97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB1320

 

Introduced 2/8/2011, by Sen. Matt Murphy

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/201  from Ch. 120, par. 2-201
35 ILCS 5/804  from Ch. 120, par. 8-804
35 ILCS 5/901  from Ch. 120, par. 9-901

    Amends the Illinois Income Tax Act. Reduces the rates established under Public Act 96-1496 to (i) 3% for individuals, trusts, and estates and (ii) 4.8% for corporations. Makes corresponding changes in Sections concerning estimated taxes and distribution of proceeds into special funds. Effective immediately.


LRB097 07716 HLH 47827 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB1320LRB097 07716 HLH 47827 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5changing Sections 201, 804, and 901 as follows:
 
6    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
7    Sec. 201. Tax Imposed.
8    (a) In general. A tax measured by net income is hereby
9imposed on every individual, corporation, trust and estate for
10each taxable year ending after July 31, 1969 on the privilege
11of earning or receiving income in or as a resident of this
12State. Such tax shall be in addition to all other occupation or
13privilege taxes imposed by this State or by any municipal
14corporation or political subdivision thereof.
15    (b) Rates. The tax imposed by subsection (a) of this
16Section shall be determined as follows, except as adjusted by
17subsection (d-1):
18        (1) In the case of an individual, trust or estate, for
19    taxable years ending prior to July 1, 1989, an amount equal
20    to 2 1/2% of the taxpayer's net income for the taxable
21    year.
22        (2) In the case of an individual, trust or estate, for
23    taxable years beginning prior to July 1, 1989 and ending

 

 

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

 

 

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1    Section 202.5, and (ii) 3.75% of the taxpayer's net income
2    for the period after December 31, 2014, as calculated under
3    Section 202.5.
4        (5.2) (Blank). In the case of an individual, trust, or
5    estate, for taxable years beginning on or after January 1,
6    2015, and ending prior to January 1, 2025, an amount equal
7    to 3.75% of the taxpayer's net income for the taxable year.
8        (5.3) (Blank). In the case of an individual, trust, or
9    estate, for taxable years beginning prior to January 1,
10    2025, and ending after December 31, 2024, an amount equal
11    to the sum of (i) 3.75% of the taxpayer's net income for
12    the period prior to January 1, 2025, as calculated under
13    Section 202.5, and (ii) 3.25% of the taxpayer's net income
14    for the period after December 31, 2024, as calculated under
15    Section 202.5.
16        (5.4) (Blank). In the case of an individual, trust, or
17    estate, for taxable years beginning on or after January 1,
18    2025, an amount equal to 3.25% of the taxpayer's net income
19    for the taxable year.
20        (6) In the case of a corporation, for taxable years
21    ending prior to July 1, 1989, an amount equal to 4% of the
22    taxpayer's net income for the taxable year.
23        (7) In the case of a corporation, for taxable years
24    beginning prior to July 1, 1989 and ending after June 30,
25    1989, an amount equal to the sum of (i) 4% of the
26    taxpayer's net income for the period prior to July 1, 1989,

 

 

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

 

 

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1    years beginning on or after January 1, 2015, and ending
2    prior to January 1, 2025, an amount equal to 5.25% of the
3    taxpayer's net income for the taxable year.
4        (13) (Blank). In the case of a corporation, for taxable
5    years beginning prior to January 1, 2025, and ending after
6    December 31, 2024, an amount equal to the sum of (i) 5.25%
7    of the taxpayer's net income for the period prior to
8    January 1, 2025, as calculated under Section 202.5, and
9    (ii) 4.8% of the taxpayer's net income for the period after
10    December 31, 2024, as calculated under Section 202.5.
11        (14) (Blank). In the case of a corporation, for taxable
12    years beginning on or after January 1, 2025, an amount
13    equal to 4.8% of the taxpayer's net income for the taxable
14    year.
15    The rates under this subsection (b) are subject to the
16provisions of Section 201.5.
17    (b-5) It is the intention of the General Assembly that this
18amendatory Act of the 97th General Assembly supersedes Public
19Act 96-1496. The rates under subsection (b) shall be deemed to
20be 3% for individuals, trusts, and estates and 4.8% for
21corporations for the entire period beginning on the effective
22date of Public Act 96-1496 through the effective date of this
23amendatory Act of the 97th General Assembly and thereafter.
24    (c) Personal Property Tax Replacement Income Tax.
25Beginning on July 1, 1979 and thereafter, in addition to such
26income tax, there is also hereby imposed the Personal Property

 

 

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1Tax Replacement Income Tax measured by net income on every
2corporation (including Subchapter S corporations), partnership
3and trust, for each taxable year ending after June 30, 1979.
4Such taxes are imposed on the privilege of earning or receiving
5income in or as a resident of this State. The Personal Property
6Tax Replacement Income Tax shall be in addition to the income
7tax imposed by subsections (a) and (b) of this Section and in
8addition to all other occupation or privilege taxes imposed by
9this State or by any municipal corporation or political
10subdivision thereof.
11    (d) Additional Personal Property Tax Replacement Income
12Tax Rates. The personal property tax replacement income tax
13imposed by this subsection and subsection (c) of this Section
14in the case of a corporation, other than a Subchapter S
15corporation and except as adjusted by subsection (d-1), shall
16be an additional amount equal to 2.85% of such taxpayer's net
17income for the taxable year, except that beginning on January
181, 1981, and thereafter, the rate of 2.85% specified in this
19subsection shall be reduced to 2.5%, and in the case of a
20partnership, trust or a Subchapter S corporation shall be an
21additional amount equal to 1.5% of such taxpayer's net income
22for the taxable year.
23    (d-1) Rate reduction for certain foreign insurers. In the
24case of a foreign insurer, as defined by Section 35A-5 of the
25Illinois Insurance Code, whose state or country of domicile
26imposes on insurers domiciled in Illinois a retaliatory tax

