Illinois General Assembly - Full Text of SB0492
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Full Text of SB0492  102nd General Assembly

SB0492 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB0492

 

Introduced 2/23/2021, by Sen. Win Stoller

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/201

    Amends the Illinois Income Tax Act. Provides that the personal property tax replacement income tax credit for investments in qualified property applies for costs incurred on or after the effective date and on or before December 31, 2025 (currently, December 31, 2018). Effective immediately.


LRB102 04171 HLH 14188 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB0492LRB102 04171 HLH 14188 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

 

 

SB0492- 3 -LRB102 04171 HLH 14188 b

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,

 

 

SB0492- 4 -LRB102 04171 HLH 14188 b

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

 

 

SB0492- 5 -LRB102 04171 HLH 14188 b

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

 

 

SB0492- 6 -LRB102 04171 HLH 14188 b

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

 

 

SB0492- 7 -LRB102 04171 HLH 14188 b

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

 

 

SB0492- 8 -LRB102 04171 HLH 14188 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

 

 

SB0492- 9 -LRB102 04171 HLH 14188 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

 

 

SB0492- 10 -LRB102 04171 HLH 14188 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

 

 

SB0492- 11 -LRB102 04171 HLH 14188 b

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

 

 

SB0492- 12 -LRB102 04171 HLH 14188 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

 

 

SB0492- 14 -LRB102 04171 HLH 14188 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.

 

 

SB0492- 15 -LRB102 04171 HLH 14188 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 (i) after December 31, 2018 and prior to the
21    effective date of this amendatory Act of the 102nd General
22    Assembly or (ii) after December 31, 2025, except for costs
23    incurred pursuant to a binding contract entered into on or
24    before December 31, 2018 or costs incurred pursuant to a
25    binding contract entered into on or after the effective
26    date of this amendatory Act of the 102nd General Assembly

 

 

SB0492- 16 -LRB102 04171 HLH 14188 b

1    but on or before December 31, 2025.
2        (9) Each taxable year ending before December 31, 2000,
3    a partnership may elect to pass through to its partners
4    the credits to which the partnership is entitled under
5    this subsection (e) for the taxable year. A partner may
6    use the credit allocated to him or her under this
7    paragraph only against the tax imposed in subsections (c)
8    and (d) of this Section. If the partnership makes that
9    election, those credits shall be allocated among the
10    partners in the partnership in accordance with the rules
11    set forth in Section 704(b) of the Internal Revenue Code,
12    and the rules promulgated under that Section, and the
13    allocated amount of the credits shall be allowed to the
14    partners for that taxable year. The partnership shall make
15    this election on its Personal Property Tax Replacement
16    Income Tax return for that taxable year. The election to
17    pass through the credits shall be irrevocable.
18        For taxable years ending on or after December 31,
19    2000, a partner that qualifies its partnership for a
20    subtraction under subparagraph (I) of paragraph (2) of
21    subsection (d) of Section 203 or a shareholder that
22    qualifies a Subchapter S corporation for a subtraction
23    under subparagraph (S) of paragraph (2) of subsection (b)
24    of Section 203 shall be allowed a credit under this
25    subsection (e) equal to its share of the credit earned
26    under this subsection (e) during the taxable year by the

 

 

SB0492- 17 -LRB102 04171 HLH 14188 b

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

 

 

SB0492- 18 -LRB102 04171 HLH 14188 b

1    Zone and shall not be allowed to the extent that it would
2    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, 1985, 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        (2) The term qualified property means property which:
17            (A) is tangible, whether new or used, including
18        buildings and structural components of buildings;
19            (B) is depreciable pursuant to Section 167 of the
20        Internal Revenue Code, except that "3-year property"
21        as defined in Section 168(c)(2)(A) of that Code is not
22        eligible for the credit provided by this subsection
23        (f);
24            (C) is acquired by purchase as defined in Section
25        179(d) of the Internal Revenue Code;
26            (D) is used in the Enterprise Zone or River Edge

 

 

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

 

 

SB0492- 20 -LRB102 04171 HLH 14188 b

1    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) There shall be allowed an additional credit equal
10    to 0.5% of the basis of qualified property placed in
11    service during the taxable year in a River Edge
12    Redevelopment Zone, provided such property is placed in
13    service on or after July 1, 2006, and the taxpayer's base
14    employment within Illinois has increased by 1% or more
15    over the preceding year as determined by the taxpayer's
16    employment records filed with the Illinois Department of
17    Employment Security. Taxpayers who are new to Illinois
18    shall be deemed to have met the 1% growth in base
19    employment for the first year in which they file
20    employment records with the Illinois Department of
21    Employment Security. If, in any year, the increase in base
22    employment within Illinois over the preceding year is less
23    than 1%, the additional credit shall be limited to that
24    percentage times a fraction, the numerator of which is
25    0.5% and the denominator of which is 1%, but shall not
26    exceed 0.5%.

 

 

SB0492- 21 -LRB102 04171 HLH 14188 b

1        (8) For taxable years beginning on or after January 1,
2    2021, there shall be allowed an Enterprise Zone
3    construction jobs credit against the taxes imposed under
4    subsections (a) and (b) of this Section as provided in
5    Section 13 of the Illinois Enterprise Zone Act.
6        The credit or credits may not reduce the taxpayer's
7    liability to less than zero. If the amount of the credit or
8    credits exceeds the taxpayer's liability, the excess may
9    be carried forward and applied against the taxpayer's
10    liability in succeeding calendar years in the same manner
11    provided under paragraph (4) of Section 211 of this Act.
12    The credit or credits shall be applied to the earliest
13    year for which there is a tax liability. If there are
14    credits from more than one taxable year that are available
15    to offset a liability, the earlier credit shall be applied
16    first.
17        For partners, shareholders of Subchapter S
18    corporations, and owners of limited liability companies,
19    if the liability company is treated as a partnership for
20    the purposes of federal and State income taxation, there
21    shall be allowed a credit under this Section to be
22    determined in accordance with the determination of income
23    and distributive share of income under Sections 702 and
24    704 and Subchapter S of the Internal Revenue Code.
25        The total aggregate amount of credits awarded under
26    the Blue Collar Jobs Act (Article 20 of Public Act 101-9

 

 

