C.
6        835, an amount equal to the excess, if any, of the
7        amounts paid or incurred by that interinsurer or
8        reciprocal insurer in the taxable year to the
9        attorney-in-fact over the deduction allowed to that
10        interinsurer or reciprocal insurer with respect to the
11        attorney-in-fact under Section 835(b) of the Internal
12        Revenue Code for the taxable year; the provisions of
13        this subparagraph are exempt from the provisions of
14        Section 250;
15            (S) For taxable years ending on or after December
16        31, 1997, in the case of a Subchapter S corporation, an
17        amount equal to all amounts of income allocable to a
18        shareholder subject to the Personal Property Tax
19        Replacement Income Tax imposed by subsections (c) and
20        (d) of Section 201 of this Act, including amounts
21        allocable to organizations exempt from federal income
22        tax by reason of Section 501(a) of the Internal
23        Revenue Code. This subparagraph (S) is exempt from the
24        provisions of Section 250;
25            (T) For taxable years 2001 and thereafter, for the
26        taxable year in which the bonus depreciation deduction

 

 

SB3273- 54 -LRB103 39224 HLH 69375 b

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

 

 

SB3273- 55 -LRB103 39224 HLH 69375 b

1                    (iii) for property on which a bonus
2                depreciation deduction of 100% of the adjusted
3                basis was taken in a taxable year ending on or
4                after December 31, 2021, "x" equals the
5                depreciation deduction that would be allowed
6                on that property if the taxpayer had made the
7                election under Section 168(k)(7) of the
8                Internal Revenue Code to not claim bonus
9                depreciation on that property; and
10                    (iv) for property on which a bonus
11                depreciation deduction of a percentage other
12                than 30%, 50% or 100% of the adjusted basis
13                was taken in a taxable year ending on or after
14                December 31, 2021, "x" equals "y" multiplied
15                by 100 times the percentage bonus depreciation
16                on the property (that is, 100(bonus%)) and
17                then divided by 100 times 1 minus the
18                percentage bonus depreciation on the property
19                (that is, 100(1-bonus%)).
20            The aggregate amount deducted under this
21        subparagraph in all taxable years for any one piece of
22        property may not exceed the amount of the bonus
23        depreciation deduction taken on that property on the
24        taxpayer's federal income tax return under subsection
25        (k) of Section 168 of the Internal Revenue Code. This
26        subparagraph (T) is exempt from the provisions of

 

 

SB3273- 56 -LRB103 39224 HLH 69375 b

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

 

 

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

 

 

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1        a person who would be a member of the same unitary
2        business group but for the fact that the person is
3        prohibited under Section 1501(a)(27) from being
4        included in the unitary business group because he or
5        she is ordinarily required to apportion business
6        income under different subsections of Section 304, but
7        not to exceed the addition modification required to be
8        made for the same taxable year under Section
9        203(b)(2)(E-12) for interest paid, accrued, or
10        incurred, directly or indirectly, to the same person.
11        This subparagraph (W) is exempt from the provisions of
12        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
18        for the fact that the foreign person's business
19        activity outside the United States is 80% or more of
20        that person's total business activity and (ii) for
21        taxable years ending on or after December 31, 2008, to
22        a 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

 

 

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1        income under different subsections of Section 304, but
2        not to exceed the addition modification required to be
3        made for the same taxable year under Section
4        203(b)(2)(E-13) for intangible expenses and costs
5        paid, accrued, or incurred, directly or indirectly, to
6        the same foreign person. This subparagraph (X) is
7        exempt from the 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
14        or 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
18        makes the election provided for by this subparagraph
19        (Y), the insurer to which the premiums were paid must
20        add back to income the amount subtracted by the
21        taxpayer pursuant to this subparagraph (Y). This
22        subparagraph (Y) is exempt from the provisions of
23        Section 250;
24            (Z) The difference between the nondeductible
25        controlled foreign corporation dividends under Section
26        965(e)(3) of the Internal Revenue Code over the

 

 

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1        taxable income of the taxpayer, computed without
2        regard to Section 965(e)(2)(A) of the Internal Revenue
3        Code, and without regard to any net operating loss
4        deduction. This subparagraph (Z) is exempt from the
5        provisions of Section 250; and
6            (AA) For taxable years beginning on or after
7        January 1, 2023, for any cannabis establishment
8        operating in this State and licensed under the
9        Cannabis Regulation and Tax Act or any cannabis
10        cultivation center or medical cannabis dispensing
11        organization operating in this State and licensed
12        under the Compassionate Use of Medical Cannabis
13        Program Act, an amount equal to the deductions that
14        were disallowed under Section 280E of the Internal
15        Revenue Code for the taxable year and that would not be
16        added back under this subsection. The provisions of
17        this subparagraph (AA) are exempt from the provisions
18        of Section 250.
19        (3) Special rule. For purposes of paragraph (2)(A),
20    "gross income" in the case of a life insurance company,
21    for tax years ending on and after December 31, 1994, and
22    prior to December 31, 2011, shall mean the gross
23    investment income for the taxable year and, for tax years
24    ending on or after December 31, 2011, shall mean all
25    amounts included in life insurance gross income under
26    Section 803(a)(3) of the Internal Revenue Code.
 

