101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB3723

 

Introduced 2/14/2020, by Sen. Chuck Weaver

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/201

    Amends the Illinois Income Tax Act. Increases the research and development credit by providing that the increase in research and development activities shall be based on an increase over 50% of the average of the qualifying expenditures for each year in the base period (instead of 100% of the average of the qualifying expenditures for each year in the base period). Provides that the research and development credit applies on a permanent basis. Effective immediately.


LRB101 19786 HLH 69297 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB3723LRB101 19786 HLH 69297 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 Section 201 as follows:
 
6    (35 ILCS 5/201)
7    (Text of Section before amendment by P.A. 101-8)
8    Sec. 201. Tax imposed.
9    (a) In general. A tax measured by net income is hereby
10imposed on every individual, corporation, trust and estate for
11each taxable year ending after July 31, 1969 on the privilege
12of earning or receiving income in or as a resident of this
13State. Such tax shall be in addition to all other occupation or
14privilege taxes imposed by this State or by any municipal
15corporation or political subdivision thereof.
16    (b) Rates. The tax imposed by subsection (a) of this
17Section shall be determined as follows, except as adjusted by
18subsection (d-1):
19        (1) In the case of an individual, trust or estate, for
20    taxable years ending prior to July 1, 1989, an amount equal
21    to 2 1/2% of the taxpayer's net income for the taxable
22    year.
23        (2) In the case of an individual, trust or estate, for

 

 

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

 

 

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

 

 

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1    as calculated under Section 202.3.
2        (8) In the case of a corporation, for taxable years
3    beginning after June 30, 1989, and ending prior to January
4    1, 2011, an amount equal to 4.8% of the taxpayer's net
5    income for the taxable year.
6        (9) In the case of a corporation, for taxable years
7    beginning prior to January 1, 2011, and ending after
8    December 31, 2010, an amount equal to the sum of (i) 4.8%
9    of the taxpayer's net income for the period prior to
10    January 1, 2011, as calculated under Section 202.5, and
11    (ii) 7% of the taxpayer's net income for the period after
12    December 31, 2010, as calculated under Section 202.5.
13        (10) In the case of a corporation, for taxable years
14    beginning on or after January 1, 2011, and ending prior to
15    January 1, 2015, an amount equal to 7% of the taxpayer's
16    net income for the taxable year.
17        (11) In the case of a corporation, for taxable years
18    beginning prior to January 1, 2015, and ending after
19    December 31, 2014, an amount equal to the sum of (i) 7% of
20    the taxpayer's net income for the period prior to January
21    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
22    of the taxpayer's net income for the period after December
23    31, 2014, as calculated under Section 202.5.
24        (12) In the case of a corporation, for taxable years
25    beginning on or after January 1, 2015, and ending prior to
26    July 1, 2017, an amount equal to 5.25% of the taxpayer's

 

 

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1    net income for the taxable year.
2        (13) In the case of a corporation, for taxable years
3    beginning prior to July 1, 2017, and ending after June 30,
4    2017, an amount equal to the sum of (i) 5.25% of the
5    taxpayer's net income for the period prior to July 1, 2017,
6    as calculated under Section 202.5, and (ii) 7% of the
7    taxpayer's net income for the period after June 30, 2017,
8    as calculated under Section 202.5.
9        (14) In the case of a corporation, for taxable years
10    beginning on or after July 1, 2017, an amount equal to 7%
11    of the taxpayer's net income for the taxable year.
12    The rates under this subsection (b) are subject to the
13provisions of Section 201.5.
14    (b-5) Surcharge; sale or exchange of assets, properties,
15and intangibles of organization gaming licensees. For each of
16taxable years 2019 through 2027, a surcharge is imposed on all
17taxpayers on income arising from the sale or exchange of
18capital assets, depreciable business property, real property
19used in the trade or business, and Section 197 intangibles (i)
20of an organization licensee under the Illinois Horse Racing Act
21of 1975 and (ii) of an organization gaming licensee under the
22Illinois Gambling Act. The amount of the surcharge is equal to
23the amount of federal income tax liability for the taxable year
24attributable to those sales and exchanges. The surcharge
25imposed shall not apply if:
26        (1) the organization gaming license, organization

 

 

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1    license, or racetrack property is transferred as a result
2    of any of the following:
3            (A) bankruptcy, a receivership, or a debt
4        adjustment initiated by or against the initial
5        licensee or the substantial owners of the initial
6        licensee;
7            (B) cancellation, revocation, or termination of
8        any such license by the Illinois Gaming Board or the
9        Illinois Racing Board;
10            (C) a determination by the Illinois Gaming Board
11        that transfer of the license is in the best interests
12        of Illinois gaming;
13            (D) the death of an owner of the equity interest in
14        a licensee;
15            (E) the acquisition of a controlling interest in
16        the stock or substantially all of the assets of a
17        publicly traded company;
18            (F) a transfer by a parent company to a wholly
19        owned subsidiary; or
20            (G) the transfer or sale to or by one person to
21        another person where both persons were initial owners
22        of the license when the license was issued; or
23        (2) the controlling interest in the organization
24    gaming license, organization license, or racetrack
25    property is transferred in a transaction to lineal
26    descendants in which no gain or loss is recognized or as a

 

 

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1    result of a transaction in accordance with Section 351 of
2    the Internal Revenue Code in which no gain or loss is
3    recognized; or
4        (3) live horse racing was not conducted in 2010 at a
5    racetrack located within 3 miles of the Mississippi River
6    under a license issued pursuant to the Illinois Horse
7    Racing Act of 1975.
8    The transfer of an organization gaming license,
9organization license, or racetrack property by a person other
10than the initial licensee to receive the organization gaming
11license is not subject to a surcharge. The Department shall
12adopt rules necessary to implement and administer this
13subsection.
14    (c) Personal Property Tax Replacement Income Tax.
15Beginning on July 1, 1979 and thereafter, in addition to such
16income tax, there is also hereby imposed the Personal Property
17Tax Replacement Income Tax measured by net income on every
18corporation (including Subchapter S corporations), partnership
19and trust, for each taxable year ending after June 30, 1979.
20Such taxes are imposed on the privilege of earning or receiving
21income in or as a resident of this State. The Personal Property
22Tax Replacement Income Tax shall be in addition to the income
23tax imposed by subsections (a) and (b) of this Section and in
24addition to all other occupation or privilege taxes imposed by
25this State or by any municipal corporation or political
26subdivision thereof.

 

 

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1    (d) Additional Personal Property Tax Replacement Income
2Tax Rates. The personal property tax replacement income tax
3imposed by this subsection and subsection (c) of this Section
4in the case of a corporation, other than a Subchapter S
5corporation and except as adjusted by subsection (d-1), shall
6be an additional amount equal to 2.85% of such taxpayer's net
7income for the taxable year, except that beginning on January
81, 1981, and thereafter, the rate of 2.85% specified in this
9subsection shall be reduced to 2.5%, and in the case of a
10partnership, trust or a Subchapter S corporation shall be an
11additional amount equal to 1.5% of such taxpayer's net income
12for the taxable year.
13    (d-1) Rate reduction for certain foreign insurers. In the
14case of a foreign insurer, as defined by Section 35A-5 of the
15Illinois Insurance Code, whose state or country of domicile
16imposes on insurers domiciled in Illinois a retaliatory tax
17(excluding any insurer whose premiums from reinsurance assumed
18are 50% or more of its total insurance premiums as determined
19under paragraph (2) of subsection (b) of Section 304, except
20that for purposes of this determination premiums from
21reinsurance do not include premiums from inter-affiliate
22reinsurance arrangements), beginning with taxable years ending
23on or after December 31, 1999, the sum of the rates of tax
24imposed by subsections (b) and (d) shall be reduced (but not
25increased) to the rate at which the total amount of tax imposed
26under this Act, net of all credits allowed under this Act,

 

 

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1shall equal (i) the total amount of tax that would be imposed
2on the foreign insurer's net income allocable to Illinois for
3the taxable year by such foreign insurer's state or country of
4domicile if that net income were subject to all income taxes
5and taxes measured by net income imposed by such foreign
6insurer's state or country of domicile, net of all credits
7allowed or (ii) a rate of zero if no such tax is imposed on such
8income by the foreign insurer's state of domicile. For the
9purposes of this subsection (d-1), an inter-affiliate includes
10a mutual insurer under common management.
11        (1) For the purposes of subsection (d-1), in no event
12    shall the sum of the rates of tax imposed by subsections
13    (b) and (d) be reduced below the rate at which the sum of:
14            (A) the total amount of tax imposed on such foreign
15        insurer under this Act for a taxable year, net of all
16        credits allowed under this Act, plus
17            (B) the privilege tax imposed by Section 409 of the
18        Illinois Insurance Code, the fire insurance company
19        tax imposed by Section 12 of the Fire Investigation
20        Act, and the fire department taxes imposed under
21        Section 11-10-1 of the Illinois Municipal Code,
22    equals 1.25% for taxable years ending prior to December 31,
23    2003, or 1.75% for taxable years ending on or after
24    December 31, 2003, of the net taxable premiums written for
25    the taxable year, as described by subsection (1) of Section
26    409 of the Illinois Insurance Code. This paragraph will in

 

 

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1    no event increase the rates imposed under subsections (b)
2    and (d).
3        (2) Any reduction in the rates of tax imposed by this
4    subsection shall be applied first against the rates imposed
5    by subsection (b) and only after the tax imposed by
6    subsection (a) net of all credits allowed under this
7    Section other than the credit allowed under subsection (i)
8    has been reduced to zero, against the rates imposed by
9    subsection (d).
10    This subsection (d-1) is exempt from the provisions of
11Section 250.
12    (e) Investment credit. A taxpayer shall be allowed a credit
13against the Personal Property Tax Replacement Income Tax for
14investment in qualified property.
15        (1) A taxpayer shall be allowed a credit equal to .5%
16    of the basis of qualified property placed in service during
17    the taxable year, provided such property is placed in
18    service on or after July 1, 1984. There shall be allowed an
19    additional credit equal to .5% of the basis of qualified
20    property placed in service during the taxable year,
21    provided such property is placed in service on or after
22    July 1, 1986, and the taxpayer's base employment within
23    Illinois has increased by 1% or more over the preceding
24    year as determined by the taxpayer's employment records
25    filed with the Illinois Department of Employment Security.
26    Taxpayers who are new to Illinois shall be deemed to have

