Full Text of HB5828 97th General Assembly
HB5828 97TH GENERAL ASSEMBLY |
| | 97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012 HB5828 Introduced 2/16/2012, by Rep. Kent Gaffney SYNOPSIS AS INTRODUCED: |
| 35 ILCS 5/201 | from Ch. 120, par. 2-201 | 35 ILCS 5/207 | from Ch. 120, par. 2-207 | 35 ILCS 405/2 | from Ch. 120, par. 405A-2 | 35 ILCS 405/3 | from Ch. 120, par. 405A-3 |
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Amends the Illinois Income Tax Act. Reduces the rate of the tax imposed on individuals, trusts, and estates to 3% for taxable years beginning on or after January 1, 2012 (now, 5% for taxable years ending prior to January 1, 2015, 3.75% for taxable years beginning on or after January 1, 2015 and ending prior to January 1, 2025, and 3.25% for taxable years beginning on or after January 1, 2025). Reduces the rate of the tax imposed on corporations to 4.8% for taxable years beginning on or after January 1, 2012 (now, 7% for taxable years ending prior to January 1, 2015, 5.25% for taxable years beginning on or after January 1, 2015 and ending prior to January 1, 2025, and 4.8% for taxable years beginning on or after January 1, 2025). Removes a provision limiting the net loss carryover deduction to $100,000 for any taxable year ending on or after December 31, 2012 and prior to December 31, 2014. Provides that, for any taxable year ending on or after December 31, 2012, such a loss
is allowed as a carryback to each of the 2 taxable years preceding the
taxable year of the loss and is allowed as a net operating loss carryover to each of the 20 taxable years
following the taxable year of the loss. Amends the Illinois Estate and Generation-Skipping Transfer Tax Act. Provides that no tax shall be imposed under the Act for persons dying after December 31, 2009.
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| | A BILL FOR |
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| 1 | | AN ACT concerning revenue.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Income Tax Act is amended by | 5 | | changing Sections 201 and 207 as follows: | 6 | | (35 ILCS 5/201) (from Ch. 120, par. 2-201) | 7 | | (Text of Section before amendment by P.A. 97-636 ) | 8 | | Sec. 201. Tax Imposed. | 9 | | (a) In general. A tax measured by net income is hereby | 10 | | imposed on every
individual, corporation, trust and estate for | 11 | | each taxable year ending
after July 31, 1969 on the privilege | 12 | | of earning or receiving income in or
as a resident of this | 13 | | State. Such tax shall be in addition to all other
occupation or | 14 | | privilege taxes imposed by this State or by any municipal
| 15 | | corporation or political subdivision thereof. | 16 | | (b) Rates. The tax imposed by subsection (a) of this | 17 | | Section shall be
determined as follows, except as adjusted by | 18 | | subsection (d-1): | 19 | | (1) In the case of an individual, trust or estate, for | 20 | | taxable years
ending prior to July 1, 1989, an amount equal | 21 | | to 2 1/2% of the taxpayer's
net income for the taxable | 22 | | year. | 23 | | (2) In the case of an individual, trust or estate, for |
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| 1 | | taxable years
beginning prior to July 1, 1989 and ending | 2 | | after June 30, 1989, an amount
equal to the sum of (i) 2 | 3 | | 1/2% of the taxpayer's net income for the period
prior to | 4 | | July 1, 1989, as calculated under Section 202.3, and (ii) | 5 | | 3% of the
taxpayer's net income for the period after June | 6 | | 30, 1989, as calculated
under Section 202.3. | 7 | | (3) In the case of an individual, trust or estate, for | 8 | | taxable years
beginning after June 30, 1989, and ending | 9 | | prior to January 1, 2011, an amount equal to 3% of the | 10 | | taxpayer's net
income for the taxable year. | 11 | | (4) In the case of an individual, trust, or estate, for | 12 | | taxable years beginning prior to January 1, 2011, and | 13 | | ending after December 31, 2010, an amount equal to the sum | 14 | | of (i) 3% of the taxpayer's net income for the period prior | 15 | | to January 1, 2011, as calculated under Section 202.5, and | 16 | | (ii) 5% of the taxpayer's net income for the period after | 17 | | December 31, 2010, as calculated under Section 202.5. | 18 | | (5) In the case of an individual, trust, or estate, for | 19 | | taxable years beginning on or after January 1, 2011, and | 20 | | ending prior to January 1, 2012 2015 , an amount equal to 5% | 21 | | of the taxpayer's net income for the taxable year. | 22 | | (5.1) In the case of an individual, trust, or estate, | 23 | | for taxable years beginning prior to January 1, 2012 2015 , | 24 | | and ending after December 31, 2011 2014 , an amount equal to | 25 | | the sum of (i) 5% of the taxpayer's net income for the | 26 | | period prior to January 1, 2012 2015 , as calculated under |
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| 1 | | Section 202.5, and (ii) 3% 3.75% of the taxpayer's net | 2 | | income for the period after December 31, 2011 2014 , as | 3 | | calculated under Section 202.5. | 4 | | (5.2) In the case of an individual, trust, or estate, | 5 | | for taxable years beginning on or after January 1, 2012 | 6 | | 2015, and ending prior to January 1, 2025 , an amount equal | 7 | | to 3% 3.75% of the taxpayer's net income for the taxable | 8 | | year. | 9 | | (5.3) (Blank) In the case of an individual, trust, or | 10 | | estate, for taxable years beginning prior to January 1, | 11 | | 2025, and ending after December 31, 2024, an amount equal | 12 | | to the sum of (i) 3.75% of the taxpayer's net income for | 13 | | the period prior to January 1, 2025, as calculated under | 14 | | Section 202.5, and (ii) 3.25% of the taxpayer's net income | 15 | | for the period after December 31, 2024, as calculated under | 16 | | Section 202.5 . | 17 | | (5.4) (Blank) In the case of an individual, trust, or | 18 | | estate, for taxable years beginning on or after January 1, | 19 | | 2025, an amount equal to 3.25% of the taxpayer's net income | 20 | | for the taxable year . | 21 | | (6) In the case of a corporation, for taxable years
| 22 | | ending prior to July 1, 1989, an amount equal to 4% of the
| 23 | | taxpayer's net income for the taxable year. | 24 | | (7) In the case of a corporation, for taxable years | 25 | | beginning prior to
July 1, 1989 and ending after June 30, | 26 | | 1989, an amount equal to the sum of
(i) 4% of the |
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| 1 | | taxpayer's net income for the period prior to July 1, 1989,
| 2 | | as calculated under Section 202.3, and (ii) 4.8% of the | 3 | | taxpayer's net
income for the period after June 30, 1989, | 4 | | as calculated under Section
202.3. | 5 | | (8) In the case of a corporation, for taxable years | 6 | | beginning after
June 30, 1989, and ending prior to January | 7 | | 1, 2011, an amount equal to 4.8% of the taxpayer's net | 8 | | income for the
taxable year. | 9 | | (9) In the case of a corporation, for taxable years | 10 | | beginning prior to January 1, 2011, and ending after | 11 | | December 31, 2010, an amount equal to the sum of (i) 4.8% | 12 | | of the taxpayer's net income for the period prior to | 13 | | January 1, 2011, as calculated under Section 202.5, and | 14 | | (ii) 7% of the taxpayer's net income for the period after | 15 | | December 31, 2010, as calculated under Section 202.5. | 16 | | (10) In the case of a corporation, for taxable years | 17 | | beginning on or after January 1, 2011, and ending prior to | 18 | | January 1, 2012 2015 , an amount equal to 7% of the | 19 | | taxpayer's net income for the taxable year. | 20 | | (11) In the case of a corporation, for taxable years | 21 | | beginning prior to January 1, 2012 2015 , and ending after | 22 | | December 31, 2011 2014 , an amount equal to the sum of (i) | 23 | | 7% of the taxpayer's net income for the period prior to | 24 | | January 1, 2012 2015 , as calculated under Section 202.5, | 25 | | and (ii) 4.8% 5.25% of the taxpayer's net income for the | 26 | | period after December 31, 2011 2014 , as calculated under |
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| 1 | | Section 202.5. | 2 | | (12) In the case of a corporation, for taxable years | 3 | | beginning on or after January 1, 2012 2015, and ending | 4 | | prior to January 1, 2025 , an amount equal to 4.8% 5.25% of | 5 | | the taxpayer's net income for the taxable year. | 6 | | (13) (Blank) In the case of a corporation, for taxable | 7 | | years beginning prior to January 1, 2025, and ending after | 8 | | December 31, 2024, an amount equal to the sum of (i) 5.25% | 9 | | of the taxpayer's net income for the period prior to | 10 | | January 1, 2025, as calculated under Section 202.5, and | 11 | | (ii) 4.8% of the taxpayer's net income for the period after | 12 | | December 31, 2024, as calculated under Section 202.5 . | 13 | | (14) (Blank) In the case of a corporation, for taxable | 14 | | years beginning on or after January 1, 2025, an amount | 15 | | equal to 4.8% of the taxpayer's net income for the taxable | 16 | | year . | 17 | | The rates under this subsection (b) are subject to the | 18 | | provisions of Section 201.5. | 19 | | (c) Personal Property Tax Replacement Income Tax.
| 20 | | Beginning on July 1, 1979 and thereafter, in addition to such | 21 | | income
tax, there is also hereby imposed the Personal Property | 22 | | Tax Replacement
Income Tax measured by net income on every | 23 | | corporation (including Subchapter
S corporations), partnership | 24 | | and trust, for each taxable year ending after
June 30, 1979. | 25 | | Such taxes are imposed on the privilege of earning or
receiving | 26 | | income in or as a resident of this State. The Personal Property
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| 1 | | Tax Replacement Income Tax shall be in addition to the income | 2 | | tax imposed
by subsections (a) and (b) of this Section and in | 3 | | addition to all other
occupation or privilege taxes imposed by | 4 | | this State or by any municipal
corporation or political | 5 | | subdivision thereof. | 6 | | (d) Additional Personal Property Tax Replacement Income | 7 | | Tax Rates.
The personal property tax replacement income tax | 8 | | imposed by this subsection
and subsection (c) of this Section | 9 | | in the case of a corporation, other
than a Subchapter S | 10 | | corporation and except as adjusted by subsection (d-1),
shall | 11 | | be an additional amount equal to
2.85% of such taxpayer's net | 12 | | income for the taxable year, except that
beginning on January | 13 | | 1, 1981, and thereafter, the rate of 2.85% specified
in this | 14 | | subsection shall be reduced to 2.5%, and in the case of a
| 15 | | partnership, trust or a Subchapter S corporation shall be an | 16 | | additional
amount equal to 1.5% of such taxpayer's net income | 17 | | for the taxable year. | 18 | | (d-1) Rate reduction for certain foreign insurers. In the | 19 | | case of a
foreign insurer, as defined by Section 35A-5 of the | 20 | | Illinois Insurance Code,
whose state or country of domicile | 21 | | imposes on insurers domiciled in Illinois
a retaliatory tax | 22 | | (excluding any insurer
whose premiums from reinsurance assumed | 23 | | are 50% or more of its total insurance
premiums as determined | 24 | | under paragraph (2) of subsection (b) of Section 304,
except | 25 | | that for purposes of this determination premiums from | 26 | | reinsurance do
not include premiums from inter-affiliate |
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| 1 | | reinsurance arrangements),
beginning with taxable years ending | 2 | | on or after December 31, 1999,
the sum of
the rates of tax | 3 | | imposed by subsections (b) and (d) shall be reduced (but not
| 4 | | increased) to the rate at which the total amount of tax imposed | 5 | | under this Act,
net of all credits allowed under this Act, | 6 | | shall equal (i) the total amount of
tax that would be imposed | 7 | | on the foreign insurer's net income allocable to
Illinois for | 8 | | the taxable year by such foreign insurer's state or country of
| 9 | | domicile if that net income were subject to all income taxes | 10 | | and taxes
measured by net income imposed by such foreign | 11 | | insurer's state or country of
domicile, net of all credits | 12 | | allowed or (ii) a rate of zero if no such tax is
imposed on such | 13 | | income by the foreign insurer's state of domicile.
For the | 14 | | purposes of this subsection (d-1), an inter-affiliate includes | 15 | | a
mutual insurer under common management. | 16 | | (1) For the purposes of subsection (d-1), in no event | 17 | | shall the sum of the
rates of tax imposed by subsections | 18 | | (b) and (d) be reduced below the rate at
which the sum of: | 19 | | (A) the total amount of tax imposed on such foreign | 20 | | insurer under
this Act for a taxable year, net of all | 21 | | credits allowed under this Act, plus | 22 | | (B) the privilege tax imposed by Section 409 of the | 23 | | Illinois Insurance
Code, the fire insurance company | 24 | | tax imposed by Section 12 of the Fire
Investigation | 25 | | Act, and the fire department taxes imposed under | 26 | | Section 11-10-1
of the Illinois Municipal Code, |
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| 1 | | equals 1.25% for taxable years ending prior to December 31, | 2 | | 2003, or
1.75% for taxable years ending on or after | 3 | | December 31, 2003, of the net
taxable premiums written for | 4 | | the taxable year,
as described by subsection (1) of Section | 5 | | 409 of the Illinois Insurance Code.
