Illinois General Assembly - Full Text of SB2505
Illinois General Assembly

Previous General Assemblies

Full Text of SB2505  96th General Assembly

SB2505ham002 96TH GENERAL ASSEMBLY

Rep. Barbara Flynn Currie

Filed: 1/10/2011

 

 


 

 


 
09600SB2505ham002LRB096 16340 HLH 44936 a

1
AMENDMENT TO SENATE BILL 2505

2    AMENDMENT NO. ______. Amend Senate Bill 2505, AS AMENDED,
3by replacing everything after the enacting clause with the
4following:
 
5    "Section 1. This Act shall be known as the Taxpayer
6Accountability and Budget Stabilization Act.
 
7    Section 5. The Secretary of State Act is amended by
8changing Section 5 as follows:
 
9    (15 ILCS 305/5)  (from Ch. 124, par. 5)
10    Sec. 5. It shall be the duty of the Secretary of State:
11    1. To countersign and affix the seal of state to all
12commissions required by law to be issued by the Governor.
13    2. To make a register of all appointments by the Governor,
14specifying the person appointed, the office conferred, the date
15of the appointment, the date when bond or oath is taken and the

 

 

09600SB2505ham002- 2 -LRB096 16340 HLH 44936 a

1date filed. If Senate confirmation is required, the date of the
2confirmation shall be included in the register.
3    3. To make proper indexes to public acts, resolutions,
4papers and documents in his office.
5    3-a. To review all rules of all State agencies adopted in
6compliance with the codification system prescribed by the
7Secretary. The review shall be for the purposes and include all
8the powers and duties provided in the Illinois Administrative
9Procedure Act. The Secretary of State shall cooperate with the
10Legislative Information System to insure the accuracy of the
11text of the rules maintained under the Legislative Information
12System Act.
13    4. To give any person requiring the same paying the lawful
14fees therefor, a copy of any law, act, resolution, record or
15paper in his office, and attach thereto his certificate, under
16the seal of the state.
17    5. To take charge of and preserve from waste, and keep in
18repair, the houses, lots, grounds and appurtenances, situated
19in the City of Springfield, and belonging to or occupied by the
20State, the care of which is not otherwise provided for by law,
21and to take charge of and preserve from waste, and keep in
22repair, the houses, lots, grounds and appurtenances, situated
23in the State outside the City of Springfield where such houses,
24lots, grounds and appurtenances are occupied by the Secretary
25of State and no other State officer or agency.
26    6. To supervise the distribution of the laws.

 

 

09600SB2505ham002- 3 -LRB096 16340 HLH 44936 a

1    7. To perform such other duties as may be required by law.
2The Secretary of State may, within appropriations authorized by
3the General Assembly, maintain offices in the State Capital and
4in such other places in the State as he may deem necessary to
5properly carry out the powers and duties vested in him by law.
6    8. In addition to all other authority granted to the
7Secretary by law, subject to appropriation, to make grants or
8otherwise provide assistance to, among others without
9limitation, units of local government, school districts,
10educational institutions, private agencies, not-for-profit
11organizations, and for-profit entities for the health, safety,
12and welfare of Illinois residents for purposes related to
13education, transportation, construction, capital improvements,
14social services, and any other lawful public purpose. Upon
15request of the Secretary, all State agencies are mandated to
16provide the Secretary with assistance in administering the
17grants.
18    9. To notify the Auditor General of any Public Act filed
19with the Office of the Secretary of State making an
20appropriation or transfer of funds from the State treasury.
21This paragraph (9) applies only through June 30, 2015.
22(Source: P.A. 96-37, eff. 7-13-09.)
 
23    Section 10. The Illinois State Auditing Act is amended by
24adding Section 3-20 as follows:
 

 

 

09600SB2505ham002- 4 -LRB096 16340 HLH 44936 a

1    (30 ILCS 5/3-20 new)
2    Sec. 3-20. Spending limitation reports. The Auditor
3General shall issue reports in accordance with Section 201.5 of
4the Illinois Income Tax Act. This Section applies through June
530, 2015 or the effective date of a reduction in the rate of
6tax imposed by subsections (a) and (b) of Section 201 of the
7Illinois Income Tax Act pursuant to Section 201.5 of the
8Illinois Income Tax Act, whichever is earlier.
 
9    Section 15. The State Finance Act is amended by adding
10Sections 5.786, 5.787, 5.788, 6z-85, 6z-86, 6z-87, and 25.2 as
11follows:
 
12    (30 ILCS 105/5.786 new)
13    Sec. 5.786. The Fund for the Advancement of Education.
 
14    (30 ILCS 105/5.787 new)
15    Sec. 5.787. The Property Tax Rebate Trust Fund.
 
16    (30 ILCS 105/5.788 new)
17    Sec. 5.788. The Commitment to Human Services Fund.
 
18    (30 ILCS 105/6z-85 new)
19    Sec. 6z-85. The Fund for the Advancement of Education;
20creation. The Fund for the Advancement of Education is hereby
21created as a special fund in the State treasury. All moneys

 

 

09600SB2505ham002- 5 -LRB096 16340 HLH 44936 a

1deposited into the fund shall be appropriated to provide
2financial assistance for education programs. Moneys
3appropriated from the Fund shall supplement and not supplant
4the current level of education funding.
 