SB0492- 22 -LRB102 04171 HLH 14188 b

1    this amendatory Act of the 101st General Assembly) shall
2    not exceed $20,000,000 in any State fiscal year.
3        This paragraph (8) is exempt from the provisions of
4    Section 250.
5    (g) (Blank).
6    (h) Investment credit; High Impact Business.
7        (1) Subject to subsections (b) and (b-5) of Section
8    5.5 of the Illinois Enterprise Zone Act, a taxpayer shall
9    be allowed a credit against the tax imposed by subsections
10    (a) and (b) of this Section for investment in qualified
11    property which is placed in service by a Department of
12    Commerce and Economic Opportunity designated High Impact
13    Business. The credit shall be .5% of the basis for such
14    property. The credit shall not be available (i) until the
15    minimum investments in qualified property set forth in
16    subdivision (a)(3)(A) of Section 5.5 of the Illinois
17    Enterprise Zone Act have been satisfied or (ii) until the
18    time authorized in subsection (b-5) of the Illinois
19    Enterprise Zone Act for entities designated as High Impact
20    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
21    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
22    Act, 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. The
25    credit applicable to such investments shall be taken in
26    the taxable year in which such investments have been

 

 

SB0492- 23 -LRB102 04171 HLH 14188 b

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

 

 

SB0492- 24 -LRB102 04171 HLH 14188 b

1            (B) is depreciable pursuant to Section 167 of the
2        Internal Revenue Code, except that "3-year property"
3        as defined in Section 168(c)(2)(A) of that Code is not
4        eligible for the credit provided by this subsection
5        (h);
6            (C) is acquired by purchase as defined in Section
7        179(d) of the Internal Revenue Code; and
8            (D) is not eligible for the Enterprise Zone
9        Investment Credit provided by subsection (f) of this
10        Section.
11        (3) The basis of qualified property shall be the basis
12    used to compute the depreciation deduction for federal
13    income tax purposes.
14        (4) If the basis of the property for federal income
15    tax depreciation purposes is increased after it has been
16    placed in service in a federally designated Foreign Trade
17    Zone or Sub-Zone located in Illinois by the taxpayer, the
18    amount of such increase shall be deemed property placed in
19    service on the date of such increase in basis.
20        (5) The term "placed in service" shall have the same
21    meaning as under Section 46 of the Internal Revenue Code.
22        (6) If during any taxable year ending on or before
23    December 31, 1996, any property ceases to be qualified
24    property in the hands of the taxpayer within 48 months
25    after being placed in service, or the situs of any
26    qualified property is moved outside Illinois within 48

 

 

SB0492- 25 -LRB102 04171 HLH 14188 b

1    months after being placed in service, the tax imposed
2    under subsections (a) and (b) of this Section for such
3    taxable year shall be increased. Such increase shall be
4    determined by (i) recomputing the investment credit which
5    would have been allowed for the year in which credit for
6    such property was originally allowed by eliminating such
7    property from such computation, and (ii) subtracting such
8    recomputed credit from the amount of credit previously
9    allowed. For the purposes of this paragraph (6), a
10    reduction of the basis of qualified property resulting
11    from a redetermination of the purchase price shall be
12    deemed a disposition of qualified property to the extent
13    of such reduction.
14        (7) Beginning with tax years ending after December 31,
15    1996, if a taxpayer qualifies for the credit under this
16    subsection (h) and thereby is granted a tax abatement and
17    the taxpayer relocates its entire facility in violation of
18    the explicit terms and length of the contract under
19    Section 18-183 of the Property Tax Code, the tax imposed
20    under subsections (a) and (b) of this Section shall be
21    increased for the taxable year in which the taxpayer
22    relocated its facility by an amount equal to the amount of
23    credit received by the taxpayer under this subsection (h).
24    (h-5) High Impact Business construction constructions jobs
25credit. For taxable years beginning on or after January 1,
262021, there shall also be allowed a High Impact Business

 

 

SB0492- 26 -LRB102 04171 HLH 14188 b

1construction jobs credit against the tax imposed under
2subsections (a) and (b) of this Section as provided in
3subsections (i) and (j) of Section 5.5 of the Illinois
4Enterprise Zone Act.
5    The credit or credits may not reduce the taxpayer's
6liability to less than zero. If the amount of the credit or
7credits exceeds the taxpayer's liability, the excess may be
8carried forward and applied against the taxpayer's liability
9in succeeding calendar years in the manner provided under
10paragraph (4) of Section 211 of this Act. The credit or credits
11shall be applied to the earliest year for which there is a tax
12liability. If there are credits from more than one taxable
13year that are available to offset a liability, the earlier
14credit shall be applied first.
15    For partners, shareholders of Subchapter S corporations,
16and owners of limited liability companies, if the liability
17company is treated as a partnership for the purposes of
18federal and State income taxation, there shall be allowed a
19credit under this Section to be determined in accordance with
20the determination of income and distributive share of income
21under Sections 702 and 704 and Subchapter S of the Internal
22Revenue Code.
23    The total aggregate amount of credits awarded under the
24Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
25amendatory Act of the 101st General Assembly) shall not exceed
26$20,000,000 in any State fiscal year.

 

 

SB0492- 27 -LRB102 04171 HLH 14188 b

1    This subsection (h-5) is exempt from the provisions of
2Section 250.
3    (i) Credit for Personal Property Tax Replacement Income
4Tax. For tax years ending prior to December 31, 2003, a credit
5shall be allowed against the tax imposed by subsections (a)
6and (b) of this Section for the tax imposed by subsections (c)
7and (d) of this Section. This credit shall be computed by
8multiplying the tax imposed by subsections (c) and (d) of this
9Section by a fraction, the numerator of which is base income
10allocable to Illinois and the denominator of which is Illinois
11base income, and further multiplying the product by the tax
12rate imposed by subsections (a) and (b) of this Section.
13    Any credit earned on or after December 31, 1986 under this
14subsection which is unused in the year the credit is computed
15because it exceeds the tax liability imposed by subsections
16(a) and (b) for that year (whether it exceeds the original
17liability or the liability as later amended) may be carried
18forward and applied to the tax liability imposed by
19subsections (a) and (b) of the 5 taxable years following the
20excess credit year, provided that no credit may be carried
21forward to any year ending on or after December 31, 2003. This
22credit shall be applied first to the earliest year for which
23there is a liability. If there is a credit under this
24subsection from more than one tax year that is available to
25offset a liability the earliest credit arising under this
26subsection shall be applied first.