This paragraph will in | 6 | | no event increase the rates imposed under subsections
(b) | 7 | | and (d). | 8 | | (2) Any reduction in the rates of tax imposed by this | 9 | | subsection shall be
applied first against the rates imposed | 10 | | by subsection (b) and only after the
tax imposed by | 11 | | subsection (a) net of all credits allowed under this | 12 | | Section
other than the credit allowed under subsection (i) | 13 | | has been reduced to zero,
against the rates imposed by | 14 | | subsection (d). | 15 | | This subsection (d-1) is exempt from the provisions of | 16 | | Section 250. | 17 | | (e) Investment credit. A taxpayer shall be allowed a credit
| 18 | | against the Personal Property Tax Replacement Income Tax for
| 19 | | investment in qualified property. | 20 | | (1) A taxpayer shall be allowed a credit equal to .5% | 21 | | of
the basis of qualified property placed in service during | 22 | | the taxable year,
provided such property is placed in | 23 | | service on or after
July 1, 1984. There shall be allowed an | 24 | | additional credit equal
to .5% of the basis of qualified | 25 | | property placed in service during the
taxable year, | 26 | | provided such property is placed in service on or
after |
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| 1 | | July 1, 1986, and the taxpayer's base employment
within | 2 | | Illinois has increased by 1% or more over the preceding | 3 | | year as
determined by the taxpayer's employment records | 4 | | filed with the
Illinois Department of Employment Security. | 5 | | Taxpayers who are new to
Illinois shall be deemed to have | 6 | | met the 1% growth in base employment for
the first year in | 7 | | which they file employment records with the Illinois
| 8 | | Department of Employment Security. The provisions added to | 9 | | this Section by
Public Act 85-1200 (and restored by Public | 10 | | Act 87-895) shall be
construed as declaratory of existing | 11 | | law and not as a new enactment. If,
in any year, the | 12 | | increase in base employment within Illinois over the
| 13 | | preceding year is less than 1%, the additional credit shall | 14 | | be limited to that
percentage times a fraction, the | 15 | | numerator of which is .5% and the denominator
of which is | 16 | | 1%, but shall not exceed .5%. The investment credit shall | 17 | | not be
allowed to the extent that it would reduce a | 18 | | taxpayer's liability in any tax
year below zero, nor may | 19 | | any credit for qualified property be allowed for any
year | 20 | | other than the year in which the property was placed in | 21 | | service in
Illinois. For tax years ending on or after | 22 | | December 31, 1987, and on or
before December 31, 1988, the | 23 | | credit shall be allowed for the tax year in
which the | 24 | | property is placed in service, or, if the amount of the | 25 | | credit
exceeds the tax liability for that year, whether it | 26 | | exceeds the original
liability or the liability as later |
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| 1 | | amended, such excess may be carried
forward and applied to | 2 | | the tax liability of the 5 taxable years following
the | 3 | | excess credit years if the taxpayer (i) makes investments | 4 | | which cause
the creation of a minimum of 2,000 full-time | 5 | | equivalent jobs in Illinois,
(ii) is located in an | 6 | | enterprise zone established pursuant to the Illinois
| 7 | | Enterprise Zone Act and (iii) is certified by the | 8 | | Department of Commerce
and Community Affairs (now | 9 | | Department of Commerce and Economic Opportunity) as | 10 | | complying with the requirements specified in
clause (i) and | 11 | | (ii) by July 1, 1986. The Department of Commerce and
| 12 | | Community Affairs (now Department of Commerce and Economic | 13 | | Opportunity) shall notify the Department of Revenue of all | 14 | | such
certifications immediately. For tax years ending | 15 | | after December 31, 1988,
the credit shall be allowed for | 16 | | the tax year in which the property is
placed in service, | 17 | | or, if the amount of the credit exceeds the tax
liability | 18 | | for that year, whether it exceeds the original liability or | 19 | | the
liability as later amended, such excess may be carried | 20 | | forward and applied
to the tax liability of the 5 taxable | 21 | | years following the excess credit
years. The credit shall | 22 | | be applied to the earliest year for which there is
a | 23 | | liability. If there is credit from more than one tax year | 24 | | that is
available to offset a liability, earlier credit | 25 | | shall be applied first. | 26 | | (2) The term "qualified property" means property |
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| 1 | | which: | 2 | | (A) is tangible, whether new or used, including | 3 | | buildings and structural
components of buildings and | 4 | | signs that are real property, but not including
land or | 5 | | improvements to real property that are not a structural | 6 | | component of a
building such as landscaping, sewer | 7 | | lines, local access roads, fencing, parking
lots, and | 8 | | other appurtenances; | 9 | | (B) is depreciable pursuant to Section 167 of the | 10 | | Internal Revenue Code,
except that "3-year property" | 11 | | as defined in Section 168(c)(2)(A) of that
Code is not | 12 | | eligible for the credit provided by this subsection | 13 | | (e); | 14 | | (C) is acquired by purchase as defined in Section | 15 | | 179(d) of
the Internal Revenue Code; | 16 | | (D) is used in Illinois by a taxpayer who is | 17 | | primarily engaged in
manufacturing, or in mining coal | 18 | | or fluorite, or in retailing, or was placed in service | 19 | | on or after July 1, 2006 in a River Edge Redevelopment | 20 | | Zone established pursuant to the River Edge | 21 | | Redevelopment Zone Act; and | 22 | | (E) has not previously been used in Illinois in | 23 | | such a manner and by
such a person as would qualify for | 24 | | the credit provided by this subsection
(e) or | 25 | | subsection (f). | 26 | | (3) For purposes of this subsection (e), |
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| 1 | | "manufacturing" means
the material staging and production | 2 | | of tangible personal property by
procedures commonly | 3 | | regarded as manufacturing, processing, fabrication, or
| 4 | | assembling which changes some existing material into new | 5 | | shapes, new
qualities, or new combinations. For purposes of | 6 | | this subsection
(e) the term "mining" shall have the same | 7 | | meaning as the term "mining" in
Section 613(c) of the | 8 | | Internal Revenue Code. For purposes of this subsection
(e), | 9 | | the term "retailing" means the sale of tangible personal | 10 | | property for use or consumption and not for resale, or
| 11 | | services rendered in conjunction with the sale of tangible | 12 | | personal property for use or consumption and not for | 13 | | resale. For purposes of this subsection (e), "tangible | 14 | | personal property" has the same meaning as when that term | 15 | | is used in the Retailers' Occupation Tax Act, and, for | 16 | | taxable years ending after December 31, 2008, does not | 17 | | include the generation, transmission, or distribution of | 18 | | electricity. | 19 | | (4) The basis of qualified property shall be the basis
| 20 | | used to compute the depreciation deduction for federal | 21 | | income tax purposes. | 22 | | (5) If the basis of the property for federal income tax | 23 | | depreciation
purposes is increased after it has been placed | 24 | | in service in Illinois by
the taxpayer, the amount of such | 25 | | increase shall be deemed property placed
in service on the | 26 | | date of such increase in basis. |
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| 1 | | (6) The term "placed in service" shall have the same
| 2 | | meaning as under Section 46 of the Internal Revenue Code. | 3 | | (7) If during any taxable year, any property ceases to
| 4 | | be qualified property in the hands of the taxpayer within | 5 | | 48 months after
being placed in service, or the situs of | 6 | | any qualified property is
moved outside Illinois within 48 | 7 | | months after being placed in service, the
Personal Property | 8 | | Tax Replacement Income Tax for such taxable year shall be
| 9 | | increased. Such increase shall be determined by (i) | 10 | | recomputing the
investment credit which would have been | 11 | | allowed for the year in which
credit for such property was | 12 | | originally allowed by eliminating such
property from such | 13 | | computation and, (ii) subtracting such recomputed credit
| 14 | | from the amount of credit previously allowed. For the | 15 | | purposes of this
paragraph (7), a reduction of the basis of | 16 | | qualified property resulting
from a redetermination of the | 17 | | purchase price shall be deemed a disposition
of qualified | 18 | | property to the extent of such reduction. | 19 | | (8) Unless the investment credit is extended by law, | 20 | | the
basis of qualified property shall not include costs | 21 | | incurred after
December 31, 2013, except for costs incurred | 22 | | pursuant to a binding
contract entered into on or before | 23 | | December 31, 2013. | 24 | | (9) Each taxable year ending before December 31, 2000, | 25 | | a partnership may
elect to pass through to its
partners the | 26 | | credits to which the partnership is entitled under this |
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| 1 | | subsection
(e) for the taxable year. A partner may use the | 2 | | credit allocated to him or her
under this paragraph only | 3 | | against the tax imposed in subsections (c) and (d) of
this | 4 | | Section. If the partnership makes that election, those | 5 | | credits shall be
allocated among the partners in the | 6 | | partnership in accordance with the rules
set forth in | 7 | | Section 704(b) of the Internal Revenue Code, and the rules
| 8 | | promulgated under that Section, and the allocated amount of | 9 | | the credits shall
be allowed to the partners for that | 10 | | taxable year. The partnership shall make
this election on | 11 | | its Personal Property Tax Replacement Income Tax return for
| 12 | | that taxable year. The election to pass through the credits | 13 | | shall be
irrevocable. | 14 | | For taxable years ending on or after December 31, 2000, | 15 | | a
partner that qualifies its
partnership for a subtraction | 16 | | under subparagraph (I) of paragraph (2) of
subsection (d) | 17 | | of Section 203 or a shareholder that qualifies a Subchapter | 18 | | S
corporation for a subtraction under subparagraph (S) of | 19 | | paragraph (2) of
subsection (b) of Section 203 shall be | 20 | | allowed a credit under this subsection
(e) equal to its | 21 | | share of the credit earned under this subsection (e) during
| 22 | | the taxable year by the partnership or Subchapter S | 23 | | corporation, determined in
accordance with the | 24 | | determination of income and distributive share of
income | 25 | | under Sections 702 and 704 and Subchapter S of the Internal | 26 | | Revenue
Code. This paragraph is exempt from the provisions |
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| 1 | | of Section 250. | 2 | | (f) Investment credit; Enterprise Zone; River Edge | 3 | | Redevelopment Zone. | 4 | | (1) A taxpayer shall be allowed a credit against the | 5 | | tax imposed
by subsections (a) and (b) of this Section for | 6 | | investment in qualified
property which is placed in service | 7 | | in an Enterprise Zone created
pursuant to the Illinois | 8 | | Enterprise Zone Act or, for property placed in service on | 9 | | or after July 1, 2006, a River Edge Redevelopment Zone | 10 | | established pursuant to the River Edge Redevelopment Zone | 11 | | Act. For partners, shareholders
of Subchapter S | 12 | | corporations, and owners of limited liability companies,
| 13 | | if the liability company is treated as a partnership for | 14 | | purposes of
federal and State income taxation, there shall | 15 | | be allowed a credit under
this subsection (f) to be | 16 | | determined in accordance with the determination
of income | 17 | | and distributive share of income under Sections 702 and 704 | 18 | | and
Subchapter S of the Internal Revenue Code. The credit | 19 | | shall be .5% of the
basis for such property. The credit | 20 | | shall be available only in the taxable
year in which the | 21 | | property is placed in service in the Enterprise Zone or | 22 | | River Edge Redevelopment Zone and
shall not be allowed to | 23 | | the extent that it would reduce a taxpayer's
liability for | 24 | | the tax imposed by subsections (a) and (b) of this Section | 25 | | to
below zero. For tax years ending on or after December | 26 | | 31, 1985, the credit
shall be allowed for the tax year in |
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| 1 | | which the property is placed in
service, or, if the amount | 2 | | of the credit exceeds the tax liability for that
year, | 3 | | whether it exceeds the original liability or the liability | 4 | | as later
amended, such excess may be carried forward and | 5 | | applied to the tax
liability of the 5 taxable years | 6 | | following the excess credit year.
The credit shall be | 7 | | applied to the earliest year for which there is a
| 8 | | liability. If there is credit from more than one tax year | 9 | | that is available
to offset a liability, the credit | 10 | | accruing first in time shall be applied
first. | 11 | | (2) The term qualified property means property which: | 12 | | (A) is tangible, whether new or used, including | 13 | | buildings and
structural components of buildings; | 14 | | (B) is depreciable pursuant to Section 167 of the | 15 | | Internal Revenue
Code, except that "3-year property" | 16 | | as defined in Section 168(c)(2)(A) of
that Code is not | 17 | | eligible for the credit provided by this subsection | 18 | | (f); | 19 | | (C) is acquired by purchase as defined in Section | 20 | | 179(d) of
the Internal Revenue Code; | 21 | | (D) is used in the Enterprise Zone or River Edge | 22 | | Redevelopment Zone by the taxpayer; and | 23 | | (E) has not been previously used in Illinois in | 24 | | such a manner and by
such a person as would qualify for | 25 | | the credit provided by this subsection
(f) or | 26 | | subsection (e). |
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| 1 | | (3) The basis of qualified property shall be the basis | 2 | | used to compute
the depreciation deduction for federal | 3 | | income tax purposes. | 4 | | (4) If the basis of the property for federal income tax | 5 | | depreciation
purposes is increased after it has been placed | 6 | | in service in the Enterprise
Zone or River Edge | 7 | | Redevelopment Zone by the taxpayer, the amount of such | 8 | | increase shall be deemed property
placed in service on the | 9 | | date of such increase in basis. | 10 | | (5) The term "placed in service" shall have the same | 11 | | meaning as under
Section 46 of the Internal Revenue Code. | 12 | | (6) If during any taxable year, any property ceases to | 13 | | be qualified
property in the hands of the taxpayer within | 14 | | 48 months after being placed
in service, or the situs of | 15 | | any qualified property is moved outside the
Enterprise Zone | 16 | | or River Edge Redevelopment Zone within 48 months after | 17 | | being placed in service, the tax
imposed under subsections | 18 | | (a) and (b) of this Section for such taxable year
shall be | 19 | | increased. Such increase shall be determined by (i) | 20 | | recomputing
the investment credit which would have been | 21 | | allowed for the year in which
credit for such property was | 22 | | originally allowed by eliminating such
property from such | 23 | | computation, and (ii) subtracting such recomputed credit
| 24 | | from the amount of credit previously allowed. For the | 25 | | purposes of this
paragraph (6), a reduction of the basis of | 26 | | qualified property resulting
from a redetermination of the |
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| 1 | | purchase price shall be deemed a disposition
of qualified | 2 | | property to the extent of such reduction. | 3 | | (7) There shall be allowed an additional credit equal | 4 | | to 0.5% of the basis of qualified property placed in | 5 | | service during the taxable year in a River Edge | 6 | | Redevelopment Zone, provided such property is placed in | 7 | | service on or after July 1, 2006, and the taxpayer's base | 8 | | employment within Illinois has increased by 1% or more over | 9 | | the preceding year as determined by the taxpayer's | 10 | | employment records filed with the Illinois Department of | 11 | | Employment Security. Taxpayers who are new to Illinois | 12 | | shall be deemed to have met the 1% growth in base | 13 | | employment for the first year in which they file employment | 14 | | records with the Illinois Department of Employment | 15 | | Security. If, in any year, the increase in base employment | 16 | | within Illinois over the preceding year is less than 1%, | 17 | | the additional credit shall be limited to that percentage | 18 | | times a fraction, the numerator of which is 0.5% and the | 19 | | denominator of which is 1%, but shall not exceed 0.5%.
| 20 | | (g) Jobs Tax Credit; Enterprise Zone, River Edge | 21 | | Redevelopment Zone, and Foreign Trade Zone or Sub-Zone. | 22 | | (1) A taxpayer conducting a trade or business in an | 23 | | enterprise zone
or a High Impact Business designated by the | 24 | | Department of Commerce and
Economic Opportunity or for | 25 | | taxable years ending on or after December 31, 2006, in a | 26 | | River Edge Redevelopment Zone conducting a trade or |
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| 1 | | business in a federally designated
Foreign Trade Zone or | 2 | | Sub-Zone shall be allowed a credit against the tax
imposed | 3 | | by subsections (a) and (b) of this Section in the amount of | 4 | | $500
per eligible employee hired to work in the zone during | 5 | | the taxable year. | 6 | | (2) To qualify for the credit: | 7 | | (A) the taxpayer must hire 5 or more eligible | 8 | | employees to work in an
enterprise zone, River Edge | 9 | | Redevelopment Zone, or federally designated Foreign | 10 | | Trade Zone or Sub-Zone
during the taxable year; | 11 | | (B) the taxpayer's total employment within the | 12 | | enterprise zone, River Edge Redevelopment Zone, or
| 13 | | federally designated Foreign Trade Zone or Sub-Zone | 14 | | must
increase by 5 or more full-time employees beyond | 15 | | the total employed in that
zone at the end of the | 16 | | previous tax year for which a jobs tax
credit under | 17 | | this Section was taken, or beyond the total employed by | 18 | | the
taxpayer as of December 31, 1985, whichever is | 19 | | later; and | 20 | | (C) the eligible employees must be employed 180 | 21 | | consecutive days in
order to be deemed hired for | 22 | | purposes of this subsection. | 23 | | (3) An "eligible employee" means an employee who is: | 24 | | (A) Certified by the Department of Commerce and | 25 | | Economic Opportunity
as "eligible for services" | 26 | | pursuant to regulations promulgated in
accordance with |
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| 1 | | Title II of the Job Training Partnership Act, Training
| 2 | | Services for the Disadvantaged or Title III of the Job | 3 | | Training Partnership
Act, Employment and Training | 4 | | Assistance for Dislocated Workers Program. | 5 | | (B) Hired after the enterprise zone, River Edge | 6 | | Redevelopment Zone, or federally designated Foreign
| 7 | | Trade Zone or Sub-Zone was designated or the trade or
| 8 | | business was located in that zone, whichever is later. | 9 | | (C) Employed in the enterprise zone, River Edge | 10 | | Redevelopment Zone, or Foreign Trade Zone or
Sub-Zone. | 11 | | An employee is employed in an
enterprise zone or | 12 | | federally designated Foreign Trade Zone or Sub-Zone
if | 13 | | his services are rendered there or it is the base of
| 14 | | operations for the services performed. | 15 | | (D) A full-time employee working 30 or more hours | 16 | | per week. | 17 | | (4) For tax years ending on or after December 31, 1985 | 18 | | and prior to
December 31, 1988, the credit shall be allowed | 19 | | for the tax year in which
the eligible employees are hired. | 20 | | For tax years ending on or after
December 31, 1988, the | 21 | | credit shall be allowed for the tax year immediately
| 22 | | following the tax year in which the eligible employees are | 23 | | hired. If the
amount of the credit exceeds the tax | 24 | | liability for that year, whether it
exceeds the original | 25 | | liability or the liability as later amended, such
excess | 26 | | may be carried forward and applied to the tax liability of |
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| 1 | | the 5
taxable years following the excess credit year. The | 2 | | credit shall be
applied to the earliest year for which | 3 | | there is a liability. If there is
credit from more than one | 4 | | tax year that is available to offset a liability,
earlier | 5 | | credit shall be applied first. | 6 | | (5) The Department of Revenue shall promulgate such | 7 | | rules and regulations
as may be deemed necessary to carry | 8 | | out the purposes of this subsection (g). | 9 | | (6) The credit shall be available for eligible | 10 | | employees hired on or
after January 1, 1986. | 11 | | (h) Investment credit; High Impact Business. | 12 | | (1) Subject to subsections (b) and (b-5) of Section
5.5 | 13 | | of the Illinois Enterprise Zone Act, a taxpayer shall be | 14 | | allowed a credit
against the tax imposed by subsections (a) | 15 | | and (b) of this Section for
investment in qualified
| 16 | | property which is placed in service by a Department of | 17 | | Commerce and Economic Opportunity
designated High Impact | 18 | | Business. The credit shall be .5% of the basis
for such | 19 | | property. The credit shall not be available (i) until the | 20 | | minimum
investments in qualified property set forth in | 21 | | subdivision (a)(3)(A) of
Section 5.5 of the Illinois
| 22 | | Enterprise Zone Act have been satisfied
or (ii) until the | 23 | | time authorized in subsection (b-5) of the Illinois
| 24 | | Enterprise Zone Act for entities designated as High Impact | 25 | | Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and | 26 | | (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone |
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| 1 | | Act, 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. The | 4 | | credit applicable to such investments shall be
taken in the | 5 | | taxable year in which such investments have been completed. | 6 | | The
credit for additional investments beyond the minimum | 7 | | investment by a designated
high impact business authorized | 8 | | under subdivision (a)(3)(A) of Section 5.5 of
the Illinois | 9 | | Enterprise Zone Act shall be available only in the taxable | 10 | | year in
which the property is placed in service and shall | 11 | | not be allowed to the extent
that it would reduce a | 12 | | taxpayer's liability for the tax imposed by subsections
(a) | 13 | | and (b) of this Section to below zero.