 

 

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1    met the 1% growth in base employment for the first year in
2    which they file employment records with the Illinois
3    Department of Employment Security. The provisions added to
4    this Section by Public Act 85-1200 (and restored by Public
5    Act 87-895) shall be construed as declaratory of existing
6    law and not as a new enactment. If, in any year, the
7    increase in base employment within Illinois over the
8    preceding year is less than 1%, the additional credit shall
9    be limited to that percentage times a fraction, the
10    numerator of which is .5% and the denominator of which is
11    1%, but shall not exceed .5%. The investment credit shall
12    not be allowed to the extent that it would reduce a
13    taxpayer's liability in any tax year below zero, nor may
14    any credit for qualified property be allowed for any year
15    other than the year in which the property was placed in
16    service in Illinois. For tax years ending on or after
17    December 31, 1987, and on or before December 31, 1988, the
18    credit shall be allowed for the tax year in which the
19    property is placed in service, or, if the amount of the
20    credit exceeds the tax liability for that year, whether it
21    exceeds the original liability or the liability as later
22    amended, such excess may be carried forward and applied to
23    the tax liability of the 5 taxable years following the
24    excess credit years if the taxpayer (i) makes investments
25    which cause the creation of a minimum of 2,000 full-time
26    equivalent jobs in Illinois, (ii) is located in an

 

 

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1    enterprise zone established pursuant to the Illinois
2    Enterprise Zone Act and (iii) is certified by the
3    Department of Commerce and Community Affairs (now
4    Department of Commerce and Economic Opportunity) as
5    complying with the requirements specified in clause (i) and
6    (ii) by July 1, 1986. The Department of Commerce and
7    Community Affairs (now Department of Commerce and Economic
8    Opportunity) shall notify the Department of Revenue of all
9    such certifications immediately. For tax years ending
10    after December 31, 1988, the credit shall be allowed for
11    the tax year in which the property is placed in service,
12    or, if the amount of the credit exceeds the tax liability
13    for that year, whether it exceeds the original liability or
14    the liability as later amended, such excess may be carried
15    forward and applied to the tax liability of the 5 taxable
16    years following the excess credit years. The credit shall
17    be applied to the earliest year for which there is a
18    liability. If there is credit from more than one tax year
19    that is available to offset a liability, earlier credit
20    shall be applied first.
21        (2) The term "qualified property" means property
22    which:
23            (A) is tangible, whether new or used, including
24        buildings and structural components of buildings and
25        signs that are real property, but not including land or
26        improvements to real property that are not a structural

 

 

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1        component of a building such as landscaping, sewer
2        lines, local access roads, fencing, parking lots, and
3        other appurtenances;
4            (B) is depreciable pursuant to Section 167 of the
5        Internal Revenue Code, except that "3-year property"
6        as defined in Section 168(c)(2)(A) of that Code is not
7        eligible for the credit provided by this subsection
8        (e);
9            (C) is acquired by purchase as defined in Section
10        179(d) of the Internal Revenue Code;
11            (D) is used in Illinois by a taxpayer who is
12        primarily engaged in manufacturing, or in mining coal
13        or fluorite, or in retailing, or was placed in service
14        on or after July 1, 2006 in a River Edge Redevelopment
15        Zone established pursuant to the River Edge
16        Redevelopment Zone Act; and
17            (E) has not previously been used in Illinois in
18        such a manner and by such a person as would qualify for
19        the credit provided by this subsection (e) or
20        subsection (f).
21        (3) For purposes of this subsection (e),
22    "manufacturing" means the material staging and production
23    of tangible personal property by procedures commonly
24    regarded as manufacturing, processing, fabrication, or
25    assembling which changes some existing material into new
26    shapes, new qualities, or new combinations. For purposes of

 

 

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1    this subsection (e) the term "mining" shall have the same
2    meaning as the term "mining" in Section 613(c) of the
3    Internal Revenue Code. For purposes of this subsection (e),
4    the term "retailing" means the sale of tangible personal
5    property for use or consumption and not for resale, or
6    services rendered in conjunction with the sale of tangible
7    personal property for use or consumption and not for
8    resale. For purposes of this subsection (e), "tangible
9    personal property" has the same meaning as when that term
10    is used in the Retailers' Occupation Tax Act, and, for
11    taxable years ending after December 31, 2008, does not
12    include the generation, transmission, or distribution of
13    electricity.
14        (4) The basis of qualified property shall be the basis
15    used to compute the depreciation deduction for federal
16    income tax purposes.
17        (5) If the basis of the property for federal income tax
18    depreciation purposes is increased after it has been placed
19    in service in Illinois by the taxpayer, the amount of such
20    increase shall be deemed property placed in service on the
21    date of such increase in basis.
22        (6) The term "placed in service" shall have the same
23    meaning as under Section 46 of the Internal Revenue Code.
24        (7) If during any taxable year, any property ceases to
25    be qualified property in the hands of the taxpayer within
26    48 months after being placed in service, or the situs of

 

 

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1    any qualified property is moved outside Illinois within 48
2    months after being placed in service, the Personal Property
3    Tax Replacement Income Tax for such taxable year shall be
4    increased. Such increase shall be determined by (i)
5    recomputing the investment credit which would have been
6    allowed for the year in which credit for such property was
7    originally allowed by eliminating such property from such
8    computation and, (ii) subtracting such recomputed credit
9    from the amount of credit previously allowed. For the
10    purposes of this paragraph (7), a reduction of the basis of
11    qualified property resulting from a redetermination of the
12    purchase price shall be deemed a disposition of qualified
13    property to the extent of such reduction.
14        (8) Unless the investment credit is extended by law,
15    the basis of qualified property shall not include costs
16    incurred after December 31, 2018, except for costs incurred
17    pursuant to a binding contract entered into on or before
18    December 31, 2018.
19        (9) Each taxable year ending before December 31, 2000,
20    a partnership may elect to pass through to its partners the
21    credits to which the partnership is entitled under this
22    subsection (e) for the taxable year. A partner may use the
23    credit allocated to him or her under this paragraph only
24    against the tax imposed in subsections (c) and (d) of this
25    Section. If the partnership makes that election, those
26    credits shall be allocated among the partners in the

 

 

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1    partnership in accordance with the rules set forth in
2    Section 704(b) of the Internal Revenue Code, and the rules
3    promulgated under that Section, and the allocated amount of
4    the credits shall be allowed to the partners for that
5    taxable year. The partnership shall make this election on
6    its Personal Property Tax Replacement Income Tax return for
7    that taxable year. The election to pass through the credits
8    shall be irrevocable.
9        For taxable years ending on or after December 31, 2000,
10    a partner that qualifies its partnership for a subtraction
11    under subparagraph (I) of paragraph (2) of subsection (d)
12    of Section 203 or a shareholder that qualifies a Subchapter
13    S corporation for a subtraction under subparagraph (S) of
14    paragraph (2) of subsection (b) of Section 203 shall be
15    allowed a credit under this subsection (e) equal to its
16    share of the credit earned under this subsection (e) during
17    the taxable year by the partnership or Subchapter S
18    corporation, determined in accordance with the
19    determination of income and distributive share of income
20    under Sections 702 and 704 and Subchapter S of the Internal
21    Revenue Code. This paragraph is exempt from the provisions
22    of Section 250.
23    (f) Investment credit; Enterprise Zone; River Edge
24Redevelopment Zone.
25        (1) A taxpayer shall be allowed a credit against the
26    tax imposed by subsections (a) and (b) of this Section for

 

 

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1    investment in qualified property which is placed in service
2    in an Enterprise Zone created pursuant to the Illinois
3    Enterprise Zone Act or, for property placed in service on
4    or after July 1, 2006, a River Edge Redevelopment Zone
5    established pursuant to the River Edge Redevelopment Zone
6    Act. For partners, shareholders of Subchapter S
7    corporations, and owners of limited liability companies,
8    if the liability company is treated as a partnership for
9    purposes of federal and State income taxation, there shall
10    be allowed a credit under this subsection (f) to be
11    determined in accordance with the determination of income
12    and distributive share of income under Sections 702 and 704
13    and Subchapter S of the Internal Revenue Code. The credit
14    shall be .5% of the basis for such property. The credit
15    shall be available only in the taxable year in which the
16    property is placed in service in the Enterprise Zone or
17    River Edge Redevelopment Zone and shall not be allowed to
18    the extent that it would reduce a taxpayer's liability for
19    the tax imposed by subsections (a) and (b) of this Section
20    to below zero. For tax years ending on or after December
21    31, 1985, the credit shall be allowed for the tax year in
22    which the property is placed in service, or, if the amount
23    of the credit exceeds the tax liability for that year,
24    whether it exceeds the original liability or the liability
25    as later amended, such excess may be carried forward and
26    applied to the tax liability of the 5 taxable years

 

 

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1    following the excess credit year. The credit shall be
2    applied to the earliest year for which there is a
3    liability. If there is credit from more than one tax year
4    that is available to offset a liability, the credit
5    accruing first in time shall be applied first.
6        (2) The term qualified property means property which:
7            (A) is tangible, whether new or used, including
8        buildings and structural components of buildings;
9            (B) is depreciable pursuant to Section 167 of the
10        Internal Revenue Code, except that "3-year property"
11        as defined in Section 168(c)(2)(A) of that Code is not
12        eligible for the credit provided by this subsection
13        (f);
14            (C) is acquired by purchase as defined in Section
15        179(d) of the Internal Revenue Code;
16            (D) is used in the Enterprise Zone or River Edge
17        Redevelopment Zone by the taxpayer; and
18            (E) has not been previously used in Illinois in
19        such a manner and by such a person as would qualify for
20        the credit provided by this subsection (f) or
21        subsection (e).
22        (3) The basis of qualified property shall be the basis
23    used to compute the depreciation deduction for federal
24    income tax purposes.
25        (4) If the basis of the property for federal income tax
26    depreciation purposes is increased after it has been placed

 

 

