Public Act 90-0792 of the 90th General Assembly
Public Act 90-0792
SB1705 Enrolled LRB9008944LDbd
AN ACT regarding taxation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Income Tax Act is amended by
changing Section 201 as follows:
(35 ILCS 5/201) (from Ch. 120, par. 2-201)
Sec. 201. Tax Imposed.
(a) In general. A tax measured by net income is hereby
imposed on every individual, corporation, trust and estate
for each taxable year ending after July 31, 1969 on the
privilege of earning or receiving income in or as a resident
of this State. Such tax shall be in addition to all other
occupation or privilege taxes imposed by this State or by any
municipal corporation or political subdivision thereof.
(b) Rates. The tax imposed by subsection (a) of this
Section shall be determined as follows:
(1) In the case of an individual, trust or estate,
for taxable years ending prior to July 1, 1989, an amount
equal to 2 1/2% of the taxpayer's net income for the
taxable year.
(2) In the case of an individual, trust or estate,
for taxable years beginning prior to July 1, 1989 and
ending after June 30, 1989, an amount equal to the sum of
(i) 2 1/2% of the taxpayer's net income for the period
prior to July 1, 1989, as calculated under Section 202.3,
and (ii) 3% of the taxpayer's net income for the period
after June 30, 1989, as calculated under Section 202.3.
(3) In the case of an individual, trust or estate,
for taxable years beginning after June 30, 1989, an
amount equal to 3% of the taxpayer's net income for the
taxable year.
(4) (Blank).
(5) (Blank).
(6) In the case of a corporation, for taxable years
ending prior to July 1, 1989, an amount equal to 4% of
the taxpayer's net income for the taxable year.
(7) In the case of a corporation, for taxable years
beginning prior to July 1, 1989 and ending after June 30,
1989, an amount equal to the sum of (i) 4% of the
taxpayer's net income for the period prior to July 1,
1989, as calculated under Section 202.3, and (ii) 4.8% of
the taxpayer's net income for the period after June 30,
1989, as calculated under Section 202.3.
(8) In the case of a corporation, for taxable years
beginning after June 30, 1989, an amount equal to 4.8% of
the taxpayer's net income for the taxable year.
(c) Beginning on July 1, 1979 and thereafter, in
addition to such income tax, there is also hereby imposed the
Personal Property Tax Replacement Income Tax measured by net
income on every corporation (including Subchapter S
corporations), partnership and trust, for each taxable year
ending after June 30, 1979. Such taxes are imposed on the
privilege of earning or receiving income in or as a resident
of this State. The Personal Property Tax Replacement Income
Tax shall be in addition to the income tax imposed by
subsections (a) and (b) of this Section and in addition to
all other occupation or privilege taxes imposed by this State
or by any municipal corporation or political subdivision
thereof.
(d) Additional Personal Property Tax Replacement Income
Tax Rates. The personal property tax replacement income tax
imposed by this subsection and subsection (c) of this Section
in the case of a corporation, other than a Subchapter S
corporation, shall be an additional amount equal to 2.85% of
such taxpayer's net income for the taxable year, except that
beginning on January 1, 1981, and thereafter, the rate of
2.85% specified in this subsection shall be reduced to 2.5%,
and in the case of a partnership, trust or a Subchapter S
corporation shall be an additional amount equal to 1.5% of
such taxpayer's net income for the taxable year.
(e) Investment credit. A taxpayer shall be allowed a
credit against the Personal Property Tax Replacement Income
Tax for investment in qualified property.
(1) A taxpayer shall be allowed a credit equal to
.5% of the basis of qualified property placed in service
during the taxable year, provided such property is placed
in service on or after July 1, 1984. There shall be
allowed an additional credit equal to .5% of the basis of
qualified property placed in service during the taxable
year, provided such property is placed in service on or
after July 1, 1986, and the taxpayer's base employment
within Illinois has increased by 1% or more over the
preceding year as determined by the taxpayer's employment
records filed with the Illinois Department of Employment
Security. Taxpayers who are new to Illinois shall be
deemed to have met the 1% growth in base employment for
the first year in which they file employment records with
the Illinois Department of Employment Security. The
provisions added to this Section by Public Act 85-1200
(and restored by Public Act 87-895) shall be construed as
declaratory of existing law and not as a new enactment.
If, in any year, the increase in base employment within
Illinois over the preceding year is less than 1%, the
additional credit shall be limited to that percentage
times a fraction, the numerator of which is .5% and the
denominator of which is 1%, but shall not exceed .5%.
