Illinois General Assembly - Full Text of SB2124
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Full Text of SB2124  102nd General Assembly

SB2124 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB2124

 

Introduced 2/26/2021, by Sen. Robert Peters

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/201

    Amends the Illinois Income Tax Code. Provides, for tax years ending on or after December 31, 2021, a surcharge is imposed on an Illinois resident's low-taxed investment income. Defines "low-taxed investment income". Provides how the surcharge is calculated. Exempts from the surcharge: (i) resident married individuals filing joint returns, if Illinois taxable income is not more than $250,000; (ii) a resident head of household, if Illinois taxable income is not more than $200,000; and (iii) resident unmarried individuals, resident married individuals filing separate returns, and resident estates and trusts, if Illinois taxable income is not more than $150,000. Effective immediately.


LRB102 14997 HLH 20352 b

 

 

A BILL FOR

 

SB2124LRB102 14997 HLH 20352 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

 

 

SB2124- 8 -LRB102 14997 HLH 20352 b

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

 

 

SB2124- 9 -LRB102 14997 HLH 20352 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

 

 

SB2124- 10 -LRB102 14997 HLH 20352 b

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

 

 

SB2124- 12 -LRB102 14997 HLH 20352 b

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

 

 

SB2124- 14 -LRB102 14997 HLH 20352 b

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.

 

 

SB2124- 15 -LRB102 14997 HLH 20352 b

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

 

 

SB2124- 16 -LRB102 14997 HLH 20352 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.

 

 

SB2124- 17 -LRB102 14997 HLH 20352 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

 

 

SB2124- 18 -LRB102 14997 HLH 20352 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

 

 

SB2124- 26 -LRB102 14997 HLH 20352 b

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)

 

 

SB2124- 27 -LRB102 14997 HLH 20352 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

 

 

SB2124- 28 -LRB102 14997 HLH 20352 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

 

 

SB2124- 29 -LRB102 14997 HLH 20352 b

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"

 

 

SB2124- 30 -LRB102 14997 HLH 20352 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

 

 

SB2124- 31 -LRB102 14997 HLH 20352 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    (l) Environmental Remediation Tax Credit.
20        (i) For tax years ending after December 31, 1997 and
21    on or before December 31, 2001, a taxpayer shall be
22    allowed a credit against the tax imposed by subsections
23    (a) and (b) of this Section for certain amounts paid for
24    unreimbursed eligible remediation costs, as specified in
25    this subsection. For purposes of this Section,
26    "unreimbursed eligible remediation costs" means costs

 

 

SB2124- 32 -LRB102 14997 HLH 20352 b

1    approved by the Illinois Environmental Protection Agency
2    ("Agency") under Section 58.14 of the Environmental
3    Protection Act that were paid in performing environmental
4    remediation at a site for which a No Further Remediation
5    Letter was issued by the Agency and recorded under Section
6    58.10 of the Environmental Protection Act. The credit must
7    be claimed for the taxable year in which Agency approval
8    of the eligible remediation costs is granted. The credit
9    is not available to any taxpayer if the taxpayer or any
10    related party caused or contributed to, in any material
11    respect, a release of regulated substances on, in, or
12    under the site that was identified and addressed by the
13    remedial action pursuant to the Site Remediation Program
14    of the Environmental Protection Act. After the Pollution
15    Control Board rules are adopted pursuant to the Illinois
16    Administrative Procedure Act for the administration and
17    enforcement of Section 58.9 of the Environmental
18    Protection Act, determinations as to credit availability
19    for purposes of this Section shall be made consistent with
20    those rules. For purposes of this Section, "taxpayer"
21    includes a person whose tax attributes the taxpayer has
22    succeeded to under Section 381 of the Internal Revenue
23    Code and "related party" includes the persons disallowed a
24    deduction for losses by paragraphs (b), (c), and (f)(1) of
25    Section 267 of the Internal Revenue Code by virtue of
26    being a related taxpayer, as well as any of its partners.

 

 

SB2124- 33 -LRB102 14997 HLH 20352 b

1    The credit allowed against the tax imposed by subsections
2    (a) and (b) shall be equal to 25% of the unreimbursed
3    eligible remediation costs in excess of $100,000 per site,
4    except that the $100,000 threshold shall not apply to any
5    site contained in an enterprise zone as determined by the
6    Department of Commerce and Community Affairs (now
7    Department of Commerce and Economic Opportunity). The
8    total credit allowed shall not exceed $40,000 per year
9    with a maximum total of $150,000 per site. For partners
10    and shareholders of subchapter S corporations, there shall
11    be allowed a credit under this subsection to be determined
12    in accordance with the determination of income and
13    distributive share of income under Sections 702 and 704
14    and subchapter S of the Internal Revenue Code.
15        (ii) A credit allowed under this subsection that is
16    unused in the year the credit is earned may be carried
17    forward to each of the 5 taxable years following the year
18    for which the credit is first earned until it is used. The
19    term "unused credit" does not include any amounts of
20    unreimbursed eligible remediation costs in excess of the
21    maximum credit per site authorized under paragraph (i).
22    This credit shall be applied first to the earliest year
23    for which there is a liability. If there is a credit under
24    this subsection from more than one tax year that is
25    available to offset a liability, the earliest credit
26    arising under this subsection shall be applied first. A

 

 