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1            (E) has not previously been used in Illinois in
2        such a manner and by such a person as would qualify for
3        the credit provided by this subsection (e) or
4        subsection (f).
5        (3) For purposes of this subsection (e),
6    "manufacturing" means the material staging and production
7    of tangible personal property by procedures commonly
8    regarded as manufacturing, processing, fabrication, or
9    assembling which changes some existing material into new
10    shapes, new qualities, or new combinations. For purposes of
11    this subsection (e) the term "mining" shall have the same
12    meaning as the term "mining" in Section 613(c) of the
13    Internal Revenue Code. For purposes of this subsection (e),
14    the term "retailing" means the sale of tangible personal
15    property for use or consumption and not for resale, or
16    services rendered in conjunction with the sale of tangible
17    personal property for use or consumption and not for
18    resale. For purposes of this subsection (e), "tangible
19    personal property" has the same meaning as when that term
20    is used in the Retailers' Occupation Tax Act, and, for
21    taxable years ending after December 31, 2008, does not
22    include the generation, transmission, or distribution of
23    electricity.
24        (4) 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        (5) If the basis of the property for federal income tax
2    depreciation purposes is increased after it has been placed
3    in service in Illinois by the taxpayer, the amount of such
4    increase shall be deemed property placed in service on the
5    date of such increase in basis.
6        (6) The term "placed in service" shall have the same
7    meaning as under Section 46 of the Internal Revenue Code.
8        (7) If during any taxable year, any property ceases to
9    be qualified property in the hands of the taxpayer within
10    48 months after being placed in service, or the situs of
11    any qualified property is moved outside Illinois within 48
12    months after being placed in service, the Personal Property
13    Tax Replacement Income Tax for such taxable year shall be
14    increased. Such increase shall be determined by (i)
15    recomputing the investment credit which would have been
16    allowed for the year in which credit for such property was
17    originally allowed by eliminating such property from such
18    computation and, (ii) subtracting such recomputed credit
19    from the amount of credit previously allowed. For the
20    purposes of this paragraph (7), a reduction of the basis of
21    qualified property resulting from a redetermination of the
22    purchase price shall be deemed a disposition of qualified
23    property to the extent of such reduction.
24        (8) Unless the investment credit is extended by law,
25    the basis of qualified property shall not include costs
26    incurred after December 31, 2013, except for costs incurred

 

 

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1    pursuant to a binding contract entered into on or before
2    December 31, 2013.
3        (9) Each taxable year ending before December 31, 2000,
4    a partnership may elect to pass through to its partners the
5    credits to which the partnership is entitled under this
6    subsection (e) for the taxable year. A partner may use the
7    credit allocated to him or her under this paragraph only
8    against the tax imposed in subsections (c) and (d) of this
9    Section. If the partnership makes that election, those
10    credits shall be allocated among the partners in the
11    partnership in accordance with the rules set forth in
12    Section 704(b) of the Internal Revenue Code, and the rules
13    promulgated under that Section, and the allocated amount of
14    the credits shall be allowed to the partners for that
15    taxable year. The partnership shall make this election on
16    its Personal Property Tax Replacement Income Tax return for
17    that taxable year. The election to pass through the credits
18    shall be irrevocable.
19        For taxable years ending on or after December 31, 2000,
20    a partner that qualifies its partnership for a subtraction
21    under subparagraph (I) of paragraph (2) of subsection (d)
22    of Section 203 or a shareholder that qualifies a Subchapter
23    S corporation for a subtraction under subparagraph (S) of
24    paragraph (2) of subsection (b) of Section 203 shall be
25    allowed a credit under this subsection (e) equal to its
26    share of the credit earned under this subsection (e) during

 

 

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

 

 

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1    River Edge Redevelopment Zone and shall not be allowed to
2    the extent that it would reduce a taxpayer's liability for
3    the tax imposed by subsections (a) and (b) of this Section
4    to below zero. For tax years ending on or after December
5    31, 1985, the credit shall be allowed for the tax year in
6    which the property is placed in service, or, if the amount
7    of the credit exceeds the tax liability for that year,
8    whether it exceeds the original liability or the liability
9    as later amended, such excess may be carried forward and
10    applied to the tax liability of the 5 taxable years
11    following the excess credit year. The credit shall be
12    applied to the earliest year for which there is a
13    liability. If there is credit from more than one tax year
14    that is available to offset a liability, the credit
15    accruing first in time shall be applied first.
16        (2) The term qualified property means property which:
17            (A) is tangible, whether new or used, including
18        buildings and structural components of buildings;
19            (B) is depreciable pursuant to Section 167 of the
20        Internal Revenue Code, except that "3-year property"
21        as defined in Section 168(c)(2)(A) of that Code is not
22        eligible for the credit provided by this subsection
23        (f);
24            (C) is acquired by purchase as defined in Section
25        179(d) of the Internal Revenue Code;
26            (D) is used in the Enterprise Zone or River Edge

 

 

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

 

 

SB1320- 18 -LRB097 07716 HLH 47827 b

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

 

 

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1        (1) A taxpayer conducting a trade or business in an
2    enterprise zone or a High Impact Business designated by the
3    Department of Commerce and Economic Opportunity or for
4    taxable years ending on or after December 31, 2006, in a
5    River Edge Redevelopment Zone conducting a trade or
6    business in a federally designated Foreign Trade Zone or
7    Sub-Zone shall be allowed a credit against the tax imposed
8    by subsections (a) and (b) of this Section in the amount of
9    $500 per eligible employee hired to work in the zone during
10    the taxable year.
11        (2) To qualify for the credit:
12            (A) the taxpayer must hire 5 or more eligible
13        employees to work in an enterprise zone, River Edge
14        Redevelopment Zone, or federally designated Foreign
15        Trade Zone or Sub-Zone during the taxable year;
16            (B) the taxpayer's total employment within the
17        enterprise zone, River Edge Redevelopment Zone, or
18        federally designated Foreign Trade Zone or Sub-Zone
19        must increase by 5 or more full-time employees beyond
20        the total employed in that zone at the end of the
21        previous tax year for which a jobs tax credit under
22        this Section was taken, or beyond the total employed by
23        the taxpayer as of December 31, 1985, whichever is
24        later; and
25            (C) the eligible employees must be employed 180
26        consecutive days in order to be deemed hired for

 

 

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1        purposes of this subsection.
2        (3) An "eligible employee" means an employee who is:
3            (A) Certified by the Department of Commerce and
4        Economic Opportunity as "eligible for services"
5        pursuant to regulations promulgated in accordance with
6        Title II of the Job Training Partnership Act, Training
7        Services for the Disadvantaged or Title III of the Job
8        Training Partnership Act, Employment and Training
9        Assistance for Dislocated Workers Program.
10            (B) Hired after the enterprise zone, River Edge
11        Redevelopment Zone, or federally designated Foreign
12        Trade Zone or Sub-Zone was designated or the trade or
13        business was located in that zone, whichever is later.
14            (C) Employed in the enterprise zone, River Edge
15        Redevelopment Zone, or Foreign Trade Zone or Sub-Zone.
16        An employee is employed in an enterprise zone or
17        federally designated Foreign Trade Zone or Sub-Zone if
18        his services are rendered there or it is the base of
19        operations for the services performed.
20            (D) A full-time employee working 30 or more hours
21        per week.
22        (4) For tax years ending on or after December 31, 1985
23    and prior to December 31, 1988, the credit shall be allowed
24    for the tax year in which the eligible employees are hired.
25    For tax years ending on or after December 31, 1988, the
26    credit shall be allowed for the tax year immediately

