103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB3489

 

Introduced 2/9/2024, by Sen. Chapin Rose

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/203  from Ch. 120, par. 2-203

    Amends the Illinois Income Tax Act. Creates a deduction for amounts that are disallowed as a deduction on the taxpayer's federal income tax return because of the $10,000 limitation under the federal Internal Revenue Code on deductions for certain State and local taxes. Effective immediately.


LRB103 35047 HLH 64992 b

 

 

A BILL FOR

 

SB3489LRB103 35047 HLH 64992 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 203 as follows:
 
6    (35 ILCS 5/203)  (from Ch. 120, par. 2-203)
7    Sec. 203. Base income defined.
8    (a) Individuals.
9        (1) In general. In the case of an individual, base
10    income means an amount equal to the taxpayer's adjusted
11    gross income for the taxable year as modified by paragraph
12    (2).
13        (2) Modifications. The adjusted gross income referred
14    to in paragraph (1) shall be modified by adding thereto
15    the sum of the following amounts:
16            (A) An amount equal to all amounts paid or accrued
17        to the taxpayer as interest or dividends during the
18        taxable year to the extent excluded from gross income
19        in the computation of adjusted gross income, except
20        stock dividends of qualified public utilities
21        described in Section 305(e) of the Internal Revenue
22        Code;
23            (B) An amount equal to the amount of tax imposed by

 

 

SB3489- 2 -LRB103 35047 HLH 64992 b

1        this Act to the extent deducted from gross income in
2        the computation of adjusted gross income for the
3        taxable year;
4            (C) An amount equal to the amount received during
5        the taxable year as a recovery or refund of real
6        property taxes paid with respect to the taxpayer's
7        principal residence under the Revenue Act of 1939 and
8        for which a deduction was previously taken under
9        subparagraph (L) of this paragraph (2) prior to July
10        1, 1991, the retrospective application date of Article
11        4 of Public Act 87-17. In the case of multi-unit or
12        multi-use structures and farm dwellings, the taxes on
13        the taxpayer's principal residence shall be that
14        portion of the total taxes for the entire property
15        which is attributable to such principal residence;
16            (D) An amount equal to the amount of the capital
17        gain deduction allowable under the Internal Revenue
18        Code, to the extent deducted from gross income in the
19        computation of adjusted gross income;
20            (D-5) An amount, to the extent not included in
21        adjusted gross income, equal to the amount of money
22        withdrawn by the taxpayer in the taxable year from a
23        medical care savings account and the interest earned
24        on the account in the taxable year of a withdrawal
25        pursuant to subsection (b) of Section 20 of the
26        Medical Care Savings Account Act or subsection (b) of

 

 

SB3489- 3 -LRB103 35047 HLH 64992 b

1        Section 20 of the Medical Care Savings Account Act of
2        2000;
3            (D-10) For taxable years ending after December 31,
4        1997, an amount equal to any eligible remediation
5        costs that the individual deducted in computing
6        adjusted gross income and for which the individual
7        claims a credit under subsection (l) of Section 201;
8            (D-15) For taxable years 2001 and thereafter, an
9        amount equal to the bonus depreciation deduction taken
10        on the taxpayer's federal income tax return for the
11        taxable year under subsection (k) of Section 168 of
12        the Internal Revenue Code;
13            (D-16) If the taxpayer sells, transfers, abandons,
14        or otherwise disposes of property for which the
15        taxpayer was required in any taxable year to make an
16        addition modification under subparagraph (D-15), then
17        an amount equal to the aggregate amount of the
18        deductions taken in all taxable years under
19        subparagraph (Z) with respect to that property.
20            If the taxpayer continues to own property through
21        the last day of the last tax year for which a
22        subtraction is allowed with respect to that property
23        under subparagraph (Z) and for which the taxpayer was
24        allowed in any taxable year to make a subtraction
25        modification under subparagraph (Z), then an amount
26        equal to that subtraction modification.

 

 

SB3489- 4 -LRB103 35047 HLH 64992 b

1            The taxpayer is required to make the addition
2        modification under this subparagraph only once with
3        respect to any one piece of property;
4            (D-17) An amount equal to the amount otherwise
5        allowed as a deduction in computing base income for
6        interest paid, accrued, or incurred, directly or
7        indirectly, (i) for taxable years ending on or after
8        December 31, 2004, to a foreign person who would be a
9        member of the same unitary business group but for the
10        fact that foreign person's business activity outside
11        the United States is 80% or more of the foreign
12        person's total business activity and (ii) for taxable
13        years ending on or after December 31, 2008, to a person
14        who would be a member of the same unitary business
15        group but for the fact that the person is prohibited
16        under Section 1501(a)(27) from being included in the
17        unitary business group because he or she is ordinarily
18        required to apportion business income under different
19        subsections of Section 304. The addition modification
20        required by this subparagraph shall be reduced to the
21        extent that dividends were included in base income of
22        the unitary group for the same taxable year and
23        received by the taxpayer or by a member of the
24        taxpayer's unitary business group (including amounts
25        included in gross income under Sections 951 through
26        964 of the Internal Revenue Code and amounts included

 

 

SB3489- 5 -LRB103 35047 HLH 64992 b

1        in gross income under Section 78 of the Internal
2        Revenue Code) with respect to the stock of the same
3        person to whom the interest was paid, accrued, or
4        incurred.
5            This paragraph shall not apply to the following:
6                (i) an item of interest paid, accrued, or
7            incurred, directly or indirectly, to a person who
8            is subject in a foreign country or state, other
9            than a state which requires mandatory unitary
10            reporting, to a tax on or measured by net income
11            with respect to such interest; or
12                (ii) an item of interest paid, accrued, or
13            incurred, directly or indirectly, to a person if
14            the taxpayer can establish, based on a
15            preponderance of the evidence, both of the
16            following:
17                    (a) the person, during the same taxable
18                year, paid, accrued, or incurred, the interest
19                to a person that is not a related member, and
20                    (b) the transaction giving rise to the
21                interest expense between the taxpayer and the
22                person did not have as a principal purpose the
23                avoidance of Illinois income tax, and is paid
24                pursuant to a contract or agreement that
25                reflects an arm's-length interest rate and
26                terms; or

 

 

SB3489- 6 -LRB103 35047 HLH 64992 b

1                (iii) the taxpayer can establish, based on
2            clear and convincing evidence, that the interest
3            paid, accrued, or incurred relates to a contract
4            or agreement entered into at arm's-length rates
5            and terms and the principal purpose for the
6            payment is not federal or Illinois tax avoidance;
7            or
8                (iv) an item of interest paid, accrued, or
9            incurred, directly or indirectly, to a person if
10            the taxpayer establishes by clear and convincing
11            evidence that the adjustments are unreasonable; or
12            if the taxpayer and the Director agree in writing
13            to the application or use of an alternative method
14            of apportionment under Section 304(f).
15                Nothing in this subsection shall preclude the
16            Director from making any other adjustment
17            otherwise allowed under Section 404 of this Act
18            for any tax year beginning after the effective
19            date of this amendment provided such adjustment is
20            made pursuant to regulation adopted by the
21            Department and such regulations provide methods
22            and standards by which the Department will utilize
23            its authority under Section 404 of this Act;
24            (D-18) An amount equal to the amount of intangible
25        expenses and costs otherwise allowed as a deduction in
26        computing base income, and that were paid, accrued, or

 

 

SB3489- 7 -LRB103 35047 HLH 64992 b

1        incurred, directly or indirectly, (i) for taxable
2        years ending on or after December 31, 2004, to a
3        foreign person who would be a member of the same
4        unitary business group but for the fact that the
5        foreign person's business activity outside the United
6        States is 80% or more of that person's total business
7        activity and (ii) for taxable years ending on or after
8        December 31, 2008, to a person who would be a member of
9        the same unitary business group but for the fact that
10        the person is prohibited under Section 1501(a)(27)
11        from being included in the unitary business group
12        because he or she is ordinarily required to apportion
13        business income under different subsections of Section
14        304. The addition modification required by this
15        subparagraph shall be reduced to the extent that
16        dividends were included in base income of the unitary
17        group for the same taxable year and received by the
18        taxpayer or by a member of the taxpayer's unitary
19        business group (including amounts included in gross
20        income under Sections 951 through 964 of the Internal
21        Revenue Code and amounts included in gross income
22        under Section 78 of the Internal Revenue Code) with
23        respect to the stock of the same person to whom the
24        intangible expenses and costs were directly or
25        indirectly paid, incurred, or accrued. The preceding
26        sentence does not apply to the extent that the same

 

 

SB3489- 8 -LRB103 35047 HLH 64992 b

1        dividends caused a reduction to the addition
2        modification required under Section 203(a)(2)(D-17) of
3        this Act. As used in this subparagraph, the term
4        "intangible expenses and costs" includes (1) expenses,
5        losses, and costs for, or related to, the direct or
6        indirect acquisition, use, maintenance or management,
7        ownership, sale, exchange, or any other disposition of
8        intangible property; (2) losses incurred, directly or
9        indirectly, from factoring transactions or discounting
10        transactions; (3) royalty, patent, technical, and
11        copyright fees; (4) licensing fees; and (5) other
12        similar expenses and costs. For purposes of this
13        subparagraph, "intangible property" includes patents,
14        patent applications, trade names, trademarks, service
15        marks, copyrights, mask works, trade secrets, and
16        similar types of intangible assets.
17            This paragraph shall not apply to the following:
18                (i) any item of intangible expenses or costs
19            paid, accrued, or incurred, directly or
20            indirectly, from a transaction with a person who
21            is subject in a foreign country or state, other
22            than a state which requires mandatory unitary
23            reporting, to a tax on or measured by net income
24            with respect to such item; or
25                (ii) any item of intangible expense or cost
26            paid, accrued, or incurred, directly or

 

 

SB3489- 9 -LRB103 35047 HLH 64992 b

1            indirectly, if the taxpayer can establish, based
2            on a preponderance of the evidence, both of the
3            following:
4                    (a) the person during the same taxable
5                year paid, accrued, or incurred, the
6                intangible expense or cost to a person that is
7                not a related member, and
8                    (b) the transaction giving rise to the
9                intangible expense or cost between the
10                taxpayer and the person did not have as a
11                principal purpose the avoidance of Illinois
12                income tax, and is paid pursuant to a contract
13                or agreement that reflects arm's-length terms;
14                or
15                (iii) any item of intangible expense or cost
16            paid, accrued, or incurred, directly or
17            indirectly, from a transaction with a person if
18            the taxpayer establishes by clear and convincing
19            evidence, that the adjustments are unreasonable;
20            or if the taxpayer and the Director agree in
21            writing to the application or use of an
22            alternative method of apportionment under Section
23            304(f);
24                Nothing in this subsection shall preclude the
25            Director from making any other adjustment
26            otherwise allowed under Section 404 of this Act

 

 

SB3489- 10 -LRB103 35047 HLH 64992 b

1            for any tax year beginning after the effective
2            date of this amendment provided such adjustment is
3            made pursuant to regulation adopted by the
4            Department and such regulations provide methods
5            and standards by which the Department will utilize
6            its authority under Section 404 of this Act;
7            (D-19) For taxable years ending on or after
8        December 31, 2008, an amount equal to the amount of
9        insurance premium expenses and costs otherwise allowed
10        as a deduction in computing base income, and that were
11        paid, accrued, or incurred, directly or indirectly, to
12        a person who would be a member of the same unitary
13        business group but for the fact that the person is
14        prohibited under Section 1501(a)(27) from being
15        included in the unitary business group because he or
16        she is ordinarily required to apportion business
17        income under different subsections of Section 304. The
18        addition modification required by this subparagraph
19        shall be reduced to the extent that dividends were
20        included in base income of the unitary group for the
21        same taxable year and received by the taxpayer or by a
22        member of the taxpayer's unitary business group
23        (including amounts included in gross income under
24        Sections 951 through 964 of the Internal Revenue Code
25        and amounts included in gross income under Section 78
26        of the Internal Revenue Code) with respect to the

 

 

SB3489- 11 -LRB103 35047 HLH 64992 b

1        stock of the same person to whom the premiums and costs
2        were directly or indirectly paid, incurred, or
3        accrued. The preceding sentence does not apply to the
4        extent that the same dividends caused a reduction to
5        the addition modification required under Section
6        203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this
7        Act;
8            (D-20) For taxable years beginning on or after
9        January 1, 2002 and ending on or before December 31,
10        2006, in the case of a distribution from a qualified
11        tuition program under Section 529 of the Internal
12        Revenue Code, other than (i) a distribution from a
13        College Savings Pool created under Section 16.5 of the
14        State Treasurer Act or (ii) a distribution from the
15        Illinois Prepaid Tuition Trust Fund, an amount equal
16        to the amount excluded from gross income under Section
17        529(c)(3)(B). For taxable years beginning on or after
18        January 1, 2007, in the case of a distribution from a
19        qualified tuition program under Section 529 of the
20        Internal Revenue Code, other than (i) a distribution
21        from a College Savings Pool created under Section 16.5
22        of the State Treasurer Act, (ii) a distribution from
23        the Illinois Prepaid Tuition Trust Fund, or (iii) a
24        distribution from a qualified tuition program under
25        Section 529 of the Internal Revenue Code that (I)
26        adopts and determines that its offering materials

 

 

SB3489- 12 -LRB103 35047 HLH 64992 b

1        comply with the College Savings Plans Network's
2        disclosure principles and (II) has made reasonable
3        efforts to inform in-state residents of the existence
4        of in-state qualified tuition programs by informing
5        Illinois residents directly and, where applicable, to
6        inform financial intermediaries distributing the
7        program to inform in-state residents of the existence
8        of in-state qualified tuition programs at least
9        annually, an amount equal to the amount excluded from
10        gross income under Section 529(c)(3)(B).
11            For the purposes of this subparagraph (D-20), a
12        qualified tuition program has made reasonable efforts
13        if it makes disclosures (which may use the term
14        "in-state program" or "in-state plan" and need not
15        specifically refer to Illinois or its qualified
16        programs by name) (i) directly to prospective
17        participants in its offering materials or makes a
18        public disclosure, such as a website posting; and (ii)
19        where applicable, to intermediaries selling the
20        out-of-state program in the same manner that the
21        out-of-state program distributes its offering
22        materials;
23            (D-20.5) For taxable years beginning on or after
24        January 1, 2018, in the case of a distribution from a
25        qualified ABLE program under Section 529A of the
26        Internal Revenue Code, other than a distribution from

 

 

SB3489- 13 -LRB103 35047 HLH 64992 b

1        a qualified ABLE program created under Section 16.6 of
2        the State Treasurer Act, an amount equal to the amount
3        excluded from gross income under Section 529A(c)(1)(B)
4        of the Internal Revenue Code;
5            (D-21) For taxable years beginning on or after
6        January 1, 2007, in the case of transfer of moneys from
7        a qualified tuition program under Section 529 of the
8        Internal Revenue Code that is administered by the
9        State to an out-of-state program, an amount equal to
10        the amount of moneys previously deducted from base
11        income under subsection (a)(2)(Y) of this Section;
12            (D-21.5) For taxable years beginning on or after
13        January 1, 2018, in the case of the transfer of moneys
14        from a qualified tuition program under Section 529 or
15        a qualified ABLE program under Section 529A of the
16        Internal Revenue Code that is administered by this
17        State to an ABLE account established under an
18        out-of-state ABLE account program, an amount equal to
19        the contribution component of the transferred amount
20        that was previously deducted from base income under
21        subsection (a)(2)(Y) or subsection (a)(2)(HH) of this
22        Section;
23            (D-22) For taxable years beginning on or after
24        January 1, 2009, and prior to January 1, 2018, in the
25        case of a nonqualified withdrawal or refund of moneys
26        from a qualified tuition program under Section 529 of

