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91_HB1474
LRB9103445PTpk
1 AN ACT to amend the Illinois Income Tax Act by changing
2 Sections 201 and 901 and adding Sections 202.5 and 202.7.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Income Tax Act is amended by
6 changing Sections 201 and 901 and adding Sections 202.5 and
7 202.7 as follows:
8 (35 ILCS 5/201) (from Ch. 120, par. 2-201)
9 Sec. 201. Tax Imposed.
10 (a) In general. A tax measured by net income is hereby
11 imposed on every individual, corporation, trust and estate
12 for each taxable year ending after July 31, 1969 on the
13 privilege of earning or receiving income in or as a resident
14 of this State. Such tax shall be in addition to all other
15 occupation or privilege taxes imposed by this State or by any
16 municipal corporation or political subdivision thereof.
17 (b) Rates. The tax imposed by subsection (a) of this
18 Section shall be determined as follows:
19 (1) In the case of an individual, trust or estate,
20 for taxable years ending prior to July 1, 1989, an amount
21 equal to 2 1/2% of the taxpayer's net income for the
22 taxable year.
23 (2) In the case of an individual, trust or estate,
24 for taxable years beginning prior to July 1, 1989 and
25 ending after June 30, 1989, an amount equal to the sum of
26 (i) 2 1/2% of the taxpayer's net income for the period
27 prior to July 1, 1989, as calculated under Section 202.3,
28 and (ii) 3% of the taxpayer's net income for the period
29 after June 30, 1989, as calculated under Section 202.3.
30 (3) In the case of an individual, trust or estate,
31 for taxable years beginning after June 30, 1989 and
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1 ending before January 1, 2000, an amount equal to 3% of
2 the taxpayer's net income for the taxable year.
3 (3.1) In the case of an individual, trust, or
4 estate, for taxable years beginning before January 1,
5 2000 and ending after December 31, 1999, an amount equal
6 to the sum of (i) 3% of the taxpayer's net income for the
7 period before January 1, 2000 as calculated under Section
8 202.5 and (ii) 2.75% of the taxpayer's net income for the
9 period after December 31, 1999, as calculated under
10 Section 202.5.
11 (3.2) In the case of an individual, trust, or
12 estate, for taxable years beginning after December 31,
13 1999 and ending before January 1, 2002, an amount equal
14 to 2.75% of the taxpayer's net income for the taxable
15 year.
16 (3.3) In the case of an individual, trust, or
17 estate, for taxable years beginning before January 1,
18 2002 and ending after December 31, 2001, an amount equal
19 to the sum of (i) 2.75% of the taxpayer's net income for
20 the period before January 1, 2002 as calculated under
21 Section 202.7 and (ii) 3% of the taxpayer's net income
22 for the period after December 31, 2001, as calculated
23 under Section 202.7.
24 (3.4) In the case of an individual, trust, or
25 estate, for taxable years beginning after December 31,
26 2001, an amount equal to 3% of the taxpayer's net income
27 for the taxable year.
28 (4) (Blank).
29 (5) (Blank).
30 (6) In the case of a corporation, for taxable years
31 ending prior to July 1, 1989, an amount equal to 4% of
32 the taxpayer's net income for the taxable year.
33 (7) In the case of a corporation, for taxable years
34 beginning prior to July 1, 1989 and ending after June 30,
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1 1989, an amount equal to the sum of (i) 4% of the
2 taxpayer's net income for the period prior to July 1,
3 1989, as calculated under Section 202.3, and (ii) 4.8% of
4 the taxpayer's net income for the period after June 30,
5 1989, as calculated under Section 202.3.
6 (8) In the case of a corporation, for taxable years
7 beginning after June 30, 1989 and end before January 1,
8 2000, an amount equal to 4.8% of the taxpayer's net
9 income for the taxable year.
10 (9) In the case of a corporation, for taxable years
11 beginning before January 1, 2000 and ending after
12 December 31, 1999, an amount equal to the sum of (i) 4.8%
13 of the taxpayer's net income for the period before
14 January 1, 2000 as calculated under Section 202.5 and
15 (ii) 4.4% of the taxpayer's net income for the period
16 after December 31, 1999, as calculated under Section
17 202.5.
18 (10) In the case of a corporation, for taxable
19 years beginning after December 31, 1999 and ending before
20 January 1, 2002, an amount equal to 4.4% of the
21 taxpayer's net income for the taxable year.
22 (11) In the case of a corporation, for taxable
23 years beginning before January 1, 2002 and ending after
24 December 31, 2001, an amount equal to the sum of (i) 4.4%
25 of the taxpayer's net income for the period before
26 January 1, 2002 as calculated under Section 202.7 and
27 (ii) 4.8% of the taxpayer's net income for the period
28 after December 31, 2001, as calculated under Section
29 202.7.
30 (12) In the case of a corporation, for taxable
31 years beginning after December 31, 2001, an amount equal
32 to 4.8% of the taxpayer's net income for the taxable
33 year.
34 (c) Beginning on July 1, 1979 and thereafter, in
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1 addition to such income tax, there is also hereby imposed the
2 Personal Property Tax Replacement Income Tax measured by net
3 income on every corporation (including Subchapter S
4 corporations), partnership and trust, for each taxable year
5 ending after June 30, 1979. Such taxes are imposed on the
6 privilege of earning or receiving income in or as a resident
7 of this State. The Personal Property Tax Replacement Income
8 Tax shall be in addition to the income tax imposed by
9 subsections (a) and (b) of this Section and in addition to
10 all other occupation or privilege taxes imposed by this State
11 or by any municipal corporation or political subdivision
12 thereof.