The investment credit shall not be allowed to the extent
that it would reduce a taxpayer's liability in any tax
year below zero, nor may any credit for qualified
property be allowed for any year other than the year in
which the property was placed in service in Illinois. For
tax years ending on or after December 31, 1987, and on or
before December 31, 1988, the credit shall be allowed for
the tax year in which the property is placed in service,
or, if the amount of the credit exceeds the tax liability
for that year, whether it exceeds the original liability
or the liability as later amended, such excess may be
carried forward and applied to the tax liability of the 5
taxable years following the excess credit years if the
taxpayer (i) makes investments which cause the creation
of a minimum of 2,000 full-time equivalent jobs in
Illinois, (ii) is located in an enterprise zone
established pursuant to the Illinois Enterprise Zone Act
and (iii) is certified by the Department of Commerce and
Community Affairs as complying with the requirements
specified in clause (i) and (ii) by July 1, 1986. The
Department of Commerce and Community Affairs shall notify
the Department of Revenue of all such certifications
immediately. For tax years ending after December 31,
1988, the credit shall be allowed for the tax year in
which the property is placed in service, or, if the
amount of the credit exceeds the tax liability for that
year, whether it exceeds the original liability or the
liability as later amended, such excess may be carried
forward and applied to the tax liability of the 5 taxable
years following the excess credit years. The credit shall
be applied to the earliest year for which there is a
liability. If there is credit from more than one tax year
that is available to offset a liability, earlier credit
shall be applied first.
(2) The term "qualified property" means property
which:
(A) is tangible, whether new or used,
including buildings and structural components of
buildings and signs that are real property, but not
including land or improvements to real property that
are not a structural component of a building such as
landscaping, sewer lines, local access roads,
fencing, parking lots, and other appurtenances;
(B) is depreciable pursuant to Section 167 of
the Internal Revenue Code, except that "3-year
property" as defined in Section 168(c)(2)(A) of that
Code is not eligible for the credit provided by this
subsection (e);
(C) is acquired by purchase as defined in
Section 179(d) of the Internal Revenue Code;
(D) is used in Illinois by a taxpayer who is
primarily engaged in manufacturing, or in mining
coal or fluorite, or in retailing; and
(E) has not previously been used in Illinois
in such a manner and by such a person as would
qualify for the credit provided by this subsection
(e) or subsection (f).
(3) For purposes of this subsection (e),
"manufacturing" means the material staging and production
of tangible personal property by procedures commonly
regarded as manufacturing, processing, fabrication, or
assembling which changes some existing material into new
shapes, new qualities, or new combinations. For purposes
of this subsection (e) the term "mining" shall have the
same meaning as the term "mining" in Section 613(c) of
the Internal Revenue Code. For purposes of this
subsection (e), the term "retailing" means the sale of
tangible personal property or services rendered in
conjunction with the sale of tangible consumer goods or
commodities.
(4) The basis of qualified property shall be the
basis used to compute the depreciation deduction for
federal income tax purposes.
(5) If the basis of the property for federal income
tax depreciation purposes is increased after it has been
placed in service in Illinois by the taxpayer, the amount
of such increase shall be deemed property placed in
service on the date of such increase in basis.
(6) The term "placed in service" shall have the
same meaning as under Section 46 of the Internal Revenue
Code.
(7) If during any taxable year, any property ceases
to be qualified property in the hands of the taxpayer
within 48 months after being placed in service, or the
situs of any qualified property is moved outside Illinois
within 48 months after being placed in service, the
Personal Property Tax Replacement Income Tax for such
taxable year shall be increased. Such increase shall be
determined by (i) recomputing the investment credit which
would have been allowed for the year in which credit for
such property was originally allowed by eliminating such
property from such computation and, (ii) subtracting such
recomputed credit from the amount of credit previously
allowed. For the purposes of this paragraph (7), a
reduction of the basis of qualified property resulting
from a redetermination of the purchase price shall be
deemed a disposition of qualified property to the extent
of such reduction.
(8) Unless the investment credit is extended by
law, the basis of qualified property shall not include
costs incurred after December 31, 2003, except for costs
incurred pursuant to a binding contract entered into on
or before December 31, 2003.
(9) Each taxable year, a partnership may elect to
pass through to its partners the credits to which the
partnership is entitled under this subsection (e) for the
taxable year. A partner may use the credit allocated to
him or her under this paragraph only against the tax
imposed in subsections (c) and (d) of this Section. If
the partnership makes that election, those credits shall
be allocated among the partners in the partnership in
accordance with the rules set forth in Section 704(b) of
the Internal Revenue Code, and the rules promulgated
under that Section, and the allocated amount of the
credits shall be allowed to the partners for that taxable
year. The partnership shall make this election on its
Personal Property Tax Replacement Income Tax return for
that taxable year. The election to pass through the
credits shall be irrevocable.
(f) Investment credit; Enterprise Zone.
(1) A taxpayer shall be allowed a credit against
the tax imposed by subsections (a) and (b) of this
Section for investment in qualified property which is
placed in service in an Enterprise Zone created pursuant
to the Illinois Enterprise Zone Act. For partners and for
shareholders of Subchapter S corporations, there shall be
allowed a credit under this subsection (f) to be
determined in accordance with the determination of income
and distributive share of income under Sections 702 and
704 and Subchapter S of the Internal Revenue Code. The
credit shall be .5% of the basis for such property. The
credit shall be available only in the taxable year in
which the property is placed in service in the Enterprise
Zone and shall not be allowed to the extent that it would
reduce a taxpayer's liability for the tax imposed by
subsections (a) and (b) of this Section to below zero.