 

 

SB3489- 14 -LRB103 35047 HLH 64992 b

1        the Internal Revenue Code administered by the State
2        that is not used for qualified expenses at an eligible
3        education institution, an amount equal to the
4        contribution component of the nonqualified withdrawal
5        or refund that was previously deducted from base
6        income under subsection (a)(2)(y) of this Section,
7        provided that the withdrawal or refund did not result
8        from the beneficiary's death or disability. For
9        taxable years beginning on or after January 1, 2018:
10        (1) in the case of a nonqualified withdrawal or
11        refund, as defined under Section 16.5 of the State
12        Treasurer Act, of moneys from a qualified tuition
13        program under Section 529 of the Internal Revenue Code
14        administered by the State, an amount equal to the
15        contribution component of the nonqualified withdrawal
16        or refund that was previously deducted from base
17        income under subsection (a)(2)(Y) of this Section, and
18        (2) in the case of a nonqualified withdrawal or refund
19        from a qualified ABLE program under Section 529A of
20        the Internal Revenue Code administered by the State
21        that is not used for qualified disability expenses, an
22        amount equal to the contribution component of the
23        nonqualified withdrawal or refund that was previously
24        deducted from base income under subsection (a)(2)(HH)
25        of this Section;
26            (D-23) An amount equal to the credit allowable to

 

 

SB3489- 15 -LRB103 35047 HLH 64992 b

1        the taxpayer under Section 218(a) of this Act,
2        determined without regard to Section 218(c) of this
3        Act;
4            (D-24) For taxable years ending on or after
5        December 31, 2017, an amount equal to the deduction
6        allowed under Section 199 of the Internal Revenue Code
7        for the taxable year;
8            (D-25) In the case of a resident, an amount equal
9        to the amount of tax for which a credit is allowed
10        pursuant to Section 201(p)(7) of this Act;
11    and by deducting from the total so obtained the sum of the
12    following amounts:
13            (E) For taxable years ending before December 31,
14        2001, any amount included in such total in respect of
15        any compensation (including but not limited to any
16        compensation paid or accrued to a serviceman while a
17        prisoner of war or missing in action) paid to a
18        resident by reason of being on active duty in the Armed
19        Forces of the United States and in respect of any
20        compensation paid or accrued to a resident who as a
21        governmental employee was a prisoner of war or missing
22        in action, and in respect of any compensation paid to a
23        resident in 1971 or thereafter for annual training
24        performed pursuant to Sections 502 and 503, Title 32,
25        United States Code as a member of the Illinois
26        National Guard or, beginning with taxable years ending

 

 

SB3489- 16 -LRB103 35047 HLH 64992 b

1        on or after December 31, 2007, the National Guard of
2        any other state. For taxable years ending on or after
3        December 31, 2001, any amount included in such total
4        in respect of any compensation (including but not
5        limited to any compensation paid or accrued to a
6        serviceman while a prisoner of war or missing in
7        action) paid to a resident by reason of being a member
8        of any component of the Armed Forces of the United
9        States and in respect of any compensation paid or
10        accrued to a resident who as a governmental employee
11        was a prisoner of war or missing in action, and in
12        respect of any compensation paid to a resident in 2001
13        or thereafter by reason of being a member of the
14        Illinois National Guard or, beginning with taxable
15        years ending on or after December 31, 2007, the
16        National Guard of any other state. The provisions of
17        this subparagraph (E) are exempt from the provisions
18        of Section 250;
19            (F) An amount equal to all amounts included in
20        such total pursuant to the provisions of Sections
21        402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
22        408 of the Internal Revenue Code, or included in such
23        total as distributions under the provisions of any
24        retirement or disability plan for employees of any
25        governmental agency or unit, or retirement payments to
26        retired partners, which payments are excluded in

 

 

SB3489- 17 -LRB103 35047 HLH 64992 b

1        computing net earnings from self employment by Section
2        1402 of the Internal Revenue Code and regulations
3        adopted pursuant thereto;
4            (G) The valuation limitation amount;
5            (H) An amount equal to the amount of any tax
6        imposed by this Act which was refunded to the taxpayer
7        and included in such total for the taxable year;
8            (I) An amount equal to all amounts included in
9        such total pursuant to the provisions of Section 111
10        of the Internal Revenue Code as a recovery of items
11        previously deducted from adjusted gross income in the
12        computation of taxable income;
13            (J) An amount equal to those dividends included in
14        such total which were paid by a corporation which
15        conducts business operations in a River Edge
16        Redevelopment Zone or zones created under the River
17        Edge Redevelopment Zone Act, and conducts
18        substantially all of its operations in a River Edge
19        Redevelopment Zone or zones. This subparagraph (J) is
20        exempt from the provisions of Section 250;
21            (K) An amount equal to those dividends included in
22        such total that were paid by a corporation that
23        conducts business operations in a federally designated
24        Foreign Trade Zone or Sub-Zone and that is designated
25        a High Impact Business located in Illinois; provided
26        that dividends eligible for the deduction provided in

 

 

SB3489- 18 -LRB103 35047 HLH 64992 b

1        subparagraph (J) of paragraph (2) of this subsection
2        shall not be eligible for the deduction provided under
3        this subparagraph (K);
4            (L) For taxable years ending after December 31,
5        1983, an amount equal to all social security benefits
6        and railroad retirement benefits included in such
7        total pursuant to Sections 72(r) and 86 of the
8        Internal Revenue Code;
9            (M) With the exception of any amounts subtracted
10        under subparagraph (N), an amount equal to the sum of
11        all amounts disallowed as deductions by (i) Sections
12        171(a)(2) and 265(a)(2) of the Internal Revenue Code,
13        and all amounts of expenses allocable to interest and
14        disallowed as deductions by Section 265(a)(1) of the
15        Internal Revenue Code; and (ii) for taxable years
16        ending on or after August 13, 1999, Sections
17        171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
18        Internal Revenue Code, plus, for taxable years ending
19        on or after December 31, 2011, Section 45G(e)(3) of
20        the Internal Revenue Code and, for taxable years
21        ending on or after December 31, 2008, any amount
22        included in gross income under Section 87 of the
23        Internal Revenue Code; the provisions of this
24        subparagraph are exempt from the provisions of Section
25        250;
26            (N) An amount equal to all amounts included in

 

 

SB3489- 19 -LRB103 35047 HLH 64992 b

1        such total which are exempt from taxation by this
2        State either by reason of its statutes or Constitution
3        or by reason of the Constitution, treaties or statutes
4        of the United States; provided that, in the case of any
5        statute of this State that exempts income derived from
6        bonds or other obligations from the tax imposed under
7        this Act, the amount exempted shall be the interest
8        net of bond premium amortization;
9            (O) An amount equal to any contribution made to a
10        job training project established pursuant to the Tax
11        Increment Allocation Redevelopment Act;
12            (P) An amount equal to the amount of the deduction
13        used to compute the federal income tax credit for
14        restoration of substantial amounts held under claim of
15        right for the taxable year pursuant to Section 1341 of
16        the Internal Revenue Code or of any itemized deduction
17        taken from adjusted gross income in the computation of
18        taxable income for restoration of substantial amounts
19        held under claim of right for the taxable year;
20            (Q) An amount equal to any amounts included in
21        such total, received by the taxpayer as an
22        acceleration in the payment of life, endowment or
23        annuity benefits in advance of the time they would
24        otherwise be payable as an indemnity for a terminal
25        illness;
26            (R) An amount equal to the amount of any federal or

 

 

SB3489- 20 -LRB103 35047 HLH 64992 b

1        State bonus paid to veterans of the Persian Gulf War;
2            (S) An amount, to the extent included in adjusted
3        gross income, equal to the amount of a contribution
4        made in the taxable year on behalf of the taxpayer to a
5        medical care savings account established under the
6        Medical Care Savings Account Act or the Medical Care
7        Savings Account Act of 2000 to the extent the
8        contribution is accepted by the account administrator
9        as provided in that Act;
10            (T) An amount, to the extent included in adjusted
11        gross income, equal to the amount of interest earned
12        in the taxable year on a medical care savings account
13        established under the Medical Care Savings Account Act
14        or the Medical Care Savings Account Act of 2000 on
15        behalf of the taxpayer, other than interest added
16        pursuant to item (D-5) of this paragraph (2);
17            (U) For one taxable year beginning on or after
18        January 1, 1994, an amount equal to the total amount of
19        tax imposed and paid under subsections (a) and (b) of
20        Section 201 of this Act on grant amounts received by
21        the taxpayer under the Nursing Home Grant Assistance
22        Act during the taxpayer's taxable years 1992 and 1993;
23            (V) Beginning with tax years ending on or after
24        December 31, 1995 and ending with tax years ending on
25        or before December 31, 2004, an amount equal to the
26        amount paid by a taxpayer who is a self-employed

 

 

SB3489- 21 -LRB103 35047 HLH 64992 b

1        taxpayer, a partner of a partnership, or a shareholder
2        in a Subchapter S corporation for health insurance or
3        long-term care insurance for that taxpayer or that
4        taxpayer's spouse or dependents, to the extent that
5        the amount paid for that health insurance or long-term
6        care insurance may be deducted under Section 213 of
7        the Internal Revenue Code, has not been deducted on
8        the federal income tax return of the taxpayer, and
9        does not exceed the taxable income attributable to
10        that taxpayer's income, self-employment income, or
11        Subchapter S corporation income; except that no
12        deduction shall be allowed under this item (V) if the
13        taxpayer is eligible to participate in any health
14        insurance or long-term care insurance plan of an
15        employer of the taxpayer or the taxpayer's spouse. The
16        amount of the health insurance and long-term care
17        insurance subtracted under this item (V) shall be
18        determined by multiplying total health insurance and
19        long-term care insurance premiums paid by the taxpayer
20        times a number that represents the fractional
21        percentage of eligible medical expenses under Section
22        213 of the Internal Revenue Code of 1986 not actually
23        deducted on the taxpayer's federal income tax return;
24            (W) For taxable years beginning on or after
25        January 1, 1998, all amounts included in the
26        taxpayer's federal gross income in the taxable year

 

 

SB3489- 22 -LRB103 35047 HLH 64992 b

1        from amounts converted from a regular IRA to a Roth
2        IRA. This paragraph is exempt from the provisions of
3        Section 250;
4            (X) For taxable year 1999 and thereafter, an
5        amount equal to the amount of any (i) distributions,
6        to the extent includible in gross income for federal
7        income tax purposes, made to the taxpayer because of
8        his or her status as a victim of persecution for racial
9        or religious reasons by Nazi Germany or any other Axis
10        regime or as an heir of the victim and (ii) items of
11        income, to the extent includible in gross income for
12        federal income tax purposes, attributable to, derived
13        from or in any way related to assets stolen from,
14        hidden from, or otherwise lost to a victim of
15        persecution for racial or religious reasons by Nazi
16        Germany or any other Axis regime immediately prior to,
17        during, and immediately after World War II, including,
18        but not limited to, interest on the proceeds
19        receivable as insurance under policies issued to a
20        victim of persecution for racial or religious reasons
21        by Nazi Germany or any other Axis regime by European
22        insurance companies immediately prior to and during
23        World War II; provided, however, this subtraction from
24        federal adjusted gross income does not apply to assets
25        acquired with such assets or with the proceeds from
26        the sale of such assets; provided, further, this

 

 

SB3489- 23 -LRB103 35047 HLH 64992 b

1        paragraph shall only apply to a taxpayer who was the
2        first recipient of such assets after their recovery
3        and who is a victim of persecution for racial or
4        religious reasons by Nazi Germany or any other Axis
5        regime or as an heir of the victim. The amount of and
6        the eligibility for any public assistance, benefit, or
7        similar entitlement is not affected by the inclusion
8        of items (i) and (ii) of this paragraph in gross income
9        for federal income tax purposes. This paragraph is
10        exempt from the provisions of Section 250;
11            (Y) For taxable years beginning on or after
12        January 1, 2002 and ending on or before December 31,
13        2004, moneys contributed in the taxable year to a
14        College Savings Pool account under Section 16.5 of the
15        State Treasurer Act, except that amounts excluded from
16        gross income under Section 529(c)(3)(C)(i) of the
17        Internal Revenue Code shall not be considered moneys
18        contributed under this subparagraph (Y). For taxable
19        years beginning on or after January 1, 2005, a maximum
20        of $10,000 contributed in the taxable year to (i) a
21        College Savings Pool account under Section 16.5 of the
22        State Treasurer Act or (ii) the Illinois Prepaid
23        Tuition Trust Fund, except that amounts excluded from
24        gross income under Section 529(c)(3)(C)(i) of the
25        Internal Revenue Code shall not be considered moneys
26        contributed under this subparagraph (Y). For purposes

 

 

SB3489- 24 -LRB103 35047 HLH 64992 b

1        of this subparagraph, contributions made by an
2        employer on behalf of an employee, or matching
3        contributions made by an employee, shall be treated as
4        made by the employee. This subparagraph (Y) is exempt
5        from the provisions of Section 250;
6            (Z) For taxable years 2001 and thereafter, for the
7        taxable year in which the bonus depreciation deduction
8        is taken on the taxpayer's federal income tax return
9        under subsection (k) of Section 168 of the Internal
10        Revenue Code and for each applicable taxable year
11        thereafter, an amount equal to "x", where:
12                (1) "y" equals the amount of the depreciation
13            deduction taken for the taxable year on the
14            taxpayer's federal income tax return on property
15            for which the bonus depreciation deduction was
16            taken in any year under subsection (k) of Section
17            168 of the Internal Revenue Code, but not
18            including the bonus depreciation deduction;
19                (2) for taxable years ending on or before
20            December 31, 2005, "x" equals "y" multiplied by 30
21            and then divided by 70 (or "y" multiplied by
22            0.429); and
23                (3) for taxable years ending after December
24            31, 2005:
25                    (i) for property on which a bonus
26                depreciation deduction of 30% of the adjusted

 

 

SB3489- 25 -LRB103 35047 HLH 64992 b

1                basis was taken, "x" equals "y" multiplied by
2                30 and then divided by 70 (or "y" multiplied
3                by 0.429);
4                    (ii) for property on which a bonus
5                depreciation deduction of 50% of the adjusted
6                basis was taken, "x" equals "y" multiplied by
7                1.0;
8                    (iii) for property on which a bonus
9                depreciation deduction of 100% of the adjusted
10                basis was taken in a taxable year ending on or
11                after December 31, 2021, "x" equals the
12                depreciation deduction that would be allowed
13                on that property if the taxpayer had made the
14                election under Section 168(k)(7) of the
15                Internal Revenue Code to not claim bonus
16                depreciation on that property; and
17                    (iv) for property on which a bonus
18                depreciation deduction of a percentage other
19                than 30%, 50% or 100% of the adjusted basis
20                was taken in a taxable year ending on or after
21                December 31, 2021, "x" equals "y" multiplied
22                by 100 times the percentage bonus depreciation
23                on the property (that is, 100(bonus%)) and
24                then divided by 100 times 1 minus the
25                percentage bonus depreciation on the property
26                (that is, 100(1–bonus%)).

