93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
HB4749

 

Introduced 02/04/04, by Jack McGuire

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/203   from Ch. 120, par. 2-203
35 ILCS 5/204   from Ch. 120, par. 2-204

    Amends the Illinois Income Tax Act. Provides that, for taxable years ending on or after December 31, 2004, the deduction allowed for public employee pension income applies only to the first $40,000 of a public employee pension received during the taxable. For taxable years ending on or after December 31, 2004 changes the additional exemption for a taxpayer or spouse 65 years or age or older from $1,000 per year to $10,000 per year. Effective immediately.


LRB093 18557 SJM 44278 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB4749 LRB093 18557 SJM 44278 b

1     AN ACT concerning taxes.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Illinois Income Tax Act is amended by
5 changing Sections 203 and 204 as follows:
 
6     (35 ILCS 5/203)  (from Ch. 120, par. 2-203)
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 the
15     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
24         this Act to the extent deducted from gross income in
25         the computation of adjusted gross income for the
26         taxable year;
27             (C) An amount equal to the amount received during
28         the taxable year as a recovery or refund of real
29         property taxes paid with respect to the taxpayer's
30         principal residence under the Revenue Act of 1939 and
31         for which a deduction was previously taken under
32         subparagraph (L) of this paragraph (2) prior to July 1,

 

 

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1         1991, the retrospective application date of Article 4
2         of Public Act 87-17. In the case of multi-unit or
3         multi-use structures and farm dwellings, the taxes on
4         the taxpayer's principal residence shall be that
5         portion of the total taxes for the entire property
6         which is attributable to such principal residence;
7             (D) An amount equal to the amount of the capital
8         gain deduction allowable under the Internal Revenue
9         Code, to the extent deducted from gross income in the
10         computation of adjusted gross income;
11             (D-5) An amount, to the extent not included in
12         adjusted gross income, equal to the amount of money
13         withdrawn by the taxpayer in the taxable year from a
14         medical care savings account and the interest earned on
15         the account in the taxable year of a withdrawal
16         pursuant to subsection (b) of Section 20 of the Medical
17         Care Savings Account Act or subsection (b) of Section
18         20 of the Medical Care Savings Account Act of 2000;
19             (D-10) For taxable years ending after December 31,
20         1997, an amount equal to any eligible remediation costs
21         that the individual deducted in computing adjusted
22         gross income and for which the individual claims a
23         credit under subsection (l) of Section 201;
24             (D-15) For taxable years 2001 and thereafter, an
25         amount equal to the bonus depreciation deduction (30%
26         of the adjusted basis of the qualified property) taken
27         on the taxpayer's federal income tax return for the
28         taxable year under subsection (k) of Section 168 of the
29         Internal Revenue Code; and
30             (D-16) If the taxpayer reports a capital gain or
31         loss on the taxpayer's federal income tax return for
32         the taxable year based on a sale or transfer of
33         property for which the taxpayer was required in any
34         taxable year to make an addition modification under
35         subparagraph (D-15), then an amount equal to the
36         aggregate amount of the deductions taken in all taxable

 

 

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1         years under subparagraph (Z) with respect to that
2         property. ;
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; . and
6             (D-20) (D-15) For taxable years beginning on or
7         after January 1, 2002, in the case of a distribution
8         from a qualified tuition program under Section 529 of
9         the Internal Revenue Code, other than (i) a
10         distribution from a College Savings Pool created under
11         Section 16.5 of the State Treasurer Act or (ii) a
12         distribution from the Illinois Prepaid Tuition Trust
13         Fund, an amount equal to the amount excluded from gross
14         income under Section 529(c)(3)(B);
15     and by deducting from the total so obtained the sum of the
16     following amounts:
17             (E) For taxable years ending before December 31,
18         2001, any amount included in such total in respect of
19         any compensation (including but not limited to any
20         compensation paid or accrued to a serviceman while a
21         prisoner of war or missing in action) paid to a
22         resident by reason of being on active duty in the Armed
23         Forces of the United States and in respect of any
24         compensation paid or accrued to a resident who as a
25         governmental employee was a prisoner of war or missing
26         in action, and in respect of any compensation paid to a
27         resident in 1971 or thereafter for annual training
28         performed pursuant to Sections 502 and 503, Title 32,
29         United States Code as a member of the Illinois National
30         Guard. For taxable years ending on or after December
31         31, 2001, any amount included in such total in respect
32         of any compensation (including but not limited to any
33         compensation paid or accrued to a serviceman while a
34         prisoner of war or missing in action) paid to a
35         resident by reason of being a member of any component
36         of the Armed Forces of the United States and in respect

 

 

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1         of any compensation paid or accrued to a resident who
2         as a governmental employee was a prisoner of war or
3         missing in action, and in respect of any compensation
4         paid to a resident in 2001 or thereafter by reason of
5         being a member of the Illinois National Guard. The
6         provisions of this amendatory Act of the 92nd General
7         Assembly are exempt from the provisions of Section 250;
8             (F) Through taxable years ending on or before
9         December 31, 2003, an An amount equal to all amounts
10         included in such total pursuant to the provisions of
11         Sections 402(a), 402(c), 403(a), 403(b), 406(a),
12         407(a), and 408 of the Internal Revenue Code, or
13         included in such total as distributions under the
14         provisions of any retirement or disability plan for
15         employees of any governmental agency or unit, or
16         retirement payments to retired partners, which
17         payments are excluded in computing net earnings from
18         self employment by Section 1402 of the Internal Revenue
19         Code and regulations adopted pursuant thereto. For
20         taxable years ending on or after December 31, 2004, an
21         amount equal to all amounts of $40,000 or less included
22         in such total pursuant to the provisions of Sections
23         402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
24         408 of the Internal Revenue Code, or included in such
25         total as distributions under the provisions of any
26         retirement or disability plan for employees of any
27         governmental agency or unit, or retirement payments to
28         retired partners, which payments are excluded in
29         computing net earnings from self employment by Section
30         1402 of the Internal Revenue Code and regulations
31         adopted pursuant thereto;
32             (G) The valuation limitation amount;
33             (H) An amount equal to the amount of any tax
34         imposed by this Act which was refunded to the taxpayer
35         and included in such total for the taxable year;
36             (I) An amount equal to all amounts included in such

 

 