 

 

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1    following the tax year in which the eligible employees are
2    hired. If the amount of the credit exceeds the tax
3    liability for that year, whether it exceeds the original
4    liability or the liability as later amended, such excess
5    may be carried forward and applied to the tax liability of
6    the 5 taxable years following the excess credit year. The
7    credit shall be applied to the earliest year for which
8    there is a liability. If there is credit from more than one
9    tax year that is available to offset a liability, earlier
10    credit shall be applied first.
11        (5) The Department of Revenue shall promulgate such
12    rules and regulations as may be deemed necessary to carry
13    out the purposes of this subsection (g).
14        (6) The credit shall be available for eligible
15    employees hired on or after January 1, 1986.
16    (h) Investment credit; High Impact Business.
17        (1) Subject to subsections (b) and (b-5) of Section 5.5
18    of the Illinois Enterprise Zone Act, a taxpayer shall be
19    allowed a credit against the tax imposed by subsections (a)
20    and (b) of this Section for investment in qualified
21    property which is placed in service by a Department of
22    Commerce and Economic Opportunity designated High Impact
23    Business. The credit shall be .5% of the basis for such
24    property. The credit shall not be available (i) until the
25    minimum investments in qualified property set forth in
26    subdivision (a)(3)(A) of Section 5.5 of the Illinois

 

 

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

 

 

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1    there is a liability. If there is credit from more than one
2    tax year that is available to offset a liability, the
3    credit accruing first in time shall be applied first.
4        Changes made in this subdivision (h)(1) by Public Act
5    88-670 restore changes made by Public Act 85-1182 and
6    reflect existing law.
7        (2) The term qualified property means property which:
8            (A) is tangible, whether new or used, including
9        buildings and structural components of buildings;
10            (B) is depreciable pursuant to Section 167 of the
11        Internal Revenue Code, except that "3-year property"
12        as defined in Section 168(c)(2)(A) of that Code is not
13        eligible for the credit provided by this subsection
14        (h);
15            (C) is acquired by purchase as defined in Section
16        179(d) of the Internal Revenue Code; and
17            (D) is not eligible for the Enterprise Zone
18        Investment Credit provided by subsection (f) of this
19        Section.
20        (3) The basis of qualified property shall be the basis
21    used to compute the depreciation deduction for federal
22    income tax purposes.
23        (4) If the basis of the property for federal income tax
24    depreciation purposes is increased after it has been placed
25    in service in a federally designated Foreign Trade Zone or
26    Sub-Zone located in Illinois by the taxpayer, the amount of

 

 

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

 

 

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1    the explicit terms and length of the contract under Section
2    18-183 of the Property Tax Code, the tax imposed under
3    subsections (a) and (b) of this Section shall be increased
4    for the taxable year in which the taxpayer relocated its
5    facility by an amount equal to the amount of credit
6    received by the taxpayer under this subsection (h).
7    (i) Credit for Personal Property Tax Replacement Income
8Tax. For tax years ending prior to December 31, 2003, a credit
9shall be allowed against the tax imposed by subsections (a) and
10(b) of this Section for the tax imposed by subsections (c) and
11(d) of this Section. This credit shall be computed by
12multiplying the tax imposed by subsections (c) and (d) of this
13Section by a fraction, the numerator of which is base income
14allocable to Illinois and the denominator of which is Illinois
15base income, and further multiplying the product by the tax
16rate imposed by subsections (a) and (b) of this Section.
17    Any credit earned on or after December 31, 1986 under this
18subsection which is unused in the year the credit is computed
19because it exceeds the tax liability imposed by subsections (a)
20and (b) for that year (whether it exceeds the original
21liability or the liability as later amended) may be carried
22forward and applied to the tax liability imposed by subsections
23(a) and (b) of the 5 taxable years following the excess credit
24year, provided that no credit may be carried forward to any
25year ending on or after December 31, 2003. This credit shall be
26applied first to the earliest year for which there is a

 

 

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1liability. If there is a credit under this subsection from more
2than one tax year that is available to offset a liability the
3earliest credit arising under this subsection shall be applied
4first.
5    If, during any taxable year ending on or after December 31,
61986, the tax imposed by subsections (c) and (d) of this
7Section for which a taxpayer has claimed a credit under this
8subsection (i) is reduced, the amount of credit for such tax
9shall also be reduced. Such reduction shall be determined by
10recomputing the credit to take into account the reduced tax
11imposed by subsections (c) and (d). If any portion of the
12reduced amount of credit has been carried to a different
13taxable year, an amended return shall be filed for such taxable
14year to reduce the amount of credit claimed.
15    (j) Training expense credit. Beginning with tax years
16ending on or after December 31, 1986 and prior to December 31,
172003, a taxpayer shall be allowed a credit against the tax
18imposed by subsections (a) and (b) under this Section for all
19amounts paid or accrued, on behalf of all persons employed by
20the taxpayer in Illinois or Illinois residents employed outside
21of Illinois by a taxpayer, for educational or vocational
22training in semi-technical or technical fields or semi-skilled
23or skilled fields, which were deducted from gross income in the
24computation of taxable income. The credit against the tax
25imposed by subsections (a) and (b) shall be 1.6% of such
26training expenses. For partners, shareholders of subchapter S

 

 

SB1320- 27 -LRB097 07716 HLH 47827 b

1corporations, and owners of limited liability companies, if the
2liability company is treated as a partnership for purposes of
3federal and State income taxation, there shall be allowed a
4credit under this subsection (j) to be determined in accordance
5with the determination of income and distributive share of
6income under Sections 702 and 704 and subchapter S of the
7Internal Revenue Code.
8    Any credit allowed under this subsection which is unused in
9the year the credit is earned may be carried forward to each of
10the 5 taxable years following the year for which the credit is
11first computed until it is used. This credit shall be applied
12first to the earliest year for which there is a liability. If
13there is a credit under this subsection from more than one tax
14year that is available to offset a liability the earliest
15credit arising under this subsection shall be applied first. No
16carryforward credit may be claimed in any tax year ending on or
17after December 31, 2003.
18    (k) Research and development credit.
19    For tax years ending after July 1, 1990 and prior to
20December 31, 2003, and beginning again for tax years ending on
21or after December 31, 2004, and ending prior to January 1,
222011, a taxpayer shall be allowed a credit against the tax
23imposed by subsections (a) and (b) of this Section for
24increasing research activities in this State. The credit
25allowed against the tax imposed by subsections (a) and (b)
26shall be equal to 6 1/2% of the qualifying expenditures for