 

 

SB3489- 26 -LRB103 35047 HLH 64992 b

1            The aggregate amount deducted under this
2        subparagraph in all taxable years for any one piece of
3        property may not exceed the amount of the bonus
4        depreciation deduction taken on that property on the
5        taxpayer's federal income tax return under subsection
6        (k) of Section 168 of the Internal Revenue Code. This
7        subparagraph (Z) is exempt from the provisions of
8        Section 250;
9            (AA) If the taxpayer sells, transfers, abandons,
10        or otherwise disposes of property for which the
11        taxpayer was required in any taxable year to make an
12        addition modification under subparagraph (D-15), then
13        an amount equal to that addition modification.
14            If the taxpayer continues to own property through
15        the last day of the last tax year for which a
16        subtraction is allowed with respect to that property
17        under subparagraph (Z) and for which the taxpayer was
18        required in any taxable year to make an addition
19        modification under subparagraph (D-15), then an amount
20        equal to that addition modification.
21            The taxpayer is allowed to take the deduction
22        under this subparagraph only once with respect to any
23        one piece of property.
24            This subparagraph (AA) is exempt from the
25        provisions of Section 250;
26            (BB) Any amount included in adjusted gross income,

 

 

SB3489- 27 -LRB103 35047 HLH 64992 b

1        other than salary, received by a driver in a
2        ridesharing arrangement using a motor vehicle;
3            (CC) The amount of (i) any interest income (net of
4        the deductions allocable thereto) taken into account
5        for the taxable year with respect to a transaction
6        with a taxpayer that is required to make an addition
7        modification with respect to such transaction under
8        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
9        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
10        the amount of that addition modification, and (ii) any
11        income from intangible property (net of the deductions
12        allocable thereto) taken into account for the taxable
13        year with respect to a transaction with a taxpayer
14        that is required to make an addition modification with
15        respect to such transaction under Section
16        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
17        203(d)(2)(D-8), but not to exceed the amount of that
18        addition modification. This subparagraph (CC) is
19        exempt from the provisions of Section 250;
20            (DD) An amount equal to the interest income taken
21        into account for the taxable year (net of the
22        deductions allocable thereto) with respect to
23        transactions with (i) a foreign person who would be a
24        member of the taxpayer's unitary business group but
25        for the fact that the foreign person's business
26        activity outside the United States is 80% or more of

 

 

SB3489- 28 -LRB103 35047 HLH 64992 b

1        that person's total business activity and (ii) for
2        taxable years ending on or after December 31, 2008, to
3        a person who would be a member of the same unitary
4        business group but for the fact that the person is
5        prohibited under Section 1501(a)(27) from being
6        included in the unitary business group because he or
7        she is ordinarily required to apportion business
8        income under different subsections of Section 304, but
9        not to exceed the addition modification required to be
10        made for the same taxable year under Section
11        203(a)(2)(D-17) for interest paid, accrued, or
12        incurred, directly or indirectly, to the same person.
13        This subparagraph (DD) is exempt from the provisions
14        of Section 250;
15            (EE) An amount equal to the income from intangible
16        property taken into account for the taxable year (net
17        of the deductions allocable thereto) with respect to
18        transactions with (i) a foreign person who would be a
19        member of the taxpayer's unitary business group but
20        for the fact that the foreign person's business
21        activity outside the United States is 80% or more of
22        that person's total business activity and (ii) for
23        taxable years ending on or after December 31, 2008, to
24        a person who would be a member of the same unitary
25        business group but for the fact that the person is
26        prohibited under Section 1501(a)(27) from being

 

 

SB3489- 29 -LRB103 35047 HLH 64992 b

1        included in the unitary business group because he or
2        she is ordinarily required to apportion business
3        income under different subsections of Section 304, but
4        not to exceed the addition modification required to be
5        made for the same taxable year under Section
6        203(a)(2)(D-18) for intangible expenses and costs
7        paid, accrued, or incurred, directly or indirectly, to
8        the same foreign person. This subparagraph (EE) is
9        exempt from the provisions of Section 250;
10            (FF) An amount equal to any amount awarded to the
11        taxpayer during the taxable year by the Court of
12        Claims under subsection (c) of Section 8 of the Court
13        of Claims Act for time unjustly served in a State
14        prison. This subparagraph (FF) is exempt from the
15        provisions of Section 250;
16            (GG) For taxable years ending on or after December
17        31, 2011, in the case of a taxpayer who was required to
18        add back any insurance premiums under Section
19        203(a)(2)(D-19), such taxpayer may elect to subtract
20        that part of a reimbursement received from the
21        insurance company equal to the amount of the expense
22        or loss (including expenses incurred by the insurance
23        company) that would have been taken into account as a
24        deduction for federal income tax purposes if the
25        expense or loss had been uninsured. If a taxpayer
26        makes the election provided for by this subparagraph

 

 

SB3489- 30 -LRB103 35047 HLH 64992 b

1        (GG), the insurer to which the premiums were paid must
2        add back to income the amount subtracted by the
3        taxpayer pursuant to this subparagraph (GG). This
4        subparagraph (GG) is exempt from the provisions of
5        Section 250;
6            (HH) For taxable years beginning on or after
7        January 1, 2018 and prior to January 1, 2028, a maximum
8        of $10,000 contributed in the taxable year to a
9        qualified ABLE account under Section 16.6 of the State
10        Treasurer Act, except that amounts excluded from gross
11        income under Section 529(c)(3)(C)(i) or Section
12        529A(c)(1)(C) of the Internal Revenue Code shall not
13        be considered moneys contributed under this
14        subparagraph (HH). For purposes of this subparagraph
15        (HH), contributions made by an employer on behalf of
16        an employee, or matching contributions made by an
17        employee, shall be treated as made by the employee;
18        and
19            (II) For taxable years that begin on or after
20        January 1, 2021 and begin before January 1, 2026, the
21        amount that is included in the taxpayer's federal
22        adjusted gross income pursuant to Section 61 of the
23        Internal Revenue Code as discharge of indebtedness
24        attributable to student loan forgiveness and that is
25        not excluded from the taxpayer's federal adjusted
26        gross income pursuant to paragraph (5) of subsection

 

 

SB3489- 31 -LRB103 35047 HLH 64992 b

1        (f) of Section 108 of the Internal Revenue Code; and .
2            (JJ) For taxable years beginning on or after
3        January 1, 2024, the amount that was paid during the
4        taxable year in taxes described in paragraphs (1),
5        (2), and (3) of subsection (a) of Section 164 of the
6        federal Internal Revenue Code and paragraph (5) of
7        subsection (b) of Section 164 of the federal Internal
8        Revenue Code that was disallowed as a deduction on the
9        taxpayer's federal income tax return for the taxable
10        year as a result of the limitation set forth under
11        subparagraph (B) of paragraph (6) of subsection (b) of
12        Section 164 of the federal Internal Revenue Code. This
13        subparagraph (JJ) is exempt from the provisions of
14        Section 250.
 
15    (b) Corporations.
16        (1) In general. In the case of a corporation, base
17    income means an amount equal to the taxpayer's taxable
18    income for the taxable year as modified by paragraph (2).
19        (2) Modifications. The taxable income referred to in
20    paragraph (1) shall be modified by adding thereto the sum
21    of the following amounts:
22            (A) An amount equal to all amounts paid or accrued
23        to the taxpayer as interest and all distributions
24        received from regulated investment companies during
25        the taxable year to the extent excluded from gross

 

 

SB3489- 32 -LRB103 35047 HLH 64992 b

1        income in the computation of taxable income;
2            (B) An amount equal to the amount of tax imposed by
3        this Act to the extent deducted from gross income in
4        the computation of taxable income for the taxable
5        year;
6            (C) In the case of a regulated investment company,
7        an amount equal to the excess of (i) the net long-term
8        capital gain for the taxable year, over (ii) the
9        amount of the capital gain dividends designated as
10        such in accordance with Section 852(b)(3)(C) of the
11        Internal Revenue Code and any amount designated under
12        Section 852(b)(3)(D) of the Internal Revenue Code,
13        attributable to the taxable year (this amendatory Act
14        of 1995 (Public Act 89-89) is declarative of existing
15        law and is not a new enactment);
16            (D) The amount of any net operating loss deduction
17        taken in arriving at taxable income, other than a net
18        operating loss carried forward from a taxable year
19        ending prior to December 31, 1986;
20            (E) For taxable years in which a net operating
21        loss carryback or carryforward from a taxable year
22        ending prior to December 31, 1986 is an element of
23        taxable income under paragraph (1) of subsection (e)
24        or subparagraph (E) of paragraph (2) of subsection
25        (e), the amount by which addition modifications other
26        than those provided by this subparagraph (E) exceeded

 

 

SB3489- 33 -LRB103 35047 HLH 64992 b

1        subtraction modifications in such earlier taxable
2        year, with the following limitations applied in the
3        order that they are listed:
4                (i) the addition modification relating to the
5            net operating loss carried back or forward to the
6            taxable year from any taxable year ending prior to
7            December 31, 1986 shall be reduced by the amount
8            of addition modification under this subparagraph
9            (E) which related to that net operating loss and
10            which was taken into account in calculating the
11            base income of an earlier taxable year, and
12                (ii) the addition modification relating to the
13            net operating loss carried back or forward to the
14            taxable year from any taxable year ending prior to
15            December 31, 1986 shall not exceed the amount of
16            such carryback or carryforward;
17            For taxable years in which there is a net
18        operating loss carryback or carryforward from more
19        than one other taxable year ending prior to December
20        31, 1986, the addition modification provided in this
21        subparagraph (E) shall be the sum of the amounts
22        computed independently under the preceding provisions
23        of this subparagraph (E) for each such taxable year;
24            (E-5) For taxable years ending after December 31,
25        1997, an amount equal to any eligible remediation
26        costs that the corporation deducted in computing

 

 

SB3489- 34 -LRB103 35047 HLH 64992 b

1        adjusted gross income and for which the corporation
2        claims a credit under subsection (l) of Section 201;
3            (E-10) For taxable years 2001 and thereafter, an
4        amount equal to the bonus depreciation deduction taken
5        on the taxpayer's federal income tax return for the
6        taxable year under subsection (k) of Section 168 of
7        the Internal Revenue Code;
8            (E-11) If the taxpayer sells, transfers, abandons,
9        or otherwise disposes of property for which the
10        taxpayer was required in any taxable year to make an
11        addition modification under subparagraph (E-10), then
12        an amount equal to the aggregate amount of the
13        deductions taken in all taxable years under
14        subparagraph (T) with respect to that property.
15            If the taxpayer continues to own property through
16        the last day of the last tax year for which a
17        subtraction is allowed with respect to that property
18        under subparagraph (T) and for which the taxpayer was
19        allowed in any taxable year to make a subtraction
20        modification under subparagraph (T), then an amount
21        equal to that subtraction modification.
22            The taxpayer is required to make the addition
23        modification under this subparagraph only once with
24        respect to any one piece of property;
25            (E-12) An amount equal to the amount otherwise
26        allowed as a deduction in computing base income for

 

 

SB3489- 35 -LRB103 35047 HLH 64992 b

1        interest paid, accrued, or incurred, directly or
2        indirectly, (i) for taxable years ending on or after
3        December 31, 2004, to a foreign person who would be a
4        member of the same unitary business group but for the
5        fact the foreign person's business activity outside
6        the United States is 80% or more of the foreign
7        person's total business activity and (ii) for taxable
8        years ending on or after December 31, 2008, to a person
9        who would be a member of the same unitary business
10        group but for the fact that the person is prohibited
11        under Section 1501(a)(27) from being included in the
12        unitary business group because he or she is ordinarily
13        required to apportion business income under different
14        subsections of Section 304. The addition modification
15        required by this subparagraph shall be reduced to the
16        extent that dividends were included in base income of
17        the unitary group for the same taxable year and
18        received by the taxpayer or by a member of the
19        taxpayer's unitary business group (including amounts
20        included in gross income pursuant to Sections 951
21        through 964 of the Internal Revenue Code and amounts
22        included in gross income under Section 78 of the
23        Internal Revenue Code) with respect to the stock of
24        the same person to whom the interest was paid,
25        accrued, or incurred.
26            This paragraph shall not apply to the following:

 

 

SB3489- 36 -LRB103 35047 HLH 64992 b

1                (i) an item of interest paid, accrued, or
2            incurred, directly or indirectly, to a person who
3            is subject in a foreign country or state, other
4            than a state which requires mandatory unitary
5            reporting, to a tax on or measured by net income
6            with respect to such interest; or
7                (ii) an item of interest paid, accrued, or
8            incurred, directly or indirectly, to a person if
9            the taxpayer can establish, based on a
10            preponderance of the evidence, both of the
11            following:
12                    (a) the person, during the same taxable
13                year, paid, accrued, or incurred, the interest
14                to a person that is not a related member, and
15                    (b) the transaction giving rise to the
16                interest expense between the taxpayer and the
17                person did not have as a principal purpose the
18                avoidance of Illinois income tax, and is paid
19                pursuant to a contract or agreement that
20                reflects an arm's-length interest rate and
21                terms; or
22                (iii) the taxpayer can establish, based on
23            clear and convincing evidence, that the interest
24            paid, accrued, or incurred relates to a contract
25            or agreement entered into at arm's-length rates
26            and terms and the principal purpose for the

 

 

SB3489- 37 -LRB103 35047 HLH 64992 b

1            payment is not federal or Illinois tax avoidance;
2            or
3                (iv) an item of interest paid, accrued, or
4            incurred, directly or indirectly, to a person if
5            the taxpayer establishes by clear and convincing
6            evidence that the adjustments are unreasonable; or
7            if the taxpayer and the Director agree in writing
8            to the application or use of an alternative method
9            of apportionment under Section 304(f).
10                Nothing in this subsection shall preclude the
11            Director from making any other adjustment
12            otherwise allowed under Section 404 of this Act
13            for any tax year beginning after the effective
14            date of this amendment provided such adjustment is
15            made pursuant to regulation adopted by the
16            Department and such regulations provide methods
17            and standards by which the Department will utilize
18            its authority under Section 404 of this Act;
19            (E-13) An amount equal to the amount of intangible
20        expenses and costs otherwise allowed as a deduction in
21        computing base income, and that were paid, accrued, or
22        incurred, directly or indirectly, (i) for taxable
23        years ending on or after December 31, 2004, to a
24        foreign person who would be a member of the same
25        unitary business group but for the fact that the
26        foreign person's business activity outside the United

 

 

SB3489- 38 -LRB103 35047 HLH 64992 b

1        States is 80% or more of that person's total business
2        activity and (ii) for taxable years ending on or after
3        December 31, 2008, to a person who would be a member of
4        the same unitary business group but for the fact that
5        the person is prohibited under Section 1501(a)(27)
6        from being included in the unitary business group
7        because he or she is ordinarily required to apportion
8        business income under different subsections of Section
9        304. The addition modification required by this
10        subparagraph shall be reduced to the extent that
11        dividends were included in base income of the unitary
12        group for the same taxable year and received by the
13        taxpayer or by a member of the taxpayer's unitary
14        business group (including amounts included in gross
15        income pursuant to Sections 951 through 964 of the
16        Internal Revenue Code and amounts included in gross
17        income under Section 78 of the Internal Revenue Code)
18        with respect to the stock of the same person to whom
19        the intangible expenses and costs were directly or
20        indirectly paid, incurred, or accrued. The preceding
21        sentence shall not apply to the extent that the same
22        dividends caused a reduction to the addition
23        modification required under Section 203(b)(2)(E-12) of
24        this Act. As used in this subparagraph, the term
25        "intangible expenses and costs" includes (1) expenses,
26        losses, and costs for, or related to, the direct or

 

 

