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1 | | AN ACT concerning revenue.
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2 | | Be it enacted by the People of the State of Illinois, |
3 | | represented in the General Assembly:
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4 | | Article 1. Findings |
5 | | Section 1-1. Legislative findings. |
6 | | (1) The House of Representatives adopted House Resolution |
7 | | 110 on March 8, 2011, setting forth the estimates of general |
8 | | funds the House expects to be available during State fiscal |
9 | | year 2012. |
10 | | (2) In determining the estimates of general funds expected |
11 | | to be available during State fiscal year 2012, the House |
12 | | Revenue & Finance Committee assumed that the State would not |
13 | | collect approximately $600,000,000 of income tax revenues due |
14 | | to the allowance of special bonus depreciation rules approved |
15 | | by the federal government. |
16 | | (3) The House of Representatives adopted House Resolution |
17 | | 158 on March 30, 2011, which provides that if the actual amount |
18 | | of funds from State sources that become available during State |
19 | | fiscal year 2012 exceeds the House's estimates set forth in |
20 | | House Resolution 110, then that excess shall first be used to |
21 | | reduce the backlog of unpaid State obligations to the extent |
22 | | authorized by law. |
23 | | (4) These concepts are prudent and should be continued for |
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1 | | State fiscal year 2013 and beyond. |
2 | | (5) As the House Revenue & Finance Committee develops the |
3 | | estimates of general funds expected to be available during |
4 | | State fiscal year 2013, an estimated $250,000,000 of income tax |
5 | | revenues in excess of the State fiscal year 2012 budgeted |
6 | | amount will become available due to the phasing out of the |
7 | | allowance of special bonus depreciation rules approved by the |
8 | | federal government. |
9 | | (6) Therefore, the General Assembly finds that a tax |
10 | | incentive package that does not exceed $250,000,000 in State |
11 | | fiscal year 2013 can be approved without any negative impact to |
12 | | the State budget in State fiscal years 2012 and 2013 while |
13 | | providing tax relief to a large number of Illinois individual |
14 | | and business taxpayers. |
15 | | Article 5. Illinois Independent Tax Tribunal Act |
16 | | Section 5-1. Short title. This Article may be cited as the |
17 | | Illinois Independent Tax Tribunal Act. |
18 | | Section 5-5. Independent Tax Tribunal Board; Department of |
19 | | Revenue. |
20 | | (a) On and after July 1, 2013, the Department of Revenue, |
21 | | or any successor agency, shall no longer hear and act upon any |
22 | | protests of notices of tax liability or deficiencies for all |
23 | | taxes administered by the Department of Revenue. |
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1 | | (b) Beginning July 1, 2013, an Independent Tax Tribunal |
2 | | Board shall assume, exercise, and administer all rights, |
3 | | powers, duties, and responsibilities pertaining to any |
4 | | protests of notices of tax liability or deficiencies for all |
5 | | taxes administered by the Department of Revenue. The |
6 | | Independent Tax Tribunal Board shall be created by law and no |
7 | | State agency shall assume the functions of the Board. |
8 | | Article 10. Live Theater Production Tax Credit Act |
9 | | Section 10-1. Short title. This Article may be cited as the |
10 | | Live Theater Production Tax Credit Act. References in this |
11 | | Article to "this Act" mean this Article. |
12 | | Section 10-5. Purpose. The Illinois economy depends |
13 | | heavily on the commercial for-profit live theater industry and |
14 | | the pre-Broadway and long-run shows that are presented in |
15 | | Illinois. As a result of intense competition from other |
16 | | prominent theater cities in the United States and abroad in |
17 | | attracting pre-Broadway and long-run shows, Illinois must move |
18 | | aggressively with new business development investment tools so |
19 | | that Illinois is more competitive in site location decision |
20 | | making for show producers. In an increasingly global economy, |
21 | | Illinois' long-term development will benefit from the |
22 | | rational, strategic use of State resources in support of |
23 | | pre-Broadway live theater and long-run show development and |
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1 | | growth. It is the purpose of this Act to preserve and expand |
2 | | the existing work force used in live theater and enhance the |
3 | | marketing of the presentation of live theater in Illinois. It |
4 | | shall be the policy of this State to promote and encourage the |
5 | | training and hiring of Illinois residents who represent the |
6 | | diversity of the Illinois population through the creation and |
7 | | implementation of training, education, and recruitment |
8 | | programs organized in cooperation with Illinois colleges and |
9 | | universities, labor organizations, and the commercial |
10 | | for-profit live theater industry. |
11 | | Section 10-10. Definitions. As used in this Act: |
12 | | "Accredited theater production" means a for-profit live |
13 | | stage presentation in a qualified production facility, as |
14 | | defined in this Section, that is either (i) a pre-Broadway |
15 | | production or (ii) a long-run production for which the |
16 | | aggregate Illinois labor and marketing expenditures exceed |
17 | | $100,000. |
18 | | "Pre-Broadway production" means a live stage production |
19 | | that, in its original or adaptive version, is performed in a |
20 | | qualified production facility having a presentation scheduled |
21 | | for Broadway's Theater District in New York City within 12 |
22 | | months after its Illinois presentation. |
23 | | "Long-run production" means a live stage production that is |
24 | | performed in a qualified production facility for longer than 8 |
25 | | weeks, with at least 6 performances per week, and includes a |
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1 | | production that spans the end of one tax year and the |
2 | | commencement of a new tax year that, in combination, meets the |
3 | | criteria set forth in this definition making it a long-run |
4 | | production eligible for a theater tax credit award in each tax |
5 | | year or portion thereof. |
6 | | "Accredited theater production certificate" means a |
7 | | certificate issued by the Department certifying that the |
8 | | production is an accredited theater production that meets the |
9 | | guidelines of this Act. |
10 | | "Applicant" means a taxpayer that is a theater producer, |
11 | | owner, licensee, operator, or presenter that is presenting or |
12 | | has presented a live stage presentation located within the |
13 | | State of Illinois who: |
14 | | (1) owns or licenses the theatrical rights of the stage |
15 | | presentation for the Illinois production period; or |
16 | | (2) has contracted or will contract directly with the |
17 | | owner or licensee of the theatrical rights or a person |
18 | | acting on behalf of the owner or licensee to provide live |
19 | | performances of the production. |
20 | | An applicant that directly or indirectly owns, controls, or |
21 | | operates multiple qualified production facilities shall be |
22 | | presumed to be and considered for the purposes of this Act to |
23 | | be a single applicant; provided, however, that as to each of |
24 | | the applicant's qualified production facilities, the applicant |
25 | | shall be eligible to separately and contemporaneously (i) apply |
26 | | for and obtain accredited theater production certificates, |
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1 | | (ii) stage accredited theater productions, and (iii) apply for |
2 | | and receive a tax credit award certificate for each of the |
3 | | applicant's accredited theater productions performed at each |
4 | | of the applicant's qualified production facilities. |
5 | | "Department" means the Department of Commerce and Economic |
6 | | Opportunity. |
7 | | "Director" means the Director of the Department. |
8 | | "Illinois labor expenditure" means gross salary or wages |
9 | | including, but not limited to, taxes, benefits, and any other |
10 | | consideration incurred or paid to non-talent employees of the |
11 | | applicant for services rendered to and on behalf of the |
12 | | accredited theater production. To qualify as an Illinois labor |
13 | | expenditure, the expenditure must be: |
14 | | (1) incurred or paid by the applicant on or after the |
15 | | effective date of the Act for services related to any |
16 | | portion of an accredited theater production from its |
17 | | pre-production stages, including, but not limited to, the |
18 | | writing of the script, casting, hiring of service |
19 | | providers, purchases from vendors, marketing, advertising, |
20 | | public relations, load in, rehearsals, performances, other |
21 | | accredited theater production related activities, and load |
22 | | out; |
23 | | (2) directly attributable to the accredited theater |
24 | | production; |
25 | | (3) limited to the first $100,000 of wages incurred or |
26 | | paid to each employee of an accredited theater production |
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1 | | in each tax year; |
2 | | (4) included in the federal income tax basis of the |
3 | | property; |
4 | | (5) paid in the tax year for which the applicant is |
5 | | claiming the tax credit award, or no later than 60 days |
6 | | after the end of the tax year; |
7 | | (6) paid to persons residing in Illinois at the time |
8 | | payments were made; and |
9 | | (7) reasonable in the circumstances. |
10 | | "Illinois production spending" means any and all expenses |
11 | | directly or indirectly incurred relating to an accredited |
12 | | theater production presented in any qualified production |
13 | | facility of the applicant, including, but not limited to, |
14 | | expenditures for: |
15 | | (1) national marketing, public relations, and the |
16 | | creation and placement of print, electronic, television, |
17 | | billboard, and other forms of advertising; and |
18 | | (2) the construction and fabrication of scenic |
19 | | materials and elements; provided, however, that the |
20 | | maximum amount of expenditures attributable to the |
21 | | construction and fabrication of scenic materials and |
22 | | elements eligible for a tax credit award shall not exceed |
23 | | $500,000 per applicant per production in any single tax |
24 | | year. |
25 | | "Qualified production facility" means a facility located |
26 | | in the State in which live theatrical productions are, or are |
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1 | | intended to be, exclusively presented that contains at least |
2 | | one stage, a seating capacity of 1,200 or more seats, and |
3 | | dressing rooms, storage areas, and other ancillary amenities |
4 | | necessary for the accredited theater production. |
5 | | "Tax credit award" means the issuance to a taxpayer by the |
6 | | Department of a tax credit award in conformance with Sections |
7 | | 10-40 and 10-45 of this Act. |
8 | | "Tax year" means a calendar year for the period January 1 |
9 | | to and including December 31. |
10 | | Section 10-15. Powers of the Department. The Department, in |
11 | | addition to those powers granted under the Civil Administrative |
12 | | Code of Illinois, is granted and has all the powers necessary |
13 | | or convenient to carry out and effectuate the purposes and |
14 | | provisions of this Act, including, but not limited to, the |
15 | | power and authority to: |
16 | | (1) adopt rules deemed necessary and appropriate for |
17 | | the administration of the Tax Credit Award program; |
18 | | establish forms for applications, notifications, |
19 | | contracts, or any other agreements; and accept |
20 | | applications at any time during the year; |
21 | | (2) assist applicants pursuant to the provisions of |
22 | | this Act to promote, foster, and support live theater |
23 | | development and production and its related job creation or |
24 | | retention within the State; |
25 | | (3) gather information and conduct inquiries, in the |
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1 | | manner and by the methods set forth in this Act, required |
2 | | for the Department to comply with Section 10-40 and, |
3 | | without limitation, obtain information with respect to |
4 | | applicants for the purpose of making any designations or |
5 | | certifications necessary or desirable to assist the |
6 | | Department with any recommendation or guidance in the |
7 | | furtherance of the purposes of this Act and relating to |
8 | | applicants' participation in training, education, and |
9 | | recruitment programs that are organized in cooperation |
10 | | with Illinois colleges and universities or labor |
11 | | organizations designed to promote and encourage the |
12 | | training and hiring of Illinois residents who represent the |
13 | | diversity of the Illinois population; |
14 | | (4) provide for sufficient personnel to permit |
15 | | administrative, staffing, operating, and related support |
16 | | required to adequately discharge its duties and |
17 | | responsibilities described in this Act from funds as may be |
18 | | appropriated by the General Assembly for the |
19 | | administration of this Act; and |
20 | | (5) require that the applicant at all times keep proper |
21 | | books and records of accounts relating to the tax credit |
22 | | award, in accordance with generally accepted accounting |
23 | | principles consistently applied, and make, upon reasonable |
24 | | written request by the Department, those books and records |
25 | | available for reasonable Department inspection and audit |
26 | | during the applicant's normal business hours. Any |
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1 | | documents or data made available to or received from the |
2 | | applicant by any agent, employee, officer, or service |
3 | | provider to the Department shall be deemed confidential and |
4 | | shall not constitute public records to the extent that the |
5 | | documents or data consist of commercial or financial |
6 | | information regarding the operation by the applicant of any |
7 | | theater or any accredited theater production, or any |
8 | | recipient of any tax credit award under this Act. |
9 | | Section 10-20. Tax credit award. Subject to the conditions |
10 | | set forth in this Act, an applicant is entitled to a tax credit |
11 | | award as approved by the Department for qualifying Illinois |
12 | | labor expenditures and Illinois production spending for each |
13 | | tax year in which the applicant is awarded an accredited |
14 | | theater production certificate issued by the Department. The |
15 | | amount of tax credits awarded pursuant to this Act shall not |
16 | | exceed $2,000,000 in any fiscal year. Credits shall be awarded |
17 | | on a first-come, first-served basis. Notwithstanding the |
18 | | foregoing, if the amount of credits applied for in any fiscal |
19 | | year exceeds the amount authorized to be awarded under this |
20 | | Section, the excess credit amount shall be awarded in the next |
21 | | fiscal year in which credits remain available for award and |
22 | | shall be treated as having been applied for on the first day of |
23 | | that fiscal year.
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24 | | Section 10-25. Application for certification of accredited |
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1 | | theater production. Any applicant proposing an accredited |
2 | | theater production located or planned to be located in Illinois |
3 | | may request an accredited theater production certificate by |
4 | | application to the Department. |
5 | | Section 10-30. Review of application for accredited |
6 | | theater production certificate. |
7 | | (a) The Department shall issue an accredited theater |
8 | | production certificate to an applicant if it finds that by a |
9 | | preponderance the following conditions exist: |
10 | | (1) the applicant intends to make the expenditure in |
11 | | the State required for certification of the accredited |
12 | | theater production; |
13 | | (2) the applicant's accredited theater production is |
14 | | economically sound and will benefit the people of the State |
15 | | of Illinois by increasing opportunities for employment and |
16 | | will strengthen the economy of Illinois; |
17 | | (3) the following requirements related to the |
18 | | implementation of a diversity plan have been met: (i) the |
19 | | applicant has filed with the Department a diversity plan |
20 | | outlining specific goals for hiring Illinois labor |
21 | | expenditure eligible minority persons and females, as |
22 | | defined in the Business Enterprise for Minorities, |
23 | | Females, and Persons with Disabilities Act, and for using |
24 | | vendors receiving certification under the Business |
25 | | Enterprise for Minorities, Females, and Persons with |
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1 | | Disabilities Act; (ii) the Department has approved the plan |
2 | | as meeting the requirements established by the Department |
3 | | and verified that the applicant has met or made good faith |
4 | | efforts in achieving those goals; and (iii) the Department |
5 | | has adopted any rules that are necessary to ensure |
6 | | compliance with the provisions set forth in this paragraph |
7 | | and necessary to require that the applicant's plan reflects |
8 | | the diversity of the population of this State; |
9 | | (4) the applicant's accredited theater production |
10 | | application indicates whether the applicant intends to |
11 | | participate in training, education, and recruitment |
12 | | programs that are organized in cooperation with Illinois |
13 | | colleges and universities, labor organizations, and the |
14 | | holders of accredited theater production certificates and |
15 | | are designed to promote and encourage the training and |
16 | | hiring of Illinois residents who represent the diversity of |
17 | | Illinois; |
18 | | (5) if not for the tax credit award, the applicant's |
19 | | accredited theater production would not occur in Illinois, |
20 | | which may be demonstrated by any means, including, but not |
21 | | limited to, evidence that: (i) the applicant, presenter, |
22 | | owner, or licensee of the production rights has other state |
23 | | or international location options at which to present the |
24 | | production and could reasonably and efficiently locate |
25 | | outside of the State, (ii) at least one other state or |
26 | | nation could be considered for the production, (iii) the |
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1 | | receipt of the tax award credit is a major factor in the |
2 | | decision of the applicant, presenter, production owner or |
3 | | licensee as to where the production will be presented and |
4 | | that without the tax credit award the applicant likely |
5 | | would not create or retain jobs in Illinois, or (iv) |
6 | | receipt of the tax credit award is essential to the |
7 | | applicant's decision to create or retain new jobs in the |
8 | | State; and |
9 | | (6) the tax credit award will result in an overall |
10 | | positive impact to the State, as determined by the |
11 | | Department using the best available data. |
12 | | (b) If any of the provisions in this Section conflict with |
13 | | any existing collective bargaining agreements, the terms and |
14 | | conditions of those collective bargaining agreements shall |
15 | | control.
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16 | | (c) The Department shall act expeditiously regarding |
17 | | approval of applications for accredited theater production |
18 | | certificates so as to accommodate the pre-production work, |
19 | | booking, commencement of ticket sales, determination of |
20 | | performance dates, load in, and other matters relating to the |
21 | | live theater productions for which approval is sought. |
22 | | Section 10-35. Training programs for skills in critical |
23 | | demand. To accomplish the purposes of this Act, the Department |
24 | | may use the training programs provided under Section 605-800 of |
25 | | the Department of Commerce and Economic Opportunity Law of the |
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1 | | Civil Administrative Code of Illinois. |
2 | | Section 10-40. Issuance of Tax Credit Award Certificate.
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3 | | (a) In order to qualify for a tax credit award under this |
4 | | Act, an applicant must file an application for each accredited |
5 | | theater production at each of the applicant's qualified |
6 | | production facilities, on forms prescribed by the Department, |
7 | | providing information necessary to calculate the tax credit |
8 | | award and any additional information as reasonably required by |
9 | | the Department. |
10 | | (b) Upon satisfactory review of the application, the |
11 | | Department shall issue a tax credit award certificate stating |
12 | | the amount of the tax credit award to which the applicant is |
13 | | entitled for that tax year and shall contemporaneously notify |
14 | | the applicant and Illinois Department of Revenue in accordance |
15 | | with Section 222 of the Illinois Income Tax Act. |
16 | | Section 10-45. Amount and payment of the tax credit award. |
17 | | The tax credit award shall be calculated each tax year based |
18 | | upon the filing by the applicant on forms prescribed by the |
19 | | Department containing information regarding qualifying and |
20 | | quantified Illinois labor expenditures, as defined in Section |
21 | | 10-10, net of the limitation in that Section, and Illinois |
22 | | production spending, as defined in Section 10-10, net of the |
23 | | limitation in that Section. From the amount calculated, the |
24 | | applicant shall be entitled to receive a tax credit award of up |
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1 | | to: |
2 | | (1) 20% of the Illinois labor expenditures for each tax |
3 | | year; plus |
4 | | (2) 20% of the Illinois production spending for each |
5 | | tax year; plus |
6 | | (3) 15% of the Illinois labor expenditures generated by |
7 | | the employment of Illinois residents in geographic areas of |
8 | | high poverty or high unemployment in each tax year, as |
9 | | determined by the Department. |
10 | | Following the Department's determination of the tax credit |
11 | | award, the Department shall issue the tax credit award to the |
12 | | applicant. |
13 | | Section 10-50. Live theater tax credit award program |
14 | | evaluation and reports. |
15 | | (a) The Department's live theater tax credit award |
16 | | evaluation must include: |
17 | | (i) an assessment of the effectiveness of the program |
18 | | in creating and retaining new jobs in Illinois; |
19 | | (ii) an assessment of the revenue impact of the |
20 | | program; |
21 | | (iii) in the discretion of the Department, a review of |
22 | | the practices and experiences of other states or nations |
23 | | with similar programs; and |
24 | | (iv) an assessment of the overall success of the |
25 | | program. The Department may make a recommendation to |
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1 | | extend, modify, or not extend the program based on the |
2 | | evaluation. |
3 | | (b) At the end of each fiscal quarter, the Department shall |
4 | | submit to the General Assembly a report that includes, without |
5 | | limitation: |
6 | | (i) an assessment of the economic impact of the |
7 | | program, including the number of jobs created and retained, |
8 | | and whether the job positions are entry level, management, |
9 | | vendor, or production related; |
10 | | (ii) the amount of accredited theater production |
11 | | spending brought to Illinois, including the amount of |
12 | | spending and type of Illinois vendors hired in connection |
13 | | with an accredited theater production; and |
14 | | (iii) a determination of whether those receiving |
15 | | qualifying Illinois labor expenditure salaries or wages |
16 | | reflect the geographical, racial and ethnic, gender, and |
17 | | income level diversity of the State of Illinois. |
18 | | (c) At the end of each fiscal year, the Department shall |
19 | | submit to the General Assembly a report that includes, without |
20 | | limitation: |
21 | | (i) the identification of each vendor that provided |
22 | | goods or services that were included in an accredited |
23 | | theater production's Illinois production spending; |
24 | | (ii) a statement of the amount paid to each identified |
25 | | vendor by the accredited theater production and whether the |
26 | | vendor is a minority or female owned business as defined in |
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1 | | Section 2 of the Business Enterprise for Minorities, |
2 | | Females, and Persons with Disabilities Act; and |
3 | | (iii) a description of the steps taken by the |
4 | | Department to encourage accredited theater productions to |
5 | | use vendors who are minority or female owned businesses. |
6 | | Section 10-55. Program terms and conditions. Any |
7 | | documentary materials or data made available or received from |
8 | | an applicant by any agent or employee of the Department are |
9 | | confidential and are not public records to the extent that the |
10 | | materials or data consist of commercial or financial |
11 | | information regarding the operation of or the production of the |
12 | | applicant or recipient of any tax credit award under this Act. |
13 | | Section 10-80. The Illinois Income Tax Act is amended by |
14 | | adding Section 222 as follows: |
15 | | (35 ILCS 5/222 new) |
16 | | Sec. 222. Live theater production credit. |
17 | | (a) For tax years beginning on or after January 1, 2012, a |
18 | | taxpayer who has received a tax credit award under the Live |
19 | | Theater Production Tax Credit Act is entitled to a credit |
20 | | against the taxes imposed under subsections (a) and (b) of |
21 | | Section 201 of this Act in an amount determined under that Act |
22 | | by the Department of Commerce and Economic Opportunity. |
23 | | (b) If the taxpayer is a partnership, limited liability |
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1 | | partnership, limited liability company, or Subchapter S |
2 | | corporation, the tax credit award is allowed to the partners, |
3 | | unit holders, or shareholders in accordance with the |
4 | | determination of income and distributive share of income under |
5 | | Sections 702 and 704 and Subchapter S of the Internal Revenue |
6 | | Code. |
7 | | (c) A sale, assignment, or transfer of the tax credit award |
8 | | may be made by the taxpayer earning the credit within one year |
9 | | after the credit is awarded in accordance with rules adopted by |
10 | | the Department of Commerce and Economic Opportunity. |
11 | | (d) The Department of Revenue, in cooperation with the |
12 | | Department of Commerce and Economic Opportunity, shall adopt |
13 | | rules to enforce and administer the provisions of this Section. |
14 | | (e) The tax credit award may not be carried back. If the |
15 | | amount of the credit exceeds the tax liability for the year, |
16 | | the excess may be carried forward and applied to the tax |
17 | | liability of the 5 tax years following the excess credit year. |
18 | | The tax credit award shall be applied to the earliest year for |
19 | | which there is a tax liability. If there are credits from more |
20 | | than one tax year that are available to offset liability, the |
21 | | earlier credit shall be applied first. In no event may a credit |
22 | | under this Section reduce the taxpayer's liability to less than |
23 | | zero. |
24 | | Article 15. Amendatory Provisions |
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1 | | Section 15-5. The Economic Development Area Tax Increment |
2 | | Allocation Act is amended by changing Sections 3, 4, 5, 8, 9, |
3 | | and 11 and by adding Sections 4.5 and 4.7 as follows:
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4 | | (20 ILCS 620/3) (from Ch. 67 1/2, par. 1003)
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5 | | Sec. 3. Definitions. In this Act, words or terms shall have |
6 | | the
following meanings unless the context or usage clearly |
7 | | indicates that another
meaning is intended.
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8 | | (a) "Department" means the Department of Commerce and |
9 | | Economic Opportunity.
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10 | | (b) "Economic development plan" means the written plan of a |
11 | | municipality
which sets forth an economic development program |
12 | | for an economic
development project area. Each economic |
13 | | development plan shall include but
not be limited to (1) |
14 | | estimated economic development project costs, (2)
the sources |
15 | | of funds to pay such costs, (3) the nature and term of any
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16 | | obligations to be issued by the municipality to pay such costs, |
17 | | (4) the
most recent equalized assessed valuation of the |
18 | | economic development project
area,
(5) an estimate of the |
19 | | equalized assessed valuation of the economic
development |
20 | | project area after completion of an economic development |
21 | | project,
(6) the estimated date of completion of any economic |
22 | | development project
proposed to be undertaken, (7) a general |
23 | | description of any proposed
developer, user, or tenant of any |
24 | | property to be located or improved
within the economic |
25 | | development project area, (8) a description of the
type, |
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1 | | structure and general character of the facilities to be |
2 | | developed or
improved in the economic development project area, |
3 | | (9) a description of the
general land uses to apply in the
|
4 | | economic development project area, (10) a description of the |
5 | | type, class and
number of employees to be employed in the |
6 | | operation of the facilities to be
developed or improved in the |
7 | | economic development project area, and (11) a
commitment by the |
8 | | municipality to fair
employment practices and an affirmative |
9 | | action plan with respect to any
economic development program to |
10 | | be undertaken by the municipality.
|
11 | | (c) "Economic development project" means any development |
12 | | project in
furtherance of the objectives of this Act.
|
13 | | (d) "Economic development project area" means any improved |
14 | | or vacant
area which (1) is located within or partially within |
15 | | or partially without
the territorial limits of a municipality, |
16 | | provided that no area without the
territorial limits of a |
17 | | municipality shall be included in an economic
development |
18 | | project area without the express consent of the Department,
|
19 | | acting as agent for the State, (2) is contiguous, (3) is not |
20 | | less in the
aggregate than three hundred twenty acres, (4) is |
21 | | suitable for siting by any
commercial, manufacturing, |
22 | | industrial, research or transportation
enterprise of |
23 | | facilities to include but not be limited to commercial
|
24 | | businesses, offices, factories, mills, processing plants, |
25 | | assembly plants,
packing plants, fabricating plants, |
26 | | industrial or commercial distribution
centers, warehouses, |
|
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1 | | repair overhaul or service facilities, freight
terminals, |
2 | | research facilities, test facilities or transportation
|
3 | | facilities, whether or not such area has been used at any time |
4 | | for such
facilities and whether or not the area has been used |
5 | | or is suitable for
other uses, including commercial |
6 | | agricultural purposes, and (5) which has
been approved and |
7 | | certified by the Department pursuant to this Act.
|
8 | | (e) "Economic development project costs" mean and include |
9 | | the sum total
of all reasonable or necessary costs incurred by |
10 | | a municipality incidental
to an economic development project, |
11 | | including, without limitation, the following:
|
12 | | (1) Costs of studies, surveys, development of plans and |
13 | | specifications,
implementation and administration of an |
14 | | economic development plan, personnel
and professional service |
15 | | costs for architectural, engineering, legal,
marketing, |
16 | | financial, planning, police, fire, public works or other
|
17 | | services, provided that no charges for professional services |
18 | | may be based
on a percentage of incremental tax revenues;
|
19 | | (2) Property assembly costs within an economic development |
20 | | project
area, including but not limited to acquisition of land |
21 | | and other real or
personal property or rights or interests |
22 | | therein, and specifically
including payments to developers or |
23 | | other nongovernmental persons as
reimbursement for property |
24 | | assembly costs incurred by such developer or
other |
25 | | nongovernmental person;
|
26 | | (3) Site preparation costs, including but not limited to |
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1 | | clearance of
any area within an economic development project |
2 | | area by demolition or
removal of any existing buildings, |
3 | | structures, fixtures, utilities and
improvements and clearing |
4 | | and grading; and including installation, repair,
construction, |
5 | | reconstruction, or relocation of public streets, public
|
6 | | utilities, and other public site improvements within or without |
7 | | an economic
development project area which are essential to the |
8 | | preparation of the
economic development project area for use in |
9 | | accordance with an economic
development plan; and specifically |
10 | | including payments to developers or
other nongovernmental |
11 | | persons as reimbursement for site preparation costs incurred by |
12 | | such
developer or nongovernmental person;
|
13 | | (4) Costs of renovation, rehabilitation, reconstruction, |
14 | | relocation,
repair or remodeling of any existing buildings, |
15 | | improvements, and fixtures
within an economic development |
16 | | project area, and specifically including
payments to |
17 | | developers or other nongovernmental persons as reimbursement
|
18 | | for such costs incurred by such developer or nongovernmental |
19 | | person;
|
20 | | (5) Costs of construction , acquisition, and operation |
21 | | within an economic development project area of
public |
22 | | improvements, including but not limited to, publicly owned |
23 | | buildings, structures,
works, utilities or fixtures; provided |
24 | | that no allocation made to the municipality pursuant to |
25 | | subparagraph (A) of paragraph (2) of subsection (g) of Section |
26 | | 4 of this Act or subparagraph (A) of paragraph (4) of |
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1 | | subsection (g) of Section 4 of this Act shall be used to |
2 | | operate a convention center or similar entertainment complex or |
3 | | venue;
|
4 | | (6) Financing costs, including but not limited to all |
5 | | necessary and
incidental expenses related to the issuance of |
6 | | obligations, payment of any
interest on any obligations issued |
7 | | hereunder which accrues during the
estimated period of |
8 | | construction of any economic development project for
which such |
9 | | obligations are issued and for not exceeding 36 months
|
10 | | thereafter, and any reasonable reserves related to the issuance |
11 | | of such obligations;
|
12 | | (7) All or a portion of a taxing district's capital costs |
13 | | resulting
from an economic development project necessarily |
14 | | incurred or estimated to
be incurred by a taxing district in |
15 | | the furtherance of the objectives of an
economic development |
16 | | project, to the extent that the municipality by
written |
17 | | agreement accepts and approves such costs;
|
18 | | (8) Relocation costs to the extent that a municipality |
19 | | determines
that relocation costs shall be paid or is required |
20 | | to make payment of
relocation costs by federal or State law;
|
21 | | (9) The estimated tax revenues from real property in an |
22 | | economic
development project area acquired by a municipality |
23 | | which,
according to the economic development plan, is to be |
24 | | used for a private
use and which any taxing district would have |
25 | | received had the municipality
not adopted tax increment |
26 | | allocation financing for an economic development
project area |
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1 | | and which would result from such taxing district's levies made
|
2 | | after the time of the adoption by the municipality of tax |
3 | | increment
allocation financing to the time the current |
4 | | equalized assessed value of
real property in the economic |
5 | | development project area exceeds the total
initial equalized |
6 | | value of real property in said area;
|
7 | | (10) Costs of job training, advanced vocational or career |
8 | | education,
including but not limited to courses in |
9 | | occupational, semi-technical or
technical fields leading |
10 | | directly to employment, incurred by one or more
taxing |
11 | | districts, provided that such costs are related to the |
12 | | establishment
and maintenance of additional job training, |
13 | | advanced vocational education
or career education programs for |
14 | | persons employed or to be employed by
employers located in an |
15 | | economic development project area, and further
provided that |
16 | | when such costs are incurred by a taxing district or taxing
|
17 | | districts other than the municipality they shall be set forth |
18 | | in a written
agreement by or among the municipality and the |
19 | | taxing district or taxing
districts, which agreement describes |
20 | | the program to be undertaken,
including but not limited to the |
21 | | number of employees to be trained, a
description of the |
22 | | training and services to be provided, the number and
type of |
23 | | positions available or to be available, itemized costs of the
|
24 | | program and sources of funds to pay the same, and the term of |
25 | | the
agreement. Such costs include, specifically, the payment by |
26 | | community
college districts of costs pursuant to Sections 3-37, |
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1 | | 3-38, 3-40 and 3-40.1
of the Public Community College Act and |
2 | | by school districts of costs
pursuant to Sections 10-22.20a and |
3 | | 10-23.3a of The School Code;
|
4 | | (11) Private financing costs incurred by developers or |
5 | | other
nongovernmental persons in connection with an economic |
6 | | development project,
and specifically including payments to |
7 | | developers or other nongovernmental
persons as reimbursement |
8 | | for such costs incurred by such developer or other
|
9 | | nongovernmental person, provided that:
|
10 | | (A) private financing costs shall be
paid or reimbursed by |
11 | | a municipality
only pursuant to the prior official action of |
12 | | the municipality evidencing
an intent to pay or reimburse such |
13 | | private financing costs;
|
14 | | (B) except as provided in subparagraph (D), the aggregate |
15 | | amount of
such costs paid or reimbursed by a municipality in |
16 | | any one year shall not exceed 30%
of such costs paid or |
17 | | incurred by the developer or other nongovernmental
person in |
18 | | that year;
|
19 | | (C) private financing costs shall be paid or reimbursed by |
20 | | a
municipality solely from the special tax allocation
fund |
21 | | established pursuant to this Act and shall not be paid or |
22 | | reimbursed from the
proceeds of any obligations issued by a |
23 | | municipality;
|
24 | | (D) if there are not sufficient funds available in the |
25 | | special tax
allocation fund in any year to make such payment or |
26 | | reimbursement in full, any amount of
such interest cost |
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1 | | remaining to be paid or reimbursed by a municipality
shall |
2 | | accrue and be
payable when funds are available in
the special |
3 | | tax allocation fund to make such payment; and
|
4 | | (E) in connection with its approval and certification of an |
5 | | economic
development project pursuant to Section 5 of this Act, |
6 | | the Department shall
review any agreement authorizing the |
7 | | payment or reimbursement by a municipality of private
financing |
8 | | costs in its consideration of the impact on the revenues of the
|
9 | | municipality and the affected taxing districts of the use of |
10 | | tax increment
allocation financing.
|
11 | | (f) "Municipality" means a city, village or incorporated |
12 | | town.
|
13 | | (g) "Obligations" means any instrument evidencing the |
14 | | obligation of a
municipality to pay money, including without |
15 | | limitation, bonds, notes,
installment or financing contracts, |
16 | | certificates, tax anticipation warrants
or notes, vouchers, |
17 | | and any other evidence of indebtedness.
|
18 | | (h) "Taxing districts" means counties, townships, |
19 | | municipalities, and
school, road, park, sanitary, mosquito |
20 | | abatement, forest preserve, public
health, fire protection, |
21 | | river conservancy, tuberculosis sanitarium and any
other |
22 | | municipal corporations or districts with the power to levy |
23 | | taxes upon property located within the economic development |
24 | | project area .
|
25 | | (Source: P.A. 94-793, eff. 5-19-06.)
|
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1 | | (20 ILCS 620/4) (from Ch. 67 1/2, par. 1004)
|
2 | | Sec. 4.
