102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB2560

 

Introduced 2/26/2021, by Sen. Melinda Bush

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/201

    Amends the Illinois Income Tax Act. Provides that the research and development credit applies on a permanent basis. Provides that the credit may be carried forward for a period of 20 taxable years (currently, 5 taxable years). Makes changes concerning the calculation of the credit. Effective immediately.


LRB102 17265 HLH 22737 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB2560LRB102 17265 HLH 22737 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 without the changes made by P.A. 101-8,
8which did not take effect (see Section 99 of P.A. 101-8))
9    Sec. 201. Tax imposed.
10    (a) In general. A tax measured by net income is hereby
11imposed on every individual, corporation, trust and estate for
12each taxable year ending after July 31, 1969 on the privilege
13of earning or receiving income in or as a resident of this
14State. Such tax shall be in addition to all other occupation or
15privilege taxes imposed by this State or by any municipal
16corporation or political subdivision thereof.
17    (b) Rates. The tax imposed by subsection (a) of this
18Section shall be determined as follows, except as adjusted by
19subsection (d-1):
20        (1) In the case of an individual, trust or estate, for
21    taxable years ending prior to July 1, 1989, an amount
22    equal to 2 1/2% of the taxpayer's net income for the
23    taxable year.

 

 

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

 

 

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

 

 

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

 

 

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1    beginning on or after January 1, 2015, and ending prior to
2    July 1, 2017, an amount equal to 5.25% of the taxpayer's
3    net income for the taxable year.
4        (13) In the case of a corporation, for taxable years
5    beginning prior to July 1, 2017, and ending after June 30,
6    2017, an amount equal to the sum of (i) 5.25% of the
7    taxpayer's net income for the period prior to July 1,
8    2017, as calculated under Section 202.5, and (ii) 7% of
9    the taxpayer's net income for the period after June 30,
10    2017, as calculated under Section 202.5.
11        (14) In the case of a corporation, for taxable years
12    beginning on or after July 1, 2017, an amount equal to 7%
13    of the taxpayer's net income for the taxable year.
14    The rates under this subsection (b) are subject to the
15provisions of Section 201.5.
16    (b-5) Surcharge; sale or exchange of assets, properties,
17and intangibles of organization gaming licensees. For each of
18taxable years 2019 through 2027, 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 (i)
22of an organization licensee under the Illinois Horse Racing
23Act of 1975 and (ii) of an organization gaming licensee under
24the Illinois Gambling Act. The amount of the surcharge is
25equal to the amount of federal income tax liability for the
26taxable year attributable to those sales and exchanges. The

 

 

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1surcharge imposed shall not apply if:
2        (1) the organization gaming license, organization
3    license, or racetrack property 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        licensee or the substantial owners of the initial
8        licensee;
9            (B) cancellation, revocation, or termination of
10        any such license by the Illinois Gaming Board or the
11        Illinois Racing Board;
12            (C) a determination by the Illinois Gaming Board
13        that transfer of the license is in the best interests
14        of Illinois gaming;
15            (D) the death of an owner of the equity interest in
16        a licensee;
17            (E) the acquisition of a controlling interest in
18        the stock or substantially all of the assets of a
19        publicly traded company;
20            (F) a transfer by a parent company to a wholly
21        owned subsidiary; or
22            (G) the transfer or sale to or by one person to
23        another person where both persons were initial owners
24        of the license when the license was issued; or
25        (2) the controlling interest in the organization
26    gaming license, organization license, or racetrack

 

 

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

 

 

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1privilege taxes imposed by this State or by any municipal
2corporation or political subdivision thereof.
3    (d) Additional Personal Property Tax Replacement Income
4Tax Rates. The personal property tax replacement income tax
5imposed by this subsection and subsection (c) of this Section
6in the case of a corporation, other than a Subchapter S
7corporation and except as adjusted by subsection (d-1), shall
8be an additional amount equal to 2.85% of such taxpayer's net
9income for the taxable year, except that beginning on January
101, 1981, and thereafter, the rate of 2.85% specified in this
11subsection shall be reduced to 2.5%, and in the case of a
12partnership, trust or a Subchapter S corporation shall be an
13additional amount equal to 1.5% of such taxpayer's net income
14for the taxable year.
15    (d-1) Rate reduction for certain foreign insurers. In the
16case of a foreign insurer, as defined by Section 35A-5 of the
17Illinois Insurance Code, whose state or country of domicile
18imposes on insurers domiciled in Illinois a retaliatory tax
19(excluding any insurer whose premiums from reinsurance assumed
20are 50% or more of its total insurance premiums as determined
21under paragraph (2) of subsection (b) of Section 304, except
22that for purposes of this determination premiums from
23reinsurance do not include premiums from inter-affiliate
24reinsurance arrangements), beginning with taxable years ending
25on or after December 31, 1999, the sum of the rates of tax
26imposed by subsections (b) and (d) shall be reduced (but not

 

 

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

 

 

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1    December 31, 2003, of the net taxable premiums written for
2    the taxable year, as described by subsection (1) of
3    Section 409 of the Illinois Insurance Code. This paragraph
4    will in no event increase the rates imposed under
5    subsections (b) and (d).
6        (2) Any reduction in the rates of tax imposed by this
7    subsection shall be applied first against the rates
8    imposed by subsection (b) and only after the tax imposed
9    by subsection (a) net of all credits allowed under this
10    Section other than the credit allowed under subsection (i)
11    has been reduced to zero, against the rates imposed by
12    subsection (d).
13    This subsection (d-1) is exempt from the provisions of
14Section 250.
15    (e) Investment credit. A taxpayer shall be allowed a
16credit against the Personal Property Tax Replacement Income
17Tax for investment in qualified property.
18        (1) A taxpayer shall be allowed a credit equal to .5%
19    of the basis of qualified property placed in service
20    during the taxable year, provided such property is placed
21    in service on or after July 1, 1984. There shall be allowed
22    an additional credit equal to .5% of the basis of
23    qualified property placed in service during the taxable
24    year, provided such property is placed in service on or
25    after July 1, 1986, and the taxpayer's base employment
26    within Illinois has increased by 1% or more over the

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

SB2560- 18 -LRB102 17265 HLH 22737 b

1    placed in service, or, if the amount of the credit exceeds
2    the tax liability for that year, whether it exceeds the
3    original liability or the liability as later amended, such
4    excess may be carried forward and applied to the tax
5    liability of the 5 taxable years following the excess
6    credit year. The credit shall be applied to the earliest
7    year for which there is a liability. If there is credit
8    from more than one tax year that is available to offset a
9    liability, the credit accruing first in time shall be
10    applied first.
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        (f);
19            (C) is acquired by purchase as defined in Section
20        179(d) of the Internal Revenue Code;
21            (D) is used in the Enterprise Zone or River Edge
22        Redevelopment Zone by the taxpayer; and
23            (E) has not been previously used in Illinois in
24        such a manner and by such a person as would qualify for
25        the credit provided by this subsection (f) or
26        subsection (e).