SB3489- 39 -LRB103 35047 HLH 64992 b

1        indirect acquisition, use, maintenance or management,
2        ownership, sale, exchange, or any other disposition of
3        intangible property; (2) losses incurred, directly or
4        indirectly, from factoring transactions or discounting
5        transactions; (3) royalty, patent, technical, and
6        copyright fees; (4) licensing fees; and (5) other
7        similar expenses and costs. For purposes of this
8        subparagraph, "intangible property" includes patents,
9        patent applications, trade names, trademarks, service
10        marks, copyrights, mask works, trade secrets, and
11        similar types of intangible assets.
12            This paragraph shall not apply to the following:
13                (i) any item of intangible expenses or costs
14            paid, accrued, or incurred, directly or
15            indirectly, from a transaction with a person who
16            is subject in a foreign country or state, other
17            than a state which requires mandatory unitary
18            reporting, to a tax on or measured by net income
19            with respect to such item; or
20                (ii) any item of intangible expense or cost
21            paid, accrued, or incurred, directly or
22            indirectly, if the taxpayer can establish, based
23            on a preponderance of the evidence, both of the
24            following:
25                    (a) the person during the same taxable
26                year paid, accrued, or incurred, the

 

 

SB3489- 40 -LRB103 35047 HLH 64992 b

1                intangible expense or cost to a person that is
2                not a related member, and
3                    (b) the transaction giving rise to the
4                intangible expense or cost between the
5                taxpayer and the person did not have as a
6                principal purpose the avoidance of Illinois
7                income tax, and is paid pursuant to a contract
8                or agreement that reflects arm's-length terms;
9                or
10                (iii) any item of intangible expense or cost
11            paid, accrued, or incurred, directly or
12            indirectly, from a transaction with a person if
13            the taxpayer establishes by clear and convincing
14            evidence, that the adjustments are unreasonable;
15            or if the taxpayer and the Director agree in
16            writing to the application or use of an
17            alternative method of apportionment under Section
18            304(f);
19                Nothing in this subsection shall preclude the
20            Director from making any other adjustment
21            otherwise allowed under Section 404 of this Act
22            for any tax year beginning after the effective
23            date of this amendment provided such adjustment is
24            made pursuant to regulation adopted by the
25            Department and such regulations provide methods
26            and standards by which the Department will utilize

 

 

SB3489- 41 -LRB103 35047 HLH 64992 b

1            its authority under Section 404 of this Act;
2            (E-14) For taxable years ending on or after
3        December 31, 2008, an amount equal to the amount of
4        insurance premium expenses and costs otherwise allowed
5        as a deduction in computing base income, and that were
6        paid, accrued, or incurred, directly or indirectly, to
7        a person who would be a member of the same unitary
8        business group but for the fact that the person is
9        prohibited under Section 1501(a)(27) from being
10        included in the unitary business group because he or
11        she is ordinarily required to apportion business
12        income under different subsections of Section 304. The
13        addition modification required by this subparagraph
14        shall be reduced to the extent that dividends were
15        included in base income of the unitary group for the
16        same taxable year and received by the taxpayer or by a
17        member of the taxpayer's unitary business group
18        (including amounts included in gross income under
19        Sections 951 through 964 of the Internal Revenue Code
20        and amounts included in gross income under Section 78
21        of the Internal Revenue Code) with respect to the
22        stock of the same person to whom the premiums and costs
23        were directly or indirectly paid, incurred, or
24        accrued. The preceding sentence does not apply to the
25        extent that the same dividends caused a reduction to
26        the addition modification required under Section

 

 

SB3489- 42 -LRB103 35047 HLH 64992 b

1        203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this
2        Act;
3            (E-15) For taxable years beginning after December
4        31, 2008, any deduction for dividends paid by a
5        captive real estate investment trust that is allowed
6        to a real estate investment trust under Section
7        857(b)(2)(B) of the Internal Revenue Code for
8        dividends paid;
9            (E-16) An amount equal to the credit allowable to
10        the taxpayer under Section 218(a) of this Act,
11        determined without regard to Section 218(c) of this
12        Act;
13            (E-17) For taxable years ending on or after
14        December 31, 2017, an amount equal to the deduction
15        allowed under Section 199 of the Internal Revenue Code
16        for the taxable year;
17            (E-18) for taxable years beginning after December
18        31, 2018, an amount equal to the deduction allowed
19        under Section 250(a)(1)(A) of the Internal Revenue
20        Code for the taxable year;
21            (E-19) for taxable years ending on or after June
22        30, 2021, an amount equal to the deduction allowed
23        under Section 250(a)(1)(B)(i) of the Internal Revenue
24        Code for the taxable year;
25            (E-20) for taxable years ending on or after June
26        30, 2021, an amount equal to the deduction allowed

 

 

SB3489- 43 -LRB103 35047 HLH 64992 b

1        under Sections 243(e) and 245A(a) of the Internal
2        Revenue Code for the taxable year.
3    and by deducting from the total so obtained the sum of the
4    following amounts:
5            (F) An amount equal to the amount of any tax
6        imposed by this Act which was refunded to the taxpayer
7        and included in such total for the taxable year;
8            (G) An amount equal to any amount included in such
9        total under Section 78 of the Internal Revenue Code;
10            (H) In the case of a regulated investment company,
11        an amount equal to the amount of exempt interest
12        dividends as defined in subsection (b)(5) of Section
13        852 of the Internal Revenue Code, paid to shareholders
14        for the taxable year;
15            (I) With the exception of any amounts subtracted
16        under subparagraph (J), an amount equal to the sum of
17        all amounts disallowed as deductions by (i) Sections
18        171(a)(2) and 265(a)(2) and amounts disallowed as
19        interest expense by Section 291(a)(3) of the Internal
20        Revenue Code, and all amounts of expenses allocable to
21        interest and disallowed as deductions by Section
22        265(a)(1) of the Internal Revenue Code; and (ii) for
23        taxable years ending on or after August 13, 1999,
24        Sections 171(a)(2), 265, 280C, 291(a)(3), and
25        832(b)(5)(B)(i) of the Internal Revenue Code, plus,
26        for tax years ending on or after December 31, 2011,

 

 

SB3489- 44 -LRB103 35047 HLH 64992 b

1        amounts disallowed as deductions by Section 45G(e)(3)
2        of the Internal Revenue Code and, for taxable years
3        ending on or after December 31, 2008, any amount
4        included in gross income under Section 87 of the
5        Internal Revenue Code and the policyholders' share of
6        tax-exempt interest of a life insurance company under
7        Section 807(a)(2)(B) of the Internal Revenue Code (in
8        the case of a life insurance company with gross income
9        from a decrease in reserves for the tax year) or
10        Section 807(b)(1)(B) of the Internal Revenue Code (in
11        the case of a life insurance company allowed a
12        deduction for an increase in reserves for the tax
13        year); the provisions of this subparagraph are exempt
14        from the provisions of Section 250;
15            (J) An amount equal to all amounts included in
16        such total which are exempt from taxation by this
17        State either by reason of its statutes or Constitution
18        or by reason of the Constitution, treaties or statutes
19        of the United States; provided that, in the case of any
20        statute of this State that exempts income derived from
21        bonds or other obligations from the tax imposed under
22        this Act, the amount exempted shall be the interest
23        net of bond premium amortization;
24            (K) An amount equal to those dividends included in
25        such total which were paid by a corporation which
26        conducts business operations in a River Edge

 

 

SB3489- 45 -LRB103 35047 HLH 64992 b

1        Redevelopment Zone or zones created under the River
2        Edge Redevelopment Zone Act and conducts substantially
3        all of its operations in a River Edge Redevelopment
4        Zone or zones. This subparagraph (K) is exempt from
5        the provisions of Section 250;
6            (L) An amount equal to those dividends included in
7        such total that were paid by a corporation that
8        conducts business operations in a federally designated
9        Foreign Trade Zone or Sub-Zone and that is designated
10        a High Impact Business located in Illinois; provided
11        that dividends eligible for the deduction provided in
12        subparagraph (K) of paragraph 2 of this subsection
13        shall not be eligible for the deduction provided under
14        this subparagraph (L);
15            (M) For any taxpayer that is a financial
16        organization within the meaning of Section 304(c) of
17        this Act, an amount included in such total as interest
18        income from a loan or loans made by such taxpayer to a
19        borrower, to the extent that such a loan is secured by
20        property which is eligible for the River Edge
21        Redevelopment Zone Investment Credit. To determine the
22        portion of a loan or loans that is secured by property
23        eligible for a Section 201(f) investment credit to the
24        borrower, the entire principal amount of the loan or
25        loans between the taxpayer and the borrower should be
26        divided into the basis of the Section 201(f)

 

 

SB3489- 46 -LRB103 35047 HLH 64992 b

1        investment credit property which secures the loan or
2        loans, using for this purpose the original basis of
3        such property on the date that it was placed in service
4        in the River Edge Redevelopment Zone. The subtraction
5        modification available to the taxpayer in any year
6        under this subsection shall be that portion of the
7        total interest paid by the borrower with respect to
8        such loan attributable to the eligible property as
9        calculated under the previous sentence. This
10        subparagraph (M) is exempt from the provisions of
11        Section 250;
12            (M-1) For any taxpayer that is a financial
13        organization within the meaning of Section 304(c) of
14        this Act, an amount included in such total as interest
15        income from a loan or loans made by such taxpayer to a
16        borrower, to the extent that such a loan is secured by
17        property which is eligible for the High Impact
18        Business Investment Credit. To determine the portion
19        of a loan or loans that is secured by property eligible
20        for a Section 201(h) investment credit to the
21        borrower, the entire principal amount of the loan or
22        loans between the taxpayer and the borrower should be
23        divided into the basis of the Section 201(h)
24        investment credit property which secures the loan or
25        loans, using for this purpose the original basis of
26        such property on the date that it was placed in service

 

 

SB3489- 47 -LRB103 35047 HLH 64992 b

1        in a federally designated Foreign Trade Zone or
2        Sub-Zone located in Illinois. No taxpayer that is
3        eligible for the deduction provided in subparagraph
4        (M) of paragraph (2) of this subsection shall be
5        eligible for the deduction provided under this
6        subparagraph (M-1). The subtraction modification
7        available to taxpayers in any year under this
8        subsection shall be that portion of the total interest
9        paid by the borrower with respect to such loan
10        attributable to the eligible property as calculated
11        under the previous sentence;
12            (N) Two times any contribution made during the
13        taxable year to a designated zone organization to the
14        extent that the contribution (i) qualifies as a
15        charitable contribution under subsection (c) of
16        Section 170 of the Internal Revenue Code and (ii)
17        must, by its terms, be used for a project approved by
18        the Department of Commerce and Economic Opportunity
19        under Section 11 of the Illinois Enterprise Zone Act
20        or under Section 10-10 of the River Edge Redevelopment
21        Zone Act. This subparagraph (N) is exempt from the
22        provisions of Section 250;
23            (O) An amount equal to: (i) 85% for taxable years
24        ending on or before December 31, 1992, or, a
25        percentage equal to the percentage allowable under
26        Section 243(a)(1) of the Internal Revenue Code of 1986

 

 

SB3489- 48 -LRB103 35047 HLH 64992 b

1        for taxable years ending after December 31, 1992, of
2        the amount by which dividends included in taxable
3        income and received from a corporation that is not
4        created or organized under the laws of the United
5        States or any state or political subdivision thereof,
6        including, for taxable years ending on or after
7        December 31, 1988, dividends received or deemed
8        received or paid or deemed paid under Sections 951
9        through 965 of the Internal Revenue Code, exceed the
10        amount of the modification provided under subparagraph
11        (G) of paragraph (2) of this subsection (b) which is
12        related to such dividends, and including, for taxable
13        years ending on or after December 31, 2008, dividends
14        received from a captive real estate investment trust;
15        plus (ii) 100% of the amount by which dividends,
16        included in taxable income and received, including,
17        for taxable years ending on or after December 31,
18        1988, dividends received or deemed received or paid or
19        deemed paid under Sections 951 through 964 of the
20        Internal Revenue Code and including, for taxable years
21        ending on or after December 31, 2008, dividends
22        received from a captive real estate investment trust,
23        from any such corporation specified in clause (i) that
24        would but for the provisions of Section 1504(b)(3) of
25        the Internal Revenue Code be treated as a member of the
26        affiliated group which includes the dividend

 

 

SB3489- 49 -LRB103 35047 HLH 64992 b

1        recipient, exceed the amount of the modification
2        provided under subparagraph (G) of paragraph (2) of
3        this subsection (b) which is related to such
4        dividends. For taxable years ending on or after June
5        30, 2021, (i) for purposes of this subparagraph, the
6        term "dividend" does not include any amount treated as
7        a dividend under Section 1248 of the Internal Revenue
8        Code, and (ii) this subparagraph shall not apply to
9        dividends for which a deduction is allowed under
10        Section 245(a) of the Internal Revenue Code. This
11        subparagraph (O) is exempt from the provisions of
12        Section 250 of this Act;
13            (P) An amount equal to any contribution made to a
14        job training project established pursuant to the Tax
15        Increment Allocation Redevelopment Act;
16            (Q) An amount equal to the amount of the deduction
17        used to compute the federal income tax credit for
18        restoration of substantial amounts held under claim of
19        right for the taxable year pursuant to Section 1341 of
20        the Internal Revenue Code;
21            (R) On and after July 20, 1999, in the case of an
22        attorney-in-fact with respect to whom an interinsurer
23        or a reciprocal insurer has made the election under
24        Section 835 of the Internal Revenue Code, 26 U.S.C.
25        835, an amount equal to the excess, if any, of the
26        amounts paid or incurred by that interinsurer or

 

 

SB3489- 50 -LRB103 35047 HLH 64992 b

1        reciprocal insurer in the taxable year to the
2        attorney-in-fact over the deduction allowed to that
3        interinsurer or reciprocal insurer with respect to the
4        attorney-in-fact under Section 835(b) of the Internal
5        Revenue Code for the taxable year; the provisions of
6        this subparagraph are exempt from the provisions of
7        Section 250;
8            (S) For taxable years ending on or after December
9        31, 1997, in the case of a Subchapter S corporation, an
10        amount equal to all amounts of income allocable to a
11        shareholder subject to the Personal Property Tax
12        Replacement Income Tax imposed by subsections (c) and
13        (d) of Section 201 of this Act, including amounts
14        allocable to organizations exempt from federal income
15        tax by reason of Section 501(a) of the Internal
16        Revenue Code. This subparagraph (S) is exempt from the
17        provisions of Section 250;
18            (T) For taxable years 2001 and thereafter, for the
19        taxable year in which the bonus depreciation deduction
20        is taken on the taxpayer's federal income tax return
21        under subsection (k) of Section 168 of the Internal
22        Revenue Code and for each applicable taxable year
23        thereafter, an amount equal to "x", where:
24                (1) "y" equals the amount of the depreciation
25            deduction taken for the taxable year on the
26            taxpayer's federal income tax return on property

 

 

SB3489- 51 -LRB103 35047 HLH 64992 b

1            for which the bonus depreciation deduction was
2            taken in any year under subsection (k) of Section
3            168 of the Internal Revenue Code, but not
4            including the bonus depreciation deduction;
5                (2) for taxable years ending on or before
6            December 31, 2005, "x" equals "y" multiplied by 30
7            and then divided by 70 (or "y" multiplied by
8            0.429); and
9                (3) for taxable years ending after December
10            31, 2005:
11                    (i) for property on which a bonus
12                depreciation deduction of 30% of the adjusted
13                basis was taken, "x" equals "y" multiplied by
14                30 and then divided by 70 (or "y" multiplied
15                by 0.429);
16                    (ii) for property on which a bonus
17                depreciation deduction of 50% of the adjusted
18                basis was taken, "x" equals "y" multiplied by
19                1.0;
20                    (iii) for property on which a bonus
21                depreciation deduction of 100% of the adjusted
22                basis was taken in a taxable year ending on or
23                after December 31, 2021, "x" equals the
24                depreciation deduction that would be allowed
25                on that property if the taxpayer had made the
26                election under Section 168(k)(7) of the

 

 