For tax years ending on or after December 31, 1985, the
credit shall be allowed for the tax year in which the
property is placed in service, or, if the amount of the
credit exceeds the tax liability for that year, whether
it exceeds the original liability or the liability as
later amended, such excess may be carried forward and
applied to the tax liability of the 5 taxable years
following the excess credit year. The credit shall be
applied to the earliest year for which there is a
liability. If there is credit from more than one tax year
that is available to offset a liability, the credit
accruing first in time shall be applied first.
(2) The term qualified property means property
which:
(A) is tangible, whether new or used,
including buildings and structural components of
buildings;
(B) is depreciable pursuant to Section 167 of
the Internal Revenue Code, except that "3-year
property" as defined in Section 168(c)(2)(A) of that
Code is not eligible for the credit provided by this
subsection (f);
(C) is acquired by purchase as defined in
Section 179(d) of the Internal Revenue Code;
(D) is used in the Enterprise Zone by the
taxpayer; and
(E) has not been previously used in Illinois
in such a manner and by such a person as would
qualify for the credit provided by this subsection
(f) or subsection (e).
(3) The basis of qualified property shall be the
basis used to compute the depreciation deduction for
federal income tax purposes.
(4) If the basis of the property for federal income
tax depreciation purposes is increased after it has been
placed in service in the Enterprise Zone by the taxpayer,
the amount of such increase shall be deemed property
placed in service on the date of such increase in basis.
(5) The term "placed in service" shall have the
same meaning as under Section 46 of the Internal Revenue
Code.
(6) If during any taxable year, any property ceases
to be qualified property in the hands of the taxpayer
within 48 months after being placed in service, or the
situs of any qualified property is moved outside the
Enterprise Zone within 48 months after being placed in
service, the tax imposed under subsections (a) and (b) of
this Section for such taxable year shall be increased.
Such increase shall be determined by (i) recomputing the
investment credit which would have been allowed for the
year in which credit for such property was originally
allowed by eliminating such property from such
computation, and (ii) subtracting such recomputed credit
from the amount of credit previously allowed. For the
purposes of this paragraph (6), a reduction of the basis
of qualified property resulting from a redetermination of
the purchase price shall be deemed a disposition of
qualified property to the extent of such reduction.
(g) Jobs Tax Credit; Enterprise Zone and Foreign
Trade Zone or Sub-Zone.
(1) A taxpayer conducting a trade or business in an
enterprise zone or a High Impact Business designated by
the Department of Commerce and Community Affairs
conducting a trade or business in a federally designated
Foreign Trade Zone or Sub-Zone shall be allowed a credit
against the tax imposed by subsections (a) and (b) of
this Section in the amount of $500 per eligible employee
hired to work in the zone during the taxable year.
(2) To qualify for the credit:
(A) the taxpayer must hire 5 or more eligible
employees to work in an enterprise zone or federally
designated Foreign Trade Zone or Sub-Zone during the
taxable year;
(B) the taxpayer's total employment within the
enterprise zone or federally designated Foreign
Trade Zone or Sub-Zone must increase by 5 or more
full-time employees beyond the total employed in
that zone at the end of the previous tax year for
which a jobs tax credit under this Section was
taken, or beyond the total employed by the taxpayer
as of December 31, 1985, whichever is later; and
(C) the eligible employees must be employed
180 consecutive days in order to be deemed hired for
purposes of this subsection.
(3) An "eligible employee" means an employee who
is:
(A) Certified by the Department of Commerce
and Community Affairs as "eligible for services"
pursuant to regulations promulgated in accordance
with Title II of the Job Training Partnership Act,
Training Services for the Disadvantaged or Title III
of the Job Training Partnership Act, Employment and
Training Assistance for Dislocated Workers Program.
(B) Hired after the enterprise zone or
federally designated Foreign Trade Zone or Sub-Zone
was designated or the trade or business was located
in that zone, whichever is later.
(C) Employed in the enterprise zone or Foreign
Trade Zone or Sub-Zone. An employee is employed in
an enterprise zone or federally designated Foreign
Trade Zone or Sub-Zone if his services are rendered
there or it is the base of operations for the
services performed.
(D) A full-time employee working 30 or more
hours per week.
(4) For tax years ending on or after December 31,
1985 and prior to December 31, 1988, the credit shall be
allowed for the tax year in which the eligible employees
are hired. For tax years ending on or after December 31,
1988, the credit shall be allowed for the tax year
immediately following the tax year in which the eligible
employees are hired. If the amount of the credit exceeds
the tax liability for that year, whether it exceeds the
original liability or the liability as later amended,
such excess may be carried forward and applied to the tax
liability of the 5 taxable years following the excess
credit year. The credit shall be applied to the earliest
year for which there is a liability. If there is credit
from more than one tax year that is available to offset a
liability, earlier credit shall be applied first.
(5) The Department of Revenue shall promulgate such
rules and regulations as may be deemed necessary to carry
out the purposes of this subsection (g).
(6) The credit shall be available for eligible
employees hired on or after January 1, 1986.
(h) Investment credit; High Impact Business.
(1) Subject to subsection (b) of Section 5.5 of the
Illinois Enterprise Zone Act, a taxpayer shall be allowed
a credit against the tax imposed by subsections (a) and
(b) of this Section for investment in qualified property
which is placed in service by a Department of Commerce
and Community Affairs designated High Impact Business.