 

 

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

 

 

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1    from a redetermination of the purchase price shall be
2    deemed a disposition of qualified property to the extent
3    of such reduction.
4        (7) There shall be allowed an additional credit equal
5    to 0.5% of the basis of qualified property placed in
6    service during the taxable year in a River Edge
7    Redevelopment Zone, provided such property is placed in
8    service on or after July 1, 2006, and the taxpayer's base
9    employment within Illinois has increased by 1% or more
10    over the preceding year as determined by the taxpayer's
11    employment records filed with the Illinois Department of
12    Employment Security. Taxpayers who are new to Illinois
13    shall be deemed to have met the 1% growth in base
14    employment for the first year in which they file
15    employment records with the Illinois Department of
16    Employment Security. If, in any year, the increase in base
17    employment within Illinois over the preceding year is less
18    than 1%, the additional credit shall be limited to that
19    percentage times a fraction, the numerator of which is
20    0.5% and the denominator of which is 1%, but shall not
21    exceed 0.5%.
22        (8) For taxable years beginning on or after January 1,
23    2021, there shall be allowed an Enterprise Zone
24    construction jobs credit against the taxes imposed under
25    subsections (a) and (b) of this Section as provided in
26    Section 13 of the Illinois Enterprise Zone Act.

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    such property was originally allowed by eliminating such
2    property from such computation, and (ii) subtracting such
3    recomputed credit from the amount of credit previously
4    allowed. For the purposes of this paragraph (6), a
5    reduction of the basis of qualified property resulting
6    from a redetermination of the purchase price shall be
7    deemed a disposition of qualified property to the extent
8    of such reduction.
9        (7) Beginning with tax years ending after December 31,
10    1996, if a taxpayer qualifies for the credit under this
11    subsection (h) and thereby is granted a tax abatement and
12    the taxpayer relocates its entire facility in violation of
13    the explicit terms and length of the contract under
14    Section 18-183 of the Property Tax Code, the tax imposed
15    under subsections (a) and (b) of this Section shall be
16    increased for the taxable year in which the taxpayer
17    relocated its facility by an amount equal to the amount of
18    credit received by the taxpayer under this subsection (h).
19    (h-5) High Impact Business construction constructions jobs
20credit. For taxable years beginning on or after January 1,
212021, there shall also be allowed a High Impact Business
22construction jobs credit against the tax imposed under
23subsections (a) and (b) of this Section as provided in
24subsections (i) and (j) of Section 5.5 of the Illinois
25Enterprise Zone Act.
26    The credit or credits may not reduce the taxpayer's

 

 

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1liability to less than zero. If the amount of the credit or
2credits exceeds the taxpayer's liability, the excess may be
3carried forward and applied against the taxpayer's liability
4in succeeding calendar years in the manner provided under
5paragraph (4) of Section 211 of this Act. The credit or credits
6shall be applied to the earliest year for which there is a tax
7liability. If there are credits from more than one taxable
8year that are available to offset a liability, the earlier
9credit shall be applied first.
10    For partners, shareholders of Subchapter S corporations,
11and owners of limited liability companies, if the liability
12company is treated as a partnership for the purposes of
13federal and State income taxation, there shall be allowed a
14credit under this Section to be determined in accordance with
15the determination of income and distributive share of income
16under Sections 702 and 704 and Subchapter S of the Internal
17Revenue Code.
18    The total aggregate amount of credits awarded under the
19Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
20amendatory Act of the 101st General Assembly) shall not exceed
21$20,000,000 in any State fiscal year.
22    This subsection (h-5) is exempt from the provisions of
23Section 250.
24    (i) Credit for Personal Property Tax Replacement Income
25Tax. For tax years ending prior to December 31, 2003, a credit
26shall be allowed against the tax imposed by subsections (a)

 

 

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1and (b) of this Section for the tax imposed by subsections (c)
2and (d) of this Section. This credit shall be computed by
3multiplying the tax imposed by subsections (c) and (d) of this
4Section by a fraction, the numerator of which is base income
5allocable to Illinois and the denominator of which is Illinois
6base income, and further multiplying the product by the tax
7rate imposed by subsections (a) and (b) of this Section.
8    Any credit earned on or after December 31, 1986 under this
9subsection which is unused in the year the credit is computed
10because it exceeds the tax liability imposed by subsections
11(a) and (b) for that year (whether it exceeds the original
12liability or the liability as later amended) may be carried
13forward and applied to the tax liability imposed by
14subsections (a) and (b) of the 5 taxable years following the
15excess credit year, provided that no credit may be carried
16forward to any year ending on or after December 31, 2003. This
17credit shall be applied first to the earliest year for which
18there is a liability. If there is a credit under this
19subsection from more than one tax year that is available to
20offset a liability the earliest credit arising under this
21subsection shall be applied first.
22    If, during any taxable year ending on or after December
2331, 1986, the tax imposed by subsections (c) and (d) of this
24Section for which a taxpayer has claimed a credit under this
25subsection (i) is reduced, the amount of credit for such tax
26shall also be reduced. Such reduction shall be determined by

 

 

SB2560- 28 -LRB102 17265 HLH 22737 b

1recomputing the credit to take into account the reduced tax
2imposed by subsections (c) and (d). If any portion of the
3reduced amount of credit has been carried to a different
4taxable year, an amended return shall be filed for such
5taxable year to reduce the amount of credit claimed.
6    (j) Training expense credit. Beginning with tax years
7ending on or after December 31, 1986 and prior to December 31,
82003, a taxpayer shall be allowed a credit against the tax
9imposed by subsections (a) and (b) under this Section for all
10amounts paid or accrued, on behalf of all persons employed by
11the taxpayer in Illinois or Illinois residents employed
12outside of Illinois by a taxpayer, for educational or
13vocational training in semi-technical or technical fields or
14semi-skilled or skilled fields, which were deducted from gross
15income in the computation of taxable income. The credit
16against the tax imposed by subsections (a) and (b) shall be
171.6% of such training expenses. For partners, shareholders of
18subchapter S corporations, and owners of limited liability
19companies, if the liability company is treated as a
20partnership for purposes of federal and State income taxation,
21there shall be allowed a credit under this subsection (j) to be
22determined in accordance with the determination of income and
23distributive share of income under Sections 702 and 704 and
24subchapter S of the Internal Revenue Code.
25    Any credit allowed under this subsection which is unused
26in the year the credit is earned may be carried forward to each