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1    in service in the Enterprise Zone or River Edge
2    Redevelopment Zone by the taxpayer, the amount of such
3    increase shall be deemed property placed in service on the
4    date of such increase in basis.
5        (5) The term "placed in service" shall have the same
6    meaning as under Section 46 of the Internal Revenue Code.
7        (6) If during any taxable year, any property ceases to
8    be qualified property in the hands of the taxpayer within
9    48 months after being placed in service, or the situs of
10    any qualified property is moved outside the Enterprise Zone
11    or River Edge Redevelopment Zone within 48 months after
12    being placed in service, the tax imposed under subsections
13    (a) and (b) of this Section 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 (6), 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        (7) There shall be allowed an additional credit equal
25    to 0.5% of the basis of qualified property placed in
26    service during the taxable year in a River Edge

 

 

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1    Redevelopment Zone, provided such property is placed in
2    service on or after July 1, 2006, and the taxpayer's base
3    employment within Illinois has increased by 1% or more over
4    the preceding year as determined by the taxpayer's
5    employment records filed with the Illinois Department of
6    Employment Security. Taxpayers who are new to Illinois
7    shall be deemed to have met the 1% growth in base
8    employment for the first year in which they file employment
9    records with the Illinois Department of Employment
10    Security. If, in any year, the increase in base employment
11    within Illinois over the preceding year is less than 1%,
12    the additional credit shall be limited to that percentage
13    times a fraction, the numerator of which is 0.5% and the
14    denominator of which is 1%, but shall not exceed 0.5%.
15        (8) For taxable years beginning on or after January 1,
16    2021, there shall be allowed an Enterprise Zone
17    construction jobs credit against the taxes imposed under
18    subsections (a) and (b) of this Section as provided in
19    Section 13 of the Illinois Enterprise Zone Act.
20        The credit or credits may not reduce the taxpayer's
21    liability to less than zero. If the amount of the credit or
22    credits exceeds the taxpayer's liability, the excess may be
23    carried forward and applied against the taxpayer's
24    liability in succeeding calendar years in the same manner
25    provided under paragraph (4) of Section 211 of this Act.
26    The credit or credits shall be applied to the earliest year

 

 

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1    for which there is a tax liability. If there are credits
2    from more than one taxable year that are available to
3    offset a liability, the earlier credit shall be applied
4    first.
5        For partners, shareholders of Subchapter S
6    corporations, and owners of limited liability companies,
7    if the liability company is treated as a partnership for
8    the purposes of federal and State income taxation, there
9    shall be allowed a credit under this Section to be
10    determined in accordance with the determination of income
11    and distributive share of income under Sections 702 and 704
12    and Subchapter S of the Internal Revenue Code.
13        The total aggregate amount of credits awarded under the
14    Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
15    amendatory Act of the 101st General Assembly) shall not
16    exceed $20,000,000 in any State fiscal year.
17        This paragraph (8) is exempt from the provisions of
18    Section 250.
19    (g) (Blank).
20    (h) Investment credit; High Impact Business.
21        (1) Subject to subsections (b) and (b-5) of Section 5.5
22    of the Illinois Enterprise Zone Act, a taxpayer shall be
23    allowed a credit against the tax imposed by subsections (a)
24    and (b) of this Section for investment in qualified
25    property which is placed in service by a Department of
26    Commerce and Economic Opportunity designated High Impact

 

 

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1    Business. The credit shall be .5% of the basis for such
2    property. The credit shall not be available (i) until the
3    minimum investments in qualified property set forth in
4    subdivision (a)(3)(A) of Section 5.5 of the Illinois
5    Enterprise Zone Act have been satisfied or (ii) until the
6    time authorized in subsection (b-5) of the Illinois
7    Enterprise Zone Act for entities designated as High Impact
8    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
9    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
10    Act, and shall not be allowed to the extent that it would
11    reduce a taxpayer's liability for the tax imposed by
12    subsections (a) and (b) of this Section to below zero. The
13    credit applicable to such investments shall be taken in the
14    taxable year in which such investments have been completed.
15    The credit for additional investments beyond the minimum
16    investment by a designated high impact business authorized
17    under subdivision (a)(3)(A) of Section 5.5 of the Illinois
18    Enterprise Zone Act shall be available only in the taxable
19    year in which the property is placed in service and shall
20    not be allowed to the extent that it would reduce a
21    taxpayer's liability for the tax imposed by subsections (a)
22    and (b) of this Section to below zero. For tax years ending
23    on or after December 31, 1987, the credit shall be allowed
24    for the tax year in which the property is placed in
25    service, or, if the amount of the credit exceeds the tax
26    liability for that year, whether it exceeds the original

 

 

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1    liability or the liability as later amended, such excess
2    may be carried forward and applied to the tax liability of
3    the 5 taxable years following the excess credit year. The
4    credit shall be applied to the earliest year for which
5    there is a liability. If there is credit from more than one
6    tax year that is available to offset a liability, the
7    credit accruing first in time shall be applied first.
8        Changes made in this subdivision (h)(1) by Public Act
9    88-670 restore changes made by Public Act 85-1182 and
10    reflect existing law.
11        (2) The term qualified property means property which:
12            (A) is tangible, whether new or used, including
13        buildings and structural components of buildings;
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        (h);
19            (C) is acquired by purchase as defined in Section
20        179(d) of the Internal Revenue Code; and
21            (D) is not eligible for the Enterprise Zone
22        Investment Credit provided by subsection (f) of this
23        Section.
24        (3) The basis of qualified property shall be the basis
25    used to compute the depreciation deduction for federal
26    income tax purposes.

 

 

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1        (4) If the basis of the property for federal income tax
2    depreciation purposes is increased after it has been placed
3    in service in a federally designated Foreign Trade Zone or
4    Sub-Zone located in Illinois by the taxpayer, the amount of
5    such increase shall be deemed property placed in service on
6    the date of such increase in basis.
7        (5) The term "placed in service" shall have the same
8    meaning as under Section 46 of the Internal Revenue Code.
9        (6) If during any taxable year ending on or before
10    December 31, 1996, any property ceases to be qualified
11    property in the hands of the taxpayer within 48 months
12    after being placed in service, or the situs of any
13    qualified property is moved outside Illinois within 48
14    months after being placed in service, the tax imposed under
15    subsections (a) and (b) of this Section for such taxable
16    year shall be increased. Such increase shall be determined
17    by (i) recomputing the investment credit which would have
18    been allowed for the year in which credit for such property
19    was originally allowed by eliminating such property from
20    such computation, and (ii) subtracting such recomputed
21    credit from the amount of credit previously allowed. For
22    the purposes of this paragraph (6), a reduction of the
23    basis of qualified property resulting from a
24    redetermination of the purchase price shall be deemed a
25    disposition of qualified property to the extent of such
26    reduction.

 

 

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1        (7) Beginning with tax years ending after December 31,
2    1996, if a taxpayer qualifies for the credit under this
3    subsection (h) and thereby is granted a tax abatement and
4    the taxpayer relocates its entire facility in violation of
5    the explicit terms and length of the contract under Section
6    18-183 of the Property Tax Code, the tax imposed under
7    subsections (a) and (b) of this Section shall be increased
8    for the taxable year in which the taxpayer relocated its
9    facility by an amount equal to the amount of credit
10    received by the taxpayer under this subsection (h).
11    (h-5) High Impact Business construction constructions jobs
12credit. For taxable years beginning on or after January 1,
132021, there shall also be allowed a High Impact Business
14construction jobs credit against the tax imposed under
15subsections (a) and (b) of this Section as provided in
16subsections (i) and (j) of Section 5.5 of the Illinois
17Enterprise Zone Act.
18    The credit or credits may not reduce the taxpayer's
19liability to less than zero. If the amount of the credit or
20credits exceeds the taxpayer's liability, the excess may be
21carried forward and applied against the taxpayer's liability in
22succeeding calendar years in the manner provided under
23paragraph (4) of Section 211 of this Act. The credit or credits
24shall be applied to the earliest year for which there is a tax
25liability. If there are credits from more than one taxable year
26that are available to offset a liability, the earlier credit

 

 

SB3723- 26 -LRB101 19786 HLH 69297 b

1shall be applied first.
2    For partners, shareholders of Subchapter S corporations,
3and owners of limited liability companies, if the liability
4company is treated as a partnership for the purposes of federal
5and State income taxation, there shall be allowed a credit
6under this Section to be determined in accordance with the
7determination of income and distributive share of income under
8Sections 702 and 704 and Subchapter S of the Internal Revenue
9Code.
10    The total aggregate amount of credits awarded under the
11Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
12amendatory Act of the 101st General Assembly) shall not exceed
13$20,000,000 in any State fiscal year.
14    This subsection (h-5) is exempt from the provisions of
15Section 250.
16    (i) Credit for Personal Property Tax Replacement Income
17Tax. For tax years ending prior to December 31, 2003, a credit
18shall be allowed against the tax imposed by subsections (a) and
19(b) of this Section for the tax imposed by subsections (c) and
20(d) of this Section. This credit shall be computed by
21multiplying the tax imposed by subsections (c) and (d) of this
22Section by a fraction, the numerator of which is base income
23allocable to Illinois and the denominator of which is Illinois
24base income, and further multiplying the product by the tax
25rate imposed by subsections (a) and (b) of this Section.
26    Any credit earned on or after December 31, 1986 under this

 

 

SB3723- 27 -LRB101 19786 HLH 69297 b

1subsection which is unused in the year the credit is computed
2because it exceeds the tax liability imposed by subsections (a)
3and (b) for that year (whether it exceeds the original
4liability or the liability as later amended) may be carried
5forward and applied to the tax liability imposed by subsections
6(a) and (b) of the 5 taxable years following the excess credit
7year, provided that no credit may be carried forward to any
8year ending on or after December 31, 2003. This credit shall be
9applied first to the earliest year for which there is a
10liability. If there is a credit under this subsection from more
11than one tax year that is available to offset a liability the
12earliest credit arising under this subsection shall be applied
13first.
14    If, during any taxable year ending on or after December 31,
151986, the tax imposed by subsections (c) and (d) of this
16Section for which a taxpayer has claimed a credit under this
17subsection (i) is reduced, the amount of credit for such tax
18shall also be reduced. Such reduction shall be determined by
19recomputing the credit to take into account the reduced tax
20imposed by subsections (c) and (d). If any portion of the
21reduced amount of credit has been carried to a different
22taxable year, an amended return shall be filed for such taxable
23year to reduce the amount of credit claimed.
24    (j) Training expense credit. Beginning with tax years
25ending on or after December 31, 1986 and prior to December 31,
262003, a taxpayer shall be allowed a credit against the tax