SB3489- 52 -LRB103 35047 HLH 64992 b

1                Internal Revenue Code to not claim bonus
2                depreciation on that property; and
3                    (iv) for property on which a bonus
4                depreciation deduction of a percentage other
5                than 30%, 50% or 100% of the adjusted basis
6                was taken in a taxable year ending on or after
7                December 31, 2021, "x" equals "y" multiplied
8                by 100 times the percentage bonus depreciation
9                on the property (that is, 100(bonus%)) and
10                then divided by 100 times 1 minus the
11                percentage bonus depreciation on the property
12                (that is, 100(1–bonus%)).
13            The aggregate amount deducted under this
14        subparagraph in all taxable years for any one piece of
15        property may not exceed the amount of the bonus
16        depreciation deduction taken on that property on the
17        taxpayer's federal income tax return under subsection
18        (k) of Section 168 of the Internal Revenue Code. This
19        subparagraph (T) is exempt from the provisions of
20        Section 250;
21            (U) If the taxpayer sells, transfers, abandons, or
22        otherwise disposes of property for which the taxpayer
23        was required in any taxable year to make an addition
24        modification under subparagraph (E-10), then an amount
25        equal to that addition modification.
26            If the taxpayer continues to own property through

 

 

SB3489- 53 -LRB103 35047 HLH 64992 b

1        the last day of the last tax year for which a
2        subtraction is allowed with respect to that property
3        under subparagraph (T) and for which the taxpayer was
4        required in any taxable year to make an addition
5        modification under subparagraph (E-10), then an amount
6        equal to that addition modification.
7            The taxpayer is allowed to take the deduction
8        under this subparagraph only once with respect to any
9        one piece of property.
10            This subparagraph (U) is exempt from the
11        provisions of Section 250;
12            (V) The amount of: (i) any interest income (net of
13        the deductions allocable thereto) taken into account
14        for the taxable year with respect to a transaction
15        with a taxpayer that is required to make an addition
16        modification with respect to such transaction under
17        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
18        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
19        the amount of such addition modification, (ii) any
20        income from intangible property (net of the deductions
21        allocable thereto) taken into account for the taxable
22        year with respect to a transaction with a taxpayer
23        that is required to make an addition modification with
24        respect to such transaction under Section
25        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
26        203(d)(2)(D-8), but not to exceed the amount of such

 

 

SB3489- 54 -LRB103 35047 HLH 64992 b

1        addition modification, and (iii) any insurance premium
2        income (net of deductions allocable thereto) taken
3        into account for the taxable year with respect to a
4        transaction with a taxpayer that is required to make
5        an addition modification with respect to such
6        transaction under Section 203(a)(2)(D-19), Section
7        203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
8        203(d)(2)(D-9), but not to exceed the amount of that
9        addition modification. This subparagraph (V) is exempt
10        from the provisions of Section 250;
11            (W) An amount equal to the interest income taken
12        into account for the taxable year (net of the
13        deductions allocable thereto) with respect to
14        transactions with (i) a foreign person who would be a
15        member of the taxpayer's unitary business group but
16        for the fact that the foreign person's business
17        activity outside the United States is 80% or more of
18        that person's total business activity and (ii) for
19        taxable years ending on or after December 31, 2008, to
20        a person who would be a member of the same unitary
21        business group but for the fact that the person is
22        prohibited under Section 1501(a)(27) from being
23        included in the unitary business group because he or
24        she is ordinarily required to apportion business
25        income under different subsections of Section 304, but
26        not to exceed the addition modification required to be

 

 

SB3489- 55 -LRB103 35047 HLH 64992 b

1        made for the same taxable year under Section
2        203(b)(2)(E-12) for interest paid, accrued, or
3        incurred, directly or indirectly, to the same person.
4        This subparagraph (W) is exempt from the provisions of
5        Section 250;
6            (X) An amount equal to the income from intangible
7        property taken into account for the taxable year (net
8        of the deductions allocable thereto) with respect to
9        transactions with (i) a foreign person who would be a
10        member of the taxpayer's unitary business group but
11        for the fact that the foreign person's business
12        activity outside the United States is 80% or more of
13        that person's total business activity and (ii) for
14        taxable years ending on or after December 31, 2008, to
15        a person who would be a member of the same unitary
16        business group but for the fact that the person is
17        prohibited under Section 1501(a)(27) from being
18        included in the unitary business group because he or
19        she is ordinarily required to apportion business
20        income under different subsections of Section 304, but
21        not to exceed the addition modification required to be
22        made for the same taxable year under Section
23        203(b)(2)(E-13) for intangible expenses and costs
24        paid, accrued, or incurred, directly or indirectly, to
25        the same foreign person. This subparagraph (X) is
26        exempt from the provisions of Section 250;

 

 

SB3489- 56 -LRB103 35047 HLH 64992 b

1            (Y) For taxable years ending on or after December
2        31, 2011, in the case of a taxpayer who was required to
3        add back any insurance premiums under Section
4        203(b)(2)(E-14), such taxpayer may elect to subtract
5        that part of a reimbursement received from the
6        insurance company equal to the amount of the expense
7        or loss (including expenses incurred by the insurance
8        company) that would have been taken into account as a
9        deduction for federal income tax purposes if the
10        expense or loss had been uninsured. If a taxpayer
11        makes the election provided for by this subparagraph
12        (Y), the insurer to which the premiums were paid must
13        add back to income the amount subtracted by the
14        taxpayer pursuant to this subparagraph (Y). This
15        subparagraph (Y) is exempt from the provisions of
16        Section 250; and
17            (Z) The difference between the nondeductible
18        controlled foreign corporation dividends under Section
19        965(e)(3) of the Internal Revenue Code over the
20        taxable income of the taxpayer, computed without
21        regard to Section 965(e)(2)(A) of the Internal Revenue
22        Code, and without regard to any net operating loss
23        deduction. This subparagraph (Z) is exempt from the
24        provisions of Section 250.
25        (3) Special rule. For purposes of paragraph (2)(A),
26    "gross income" in the case of a life insurance company,

 

 

SB3489- 57 -LRB103 35047 HLH 64992 b

1    for tax years ending on and after December 31, 1994, and
2    prior to December 31, 2011, shall mean the gross
3    investment income for the taxable year and, for tax years
4    ending on or after December 31, 2011, shall mean all
5    amounts included in life insurance gross income under
6    Section 803(a)(3) of the Internal Revenue Code.
 
7    (c) Trusts and estates.
8        (1) In general. In the case of a trust or estate, base
9    income means an amount equal to the taxpayer's taxable
10    income for the taxable year as modified by paragraph (2).
11        (2) Modifications. Subject to the provisions of
12    paragraph (3), the taxable income referred to in paragraph
13    (1) shall be modified by adding thereto the sum of the
14    following amounts:
15            (A) An amount equal to all amounts paid or accrued
16        to the taxpayer as interest or dividends during the
17        taxable year to the extent excluded from gross income
18        in the computation of taxable income;
19            (B) In the case of (i) an estate, $600; (ii) a
20        trust which, under its governing instrument, is
21        required to distribute all of its income currently,
22        $300; and (iii) any other trust, $100, but in each such
23        case, only to the extent such amount was deducted in
24        the computation of taxable income;
25            (C) An amount equal to the amount of tax imposed by

 

 

SB3489- 58 -LRB103 35047 HLH 64992 b

1        this Act to the extent deducted from gross income in
2        the computation of taxable income for the taxable
3        year;
4            (D) The amount of any net operating loss deduction
5        taken in arriving at taxable income, other than a net
6        operating loss carried forward from a taxable year
7        ending prior to December 31, 1986;
8            (E) For taxable years in which a net operating
9        loss carryback or carryforward from a taxable year
10        ending prior to December 31, 1986 is an element of
11        taxable income under paragraph (1) of subsection (e)
12        or subparagraph (E) of paragraph (2) of subsection
13        (e), the amount by which addition modifications other
14        than those provided by this subparagraph (E) exceeded
15        subtraction modifications in such taxable year, with
16        the following limitations applied in the order that
17        they are listed:
18                (i) the addition modification relating to the
19            net operating loss carried back or forward to the
20            taxable year from any taxable year ending prior to
21            December 31, 1986 shall be reduced by the amount
22            of addition modification under this subparagraph
23            (E) which related to that net operating loss and
24            which was taken into account in calculating the
25            base income of an earlier taxable year, and
26                (ii) the addition modification relating to the

 

 

SB3489- 59 -LRB103 35047 HLH 64992 b

1            net operating loss carried back or forward to the
2            taxable year from any taxable year ending prior to
3            December 31, 1986 shall not exceed the amount of
4            such carryback or carryforward;
5            For taxable years in which there is a net
6        operating loss carryback or carryforward from more
7        than one other taxable year ending prior to December
8        31, 1986, the addition modification provided in this
9        subparagraph (E) shall be the sum of the amounts
10        computed independently under the preceding provisions
11        of this subparagraph (E) for each such taxable year;
12            (F) For taxable years ending on or after January
13        1, 1989, an amount equal to the tax deducted pursuant
14        to Section 164 of the Internal Revenue Code if the
15        trust or estate is claiming the same tax for purposes
16        of the Illinois foreign tax credit under Section 601
17        of this Act;
18            (G) An amount equal to the amount of the capital
19        gain deduction allowable under the Internal Revenue
20        Code, to the extent deducted from gross income in the
21        computation of taxable income;
22            (G-5) For taxable years ending after December 31,
23        1997, an amount equal to any eligible remediation
24        costs that the trust or estate deducted in computing
25        adjusted gross income and for which the trust or
26        estate claims a credit under subsection (l) of Section

 

 

SB3489- 60 -LRB103 35047 HLH 64992 b

1        201;
2            (G-10) For taxable years 2001 and thereafter, an
3        amount equal to the bonus depreciation deduction taken
4        on the taxpayer's federal income tax return for the
5        taxable year under subsection (k) of Section 168 of
6        the Internal Revenue Code; and
7            (G-11) If the taxpayer sells, transfers, abandons,
8        or otherwise disposes of property for which the
9        taxpayer was required in any taxable year to make an
10        addition modification under subparagraph (G-10), then
11        an amount equal to the aggregate amount of the
12        deductions taken in all taxable years under
13        subparagraph (R) with respect to that property.
14            If the taxpayer continues to own property through
15        the last day of the last tax year for which a
16        subtraction is allowed with respect to that property
17        under subparagraph (R) and for which the taxpayer was
18        allowed in any taxable year to make a subtraction
19        modification under subparagraph (R), then an amount
20        equal to that subtraction modification.
21            The taxpayer is required to make the addition
22        modification under this subparagraph only once with
23        respect to any one piece of property;
24            (G-12) An amount equal to the amount otherwise
25        allowed as a deduction in computing base income for
26        interest paid, accrued, or incurred, directly or

 

 

SB3489- 61 -LRB103 35047 HLH 64992 b

1        indirectly, (i) for taxable years ending on or after
2        December 31, 2004, to a foreign person who would be a
3        member of the same unitary business group but for the
4        fact that the foreign person's business activity
5        outside the United States is 80% or more of the foreign
6        person's total business activity and (ii) for taxable
7        years ending on or after December 31, 2008, to a person
8        who would be a member of the same unitary business
9        group but for the fact that the person is prohibited
10        under Section 1501(a)(27) from being included in the
11        unitary business group because he or she is ordinarily
12        required to apportion business income under different
13        subsections of Section 304. The addition modification
14        required by this subparagraph shall be reduced to the
15        extent that dividends were included in base income of
16        the unitary group for the same taxable year and
17        received by the taxpayer or by a member of the
18        taxpayer's unitary business group (including amounts
19        included in gross income pursuant to Sections 951
20        through 964 of the Internal Revenue Code and amounts
21        included in gross income under Section 78 of the
22        Internal Revenue Code) with respect to the stock of
23        the same person to whom the interest was paid,
24        accrued, or incurred.
25            This paragraph shall not apply to the following:
26                (i) an item of interest paid, accrued, or

 

 

SB3489- 62 -LRB103 35047 HLH 64992 b

1            incurred, directly or indirectly, to a person who
2            is subject in a foreign country or state, other
3            than a state which requires mandatory unitary
4            reporting, to a tax on or measured by net income
5            with respect to such interest; or
6                (ii) an item of interest paid, accrued, or
7            incurred, directly or indirectly, to a person if
8            the taxpayer can establish, based on a
9            preponderance of the evidence, both of the
10            following:
11                    (a) the person, during the same taxable
12                year, paid, accrued, or incurred, the interest
13                to a person that is not a related member, and
14                    (b) the transaction giving rise to the
15                interest expense between the taxpayer and the
16                person did not have as a principal purpose the
17                avoidance of Illinois income tax, and is paid
18                pursuant to a contract or agreement that
19                reflects an arm's-length interest rate and
20                terms; or
21                (iii) the taxpayer can establish, based on
22            clear and convincing evidence, that the interest
23            paid, accrued, or incurred relates to a contract
24            or agreement entered into at arm's-length rates
25            and terms and the principal purpose for the
26            payment is not federal or Illinois tax avoidance;

 

 

SB3489- 63 -LRB103 35047 HLH 64992 b

1            or
2                (iv) an item of interest paid, accrued, or
3            incurred, directly or indirectly, to a person if
4            the taxpayer establishes by clear and convincing
5            evidence that the adjustments are unreasonable; or
6            if the taxpayer and the Director agree in writing
7            to the application or use of an alternative method
8            of apportionment under Section 304(f).
9                Nothing in this subsection shall preclude the
10            Director from making any other adjustment
11            otherwise allowed under Section 404 of this Act
12            for any tax year beginning after the effective
13            date of this amendment provided such adjustment is
14            made pursuant to regulation adopted by the
15            Department and such regulations provide methods
16            and standards by which the Department will utilize
17            its authority under Section 404 of this Act;
18            (G-13) An amount equal to the amount of intangible
19        expenses and costs otherwise allowed as a deduction in
20        computing base income, and that were paid, accrued, or
21        incurred, directly or indirectly, (i) for taxable
22        years ending on or after December 31, 2004, to a
23        foreign person who would be a member of the same
24        unitary business group but for the fact that the
25        foreign person's business activity outside the United
26        States is 80% or more of that person's total business

 

 

SB3489- 64 -LRB103 35047 HLH 64992 b

1        activity and (ii) for taxable years ending on or after
2        December 31, 2008, to a person who would be a member of
3        the same unitary business group but for the fact that
4        the person is prohibited under Section 1501(a)(27)
5        from being included in the unitary business group
6        because he or she is ordinarily required to apportion
7        business income under different subsections of Section
8        304. The addition modification required by this
9        subparagraph shall be reduced to the extent that
10        dividends were included in base income of the unitary
11        group for the same taxable year and received by the
12        taxpayer or by a member of the taxpayer's unitary
13        business group (including amounts included in gross
14        income pursuant to Sections 951 through 964 of the
15        Internal Revenue Code and amounts included in gross
16        income under Section 78 of the Internal Revenue Code)
17        with respect to the stock of the same person to whom
18        the intangible expenses and costs were directly or
19        indirectly paid, incurred, or accrued. The preceding
20        sentence shall not apply to the extent that the same
21        dividends caused a reduction to the addition
22        modification required under Section 203(c)(2)(G-12) of
23        this Act. As used in this subparagraph, the term
24        "intangible expenses and costs" includes: (1)
25        expenses, losses, and costs for or related to the
26        direct or indirect acquisition, use, maintenance or

 

 

