102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB3456

 

Introduced 1/18/2022, by Sen. Brian W. Stewart

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/207  from Ch. 120, par. 2-207

    Amends the Illinois Income Tax Act. Removes a provision for taxable years ending on or after December 31, 2021 and prior to December 31, 2024 limiting the net loss carryover deduction to $100,000. Effective immediately.


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A BILL FOR

 

SB3456LRB102 22652 HLH 31796 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 207 as follows:
 
6    (35 ILCS 5/207)  (from Ch. 120, par. 2-207)
7    Sec. 207. Net Losses.
8    (a) If after applying all of the (i) modifications
9provided for in paragraph (2) of Section 203(b), paragraph (2)
10of Section 203(c) and paragraph (2) of Section 203(d) and (ii)
11the allocation and apportionment provisions of Article 3 of
12this Act and subsection (c) of this Section, the taxpayer's
13net income results in a loss;
14        (1) for any taxable year ending prior to December 31,
15    1999, such loss shall be allowed as a carryover or
16    carryback deduction in the manner allowed under Section
17    172 of the Internal Revenue Code;
18        (2) for any taxable year ending on or after December
19    31, 1999 and prior to December 31, 2003, such loss shall be
20    allowed as a carryback to each of the 2 taxable years
21    preceding the taxable year of such loss and shall be a net
22    operating loss carryover to each of the 20 taxable years
23    following the taxable year of such loss;

 

 

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1        (3) for any taxable year ending on or after December
2    31, 2003 and prior to December 31, 2021, such loss shall be
3    allowed as a net operating loss carryover to each of the 12
4    taxable years following the taxable year of such loss,
5    except as provided in subsection (d); and
6        (4) for any taxable year ending on or after December
7    31, 2021, and for any net loss incurred in a taxable year
8    prior to a taxable year ending on or after December 31,
9    2021 for which the statute of limitation for utilization
10    of such net loss has not expired, such loss shall be
11    allowed as a net operating loss carryover to each of the 20
12    taxable years following the taxable year of such loss,
13    except as provided in subsection (d).
14    (a-5) Election to relinquish carryback and order of
15application of losses.
16            (A) For losses incurred in tax years ending prior
17        to December 31, 2003, the taxpayer may elect to
18        relinquish the entire carryback period with respect to
19        such loss. Such election shall be made in the form and
20        manner prescribed by the Department and shall be made
21        by the due date (including extensions of time) for
22        filing the taxpayer's return for the taxable year in
23        which such loss is incurred, and such election, once
24        made, shall be irrevocable.
25            (B) The entire amount of such loss shall be
26        carried to the earliest taxable year to which such

 

 

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1        loss may be carried. The amount of such loss which
2        shall be carried to each of the other taxable years
3        shall be the excess, if any, of the amount of such loss
4        over the sum of the deductions for carryback or
5        carryover of such loss allowable for each of the prior
6        taxable years to which such loss may be carried.
7    (b) Any loss determined under subsection (a) of this
8Section must be carried back or carried forward in the same
9manner for purposes of subsections (a) and (b) of Section 201
10of this Act as for purposes of subsections (c) and (d) of
11Section 201 of this Act.
12    (c) Notwithstanding any other provision of this Act, for
13each taxable year ending on or after December 31, 2008, for
14purposes of computing the loss for the taxable year under
15subsection (a) of this Section and the deduction taken into
16account for the taxable year for a net operating loss
17carryover under paragraphs (1), (2), and (3) of subsection (a)
18of this Section, the loss and net operating loss carryover
19shall be reduced in an amount equal to the reduction to the net
20operating loss and net operating loss carryover to the taxable
21year, respectively, required under Section 108(b)(2)(A) of the
22Internal Revenue Code, multiplied by a fraction, the numerator
23of which is the amount of discharge of indebtedness income
24that is excluded from gross income for the taxable year (but
25only if the taxable year ends on or after December 31, 2008)
26under Section 108(a) of the Internal Revenue Code and that

 

 

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1would have been allocated and apportioned to this State under
2Article 3 of this Act but for that exclusion, and the
3denominator of which is the total amount of discharge of
4indebtedness income excluded from gross income under Section
5108(a) of the Internal Revenue Code for the taxable year. The
6reduction required under this subsection (c) shall be made
7after the determination of Illinois net income for the taxable
8year in which the indebtedness is discharged.
9    (d) In the case of a corporation (other than a Subchapter S
10corporation), no carryover deduction shall be allowed under
11this Section for any taxable year ending after December 31,
122010 and prior to December 31, 2012, and no carryover
13deduction shall exceed $100,000 for any taxable year ending on
14or after December 31, 2012 and prior to December 31, 2014 and
15for any taxable year ending on or after December 31, 2021 and
16prior to December 31, 2024; provided that, for purposes of
17determining the taxable years to which a net loss may be
18carried under subsection (a) of this Section, no taxable year
19for which a deduction is disallowed under this subsection, or
20for which the deduction would exceed $100,000 if not for this
21subsection, shall be counted.
22    (e) In the case of a residual interest holder in a real
23estate mortgage investment conduit subject to Section 860E of
24the Internal Revenue Code, the net loss in subsection (a)
25shall be equal to:
26        (1) the amount computed under subsection (a), without

 

 

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1    regard to this subsection (e), or if that amount is
2    positive, zero;
3        (2) minus an amount equal to the amount computed under
4    subsection (a), without regard to this subsection (e),
5    minus the amount that would be computed under subsection
6    (a) if the taxpayer's federal taxable income were computed
7    without regard to Section 860E of the Internal Revenue
8    Code and without regard to this subsection (e).
9    The modification in this subsection (e) is exempt from the
10provisions of Section 250.
11(Source: P.A. 102-16, eff. 6-17-21; 102-669, eff. 11-16-21.)
 
12    Section 99. Effective date. This Act takes effect upon
13becoming law.