94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
HB1577

 

Introduced 2/15/2005, by Rep. Joseph M. Lyons

 

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

    Creates the Opportunity Scholarship Act and amends the Illinois Income Tax Act. Provides findings and declarations of policy. Establishes the Opportunity Scholarship Program. Provides that under the program the custodian of a qualifying pupil is entitled to a Tutoring Opportunity Scholarship or a School Opportunity Scholarship to pay for qualified education expenses at participating Chicago elementary and secondary schools or tutoring agencies. Requires the principal of each school in the Chicago school district to notify custodians of qualified pupils of the availability of scholarships. Requires custodians to apply to the State Board of Education for a scholarship and provide documentation as to eligibility. Requires the State Board to issue a scholarship to custodians who have made proper application and to honor the scholarship when presented for payment by a school or tutoring agency pursuant to certain procedures. Provides for the dollar amount of a scholarship and provides that the total amount of scholarships paid under the program may not exceed $15,000,000 in a school year. Provides that the scholarship may be renewed each year through the 12th grade so long as the pupil and custodian remain eligible. Requires pupils receiving scholarships to be assessed in the same manner as Illinois public school students. Provides that the amount received under the program shall not be considered base income for purposes of Illinois' income tax. Requires the State Board to submit a report to the General Assembly by December 31, 2010. Provides criminal penalties for certain violations. Requires the State Board to adopt rules to implement the Act.


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CORRECTIONAL BUDGET AND IMPACT NOTE ACT MAY APPLY
FISCAL NOTE ACT MAY APPLY
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

 

 

A BILL FOR

 

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1     AN ACT concerning education.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 1. Short title. This Act may be cited as the
5 Opportunity Scholarship Act.
 
6     Section 5. Findings and declaration of policy. The General
7 Assembly finds and declares the following:
8         (1) By honoring the provision of the Illinois
9     Constitution that a "fundamental goal of the People of the
10     State is the educational development of all persons to the
11     limits of their capacities" and in accepting the
12     responsibilities under the Bill of Rights (Article I) of
13     the Illinois Constitution to protect the personal inherent
14     and inalienable rights of all its citizens to due process
15     of law and equal protection of the laws, the educational
16     development of every elementary and secondary school
17     student serves the public purposes of this State.
18         (2) The freedom of custodians to choose for their
19     children schools acceptable to their personal educational
20     convictions is an inherent and inalienable personal right
21     under the Illinois and federal constitutions; the personal
22     rights of custodians to such academic freedom stands on its
23     own constitutional merits; and the imposition on families
24     of the compulsory education law imposes grave
25     responsibilities on the General Assembly to safeguard the
26     academic freedom of choice of schools of custodians and
27     students.
28         (3) There is a crisis in the elementary and secondary
29     education programs in Chicago and elsewhere in Illinois.
30     Many schools and their pupils are performing significantly
31     below relevant national standards and are unable to access
32     functions of federal and State law designed to improve

 

 

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1     their performance. Consequently, many pupils are dropping
2     out of school before completing the ordinary course of
3     secondary education or are leaving school without the basic
4     skills and knowledge that will enable them to find and hold
5     a job or otherwise become functioning, productive members
6     of our society.
7         (4) Within Chicago and elsewhere in Illinois there are
8     many public and nonpublic schools and independent
9     education services competently and efficiently educating
10     or contributing to the education of children. Most pupils
11     in those schools or receiving those services perform at or
12     above relevant national standards, complete their
13     secondary education, and matriculate to institutions of
14     higher education at an extremely high rate. These services
15     and schools should be accessible to all and should enjoy a
16     cooperative relationship with public school districts,
17     schools, and employees of this State.
18         (5) Custodians of school age children in Chicago and
19     elsewhere in Illinois are frequently unable to enroll their
20     children in schools that will provide them a quality
21     education or to access educational programs before or after
22     school. Sometimes this inability is due to laws, rules, or
23     administrative decisions that limit parents' freedom to
24     select schools that they believe can provide their children
25     with a quality education. Sometimes this inability is due
26     to the parents' lack of standing to influence the
27     educational policies and procedures of the schools their
28     children attend or lack of funds to pay for a quality
29     education.
30         (6) Adopting a pilot opportunity scholarship program
31     for Chicago, with the potential to expand elsewhere in
32     Illinois, would enable parents to select schools or
33     services they believe will provide a quality education for
34     their children, empower them to influence the educational
35     policies and procedures in the schools their children
36     attend, and provide them with at least a portion of the

 

 

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1     funds necessary to pay for a quality education. Such a
2     program would help alleviate the crisis in the Chicago
3     school system, assist Chicago children in becoming
4     productive members of society, and test a new approach to
5     education that could be expanded to the rest of the State.
6         (7) The provisions of this Act are in the public
7     interest, for the public benefit, and serve a secular
8     public purpose.
 
9     Section 10. Definitions. As used in this Act:
10     "Base year" means the 2005-2006 school year.
11     "Custodian" means, with respect to a qualifying pupil, a
12 parent or legal guardian:
13         (1) who is a resident of the City of Chicago; and
14         (2) whose gross family income does not exceed 300% of
15     the poverty guidelines updated periodically in the Federal
16     Register by the U.S. Department of Health and Human
17     Services.
18     "Qualified education expenses" means costs reasonably
19 incurred on behalf of a qualifying pupil for the services of a
20 participating tutoring agency or for services of a
21 participating school in which the qualifying pupil is enrolled
22 during the regular school year. Qualified education expenses
23 does not include costs incurred for supplies or
24 extra-curricular activities.
25     "Qualifying pupil" means an individual who:
26         (1) is a resident of the City of Chicago;
27         (2) is under the age of 21 at the close of the school
28     year for which a scholarship is sought; and
29         (3) during the school year for which a scholarship is
30     sought, is a full-time pupil enrolled in a kindergarten
31     through 12th grade education program at any school as
32     defined in this Act.
33     "School" means any public or nonpublic elementary or
34 secondary school in the City of Chicago that elects to
35 participate in the scholarship program established under this

 

 

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1 Act and does not discriminate on the basis of race, color, or
2 national origin under Title VI of the Civil Rights Act of 1964
3 and attendance at which satisfies the requirements of Section
4 26-1 of the School Code, except that nothing in Section 26-1
5 shall be construed to require a child to attend any particular
6 public or nonpublic school.
7     "School Opportunity Scholarship" means a written
8 instrument issued by the State Board of Education directly to
9 the custodian of a qualifying pupil. The instrument shall be
10 for a sum certain to be paid within a designated period of
11 time. The custodian may present the instrument only to a
12 participating school as payment for qualified education
13 expenses incurred on behalf of the qualifying pupil.
14     "Tutoring agency" means any entity that elects to
15 participate in the scholarship program and is approved by the
16 State Board of Education for providing tutoring to qualifying
17 pupils.
18     "Tutoring Opportunity Scholarship" means a written
19 instrument with which a custodian of a qualifying pupil may pay
20 a participating tutoring agency for qualified education
21 expenses incurred on behalf of the qualifying pupil. The
22 scholarship shall require the State Board of Education to pay
23 the participating tutoring agency a sum certain within a
24 designated time period.
 
25     Section 15. Establishment of program. There is established
26 the Opportunity Scholarship Program. Under the program, after
27 the base year, a custodian of a qualifying pupil shall be
28 entitled to his or her choice of a Tutoring Opportunity
29 Scholarship for payment of qualified education expenses
30 incurred on behalf of the qualifying pupil for the services of
31 a participating tutoring agency or a School Opportunity
32 Scholarship for payment of qualified education expenses
33 incurred on behalf of the qualifying pupil at any participating
34 school in which the qualifying pupil is enrolled. A qualifying
35 pupil shall be entitled to enroll at and attend any

 

 

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1 participating public or nonpublic school of his or her choice.
2 Each school year, no more than half of new Tutoring or School
3 Opportunity Scholarships awarded may go to custodians whose
4 children were previously enrolled in a nonpublic school.
 
5     Section 20. Notification of scholarships. The principal of
6 each school in City of Chicago School District 299 shall notify
7 custodians of qualifying pupils that scholarships under this
8 Act are available for the next school year. Notification shall
9 occur in January of each school year beginning with the base
10 year.
 
11     Section 25. Request for scholarship. A custodian who
12 applies in accordance with procedures established by the State
13 Board of Education shall receive the chosen scholarship under
14 this Act within the dollar limits set out in this Act. The
15 procedure shall require application for the scholarship, with
16 documentation as to eligibility, between March 1 and May 1
17 prior to the school year in which the scholarship is to be
18 used.
 
19     Section 30. Issuance and payment of scholarship. A
20 scholarship may only be issued to a custodian who has made
21 proper application pursuant to Section 25 of this Act. The
22 custodian shall present the scholarship to a participating
23 tutoring agency or school of his or her choice as payment for
24 qualified education expenses. Upon presentment, the State
25 Board of Education shall honor the scholarship and, as issuer
26 of the instrument, pay the participating tutoring agency or
27 school in accordance with procedures established by the State
28 Board of Education. The procedures shall require all of the
29 following:
30         (1) that the applying custodian be notified of the
31     scholarship award by August 1 of the school year in which
32     the scholarship is to be used;
33         (2) that the scholarship instrument be issued to the

 

 

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1     custodian no later than September 15 of the school year in
2     which the scholarship is to be used;
3         (3) that the custodian present the scholarship
4     instrument to the participating tutoring agency or school
5     no later than October 1 of the school year in which the
6     scholarship is to be used;
7         (4) that the participating tutoring agency or school
8     present the scholarship instrument, with proof of service
9     to the custodian of the qualifying pupil, to the State
10     Board of Education no later than October 31 of the school
11     year in which the scholarship is to be used;
12         (5) that the State Board of Education shall honor the
13     scholarship instrument and as issuer pay the participating
14     tutoring agency or school no later than December 31 of the
15     school year in which the scholarship is to be used; and
16         (6) that participating tutoring agencies or schools
17     must not be required to accept scholarships as full payment
18     for services but neither shall they charge scholarship
19     pupils tuition or any other educational expenses at a
20     higher rate than other pupils.
 