13 (d) Additional Personal Property Tax Replacement Income
14 Tax Rates. The personal property tax replacement income tax
15 imposed by this subsection and subsection (c) of this Section
16 in the case of a corporation, other than a Subchapter S
17 corporation, shall be an additional amount equal to 2.85% of
18 such taxpayer's net income for the taxable year, except that
19 beginning on January 1, 1981, and thereafter, the rate of
20 2.85% specified in this subsection shall be reduced to 2.5%,
21 and in the case of a partnership, trust or a Subchapter S
22 corporation shall be an additional amount equal to 1.5% of
23 such taxpayer's net income for the taxable year.
24 (e) Investment credit. A taxpayer shall be allowed a
25 credit against the Personal Property Tax Replacement Income
26 Tax for investment in qualified property.
27 (1) A taxpayer shall be allowed a credit equal to
28 .5% of the basis of qualified property placed in service
29 during the taxable year, provided such property is placed
30 in service on or after July 1, 1984. There shall be
31 allowed an additional credit equal to .5% of the basis of
32 qualified property placed in service during the taxable
33 year, provided such property is placed in service on or
34 after July 1, 1986, and the taxpayer's base employment
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1 within Illinois has increased by 1% or more over the
2 preceding year as determined by the taxpayer's employment
3 records filed with the Illinois Department of Employment
4 Security. Taxpayers who are new to Illinois shall be
5 deemed to have met the 1% growth in base employment for
6 the first year in which they file employment records with
7 the Illinois Department of Employment Security. The
8 provisions added to this Section by Public Act 85-1200
9 (and restored by Public Act 87-895) shall be construed as
10 declaratory of existing law and not as a new enactment.
11 If, in any year, the increase in base employment within
12 Illinois over the preceding year is less than 1%, the
13 additional credit shall be limited to that percentage
14 times a fraction, the numerator of which is .5% and the
15 denominator of which is 1%, but shall not exceed .5%.
16 The investment credit shall not be allowed to the extent
17 that it would reduce a taxpayer's liability in any tax
18 year below zero, nor may any credit for qualified
19 property be allowed for any year other than the year in
20 which the property was placed in service in Illinois. For
21 tax years ending on or after December 31, 1987, and on or
22 before December 31, 1988, the credit shall be allowed for
23 the tax year in which the property is placed in service,
24 or, if the amount of the credit exceeds the tax liability
25 for that year, whether it exceeds the original liability
26 or the liability as later amended, such excess may be
27 carried forward and applied to the tax liability of the 5
28 taxable years following the excess credit years if the
29 taxpayer (i) makes investments which cause the creation
30 of a minimum of 2,000 full-time equivalent jobs in
31 Illinois, (ii) is located in an enterprise zone
32 established pursuant to the Illinois Enterprise Zone Act
33 and (iii) is certified by the Department of Commerce and
34 Community Affairs as complying with the requirements
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1 specified in clause (i) and (ii) by July 1, 1986. The
2 Department of Commerce and Community Affairs shall notify
3 the Department of Revenue of all such certifications
4 immediately. For tax years ending after December 31,
5 1988, the credit shall be allowed for the tax year in
6 which the property is placed in service, or, if the
7 amount of the credit exceeds the tax liability for that
8 year, whether it exceeds the original liability or the
9 liability as later amended, such excess may be carried
10 forward and applied to the tax liability of the 5 taxable
11 years following the excess credit years. The credit shall
12 be applied to the earliest year for which there is a
13 liability. If there is credit from more than one tax year
14 that is available to offset a liability, earlier credit
15 shall be applied first.
16 (2) The term "qualified property" means property
17 which:
18 (A) is tangible, whether new or used,
19 including buildings and structural components of
20 buildings and signs that are real property, but not
21 including land or improvements to real property that
22 are not a structural component of a building such as
23 landscaping, sewer lines, local access roads,
24 fencing, parking lots, and other appurtenances;
25 (B) is depreciable pursuant to Section 167 of
26 the Internal Revenue Code, except that "3-year
27 property" as defined in Section 168(c)(2)(A) of that
28 Code is not eligible for the credit provided by this
29 subsection (e);
30 (C) is acquired by purchase as defined in
31 Section 179(d) of the Internal Revenue Code;
32 (D) is used in Illinois by a taxpayer who is
33 primarily engaged in manufacturing, or in mining
34 coal or fluorite, or in retailing; and
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1 (E) has not previously been used in Illinois
2 in such a manner and by such a person as would
3 qualify for the credit provided by this subsection
4 (e) or subsection (f).
5 (3) For purposes of this subsection (e),
6 "manufacturing" means the material staging and production
7 of tangible personal property by procedures commonly
8 regarded as manufacturing, processing, fabrication, or
9 assembling which changes some existing material into new
10 shapes, new qualities, or new combinations. For purposes
11 of this subsection (e) the term "mining" shall have the
12 same meaning as the term "mining" in Section 613(c) of
13 the Internal Revenue Code. For purposes of this
14 subsection (e), the term "retailing" means the sale of
15 tangible personal property or services rendered in
16 conjunction with the sale of tangible consumer goods or
17 commodities.
18 (4) The basis of qualified property shall be the
19 basis used to compute the depreciation deduction for
20 federal income tax purposes.
21 (5) If the basis of the property for federal income
22 tax depreciation purposes is increased after it has been
23 placed in service in Illinois by the taxpayer, the amount
24 of such increase shall be deemed property placed in
25 service on the date of such increase in basis.
26 (6) The term "placed in service" shall have the
27 same meaning as under Section 46 of the Internal Revenue
28 Code.
29 (7) If during any taxable year, any property ceases
30 to be qualified property in the hands of the taxpayer
31 within 48 months after being placed in service, or the
32 situs of any qualified property is moved outside Illinois
33 within 48 months after being placed in service, the
34 Personal Property Tax Replacement Income Tax for such
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1 taxable year shall be increased. Such increase shall be
2 determined by (i) recomputing the investment credit which
3 would have been allowed for the year in which credit for
4 such property was originally allowed by eliminating such
5 property from such computation and, (ii) subtracting such
6 recomputed credit from the amount of credit previously
7 allowed. For the purposes of this paragraph (7), a
8 reduction of the basis of qualified property resulting
9 from a redetermination of the purchase price shall be
10 deemed a disposition of qualified property to the extent
11 of such reduction.