Establishment of economic development project |
3 | | areas;
ordinance; notice; hearing; changes in economic |
4 | | development plan. Economic
development project areas shall be |
5 | | established as follows:
|
6 | | (a) The corporate authorities of a municipality shall by |
7 | | ordinance
propose the establishment of an economic development |
8 | | project area
and fix a
time and place for a public hearing, and |
9 | | shall submit a certified copy of
the ordinance as adopted to |
10 | | the Department.
|
11 | | (b) (1) Notice of the public hearing shall be given by |
12 | | publication and
mailing. Notice by publication shall be given |
13 | | by publication at least
twice, the first publication to be not |
14 | | more than 30 nor less than 10 days
prior to the hearing in a |
15 | | newspaper of general circulation within the taxing
districts |
16 | | having property in the proposed economic development project
|
17 | | area. Notice by mailing shall be given by depositing such |
18 | | notice together
with a copy of the
proposed economic |
19 | | development plan in the United States mails by
certified mail |
20 | | addressed to the person or persons in whose name the general
|
21 | | taxes for the last preceding year were paid on each lot, block, |
22 | | tract, or
parcel of land lying within the economic development |
23 | | project area. The
notice shall be mailed not less than 10 days |
24 | | prior to the date set for the
public hearing. In the event |
25 | | taxes for the last preceding year were not
paid, the notice |
26 | | shall also be sent to the persons last listed on the tax
rolls |
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1 | | within the preceding 3 years as the owners of such property.
|
2 | | (2) The notices issued pursuant to this Section shall |
3 | | include the following:
|
4 | | (A) The time and place of public hearing;
|
5 | | (B) The boundaries of the proposed economic development |
6 | | project area by
legal description and by street location where |
7 | | possible;
|
8 | | (C) A notification that all interested persons will be |
9 | | given an
opportunity to be heard at the public hearing;
|
10 | | (D) An invitation for any person to submit alternative |
11 | | proposals or bids
for any proposed conveyance, lease, mortgage |
12 | | or other disposition of land
within the proposed economic |
13 | | development project area;
|
14 | | (E) A description of the economic development plan or |
15 | | economic
development project if a
plan or project
is a subject |
16 | | matter of the hearing; and
|
17 | | (F) Such other matters as the municipality may deem |
18 | | appropriate.
|
19 | | (3) Not less than 30 days prior to the date set for |
20 | | hearing, the
municipality shall give notice by mail as provided |
21 | | in this subsection (b)
to all taxing districts, of which |
22 | | taxable property is included in the
economic development |
23 | | project area, and to the Department. In addition to
the other |
24 | | requirements under this subsection (b), the notice shall |
25 | | include
an invitation to the Department and each taxing |
26 | | district to submit comments
to the municipality concerning the |
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1 | | subject matter of the hearing prior to
the date of hearing.
|
2 | | (c) At the public hearing any interested person, the |
3 | | Department or any
affected taxing district may file written |
4 | | objections with the municipal clerk
and may be heard orally |
5 | | with respect to any issues embodied in
the notice. The |
6 | | municipality shall hear and determine all alternate
proposals |
7 | | or bids for any proposed conveyance, lease, mortgage or other
|
8 | | disposition of land and all protests and
objections at the |
9 | | hearing, and the hearing may be adjourned to another date
|
10 | | without further notice other than a motion to be entered upon |
11 | | the minutes
fixing the time and place of the adjourned hearing.
|
12 | | Public hearings with regard to an economic development plan, |
13 | | economic
development project area, or economic development |
14 | | project may be held simultaneously.
|
15 | | (d) At the public hearing or at any time prior to the |
16 | | adoption by the
municipality of an ordinance approving an |
17 | | economic development plan, the
municipality may make changes in |
18 | | the economic development plan.
Changes which (1) alter the
|
19 | | exterior boundaries of the proposed economic development |
20 | | project area,
(2) substantially affect the general land uses |
21 | | established in the proposed
economic development plan, (3) |
22 | | substantially change the nature of the
proposed economic |
23 | | development project, (4) change the general description of
any |
24 | | proposed developer, user or tenant of any property to be |
25 | | located or
improved within the economic development project |
26 | | area, or (5) change the
description of the type, class and |
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1 | | number of employees to be employed in
the operation of the |
2 | | facilities to be developed or improved within the
economic |
3 | | development project area shall be made only after notice and
|
4 | | hearing pursuant to the procedures set forth in this Section.
|
5 | | Changes which
do not (1) alter the exterior boundaries of a |
6 | | proposed economic development project area,
(2) substantially |
7 | | affect the general land uses established in the proposed
|
8 | | economic development plan, (3) substantially change the nature |
9 | | of the proposed economic
development project, (4) change the |
10 | | general description of any proposed
developer, user or tenant |
11 | | of any property to be located or improved within
the economic |
12 | | development project area, or (5) change the description of the
|
13 | | type, class and number of employees to be employed in the |
14 | | operation of the
facilities to be
developed or improved within |
15 | | the economic development project area may be
made without |
16 | | further hearing, provided that
the municipality shall give |
17 | | notice of its changes by mail to the Department
and to each |
18 | | affected taxing district and by publication in a newspaper or
|
19 | | newspapers of general circulation within the affected taxing |
20 | | districts.
Such notice by mail and by publication shall each |
21 | | occur not later than 10
days following the adoption by |
22 | | ordinance of such changes.
|
23 | | (e) At any time within 30 days of the final adjournment of |
24 | | the
public hearing, a municipality may, by ordinance, approve |
25 | | the economic
development plan, establish the economic |
26 | | development project area, and
authorize tax increment
|
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1 | | allocation financing for such economic development project |
2 | | area. Any
ordinance adopted which approves an economic |
3 | | development plan shall
contain findings that the developer or |
4 | | any of its successor entities and its subsidiaries economic |
5 | | development project
shall create or retain
not less than 4,250 |
6 | | 2,000 full-time equivalent jobs, that private investment in an
|
7 | | amount not less than $100,000,000 shall occur in the
economic |
8 | | development project area, that the economic development |
9 | | project
will encourage the increase of commerce and industry |
10 | | within the State,
thereby reducing the evils attendant upon |
11 | | unemployment and increasing
opportunities for personal income, |
12 | | and that the economic
development project will increase or |
13 | | maintain the property, sales and
income tax bases of the |
14 | | municipality and of the State. Any ordinance
adopted which |
15 | | establishes an economic development project area shall
contain |
16 | | the boundaries of such area by legal description and, where
|
17 | | possible, by street location. Any ordinance adopted which |
18 | | authorizes tax
increment allocation financing shall provide |
19 | | that the ad valorem taxes, if
any, arising from the levies upon |
20 | | taxable real property in such economic
development project area |
21 | | by taxing districts and tax rates determined in
the manner |
22 | | provided in subsection (b) of Section 6 of this Act each year
|
23 | | after the effective date of the ordinance until economic |
24 | | development
project costs and all municipal obligations |
25 | | financing economic development
project costs incurred under |
26 | | this Act have been paid shall be divided as follows:
|
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1 | | (1) That portion of taxes levied upon each taxable lot, |
2 | | block, tract or
parcel of real property which is attributable |
3 | | to the lower of the current
equalized assessed value or the |
4 | | initial equalized assessed value of each
such taxable lot, |
5 | | block, tract or parcel of real property in the economic
|
6 | | development project area shall be allocated to and when |
7 | | collected shall be
paid by the county collector to the |
8 | | respective affected taxing districts in
the manner required by |
9 | | law in the absence of the adoption of tax increment
allocation |
10 | | financing.
|
11 | | (2) That portion, if any, of such taxes which is |
12 | | attributable to the
increase in the current equalized assessed |
13 | | valuation of each taxable lot,
block, tract or parcel of real |
14 | | property in the economic development project
area over and |
15 | | above the initial equalized assessed value of each property
in |
16 | | the economic development project area shall be allocated to and |
17 | | when
collected shall be paid to the municipal treasurer who |
18 | | shall deposit such
taxes into a special fund called the special |
19 | | tax allocation fund of the
municipality for the purpose of |
20 | | paying economic development project costs
and obligations |
21 | | incurred in the payment thereof.
|
22 | | (f) After a municipality has by ordinance approved an |
23 | | economic
development plan and established an economic |
24 | | development project area,
the plan may be amended and the
|
25 | | boundaries of the area may be altered only as herein provided.
|
26 | | Amendments which (1) alter the exterior boundaries of an |
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|
1 | | economic development
project area, (2) substantially affect |
2 | | the general land uses established pursuant to the
economic |
3 | | development plan, (3) substantially change the
nature of the |
4 | | economic development project, (4) change
the general |
5 | | description
of any proposed developer, user, or tenant of any |
6 | | property to be located or
improved within the economic |
7 | | development project area, or (5) change the description
of the |
8 | | type, class and number of employees to be employed in the |
9 | | operation
of the facilities to be developed or improved within |
10 | | the economic
development project area, shall be made only after
|
11 | | notice and hearing pursuant to the procedures set forth in this |
12 | | Section.
Amendments which do not
(1) alter the boundaries of |
13 | | the economic
development project area,
(2) substantially |
14 | | affect the general land uses established in the economic
|
15 | | development plan, (3) substantially change the nature of the |
16 | | economic development
project, (4) change the general |
17 | | description of any proposed developer, user, or tenant
of any |
18 | | property to be located or improved within the economic |
19 | | development
project area, or (5) change the description of the |
20 | | type, class and number of employees
to be employed in the |
21 | | operation of the facilities
to be developed or improved within |
22 | | the economic development project area
may be made without |
23 | | further hearing, provided that
the municipality shall give
|
24 | | notice of any amendment by mail to the Department and to each |
25 | | taxing
district and by publication in a newspaper or newspapers |
26 | | of
general circulation within the affected taxing districts. |
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1 | | Such notice by
mail and by publication shall each occur not |
2 | | later than 10 days following
the adoption by ordinance of any |
3 | | amendments. |
4 | | (g) Extension of economic development project area; |
5 | | allocations; payment of outstanding claims; changes in |
6 | | equalized assessed valuation.
|
7 | | (1) Notwithstanding anything to the contrary set forth in |
8 | | this Act, upon the effective date of this amendatory Act of the |
9 | | 97th General Assembly, the duration of any existing economic |
10 | | development plan created pursuant to this Act is extended to |
11 | | the duration permitted under this subsection, up to a maximum |
12 | | duration of 15 years. |
13 | | (2) For the purposes of this Section, real estate taxes |
14 | | paid on property within the economic development project area |
15 | | during calendar year 2013 and remitted to the developer and the |
16 | | taxing districts in 2014 shall be the "base amount". Beginning |
17 | | with real estate taxes remitted in 2014, for any economic |
18 | | development plan extended by operation of item (1) of this |
19 | | subsection (g), until such time as all existing obligations, as |
20 | | that term is defined in item (5) of this subsection (g), have |
21 | | been satisfied, the allocation of the special tax allocation |
22 | | fund shall be as follows: |
23 | | (A) All receipts up to the first $350,000 shall be |
24 | | maintained by the municipality in an escrow account to be |
25 | | used solely for (i) expenses relating to the reports |
26 | | required by Section 4.7 of this Act and (ii) legal expenses |
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1 | | incurred in defense of any civil action brought against the |
2 | | municipality relating to the economic development |
3 | | agreement. The escrow account shall be within the scope of |
4 | | the annual audit provided in Section 4.7 of this Act. Each |
5 | | December 31 following a deposit into the escrow account, |
6 | | any unobligated balance in the escrow account shall be |
7 | | distributed to the taxing districts in the same manner and |
8 | | proportion as the most recent distribution by the county |
9 | | collector to the taxing districts in the economic |
10 | | development project area. |
11 | | (B) After the allocation required pursuant to |
12 | | paragraph (A) of this item (2), the next $5,000,000 of the |
13 | | receipts shall be allocated to the municipality. |
14 | | (C) After the allocations required pursuant to |
15 | | paragraphs (A) and (B) of this item (2), 55% of the |
16 | | remaining receipts shall be allocated to the developer. |
17 | | (D) After the allocations required pursuant to parts |
18 | | (A) and (B) of this item (2), 45% of the remaining receipts |
19 | | shall be allocated to the taxing districts located within |
20 | | the economic development project area, excluding the |
21 | | municipality. |
22 | | (3) For real estate taxes paid in 2012 and remitted to the |
23 | | developer and the taxing districts in 2013 and prior years, the |
24 | | allocation formula contained in any economic development plan |
25 | | in effect immediately prior to the effective date of this |
26 | | amendatory Act of the 97th General Assembly shall apply. |
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1 | | (4) Beginning with real estate taxes paid in 2014 and |
2 | | remitted to the developer and the taxing districts in 2015 and |
3 | | each year thereafter, if the taxes paid within the economic |
4 | | development project area change from the base amount, the |
5 | | allocation of the special tax allocation fund shall be as |
6 | | follows: |
7 | | (A) If the amount of current year taxes paid is less |
8 | | than the base amount, then the administrative escrow |
9 | | account shall receive the first $350,000 of receipts, the |
10 | | municipality shall receive the next $5,000,000 of |
11 | | receipts, the developer shall receive 55% of receipts over |
12 | | $5,350,000, and the remaining 45% of receipts over |
13 | | $5,350,000 shall be distributed to the taxing districts |
14 | | (excluding the municipality) in the same manner and |
15 | | proportion as the most recent distribution by the county |
16 | | collector to those taxing districts in the economic |
17 | | development project area. |
18 | | (B) If the amount of current year taxes paid is greater |
19 | | than the base amount, then 75% of the increase in real |
20 | | estate tax receipts shall be payable to the developer and |
21 | | the remaining 25% of the increase in real estate tax |
22 | | receipts shall be distributed to the taxing districts |
23 | | (including the municipality) pursuant to the formula in |
24 | | this subsection. |
25 | | (5) After (i) all existing obligations and interest thereon |
26 | | have been satisfied, (ii) any excess moneys have been |
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1 | | distributed pursuant to this subsection, and (iii) final |
2 | | closing of the books and records of the economic development |
3 | | project area has occurred, the municipality shall adopt an |
4 | | ordinance dissolving the special tax allocation fund for the |
5 | | economic development project area and terminating the |
6 | | designation of the economic development project area as an |
7 | | economic development project area. All excess moneys in the |
8 | | special tax allocation fund shall be distributed to the taxing |
9 | | districts in the same manner and proportion as the most recent |
10 | | distribution by the county collector to those taxing districts |
11 | | in the economic development project area. For the purpose of |
12 | | this subsection (g), "existing obligations" means (i) the |
13 | | obligations of the developer that existed before the base year, |
14 | | as certified by a sworn affidavit of the principal financial |
15 | | officer of the developer attesting that the amounts set forth |
16 | | are true and correct, (ii) obligations of the municipality |
17 | | relating to the payment of the obligations of the developer, |
18 | | and (iii) any amounts payable by taxing districts to the |
19 | | developer for property taxes determined to have been overpaid, |
20 | | to the extent that those amounts payable have been carried |
21 | | forward as an interest bearing note due to the developer. All |
22 | | obligations of the developer due and payable shall be processed |
23 | | and paid in the order received, with the oldest notes to be |
24 | | processed and paid first. Beginning January 1, 2012, all |
25 | | outstanding interest bearing notes shall bear interest at the |
26 | | rate of 4% until paid. |
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1 | | (h) Beginning on the effective date of this amendatory Act |
2 | | of the 97th General Assembly, the taxing districts shall meet |
3 | | annually 180 days after the close of the municipal fiscal year, |
4 | | or as soon as the economic development project audit for that |
5 | | fiscal year becomes available, to review the effectiveness and |
6 | | status of the economic development project area up to that |
7 | | date. |
8 | | (Source: P.A. 86-38.)
|
9 | | (20 ILCS 620/4.5 new) |
10 | | Sec. 4.5. Recapture. |
11 | | (a) In the event that the developer terminates all of its |
12 | | operations and vacates the redevelopment area within 60 months |
13 | | after the effective date of this amendatory Act of the 97th |
14 | | General Assembly, the developer shall be required to remit to |
15 | | the Department an amount equal to the payments disbursed to the |
16 | | developer in 2014 and subsequent years under the Agreement. |
17 | | Within 30 days after receipt, the Department shall remit such |
18 | | funds to the county collector. The county collector shall |
19 | | thereafter make distribution to the respective taxing |
20 | | districts in the same manner and proportion as the most recent |
21 | | distribution by the county collector to those taxing districts |
22 | | of real property taxes from real property in the economic |
23 | | development project area. |
24 | | (b) In the event the developer fails to maintain 4,250 jobs |
25 | | at any time before the termination of the economic development |
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1 | | project area, except as provided in subsection (c), the |
2 | | developer shall forfeit an amount of its allocations from the |
3 | | special tax allocation fund for that time period in which the |
4 | | developer failed to maintain 4,250 jobs. The amount forfeited |
5 | | shall equal the percentage of the year that the developer |
6 | | failed to maintain 4,250 jobs multiplied by the amount the |
7 | | developer would have received if they maintained 4,250 jobs for |
8 | | the entire year. Any funds that are forfeited shall be |
9 | | distributed to the taxing districts in the same manner and |
10 | | proportion as the most recent distribution by the county |
11 | | collector to those taxing districts (inclusive of the |
12 | | municipality) in the economic development project area. |
13 | | (c) In the event that the developer maintains no jobs at |
14 | | any time before the termination of the economic development |
15 | | project area, the municipality shall adopt an ordinance |
16 | | dissolving the special tax allocation fund for the economic |
17 | | development project area and terminating the economic |
18 | | development project area as an economic development project |
19 | | area. That ordinance shall be adopted no later than one year |
20 | | after the date that the developer maintains no jobs within the |
21 | | economic development project area. All excess moneys in the |
22 | | special tax allocation fund shall be distributed to the taxing |
23 | | districts in the same manner and proportion as the most recent |
24 | | distribution by the county collector to those taxing districts |
25 | | in the economic development project area. |
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1 | | (20 ILCS 620/4.7 new) |
2 | | Sec. 4.7. Municipal reports. After the effective date of |
3 | | this amendatory Act of the 97th General Assembly, a |
4 | | municipality shall submit in an electronic format all of the |
5 | | following information for each economic development project |
6 | | area (i) to the State Comptroller and (ii) to all taxing |
7 | | districts overlapping the economic development project area no |
8 | | later than 180 days after the close of each municipal fiscal |
9 | | year or as soon thereafter as the audited financial statements |
10 | | become available: |
11 | | (1) Any amendments to the economic development plan or |
12 | | the economic development project area. |
13 | | (2) Audited financial statements of the special tax |
14 | | allocation fund once a cumulative total of $100,000 has |
15 | | been deposited into the fund. |
16 | | (3) Certification of the Chief Executive Officer of the |
17 | | municipality that the municipality has complied with all of |
18 | | the requirements of this Act during the preceding fiscal |
19 | | year. |
20 | | (4) An opinion of legal counsel that the municipality |
21 | | is in compliance with this Act. |
22 | | (5) An analysis of the special tax allocation fund that |
23 | | sets forth: |
24 | | (A) the balance in the special tax allocation fund |
25 | | at the beginning of the fiscal year; |
26 | | (B) all amounts deposited in the special tax |
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1 | | allocation fund by source; |
2 | | (C) an itemized list of all expenditures from the |
3 | | special tax allocation fund by category of permissible |
4 | | economic development project cost; and |
5 | | (D) the balance in the special tax allocation fund |
6 | | at the end of the fiscal year, including a breakdown of |
7 | | that balance by source and a breakdown of that balance |
8 | | identifying any portion of the balance that is |
9 | | required, pledged, earmarked, or otherwise designated |
10 | | for payment of or securing of obligations and |
11 | | anticipated economic development project costs; any |
12 | | portion of that ending balance that has not been |
13 | | identified or is not identified as being required, |
14 | | pledged, earmarked, or otherwise designated for |
15 | | payment of or securing of obligations or anticipated |
16 | | economic development project costs shall be designated |
17 | | as surplus as set forth in Section 8 of this Act. |
18 | | (6) A description of all property purchased by the |
19 | | municipality within the economic development project area |
20 | | including: |
21 | | (A) street address; |
22 | | (B) approximate size or description of property; |
23 | | (C) purchase price; and |
24 | | (D) the seller of the property. |
25 | | (7) A statement setting forth all activities |
26 | | undertaken in furtherance of the objectives of the economic |
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1 | | development plan, including: |
2 | | (A) any project implemented in the preceding |
3 | | fiscal year; |
4 | | (B) a description of the economic development |
5 | | activities undertaken; |
6 | | (C) a description of any agreements entered into by |
7 | | the municipality with regard to the disposition or |
8 | | redevelopment of any property within the economic |
9 | | development project area; |
10 | | (D) additional information on the use of all funds |
11 | | received under this Act and steps taken by the |
12 | | municipality to achieve the objectives of the economic |
13 | | development plan; |
14 | | (E) information regarding contracts that the |
15 | | municipality's tax increment advisors or consultants |
16 | | have entered into with entities or persons that have |
17 | | received, or are receiving, payments financed by tax |
18 | | increment revenues produced by the same economic |
19 | | development project area; and |
20 | | (F) a review of public and, to the extent possible, |
21 | | private investment actually undertaken on or after the |
22 | | effective date of this amendatory Act of the 97th |
23 | | General Assembly and prior to the date of the report |
24 | | and estimated to be undertaken during the following |
25 | | fiscal year; this review shall, on a project by project |
26 | | basis, set forth the estimated amounts of public and |
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1 | | private investment incurred after the effective date |
2 | | of this amendatory Act of the 97th General Assembly and |
3 | | provide the ratio of private investment to public |
4 | | investment to the date of the report and as estimated |
5 | | to the completion of the economic development project. |
6 | | (8) With regard to any obligations issued by the |
7 | | municipality: |
8 | | (A) copies of any official statements; and |
9 | | (B) an analysis prepared by a financial advisor or |
10 | | underwriter setting forth: (i) the nature and term of |
11 | | those obligations; and (ii) projected debt service |
12 | | including required reserves and debt coverage. |
13 | | (9) For special tax allocation funds that have |
14 | | experienced cumulative deposits of incremental tax |
15 | | revenues of $100,000 or more, a certified audit report |
16 | | reviewing compliance with this Act performed by an |
17 | | independent certified public accountant licensed by the |
18 | | authority of the State of Illinois. The financial portion |
19 | | of the audit must be conducted in accordance with Standards |
20 | | for Audits of Governmental Organizations, Programs, |
21 | | Activities, and Functions adopted by the Comptroller |
22 | | General of the United States (1981), as amended, or the |
23 | | standards specified by Section 8-8-5 of the Illinois |
24 | | Municipal Auditing Law of the Illinois Municipal Code. The |
25 | | audit report shall contain a letter from the independent |
26 | | certified public accountant indicating compliance or |
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1 | | noncompliance with the requirements of subsection (e) of |
2 | | Section 3 of this Act. |
3 | | (10) A list of all intergovernmental agreements in |
4 | | effect during the fiscal year to which the municipality is |
5 | | a party and an accounting of any moneys transferred or |
6 | | received by the municipality during that fiscal year |
7 | | pursuant to those intergovernmental agreements.
|
8 | | (20 ILCS 620/5) (from Ch. 67 1/2, par. 1005)
|
9 | | Sec. 5.
Submission to Department; certification by |
10 | | Department;
limitation on number of permissible economic |
11 | | development project areas.
(a) The municipality shall submit |
12 | | certified copies of any ordinances
adopted approving an |
13 | | economic development plan, establishing an
economic |
14 | | development project area, and authorizing tax increment |
15 | | allocation
financing for such economic development project |
16 | | area to the Department,
together with (1) a map of the economic
|
17 | | development project area, (2) a copy of the economic |
18 | | development plan as
approved, (3) an analysis, and any |
19 | | supporting documents and statistics,
demonstrating that the |
20 | | developer or any of its successor entities and its subsidiaries |
21 | | economic development project shall
create or retain
not less |
22 | | than 4,250 2,000 full-time equivalent jobs and that private |
23 | | investment
in the amount of not less than $100,000,000 shall |
24 | | occur
in the economic development project area, (4) an estimate |
25 | | of the economic
impact of the economic development project and |
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1 | | the use of tax increment
allocation financing upon the revenues |
2 | | of the municipality and the affected
taxing districts, (5) a |
3 | | record of all public hearings had in connection
with the |
4 | | establishment of the economic development project area, and (6)
|
5 | | such other information as the Department by regulation may |
6 | | require.
|
7 | | (b) Upon receipt of an application from a municipality the |
8 | | Department
shall review the application to determine whether |
9 | | the economic development
project area qualifies as an economic |
10 | | development project area under this
Act. At its discretion, the |
11 | | Department may accept or reject the
application or may request |
12 | | such additional information as it deems
necessary or advisable |
13 | | to aid its review. If any such area is found to be
qualified to |
14 | | be an economic development project area, the Department shall
|
15 | | approve and certify such economic development project area and |
16 | | shall
provide written notice of its approval and certification |
17 | | to the municipality and
to the county clerk. In determining |
18 | | whether an economic development
project area shall be approved |
19 | | and certified, the Department shall consider
(1) whether, |
20 | | without public intervention, the State would suffer
|
21 | | substantial economic dislocation, such as relocation of a |
22 | | commercial
business or industrial or manufacturing facility to |
23 | | another state,
territory or country, or would not otherwise |
24 | | benefit from private
investment offering substantial |
25 | | employment opportunities and economic
growth, and (2) the |
26 | | impact on the revenues of the municipality and the
affected |
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1 | | taxing districts of the use of tax increment allocation |
2 | | financing
in connection with the economic development project.
|
3 | | (c) On or before the date which is 18 months following the |
4 | | date on which
this Act becomes law, the Department shall submit |
5 | | to the General Assembly a
report detailing the number of |
6 | | economic development project areas it has
approved and |
7 | | certified, the number and type of jobs created or retained
|
8 | | therein, the aggregate amount of private investment therein, |
9 | | the impact on
the revenues of municipalities and affected |
10 | | taxing districts of the use of
tax increment allocation |
11 | | financing therein, and such additional information
as the |
12 | | Department may determine to be relevant. On or after the date |
13 | | which
is 20 months following the date on which this Act becomes |
14 | | law the authority
granted hereunder to municipalities to |
15 | | establish economic development
project areas and to adopt tax |
16 | | increment allocation financing in connection
therewith and to |
17 | | the Department to approve and certify economic development
|
18 | | project areas shall expire unless the General Assembly shall |
19 | | have
authorized municipalities and the Department to continue |
20 | | to exercise the
powers granted to them hereunder.
|
21 | | (Source: P.A. 86-38.)
|
22 | | (20 ILCS 620/8) (from Ch. 67 1/2, par. 1008)
|
23 | | Sec. 8.
Issuance of obligations for economic development |
24 | | project
costs. Obligations secured by the special tax |
25 | | allocation fund provided for in
Section 7 of this Act for an |
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1 | | economic development project area may be issued to
provide for |
2 | | economic development project costs. Those obligations, when so
|
3 | | issued, shall be retired in the manner provided in the |
4 | | ordinance
authorizing the issuance of the obligations by the |
5 | | receipts of taxes
levied as specified in Section 6 of this Act |
6 | | against the taxable property
included in
the economic |
7 | | development project area and by other revenue designated or
|
8 | | pledged by the municipality. A municipality may in the |
9 | | ordinance pledge
all or any part of the funds in and to be |
10 | | deposited in the special tax
allocation fund created pursuant |
11 | | to Section 7 of this Act to the payment of the
economic |
12 | | development project costs and obligations.
Whenever a |
13 | | municipality pledges all of the funds to the credit of a
|
14 | | special tax allocation fund to secure obligations issued or to |
15 | | be issued to
pay economic development project costs, the |
16 | | municipality may specifically
provide that funds remaining to |
17 | | the credit of such special tax allocation
fund after the |
18 | | payment of such obligations shall be accounted for annually
and |
19 | | shall be deemed to be "surplus" funds, and such "surplus" funds |
20 | | shall be
distributed as hereinafter provided. Whenever a |
21 | | municipality pledges less
than all of the monies to the credit |
22 | | of a special tax allocation fund to
secure obligations issued |
23 | | or to be issued to pay economic development
project costs, the |
24 | | municipality shall provide that monies to the credit of
the |
25 | | special tax allocation fund and not subject to such pledge or
|
26 | | otherwise encumbered or required for payment of contractual |
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1 | | obligations
for specific economic development project costs |
2 | | shall be calculated
annually and shall be deemed to be |
3 | | "surplus" funds, and such "surplus"
funds shall be distributed |
4 | | as hereinafter provided. All funds to the
credit of a special |
5 | | tax allocation fund which are deemed to be "surplus"
funds |
6 | | shall be distributed annually within 180 days of the close of |
7 | | the
municipality's fiscal year by being paid by the municipal |
8 | | treasurer to the
county collector.
