[ Search ] [ PDF text ] [ Legislation ]
[ Home ] [ Back ] [ Bottom ]
| [ Introduced ] | [ Engrossed ] | [ House Amendment 001 ] |
| [ House Amendment 002 ] | [ House Amendment 003 ] |
92_SB2212enr SB2212 Enrolled LRB9215616SMdv 1 AN ACT in relation to taxes. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Illinois Income Tax Act is amended by 5 changing Sections 201, 202, 203, 209, 502, 506, 601.1, 701, 6 905, 911, and 1501 as follows: 7 (35 ILCS 5/201) (from Ch. 120, par. 2-201) 8 Sec. 201. Tax Imposed. 9 (a) In general. A tax measured by net income is hereby 10 imposed on every individual, corporation, trust and estate 11 for each taxable year ending after July 31, 1969 on the 12 privilege of earning or receiving income in or as a resident 13 of this State. Such tax shall be in addition to all other 14 occupation or privilege taxes imposed by this State or by any 15 municipal corporation or political subdivision thereof. 16 (b) Rates. The tax imposed by subsection (a) of this 17 Section shall be determined as follows, except as adjusted by 18 subsection (d-1): 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, an SB2212 Enrolled -2- LRB9215616SMdv 1 amount equal to 3% of the taxpayer's net income for the 2 taxable year. 3 (4) (Blank). 4 (5) (Blank). 5 (6) In the case of a corporation, for taxable years 6 ending prior to July 1, 1989, an amount equal to 4% of 7 the taxpayer's net income for the taxable year. 8 (7) In the case of a corporation, for taxable years 9 beginning prior to July 1, 1989 and ending after June 30, 10 1989, an amount equal to the sum of (i) 4% of the 11 taxpayer's net income for the period prior to July 1, 12 1989, as calculated under Section 202.3, and (ii) 4.8% of 13 the taxpayer's net income for the period after June 30, 14 1989, as calculated under Section 202.3. 15 (8) In the case of a corporation, for taxable years 16 beginning after June 30, 1989, an amount equal to 4.8% of 17 the taxpayer's net income for the taxable year. 18 (c) Personal Property Tax Replacement Income Tax. 19 Beginning on July 1, 1979 and thereafter, in addition to such 20 income tax, there is also hereby imposed the Personal 21 Property Tax Replacement Income Tax measured by net income on 22 every corporation (including Subchapter S corporations), 23 partnership and trust, for each taxable year ending after 24 June 30, 1979. Such taxes are imposed on the privilege of 25 earning or receiving income in or as a resident of this 26 State. The Personal Property Tax Replacement Income Tax 27 shall be in addition to the income tax imposed by subsections 28 (a) and (b) of this Section and in addition to all other 29 occupation or privilege taxes imposed by this State or by any 30 municipal corporation or political subdivision thereof. 31 (d) Additional Personal Property Tax Replacement Income 32 Tax Rates. The personal property tax replacement income tax 33 imposed by this subsection and subsection (c) of this Section 34 in the case of a corporation, other than a Subchapter S SB2212 Enrolled -3- LRB9215616SMdv 1 corporation and except as adjusted by subsection (d-1), shall 2 be an additional amount equal to 2.85% of such taxpayer's net 3 income for the taxable year, except that beginning on January 4 1, 1981, and thereafter, the rate of 2.85% specified in this 5 subsection shall be reduced to 2.5%, and in the case of a 6 partnership, trust or a Subchapter S corporation shall be an 7 additional amount equal to 1.5% of such taxpayer's net income 8 for the taxable year. 9 (d-1) Rate reduction for certain foreign insurers. In 10 the case of a foreign insurer, as defined by Section 35A-5 of 11 the Illinois Insurance Code, whose state or country of 12 domicile imposes on insurers domiciled in Illinois a 13 retaliatory tax (excluding any insurer whose premiums from 14 reinsurance assumed are 50% or more of its total insurance 15 premiums as determined under paragraph (2) of subsection (b) 16 of Section 304, except that for purposes of this 17 determination premiums from reinsurance do not include 18 premiums from inter-affiliate reinsurance arrangements), 19 beginning with taxable years ending on or after December 31, 20 1999, the sum of the rates of tax imposed by subsections (b) 21 and (d) shall be reduced (but not increased) to the rate at 22 which the total amount of tax imposed under this Act, net of 23 all credits allowed under this Act, shall equal (i) the total 24 amount of tax that would be imposed on the foreign insurer's 25 net income allocable to Illinois for the taxable year by such 26 foreign insurer's state or country of domicile if that net 27 income were subject to all income taxes and taxes measured by 28 net income imposed by such foreign insurer's state or country 29 of domicile, net of all credits allowed or (ii) a rate of 30 zero if no such tax is imposed on such income by the foreign 31 insurer's state of domicile. For the purposes of this 32 subsection (d-1), an inter-affiliate includes a mutual 33 insurer under common management. 34 (1) For the purposes of subsection (d-1), in no SB2212 Enrolled -4- LRB9215616SMdv 1 event shall the sum of the rates of tax imposed by 2 subsections (b) and (d) be reduced below the rate at 3 which the sum of: 4 (A) the total amount of tax imposed on such 5 foreign insurer under this Act for a taxable year, 6 net of all credits allowed under this Act, plus 7 (B) the privilege tax imposed by Section 409 8 of the Illinois Insurance Code, the fire insurance 9 company tax imposed by Section 12 of the Fire 10 Investigation Act, and the fire department taxes 11 imposed under Section 11-10-1 of the Illinois 12 Municipal Code, 13 equals 1.25% of the net taxable premiums written for the 14 taxable year, as described by subsection (1) of Section 15 409 of the Illinois Insurance Code. This paragraph will 16 in no event increase the rates imposed under subsections 17 (b) and (d). 18 (2) Any reduction in the rates of tax imposed by 19 this subsection shall be applied first against the rates 20 imposed by subsection (b) and only after the tax imposed 21 by subsection (a) net of all credits allowed under this 22 Section other than the credit allowed under subsection 23 (i) has been reduced to zero, against the rates imposed 24 by subsection (d). 25 This subsection (d-1) is exempt from the provisions of 26 Section 250. 27 (e) Investment credit. A taxpayer shall be allowed a 28 credit against the Personal Property Tax Replacement Income 29 Tax for investment in qualified property. 30 (1) A taxpayer shall be allowed a credit equal to 31 .5% of the basis of qualified property placed in service 32 during the taxable year, provided such property is placed 33 in service on or after July 1, 1984. There shall be 34 allowed an additional credit equal to .5% of the basis of SB2212 Enrolled -5- LRB9215616SMdv 1 qualified property placed in service during the taxable 2 year, provided such property is placed in service on or 3 after July 1, 1986, and the taxpayer's base employment 4 within Illinois has increased by 1% or more over the 5 preceding year as determined by the taxpayer's employment 6 records filed with the Illinois Department of Employment 7 Security. Taxpayers who are new to Illinois shall be 8 deemed to have met the 1% growth in base employment for 9 the first year in which they file employment records with 10 the Illinois Department of Employment Security. The 11 provisions added to this Section by Public Act 85-1200 12 (and restored by Public Act 87-895) shall be construed as 13 declaratory of existing law and not as a new enactment. 14 If, in any year, the increase in base employment within 15 Illinois over the preceding year is less than 1%, the 16 additional credit shall be limited to that percentage 17 times a fraction, the numerator of which is .5% and the 18 denominator of which is 1%, but shall not exceed .5%. 19 The investment credit shall not be allowed to the extent 20 that it would reduce a taxpayer's liability in any tax 21 year below zero, nor may any credit for qualified 22 property be allowed for any year other than the year in 23 which the property was placed in service in Illinois. For 24 tax years ending on or after December 31, 1987, and on or 25 before December 31, 1988, the credit shall be allowed for 26 the tax year in which the property is placed in service, 27 or, if the amount of the credit exceeds the tax liability 28 for that year, whether it exceeds the original liability 29 or the liability as later amended, such excess may be 30 carried forward and applied to the tax liability of the 5 31 taxable years following the excess credit years if the 32 taxpayer (i) makes investments which cause the creation 33 of a minimum of 2,000 full-time equivalent jobs in 34 Illinois, (ii) is located in an enterprise zone SB2212 Enrolled -6- LRB9215616SMdv 1 established pursuant to the Illinois Enterprise Zone Act 2 and (iii) is certified by the Department of Commerce and 3 Community Affairs as complying with the requirements 4 specified in clause (i) and (ii) by July 1, 1986. The 5 Department of Commerce and Community Affairs shall notify 6 the Department of Revenue of all such certifications 7 immediately. For tax years ending after December 31, 8 1988, the credit shall be allowed for the tax year in 9 which the property is placed in service, or, if the 10 amount of the credit exceeds the tax liability for that 11 year, whether it exceeds the original liability or the 12 liability as later amended, such excess may be carried 13 forward and applied to the tax liability of the 5 taxable 14 years following the excess credit years. The credit shall 15 be applied to the earliest year for which there is a 16 liability. If there is credit from more than one tax year 17 that is available to offset a liability, earlier credit 18 shall be applied first. 19 (2) The term "qualified property" means property 20 which: 21 (A) is tangible, whether new or used, 22 including buildings and structural components of 23 buildings and signs that are real property, but not 24 including land or improvements to real property that 25 are not a structural component of a building such as 26 landscaping, sewer lines, local access roads, 27 fencing, parking lots, and other appurtenances; 28 (B) is depreciable pursuant to Section 167 of 29 the Internal Revenue Code, except that "3-year 30 property" as defined in Section 168(c)(2)(A) of that 31 Code is not eligible for the credit provided by this 32 subsection (e); 33 (C) is acquired by purchase as defined in 34 Section 179(d) of the Internal Revenue Code; SB2212 Enrolled -7- LRB9215616SMdv 1 (D) is used in Illinois by a taxpayer who is 2 primarily engaged in manufacturing, or in mining 3 coal or fluorite, or in retailing; and 4 (E) has not previously been used in Illinois 5 in such a manner and by such a person as would 6 qualify for the credit provided by this subsection 7 (e) or subsection (f). 8 (3) For purposes of this subsection (e), 9 "manufacturing" means the material staging and production 10 of tangible personal property by procedures commonly 11 regarded as manufacturing, processing, fabrication, or 12 assembling which changes some existing material into new 13 shapes, new qualities, or new combinations. For purposes 14 of this subsection (e) the term "mining" shall have the 15 same meaning as the term "mining" in Section 613(c) of 16 the Internal Revenue Code. For purposes of this 17 subsection (e), the term "retailing" means the sale of 18 tangible personal property or services rendered in 19 conjunction with the sale of tangible consumer goods or 20 commodities. 21 (4) The basis of qualified property shall be the 22 basis used to compute the depreciation deduction for 23 federal income tax purposes. 24 (5) If the basis of the property for federal income 25 tax depreciation purposes is increased after it has been 26 placed in service in Illinois by the taxpayer, the amount 27 of such increase shall be deemed property placed in 28 service on the date of such increase in basis. 