The credit shall be .5% of the basis for such property.
The credit shall not be available until the minimum
investments in qualified property set forth in Section
5.5 of the Illinois Enterprise Zone Act have been
satisfied and shall not be allowed to the extent that it
would reduce a taxpayer's liability for the tax imposed
by subsections (a) and (b) of this Section to below zero.
The credit applicable to such minimum investments shall
be taken in the taxable year in which such minimum
investments have been completed. The credit for
additional investments beyond the minimum investment by a
designated high impact business shall be available only
in the taxable year in which the property is placed in
service and shall not be allowed to the extent that it
would reduce a taxpayer's liability for the tax imposed
by subsections (a) and (b) of this Section to below zero.
For tax years ending on or after December 31, 1987, the
credit shall be allowed for the tax year in which the
property is placed in service, or, if the amount of the
credit exceeds the tax liability for that year, whether
it exceeds the original liability or the liability as
later amended, such excess may be carried forward and
applied to the tax liability of the 5 taxable years
following the excess credit year. The credit shall be
applied to the earliest year for which there is a
liability. If there is credit from more than one tax
year that is available to offset a liability, the credit
accruing first in time shall be applied first.
Changes made in this subdivision (h)(1) by Public
Act 88-670 restore changes made by Public Act 85-1182 and
reflect existing law.
(2) The term qualified property means property
which:
(A) is tangible, whether new or used,
including buildings and structural components of
buildings;
(B) is depreciable pursuant to Section 167 of
the Internal Revenue Code, except that "3-year
property" as defined in Section 168(c)(2)(A) of that
Code is not eligible for the credit provided by this
subsection (h);
(C) is acquired by purchase as defined in
Section 179(d) of the Internal Revenue Code; and
(D) is not eligible for the Enterprise Zone
Investment Credit provided by subsection (f) of this
Section.
(3) The basis of qualified property shall be the
basis used to compute the depreciation deduction for
federal income tax purposes.
(4) If the basis of the property for federal income
tax depreciation purposes is increased after it has been
placed in service in a federally designated Foreign Trade
Zone or Sub-Zone located in Illinois by the taxpayer, the
amount of such increase shall be deemed property placed
in service on the date of such increase in basis.
(5) The term "placed in service" shall have the
same meaning as under Section 46 of the Internal Revenue
Code.
(6) If during any taxable year ending on or before
December 31, 1996, any property ceases to be qualified
property in the hands of the taxpayer within 48 months
after being placed in service, or the situs of any
qualified property is moved outside Illinois within 48
months after being placed in service, the tax imposed
under subsections (a) and (b) of this Section for such
taxable year shall be increased. Such increase shall be
determined by (i) recomputing the investment credit which
would have been allowed for the year in which credit for
such property was originally allowed by eliminating such
property from such computation, and (ii) subtracting such
recomputed credit from the amount of credit previously
allowed. For the purposes of this paragraph (6), a
reduction of the basis of qualified property resulting
from a redetermination of the purchase price shall be
deemed a disposition of qualified property to the extent
of such reduction.
(7) Beginning with tax years ending after December
31, 1996, if a taxpayer qualifies for the credit under
this subsection (h) and thereby is granted a tax
abatement and the taxpayer relocates its entire facility
in violation of the explicit terms and length of the
contract under Section 18-183 of the Property Tax Code,
the tax imposed under subsections (a) and (b) of this
Section shall be increased for the taxable year in which
the taxpayer relocated its facility by an amount equal to
the amount of credit received by the taxpayer under this
subsection (h).
(i) A credit shall be allowed against the tax imposed by
subsections (a) and (b) of this Section for the tax imposed
by subsections (c) and (d) of this Section. This credit
shall be computed by multiplying the tax imposed by
subsections (c) and (d) of this Section by a fraction, the
numerator of which is base income allocable to Illinois and
the denominator of which is Illinois base income, and further
multiplying the product by the tax rate imposed by
subsections (a) and (b) of this Section.
Any credit earned on or after December 31, 1986 under
this subsection which is unused in the year the credit is
computed because it exceeds the tax liability imposed by
subsections (a) and (b) for that year (whether it exceeds the
original liability or the liability as later amended) may be
carried forward and applied to the tax liability imposed by
subsections (a) and (b) of the 5 taxable years following the
excess credit year. This credit shall be applied first to
the earliest year for which there is a liability. If there
is a credit under this subsection from more than one tax year
that is available to offset a liability the earliest credit
arising under this subsection shall be applied first.
If, during any taxable year ending on or after December
31, 1986, the tax imposed by subsections (c) and (d) of this
Section for which a taxpayer has claimed a credit under this
subsection (i) is reduced, the amount of credit for such tax
shall also be reduced. Such reduction shall be determined by
recomputing the credit to take into account the reduced tax
imposed by subsection (c) and (d). If any portion of the
reduced amount of credit has been carried to a different
taxable year, an amended return shall be filed for such
taxable year to reduce the amount of credit claimed.
