Illinois General Assembly - Full Text of HB0392
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Full Text of HB0392  102nd General Assembly

HB0392 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB0392

 

Introduced 2/8/2021, by Rep. Martin J. Moylan

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/201

    Amends the Illinois Income Tax Act. Provides that a taxpayer shall be allowed an income tax credit in an amount equal to 1.3% of the qualified research expenses made by the taxpayer in Illinois. Provides that the taxpayer is not required to have obtained a research and development credit with respect to his or her federal income taxes to qualify for the Illinois research and development credit.


LRB102 03939 HLH 13955 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB0392LRB102 03939 HLH 13955 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5changing Section 201 as follows:
 
6    (35 ILCS 5/201)
7    (Text of Section without the changes made by P.A. 101-8,
8which did not take effect (see Section 99 of P.A. 101-8))
9    Sec. 201. Tax imposed.
10    (a) In general. A tax measured by net income is hereby
11imposed on every individual, corporation, trust and estate for
12each taxable year ending after July 31, 1969 on the privilege
13of earning or receiving income in or as a resident of this
14State. Such tax shall be in addition to all other occupation or
15privilege taxes imposed by this State or by any municipal
16corporation or political subdivision thereof.
17    (b) Rates. The tax imposed by subsection (a) of this
18Section shall be determined as follows, except as adjusted by
19subsection (d-1):
20        (1) In the case of an individual, trust or estate, for
21    taxable years ending prior to July 1, 1989, an amount
22    equal to 2 1/2% of the taxpayer's net income for the
23    taxable year.

 

 

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

 

 

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1    to January 1, 2015, as calculated under Section 202.5, and
2    (ii) 3.75% of the taxpayer's net income for the period
3    after December 31, 2014, as calculated under Section
4    202.5.
5        (5.2) In the case of an individual, trust, or estate,
6    for taxable years beginning on or after January 1, 2015,
7    and ending prior to July 1, 2017, an amount equal to 3.75%
8    of the taxpayer's net income for the taxable year.
9        (5.3) In the case of an individual, trust, or estate,
10    for taxable years beginning prior to July 1, 2017, and
11    ending after June 30, 2017, an amount equal to the sum of
12    (i) 3.75% of the taxpayer's net income for the period
13    prior to July 1, 2017, as calculated under Section 202.5,
14    and (ii) 4.95% of the taxpayer's net income for the period
15    after June 30, 2017, as calculated under Section 202.5.
16        (5.4) In the case of an individual, trust, or estate,
17    for taxable years beginning on or after July 1, 2017, an
18    amount equal to 4.95% of the taxpayer's net income for the
19    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,

 

 

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1    1989, as calculated under Section 202.3, and (ii) 4.8% of
2    the taxpayer's net income for the period after June 30,
3    1989, 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) In the case of a corporation, for taxable years
9    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) In the case of a corporation, for taxable years
16    beginning on or after January 1, 2011, and ending prior to
17    January 1, 2015, an amount equal to 7% of the taxpayer's
18    net income for the taxable year.
19        (11) In the case of a corporation, for taxable years
20    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) In the case of a corporation, for taxable years

 

 

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1    beginning on or after January 1, 2015, and ending prior to
2    July 1, 2017, an amount equal to 5.25% of the taxpayer's
3    net income for the taxable year.
4        (13) In the case of a corporation, for taxable years
5    beginning prior to July 1, 2017, and ending after June 30,
6    2017, an amount equal to the sum of (i) 5.25% of the
7    taxpayer's net income for the period prior to July 1,
8    2017, as calculated under Section 202.5, and (ii) 7% of
9    the taxpayer's net income for the period after June 30,
10    2017, as calculated under Section 202.5.
11        (14) In the case of a corporation, for taxable years
12    beginning on or after July 1, 2017, an amount equal to 7%
13    of the taxpayer's net income for the taxable year.
14    The rates under this subsection (b) are subject to the
15provisions of Section 201.5.
16    (b-5) Surcharge; sale or exchange of assets, properties,
17and intangibles of organization gaming licensees. For each of
18taxable years 2019 through 2027, a surcharge is imposed on all
19taxpayers on income arising from the sale or exchange of
20capital assets, depreciable business property, real property
21used in the trade or business, and Section 197 intangibles (i)
22of an organization licensee under the Illinois Horse Racing
23Act of 1975 and (ii) of an organization gaming licensee under
24the Illinois Gambling Act. The amount of the surcharge is
25equal to the amount of federal income tax liability for the
26taxable year attributable to those sales and exchanges. The

 

 

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1surcharge imposed shall not apply if:
2        (1) the organization gaming license, organization
3    license, or racetrack property is transferred as a result
4    of any of the following:
5            (A) bankruptcy, a receivership, or a debt
6        adjustment initiated by or against the initial
7        licensee or the substantial owners of the initial
8        licensee;
9            (B) cancellation, revocation, or termination of
10        any such license by the Illinois Gaming Board or the
11        Illinois Racing Board;
12            (C) a determination by the Illinois Gaming Board
13        that transfer of the license is in the best interests
14        of Illinois gaming;
15            (D) the death of an owner of the equity interest in
16        a licensee;
17            (E) the acquisition of a controlling interest in
18        the stock or substantially all of the assets of a
19        publicly traded company;
20            (F) a transfer by a parent company to a wholly
21        owned subsidiary; or
22            (G) the transfer or sale to or by one person to
23        another person where both persons were initial owners
24        of the license when the license was issued; or
25        (2) the controlling interest in the organization
26    gaming license, organization license, or racetrack

 

 

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1    property is transferred in a transaction to lineal
2    descendants in which no gain or loss is recognized or as a
3    result of a transaction in accordance with Section 351 of
4    the Internal Revenue Code in which no gain or loss is
5    recognized; or
6        (3) live horse racing was not conducted in 2010 at a
7    racetrack located within 3 miles of the Mississippi River
8    under a license issued pursuant to the Illinois Horse
9    Racing Act of 1975.
10    The transfer of an organization gaming license,
11organization license, or racetrack property by a person other
12than the initial licensee to receive the organization gaming
13license is not subject to a surcharge. The Department shall
14adopt rules necessary to implement and administer this
15subsection.
16    (c) Personal Property Tax Replacement Income Tax.
17Beginning on July 1, 1979 and thereafter, in addition to such
18income tax, there is also hereby imposed the Personal Property
19Tax Replacement Income Tax measured by net income on every
20corporation (including Subchapter S corporations), partnership
21and trust, for each taxable year ending after June 30, 1979.
22Such taxes are imposed on the privilege of earning or
23receiving income in or as a resident of this State. The
24Personal Property Tax Replacement Income Tax shall be in
25addition to the income tax imposed by subsections (a) and (b)
26of this Section and in addition to all other occupation or

 

 

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1privilege taxes imposed by this State or by any municipal
2corporation or political subdivision thereof.
3    (d) Additional Personal Property Tax Replacement Income
4Tax Rates. The personal property tax replacement income tax
5imposed by this subsection and subsection (c) of this Section
6in the case of a corporation, other than a Subchapter S
7corporation and except as adjusted by subsection (d-1), shall
8be an additional amount equal to 2.85% of such taxpayer's net
9income for the taxable year, except that beginning on January
101, 1981, and thereafter, the rate of 2.85% specified in this
11subsection shall be reduced to 2.5%, and in the case of a
12partnership, trust or a Subchapter S corporation shall be an
13additional amount equal to 1.5% of such taxpayer's net income
14for the taxable year.
15    (d-1) Rate reduction for certain foreign insurers. In the
16case of a foreign insurer, as defined by Section 35A-5 of the
17Illinois Insurance Code, whose state or country of domicile
18imposes on insurers domiciled in Illinois a retaliatory tax
19(excluding any insurer whose premiums from reinsurance assumed
20are 50% or more of its total insurance premiums as determined
21under paragraph (2) of subsection (b) of Section 304, except
22that for purposes of this determination premiums from
23reinsurance do not include premiums from inter-affiliate
24reinsurance arrangements), beginning with taxable years ending
25on or after December 31, 1999, the sum of the rates of tax
26imposed by subsections (b) and (d) shall be reduced (but not

 

 

HB0392- 9 -LRB102 03939 HLH 13955 b

1increased) to the rate at which the total amount of tax imposed
2under this Act, net of all credits allowed under this Act,
3shall equal (i) the total amount of tax that would be imposed
4on the foreign insurer's net income allocable to Illinois for
5the taxable year by such foreign insurer's state or country of
6domicile if that net income were subject to all income taxes
7and taxes measured by net income imposed by such foreign
8insurer's state or country of domicile, net of all credits
9allowed or (ii) a rate of zero if no such tax is imposed on
10such income by the foreign insurer's state of domicile. For
11the purposes of this subsection (d-1), an inter-affiliate
12includes a mutual insurer under common management.
13        (1) For the purposes of subsection (d-1), in no event
14    shall the sum of the rates of tax imposed by subsections
15    (b) and (d) be reduced below the rate at which the sum of:
16            (A) the total amount of tax imposed on such
17        foreign insurer under this Act for a taxable year, net
18        of all credits allowed under this Act, plus
19            (B) the privilege tax imposed by Section 409 of
20        the Illinois Insurance Code, the fire insurance
21        company tax imposed by Section 12 of the Fire
22        Investigation Act, and the fire department taxes
23        imposed under Section 11-10-1 of the Illinois
24        Municipal Code,
25    equals 1.25% for taxable years ending prior to December
26    31, 2003, or 1.75% for taxable years ending on or after

 

 

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1    December 31, 2003, of the net taxable premiums written for
2    the taxable year, as described by subsection (1) of
3    Section 409 of the Illinois Insurance Code. This paragraph
4    will in no event increase the rates imposed under
5    subsections (b) and (d).
6        (2) Any reduction in the rates of tax imposed by this
7    subsection shall be applied first against the rates
8    imposed by subsection (b) and only after the tax imposed
9    by subsection (a) net of all credits allowed under this
10    Section other than the credit allowed under subsection (i)
11    has been reduced to zero, against the rates imposed by
12    subsection (d).
13    This subsection (d-1) is exempt from the provisions of
14Section 250.
15    (e) Investment credit. A taxpayer shall be allowed a
16credit against the Personal Property Tax Replacement Income
17Tax for investment in qualified property.
18        (1) A taxpayer shall be allowed a credit equal to .5%
19    of the basis of qualified property placed in service
20    during the taxable year, provided such property is placed
21    in service on or after July 1, 1984. There shall be allowed
22    an additional credit equal to .5% of the basis of
23    qualified property placed in service during the taxable
24    year, provided such property is placed in service on or
25    after July 1, 1986, and the taxpayer's base employment
26    within Illinois has increased by 1% or more over the

 

 

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1    preceding year as determined by the taxpayer's employment
2    records filed with the Illinois Department of Employment
3    Security. Taxpayers who are new to Illinois shall be
4    deemed to have met the 1% growth in base employment for the
5    first year in which they file employment records with the
6    Illinois Department of Employment Security. The provisions
7    added to this Section by Public Act 85-1200 (and restored
8    by Public Act 87-895) shall be construed as declaratory of
9    existing law and not as a new enactment. If, in any year,
10    the increase in base employment within Illinois over the
11    preceding year is less than 1%, the additional credit
12    shall be limited to that percentage times a fraction, the
13    numerator of which is .5% and the denominator of which is
14    1%, but shall not exceed .5%. The investment credit shall
15    not be allowed to the extent that it would reduce a
16    taxpayer's liability in any tax year below zero, nor may
17    any credit for qualified property be allowed for any year
18    other than the year in which the property was placed in
19    service in Illinois. For tax years ending on or after
20    December 31, 1987, and on or before December 31, 1988, the
21    credit shall be allowed for the tax year in which the
22    property is placed in service, or, if the amount of the
23    credit exceeds the tax liability for that year, whether it
24    exceeds the original liability or the liability as later
25    amended, such excess may be carried forward and applied to
26    the tax liability of the 5 taxable years following the