 

 

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1    (c) Trusts and estates.
2        (1) In general. In the case of a trust or estate, base
3    income means an amount equal to the taxpayer's taxable
4    income for the taxable year as modified by paragraph (2).
5        (2) Modifications. Subject to the provisions of
6    paragraph (3), the taxable income referred to in paragraph
7    (1) shall be modified by adding thereto the sum of the
8    following amounts:
9            (A) An amount equal to all amounts paid or accrued
10        to the taxpayer as interest or dividends during the
11        taxable year to the extent excluded from gross income
12        in the computation of taxable income;
13            (B) In the case of (i) an estate, $600; (ii) a
14        trust which, under its governing instrument, is
15        required to distribute all of its income currently,
16        $300; and (iii) any other trust, $100, but in each such
17        case, only to the extent such amount was deducted in
18        the computation of taxable income;
19            (C) An amount equal to the amount of tax imposed by
20        this Act to the extent deducted from gross income in
21        the computation of taxable income for the taxable
22        year;
23            (D) The amount of any net operating loss deduction
24        taken in arriving at taxable income, other than a net
25        operating loss carried forward from a taxable year

 

 

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

 

 

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1        than one other taxable year ending prior to December
2        31, 1986, the addition modification provided in this
3        subparagraph (E) shall be the sum of the amounts
4        computed independently under the preceding provisions
5        of this subparagraph (E) for each such taxable year;
6            (F) For taxable years ending on or after January
7        1, 1989, an amount equal to the tax deducted pursuant
8        to Section 164 of the Internal Revenue Code if the
9        trust or estate is claiming the same tax for purposes
10        of the Illinois foreign tax credit under Section 601
11        of this Act;
12            (G) An amount equal to the amount of the capital
13        gain deduction allowable under the Internal Revenue
14        Code, to the extent deducted from gross income in the
15        computation of taxable income;
16            (G-5) For taxable years ending after December 31,
17        1997, an amount equal to any eligible remediation
18        costs that the trust or estate deducted in computing
19        adjusted gross income and for which the trust or
20        estate claims a credit under subsection (l) of Section
21        201;
22            (G-10) For taxable years 2001 and thereafter, an
23        amount equal to the bonus depreciation deduction taken
24        on the taxpayer's federal income tax return for the
25        taxable year under subsection (k) of Section 168 of
26        the Internal Revenue Code; and

 

 

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

 

 

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

 

 

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1            incurred, directly or indirectly, to a person if
2            the taxpayer can establish, based on a
3            preponderance of the evidence, both of the
4            following:
5                    (a) the person, during the same taxable
6                year, paid, accrued, or incurred, the interest
7                to a person that is not a related member, and
8                    (b) the transaction giving rise to the
9                interest expense between the taxpayer and the
10                person did not have as a principal purpose the
11                avoidance of Illinois income tax, and is paid
12                pursuant to a contract or agreement that
13                reflects an arm's-length interest rate and
14                terms; or
15                (iii) the taxpayer can establish, based on
16            clear and convincing evidence, that the interest
17            paid, accrued, or incurred relates to a contract
18            or agreement entered into at arm's-length rates
19            and terms and the principal purpose for the
20            payment is not federal or Illinois tax avoidance;
21            or
22                (iv) an item of interest paid, accrued, or
23            incurred, directly or indirectly, to a person if
24            the taxpayer establishes by clear and convincing
25            evidence that the adjustments are unreasonable; or
26            if the taxpayer and the Director agree in writing

 

 

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1            to the application or use of an alternative method
2            of apportionment under Section 304(f).
3                Nothing in this subsection shall preclude the
4            Director from making any other adjustment
5            otherwise allowed under Section 404 of this Act
6            for any tax year beginning after the effective
7            date of this amendment provided such adjustment is
8            made pursuant to regulation adopted by the
9            Department and such regulations provide methods
10            and standards by which the Department will utilize
11            its authority under Section 404 of this Act;
12            (G-13) An amount equal to the amount of intangible
13        expenses and costs otherwise allowed as a deduction in
14        computing base income, and that were paid, accrued, or
15        incurred, directly or indirectly, (i) for taxable
16        years ending on or after December 31, 2004, to a
17        foreign person who would be a member of the same
18        unitary business group but for the fact that the
19        foreign person's business activity outside the United
20        States is 80% or more of that person's total business
21        activity and (ii) for taxable years ending on or after
22        December 31, 2008, to a person who would be a member of
23        the same unitary business group but for the fact that
24        the person is prohibited under Section 1501(a)(27)
25        from being included in the unitary business group
26        because he or she is ordinarily required to apportion

 

 

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

 

 

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

 

 

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1                or agreement that reflects arm's-length terms;
2                or
3                (iii) any item of intangible expense or cost
4            paid, accrued, or incurred, directly or
5            indirectly, from a transaction with a person if
6            the taxpayer establishes by clear and convincing
7            evidence, that the adjustments are unreasonable;
8            or if the taxpayer and the Director agree in
9            writing to the application or use of an
10            alternative method of apportionment under Section
11            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
15            for any tax year beginning after the effective
16            date of this amendment provided such adjustment is
17            made pursuant to regulation adopted by the
18            Department and such regulations provide methods
19            and standards by which the Department will utilize
20            its authority under Section 404 of this Act;
21            (G-14) For taxable years ending on or after
22        December 31, 2008, an amount equal to the amount of
23        insurance premium expenses and costs otherwise allowed
24        as a deduction in computing base income, and that were
25        paid, accrued, or incurred, directly or indirectly, to
26        a person who would be a member of the same unitary

 

 