29 (6) The term "placed in service" shall have the 30 same meaning as under Section 46 of the Internal Revenue 31 Code. 32 (7) If during any taxable year, any property ceases 33 to be qualified property in the hands of the taxpayer 34 within 48 months after being placed in service, or the SB2212 Enrolled -8- LRB9215616SMdv 1 situs of any qualified property is moved outside Illinois 2 within 48 months after being placed in service, the 3 Personal Property Tax Replacement Income Tax for such 4 taxable year shall be increased. Such increase shall be 5 determined by (i) recomputing the investment credit which 6 would have been allowed for the year in which credit for 7 such property was originally allowed by eliminating such 8 property from such computation and, (ii) subtracting such 9 recomputed credit from the amount of credit previously 10 allowed. For the purposes of this paragraph (7), a 11 reduction of the basis of qualified property resulting 12 from a redetermination of the purchase price shall be 13 deemed a disposition of qualified property to the extent 14 of such reduction. 15 (8) Unless the investment credit is extended by 16 law, the basis of qualified property shall not include 17 costs incurred after December 31, 2003, except for costs 18 incurred pursuant to a binding contract entered into on 19 or before December 31, 2003. 20 (9) Each taxable year ending before December 31, 21 2000, a partnership may elect to pass through to its 22 partners the credits to which the partnership is entitled 23 under this subsection (e) for the taxable year. A 24 partner may use the credit allocated to him or her under 25 this paragraph only against the tax imposed in 26 subsections (c) and (d) of this Section. If the 27 partnership makes that election, those credits shall be 28 allocated among the partners in the partnership in 29 accordance with the rules set forth in Section 704(b) of 30 the Internal Revenue Code, and the rules promulgated 31 under that Section, and the allocated amount of the 32 credits shall be allowed to the partners for that taxable 33 year. The partnership shall make this election on its 34 Personal Property Tax Replacement Income Tax return for SB2212 Enrolled -9- LRB9215616SMdv 1 that taxable year. The election to pass through the 2 credits shall be irrevocable. 3 For taxable years ending on or after December 31, 4 2000, a partner that qualifies its partnership for a 5 subtraction under subparagraph (I) of paragraph (2) of 6 subsection (d) of Section 203 or a shareholder that 7 qualifies a Subchapter S corporation for a subtraction 8 under subparagraph (S) of paragraph (2) of subsection (b) 9 of Section 203 shall be allowed a credit under this 10 subsection (e) equal to its share of the credit earned 11 under this subsection (e) during the taxable year by the 12 partnership or Subchapter S corporation, determined in 13 accordance with the determination of income and 14 distributive share of income under Sections 702 and 704 15 and Subchapter S of the Internal Revenue Code. This 16 paragraph is exempt from the provisions of Section 250. 17 (f) Investment credit; Enterprise Zone. 18 (1) A taxpayer shall be allowed a credit against 19 the tax imposed by subsections (a) and (b) of this 20 Section for investment in qualified property which is 21 placed in service in an Enterprise Zone created pursuant 22 to the Illinois Enterprise Zone Act. For partners, 23 shareholders of Subchapter S corporations, and owners of 24 limited liability companies, if the liability company is 25 treated as a partnership for purposes of federal and 26 State income taxation, there shall be allowed a credit 27 under this subsection (f) to be determined in accordance 28 with the determination of income and distributive share 29 of income under Sections 702 and 704 and Subchapter S of 30 the Internal Revenue Code. The credit shall be .5% of 31 the basis for such property. The credit shall be 32 available only in the taxable year in which the property 33 is placed in service in the Enterprise Zone and shall not 34 be allowed to the extent that it would reduce a SB2212 Enrolled -10- LRB9215616SMdv 1 taxpayer's liability for the tax imposed by subsections 2 (a) and (b) of this Section to below zero. For tax years 3 ending on or after December 31, 1985, the credit shall be 4 allowed for the tax year in which the property is placed 5 in service, or, if the amount of the credit exceeds the 6 tax liability for that year, whether it exceeds the 7 original liability or the liability as later amended, 8 such excess may be carried forward and applied to the tax 9 liability of the 5 taxable years following the excess 10 credit year. The credit shall be applied to the earliest 11 year for which there is a liability. If there is credit 12 from more than one tax year that is available to offset a 13 liability, the credit accruing first in time shall be 14 applied first. 15 (2) The term qualified property means property 16 which: 17 (A) is tangible, whether new or used, 18 including buildings and structural components of 19 buildings; 20 (B) is depreciable pursuant to Section 167 of 21 the Internal Revenue Code, except that "3-year 22 property" as defined in Section 168(c)(2)(A) of that 23 Code is not eligible for the credit provided by this 24 subsection (f); 25 (C) is acquired by purchase as defined in 26 Section 179(d) of the Internal Revenue Code; 27 (D) is used in the Enterprise Zone by the 28 taxpayer; and 29 (E) has not been previously used in Illinois 30 in such a manner and by such a person as would 31 qualify for the credit provided by this subsection 32 (f) or subsection (e). 33 (3) The basis of qualified property shall be the 34 basis used to compute the depreciation deduction for SB2212 Enrolled -11- LRB9215616SMdv 1 federal income tax purposes. 2 (4) If the basis of the property for federal income 3 tax depreciation purposes is increased after it has been 4 placed in service in the Enterprise Zone by the taxpayer, 5 the amount of such increase shall be deemed property 6 placed in service on the date of such increase in basis. 7 (5) The term "placed in service" shall have the 8 same meaning as under Section 46 of the Internal Revenue 9 Code. 10 (6) If during any taxable year, any property ceases 11 to be qualified property in the hands of the taxpayer 12 within 48 months after being placed in service, or the 13 situs of any qualified property is moved outside the 14 Enterprise Zone within 48 months after being placed in 15 service, the tax imposed under subsections (a) and (b) of 16 this Section for such taxable year shall be increased. 17 Such increase shall be determined by (i) recomputing the 18 investment credit which would have been allowed for the 19 year in which credit for such property was originally 20 allowed by eliminating such property from such 21 computation, and (ii) subtracting such recomputed credit 22 from the amount of credit previously allowed. For the 23 purposes of this paragraph (6), a reduction of the basis 24 of qualified property resulting from a redetermination of 25 the purchase price shall be deemed a disposition of 26 qualified property to the extent of such reduction. 27 (g) Jobs Tax Credit; Enterprise Zone and Foreign Trade 28 Zone or Sub-Zone. 29 (1) A taxpayer conducting a trade or business in an 30 enterprise zone or a High Impact Business designated by 31 the Department of Commerce and Community Affairs 32 conducting a trade or business in a federally designated 33 Foreign Trade Zone or Sub-Zone shall be allowed a credit 34 against the tax imposed by subsections (a) and (b) of SB2212 Enrolled -12- LRB9215616SMdv 1 this Section in the amount of $500 per eligible employee 2 hired to work in the zone during the taxable year. 3 (2) To qualify for the credit: 4 (A) the taxpayer must hire 5 or more eligible 5 employees to work in an enterprise zone or federally 6 designated Foreign Trade Zone or Sub-Zone during the 7 taxable year; 8 (B) the taxpayer's total employment within the 9 enterprise zone or federally designated Foreign 10 Trade Zone or Sub-Zone must increase by 5 or more 11 full-time employees beyond the total employed in 12 that zone at the end of the previous tax year for 13 which a jobs tax credit under this Section was 14 taken, or beyond the total employed by the taxpayer 15 as of December 31, 1985, whichever is later; and 16 (C) the eligible employees must be employed 17 180 consecutive days in order to be deemed hired for 18 purposes of this subsection. 19 (3) An "eligible employee" means an employee who 20 is: 21 (A) Certified by the Department of Commerce 22 and Community Affairs as "eligible for services" 23 pursuant to regulations promulgated in accordance 24 with Title II of the Job Training Partnership Act, 25 Training Services for the Disadvantaged or Title III 26 of the Job Training Partnership Act, Employment and 27 Training Assistance for Dislocated Workers Program. 28 (B) Hired after the enterprise zone or 29 federally designated Foreign Trade Zone or Sub-Zone 30 was designated or the trade or business was located 31 in that zone, whichever is later. 32 (C) Employed in the enterprise zone or Foreign 33 Trade Zone or Sub-Zone. An employee is employed in 34 an enterprise zone or federally designated Foreign SB2212 Enrolled -13- LRB9215616SMdv 1 Trade Zone or Sub-Zone if his services are rendered 2 there or it is the base of operations for the 3 services performed. 4 (D) A full-time employee working 30 or more 5 hours per week. 6 (4) For tax years ending on or after December 31, 7 1985 and prior to December 31, 1988, the credit shall be 8 allowed for the tax year in which the eligible employees 9 are hired. For tax years ending on or after December 31, 10 1988, the credit shall be allowed for the tax year 11 immediately following the tax year in which the eligible 12 employees are hired. If the amount of the credit exceeds 13 the tax liability for that year, whether it exceeds the 14 original liability or the liability as later amended, 15 such excess may be carried forward and applied to the tax 16 liability of the 5 taxable years following the excess 17 credit year. The credit shall be applied to the earliest 18 year for which there is a liability. If there is credit 19 from more than one tax year that is available to offset a 20 liability, earlier credit shall be applied first. 21 (5) The Department of Revenue shall promulgate such 22 rules and regulations as may be deemed necessary to carry 23 out the purposes of this subsection (g). 24 (6) The credit shall be available for eligible 25 employees hired on or after January 1, 1986. 26 (h) Investment credit; High Impact Business. 27 (1) Subject to subsections (b) and (b-5) of Section 28 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall 29 be allowed a credit against the tax imposed by 30 subsections (a) and (b) of this Section for investment in 31 qualified property which is placed in service by a 32 Department of Commerce and Community Affairs designated 33 High Impact Business. The credit shall be .5% of the 34 basis for such property. The credit shall not be SB2212 Enrolled -14- LRB9215616SMdv 1 available (i) until the minimum investments in qualified 2 property set forth in subdivision (a)(3)(A) of Section 3 5.5 of the Illinois Enterprise Zone Act have been 4 satisfied or (ii) until the time authorized in subsection 5 (b-5) of the Illinois Enterprise Zone Act for entities 6 designated as High Impact Businesses under subdivisions 7 (a)(3)(B), (a)(3)(C), and (a)(3)(D) of Section 5.5 of the 8 Illinois Enterprise Zone Act, and shall not be allowed to 9 the extent that it would reduce a taxpayer's liability 10 for the tax imposed by subsections (a) and (b) of this 11 Section to below zero. The credit applicable to such 12 investments shall be taken in the taxable year in which 13 such investments have been completed. The credit for 14 additional investments beyond the minimum investment by a 15 designated high impact business authorized under 16 subdivision (a)(3)(A) of Section 5.5 of the Illinois 17 Enterprise Zone Act shall be available only in the 18 taxable year in which the property is placed in service 19 and shall not be allowed to the extent that it would 20 reduce a taxpayer's liability for the tax imposed by 21 subsections (a) and (b) of this Section to below zero. 22 For tax years ending on or after December 31, 1987, the 23 credit shall be allowed for the tax year in which the 24 property is placed in service, or, if the amount of the 25 credit exceeds the tax liability for that year, whether 26 it exceeds the original liability or the liability as 27 later amended, such excess may be carried forward and 28 applied to the tax liability of the 5 taxable years 29 following the excess credit year. The credit shall be 30 applied to the earliest year for which there is a 31 liability. If there is credit from more than one tax 32 year that is available to offset a liability, the credit 33 accruing first in time shall be applied first. 