 

 

SB0492- 28 -LRB102 04171 HLH 14188 b

1    If, during any taxable year ending on or after December
231, 1986, the tax imposed by subsections (c) and (d) of this
3Section for which a taxpayer has claimed a credit under this
4subsection (i) is reduced, the amount of credit for such tax
5shall also be reduced. Such reduction shall be determined by
6recomputing the credit to take into account the reduced tax
7imposed by subsections (c) and (d). If any portion of the
8reduced amount of credit has been carried to a different
9taxable year, an amended return shall be filed for such
10taxable year to reduce the amount of credit claimed.
11    (j) Training expense credit. Beginning with tax years
12ending on or after December 31, 1986 and prior to December 31,
132003, a taxpayer shall be allowed a credit against the tax
14imposed by subsections (a) and (b) under this Section for all
15amounts paid or accrued, on behalf of all persons employed by
16the taxpayer in Illinois or Illinois residents employed
17outside of Illinois by a taxpayer, for educational or
18vocational training in semi-technical or technical fields or
19semi-skilled or skilled fields, which were deducted from gross
20income in the computation of taxable income. The credit
21against the tax imposed by subsections (a) and (b) shall be
221.6% of such training expenses. For partners, shareholders of
23subchapter S corporations, and owners of limited liability
24companies, if the liability company is treated as a
25partnership for purposes of federal and State income taxation,
26there shall be allowed a credit under this subsection (j) to be

 

 

SB0492- 29 -LRB102 04171 HLH 14188 b

1determined in accordance with the determination of income and
2distributive share of income under Sections 702 and 704 and
3subchapter S of the Internal Revenue Code.
4    Any credit allowed under this subsection which is unused
5in the year the credit is earned may be carried forward to each
6of the 5 taxable years following the year for which the credit
7is first computed until it is used. This credit shall be
8applied first to the earliest year for which there is a
9liability. If there is a credit under this subsection from
10more than one tax year that is available to offset a liability,
11the earliest credit arising under this subsection shall be
12applied first. No carryforward credit may be claimed in any
13tax year ending on or after December 31, 2003.
14    (k) Research and development credit. For tax years ending
15after July 1, 1990 and prior to December 31, 2003, and
16beginning again for tax years ending on or after December 31,
172004, and ending prior to January 1, 2027, a taxpayer shall be
18allowed a credit against the tax imposed by subsections (a)
19and (b) of this Section for increasing research activities in
20this State. The credit allowed against the tax imposed by
21subsections (a) and (b) shall be equal to 6 1/2% of the
22qualifying expenditures for increasing research activities in
23this State. For partners, shareholders of subchapter S
24corporations, and owners of limited liability companies, if
25the liability company is treated as a partnership for purposes
26of federal and State income taxation, there shall be allowed a

 

 

SB0492- 30 -LRB102 04171 HLH 14188 b

1credit under this subsection to be determined in accordance
2with the determination of income and distributive share of
3income under Sections 702 and 704 and subchapter S of the
4Internal Revenue Code.
5    For purposes of this subsection, "qualifying expenditures"
6means the qualifying expenditures as defined for the federal
7credit for increasing research activities which would be
8allowable under Section 41 of the Internal Revenue Code and
9which are conducted in this State, "qualifying expenditures
10for increasing research activities in this State" means the
11excess of qualifying expenditures for the taxable year in
12which incurred over qualifying expenditures for the base
13period, "qualifying expenditures for the base period" means
14the average of the qualifying expenditures for each year in
15the base period, and "base period" means the 3 taxable years
16immediately preceding the taxable year for which the
17determination is being made.
18    Any credit in excess of the tax liability for the taxable
19year may be carried forward. A taxpayer may elect to have the
20unused credit shown on its final completed return carried over
21as a credit against the tax liability for the following 5
22taxable years or until it has been fully used, whichever
23occurs first; provided that no credit earned in a tax year
24ending prior to December 31, 2003 may be carried forward to any
25year ending on or after December 31, 2003.
26    If an unused credit is carried forward to a given year from

 

 

SB0492- 31 -LRB102 04171 HLH 14188 b

12 or more earlier years, that credit arising in the earliest
2year will be applied first against the tax liability for the
3given year. If a tax liability for the given year still
4remains, the credit from the next earliest year will then be
5applied, and so on, until all credits have been used or no tax
6liability for the given year remains. Any remaining unused
7credit or credits then will be carried forward to the next
8following year in which a tax liability is incurred, except
9that no credit can be carried forward to a year which is more
10than 5 years after the year in which the expense for which the
11credit is given was incurred.
12    No inference shall be drawn from Public Act 91-644 this
13amendatory Act of the 91st General Assembly in construing this
14Section for taxable years beginning before January 1, 1999.
15    It is the intent of the General Assembly that the research
16and development credit under this subsection (k) shall apply
17continuously for all tax years ending on or after December 31,
182004 and ending prior to January 1, 2027, including, but not
19limited to, the period beginning on January 1, 2016 and ending
20on July 6, 2017 (the effective date of Public Act 100-22) this
21amendatory Act of the 100th General Assembly. All actions
22taken in reliance on the continuation of the credit under this
23subsection (k) by any taxpayer are hereby validated.
24    (l) Environmental Remediation Tax Credit.
25        (i) For tax years ending after December 31, 1997 and
26    on or before December 31, 2001, a taxpayer shall be

 

 

SB0492- 32 -LRB102 04171 HLH 14188 b

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

 

 

SB0492- 33 -LRB102 04171 HLH 14188 b

1    succeeded to under Section 381 of the Internal Revenue
2    Code and "related party" includes the persons disallowed a
3    deduction for losses by paragraphs (b), (c), and (f)(1) of
4    Section 267 of the Internal Revenue Code by virtue of
5    being a related taxpayer, as well as any of its partners.
6    The credit allowed against the tax imposed by subsections
7    (a) and (b) shall be equal to 25% of the unreimbursed
8    eligible remediation costs in excess of $100,000 per site,
9    except that the $100,000 threshold shall not apply to any
10    site contained in an enterprise zone as determined by the
11    Department of Commerce and Community Affairs (now
12    Department of Commerce and Economic Opportunity). The
13    total credit allowed shall not exceed $40,000 per year
14    with a maximum total of $150,000 per site. For partners
15    and shareholders of subchapter S corporations, there shall
16    be allowed a credit under this subsection to be determined
17    in accordance with the determination of income and
18    distributive share of income under Sections 702 and 704
19    and subchapter S of the Internal Revenue Code.
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. The
24    term "unused credit" does not include any amounts of
25    unreimbursed eligible remediation costs in excess of the
26    maximum credit per site authorized under paragraph (i).

