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91_SB0338enr
SB338 Enrolled LRB9102972JSpr
1 AN ACT concerning insurance taxes.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The State Finance Act is amended by adding
5 Section 5.490 as follows:
6 (30 ILCS 105/5.490 new)
7 Sec. 5.490. The Insurance Premium Tax Refund Fund.
8 Section 7. The Illinois Income Tax Act is amended by
9 changing Section 201 as follows:
10 (35 ILCS 5/201) (from Ch. 120, par. 2-201)
11 Sec. 201. Tax Imposed.
12 (a) In general. A tax measured by net income is hereby
13 imposed on every individual, corporation, trust and estate
14 for each taxable year ending after July 31, 1969 on the
15 privilege of earning or receiving income in or as a resident
16 of this State. Such tax shall be in addition to all other
17 occupation or privilege taxes imposed by this State or by any
18 municipal corporation or political subdivision thereof.
19 (b) Rates. The tax imposed by subsection (a) of this
20 Section shall be determined as follows, except as adjusted by
21 subsection (d-1):
22 (1) In the case of an individual, trust or estate,
23 for taxable years ending prior to July 1, 1989, an amount
24 equal to 2 1/2% of the taxpayer's net income for the
25 taxable year.
26 (2) In the case of an individual, trust or estate,
27 for taxable years beginning prior to July 1, 1989 and
28 ending after June 30, 1989, an amount equal to the sum of
29 (i) 2 1/2% of the taxpayer's net income for the period
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1 prior to July 1, 1989, as calculated under Section 202.3,
2 and (ii) 3% of the taxpayer's net income for the period
3 after June 30, 1989, as calculated under Section 202.3.
4 (3) In the case of an individual, trust or estate,
5 for taxable years beginning after June 30, 1989, an
6 amount equal to 3% of the taxpayer's net income for the
7 taxable year.
8 (4) (Blank).
9 (5) (Blank).
10 (6) In the case of a corporation, for taxable years
11 ending prior to July 1, 1989, an amount equal to 4% of
12 the taxpayer's net income for the taxable year.
13 (7) In the case of a corporation, for taxable years
14 beginning prior to July 1, 1989 and ending after June 30,
15 1989, an amount equal to the sum of (i) 4% of the
16 taxpayer's net income for the period prior to July 1,
17 1989, as calculated under Section 202.3, and (ii) 4.8% of
18 the taxpayer's net income for the period after June 30,
19 1989, as calculated under Section 202.3.
20 (8) In the case of a corporation, for taxable years
21 beginning after June 30, 1989, an amount equal to 4.8% of
22 the taxpayer's net income for the taxable year.
23 (c) Beginning on July 1, 1979 and thereafter, in
24 addition to such income tax, there is also hereby imposed the
25 Personal Property Tax Replacement Income Tax measured by net
26 income on every corporation (including Subchapter S
27 corporations), partnership and trust, for each taxable year
28 ending after June 30, 1979. Such taxes are imposed on the
29 privilege of earning or receiving income in or as a resident
30 of this State. The Personal Property Tax Replacement Income
31 Tax shall be in addition to the income tax imposed by
32 subsections (a) and (b) of this Section and in addition to
33 all other occupation or privilege taxes imposed by this State
34 or by any municipal corporation or political subdivision
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1 thereof.
2 (d) Additional Personal Property Tax Replacement Income
3 Tax Rates. The personal property tax replacement income tax
4 imposed by this subsection and subsection (c) of this Section
5 in the case of a corporation, other than a Subchapter S
6 corporation and except as adjusted by subsection (d-1), shall
7 be an additional amount equal to 2.85% of such taxpayer's net
8 income for the taxable year, except that beginning on January
9 1, 1981, and thereafter, the rate of 2.85% specified in this
10 subsection shall be reduced to 2.5%, and in the case of a
11 partnership, trust or a Subchapter S corporation shall be an
12 additional amount equal to 1.5% of such taxpayer's net income
13 for the taxable year.
14 (d-1) Rate reduction for certain foreign insurers. In
15 the case of a foreign insurer, as defined by Section 35A-5 of
16 the Illinois Insurance Code, whose state or country of
17 domicile imposes on insurers domiciled in Illinois a
18 retaliatory tax (excluding any insurer whose reinsurance
19 premiums assumed are 50% or more of its total insurance
20 premiums as determined under paragraph (2) of subsection (b)
21 of Section 304, except that for purposes of this
22 determination reinsurance premiums do not include assumed
23 premiums from inter-affiliate pooling arrangements),
24 beginning with taxable years ending on or after December 31,
25 1999 and ending with taxable years ending on or before
26 December 31, 2000, the sum of the rates of tax imposed by
27 subsections (b) and (d) shall be reduced (but not increased)
28 to the rate at which the total amount of tax imposed under
29 this Act, net of all credits allowed under this Act, shall
30 equal (i) the total amount of tax that would be imposed on
31 the foreign insurer's net income allocable to Illinois for
32 the taxable year by such foreign insurer's state or country
33 of domicile if that net income were subject to all income
34 taxes and taxes measured by net income imposed by such
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1 foreign insurer's state or country of domicile, net of all
2 credits allowed or (ii) a rate of zero if no such tax is
3 imposed on such income by the foreign insurer's state of
4 domicile.