34 Changes made in this subdivision (h)(1) by Public SB2212 Enrolled -15- LRB9215616SMdv 1 Act 88-670 restore changes made by Public Act 85-1182 and 2 reflect existing law. 3 (2) The term qualified property means property 4 which: 5 (A) is tangible, whether new or used, 6 including buildings and structural components of 7 buildings; 8 (B) is depreciable pursuant to Section 167 of 9 the Internal Revenue Code, except that "3-year 10 property" as defined in Section 168(c)(2)(A) of that 11 Code is not eligible for the credit provided by this 12 subsection (h); 13 (C) is acquired by purchase as defined in 14 Section 179(d) of the Internal Revenue Code; and 15 (D) is not eligible for the Enterprise Zone 16 Investment Credit provided by subsection (f) of this 17 Section. 18 (3) The basis of qualified property shall be the 19 basis used to compute the depreciation deduction for 20 federal income tax purposes. 21 (4) If the basis of the property for federal income 22 tax depreciation purposes is increased after it has been 23 placed in service in a federally designated Foreign Trade 24 Zone or Sub-Zone located in Illinois by the taxpayer, the 25 amount of such increase shall be deemed property placed 26 in service on the date of such increase in basis. 27 (5) The term "placed in service" shall have the 28 same meaning as under Section 46 of the Internal Revenue 29 Code. 30 (6) If during any taxable year ending on or before 31 December 31, 1996, any property ceases to be qualified 32 property in the hands of the taxpayer within 48 months 33 after being placed in service, or the situs of any 34 qualified property is moved outside Illinois within 48 SB2212 Enrolled -16- LRB9215616SMdv 1 months after being placed in service, the tax imposed 2 under subsections (a) and (b) of this Section for such 3 taxable year shall be increased. Such increase shall be 4 determined by (i) recomputing the investment credit which 5 would have been allowed for the year in which credit for 6 such property was originally allowed by eliminating such 7 property from such computation, and (ii) subtracting such 8 recomputed credit from the amount of credit previously 9 allowed. For the purposes of this paragraph (6), a 10 reduction of the basis of qualified property resulting 11 from a redetermination of the purchase price shall be 12 deemed a disposition of qualified property to the extent 13 of such reduction. 14 (7) Beginning with tax years ending after December 15 31, 1996, if a taxpayer qualifies for the credit under 16 this subsection (h) and thereby is granted a tax 17 abatement and the taxpayer relocates its entire facility 18 in violation of the explicit terms and length of the 19 contract under Section 18-183 of the Property Tax Code, 20 the tax imposed under subsections (a) and (b) of this 21 Section shall be increased for the taxable year in which 22 the taxpayer relocated its facility by an amount equal to 23 the amount of credit received by the taxpayer under this 24 subsection (h). 25 (i) Credit for Personal Property Tax Replacement Income 26 Tax. A credit shall be allowed against the tax imposed by 27 subsections (a) and (b) of this Section for the tax imposed 28 by subsections (c) and (d) of this Section. This credit 29 shall be computed by multiplying the tax imposed by 30 subsections (c) and (d) of this Section by a fraction, the 31 numerator of which is base income allocable to Illinois and 32 the denominator of which is Illinois base income, and further 33 multiplying the product by the tax rate imposed by 34 subsections (a) and (b) of this Section. SB2212 Enrolled -17- LRB9215616SMdv 1 Any credit earned on or after December 31, 1986 under 2 this subsection which is unused in the year the credit is 3 computed because it exceeds the tax liability imposed by 4 subsections (a) and (b) for that year (whether it exceeds the 5 original liability or the liability as later amended) may be 6 carried forward and applied to the tax liability imposed by 7 subsections (a) and (b) of the 5 taxable years following the 8 excess credit year. This credit shall be applied first to 9 the earliest year for which there is a liability. If there 10 is a credit under this subsection from more than one tax year 11 that is available to offset a liability the earliest credit 12 arising under this subsection shall be applied first. 13 If, during any taxable year ending on or after December 14 31, 1986, the tax imposed by subsections (c) and (d) of this 15 Section for which a taxpayer has claimed a credit under this 16 subsection (i) is reduced, the amount of credit for such tax 17 shall also be reduced. Such reduction shall be determined by 18 recomputing the credit to take into account the reduced tax 19 imposed by subsectionssubsection(c) and (d). If any 20 portion of the reduced amount of credit has been carried to a 21 different taxable year, an amended return shall be filed for 22 such taxable year to reduce the amount of credit claimed. 23 (j) Training expense credit. Beginning with tax years 24 ending on or after December 31, 1986, a taxpayer shall be 25 allowed a credit against the tax imposed by subsections 26subsection(a) and (b) under this Section for all amounts 27 paid or accrued, on behalf of all persons employed by the 28 taxpayer in Illinois or Illinois residents employed outside 29 of Illinois by a taxpayer, for educational or vocational 30 training in semi-technical or technical fields or 31 semi-skilled or skilled fields, which were deducted from 32 gross income in the computation of taxable income. The 33 credit against the tax imposed by subsections (a) and (b) 34 shall be 1.6% of such training expenses. For partners, SB2212 Enrolled -18- LRB9215616SMdv 1 shareholders of subchapter S corporations, and owners of 2 limited liability companies, if the liability company is 3 treated as a partnership for purposes of federal and State 4 income taxation, there shall be allowed a credit under this 5 subsection (j) to be determined in accordance with the 6 determination of income and distributive share of income 7 under Sections 702 and 704 and subchapter S of the Internal 8 Revenue Code. 9 Any credit allowed under this subsection which is unused 10 in the year the credit is earned may be carried forward to 11 each of the 5 taxable years following the year for which the 12 credit is first computed until it is used. This credit shall 13 be applied first to the earliest year for which there is a 14 liability. If there is a credit under this subsection from 15 more than one tax year that is available to offset a 16 liability the earliest credit arising under this subsection 17 shall be applied first. 18 (k) Research and development credit. 19 Beginning with tax years ending after July 1, 1990, a 20 taxpayer shall be allowed a credit against the tax imposed by 21 subsections (a) and (b) of this Section for increasing 22 research activities in this State. The credit allowed 23 against the tax imposed by subsections (a) and (b) shall be 24 equal to 6 1/2% of the qualifying expenditures for increasing 25 research activities in this State. For partners, 26 shareholders of subchapter S corporations, and owners of 27 limited liability companies, if the liability company is 28 treated as a partnership for purposes of federal and State 29 income taxation, there shall be allowed a credit under this 30 subsection to be determined in accordance with the 31 determination of income and distributive share of income 32 under Sections 702 and 704 and subchapter S of the Internal 33 Revenue Code. 34 For purposes of this subsection, "qualifying SB2212 Enrolled -19- LRB9215616SMdv 1 expenditures" means the qualifying expenditures as defined 2 for the federal credit for increasing research activities 3 which would be allowable under Section 41 of the Internal 4 Revenue Code and which are conducted in this State, 5 "qualifying expenditures for increasing research activities 6 in this State" means the excess of qualifying expenditures 7 for the taxable year in which incurred over qualifying 8 expenditures for the base period, "qualifying expenditures 9 for the base period" means the average of the qualifying 10 expenditures for each year in the base period, and "base 11 period" means the 3 taxable years immediately preceding the 12 taxable year for which the determination is being made. 13 Any credit in excess of the tax liability for the taxable 14 year may be carried forward. A taxpayer may elect to have the 15 unused credit shown on its final completed return carried 16 over as a credit against the tax liability for the following 17 5 taxable years or until it has been fully used, whichever 18 occurs first. 19 If an unused credit is carried forward to a given year 20 from 2 or more earlier years, that credit arising in the 21 earliest year will be applied first against the tax liability 22 for the given year. If a tax liability for the given year 23 still remains, the credit from the next earliest year will 24 then be applied, and so on, until all credits have been used 25 or no tax liability for the given year remains. Any 26 remaining unused credit or credits then will be carried 27 forward to the next following year in which a tax liability 28 is incurred, except that no credit can be carried forward to 29 a year which is more than 5 years after the year in which the 30 expense for which the credit is given was incurred. 31 Unless extended by law, the credit shall not include 32 costs incurred after December 31, 2004, except for costs 33 incurred pursuant to a binding contract entered into on or 34 before December 31, 2004. SB2212 Enrolled -20- LRB9215616SMdv 1 No inference shall be drawn from this amendatory Act of 2 the 91st General Assembly in construing this Section for 3 taxable years beginning before January 1, 1999. 4 (l) Environmental Remediation Tax Credit. 