 

 

SB0492- 34 -LRB102 04171 HLH 14188 b

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

 

 

SB0492- 35 -LRB102 04171 HLH 14188 b

1this Section for qualified education expenses incurred on
2behalf of the qualifying pupils. The credit shall be equal to
325% of qualified education expenses, but in no event may the
4total credit under this subsection claimed by a family that is
5the custodian of qualifying pupils exceed (i) $500 for tax
6years ending prior to December 31, 2017, and (ii) $750 for tax
7years ending on or after December 31, 2017. In no event shall a
8credit under this subsection reduce the taxpayer's liability
9under this Act to less than zero. Notwithstanding any other
10provision of law, for taxable years beginning on or after
11January 1, 2017, no taxpayer may claim a credit under this
12subsection (m) if the taxpayer's adjusted gross income for the
13taxable year exceeds (i) $500,000, in the case of spouses
14filing a joint federal tax return or (ii) $250,000, in the case
15of all other taxpayers. This subsection is exempt from the
16provisions of Section 250 of this Act.
17    For purposes of this subsection:
18    "Qualifying pupils" means individuals who (i) are
19residents of the State of Illinois, (ii) are under the age of
2021 at the close of the school year for which a credit is
21sought, and (iii) during the school year for which a credit is
22sought were full-time pupils enrolled in a kindergarten
23through twelfth grade education program at any school, as
24defined in this subsection.
25    "Qualified education expense" means the amount incurred on
26behalf of a qualifying pupil in excess of $250 for tuition,

 

 

SB0492- 36 -LRB102 04171 HLH 14188 b

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

 

 

SB0492- 37 -LRB102 04171 HLH 14188 b

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

 

 

SB0492- 38 -LRB102 04171 HLH 14188 b

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

 

 

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1capital assets, depreciable business property, real property
2used in the trade or business, and Section 197 intangibles of
3an organization registrant under the Compassionate Use of
4Medical Cannabis Program Act. The amount of the surcharge is
5equal to the amount of federal income tax liability for the
6taxable year attributable to those sales and exchanges. The
7surcharge imposed does not apply if:
8        (1) the medical cannabis cultivation center
9    registration, medical cannabis dispensary registration, or
10    the property of a registration is transferred as a result
11    of any of the following:
12            (A) bankruptcy, a receivership, or a debt
13        adjustment initiated by or against the initial
14        registration or the substantial owners of the initial
15        registration;
16            (B) cancellation, revocation, or termination of
17        any registration by the Illinois Department of Public
18        Health;
19            (C) a determination by the Illinois Department of
20        Public Health that transfer of the registration is in
21        the best interests of Illinois qualifying patients as
22        defined by the Compassionate Use of Medical Cannabis
23        Program Act;
24            (D) the death of an owner of the equity interest in
25        a registrant;
26            (E) the acquisition of a controlling interest in

 

 

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1        the stock or substantially all of the assets of a
2        publicly traded company;
3            (F) a transfer by a parent company to a wholly
4        owned subsidiary; or
5            (G) the transfer or sale to or by one person to
6        another person where both persons were initial owners
7        of the registration when the registration was issued;
8        or
9        (2) the cannabis cultivation center registration,
10    medical cannabis dispensary registration, or the
11    controlling interest in a registrant's property is
12    transferred in a transaction to lineal descendants in
13    which no gain or loss is recognized or as a result of a
14    transaction in accordance with Section 351 of the Internal
15    Revenue Code in which no gain or loss is recognized.
16(Source: P.A. 100-22, eff. 7-6-17; 101-9, eff. 6-5-19; 101-31,
17eff. 6-28-19; 101-207, eff. 8-2-19; 101-363, eff. 8-9-19;
18revised 11-18-20.)
 
19    (Text of Section with the changes made by P.A. 101-8,
20which did not take effect (see Section 99 of P.A. 101-8))
21    Sec. 201. Tax imposed.
22    (a) In general. A tax measured by net income is hereby
23imposed on every individual, corporation, trust and estate for
24each taxable year ending after July 31, 1969 on the privilege
25of earning or receiving income in or as a resident of this

 

 

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1State. Such tax shall be in addition to all other occupation or
2privilege taxes imposed by this State or by any municipal
3corporation or political subdivision thereof.
4    (b) Rates. The tax imposed by subsection (a) of this
5Section shall be determined as follows, except as adjusted by
6subsection (d-1):
7        (1) In the case of an individual, trust or estate, for
8    taxable years ending prior to July 1, 1989, an amount
9    equal to 2 1/2% of the taxpayer's net income for the
10    taxable year.
11        (2) In the case of an individual, trust or estate, for
12    taxable years beginning prior to July 1, 1989 and ending
13    after June 30, 1989, an amount equal to the sum of (i) 2
14    1/2% of the taxpayer's net income for the period prior to
15    July 1, 1989, as calculated under Section 202.3, and (ii)
16    3% of the taxpayer's net income for the period after June
17    30, 1989, as calculated under Section 202.3.
18        (3) In the case of an individual, trust or estate, for
19    taxable years beginning after June 30, 1989, and ending
20    prior to January 1, 2011, an amount equal to 3% of the
21    taxpayer's net income for the taxable year.
22        (4) In the case of an individual, trust, or estate,
23    for taxable years beginning prior to January 1, 2011, and
24    ending after December 31, 2010, an amount equal to the sum
25    of (i) 3% of the taxpayer's net income for the period prior
26    to January 1, 2011, as calculated under Section 202.5, and

 

 

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1    (ii) 5% of the taxpayer's net income for the period after
2    December 31, 2010, as calculated under Section 202.5.
3        (5) In the case of an individual, trust, or estate,
4    for taxable years beginning on or after January 1, 2011,
5    and ending prior to January 1, 2015, an amount equal to 5%
6    of the taxpayer's net income for the taxable year.
7        (5.1) In the case of an individual, trust, or estate,
8    for taxable years beginning prior to January 1, 2015, and
9    ending after December 31, 2014, an amount equal to the sum
10    of (i) 5% of the taxpayer's net income for the period prior
11    to January 1, 2015, as calculated under Section 202.5, and
12    (ii) 3.75% of the taxpayer's net income for the period
13    after December 31, 2014, as calculated under Section
14    202.5.
15        (5.2) In the case of an individual, trust, or estate,
16    for taxable years beginning on or after January 1, 2015,
17    and ending prior to July 1, 2017, an amount equal to 3.75%
18    of the taxpayer's net income for the taxable year.
19        (5.3) In the case of an individual, trust, or estate,
20    for taxable years beginning prior to July 1, 2017, and
21    ending after June 30, 2017, an amount equal to the sum of
22    (i) 3.75% of the taxpayer's net income for the period
23    prior to July 1, 2017, as calculated under Section 202.5,
24    and (ii) 4.95% of the taxpayer's net income for the period
25    after June 30, 2017, as calculated under Section 202.5.
26        (5.4) In the case of an individual, trust, or estate,

