Illinois General Assembly - Full Text of SB3457
Illinois General Assembly

  Bills & Resolutions  
  Compiled Statutes  
  Public Acts  
  Legislative Reports  
  IL Constitution  
  Legislative Guide  
  Legislative Glossary  

 Search By Number
 (example: HB0001)
Search Tips

Search By Keyword

Full Text of SB3457  102nd General Assembly

SB3457 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB3457

 

Introduced 1/18/2022, by Sen. Brian W. Stewart

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/232 new
35 ILCS 735/3-3  from Ch. 120, par. 2603-3

    Amends the Illinois Income Tax Act. Creates an income tax credit in an amount equal to 1% of the expenses claimed by the taxpayer as a federal income tax deduction pursuant to Section 179 of the Internal Revenue Code for the tax year. Provides that the taxpayer may sell, assign, or transfer the credit. Provides that the maximum aggregate amount of credits awarded for those purposes may not exceed $45,000,000 in any calendar year. Amends the Uniform Penalty and Interest Act to provide that, if the amount of the credit is reduced because the claims for credit exceed the maximum aggregate amount of the credit, then no underpayment penalty or interest shall accrue on the additional tax so long as the additional tax is paid within 60 days after the notice of reduction. Effective immediately.


LRB102 22410 HLH 31550 b

 

 

A BILL FOR

 

SB3457LRB102 22410 HLH 31550 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5adding Section 232 as follows:
 
6    (35 ILCS 5/232 new)
7    Sec. 232. Small business bonus investment credit.
8    (a) For tax years beginning on or after January 1, 2023,
9subject to the limitations of subsection (e), a taxpayer is
10entitled to a credit against the taxes imposed under
11subsections (a) and (b) of Section 201 of this Act in an amount
12equal to 1% of the expenses claimed by the taxpayer as a
13federal income tax deduction pursuant to Section 179 of the
14Internal Revenue Code for the tax year.
15    (b) If the taxpayer is a partnership or Subchapter S
16corporation, the credit is allowed to the partners or
17shareholders in accordance with the determination of income
18and distributive share of income under Sections 702 and 704
19and Subchapter S of the Internal Revenue Code.
20    (c) If the amount of the credit exceeds the tax liability
21for the year, then the excess credit may be carried forward and
22applied to the tax liability of the 5 taxable years following
23the excess credit year. The credit shall be applied to the

 

 

SB3457- 2 -LRB102 22410 HLH 31550 b

1earliest year for which there is a tax liability. If there are
2credits from more than one tax year that are available to
3offset a liability, the earlier credit shall be applied first.
4In no event shall a credit under this Section reduce the
5taxpayer's liability to less than zero.
6    (d) A sale, assignment, or transfer of this credit may be
7made by the taxpayer in accordance with rules adopted by the
8Department. In the event the Department audits the taxpayer
9and establishes a final liability that reduces the amount of a
10credit that has been sold, assigned, or transferred, the
11taxpayer remains liable to the Department and the Department
12may not attempt to recoup the credit from a purchaser,
13assignee, or transferee.
14    (e) The maximum aggregate amount of credits awarded under
15this Section may not exceed $45,000,000 in any calendar year.
16No credit may be awarded if claimed on a return that is filed
17after the original due date plus any automatic extension. The
18Department shall determine the total amount of credits claimed
19for a calendar year by March 1 of the next calendar year. If
20the timely claims for the credit exceed $45,000,000 in any
21calendar year, the Department shall reduce the amount of the
22credit pro rata and provide written notice of the reduction to
23each taxpayer. The notice of reduction is a Notice and Demand
24under Section 902 of this Act and shall not be a protestable
25notice under Section 903 of this Act. In no event shall any
26purchaser, assignee, or transferee be responsible for such

 

 

SB3457- 3 -LRB102 22410 HLH 31550 b

1additional tax. Each taxpayer shall report and repay
2additional taxes required by the reduction of the credit
3within 60 days after the notice of the reduction. No
4underpayment penalty or interest shall accrue pursuant to the
5Uniform Penalty and Interest Act on such additional tax so
6long as the additional tax is paid within 60 days after the
7notice of reduction. Nothing in this subsection shall preclude
8the Department from reducing the amount of credit granted to
9any taxpayer as a result of an audit.
10    (f) The Department shall adopt rules to enforce and
11administer provisions of this Section on or before January 1,
122023.
13    (g) This Section is exempt from the provisions of Section
14250.
 