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1        business group but for the fact that the person is
2        prohibited under Section 1501(a)(27) from being
3        included in the unitary business group because he or
4        she is ordinarily required to apportion business
5        income under different subsections of Section 304. The
6        addition modification required by this subparagraph
7        shall be reduced to the extent that dividends were
8        included in base income of the unitary group for the
9        same taxable year and received by the taxpayer or by a
10        member of the taxpayer's unitary business group
11        (including amounts included in gross income under
12        Sections 951 through 964 of the Internal Revenue Code
13        and amounts included in gross income under Section 78
14        of the Internal Revenue Code) with respect to the
15        stock of the same person to whom the premiums and costs
16        were directly or indirectly paid, incurred, or
17        accrued. The preceding sentence does not apply to the
18        extent that the same dividends caused a reduction to
19        the addition modification required under Section
20        203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this
21        Act;
22            (G-15) An amount equal to the credit allowable to
23        the taxpayer under Section 218(a) of this Act,
24        determined without regard to Section 218(c) of this
25        Act;
26            (G-16) For taxable years ending on or after

 

 

SB3273- 72 -LRB103 39224 HLH 69375 b

1        December 31, 2017, an amount equal to the deduction
2        allowed under Section 199 of the Internal Revenue Code
3        for the taxable year;
4    and by deducting from the total so obtained the sum of the
5    following amounts:
6            (H) An amount equal to all amounts included in
7        such total pursuant to the provisions of Sections
8        402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 408
9        of the Internal Revenue Code or included in such total
10        as distributions under the provisions of any
11        retirement or disability plan for employees of any
12        governmental agency or unit, or retirement payments to
13        retired partners, which payments are excluded in
14        computing net earnings from self employment by Section
15        1402 of the Internal Revenue Code and regulations
16        adopted pursuant thereto;
17            (I) The valuation limitation amount;
18            (J) An amount equal to the amount of any tax
19        imposed by this Act which was refunded to the taxpayer
20        and included in such total for the taxable year;
21            (K) An amount equal to all amounts included in
22        taxable income as modified by subparagraphs (A), (B),
23        (C), (D), (E), (F) and (G) which are exempt from
24        taxation by this State either by reason of its
25        statutes or Constitution or by reason of the
26        Constitution, treaties or statutes of the United

 

 

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1        States; provided that, in the case of any statute of
2        this State that exempts income derived from bonds or
3        other obligations from the tax imposed under this Act,
4        the amount exempted shall be the interest net of bond
5        premium amortization;
6            (L) With the exception of any amounts subtracted
7        under subparagraph (K), an amount equal to the sum of
8        all amounts disallowed as deductions by (i) Sections
9        171(a)(2) and 265(a)(2) of the Internal Revenue Code,
10        and all amounts of expenses allocable to interest and
11        disallowed as deductions by Section 265(a)(1) of the
12        Internal Revenue Code; and (ii) for taxable years
13        ending on or after August 13, 1999, Sections
14        171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
15        Internal Revenue Code, plus, (iii) for taxable years
16        ending on or after December 31, 2011, Section
17        45G(e)(3) of the Internal Revenue Code and, for
18        taxable years ending on or after December 31, 2008,
19        any amount included in gross income under Section 87
20        of the Internal Revenue Code; the provisions of this
21        subparagraph are exempt from the provisions of Section
22        250;
23            (M) An amount equal to those dividends included in
24        such total which were paid by a corporation which
25        conducts business operations in a River Edge
26        Redevelopment Zone or zones created under the River

 

 

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1        Edge Redevelopment Zone Act and conducts substantially
2        all of its operations in a River Edge Redevelopment
3        Zone or zones. This subparagraph (M) is exempt from
4        the provisions of Section 250;
5            (N) An amount equal to any contribution made to a
6        job training project established pursuant to the Tax
7        Increment Allocation Redevelopment Act;
8            (O) An amount equal to those dividends included in
9        such total that were paid by a corporation that
10        conducts business operations in a federally designated
11        Foreign Trade Zone or Sub-Zone and that is designated
12        a High Impact Business located in Illinois; provided
13        that dividends eligible for the deduction provided in
14        subparagraph (M) of paragraph (2) of this subsection
15        shall not be eligible for the deduction provided under
16        this subparagraph (O);
17            (P) 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            (Q) For taxable year 1999 and thereafter, an
23        amount equal to the amount of any (i) distributions,
24        to the extent includible in gross income for federal
25        income tax purposes, made to the taxpayer because of
26        his or her status as a victim of persecution for racial

 

 

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

 

 

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1        for federal income tax purposes. This paragraph is
2        exempt from the provisions of Section 250;
3            (R) For taxable years 2001 and thereafter, for the
4        taxable year in which the bonus depreciation deduction
5        is taken on the taxpayer's federal income tax return
6        under subsection (k) of Section 168 of the Internal
7        Revenue Code and for each applicable taxable year
8        thereafter, an amount equal to "x", where:
9                (1) "y" equals the amount of the depreciation
10            deduction taken for the taxable year on the
11            taxpayer's federal income tax return on property
12            for which the bonus depreciation deduction was
13            taken in any year under subsection (k) of Section
14            168 of the Internal Revenue Code, but not
15            including the bonus depreciation deduction;
16                (2) for taxable years ending on or before
17            December 31, 2005, "x" equals "y" multiplied by 30
18            and then divided by 70 (or "y" multiplied by
19            0.429); and
20                (3) for taxable years ending after December
21            31, 2005:
22                    (i) for property on which a bonus
23                depreciation deduction of 30% of the adjusted
24                basis was taken, "x" equals "y" multiplied by
25                30 and then divided by 70 (or "y" multiplied
26                by 0.429);