21     Section 35. Amount of scholarship. A Tutoring Opportunity
22 Scholarship for qualified education expenses incurred through
23 participating tutoring agencies during any school year after
24 the base year shall be for the lesser of (i) $500 or (ii) the
25 actual qualified education expenses related to the qualifying
26 pupil's tutoring. A School Opportunity Scholarship for
27 qualified education expenses incurred through participating
28 schools during any school year after the base year shall be for
29 the lesser of (i) $3,500 or (ii) the actual qualified education
30 expenses related to the qualifying pupil's enrollment.
 
31     Section 40. Renewal of scholarship. Tutoring and School
32 Opportunity Scholarships shall be renewable every year through
33 grade 12 so long as the qualifying pupil and custodian continue
34 to remain eligible pursuant to Section 10 of this Act.
 

 

 

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1     Section 45. Assessment. All pupils receiving services
2 obtained through Opportunity Scholarships shall be assessed
3 annually in the same manner as Illinois' public school
4 students. Participating schools shall be responsible for
5 administering the assessments and reporting the results to the
6 State Board of Education.
 
7     Section 50. Funding. In no year may the total amount of
8 scholarships paid under the provisions of this Act exceed
9 $15,000,000. If the amount needed to fund scholarships for all
10 qualifying pupils exceeds $15,000,000 in any year, the State
11 Board of Education shall determine an equitable way to allocate
12 the $15,000,000 among the qualifying pupils consistent with the
13 stated purpose and policy of this Act.
 
14     Section 55. Not base income. The amount of any scholarship
15 redeemed under this Act shall not be considered base income
16 under subsection (a) of Section 203 of the Illinois Income Tax
17 Act and shall not be taxable for Illinois income tax purposes.
 
18     Section 60. Report and expansion. On or before December 31,
19 2010, the State Board of Education shall submit a report to the
20 General Assembly reviewing the current status of the program
21 operating under this Act. This report shall include, but not be
22 limited to, the numbers of qualifying pupils receiving each
23 Opportunity Scholarship, the names of the schools from which
24 and to which pupils transferred, the financial ramifications of
25 the program, and the results of pupil assessments. If the State
26 Board of Education finds the program both financially and
27 academically beneficial, it shall recommend expansion of the
28 program to the General Assembly no later than December 31,
29 2011. If the General Assembly concurs by law, then any school
30 district outside the City of Chicago may elect to participate
31 in the program subject to the parameters, other than geographic
32 requirements, defined in this Act.
 

 

 

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1     Section 65. Penalties. It shall be a Class 3 felony to use
2 or attempt to use a scholarship under this Act for any purpose
3 other than those permitted by this Act. It shall also be a
4 Class 3 felony for any person, with intent to defraud, to
5 knowingly forge, alter, or misrepresent information on a
6 scholarship application or on any documents submitted in
7 application for a scholarship, to deliver any such document
8 knowing it to have been thus forged, altered, or based on
9 misrepresentation, or to possess, with intent to issue or
10 deliver, any such document knowing it to have been thus forged,
11 altered, or based on misrepresentation.
 
12     Section 70. Rules. The State Board of Education shall adopt
13 rules to implement this Act. The creation of the Opportunity
14 Scholarship Program does not expand the regulatory authority of
15 the State, its officers, or any school district to impose any
16 additional regulation of nonpublic schools beyond those
17 reasonably necessary to enforce the requirements of the
18 program.
 
19     Section 900. The Illinois Income Tax Act is amended by
20 changing Section 203 as follows:
 
21     (35 ILCS 5/203)  (from Ch. 120, par. 2-203)
22     Sec. 203. Base income defined.
23     (a) Individuals.
24         (1) In general. In the case of an individual, base
25     income means an amount equal to the taxpayer's adjusted
26     gross income for the taxable year as modified by paragraph
27     (2).
28         (2) Modifications. The adjusted gross income referred
29     to in paragraph (1) shall be modified by adding thereto the
30     sum of the following amounts:
31             (A) An amount equal to all amounts paid or accrued
32         to the taxpayer as interest or dividends during the

 

 

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1         taxable year to the extent excluded from gross income
2         in the computation of adjusted gross income, except
3         stock dividends of qualified public utilities
4         described in Section 305(e) of the Internal Revenue
5         Code;
6             (B) An amount equal to the amount of tax imposed by
7         this Act to the extent deducted from gross income in
8         the computation of adjusted gross income for the
9         taxable year;
10             (C) An amount equal to the amount received during
11         the taxable year as a recovery or refund of real
12         property taxes paid with respect to the taxpayer's
13         principal residence under the Revenue Act of 1939 and
14         for which a deduction was previously taken under
15         subparagraph (L) of this paragraph (2) prior to July 1,
16         1991, the retrospective application date of Article 4
17         of Public Act 87-17. In the case of multi-unit or
18         multi-use structures and farm dwellings, the taxes on
19         the taxpayer's principal residence shall be that
20         portion of the total taxes for the entire property
21         which is attributable to such principal residence;
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 adjusted gross income;
26             (D-5) An amount, to the extent not included in
27         adjusted gross income, equal to the amount of money
28         withdrawn by the taxpayer in the taxable year from a
29         medical care savings account and the interest earned on
30         the account in the taxable year of a withdrawal
31         pursuant to subsection (b) of Section 20 of the Medical
32         Care Savings Account Act or subsection (b) of Section
33         20 of the Medical Care Savings Account Act of 2000;
34             (D-10) For taxable years ending after December 31,
35         1997, an amount equal to any eligible remediation costs
36         that the individual deducted in computing adjusted

 

 

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1         gross income and for which the individual claims a
2         credit under subsection (l) of Section 201;
3             (D-15) For taxable years 2001 and thereafter, an
4         amount equal to the bonus depreciation deduction (30%
5         of the adjusted basis of the qualified property) taken
6         on the taxpayer's federal income tax return for the
7         taxable year under subsection (k) of Section 168 of the
8         Internal Revenue Code;
9             (D-16) If the taxpayer reports a capital gain or
10         loss on the taxpayer's federal income tax return for
11         the taxable year based on a sale or transfer of
12         property for which the taxpayer was required in any
13         taxable year to make an addition modification under
14         subparagraph (D-15), then an amount equal to the
15         aggregate amount of the deductions taken in all taxable
16         years under subparagraph (Z) with respect to that
17         property.
18             The taxpayer is required to make the addition
19         modification under this subparagraph only once with
20         respect to any one piece of property;
21             (D-17) For taxable years ending on or after
22         December 31, 2004, an amount equal to the amount
23         otherwise allowed as a deduction in computing base
24         income for interest paid, accrued, or incurred,
25         directly or indirectly, to a foreign person who would
26         be a member of the same unitary business group but for
27         the fact that foreign person's business activity
28         outside the United States is 80% or more of the foreign
29         person's total business activity. The addition
30         modification required by this subparagraph shall be
31         reduced to the extent that dividends were included in
32         base income of the unitary group for the same taxable
33         year and received by the taxpayer or by a member of the
34         taxpayer's unitary business group (including amounts
35         included in gross income under Sections 951 through 964
36         of the Internal Revenue Code and amounts included in

 

 

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

 

 

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1             unreasonable; or if the taxpayer and the Director
2             agree in writing to the application or use of an
3             alternative method of apportionment under Section
4             304(f).
5                 Nothing in this subsection shall preclude the
6             Director from making any other adjustment
7             otherwise allowed under Section 404 of this Act for
8             any tax year beginning after the effective date of
9             this amendment provided such adjustment is made
10             pursuant to regulation adopted by the Department
11             and such regulations provide methods and standards
12             by which the Department will utilize its authority
13             under Section 404 of this Act;
14             (D-18) For taxable years ending on or after
15         December 31, 2004, an amount equal to the amount of
16         intangible expenses and costs otherwise allowed as a
17         deduction in computing base income, and that were paid,
18         accrued, or incurred, directly or indirectly, to a
19         foreign person who would be a member of the same
20         unitary business group but for the fact that the
21         foreign person's business activity outside the United
22         States is 80% or more of that person's total business
23         activity. The addition modification required by this
24         subparagraph shall be reduced to the extent that
25         dividends were included in base income of the unitary
26         group for the same taxable year and received by the
27         taxpayer or by a member of the taxpayer's unitary
28         business group (including amounts included in gross
29         income under Sections 951 through 964 of the Internal
30         Revenue Code and amounts included in gross income under
31         Section 78 of the Internal Revenue Code) with respect
32         to the stock of the same person to whom the intangible
33         expenses and costs were directly or indirectly paid,
34         incurred, or accrued. The preceding sentence does not
35         apply to the extent that the same dividends caused a
36         reduction to the addition modification required under

 

 

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

 

 

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1                 income tax, and is paid pursuant to a contract
2                 or agreement that reflects arm's-length terms;
3                 or
4                 (iii) any item of intangible expense or cost
5             paid, accrued, or incurred, directly or
6             indirectly, from a transaction with a foreign
7             person if the taxpayer establishes by clear and
8             convincing evidence, that the adjustments are
9             unreasonable; or if the taxpayer and the Director
10             agree in writing to the application or use of an
11             alternative method of apportionment under Section
12             304(f);
13                 Nothing in this subsection shall preclude the
14             Director from making any other adjustment
15             otherwise allowed under Section 404 of this Act for
16             any tax year beginning after the effective date of
17             this amendment provided such adjustment is made
18             pursuant to regulation adopted by the Department
19             and such regulations provide methods and standards
20             by which the Department will utilize its authority
21             under Section 404 of this Act;
22             (D-20) For taxable years beginning on or after
23         January 1, 2002, in the case of a distribution from a
24         qualified tuition program under Section 529 of the
25         Internal Revenue Code, other than (i) a distribution
26         from a College Savings Pool created under Section 16.5
27         of the State Treasurer Act or (ii) a distribution from
28         the Illinois Prepaid Tuition Trust Fund, an amount
29         equal to the amount excluded from gross income under
30         Section 529(c)(3)(B);
31     and by deducting from the total so obtained the sum of the
32     following amounts:
33             (E) For taxable years ending before December 31,
34         2001, any amount included in such total in respect of
35         any compensation (including but not limited to any
36         compensation paid or accrued to a serviceman while a

 

 