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1         total pursuant to the provisions of Section 111 of the
2         Internal Revenue Code as a recovery of items previously
3         deducted from adjusted gross income in the computation
4         of taxable income;
5             (J) An amount equal to those dividends included in
6         such total which were paid by a corporation which
7         conducts business operations in an Enterprise Zone or
8         zones created under the Illinois Enterprise Zone Act,
9         and conducts substantially all of its operations in an
10         Enterprise Zone or zones;
11             (K) An amount equal to those dividends included in
12         such total that were paid by a corporation that
13         conducts business operations in a federally designated
14         Foreign Trade Zone or Sub-Zone and that is designated a
15         High Impact Business located in Illinois; provided
16         that dividends eligible for the deduction provided in
17         subparagraph (J) of paragraph (2) of this subsection
18         shall not be eligible for the deduction provided under
19         this subparagraph (K);
20             (L) For taxable years ending after December 31,
21         1983, an amount equal to all social security benefits
22         and railroad retirement benefits included in such
23         total pursuant to Sections 72(r) and 86 of the Internal
24         Revenue Code;
25             (M) With the exception of any amounts subtracted
26         under subparagraph (N), an amount equal to the sum of
27         all amounts disallowed as deductions by (i) Sections
28         171(a) (2), and 265(2) of the Internal Revenue Code of
29         1954, as now or hereafter amended, and all amounts of
30         expenses allocable to interest and disallowed as
31         deductions by Section 265(1) of the Internal Revenue
32         Code of 1954, as now or hereafter amended; and (ii) for
33         taxable years ending on or after August 13, 1999,
34         Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of
35         the Internal Revenue Code; the provisions of this
36         subparagraph are exempt from the provisions of Section

 

 

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1         250;
2             (N) An amount equal to all amounts included in such
3         total which are exempt from taxation by this State
4         either by reason of its statutes or Constitution or by
5         reason of the Constitution, treaties or statutes of the
6         United States; provided that, in the case of any
7         statute of this State that exempts income derived from
8         bonds or other obligations from the tax imposed under
9         this Act, the amount exempted shall be the interest net
10         of bond premium amortization;
11             (O) An amount equal to any contribution made to a
12         job training project established pursuant to the Tax
13         Increment Allocation Redevelopment Act;
14             (P) An amount equal to the amount of the deduction
15         used to compute the federal income tax credit for
16         restoration of substantial amounts held under claim of
17         right for the taxable year pursuant to Section 1341 of
18         the Internal Revenue Code of 1986;
19             (Q) An amount equal to any amounts included in such
20         total, received by the taxpayer as an acceleration in
21         the payment of life, endowment or annuity benefits in
22         advance of the time they would otherwise be payable as
23         an indemnity for a terminal illness;
24             (R) An amount equal to the amount of any federal or
25         State bonus paid to veterans of the Persian Gulf War;
26             (S) An amount, to the extent included in adjusted
27         gross income, equal to the amount of a contribution
28         made in the taxable year on behalf of the taxpayer to a
29         medical care savings account established under the
30         Medical Care Savings Account Act or the Medical Care
31         Savings Account Act of 2000 to the extent the
32         contribution is accepted by the account administrator
33         as provided in that Act;
34             (T) An amount, to the extent included in adjusted
35         gross income, equal to the amount of interest earned in
36         the taxable year on a medical care savings account

 

 

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1         established under the Medical Care Savings Account Act
2         or the Medical Care Savings Account Act of 2000 on
3         behalf of the taxpayer, other than interest added
4         pursuant to item (D-5) of this paragraph (2);
5             (U) For one taxable year beginning on or after
6         January 1, 1994, an amount equal to the total amount of
7         tax imposed and paid under subsections (a) and (b) of
8         Section 201 of this Act on grant amounts received by
9         the taxpayer under the Nursing Home Grant Assistance
10         Act during the taxpayer's taxable years 1992 and 1993;
11             (V) Beginning with tax years ending on or after
12         December 31, 1995 and ending with tax years ending on
13         or before December 31, 2004, an amount equal to the
14         amount paid by a taxpayer who is a self-employed
15         taxpayer, a partner of a partnership, or a shareholder
16         in a Subchapter S corporation for health insurance or
17         long-term care insurance for that taxpayer or that
18         taxpayer's spouse or dependents, to the extent that the
19         amount paid for that health insurance or long-term care
20         insurance may be deducted under Section 213 of the
21         Internal Revenue Code of 1986, has not been deducted on
22         the federal income tax return of the taxpayer, and does
23         not exceed the taxable income attributable to that
24         taxpayer's income, self-employment income, or
25         Subchapter S corporation income; except that no
26         deduction shall be allowed under this item (V) if the
27         taxpayer is eligible to participate in any health
28         insurance or long-term care insurance plan of an
29         employer of the taxpayer or the taxpayer's spouse. The
30         amount of the health insurance and long-term care
31         insurance subtracted under this item (V) shall be
32         determined by multiplying total health insurance and
33         long-term care insurance premiums paid by the taxpayer
34         times a number that represents the fractional
35         percentage of eligible medical expenses under Section
36         213 of the Internal Revenue Code of 1986 not actually

 

 

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1         deducted on the taxpayer's federal income tax return;
2             (W) For taxable years beginning on or after January
3         1, 1998, all amounts included in the taxpayer's federal
4         gross income in the taxable year from amounts converted
5         from a regular IRA to a Roth IRA. This paragraph is
6         exempt from the provisions of Section 250;
7             (X) For taxable year 1999 and thereafter, an amount
8         equal to the amount of any (i) distributions, to the
9         extent includible in gross income for federal income
10         tax purposes, made to the taxpayer because of his or
11         her status as a victim of persecution for racial or
12         religious reasons by Nazi Germany or any other Axis
13         regime or as an heir of the victim and (ii) items of
14         income, to the extent includible in gross income for
15         federal income tax purposes, attributable to, derived
16         from or in any way related to assets stolen from,
17         hidden from, or otherwise lost to a victim of
18         persecution for racial or religious reasons by Nazi
19         Germany or any other Axis regime immediately prior to,
20         during, and immediately after World War II, including,
21         but not limited to, interest on the proceeds receivable
22         as insurance under policies issued to a victim of
23         persecution for racial or religious reasons by Nazi
24         Germany or any other Axis regime by European insurance
25         companies immediately prior to and during World War II;
26         provided, however, this subtraction from federal
27         adjusted gross income does not apply to assets acquired
28         with such assets or with the proceeds from the sale of
29         such assets; provided, further, this paragraph shall
30         only apply to a taxpayer who was the first recipient of
31         such assets after their recovery and who is a victim of
32         persecution for racial or religious reasons by Nazi
33         Germany or any other Axis regime or as an heir of the
34         victim. The amount of and the eligibility for any
35         public assistance, benefit, or similar entitlement is
36         not affected by the inclusion of items (i) and (ii) of

 

 

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1         this paragraph in gross income for federal income tax
2         purposes. This paragraph is exempt from the provisions
3         of Section 250;
4             (Y) For taxable years beginning on or after January
5         1, 2002, moneys contributed in the taxable year to a
6         College Savings Pool account under Section 16.5 of the
7         State Treasurer Act, except that amounts excluded from
8         gross income under Section 529(c)(3)(C)(i) of the
9         Internal Revenue Code shall not be considered moneys
10         contributed under this subparagraph (Y). This
11         subparagraph (Y) is exempt from the provisions of
12         Section 250;
13             (Z) For taxable years 2001 and thereafter, for the
14         taxable year in which the bonus depreciation deduction
15         (30% of the adjusted basis of the qualified property)
16         is taken on the taxpayer's federal income tax return
17         under subsection (k) of Section 168 of the Internal
18         Revenue Code and for each applicable taxable year
19         thereafter, an amount equal to "x", where:
20                 (1) "y" equals the amount of the depreciation
21             deduction taken for the taxable year on the
22             taxpayer's federal income tax return on property
23             for which the bonus depreciation deduction (30% of
24             the adjusted basis of the qualified property) was
25             taken in any year under subsection (k) of Section
26             168 of the Internal Revenue Code, but not including
27             the bonus depreciation deduction; and
28                 (2) "x" equals "y" multiplied by 30 and then
29             divided by 70 (or "y" multiplied by 0.429).
30             The aggregate amount deducted under this
31         subparagraph in all taxable years for any one piece of
32         property may not exceed the amount of the bonus
33         depreciation deduction (30% of the adjusted basis of
34         the qualified property) taken on that property on the
35         taxpayer's federal income tax return under subsection
36         (k) of Section 168 of the Internal Revenue Code; and