 

 

SB3723- 28 -LRB101 19786 HLH 69297 b

1imposed by subsections (a) and (b) under this Section for all
2amounts paid or accrued, on behalf of all persons employed by
3the taxpayer in Illinois or Illinois residents employed outside
4of Illinois by a taxpayer, for educational or vocational
5training in semi-technical or technical fields or semi-skilled
6or skilled fields, which were deducted from gross income in the
7computation of taxable income. The credit against the tax
8imposed by subsections (a) and (b) shall be 1.6% of such
9training expenses. For partners, shareholders of subchapter S
10corporations, and owners of limited liability companies, if the
11liability company is treated as a partnership for purposes of
12federal and State income taxation, there shall be allowed a
13credit under this subsection (j) to be determined in accordance
14with the determination of income and distributive share of
15income under Sections 702 and 704 and subchapter S of the
16Internal Revenue Code.
17    Any credit allowed under this subsection which is unused in
18the year the credit is earned may be carried forward to each of
19the 5 taxable years following the year for which the credit is
20first computed until it is used. This credit shall be applied
21first to the earliest year for which there is a liability. If
22there is a credit under this subsection from more than one tax
23year that is available to offset a liability, the earliest
24credit arising under this subsection shall be applied first. No
25carryforward credit may be claimed in any tax year ending on or
26after December 31, 2003.

 

 

SB3723- 29 -LRB101 19786 HLH 69297 b

1    (k) Research and development credit. For tax years ending
2after July 1, 1990 and prior to December 31, 2003, and
3beginning again for tax years ending on or after December 31,
42004, and ending prior to January 1, 2027, a taxpayer shall be
5allowed a credit against the tax imposed by subsections (a) and
6(b) of this Section for increasing research activities in this
7State. The credit allowed against the tax imposed by
8subsections (a) and (b) shall be equal to 6 1/2% of the
9qualifying expenditures for increasing research activities in
10this State. 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 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    For purposes of this subsection the following terms have
19the following meanings. "Qualifying , "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 , "qualifying
24expenditures for increasing research activities in this State"
25means the excess of qualifying expenditures for the taxable
26year in which incurred over qualifying expenditures for the

 

 

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1base period. "Qualifying , "qualifying expenditures for the
2base period" means: (1) for taxable years ending prior to
3December 31, 2020, the average of the qualifying expenditures
4for each year in the base period; and (2) for taxable years
5ending on or after December 31, 2020, 50% of the average of the
6qualifying expenditures for each year in the base period.
7"Base , and "base period" means the 3 taxable years immediately
8preceding the taxable year for which the determination is being
9made.
10    Any credit in excess of the tax liability for the taxable
11year may be carried forward. A taxpayer may elect to have the
12unused credit shown on its final completed return carried over
13as a credit against the tax liability for the following 5
14taxable years or until it has been fully used, whichever occurs
15first; provided that no credit earned in a tax year ending
16prior to December 31, 2003 may be carried forward to any year
17ending on or after December 31, 2003.
18    If an unused credit is carried forward to a given year from
192 or more earlier years, that credit arising in the earliest
20year will be applied first against the tax liability for the
21given year. If a tax liability for the given year still
22remains, the credit from the next earliest year will then be
23applied, and so on, until all credits have been used or no tax
24liability for the given year remains. Any remaining unused
25credit or credits then will be carried forward to the next
26following year in which a tax liability is incurred, except

 

 

SB3723- 31 -LRB101 19786 HLH 69297 b

1that no credit can be carried forward to a year which is more
2than 5 years after the year in which the expense for which the
3credit is given was incurred.
4    No inference shall be drawn from Public Act 91-644 this
5amendatory Act of the 91st General Assembly in construing this
6Section for taxable years beginning before January 1, 1999.
7    It is the intent of the General Assembly that the research
8and development credit under this subsection (k) shall apply
9continuously for all tax years ending on or after December 31,
102004 and ending prior to January 1, 2027, including, but not
11limited to, the period beginning on January 1, 2016 and ending
12on July 6, 2017 (the effective date of Public Act 100-22) this
13amendatory Act of the 100th General Assembly. All actions taken
14in reliance on the continuation of the credit under this
15subsection (k) by any taxpayer are hereby validated.
16    This subsection (k) is exempt from the provisions of
17Section 250.
18    (l) Environmental Remediation Tax Credit.
19        (i) For tax years ending after December 31, 1997 and on
20    or before December 31, 2001, a taxpayer shall be allowed a
21    credit against the tax imposed by subsections (a) and (b)
22    of this Section for certain amounts paid for unreimbursed
23    eligible remediation costs, as specified in this
24    subsection. For purposes of this Section, "unreimbursed
25    eligible remediation costs" means costs approved by the
26    Illinois Environmental Protection Agency ("Agency") under

 

 

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1    Section 58.14 of the Environmental Protection Act that were
2    paid in performing environmental remediation at a site for
3    which a No Further Remediation Letter was issued by the
4    Agency and recorded under Section 58.10 of the
5    Environmental Protection Act. The credit must be claimed
6    for the taxable year in which Agency approval of the
7    eligible remediation costs is granted. The credit is not
8    available to any taxpayer if the taxpayer or any related
9    party caused or contributed to, in any material respect, a
10    release of regulated substances on, in, or under the site
11    that was identified and addressed by the remedial action
12    pursuant to the Site Remediation Program of the
13    Environmental Protection Act. After the Pollution Control
14    Board rules are adopted pursuant to the Illinois
15    Administrative Procedure Act for the administration and
16    enforcement of Section 58.9 of the Environmental
17    Protection Act, determinations as to credit availability
18    for purposes of this Section shall be made consistent with
19    those rules. For purposes of this Section, "taxpayer"
20    includes a person whose tax attributes the taxpayer has
21    succeeded to under Section 381 of the Internal Revenue Code
22    and "related party" includes the persons disallowed a
23    deduction for losses by paragraphs (b), (c), and (f)(1) of
24    Section 267 of the Internal Revenue Code by virtue of being
25    a related taxpayer, as well as any of its partners. The
26    credit allowed against the tax imposed by subsections (a)

 

 

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1    and (b) shall be equal to 25% of the unreimbursed eligible
2    remediation costs in excess of $100,000 per site, except
3    that the $100,000 threshold shall not apply to any site
4    contained in an enterprise zone as determined by the
5    Department of Commerce and Community Affairs (now
6    Department of Commerce and Economic Opportunity). The
7    total credit allowed shall not exceed $40,000 per year with
8    a maximum total of $150,000 per site. For partners and
9    shareholders of subchapter S corporations, there shall be
10    allowed a credit under this subsection to be determined in
11    accordance with the determination of income and
12    distributive share of income under Sections 702 and 704 and
13    subchapter S of the Internal Revenue Code.
14        (ii) A credit allowed under this subsection that is
15    unused in the year the credit is earned may be carried
16    forward to each of the 5 taxable years following the year
17    for which the credit is first earned until it is used. The
18    term "unused credit" does not include any amounts of
19    unreimbursed eligible remediation costs in excess of the
20    maximum credit per site authorized under paragraph (i).
21    This credit shall be applied first to the earliest year for
22    which there is a liability. If there is a credit under this
23    subsection from more than one tax year that is available to
24    offset a liability, the earliest credit arising under this
25    subsection shall be applied first. A credit allowed under
26    this subsection may be sold to a buyer as part of a sale of

 

 

SB3723- 34 -LRB101 19786 HLH 69297 b

1    all or part of the remediation site for which the credit
2    was granted. The purchaser of a remediation site and the
3    tax credit shall succeed to the unused credit and remaining
4    carry-forward period of the seller. To perfect the
5    transfer, the assignor shall record the transfer in the
6    chain of title for the site and provide written notice to
7    the Director of the Illinois Department of Revenue of the
8    assignor's intent to sell the remediation site and the
9    amount of the tax credit to be transferred as a portion of
10    the sale. In no event may a credit be transferred to any
11    taxpayer if the taxpayer or a related party would not be
12    eligible under the provisions of subsection (i).
13        (iii) For purposes of this Section, the term "site"
14    shall have the same meaning as under Section 58.2 of the
15    Environmental Protection Act.
16    (m) Education expense credit. Beginning with tax years
17ending after December 31, 1999, a taxpayer who is the custodian
18of one or more qualifying pupils shall be allowed a credit
19against the tax imposed by subsections (a) and (b) of this
20Section for qualified education expenses incurred on behalf of
21the qualifying pupils. The credit shall be equal to 25% of
22qualified education expenses, but in no event may the total
23credit under this subsection claimed by a family that is the
24custodian of qualifying pupils exceed (i) $500 for tax years
25ending prior to December 31, 2017, and (ii) $750 for tax years
26ending on or after December 31, 2017. In no event shall a

 

 

SB3723- 35 -LRB101 19786 HLH 69297 b

1credit under this subsection reduce the taxpayer's liability
2under this Act to less than zero. Notwithstanding any other
3provision of law, for taxable years beginning on or after
4January 1, 2017, no taxpayer may claim a credit under this
5subsection (m) if the taxpayer's adjusted gross income for the
6taxable year exceeds (i) $500,000, in the case of spouses
7filing a joint federal tax return or (ii) $250,000, in the case
8of all other taxpayers. This subsection is exempt from the
9provisions of Section 250 of this Act.
10    For purposes of this subsection:
11    "Qualifying pupils" means individuals who (i) are
12residents of the State of Illinois, (ii) are under the age of
1321 at the close of the school year for which a credit is
14sought, and (iii) during the school year for which a credit is
15sought were full-time pupils enrolled in a kindergarten through
16twelfth grade education program at any school, as defined in
17this subsection.
18    "Qualified education expense" means the amount incurred on
19behalf of a qualifying pupil in excess of $250 for tuition,
20book fees, and lab fees at the school in which the pupil is
21enrolled during the regular school year.
22    "School" means any public or nonpublic elementary or
23secondary school in Illinois that is in compliance with Title
24VI of the Civil Rights Act of 1964 and attendance at which
25satisfies the requirements of Section 26-1 of the School Code,
26except that nothing shall be construed to require a child to