15    Section 10. The Uniform Penalty and Interest Act is
16amended by changing Section 3-3 as follows:
 
17    (35 ILCS 735/3-3)  (from Ch. 120, par. 2603-3)
18    Sec. 3-3. Penalty for failure to file or pay.
19    (a) This subsection (a) is applicable before January 1,
201996. A penalty of 5% of the tax required to be shown due on a
21return shall be imposed for failure to file the tax return on
22or before the due date prescribed for filing determined with
23regard for any extension of time for filing (penalty for late
24filing or nonfiling). If any unprocessable return is corrected

 

 

SB3457- 4 -LRB102 22410 HLH 31550 b

1and filed within 21 days after notice by the Department, the
2late filing or nonfiling penalty shall not apply. If a penalty
3for late filing or nonfiling is imposed in addition to a
4penalty for late payment, the total penalty due shall be the
5sum of the late filing penalty and the applicable late payment
6penalty. Beginning on the effective date of this amendatory
7Act of 1995, in the case of any type of tax return required to
8be filed more frequently than annually, when the failure to
9file the tax return on or before the date prescribed for filing
10(including any extensions) is shown to be nonfraudulent and
11has not occurred in the 2 years immediately preceding the
12failure to file on the prescribed due date, the penalty
13imposed by Section 3-3(a) shall be abated.
14    (a-5) This subsection (a-5) is applicable to returns due
15on and after January 1, 1996 and on or before December 31,
162000. A penalty equal to 2% of the tax required to be shown due
17on a return, up to a maximum amount of $250, determined without
18regard to any part of the tax that is paid on time or by any
19credit that was properly allowable on the date the return was
20required to be filed, shall be imposed for failure to file the
21tax return on or before the due date prescribed for filing
22determined with regard for any extension of time for filing.
23However, if any return is not filed within 30 days after notice
24of nonfiling mailed by the Department to the last known
25address of the taxpayer contained in Department records, an
26additional penalty amount shall be imposed equal to the

 

 

SB3457- 5 -LRB102 22410 HLH 31550 b

1greater of $250 or 2% of the tax shown on the return. However,
2the additional penalty amount may not exceed $5,000 and is
3determined without regard to any part of the tax that is paid
4on time or by any credit that was properly allowable on the
5date the return was required to be filed (penalty for late
6filing or nonfiling). If any unprocessable return is corrected
7and filed within 30 days after notice by the Department, the
8late filing or nonfiling penalty shall not apply. If a penalty
9for late filing or nonfiling is imposed in addition to a
10penalty for late payment, the total penalty due shall be the
11sum of the late filing penalty and the applicable late payment
12penalty. In the case of any type of tax return required to be
13filed more frequently than annually, when the failure to file
14the tax return on or before the date prescribed for filing
15(including any extensions) is shown to be nonfraudulent and
16has not occurred in the 2 years immediately preceding the
17failure to file on the prescribed due date, the penalty
18imposed by Section 3-3(a-5) shall be abated.
19    (a-10) This subsection (a-10) is applicable to returns due
20on and after January 1, 2001. A penalty equal to 2% of the tax
21required to be shown due on a return, up to a maximum amount of
22$250, reduced by any tax that is paid on time or by any credit
23that was properly allowable on the date the return was
24required to be filed, shall be imposed for failure to file the
25tax return on or before the due date prescribed for filing
26determined with regard for any extension of time for filing.

 

 

SB3457- 6 -LRB102 22410 HLH 31550 b

1However, if any return is not filed within 30 days after notice
2of nonfiling mailed by the Department to the last known
3address of the taxpayer contained in Department records, an
4additional penalty amount shall be imposed equal to the
5greater of $250 or 2% of the tax shown on the return. However,
6the additional penalty amount may not exceed $5,000 and is
7determined without regard to any part of the tax that is paid
8on time or by any credit that was properly allowable on the
9date the return was required to be filed (penalty for late
10filing or nonfiling). If any unprocessable return is corrected
11and filed within 30 days after notice by the Department, the
12late filing or nonfiling penalty shall not apply. If a penalty
13for late filing or nonfiling is imposed in addition to a
14penalty for late payment, the total penalty due shall be the
15sum of the late filing penalty and the applicable late payment
16penalty. In the case of any type of tax return required to be
17filed more frequently than annually, when the failure to file
18the tax return on or before the date prescribed for filing
19(including any extensions) is shown to be nonfraudulent and
20has not occurred in the 2 years immediately preceding the
21failure to file on the prescribed due date, the penalty
22imposed by this subsection (a-10) shall be abated. This
23subsection (a-10) does not apply to transaction reporting
24returns required by Section 3 of the Retailers' Occupation Tax
25Act and Section 9 of the Use Tax Act that would not, when
26properly prepared and filed, result in the imposition of a