5 (i) For tax years ending after December 31, 1997 6 and on or before December 31, 2001, a taxpayer shall be 7 allowed a credit against the tax imposed by subsections 8 (a) and (b) of this Section for certain amounts paid for 9 unreimbursed eligible remediation costs, as specified in 10 this subsection. For purposes of this Section, 11 "unreimbursed eligible remediation costs" means costs 12 approved by the Illinois Environmental Protection Agency 13 ("Agency") under Section 58.14 of the Environmental 14 Protection Act that were paid in performing environmental 15 remediation at a site for which a No Further Remediation 16 Letter was issued by the Agency and recorded under 17 Section 58.10 of the Environmental Protection Act. The 18 credit must be claimed for the taxable year in which 19 Agency approval of the eligible remediation costs is 20 granted. The credit is not available to any taxpayer if 21 the taxpayer or any related party caused or contributed 22 to, in any material respect, a release of regulated 23 substances on, in, or under the site that was identified 24 and addressed by the remedial action pursuant to the Site 25 Remediation Program of the Environmental Protection Act. 26 After the Pollution Control Board rules are adopted 27 pursuant to the Illinois Administrative Procedure Act for 28 the administration and enforcement of Section 58.9 of the 29 Environmental Protection Act, determinations as to credit 30 availability for purposes of this Section shall be made 31 consistent with those rules. For purposes of this 32 Section, "taxpayer" includes a person whose tax 33 attributes the taxpayer has succeeded to under Section 34 381 of the Internal Revenue Code and "related party" SB2212 Enrolled -21- LRB9215616SMdv 1 includes the persons disallowed a deduction for losses by 2 paragraphs (b), (c), and (f)(1) of Section 267 of the 3 Internal Revenue Code by virtue of being a related 4 taxpayer, as well as any of its partners. The credit 5 allowed against the tax imposed by subsections (a) and 6 (b) shall be equal to 25% of the unreimbursed eligible 7 remediation costs in excess of $100,000 per site, except 8 that the $100,000 threshold shall not apply to any site 9 contained in an enterprise zone as determined by the 10 Department of Commerce and Community Affairs. The total 11 credit allowed shall not exceed $40,000 per year with a 12 maximum total of $150,000 per site. For partners and 13 shareholders of subchapter S corporations, there shall be 14 allowed a credit under this subsection to be determined 15 in accordance with the determination of income and 16 distributive share of income under Sections 702 and 704 17 and subchapter S of the Internal Revenue Code. 18 (ii) A credit allowed under this subsection that is 19 unused in the year the credit is earned may be carried 20 forward to each of the 5 taxable years following the year 21 for which the credit is first earned until it is used. 22 The term "unused credit" does not include any amounts of 23 unreimbursed eligible remediation costs in excess of the 24 maximum credit per site authorized under paragraph (i). 25 This credit shall be applied first to the earliest year 26 for which there is a liability. If there is a credit 27 under this subsection from more than one tax year that is 28 available to offset a liability, the earliest credit 29 arising under this subsection shall be applied first. A 30 credit allowed under this subsection may be sold to a 31 buyer as part of a sale of all or part of the remediation 32 site for which the credit was granted. The purchaser of 33 a remediation site and the tax credit shall succeed to 34 the unused credit and remaining carry-forward period of SB2212 Enrolled -22- LRB9215616SMdv 1 the seller. To perfect the transfer, the assignor shall 2 record the transfer in the chain of title for the site 3 and provide written notice to the Director of the 4 Illinois Department of Revenue of the assignor's intent 5 to sell the remediation site and the amount of the tax 6 credit to be transferred as a portion of the sale. In no 7 event may a credit be transferred to any taxpayer if the 8 taxpayer or a related party would not be eligible under 9 the provisions of subsection (i). 10 (iii) For purposes of this Section, the term "site" 11 shall have the same meaning as under Section 58.2 of the 12 Environmental Protection Act. 13 (m) Education expense credit. 14 Beginning with tax years ending after December 31, 1999, 15 a taxpayer who is the custodian of one or more qualifying 16 pupils shall be allowed a credit against the tax imposed by 17 subsections (a) and (b) of this Section for qualified 18 education expenses incurred on behalf of the qualifying 19 pupils. The credit shall be equal to 25% of qualified 20 education expenses, but in no event may the total credit 21 under this subsectionSectionclaimed by a family that is the 22 custodian of qualifying pupils exceed $500. In no event 23 shall a credit under this subsection reduce the taxpayer's 24 liability under this Act to less than zero. This subsection 25 is exempt from the provisions of Section 250 of this Act. 26 For purposes of this subsection:;27 "Qualifying pupils" means individuals who (i) are 28 residents of the State of Illinois, (ii) are under the age of 29 21 at the close of the school year for which a credit is 30 sought, and (iii) during the school year for which a credit 31 is sought were full-time pupils enrolled in a kindergarten 32 through twelfth grade education program at any school, as 33 defined in this subsection. 34 "Qualified education expense" means the amount incurred SB2212 Enrolled -23- LRB9215616SMdv 1 on behalf of a qualifying pupil in excess of $250 for 2 tuition, book fees, and lab fees at the school in which the 3 pupil is enrolled during the regular school year. 4 "School" means any public or nonpublic elementary or 5 secondary school in Illinois that is in compliance with Title 6 VI of the Civil Rights Act of 1964 and attendance at which 7 satisfies the requirements of Section 26-1 of the School 8 Code, except that nothing shall be construed to require a 9 child to attend any particular public or nonpublic school to 10 qualify for the credit under this Section. 11 "Custodian" means, with respect to qualifying pupils, an 12 Illinois resident who is a parent, the parents, a legal 13 guardian, or the legal guardians of the qualifying pupils. 14 (Source: P.A. 91-9, eff. 1-1-00; 91-357, eff. 7-29-99; 15 91-643, eff. 8-20-99; 91-644, eff. 8-20-99; 91-860, eff. 16 6-22-00; 91-913, eff. 1-1-01; 92-12, eff. 7-1-01; 92-16, eff. 17 6-28-01; revised 12-3-01.) 18 (35 ILCS 5/202) (from Ch. 120, par. 2-202) 19 Sec. 202. Net Income Defined. In general. For purposes of 20 this Act, a taxpayer's net income for a taxable year shall be 21 that portion of his base income for such yearexcept money22and other benefits, other than salary, received by a driver23in a ridesharing arrangement using a motor vehicle,which is 24 allocable to this State under the provisions of Article 3, 25 less the standard exemption allowed by Section 204 and the 26 deduction allowed by Section 207. 27 (Source: P.A. 85-731.) 28 (35 ILCS 5/203) (from Ch. 120, par. 2-203) 29 Sec. 203. Base income defined. 30 (a) Individuals. 31 (1) In general. In the case of an individual, base 32 income means an amount equal to the taxpayer's adjusted SB2212 Enrolled -24- LRB9215616SMdv 1 gross income for the taxable year as modified by 2 paragraph (2). 3 (2) Modifications. The adjusted gross income 4 referred to in paragraph (1) shall be modified by adding 5 thereto the sum of the following amounts: 6 (A) An amount equal to all amounts paid or 7 accrued to the taxpayer as interest or dividends 8 during the taxable year to the extent excluded from 9 gross income in the computation of adjusted gross 10 income, except stock dividends of qualified public 11 utilities described in Section 305(e) of the 12 Internal Revenue Code; 13 (B) An amount equal to the amount of tax 14 imposed by this Act to the extent deducted from 15 gross income in the computation of adjusted gross 16 income for the taxable year; 17 (C) An amount equal to the amount received 18 during the taxable year as a recovery or refund of 19 real property taxes paid with respect to the 20 taxpayer's principal residence under the Revenue Act 21 of 1939 and for which a deduction was previously 22 taken under subparagraph (L) of this paragraph (2) 23 prior to July 1, 1991, the retrospective application 24 date of Article 4 of Public Act 87-17. In the case 25 of multi-unit or multi-use structures and farm 26 dwellings, the taxes on the taxpayer's principal 27 residence shall be that portion of the total taxes 28 for the entire property which is attributable to 29 such principal residence; 30 (D) An amount equal to the amount of the 31 capital gain deduction allowable under the Internal 32 Revenue Code, to the extent deducted from gross 33 income in the computation of adjusted gross income; 34 (D-5) An amount, to the extent not included in SB2212 Enrolled -25- LRB9215616SMdv 1 adjusted gross income, equal to the amount of money 2 withdrawn by the taxpayer in the taxable year from a 3 medical care savings account and the interest earned 4 on the account in the taxable year of a withdrawal 5 pursuant to subsection (b) of Section 20 of the 6 Medical Care Savings Account Act or subsection (b) 7 of Section 20 of the Medical Care Savings Account 8 Act of 2000; and 9 (D-10) For taxable years ending after December 10 31, 1997, an amount equal to any eligible 11 remediation costs that the individual deducted in 12 computing adjusted gross income and for which the 13 individual claims a credit under subsection (l) of 14 Section 201; 15 and by deducting from the total so obtained the sum of 16 the following amounts: 17 (E) For taxable years ending before December 18 31, 2001, any amount included in such total in 19 respect of any compensation (including but not 20 limited to any compensation paid or accrued to a 21 serviceman while a prisoner of war or missing in 22 action) paid to a resident by reason of being on 23 active duty in the Armed Forces of the United States 24 and in respect of any compensation paid or accrued 25 to a resident who as a governmental employee was a 26 prisoner of war or missing in action, and in respect 27 of any compensation paid to a resident in 1971 or 28 thereafter for annual training performed pursuant to 29 Sections 502 and 503, Title 32, United States Code 30 as a member of the Illinois National Guard. For 31 taxable years ending on or after December 31, 2001, 32 any amount included in such total in respect of any 33 compensation (including but not limited to any 34 compensation paid or accrued to a serviceman while a SB2212 Enrolled -26- LRB9215616SMdv 1 prisoner of war or missing in action) paid to a 2 resident by reason of being a member of any 3 component of the Armed Forces of the United States 4 and in respect of any compensation paid or accrued 5 to a resident who as a governmental employee was a 6 prisoner of war or missing in action, and in respect 7 of any compensation paid to a resident in 2001 or 8 thereafter by reason of being a member of the 9 Illinois National Guard. The provisions of this 10 amendatory Act of the 92nd General Assembly are 11 exempt from the provisions of Section 250; 12 (F) An amount equal to all amounts included in 13 such total pursuant to the provisions of Sections 14 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and 15 408 of the Internal Revenue Code, or included in 16 such total as distributions under the provisions of 17 any retirement or disability plan for employees of 18 any governmental agency or unit, or retirement 19 payments to retired partners, which payments are 20 excluded in computing net earnings from self 21 employment by Section 1402 of the Internal Revenue 22 Code and regulations adopted pursuant thereto; 23 (G) The valuation limitation amount; 24 (H) An amount equal to the amount of any tax 25 imposed by this Act which was refunded to the 26 taxpayer and included in such total for the taxable 27 year; 28 (I) An amount equal to all amounts included in 29 such total pursuant to the provisions of Section 111 30 of the Internal Revenue Code as a recovery of items 31 previously deducted from adjusted gross income in 32 the computation of taxable income; 33 (J) An amount equal to those dividends 34 included in such total which were paid by a SB2212 Enrolled -27- LRB9215616SMdv 1 corporation which conducts business operations in an 2 Enterprise Zone or zones created under the Illinois 3 Enterprise Zone Act, and conducts substantially all 4 of its operations in an Enterprise Zone or zones; 5 (K) An amount equal to those dividends 6 included in such total that were paid by a 7 corporation that conducts business operations in a 8 federally designated Foreign Trade Zone or Sub-Zone 9 and that is designated a High Impact Business 10 located in Illinois; provided that dividends 11 eligible for the deduction provided in subparagraph 12 (J) of paragraph (2) of this subsection shall not be 13 eligible for the deduction provided under this 14 subparagraph (K); 15 (L) For taxable years ending after December 16 31, 1983, an amount equal to all social security 17 benefits and railroad retirement benefits included 18 in such total pursuant to Sections 72(r) and 86 of 19 the Internal Revenue Code; 20 (M) With the exception of any amounts 21 subtracted under subparagraph (N), an amount equal 22 to the sum of all amounts disallowed as deductions 23 by (i) Sections 171(a) (2), and 265(2) of