 

 

SB1320- 28 -LRB097 07716 HLH 47827 b

1increasing research activities in this State. For partners,
2shareholders of subchapter S corporations, and owners of
3limited liability companies, if the liability company is
4treated as a partnership for purposes of federal and State
5income taxation, there shall be allowed a credit under this
6subsection to be determined in accordance with the
7determination of income and distributive share of income under
8Sections 702 and 704 and subchapter S of the Internal Revenue
9Code.
10    For purposes of this subsection, "qualifying expenditures"
11means the qualifying expenditures as defined for the federal
12credit for increasing research activities which would be
13allowable under Section 41 of the Internal Revenue Code and
14which are conducted in this State, "qualifying expenditures for
15increasing research activities in this State" means the excess
16of qualifying expenditures for the taxable year in which
17incurred over qualifying expenditures for the base period,
18"qualifying expenditures for the base period" means the average
19of the qualifying expenditures for each year in the base
20period, and "base period" means the 3 taxable years immediately
21preceding the taxable year for which the determination is being
22made.
23    Any credit in excess of the tax liability for the taxable
24year may be carried forward. A taxpayer may elect to have the
25unused credit shown on its final completed return carried over
26as a credit against the tax liability for the following 5

 

 

SB1320- 29 -LRB097 07716 HLH 47827 b

1taxable years or until it has been fully used, whichever occurs
2first; provided that no credit earned in a tax year ending
3prior to December 31, 2003 may be carried forward to any year
4ending on or after December 31, 2003, and no credit may be
5carried forward to any taxable year ending on or after January
61, 2011.
7    If an unused credit is carried forward to a given year from
82 or more earlier years, that credit arising in the earliest
9year will be applied first against the tax liability for the
10given year. If a tax liability for the given year still
11remains, the credit from the next earliest year will then be
12applied, and so on, until all credits have been used or no tax
13liability for the given year remains. Any remaining unused
14credit or credits then will be carried forward to the next
15following year in which a tax liability is incurred, except
16that no credit can be carried forward to a year which is more
17than 5 years after the year in which the expense for which the
18credit is given was incurred.
19    No inference shall be drawn from this amendatory Act of the
2091st General Assembly in construing this Section for taxable
21years beginning before January 1, 1999.
22    (l) Environmental Remediation Tax Credit.
23        (i) For tax years ending after December 31, 1997 and on
24    or before December 31, 2001, a taxpayer shall be allowed a
25    credit against the tax imposed by subsections (a) and (b)
26    of this Section for certain amounts paid for unreimbursed

 

 

SB1320- 30 -LRB097 07716 HLH 47827 b

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

 

 

SB1320- 31 -LRB097 07716 HLH 47827 b

1    deduction for losses by paragraphs (b), (c), and (f)(1) of
2    Section 267 of the Internal Revenue Code by virtue of being
3    a related taxpayer, as well as any of its partners. The
4    credit allowed against the tax imposed by subsections (a)
5    and (b) shall be equal to 25% of the unreimbursed eligible
6    remediation costs in excess of $100,000 per site, except
7    that the $100,000 threshold shall not apply to any site
8    contained in an enterprise zone as determined by the
9    Department of Commerce and Community Affairs (now
10    Department of Commerce and Economic Opportunity). The
11    total credit allowed shall not exceed $40,000 per year with
12    a maximum total of $150,000 per site. For partners and
13    shareholders of subchapter S corporations, there shall be
14    allowed a credit under this subsection to be determined in
15    accordance with the determination of income and
16    distributive share of income under Sections 702 and 704 and
17    subchapter S of the Internal Revenue Code.
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. The
22    term "unused credit" does not include any amounts of
23    unreimbursed eligible remediation costs in excess of the
24    maximum credit per site authorized under paragraph (i).
25    This credit shall be applied first to the earliest year for
26    which there is a liability. If there is a credit under this

 

 

SB1320- 32 -LRB097 07716 HLH 47827 b

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

 

 

SB1320- 33 -LRB097 07716 HLH 47827 b

1credit under this subsection claimed by a family that is the
2custodian of qualifying pupils exceed $500. In no event shall a
3credit under this subsection reduce the taxpayer's liability
4under this Act to less than zero. This subsection is exempt
5from the provisions of Section 250 of this Act.
6    For purposes of this subsection:
7    "Qualifying pupils" means individuals who (i) are
8residents of the State of Illinois, (ii) are under the age of
921 at the close of the school year for which a credit is
10sought, and (iii) during the school year for which a credit is
11sought were full-time pupils enrolled in a kindergarten through
12twelfth grade education program at any school, as defined in
13this subsection.
14    "Qualified education expense" means the amount incurred on
15behalf of a qualifying pupil in excess of $250 for tuition,
16book fees, and lab fees at the school in which the pupil is
17enrolled during the regular school year.
18    "School" means any public or nonpublic elementary or
19secondary school in Illinois that is in compliance with Title
20VI of the Civil Rights Act of 1964 and attendance at which
21satisfies the requirements of Section 26-1 of the School Code,
22except that nothing shall be construed to require a child to
23attend any particular public or nonpublic school to qualify for
24the credit under this Section.
25    "Custodian" means, with respect to qualifying pupils, an
26Illinois resident who is a parent, the parents, a legal

 

 

SB1320- 34 -LRB097 07716 HLH 47827 b

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

 

 

SB1320- 35 -LRB097 07716 HLH 47827 b

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

 

 

SB1320- 36 -LRB097 07716 HLH 47827 b

1    carry-forward period of the seller. To perfect the
2    transfer, the assignor shall record the transfer in the
3    chain of title for the site and provide written notice to
4    the Director of the Illinois Department of Revenue of the
5    assignor's intent to sell the remediation site and the
6    amount of the tax credit to be transferred as a portion of
7    the sale. In no event may a credit be transferred to any
8    taxpayer if the taxpayer or a related party would not be
9    eligible under the provisions of subsection (i).
10        (iii) For purposes of this Section, the term "site"
11    shall have the same meaning as under Section 58.2 of the
12    Environmental Protection Act.
13        (iv) This subsection is exempt from the provisions of
14    Section 250.
15(Source: P.A. 95-454, eff. 8-27-07; 96-115, eff. 7-31-09;
1696-116, eff. 7-31-09; 96-937, eff. 6-23-10; 96-1000, eff.
177-2-10; 96-1496, eff. 1-13-11.)
 