 

 

SB3723- 36 -LRB101 19786 HLH 69297 b

1attend any particular public or nonpublic school to qualify for
2the credit under this Section.
3    "Custodian" means, with respect to qualifying pupils, an
4Illinois resident who is a parent, the parents, a legal
5guardian, or the legal guardians of the qualifying pupils.
6    (n) River Edge Redevelopment Zone site remediation tax
7credit.
8        (i) For tax years ending on or after December 31, 2006,
9    a taxpayer shall be allowed a credit against the tax
10    imposed by subsections (a) and (b) of this Section for
11    certain amounts paid for unreimbursed eligible remediation
12    costs, as specified in this subsection. For purposes of
13    this Section, "unreimbursed eligible remediation costs"
14    means costs approved by the Illinois Environmental
15    Protection Agency ("Agency") under Section 58.14a of the
16    Environmental Protection Act that were paid in performing
17    environmental remediation at a site within a River Edge
18    Redevelopment Zone for which a No Further Remediation
19    Letter was issued by the Agency and recorded under Section
20    58.10 of the Environmental Protection Act. The credit must
21    be claimed for the taxable year in which Agency approval of
22    the eligible remediation costs is granted. The credit is
23    not available to any taxpayer if the taxpayer or any
24    related party caused or contributed to, in any material
25    respect, a release of regulated substances on, in, or under
26    the site that was identified and addressed by the remedial

 

 

SB3723- 37 -LRB101 19786 HLH 69297 b

1    action pursuant to the Site Remediation Program of the
2    Environmental Protection Act. Determinations as to credit
3    availability for purposes of this Section shall be made
4    consistent with rules adopted by the Pollution Control
5    Board pursuant to the Illinois Administrative Procedure
6    Act for the administration and enforcement of Section 58.9
7    of the Environmental Protection Act. For purposes of this
8    Section, "taxpayer" includes a person whose tax attributes
9    the taxpayer has succeeded to under Section 381 of the
10    Internal Revenue Code and "related party" includes the
11    persons disallowed a deduction for losses by paragraphs
12    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
13    Code by virtue of being a related taxpayer, as well as any
14    of its partners. The credit allowed against the tax imposed
15    by subsections (a) and (b) shall be equal to 25% of the
16    unreimbursed eligible remediation costs in excess of
17    $100,000 per site.
18        (ii) A credit allowed under this subsection that is
19    unused in the year the credit is earned may be carried
20    forward to each of the 5 taxable years following the year
21    for which the credit is first earned until it is used. This
22    credit shall be applied first to the earliest year for
23    which there is a liability. If there is a credit under this
24    subsection from more than one tax year that is available to
25    offset a liability, the earliest credit arising under this
26    subsection shall be applied first. A credit allowed under

 

 

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1    this subsection may be sold to a buyer as part of a sale of
2    all or part of the remediation site for which the credit
3    was granted. The purchaser of a remediation site and the
4    tax credit shall succeed to the unused credit and remaining
5    carry-forward period of the seller. To perfect the
6    transfer, the assignor shall record the transfer in the
7    chain of title for the site and provide written notice to
8    the Director of the Illinois Department of Revenue of the
9    assignor's intent to sell the remediation site and the
10    amount of the tax credit to be transferred as a portion of
11    the sale. In no event may a credit be transferred to any
12    taxpayer if the taxpayer or a related party would not be
13    eligible under the provisions of subsection (i).
14        (iii) For purposes of this Section, the term "site"
15    shall have the same meaning as under Section 58.2 of the
16    Environmental Protection Act.
17    (o) For each of taxable years during the Compassionate Use
18of Medical Cannabis Program, a surcharge is imposed on all
19taxpayers on income arising from the sale or exchange of
20capital assets, depreciable business property, real property
21used in the trade or business, and Section 197 intangibles of
22an organization registrant under the Compassionate Use of
23Medical Cannabis Program Act. The amount of the surcharge is
24equal to the amount of federal income tax liability for the
25taxable year attributable to those sales and exchanges. The
26surcharge imposed does not apply if:

 

 

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1        (1) the medical cannabis cultivation center
2    registration, medical cannabis dispensary registration, or
3    the property of a registration is transferred as a result
4    of any of the following:
5            (A) bankruptcy, a receivership, or a debt
6        adjustment initiated by or against the initial
7        registration or the substantial owners of the initial
8        registration;
9            (B) cancellation, revocation, or termination of
10        any registration by the Illinois Department of Public
11        Health;
12            (C) a determination by the Illinois Department of
13        Public Health that transfer of the registration is in
14        the best interests of Illinois qualifying patients as
15        defined by the Compassionate Use of Medical Cannabis
16        Program Act;
17            (D) the death of an owner of the equity interest in
18        a registrant;
19            (E) the acquisition of a controlling interest in
20        the stock or substantially all of the assets of a
21        publicly traded company;
22            (F) a transfer by a parent company to a wholly
23        owned subsidiary; or
24            (G) the transfer or sale to or by one person to
25        another person where both persons were initial owners
26        of the registration when the registration was issued;

 

 

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1        or
2        (2) the cannabis cultivation center registration,
3    medical cannabis dispensary registration, or the
4    controlling interest in a registrant's property is
5    transferred in a transaction to lineal descendants in which
6    no gain or loss is recognized or as a result of a
7    transaction in accordance with Section 351 of the Internal
8    Revenue Code in which no gain or loss is recognized.
9(Source: P.A. 100-22, eff. 7-6-17; 101-9, eff. 6-5-19; 101-31,
10eff. 6-28-19; 101-207, eff. 8-2-19; 101-363, eff. 8-9-19;
11revised 9-17-19.)
 
12    (Text of Section after amendment by P.A. 101-8)
13    Sec. 201. Tax imposed.
14    (a) In general. A tax measured by net income is hereby
15imposed on every individual, corporation, trust and estate for
16each taxable year ending after July 31, 1969 on the privilege
17of earning or receiving income in or as a resident of this
18State. Such tax shall be in addition to all other occupation or
19privilege taxes imposed by this State or by any municipal
20corporation or political subdivision thereof.
21    (b) Rates. The tax imposed by subsection (a) of this
22Section shall be determined as follows, except as adjusted by
23subsection (d-1):
24        (1) In the case of an individual, trust or estate, for
25    taxable years ending prior to July 1, 1989, an amount equal

 

 

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

 

 

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1    ending after December 31, 2014, an amount equal to the sum
2    of (i) 5% of the taxpayer's net income for the period prior
3    to January 1, 2015, as calculated under Section 202.5, and
4    (ii) 3.75% of the taxpayer's net income for the period
5    after December 31, 2014, as calculated under Section 202.5.
6        (5.2) In the case of an individual, trust, or estate,
7    for taxable years beginning on or after January 1, 2015,
8    and ending prior to July 1, 2017, an amount equal to 3.75%
9    of the taxpayer's net income for the taxable year.
10        (5.3) In the case of an individual, trust, or estate,
11    for taxable years beginning prior to July 1, 2017, and
12    ending after June 30, 2017, an amount equal to the sum of
13    (i) 3.75% of the taxpayer's net income for the period prior
14    to July 1, 2017, as calculated under Section 202.5, and
15    (ii) 4.95% of the taxpayer's net income for the period
16    after June 30, 2017, as calculated under Section 202.5.
17        (5.4) In the case of an individual, trust, or estate,
18    for taxable years beginning on or after July 1, 2017 and
19    beginning prior to January 1, 2021, an amount equal to
20    4.95% of the taxpayer's net income for the taxable year.
21        (5.5) In the case of an individual, trust, or estate,
22    for taxable years beginning on or after January 1, 2021, an
23    amount calculated under the rate structure set forth in
24    Section 201.1.
25        (6) In the case of a corporation, for taxable years
26    ending prior to July 1, 1989, an amount equal to 4% of the

 

 

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1    taxpayer's net income for the taxable year.
2        (7) In the case of a corporation, for taxable years
3    beginning prior to July 1, 1989 and ending after June 30,
4    1989, an amount equal to the sum of (i) 4% of the
5    taxpayer's net income for the period prior to July 1, 1989,
6    as calculated under Section 202.3, and (ii) 4.8% of the
7    taxpayer's net income for the period after June 30, 1989,
8    as calculated under Section 202.3.
9        (8) In the case of a corporation, for taxable years
10    beginning after June 30, 1989, and ending prior to January
11    1, 2011, an amount equal to 4.8% of the taxpayer's net
12    income for the taxable year.
13        (9) In the case of a corporation, for taxable years
14    beginning prior to January 1, 2011, and ending after
15    December 31, 2010, an amount equal to the sum of (i) 4.8%
16    of the taxpayer's net income for the period prior to
17    January 1, 2011, as calculated under Section 202.5, and
18    (ii) 7% of the taxpayer's net income for the period after
19    December 31, 2010, as calculated under Section 202.5.
20        (10) In the case of a corporation, for taxable years
21    beginning on or after January 1, 2011, and ending prior to
22    January 1, 2015, an amount equal to 7% of the taxpayer's
23    net income for the taxable year.
24        (11) In the case of a corporation, for taxable years
25    beginning prior to January 1, 2015, and ending after
26    December 31, 2014, an amount equal to the sum of (i) 7% of

 

 

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1    the taxpayer's net income for the period prior to January
2    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
3    of the taxpayer's net income for the period after December
4    31, 2014, as calculated under Section 202.5.
5        (12) In the case of a corporation, for taxable years
6    beginning on or after January 1, 2015, and ending prior to
7    July 1, 2017, an amount equal to 5.25% of the taxpayer's
8    net income for the taxable year.
9        (13) In the case of a corporation, for taxable years
10    beginning prior to July 1, 2017, and ending after June 30,
11    2017, an amount equal to the sum of (i) 5.25% of the
12    taxpayer's net income for the period prior to July 1, 2017,
13    as calculated under Section 202.5, and (ii) 7% of the
14    taxpayer's net income for the period after June 30, 2017,
15    as calculated under Section 202.5.
16        (14) In the case of a corporation, for taxable years
17    beginning on or after July 1, 2017 and beginning prior to
18    January 1, 2021, an amount equal to 7% of the taxpayer's
19    net income for the taxable year.
20        (15) In the case of a corporation, for taxable years
21    beginning on or after January 1, 2021, an amount equal to
22    7.99% of the taxpayer's net income for the taxable year.
23    The rates under this subsection (b) are subject to the
24provisions of Section 201.5.
25    (b-5) Surcharge; sale or exchange of assets, properties,
26and intangibles of organization gaming licensees. For each of