 

 

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

 

 

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1        buildings and structural components of buildings and
2        signs that are real property, but not including land
3        or improvements to real property that are not a
4        structural component of a building such as
5        landscaping, sewer lines, local access roads, fencing,
6        parking lots, and other appurtenances;
7            (B) is depreciable pursuant to Section 167 of the
8        Internal Revenue Code, except that "3-year property"
9        as defined in Section 168(c)(2)(A) of that Code is not
10        eligible for the credit provided by this subsection
11        (e);
12            (C) is acquired by purchase as defined in Section
13        179(d) of the Internal Revenue Code;
14            (D) is used in Illinois by a taxpayer who is
15        primarily engaged in manufacturing, or in mining coal
16        or fluorite, or in retailing, or was placed in service
17        on or after July 1, 2006 in a River Edge Redevelopment
18        Zone established pursuant to the River Edge
19        Redevelopment Zone Act; and
20            (E) has not previously been used in Illinois in
21        such a manner and by such a person as would qualify for
22        the credit provided by this subsection (e) or
23        subsection (f).
24        (3) For purposes of this subsection (e),
25    "manufacturing" means the material staging and production
26    of tangible personal property by procedures commonly

 

 

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1    regarded as manufacturing, processing, fabrication, or
2    assembling which changes some existing material into new
3    shapes, new qualities, or new combinations. For purposes
4    of this subsection (e) the term "mining" shall have the
5    same meaning as the term "mining" in Section 613(c) of the
6    Internal Revenue Code. For purposes of this subsection
7    (e), the term "retailing" means the sale of tangible
8    personal property for use or consumption and not for
9    resale, or services rendered in conjunction with the sale
10    of tangible personal property for use or consumption and
11    not for resale. For purposes of this subsection (e),
12    "tangible personal property" has the same meaning as when
13    that term is used in the Retailers' Occupation Tax Act,
14    and, for taxable years ending after December 31, 2008,
15    does not include the generation, transmission, or
16    distribution of electricity.
17        (4) The basis of qualified property shall be the basis
18    used to compute the depreciation deduction for federal
19    income tax purposes.
20        (5) If the basis of the property for federal income
21    tax depreciation purposes is increased after it has been
22    placed in service in Illinois by the taxpayer, the amount
23    of such increase shall be deemed property placed in
24    service on the date of such increase in basis.
25        (6) The term "placed in service" shall have the same
26    meaning as under Section 46 of the Internal Revenue Code.

 

 

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1        (7) If during any taxable year, any property ceases to
2    be qualified property in the hands of the taxpayer within
3    48 months after being placed in service, or the situs of
4    any qualified property is moved outside Illinois within 48
5    months after being placed in service, the Personal
6    Property Tax Replacement Income Tax for such taxable year
7    shall be increased. Such increase shall be determined by
8    (i) recomputing the investment credit which would have
9    been allowed for the year in which credit for such
10    property was originally allowed by eliminating such
11    property from such computation and, (ii) subtracting such
12    recomputed credit from the amount of credit previously
13    allowed. For the purposes of this paragraph (7), a
14    reduction of the basis of qualified property resulting
15    from a redetermination of the purchase price shall be
16    deemed a disposition of qualified property to the extent
17    of such reduction.
18        (8) Unless the investment credit is extended by law,
19    the basis of qualified property shall not include costs
20    incurred after December 31, 2018, except for costs
21    incurred pursuant to a binding contract entered into on or
22    before December 31, 2018.
23        (9) Each taxable year ending before December 31, 2000,
24    a partnership may elect to pass through to its partners
25    the credits to which the partnership is entitled under
26    this subsection (e) for the taxable year. A partner may

 

 

HB0392- 16 -LRB102 03939 HLH 13955 b

1    use the credit allocated to him or her under this
2    paragraph only against the tax imposed in subsections (c)
3    and (d) of this Section. If the partnership makes that
4    election, those credits shall be allocated among the
5    partners in the partnership in accordance with the rules
6    set forth in Section 704(b) of the Internal Revenue Code,
7    and the rules promulgated under that Section, and the
8    allocated amount of the credits shall be allowed to the
9    partners for that taxable year. The partnership shall make
10    this election on its Personal Property Tax Replacement
11    Income Tax return for that taxable year. The election to
12    pass through the credits shall be irrevocable.
13        For taxable years ending on or after December 31,
14    2000, a partner that qualifies its partnership for a
15    subtraction under subparagraph (I) of paragraph (2) of
16    subsection (d) of Section 203 or a shareholder that
17    qualifies a Subchapter S corporation for a subtraction
18    under subparagraph (S) of paragraph (2) of subsection (b)
19    of Section 203 shall be allowed a credit under this
20    subsection (e) equal to its share of the credit earned
21    under this subsection (e) during the taxable year by the
22    partnership or Subchapter S corporation, determined in
23    accordance with the determination of income and
24    distributive share of income under Sections 702 and 704
25    and Subchapter S of the Internal Revenue Code. This
26    paragraph is exempt from the provisions of Section 250.

 

 

HB0392- 17 -LRB102 03939 HLH 13955 b

1    (f) Investment credit; Enterprise Zone; River Edge
2Redevelopment Zone.
3        (1) A taxpayer shall be allowed a credit against the
4    tax imposed by subsections (a) and (b) of this Section for
5    investment in qualified property which is placed in
6    service in an Enterprise Zone created pursuant to the
7    Illinois Enterprise Zone Act or, for property placed in
8    service on or after July 1, 2006, a River Edge
9    Redevelopment Zone established pursuant to the River Edge
10    Redevelopment Zone Act. For partners, shareholders of
11    Subchapter S corporations, and owners of limited liability
12    companies, if the liability company is treated as a
13    partnership for purposes of federal and State income
14    taxation, there shall be allowed a credit under this
15    subsection (f) to be determined in accordance with the
16    determination of income and distributive share of income
17    under Sections 702 and 704 and Subchapter S of the
18    Internal Revenue Code. The credit shall be .5% of the
19    basis for such property. The credit shall be available
20    only in the taxable year in which the property is placed in
21    service in the Enterprise Zone or River Edge Redevelopment
22    Zone and shall not be allowed to the extent that it would
23    reduce a taxpayer's liability for the tax imposed by
24    subsections (a) and (b) of this Section to below zero. For
25    tax years ending on or after December 31, 1985, the credit
26    shall be allowed for the tax year in which the property is

 

 

HB0392- 18 -LRB102 03939 HLH 13955 b

1    placed in service, or, if the amount of the credit exceeds
2    the tax liability for that year, whether it exceeds the
3    original liability or the liability as later amended, such
4    excess may be carried forward and applied to the tax
5    liability of the 5 taxable years following the excess
6    credit year. The credit shall be applied to the earliest
7    year for which there is a liability. If there is credit
8    from more than one tax year that is available to offset a
9    liability, the credit accruing first in time shall be
10    applied first.
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        (f);
19            (C) is acquired by purchase as defined in Section
20        179(d) of the Internal Revenue Code;
21            (D) is used in the Enterprise Zone or River Edge
22        Redevelopment Zone by the taxpayer; and
23            (E) has not been previously used in Illinois in
24        such a manner and by such a person as would qualify for
25        the credit provided by this subsection (f) or
26        subsection (e).

 

 

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1        (3) The basis of qualified property shall be the basis
2    used to compute the depreciation deduction for federal
3    income tax purposes.
4        (4) If the basis of the property for federal income
5    tax depreciation purposes is increased after it has been
6    placed in service in the Enterprise Zone or River Edge
7    Redevelopment Zone 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        (5) The term "placed in service" shall have the same
11    meaning as under Section 46 of the Internal Revenue Code.
12        (6) 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 the Enterprise
16    Zone or River Edge Redevelopment Zone within 48 months
17    after being placed in service, the tax imposed under
18    subsections (a) and (b) of this Section for such taxable
19    year shall be increased. Such increase shall be determined
20    by (i) recomputing the investment credit which would have
21    been allowed for the year in which credit for such
22    property was originally allowed by eliminating such
23    property from such computation, and (ii) subtracting such
24    recomputed credit from the amount of credit previously
25    allowed. For the purposes of this paragraph (6), a
26    reduction of the basis of qualified property resulting

 

 

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1    from a redetermination of the purchase price shall be
2    deemed a disposition of qualified property to the extent
3    of such reduction.
4        (7) There shall be allowed an additional credit equal
5    to 0.5% of the basis of qualified property placed in
6    service during the taxable year in a River Edge
7    Redevelopment Zone, provided such property is placed in
8    service on or after July 1, 2006, and the taxpayer's base
9    employment within Illinois has increased by 1% or more
10    over the preceding year as determined by the taxpayer's
11    employment records filed with the Illinois Department of
12    Employment Security. Taxpayers who are new to Illinois
13    shall be deemed to have met the 1% growth in base
14    employment for the first year in which they file
15    employment records with the Illinois Department of
16    Employment Security. If, in any year, the increase in base
17    employment within Illinois over the preceding year is less
18    than 1%, the additional credit shall be limited to that
19    percentage times a fraction, the numerator of which is
20    0.5% and the denominator of which is 1%, but shall not
21    exceed 0.5%.
22        (8) For taxable years beginning on or after January 1,
23    2021, there shall be allowed an Enterprise Zone
24    construction jobs credit against the taxes imposed under
25    subsections (a) and (b) of this Section as provided in
26    Section 13 of the Illinois Enterprise Zone Act.

 

 

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1        The credit or credits may not reduce the taxpayer's
2    liability to less than zero. If the amount of the credit or
3    credits exceeds the taxpayer's liability, the excess may
4    be carried forward and applied against the taxpayer's
5    liability in succeeding calendar years in the same manner
6    provided under paragraph (4) of Section 211 of this Act.
7    The credit or credits shall be applied to the earliest
8    year for which there is a tax liability. If there are
9    credits from more than one taxable year that are available
10    to offset a liability, the earlier credit shall be applied
11    first.
12        For partners, shareholders of Subchapter S
13    corporations, and owners of limited liability companies,
14    if the liability company is treated as a partnership for
15    the purposes of federal and State income taxation, there
16    shall be allowed a credit under this Section to be
17    determined in accordance with the determination of income
18    and distributive share of income under Sections 702 and
19    704 and Subchapter S of the Internal Revenue Code.
20        The total aggregate amount of credits awarded under
21    the Blue Collar Jobs Act (Article 20 of Public Act 101-9
22    this amendatory Act of the 101st General Assembly) shall
23    not exceed $20,000,000 in any State fiscal year.
24        This paragraph (8) is exempt from the provisions of
25    Section 250.
26    (g) (Blank).