5    (30 ILCS 105/6z-86 new)
6    Sec. 6z-86. The Property Tax Rebate Trust Fund; uses.
7    (a) The Property Tax Rebate Trust Fund is hereby created as
8a special fund in the State treasury. Moneys in the Fund shall
9be used to pay rebates as provided in this Section. Beginning
10in 2012, as soon as practical after July 15 of each year, the
11Department of Revenue shall pay a rebate to each taxpayer who
12files, no later than April 15 of that year, an individual
13income tax return in the State for a taxable year beginning in
14the previous calendar year and was responsible for paying real
15property taxes on his or her principal residence located in the
16State during the taxable year. Persons filing a joint return
17shall be treated as one taxpayer, and only one rebate may be
18issued per residence each year. The amount of the property tax
19rebate shall be equal to the balance of the Property Tax Rebate
20Trust Fund as of July 1 of the calendar year divided by the
21number of eligible taxpayers, rounded to the next lowest dollar
22amount. The Department of Revenue shall certify the name of
23each taxpayer who is eligible for a rebate under this Section.
24The State Comptroller shall mail the rebate warrants to these
25taxpayers as soon as practical after receipt of the

 

 

09600SB2505ham002- 6 -LRB096 16340 HLH 44936 a

1certification from the Department of Revenue. The Comptroller
2shall include a notice with the rebate warrant advising the
3taxpayer that the rebate is being provided as a result of the
4Taxpayer Accountability and Budget Stabilization Act passed by
5the General Assembly and signed into law by the Governor.
6    (b) Any rebate payment that is returned or otherwise is not
7cashed shall be redeposited into the Fund.
8    (c) If the rate of tax imposed by subsections (a) and (b)
9of Section 201 of the Illinois Income Tax Act is reduced
10pursuant to Section 201.5 of the Illinois Income Tax Act, the
11Department of Revenue shall not make a certification and the
12Comptroller shall not issue warrants under this Section on or
13after the effective date of the reduction.
 
14    (30 ILCS 105/6z-87 new)
15    Sec. 6z-87. The Commitment to Human Services Fund; uses.
16The Commitment to Human Services Fund is hereby created as a
17special fund in the State treasury. All moneys deposited into
18the fund shall be appropriated to provide financial assistance
19for community-based human service providers and for State
20funded human service programs. Moneys appropriated from the
21Fund shall supplement and not supplant the current level of
22human services funding.
 
23    (30 ILCS 105/25.2 new)
24    Sec. 25.2. Statutory mandates not designated in law as

 

 

09600SB2505ham002- 7 -LRB096 16340 HLH 44936 a

1being subject to appropriation. Notwithstanding any law to the
2contrary, from the effective date of this Section through
3fiscal year 2015, with respect to any statutory mandate that is
4not designated in law as being subject to appropriation, if and
5only if the Governor determines that funds appropriated for
6such statutory mandates are insufficient to satisfy those
7mandates, the Governor may reduce the amount of funds
8appropriated for some or all of those statutory mandates in
9amounts he or she deems necessary to accommodate budgetary
10limitations while attempting to implement such mandates to the
11extent reasonably practical. The reduction shall become
12effective upon the Governor giving notice of the reduction to
13the Speaker of the House of Representatives, the President of
14the Senate, the Minority Leader of the House of
15Representatives, the Minority Leader of the Senate, the State
16Comptroller, the State Treasurer, and the Commission on
17Government Forecasting and Accountability. Nothing in this
18Section prohibits adjustments to the Governor's reduction by
19law.
 
20    Section 20. The Illinois Income Tax Act is amended by
21changing Sections 201, 207, 208, 208.1, 804, and 901 and by
22adding Sections 201.5, 202.5, and 517 as follows:
 
23    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
24    Sec. 201. Tax Imposed.

 

 

09600SB2505ham002- 8 -LRB096 16340 HLH 44936 a

1    (a) In general. A tax measured by net income is hereby
2imposed on every individual, corporation, trust and estate for
3each taxable year ending after July 31, 1969 on the privilege
4of earning or receiving income in or as a resident of this
5State. Such tax shall be in addition to all other occupation or
6privilege taxes imposed by this State or by any municipal
7corporation or political subdivision thereof.
8    (b) Rates. The tax imposed by subsection (a) of this
9Section shall be determined as follows, except as adjusted by
10subsection (d-1):
11        (1) In the case of an individual, trust or estate, for
12    taxable years ending prior to July 1, 1989, an amount equal
13    to 2 1/2% of the taxpayer's net income for the taxable
14    year.
15        (2) In the case of an individual, trust or estate, for
16    taxable years beginning prior to July 1, 1989 and ending
17    after June 30, 1989, an amount equal to the sum of (i) 2
18    1/2% of the taxpayer's net income for the period prior to
19    July 1, 1989, as calculated under Section 202.3, and (ii)
20    3% of the taxpayer's net income for the period after June
21    30, 1989, as calculated under Section 202.3.
22        (3) In the case of an individual, trust or estate, for
23    taxable years beginning after June 30, 1989, and ending
24    prior to January 1, 2011, an amount equal to 3% of the
25    taxpayer's net income for the taxable year.
26        (4) In the case of an individual, trust, or estate, for

 

 