 

 

SB3457- 7 -LRB102 22410 HLH 31550 b

1tax; however, those returns are subject to the penalty set
2forth in subsection (a-15).
3    (a-15) A penalty of $100 shall be imposed for failure to
4file a transaction reporting return required by Section 3 of
5the Retailers' Occupation Tax Act and Section 9 of the Use Tax
6Act on or before the date a return is required to be filed;
7provided, however, that this penalty shall be imposed only if
8the return when properly prepared and filed would not result
9in the imposition of a tax. If such a transaction reporting
10return would result in the imposition of a tax when properly
11prepared and filed, then that return is subject to the
12provisions of subsection (a-10).
13    (b) This subsection is applicable before January 1, 1998.
14A penalty of 15% of the tax shown on the return or the tax
15required to be shown due on the return shall be imposed for
16failure to pay:
17        (1) the tax shown due on the return on or before the
18    due date prescribed for payment of that tax, an amount of
19    underpayment of estimated tax, or an amount that is
20    reported in an amended return other than an amended return
21    timely filed as required by subsection (b) of Section 506
22    of the Illinois Income Tax Act (penalty for late payment
23    or nonpayment of admitted liability); or
24        (2) the full amount of any tax required to be shown due
25    on a return and which is not shown (penalty for late
26    payment or nonpayment of additional liability), within 30

 

 

SB3457- 8 -LRB102 22410 HLH 31550 b

1    days after a notice of arithmetic error, notice and
2    demand, or a final assessment is issued by the Department.
3    In the case of a final assessment arising following a
4    protest and hearing, the 30-day period shall not begin
5    until all proceedings in court for review of the final
6    assessment have terminated or the period for obtaining a
7    review has expired without proceedings for a review having
8    been instituted. In the case of a notice of tax liability
9    that becomes a final assessment without a protest and
10    hearing, the penalty provided in this paragraph (2) shall
11    be imposed at the expiration of the period provided for
12    the filing of a protest.
13    (b-5) This subsection is applicable to returns due on and
14after January 1, 1998 and on or before December 31, 2000. A
15penalty of 20% of the tax shown on the return or the tax
16required to be shown due on the return shall be imposed for
17failure to pay:
18        (1) the tax shown due on the return on or before the
19    due date prescribed for payment of that tax, an amount of
20    underpayment of estimated tax, or an amount that is
21    reported in an amended return other than an amended return
22    timely filed as required by subsection (b) of Section 506
23    of the Illinois Income Tax Act (penalty for late payment
24    or nonpayment of admitted liability); or
25        (2) the full amount of any tax required to be shown due
26    on a return and which is not shown (penalty for late

 

 

SB3457- 9 -LRB102 22410 HLH 31550 b

1    payment or nonpayment of additional liability), within 30
2    days after a notice of arithmetic error, notice and
3    demand, or a final assessment is issued by the Department.
4    In the case of a final assessment arising following a
5    protest and hearing, the 30-day period shall not begin
6    until all proceedings in court for review of the final
7    assessment have terminated or the period for obtaining a
8    review has expired without proceedings for a review having
9    been instituted. In the case of a notice of tax liability
10    that becomes a final assessment without a protest and
11    hearing, the penalty provided in this paragraph (2) shall
12    be imposed at the expiration of the period provided for
13    the filing of a protest.
14    (b-10) This subsection (b-10) is applicable to returns due
15on and after January 1, 2001 and on or before December 31,
162003. A penalty shall be imposed for failure to pay:
17        (1) the tax shown due on a return on or before the due
18    date prescribed for payment of that tax, an amount of
19    underpayment of estimated tax, or an amount that is
20    reported in an amended return other than an amended return
21    timely filed as required by subsection (b) of Section 506
22    of the Illinois Income Tax Act (penalty for late payment
23    or nonpayment of admitted liability). The amount of
24    penalty imposed under this subsection (b-10)(1) shall be
25    2% of any amount that is paid no later than 30 days after
26    the due date, 5% of any amount that is paid later than 30

 

 

