97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB2239

 

Introduced 2/10/2011, by Sen. Matt Murphy

 

SYNOPSIS AS INTRODUCED:
 
15 ILCS 305/5  from Ch. 124, par. 5
35 ILCS 5/201  from Ch. 120, par. 2-201
35 ILCS 5/207  from Ch. 120, par. 2-207
35 ILCS 5/804  from Ch. 120, par. 8-804
35 ILCS 5/901  from Ch. 120, par. 9-901
35 ILCS 405/2  from Ch. 120, par. 405A-2
30 ILCS 5/3-20 rep.
30 ILCS 105/5.787 rep.
30 ILCS 105/6z-85 rep.
30 ILCS 105/6z-86 rep.
30 ILCS 105/25.2 rep.
35 ILCS 5/202.5 rep.

    Amends the Illinois Income Tax Act. Reduces the rate of tax imposed by Public Act 96-1496 to 3% for individuals, trusts, and estates and 4.8% for corporations (the rates in effect immediately prior to the effective date of Public Act 96-1496). Provides that the amendatory Act supersedes Public Act 96-1496 and that the rates shall be deemed to be 3% for individuals, trusts, and estates and 4.8% for corporations for the entire period beginning on the effective date of Public Act 96-1496 through the effective date of the amendatory Act and thereafter. Makes corresponding changes concerning the distribution of tax proceeds. Amends the Illinois Estate and Generation-Skipping Transfer Tax Act to reverse certain changes made by Public Act 96-1496. Effective immediately.


LRB097 10193 HLH 50386 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB2239LRB097 10193 HLH 50386 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Secretary of State Act is amended by
5changing Section 5 as follows:
 
6    (15 ILCS 305/5)  (from Ch. 124, par. 5)
7    Sec. 5. It shall be the duty of the Secretary of State:
8    1. To countersign and affix the seal of state to all
9commissions required by law to be issued by the Governor.
10    2. To make a register of all appointments by the Governor,
11specifying the person appointed, the office conferred, the date
12of the appointment, the date when bond or oath is taken and the
13date filed. If Senate confirmation is required, the date of the
14confirmation shall be included in the register.
15    3. To make proper indexes to public acts, resolutions,
16papers and documents in his office.
17    3-a. To review all rules of all State agencies adopted in
18compliance with the codification system prescribed by the
19Secretary. The review shall be for the purposes and include all
20the powers and duties provided in the Illinois Administrative
21Procedure Act. The Secretary of State shall cooperate with the
22Legislative Information System to insure the accuracy of the
23text of the rules maintained under the Legislative Information

 

 

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1System Act.
2    4. To give any person requiring the same paying the lawful
3fees therefor, a copy of any law, act, resolution, record or
4paper in his office, and attach thereto his certificate, under
5the seal of the state.
6    5. To take charge of and preserve from waste, and keep in
7repair, the houses, lots, grounds and appurtenances, situated
8in the City of Springfield, and belonging to or occupied by the
9State, the care of which is not otherwise provided for by law,
10and to take charge of and preserve from waste, and keep in
11repair, the houses, lots, grounds and appurtenances, situated
12in the State outside the City of Springfield where such houses,
13lots, grounds and appurtenances are occupied by the Secretary
14of State and no other State officer or agency.
15    6. To supervise the distribution of the laws.
16    7. To perform such other duties as may be required by law.
17The Secretary of State may, within appropriations authorized by
18the General Assembly, maintain offices in the State Capital and
19in such other places in the State as he may deem necessary to
20properly carry out the powers and duties vested in him by law.
21    8. In addition to all other authority granted to the
22Secretary by law, subject to appropriation, to make grants or
23otherwise provide assistance to, among others without
24limitation, units of local government, school districts,
25educational institutions, private agencies, not-for-profit
26organizations, and for-profit entities for the health, safety,

 

 

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1and welfare of Illinois residents for purposes related to
2education, transportation, construction, capital improvements,
3social services, and any other lawful public purpose. Upon
4request of the Secretary, all State agencies are mandated to
5provide the Secretary with assistance in administering the
6grants.
7    9. To notify the Auditor General of any Public Act filed
8with the Office of the Secretary of State making an
9appropriation or transfer of funds from the State treasury.
10This paragraph (9) applies only through June 30, 2015.
11(Source: P.A. 96-37, eff. 7-13-09; 96-1496, eff. 1-13-11.)
 
12    Section 10. The Illinois Income Tax Act is amended by
13changing Sections 201, 207, 804, and 901 as follows:
 
14    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
15    Sec. 201. Tax Imposed.
16    (a) In general. A tax measured by net income is hereby
17imposed on every individual, corporation, trust and estate for
18each taxable year ending after July 31, 1969 on the privilege
19of earning or receiving income in or as a resident of this
20State. Such tax shall be in addition to all other occupation or
21privilege taxes imposed by this State or by any municipal
22corporation or political subdivision thereof.
23    (b) Rates. The tax imposed by subsection (a) of this
24Section shall be determined as follows, except as adjusted by

 

 

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1subsection (d-1):
2        (1) In the case of an individual, trust or estate, for
3    taxable years ending prior to July 1, 1989, an amount equal
4    to 2 1/2% of the taxpayer's net income for the taxable
5    year.
6        (2) In the case of an individual, trust or estate, for
7    taxable years beginning prior to July 1, 1989 and ending
8    after June 30, 1989, an amount equal to the sum of (i) 2
9    1/2% of the taxpayer's net income for the period prior to
10    July 1, 1989, as calculated under Section 202.3, and (ii)
11    3% of the taxpayer's net income for the period after June
12    30, 1989, as calculated under Section 202.3.
13        (3) In the case of an individual, trust or estate, for
14    taxable years beginning after June 30, 1989, and ending
15    prior to January 1, 2011, an amount equal to 3% of the
16    taxpayer's net income for the taxable year.
17        (4) (Blank). In the case of an individual, trust, or
18    estate, for taxable years beginning prior to January 1,
19    2011, and ending after December 31, 2010, an amount equal
20    to the sum of (i) 3% of the taxpayer's net income for the
21    period prior to January 1, 2011, as calculated under
22    Section 202.5, and (ii) 5% of the taxpayer's net income for
23    the period after December 31, 2010, as calculated under
24    Section 202.5.
25        (5) (Blank). In the case of an individual, trust, or
26    estate, for taxable years beginning on or after January 1,

 

 

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1    2011, and ending prior to January 1, 2015, an amount equal
2    to 5% of the taxpayer's net income for the taxable year.
3        (5.1) (Blank). In the case of an individual, trust, or
4    estate, for taxable years beginning prior to January 1,
5    2015, and ending after December 31, 2014, an amount equal
6    to the sum of (i) 5% of the taxpayer's net income for the
7    period prior to January 1, 2015, as calculated under
8    Section 202.5, and (ii) 3.75% of the taxpayer's net income
9    for the period after December 31, 2014, as calculated under
10    Section 202.5.
11        (5.2) (Blank). In the case of an individual, trust, or
12    estate, for taxable years beginning on or after January 1,
13    2015, and ending prior to January 1, 2025, an amount equal
14    to 3.75% of the taxpayer's net income for the taxable year.
15        (5.3) (Blank). In the case of an individual, trust, or
16    estate, for taxable years beginning prior to January 1,
17    2025, and ending after December 31, 2024, an amount equal
18    to the sum of (i) 3.75% of the taxpayer's net income for
19    the period prior to January 1, 2025, as calculated under
20    Section 202.5, and (ii) 3.25% of the taxpayer's net income
21    for the period after December 31, 2024, as calculated under
22    Section 202.5.
23        (5.4) (Blank). In the case of an individual, trust, or
24    estate, for taxable years beginning on or after January 1,
25    2025, an amount equal to 3.25% of the taxpayer's net income
26    for the taxable year.

 

 

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1        (6) In the case of a corporation, for taxable years
2    ending prior to July 1, 1989, an amount equal to 4% of the
3    taxpayer's net income for the taxable year.
4        (7) In the case of a corporation, for taxable years
5    beginning prior to July 1, 1989 and ending after June 30,
6    1989, an amount equal to the sum of (i) 4% of the
7    taxpayer's net income for the period prior to July 1, 1989,
8    as calculated under Section 202.3, and (ii) 4.8% of the
9    taxpayer's net income for the period after June 30, 1989,
10    as calculated under Section 202.3.
11        (8) In the case of a corporation, for taxable years
12    beginning after June 30, 1989, and ending prior to January
13    1, 2011, an amount equal to 4.8% of the taxpayer's net
14    income for the taxable year.
15        (9) (Blank). In the case of a corporation, for taxable
16    years beginning prior to January 1, 2011, and ending after
17    December 31, 2010, an amount equal to the sum of (i) 4.8%
18    of the taxpayer's net income for the period prior to
19    January 1, 2011, as calculated under Section 202.5, and
20    (ii) 7% of the taxpayer's net income for the period after
21    December 31, 2010, as calculated under Section 202.5.
22        (10) (Blank). In the case of a corporation, for taxable
23    years beginning on or after January 1, 2011, and ending
24    prior to January 1, 2015, an amount equal to 7% of the
25    taxpayer's net income for the taxable year.
26        (11) (Blank). In the case of a corporation, for taxable

 

 

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1    years beginning prior to January 1, 2015, and ending after
2    December 31, 2014, an amount equal to the sum of (i) 7% of
3    the taxpayer's net income for the period prior to January
4    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
5    of the taxpayer's net income for the period after December
6    31, 2014, as calculated under Section 202.5.
7        (12) (Blank). In the case of a corporation, for taxable
8    years beginning on or after January 1, 2015, and ending
9    prior to January 1, 2025, an amount equal to 5.25% of the
10    taxpayer's net income for the taxable year.
11        (13) (Blank). In the case of a corporation, for taxable
12    years beginning prior to January 1, 2025, and ending after
13    December 31, 2024, an amount equal to the sum of (i) 5.25%
14    of the taxpayer's net income for the period prior to
15    January 1, 2025, as calculated under Section 202.5, and
16    (ii) 4.8% of the taxpayer's net income for the period after
17    December 31, 2024, as calculated under Section 202.5.
18        (14) (Blank). In the case of a corporation, for taxable
19    years beginning on or after January 1, 2025, an amount
20    equal to 4.8% of the taxpayer's net income for the taxable
21    year.
22    The rates under this subsection (b) are subject to the
23provisions of Section 201.5.
24    (b-5) It is the intention of the General Assembly that this
25amendatory Act of the 97th General Assembly supersedes Public
26Act 96-1496. The rates under subsection (b) shall be deemed to

 

 