09600SB2505ham002- 9 -LRB096 16340 HLH 44936 a

1    taxable years beginning prior to January 1, 2011, and
2    ending after December 31, 2010, an amount equal to the sum
3    of (i) 3% of the taxpayer's net income for the period prior
4    to January 1, 2011, as calculated under Section 202.5, and
5    (ii) 5% of the taxpayer's net income for the period after
6    December 31, 2010, as calculated under Section 202.5.
7    (Blank).
8        (5) In the case of an individual, trust, or estate, for
9    taxable years beginning on or after January 1, 2011, and
10    ending prior to January 1, 2015, an amount equal to 5% of
11    the taxpayer's net income for the taxable year. (Blank).
12        (5.1) In the case of an individual, trust, or estate,
13    for taxable years beginning prior to January 1, 2015, and
14    ending after December 31, 2014, an amount equal to the sum
15    of (i) 5% of the taxpayer's net income for the period prior
16    to January 1, 2015, as calculated under Section 202.5, and
17    (ii) 4% of the taxpayer's net income for the period after
18    December 31, 2014, as calculated under Section 202.5.
19        (5.2) In the case of an individual, trust, or estate,
20    for taxable years beginning on or after January 1, 2015,
21    and ending prior to January 1, 2025, an amount equal to 4%
22    of the taxpayer's net income for the taxable year.
23        (5.3) In the case of an individual, trust, or estate,
24    for taxable years beginning prior to January 1, 2025, and
25    ending after December 31, 2024, an amount equal to the sum
26    of (i) 4% of the taxpayer's net income for the period prior

 

 

09600SB2505ham002- 10 -LRB096 16340 HLH 44936 a

1    to January 1, 2025, as calculated under Section 202.5, and
2    (ii) 3.5% of the taxpayer's net income for the period after
3    December 31, 2024, as calculated under Section 202.5.
4        (5.4) In the case of an individual, trust, or estate,
5    for taxable years beginning on or after January 1, 2025, an
6    amount equal to 3.5% of the taxpayer's net income for the
7    taxable year.
8        (6) In the case of a corporation, for taxable years
9    ending prior to July 1, 1989, an amount equal to 4% of the
10    taxpayer's net income for the taxable year.
11        (7) In the case of a corporation, for taxable years
12    beginning prior to July 1, 1989 and ending after June 30,
13    1989, an amount equal to the sum of (i) 4% of the
14    taxpayer's net income for the period prior to July 1, 1989,
15    as calculated under Section 202.3, and (ii) 4.8% of the
16    taxpayer's net income for the period after June 30, 1989,
17    as calculated under Section 202.3.
18        (8) In the case of a corporation, for taxable years
19    beginning after June 30, 1989, and ending prior to January
20    1, 2011, an amount equal to 4.8% of the taxpayer's net
21    income for the taxable year.
22        (9) In the case of a corporation, for taxable years
23    beginning prior to January 1, 2011, and ending after
24    December 31, 2010, an amount equal to the sum of (i) 4.8%
25    of the taxpayer's net income for the period prior to
26    January 1, 2011, as calculated under Section 202.5, and

 

 

09600SB2505ham002- 11 -LRB096 16340 HLH 44936 a

1    (ii) 7% of the taxpayer's net income for the period after
2    December 31, 2010, as calculated under Section 202.5.
3        (10) In the case of a corporation, for taxable years
4    beginning on or after January 1, 2011, and ending prior to
5    January 1, 2015, an amount equal to 7% of the taxpayer's
6    net income for the taxable year.
7        (11) In the case of a corporation, for taxable years
8    beginning prior to January 1, 2015, and ending after
9    December 31, 2014, an amount equal to the sum of (i) 7% of
10    the taxpayer's net income for the period prior to January
11    1, 2015, as calculated under Section 202.5, and (ii) 5.6%
12    of the taxpayer's net income for the period after December
13    31, 2014, as calculated under Section 202.5.
14        (12) In the case of a corporation, for taxable years
15    beginning on or after January 1, 2015, and ending prior to
16    January 1, 2025, an amount equal to 5.6% of the taxpayer's
17    net income for the taxable year.
18        (13) In the case of a corporation, for taxable years
19    beginning prior to January 1, 2025, and ending after
20    December 31, 2024, an amount equal to the sum of (i) 5.6%
21    of the taxpayer's net income for the period prior to
22    January 1, 2025, as calculated under Section 202.5, and
23    (ii) 4.9% of the taxpayer's net income for the period after
24    December 31, 2024, as calculated under Section 202.5.
25        (14) In the case of a corporation, for taxable years
26    beginning on or after January 1, 2025, an amount equal to

 

 

09600SB2505ham002- 12 -LRB096 16340 HLH 44936 a

1    4.9% of the taxpayer's net income for the taxable year.
2    The rates under this subsection (b) are subject to the
3provisions of Section 201.5.
4    (c) Personal Property Tax Replacement Income Tax.
5Beginning on July 1, 1979 and thereafter, in addition to such
6income tax, there is also hereby imposed the Personal Property
7Tax Replacement Income Tax measured by net income on every
8corporation (including Subchapter S corporations), partnership
9and trust, for each taxable year ending after June 30, 1979.
10Such taxes are imposed on the privilege of earning or receiving
11income in or as a resident of this State. The Personal Property
12Tax Replacement Income Tax shall be in addition to the income
13tax imposed by subsections (a) and (b) of this Section and in
14addition to all other occupation or privilege taxes imposed by
15this State or by any municipal corporation or political
16subdivision thereof.
17    (d) Additional Personal Property Tax Replacement Income
18Tax Rates. The personal property tax replacement income tax
19imposed by this subsection and subsection (c) of this Section
20in the case of a corporation, other than a Subchapter S
21corporation and except as adjusted by subsection (d-1), shall
22be an additional amount equal to 2.85% of such taxpayer's net
23income for the taxable year, except that beginning on January
241, 1981, and thereafter, the rate of 2.85% specified in this
25subsection shall be reduced to 2.5%, and in the case of a
26partnership, trust or a Subchapter S corporation shall be an