 

 

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1    (h) Investment credit; High Impact Business.
2        (1) Subject to subsections (b) and (b-5) of Section
3    5.5 of the Illinois Enterprise Zone Act, a taxpayer shall
4    be allowed a credit against the tax imposed by subsections
5    (a) and (b) of this Section for investment in qualified
6    property which is placed in service by a Department of
7    Commerce and Economic Opportunity designated High Impact
8    Business. The credit shall be .5% of the basis for such
9    property. The credit shall not be available (i) until the
10    minimum investments in qualified property set forth in
11    subdivision (a)(3)(A) of Section 5.5 of the Illinois
12    Enterprise Zone Act have been satisfied or (ii) until the
13    time authorized in subsection (b-5) of the Illinois
14    Enterprise Zone Act for entities designated as High Impact
15    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
16    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
17    Act, and shall not be allowed to the extent that it would
18    reduce a taxpayer's liability for the tax imposed by
19    subsections (a) and (b) of this Section to below zero. The
20    credit applicable to such investments shall be taken in
21    the taxable year in which such investments have been
22    completed. The credit for additional investments beyond
23    the minimum investment by a designated high impact
24    business authorized under subdivision (a)(3)(A) of Section
25    5.5 of the Illinois Enterprise Zone Act shall be available
26    only in the taxable year in which the property is placed in

 

 

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1    service and shall not be allowed to the extent that it
2    would reduce a taxpayer's liability for the tax imposed by
3    subsections (a) and (b) of this Section to below zero. For
4    tax years ending on or after December 31, 1987, the credit
5    shall be allowed for the tax year in which the property is
6    placed in service, or, if the amount of the credit exceeds
7    the tax liability for that year, whether it exceeds the
8    original liability or the liability as later amended, such
9    excess may be carried forward and applied to the tax
10    liability of the 5 taxable years following the excess
11    credit year. The credit shall be applied to the earliest
12    year for which there is a liability. If there is credit
13    from more than one tax year that is available to offset a
14    liability, the credit accruing first in time shall be
15    applied first.
16        Changes made in this subdivision (h)(1) by Public Act
17    88-670 restore changes made by Public Act 85-1182 and
18    reflect existing law.
19        (2) The term qualified property means property which:
20            (A) is tangible, whether new or used, including
21        buildings and structural components of buildings;
22            (B) is depreciable pursuant to Section 167 of the
23        Internal Revenue Code, except that "3-year property"
24        as defined in Section 168(c)(2)(A) of that Code is not
25        eligible for the credit provided by this subsection
26        (h);

 

 

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1            (C) is acquired by purchase as defined in Section
2        179(d) of the Internal Revenue Code; and
3            (D) is not eligible for the Enterprise Zone
4        Investment Credit provided by subsection (f) of this
5        Section.
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
10    tax depreciation purposes is increased after it has been
11    placed in service in a federally designated Foreign Trade
12    Zone or Sub-Zone located in Illinois by the taxpayer, the
13    amount of such increase shall be deemed property placed in
14    service on the 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 ending on or before
18    December 31, 1996, any property ceases to be qualified
19    property in the hands of the taxpayer within 48 months
20    after being placed in service, or the situs of any
21    qualified property is moved outside Illinois within 48
22    months after being placed in service, the tax imposed
23    under subsections (a) and (b) of this Section for such
24    taxable year shall be increased. Such increase shall be
25    determined by (i) recomputing the investment credit which
26    would have been allowed for the year in which credit for

 

 

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1    such property was originally allowed by eliminating such
2    property from such computation, and (ii) subtracting such
3    recomputed credit from the amount of credit previously
4    allowed. For the purposes of this paragraph (6), a
5    reduction of the basis of qualified property resulting
6    from a redetermination of the purchase price shall be
7    deemed a disposition of qualified property to the extent
8    of such reduction.
9        (7) Beginning with tax years ending after December 31,
10    1996, if a taxpayer qualifies for the credit under this
11    subsection (h) and thereby is granted a tax abatement and
12    the taxpayer relocates its entire facility in violation of
13    the explicit terms and length of the contract under
14    Section 18-183 of the Property Tax Code, the tax imposed
15    under subsections (a) and (b) of this Section shall be
16    increased for the taxable year in which the taxpayer
17    relocated its facility by an amount equal to the amount of
18    credit received by the taxpayer under this subsection (h).
19    (h-5) High Impact Business construction constructions jobs
20credit. For taxable years beginning on or after January 1,
212021, there shall also be allowed a High Impact Business
22construction jobs credit against the tax imposed under
23subsections (a) and (b) of this Section as provided in
24subsections (i) and (j) of Section 5.5 of the Illinois
25Enterprise Zone Act.
26    The credit or credits may not reduce the taxpayer's

 

 

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1liability to less than zero. If the amount of the credit or
2credits exceeds the taxpayer's liability, the excess may be
3carried forward and applied against the taxpayer's liability
4in succeeding calendar years in the manner provided under
5paragraph (4) of Section 211 of this Act. The credit or credits
6shall be applied to the earliest year for which there is a tax
7liability. If there are credits from more than one taxable
8year that are available to offset a liability, the earlier
9credit shall be applied first.
10    For partners, shareholders of Subchapter S corporations,
11and owners of limited liability companies, if the liability
12company is treated as a partnership for the purposes of
13federal and State income taxation, there shall be allowed a
14credit under this Section to be determined in accordance with
15the determination of income and distributive share of income
16under Sections 702 and 704 and Subchapter S of the Internal
17Revenue Code.
18    The total aggregate amount of credits awarded under the
19Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
20amendatory Act of the 101st General Assembly) shall not exceed
21$20,000,000 in any State fiscal year.
22    This subsection (h-5) is exempt from the provisions of
23Section 250.
24    (i) Credit for Personal Property Tax Replacement Income
25Tax. For tax years ending prior to December 31, 2003, a credit
26shall be allowed against the tax imposed by subsections (a)

 

 

HB0392- 27 -LRB102 03939 HLH 13955 b

1and (b) of this Section for the tax imposed by subsections (c)
2and (d) of this Section. This credit shall be computed by
3multiplying the tax imposed by subsections (c) and (d) of this
4Section by a fraction, the numerator of which is base income
5allocable to Illinois and the denominator of which is Illinois
6base income, and further multiplying the product by the tax
7rate imposed by subsections (a) and (b) of this Section.
8    Any credit earned on or after December 31, 1986 under this
9subsection which is unused in the year the credit is computed
10because it exceeds the tax liability imposed by subsections
11(a) and (b) for that year (whether it exceeds the original
12liability or the liability as later amended) may be carried
13forward and applied to the tax liability imposed by
14subsections (a) and (b) of the 5 taxable years following the
15excess credit year, provided that no credit may be carried
16forward to any year ending on or after December 31, 2003. This
17credit shall be applied first to the earliest year for which
18there is a liability. If there is a credit under this
19subsection from more than one tax year that is available to
20offset a liability the earliest credit arising under this
21subsection shall be applied first.
22    If, during any taxable year ending on or after December
2331, 1986, the tax imposed by subsections (c) and (d) of this
24Section for which a taxpayer has claimed a credit under this
25subsection (i) is reduced, the amount of credit for such tax
26shall also be reduced. Such reduction shall be determined by

 

 

HB0392- 28 -LRB102 03939 HLH 13955 b

1recomputing the credit to take into account the reduced tax
2imposed by subsections (c) and (d). If any portion of the
3reduced amount of credit has been carried to a different
4taxable year, an amended return shall be filed for such
5taxable year to reduce the amount of credit claimed.
6    (j) Training expense credit. Beginning with tax years
7ending on or after December 31, 1986 and prior to December 31,
82003, a taxpayer shall be allowed a credit against the tax
9imposed by subsections (a) and (b) under this Section for all
10amounts paid or accrued, on behalf of all persons employed by
11the taxpayer in Illinois or Illinois residents employed
12outside of Illinois by a taxpayer, for educational or
13vocational training in semi-technical or technical fields or
14semi-skilled or skilled fields, which were deducted from gross
15income in the computation of taxable income. The credit
16against the tax imposed by subsections (a) and (b) shall be
171.6% of such training expenses. For partners, shareholders of
18subchapter S corporations, and owners of limited liability
19companies, if the liability company is treated as a
20partnership for purposes of federal and State income taxation,
21there shall be allowed a credit under this subsection (j) to be
22determined in accordance with the determination of income and
23distributive share of income under Sections 702 and 704 and
24subchapter S of the Internal Revenue Code.
25    Any credit allowed under this subsection which is unused
26in the year the credit is earned may be carried forward to each

 

 

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1of the 5 taxable years following the year for which the credit
2is first computed until it is used. This credit shall be
3applied first to the earliest year for which there is a
4liability. If there is a credit under this subsection from
5more than one tax year that is available to offset a liability,
6the earliest credit arising under this subsection shall be
7applied first. No carryforward credit may be claimed in any
8tax year ending on or after December 31, 2003.
9    (k) Research and development credit. For tax years ending
10after July 1, 1990 and prior to December 31, 2003, and
11beginning again for tax years ending on or after December 31,
122004, and ending prior to January 1, 2027, a taxpayer shall be
13allowed a credit against the tax imposed by subsections (a)
14and (b) of this Section for increasing research activities in
15this State. The credit allowed against the tax imposed by
16subsections (a) and (b) shall be equal to 6 1/2% of the
17qualifying expenditures for increasing research activities in
18this State. For partners, shareholders of subchapter S
19corporations, and owners of limited liability companies, if
20the liability company is treated as a partnership for purposes
21of federal and State income taxation, there shall be allowed a
22credit under this subsection to be determined in accordance
23with the determination of income and distributive share of
24income under Sections 702 and 704 and subchapter S of the
25Internal Revenue Code.
26    For purposes of this subsection, "qualifying expenditures"

 

 

HB0392- 30 -LRB102 03939 HLH 13955 b

1means the qualifying expenditures as defined for the federal
2credit for increasing research activities which would be
3allowable under Section 41 of the Internal Revenue Code and
4which are conducted in this State, "qualifying expenditures
5for increasing research activities in this State" means the
6excess of qualifying expenditures for the taxable year in
7which incurred over qualifying expenditures for the base
8period, "qualifying expenditures for the base period" means
9the average of the qualifying expenditures for each year in
10the base period, and "base period" means the 3 taxable years
11immediately preceding the taxable year for which the
12determination is being made.
13    Any credit in excess of the tax liability for the taxable
14year may be carried forward. A taxpayer may elect to have the
15unused credit shown on its final completed return carried over
16as a credit against the tax liability for the following 5
17taxable years or until it has been fully used, whichever
18occurs first; provided that no credit earned in a tax year
19ending prior to December 31, 2003 may be carried forward to any
20year ending on or after December 31, 2003.
21    If an unused credit is carried forward to a given year from
222 or more earlier years, that credit arising in the earliest
23year will be applied first against the tax liability for the
24given year. If a tax liability for the given year still
25remains, the credit from the next earliest year will then be
26applied, and so on, until all credits have been used or no tax

 

 