 

 

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1    for taxable years beginning on or after July 1, 2017 and
2    beginning prior to January 1, 2021, an amount equal to
3    4.95% of the taxpayer's net income for the taxable year.
4        (5.5) In the case of an individual, trust, or estate,
5    for taxable years beginning on or after January 1, 2021,
6    an amount calculated under the rate structure set forth in
7    Section 201.1.
8        (6) In the case of a corporation, for taxable years
9    ending prior to July 1, 1989, an amount equal to 4% of the
10    taxpayer's net income for the taxable year.
11        (7) In the case of a corporation, for taxable years
12    beginning prior to July 1, 1989 and ending after June 30,
13    1989, an amount equal to the sum of (i) 4% of the
14    taxpayer's net income for the period prior to July 1,
15    1989, as calculated under Section 202.3, and (ii) 4.8% of
16    the taxpayer's net income for the period after June 30,
17    1989, as calculated under Section 202.3.
18        (8) In the case of a corporation, for taxable years
19    beginning after June 30, 1989, and ending prior to January
20    1, 2011, an amount equal to 4.8% of the taxpayer's net
21    income for the taxable year.
22        (9) In the case of a corporation, for taxable years
23    beginning prior to January 1, 2011, and ending after
24    December 31, 2010, an amount equal to the sum of (i) 4.8%
25    of the taxpayer's net income for the period prior to
26    January 1, 2011, as calculated under Section 202.5, and

 

 

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

 

 

SB0492- 45 -LRB102 04171 HLH 14188 b

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

 

 

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

 

 

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1    Racing Act of 1975.
2    The transfer of an organization gaming license,
3organization license, or racetrack property by a person other
4than the initial licensee to receive the organization gaming
5license is not subject to a surcharge. The Department shall
6adopt rules necessary to implement and administer this
7subsection.
8    (c) Personal Property Tax Replacement Income Tax.
9Beginning on July 1, 1979 and thereafter, in addition to such
10income tax, there is also hereby imposed the Personal Property
11Tax Replacement Income Tax measured by net income on every
12corporation (including Subchapter S corporations), partnership
13and trust, for each taxable year ending after June 30, 1979.
14Such taxes are imposed on the privilege of earning or
15receiving income in or as a resident of this State. The
16Personal Property Tax Replacement Income Tax shall be in
17addition to the income tax imposed by subsections (a) and (b)
18of this Section and in addition to all other occupation or
19privilege taxes imposed by this State or by any municipal
20corporation or political subdivision thereof.
21    (d) Additional Personal Property Tax Replacement Income
22Tax Rates. The personal property tax replacement income tax
23imposed by this subsection and subsection (c) of this Section
24in the case of a corporation, other than a Subchapter S
25corporation and except as adjusted by subsection (d-1), shall
26be an additional amount equal to 2.85% of such taxpayer's net

 

 

SB0492- 48 -LRB102 04171 HLH 14188 b

1income for the taxable year, except that beginning on January
21, 1981, and thereafter, the rate of 2.85% specified in this
3subsection shall be reduced to 2.5%, and in the case of a
4partnership, trust or a Subchapter S corporation shall be an
5additional amount equal to 1.5% of such taxpayer's net income
6for the taxable year.
7    (d-1) Rate reduction for certain foreign insurers. In the
8case of a foreign insurer, as defined by Section 35A-5 of the
9Illinois Insurance Code, whose state or country of domicile
10imposes on insurers domiciled in Illinois a retaliatory tax
11(excluding any insurer whose premiums from reinsurance assumed
12are 50% or more of its total insurance premiums as determined
13under paragraph (2) of subsection (b) of Section 304, except
14that for purposes of this determination premiums from
15reinsurance do not include premiums from inter-affiliate
16reinsurance arrangements), beginning with taxable years ending
17on or after December 31, 1999, the sum of the rates of tax
18imposed by subsections (b) and (d) shall be reduced (but not
19increased) to the rate at which the total amount of tax imposed
20under this Act, net of all credits allowed under this Act,
21shall equal (i) the total amount of tax that would be imposed
22on the foreign insurer's net income allocable to Illinois for
23the taxable year by such foreign insurer's state or country of
24domicile if that net income were subject to all income taxes
25and taxes measured by net income imposed by such foreign
26insurer's state or country of domicile, net of all credits

 

 

SB0492- 49 -LRB102 04171 HLH 14188 b

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

 

 

SB0492- 50 -LRB102 04171 HLH 14188 b

1    by subsection (a) net of all credits allowed under this
2    Section other than the credit allowed under subsection (i)
3    has been reduced to zero, against the rates imposed by
4    subsection (d).
5    This subsection (d-1) is exempt from the provisions of
6Section 250.
7    (e) Investment credit. A taxpayer shall be allowed a
8credit against the Personal Property Tax Replacement Income
9Tax for investment in qualified property.
10        (1) A taxpayer shall be allowed a credit equal to .5%
11    of the basis of qualified property placed in service
12    during the taxable year, provided such property is placed
13    in service on or after July 1, 1984. There shall be allowed
14    an additional credit equal to .5% of the basis of
15    qualified property placed in service during the taxable
16    year, provided such property is placed in service on or
17    after July 1, 1986, and the taxpayer's base employment
18    within Illinois has increased by 1% or more over the
19    preceding year as determined by the taxpayer's employment
20    records filed with the Illinois Department of Employment
21    Security. Taxpayers who are new to Illinois shall be
22    deemed to have met the 1% growth in base employment for the
23    first year in which they file employment records with the
24    Illinois Department of Employment Security. The provisions
25    added to this Section by Public Act 85-1200 (and restored
26    by Public Act 87-895) shall be construed as declaratory of

 

 

SB0492- 51 -LRB102 04171 HLH 14188 b

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

 

 

SB0492- 52 -LRB102 04171 HLH 14188 b

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

 

 

SB0492- 53 -LRB102 04171 HLH 14188 b

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

 

 

SB0492- 54 -LRB102 04171 HLH 14188 b

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

 