 

 

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1taxable years 2019 through 2027, a surcharge is imposed on all
2taxpayers on income arising from the sale or exchange of
3capital assets, depreciable business property, real property
4used in the trade or business, and Section 197 intangibles (i)
5of an organization licensee under the Illinois Horse Racing Act
6of 1975 and (ii) of an organization gaming licensee under the
7Illinois Gambling Act. The amount of the surcharge is equal to
8the amount of federal income tax liability for the taxable year
9attributable to those sales and exchanges. The surcharge
10imposed shall not apply if:
11        (1) the organization gaming license, organization
12    license, or racetrack property is transferred as a result
13    of any of the following:
14            (A) bankruptcy, a receivership, or a debt
15        adjustment initiated by or against the initial
16        licensee or the substantial owners of the initial
17        licensee;
18            (B) cancellation, revocation, or termination of
19        any such license by the Illinois Gaming Board or the
20        Illinois Racing Board;
21            (C) a determination by the Illinois Gaming Board
22        that transfer of the license is in the best interests
23        of Illinois gaming;
24            (D) the death of an owner of the equity interest in
25        a licensee;
26            (E) the acquisition of a controlling interest in

 

 

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1        the stock or substantially all of the assets of a
2        publicly traded company;
3            (F) a transfer by a parent company to a wholly
4        owned subsidiary; or
5            (G) the transfer or sale to or by one person to
6        another person where both persons were initial owners
7        of the license when the license was issued; or
8        (2) the controlling interest in the organization
9    gaming license, organization license, or racetrack
10    property is transferred in a transaction to lineal
11    descendants in which no gain or loss is recognized or as a
12    result of a transaction in accordance with Section 351 of
13    the Internal Revenue Code in which no gain or loss is
14    recognized; or
15        (3) live horse racing was not conducted in 2010 at a
16    racetrack located within 3 miles of the Mississippi River
17    under a license issued pursuant to the Illinois Horse
18    Racing Act of 1975.
19    The transfer of an organization gaming license,
20organization license, or racetrack property by a person other
21than the initial licensee to receive the organization gaming
22license is not subject to a surcharge. The Department shall
23adopt rules necessary to implement and administer this
24subsection.
25    (c) Personal Property Tax Replacement Income Tax.
26Beginning on July 1, 1979 and thereafter, in addition to such

 

 

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1income tax, there is also hereby imposed the Personal Property
2Tax Replacement Income Tax measured by net income on every
3corporation (including Subchapter S corporations), partnership
4and trust, for each taxable year ending after June 30, 1979.
5Such taxes are imposed on the privilege of earning or receiving
6income in or as a resident of this State. The Personal Property
7Tax Replacement Income Tax shall be in addition to the income
8tax imposed by subsections (a) and (b) of this Section and in
9addition to all other occupation or privilege taxes imposed by
10this State or by any municipal corporation or political
11subdivision thereof.
12    (d) Additional Personal Property Tax Replacement Income
13Tax Rates. The personal property tax replacement income tax
14imposed by this subsection and subsection (c) of this Section
15in the case of a corporation, other than a Subchapter S
16corporation and except as adjusted by subsection (d-1), shall
17be an additional amount equal to 2.85% of such taxpayer's net
18income for the taxable year, except that beginning on January
191, 1981, and thereafter, the rate of 2.85% specified in this
20subsection shall be reduced to 2.5%, and in the case of a
21partnership, trust or a Subchapter S corporation shall be an
22additional amount equal to 1.5% of such taxpayer's net income
23for the taxable year.
24    (d-1) Rate reduction for certain foreign insurers. In the
25case of a foreign insurer, as defined by Section 35A-5 of the
26Illinois Insurance Code, whose state or country of domicile

 

 

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

 

 

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

 

 

SB3723- 50 -LRB101 19786 HLH 69297 b

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    property is placed in service in the Enterprise Zone or
2    River Edge Redevelopment Zone and shall not be allowed to
3    the extent that it would reduce a taxpayer's liability for
4    the tax imposed by subsections (a) and (b) of this Section
5    to below zero. For tax years ending on or after December
6    31, 1985, the credit shall be allowed for the tax year in
7    which the property is placed in service, or, if the amount
8    of the credit exceeds the tax liability for that year,
9    whether it exceeds the original liability or the liability
10    as later amended, such excess may be carried forward and
11    applied to the tax liability of the 5 taxable years
12    following the excess credit year. The credit shall be
13    applied to the earliest year for which there is a
14    liability. If there is credit from more than one tax year
15    that is available to offset a liability, the credit
16    accruing first in time shall be applied first.
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        (f);
25            (C) is acquired by purchase as defined in Section
26        179(d) of the Internal Revenue Code;

 

 

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

 

 

SB3723- 59 -LRB101 19786 HLH 69297 b

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

 

 

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1    2021, there shall be allowed an Enterprise Zone
2    construction jobs credit against the taxes imposed under
3    subsections (a) and (b) of this Section as provided in
4    Section 13 of the Illinois Enterprise Zone Act.
5        The credit or credits may not reduce the taxpayer's
6    liability to less than zero. If the amount of the credit or
7    credits exceeds the taxpayer's liability, the excess may be
8    carried forward and applied against the taxpayer's
9    liability in succeeding calendar years in the same manner
10    provided under paragraph (4) of Section 211 of this Act.
11    The credit or credits shall be applied to the earliest year
12    for which there is a tax liability. If there are credits
13    from more than one taxable year that are available to
14    offset a liability, the earlier credit shall be applied
15    first.
16        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    the purposes of federal and State income taxation, there
20    shall be allowed a credit under this Section 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.
24        The total aggregate amount of credits awarded under the
25    Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
26    amendatory Act of the 101st General Assembly) shall not

 

 

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1    exceed $20,000,000 in any State fiscal year.
2        This paragraph (8) is exempt from the provisions of
3    Section 250.
4    (g) (Blank).
5    (h) Investment credit; High Impact Business.
6        (1) Subject to subsections (b) and (b-5) of Section 5.5
7    of the Illinois Enterprise Zone Act, a taxpayer shall be
8    allowed a credit against the tax imposed by subsections (a)
9    and (b) of this Section for investment in qualified
10    property which is placed in service by a Department of
11    Commerce and Economic Opportunity designated High Impact
12    Business. The credit shall be .5% of the basis for such
13    property. The credit shall not be available (i) until the
14    minimum investments in qualified property set forth in
15    subdivision (a)(3)(A) of Section 5.5 of the Illinois
16    Enterprise Zone Act have been satisfied or (ii) until the
17    time authorized in subsection (b-5) of the Illinois
18    Enterprise Zone Act for entities designated as High Impact
19    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
20    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
21    Act, and shall not be allowed to the extent that it would
22    reduce a taxpayer's liability for the tax imposed by
23    subsections (a) and (b) of this Section to below zero. The
24    credit applicable to such investments shall be taken in the
25    taxable year in which such investments have been completed.
26    The credit for additional investments beyond the minimum

 

 

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1    investment by a designated high impact business authorized
2    under subdivision (a)(3)(A) of Section 5.5 of the Illinois
3    Enterprise Zone Act shall be available only in the taxable
4    year in which the property is placed in service and shall
5    not be allowed to the extent that it would reduce a
6    taxpayer's liability for the tax imposed by subsections (a)
7    and (b) of this Section to below zero. For tax years ending
8    on or after December 31, 1987, the credit shall be allowed
9    for the tax year in which the property is placed in
10    service, or, if the amount of the credit exceeds the tax
11    liability for that year, whether it exceeds the original
12    liability or the liability as later amended, such excess
13    may be carried forward and applied to the tax liability of
14    the 5 taxable years following the excess credit year. The
15    credit shall be applied to the earliest year for which
16    there is a liability. If there is credit from more than one
17    tax year that is available to offset a liability, the
18    credit accruing first in time shall be applied first.
19        Changes made in this subdivision (h)(1) by Public Act
20    88-670 restore changes made by Public Act 85-1182 and
21    reflect existing law.
22        (2) The term qualified property means property which:
23            (A) is tangible, whether new or used, including
24        buildings and structural components of buildings;
25            (B) is depreciable pursuant to Section 167 of the
26        Internal Revenue Code, except that "3-year property"

 

 

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1        as defined in Section 168(c)(2)(A) of that Code is not
2        eligible for the credit provided by this subsection
3        (h);
4            (C) is acquired by purchase as defined in Section
5        179(d) of the Internal Revenue Code; and
6            (D) is not eligible for the Enterprise Zone
7        Investment Credit provided by subsection (f) of this
8        Section.
9        (3) The basis of qualified property shall be the basis
10    used to compute the depreciation deduction for federal
11    income tax purposes.
12        (4) If the basis of the property for federal income tax
13    depreciation purposes is increased after it has been placed
14    in service in a federally designated Foreign Trade Zone or
15    Sub-Zone located in Illinois by the taxpayer, the amount of
16    such increase shall be deemed property placed in service on
17    the date of such increase in basis.
18        (5) The term "placed in service" shall have the same
19    meaning as under Section 46 of the Internal Revenue Code.
20        (6) If during any taxable year ending on or before
21    December 31, 1996, any property ceases to be qualified
22    property in the hands of the taxpayer within 48 months
23    after being placed in service, or the situs of any
24    qualified property is moved outside Illinois within 48
25    months after being placed in service, the tax imposed under
26    subsections (a) and (b) of this Section for such taxable

 

 

