98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB4490

 

Introduced , by Rep. Norine Hammond

 

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

    Amends the Illinois Income Tax Act. Extends the carryback and carryover periods for net losses by an additional 5 years.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5changing Section 207 as follows:
 
6    (35 ILCS 5/207)  (from Ch. 120, par. 2-207)
7    Sec. 207. Net Losses.
8    (a) If after applying all of the (i) modifications provided
9for in paragraph (2) of Section 203(b), paragraph (2) of
10Section 203(c) and paragraph (2) of Section 203(d) and (ii) the
11allocation and apportionment provisions of Article 3 of this
12Act and subsection (c) of this Section, the taxpayer's net
13income results in a loss;
14        (1) for any taxable year ending prior to December 31,
15    1999, such loss shall be allowed as a carryover or
16    carryback deduction in the manner allowed under Section 172
17    of the Internal Revenue Code;
18        (2) for any taxable year ending on or after December
19    31, 1999 and prior to December 31, 2003, such loss shall be
20    allowed as a carryback to each of the 7 2 taxable years
21    preceding the taxable year of such loss and shall be a net
22    operating loss carryover to each of the 25 20 taxable years
23    following the taxable year of such loss; and

 

 

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1        (3) for any taxable year ending on or after December
2    31, 2003, such loss shall be allowed as a net operating
3    loss carryover to each of the 17 12 taxable years following
4    the taxable year of such loss, except as provided in
5    subsection (d).
6    (a-5) Election to relinquish carryback and order of
7application of losses.
8            (A) For losses incurred in tax years ending prior
9        to December 31, 2003, the taxpayer may elect to
10        relinquish the entire carryback period with respect to
11        such loss. Such election shall be made in the form and
12        manner prescribed by the Department and shall be made
13        by the due date (including extensions of time) for
14        filing the taxpayer's return for the taxable year in
15        which such loss is incurred, and such election, once
16        made, shall be irrevocable.
17            (B) The entire amount of such loss shall be carried
18        to the earliest taxable year to which such loss may be
19        carried. The amount of such loss which shall be carried
20        to each of the other taxable years shall be the excess,
21        if any, of the amount of such loss over the sum of the
22        deductions for carryback or carryover of such loss
23        allowable for each of the prior taxable years to which
24        such loss may be carried.
25    (b) Any loss determined under subsection (a) of this
26Section must be carried back or carried forward in the same

 

 

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1manner for purposes of subsections (a) and (b) of Section 201
2of this Act as for purposes of subsections (c) and (d) of
3Section 201 of this Act.
4    (c) Notwithstanding any other provision of this Act, for
5each taxable year ending on or after December 31, 2008, for
6purposes of computing the loss for the taxable year under
7subsection (a) of this Section and the deduction taken into
8account for the taxable year for a net operating loss carryover
9under paragraphs (1), (2), and (3) of subsection (a) of this
10Section, the loss and net operating loss carryover shall be
11reduced in an amount equal to the reduction to the net
12operating loss and net operating loss carryover to the taxable
13year, respectively, required under Section 108(b)(2)(A) of the
14Internal Revenue Code, multiplied by a fraction, the numerator
15of which is the amount of discharge of indebtedness income that
16is excluded from gross income for the taxable year (but only if
17the taxable year ends on or after December 31, 2008) under
18Section 108(a) of the Internal Revenue Code and that would have
19been allocated and apportioned to this State under Article 3 of
20this Act but for that exclusion, and the denominator of which
21is the total amount of discharge of indebtedness income
22excluded from gross income under Section 108(a) of the Internal
23Revenue Code for the taxable year. The reduction required under
24this subsection (c) shall be made after the determination of
25Illinois net income for the taxable year in which the
26indebtedness is discharged.

 

 

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1    (d) In the case of a corporation (other than a Subchapter S
2corporation), no carryover deduction shall be allowed under
3this Section for any taxable year ending after December 31,
42010 and prior to December 31, 2012, and no carryover deduction
5shall exceed $100,000 for any taxable year ending on or after
6December 31, 2012 and prior to December 31, 2014; provided
7that, for purposes of determining the taxable years to which a
8net loss may be carried under subsection (a) of this Section,
9no taxable year for which a deduction is disallowed under this
10subsection, or for which the deduction would exceed $100,000 if
11not for this subsection, shall be counted.
12    (e) In the case of a residual interest holder in a real
13estate mortgage investment conduit subject to Section 860E of
14the Internal Revenue Code, the net loss in subsection (a) shall
15be equal to:
16        (1) the amount computed under subsection (a), without
17    regard to this subsection (e), or if that amount is
18    positive, zero;
19        (2) minus an amount equal to the amount computed under
20    subsection (a), without regard to this subsection (e),
21    minus the amount that would be computed under subsection
22    (a) if the taxpayer's federal taxable income were computed
23    without regard to Section 860E of the Internal Revenue Code
24    and without regard to this subsection (e).
25    The modification in this subsection (e) is exempt from the
26provisions of Section 250.

 

 

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1(Source: P.A. 96-1496, eff. 1-13-11; 97-507, eff. 8-23-11;
297-636, eff. 6-1-12.)