12 (8) Unless the investment credit is extended by
13 law, the basis of qualified property shall not include
14 costs incurred after December 31, 2003, except for costs
15 incurred pursuant to a binding contract entered into on
16 or before December 31, 2003.
17 (9) Each taxable year, a partnership may elect to
18 pass through to its partners the credits to which the
19 partnership is entitled under this subsection (e) for the
20 taxable year. A partner may use the credit allocated to
21 him or her under this paragraph only against the tax
22 imposed in subsections (c) and (d) of this Section. If
23 the partnership makes that election, those credits shall
24 be allocated among the partners in the partnership in
25 accordance with the rules set forth in Section 704(b) of
26 the Internal Revenue Code, and the rules promulgated
27 under that Section, and the allocated amount of the
28 credits shall be allowed to the partners for that taxable
29 year. The partnership shall make this election on its
30 Personal Property Tax Replacement Income Tax return for
31 that taxable year. The election to pass through the
32 credits shall be irrevocable.
33 (f) Investment credit; Enterprise Zone.
34 (1) A taxpayer shall be allowed a credit against
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1 the tax imposed by subsections (a) and (b) of this
2 Section for investment in qualified property which is
3 placed in service in an Enterprise Zone created pursuant
4 to the Illinois Enterprise Zone Act. For partners and for
5 shareholders of Subchapter S corporations, there shall be
6 allowed a credit under this subsection (f) to be
7 determined in accordance with the determination of income
8 and distributive share of income under Sections 702 and
9 704 and Subchapter S of the Internal Revenue Code. The
10 credit shall be .5% of the basis for such property. The
11 credit shall be available only in the taxable year in
12 which the property is placed in service in the Enterprise
13 Zone 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.
16 For tax years ending on or after December 31, 1985, the
17 credit shall be allowed for the tax year in which the
18 property is placed in service, or, if the amount of the
19 credit exceeds the tax liability for that year, whether
20 it exceeds the original liability or the liability as
21 later amended, such excess may be carried forward and
22 applied to the tax liability of the 5 taxable years
23 following the excess credit year. The credit shall be
24 applied to the earliest year for which there is a
25 liability. If there is credit from more than one tax year
26 that is available to offset a liability, the credit
27 accruing first in time shall be applied first.
28 (2) The term qualified property means property
29 which:
30 (A) is tangible, whether new or used,
31 including buildings and structural components of
32 buildings;
33 (B) is depreciable pursuant to Section 167 of
34 the Internal Revenue Code, except that "3-year
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1 property" as defined in Section 168(c)(2)(A) of that
2 Code is not eligible for the credit provided by this
3 subsection (f);
4 (C) is acquired by purchase as defined in
5 Section 179(d) of the Internal Revenue Code;
6 (D) is used in the Enterprise Zone by the
7 taxpayer; and
8 (E) has not been previously used in Illinois
9 in such a manner and by such a person as would
10 qualify for the credit provided by this subsection
11 (f) or subsection (e).
12 (3) The basis of qualified property shall be the
13 basis used to compute the depreciation deduction for
14 federal income tax purposes.
15 (4) If the basis of the property for federal income
16 tax depreciation purposes is increased after it has been
17 placed in service in the Enterprise Zone by the taxpayer,
18 the amount of such increase shall be deemed property
19 placed in service on the date of such increase in basis.
20 (5) The term "placed in service" shall have the
21 same meaning as under Section 46 of the Internal Revenue
22 Code.
23 (6) If during any taxable year, any property ceases
24 to be qualified property in the hands of the taxpayer
25 within 48 months after being placed in service, or the
26 situs of any qualified property is moved outside the
27 Enterprise Zone within 48 months after being placed in
28 service, the tax imposed under subsections (a) and (b) of
29 this Section for such taxable year shall be increased.
30 Such increase shall be determined by (i) recomputing the
31 investment credit which would have been allowed for the
32 year in which credit for such property was originally
33 allowed by eliminating such property from such
34 computation, and (ii) subtracting such recomputed credit
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1 from the amount of credit previously allowed. For the
2 purposes of this paragraph (6), a reduction of the basis
3 of qualified property resulting from a redetermination of
4 the purchase price shall be deemed a disposition of
5 qualified property to the extent of such reduction.
6 (g) Jobs Tax Credit; Enterprise Zone and Foreign
7 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
10 the Department of Commerce and Community Affairs
11 conducting a trade or business in a federally designated
12 Foreign Trade Zone or Sub-Zone shall be allowed a credit
13 against the tax imposed by subsections (a) and (b) of
14 this Section in the amount of $500 per eligible employee
15 hired to work in the zone during the taxable year.
16 (2) To qualify for the credit:
17 (A) the taxpayer must hire 5 or more eligible
18 employees to work in an enterprise zone or federally
19 designated Foreign Trade Zone or Sub-Zone during the
20 taxable year;
21 (B) the taxpayer's total employment within the
22 enterprise zone or federally designated Foreign
23 Trade Zone or Sub-Zone must increase by 5 or more
24 full-time employees beyond the total employed in
25 that zone at the end of the previous tax year for
26 which a jobs tax credit under this Section was
27 taken, or beyond the total employed by the taxpayer
28 as of December 31, 1985, whichever is later; and
29 (C) the eligible employees must be employed
30 180 consecutive days in order to be deemed hired for
31 purposes of this subsection.