5 (1) For the purposes of subsection (d-1), in no
6 event shall the sum of the rates of tax imposed by
7 subsections (b) and (d) be reduced below the rate at
8 which the sum of:
9 (A) the total amount of tax imposed on such
10 foreign insurer under this Act for a taxable year,
11 net of all credits allowed under this Act, plus
12 (B) the privilege tax imposed by Section 409
13 of the Illinois Insurance Code, the fire insurance
14 company tax imposed by Section 12 of the Fire
15 Investigation Act, and the fire department taxes
16 imposed under Section 11-10-1 of the Illinois
17 Municipal Code,
18 equals 1.25% of the net taxable premiums written for the
19 taxable year, as described by subsection (1) of Section
20 409 of the Illinois Insurance Code. This paragraph will
21 in no event increase the rates imposed under subsections
22 (b) and (d).
23 (2) Any reduction in the rates of tax imposed by
24 this subsection shall be applied first against the rates
25 imposed by subsection (b) and only after the tax imposed
26 by subsection (a) net of all credits allowed under this
27 Section other than the credit allowed under subsection
28 (i) has been reduced to zero, against the rates imposed
29 by subsection (d).
30 (3) The provisions of this subsection (d-1) are
31 effective only through December 31, 2000 and cease to be
32 effective on January 1, 2001; but this does not affect
33 any claim or obligation based upon the use or application
34 of this subsection for tax years ending on December 31,
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1 2000 or earlier.
2 (e) Investment credit. A taxpayer shall be allowed a
3 credit against the Personal Property Tax Replacement Income
4 Tax for investment in qualified property.
5 (1) A taxpayer shall be allowed a credit equal to
6 .5% of the basis of qualified property placed in service
7 during the taxable year, provided such property is placed
8 in service on or after July 1, 1984. There shall be
9 allowed an additional credit equal to .5% of the basis of
10 qualified property placed in service during the taxable
11 year, provided such property is placed in service on or
12 after July 1, 1986, and the taxpayer's base employment
13 within Illinois has increased by 1% or more over the
14 preceding year as determined by the taxpayer's employment
15 records filed with the Illinois Department of Employment
16 Security. Taxpayers who are new to Illinois shall be
17 deemed to have met the 1% growth in base employment for
18 the first year in which they file employment records with
19 the Illinois Department of Employment Security. The
20 provisions added to this Section by Public Act 85-1200
21 (and restored by Public Act 87-895) shall be construed as
22 declaratory of existing law and not as a new enactment.
23 If, in any year, the increase in base employment within
24 Illinois over the preceding year is less than 1%, the
25 additional credit shall be limited to that percentage
26 times a fraction, the numerator of which is .5% and the
27 denominator of which is 1%, but shall not exceed .5%.
28 The investment credit shall not be allowed to the extent
29 that it would reduce a taxpayer's liability in any tax
30 year below zero, nor may any credit for qualified
31 property be allowed for any year other than the year in
32 which the property was placed in service in Illinois. For
33 tax years ending on or after December 31, 1987, and on or
34 before December 31, 1988, the credit shall be allowed for
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1 the tax year in which the property is placed in service,
2 or, if the amount of the credit exceeds the tax liability
3 for that year, whether it exceeds the original liability
4 or the liability as later amended, such excess may be
5 carried forward and applied to the tax liability of the 5
6 taxable years following the excess credit years if the
7 taxpayer (i) makes investments which cause the creation
8 of a minimum of 2,000 full-time equivalent jobs in
9 Illinois, (ii) is located in an enterprise zone
10 established pursuant to the Illinois Enterprise Zone Act
11 and (iii) is certified by the Department of Commerce and
12 Community Affairs as complying with the requirements
13 specified in clause (i) and (ii) by July 1, 1986. The
14 Department of Commerce and Community Affairs shall notify
15 the Department of Revenue of all such certifications
16 immediately. For tax years ending after December 31,
17 1988, the credit shall be allowed for the tax year in
18 which the property is placed in service, or, if the
19 amount of the credit exceeds the tax liability for that
20 year, whether it exceeds the original liability or the
21 liability as later amended, such excess may be carried
22 forward and applied to the tax liability of the 5 taxable
23 years following the excess credit years. The credit shall
24 be 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, earlier credit
27 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 and signs that are real property, but not
33 including land or improvements to real property that
34 are not a structural component of a building such as
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1 landscaping, sewer lines, local access roads,
2 fencing, parking lots, and other appurtenances;
3 (B) is depreciable pursuant to Section 167 of
4 the Internal Revenue Code, except that "3-year
5 property" as defined in Section 168(c)(2)(A) of that
6 Code is not eligible for the credit provided by this
7 subsection (e);
8 (C) is acquired by purchase as defined in
9 Section 179(d) of the Internal Revenue Code;
10 (D) is used in Illinois by a taxpayer who is
11 primarily engaged in manufacturing, or in mining
12 coal or fluorite, or in retailing; and
13 (E) has not previously been used in Illinois
14 in such a manner and by such a person as would
15 qualify for the credit provided by this subsection
16 (e) or subsection (f).