SB2124- 34 -LRB102 14997 HLH 20352 b

1    credit allowed under this subsection may be sold to a
2    buyer as part of a sale of all or part of the remediation
3    site for which the credit was granted. The purchaser of a
4    remediation site and the tax credit shall succeed to the
5    unused credit and remaining carry-forward period of the
6    seller. To perfect the transfer, the assignor shall record
7    the transfer in the chain of title for the site and provide
8    written notice to the Director of the Illinois Department
9    of Revenue of the assignor's intent to sell the
10    remediation site and the amount of the tax credit to be
11    transferred as a portion of the sale. In no event may a
12    credit be transferred to any taxpayer if the taxpayer or a
13    related party would not be eligible under the provisions
14    of subsection (i).
15        (iii) For purposes of this Section, the term "site"
16    shall have the same meaning as under Section 58.2 of the
17    Environmental Protection Act.
18    (m) Education expense credit. Beginning with tax years
19ending after December 31, 1999, a taxpayer who is the
20custodian of one or more qualifying pupils shall be allowed a
21credit against the tax imposed by subsections (a) and (b) of
22this Section for qualified education expenses incurred on
23behalf of the qualifying pupils. The credit shall be equal to
2425% of qualified education expenses, but in no event may the
25total credit under this subsection claimed by a family that is
26the custodian of qualifying pupils exceed (i) $500 for tax

 

 

SB2124- 35 -LRB102 14997 HLH 20352 b

1years ending prior to December 31, 2017, and (ii) $750 for tax
2years ending on or after December 31, 2017. In no event shall a
3credit under this subsection reduce the taxpayer's liability
4under this Act to less than zero. Notwithstanding any other
5provision of law, for taxable years beginning on or after
6January 1, 2017, no taxpayer may claim a credit under this
7subsection (m) if the taxpayer's adjusted gross income for the
8taxable year exceeds (i) $500,000, in the case of spouses
9filing a joint federal tax return or (ii) $250,000, in the case
10of all other taxpayers. This subsection is exempt from the
11provisions of Section 250 of this Act.
12    For purposes of this subsection:
13    "Qualifying pupils" means individuals who (i) are
14residents of the State of Illinois, (ii) are under the age of
1521 at the close of the school year for which a credit is
16sought, and (iii) during the school year for which a credit is
17sought were full-time pupils enrolled in a kindergarten
18through twelfth grade education program at any school, as
19defined in this subsection.
20    "Qualified education expense" means the amount incurred on
21behalf of a qualifying pupil in excess of $250 for tuition,
22book fees, and lab fees at the school in which the pupil is
23enrolled during the regular school year.
24    "School" means any public or nonpublic elementary or
25secondary school in Illinois that is in compliance with Title
26VI of the Civil Rights Act of 1964 and attendance at which

 

 

SB2124- 36 -LRB102 14997 HLH 20352 b

1satisfies the requirements of Section 26-1 of the School Code,
2except that nothing shall be construed to require a child to
3attend any particular public or nonpublic school to qualify
4for the credit under this Section.
5    "Custodian" means, with respect to qualifying pupils, an
6Illinois resident who is a parent, the parents, a legal
7guardian, or the legal guardians of the qualifying pupils.
8    (n) River Edge Redevelopment Zone site remediation tax
9credit.
10        (i) For tax years ending on or after December 31,
11    2006, a taxpayer shall be allowed a credit against the tax
12    imposed by subsections (a) and (b) of this Section for
13    certain amounts paid for unreimbursed eligible remediation
14    costs, as specified in this subsection. For purposes of
15    this Section, "unreimbursed eligible remediation costs"
16    means costs approved by the Illinois Environmental
17    Protection Agency ("Agency") under Section 58.14a of the
18    Environmental Protection Act that were paid in performing
19    environmental remediation at a site within a River Edge
20    Redevelopment Zone for which a No Further Remediation
21    Letter was issued by the Agency and recorded under Section
22    58.10 of the Environmental Protection Act. The credit must
23    be claimed for the taxable year in which Agency approval
24    of the eligible remediation costs is granted. The credit
25    is not available to any taxpayer if the taxpayer or any
26    related party caused or contributed to, in any material

 

 

SB2124- 37 -LRB102 14997 HLH 20352 b

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

 

 

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

 

 

SB2124- 39 -LRB102 14997 HLH 20352 b

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

 

 

SB2124- 40 -LRB102 14997 HLH 20352 b

1        another person where both persons were initial owners
2        of the registration when the registration was issued;
3        or
4        (2) the cannabis cultivation center registration,
5    medical cannabis dispensary registration, or the
6    controlling interest in a registrant's property is
7    transferred in a transaction to lineal descendants in
8    which no gain or loss is recognized or as a result of a
9    transaction in accordance with Section 351 of the Internal
10    Revenue Code in which no gain or loss is recognized.
11    (p) Surcharge on low-taxed investment income. For tax
12years ending on or after December 31, 2021, a surcharge is
13imposed on an Illinois resident's low-taxed investment income
14as follows:
15        (1) As used in this subsection, "low-taxed investment
16    income" means the amount of an individual's Illinois
17    adjusted gross income attributable to long-term capital
18    gain, dividends, or any other type of income taxed under
19    the preferential rates of Section 1(h) of the Internal
20    Revenue Code.
21        (2) The surcharge imposed under this subsection shall
22    be equal to (i) the difference between (A) the applicable
23    federal income tax rate that would be imposed on an
24    individual's low-taxed investment income if it were
25    subject to the federal income tax rates imposed on
26    ordinary income under Section 1 of the Internal Revenue