The county collector shall
|
9 | | thereafter make distribution to the respective taxing |
10 | | districts in the same
manner and proportion as the most recent |
11 | | distribution by the county
collector to those taxing districts |
12 | | of real property taxes from real
property in the economic |
13 | | development project area.
|
14 | | Without limiting the foregoing in this Section the |
15 | | municipality may, in
addition to obligations secured by the |
16 | | special tax allocation fund, pledge
for a period not greater |
17 | | than the term of the obligations towards payment
of those |
18 | | obligations any part or any combination of the following: (i) |
19 | | net
revenues of all or part of any economic development |
20 | | project; (ii) taxes
levied and collected on any or all property |
21 | | in the municipality, including,
specifically, taxes levied or |
22 | | imposed by the municipality in a special
service area pursuant |
23 | | to "An Act to provide the manner of levying or
imposing taxes |
24 | | for the provision of special services to areas within the
|
25 | | boundaries of home rule units and non-home rule municipalities |
26 | | and
counties", approved September 21, 1973, as now or hereafter |
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1 | | amended; (iii) the
full faith and credit of the municipality; |
2 | | (iv) a mortgage on part or all
of the economic development |
3 | | project; or (v) any other taxes or anticipated
receipts that |
4 | | the municipality may lawfully pledge.
|
5 | | Such obligations may be issued in one or more series |
6 | | bearing interest at
such rate or rates as the corporate |
7 | | authorities of the municipality shall
determine by ordinance, |
8 | | which rate or rates may be variable or fixed,
without regard to |
9 | | any limitations contained in any law now in effect or
hereafter |
10 | | adopted. Such obligations shall bear such date or dates, mature
|
11 | | at such time or times not exceeding 38 20 years from their |
12 | | respective dates,
but in no event exceeding 38 23 years from |
13 | | the date of establishment of the
economic development project |
14 | | area, be in such denomination, be in such
form, whether coupon, |
15 | | registered or book-entry, carry such registration,
conversion |
16 | | and exchange privileges, be executed in such manner, be payable
|
17 | | in such medium of payment at such place or places within or |
18 | | without the
State of Illinois, contain such covenants, terms |
19 | | and conditions, be subject
to redemption with or without |
20 | | premium, be subject to defeasance upon such
terms, and have |
21 | | such rank or priority, as such ordinance shall provide.
|
22 | | Obligations issued pursuant to this Act may be sold at public |
23 | | or private
sale at such price as shall be determined by the |
24 | | corporate authorities of
the municipalities. Such obligations |
25 | | may, but need not, be issued utilizing
the provisions of any |
26 | | one or more of the omnibus bond Acts
specified in Section 1.33 |
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1 | | of "An Act to revise the law in relation to the
construction of |
2 | | the statutes", approved March 5, 1874, as now or hereafter
|
3 | | amended. No referendum approval of the electors shall be |
4 | | required as a condition to
the issuance of obligations pursuant |
5 | | to this Act except as provided in this Section.
|
6 | | Whenever a municipality issues bonds for the purpose of |
7 | | financing
economic development project costs, the municipality |
8 | | may provide by
ordinance for the appointment of a trustee, |
9 | | which may be any trust company
within the State, and for the |
10 | | establishment of the funds or accounts to be
maintained by such |
11 | | trustee as the municipality shall deem necessary to
provide for |
12 | | the security and payment of the bonds. If the municipality
|
13 | | provides for the appointment of a trustee, the trustee shall be |
14 | | considered
the assignee of any payments assigned by the |
15 | | municipality pursuant to the
ordinance and this Section. Any |
16 | | amounts paid to the trustee as assignee
shall be deposited in |
17 | | the funds or accounts established pursuant to the
trust |
18 | | agreement, and shall be held by the trustee in trust for the |
19 | | benefit of
the holders
of the bonds, and the holders shall have |
20 | | a lien on and a security interest
in those bonds or accounts so |
21 | | long as the bonds remain outstanding and
unpaid. Upon |
22 | | retirement of the bonds, the trustee shall pay over any excess
|
23 | | amounts held to the municipality for deposit in the special tax |
24 | | allocation
fund.
|
25 | | In the event the municipality authorizes the issuance of |
26 | | obligations
pursuant to the authority of this Act secured by |
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1 | | the full faith and
credit of the municipality, or pledges ad |
2 | | valorem taxes pursuant to clause
(ii) of the second paragraph |
3 | | of this Section, which obligations are other than
obligations
|
4 | | which may be issued under home rule powers provided by Article |
5 | | VII,
Section 6 of the Illinois Constitution or which ad valorem |
6 | | taxes are other than
ad valorem
taxes which may be pledged |
7 | | under home rule powers provided by Article VII, Section
6 of |
8 | | the Illinois Constitution or which are levied in a special |
9 | | service
area pursuant to "An Act to provide the manner of |
10 | | levying or imposing taxes
for the provision of special services |
11 | | to areas within the boundaries of
home rule units and non-home |
12 | | rule municipalities and counties", approved
September 21, |
13 | | 1973, as now or hereafter amended,
the ordinance authorizing |
14 | | the
issuance of those obligations or pledging those taxes shall |
15 | | be published
within 10 days after the ordinance has been |
16 | | adopted, in one or more
newspapers having a general circulation |
17 | | within the municipality. The
publication of the ordinance shall |
18 | | be accompanied by a notice of (1) the
specific number of voters |
19 | | required to sign a petition requesting the
question of the |
20 | | issuance of the obligations or pledging such ad valorem taxes
|
21 | | to be submitted to the electors; (2) the time within which the |
22 | | petition must
be filed; and (3) the date of the prospective |
23 | | referendum. The municipal
clerk shall provide a petition form |
24 | | to any individual requesting one.
|
25 | | If no petition is filed with the municipal clerk, as |
26 | | hereinafter provided
in this Section, within 21 days after the |
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1 | | publication of the ordinance, the
ordinance shall be in effect. |
2 | | However, if within that 21 day period a petition
is filed with |
3 | | the municipal clerk, signed by electors numbering not less
than |
4 | | 15% of the number of electors voting for the mayor or president |
5 | | at the
last general municipal election, asking that the |
6 | | question of issuing
obligations using full faith and credit of |
7 | | the municipality as security for
the cost of paying for |
8 | | economic development project costs, or of pledging
such ad |
9 | | valorem taxes for the payment of those obligations, or both, be |
10 | | submitted
to the electors of the municipality, the municipality |
11 | | shall not be
authorized to issue obligations of the |
12 | | municipality using the full faith and
credit of the |
13 | | municipality as security or pledging such ad valorem taxes for |
14 | | the
payment of those obligations, or both, until the |
15 | | proposition
has been submitted to and approved by a majority of |
16 | | the voters voting on
the proposition at a regularly scheduled |
17 | | election. The municipality shall
certify the proposition to the |
18 | | proper election authorities for submission
in accordance with |
19 | | the general election law.
|
20 | | The ordinance authorizing the obligations may provide that |
21 | | the
obligations shall contain a recital that they are issued |
22 | | pursuant to this
Act, which recital shall be conclusive |
23 | | evidence of their validity and of
the regularity of their |
24 | | issuance.
|
25 | | In the event the municipality authorizes issuance of |
26 | | obligations pursuant
to this Act secured by the full faith and |
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1 | | credit of the municipality, the
ordinance authorizing the |
2 | | obligations may provide for the levy and
collection of a direct |
3 | | annual tax upon all taxable property within the
municipality |
4 | | sufficient to pay the principal thereof and interest thereon
as |
5 | | it matures, which levy may be in addition to and exclusive of |
6 | | the
maximum of all other taxes authorized to be levied by the |
7 | | municipality,
which levy, however, shall be abated to the |
8 | | extent that monies from other
sources are available for payment |
9 | | of the obligations and the municipality
certifies the amount of |
10 | | those monies available to the county clerk.
|
11 | | A certified copy of the ordinance shall be filed with the |
12 | | county clerk
of each county in which any portion of the |
13 | | municipality is situated, and
shall constitute the authority |
14 | | for the extension and collection of the taxes
to be deposited |
15 | | in the special tax allocation fund.
|
16 | | A municipality may also issue its obligations to refund, in |
17 | | whole or in
part, obligations theretofore issued by the |
18 | | municipality under the
authority of this Act, whether at or |
19 | | prior to maturity. However,
the last maturity of the refunding |
20 | | obligations shall not be expressed
to mature later than 38 23 |
21 | | years from the date of the ordinance establishing
the economic |
22 | | development project area.
|
23 | | In the event a municipality issues obligations under home |
24 | | rule powers or
other legislative authority, the proceeds of |
25 | | which are pledged to pay for
economic development project |
26 | | costs, the municipality may, if it has
followed the procedures |
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1 | | in conformance with this Act, retire those
obligations from |
2 | | funds in the special tax allocation fund in amounts and in
such |
3 | | manner as if those obligations had been issued pursuant to the
|
4 | | provisions of this Act.
|
5 | | No obligations issued pursuant to this Act shall be |
6 | | regarded as
indebtedness of the municipality issuing those |
7 | | obligations or any other
taxing district for the purpose of any |
8 | | limitation imposed by law.
|
9 | | Obligations issued pursuant to this Act shall not be |
10 | | subject to the
provisions of "An Act to authorize public |
11 | | corporations to issue bonds,
other evidences of indebtedness |
12 | | and tax anticipation warrants subject to
interest rate |
13 | | limitations set forth therein", approved May 26, 1970, as |
14 | | amended.
|
15 | | (Source: P.A. 86-38.)
|
16 | | (20 ILCS 620/9) (from Ch. 67 1/2, par. 1009)
|
17 | | Sec. 9. Powers of municipalities. In addition to powers |
18 | | which it may
now
have, any municipality has the power under |
19 | | this Act:
|
20 | | (a) To make and enter into all contracts necessary or |
21 | | incidental to the
implementation and furtherance of an economic |
22 | | development plan.
|
23 | | (b) Within an economic development project area, to acquire |
24 | | by purchase,
donation, lease or eminent domain, and to own, |
25 | | convey, lease, mortgage or
dispose of land and other real or |
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1 | | personal property or rights or interests
therein; and to grant |
2 | | or acquire licenses, easements and options with
respect |
3 | | thereto, all in the manner and at such price the municipality
|
4 | | determines is reasonably necessary to achieve the objectives of |
5 | | the
economic development project. No conveyance, lease, |
6 | | mortgage, disposition
of land or other property acquired by the |
7 | | municipality, or agreement
relating to the development of |
8 | | property, shall be made or executed except
pursuant to prior |
9 | | official action of the municipality.
No conveyance, lease, |
10 | | mortgage or other disposition of land, and no
agreement |
11 | | relating to the development of property, shall be made without
|
12 | | making public disclosure of the terms and disposition of all |
13 | | bids and
proposals submitted to the municipality in connection |
14 | | therewith.
|
15 | | (c) To clear any area within an economic development |
16 | | project area by
demolition or removal of any existing |
17 | | buildings, structures, fixtures,
utilities or improvements, |
18 | | and to clear and grade land.
|
19 | | (d) To install, repair, construct, reconstruct or relocate |
20 | | public
streets, public utilities, and other public site |
21 | | improvements within or
without an economic development project |
22 | | area which are essential to the
preparation of an economic |
23 | | development project area for use in accordance
with an economic |
24 | | development plan.
|
25 | | (e) To renovate, rehabilitate, reconstruct, relocate, |
26 | | repair or remodel
any existing buildings, improvements, and |
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1 | | fixtures within an economic
development project area.
|
2 | | (f) To construct , acquire, and operate public |
3 | | improvements, including but not limited to,
publicly owned |
4 | | buildings, structures, works, utilities or fixtures within any |
5 | | economic
development project area , subject to the restrictions |
6 | | of item (5) of subsection (e) of Section 3 of this Act .
|
7 | | (g) To issue obligations as provided in this Act provided .
|
8 | | (h) To fix, charge and collect fees, rents and charges for |
9 | | the use of
any building, facility or property or any portion |
10 | | thereof owned or leased
by the municipality within an economic |
11 | | development project area.
|
12 | | (i) To accept grants, guarantees, donations of property or |
13 | | labor, or any
other thing of value for use in connection with |
14 | | an economic development project.
|
15 | | (j) To pay or cause to be paid economic development project |
16 | | costs. Any
payments to be made by the municipality to |
17 | | developers or other
nongovernmental persons for economic |
18 | | development project costs incurred by
such developer or other |
19 | | nongovernmental person shall be made only pursuant
to the prior |
20 | | official action of the municipality evidencing an intent to
pay |
21 | | or cause to be paid such economic development project costs. A
|
22 | | municipality is not required to obtain any right, title or |
23 | | interest in any
real or personal property in order to pay |
24 | | economic development project
costs associated with such |
25 | | property. The municipality shall adopt such
accounting |
26 | | procedures as may be necessary to determine that such economic
|
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1 | | development project costs are properly paid.
|
2 | | (k) To exercise any and all other powers necessary to |
3 | | effectuate the
purposes of this Act.
|
4 | | (l) To create a commission of not less than 5 or more than |
5 | | 15 persons to be
appointed by the mayor or president of the |
6 | | municipality with the consent of
the majority of the corporate |
7 | | authorities of the municipality. Members of a
commission shall |
8 | | be appointed for initial terms of 1, 2, 3, 4, and 5 years,
|
9 | | respectively, in such numbers as to provide that the terms of |
10 | | not more than
1/3 of all such members shall expire in any one |
11 | | year. Their successors
shall be appointed for a term of 5 |
12 | | years. The commission, subject to
approval of the corporate |
13 | | authorities, may exercise the powers enumerated in
this |
14 | | Section. The commission shall also have the power to hold the |
15 | | public
hearings required by this Act and make recommendations |
16 | | to the corporate
authorities concerning the approval of |
17 | | economic development plans, the
establishment of economic |
18 | | development project areas, and the adoption of
tax increment |
19 | | allocation financing for economic development project areas.
|
20 | | (Source: P.A. 91-357, eff. 7-29-99.)
|
21 | | (20 ILCS 620/11) (from Ch. 67 1/2, par. 1011)
|
22 | | Sec. 11. Payment of project costs; revenues from |
23 | | governmental municipal property. Revenues received by a taxing |
24 | | district municipality from any property, building or
facility |
25 | | owned, leased or operated by the taxing district municipality |
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1 | | or any agency or
authority established by the taxing district |
2 | | municipality may be used to pay economic
development project |
3 | | costs, or reduce outstanding obligations of the
taxing district |
4 | | municipality incurred under this Act for economic development |
5 | | project
costs. The taxing district municipality may place those |
6 | | revenues in the special tax
allocation fund which shall be held |
7 | | by the municipal treasurer of the taxing district or other
|
8 | | person designated by the taxing district municipality . Revenue |
9 | | received by a taxing district the municipality
from the sale or |
10 | | other disposition of real or personal property or rights
or |
11 | | interests therein acquired by a taxing district the
|
12 | | municipality with the proceeds of obligations funded by tax |
13 | | increment
allocation financing may be used to acquire and |
14 | | operate other governmental property that is within the economic |
15 | | development project area or that provides services within the |
16 | | economic development project area, subject to the restrictions |
17 | | of item (5) of subsection (e) of Section 3 of this Act. shall |
18 | | be deposited by the municipality in the special
tax allocation |
19 | | fund.
|
20 | | (Source: P.A. 86-38.)
|
21 | | Section 15-7. The New Markets Development Program Act is |
22 | | amended by changing Section 50 as follows:
|
23 | | (20 ILCS 663/50)
|
24 | | Sec. 50. Sunset. For fiscal years following fiscal year |
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1 | | 2017 2012 , qualified equity investments shall not be made under |
2 | | this Act unless reauthorization is made pursuant to this |
3 | | Section. For all fiscal years following fiscal year 2017 2012 , |
4 | | unless the General Assembly adopts a joint resolution granting |
5 | | authority to the Department to approve qualified equity |
6 | | investments for the Illinois new markets development program |
7 | | and clearly describing the amount of tax credits available for |
8 | | the next fiscal year, or otherwise complies with the provisions |
9 | | of this Section, no qualified equity investments may be |
10 | | permitted to be made under this Act. The amount of available |
11 | | tax credits contained in such a resolution shall not exceed the |
12 | | limitation provided under Section 20. Nothing in this Section |
13 | | precludes a taxpayer who makes a qualified equity investment |
14 | | prior to the expiration of authority to make qualified equity |
15 | | investments from claiming tax credits relating to that |
16 | | qualified equity investment for each applicable credit |
17 | | allowance date.
|
18 | | (Source: P.A. 95-1024, eff. 12-31-08.) |
19 | | Section 15-10. The Illinois Income Tax Act is amended by |
20 | | changing Sections 201, 207, 250, 304, 804, and 1501 as follows: |
21 | | (35 ILCS 5/201) (from Ch. 120, par. 2-201) |
22 | | Sec. 201. Tax Imposed. |
23 | | (a) In general. A tax measured by net income is hereby |
24 | | imposed on every
individual, corporation, trust and estate for |
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1 | | each taxable year ending
after July 31, 1969 on the privilege |
2 | | of earning or receiving income in or
as a resident of this |
3 | | State. Such tax shall be in addition to all other
occupation or |
4 | | privilege taxes imposed by this State or by any municipal
|
5 | | corporation or political subdivision thereof. |
6 | | (b) Rates. The tax imposed by subsection (a) of this |
7 | | Section shall be
determined as follows, except as adjusted by |
8 | | subsection (d-1): |
9 | | (1) In the case of an individual, trust or estate, for |
10 | | taxable years
ending prior to July 1, 1989, an amount equal |
11 | | to 2 1/2% of the taxpayer's
net income for the taxable |
12 | | year. |
13 | | (2) In the case of an individual, trust or estate, for |
14 | | taxable years
beginning prior to July 1, 1989 and ending |
15 | | after June 30, 1989, an amount
equal to the sum of (i) 2 |
16 | | 1/2% of the taxpayer's net income for the period
prior to |
17 | | July 1, 1989, as calculated under Section 202.3, and (ii) |
18 | | 3% of the
taxpayer's net income for the period after June |
19 | | 30, 1989, as calculated
under Section 202.3. |
20 | | (3) In the case of an individual, trust or estate, for |
21 | | taxable years
beginning after June 30, 1989, and ending |
22 | | prior to January 1, 2011, an amount equal to 3% of the |
23 | | taxpayer's net
income for the taxable year. |
24 | | (4) In the case of an individual, trust, or estate, for |
25 | | taxable years beginning prior to January 1, 2011, and |
26 | | ending after December 31, 2010, an amount equal to the sum |
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1 | | of (i) 3% of the taxpayer's net income for the period prior |
2 | | to January 1, 2011, as calculated under Section 202.5, and |
3 | | (ii) 5% of the taxpayer's net income for the period after |
4 | | December 31, 2010, as calculated under Section 202.5. |
5 | | (5) In the case of an individual, trust, or estate, for |
6 | | taxable years beginning on or after January 1, 2011, and |
7 | | ending prior to January 1, 2015, an amount equal to 5% of |
8 | | the taxpayer's net income for the taxable year. |
9 | | (5.1) In the case of an individual, trust, or estate, |
10 | | for taxable years beginning prior to January 1, 2015, and |
11 | | ending after December 31, 2014, an amount equal to the sum |
12 | | of (i) 5% of the taxpayer's net income for the period prior |
13 | | to January 1, 2015, as calculated under Section 202.5, and |
14 | | (ii) 3.75% of the taxpayer's net income for the period |
15 | | after December 31, 2014, as calculated under Section 202.5. |
16 | | (5.2) In the case of an individual, trust, or estate, |
17 | | for taxable years beginning on or after January 1, 2015, |
18 | | and ending prior to January 1, 2025, an amount equal to |
19 | | 3.75% of the taxpayer's net income for the taxable year. |
20 | | (5.3) In the case of an individual, trust, or estate, |
21 | | for taxable years beginning prior to January 1, 2025, and |
22 | | ending after December 31, 2024, an amount equal to the sum |
23 | | of (i) 3.75% of the taxpayer's net income for the period |
24 | | prior to January 1, 2025, as calculated under Section |
25 | | 202.5, and (ii) 3.25% of the taxpayer's net income for the |
26 | | period after December 31, 2024, as calculated under Section |
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1 | | 202.5. |
2 | | (5.4) In the case of an individual, trust, or estate, |
3 | | for taxable years beginning on or after January 1, 2025, an |
4 | | amount equal to 3.25% of the taxpayer's net income for the |
5 | | taxable year. |
6 | | (6) In the case of a corporation, for taxable years
|
7 | | ending prior to July 1, 1989, an amount equal to 4% of the
|
8 | | taxpayer's net income for the taxable year. |
9 | | (7) In the case of a corporation, for taxable years |
10 | | beginning prior to
July 1, 1989 and ending after June 30, |
11 | | 1989, an amount equal to the sum of
(i) 4% of the |
12 | | taxpayer's net income for the period prior to July 1, 1989,
|
13 | | as calculated under Section 202.3, and (ii) 4.8% of the |
14 | | taxpayer's net
income for the period after June 30, 1989, |
15 | | as calculated under Section
202.3. |
16 | | (8) In the case of a corporation, for taxable years |
17 | | beginning after
June 30, 1989, and ending prior to January |
18 | | 1, 2011, an amount equal to 4.8% of the taxpayer's net |
19 | | income for the
taxable year. |
20 | | (9) In the case of a corporation, for taxable years |
21 | | beginning prior to January 1, 2011, and ending after |
22 | | December 31, 2010, an amount equal to the sum of (i) 4.8% |
23 | | of the taxpayer's net income for the period prior to |
24 | | January 1, 2011, as calculated under Section 202.5, and |
25 | | (ii) 7% of the taxpayer's net income for the period after |
26 | | December 31, 2010, as calculated under Section 202.5. |
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1 | | (10) In the case of a corporation, for taxable years |
2 | | beginning on or after January 1, 2011, and ending prior to |
3 | | January 1, 2015, an amount equal to 7% of the taxpayer's |
4 | | net income for the taxable year. |
5 | | (11) In the case of a corporation, for taxable years |
6 | | beginning prior to January 1, 2015, and ending after |
7 | | December 31, 2014, an amount equal to the sum of (i) 7% of |
8 | | the taxpayer's net income for the period prior to January |
9 | | 1, 2015, as calculated under Section 202.5, and (ii) 5.25% |
10 | | of the taxpayer's net income for the period after December |
11 | | 31, 2014, as calculated under Section 202.5. |
12 | | (12) In the case of a corporation, for taxable years |
13 | | beginning on or after January 1, 2015, and ending prior to |
14 | | January 1, 2025, an amount equal to 5.25% of the taxpayer's |
15 | | net income for the taxable year. |
16 | | (13) In the case of a corporation, for taxable years |
17 | | beginning prior to January 1, 2025, and ending after |
18 | | December 31, 2024, an amount equal to the sum of (i) 5.25% |
19 | | of the taxpayer's net income for the period prior to |
20 | | January 1, 2025, as calculated under Section 202.5, and |
21 | | (ii) 4.8% of the taxpayer's net income for the period after |
22 | | December 31, 2024, as calculated under Section 202.5. |
23 | | (14) In the case of a corporation, for taxable years |
24 | | beginning on or after January 1, 2025, an amount equal to |
25 | | 4.8% of the taxpayer's net income for the taxable year. |
26 | | The rates under this subsection (b) are subject to the |
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1 | | provisions of Section 201.5. |
2 | | (c) Personal Property Tax Replacement Income Tax.
|
3 | | Beginning on July 1, 1979 and thereafter, in addition to such |
4 | | income
tax, there is also hereby imposed the Personal Property |
5 | | Tax Replacement
Income Tax measured by net income on every |
6 | | corporation (including Subchapter
S corporations), partnership |
7 | | and trust, for each taxable year ending after
June 30, 1979. |
8 | | Such taxes are imposed on the privilege of earning or
receiving |
9 | | income in or as a resident of this State. The Personal Property
|
10 | | Tax Replacement Income Tax shall be in addition to the income |
11 | | tax imposed
by subsections (a) and (b) of this Section and in |
12 | | addition to all other
occupation or privilege taxes imposed by |
13 | | this State or by any municipal
corporation or political |
14 | | subdivision thereof. |
15 | | (d) Additional Personal Property Tax Replacement Income |
16 | | Tax Rates.
The personal property tax replacement income tax |
17 | | imposed by this subsection
and subsection (c) of this Section |
18 | | in the case of a corporation, other
than a Subchapter S |
19 | | corporation and except as adjusted by subsection (d-1),
shall |
20 | | be an additional amount equal to
2.85% of such taxpayer's net |
21 | | income for the taxable year, except that
beginning on January |
22 | | 1, 1981, and thereafter, the rate of 2.85% specified
in this |
23 | | subsection shall be reduced to 2.5%, and in the case of a
|
24 | | partnership, trust or a Subchapter S corporation shall be an |
25 | | additional
amount equal to 1.5% of such taxpayer's net income |
26 | | for the taxable year. |
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1 | | (d-1) Rate reduction for certain foreign insurers. In the |
2 | | case of a
foreign insurer, as defined by Section 35A-5 of the |
3 | | Illinois Insurance Code,
whose state or country of domicile |
4 | | imposes on insurers domiciled in Illinois
a retaliatory tax |
5 | | (excluding any insurer
whose premiums from reinsurance assumed |
6 | | are 50% or more of its total insurance
premiums as determined |
7 | | under paragraph (2) of subsection (b) of Section 304,
except |
8 | | that for purposes of this determination premiums from |
9 | | reinsurance do
not include premiums from inter-affiliate |
10 | | reinsurance arrangements),
beginning with taxable years ending |
11 | | on or after December 31, 1999,
the sum of
the rates of tax |
12 | | imposed by subsections (b) and (d) shall be reduced (but not
|
13 | | increased) to the rate at which the total amount of tax imposed |
14 | | under this Act,
net of all credits allowed under this Act, |
15 | | shall equal (i) the total amount of
tax that would be imposed |
16 | | on the foreign insurer's net income allocable to
Illinois for |
17 | | the taxable year by such foreign insurer's state or country of
|
18 | | domicile if that net income were subject to all income taxes |
19 | | and taxes
measured by net income imposed by such foreign |
20 | | insurer's state or country of
domicile, net of all credits |
21 | | allowed or (ii) a rate of zero if no such tax is
imposed on such |
22 | | income by the foreign insurer's state of domicile.
For the |
23 | | purposes of this subsection (d-1), an inter-affiliate includes |
24 | | a
mutual insurer under common management. |
25 | | (1) For the purposes of subsection (d-1), in no event |
26 | | shall the sum of the
rates of tax imposed by subsections |
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1 | | (b) and (d) be reduced below the rate at
which the sum of: |
2 | | (A) the total amount of tax imposed on such foreign |
3 | | insurer under
this Act for a taxable year, net of all |
4 | | credits allowed under this Act, plus |
5 | | (B) the privilege tax imposed by Section 409 of the |
6 | | Illinois Insurance
Code, the fire insurance company |
7 | | tax imposed by Section 12 of the Fire
Investigation |
8 | | Act, and the fire department taxes imposed under |
9 | | Section 11-10-1
of the Illinois Municipal Code, |
10 | | equals 1.25% for taxable years ending prior to December 31, |
11 | | 2003, or
1.75% for taxable years ending on or after |
12 | | December 31, 2003, of the net
taxable premiums written for |
13 | | the taxable year,
as described by subsection (1) of Section |
14 | | 409 of the Illinois Insurance Code.
This paragraph will in |
15 | | no event increase the rates imposed under subsections
(b) |
16 | | and (d). |
17 | | (2) Any reduction in the rates of tax imposed by this |
18 | | subsection shall be
applied first against the rates imposed |
19 | | by subsection (b) and only after the
tax imposed by |
20 | | subsection (a) net of all credits allowed under this |
21 | | Section
other than the credit allowed under subsection (i) |
22 | | has been reduced to zero,
against the rates imposed by |
23 | | subsection (d). |
24 | | This subsection (d-1) is exempt from the provisions of |
25 | | Section 250. |
26 | | (e) Investment credit. A taxpayer shall be allowed a credit
|
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1 | | against the Personal Property Tax Replacement Income Tax for
|
2 | | investment in qualified property. |
3 | | (1) A taxpayer shall be allowed a credit equal to .5% |
4 | | of
the basis of qualified property placed in service during |
5 | | the taxable year,
provided such property is placed in |
6 | | service on or after
July 1, 1984. There shall be allowed an |
7 | | additional credit equal
to .5% of the basis of qualified |
8 | | property placed in service during the
taxable year, |
9 | | provided such property is placed in service on or
after |
10 | | July 1, 1986, and the taxpayer's base employment
within |
11 | | Illinois has increased by 1% or more over the preceding |
12 | | year as
determined by the taxpayer's employment records |
13 | | filed with the
Illinois Department of Employment Security. |
14 | | Taxpayers who are new to
Illinois shall be deemed to have |
15 | | met the 1% growth in base employment for
the first year in |
16 | | which they file employment records with the Illinois
|
17 | | Department of Employment Security. The provisions added to |
18 | | this Section by
Public Act 85-1200 (and restored by Public |
19 | | Act 87-895) shall be
construed as declaratory of existing |
20 | | law and not as a new enactment. If,
in any year, the |
21 | | increase in base employment within Illinois over the
|
22 | | preceding year is less than 1%, the additional credit shall |
23 | | be limited to that
percentage times a fraction, the |
24 | | numerator of which is .5% and the denominator
of which is |
25 | | 1%, but shall not exceed .5%. The investment credit shall |
26 | | not be
allowed to the extent that it would reduce a |
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1 | | taxpayer's liability in any tax
year below zero, nor may |
2 | | any credit for qualified property be allowed for any
year |
3 | | other than the year in which the property was placed in |
4 | | service in
Illinois. For tax years ending on or after |
5 | | December 31, 1987, and on or
before December 31, 1988, the |
6 | | credit shall be allowed for the tax year in
which the |
7 | | property is placed in service, or, if the amount of the |
8 | | credit
exceeds the tax liability for that year, whether it |
9 | | exceeds the original
liability or the liability as later |
10 | | amended, such excess may be carried
forward and applied to |
11 | | the tax liability of the 5 taxable years following
the |
12 | | excess credit years if the taxpayer (i) makes investments |
13 | | which cause
the creation of a minimum of 2,000 full-time |
14 | | equivalent jobs in Illinois,
(ii) is located in an |
15 | | enterprise zone established pursuant to the Illinois
|
16 | | Enterprise Zone Act and (iii) is certified by the |
17 | | Department of Commerce
and Community Affairs (now |
18 | | Department of Commerce and Economic Opportunity) as |
19 | | complying with the requirements specified in
clause (i) and |
20 | | (ii) by July 1, 1986. The Department of Commerce and
|
21 | | Community Affairs (now Department of Commerce and Economic |
22 | | Opportunity) shall notify the Department of Revenue of all |
23 | | such
certifications immediately. For tax years ending |
24 | | after December 31, 1988,
the credit shall be allowed for |
25 | | the tax year in which the property is
placed in service, |
26 | | or, if the amount of the credit exceeds the tax
liability |
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1 | | for that year, whether it exceeds the original liability or |
2 | | the
liability as later amended, such excess may be carried |
3 | | forward and applied
to the tax liability of the 5 taxable |
4 | | years following the excess credit
years. The credit shall |
5 | | be applied to the earliest year for which there is
a |
6 | | liability. If there is credit from more than one tax year |
7 | | that is
available to offset a liability, earlier credit |
8 | | shall be applied first. |
9 | | (2) The term "qualified property" means property |
10 | | which: |
11 | | (A) is tangible, whether new or used, including |
12 | | buildings and structural
components of buildings and |
13 | | signs that are real property, but not including
land or |
14 | | improvements to real property that are not a structural |
15 | | component of a
building such as landscaping, sewer |
16 | | lines, local access roads, fencing, parking
lots, and |
17 | | other appurtenances; |
18 | | (B) is depreciable pursuant to Section 167 of the |
19 | | Internal Revenue Code,
except that "3-year property" |
20 | | as defined in Section 168(c)(2)(A) of that
Code is not |
21 | | eligible for the credit provided by this subsection |
22 | | (e); |
23 | | (C) is acquired by purchase as defined in Section |
24 | | 179(d) of
the Internal Revenue Code; |
25 | | (D) is used in Illinois by a taxpayer who is |
26 | | primarily engaged in
manufacturing, or in mining coal |
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1 | | or fluorite, or in retailing, or was placed in service |
2 | | on or after July 1, 2006 in a River Edge Redevelopment |
3 | | Zone established pursuant to the River Edge |
4 | | Redevelopment Zone Act; and |
5 | | (E) has not previously been used in Illinois in |
6 | | such a manner and by
such a person as would qualify for |
7 | | the credit provided by this subsection
(e) or |
8 | | subsection (f). |
9 | | (3) For purposes of this subsection (e), |
10 | | "manufacturing" means
the material staging and production |
11 | | of tangible personal property by
procedures commonly |
12 | | regarded as manufacturing, processing, fabrication, or
|
13 | | assembling which changes some existing material into new |
14 | | shapes, new
qualities, or new combinations. For purposes of |
15 | | this subsection
(e) the term "mining" shall have the same |
16 | | meaning as the term "mining" in
Section 613(c) of the |
17 | | Internal Revenue Code. For purposes of this subsection
(e), |
18 | | the term "retailing" means the sale of tangible personal |
19 | | property for use or consumption and not for resale, or
|
20 | | services rendered in conjunction with the sale of tangible |
21 | | personal property for use or consumption and not for |
22 | | resale. For purposes of this subsection (e), "tangible |
23 | | personal property" has the same meaning as when that term |
24 | | is used in the Retailers' Occupation Tax Act, and, for |
25 | | taxable years ending after December 31, 2008, does not |
26 | | include the generation, transmission, or distribution of |
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1 | | electricity. |
2 | | (4) The basis of qualified property shall be the basis
|
3 | | used to compute the depreciation deduction for federal |
4 | | income tax purposes. |
5 | | (5) If the basis of the property for federal income tax |
6 | | depreciation
purposes is increased after it has been placed |
7 | | in service in Illinois by
the taxpayer, the amount of such |
8 | | increase shall be deemed property placed
in service on the |
9 | | date of such increase in basis. |
10 | | (6) The term "placed in service" shall have the same
|
11 | | meaning as under Section 46 of the Internal Revenue Code. |
12 | | (7) If during any taxable year, any property ceases to
|
13 | | be qualified property in the hands of the taxpayer within |
14 | | 48 months after
being placed in service, or the situs of |
15 | | any qualified property is
moved outside Illinois within 48 |
16 | | months after being placed in service, the
Personal Property |
17 | | Tax Replacement Income Tax for such taxable year shall be
|
18 | | increased. Such increase shall be determined by (i) |
19 | | recomputing the
investment credit which would have been |
20 | | allowed for the year in which
credit for such property was |
21 | | originally allowed by eliminating such
property from such |
22 | | computation and, (ii) subtracting such recomputed credit
|
23 | | from the amount of credit previously allowed. For the |
24 | | purposes of this
paragraph (7), a reduction of the basis of |
25 | | qualified property resulting
from a redetermination of the |
26 | | purchase price shall be deemed a disposition
of qualified |
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1 | | property to the extent of such reduction. |
2 | | (8) Unless the investment credit is extended by law, |
3 | | the
basis of qualified property shall not include costs |
4 | | incurred after
December 31, 2018 2013 , except for costs |
5 | | incurred pursuant to a binding
contract entered into on or |
6 | | before December 31, 2018 2013 . |
7 | | (9) Each taxable year ending before December 31, 2000, |
8 | | a partnership may
elect to pass through to its
partners the |
9 | | credits to which the partnership is entitled under this |
10 | | subsection
(e) for the taxable year. A partner may use the |
11 | | credit allocated to him or her
under this paragraph only |
12 | | against the tax imposed in subsections (c) and (d) of
this |
13 | | Section. If the partnership makes that election, those |
14 | | credits shall be
allocated among the partners in the |
15 | | partnership in accordance with the rules
set forth in |
16 | | Section 704(b) of the Internal Revenue Code, and the rules
|
17 | | promulgated under that Section, and the allocated amount of |
18 | | the credits shall
be allowed to the partners for that |
19 | | taxable year. The partnership shall make
this election on |
20 | | its Personal Property Tax Replacement Income Tax return for
|
21 | | that taxable year. The election to pass through the credits |
22 | | shall be
irrevocable. |
23 | | For taxable years ending on or after December 31, 2000, |
24 | | a
partner that qualifies its
partnership for a subtraction |
25 | | under subparagraph (I) of paragraph (2) of
subsection (d) |
26 | | of Section 203 or a shareholder that qualifies a Subchapter |
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1 | | S
corporation for a subtraction under subparagraph (S) of |
2 | | paragraph (2) of
subsection (b) of Section 203 shall be |
3 | | allowed a credit under this subsection
(e) equal to its |
4 | | share of the credit earned under this subsection (e) during
|
5 | | the taxable year by the partnership or Subchapter S |
6 | | corporation, determined in
accordance with the |
7 | | determination of income and distributive share of
income |
8 | | under Sections 702 and 704 and Subchapter S of the Internal |
9 | | Revenue
Code. This paragraph is exempt from the provisions |
10 | | of Section 250. |
11 | | (f) Investment credit; Enterprise Zone; River Edge |
12 | | Redevelopment Zone. |
13 | | (1) A taxpayer shall be allowed a credit against the |
14 | | tax imposed
by subsections (a) and (b) of this Section for |
15 | | investment in qualified
property which is placed in service |
16 | | in an Enterprise Zone created
pursuant to the Illinois |
17 | | Enterprise Zone Act or, for property placed in service on |
18 | | or after July 1, 2006, a River Edge Redevelopment Zone |
19 | | established pursuant to the River Edge Redevelopment Zone |
20 | | Act. For partners, shareholders
of Subchapter S |
21 | | corporations, and owners of limited liability companies,
|
22 | | if the liability company is treated as a partnership for |
23 | | purposes of
federal and State income taxation, there shall |
24 | | be allowed a credit under
this subsection (f) to be |
25 | | determined in accordance with the determination
of income |
26 | | and distributive share of income under Sections 702 and 704 |
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1 | | and
Subchapter S of the Internal Revenue Code. The credit |
2 | | shall be .5% of the
basis for such property. The credit |
3 | | shall be available only in the taxable
year in which the |
4 | | property is placed in service in the Enterprise Zone or |
5 | | River Edge Redevelopment Zone and
shall not be allowed to |
6 | | the extent that it would reduce a taxpayer's
liability for |
7 | | the tax imposed by subsections (a) and (b) of this Section |
8 | | to
below zero. For tax years ending on or after December |
9 | | 31, 1985, the credit
shall be allowed for the tax year in |
10 | | which the property is placed in
service, or, if the amount |
11 | | of the credit exceeds the tax liability for that
year, |
12 | | whether it exceeds the original liability or the liability |
13 | | as later
amended, such excess may be carried forward and |
14 | | applied to the tax
liability of the 5 taxable years |
15 | | following the excess credit year.