For tax years ending | 14 | | on or after December 31, 1987, the credit shall be
allowed | 15 | | for the tax year in which the property is placed in | 16 | | service, or, if
the amount of the credit exceeds the tax | 17 | | liability for that year, whether
it exceeds the original | 18 | | liability or the liability as later amended, such
excess | 19 | | may be carried forward and applied to the tax liability of | 20 | | the 5
taxable years following the excess credit year. The | 21 | | credit shall be
applied to the earliest year for which | 22 | | there is a liability. If there is
credit from more than one | 23 | | tax year that is available to offset a liability,
the | 24 | | credit accruing first in time shall be applied first. | 25 | | Changes made in this subdivision (h)(1) by Public Act | 26 | | 88-670
restore changes made by Public Act 85-1182 and |
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| 1 | | reflect existing law. | 2 | | (2) The term qualified property means property which: | 3 | | (A) is tangible, whether new or used, including | 4 | | buildings and
structural components of buildings; | 5 | | (B) is depreciable pursuant to Section 167 of the | 6 | | Internal Revenue
Code, except that "3-year property" | 7 | | as defined in Section 168(c)(2)(A) of
that Code is not | 8 | | eligible for the credit provided by this subsection | 9 | | (h); | 10 | | (C) is acquired by purchase as defined in Section | 11 | | 179(d) of the
Internal Revenue Code; and | 12 | | (D) is not eligible for the Enterprise Zone | 13 | | Investment Credit provided
by subsection (f) of this | 14 | | Section. | 15 | | (3) The basis of qualified property shall be the basis | 16 | | used to compute
the depreciation deduction for federal | 17 | | income tax purposes. | 18 | | (4) If the basis of the property for federal income tax | 19 | | depreciation
purposes is increased after it has been placed | 20 | | in service in a federally
designated Foreign Trade Zone or | 21 | | Sub-Zone located in Illinois by the taxpayer,
the amount of | 22 | | such increase shall be deemed property placed in service on
| 23 | | the date of such increase in basis. | 24 | | (5) The term "placed in service" shall have the same | 25 | | meaning as under
Section 46 of the Internal Revenue Code. | 26 | | (6) If during any taxable year ending on or before |
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| 1 | | December 31, 1996,
any property ceases to be qualified
| 2 | | property in the hands of the taxpayer within 48 months | 3 | | after being placed
in service, or the situs of any | 4 | | qualified property is moved outside
Illinois within 48 | 5 | | months after being placed in service, the tax imposed
under | 6 | | subsections (a) and (b) of this Section for such taxable | 7 | | year shall
be increased. Such increase shall be determined | 8 | | by (i) recomputing the
investment credit which would have | 9 | | been allowed for the year in which
credit for such property | 10 | | was originally allowed by eliminating such
property from | 11 | | such computation, and (ii) subtracting such recomputed | 12 | | credit
from the amount of credit previously allowed. For | 13 | | the purposes of this
paragraph (6), a reduction of the | 14 | | basis of qualified property resulting
from a | 15 | | redetermination of the purchase price shall be deemed a | 16 | | disposition
of qualified property to the extent of such | 17 | | reduction. | 18 | | (7) Beginning with tax years ending after December 31, | 19 | | 1996, if a
taxpayer qualifies for the credit under this | 20 | | subsection (h) and thereby is
granted a tax abatement and | 21 | | the taxpayer relocates its entire facility in
violation of | 22 | | the explicit terms and length of the contract under Section
| 23 | | 18-183 of the Property Tax Code, the tax imposed under | 24 | | subsections
(a) and (b) of this Section shall be increased | 25 | | for the taxable year
in which the taxpayer relocated its | 26 | | facility by an amount equal to the
amount of credit |
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| 1 | | received by the taxpayer under this subsection (h). | 2 | | (i) Credit for Personal Property Tax Replacement Income | 3 | | Tax.
For tax years ending prior to December 31, 2003, a credit | 4 | | shall be allowed
against the tax imposed by
subsections (a) and | 5 | | (b) of this Section for the tax imposed by subsections (c)
and | 6 | | (d) of this Section. This credit shall be computed by | 7 | | multiplying the tax
imposed by subsections (c) and (d) of this | 8 | | Section by a fraction, the numerator
of which is base income | 9 | | allocable to Illinois and the denominator of which is
Illinois | 10 | | base income, and further multiplying the product by the tax | 11 | | rate
imposed by subsections (a) and (b) of this Section. | 12 | | Any credit earned on or after December 31, 1986 under
this | 13 | | subsection which is unused in the year
the credit is computed | 14 | | because it exceeds the tax liability imposed by
subsections (a) | 15 | | and (b) for that year (whether it exceeds the original
| 16 | | liability or the liability as later amended) may be carried | 17 | | forward and
applied to the tax liability imposed by subsections | 18 | | (a) and (b) of the 5
taxable years following the excess credit | 19 | | year, provided that no credit may
be carried forward to any | 20 | | year ending on or
after December 31, 2003. This credit shall be
| 21 | | applied first to the earliest year for which there is a | 22 | | liability. If
there is a credit under this subsection from more | 23 | | than one tax year that is
available to offset a liability the | 24 | | earliest credit arising under this
subsection shall be applied | 25 | | first. | 26 | | If, during any taxable year ending on or after December 31, |
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| 1 | | 1986, the
tax imposed by subsections (c) and (d) of this | 2 | | Section for which a taxpayer
has claimed a credit under this | 3 | | subsection (i) is reduced, the amount of
credit for such tax | 4 | | shall also be reduced. Such reduction shall be
determined by | 5 | | recomputing the credit to take into account the reduced tax
| 6 | | imposed by subsections (c) and (d). If any portion of the
| 7 | | reduced amount of credit has been carried to a different | 8 | | taxable year, an
amended return shall be filed for such taxable | 9 | | year to reduce the amount of
credit claimed. | 10 | | (j) Training expense credit. Beginning with tax years | 11 | | ending on or
after December 31, 1986 and prior to December 31, | 12 | | 2003, a taxpayer shall be
allowed a credit against the
tax | 13 | | imposed by subsections (a) and (b) under this Section
for all | 14 | | amounts paid or accrued, on behalf of all persons
employed by | 15 | | the taxpayer in Illinois or Illinois residents employed
outside | 16 | | of Illinois by a taxpayer, for educational or vocational | 17 | | training in
semi-technical or technical fields or semi-skilled | 18 | | or skilled fields, which
were deducted from gross income in the | 19 | | computation of taxable income. The
credit against the tax | 20 | | imposed by subsections (a) and (b) shall be 1.6% of
such | 21 | | training expenses. For partners, shareholders of subchapter S
| 22 | | corporations, and owners of limited liability companies, if the | 23 | | liability
company is treated as a partnership for purposes of | 24 | | federal and State income
taxation, there shall be allowed a | 25 | | credit under this subsection (j) to be
determined in accordance | 26 | | with the determination of income and distributive
share of |
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| 1 | | income under Sections 702 and 704 and subchapter S of the | 2 | | Internal
Revenue Code. | 3 | | Any credit allowed under this subsection which is unused in | 4 | | the year
the credit is earned may be carried forward to each of | 5 | | the 5 taxable
years following the year for which the credit is | 6 | | first computed until it is
used. This credit shall be applied | 7 | | first to the earliest year for which
there is a liability. If | 8 | | there is a credit under this subsection from more
than one tax | 9 | | year that is available to offset a liability the earliest
| 10 | | credit arising under this subsection shall be applied first. No | 11 | | carryforward
credit may be claimed in any tax year ending on or | 12 | | after
December 31, 2003. | 13 | | (k) Research and development credit. | 14 | | For tax years ending after July 1, 1990 and prior to
| 15 | | December 31, 2003, and beginning again for tax years ending on | 16 | | or after December 31, 2004, and ending prior to January 1, | 17 | | 2011, a taxpayer shall be
allowed a credit against the tax | 18 | | imposed by subsections (a) and (b) of this
Section for | 19 | | increasing research activities in this State. The credit
| 20 | | allowed against the tax imposed by subsections (a) and (b) | 21 | | shall be equal
to 6 1/2% of the qualifying expenditures for | 22 | | increasing research activities
in this State. For partners, | 23 | | shareholders of subchapter S corporations, and
owners of | 24 | | limited liability companies, if the liability company is | 25 | | treated as a
partnership for purposes of federal and State | 26 | | income taxation, there shall be
allowed a credit under this |
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| 1 | | subsection to be determined in accordance with the
| 2 | | determination of income and distributive share of income under | 3 | | Sections 702 and
704 and subchapter S of the Internal Revenue | 4 | | Code. | 5 | | For purposes of this subsection, "qualifying expenditures" | 6 | | means the
qualifying expenditures as defined for the federal | 7 | | credit for increasing
research activities which would be | 8 | | allowable under Section 41 of the
Internal Revenue Code and | 9 | | which are conducted in this State, "qualifying
expenditures for | 10 | | increasing research activities in this State" means the
excess | 11 | | of qualifying expenditures for the taxable year in which | 12 | | incurred
over qualifying expenditures for the base period, | 13 | | "qualifying expenditures
for the base period" means the average | 14 | | of the qualifying expenditures for
each year in the base | 15 | | period, and "base period" means the 3 taxable years
immediately | 16 | | preceding the taxable year for which the determination is
being | 17 | | made. | 18 | | Any credit in excess of the tax liability for the taxable | 19 | | year
may be carried forward. A taxpayer may elect to have the
| 20 | | unused credit shown on its final completed return carried over | 21 | | as a credit
against the tax liability for the following 5 | 22 | | taxable years or until it has
been fully used, whichever occurs | 23 | | first; provided that no credit earned in a tax year ending | 24 | | prior to December 31, 2003 may be carried forward to any year | 25 | | ending on or after December 31, 2003, and no credit may be | 26 | | carried forward to any taxable year ending on or after January |
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| 1 | | 1, 2011. | 2 | | If an unused credit is carried forward to a given year from | 3 | | 2 or more
earlier years, that credit arising in the earliest | 4 | | year will be applied
first against the tax liability for the | 5 | | given year. If a tax liability for
the given year still | 6 | | remains, the credit from the next earliest year will
then be | 7 | | applied, and so on, until all credits have been used or no tax
| 8 | | liability for the given year remains. Any remaining unused | 9 | | credit or
credits then will be carried forward to the next | 10 | | following year in which a
tax liability is incurred, except | 11 | | that no credit can be carried forward to
a year which is more | 12 | | than 5 years after the year in which the expense for
which the | 13 | | credit is given was incurred. | 14 | | No inference shall be drawn from this amendatory Act of the | 15 | | 91st General
Assembly in construing this Section for taxable | 16 | | years beginning before January
1, 1999. | 17 | | (l) Environmental Remediation Tax Credit. | 18 | | (i) For tax years ending after December 31, 1997 and on | 19 | | or before
December 31, 2001, a taxpayer shall be allowed a | 20 | | credit against the tax
imposed by subsections (a) and (b) | 21 | | of this Section for certain amounts paid
for unreimbursed | 22 | | eligible remediation costs, as specified in this | 23 | | subsection.
For purposes of this Section, "unreimbursed | 24 | | eligible remediation costs" means
costs approved by the | 25 | | Illinois Environmental Protection Agency ("Agency") under
| 26 | | Section 58.14 of the Environmental Protection Act that were |
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| 1 | | paid in performing
environmental remediation at a site for | 2 | | which a No Further Remediation Letter
was issued by the | 3 | | Agency and recorded under Section 58.10 of the | 4 | | Environmental
Protection Act. The credit must be claimed | 5 | | for the taxable year in which
Agency approval of the | 6 | | eligible remediation costs is granted. The credit is
not | 7 | | available to any taxpayer if the taxpayer or any related | 8 | | party caused or
contributed to, in any material respect, a | 9 | | release of regulated substances on,
in, or under the site | 10 | | that was identified and addressed by the remedial
action | 11 | | pursuant to the Site Remediation Program of the | 12 | | Environmental Protection
Act. After the Pollution Control | 13 | | Board rules are adopted pursuant to the
Illinois | 14 | | Administrative Procedure Act for the administration and | 15 | | enforcement of
Section 58.9 of the Environmental | 16 | | Protection Act, determinations as to credit
availability | 17 | | for purposes of this Section shall be made consistent with | 18 | | those
rules. For purposes of this Section, "taxpayer" | 19 | | includes a person whose tax
attributes the taxpayer has | 20 | | succeeded to under Section 381 of the Internal
Revenue Code | 21 | | and "related party" includes the persons disallowed a | 22 | | deduction
for losses by paragraphs (b), (c), and (f)(1) of | 23 | | Section 267 of the Internal
Revenue Code by virtue of being | 24 | | a related taxpayer, as well as any of its
partners. The | 25 | | credit allowed against the tax imposed by subsections (a) | 26 | | and
(b) shall be equal to 25% of the unreimbursed eligible |
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| 1 | | remediation costs in
excess of $100,000 per site, except | 2 | | that the $100,000 threshold shall not apply
to any site | 3 | | contained in an enterprise zone as determined by the | 4 | | Department of
Commerce and Community Affairs (now | 5 | | Department of Commerce and Economic Opportunity). The | 6 | | total credit allowed shall not exceed
$40,000 per year with | 7 | | a maximum total of $150,000 per site. For partners and
| 8 | | shareholders of subchapter S corporations, there shall be | 9 | | allowed a credit
under this subsection to be determined in | 10 | | accordance with the determination of
income and | 11 | | distributive share of income under Sections 702 and 704 and
| 12 | | subchapter S of the Internal Revenue Code. | 13 | | (ii) A credit allowed under this subsection that is | 14 | | unused in the year
the credit is earned may be carried | 15 | | forward to each of the 5 taxable years
following the year | 16 | | for which the credit is first earned until it is used.