 

SB0492- 55 -LRB102 04171 HLH 14188 b

1    been allowed for the year in which credit for such
2    property was originally allowed by eliminating such
3    property from such computation and, (ii) subtracting such
4    recomputed credit from the amount of credit previously
5    allowed. For the purposes of this paragraph (7), a
6    reduction of the basis of qualified property resulting
7    from a redetermination of the purchase price shall be
8    deemed a disposition of qualified property to the extent
9    of such reduction.
10        (8) Unless the investment credit is extended by law,
11    the basis of qualified property shall not include costs
12    incurred (i) after December 31, 2018 and prior to the
13    effective date of this amendatory Act of the 102nd General
14    Assembly or (ii) after December 31, 2025, except for costs
15    incurred pursuant to a binding contract entered into on or
16    before December 31, 2018 or costs incurred pursuant to a
17    binding contract entered into on or after the effective
18    date of this amendatory Act of the 102nd General Assembly
19    but on or before December 31, 2025.
20        (9) Each taxable year ending before December 31, 2000,
21    a partnership may elect to pass through to its partners
22    the credits to which the partnership is entitled under
23    this subsection (e) for the taxable year. A partner may
24    use the credit allocated to him or her under this
25    paragraph only against the tax imposed in subsections (c)
26    and (d) of this Section. If the partnership makes that

 

 

SB0492- 56 -LRB102 04171 HLH 14188 b

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

 

 

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1    tax imposed by subsections (a) and (b) of this Section for
2    investment in qualified property which is placed in
3    service in an Enterprise Zone created pursuant to the
4    Illinois Enterprise Zone Act or, for property placed in
5    service on or after July 1, 2006, a River Edge
6    Redevelopment Zone established pursuant to the River Edge
7    Redevelopment Zone Act. For partners, shareholders of
8    Subchapter S corporations, and owners of limited liability
9    companies, if the liability company is treated as a
10    partnership for purposes of federal and State income
11    taxation, there shall be allowed a credit under this
12    subsection (f) to be determined in accordance with the
13    determination of income and distributive share of income
14    under Sections 702 and 704 and Subchapter S of the
15    Internal Revenue Code. The credit shall be .5% of the
16    basis for such property. The credit shall be available
17    only in the taxable year in which the property is placed in
18    service in the Enterprise Zone or River Edge Redevelopment
19    Zone 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. For
22    tax years ending on or after December 31, 1985, the credit
23    shall be allowed for the tax year in which the property is
24    placed in service, or, if the amount of the credit exceeds
25    the tax liability for that year, whether it exceeds the
26    original liability or the liability as later amended, such

 

 

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

 

 

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

 

 

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

 

 

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1    be carried forward and applied against the taxpayer's
2    liability in succeeding calendar years in the same manner
3    provided under paragraph (4) of Section 211 of this Act.
4    The credit or credits shall be applied to the earliest
5    year for which there is a tax liability. If there are
6    credits from more than one taxable year that are available
7    to offset a liability, the earlier credit shall be applied
8    first.
9        For partners, shareholders of Subchapter S
10    corporations, and owners of limited liability companies,
11    if the liability company is treated as a partnership for
12    the purposes of federal and State income taxation, there
13    shall be allowed a credit under this Section to be
14    determined in accordance with the determination of income
15    and distributive share of income under Sections 702 and
16    704 and Subchapter S of the Internal Revenue Code.
17        The total aggregate amount of credits awarded under
18    the Blue Collar Jobs Act (Article 20 of Public Act 101-9
19    this amendatory Act of the 101st General Assembly) shall
20    not exceed $20,000,000 in any State fiscal year.
21        This paragraph (8) is exempt from the provisions of
22    Section 250.
23    (g) (Blank).
24    (h) Investment credit; High Impact Business.
25        (1) Subject to subsections (b) and (b-5) of Section
26    5.5 of the Illinois Enterprise Zone Act, a taxpayer shall

 

 

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1    be allowed a credit against the tax imposed by subsections
2    (a) and (b) of this Section for investment in qualified
3    property which is placed in service by a Department of
4    Commerce and Economic Opportunity designated High Impact
5    Business. The credit shall be .5% of the basis for such
6    property. The credit shall not be available (i) until the
7    minimum investments in qualified property set forth in
8    subdivision (a)(3)(A) of Section 5.5 of the Illinois
9    Enterprise Zone Act have been satisfied or (ii) until the
10    time authorized in subsection (b-5) of the Illinois
11    Enterprise Zone Act for entities designated as High Impact
12    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
13    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
14    Act, and shall not be allowed to the extent that it would
15    reduce a taxpayer's liability for the tax imposed by
16    subsections (a) and (b) of this Section to below zero. The
17    credit applicable to such investments shall be taken in
18    the taxable year in which such investments have been
19    completed. The credit for additional investments beyond
20    the minimum investment by a designated high impact
21    business authorized under subdivision (a)(3)(A) of Section
22    5.5 of the Illinois Enterprise Zone Act shall be available
23    only in the taxable year in which the property is placed in
24    service and shall not be allowed to the extent that it
25    would 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, 1987, 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        Changes made in this subdivision (h)(1) by Public Act
14    88-670 restore changes made by Public Act 85-1182 and
15    reflect existing law.
16        (2) The term qualified property means property which:
17            (A) is tangible, whether new or used, including
18        buildings and structural components of buildings;
19            (B) is depreciable pursuant to Section 167 of the
20        Internal Revenue Code, except that "3-year property"
21        as defined in Section 168(c)(2)(A) of that Code is not
22        eligible for the credit provided by this subsection
23        (h);
24            (C) is acquired by purchase as defined in Section
25        179(d) of the Internal Revenue Code; and
26            (D) is not eligible for the Enterprise Zone

 

 

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1        Investment Credit provided by subsection (f) of this
2        Section.
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 a federally designated Foreign Trade
9    Zone or Sub-Zone located in Illinois by the taxpayer, the
10    amount of such increase shall be deemed property placed in
11    service on the 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 ending on or before
15    December 31, 1996, any property ceases to be qualified
16    property in the hands of the taxpayer within 48 months
17    after being placed in service, or the situs of any
18    qualified property is moved outside Illinois within 48
19    months after being placed in service, the tax imposed
20    under subsections (a) and (b) of this Section for such
21    taxable year shall be increased. Such increase shall be
22    determined by (i) recomputing the investment credit which
23    would have been allowed for the year in which credit for
24    such 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

 

 