18    (35 ILCS 5/804)  (from Ch. 120, par. 8-804)
19    Sec. 804. Failure to Pay Estimated Tax.
20    (a) In general. In case of any underpayment of estimated
21tax by a taxpayer, except as provided in subsection (d) or (e),
22the taxpayer shall be liable to a penalty in an amount
23determined at the rate prescribed by Section 3-3 of the Uniform
24Penalty and Interest Act upon the amount of the underpayment
25(determined under subsection (b)) for each required

 

 

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1installment.
2    (b) Amount of underpayment. For purposes of subsection (a),
3the amount of the underpayment shall be the excess of:
4        (1) the amount of the installment which would be
5    required to be paid under subsection (c), over
6        (2) the amount, if any, of the installment paid on or
7    before the last date prescribed for payment.
8    (c) Amount of Required Installments.
9        (1) Amount.
10            (A) In General. Except as provided in paragraph
11        (2), the amount of any required installment shall be
12        25% of the required annual payment.
13            (B) Required Annual Payment. For purposes of
14        subparagraph (A), the term "required annual payment"
15        means the lesser of
16                (i) 90% of the tax shown on the return for the
17            taxable year, or if no return is filed, 90% of the
18            tax for such year, or
19                (ii) for installments due prior to February 1,
20            2011, and after January 31, 2012, 100% of the tax
21            shown on the return of the taxpayer for the
22            preceding taxable year if a return showing a
23            liability for tax was filed by the taxpayer for the
24            preceding taxable year and such preceding year was
25            a taxable year of 12 months. ; or
26                (iii) for installments due after January 31,

 

 

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1            2011, and prior to February 1, 2012, 150% of the
2            tax shown on the return of the taxpayer for the
3            preceding taxable year if a return showing a
4            liability for tax was filed by the taxpayer for the
5            preceding taxable year and such preceding year was
6            a taxable year of 12 months.
7        (2) Lower Required Installment where Annualized Income
8    Installment is Less Than Amount Determined Under Paragraph
9    (1).
10            (A) In General. In the case of any required
11        installment if a taxpayer establishes that the
12        annualized income installment is less than the amount
13        determined under paragraph (1),
14                (i) the amount of such required installment
15            shall be the annualized income installment, and
16                (ii) any reduction in a required installment
17            resulting from the application of this
18            subparagraph shall be recaptured by increasing the
19            amount of the next required installment determined
20            under paragraph (1) by the amount of such
21            reduction, and by increasing subsequent required
22            installments to the extent that the reduction has
23            not previously been recaptured under this clause.
24            (B) Determination of Annualized Income
25        Installment. In the case of any required installment,
26        the annualized income installment is the excess, if

 

 

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1        any, of
2                (i) an amount equal to the applicable
3            percentage of the tax for the taxable year computed
4            by placing on an annualized basis the net income
5            for months in the taxable year ending before the
6            due date for the installment, over
7                (ii) the aggregate amount of any prior
8            required installments for the taxable year.
9            (C) Applicable Percentage.
10        In the case of the followingThe applicable
11        required installments:percentage is:
12        1st ...............................22.5%
13        2nd ...............................45%
14        3rd ...............................67.5%
15        4th ...............................90%
16            (D) Annualized Net Income; Individuals. For
17        individuals, net income shall be placed on an
18        annualized basis by:
19                (i) multiplying by 12, or in the case of a
20            taxable year of less than 12 months, by the number
21            of months in the taxable year, the net income
22            computed without regard to the standard exemption
23            for the months in the taxable year ending before
24            the month in which the installment is required to
25            be paid;
26                (ii) dividing the resulting amount by the

 

 

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1            number of months in the taxable year ending before
2            the month in which such installment date falls; and
3                (iii) deducting from such amount the standard
4            exemption allowable for the taxable year, such
5            standard exemption being determined as of the last
6            date prescribed for payment of the installment.
7            (E) Annualized Net Income; Corporations. For
8        corporations, net income shall be placed on an
9        annualized basis by multiplying by 12 the taxable
10        income
11                (i) for the first 3 months of the taxable year,
12            in the case of the installment required to be paid
13            in the 4th month,
14                (ii) for the first 3 months or for the first 5
15            months of the taxable year, in the case of the
16            installment required to be paid in the 6th month,
17                (iii) for the first 6 months or for the first 8
18            months of the taxable year, in the case of the
19            installment required to be paid in the 9th month,
20            and
21                (iv) for the first 9 months or for the first 11
22            months of the taxable year, in the case of the
23            installment required to be paid in the 12th month
24            of the taxable year,
25        then dividing the resulting amount by the number of
26        months in the taxable year (3, 5, 6, 8, 9, or 11 as the

 

 

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1        case may be).
2    (d) Exceptions. Notwithstanding the provisions of the
3preceding subsections, the penalty imposed by subsection (a)
4shall not be imposed if the taxpayer was not required to file
5an Illinois income tax return for the preceding taxable year,
6or, for individuals, if the taxpayer had no tax liability for
7the preceding taxable year and such year was a taxable year of
812 months. The penalty imposed by subsection (a) shall also not
9be imposed on any underpayments of estimated tax due before the
10effective date of this amendatory Act of 1998 which
11underpayments are solely attributable to the change in
12apportionment from subsection (a) to subsection (h) of Section
13304. The provisions of this amendatory Act of 1998 apply to tax
14years ending on or after December 31, 1998.
15    (e) The penalty imposed for underpayment of estimated tax
16by subsection (a) of this Section shall not be imposed to the
17extent that the Director or his or her designate determines,
18pursuant to Section 3-8 of the Uniform Penalty and Interest Act
19that the penalty should not be imposed.
20    (f) Definition of tax. For purposes of subsections (b) and
21(c), the term "tax" means the excess of the tax imposed under
22Article 2 of this Act, over the amounts credited against such
23tax under Sections 601(b) (3) and (4).
24    (g) Application of Section in case of tax withheld under
25Article 7. For purposes of applying this Section:
26        (1) in the case of an individual, tax withheld from