The | 17 | | term "unused credit" does not include any amounts of | 18 | | unreimbursed eligible
remediation costs in excess of the | 19 | | maximum credit per site authorized under
paragraph (i). | 20 | | This credit shall be applied first to the earliest year
for | 21 | | which there is a liability. If there is a credit under this | 22 | | subsection
from more than one tax year that is available to | 23 | | offset a liability, the
earliest credit arising under this | 24 | | subsection shall be applied first. A
credit allowed under | 25 | | this subsection may be sold to a buyer as part of a sale
of | 26 | | all or part of the remediation site for which the credit |
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| 1 | | was granted. The
purchaser of a remediation site and the | 2 | | tax credit shall succeed to the unused
credit and remaining | 3 | | carry-forward period of the seller. To perfect the
| 4 | | transfer, the assignor shall record the transfer in the | 5 | | chain of title for the
site and provide written notice to | 6 | | the Director of the Illinois Department of
Revenue of the | 7 | | assignor's intent to sell the remediation site and the | 8 | | amount of
the tax credit to be transferred as a portion of | 9 | | the sale. In no event may a
credit be transferred to any | 10 | | taxpayer if the taxpayer or a related party would
not be | 11 | | eligible under the provisions of subsection (i). | 12 | | (iii) For purposes of this Section, the term "site" | 13 | | shall have the same
meaning as under Section 58.2 of the | 14 | | Environmental Protection Act. | 15 | | (m) Education expense credit. Beginning with tax years | 16 | | ending after
December 31, 1999, a taxpayer who
is the custodian | 17 | | of one or more qualifying pupils shall be allowed a credit
| 18 | | against the tax imposed by subsections (a) and (b) of this | 19 | | Section for
qualified education expenses incurred on behalf of | 20 | | the qualifying pupils.
The credit shall be equal to 25% of | 21 | | qualified education expenses, but in no
event may the total | 22 | | credit under this subsection claimed by a
family that is the
| 23 | | custodian of qualifying pupils exceed $500. In no event shall a | 24 | | credit under
this subsection reduce the taxpayer's liability | 25 | | under this Act to less than
zero. This subsection is exempt | 26 | | from the provisions of Section 250 of this
Act. |
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| 1 | | For purposes of this subsection: | 2 | | "Qualifying pupils" means individuals who (i) are | 3 | | residents of the State of
Illinois, (ii) are under the age of | 4 | | 21 at the close of the school year for
which a credit is | 5 | | sought, and (iii) during the school year for which a credit
is | 6 | | sought were full-time pupils enrolled in a kindergarten through | 7 | | twelfth
grade education program at any school, as defined in | 8 | | this subsection. | 9 | | "Qualified education expense" means the amount incurred
on | 10 | | behalf of a qualifying pupil in excess of $250 for tuition, | 11 | | book fees, and
lab fees at the school in which the pupil is | 12 | | enrolled during the regular school
year. | 13 | | "School" means any public or nonpublic elementary or | 14 | | secondary school in
Illinois that is in compliance with Title | 15 | | VI of the Civil Rights Act of 1964
and attendance at which | 16 | | satisfies the requirements of Section 26-1 of the
School Code, | 17 | | except that nothing shall be construed to require a child to
| 18 | | attend any particular public or nonpublic school to qualify for | 19 | | the credit
under this Section. | 20 | | "Custodian" means, with respect to qualifying pupils, an | 21 | | Illinois resident
who is a parent, the parents, a legal | 22 | | guardian, or the legal guardians of the
qualifying pupils. | 23 | | (n) River Edge Redevelopment Zone site remediation tax | 24 | | credit.
| 25 | | (i) For tax years ending on or after December 31, 2006, | 26 | | a taxpayer shall be allowed a credit against the tax |
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| 1 | | imposed by subsections (a) and (b) of this Section for | 2 | | certain amounts paid for unreimbursed eligible remediation | 3 | | costs, as specified in this subsection. For purposes of | 4 | | this Section, "unreimbursed eligible remediation costs" | 5 | | means costs approved by the Illinois Environmental | 6 | | Protection Agency ("Agency") under Section 58.14a of the | 7 | | Environmental Protection Act that were paid in performing | 8 | | environmental remediation at a site within a River Edge | 9 | | Redevelopment Zone 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 of | 13 | | the eligible remediation costs is granted. The credit is | 14 | | 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 under | 17 | | the site that was identified and addressed by the remedial | 18 | | action pursuant to the Site Remediation Program of the | 19 | | Environmental Protection Act. Determinations as to credit | 20 | | availability for purposes of this Section shall be made | 21 | | consistent with rules adopted by the Pollution Control | 22 | | Board pursuant to the Illinois Administrative Procedure | 23 | | Act for the administration and enforcement of Section 58.9 | 24 | | of the Environmental Protection Act. For purposes of this | 25 | | Section, "taxpayer" includes a person whose tax attributes | 26 | | the taxpayer has succeeded to under Section 381 of the |
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| 1 | | Internal Revenue Code and "related party" includes the | 2 | | persons disallowed a deduction for losses by paragraphs | 3 | | (b), (c), and (f)(1) of Section 267 of the Internal Revenue | 4 | | Code by virtue of being a related taxpayer, as well as any | 5 | | of its partners. The credit allowed against the tax imposed | 6 | | by subsections (a) and (b) shall be equal to 25% of the | 7 | | unreimbursed eligible remediation costs in excess of | 8 | | $100,000 per site. | 9 | | (ii) A credit allowed under this subsection that is | 10 | | unused in the year the credit is earned may be carried | 11 | | forward to each of the 5 taxable years following the year | 12 | | for which the credit is first earned until it is used. This | 13 | | credit shall be applied first to the earliest year for | 14 | | which there is a liability. If there is a credit under this | 15 | | subsection from more than one tax year that is available to | 16 | | offset a liability, the earliest credit arising under this | 17 | | subsection shall be applied first. A credit allowed under | 18 | | this subsection may be sold to a buyer as part of a sale of | 19 | | all or part of the remediation site for which the credit | 20 | | was granted. The purchaser of a remediation site and the | 21 | | tax credit shall succeed to the unused credit and remaining | 22 | | carry-forward period of the seller. To perfect the | 23 | | transfer, the assignor shall record the transfer in the | 24 | | chain of title for the site and provide written notice to | 25 | | the Director of the Illinois Department of Revenue of the | 26 | | assignor's intent to sell the remediation site and the |
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| 1 | | amount of the tax credit to be transferred as a portion of | 2 | | the sale. In no event may a credit be transferred to any | 3 | | taxpayer if the taxpayer or a related party would not be | 4 | | eligible under the provisions of subsection (i). | 5 | | (iii) For purposes of this Section, the term "site" | 6 | | shall have the same meaning as under Section 58.2 of the | 7 | | Environmental Protection Act. | 8 | | (Source: P.A. 96-115, eff. 7-31-09; 96-116, eff. 7-31-09; | 9 | | 96-937, eff. 6-23-10; 96-1000, eff. 7-2-10; 96-1496, eff. | 10 | | 1-13-11; 97-2, eff. 5-6-11.) | 11 | | (Text of Section after amendment by P.A. 97-636 ) | 12 | | Sec. 201. Tax Imposed. | 13 | | (a) In general. A tax measured by net income is hereby | 14 | | imposed on every
individual, corporation, trust and estate for | 15 | | each taxable year ending
after July 31, 1969 on the privilege | 16 | | of earning or receiving income in or
as a resident of this | 17 | | State. Such tax shall be in addition to all other
occupation or | 18 | | privilege taxes imposed by this State or by any municipal
| 19 | | corporation or political subdivision thereof. | 20 | | (b) Rates. The tax imposed by subsection (a) of this | 21 | | Section shall be
determined as follows, except as adjusted by | 22 | | subsection (d-1): | 23 | | (1) In the case of an individual, trust or estate, for | 24 | | taxable years
ending prior to July 1, 1989, an amount equal | 25 | | to 2 1/2% of the taxpayer's
net income for the taxable |
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| 1 | | year. | 2 | | (2) In the case of an individual, trust or estate, for | 3 | | taxable years
beginning prior to July 1, 1989 and ending | 4 | | after June 30, 1989, an amount
equal to the sum of (i) 2 | 5 | | 1/2% of the taxpayer's net income for the period
prior to | 6 | | July 1, 1989, as calculated under Section 202.3, and (ii) | 7 | | 3% of the
taxpayer's net income for the period after June | 8 | | 30, 1989, as calculated
under Section 202.3. | 9 | | (3) In the case of an individual, trust or estate, for | 10 | | taxable years
beginning after June 30, 1989, and ending | 11 | | prior to January 1, 2011, an amount equal to 3% of the | 12 | | taxpayer's net
income for the taxable year. | 13 | | (4) In the case of an individual, trust, or estate, for | 14 | | taxable years beginning prior to January 1, 2011, and | 15 | | ending after December 31, 2010, an amount equal to the sum | 16 | | of (i) 3% of the taxpayer's net income for the period prior | 17 | | to January 1, 2011, as calculated under Section 202.5, and | 18 | | (ii) 5% of the taxpayer's net income for the period after | 19 | | December 31, 2010, as calculated under Section 202.5. | 20 | | (5) In the case of an individual, trust, or estate, for | 21 | | taxable years beginning on or after January 1, 2011, and | 22 | | ending prior to January 1, 2012 2015 , an amount equal to 5% | 23 | | of the taxpayer's net income for the taxable year. | 24 | | (5.1) In the case of an individual, trust, or estate, | 25 | | for taxable years beginning prior to January 1, 2012 2015 , | 26 | | and ending after December 31, 2011 2014 , an amount equal to |
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| 1 | | the sum of (i) 5% of the taxpayer's net income for the | 2 | | period prior to January 1, 2012 2015 , as calculated under | 3 | | Section 202.5, and (ii) 3% 3.75% of the taxpayer's net | 4 | | income for the period after December 31, 2011 2014 , as | 5 | | calculated under Section 202.5. | 6 | | (5.2) In the case of an individual, trust, or estate, | 7 | | for taxable years beginning on or after January 1, 2012 | 8 | | 2015, and ending prior to January 1, 2025 , an amount equal | 9 | | to 3% 3.75% of the taxpayer's net income for the taxable | 10 | | year. | 11 | | (5.3) (Blank) In the case of an individual, trust, or | 12 | | estate, for taxable years beginning prior to January 1, | 13 | | 2025, and ending after December 31, 2024, an amount equal | 14 | | to the sum of (i) 3.75% of the taxpayer's net income for | 15 | | the period prior to January 1, 2025, as calculated under | 16 | | Section 202.5, and (ii) 3.25% of the taxpayer's net income | 17 | | for the period after December 31, 2024, as calculated under | 18 | | Section 202.5 . | 19 | | (5.4) (Blank) In the case of an individual, trust, or | 20 | | estate, for taxable years beginning on or after January 1, | 21 | | 2025, an amount equal to 3.25% of the taxpayer's net income | 22 | | for the taxable year . | 23 | | (6) In the case of a corporation, for taxable years
| 24 | | ending prior to July 1, 1989, an amount equal to 4% of the
| 25 | | taxpayer's net income for the taxable year. | 26 | | (7) In the case of a corporation, for taxable years |
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| 1 | | beginning prior to
July 1, 1989 and ending after June 30, | 2 | | 1989, an amount equal to the sum of
(i) 4% of the | 3 | | taxpayer's net income for the period prior to July 1, 1989,
| 4 | | as calculated under Section 202.3, and (ii) 4.8% of the | 5 | | taxpayer's net
income for the period after June 30, 1989, | 6 | | as calculated under Section
202.3. | 7 | | (8) In the case of a corporation, for taxable years | 8 | | beginning after
June 30, 1989, and ending prior to January | 9 | | 1, 2011, an amount equal to 4.8% of the taxpayer's net | 10 | | income for the
taxable year. | 11 | | (9) In the case of a corporation, for taxable years | 12 | | beginning prior to January 1, 2011, and ending after | 13 | | December 31, 2010, an amount equal to the sum of (i) 4.8% | 14 | | of the taxpayer's net income for the period prior to | 15 | | January 1, 2011, as calculated under Section 202.5, and | 16 | | (ii) 7% of the taxpayer's net income for the period after | 17 | | December 31, 2010, as calculated under Section 202.5. | 18 | | (10) In the case of a corporation, for taxable years | 19 | | beginning on or after January 1, 2011, and ending prior to | 20 | | January 1, 2012 2015 , an amount equal to 7% of the | 21 | | taxpayer's net income for the taxable year. | 22 | | (11) In the case of a corporation, for taxable years | 23 | | beginning prior to January 1, 2012 2015 , and ending after | 24 | | December 31, 2011 2014 , an amount equal to the sum of (i) | 25 | | 7% of the taxpayer's net income for the period prior to | 26 | | January 1, 2012 2015 , as calculated under Section 202.5, |
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| 1 | | and (ii) 4.8% 5.25% of the taxpayer's net income for the | 2 | | period after December 31, 2011 2014 , as calculated under | 3 | | Section 202.5. | 4 | | (12) In the case of a corporation, for taxable years | 5 | | beginning on or after January 1, 2012 2015, and ending | 6 | | prior to January 1, 2025 , an amount equal to 4.8% 5.25% of | 7 | | the taxpayer's net income for the taxable year. | 8 | | (13) (Blank) In the case of a corporation, for taxable | 9 | | years beginning prior to January 1, 2025, and ending after | 10 | | December 31, 2024, an amount equal to the sum of (i) 5.25% | 11 | | of the taxpayer's net income for the period prior to | 12 | | January 1, 2025, as calculated under Section 202.5, and | 13 | | (ii) 4.8% of the taxpayer's net income for the period after | 14 | | December 31, 2024, as calculated under Section 202.5 . | 15 | | (14) (Blank) In the case of a corporation, for taxable | 16 | | years beginning on or after January 1, 2025, an amount | 17 | | equal to 4.8% of the taxpayer's net income for the taxable | 18 | | year . | 19 | | The rates under this subsection (b) are subject to the | 20 | | provisions of Section 201.5. | 21 | | (c) Personal Property Tax Replacement Income Tax.
| 22 | | Beginning on July 1, 1979 and thereafter, in addition to such | 23 | | income
tax, there is also hereby imposed the Personal Property | 24 | | Tax Replacement
Income Tax measured by net income on every | 25 | | corporation (including Subchapter
S corporations), partnership | 26 | | and trust, for each taxable year ending after
June 30, 1979. |
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| 1 | | Such taxes are imposed on the privilege of earning or
receiving | 2 | | income in or as a resident of this State. The Personal Property
| 3 | | Tax Replacement Income Tax shall be in addition to the income | 4 | | tax imposed
by subsections (a) and (b) of this Section and in | 5 | | addition to all other
occupation or privilege taxes imposed by | 6 | | this State or by any municipal
corporation or political | 7 | | subdivision thereof. | 8 | | (d) Additional Personal Property Tax Replacement Income | 9 | | Tax Rates.
The personal property tax replacement income tax | 10 | | imposed by this subsection
and subsection (c) of this Section | 11 | | in the case of a corporation, other
than a Subchapter S | 12 | | corporation and except as adjusted by subsection (d-1),
shall | 13 | | be an additional amount equal to
2.85% of such taxpayer's net | 14 | | income for the taxable year, except that
beginning on January | 15 | | 1, 1981, and thereafter, the rate of 2.85% specified
in this | 16 | | subsection shall be reduced to 2.5%, and in the case of a
| 17 | | partnership, trust or a Subchapter S corporation shall be an | 18 | | additional
amount equal to 1.5% of such taxpayer's net income | 19 | | for the taxable year. | 20 | | (d-1) Rate reduction for certain foreign insurers. In the | 21 | | case of a
foreign insurer, as defined by Section 35A-5 of the | 22 | | Illinois Insurance Code,
whose state or country of domicile | 23 | | imposes on insurers domiciled in Illinois
a retaliatory tax | 24 | | (excluding any insurer
whose premiums from reinsurance assumed | 25 | | are 50% or more of its total insurance
premiums as determined | 26 | | under paragraph (2) of subsection (b) of Section 304,
except |
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| 1 | | that for purposes of this determination premiums from | 2 | | reinsurance do
not include premiums from inter-affiliate | 3 | | reinsurance arrangements),
beginning with taxable years ending | 4 | | on or after December 31, 1999,
the sum of
the rates of tax | 5 | | imposed by subsections (b) and (d) shall be reduced (but not
| 6 | | increased) to the rate at which the total amount of tax imposed | 7 | | under this Act,
net of all credits allowed under this Act, | 8 | | shall equal (i) the total amount of
tax that would be imposed | 9 | | on the foreign insurer's net income allocable to
Illinois for | 10 | | the taxable year by such foreign insurer's state or country of
| 11 | | domicile if that net income were subject to all income taxes | 12 | | and taxes
measured by net income imposed by such foreign | 13 | | insurer's state or country of
domicile, net of all credits | 14 | | allowed or (ii) a rate of zero if no such tax is
imposed on such | 15 | | income by the foreign insurer's state of domicile.