 

 

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1             (AA) If the taxpayer reports a capital gain or loss
2         on the taxpayer's federal income tax return for the
3         taxable year based on a sale or transfer of property
4         for which the taxpayer was required in any taxable year
5         to make an addition modification under subparagraph
6         (D-15), then an amount equal to that addition
7         modification.
8             The taxpayer is allowed to take the deduction under
9         this subparagraph only once with respect to any one
10         piece of property; and
11             (BB) (Z) Any amount included in adjusted gross
12         income, other than salary, received by a driver in a
13         ridesharing arrangement using a motor vehicle.
 
14     (b) Corporations.
15         (1) In general. In the case of a corporation, base
16     income means an amount equal to the taxpayer's taxable
17     income for the taxable year as modified by paragraph (2).
18         (2) Modifications. The taxable income referred to in
19     paragraph (1) shall be modified by adding thereto the sum
20     of the following amounts:
21             (A) An amount equal to all amounts paid or accrued
22         to the taxpayer as interest and all distributions
23         received from regulated investment companies during
24         the taxable year to the extent excluded from gross
25         income in the computation of taxable income;
26             (B) An amount equal to the amount of tax imposed by
27         this Act to the extent deducted from gross income in
28         the computation of taxable income for the taxable year;
29             (C) In the case of a regulated investment company,
30         an amount equal to the excess of (i) the net long-term
31         capital gain for the taxable year, over (ii) the amount
32         of the capital gain dividends designated as such in
33         accordance with Section 852(b)(3)(C) of the Internal
34         Revenue Code and any amount designated under Section
35         852(b)(3)(D) of the Internal Revenue Code,

 

 

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1         attributable to the taxable year (this amendatory Act
2         of 1995 (Public Act 89-89) is declarative of existing
3         law and is not a new enactment);
4             (D) The amount of any net operating loss deduction
5         taken in arriving at taxable income, other than a net
6         operating loss carried forward from a taxable year
7         ending prior to December 31, 1986;
8             (E) For taxable years in which a net operating loss
9         carryback or carryforward from a taxable year ending
10         prior to December 31, 1986 is an element of taxable
11         income under paragraph (1) of subsection (e) or
12         subparagraph (E) of paragraph (2) of subsection (e),
13         the amount by which addition modifications other than
14         those provided by this subparagraph (E) exceeded
15         subtraction modifications in such earlier taxable
16         year, with the following limitations applied in the
17         order that they are listed:
18                 (i) the addition modification relating to the
19             net operating loss carried back or forward to the
20             taxable year from any taxable year ending prior to
21             December 31, 1986 shall be reduced by the amount of
22             addition modification under this subparagraph (E)
23             which related to that net operating loss and which
24             was taken into account in calculating the base
25             income of an earlier taxable year, and
26                 (ii) the addition modification relating to the
27             net operating loss carried back or forward to the
28             taxable year from any taxable year ending prior to
29             December 31, 1986 shall not exceed the amount of
30             such carryback or carryforward;
31             For taxable years in which there is a net operating
32         loss carryback or carryforward from more than one other
33         taxable year ending prior to December 31, 1986, the
34         addition modification provided in this subparagraph
35         (E) shall be the sum of the amounts computed
36         independently under the preceding provisions of this

 

 

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1         subparagraph (E) for each such taxable year;
2             (E-5) For taxable years ending after December 31,
3         1997, an amount equal to any eligible remediation costs
4         that the corporation deducted in computing adjusted
5         gross income and for which the corporation claims a
6         credit under subsection (l) of Section 201;
7             (E-10) For taxable years 2001 and thereafter, an
8         amount equal to the bonus depreciation deduction (30%
9         of the adjusted basis of the qualified property) taken
10         on the taxpayer's federal income tax return for the
11         taxable year under subsection (k) of Section 168 of the
12         Internal Revenue Code; and
13             (E-11) If the taxpayer reports a capital gain or
14         loss on the taxpayer's federal income tax return for
15         the taxable year based on a sale or transfer of
16         property for which the taxpayer was required in any
17         taxable year to make an addition modification under
18         subparagraph (E-10), then an amount equal to the
19         aggregate amount of the deductions taken in all taxable
20         years under subparagraph (T) with respect to that
21         property. ;
22             The taxpayer is required to make the addition
23         modification under this subparagraph only once with
24         respect to any one piece of property;
25     and by deducting from the total so obtained the sum of the
26     following amounts:
27             (F) An amount equal to the amount of any tax
28         imposed by this Act which was refunded to the taxpayer
29         and included in such total for the taxable year;
30             (G) An amount equal to any amount included in such
31         total under Section 78 of the Internal Revenue Code;
32             (H) In the case of a regulated investment company,
33         an amount equal to the amount of exempt interest
34         dividends as defined in subsection (b) (5) of Section
35         852 of the Internal Revenue Code, paid to shareholders
36         for the taxable year;

 

 

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1             (I) With the exception of any amounts subtracted
2         under subparagraph (J), an amount equal to the sum of
3         all amounts disallowed as deductions by (i) Sections
4         171(a) (2), and 265(a)(2) and amounts disallowed as
5         interest expense by Section 291(a)(3) of the Internal
6         Revenue Code, as now or hereafter amended, and all
7         amounts of expenses allocable to interest and
8         disallowed as deductions by Section 265(a)(1) of the
9         Internal Revenue Code, as now or hereafter amended; and
10         (ii) for taxable years ending on or after August 13,
11         1999, Sections 171(a)(2), 265, 280C, 291(a)(3), and
12         832(b)(5)(B)(i) of the Internal Revenue Code; the
13         provisions of this subparagraph are exempt from the
14         provisions of Section 250;
15             (J) An amount equal to all amounts included in such
16         total which are exempt from taxation by this State
17         either by reason of its statutes or Constitution or by
18         reason of the Constitution, treaties or statutes of the
19         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 net
23         of bond premium amortization;
24             (K) An amount equal to those dividends included in
25         such total which were paid by a corporation which
26         conducts business operations in an Enterprise Zone or
27         zones created under the Illinois Enterprise Zone Act
28         and conducts substantially all of its operations in an
29         Enterprise Zone or zones;
30             (L) An amount equal to those dividends included in
31         such total that were paid by a corporation that
32         conducts business operations in a federally designated
33         Foreign Trade Zone or Sub-Zone and that is designated a
34         High Impact Business located in Illinois; provided
35         that dividends eligible for the deduction provided in
36         subparagraph (K) of paragraph 2 of this subsection