 

 

SB2560- 29 -LRB102 17265 HLH 22737 b

1of the 5 taxable years following the year for which the credit
2is first computed until it is used. This credit shall be
3applied first to the earliest year for which there is a
4liability. If there is a credit under this subsection from
5more than one tax year that is available to offset a liability,
6the earliest credit arising under this subsection shall be
7applied first. No carryforward credit may be claimed in any
8tax year ending on or after December 31, 2003.
9    (k) Research and development credit. For tax years ending
10after July 1, 1990 and prior to December 31, 2003, and
11beginning again for tax years ending on or after December 31,
122004, and ending prior to January 1, 2027, a taxpayer shall be
13allowed a credit against the tax imposed by subsections (a)
14and (b) of this Section for increasing research activities in
15this State. The credit allowed against the tax imposed by
16subsections (a) and (b) shall be equal to 6 1/2% of the
17qualifying expenditures for increasing research activities in
18this State. For partners, shareholders of subchapter S
19corporations, and owners of limited liability companies, if
20the liability company is treated as a partnership for purposes
21of federal and State income taxation, there shall be allowed a
22credit under this subsection to be determined in accordance
23with the determination of income and distributive share of
24income under Sections 702 and 704 and subchapter S of the
25Internal Revenue Code.
26    For purposes of this subsection, "qualifying expenditures"

 

 

SB2560- 30 -LRB102 17265 HLH 22737 b

1means the qualifying expenditures as defined for the federal
2credit for increasing research activities which would be
3allowable under Section 41 of the Internal Revenue Code and
4which are conducted in this State, "qualifying expenditures
5for increasing research activities in this State" means the
6excess of qualifying expenditures for the taxable year in
7which incurred over qualifying expenditures for the base
8period, "qualifying expenditures for the base period" means:
9for tax years ending prior to December 31, 2021, the average of
10the qualifying expenditures for each year in the base period;
11and (2) for tax years ending on or after December 31, 2021, 50%
12of the average of the qualifying expenditures for each year in
13the base period. "Base , and "base period" means the 3 taxable
14years immediately preceding the taxable year for which the
15determination is being made.
16    Any credit in excess of the tax liability for the taxable
17year may be carried forward. A taxpayer may elect to have the
18unused credit shown on its final completed return carried over
19as a credit against the tax liability for the carry forward
20period following 5 taxable years or until it has been fully
21used, whichever occurs first; provided that no credit earned
22in a tax year ending prior to December 31, 2003 may be carried
23forward to any year ending on or after December 31, 2003. For
24purposes of this subsection, "carry forward period" means (i)
25for credits earned prior to the effective date of this
26amendatory Act of the 102nd General Assembly, the following 5

 

 

SB2560- 31 -LRB102 17265 HLH 22737 b

1taxable years or until the credit has been fully used,
2whichever occurs first, and (ii) for credits earned on or
3after the effective date of this amendatory Act of the 102nd
4General Assembly, the following 20 taxable years or until the
5credit has been fully used, whichever occurs first.
6    If an unused credit is carried forward to a given year from
72 or more earlier years, that credit arising in the earliest
8year will be applied first against the tax liability for the
9given year. If a tax liability for the given year still
10remains, the credit from the next earliest year will then be
11applied, and so on, until all credits have been used or no tax
12liability for the given year remains. Any remaining unused
13credit or credits then will be carried forward to the next
14following year in which a tax liability is incurred, except
15that no credit can be carried forward to a year which is more
16than 5 years after the year in which the expense for which the
17credit is given was incurred.
18    No inference shall be drawn from Public Act 91-644 this
19amendatory Act of the 91st General Assembly in construing this
20Section for taxable years beginning before January 1, 1999.
21    It is the intent of the General Assembly that the research
22and development credit under this subsection (k) shall apply
23continuously for all tax years ending on or after December 31,
242004 and ending prior to January 1, 2027, including, but not
25limited to, the period beginning on January 1, 2016 and ending
26on July 6, 2017 (the effective date of Public Act 100-22) this

 

 

SB2560- 32 -LRB102 17265 HLH 22737 b

1amendatory Act of the 100th General Assembly. All actions
2taken in reliance on the continuation of the credit under this
3subsection (k) by any taxpayer are hereby validated.
4    This subsection is exempt from the provisions of Section
5250 of this Act.
6    (l) Environmental Remediation Tax Credit.
7        (i) For tax years ending after December 31, 1997 and
8    on or before December 31, 2001, a taxpayer shall be
9    allowed a credit against the tax imposed by subsections
10    (a) and (b) of this Section for certain amounts paid for
11    unreimbursed eligible remediation costs, as specified in
12    this subsection. For purposes of this Section,
13    "unreimbursed eligible remediation costs" means costs
14    approved by the Illinois Environmental Protection Agency
15    ("Agency") under Section 58.14 of the Environmental
16    Protection Act that were paid in performing environmental
17    remediation at a site for which a No Further Remediation
18    Letter was issued by the Agency and recorded under Section
19    58.10 of the Environmental Protection Act. The credit must
20    be claimed for the taxable year in which Agency approval
21    of the eligible remediation costs is granted. The credit
22    is not available to any taxpayer if the taxpayer or any
23    related party caused or contributed to, in any material
24    respect, a release of regulated substances on, in, or
25    under the site that was identified and addressed by the
26    remedial action pursuant to the Site Remediation Program

 

 

SB2560- 33 -LRB102 17265 HLH 22737 b

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

 

 

SB2560- 34 -LRB102 17265 HLH 22737 b

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

 

 

