101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB0319

 

Introduced , by Rep. David McSweeney

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/201  from Ch. 120, par. 2-201
35 ILCS 5/901  from Ch. 120, par. 9-901

    Amends the Illinois Income Tax Act. Reduces the income tax rate for corporations to 2.625% for taxable years beginning on or after January 1, 2019. Effective immediately.


LRB101 04004 HLH 49012 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB0319LRB101 04004 HLH 49012 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5changing Sections 201 and 901 as follows:
 
6    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
7    Sec. 201. Tax imposed.
8    (a) In general. A tax measured by net income is hereby
9imposed on every individual, corporation, trust and estate for
10each taxable year ending after July 31, 1969 on the privilege
11of earning or receiving income in or as a resident of this
12State. Such tax shall be in addition to all other occupation or
13privilege taxes imposed by this State or by any municipal
14corporation or political subdivision thereof.
15    (b) Rates. The tax imposed by subsection (a) of this
16Section shall be determined as follows, except as adjusted by
17subsection (d-1):
18        (1) In the case of an individual, trust or estate, for
19    taxable years ending prior to July 1, 1989, an amount equal
20    to 2 1/2% of the taxpayer's net income for the taxable
21    year.
22        (2) In the case of an individual, trust or estate, for
23    taxable years beginning prior to July 1, 1989 and ending

 

 

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1    after June 30, 1989, an amount equal to the sum of (i) 2
2    1/2% of the taxpayer's net income for the period prior to
3    July 1, 1989, as calculated under Section 202.3, and (ii)
4    3% of the taxpayer's net income for the period after June
5    30, 1989, as calculated under Section 202.3.
6        (3) In the case of an individual, trust or estate, for
7    taxable years beginning after June 30, 1989, and ending
8    prior to January 1, 2011, an amount equal to 3% of the
9    taxpayer's net income for the taxable year.
10        (4) In the case of an individual, trust, or estate, for
11    taxable years beginning prior to January 1, 2011, and
12    ending after December 31, 2010, an amount equal to the sum
13    of (i) 3% of the taxpayer's net income for the period prior
14    to January 1, 2011, as calculated under Section 202.5, and
15    (ii) 5% of the taxpayer's net income for the period after
16    December 31, 2010, as calculated under Section 202.5.
17        (5) In the case of an individual, trust, or estate, for
18    taxable years beginning on or after January 1, 2011, and
19    ending prior to January 1, 2015, an amount equal to 5% of
20    the taxpayer's net income for the taxable year.
21        (5.1) In the case of an individual, trust, or estate,
22    for taxable years beginning prior to January 1, 2015, and
23    ending after December 31, 2014, an amount equal to the sum
24    of (i) 5% of the taxpayer's net income for the period prior
25    to January 1, 2015, as calculated under Section 202.5, and
26    (ii) 3.75% of the taxpayer's net income for the period

 

 

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1    after December 31, 2014, as calculated under Section 202.5.
2        (5.2) In the case of an individual, trust, or estate,
3    for taxable years beginning on or after January 1, 2015,
4    and ending prior to July 1, 2017, an amount equal to 3.75%
5    of the taxpayer's net income for the taxable year.
6        (5.3) In the case of an individual, trust, or estate,
7    for taxable years beginning prior to July 1, 2017, and
8    ending after June 30, 2017, an amount equal to the sum of
9    (i) 3.75% of the taxpayer's net income for the period prior
10    to July 1, 2017, as calculated under Section 202.5, and
11    (ii) 4.95% of the taxpayer's net income for the period
12    after June 30, 2017, as calculated under Section 202.5.
13        (5.4) In the case of an individual, trust, or estate,
14    for taxable years beginning on or after July 1, 2017, an
15    amount equal to 4.95% of the taxpayer's net income for the
16    taxable year.
17        (6) In the case of a corporation, for taxable years
18    ending prior to July 1, 1989, an amount equal to 4% of the
19    taxpayer's net income for the taxable year.
20        (7) In the case of a corporation, for taxable years
21    beginning prior to July 1, 1989 and ending after June 30,
22    1989, an amount equal to the sum of (i) 4% of the
23    taxpayer's net income for the period prior to July 1, 1989,
24    as calculated under Section 202.3, and (ii) 4.8% of the
25    taxpayer's net income for the period after June 30, 1989,
26    as calculated under Section 202.3.

 

 

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1        (8) In the case of a corporation, for taxable years
2    beginning after June 30, 1989, and ending prior to January
3    1, 2011, an amount equal to 4.8% of the taxpayer's net
4    income for the taxable year.
5        (9) In the case of a corporation, for taxable years
6    beginning prior to January 1, 2011, and ending after
7    December 31, 2010, an amount equal to the sum of (i) 4.8%
8    of the taxpayer's net income for the period prior to
9    January 1, 2011, as calculated under Section 202.5, and
10    (ii) 7% of the taxpayer's net income for the period after
11    December 31, 2010, as calculated under Section 202.5.
12        (10) In the case of a corporation, for taxable years
13    beginning on or after January 1, 2011, and ending prior to
14    January 1, 2015, an amount equal to 7% of the taxpayer's
15    net income for the taxable year.
16        (11) In the case of a corporation, for taxable years
17    beginning prior to January 1, 2015, and ending after
18    December 31, 2014, an amount equal to the sum of (i) 7% of
19    the taxpayer's net income for the period prior to January
20    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
21    of the taxpayer's net income for the period after December
22    31, 2014, as calculated under Section 202.5.
23        (12) In the case of a corporation, for taxable years
24    beginning on or after January 1, 2015, and ending prior to
25    July 1, 2017, an amount equal to 5.25% of the taxpayer's
26    net income for the taxable year.

 

 

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1        (13) In the case of a corporation, for taxable years
2    beginning prior to July 1, 2017, and ending after June 30,
3    2017, an amount equal to the sum of (i) 5.25% of the
4    taxpayer's net income for the period prior to July 1, 2017,
5    as calculated under Section 202.5, and (ii) 7% of the
6    taxpayer's net income for the period after June 30, 2017,
7    as calculated under Section 202.5.
8        (14) In the case of a corporation, for taxable years
9    beginning on or after July 1, 2017 and ending prior to
10    January 1, 2019, an amount equal to 7% of the taxpayer's
11    net income for the taxable year.
12        (15) In the case of a corporation, for taxable years
13    beginning prior to January 1, 2019, and ending after
14    December 31, 2018, an amount equal to the sum of (i) 7% of
15    the taxpayer's net income for the period prior to January
16    1, 2019, as calculated under Section 202.5, and (ii) 2.625%
17    of the taxpayer's net income for the period after December
18    31, 2018, as calculated under Section 202.5.
19        (16) In the case of a corporation, for taxable years
20    beginning on or after January 1, 2019, an amount equal to
21    2.625% of the taxpayer's net income for the taxable year.
22    The rates under this subsection (b) are subject to the
23provisions of Section 201.5.
24    (c) Personal Property Tax Replacement Income Tax.
25Beginning on July 1, 1979 and thereafter, in addition to such
26income tax, there is also hereby imposed the Personal Property

 

 

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1Tax Replacement Income Tax measured by net income on every
2corporation (including Subchapter S corporations), partnership
3and trust, for each taxable year ending after June 30, 1979.
4Such taxes are imposed on the privilege of earning or receiving
5income in or as a resident of this State. The Personal Property
6Tax Replacement Income Tax shall be in addition to the income
7tax imposed by subsections (a) and (b) of this Section and in
8addition to all other occupation or privilege taxes imposed by
9this State or by any municipal corporation or political
10subdivision thereof.
11    (d) Additional Personal Property Tax Replacement Income
12Tax Rates. The personal property tax replacement income tax
13imposed by this subsection and subsection (c) of this Section
14in the case of a corporation, other than a Subchapter S
15corporation and except as adjusted by subsection (d-1), shall
16be an additional amount equal to 2.85% of such taxpayer's net
17income for the taxable year, except that beginning on January
181, 1981, and thereafter, the rate of 2.85% specified in this
19subsection shall be reduced to 2.5%, and in the case of a
20partnership, trust or a Subchapter S corporation shall be an
21additional amount equal to 1.5% of such taxpayer's net income
22for the taxable year.
23    (d-1) Rate reduction for certain foreign insurers. In the
24case of a foreign insurer, as defined by Section 35A-5 of the
25Illinois Insurance Code, whose state or country of domicile
26imposes on insurers domiciled in Illinois a retaliatory tax