32 (3) An "eligible employee" means an employee who
33 is:
34 (A) Certified by the Department of Commerce
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1 and Community Affairs as "eligible for services"
2 pursuant to regulations promulgated in accordance
3 with Title II of the Job Training Partnership Act,
4 Training Services for the Disadvantaged or Title III
5 of the Job Training Partnership Act, Employment and
6 Training Assistance for Dislocated Workers Program.
7 (B) Hired after the enterprise zone or
8 federally designated Foreign Trade Zone or Sub-Zone
9 was designated or the trade or business was located
10 in that zone, whichever is later.
11 (C) Employed in the enterprise zone or Foreign
12 Trade Zone or Sub-Zone. An employee is employed in
13 an enterprise zone or federally designated Foreign
14 Trade Zone or Sub-Zone if his services are rendered
15 there or it is the base of operations for the
16 services performed.
17 (D) A full-time employee working 30 or more
18 hours per week.
19 (4) For tax years ending on or after December 31,
20 1985 and prior to December 31, 1988, the credit shall be
21 allowed for the tax year in which the eligible employees
22 are hired. For tax years ending on or after December 31,
23 1988, the credit shall be allowed for the tax year
24 immediately following the tax year in which the eligible
25 employees are hired. If the amount of the credit exceeds
26 the tax liability for that year, whether it exceeds the
27 original liability or the liability as later amended,
28 such excess may be carried forward and applied to the tax
29 liability of the 5 taxable years following the excess
30 credit year. The credit shall be applied to the earliest
31 year for which there is a liability. If there is credit
32 from more than one tax year that is available to offset a
33 liability, earlier credit shall be applied first.
34 (5) The Department of Revenue shall promulgate such
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1 rules and regulations as may be deemed necessary to carry
2 out the purposes of this subsection (g).
3 (6) The credit shall be available for eligible
4 employees hired on or after January 1, 1986.
5 (h) Investment credit; High Impact Business.
6 (1) Subject to subsection (b) of Section 5.5 of the
7 Illinois Enterprise Zone Act, a taxpayer shall be allowed
8 a credit against the tax imposed by subsections (a) and
9 (b) of this Section for investment in qualified property
10 which is placed in service by a Department of Commerce
11 and Community Affairs designated High Impact Business.
12 The credit shall be .5% of the basis for such property.
13 The credit shall not be available until the minimum
14 investments in qualified property set forth in Section
15 5.5 of the Illinois Enterprise Zone Act have been
16 satisfied and shall not be allowed to the extent that it
17 would reduce a taxpayer's liability for the tax imposed
18 by subsections (a) and (b) of this Section to below zero.
19 The credit applicable to such minimum investments shall
20 be taken in the taxable year in which such minimum
21 investments have been completed. The credit for
22 additional investments beyond the minimum investment by a
23 designated high impact business shall be available only
24 in the taxable year in which the property is placed in
25 service and shall not be allowed to the extent that it
26 would reduce a taxpayer's liability for the tax imposed
27 by subsections (a) and (b) of this Section to below zero.
28 For tax years ending on or after December 31, 1987, the
29 credit shall be allowed for the tax year in which the
30 property is placed in service, or, if the amount of the
31 credit exceeds the tax liability for that year, whether
32 it exceeds the original liability or the liability as
33 later amended, such excess may be carried forward and
34 applied to the tax liability of the 5 taxable years
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1 following the excess credit year. The credit shall be
2 applied to the earliest year for which there is a
3 liability. If there is credit from more than one tax
4 year that is available to offset a liability, the credit
5 accruing first in time shall be applied first.
6 Changes made in this subdivision (h)(1) by Public
7 Act 88-670 restore changes made by Public Act 85-1182 and
8 reflect existing law.
9 (2) The term qualified property means property
10 which:
11 (A) is tangible, whether new or used,
12 including buildings and structural components of
13 buildings;
14 (B) is depreciable pursuant to Section 167 of
15 the Internal Revenue Code, except that "3-year
16 property" as defined in Section 168(c)(2)(A) of that
17 Code is not eligible for the credit provided by this
18 subsection (h);
19 (C) is acquired by purchase as defined in
20 Section 179(d) of the Internal Revenue Code; and
21 (D) is not eligible for the Enterprise Zone
22 Investment Credit provided by subsection (f) of this
23 Section.
24 (3) The basis of qualified property shall be the
25 basis used to compute the depreciation deduction for
26 federal income tax purposes.
27 (4) If the basis of the property for federal income
28 tax depreciation purposes is increased after it has been
29 placed in service in a federally designated Foreign Trade
30 Zone or Sub-Zone located in Illinois by the taxpayer, the
31 amount of such increase shall be deemed property placed
32 in service on the date of such increase in basis.
33 (5) The term "placed in service" shall have the
34 same meaning as under Section 46 of the Internal Revenue
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1 Code.
2 (6) If during any taxable year ending on or before
3 December 31, 1996, any property ceases to be qualified
4 property in the hands of the taxpayer within 48 months
5 after being placed in service, or the situs of any
6 qualified property is moved outside Illinois within 48
7 months after being placed in service, the tax imposed
8 under subsections (a) and (b) of this Section for such
9 taxable year shall be increased. Such increase shall be
10 determined by (i) recomputing the investment credit which
11 would have been allowed for the year in which credit for
12 such property was originally allowed by eliminating such
13 property from such computation, and (ii) subtracting such
14 recomputed credit from the amount of credit previously
15 allowed. For the purposes of this paragraph (6), a
16 reduction of the basis of qualified property resulting
17 from a redetermination of the purchase price shall be
18 deemed a disposition of qualified property to the extent
19 of such reduction.
20 (7) Beginning with tax years ending after December
21 31, 1996, if a taxpayer qualifies for the credit under
22 this subsection (h) and thereby is granted a tax
23 abatement and the taxpayer relocates its entire facility
24 in violation of the explicit terms and length of the
25 contract under Section 18-183 of the Property Tax Code,
26 the tax imposed under subsections (a) and (b) of this
27 Section shall be increased for the taxable year in which
28 the taxpayer relocated its facility by an amount equal to
29 the amount of credit received by the taxpayer under this
30 subsection (h).