SB2560- 35 -LRB102 17265 HLH 22737 b

1    of subsection (i).
2        (iii) For purposes of this Section, the term "site"
3    shall have the same meaning as under Section 58.2 of the
4    Environmental Protection Act.
5    (m) Education expense credit. Beginning with tax years
6ending after December 31, 1999, a taxpayer who is the
7custodian of one or more qualifying pupils shall be allowed a
8credit against the tax imposed by subsections (a) and (b) of
9this Section for qualified education expenses incurred on
10behalf of the qualifying pupils. The credit shall be equal to
1125% of qualified education expenses, but in no event may the
12total credit under this subsection claimed by a family that is
13the custodian of qualifying pupils exceed (i) $500 for tax
14years ending prior to December 31, 2017, and (ii) $750 for tax
15years ending on or after December 31, 2017. In no event shall a
16credit under this subsection reduce the taxpayer's liability
17under this Act to less than zero. Notwithstanding any other
18provision of law, for taxable years beginning on or after
19January 1, 2017, no taxpayer may claim a credit under this
20subsection (m) if the taxpayer's adjusted gross income for the
21taxable year exceeds (i) $500,000, in the case of spouses
22filing a joint federal tax return or (ii) $250,000, in the case
23of all other taxpayers. This subsection is exempt from the
24provisions of Section 250 of this Act.
25    For purposes of this subsection:
26    "Qualifying pupils" means individuals who (i) are

 

 

SB2560- 36 -LRB102 17265 HLH 22737 b

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

 

 

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

 

 

SB2560- 38 -LRB102 17265 HLH 22737 b

1    losses by paragraphs (b), (c), and (f)(1) of Section 267
2    of the Internal Revenue Code by virtue of being a related
3    taxpayer, as well as any of its partners. The credit
4    allowed against the tax imposed by subsections (a) and (b)
5    shall be equal to 25% of the unreimbursed eligible
6    remediation costs in excess of $100,000 per site.
7        (ii) A credit allowed under this subsection that is
8    unused in the year the credit is earned may be carried
9    forward to each of the 5 taxable years following the year
10    for which the credit is first earned until it is used. This
11    credit shall be applied first to the earliest year for
12    which there is a liability. If there is a credit under this
13    subsection from more than one tax year that is available
14    to offset a liability, the earliest credit arising under
15    this subsection shall be applied first. A credit allowed
16    under this subsection may be sold to a buyer as part of a
17    sale of all or part of the remediation site for which the
18    credit was granted. The purchaser of a remediation site
19    and the tax credit shall succeed to the unused credit and
20    remaining carry-forward period of the seller. To perfect
21    the transfer, the assignor shall record the transfer in
22    the chain of title for the site and provide written notice
23    to the Director of the Illinois Department of Revenue of
24    the assignor's intent to sell the remediation site and the
25    amount of the tax credit to be transferred as a portion of
26    the sale. In no event may a credit be transferred to any

 

 

SB2560- 39 -LRB102 17265 HLH 22737 b

1    taxpayer if the taxpayer or a related party would not be
2    eligible under the provisions of subsection (i).
3        (iii) For purposes of this Section, the term "site"
4    shall have the same meaning as under Section 58.2 of the
5    Environmental Protection Act.
6    (o) For each of taxable years during the Compassionate Use
7of Medical Cannabis Program, a surcharge is imposed on all
8taxpayers on income arising from the sale or exchange of
9capital assets, depreciable business property, real property
10used in the trade or business, and Section 197 intangibles of
11an organization registrant under the Compassionate Use of
12Medical Cannabis Program Act. The amount of the surcharge is
13equal to the amount of federal income tax liability for the
14taxable year attributable to those sales and exchanges. The
15surcharge imposed does not apply if:
16        (1) the medical cannabis cultivation center
17    registration, medical cannabis dispensary registration, or
18    the property of a registration is transferred as a result
19    of any of the following:
20            (A) bankruptcy, a receivership, or a debt
21        adjustment initiated by or against the initial
22        registration or the substantial owners of the initial
23        registration;
24            (B) cancellation, revocation, or termination of
25        any registration by the Illinois Department of Public
26        Health;

 

 

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1            (C) a determination by the Illinois Department of
2        Public Health that transfer of the registration is in
3        the best interests of Illinois qualifying patients as
4        defined by the Compassionate Use of Medical Cannabis
5        Program Act;
6            (D) the death of an owner of the equity interest in
7        a registrant;
8            (E) the acquisition of a controlling interest in
9        the stock or substantially all of the assets of a
10        publicly traded company;
11            (F) a transfer by a parent company to a wholly
12        owned subsidiary; or
13            (G) the transfer or sale to or by one person to
14        another person where both persons were initial owners
15        of the registration when the registration was issued;
16        or
17        (2) the cannabis cultivation center registration,
18    medical cannabis dispensary registration, or the
19    controlling interest in a registrant's property is
20    transferred in a transaction to lineal descendants in
21    which no gain or loss is recognized or as a result of a
22    transaction in accordance with Section 351 of the Internal
23    Revenue Code in which no gain or loss is recognized.
24(Source: P.A. 100-22, eff. 7-6-17; 101-9, eff. 6-5-19; 101-31,
25eff. 6-28-19; 101-207, eff. 8-2-19; 101-363, eff. 8-9-19;
26revised 11-18-20.)
 

 

 

SB2560- 41 -LRB102 17265 HLH 22737 b

1    (Text of Section with the changes made by P.A. 101-8,
2which did not take effect (see Section 99 of P.A. 101-8))
3    Sec. 201. Tax imposed.
4    (a) In general. A tax measured by net income is hereby
5imposed on every individual, corporation, trust and estate for
6each taxable year ending after July 31, 1969 on the privilege
7of earning or receiving income in or as a resident of this
8State. Such tax shall be in addition to all other occupation or
9privilege taxes imposed by this State or by any municipal
10corporation or political subdivision thereof.
11    (b) Rates. The tax imposed by subsection (a) of this
12Section shall be determined as follows, except as adjusted by
13subsection (d-1):
14        (1) In the case of an individual, trust or estate, for
15    taxable years ending prior to July 1, 1989, an amount
16    equal to 2 1/2% of the taxpayer's net income for the
17    taxable year.
18        (2) In the case of an individual, trust or estate, for
19    taxable years beginning prior to July 1, 1989 and ending
20    after June 30, 1989, an amount equal to the sum of (i) 2
21    1/2% of the taxpayer's net income for the period prior to
22    July 1, 1989, as calculated under Section 202.3, and (ii)
23    3% of the taxpayer's net income for the period after June
24    30, 1989, as calculated under Section 202.3.
25        (3) In the case of an individual, trust or estate, for

 

 