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1be 3% for individuals, trusts, and estates and 4.8% for
2corporations for the entire period beginning on the effective
3date of Public Act 96-1496 through the effective date of this
4amendatory Act of the 97th General Assembly and thereafter.
5    (c) Personal Property Tax Replacement Income Tax.
6Beginning on July 1, 1979 and thereafter, in addition to such
7income tax, there is also hereby imposed the Personal Property
8Tax Replacement Income Tax measured by net income on every
9corporation (including Subchapter S corporations), partnership
10and trust, for each taxable year ending after June 30, 1979.
11Such taxes are imposed on the privilege of earning or receiving
12income in or as a resident of this State. The Personal Property
13Tax Replacement Income Tax shall be in addition to the income
14tax imposed by subsections (a) and (b) of this Section and in
15addition to all other occupation or privilege taxes imposed by
16this State or by any municipal corporation or political
17subdivision thereof.
18    (d) Additional Personal Property Tax Replacement Income
19Tax Rates. The personal property tax replacement income tax
20imposed by this subsection and subsection (c) of this Section
21in the case of a corporation, other than a Subchapter S
22corporation and except as adjusted by subsection (d-1), shall
23be an additional amount equal to 2.85% of such taxpayer's net
24income for the taxable year, except that beginning on January
251, 1981, and thereafter, the rate of 2.85% specified in this
26subsection shall be reduced to 2.5%, and in the case of a

 

 

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1partnership, trust or a Subchapter S corporation shall be an
2additional amount equal to 1.5% of such taxpayer's net income
3for the taxable year.
4    (d-1) Rate reduction for certain foreign insurers. In the
5case of a foreign insurer, as defined by Section 35A-5 of the
6Illinois Insurance Code, whose state or country of domicile
7imposes on insurers domiciled in Illinois a retaliatory tax
8(excluding any insurer whose premiums from reinsurance assumed
9are 50% or more of its total insurance premiums as determined
10under paragraph (2) of subsection (b) of Section 304, except
11that for purposes of this determination premiums from
12reinsurance do not include premiums from inter-affiliate
13reinsurance arrangements), beginning with taxable years ending
14on or after December 31, 1999, the sum of the rates of tax
15imposed by subsections (b) and (d) shall be reduced (but not
16increased) to the rate at which the total amount of tax imposed
17under this Act, net of all credits allowed under this Act,
18shall equal (i) the total amount of tax that would be imposed
19on the foreign insurer's net income allocable to Illinois for
20the taxable year by such foreign insurer's state or country of
21domicile if that net income were subject to all income taxes
22and taxes measured by net income imposed by such foreign
23insurer's state or country of domicile, net of all credits
24allowed or (ii) a rate of zero if no such tax is imposed on such
25income by the foreign insurer's state of domicile. For the
26purposes of this subsection (d-1), an inter-affiliate includes

 

 

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1a mutual insurer under common management.
2        (1) For the purposes of subsection (d-1), in no event
3    shall the sum of the rates of tax imposed by subsections
4    (b) and (d) be reduced below the rate at which the sum of:
5            (A) the total amount of tax imposed on such foreign
6        insurer under this Act for a taxable year, net of all
7        credits allowed under this Act, plus
8            (B) the privilege tax imposed by Section 409 of the
9        Illinois Insurance Code, the fire insurance company
10        tax imposed by Section 12 of the Fire Investigation
11        Act, and the fire department taxes imposed under
12        Section 11-10-1 of the Illinois Municipal Code,
13    equals 1.25% for taxable years ending prior to December 31,
14    2003, or 1.75% for taxable years ending on or after
15    December 31, 2003, of the net taxable premiums written for
16    the taxable year, as described by subsection (1) of Section
17    409 of the Illinois Insurance Code. This paragraph will in
18    no event increase the rates imposed under subsections (b)
19    and (d).
20        (2) Any reduction in the rates of tax imposed by this
21    subsection shall be applied first against the rates imposed
22    by subsection (b) and only after the tax imposed by
23    subsection (a) net of all credits allowed under this
24    Section other than the credit allowed under subsection (i)
25    has been reduced to zero, against the rates imposed by
26    subsection (d).

 

 

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1    This subsection (d-1) is exempt from the provisions of
2Section 250.
3    (e) Investment credit. A taxpayer shall be allowed a credit
4against the Personal Property Tax Replacement Income Tax for
5investment in qualified property.
6        (1) A taxpayer shall be allowed a credit equal to .5%
7    of the basis of qualified property placed in service during
8    the taxable year, provided such property is placed in
9    service on or after July 1, 1984. There shall be allowed an
10    additional credit equal to .5% of the basis of qualified
11    property placed in service during the taxable year,
12    provided such property is placed in service on or after
13    July 1, 1986, and the taxpayer's base employment within
14    Illinois has increased by 1% or more over the preceding
15    year as determined by the taxpayer's employment records
16    filed with the Illinois Department of Employment Security.
17    Taxpayers who are new to Illinois shall be deemed to have
18    met the 1% growth in base employment for the first year in
19    which they file employment records with the Illinois
20    Department of Employment Security. The provisions added to
21    this Section by Public Act 85-1200 (and restored by Public
22    Act 87-895) shall be construed as declaratory of existing
23    law and not as a new enactment. If, in any year, the
24    increase in base employment within Illinois over the
25    preceding year is less than 1%, the additional credit shall
26    be limited to that percentage times a fraction, the

 

 

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1    numerator of which is .5% and the denominator of which is
2    1%, but shall not exceed .5%. The investment credit shall
3    not be allowed to the extent that it would reduce a
4    taxpayer's liability in any tax year below zero, nor may
5    any credit for qualified property be allowed for any year
6    other than the year in which the property was placed in
7    service in Illinois. For tax years ending on or after
8    December 31, 1987, and on or before December 31, 1988, the
9    credit shall be allowed for the tax year in which the
10    property is placed in service, or, if the amount of the
11    credit exceeds the tax liability for that year, whether it
12    exceeds the original liability or the liability as later
13    amended, such excess may be carried forward and applied to
14    the tax liability of the 5 taxable years following the
15    excess credit years if the taxpayer (i) makes investments
16    which cause the creation of a minimum of 2,000 full-time
17    equivalent jobs in Illinois, (ii) is located in an
18    enterprise zone established pursuant to the Illinois
19    Enterprise Zone Act and (iii) is certified by the
20    Department of Commerce and Community Affairs (now
21    Department of Commerce and Economic Opportunity) as
22    complying with the requirements specified in clause (i) and
23    (ii) by July 1, 1986. The Department of Commerce and
24    Community Affairs (now Department of Commerce and Economic
25    Opportunity) shall notify the Department of Revenue of all
26    such certifications immediately. For tax years ending

 

 

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1    after December 31, 1988, the credit shall be allowed for
2    the tax year in which the property is placed in service,
3    or, if the amount of the credit exceeds the tax liability
4    for that year, whether it exceeds the original liability or
5    the liability as later amended, such excess may be carried
6    forward and applied to the tax liability of the 5 taxable
7    years following the excess credit years. The credit shall
8    be applied to the earliest year for which there is a
9    liability. If there is credit from more than one tax year
10    that is available to offset a liability, earlier credit
11    shall be applied first.
12        (2) The term "qualified property" means property
13    which:
14            (A) is tangible, whether new or used, including
15        buildings and structural components of buildings and
16        signs that are real property, but not including land or
17        improvements to real property that are not a structural
18        component of a building such as landscaping, sewer
19        lines, local access roads, fencing, parking lots, and
20        other appurtenances;
21            (B) is depreciable pursuant to Section 167 of the
22        Internal Revenue Code, except that "3-year property"
23        as defined in Section 168(c)(2)(A) of that Code is not
24        eligible for the credit provided by this subsection
25        (e);
26            (C) is acquired by purchase as defined in Section

 

 

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1        179(d) of the Internal Revenue Code;
2            (D) is used in Illinois by a taxpayer who is
3        primarily engaged in manufacturing, or in mining coal
4        or fluorite, or in retailing, or was placed in service
5        on or after July 1, 2006 in a River Edge Redevelopment
6        Zone established pursuant to the River Edge
7        Redevelopment Zone Act; and
8            (E) has not previously been used in Illinois in
9        such a manner and by such a person as would qualify for
10        the credit provided by this subsection (e) or
11        subsection (f).
12        (3) For purposes of this subsection (e),
13    "manufacturing" means the material staging and production
14    of tangible personal property by procedures commonly
15    regarded as manufacturing, processing, fabrication, or
16    assembling which changes some existing material into new
17    shapes, new qualities, or new combinations. For purposes of
18    this subsection (e) the term "mining" shall have the same
19    meaning as the term "mining" in Section 613(c) of the
20    Internal Revenue Code. For purposes of this subsection (e),
21    the term "retailing" means the sale of tangible personal
22    property for use or consumption and not for resale, or
23    services rendered in conjunction with the sale of tangible
24    personal property for use or consumption and not for
25    resale. For purposes of this subsection (e), "tangible
26    personal property" has the same meaning as when that term

 

 

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1    is used in the Retailers' Occupation Tax Act, and, for
2    taxable years ending after December 31, 2008, does not
3    include the generation, transmission, or distribution of
4    electricity.
5        (4) The basis of qualified property shall be the basis
6    used to compute the depreciation deduction for federal
7    income tax purposes.
8        (5) If the basis of the property for federal income tax
9    depreciation purposes is increased after it has been placed
10    in service in Illinois by the taxpayer, the amount of such
11    increase shall be deemed property placed in service on the
12    date of such increase in basis.
13        (6) The term "placed in service" shall have the same
14    meaning as under Section 46 of the Internal Revenue Code.
15        (7) If during any taxable year, any property ceases to
16    be qualified property in the hands of the taxpayer within
17    48 months after being placed in service, or the situs of
18    any qualified property is moved outside Illinois within 48
19    months after being placed in service, the Personal Property
20    Tax Replacement Income Tax for such taxable year shall be
21    increased. Such increase shall be determined by (i)
22    recomputing the investment credit which would have been
23    allowed for the year in which credit for such property was
24    originally allowed by eliminating such property from such
25    computation and, (ii) subtracting such recomputed credit
26    from the amount of credit previously allowed. For the

 

 