31 (i) A credit shall be allowed against the tax imposed by
32 subsections (a) and (b) of this Section for the tax imposed
33 by subsections (c) and (d) of this Section. This credit
34 shall be computed by multiplying the tax imposed by
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1 subsections (c) and (d) of this Section by a fraction, the
2 numerator of which is base income allocable to Illinois and
3 the denominator of which is Illinois base income, and further
4 multiplying the product by the tax rate imposed by
5 subsections (a) and (b) of this Section.
6 Any credit earned on or after December 31, 1986 under
7 this subsection which is unused in the year the credit is
8 computed because it exceeds the tax liability imposed by
9 subsections (a) and (b) for that year (whether it exceeds the
10 original liability or the liability as later amended) may be
11 carried forward and applied to the tax liability imposed by
12 subsections (a) and (b) of the 5 taxable years following the
13 excess credit year. This credit shall be applied first to
14 the earliest year for which there is a liability. If there
15 is a credit under this subsection from more than one tax year
16 that is available to offset a liability the earliest credit
17 arising under this subsection shall be applied first.
18 If, during any taxable year ending on or after December
19 31, 1986, the tax imposed by subsections (c) and (d) of this
20 Section for which a taxpayer has claimed a credit under this
21 subsection (i) is reduced, the amount of credit for such tax
22 shall also be reduced. Such reduction shall be determined by
23 recomputing the credit to take into account the reduced tax
24 imposed by subsection (c) and (d). If any portion of the
25 reduced amount of credit has been carried to a different
26 taxable year, an amended return shall be filed for such
27 taxable year to reduce the amount of credit claimed.
28 (j) Training expense credit. Beginning with tax years
29 ending on or after December 31, 1986, a taxpayer shall be
30 allowed a credit against the tax imposed by subsection (a)
31 and (b) under this Section for all amounts paid or accrued,
32 on behalf of all persons employed by the taxpayer in Illinois
33 or Illinois residents employed outside of Illinois by a
34 taxpayer, for educational or vocational training in
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1 semi-technical or technical fields or semi-skilled or skilled
2 fields, which were deducted from gross income in the
3 computation of taxable income. The credit against the tax
4 imposed by subsections (a) and (b) shall be 1.6% of such
5 training expenses. For partners and for shareholders of
6 subchapter S corporations, there shall be allowed a credit
7 under this subsection (j) to be determined in accordance with
8 the determination of income and distributive share of income
9 under Sections 702 and 704 and subchapter S of the Internal
10 Revenue Code.
11 Any credit allowed under this subsection which is unused
12 in the year the credit is earned may be carried forward to
13 each of the 5 taxable years following the year for which the
14 credit is first computed until it is used. This credit shall
15 be applied first to the earliest year for which there is a
16 liability. If there is a credit under this subsection from
17 more than one tax year that is available to offset a
18 liability the earliest credit arising under this subsection
19 shall be applied first.
20 (k) Research and development credit.
21 Beginning with tax years ending after July 1, 1990, a
22 taxpayer shall be allowed a credit against the tax imposed by
23 subsections (a) and (b) of this Section for increasing
24 research activities in this State. The credit allowed
25 against the tax imposed by subsections (a) and (b) shall be
26 equal to 6 1/2% of the qualifying expenditures for increasing
27 research activities in this State.
28 For purposes of this subsection, "qualifying
29 expenditures" means the qualifying expenditures as defined
30 for the federal credit for increasing research activities
31 which would be allowable under Section 41 of the Internal
32 Revenue Code and which are conducted in this State,
33 "qualifying expenditures for increasing research activities
34 in this State" means the excess of qualifying expenditures
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1 for the taxable year in which incurred over qualifying
2 expenditures for the base period, "qualifying expenditures
3 for the base period" means the average of the qualifying
4 expenditures for each year in the base period, and "base
5 period" means the 3 taxable years immediately preceding the
6 taxable year for which the determination is being made.
7 Any credit in excess of the tax liability for the taxable
8 year may be carried forward. A taxpayer may elect to have the
9 unused credit shown on its final completed return carried
10 over as a credit against the tax liability for the following
11 5 taxable years or until it has been fully used, whichever
12 occurs first.
13 If an unused credit is carried forward to a given year
14 from 2 or more earlier years, that credit arising in the
15 earliest year will be applied first against the tax liability
16 for the given year. If a tax liability for the given year
17 still remains, the credit from the next earliest year will
18 then be applied, and so on, until all credits have been used
19 or no tax liability for the given year remains. Any
20 remaining unused credit or credits then will be carried
21 forward to the next following year in which a tax liability
22 is incurred, except that no credit can be carried forward to
23 a year which is more than 5 years after the year in which the
24 expense for which the credit is given was incurred.
25 Unless extended by law, the credit shall not include
26 costs incurred after December 31, 2004, except for costs
27 incurred pursuant to a binding contract entered into on or
28 before December 31, 2004.
29 (l) Environmental Remediation Tax Credit.