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1         prisoner of war or missing in action) paid to a
2         resident by reason of being on active duty in the Armed
3         Forces of the United States and in respect of any
4         compensation paid or accrued to a resident who as a
5         governmental employee was a prisoner of war or missing
6         in action, and in respect of any compensation paid to a
7         resident in 1971 or thereafter for annual training
8         performed pursuant to Sections 502 and 503, Title 32,
9         United States Code as a member of the Illinois National
10         Guard. For taxable years ending on or after December
11         31, 2001, any amount included in such total in respect
12         of any compensation (including but not limited to any
13         compensation paid or accrued to a serviceman while a
14         prisoner of war or missing in action) paid to a
15         resident by reason of being a member of any component
16         of the Armed Forces of the United States and in respect
17         of any compensation paid or accrued to a resident who
18         as a governmental employee was a prisoner of war or
19         missing in action, and in respect of any compensation
20         paid to a resident in 2001 or thereafter by reason of
21         being a member of the Illinois National Guard. The
22         provisions of this amendatory Act of the 92nd General
23         Assembly are exempt from the provisions of Section 250;
24             (F) An amount equal to all amounts included in such
25         total pursuant to the provisions of Sections 402(a),
26         402(c), 403(a), 403(b), 406(a), 407(a), and 408 of the
27         Internal Revenue Code, or included in such total as
28         distributions under the provisions of any retirement
29         or disability plan for employees of any governmental
30         agency or unit, or retirement payments to retired
31         partners, which payments are excluded in computing net
32         earnings from self employment by Section 1402 of the
33         Internal Revenue Code and regulations adopted pursuant
34         thereto;
35             (G) The valuation limitation amount;
36             (H) An amount equal to the amount of any tax

 

 

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

 

 

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1         Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of
2         the Internal Revenue Code; the provisions of this
3         subparagraph are exempt from the provisions of Section
4         250;
5             (N) An amount equal to all amounts included in such
6         total which are exempt from taxation by this State
7         either by reason of its statutes or Constitution or by
8         reason of the Constitution, treaties or statutes of the
9         United States; provided that, in the case of any
10         statute of this State that exempts income derived from
11         bonds or other obligations from the tax imposed under
12         this Act, the amount exempted shall be the interest net
13         of bond premium amortization;
14             (O) An amount equal to any contribution made to a
15         job training project established pursuant to the Tax
16         Increment Allocation Redevelopment Act;
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 of 1986;
22             (Q) An amount equal to any amounts included in such
23         total, received by the taxpayer as an acceleration in
24         the payment of life, endowment or annuity benefits in
25         advance of the time they would otherwise be payable as
26         an indemnity for a terminal illness;
27             (R) An amount equal to the amount of any federal or
28         State bonus paid to veterans of the Persian Gulf War;
29             (S) An amount, to the extent included in adjusted
30         gross income, equal to the amount of a contribution
31         made in the taxable year on behalf of the taxpayer to a
32         medical care savings account established under the
33         Medical Care Savings Account Act or the Medical Care
34         Savings Account Act of 2000 to the extent the
35         contribution is accepted by the account administrator
36         as provided in that Act;

 

 

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

 

 

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

 

 

HB1577 - 20 - LRB094 09191 LJB 39424 b

1         victim. The amount of and the eligibility for any
2         public assistance, benefit, or similar entitlement is
3         not affected by the inclusion of items (i) and (ii) of
4         this paragraph in gross income for federal income tax
5         purposes. This paragraph is exempt from the provisions
6         of Section 250;
7             (Y) For taxable years beginning on or after January
8         1, 2002 and ending on or before December 31, 2004,
9         moneys contributed in the taxable year to a College
10         Savings Pool account under Section 16.5 of the State
11         Treasurer Act, except that amounts excluded from gross
12         income under Section 529(c)(3)(C)(i) of the Internal
13         Revenue Code shall not be considered moneys
14         contributed under this subparagraph (Y). For taxable
15         years beginning on or after January 1, 2005, a maximum
16         of $10,000 contributed in the taxable year to (i) a
17         College Savings Pool account under Section 16.5 of the
18         State Treasurer Act or (ii) the Illinois Prepaid
19         Tuition Trust Fund, except that amounts excluded from
20         gross income under Section 529(c)(3)(C)(i) of the
21         Internal Revenue Code shall not be considered moneys
22         contributed under this subparagraph (Y). This
23         subparagraph (Y) is exempt from the provisions of
24         Section 250;
25             (Z) For taxable years 2001 and thereafter, for the
26         taxable year in which the bonus depreciation deduction
27         (30% of the adjusted basis of the qualified property)
28         is taken on the taxpayer's federal income tax return
29         under subsection (k) of Section 168 of the Internal
30         Revenue Code and for each applicable taxable year
31         thereafter, an amount equal to "x", where:
32                 (1) "y" equals the amount of the depreciation
33             deduction taken for the taxable year on the
34             taxpayer's federal income tax return on property
35             for which the bonus depreciation deduction (30% of
36             the adjusted basis of the qualified property) was

 

 

HB1577 - 21 - LRB094 09191 LJB 39424 b

1             taken in any year under subsection (k) of Section
2             168 of the Internal Revenue Code, but not including
3             the bonus depreciation deduction; and
4                 (2) "x" equals "y" multiplied by 30 and then
5             divided by 70 (or "y" multiplied by 0.429).
6             The aggregate amount deducted under this
7         subparagraph in all taxable years for any one piece of
8         property may not exceed the amount of the bonus
9         depreciation deduction (30% of the adjusted basis of
10         the qualified property) taken on that property on the
11         taxpayer's federal income tax return under subsection
12         (k) of Section 168 of the Internal Revenue Code;
13             (AA) If the taxpayer reports a capital gain or loss
14         on the taxpayer's federal income tax return for the
15         taxable year based on a sale or transfer of property
16         for which the taxpayer was required in any taxable year
17         to make an addition modification under subparagraph
18         (D-15), then an amount equal to that addition
19         modification.
20             The taxpayer is allowed to take the deduction under
21         this subparagraph only once with respect to any one
22         piece of property;
23             (BB) Any amount included in adjusted gross income,
24         other than salary, received by a driver in a
25         ridesharing arrangement using a motor vehicle;
26             (CC) The amount of (i) any interest income (net of
27         the deductions allocable thereto) taken into account
28         for the taxable year with respect to a transaction with
29         a taxpayer that is required to make an addition
30         modification with respect to such transaction under
31         Section 203(a)(2)(D-17), 203(b)(2)(E-13),
32         203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
33         the amount of that addition modification, and (ii) any
34         income from intangible property (net of the deductions
35         allocable thereto) taken into account for the taxable
36         year with respect to a transaction with a taxpayer that

 

 

HB1577 - 22 - LRB094 09191 LJB 39424 b

1         is required to make an addition modification with
2         respect to such transaction under Section
3         203(a)(2)(D-18), 203(b)(2)(E-14), 203(c)(2)(G-13), or
4         203(d)(2)(D-8), but not to exceed the amount of that
5         addition modification;
6             (DD) An amount equal to the interest income taken
7         into account for the taxable year (net of the
8         deductions allocable thereto) with respect to
9         transactions with a foreign person who would be a
10         member of the taxpayer's unitary business group but for
11         the fact that the foreign person's business activity
12         outside the United States is 80% or more of that
13         person's total business activity, but not to exceed the
14         addition modification required to be made for the same
15         taxable year under Section 203(a)(2)(D-17) for
16         interest paid, accrued, or incurred, directly or
17         indirectly, to the same foreign person; and
18             (EE) An amount equal to the income from intangible
19         property taken into account for the taxable year (net
20         of the deductions allocable thereto) with respect to
21         transactions with a foreign person who would be a
22         member of the taxpayer's unitary business group but for
23         the fact that the foreign person's business activity
24         outside the United States is 80% or more of that
25         person's total business activity, but not to exceed the
26         addition modification required to be made for the same
27         taxable year under Section 203(a)(2)(D-18) for
28         intangible expenses and costs paid, accrued, or
29         incurred, directly or indirectly, to the same foreign
30         person.
31             (FF) For taxable years ending on or after December
32         31, 2005, an amount, to the extent that it is included
33         in adjusted gross income, equal to any scholarship
34         redeemed under the Opportunity Scholarship Act. This
35         subparagraph is exempt from the provisions of Section
36         250.
 

 

 

HB1577 - 23 - LRB094 09191 LJB 39424 b

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

 

 

HB1577 - 24 - LRB094 09191 LJB 39424 b

1         those provided by this subparagraph (E) exceeded
2         subtraction modifications in such earlier taxable
3         year, with the following limitations applied in the
4         order that they are listed:
5                 (i) the addition modification relating to the
6             net operating loss carried back or forward to the
7             taxable year from any taxable year ending prior to
8             December 31, 1986 shall be reduced by the amount of
9             addition modification under this subparagraph (E)
10             which related to that net operating loss and which
11             was taken into account in calculating the base
12             income of an earlier taxable year, and
13                 (ii) the addition modification relating to the
14             net operating loss carried back or forward to the
15             taxable year from any taxable year ending prior to
16             December 31, 1986 shall not exceed the amount of
17             such carryback or carryforward;
18             For taxable years in which there is a net operating
19         loss carryback or carryforward from more than one other
20         taxable year ending prior to December 31, 1986, the
21         addition modification provided in this subparagraph
22         (E) shall be the sum of the amounts computed
23         independently under the preceding provisions of this
24         subparagraph (E) for each such taxable year;
25             (E-5) For taxable years ending after December 31,
26         1997, an amount equal to any eligible remediation costs
27         that the corporation deducted in computing adjusted
28         gross income and for which the corporation claims a
29         credit under subsection (l) of Section 201;
30             (E-10) For taxable years 2001 and thereafter, an
31         amount equal to the bonus depreciation deduction (30%
32         of the adjusted basis of the qualified property) taken
33         on the taxpayer's federal income tax return for the
34         taxable year under subsection (k) of Section 168 of the
35         Internal Revenue Code; and
36             (E-11) If the taxpayer reports a capital gain or

 

 