the 24 Internal Revenue Code of 1954, as now or hereafter 25 amended, and all amounts of expenses allocable to 26 interest and disallowed as deductions by Section 27 265(1) of the Internal Revenue Code of 1954, as now 28 or hereafter amended; and (ii) for taxable years 29 ending on or after August 13, 1999, Sections 30 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the 31 Internal Revenue Code; the provisions of this 32 subparagraph are exempt from the provisions of 33 Section 250; 34 (N) An amount equal to all amounts included in SB2212 Enrolled -28- LRB9215616SMdv 1 such total which are exempt from taxation by this 2 State either by reason of its statutes or 3 Constitution or by reason of the Constitution, 4 treaties or statutes of the United States; provided 5 that, in the case of any statute of this State that 6 exempts income derived from bonds or other 7 obligations from the tax imposed under this Act, the 8 amount exempted shall be the interest net of bond 9 premium amortization; 10 (O) An amount equal to any contribution made 11 to a job training project established pursuant to 12 the Tax Increment Allocation Redevelopment Act; 13 (P) An amount equal to the amount of the 14 deduction used to compute the federal income tax 15 credit for restoration of substantial amounts held 16 under claim of right for the taxable year pursuant 17 to Section 1341 of the Internal Revenue Code of 18 1986; 19 (Q) An amount equal to any amounts included in 20 such total, received by the taxpayer as an 21 acceleration in the payment of life, endowment or 22 annuity benefits in advance of the time they would 23 otherwise be payable as an indemnity for a terminal 24 illness; 25 (R) An amount equal to the amount of any 26 federal or State bonus paid to veterans of the 27 Persian Gulf War; 28 (S) An amount, to the extent included in 29 adjusted gross income, equal to the amount of a 30 contribution made in the taxable year on behalf of 31 the taxpayer to a medical care savings account 32 established under the Medical Care Savings Account 33 Act or the Medical Care Savings Account Act of 2000 34 to the extent the contribution is accepted by the SB2212 Enrolled -29- LRB9215616SMdv 1 account administrator as provided in that Act; 2 (T) An amount, to the extent included in 3 adjusted gross income, equal to the amount of 4 interest earned in the taxable year on a medical 5 care savings account established under the Medical 6 Care Savings Account Act or the Medical Care Savings 7 Account Act of 2000 on behalf of the taxpayer, other 8 than interest added pursuant to item (D-5) of this 9 paragraph (2); 10 (U) For one taxable year beginning on or after 11 January 1, 1994, an amount equal to the total amount 12 of tax imposed and paid under subsections (a) and 13 (b) of Section 201 of this Act on grant amounts 14 received by the taxpayer under the Nursing Home 15 Grant Assistance Act during the taxpayer's taxable 16 years 1992 and 1993; 17 (V) Beginning with tax years ending on or 18 after December 31, 1995 and ending with tax years 19 ending on or before December 31, 2004, an amount 20 equal to the amount paid by a taxpayer who is a 21 self-employed taxpayer, a partner of a partnership, 22 or a shareholder in a Subchapter S corporation for 23 health insurance or long-term care insurance for 24 that taxpayer or that taxpayer's spouse or 25 dependents, to the extent that the amount paid for 26 that health insurance or long-term care insurance 27 may be deducted under Section 213 of the Internal 28 Revenue Code of 1986, has not been deducted on the 29 federal income tax return of the taxpayer, and does 30 not exceed the taxable income attributable to that 31 taxpayer's income, self-employment income, or 32 Subchapter S corporation income; except that no 33 deduction shall be allowed under this item (V) if 34 the taxpayer is eligible to participate in any SB2212 Enrolled -30- LRB9215616SMdv 1 health insurance or long-term care insurance plan of 2 an employer of the taxpayer or the taxpayer's 3 spouse. The amount of the health insurance and 4 long-term care insurance subtracted under this item 5 (V) shall be determined by multiplying total health 6 insurance and long-term care insurance premiums paid 7 by the taxpayer times a number that represents the 8 fractional percentage of eligible medical expenses 9 under Section 213 of the Internal Revenue Code of 10 1986 not actually deducted on the taxpayer's federal 11 income tax return; 12 (W) For taxable years beginning on or after 13 January 1, 1998, all amounts included in the 14 taxpayer's federal gross income in the taxable year 15 from amounts converted from a regular IRA to a Roth 16 IRA. This paragraph is exempt from the provisions of 17 Section 250; 18 (X) For taxable year 1999 and thereafter, an 19 amount equal to the amount of any (i) distributions, 20 to the extent includible in gross income for federal 21 income tax purposes, made to the taxpayer because of 22 his or her status as a victim of persecution for 23 racial or religious reasons by Nazi Germany or any 24 other Axis regime or as an heir of the victim and 25 (ii) items of income, to the extent includible in 26 gross income for federal income tax purposes, 27 attributable to, derived from or in any way related 28 to assets stolen from, hidden from, or otherwise 29 lost to a victim of persecution for racial or 30 religious reasons by Nazi Germany or any other Axis 31 regime immediately prior to, during, and immediately 32 after World War II, including, but not limited to, 33 interest on the proceeds receivable as insurance 34 under policies issued to a victim of persecution for SB2212 Enrolled -31- LRB9215616SMdv 1 racial or religious reasons by Nazi Germany or any 2 other Axis regime by European insurance companies 3 immediately prior to and during World War II; 4 provided, however, this subtraction from federal 5 adjusted gross income does not apply to assets 6 acquired with such assets or with the proceeds from 7 the sale of such assets; provided, further, this 8 paragraph shall only apply to a taxpayer who was the 9 first recipient of such assets after their recovery 10 and who is a victim of persecution for racial or 11 religious reasons by Nazi Germany or any other Axis 12 regime or as an heir of the victim. The amount of 13 and the eligibility for any public assistance, 14 benefit, or similar entitlement is not affected by 15 the inclusion of items (i) and (ii) of this 16 paragraph in gross income for federal income tax 17 purposes. This paragraph is exempt from the 18 provisions of Section 250;and19 (Y) For taxable years beginning on or after 20 January 1, 2002, moneys contributed in the taxable 21 year to a College Savings Pool account under Section 22 16.5 of the State Treasurer Act. This subparagraph 23 (Y) is exempt from the provisions of Section 250; 24 and 25 (Z) Any amount included in adjusted gross 26 income, other than salary, received by a driver in a 27 ridesharing arrangement using a motor vehicle. 28 (b) Corporations. 29 (1) In general. In the case of a corporation, base 30 income means an amount equal to the taxpayer's taxable 31 income for the taxable year as modified by paragraph (2). 32 (2) Modifications. The taxable income referred to 33 in paragraph (1) shall be modified by adding thereto the 34 sum of the following amounts: SB2212 Enrolled -32- LRB9215616SMdv 1 (A) An amount equal to all amounts paid or 2 accrued to the taxpayer as interest and all 3 distributions received from regulated investment 4 companies during the taxable year to the extent 5 excluded from gross income in the computation of 6 taxable income; 7 (B) An amount equal to the amount of tax 8 imposed by this Act to the extent deducted from 9 gross income in the computation of taxable income 10 for the taxable year; 11 (C) In the case of a regulated investment 12 company, an amount equal to the excess of (i) the 13 net long-term capital gain for the taxable year, 14 over (ii) the amount of the capital gain dividends 15 designated as such in accordance with Section 16 852(b)(3)(C) of the Internal Revenue Code and any 17 amount designated under Section 852(b)(3)(D) of the 18 Internal Revenue Code, attributable to the taxable 19 year (this amendatory Act of 1995 (Public Act 89-89) 20 is declarative of existing law and is not a new 21 enactment); 22 (D) The amount of any net operating loss 23 deduction taken in arriving at taxable income, other 24 than a net operating loss carried forward from a 25 taxable year ending prior to December 31, 1986; 26 (E) For taxable years in which a net operating 27 loss carryback or carryforward from a taxable year 28 ending prior to December 31, 1986 is an element of 29 taxable income under paragraph (1) of subsection (e) 30 or subparagraph (E) of paragraph (2) of subsection 31 (e), the amount by which addition modifications 32 other than those provided by this subparagraph (E) 33 exceeded subtraction modifications in such earlier 34 taxable year, with the following limitations applied SB2212 Enrolled -33- LRB9215616SMdv 1 in the order that they are listed: 2 (i) the addition modification relating to 3 the net operating loss carried back or forward 4 to the taxable year from any taxable year 5 ending prior to December 31, 1986 shall be 6 reduced by the amount of addition modification 7 under this subparagraph (E) which related to 8 that net operating loss and which was taken 9 into account in calculating the base income of 10 an earlier taxable year, and 11 (ii) the addition modification relating 12 to the net operating loss carried back or 13 forward to the taxable year from any taxable 14 year ending prior to December 31, 1986 shall 15 not exceed the amount of such carryback or 16 carryforward; 17 For taxable years in which there is a net 18 operating loss carryback or carryforward from more 19 than one other taxable year ending prior to December 20 31, 1986, the addition modification provided in this 21 subparagraph (E) shall be the sum of the amounts 22 computed independently under the preceding 23 provisions of this subparagraph (E) for each such 24 taxable year; and 25 (E-5) For taxable years ending after December 26 31, 1997, an amount equal to any eligible 27 remediation costs that the corporation deducted in 28 computing adjusted gross income and for which the 29 corporation claims a credit under subsection (l) of 30 Section 201; 31 and by deducting from the total so obtained the sum of 32 the following amounts: 33 (F) An amount equal to the amount of any tax 34 imposed by this Act which was refunded to the SB2212 Enrolled -34- LRB9215616SMdv 1 taxpayer and included in such total for the taxable 2 year; 3 (G) An amount equal to any amount included in 4 such total under Section 78 of the Internal Revenue 5 Code; 6 (H) In the case of a regulated investment 7 company, an amount equal to the amount of exempt 8 interest dividends as defined in subsection (b) (5) 9 of Section 852 of the Internal Revenue Code, paid to 10 shareholders for the taxable year; 11 (I) With the exception of any amounts 12 subtracted under subparagraph (J), an amount equal 13 to the sum of all amounts disallowed as deductions 14 by (i) Sections 171(a) (2), and 265(a)(2) and 15 amounts disallowed as interest expense by Section 16 291(a)(3) of the Internal Revenue Code, as now or 17 hereafter amended, and all amounts of expenses 18 allocable to interest and disallowed as deductions 19 by Section 265(a)(1) of the Internal Revenue Code, 20 as now or hereafter amended; and (ii) for taxable 21 years ending on or after August 13, 1999, Sections 22 171(a)(2), 265, 280C, 291(a)(3), and 832(b)(5)(B)(i) 23 of the Internal Revenue Code; the provisions of this 24 subparagraph are exempt from the provisions of 25 Section 250; 26 (J) An amount equal to all amounts included in 27 such total which are exempt from taxation by this 28 State either by reason of its statutes or 29 Constitution or by reason of the Constitution, 30 treaties or statutes of the United States; provided 31 that, in the case of any statute of this State that 32 exempts income derived from bonds or other 33 