HB0392- 31 -LRB102 03939 HLH 13955 b

1liability for the given year remains. Any remaining unused
2credit or credits then will be carried forward to the next
3following year in which a tax liability is incurred, except
4that no credit can be carried forward to a year which is more
5than 5 years after the year in which the expense for which the
6credit is given was incurred.
7    No inference shall be drawn from Public Act 91-644 this
8amendatory Act of the 91st General Assembly in construing this
9Section for taxable years beginning before January 1, 1999.
10    It is the intent of the General Assembly that the research
11and development credit under this subsection (k) shall apply
12continuously for all tax years ending on or after December 31,
132004 and ending prior to January 1, 2027, including, but not
14limited to, the period beginning on January 1, 2016 and ending
15on July 6, 2017 (the effective date of Public Act 100-22) this
16amendatory Act of the 100th General Assembly. All actions
17taken in reliance on the continuation of the credit under this
18subsection (k) by any taxpayer are hereby validated.
19    A taxpayer is not required to have obtained a research and
20development credit with respect to his or her federal income
21taxes to qualify for a credit under this subsection.
22    (l) Environmental Remediation Tax Credit.
23        (i) For tax years ending after December 31, 1997 and
24    on or before December 31, 2001, a taxpayer shall be
25    allowed a credit against the tax imposed by subsections
26    (a) and (b) of this Section for certain amounts paid for

 

 

HB0392- 32 -LRB102 03939 HLH 13955 b

1    unreimbursed eligible remediation costs, as specified in
2    this subsection. For purposes of this Section,
3    "unreimbursed eligible remediation costs" means costs
4    approved by the Illinois Environmental Protection Agency
5    ("Agency") under Section 58.14 of the Environmental
6    Protection Act that were paid in performing environmental
7    remediation at a site for which a No Further Remediation
8    Letter was issued by the Agency and recorded under Section
9    58.10 of the Environmental Protection Act. The credit must
10    be claimed for the taxable year in which Agency approval
11    of the eligible remediation costs is granted. The credit
12    is not available to any taxpayer if the taxpayer or any
13    related party caused or contributed to, in any material
14    respect, a release of regulated substances on, in, or
15    under the site that was identified and addressed by the
16    remedial action pursuant to the Site Remediation Program
17    of the Environmental Protection Act. After the Pollution
18    Control 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
26    Code and "related party" includes the persons disallowed a

 

 

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1    deduction for losses by paragraphs (b), (c), and (f)(1) of
2    Section 267 of the Internal Revenue Code by virtue of
3    being a related taxpayer, as well as any of its partners.
4    The credit allowed against the tax imposed by subsections
5    (a) and (b) shall be equal to 25% of the unreimbursed
6    eligible remediation costs in excess of $100,000 per site,
7    except that the $100,000 threshold shall not apply to any
8    site 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
12    with a maximum total of $150,000 per site. For partners
13    and shareholders of subchapter S corporations, there shall
14    be allowed a credit under this subsection to be determined
15    in accordance with the determination of income and
16    distributive share of income under Sections 702 and 704
17    and 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
26    for which there is a liability. If there is a credit under

 

 

HB0392- 34 -LRB102 03939 HLH 13955 b

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

 

 

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125% of qualified education expenses, but in no event may the
2total credit under this subsection claimed by a family that is
3the custodian of qualifying pupils exceed (i) $500 for tax
4years ending prior to December 31, 2017, and (ii) $750 for tax
5years ending on or after December 31, 2017. In no event shall a
6credit under this subsection reduce the taxpayer's liability
7under this Act to less than zero. Notwithstanding any other
8provision of law, for taxable years beginning on or after
9January 1, 2017, no taxpayer may claim a credit under this
10subsection (m) if the taxpayer's adjusted gross income for the
11taxable year exceeds (i) $500,000, in the case of spouses
12filing a joint federal tax return or (ii) $250,000, in the case
13of all other taxpayers. This subsection is exempt from the
14provisions of Section 250 of this Act.
15    For purposes of this subsection:
16    "Qualifying pupils" means individuals who (i) are
17residents of the State of Illinois, (ii) are under the age of
1821 at the close of the school year for which a credit is
19sought, and (iii) during the school year for which a credit is
20sought were full-time pupils enrolled in a kindergarten
21through twelfth grade education program at any school, as
22defined in this subsection.
23    "Qualified education expense" means the amount incurred on
24behalf of a qualifying pupil in excess of $250 for tuition,
25book fees, and lab fees at the school in which the pupil is
26enrolled during the regular school year.

 

 

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1    "School" means any public or nonpublic elementary or
2secondary school in Illinois that is in compliance with Title
3VI of the Civil Rights Act of 1964 and attendance at which
4satisfies the requirements of Section 26-1 of the School Code,
5except that nothing shall be construed to require a child to
6attend any particular public or nonpublic school to qualify
7for the credit under this Section.
8    "Custodian" means, with respect to qualifying pupils, an
9Illinois resident who is a parent, the parents, a legal
10guardian, or the legal guardians of the qualifying pupils.
11    (n) River Edge Redevelopment Zone site remediation tax
12credit.
13        (i) For tax years ending on or after December 31,
14    2006, a taxpayer shall be allowed a credit against the tax
15    imposed by subsections (a) and (b) of this Section for
16    certain amounts paid for unreimbursed eligible remediation
17    costs, as specified in this subsection. For purposes of
18    this Section, "unreimbursed eligible remediation costs"
19    means costs approved by the Illinois Environmental
20    Protection Agency ("Agency") under Section 58.14a of the
21    Environmental Protection Act that were paid in performing
22    environmental remediation at a site within a River Edge
23    Redevelopment Zone for which a No Further Remediation
24    Letter was issued by the Agency and recorded under Section
25    58.10 of the Environmental Protection Act. The credit must
26    be claimed for the taxable year in which Agency approval

 

 

HB0392- 37 -LRB102 03939 HLH 13955 b

1    of the eligible remediation costs is granted. The credit
2    is not available to any taxpayer if the taxpayer or any
3    related party caused or contributed to, in any material
4    respect, a release of regulated substances on, in, or
5    under the site that was identified and addressed by the
6    remedial action pursuant to the Site Remediation Program
7    of the Environmental Protection Act. Determinations as to
8    credit availability for purposes of this Section shall be
9    made consistent with rules adopted by the Pollution
10    Control Board pursuant to the Illinois Administrative
11    Procedure Act for the administration and enforcement of
12    Section 58.9 of the Environmental Protection Act. For
13    purposes of this Section, "taxpayer" includes a person
14    whose tax attributes the taxpayer has succeeded to under
15    Section 381 of the Internal Revenue Code and "related
16    party" includes the persons disallowed a deduction for
17    losses by paragraphs (b), (c), and (f)(1) of Section 267
18    of the Internal Revenue Code by virtue of being a related
19    taxpayer, as well as any of its partners. The credit
20    allowed against the tax imposed by subsections (a) and (b)
21    shall be equal to 25% of the unreimbursed eligible
22    remediation costs in excess of $100,000 per site.
23        (ii) A credit allowed under this subsection that is
24    unused in the year the credit is earned may be carried
25    forward to each of the 5 taxable years following the year
26    for which the credit is first earned until it is used. This

 

 

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1    credit shall be applied first to the earliest year for
2    which there is a liability. If there is a credit under this
3    subsection from more than one tax year that is available
4    to offset a liability, the earliest credit arising under
5    this subsection shall be applied first. A credit allowed
6    under this subsection may be sold to a buyer as part of a
7    sale of all or part of the remediation site for which the
8    credit was granted. The purchaser of a remediation site
9    and the tax credit shall succeed to the unused credit and
10    remaining carry-forward period of the seller. To perfect
11    the transfer, the assignor shall record the transfer in
12    the chain of title for the site and provide written notice
13    to the Director of the Illinois Department of Revenue of
14    the assignor's intent to sell the remediation site and the
15    amount of the tax credit to be transferred as a portion of
16    the sale. In no event may a credit be transferred to any
17    taxpayer if the taxpayer or a related party would not be
18    eligible under the provisions of subsection (i).
19        (iii) For purposes of this Section, the term "site"
20    shall have the same meaning as under Section 58.2 of the
21    Environmental Protection Act.
22    (o) For each of taxable years during the Compassionate Use
23of Medical Cannabis Program, a surcharge is imposed on all
24taxpayers on income arising from the sale or exchange of
25capital assets, depreciable business property, real property
26used in the trade or business, and Section 197 intangibles of

 

 

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1an organization registrant under the Compassionate Use of
2Medical Cannabis Program Act. The amount of the surcharge is
3equal to the amount of federal income tax liability for the
4taxable year attributable to those sales and exchanges. The
5surcharge imposed does not apply if:
6        (1) the medical cannabis cultivation center
7    registration, medical cannabis dispensary registration, or
8    the property of a registration is transferred as a result
9    of any of the following:
10            (A) bankruptcy, a receivership, or a debt
11        adjustment initiated by or against the initial
12        registration or the substantial owners of the initial
13        registration;
14            (B) cancellation, revocation, or termination of
15        any registration by the Illinois Department of Public
16        Health;
17            (C) a determination by the Illinois Department of
18        Public Health that transfer of the registration is in
19        the best interests of Illinois qualifying patients as
20        defined by the Compassionate Use of Medical Cannabis
21        Program Act;
22            (D) the death of an owner of the equity interest in
23        a registrant;
24            (E) the acquisition of a controlling interest in
25        the stock or substantially all of the assets of a
26        publicly traded company;

 

 

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1            (F) a transfer by a parent company to a wholly
2        owned subsidiary; or
3            (G) the transfer or sale to or by one person to
4        another person where both persons were initial owners
5        of the registration when the registration was issued;
6        or
7        (2) the cannabis cultivation center registration,
8    medical cannabis dispensary registration, or the
9    controlling interest in a registrant's property is
10    transferred in a transaction to lineal descendants in
11    which no gain or loss is recognized or as a result of a
12    transaction in accordance with Section 351 of the Internal
13    Revenue Code in which no gain or loss is recognized.
14    (p) Illinois Innovation Credit.
15        (1) For tax years ending on or after December 31,
16    2021, a taxpayer shall be allowed a credit against the tax
17    imposed by subsections (a) and (b) of this Section in an
18    amount equal to 1.3% of the qualified research expenses
19    made by the taxpayer in Illinois. In no event shall a
20    credit under this subsection reduce the taxpayer's
21    liability under this Act to less than zero. A taxpayer may
22    elect to have the unused credit shown on its final
23    completed return carried over as a credit against his or
24    her tax liability for the following 5 taxable years or
25    until the credit has been fully used, whichever occurs
26    first. This subsection (p) is exempt from the provisions

 

 

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1    of Section 250 of this Act.
2        (2) As used in this subsection:
3        "Qualified research" means activities designed to
4    promote any or all of the following:
5            (A) new computer modeling technology;
6            (B) new 3D modeling or imaging technology;
7            (C) new public infrastructure materials; or
8            (D) new public infrastructure design.
9        "Qualified research expenses" means:
10            (A) any wages paid or incurred to an employee for
11        qualified services performed by such employee;
12            (B) any amount paid or incurred for supplies used
13        in the conduct of qualified research; and
14            (C) any amount paid or incurred by the taxpayer to
15        any person (other than an employee of the taxpayer)
16        for qualified research.
17(Source: P.A. 100-22, eff. 7-6-17; 101-9, eff. 6-5-19; 101-31,
18eff. 6-28-19; 101-207, eff. 8-2-19; 101-363, eff. 8-9-19;
19revised 11-18-20.)
 