HB1577 - 25 - LRB094 09191 LJB 39424 b

1         loss on the taxpayer's federal income tax return for
2         the taxable year based on a sale or transfer of
3         property for which the taxpayer was required in any
4         taxable year to make an addition modification under
5         subparagraph (E-10), then an amount equal to the
6         aggregate amount of the deductions taken in all taxable
7         years under subparagraph (T) with respect to that
8         property.
9             The taxpayer is required to make the addition
10         modification under this subparagraph only once with
11         respect to any one piece of property;
12             (E-12) For taxable years ending on or after
13         December 31, 2004, an amount equal to the amount
14         otherwise allowed as a deduction in computing base
15         income for interest paid, accrued, or incurred,
16         directly or indirectly, to a foreign person who would
17         be a member of the same unitary business group but for
18         the fact the foreign person's business activity
19         outside the United States is 80% or more of the foreign
20         person's total business activity. The addition
21         modification required by this subparagraph shall be
22         reduced to the extent that dividends were included in
23         base income of the unitary group for the same taxable
24         year and received by the taxpayer or by a member of the
25         taxpayer's unitary business group (including amounts
26         included in gross income pursuant to Sections 951
27         through 964 of the Internal Revenue Code and amounts
28         included in gross income under Section 78 of the
29         Internal Revenue Code) with respect to the stock of the
30         same person to whom the interest was paid, accrued, or
31         incurred.
32             This paragraph shall not apply to the following:
33                 (i) an item of interest paid, accrued, or
34             incurred, directly or indirectly, to a foreign
35             person who is subject in a foreign country or
36             state, other than a state which requires mandatory

 

 

HB1577 - 26 - LRB094 09191 LJB 39424 b

1             unitary reporting, to a tax on or measured by net
2             income with respect to such interest; or
3                 (ii) an item of interest paid, accrued, or
4             incurred, directly or indirectly, to a foreign
5             person if the taxpayer can establish, based on a
6             preponderance of the evidence, both of the
7             following:
8                     (a) the foreign person, during the same
9                 taxable year, paid, accrued, or incurred, the
10                 interest to a person that is not a related
11                 member, and
12                     (b) the transaction giving rise to the
13                 interest expense between the taxpayer and the
14                 foreign person did not have as a principal
15                 purpose the avoidance of Illinois income tax,
16                 and is paid pursuant to a contract or agreement
17                 that reflects an arm's-length interest rate
18                 and terms; or
19                 (iii) the taxpayer can establish, based on
20             clear and convincing evidence, that the interest
21             paid, accrued, or incurred relates to a contract or
22             agreement entered into at arm's-length rates and
23             terms and the principal purpose for the payment is
24             not federal or Illinois tax avoidance; or
25                 (iv) an item of interest paid, accrued, or
26             incurred, directly or indirectly, to a foreign
27             person if the taxpayer establishes by clear and
28             convincing evidence that the adjustments are
29             unreasonable; or if the taxpayer and the Director
30             agree in writing to the application or use of an
31             alternative method of apportionment under Section
32             304(f).
33                 Nothing in this subsection shall preclude the
34             Director from making any other adjustment
35             otherwise allowed under Section 404 of this Act for
36             any tax year beginning after the effective date of

 

 

HB1577 - 27 - LRB094 09191 LJB 39424 b

1             this amendment provided such adjustment is made
2             pursuant to regulation adopted by the Department
3             and such regulations provide methods and standards
4             by which the Department will utilize its authority
5             under Section 404 of this Act;
6             (E-13) For taxable years ending on or after
7         December 31, 2004, an amount equal to the amount of
8         intangible expenses and costs otherwise allowed as a
9         deduction in computing base income, and that were paid,
10         accrued, or incurred, directly or indirectly, to a
11         foreign person who would be a member of the same
12         unitary business group but for the fact that the
13         foreign person's business activity outside the United
14         States is 80% or more of that person's total business
15         activity. The addition modification required by this
16         subparagraph shall be reduced to the extent that
17         dividends were included in base income of the unitary
18         group for the same taxable year and received by the
19         taxpayer or by a member of the taxpayer's unitary
20         business group (including amounts included in gross
21         income pursuant to Sections 951 through 964 of the
22         Internal Revenue Code and amounts included in gross
23         income under Section 78 of the Internal Revenue Code)
24         with respect to the stock of the same person to whom
25         the intangible expenses and costs were directly or
26         indirectly paid, incurred, or accrued. The preceding
27         sentence shall not apply to the extent that the same
28         dividends caused a reduction to the addition
29         modification required under Section 203(b)(2)(E-12) of
30         this Act. As used in this subparagraph, the term
31         "intangible expenses and costs" includes (1) expenses,
32         losses, and costs for, or related to, the direct or
33         indirect acquisition, use, maintenance or management,
34         ownership, sale, exchange, or any other disposition of
35         intangible property; (2) losses incurred, directly or
36         indirectly, from factoring transactions or discounting

 

 

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

 

 

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1             unreasonable; or if the taxpayer and the Director
2             agree in writing to the application or use of an
3             alternative method of apportionment under Section
4             304(f);
5                 Nothing in this subsection shall preclude the
6             Director from making any other adjustment
7             otherwise allowed under Section 404 of this Act for
8             any tax year beginning after the effective date of
9             this amendment provided such adjustment is made
10             pursuant to regulation adopted by the Department
11             and such regulations provide methods and standards
12             by which the Department will utilize its authority
13             under Section 404 of this Act;
14     and by deducting from the total so obtained the sum of the
15     following amounts:
16             (F) An amount equal to the amount of any tax
17         imposed by this Act which was refunded to the taxpayer
18         and included in such total for the taxable year;
19             (G) An amount equal to any amount included in such
20         total under Section 78 of the Internal Revenue Code;
21             (H) In the case of a regulated investment company,
22         an amount equal to the amount of exempt interest
23         dividends as defined in subsection (b) (5) of Section
24         852 of the Internal Revenue Code, paid to shareholders
25         for the taxable year;
26             (I) With the exception of any amounts subtracted
27         under subparagraph (J), an amount equal to the sum of
28         all amounts disallowed as deductions by (i) Sections
29         171(a) (2), and 265(a)(2) and amounts disallowed as
30         interest expense by Section 291(a)(3) of the Internal
31         Revenue Code, as now or hereafter amended, and all
32         amounts of expenses allocable to interest and
33         disallowed as deductions by Section 265(a)(1) of the
34         Internal Revenue Code, as now or hereafter amended; and
35         (ii) for taxable years ending on or after August 13,
36         1999, Sections 171(a)(2), 265, 280C, 291(a)(3), and

 

 

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1         832(b)(5)(B)(i) of the Internal Revenue Code; the
2         provisions of this subparagraph are exempt from the
3         provisions of Section 250;
4             (J) An amount equal to all amounts included in such
5         total which are exempt from taxation by this State
6         either by reason of its statutes or Constitution or by
7         reason of the Constitution, treaties or statutes of the
8         United States; provided that, in the case of any
9         statute of this State that exempts income derived from
10         bonds or other obligations from the tax imposed under
11         this Act, the amount exempted shall be the interest net
12         of bond premium amortization;
13             (K) An amount equal to those dividends included in
14         such total which were paid by a corporation which
15         conducts business operations in an Enterprise Zone or
16         zones created under the Illinois Enterprise Zone Act
17         and conducts substantially all of its operations in an
18         Enterprise Zone or zones;
19             (L) An amount equal to those dividends included in
20         such total that were paid by a corporation that
21         conducts business operations in a federally designated
22         Foreign Trade Zone or Sub-Zone and that is designated a
23         High Impact Business located in Illinois; provided
24         that dividends eligible for the deduction provided in
25         subparagraph (K) of paragraph 2 of this subsection
26         shall not be eligible for the deduction provided under
27         this subparagraph (L);
28             (M) For any taxpayer that is a financial
29         organization within the meaning of Section 304(c) of
30         this Act, an amount included in such total as interest
31         income from a loan or loans made by such taxpayer to a
32         borrower, to the extent that such a loan is secured by
33         property which is eligible for the Enterprise Zone
34         Investment Credit. To determine the portion of a loan
35         or loans that is secured by property eligible for a
36         Section 201(f) investment credit to the borrower, the

 

 

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1         entire principal amount of the loan or loans between
2         the taxpayer and the borrower should be divided into
3         the basis of the Section 201(f) investment credit
4         property which secures the loan or loans, using for
5         this purpose the original basis of such property on the
6         date that it was placed in service in the Enterprise
7         Zone. The subtraction modification available to
8         taxpayer in any year under this subsection shall be
9         that portion of the total interest paid by the borrower
10         with respect to such loan attributable to the eligible
11         property as calculated under the previous sentence;
12             (M-1) For any taxpayer that is a financial
13         organization within the meaning of Section 304(c) of
14         this Act, an amount included in such total as interest
15         income from a loan or loans made by such taxpayer to a
16         borrower, to the extent that such a loan is secured by
17         property which is eligible for the High Impact Business
18         Investment Credit. To determine the portion of a loan
19         or loans that is secured by property eligible for a
20         Section 201(h) investment credit to the borrower, the
21         entire principal amount of the loan or loans between
22         the taxpayer and the borrower should be divided into
23         the basis of the Section 201(h) investment credit
24         property which secures the loan or loans, using for
25         this purpose the original basis of such property on the
26         date that it was placed in service in a federally
27         designated Foreign Trade Zone or Sub-Zone located in
28         Illinois. No taxpayer that is eligible for the
29         deduction provided in subparagraph (M) of paragraph
30         (2) of this subsection shall be eligible for the
31         deduction provided under this subparagraph (M-1). The
32         subtraction modification available to taxpayers in any
33         year under this subsection shall be that portion of the
34         total interest paid by the borrower with respect to
35         such loan attributable to the eligible property as
36         calculated under the previous sentence;

 

 

HB1577 - 32 - LRB094 09191 LJB 39424 b

1             (N) Two times any contribution made during the
2         taxable year to a designated zone organization to the
3         extent that the contribution (i) qualifies as a
4         charitable contribution under subsection (c) of
5         Section 170 of the Internal Revenue Code and (ii) must,
6         by its terms, be used for a project approved by the
7         Department of Commerce and Economic Opportunity under
8         Section 11 of the Illinois Enterprise Zone Act;
9             (O) An amount equal to: (i) 85% for taxable years
10         ending on or before December 31, 1992, or, a percentage
11         equal to the percentage allowable under Section
12         243(a)(1) of the Internal Revenue Code of 1986 for
13         taxable years ending after December 31, 1992, of the
14         amount by which dividends included in taxable income
15         and received from a corporation that is not created or
16         organized under the laws of the United States or any
17         state or political subdivision thereof, including, for
18         taxable years ending on or after December 31, 1988,
19         dividends received or deemed received or paid or deemed
20         paid under Sections 951 through 964 of the Internal
21         Revenue Code, exceed the amount of the modification
22         provided under subparagraph (G) of paragraph (2) of
23         this subsection (b) which is related to such dividends;
24         plus (ii) 100% of the amount by which dividends,
25         included in taxable income and received, including,
26         for taxable years ending on or after December 31, 1988,
27         dividends received or deemed received or paid or deemed
28         paid under Sections 951 through 964 of the Internal
29         Revenue Code, from any such corporation specified in
30         clause (i) that would but for the provisions of Section
31         1504 (b) (3) of the Internal Revenue Code be treated as
32         a member of the affiliated group which includes the
33         dividend recipient, exceed the amount of the
34         modification provided under subparagraph (G) of
35         paragraph (2) of this subsection (b) which is related
36         to such dividends;