 

 

09600SB2505ham002- 13 -LRB096 16340 HLH 44936 a

1additional amount equal to 1.5% of such taxpayer's net income
2for the taxable year.
3    (d-1) Rate reduction for certain foreign insurers. In the
4case of a foreign insurer, as defined by Section 35A-5 of the
5Illinois Insurance Code, whose state or country of domicile
6imposes on insurers domiciled in Illinois a retaliatory tax
7(excluding any insurer whose premiums from reinsurance assumed
8are 50% or more of its total insurance premiums as determined
9under paragraph (2) of subsection (b) of Section 304, except
10that for purposes of this determination premiums from
11reinsurance do not include premiums from inter-affiliate
12reinsurance arrangements), beginning with taxable years ending
13on or after December 31, 1999, the sum of the rates of tax
14imposed by subsections (b) and (d) shall be reduced (but not
15increased) to the rate at which the total amount of tax imposed
16under this Act, net of all credits allowed under this Act,
17shall equal (i) the total amount of tax that would be imposed
18on the foreign insurer's net income allocable to Illinois for
19the taxable year by such foreign insurer's state or country of
20domicile if that net income were subject to all income taxes
21and taxes measured by net income imposed by such foreign
22insurer's state or country of domicile, net of all credits
23allowed or (ii) a rate of zero if no such tax is imposed on such
24income by the foreign insurer's state of domicile. For the
25purposes of this subsection (d-1), an inter-affiliate includes
26a mutual insurer under common management.

 

 

09600SB2505ham002- 14 -LRB096 16340 HLH 44936 a

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

 

 

09600SB2505ham002- 15 -LRB096 16340 HLH 44936 a

1Section 250.
2    (e) Investment credit. A taxpayer shall be allowed a credit
3against the Personal Property Tax Replacement Income Tax for
4investment in qualified property.
5        (1) A taxpayer shall be allowed a credit equal to .5%
6    of the basis of qualified property placed in service during
7    the taxable year, provided such property is placed in
8    service on or after July 1, 1984. There shall be allowed an
9    additional credit equal to .5% of the basis of qualified
10    property placed in service during the taxable year,
11    provided such property is placed in service on or after
12    July 1, 1986, and the taxpayer's base employment within
13    Illinois has increased by 1% or more over the preceding
14    year as determined by the taxpayer's employment records
15    filed with the Illinois Department of Employment Security.
16    Taxpayers who are new to Illinois shall be deemed to have
17    met the 1% growth in base employment for the first year in
18    which they file employment records with the Illinois
19    Department of Employment Security. The provisions added to
20    this Section by Public Act 85-1200 (and restored by Public
21    Act 87-895) shall be construed as declaratory of existing
22    law and not as a new enactment. If, in any year, the
23    increase in base employment within Illinois over the
24    preceding year is less than 1%, the additional credit shall
25    be limited to that percentage times a fraction, the
26    numerator of which is .5% and the denominator of which is

 

 

09600SB2505ham002- 16 -LRB096 16340 HLH 44936 a

1    1%, but shall not exceed .5%. The investment credit shall
2    not be allowed to the extent that it would reduce a
3    taxpayer's liability in any tax year below zero, nor may
4    any credit for qualified property be allowed for any year
5    other than the year in which the property was placed in
6    service in Illinois. For tax years ending on or after
7    December 31, 1987, and on or before December 31, 1988, the
8    credit shall be allowed for the tax year in which the
9    property is placed in service, or, if the amount of the
10    credit exceeds the tax liability for that year, whether it
11    exceeds the original liability or the liability as later
12    amended, such excess may be carried forward and applied to
13    the tax liability of the 5 taxable years following the
14    excess credit years if the taxpayer (i) makes investments
15    which cause the creation of a minimum of 2,000 full-time
16    equivalent jobs in Illinois, (ii) is located in an
17    enterprise zone established pursuant to the Illinois
18    Enterprise Zone Act and (iii) is certified by the
19    Department of Commerce and Community Affairs (now
20    Department of Commerce and Economic Opportunity) as
21    complying with the requirements specified in clause (i) and
22    (ii) by July 1, 1986. The Department of Commerce and
23    Community Affairs (now Department of Commerce and Economic
24    Opportunity) shall notify the Department of Revenue of all
25    such certifications immediately. For tax years ending
26    after December 31, 1988, the credit shall be allowed for

 

 