 

 

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1    Code and (B) the applicable federal income tax rate
2    imposed at the preferential rates under Section 1(h) of
3    the Internal Revenue Code, multiplied by (ii) the amount
4    of an individual's low-taxed investment income.
5        (3) The surcharge under paragraph (2) shall be
6    multiplied by a phase-in fraction to determine the amount
7    due under this subsection. The phase-in fraction is
8    computed as follows: the numerator is the lesser of (i)
9    the taxpayer's income in excess of the taxpayer's Illinois
10    adjusted gross income for the taxable year over the
11    applicable amount defined in paragraph (4) of this
12    subsection or (ii) $50,000, and the denominator is
13    $50,000.
14        (4) This subsection does not apply to the following
15    persons:
16            (i) Resident married individuals filing joint
17        returns, if Illinois taxable income is not more than
18        $250,000.
19            (ii) A resident head of household, if Illinois
20        taxable income is not more than $200,000.
21            (iii) Resident unmarried individuals, resident
22        married individuals filing separate returns, and
23        resident estates and trusts, if Illinois taxable
24        income is not more than $150,000.
25    
26(Source: P.A. 100-22, eff. 7-6-17; 101-9, eff. 6-5-19; 101-31,

 

 

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1eff. 6-28-19; 101-207, eff. 8-2-19; 101-363, eff. 8-9-19;
2revised 11-18-20.)
 
3    (Text of Section with the changes made by P.A. 101-8,
4which did not take effect (see Section 99 of P.A. 101-8))
5    Sec. 201. Tax imposed.
6    (a) In general. A tax measured by net income is hereby
7imposed on every individual, corporation, trust and estate for
8each taxable year ending after July 31, 1969 on the privilege
9of earning or receiving income in or as a resident of this
10State. Such tax shall be in addition to all other occupation or
11privilege taxes imposed by this State or by any municipal
12corporation or political subdivision thereof.
13    (b) Rates. The tax imposed by subsection (a) of this
14Section shall be determined as follows, except as adjusted by
15subsection (d-1):
16        (1) In the case of an individual, trust or estate, for
17    taxable years ending prior to July 1, 1989, an amount
18    equal to 2 1/2% of the taxpayer's net income for the
19    taxable year.
20        (2) In the case of an individual, trust or estate, for
21    taxable years beginning prior to July 1, 1989 and ending
22    after June 30, 1989, an amount equal to the sum of (i) 2
23    1/2% of the taxpayer's net income for the period prior to
24    July 1, 1989, as calculated under Section 202.3, and (ii)
25    3% of the taxpayer's net income for the period after June

 

 

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1    30, 1989, as calculated under Section 202.3.
2        (3) In the case of an individual, trust or estate, for
3    taxable years beginning after June 30, 1989, and ending
4    prior to January 1, 2011, an amount equal to 3% of the
5    taxpayer's net income for the taxable year.
6        (4) In the case of an individual, trust, or estate,
7    for taxable years beginning prior to January 1, 2011, and
8    ending after December 31, 2010, an amount equal to the sum
9    of (i) 3% of the taxpayer's net income for the period prior
10    to January 1, 2011, as calculated under Section 202.5, and
11    (ii) 5% of the taxpayer's net income for the period after
12    December 31, 2010, as calculated under Section 202.5.
13        (5) In the case of an individual, trust, or estate,
14    for taxable years beginning on or after January 1, 2011,
15    and ending prior to January 1, 2015, an amount equal to 5%
16    of the taxpayer's net income for the taxable year.
17        (5.1) In the case of an individual, trust, or estate,
18    for taxable years beginning prior to January 1, 2015, and
19    ending after December 31, 2014, an amount equal to the sum
20    of (i) 5% of the taxpayer's net income for the period prior
21    to January 1, 2015, as calculated under Section 202.5, and
22    (ii) 3.75% of the taxpayer's net income for the period
23    after December 31, 2014, as calculated under Section
24    202.5.
25        (5.2) In the case of an individual, trust, or estate,
26    for taxable years beginning on or after January 1, 2015,

 

 

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1    and ending prior to July 1, 2017, an amount equal to 3.75%
2    of the taxpayer's net income for the taxable year.
3        (5.3) In the case of an individual, trust, or estate,
4    for taxable years beginning prior to July 1, 2017, and
5    ending after June 30, 2017, an amount equal to the sum of
6    (i) 3.75% of the taxpayer's net income for the period
7    prior to July 1, 2017, as calculated under Section 202.5,
8    and (ii) 4.95% of the taxpayer's net income for the period
9    after June 30, 2017, as calculated under Section 202.5.
10        (5.4) In the case of an individual, trust, or estate,
11    for taxable years beginning on or after July 1, 2017 and
12    beginning prior to January 1, 2021, an amount equal to
13    4.95% of the taxpayer's net income for the taxable year.
14        (5.5) In the case of an individual, trust, or estate,
15    for taxable years beginning on or after January 1, 2021,
16    an amount calculated under the rate structure set forth in
17    Section 201.1.
18        (6) In the case of a corporation, for taxable years
19    ending prior to July 1, 1989, an amount equal to 4% of the
20    taxpayer's net income for the taxable year.
21        (7) In the case of a corporation, for taxable years
22    beginning prior to July 1, 1989 and ending after June 30,
23    1989, an amount equal to the sum of (i) 4% of the
24    taxpayer's net income for the period prior to July 1,
25    1989, as calculated under Section 202.3, and (ii) 4.8% of
26    the taxpayer's net income for the period after June 30,