 

 

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1         shall not be eligible for the deduction provided under
2         this subparagraph (L);
3             (M) For any taxpayer that is a financial
4         organization within the meaning of Section 304(c) of
5         this Act, an amount included in such total as interest
6         income from a loan or loans made by such taxpayer to a
7         borrower, to the extent that such a loan is secured by
8         property which is eligible for the Enterprise Zone
9         Investment Credit. To determine the portion of a loan
10         or loans that is secured by property eligible for a
11         Section 201(f) investment credit to the borrower, the
12         entire principal amount of the loan or loans between
13         the taxpayer and the borrower should be divided into
14         the basis of the Section 201(f) investment credit
15         property which secures the loan or loans, using for
16         this purpose the original basis of such property on the
17         date that it was placed in service in the Enterprise
18         Zone. The subtraction modification available to
19         taxpayer in any year under this subsection shall be
20         that portion of the total interest paid by the borrower
21         with respect to such loan attributable to the eligible
22         property as calculated under the previous sentence;
23             (M-1) For any taxpayer that is a financial
24         organization within the meaning of Section 304(c) of
25         this Act, an amount included in such total as interest
26         income from a loan or loans made by such taxpayer to a
27         borrower, to the extent that such a loan is secured by
28         property which is eligible for the High Impact Business
29         Investment Credit. To determine the portion of a loan
30         or loans that is secured by property eligible for a
31         Section 201(h) investment credit to the borrower, the
32         entire principal amount of the loan or loans between
33         the taxpayer and the borrower should be divided into
34         the basis of the Section 201(h) investment credit
35         property which secures the loan or loans, using for
36         this purpose the original basis of such property on the

 

 

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1         date that it was placed in service in a federally
2         designated Foreign Trade Zone or Sub-Zone located in
3         Illinois. No taxpayer that is eligible for the
4         deduction provided in subparagraph (M) of paragraph
5         (2) of this subsection shall be eligible for the
6         deduction provided under this subparagraph (M-1). The
7         subtraction modification available to taxpayers in any
8         year under this subsection shall be that portion of the
9         total interest paid by the borrower with respect to
10         such loan attributable to the eligible property as
11         calculated under the previous sentence;
12             (N) Two times any contribution made during the
13         taxable year to a designated zone organization to the
14         extent that the contribution (i) qualifies as a
15         charitable contribution under subsection (c) of
16         Section 170 of the Internal Revenue Code and (ii) must,
17         by its terms, be used for a project approved by the
18         Department of Commerce and Economic Opportunity
19         Community Affairs under Section 11 of the Illinois
20         Enterprise Zone Act;
21             (O) An amount equal to: (i) 85% for taxable years
22         ending on or before December 31, 1992, or, a percentage
23         equal to the percentage allowable under Section
24         243(a)(1) of the Internal Revenue Code of 1986 for
25         taxable years ending after December 31, 1992, of the
26         amount by which dividends included in taxable income
27         and received from a corporation that is not created or
28         organized under the laws of the United States or any
29         state or political subdivision thereof, including, for
30         taxable years ending on or after December 31, 1988,
31         dividends received or deemed received or paid or deemed
32         paid under Sections 951 through 964 of the Internal
33         Revenue Code, exceed the amount of the modification
34         provided under subparagraph (G) of paragraph (2) of
35         this subsection (b) which is related to such dividends;
36         plus (ii) 100% of the amount by which dividends,

 

 

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1         included in taxable income and received, including,
2         for taxable years ending on or after December 31, 1988,
3         dividends received or deemed received or paid or deemed
4         paid under Sections 951 through 964 of the Internal
5         Revenue Code, from any such corporation specified in
6         clause (i) that would but for the provisions of Section
7         1504 (b) (3) of the Internal Revenue Code be treated as
8         a member of the affiliated group which includes the
9         dividend recipient, exceed the amount of the
10         modification provided under subparagraph (G) of
11         paragraph (2) of this subsection (b) which is related
12         to such dividends;
13             (P) An amount equal to any contribution made to a
14         job training project established pursuant to the Tax
15         Increment Allocation Redevelopment Act;
16             (Q) An amount equal to the amount of the deduction
17         used to compute the federal income tax credit for
18         restoration of substantial amounts held under claim of
19         right for the taxable year pursuant to Section 1341 of
20         the Internal Revenue Code of 1986;
21             (R) In the case of an attorney-in-fact with respect
22         to whom an interinsurer or a reciprocal insurer has
23         made the election under Section 835 of the Internal
24         Revenue Code, 26 U.S.C. 835, an amount equal to the
25         excess, if any, of the amounts paid or incurred by that
26         interinsurer or reciprocal insurer in the taxable year
27         to the attorney-in-fact over the deduction allowed to
28         that interinsurer or reciprocal insurer with respect
29         to the attorney-in-fact under Section 835(b) of the
30         Internal Revenue Code for the taxable year;
31             (S) For taxable years ending on or after December
32         31, 1997, in the case of a Subchapter S corporation, an
33         amount equal to all amounts of income allocable to a
34         shareholder subject to the Personal Property Tax
35         Replacement Income Tax imposed by subsections (c) and
36         (d) of Section 201 of this Act, including amounts

 

 

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1         allocable to organizations exempt from federal income
2         tax by reason of Section 501(a) of the Internal Revenue
3         Code. This subparagraph (S) is exempt from the
4         provisions of Section 250;
5             (T) For taxable years 2001 and thereafter, for the
6         taxable year in which the bonus depreciation deduction
7         (30% of the adjusted basis of the qualified property)
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 (30% of
16             the adjusted basis of the qualified property) was
17             taken in any year under subsection (k) of Section
18             168 of the Internal Revenue Code, but not including
19             the bonus depreciation deduction; and
20                 (2) "x" equals "y" multiplied by 30 and then
21             divided by 70 (or "y" multiplied by 0.429).
22             The aggregate amount deducted under this
23         subparagraph in all taxable years for any one piece of
24         property may not exceed the amount of the bonus
25         depreciation deduction (30% of the adjusted basis of
26         the qualified property) taken on that property on the
27         taxpayer's federal income tax return under subsection
28         (k) of Section 168 of the Internal Revenue Code; and
29             (U) If the taxpayer reports a capital gain or loss
30         on the taxpayer's federal income tax return for the
31         taxable year based on a sale or transfer of property
32         for which the taxpayer was required in any taxable year
33         to make an addition modification under subparagraph
34         (E-10), then an amount equal to that addition
35         modification.
36             The taxpayer is allowed to take the deduction under

 

 

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1         this subparagraph only once with respect to any one
2         piece of property.
3         (3) Special rule. For purposes of paragraph (2) (A),
4     "gross income" in the case of a life insurance company, for
5     tax years ending on and after December 31, 1994, shall mean
6     the gross investment income for the taxable year.
 