 

 

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1(excluding any insurer whose premiums from reinsurance assumed
2are 50% or more of its total insurance premiums as determined
3under paragraph (2) of subsection (b) of Section 304, except
4that for purposes of this determination premiums from
5reinsurance do not include premiums from inter-affiliate
6reinsurance arrangements), beginning with taxable years ending
7on or after December 31, 1999, the sum of the rates of tax
8imposed by subsections (b) and (d) shall be reduced (but not
9increased) to the rate at which the total amount of tax imposed
10under this Act, net of all credits allowed under this Act,
11shall equal (i) the total amount of tax that would be imposed
12on the foreign insurer's net income allocable to Illinois for
13the taxable year by such foreign insurer's state or country of
14domicile if that net income were subject to all income taxes
15and taxes measured by net income imposed by such foreign
16insurer's state or country of domicile, net of all credits
17allowed or (ii) a rate of zero if no such tax is imposed on such
18income by the foreign insurer's state of domicile. For the
19purposes of this subsection (d-1), an inter-affiliate includes
20a mutual insurer under common management.
21        (1) For the purposes of subsection (d-1), in no event
22    shall the sum of the rates of tax imposed by subsections
23    (b) and (d) be reduced below the rate at which the sum of:
24            (A) the total amount of tax imposed on such foreign
25        insurer under this Act for a taxable year, net of all
26        credits allowed under this Act, plus

 

 

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1            (B) the privilege tax imposed by Section 409 of the
2        Illinois Insurance Code, the fire insurance company
3        tax imposed by Section 12 of the Fire Investigation
4        Act, and the fire department taxes imposed under
5        Section 11-10-1 of the Illinois Municipal Code,
6    equals 1.25% for taxable years ending prior to December 31,
7    2003, or 1.75% for taxable years ending on or after
8    December 31, 2003, of the net taxable premiums written for
9    the taxable year, as described by subsection (1) of Section
10    409 of the Illinois Insurance Code. This paragraph will in
11    no event increase the rates imposed under subsections (b)
12    and (d).
13        (2) Any reduction in the rates of tax imposed by this
14    subsection shall be applied first against the rates imposed
15    by subsection (b) and only after the tax imposed by
16    subsection (a) net of all credits allowed under this
17    Section other than the credit allowed under subsection (i)
18    has been reduced to zero, against the rates imposed by
19    subsection (d).
20    This subsection (d-1) is exempt from the provisions of
21Section 250.
22    (e) Investment credit. A taxpayer shall be allowed a credit
23against the Personal Property Tax Replacement Income Tax for
24investment in qualified property.
25        (1) A taxpayer shall be allowed a credit equal to .5%
26    of the basis of qualified property placed in service during

 

 

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1    the taxable year, provided such property is placed in
2    service on or after July 1, 1984. There shall be allowed an
3    additional credit equal to .5% of the basis of qualified
4    property placed in service during the taxable year,
5    provided such property is placed in service on or after
6    July 1, 1986, and the taxpayer's base employment within
7    Illinois has increased by 1% or more over the preceding
8    year as determined by the taxpayer's employment records
9    filed with the Illinois Department of Employment Security.
10    Taxpayers who are new to Illinois shall be deemed to have
11    met the 1% growth in base employment for the first year in
12    which they file employment records with the Illinois
13    Department of Employment Security. The provisions added to
14    this Section by Public Act 85-1200 (and restored by Public
15    Act 87-895) shall be construed as declaratory of existing
16    law and not as a new enactment. If, in any year, the
17    increase in base employment within Illinois over the
18    preceding year is less than 1%, the additional credit shall
19    be limited to that percentage times a fraction, the
20    numerator of which is .5% and the denominator of which is
21    1%, but shall not exceed .5%. The investment credit shall
22    not be allowed to the extent that it would reduce a
23    taxpayer's liability in any tax year below zero, nor may
24    any credit for qualified property be allowed for any year
25    other than the year in which the property was placed in
26    service in Illinois. For tax years ending on or after

 

 

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1    December 31, 1987, and on or before December 31, 1988, the
2    credit shall be allowed for the tax year in which the
3    property is placed in service, or, if the amount of the
4    credit exceeds the tax liability for that year, whether it
5    exceeds the original liability or the liability as later
6    amended, such excess may be carried forward and applied to
7    the tax liability of the 5 taxable years following the
8    excess credit years if the taxpayer (i) makes investments
9    which cause the creation of a minimum of 2,000 full-time
10    equivalent jobs in Illinois, (ii) is located in an
11    enterprise zone established pursuant to the Illinois
12    Enterprise Zone Act and (iii) is certified by the
13    Department of Commerce and Community Affairs (now
14    Department of Commerce and Economic Opportunity) as
15    complying with the requirements specified in clause (i) and
16    (ii) by July 1, 1986. The Department of Commerce and
17    Community Affairs (now Department of Commerce and Economic
18    Opportunity) shall notify the Department of Revenue of all
19    such certifications immediately. For tax years ending
20    after December 31, 1988, the credit shall be allowed for
21    the tax year in which the property is placed in service,
22    or, if the amount of the credit exceeds the tax liability
23    for that year, whether it exceeds the original liability or
24    the liability as later amended, such excess may be carried
25    forward and applied to the tax liability of the 5 taxable
26    years following the excess credit years. The credit shall

 

 

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1    be applied to the earliest year for which there is a
2    liability. If there is credit from more than one tax year
3    that is available to offset a liability, earlier credit
4    shall be applied first.
5        (2) The term "qualified property" means property
6    which:
7            (A) is tangible, whether new or used, including
8        buildings and structural components of buildings and
9        signs that are real property, but not including land or
10        improvements to real property that are not a structural
11        component of a building such as landscaping, sewer
12        lines, local access roads, fencing, parking lots, and
13        other appurtenances;
14            (B) is depreciable pursuant to Section 167 of the
15        Internal Revenue Code, except that "3-year property"
16        as defined in Section 168(c)(2)(A) of that Code is not
17        eligible for the credit provided by this subsection
18        (e);
19            (C) is acquired by purchase as defined in Section
20        179(d) of the Internal Revenue Code;
21            (D) is used in Illinois by a taxpayer who is
22        primarily engaged in manufacturing, or in mining coal
23        or fluorite, or in retailing, or was placed in service
24        on or after July 1, 2006 in a River Edge Redevelopment
25        Zone established pursuant to the River Edge
26        Redevelopment Zone Act; and

 

 

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1            (E) has not previously been used in Illinois in
2        such a manner and by such a person as would qualify for
3        the credit provided by this subsection (e) or
4        subsection (f).
5        (3) For purposes of this subsection (e),
6    "manufacturing" means the material staging and production
7    of tangible personal property by procedures commonly
8    regarded as manufacturing, processing, fabrication, or
9    assembling which changes some existing material into new
10    shapes, new qualities, or new combinations. For purposes of
11    this subsection (e) the term "mining" shall have the same
12    meaning as the term "mining" in Section 613(c) of the
13    Internal Revenue Code. For purposes of this subsection (e),
14    the term "retailing" means the sale of tangible personal
15    property for use or consumption and not for resale, or
16    services rendered in conjunction with the sale of tangible
17    personal property for use or consumption and not for
18    resale. For purposes of this subsection (e), "tangible
19    personal property" has the same meaning as when that term
20    is used in the Retailers' Occupation Tax Act, and, for
21    taxable years ending after December 31, 2008, does not
22    include the generation, transmission, or distribution of
23    electricity.
24        (4) The basis of qualified property shall be the basis
25    used to compute the depreciation deduction for federal
26    income tax purposes.