 

 

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1    1989, as calculated under Section 202.3.
2        (8) In the case of a corporation, for taxable years
3    beginning after June 30, 1989, and ending prior to January
4    1, 2011, an amount equal to 4.8% of the taxpayer's net
5    income for the taxable year.
6        (9) In the case of a corporation, for taxable years
7    beginning prior to January 1, 2011, and ending after
8    December 31, 2010, an amount equal to the sum of (i) 4.8%
9    of the taxpayer's net income for the period prior to
10    January 1, 2011, as calculated under Section 202.5, and
11    (ii) 7% of the taxpayer's net income for the period after
12    December 31, 2010, as calculated under Section 202.5.
13        (10) In the case of a corporation, for taxable years
14    beginning on or after January 1, 2011, and ending prior to
15    January 1, 2015, an amount equal to 7% of the taxpayer's
16    net income for the taxable year.
17        (11) In the case of a corporation, for taxable years
18    beginning prior to January 1, 2015, and ending after
19    December 31, 2014, an amount equal to the sum of (i) 7% of
20    the taxpayer's net income for the period prior to January
21    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
22    of the taxpayer's net income for the period after December
23    31, 2014, as calculated under Section 202.5.
24        (12) In the case of a corporation, for taxable years
25    beginning on or after January 1, 2015, and ending prior to
26    July 1, 2017, an amount equal to 5.25% of the taxpayer's

 

 

SB2124- 46 -LRB102 14997 HLH 20352 b

1    net income for the taxable year.
2        (13) In the case of a corporation, for taxable years
3    beginning prior to July 1, 2017, and ending after June 30,
4    2017, an amount equal to the sum of (i) 5.25% of the
5    taxpayer's net income for the period prior to July 1,
6    2017, as calculated under Section 202.5, and (ii) 7% of
7    the taxpayer's net income for the period after June 30,
8    2017, as calculated under Section 202.5.
9        (14) In the case of a corporation, for taxable years
10    beginning on or after July 1, 2017 and beginning prior to
11    January 1, 2021, an amount equal to 7% of the taxpayer's
12    net income for the taxable year.
13        (15) In the case of a corporation, for taxable years
14    beginning on or after January 1, 2021, an amount equal to
15    7.99% of the taxpayer's net income for the taxable year.
16    The rates under this subsection (b) are subject to the
17provisions of Section 201.5.
18    (b-5) Surcharge; sale or exchange of assets, properties,
19and intangibles of organization gaming licensees. For each of
20taxable years 2019 through 2027, a surcharge is imposed on all
21taxpayers on income arising from the sale or exchange of
22capital assets, depreciable business property, real property
23used in the trade or business, and Section 197 intangibles (i)
24of an organization licensee under the Illinois Horse Racing
25Act of 1975 and (ii) of an organization gaming licensee under
26the Illinois Gambling Act. The amount of the surcharge is

 

 

SB2124- 47 -LRB102 14997 HLH 20352 b

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

 

 

SB2124- 48 -LRB102 14997 HLH 20352 b

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

 

 

SB2124- 49 -LRB102 14997 HLH 20352 b

1addition to the income tax imposed by subsections (a) and (b)
2of this Section and in addition to all other occupation or
3privilege taxes imposed by this State or by any municipal
4corporation or political subdivision thereof.
5    (d) Additional Personal Property Tax Replacement Income
6Tax Rates. The personal property tax replacement income tax
7imposed by this subsection and subsection (c) of this Section
8in the case of a corporation, other than a Subchapter S
9corporation and except as adjusted by subsection (d-1), shall
10be an additional amount equal to 2.85% of such taxpayer's net
11income for the taxable year, except that beginning on January
121, 1981, and thereafter, the rate of 2.85% specified in this
13subsection shall be reduced to 2.5%, and in the case of a
14partnership, trust or a Subchapter S corporation shall be an
15additional amount equal to 1.5% of such taxpayer's net income
16for the taxable year.
17    (d-1) Rate reduction for certain foreign insurers. In the
18case of a foreign insurer, as defined by Section 35A-5 of the
19Illinois Insurance Code, whose state or country of domicile
20imposes on insurers domiciled in Illinois a retaliatory tax
21(excluding any insurer whose premiums from reinsurance assumed
22are 50% or more of its total insurance premiums as determined
23under paragraph (2) of subsection (b) of Section 304, except
24that for purposes of this determination premiums from
25reinsurance do not include premiums from inter-affiliate
26reinsurance arrangements), beginning with taxable years ending

 

 