 

 

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1                    (ii) for property on which a bonus
2                depreciation deduction of 50% of the adjusted
3                basis was taken, "x" equals "y" multiplied by
4                1.0;
5                    (iii) for property on which a bonus
6                depreciation deduction of 100% of the adjusted
7                basis was taken in a taxable year ending on or
8                after December 31, 2021, "x" equals the
9                depreciation deduction that would be allowed
10                on that property if the taxpayer had made the
11                election under Section 168(k)(7) of the
12                Internal Revenue Code to not claim bonus
13                depreciation on that property; and
14                    (iv) for property on which a bonus
15                depreciation deduction of a percentage other
16                than 30%, 50% or 100% of the adjusted basis
17                was taken in a taxable year ending on or after
18                December 31, 2021, "x" equals "y" multiplied
19                by 100 times the percentage bonus depreciation
20                on the property (that is, 100(bonus%)) and
21                then divided by 100 times 1 minus the
22                percentage bonus depreciation on the property
23                (that is, 100(1-bonus%)).
24            The aggregate amount deducted under this
25        subparagraph in all taxable years for any one piece of
26        property may not exceed the amount of the bonus

 

 

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1        depreciation deduction taken on that property on the
2        taxpayer's federal income tax return under subsection
3        (k) of Section 168 of the Internal Revenue Code. This
4        subparagraph (R) is exempt from the provisions of
5        Section 250;
6            (S) If the taxpayer sells, transfers, abandons, or
7        otherwise disposes of property for which the taxpayer
8        was required in any taxable year to make an addition
9        modification under subparagraph (G-10), then an amount
10        equal to that addition modification.
11            If the taxpayer continues to own property through
12        the last day of the last tax year for which a
13        subtraction is allowed with respect to that property
14        under subparagraph (R) and for which the taxpayer was
15        required in any taxable year to make an addition
16        modification under subparagraph (G-10), then an amount
17        equal to that addition modification.
18            The taxpayer is allowed to take the deduction
19        under this subparagraph only once with respect to any
20        one piece of property.
21            This subparagraph (S) is exempt from the
22        provisions of Section 250;
23            (T) The amount of (i) any interest income (net of
24        the deductions allocable thereto) taken into account
25        for the taxable year with respect to a transaction
26        with a taxpayer that is required to make an addition

 

 

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

 

 

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

 

 

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1        the same foreign person. This subparagraph (V) is
2        exempt from the provisions of Section 250;
3            (W) in the case of an estate, an amount equal to
4        all amounts included in such total pursuant to the
5        provisions of Section 111 of the Internal Revenue Code
6        as a recovery of items previously deducted by the
7        decedent from adjusted gross income in the computation
8        of taxable income. This subparagraph (W) is exempt
9        from Section 250;
10            (X) an amount equal to the refund included in such
11        total of any tax deducted for federal income tax
12        purposes, to the extent that deduction was added back
13        under subparagraph (F). This subparagraph (X) is
14        exempt from the provisions of Section 250;
15            (Y) For taxable years ending on or after December
16        31, 2011, in the case of a taxpayer who was required to
17        add back any insurance premiums under Section
18        203(c)(2)(G-14), such taxpayer may elect to subtract
19        that part of a reimbursement received from the
20        insurance company equal to the amount of the expense
21        or loss (including expenses incurred by the insurance
22        company) that would have been taken into account as a
23        deduction for federal income tax purposes if the
24        expense or loss had been uninsured. If a taxpayer
25        makes the election provided for by this subparagraph
26        (Y), the insurer to which the premiums were paid must

 

 

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1        add back to income the amount subtracted by the
2        taxpayer pursuant to this subparagraph (Y). This
3        subparagraph (Y) is exempt from the provisions of
4        Section 250;
5            (Z) For taxable years beginning after December 31,
6        2018 and before January 1, 2026, the amount of excess
7        business loss of the taxpayer disallowed as a
8        deduction by Section 461(l)(1)(B) of the Internal
9        Revenue Code; and
10            (AA) For taxable years beginning on or after
11        January 1, 2023, for any cannabis establishment
12        operating in this State and licensed under the
13        Cannabis Regulation and Tax Act or any cannabis
14        cultivation center or medical cannabis dispensing
15        organization operating in this State and licensed
16        under the Compassionate Use of Medical Cannabis
17        Program Act, an amount equal to the deductions that
18        were disallowed under Section 280E of the Internal
19        Revenue Code for the taxable year and that would not be
20        added back under this subsection. The provisions of
21        this subparagraph (AA) are exempt from the provisions
22        of Section 250.
23        (3) Limitation. The amount of any modification
24    otherwise required under this subsection shall, under
25    regulations prescribed by the Department, be adjusted by
26    any amounts included therein which were properly paid,

 

 

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1    credited, or required to be distributed, or permanently
2    set aside for charitable purposes pursuant to Internal
3    Revenue Code Section 642(c) during the taxable year.
 