20    (Text of Section with the changes made by P.A. 101-8,
21which did not take effect (see Section 99 of P.A. 101-8))
22    Sec. 201. Tax imposed.
23    (a) In general. A tax measured by net income is hereby
24imposed on every individual, corporation, trust and estate for
25each taxable year ending after July 31, 1969 on the privilege

 

 

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1of earning or receiving income in or as a resident of this
2State. Such tax shall be in addition to all other occupation or
3privilege taxes imposed by this State or by any municipal
4corporation or political subdivision thereof.
5    (b) Rates. The tax imposed by subsection (a) of this
6Section shall be determined as follows, except as adjusted by
7subsection (d-1):
8        (1) In the case of an individual, trust or estate, for
9    taxable years ending prior to July 1, 1989, an amount
10    equal to 2 1/2% of the taxpayer's net income for the
11    taxable year.
12        (2) In the case of an individual, trust or estate, for
13    taxable years beginning prior to July 1, 1989 and ending
14    after June 30, 1989, an amount equal to the sum of (i) 2
15    1/2% of the taxpayer's net income for the period prior to
16    July 1, 1989, as calculated under Section 202.3, and (ii)
17    3% of the taxpayer's net income for the period after June
18    30, 1989, as calculated under Section 202.3.
19        (3) In the case of an individual, trust or estate, for
20    taxable years beginning after June 30, 1989, and ending
21    prior to January 1, 2011, an amount equal to 3% of the
22    taxpayer's net income for the taxable year.
23        (4) In the case of an individual, trust, or estate,
24    for taxable years beginning prior to January 1, 2011, and
25    ending after December 31, 2010, an amount equal to the sum
26    of (i) 3% of the taxpayer's net income for the period prior

 

 

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1    to January 1, 2011, as calculated under Section 202.5, and
2    (ii) 5% of the taxpayer's net income for the period after
3    December 31, 2010, as calculated under Section 202.5.
4        (5) In the case of an individual, trust, or estate,
5    for taxable years beginning on or after January 1, 2011,
6    and ending prior to January 1, 2015, an amount equal to 5%
7    of the taxpayer's net income for the taxable year.
8        (5.1) In the case of an individual, trust, or estate,
9    for taxable years beginning prior to January 1, 2015, and
10    ending after December 31, 2014, an amount equal to the sum
11    of (i) 5% of the taxpayer's net income for the period prior
12    to January 1, 2015, as calculated under Section 202.5, and
13    (ii) 3.75% of the taxpayer's net income for the period
14    after December 31, 2014, as calculated under Section
15    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 July 1, 2017, an amount equal to 3.75%
19    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 July 1, 2017, and
22    ending after June 30, 2017, an amount equal to the sum of
23    (i) 3.75% of the taxpayer's net income for the period
24    prior to July 1, 2017, as calculated under Section 202.5,
25    and (ii) 4.95% of the taxpayer's net income for the period
26    after June 30, 2017, as calculated under Section 202.5.

 

 

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1        (5.4) In the case of an individual, trust, or estate,
2    for taxable years beginning on or after July 1, 2017 and
3    beginning prior to January 1, 2021, an amount equal to
4    4.95% of the taxpayer's net income for the taxable year.
5        (5.5) In the case of an individual, trust, or estate,
6    for taxable years beginning on or after January 1, 2021,
7    an amount calculated under the rate structure set forth in
8    Section 201.1.
9        (6) In the case of a corporation, for taxable years
10    ending prior to July 1, 1989, an amount equal to 4% of the
11    taxpayer's net income for the taxable year.
12        (7) In the case of a corporation, for taxable years
13    beginning prior to July 1, 1989 and ending after June 30,
14    1989, an amount equal to the sum of (i) 4% of the
15    taxpayer's net income for the period prior to July 1,
16    1989, as calculated under Section 202.3, and (ii) 4.8% of
17    the taxpayer's net income for the period after June 30,
18    1989, as calculated under Section 202.3.
19        (8) In the case of a corporation, for taxable years
20    beginning after June 30, 1989, and ending prior to January
21    1, 2011, an amount equal to 4.8% of the taxpayer's net
22    income for the taxable year.
23        (9) In the case of a corporation, for taxable years
24    beginning prior to January 1, 2011, and ending after
25    December 31, 2010, an amount equal to the sum of (i) 4.8%
26    of the taxpayer's net income for the period prior to

 

 

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1    January 1, 2011, as calculated under Section 202.5, and
2    (ii) 7% of the taxpayer's net income for the period after
3    December 31, 2010, as calculated under Section 202.5.
4        (10) In the case of a corporation, for taxable years
5    beginning on or after January 1, 2011, and ending prior to
6    January 1, 2015, an amount equal to 7% of the taxpayer's
7    net income for the taxable year.
8        (11) In the case of a corporation, for taxable years
9    beginning prior to January 1, 2015, and ending after
10    December 31, 2014, an amount equal to the sum of (i) 7% of
11    the taxpayer's net income for the period prior to January
12    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
13    of the taxpayer's net income for the period after December
14    31, 2014, as calculated under Section 202.5.
15        (12) In the case of a corporation, for taxable years
16    beginning on or after January 1, 2015, and ending prior to
17    July 1, 2017, an amount equal to 5.25% of the taxpayer's
18    net income for the taxable year.
19        (13) In the case of a corporation, for taxable years
20    beginning prior to July 1, 2017, and ending after June 30,
21    2017, an amount equal to the sum of (i) 5.25% of the
22    taxpayer's net income for the period prior to July 1,
23    2017, as calculated under Section 202.5, and (ii) 7% of
24    the taxpayer's net income for the period after June 30,
25    2017, as calculated under Section 202.5.
26        (14) In the case of a corporation, for taxable years

 

 

HB0392- 46 -LRB102 03939 HLH 13955 b

1    beginning on or after July 1, 2017 and beginning prior to
2    January 1, 2021, an amount equal to 7% of the taxpayer's
3    net income for the taxable year.
4        (15) In the case of a corporation, for taxable years
5    beginning on or after January 1, 2021, an amount equal to
6    7.99% of the taxpayer's net income for the taxable year.
7    The rates under this subsection (b) are subject to the
8provisions of Section 201.5.
9    (b-5) Surcharge; sale or exchange of assets, properties,
10and intangibles of organization gaming licensees. For each of
11taxable years 2019 through 2027, a surcharge is imposed on all
12taxpayers on income arising from the sale or exchange of
13capital assets, depreciable business property, real property
14used in the trade or business, and Section 197 intangibles (i)
15of an organization licensee under the Illinois Horse Racing
16Act of 1975 and (ii) of an organization gaming licensee under
17the Illinois Gambling Act. The amount of the surcharge is
18equal to the amount of federal income tax liability for the
19taxable year attributable to those sales and exchanges. The
20surcharge imposed shall not apply if:
21        (1) the organization gaming license, organization
22    license, or racetrack property is transferred as a result
23    of any of the following:
24            (A) bankruptcy, a receivership, or a debt
25        adjustment initiated by or against the initial
26        licensee or the substantial owners of the initial

 

 

HB0392- 47 -LRB102 03939 HLH 13955 b

1        licensee;
2            (B) cancellation, revocation, or termination of
3        any such license by the Illinois Gaming Board or the
4        Illinois Racing Board;
5            (C) a determination by the Illinois Gaming Board
6        that transfer of the license is in the best interests
7        of Illinois gaming;
8            (D) the death of an owner of the equity interest in
9        a licensee;
10            (E) the acquisition of a controlling interest in
11        the stock or substantially all of the assets of a
12        publicly traded company;
13            (F) a transfer by a parent company to a wholly
14        owned subsidiary; or
15            (G) the transfer or sale to or by one person to
16        another person where both persons were initial owners
17        of the license when the license was issued; or
18        (2) the controlling interest in the organization
19    gaming license, organization license, or racetrack
20    property is transferred in a transaction to lineal
21    descendants in which no gain or loss is recognized or as a
22    result of a transaction in accordance with Section 351 of
23    the Internal Revenue Code in which no gain or loss is
24    recognized; or
25        (3) live horse racing was not conducted in 2010 at a
26    racetrack located within 3 miles of the Mississippi River

 

 

HB0392- 48 -LRB102 03939 HLH 13955 b

1    under a license issued pursuant to the Illinois Horse
2    Racing Act of 1975.
3    The transfer of an organization gaming license,
4organization license, or racetrack property by a person other
5than the initial licensee to receive the organization gaming
6license is not subject to a surcharge. The Department shall
7adopt rules necessary to implement and administer this
8subsection.
9    (c) Personal Property Tax Replacement Income Tax.
10Beginning on July 1, 1979 and thereafter, in addition to such
11income tax, there is also hereby imposed the Personal Property
12Tax Replacement Income Tax measured by net income on every
13corporation (including Subchapter S corporations), partnership
14and trust, for each taxable year ending after June 30, 1979.
15Such taxes are imposed on the privilege of earning or
16receiving income in or as a resident of this State. The
17Personal Property Tax Replacement Income Tax shall be in
18addition to the income tax imposed by subsections (a) and (b)
19of this Section and in addition to all other occupation or
20privilege taxes imposed by this State or by any municipal
21corporation or political subdivision thereof.
22    (d) Additional Personal Property Tax Replacement Income
23Tax Rates. The personal property tax replacement income tax
24imposed by this subsection and subsection (c) of this Section
25in the case of a corporation, other than a Subchapter S
26corporation and except as adjusted by subsection (d-1), shall

 

 

HB0392- 49 -LRB102 03939 HLH 13955 b

1be an additional amount equal to 2.85% of such taxpayer's net
2income for the taxable year, except that beginning on January
31, 1981, and thereafter, the rate of 2.85% specified in this
4subsection shall be reduced to 2.5%, and in the case of a
5partnership, trust or a Subchapter S corporation shall be an
6additional amount equal to 1.5% of such taxpayer's net income
7for the taxable year.
8    (d-1) Rate reduction for certain foreign insurers. In the
9case of a foreign insurer, as defined by Section 35A-5 of the
10Illinois Insurance Code, whose state or country of domicile
11imposes on insurers domiciled in Illinois a retaliatory tax
12(excluding any insurer whose premiums from reinsurance assumed
13are 50% or more of its total insurance premiums as determined
14under paragraph (2) of subsection (b) of Section 304, except
15that for purposes of this determination premiums from
16reinsurance do not include premiums from inter-affiliate
17reinsurance arrangements), beginning with taxable years ending
18on or after December 31, 1999, the sum of the rates of tax
19imposed by subsections (b) and (d) shall be reduced (but not
20increased) to the rate at which the total amount of tax imposed
21under this Act, net of all credits allowed under this Act,
22shall equal (i) the total amount of tax that would be imposed
23on the foreign insurer's net income allocable to Illinois for
24the taxable year by such foreign insurer's state or country of
25domicile if that net income were subject to all income taxes
26and taxes measured by net income imposed by such foreign

 

 

HB0392- 50 -LRB102 03939 HLH 13955 b

1insurer's state or country of domicile, net of all credits
2allowed or (ii) a rate of zero if no such tax is imposed on
3such income by the foreign insurer's state of domicile. For
4the purposes of this subsection (d-1), an inter-affiliate
5includes a mutual insurer under common management.
6        (1) For the purposes of subsection (d-1), in no event
7    shall the sum of the rates of tax imposed by subsections
8    (b) and (d) be reduced below the rate at which the sum of:
9            (A) the total amount of tax imposed on such
10        foreign insurer under this Act for a taxable year, net
11        of all credits allowed under this Act, plus
12            (B) the privilege tax imposed by Section 409 of
13        the Illinois Insurance Code, the fire insurance
14        company tax imposed by Section 12 of the Fire
15        Investigation Act, and the fire department taxes
16        imposed under Section 11-10-1 of the Illinois
17        Municipal Code,
18    equals 1.25% for taxable years ending prior to December
19    31, 2003, or 1.75% for taxable years ending on or after
20    December 31, 2003, of the net taxable premiums written for
21    the taxable year, as described by subsection (1) of
22    Section 409 of the Illinois Insurance Code. This paragraph
23    will in no event increase the rates imposed under
24    subsections (b) and (d).
25        (2) Any reduction in the rates of tax imposed by this
26    subsection shall be applied first against the rates