SB2124- 50 -LRB102 14997 HLH 20352 b

1on or after December 31, 1999, the sum of the rates of tax
2imposed by subsections (b) and (d) shall be reduced (but not
3increased) to the rate at which the total amount of tax imposed
4under this Act, net of all credits allowed under this Act,
5shall equal (i) the total amount of tax that would be imposed
6on the foreign insurer's net income allocable to Illinois for
7the taxable year by such foreign insurer's state or country of
8domicile if that net income were subject to all income taxes
9and taxes measured by net income imposed by such foreign
10insurer's state or country of domicile, net of all credits
11allowed or (ii) a rate of zero if no such tax is imposed on
12such income by the foreign insurer's state of domicile. For
13the purposes of this subsection (d-1), an inter-affiliate
14includes a mutual insurer under common management.
15        (1) For the purposes of subsection (d-1), in no event
16    shall the sum of the rates of tax imposed by subsections
17    (b) and (d) be reduced below the rate at which the sum of:
18            (A) the total amount of tax imposed on such
19        foreign insurer under this Act for a taxable year, net
20        of all credits allowed under this Act, plus
21            (B) the privilege tax imposed by Section 409 of
22        the Illinois Insurance Code, the fire insurance
23        company tax imposed by Section 12 of the Fire
24        Investigation Act, and the fire department taxes
25        imposed under Section 11-10-1 of the Illinois
26        Municipal Code,

 

 

SB2124- 51 -LRB102 14997 HLH 20352 b

1    equals 1.25% for taxable years ending prior to December
2    31, 2003, or 1.75% for taxable years ending on or after
3    December 31, 2003, of the net taxable premiums written for
4    the taxable year, as described by subsection (1) of
5    Section 409 of the Illinois Insurance Code. This paragraph
6    will in no event increase the rates imposed under
7    subsections (b) and (d).
8        (2) Any reduction in the rates of tax imposed by this
9    subsection shall be applied first against the rates
10    imposed by subsection (b) and only after the tax imposed
11    by subsection (a) net of all credits allowed under this
12    Section other than the credit allowed under subsection (i)
13    has been reduced to zero, against the rates imposed by
14    subsection (d).
15    This subsection (d-1) is exempt from the provisions of
16Section 250.
17    (e) Investment credit. A taxpayer shall be allowed a
18credit against the Personal Property Tax Replacement Income
19Tax for investment in qualified property.
20        (1) A taxpayer shall be allowed a credit equal to .5%
21    of the basis of qualified property placed in service
22    during the taxable year, provided such property is placed
23    in service on or after July 1, 1984. There shall be allowed
24    an additional credit equal to .5% of the basis of
25    qualified property placed in service during the taxable
26    year, provided such property is placed in service on or

 

 

SB2124- 52 -LRB102 14997 HLH 20352 b

1    after July 1, 1986, and the taxpayer's base employment
2    within Illinois has increased by 1% or more over the
3    preceding year as determined by the taxpayer's employment
4    records filed with the Illinois Department of Employment
5    Security. Taxpayers who are new to Illinois shall be
6    deemed to have met the 1% growth in base employment for the
7    first year in which they file employment records with the
8    Illinois Department of Employment Security. The provisions
9    added to this Section by Public Act 85-1200 (and restored
10    by Public Act 87-895) shall be construed as declaratory of
11    existing law and not as a new enactment. If, in any year,
12    the increase in base employment within Illinois over the
13    preceding year is less than 1%, the additional credit
14    shall be limited to that percentage times a fraction, the
15    numerator of which is .5% and the denominator of which is
16    1%, but shall not exceed .5%. The investment credit shall
17    not be allowed to the extent that it would reduce a
18    taxpayer's liability in any tax year below zero, nor may
19    any credit for qualified property be allowed for any year
20    other than the year in which the property was placed in
21    service in Illinois. For tax years ending on or after
22    December 31, 1987, and on or before December 31, 1988, the
23    credit shall be allowed for the tax year in which the
24    property is placed in service, or, if the amount of the
25    credit exceeds the tax liability for that year, whether it
26    exceeds the original liability or the liability as later

 

 

SB2124- 53 -LRB102 14997 HLH 20352 b

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

 

 

SB2124- 54 -LRB102 14997 HLH 20352 b

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

 

 

SB2124- 55 -LRB102 14997 HLH 20352 b

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

 

 

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1        (6) The term "placed in service" shall have the same
2    meaning as under Section 46 of the Internal Revenue Code.
3        (7) If during any taxable year, any property ceases to
4    be qualified property in the hands of the taxpayer within
5    48 months after being placed in service, or the situs of
6    any qualified property is moved outside Illinois within 48
7    months after being placed in service, the Personal
8    Property Tax Replacement Income Tax for such taxable year
9    shall be increased. Such increase shall be determined by
10    (i) recomputing the investment credit which would have
11    been allowed for the year in which credit for such
12    property was originally allowed by eliminating such
13    property from such computation and, (ii) subtracting such
14    recomputed credit from the amount of credit previously
15    allowed. For the purposes of this paragraph (7), a
16    reduction of the basis of qualified property resulting
17    from a redetermination of the purchase price shall be
18    deemed a disposition of qualified property to the extent
19    of such reduction.
20        (8) Unless the investment credit is extended by law,
21    the basis of qualified property shall not include costs
22    incurred after December 31, 2018, except for costs
23    incurred pursuant to a binding contract entered into on or
24    before December 31, 2018.
25        (9) Each taxable year ending before December 31, 2000,
26    a partnership may elect to pass through to its partners

 

 

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

 

 