SB3489- 65 -LRB103 35047 HLH 64992 b

1        management, ownership, sale, exchange, or any other
2        disposition of intangible property; (2) losses
3        incurred, directly or indirectly, from factoring
4        transactions or discounting transactions; (3) royalty,
5        patent, technical, and copyright fees; (4) licensing
6        fees; and (5) other similar expenses and costs. For
7        purposes of this subparagraph, "intangible property"
8        includes patents, patent applications, trade names,
9        trademarks, service marks, copyrights, mask works,
10        trade secrets, and similar types of intangible assets.
11            This paragraph shall not apply to the following:
12                (i) any item of intangible expenses or costs
13            paid, accrued, or incurred, directly or
14            indirectly, from a transaction with a person who
15            is subject in a foreign country or state, other
16            than a state which requires mandatory unitary
17            reporting, to a tax on or measured by net income
18            with respect to such item; or
19                (ii) any item of intangible expense or cost
20            paid, accrued, or incurred, directly or
21            indirectly, if the taxpayer can establish, based
22            on a preponderance of the evidence, both of the
23            following:
24                    (a) the person during the same taxable
25                year paid, accrued, or incurred, the
26                intangible expense or cost to a person that is

 

 

SB3489- 66 -LRB103 35047 HLH 64992 b

1                not a related member, and
2                    (b) the transaction giving rise to the
3                intangible expense or cost between the
4                taxpayer and the person did not have as a
5                principal purpose the avoidance of Illinois
6                income tax, and is paid pursuant to a contract
7                or agreement that reflects arm's-length terms;
8                or
9                (iii) any item of intangible expense or cost
10            paid, accrued, or incurred, directly or
11            indirectly, from a transaction with a person if
12            the taxpayer establishes by clear and convincing
13            evidence, that the adjustments are unreasonable;
14            or if the taxpayer and the Director agree in
15            writing to the application or use of an
16            alternative method of apportionment under Section
17            304(f);
18                Nothing in this subsection shall preclude the
19            Director from making any other adjustment
20            otherwise allowed under Section 404 of this Act
21            for any tax year beginning after the effective
22            date of this amendment provided such adjustment is
23            made pursuant to regulation adopted by the
24            Department and such regulations provide methods
25            and standards by which the Department will utilize
26            its authority under Section 404 of this Act;

 

 

SB3489- 67 -LRB103 35047 HLH 64992 b

1            (G-14) For taxable years ending on or after
2        December 31, 2008, an amount equal to the amount of
3        insurance premium expenses and costs otherwise allowed
4        as a deduction in computing base income, and that were
5        paid, accrued, or incurred, directly or indirectly, to
6        a person who would be a member of the same unitary
7        business group but for the fact that the person is
8        prohibited under Section 1501(a)(27) from being
9        included in the unitary business group because he or
10        she is ordinarily required to apportion business
11        income under different subsections of Section 304. The
12        addition modification required by this subparagraph
13        shall be reduced to the extent that dividends were
14        included in base income of the unitary group for the
15        same taxable year and received by the taxpayer or by a
16        member of the taxpayer's unitary business group
17        (including amounts included in gross income under
18        Sections 951 through 964 of the Internal Revenue Code
19        and amounts included in gross income under Section 78
20        of the Internal Revenue Code) with respect to the
21        stock of the same person to whom the premiums and costs
22        were directly or indirectly paid, incurred, or
23        accrued. The preceding sentence does not apply to the
24        extent that the same dividends caused a reduction to
25        the addition modification required under Section
26        203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this

 

 

SB3489- 68 -LRB103 35047 HLH 64992 b

1        Act;
2            (G-15) An amount equal to the credit allowable to
3        the taxpayer under Section 218(a) of this Act,
4        determined without regard to Section 218(c) of this
5        Act;
6            (G-16) For taxable years ending on or after
7        December 31, 2017, an amount equal to the deduction
8        allowed under Section 199 of the Internal Revenue Code
9        for the taxable year;
10    and by deducting from the total so obtained the sum of the
11    following amounts:
12            (H) An amount equal to all amounts included in
13        such total pursuant to the provisions of Sections
14        402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 408
15        of the Internal Revenue Code or included in such total
16        as distributions under the provisions of any
17        retirement or disability plan for employees of any
18        governmental agency or unit, or retirement payments to
19        retired partners, which payments are excluded in
20        computing net earnings from self employment by Section
21        1402 of the Internal Revenue Code and regulations
22        adopted pursuant thereto;
23            (I) The valuation limitation amount;
24            (J) An amount equal to the amount of any tax
25        imposed by this Act which was refunded to the taxpayer
26        and included in such total for the taxable year;

 

 

SB3489- 69 -LRB103 35047 HLH 64992 b

1            (K) An amount equal to all amounts included in
2        taxable income as modified by subparagraphs (A), (B),
3        (C), (D), (E), (F) and (G) which are exempt from
4        taxation by this State either by reason of its
5        statutes or Constitution or by reason of the
6        Constitution, treaties or statutes of the United
7        States; provided that, in the case of any statute of
8        this State that exempts income derived from bonds or
9        other obligations from the tax imposed under this Act,
10        the amount exempted shall be the interest net of bond
11        premium amortization;
12            (L) With the exception of any amounts subtracted
13        under subparagraph (K), an amount equal to the sum of
14        all amounts disallowed as deductions by (i) Sections
15        171(a)(2) and 265(a)(2) of the Internal Revenue Code,
16        and all amounts of expenses allocable to interest and
17        disallowed as deductions by Section 265(a)(1) of the
18        Internal Revenue Code; and (ii) for taxable years
19        ending on or after August 13, 1999, Sections
20        171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
21        Internal Revenue Code, plus, (iii) for taxable years
22        ending on or after December 31, 2011, Section
23        45G(e)(3) of the Internal Revenue Code and, for
24        taxable years ending on or after December 31, 2008,
25        any amount included in gross income under Section 87
26        of the Internal Revenue Code; the provisions of this

 

 

SB3489- 70 -LRB103 35047 HLH 64992 b

1        subparagraph are exempt from the provisions of Section
2        250;
3            (M) An amount equal to those dividends included in
4        such total which were paid by a corporation which
5        conducts business operations in a River Edge
6        Redevelopment Zone or zones created under the River
7        Edge Redevelopment Zone Act and conducts substantially
8        all of its operations in a River Edge Redevelopment
9        Zone or zones. This subparagraph (M) is exempt from
10        the provisions of Section 250;
11            (N) An amount equal to any contribution made to a
12        job training project established pursuant to the Tax
13        Increment Allocation Redevelopment Act;
14            (O) An amount equal to those dividends included in
15        such total that were paid by a corporation that
16        conducts business operations in a federally designated
17        Foreign Trade Zone or Sub-Zone and that is designated
18        a High Impact Business located in Illinois; provided
19        that dividends eligible for the deduction provided in
20        subparagraph (M) of paragraph (2) of this subsection
21        shall not be eligible for the deduction provided under
22        this subparagraph (O);
23            (P) An amount equal to the amount of the deduction
24        used to compute the federal income tax credit for
25        restoration of substantial amounts held under claim of
26        right for the taxable year pursuant to Section 1341 of

 

 

SB3489- 71 -LRB103 35047 HLH 64992 b

1        the Internal Revenue Code;
2            (Q) For taxable year 1999 and thereafter, an
3        amount equal to the amount of any (i) distributions,
4        to the extent includible in gross income for federal
5        income tax purposes, made to the taxpayer because of
6        his or her status as a victim of persecution for racial
7        or religious reasons by Nazi Germany or any other Axis
8        regime or as an heir of the victim and (ii) items of
9        income, to the extent includible in gross income for
10        federal income tax purposes, attributable to, derived
11        from or in any way related to assets stolen from,
12        hidden from, or otherwise lost to a victim of
13        persecution for racial or religious reasons by Nazi
14        Germany or any other Axis regime immediately prior to,
15        during, and immediately after World War II, including,
16        but not limited to, interest on the proceeds
17        receivable as insurance under policies issued to a
18        victim of persecution for racial or religious reasons
19        by Nazi Germany or any other Axis regime by European
20        insurance companies immediately prior to and during
21        World War II; provided, however, this subtraction from
22        federal adjusted gross income does not apply to assets
23        acquired with such assets or with the proceeds from
24        the sale of such assets; provided, further, this
25        paragraph shall only apply to a taxpayer who was the
26        first recipient of such assets after their recovery

 

 

SB3489- 72 -LRB103 35047 HLH 64992 b

1        and who is a victim of persecution for racial or
2        religious reasons by Nazi Germany or any other Axis
3        regime or as an heir of the victim. The amount of and
4        the eligibility for any public assistance, benefit, or
5        similar entitlement is not affected by the inclusion
6        of items (i) and (ii) of this paragraph in gross income
7        for federal income tax purposes. This paragraph is
8        exempt from the provisions of Section 250;
9            (R) For taxable years 2001 and thereafter, for the
10        taxable year in which the bonus depreciation deduction
11        is taken on the taxpayer's federal income tax return
12        under subsection (k) of Section 168 of the Internal
13        Revenue Code and for each applicable taxable year
14        thereafter, an amount equal to "x", where:
15                (1) "y" equals the amount of the depreciation
16            deduction taken for the taxable year on the
17            taxpayer's federal income tax return on property
18            for which the bonus depreciation deduction was
19            taken in any year under subsection (k) of Section
20            168 of the Internal Revenue Code, but not
21            including the bonus depreciation deduction;
22                (2) for taxable years ending on or before
23            December 31, 2005, "x" equals "y" multiplied by 30
24            and then divided by 70 (or "y" multiplied by
25            0.429); and
26                (3) for taxable years ending after December

 

 

SB3489- 73 -LRB103 35047 HLH 64992 b

1            31, 2005:
2                    (i) for property on which a bonus
3                depreciation deduction of 30% of the adjusted
4                basis was taken, "x" equals "y" multiplied by
5                30 and then divided by 70 (or "y" multiplied
6                by 0.429);
7                    (ii) for property on which a bonus
8                depreciation deduction of 50% of the adjusted
9                basis was taken, "x" equals "y" multiplied by
10                1.0;
11                    (iii) for property on which a bonus
12                depreciation deduction of 100% of the adjusted
13                basis was taken in a taxable year ending on or
14                after December 31, 2021, "x" equals the
15                depreciation deduction that would be allowed
16                on that property if the taxpayer had made the
17                election under Section 168(k)(7) of the
18                Internal Revenue Code to not claim bonus
19                depreciation on that property; and
20                    (iv) for property on which a bonus
21                depreciation deduction of a percentage other
22                than 30%, 50% or 100% of the adjusted basis
23                was taken in a taxable year ending on or after
24                December 31, 2021, "x" equals "y" multiplied
25                by 100 times the percentage bonus depreciation
26                on the property (that is, 100(bonus%)) and

 

 

SB3489- 74 -LRB103 35047 HLH 64992 b

1                then divided by 100 times 1 minus the
2                percentage bonus depreciation on the property
3                (that is, 100(1–bonus%)).
4            The aggregate amount deducted under this
5        subparagraph in all taxable years for any one piece of
6        property may not exceed the amount of the bonus
7        depreciation deduction taken on that property on the
8        taxpayer's federal income tax return under subsection
9        (k) of Section 168 of the Internal Revenue Code. This
10        subparagraph (R) is exempt from the provisions of
11        Section 250;
12            (S) If the taxpayer sells, transfers, abandons, or
13        otherwise disposes of property for which the taxpayer
14        was required in any taxable year to make an addition
15        modification under subparagraph (G-10), then an amount
16        equal to that addition modification.
17            If the taxpayer continues to own property through
18        the last day of the last tax year for which a
19        subtraction is allowed with respect to that property
20        under subparagraph (R) and for which the taxpayer was
21        required in any taxable year to make an addition
22        modification under subparagraph (G-10), then an amount
23        equal to that addition modification.
24            The taxpayer is allowed to take the deduction
25        under this subparagraph only once with respect to any
26        one piece of property.

 

 

SB3489- 75 -LRB103 35047 HLH 64992 b

1            This subparagraph (S) is exempt from the
2        provisions of Section 250;
3            (T) The amount of (i) any interest income (net of
4        the deductions allocable thereto) taken into account
5        for the taxable year with respect to a transaction
6        with a taxpayer that is required to make an addition
7        modification with respect to such transaction under
8        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
9        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
10        the amount of such addition modification and (ii) any
11        income from intangible property (net of the deductions
12        allocable thereto) taken into account for the taxable
13        year with respect to a transaction with a taxpayer
14        that is required to make an addition modification with
15        respect to such transaction under Section
16        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
17        203(d)(2)(D-8), but not to exceed the amount of such
18        addition modification. This subparagraph (T) is exempt
19        from the provisions of Section 250;
20            (U) An amount equal to the interest income taken
21        into account for the taxable year (net of the
22        deductions allocable thereto) with respect to
23        transactions with (i) a foreign person who would be a
24        member of the taxpayer's unitary business group but
25        for the fact the foreign person's business activity
26        outside the United States is 80% or more of that

 

 

SB3489- 76 -LRB103 35047 HLH 64992 b

1        person's total business activity and (ii) for taxable
2        years ending on or after December 31, 2008, to a person
3        who would be a member of the same unitary business
4        group but for the fact that the person is prohibited
5        under Section 1501(a)(27) from being included in the
6        unitary business group because he or she is ordinarily
7        required to apportion business income under different
8        subsections of Section 304, but not to exceed the
9        addition modification required to be made for the same
10        taxable year under Section 203(c)(2)(G-12) for
11        interest paid, accrued, or incurred, directly or
12        indirectly, to the same person. This subparagraph (U)
13        is exempt from the provisions of Section 250;
14            (V) An amount equal to the income from intangible
15        property taken into account for the taxable year (net
16        of the deductions allocable thereto) with respect to
17        transactions with (i) a foreign person who would be a
18        member of the taxpayer's unitary business group but
19        for the fact that the foreign person's business
20        activity outside the United States is 80% or more of
21        that person's total business activity and (ii) for
22        taxable years ending on or after December 31, 2008, to
23        a person who would be a member of the same unitary
24        business group but for the fact that the person is
25        prohibited under Section 1501(a)(27) from being
26        included in the unitary business group because he or

 

 

SB3489- 77 -LRB103 35047 HLH 64992 b

1        she is ordinarily required to apportion business
2        income under different subsections of Section 304, but
3        not to exceed the addition modification required to be
4        made for the same taxable year under Section
5        203(c)(2)(G-13) for intangible expenses and costs
6        paid, accrued, or incurred, directly or indirectly, to
7        the same foreign person. This subparagraph (V) is
8        exempt from the provisions of Section 250;
9            (W) in the case of an estate, an amount equal to
10        all amounts included in such total pursuant to the
11        provisions of Section 111 of the Internal Revenue Code
12        as a recovery of items previously deducted by the
13        decedent from adjusted gross income in the computation
14        of taxable income. This subparagraph (W) is exempt
15        from Section 250;
16            (X) an amount equal to the refund included in such
17        total of any tax deducted for federal income tax
18        purposes, to the extent that deduction was added back
19        under subparagraph (F). This subparagraph (X) is
20        exempt from the provisions of Section 250;
21            (Y) For taxable years ending on or after December
22        31, 2011, in the case of a taxpayer who was required to
23        add back any insurance premiums under Section
24        203(c)(2)(G-14), such taxpayer may elect to subtract
25        that part of a reimbursement received from the
26        insurance company equal to the amount of the expense

 

 

SB3489- 78 -LRB103 35047 HLH 64992 b

1        or loss (including expenses incurred by the insurance
2        company) that would have been taken into account as a
3        deduction for federal income tax purposes if the
4        expense or loss had been uninsured. If a taxpayer
5        makes the election provided for by this subparagraph
6        (Y), the insurer to which the premiums were paid must
7        add back to income the amount subtracted by the
8        taxpayer pursuant to this subparagraph (Y). This
9        subparagraph (Y) is exempt from the provisions of
10        Section 250; and
11            (Z) For taxable years beginning after December 31,
12        2018 and before January 1, 2026, the amount of excess
13        business loss of the taxpayer disallowed as a
14        deduction by Section 461(l)(1)(B) of the Internal
15        Revenue Code.
16        (3) Limitation. The amount of any modification
17    otherwise required under this subsection shall, under
18    regulations prescribed by the Department, be adjusted by
19    any amounts included therein which were properly paid,
20    credited, or required to be distributed, or permanently
21    set aside for charitable purposes pursuant to Internal
22    Revenue Code Section 642(c) during the taxable year.
 