SB0492- 65 -LRB102 04171 HLH 14188 b

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) Beginning with tax years ending after December 31,
7    1996, if a taxpayer qualifies for the credit under this
8    subsection (h) and thereby is granted a tax abatement and
9    the taxpayer relocates its entire facility in violation of
10    the explicit terms and length of the contract under
11    Section 18-183 of the Property Tax Code, the tax imposed
12    under subsections (a) and (b) of this Section shall be
13    increased for the taxable year in which the taxpayer
14    relocated its facility by an amount equal to the amount of
15    credit received by the taxpayer under this subsection (h).
16    (h-5) High Impact Business construction constructions jobs
17credit. For taxable years beginning on or after January 1,
182021, there shall also be allowed a High Impact Business
19construction jobs credit against the tax imposed under
20subsections (a) and (b) of this Section as provided in
21subsections (i) and (j) of Section 5.5 of the Illinois
22Enterprise Zone Act.
23    The credit or credits may not reduce the taxpayer's
24liability to less than zero. If the amount of the credit or
25credits exceeds the taxpayer's liability, the excess may be
26carried forward and applied against the taxpayer's liability

 

 

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

 

 

SB0492- 67 -LRB102 04171 HLH 14188 b

1Section by a fraction, the numerator of which is base income
2allocable to Illinois and the denominator of which is Illinois
3base income, and further multiplying the product by the tax
4rate imposed by subsections (a) and (b) of this Section.
5    Any credit earned on or after December 31, 1986 under this
6subsection which is unused in the year the credit is computed
7because it exceeds the tax liability imposed by subsections
8(a) and (b) for that year (whether it exceeds the original
9liability or the liability as later amended) may be carried
10forward and applied to the tax liability imposed by
11subsections (a) and (b) of the 5 taxable years following the
12excess credit year, provided that no credit may be carried
13forward to any year ending on or after December 31, 2003. This
14credit shall be applied first to the earliest year for which
15there is a liability. If there is a credit under this
16subsection from more than one tax year that is available to
17offset a liability the earliest credit arising under this
18subsection shall be applied first.
19    If, during any taxable year ending on or after December
2031, 1986, the tax imposed by subsections (c) and (d) of this
21Section for which a taxpayer has claimed a credit under this
22subsection (i) is reduced, the amount of credit for such tax
23shall also be reduced. Such reduction shall be determined by
24recomputing the credit to take into account the reduced tax
25imposed by subsections (c) and (d). If any portion of the
26reduced amount of credit has been carried to a different

 

 

SB0492- 68 -LRB102 04171 HLH 14188 b

1taxable year, an amended return shall be filed for such
2taxable year to reduce the amount of credit claimed.
3    (j) Training expense credit. Beginning with tax years
4ending on or after December 31, 1986 and prior to December 31,
52003, a taxpayer shall be allowed a credit against the tax
6imposed by subsections (a) and (b) under this Section for all
7amounts paid or accrued, on behalf of all persons employed by
8the taxpayer in Illinois or Illinois residents employed
9outside of Illinois by a taxpayer, for educational or
10vocational training in semi-technical or technical fields or
11semi-skilled or skilled fields, which were deducted from gross
12income in the computation of taxable income. The credit
13against the tax imposed by subsections (a) and (b) shall be
141.6% of such training expenses. For partners, shareholders of
15subchapter S corporations, and owners of limited liability
16companies, if the liability company is treated as a
17partnership for purposes of federal and State income taxation,
18there shall be allowed a credit under this subsection (j) to be
19determined in accordance with the determination of income and
20distributive share of income under Sections 702 and 704 and
21subchapter S of the Internal Revenue Code.
22    Any credit allowed under this subsection which is unused
23in the year the credit is earned may be carried forward to each
24of the 5 taxable years following the year for which the credit
25is first computed until it is used. This credit shall be
26applied first to the earliest year for which there is a

 

 

SB0492- 69 -LRB102 04171 HLH 14188 b

1liability. If there is a credit under this subsection from
2more than one tax year that is available to offset a liability,
3the earliest credit arising under this subsection shall be
4applied first. No carryforward credit may be claimed in any
5tax year ending on or after December 31, 2003.
6    (k) Research and development credit. For tax years ending
7after July 1, 1990 and prior to December 31, 2003, and
8beginning again for tax years ending on or after December 31,
92004, and ending prior to January 1, 2027, a taxpayer shall be
10allowed a credit against the tax imposed by subsections (a)
11and (b) of this Section for increasing research activities in
12this State. The credit allowed against the tax imposed by
13subsections (a) and (b) shall be equal to 6 1/2% of the
14qualifying expenditures for increasing research activities in
15this State. For partners, shareholders of subchapter S
16corporations, and owners of limited liability companies, if
17the liability company is treated as a partnership for purposes
18of federal and State income taxation, there shall be allowed a
19credit under this subsection to be determined in accordance
20with the determination of income and distributive share of
21income under Sections 702 and 704 and subchapter S of the
22Internal Revenue Code.
23    For purposes of this subsection, "qualifying expenditures"
24means the qualifying expenditures as defined for the federal
25credit for increasing research activities which would be
26allowable under Section 41 of the Internal Revenue Code and

 

 

SB0492- 70 -LRB102 04171 HLH 14188 b

1which are conducted in this State, "qualifying expenditures
2for increasing research activities in this State" means the
3excess of qualifying expenditures for the taxable year in
4which incurred over qualifying expenditures for the base
5period, "qualifying expenditures for the base period" means
6the average of the qualifying expenditures for each year in
7the base period, and "base period" means the 3 taxable years
8immediately preceding the taxable year for which the
9determination is being made.
10    Any credit in excess of the tax liability for the taxable
11year may be carried forward. A taxpayer may elect to have the
12unused credit shown on its final completed return carried over
13as a credit against the tax liability for the following 5
14taxable years or until it has been fully used, whichever
15occurs first; provided that no credit earned in a tax year
16ending prior to December 31, 2003 may be carried forward to any
17year ending on or after December 31, 2003.
18    If an unused credit is carried forward to a given year from
192 or more earlier years, that credit arising in the earliest
20year will be applied first against the tax liability for the
21given year. If a tax liability for the given year still
22remains, the credit from the next earliest year will then be
23applied, and so on, until all credits have been used or no tax
24liability for the given year remains. Any remaining unused
25credit or credits then will be carried forward to the next
26following year in which a tax liability is incurred, except

 

 