17 (3) For purposes of this subsection (e),
18 "manufacturing" means the material staging and production
19 of tangible personal property by procedures commonly
20 regarded as manufacturing, processing, fabrication, or
21 assembling which changes some existing material into new
22 shapes, new qualities, or new combinations. For purposes
23 of this subsection (e) the term "mining" shall have the
24 same meaning as the term "mining" in Section 613(c) of
25 the Internal Revenue Code. For purposes of this
26 subsection (e), the term "retailing" means the sale of
27 tangible personal property or services rendered in
28 conjunction with the sale of tangible consumer goods or
29 commodities.
30 (4) The basis of qualified property shall be the
31 basis used to compute the depreciation deduction for
32 federal income tax purposes.
33 (5) If the basis of the property for federal income
34 tax depreciation purposes is increased after it has been
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1 placed in service in Illinois by the taxpayer, the amount
2 of such increase shall be deemed property placed in
3 service on the date of such increase in basis.
4 (6) The term "placed in service" shall have the
5 same meaning as under Section 46 of the Internal Revenue
6 Code.
7 (7) If during any taxable year, any property ceases
8 to be qualified property in the hands of the taxpayer
9 within 48 months after being placed in service, or the
10 situs of any qualified property is moved outside Illinois
11 within 48 months after being placed in service, the
12 Personal Property Tax Replacement Income Tax for such
13 taxable year shall be increased. Such increase shall be
14 determined by (i) recomputing the investment credit which
15 would have been allowed for the year in which credit for
16 such property was originally allowed by eliminating such
17 property from such computation and, (ii) subtracting such
18 recomputed credit from the amount of credit previously
19 allowed. For the purposes of this paragraph (7), a
20 reduction of the basis of qualified property resulting
21 from a redetermination of the purchase price shall be
22 deemed a disposition of qualified property to the extent
23 of such reduction.
24 (8) Unless the investment credit is extended by
25 law, the basis of qualified property shall not include
26 costs incurred after December 31, 2003, except for costs
27 incurred pursuant to a binding contract entered into on
28 or before December 31, 2003.
29 (9) Each taxable year, a partnership may elect to
30 pass through to its partners the credits to which the
31 partnership is entitled under this subsection (e) for the
32 taxable year. A partner may use the credit allocated to
33 him or her under this paragraph only against the tax
34 imposed in subsections (c) and (d) of this Section. If
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1 the partnership makes that election, those credits shall
2 be allocated among the partners in the partnership in
3 accordance with the rules set forth in Section 704(b) of
4 the Internal Revenue Code, and the rules promulgated
5 under that Section, and the allocated amount of the
6 credits shall be allowed to the partners for that taxable
7 year. The partnership shall make this election on its
8 Personal Property Tax Replacement Income Tax return for
9 that taxable year. The election to pass through the
10 credits shall be irrevocable.
11 (f) Investment credit; Enterprise Zone.
12 (1) A taxpayer shall be allowed a credit against
13 the tax imposed by subsections (a) and (b) of this
14 Section for investment in qualified property which is
15 placed in service in an Enterprise Zone created pursuant
16 to the Illinois Enterprise Zone Act. For partners and for
17 shareholders of Subchapter S corporations, there shall be
18 allowed a credit under this subsection (f) to be
19 determined in accordance with the determination of income
20 and distributive share of income under Sections 702 and
21 704 and Subchapter S of the Internal Revenue Code. The
22 credit shall be .5% of the basis for such property. The
23 credit shall be available only in the taxable year in
24 which the property is placed in service in the Enterprise
25 Zone and shall not be allowed to the extent that it would
26 reduce a taxpayer's liability for the tax imposed by
27 subsections (a) and (b) of this Section to below zero.
28 For tax years ending on or after December 31, 1985, 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 year
4 that is available to offset a liability, the credit
5 accruing first in time shall be applied first.
6 (2) The term qualified property means property
7 which:
8 (A) is tangible, whether new or used,
9 including buildings and structural components of
10 buildings;
11 (B) is depreciable pursuant to Section 167 of
12 the Internal Revenue Code, except that "3-year
13 property" as defined in Section 168(c)(2)(A) of that
14 Code is not eligible for the credit provided by this
15 subsection (f);
16 (C) is acquired by purchase as defined in
17 Section 179(d) of the Internal Revenue Code;
18 (D) is used in the Enterprise Zone by the
19 taxpayer; and
20 (E) has not been previously used in Illinois
21 in such a manner and by such a person as would
22 qualify for the credit provided by this subsection
23 (f) or subsection (e).