 

 

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1        (5) If the basis of the property for federal income tax
2    depreciation purposes is increased after it has been placed
3    in service in Illinois by the taxpayer, the amount of such
4    increase shall be deemed property placed in service on the
5    date of such increase in basis.
6        (6) The term "placed in service" shall have the same
7    meaning as under Section 46 of the Internal Revenue Code.
8        (7) If during any taxable year, any property ceases to
9    be qualified property in the hands of the taxpayer within
10    48 months after being placed in service, or the situs of
11    any qualified property is moved outside Illinois within 48
12    months after being placed in service, the Personal Property
13    Tax Replacement Income Tax for such taxable year shall be
14    increased. Such increase shall be determined by (i)
15    recomputing the investment credit which would have been
16    allowed for the year in which credit for such property was
17    originally allowed by eliminating such property from such
18    computation and, (ii) subtracting such recomputed credit
19    from the amount of credit previously allowed. For the
20    purposes of this paragraph (7), a reduction of the basis of
21    qualified property resulting from a redetermination of the
22    purchase price shall be deemed a disposition of qualified
23    property to the extent of such reduction.
24        (8) Unless the investment credit is extended by law,
25    the basis of qualified property shall not include costs
26    incurred after December 31, 2018, except for costs incurred

 

 

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1    pursuant to a binding contract entered into on or before
2    December 31, 2018.
3        (9) Each taxable year ending before December 31, 2000,
4    a partnership may elect to pass through to its partners the
5    credits to which the partnership is entitled under this
6    subsection (e) for the taxable year. A partner may use the
7    credit allocated to him or her under this paragraph only
8    against the tax imposed in subsections (c) and (d) of this
9    Section. If the partnership makes that election, those
10    credits shall be allocated among the partners in the
11    partnership in accordance with the rules set forth in
12    Section 704(b) of the Internal Revenue Code, and the rules
13    promulgated under that Section, and the allocated amount of
14    the credits shall be allowed to the partners for that
15    taxable year. The partnership shall make this election on
16    its Personal Property Tax Replacement Income Tax return for
17    that taxable year. The election to pass through the credits
18    shall be irrevocable.
19        For taxable years ending on or after December 31, 2000,
20    a partner that qualifies its partnership for a subtraction
21    under subparagraph (I) of paragraph (2) of subsection (d)
22    of Section 203 or a shareholder that qualifies a Subchapter
23    S corporation for a subtraction under subparagraph (S) of
24    paragraph (2) of subsection (b) of Section 203 shall be
25    allowed a credit under this subsection (e) equal to its
26    share of the credit earned under this subsection (e) during

 

 

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1    the taxable year by the partnership or Subchapter S
2    corporation, determined in accordance with the
3    determination of income and distributive share of income
4    under Sections 702 and 704 and Subchapter S of the Internal
5    Revenue Code. This paragraph is exempt from the provisions
6    of Section 250.
7    (f) Investment credit; Enterprise Zone; River Edge
8Redevelopment Zone.
9        (1) A taxpayer shall be allowed a credit against the
10    tax imposed by subsections (a) and (b) of this Section for
11    investment in qualified property which is placed in service
12    in an Enterprise Zone created pursuant to the Illinois
13    Enterprise Zone Act or, for property placed in service on
14    or after July 1, 2006, a River Edge Redevelopment Zone
15    established pursuant to the River Edge Redevelopment Zone
16    Act. For partners, shareholders of Subchapter S
17    corporations, and owners of limited liability companies,
18    if the liability company is treated as a partnership for
19    purposes of federal and State income taxation, there shall
20    be allowed a credit under this subsection (f) to be
21    determined in accordance with the determination of income
22    and distributive share of income under Sections 702 and 704
23    and Subchapter S of the Internal Revenue Code. The credit
24    shall be .5% of the basis for such property. The credit
25    shall be available only in the taxable year in which the
26    property is placed in service in the Enterprise Zone or

 

 

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1    River Edge Redevelopment Zone and shall not be allowed to
2    the extent that it would reduce a taxpayer's liability for
3    the tax imposed by subsections (a) and (b) of this Section
4    to below zero. For tax years ending on or after December
5    31, 1985, the credit shall be allowed for the tax year in
6    which the property is placed in service, or, if the amount
7    of the credit exceeds the tax liability for that year,
8    whether it exceeds the original liability or the liability
9    as later amended, such excess may be carried forward and
10    applied to the tax liability of the 5 taxable years
11    following the excess credit year. The credit shall be
12    applied to the earliest year for which there is a
13    liability. If there is credit from more than one tax year
14    that is available to offset a liability, the credit
15    accruing first in time shall be applied first.
16        (2) The term qualified property means property which:
17            (A) is tangible, whether new or used, including
18        buildings and structural components of buildings;
19            (B) is depreciable pursuant to Section 167 of the
20        Internal Revenue Code, except that "3-year property"
21        as defined in Section 168(c)(2)(A) of that Code is not
22        eligible for the credit provided by this subsection
23        (f);
24            (C) is acquired by purchase as defined in Section
25        179(d) of the Internal Revenue Code;
26            (D) is used in the Enterprise Zone or River Edge

 

 

HB0319- 17 -LRB101 04004 HLH 49012 b

1        Redevelopment Zone by the taxpayer; and
2            (E) has not been previously used in Illinois in
3        such a manner and by such a person as would qualify for
4        the credit provided by this subsection (f) or
5        subsection (e).
6        (3) The basis of qualified property shall be the basis
7    used to compute the depreciation deduction for federal
8    income tax purposes.
9        (4) If the basis of the property for federal income tax
10    depreciation purposes is increased after it has been placed
11    in service in the Enterprise Zone or River Edge
12    Redevelopment Zone by the taxpayer, the amount of such
13    increase shall be deemed property placed in service on the
14    date of such increase in basis.
15        (5) The term "placed in service" shall have the same
16    meaning as under Section 46 of the Internal Revenue Code.
17        (6) If during any taxable year, any property ceases to
18    be qualified property in the hands of the taxpayer within
19    48 months after being placed in service, or the situs of
20    any qualified property is moved outside the Enterprise Zone
21    or River Edge Redevelopment Zone within 48 months after
22    being placed in service, the tax imposed under subsections
23    (a) and (b) of this Section for such taxable year shall be
24    increased. Such increase shall be determined by (i)
25    recomputing the investment credit which would have been
26    allowed for the year in which credit for such property was

 

 

HB0319- 18 -LRB101 04004 HLH 49012 b

1    originally allowed by eliminating such property from such
2    computation, and (ii) subtracting such recomputed credit
3    from the amount of credit previously allowed. For the
4    purposes of this paragraph (6), a reduction of the basis of
5    qualified property resulting from a redetermination of the
6    purchase price shall be deemed a disposition of qualified
7    property to the extent of such reduction.
8        (7) There shall be allowed an additional credit equal
9    to 0.5% of the basis of qualified property placed in
10    service during the taxable year in a River Edge
11    Redevelopment Zone, provided such property is placed in
12    service on or after July 1, 2006, and the taxpayer's base
13    employment within Illinois has increased by 1% or more over
14    the preceding year as determined by the taxpayer's
15    employment records filed with the Illinois Department of
16    Employment Security. Taxpayers who are new to Illinois
17    shall be deemed to have met the 1% growth in base
18    employment for the first year in which they file employment
19    records with the Illinois Department of Employment
20    Security. If, in any year, the increase in base employment
21    within Illinois over the preceding year is less than 1%,
22    the additional credit shall be limited to that percentage
23    times a fraction, the numerator of which is 0.5% and the
24    denominator of which is 1%, but shall not exceed 0.5%.
25    (g) (Blank).
26    (h) Investment credit; High Impact Business.