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1    purposes of this paragraph (7), a reduction of the basis of
2    qualified property resulting from a redetermination of the
3    purchase price shall be deemed a disposition of qualified
4    property to the extent of such reduction.
5        (8) Unless the investment credit is extended by law,
6    the basis of qualified property shall not include costs
7    incurred after December 31, 2013, except for costs incurred
8    pursuant to a binding contract entered into on or before
9    December 31, 2013.
10        (9) Each taxable year ending before December 31, 2000,
11    a partnership may elect to pass through to its partners the
12    credits to which the partnership is entitled under this
13    subsection (e) for the taxable year. A partner may use the
14    credit allocated to him or her under this paragraph only
15    against the tax imposed in subsections (c) and (d) of this
16    Section. If the partnership makes that election, those
17    credits shall be allocated among the partners in the
18    partnership in accordance with the rules set forth in
19    Section 704(b) of the Internal Revenue Code, and the rules
20    promulgated under that Section, and the allocated amount of
21    the credits shall be allowed to the partners for that
22    taxable year. The partnership shall make this election on
23    its Personal Property Tax Replacement Income Tax return for
24    that taxable year. The election to pass through the credits
25    shall be irrevocable.
26        For taxable years ending on or after December 31, 2000,

 

 

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1    a partner that qualifies its partnership for a subtraction
2    under subparagraph (I) of paragraph (2) of subsection (d)
3    of Section 203 or a shareholder that qualifies a Subchapter
4    S corporation for a subtraction under subparagraph (S) of
5    paragraph (2) of subsection (b) of Section 203 shall be
6    allowed a credit under this subsection (e) equal to its
7    share of the credit earned under this subsection (e) during
8    the taxable year by the partnership or Subchapter S
9    corporation, determined in accordance with the
10    determination of income and distributive share of income
11    under Sections 702 and 704 and Subchapter S of the Internal
12    Revenue Code. This paragraph is exempt from the provisions
13    of Section 250.
14    (f) Investment credit; Enterprise Zone; River Edge
15Redevelopment Zone.
16        (1) A taxpayer shall be allowed a credit against the
17    tax imposed by subsections (a) and (b) of this Section for
18    investment in qualified property which is placed in service
19    in an Enterprise Zone created pursuant to the Illinois
20    Enterprise Zone Act or, for property placed in service on
21    or after July 1, 2006, a River Edge Redevelopment Zone
22    established pursuant to the River Edge Redevelopment Zone
23    Act. For partners, shareholders of Subchapter S
24    corporations, and owners of limited liability companies,
25    if the liability company is treated as a partnership for
26    purposes of federal and State income taxation, there shall

 

 

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1    be allowed a credit under this subsection (f) to be
2    determined in accordance with the determination of income
3    and distributive share of income under Sections 702 and 704
4    and Subchapter S of the Internal Revenue Code. The credit
5    shall be .5% of the basis for such property. The credit
6    shall be available only in the taxable year in which the
7    property is placed in service in the Enterprise Zone or
8    River Edge Redevelopment Zone and shall not be allowed to
9    the extent that it would reduce a taxpayer's liability for
10    the tax imposed by subsections (a) and (b) of this Section
11    to below zero. For tax years ending on or after December
12    31, 1985, the credit shall be allowed for the tax year in
13    which the property is placed in service, or, if the amount
14    of the credit exceeds the tax liability for that year,
15    whether it exceeds the original liability or the liability
16    as later amended, such excess may be carried forward and
17    applied to the tax liability of the 5 taxable years
18    following the excess credit year. The credit shall be
19    applied to the earliest year for which there is a
20    liability. If there is credit from more than one tax year
21    that is available to offset a liability, the credit
22    accruing first in time shall be applied first.
23        (2) The term qualified property means property which:
24            (A) is tangible, whether new or used, including
25        buildings and structural components of buildings;
26            (B) is depreciable pursuant to Section 167 of the

 

 

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1        Internal Revenue Code, except that "3-year property"
2        as defined in Section 168(c)(2)(A) of that Code is not
3        eligible for the credit provided by this subsection
4        (f);
5            (C) is acquired by purchase as defined in Section
6        179(d) of the Internal Revenue Code;
7            (D) is used in the Enterprise Zone or River Edge
8        Redevelopment Zone by the taxpayer; and
9            (E) has not been previously used in Illinois in
10        such a manner and by such a person as would qualify for
11        the credit provided by this subsection (f) or
12        subsection (e).
13        (3) The basis of qualified property shall be the basis
14    used to compute the depreciation deduction for federal
15    income tax purposes.
16        (4) If the basis of the property for federal income tax
17    depreciation purposes is increased after it has been placed
18    in service in the Enterprise Zone or River Edge
19    Redevelopment Zone by the taxpayer, the amount of such
20    increase shall be deemed property placed in service on the
21    date of such increase in basis.
22        (5) The term "placed in service" shall have the same
23    meaning as under Section 46 of the Internal Revenue Code.
24        (6) If during any taxable year, any property ceases to
25    be qualified property in the hands of the taxpayer within
26    48 months after being placed in service, or the situs of

 

 

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1    any qualified property is moved outside the Enterprise Zone
2    or River Edge Redevelopment Zone within 48 months after
3    being placed in service, the tax imposed under subsections
4    (a) and (b) of this Section for such taxable year shall be
5    increased. Such increase shall be determined by (i)
6    recomputing the investment credit which would have been
7    allowed for the year in which credit for such property was
8    originally allowed by eliminating such property from such
9    computation, and (ii) subtracting such recomputed credit
10    from the amount of credit previously allowed. For the
11    purposes of this paragraph (6), a reduction of the basis of
12    qualified property resulting from a redetermination of the
13    purchase price shall be deemed a disposition of qualified
14    property to the extent of such reduction.
15        (7) There shall be allowed an additional credit equal
16    to 0.5% of the basis of qualified property placed in
17    service during the taxable year in a River Edge
18    Redevelopment Zone, provided such property is placed in
19    service on or after July 1, 2006, and the taxpayer's base
20    employment within Illinois has increased by 1% or more over
21    the preceding year as determined by the taxpayer's
22    employment records filed with the Illinois Department of
23    Employment Security. Taxpayers who are new to Illinois
24    shall be deemed to have met the 1% growth in base
25    employment for the first year in which they file employment
26    records with the Illinois Department of Employment

 

 

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1    Security. If, in any year, the increase in base employment
2    within Illinois over the preceding year is less than 1%,
3    the additional credit shall be limited to that percentage
4    times a fraction, the numerator of which is 0.5% and the
5    denominator of which is 1%, but shall not exceed 0.5%.
6    (g) Jobs Tax Credit; Enterprise Zone, River Edge
7Redevelopment Zone, and Foreign Trade Zone or Sub-Zone.
8        (1) A taxpayer conducting a trade or business in an
9    enterprise zone or a High Impact Business designated by the
10    Department of Commerce and Economic Opportunity or for
11    taxable years ending on or after December 31, 2006, in a
12    River Edge Redevelopment Zone conducting a trade or
13    business in a federally designated Foreign Trade Zone or
14    Sub-Zone shall be allowed a credit against the tax imposed
15    by subsections (a) and (b) of this Section in the amount of
16    $500 per eligible employee hired to work in the zone during
17    the taxable year.
18        (2) To qualify for the credit:
19            (A) the taxpayer must hire 5 or more eligible
20        employees to work in an enterprise zone, River Edge
21        Redevelopment Zone, or federally designated Foreign
22        Trade Zone or Sub-Zone during the taxable year;
23            (B) the taxpayer's total employment within the
24        enterprise zone, River Edge Redevelopment Zone, or
25        federally designated Foreign Trade Zone or Sub-Zone
26        must increase by 5 or more full-time employees beyond

 

 

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1        the total employed in that zone at the end of the
2        previous tax year for which a jobs tax credit under
3        this Section was taken, or beyond the total employed by
4        the taxpayer as of December 31, 1985, whichever is
5        later; and
6            (C) the eligible employees must be employed 180
7        consecutive days in order to be deemed hired for
8        purposes of this subsection.
9        (3) An "eligible employee" means an employee who is:
10            (A) Certified by the Department of Commerce and
11        Economic Opportunity as "eligible for services"
12        pursuant to regulations promulgated in accordance with
13        Title II of the Job Training Partnership Act, Training
14        Services for the Disadvantaged or Title III of the Job
15        Training Partnership Act, Employment and Training
16        Assistance for Dislocated Workers Program.
17            (B) Hired after the enterprise zone, River Edge
18        Redevelopment Zone, or federally designated Foreign
19        Trade Zone or Sub-Zone was designated or the trade or
20        business was located in that zone, whichever is later.
21            (C) Employed in the enterprise zone, River Edge
22        Redevelopment Zone, or Foreign Trade Zone or Sub-Zone.
23        An employee is employed in an enterprise zone or
24        federally designated Foreign Trade Zone or Sub-Zone if
25        his services are rendered there or it is the base of
26        operations for the services performed.

 

 

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1            (D) A full-time employee working 30 or more hours
2        per week.
3        (4) For tax years ending on or after December 31, 1985
4    and prior to December 31, 1988, the credit shall be allowed
5    for the tax year in which the eligible employees are hired.
6    For tax years ending on or after December 31, 1988, the
7    credit shall be allowed for the tax year immediately
8    following the tax year in which the eligible employees are
9    hired. If the amount of the credit exceeds the tax
10    liability for that year, whether it exceeds the original
11    liability or the liability as later amended, such excess
12    may be carried forward and applied to the tax liability of
13    the 5 taxable years following the excess credit year. The
14    credit shall be applied to the earliest year for which
15    there is a liability. If there is credit from more than one
16    tax year that is available to offset a liability, earlier
17    credit shall be applied first.
18        (5) The Department of Revenue shall promulgate such
19    rules and regulations as may be deemed necessary to carry
20    out the purposes of this subsection (g).
21        (6) The credit shall be available for eligible
22    employees hired on or after January 1, 1986.
23    (h) Investment credit; High Impact Business.
24        (1) Subject to subsections (b) and (b-5) of Section 5.5
25    of the Illinois Enterprise Zone Act, a taxpayer shall be
26    allowed a credit against the tax imposed by subsections (a)

 

 

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1    and (b) of this Section for investment in qualified
2    property which is placed in service by a Department of
3    Commerce and Economic Opportunity designated High Impact
4    Business. The credit shall be .5% of the basis for such
5    property. The credit shall not be available (i) until the
6    minimum investments in qualified property set forth in
7    subdivision (a)(3)(A) of Section 5.5 of the Illinois
8    Enterprise Zone Act have been satisfied or (ii) until the
9    time authorized in subsection (b-5) of the Illinois
10    Enterprise Zone Act for entities designated as High Impact
11    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
12    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
13    Act, and shall not be allowed to the extent that it would
14    reduce a taxpayer's liability for the tax imposed by
15    subsections (a) and (b) of this Section to below zero. The
16    credit applicable to such investments shall be taken in the
17    taxable year in which such investments have been completed.
18    The credit for additional investments beyond the minimum
19    investment by a designated high impact business authorized
20    under subdivision (a)(3)(A) of Section 5.5 of the Illinois
21    Enterprise Zone Act shall be available only in the taxable
22    year in which the property is placed in service and shall
23    not be allowed to the extent that it would reduce a
24    taxpayer's liability for the tax imposed by subsections (a)
25    and (b) of this Section to below zero. For tax years ending
26    on or after December 31, 1987, the credit shall be allowed