09600SB2505ham002- 17 -LRB096 16340 HLH 44936 a

1    the tax year in which the property is placed in service,
2    or, if the amount of the credit exceeds the tax liability
3    for that year, whether it exceeds the original liability or
4    the liability as later amended, such excess may be carried
5    forward and applied to the tax liability of the 5 taxable
6    years following the excess credit years. The credit shall
7    be 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, earlier credit
10    shall be applied first.
11        (2) The term "qualified property" means property
12    which:
13            (A) is tangible, whether new or used, including
14        buildings and structural components of buildings and
15        signs that are real property, but not including land or
16        improvements to real property that are not a structural
17        component of a building such as landscaping, sewer
18        lines, local access roads, fencing, parking lots, and
19        other appurtenances;
20            (B) is depreciable pursuant to Section 167 of the
21        Internal Revenue Code, except that "3-year property"
22        as defined in Section 168(c)(2)(A) of that Code is not
23        eligible for the credit provided by this subsection
24        (e);
25            (C) is acquired by purchase as defined in Section
26        179(d) of the Internal Revenue Code;

 

 

09600SB2505ham002- 18 -LRB096 16340 HLH 44936 a

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

 

 

09600SB2505ham002- 19 -LRB096 16340 HLH 44936 a

1    taxable years ending after December 31, 2008, does not
2    include the generation, transmission, or distribution of
3    electricity.
4        (4) The basis of qualified property shall be the basis
5    used to compute the depreciation deduction for federal
6    income tax purposes.
7        (5) If the basis of the property for federal income tax
8    depreciation purposes is increased after it has been placed
9    in service in Illinois 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        (6) The term "placed in service" shall have the same
13    meaning as under Section 46 of the Internal Revenue Code.
14        (7) 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 Illinois within 48
18    months after being placed in service, the Personal Property
19    Tax Replacement Income Tax for such taxable year shall be
20    increased. Such increase shall be determined by (i)
21    recomputing the investment credit which would have been
22    allowed for the year in which credit for such property was
23    originally allowed by eliminating such property from such
24    computation and, (ii) subtracting such recomputed credit
25    from the amount of credit previously allowed. For the
26    purposes of this paragraph (7), a reduction of the basis of

 

 

09600SB2505ham002- 20 -LRB096 16340 HLH 44936 a

1    qualified property resulting from a redetermination of the
2    purchase price shall be deemed a disposition of qualified
3    property to the extent of such reduction.
4        (8) Unless the investment credit is extended by law,
5    the basis of qualified property shall not include costs
6    incurred after December 31, 2013, except for costs incurred
7    pursuant to a binding contract entered into on or before
8    December 31, 2013.
9        (9) Each taxable year ending before December 31, 2000,
10    a partnership may elect to pass through to its partners the
11    credits to which the partnership is entitled under this
12    subsection (e) for the taxable year. A partner may use the
13    credit allocated to him or her under this paragraph only
14    against the tax imposed in subsections (c) and (d) of this
15    Section. If the partnership makes that election, those
16    credits shall be allocated among the partners in the
17    partnership in accordance with the rules set forth in
18    Section 704(b) of the Internal Revenue Code, and the rules
19    promulgated under that Section, and the allocated amount of
20    the credits shall be allowed to the partners for that
21    taxable year. The partnership shall make this election on
22    its Personal Property Tax Replacement Income Tax return for
23    that taxable year. The election to pass through the credits
24    shall be irrevocable.
25        For taxable years ending on or after December 31, 2000,
26    a partner that qualifies its partnership for a subtraction

 

 

09600SB2505ham002- 21 -LRB096 16340 HLH 44936 a

1    under subparagraph (I) of paragraph (2) of subsection (d)
2    of Section 203 or a shareholder that qualifies a Subchapter
3    S corporation for a subtraction under subparagraph (S) of
4    paragraph (2) of subsection (b) of Section 203 shall be
5    allowed a credit under this subsection (e) equal to its
6    share of the credit earned under this subsection (e) during
7    the taxable year by the partnership or Subchapter S
8    corporation, determined in accordance with the
9    determination of income and distributive share of income
10    under Sections 702 and 704 and Subchapter S of the Internal
11    Revenue Code. This paragraph is exempt from the provisions
12    of Section 250.
13    (f) Investment credit; Enterprise Zone; River Edge
14Redevelopment Zone.
15        (1) A taxpayer shall be allowed a credit against the
16    tax imposed by subsections (a) and (b) of this Section for
17    investment in qualified property which is placed in service
18    in an Enterprise Zone created pursuant to the Illinois
19    Enterprise Zone Act or, for property placed in service on
20    or after July 1, 2006, a River Edge Redevelopment Zone
21    established pursuant to the River Edge Redevelopment Zone
22    Act. For partners, shareholders of Subchapter S
23    corporations, and owners of limited liability companies,
24    if the liability company is treated as a partnership for
25    purposes of federal and State income taxation, there shall
26    be allowed a credit under this subsection (f) to be

 

 

09600SB2505ham002- 22 -LRB096 16340 HLH 44936 a

1    determined in accordance with the determination of income
2    and distributive share of income under Sections 702 and 704
3    and Subchapter S of the Internal Revenue Code. The credit
4    shall be .5% of the basis for such property. The credit
5    shall be available only in the taxable year in which the
6    property is placed in service in the Enterprise Zone or
7    River Edge Redevelopment Zone and shall not be allowed to
8    the extent that it would reduce a taxpayer's liability for
9    the tax imposed by subsections (a) and (b) of this Section
10    to below zero. For tax years ending on or after December
11    31, 1985, the credit shall be allowed for the tax year in
12    which the property is placed in service, or, if the amount
13    of the credit exceeds the tax liability for that year,
14    whether it exceeds the original liability or the liability
15    as later amended, such excess may be carried forward and
16    applied to the tax liability of the 5 taxable years
17    following the excess credit year. The credit shall be
18    applied to the earliest year for which there is a
19    liability. If there is credit from more than one tax year
20    that is available to offset a liability, the credit
21    accruing first in time shall be applied first.
22        (2) The term qualified property means property which:
23            (A) is tangible, whether new or used, including
24        buildings and structural components of buildings;
25            (B) is depreciable pursuant to Section 167 of the
26        Internal Revenue Code, except that "3-year property"