 

 

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1        (1) Subject to subsections (b) and (b-5) of Section 5.5
2    of the Illinois Enterprise Zone Act, a taxpayer shall be
3    allowed a credit against the tax imposed by subsections (a)
4    and (b) of this Section for investment in qualified
5    property which is placed in service by a Department of
6    Commerce and Economic Opportunity designated High Impact
7    Business. The credit shall be .5% of the basis for such
8    property. The credit shall not be available (i) until the
9    minimum investments in qualified property set forth in
10    subdivision (a)(3)(A) of Section 5.5 of the Illinois
11    Enterprise Zone Act have been satisfied or (ii) until the
12    time authorized in subsection (b-5) of the Illinois
13    Enterprise Zone Act for entities designated as High Impact
14    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
15    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
16    Act, and shall not be allowed to the extent that it would
17    reduce a taxpayer's liability for the tax imposed by
18    subsections (a) and (b) of this Section to below zero. The
19    credit applicable to such investments shall be taken in the
20    taxable year in which such investments have been completed.
21    The credit for additional investments beyond the minimum
22    investment by a designated high impact business authorized
23    under subdivision (a)(3)(A) of Section 5.5 of the Illinois
24    Enterprise Zone Act shall be available only in the taxable
25    year in which the property is placed in service and shall
26    not be allowed to the extent that it would reduce a

 

 

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1    taxpayer's liability for the tax imposed by subsections (a)
2    and (b) of this Section to below zero. For tax years ending
3    on or after December 31, 1987, the credit shall be allowed
4    for the tax year in which the property is placed in
5    service, or, if the amount of the credit exceeds the tax
6    liability for that year, whether it exceeds the original
7    liability or the liability as later amended, such excess
8    may be carried forward and applied to the tax liability of
9    the 5 taxable years following the excess credit year. The
10    credit shall be applied to the earliest year for which
11    there is a liability. If there is credit from more than one
12    tax year that is available to offset a liability, the
13    credit accruing first in time shall be applied first.
14        Changes made in this subdivision (h)(1) by Public Act
15    88-670 restore changes made by Public Act 85-1182 and
16    reflect existing law.
17        (2) The term qualified property means property which:
18            (A) is tangible, whether new or used, including
19        buildings and structural components of buildings;
20            (B) is depreciable pursuant to Section 167 of the
21        Internal Revenue Code, except that "3-year property"
22        as defined in Section 168(c)(2)(A) of that Code is not
23        eligible for the credit provided by this subsection
24        (h);
25            (C) is acquired by purchase as defined in Section
26        179(d) of the Internal Revenue Code; and

 

 

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1            (D) is not eligible for the Enterprise Zone
2        Investment Credit provided by subsection (f) of this
3        Section.
4        (3) The basis of qualified property shall be the basis
5    used to compute the depreciation deduction for federal
6    income tax purposes.
7        (4) If the basis of the property for federal income tax
8    depreciation purposes is increased after it has been placed
9    in service in a federally designated Foreign Trade Zone or
10    Sub-Zone located in Illinois by the taxpayer, the amount of
11    such increase shall be deemed property placed in service on
12    the date of such increase in basis.
13        (5) The term "placed in service" shall have the same
14    meaning as under Section 46 of the Internal Revenue Code.
15        (6) If during any taxable year ending on or before
16    December 31, 1996, any property ceases to be qualified
17    property in the hands of the taxpayer within 48 months
18    after being placed in service, or the situs of any
19    qualified property is moved outside Illinois within 48
20    months after being placed in service, the tax imposed under
21    subsections (a) and (b) of this Section for such taxable
22    year shall be increased. Such increase shall be determined
23    by (i) recomputing the investment credit which would have
24    been allowed for the year in which credit for such property
25    was originally allowed by eliminating such property from
26    such computation, and (ii) subtracting such recomputed

 

 

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1    credit from the amount of credit previously allowed. For
2    the purposes of this paragraph (6), a reduction of the
3    basis of qualified property resulting from a
4    redetermination of the purchase price shall be deemed a
5    disposition of qualified property to the extent of such
6    reduction.
7        (7) Beginning with tax years ending after December 31,
8    1996, if a taxpayer qualifies for the credit under this
9    subsection (h) and thereby is granted a tax abatement and
10    the taxpayer relocates its entire facility in violation of
11    the explicit terms and length of the contract under Section
12    18-183 of the Property Tax Code, the tax imposed under
13    subsections (a) and (b) of this Section shall be increased
14    for the taxable year in which the taxpayer relocated its
15    facility by an amount equal to the amount of credit
16    received by the taxpayer under this subsection (h).
17    (i) Credit for Personal Property Tax Replacement Income
18Tax. For tax years ending prior to December 31, 2003, a credit
19shall be allowed against the tax imposed by subsections (a) and
20(b) of this Section for the tax imposed by subsections (c) and
21(d) of this Section. This credit shall be computed by
22multiplying the tax imposed by subsections (c) and (d) of this
23Section by a fraction, the numerator of which is base income
24allocable to Illinois and the denominator of which is Illinois
25base income, and further multiplying the product by the tax
26rate imposed by subsections (a) and (b) of this Section.

 

 

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1    Any credit earned on or after December 31, 1986 under this
2subsection which is unused in the year the credit is computed
3because it exceeds the tax liability imposed by subsections (a)
4and (b) for that year (whether it exceeds the original
5liability or the liability as later amended) may be carried
6forward and applied to the tax liability imposed by subsections
7(a) and (b) of the 5 taxable years following the excess credit
8year, provided that no credit may be carried forward to any
9year ending on or after December 31, 2003. This credit shall be
10applied first to the earliest year for which there is a
11liability. If there is a credit under this subsection from more
12than one tax year that is available to offset a liability the
13earliest credit arising under this subsection shall be applied
14first.
15    If, during any taxable year ending on or after December 31,
161986, the tax imposed by subsections (c) and (d) of this
17Section for which a taxpayer has claimed a credit under this
18subsection (i) is reduced, the amount of credit for such tax
19shall also be reduced. Such reduction shall be determined by
20recomputing the credit to take into account the reduced tax
21imposed by subsections (c) and (d). If any portion of the
22reduced amount of credit has been carried to a different
23taxable year, an amended return shall be filed for such taxable
24year to reduce the amount of credit claimed.
25    (j) Training expense credit. Beginning with tax years
26ending on or after December 31, 1986 and prior to December 31,

 

 

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12003, a taxpayer shall be allowed a credit against the tax
2imposed by subsections (a) and (b) under this Section for all
3amounts paid or accrued, on behalf of all persons employed by
4the taxpayer in Illinois or Illinois residents employed outside
5of Illinois by a taxpayer, for educational or vocational
6training in semi-technical or technical fields or semi-skilled
7or skilled fields, which were deducted from gross income in the
8computation of taxable income. The credit against the tax
9imposed by subsections (a) and (b) shall be 1.6% of such
10training expenses. For partners, shareholders of subchapter S
11corporations, and owners of limited liability companies, if the
12liability company is treated as a partnership for purposes of
13federal and State income taxation, there shall be allowed a
14credit under this subsection (j) to be determined in accordance
15with the determination of income and distributive share of
16income under Sections 702 and 704 and subchapter S of the
17Internal Revenue Code.
18    Any credit allowed under this subsection which is unused in
19the year the credit is earned may be carried forward to each of
20the 5 taxable years following the year for which the credit is
21first computed until it is used. This credit shall be applied
22first to the earliest year for which there is a liability. If
23there is a credit under this subsection from more than one tax
24year that is available to offset a liability the earliest
25credit arising under this subsection shall be applied first. No
26carryforward credit may be claimed in any tax year ending on or

 

 

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1after December 31, 2003.
2    (k) Research and development credit. For tax years ending
3after July 1, 1990 and prior to December 31, 2003, and
4beginning again for tax years ending on or after December 31,
52004, and ending prior to January 1, 2022, a taxpayer shall be
6allowed a credit against the tax imposed by subsections (a) and
7(b) of this Section for increasing research activities in this
8State. The credit allowed against the tax imposed by
9subsections (a) and (b) shall be equal to 6 1/2% of the
10qualifying expenditures for increasing research activities in
11this State. For partners, shareholders of subchapter S
12corporations, and owners of limited liability companies, if the
13liability company is treated as a partnership for purposes of
14federal and State income taxation, there shall be allowed a
15credit under this subsection to be determined in accordance
16with the determination of income and distributive share of
17income under Sections 702 and 704 and subchapter S of the
18Internal Revenue Code.
19    For purposes of this subsection, "qualifying expenditures"
20means the qualifying expenditures as defined for the federal
21credit for increasing research activities which would be
22allowable under Section 41 of the Internal Revenue Code and
23which are conducted in this State, "qualifying expenditures for
24increasing research activities in this State" means the excess
25of qualifying expenditures for the taxable year in which
26incurred over qualifying expenditures for the base period,

 

 