 

 

SB2239- 25 -LRB097 10193 HLH 50386 b

1    for the tax year in which the property is placed in
2    service, or, if the amount of the credit exceeds the tax
3    liability for that year, whether it exceeds the original
4    liability or the liability as later amended, such excess
5    may be carried forward and applied to the tax liability of
6    the 5 taxable years following the excess credit year. The
7    credit shall be applied to the earliest year for which
8    there is a liability. If there is credit from more than one
9    tax year that is available to offset a liability, the
10    credit accruing first in time shall be applied first.
11        Changes made in this subdivision (h)(1) by Public Act
12    88-670 restore changes made by Public Act 85-1182 and
13    reflect existing law.
14        (2) The term qualified property means property which:
15            (A) is tangible, whether new or used, including
16        buildings and structural components of buildings;
17            (B) is depreciable pursuant to Section 167 of the
18        Internal Revenue Code, except that "3-year property"
19        as defined in Section 168(c)(2)(A) of that Code is not
20        eligible for the credit provided by this subsection
21        (h);
22            (C) is acquired by purchase as defined in Section
23        179(d) of the Internal Revenue Code; and
24            (D) is not eligible for the Enterprise Zone
25        Investment Credit provided by subsection (f) of this
26        Section.

 

 

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1        (3) The basis of qualified property shall be the basis
2    used to compute the depreciation deduction for federal
3    income tax purposes.
4        (4) If the basis of the property for federal income tax
5    depreciation purposes is increased after it has been placed
6    in service in a federally designated Foreign Trade Zone or
7    Sub-Zone located in Illinois by the taxpayer, the amount of
8    such increase shall be deemed property placed in service on
9    the date of such increase in basis.
10        (5) The term "placed in service" shall have the same
11    meaning as under Section 46 of the Internal Revenue Code.
12        (6) If during any taxable year ending on or before
13    December 31, 1996, any property ceases to be qualified
14    property in the hands of the taxpayer within 48 months
15    after being placed in service, or the situs of any
16    qualified property is moved outside Illinois within 48
17    months after being placed in service, the tax imposed under
18    subsections (a) and (b) of this Section for such taxable
19    year shall be increased. Such increase shall be determined
20    by (i) recomputing the investment credit which would have
21    been allowed for the year in which credit for such property
22    was originally allowed by eliminating such property from
23    such computation, and (ii) subtracting such recomputed
24    credit from the amount of credit previously allowed. For
25    the purposes of this paragraph (6), a reduction of the
26    basis of qualified property resulting from a

 

 

SB2239- 27 -LRB097 10193 HLH 50386 b

1    redetermination of the purchase price shall be deemed a
2    disposition of qualified property to the extent of such
3    reduction.
4        (7) Beginning with tax years ending after December 31,
5    1996, if a taxpayer qualifies for the credit under this
6    subsection (h) and thereby is granted a tax abatement and
7    the taxpayer relocates its entire facility in violation of
8    the explicit terms and length of the contract under Section
9    18-183 of the Property Tax Code, the tax imposed under
10    subsections (a) and (b) of this Section shall be increased
11    for the taxable year in which the taxpayer relocated its
12    facility by an amount equal to the amount of credit
13    received by the taxpayer under this subsection (h).
14    (i) Credit for Personal Property Tax Replacement Income
15Tax. For tax years ending prior to December 31, 2003, a credit
16shall be allowed against the tax imposed by subsections (a) and
17(b) of this Section for the tax imposed by subsections (c) and
18(d) of this Section. This credit shall be computed by
19multiplying the tax imposed by subsections (c) and (d) of this
20Section by a fraction, the numerator of which is base income
21allocable to Illinois and the denominator of which is Illinois
22base income, and further multiplying the product by the tax
23rate imposed by subsections (a) and (b) of this Section.
24    Any credit earned on or after December 31, 1986 under this
25subsection which is unused in the year the credit is computed
26because it exceeds the tax liability imposed by subsections (a)

 

 

SB2239- 28 -LRB097 10193 HLH 50386 b

1and (b) for that year (whether it exceeds the original
2liability or the liability as later amended) may be carried
3forward and applied to the tax liability imposed by subsections
4(a) and (b) of the 5 taxable years following the excess credit
5year, provided that no credit may be carried forward to any
6year ending on or after December 31, 2003. This credit shall be
7applied first to the earliest year for which there is a
8liability. If there is a credit under this subsection from more
9than one tax year that is available to offset a liability the
10earliest credit arising under this subsection shall be applied
11first.
12    If, during any taxable year ending on or after December 31,
131986, the tax imposed by subsections (c) and (d) of this
14Section for which a taxpayer has claimed a credit under this
15subsection (i) is reduced, the amount of credit for such tax
16shall also be reduced. Such reduction shall be determined by
17recomputing the credit to take into account the reduced tax
18imposed by subsections (c) and (d). If any portion of the
19reduced amount of credit has been carried to a different
20taxable year, an amended return shall be filed for such taxable
21year to reduce the amount of credit claimed.
22    (j) Training expense credit. Beginning with tax years
23ending on or after December 31, 1986 and prior to December 31,
242003, a taxpayer shall be allowed a credit against the tax
25imposed by subsections (a) and (b) under this Section for all
26amounts paid or accrued, on behalf of all persons employed by

 

 

SB2239- 29 -LRB097 10193 HLH 50386 b

1the taxpayer in Illinois or Illinois residents employed outside
2of Illinois by a taxpayer, for educational or vocational
3training in semi-technical or technical fields or semi-skilled
4or skilled fields, which were deducted from gross income in the
5computation of taxable income. The credit against the tax
6imposed by subsections (a) and (b) shall be 1.6% of such
7training expenses. For partners, shareholders of subchapter S
8corporations, and owners of limited liability companies, if the
9liability company is treated as a partnership for purposes of
10federal and State income taxation, there shall be allowed a
11credit under this subsection (j) to be determined in accordance
12with the determination of income and distributive share of
13income under Sections 702 and 704 and subchapter S of the
14Internal Revenue Code.
15    Any credit allowed under this subsection which is unused in
16the year the credit is earned may be carried forward to each of
17the 5 taxable years following the year for which the credit is
18first computed until it is used. This credit shall be applied
19first to the earliest year for which there is a liability. If
20there is a credit under this subsection from more than one tax
21year that is available to offset a liability the earliest
22credit arising under this subsection shall be applied first. No
23carryforward credit may be claimed in any tax year ending on or
24after December 31, 2003.
25    (k) Research and development credit.
26    For tax years ending after July 1, 1990 and prior to

 

 

SB2239- 30 -LRB097 10193 HLH 50386 b

1December 31, 2003, and beginning again for tax years ending on
2or after December 31, 2004, and ending prior to January 1,
32011, a taxpayer shall be allowed a credit against the tax
4imposed by subsections (a) and (b) of this Section for
5increasing research activities in this State. The credit
6allowed against the tax imposed by subsections (a) and (b)
7shall be equal to 6 1/2% of the qualifying expenditures for
8increasing research activities in this State. For partners,
9shareholders of subchapter S corporations, and owners of
10limited liability companies, if the liability company is
11treated as a partnership for purposes of federal and State
12income taxation, there shall be allowed a credit under this
13subsection to be determined in accordance with the
14determination of income and distributive share of income under
15Sections 702 and 704 and subchapter S of the Internal Revenue
16Code.
17    For purposes of this subsection, "qualifying expenditures"
18means the qualifying expenditures as defined for the federal
19credit for increasing research activities which would be
20allowable under Section 41 of the Internal Revenue Code and
21which are conducted in this State, "qualifying expenditures for
22increasing research activities in this State" means the excess
23of qualifying expenditures for the taxable year in which
24incurred over qualifying expenditures for the base period,
25"qualifying expenditures for the base period" means the average
26of the qualifying expenditures for each year in the base

 

 

SB2239- 31 -LRB097 10193 HLH 50386 b

1period, and "base period" means the 3 taxable years immediately
2preceding the taxable year for which the determination is being
3made.
4    Any credit in excess of the tax liability for the taxable
5year may be carried forward. A taxpayer may elect to have the
6unused credit shown on its final completed return carried over
7as a credit against the tax liability for the following 5
8taxable years or until it has been fully used, whichever occurs
9first; provided that no credit earned in a tax year ending
10prior to December 31, 2003 may be carried forward to any year
11ending on or after December 31, 2003, and no credit may be
12carried forward to any taxable year ending on or after January
131, 2011.
14    If an unused credit is carried forward to a given year from
152 or more earlier years, that credit arising in the earliest
16year will be applied first against the tax liability for the
17given year. If a tax liability for the given year still
18remains, the credit from the next earliest year will then be
19applied, and so on, until all credits have been used or no tax
20liability for the given year remains. Any remaining unused
21credit or credits then will be carried forward to the next
22following year in which a tax liability is incurred, except
23that no credit can be carried forward to a year which is more
24than 5 years after the year in which the expense for which the
25credit is given was incurred.
26    No inference shall be drawn from this amendatory Act of the

 

 

SB2239- 32 -LRB097 10193 HLH 50386 b

191st General Assembly in construing this Section for taxable
2years beginning before January 1, 1999.
3    (l) Environmental Remediation Tax Credit.
4        (i) For tax years ending after December 31, 1997 and on
5    or before December 31, 2001, a taxpayer shall be allowed a
6    credit against the tax imposed by subsections (a) and (b)
7    of this Section for certain amounts paid for unreimbursed
8    eligible remediation costs, as specified in this
9    subsection. For purposes of this Section, "unreimbursed
10    eligible remediation costs" means costs approved by the
11    Illinois Environmental Protection Agency ("Agency") under
12    Section 58.14 of the Environmental Protection Act that were
13    paid in performing environmental remediation at a site for
14    which a No Further Remediation Letter was issued by the
15    Agency and recorded under Section 58.10 of the
16    Environmental Protection Act. The credit must be claimed
17    for the taxable year in which Agency approval of the
18    eligible remediation costs is granted. The credit is not
19    available to any taxpayer if the taxpayer or any related
20    party caused or contributed to, in any material respect, a
21    release of regulated substances on, in, or under the site
22    that was identified and addressed by the remedial action
23    pursuant to the Site Remediation Program of the
24    Environmental Protection Act. After the Pollution Control
25    Board rules are adopted pursuant to the Illinois
26    Administrative Procedure Act for the administration and