(j) Training expense credit. Beginning with tax years
ending on or after December 31, 1986, a taxpayer shall be
allowed a credit against the tax imposed by subsection (a)
and (b) under this Section for all amounts paid or accrued,
on behalf of all persons employed by the taxpayer in Illinois
or Illinois residents employed outside of Illinois by a
taxpayer, for educational or vocational training in
semi-technical or technical fields or semi-skilled or skilled
fields, which were deducted from gross income in the
computation of taxable income. The credit against the tax
imposed by subsections (a) and (b) shall be 1.6% of such
training expenses. For partners and for shareholders of
subchapter S corporations, there shall be allowed a credit
under this subsection (j) to be determined in accordance with
the determination of income and distributive share of income
under Sections 702 and 704 and subchapter S of the Internal
Revenue Code.
Any credit allowed under this subsection which is unused
in the year the credit is earned may be carried forward to
each of the 5 taxable years following the year for which the
credit is first computed until it is used. This credit shall
be applied first to the earliest year for which there is a
liability. If there is a credit under this subsection from
more than one tax year that is available to offset a
liability the earliest credit arising under this subsection
shall be applied first.
(k) Research and development credit.
Beginning with tax years ending after July 1, 1990, a
taxpayer shall be allowed a credit against the tax imposed by
subsections (a) and (b) of this Section for increasing
research activities in this State. The credit allowed
against the tax imposed by subsections (a) and (b) shall be
equal to 6 1/2% of the qualifying expenditures for increasing
research activities in this State.
For purposes of this subsection, "qualifying
expenditures" means the qualifying expenditures as defined
for the federal credit for increasing research activities
which would be allowable under Section 41 of the Internal
Revenue Code and which are conducted in this State,
"qualifying expenditures for increasing research activities
in this State" means the excess of qualifying expenditures
for the taxable year in which incurred over qualifying
expenditures for the base period, "qualifying expenditures
for the base period" means the average of the qualifying
expenditures for each year in the base period, and "base
period" means the 3 taxable years immediately preceding the
taxable year for which the determination is being made.
Any credit in excess of the tax liability for the taxable
year may be carried forward. A taxpayer may elect to have the
unused credit shown on its final completed return carried
over as a credit against the tax liability for the following
5 taxable years or until it has been fully used, whichever
occurs first.
If an unused credit is carried forward to a given year
from 2 or more earlier years, that credit arising in the
earliest year will be applied first against the tax liability
for the given year. If a tax liability for the given year
still remains, the credit from the next earliest year will
then be applied, and so on, until all credits have been used
or no tax liability for the given year remains. Any
remaining unused credit or credits then will be carried
forward to the next following year in which a tax liability
is incurred, except that no credit can be carried forward to
a year which is more than 5 years after the year in which the
expense for which the credit is given was incurred.
Unless extended by law, the credit shall not include
costs incurred after December 31, 1999, except for costs
incurred pursuant to a binding contract entered into on or
before December 31, 1999.
(l) Environmental Remediation Tax Credit.
(i) For tax years ending after December 31, 1997
and on or before December 31, 2001, a taxpayer shall be
allowed a credit against the tax imposed by subsections
(a) and (b) of this Section for certain amounts paid for
unreimbursed eligible remediation costs, as specified in
this subsection. For purposes of this Section,
"unreimbursed eligible remediation costs" means costs
approved by the Illinois Environmental Protection Agency
("Agency") under Section 58.14 of the Environmental
Protection Act that were paid in performing environmental
remediation at a site for which a No Further Remediation
Letter was issued by the Agency and recorded under
Section 58.10 of the Environmental Protection Act, and
does not mean approved eligible remediation costs that
are at any time deducted under the provisions of the
Internal Revenue Code. The credit must be claimed for
the taxable year in which Agency approval of the eligible
remediation costs is granted. In no event shall
unreimbursed eligible remediation costs include any costs
taken into account in calculating an environmental
remediation credit granted against a tax imposed under
the provisions of the Internal Revenue Code. The credit
is not available to any taxpayer if the taxpayer or any
related party caused or contributed to, in any material
respect, a release of regulated substances on, in, or
under the site that was identified and addressed by the
remedial action pursuant to the Site Remediation Program
of the Environmental Protection Act. After the Pollution
Control Board rules are adopted pursuant to the Illinois
Administrative Procedure Act for the administration and
enforcement of Section 58.9 of the Environmental
Protection Act, determinations as to credit availability
for purposes of this Section shall be made consistent
with those rules. For purposes of this Section,
"taxpayer" includes a person whose tax attributes the
taxpayer has succeeded to under Section 381 of the
Internal Revenue Code and "related party" includes the
persons disallowed a deduction for losses by paragraphs
(b), (c), and (f)(1) of Section 267 of the Internal
Revenue Code by virtue of being a related taxpayer, as
well as any of its partners. The credit allowed against
the tax imposed by subsections (a) and (b) shall be equal
to 25% of the unreimbursed eligible remediation costs in
excess of $100,000 per site, except that the $100,000
threshold shall not apply to any site contained in an
enterprise zone as and located in a census tract that is
located in a minor civil division and place or county
that has been determined by the Department of Commerce
and Community Affairs to contain a majority of households
consisting of low and moderate income persons. The total
credit allowed shall not exceed $40,000 per year with a
maximum total of $150,000 per site. For partners and
shareholders of subchapter S corporations, there shall be
allowed a credit under this subsection to be determined
in accordance with the determination of income and
distributive share of income under Sections 702 and 704
of subchapter S of the Internal Revenue Code.