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1    year shall be increased. Such increase shall be determined
2    by (i) recomputing the investment credit which would have
3    been allowed for the year in which credit for such property
4    was originally allowed by eliminating such property from
5    such computation, and (ii) subtracting such recomputed
6    credit from the amount of credit previously allowed. For
7    the purposes of this paragraph (6), a reduction of the
8    basis of qualified property resulting from a
9    redetermination of the purchase price shall be deemed a
10    disposition of qualified property to the extent of such
11    reduction.
12        (7) Beginning with tax years ending after December 31,
13    1996, if a taxpayer qualifies for the credit under this
14    subsection (h) and thereby is granted a tax abatement and
15    the taxpayer relocates its entire facility in violation of
16    the explicit terms and length of the contract under Section
17    18-183 of the Property Tax Code, the tax imposed under
18    subsections (a) and (b) of this Section shall be increased
19    for the taxable year in which the taxpayer relocated its
20    facility by an amount equal to the amount of credit
21    received by the taxpayer under this subsection (h).
22    (h-5) High Impact Business construction constructions jobs
23credit. For taxable years beginning on or after January 1,
242021, there shall also be allowed a High Impact Business
25construction jobs credit against the tax imposed under
26subsections (a) and (b) of this Section as provided in

 

 

SB3723- 65 -LRB101 19786 HLH 69297 b

1subsections (i) and (j) of Section 5.5 of the Illinois
2Enterprise Zone Act.
3    The credit or credits may not reduce the taxpayer's
4liability to less than zero. If the amount of the credit or
5credits exceeds the taxpayer's liability, the excess may be
6carried forward and applied against the taxpayer's liability in
7succeeding calendar years in the manner provided under
8paragraph (4) of Section 211 of this Act. The credit or credits
9shall be applied to the earliest year for which there is a tax
10liability. If there are credits from more than one taxable year
11that are available to offset a liability, the earlier credit
12shall be applied first.
13    For partners, shareholders of Subchapter S corporations,
14and owners of limited liability companies, if the liability
15company is treated as a partnership for the purposes of federal
16and State income taxation, there shall be allowed a credit
17under this Section to be determined in accordance with the
18determination of income and distributive share of income under
19Sections 702 and 704 and Subchapter S of the Internal Revenue
20Code.
21    The total aggregate amount of credits awarded under the
22Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
23amendatory Act of the 101st General Assembly) shall not exceed
24$20,000,000 in any State fiscal year.
25    This subsection (h-5) is exempt from the provisions of
26Section 250.

 

 

SB3723- 66 -LRB101 19786 HLH 69297 b

1    (i) Credit for Personal Property Tax Replacement Income
2Tax. For tax years ending prior to December 31, 2003, a credit
3shall be allowed against the tax imposed by subsections (a) and
4(b) of this Section for the tax imposed by subsections (c) and
5(d) of this Section. This credit shall be computed by
6multiplying the tax imposed by subsections (c) and (d) of this
7Section by a fraction, the numerator of which is base income
8allocable to Illinois and the denominator of which is Illinois
9base income, and further multiplying the product by the tax
10rate imposed by subsections (a) and (b) of this Section.
11    Any credit earned on or after December 31, 1986 under this
12subsection which is unused in the year the credit is computed
13because it exceeds the tax liability imposed by subsections (a)
14and (b) for that year (whether it exceeds the original
15liability or the liability as later amended) may be carried
16forward and applied to the tax liability imposed by subsections
17(a) and (b) of the 5 taxable years following the excess credit
18year, provided that no credit may be carried forward to any
19year ending on or after December 31, 2003. This credit shall be
20applied first to the earliest year for which there is a
21liability. If there is a credit under this subsection from more
22than one tax year that is available to offset a liability the
23earliest credit arising under this subsection shall be applied
24first.
25    If, during any taxable year ending on or after December 31,
261986, the tax imposed by subsections (c) and (d) of this

 

 

SB3723- 67 -LRB101 19786 HLH 69297 b

1Section for which a taxpayer has claimed a credit under this
2subsection (i) is reduced, the amount of credit for such tax
3shall also be reduced. Such reduction shall be determined by
4recomputing the credit to take into account the reduced tax
5imposed by subsections (c) and (d). If any portion of the
6reduced amount of credit has been carried to a different
7taxable year, an amended return shall be filed for such taxable
8year to reduce the amount of credit claimed.
9    (j) Training expense credit. Beginning with tax years
10ending on or after December 31, 1986 and prior to December 31,
112003, a taxpayer shall be allowed a credit against the tax
12imposed by subsections (a) and (b) under this Section for all
13amounts paid or accrued, on behalf of all persons employed by
14the taxpayer in Illinois or Illinois residents employed outside
15of Illinois by a taxpayer, for educational or vocational
16training in semi-technical or technical fields or semi-skilled
17or skilled fields, which were deducted from gross income in the
18computation of taxable income. The credit against the tax
19imposed by subsections (a) and (b) shall be 1.6% of such
20training expenses. For partners, shareholders of subchapter S
21corporations, and owners of limited liability companies, if the
22liability company is treated as a partnership for purposes of
23federal and State income taxation, there shall be allowed a
24credit under this subsection (j) to be determined in accordance
25with the determination of income and distributive share of
26income under Sections 702 and 704 and subchapter S of the

 

 

SB3723- 68 -LRB101 19786 HLH 69297 b

1Internal Revenue Code.
2    Any credit allowed under this subsection which is unused in
3the year the credit is earned may be carried forward to each of
4the 5 taxable years following the year for which the credit is
5first computed until it is used. This credit shall be applied
6first to the earliest year for which there is a liability. If
7there is a credit under this subsection from more than one tax
8year that is available to offset a liability, the earliest
9credit arising under this subsection shall be applied first. No
10carryforward credit may be claimed in any tax year ending on or
11after December 31, 2003.
12    (k) Research and development credit. For tax years ending
13after July 1, 1990 and prior to December 31, 2003, and
14beginning again for tax years ending on or after December 31,
152004, and ending prior to January 1, 2027, a taxpayer shall be
16allowed a credit against the tax imposed by subsections (a) and
17(b) of this Section for increasing research activities in this
18State. The credit allowed against the tax imposed by
19subsections (a) and (b) shall be equal to 6 1/2% of the
20qualifying expenditures for increasing research activities in
21this State. For partners, shareholders of subchapter S
22corporations, and owners of limited liability companies, if the
23liability company is treated as a partnership for purposes of
24federal and State income taxation, there shall be allowed a
25credit under this subsection to be determined in accordance
26with the determination of income and distributive share of

 

 

SB3723- 69 -LRB101 19786 HLH 69297 b

1income under Sections 702 and 704 and subchapter S of the
2Internal Revenue Code.
3    For purposes of this subsection the following terms have
4the following meanings. "Qualifying , "qualifying expenditures"
5means the qualifying expenditures as defined for the federal
6credit for increasing research activities which would be
7allowable under Section 41 of the Internal Revenue Code and
8which are conducted in this State. "Qualifying , "qualifying
9expenditures for increasing research activities in this State"
10means the excess of qualifying expenditures for the taxable
11year in which incurred over qualifying expenditures for the
12base period. "Qualifying , "qualifying expenditures for the
13base period" means: (1) for taxable years ending prior to
14December 31, 2020, the average of the qualifying expenditures
15for each year in the base period; and (2) for taxable years
16ending on or after December 31, 2020, 50% of the average of the
17qualifying expenditures for each year in the base period.
18"Base , and "base period" means the 3 taxable years immediately
19preceding the taxable year for which the determination is being
20made.
21    Any credit in excess of the tax liability for the taxable
22year may be carried forward. A taxpayer may elect to have the
23unused credit shown on its final completed return carried over
24as a credit against the tax liability for the following 5
25taxable years or until it has been fully used, whichever occurs
26first; provided that no credit earned in a tax year ending

 

 

SB3723- 70 -LRB101 19786 HLH 69297 b

1prior to December 31, 2003 may be carried forward to any year
2ending on or after December 31, 2003.
3    If an unused credit is carried forward to a given year from
42 or more earlier years, that credit arising in the earliest
5year will be applied first against the tax liability for the
6given year. If a tax liability for the given year still
7remains, the credit from the next earliest year will then be
8applied, and so on, until all credits have been used or no tax
9liability for the given year remains. Any remaining unused
10credit or credits then will be carried forward to the next
11following year in which a tax liability is incurred, except
12that no credit can be carried forward to a year which is more
13than 5 years after the year in which the expense for which the
14credit is given was incurred.
15    No inference shall be drawn from Public Act 91-644 this
16amendatory Act of the 91st General Assembly in construing this
17Section for taxable years beginning before January 1, 1999.
18    It is the intent of the General Assembly that the research
19and development credit under this subsection (k) shall apply
20continuously for all tax years ending on or after December 31,
212004 and ending prior to January 1, 2027, including, but not
22limited to, the period beginning on January 1, 2016 and ending
23on July 6, 2017 (the effective date of Public Act 100-22) this
24amendatory Act of the 100th General Assembly. All actions taken
25in reliance on the continuation of the credit under this
26subsection (k) by any taxpayer are hereby validated.

 

 

SB3723- 71 -LRB101 19786 HLH 69297 b

1    This subsection (k) is exempt from the provisions of
2Section 250.
3    (l) Environmental Remediation Tax Credit.
4        (i) For tax years ending after December 31, 1997 and on
5    or before December 31, 2001, a taxpayer shall be allowed a
6    credit against the tax imposed by subsections (a) and (b)
7    of this Section for certain amounts paid for unreimbursed
8    eligible remediation costs, as specified in this
9    subsection. For purposes of this Section, "unreimbursed
10    eligible remediation costs" means costs approved by the
11    Illinois Environmental Protection Agency ("Agency") under
12    Section 58.14 of the Environmental Protection Act that were
13    paid in performing environmental remediation at a site for
14    which a No Further Remediation Letter was issued by the
15    Agency and recorded under Section 58.10 of the
16    Environmental Protection Act. The credit must be claimed
17    for the taxable year in which Agency approval of the
18    eligible remediation costs is granted. The credit is not
19    available to any taxpayer if the taxpayer or any related
20    party caused or contributed to, in any material respect, a
21    release of regulated substances on, in, or under the site
22    that was identified and addressed by the remedial action
23    pursuant to the Site Remediation Program of the
24    Environmental Protection Act. After the Pollution Control
25    Board rules are adopted pursuant to the Illinois
26    Administrative Procedure Act for the administration and

 

 