 

 

SB2239- 33 -LRB097 10193 HLH 50386 b

1    enforcement of Section 58.9 of the Environmental
2    Protection Act, determinations as to credit availability
3    for purposes of this Section shall be made consistent with
4    those rules. For purposes of this Section, "taxpayer"
5    includes a person whose tax attributes the taxpayer has
6    succeeded to under Section 381 of the Internal Revenue Code
7    and "related party" includes the persons disallowed a
8    deduction for losses by paragraphs (b), (c), and (f)(1) of
9    Section 267 of the Internal Revenue Code by virtue of being
10    a related taxpayer, as well as any of its partners. The
11    credit allowed against the tax imposed by subsections (a)
12    and (b) shall be equal to 25% of the unreimbursed eligible
13    remediation costs in excess of $100,000 per site, except
14    that the $100,000 threshold shall not apply to any site
15    contained in an enterprise zone as determined by the
16    Department of Commerce and Community Affairs (now
17    Department of Commerce and Economic Opportunity). The
18    total credit allowed shall not exceed $40,000 per year with
19    a maximum total of $150,000 per site. For partners and
20    shareholders of subchapter S corporations, there shall be
21    allowed a credit under this subsection to be determined in
22    accordance with the determination of income and
23    distributive share of income under Sections 702 and 704 and
24    subchapter S of the Internal Revenue Code.
25        (ii) A credit allowed under this subsection that is
26    unused in the year the credit is earned may be carried

 

 

SB2239- 34 -LRB097 10193 HLH 50386 b

1    forward to each of the 5 taxable years following the year
2    for which the credit is first earned until it is used. The
3    term "unused credit" does not include any amounts of
4    unreimbursed eligible remediation costs in excess of the
5    maximum credit per site authorized under paragraph (i).
6    This credit shall be applied first to the earliest year for
7    which there is a liability. If there is a credit under this
8    subsection from more than one tax year that is available to
9    offset a liability, the earliest credit arising under this
10    subsection shall be applied first. A credit allowed under
11    this subsection may be sold to a buyer as part of a sale of
12    all or part of the remediation site for which the credit
13    was granted. The purchaser of a remediation site and the
14    tax credit shall succeed to the unused credit and remaining
15    carry-forward period of the seller. To perfect the
16    transfer, the assignor shall record the transfer in the
17    chain of title for the site and provide written notice to
18    the Director of the Illinois Department of Revenue of the
19    assignor's intent to sell the remediation site and the
20    amount of the tax credit to be transferred as a portion of
21    the sale. In no event may a credit be transferred to any
22    taxpayer if the taxpayer or a related party would not be
23    eligible under the provisions of subsection (i).
24        (iii) For purposes of this Section, the term "site"
25    shall have the same meaning as under Section 58.2 of the
26    Environmental Protection Act.

 

 

SB2239- 35 -LRB097 10193 HLH 50386 b

1    (m) Education expense credit. Beginning with tax years
2ending after December 31, 1999, a taxpayer who is the custodian
3of one or more qualifying pupils shall be allowed a credit
4against the tax imposed by subsections (a) and (b) of this
5Section for qualified education expenses incurred on behalf of
6the qualifying pupils. The credit shall be equal to 25% of
7qualified education expenses, but in no event may the total
8credit under this subsection claimed by a family that is the
9custodian of qualifying pupils exceed $500. In no event shall a
10credit under this subsection reduce the taxpayer's liability
11under this Act to less than zero. This subsection is exempt
12from the provisions of Section 250 of this Act.
13    For purposes of this subsection:
14    "Qualifying pupils" means individuals who (i) are
15residents of the State of Illinois, (ii) are under the age of
1621 at the close of the school year for which a credit is
17sought, and (iii) during the school year for which a credit is
18sought were full-time pupils enrolled in a kindergarten through
19twelfth grade education program at any school, as defined in
20this subsection.
21    "Qualified education expense" means the amount incurred on
22behalf of a qualifying pupil in excess of $250 for tuition,
23book fees, and lab fees at the school in which the pupil is
24enrolled during the regular school year.
25    "School" means any public or nonpublic elementary or
26secondary school in Illinois that is in compliance with Title

 

 

SB2239- 36 -LRB097 10193 HLH 50386 b

1VI of the Civil Rights Act of 1964 and attendance at which
2satisfies the requirements of Section 26-1 of the School Code,
3except that nothing shall be construed to require a child to
4attend any particular public or nonpublic school to qualify for
5the credit under this Section.
6    "Custodian" means, with respect to qualifying pupils, an
7Illinois resident who is a parent, the parents, a legal
8guardian, or the legal guardians of the qualifying pupils.
9    (n) River Edge Redevelopment Zone site remediation tax
10credit.
11        (i) For tax years ending on or after December 31, 2006,
12    a taxpayer shall be allowed a credit against the tax
13    imposed by subsections (a) and (b) of this Section for
14    certain amounts paid for unreimbursed eligible remediation
15    costs, as specified in this subsection. For purposes of
16    this Section, "unreimbursed eligible remediation costs"
17    means costs approved by the Illinois Environmental
18    Protection Agency ("Agency") under Section 58.14a of the
19    Environmental Protection Act that were paid in performing
20    environmental remediation at a site within a River Edge
21    Redevelopment Zone for which a No Further Remediation
22    Letter was issued by the Agency and recorded under Section
23    58.10 of the Environmental Protection Act. The credit must
24    be claimed for the taxable year in which Agency approval of
25    the eligible remediation costs is granted. The credit is
26    not available to any taxpayer if the taxpayer or any

 

 

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1    related party caused or contributed to, in any material
2    respect, a release of regulated substances on, in, or under
3    the site that was identified and addressed by the remedial
4    action pursuant to the Site Remediation Program of the
5    Environmental Protection Act. Determinations as to credit
6    availability for purposes of this Section shall be made
7    consistent with rules adopted by the Pollution Control
8    Board pursuant to the Illinois Administrative Procedure
9    Act for the administration and enforcement of Section 58.9
10    of the Environmental Protection Act. For purposes of this
11    Section, "taxpayer" includes a person whose tax attributes
12    the taxpayer has succeeded to under Section 381 of the
13    Internal Revenue Code and "related party" includes the
14    persons disallowed a deduction for losses by paragraphs
15    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
16    Code by virtue of being a related taxpayer, as well as any
17    of its partners. The credit allowed against the tax imposed
18    by subsections (a) and (b) shall be equal to 25% of the
19    unreimbursed eligible remediation costs in excess of
20    $100,000 per site.
21        (ii) A credit allowed under this subsection that is
22    unused in the year the credit is earned may be carried
23    forward to each of the 5 taxable years following the year
24    for which the credit is first earned until it is used. This
25    credit shall be applied first to the earliest year for
26    which there is a liability. If there is a credit under this

 

 

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1    subsection from more than one tax year that is available to
2    offset a liability, the earliest credit arising under this
3    subsection shall be applied first. A credit allowed under
4    this subsection may be sold to a buyer as part of a sale of
5    all or part of the remediation site for which the credit
6    was granted. The purchaser of a remediation site and the
7    tax credit shall succeed to the unused credit and remaining
8    carry-forward period of the seller. To perfect the
9    transfer, the assignor shall record the transfer in the
10    chain of title for the site and provide written notice to
11    the Director of the Illinois Department of Revenue of the
12    assignor's intent to sell the remediation site and the
13    amount of the tax credit to be transferred as a portion of
14    the sale. In no event may a credit be transferred to any
15    taxpayer if the taxpayer or a related party would not be
16    eligible under the provisions of subsection (i).
17        (iii) For purposes of this Section, the term "site"
18    shall have the same meaning as under Section 58.2 of the
19    Environmental Protection Act.
20        (iv) This subsection is exempt from the provisions of
21    Section 250.
22(Source: P.A. 95-454, eff. 8-27-07; 96-115, eff. 7-31-09;
2396-116, eff. 7-31-09; 96-937, eff. 6-23-10; 96-1000, eff.
247-2-10; 96-1496, eff. 1-13-11.)
 
25    (35 ILCS 5/207)  (from Ch. 120, par. 2-207)

 

 

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1    Sec. 207. Net Losses.
2    (a) If after applying all of the (i) modifications provided
3for in paragraph (2) of Section 203(b), paragraph (2) of
4Section 203(c) and paragraph (2) of Section 203(d) and (ii) the
5allocation and apportionment provisions of Article 3 of this
6Act and subsection (c) of this Section, the taxpayer's net
7income results in a loss;
8        (1) for any taxable year ending prior to December 31,
9    1999, such loss shall be allowed as a carryover or
10    carryback deduction in the manner allowed under Section 172
11    of the Internal Revenue Code;
12        (2) for any taxable year ending on or after December
13    31, 1999 and prior to December 31, 2003, such loss shall be
14    allowed as a carryback to each of the 2 taxable years
15    preceding the taxable year of such loss and shall be a net
16    operating loss carryover to each of the 20 taxable years
17    following the taxable year of such loss; and
18        (3) for any taxable year ending on or after December
19    31, 2003, such loss shall be allowed as a net operating
20    loss carryover to each of the 12 taxable years following
21    the taxable year of such loss, except as provided in
22    subsection (d).
23    (a-5) Election to relinquish carryback and order of
24application of losses.
25            (A) For losses incurred in tax years ending prior
26        to December 31, 2003, the taxpayer may elect to

 

 

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1        relinquish the entire carryback period with respect to
2        such loss. Such election shall be made in the form and
3        manner prescribed by the Department and shall be made
4        by the due date (including extensions of time) for
5        filing the taxpayer's return for the taxable year in
6        which such loss is incurred, and such election, once
7        made, shall be irrevocable.
8            (B) The entire amount of such loss shall be carried
9        to the earliest taxable year to which such loss may be
10        carried. The amount of such loss which shall be carried
11        to each of the other taxable years shall be the excess,
12        if any, of the amount of such loss over the sum of the
13        deductions for carryback or carryover of such loss
14        allowable for each of the prior taxable years to which
15        such loss may be carried.
16    (b) Any loss determined under subsection (a) of this
17Section must be carried back or carried forward in the same
18manner for purposes of subsections (a) and (b) of Section 201
19of this Act as for purposes of subsections (c) and (d) of
20Section 201 of this Act.
21    (c) Notwithstanding any other provision of this Act, for
22each taxable year ending on or after December 31, 2008, for
23purposes of computing the loss for the taxable year under
24subsection (a) of this Section and the deduction taken into
25account for the taxable year for a net operating loss carryover
26under paragraphs (1), (2), and (3) of subsection (a) of this

 

 

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1Section, the loss and net operating loss carryover shall be
2reduced in an amount equal to the reduction to the net
3operating loss and net operating loss carryover to the taxable
4year, respectively, required under Section 108(b)(2)(A) of the
5Internal Revenue Code, multiplied by a fraction, the numerator
6of which is the amount of discharge of indebtedness income that
7is excluded from gross income for the taxable year (but only if
8the taxable year ends on or after December 31, 2008) under
9Section 108(a) of the Internal Revenue Code and that would have
10been allocated and apportioned to this State under Article 3 of
11this Act but for that exclusion, and the denominator of which
12is the total amount of discharge of indebtedness income
13excluded from gross income under Section 108(a) of the Internal
14Revenue Code for the taxable year. The reduction required under
15this subsection (c) shall be made after the determination of
16Illinois net income for the taxable year in which the
17indebtedness is discharged.
18    (d) In the case of a corporation (other than a Subchapter S
19corporation), no carryover deduction shall be allowed under
20this Section for any taxable year ending after December 31,
212010 and prior to December 31, 2014; provided that, for
22purposes of determining the taxable years to which a net loss
23may be carried under subsection (a) of this Section, no taxable
24year for which a deduction is disallowed under this subsection
25shall be counted.
26(Source: P.A. 95-233, eff. 8-16-07; 96-1496, eff. 1-13-11.)
 