30 (i) For tax years ending after December 31, 1997
31 and on or before December 31, 2001, a taxpayer shall be
32 allowed a credit against the tax imposed by subsections
33 (a) and (b) of this Section for certain amounts paid for
34 unreimbursed eligible remediation costs, as specified in
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1 this subsection. For purposes of this Section,
2 "unreimbursed eligible remediation costs" means costs
3 approved by the Illinois Environmental Protection Agency
4 ("Agency") under Section 58.14 of the Environmental
5 Protection Act that were paid in performing environmental
6 remediation at a site for which a No Further Remediation
7 Letter was issued by the Agency and recorded under
8 Section 58.10 of the Environmental Protection Act. The
9 credit must be claimed for the taxable year in which
10 Agency approval of the eligible remediation costs is
11 granted. The credit is not available to any taxpayer if
12 the taxpayer or any related party caused or contributed
13 to, in any material respect, a release of regulated
14 substances on, in, or under the site that was identified
15 and addressed by the remedial action pursuant to the Site
16 Remediation Program of the Environmental Protection Act.
17 After the Pollution Control Board rules are adopted
18 pursuant to the Illinois Administrative Procedure Act for
19 the administration and enforcement of Section 58.9 of the
20 Environmental Protection Act, determinations as to credit
21 availability for purposes of this Section shall be made
22 consistent with those rules. For purposes of this
23 Section, "taxpayer" includes a person whose tax
24 attributes the taxpayer has succeeded to under Section
25 381 of the Internal Revenue Code and "related party"
26 includes the persons disallowed a deduction for losses by
27 paragraphs (b), (c), and (f)(1) of Section 267 of the
28 Internal Revenue Code by virtue of being a related
29 taxpayer, as well as any of its partners. The credit
30 allowed against the tax imposed by subsections (a) and
31 (b) shall be equal to 25% of the unreimbursed eligible
32 remediation costs in excess of $100,000 per site, except
33 that the $100,000 threshold shall not apply to any site
34 contained in an enterprise zone as determined by the
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1 Department of Commerce and Community Affairs. The total
2 credit allowed shall not exceed $40,000 per year with a
3 maximum total of $150,000 per site. For partners and
4 shareholders of subchapter S corporations, there shall be
5 allowed a credit under this subsection to be determined
6 in accordance with the determination of income and
7 distributive share of income under Sections 702 and 704
8 of subchapter S of the Internal Revenue Code.
9 (ii) A credit allowed under this subsection that is
10 unused in the year the credit is earned may be carried
11 forward to each of the 5 taxable years following the year
12 for which the credit is first earned until it is used.
13 The term "unused credit" does not include any amounts of
14 unreimbursed eligible remediation costs in excess of the
15 maximum credit per site authorized under paragraph (i).
16 This credit shall be applied first to the earliest year
17 for which there is a liability. If there is a credit
18 under this subsection from more than one tax year that is
19 available to offset a liability, the earliest credit
20 arising under this subsection shall be applied first. A
21 credit allowed under this subsection may be sold to a
22 buyer as part of a sale of all or part of the remediation
23 site for which the credit was granted. The purchaser of
24 a remediation site and the tax credit shall succeed to
25 the unused credit and remaining carry-forward period of
26 the seller. To perfect the transfer, the assignor shall
27 record the transfer in the chain of title for the site
28 and provide written notice to the Director of the
29 Illinois Department of Revenue of the assignor's intent
30 to sell the remediation site and the amount of the tax
31 credit to be transferred as a portion of the sale. In no
32 event may a credit be transferred to any taxpayer if the
33 taxpayer or a related party would not be eligible under
34 the provisions of subsection (i).
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1 (iii) For purposes of this Section, the term "site"
2 shall have the same meaning as under Section 58.2 of the
3 Environmental Protection Act.
4 (Source: P.A. 89-235, eff. 8-4-95; 89-519, eff. 7-18-96;
5 89-591, eff. 8-1-96; 90-123, eff. 7-21-97; 90-458, eff.
6 8-17-97; 90-605, eff. 6-30-98; 90-655, eff. 7-30-98; 90-717,
7 eff. 8-7-98; 90-792, eff. 1-1-99; revised 9-16-98.)
8 (35 ILCS 5/202.5 new)
9 Sec. 202.5. Net income attributable to the period prior
10 to January 1, 2000, and net income attributable to the period
11 after December 31, 1999.
12 (a) In general. With respect to the taxable year of a
13 taxpayer beginning prior to January 1, 2000, and ending after
14 December 31, 1999, net income for the period after December
15 31, 1999, shall be that amount which bears the same ratio to
16 the taxpayer's net income for the entire taxable year as the
17 number of days in such year after December 31, 1999, bears to
18 the total number of days in such year, and the net income for
19 the period prior to January 1, 2000, shall be that amount
20 which bears the same ratio to the taxpayer's net income for
21 the entire taxable year as the number of days in such year
22 prior to January 1, 2000, bears to the total number of days
23 in such year.
24 (b) Election to attribute income and deduction items
25 specifically to the respective portions of a taxable year
26 prior to January 1, 2000, and after December 31, 1999. In the
27 case of a taxpayer with a taxable year beginning prior to
28 January 1, 2000, and ending after December 31, 1999, the
29 taxpayer may elect, in lieu of the procedure established in
30 subsection (a) of this Section, to determine net income on a
31 specific accounting basis for the 2 portions of his taxable
32 year:
33 (i) from the beginning of the taxable year through
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1 December 31, 1999, and
2 (ii) from January 1, 2000, through the end of the
3 taxable year.
4 If the taxpayer elects specific accounting under this
5 subsection, there shall be taken into account in computing
6 base income for each of the 2 portions of the taxable year
7 only those items earned, received, paid, incurred or accrued
8 in each such period. The standard exemption provided by
9 Section 204 shall be divided between the respective periods
10 in amounts which bear the same ratio to the total exemption
11 allowable under Section 204 (determined without regard to
12 this Section) as the total number of days in each such period
13 bears to the total number of days in the taxable year. The
14 election provided by this subsection shall be made in such
15 manner and at such time as the Department may by forms or
16 regulations prescribe, but shall be made not later than the
17 due date (including any extensions thereof) for the filing of
18 the return for the taxable year, and shall be irrevocable.
19 (35 ILCS 5/202.7 new)
20 Sec. 202.7. Net income attributable to the period prior
21 to January 1, 2002, and net income attributable to the period
22 after December 31, 2001.