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1    taxable years beginning after June 30, 1989, and ending
2    prior to January 1, 2011, an amount equal to 3% of the
3    taxpayer's net income for the taxable year.
4        (4) In the case of an individual, trust, or estate,
5    for taxable years beginning prior to January 1, 2011, and
6    ending after December 31, 2010, an amount equal to the sum
7    of (i) 3% of the taxpayer's net income for the period prior
8    to January 1, 2011, as calculated under Section 202.5, and
9    (ii) 5% of the taxpayer's net income for the period after
10    December 31, 2010, as calculated under Section 202.5.
11        (5) In the case of an individual, trust, or estate,
12    for taxable years beginning on or after January 1, 2011,
13    and ending prior to January 1, 2015, an amount equal to 5%
14    of the taxpayer's net income for the taxable year.
15        (5.1) In the case of an individual, trust, or estate,
16    for taxable years beginning prior to January 1, 2015, and
17    ending after December 31, 2014, an amount equal to the sum
18    of (i) 5% of the taxpayer's net income for the period prior
19    to January 1, 2015, as calculated under Section 202.5, and
20    (ii) 3.75% of the taxpayer's net income for the period
21    after December 31, 2014, as calculated under Section
22    202.5.
23        (5.2) In the case of an individual, trust, or estate,
24    for taxable years beginning on or after January 1, 2015,
25    and ending prior to July 1, 2017, an amount equal to 3.75%
26    of the taxpayer's net income for the taxable year.

 

 

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1        (5.3) In the case of an individual, trust, or estate,
2    for taxable years beginning prior to July 1, 2017, and
3    ending after June 30, 2017, an amount equal to the sum of
4    (i) 3.75% of the taxpayer's net income for the period
5    prior to July 1, 2017, as calculated under Section 202.5,
6    and (ii) 4.95% of the taxpayer's net income for the period
7    after June 30, 2017, as calculated under Section 202.5.
8        (5.4) In the case of an individual, trust, or estate,
9    for taxable years beginning on or after July 1, 2017 and
10    beginning prior to January 1, 2021, an amount equal to
11    4.95% of the taxpayer's net income for the taxable year.
12        (5.5) In the case of an individual, trust, or estate,
13    for taxable years beginning on or after January 1, 2021,
14    an amount calculated under the rate structure set forth in
15    Section 201.1.
16        (6) In the case of a corporation, for taxable years
17    ending prior to July 1, 1989, an amount equal to 4% of the
18    taxpayer's net income for the taxable year.
19        (7) In the case of a corporation, for taxable years
20    beginning prior to July 1, 1989 and ending after June 30,
21    1989, an amount equal to the sum of (i) 4% of the
22    taxpayer's net income for the period prior to July 1,
23    1989, as calculated under Section 202.3, and (ii) 4.8% of
24    the taxpayer's net income for the period after June 30,
25    1989, as calculated under Section 202.3.
26        (8) In the case of a corporation, for taxable years

 

 

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

 

 

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1    beginning prior to July 1, 2017, and ending after June 30,
2    2017, an amount equal to the sum of (i) 5.25% of the
3    taxpayer's net income for the period prior to July 1,
4    2017, as calculated under Section 202.5, and (ii) 7% of
5    the taxpayer's net income for the period after June 30,
6    2017, as calculated under Section 202.5.
7        (14) In the case of a corporation, for taxable years
8    beginning on or after July 1, 2017 and beginning prior to
9    January 1, 2021, an amount equal to 7% of the taxpayer's
10    net income for the taxable year.
11        (15) In the case of a corporation, for taxable years
12    beginning on or after January 1, 2021, an amount equal to
13    7.99% of the taxpayer's net income for the taxable year.
14    The rates under this subsection (b) are subject to the
15provisions of Section 201.5.
16    (b-5) Surcharge; sale or exchange of assets, properties,
17and intangibles of organization gaming licensees. For each of
18taxable years 2019 through 2027, 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 (i)
22of an organization licensee under the Illinois Horse Racing
23Act of 1975 and (ii) of an organization gaming licensee under
24the Illinois Gambling Act. The amount of the surcharge is
25equal to the amount of federal income tax liability for the
26taxable year attributable to those sales and exchanges. The

 

 

SB2560- 46 -LRB102 17265 HLH 22737 b

1surcharge imposed shall not apply if:
2        (1) the organization gaming license, organization
3    license, or racetrack property 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        licensee or the substantial owners of the initial
8        licensee;
9            (B) cancellation, revocation, or termination of
10        any such license by the Illinois Gaming Board or the
11        Illinois Racing Board;
12            (C) a determination by the Illinois Gaming Board
13        that transfer of the license is in the best interests
14        of Illinois gaming;
15            (D) the death of an owner of the equity interest in
16        a licensee;
17            (E) the acquisition of a controlling interest in
18        the stock or substantially all of the assets of a
19        publicly traded company;
20            (F) a transfer by a parent company to a wholly
21        owned subsidiary; or
22            (G) the transfer or sale to or by one person to
23        another person where both persons were initial owners
24        of the license when the license was issued; or
25        (2) the controlling interest in the organization
26    gaming license, organization license, or racetrack

 

 

SB2560- 47 -LRB102 17265 HLH 22737 b

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

 

 

SB2560- 48 -LRB102 17265 HLH 22737 b

1privilege taxes imposed by this State or by any municipal
2corporation or political subdivision thereof.
3    (d) Additional Personal Property Tax Replacement Income
4Tax Rates. The personal property tax replacement income tax
5imposed by this subsection and subsection (c) of this Section
6in the case of a corporation, other than a Subchapter S
7corporation and except as adjusted by subsection (d-1), shall
8be an additional amount equal to 2.85% of such taxpayer's net
9income for the taxable year, except that beginning on January
101, 1981, and thereafter, the rate of 2.85% specified in this
11subsection shall be reduced to 2.5%, and in the case of a
12partnership, trust or a Subchapter S corporation shall be an
13additional amount equal to 1.5% of such taxpayer's net income
14for the taxable year.
15    (d-1) Rate reduction for certain foreign insurers. In the
16case of a foreign insurer, as defined by Section 35A-5 of the
17Illinois Insurance Code, whose state or country of domicile
18imposes on insurers domiciled in Illinois a retaliatory tax
19(excluding any insurer whose premiums from reinsurance assumed
20are 50% or more of its total insurance premiums as determined
21under paragraph (2) of subsection (b) of Section 304, except
22that for purposes of this determination premiums from
23reinsurance do not include premiums from inter-affiliate
24reinsurance arrangements), beginning with taxable years ending
25on or after December 31, 1999, the sum of the rates of tax
26imposed by subsections (b) and (d) shall be reduced (but not

 

 

SB2560- 49 -LRB102 17265 HLH 22737 b

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

 

 