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1    enforcement of Section 58.9 of the Environmental
2    Protection Act, determinations as to credit availability
3    for purposes of this Section shall be made consistent with
4    those rules. For purposes of this Section, "taxpayer"
5    includes a person whose tax attributes the taxpayer has
6    succeeded to under Section 381 of the Internal Revenue Code
7    and "related party" includes the persons disallowed a
8    deduction for losses by paragraphs (b), (c), and (f)(1) of
9    Section 267 of the Internal Revenue Code by virtue of being
10    a related taxpayer, as well as any of its partners. The
11    credit allowed against the tax imposed by subsections (a)
12    and (b) shall be equal to 25% of the unreimbursed eligible
13    remediation costs in excess of $100,000 per site, except
14    that the $100,000 threshold shall not apply to any site
15    contained in an enterprise zone as determined by the
16    Department of Commerce and Community Affairs (now
17    Department of Commerce and Economic Opportunity). The
18    total credit allowed shall not exceed $40,000 per year with
19    a maximum total of $150,000 per site. For partners and
20    shareholders of subchapter S corporations, there shall be
21    allowed a credit under this subsection to be determined in
22    accordance with the determination of income and
23    distributive share of income under Sections 702 and 704 and
24    subchapter S of the Internal Revenue Code.
25        (ii) A credit allowed under this subsection that is
26    unused in the year the credit is earned may be carried

 

 

SB3723- 73 -LRB101 19786 HLH 69297 b

1    forward to each of the 5 taxable years following the year
2    for which the credit is first earned until it is used. The
3    term "unused credit" does not include any amounts of
4    unreimbursed eligible remediation costs in excess of the
5    maximum credit per site authorized under paragraph (i).
6    This credit shall be applied first to the earliest year for
7    which there is a liability. If there is a credit under this
8    subsection from more than one tax year that is available to
9    offset a liability, the earliest credit arising under this
10    subsection shall be applied first. A credit allowed under
11    this subsection may be sold to a buyer as part of a sale of
12    all or part of the remediation site for which the credit
13    was granted. The purchaser of a remediation site and the
14    tax credit shall succeed to the unused credit and remaining
15    carry-forward period of the seller. To perfect the
16    transfer, the assignor shall record the transfer in the
17    chain of title for the site and provide written notice to
18    the Director of the Illinois Department of Revenue of the
19    assignor's intent to sell the remediation site and the
20    amount of the tax credit to be transferred as a portion of
21    the sale. In no event may a credit be transferred to any
22    taxpayer if the taxpayer or a related party would not be
23    eligible under the provisions of subsection (i).
24        (iii) For purposes of this Section, the term "site"
25    shall have the same meaning as under Section 58.2 of the
26    Environmental Protection Act.

 

 

SB3723- 74 -LRB101 19786 HLH 69297 b

1    (m) Education expense credit. Beginning with tax years
2ending after December 31, 1999, a taxpayer who is the custodian
3of one or more qualifying pupils shall be allowed a credit
4against the tax imposed by subsections (a) and (b) of this
5Section for qualified education expenses incurred on behalf of
6the qualifying pupils. The credit shall be equal to 25% of
7qualified education expenses, but in no event may the total
8credit under this subsection claimed by a family that is the
9custodian of qualifying pupils exceed (i) $500 for tax years
10ending prior to December 31, 2017, and (ii) $750 for tax years
11ending on or after December 31, 2017. In no event shall a
12credit under this subsection reduce the taxpayer's liability
13under this Act to less than zero. Notwithstanding any other
14provision of law, for taxable years beginning on or after
15January 1, 2017, no taxpayer may claim a credit under this
16subsection (m) if the taxpayer's adjusted gross income for the
17taxable year exceeds (i) $500,000, in the case of spouses
18filing a joint federal tax return or (ii) $250,000, in the case
19of all other taxpayers. This subsection is exempt from the
20provisions of Section 250 of this Act.
21    For purposes of this subsection:
22    "Qualifying pupils" means individuals who (i) are
23residents of the State of Illinois, (ii) are under the age of
2421 at the close of the school year for which a credit is
25sought, and (iii) during the school year for which a credit is
26sought were full-time pupils enrolled in a kindergarten through

 

 

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1twelfth grade education program at any school, as defined in
2this subsection.
3    "Qualified education expense" means the amount incurred on
4behalf of a qualifying pupil in excess of $250 for tuition,
5book fees, and lab fees at the school in which the pupil is
6enrolled during the regular school year.
7    "School" means any public or nonpublic elementary or
8secondary school in Illinois that is in compliance with Title
9VI of the Civil Rights Act of 1964 and attendance at which
10satisfies the requirements of Section 26-1 of the School Code,
11except that nothing shall be construed to require a child to
12attend any particular public or nonpublic school to qualify for
13the credit under this Section.
14    "Custodian" means, with respect to qualifying pupils, an
15Illinois resident who is a parent, the parents, a legal
16guardian, or the legal guardians of the qualifying pupils.
17    (n) River Edge Redevelopment Zone site remediation tax
18credit.
19        (i) For tax years ending on or after December 31, 2006,
20    a taxpayer shall be allowed a credit against the tax
21    imposed by subsections (a) and (b) of this Section for
22    certain amounts paid for unreimbursed eligible remediation
23    costs, as specified in this subsection. For purposes of
24    this Section, "unreimbursed eligible remediation costs"
25    means costs approved by the Illinois Environmental
26    Protection Agency ("Agency") under Section 58.14a of the

 

 

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1    Environmental Protection Act that were paid in performing
2    environmental remediation at a site within a River Edge
3    Redevelopment Zone for which a No Further Remediation
4    Letter was issued by the Agency and recorded under Section
5    58.10 of the Environmental Protection Act. The credit must
6    be claimed for the taxable year in which Agency approval of
7    the eligible remediation costs is granted. The credit is
8    not available to any taxpayer if the taxpayer or any
9    related party caused or contributed to, in any material
10    respect, a release of regulated substances on, in, or under
11    the site that was identified and addressed by the remedial
12    action pursuant to the Site Remediation Program of the
13    Environmental Protection Act. Determinations as to credit
14    availability for purposes of this Section shall be made
15    consistent with rules adopted by the Pollution Control
16    Board pursuant to the Illinois Administrative Procedure
17    Act for the administration and enforcement of Section 58.9
18    of the Environmental Protection Act. For purposes of this
19    Section, "taxpayer" includes a person whose tax attributes
20    the taxpayer has succeeded to under Section 381 of the
21    Internal Revenue Code and "related party" includes the
22    persons disallowed a deduction for losses by paragraphs
23    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
24    Code by virtue of being a related taxpayer, as well as any
25    of its partners. The credit allowed against the tax imposed
26    by subsections (a) and (b) shall be equal to 25% of the

 

 

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1    unreimbursed eligible remediation costs in excess of
2    $100,000 per site.
3        (ii) A credit allowed under this subsection that is
4    unused in the year the credit is earned may be carried
5    forward to each of the 5 taxable years following the year
6    for which the credit is first earned until it is used. This
7    credit shall be applied first to the earliest year for
8    which there is a liability. If there is a credit under this
9    subsection from more than one tax year that is available to
10    offset a liability, the earliest credit arising under this
11    subsection shall be applied first. A credit allowed under
12    this subsection may be sold to a buyer as part of a sale of
13    all or part of the remediation site for which the credit
14    was granted. The purchaser of a remediation site and the
15    tax credit shall succeed to the unused credit and remaining
16    carry-forward period of the seller. To perfect the
17    transfer, the assignor shall record the transfer in the
18    chain of title for the site and provide written notice to
19    the Director of the Illinois Department of Revenue of the
20    assignor's intent to sell the remediation site and the
21    amount of the tax credit to be transferred as a portion of
22    the sale. In no event may a credit be transferred to any
23    taxpayer if the taxpayer or a related party would not be
24    eligible under the provisions of subsection (i).
25        (iii) For purposes of this Section, the term "site"
26    shall have the same meaning as under Section 58.2 of the

 

 

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1    Environmental Protection Act.
2    (o) For each of taxable years during the Compassionate Use
3of Medical Cannabis Program, a surcharge is imposed on all
4taxpayers on income arising from the sale or exchange of
5capital assets, depreciable business property, real property
6used in the trade or business, and Section 197 intangibles of
7an organization registrant under the Compassionate Use of
8Medical Cannabis Program Act. The amount of the surcharge is
9equal to the amount of federal income tax liability for the
10taxable year attributable to those sales and exchanges. The
11surcharge imposed does not apply if:
12        (1) the medical cannabis cultivation center
13    registration, medical cannabis dispensary registration, or
14    the property of a registration is transferred as a result
15    of any of the following:
16            (A) bankruptcy, a receivership, or a debt
17        adjustment initiated by or against the initial
18        registration or the substantial owners of the initial
19        registration;
20            (B) cancellation, revocation, or termination of
21        any registration by the Illinois Department of Public
22        Health;
23            (C) a determination by the Illinois Department of
24        Public Health that transfer of the registration is in
25        the best interests of Illinois qualifying patients as
26        defined by the Compassionate Use of Medical Cannabis

 

 

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1        Program Act;
2            (D) the death of an owner of the equity interest in
3        a registrant;
4            (E) the acquisition of a controlling interest in
5        the stock or substantially all of the assets of a
6        publicly traded company;
7            (F) a transfer by a parent company to a wholly
8        owned subsidiary; or
9            (G) the transfer or sale to or by one person to
10        another person where both persons were initial owners
11        of the registration when the registration was issued;
12        or
13        (2) the cannabis cultivation center registration,
14    medical cannabis dispensary registration, or the
15    controlling interest in a registrant's property is
16    transferred in a transaction to lineal descendants in which
17    no gain or loss is recognized or as a result of a
18    transaction in accordance with Section 351 of the Internal
19    Revenue Code in which no gain or loss is recognized.
20(Source: P.A. 100-22, eff. 7-6-17; 101-8, see Section 99 for
21effective date; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
22101-207, eff. 8-2-19; 101-363, eff. 8-9-19; revised 9-17-19.)
 
23    Section 95. No acceleration or delay. Where this Act makes
24changes in a statute that is represented in this Act by text
25that is not yet or no longer in effect (for example, a Section

 

 

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1represented by multiple versions), the use of that text does
2not accelerate or delay the taking effect of (i) the changes
3made by this Act or (ii) provisions derived from any other
4Public Act.
 
5    Section 99. Effective date. This Act takes effect upon
6becoming law.