 

 

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1             (P) An amount equal to any contribution made to a
2         job training project established pursuant to the Tax
3         Increment Allocation Redevelopment Act;
4             (Q) An amount equal to the amount of the deduction
5         used to compute the federal income tax credit for
6         restoration of substantial amounts held under claim of
7         right for the taxable year pursuant to Section 1341 of
8         the Internal Revenue Code of 1986;
9             (R) In the case of an attorney-in-fact with respect
10         to whom an interinsurer or a reciprocal insurer has
11         made the election under Section 835 of the Internal
12         Revenue Code, 26 U.S.C. 835, an amount equal to the
13         excess, if any, of the amounts paid or incurred by that
14         interinsurer or reciprocal insurer in the taxable year
15         to the attorney-in-fact over the deduction allowed to
16         that interinsurer or reciprocal insurer with respect
17         to the attorney-in-fact under Section 835(b) of the
18         Internal Revenue Code for the taxable year;
19             (S) For taxable years ending on or after December
20         31, 1997, in the case of a Subchapter S corporation, an
21         amount equal to all amounts of income allocable to a
22         shareholder subject to the Personal Property Tax
23         Replacement Income Tax imposed by subsections (c) and
24         (d) of Section 201 of this Act, including amounts
25         allocable to organizations exempt from federal income
26         tax by reason of Section 501(a) of the Internal Revenue
27         Code. This subparagraph (S) is exempt from the
28         provisions of Section 250;
29             (T) 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

 

 

HB1577 - 34 - LRB094 09191 LJB 39424 b

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;
17             (U) 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         (E-10), 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             (V) The amount of: (i) any interest income (net of
28         the deductions allocable thereto) taken into account
29         for the taxable year with respect to a transaction with
30         a taxpayer that is required to make an addition
31         modification with respect to such transaction under
32         Section 203(a)(2)(D-17), 203(b)(2)(E-12),
33         203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
34         the amount of such addition modification and (ii) any
35         income from intangible property (net of the deductions
36         allocable thereto) taken into account for the taxable

 

 

HB1577 - 35 - LRB094 09191 LJB 39424 b

1         year with respect to a transaction with a taxpayer that
2         is required to make an addition modification with
3         respect to such transaction under Section
4         203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
5         203(d)(2)(D-8), but not to exceed the amount of such
6         addition modification;
7             (W) An amount equal to the interest income taken
8         into account for the taxable year (net of the
9         deductions allocable thereto) with respect to
10         transactions with a foreign person who would be a
11         member of the taxpayer's unitary business group but for
12         the fact that the foreign person's business activity
13         outside the United States is 80% or more of that
14         person's total business activity, but not to exceed the
15         addition modification required to be made for the same
16         taxable year under Section 203(b)(2)(E-12) for
17         interest paid, accrued, or incurred, directly or
18         indirectly, to the same foreign person; and
19             (X) An amount equal to the income from intangible
20         property taken into account for the taxable year (net
21         of the deductions allocable thereto) with respect to
22         transactions with a foreign person who would be a
23         member of the taxpayer's unitary business group but for
24         the fact that the foreign person's business activity
25         outside the United States is 80% or more of that
26         person's total business activity, but not to exceed the
27         addition modification required to be made for the same
28         taxable year under Section 203(b)(2)(E-13) for
29         intangible expenses and costs paid, accrued, or
30         incurred, directly or indirectly, to the same foreign
31         person.
32         (3) Special rule. For purposes of paragraph (2) (A),
33     "gross income" in the case of a life insurance company, for
34     tax years ending on and after December 31, 1994, shall mean
35     the gross investment income for the taxable year.
 

 

 

HB1577 - 36 - LRB094 09191 LJB 39424 b

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 year;
22             (D) The amount of any net operating loss deduction
23         taken in arriving at taxable income, other than a net
24         operating loss carried forward from a taxable year
25         ending prior to December 31, 1986;
26             (E) For taxable years in which a net operating loss
27         carryback or carryforward from a taxable year ending
28         prior to December 31, 1986 is an element of taxable
29         income under paragraph (1) of subsection (e) or
30         subparagraph (E) of paragraph (2) of subsection (e),
31         the amount by which addition modifications other than
32         those provided by this subparagraph (E) exceeded
33         subtraction modifications in such taxable year, with
34         the following limitations applied in the order that
35         they are listed:
36                 (i) the addition modification relating to the

 

 

HB1577 - 37 - LRB094 09191 LJB 39424 b

1             net operating loss carried back or forward to the
2             taxable year from any taxable year ending prior to
3             December 31, 1986 shall be reduced by the amount of
4             addition modification under this subparagraph (E)
5             which related to that net operating loss and which
6             was taken into account in calculating the base
7             income of an earlier taxable year, and
8                 (ii) the addition modification relating to the
9             net operating loss carried back or forward to the
10             taxable year from any taxable year ending prior to
11             December 31, 1986 shall not exceed the amount of
12             such carryback or carryforward;
13             For taxable years in which there is a net operating
14         loss carryback or carryforward from more than one other
15         taxable year ending prior to December 31, 1986, the
16         addition modification provided in this subparagraph
17         (E) shall be the sum of the amounts computed
18         independently under the preceding provisions of this
19         subparagraph (E) for each such taxable year;
20             (F) For taxable years ending on or after January 1,
21         1989, an amount equal to the tax deducted pursuant to
22         Section 164 of the Internal Revenue Code if the trust
23         or estate is claiming the same tax for purposes of the
24         Illinois foreign tax credit under Section 601 of this
25         Act;
26             (G) An amount equal to the amount of the capital
27         gain deduction allowable under the Internal Revenue
28         Code, to the extent deducted from gross income in the
29         computation of taxable income;
30             (G-5) For taxable years ending after December 31,
31         1997, an amount equal to any eligible remediation costs
32         that the trust or estate deducted in computing adjusted
33         gross income and for which the trust or estate claims a
34         credit under subsection (l) of Section 201;
35             (G-10) For taxable years 2001 and thereafter, an
36         amount equal to the bonus depreciation deduction (30%

 

 

HB1577 - 38 - LRB094 09191 LJB 39424 b

1         of the adjusted basis of the qualified property) taken
2         on the taxpayer's federal income tax return for the
3         taxable year under subsection (k) of Section 168 of the
4         Internal Revenue Code; and
5             (G-11) If the taxpayer reports a capital gain or
6         loss on the taxpayer's federal income tax return for
7         the taxable year based on a sale or transfer of
8         property for which the taxpayer was required in any
9         taxable year to make an addition modification under
10         subparagraph (G-10), then an amount equal to the
11         aggregate amount of the deductions taken in all taxable
12         years under subparagraph (R) with respect to that
13         property.
14             The taxpayer is required to make the addition
15         modification under this subparagraph only once with
16         respect to any one piece of property;
17             (G-12) For taxable years ending on or after
18         December 31, 2004, an amount equal to the amount
19         otherwise allowed as a deduction in computing base
20         income for interest paid, accrued, or incurred,
21         directly or indirectly, to a foreign person who would
22         be a member of the same unitary business group but for
23         the fact that the foreign person's business activity
24         outside the United States is 80% or more of the foreign
25         person's total business activity. The addition
26         modification required by this subparagraph shall be
27         reduced to the extent that dividends were included in
28         base income of the unitary group for the same taxable
29         year and received by the taxpayer or by a member of the
30         taxpayer's unitary business group (including amounts
31         included in gross income pursuant to Sections 951
32         through 964 of the Internal Revenue Code and amounts
33         included in gross income under Section 78 of the
34         Internal Revenue Code) with respect to the stock of the
35         same person to whom the interest was paid, accrued, or
36         incurred.

 

 

HB1577 - 39 - LRB094 09191 LJB 39424 b

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

 

 

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1             304(f).
2                 Nothing in this subsection shall preclude the
3             Director from making any other adjustment
4             otherwise allowed under Section 404 of this Act for
5             any tax year beginning after the effective date of
6             this amendment provided such adjustment is made
7             pursuant to regulation adopted by the Department
8             and such regulations provide methods and standards
9             by which the Department will utilize its authority
10             under Section 404 of this Act;
11             (G-13) For taxable years ending on or after
12         December 31, 2004, an amount equal to the amount of
13         intangible expenses and costs otherwise allowed as a
14         deduction in computing base income, and that were paid,
15         accrued, or incurred, directly or indirectly, to a
16         foreign person who would be a member of the same
17         unitary business group but for the fact that the
18         foreign person's business activity outside the United
19         States is 80% or more of that person's total business
20         activity. The addition modification required by this
21         subparagraph shall be reduced to the extent that
22         dividends were included in base income of the unitary
23         group for the same taxable year and received by the
24         taxpayer or by a member of the taxpayer's unitary
25         business group (including amounts included in gross
26         income pursuant to Sections 951 through 964 of the
27         Internal Revenue Code and amounts included in gross
28         income under Section 78 of the Internal Revenue Code)
29         with respect to the stock of the same person to whom
30         the intangible expenses and costs were directly or
31         indirectly paid, incurred, or accrued. The preceding
32         sentence shall not apply to the extent that the same
33         dividends caused a reduction to the addition
34         modification required under Section 203(c)(2)(G-12) of
35         this Act. As used in this subparagraph, the term
36         "intangible expenses and costs" includes: (1)

 

 