4    (d) Partnerships.
5        (1) In general. In the case of a partnership, base
6    income means an amount equal to the taxpayer's taxable
7    income for the taxable year as modified by paragraph (2).
8        (2) Modifications. The taxable income referred to in
9    paragraph (1) shall be modified by adding thereto the sum
10    of the following amounts:
11            (A) An amount equal to all amounts paid or accrued
12        to the taxpayer as interest or dividends during the
13        taxable year to the extent excluded from gross income
14        in the computation of taxable income;
15            (B) An amount equal to the amount of tax imposed by
16        this Act to the extent deducted from gross income for
17        the taxable year;
18            (C) The amount of deductions allowed to the
19        partnership pursuant to Section 707 (c) of the
20        Internal Revenue Code in calculating its taxable
21        income;
22            (D) An amount equal to the amount of the capital
23        gain deduction allowable under the Internal Revenue
24        Code, to the extent deducted from gross income in the
25        computation of taxable income;

 

 

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1            (D-5) For taxable years 2001 and thereafter, an
2        amount equal to the bonus depreciation deduction taken
3        on the taxpayer's federal income tax return for the
4        taxable year under subsection (k) of Section 168 of
5        the Internal Revenue Code;
6            (D-6) If the taxpayer sells, transfers, abandons,
7        or otherwise disposes of property for which the
8        taxpayer was required in any taxable year to make an
9        addition modification under subparagraph (D-5), then
10        an amount equal to the aggregate amount of the
11        deductions taken in all taxable years under
12        subparagraph (O) with respect to that property.
13            If the taxpayer continues to own property through
14        the last day of the last tax year for which a
15        subtraction is allowed with respect to that property
16        under subparagraph (O) and for which the taxpayer was
17        allowed in any taxable year to make a subtraction
18        modification under subparagraph (O), then an amount
19        equal to that subtraction modification.
20            The taxpayer is required to make the addition
21        modification under this subparagraph only once with
22        respect to any one piece of property;
23            (D-7) An amount equal to the amount otherwise
24        allowed as a deduction in computing base income for
25        interest paid, accrued, or incurred, directly or
26        indirectly, (i) for taxable years ending on or after

 

 

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

 

 

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

 

 

SB3273- 87 -LRB103 39224 HLH 69375 b

1                (iv) an item of interest paid, accrued, or
2            incurred, directly or indirectly, to a person if
3            the taxpayer establishes by clear and convincing
4            evidence that the adjustments are unreasonable; or
5            if the taxpayer and the Director agree in writing
6            to the application or use of an alternative method
7            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
11            for any tax year beginning after the effective
12            date of this amendment provided such adjustment is
13            made pursuant to regulation adopted by the
14            Department and such regulations provide methods
15            and standards by which the Department will utilize
16            its authority under Section 404 of this Act; and
17            (D-8) An amount equal to the amount of intangible
18        expenses and costs otherwise allowed as a deduction in
19        computing base income, and that were paid, accrued, or
20        incurred, directly or indirectly, (i) for taxable
21        years ending on or after December 31, 2004, to a
22        foreign person who would be a member of the same
23        unitary business group but for the fact that the
24        foreign person's business activity outside the United
25        States is 80% or more of that person's total business
26        activity and (ii) for taxable years ending on or after

 

 

SB3273- 88 -LRB103 39224 HLH 69375 b

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

 

 

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

 

 

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

 

 

SB3273- 91 -LRB103 39224 HLH 69375 b

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

 

 

SB3273- 92 -LRB103 39224 HLH 69375 b

1        the taxpayer under Section 218(a) of this Act,
2        determined without regard to Section 218(c) of this
3        Act;
4            (D-11) For taxable years ending on or after
5        December 31, 2017, an amount equal to the deduction
6        allowed under Section 199 of the Internal Revenue Code
7        for the taxable year;
8    and by deducting from the total so obtained the following
9    amounts:
10            (E) The valuation limitation amount;
11            (F) An amount equal to the amount of any tax
12        imposed by this Act which was refunded to the taxpayer
13        and included in such total for the taxable year;
14            (G) An amount equal to all amounts included in
15        taxable income as modified by subparagraphs (A), (B),
16        (C) and (D) which are exempt from taxation by this
17        State either by reason of its statutes or Constitution
18        or by reason of the Constitution, treaties or statutes
19        of the United States; provided that, in the case of any
20        statute of this State that exempts income derived from
21        bonds or other obligations from the tax imposed under
22        this Act, the amount exempted shall be the interest
23        net of bond premium amortization;
24            (H) Any income of the partnership which
25        constitutes personal service income as defined in
26        Section 1348(b)(1) of the Internal Revenue Code (as in

 

 

SB3273- 93 -LRB103 39224 HLH 69375 b

1        effect December 31, 1981) or a reasonable allowance
2        for compensation paid or accrued for services rendered
3        by partners to the partnership, whichever is greater;
4        this subparagraph (H) is exempt from the provisions of
5        Section 250;
6            (I) An amount equal to all amounts of income
7        distributable to an entity subject to the Personal
8        Property Tax Replacement Income Tax imposed by
9        subsections (c) and (d) of Section 201 of this Act
10        including amounts distributable to organizations
11        exempt from federal income tax by reason of Section
12        501(a) of the Internal Revenue Code; this subparagraph
13        (I) is exempt from the provisions of Section 250;
14            (J) With the exception of any amounts subtracted
15        under subparagraph (G), an amount equal to the sum of
16        all amounts disallowed as deductions by (i) Sections
17        171(a)(2) and 265(a)(2) of the Internal Revenue Code,
18        and all amounts of expenses allocable to interest and
19        disallowed as deductions by Section 265(a)(1) of the
20        Internal Revenue Code; and (ii) for taxable years
21        ending on or after August 13, 1999, Sections
22        171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
23        Internal Revenue Code, plus, (iii) for taxable years
24        ending on or after December 31, 2011, Section
25        45G(e)(3) of the Internal Revenue Code and, for
26        taxable years ending on or after December 31, 2008,