23 (a) In general. With respect to the taxable year of a
24 taxpayer beginning prior to January 1, 2002, and ending after
25 December 31, 2001, net income for the period after December
26 31, 2001, shall be that amount which bears the same ratio to
27 the taxpayer's net income for the entire taxable year as the
28 number of days in such year after December 31, 2001, bears to
29 the total number of days in such year, and the net income for
30 the period prior to January 1, 2002, shall be that amount
31 which bears the same ratio to the taxpayer's net income for
32 the entire taxable year as the number of days in such year
33 prior to January 1, 2002, bears to the total number of days
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1 in such year.
2 (b) Election to attribute income and deduction items
3 specifically to the respective portions of a taxable year
4 prior to January 1, 2002, and after December 31, 2001. In the
5 case of a taxpayer with a taxable year beginning prior to
6 January 1, 2002, and ending after December 31, 2001, the
7 taxpayer may elect, in lieu of the procedure established in
8 subsection (a) of this Section, to determine net income on a
9 specific accounting basis for the 2 portions of his taxable
10 year:
11 (i) from the beginning of the taxable year through
12 December 31, 2001, and
13 (ii) from January 1, 2002, through the end of the
14 taxable year.
15 If the taxpayer elects specific accounting under this
16 subsection, there shall be taken into account in computing
17 base income for each of the 2 portions of the taxable year
18 only those items earned, received, paid, incurred or accrued
19 in each such period. The standard exemption provided by
20 Section 204 shall be divided between the respective periods
21 in amounts which bear the same ratio to the total exemption
22 allowable under Section 204 (determined without regard to
23 this Section) as the total number of days in each such period
24 bears to the total number of days in the taxable year. The
25 election provided by this subsection shall be made in such
26 manner and at such time as the Department may by forms or
27 regulations prescribe, but shall be made not later than the
28 due date (including any extensions thereof) for the filing of
29 the return for the taxable year, and shall be irrevocable.
30 (35 ILCS 5/901) (from Ch. 120, par. 9-901)
31 Sec. 901. Collection Authority.
32 (a) In general.
33 The Department shall collect the taxes imposed by this
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1 Act. The Department shall collect certified past due child
2 support amounts under Section 39b52 of the Civil
3 Administrative Code of Illinois. Except as provided in
4 subsections (c) and (e) of this Section, money collected
5 pursuant to subsections (a) and (b) of Section 201 of this
6 Act shall be paid into the General Revenue Fund in the State
7 treasury; money collected pursuant to subsections (c) and (d)
8 of Section 201 of this Act shall be paid into the Personal
9 Property Tax Replacement Fund, a special fund in the State
10 Treasury; and money collected under Section 39b52 of the
11 Civil Administrative Code of Illinois shall be paid into the
12 Child Support Enforcement Trust Fund, a special fund outside
13 the State Treasury.
14 (b) Local Governmental Distributive Fund.
15 Beginning August 1, 1969, and continuing through June 30,
16 1994, the Treasurer shall transfer each month from the
17 General Revenue Fund to a special fund in the State treasury,
18 to be known as the "Local Government Distributive Fund", an
19 amount equal to 1/12 of the net revenue realized from the tax
20 imposed by subsections (a) and (b) of Section 201 of this Act
21 during the preceding month. Beginning July 1, 1994, and
22 continuing through June 30, 1995, the Treasurer shall
23 transfer each month from the General Revenue Fund to the
24 Local Government Distributive Fund an amount equal to 1/11 of
25 the net revenue realized from the tax imposed by subsections
26 (a) and (b) of Section 201 of this Act during the preceding
27 month. Beginning July 1, 1995, the Treasurer shall transfer
28 each month from the General Revenue Fund to the Local
29 Government Distributive Fund an amount equal to 1/10 of the
30 net revenue realized from the tax imposed by subsections (a)
31 and (b) of Section 201 of the Illinois Income Tax Act during
32 the preceding month. Net revenue realized for a month shall
33 be defined as the revenue from the tax imposed by subsections
34 (a) and (b) of Section 201 of this Act which is deposited in
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1 the General Revenue Fund, the Educational Assistance Fund and
2 the Income Tax Surcharge Local Government Distributive Fund
3 during the month minus the amount paid out of the General
4 Revenue Fund in State warrants during that same month as
5 refunds to taxpayers for overpayment of liability under the
6 tax imposed by subsections (a) and (b) of Section 201 of this
7 Act.
8 (c) Deposits Into Income Tax Refund Fund.
9 (1) Beginning on January 1, 1989 and thereafter,
10 the Department shall deposit a percentage of the amounts
11 collected pursuant to subsections (a) and (b)(1), (2),
12 and (3), (3.1), (3.2), (3.3), and (3.4) of Section 201 of
13 this Act into a fund in the State treasury known as the
14 Income Tax Refund Fund. The Department shall deposit 6%
15 of such amounts during the period beginning January 1,
16 1989 and ending on June 30, 1989. Beginning with State
17 fiscal year 1990 and for each fiscal year thereafter, the
18 percentage deposited into the Income Tax Refund Fund
19 during a fiscal year shall be the Annual Percentage. For
20 fiscal years 1999 through 2001, the Annual Percentage
21 shall be 7.1%. For all other fiscal years, the Annual
22 Percentage shall be calculated as a fraction, the
23 numerator of which shall be the amount of refunds
24 approved for payment by the Department during the
25 preceding fiscal year as a result of overpayment of tax
26 liability under subsections (a) and (b)(1), (2), and (3),
27 (3.1), (3.2), (3.3), and (3.4) of Section 201 of this Act
28 plus the amount of such refunds remaining approved but
29 unpaid at the end of the preceding fiscal year, the
30 denominator of which shall be the amounts which will be
31 collected pursuant to subsections (a) and (b)(1), (2),
32 and (3), (3.1), (3.2), (3.3), and (3.4) of Section 201 of
33 this Act during the preceding fiscal year. The Director
34 of Revenue shall certify the Annual Percentage to the
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1 Comptroller on the last business day of the fiscal year
2 immediately preceding the fiscal year for which it is to
3 be effective.