 

 

09600SB2505ham002- 23 -LRB096 16340 HLH 44936 a

1        as defined in Section 168(c)(2)(A) of that Code is not
2        eligible for the credit provided by this subsection
3        (f);
4            (C) is acquired by purchase as defined in Section
5        179(d) of the Internal Revenue Code;
6            (D) is used in the Enterprise Zone or River Edge
7        Redevelopment Zone by the taxpayer; and
8            (E) has not been previously used in Illinois in
9        such a manner and by such a person as would qualify for
10        the credit provided by this subsection (f) or
11        subsection (e).
12        (3) The basis of qualified property shall be the basis
13    used to compute the depreciation deduction for federal
14    income tax purposes.
15        (4) If the basis of the property for federal income tax
16    depreciation purposes is increased after it has been placed
17    in service in the Enterprise Zone or River Edge
18    Redevelopment Zone by the taxpayer, the amount of such
19    increase shall be deemed property placed in service on the
20    date of such increase in basis.
21        (5) The term "placed in service" shall have the same
22    meaning as under Section 46 of the Internal Revenue Code.
23        (6) If during any taxable year, any property ceases to
24    be qualified property in the hands of the taxpayer within
25    48 months after being placed in service, or the situs of
26    any qualified property is moved outside the Enterprise Zone

 

 

09600SB2505ham002- 24 -LRB096 16340 HLH 44936 a

1    or River Edge Redevelopment Zone within 48 months after
2    being placed in service, the tax imposed under subsections
3    (a) and (b) of this Section for such taxable year shall be
4    increased. Such increase shall be determined by (i)
5    recomputing the investment credit which would have been
6    allowed for the year in which credit for such property was
7    originally allowed by eliminating such property from such
8    computation, and (ii) subtracting such recomputed credit
9    from the amount of credit previously allowed. For the
10    purposes of this paragraph (6), a reduction of the basis of
11    qualified property resulting from a redetermination of the
12    purchase price shall be deemed a disposition of qualified
13    property to the extent of such reduction.
14        (7) There shall be allowed an additional credit equal
15    to 0.5% of the basis of qualified property placed in
16    service during the taxable year in a River Edge
17    Redevelopment Zone, provided such property is placed in
18    service on or after July 1, 2006, and the taxpayer's base
19    employment within Illinois has increased by 1% or more over
20    the preceding year as determined by the taxpayer's
21    employment records filed with the Illinois Department of
22    Employment Security. Taxpayers who are new to Illinois
23    shall be deemed to have met the 1% growth in base
24    employment for the first year in which they file employment
25    records with the Illinois Department of Employment
26    Security. If, in any year, the increase in base employment

 

 

09600SB2505ham002- 25 -LRB096 16340 HLH 44936 a

1    within Illinois over the preceding year is less than 1%,
2    the additional credit shall be limited to that percentage
3    times a fraction, the numerator of which is 0.5% and the
4    denominator of which is 1%, but shall not exceed 0.5%.
5    (g) Jobs Tax Credit; Enterprise Zone, River Edge
6Redevelopment Zone, and Foreign Trade Zone or Sub-Zone.
7        (1) A taxpayer conducting a trade or business in an
8    enterprise zone or a High Impact Business designated by the
9    Department of Commerce and Economic Opportunity or for
10    taxable years ending on or after December 31, 2006, in a
11    River Edge Redevelopment Zone conducting a trade or
12    business in a federally designated Foreign Trade Zone or
13    Sub-Zone shall be allowed a credit against the tax imposed
14    by subsections (a) and (b) of this Section in the amount of
15    $500 per eligible employee hired to work in the zone during
16    the taxable year.
17        (2) To qualify for the credit:
18            (A) the taxpayer must hire 5 or more eligible
19        employees to work in an enterprise zone, River Edge
20        Redevelopment Zone, or federally designated Foreign
21        Trade Zone or Sub-Zone during the taxable year;
22            (B) the taxpayer's total employment within the
23        enterprise zone, River Edge Redevelopment Zone, or
24        federally designated Foreign Trade Zone or Sub-Zone
25        must increase by 5 or more full-time employees beyond
26        the total employed in that zone at the end of the

 

 

09600SB2505ham002- 26 -LRB096 16340 HLH 44936 a

1        previous tax year for which a jobs tax credit under
2        this Section was taken, or beyond the total employed by
3        the taxpayer as of December 31, 1985, whichever is
4        later; and
5            (C) the eligible employees must be employed 180
6        consecutive days in order to be deemed hired for
7        purposes of this subsection.
8        (3) An "eligible employee" means an employee who is:
9            (A) Certified by the Department of Commerce and
10        Economic Opportunity as "eligible for services"
11        pursuant to regulations promulgated in accordance with
12        Title II of the Job Training Partnership Act, Training
13        Services for the Disadvantaged or Title III of the Job
14        Training Partnership Act, Employment and Training
15        Assistance for Dislocated Workers Program.
16            (B) Hired after the enterprise zone, River Edge
17        Redevelopment Zone, or federally designated Foreign
18        Trade Zone or Sub-Zone was designated or the trade or
19        business was located in that zone, whichever is later.
20            (C) Employed in the enterprise zone, River Edge
21        Redevelopment Zone, or Foreign Trade Zone or Sub-Zone.
22        An employee is employed in an enterprise zone or
23        federally designated Foreign Trade Zone or Sub-Zone if
24        his services are rendered there or it is the base of
25        operations for the services performed.
26            (D) A full-time employee working 30 or more hours