7     (c) Trusts and estates.
8         (1) In general. In the case of a trust or estate, base
9     income means an amount equal to the taxpayer's taxable
10     income for the taxable year as modified by paragraph (2).
11         (2) Modifications. Subject to the provisions of
12     paragraph (3), the taxable income referred to in paragraph
13     (1) shall be modified by adding thereto the sum of the
14     following amounts:
15             (A) An amount equal to all amounts paid or accrued
16         to the taxpayer as interest or dividends during the
17         taxable year to the extent excluded from gross income
18         in the computation of taxable income;
19             (B) In the case of (i) an estate, $600; (ii) a
20         trust which, under its governing instrument, is
21         required to distribute all of its income currently,
22         $300; and (iii) any other trust, $100, but in each such
23         case, only to the extent such amount was deducted in
24         the computation of taxable income;
25             (C) An amount equal to the amount of tax imposed by
26         this Act to the extent deducted from gross income in
27         the computation of taxable income for the taxable year;
28             (D) The amount of any net operating loss deduction
29         taken in arriving at taxable income, other than a net
30         operating loss carried forward from a taxable year
31         ending prior to December 31, 1986;
32             (E) For taxable years in which a net operating loss
33         carryback or carryforward from a taxable year ending
34         prior to December 31, 1986 is an element of taxable
35         income under paragraph (1) of subsection (e) or

 

 

HB4749 - 19 - LRB093 18557 SJM 44278 b

1         subparagraph (E) of paragraph (2) of subsection (e),
2         the amount by which addition modifications other than
3         those provided by this subparagraph (E) exceeded
4         subtraction modifications in such taxable year, with
5         the following limitations applied in the order that
6         they are listed:
7                 (i) the addition modification relating to the
8             net operating loss carried back or forward to the
9             taxable year from any taxable year ending prior to
10             December 31, 1986 shall be reduced by the amount of
11             addition modification under this subparagraph (E)
12             which related to that net operating loss and which
13             was taken into account in calculating the base
14             income of an earlier taxable year, and
15                 (ii) the addition modification relating to the
16             net operating loss carried back or forward to the
17             taxable year from any taxable year ending prior to
18             December 31, 1986 shall not exceed the amount of
19             such carryback or carryforward;
20             For taxable years in which there is a net operating
21         loss carryback or carryforward from more than one other
22         taxable year ending prior to December 31, 1986, the
23         addition modification provided in this subparagraph
24         (E) shall be the sum of the amounts computed
25         independently under the preceding provisions of this
26         subparagraph (E) for each such taxable year;
27             (F) For taxable years ending on or after January 1,
28         1989, an amount equal to the tax deducted pursuant to
29         Section 164 of the Internal Revenue Code if the trust
30         or estate is claiming the same tax for purposes of the
31         Illinois foreign tax credit under Section 601 of this
32         Act;
33             (G) An amount equal to the amount of the capital
34         gain deduction allowable under the Internal Revenue
35         Code, to the extent deducted from gross income in the
36         computation of taxable income;

 

 

HB4749 - 20 - LRB093 18557 SJM 44278 b

1             (G-5) For taxable years ending after December 31,
2         1997, an amount equal to any eligible remediation costs
3         that the trust or estate deducted in computing adjusted
4         gross income and for which the trust or estate claims a
5         credit under subsection (l) of Section 201;
6             (G-10) For taxable years 2001 and thereafter, an
7         amount equal to the bonus depreciation deduction (30%
8         of the adjusted basis of the qualified property) taken
9         on the taxpayer's federal income tax return for the
10         taxable year under subsection (k) of Section 168 of the
11         Internal Revenue Code; and
12             (G-11) If the taxpayer reports a capital gain or
13         loss on the taxpayer's federal income tax return for
14         the taxable year based on a sale or transfer of
15         property for which the taxpayer was required in any
16         taxable year to make an addition modification under
17         subparagraph (G-10), then an amount equal to the
18         aggregate amount of the deductions taken in all taxable
19         years under subparagraph (R) with respect to that
20         property. ;
21             The taxpayer is required to make the addition
22         modification under this subparagraph only once with
23         respect to any one piece of property;
24     and by deducting from the total so obtained the sum of the
25     following amounts:
26             (H) Through taxable years ending on or before
27         December 31, 2003, an An amount equal to all amounts
28         included in such total pursuant to the provisions of
29         Sections 402(a), 402(c), 403(a), 403(b), 406(a),
30         407(a) and 408 of the Internal Revenue Code or included
31         in such total as distributions under the provisions of
32         any retirement or disability plan for employees of any
33         governmental agency or unit, or retirement payments to
34         retired partners, which payments are excluded in
35         computing net earnings from self employment by Section
36         1402 of the Internal Revenue Code and regulations

 

 

HB4749 - 21 - LRB093 18557 SJM 44278 b

1         adopted pursuant thereto. For taxable years ending on
2         or after December 31, 2004, an amount equal to all
3         amounts of $40,000 or less included in such total
4         pursuant to the provisions of Sections 402(a), 402(c),
5         403(a), 403(b), 406(a), 407(a), and 408 of the Internal
6         Revenue Code, or included in such total as
7         distributions under the provisions of any retirement
8         or disability plan for employees of any governmental
9         agency or unit, or retirement payments to retired
10         partners, which payments are excluded in computing net
11         earnings from self employment by Section 1402 of the
12         Internal Revenue Code and regulations adopted pursuant
13         thereto;
14             (I) The valuation limitation amount;
15             (J) An amount equal to the amount of any tax
16         imposed by this Act which was refunded to the taxpayer
17         and included in such total for the taxable year;
18             (K) An amount equal to all amounts included in
19         taxable income as modified by subparagraphs (A), (B),
20         (C), (D), (E), (F) and (G) which are exempt from
21         taxation by this State either by reason of its statutes
22         or Constitution or by reason of the Constitution,
23         treaties or statutes of the United States; provided
24         that, in the case of any statute of this State that
25         exempts income derived from bonds or other obligations
26         from the tax imposed under this Act, the amount
27         exempted shall be the interest net of bond premium
28         amortization;
29             (L) With the exception of any amounts subtracted
30         under subparagraph (K), an amount equal to the sum of
31         all amounts disallowed as deductions by (i) Sections
32         171(a) (2) and 265(a)(2) of the Internal Revenue Code,
33         as now or hereafter amended, and all amounts of
34         expenses allocable to interest and disallowed as
35         deductions by Section 265(1) of the Internal Revenue
36         Code of 1954, as now or hereafter amended; and (ii) for

 

 