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 the Enterprise Zone by the taxpayer,
30 the amount of such increase shall be deemed property
31 placed in service on the date of such increase in basis.
32 (5) The term "placed in service" shall have the
33 same meaning as under Section 46 of the Internal Revenue
34 Code.
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1 (6) If during any taxable year, any property ceases
2 to be qualified property in the hands of the taxpayer
3 within 48 months after being placed in service, or the
4 situs of any qualified property is moved outside the
5 Enterprise Zone within 48 months after being placed in
6 service, the tax imposed under subsections (a) and (b) of
7 this Section for such taxable year shall be increased.
8 Such increase shall be determined by (i) recomputing the
9 investment credit which would have been allowed for the
10 year in which credit for such property was originally
11 allowed by eliminating such property from such
12 computation, and (ii) subtracting such recomputed credit
13 from the amount of credit previously allowed. For the
14 purposes of this paragraph (6), a reduction of the basis
15 of qualified property resulting from a redetermination of
16 the purchase price shall be deemed a disposition of
17 qualified property to the extent of such reduction.
18 (g) Jobs Tax Credit; Enterprise Zone and Foreign
19 Trade Zone or Sub-Zone.
20 (1) A taxpayer conducting a trade or business in an
21 enterprise zone or a High Impact Business designated by
22 the Department of Commerce and Community Affairs
23 conducting a trade or business in a federally designated
24 Foreign Trade Zone or Sub-Zone shall be allowed a credit
25 against the tax imposed by subsections (a) and (b) of
26 this Section in the amount of $500 per eligible employee
27 hired to work in the zone during the taxable year.
28 (2) To qualify for the credit:
29 (A) the taxpayer must hire 5 or more eligible
30 employees to work in an enterprise zone or federally
31 designated Foreign Trade Zone or Sub-Zone during the
32 taxable year;
33 (B) the taxpayer's total employment within the
34 enterprise zone or federally designated Foreign
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1 Trade Zone or Sub-Zone must increase by 5 or more
2 full-time employees beyond the total employed in
3 that zone at the end of the previous tax year for
4 which a jobs tax credit under this Section was
5 taken, or beyond the total employed by the taxpayer
6 as of December 31, 1985, whichever is later; and
7 (C) the eligible employees must be employed
8 180 consecutive days in order to be deemed hired for
9 purposes of this subsection.
10 (3) An "eligible employee" means an employee who
11 is:
12 (A) Certified by the Department of Commerce
13 and Community Affairs as "eligible for services"
14 pursuant to regulations promulgated in accordance
15 with Title II of the Job Training Partnership Act,
16 Training Services for the Disadvantaged or Title III
17 of the Job Training Partnership Act, Employment and
18 Training Assistance for Dislocated Workers Program.
19 (B) Hired after the enterprise zone or
20 federally designated Foreign Trade Zone or Sub-Zone
21 was designated or the trade or business was located
22 in that zone, whichever is later.
23 (C) Employed in the enterprise zone or Foreign
24 Trade Zone or Sub-Zone. An employee is employed in
25 an enterprise zone or federally designated Foreign
26 Trade Zone or Sub-Zone if his services are rendered
27 there or it is the base of operations for the
28 services performed.
29 (D) A full-time employee working 30 or more
30 hours per week.
31 (4) For tax years ending on or after December 31,
32 1985 and prior to December 31, 1988, the credit shall be
33 allowed for the tax year in which the eligible employees
34 are hired. For tax years ending on or after December 31,
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1 1988, the credit shall be allowed for the tax year
2 immediately following the tax year in which the eligible
3 employees are hired. If the amount of the credit exceeds
4 the tax liability for that year, whether it exceeds the
5 original liability or the liability as later amended,
6 such excess may be carried forward and applied to the tax
7 liability of the 5 taxable years following the excess
8 credit year. The credit shall be applied to the earliest
9 year for which there is a liability. If there is credit
10 from more than one tax year that is available to offset a
11 liability, earlier credit shall be applied first.
12 (5) The Department of Revenue shall promulgate such
13 rules and regulations as may be deemed necessary to carry
14 out the purposes of this subsection (g).
15 (6) The credit shall be available for eligible
16 employees hired on or after January 1, 1986.
17 (h) Investment credit; High Impact Business.
18 (1) Subject to subsection (b) of Section 5.5 of the
19 Illinois Enterprise Zone Act, a taxpayer shall be allowed
20 a credit against the tax imposed by subsections (a) and
21 (b) of this Section for investment in qualified property
22 which is placed in service by a Department of Commerce
23 and Community Affairs designated High Impact Business.