The credit shall be |
16 | | applied to the earliest year for which there is a
|
17 | | liability. If there is credit from more than one tax year |
18 | | that is available
to offset a liability, the credit |
19 | | accruing first in time shall be applied
first. |
20 | | (2) The term qualified property means property which: |
21 | | (A) is tangible, whether new or used, including |
22 | | buildings and
structural components of buildings; |
23 | | (B) is depreciable pursuant to Section 167 of the |
24 | | Internal Revenue
Code, except that "3-year property" |
25 | | as defined in Section 168(c)(2)(A) of
that Code is not |
26 | | eligible for the credit provided by this subsection |
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1 | | (f); |
2 | | (C) is acquired by purchase as defined in Section |
3 | | 179(d) of
the Internal Revenue Code; |
4 | | (D) is used in the Enterprise Zone or River Edge |
5 | | Redevelopment Zone by the taxpayer; and |
6 | | (E) has not been previously used in Illinois in |
7 | | such a manner and by
such a person as would qualify for |
8 | | the credit provided by this subsection
(f) or |
9 | | subsection (e). |
10 | | (3) The basis of qualified property shall be the basis |
11 | | used to compute
the depreciation deduction for federal |
12 | | income tax purposes. |
13 | | (4) If the basis of the property for federal income tax |
14 | | depreciation
purposes is increased after it has been placed |
15 | | in service in the Enterprise
Zone or River Edge |
16 | | Redevelopment Zone by the taxpayer, the amount of such |
17 | | increase shall be deemed property
placed in service on the |
18 | | date of such increase in basis. |
19 | | (5) The term "placed in service" shall have the same |
20 | | meaning as under
Section 46 of the Internal Revenue Code. |
21 | | (6) If during any taxable year, any property ceases to |
22 | | be qualified
property in the hands of the taxpayer within |
23 | | 48 months after being placed
in service, or the situs of |
24 | | any qualified property is moved outside the
Enterprise Zone |
25 | | or River Edge Redevelopment Zone within 48 months after |
26 | | being placed in service, the tax
imposed under subsections |
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1 | | (a) and (b) of this Section for such taxable year
shall be |
2 | | increased. Such increase shall be determined by (i) |
3 | | recomputing
the investment credit which would have been |
4 | | allowed for the year in which
credit for such property was |
5 | | originally allowed by eliminating such
property from such |
6 | | computation, and (ii) subtracting such recomputed credit
|
7 | | from the amount of credit previously allowed. For the |
8 | | purposes of this
paragraph (6), a reduction of the basis of |
9 | | qualified property resulting
from a redetermination of the |
10 | | purchase price shall be deemed a disposition
of qualified |
11 | | property to the extent of such reduction. |
12 | | (7) There shall be allowed an additional credit equal |
13 | | to 0.5% of the basis of qualified property placed in |
14 | | service during the taxable year in a River Edge |
15 | | Redevelopment Zone, provided such property is placed in |
16 | | service on or after July 1, 2006, and the taxpayer's base |
17 | | employment within Illinois has increased by 1% or more over |
18 | | the preceding year as determined by the taxpayer's |
19 | | employment records filed with the Illinois Department of |
20 | | Employment Security. Taxpayers who are new to Illinois |
21 | | shall be deemed to have met the 1% growth in base |
22 | | employment for the first year in which they file employment |
23 | | records with the Illinois Department of Employment |
24 | | Security. If, in any year, the increase in base employment |
25 | | within Illinois over the preceding year is less than 1%, |
26 | | the additional credit shall be limited to that percentage |
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1 | | times a fraction, the numerator of which is 0.5% and the |
2 | | denominator of which is 1%, but shall not exceed 0.5%.
|
3 | | (g) Jobs Tax Credit; Enterprise Zone, River Edge |
4 | | Redevelopment Zone, and Foreign Trade Zone or Sub-Zone. |
5 | | (1) A taxpayer conducting a trade or business in an |
6 | | enterprise zone
or a High Impact Business designated by the |
7 | | Department of Commerce and
Economic Opportunity or for |
8 | | taxable years ending on or after December 31, 2006, in a |
9 | | River Edge Redevelopment Zone conducting a trade or |
10 | | business in a federally designated
Foreign Trade Zone or |
11 | | Sub-Zone shall be allowed a credit against the tax
imposed |
12 | | by subsections (a) and (b) of this Section in the amount of |
13 | | $500
per eligible employee hired to work in the zone during |
14 | | the taxable year. |
15 | | (2) To qualify for the credit: |
16 | | (A) the taxpayer must hire 5 or more eligible |
17 | | employees to work in an
enterprise zone, River Edge |
18 | | Redevelopment Zone, or federally designated Foreign |
19 | | Trade Zone or Sub-Zone
during the taxable year; |
20 | | (B) the taxpayer's total employment within the |
21 | | enterprise zone, River Edge Redevelopment Zone, or
|
22 | | federally designated Foreign Trade Zone or Sub-Zone |
23 | | must
increase by 5 or more full-time employees beyond |
24 | | the total employed in that
zone at the end of the |
25 | | previous tax year for which a jobs tax
credit under |
26 | | this Section was taken, or beyond the total employed by |
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1 | | the
taxpayer as of December 31, 1985, whichever is |
2 | | later; and |
3 | | (C) the eligible employees must be employed 180 |
4 | | consecutive days in
order to be deemed hired for |
5 | | purposes of this subsection. |
6 | | (3) An "eligible employee" means an employee who is: |
7 | | (A) Certified by the Department of Commerce and |
8 | | Economic Opportunity
as "eligible for services" |
9 | | pursuant to regulations promulgated in
accordance with |
10 | | Title II of the Job Training Partnership Act, Training
|
11 | | Services for the Disadvantaged or Title III of the Job |
12 | | Training Partnership
Act, Employment and Training |
13 | | Assistance for Dislocated Workers Program. |
14 | | (B) Hired after the enterprise zone, River Edge |
15 | | Redevelopment Zone, or federally designated Foreign
|
16 | | Trade Zone or Sub-Zone was designated or the trade or
|
17 | | business was located in that zone, whichever is later. |
18 | | (C) Employed in the enterprise zone, River Edge |
19 | | Redevelopment Zone, or Foreign Trade Zone or
Sub-Zone. |
20 | | An employee is employed in an
enterprise zone or |
21 | | federally designated Foreign Trade Zone or Sub-Zone
if |
22 | | his services are rendered there or it is the base of
|
23 | | operations for the services performed. |
24 | | (D) A full-time employee working 30 or more hours |
25 | | per week. |
26 | | (4) For tax years ending on or after December 31, 1985 |
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1 | | and prior to
December 31, 1988, the credit shall be allowed |
2 | | for the tax year in which
the eligible employees are hired. |
3 | | For tax years ending on or after
December 31, 1988, the |
4 | | credit shall be allowed for the tax year immediately
|
5 | | following the tax year in which the eligible employees are |
6 | | hired. If the
amount of the credit exceeds the tax |
7 | | liability for that year, whether it
exceeds the original |
8 | | liability or the liability as later amended, such
excess |
9 | | may be carried forward and applied to the tax liability of |
10 | | the 5
taxable years following the excess credit year. The |
11 | | credit shall be
applied to the earliest year for which |
12 | | there is a liability. If there is
credit from more than one |
13 | | tax year that is available to offset a liability,
earlier |
14 | | credit shall be applied first. |
15 | | (5) The Department of Revenue shall promulgate such |
16 | | rules and regulations
as may be deemed necessary to carry |
17 | | out the purposes of this subsection (g). |
18 | | (6) The credit shall be available for eligible |
19 | | employees hired on or
after January 1, 1986. |
20 | | (h) Investment credit; High Impact Business. |
21 | | (1) Subject to subsections (b) and (b-5) of Section
5.5 |
22 | | of the Illinois Enterprise Zone Act, a taxpayer shall be |
23 | | allowed a credit
against the tax imposed by subsections (a) |
24 | | and (b) of this Section for
investment in qualified
|
25 | | property which is placed in service by a Department of |
26 | | Commerce and Economic Opportunity
designated High Impact |
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1 | | Business. The credit shall be .5% of the basis
for such |
2 | | property. The credit shall not be available (i) until the |
3 | | minimum
investments in qualified property set forth in |
4 | | subdivision (a)(3)(A) of
Section 5.5 of the Illinois
|
5 | | Enterprise Zone Act have been satisfied
or (ii) until the |
6 | | time authorized in subsection (b-5) of the Illinois
|
7 | | Enterprise Zone Act for entities designated as High Impact |
8 | | Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and |
9 | | (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone |
10 | | Act, and shall not be allowed to the extent that it would
|
11 | | reduce a taxpayer's liability for the tax imposed by |
12 | | subsections (a) and (b) of
this Section to below zero. The |
13 | | credit applicable to such investments shall be
taken in the |
14 | | taxable year in which such investments have been completed. |
15 | | The
credit for additional investments beyond the minimum |
16 | | investment by a designated
high impact business authorized |
17 | | under subdivision (a)(3)(A) of Section 5.5 of
the Illinois |
18 | | Enterprise Zone Act shall be available only in the taxable |
19 | | year in
which the property is placed in service and shall |
20 | | not be allowed to the extent
that it would reduce a |
21 | | taxpayer's liability for the tax imposed by subsections
(a) |
22 | | and (b) of this Section to below zero.
For tax years ending |
23 | | on or after December 31, 1987, the credit shall be
allowed |
24 | | for the tax year in which the property is placed in |
25 | | service, or, if
the amount of the credit exceeds the tax |
26 | | liability for that year, whether
it exceeds the original |
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1 | | liability or the liability as later amended, such
excess |
2 | | may be carried forward and applied to the tax liability of |
3 | | the 5
taxable years following the excess credit year. The |
4 | | credit shall be
applied to the earliest year for which |
5 | | there is a liability. If there is
credit from more than one |
6 | | tax year that is available to offset a liability,
the |
7 | | credit accruing first in time shall be applied first. |
8 | | Changes made in this subdivision (h)(1) by Public Act |
9 | | 88-670
restore changes made by Public Act 85-1182 and |
10 | | reflect existing law. |
11 | | (2) The term qualified property means property which: |
12 | | (A) is tangible, whether new or used, including |
13 | | buildings and
structural components of buildings; |
14 | | (B) is depreciable pursuant to Section 167 of the |
15 | | Internal Revenue
Code, except that "3-year property" |
16 | | as defined in Section 168(c)(2)(A) of
that Code is not |
17 | | eligible for the credit provided by this subsection |
18 | | (h); |
19 | | (C) is acquired by purchase as defined in Section |
20 | | 179(d) of the
Internal Revenue Code; and |
21 | | (D) is not eligible for the Enterprise Zone |
22 | | Investment Credit provided
by subsection (f) of this |
23 | | Section. |
24 | | (3) The basis of qualified property shall be the basis |
25 | | used to compute
the depreciation deduction for federal |
26 | | income tax purposes. |
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1 | | (4) If the basis of the property for federal income tax |
2 | | depreciation
purposes is increased after it has been placed |
3 | | in service in a federally
designated Foreign Trade Zone or |
4 | | Sub-Zone located in Illinois by the taxpayer,
the amount of |
5 | | such increase shall be deemed property placed in service on
|
6 | | the date of such increase in basis. |
7 | | (5) The term "placed in service" shall have the same |
8 | | meaning as under
Section 46 of the Internal Revenue Code. |
9 | | (6) If during any taxable year ending on or before |
10 | | December 31, 1996,
any property ceases to be qualified
|
11 | | property in the hands of the taxpayer within 48 months |
12 | | after being placed
in service, or the situs of any |
13 | | qualified property is moved outside
Illinois within 48 |
14 | | months after being placed in service, the tax imposed
under |
15 | | subsections (a) and (b) of this Section for such taxable |
16 | | year shall
be increased. Such increase shall be determined |
17 | | by (i) recomputing the
investment credit which would have |
18 | | been allowed for the year in which
credit for such property |
19 | | was originally allowed by eliminating such
property from |
20 | | such computation, and (ii) subtracting such recomputed |
21 | | credit
from the amount of credit previously allowed. For |
22 | | the purposes of this
paragraph (6), a reduction of the |
23 | | basis of qualified property resulting
from a |
24 | | redetermination of the purchase price shall be deemed a |
25 | | disposition
of qualified property to the extent of such |
26 | | reduction. |
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1 | | (7) Beginning with tax years ending after December 31, |
2 | | 1996, if a
taxpayer qualifies for the credit under this |
3 | | subsection (h) and thereby is
granted a tax abatement and |
4 | | the taxpayer relocates its entire facility in
violation of |
5 | | the explicit terms and length of the contract under Section
|
6 | | 18-183 of the Property Tax Code, the tax imposed under |
7 | | subsections
(a) and (b) of this Section shall be increased |
8 | | for the taxable year
in which the taxpayer relocated its |
9 | | facility by an amount equal to the
amount of credit |
10 | | received by the taxpayer under this subsection (h). |
11 | | (i) Credit for Personal Property Tax Replacement Income |
12 | | Tax.
For tax years ending prior to December 31, 2003, a credit |
13 | | shall be allowed
against the tax imposed by
subsections (a) and |
14 | | (b) of this Section for the tax imposed by subsections (c)
and |
15 | | (d) of this Section. This credit shall be computed by |
16 | | multiplying the tax
imposed by subsections (c) and (d) of this |
17 | | Section by a fraction, the numerator
of which is base income |
18 | | allocable to Illinois and the denominator of which is
Illinois |
19 | | base income, and further multiplying the product by the tax |
20 | | rate
imposed by subsections (a) and (b) of this Section. |
21 | | Any credit earned on or after December 31, 1986 under
this |
22 | | subsection which is unused in the year
the credit is computed |
23 | | because it exceeds the tax liability imposed by
subsections (a) |
24 | | and (b) for that year (whether it exceeds the original
|
25 | | liability or the liability as later amended) may be carried |
26 | | forward and
applied to the tax liability imposed by subsections |
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1 | | (a) and (b) of the 5
taxable years following the excess credit |
2 | | year, provided that no credit may
be carried forward to any |
3 | | year ending on or
after December 31, 2003. This credit shall be
|
4 | | applied first to the earliest year for which there is a |
5 | | liability. If
there is a credit under this subsection from more |
6 | | than one tax year that is
available to offset a liability the |
7 | | earliest credit arising under this
subsection shall be applied |
8 | | first. |
9 | | If, during any taxable year ending on or after December 31, |
10 | | 1986, the
tax imposed by subsections (c) and (d) of this |
11 | | Section for which a taxpayer
has claimed a credit under this |
12 | | subsection (i) is reduced, the amount of
credit for such tax |
13 | | shall also be reduced. Such reduction shall be
determined by |
14 | | recomputing the credit to take into account the reduced tax
|
15 | | imposed by subsections (c) and (d). If any portion of the
|
16 | | reduced amount of credit has been carried to a different |
17 | | taxable year, an
amended return shall be filed for such taxable |
18 | | year to reduce the amount of
credit claimed. |
19 | | (j) Training expense credit. Beginning with tax years |
20 | | ending on or
after December 31, 1986 and prior to December 31, |
21 | | 2003, a taxpayer shall be
allowed a credit against the
tax |
22 | | imposed by subsections (a) and (b) under this Section
for all |
23 | | amounts paid or accrued, on behalf of all persons
employed by |
24 | | the taxpayer in Illinois or Illinois residents employed
outside |
25 | | of Illinois by a taxpayer, for educational or vocational |
26 | | training in
semi-technical or technical fields or semi-skilled |
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1 | | or skilled fields, which
were deducted from gross income in the |
2 | | computation of taxable income. The
credit against the tax |
3 | | imposed by subsections (a) and (b) shall be 1.6% of
such |
4 | | training expenses. For partners, shareholders of subchapter S
|
5 | | corporations, and owners of limited liability companies, if the |
6 | | liability
company is treated as a partnership for purposes of |
7 | | federal and State income
taxation, there shall be allowed a |
8 | | credit under this subsection (j) to be
determined in accordance |
9 | | with the determination of income and distributive
share of |
10 | | income under Sections 702 and 704 and subchapter S of the |
11 | | Internal
Revenue Code. |
12 | | Any credit allowed under this subsection which is unused in |
13 | | the year
the credit is earned may be carried forward to each of |
14 | | the 5 taxable
years following the year for which the credit is |
15 | | first computed until it is
used. This credit shall be applied |
16 | | first to the earliest year for which
there is a liability. If |
17 | | there is a credit under this subsection from more
than one tax |
18 | | year that is available to offset a liability the earliest
|
19 | | credit arising under this subsection shall be applied first. No |
20 | | carryforward
credit may be claimed in any tax year ending on or |
21 | | after
December 31, 2003. |
22 | | (k) Research and development credit. |
23 | | For tax years ending after July 1, 1990 and prior to
|
24 | | December 31, 2003, and beginning again for tax years ending on |
25 | | or after December 31, 2004, and ending prior to January 1, 2016 |
26 | | January 1, 2011 , a taxpayer shall be
allowed a credit against |
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1 | | the tax imposed by subsections (a) and (b) of this
Section for |
2 | | increasing research activities in this State. The credit
|
3 | | allowed against the tax imposed by subsections (a) and (b) |
4 | | shall be equal
to 6 1/2% of the qualifying expenditures for |
5 | | increasing research activities
in this State. For partners, |
6 | | shareholders of subchapter S corporations, and
owners of |
7 | | limited liability companies, if the liability company is |
8 | | treated as a
partnership for purposes of federal and State |
9 | | income taxation, there shall be
allowed a credit under this |
10 | | subsection to be determined in accordance with the
|
11 | | determination of income and distributive share of income under |
12 | | Sections 702 and
704 and subchapter S of the Internal Revenue |
13 | | Code. |
14 | | For purposes of this subsection, "qualifying expenditures" |
15 | | means the
qualifying expenditures as defined for the federal |
16 | | credit for increasing
research activities which would be |
17 | | allowable under Section 41 of the
Internal Revenue Code and |
18 | | which are conducted in this State, "qualifying
expenditures for |
19 | | increasing research activities in this State" means the
excess |
20 | | of qualifying expenditures for the taxable year in which |
21 | | incurred
over qualifying expenditures for the base period, |
22 | | "qualifying expenditures
for the base period" means the average |
23 | | of the qualifying expenditures for
each year in the base |
24 | | period, and "base period" means the 3 taxable years
immediately |
25 | | preceding the taxable year for which the determination is
being |
26 | | made. |
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1 | | Any credit in excess of the tax liability for the taxable |
2 | | year
may be carried forward. A taxpayer may elect to have the
|
3 | | unused credit shown on its final completed return carried over |
4 | | as a credit
against the tax liability for the following 5 |
5 | | taxable years or until it has
been fully used, whichever occurs |
6 | | first; provided that no credit earned in a tax year ending |
7 | | prior to December 31, 2003 may be carried forward to any year |
8 | | ending on or after December 31, 2003 , and no credit may be |
9 | | carried forward to any taxable year ending on or after January |
10 | | 1, 2011 . |
11 | | If an unused credit is carried forward to a given year from |
12 | | 2 or more
earlier years, that credit arising in the earliest |
13 | | year will be applied
first against the tax liability for the |
14 | | given year. If a tax liability for
the given year still |
15 | | remains, the credit from the next earliest year will
then be |
16 | | applied, and so on, until all credits have been used or no tax
|
17 | | liability for the given year remains. Any remaining unused |
18 | | credit or
credits then will be carried forward to the next |
19 | | following year in which a
tax liability is incurred, except |
20 | | that no credit can be carried forward to
a year which is more |
21 | | than 5 years after the year in which the expense for
which the |
22 | | credit is given was incurred. |
23 | | No inference shall be drawn from this amendatory Act of the |
24 | | 91st General
Assembly in construing this Section for taxable |
25 | | years beginning before January
1, 1999. |
26 | | (l) Environmental Remediation Tax Credit. |
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1 | | (i) For tax years ending after December 31, 1997 and on |
2 | | or before
December 31, 2001, a taxpayer shall be allowed a |
3 | | credit against the tax
imposed by subsections (a) and (b) |
4 | | of this Section for certain amounts paid
for unreimbursed |
5 | | eligible remediation costs, as specified in this |
6 | | subsection.
For purposes of this Section, "unreimbursed |
7 | | eligible remediation costs" means
costs approved by the |
8 | | Illinois Environmental Protection Agency ("Agency") under
|
9 | | Section 58.14 of the Environmental Protection Act that were |
10 | | paid in performing
environmental remediation at a site for |
11 | | which a No Further Remediation Letter
was issued by the |
12 | | Agency and recorded under Section 58.10 of the |
13 | | Environmental
Protection Act. The credit must be claimed |
14 | | for the taxable year in which
Agency approval of the |
15 | | eligible remediation costs is granted. The credit is
not |
16 | | available to any taxpayer if the taxpayer or any related |
17 | | party caused or
contributed to, in any material respect, a |
18 | | release of regulated substances on,
in, or under the site |
19 | | that was identified and addressed by the remedial
action |
20 | | pursuant to the Site Remediation Program of the |
21 | | Environmental Protection
Act. After the Pollution Control |
22 | | Board rules are adopted pursuant to the
Illinois |
23 | | Administrative Procedure Act for the administration and |
24 | | enforcement of
Section 58.9 of the Environmental |
25 | | Protection Act, determinations as to credit
availability |
26 | | for purposes of this Section shall be made consistent with |
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1 | | those
rules. For purposes of this Section, "taxpayer" |
2 | | includes a person whose tax
attributes the taxpayer has |
3 | | succeeded to under Section 381 of the Internal
Revenue Code |
4 | | and "related party" includes the persons disallowed a |
5 | | deduction
for losses by paragraphs (b), (c), and (f)(1) of |
6 | | Section 267 of the Internal
Revenue Code by virtue of being |
7 | | a related taxpayer, as well as any of its
partners. The |
8 | | credit allowed against the tax imposed by subsections (a) |
9 | | and
(b) shall be equal to 25% of the unreimbursed eligible |
10 | | remediation costs in
excess of $100,000 per site, except |
11 | | that the $100,000 threshold shall not apply
to any site |
12 | | contained in an enterprise zone as determined by the |
13 | | Department of
Commerce and Community Affairs (now |
14 | | Department of Commerce and Economic Opportunity). The |
15 | | total credit allowed shall not exceed
$40,000 per year with |
16 | | a maximum total of $150,000 per site. For partners and
|
17 | | shareholders of subchapter S corporations, there shall be |
18 | | allowed a credit
under this subsection to be determined in |
19 | | accordance with the determination of
income and |
20 | | distributive share of income under Sections 702 and 704 and
|
21 | | subchapter S of the Internal Revenue Code. |
22 | | (ii) A credit allowed under this subsection that is |
23 | | unused in the year
the credit is earned may be carried |
24 | | forward to each of the 5 taxable years
following the year |
25 | | for which the credit is first earned until it is used.
The |
26 | | term "unused credit" does not include any amounts of |
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1 | | unreimbursed eligible
remediation costs in excess of the |
2 | | maximum credit per site authorized under
paragraph (i). |
3 | | This credit shall be applied first to the earliest year
for |
4 | | which there is a liability. If there is a credit under this |
5 | | subsection
from more than one tax year that is available to |
6 | | offset a liability, the
earliest credit arising under this |
7 | | subsection shall be applied first. A
credit allowed under |
8 | | this subsection may be sold to a buyer as part of a sale
of |
9 | | all or part of the remediation site for which the credit |
10 | | was granted. The
purchaser of a remediation site and the |
11 | | tax credit shall succeed to the unused
credit and remaining |
12 | | carry-forward period of the seller. To perfect the
|
13 | | transfer, the assignor shall record the transfer in the |
14 | | chain of title for the
site and provide written notice to |
15 | | the Director of the Illinois Department of
Revenue of the |
16 | | assignor's intent to sell the remediation site and the |
17 | | amount of
the tax credit to be transferred as a portion of |
18 | | the sale. In no event may a
credit be transferred to any |
19 | | taxpayer if the taxpayer or a related party would
not be |
20 | | eligible under the provisions of subsection (i). |
21 | | (iii) For purposes of this Section, the term "site" |
22 | | shall have the same
meaning as under Section 58.2 of the |
23 | | Environmental Protection Act. |
24 | | (m) Education expense credit. Beginning with tax years |
25 | | ending after
December 31, 1999, a taxpayer who
is the custodian |
26 | | of one or more qualifying pupils shall be allowed a credit
|
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1 | | against the tax imposed by subsections (a) and (b) of this |
2 | | Section for
qualified education expenses incurred on behalf of |
3 | | the qualifying pupils.
The credit shall be equal to 25% of |
4 | | qualified education expenses, but in no
event may the total |
5 | | credit under this subsection claimed by a
family that is the
|
6 | | custodian of qualifying pupils exceed $500. In no event shall a |
7 | | credit under
this subsection reduce the taxpayer's liability |
8 | | under this Act to less than
zero. This subsection is exempt |
9 | | from the provisions of Section 250 of this
Act. |
10 | | For purposes of this subsection: |
11 | | "Qualifying pupils" means individuals who (i) are |
12 | | residents of the State of
Illinois, (ii) are under the age of |
13 | | 21 at the close of the school year for
which a credit is |
14 | | sought, and (iii) during the school year for which a credit
is |
15 | | sought were full-time pupils enrolled in a kindergarten through |
16 | | twelfth
grade education program at any school, as defined in |
17 | | this subsection. |
18 | | "Qualified education expense" means the amount incurred
on |
19 | | behalf of a qualifying pupil in excess of $250 for tuition, |
20 | | book fees, and
lab fees at the school in which the pupil is |
21 | | enrolled during the regular school
year. |
22 | | "School" means any public or nonpublic elementary or |
23 | | secondary school in
Illinois that is in compliance with Title |
24 | | VI of the Civil Rights Act of 1964
and attendance at which |
25 | | satisfies the requirements of Section 26-1 of the
School Code, |
26 | | except that nothing shall be construed to require a child to
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1 | | attend any particular public or nonpublic school to qualify for |
2 | | the credit
under this Section. |
3 | | "Custodian" means, with respect to qualifying pupils, an |
4 | | Illinois resident
who is a parent, the parents, a legal |
5 | | guardian, or the legal guardians of the
qualifying pupils. |
6 | | (n) River Edge Redevelopment Zone site remediation tax |
7 | | credit.
|
8 | | (i) For tax years ending on or after December 31, 2006, |
9 | | a taxpayer shall be allowed a credit against the tax |
10 | | imposed by subsections (a) and (b) of this Section for |
11 | | certain amounts paid for unreimbursed eligible remediation |
12 | | costs, as specified in this subsection. For purposes of |
13 | | this Section, "unreimbursed eligible remediation costs" |
14 | | means costs approved by the Illinois Environmental |
15 | | Protection Agency ("Agency") under Section 58.14a of the |
16 | | Environmental Protection Act that were paid in performing |
17 | | environmental remediation at a site within a River Edge |
18 | | Redevelopment Zone for which a No Further Remediation |
19 | | Letter was issued by the Agency and recorded under Section |
20 | | 58.10 of the Environmental Protection Act. The credit must |
21 | | be claimed for the taxable year in which Agency approval of |
22 | | the eligible remediation costs is granted. The credit is |
23 | | not available to any taxpayer if the taxpayer or any |
24 | | related party caused or contributed to, in any material |
25 | | respect, a release of regulated substances on, in, or under |
26 | | the site that was identified and addressed by the remedial |
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1 | | action pursuant to the Site Remediation Program of the |
2 | | Environmental Protection Act. Determinations as to credit |
3 | | availability for purposes of this Section shall be made |
4 | | consistent with rules adopted by the Pollution Control |
5 | | Board pursuant to the Illinois Administrative Procedure |
6 | | Act for the administration and enforcement of Section 58.9 |
7 | | of the Environmental Protection Act. For purposes of this |
8 | | Section, "taxpayer" includes a person whose tax attributes |
9 | | the taxpayer has succeeded to under Section 381 of the |
10 | | Internal Revenue Code and "related party" includes the |
11 | | persons disallowed a deduction for losses by paragraphs |
12 | | (b), (c), and (f)(1) of Section 267 of the Internal Revenue |
13 | | Code by virtue of being a related taxpayer, as well as any |
14 | | of its partners. The credit allowed against the tax imposed |
15 | | by subsections (a) and (b) shall be equal to 25% of the |
16 | | unreimbursed eligible remediation costs in excess of |
17 | | $100,000 per site. |
18 | | (ii) A credit allowed under this subsection that is |
19 | | unused in the year the credit is earned may be carried |
20 | | forward to each of the 5 taxable years following the year |
21 | | for which the credit is first earned until it is used. This |
22 | | credit shall be applied first to the earliest year for |
23 | | which there is a liability. If there is a credit under this |
24 | | subsection from more than one tax year that is available to |
25 | | offset a liability, the earliest credit arising under this |
26 | | subsection shall be applied first. A credit allowed under |
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1 | | this subsection may be sold to a buyer as part of a sale of |
2 | | all or part of the remediation site for which the credit |
3 | | was granted. The purchaser of a remediation site and the |
4 | | tax credit shall succeed to the unused credit and remaining |
5 | | carry-forward period of the seller. To perfect the |
6 | | transfer, the assignor shall record the transfer in the |
7 | | chain of title for the site and provide written notice to |
8 | | the Director of the Illinois Department of Revenue of the |
9 | | assignor's intent to sell the remediation site and the |
10 | | amount of the tax credit to be transferred as a portion of |
11 | | the sale. In no event may a credit be transferred to any |
12 | | taxpayer if the taxpayer or a related party would not be |
13 | | eligible under the provisions of subsection (i). |
14 | | (iii) For purposes of this Section, the term "site" |
15 | | shall have the same meaning as under Section 58.2 of the |
16 | | Environmental Protection Act. |
17 | | (Source: P.A. 96-115, eff. 7-31-09; 96-116, eff. 7-31-09; |
18 | | 96-937, eff. 6-23-10; 96-1000, eff. 7-2-10; 96-1496, eff. |
19 | | 1-13-11; 97-2, eff. 5-6-11.)
|
20 | | (35 ILCS 5/207) (from Ch. 120, par. 2-207)
|
21 | | Sec. 207. Net Losses.
|
22 | | (a) If after applying all of the (i) modifications
provided |
23 | | for in paragraph (2) of Section 203(b), paragraph (2) of |
24 | | Section
203(c) and paragraph (2) of Section 203(d) and (ii) the |
25 | | allocation and
apportionment provisions of Article 3 of this
|
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1 | | Act and subsection (c) of this Section, the taxpayer's net |
2 | | income results in a loss;
|
3 | | (1) for any taxable year ending prior to December 31, |
4 | | 1999, such loss
shall be allowed
as a carryover or |
5 | | carryback deduction in the manner allowed under Section
172 |
6 | | of the Internal Revenue Code;
|
7 | | (2) for any taxable year ending on or after December |
8 | | 31, 1999 and prior
to December 31, 2003, such loss
shall be |
9 | | allowed as a carryback to each of the 2 taxable years |
10 | | preceding the
taxable year of such loss and shall be a net |
11 | | operating loss carryover to each of the
20 taxable years |
12 | | following the taxable year of such loss; and
|
13 | | (3) for any taxable year ending on or after December |
14 | | 31, 2003, such loss
shall be allowed as a net operating |
15 | | loss carryover to each of the 12 taxable years
following |
16 | | the taxable year of such loss, except as provided in |
17 | | subsection (d).