SB2560- 50 -LRB102 17265 HLH 22737 b

1    December 31, 2003, of the net taxable premiums written for
2    the taxable year, as described by subsection (1) of
3    Section 409 of the Illinois Insurance Code. This paragraph
4    will in no event increase the rates imposed under
5    subsections (b) and (d).
6        (2) Any reduction in the rates of tax imposed by this
7    subsection shall be applied first against the rates
8    imposed by subsection (b) and only after the tax imposed
9    by subsection (a) net of all credits allowed under this
10    Section other than the credit allowed under subsection (i)
11    has been reduced to zero, against the rates imposed by
12    subsection (d).
13    This subsection (d-1) is exempt from the provisions of
14Section 250.
15    (e) Investment credit. A taxpayer shall be allowed a
16credit against the Personal Property Tax Replacement Income
17Tax for investment in qualified property.
18        (1) A taxpayer shall be allowed a credit equal to .5%
19    of the basis of qualified property placed in service
20    during the taxable year, provided such property is placed
21    in service on or after July 1, 1984. There shall be allowed
22    an additional credit equal to .5% of the basis of
23    qualified property placed in service during the taxable
24    year, provided such property is placed in service on or
25    after July 1, 1986, and the taxpayer's base employment
26    within Illinois has increased by 1% or more over the

 

 

SB2560- 51 -LRB102 17265 HLH 22737 b

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

 

 

SB2560- 52 -LRB102 17265 HLH 22737 b

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

 

 

SB2560- 53 -LRB102 17265 HLH 22737 b

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

 

 

SB2560- 54 -LRB102 17265 HLH 22737 b

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

 

 

SB2560- 55 -LRB102 17265 HLH 22737 b

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

 

 

SB2560- 56 -LRB102 17265 HLH 22737 b

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

 

 

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

 

 

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1    placed in service, or, if the amount of the credit exceeds
2    the tax liability for that year, whether it exceeds the
3    original liability or the liability as later amended, such
4    excess may be carried forward and applied to the tax
5    liability of the 5 taxable years following the excess
6    credit year. The credit shall be applied to the earliest
7    year for which there is a liability. If there is credit
8    from more than one tax year that is available to offset a
9    liability, the credit accruing first in time shall be
10    applied first.
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        (f);
19            (C) is acquired by purchase as defined in Section
20        179(d) of the Internal Revenue Code;
21            (D) is used in the Enterprise Zone or River Edge
22        Redevelopment Zone by the taxpayer; and
23            (E) has not been previously used in Illinois in
24        such a manner and by such a person as would qualify for
25        the credit provided by this subsection (f) or
26        subsection (e).

 

 

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

 

 

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1    from a redetermination of the purchase price shall be
2    deemed a disposition of qualified property to the extent
3    of such reduction.
4        (7) There shall be allowed an additional credit equal
5    to 0.5% of the basis of qualified property placed in
6    service during the taxable year in a River Edge
7    Redevelopment Zone, provided such property is placed in
8    service on or after July 1, 2006, and the taxpayer's base
9    employment within Illinois has increased by 1% or more
10    over the preceding year as determined by the taxpayer's
11    employment records filed with the Illinois Department of
12    Employment Security. Taxpayers who are new to Illinois
13    shall be deemed to have met the 1% growth in base
14    employment for the first year in which they file
15    employment records with the Illinois Department of
16    Employment Security. If, in any year, the increase in base
17    employment within Illinois over the preceding year is less
18    than 1%, the additional credit shall be limited to that
19    percentage times a fraction, the numerator of which is
20    0.5% and the denominator of which is 1%, but shall not
21    exceed 0.5%.
22        (8) For taxable years beginning on or after January 1,
23    2021, there shall be allowed an Enterprise Zone
24    construction jobs credit against the taxes imposed under
25    subsections (a) and (b) of this Section as provided in
26    Section 13 of the Illinois Enterprise Zone Act.

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    such property was originally allowed by eliminating such
2    property from such computation, and (ii) subtracting such
3    recomputed credit from the amount of credit previously
4    allowed. For the purposes of this paragraph (6), a
5    reduction of the basis of qualified property resulting
6    from a redetermination of the purchase price shall be
7    deemed a disposition of qualified property to the extent
8    of such reduction.
9        (7) Beginning with tax years ending after December 31,
10    1996, if a taxpayer qualifies for the credit under this
11    subsection (h) and thereby is granted a tax abatement and
12    the taxpayer relocates its entire facility in violation of
13    the explicit terms and length of the contract under
14    Section 18-183 of the Property Tax Code, the tax imposed
15    under subsections (a) and (b) of this Section shall be
16    increased for the taxable year in which the taxpayer
17    relocated its facility by an amount equal to the amount of
18    credit received by the taxpayer under this subsection (h).
19    (h-5) High Impact Business construction constructions jobs
20credit. For taxable years beginning on or after January 1,
212021, there shall also be allowed a High Impact Business
22construction jobs credit against the tax imposed under
23subsections (a) and (b) of this Section as provided in
24subsections (i) and (j) of Section 5.5 of the Illinois
25Enterprise Zone Act.
26    The credit or credits may not reduce the taxpayer's

 

 

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1liability to less than zero. If the amount of the credit or
2credits exceeds the taxpayer's liability, the excess may be
3carried forward and applied against the taxpayer's liability
4in succeeding calendar years in the manner provided under
5paragraph (4) of Section 211 of this Act. The credit or credits
6shall be applied to the earliest year for which there is a tax
7liability. If there are credits from more than one taxable
8year that are available to offset a liability, the earlier
9credit shall be applied first.
10    For partners, shareholders of Subchapter S corporations,
11and owners of limited liability companies, if the liability
12company is treated as a partnership for the purposes of
13federal and State income taxation, there shall be allowed a
14credit under this Section to be determined in accordance with
15the determination of income and distributive share of income
16under Sections 702 and 704 and Subchapter S of the Internal
17Revenue Code.
18    The total aggregate amount of credits awarded under the
19Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
20amendatory Act of the 101st General Assembly) shall not exceed
21$20,000,000 in any State fiscal year.
22    This subsection (h-5) is exempt from the provisions of
23Section 250.
24    (i) Credit for Personal Property Tax Replacement Income
25Tax. For tax years ending prior to December 31, 2003, a credit
26shall be allowed against the tax imposed by subsections (a)

 

 