HB4749 - 22 - LRB093 18557 SJM 44278 b

1         taxable years ending on or after August 13, 1999,
2         Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of
3         the Internal Revenue Code; the provisions of this
4         subparagraph are exempt from the provisions of Section
5         250;
6             (M) An amount equal to those dividends included in
7         such total which were paid by a corporation which
8         conducts business operations in an Enterprise Zone or
9         zones created under the Illinois Enterprise Zone Act
10         and conducts substantially all of its operations in an
11         Enterprise Zone or Zones;
12             (N) An amount equal to any contribution made to a
13         job training project established pursuant to the Tax
14         Increment Allocation Redevelopment Act;
15             (O) An amount equal to those dividends included in
16         such total that were paid by a corporation that
17         conducts business operations in a federally designated
18         Foreign Trade Zone or Sub-Zone and that is designated a
19         High Impact Business located in Illinois; provided
20         that dividends eligible for the deduction provided in
21         subparagraph (M) of paragraph (2) of this subsection
22         shall not be eligible for the deduction provided under
23         this subparagraph (O);
24             (P) An amount equal to the amount of the deduction
25         used to compute the federal income tax credit for
26         restoration of substantial amounts held under claim of
27         right for the taxable year pursuant to Section 1341 of
28         the Internal Revenue Code of 1986;
29             (Q) For taxable year 1999 and thereafter, an amount
30         equal to the amount of any (i) distributions, to the
31         extent includible in gross income for federal income
32         tax purposes, made to the taxpayer because of his or
33         her status as a victim of persecution for racial or
34         religious reasons by Nazi Germany or any other Axis
35         regime or as an heir of the victim and (ii) items of
36         income, to the extent includible in gross income for

 

 

HB4749 - 23 - LRB093 18557 SJM 44278 b

1         federal income tax purposes, attributable to, derived
2         from or in any way related to assets stolen from,
3         hidden from, or otherwise lost to a victim of
4         persecution for racial or religious reasons by Nazi
5         Germany or any other Axis regime immediately prior to,
6         during, and immediately after World War II, including,
7         but not limited to, interest on the proceeds receivable
8         as insurance under policies issued to a victim of
9         persecution for racial or religious reasons by Nazi
10         Germany or any other Axis regime by European insurance
11         companies immediately prior to and during World War II;
12         provided, however, this subtraction from federal
13         adjusted gross income does not apply to assets acquired
14         with such assets or with the proceeds from the sale of
15         such assets; provided, further, this paragraph shall
16         only apply to a taxpayer who was the first recipient of
17         such assets after their recovery and who is a victim of
18         persecution for racial or religious reasons by Nazi
19         Germany or any other Axis regime or as an heir of the
20         victim. The amount of and the eligibility for any
21         public assistance, benefit, or similar entitlement is
22         not affected by the inclusion of items (i) and (ii) of
23         this paragraph in gross income for federal income tax
24         purposes. This paragraph is exempt from the provisions
25         of Section 250;
26             (R) For taxable years 2001 and thereafter, for the
27         taxable year in which the bonus depreciation deduction
28         (30% of the adjusted basis of the qualified property)
29         is taken on the taxpayer's federal income tax return
30         under subsection (k) of Section 168 of the Internal
31         Revenue Code and for each applicable taxable year
32         thereafter, an amount equal to "x", where:
33                 (1) "y" equals the amount of the depreciation
34             deduction taken for the taxable year on the
35             taxpayer's federal income tax return on property
36             for which the bonus depreciation deduction (30% of

 

 

HB4749 - 24 - LRB093 18557 SJM 44278 b

1             the adjusted basis of the qualified property) was
2             taken in any year under subsection (k) of Section
3             168 of the Internal Revenue Code, but not including
4             the bonus depreciation deduction; and
5                 (2) "x" equals "y" multiplied by 30 and then
6             divided by 70 (or "y" multiplied by 0.429).
7             The aggregate amount deducted under this
8         subparagraph in all taxable years for any one piece of
9         property may not exceed the amount of the bonus
10         depreciation deduction (30% of the adjusted basis of
11         the qualified property) taken on that property on the
12         taxpayer's federal income tax return under subsection
13         (k) of Section 168 of the Internal Revenue Code; and
14             (S) If the taxpayer reports a capital gain or loss
15         on the taxpayer's federal income tax return for the
16         taxable year based on a sale or transfer of property
17         for which the taxpayer was required in any taxable year
18         to make an addition modification under subparagraph
19         (G-10), then an amount equal to that addition
20         modification.
21             The taxpayer is allowed to take the deduction under
22         this subparagraph only once with respect to any one
23         piece of property.
24         (3) Limitation. The amount of any modification
25     otherwise required under this subsection shall, under
26     regulations prescribed by the Department, be adjusted by
27     any amounts included therein which were properly paid,
28     credited, or required to be distributed, or permanently set
29     aside for charitable purposes pursuant to Internal Revenue
30     Code Section 642(c) during the taxable year.
 
31     (d) Partnerships.
32         (1) In general. In the case of a partnership, base
33     income means an amount equal to the taxpayer's taxable
34     income for the taxable year as modified by paragraph (2).
35         (2) Modifications. The taxable income referred to in

 

 

HB4749 - 25 - LRB093 18557 SJM 44278 b

1     paragraph (1) shall be modified by adding thereto the sum
2     of the following amounts:
3             (A) An amount equal to all amounts paid or accrued
4         to the taxpayer as interest or dividends during the
5         taxable year to the extent excluded from gross income
6         in the computation of taxable income;
7             (B) An amount equal to the amount of tax imposed by
8         this Act to the extent deducted from gross income for
9         the taxable year;
10             (C) The amount of deductions allowed to the
11         partnership pursuant to Section 707 (c) of the Internal
12         Revenue Code in calculating its taxable income;
13             (D) An amount equal to the amount of the capital
14         gain deduction allowable under the Internal Revenue
15         Code, to the extent deducted from gross income in the
16         computation of taxable income;
17             (D-5) For taxable years 2001 and thereafter, an
18         amount equal to the bonus depreciation deduction (30%
19         of the adjusted basis of the qualified property) taken
20         on the taxpayer's federal income tax return for the
21         taxable year under subsection (k) of Section 168 of the
22         Internal Revenue Code; and
23             (D-6) If the taxpayer reports a capital gain or
24         loss on the taxpayer's federal income tax return for
25         the taxable year based on a sale or transfer of
26         property for which the taxpayer was required in any
27         taxable year to make an addition modification under
28         subparagraph (D-5), then an amount equal to the
29         aggregate amount of the deductions taken in all taxable
30         years under subparagraph (O) with respect to that
31         property. ;
32             The taxpayer is required to make the addition
33         modification under this subparagraph only once with
34         respect to any one piece of property;
35     and by deducting from the total so obtained the following
36     amounts:

 

 