4 (2) Beginning on January 1, 1989 and thereafter,
5 the Department shall deposit a percentage of the amounts
6 collected pursuant to subsections (a) and (b)(6), (7),
7 and (8), (9), (10), (11), (12), (c) and (d) of Section
8 201 of this Act into a fund in the State treasury known
9 as the Income Tax Refund Fund. The Department shall
10 deposit 18% of such amounts during the period beginning
11 January 1, 1989 and ending on June 30, 1989. Beginning
12 with State fiscal year 1990 and for each fiscal year
13 thereafter, the percentage deposited into the Income Tax
14 Refund Fund during a fiscal year shall be the Annual
15 Percentage. For fiscal years 1999, 2000, and 2001, the
16 Annual Percentage shall be 19%. For all other fiscal
17 years, the Annual Percentage shall be calculated as a
18 fraction, the numerator of which shall be the amount of
19 refunds approved for payment by the Department during the
20 preceding fiscal year as a result of overpayment of tax
21 liability under subsections (a) and (b)(6), (7), and (8),
22 (9), (10), (11), and (12), (c) and (d) of Section 201 of
23 this Act plus the amount of such refunds remaining
24 approved but unpaid at the end of the preceding fiscal
25 year, the denominator of which shall be the amounts which
26 will be collected pursuant to subsections (a) and (b)(6),
27 (7), and (8), (9), (10), (11), and (12), (c) and (d) of
28 Section 201 of this Act during the preceding fiscal year.
29 The Director of Revenue shall certify the Annual
30 Percentage to the Comptroller on the last business day of
31 the fiscal year immediately preceding the fiscal year for
32 which it is to be effective.
33 (d) Expenditures from Income Tax Refund Fund.
34 (1) Beginning January 1, 1989, money in the Income
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1 Tax Refund Fund shall be expended exclusively for the
2 purpose of paying refunds resulting from overpayment of
3 tax liability under Section 201 of this Act and for
4 making transfers pursuant to this subsection (d).
5 (2) The Director shall order payment of refunds
6 resulting from overpayment of tax liability under Section
7 201 of this Act from the Income Tax Refund Fund only to
8 the extent that amounts collected pursuant to Section 201
9 of this Act and transfers pursuant to this subsection (d)
10 have been deposited and retained in the Fund.
11 (3) As soon as possible after the end of each
12 fiscal year, the Director shall order transferred and the
13 State Treasurer and State Comptroller shall transfer from
14 the Income Tax Refund Fund to the Personal Property Tax
15 Replacement Fund an amount, certified by the Director to
16 the Comptroller, equal to the excess of the amount
17 collected pursuant to subsections (c) and (d) of Section
18 201 of this Act deposited into the Income Tax Refund Fund
19 during the fiscal year over the amount of refunds
20 resulting from overpayment of tax liability under
21 subsections (c) and (d) of Section 201 of this Act paid
22 from the Income Tax Refund Fund during the fiscal year.
23 (4) As soon as possible after the end of each
24 fiscal year, the Director shall order transferred and the
25 State Treasurer and State Comptroller shall transfer from
26 the Personal Property Tax Replacement Fund to the Income
27 Tax Refund Fund an amount, certified by the Director to
28 the Comptroller, equal to the excess of the amount of
29 refunds resulting from overpayment of tax liability under
30 subsections (c) and (d) of Section 201 of this Act paid
31 from the Income Tax Refund Fund during the fiscal year
32 over the amount collected pursuant to subsections (c) and
33 (d) of Section 201 of this Act deposited into the Income
34 Tax Refund Fund during the fiscal year.
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1 (4.5) As soon as possible after the end of fiscal
2 year 1999 and of each fiscal year thereafter, the
3 Director shall order transferred and the State Treasurer
4 and State Comptroller shall transfer from the Income Tax
5 Refund Fund to the General Revenue Fund any surplus
6 remaining in the Income Tax Refund Fund as of the end of
7 such fiscal year.
8 (5) This Act shall constitute an irrevocable and
9 continuing appropriation from the Income Tax Refund Fund
10 for the purpose of paying refunds upon the order of the
11 Director in accordance with the provisions of this
12 Section.
13 (e) Deposits into the Education Assistance Fund and the
14 Income Tax Surcharge Local Government Distributive Fund.
15 On July 1, 1991, and thereafter, of the amounts collected
16 pursuant to subsections (a) and (b) of Section 201 of this
17 Act, minus deposits into the Income Tax Refund Fund, the
18 Department shall deposit 7.3% into the Education Assistance
19 Fund in the State Treasury. Beginning July 1, 1991, and
20 continuing through January 31, 1993, of the amounts collected
21 pursuant to subsections (a) and (b) of Section 201 of the
22 Illinois Income Tax Act, minus deposits into the Income Tax
23 Refund Fund, the Department shall deposit 3.0% into the
24 Income Tax Surcharge Local Government Distributive Fund in
25 the State Treasury. Beginning February 1, 1993 and
26 continuing through June 30, 1993, of the amounts collected
27 pursuant to subsections (a) and (b) of Section 201 of the
28 Illinois Income Tax Act, minus deposits into the Income Tax
29 Refund Fund, the Department shall deposit 4.4% into the
30 Income Tax Surcharge Local Government Distributive Fund in
31 the State Treasury. Beginning July 1, 1993, and continuing
32 through June 30, 1994, of the amounts collected under
33 subsections (a) and (b) of Section 201 of this Act, minus
34 deposits into the Income Tax Refund Fund, the Department
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1 shall deposit 1.475% into the Income Tax Surcharge Local
2 Government Distributive Fund in the State Treasury.
3 (Source: P.A. 89-6, eff. 12-31-95; 90-613, eff. 7-9-98;
4 90-655, eff. 7-30-98.) (e-mailed)
5 Section 99. Effective date. This Act takes effect upon
6 becoming law.