|
18 | | (a-5) Election to relinquish carryback and order of |
19 | | application of
losses.
|
20 | | (A) For losses incurred in tax years ending prior |
21 | | to December 31,
2003, the taxpayer may elect to |
22 | | relinquish the entire carryback period
with respect to |
23 | | such loss. Such election shall be made in the form and |
24 | | manner
prescribed by the Department and shall be made |
25 | | by the due date (including
extensions of time) for |
26 | | filing the taxpayer's return for the taxable year in
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1 | | which such loss is incurred, and such election, once |
2 | | made, shall be
irrevocable.
|
3 | | (B) The entire amount of such loss shall be carried |
4 | | to the earliest
taxable year to which such loss may be |
5 | | carried. The amount of such loss which
shall be carried |
6 | | to each of the other taxable years shall be the excess, |
7 | | if
any, of the amount of such loss over the sum of the |
8 | | deductions for carryback or
carryover of such loss |
9 | | allowable for each of the prior taxable years to which
|
10 | | such loss may be carried.
|
11 | | (b) Any loss determined under subsection (a) of this |
12 | | Section must be carried
back or carried forward in the same |
13 | | manner for purposes of subsections (a)
and (b) of Section 201 |
14 | | of this Act as for purposes of subsections (c) and
(d) of |
15 | | Section 201 of this Act.
|
16 | | (c) Notwithstanding any other provision of this Act, for |
17 | | each taxable year ending on or after December 31, 2008, for |
18 | | purposes of computing the loss for the taxable year under |
19 | | subsection (a) of this Section and the deduction taken into |
20 | | account for the taxable year for a net operating loss carryover |
21 | | under paragraphs (1), (2), and (3) of subsection (a) of this |
22 | | Section, the loss and net operating loss carryover shall be |
23 | | reduced in an amount equal to the reduction to the net |
24 | | operating loss and net operating loss carryover to the taxable |
25 | | year, respectively, required under Section 108(b)(2)(A) of the |
26 | | Internal Revenue Code, multiplied by a fraction, the numerator |
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1 | | of which is the amount of discharge of indebtedness income that |
2 | | is excluded from gross income for the taxable year (but only if |
3 | | the taxable year ends on or after December 31, 2008) under |
4 | | Section 108(a) of the Internal Revenue Code and that would have |
5 | | been allocated and apportioned to this State under Article 3 of |
6 | | this Act but for that exclusion, and the denominator of which |
7 | | is the total amount of discharge of indebtedness income |
8 | | excluded from gross income under Section 108(a) of the Internal |
9 | | Revenue Code for the taxable year. The reduction required under |
10 | | this subsection (c) shall be made after the determination of |
11 | | Illinois net income for the taxable year in which the |
12 | | indebtedness is discharged.
|
13 | | (d) In the case of a corporation (other than a Subchapter S |
14 | | corporation), no carryover deduction shall be allowed under |
15 | | this Section for any taxable year ending after December 31, |
16 | | 2010 and prior to December 31, 2012, and no carryover deduction |
17 | | shall exceed $100,000 for any taxable year ending on or after |
18 | | December 31, 2012 and prior to December 31, 2014; provided |
19 | | that, for purposes of determining the taxable years to which a |
20 | | net loss may be carried under subsection (a) of this Section, |
21 | | no taxable year for which a deduction is disallowed under this |
22 | | subsection , or for which the deduction would exceed $100,000 if |
23 | | not for this subsection, shall be counted. |
24 | | (e) In the case of a residual interest holder in a real |
25 | | estate mortgage investment conduit subject to Section 860E of |
26 | | the Internal Revenue Code, the net loss in subsection (a) shall |
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1 | | be equal to: |
2 | | (1) the amount computed under subsection (a), without |
3 | | regard to this subsection (e), or if that amount is |
4 | | positive, zero; |
5 | | (2) minus an amount equal to the amount computed under |
6 | | subsection (a), without regard to this subsection (e), |
7 | | minus the amount that would be computed under subsection |
8 | | (a) if the taxpayer's federal taxable income were computed |
9 | | without regard to Section 860E of the Internal Revenue Code |
10 | | and without regard to this subsection (e). |
11 | | The modification in this subsection (e) is exempt from the |
12 | | provisions of Section 250. |
13 | | (Source: P.A. 96-1496, eff. 1-13-11; 97-507, eff. 8-23-11.)
|
14 | | (35 ILCS 5/250)
|
15 | | Sec. 250. Sunset of exemptions, credits, and deductions. |
16 | | (a) The application
of every exemption, credit, and |
17 | | deduction against tax imposed by this Act that
becomes law |
18 | | after the effective date of this amendatory Act of 1994 shall |
19 | | be
limited by a reasonable and appropriate sunset date. A |
20 | | taxpayer is not
entitled to take the exemption, credit, or |
21 | | deduction for tax years beginning on
or after the sunset
date. |
22 | | Except as provided in subsection (b) of this Section, if If a |
23 | | reasonable and appropriate sunset date is not
specified in the |
24 | | Public Act that creates the exemption, credit, or deduction, a
|
25 | | taxpayer shall not be entitled to take the exemption, credit, |
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1 | | or deduction for
tax years beginning on or after 5 years after |
2 | | the effective date of the Public
Act creating the
exemption, |
3 | | credit, or deduction and thereafter; provided, however, that in
|
4 | | the case of any Public Act authorizing the issuance of |
5 | | tax-exempt obligations
that does not specify a sunset date for |
6 | | the exemption or deduction of income
derived from the |
7 | | obligations, the exemption or deduction shall not terminate
|
8 | | until after the obligations have been paid by the issuer.
|
9 | | (b) Notwithstanding the provisions of subsection (a) of |
10 | | this Section, the sunset date of any exemption, credit, or |
11 | | deduction that is scheduled to expire in 2011, 2012, or 2013 by |
12 | | operation of this Section shall be extended by 5 years. |
13 | | (Source: P.A. 88-660, eff. 9-16-94; 89-460, eff. 5-24-96.)
|
14 | | (35 ILCS 5/304) (from Ch. 120, par. 3-304)
|
15 | | Sec. 304. Business income of persons other than residents.
|
16 | | (a) In general. The business income of a person other than |
17 | | a
resident shall be allocated to this State if such person's |
18 | | business
income is derived solely from this State. If a person |
19 | | other than a
resident derives business income from this State |
20 | | and one or more other
states, then, for tax years ending on or |
21 | | before December 30, 1998, and
except as otherwise provided by |
22 | | this Section, such
person's business income shall be |
23 | | apportioned to this State by
multiplying the income by a |
24 | | fraction, the numerator of which is the sum
of the property |
25 | | factor (if any), the payroll factor (if any) and 200% of the
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1 | | sales factor (if any), and the denominator of which is 4 |
2 | | reduced by the
number of factors other than the sales factor |
3 | | which have a denominator
of zero and by an additional 2 if the |
4 | | sales factor has a denominator of zero.
For tax years ending on |
5 | | or after December 31, 1998, and except as otherwise
provided by |
6 | | this Section, persons other than
residents who derive business |
7 | | income from this State and one or more other
states shall |
8 | | compute their apportionment factor by weighting their |
9 | | property,
payroll, and sales factors as provided in
subsection |
10 | | (h) of this Section.
|
11 | | (1) Property factor.
|
12 | | (A) The property factor is a fraction, the numerator of |
13 | | which is the
average value of the person's real and |
14 | | tangible personal property owned
or rented and used in the |
15 | | trade or business in this State during the
taxable year and |
16 | | the denominator of which is the average value of all
the |
17 | | person's real and tangible personal property owned or |
18 | | rented and
used in the trade or business during the taxable |
19 | | year.
|
20 | | (B) Property owned by the person is valued at its |
21 | | original cost.
Property rented by the person is valued at 8 |
22 | | times the net annual rental
rate. Net annual rental rate is |
23 | | the annual rental rate paid by the
person less any annual |
24 | | rental rate received by the person from
sub-rentals.
|
25 | | (C) The average value of property shall be determined |
26 | | by averaging
the values at the beginning and ending of the |
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1 | | taxable year but the
Director may require the averaging of |
2 | | monthly values during the taxable
year if reasonably |
3 | | required to reflect properly the average value of the
|
4 | | person's property.
|
5 | | (2) Payroll factor.
|
6 | | (A) The payroll factor is a fraction, the numerator of |
7 | | which is the
total amount paid in this State during the |
8 | | taxable year by the person
for compensation, and the |
9 | | denominator of which is the total compensation
paid |
10 | | everywhere during the taxable year.
|
11 | | (B) Compensation is paid in this State if:
|
12 | | (i) The individual's service is performed entirely |
13 | | within this
State;
|
14 | | (ii) The individual's service is performed both |
15 | | within and without
this State, but the service |
16 | | performed without this State is incidental
to the |
17 | | individual's service performed within this State; or
|
18 | | (iii) Some of the service is performed within this |
19 | | State and either
the base of operations, or if there is |
20 | | no base of operations, the place
from which the service |
21 | | is directed or controlled is within this State,
or the |
22 | | base of operations or the place from which the service |
23 | | is
directed or controlled is not in any state in which |
24 | | some part of the
service is performed, but the |
25 | | individual's residence is in this State.
|
26 | | (iv) Compensation paid to nonresident professional |
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1 | | athletes. |
2 | | (a) General. The Illinois source income of a |
3 | | nonresident individual who is a member of a |
4 | | professional athletic team includes the portion of the |
5 | | individual's total compensation for services performed |
6 | | as a member of a professional athletic team during the |
7 | | taxable year which the number of duty days spent within |
8 | | this State performing services for the team in any |
9 | | manner during the taxable year bears to the total |
10 | | number of duty days spent both within and without this |
11 | | State during the taxable year. |
12 | | (b) Travel days. Travel days that do not involve |
13 | | either a game, practice, team meeting, or other similar |
14 | | team event are not considered duty days spent in this |
15 | | State. However, such travel days are considered in the |
16 | | total duty days spent both within and without this |
17 | | State. |
18 | | (c) Definitions. For purposes of this subpart |
19 | | (iv): |
20 | | (1) The term "professional athletic team" |
21 | | includes, but is not limited to, any professional |
22 | | baseball, basketball, football, soccer, or hockey |
23 | | team. |
24 | | (2) The term "member of a professional |
25 | | athletic team" includes those employees who are |
26 | | active players, players on the disabled list, and |
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1 | | any other persons required to travel and who travel |
2 | | with and perform services on behalf of a |
3 | | professional athletic team on a regular basis. |
4 | | This includes, but is not limited to, coaches, |
5 | | managers, and trainers. |
6 | | (3) Except as provided in items (C) and (D) of |
7 | | this subpart (3), the term "duty days" means all |
8 | | days during the taxable year from the beginning of |
9 | | the professional athletic team's official |
10 | | pre-season training period through the last game |
11 | | in which the team competes or is scheduled to |
12 | | compete. Duty days shall be counted for the year in |
13 | | which they occur, including where a team's |
14 | | official pre-season training period through the |
15 | | last game in which the team competes or is |
16 | | scheduled to compete, occurs during more than one |
17 | | tax year. |
18 | | (A) Duty days shall also include days on |
19 | | which a member of a professional athletic team |
20 | | performs service for a team on a date that does |
21 | | not fall within the foregoing period (e.g., |
22 | | participation in instructional leagues, the |
23 | | "All Star Game", or promotional "caravans"). |
24 | | Performing a service for a professional |
25 | | athletic team includes conducting training and |
26 | | rehabilitation activities, when such |
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1 | | activities are conducted at team facilities. |
2 | | (B) Also included in duty days are game |
3 | | days, practice days, days spent at team |
4 | | meetings, promotional caravans, preseason |
5 | | training camps, and days served with the team |
6 | | through all post-season games in which the team |
7 | | competes or is scheduled to compete. |
8 | | (C) Duty days for any person who joins a |
9 | | team during the period from the beginning of |
10 | | the professional athletic team's official |
11 | | pre-season training period through the last |
12 | | game in which the team competes, or is |
13 | | scheduled to compete, shall begin on the day |
14 | | that person joins the team. Conversely, duty |
15 | | days for any person who leaves a team during |
16 | | this period shall end on the day that person |
17 | | leaves the team. Where a person switches teams |
18 | | during a taxable year, a separate duty-day |
19 | | calculation shall be made for the period the |
20 | | person was with each team. |
21 | | (D) Days for which a member of a |
22 | | professional athletic team is not compensated |
23 | | and is not performing services for the team in |
24 | | any manner, including days when such member of |
25 | | a professional athletic team has been |
26 | | suspended without pay and prohibited from |
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1 | | performing any services for the team, shall not |
2 | | be treated as duty days. |
3 | | (E) Days for which a member of a |
4 | | professional athletic team is on the disabled |
5 | | list and does not conduct rehabilitation |
6 | | activities at facilities of the team, and is |
7 | | not otherwise performing services for the team |
8 | | in Illinois, shall not be considered duty days |
9 | | spent in this State. All days on the disabled |
10 | | list, however, are considered to be included in |
11 | | total duty days spent both within and without |
12 | | this State. |
13 | | (4) The term "total compensation for services |
14 | | performed as a member of a professional athletic |
15 | | team" means the total compensation received during |
16 | | the taxable year for services performed: |
17 | | (A) from the beginning of the official |
18 | | pre-season training period through the last |
19 | | game in which the team competes or is scheduled |
20 | | to compete during that taxable year; and |
21 | | (B) during the taxable year on a date which |
22 | | does not fall within the foregoing period |
23 | | (e.g., participation in instructional leagues, |
24 | | the "All Star Game", or promotional caravans). |
25 | | This compensation shall include, but is not |
26 | | limited to, salaries, wages, bonuses as described |
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1 | | in this subpart, and any other type of compensation |
2 | | paid during the taxable year to a member of a |
3 | | professional athletic team for services performed |
4 | | in that year. This compensation does not include |
5 | | strike benefits, severance pay, termination pay, |
6 | | contract or option year buy-out payments, |
7 | | expansion or relocation payments, or any other |
8 | | payments not related to services performed for the |
9 | | team. |
10 | | For purposes of this subparagraph, "bonuses" |
11 | | included in "total compensation for services |
12 | | performed as a member of a professional athletic |
13 | | team" subject to the allocation described in |
14 | | Section 302(c)(1) are: bonuses earned as a result |
15 | | of play (i.e., performance bonuses) during the |
16 | | season, including bonuses paid for championship, |
17 | | playoff or "bowl" games played by a team, or for |
18 | | selection to all-star league or other honorary |
19 | | positions; and bonuses paid for signing a |
20 | | contract, unless the payment of the signing bonus |
21 | | is not conditional upon the signee playing any |
22 | | games for the team or performing any subsequent |
23 | | services for the team or even making the team, the |
24 | | signing bonus is payable separately from the |
25 | | salary and any other compensation, and the signing |
26 | | bonus is nonrefundable.
|
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1 | | (3) Sales factor.
|
2 | | (A) The sales factor is a fraction, the numerator of |
3 | | which is the
total sales of the person in this State during |
4 | | the taxable year, and the
denominator of which is the total |
5 | | sales of the person everywhere during
the taxable year.
|
6 | | (B) Sales of tangible personal property are in this |
7 | | State if:
|
8 | | (i) The property is delivered or shipped to a |
9 | | purchaser, other than
the United States government, |
10 | | within this State regardless of the f. o.
b. point or |
11 | | other conditions of the sale; or
|
12 | | (ii) The property is shipped from an office, store, |
13 | | warehouse,
factory or other place of storage in this |
14 | | State and either the purchaser
is the United States |
15 | | government or the person is not taxable in the
state of |
16 | | the purchaser; provided, however, that premises owned |
17 | | or leased
by a person who has independently contracted |
18 | | with the seller for the printing
of newspapers, |
19 | | periodicals or books shall not be deemed to be an |
20 | | office,
store, warehouse, factory or other place of |
21 | | storage for purposes of this
Section.
Sales of tangible |
22 | | personal property are not in this State if the
seller |
23 | | and purchaser would be members of the same unitary |
24 | | business group
but for the fact that either the seller |
25 | | or purchaser is a person with 80%
or more of total |
26 | | business activity outside of the United States and the
|
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1 | | property is purchased for resale.
|
2 | | (B-1) Patents, copyrights, trademarks, and similar |
3 | | items of intangible
personal property.
|
4 | | (i) Gross receipts from the licensing, sale, or |
5 | | other disposition of a
patent, copyright, trademark, |
6 | | or similar item of intangible personal property, other |
7 | | than gross receipts governed by paragraph (B-7) of this |
8 | | item (3),
are in this State to the extent the item is |
9 | | utilized in this State during the
year the gross |
10 | | receipts are included in gross income.
|
11 | | (ii) Place of utilization.
|
12 | | (I) A patent is utilized in a state to the |
13 | | extent that it is employed
in production, |
14 | | fabrication, manufacturing, or other processing in |
15 | | the state or
to the extent that a patented product |
16 | | is produced in the state. If a patent is
utilized |
17 | | in
more than one state, the extent to which it is |
18 | | utilized in any one state shall
be a fraction equal |
19 | | to the gross receipts of the licensee or purchaser |
20 | | from
sales or leases of items produced, |
21 | | fabricated, manufactured, or processed
within that |
22 | | state using the patent and of patented items |
23 | | produced within that
state, divided by the total of |
24 | | such gross receipts for all states in which the
|
25 | | patent is utilized.
|
26 | | (II) A copyright is utilized in a state to the |
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1 | | extent that printing or
other publication |
2 | | originates in the state. If a copyright is utilized |
3 | | in more
than one state, the extent to which it is |
4 | | utilized in any one state shall be a
fraction equal |
5 | | to the gross receipts from sales or licenses of |
6 | | materials
printed or published in that state |
7 | | divided by the total of such gross receipts
for all |
8 | | states in which the copyright is utilized.
|
9 | | (III) Trademarks and other items of intangible |
10 | | personal property
governed by this paragraph (B-1) |
11 | | are utilized in the state in which the
commercial |
12 | | domicile of the licensee or purchaser is located.
|
13 | | (iii) If the state of utilization of an item of |
14 | | property governed by
this paragraph (B-1) cannot be |
15 | | determined from the taxpayer's books and
records or |
16 | | from the books and records of any person related to the |
17 | | taxpayer
within the meaning of Section 267(b) of the |
18 | | Internal Revenue Code, 26 U.S.C.
267, the gross
|
19 | | receipts attributable to that item shall be excluded |
20 | | from both the numerator
and the denominator of the |
21 | | sales factor.
|
22 | | (B-2) Gross receipts from the license, sale, or other |
23 | | disposition of
patents, copyrights, trademarks, and |
24 | | similar items of intangible personal
property, other than |
25 | | gross receipts governed by paragraph (B-7) of this item |
26 | | (3), may be included in the numerator or denominator of the |
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1 | | sales factor
only if gross receipts from licenses, sales, |
2 | | or other disposition of such items
comprise more than 50% |
3 | | of the taxpayer's total gross receipts included in gross
|
4 | | income during the tax year and during each of the 2 |
5 | | immediately preceding tax
years; provided that, when a |
6 | | taxpayer is a member of a unitary business group,
such |
7 | | determination shall be made on the basis of the gross |
8 | | receipts of the
entire unitary business group.
|
9 | | (B-5) For taxable years ending on or after December 31, |
10 | | 2008, except as provided in subsections (ii) through (vii), |
11 | | receipts from the sale of telecommunications service or |
12 | | mobile telecommunications service are in this State if the |
13 | | customer's service address is in this State. |
14 | | (i) For purposes of this subparagraph (B-5), the |
15 | | following terms have the following meanings: |
16 | | "Ancillary services" means services that are |
17 | | associated with or incidental to the provision of |
18 | | "telecommunications services", including but not |
19 | | limited to "detailed telecommunications billing", |
20 | | "directory assistance", "vertical service", and "voice |
21 | | mail services". |
22 | | "Air-to-Ground Radiotelephone service" means a |
23 | | radio service, as that term is defined in 47 CFR 22.99, |
24 | | in which common carriers are authorized to offer and |
25 | | provide radio telecommunications service for hire to |
26 | | subscribers in aircraft. |
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1 | | "Call-by-call Basis" means any method of charging |
2 | | for telecommunications services where the price is |
3 | | measured by individual calls. |
4 | | "Communications Channel" means a physical or |
5 | | virtual path of communications over which signals are |
6 | | transmitted between or among customer channel |
7 | | termination points. |
8 | | "Conference bridging service" means an "ancillary |
9 | | service" that links two or more participants of an |
10 | | audio or video conference call and may include the |
11 | | provision of a telephone number. "Conference bridging |
12 | | service" does not include the "telecommunications |
13 | | services" used to reach the conference bridge. |
14 | | "Customer Channel Termination Point" means the |
15 | | location where the customer either inputs or receives |
16 | | the communications. |
17 | | "Detailed telecommunications billing service" |
18 | | means an "ancillary service" of separately stating |
19 | | information pertaining to individual calls on a |
20 | | customer's billing statement. |
21 | | "Directory assistance" means an "ancillary |
22 | | service" of providing telephone number information, |
23 | | and/or address information. |
24 | | "Home service provider" means the facilities based |
25 | | carrier or reseller with which the customer contracts |
26 | | for the provision of mobile telecommunications |
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1 | | services. |
2 | | "Mobile telecommunications service" means |
3 | | commercial mobile radio service, as defined in Section |
4 | | 20.3 of Title 47 of the Code of Federal Regulations as |
5 | | in effect on June 1, 1999. |
6 | | "Place of primary use" means the street address |
7 | | representative of where the customer's use of the |
8 | | telecommunications service primarily occurs, which |
9 | | must be the residential street address or the primary |
10 | | business street address of the customer. In the case of |
11 | | mobile telecommunications services, "place of primary |
12 | | use" must be within the licensed service area of the |
13 | | home service provider. |
14 | | "Post-paid telecommunication service" means the |
15 | | telecommunications service obtained by making a |
16 | | payment on a call-by-call basis either through the use |
17 | | of a credit card or payment mechanism such as a bank |
18 | | card, travel card, credit card, or debit card, or by |
19 | | charge made to a telephone number which is not |
20 | | associated with the origination or termination of the |
21 | | telecommunications service. A post-paid calling |
22 | | service includes telecommunications service, except a |
23 | | prepaid wireless calling service, that would be a |
24 | | prepaid calling service except it is not exclusively a |
25 | | telecommunication service. |
26 | | "Prepaid telecommunication service" means the |
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1 | | right to access exclusively telecommunications |
2 | | services, which must be paid for in advance and which |
3 | | enables the origination of calls using an access number |
4 | | or authorization code, whether manually or |
5 | | electronically dialed, and that is sold in |
6 | | predetermined units or dollars of which the number |
7 | | declines with use in a known amount. |
8 | | "Prepaid Mobile telecommunication service" means a |
9 | | telecommunications service that provides the right to |
10 | | utilize mobile wireless service as well as other |
11 | | non-telecommunication services, including but not |
12 | | limited to ancillary services, which must be paid for |
13 | | in advance that is sold in predetermined units or |
14 | | dollars of which the number declines with use in a |
15 | | known amount. |
16 | | "Private communication service" means a |
17 | | telecommunication service that entitles the customer |
18 | | to exclusive or priority use of a communications |
19 | | channel or group of channels between or among |
20 | | termination points, regardless of the manner in which |
21 | | such channel or channels are connected, and includes |
22 | | switching capacity, extension lines, stations, and any |
23 | | other associated services that are provided in |
24 | | connection with the use of such channel or channels. |
25 | | "Service address" means: |
26 | | (a) The location of the telecommunications |
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1 | | equipment to which a customer's call is charged and |
2 | | from which the call originates or terminates, |
3 | | regardless of where the call is billed or paid; |
4 | | (b) If the location in line (a) is not known, |
5 | | service address means the origination point of the |
6 | | signal of the telecommunications services first |
7 | | identified by either the seller's |
8 | | telecommunications system or in information |
9 | | received by the seller from its service provider |
10 | | where the system used to transport such signals is |
11 | | not that of the seller; and |
12 | | (c) If the locations in line (a) and line (b) |
13 | | are not known, the service address means the |
14 | | location of the customer's place of primary use. |
15 | | "Telecommunications service" means the electronic |
16 | | transmission, conveyance, or routing of voice, data, |
17 | | audio, video, or any other information or signals to a |
18 | | point, or between or among points. The term |
19 | | "telecommunications service" includes such |
20 | | transmission, conveyance, or routing in which computer |
21 | | processing applications are used to act on the form, |
22 | | code or protocol of the content for purposes of |
23 | | transmission, conveyance or routing without regard to |
24 | | whether such service is referred to as voice over |
25 | | Internet protocol services or is classified by the |
26 | | Federal Communications Commission as enhanced or value |
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1 | | added. "Telecommunications service" does not include: |
2 | | (a) Data processing and information services |
3 | | that allow data to be generated, acquired, stored, |
4 | | processed, or retrieved and delivered by an |
5 | | electronic transmission to a purchaser when such |
6 | | purchaser's primary purpose for the underlying |
7 | | transaction is the processed data or information; |
8 | | (b) Installation or maintenance of wiring or |
9 | | equipment on a customer's premises; |
10 | | (c) Tangible personal property; |
11 | | (d) Advertising, including but not limited to |
12 | | directory advertising. |
13 | | (e) Billing and collection services provided |
14 | | to third parties; |
15 | | (f) Internet access service; |
16 | | (g) Radio and television audio and video |
17 | | programming services, regardless of the medium, |
18 | | including the furnishing of transmission, |
19 | | conveyance and routing of such services by the |
20 | | programming service provider. Radio and television |
21 | | audio and video programming services shall include |
22 | | but not be limited to cable service as defined in |
23 | | 47 USC 522(6) and audio and video programming |
24 | | services delivered by commercial mobile radio |
25 | | service providers, as defined in 47 CFR 20.3; |
26 | | (h) "Ancillary services"; or |
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1 | | (i) Digital products "delivered |
2 | | electronically", including but not limited to |
3 | | software, music, video, reading materials or ring |
4 | | tones. |
5 | | "Vertical service" means an "ancillary service" |
6 | | that is offered in connection with one or more |
7 | | "telecommunications services", which offers advanced |
8 | | calling features that allow customers to identify |
9 | | callers and to manage multiple calls and call |
10 | | connections, including "conference bridging services". |
11 | | "Voice mail service" means an "ancillary service" |
12 | | that enables the customer to store, send or receive |
13 | | recorded messages. "Voice mail service" does not |
14 | | include any "vertical services" that the customer may |
15 | | be required to have in order to utilize the "voice mail |
16 | | service". |
17 | | (ii) Receipts from the sale of telecommunications |
18 | | service sold on an individual call-by-call basis are in |
19 | | this State if either of the following applies: |
20 | | (a) The call both originates and terminates in |
21 | | this State. |
22 | | (b) The call either originates or terminates |
23 | | in this State and the service address is located in |
24 | | this State. |
25 | | (iii) Receipts from the sale of postpaid |
26 | | telecommunications service at retail are in this State |
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1 | | if the origination point of the telecommunication |
2 | | signal, as first identified by the service provider's |
3 | | telecommunication system or as identified by |
4 | | information received by the seller from its service |
5 | | provider if the system used to transport |
6 | | telecommunication signals is not the seller's, is |
7 | | located in this State. |
8 | | (iv) Receipts from the sale of prepaid |
9 | | telecommunications service or prepaid mobile |
10 | | telecommunications service at retail are in this State |
11 | | if the purchaser obtains the prepaid card or similar |
12 | | means of conveyance at a location in this State. |
13 | | Receipts from recharging a prepaid telecommunications |
14 | | service or mobile telecommunications service is in |
15 | | this State if the purchaser's billing information |
16 | | indicates a location in this State. |
17 | | (v) Receipts from the sale of private |
18 | | communication services are in this State as follows: |
19 | | (a) 100% of receipts from charges imposed at |
20 | | each channel termination point in this State. |
21 | | (b) 100% of receipts from charges for the total |
22 | | channel mileage between each channel termination |
23 | | point in this State. |
24 | | (c) 50% of the total receipts from charges for |
25 | | service segments when those segments are between 2 |
26 | | customer channel termination points, 1 of which is |
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1 | | located in this State and the other is located |
2 | | outside of this State, which segments are |
3 | | separately charged. |
4 | | (d) The receipts from charges for service |
5 | | segments with a channel termination point located |
6 | | in this State and in two or more other states, and |
7 | | which segments are not separately billed, are in |
8 | | this State based on a percentage determined by |
9 | | dividing the number of customer channel |
10 | | termination points in this State by the total |
11 | | number of customer channel termination points. |
12 | | (vi) Receipts from charges for ancillary services |
13 | | for telecommunications service sold to customers at |
14 | | retail are in this State if the customer's primary |
15 | | place of use of telecommunications services associated |
16 | | with those ancillary services is in this State. If the |
17 | | seller of those ancillary services cannot determine |
18 | | where the associated telecommunications are located, |
19 | | then the ancillary services shall be based on the |
20 | | location of the purchaser. |
21 | | (vii) Receipts to access a carrier's network or |
22 | | from the sale of telecommunication services or |
23 | | ancillary services for resale are in this State as |
24 | | follows: |
25 | | (a) 100% of the receipts from access fees |
26 | | attributable to intrastate telecommunications |
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1 | | service that both originates and terminates in |
2 | | this State. |
3 | | (b) 50% of the receipts from access fees |
4 | | attributable to interstate telecommunications |
5 | | service if the interstate call either originates |
6 | | or terminates in this State. |
7 | | (c) 100% of the receipts from interstate end |
8 | | user access line charges, if the customer's |
9 | | service address is in this State. As used in this |
10 | | subdivision, "interstate end user access line |
11 | | charges" includes, but is not limited to, the |
12 | | surcharge approved by the federal communications |
13 | | commission and levied pursuant to 47 CFR 69. |
14 | | (d) Gross receipts from sales of |
15 | | telecommunication services or from ancillary |
16 | | services for telecommunications services sold to |
17 | | other telecommunication service providers for |
18 | | resale shall be sourced to this State using the |
19 | | apportionment concepts used for non-resale |
20 | | receipts of telecommunications services if the |
21 | | information is readily available to make that |
22 | | determination. If the information is not readily |
23 | | available, then the taxpayer may use any other |
24 | | reasonable and consistent method. |
25 | | (B-7) For taxable years ending on or after December 31, |
26 | | 2008, receipts from the sale of broadcasting services are |
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1 | | in this State if the broadcasting services are received in |
2 | | this State. For purposes of this paragraph (B-7), the |
3 | | following terms have the following meanings: |
4 | | "Advertising revenue" means consideration received |
5 | | by the taxpayer in exchange for broadcasting services |
6 | | or allowing the broadcasting of commercials or |
7 | | announcements in connection with the broadcasting of |
8 | | film or radio programming, from sponsorships of the |
9 | | programming, or from product placements in the |
10 | | programming. |
11 | | "Audience factor" means the ratio that the |
12 | | audience or subscribers located in this State of a |
13 | | station, a network, or a cable system bears to the |
14 | | total audience or total subscribers for that station, |
15 | | network, or cable system. The audience factor for film |
16 | | or radio programming shall be determined by reference |
17 | | to the books and records of the taxpayer or by |
18 | | reference to published rating statistics provided the |
19 | | method used by the taxpayer is consistently used from |
20 | | year to year for this purpose and fairly represents the |
21 | | taxpayer's activity in this State. |
22 | | "Broadcast" or "broadcasting" or "broadcasting |
23 | | services" means the transmission or provision of film |
24 | | or radio programming, whether through the public |
25 | | airwaves, by cable, by direct or indirect satellite |
26 | | transmission, or by any other means of communication, |
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1 | | either through a station, a network, or a cable system. |
2 | | "Film" or "film programming" means the broadcast |
3 | | on television of any and all performances, events, or |
4 | | productions, including but not limited to news, |
5 | | sporting events, plays, stories, or other literary, |
6 | | commercial, educational, or artistic works, either |
7 | | live or through the use of video tape, disc, or any |
8 | | other type of format or medium. Each episode of a |
9 | | series of films produced for television shall |
10 | | constitute separate "film" notwithstanding that the |
11 | | series relates to the same principal subject and is |
12 | | produced during one or more tax periods. |
13 | | "Radio" or "radio programming" means the broadcast |
14 | | on radio of any and all performances, events, or |
15 | | productions, including but not limited to news, |
16 | | sporting events, plays, stories, or other literary, |
17 | | commercial, educational, or artistic works, either |
18 | | live or through the use of an audio tape, disc, or any |
19 | | other format or medium. Each episode in a series of |
20 | | radio programming produced for radio broadcast shall |
21 | | constitute a separate "radio programming" |
22 | | notwithstanding that the series relates to the same |
23 | | principal subject and is produced during one or more |
24 | | tax periods. |
25 | | (i) In the case of advertising revenue from |
26 | | broadcasting, the customer is the advertiser and |
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1 | | the service is received in this State if the |
2 | | commercial domicile of the advertiser is in this |
3 | | State. |
4 | | (ii) In the case where film or radio |
5 | | programming is broadcast by a station, a network, |
6 | | or a cable system for a fee or other remuneration |
7 | | received from the recipient of the broadcast, the |
8 | | portion of the service that is received in this |
9 | | State is measured by the portion of the recipients |
10 | | of the broadcast located in this State. |
11 | | Accordingly, the fee or other remuneration for |
12 | | such service that is included in the Illinois |
13 | | numerator of the sales factor is the total of those |
14 | | fees or other remuneration received from |
15 | | recipients in Illinois. For purposes of this |
16 | | paragraph, a taxpayer may determine the location |
17 | | of the recipients of its broadcast using the |
18 | | address of the recipient shown in its contracts |
19 | | with the recipient or using the billing address of |
20 | | the recipient in the taxpayer's records. |
21 | | (iii) In the case where film or radio |
22 | | programming is broadcast by a station, a network, |
23 | | or a cable system for a fee or other remuneration |
24 | | from the person providing the programming, the |
25 | | portion of the broadcast service that is received |
26 | | by such station, network, or cable system in this |
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1 | | State is measured by the portion of recipients of |
2 | | the broadcast located in this State. Accordingly, |
3 | | the amount of revenue related to such an |
4 | | arrangement that is included in the Illinois |
5 | | numerator of the sales factor is the total fee or |
6 | | other total remuneration from the person providing |
7 | | the programming related to that broadcast |
8 | | multiplied by the Illinois audience factor for |
9 | | that broadcast. |
10 | | (iv) In the case where film or radio |
11 | | programming is provided by a taxpayer that is a |
12 | | network or station to a customer for broadcast in |
13 | | exchange for a fee or other remuneration from that |
14 | | customer the broadcasting service is received at |
15 | | the location of the office of the customer from |
16 | | which the services were ordered in the regular |
17 | | course of the customer's trade or business. |
18 | | Accordingly, in such a case the revenue derived by |
19 | | the taxpayer that is included in the taxpayer's |
20 | | Illinois numerator of the sales factor is the |
21 | | revenue from such customers who receive the |
22 | | broadcasting service in Illinois. |
23 | | (v) In the case where film or radio programming |
24 | | is provided by a taxpayer that is not a network or |
25 | | station to another person for broadcasting in |
26 | | exchange for a fee or other remuneration from that |
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1 | | person, the broadcasting service is received at |
2 | | the location of the office of the customer from |
3 | | which the services were ordered in the regular |
4 | | course of the customer's trade or business. |
5 | | Accordingly, in such a case the revenue derived by |
6 | | the taxpayer that is included in the taxpayer's |
7 | | Illinois numerator of the sales factor is the |
8 | | revenue from such customers who receive the |
9 | | broadcasting service in Illinois.