HB0319- 26 -LRB101 04004 HLH 49012 b

1"qualifying expenditures for the base period" means the average
2of the qualifying expenditures for each year in the base
3period, and "base period" means the 3 taxable years immediately
4preceding the taxable year for which the determination is being
5made.
6    Any credit in excess of the tax liability for the taxable
7year may be carried forward. A taxpayer may elect to have the
8unused credit shown on its final completed return carried over
9as a credit against the tax liability for the following 5
10taxable years or until it has been fully used, whichever occurs
11first; provided that no credit earned in a tax year ending
12prior to December 31, 2003 may be carried forward to any year
13ending on or after December 31, 2003.
14    If an unused credit is carried forward to a given year from
152 or more earlier years, that credit arising in the earliest
16year will be applied first against the tax liability for the
17given year. If a tax liability for the given year still
18remains, the credit from the next earliest year will then be
19applied, and so on, until all credits have been used or no tax
20liability for the given year remains. Any remaining unused
21credit or credits then will be carried forward to the next
22following year in which a tax liability is incurred, except
23that no credit can be carried forward to a year which is more
24than 5 years after the year in which the expense for which the
25credit is given was incurred.
26    No inference shall be drawn from this amendatory Act of the

 

 

HB0319- 27 -LRB101 04004 HLH 49012 b

191st General Assembly in construing this Section for taxable
2years beginning before January 1, 1999.
3    It is the intent of the General Assembly that the research
4and development credit under this subsection (k) shall apply
5continuously for all tax years ending on or after December 31,
62004 and ending prior to January 1, 2022, including, but not
7limited to, the period beginning on January 1, 2016 and ending
8on the effective date of this amendatory Act of the 100th
9General Assembly. All actions taken in reliance on the
10continuation of the credit under this subsection (k) by any
11taxpayer are hereby validated.
12    (l) Environmental Remediation Tax Credit.
13        (i) For tax years ending after December 31, 1997 and on
14    or before December 31, 2001, a taxpayer shall be allowed a
15    credit against the tax imposed by subsections (a) and (b)
16    of this Section for certain amounts paid for unreimbursed
17    eligible remediation costs, as specified in this
18    subsection. For purposes of this Section, "unreimbursed
19    eligible remediation costs" means costs approved by the
20    Illinois Environmental Protection Agency ("Agency") under
21    Section 58.14 of the Environmental Protection Act that were
22    paid in performing environmental remediation at a site for
23    which a No Further Remediation Letter was issued by the
24    Agency and recorded under Section 58.10 of the
25    Environmental Protection Act. The credit must be claimed
26    for the taxable year in which Agency approval of the

 

 

HB0319- 28 -LRB101 04004 HLH 49012 b

1    eligible remediation costs is granted. The credit is not
2    available to any taxpayer if the taxpayer or any related
3    party caused or contributed to, in any material respect, a
4    release of regulated substances on, in, or under the site
5    that was identified and addressed by the remedial action
6    pursuant to the Site Remediation Program of the
7    Environmental Protection Act. After the Pollution Control
8    Board rules are adopted pursuant to the Illinois
9    Administrative Procedure Act for the administration and
10    enforcement of Section 58.9 of the Environmental
11    Protection Act, determinations as to credit availability
12    for purposes of this Section shall be made consistent with
13    those rules. For purposes of this Section, "taxpayer"
14    includes a person whose tax attributes the taxpayer has
15    succeeded to under Section 381 of the Internal Revenue Code
16    and "related party" includes the persons disallowed a
17    deduction for losses by paragraphs (b), (c), and (f)(1) of
18    Section 267 of the Internal Revenue Code by virtue of being
19    a related taxpayer, as well as any of its partners. The
20    credit allowed against the tax imposed by subsections (a)
21    and (b) shall be equal to 25% of the unreimbursed eligible
22    remediation costs in excess of $100,000 per site, except
23    that the $100,000 threshold shall not apply to any site
24    contained in an enterprise zone as determined by the
25    Department of Commerce and Community Affairs (now
26    Department of Commerce and Economic Opportunity). The

 

 

HB0319- 29 -LRB101 04004 HLH 49012 b

1    total credit allowed shall not exceed $40,000 per year with
2    a maximum total of $150,000 per site. For partners and
3    shareholders of subchapter S corporations, there shall be
4    allowed a credit under this subsection to be determined in
5    accordance with the determination of income and
6    distributive share of income under Sections 702 and 704 and
7    subchapter S of the Internal Revenue Code.
8        (ii) A credit allowed under this subsection that is
9    unused in the year the credit is earned may be carried
10    forward to each of the 5 taxable years following the year
11    for which the credit is first earned until it is used. The
12    term "unused credit" does not include any amounts of
13    unreimbursed eligible remediation costs in excess of the
14    maximum credit per site authorized under paragraph (i).
15    This credit shall be applied first to the earliest year for
16    which there is a liability. If there is a credit under this
17    subsection from more than one tax year that is available to
18    offset a liability, the earliest credit arising under this
19    subsection shall be applied first. A credit allowed under
20    this subsection may be sold to a buyer as part of a sale of
21    all or part of the remediation site for which the credit
22    was granted. The purchaser of a remediation site and the
23    tax credit shall succeed to the unused credit and remaining
24    carry-forward period of the seller. To perfect the
25    transfer, the assignor shall record the transfer in the
26    chain of title for the site and provide written notice to

 

 

HB0319- 30 -LRB101 04004 HLH 49012 b

1    the Director of the Illinois Department of Revenue of the
2    assignor's intent to sell the remediation site and the
3    amount of the tax credit to be transferred as a portion of
4    the sale. In no event may a credit be transferred to any
5    taxpayer if the taxpayer or a related party would not be
6    eligible under the provisions of subsection (i).
7        (iii) For purposes of this Section, the term "site"
8    shall have the same meaning as under Section 58.2 of the
9    Environmental Protection Act.
10    (m) Education expense credit. Beginning with tax years
11ending after December 31, 1999, a taxpayer who is the custodian
12of one or more qualifying pupils shall be allowed a credit
13against the tax imposed by subsections (a) and (b) of this
14Section for qualified education expenses incurred on behalf of
15the qualifying pupils. The credit shall be equal to 25% of
16qualified education expenses, but in no event may the total
17credit under this subsection claimed by a family that is the
18custodian of qualifying pupils exceed (i) $500 for tax years
19ending prior to December 31, 2017, and (ii) $750 for tax years
20ending on or after December 31, 2017. In no event shall a
21credit under this subsection reduce the taxpayer's liability
22under this Act to less than zero. Notwithstanding any other
23provision of law, for taxable years beginning on or after
24January 1, 2017, no taxpayer may claim a credit under this
25subsection (m) if the taxpayer's adjusted gross income for the
26taxable year exceeds (i) $500,000, in the case of spouses

 

 

HB0319- 31 -LRB101 04004 HLH 49012 b

1filing a joint federal tax return or (ii) $250,000, in the case
2of all other taxpayers. This subsection is exempt from the
3provisions of Section 250 of this Act.
4    For purposes of this subsection:
5    "Qualifying pupils" means individuals who (i) are
6residents of the State of Illinois, (ii) are under the age of
721 at the close of the school year for which a credit is
8sought, and (iii) during the school year for which a credit is
9sought were full-time pupils enrolled in a kindergarten through
10twelfth grade education program at any school, as defined in
11this subsection.
12    "Qualified education expense" means the amount incurred on
13behalf of a qualifying pupil in excess of $250 for tuition,
14book fees, and lab fees at the school in which the pupil is
15enrolled during the regular school year.
16    "School" means any public or nonpublic elementary or
17secondary school in Illinois that is in compliance with Title
18VI of the Civil Rights Act of 1964 and attendance at which
19satisfies the requirements of Section 26-1 of the School Code,
20except that nothing shall be construed to require a child to
21attend any particular public or nonpublic school to qualify for
22the credit under this Section.
23    "Custodian" means, with respect to qualifying pupils, an
24Illinois resident who is a parent, the parents, a legal
25guardian, or the legal guardians of the qualifying pupils.
26    (n) River Edge Redevelopment Zone site remediation tax

 

 