 

 

09600SB2505ham002- 27 -LRB096 16340 HLH 44936 a

1        per week.
2        (4) For tax years ending on or after December 31, 1985
3    and prior to December 31, 1988, the credit shall be allowed
4    for the tax year in which the eligible employees are hired.
5    For tax years ending on or after December 31, 1988, the
6    credit shall be allowed for the tax year immediately
7    following the tax year in which the eligible employees are
8    hired. If the amount of the credit exceeds the tax
9    liability for that year, whether it exceeds the original
10    liability or the liability as later amended, such excess
11    may be carried forward and applied to the tax liability of
12    the 5 taxable years following the excess credit year. The
13    credit shall be applied to the earliest year for which
14    there is a liability. If there is credit from more than one
15    tax year that is available to offset a liability, earlier
16    credit shall be applied first.
17        (5) The Department of Revenue shall promulgate such
18    rules and regulations as may be deemed necessary to carry
19    out the purposes of this subsection (g).
20        (6) The credit shall be available for eligible
21    employees hired on or after January 1, 1986.
22    (h) Investment credit; High Impact Business.
23        (1) Subject to subsections (b) and (b-5) of Section 5.5
24    of the Illinois Enterprise Zone Act, a taxpayer shall be
25    allowed a credit against the tax imposed by subsections (a)
26    and (b) of this Section for investment in qualified

 

 

09600SB2505ham002- 28 -LRB096 16340 HLH 44936 a

1    property which is placed in service by a Department of
2    Commerce and Economic Opportunity designated High Impact
3    Business. The credit shall be .5% of the basis for such
4    property. The credit shall not be available (i) until the
5    minimum investments in qualified property set forth in
6    subdivision (a)(3)(A) of Section 5.5 of the Illinois
7    Enterprise Zone Act have been satisfied or (ii) until the
8    time authorized in subsection (b-5) of the Illinois
9    Enterprise Zone Act for entities designated as High Impact
10    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
11    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
12    Act, and shall not be allowed to the extent that it would
13    reduce a taxpayer's liability for the tax imposed by
14    subsections (a) and (b) of this Section to below zero. The
15    credit applicable to such investments shall be taken in the
16    taxable year in which such investments have been completed.
17    The credit for additional investments beyond the minimum
18    investment by a designated high impact business authorized
19    under subdivision (a)(3)(A) of Section 5.5 of the Illinois
20    Enterprise Zone Act shall be available only in the taxable
21    year in which the property is placed in service and shall
22    not be allowed to the extent that it would reduce a
23    taxpayer's liability for the tax imposed by subsections (a)
24    and (b) of this Section to below zero. For tax years ending
25    on or after December 31, 1987, the credit shall be allowed
26    for the tax year in which the property is placed in

 

 

09600SB2505ham002- 29 -LRB096 16340 HLH 44936 a

1    service, or, if the amount of the credit exceeds the tax
2    liability for that year, whether it exceeds the original
3    liability or the liability as later amended, such excess
4    may be carried forward and applied to the tax liability of
5    the 5 taxable years following the excess credit year. The
6    credit shall be applied to the earliest year for which
7    there is a liability. If there is credit from more than one
8    tax year that is available to offset a liability, the
9    credit accruing first in time shall be applied first.
10        Changes made in this subdivision (h)(1) by Public Act
11    88-670 restore changes made by Public Act 85-1182 and
12    reflect existing law.
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        (h);
21            (C) is acquired by purchase as defined in Section
22        179(d) of the Internal Revenue Code; and
23            (D) is not eligible for the Enterprise Zone
24        Investment Credit provided by subsection (f) of this
25        Section.
26        (3) The basis of qualified property shall be the basis

 

 

09600SB2505ham002- 30 -LRB096 16340 HLH 44936 a

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

 

 

09600SB2505ham002- 31 -LRB096 16340 HLH 44936 a

1    disposition of qualified property to the extent of such
2    reduction.
3        (7) Beginning with tax years ending after December 31,
4    1996, if a taxpayer qualifies for the credit under this
5    subsection (h) and thereby is granted a tax abatement and
6    the taxpayer relocates its entire facility in violation of
7    the explicit terms and length of the contract under Section
8    18-183 of the Property Tax Code, the tax imposed under
9    subsections (a) and (b) of this Section shall be increased
10    for the taxable year in which the taxpayer relocated its
11    facility by an amount equal to the amount of credit
12    received by the taxpayer under this subsection (h).
13    (i) Credit for Personal Property Tax Replacement Income
14Tax. For tax years ending prior to December 31, 2003, a credit
15shall be allowed against the tax imposed by subsections (a) and
16(b) of this Section for the tax imposed by subsections (c) and
17(d) of this Section. This credit shall be computed by
18multiplying the tax imposed by subsections (c) and (d) of this
19Section by a fraction, the numerator of which is base income
20allocable to Illinois and the denominator of which is Illinois
21base income, and further multiplying the product by the tax
22rate imposed by subsections (a) and (b) of this Section.
23    Any credit earned on or after December 31, 1986 under this
24subsection which is unused in the year the credit is computed
25because it exceeds the tax liability imposed by subsections (a)
26and (b) for that year (whether it exceeds the original