 

 

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1    (35 ILCS 5/804)  (from Ch. 120, par. 8-804)
2    Sec. 804. Failure to Pay Estimated Tax.
3    (a) In general. In case of any underpayment of estimated
4tax by a taxpayer, except as provided in subsection (d) or (e),
5the taxpayer shall be liable to a penalty in an amount
6determined at the rate prescribed by Section 3-3 of the Uniform
7Penalty and Interest Act upon the amount of the underpayment
8(determined under subsection (b)) for each required
9installment.
10    (b) Amount of underpayment. For purposes of subsection (a),
11the amount of the underpayment shall be the excess of:
12        (1) the amount of the installment which would be
13    required to be paid under subsection (c), over
14        (2) the amount, if any, of the installment paid on or
15    before the last date prescribed for payment.
16    (c) Amount of Required Installments.
17        (1) Amount.
18            (A) In General. Except as provided in paragraph
19        (2), the amount of any required installment shall be
20        25% of the required annual payment.
21            (B) Required Annual Payment. For purposes of
22        subparagraph (A), the term "required annual payment"
23        means the lesser of
24                (i) 90% of the tax shown on the return for the
25            taxable year, or if no return is filed, 90% of the

 

 

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1            tax for such year, or
2                (ii) for installments due prior to February 1,
3            2011, and after January 31, 2012, 100% of the tax
4            shown on the return of the taxpayer for the
5            preceding taxable year if a return showing a
6            liability for tax was filed by the taxpayer for the
7            preceding taxable year and such preceding year was
8            a taxable year of 12 months; or
9                (iii) for installments due after January 31,
10            2011, and prior to February 1, 2012, 150% of the
11            tax shown on the return of the taxpayer for the
12            preceding taxable year if a return showing a
13            liability for tax was filed by the taxpayer for the
14            preceding taxable year and such preceding year was
15            a taxable year of 12 months.
16        (2) Lower Required Installment where Annualized Income
17    Installment is Less Than Amount Determined Under Paragraph
18    (1).
19            (A) In General. In the case of any required
20        installment if a taxpayer establishes that the
21        annualized income installment is less than the amount
22        determined under paragraph (1),
23                (i) the amount of such required installment
24            shall be the annualized income installment, and
25                (ii) any reduction in a required installment
26            resulting from the application of this

 

 

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1            subparagraph shall be recaptured by increasing the
2            amount of the next required installment determined
3            under paragraph (1) by the amount of such
4            reduction, and by increasing subsequent required
5            installments to the extent that the reduction has
6            not previously been recaptured under this clause.
7            (B) Determination of Annualized Income
8        Installment. In the case of any required installment,
9        the annualized income installment is the excess, if
10        any, of
11                (i) an amount equal to the applicable
12            percentage of the tax for the taxable year computed
13            by placing on an annualized basis the net income
14            for months in the taxable year ending before the
15            due date for the installment, over
16                (ii) the aggregate amount of any prior
17            required installments for the taxable year.
18            (C) Applicable Percentage.
19        In the case of the followingThe applicable
20        required installments:percentage is:
21        1st ...............................22.5%
22        2nd ...............................45%
23        3rd ...............................67.5%
24        4th ...............................90%
25            (D) Annualized Net Income; Individuals. For
26        individuals, net income shall be placed on an

 

 

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1        annualized basis by:
2                (i) multiplying by 12, or in the case of a
3            taxable year of less than 12 months, by the number
4            of months in the taxable year, the net income
5            computed without regard to the standard exemption
6            for the months in the taxable year ending before
7            the month in which the installment is required to
8            be paid;
9                (ii) dividing the resulting amount by the
10            number of months in the taxable year ending before
11            the month in which such installment date falls; and
12                (iii) deducting from such amount the standard
13            exemption allowable for the taxable year, such
14            standard exemption being determined as of the last
15            date prescribed for payment of the installment.
16            (E) Annualized Net Income; Corporations. For
17        corporations, net income shall be placed on an
18        annualized basis by multiplying by 12 the taxable
19        income
20                (i) for the first 3 months of the taxable year,
21            in the case of the installment required to be paid
22            in the 4th month,
23                (ii) for the first 3 months or for the first 5
24            months of the taxable year, in the case of the
25            installment required to be paid in the 6th month,
26                (iii) for the first 6 months or for the first 8

 

 

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1            months of the taxable year, in the case of the
2            installment required to be paid in the 9th month,
3            and
4                (iv) for the first 9 months or for the first 11
5            months of the taxable year, in the case of the
6            installment required to be paid in the 12th month
7            of the taxable year,
8        then dividing the resulting amount by the number of
9        months in the taxable year (3, 5, 6, 8, 9, or 11 as the
10        case may be).
11    (d) Exceptions. Notwithstanding the provisions of the
12preceding subsections, the penalty imposed by subsection (a)
13shall not be imposed if the taxpayer was not required to file
14an Illinois income tax return for the preceding taxable year,
15or, for individuals, if the taxpayer had no tax liability for
16the preceding taxable year and such year was a taxable year of
1712 months. The penalty imposed by subsection (a) shall also not
18be imposed on any underpayments of estimated tax due before the
19effective date of this amendatory Act of 1998 which
20underpayments are solely attributable to the change in
21apportionment from subsection (a) to subsection (h) of Section
22304. The provisions of this amendatory Act of 1998 apply to tax
23years ending on or after December 31, 1998.
24    (e) The penalty imposed for underpayment of estimated tax
25by subsection (a) of this Section shall not be imposed to the
26extent that the Director or his or her designate determines,

 

 

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1pursuant to Section 3-8 of the Uniform Penalty and Interest Act
2that the penalty should not be imposed.
3    (f) Definition of tax. For purposes of subsections (b) and
4(c), the term "tax" means the excess of the tax imposed under
5Article 2 of this Act, over the amounts credited against such
6tax under Sections 601(b) (3) and (4).
7    (g) Application of Section in case of tax withheld under
8Article 7. For purposes of applying this Section:
9        (1) in the case of an individual, tax withheld from
10    compensation for the taxable year shall be deemed a payment
11    of estimated tax, and an equal part of such amount shall be
12    deemed paid on each installment date for such taxable year,
13    unless the taxpayer establishes the dates on which all
14    amounts were actually withheld, in which case the amounts
15    so withheld shall be deemed payments of estimated tax on
16    the dates on which such amounts were actually withheld;
17        (2) amounts timely paid by a partnership, Subchapter S
18    corporation, or trust on behalf of a partner, shareholder,
19    or beneficiary pursuant to subsection (f) of Section 502 or
20    Section 709.5 and claimed as a payment of estimated tax
21    shall be deemed a payment of estimated tax made on the last
22    day of the taxable year of the partnership, Subchapter S
23    corporation, or trust for which the income from the
24    withholding is made was computed; and
25        (3) all other amounts pursuant to Article 7 shall be
26    deemed a payment of estimated tax on the date the payment

 

 

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1    is made to the taxpayer of the amount from which the tax is
2    withheld.
3    (g-5) Amounts withheld under the State Salary and Annuity
4Withholding Act. An individual who has amounts withheld under
5paragraph (10) of Section 4 of the State Salary and Annuity
6Withholding Act may elect to have those amounts treated as
7payments of estimated tax made on the dates on which those
8amounts are actually withheld.
9    (i) Short taxable year. The application of this Section to
10taxable years of less than 12 months shall be in accordance
11with regulations prescribed by the Department.
12    The changes in this Section made by Public Act 84-127 shall
13apply to taxable years ending on or after January 1, 1986.
14(Source: P.A. 95-233, eff. 8-16-07; 96-1496, eff. 1-13-11.)
 