 

 

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1        any amount included in gross income under Section 87
2        of the Internal Revenue Code; the provisions of this
3        subparagraph are exempt from the provisions of Section
4        250;
5            (K) An amount equal to those dividends included in
6        such total which were paid by a corporation which
7        conducts business operations in a River Edge
8        Redevelopment Zone or zones created under the River
9        Edge Redevelopment Zone Act and conducts substantially
10        all of its operations from a River Edge Redevelopment
11        Zone or zones. This subparagraph (K) is exempt from
12        the provisions of Section 250;
13            (L) An amount equal to any contribution made to a
14        job training project established pursuant to the Real
15        Property Tax Increment Allocation Redevelopment Act;
16            (M) An amount equal to those dividends included in
17        such total that were paid by a corporation that
18        conducts business operations in a federally designated
19        Foreign Trade Zone or Sub-Zone and that is designated
20        a High Impact Business located in Illinois; provided
21        that dividends eligible for the deduction provided in
22        subparagraph (K) of paragraph (2) of this subsection
23        shall not be eligible for the deduction provided under
24        this subparagraph (M);
25            (N) An amount equal to the amount of the deduction
26        used to compute the federal income tax credit for

 

 

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1        restoration of substantial amounts held under claim of
2        right for the taxable year pursuant to Section 1341 of
3        the Internal Revenue Code;
4            (O) For taxable years 2001 and thereafter, for the
5        taxable year in which the bonus depreciation deduction
6        is taken on the taxpayer's federal income tax return
7        under subsection (k) of Section 168 of the Internal
8        Revenue Code and for each applicable taxable year
9        thereafter, an amount equal to "x", where:
10                (1) "y" equals the amount of the depreciation
11            deduction taken for the taxable year on the
12            taxpayer's federal income tax return on property
13            for which the bonus depreciation deduction was
14            taken in any year under subsection (k) of Section
15            168 of the Internal Revenue Code, but not
16            including the bonus depreciation deduction;
17                (2) for taxable years ending on or before
18            December 31, 2005, "x" equals "y" multiplied by 30
19            and then divided by 70 (or "y" multiplied by
20            0.429); and
21                (3) for taxable years ending after December
22            31, 2005:
23                    (i) for property on which a bonus
24                depreciation deduction of 30% of the adjusted
25                basis was taken, "x" equals "y" multiplied by
26                30 and then divided by 70 (or "y" multiplied

 

 

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1                by 0.429);
2                    (ii) for property on which a bonus
3                depreciation deduction of 50% of the adjusted
4                basis was taken, "x" equals "y" multiplied by
5                1.0;
6                    (iii) for property on which a bonus
7                depreciation deduction of 100% of the adjusted
8                basis was taken in a taxable year ending on or
9                after December 31, 2021, "x" equals the
10                depreciation deduction that would be allowed
11                on that property if the taxpayer had made the
12                election under Section 168(k)(7) of the
13                Internal Revenue Code to not claim bonus
14                depreciation on that property; and
15                    (iv) for property on which a bonus
16                depreciation deduction of a percentage other
17                than 30%, 50% or 100% of the adjusted basis
18                was taken in a taxable year ending on or after
19                December 31, 2021, "x" equals "y" multiplied
20                by 100 times the percentage bonus depreciation
21                on the property (that is, 100(bonus%)) and
22                then divided by 100 times 1 minus the
23                percentage bonus depreciation on the property
24                (that is, 100(1-bonus%)).
25            The aggregate amount deducted under this
26        subparagraph in all taxable years for any one piece of

 

 

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1        property may not exceed the amount of the bonus
2        depreciation deduction taken on that property on the
3        taxpayer's federal income tax return under subsection
4        (k) of Section 168 of the Internal Revenue Code. This
5        subparagraph (O) is exempt from the provisions of
6        Section 250;
7            (P) If the taxpayer sells, transfers, abandons, or
8        otherwise disposes of property for which the taxpayer
9        was required in any taxable year to make an addition
10        modification under subparagraph (D-5), then an amount
11        equal to that addition modification.
12            If the taxpayer continues to own property through
13        the last day of the last tax year for which a
14        subtraction is allowed with respect to that property
15        under subparagraph (O) and for which the taxpayer was
16        required in any taxable year to make an addition
17        modification under subparagraph (D-5), then an amount
18        equal to that addition modification.
19            The taxpayer is allowed to take the deduction
20        under this subparagraph only once with respect to any
21        one piece of property.
22            This subparagraph (P) is exempt from the
23        provisions of Section 250;
24            (Q) The amount of (i) any interest income (net of
25        the deductions allocable thereto) taken into account
26        for the taxable year with respect to a transaction

 

 

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

 

 

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

 

 

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1        accrued, or incurred, directly or indirectly, to the
2        same person. This subparagraph (S) is exempt from
3        Section 250;
4            (T) For taxable years ending on or after December
5        31, 2011, in the case of a taxpayer who was required to
6        add back any insurance premiums under Section
7        203(d)(2)(D-9), such taxpayer may elect to subtract
8        that part of a reimbursement received from the
9        insurance company equal to the amount of the expense
10        or loss (including expenses incurred by the insurance
11        company) that would have been taken into account as a
12        deduction for federal income tax purposes if the
13        expense or loss had been uninsured. If a taxpayer
14        makes the election provided for by this subparagraph
15        (T), the insurer to which the premiums were paid must
16        add back to income the amount subtracted by the
17        taxpayer pursuant to this subparagraph (T). This
18        subparagraph (T) is exempt from the provisions of
19        Section 250; and
20            (U) For taxable years beginning on or after
21        January 1, 2023, for any cannabis establishment
22        operating in this State and licensed under the
23        Cannabis Regulation and Tax Act or any cannabis
24        cultivation center or medical cannabis dispensing
25        organization operating in this State and licensed
26        under the Compassionate Use of Medical Cannabis