obligations from the tax imposed under this Act, the 34 amount exempted shall be the interest net of bond SB2212 Enrolled -35- LRB9215616SMdv 1 premium amortization; 2 (K) An amount equal to those dividends 3 included in such total which were paid by a 4 corporation which conducts business operations in an 5 Enterprise Zone or zones created under the Illinois 6 Enterprise Zone Act and conducts substantially all 7 of its operations in an Enterprise Zone or zones; 8 (L) An amount equal to those dividends 9 included in such total that were paid by a 10 corporation that conducts business operations in a 11 federally designated Foreign Trade Zone or Sub-Zone 12 and that is designated a High Impact Business 13 located in Illinois; provided that dividends 14 eligible for the deduction provided in subparagraph 15 (K) of paragraph 2 of this subsection shall not be 16 eligible for the deduction provided under this 17 subparagraph (L); 18 (M) For any taxpayer that is a financial 19 organization within the meaning of Section 304(c) of 20 this Act, an amount included in such total as 21 interest income from a loan or loans made by such 22 taxpayer to a borrower, to the extent that such a 23 loan is secured by property which is eligible for 24 the Enterprise Zone Investment Credit. To determine 25 the portion of a loan or loans that is secured by 26 property eligible for a Section 201(f) investment 27 credit to the borrower, the entire principal amount 28 of the loan or loans between the taxpayer and the 29 borrower should be divided into the basis of the 30 Section 201(f) investment credit property which 31 secures the loan or loans, using for this purpose 32 the original basis of such property on the date that 33 it was placed in service in the Enterprise Zone. 34 The subtraction modification available to taxpayer SB2212 Enrolled -36- LRB9215616SMdv 1 in any year under this subsection shall be that 2 portion of the total interest paid by the borrower 3 with respect to such loan attributable to the 4 eligible property as calculated under the previous 5 sentence; 6 (M-1) For any taxpayer that is a financial 7 organization within the meaning of Section 304(c) of 8 this Act, an amount included in such total as 9 interest income from a loan or loans made by such 10 taxpayer to a borrower, to the extent that such a 11 loan is secured by property which is eligible for 12 the High Impact Business Investment Credit. To 13 determine the portion of a loan or loans that is 14 secured by property eligible for a Section 201(h) 15 investment credit to the borrower, the entire 16 principal amount of the loan or loans between the 17 taxpayer and the borrower should be divided into the 18 basis of the Section 201(h) investment credit 19 property which secures the loan or loans, using for 20 this purpose the original basis of such property on 21 the date that it was placed in service in a 22 federally designated Foreign Trade Zone or Sub-Zone 23 located in Illinois. No taxpayer that is eligible 24 for the deduction provided in subparagraph (M) of 25 paragraph (2) of this subsection shall be eligible 26 for the deduction provided under this subparagraph 27 (M-1). The subtraction modification available to 28 taxpayers in any year under this subsection shall be 29 that portion of the total interest paid by the 30 borrower with respect to such loan attributable to 31 the eligible property as calculated under the 32 previous sentence; 33 (N) Two times any contribution made during the 34 taxable year to a designated zone organization to SB2212 Enrolled -37- LRB9215616SMdv 1 the extent that the contribution (i) qualifies as a 2 charitable contribution under subsection (c) of 3 Section 170 of the Internal Revenue Code and (ii) 4 must, by its terms, be used for a project approved 5 by the Department of Commerce and Community Affairs 6 under Section 11 of the Illinois Enterprise Zone 7 Act; 8 (O) An amount equal to: (i) 85% for taxable 9 years ending on or before December 31, 1992, or, a 10 percentage equal to the percentage allowable under 11 Section 243(a)(1) of the Internal Revenue Code of 12 1986 for taxable years ending after December 31, 13 1992, of the amount by which dividends included in 14 taxable income and received from a corporation that 15 is not created or organized under the laws of the 16 United States or any state or political subdivision 17 thereof, including, for taxable years ending on or 18 after December 31, 1988, dividends received or 19 deemed received or paid or deemed paid under 20 Sections 951 through 964 of the Internal Revenue 21 Code, exceed the amount of the modification provided 22 under subparagraph (G) of paragraph (2) of this 23 subsection (b) which is related to such dividends; 24 plus (ii) 100% of the amount by which dividends, 25 included in taxable income and received, including, 26 for taxable years ending on or after December 31, 27 1988, dividends received or deemed received or paid 28 or deemed paid under Sections 951 through 964 of the 29 Internal Revenue Code, from any such corporation 30 specified in clause (i) that would but for the 31 provisions of Section 1504 (b) (3) of the Internal 32 Revenue Code be treated as a member of the 33 affiliated group which includes the dividend 34 recipient, exceed the amount of the modification SB2212 Enrolled -38- LRB9215616SMdv 1 provided under subparagraph (G) of paragraph (2) of 2 this subsection (b) which is related to such 3 dividends; 4 (P) An amount equal to any contribution made 5 to a job training project established pursuant to 6 the Tax Increment Allocation Redevelopment Act; 7 (Q) An amount equal to the amount of the 8 deduction used to compute the federal income tax 9 credit for restoration of substantial amounts held 10 under claim of right for the taxable year pursuant 11 to Section 1341 of the Internal Revenue Code of 12 1986; 13 (R) In the case of an attorney-in-fact with 14 respect to whom an interinsurer or a reciprocal 15 insurer has made the election under Section 835 of 16 the Internal Revenue Code, 26 U.S.C. 835, an amount 17 equal to the excess, if any, of the amounts paid or 18 incurred by that interinsurer or reciprocal insurer 19 in the taxable year to the attorney-in-fact over the 20 deduction allowed to that interinsurer or reciprocal 21 insurer with respect to the attorney-in-fact under 22 Section 835(b) of the Internal Revenue Code for the 23 taxable year; and 24 (S) For taxable years ending on or after 25 December 31, 1997, in the case of a Subchapter S 26 corporation, an amount equal to all amounts of 27 income allocable to a shareholder subject to the 28 Personal Property Tax Replacement Income Tax imposed 29 by subsections (c) and (d) of Section 201 of this 30 Act, including amounts allocable to organizations 31 exempt from federal income tax by reason of Section 32 501(a) of the Internal Revenue Code. This 33 subparagraph (S) is exempt from the provisions of 34 Section 250. SB2212 Enrolled -39- LRB9215616SMdv 1 (3) Special rule. For purposes of paragraph (2) 2 (A), "gross income" in the case of a life insurance 3 company, for tax years ending on and after December 31, 4 1994, shall mean the gross investment income for the 5 taxable year. 6 (c) Trusts and estates. 7 (1) In general. In the case of a trust or estate, 8 base income means an amount equal to the taxpayer's 9 taxable income for the taxable year as modified by 10 paragraph (2). 11 (2) Modifications. Subject to the provisions of 12 paragraph (3), the taxable income referred to in 13 paragraph (1) shall be modified by adding thereto the sum 14 of the following amounts: 15 (A) An amount equal to all amounts paid or 16 accrued to the taxpayer as interest or dividends 17 during the taxable year to the extent excluded from 18 gross income in the computation of taxable income; 19 (B) In the case of (i) an estate, $600; (ii) a 20 trust which, under its governing instrument, is 21 required to distribute all of its income currently, 22 $300; and (iii) any other trust, $100, but in each 23 such case, only to the extent such amount was 24 deducted in the computation of taxable income; 25 (C) An amount equal to the amount of tax 26 imposed by this Act to the extent deducted from 27 gross income in the computation of taxable income 28 for the taxable year; 29 (D) The amount of any net operating loss 30 deduction taken in arriving at taxable income, other 31 than a net operating loss carried forward from a 32 taxable year ending prior to December 31, 1986; 33 (E) For taxable years in which a net operating 34 loss carryback or carryforward from a taxable year SB2212 Enrolled -40- LRB9215616SMdv 1 ending prior to December 31, 1986 is an element of 2 taxable income under paragraph (1) of subsection (e) 3 or subparagraph (E) of paragraph (2) of subsection 4 (e), the amount by which addition modifications 5 other than those provided by this subparagraph (E) 6 exceeded subtraction modifications in such taxable 7 year, with the following limitations applied in the 8 order that they are listed: 9 (i) the addition modification relating to 10 the net operating loss carried back or forward 11 to the taxable year from any taxable year 12 ending prior to December 31, 1986 shall be 13 reduced by the amount of addition modification 14 under this subparagraph (E) which related to 15 that net operating loss and which was taken 16 into account in calculating the base income of 17 an earlier taxable year, and 18 (ii) the addition modification relating 19 to the net operating loss carried back or 20 forward to the taxable year from any taxable 21 year ending prior to December 31, 1986 shall 22 not exceed the amount of such carryback or 23 carryforward; 24 For taxable years in which there is a net 25 operating loss carryback or carryforward from more 26 than one other taxable year ending prior to December 27 31, 1986, the addition modification provided in this 28 subparagraph (E) shall be the sum of the amounts 29 computed independently under the preceding 30 provisions of this subparagraph (E) for each such 31 taxable year; 32 (F) For taxable years ending on or after 33 January 1, 1989, an amount equal to the tax deducted 34 pursuant to Section 164 of the Internal Revenue Code SB2212 Enrolled -41- LRB9215616SMdv 1 if the trust or estate is claiming the same tax for 2 purposes of the Illinois foreign tax credit under 3 Section 601 of this Act; 4 (G) An amount equal to the amount of the 5 capital gain deduction allowable under the Internal 6 Revenue Code, to the extent deducted from gross 7 income in the computation of taxable income; and 8 (G-5) For taxable years ending after December 9 31, 1997, an amount equal to any eligible 10 remediation costs that the trust or estate deducted 11 in computing adjusted gross income and for which the 12 trust or estate claims a credit under subsection (l) 13 of Section 201; 14 and by deducting from the total so obtained the sum of 15 the following amounts: 16 (H) An amount equal to all amounts included in 17 such total pursuant to the provisions of Sections 18 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 19 408 of the Internal Revenue Code or included in such 20 total as distributions under the provisions of any 21 retirement or disability plan for employees of any 22 governmental agency or unit, or retirement payments 23 to retired partners, which payments are excluded in 24 computing net earnings from self employment by 25 Section 1402 of the Internal Revenue Code and 26 regulations adopted pursuant thereto; 27 (I) The valuation limitation amount; 28 (J) An amount equal to the amount of any tax 29 imposed by this Act which was refunded to the 30 taxpayer and included in such total for the taxable 31 year; 32 (K) An amount equal to all amounts included in 33 taxable income as modified by subparagraphs (A), 34 (B), (C), (D), (E), (F) and (G) which are exempt SB2212 Enrolled -42- LRB9215616SMdv 1 from taxation by this State either by reason of its 2 statutes or Constitution or by reason of the 3 Constitution, treaties or statutes of the United 4 States; provided that, in the case of any statute of 5 this State that