24 The credit shall be .5% of the basis for such property.
25 The credit shall not be available until the minimum
26 investments in qualified property set forth in Section
27 5.5 of the Illinois Enterprise Zone Act have been
28 satisfied and shall not be allowed to the extent that it
29 would reduce a taxpayer's liability for the tax imposed
30 by subsections (a) and (b) of this Section to below zero.
31 The credit applicable to such minimum investments shall
32 be taken in the taxable year in which such minimum
33 investments have been completed. The credit for
34 additional investments beyond the minimum investment by a
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1 designated high impact business shall be available only
2 in the taxable year in which the property is placed in
3 service and shall not be allowed to the extent that it
4 would reduce a taxpayer's liability for the tax imposed
5 by subsections (a) and (b) of this Section to below zero.
6 For tax years ending on or after December 31, 1987, the
7 credit shall be allowed for the tax year in which the
8 property is placed in service, or, if the amount of the
9 credit exceeds the tax liability for that year, whether
10 it exceeds the original liability or the liability as
11 later amended, such excess may be carried forward and
12 applied to the tax liability of the 5 taxable years
13 following the excess credit year. The credit shall be
14 applied to the earliest year for which there is a
15 liability. If there is credit from more than one tax
16 year that is available to offset a liability, the credit
17 accruing first in time shall be applied first.
18 Changes made in this subdivision (h)(1) by Public
19 Act 88-670 restore changes made by Public Act 85-1182 and
20 reflect existing law.
21 (2) The term qualified property means property
22 which:
23 (A) is tangible, whether new or used,
24 including buildings and structural components of
25 buildings;
26 (B) is depreciable pursuant to Section 167 of
27 the Internal Revenue Code, except that "3-year
28 property" as defined in Section 168(c)(2)(A) of that
29 Code is not eligible for the credit provided by this
30 subsection (h);
31 (C) is acquired by purchase as defined in
32 Section 179(d) of the Internal Revenue Code; and
33 (D) is not eligible for the Enterprise Zone
34 Investment Credit provided by subsection (f) of this
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1 Section.
2 (3) The basis of qualified property shall be the
3 basis used to compute the depreciation deduction for
4 federal income tax purposes.
5 (4) If the basis of the property for federal income
6 tax depreciation purposes is increased after it has been
7 placed in service in a federally designated Foreign Trade
8 Zone or Sub-Zone located in Illinois by the taxpayer, the
9 amount of such increase shall be deemed property placed
10 in service on the date of such increase in basis.
11 (5) The term "placed in service" shall have the
12 same meaning as under Section 46 of the Internal Revenue
13 Code.
14 (6) If during any taxable year ending on or before
15 December 31, 1996, any property ceases to be qualified
16 property in the hands of the taxpayer within 48 months
17 after being placed in service, or the situs of any
18 qualified property is moved outside Illinois within 48
19 months after being placed in service, the tax imposed
20 under subsections (a) and (b) of this Section for such
21 taxable year shall be increased. Such increase shall be
22 determined by (i) recomputing the investment credit which
23 would have been allowed for the year in which credit for
24 such property was originally allowed by eliminating such
25 property from such computation, and (ii) subtracting such
26 recomputed credit from the amount of credit previously
27 allowed. For the purposes of this paragraph (6), a
28 reduction of the basis of qualified property resulting
29 from a redetermination of the purchase price shall be
30 deemed a disposition of qualified property to the extent
31 of such reduction.
32 (7) Beginning with tax years ending after December
33 31, 1996, if a taxpayer qualifies for the credit under
34 this subsection (h) and thereby is granted a tax
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1 abatement and the taxpayer relocates its entire facility
2 in violation of the explicit terms and length of the
3 contract under Section 18-183 of the Property Tax Code,
4 the tax imposed under subsections (a) and (b) of this
5 Section shall be increased for the taxable year in which
6 the taxpayer relocated its facility by an amount equal to
7 the amount of credit received by the taxpayer under this
8 subsection (h).
9 (i) A credit shall be allowed against the tax imposed by
10 subsections (a) and (b) of this Section for the tax imposed
11 by subsections (c) and (d) of this Section. This credit
12 shall be computed by multiplying the tax imposed by
13 subsections (c) and (d) of this Section by a fraction, the
14 numerator of which is base income allocable to Illinois and
15 the denominator of which is Illinois base income, and further
16 multiplying the product by the tax rate imposed by
17 subsections (a) and (b) of this Section.
18 Any credit earned on or after December 31, 1986 under
19 this subsection which is unused in the year the credit is
20 computed because it exceeds the tax liability imposed by
21 subsections (a) and (b) for that year (whether it exceeds the
22 original liability or the liability as later amended) may be
23 carried forward and applied to the tax liability imposed by
24 subsections (a) and (b) of the 5 taxable years following the
25 excess credit year. This credit shall be applied first to
26 the earliest year for which there is a liability. If there
27 is a credit under this subsection from more than one tax year
28 that is available to offset a liability the earliest credit
29 arising under this subsection shall be applied first.