23    (d) Partnerships.
24        (1) In general. In the case of a partnership, base
25    income means an amount equal to the taxpayer's taxable

 

 

SB3489- 79 -LRB103 35047 HLH 64992 b

1    income for the taxable year as modified by paragraph (2).
2        (2) Modifications. The taxable income referred to in
3    paragraph (1) shall be modified by adding thereto the sum
4    of the following amounts:
5            (A) An amount equal to all amounts paid or accrued
6        to the taxpayer as interest or dividends during the
7        taxable year to the extent excluded from gross income
8        in the computation of taxable income;
9            (B) An amount equal to the amount of tax imposed by
10        this Act to the extent deducted from gross income for
11        the taxable year;
12            (C) The amount of deductions allowed to the
13        partnership pursuant to Section 707 (c) of the
14        Internal Revenue Code in calculating its taxable
15        income;
16            (D) An amount equal to the amount of the capital
17        gain deduction allowable under the Internal Revenue
18        Code, to the extent deducted from gross income in the
19        computation of taxable income;
20            (D-5) For taxable years 2001 and thereafter, an
21        amount equal to the bonus depreciation deduction taken
22        on the taxpayer's federal income tax return for the
23        taxable year under subsection (k) of Section 168 of
24        the Internal Revenue Code;
25            (D-6) If the taxpayer sells, transfers, abandons,
26        or otherwise disposes of property for which the

 

 

SB3489- 80 -LRB103 35047 HLH 64992 b

1        taxpayer was required in any taxable year to make an
2        addition modification under subparagraph (D-5), then
3        an amount equal to the aggregate amount of the
4        deductions taken in all taxable years under
5        subparagraph (O) with respect to that property.
6            If the taxpayer continues to own property through
7        the last day of the last tax year for which a
8        subtraction is allowed with respect to that property
9        under subparagraph (O) and for which the taxpayer was
10        allowed in any taxable year to make a subtraction
11        modification under subparagraph (O), then an amount
12        equal to that subtraction modification.
13            The taxpayer is required to make the addition
14        modification under this subparagraph only once with
15        respect to any one piece of property;
16            (D-7) An amount equal to the amount otherwise
17        allowed as a deduction in computing base income for
18        interest paid, accrued, or incurred, directly or
19        indirectly, (i) for taxable years ending on or after
20        December 31, 2004, to a foreign person who would be a
21        member of the same unitary business group but for the
22        fact the foreign person's business activity outside
23        the United States is 80% or more of the foreign
24        person's total business activity and (ii) for taxable
25        years ending on or after December 31, 2008, to a person
26        who would be a member of the same unitary business

 

 

SB3489- 81 -LRB103 35047 HLH 64992 b

1        group but for the fact that the person is prohibited
2        under Section 1501(a)(27) from being included in the
3        unitary business group because he or she is ordinarily
4        required to apportion business income under different
5        subsections of Section 304. The addition modification
6        required by this subparagraph shall be reduced to the
7        extent that dividends were included in base income of
8        the unitary group for the same taxable year and
9        received by the taxpayer or by a member of the
10        taxpayer's unitary business group (including amounts
11        included in gross income pursuant to Sections 951
12        through 964 of the Internal Revenue Code and amounts
13        included in gross income under Section 78 of the
14        Internal Revenue Code) with respect to the stock of
15        the same person to whom the interest was paid,
16        accrued, or incurred.
17            This paragraph shall not apply to the following:
18                (i) an item of interest paid, accrued, or
19            incurred, directly or indirectly, to a person who
20            is subject in a foreign country or state, other
21            than a state which requires mandatory unitary
22            reporting, to a tax on or measured by net income
23            with respect to such interest; or
24                (ii) an item of interest paid, accrued, or
25            incurred, directly or indirectly, to a person if
26            the taxpayer can establish, based on a

 

 

SB3489- 82 -LRB103 35047 HLH 64992 b

1            preponderance of the evidence, both of the
2            following:
3                    (a) the person, during the same taxable
4                year, paid, accrued, or incurred, the interest
5                to a person that is not a related member, and
6                    (b) the transaction giving rise to the
7                interest expense between the taxpayer and the
8                person did not have as a principal purpose the
9                avoidance of Illinois income tax, and is paid
10                pursuant to a contract or agreement that
11                reflects an arm's-length interest rate and
12                terms; or
13                (iii) the taxpayer can establish, based on
14            clear and convincing evidence, that the interest
15            paid, accrued, or incurred relates to a contract
16            or agreement entered into at arm's-length rates
17            and terms and the principal purpose for the
18            payment is not federal or Illinois tax avoidance;
19            or
20                (iv) an item of interest paid, accrued, or
21            incurred, directly or indirectly, to a person if
22            the taxpayer establishes by clear and convincing
23            evidence that the adjustments are unreasonable; or
24            if the taxpayer and the Director agree in writing
25            to the application or use of an alternative method
26            of apportionment under Section 304(f).

 

 

SB3489- 83 -LRB103 35047 HLH 64992 b

1                Nothing in this subsection shall preclude the
2            Director from making any other adjustment
3            otherwise allowed under Section 404 of this Act
4            for any tax year beginning after the effective
5            date of this amendment provided such adjustment is
6            made pursuant to regulation adopted by the
7            Department and such regulations provide methods
8            and standards by which the Department will utilize
9            its authority under Section 404 of this Act; and
10            (D-8) An amount equal to the amount of intangible
11        expenses and costs otherwise allowed as a deduction in
12        computing base income, and that were paid, accrued, or
13        incurred, directly or indirectly, (i) for taxable
14        years ending on or after December 31, 2004, to a
15        foreign person who would be a member of the same
16        unitary business group but for the fact that the
17        foreign person's business activity outside the United
18        States is 80% or more of that person's total business
19        activity and (ii) for taxable years ending on or after
20        December 31, 2008, to a person who would be a member of
21        the same unitary business group but for the fact that
22        the person is prohibited under Section 1501(a)(27)
23        from being included in the unitary business group
24        because he or she is ordinarily required to apportion
25        business income under different subsections of Section
26        304. The addition modification required by this

 

 

SB3489- 84 -LRB103 35047 HLH 64992 b

1        subparagraph shall be reduced to the extent that
2        dividends were included in base income of the unitary
3        group for the same taxable year and received by the
4        taxpayer or by a member of the taxpayer's unitary
5        business group (including amounts included in gross
6        income pursuant to Sections 951 through 964 of the
7        Internal Revenue Code and amounts included in gross
8        income under Section 78 of the Internal Revenue Code)
9        with respect to the stock of the same person to whom
10        the intangible expenses and costs were directly or
11        indirectly paid, incurred or accrued. The preceding
12        sentence shall not apply to the extent that the same
13        dividends caused a reduction to the addition
14        modification required under Section 203(d)(2)(D-7) of
15        this Act. As used in this subparagraph, the term
16        "intangible expenses and costs" includes (1) expenses,
17        losses, and costs for, or related to, the direct or
18        indirect acquisition, use, maintenance or management,
19        ownership, sale, exchange, or any other disposition of
20        intangible property; (2) losses incurred, directly or
21        indirectly, from factoring transactions or discounting
22        transactions; (3) royalty, patent, technical, and
23        copyright fees; (4) licensing fees; and (5) other
24        similar expenses and costs. For purposes of this
25        subparagraph, "intangible property" includes patents,
26        patent applications, trade names, trademarks, service

 

 

SB3489- 85 -LRB103 35047 HLH 64992 b

1        marks, copyrights, mask works, trade secrets, and
2        similar types of intangible assets;
3            This paragraph shall not apply to the following:
4                (i) any item of intangible expenses or costs
5            paid, accrued, or incurred, directly or
6            indirectly, from a transaction with a person who
7            is subject in a foreign country or state, other
8            than a state which requires mandatory unitary
9            reporting, to a tax on or measured by net income
10            with respect to such item; or
11                (ii) any item of intangible expense or cost
12            paid, accrued, or incurred, directly or
13            indirectly, if the taxpayer can establish, based
14            on a preponderance of the evidence, both of the
15            following:
16                    (a) the person during the same taxable
17                year paid, accrued, or incurred, the
18                intangible expense or cost to a person that is
19                not a related member, and
20                    (b) the transaction giving rise to the
21                intangible expense or cost between the
22                taxpayer and the person did not have as a
23                principal purpose the avoidance of Illinois
24                income tax, and is paid pursuant to a contract
25                or agreement that reflects arm's-length terms;
26                or

 

 

SB3489- 86 -LRB103 35047 HLH 64992 b

1                (iii) any item of intangible expense or cost
2            paid, accrued, or incurred, directly or
3            indirectly, from a transaction with a person if
4            the taxpayer establishes by clear and convincing
5            evidence, that the adjustments are unreasonable;
6            or if the taxpayer and the Director agree in
7            writing to the application or use of an
8            alternative method of apportionment under Section
9            304(f);
10                Nothing in this subsection shall preclude the
11            Director from making any other adjustment
12            otherwise allowed under Section 404 of this Act
13            for any tax year beginning after the effective
14            date of this amendment provided such adjustment is
15            made pursuant to regulation adopted by the
16            Department and such regulations provide methods
17            and standards by which the Department will utilize
18            its authority under Section 404 of this Act;
19            (D-9) For taxable years ending on or after
20        December 31, 2008, an amount equal to the amount of
21        insurance premium expenses and costs otherwise allowed
22        as a deduction in computing base income, and that were
23        paid, accrued, or incurred, directly or indirectly, to
24        a person who would be a member of the same unitary
25        business group but for the fact that the person is
26        prohibited under Section 1501(a)(27) from being

 

 

SB3489- 87 -LRB103 35047 HLH 64992 b

1        included in the unitary business group because he or
2        she is ordinarily required to apportion business
3        income under different subsections of Section 304. The
4        addition modification required by this subparagraph
5        shall be reduced to the extent that dividends were
6        included in base income of the unitary group for the
7        same taxable year and received by the taxpayer or by a
8        member of the taxpayer's unitary business group
9        (including amounts included in gross income under
10        Sections 951 through 964 of the Internal Revenue Code
11        and amounts included in gross income under Section 78
12        of the Internal Revenue Code) with respect to the
13        stock of the same person to whom the premiums and costs
14        were directly or indirectly paid, incurred, or
15        accrued. The preceding sentence does not apply to the
16        extent that the same dividends caused a reduction to
17        the addition modification required under Section
18        203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act;
19            (D-10) An amount equal to the credit allowable to
20        the taxpayer under Section 218(a) of this Act,
21        determined without regard to Section 218(c) of this
22        Act;
23            (D-11) For taxable years ending on or after
24        December 31, 2017, an amount equal to the deduction
25        allowed under Section 199 of the Internal Revenue Code
26        for the taxable year;

 

 

SB3489- 88 -LRB103 35047 HLH 64992 b

1    and by deducting from the total so obtained the following
2    amounts:
3            (E) The valuation limitation amount;
4            (F) An amount equal to the amount of any tax
5        imposed by this Act which was refunded to the taxpayer
6        and included in such total for the taxable year;
7            (G) An amount equal to all amounts included in
8        taxable income as modified by subparagraphs (A), (B),
9        (C) and (D) which are exempt from taxation by this
10        State either by reason of its statutes or Constitution
11        or by reason of the Constitution, treaties or statutes
12        of the United States; provided that, in the case of any
13        statute of this State that exempts income derived from
14        bonds or other obligations from the tax imposed under
15        this Act, the amount exempted shall be the interest
16        net of bond premium amortization;
17            (H) Any income of the partnership which
18        constitutes personal service income as defined in
19        Section 1348(b)(1) of the Internal Revenue Code (as in
20        effect December 31, 1981) or a reasonable allowance
21        for compensation paid or accrued for services rendered
22        by partners to the partnership, whichever is greater;
23        this subparagraph (H) is exempt from the provisions of
24        Section 250;
25            (I) An amount equal to all amounts of income
26        distributable to an entity subject to the Personal

 

 

SB3489- 89 -LRB103 35047 HLH 64992 b

1        Property Tax Replacement Income Tax imposed by
2        subsections (c) and (d) of Section 201 of this Act
3        including amounts distributable to organizations
4        exempt from federal income tax by reason of Section
5        501(a) of the Internal Revenue Code; this subparagraph
6        (I) is exempt from the provisions of Section 250;
7            (J) With the exception of any amounts subtracted
8        under subparagraph (G), an amount equal to the sum of
9        all amounts disallowed as deductions by (i) Sections
10        171(a)(2) and 265(a)(2) of the Internal Revenue Code,
11        and all amounts of expenses allocable to interest and
12        disallowed as deductions by Section 265(a)(1) of the
13        Internal Revenue Code; and (ii) for taxable years
14        ending on or after August 13, 1999, Sections
15        171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
16        Internal Revenue Code, plus, (iii) for taxable years
17        ending on or after December 31, 2011, Section
18        45G(e)(3) of the Internal Revenue Code and, for
19        taxable years ending on or after December 31, 2008,
20        any amount included in gross income under Section 87
21        of the Internal Revenue Code; the provisions of this
22        subparagraph are exempt from the provisions of Section
23        250;
24            (K) An amount equal to those dividends included in
25        such total which were paid by a corporation which
26        conducts business operations in a River Edge

 

 

SB3489- 90 -LRB103 35047 HLH 64992 b

1        Redevelopment Zone or zones created under the River
2        Edge Redevelopment Zone Act and conducts substantially
3        all of its operations from a River Edge Redevelopment
4        Zone or zones. This subparagraph (K) is exempt from
5        the provisions of Section 250;
6            (L) An amount equal to any contribution made to a
7        job training project established pursuant to the Real
8        Property Tax Increment Allocation Redevelopment Act;
9            (M) An amount equal to those dividends included in
10        such total that were paid by a corporation that
11        conducts business operations in a federally designated
12        Foreign Trade Zone or Sub-Zone and that is designated
13        a High Impact Business located in Illinois; provided
14        that dividends eligible for the deduction provided in
15        subparagraph (K) of paragraph (2) of this subsection
16        shall not be eligible for the deduction provided under
17        this subparagraph (M);
18            (N) An amount equal to the amount of the deduction
19        used to compute the federal income tax credit for
20        restoration of substantial amounts held under claim of
21        right for the taxable year pursuant to Section 1341 of
22        the Internal Revenue Code;
23            (O) For taxable years 2001 and thereafter, for the
24        taxable year in which the bonus depreciation deduction
25        is taken on the taxpayer's federal income tax return
26        under subsection (k) of Section 168 of the Internal

 

 

SB3489- 91 -LRB103 35047 HLH 64992 b

1        Revenue Code and for each applicable taxable year
2        thereafter, an amount equal to "x", where:
3                (1) "y" equals the amount of the depreciation
4            deduction taken for the taxable year on the
5            taxpayer's federal income tax return on property
6            for which the bonus depreciation deduction was
7            taken in any year under subsection (k) of Section
8            168 of the Internal Revenue Code, but not
9            including the bonus depreciation deduction;
10                (2) for taxable years ending on or before
11            December 31, 2005, "x" equals "y" multiplied by 30
12            and then divided by 70 (or "y" multiplied by
13            0.429); and
14                (3) for taxable years ending after December
15            31, 2005:
16                    (i) for property on which a bonus
17                depreciation deduction of 30% of the adjusted
18                basis was taken, "x" equals "y" multiplied by
19                30 and then divided by 70 (or "y" multiplied
20                by 0.429);
21                    (ii) for property on which a bonus
22                depreciation deduction of 50% of the adjusted
23                basis was taken, "x" equals "y" multiplied by
24                1.0;
25                    (iii) for property on which a bonus
26                depreciation deduction of 100% of the adjusted