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1         expenses, losses, and costs for or related to the
2         direct or indirect acquisition, use, maintenance or
3         management, ownership, sale, exchange, or any other
4         disposition of intangible property; (2) losses
5         incurred, directly or indirectly, from factoring
6         transactions or discounting transactions; (3) royalty,
7         patent, technical, and copyright fees; (4) licensing
8         fees; and (5) other similar expenses and costs. For
9         purposes of this subparagraph, "intangible property"
10         includes patents, patent applications, trade names,
11         trademarks, service marks, copyrights, mask works,
12         trade secrets, and similar types of intangible assets.
13             This paragraph shall not apply to the following:
14                 (i) any item of intangible expenses or costs
15             paid, accrued, or incurred, directly or
16             indirectly, from a transaction with a foreign
17             person who is subject in a foreign country or
18             state, other than a state which requires mandatory
19             unitary reporting, to a tax on or measured by net
20             income with respect to such item; or
21                 (ii) any item of intangible expense or cost
22             paid, accrued, or incurred, directly or
23             indirectly, if the taxpayer can establish, based
24             on a preponderance of the evidence, both of the
25             following:
26                     (a) the foreign person during the same
27                 taxable year paid, accrued, or incurred, the
28                 intangible expense or cost to a person that is
29                 not a related member, and
30                     (b) the transaction giving rise to the
31                 intangible expense or cost between the
32                 taxpayer and the foreign person did not have as
33                 a principal purpose the avoidance of Illinois
34                 income tax, and is paid pursuant to a contract
35                 or agreement that reflects arm's-length terms;
36                 or

 

 

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1                 (iii) any item of intangible expense or cost
2             paid, accrued, or incurred, directly or
3             indirectly, from a transaction with a foreign
4             person if the taxpayer establishes by clear and
5             convincing evidence, that the adjustments are
6             unreasonable; or if the taxpayer and the Director
7             agree in writing to the application or use of an
8             alternative method of apportionment under Section
9             304(f);
10                 Nothing in this subsection shall preclude the
11             Director from making any other adjustment
12             otherwise allowed under Section 404 of this Act for
13             any tax year beginning after the effective date of
14             this amendment provided such adjustment is made
15             pursuant to regulation adopted by the Department
16             and such regulations provide methods and standards
17             by which the Department will utilize its authority
18             under Section 404 of this Act;
19     and by deducting from the total so obtained the sum of the
20     following amounts:
21             (H) An amount equal to all amounts included in such
22         total pursuant to the provisions of Sections 402(a),
23         402(c), 403(a), 403(b), 406(a), 407(a) and 408 of the
24         Internal Revenue Code or included in such total as
25         distributions under the provisions of any retirement
26         or disability plan for employees of any governmental
27         agency or unit, or retirement payments to retired
28         partners, which payments are excluded in computing net
29         earnings from self employment by Section 1402 of the
30         Internal Revenue Code and regulations adopted pursuant
31         thereto;
32             (I) The valuation limitation amount;
33             (J) 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             (K) An amount equal to all amounts included in

 

 

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1         taxable income as modified by subparagraphs (A), (B),
2         (C), (D), (E), (F) and (G) which are exempt from
3         taxation by this State either by reason of its statutes
4         or Constitution or by reason of the Constitution,
5         treaties or statutes of the United States; provided
6         that, in the case of any statute of this State that
7         exempts income derived from bonds or other obligations
8         from the tax imposed under this Act, the amount
9         exempted shall be the interest net of bond premium
10         amortization;
11             (L) With the exception of any amounts subtracted
12         under subparagraph (K), an amount equal to the sum of
13         all amounts disallowed as deductions by (i) Sections
14         171(a) (2) and 265(a)(2) of the Internal Revenue Code,
15         as now or hereafter amended, and all amounts of
16         expenses allocable to interest and disallowed as
17         deductions by Section 265(1) of the Internal Revenue
18         Code of 1954, as now or hereafter amended; and (ii) for
19         taxable years ending on or after August 13, 1999,
20         Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of
21         the Internal Revenue Code; the provisions of this
22         subparagraph are exempt from the provisions of Section
23         250;
24             (M) 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             (N) An amount equal to any contribution made to a
31         job training project established pursuant to the Tax
32         Increment Allocation Redevelopment Act;
33             (O) An amount equal to those dividends included in
34         such total that were paid by a corporation that
35         conducts business operations in a federally designated
36         Foreign Trade Zone or Sub-Zone and that is designated a

 

 

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1         High Impact Business located in Illinois; provided
2         that dividends eligible for the deduction provided in
3         subparagraph (M) of paragraph (2) of this subsection
4         shall not be eligible for the deduction provided under
5         this subparagraph (O);
6             (P) An amount equal to the amount of the deduction
7         used to compute the federal income tax credit for
8         restoration of substantial amounts held under claim of
9         right for the taxable year pursuant to Section 1341 of
10         the Internal Revenue Code of 1986;
11             (Q) For taxable year 1999 and thereafter, an amount
12         equal to the amount of any (i) distributions, to the
13         extent includible in gross income for federal income
14         tax purposes, made to the taxpayer because of his or
15         her status as a victim of persecution for racial or
16         religious reasons by Nazi Germany or any other Axis
17         regime or as an heir of the victim and (ii) items of
18         income, to the extent includible in gross income for
19         federal income tax purposes, attributable to, derived
20         from or in any way related to assets stolen from,
21         hidden from, or otherwise lost to a victim of
22         persecution for racial or religious reasons by Nazi
23         Germany or any other Axis regime immediately prior to,
24         during, and immediately after World War II, including,
25         but not limited to, interest on the proceeds receivable
26         as insurance under policies issued to a victim of
27         persecution for racial or religious reasons by Nazi
28         Germany or any other Axis regime by European insurance
29         companies immediately prior to and during World War II;
30         provided, however, this subtraction from federal
31         adjusted gross income does not apply to assets acquired
32         with such assets or with the proceeds from the sale of
33         such assets; provided, further, this paragraph shall
34         only apply to a taxpayer who was the first recipient of
35         such assets after their recovery and who is a victim of
36         persecution for racial or religious reasons by Nazi

 

 

HB1577 - 45 - LRB094 09191 LJB 39424 b

1         Germany or any other Axis regime or as an heir of the
2         victim. The amount of and the eligibility for any
3         public assistance, benefit, or similar entitlement is
4         not affected by the inclusion of items (i) and (ii) of
5         this paragraph in gross income for federal income tax
6         purposes. This paragraph is exempt from the provisions
7         of Section 250;
8             (R) For taxable years 2001 and thereafter, for the
9         taxable year in which the bonus depreciation deduction
10         (30% of the adjusted basis of the qualified property)
11         is taken on the taxpayer's federal income tax return
12         under subsection (k) of Section 168 of the Internal
13         Revenue Code and for each applicable taxable year
14         thereafter, an amount equal to "x", where:
15                 (1) "y" equals the amount of the depreciation
16             deduction taken for the taxable year on the
17             taxpayer's federal income tax return on property
18             for which the bonus depreciation deduction (30% of
19             the adjusted basis of the qualified property) was
20             taken in any year under subsection (k) of Section
21             168 of the Internal Revenue Code, but not including
22             the bonus depreciation deduction; and
23                 (2) "x" equals "y" multiplied by 30 and then
24             divided by 70 (or "y" multiplied by 0.429).
25             The aggregate amount deducted under this
26         subparagraph in all taxable years for any one piece of
27         property may not exceed the amount of the bonus
28         depreciation deduction (30% of the adjusted basis of
29         the qualified property) taken on that property on the
30         taxpayer's federal income tax return under subsection
31         (k) of Section 168 of the Internal Revenue Code;
32             (S) If the taxpayer reports a capital gain or loss
33         on the taxpayer's federal income tax return for the
34         taxable year based on a sale or transfer of property
35         for which the taxpayer was required in any taxable year
36         to make an addition modification under subparagraph

 

 

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1         (G-10), then an amount equal to that addition
2         modification.
3             The taxpayer is allowed to take the deduction under
4         this subparagraph only once with respect to any one
5         piece of property;
6             (T) The amount of (i) any interest income (net of
7         the deductions allocable thereto) taken into account
8         for the taxable year with respect to a transaction with
9         a taxpayer that is required to make an addition
10         modification with respect to such transaction under
11         Section 203(a)(2)(D-17), 203(b)(2)(E-12),
12         203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
13         the amount of such addition modification and (ii) any
14         income from intangible property (net of the deductions
15         allocable thereto) taken into account for the taxable
16         year with respect to a transaction with a taxpayer that
17         is required to make an addition modification with
18         respect to such transaction under Section
19         203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
20         203(d)(2)(D-8), but not to exceed the amount of such
21         addition modification;
22             (U) An amount equal to the interest income taken
23         into account for the taxable year (net of the
24         deductions allocable thereto) with respect to
25         transactions with a foreign person who would be a
26         member of the taxpayer's unitary business group but for
27         the fact the foreign person's business activity
28         outside the United States is 80% or more of that
29         person's total business activity, but not to exceed the
30         addition modification required to be made for the same
31         taxable year under Section 203(c)(2)(G-12) for
32         interest paid, accrued, or incurred, directly or
33         indirectly, to the same foreign person; and
34             (V) An amount equal to the income from intangible
35         property taken into account for the taxable year (net
36         of the deductions allocable thereto) with respect to

 

 

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1         transactions with a foreign person who would be a
2         member of the taxpayer's unitary business group but for
3         the fact that the foreign person's business activity
4         outside the United States is 80% or more of that
5         person's total business activity, but not to exceed the
6         addition modification required to be made for the same
7         taxable year under Section 203(c)(2)(G-13) for
8         intangible expenses and costs paid, accrued, or
9         incurred, directly or indirectly, to the same foreign
10         person.
11         (3) Limitation. The amount of any modification
12     otherwise required under this subsection shall, under
13     regulations prescribed by the Department, be adjusted by
14     any amounts included therein which were properly paid,
15     credited, or required to be distributed, or permanently set
16     aside for charitable purposes pursuant to Internal Revenue
17     Code Section 642(c) during the taxable year.
 