SB2560- 67 -LRB102 17265 HLH 22737 b

1and (b) of this Section for the tax imposed by subsections (c)
2and (d) of this Section. This credit shall be computed by
3multiplying the tax imposed by subsections (c) and (d) of this
4Section by a fraction, the numerator of which is base income
5allocable to Illinois and the denominator of which is Illinois
6base income, and further multiplying the product by the tax
7rate imposed by subsections (a) and (b) of this Section.
8    Any credit earned on or after December 31, 1986 under this
9subsection which is unused in the year the credit is computed
10because it exceeds the tax liability imposed by subsections
11(a) and (b) for that year (whether it exceeds the original
12liability or the liability as later amended) may be carried
13forward and applied to the tax liability imposed by
14subsections (a) and (b) of the 5 taxable years following the
15excess credit year, provided that no credit may be carried
16forward to any year ending on or after December 31, 2003. This
17credit shall be applied first to the earliest year for which
18there is a liability. If there is a credit under this
19subsection from more than one tax year that is available to
20offset a liability the earliest credit arising under this
21subsection shall be applied first.
22    If, during any taxable year ending on or after December
2331, 1986, the tax imposed by subsections (c) and (d) of this
24Section for which a taxpayer has claimed a credit under this
25subsection (i) is reduced, the amount of credit for such tax
26shall also be reduced. Such reduction shall be determined by

 

 

SB2560- 68 -LRB102 17265 HLH 22737 b

1recomputing the credit to take into account the reduced tax
2imposed by subsections (c) and (d). If any portion of the
3reduced amount of credit has been carried to a different
4taxable year, an amended return shall be filed for such
5taxable year to reduce the amount of credit claimed.
6    (j) Training expense credit. Beginning with tax years
7ending on or after December 31, 1986 and prior to December 31,
82003, a taxpayer shall be allowed a credit against the tax
9imposed by subsections (a) and (b) under this Section for all
10amounts paid or accrued, on behalf of all persons employed by
11the taxpayer in Illinois or Illinois residents employed
12outside of Illinois by a taxpayer, for educational or
13vocational training in semi-technical or technical fields or
14semi-skilled or skilled fields, which were deducted from gross
15income in the computation of taxable income. The credit
16against the tax imposed by subsections (a) and (b) shall be
171.6% of such training expenses. For partners, shareholders of
18subchapter S corporations, and owners of limited liability
19companies, if the liability company is treated as a
20partnership for purposes of federal and State income taxation,
21there shall be allowed a credit under this subsection (j) to be
22determined in accordance with the determination of income and
23distributive share of income under Sections 702 and 704 and
24subchapter S of the Internal Revenue Code.
25    Any credit allowed under this subsection which is unused
26in the year the credit is earned may be carried forward to each

 

 

SB2560- 69 -LRB102 17265 HLH 22737 b

1of the 5 taxable years following the year for which the credit
2is first computed until it is used. This credit shall be
3applied first to the earliest year for which there is a
4liability. If there is a credit under this subsection from
5more than one tax year that is available to offset a liability,
6the earliest credit arising under this subsection shall be
7applied first. No carryforward credit may be claimed in any
8tax year ending on or after December 31, 2003.
9    (k) Research and development credit. For tax years ending
10after July 1, 1990 and prior to December 31, 2003, and
11beginning again for tax years ending on or after December 31,
122004, and ending prior to January 1, 2027, a taxpayer shall be
13allowed a credit against the tax imposed by subsections (a)
14and (b) of this Section for increasing research activities in
15this State. The credit allowed against the tax imposed by
16subsections (a) and (b) shall be equal to 6 1/2% of the
17qualifying expenditures for increasing research activities in
18this State. For partners, shareholders of subchapter S
19corporations, and owners of limited liability companies, if
20the liability company is treated as a partnership for purposes
21of federal and State income taxation, there shall be allowed a
22credit under this subsection to be determined in accordance
23with the determination of income and distributive share of
24income under Sections 702 and 704 and subchapter S of the
25Internal Revenue Code.
26    For purposes of this subsection, "qualifying expenditures"

 

 

SB2560- 70 -LRB102 17265 HLH 22737 b

1means the qualifying expenditures as defined for the federal
2credit for increasing research activities which would be
3allowable under Section 41 of the Internal Revenue Code and
4which are conducted in this State, "qualifying expenditures
5for increasing research activities in this State" means the
6excess of qualifying expenditures for the taxable year in
7which incurred over qualifying expenditures for the base
8period, "qualifying expenditures for the base period" means:
9for tax years ending prior to December 31, 2021, the average of
10the qualifying expenditures for each year in the base period ;
11and (2) for tax years ending on or after December 31, 2021, 50%
12of the average of the qualifying expenditures for each year in
13the base period. "Base , and "base period" means the 3 taxable
14years immediately preceding the taxable year for which the
15determination is being made.
16    Any credit in excess of the tax liability for the taxable
17year may be carried forward. A taxpayer may elect to have the
18unused credit shown on its final completed return carried over
19as a credit against the tax liability for the carry forward
20period following 5 taxable years or until it has been fully
21used, whichever occurs first; provided that no credit earned
22in a tax year ending prior to December 31, 2003 may be carried
23forward to any year ending on or after December 31, 2003. For
24purposes of this subsection, "carry forward period" means (i)
25for credits earned prior to the effective date of this
26amendatory Act of the 102nd General Assembly, the following 5

 

 

SB2560- 71 -LRB102 17265 HLH 22737 b

1taxable years or until the credit has been fully used,
2whichever occurs first, and (ii) for credits earned on or
3after the effective date of this amendatory Act of the 102nd
4General Assembly, the following 20 taxable years or until the
5credit has been fully used, whichever occurs first.
6    If an unused credit is carried forward to a given year from
72 or more earlier years, that credit arising in the earliest
8year will be applied first against the tax liability for the
9given year. If a tax liability for the given year still
10remains, the credit from the next earliest year will then be
11applied, and so on, until all credits have been used or no tax
12liability for the given year remains. Any remaining unused
13credit or credits then will be carried forward to the next
14following year in which a tax liability is incurred, except
15that no credit can be carried forward to a year which is more
16than 5 years after the year in which the expense for which the
17credit is given was incurred.
18    No inference shall be drawn from Public Act 91-644 this
19amendatory Act of the 91st General Assembly in construing this
20Section for taxable years beginning before January 1, 1999.
21    It is the intent of the General Assembly that the research
22and development credit under this subsection (k) shall apply
23continuously for all tax years ending on or after December 31,
242004 and ending prior to January 1, 2027, including, but not
25limited to, the period beginning on January 1, 2016 and ending
26on July 6, 2017 (the effective date of Public Act 100-22) this

 

 