30 If, during any taxable year ending on or after December
31 31, 1986, the tax imposed by subsections (c) and (d) of this
32 Section for which a taxpayer has claimed a credit under this
33 subsection (i) is reduced, the amount of credit for such tax
34 shall also be reduced. Such reduction shall be determined by
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1 recomputing the credit to take into account the reduced tax
2 imposed by subsection (c) and (d). If any portion of the
3 reduced amount of credit has been carried to a different
4 taxable year, an amended return shall be filed for such
5 taxable year to reduce the amount of credit claimed.
6 (j) Training expense credit. Beginning with tax years
7 ending on or after December 31, 1986, a taxpayer shall be
8 allowed a credit against the tax imposed by subsection (a)
9 and (b) under this Section for all amounts paid or accrued,
10 on behalf of all persons employed by the taxpayer in Illinois
11 or Illinois residents employed outside of Illinois by a
12 taxpayer, for educational or vocational training in
13 semi-technical or technical fields or semi-skilled or skilled
14 fields, which were deducted from gross income in the
15 computation of taxable income. The credit against the tax
16 imposed by subsections (a) and (b) shall be 1.6% of such
17 training expenses. For partners and for shareholders of
18 subchapter S corporations, there shall be allowed a credit
19 under this subsection (j) to be determined in accordance with
20 the determination of income and distributive share of income
21 under Sections 702 and 704 and subchapter S of the Internal
22 Revenue Code.
23 Any credit allowed under this subsection which is unused
24 in the year the credit is earned may be carried forward to
25 each of the 5 taxable years following the year for which the
26 credit is first computed until it is used. This credit shall
27 be applied first to the earliest year for which there is a
28 liability. If there is a credit under this subsection from
29 more than one tax year that is available to offset a
30 liability the earliest credit arising under this subsection
31 shall be applied first.
32 (k) Research and development credit.
33 Beginning with tax years ending after July 1, 1990, a
34 taxpayer shall be allowed a credit against the tax imposed by
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1 subsections (a) and (b) of this Section for increasing
2 research activities in this State. The credit allowed
3 against the tax imposed by subsections (a) and (b) shall be
4 equal to 6 1/2% of the qualifying expenditures for increasing
5 research activities in this State.
6 For purposes of this subsection, "qualifying
7 expenditures" means the qualifying expenditures as defined
8 for the federal credit for increasing research activities
9 which would be allowable under Section 41 of the Internal
10 Revenue Code and which are conducted in this State,
11 "qualifying expenditures for increasing research activities
12 in this State" means the excess of qualifying expenditures
13 for the taxable year in which incurred over qualifying
14 expenditures for the base period, "qualifying expenditures
15 for the base period" means the average of the qualifying
16 expenditures for each year in the base period, and "base
17 period" means the 3 taxable years immediately preceding the
18 taxable year for which the determination is being made.
19 Any credit in excess of the tax liability for the taxable
20 year may be carried forward. A taxpayer may elect to have the
21 unused credit shown on its final completed return carried
22 over as a credit against the tax liability for the following
23 5 taxable years or until it has been fully used, whichever
24 occurs first.
25 If an unused credit is carried forward to a given year
26 from 2 or more earlier years, that credit arising in the
27 earliest year will be applied first against the tax liability
28 for the given year. If a tax liability for the given year
29 still remains, the credit from the next earliest year will
30 then be applied, and so on, until all credits have been used
31 or no tax liability for the given year remains. Any
32 remaining unused credit or credits then will be carried
33 forward to the next following year in which a tax liability
34 is incurred, except that no credit can be carried forward to
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1 a year which is more than 5 years after the year in which the
2 expense for which the credit is given was incurred.
3 Unless extended by law, the credit shall not include
4 costs incurred after December 31, 2004, except for costs
5 incurred pursuant to a binding contract entered into on or
6 before December 31, 2004.
7 (l) Environmental Remediation Tax Credit.