|
10 | | (C) For taxable years ending before December 31, 2008, |
11 | | sales, other than sales governed by paragraphs (B), (B-1), |
12 | | and (B-2), are in
this State if:
|
13 | | (i) The income-producing activity is performed in |
14 | | this State; or
|
15 | | (ii) The income-producing activity is performed |
16 | | both within and
without this State and a greater |
17 | | proportion of the income-producing
activity is |
18 | | performed within this State than without this State, |
19 | | based
on performance costs.
|
20 | | (C-5) For taxable years ending on or after December 31, |
21 | | 2008, sales, other than sales governed by paragraphs (B), |
22 | | (B-1), (B-2), (B-5), and (B-7), are in this State if any of |
23 | | the following criteria are met: |
24 | | (i) Sales from the sale or lease of real property |
25 | | are in this State if the property is located in this |
26 | | State. |
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1 | | (ii) Sales from the lease or rental of tangible |
2 | | personal property are in this State if the property is |
3 | | located in this State during the rental period. Sales |
4 | | from the lease or rental of tangible personal property |
5 | | that is characteristically moving property, including, |
6 | | but not limited to, motor vehicles, rolling stock, |
7 | | aircraft, vessels, or mobile equipment are in this |
8 | | State to the extent that the property is used in this |
9 | | State. |
10 | | (iii) In the case of interest, net gains (but not |
11 | | less than zero) and other items of income from |
12 | | intangible personal property, the sale is in this State |
13 | | if: |
14 | | (a) in the case of a taxpayer who is a dealer |
15 | | in the item of intangible personal property within |
16 | | the meaning of Section 475 of the Internal Revenue |
17 | | Code, the income or gain is received from a |
18 | | customer in this State. For purposes of this |
19 | | subparagraph, a customer is in this State if the |
20 | | customer is an individual, trust or estate who is a |
21 | | resident of this State and, for all other |
22 | | customers, if the customer's commercial domicile |
23 | | is in this State. Unless the dealer has actual |
24 | | knowledge of the residence or commercial domicile |
25 | | of a customer during a taxable year, the customer |
26 | | shall be deemed to be a customer in this State if |
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1 | | the billing address of the customer, as shown in |
2 | | the records of the dealer, is in this State; or |
3 | | (b) in all other cases, if the |
4 | | income-producing activity of the taxpayer is |
5 | | performed in this State or, if the |
6 | | income-producing activity of the taxpayer is |
7 | | performed both within and without this State, if a |
8 | | greater proportion of the income-producing |
9 | | activity of the taxpayer is performed within this |
10 | | State than in any other state, based on performance |
11 | | costs. |
12 | | (iv) Sales of services are in this State if the |
13 | | services are received in this State. For the purposes |
14 | | of this section, gross receipts from the performance of |
15 | | services provided to a corporation, partnership, or |
16 | | trust may only be attributed to a state where that |
17 | | corporation, partnership, or trust has a fixed place of |
18 | | business. If the state where the services are received |
19 | | is not readily determinable or is a state where the |
20 | | corporation, partnership, or trust receiving the |
21 | | service does not have a fixed place of business, the |
22 | | services shall be deemed to be received at the location |
23 | | of the office of the customer from which the services |
24 | | were ordered in the regular course of the customer's |
25 | | trade or business. If the ordering office cannot be |
26 | | determined, the services shall be deemed to be received |
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1 | | at the office of the customer to which the services are |
2 | | billed. If the taxpayer is not taxable in the state in |
3 | | which the services are received, the sale must be |
4 | | excluded from both the numerator and the denominator of |
5 | | the sales factor. The Department shall adopt rules |
6 | | prescribing where specific types of service are |
7 | | received, including, but not limited to, publishing, |
8 | | and utility service.
|
9 | | (D) For taxable years ending on or after December 31, |
10 | | 1995, the following
items of income shall not be included |
11 | | in the numerator or denominator of the
sales factor: |
12 | | dividends; amounts included under Section 78 of the |
13 | | Internal
Revenue Code; and Subpart F income as defined in |
14 | | Section 952 of the Internal
Revenue Code.
No inference |
15 | | shall be drawn from the enactment of this paragraph (D) in
|
16 | | construing this Section for taxable years ending before |
17 | | December 31, 1995.
|
18 | | (E) Paragraphs (B-1) and (B-2) shall apply to tax years |
19 | | ending on or
after December 31, 1999, provided that a |
20 | | taxpayer may elect to apply the
provisions of these |
21 | | paragraphs to prior tax years. Such election shall be made
|
22 | | in the form and manner prescribed by the Department, shall |
23 | | be irrevocable, and
shall apply to all tax years; provided |
24 | | that, if a taxpayer's Illinois income
tax liability for any |
25 | | tax year, as assessed under Section 903 prior to January
1, |
26 | | 1999, was computed in a manner contrary to the provisions |
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1 | | of paragraphs
(B-1) or (B-2), no refund shall be payable to |
2 | | the taxpayer for that tax year to
the extent such refund is |
3 | | the result of applying the provisions of paragraph
(B-1) or |
4 | | (B-2) retroactively. In the case of a unitary business |
5 | | group, such
election shall apply to all members of such |
6 | | group for every tax year such group
is in existence, but |
7 | | shall not apply to any taxpayer for any period during
which |
8 | | that taxpayer is not a member of such group.
|
9 | | (b) Insurance companies.
|
10 | | (1) In general. Except as otherwise
provided by |
11 | | paragraph (2), business income of an insurance company for |
12 | | a
taxable year shall be apportioned to this State by |
13 | | multiplying such
income by a fraction, the numerator of |
14 | | which is the direct premiums
written for insurance upon |
15 | | property or risk in this State, and the
denominator of |
16 | | which is the direct premiums written for insurance upon
|
17 | | property or risk everywhere. For purposes of this |
18 | | subsection, the term
"direct premiums written" means the |
19 | | total amount of direct premiums
written, assessments and |
20 | | annuity considerations as reported for the
taxable year on |
21 | | the annual statement filed by the company with the
Illinois |
22 | | Director of Insurance in the form approved by the National
|
23 | | Convention of Insurance Commissioners
or such other form as |
24 | | may be
prescribed in lieu thereof.
|
25 | | (2) Reinsurance. If the principal source of premiums |
26 | | written by an
insurance company consists of premiums for |
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1 | | reinsurance accepted by it,
the business income of such |
2 | | company shall be apportioned to this State
by multiplying |
3 | | such income by a fraction, the numerator of which is the
|
4 | | sum of (i) direct premiums written for insurance upon |
5 | | property or risk
in this State, plus (ii) premiums written |
6 | | for reinsurance accepted in
respect of property or risk in |
7 | | this State, and the denominator of which
is the sum of |
8 | | (iii) direct premiums written for insurance upon property
|
9 | | or risk everywhere, plus (iv) premiums written for |
10 | | reinsurance accepted
in respect of property or risk |
11 | | everywhere. For purposes of this
paragraph, premiums |
12 | | written for reinsurance accepted in respect of
property or |
13 | | risk in this State, whether or not otherwise determinable,
|
14 | | may, at the election of the company, be determined on the |
15 | | basis of the
proportion which premiums written for |
16 | | reinsurance accepted from
companies commercially domiciled |
17 | | in Illinois bears to premiums written
for reinsurance |
18 | | accepted from all sources, or, alternatively, in the
|
19 | | proportion which the sum of the direct premiums written for |
20 | | insurance
upon property or risk in this State by each |
21 | | ceding company from which
reinsurance is accepted bears to |
22 | | the sum of the total direct premiums
written by each such |
23 | | ceding company for the taxable year. The election made by a |
24 | | company under this paragraph for its first taxable year |
25 | | ending on or after December 31, 2011, shall be binding for |
26 | | that company for that taxable year and for all subsequent |
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1 | | taxable years, and may be altered only with the written |
2 | | permission of the Department, which shall not be |
3 | | unreasonably withheld.
|
4 | | (c) Financial organizations.
|
5 | | (1) In general. For taxable years ending before |
6 | | December 31, 2008, business income of a financial
|
7 | | organization shall be apportioned to this State by |
8 | | multiplying such
income by a fraction, the numerator of |
9 | | which is its business income from
sources within this |
10 | | State, and the denominator of which is its business
income |
11 | | from all sources. For the purposes of this subsection, the
|
12 | | business income of a financial organization from sources |
13 | | within this
State is the sum of the amounts referred to in |
14 | | subparagraphs (A) through
(E) following, but excluding the |
15 | | adjusted income of an international banking
facility as |
16 | | determined in paragraph (2):
|
17 | | (A) Fees, commissions or other compensation for |
18 | | financial services
rendered within this State;
|
19 | | (B) Gross profits from trading in stocks, bonds or |
20 | | other securities
managed within this State;
|
21 | | (C) Dividends, and interest from Illinois |
22 | | customers, which are received
within this State;
|
23 | | (D) Interest charged to customers at places of |
24 | | business maintained
within this State for carrying |
25 | | debit balances of margin accounts,
without deduction |
26 | | of any costs incurred in carrying such accounts; and
|
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1 | | (E) Any other gross income resulting from the |
2 | | operation as a
financial organization within this |
3 | | State. In computing the amounts
referred to in |
4 | | paragraphs (A) through (E) of this subsection, any |
5 | | amount
received by a member of an affiliated group |
6 | | (determined under Section
1504(a) of the Internal |
7 | | Revenue Code but without reference to whether
any such |
8 | | corporation is an "includible corporation" under |
9 | | Section
1504(b) of the Internal Revenue Code) from |
10 | | another member of such group
shall be included only to |
11 | | the extent such amount exceeds expenses of the
|
12 | | recipient directly related thereto.
|
13 | | (2) International Banking Facility. For taxable years |
14 | | ending before December 31, 2008:
|
15 | | (A) Adjusted Income. The adjusted income of an |
16 | | international banking
facility is its income reduced |
17 | | by the amount of the floor amount.
|
18 | | (B) Floor Amount. The floor amount shall be the |
19 | | amount, if any,
determined
by multiplying the income of |
20 | | the international banking facility by a fraction,
not |
21 | | greater than one, which is determined as follows:
|
22 | | (i) The numerator shall be:
|
23 | | The average aggregate, determined on a |
24 | | quarterly basis, of the
financial
organization's |
25 | | loans to banks in foreign countries, to foreign |
26 | | domiciled
borrowers (except where secured |
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1 | | primarily by real estate) and to foreign
|
2 | | governments and other foreign official |
3 | | institutions, as reported for its
branches, |
4 | | agencies and offices within the state on its |
5 | | "Consolidated Report
of Condition", Schedule A, |
6 | | Lines 2.c., 5.b., and 7.a., which was filed with
|
7 | | the Federal Deposit Insurance Corporation and |
8 | | other regulatory authorities,
for the year 1980, |
9 | | minus
|
10 | | The average aggregate, determined on a |
11 | | quarterly basis, of such loans
(other
than loans of |
12 | | an international banking facility), as reported by |
13 | | the financial
institution for its branches, |
14 | | agencies and offices within the state, on
the |
15 | | corresponding Schedule and lines of the |
16 | | Consolidated Report of Condition
for the current |
17 | | taxable year, provided, however, that in no case |
18 | | shall the
amount determined in this clause (the |
19 | | subtrahend) exceed the amount determined
in the |
20 | | preceding clause (the minuend); and
|
21 | | (ii) the denominator shall be the average |
22 | | aggregate, determined on a
quarterly basis, of the |
23 | | international banking facility's loans to banks in
|
24 | | foreign countries, to foreign domiciled borrowers |
25 | | (except where secured
primarily by real estate) |
26 | | and to foreign governments and other foreign
|
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1 | | official institutions, which were recorded in its |
2 | | financial accounts for
the current taxable year.
|
3 | | (C) Change to Consolidated Report of Condition and |
4 | | in Qualification.
In the event the Consolidated Report |
5 | | of Condition which is filed with the
Federal Deposit |
6 | | Insurance Corporation and other regulatory authorities |
7 | | is
altered so that the information required for |
8 | | determining the floor amount
is not found on Schedule |
9 | | A, lines 2.c., 5.b. and 7.a., the financial
institution |
10 | | shall notify the Department and the Department may, by
|
11 | | regulations or otherwise, prescribe or authorize the |
12 | | use of an alternative
source for such information. The |
13 | | financial institution shall also notify
the Department |
14 | | should its international banking facility fail to |
15 | | qualify as
such, in whole or in part, or should there |
16 | | be any amendment or change to
the Consolidated Report |
17 | | of Condition, as originally filed, to the extent
such |
18 | | amendment or change alters the information used in |
19 | | determining the floor
amount.
|
20 | | (3) For taxable years ending on or after December 31, |
21 | | 2008, the business income of a financial organization shall |
22 | | be apportioned to this State by multiplying such income by |
23 | | a fraction, the numerator of which is its gross receipts |
24 | | from sources in this State or otherwise attributable to |
25 | | this State's marketplace and the denominator of which is |
26 | | its gross receipts everywhere during the taxable year. |
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1 | | "Gross receipts" for purposes of this subparagraph (3) |
2 | | means gross income, including net taxable gain on |
3 | | disposition of assets, including securities and money |
4 | | market instruments, when derived from transactions and |
5 | | activities in the regular course of the financial |
6 | | organization's trade or business. The following examples |
7 | | are illustrative:
|
8 | | (i) Receipts from the lease or rental of real or |
9 | | tangible personal property are in this State if the |
10 | | property is located in this State during the rental |
11 | | period. Receipts from the lease or rental of tangible |
12 | | personal property that is characteristically moving |
13 | | property, including, but not limited to, motor |
14 | | vehicles, rolling stock, aircraft, vessels, or mobile |
15 | | equipment are from sources in this State to the extent |
16 | | that the property is used in this State. |
17 | | (ii) Interest income, commissions, fees, gains on |
18 | | disposition, and other receipts from assets in the |
19 | | nature of loans that are secured primarily by real |
20 | | estate or tangible personal property are from sources |
21 | | in this State if the security is located in this State. |
22 | | (iii) Interest income, commissions, fees, gains on |
23 | | disposition, and other receipts from consumer loans |
24 | | that are not secured by real or tangible personal |
25 | | property are from sources in this State if the debtor |
26 | | is a resident of this State. |
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1 | | (iv) Interest income, commissions, fees, gains on |
2 | | disposition, and other receipts from commercial loans |
3 | | and installment obligations that are not secured by |
4 | | real or tangible personal property are from sources in |
5 | | this State if the proceeds of the loan are to be |
6 | | applied in this State. If it cannot be determined where |
7 | | the funds are to be applied, the income and receipts |
8 | | are from sources in this State if the office of the |
9 | | borrower from which the loan was negotiated in the |
10 | | regular course of business is located in this State. If |
11 | | the location of this office cannot be determined, the |
12 | | income and receipts shall be excluded from the |
13 | | numerator and denominator of the sales factor.
|
14 | | (v) Interest income, fees, gains on disposition, |
15 | | service charges, merchant discount income, and other |
16 | | receipts from credit card receivables are from sources |
17 | | in this State if the card charges are regularly billed |
18 | | to a customer in this State. |
19 | | (vi) Receipts from the performance of services, |
20 | | including, but not limited to, fiduciary, advisory, |
21 | | and brokerage services, are in this State if the |
22 | | services are received in this State within the meaning |
23 | | of subparagraph (a)(3)(C-5)(iv) of this Section. |
24 | | (vii) Receipts from the issuance of travelers |
25 | | checks and money orders are from sources in this State |
26 | | if the checks and money orders are issued from a |
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1 | | location within this State. |
2 | | (viii) Receipts from investment assets and |
3 | | activities and trading assets and activities are |
4 | | included in the receipts factor as follows: |
5 | | (1) Interest, dividends, net gains (but not |
6 | | less than zero) and other income from investment |
7 | | assets and activities from trading assets and |
8 | | activities shall be included in the receipts |
9 | | factor. Investment assets and activities and |
10 | | trading assets and activities include but are not |
11 | | limited to: investment securities; trading account |
12 | | assets; federal funds; securities purchased and |
13 | | sold under agreements to resell or repurchase; |
14 | | options; futures contracts; forward contracts; |
15 | | notional principal contracts such as swaps; |
16 | | equities; and foreign currency transactions. With |
17 | | respect to the investment and trading assets and |
18 | | activities described in subparagraphs (A) and (B) |
19 | | of this paragraph, the receipts factor shall |
20 | | include the amounts described in such |
21 | | subparagraphs. |
22 | | (A) The receipts factor shall include the |
23 | | amount by which interest from federal funds |
24 | | sold and securities purchased under resale |
25 | | agreements exceeds interest expense on federal |
26 | | funds purchased and securities sold under |
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1 | | repurchase agreements. |
2 | | (B) The receipts factor shall include the |
3 | | amount by which interest, dividends, gains and |
4 | | other income from trading assets and |
5 | | activities, including but not limited to |
6 | | assets and activities in the matched book, in |
7 | | the arbitrage book, and foreign currency |
8 | | transactions, exceed amounts paid in lieu of |
9 | | interest, amounts paid in lieu of dividends, |
10 | | and losses from such assets and activities. |
11 | | (2) The numerator of the receipts factor |
12 | | includes interest, dividends, net gains (but not |
13 | | less than zero), and other income from investment |
14 | | assets and activities and from trading assets and |
15 | | activities described in paragraph (1) of this |
16 | | subsection that are attributable to this State. |
17 | | (A) The amount of interest, dividends, net |
18 | | gains (but not less than zero), and other |
19 | | income from investment assets and activities |
20 | | in the investment account to be attributed to |
21 | | this State and included in the numerator is |
22 | | determined by multiplying all such income from |
23 | | such assets and activities by a fraction, the |
24 | | numerator of which is the gross income from |
25 | | such assets and activities which are properly |
26 | | assigned to a fixed place of business of the |
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1 | | taxpayer within this State and the denominator |
2 | | of which is the gross income from all such |
3 | | assets and activities. |
4 | | (B) The amount of interest from federal |
5 | | funds sold and purchased and from securities |
6 | | purchased under resale agreements and |
7 | | securities sold under repurchase agreements |
8 | | attributable to this State and included in the |
9 | | numerator is determined by multiplying the |
10 | | amount described in subparagraph (A) of |
11 | | paragraph (1) of this subsection from such |
12 | | funds and such securities by a fraction, the |
13 | | numerator of which is the gross income from |
14 | | such funds and such securities which are |
15 | | properly assigned to a fixed place of business |
16 | | of the taxpayer within this State and the |
17 | | denominator of which is the gross income from |
18 | | all such funds and such securities. |
19 | | (C) The amount of interest, dividends, |
20 | | gains, and other income from trading assets and |
21 | | activities, including but not limited to |
22 | | assets and activities in the matched book, in |
23 | | the arbitrage book and foreign currency |
24 | | transactions (but excluding amounts described |
25 | | in subparagraphs (A) or (B) of this paragraph), |
26 | | attributable to this State and included in the |
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1 | | numerator is determined by multiplying the |
2 | | amount described in subparagraph (B) of |
3 | | paragraph (1) of this subsection by a fraction, |
4 | | the numerator of which is the gross income from |
5 | | such trading assets and activities which are |
6 | | properly assigned to a fixed place of business |
7 | | of the taxpayer within this State and the |
8 | | denominator of which is the gross income from |
9 | | all such assets and activities. |
10 | | (D) Properly assigned, for purposes of |
11 | | this paragraph (2) of this subsection, means |
12 | | the investment or trading asset or activity is |
13 | | assigned to the fixed place of business with |
14 | | which it has a preponderance of substantive |
15 | | contacts. An investment or trading asset or |
16 | | activity assigned by the taxpayer to a fixed |
17 | | place of business without the State shall be |
18 | | presumed to have been properly assigned if: |
19 | | (i) the taxpayer has assigned, in the |
20 | | regular course of its business, such asset |
21 | | or activity on its records to a fixed place |
22 | | of business consistent with federal or |
23 | | state regulatory requirements; |
24 | | (ii) such assignment on its records is |
25 | | based upon substantive contacts of the |
26 | | asset or activity to such fixed place of |
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1 | | business; and |
2 | | (iii) the taxpayer uses such records |
3 | | reflecting assignment of such assets or |
4 | | activities for the filing of all state and |
5 | | local tax returns for which an assignment |
6 | | of such assets or activities to a fixed |
7 | | place of business is required. |
8 | | (E) The presumption of proper assignment |
9 | | of an investment or trading asset or activity |
10 | | provided in subparagraph (D) of paragraph (2) |
11 | | of this subsection may be rebutted upon a |
12 | | showing by the Department, supported by a |
13 | | preponderance of the evidence, that the |
14 | | preponderance of substantive contacts |
15 | | regarding such asset or activity did not occur |
16 | | at the fixed place of business to which it was |
17 | | assigned on the taxpayer's records. If the |
18 | | fixed place of business that has a |
19 | | preponderance of substantive contacts cannot |
20 | | be determined for an investment or trading |
21 | | asset or activity to which the presumption in |
22 | | subparagraph (D) of paragraph (2) of this |
23 | | subsection does not apply or with respect to |
24 | | which that presumption has been rebutted, that |
25 | | asset or activity is properly assigned to the |
26 | | state in which the taxpayer's commercial |
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1 | | domicile is located. For purposes of this |
2 | | subparagraph (E), it shall be presumed, |
3 | | subject to rebuttal, that taxpayer's |
4 | | commercial domicile is in the state of the |
5 | | United States or the District of Columbia to |
6 | | which the greatest number of employees are |
7 | | regularly connected with the management of the |
8 | | investment or trading income or out of which |
9 | | they are working, irrespective of where the |
10 | | services of such employees are performed, as of |
11 | | the last day of the taxable year.
|
12 | | (4) (Blank). |
13 | | (5) (Blank). |
14 | | (c-1) Federally regulated exchanges. For taxable years |
15 | | ending on or after December 31, 2012, business income of a |
16 | | federally regulated exchange shall, at the option of the |
17 | | federally regulated exchange, be apportioned to this State by |
18 | | multiplying such income by a fraction, the numerator of which |
19 | | is its business income from sources within this State, and the |
20 | | denominator of which is its business income from all sources. |
21 | | For purposes of this subsection, the business income within |
22 | | this State of a federally regulated exchange is the sum of the |
23 | | following: |
24 | | (1) Receipts attributable to transactions executed on |
25 | | a physical trading floor if that physical trading floor is |
26 | | located in this State. |
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1 | | (2) Receipts attributable to all other matching, |
2 | | execution, or clearing transactions, including without |
3 | | limitation receipts from the provision of matching, |
4 | | execution, or clearing services to another entity, |
5 | | multiplied by (i) for taxable years ending on or after |
6 | | December 31, 2012 but before December 31, 2013, 63.77%; and |
7 | | (ii) for taxable years ending on or after December 31, |
8 | | 2013, 27.54%. |
9 | | (3) All other receipts not governed by subparagraphs |
10 | | (1) or (2) of this subsection (c-1), to the extent the |
11 | | receipts would be characterized as "sales in this State" |
12 | | under item (3) of subsection (a) of this Section. |
13 | | "Federally regulated exchange" means (i) a "registered |
14 | | entity" within the meaning of 7 U.S.C. Section 1a(40)(A), (B), |
15 | | or (C), (ii) an "exchange" or "clearing agency" within the |
16 | | meaning of 15 U.S.C. Section 78c (a)(1) or (23), (iii) any such |
17 | | entities regulated under any successor regulatory structure to |
18 | | the foregoing, and (iv) all taxpayers who are members of the |
19 | | same unitary business group as a federally regulated exchange, |
20 | | determined without regard to the prohibition in Section |
21 | | 1501(a)(27) of this Act against including in a unitary business |
22 | | group taxpayers who are ordinarily required to apportion |
23 | | business income under different subsections of this Section; |
24 | | provided that this subparagraph (iv) shall apply only if 50% or |
25 | | more of the business receipts of the unitary business group |
26 | | determined by application of this subparagraph (iv) for the |
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1 | | taxable year are attributable to the matching, execution, or |
2 | | clearing of transactions conducted by an entity described in |
3 | | subparagraph (i), (ii), or (iii) of this paragraph. |
4 | | In no event shall the Illinois apportionment percentage |
5 | | computed in accordance with this subsection (c-1) for any |
6 | | taxpayer for any tax year be less than the Illinois |
7 | | apportionment percentage computed under this subsection (c-1) |
8 | | for that taxpayer for the first full tax year ending on or |
9 | | after December 31, 2013 for which this subsection (c-1) applied |
10 | | to the taxpayer. |
11 | | (d) Transportation services. For taxable years ending |
12 | | before December 31, 2008, business income derived from |
13 | | furnishing
transportation services shall be apportioned to |
14 | | this State in accordance
with paragraphs (1) and (2):
|
15 | | (1) Such business income (other than that derived from
|
16 | | transportation by pipeline) shall be apportioned to this |
17 | | State by
multiplying such income by a fraction, the |
18 | | numerator of which is the
revenue miles of the person in |
19 | | this State, and the denominator of which
is the revenue |
20 | | miles of the person everywhere. For purposes of this
|
21 | | paragraph, a revenue mile is the transportation of 1 |
22 | | passenger or 1 net
ton of freight the distance of 1 mile |
23 | | for a consideration. Where a
person is engaged in the |
24 | | transportation of both passengers and freight,
the |
25 | | fraction above referred to shall be determined by means of |
26 | | an
average of the passenger revenue mile fraction and the |
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1 | | freight revenue
mile fraction, weighted to reflect the |
2 | | person's
|
3 | | (A) relative railway operating income from total |
4 | | passenger and total
freight service, as reported to the |
5 | | Interstate Commerce Commission, in
the case of |
6 | | transportation by railroad, and
|
7 | | (B) relative gross receipts from passenger and |
8 | | freight
transportation, in case of transportation |
9 | | other than by railroad.
|
10 | | (2) Such business income derived from transportation |
11 | | by pipeline
shall be apportioned to this State by |
12 | | multiplying such income by a
fraction, the numerator of |
13 | | which is the revenue miles of the person in
this State, and |
14 | | the denominator of which is the revenue miles of the
person |
15 | | everywhere. For the purposes of this paragraph, a revenue |
16 | | mile is
the transportation by pipeline of 1 barrel of oil, |
17 | | 1,000 cubic feet of
gas, or of any specified quantity of |
18 | | any other substance, the distance
of 1 mile for a |
19 | | consideration.
|
20 | | (3) For taxable years ending on or after December 31, |
21 | | 2008, business income derived from providing |
22 | | transportation services other than airline services shall |
23 | | be apportioned to this State by using a fraction, (a) the |
24 | | numerator of which shall be (i) all receipts from any |
25 | | movement or shipment of people, goods, mail, oil, gas, or |
26 | | any other substance (other than by airline) that both |
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1 | | originates and terminates in this State, plus (ii) that |
2 | | portion of the person's gross receipts from movements or |
3 | | shipments of people, goods, mail, oil, gas, or any other |
4 | | substance (other than by airline) that originates in one |
5 | | state or jurisdiction and terminates in another state or |
6 | | jurisdiction, that is determined by the ratio that the |
7 | | miles traveled in this State bears to total miles |
8 | | everywhere and (b) the denominator of which shall be all |
9 | | revenue derived from the movement or shipment of people, |
10 | | goods, mail, oil, gas, or any other substance (other than |
11 | | by airline). Where a taxpayer is engaged in the |
12 | | transportation of both passengers and freight, the |
13 | | fraction above referred to shall first be determined |
14 | | separately for passenger miles and freight miles. Then an |
15 | | average of the passenger miles fraction and the freight |
16 | | miles fraction shall be weighted to reflect the taxpayer's: |
17 | | (A) relative railway operating income from total |
18 | | passenger and total freight service, as reported to the |
19 | | Surface Transportation Board, in the case of |
20 | | transportation by railroad; and
|
21 | | (B) relative gross receipts from passenger and |
22 | | freight transportation, in case of transportation |
23 | | other than by railroad.
|
24 | | (4) For taxable years ending on or after December 31, |
25 | | 2008, business income derived from furnishing airline
|
26 | | transportation services shall be apportioned to this State |
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1 | | by
multiplying such income by a fraction, the numerator of |
2 | | which is the
revenue miles of the person in this State, and |
3 | | the denominator of which
is the revenue miles of the person |
4 | | everywhere. For purposes of this
paragraph, a revenue mile |
5 | | is the transportation of one passenger or one net
ton of |
6 | | freight the distance of one mile for a consideration. If a
|
7 | | person is engaged in the transportation of both passengers |
8 | | and freight,
the fraction above referred to shall be |
9 | | determined by means of an
average of the passenger revenue |
10 | | mile fraction and the freight revenue
mile fraction, |
11 | | weighted to reflect the person's relative gross receipts |
12 | | from passenger and freight
airline transportation.
|
13 | | (e) Combined apportionment. Where 2 or more persons are |
14 | | engaged in
a unitary business as described in subsection |
15 | | (a)(27) of
Section 1501,
a part of which is conducted in this |
16 | | State by one or more members of the
group, the business income |
17 | | attributable to this State by any such member
or members shall |
18 | | be apportioned by means of the combined apportionment method.
|
19 | | (f) Alternative allocation. If the allocation and |
20 | | apportionment
provisions of subsections (a) through (e) and of |
21 | | subsection (h) do not
fairly represent the
extent of a person's |
22 | | business activity in this State, the person may
petition for, |
23 | | or the Director may, without a petition, permit or require, in |
24 | | respect of all or any part
of the person's business activity, |
25 | | if reasonable:
|
26 | | (1) Separate accounting;
|
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1 | | (2) The exclusion of any one or more factors;
|
2 | | (3) The inclusion of one or more additional factors |
3 | | which will
fairly represent the person's business |
4 | | activities in this State; or
|
5 | | (4) The employment of any other method to effectuate an |
6 | | equitable
allocation and apportionment of the person's |
7 | | business income.
|
8 | | (g) Cross reference. For allocation of business income by |
9 | | residents,
see Section 301(a).