SB2560- 72 -LRB102 17265 HLH 22737 b

1amendatory Act of the 100th General Assembly. All actions
2taken in reliance on the continuation of the credit under this
3subsection (k) by any taxpayer are hereby validated.
4    This subsection is exempt from the provisions of Section
5250 of this Act.
6    (l) Environmental Remediation Tax Credit.
7        (i) For tax years ending after December 31, 1997 and
8    on or before December 31, 2001, a taxpayer shall be
9    allowed a credit against the tax imposed by subsections
10    (a) and (b) of this Section for certain amounts paid for
11    unreimbursed eligible remediation costs, as specified in
12    this subsection. For purposes of this Section,
13    "unreimbursed eligible remediation costs" means costs
14    approved by the Illinois Environmental Protection Agency
15    ("Agency") under Section 58.14 of the Environmental
16    Protection Act that were paid in performing environmental
17    remediation at a site for which a No Further Remediation
18    Letter was issued by the Agency and recorded under Section
19    58.10 of the Environmental Protection Act. The credit must
20    be claimed for the taxable year in which Agency approval
21    of the eligible remediation costs is granted. The credit
22    is not available to any taxpayer if the taxpayer or any
23    related party caused or contributed to, in any material
24    respect, a release of regulated substances on, in, or
25    under the site that was identified and addressed by the
26    remedial action pursuant to the Site Remediation Program

 

 

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

 

 

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

 

 

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1    of subsection (i).
2        (iii) For purposes of this Section, the term "site"
3    shall have the same meaning as under Section 58.2 of the
4    Environmental Protection Act.
5    (m) Education expense credit. Beginning with tax years
6ending after December 31, 1999, a taxpayer who is the
7custodian of one or more qualifying pupils shall be allowed a
8credit against the tax imposed by subsections (a) and (b) of
9this Section for qualified education expenses incurred on
10behalf of the qualifying pupils. The credit shall be equal to
1125% of qualified education expenses, but in no event may the
12total credit under this subsection claimed by a family that is
13the custodian of qualifying pupils exceed (i) $500 for tax
14years ending prior to December 31, 2017, and (ii) $750 for tax
15years ending on or after December 31, 2017. In no event shall a
16credit under this subsection reduce the taxpayer's liability
17under this Act to less than zero. Notwithstanding any other
18provision of law, for taxable years beginning on or after
19January 1, 2017, no taxpayer may claim a credit under this
20subsection (m) if the taxpayer's adjusted gross income for the
21taxable year exceeds (i) $500,000, in the case of spouses
22filing a joint federal tax return or (ii) $250,000, in the case
23of all other taxpayers. This subsection is exempt from the
24provisions of Section 250 of this Act.
25    For purposes of this subsection:
26    "Qualifying pupils" means individuals who (i) are

 

 

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

 

 

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

 

 

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1    losses by paragraphs (b), (c), and (f)(1) of Section 267
2    of the Internal Revenue Code by virtue of being a related
3    taxpayer, as well as any of its partners. The credit
4    allowed against the tax imposed by subsections (a) and (b)
5    shall be equal to 25% of the unreimbursed eligible
6    remediation costs in excess of $100,000 per site.
7        (ii) A credit allowed under this subsection that is
8    unused in the year the credit is earned may be carried
9    forward to each of the 5 taxable years following the year
10    for which the credit is first earned until it is used. This
11    credit shall be applied first to the earliest year for
12    which there is a liability. If there is a credit under this
13    subsection from more than one tax year that is available
14    to offset a liability, the earliest credit arising under
15    this subsection shall be applied first. A credit allowed
16    under this subsection may be sold to a buyer as part of a
17    sale of all or part of the remediation site for which the
18    credit was granted. The purchaser of a remediation site
19    and the tax credit shall succeed to the unused credit and
20    remaining carry-forward period of the seller. To perfect
21    the transfer, the assignor shall record the transfer in
22    the chain of title for the site and provide written notice
23    to the Director of the Illinois Department of Revenue of
24    the assignor's intent to sell the remediation site and the
25    amount of the tax credit to be transferred as a portion of
26    the sale. In no event may a credit be transferred to any

 

 

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1    taxpayer if the taxpayer or a related party would not be
2    eligible under the provisions of subsection (i).
3        (iii) For purposes of this Section, the term "site"
4    shall have the same meaning as under Section 58.2 of the
5    Environmental Protection Act.
6    (o) For each of taxable years during the Compassionate Use
7of Medical Cannabis Program, a surcharge is imposed on all
8taxpayers on income arising from the sale or exchange of
9capital assets, depreciable business property, real property
10used in the trade or business, and Section 197 intangibles of
11an organization registrant under the Compassionate Use of
12Medical Cannabis Program Act. The amount of the surcharge is
13equal to the amount of federal income tax liability for the
14taxable year attributable to those sales and exchanges. The
15surcharge imposed does not apply if:
16        (1) the medical cannabis cultivation center
17    registration, medical cannabis dispensary registration, or
18    the property of a registration is transferred as a result
19    of any of the following:
20            (A) bankruptcy, a receivership, or a debt
21        adjustment initiated by or against the initial
22        registration or the substantial owners of the initial
23        registration;
24            (B) cancellation, revocation, or termination of
25        any registration by the Illinois Department of Public
26        Health;

 

 

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1            (C) a determination by the Illinois Department of
2        Public Health that transfer of the registration is in
3        the best interests of Illinois qualifying patients as
4        defined by the Compassionate Use of Medical Cannabis
5        Program Act;
6            (D) the death of an owner of the equity interest in
7        a registrant;
8            (E) the acquisition of a controlling interest in
9        the stock or substantially all of the assets of a
10        publicly traded company;
11            (F) a transfer by a parent company to a wholly
12        owned subsidiary; or
13            (G) the transfer or sale to or by one person to
14        another person where both persons were initial owners
15        of the registration when the registration was issued;
16        or
17        (2) the cannabis cultivation center registration,
18    medical cannabis dispensary registration, or the
19    controlling interest in a registrant's property is
20    transferred in a transaction to lineal descendants in
21    which no gain or loss is recognized or as a result of a
22    transaction in accordance with Section 351 of the Internal
23    Revenue Code in which no gain or loss is recognized.
24(Source: P.A. 100-22, eff. 7-6-17; 101-8, see Section 99 for
25effective date; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
26101-207, eff. 8-2-19; 101-363, eff. 8-9-19; revised 11-18-20.)
 

 

 

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1    Section 99. Effective date. This Act takes effect upon
2becoming law.