8 (i) For tax years ending after December 31, 1997
9 and on or before December 31, 2001, a taxpayer shall be
10 allowed a credit against the tax imposed by subsections
11 (a) and (b) of this Section for certain amounts paid for
12 unreimbursed eligible remediation costs, as specified in
13 this subsection. For purposes of this Section,
14 "unreimbursed eligible remediation costs" means costs
15 approved by the Illinois Environmental Protection Agency
16 ("Agency") under Section 58.14 of the Environmental
17 Protection Act that were paid in performing environmental
18 remediation at a site for which a No Further Remediation
19 Letter was issued by the Agency and recorded under
20 Section 58.10 of the Environmental Protection Act. The
21 credit must be claimed for the taxable year in which
22 Agency approval of the eligible remediation costs is
23 granted. The credit is not available to any taxpayer if
24 the taxpayer or any related party caused or contributed
25 to, in any material respect, a release of regulated
26 substances on, in, or under the site that was identified
27 and addressed by the remedial action pursuant to the Site
28 Remediation Program of the Environmental Protection Act.
29 After the Pollution Control Board rules are adopted
30 pursuant to the Illinois Administrative Procedure Act for
31 the administration and enforcement of Section 58.9 of the
32 Environmental Protection Act, determinations as to credit
33 availability for purposes of this Section shall be made
34 consistent with those rules. For purposes of this
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1 Section, "taxpayer" includes a person whose tax
2 attributes the taxpayer has succeeded to under Section
3 381 of the Internal Revenue Code and "related party"
4 includes the persons disallowed a deduction for losses by
5 paragraphs (b), (c), and (f)(1) of Section 267 of the
6 Internal Revenue Code by virtue of being a related
7 taxpayer, as well as any of its partners. The credit
8 allowed against the tax imposed by subsections (a) and
9 (b) shall be equal to 25% of the unreimbursed eligible
10 remediation costs in excess of $100,000 per site, except
11 that the $100,000 threshold shall not apply to any site
12 contained in an enterprise zone as determined by the
13 Department of Commerce and Community Affairs. The total
14 credit allowed shall not exceed $40,000 per year with a
15 maximum total of $150,000 per site. For partners and
16 shareholders of subchapter S corporations, there shall be
17 allowed a credit under this subsection to be determined
18 in accordance with the determination of income and
19 distributive share of income under Sections 702 and 704
20 of subchapter S of the Internal Revenue Code.
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.
25 The term "unused credit" does not include any amounts of
26 unreimbursed eligible remediation costs in excess of the
27 maximum credit per site authorized under paragraph (i).
28 This credit shall be applied first to the earliest year
29 for which there is a liability. If there is a credit
30 under this subsection from more than one tax year that is
31 available to offset a liability, the earliest credit
32 arising under this subsection shall be applied first. A
33 credit allowed under this subsection may be sold to a
34 buyer as part of a sale of all or part of the remediation
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1 site for which the credit was granted. The purchaser of
2 a remediation site and the tax credit shall succeed to
3 the unused credit and remaining carry-forward period of
4 the seller. To perfect the transfer, the assignor shall
5 record the transfer in the chain of title for the site
6 and provide written notice to the Director of the
7 Illinois Department of Revenue of the assignor's intent
8 to sell the remediation site and the amount of the tax
9 credit to be transferred as a portion of the sale. In no
10 event may a credit be transferred to any taxpayer if the
11 taxpayer or a related party would not be eligible under
12 the provisions of subsection (i).
13 (iii) For purposes of this Section, the term "site"
14 shall have the same meaning as under Section 58.2 of the
15 Environmental Protection Act.
16 (Source: P.A. 89-235, eff. 8-4-95; 89-519, eff. 7-18-96;
17 89-591, eff. 8-1-96; 90-123, eff. 7-21-97; 90-458, eff.
18 8-17-97; 90-605, eff. 6-30-98; 90-655, eff. 7-30-98; 90-717,
19 eff. 8-7-98; 90-792, eff. 1-1-99; revised 9-16-98.)
20 Section 10. The Illinois Insurance Code is amended by
21 changing Section 412 as follows:
22 (215 ILCS 5/412) (from Ch. 73, par. 1024)
23 Sec. 412. Refunds; penalties; collection.
24 (1) (a) Whenever it appears to the satisfaction of the
25 Director that because of some mistake of fact, error in
26 calculation, or erroneous interpretation of a statute of this
27 or any other state, any authorized company has paid to him,
28 pursuant to any provision of law, taxes, fees, or other
29 charges in excess of the amount legally chargeable against
30 it, during the 6 year period immediately preceding the
31 discovery of such overpayment, he shall have power to refund
32 to such company the amount of the excess or excesses by
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1 applying the amount or amounts thereof toward the payment of
2 taxes, fees, or other charges already due, or which may
3 thereafter become due from that company until such excess or
4 excesses have been fully refunded, or upon a written request
5 from the authorized company, the Director shall provide at
6 his discretion, to make a cash refund within 120 days after
7 receipt of the written request if all necessary information
8 has been filed with the Department in order for it to perform
9 an audit of the annual return for the year in which the
10 overpayment occurred or within 120 days after the date the
11 Department receives all the necessary information to perform
12 such audit. The Director shall not provide a cash refund if
13 there are insufficient funds in the Insurance Premium Tax
14 Refund Fund to provide a cash refund, if the amount of the
15 overpayment is less than $100, or if the amount of the
16 overpayment can be fully offset against the taxpayer's
17 estimated liability for the year following the year of the
18 cash refund request. Any cash refund shall be paid from the
19 Insurance Premium Tax Refund Fund, a special fund hereby
20 created in the State treasury.