(ii) A credit allowed under this subsection that is
unused in the year the credit is earned may be carried
forward to each of the 5 taxable years following the year
for which the credit is first earned until it is used.
The term "unused credit" does not include any amounts of
unreimbursed eligible remediation costs in excess of the
maximum credit per site authorized under paragraph (i).
This credit shall be applied first to the earliest year
for which there is a liability. If there is a credit
under this subsection from more than one tax year that is
available to offset a liability, the earliest credit
arising under this subsection shall be applied first. A
credit allowed under this subsection may be sold to a
buyer as part of a sale of all or part of the remediation
site for which the credit was granted. The purchaser of
a remediation site and the tax credit shall succeed to
the unused credit and remaining carry-forward period of
the seller. To perfect the transfer, the assignor shall
record the transfer in the chain of title for the site
and provide written notice to the Director of the
Illinois Department of Revenue of the assignor's intent
to sell the remediation site and the amount of the tax
credit to be transferred as a portion of the sale. In no
event may a credit be transferred to any taxpayer if the
taxpayer or a related party would not be eligible under
the provisions of subsection (i).
(iii) For purposes of this Section, the term "site"
shall have the same meaning as under Section 58.2 of the
Environmental Protection Act.
(Source: P.A. 89-235, eff. 8-4-95; 89-519, eff. 7-18-96;
89-591, eff. 8-1-96; 90-123, eff. 7-21-97; 90-458, eff.
8-17-97; revised 10-16-97.)
Section 6. The Use Tax Act is amended by changing
Section 12 as follows:
(35 ILCS 105/12) (from Ch. 120, par. 439.12)
Sec. 12. Applicability of Retailers' Occupation Tax Act
and Uniform Penalty and Interest Act. All of the provisions
of Sections 1d, 1e, 1f, 1i, 1j, 1j.1, 1k, 1m, 1n, 1o, 2a, 2b,
2c, 3, 4 (except that the time limitation provisions shall
run from the date when the tax is due rather than from the
date when gross receipts are received), 5 (except that the
time limitation provisions on the issuance of notices of tax
liability shall run from the date when the tax is due rather
than from the date when gross receipts are received and
except that in the case of a failure to file a return
required by this Act, no notice of tax liability shall be
issued on and after each July 1 and January 1 covering tax
due with that return during any month or period more than 6
years before that July 1 or January 1, respectively), 5a, 5b,
5c, 5d, 5e, 5f, 5g, 5h, 5j, 5k, 5l, 7, 8, 9, 10, 11 and 12 of
the Retailers' Occupation Tax Act and Section 3-7 of the
Uniform Penalty and Interest Act, which are not inconsistent
with this Act, shall apply, as far as practicable, to the
subject matter of this Act to the same extent as if such
provisions were included herein.
(Source: P.A. 90-42, eff. 1-1-98.)
Section 7. The Service Use Tax Act is amended by
changing Section 12 as follows:
(35 ILCS 110/12) (from Ch. 120, par. 439.42)
Sec. 12. Applicability of Retailers' Occupation Tax Act
and Uniform Penalty and Interest Act. All of the provisions
of Sections 1d, 1e, 1f, 1i, 1j, 1j.1, 1k, 1m, 1n, 1o, 2a, 2b,
2c, 3 (except as to the disposition by the Department of the
money collected under this Act), 4 (except that the time
limitation provisions shall run from the date when gross
receipts are received), 5 (except that the time limitation
provisions on the issuance of notices of tax liability shall
run from the date when the tax is due rather than from the
date when gross receipts are received and except that in the
case of a failure to file a return required by this Act, no
notice of tax liability shall be issued on and after July 1
and January 1 covering tax due with that return during any
month or period more than 6 years before that July 1 or
January 1, respectively), 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5j, 5k,
5l, 7, 8, 9, 10, 11 and 12 of the Retailers' Occupation Tax
Act which are not inconsistent with this Act, and Section 3-7
of the Uniform Penalty and Interest Act, shall apply, as far
as practicable, to the subject matter of this Act to the same
extent as if such provisions were included herein.
(Source: P.A. 90-42, eff. 1-1-98.)
Section 8. The Service Occupation Tax Act is amended by
changing Section 12 as follows:
(35 ILCS 115/12) (from Ch. 120, par. 439.112)
Sec. 12. All of the provisions of Sections 1d, 1e, 1f,
1i, 1j, 1j.1, 1k, 1m, 1n, 1o, 2a, 2b, 2c, 3 (except as to the
disposition by the Department of the tax collected under this
Act), 4 (except that the time limitation provisions shall run
from the date when the tax is due rather than from the date
when gross receipts are received), 5 (except that the time
limitation provisions on the issuance of notices of tax
liability shall run from the date when the tax is due rather
than from the date when gross receipts are received), 5a, 5b,
5c, 5d, 5e, 5f, 5g, 5j, 5k, 5l, 7, 8, 9, 10, 11 and 12 of the
"Retailers' Occupation Tax Act" which are not inconsistent
with this Act, and Section 3-7 of the Uniform Penalty and
Interest Act shall apply, as far as practicable, to the
subject matter of this Act to the same extent as if such
provisions were included herein.