 

 

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1    compensation for the taxable year shall be deemed a payment
2    of estimated tax, and an equal part of such amount shall be
3    deemed paid on each installment date for such taxable year,
4    unless the taxpayer establishes the dates on which all
5    amounts were actually withheld, in which case the amounts
6    so withheld shall be deemed payments of estimated tax on
7    the dates on which such amounts were actually withheld;
8        (2) amounts timely paid by a partnership, Subchapter S
9    corporation, or trust on behalf of a partner, shareholder,
10    or beneficiary pursuant to subsection (f) of Section 502 or
11    Section 709.5 and claimed as a payment of estimated tax
12    shall be deemed a payment of estimated tax made on the last
13    day of the taxable year of the partnership, Subchapter S
14    corporation, or trust for which the income from the
15    withholding is made was computed; and
16        (3) all other amounts pursuant to Article 7 shall be
17    deemed a payment of estimated tax on the date the payment
18    is made to the taxpayer of the amount from which the tax is
19    withheld.
20    (g-5) Amounts withheld under the State Salary and Annuity
21Withholding Act. An individual who has amounts withheld under
22paragraph (10) of Section 4 of the State Salary and Annuity
23Withholding Act may elect to have those amounts treated as
24payments of estimated tax made on the dates on which those
25amounts are actually withheld.
26    (i) Short taxable year. The application of this Section to

 

 

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1taxable years of less than 12 months shall be in accordance
2with regulations prescribed by the Department.
3    The changes in this Section made by Public Act 84-127 shall
4apply to taxable years ending on or after January 1, 1986.
5(Source: P.A. 95-233, eff. 8-16-07; 96-1496, eff. 1-13-11.)
 
6    (35 ILCS 5/901)  (from Ch. 120, par. 9-901)
7    Sec. 901. Collection Authority.
8    (a) In general.
9    The Department shall collect the taxes imposed by this Act.
10The Department shall collect certified past due child support
11amounts under Section 2505-650 of the Department of Revenue Law
12(20 ILCS 2505/2505-650). Except as provided in subsections (c),
13(e), (f), and (g) of this Section, money collected pursuant to
14subsections (a) and (b) of Section 201 of this Act shall be
15paid into the General Revenue Fund in the State treasury; money
16collected pursuant to subsections (c) and (d) of Section 201 of
17this Act shall be paid into the Personal Property Tax
18Replacement Fund, a special fund in the State Treasury; and
19money collected under Section 2505-650 of the Department of
20Revenue Law (20 ILCS 2505/2505-650) shall be paid into the
21Child Support Enforcement Trust Fund, a special fund outside
22the State Treasury, or to the State Disbursement Unit
23established under Section 10-26 of the Illinois Public Aid
24Code, as directed by the Department of Healthcare and Family
25Services.

 

 

SB1320- 44 -LRB097 07716 HLH 47827 b

1    (b) Local Government Distributive Fund.
2    Beginning August 1, 1969, and continuing through June 30,
31994, the Treasurer shall transfer each month from the General
4Revenue Fund to a special fund in the State treasury, to be
5known as the "Local Government Distributive Fund", an amount
6equal to 1/12 of the net revenue realized from the tax imposed
7by subsections (a) and (b) of Section 201 of this Act during
8the preceding month. Beginning July 1, 1994, and continuing
9through June 30, 1995, the Treasurer shall transfer each month
10from the General Revenue Fund to the Local Government
11Distributive Fund an amount equal to 1/11 of the net revenue
12realized from the tax imposed by subsections (a) and (b) of
13Section 201 of this Act during the preceding month. Beginning
14July 1, 1995 and continuing through January 31, 2011, the
15Treasurer shall transfer each month from the General Revenue
16Fund to the Local Government Distributive Fund an amount equal
17to the net of (i) 1/10 of the net revenue realized from the tax
18imposed by subsections (a) and (b) of Section 201 of the
19Illinois Income Tax Act during the preceding month (ii) minus,
20beginning July 1, 2003 and ending June 30, 2004, $6,666,666,
21and beginning July 1, 2004, zero. Beginning February 1, 2011,
22and continuing through the first day of the first month to
23occur not less than 30 days after the effective date of this
24amendatory Act of the 97th General Assembly January 31, 2015,
25the Treasurer shall transfer each month from the General
26Revenue Fund to the Local Government Distributive Fund an

 

 

SB1320- 45 -LRB097 07716 HLH 47827 b

1amount equal to the sum of (i) 6% (10% of the ratio of the 3%
2individual income tax rate prior to 2011 to the 5% individual
3income tax rate after 2010) of the net revenue realized from
4the tax imposed by subsections (a) and (b) of Section 201 of
5this Act upon individuals, trusts, and estates during the
6preceding month and (ii) 6.86% (10% of the ratio of the 4.8%
7corporate income tax rate prior to 2011 to the 7% corporate
8income tax rate after 2010) of the net revenue realized from
9the tax imposed by subsections (a) and (b) of Section 201 of
10this Act upon corporations during the preceding month.
11Beginning on the first day of the first month to occur not less
12than 30 days after the effective date of this amendatory Act of
13the 97th General Assembly, the State Comptroller shall order
14transferred and the State Treasurer shall transfer each month
15from the General Revenue Fund to the Local Government
16Distributive Fund an amount equal to 1/10 of the net revenue
17realized from the tax imposed by subsections (a) and (b) of
18Section 201 of the Illinois Income Tax Act during the preceding
19month. Beginning February 1, 2015 and continuing through
20January 31, 2025, the Treasurer shall transfer each month from
21the General Revenue Fund to the Local Government Distributive
22Fund an amount equal to the sum of (i) 8% (10% of the ratio of
23the 3% individual income tax rate prior to 2011 to the 3.75%
24individual income tax rate after 2014) of the net revenue
25realized from the tax imposed by subsections (a) and (b) of
26Section 201 of this Act upon individuals, trusts, and estates

 

 