HB4749 - 26 - LRB093 18557 SJM 44278 b

1             (E) The valuation limitation amount;
2             (F) An amount equal to the amount of any tax
3         imposed by this Act which was refunded to the taxpayer
4         and included in such total for the taxable year;
5             (G) An amount equal to all amounts included in
6         taxable income as modified by subparagraphs (A), (B),
7         (C) and (D) which are exempt from taxation by this
8         State either by reason of its statutes or Constitution
9         or by reason of the Constitution, treaties or statutes
10         of the United States; provided that, in the case of any
11         statute of this State that exempts income derived from
12         bonds or other obligations from the tax imposed under
13         this Act, the amount exempted shall be the interest net
14         of bond premium amortization;
15             (H) Any income of the partnership which
16         constitutes personal service income as defined in
17         Section 1348 (b) (1) of the Internal Revenue Code (as
18         in effect December 31, 1981) or a reasonable allowance
19         for compensation paid or accrued for services rendered
20         by partners to the partnership, whichever is greater;
21             (I) An amount equal to all amounts of income
22         distributable to an entity subject to the Personal
23         Property Tax Replacement Income Tax imposed by
24         subsections (c) and (d) of Section 201 of this Act
25         including amounts distributable to organizations
26         exempt from federal income tax by reason of Section
27         501(a) of the Internal Revenue Code;
28             (J) With the exception of any amounts subtracted
29         under subparagraph (G), an amount equal to the sum of
30         all amounts disallowed as deductions by (i) Sections
31         171(a) (2), and 265(2) of the Internal Revenue Code of
32         1954, as now or hereafter amended, and all amounts of
33         expenses allocable to interest and disallowed as
34         deductions by Section 265(1) of the Internal Revenue
35         Code, as now or hereafter amended; and (ii) for taxable
36         years ending on or after August 13, 1999, Sections

 

 

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1         171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
2         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 an Enterprise Zone or
8         zones created under the Illinois Enterprise Zone Act,
9         enacted by the 82nd General Assembly, and conducts
10         substantially all of its operations in an Enterprise
11         Zone or Zones;
12             (L) An amount equal to any contribution made to a
13         job training project established pursuant to the Real
14         Property Tax Increment Allocation Redevelopment Act;
15             (M) An amount equal to those dividends included in
16         such total that were paid by a corporation that
17         conducts business operations in a federally designated
18         Foreign Trade Zone or Sub-Zone and that is designated a
19         High Impact Business located in Illinois; provided
20         that dividends eligible for the deduction provided in
21         subparagraph (K) of paragraph (2) of this subsection
22         shall not be eligible for the deduction provided under
23         this subparagraph (M);
24             (N) An amount equal to the amount of the deduction
25         used to compute the federal income tax credit for
26         restoration of substantial amounts held under claim of
27         right for the taxable year pursuant to Section 1341 of
28         the Internal Revenue Code of 1986;
29             (O) For taxable years 2001 and thereafter, for the
30         taxable year in which the bonus depreciation deduction
31         (30% of the adjusted basis of the qualified property)
32         is taken on the taxpayer's federal income tax return
33         under subsection (k) of Section 168 of the Internal
34         Revenue Code and for each applicable taxable year
35         thereafter, an amount equal to "x", where:
36                 (1) "y" equals the amount of the depreciation

 

 

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1             deduction taken for the taxable year on the
2             taxpayer's federal income tax return on property
3             for which the bonus depreciation deduction (30% of
4             the adjusted basis of the qualified property) was
5             taken in any year under subsection (k) of Section
6             168 of the Internal Revenue Code, but not including
7             the bonus depreciation deduction; and
8                 (2) "x" equals "y" multiplied by 30 and then
9             divided by 70 (or "y" multiplied by 0.429).
10             The aggregate amount deducted under this
11         subparagraph in all taxable years for any one piece of
12         property may not exceed the amount of the bonus
13         depreciation deduction (30% of the adjusted basis of
14         the qualified property) taken on that property on the
15         taxpayer's federal income tax return under subsection
16         (k) of Section 168 of the Internal Revenue Code; and
17             (P) If the taxpayer reports a capital gain or loss
18         on the taxpayer's federal income tax return for the
19         taxable year based on a sale or transfer of property
20         for which the taxpayer was required in any taxable year
21         to make an addition modification under subparagraph
22         (D-5), then an amount equal to that addition
23         modification.
24             The taxpayer is allowed to take the deduction under
25         this subparagraph only once with respect to any one
26         piece of property.
 
27     (e) Gross income; adjusted gross income; taxable income.
28         (1) In general. Subject to the provisions of paragraph
29     (2) and subsection (b) (3), for purposes of this Section
30     and Section 803(e), a taxpayer's gross income, adjusted
31     gross income, or taxable income for the taxable year shall
32     mean the amount of gross income, adjusted gross income or
33     taxable income properly reportable for federal income tax
34     purposes for the taxable year under the provisions of the
35     Internal Revenue Code. Taxable income may be less than

 

 

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1     zero. However, for taxable years ending on or after
2     December 31, 1986, net operating loss carryforwards from
3     taxable years ending prior to December 31, 1986, may not
4     exceed the sum of federal taxable income for the taxable
5     year before net operating loss deduction, plus the excess
6     of addition modifications over subtraction modifications
7     for the taxable year. For taxable years ending prior to
8     December 31, 1986, taxable income may never be an amount in
9     excess of the net operating loss for the taxable year as
10     defined in subsections (c) and (d) of Section 172 of the
11     Internal Revenue Code, provided that when taxable income of
12     a corporation (other than a Subchapter S corporation),
13     trust, or estate is less than zero and addition
14     modifications, other than those provided by subparagraph
15     (E) of paragraph (2) of subsection (b) for corporations or
16     subparagraph (E) of paragraph (2) of subsection (c) for
17     trusts and estates, exceed subtraction modifications, an
18     addition modification must be made under those
19     subparagraphs for any other taxable year to which the
20     taxable income less than zero (net operating loss) is
21     applied under Section 172 of the Internal Revenue Code or
22     under subparagraph (E) of paragraph (2) of this subsection
23     (e) applied in conjunction with Section 172 of the Internal
24     Revenue Code.
25         (2) Special rule. For purposes of paragraph (1) of this
26     subsection, the taxable income properly reportable for
27     federal income tax purposes shall mean:
28             (A) Certain life insurance companies. In the case
29         of a life insurance company subject to the tax imposed
30         by Section 801 of the Internal Revenue Code, life
31         insurance company taxable income, plus the amount of
32         distribution from pre-1984 policyholder surplus
33         accounts as calculated under Section 815a of the
34         Internal Revenue Code;
35             (B) Certain other insurance companies. In the case
36         of mutual insurance companies subject to the tax

 

 

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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 a
8         real estate investment trust subject to the tax imposed
9         by Section 857 of the Internal Revenue Code, real
10         estate investment trust taxable income;
11             (E) Consolidated corporations. In the case of a
12         corporation which is a member of an affiliated group of
13         corporations filing a consolidated income tax return
14         for the taxable year for federal income tax purposes,
15         taxable income determined as if such corporation had
16         filed a separate return for federal income tax purposes
17         for the taxable year and each preceding taxable year
18         for which it was a member of an affiliated group. For
19         purposes of this subparagraph, the taxpayer's separate
20         taxable income shall be determined as if the election
21         provided by Section 243(b) (2) of the Internal Revenue
22         Code had been in effect for all such years;
23             (F) Cooperatives. In the case of a cooperative
24         corporation or association, the taxable income of such
25         organization determined in accordance with the
26         provisions of Section 1381 through 1388 of the Internal
27         Revenue Code;
28             (G) Subchapter S corporations. In the case of: (i)
29         a Subchapter S corporation for which there is in effect
30         an election for the taxable year under Section 1362 of
31         the Internal Revenue Code, the taxable income of such
32         corporation determined in accordance with Section
33         1363(b) of the Internal Revenue Code, except that
34         taxable income shall take into account those items
35         which are required by Section 1363(b)(1) of the
36         Internal Revenue Code to be separately stated; and (ii)

 

 

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1         a Subchapter S corporation for which there is in effect
2         a federal election to opt out of the provisions of the
3         Subchapter S Revision Act of 1982 and have applied
4         instead the prior federal Subchapter S rules as in
5         effect on July 1, 1982, the taxable income of such
6         corporation determined in accordance with the federal
7         Subchapter S rules as in effect on July 1, 1982; and
8             (H) Partnerships. In the case of a partnership,
9         taxable income determined in accordance with Section
10         703 of the Internal Revenue Code, except that taxable
11         income shall take into account those items which are
12         required by Section 703(a)(1) to be separately stated
13         but which would be taken into account by an individual
14         in calculating his taxable income.
 