 

 

SB3489- 92 -LRB103 35047 HLH 64992 b

1                basis was taken in a taxable year ending on or
2                after December 31, 2021, "x" equals the
3                depreciation deduction that would be allowed
4                on that property if the taxpayer had made the
5                election under Section 168(k)(7) of the
6                Internal Revenue Code to not claim bonus
7                depreciation on that property; and
8                    (iv) for property on which a bonus
9                depreciation deduction of a percentage other
10                than 30%, 50% or 100% of the adjusted basis
11                was taken in a taxable year ending on or after
12                December 31, 2021, "x" equals "y" multiplied
13                by 100 times the percentage bonus depreciation
14                on the property (that is, 100(bonus%)) and
15                then divided by 100 times 1 minus the
16                percentage bonus depreciation on the property
17                (that is, 100(1–bonus%)).
18            The aggregate amount deducted under this
19        subparagraph in all taxable years for any one piece of
20        property may not exceed the amount of the bonus
21        depreciation deduction taken on that property on the
22        taxpayer's federal income tax return under subsection
23        (k) of Section 168 of the Internal Revenue Code. This
24        subparagraph (O) is exempt from the provisions of
25        Section 250;
26            (P) If the taxpayer sells, transfers, abandons, or

 

 

SB3489- 93 -LRB103 35047 HLH 64992 b

1        otherwise disposes of property for which the taxpayer
2        was required in any taxable year to make an addition
3        modification under subparagraph (D-5), then an amount
4        equal to that addition modification.
5            If the taxpayer continues to own property through
6        the last day of the last tax year for which a
7        subtraction is allowed with respect to that property
8        under subparagraph (O) and for which the taxpayer was
9        required in any taxable year to make an addition
10        modification under subparagraph (D-5), then an amount
11        equal to that addition modification.
12            The taxpayer is allowed to take the deduction
13        under this subparagraph only once with respect to any
14        one piece of property.
15            This subparagraph (P) is exempt from the
16        provisions of Section 250;
17            (Q) The amount of (i) any interest income (net of
18        the deductions allocable thereto) taken into account
19        for the taxable year with respect to a transaction
20        with a taxpayer that is required to make an addition
21        modification with respect to such transaction under
22        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
23        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
24        the amount of such addition modification and (ii) any
25        income from intangible property (net of the deductions
26        allocable thereto) taken into account for the taxable

 

 

SB3489- 94 -LRB103 35047 HLH 64992 b

1        year with respect to a transaction with a taxpayer
2        that is required to make an addition modification with
3        respect to such transaction under Section
4        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
5        203(d)(2)(D-8), but not to exceed the amount of such
6        addition modification. This subparagraph (Q) is exempt
7        from Section 250;
8            (R) An amount equal to the interest income taken
9        into account for the taxable year (net of the
10        deductions allocable thereto) with respect to
11        transactions with (i) a foreign person who would be a
12        member of the taxpayer's unitary business group but
13        for the fact that the foreign person's business
14        activity outside the United States is 80% or more of
15        that person's total business activity and (ii) for
16        taxable years ending on or after December 31, 2008, to
17        a person who would be a member of the same unitary
18        business group but for the fact that the person is
19        prohibited under Section 1501(a)(27) from being
20        included in the unitary business group because he or
21        she is ordinarily required to apportion business
22        income under different subsections of Section 304, but
23        not to exceed the addition modification required to be
24        made for the same taxable year under Section
25        203(d)(2)(D-7) for interest paid, accrued, or
26        incurred, directly or indirectly, to the same person.

 

 

SB3489- 95 -LRB103 35047 HLH 64992 b

1        This subparagraph (R) is exempt from Section 250;
2            (S) An amount equal to the income from intangible
3        property taken into account for the taxable year (net
4        of the deductions allocable thereto) with respect to
5        transactions with (i) a foreign person who would be a
6        member of the taxpayer's unitary business group but
7        for the fact that the foreign person's business
8        activity outside the United States is 80% or more of
9        that person's total business activity and (ii) for
10        taxable years ending on or after December 31, 2008, to
11        a person who would be a member of the same unitary
12        business group but for the fact that the person is
13        prohibited under Section 1501(a)(27) from being
14        included in the unitary business group because he or
15        she is ordinarily required to apportion business
16        income under different subsections of Section 304, but
17        not to exceed the addition modification required to be
18        made for the same taxable year under Section
19        203(d)(2)(D-8) for intangible expenses and costs paid,
20        accrued, or incurred, directly or indirectly, to the
21        same person. This subparagraph (S) is exempt from
22        Section 250; and
23            (T) For taxable years ending on or after December
24        31, 2011, in the case of a taxpayer who was required to
25        add back any insurance premiums under Section
26        203(d)(2)(D-9), such taxpayer may elect to subtract

 

 

SB3489- 96 -LRB103 35047 HLH 64992 b

1        that part of a reimbursement received from the
2        insurance company equal to the amount of the expense
3        or loss (including expenses incurred by the insurance
4        company) that would have been taken into account as a
5        deduction for federal income tax purposes if the
6        expense or loss had been uninsured. If a taxpayer
7        makes the election provided for by this subparagraph
8        (T), the insurer to which the premiums were paid must
9        add back to income the amount subtracted by the
10        taxpayer pursuant to this subparagraph (T). This
11        subparagraph (T) is exempt from the provisions of
12        Section 250.
 
13    (e) Gross income; adjusted gross income; taxable income.
14        (1) In general. Subject to the provisions of paragraph
15    (2) and subsection (b)(3), for purposes of this Section
16    and Section 803(e), a taxpayer's gross income, adjusted
17    gross income, or taxable income for the taxable year shall
18    mean the amount of gross income, adjusted gross income or
19    taxable income properly reportable for federal income tax
20    purposes for the taxable year under the provisions of the
21    Internal Revenue Code. Taxable income may be less than
22    zero. However, for taxable years ending on or after
23    December 31, 1986, net operating loss carryforwards from
24    taxable years ending prior to December 31, 1986, may not
25    exceed the sum of federal taxable income for the taxable

 

 

SB3489- 97 -LRB103 35047 HLH 64992 b

1    year before net operating loss deduction, plus the excess
2    of addition modifications over subtraction modifications
3    for the taxable year. For taxable years ending prior to
4    December 31, 1986, taxable income may never be an amount
5    in excess of the net operating loss for the taxable year as
6    defined in subsections (c) and (d) of Section 172 of the
7    Internal Revenue Code, provided that when taxable income
8    of a corporation (other than a Subchapter S corporation),
9    trust, or estate is less than zero and addition
10    modifications, other than those provided by subparagraph
11    (E) of paragraph (2) of subsection (b) for corporations or
12    subparagraph (E) of paragraph (2) of subsection (c) for
13    trusts and estates, exceed subtraction modifications, an
14    addition modification must be made under those
15    subparagraphs for any other taxable year to which the
16    taxable income less than zero (net operating loss) is
17    applied under Section 172 of the Internal Revenue Code or
18    under subparagraph (E) of paragraph (2) of this subsection
19    (e) applied in conjunction with Section 172 of the
20    Internal Revenue Code.
21        (2) Special rule. For purposes of paragraph (1) of
22    this subsection, the taxable income properly reportable
23    for federal income tax purposes shall mean:
24            (A) Certain life insurance companies. In the case
25        of a life insurance company subject to the tax imposed
26        by Section 801 of the Internal Revenue Code, life

 

 

SB3489- 98 -LRB103 35047 HLH 64992 b

1        insurance company taxable income, plus the amount of
2        distribution from pre-1984 policyholder surplus
3        accounts as calculated under Section 815a of the
4        Internal Revenue Code;
5            (B) Certain other insurance companies. In the case
6        of mutual insurance companies subject to the tax
7        imposed by Section 831 of the Internal Revenue Code,
8        insurance company taxable income;
9            (C) Regulated investment companies. In the case of
10        a regulated investment company subject to the tax
11        imposed by Section 852 of the Internal Revenue Code,
12        investment company taxable income;
13            (D) Real estate investment trusts. In the case of
14        a real estate investment trust subject to the tax
15        imposed by Section 857 of the Internal Revenue Code,
16        real estate investment trust taxable income;
17            (E) Consolidated corporations. In the case of a
18        corporation which is a member of an affiliated group
19        of corporations filing a consolidated income tax
20        return for the taxable year for federal income tax
21        purposes, taxable income determined as if such
22        corporation had filed a separate return for federal
23        income tax purposes for the taxable year and each
24        preceding taxable year for which it was a member of an
25        affiliated group. For purposes of this subparagraph,
26        the taxpayer's separate taxable income shall be

 

 

SB3489- 99 -LRB103 35047 HLH 64992 b

1        determined as if the election provided by Section
2        243(b)(2) of the Internal Revenue Code had been in
3        effect for all such years;
4            (F) Cooperatives. In the case of a cooperative
5        corporation or association, the taxable income of such
6        organization determined in accordance with the
7        provisions of Section 1381 through 1388 of the
8        Internal Revenue Code, but without regard to the
9        prohibition against offsetting losses from patronage
10        activities against income from nonpatronage
11        activities; except that a cooperative corporation or
12        association may make an election to follow its federal
13        income tax treatment of patronage losses and
14        nonpatronage losses. In the event such election is
15        made, such losses shall be computed and carried over
16        in a manner consistent with subsection (a) of Section
17        207 of this Act and apportioned by the apportionment
18        factor reported by the cooperative on its Illinois
19        income tax return filed for the taxable year in which
20        the losses are incurred. The election shall be
21        effective for all taxable years with original returns
22        due on or after the date of the election. In addition,
23        the cooperative may file an amended return or returns,
24        as allowed under this Act, to provide that the
25        election shall be effective for losses incurred or
26        carried forward for taxable years occurring prior to

 

 

SB3489- 100 -LRB103 35047 HLH 64992 b

1        the date of the election. Once made, the election may
2        only be revoked upon approval of the Director. The
3        Department shall adopt rules setting forth
4        requirements for documenting the elections and any
5        resulting Illinois net loss and the standards to be
6        used by the Director in evaluating requests to revoke
7        elections. Public Act 96-932 is declaratory of
8        existing law;
9            (G) Subchapter S corporations. In the case of: (i)
10        a Subchapter S corporation for which there is in
11        effect an election for the taxable year under Section
12        1362 of the Internal Revenue Code, the taxable income
13        of such corporation determined in accordance with
14        Section 1363(b) of the Internal Revenue Code, except
15        that taxable income shall take into account those
16        items which are required by Section 1363(b)(1) of the
17        Internal Revenue Code to be separately stated; and
18        (ii) a Subchapter S corporation for which there is in
19        effect a federal election to opt out of the provisions
20        of the Subchapter S Revision Act of 1982 and have
21        applied instead the prior federal Subchapter S rules
22        as in effect on July 1, 1982, the taxable income of
23        such corporation determined in accordance with the
24        federal Subchapter S rules as in effect on July 1,
25        1982; and
26            (H) Partnerships. In the case of a partnership,

 

 

SB3489- 101 -LRB103 35047 HLH 64992 b

1        taxable income determined in accordance with Section
2        703 of the Internal Revenue Code, except that taxable
3        income shall take into account those items which are
4        required by Section 703(a)(1) to be separately stated
5        but which would be taken into account by an individual
6        in calculating his taxable income.
7        (3) Recapture of business expenses on disposition of
8    asset or business. Notwithstanding any other law to the
9    contrary, if in prior years income from an asset or
10    business has been classified as business income and in a
11    later year is demonstrated to be non-business income, then
12    all expenses, without limitation, deducted in such later
13    year and in the 2 immediately preceding taxable years
14    related to that asset or business that generated the
15    non-business income shall be added back and recaptured as
16    business income in the year of the disposition of the
17    asset or business. Such amount shall be apportioned to
18    Illinois using the greater of the apportionment fraction
19    computed for the business under Section 304 of this Act
20    for the taxable year or the average of the apportionment
21    fractions computed for the business under Section 304 of
22    this Act for the taxable year and for the 2 immediately
23    preceding taxable years.
 
24    (f) Valuation limitation amount.
25        (1) In general. The valuation limitation amount

 

 

SB3489- 102 -LRB103 35047 HLH 64992 b

1    referred to in subsections (a)(2)(G), (c)(2)(I) and
2    (d)(2)(E) is an amount equal to:
3            (A) The sum of the pre-August 1, 1969 appreciation
4        amounts (to the extent consisting of gain reportable
5        under the provisions of Section 1245 or 1250 of the
6        Internal Revenue Code) for all property in respect of
7        which such gain was reported for the taxable year;
8        plus
9            (B) The lesser of (i) the sum of the pre-August 1,
10        1969 appreciation amounts (to the extent consisting of
11        capital gain) for all property in respect of which
12        such gain was reported for federal income tax purposes
13        for the taxable year, or (ii) the net capital gain for
14        the taxable year, reduced in either case by any amount
15        of such gain included in the amount determined under
16        subsection (a)(2)(F) or (c)(2)(H).
17        (2) Pre-August 1, 1969 appreciation amount.
18            (A) If the fair market value of property referred
19        to in paragraph (1) was readily ascertainable on
20        August 1, 1969, the pre-August 1, 1969 appreciation
21        amount for such property is the lesser of (i) the
22        excess of such fair market value over the taxpayer's
23        basis (for determining gain) for such property on that
24        date (determined under the Internal Revenue Code as in
25        effect on that date), or (ii) the total gain realized
26        and reportable for federal income tax purposes in

 

 

SB3489- 103 -LRB103 35047 HLH 64992 b

1        respect of the sale, exchange or other disposition of
2        such property.
3            (B) If the fair market value of property referred
4        to in paragraph (1) was not readily ascertainable on
5        August 1, 1969, the pre-August 1, 1969 appreciation
6        amount for such property is that amount which bears
7        the same ratio to the total gain reported in respect of
8        the property for federal income tax purposes for the
9        taxable year, as the number of full calendar months in
10        that part of the taxpayer's holding period for the
11        property ending July 31, 1969 bears to the number of
12        full calendar months in the taxpayer's entire holding
13        period for the property.
14            (C) The Department shall prescribe such
15        regulations as may be necessary to carry out the
16        purposes of this paragraph.
 
17    (g) Double deductions. Unless specifically provided
18otherwise, nothing in this Section shall permit the same item
19to be deducted more than once.
 
20    (h) Legislative intention. Except as expressly provided by
21this Section there shall be no modifications or limitations on
22the amounts of income, gain, loss or deduction taken into
23account in determining gross income, adjusted gross income or
24taxable income for federal income tax purposes for the taxable

 

 

SB3489- 104 -LRB103 35047 HLH 64992 b

1year, or in the amount of such items entering into the
2computation of base income and net income under this Act for
3such taxable year, whether in respect of property values as of
4August 1, 1969 or otherwise.
5(Source: P.A. 101-9, eff. 6-5-19; 101-81, eff. 7-12-19;
6102-16, eff. 6-17-21; 102-558, eff. 8-20-21; 102-658, eff.
78-27-21; 102-813, eff. 5-13-22; 102-1112, eff. 12-21-22.)
 
8    Section 99. Effective date. This Act takes effect upon
9becoming law.