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1    and Subchapter S of the Internal Revenue Code. This
2    paragraph is exempt from the provisions of Section 250.
3    (f) Investment credit; Enterprise Zone; River Edge
4Redevelopment Zone.
5        (1) A taxpayer shall be allowed a credit against the
6    tax imposed by subsections (a) and (b) of this Section for
7    investment in qualified property which is placed in
8    service in an Enterprise Zone created pursuant to the
9    Illinois Enterprise Zone Act or, for property placed in
10    service on or after July 1, 2006, a River Edge
11    Redevelopment Zone established pursuant to the River Edge
12    Redevelopment Zone Act. For partners, shareholders of
13    Subchapter S corporations, and owners of limited liability
14    companies, if the liability company is treated as a
15    partnership for purposes of federal and State income
16    taxation, there shall be allowed a credit under this
17    subsection (f) to be determined in accordance with the
18    determination of income and distributive share of income
19    under Sections 702 and 704 and Subchapter S of the
20    Internal Revenue Code. The credit shall be .5% of the
21    basis for such property. The credit shall be available
22    only in the taxable year in which the property is placed in
23    service in the Enterprise Zone or River Edge Redevelopment
24    Zone and shall not be allowed to the extent that it would
25    reduce a taxpayer's liability for the tax imposed by
26    subsections (a) and (b) of this Section to below zero. For

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    Section 250.
2    (g) (Blank).
3    (h) Investment credit; High Impact Business.
4        (1) Subject to subsections (b) and (b-5) of Section
5    5.5 of the Illinois Enterprise Zone Act, a taxpayer shall
6    be allowed a credit against the tax imposed by subsections
7    (a) and (b) of this Section for investment in qualified
8    property which is placed in service by a Department of
9    Commerce and Economic Opportunity designated High Impact
10    Business. The credit shall be .5% of the basis for such
11    property. The credit shall not be available (i) until the
12    minimum investments in qualified property set forth in
13    subdivision (a)(3)(A) of Section 5.5 of the Illinois
14    Enterprise Zone Act have been satisfied or (ii) until the
15    time authorized in subsection (b-5) of the Illinois
16    Enterprise Zone Act for entities designated as High Impact
17    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
18    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
19    Act, and shall not be allowed to the extent that it would
20    reduce a taxpayer's liability for the tax imposed by
21    subsections (a) and (b) of this Section to below zero. The
22    credit applicable to such investments shall be taken in
23    the taxable year in which such investments have been
24    completed. The credit for additional investments beyond
25    the minimum investment by a designated high impact
26    business authorized under subdivision (a)(3)(A) of Section

 

 

SB2124- 64 -LRB102 14997 HLH 20352 b

1    5.5 of the Illinois Enterprise Zone Act shall be available
2    only in the taxable year in which the property is placed in
3    service and shall not be allowed to the extent that it
4    would reduce a taxpayer's liability for the tax imposed by
5    subsections (a) and (b) of this Section to below zero. For
6    tax years ending on or after December 31, 1987, the credit
7    shall be allowed for the tax year in which the property is
8    placed in service, or, if the amount of the credit exceeds
9    the tax liability for that year, whether it exceeds the
10    original liability or the liability as later amended, such
11    excess may be carried forward and applied to the tax
12    liability of the 5 taxable years following the excess
13    credit year. The credit shall be applied to the earliest
14    year for which there is a liability. If there is credit
15    from more than one tax year that is available to offset a
16    liability, the credit accruing first in time shall be
17    applied first.
18        Changes made in this subdivision (h)(1) by Public Act
19    88-670 restore changes made by Public Act 85-1182 and
20    reflect existing law.
21        (2) The term qualified property means property which:
22            (A) is tangible, whether new or used, including
23        buildings and structural components of buildings;
24            (B) is depreciable pursuant to Section 167 of the
25        Internal Revenue Code, except that "3-year property"
26        as defined in Section 168(c)(2)(A) of that Code is not

 

 

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1        eligible for the credit provided by this subsection
2        (h);
3            (C) is acquired by purchase as defined in Section
4        179(d) of the Internal Revenue Code; and
5            (D) is not eligible for the Enterprise Zone
6        Investment Credit provided by subsection (f) of this
7        Section.
8        (3) The basis of qualified property shall be the basis
9    used to compute the depreciation deduction for federal
10    income tax purposes.
11        (4) If the basis of the property for federal income
12    tax depreciation purposes is increased after it has been
13    placed in service in a federally designated Foreign Trade
14    Zone or Sub-Zone located in Illinois by the taxpayer, the
15    amount of such increase shall be deemed property placed in
16    service on the date of such increase in basis.
17        (5) The term "placed in service" shall have the same
18    meaning as under Section 46 of the Internal Revenue Code.
19        (6) If during any taxable year ending on or before
20    December 31, 1996, any property ceases to be qualified
21    property in the hands of the taxpayer within 48 months
22    after being placed in service, or the situs of any
23    qualified property is moved outside Illinois within 48
24    months after being placed in service, the tax imposed
25    under subsections (a) and (b) of this Section for such
26    taxable year shall be increased. Such increase shall be

 

 

SB2124- 66 -LRB102 14997 HLH 20352 b

1    determined by (i) recomputing the investment credit which
2    would have been allowed for the year in which credit for
3    such 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 (6), 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        (7) Beginning with tax years ending after December 31,
12    1996, if a taxpayer qualifies for the credit under this
13    subsection (h) and thereby is granted a tax abatement and
14    the taxpayer relocates its entire facility in violation of
15    the explicit terms and length of the contract under
16    Section 18-183 of the Property Tax Code, the tax imposed
17    under subsections (a) and (b) of this Section shall be
18    increased for the taxable year in which the taxpayer
19    relocated its facility by an amount equal to the amount of
20    credit received by the taxpayer under this subsection (h).
21    (h-5) High Impact Business construction constructions jobs
22credit. For taxable years beginning on or after January 1,
232021, there shall also be allowed a High Impact Business
24construction jobs credit against the tax imposed under
25subsections (a) and (b) of this Section as provided in
26subsections (i) and (j) of Section 5.5 of the Illinois