HB0319- 32 -LRB101 04004 HLH 49012 b

1credit.
2        (i) For tax years ending on or after December 31, 2006,
3    a taxpayer shall be allowed a credit against the tax
4    imposed by subsections (a) and (b) of this Section for
5    certain amounts paid for unreimbursed eligible remediation
6    costs, as specified in this subsection. For purposes of
7    this Section, "unreimbursed eligible remediation costs"
8    means costs approved by the Illinois Environmental
9    Protection Agency ("Agency") under Section 58.14a of the
10    Environmental Protection Act that were paid in performing
11    environmental remediation at a site within a River Edge
12    Redevelopment Zone for which a No Further Remediation
13    Letter was issued by the Agency and recorded under Section
14    58.10 of the Environmental Protection Act. The credit must
15    be claimed for the taxable year in which Agency approval of
16    the eligible remediation costs is granted. The credit is
17    not available to any taxpayer if the taxpayer or any
18    related party caused or contributed to, in any material
19    respect, a release of regulated substances on, in, or under
20    the site that was identified and addressed by the remedial
21    action pursuant to the Site Remediation Program of the
22    Environmental Protection Act. Determinations as to credit
23    availability for purposes of this Section shall be made
24    consistent with rules adopted by the Pollution Control
25    Board pursuant to the Illinois Administrative Procedure
26    Act for the administration and enforcement of Section 58.9

 

 

HB0319- 33 -LRB101 04004 HLH 49012 b

1    of the Environmental Protection Act. For purposes of this
2    Section, "taxpayer" includes a person whose tax attributes
3    the taxpayer has succeeded to under Section 381 of the
4    Internal Revenue Code and "related party" includes the
5    persons disallowed a deduction for losses by paragraphs
6    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
7    Code by virtue of being a related taxpayer, as well as any
8    of its partners. The credit allowed against the tax imposed
9    by subsections (a) and (b) shall be equal to 25% of the
10    unreimbursed eligible remediation costs in excess of
11    $100,000 per site.
12        (ii) A credit allowed under this subsection that is
13    unused in the year the credit is earned may be carried
14    forward to each of the 5 taxable years following the year
15    for which the credit is first earned until it is used. This
16    credit shall be applied first to the earliest year for
17    which there is a liability. If there is a credit under this
18    subsection from more than one tax year that is available to
19    offset a liability, the earliest credit arising under this
20    subsection shall be applied first. A credit allowed under
21    this subsection may be sold to a buyer as part of a sale of
22    all or part of the remediation site for which the credit
23    was granted. The purchaser of a remediation site and the
24    tax credit shall succeed to the unused credit and remaining
25    carry-forward period of the seller. To perfect the
26    transfer, the assignor shall record the transfer in the

 

 

HB0319- 34 -LRB101 04004 HLH 49012 b

1    chain of title for the site and provide written notice to
2    the Director of the Illinois Department of Revenue of the
3    assignor's intent to sell the remediation site and the
4    amount of the tax credit to be transferred as a portion of
5    the sale. In no event may a credit be transferred to any
6    taxpayer if the taxpayer or a related party would not be
7    eligible under the provisions of subsection (i).
8        (iii) For purposes of this Section, the term "site"
9    shall have the same meaning as under Section 58.2 of the
10    Environmental Protection Act.
11    (o) For each of taxable years during the Compassionate Use
12of Medical Cannabis Pilot Program, a surcharge is imposed on
13all taxpayers on income arising from the sale or exchange of
14capital assets, depreciable business property, real property
15used in the trade or business, and Section 197 intangibles of
16an organization registrant under the Compassionate Use of
17Medical Cannabis Pilot Program Act. The amount of the surcharge
18is equal to the amount of federal income tax liability for the
19taxable year attributable to those sales and exchanges. The
20surcharge imposed does not apply if:
21        (1) the medical cannabis cultivation center
22    registration, medical cannabis dispensary registration, or
23    the property of a registration is transferred as a result
24    of any of the following:
25            (A) bankruptcy, a receivership, or a debt
26        adjustment initiated by or against the initial

 

 

HB0319- 35 -LRB101 04004 HLH 49012 b

1        registration or the substantial owners of the initial
2        registration;
3            (B) cancellation, revocation, or termination of
4        any registration by the Illinois Department of Public
5        Health;
6            (C) a determination by the Illinois Department of
7        Public Health that transfer of the registration is in
8        the best interests of Illinois qualifying patients as
9        defined by the Compassionate Use of Medical Cannabis
10        Pilot Program Act;
11            (D) the death of an owner of the equity interest in
12        a registrant;
13            (E) the acquisition of a controlling interest in
14        the stock or substantially all of the assets of a
15        publicly traded company;
16            (F) a transfer by a parent company to a wholly
17        owned subsidiary; or
18            (G) the transfer or sale to or by one person to
19        another person where both persons were initial owners
20        of the registration when the registration was issued;
21        or
22        (2) the cannabis cultivation center registration,
23    medical cannabis dispensary registration, or the
24    controlling interest in a registrant's property is
25    transferred in a transaction to lineal descendants in which
26    no gain or loss is recognized or as a result of a

 

 

HB0319- 36 -LRB101 04004 HLH 49012 b

1    transaction in accordance with Section 351 of the Internal
2    Revenue Code in which no gain or loss is recognized.
3(Source: P.A. 100-22, eff. 7-6-17.)
 
4    (35 ILCS 5/901)  (from Ch. 120, par. 9-901)
5    Sec. 901. Collection authority.
6    (a) In general. The Department shall collect the taxes
7imposed by this Act. The Department shall collect certified
8past due child support amounts under Section 2505-650 of the
9Department of Revenue Law of the Civil Administrative Code of
10Illinois. Except as provided in subsections (b), (c), (e), (f),
11(g), and (h) of this Section, money collected pursuant to
12subsections (a) and (b) of Section 201 of this Act shall be
13paid into the General Revenue Fund in the State treasury; money
14collected pursuant to subsections (c) and (d) of Section 201 of
15this Act shall be paid into the Personal Property Tax
16Replacement Fund, a special fund in the State Treasury; and
17money collected under Section 2505-650 of the Department of
18Revenue Law of the Civil Administrative Code of Illinois shall
19be paid into the Child Support Enforcement Trust Fund, a
20special fund outside the State Treasury, or to the State
21Disbursement Unit established under Section 10-26 of the
22Illinois Public Aid Code, as directed by the Department of
23Healthcare and Family Services.
24    (b) Local Government Distributive Fund. Beginning August
251, 1969, and continuing through June 30, 1994, the Treasurer

 

 

HB0319- 37 -LRB101 04004 HLH 49012 b

1shall transfer each month from the General Revenue Fund to a
2special fund in the State treasury, to be known as the "Local
3Government Distributive Fund", an amount equal to 1/12 of the
4net revenue realized from the tax imposed by subsections (a)
5and (b) of Section 201 of this Act during the preceding month.
6Beginning July 1, 1994, and continuing through June 30, 1995,
7the Treasurer shall transfer each month from the General
8Revenue Fund to the Local Government Distributive Fund an
9amount equal to 1/11 of the net revenue realized from the tax
10imposed by subsections (a) and (b) of Section 201 of this Act
11during the preceding month. Beginning July 1, 1995 and
12continuing through January 31, 2011, the Treasurer shall
13transfer each month from the General Revenue Fund to the Local
14Government Distributive Fund an amount equal to the net of (i)
151/10 of the net revenue realized from the tax imposed by
16subsections (a) and (b) of Section 201 of the Illinois Income
17Tax Act during the preceding month (ii) minus, beginning July
181, 2003 and ending June 30, 2004, $6,666,666, and beginning
19July 1, 2004, zero. Beginning February 1, 2011, and continuing
20through January 31, 2015, the Treasurer shall transfer each
21month from the General Revenue Fund to the Local Government
22Distributive Fund an amount equal to the sum of (i) 6% (10% of
23the ratio of the 3% individual income tax rate prior to 2011 to
24the 5% individual income tax rate after 2010) of the net
25revenue realized from the tax imposed by subsections (a) and
26(b) of Section 201 of this Act upon individuals, trusts, and

 

 