18     (d) Partnerships.
19         (1) In general. In the case of a partnership, base
20     income means an amount equal to the taxpayer's taxable
21     income for the taxable year as modified by paragraph (2).
22         (2) Modifications. The taxable income referred to in
23     paragraph (1) shall be modified by adding thereto the sum
24     of the following amounts:
25             (A) An amount equal to all amounts paid or accrued
26         to the taxpayer as interest or dividends during the
27         taxable year to the extent excluded from gross income
28         in the computation of taxable income;
29             (B) An amount equal to the amount of tax imposed by
30         this Act to the extent deducted from gross income for
31         the taxable year;
32             (C) The amount of deductions allowed to the
33         partnership pursuant to Section 707 (c) of the Internal
34         Revenue Code in calculating its taxable income;
35             (D) An amount equal to the amount of the capital

 

 

HB1577 - 48 - LRB094 09191 LJB 39424 b

1         gain deduction allowable under the Internal Revenue
2         Code, to the extent deducted from gross income in the
3         computation of taxable income;
4             (D-5) For taxable years 2001 and thereafter, an
5         amount equal to the bonus depreciation deduction (30%
6         of the adjusted basis of the qualified property) taken
7         on the taxpayer's federal income tax return for the
8         taxable year under subsection (k) of Section 168 of the
9         Internal Revenue Code;
10             (D-6) If the taxpayer reports a capital gain or
11         loss on the taxpayer's federal income tax return for
12         the taxable year based on a sale or transfer of
13         property for which the taxpayer was required in any
14         taxable year to make an addition modification under
15         subparagraph (D-5), then an amount equal to the
16         aggregate amount of the deductions taken in all taxable
17         years under subparagraph (O) with respect to that
18         property.
19             The taxpayer is required to make the addition
20         modification under this subparagraph only once with
21         respect to any one piece of property;
22             (D-7) For taxable years ending on or after December
23         31, 2004, 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, to a foreign person who would be a member
27         of the same unitary business group but for the fact the
28         foreign person's business activity outside the United
29         States is 80% or more of the foreign person's total
30         business activity. The addition modification required
31         by this subparagraph shall be reduced to the extent
32         that dividends were included in base income of the
33         unitary group for the same taxable year and received by
34         the taxpayer or by a member of the taxpayer's unitary
35         business group (including amounts included in gross
36         income pursuant to Sections 951 through 964 of the

 

 

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

 

 

HB1577 - 50 - LRB094 09191 LJB 39424 b

1             convincing evidence that the adjustments are
2             unreasonable; or if the taxpayer and the Director
3             agree in writing to the application or use of an
4             alternative method of apportionment under Section
5             304(f).
6                 Nothing in this subsection shall preclude the
7             Director from making any other adjustment
8             otherwise allowed under Section 404 of this Act for
9             any tax year beginning after the effective date of
10             this amendment provided such adjustment is made
11             pursuant to regulation adopted by the Department
12             and such regulations provide methods and standards
13             by which the Department will utilize its authority
14             under Section 404 of this Act; and
15             (D-8) For taxable years ending on or after December
16         31, 2004, an amount equal to the amount of intangible
17         expenses and costs otherwise allowed as a deduction in
18         computing base income, and that were paid, accrued, or
19         incurred, directly or indirectly, to a foreign person
20         who would be a member of the same unitary business
21         group but for the fact that the foreign person's
22         business activity outside the United States is 80% or
23         more of that person's total business activity. The
24         addition modification required by this subparagraph
25         shall be reduced to the extent that dividends were
26         included in base income of the unitary group for the
27         same taxable year and received by the taxpayer or by a
28         member of the taxpayer's unitary business group
29         (including amounts included in gross income pursuant
30         to Sections 951 through 964 of the Internal Revenue
31         Code and amounts included in gross income under Section
32         78 of the Internal Revenue Code) with respect to the
33         stock of the same person to whom the intangible
34         expenses and costs were directly or indirectly paid,
35         incurred or accrued. The preceding sentence shall not
36         apply to the extent that the same dividends caused a

 

 

HB1577 - 51 - LRB094 09191 LJB 39424 b

1         reduction to the addition modification required under
2         Section 203(d)(2)(D-7) of this Act. As used in this
3         subparagraph, the term "intangible expenses and costs"
4         includes (1) expenses, losses, and costs for, or
5         related to, the direct or indirect acquisition, use,
6         maintenance or management, ownership, sale, exchange,
7         or any other disposition of intangible property; (2)
8         losses incurred, directly or indirectly, from
9         factoring transactions or discounting transactions;
10         (3) royalty, patent, technical, and copyright fees;
11         (4) licensing fees; and (5) other similar expenses and
12         costs. For purposes of this subparagraph, "intangible
13         property" includes patents, patent applications, trade
14         names, trademarks, service marks, copyrights, mask
15         works, trade secrets, and similar types of intangible
16         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 foreign
21             person who is subject in a foreign country or
22             state, other than a state which requires mandatory
23             unitary reporting, to a tax on or measured by net
24             income with respect to such item; or
25                 (ii) any item of intangible expense or cost
26             paid, accrued, or incurred, directly or
27             indirectly, if the taxpayer can establish, based
28             on a preponderance of the evidence, both of the
29             following:
30                     (a) the foreign person during the same
31                 taxable year paid, accrued, or incurred, the
32                 intangible expense or cost to a person that is
33                 not a related member, and
34                     (b) the transaction giving rise to the
35                 intangible expense or cost between the
36                 taxpayer and the foreign person did not have as

 

 

HB1577 - 52 - LRB094 09191 LJB 39424 b

1                 a principal purpose the avoidance of Illinois
2                 income tax, and is paid pursuant to a contract
3                 or agreement that reflects arm's-length terms;
4                 or
5                 (iii) any item of intangible expense or cost
6             paid, accrued, or incurred, directly or
7             indirectly, from a transaction with a foreign
8             person if the taxpayer establishes by clear and
9             convincing evidence, that the adjustments are
10             unreasonable; or if the taxpayer and the Director
11             agree in writing to the application or use of an
12             alternative method of apportionment under Section
13             304(f);
14                 Nothing in this subsection shall preclude the
15             Director from making any other adjustment
16             otherwise allowed under Section 404 of this Act for
17             any tax year beginning after the effective date of
18             this amendment provided such adjustment is made
19             pursuant to regulation adopted by the Department
20             and such regulations provide methods and standards
21             by which the Department will utilize its authority
22             under Section 404 of this Act;
23     and by deducting from the total so obtained the following
24     amounts:
25             (E) The valuation limitation amount;
26             (F) An amount equal to the amount of any tax
27         imposed by this Act which was refunded to the taxpayer
28         and included in such total for the taxable year;
29             (G) An amount equal to all amounts included in
30         taxable income as modified by subparagraphs (A), (B),
31         (C) and (D) which are exempt from taxation by this
32         State either by reason of its statutes or Constitution
33         or by reason of the Constitution, treaties or statutes
34         of the United States; provided that, in the case of any
35         statute of this State that exempts income derived from
36         bonds or other obligations from the tax imposed under

 

 

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1         this Act, the amount exempted shall be the interest net
2         of bond premium amortization;
3             (H) Any income of the partnership which
4         constitutes personal service income as defined in
5         Section 1348 (b) (1) of the Internal Revenue Code (as
6         in effect December 31, 1981) or a reasonable allowance
7         for compensation paid or accrued for services rendered
8         by partners to the partnership, whichever is greater;
9             (I) An amount equal to all amounts of income
10         distributable to an entity subject to the Personal
11         Property Tax Replacement Income Tax imposed by
12         subsections (c) and (d) of Section 201 of this Act
13         including amounts distributable to organizations
14         exempt from federal income tax by reason of Section
15         501(a) of the Internal Revenue Code;
16             (J) With the exception of any amounts subtracted
17         under subparagraph (G), an amount equal to the sum of
18         all amounts disallowed as deductions by (i) Sections
19         171(a) (2), and 265(2) of the Internal Revenue Code of
20         1954, as now or hereafter amended, and all amounts of
21         expenses allocable to interest and disallowed as
22         deductions by Section 265(1) of the Internal Revenue
23         Code, as now or hereafter amended; and (ii) for taxable
24         years ending on or after August 13, 1999, Sections
25         171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
26         Internal Revenue Code; the provisions of this
27         subparagraph are exempt from the provisions of Section
28         250;
29             (K) An amount equal to those dividends included in
30         such total which were paid by a corporation which
31         conducts business operations in an Enterprise Zone or
32         zones created under the Illinois Enterprise Zone Act,
33         enacted by the 82nd General Assembly, and conducts
34         substantially all of its operations in an Enterprise
35         Zone or Zones;
36             (L) An amount equal to any contribution made to a

 

 

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1         job training project established pursuant to the Real
2         Property Tax Increment Allocation Redevelopment Act;
3             (M) An amount equal to those dividends included in
4         such total that were paid by a corporation that
5         conducts business operations in a federally designated
6         Foreign Trade Zone or Sub-Zone and that is designated a
7         High Impact Business located in Illinois; provided
8         that dividends eligible for the deduction provided in
9         subparagraph (K) of paragraph (2) of this subsection
10         shall not be eligible for the deduction provided under
11         this subparagraph (M);
12             (N) 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 of 1986;
17             (O) For taxable years 2001 and thereafter, for the
18         taxable year in which the bonus depreciation deduction
19         (30% of the adjusted basis of the qualified property)
20         is taken on the taxpayer's federal income tax return
21         under subsection (k) of Section 168 of the Internal
22         Revenue Code and for each applicable taxable year
23         thereafter, an amount equal to "x", where:
24                 (1) "y" equals the amount of the depreciation
25             deduction taken for the taxable year on the
26             taxpayer's federal income tax return on property
27             for which the bonus depreciation deduction (30% of
28             the adjusted basis of the qualified property) was
29             taken in any year under subsection (k) of Section
30             168 of the Internal Revenue Code, but not including
31             the bonus depreciation deduction; and
32                 (2) "x" equals "y" multiplied by 30 and then
33             divided by 70 (or "y" multiplied by 0.429).
34             The aggregate amount deducted under this
35         subparagraph in all taxable years for any one piece of
36         property may not exceed the amount of the bonus

 

 