 

 

HB0392- 51 -LRB102 03939 HLH 13955 b

1    imposed by subsection (b) and only after the tax imposed
2    by subsection (a) net of all credits allowed under this
3    Section other than the credit allowed under subsection (i)
4    has been reduced to zero, against the rates imposed by
5    subsection (d).
6    This subsection (d-1) is exempt from the provisions of
7Section 250.
8    (e) Investment credit. A taxpayer shall be allowed a
9credit against the Personal Property Tax Replacement Income
10Tax for investment in qualified property.
11        (1) A taxpayer shall be allowed a credit equal to .5%
12    of the basis of qualified property placed in service
13    during the taxable year, provided such property is placed
14    in service on or after July 1, 1984. There shall be allowed
15    an additional credit equal to .5% of the basis of
16    qualified property placed in service during the taxable
17    year, provided such property is placed in service on or
18    after July 1, 1986, and the taxpayer's base employment
19    within Illinois has increased by 1% or more over the
20    preceding year as determined by the taxpayer's employment
21    records filed with the Illinois Department of Employment
22    Security. Taxpayers who are new to Illinois shall be
23    deemed to have met the 1% growth in base employment for the
24    first year in which they file employment records with the
25    Illinois Department of Employment Security. The provisions
26    added to this Section by Public Act 85-1200 (and restored

 

 

HB0392- 52 -LRB102 03939 HLH 13955 b

1    by Public Act 87-895) shall be construed as declaratory of
2    existing law and not as a new enactment. If, in any year,
3    the increase in base employment within Illinois over the
4    preceding year is less than 1%, the additional credit
5    shall be limited to that percentage times a fraction, the
6    numerator of which is .5% and the denominator of which is
7    1%, but shall not exceed .5%. The investment credit shall
8    not be allowed to the extent that it would reduce a
9    taxpayer's liability in any tax year below zero, nor may
10    any credit for qualified property be allowed for any year
11    other than the year in which the property was placed in
12    service in Illinois. For tax years ending on or after
13    December 31, 1987, and on or before December 31, 1988, the
14    credit shall be allowed for the tax year in which the
15    property is placed in service, or, if the amount of the
16    credit exceeds the tax liability for that year, whether it
17    exceeds the original liability or the liability as later
18    amended, such excess may be carried forward and applied to
19    the tax liability of the 5 taxable years following the
20    excess credit years if the taxpayer (i) makes investments
21    which cause the creation of a minimum of 2,000 full-time
22    equivalent jobs in Illinois, (ii) is located in an
23    enterprise zone established pursuant to the Illinois
24    Enterprise Zone Act and (iii) is certified by the
25    Department of Commerce and Community Affairs (now
26    Department of Commerce and Economic Opportunity) as

 

 

HB0392- 53 -LRB102 03939 HLH 13955 b

1    complying with the requirements specified in clause (i)
2    and (ii) by July 1, 1986. The Department of Commerce and
3    Community Affairs (now Department of Commerce and Economic
4    Opportunity) shall notify the Department of Revenue of all
5    such certifications immediately. For tax years ending
6    after December 31, 1988, the credit shall be allowed for
7    the tax year in which the property is placed in service,
8    or, if the amount of the credit exceeds the tax liability
9    for that year, whether it exceeds the original liability
10    or the liability as later amended, such excess may be
11    carried forward and applied to the tax liability of the 5
12    taxable years following the excess credit years. The
13    credit shall be applied to the earliest year for which
14    there is a liability. If there is credit from more than one
15    tax year that is available to offset a liability, earlier
16    credit shall be applied first.
17        (2) The term "qualified property" means property
18    which:
19            (A) is tangible, whether new or used, including
20        buildings and structural components of buildings and
21        signs that are real property, but not including land
22        or improvements to real property that are not a
23        structural component of a building such as
24        landscaping, sewer lines, local access roads, fencing,
25        parking lots, and other appurtenances;
26            (B) is depreciable pursuant to Section 167 of the

 

 

HB0392- 54 -LRB102 03939 HLH 13955 b

1        Internal Revenue Code, except that "3-year property"
2        as defined in Section 168(c)(2)(A) of that Code is not
3        eligible for the credit provided by this subsection
4        (e);
5            (C) is acquired by purchase as defined in Section
6        179(d) of the Internal Revenue Code;
7            (D) is used in Illinois by a taxpayer who is
8        primarily engaged in manufacturing, or in mining coal
9        or fluorite, or in retailing, or was placed in service
10        on or after July 1, 2006 in a River Edge Redevelopment
11        Zone established pursuant to the River Edge
12        Redevelopment Zone Act; and
13            (E) has not previously been used in Illinois in
14        such a manner and by such a person as would qualify for
15        the credit provided by this subsection (e) or
16        subsection (f).
17        (3) For purposes of this subsection (e),
18    "manufacturing" means the material staging and production
19    of tangible personal property by procedures commonly
20    regarded as manufacturing, processing, fabrication, or
21    assembling which changes some existing material into new
22    shapes, new qualities, or new combinations. For purposes
23    of this subsection (e) the term "mining" shall have the
24    same meaning as the term "mining" in Section 613(c) of the
25    Internal Revenue Code. For purposes of this subsection
26    (e), the term "retailing" means the sale of tangible

 

 

HB0392- 55 -LRB102 03939 HLH 13955 b

1    personal property for use or consumption and not for
2    resale, or services rendered in conjunction with the sale
3    of tangible personal property for use or consumption and
4    not for resale. For purposes of this subsection (e),
5    "tangible personal property" has the same meaning as when
6    that term is used in the Retailers' Occupation Tax Act,
7    and, for taxable years ending after December 31, 2008,
8    does not include the generation, transmission, or
9    distribution of electricity.
10        (4) The basis of qualified property shall be the basis
11    used to compute the depreciation deduction for federal
12    income tax purposes.
13        (5) If the basis of the property for federal income
14    tax depreciation purposes is increased after it has been
15    placed in service in Illinois by the taxpayer, the amount
16    of such increase shall be deemed property placed in
17    service on the date of such increase in basis.
18        (6) The term "placed in service" shall have the same
19    meaning as under Section 46 of the Internal Revenue Code.
20        (7) If during any taxable year, any property ceases to
21    be qualified property in the hands of the taxpayer within
22    48 months after being placed in service, or the situs of
23    any qualified property is moved outside Illinois within 48
24    months after being placed in service, the Personal
25    Property Tax Replacement Income Tax for such taxable year
26    shall be increased. Such increase shall be determined by

 

 

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1    (i) recomputing the investment credit which would have
2    been allowed for the year in which credit for such
3    property was originally allowed by eliminating such
4    property from such computation and, (ii) subtracting such
5    recomputed credit from the amount of credit previously
6    allowed. For the purposes of this paragraph (7), a
7    reduction of the basis of qualified property resulting
8    from a redetermination of the purchase price shall be
9    deemed a disposition of qualified property to the extent
10    of such reduction.
11        (8) Unless the investment credit is extended by law,
12    the basis of qualified property shall not include costs
13    incurred after December 31, 2018, except for costs
14    incurred pursuant to a binding contract entered into on or
15    before December 31, 2018.
16        (9) Each taxable year ending before December 31, 2000,
17    a partnership may elect to pass through to its partners
18    the credits to which the partnership is entitled under
19    this subsection (e) for the taxable year. A partner may
20    use the credit allocated to him or her under this
21    paragraph only against the tax imposed in subsections (c)
22    and (d) of this Section. If the partnership makes that
23    election, those credits shall be allocated among the
24    partners in the partnership in accordance with the rules
25    set forth in Section 704(b) of the Internal Revenue Code,
26    and the rules promulgated under that Section, and the

 

 

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1    allocated amount of the credits shall be allowed to the
2    partners for that taxable year. The partnership shall make
3    this election on its Personal Property Tax Replacement
4    Income Tax return for that taxable year. The election to
5    pass through the credits shall be irrevocable.
6        For taxable years ending on or after December 31,
7    2000, a partner that qualifies its partnership for a
8    subtraction under subparagraph (I) of paragraph (2) of
9    subsection (d) of Section 203 or a shareholder that
10    qualifies a Subchapter S corporation for a subtraction
11    under subparagraph (S) of paragraph (2) of subsection (b)
12    of Section 203 shall be allowed a credit under this
13    subsection (e) equal to its share of the credit earned
14    under this subsection (e) during the taxable year by the
15    partnership or Subchapter S corporation, determined in
16    accordance with the determination of income and
17    distributive share of income under Sections 702 and 704
18    and Subchapter S of the Internal Revenue Code. This
19    paragraph is exempt from the provisions of Section 250.
20    (f) Investment credit; Enterprise Zone; River Edge
21Redevelopment Zone.
22        (1) A taxpayer shall be allowed a credit against the
23    tax imposed by subsections (a) and (b) of this Section for
24    investment in qualified property which is placed in
25    service in an Enterprise Zone created pursuant to the
26    Illinois Enterprise Zone Act or, for property placed in

 

 

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1    service on or after July 1, 2006, a River Edge
2    Redevelopment Zone established pursuant to the River Edge
3    Redevelopment Zone Act. For partners, shareholders of
4    Subchapter S corporations, and owners of limited liability
5    companies, if the liability company is treated as a
6    partnership for purposes of federal and State income
7    taxation, there shall be allowed a credit under this
8    subsection (f) to be determined in accordance with the
9    determination of income and distributive share of income
10    under Sections 702 and 704 and Subchapter S of the
11    Internal Revenue Code. The credit shall be .5% of the
12    basis for such property. The credit shall be available
13    only in the taxable year in which the property is placed in
14    service in the Enterprise Zone or River Edge Redevelopment
15    Zone and shall not be allowed to the extent that it would
16    reduce a taxpayer's liability for the tax imposed by
17    subsections (a) and (b) of this Section to below zero. For
18    tax years ending on or after December 31, 1985, the credit
19    shall be allowed for the tax year in which the property is
20    placed in service, or, if the amount of the credit exceeds
21    the tax liability for that year, whether it exceeds the
22    original liability or the liability as later amended, such
23    excess may be carried forward and applied to the tax
24    liability of the 5 taxable years following the excess
25    credit year. The credit shall be applied to the earliest
26    year for which there is a liability. If there is credit

 

 

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1    from more than one tax year that is available to offset a
2    liability, the credit accruing first in time shall be
3    applied first.
4        (2) The term qualified property means property which:
5            (A) is tangible, whether new or used, including
6        buildings and structural components of buildings;
7            (B) is depreciable pursuant to Section 167 of the
8        Internal Revenue Code, except that "3-year property"
9        as defined in Section 168(c)(2)(A) of that Code is not
10        eligible for the credit provided by this subsection
11        (f);
12            (C) is acquired by purchase as defined in Section
13        179(d) of the Internal Revenue Code;
14            (D) is used in the Enterprise Zone or River Edge
15        Redevelopment Zone by the taxpayer; and
16            (E) has not been previously used in Illinois in
17        such a manner and by such a person as would qualify for
18        the credit provided by this subsection (f) or
19        subsection (e).
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
24    tax depreciation purposes is increased after it has been
25    placed in service in the Enterprise Zone or River Edge
26    Redevelopment Zone by the taxpayer, the amount of such