exempts income derived from bonds or 6 other obligations from the tax imposed under this 7 Act, the amount exempted shall be the interest net 8 of bond premium amortization; 9 (L) With the exception of any amounts 10 subtracted under subparagraph (K), an amount equal 11 to the sum of all amounts disallowed as deductions 12 by (i) Sections 171(a) (2) and 265(a)(2) of the 13 Internal Revenue Code, as now or hereafter amended, 14 and all amounts of expenses allocable to interest 15 and disallowed as deductions by Section 265(1) of 16 the Internal Revenue Code of 1954, as now or 17 hereafter amended; and (ii) for taxable years ending 18 on or after August 13, 1999, Sections 171(a)(2), 19 265, 280C, and 832(b)(5)(B)(i) of the Internal 20 Revenue Code; the provisions of this subparagraph 21 are exempt from the provisions of Section 250; 22 (M) An amount equal to those dividends 23 included in such total which were paid by a 24 corporation which conducts business operations in an 25 Enterprise Zone or zones created under the Illinois 26 Enterprise Zone Act and conducts substantially all 27 of its operations in an Enterprise Zone or Zones; 28 (N) An amount equal to any contribution made 29 to a job training project established pursuant to 30 the Tax Increment Allocation Redevelopment Act; 31 (O) An amount equal to those dividends 32 included in such total that were paid by a 33 corporation that conducts business operations in a 34 federally designated Foreign Trade Zone or Sub-Zone SB2212 Enrolled -43- LRB9215616SMdv 1 and that is designated a High Impact Business 2 located in Illinois; provided that dividends 3 eligible for the deduction provided in subparagraph 4 (M) of paragraph (2) of this subsection shall not be 5 eligible for the deduction provided under this 6 subparagraph (O); 7 (P) An amount equal to the amount of the 8 deduction used to compute the federal income tax 9 credit for restoration of substantial amounts held 10 under claim of right for the taxable year pursuant 11 to Section 1341 of the Internal Revenue Code of 12 1986; and 13 (Q) For taxable year 1999 and thereafter, an 14 amount equal to the amount of any (i) distributions, 15 to the extent includible in gross income for federal 16 income tax purposes, made to the taxpayer because of 17 his or her status as a victim of persecution for 18 racial or religious reasons by Nazi Germany or any 19 other Axis regime or as an heir of the victim and 20 (ii) items of income, to the extent includible in 21 gross income for federal income tax purposes, 22 attributable to, derived from or in any way related 23 to assets stolen from, hidden from, or otherwise 24 lost to a victim of persecution for racial or 25 religious reasons by Nazi Germany or any other Axis 26 regime immediately prior to, during, and immediately 27 after World War II, including, but not limited to, 28 interest on the proceeds receivable as insurance 29 under policies issued to a victim of persecution for 30 racial or religious reasons by Nazi Germany or any 31 other Axis regime by European insurance companies 32 immediately prior to and during World War II; 33 provided, however, this subtraction from federal 34 adjusted gross income does not apply to assets SB2212 Enrolled -44- LRB9215616SMdv 1 acquired with such assets or with the proceeds from 2 the sale of such assets; provided, further, this 3 paragraph shall only apply to a taxpayer who was the 4 first recipient of such assets after their recovery 5 and who is a victim of persecution for racial or 6 religious reasons by Nazi Germany or any other Axis 7 regime or as an heir of the victim. The amount of 8 and the eligibility for any public assistance, 9 benefit, or similar entitlement is not affected by 10 the inclusion of items (i) and (ii) of this 11 paragraph in gross income for federal income tax 12 purposes. This paragraph is exempt from the 13 provisions of Section 250. 14 (3) Limitation. The amount of any modification 15 otherwise required under this subsection shall, under 16 regulations prescribed by the Department, be adjusted by 17 any amounts included therein which were properly paid, 18 credited, or required to be distributed, or permanently 19 set aside for charitable purposes pursuant to Internal 20 Revenue Code Section 642(c) during the taxable year. 21 (d) Partnerships. 22 (1) In general. In the case of a partnership, base 23 income means an amount equal to the taxpayer's taxable 24 income for the taxable year as modified by paragraph (2). 25 (2) Modifications. The taxable income referred to 26 in paragraph (1) shall be modified by adding thereto the 27 sum of the following amounts: 28 (A) An amount equal to all amounts paid or 29 accrued to the taxpayer as interest or dividends 30 during the taxable year to the extent excluded from 31 gross income in the computation of taxable income; 32 (B) An amount equal to the amount of tax 33 imposed by this Act to the extent deducted from 34 gross income for the taxable year; SB2212 Enrolled -45- LRB9215616SMdv 1 (C) The amount of deductions allowed to the 2 partnership pursuant to Section 707 (c) of the 3 Internal Revenue Code in calculating its taxable 4 income; and 5 (D) An amount equal to the amount of the 6 capital gain deduction allowable under the Internal 7 Revenue Code, to the extent deducted from gross 8 income in the computation of taxable income; 9 and by deducting from the total so obtained the following 10 amounts: 11 (E) The valuation limitation amount; 12 (F) An amount equal to the amount of any tax 13 imposed by this Act which was refunded to the 14 taxpayer and included in such total for the taxable 15 year; 16 (G) An amount equal to all amounts included in 17 taxable income as modified by subparagraphs (A), 18 (B), (C) and (D) which are exempt from taxation by 19 this State either by reason of its statutes or 20 Constitution or by reason of the Constitution, 21 treaties or statutes of the United States; provided 22 that, in the case of any statute of this State that 23 exempts income derived from bonds or other 24 obligations from the tax imposed under this Act, the 25 amount exempted shall be the interest net of bond 26 premium amortization; 27 (H) Any income of the partnership which 28 constitutes personal service income as defined in 29 Section 1348 (b) (1) of the Internal Revenue Code 30 (as in effect December 31, 1981) or a reasonable 31 allowance for compensation paid or accrued for 32 services rendered by partners to the partnership, 33 whichever is greater; 34 (I) An amount equal to all amounts of income SB2212 Enrolled -46- LRB9215616SMdv 1 distributable to an entity subject to the Personal 2 Property Tax Replacement Income Tax imposed by 3 subsections (c) and (d) of Section 201 of this Act 4 including amounts distributable to organizations 5 exempt from federal income tax by reason of Section 6 501(a) of the Internal Revenue Code; 7 (J) With the exception of any amounts 8 subtracted under subparagraph (G), an amount equal 9 to the sum of all amounts disallowed as deductions 10 by (i) Sections 171(a) (2), and 265(2) of the 11 Internal Revenue Code of 1954, as now or hereafter 12 amended, and all amounts of expenses allocable to 13 interest and disallowed as deductions by Section 14 265(1) of the Internal Revenue Code, as now or 15 hereafter amended; and (ii) for taxable years ending 16 on or after August 13, 1999, Sections 171(a)(2), 17 265, 280C, and 832(b)(5)(B)(i) of the Internal 18 Revenue Code; the provisions of this subparagraph 19 are exempt from the provisions of Section 250; 20 (K) An amount equal to those dividends 21 included in such total which were paid by a 22 corporation which conducts business operations in an 23 Enterprise Zone or zones created under the Illinois 24 Enterprise Zone Act, enacted by the 82nd General 25 Assembly, and conducts substantially all of its 26 operationswhich does not conduct such operations27other thanin an Enterprise Zone or Zones; 28 (L) An amount equal to any contribution made 29 to a job training project established pursuant to 30 the Real Property Tax Increment Allocation 31 Redevelopment Act; 32 (M) An amount equal to those dividends 33 included in such total that were paid by a 34 corporation that conducts business operations in a SB2212 Enrolled -47- LRB9215616SMdv 1 federally designated Foreign Trade Zone or Sub-Zone 2 and that is designated a High Impact Business 3 located in Illinois; provided that dividends 4 eligible for the deduction provided in subparagraph 5 (K) of paragraph (2) of this subsection shall not be 6 eligible for the deduction provided under this 7 subparagraph (M); and 8 (N) An amount equal to the amount of the 9 deduction used to compute the federal income tax 10 credit for restoration of substantial amounts held 11 under claim of right for the taxable year pursuant 12 to Section 1341 of the Internal Revenue Code of 13 1986. 14 (e) Gross income; adjusted gross income; taxable income. 15 (1) In general. Subject to the provisions of 16 paragraph (2) and subsection (b) (3), for purposes of 17 this Section and Section 803(e), a taxpayer's gross 18 income, adjusted gross income, or taxable income for the 19 taxable year shall mean the amount of gross income, 20 adjusted gross income or taxable income properly 21 reportable for federal income tax purposes for the 22 taxable year under the provisions of the Internal Revenue 23 Code. Taxable income may be less than zero. However, for 24 taxable years ending on or after December 31, 1986, net 25 operating loss carryforwards from taxable years ending 26 prior to December 31, 1986, may not exceed the sum of 27 federal taxable income for the taxable year before net 28 operating loss deduction, plus the excess of addition 29 modifications over subtraction modifications for the 30 taxable year. For taxable years ending prior to December 31 31, 1986, taxable income may never be an amount in excess 32 of the net operating loss for the taxable year as defined 33 in subsections (c) and (d) of Section 172 of the Internal 34 Revenue Code, provided that when taxable income of a SB2212 Enrolled -48- LRB9215616SMdv 1 corporation (other than a Subchapter S corporation), 2 trust, or estate is less than zero and addition 3 modifications, other than those provided by subparagraph 4 (E) of paragraph (2) of subsection (b) for corporations 5 or subparagraph (E) of paragraph (2) of subsection (c) 6 for trusts and estates, exceed subtraction modifications, 7 an addition modification must be made under those 8 subparagraphs for any other taxable year to which the 9 taxable income less than zero (net operating loss) is 10 applied under Section 172 of the Internal Revenue Code or 11 under subparagraph (E) of paragraph (2) of this 12 subsection (e) applied in conjunction with Section 172 of 13 the Internal Revenue Code. 14 (2) Special rule. For purposes of paragraph (1) of 15 this subsection, the taxable income properly reportable 16 for federal income tax purposes shall mean: 17 (A) Certain life insurance companies. In the 18 case of a life insurance company subject to the tax 19 imposed by Section 801 of the Internal Revenue Code, 20 life insurance company taxable income, plus the 21 amount of distribution from pre-1984 policyholder 22 surplus accounts as calculated under Section 815a of 23 the Internal Revenue Code; 24 (B) Certain other insurance companies. In the 25 case of mutual insurance companies subject to the 26 tax imposed by Section 831 of the Internal Revenue 27 Code, insurance company taxable income; 28 (C) Regulated investment companies. In the 29 case of a regulated investment company subject to 30 the tax imposed by Section 852 of the Internal 31 Revenue Code, investment company taxable income; 32 (D) Real estate investment trusts. In the 33 case of a real estate investment trust subject to 34 the tax imposed by Section 857 of the Internal SB2212 Enrolled -49- LRB9215616SMdv 1 Revenue Code, real estate investment trust taxable 2 income; 3 (E) Consolidated corporations. In the case of 4 a corporation which is a member of an affiliated 5 group of corporations filing a consolidated income 6 tax