SB3457- 10 -LRB102 22410 HLH 31550 b

1    days after the due date and not later than 90 days after
2    the due date, 10% of any amount that is paid later than 90
3    days after the due date and not later than 180 days after
4    the due date, and 15% of any amount that is paid later than
5    180 days after the due date. If notice and demand is made
6    for the payment of any amount of tax due and if the amount
7    due is paid within 30 days after the date of the notice and
8    demand, then the penalty for late payment or nonpayment of
9    admitted liability under this subsection (b-10)(1) on the
10    amount so paid shall not accrue for the period after the
11    date of the notice and demand.
12        (2) the full amount of any tax required to be shown due
13    on a return and that is not shown (penalty for late payment
14    or nonpayment of additional liability), within 30 days
15    after a notice of arithmetic error, notice and demand, or
16    a final assessment is issued by the Department. In the
17    case of a final assessment arising following a protest and
18    hearing, the 30-day period shall not begin until all
19    proceedings in court for review of the final assessment
20    have terminated or the period for obtaining a review has
21    expired without proceedings for a review having been
22    instituted. The amount of penalty imposed under this
23    subsection (b-10)(2) shall be 20% of any amount that is
24    not paid within the 30-day period. In the case of a notice
25    of tax liability that becomes a final assessment without a
26    protest and hearing, the penalty provided in this

 

 

SB3457- 11 -LRB102 22410 HLH 31550 b

1    subsection (b-10)(2) shall be imposed at the expiration of
2    the period provided for the filing of a protest.
3    (b-15) This subsection (b-15) is applicable to returns due
4on and after January 1, 2004 and on or before December 31,
52004. A penalty shall be imposed for failure to pay the tax
6shown due or required to be shown due on a return on or before
7the due date prescribed for payment of that tax, an amount of
8underpayment of estimated tax, or an amount that is reported
9in an amended return other than an amended return timely filed
10as required by subsection (b) of Section 506 of the Illinois
11Income Tax Act (penalty for late payment or nonpayment of
12admitted liability). The amount of penalty imposed under this
13subsection (b-15)(1) shall be 2% of any amount that is paid no
14later than 30 days after the due date, 10% of any amount that
15is paid later than 30 days after the due date and not later
16than 90 days after the due date, 15% of any amount that is paid
17later than 90 days after the due date and not later than 180
18days after the due date, and 20% of any amount that is paid
19later than 180 days after the due date. If notice and demand is
20made for the payment of any amount of tax due and if the amount
21due is paid within 30 days after the date of this notice and
22demand, then the penalty for late payment or nonpayment of
23admitted liability under this subsection (b-15)(1) on the
24amount so paid shall not accrue for the period after the date
25of the notice and demand.
26    (b-20) This subsection (b-20) is applicable to returns due

 

 

SB3457- 12 -LRB102 22410 HLH 31550 b

1on and after January 1, 2005.
2        (1) A penalty shall be imposed for failure to pay,
3    prior to the due date for payment, any amount of tax the
4    payment of which is required to be made prior to the filing
5    of a return or without a return (penalty for late payment
6    or nonpayment of estimated or accelerated tax). The amount
7    of penalty imposed under this paragraph (1) shall be 2% of
8    any amount that is paid no later than 30 days after the due
9    date and 10% of any amount that is paid later than 30 days
10    after the due date.
11        (2) A penalty shall be imposed for failure to pay the
12    tax shown due or required to be shown due on a return on or
13    before the due date prescribed for payment of that tax or
14    an amount that is reported in an amended return other than
15    an amended return timely filed as required by subsection
16    (b) of Section 506 of the Illinois Income Tax Act (penalty
17    for late payment or nonpayment of tax). The amount of
18    penalty imposed under this paragraph (2) shall be 2% of
19    any amount that is paid no later than 30 days after the due
20    date, 10% of any amount that is paid later than 30 days
21    after the due date and prior to the date the Department has
22    initiated an audit or investigation of the taxpayer, and
23    20% of any amount that is paid after the date the
24    Department has initiated an audit or investigation of the
25    taxpayer; provided that the penalty shall be reduced to
26    15% if the entire amount due is paid not later than 30 days

 

 