(Source: P.A. 90-42, eff. 1-1-98.)
Section 9. The Retailers' Occupation Tax Act is amended
by adding Section 1o as follows:
(35 ILCS 120/1o new)
Sec. 1o. Aircraft support center exemption.
(a) For the purposes of this Act, "aircraft support
center" means a support center operated by a carrier for hire
that is used primarily for the maintenance, rebuilding, or
repair of aircraft, aircraft parts, and auxiliary equipment,
and which carrier:
(1) will make an investment of $30,000,000 or more
at a federal Air Force Base located in this State;
(2) will cause the creation of at least 750
full-time jobs at a joint use military and civilian
airport at that federal Air Force Base;
(3) enters into a legally binding agreement with the
Department of Commerce and Community Affairs to comply
with paragraphs (1) and (2) within a time period
specified in the rules and regulations promulgated by the
Department of Commerce and Community Affairs pursuant to
this subsection; and
(4) is certified by the Department of Commerce and
Community Affairs to be in compliance with paragraphs
(1), (2), and (3).
Any aircraft support center applying for an exemption stated
in this Section shall make application to the Department of
Commerce and Community Affairs in such form and providing
such information as may be prescribed by that Department. The
Department of Commerce and Community Affairs shall determine
whether the aircraft support center meets the criteria
prescribed in this subsection. If the Department of Commerce
and Community Affairs determines that the aircraft support
center meets the criteria, it shall issue a certificate of
eligibility for exemption in the form prescribed by the
Department of Revenue to the carrier operating the aircraft
support center. The Department of Commerce and Community
Affairs shall act upon certification request within 60 days
after receipt of application and shall file with the
Department of Revenue a copy of each certificate of
eligibility for exemption.
The Department of Commerce and Community Affairs shall
promulgate rules and regulations to carry out the provisions
of this subsection and to require that any business operating
an aircraft support center that is granted a tax exemption
pay the exempted tax to the Department of Revenue if the
business fails to comply with the terms and conditions of the
certification and pay all penalties and interest on that
exempted tax as determined by the Department of Revenue.
The certificate of eligibility for exemption shall be
presented by the carrier operating an aircraft support center
to its supplier when making the initial purchase of items for
which an exemption is granted by this Section together with a
certification by the business that the items are exempt from
taxation under this Act. The exempt status, if any, of each
subsequent purchase shall be indicated on the face of the
purchase order.
(b) Subject to the provisions of this subsection, jet
fuel and petroleum products used or consumed by any aircraft
support center directly in the process of maintaining,
rebuilding, or repairing aircraft is exempt from the tax
imposed by this Act. The Department of Revenue shall
promulgate any rules necessary to further define the items
eligible for exemption.
(c) This Section is exempt from the provisions of
Section 2-70.
Section 10. The Environmental Protection Act is amended
by changing Section 58.14 as follows:
(415 ILCS 5/58.14)
Sec. 58.14. Environmental Remediation Tax Credit review.
(a) Prior to applying for the Environmental Remediation
Tax Credit under Section 201 of the Illinois Income Tax Act,
Remediation Applicants shall first submit to the Agency an
application for review of remediation costs. The application
and review process shall be conducted in accordance with the
requirements of this Section and the rules adopted under
subsection (g). A preliminary review of the estimated
remediation costs for development and implementation of the
Remedial Action Plan may be obtained in accordance with
subsection (d).
(b) No application for review shall be submitted until a
No Further Remediation Letter has been issued by the Agency
and recorded in the chain of title for the site in accordance
with Section 58.10. The Agency shall review the application
to determine whether the costs submitted are remediation
costs, and whether the costs incurred are reasonable. The
application shall be on forms prescribed and provided by the
Agency. At a minimum, the application shall include the
following:
(1) information identifying the Remediation
Applicant and the site for which the tax credit is being
sought and the date of acceptance of the site into the
Site Remediation Program;
(2) a copy of the No Further Remediation Letter
with official verification that the letter has been
recorded in the chain of title for the site and a
demonstration that the site for which the application is
submitted is the same site as the one for which the No
Further Remediation Letter is issued;
(3) a demonstration that the release of the
regulated substances of concern for which the No Further
Remediation Letter was issued were not caused or
contributed to in any material respect by the Remediation
Applicant. After the Pollution Control Board rules are
adopted pursuant to the Illinois Administrative Procedure
Act for the administration and enforcement of Section
58.9 of the Environmental Protection Act, determinations
as to credit availability shall be made consistent with
those rules;
(4) an itemization and documentation, including
receipts, of the remediation costs incurred;
(5) a demonstration that the costs incurred are
remediation costs as defined in this Act and its rules;
(6) a demonstration that the costs submitted for
review were incurred by the Remediation Applicant who
received the No Further Remediation Letter;
(7) an application fee in the amount set forth in
subsection (e) for each site for which review of
remediation costs is requested and, if applicable,
certification from the Department of Commerce and
Community Affairs that the site is located in an
enterprise zone and is located in a census tract that is
located in a minor civil division and place or county
that has been determined by the Department of Commerce
and Community Affairs to contain a majority of households
consisting of low and moderate income persons;
(8) any other information deemed appropriate by the
Agency.