 

 

SB2124- 67 -LRB102 14997 HLH 20352 b

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

 

 

SB2124- 68 -LRB102 14997 HLH 20352 b

1Tax. For tax years ending prior to December 31, 2003, a credit
2shall be allowed against the tax imposed by subsections (a)
3and (b) of this Section for the tax imposed by subsections (c)
4and (d) of this Section. This credit shall be computed by
5multiplying the tax imposed by subsections (c) and (d) of this
6Section by a fraction, the numerator of which is base income
7allocable to Illinois and the denominator of which is Illinois
8base income, and further multiplying the product by the tax
9rate imposed by subsections (a) and (b) of this Section.
10    Any credit earned on or after December 31, 1986 under this
11subsection which is unused in the year the credit is computed
12because it exceeds the tax liability imposed by subsections
13(a) and (b) for that year (whether it exceeds the original
14liability or the liability as later amended) may be carried
15forward and applied to the tax liability imposed by
16subsections (a) and (b) of the 5 taxable years following the
17excess credit year, provided that no credit may be carried
18forward to any year ending on or after December 31, 2003. This
19credit shall be applied first to the earliest year for which
20there is a liability. If there is a credit under this
21subsection from more than one tax year that is available to
22offset a liability the earliest credit arising under this
23subsection shall be applied first.
24    If, during any taxable year ending on or after December
2531, 1986, the tax imposed by subsections (c) and (d) of this
26Section for which a taxpayer has claimed a credit under this

 

 

SB2124- 69 -LRB102 14997 HLH 20352 b

1subsection (i) is reduced, the amount of credit for such tax
2shall also be reduced. Such reduction shall be determined by
3recomputing the credit to take into account the reduced tax
4imposed by subsections (c) and (d). If any portion of the
5reduced amount of credit has been carried to a different
6taxable year, an amended return shall be filed for such
7taxable year to reduce the amount of credit claimed.
8    (j) Training expense credit. Beginning with tax years
9ending on or after December 31, 1986 and prior to December 31,
102003, a taxpayer shall be allowed a credit against the tax
11imposed by subsections (a) and (b) under this Section for all
12amounts paid or accrued, on behalf of all persons employed by
13the taxpayer in Illinois or Illinois residents employed
14outside of Illinois by a taxpayer, for educational or
15vocational training in semi-technical or technical fields or
16semi-skilled or skilled fields, which were deducted from gross
17income in the computation of taxable income. The credit
18against the tax imposed by subsections (a) and (b) shall be
191.6% of such training expenses. For partners, shareholders of
20subchapter S corporations, and owners of limited liability
21companies, if the liability company is treated as a
22partnership for purposes of federal and State income taxation,
23there shall be allowed a credit under this subsection (j) to be
24determined in accordance with the determination of income and
25distributive share of income under Sections 702 and 704 and
26subchapter S of the Internal Revenue Code.

 

 

SB2124- 70 -LRB102 14997 HLH 20352 b

1    Any credit allowed under this subsection which is unused
2in the year the credit is earned may be carried forward to each
3of the 5 taxable years following the year for which the credit
4is first computed until it is used. This credit shall be
5applied first to the earliest year for which there is a
6liability. If there is a credit under this subsection from
7more than one tax year that is available to offset a liability,
8the earliest credit arising under this subsection shall be
9applied first. No carryforward credit may be claimed in any
10tax year ending on or after December 31, 2003.
11    (k) Research and development credit. For tax years ending
12after July 1, 1990 and prior to December 31, 2003, and
13beginning again for tax years ending on or after December 31,
142004, and ending prior to January 1, 2027, a taxpayer shall be
15allowed a credit against the tax imposed by subsections (a)
16and (b) of this Section for increasing research activities in
17this State. The credit allowed against the tax imposed by
18subsections (a) and (b) shall be equal to 6 1/2% of the
19qualifying expenditures for increasing research activities in
20this State. For partners, shareholders of subchapter S
21corporations, and owners of limited liability companies, if
22the liability company is treated as a partnership for purposes
23of federal and State income taxation, there shall be allowed a
24credit under this subsection to be determined in accordance
25with the determination of income and distributive share of
26income under Sections 702 and 704 and subchapter S of the

 

 

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1Internal Revenue Code.
2    For purposes of this subsection, "qualifying expenditures"
3means the qualifying expenditures as defined for the federal
4credit for increasing research activities which would be
5allowable under Section 41 of the Internal Revenue Code and
6which are conducted in this State, "qualifying expenditures
7for increasing research activities in this State" means the
8excess of qualifying expenditures for the taxable year in
9which incurred over qualifying expenditures for the base
10period, "qualifying expenditures for the base period" means
11the average of the qualifying expenditures for each year in
12the base period, and "base period" means the 3 taxable years
13immediately preceding the taxable year for which the
14determination is being made.
15    Any credit in excess of the tax liability for the taxable
16year may be carried forward. A taxpayer may elect to have the
17unused credit shown on its final completed return carried over
18as a credit against the tax liability for the following 5
19taxable years or until it has been fully used, whichever
20occurs first; provided that no credit earned in a tax year
21ending prior to December 31, 2003 may be carried forward to any
22year ending on or after December 31, 2003.
23    If an unused credit is carried forward to a given year from
242 or more earlier years, that credit arising in the earliest
25year will be applied first against the tax liability for the
26given year. If a tax liability for the given year still