SB1320- 46 -LRB097 07716 HLH 47827 b

1during the preceding month and (ii) 9.14% (10% of the ratio of
2the 4.8% corporate income tax rate prior to 2011 to the 5.25%
3corporate income tax rate after 2014) of the net revenue
4realized from the tax imposed by subsections (a) and (b) of
5Section 201 of this Act upon corporations during the preceding
6month. Beginning February 1, 2025, the Treasurer shall transfer
7each month from the General Revenue Fund to the Local
8Government Distributive Fund an amount equal to the sum of (i)
99.23% (10% of the ratio of the 3% individual income tax rate
10prior to 2011 to the 3.25% individual income tax rate after
112024) of the net revenue realized from the tax imposed by
12subsections (a) and (b) of Section 201 of this Act upon
13individuals, trusts, and estates during the preceding month and
14(ii) 10% of the net revenue realized from the tax imposed by
15subsections (a) and (b) of Section 201 of this Act upon
16corporations during the preceding month. Net revenue realized
17for a month shall be defined as the revenue from the tax
18imposed by subsections (a) and (b) of Section 201 of this Act
19which is deposited in the General Revenue Fund, the Education
20Assistance Fund, the Income Tax Surcharge Local Government
21Distributive Fund, the Fund for the Advancement of Education,
22and the Commitment to Human Services Fund during the month
23minus the amount paid out of the General Revenue Fund in State
24warrants during that same month as refunds to taxpayers for
25overpayment of liability under the tax imposed by subsections
26(a) and (b) of Section 201 of this Act.

 

 

SB1320- 47 -LRB097 07716 HLH 47827 b

1    (c) Deposits Into Income Tax Refund Fund.
2        (1) Beginning on January 1, 1989 and thereafter, the
3    Department shall deposit a percentage of the amounts
4    collected pursuant to subsections (a) and (b)(1), (2), and
5    (3), of Section 201 of this Act into a fund in the State
6    treasury known as the Income Tax Refund Fund. The
7    Department shall deposit 6% of such amounts during the
8    period beginning January 1, 1989 and ending on June 30,
9    1989. Beginning with State fiscal year 1990 and for each
10    fiscal year thereafter, the percentage deposited into the
11    Income Tax Refund Fund during a fiscal year shall be the
12    Annual Percentage. For fiscal years 1999 through 2001, the
13    Annual Percentage shall be 7.1%. For fiscal year 2003, the
14    Annual Percentage shall be 8%. For fiscal year 2004, the
15    Annual Percentage shall be 11.7%. Upon the effective date
16    of this amendatory Act of the 93rd General Assembly, the
17    Annual Percentage shall be 10% for fiscal year 2005. For
18    fiscal year 2006, the Annual Percentage shall be 9.75%. For
19    fiscal year 2007, the Annual Percentage shall be 9.75%. For
20    fiscal year 2008, the Annual Percentage shall be 7.75%. For
21    fiscal year 2009, the Annual Percentage shall be 9.75%. For
22    fiscal year 2010, the Annual Percentage shall be 9.75%. For
23    fiscal year 2011, the Annual Percentage shall be 8.75%. For
24    all other fiscal years, the Annual Percentage shall be
25    calculated as a fraction, the numerator of which shall be
26    the amount of refunds approved for payment by the

 

 

SB1320- 48 -LRB097 07716 HLH 47827 b

1    Department during the preceding fiscal year as a result of
2    overpayment of tax liability under subsections (a) and
3    (b)(1), (2), and (3) of Section 201 of this Act plus the
4    amount of such refunds remaining approved but unpaid at the
5    end of the preceding fiscal year, minus the amounts
6    transferred into the Income Tax Refund Fund from the
7    Tobacco Settlement Recovery Fund, and the denominator of
8    which shall be the amounts which will be collected pursuant
9    to subsections (a) and (b)(1), (2), and (3) of Section 201
10    of this Act during the preceding fiscal year; except that
11    in State fiscal year 2002, the Annual Percentage shall in
12    no event exceed 7.6%. The Director of Revenue shall certify
13    the Annual Percentage to the Comptroller on the last
14    business day of the fiscal year immediately preceding the
15    fiscal year for which it is to be effective.
16        (2) Beginning on January 1, 1989 and thereafter, the
17    Department shall deposit a percentage of the amounts
18    collected pursuant to subsections (a) and (b)(6), (7), and
19    (8), (c) and (d) of Section 201 of this Act into a fund in
20    the State treasury known as the Income Tax Refund Fund. The
21    Department shall deposit 18% of such amounts during the
22    period beginning January 1, 1989 and ending on June 30,
23    1989. Beginning with State fiscal year 1990 and for each
24    fiscal year thereafter, the percentage deposited into the
25    Income Tax Refund Fund during a fiscal year shall be the
26    Annual Percentage. For fiscal years 1999, 2000, and 2001,

 

 

SB1320- 49 -LRB097 07716 HLH 47827 b

1    the Annual Percentage shall be 19%. For fiscal year 2003,
2    the Annual Percentage shall be 27%. For fiscal year 2004,
3    the Annual Percentage shall be 32%. Upon the effective date
4    of this amendatory Act of the 93rd General Assembly, the
5    Annual Percentage shall be 24% for fiscal year 2005. For
6    fiscal year 2006, the Annual Percentage shall be 20%. For
7    fiscal year 2007, the Annual Percentage shall be 17.5%. For
8    fiscal year 2008, the Annual Percentage shall be 15.5%. For
9    fiscal year 2009, the Annual Percentage shall be 17.5%. For
10    fiscal year 2010, the Annual Percentage shall be 17.5%. For
11    fiscal year 2011, the Annual Percentage shall be 17.5%. For
12    all other fiscal years, the Annual Percentage shall be
13    calculated as a fraction, the numerator of which shall be
14    the amount of refunds approved for payment by the
15    Department during the preceding fiscal year as a result of
16    overpayment of tax liability under subsections (a) and
17    (b)(6), (7), and (8), (c) and (d) of Section 201 of this
18    Act plus the amount of such refunds remaining approved but
19    unpaid at the end of the preceding fiscal year, and the
20    denominator of which shall be the amounts which will be
21    collected pursuant to subsections (a) and (b)(6), (7), and
22    (8), (c) and (d) of Section 201 of this Act during the
23    preceding fiscal year; except that in State fiscal year
24    2002, the Annual Percentage shall in no event exceed 23%.
25    The Director of Revenue shall certify the Annual Percentage
26    to the Comptroller on the last business day of the fiscal

 

 