 

 

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1    increase shall be deemed property placed in service on the
2    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, any property ceases to
6    be qualified property in the hands of the taxpayer within
7    48 months after being placed in service, or the situs of
8    any qualified property is moved outside the Enterprise
9    Zone or River Edge Redevelopment Zone within 48 months
10    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
15    property was originally allowed by eliminating such
16    property from such computation, and (ii) subtracting such
17    recomputed credit from the amount of credit previously
18    allowed. For the purposes of this paragraph (6), a
19    reduction of the basis of qualified property resulting
20    from a redetermination of the purchase price shall be
21    deemed a disposition of qualified property to the extent
22    of such reduction.
23        (7) There shall be allowed an additional credit equal
24    to 0.5% of the basis of qualified property placed in
25    service during the taxable year in a River Edge
26    Redevelopment Zone, provided such property is placed in

 

 

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1    service on or after July 1, 2006, and the taxpayer's base
2    employment within Illinois has increased by 1% or more
3    over the preceding year as determined by the taxpayer's
4    employment records filed with the Illinois Department of
5    Employment Security. Taxpayers who are new to Illinois
6    shall be deemed to have met the 1% growth in base
7    employment for the first year in which they file
8    employment records with the Illinois Department of
9    Employment Security. If, in any year, the increase in base
10    employment within Illinois over the preceding year is less
11    than 1%, the additional credit shall be limited to that
12    percentage times a fraction, the numerator of which is
13    0.5% and the denominator of which is 1%, but shall not
14    exceed 0.5%.
15        (8) For taxable years beginning on or after January 1,
16    2021, there shall be allowed an Enterprise Zone
17    construction jobs credit against the taxes imposed under
18    subsections (a) and (b) of this Section as provided in
19    Section 13 of the Illinois Enterprise Zone Act.
20        The credit or credits may not reduce the taxpayer's
21    liability to less than zero. If the amount of the credit or
22    credits exceeds the taxpayer's liability, the excess may
23    be carried forward and applied against the taxpayer's
24    liability in succeeding calendar years in the same manner
25    provided under paragraph (4) of Section 211 of this Act.
26    The credit or credits shall be applied to the earliest

 

 

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1    year for which there is a tax liability. If there are
2    credits from more than one taxable year that are available
3    to offset a liability, the earlier credit shall be applied
4    first.
5        For partners, shareholders of Subchapter S
6    corporations, and owners of limited liability companies,
7    if the liability company is treated as a partnership for
8    the purposes of federal and State income taxation, there
9    shall be allowed a credit under this Section to be
10    determined in accordance with the determination of income
11    and distributive share of income under Sections 702 and
12    704 and Subchapter S of the Internal Revenue Code.
13        The total aggregate amount of credits awarded under
14    the Blue Collar Jobs Act (Article 20 of Public Act 101-9
15    this amendatory Act of the 101st General Assembly) shall
16    not exceed $20,000,000 in any State fiscal year.
17        This paragraph (8) is exempt from the provisions of
18    Section 250.
19    (g) (Blank).
20    (h) Investment credit; High Impact Business.
21        (1) Subject to subsections (b) and (b-5) of Section
22    5.5 of the Illinois Enterprise Zone Act, a taxpayer shall
23    be allowed a credit against the tax imposed by subsections
24    (a) 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
14    the taxable year in which such investments have been
15    completed. The credit for additional investments beyond
16    the minimum investment by a designated high impact
17    business authorized under subdivision (a)(3)(A) of Section
18    5.5 of the Illinois Enterprise Zone Act shall be available
19    only in the taxable year in which the property is placed in
20    service and shall not be allowed to the extent that it
21    would reduce a taxpayer's liability for the tax imposed by
22    subsections (a) and (b) of this Section to below zero. For
23    tax years ending on or after December 31, 1987, the credit
24    shall be allowed for the tax year in which the property is
25    placed in service, or, if the amount of the credit exceeds
26    the tax liability for that year, whether it exceeds the

 

 

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

 

 

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

 

 

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1    of such reduction.
2        (7) Beginning with tax years ending after December 31,
3    1996, if a taxpayer qualifies for the credit under this
4    subsection (h) and thereby is granted a tax abatement and
5    the taxpayer relocates its entire facility in violation of
6    the explicit terms and length of the contract under
7    Section 18-183 of the Property Tax Code, the tax imposed
8    under subsections (a) and (b) of this Section shall be
9    increased for the taxable year in which the taxpayer
10    relocated its facility by an amount equal to the amount of
11    credit received by the taxpayer under this subsection (h).
12    (h-5) High Impact Business construction constructions jobs
13credit. For taxable years beginning on or after January 1,
142021, there shall also be allowed a High Impact Business
15construction jobs credit against the tax imposed under
16subsections (a) and (b) of this Section as provided in
17subsections (i) and (j) of Section 5.5 of the Illinois
18Enterprise Zone Act.
19    The credit or credits may not reduce the taxpayer's
20liability to less than zero. If the amount of the credit or
21credits exceeds the taxpayer's liability, the excess may be
22carried forward and applied against the taxpayer's liability
23in succeeding calendar years in the manner provided under
24paragraph (4) of Section 211 of this Act. The credit or credits
25shall be applied to the earliest year for which there is a tax
26liability. If there are credits from more than one taxable

 

 

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1year that are available to offset a liability, the earlier
2credit shall be applied first.
3    For partners, shareholders of Subchapter S corporations,
4and owners of limited liability companies, if the liability
5company is treated as a partnership for the purposes of
6federal and State income taxation, there shall be allowed a
7credit under this Section to be determined in accordance with
8the determination of income and distributive share of income
9under Sections 702 and 704 and Subchapter S of the Internal
10Revenue Code.
11    The total aggregate amount of credits awarded under the
12Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
13amendatory Act of the 101st General Assembly) shall not exceed
14$20,000,000 in any State fiscal year.
15    This subsection (h-5) is exempt from the provisions of
16Section 250.
17    (i) Credit for Personal Property Tax Replacement Income
18Tax. For tax years ending prior to December 31, 2003, a credit
19shall be allowed against the tax imposed by subsections (a)
20and (b) of this Section for the tax imposed by subsections (c)
21and (d) of this Section. This credit shall be computed by
22multiplying the tax imposed by subsections (c) and (d) of this
23Section by a fraction, the numerator of which is base income
24allocable to Illinois and the denominator of which is Illinois
25base income, and further multiplying the product by the tax
26rate imposed by subsections (a) and (b) of this Section.

 

 

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1    Any credit earned on or after December 31, 1986 under this
2subsection which is unused in the year the credit is computed
3because it exceeds the tax liability imposed by subsections
4(a) and (b) for that year (whether it exceeds the original
5liability or the liability as later amended) may be carried
6forward and applied to the tax liability imposed by
7subsections (a) and (b) of the 5 taxable years following the
8excess credit year, provided that no credit may be carried
9forward to any year ending on or after December 31, 2003. This
10credit shall be applied first to the earliest year for which
11there is a liability. If there is a credit under this
12subsection from more than one tax year that is available to
13offset a liability the earliest credit arising under this
14subsection shall be applied first.
15    If, during any taxable year ending on or after December
1631, 1986, the tax imposed by subsections (c) and (d) of this
17Section for which a taxpayer has claimed a credit under this
18subsection (i) is reduced, the amount of credit for such tax
19shall also be reduced. Such reduction shall be determined by
20recomputing the credit to take into account the reduced tax
21imposed by subsections (c) and (d). If any portion of the
22reduced amount of credit has been carried to a different
23taxable year, an amended return shall be filed for such
24taxable year to reduce the amount of credit claimed.
25    (j) Training expense credit. Beginning with tax years
26ending on or after December 31, 1986 and prior to December 31,

 

 

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12003, a taxpayer shall be allowed a credit against the tax
2imposed by subsections (a) and (b) under this Section for all
3amounts paid or accrued, on behalf of all persons employed by
4the taxpayer in Illinois or Illinois residents employed
5outside of Illinois by a taxpayer, for educational or
6vocational training in semi-technical or technical fields or
7semi-skilled or skilled fields, which were deducted from gross
8income in the computation of taxable income. The credit
9against the tax imposed by subsections (a) and (b) shall be
101.6% of such training expenses. For partners, shareholders of
11subchapter S corporations, and owners of limited liability
12companies, if the liability company is treated as a
13partnership for purposes of federal and State income taxation,
14there shall be allowed a credit under this subsection (j) to be
15determined in accordance with the determination of income and
16distributive share of income under Sections 702 and 704 and
17subchapter S of the Internal Revenue Code.
18    Any credit allowed under this subsection which is unused
19in the year the credit is earned may be carried forward to each
20of the 5 taxable years following the year for which the credit
21is first computed until it is used. This credit shall be
22applied first to the earliest year for which there is a
23liability. If there is a credit under this subsection from
24more than one tax year that is available to offset a liability,
25the earliest credit arising under this subsection shall be
26applied first. No carryforward credit may be claimed in any

 

 

HB0392- 70 -LRB102 03939 HLH 13955 b

1tax year ending on or after December 31, 2003.
2    (k) Research and development credit. For tax years ending
3after July 1, 1990 and prior to December 31, 2003, and
4beginning again for tax years ending on or after December 31,
52004, and ending prior to January 1, 2027, a taxpayer shall be
6allowed a credit against the tax imposed by subsections (a)
7and (b) of this Section for increasing research activities in
8this State. The credit allowed against the tax imposed by
9subsections (a) and (b) shall be equal to 6 1/2% of the
10qualifying expenditures for increasing research activities in
11this State. For partners, shareholders of subchapter S
12corporations, and owners of limited liability companies, if
13the liability company is treated as a partnership for purposes
14of federal and State income taxation, there shall be allowed a
15credit under this subsection to be determined in accordance
16with the determination of income and distributive share of
17income under Sections 702 and 704 and subchapter S of the
18Internal Revenue Code.
19    For purposes of this subsection, "qualifying expenditures"
20means the qualifying expenditures as defined for the federal
21credit for increasing research activities which would be
22allowable under Section 41 of the Internal Revenue Code and
23which are conducted in this State, "qualifying expenditures
24for increasing research activities in this State" means the
25excess of qualifying expenditures for the taxable year in
26which incurred over qualifying expenditures for the base

 

 

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1period, "qualifying expenditures for the base period" means
2the average of the qualifying expenditures for each year in
3the base period, and "base period" means the 3 taxable years
4immediately preceding the taxable year for which the
5determination is being made.
6    Any credit in excess of the tax liability for the taxable
7year may be carried forward. A taxpayer may elect to have the
8unused credit shown on its final completed return carried over
9as a credit against the tax liability for the following 5
10taxable years or until it has been fully used, whichever
11occurs first; provided that no credit earned in a tax year
12ending prior to December 31, 2003 may be carried forward to any
13year ending on or after December 31, 2003.
14    If an unused credit is carried forward to a given year from
152 or more earlier years, that credit arising in the earliest
16year will be applied first against the tax liability for the
17given year. If a tax liability for the given year still
18remains, the credit from the next earliest year will then be
19applied, and so on, until all credits have been used or no tax
20liability for the given year remains. Any remaining unused
21credit or credits then will be carried forward to the next
22following year in which a tax liability is incurred, except
23that no credit can be carried forward to a year which is more
24than 5 years after the year in which the expense for which the
25credit is given was incurred.
26    No inference shall be drawn from Public Act 91-644 this