HB0319- 38 -LRB101 04004 HLH 49012 b

1estates during the preceding month and (ii) 6.86% (10% of the
2ratio of the 4.8% corporate income tax rate prior to 2011 to
3the 7% corporate income tax rate after 2010) of the net revenue
4realized from the tax imposed by subsections (a) and (b) of
5Section 201 of this Act upon corporations during the preceding
6month. Beginning February 1, 2015 and continuing through July
731, 2017, the Treasurer shall transfer each month from the
8General Revenue Fund to the Local Government Distributive Fund
9an amount equal to the sum of (i) 8% (10% of the ratio of the 3%
10individual income tax rate prior to 2011 to the 3.75%
11individual income tax rate after 2014) of the net revenue
12realized from the tax imposed by subsections (a) and (b) of
13Section 201 of this Act upon individuals, trusts, and estates
14during the preceding month and (ii) 9.14% (10% of the ratio of
15the 4.8% corporate income tax rate prior to 2011 to the 5.25%
16corporate income tax rate after 2014) of the net revenue
17realized from the tax imposed by subsections (a) and (b) of
18Section 201 of this Act upon corporations during the preceding
19month. Beginning August 1, 2017 and continuing through January
2031, 2019, the Treasurer shall transfer each month from the
21General Revenue Fund to the Local Government Distributive Fund
22an amount equal to the sum of (i) 6.06% (10% of the ratio of the
233% individual income tax rate prior to 2011 to the 4.95%
24individual income tax rate after July 1, 2017) of the net
25revenue realized from the tax imposed by subsections (a) and
26(b) of Section 201 of this Act upon individuals, trusts, and

 

 

HB0319- 39 -LRB101 04004 HLH 49012 b

1estates during the preceding month and (ii) 6.85% (10% of the
2ratio of the 4.8% corporate income tax rate prior to 2011 to
3the 7% corporate income tax rate after July 1, 2017) of the net
4revenue realized from the tax imposed by subsections (a) and
5(b) of Section 201 of this Act upon corporations during the
6preceding month. Beginning February 1, 2019, the Treasurer
7shall transfer each month from the General Revenue Fund to the
8Local Government Distributive Fund an amount equal to the sum
9of (i) 6.06% (10% of the ratio of the 3% individual income tax
10rate prior to 2011 to the 4.95% individual income tax rate
11after July 1, 2017) of the net revenue realized from the tax
12imposed by subsections (a) and (b) of Section 201 of this Act
13upon individuals, trusts, and estates during the preceding
14month and (ii) 10% of the net revenue realized from the tax
15imposed by subsections (a) and (b) of Section 201 of this Act
16upon corporations during the preceding month. Net revenue
17realized for a month shall be defined as the revenue from the
18tax imposed by subsections (a) and (b) of Section 201 of this
19Act which is deposited in the General Revenue Fund, the
20Education Assistance Fund, the Income Tax Surcharge Local
21Government Distributive Fund, the Fund for the Advancement of
22Education, and the Commitment to Human Services Fund during the
23month minus the amount paid out of the General Revenue Fund in
24State warrants during that same month as refunds to taxpayers
25for overpayment of liability under the tax imposed by
26subsections (a) and (b) of Section 201 of this Act.

 

 

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1    Notwithstanding any provision of law to the contrary,
2beginning on July 6, 2017 (the effective date of Public Act
3100-23), those amounts required under this subsection (b) to be
4transferred by the Treasurer into the Local Government
5Distributive Fund from the General Revenue Fund shall be
6directly deposited into the Local Government Distributive Fund
7as the revenue is realized from the tax imposed by subsections
8(a) and (b) of Section 201 of this Act.
9    For State fiscal year 2018 only, notwithstanding any
10provision of law to the contrary, the total amount of revenue
11and deposits under this Section attributable to revenues
12realized during State fiscal year 2018 shall be reduced by 10%.
13    For State fiscal year 2019 only, notwithstanding any
14provision of law to the contrary, the total amount of revenue
15and deposits under this Section attributable to revenues
16realized during State fiscal year 2019 shall be reduced by 5%.
17    (c) Deposits Into Income Tax Refund Fund.
18        (1) Beginning on January 1, 1989 and thereafter, the
19    Department shall deposit a percentage of the amounts
20    collected pursuant to subsections (a) and (b)(1), (2), and
21    (3) of Section 201 of this Act into a fund in the State
22    treasury known as the Income Tax Refund Fund. The
23    Department shall deposit 6% of such amounts during the
24    period beginning January 1, 1989 and ending on June 30,
25    1989. Beginning with State fiscal year 1990 and for each
26    fiscal year thereafter, the percentage deposited into the

 

 

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1    Income Tax Refund Fund during a fiscal year shall be the
2    Annual Percentage. For fiscal years 1999 through 2001, the
3    Annual Percentage shall be 7.1%. For fiscal year 2003, the
4    Annual Percentage shall be 8%. For fiscal year 2004, the
5    Annual Percentage shall be 11.7%. Upon the effective date
6    of Public Act 93-839 (July 30, 2004), the Annual Percentage
7    shall be 10% for fiscal year 2005. For fiscal year 2006,
8    the Annual Percentage shall be 9.75%. For fiscal year 2007,
9    the Annual Percentage shall be 9.75%. For fiscal year 2008,
10    the Annual Percentage shall be 7.75%. For fiscal year 2009,
11    the Annual Percentage shall be 9.75%. For fiscal year 2010,
12    the Annual Percentage shall be 9.75%. For fiscal year 2011,
13    the Annual Percentage shall be 8.75%. For fiscal year 2012,
14    the Annual Percentage shall be 8.75%. For fiscal year 2013,
15    the Annual Percentage shall be 9.75%. For fiscal year 2014,
16    the Annual Percentage shall be 9.5%. For fiscal year 2015,
17    the Annual Percentage shall be 10%. For fiscal year 2018,
18    the Annual Percentage shall be 9.8%. For fiscal year 2019,
19    the Annual Percentage shall be 9.7%. For all other fiscal
20    years, the Annual Percentage shall be calculated as a
21    fraction, the numerator of which shall be the amount of
22    refunds approved for payment by the Department during the
23    preceding fiscal year as a result of overpayment of tax
24    liability under subsections (a) and (b)(1), (2), and (3) of
25    Section 201 of this Act plus the amount of such refunds
26    remaining approved but unpaid at the end of the preceding

 

 

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1    fiscal year, minus the amounts transferred into the Income
2    Tax Refund Fund from the Tobacco Settlement Recovery Fund,
3    and the denominator of which shall be the amounts which
4    will be collected pursuant to subsections (a) and (b)(1),
5    (2), and (3) of Section 201 of this Act during the
6    preceding fiscal year; except that in State fiscal year
7    2002, the Annual Percentage shall in no event exceed 7.6%.
8    The Director of Revenue shall certify the Annual Percentage
9    to the Comptroller on the last business day of the fiscal
10    year immediately preceding the fiscal year for which it is
11    to be effective.
12        (2) Beginning on January 1, 1989 and thereafter, the
13    Department shall deposit a percentage of the amounts
14    collected pursuant to subsections (a) and (b)(6), (7), and
15    (8), (c) and (d) of Section 201 of this Act into a fund in
16    the State treasury known as the Income Tax Refund Fund. The
17    Department shall deposit 18% of such amounts during the
18    period beginning January 1, 1989 and ending on June 30,
19    1989. Beginning with State fiscal year 1990 and for each
20    fiscal year thereafter, the percentage deposited into the
21    Income Tax Refund Fund during a fiscal year shall be the
22    Annual Percentage. For fiscal years 1999, 2000, and 2001,
23    the Annual Percentage shall be 19%. For fiscal year 2003,
24    the Annual Percentage shall be 27%. For fiscal year 2004,
25    the Annual Percentage shall be 32%. Upon the effective date
26    of Public Act 93-839 (July 30, 2004), the Annual Percentage

 

 

HB0319- 43 -LRB101 04004 HLH 49012 b

1    shall be 24% for fiscal year 2005. For fiscal year 2006,
2    the Annual Percentage shall be 20%. For fiscal year 2007,
3    the Annual Percentage shall be 17.5%. For fiscal year 2008,
4    the Annual Percentage shall be 15.5%. For fiscal year 2009,
5    the Annual Percentage shall be 17.5%. For fiscal year 2010,
6    the Annual Percentage shall be 17.5%. For fiscal year 2011,
7    the Annual Percentage shall be 17.5%. For fiscal year 2012,
8    the Annual Percentage shall be 17.5%. For fiscal year 2013,
9    the Annual Percentage shall be 14%. For fiscal year 2014,
10    the Annual Percentage shall be 13.4%. For fiscal year 2015,
11    the Annual Percentage shall be 14%. For fiscal year 2018,
12    the Annual Percentage shall be 17.5%. For fiscal year 2019,
13    the Annual Percentage shall be 15.5%. For all other fiscal
14    years, the Annual Percentage shall be calculated as a
15    fraction, the numerator of which shall be the amount of
16    refunds approved for payment by the Department during the
17    preceding fiscal year as a result of overpayment of tax
18    liability under subsections (a) and (b)(6), (7), and (8),
19    (c) and (d) of Section 201 of this Act plus the amount of
20    such refunds remaining approved but unpaid at the end of
21    the preceding fiscal year, and the denominator of which
22    shall be the amounts which will be collected pursuant to
23    subsections (a) and (b)(6), (7), and (8), (c) and (d) of
24    Section 201 of this Act during the preceding fiscal year;
25    except that in State fiscal year 2002, the Annual
26    Percentage shall in no event exceed 23%. The Director of