For the | 16 | | purposes of this subsection (d-1), an inter-affiliate includes | 17 | | a
mutual insurer under common management. | 18 | | (1) For the purposes of subsection (d-1), in no event | 19 | | shall the sum of the
rates of tax imposed by subsections | 20 | | (b) and (d) be reduced below the rate at
which the sum of: | 21 | | (A) the total amount of tax imposed on such foreign | 22 | | insurer under
this Act for a taxable year, net of all | 23 | | credits allowed under this Act, plus | 24 | | (B) the privilege tax imposed by Section 409 of the | 25 | | Illinois Insurance
Code, the fire insurance company | 26 | | tax imposed by Section 12 of the Fire
Investigation |
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| 1 | | Act, and the fire department taxes imposed under | 2 | | Section 11-10-1
of the Illinois Municipal Code, | 3 | | equals 1.25% for taxable years ending prior to December 31, | 4 | | 2003, or
1.75% for taxable years ending on or after | 5 | | December 31, 2003, of the net
taxable premiums written for | 6 | | the taxable year,
as described by subsection (1) of Section | 7 | | 409 of the Illinois Insurance Code.
This paragraph will in | 8 | | no event increase the rates imposed under subsections
(b) | 9 | | and (d). | 10 | | (2) Any reduction in the rates of tax imposed by this | 11 | | subsection shall be
applied first against the rates imposed | 12 | | by subsection (b) and only after the
tax imposed by | 13 | | subsection (a) net of all credits allowed under this | 14 | | Section
other than the credit allowed under subsection (i) | 15 | | has been reduced to zero,
against the rates imposed by | 16 | | subsection (d). | 17 | | This subsection (d-1) is exempt from the provisions of | 18 | | Section 250. | 19 | | (e) Investment credit. A taxpayer shall be allowed a credit
| 20 | | against the Personal Property Tax Replacement Income Tax for
| 21 | | investment in qualified property. | 22 | | (1) A taxpayer shall be allowed a credit equal to .5% | 23 | | of
the basis of qualified property placed in service during | 24 | | the taxable year,
provided such property is placed in | 25 | | service on or after
July 1, 1984. There shall be allowed an | 26 | | additional credit equal
to .5% of the basis of qualified |
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| 1 | | property placed in service during the
taxable year, | 2 | | provided such property is placed in service on or
after | 3 | | July 1, 1986, and the taxpayer's base employment
within | 4 | | Illinois has increased by 1% or more over the preceding | 5 | | year as
determined by the taxpayer's employment records | 6 | | filed with the
Illinois Department of Employment Security. | 7 | | Taxpayers who are new to
Illinois shall be deemed to have | 8 | | met the 1% growth in base employment for
the first year in | 9 | | which they file employment records with the Illinois
| 10 | | Department of Employment Security. The provisions added to | 11 | | this Section by
Public Act 85-1200 (and restored by Public | 12 | | Act 87-895) shall be
construed as declaratory of existing | 13 | | law and not as a new enactment. If,
in any year, the | 14 | | increase in base employment within Illinois over the
| 15 | | preceding year is less than 1%, the additional credit shall | 16 | | be limited to that
percentage times a fraction, the | 17 | | numerator of which is .5% and the denominator
of which is | 18 | | 1%, but shall not exceed .5%. The investment credit shall | 19 | | not be
allowed to the extent that it would reduce a | 20 | | taxpayer's liability in any tax
year below zero, nor may | 21 | | any credit for qualified property be allowed for any
year | 22 | | other than the year in which the property was placed in | 23 | | service in
Illinois. For tax years ending on or after | 24 | | December 31, 1987, and on or
before December 31, 1988, the | 25 | | credit shall be allowed for the tax year in
which the | 26 | | property is placed in service, or, if the amount of the |
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| 1 | | credit
exceeds the tax liability for that year, whether it | 2 | | exceeds the original
liability or the liability as later | 3 | | amended, such excess may be carried
forward and applied to | 4 | | the tax liability of the 5 taxable years following
the | 5 | | excess credit years if the taxpayer (i) makes investments | 6 | | which cause
the creation of a minimum of 2,000 full-time | 7 | | equivalent jobs in Illinois,
(ii) is located in an | 8 | | enterprise zone established pursuant to the Illinois
| 9 | | Enterprise Zone Act and (iii) is certified by the | 10 | | Department of Commerce
and Community Affairs (now | 11 | | Department of Commerce and Economic Opportunity) as | 12 | | complying with the requirements specified in
clause (i) and | 13 | | (ii) by July 1, 1986. The Department of Commerce and
| 14 | | Community Affairs (now Department of Commerce and Economic | 15 | | Opportunity) shall notify the Department of Revenue of all | 16 | | such
certifications immediately. For tax years ending | 17 | | after December 31, 1988,
the credit shall be allowed for | 18 | | the tax year in which the property is
placed in service, | 19 | | or, if the amount of the credit exceeds the tax
liability | 20 | | for that year, whether it exceeds the original liability or | 21 | | the
liability as later amended, such excess may be carried | 22 | | forward and applied
to the tax liability of the 5 taxable | 23 | | years following the excess credit
years. The credit shall | 24 | | be applied to the earliest year for which there is
a | 25 | | liability. If there is credit from more than one tax year | 26 | | that is
available to offset a liability, earlier credit |
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| 1 | | shall be applied first. | 2 | | (2) The term "qualified property" means property | 3 | | which: | 4 | | (A) is tangible, whether new or used, including | 5 | | buildings and structural
components of buildings and | 6 | | signs that are real property, but not including
land or | 7 | | improvements to real property that are not a structural | 8 | | component of a
building such as landscaping, sewer | 9 | | lines, local access roads, fencing, parking
lots, and | 10 | | other appurtenances; | 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 | | (e); | 16 | | (C) is acquired by purchase as defined in Section | 17 | | 179(d) of
the Internal Revenue Code; | 18 | | (D) is used in Illinois by a taxpayer who is | 19 | | primarily engaged in
manufacturing, or in mining coal | 20 | | or fluorite, or in retailing, or was placed in service | 21 | | on or after July 1, 2006 in a River Edge Redevelopment | 22 | | Zone established pursuant to the River Edge | 23 | | Redevelopment Zone Act; and | 24 | | (E) has not previously been used in Illinois in | 25 | | such a manner and by
such a person as would qualify for | 26 | | the credit provided by this subsection
(e) or |
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| 1 | | subsection (f). | 2 | | (3) For purposes of this subsection (e), | 3 | | "manufacturing" means
the material staging and production | 4 | | of tangible personal property by
procedures commonly | 5 | | regarded as manufacturing, processing, fabrication, or
| 6 | | assembling which changes some existing material into new | 7 | | shapes, new
qualities, or new combinations. For purposes of | 8 | | this subsection
(e) the term "mining" shall have the same | 9 | | meaning as the term "mining" in
Section 613(c) of the | 10 | | Internal Revenue Code. For purposes of this subsection
(e), | 11 | | the term "retailing" means the sale of tangible personal | 12 | | property for use or consumption and not for resale, or
| 13 | | services rendered in conjunction with the sale of tangible | 14 | | personal property for use or consumption and not for | 15 | | resale. For purposes of this subsection (e), "tangible | 16 | | personal property" has the same meaning as when that term | 17 | | is used in the Retailers' Occupation Tax Act, and, for | 18 | | taxable years ending after December 31, 2008, does not | 19 | | include the generation, transmission, or distribution of | 20 | | electricity. | 21 | | (4) The basis of qualified property shall be the basis
| 22 | | used to compute the depreciation deduction for federal | 23 | | income tax purposes. | 24 | | (5) If the basis of the property for federal income tax | 25 | | depreciation
purposes is increased after it has been placed | 26 | | in service in Illinois by
the taxpayer, the amount of such |
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| 1 | | increase shall be deemed property placed
in service on the | 2 | | date of such increase in basis. | 3 | | (6) The term "placed in service" shall have the same
| 4 | | meaning as under Section 46 of the Internal Revenue Code. | 5 | | (7) If during any taxable year, any property ceases to
| 6 | | be qualified property in the hands of the taxpayer within | 7 | | 48 months after
being placed in service, or the situs of | 8 | | any qualified property is
moved outside Illinois within 48 | 9 | | months after being placed in service, the
Personal Property | 10 | | Tax Replacement Income Tax for such taxable year shall be
| 11 | | increased. Such increase shall be determined by (i) | 12 | | recomputing the
investment credit which would have been | 13 | | allowed for the year in which
credit for such property was | 14 | | originally allowed by eliminating such
property from such | 15 | | computation and, (ii) subtracting such recomputed credit
| 16 | | from the amount of credit previously allowed. For the | 17 | | purposes of this
paragraph (7), a reduction of the basis of | 18 | | qualified property resulting
from a redetermination of the | 19 | | purchase price shall be deemed a disposition
of qualified | 20 | | property to the extent of such reduction. | 21 | | (8) Unless the investment credit is extended by law, | 22 | | the
basis of qualified property shall not include costs | 23 | | incurred after
December 31, 2018, except for costs incurred | 24 | | pursuant to a binding
contract entered into on or before | 25 | | December 31, 2018. | 26 | | (9) Each taxable year ending before December 31, 2000, |
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| 1 | | a partnership may
elect to pass through to its
partners the | 2 | | credits to which the partnership is entitled under this | 3 | | subsection
(e) for the taxable year. A partner may use the | 4 | | credit allocated to him or her
under this paragraph only | 5 | | against the tax imposed in subsections (c) and (d) of
this | 6 | | Section. If the partnership makes that election, those | 7 | | credits shall be
allocated among the partners in the | 8 | | partnership in accordance with the rules
set forth in | 9 | | Section 704(b) of the Internal Revenue Code, and the rules
| 10 | | promulgated under that Section, and the allocated amount of | 11 | | the credits shall
be allowed to the partners for that | 12 | | taxable year. The partnership shall make
this election on | 13 | | its Personal Property Tax Replacement Income Tax return for
| 14 | | that taxable year. The election to pass through the credits | 15 | | shall be
irrevocable. | 16 | | For taxable years ending on or after December 31, 2000, | 17 | | a
partner that qualifies its
partnership for a subtraction | 18 | | under subparagraph (I) of paragraph (2) of
subsection (d) | 19 | | of Section 203 or a shareholder that qualifies a Subchapter | 20 | | S
corporation for a subtraction under subparagraph (S) of | 21 | | paragraph (2) of
subsection (b) of Section 203 shall be | 22 | | allowed a credit under this subsection
(e) equal to its | 23 | | share of the credit earned under this subsection (e) during
| 24 | | the taxable year by the partnership or Subchapter S | 25 | | corporation, determined in
accordance with the | 26 | | determination of income and distributive share of
income |
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| 1 | | under Sections 702 and 704 and Subchapter S of the Internal | 2 | | Revenue
Code. This paragraph is exempt from the provisions | 3 | | of Section 250. | 4 | | (f) Investment credit; Enterprise Zone; River Edge | 5 | | Redevelopment Zone. | 6 | | (1) A taxpayer shall be allowed a credit against the | 7 | | tax imposed
by subsections (a) and (b) of this Section for | 8 | | investment in qualified
property which is placed in service | 9 | | in an Enterprise Zone created
pursuant to the Illinois | 10 | | Enterprise Zone Act or, for property placed in service on | 11 | | or after July 1, 2006, a River Edge Redevelopment Zone | 12 | | established pursuant to the River Edge Redevelopment Zone | 13 | | Act. For partners, shareholders
of Subchapter S | 14 | | corporations, and owners of limited liability companies,
| 15 | | if the liability company is treated as a partnership for | 16 | | purposes of
federal and State income taxation, there shall | 17 | | be allowed a credit under
this subsection (f) to be | 18 | | determined in accordance with the determination
of income | 19 | | and distributive share of income under Sections 702 and 704 | 20 | | and
Subchapter S of the Internal Revenue Code. The credit | 21 | | shall be .5% of the
basis for such property. The credit | 22 | | shall be available only in the taxable
year in which the | 23 | | property is placed in service in the Enterprise Zone or | 24 | | River Edge Redevelopment Zone and
shall not be allowed to | 25 | | the extent that it would reduce a taxpayer's
liability for | 26 | | the tax imposed by subsections (a) and (b) of this Section |
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| 1 | | to
below zero. For tax years ending on or after December | 2 | | 31, 1985, the credit
shall be allowed for the tax year in | 3 | | which the property is placed in
service, or, if the amount | 4 | | of the credit exceeds the tax liability for that
year, | 5 | | whether it exceeds the original liability or the liability | 6 | | as later
amended, such excess may be carried forward and | 7 | | applied to the tax
liability of the 5 taxable years | 8 | | following the excess credit year.
The credit shall be | 9 | | applied to the earliest year for which there is a
| 10 | | liability. If there is credit from more than one tax year | 11 | | that is available
to offset a liability, the credit | 12 | | accruing first in time shall be applied
first. | 13 | | (2) The term qualified property means property which: | 14 | | (A) is tangible, whether new or used, including | 15 | | buildings and
structural components of buildings; | 16 | | (B) is depreciable pursuant to Section 167 of the | 17 | | Internal Revenue
Code, except that "3-year property" | 18 | | as defined in Section 168(c)(2)(A) of
that Code is not | 19 | | eligible for the credit provided by this subsection | 20 | | (f); | 21 | | (C) is acquired by purchase as defined in Section | 22 | | 179(d) of
the Internal Revenue Code; | 23 | | (D) is used in the Enterprise Zone or River Edge | 24 | | Redevelopment Zone by the taxpayer; and | 25 | | (E) has not been previously used in Illinois in | 26 | | such a manner and by
such a person as would qualify for |
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| 1 | | the credit provided by this subsection
(f) or | 2 | | subsection (e). | 3 | | (3) The basis of qualified property shall be the basis | 4 | | used to compute
the depreciation deduction for federal | 5 | | income tax purposes. | 6 | | (4) If the basis of the property for federal income tax | 7 | | depreciation
purposes is increased after it has been placed | 8 | | in service in the Enterprise
Zone or River Edge | 9 | | Redevelopment Zone by the taxpayer, the amount of such | 10 | | increase shall be deemed property
placed in service on the | 11 | | date of such increase in basis. | 12 | | (5) The term "placed in service" shall have the same | 13 | | meaning as under
Section 46 of the Internal Revenue Code. | 14 | | (6) If during any taxable year, any property ceases to | 15 | | be qualified
property in the hands of the taxpayer within | 16 | | 48 months after being placed
in service, or the situs of | 17 | | any qualified property is moved outside the
Enterprise Zone | 18 | | or River Edge Redevelopment Zone within 48 months after | 19 | | being placed in service, the tax
imposed under subsections | 20 | | (a) and (b) of this Section for such taxable year
shall be | 21 | | increased. Such increase shall be determined by (i) | 22 | | recomputing
the investment credit which would have been | 23 | | allowed for the year in which
credit for such property was | 24 | | originally allowed by eliminating such
property from such | 25 | | computation, and (ii) subtracting such recomputed credit
| 26 | | from the amount of credit previously allowed. For the |
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| 1 | | purposes of this
paragraph (6), a reduction of the basis of | 2 | | qualified property resulting
from a redetermination of the | 3 | | purchase price shall be deemed a disposition
of qualified | 4 | | property to the extent of such reduction. | 5 | | (7) There shall be allowed an additional credit equal | 6 | | to 0.5% of the basis of qualified property placed in | 7 | | service during the taxable year in a River Edge | 8 | | Redevelopment Zone, provided such property is placed in | 9 | | service on or after July 1, 2006, and the taxpayer's base | 10 | | employment within Illinois has increased by 1% or more over | 11 | | the preceding year as determined by the taxpayer's | 12 | | employment records filed with the Illinois Department of | 13 | | Employment Security. Taxpayers who are new to Illinois | 14 | | shall be deemed to have met the 1% growth in base | 15 | | employment for the first year in which they file employment | 16 | | records with the Illinois Department of Employment | 17 | | Security. If, in any year, the increase in base employment | 18 | | within Illinois over the preceding year is less than 1%, | 19 | | the additional credit shall be limited to that percentage | 20 | | times a fraction, the numerator of which is 0.5% and the | 21 | | denominator of which is 1%, but shall not exceed 0.5%.