SB3457- 13 -LRB102 22410 HLH 31550 b

1    after the Department has provided the taxpayer with an
2    amended return (following completion of an occupation,
3    use, or excise tax audit) or a form for waiver of
4    restrictions on assessment (following completion of an
5    income tax audit); provided further that the reduction to
6    15% shall be rescinded if the taxpayer makes any claim for
7    refund or credit of the tax, penalties, or interest
8    determined to be due upon audit, except in the case of a
9    claim filed pursuant to subsection (b) of Section 506 of
10    the Illinois Income Tax Act or to claim a carryover of a
11    loss or credit, the availability of which was not
12    determined in the audit. For purposes of this paragraph
13    (2), any overpayment reported on an original return that
14    has been allowed as a refund or credit to the taxpayer
15    shall be deemed to have not been paid on or before the due
16    date for payment and any amount paid under protest
17    pursuant to the provisions of the State Officers and
18    Employees Money Disposition Act shall be deemed to have
19    been paid after the Department has initiated an audit and
20    more than 30 days after the Department has provided the
21    taxpayer with an amended return (following completion of
22    an occupation, use, or excise tax audit) or a form for
23    waiver of restrictions on assessment (following completion
24    of an income tax audit).
25        (3) The penalty imposed under this subsection (b-20)
26    shall be deemed assessed at the time the tax upon which the

 

 

SB3457- 14 -LRB102 22410 HLH 31550 b

1    penalty is computed is assessed, except that, if the
2    reduction of the penalty imposed under paragraph (2) of
3    this subsection (b-20) to 15% is rescinded because a claim
4    for refund or credit has been filed, the increase in
5    penalty shall be deemed assessed at the time the claim for
6    refund or credit is filed.
7    (b-25) If the amount of the credit awarded to a taxpayer
8under Section 232 of the Illinois Income Tax Act is reduced
9because the claims for credit exceed the maximum aggregate
10amount of the credit set forth in that Section, then no
11underpayment penalty or interest shall accrue pursuant to this
12Act on the additional tax so long as the additional tax is paid
13within 60 days after the notice of reduction.
14    (c) For purposes of the late payment penalties, the basis
15of the penalty shall be the tax shown or required to be shown
16on a return, whichever is applicable, reduced by any part of
17the tax which is paid on time and by any credit which was
18properly allowable on the date the return was required to be
19filed.
20    (d) A penalty shall be applied to the tax required to be
21shown even if that amount is less than the tax shown on the
22return.
23    (e) This subsection (e) is applicable to returns due
24before January 1, 2001. If both a subsection (b)(1) or
25(b-5)(1) penalty and a subsection (b)(2) or (b-5)(2) penalty
26are assessed against the same return, the subsection (b)(2) or

 

 

SB3457- 15 -LRB102 22410 HLH 31550 b

1(b-5)(2) penalty shall be assessed against only the additional
2tax found to be due.
3    (e-5) This subsection (e-5) is applicable to returns due
4on and after January 1, 2001. If both a subsection (b-10)(1)
5penalty and a subsection (b-10)(2) penalty are assessed
6against the same return, the subsection (b-10)(2) penalty
7shall be assessed against only the additional tax found to be
8due.
9    (f) If the taxpayer has failed to file the return, the
10Department shall determine the correct tax according to its
11best judgment and information, which amount shall be prima
12facie evidence of the correctness of the tax due.
13    (g) The time within which to file a return or pay an amount
14of tax due without imposition of a penalty does not extend the
15time within which to file a protest to a notice of tax
16liability or a notice of deficiency.
17    (h) No return shall be determined to be unprocessable
18because of the omission of any information requested on the
19return pursuant to Section 2505-575 of the Department of
20Revenue Law (20 ILCS 2505/2505-575).
21    (i) If a taxpayer has a tax liability for the taxable
22period ending after June 30, 1983 and prior to July 1, 2002
23that is eligible for amnesty under the Tax Delinquency Amnesty
24Act and the taxpayer fails to satisfy the tax liability during
25the amnesty period provided for in that Act for that taxable
26period, then the penalty imposed by the Department under this

 

 

SB3457- 16 -LRB102 22410 HLH 31550 b

1Section shall be imposed in an amount that is 200% of the
2amount that would otherwise be imposed under this Section.
3    (j) If a taxpayer has a tax liability for the taxable
4period ending after June 30, 2002 and prior to July 1, 2009
5that is eligible for amnesty under the Tax Delinquency Amnesty
6Act, except for any tax liability reported pursuant to Section
7506(b) of the Illinois Income Tax Act (35 ILCS 5/506(b)) that
8is not final, and the taxpayer fails to satisfy the tax
9liability during the amnesty period provided for in that Act
10for that taxable period, then the penalty imposed by the
11Department under this Section shall be imposed in an amount
12that is 200% of the amount that would otherwise be imposed
13under this Section.
14(Source: P.A. 98-425, eff. 8-16-13; 99-335, eff. 8-10-15.)
 
15    Section 99. Effective date. This Act takes effect upon
16becoming law.