|
10 | | (h) For tax years ending on or after December 31, 1998, the |
11 | | apportionment
factor of persons who apportion their business |
12 | | income to this State under
subsection (a) shall be equal to:
|
13 | | (1) for tax years ending on or after December 31, 1998 |
14 | | and before December
31, 1999, 16 2/3% of the property |
15 | | factor plus 16 2/3% of the payroll factor
plus
66 2/3% of |
16 | | the sales factor;
|
17 | | (2) for tax years ending on or after December 31, 1999 |
18 | | and before December
31,
2000, 8 1/3% of the property factor |
19 | | plus 8 1/3% of the payroll factor plus 83
1/3%
of the sales |
20 | | factor;
|
21 | | (3) for tax years ending on or after December 31, 2000, |
22 | | the sales factor.
|
23 | | If, in any tax year ending on or after December 31, 1998 and |
24 | | before December
31, 2000, the denominator of the payroll, |
25 | | property, or sales factor is zero,
the apportionment
factor |
26 | | computed in paragraph (1) or (2) of this subsection for that |
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1 | | year shall
be divided by an amount equal to 100% minus the |
2 | | percentage weight given to each
factor whose denominator is |
3 | | equal to zero.
|
4 | | (Source: P.A. 96-763, eff. 8-25-09; 97-507, eff. 8-23-11.)
|
5 | | (35 ILCS 5/804) (from Ch. 120, par. 8-804)
|
6 | | Sec. 804. Failure to Pay Estimated Tax.
|
7 | | (a) In general. In case of any underpayment of estimated |
8 | | tax by a
taxpayer, except as provided in subsection (d) or (e), |
9 | | the taxpayer shall
be liable to a penalty in an amount |
10 | | determined at the rate prescribed by
Section 3-3 of the Uniform |
11 | | Penalty and Interest Act upon the amount of the
underpayment |
12 | | (determined under subsection (b)) for each required |
13 | | installment.
|
14 | | (b) Amount of underpayment. For purposes of subsection (a), |
15 | | the
amount of the underpayment shall be the excess of:
|
16 | | (1) the amount of the installment which would be |
17 | | required to be paid
under subsection (c), over
|
18 | | (2) the amount, if any, of the installment paid on or |
19 | | before the
last date prescribed for payment.
|
20 | | (c) Amount of Required Installments.
|
21 | | (1) Amount.
|
22 | | (A) In General. Except as provided in paragraphs |
23 | | paragraph (2) and (3) , the amount of any
required |
24 | | installment shall be 25% of the required annual |
25 | | payment.
|
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1 | | (B) Required Annual Payment. For purposes of |
2 | | subparagraph (A),
the term "required annual payment" |
3 | | means the lesser of :
|
4 | | (i) 90% of the tax shown on the return for the |
5 | | taxable year, or
if no return is filed, 90% of the |
6 | | tax for such year ; ,
|
7 | | (ii) for installments due prior to February 1, |
8 | | 2011, and after January 31, 2012, 100% of the tax |
9 | | shown on the return of the taxpayer for the
|
10 | | preceding taxable year if a return showing a |
11 | | liability for tax was filed by
the taxpayer for the |
12 | | preceding taxable year and such preceding year was |
13 | | a
taxable year of 12 months; or
|
14 | | (iii) for installments due after January 31, |
15 | | 2011, and prior to February 1, 2012, 150% of the |
16 | | tax shown on the return of the taxpayer for the |
17 | | preceding taxable year if a return showing a |
18 | | liability for tax was filed by the taxpayer for the |
19 | | preceding taxable year and such preceding year was |
20 | | a taxable year of 12 months.
|
21 | | (2) Lower Required Installment where Annualized Income |
22 | | Installment is Less
Than Amount Determined Under Paragraph |
23 | | (1).
|
24 | | (A) In General. In the case of any required |
25 | | installment if a taxpayer
establishes that the |
26 | | annualized income installment is less than the amount
|
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1 | | determined under paragraph (1),
|
2 | | (i) the amount of such required installment |
3 | | shall be the annualized
income installment, and
|
4 | | (ii) any reduction in a required installment |
5 | | resulting from the
application of this |
6 | | subparagraph shall be recaptured by increasing the
|
7 | | amount of the next required installment determined |
8 | | under paragraph (1) by
the amount of such |
9 | | reduction, and by increasing subsequent required
|
10 | | installments to the extent that the reduction has |
11 | | not previously been
recaptured under this clause.
|
12 | | (B) Determination of Annualized Income |
13 | | Installment. In the case of
any required installment, |
14 | | the annualized income installment is the
excess, if |
15 | | any, of :
|
16 | | (i) an amount equal to the applicable |
17 | | percentage of the tax for the
taxable year computed |
18 | | by placing on an annualized basis the net income |
19 | | for
months in the taxable year ending before the |
20 | | due date for the installment, over
|
21 | | (ii) the aggregate amount of any prior |
22 | | required installments for
the taxable year.
|
23 | | (C) Applicable Percentage.
|
|
24 | | In the case of the following |
The applicable |
|
25 | | required installments: |
percentage is: |
|
26 | | 1st ............................... |
22.5% |
|
|
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1 | | 2nd ............................... |
45% |
|
2 | | 3rd ............................... |
67.5% |
|
3 | | 4th ............................... |
90% |
|
4 | | (D) Annualized Net Income; Individuals. For |
5 | | individuals, net
income shall be placed on an |
6 | | annualized basis by:
|
7 | | (i) multiplying by 12, or in the case of a |
8 | | taxable year of
less than 12 months, by the number |
9 | | of months in the taxable year, the
net income |
10 | | computed without regard to the standard exemption |
11 | | for the months
in the taxable
year ending before |
12 | | the month in which the installment is required to |
13 | | be paid;
|
14 | | (ii) dividing the resulting amount by the |
15 | | number of months in the
taxable year ending before |
16 | | the month in which such installment date falls; and
|
17 | | (iii) deducting from such amount the standard |
18 | | exemption allowable for
the taxable year, such |
19 | | standard exemption being determined as of the last
|
20 | | date prescribed for payment of the installment.
|
21 | | (E) Annualized Net Income; Corporations. For |
22 | | corporations,
net income shall be placed on an |
23 | | annualized basis by multiplying
by 12 the taxable |
24 | | income
|
25 | | (i) for the first 3 months of the taxable year, |
26 | | in the case of the
installment required to be paid |
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1 | | in the 4th month,
|
2 | | (ii) for the first 3 months or for the first 5 |
3 | | months of the taxable
year, in the case of the |
4 | | installment required to be paid in the 6th month,
|
5 | | (iii) for the first 6 months or for the first 8 |
6 | | months of the taxable
year, in the case of the |
7 | | installment required to be paid in the 9th month, |
8 | | and
|
9 | | (iv) for the first 9 months or for the first 11 |
10 | | months of the taxable
year, in the case of the |
11 | | installment required to be paid in the 12th month
|
12 | | of the taxable year,
|
13 | | then dividing the resulting amount by the number of |
14 | | months in the taxable
year (3, 5, 6, 8, 9, or 11 as the |
15 | | case may be).
|
16 | | (3) Notwithstanding any other provision of this |
17 | | subsection (c), in the case of a federally regulated |
18 | | exchange that elects to apportion its income under Section |
19 | | 304(c-1) of this Act, the amount of each required |
20 | | installment due prior to June 30 of the first taxable year |
21 | | to which the election applies shall be 25% of the tax that |
22 | | would have been shown on the return for that taxable year |
23 | | if the taxpayer had not made such election. |
24 | | (d) Exceptions. Notwithstanding the provisions of the |
25 | | preceding
subsections, the penalty imposed by subsection (a) |
26 | | shall not
be imposed if the taxpayer was not required to file |
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1 | | an Illinois income
tax return for the preceding taxable year, |
2 | | or, for individuals, if the
taxpayer had no tax liability for |
3 | | the preceding taxable year and such year
was a taxable year of |
4 | | 12 months.
The penalty imposed by subsection (a) shall
also not |
5 | | be imposed on any underpayments of estimated tax due before the
|
6 | | effective date of this amendatory Act of 1998 which |
7 | | underpayments are solely
attributable to the change in |
8 | | apportionment from subsection (a) to subsection
(h) of Section |
9 | | 304. The provisions of this amendatory Act of 1998 apply to tax
|
10 | | years ending on or after December 31, 1998.
|
11 | | (e) The penalty imposed for underpayment of estimated tax |
12 | | by subsection
(a) of this Section shall not be imposed to the |
13 | | extent that the Director
or his or her designate determines, |
14 | | pursuant to Section 3-8 of the Uniform Penalty
and Interest Act |
15 | | that the penalty should not be imposed.
|
16 | | (f) Definition of tax. For purposes of subsections (b) and |
17 | | (c),
the term "tax" means the excess of the tax imposed under |
18 | | Article 2 of
this Act, over the amounts credited against such |
19 | | tax under Sections
601(b) (3) and (4).
|
20 | | (g) Application of Section in case of tax withheld under |
21 | | Article 7.
For purposes of applying this Section:
|
22 | | (1) tax
withheld from compensation for the taxable year |
23 | | shall be deemed a payment
of estimated tax, and an equal |
24 | | part of such amount shall be deemed paid
on each |
25 | | installment date for such taxable year, unless the taxpayer
|
26 | | establishes the dates on which all amounts were actually |
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1 | | withheld, in
which case the amounts so withheld shall be |
2 | | deemed payments of estimated
tax on the dates on which such |
3 | | amounts were actually withheld;
|
4 | | (2) amounts timely paid by a partnership, Subchapter S |
5 | | corporation, or trust on behalf of a partner, shareholder, |
6 | | or beneficiary pursuant to subsection (f) of Section 502 or |
7 | | Section 709.5 and claimed as a payment of estimated tax |
8 | | shall be deemed a payment of estimated tax made on the last |
9 | | day of the taxable year of the partnership, Subchapter S |
10 | | corporation, or trust for which the income from the |
11 | | withholding is made was computed; and |
12 | | (3) all other amounts pursuant to Article 7 shall be |
13 | | deemed a payment of estimated tax on the date the payment |
14 | | is made to the taxpayer of the amount from which the tax is |
15 | | withheld.
|
16 | | (g-5) Amounts withheld under the State Salary and Annuity |
17 | | Withholding
Act. An individual who has amounts withheld under |
18 | | paragraph (10) of Section 4
of the State Salary and Annuity |
19 | | Withholding Act may elect to have those amounts
treated as |
20 | | payments of estimated tax made on the dates on which those |
21 | | amounts
are actually withheld.
|
22 | | (i) Short taxable year. The application of this Section to
|
23 | | taxable years of less than 12 months shall be in accordance |
24 | | with
regulations prescribed by the Department.
|
25 | | The changes in this Section made by Public Act 84-127 shall |
26 | | apply to
taxable years ending on or after January 1, 1986.
|
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1 | | (Source: P.A. 96-1496, eff. 1-13-11; 97-507, eff. 8-23-11; |
2 | | revised 11-18-11.)
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3 | | (35 ILCS 5/1501) (from Ch. 120, par. 15-1501)
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4 | | Sec. 1501. Definitions.
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5 | | (a) In general. When used in this Act, where not
otherwise |
6 | | distinctly expressed or manifestly incompatible with the |
7 | | intent
thereof:
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8 | | (1) Business income. The term "business income" means |
9 | | all income that may be treated as apportionable business |
10 | | income under the Constitution of the United States. |
11 | | Business income is net of the deductions allocable thereto. |
12 | | Such term does not include compensation
or the deductions |
13 | | allocable thereto.
For each taxable year beginning on or |
14 | | after January 1, 2003, a taxpayer may
elect to treat all |
15 | | income other than compensation as business income. This
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16 | | election shall be made in accordance with rules adopted by |
17 | | the Department and,
once made, shall be irrevocable.
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18 | | (1.5) Captive real estate investment trust:
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19 | | (A) The term "captive real estate investment |
20 | | trust" means a corporation, trust, or association:
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21 | | (i) that is considered a real estate |
22 | | investment trust for the taxable year under |
23 | | Section 856 of the Internal Revenue Code;
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24 | | (ii) the certificates of beneficial interest |
25 | | or shares of which are not regularly traded on an |
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1 | | established securities market; and |
2 | | (iii) of which more than 50% of the voting |
3 | | power or value of the beneficial interest or |
4 | | shares, at any time during the last half of the |
5 | | taxable year, is owned or controlled, directly, |
6 | | indirectly, or constructively, by a single |
7 | | corporation. |
8 | | (B) The term "captive real estate investment |
9 | | trust" does not include: |
10 | | (i) a real estate investment trust of which |
11 | | more than 50% of the voting power or value of the |
12 | | beneficial interest or shares is owned or |
13 | | controlled, directly, indirectly, or |
14 | | constructively, by: |
15 | | (a) a real estate investment trust, other |
16 | | than a captive real estate investment trust; |
17 | | (b) a person who is exempt from taxation |
18 | | under Section 501 of the Internal Revenue Code, |
19 | | and who is not required to treat income |
20 | | received from the real estate investment trust |
21 | | as unrelated business taxable income under |
22 | | Section 512 of the Internal Revenue Code; |
23 | | (c) a listed Australian property trust, if |
24 | | no more than 50% of the voting power or value |
25 | | of the beneficial interest or shares of that |
26 | | trust, at any time during the last half of the |
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1 | | taxable year, is owned or controlled, directly |
2 | | or indirectly, by a single person; |
3 | | (d) an entity organized as a trust, |
4 | | provided a listed Australian property trust |
5 | | described in subparagraph (c) owns or |
6 | | controls, directly or indirectly, or |
7 | | constructively, 75% or more of the voting power |
8 | | or value of the beneficial interests or shares |
9 | | of such entity; or |
10 | | (e) an entity that is organized outside of |
11 | | the laws of the United States and that |
12 | | satisfies all of the following criteria: |
13 | | (1) at least 75% of the entity's total |
14 | | asset value at the close of its taxable |
15 | | year is represented by real estate assets |
16 | | (as defined in Section 856(c)(5)(B) of the |
17 | | Internal Revenue Code, thereby including |
18 | | shares or certificates of beneficial |
19 | | interest in any real estate investment |
20 | | trust), cash and cash equivalents, and |
21 | | U.S. Government securities; |
22 | | (2) the entity is not subject to tax on |
23 | | amounts that are distributed to its |
24 | | beneficial owners or is exempt from |
25 | | entity-level taxation; |
26 | | (3) the entity distributes at least |
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1 | | 85% of its taxable income (as computed in |
2 | | the jurisdiction in which it is organized) |
3 | | to the holders of its shares or |
4 | | certificates of beneficial interest on an |
5 | | annual basis; |
6 | | (4) either (i) the shares or |
7 | | beneficial interests of the entity are |
8 | | regularly traded on an established |
9 | | securities market or (ii) not more than 10% |
10 | | of the voting power or value in the entity |
11 | | is held, directly, indirectly, or |
12 | | constructively, by a single entity or |
13 | | individual; and |
14 | | (5) the entity is organized in a |
15 | | country that has entered into a tax treaty |
16 | | with the United States; or |
17 | | (ii) during its first taxable year for which it |
18 | | elects to be treated as a real estate investment |
19 | | trust under Section 856(c)(1) of the Internal |
20 | | Revenue Code, a real estate investment trust the |
21 | | certificates of beneficial interest or shares of |
22 | | which are not regularly traded on an established |
23 | | securities market, but only if the certificates of |
24 | | beneficial interest or shares of the real estate |
25 | | investment trust are regularly traded on an |
26 | | established securities market prior to the earlier |
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1 | | of the due date (including extensions) for filing |
2 | | its return under this Act for that first taxable |
3 | | year or the date it actually files that return. |
4 | | (C) For the purposes of this subsection (1.5), the |
5 | | constructive ownership rules prescribed under Section |
6 | | 318(a) of the Internal Revenue Code, as modified by |
7 | | Section 856(d)(5) of the Internal Revenue Code, apply |
8 | | in determining the ownership of stock, assets, or net |
9 | | profits of any person.
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10 | | (2) Commercial domicile. The term "commercial |
11 | | domicile" means the
principal
place from which the trade or |
12 | | business of the taxpayer is directed or managed.
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13 | | (3) Compensation. The term "compensation" means wages, |
14 | | salaries,
commissions
and any other form of remuneration |
15 | | paid to employees for personal services.
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16 | | (4) Corporation. The term "corporation" includes |
17 | | associations, joint-stock
companies, insurance companies |
18 | | and cooperatives. Any entity, including a
limited |
19 | | liability company formed under the Illinois Limited |
20 | | Liability Company
Act, shall be treated as a corporation if |
21 | | it is so classified for federal
income tax purposes.
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22 | | (5) Department. The term "Department" means the |
23 | | Department of Revenue of
this State.
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24 | | (6) Director. The term "Director" means the Director of |
25 | | Revenue of this
State.
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26 | | (7) Fiduciary. The term "fiduciary" means a guardian, |
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1 | | trustee, executor,
administrator, receiver, or any person |
2 | | acting in any fiduciary capacity for any
person.
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3 | | (8) Financial organization.
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4 | | (A) The term "financial organization" means
any
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5 | | bank, bank holding company, trust company, savings |
6 | | bank, industrial bank,
land bank, safe deposit |
7 | | company, private banker, savings and loan association,
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8 | | building and loan association, credit union, currency |
9 | | exchange, cooperative
bank, small loan company, sales |
10 | | finance company, investment company, or any
person |
11 | | which is owned by a bank or bank holding company. For |
12 | | the purpose of
this Section a "person" will include |
13 | | only those persons which a bank holding
company may |
14 | | acquire and hold an interest in, directly or |
15 | | indirectly, under the
provisions of the Bank Holding |
16 | | Company Act of 1956 (12 U.S.C. 1841, et seq.),
except |
17 | | where interests in any person must be disposed of |
18 | | within certain
required time limits under the Bank |
19 | | Holding Company Act of 1956.
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20 | | (B) For purposes of subparagraph (A) of this |
21 | | paragraph, the term
"bank" includes (i) any entity that |
22 | | is regulated by the Comptroller of the
Currency under |
23 | | the National Bank Act, or by the Federal Reserve Board, |
24 | | or by
the
Federal Deposit Insurance Corporation and |
25 | | (ii) any federally or State chartered
bank
operating as |
26 | | a credit card bank.
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1 | | (C) For purposes of subparagraph (A) of this |
2 | | paragraph, the term
"sales finance company" has the |
3 | | meaning provided in the following item (i) or
(ii):
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4 | | (i) A person primarily engaged in one or more |
5 | | of the following
businesses: the business of |
6 | | purchasing customer receivables, the business
of |
7 | | making loans upon the security of customer |
8 | | receivables, the
business of making loans for the |
9 | | express purpose of funding purchases of
tangible |
10 | | personal property or services by the borrower, or |
11 | | the business of
finance leasing. For purposes of |
12 | | this item (i), "customer receivable"
means:
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13 | | (a) a retail installment contract or |
14 | | retail charge agreement within
the
meaning
of |
15 | | the Sales Finance Agency Act, the Retail |
16 | | Installment Sales Act, or the
Motor Vehicle |
17 | | Retail Installment Sales Act;
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18 | | (b) an installment, charge, credit, or |
19 | | similar contract or agreement
arising from
the |
20 | | sale of tangible personal property or services |
21 | | in a transaction involving
a deferred payment |
22 | | price payable in one or more installments |
23 | | subsequent
to the sale; or
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24 | | (c) the outstanding balance of a contract |
25 | | or agreement described in
provisions
(a) or (b) |
26 | | of this item (i).
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1 | | A customer receivable need not provide for |
2 | | payment of interest on
deferred
payments. A sales |
3 | | finance company may purchase a customer receivable |
4 | | from, or
make a loan secured by a customer |
5 | | receivable to, the seller in the original
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6 | | transaction or to a person who purchased the |
7 | | customer receivable directly or
indirectly from |
8 | | that seller.
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9 | | (ii) A corporation meeting each of the |
10 | | following criteria:
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11 | | (a) the corporation must be a member of an |
12 | | "affiliated group" within
the
meaning of |
13 | | Section 1504(a) of the Internal Revenue Code, |
14 | | determined
without regard to Section 1504(b) |
15 | | of the Internal Revenue Code;
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16 | | (b) more than 50% of the gross income of |
17 | | the corporation for the
taxable
year
must be |
18 | | interest income derived from qualifying loans. |
19 | | A "qualifying
loan" is a loan made to a member |
20 | | of the corporation's affiliated group that
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21 | | originates customer receivables (within the |
22 | | meaning of item (i)) or to whom
customer |
23 | | receivables originated by a member of the |
24 | | affiliated group have been
transferred, to
the |
25 | | extent the average outstanding balance of |
26 | | loans from that corporation
to members of its |
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1 | | affiliated group during the taxable year do not |
2 | | exceed
the limitation amount for that |
3 | | corporation. The "limitation amount" for a
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4 | | corporation is the average outstanding |
5 | | balances during the taxable year of
customer |
6 | | receivables (within the meaning of item (i)) |
7 | | originated by
all members of the affiliated |
8 | | group.
If the average outstanding balances of |
9 | | the
loans made by a corporation to members of |
10 | | its affiliated group exceed the
limitation |
11 | | amount, the interest income of that |
12 | | corporation from qualifying
loans shall be |
13 | | equal to its interest income from loans to |
14 | | members of its
affiliated groups times a |
15 | | fraction equal to the limitation amount |
16 | | divided by
the average outstanding balances of |
17 | | the loans made by that corporation to
members |
18 | | of its affiliated group;
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19 | | (c) the total of all shareholder's equity |
20 | | (including, without
limitation,
paid-in
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21 | | capital on common and preferred stock and |
22 | | retained earnings) of the
corporation plus the |
23 | | total of all of its loans, advances, and other
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24 | | obligations payable or owed to members of its |
25 | | affiliated group may not
exceed 20% of the |
26 | | total assets of the corporation at any time |
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1 | | during the tax
year; and
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2 | | (d) more than 50% of all interest-bearing |
3 | | obligations of the
affiliated group payable to |
4 | | persons outside the group determined in |
5 | | accordance
with generally accepted accounting |
6 | | principles must be obligations of the
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7 | | corporation.
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8 | | This amendatory Act of the 91st General Assembly is |
9 | | declaratory of
existing
law.
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10 | | (D) Subparagraphs
(B) and (C) of this paragraph are |
11 | | declaratory of
existing law and apply retroactively, |
12 | | for all tax years beginning on or before
December 31, |
13 | | 1996,
to all original returns, to all amended returns |
14 | | filed no later than 30
days after the effective date of |
15 | | this amendatory Act of 1996, and to all
notices issued |
16 | | on or before the effective date of this amendatory Act |
17 | | of 1996
under subsection (a) of Section 903, subsection |
18 | | (a) of Section 904,
subsection (e) of Section 909, or |
19 | | Section 912.
A taxpayer that is a "financial |
20 | | organization" that engages in any transaction
with an |
21 | | affiliate shall be a "financial organization" for all |
22 | | purposes of this
Act.
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23 | | (E) For all tax years beginning on or
before |
24 | | December 31, 1996, a taxpayer that falls within the |
25 | | definition
of a
"financial organization" under |
26 | | subparagraphs (B) or (C) of this paragraph, but
who |
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1 | | does
not fall within the definition of a "financial |
2 | | organization" under the Proposed
Regulations issued by |
3 | | the Department of Revenue on July 19, 1996, may
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4 | | irrevocably elect to apply the Proposed Regulations |
5 | | for all of those years as
though the Proposed |
6 | | Regulations had been lawfully promulgated, adopted, |
7 | | and in
effect for all of those years. For purposes of |
8 | | applying subparagraphs (B) or
(C) of
this
paragraph to |
9 | | all of those years, the election allowed by this |
10 | | subparagraph
applies only to the taxpayer making the |
11 | | election and to those members of the
taxpayer's unitary |
12 | | business group who are ordinarily required to |
13 | | apportion
business income under the same subsection of |
14 | | Section 304 of this Act as the
taxpayer making the |
15 | | election. No election allowed by this subparagraph |
16 | | shall
be made under a claim
filed under subsection (d) |
17 | | of Section 909 more than 30 days after the
effective |
18 | | date of this amendatory Act of 1996.
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19 | | (F) Finance Leases. For purposes of this |
20 | | subsection, a finance lease
shall be treated as a loan |
21 | | or other extension of credit, rather than as a
lease,
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22 | | regardless of how the transaction is characterized for |
23 | | any other purpose,
including the purposes of any |
24 | | regulatory agency to which the lessor is subject.
A |
25 | | finance lease is any transaction in the form of a lease |
26 | | in which the lessee
is treated as the owner of the |
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1 | | leased asset entitled to any deduction for
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2 | | depreciation allowed under Section 167 of the Internal |
3 | | Revenue Code.
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4 | | (9) Fiscal year. The term "fiscal year" means an |
5 | | accounting period of
12 months ending on the last day of |
6 | | any month other than December.
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7 | | (9.5) Fixed place of business. The term "fixed place of |
8 | | business" has the same meaning as that term is given in |
9 | | Section 864 of the Internal Revenue Code and the related |
10 | | Treasury regulations.
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11 | | (10) Includes and including. The terms "includes" and |
12 | | "including" when
used in a definition contained in this Act |
13 | | shall not be deemed to exclude
other things otherwise |
14 | | within the meaning of the term defined.
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15 | | (11) Internal Revenue Code. The term "Internal Revenue |
16 | | Code" means the
United States Internal Revenue Code of 1954 |
17 | | or any successor law or laws
relating to federal income |
18 | | taxes in effect for the taxable year.
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19 | | (11.5) Investment partnership. |
20 | | (A) The term "investment partnership" means any |
21 | | entity that is treated as a partnership for federal |
22 | | income tax purposes that meets the following |
23 | | requirements: |
24 | | (i) no less than 90% of the partnership's cost |
25 | | of its total assets consists of qualifying |
26 | | investment securities, deposits at banks or other |
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1 | | financial institutions, and office space and |
2 | | equipment reasonably necessary to carry on its |
3 | | activities as an investment partnership; |
4 | | (ii) no less than 90% of its gross income |
5 | | consists of interest, dividends, and gains from |
6 | | the sale or exchange of qualifying investment |
7 | | securities; and
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8 | | (iii) the partnership is not a dealer in |
9 | | qualifying investment securities. |
10 | | (B) For purposes of this paragraph (11.5), the term |
11 | | "qualifying investment securities" includes all of the |
12 | | following:
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13 | | (i) common stock, including preferred or debt |
14 | | securities convertible into common stock, and |
15 | | preferred stock; |
16 | | (ii) bonds, debentures, and other debt |
17 | | securities; |
18 | | (iii) foreign and domestic currency deposits |
19 | | secured by federal, state, or local governmental |
20 | | agencies; |
21 | | (iv) mortgage or asset-backed securities |
22 | | secured by federal, state, or local governmental |
23 | | agencies; |
24 | | (v) repurchase agreements and loan |
25 | | participations; |
26 | | (vi) foreign currency exchange contracts and |
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1 | | forward and futures contracts on foreign |
2 | | currencies; |
3 | | (vii) stock and bond index securities and |
4 | | futures contracts and other similar financial |
5 | | securities and futures contracts on those |
6 | | securities;
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7 | | (viii) options for the purchase or sale of any |
8 | | of the securities, currencies, contracts, or |
9 | | financial instruments described in items (i) to |
10 | | (vii), inclusive;
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11 | | (ix) regulated futures contracts;
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12 | | (x) commodities (not described in Section |
13 | | 1221(a)(1) of the Internal Revenue Code) or |
14 | | futures, forwards, and options with respect to |
15 | | such commodities, provided, however, that any item |
16 | | of a physical commodity to which title is actually |
17 | | acquired in the partnership's capacity as a dealer |
18 | | in such commodity shall not be a qualifying |
19 | | investment security;
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20 | | (xi) derivatives; and
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21 | | (xii) a partnership interest in another |
22 | | partnership that is an investment partnership.
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23 | | (12) Mathematical error. The term "mathematical error" |
24 | | includes the
following types of errors, omissions, or |
25 | | defects in a return filed by a
taxpayer which prevents |
26 | | acceptance of the return as filed for processing:
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1 | | (A) arithmetic errors or incorrect computations on |
2 | | the return or
supporting schedules;
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3 | | (B) entries on the wrong lines;
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4 | | (C) omission of required supporting forms or |
5 | | schedules or the omission
of the information in whole |
6 | | or in part called for thereon; and
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7 | | (D) an attempt to claim, exclude, deduct, or |
8 | | improperly report, in a
manner
directly contrary to the |
9 | | provisions of the Act and regulations thereunder
any |
10 | | item of income, exemption, deduction, or credit.
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11 | | (13) Nonbusiness income. The term "nonbusiness income" |
12 | | means all income
other than business income or |
13 | | compensation.
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14 | | (14) Nonresident. The term "nonresident" means a |
15 | | person who is not a
resident.
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16 | | (15) Paid, incurred and accrued. The terms "paid", |
17 | | "incurred" and
"accrued"
shall be construed according to |
18 | | the method of accounting upon the basis
of which the |
19 | | person's base income is computed under this Act.
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20 | | (16) Partnership and partner. The term "partnership" |
21 | | includes a syndicate,
group, pool, joint venture or other |
22 | | unincorporated organization, through
or by means of which |
23 | | any business, financial operation, or venture is carried
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24 | | on, and which is not, within the meaning of this Act, a |
25 | | trust or estate
or a corporation; and the term "partner" |
26 | | includes a member in such syndicate,
group, pool, joint |
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1 | | venture or organization.
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2 | | The term "partnership" includes any entity, including |
3 | | a limited
liability company formed under the Illinois
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4 | | Limited Liability Company Act, classified as a partnership |
5 | | for federal income tax purposes.
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6 | | The term "partnership" does not include a syndicate, |
7 | | group, pool,
joint venture, or other unincorporated |
8 | | organization established for the
sole purpose of playing |
9 | | the Illinois State Lottery.
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10 | | (17) Part-year resident. The term "part-year resident" |
11 | | means an individual
who became a resident during the |
12 | | taxable year or ceased to be a resident
during the taxable |
13 | | year. Under Section 1501(a)(20)(A)(i) residence
commences |
14 | | with presence in this State for other than a temporary or |
15 | | transitory
purpose and ceases with absence from this State |
16 | | for other than a temporary or
transitory purpose. Under |
17 | | Section 1501(a)(20)(A)(ii) residence commences
with the |
18 | | establishment of domicile in this State and ceases with the
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19 | | establishment of domicile in another State.
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20 | | (18) Person. The term "person" shall be construed to |
21 | | mean and include
an individual, a trust, estate, |
22 | | partnership, association, firm, company,
corporation, |
23 | | limited liability company, or fiduciary. For purposes of |
24 | | Section
1301 and 1302 of this Act, a "person" means (i) an |
25 | | individual, (ii) a
corporation, (iii) an officer, agent, or |
26 | | employee of a
corporation, (iv) a member, agent or employee |
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1 | | of a partnership, or (v)
a member,
manager, employee, |
2 | | officer, director, or agent of a limited liability company
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3 | | who in such capacity commits an offense specified in |
4 | | Section 1301 and 1302.
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5 | | (18A) Records. The term "records" includes all data |
6 | | maintained by the
taxpayer, whether on paper, microfilm, |
7 | | microfiche, or any type of
machine-sensible data |
8 | | compilation.
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9 | | (19) Regulations. The term "regulations" includes |
10 | | rules promulgated and
forms prescribed by the Department.
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11 | | (20) Resident. The term "resident" means:
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12 | | (A) an individual (i) who is
in this State for |
13 | | other than a temporary or transitory purpose during the
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14 | | taxable year; or (ii) who is domiciled in this State |
15 | | but is absent from
the State for a temporary or |
16 | | transitory purpose during the taxable year;
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17 | | (B) The estate of a decedent who at his or her |
18 | | death was domiciled in
this
State;
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19 | | (C) A trust created by a will of a decedent who at |
20 | | his death was
domiciled
in this State; and
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21 | | (D) An irrevocable trust, the grantor of which was |
22 | | domiciled in this
State
at the time such trust became |
23 | | irrevocable. For purpose of this subparagraph,
a trust |
24 | | shall be considered irrevocable to the extent that the |
25 | | grantor is
not treated as the owner thereof under |
26 | | Sections 671 through 678 of the Internal
Revenue Code.
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1 | | (21) Sales. The term "sales" means all gross receipts |
2 | | of the taxpayer
not allocated under Sections 301, 302 and |
3 | | 303.