(c) Within 60 days after receipt by the Agency of an
application meeting the requirements of subsection (b), the
Agency shall issue a letter to the applicant approving,
disapproving, or modifying the remediation costs submitted in
the application. If the remediation costs are approved as
submitted, the Agency's letter shall state the amount of the
remediation costs to be applied toward the Environmental
Remediation Tax Credit. If an application is disapproved or
approved with modification of remediation costs, the Agency's
letter shall set forth the reasons for the disapproval or
modification and state the amount of the remediation costs,
if any, to be applied toward the Environmental Remediation
Tax Credit.
If a preliminary review of a budget plan has been
obtained under subsection (d), the Remediation Applicant may
submit, with the application and supporting documentation
under subsection (b), a copy of the Agency's final
determination accompanied by a certification that the actual
remediation costs incurred for the development and
implementation of the Remedial Action Plan are equal to or
less than the costs approved in the Agency's final
determination on the budget plan. The certification shall be
signed by the Remediation Applicant and notarized. Based on
that submission, the Agency shall not be required to conduct
further review of the costs incurred for development and
implementation of the Remedial Action Plan and may approve
costs as submitted.
Within 35 days after receipt of an Agency letter
disapproving or modifying an application for approval of
remediation costs, the Remediation Applicant may appeal the
Agency's decision to the Board in the manner provided for the
review of permits in Section 40 of this Act.
(d) (1) A Remediation Applicant may obtain a preliminary
review of estimated remediation costs for the development
and implementation of the Remedial Action Plan by
submitting a budget plan along with the Remedial Action
Plan. The budget plan shall be set forth on forms
prescribed and provided by the Agency and shall include
but shall not be limited to line item estimates of the
costs associated with each line item (such as personnel,
equipment, and materials) that the Remediation Applicant
anticipates will be incurred for the development and
implementation of the Remedial Action Plan. The Agency
shall review the budget plan along with the Remedial
Action Plan to determine whether the estimated costs
submitted are remediation costs and whether the costs
estimated for the activities are reasonable.
(2) If the Remedial Action Plan is amended by the
Remediation Applicant or as a result of Agency action,
the corresponding budget plan shall be revised
accordingly and resubmitted for Agency review.
(3) The budget plan shall be accompanied by the
applicable fee as set forth in subsection (e).
(4) Submittal of a budget plan shall be deemed an
automatic 60-day waiver of the Remedial Action Plan
review deadlines set forth in this Section and its rules.
(5) Within the applicable period of review, the
Agency shall issue a letter to the Remediation Applicant
approving, disapproving, or modifying the estimated
remediation costs submitted in the budget plan. If a
budget plan is disapproved or approved with modification
of estimated remediation costs, the Agency's letter shall
set forth the reasons for the disapproval or
modification.
(6) Within 35 days after receipt of an Agency
letter disapproving or modifying a budget plan, the
Remediation Applicant may appeal the Agency's decision to
the Board in the manner provided for the review of
permits in Section 40 of this Act.
(e) The fees for reviews conducted under this Section
are in addition to any other fees or payments for Agency
services rendered pursuant to the Site Remediation Program
and shall be as follows:
(1) The fee for an application for review of
remediation costs shall be $1,000 for each site reviewed.
(2) The fee for the review of the budget plan
submitted under subsection (d) shall be $500 for each
site reviewed.
(3) In the case of a Remediation Applicant
submitting for review total remediation costs of $100,000
or less for a site located within an enterprise zone (as
set forth in paragraph (i) of subsection (l) of Section
201 of the Illinois Income Tax Act), the fee for an
application for review of remediation costs shall be $250
for each site reviewed. For those sites, there shall be
no fee for review of a budget plan under subsection (d).
The application fee shall be made payable to the State of
Illinois, for deposit into the Hazardous Waste Fund.
Pursuant to appropriation, the Agency shall use the fees
collected under this subsection for development and
administration of the review program.
(f) The Agency shall have the authority to enter into
any contracts or agreements that may be necessary to carry
out its duties and responsibilities under this Section.
(g) Within 6 months after the effective date of this
amendatory Act of 1997, the Agency shall propose rules
prescribing procedures and standards for its administration
of this Section. Within 6 months after receipt of the
Agency's proposed rules, the Board shall adopt on second
notice, pursuant to Sections 27 and 28 of this Act and the
Illinois Administrative Procedure Act, rules that are
consistent with this Section. Prior to the effective date of
rules adopted under this Section, the Agency may conduct
reviews of applications under this Section and the Agency is
further authorized to distribute guidance documents on costs
that are eligible or ineligible as remediation costs.
(Source: P.A. 90-123, eff. 7-21-97.)