return for the taxable year for federal income 7 tax purposes, taxable income determined as if such 8 corporation had filed a separate return for federal 9 income tax purposes for the taxable year and each 10 preceding taxable year for which it was a member of 11 an affiliated group. For purposes of this 12 subparagraph, the taxpayer's separate taxable income 13 shall be determined as if the election provided by 14 Section 243(b) (2) of the Internal Revenue Code had 15 been in effect for all such years; 16 (F) Cooperatives. In the case of a 17 cooperative corporation or association, the taxable 18 income of such organization determined in accordance 19 with the provisions of Section 1381 through 1388 of 20 the Internal Revenue Code; 21 (G) Subchapter S corporations. In the case 22 of: (i) a Subchapter S corporation for which there 23 is in effect an election for the taxable year under 24 Section 1362 of the Internal Revenue Code, the 25 taxable income of such corporation determined in 26 accordance with Section 1363(b) of the Internal 27 Revenue Code, except that taxable income shall take 28 into account those items which are required by 29 Section 1363(b)(1) of the Internal Revenue Code to 30 be separately stated; and (ii) a Subchapter S 31 corporation for which there is in effect a federal 32 election to opt out of the provisions of the 33 Subchapter S Revision Act of 1982 and have applied 34 instead the prior federal Subchapter S rules as in SB2212 Enrolled -50- LRB9215616SMdv 1 effect on July 1, 1982, the taxable income of such 2 corporation determined in accordance with the 3 federal Subchapter S rules as in effect on July 1, 4 1982; and 5 (H) Partnerships. In the case of a 6 partnership, taxable income determined in accordance 7 with Section 703 of the Internal Revenue Code, 8 except that taxable income shall take into account 9 those items which are required by Section 703(a)(1) 10 to be separately stated but which would be taken 11 into account by an individual in calculating his 12 taxable income. 13 (f) Valuation limitation amount. 14 (1) In general. The valuation limitation amount 15 referred to in subsections (a) (2) (G), (c) (2) (I) and 16 (d)(2) (E) is an amount equal to: 17 (A) The sum of the pre-August 1, 1969 18 appreciation amounts (to the extent consisting of 19 gain reportable under the provisions of Section 1245 20 or 1250 of the Internal Revenue Code) for all 21 property in respect of which such gain was reported 22 for the taxable year; plus 23 (B) The lesser of (i) the sum of the 24 pre-August 1, 1969 appreciation amounts (to the 25 extent consisting of capital gain) for all property 26 in respect of which such gain was reported for 27 federal income tax purposes for the taxable year, or 28 (ii) the net capital gain for the taxable year, 29 reduced in either case by any amount of such gain 30 included in the amount determined under subsection 31 (a) (2) (F) or (c) (2) (H). 32 (2) Pre-August 1, 1969 appreciation amount. 33 (A) If the fair market value of property 34 referred to in paragraph (1) was readily SB2212 Enrolled -51- LRB9215616SMdv 1 ascertainable on August 1, 1969, the pre-August 1, 2 1969 appreciation amount for such property is the 3 lesser of (i) the excess of such fair market value 4 over the taxpayer's basis (for determining gain) for 5 such property on that date (determined under the 6 Internal Revenue Code as in effect on that date), or 7 (ii) the total gain realized and reportable for 8 federal income tax purposes in respect of the sale, 9 exchange or other disposition of such property. 10 (B) If the fair market value of property 11 referred to in paragraph (1) was not readily 12 ascertainable on August 1, 1969, the pre-August 1, 13 1969 appreciation amount for such property is that 14 amount which bears the same ratio to the total gain 15 reported in respect of the property for federal 16 income tax purposes for the taxable year, as the 17 number of full calendar months in that part of the 18 taxpayer's holding period for the property ending 19 July 31, 1969 bears to the number of full calendar 20 months in the taxpayer's entire holding period for 21 the property. 22 (C) The Department shall prescribe such 23 regulations as may be necessary to carry out the 24 purposes of this paragraph. 25 (g) Double deductions. Unless specifically provided 26 otherwise, nothing in this Section shall permit the same item 27 to be deducted more than once. 28 (h) Legislative intention. Except as expressly provided 29 by this Section there shall be no modifications or 30 limitations on the amounts of income, gain, loss or deduction 31 taken into account in determining gross income, adjusted 32 gross income or taxable income for federal income tax 33 purposes for the taxable year, or in the amount of such items SB2212 Enrolled -52- LRB9215616SMdv 1 entering into the computation of base income and net income 2 under this Act for such taxable year, whether in respect of 3 property values as of August 1, 1969 or otherwise. 4 (Source: P.A. 91-192, eff. 7-20-99; 91-205, eff. 7-20-99; 5 91-357, eff. 7-29-99; 91-541, eff. 8-13-99; 91-676, eff. 6 12-23-99; 91-845, eff. 6-22-00; 91-913, eff. 1-1-01; 92-16, 7 eff. 6-28-01; 92-244, eff. 8-3-01; 92-439, eff. 8-17-01; 8 revised 9-21-01.) 9 (35 ILCS 5/209) 10 Sec. 209. Tax Credit for "TECH-PREP" youth vocational 11 programs. 12 (a) Beginning with tax years ending on or after June 30, 13 1995, every taxpayer who is primarily engaged in 14 manufacturing is allowed a credit against the tax imposed by 15 subsections (a) and (b) of Section 201 in an amount equal to 16 20% of the taxpayer's direct payroll expenditures for which a 17 credit has not already been claimed under subsection (j) of 18 Section 201 of this Act, in the tax year for which the credit 19 is claimed, for cooperative secondary school youth vocational 20 programs in Illinois which are certified as qualifying 21 TECH-PREP programs by the State Board of Educationand the22Department of Revenuebecause the programs prepare students 23 to be technically skilled workers and meet the performance 24 standards of business and industry and the admission 25 standards of higher education. The credit may also be claimed 26 for personal services rendered to the taxpayer by a TECH-PREP 27 student or instructor (i) which would be subject to the 28 provisions of Article 7 of this Act if the student or 29 instructor was an employee of the taxpayer and (ii) for which 30 no credit under this Section is claimed by another taxpayer. 31 (b) If the amount of the credit exceeds the tax 32 liability for the year, the excess may be carried forward and 33 applied to the tax liability of the 2 taxable years following SB2212 Enrolled -53- LRB9215616SMdv 1 the excess credit year. The credit shall be applied to the 2 earliest year for which there is a tax liability. If there 3 are credits from more than one tax year that are available to 4 offset a liability, the earlier credit shall be applied 5 first. 6 (c) A taxpayer claiming the credit provided by this 7 Section shall maintain and record such information regarding 8 its participation in a qualifying TECH-PREP program as the 9 Department may require by regulation. When claiming the 10 credit provided by this Section, the taxpayer shall provide 11 such information regarding the taxpayer's participation in a 12 qualifying TECH-PREP program as the Department of Revenue may 13 require by regulation. 14 (d) This Section does not apply to those programs with 15 national standards that have been or in the future are 16 approved by the U.S. Department of Labor, Bureau of 17 Apprenticeship Training or any federal agency succeeding to 18 the responsibilities of that Bureau. 19 (Source: P.A. 88-505; 89-399, eff. 8-20-95.) 20 (35 ILCS 5/502) (from Ch. 120, par. 5-502) 21 Sec. 502. Returns and notices. 22 (a) In general. A return with respect to the taxes 23 imposed by this Act shall be made by every person for any 24 taxable year: 25 (1) For which such person is liable for a tax 26 imposed by this Act, or 27 (2) In the case of a resident or in the case of a 28 corporation which is qualified to do business in this 29 State, for which such person is required to make a 30 federal income tax return, regardless of whether such 31 person is liable for a tax imposed by this Act. However, 32 this paragraph shall not require a resident to make a 33 return if such person has an Illinois base income of the SB2212 Enrolled -54- LRB9215616SMdv 1 basic amount in Section 204(b) or less and is either 2 claimed as a dependent on another person's tax return 3 under the Internal Revenue Code of 1986, or is claimed as 4 a dependent on another person's tax return under this 5 Act. 6 (b) Fiduciaries and receivers. 7 (1) Decedents. If an individual is deceased, any 8 return or notice required of such individual under this 9 Act shall be made by his executor, administrator, or 10 other person charged with the property of such decedent. 11 (2) Individuals under a disability. If an 12 individual is unable to make a return or notice required 13 under this Act, the return or notice required of such 14 individual shall be made by his duly authorized agent, 15 guardian, fiduciary or other person charged with the care 16 of the person or property of such individual. 17 (3) Estates and trusts. Returns or notices required 18 of an estate or a trust shall be made by the fiduciary 19 thereof. 20 (4) Receivers, trustees and assignees for 21 corporations. In a case where a receiver, trustee in 22 bankruptcy, or assignee, by order of a court of competent 23 jurisdiction, by operation of law, or otherwise, has 24 possession of or holds title to all or substantially all 25 the property or business of a corporation, whether or not 26 such property or business is being operated, such 27 receiver, trustee, or assignee shall make the returns and 28 notices required of such corporation in the same manner 29 and form as corporations are required to make such 30 returns and notices. 31 (c) Joint returns by husband and wife. 32 (1) Except as provided in paragraph (3), if a 33 husband and wife file a joint federal income tax return 34 for a taxable year they shall file a joint return under SB2212 Enrolled -55- LRB9215616SMdv 1 this Act for such taxable year and their liabilities 2 shall be joint and several, but if the federal income tax 3 liability of either spouse is determined on a separate 4 federal income tax return, they shall file separate 5 returns under this Act. 6 (2) If neither spouse is required to file a federal 7 income tax return and either or both are required to file 8 a return under this Act, they may elect to file separate 9 or joint returns and pursuant to such election their 10 liabilities shall be separate or joint and several. 11 (3) If either husband or wife is a resident and the 12 other is a nonresident, they shall file separate returns 13 in this State on such forms as may be required by the 14 Department in which event their tax liabilities shall be 15 separate; but they may elect to determine their joint net 16 income and file a joint return as if both were residents 17 and in such case, their liabilities shall be joint and 18 several. 19 (4) Innocent spouses. 20 (A) However, for tax liabilities arising and 21 paid prior to August 13, 1999the effective date of22this amendatory Act of the 91st General Assembly, an 23 innocent spouse shall be relieved of liability for 24 tax (including interest and penalties) for any 25 taxable year for which a joint return has been made, 26 upon submission of proof that the Internal Revenue 27 Service has made a determination under Section 28 6013(e) of the Internal Revenue Code, for the same 29 taxable year, which determination relieved the 30 spouse from liability for federal income taxes. If 31 there is no federal income tax liability at issue 32 for the same taxable year, the Department shall rely 33 on the provisions of Section 6013(e) to determine 34 whether the person requesting innocent spouse SB2212 Enrolled -56- LRB9215616SMdv 1 abatement of tax, penalty, and interest is entitled 2 to that relief. 3 (B) For