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4 | | (22) State. The term "state" when applied to a |
5 | | jurisdiction other than
this State means any state of the |
6 | | United States, the District of Columbia,
the Commonwealth |
7 | | of Puerto Rico, any Territory or Possession of the United
|
8 | | States, and any foreign country, or any political |
9 | | subdivision of any of the
foregoing. For purposes of the |
10 | | foreign tax credit under Section 601, the
term "state" |
11 | | means any state of the United States, the District of |
12 | | Columbia,
the Commonwealth of Puerto Rico, and any |
13 | | territory or possession of the
United States, or any |
14 | | political subdivision of any of the foregoing,
effective |
15 | | for tax years ending on or after December 31, 1989.
|
16 | | (23) Taxable year. The term "taxable year" means the |
17 | | calendar year, or
the fiscal year ending during such |
18 | | calendar year, upon the basis of which
the base income is |
19 | | computed under this Act. "Taxable year" means, in the
case |
20 | | of a return made for a fractional part of a year under the |
21 | | provisions
of this Act, the period for which such return is |
22 | | made.
|
23 | | (24) Taxpayer. The term "taxpayer" means any person |
24 | | subject to the tax
imposed by this Act.
|
25 | | (25) International banking facility. The term |
26 | | international banking
facility shall have the same meaning |
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1 | | as is set forth in the Illinois Banking
Act or as is set |
2 | | forth in the laws of the United States or regulations of
|
3 | | the Board of Governors of the Federal Reserve System.
|
4 | | (26) Income Tax Return Preparer.
|
5 | | (A) The term "income tax return preparer"
means any |
6 | | person who prepares for compensation, or who employs |
7 | | one or more
persons to prepare for compensation, any |
8 | | return of tax imposed by this Act
or any claim for |
9 | | refund of tax imposed by this Act. The preparation of a
|
10 | | substantial portion of a return or claim for refund |
11 | | shall be treated as
the preparation of that return or |
12 | | claim for refund.
|
13 | | (B) A person is not an income tax return preparer |
14 | | if all he or she does
is
|
15 | | (i) furnish typing, reproducing, or other |
16 | | mechanical assistance;
|
17 | | (ii) prepare returns or claims for refunds for |
18 | | the employer by whom he
or she is regularly and |
19 | | continuously employed;
|
20 | | (iii) prepare as a fiduciary returns or claims |
21 | | for refunds for any
person; or
|
22 | | (iv) prepare claims for refunds for a taxpayer |
23 | | in response to any
notice
of deficiency issued to |
24 | | that taxpayer or in response to any waiver of
|
25 | | restriction after the commencement of an audit of |
26 | | that taxpayer or of another
taxpayer if a |
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1 | | determination in the audit of the other taxpayer |
2 | | directly or
indirectly affects the tax liability |
3 | | of the taxpayer whose claims he or she is
|
4 | | preparing.
|
5 | | (27) Unitary business group. |
6 | | (A) The term "unitary business group" means
a group |
7 | | of persons related through common ownership whose |
8 | | business activities
are integrated with, dependent |
9 | | upon and contribute to each other. The group
will not |
10 | | include those members whose business activity outside |
11 | | the United
States is 80% or more of any such member's |
12 | | total business activity; for
purposes of this |
13 | | paragraph and clause (a)(3)(B)(ii) of Section 304,
|
14 | | business
activity within the United States shall be |
15 | | measured by means of the factors
ordinarily applicable |
16 | | under subsections (a), (b), (c), (d), or (h)
of Section
|
17 | | 304 except that, in the case of members ordinarily |
18 | | required to apportion
business income by means of the 3 |
19 | | factor formula of property, payroll and sales
|
20 | | specified in subsection (a) of Section 304, including |
21 | | the
formula as weighted in subsection (h) of Section |
22 | | 304, such members shall
not use the sales factor in the |
23 | | computation and the results of the property
and payroll |
24 | | factor computations of subsection (a) of Section 304 |
25 | | shall be
divided by 2 (by one if either
the property or |
26 | | payroll factor has a denominator of zero). The |
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1 | | computation
required by the preceding sentence shall, |
2 | | in each case, involve the division of
the member's |
3 | | property, payroll, or revenue miles in the United |
4 | | States,
insurance premiums on property or risk in the |
5 | | United States, or financial
organization business |
6 | | income from sources within the United States, as the
|
7 | | case may be, by the respective worldwide figures for |
8 | | such items. Common
ownership in the case of |
9 | | corporations is the direct or indirect control or
|
10 | | ownership of more than 50% of the outstanding voting |
11 | | stock of the persons
carrying on unitary business |
12 | | activity. Unitary business activity can
ordinarily be |
13 | | illustrated where the activities of the members are: |
14 | | (1) in the
same general line (such as manufacturing, |
15 | | wholesaling, retailing of tangible
personal property, |
16 | | insurance, transportation or finance); or (2) are |
17 | | steps in a
vertically structured enterprise or process |
18 | | (such as the steps involved in the
production of |
19 | | natural resources, which might include exploration, |
20 | | mining,
refining, and marketing); and, in either |
21 | | instance, the members are functionally
integrated |
22 | | through the exercise of strong centralized management |
23 | | (where, for
example, authority over such matters as |
24 | | purchasing, financing, tax compliance,
product line, |
25 | | personnel, marketing and capital investment is not |
26 | | left to each
member).
|
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1 | | (B) In no event, shall any
unitary business group |
2 | | include members
which are ordinarily required to |
3 | | apportion business income under different
subsections |
4 | | of Section 304 except that for tax years ending on or |
5 | | after
December 31, 1987 this prohibition shall not |
6 | | apply to a holding company that would otherwise be a |
7 | | member of a unitary business group with taxpayers that |
8 | | apportion business income under any of subsections |
9 | | (b), (c), (c-1), or (d) of Section 304. If a unitary |
10 | | business
group would, but for the preceding sentence, |
11 | | include members that are
ordinarily required to |
12 | | apportion business income under different subsections |
13 | | of
Section 304, then for each subsection of Section 304 |
14 | | for which there are two or
more members, there shall be |
15 | | a separate unitary business group composed of such
|
16 | | members. For purposes of the preceding two sentences, a |
17 | | member is "ordinarily
required to apportion business |
18 | | income" under a particular subsection of Section
304 if |
19 | | it would be required to use the apportionment method |
20 | | prescribed by such
subsection except for the fact that |
21 | | it derives business income solely from
Illinois. As |
22 | | used in this paragraph, the phrase "United States" |
23 | | means only the 50 states and the District of Columbia, |
24 | | but does not include any territory or possession of the |
25 | | United States or any area over which the United States |
26 | | has asserted jurisdiction or claimed exclusive rights |
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1 | | with respect to the exploration for or exploitation of |
2 | | natural resources.
|
3 | | (C) Holding companies. |
4 | | (i) For purposes of this subparagraph, a |
5 | | "holding company" is a corporation (other than a |
6 | | corporation that is a financial organization under |
7 | | paragraph (8) of this subsection (a) of Section |
8 | | 1501 because it is a bank holding company under the |
9 | | provisions of the Bank Holding Company Act of 1956 |
10 | | (12 U.S.C. 1841, et seq.) or because it is owned by |
11 | | a bank or a bank holding company) that owns a |
12 | | controlling interest in one or more other |
13 | | taxpayers ("controlled taxpayers"); that, during |
14 | | the period that includes the taxable year and the 2 |
15 | | immediately preceding taxable years or, if the |
16 | | corporation was formed during the current or |
17 | | immediately preceding taxable year, the taxable |
18 | | years in which the corporation has been in |
19 | | existence, derived substantially all its gross |
20 | | income from dividends, interest, rents, royalties, |
21 | | fees or other charges received from controlled |
22 | | taxpayers for the provision of services, and gains |
23 | | on the sale or other disposition of interests in |
24 | | controlled taxpayers or in property leased or |
25 | | licensed to controlled taxpayers or used by the |
26 | | taxpayer in providing services to controlled |
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1 | | taxpayers; and that incurs no substantial expenses |
2 | | other than expenses (including interest and other |
3 | | costs of borrowing) incurred in connection with |
4 | | the acquisition and holding of interests in |
5 | | controlled taxpayers and in the provision of |
6 | | services to controlled taxpayers or in the leasing |
7 | | or licensing of property to controlled taxpayers. |
8 | | (ii) The income of a holding company which is a |
9 | | member of more than one unitary business group |
10 | | shall be included in each unitary business group of |
11 | | which it is a member on a pro rata basis, by |
12 | | including in each unitary business group that |
13 | | portion of the base income of the holding company |
14 | | that bears the same proportion to the total base |
15 | | income of the holding company as the gross receipts |
16 | | of the unitary business group bears to the combined |
17 | | gross receipts of all unitary business groups (in |
18 | | both cases without regard to the holding company) |
19 | | or on any other reasonable basis, consistently |
20 | | applied. |
21 | | (iii) A holding company shall apportion its |
22 | | business income under the subsection of Section |
23 | | 304 used by the other members of its unitary |
24 | | business group. The apportionment factors of a |
25 | | holding company which would be a member of more |
26 | | than one unitary business group shall be included |
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1 | | with the apportionment factors of each unitary |
2 | | business group of which it is a member on a pro |
3 | | rata basis using the same method used in clause |
4 | | (ii). |
5 | | (iv) The provisions of this subparagraph (C) |
6 | | are intended to clarify existing law. |
7 | | (D) If including the base income and factors of a |
8 | | holding company in more than one unitary business group |
9 | | under subparagraph (C) does not fairly reflect the |
10 | | degree of integration between the holding company and |
11 | | one or more of the unitary business groups, the |
12 | | dependence of the holding company and one or more of |
13 | | the unitary business groups upon each other, or the |
14 | | contributions between the holding company and one or |
15 | | more of the unitary business groups, the holding |
16 | | company may petition the Director, under the |
17 | | procedures provided under Section 304(f), for |
18 | | permission to include all base income and factors of |
19 | | the holding company only with members of a unitary |
20 | | business group apportioning their business income |
21 | | under one subsection of subsections (a), (b), (c), or |
22 | | (d) of Section 304. If the petition is granted, the |
23 | | holding company shall be included in a unitary business |
24 | | group only with persons apportioning their business |
25 | | income under the selected subsection of Section 304 |
26 | | until the Director grants a petition of the holding |
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1 | | company either to be included in more than one unitary |
2 | | business group under subparagraph (C) or to include its |
3 | | base income and factors only with members of a unitary |
4 | | business group apportioning their business income |
5 | | under a different subsection of Section 304. |
6 | | (E) If the unitary business group members' |
7 | | accounting periods differ,
the common parent's |
8 | | accounting period or, if there is no common parent, the
|
9 | | accounting period of the member that is expected to |
10 | | have, on a recurring basis,
the greatest Illinois |
11 | | income tax liability must be used to determine whether |
12 | | to
use the apportionment method provided in subsection |
13 | | (a) or subsection (h) of
Section 304. The
prohibition |
14 | | against membership in a unitary business group for |
15 | | taxpayers
ordinarily required to apportion income |
16 | | under different subsections of Section
304 does not |
17 | | apply to taxpayers required to apportion income under |
18 | | subsection
(a) and subsection (h) of Section
304. The |
19 | | provisions of this amendatory Act of 1998 apply to tax
|
20 | | years ending on or after December 31, 1998.
|
21 | | (28) Subchapter S corporation. The term "Subchapter S |
22 | | corporation"
means a corporation for which there is in |
23 | | effect an election under Section
1362 of the Internal |
24 | | Revenue Code, or for which there is a federal election
to |
25 | | opt out of the provisions of the Subchapter S Revision Act |
26 | | of 1982 and
have applied instead the prior federal |
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1 | | Subchapter S rules as in effect on July
1, 1982.
|
2 | | (30) Foreign person. The term "foreign person" means |
3 | | any person who is a nonresident alien individual and any |
4 | | nonindividual entity, regardless of where created or |
5 | | organized, whose business activity outside the United |
6 | | States is 80% or more of the entity's total business |
7 | | activity.
|
8 | | (b) Other definitions.
|
9 | | (1) Words denoting number, gender, and so forth,
when |
10 | | used in this Act, where not otherwise distinctly expressed |
11 | | or manifestly
incompatible with the intent thereof:
|
12 | | (A) Words importing the singular include and apply |
13 | | to several persons,
parties or things;
|
14 | | (B) Words importing the plural include the |
15 | | singular; and
|
16 | | (C) Words importing the masculine gender include |
17 | | the feminine as well.
|
18 | | (2) "Company" or "association" as including successors |
19 | | and assigns. The
word "company" or "association", when used |
20 | | in reference to a corporation,
shall be deemed to embrace |
21 | | the words "successors and assigns of such company
or |
22 | | association", and in like manner as if these last-named |
23 | | words, or words
of similar import, were expressed.
|
24 | | (3) Other terms. Any term used in any Section of this |
25 | | Act with respect
to the application of, or in connection |
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1 | | with, the provisions of any other
Section of this Act shall |
2 | | have the same meaning as in such other Section.
|
3 | | (Source: P.A. 96-641, eff. 8-24-09; 97-507, eff. 8-23-11.)
|
4 | | Section 15-15. The Economic Development for a Growing |
5 | | Economy Tax Credit Act is amended by changing Section 5-15 as |
6 | | follows: |
7 | | (35 ILCS 10/5-15) |
8 | | Sec. 5-15. Tax Credit Awards. Subject to the conditions set |
9 | | forth in this
Act, a Taxpayer is
entitled to a Credit against |
10 | | or, as described in subsection (g) of this Section, a payment |
11 | | towards taxes imposed pursuant to subsections (a) and (b)
of |
12 | | Section 201 of the Illinois
Income Tax Act that may be imposed |
13 | | on the Taxpayer for a taxable year beginning
on or
after |
14 | | January 1, 1999,
if the Taxpayer is awarded a Credit by the |
15 | | Department under this Act for that
taxable year. |
16 | | (a) The Department shall make Credit awards under this Act |
17 | | to foster job
creation and retention in Illinois. |
18 | | (b) A person that proposes a project to create new jobs in |
19 | | Illinois must
enter into an Agreement with the
Department for |
20 | | the Credit under this Act. |
21 | | (c) The Credit shall be claimed for the taxable years |
22 | | specified in the
Agreement. |
23 | | (d) The Credit shall not exceed the Incremental Income Tax |
24 | | attributable to
the project that is the subject of the |
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1 | | Agreement. |
2 | | (e) Nothing herein shall prohibit a Tax Credit Award to an |
3 | | Applicant that uses a PEO if all other award criteria are |
4 | | satisfied.
|
5 | | (f) In lieu of the Credit allowed under this Act against |
6 | | the taxes imposed pursuant to subsections (a) and (b) of |
7 | | Section 201 of the Illinois Income Tax Act for any taxable year |
8 | | ending on or after December 31, 2009, the Taxpayer may elect to |
9 | | claim the Credit against its obligation to pay over withholding |
10 | | under Section 704A of the Illinois Income Tax Act. |
11 | | (1) The election under this subsection (f) may be made |
12 | | only by a Taxpayer that (i) is primarily engaged in one of |
13 | | the following business activities: water purification and |
14 | | treatment, motor vehicle metal stamping, automobile |
15 | | manufacturing, automobile and light duty motor vehicle |
16 | | manufacturing, motor vehicle manufacturing, light truck |
17 | | and utility vehicle manufacturing, heavy duty truck |
18 | | manufacturing, motor vehicle body manufacturing, cable |
19 | | television infrastructure design or manufacturing, or |
20 | | wireless telecommunication or computing terminal device |
21 | | design or manufacturing for use on public networks and (ii) |
22 | | meets the following criteria: |
23 | | (A) the Taxpayer (i) had an Illinois net loss or an |
24 | | Illinois net loss deduction under Section 207 of the |
25 | | Illinois Income Tax Act for the taxable year in which |
26 | | the Credit is awarded, (ii) employed a minimum of 1,000 |
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1 | | full-time employees in this State during the taxable |
2 | | year in which the Credit is awarded, (iii) has an |
3 | | Agreement under this Act on December 14, 2009 (the |
4 | | effective date of Public Act 96-834), and (iv) is in |
5 | | compliance with all provisions of that Agreement; |
6 | | (B) the Taxpayer (i) had an Illinois net loss or an |
7 | | Illinois net loss deduction under Section 207 of the |
8 | | Illinois Income Tax Act for the taxable year in which |
9 | | the Credit is awarded, (ii) employed a minimum of 1,000 |
10 | | full-time employees in this State during the taxable |
11 | | year in which the Credit is awarded, and (iii) has |
12 | | applied for an Agreement within 365 days after December |
13 | | 14, 2009 (the effective date of Public Act 96-834); |
14 | | (C) the Taxpayer (i) had an Illinois net operating |
15 | | loss carryforward under Section 207 of the Illinois |
16 | | Income Tax Act in a taxable year ending during calendar |
17 | | year 2008, (ii) has applied for an Agreement within 150 |
18 | | days after the effective date of this amendatory Act of |
19 | | the 96th General Assembly, (iii) creates at least 400 |
20 | | new jobs in Illinois, (iv) retains at least 2,000 jobs |
21 | | in Illinois that would have been at risk of relocation |
22 | | out of Illinois over a 10-year period, and (v) makes a |
23 | | capital investment of at least $75,000,000; |
24 | | (D) the Taxpayer (i) had an Illinois net operating |
25 | | loss carryforward under Section 207 of the Illinois |
26 | | Income Tax Act in a taxable year ending during calendar |
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1 | | year 2009, (ii) has applied for an Agreement within 150 |
2 | | days after the effective date of this amendatory Act of |
3 | | the 96th General Assembly, (iii) creates at least 150 |
4 | | new jobs, (iv) retains at least 1,000 jobs in Illinois |
5 | | that would have been at risk of relocation out of |
6 | | Illinois over a 10-year period, and (v) makes a capital |
7 | | investment of at least $57,000,000; or |
8 | | (E) the Taxpayer (i) employed at least 2,500 |
9 | | full-time employees in the State during the year in |
10 | | which the Credit is awarded, (ii) commits to make at |
11 | | least $500,000,000 in combined capital improvements |
12 | | and project costs under the Agreement, (iii) applies |
13 | | for an Agreement between January 1, 2011 and June 30, |
14 | | 2011, (iv) executes an Agreement for the Credit during |
15 | | calendar year 2011, and (v) was incorporated no more |
16 | | than 5 years before the filing of an application for an |
17 | | Agreement. |
18 | | (1.5) The election under this subsection (f) may also |
19 | | be made by a Taxpayer for any Credit awarded pursuant to an |
20 | | agreement that was executed between January 1, 2011 and |
21 | | June 30, 2011, if the Taxpayer (i) is primarily engaged in |
22 | | the manufacture of inner tubes or tires, or both, from |
23 | | natural and synthetic rubber, (ii) employs a minimum of |
24 | | 2,400 full-time employees in Illinois at the time of |
25 | | application, (iii) creates at least 350 full-time jobs and |
26 | | retains at least 250 full-time jobs in Illinois that would |
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1 | | have been at risk of being created or retained outside of |
2 | | Illinois, and (iv) makes a capital investment of at least |
3 | | $200,000,000 at the project location. |
4 | | (1.6) The election under this subsection (f) may also |
5 | | be made by a Taxpayer for any Credit awarded pursuant to an |
6 | | agreement that was executed within 150 days after the |
7 | | effective date of this amendatory Act of the 97th General |
8 | | Assembly, if the Taxpayer (i) is primarily engaged in the |
9 | | operation of a discount department store, (ii) maintains |
10 | | its corporate headquarters in Illinois, (iii) employs a |
11 | | minimum of 4,250 full-time employees at its corporate |
12 | | headquarters in Illinois at the time of application, (iv) |
13 | | retains at least 4,250 full-time jobs in Illinois that |
14 | | would have been at risk of being relocated outside of |
15 | | Illinois, (v) had a minimum of $40,000,000,000 in total |
16 | | revenue in 2010, and (vi) makes a capital investment of at |
17 | | least $300,000,000 at the project location. |
18 | | (1.7) Notwithstanding any other provision of law, the |
19 | | election under this subsection (f) may also be made by a |
20 | | Taxpayer for any Credit awarded pursuant to an agreement |
21 | | that was executed or applied for on or after July 1, 2011 |
22 | | and on or before March 31, 2012, if the Taxpayer is |
23 | | primarily engaged in the manufacture of original and |
24 | | aftermarket filtration parts and products for automobiles, |
25 | | motor vehicles, light duty motor vehicles, light trucks and |
26 | | utility vehicles, and heavy duty trucks, (ii) employs a |
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1 | | minimum of 1,000 full-time employees in Illinois at the |
2 | | time of application, (iii) creates at least 250 full-time |
3 | | jobs in Illinois, (iv) relocates its corporate |
4 | | headquarters to Illinois from another state, and (v) makes |
5 | | a capital investment of at least $4,000,000 at the project |
6 | | location. |
7 | | (2) An election under this subsection shall allow the |
8 | | credit to be taken against payments otherwise due under |
9 | | Section 704A of the Illinois Income Tax Act during the |
10 | | first calendar year beginning after the end of the taxable |
11 | | year in which the credit is awarded under this Act. |
12 | | (3) The election shall be made in the form and manner |
13 | | required by the Illinois Department of Revenue and, once |
14 | | made, shall be irrevocable. |
15 | | (4) If a Taxpayer who meets the requirements of |
16 | | subparagraph (A) of paragraph (1) of this subsection (f) |
17 | | elects to claim the Credit against its withholdings as |
18 | | provided in this subsection (f), then, on and after the |
19 | | date of the election, the terms of the Agreement between |
20 | | the Taxpayer and the Department may not be further amended |
21 | | during the term of the Agreement. |
22 | | (g) A pass-through entity that has been awarded a credit |
23 | | under this Act, its shareholders, or its partners may treat |
24 | | some or all of the credit awarded pursuant to this Act as a tax |
25 | | payment for purposes of the Illinois Income Tax Act. The term |
26 | | "tax payment" means a payment as described in Article 6 or |
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1 | | Article 8 of the Illinois Income Tax Act or a composite payment |
2 | | made by a pass-through entity on behalf of any of its |
3 | | shareholders or partners to satisfy such shareholders' or |
4 | | partners' taxes imposed pursuant to subsections (a) and (b) of |
5 | | Section 201 of the Illinois Income Tax Act. In no event shall |
6 | | the amount of the award credited pursuant to this Act exceed |
7 | | the Illinois income tax liability of the pass-through entity or |
8 | | its shareholders or partners for the taxable year. |
9 | | (Source: P.A. 96-834, eff. 12-14-09; 96-836, eff. 12-16-09; |
10 | | 96-905, eff. 6-4-10; 96-1000, eff. 7-2-10; 96-1534, eff. |
11 | | 3-4-11; 97-2, eff. 5-6-11.) |
12 | | Section 15-17. The Business Location Efficiency Incentive |
13 | | Act is amended by changing Section 25 as follows: |
14 | | (35 ILCS 11/25) |
15 | | (Section scheduled to be repealed on December 31, 2011)
|
16 | | Sec. 25. Repeal. This Act is repealed on December 31, 2016 |
17 | | 2011 .
|
18 | | (Source: P.A. 94-966, eff. 1-1-07.) |
19 | | Section 15-18. The Small Business Job Creation Tax Credit |
20 | | Act is amended by changing Sections 10 and 25 as follows: |
21 | | (35 ILCS 25/10)
|
22 | | Sec. 10. Definitions. In this Act: |
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1 | | "Applicant" means a person that is operating a business |
2 | | located within the State of Illinois that is engaged in |
3 | | interstate or intrastate commerce and either: |
4 | | (1) has no more than 50 full-time employees, without |
5 | | regard to the location of employment of such employees at |
6 | | the beginning of the incentive period; or |
7 | | (2) hired within the incentive period an employee who |
8 | | had participated as worker-trainee in the Put Illinois to |
9 | | Work Program during 2010. |
10 | | In the case of any person that is a member of a unitary |
11 | | business group within the meaning of subdivision (a)(27) of |
12 | | Section 1501 of the Illinois Income Tax Act, "applicant" refers |
13 | | to the unitary business group. |
14 | | "Certificate" means the tax credit certificate issued by |
15 | | the Department under Section 35 of this Act. |
16 | | "Certificate of eligibility" means the certificate issued |
17 | | by the Department under Section 20 of this Act. |
18 | | "Credit" means the amount awarded by the Department to an |
19 | | applicant by issuance of a certificate under Section 35 of this |
20 | | Act for each new full-time equivalent employee hired or job |
21 | | created. |
22 | | "Department" means the Department of Commerce and Economic |
23 | | Opportunity. |
24 | | "Director" means the Director of the Department. |
25 | | "Full-time employee" means an individual who is employed |
26 | | for a basic wage for at least 35 hours each week or who renders |
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1 | | any other standard of service generally accepted by industry |
2 | | custom or practice as full-time employment. |
3 | | "Incentive period" means the period beginning on July 1 and |
4 | | ending on June 30 of the following year. The first incentive |
5 | | period shall begin on July 1, 2010 and the last incentive |
6 | | period shall end ending on June 30, 2016 2011 . |
7 | | "Basic wage" means compensation for employment that is no |
8 | | less than $10 per hour or the equivalent salary for a new |
9 | | employee. |
10 | | "New employee" means a full-time employee: |
11 | | (1) who first became employed by an applicant with less |
12 | | than 50 full-time employees within the incentive period |
13 | | whose hire results in a net increase in the applicant's |
14 | | full-time Illinois employees and who is receiving a basic |
15 | | wage as compensation; or |
16 | | (2) who participated as a worker-trainee in the Put |
17 | | Illinois to Work Program during 2010 and who is |
18 | | subsequently hired during the incentive period by an |
19 | | applicant and who is receiving a basic wage as |
20 | | compensation. |
21 | | The term "new employee" does not include: |
22 | | (1) a person who was previously employed in Illinois by |
23 | | the applicant or a related member prior to the onset of the |
24 | | incentive period; or |
25 | | (2) any individual who has a direct or indirect |
26 | | ownership interest of at least 5% in the profits, capital, |
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1 | | or value of the applicant or a related member. |
2 | | "Noncompliance date" means, in the case of an applicant |
3 | | that is not complying with the requirements of the provisions |
4 | | of this Act, the day following the last date upon which the |
5 | | taxpayer was in compliance with the requirements of the |
6 | | provisions of this Act, as determined by the Director, pursuant |
7 | | to Section 45 of this Act. |
8 | | "Put Illinois to Work Program" means a worker training and |
9 | | employment program that was established by the State of |
10 | | Illinois with funding from the United States Department of |
11 | | Health and Human Services of Emergency Temporary Assistance to |
12 | | Needy Families funds authorized by the American Recovery and |
13 | | Reinvestment Act of 2009 (ARRA TANF Funds). These ARRA TANF |
14 | | funds were in turn used by the State of Illinois to fund the |
15 | | Put Illinois to Work Program. |
16 | | "Related member" means a person that, with respect to the |
17 | | applicant during any portion of the incentive period, is any |
18 | | one of the following, |
19 | | (1) An individual, if the individual and the members of |
20 | | the individual's family (as defined in Section 318 of the |
21 | | Internal Revenue Code) own directly, indirectly, |
22 | | beneficially, or constructively, in the aggregate, at |
23 | | least 50% of the value of the outstanding profits, capital, |
24 | | stock, or other ownership interest in the applicant. |
25 | | (2) A partnership, estate, or trust and any partner or |
26 | | beneficiary, if the partnership, estate, or trust and its |
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1 | | partners or beneficiaries own directly, indirectly, |
2 | | beneficially, or constructively, in the aggregate, at |
3 | | least 50% of the profits, capital, stock, or other |
4 | | ownership interest in the applicant. |
5 | | (3) A corporation, and any party related to the |
6 | | corporation in a manner that would require an attribution |
7 | | of stock from the corporation under the attribution rules |
8 | | of Section 318 of the Internal Revenue Code, if the |
9 | | applicant and any other related member own, in the |
10 | | aggregate, directly, indirectly, beneficially, or |
11 | | constructively, at least 50% of the value of the |
12 | | corporation's outstanding stock. |
13 | | (4) A corporation and any party related to that |
14 | | corporation in a manner that would require an attribution |
15 | | of stock from the corporation to the party or from the |
16 | | party to the corporation under the attribution rules of |
17 | | Section 318 of the Internal Revenue Code, if the |
18 | | corporation and all such related parties own, in the |
19 | | aggregate, at least 50% of the profits, capital, stock, or |
20 | | other ownership interest in the applicant. |
21 | | (5) A person to or from whom there is attribution of |
22 | | stock ownership in accordance with Section 1563(e) of the |
23 | | Internal Revenue Code, except that for purposes of |
24 | | determining whether a person is a related member under this |
25 | | paragraph, "20%" shall be substituted for "5%" whenever |
26 | | "5%" appears in Section 1563(e) of the Internal Revenue |
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1 | | Code.
|
2 | | (Source: P.A. 96-888, eff. 4-13-10; 96-1498, eff. 1-18-11.) |
3 | | (35 ILCS 25/25)
|
4 | | Sec. 25. Tax credit. |
5 | | (a) Subject to the conditions set forth in this Act, an |
6 | | applicant is entitled to a credit against payment of taxes |
7 | | withheld under Section 704A of the Illinois Income Tax Act: |
8 | | (1) for new employees who participated as |
9 | | worker-trainees in the Put Illinois to Work Program during |
10 | | 2010: |
11 | | (A) in the first calendar year ending on or after |
12 | | the date that is 6 months after December 31, 2010, or |
13 | | the date of hire, whichever is later. Under this |
14 | | subparagraph, the applicant is entitled to one-half of |
15 | | the credit allowable for each new employee who is |
16 | | employed for at least 6 months after the date of hire; |
17 | | and |
18 | | (B) in the first calendar year ending on or after |
19 | | the date that is 12 months after December 31, 2010, or |
20 | | the date of hire, whichever is later. Under this |
21 | | subparagraph, the applicant is entitled to one-half of |
22 | | the credit allowable for each new employee who is |
23 | | employed for at least 12 months after the date of hire; |
24 | | (2) for all other new employees, in the first calendar |
25 | | year ending on or after the date that is 12 months after |
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1 | | the date of hire of a new employee. The credit shall be |
2 | | allowed as a credit to an applicant for each full-time |
3 | | employee hired during the incentive period that results in |
4 | | a net increase in full-time Illinois employees, where the |
5 | | net increase in the employer's full-time Illinois |
6 | | employees is maintained for at least 12 months. |
7 | | (b) The Department shall make credit awards under this Act |
8 | | to further job creation. |
9 | | (c) The credit shall be claimed for the first calendar year |
10 | | ending on or after the date on which the certificate is issued |
11 | | by the Department. |
12 | | (d) The credit shall not exceed $2,500 per new employee |
13 | | hired. |
14 | | (e) The net increase in full-time Illinois employees, |
15 | | measured on an annual full-time equivalent basis, shall be the |
16 | | total number of full-time Illinois employees of the applicant |
17 | | on the final day of the incentive period June 30, 2011 , minus |
18 | | the number of full-time Illinois employees employed by the |
19 | | employer on the first day of that same incentive period July 1, |
20 | | 2010 . For purposes of the calculation, an employer that begins |
21 | | doing business in this State during the incentive period, as |
22 | | determined by the Director, shall be treated as having zero |
23 | | Illinois employees on the first day of the incentive period |
24 | | July 1, 2010 . |
25 | | (f) The net increase in the number of full-time Illinois |
26 | | employees of the applicant under subsection (e) must be |
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1 | | sustained continuously for at least 12 months, starting with |
2 | | the date of hire of a new employee during the incentive period. |
3 | | Eligibility for the credit does not depend on the continuous |
4 | | employment of any particular individual. For purposes of this |
5 | | subsection (f), if a new employee ceases to be employed before |
6 | | the completion of the 12-month period for any reason, the net |
7 | | increase in the number of full-time Illinois employees shall be |
8 | | treated as continuous if a different new employee is hired as a |
9 | | replacement within a reasonable time for the same position.
|
10 | | (Source: P.A. 96-888, eff. 4-13-10; 96-1498, eff. 1-18-11.) |
11 | | Section 15-20. The Use Tax Act is amended by changing |
12 | | Sections 3-5, 3-10, and 3-90 as follows:
|
13 | | (35 ILCS 105/3-5)
|
14 | | Sec. 3-5. Exemptions. Use of the following tangible |
15 | | personal property
is exempt from the tax imposed by this Act:
|
16 | | (1) Personal property purchased from a corporation, |
17 | | society, association,
foundation, institution, or |
18 | | organization, other than a limited liability
company, that is |
19 | | organized and operated as a not-for-profit service enterprise
|
20 | | for the benefit of persons 65 years of age or older if the |
21 | | personal property
was not purchased by the enterprise for the |
22 | | purpose of resale by the
enterprise.
|
23 | | (2) Personal property purchased by a not-for-profit |
24 | | Illinois county
fair association for use in conducting, |
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1 | | operating, or promoting the
county fair.
|
2 | | (3) Personal property purchased by a not-for-profit
arts or |
3 | | cultural organization that establishes, by proof required by |
4 | | the
Department by
rule, that it has received an exemption under |
5 | | Section 501(c)(3) of the Internal
Revenue Code and that is |
6 | | organized and operated primarily for the
presentation
or |
7 | | support of arts or cultural programming, activities, or |
8 | | services. These
organizations include, but are not limited to, |
9 | | music and dramatic arts
organizations such as symphony |
10 | | orchestras and theatrical groups, arts and
cultural service |
11 | | organizations, local arts councils, visual arts organizations,
|
12 | | and media arts organizations.
On and after the effective date |
13 | | of this amendatory Act of the 92nd General
Assembly, however, |
14 | | an entity otherwise eligible for this exemption shall not
make |
15 | | tax-free purchases unless it has an active identification |
16 | | number issued by
the Department.
|
17 | | (4) Personal property purchased by a governmental body, by |
18 | | a
corporation, society, association, foundation, or |
19 | | institution organized and
operated exclusively for charitable, |
20 | | religious, or educational purposes, or
by a not-for-profit |
21 | | corporation, society, association, foundation,
institution, or |
22 | | organization that has no compensated officers or employees
and |
23 | | that is organized and operated primarily for the recreation of |
24 | | persons
55 years of age or older. A limited liability company |
25 | | may qualify for the
exemption under this paragraph only if the |
26 | | limited liability company is
organized and operated |