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Full Text of SB0110  97th General Assembly




State of Illinois
2011 and 2012


Introduced 1/27/2011, by Sen. Kirk W. Dillard


35 ILCS 5/207  from Ch. 120, par. 2-207

    Amends the Illinois Income Tax Act. Restores a net loss carryover deduction for taxable years ending after December 31, 2010 and prior to December 31, 2014. Effective immediately.

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SB0110LRB097 05958 HLH 46027 b

1    AN ACT concerning revenue.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Income Tax Act is amended by
5changing Section 207 as follows:
6    (35 ILCS 5/207)  (from Ch. 120, par. 2-207)
7    Sec. 207. Net Losses.
8    (a) If after applying all of the (i) modifications provided
9for in paragraph (2) of Section 203(b), paragraph (2) of
10Section 203(c) and paragraph (2) of Section 203(d) and (ii) the
11allocation and apportionment provisions of Article 3 of this
12Act and subsection (c) of this Section, the taxpayer's net
13income results in a loss;
14        (1) for any taxable year ending prior to December 31,
15    1999, such loss shall be allowed as a carryover or
16    carryback deduction in the manner allowed under Section 172
17    of the Internal Revenue Code;
18        (2) for any taxable year ending on or after December
19    31, 1999 and prior to December 31, 2003, such loss shall be
20    allowed as a carryback to each of the 2 taxable years
21    preceding the taxable year of such loss and shall be a net
22    operating loss carryover to each of the 20 taxable years
23    following the taxable year of such loss; and



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1        (3) for any taxable year ending on or after December
2    31, 2003, such loss shall be allowed as a net operating
3    loss carryover to each of the 12 taxable years following
4    the taxable year of such loss, except as provided in
5    subsection (d).
6    (a-5) Election to relinquish carryback and order of
7application of losses.
8            (A) For losses incurred in tax years ending prior
9        to December 31, 2003, the taxpayer may elect to
10        relinquish the entire carryback period with respect to
11        such loss. Such election shall be made in the form and
12        manner prescribed by the Department and shall be made
13        by the due date (including extensions of time) for
14        filing the taxpayer's return for the taxable year in
15        which such loss is incurred, and such election, once
16        made, shall be irrevocable.
17            (B) The entire amount of such loss shall be carried
18        to the earliest taxable year to which such loss may be
19        carried. The amount of such loss which shall be carried
20        to each of the other taxable years shall be the excess,
21        if any, of the amount of such loss over the sum of the
22        deductions for carryback or carryover of such loss
23        allowable for each of the prior taxable years to which
24        such loss may be carried.
25    (b) Any loss determined under subsection (a) of this
26Section must be carried back or carried forward in the same



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1manner for purposes of subsections (a) and (b) of Section 201
2of this Act as for purposes of subsections (c) and (d) of
3Section 201 of this Act.
4    (c) Notwithstanding any other provision of this Act, for
5each taxable year ending on or after December 31, 2008, for
6purposes of computing the loss for the taxable year under
7subsection (a) of this Section and the deduction taken into
8account for the taxable year for a net operating loss carryover
9under paragraphs (1), (2), and (3) of subsection (a) of this
10Section, the loss and net operating loss carryover shall be
11reduced in an amount equal to the reduction to the net
12operating loss and net operating loss carryover to the taxable
13year, respectively, required under Section 108(b)(2)(A) of the
14Internal Revenue Code, multiplied by a fraction, the numerator
15of which is the amount of discharge of indebtedness income that
16is excluded from gross income for the taxable year (but only if
17the taxable year ends on or after December 31, 2008) under
18Section 108(a) of the Internal Revenue Code and that would have
19been allocated and apportioned to this State under Article 3 of
20this Act but for that exclusion, and the denominator of which
21is the total amount of discharge of indebtedness income
22excluded from gross income under Section 108(a) of the Internal
23Revenue Code for the taxable year. The reduction required under
24this subsection (c) shall be made after the determination of
25Illinois net income for the taxable year in which the
26indebtedness is discharged.



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1    (d) In the case of a corporation (other than a Subchapter S
2corporation), no carryover deduction shall be allowed under
3this Section for any taxable year ending after December 31,
42010 and prior to December 31, 2014; provided that, for
5purposes of determining the taxable years to which a net loss
6may be carried under subsection (a) of this Section, no taxable
7year for which a deduction is disallowed under this subsection
8shall be counted.
9(Source: P.A. 95-233, eff. 8-16-07; 96-1496, eff. 1-13-11.)
10    Section 99. Effective date. This Act takes effect upon
11becoming law.