| 22 | | (g) Jobs Tax Credit; Enterprise Zone, River Edge | 23 | | Redevelopment Zone, and Foreign Trade Zone or Sub-Zone. | 24 | | (1) A taxpayer conducting a trade or business in an | 25 | | enterprise zone
or a High Impact Business designated by the | 26 | | Department of Commerce and
Economic Opportunity or for |
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| 1 | | taxable years ending on or after December 31, 2006, in a | 2 | | River Edge Redevelopment Zone conducting a trade or | 3 | | business in a federally designated
Foreign Trade Zone or | 4 | | Sub-Zone shall be allowed a credit against the tax
imposed | 5 | | by subsections (a) and (b) of this Section in the amount of | 6 | | $500
per eligible employee hired to work in the zone during | 7 | | the taxable year. | 8 | | (2) To qualify for the credit: | 9 | | (A) the taxpayer must hire 5 or more eligible | 10 | | employees to work in an
enterprise zone, River Edge | 11 | | Redevelopment Zone, or federally designated Foreign | 12 | | Trade Zone or Sub-Zone
during the taxable year; | 13 | | (B) the taxpayer's total employment within the | 14 | | enterprise zone, River Edge Redevelopment Zone, or
| 15 | | federally designated Foreign Trade Zone or Sub-Zone | 16 | | must
increase by 5 or more full-time employees beyond | 17 | | the total employed in that
zone at the end of the | 18 | | previous tax year for which a jobs tax
credit under | 19 | | this Section was taken, or beyond the total employed by | 20 | | the
taxpayer as of December 31, 1985, whichever is | 21 | | later; and | 22 | | (C) the eligible employees must be employed 180 | 23 | | consecutive days in
order to be deemed hired for | 24 | | purposes of this subsection. | 25 | | (3) An "eligible employee" means an employee who is: | 26 | | (A) Certified by the Department of Commerce and |
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| 1 | | Economic Opportunity
as "eligible for services" | 2 | | pursuant to regulations promulgated in
accordance with | 3 | | Title II of the Job Training Partnership Act, Training
| 4 | | Services for the Disadvantaged or Title III of the Job | 5 | | Training Partnership
Act, Employment and Training | 6 | | Assistance for Dislocated Workers Program. | 7 | | (B) Hired after the enterprise zone, River Edge | 8 | | Redevelopment Zone, or federally designated Foreign
| 9 | | Trade Zone or Sub-Zone was designated or the trade or
| 10 | | business was located in that zone, whichever is later. | 11 | | (C) Employed in the enterprise zone, River Edge | 12 | | Redevelopment Zone, or Foreign Trade Zone or
Sub-Zone. | 13 | | An employee is employed in an
enterprise zone or | 14 | | federally designated Foreign Trade Zone or Sub-Zone
if | 15 | | his services are rendered there or it is the base of
| 16 | | operations for the services performed. | 17 | | (D) A full-time employee working 30 or more hours | 18 | | per week. | 19 | | (4) For tax years ending on or after December 31, 1985 | 20 | | and prior to
December 31, 1988, the credit shall be allowed | 21 | | for the tax year in which
the eligible employees are hired. | 22 | | For tax years ending on or after
December 31, 1988, the | 23 | | credit shall be allowed for the tax year immediately
| 24 | | following the tax year in which the eligible employees are | 25 | | hired. If the
amount of the credit exceeds the tax | 26 | | liability for that year, whether it
exceeds the original |
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| 1 | | liability or the liability as later amended, such
excess | 2 | | may be carried forward and applied to the tax liability of | 3 | | the 5
taxable years following the excess credit year. The | 4 | | credit shall be
applied to the earliest year for which | 5 | | there is a liability. If there is
credit from more than one | 6 | | tax year that is available to offset a liability,
earlier | 7 | | credit shall be applied first. | 8 | | (5) The Department of Revenue shall promulgate such | 9 | | rules and regulations
as may be deemed necessary to carry | 10 | | out the purposes of this subsection (g). | 11 | | (6) The credit shall be available for eligible | 12 | | employees hired on or
after January 1, 1986. | 13 | | (h) Investment credit; High Impact Business. | 14 | | (1) Subject to subsections (b) and (b-5) of Section
5.5 | 15 | | of the Illinois Enterprise Zone Act, a taxpayer shall be | 16 | | allowed a credit
against the tax imposed by subsections (a) | 17 | | and (b) of this Section for
investment in qualified
| 18 | | property which is placed in service by a Department of | 19 | | Commerce and Economic Opportunity
designated High Impact | 20 | | Business. The credit shall be .5% of the basis
for such | 21 | | property. The credit shall not be available (i) until the | 22 | | minimum
investments in qualified property set forth in | 23 | | subdivision (a)(3)(A) of
Section 5.5 of the Illinois
| 24 | | Enterprise Zone Act have been satisfied
or (ii) until the | 25 | | time authorized in subsection (b-5) of the Illinois
| 26 | | Enterprise Zone Act for entities designated as High Impact |
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| 1 | | Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and | 2 | | (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone | 3 | | Act, and shall not be allowed to the extent that it would
| 4 | | reduce a taxpayer's liability for the tax imposed by | 5 | | subsections (a) and (b) of
this Section to below zero. The | 6 | | credit applicable to such investments shall be
taken in the | 7 | | taxable year in which such investments have been completed. | 8 | | The
credit for additional investments beyond the minimum | 9 | | investment by a designated
high impact business authorized | 10 | | under subdivision (a)(3)(A) of Section 5.5 of
the Illinois | 11 | | Enterprise Zone Act shall be available only in the taxable | 12 | | year in
which the property is placed in service and shall | 13 | | not be allowed to the extent
that it would reduce a | 14 | | taxpayer's liability for the tax imposed by subsections
(a) | 15 | | and (b) of this Section to below zero.
For tax years ending | 16 | | on or after December 31, 1987, the credit shall be
allowed | 17 | | for the tax year in which the property is placed in | 18 | | service, or, if
the amount of the credit exceeds the tax | 19 | | liability for that year, whether
it exceeds the original | 20 | | liability or the liability as later amended, such
excess | 21 | | may be carried forward and applied to the tax liability of | 22 | | the 5
taxable years following the excess credit year. The | 23 | | credit shall be
applied to the earliest year for which | 24 | | there is a liability. If there is
credit from more than one | 25 | | tax year that is available to offset a liability,
the | 26 | | credit accruing first in time shall be applied first. |
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| 1 | | Changes made in this subdivision (h)(1) by Public Act | 2 | | 88-670
restore changes made by Public Act 85-1182 and | 3 | | reflect existing law. | 4 | | (2) The term qualified property means property which: | 5 | | (A) is tangible, whether new or used, including | 6 | | buildings and
structural components of buildings; | 7 | | (B) is depreciable pursuant to Section 167 of the | 8 | | Internal Revenue
Code, except that "3-year property" | 9 | | as defined in Section 168(c)(2)(A) of
that Code is not | 10 | | eligible for the credit provided by this subsection | 11 | | (h); | 12 | | (C) is acquired by purchase as defined in Section | 13 | | 179(d) of the
Internal Revenue Code; and | 14 | | (D) is not eligible for the Enterprise Zone | 15 | | Investment Credit provided
by subsection (f) of this | 16 | | Section. | 17 | | (3) The basis of qualified property shall be the basis | 18 | | used to compute
the depreciation deduction for federal | 19 | | income tax purposes. | 20 | | (4) If the basis of the property for federal income tax | 21 | | depreciation
purposes is increased after it has been placed | 22 | | in service in a federally
designated Foreign Trade Zone or | 23 | | Sub-Zone located in Illinois by the taxpayer,
the amount of | 24 | | such increase shall be deemed property placed in service on
| 25 | | the date of such increase in basis. | 26 | | (5) The term "placed in service" shall have the same |
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| 1 | | meaning as under
Section 46 of the Internal Revenue Code. | 2 | | (6) If during any taxable year ending on or before | 3 | | December 31, 1996,
any property ceases to be qualified
| 4 | | property in the hands of the taxpayer within 48 months | 5 | | after being placed
in service, or the situs of any | 6 | | qualified property is moved outside
Illinois within 48 | 7 | | months after being placed in service, the tax imposed
under | 8 | | subsections (a) and (b) of this Section for such taxable | 9 | | year shall
be increased. Such increase shall be determined | 10 | | by (i) recomputing the
investment credit which would have | 11 | | been allowed for the year in which
credit for such property | 12 | | was originally allowed by eliminating such
property from | 13 | | such computation, and (ii) subtracting such recomputed | 14 | | credit
from the amount of credit previously allowed. For | 15 | | the purposes of this
paragraph (6), a reduction of the | 16 | | basis of qualified property resulting
from a | 17 | | redetermination of the purchase price shall be deemed a | 18 | | disposition
of qualified property to the extent of such | 19 | | reduction. | 20 | | (7) Beginning with tax years ending after December 31, | 21 | | 1996, if a
taxpayer qualifies for the credit under this | 22 | | subsection (h) and thereby is
granted a tax abatement and | 23 | | the taxpayer relocates its entire facility in
violation of | 24 | | the explicit terms and length of the contract under Section
| 25 | | 18-183 of the Property Tax Code, the tax imposed under | 26 | | subsections
(a) and (b) of this Section shall be increased |
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| 1 | | for the taxable year
in which the taxpayer relocated its | 2 | | facility by an amount equal to the
amount of credit | 3 | | received by the taxpayer under this subsection (h). | 4 | | (i) Credit for Personal Property Tax Replacement Income | 5 | | Tax.
For tax years ending prior to December 31, 2003, a credit | 6 | | shall be allowed
against the tax imposed by
subsections (a) and | 7 | | (b) of this Section for the tax imposed by subsections (c)
and | 8 | | (d) of this Section. This credit shall be computed by | 9 | | multiplying the tax
imposed by subsections (c) and (d) of this | 10 | | Section by a fraction, the numerator
of which is base income | 11 | | allocable to Illinois and the denominator of which is
Illinois | 12 | | base income, and further multiplying the product by the tax | 13 | | rate
imposed by subsections (a) and (b) of this Section. | 14 | | Any credit earned on or after December 31, 1986 under
this | 15 | | subsection which is unused in the year
the credit is computed | 16 | | because it exceeds the tax liability imposed by
subsections (a) | 17 | | and (b) for that year (whether it exceeds the original
| 18 | | liability or the liability as later amended) may be carried | 19 | | forward and
applied to the tax liability imposed by subsections | 20 | | (a) and (b) of the 5
taxable years following the excess credit | 21 | | year, provided that no credit may
be carried forward to any | 22 | | year ending on or
after December 31, 2003. This credit shall be
| 23 | | applied first to the earliest year for which there is a | 24 | | liability. If
there is a credit under this subsection from more | 25 | | than one tax year that is
available to offset a liability the | 26 | | earliest credit arising under this
subsection shall be applied |
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| 1 | | first. | 2 | | If, during any taxable year ending on or after December 31, | 3 | | 1986, the
tax imposed by subsections (c) and (d) of this | 4 | | Section for which a taxpayer
has claimed a credit under this | 5 | | subsection (i) is reduced, the amount of
credit for such tax | 6 | | shall also be reduced. Such reduction shall be
determined by | 7 | | recomputing the credit to take into account the reduced tax
| 8 | | imposed by subsections (c) and (d). If any portion of the
| 9 | | reduced amount of credit has been carried to a different | 10 | | taxable year, an
amended return shall be filed for such taxable | 11 | | year to reduce the amount of
credit claimed. | 12 | | (j) Training expense credit. Beginning with tax years | 13 | | ending on or
after December 31, 1986 and prior to December 31, | 14 | | 2003, a taxpayer shall be
allowed a credit against the
tax | 15 | | imposed by subsections (a) and (b) under this Section
for all | 16 | | amounts paid or accrued, on behalf of all persons
employed by | 17 | | the taxpayer in Illinois or Illinois residents employed
outside | 18 | | of Illinois by a taxpayer, for educational or vocational | 19 | | training in
semi-technical or technical fields or semi-skilled | 20 | | or skilled fields, which
were deducted from gross income in the | 21 | | computation of taxable income. The
credit against the tax | 22 | | imposed by subsections (a) and (b) shall be 1.6% of
such | 23 | | training expenses. For partners, shareholders of subchapter S
| 24 | | corporations, and owners of limited liability companies, if the | 25 | | liability
company is treated as a partnership for purposes of | 26 | | federal and State income
taxation, there shall be allowed a |
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| 1 | | credit under this subsection (j) to be
determined in accordance | 2 | | with the determination of income and distributive
share of | 3 | | income under Sections 702 and 704 and subchapter S of the | 4 | | Internal
Revenue Code. | 5 | | Any credit allowed under this subsection which is unused in | 6 | | the year
the credit is earned may be carried forward to each of | 7 | | the 5 taxable
years following the year for which the credit is | 8 | | first computed until it is
used. This credit shall be applied | 9 | | first to the earliest year for which
there is a liability. If | 10 | | there is a credit under this subsection from more
than one tax | 11 | | year that is available to offset a liability the earliest
| 12 | | credit arising under this subsection shall be applied first. No | 13 | | carryforward
credit may be claimed in any tax year ending on or | 14 | | after
December 31, 2003. | 15 | | (k) Research and development credit. | 16 | | For tax years ending after July 1, 1990 and prior to
| 17 | | December 31, 2003, and beginning again for tax years ending on | 18 | | or after December 31, 2004, and ending prior to January 1, | 19 | | 2016, a taxpayer shall be
allowed a credit against the tax | 20 | | imposed by subsections (a) and (b) of this
Section for | 21 | | increasing research activities in this State. The credit
| 22 | | allowed against the tax imposed by subsections (a) and (b) | 23 | | shall be equal
to 6 1/2% of the qualifying expenditures for | 24 | | increasing research activities
in this State. For partners, | 25 | | shareholders of subchapter S corporations, and
owners of | 26 | | limited liability companies, if the liability company is |
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| 1 | | treated as a
partnership for purposes of federal and State | 2 | | income taxation, there shall be
allowed a credit under this | 3 | | subsection to be determined in accordance with the
| 4 | | determination of income and distributive share of income under | 5 | | Sections 702 and
704 and subchapter S of the Internal Revenue | 6 | | Code. | 7 | | For purposes of this subsection, "qualifying expenditures" | 8 | | means the
qualifying expenditures as defined for the federal | 9 | | credit for increasing
research activities which would be | 10 | | allowable under Section 41 of the
Internal Revenue Code and | 11 | | which are conducted in this State, "qualifying
expenditures for | 12 | | increasing research activities in this State" means the
excess | 13 | | of qualifying expenditures for the taxable year in which | 14 | | incurred
over qualifying expenditures for the base period, | 15 | | "qualifying expenditures
for the base period" means the average | 16 | | of the qualifying expenditures for
each year in the base | 17 | | period, and "base period" means the 3 taxable years
immediately | 18 | | preceding the taxable year for which the determination is
being | 19 | | made. | 20 | | Any credit in excess of the tax liability for the taxable | 21 | | year
may be carried forward. A taxpayer may elect to have the
| 22 | | unused credit shown on its final completed return carried over | 23 | | as a credit
against the tax liability for the following 5 | 24 | | taxable years or until it has
been fully used, whichever occurs | 25 | | first; provided that no credit earned in a tax year ending | 26 | | prior to December 31, 2003 may be carried forward to any year |
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| 1 | | ending on or after December 31, 2003. | 2 | | If an unused credit is carried forward to a given year from | 3 | | 2 or more
earlier years, that credit arising in the earliest | 4 | | year will be applied
first against the tax liability for the | 5 | | given year. If a tax liability for
the given year still | 6 | | remains, the credit from the next earliest year will
then be | 7 | | applied, and so on, until all credits have been used or no tax
| 8 | | liability for the given year remains. Any remaining unused | 9 | | credit or
credits then will be carried forward to the next | 10 | | following year in which a
tax liability is incurred, except | 11 | | that no credit can be carried forward to
a year which is more | 12 | | than 5 years after the year in which the expense for
which the | 13 | | credit is given was incurred. | 14 | | No inference shall be drawn from this amendatory Act of the | 15 | | 91st General
Assembly in construing this Section for taxable | 16 | | years beginning before January
1, 1999. | 17 | | (l) Environmental Remediation Tax Credit. | 18 | | (i) For tax years ending after December 31, 1997 and on | 19 | | or before
December 31, 2001, a taxpayer shall be allowed a | 20 | | credit against the tax
imposed by subsections (a) and (b) | 21 | | of this Section for certain amounts paid
for unreimbursed | 22 | | eligible remediation costs, as specified in this | 23 | | subsection.