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1         depreciation deduction (30% of the adjusted basis of
2         the qualified property) 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;
5             (P) If the taxpayer reports a capital gain or loss
6         on the taxpayer's federal income tax return for the
7         taxable year based on a sale or transfer of property
8         for which the taxpayer was required in any taxable year
9         to make an addition modification under subparagraph
10         (D-5), then an amount equal to that addition
11         modification.
12             The taxpayer is allowed to take the deduction under
13         this subparagraph only once with respect to any one
14         piece of property;
15             (Q) The amount of (i) any interest income (net of
16         the deductions allocable thereto) taken into account
17         for the taxable year with respect to a transaction with
18         a taxpayer that is required to make an addition
19         modification with respect to such transaction under
20         Section 203(a)(2)(D-17), 203(b)(2)(E-12),
21         203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
22         the amount of such addition modification and (ii) any
23         income from intangible property (net of the deductions
24         allocable thereto) taken into account for the taxable
25         year with respect to a transaction with a taxpayer that
26         is required to make an addition modification with
27         respect to such transaction under Section
28         203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
29         203(d)(2)(D-8), but not to exceed the amount of such
30         addition modification;
31             (R) An amount equal to the interest income taken
32         into account for the taxable year (net of the
33         deductions allocable thereto) with respect to
34         transactions with a foreign person who would be a
35         member of the taxpayer's unitary business group but for
36         the fact that the foreign person's business activity

 

 

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1         outside the United States is 80% or more of that
2         person's total business activity, but not to exceed the
3         addition modification required to be made for the same
4         taxable year under Section 203(d)(2)(D-7) for interest
5         paid, accrued, or incurred, directly or indirectly, to
6         the same foreign person; and
7             (S) An amount equal to the income from intangible
8         property taken into account for the taxable year (net
9         of the deductions allocable thereto) with respect to
10         transactions with a foreign person who would be a
11         member of the taxpayer's unitary business group but for
12         the fact that the foreign person's business activity
13         outside the United States is 80% or more of that
14         person's total business activity, but not to exceed the
15         addition modification required to be made for the same
16         taxable year under Section 203(d)(2)(D-8) for
17         intangible expenses and costs paid, accrued, or
18         incurred, directly or indirectly, to the same foreign
19         person.
 
20     (e) Gross income; adjusted gross income; taxable income.
21         (1) In general. Subject to the provisions of paragraph
22     (2) and subsection (b) (3), for purposes of this Section
23     and Section 803(e), a taxpayer's gross income, adjusted
24     gross income, or taxable income for the taxable year shall
25     mean the amount of gross income, adjusted gross income or
26     taxable income properly reportable for federal income tax
27     purposes for the taxable year under the provisions of the
28     Internal Revenue Code. Taxable income may be less than
29     zero. However, for taxable years ending on or after
30     December 31, 1986, net operating loss carryforwards from
31     taxable years ending prior to December 31, 1986, may not
32     exceed the sum of federal taxable income for the taxable
33     year before net operating loss deduction, plus the excess
34     of addition modifications over subtraction modifications
35     for the taxable year. For taxable years ending prior to

 

 

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1     December 31, 1986, taxable income may never be an amount in
2     excess of the net operating loss for the taxable year as
3     defined in subsections (c) and (d) of Section 172 of the
4     Internal Revenue Code, provided that when taxable income of
5     a corporation (other than a Subchapter S corporation),
6     trust, or estate is less than zero and addition
7     modifications, other than those provided by subparagraph
8     (E) of paragraph (2) of subsection (b) for corporations or
9     subparagraph (E) of paragraph (2) of subsection (c) for
10     trusts and estates, exceed subtraction modifications, an
11     addition modification must be made under those
12     subparagraphs for any other taxable year to which the
13     taxable income less than zero (net operating loss) is
14     applied under Section 172 of the Internal Revenue Code or
15     under subparagraph (E) of paragraph (2) of this subsection
16     (e) applied in conjunction with Section 172 of the Internal
17     Revenue Code.
18         (2) Special rule. For purposes of paragraph (1) of this
19     subsection, the taxable income properly reportable for
20     federal income tax purposes shall mean:
21             (A) Certain life insurance companies. In the case
22         of a life insurance company subject to the tax imposed
23         by Section 801 of the Internal Revenue Code, life
24         insurance company taxable income, plus the amount of
25         distribution from pre-1984 policyholder surplus
26         accounts as calculated under Section 815a of the
27         Internal Revenue Code;
28             (B) Certain other insurance companies. In the case
29         of mutual insurance companies subject to the tax
30         imposed by Section 831 of the Internal Revenue Code,
31         insurance company taxable income;
32             (C) Regulated investment companies. In the case of
33         a regulated investment company subject to the tax
34         imposed by Section 852 of the Internal Revenue Code,
35         investment company taxable income;
36             (D) Real estate investment trusts. In the case of a

 

 

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1         real estate investment trust subject to the tax imposed
2         by Section 857 of the Internal Revenue Code, real
3         estate investment trust taxable income;
4             (E) Consolidated corporations. In the case of a
5         corporation which is a member of an affiliated group of
6         corporations filing a consolidated income tax return
7         for the taxable year for federal income tax purposes,
8         taxable income determined as if such corporation had
9         filed a separate return for federal income tax purposes
10         for the taxable year and each preceding taxable year
11         for which it was a member of an affiliated group. For
12         purposes of this subparagraph, the taxpayer's separate
13         taxable income shall be determined as if the election
14         provided by Section 243(b) (2) of the Internal Revenue
15         Code had been in effect for all such years;
16             (F) Cooperatives. In the case of a cooperative
17         corporation or association, the taxable income of such
18         organization determined in accordance with the
19         provisions of Section 1381 through 1388 of the Internal
20         Revenue Code;
21             (G) Subchapter S corporations. In the case of: (i)
22         a Subchapter S corporation for which there is in effect
23         an election for the taxable year under Section 1362 of
24         the Internal Revenue Code, the taxable income of such
25         corporation determined in accordance with Section
26         1363(b) of the Internal Revenue Code, except that
27         taxable income shall take into account those items
28         which are required by Section 1363(b)(1) of the
29         Internal Revenue Code to be separately stated; and (ii)
30         a Subchapter S corporation for which there is in effect
31         a federal election to opt out of the provisions of the
32         Subchapter S Revision Act of 1982 and have applied
33         instead the prior federal Subchapter S rules as in
34         effect on July 1, 1982, the taxable income of such
35         corporation determined in accordance with the federal
36         Subchapter S rules as in effect on July 1, 1982; and

 

 

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1             (H) Partnerships. In the case of a partnership,
2         taxable income determined in accordance with Section
3         703 of the Internal Revenue Code, except that taxable
4         income shall take into account those items which are
5         required by Section 703(a)(1) to be separately stated
6         but which would be taken into account by an individual
7         in calculating his taxable income.
8         (3) Recapture of business expenses on disposition of
9     asset or business. Notwithstanding any other law to the
10     contrary, if in prior years income from an asset or
11     business has been classified as business income and in a
12     later year is demonstrated to be non-business income, then
13     all expenses, without limitation, deducted in such later
14     year and in the 2 immediately preceding taxable years
15     related to that asset or business that generated the
16     non-business income shall be added back and recaptured as
17     business income in the year of the disposition of the asset
18     or business. Such amount shall be apportioned to Illinois
19     using the greater of the apportionment fraction computed
20     for the business under Section 304 of this Act for the
21     taxable year or the average of the apportionment fractions
22     computed for the business under Section 304 of this Act for
23     the taxable year and for the 2 immediately preceding
24     taxable years.
25     (f) Valuation limitation amount.
26         (1) In general. The valuation limitation amount
27     referred to in subsections (a) (2) (G), (c) (2) (I) and
28     (d)(2) (E) is an amount equal to:
29             (A) The sum of the pre-August 1, 1969 appreciation
30         amounts (to the extent consisting of gain reportable
31         under the provisions of Section 1245 or 1250 of the
32         Internal Revenue Code) for all property in respect of
33         which such gain was reported for the taxable year; plus
34             (B) The lesser of (i) the sum of the pre-August 1,
35         1969 appreciation amounts (to the extent consisting of
36         capital gain) for all property in respect of which such

 

 

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1         gain was reported for federal income tax purposes for
2         the taxable year, or (ii) the net capital gain for the
3         taxable year, reduced in either case by any amount of
4         such gain included in the amount determined under
5         subsection (a) (2) (F) or (c) (2) (H).
6         (2) Pre-August 1, 1969 appreciation amount.
7             (A) If the fair market value of property referred
8         to in paragraph (1) was readily ascertainable on August
9         1, 1969, the pre-August 1, 1969 appreciation amount for
10         such property is the lesser of (i) the excess of such
11         fair market value over the taxpayer's basis (for
12         determining gain) for such property on that date
13         (determined under the Internal Revenue Code as in
14         effect on that date), or (ii) the total gain realized
15         and reportable for federal income tax purposes in
16         respect of the sale, exchange or other disposition of
17         such property.
18             (B) If the fair market value of property referred
19         to in paragraph (1) was not readily ascertainable on
20         August 1, 1969, the pre-August 1, 1969 appreciation
21         amount for such property is that amount which bears the
22         same ratio to the total gain reported in respect of the
23         property for federal income tax purposes for the
24         taxable year, as the number of full calendar months in
25         that part of the taxpayer's holding period for the
26         property ending July 31, 1969 bears to the number of
27         full calendar months in the taxpayer's entire holding
28         period for the property.
29             (C) The Department shall prescribe such
30         regulations as may be necessary to carry out the
31         purposes of this paragraph.
 
32     (g) Double deductions. Unless specifically provided
33 otherwise, nothing in this Section shall permit the same item
34 to be deducted more than once.
 

 

 

HB1577 - 61 - LRB094 09191 LJB 39424 b

1     (h) Legislative intention. Except as expressly provided by
2 this Section there shall be no modifications or limitations on
3 the amounts of income, gain, loss or deduction taken into
4 account in determining gross income, adjusted gross income or
5 taxable income for federal income tax purposes for the taxable
6 year, or in the amount of such items entering into the
7 computation of base income and net income under this Act for
8 such taxable year, whether in respect of property values as of
9 August 1, 1969 or otherwise.
10 (Source: P.A. 92-16, eff. 6-28-01; 92-244, eff. 8-3-01; 92-439,
11 eff. 8-17-01; 92-603, eff. 6-28-02; 92-626, eff. 7-11-02;
12 92-651, eff. 7-11-02; 92-846, eff. 8-23-02; 93-812, eff.
13 7-26-04; 93-840, eff. 7-30-04; revised 10-12-04.)