15     (f) Valuation limitation amount.
16         (1) In general. The valuation limitation amount
17     referred to in subsections (a) (2) (G), (c) (2) (I) and
18     (d)(2) (E) is an amount equal to:
19             (A) The sum of the pre-August 1, 1969 appreciation
20         amounts (to the extent consisting of gain reportable
21         under the provisions of Section 1245 or 1250 of the
22         Internal Revenue Code) for all property in respect of
23         which such gain was reported for the taxable year; plus
24             (B) The lesser of (i) the sum of the pre-August 1,
25         1969 appreciation amounts (to the extent consisting of
26         capital gain) for all property in respect of which such
27         gain was reported for federal income tax purposes for
28         the taxable year, or (ii) the net capital gain for the
29         taxable year, reduced in either case by any amount of
30         such gain included in the amount determined under
31         subsection (a) (2) (F) or (c) (2) (H).
32         (2) Pre-August 1, 1969 appreciation amount.
33             (A) If the fair market value of property referred
34         to in paragraph (1) was readily ascertainable on August
35         1, 1969, the pre-August 1, 1969 appreciation amount for

 

 

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

 

 

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1 (Source: P.A. 91-192, eff. 7-20-99; 91-205, eff. 7-20-99;
2 91-357, eff. 7-29-99; 91-541, eff. 8-13-99; 91-676, eff.
3 12-23-99; 91-845, eff. 6-22-00; 91-913, eff. 1-1-01; 92-16,
4 eff. 6-28-01; 92-244, eff. 8-3-01; 92-439, eff. 8-17-01;
5 92-603, eff. 6-28-02; 92-626, eff. 7-11-02; 92-651, eff.
6 7-11-02; 92-846, eff. 8-23-02; revised 10-15-03.)
 
7     (35 ILCS 5/204)  (from Ch. 120, par. 2-204)
8     Sec. 204. Standard Exemption.
9     (a) Allowance of exemption. In computing net income under
10 this Act, there shall be allowed as an exemption the sum of the
11 amounts determined under subsections (b), (c) and (d),
12 multiplied by a fraction the numerator of which is the amount
13 of the taxpayer's base income allocable to this State for the
14 taxable year and the denominator of which is the taxpayer's
15 total base income for the taxable year.
16     (b) Basic amount. For the purpose of subsection (a) of this
17 Section, except as provided by subsection (a) of Section 205
18 and in this subsection, each taxpayer shall be allowed a basic
19 amount of $1000, except that for corporations the basic amount
20 shall be zero for tax years ending on or after December 31,
21 2003, and for individuals the basic amount shall be:
22         (1) for taxable years ending on or after December 31,
23     1998 and prior to December 31, 1999, $1,300;
24         (2) for taxable years ending on or after December 31,
25     1999 and prior to December 31, 2000, $1,650;
26         (3) for taxable years ending on or after December 31,
27     2000, $2,000.
28 For taxable years ending on or after December 31, 1992, a
29 taxpayer whose Illinois base income exceeds the basic amount
30 and who is claimed as a dependent on another person's tax
31 return under the Internal Revenue Code of 1986 shall not be
32 allowed any basic amount under this subsection.
33     (c) Additional amount for individuals. In the case of an
34 individual taxpayer, there shall be allowed for the purpose of
35 subsection (a), in addition to the basic amount provided by

 

 

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1 subsection (b), an additional exemption equal to the basic
2 amount for each exemption in excess of one allowable to such
3 individual taxpayer for the taxable year under Section 151 of
4 the Internal Revenue Code.
5     (d) Additional exemptions for an individual taxpayer and
6 his or her spouse. In the case of an individual taxpayer and
7 his or her spouse, he or she shall each be allowed additional
8 exemptions as follows:
9         (1) Additional exemption for taxpayer or spouse 65
10     years of age or older.
11             (A) For taxpayer. An additional exemption of
12         $1,000 for the taxpayer if he or she has attained the
13         age of 65 before the end of the taxable year, for
14         taxable years ending before December 31, 2004. For
15         taxable years ending on or after December 31, 2004, the
16         amount shall be $10,000.
17             (B) For spouse when a joint return is not filed. An
18         additional exemption of $1,000, for taxable years
19         ending before December 31, 2004, for the spouse of the
20         taxpayer if a joint return is not made by the taxpayer
21         and his spouse, and if the spouse has attained the age
22         of 65 before the end of such taxable year, and, for the
23         calendar year in which the taxable year of the taxpayer
24         begins, has no gross income and is not the dependent of
25         another taxpayer. For taxable years ending on or after
26         December 31, 2004, the amount shall be $10,000.
27         (2) Additional exemption for blindness of taxpayer or
28     spouse.
29             (A) For taxpayer. An additional exemption of
30         $1,000 for the taxpayer if he or she is blind at the
31         end of the taxable year.
32             (B) For spouse when a joint return is not filed. An
33         additional exemption of $1,000 for the spouse of the
34         taxpayer if a separate return is made by the taxpayer,
35         and if the spouse is blind and, for the calendar year
36         in which the taxable year of the taxpayer begins, has

 

 

HB4749 - 35 - LRB093 18557 SJM 44278 b

1         no gross income and is not the dependent of another
2         taxpayer. For purposes of this paragraph, the
3         determination of whether the spouse is blind shall be
4         made as of the end of the taxable year of the taxpayer;
5         except that if the spouse dies during such taxable year
6         such determination shall be made as of the time of such
7         death.
8             (C) Blindness defined. For purposes of this
9         subsection, an individual is blind only if his or her
10         central visual acuity does not exceed 20/200 in the
11         better eye with correcting lenses, or if his or her
12         visual acuity is greater than 20/200 but is accompanied
13         by a limitation in the fields of vision such that the
14         widest diameter of the visual fields subtends an angle
15         no greater than 20 degrees.
16     (e) Cross reference. See Article 3 for the manner of
17 determining base income allocable to this State.
18     (f) Application of Section 250. Section 250 does not apply
19 to the amendments to this Section made by Public Act 90-613.
20 (Source: P.A. 93-29, eff. 6-20-03.)
 
21     Section 99. Effective date. This Act takes effect on
22 January 1, 2005.