 

 

HB0319- 44 -LRB101 04004 HLH 49012 b

1    Revenue shall certify the Annual Percentage to the
2    Comptroller on the last business day of the fiscal year
3    immediately preceding the fiscal year for which it is to be
4    effective.
5        (3) The Comptroller shall order transferred and the
6    Treasurer shall transfer from the Tobacco Settlement
7    Recovery Fund to the Income Tax Refund Fund (i) $35,000,000
8    in January, 2001, (ii) $35,000,000 in January, 2002, and
9    (iii) $35,000,000 in January, 2003.
10    (d) Expenditures from Income Tax Refund Fund.
11        (1) Beginning January 1, 1989, money in the Income Tax
12    Refund Fund shall be expended exclusively for the purpose
13    of paying refunds resulting from overpayment of tax
14    liability under Section 201 of this Act and for making
15    transfers pursuant to this subsection (d).
16        (2) The Director shall order payment of refunds
17    resulting from overpayment of tax liability under Section
18    201 of this Act from the Income Tax Refund Fund only to the
19    extent that amounts collected pursuant to Section 201 of
20    this Act and transfers pursuant to this subsection (d) and
21    item (3) of subsection (c) have been deposited and retained
22    in the Fund.
23        (3) As soon as possible after the end of each fiscal
24    year, the Director shall order transferred and the State
25    Treasurer and State Comptroller shall transfer from the
26    Income Tax Refund Fund to the Personal Property Tax

 

 

HB0319- 45 -LRB101 04004 HLH 49012 b

1    Replacement Fund an amount, certified by the Director to
2    the Comptroller, equal to the excess of the amount
3    collected pursuant to subsections (c) and (d) of Section
4    201 of this Act deposited into the Income Tax Refund Fund
5    during the fiscal year over the amount of refunds resulting
6    from overpayment of tax liability under subsections (c) and
7    (d) of Section 201 of this Act paid from the Income Tax
8    Refund Fund during the fiscal year.
9        (4) As soon as possible after the end of each fiscal
10    year, the Director shall order transferred and the State
11    Treasurer and State Comptroller shall transfer from the
12    Personal Property Tax Replacement Fund to the Income Tax
13    Refund Fund an amount, certified by the Director to the
14    Comptroller, equal to the excess of the amount of refunds
15    resulting from overpayment of tax liability under
16    subsections (c) and (d) of Section 201 of this Act paid
17    from the Income Tax Refund Fund during the fiscal year over
18    the amount collected pursuant to subsections (c) and (d) of
19    Section 201 of this Act deposited into the Income Tax
20    Refund Fund during the fiscal year.
21        (4.5) As soon as possible after the end of fiscal year
22    1999 and of each fiscal year thereafter, the Director shall
23    order transferred and the State Treasurer and State
24    Comptroller shall transfer from the Income Tax Refund Fund
25    to the General Revenue Fund any surplus remaining in the
26    Income Tax Refund Fund as of the end of such fiscal year;

 

 

HB0319- 46 -LRB101 04004 HLH 49012 b

1    excluding for fiscal years 2000, 2001, and 2002 amounts
2    attributable to transfers under item (3) of subsection (c)
3    less refunds resulting from the earned income tax credit.
4        (5) This Act shall constitute an irrevocable and
5    continuing appropriation from the Income Tax Refund Fund
6    for the purpose of paying refunds upon the order of the
7    Director in accordance with the provisions of this Section.
8    (e) Deposits into the Education Assistance Fund and the
9Income Tax Surcharge Local Government Distributive Fund. On
10July 1, 1991, and thereafter, of the amounts collected pursuant
11to subsections (a) and (b) of Section 201 of this Act, minus
12deposits into the Income Tax Refund Fund, the Department shall
13deposit 7.3% into the Education Assistance Fund in the State
14Treasury. Beginning July 1, 1991, and continuing through
15January 31, 1993, of the amounts collected pursuant to
16subsections (a) and (b) of Section 201 of the Illinois Income
17Tax Act, minus deposits into the Income Tax Refund Fund, the
18Department shall deposit 3.0% into the Income Tax Surcharge
19Local Government Distributive Fund in the State Treasury.
20Beginning February 1, 1993 and continuing through June 30,
211993, of the amounts collected pursuant to subsections (a) and
22(b) of Section 201 of the Illinois Income Tax Act, minus
23deposits into the Income Tax Refund Fund, the Department shall
24deposit 4.4% into the Income Tax Surcharge Local Government
25Distributive Fund in the State Treasury. Beginning July 1,
261993, and continuing through June 30, 1994, of the amounts

 

 

HB0319- 47 -LRB101 04004 HLH 49012 b

1collected under subsections (a) and (b) of Section 201 of this
2Act, minus deposits into the Income Tax Refund Fund, the
3Department shall deposit 1.475% into the Income Tax Surcharge
4Local Government Distributive Fund in the State Treasury.
5    (f) Deposits into the Fund for the Advancement of
6Education. Beginning February 1, 2015, the Department shall
7deposit the following portions of the revenue realized from the
8tax imposed upon individuals, trusts, and estates by
9subsections (a) and (b) of Section 201 of this Act during the
10preceding month, minus deposits into the Income Tax Refund
11Fund, into the Fund for the Advancement of Education:
12        (1) beginning February 1, 2015, and prior to February
13    1, 2025, 1/30; and
14        (2) beginning February 1, 2025, 1/26.
15    If the rate of tax imposed by subsection (a) and (b) of
16Section 201 is reduced pursuant to Section 201.5 of this Act,
17the Department shall not make the deposits required by this
18subsection (f) on or after the effective date of the reduction.
19    (g) Deposits into the Commitment to Human Services Fund.
20Beginning February 1, 2015, the Department shall deposit the
21following portions of the revenue realized from the tax imposed
22upon individuals, trusts, and estates by subsections (a) and
23(b) of Section 201 of this Act during the preceding month,
24minus deposits into the Income Tax Refund Fund, into the
25Commitment to Human Services Fund:
26        (1) beginning February 1, 2015, and prior to February

 

 

HB0319- 48 -LRB101 04004 HLH 49012 b

1    1, 2025, 1/30; and
2        (2) beginning February 1, 2025, 1/26.
3    If the rate of tax imposed by subsection (a) and (b) of
4Section 201 is reduced pursuant to Section 201.5 of this Act,
5the Department shall not make the deposits required by this
6subsection (g) on or after the effective date of the reduction.
7    (h) Deposits into the Tax Compliance and Administration
8Fund. Beginning on the first day of the first calendar month to
9occur on or after August 26, 2014 (the effective date of Public
10Act 98-1098), each month the Department shall pay into the Tax
11Compliance and Administration Fund, to be used, subject to
12appropriation, to fund additional auditors and compliance
13personnel at the Department, an amount equal to 1/12 of 5% of
14the cash receipts collected during the preceding fiscal year by
15the Audit Bureau of the Department from the tax imposed by
16subsections (a), (b), (c), and (d) of Section 201 of this Act,
17net of deposits into the Income Tax Refund Fund made from those
18cash receipts.
19(Source: P.A. 99-78, eff. 7-20-15; 100-22, eff. 7-6-17; 100-23,
20eff. 7-6-17; 100-587, eff. 6-4-18; 100-621, eff. 7-20-18;
21100-863, eff. 8-14-18; revised 10-12-18.)
 
22    Section 99. Effective date. This Act takes effect upon
23becoming law.