 

 

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1        Program Act, an amount equal to the deductions that
2        were disallowed under Section 280E of the Internal
3        Revenue Code for the taxable year and that would not be
4        added back under this subsection. The provisions of
5        this subparagraph (U) are exempt from the provisions
6        of Section 250.
 
7    (e) Gross income; adjusted gross income; taxable income.
8        (1) In general. Subject to the provisions of paragraph
9    (2) and subsection (b)(3), for purposes of this Section
10    and Section 803(e), a taxpayer's gross income, adjusted
11    gross income, or taxable income for the taxable year shall
12    mean the amount of gross income, adjusted gross income or
13    taxable income properly reportable for federal income tax
14    purposes for the taxable year under the provisions of the
15    Internal Revenue Code. Taxable income may be less than
16    zero. However, for taxable years ending on or after
17    December 31, 1986, net operating loss carryforwards from
18    taxable years ending prior to December 31, 1986, may not
19    exceed the sum of federal taxable income for the taxable
20    year before net operating loss deduction, plus the excess
21    of addition modifications over subtraction modifications
22    for the taxable year. For taxable years ending prior to
23    December 31, 1986, taxable income may never be an amount
24    in excess of the net operating loss for the taxable year as
25    defined in subsections (c) and (d) of Section 172 of the

 

 

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1    Internal Revenue Code, provided that when taxable income
2    of a corporation (other than a Subchapter S corporation),
3    trust, or estate is less than zero and addition
4    modifications, other than those provided by subparagraph
5    (E) of paragraph (2) of subsection (b) for corporations or
6    subparagraph (E) of paragraph (2) of subsection (c) for
7    trusts and estates, exceed subtraction modifications, an
8    addition modification must be made under those
9    subparagraphs for any other taxable year to which the
10    taxable income less than zero (net operating loss) is
11    applied under Section 172 of the Internal Revenue Code or
12    under subparagraph (E) of paragraph (2) of this subsection
13    (e) applied in conjunction with Section 172 of the
14    Internal Revenue Code.
15        (2) Special rule. For purposes of paragraph (1) of
16    this subsection, the taxable income properly reportable
17    for federal income tax purposes shall mean:
18            (A) Certain life insurance companies. In the case
19        of a life insurance company subject to the tax imposed
20        by Section 801 of the Internal Revenue Code, life
21        insurance company taxable income, plus the amount of
22        distribution from pre-1984 policyholder surplus
23        accounts as calculated under Section 815a of the
24        Internal Revenue Code;
25            (B) Certain other insurance companies. In the case
26        of mutual insurance companies subject to the tax

 

 

SB3273- 103 -LRB103 39224 HLH 69375 b

1        imposed by Section 831 of the Internal Revenue Code,
2        insurance company taxable income;
3            (C) Regulated investment companies. In the case of
4        a regulated investment company subject to the tax
5        imposed by Section 852 of the Internal Revenue Code,
6        investment company taxable income;
7            (D) Real estate investment trusts. In the case of
8        a real estate investment trust subject to the tax
9        imposed by Section 857 of the Internal Revenue Code,
10        real estate investment trust taxable income;
11            (E) Consolidated corporations. In the case of a
12        corporation which is a member of an affiliated group
13        of corporations filing a consolidated income tax
14        return for the taxable year for federal income tax
15        purposes, taxable income determined as if such
16        corporation had filed a separate return for federal
17        income tax purposes for the taxable year and each
18        preceding taxable year for which it was a member of an
19        affiliated group. For purposes of this subparagraph,
20        the taxpayer's separate taxable income shall be
21        determined as if the election provided by Section
22        243(b)(2) of the Internal Revenue Code had been in
23        effect for all such years;
24            (F) Cooperatives. In the case of a cooperative
25        corporation or association, the taxable income of such
26        organization determined in accordance with the

 

 

SB3273- 104 -LRB103 39224 HLH 69375 b

1        provisions of Section 1381 through 1388 of the
2        Internal Revenue Code, but without regard to the
3        prohibition against offsetting losses from patronage
4        activities against income from nonpatronage
5        activities; except that a cooperative corporation or
6        association may make an election to follow its federal
7        income tax treatment of patronage losses and
8        nonpatronage losses. In the event such election is
9        made, such losses shall be computed and carried over
10        in a manner consistent with subsection (a) of Section
11        207 of this Act and apportioned by the apportionment
12        factor reported by the cooperative on its Illinois
13        income tax return filed for the taxable year in which
14        the losses are incurred. The election shall be
15        effective for all taxable years with original returns
16        due on or after the date of the election. In addition,
17        the cooperative may file an amended return or returns,
18        as allowed under this Act, to provide that the
19        election shall be effective for losses incurred or
20        carried forward for taxable years occurring prior to
21        the date of the election. Once made, the election may
22        only be revoked upon approval of the Director. The
23        Department shall adopt rules setting forth
24        requirements for documenting the elections and any
25        resulting Illinois net loss and the standards to be
26        used by the Director in evaluating requests to revoke