For purposes of this Section, "unreimbursed | 24 | | eligible remediation costs" means
costs approved by the | 25 | | Illinois Environmental Protection Agency ("Agency") under
| 26 | | Section 58.14 of the Environmental Protection Act that were |
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| 1 | | paid in performing
environmental remediation at a site for | 2 | | which a No Further Remediation Letter
was issued by the | 3 | | Agency and recorded under Section 58.10 of the | 4 | | Environmental
Protection Act. The credit must be claimed | 5 | | for the taxable year in which
Agency approval of the | 6 | | eligible remediation costs is granted. The credit is
not | 7 | | available to any taxpayer if the taxpayer or any related | 8 | | party caused or
contributed to, in any material respect, a | 9 | | release of regulated substances on,
in, or under the site | 10 | | that was identified and addressed by the remedial
action | 11 | | pursuant to the Site Remediation Program of the | 12 | | Environmental Protection
Act. After the Pollution Control | 13 | | Board rules are adopted pursuant to the
Illinois | 14 | | Administrative Procedure Act for the administration and | 15 | | enforcement of
Section 58.9 of the Environmental | 16 | | Protection Act, determinations as to credit
availability | 17 | | for purposes of this Section shall be made consistent with | 18 | | those
rules. For purposes of this Section, "taxpayer" | 19 | | includes a person whose tax
attributes the taxpayer has | 20 | | succeeded to under Section 381 of the Internal
Revenue Code | 21 | | and "related party" includes the persons disallowed a | 22 | | deduction
for losses by paragraphs (b), (c), and (f)(1) of | 23 | | Section 267 of the Internal
Revenue Code by virtue of being | 24 | | a related taxpayer, as well as any of its
partners. The | 25 | | credit allowed against the tax imposed by subsections (a) | 26 | | and
(b) shall be equal to 25% of the unreimbursed eligible |
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| 1 | | remediation costs in
excess of $100,000 per site, except | 2 | | that the $100,000 threshold shall not apply
to any site | 3 | | contained in an enterprise zone as determined by the | 4 | | Department of
Commerce and Community Affairs (now | 5 | | Department of Commerce and Economic Opportunity). The | 6 | | total credit allowed shall not exceed
$40,000 per year with | 7 | | a maximum total of $150,000 per site. For partners and
| 8 | | shareholders of subchapter S corporations, there shall be | 9 | | allowed a credit
under this subsection to be determined in | 10 | | accordance with the determination of
income and | 11 | | distributive share of income under Sections 702 and 704 and
| 12 | | subchapter S of the Internal Revenue Code. | 13 | | (ii) A credit allowed under this subsection that is | 14 | | unused in the year
the credit is earned may be carried | 15 | | forward to each of the 5 taxable years
following the year | 16 | | for which the credit is first earned until it is used.
The | 17 | | term "unused credit" does not include any amounts of | 18 | | unreimbursed eligible
remediation costs in excess of the | 19 | | maximum credit per site authorized under
paragraph (i). | 20 | | This credit shall be applied first to the earliest year
for | 21 | | which there is a liability. If there is a credit under this | 22 | | subsection
from more than one tax year that is available to | 23 | | offset a liability, the
earliest credit arising under this | 24 | | subsection shall be applied first. A
credit allowed under | 25 | | this subsection may be sold to a buyer as part of a sale
of | 26 | | all or part of the remediation site for which the credit |
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| 1 | | was granted. The
purchaser of a remediation site and the | 2 | | tax credit shall succeed to the unused
credit and remaining | 3 | | carry-forward period of the seller. To perfect the
| 4 | | transfer, the assignor shall record the transfer in the | 5 | | chain of title for the
site and provide written notice to | 6 | | the Director of the Illinois Department of
Revenue of the | 7 | | assignor's intent to sell the remediation site and the | 8 | | amount of
the tax credit to be transferred as a portion of | 9 | | the sale. In no event may a
credit be transferred to any | 10 | | taxpayer if the taxpayer or a related party would
not be | 11 | | eligible under the provisions of subsection (i). | 12 | | (iii) For purposes of this Section, the term "site" | 13 | | shall have the same
meaning as under Section 58.2 of the | 14 | | Environmental Protection Act. | 15 | | (m) Education expense credit. Beginning with tax years | 16 | | ending after
December 31, 1999, a taxpayer who
is the custodian | 17 | | of one or more qualifying pupils shall be allowed a credit
| 18 | | against the tax imposed by subsections (a) and (b) of this | 19 | | Section for
qualified education expenses incurred on behalf of | 20 | | the qualifying pupils.
The credit shall be equal to 25% of | 21 | | qualified education expenses, but in no
event may the total | 22 | | credit under this subsection claimed by a
family that is the
| 23 | | custodian of qualifying pupils exceed $500. In no event shall a | 24 | | credit under
this subsection reduce the taxpayer's liability | 25 | | under this Act to less than
zero. This subsection is exempt | 26 | | from the provisions of Section 250 of this
Act. |
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| 1 | | For purposes of this subsection: | 2 | | "Qualifying pupils" means individuals who (i) are | 3 | | residents of the State of
Illinois, (ii) are under the age of | 4 | | 21 at the close of the school year for
which a credit is | 5 | | sought, and (iii) during the school year for which a credit
is | 6 | | sought were full-time pupils enrolled in a kindergarten through | 7 | | twelfth
grade education program at any school, as defined in | 8 | | this subsection. | 9 | | "Qualified education expense" means the amount incurred
on | 10 | | behalf of a qualifying pupil in excess of $250 for tuition, | 11 | | book fees, and
lab fees at the school in which the pupil is | 12 | | enrolled during the regular school
year. | 13 | | "School" means any public or nonpublic elementary or | 14 | | secondary school in
Illinois that is in compliance with Title | 15 | | VI of the Civil Rights Act of 1964
and attendance at which | 16 | | satisfies the requirements of Section 26-1 of the
School Code, | 17 | | except that nothing shall be construed to require a child to
| 18 | | attend any particular public or nonpublic school to qualify for | 19 | | the credit
under this Section. | 20 | | "Custodian" means, with respect to qualifying pupils, an | 21 | | Illinois resident
who is a parent, the parents, a legal | 22 | | guardian, or the legal guardians of the
qualifying pupils. | 23 | | (n) River Edge Redevelopment Zone site remediation tax | 24 | | credit.
| 25 | | (i) For tax years ending on or after December 31, 2006, | 26 | | a taxpayer shall be allowed a credit against the tax |
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| 1 | | imposed by subsections (a) and (b) of this Section for | 2 | | certain amounts paid for unreimbursed eligible remediation | 3 | | costs, as specified in this subsection. For purposes of | 4 | | this Section, "unreimbursed eligible remediation costs" | 5 | | means costs approved by the Illinois Environmental | 6 | | Protection Agency ("Agency") under Section 58.14a of the | 7 | | Environmental Protection Act that were paid in performing | 8 | | environmental remediation at a site within a River Edge | 9 | | Redevelopment Zone 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 of | 13 | | the eligible remediation costs is granted. The credit is | 14 | | 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 under | 17 | | the site that was identified and addressed by the remedial | 18 | | action pursuant to the Site Remediation Program of the | 19 | | Environmental Protection Act. Determinations as to credit | 20 | | availability for purposes of this Section shall be made | 21 | | consistent with rules adopted by the Pollution Control | 22 | | Board pursuant to the Illinois Administrative Procedure | 23 | | Act for the administration and enforcement of Section 58.9 | 24 | | of the Environmental Protection Act. For purposes of this | 25 | | Section, "taxpayer" includes a person whose tax attributes | 26 | | the taxpayer has succeeded to under Section 381 of the |
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| 1 | | Internal Revenue Code and "related party" includes the | 2 | | persons disallowed a deduction for losses by paragraphs | 3 | | (b), (c), and (f)(1) of Section 267 of the Internal Revenue | 4 | | Code by virtue of being a related taxpayer, as well as any | 5 | | of its partners. The credit allowed against the tax imposed | 6 | | by subsections (a) and (b) shall be equal to 25% of the | 7 | | unreimbursed eligible remediation costs in excess of | 8 | | $100,000 per site. | 9 | | (ii) A credit allowed under this subsection that is | 10 | | unused in the year the credit is earned may be carried | 11 | | forward to each of the 5 taxable years following the year | 12 | | for which the credit is first earned until it is used. This | 13 | | credit shall be applied first to the earliest year for | 14 | | which there is a liability. If there is a credit under this | 15 | | subsection from more than one tax year that is available to | 16 | | offset a liability, the earliest credit arising under this | 17 | | subsection shall be applied first. A credit allowed under | 18 | | this subsection may be sold to a buyer as part of a sale of | 19 | | all or part of the remediation site for which the credit | 20 | | was granted. The purchaser of a remediation site and the | 21 | | tax credit shall succeed to the unused credit and remaining | 22 | | carry-forward period of the seller. To perfect the | 23 | | transfer, the assignor shall record the transfer in the | 24 | | chain of title for the site and provide written notice to | 25 | | the Director of the Illinois Department of Revenue of the | 26 | | assignor's intent to sell the remediation site and the |
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| 1 | | amount of the tax credit to be transferred as a portion of | 2 | | the sale. In no event may a credit be transferred to any | 3 | | taxpayer if the taxpayer or a related party would not be | 4 | | eligible under the provisions of subsection (i). | 5 | | (iii) For purposes of this Section, the term "site" | 6 | | shall have the same meaning as under Section 58.2 of the | 7 | | Environmental Protection Act. | 8 | | (Source: P.A. 96-115, eff. 7-31-09; 96-116, eff. 7-31-09; | 9 | | 96-937, eff. 6-23-10; 96-1000, eff. 7-2-10; 96-1496, eff. | 10 | | 1-13-11; 97-2, eff. 5-6-11; 97-636, eff. 6-1-12.)
| 11 | | (35 ILCS 5/207) (from Ch. 120, par. 2-207)
| 12 | | Sec. 207. Net Losses.
| 13 | | (a) If after applying all of the (i) modifications
provided | 14 | | for in paragraph (2) of Section 203(b), paragraph (2) of | 15 | | Section
203(c) and paragraph (2) of Section 203(d) and (ii) the | 16 | | allocation and
apportionment provisions of Article 3 of this
| 17 | | Act and subsection (c) of this Section, the taxpayer's net | 18 | | income results in a loss;
| 19 | | (1) for any taxable year ending prior to December 31, | 20 | | 1999, such loss
shall be allowed
as a carryover or | 21 | | carryback deduction in the manner allowed under Section
172 | 22 | | of the Internal Revenue Code;
| 23 | | (2) for any taxable year ending on or after December | 24 | | 31, 1999 and prior
to December 31, 2003, such loss
shall be | 25 | | allowed as a carryback to each of the 2 taxable years |
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| 1 | | preceding the
taxable year of such loss and shall be a net | 2 | | operating loss carryover to each of the
20 taxable years | 3 | | following the taxable year of such loss; and
| 4 | | (3) for any taxable year ending on or after December | 5 | | 31, 2003 and prior to December 31, 2012 , such loss
shall be | 6 | | allowed as a net operating loss carryover to each of the 12 | 7 | | taxable years
following the taxable year of such loss, | 8 | | except as provided in subsection (d) ; and .
| 9 | | (4) except as provided in subsection (d), for any | 10 | | taxable year ending on or after December 31, 2012, such | 11 | | loss
shall be allowed as a carryback to each of the 2 | 12 | | taxable years preceding the
taxable year of the loss and | 13 | | shall be allowed as a net operating loss carryover to each | 14 | | of the 20 taxable years
following the taxable year of the | 15 | | loss. | 16 | | (a-5) Election to relinquish carryback and order of | 17 | | application of
losses.
| 18 | | (A) For losses incurred in tax years ending prior | 19 | | to December 31,
2003, the taxpayer may elect to | 20 | | relinquish the entire carryback period
with respect to | 21 | | such loss. Such election shall be made in the form and | 22 | | manner
prescribed by the Department and shall be made | 23 | | by the due date (including
extensions of time) for | 24 | | filing the taxpayer's return for the taxable year in
| 25 | | which such loss is incurred, and such election, once | 26 | | made, shall be
irrevocable.
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| 1 | | (B) The entire amount of such loss shall be carried | 2 | | to the earliest
taxable year to which such loss may be | 3 | | carried. The amount of such loss which
shall be carried | 4 | | to each of the other taxable years shall be the excess, | 5 | | if
any, of the amount of such loss over the sum of the | 6 | | deductions for carryback or
carryover of such loss | 7 | | allowable for each of the prior taxable years to which
| 8 | | such loss may be carried.
| 9 | | (b) Any loss determined under subsection (a) of this | 10 | | Section must be carried
back or carried forward in the same | 11 | | manner for purposes of subsections (a)
and (b) of Section 201 | 12 | | of this Act as for purposes of subsections (c) and
(d) of | 13 | | Section 201 of this Act.
| 14 | | (c) Notwithstanding any other provision of this Act, for | 15 | | each taxable year ending on or after December 31, 2008, for | 16 | | purposes of computing the loss for the taxable year under | 17 | | subsection (a) of this Section and the deduction taken into | 18 | | account for the taxable year for a net operating loss carryover | 19 | | under paragraphs (1), (2), and (3) of subsection (a) of this | 20 | | Section, the loss and net operating loss carryover shall be | 21 | | reduced in an amount equal to the reduction to the net | 22 | | operating loss and net operating loss carryover to the taxable | 23 | | year, respectively, required under Section 108(b)(2)(A) of the | 24 | | Internal Revenue Code, multiplied by a fraction, the numerator | 25 | | of which is the amount of discharge of indebtedness income that | 26 | | is excluded from gross income for the taxable year (but only if |
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| 1 | | the taxable year ends on or after December 31, 2008) under | 2 | | Section 108(a) of the Internal Revenue Code and that would have | 3 | | been allocated and apportioned to this State under Article 3 of | 4 | | this Act but for that exclusion, and the denominator of which | 5 | | is the total amount of discharge of indebtedness income | 6 | | excluded from gross income under Section 108(a) of the Internal | 7 | | Revenue Code for the taxable year. The reduction required under | 8 | | this subsection (c) shall be made after the determination of | 9 | | Illinois net income for the taxable year in which the | 10 | | indebtedness is discharged.
| 11 | | (d) In the case of a corporation (other than a Subchapter S | 12 | | corporation), no carryover deduction shall be allowed under | 13 | | this Section for any taxable year ending after December 31, | 14 | | 2010 and prior to December 31, 2012 , and no carryover deduction | 15 | | shall exceed $100,000 for any taxable year ending on or after | 16 | | December 31, 2012 and prior to December 31, 2014 ; provided | 17 | | that, for purposes of determining the taxable years to which a | 18 | | net loss may be carried under subsection (a) of this Section, | 19 | | no taxable year for which a deduction is disallowed under this | 20 | | subsection , or for which the deduction would exceed $100,000 if | 21 | | not for this subsection, shall be counted. | 22 | | (e) In the case of a residual interest holder in a real | 23 | | estate mortgage investment conduit subject to Section 860E of | 24 | | the Internal Revenue Code, the net loss in subsection (a) shall | 25 | | be equal to: | 26 | | (1) the amount computed under subsection (a), without |
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| 1 | | regard to this subsection (e), or if that amount is | 2 | | positive, zero; | 3 | | (2) minus an amount equal to the amount computed under | 4 | | subsection (a), without regard to this subsection (e), | 5 | | minus the amount that would be computed under subsection | 6 | | (a) if the taxpayer's federal taxable income were computed | 7 | | without regard to Section 860E of the Internal Revenue Code | 8 | | and without regard to this subsection (e). | 9 | | The modification in this subsection (e) is exempt from the | 10 | | provisions of Section 250. | 11 | | (Source: P.A. 96-1496, eff. 1-13-11; 97-507, eff. 8-23-11; | 12 | | 97-636, eff. 6-1-12.)
| 13 | | Section 10. The Illinois Estate and Generation-Skipping | 14 | | Transfer Tax Act is amended by changing Sections 2 and 3 as | 15 | | follows:
| 16 | | (35 ILCS 405/2) (from Ch. 120, par. 405A-2)
| 17 | | (Text of Section before amendment by P.A. 97-636 ) | 18 | | Sec. 2. Definitions.
| 19 | | "Federal estate tax" means the tax due to the United States | 20 | | with respect
to a taxable transfer under Chapter 11 of the | 21 | | Internal Revenue Code.
| 22 | | "Federal generation-skipping transfer tax" means the tax | 23 | | due to the
United States with respect to a taxable transfer | 24 | | under Chapter 13 of the
Internal Revenue Code.