SB1320- 50 -LRB097 07716 HLH 47827 b

1    year immediately preceding the fiscal year for which it is
2    to be effective.
3        (3) The Comptroller shall order transferred and the
4    Treasurer shall transfer from the Tobacco Settlement
5    Recovery Fund to the Income Tax Refund Fund (i) $35,000,000
6    in January, 2001, (ii) $35,000,000 in January, 2002, and
7    (iii) $35,000,000 in January, 2003.
8    (d) Expenditures from Income Tax Refund Fund.
9        (1) Beginning January 1, 1989, money in the Income Tax
10    Refund Fund shall be expended exclusively for the purpose
11    of paying refunds resulting from overpayment of tax
12    liability under Section 201 of this Act, for paying rebates
13    under Section 208.1 in the event that the amounts in the
14    Homeowners' Tax Relief Fund are insufficient for that
15    purpose, and for making transfers pursuant to this
16    subsection (d).
17        (2) The Director shall order payment of refunds
18    resulting from overpayment of tax liability under Section
19    201 of this Act from the Income Tax Refund Fund only to the
20    extent that amounts collected pursuant to Section 201 of
21    this Act and transfers pursuant to this subsection (d) and
22    item (3) of subsection (c) have been deposited and retained
23    in the Fund.
24        (3) As soon as possible after the end of each fiscal
25    year, the Director shall order transferred and the State
26    Treasurer and State Comptroller shall transfer from the

 

 

SB1320- 51 -LRB097 07716 HLH 47827 b

1    Income Tax Refund Fund to the Personal Property Tax
2    Replacement Fund an amount, certified by the Director to
3    the Comptroller, equal to the excess of the amount
4    collected pursuant to subsections (c) and (d) of Section
5    201 of this Act deposited into the Income Tax Refund Fund
6    during the fiscal year over the amount of refunds resulting
7    from overpayment of tax liability under subsections (c) and
8    (d) of Section 201 of this Act paid from the Income Tax
9    Refund Fund during the fiscal year.
10        (4) As soon as possible after the end of each fiscal
11    year, the Director shall order transferred and the State
12    Treasurer and State Comptroller shall transfer from the
13    Personal Property Tax Replacement Fund to the Income Tax
14    Refund Fund an amount, certified by the Director to the
15    Comptroller, equal to the excess of the amount of refunds
16    resulting from overpayment of tax liability under
17    subsections (c) and (d) of Section 201 of this Act paid
18    from the Income Tax Refund Fund during the fiscal year over
19    the amount collected pursuant to subsections (c) and (d) of
20    Section 201 of this Act deposited into the Income Tax
21    Refund Fund during the fiscal year.
22        (4.5) As soon as possible after the end of fiscal year
23    1999 and of each fiscal year thereafter, the Director shall
24    order transferred and the State Treasurer and State
25    Comptroller shall transfer from the Income Tax Refund Fund
26    to the General Revenue Fund any surplus remaining in the

 

 

SB1320- 52 -LRB097 07716 HLH 47827 b

1    Income Tax Refund Fund as of the end of such fiscal year;
2    excluding for fiscal years 2000, 2001, and 2002 amounts
3    attributable to transfers under item (3) of subsection (c)
4    less refunds resulting from the earned income tax credit.
5        (5) This Act shall constitute an irrevocable and
6    continuing appropriation from the Income Tax Refund Fund
7    for the purpose of paying refunds upon the order of the
8    Director in accordance with the provisions of this Section.
9    (e) Deposits into the Education Assistance Fund and the
10Income Tax Surcharge Local Government Distributive Fund.
11    On July 1, 1991, and thereafter, of the amounts collected
12pursuant to subsections (a) and (b) of Section 201 of this Act,
13minus deposits into the Income Tax Refund Fund, the Department
14shall deposit 7.3% into the Education Assistance Fund in the
15State Treasury. Beginning July 1, 1991, and continuing through
16January 31, 1993, of the amounts collected pursuant to
17subsections (a) and (b) of Section 201 of the Illinois Income
18Tax Act, minus deposits into the Income Tax Refund Fund, the
19Department shall deposit 3.0% into the Income Tax Surcharge
20Local Government Distributive Fund in the State Treasury.
21Beginning February 1, 1993 and continuing through June 30,
221993, of the amounts collected pursuant to subsections (a) and
23(b) of Section 201 of the Illinois Income Tax Act, minus
24deposits into the Income Tax Refund Fund, the Department shall
25deposit 4.4% into the Income Tax Surcharge Local Government
26Distributive Fund in the State Treasury. Beginning July 1,

 

 

SB1320- 53 -LRB097 07716 HLH 47827 b

11993, and continuing through June 30, 1994, of the amounts
2collected under subsections (a) and (b) of Section 201 of this
3Act, minus deposits into the Income Tax Refund Fund, the
4Department shall deposit 1.475% into the Income Tax Surcharge
5Local Government Distributive Fund in the State Treasury.
6    (f) Deposits into the Fund for the Advancement of
7Education. Beginning February 1, 2015, the Department shall
8deposit the following portions of the revenue realized from the
9tax imposed upon individuals, trusts, and estates by
10subsections (a) and (b) of Section 201 of this Act during the
11preceding month, minus deposits into the Income Tax Refund
12Fund, into the Fund for the Advancement of Education:
13        (1) beginning February 1, 2015, and prior to February
14    1, 2025, 1/30; and
15        (2) beginning February 1, 2025, 1/26.
16    If the rate of tax imposed by subsection (a) and (b) of
17Section 201 is reduced pursuant to Section 201.5 of this Act,
18the Department shall not make the deposits required by this
19subsection (f) on or after the effective date of the reduction.
20    (g) Deposits into the Commitment to Human Services Fund.
21Beginning February 1, 2015, the Department shall deposit the
22following portions of the revenue realized from the tax imposed
23upon individuals, trusts, and estates by subsections (a) and
24(b) of Section 201 of this Act during the preceding month,
25minus deposits into the Income Tax Refund Fund, into the
26Commitment to Human Services Fund:

 

 

SB1320- 54 -LRB097 07716 HLH 47827 b

1        (1) beginning February 1, 2015, and prior to February
2    1, 2025, 1/30; and
3        (2) beginning February 1, 2025, 1/26.
4    If the rate of tax imposed by subsection (a) and (b) of
5Section 201 is reduced pursuant to Section 201.5 of this Act,
6the Department shall not make the deposits required by this
7subsection (g) on or after the effective date of the reduction.
8(Source: P.A. 95-707, eff. 1-11-08; 95-744, eff. 7-18-08;
996-45, eff. 7-15-09; 96-328, eff. 8-11-09; 96-959, eff. 7-1-10;
1096-1496, eff. 1-13-11.)
 
11    Section 99. Effective date. This Act takes effect upon
12becoming law.