15    (35 ILCS 5/901)  (from Ch. 120, par. 9-901)
16    Sec. 901. Collection Authority.
17    (a) In general.
18    The Department shall collect the taxes imposed by this Act.
19The Department shall collect certified past due child support
20amounts under Section 2505-650 of the Department of Revenue Law
21(20 ILCS 2505/2505-650). Except as provided in subsections (c)
22and , (e), (f), and (g) of this Section, money collected
23pursuant to subsections (a) and (b) of Section 201 of this Act
24shall be paid into the General Revenue Fund in the State
25treasury; money collected pursuant to subsections (c) and (d)

 

 

SB2239- 49 -LRB097 10193 HLH 50386 b

1of Section 201 of this Act shall be paid into the Personal
2Property Tax Replacement Fund, a special fund in the State
3Treasury; and money collected under Section 2505-650 of the
4Department of Revenue Law (20 ILCS 2505/2505-650) shall be paid
5into the Child Support Enforcement Trust Fund, a special fund
6outside the State Treasury, or to the State Disbursement Unit
7established under Section 10-26 of the Illinois Public Aid
8Code, as directed by the Department of Healthcare and Family
9Services.
10    (b) Local Government Distributive Fund.
11    Beginning August 1, 1969, and continuing through June 30,
121994, the Treasurer shall transfer each month from the General
13Revenue Fund to a special fund in the State treasury, to be
14known as the "Local Government Distributive Fund", an amount
15equal to 1/12 of the net revenue realized from the tax imposed
16by subsections (a) and (b) of Section 201 of this Act during
17the preceding month. Beginning July 1, 1994, and continuing
18through June 30, 1995, the Treasurer shall transfer each month
19from the General Revenue Fund to the Local Government
20Distributive Fund an amount equal to 1/11 of the net revenue
21realized from the tax imposed by subsections (a) and (b) of
22Section 201 of this Act during the preceding month. Beginning
23July 1, 1995 and continuing through January 31, 2011, the
24Treasurer shall transfer each month from the General Revenue
25Fund to the Local Government Distributive Fund an amount equal
26to the net of (i) 1/10 of the net revenue realized from the tax

 

 

SB2239- 50 -LRB097 10193 HLH 50386 b

1imposed by subsections (a) and (b) of Section 201 of the
2Illinois Income Tax Act during the preceding month (ii) minus,
3beginning July 1, 2003 and ending June 30, 2004, $6,666,666,
4and beginning July 1, 2004, zero. Beginning February 1, 2011,
5and continuing through January 31, 2015, the Treasurer shall
6transfer each month from the General Revenue Fund to the Local
7Government Distributive Fund an amount equal to the sum of (i)
86% (10% of the ratio of the 3% individual income tax rate prior
9to 2011 to the 5% individual income tax rate after 2010) of the
10net revenue realized from the tax imposed by subsections (a)
11and (b) of Section 201 of this Act upon individuals, trusts,
12and estates during the preceding month and (ii) 6.86% (10% of
13the ratio of the 4.8% corporate income tax rate prior to 2011
14to the 7% corporate income tax rate after 2010) of the net
15revenue realized from the tax imposed by subsections (a) and
16(b) of Section 201 of this Act upon corporations during the
17preceding month. Beginning February 1, 2015 and continuing
18through January 31, 2025, the Treasurer shall transfer each
19month from the General Revenue Fund to the Local Government
20Distributive Fund an amount equal to the sum of (i) 8% (10% of
21the ratio of the 3% individual income tax rate prior to 2011 to
22the 3.75% individual income tax rate after 2014) of the net
23revenue realized from the tax imposed by subsections (a) and
24(b) of Section 201 of this Act upon individuals, trusts, and
25estates during the preceding month and (ii) 9.14% (10% of the
26ratio of the 4.8% corporate income tax rate prior to 2011 to

 

 

SB2239- 51 -LRB097 10193 HLH 50386 b

1the 5.25% corporate income tax rate after 2014) of the net
2revenue realized from the tax imposed by subsections (a) and
3(b) of Section 201 of this Act upon corporations during the
4preceding month. Beginning February 1, 2025, the Treasurer
5shall transfer each month from the General Revenue Fund to the
6Local Government Distributive Fund an amount equal to the sum
7of (i) 9.23% (10% of the ratio of the 3% individual income tax
8rate prior to 2011 to the 3.25% individual income tax rate
9after 2024) of the net revenue realized from the tax imposed by
10subsections (a) and (b) of Section 201 of this Act upon
11individuals, trusts, and estates during the preceding month and
12(ii) 10% of the net revenue realized from the tax imposed by
13subsections (a) and (b) of Section 201 of this Act upon
14corporations during the preceding month. Net revenue realized
15for a month shall be defined as the revenue from the tax
16imposed by subsections (a) and (b) of Section 201 of this Act
17which is deposited in the General Revenue Fund, the Education
18Assistance Fund, and the Income Tax Surcharge Local Government
19Distributive Fund, the Fund for the Advancement of Education,
20and the Commitment to Human Services Fund during the month
21minus the amount paid out of the General Revenue Fund in State
22warrants during that same month as refunds to taxpayers for
23overpayment of liability under the tax imposed by subsections
24(a) and (b) of Section 201 of this Act.
25    (c) Deposits Into Income Tax Refund Fund.
26        (1) Beginning on January 1, 1989 and thereafter, the

 

 

SB2239- 52 -LRB097 10193 HLH 50386 b

1    Department shall deposit a percentage of the amounts
2    collected pursuant to subsections (a) and (b)(1), (2), and
3    (3), of Section 201 of this Act into a fund in the State
4    treasury known as the Income Tax Refund Fund. The
5    Department shall deposit 6% of such amounts during the
6    period beginning January 1, 1989 and ending on June 30,
7    1989. Beginning with State fiscal year 1990 and for each
8    fiscal year thereafter, the percentage deposited into the
9    Income Tax Refund Fund during a fiscal year shall be the
10    Annual Percentage. For fiscal years 1999 through 2001, the
11    Annual Percentage shall be 7.1%. For fiscal year 2003, the
12    Annual Percentage shall be 8%. For fiscal year 2004, the
13    Annual Percentage shall be 11.7%. Upon the effective date
14    of this amendatory Act of the 93rd General Assembly, the
15    Annual Percentage shall be 10% for fiscal year 2005. For
16    fiscal year 2006, the Annual Percentage shall be 9.75%. For
17    fiscal year 2007, the Annual Percentage shall be 9.75%. For
18    fiscal year 2008, the Annual Percentage shall be 7.75%. For
19    fiscal year 2009, the Annual Percentage shall be 9.75%. For
20    fiscal year 2010, the Annual Percentage shall be 9.75%. For
21    fiscal year 2011, the Annual Percentage shall be 8.75%. For
22    all other fiscal years, the Annual Percentage shall be
23    calculated as a fraction, the numerator of which shall be
24    the amount of refunds approved for payment by the
25    Department during the preceding fiscal year as a result of
26    overpayment of tax liability under subsections (a) and

 

 

SB2239- 53 -LRB097 10193 HLH 50386 b

1    (b)(1), (2), and (3) of Section 201 of this Act plus the
2    amount of such refunds remaining approved but unpaid at the
3    end of the preceding fiscal year, minus the amounts
4    transferred into the Income Tax Refund Fund from the
5    Tobacco Settlement Recovery Fund, and the denominator of
6    which shall be the amounts which will be collected pursuant
7    to subsections (a) and (b)(1), (2), and (3) of Section 201
8    of this Act during the preceding fiscal year; except that
9    in State fiscal year 2002, the Annual Percentage shall in
10    no event exceed 7.6%. The Director of Revenue shall certify
11    the Annual Percentage to the Comptroller on the last
12    business day of the fiscal year immediately preceding the
13    fiscal year for which it is to be effective.
14        (2) Beginning on January 1, 1989 and thereafter, the
15    Department shall deposit a percentage of the amounts
16    collected pursuant to subsections (a) and (b)(6), (7), and
17    (8), (c) and (d) of Section 201 of this Act into a fund in
18    the State treasury known as the Income Tax Refund Fund. The
19    Department shall deposit 18% of such amounts during the
20    period beginning January 1, 1989 and ending on June 30,
21    1989. Beginning with State fiscal year 1990 and for each
22    fiscal year thereafter, the percentage deposited into the
23    Income Tax Refund Fund during a fiscal year shall be the
24    Annual Percentage. For fiscal years 1999, 2000, and 2001,
25    the Annual Percentage shall be 19%. For fiscal year 2003,
26    the Annual Percentage shall be 27%. For fiscal year 2004,

 

 

SB2239- 54 -LRB097 10193 HLH 50386 b

1    the Annual Percentage shall be 32%. Upon the effective date
2    of this amendatory Act of the 93rd General Assembly, the
3    Annual Percentage shall be 24% for fiscal year 2005. For
4    fiscal year 2006, the Annual Percentage shall be 20%. For
5    fiscal year 2007, the Annual Percentage shall be 17.5%. For
6    fiscal year 2008, the Annual Percentage shall be 15.5%. For
7    fiscal year 2009, the Annual Percentage shall be 17.5%. For
8    fiscal year 2010, the Annual Percentage shall be 17.5%. For
9    fiscal year 2011, the Annual Percentage shall be 17.5%. For
10    all other fiscal years, the Annual Percentage shall be
11    calculated as a fraction, the numerator of which shall be
12    the amount of refunds approved for payment by the
13    Department during the preceding fiscal year as a result of
14    overpayment of tax liability under subsections (a) and
15    (b)(6), (7), and (8), (c) and (d) of Section 201 of this
16    Act plus the amount of such refunds remaining approved but
17    unpaid at the end of the preceding fiscal year, and the
18    denominator of which shall be the amounts which will be
19    collected pursuant to subsections (a) and (b)(6), (7), and
20    (8), (c) and (d) of Section 201 of this Act during the
21    preceding fiscal year; except that in State fiscal year
22    2002, the Annual Percentage shall in no event exceed 23%.
23    The Director of Revenue shall certify the Annual Percentage
24    to the Comptroller on the last business day of the fiscal
25    year immediately preceding the fiscal year for which it is
26    to be effective.

 

 

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1        (3) The Comptroller shall order transferred and the
2    Treasurer shall transfer from the Tobacco Settlement
3    Recovery Fund to the Income Tax Refund Fund (i) $35,000,000
4    in January, 2001, (ii) $35,000,000 in January, 2002, and
5    (iii) $35,000,000 in January, 2003.
6    (d) Expenditures from Income Tax Refund Fund.
7        (1) Beginning January 1, 1989, money in the Income Tax
8    Refund Fund shall be expended exclusively for the purpose
9    of paying refunds resulting from overpayment of tax
10    liability under Section 201 of this Act, for paying rebates
11    under Section 208.1 in the event that the amounts in the
12    Homeowners' Tax Relief Fund are insufficient for that
13    purpose, and for making transfers pursuant to this
14    subsection (d).
15        (2) The Director shall order payment of refunds
16    resulting from overpayment of tax liability under Section
17    201 of this Act from the Income Tax Refund Fund only to the
18    extent that amounts collected pursuant to Section 201 of
19    this Act and transfers pursuant to this subsection (d) and
20    item (3) of subsection (c) have been deposited and retained
21    in the Fund.
22        (3) As soon as possible after the end of each fiscal
23    year, the Director shall order transferred and the State
24    Treasurer and State Comptroller shall transfer from the
25    Income Tax Refund Fund to the Personal Property Tax
26    Replacement Fund an amount, certified by the Director to

 

 