 

 

SB2124- 72 -LRB102 14997 HLH 20352 b

1remains, the credit from the next earliest year will then be
2applied, and so on, until all credits have been used or no tax
3liability for the given year remains. Any remaining unused
4credit or credits then will be carried forward to the next
5following year in which a tax liability is incurred, except
6that no credit can be carried forward to a year which is more
7than 5 years after the year in which the expense for which the
8credit is given was incurred.
9    No inference shall be drawn from Public Act 91-644 this
10amendatory Act of the 91st General Assembly in construing this
11Section for taxable years beginning before January 1, 1999.
12    It is the intent of the General Assembly that the research
13and development credit under this subsection (k) shall apply
14continuously for all tax years ending on or after December 31,
152004 and ending prior to January 1, 2027, including, but not
16limited to, the period beginning on January 1, 2016 and ending
17on July 6, 2017 (the effective date of Public Act 100-22) this
18amendatory Act of the 100th General Assembly. All actions
19taken in reliance on the continuation of the credit under this
20subsection (k) by any taxpayer are hereby validated.
21    (l) Environmental Remediation Tax Credit.
22        (i) For tax years ending after December 31, 1997 and
23    on or before December 31, 2001, a taxpayer shall be
24    allowed a credit against the tax imposed by subsections
25    (a) and (b) of this Section for certain amounts paid for
26    unreimbursed eligible remediation costs, as specified in

 

 

SB2124- 73 -LRB102 14997 HLH 20352 b

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

 

 

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

 

 

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1    available to offset a liability, the earliest credit
2    arising under this subsection shall be applied first. A
3    credit allowed under this subsection may be sold to a
4    buyer as part of a sale of all or part of the remediation
5    site for which the credit was granted. The purchaser of a
6    remediation site and the tax credit shall succeed to the
7    unused credit and remaining carry-forward period of the
8    seller. To perfect the transfer, the assignor shall record
9    the transfer in the chain of title for the site and provide
10    written notice to the Director of the Illinois Department
11    of Revenue of the assignor's intent to sell the
12    remediation site and the amount of the tax credit to be
13    transferred as a portion of the sale. In no event may a
14    credit be transferred to any taxpayer if the taxpayer or a
15    related party would not be eligible under the provisions
16    of subsection (i).
17        (iii) For purposes of this Section, the term "site"
18    shall have the same meaning as under Section 58.2 of the
19    Environmental Protection Act.
20    (m) Education expense credit. Beginning with tax years
21ending after December 31, 1999, a taxpayer who is the
22custodian of one or more qualifying pupils shall be allowed a
23credit against the tax imposed by subsections (a) and (b) of
24this Section for qualified education expenses incurred on
25behalf of the qualifying pupils. The credit shall be equal to
2625% of qualified education expenses, but in no event may the

 

 

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1total credit under this subsection claimed by a family that is
2the custodian of qualifying pupils exceed (i) $500 for tax
3years ending prior to December 31, 2017, and (ii) $750 for tax
4years ending on or after December 31, 2017. In no event shall a
5credit under this subsection reduce the taxpayer's liability
6under this Act to less than zero. Notwithstanding any other
7provision of law, for taxable years beginning on or after
8January 1, 2017, no taxpayer may claim a credit under this
9subsection (m) if the taxpayer's adjusted gross income for the
10taxable year exceeds (i) $500,000, in the case of spouses
11filing a joint federal tax return or (ii) $250,000, in the case
12of all other taxpayers. This subsection is exempt from the
13provisions of Section 250 of this Act.
14    For purposes of this subsection:
15    "Qualifying pupils" means individuals who (i) are
16residents of the State of Illinois, (ii) are under the age of
1721 at the close of the school year for which a credit is
18sought, and (iii) during the school year for which a credit is
19sought were full-time pupils enrolled in a kindergarten
20through twelfth grade education program at any school, as
21defined in this subsection.
22    "Qualified education expense" means the amount incurred on
23behalf of a qualifying pupil in excess of $250 for tuition,
24book fees, and lab fees at the school in which the pupil is
25enrolled during the regular school year.
26    "School" means any public or nonpublic elementary or

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1        owned subsidiary; or
2            (G) the transfer or sale to or by one person to
3        another person where both persons were initial owners
4        of the registration when the registration was issued;
5        or
6        (2) the cannabis cultivation center registration,
7    medical cannabis dispensary registration, or the
8    controlling interest in a registrant's property is
9    transferred in a transaction to lineal descendants in
10    which no gain or loss is recognized or as a result of a
11    transaction in accordance with Section 351 of the Internal
12    Revenue Code in which no gain or loss is recognized.
13(Source: P.A. 100-22, eff. 7-6-17; 101-8, see Section 99 for
14effective date; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
15101-207, eff. 8-2-19; 101-363, eff. 8-9-19; revised 11-18-20.)
 
16    Section 99. Effective date. This Act takes effect upon
17becoming law.