SB0492- 71 -LRB102 04171 HLH 14188 b

1that no credit can be carried forward to a year which is more
2than 5 years after the year in which the expense for which the
3credit is given was incurred.
4    No inference shall be drawn from Public Act 91-644 this
5amendatory Act of the 91st General Assembly in construing this
6Section for taxable years beginning before January 1, 1999.
7    It is the intent of the General Assembly that the research
8and development credit under this subsection (k) shall apply
9continuously for all tax years ending on or after December 31,
102004 and ending prior to January 1, 2027, including, but not
11limited to, the period beginning on January 1, 2016 and ending
12on July 6, 2017 (the effective date of Public Act 100-22) this
13amendatory Act of the 100th General Assembly. All actions
14taken in reliance on the continuation of the credit under this
15subsection (k) by any taxpayer are hereby validated.
16    (l) Environmental Remediation Tax Credit.
17        (i) For tax years ending after December 31, 1997 and
18    on or before December 31, 2001, a taxpayer shall be
19    allowed a credit against the tax imposed by subsections
20    (a) and (b) of this Section for certain amounts paid for
21    unreimbursed eligible remediation costs, as specified in
22    this subsection. For purposes of this Section,
23    "unreimbursed eligible remediation costs" means costs
24    approved by the Illinois Environmental Protection Agency
25    ("Agency") under Section 58.14 of the Environmental
26    Protection Act that were paid in performing environmental

 

 

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1    remediation at a site for which a No Further Remediation
2    Letter was issued by the Agency and recorded under Section
3    58.10 of the Environmental Protection Act. The credit must
4    be claimed for the taxable year in which Agency approval
5    of the eligible remediation costs is granted. The credit
6    is not available to any taxpayer if the taxpayer or any
7    related party caused or contributed to, in any material
8    respect, a release of regulated substances on, in, or
9    under the site that was identified and addressed by the
10    remedial action pursuant to the Site Remediation Program
11    of the Environmental Protection Act. After the Pollution
12    Control Board rules are adopted pursuant to the Illinois
13    Administrative Procedure Act for the administration and
14    enforcement of Section 58.9 of the Environmental
15    Protection Act, determinations as to credit availability
16    for purposes of this Section shall be made consistent with
17    those rules. For purposes of this Section, "taxpayer"
18    includes a person whose tax attributes the taxpayer has
19    succeeded to under Section 381 of the Internal Revenue
20    Code and "related party" includes the persons disallowed a
21    deduction for losses by paragraphs (b), (c), and (f)(1) of
22    Section 267 of the Internal Revenue Code by virtue of
23    being a related taxpayer, as well as any of its partners.
24    The credit allowed against the tax imposed by subsections
25    (a) and (b) shall be equal to 25% of the unreimbursed
26    eligible remediation costs in excess of $100,000 per site,

 

 

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

 

 

SB0492- 74 -LRB102 04171 HLH 14188 b

1    remediation site and the tax credit shall succeed to the
2    unused credit and remaining carry-forward period of the
3    seller. To perfect the transfer, the assignor shall record
4    the transfer in the chain of title for the site and provide
5    written notice to the Director of the Illinois Department
6    of Revenue of the assignor's intent to sell the
7    remediation site and the amount of the tax credit to be
8    transferred as a portion of the sale. In no event may a
9    credit be transferred to any taxpayer if the taxpayer or a
10    related party would not be eligible under the provisions
11    of subsection (i).
12        (iii) For purposes of this Section, the term "site"
13    shall have the same meaning as under Section 58.2 of the
14    Environmental Protection Act.
15    (m) Education expense credit. Beginning with tax years
16ending after December 31, 1999, a taxpayer who is the
17custodian of one or more qualifying pupils shall be allowed a
18credit against the tax imposed by subsections (a) and (b) of
19this Section for qualified education expenses incurred on
20behalf of the qualifying pupils. The credit shall be equal to
2125% of qualified education expenses, but in no event may the
22total credit under this subsection claimed by a family that is
23the custodian of qualifying pupils exceed (i) $500 for tax
24years ending prior to December 31, 2017, and (ii) $750 for tax
25years ending on or after December 31, 2017. In no event shall a
26credit under this subsection reduce the taxpayer's liability

 

 

SB0492- 75 -LRB102 04171 HLH 14188 b

1under this Act to less than zero. Notwithstanding any other
2provision of law, for taxable years beginning on or after
3January 1, 2017, no taxpayer may claim a credit under this
4subsection (m) if the taxpayer's adjusted gross income for the
5taxable year exceeds (i) $500,000, in the case of spouses
6filing a joint federal tax return or (ii) $250,000, in the case
7of all other taxpayers. This subsection is exempt from the
8provisions of Section 250 of this Act.
9    For purposes of this subsection:
10    "Qualifying pupils" means individuals who (i) are
11residents of the State of Illinois, (ii) are under the age of
1221 at the close of the school year for which a credit is
13sought, and (iii) during the school year for which a credit is
14sought were full-time pupils enrolled in a kindergarten
15through twelfth grade education program at any school, as
16defined in this subsection.
17    "Qualified education expense" means the amount incurred on
18behalf of a qualifying pupil in excess of $250 for tuition,
19book fees, and lab fees at the school in which the pupil is
20enrolled during the regular school year.
21    "School" means any public or nonpublic elementary or
22secondary school in Illinois that is in compliance with Title
23VI of the Civil Rights Act of 1964 and attendance at which
24satisfies the requirements of Section 26-1 of the School Code,
25except that nothing shall be construed to require a child to
26attend any particular public or nonpublic school to qualify

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1        (2) the cannabis cultivation center registration,
2    medical cannabis dispensary registration, or the
3    controlling interest in a registrant's property is
4    transferred in a transaction to lineal descendants in
5    which no gain or loss is recognized or as a result of a
6    transaction in accordance with Section 351 of the Internal
7    Revenue Code in which no gain or loss is recognized.
8(Source: P.A. 100-22, eff. 7-6-17; 101-8, see Section 99 for
9effective date; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
10101-207, eff. 8-2-19; 101-363, eff. 8-9-19; revised 11-18-20.)
 
11    Section 95. No acceleration or delay. Where this Act makes
12changes in a statute that is represented in this Act by text
13that is not yet or no longer in effect (for example, a Section
14represented by multiple versions), the use of that text does
15not accelerate or delay the taking effect of (i) the changes
16made by this Act or (ii) provisions derived from any other
17Public Act.
 
18    Section 99. Effective date. This Act takes effect upon
19becoming law.