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1    the Comptroller, equal to the excess of the amount
2    collected pursuant to subsections (c) and (d) of Section
3    201 of this Act deposited into the Income Tax Refund Fund
4    during the fiscal year over the amount of refunds resulting
5    from overpayment of tax liability under subsections (c) and
6    (d) of Section 201 of this Act paid from the Income Tax
7    Refund Fund during the fiscal year.
8        (4) As soon as possible after the end of each fiscal
9    year, the Director shall order transferred and the State
10    Treasurer and State Comptroller shall transfer from the
11    Personal Property Tax Replacement Fund to the Income Tax
12    Refund Fund an amount, certified by the Director to the
13    Comptroller, equal to the excess of the amount of refunds
14    resulting from overpayment of tax liability under
15    subsections (c) and (d) of Section 201 of this Act paid
16    from the Income Tax Refund Fund during the fiscal year over
17    the amount collected pursuant to subsections (c) and (d) of
18    Section 201 of this Act deposited into the Income Tax
19    Refund Fund during the fiscal year.
20        (4.5) As soon as possible after the end of fiscal year
21    1999 and of each fiscal year thereafter, the Director shall
22    order transferred and the State Treasurer and State
23    Comptroller shall transfer from the Income Tax Refund Fund
24    to the General Revenue Fund any surplus remaining in the
25    Income Tax Refund Fund as of the end of such fiscal year;
26    excluding for fiscal years 2000, 2001, and 2002 amounts

 

 

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1    attributable to transfers under item (3) of subsection (c)
2    less refunds resulting from the earned income tax credit.
3        (5) This Act shall constitute an irrevocable and
4    continuing appropriation from the Income Tax Refund Fund
5    for the purpose of paying refunds upon the order of the
6    Director in accordance with the provisions of this Section.
7    (e) Deposits into the Education Assistance Fund and the
8Income Tax Surcharge Local Government Distributive Fund.
9    On July 1, 1991, and thereafter, of the amounts collected
10pursuant to subsections (a) and (b) of Section 201 of this Act,
11minus deposits into the Income Tax Refund Fund, the Department
12shall deposit 7.3% into the Education Assistance Fund in the
13State Treasury. Beginning July 1, 1991, and continuing through
14January 31, 1993, of the amounts collected pursuant to
15subsections (a) and (b) of Section 201 of the Illinois Income
16Tax Act, minus deposits into the Income Tax Refund Fund, the
17Department shall deposit 3.0% into the Income Tax Surcharge
18Local Government Distributive Fund in the State Treasury.
19Beginning February 1, 1993 and continuing through June 30,
201993, of the amounts collected pursuant to subsections (a) and
21(b) of Section 201 of the Illinois Income Tax Act, minus
22deposits into the Income Tax Refund Fund, the Department shall
23deposit 4.4% into the Income Tax Surcharge Local Government
24Distributive Fund in the State Treasury. Beginning July 1,
251993, and continuing through June 30, 1994, of the amounts
26collected under subsections (a) and (b) of Section 201 of this

 

 

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1Act, minus deposits into the Income Tax Refund Fund, the
2Department shall deposit 1.475% into the Income Tax Surcharge
3Local Government Distributive Fund in the State Treasury.
4    (f) (Blank). Deposits into the Fund for the Advancement of
5Education. Beginning February 1, 2015, the Department shall
6deposit the following portions of the revenue realized from the
7tax imposed upon individuals, trusts, and estates by
8subsections (a) and (b) of Section 201 of this Act during the
9preceding month, minus deposits into the Income Tax Refund
10Fund, into the Fund for the Advancement of Education:
11        (1) beginning February 1, 2015, and prior to February
12    1, 2025, 1/30; and
13        (2) beginning February 1, 2025, 1/26.
14    If the rate of tax imposed by subsection (a) and (b) of
15Section 201 is reduced pursuant to Section 201.5 of this Act,
16the Department shall not make the deposits required by this
17subsection (f) on or after the effective date of the reduction.
18    (g) (Blank). Deposits into the Commitment to Human Services
19Fund. Beginning February 1, 2015, the Department shall deposit
20the following portions of the revenue realized from the tax
21imposed upon individuals, trusts, and estates by subsections
22(a) and (b) of Section 201 of this Act during the preceding
23month, minus deposits into the Income Tax Refund Fund, into the
24Commitment to Human Services Fund:
25        (1) beginning February 1, 2015, and prior to February
26    1, 2025, 1/30; and

 

 

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1        (2) beginning February 1, 2025, 1/26.
2    If the rate of tax imposed by subsection (a) and (b) of
3Section 201 is reduced pursuant to Section 201.5 of this Act,
4the Department shall not make the deposits required by this
5subsection (g) on or after the effective date of the reduction.
6(Source: P.A. 95-707, eff. 1-11-08; 95-744, eff. 7-18-08;
796-45, eff. 7-15-09; 96-328, eff. 8-11-09; 96-959, eff. 7-1-10;
896-1496, eff. 1-13-11.)
 
9    Section 15. The Illinois Estate and Generation-Skipping
10Transfer Tax Act is amended by changing Section 2 as follows:
 
11    (35 ILCS 405/2)  (from Ch. 120, par. 405A-2)
12    Sec. 2. Definitions.
13    "Federal estate tax" means the tax due to the United States
14with respect to a taxable transfer under Chapter 11 of the
15Internal Revenue Code.
16    "Federal generation-skipping transfer tax" means the tax
17due to the United States with respect to a taxable transfer
18under Chapter 13 of the Internal Revenue Code.
19    "Federal return" means the federal estate tax return with
20respect to the federal estate tax and means the federal
21generation-skipping transfer tax return with respect to the
22federal generation-skipping transfer tax.
23    "Federal transfer tax" means the federal estate tax or the
24federal generation-skipping transfer tax.

 

 

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1    "Illinois estate tax" means the tax due to this State with
2respect to a taxable transfer.
3    "Illinois generation-skipping transfer tax" means the tax
4due to this State with respect to a taxable transfer that gives
5rise to a federal generation-skipping transfer tax.
6    "Illinois transfer tax" means the Illinois estate tax or
7the Illinois generation-skipping transfer tax.
8    "Internal Revenue Code" means, unless otherwise provided,
9the Internal Revenue Code of 1986, as amended from time to
10time.
11    "Non-resident trust" means a trust that is not a resident
12of this State for purposes of the Illinois Income Tax Act, as
13amended from time to time.
14    "Person" means and includes any individual, trust, estate,
15partnership, association, company or corporation.
16    "Qualified heir" means a qualified heir as defined in
17Section 2032A(e)(1) of the Internal Revenue Code.
18    "Resident trust" means a trust that is a resident of this
19State for purposes of the Illinois Income Tax Act, as amended
20from time to time.
21    "State" means any state, territory or possession of the
22United States and the District of Columbia.
23    "State tax credit" means:
24    (a) For persons dying on or after January 1, 2003 and
25through December 31, 2005, an amount equal to the full credit
26calculable under Section 2011 or Section 2604 of the Internal

 

 

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1Revenue Code as the credit would have been computed and allowed
2under the Internal Revenue Code as in effect on December 31,
32001, without the reduction in the State Death Tax Credit as
4provided in Section 2011(b)(2) or the termination of the State
5Death Tax Credit as provided in Section 2011(f) as enacted by
6the Economic Growth and Tax Relief Reconciliation Act of 2001,
7but recognizing the increased applicable exclusion amount
8through December 31, 2005.
9    (b) For persons dying after December 31, 2005 and on or
10before December 31, 2009, and for persons dying after December
1131, 2010, an amount equal to the full credit calculable under
12Section 2011 or 2604 of the Internal Revenue Code as the credit
13would have been computed and allowed under the Internal Revenue
14Code as in effect on December 31, 2001, without the reduction
15in the State Death Tax Credit as provided in Section 2011(b)(2)
16or the termination of the State Death Tax Credit as provided in
17Section 2011(f) as enacted by the Economic Growth and Tax
18Relief Reconciliation Act of 2001, but recognizing the
19exclusion amount of only $2,000,000, and with reduction to the
20adjusted taxable estate for any qualified terminable interest
21property election as defined in subsection (b-1) of this
22Section.
23    (b-1) The person required to file the Illinois return may
24elect on a timely filed Illinois return a marital deduction for
25qualified terminable interest property under Section
262056(b)(7) of the Internal Revenue Code for purposes of the

 

 

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1Illinois estate tax that is separate and independent of any
2qualified terminable interest property election for federal
3estate tax purposes. For purposes of the Illinois estate tax,
4the inclusion of property in the gross estate of a surviving
5spouse is the same as under Section 2044 of the Internal
6Revenue Code.
7    In the case of any trust for which a State or federal
8qualified terminable interest property election is made, the
9trustee may not retain non-income producing assets for more
10than a reasonable amount of time without the consent of the
11surviving spouse.
12    (c) For persons dying after December 31, 2009, the credit
13for state tax allowable under Section 2011 or Section 2604 of
14the Internal Revenue Code.
15    "Taxable transfer" means an event that gives rise to a
16state tax credit, including any credit as a result of the
17imposition of an additional tax under Section 2032A(c) of the
18Internal Revenue Code.
19    "Transferee" means a transferee within the meaning of
20Section 2603(a)(1) and Section 6901(h) of the Internal Revenue
21Code.
22    "Transferred property" means:
23        (1) With respect to a taxable transfer occurring at the
24    death of an individual, the deceased individual's gross
25    estate as defined in Section 2031 of the Internal Revenue
26    Code.

 

 

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1        (2) With respect to a taxable transfer occurring as a
2    result of a taxable termination as defined in Section
3    2612(a) of the Internal Revenue Code, the taxable amount
4    determined under Section 2622(a) of the Internal Revenue
5    Code.
6        (3) With respect to a taxable transfer occurring as a
7    result of a taxable distribution as defined in Section
8    2612(b) of the Internal Revenue Code, the taxable amount
9    determined under Section 2621(a) of the Internal Revenue
10    Code.
11        (4) With respect to an event which causes the
12    imposition of an additional estate tax under Section
13    2032A(c) of the Internal Revenue Code, the qualified real
14    property that was disposed of or which ceased to be used
15    for the qualified use, within the meaning of Section
16    2032A(c)(1) of the Internal Revenue Code.
17    "Trust" includes a trust as defined in Section 2652(b)(1)
18of the Internal Revenue Code.
19(Source: P.A. 96-789, eff. 9-8-09; 96-1496, eff. 1-13-11.)
 
20    (30 ILCS 5/3-20 rep.)
21    Section 20. The Illinois State Auditing Act is amended by
22repealing Section 3-20.
 
23    (30 ILCS 105/5.787 rep.)
24    (30 ILCS 105/6z-85 rep.)

 

 

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1    (30 ILCS 105/6z-86 rep.)
2    (30 ILCS 105/25.2 rep.)
3    Section 25. The State Finance Act is amended by repealing
4Sections 5.787, 6z-85, 6z-86, and 25.2.
 
5    (35 ILCS 5/202.5 rep.)
6    Section 30. The Illinois Income Tax Act is amended by
7repealing Section 202.5.
 
8    Section 99. Effective date. This Act takes effect upon
9becoming law.