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| 1 | | "Federal return" means the federal estate tax return with | 2 | | respect to the
federal estate tax and means the federal | 3 | | generation-skipping transfer tax
return
with respect to the | 4 | | federal generation-skipping transfer tax.
| 5 | | "Federal transfer tax" means the federal estate tax or the | 6 | | federal
generation-skipping transfer tax.
| 7 | | "Illinois estate tax" means the tax due to this State with | 8 | | respect to a
taxable transfer.
| 9 | | "Illinois generation-skipping transfer tax" means the tax | 10 | | due to this State
with respect to a taxable transfer that gives | 11 | | rise to a federal
generation-skipping transfer tax.
| 12 | | "Illinois transfer tax" means the Illinois estate tax or | 13 | | the Illinois
generation-skipping transfer tax.
| 14 | | "Internal Revenue Code" means, unless otherwise provided, | 15 | | the Internal
Revenue Code of 1986, as
amended from time to | 16 | | time.
| 17 | | "Non-resident trust" means a trust that is not a resident | 18 | | of this State
for purposes of the Illinois Income Tax Act, as | 19 | | amended from time to time.
| 20 | | "Person" means and includes any individual, trust, estate, | 21 | | partnership,
association, company or corporation.
| 22 | | "Qualified heir" means a qualified heir as defined in | 23 | | Section 2032A(e)(1)
of the Internal Revenue Code.
| 24 | | "Resident trust" means a trust that is a resident of this | 25 | | State for
purposes of the Illinois Income Tax Act, as amended | 26 | | from time to time.
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| 1 | | "State" means any state, territory or possession of the | 2 | | United States and
the District of Columbia.
| 3 | | "State tax credit" means:
| 4 | | (a) For persons dying on or after January 1, 2003 and
| 5 | | through December 31, 2005, an amount
equal
to the full credit | 6 | | calculable under Section 2011 or Section 2604 of the
Internal | 7 | | Revenue
Code as the credit would have been computed and allowed | 8 | | under the Internal
Revenue
Code as in effect on December 31, | 9 | | 2001, without the reduction in the State
Death Tax
Credit as | 10 | | provided in Section 2011(b)(2) or the termination of the State | 11 | | Death
Tax Credit
as provided in Section 2011(f) as enacted by | 12 | | the Economic Growth and Tax Relief
Reconciliation Act of 2001, | 13 | | but recognizing the increased applicable exclusion
amount
| 14 | | through December 31, 2005.
| 15 | | (b) For persons dying after December 31, 2005 and on or | 16 | | before December 31,
2009, and for persons dying after December | 17 | | 31, 2010, an amount equal to the full
credit
calculable under | 18 | | Section 2011 or 2604 of the Internal Revenue Code as the
credit | 19 | | would
have been computed and allowed under the Internal Revenue | 20 | | Code as in effect on
December 31, 2001, without the reduction | 21 | | in the State Death Tax Credit as
provided in
Section 2011(b)(2) | 22 | | or the termination of the State Death Tax Credit as provided
in
| 23 | | Section 2011(f) as enacted by the Economic Growth and Tax | 24 | | Relief Reconciliation
Act of
2001, but recognizing the | 25 | | exclusion amount of only $2,000,000, and with reduction to the | 26 | | adjusted taxable estate for any qualified terminable interest |
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| 1 | | property election as defined in subsection (b-1) of this | 2 | | Section.
| 3 | | (b-1) The person required to file the Illinois return may | 4 | | elect on a timely filed Illinois return a marital deduction for | 5 | | qualified terminable interest property under Section | 6 | | 2056(b)(7) of the Internal Revenue Code for purposes of the | 7 | | Illinois estate tax that is separate and independent of any | 8 | | qualified terminable interest property election for federal | 9 | | estate tax purposes. For purposes of the Illinois estate tax, | 10 | | the inclusion of property in the gross estate of a surviving | 11 | | spouse is the same as under Section 2044 of the Internal | 12 | | Revenue Code. | 13 | | In the case of any trust for which a State or federal | 14 | | qualified terminable interest property election is made, the | 15 | | trustee may not retain non-income producing assets for more | 16 | | than a reasonable amount of time without the consent of the | 17 | | surviving spouse.
| 18 | | "Taxable transfer" means an event that gives rise to a | 19 | | state tax credit,
including any credit as a result of the | 20 | | imposition of an
additional tax under Section 2032A(c) of the | 21 | | Internal Revenue Code.
| 22 | | "Transferee" means a transferee within the meaning of | 23 | | Section 2603(a)(1)
and Section 6901(h) of the Internal Revenue | 24 | | Code.
| 25 | | "Transferred property" means:
| 26 | | (1) With respect to a taxable transfer occurring at the |
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| 1 | | death of an
individual, the
deceased individual's gross | 2 | | estate as defined in Section 2031 of the
Internal Revenue | 3 | | Code.
| 4 | | (2) With respect to a taxable transfer occurring as a | 5 | | result of a
taxable termination as defined in Section | 6 | | 2612(a) of the Internal Revenue Code,
the taxable amount | 7 | | determined under Section 2622(a) of the Internal Revenue
| 8 | | Code.
| 9 | | (3) With respect to a taxable transfer occurring as a | 10 | | result of a
taxable distribution as defined in Section | 11 | | 2612(b) of the Internal Revenue Code,
the taxable amount | 12 | | determined under Section 2621(a) of the Internal Revenue
| 13 | | Code.
| 14 | | (4) With respect to an event which causes the | 15 | | imposition of an
additional estate tax under Section | 16 | | 2032A(c) of the Internal Revenue Code,
the
qualified real | 17 | | property that was disposed of or which ceased to be used | 18 | | for
the qualified use, within the meaning of Section | 19 | | 2032A(c)(1) of the Internal
Revenue Code.
| 20 | | "Trust" includes a trust as defined in Section 2652(b)(1) | 21 | | of the Internal
Revenue Code.
| 22 | | (Source: P.A. 96-789, eff. 9-8-09; 96-1496, eff. 1-13-11.) | 23 | | (Text of Section after amendment by P.A. 97-636 ) | 24 | | Sec. 2. Definitions.
| 25 | | "Federal estate tax" means the tax due to the United States |
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| 1 | | with respect
to a taxable transfer under Chapter 11 of the | 2 | | Internal Revenue Code.
| 3 | | "Federal generation-skipping transfer tax" means the tax | 4 | | due to the
United States with respect to a taxable transfer | 5 | | under Chapter 13 of the
Internal Revenue Code.
| 6 | | "Federal return" means the federal estate tax return with | 7 | | respect to the
federal estate tax and means the federal | 8 | | generation-skipping transfer tax
return
with respect to the | 9 | | federal generation-skipping transfer tax.
| 10 | | "Federal transfer tax" means the federal estate tax or the | 11 | | federal
generation-skipping transfer tax.
| 12 | | "Illinois estate tax" means the tax due to this State with | 13 | | respect to a
taxable transfer.
| 14 | | "Illinois generation-skipping transfer tax" means the tax | 15 | | due to this State
with respect to a taxable transfer that gives | 16 | | rise to a federal
generation-skipping transfer tax.
| 17 | | "Illinois transfer tax" means the Illinois estate tax or | 18 | | the Illinois
generation-skipping transfer tax.
| 19 | | "Internal Revenue Code" means, unless otherwise provided, | 20 | | the Internal
Revenue Code of 1986, as
amended from time to | 21 | | time.
| 22 | | "Non-resident trust" means a trust that is not a resident | 23 | | of this State
for purposes of the Illinois Income Tax Act, as | 24 | | amended from time to time.
| 25 | | "Person" means and includes any individual, trust, estate, | 26 | | partnership,
association, company or corporation.
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| 1 | | "Qualified heir" means a qualified heir as defined in | 2 | | Section 2032A(e)(1)
of the Internal Revenue Code.
| 3 | | "Resident trust" means a trust that is a resident of this | 4 | | State for
purposes of the Illinois Income Tax Act, as amended | 5 | | from time to time.
| 6 | | "State" means any state, territory or possession of the | 7 | | United States and
the District of Columbia.
| 8 | | "State tax credit" means:
| 9 | | (a) For persons dying on or after January 1, 2003 and
| 10 | | through December 31, 2005, an amount
equal
to the full credit | 11 | | calculable under Section 2011 or Section 2604 of the
Internal | 12 | | Revenue
Code as the credit would have been computed and allowed | 13 | | under the Internal
Revenue
Code as in effect on December 31, | 14 | | 2001, without the reduction in the State
Death Tax
Credit as | 15 | | provided in Section 2011(b)(2) or the termination of the State | 16 | | Death
Tax Credit
as provided in Section 2011(f) as enacted by | 17 | | the Economic Growth and Tax Relief
Reconciliation Act of 2001, | 18 | | but recognizing the increased applicable exclusion
amount
| 19 | | through December 31, 2005.
| 20 | | (b) For persons dying after December 31, 2005 and on or | 21 | | before December 31,
2009, and for persons dying after December | 22 | | 31, 2010, an amount equal to the full
credit
calculable under | 23 | | Section 2011 or 2604 of the Internal Revenue Code as the
credit | 24 | | would
have been computed and allowed under the Internal Revenue | 25 | | Code as in effect on
December 31, 2001, without the reduction | 26 | | in the State Death Tax Credit as
provided in
Section 2011(b)(2) |
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| 1 | | or the termination of the State Death Tax Credit as provided
in
| 2 | | Section 2011(f) as enacted by the Economic Growth and Tax | 3 | | Relief Reconciliation
Act of
2001, but recognizing the | 4 | | exclusion amount of only (i) $2,000,000 for persons dying prior | 5 | | to January 1, 2012, (ii) $3,500,000 for persons dying on or | 6 | | after January 1, 2012 and prior to January 1, 2013, and (iii) | 7 | | $4,000,000 for persons dying on or after January 1, 2013 , and | 8 | | with reduction to the adjusted taxable estate for any qualified | 9 | | terminable interest property election as defined in subsection | 10 | | (b-1) of this Section.
| 11 | | (b-1) The person required to file the Illinois return may | 12 | | elect on a timely filed Illinois return a marital deduction for | 13 | | qualified terminable interest property under Section | 14 | | 2056(b)(7) of the Internal Revenue Code for purposes of the | 15 | | Illinois estate tax that is separate and independent of any | 16 | | qualified terminable interest property election for federal | 17 | | estate tax purposes. For purposes of the Illinois estate tax, | 18 | | the inclusion of property in the gross estate of a surviving | 19 | | spouse is the same as under Section 2044 of the Internal | 20 | | Revenue Code. | 21 | | In the case of any trust for which a State or federal | 22 | | qualified terminable interest property election is made, the | 23 | | trustee may not retain non-income producing assets for more | 24 | | than a reasonable amount of time without the consent of the | 25 | | surviving spouse.
| 26 | | "Taxable transfer" means an event that gives rise to a |
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| 1 | | state tax credit,
including any credit as a result of the | 2 | | imposition of an
additional tax under Section 2032A(c) of the | 3 | | Internal Revenue Code.
| 4 | | "Transferee" means a transferee within the meaning of | 5 | | Section 2603(a)(1)
and Section 6901(h) of the Internal Revenue | 6 | | Code.
| 7 | | "Transferred property" means:
| 8 | | (1) With respect to a taxable transfer occurring at the | 9 | | death of an
individual, the
deceased individual's gross | 10 | | estate as defined in Section 2031 of the
Internal Revenue | 11 | | Code.
| 12 | | (2) With respect to a taxable transfer occurring as a | 13 | | result of a
taxable termination as defined in Section | 14 | | 2612(a) of the Internal Revenue Code,
the taxable amount | 15 | | determined under Section 2622(a) of the Internal Revenue
| 16 | | Code.
| 17 | | (3) With respect to a taxable transfer occurring as a | 18 | | result of a
taxable distribution as defined in Section | 19 | | 2612(b) of the Internal Revenue Code,
the taxable amount | 20 | | determined under Section 2621(a) of the Internal Revenue
| 21 | | Code.
| 22 | | (4) With respect to an event which causes the | 23 | | imposition of an
additional estate tax under Section | 24 | | 2032A(c) of the Internal Revenue Code,
the
qualified real | 25 | | property that was disposed of or which ceased to be used | 26 | | for
the qualified use, within the meaning of Section |
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| 1 | | 2032A(c)(1) of the Internal
Revenue Code.
| 2 | | "Trust" includes a trust as defined in Section 2652(b)(1) | 3 | | of the Internal
Revenue Code.
| 4 | | (Source: P.A. 96-789, eff. 9-8-09; 96-1496, eff. 1-13-11; | 5 | | 97-636, eff. 6-1-12.)
| 6 | | (35 ILCS 405/3) (from Ch. 120, par. 405A-3)
| 7 | | Sec. 3. Illinois estate tax.
| 8 | | (a) Imposition of Tax. An Illinois estate tax is imposed on | 9 | | every
taxable transfer
involving transferred
property having a | 10 | | tax situs within the State of Illinois.
| 11 | | (b) Amount of tax. On estates of persons dying before | 12 | | January 1, 2003, the amount of the Illinois estate tax shall be | 13 | | the state
tax credit, as defined in Section 2 of this Act, with | 14 | | respect to the taxable
transfer
reduced by the lesser of:
| 15 | | (1) the amount of the state tax credit paid to any | 16 | | other state or states;
and
| 17 | | (2) the amount determined by multiplying the maximum | 18 | | state tax
credit allowable with respect to the taxable | 19 | | transfer
by the percentage which the gross
value of the | 20 | | transferred property not having a tax situs in Illinois | 21 | | bears
to the gross value of the total transferred property. | 22 | | (c) On estates of persons dying on or after January 1, 2003 | 23 | | and before January 1, 2010 , the amount of the Illinois estate | 24 | | tax shall be the state
tax credit, as defined in Section 2 of | 25 | | this Act, reduced by the amount determined by multiplying the |
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| 1 | | state tax
credit with respect to the taxable transfer
by the | 2 | | percentage which the gross
value of the transferred property | 3 | | not having a tax situs in Illinois bears
to the gross value of | 4 | | the total transferred property.
| 5 | | (d) For persons dying after December 31, 2009, no tax shall | 6 | | be imposed under this Act.
| 7 | | (Source: P.A. 93-30, eff. 6-20-03; 94-419, eff. 8-2-05.)
| 8 | | Section 95. No acceleration or delay. Where this Act makes | 9 | | changes in a statute that is represented in this Act by text | 10 | | that is not yet or no longer in effect (for example, a Section | 11 | | represented by multiple versions), the use of that text does | 12 | | not accelerate or delay the taking effect of (i) the changes | 13 | | made by this Act or (ii) provisions derived from any other | 14 | | Public Act.
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