21 (b) Beginning January 1, 2000 and thereafter, the
22 Department shall deposit a percentage of the amounts
23 collected under Sections 409, 444, and 444.1 of this Code
24 into the Insurance Premium Tax Refund Fund. The percentage
25 deposited into the Insurance Premium Tax Refund Fund shall be
26 the annual percentage. The annual percentage shall be
27 calculated as a fraction, the numerator of which shall be the
28 amount of cash refunds approved by the Director for payment
29 and paid during the preceding calendar year as a result of
30 overpayment of tax liability under Sections 409, 444, and
31 444.1 of this Code and the denominator of which shall be the
32 amounts collected pursuant to Sections 409, 444, and 444.1 of
33 this Code during the preceding calendar year. However, if
34 there were no cash refunds paid in a preceding calendar year,
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1 the Department shall deposit 5% of the amount collected in
2 that preceding calendar year pursuant to Sections 409, 444,
3 and 444.1 of this Code into the Insurance Premium Tax Refund
4 Fund instead of an amount calculated by using the annual
5 percentage.
6 (c) Beginning July 1, 1999, moneys in the Insurance
7 Premium Tax Refund Fund shall be expended exclusively for the
8 purpose of paying cash refunds resulting from overpayment of
9 tax liability under Sections 409, 444, and 444.1 of this Code
10 as determined by the Director pursuant to subsection 1(a) of
11 this Section. Cash refunds made in accordance with this
12 Section may be made from the Insurance Premium Tax Refund
13 Fund only to the extent that amounts have been deposited and
14 retained in the Insurance Premium Tax Refund Fund.
15 (d) This Section shall constitute an irrevocable and
16 continuing appropriation from the Insurance Premium Tax
17 Refund Fund for the purpose of paying cash refunds pursuant
18 to the provisions of this Section.
19 (2) When any insurance company or any surplus line
20 producer fails to file any tax return required under Sections
21 408.1, 409, 444, 444.1 and 445 of this Code or Section 12 of
22 the Fire Investigation Act on the date prescribed, including
23 any extensions, there shall be added as a penalty $200 or 5%
24 of the amount of such tax, whichever is greater, for each
25 month or part of a month of failure to file, the entire
26 penalty not to exceed $1,000 or 25% of the tax due, whichever
27 is greater.
28 (3) (a) When any insurance company or any surplus line
29 producer fails to pay the full amount due under the
30 provisions of this Section, Sections 408.1, 409, 444, 444.1
31 or 445 of this Code, or Section 12 of the Fire Investigation
32 Act, there shall be added to the amount due as a penalty an
33 amount equal to 5% of the deficiency.
34 (b) If such failure to pay is determined by the Director
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1 to be wilful, after a hearing under Sections 402 and 403,
2 there shall be added to the tax as a penalty an amount equal
3 to the greater of 25% of the deficiency or 5% of the amount
4 due and unpaid for each month or part of a month that the
5 deficiency remains unpaid commencing with the date that the
6 amount becomes due. Such amount shall be in lieu of any
7 determined under paragraph (a).
8 (4) Any insurance company or any surplus line producer
9 which fails to pay the full amount due under this Section or
10 Sections 408.1, 409, 444, 444.1 or 445 of this Code, or
11 Section 12 of the Fire Investigation Act is liable, in
12 addition to the tax and any penalties, for interest on such
13 deficiency at the rate of 12% per annum, or at such higher
14 adjusted rates as are or may be established under subsection
15 (b) of Section 6621 of the Internal Revenue Code, from the
16 date that payment of any such tax was due, determined without
17 regard to any extensions, to the date of payment of such
18 amount.
19 (5) The Director, through the Attorney General, may
20 institute an action in the name of the People of the State of
21 Illinois, in any court of competent jurisdiction, for the
22 recovery of the amount of such taxes, fees, and penalties
23 due, and prosecute the same to final judgment, and take such
24 steps as are necessary to collect the same.
25 (6) In the event that the certificate of authority of a
26 foreign or alien company is revoked for any cause or the
27 company withdraws from this State prior to the renewal date
28 of the certificate of authority as provided in Section 114,
29 the company may recover the amount of any such tax paid in
30 advance. Except as provided in this subsection, no revocation
31 or withdrawal excuses payment of or constitutes grounds for
32 the recovery of any taxes or penalties imposed by this Code.
33 (7) When an insurance company or domestic affiliated
34 group fails to pay the full amount of any fee of $100 or more
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1 due under Section 408 of this Code, there shall be added to
2 the amount due as a penalty the greater of $50 or an amount
3 equal to 5% of the deficiency for each month or part of a
4 month that the deficiency remains unpaid.
5 (Source: P.A. 87-108.)
6 Section 99. Effective date. This Act takes effect upon
7 becoming law.