 

 

SB3273- 105 -LRB103 39224 HLH 69375 b

1        elections. Public Act 96-932 is declaratory of
2        existing law;
3            (G) Subchapter S corporations. In the case of: (i)
4        a Subchapter S corporation for which there is in
5        effect an election for the taxable year under Section
6        1362 of the Internal Revenue Code, the taxable income
7        of such corporation determined in accordance with
8        Section 1363(b) of the Internal Revenue Code, except
9        that taxable income shall take into account those
10        items which are required by Section 1363(b)(1) of the
11        Internal Revenue Code to be separately stated; and
12        (ii) a Subchapter S corporation for which there is in
13        effect a federal election to opt out of the provisions
14        of the Subchapter S Revision Act of 1982 and have
15        applied instead the prior federal Subchapter S rules
16        as in effect on July 1, 1982, the taxable income of
17        such corporation determined in accordance with the
18        federal Subchapter S rules as in effect on July 1,
19        1982; and
20            (H) Partnerships. In the case of a partnership,
21        taxable income determined in accordance with Section
22        703 of the Internal Revenue Code, except that taxable
23        income shall take into account those items which are
24        required by Section 703(a)(1) to be separately stated
25        but which would be taken into account by an individual
26        in calculating his taxable income.

 

 

SB3273- 106 -LRB103 39224 HLH 69375 b

1        (3) Recapture of business expenses on disposition of
2    asset or business. Notwithstanding any other law to the
3    contrary, if in prior years income from an asset or
4    business has been classified as business income and in a
5    later year is demonstrated to be non-business income, then
6    all expenses, without limitation, deducted in such later
7    year and in the 2 immediately preceding taxable years
8    related to that asset or business that generated the
9    non-business income shall be added back and recaptured as
10    business income in the year of the disposition of the
11    asset or business. Such amount shall be apportioned to
12    Illinois using the greater of the apportionment fraction
13    computed for the business under Section 304 of this Act
14    for the taxable year or the average of the apportionment
15    fractions computed for the business under Section 304 of
16    this Act for the taxable year and for the 2 immediately
17    preceding taxable years.
 
18    (f) Valuation limitation amount.
19        (1) In general. The valuation limitation amount
20    referred to in subsections (a)(2)(G), (c)(2)(I) and
21    (d)(2)(E) is an amount equal to:
22            (A) The sum of the pre-August 1, 1969 appreciation
23        amounts (to the extent consisting of gain reportable
24        under the provisions of Section 1245 or 1250 of the
25        Internal Revenue Code) for all property in respect of

 

 

SB3273- 107 -LRB103 39224 HLH 69375 b

1        which such gain was reported for the taxable year;
2        plus
3            (B) The lesser of (i) the sum of the pre-August 1,
4        1969 appreciation amounts (to the extent consisting of
5        capital gain) for all property in respect of which
6        such gain was reported for federal income tax purposes
7        for the taxable year, or (ii) the net capital gain for
8        the taxable year, reduced in either case by any amount
9        of such gain included in the amount determined under
10        subsection (a)(2)(F) or (c)(2)(H).
11        (2) Pre-August 1, 1969 appreciation amount.
12            (A) If the fair market value of property referred
13        to in paragraph (1) was readily ascertainable on
14        August 1, 1969, the pre-August 1, 1969 appreciation
15        amount for such property is the lesser of (i) the
16        excess of such fair market value over the taxpayer's
17        basis (for determining gain) for such property on that
18        date (determined under the Internal Revenue Code as in
19        effect on that date), or (ii) the total gain realized
20        and reportable for federal income tax purposes in
21        respect of the sale, exchange or other disposition of
22        such property.
23            (B) If the fair market value of property referred
24        to in paragraph (1) was not readily ascertainable on
25        August 1, 1969, the pre-August 1, 1969 appreciation
26        amount for such property is that amount which bears

 

 

SB3273- 108 -LRB103 39224 HLH 69375 b

1        the same ratio to the total gain reported in respect of
2        the property for federal income tax purposes for the
3        taxable year, as the number of full calendar months in
4        that part of the taxpayer's holding period for the
5        property ending July 31, 1969 bears to the number of
6        full calendar months in the taxpayer's entire holding
7        period for the property.
8            (C) The Department shall prescribe such
9        regulations as may be necessary to carry out the
10        purposes of this paragraph.
 
11    (g) Double deductions. Unless specifically provided
12otherwise, nothing in this Section shall permit the same item
13to be deducted more than once.
 
14    (h) Legislative intention. Except as expressly provided by
15this Section there shall be no modifications or limitations on
16the amounts of income, gain, loss or deduction taken into
17account in determining gross income, adjusted gross income or
18taxable income for federal income tax purposes for the taxable
19year, or in the amount of such items entering into the
20computation of base income and net income under this Act for
21such taxable year, whether in respect of property values as of
22August 1, 1969 or otherwise.
23(Source: P.A. 102-16, eff. 6-17-21; 102-558, eff. 8-20-21;
24102-658, eff. 8-27-21; 102-813, eff. 5-13-22; 102-1112, eff.

 

 

SB3273- 109 -LRB103 39224 HLH 69375 b

112-21-22; 103-8, eff. 6-7-23; 103-478, eff. 1-1-24; revised
29-26-23.)
 
3    Section 99. Effective date. This Act takes effect upon
4becoming law.