 

 

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1amendatory Act of the 91st General Assembly in construing this
2Section for taxable years beginning before January 1, 1999.
3    It is the intent of the General Assembly that the research
4and development credit under this subsection (k) shall apply
5continuously for all tax years ending on or after December 31,
62004 and ending prior to January 1, 2027, including, but not
7limited to, the period beginning on January 1, 2016 and ending
8on July 6, 2017 (the effective date of Public Act 100-22) this
9amendatory Act of the 100th General Assembly. All actions
10taken in reliance on the continuation of the credit under this
11subsection (k) by any taxpayer are hereby validated.
12    A taxpayer is not required to have obtained a research and
13development credit with respect to his or her federal income
14taxes to qualify for a credit under this subsection.
15    (l) Environmental Remediation Tax Credit.
16        (i) For tax years ending after December 31, 1997 and
17    on or before December 31, 2001, a taxpayer shall be
18    allowed a credit against the tax imposed by subsections
19    (a) and (b) of this Section for certain amounts paid for
20    unreimbursed eligible remediation costs, as specified in
21    this subsection. For purposes of this Section,
22    "unreimbursed eligible remediation costs" means costs
23    approved by the Illinois Environmental Protection Agency
24    ("Agency") under Section 58.14 of the Environmental
25    Protection Act that were paid in performing environmental
26    remediation at a site for which a No Further Remediation

 

 

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1    Letter was issued by the Agency and recorded under Section
2    58.10 of the Environmental Protection Act. The credit must
3    be claimed for the taxable year in which Agency approval
4    of the eligible remediation costs is granted. The credit
5    is not available to any taxpayer if the taxpayer or any
6    related party caused or contributed to, in any material
7    respect, a release of regulated substances on, in, or
8    under the site that was identified and addressed by the
9    remedial action pursuant to the Site Remediation Program
10    of the Environmental Protection Act. After the Pollution
11    Control Board rules are adopted pursuant to the Illinois
12    Administrative Procedure Act for the administration and
13    enforcement of Section 58.9 of the Environmental
14    Protection Act, determinations as to credit availability
15    for purposes of this Section shall be made consistent with
16    those rules. For purposes of this Section, "taxpayer"
17    includes a person whose tax attributes the taxpayer has
18    succeeded to under Section 381 of the Internal Revenue
19    Code and "related party" includes the persons disallowed a
20    deduction for losses by paragraphs (b), (c), and (f)(1) of
21    Section 267 of the Internal Revenue Code by virtue of
22    being a related taxpayer, as well as any of its partners.
23    The credit allowed against the tax imposed by subsections
24    (a) and (b) shall be equal to 25% of the unreimbursed
25    eligible remediation costs in excess of $100,000 per site,
26    except that the $100,000 threshold shall not apply to any

 

 

HB0392- 74 -LRB102 03939 HLH 13955 b

1    site contained in an enterprise zone as determined by the
2    Department of Commerce and Community Affairs (now
3    Department of Commerce and Economic Opportunity). The
4    total credit allowed shall not exceed $40,000 per year
5    with a maximum total of $150,000 per site. For partners
6    and shareholders of subchapter S corporations, there shall
7    be allowed a credit under this subsection to be determined
8    in accordance with the determination of income and
9    distributive share of income under Sections 702 and 704
10    and subchapter S of the Internal Revenue Code.
11        (ii) A credit allowed under this subsection that is
12    unused in the year the credit is earned may be carried
13    forward to each of the 5 taxable years following the year
14    for which the credit is first earned until it is used. The
15    term "unused credit" does not include any amounts of
16    unreimbursed eligible remediation costs in excess of the
17    maximum credit per site authorized under paragraph (i).
18    This credit shall be applied first to the earliest year
19    for which there is a liability. If there is a credit under
20    this subsection from more than one tax year that is
21    available to offset a liability, the earliest credit
22    arising under this subsection shall be applied first. A
23    credit allowed under this subsection may be sold to a
24    buyer as part of a sale of all or part of the remediation
25    site for which the credit was granted. The purchaser of a
26    remediation site and the tax credit shall succeed to the

 

 

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1    unused credit and remaining carry-forward period of the
2    seller. To perfect the transfer, the assignor shall record
3    the transfer in the chain of title for the site and provide
4    written notice to the Director of the Illinois Department
5    of Revenue of the assignor's intent to sell the
6    remediation site and the amount of the tax credit to be
7    transferred as a portion of the sale. In no event may a
8    credit be transferred to any taxpayer if the taxpayer or a
9    related party would not be eligible under the provisions
10    of subsection (i).
11        (iii) For purposes of this Section, the term "site"
12    shall have the same meaning as under Section 58.2 of the
13    Environmental Protection Act.
14    (m) Education expense credit. Beginning with tax years
15ending after December 31, 1999, a taxpayer who is the
16custodian of one or more qualifying pupils shall be allowed a
17credit against the tax imposed by subsections (a) and (b) of
18this Section for qualified education expenses incurred on
19behalf of the qualifying pupils. The credit shall be equal to
2025% of qualified education expenses, but in no event may the
21total credit under this subsection claimed by a family that is
22the custodian of qualifying pupils exceed (i) $500 for tax
23years ending prior to December 31, 2017, and (ii) $750 for tax
24years ending on or after December 31, 2017. In no event shall a
25credit under this subsection reduce the taxpayer's liability
26under this Act to less than zero. Notwithstanding any other

 

 

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1provision of law, for taxable years beginning on or after
2January 1, 2017, no taxpayer may claim a credit under this
3subsection (m) if the taxpayer's adjusted gross income for the
4taxable year exceeds (i) $500,000, in the case of spouses
5filing a joint federal tax return or (ii) $250,000, in the case
6of all other taxpayers. This subsection is exempt from the
7provisions of Section 250 of this Act.
8    For purposes of this subsection:
9    "Qualifying pupils" means individuals who (i) are
10residents of the State of Illinois, (ii) are under the age of
1121 at the close of the school year for which a credit is
12sought, and (iii) during the school year for which a credit is
13sought were full-time pupils enrolled in a kindergarten
14through twelfth grade education program at any school, as
15defined in this subsection.
16    "Qualified education expense" means the amount incurred on
17behalf of a qualifying pupil in excess of $250 for tuition,
18book fees, and lab fees at the school in which the pupil is
19enrolled during the regular school year.
20    "School" means any public or nonpublic elementary or
21secondary school in Illinois that is in compliance with Title
22VI of the Civil Rights Act of 1964 and attendance at which
23satisfies the requirements of Section 26-1 of the School Code,
24except that nothing shall be construed to require a child to
25attend any particular public or nonpublic school to qualify
26for the credit under this Section.

 

 

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

 

 

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

 

 

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1    credit was granted. The purchaser of a remediation site
2    and the tax credit shall succeed to the unused credit and
3    remaining carry-forward period of the seller. To perfect
4    the transfer, the assignor shall record the transfer in
5    the chain of title for the site and provide written notice
6    to the Director of the Illinois Department of Revenue of
7    the assignor's intent to sell the remediation site and the
8    amount of the tax credit to be transferred as a portion of
9    the sale. In no event may a credit be transferred to any
10    taxpayer if the taxpayer or a related party would not be
11    eligible under the provisions of subsection (i).
12        (iii) For purposes of this Section, the term "site"
13    shall have the same meaning as under Section 58.2 of the
14    Environmental Protection Act.
15    (o) For each of taxable years during the Compassionate Use
16of Medical Cannabis Program, a surcharge is imposed on all
17taxpayers on income arising from the sale or exchange of
18capital assets, depreciable business property, real property
19used in the trade or business, and Section 197 intangibles of
20an organization registrant under the Compassionate Use of
21Medical Cannabis Program Act. The amount of the surcharge is
22equal to the amount of federal income tax liability for the
23taxable year attributable to those sales and exchanges. The
24surcharge imposed does not apply if:
25        (1) the medical cannabis cultivation center
26    registration, medical cannabis dispensary registration, or

 

 

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1    the property of a registration is transferred as a result
2    of any of the following:
3            (A) bankruptcy, a receivership, or a debt
4        adjustment initiated by or against the initial
5        registration or the substantial owners of the initial
6        registration;
7            (B) cancellation, revocation, or termination of
8        any registration by the Illinois Department of Public
9        Health;
10            (C) a determination by the Illinois Department of
11        Public Health that transfer of the registration is in
12        the best interests of Illinois qualifying patients as
13        defined by the Compassionate Use of Medical Cannabis
14        Program Act;
15            (D) the death of an owner of the equity interest in
16        a registrant;
17            (E) the acquisition of a controlling interest in
18        the stock or substantially all of the assets of a
19        publicly traded company;
20            (F) a transfer by a parent company to a wholly
21        owned subsidiary; or
22            (G) the transfer or sale to or by one person to
23        another person where both persons were initial owners
24        of the registration when the registration was issued;
25        or
26        (2) the cannabis cultivation center registration,

 

 

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1    medical cannabis dispensary registration, or the
2    controlling interest in a registrant's property is
3    transferred in a transaction to lineal descendants in
4    which no gain or loss is recognized or as a result of a
5    transaction in accordance with Section 351 of the Internal
6    Revenue Code in which no gain or loss is recognized.
7    (p) Illinois Innovation Credit.
8        (1) For tax years ending on or after December 31,
9    2021, a taxpayer shall be allowed a credit against the tax
10    imposed by subsections (a) and (b) of this Section in an
11    amount equal to 1.3% of the qualified research expenses
12    made by the taxpayer in Illinois. In no event shall a
13    credit under this subsection reduce the taxpayer's
14    liability under this Act to less than zero. A taxpayer may
15    elect to have the unused credit shown on its final
16    completed return carried over as a credit against his or
17    her tax liability for the following 5 taxable years or
18    until the credit has been fully used, whichever occurs
19    first. This subsection (p) is exempt from the provisions
20    of Section 250 of this Act.
21        (2) As used in this subsection:
22        "Qualified research" means activities designed to
23    promote any or all of the following:
24            (A) new computer modeling technology;
25            (B) new 3D modeling or imaging technology;
26            (C) new public infrastructure materials; or

 

 

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1            (D) new public infrastructure design.
2        "Qualified research expenses" means:
3            (A) any wages paid or incurred to an employee for
4        qualified services performed by such employee;
5            (B) any amount paid or incurred for supplies used
6        in the conduct of qualified research; and
7            (C) any amount paid or incurred by the taxpayer to
8        any person (other than an employee of the taxpayer)
9        for qualified research.
10(Source: P.A. 100-22, eff. 7-6-17; 101-8, see Section 99 for
11effective date; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
12101-207, eff. 8-2-19; 101-363, eff. 8-9-19; revised 11-18-20.)
 
13    Section 95. No acceleration or delay. Where this Act makes
14changes in a statute that is represented in this Act by text
15that is not yet or no longer in effect (for example, a Section
16represented by multiple versions), the use of that text does
17not accelerate or delay the taking effect of (i) the changes
18made by this Act or (ii) provisions derived from any other
19Public Act.