 

 

09600SB2505ham002- 32 -LRB096 16340 HLH 44936 a

1liability or the liability as later amended) may be carried
2forward and applied to the tax liability imposed by subsections
3(a) and (b) of the 5 taxable years following the excess credit
4year, provided that no credit may be carried forward to any
5year ending on or after December 31, 2003. This credit shall be
6applied first to the earliest year for which there is a
7liability. If there is a credit under this subsection from more
8than one tax year that is available to offset a liability the
9earliest credit arising under this subsection shall be applied
10first.
11    If, during any taxable year ending on or after December 31,
121986, the tax imposed by subsections (c) and (d) of this
13Section for which a taxpayer has claimed a credit under this
14subsection (i) is reduced, the amount of credit for such tax
15shall also be reduced. Such reduction shall be determined by
16recomputing the credit to take into account the reduced tax
17imposed by subsections (c) and (d). If any portion of the
18reduced amount of credit has been carried to a different
19taxable year, an amended return shall be filed for such taxable
20year to reduce the amount of credit claimed.
21    (j) Training expense credit. Beginning with tax years
22ending on or after December 31, 1986 and prior to December 31,
232003, a taxpayer shall be allowed a credit against the tax
24imposed by subsections (a) and (b) under this Section for all
25amounts paid or accrued, on behalf of all persons employed by
26the taxpayer in Illinois or Illinois residents employed outside

 

 

09600SB2505ham002- 33 -LRB096 16340 HLH 44936 a

1of Illinois by a taxpayer, for educational or vocational
2training in semi-technical or technical fields or semi-skilled
3or skilled fields, which were deducted from gross income in the
4computation of taxable income. The credit against the tax
5imposed by subsections (a) and (b) shall be 1.6% of such
6training expenses. For partners, shareholders of subchapter S
7corporations, and owners of limited liability companies, if the
8liability company is treated as a partnership for purposes of
9federal and State income taxation, there shall be allowed a
10credit under this subsection (j) to be determined in accordance
11with the determination of income and distributive share of
12income under Sections 702 and 704 and subchapter S of the
13Internal Revenue Code.
14    Any credit allowed under this subsection which is unused in
15the year the credit is earned may be carried forward to each of
16the 5 taxable years following the year for which the credit is
17first computed until it is used. This credit shall be applied
18first to the earliest year for which there is a liability. If
19there is a credit under this subsection from more than one tax
20year that is available to offset a liability the earliest
21credit arising under this subsection shall be applied first. No
22carryforward credit may be claimed in any tax year ending on or
23after December 31, 2003.
24    (k) Research and development credit.
25    For tax years ending after July 1, 1990 and prior to
26December 31, 2003, and beginning again for tax years ending on

 

 

09600SB2505ham002- 34 -LRB096 16340 HLH 44936 a

1or after December 31, 2004, and ending prior to January 1,
22011, a taxpayer shall be allowed a credit against the tax
3imposed by subsections (a) and (b) of this Section for
4increasing research activities in this State. The credit
5allowed against the tax imposed by subsections (a) and (b)
6shall be equal to 6 1/2% of the qualifying expenditures for
7increasing research activities in this State. For partners,
8shareholders of subchapter S corporations, and owners of
9limited liability companies, if the liability company is
10treated as a partnership for purposes of federal and State
11income taxation, there shall be allowed a credit under this
12subsection to be determined in accordance with the
13determination of income and distributive share of income under
14Sections 702 and 704 and subchapter S of the Internal Revenue
15Code.
16    For purposes of this subsection, "qualifying expenditures"
17means the qualifying expenditures as defined for the federal
18credit for increasing research activities which would be
19allowable under Section 41 of the Internal Revenue Code and
20which are conducted in this State, "qualifying expenditures for
21increasing research activities in this State" means the excess
22of qualifying expenditures for the taxable year in which
23incurred over qualifying expenditures for the base period,
24"qualifying expenditures for the base period" means the average
25of the qualifying expenditures for each year in the base
26period, and "base period" means the 3 taxable years immediately

 

 

09600SB2505ham002- 35 -LRB096 16340 HLH 44936 a

1preceding the taxable year for which the determination is being
2made.
3    Any credit in excess of the tax liability for the taxable
4year may be carried forward. A taxpayer may elect to have the
5unused credit shown on its final completed return carried over
6as a credit against the tax liability for the following 5
7taxable years or until it has been fully used, whichever occurs
8first; provided that no credit earned in a tax year ending
9prior to December 31, 2003 may be carried forward to any year
10ending on or after December 31, 2003, and no credit may be
11carried forward to any taxable year ending on or after January
121, 2011.
13    If an unused credit is carried forward to a given year from
142 or more earlier years, that credit arising in the earliest
15year will be applied first against the tax liability for the
16given year. If a tax liability for the given year still
17remains, the credit from the next earliest year will then be
18applied, and so on, until all credits have been used or no tax
19liability for the given year remains. Any remaining unused
20credit or credits then will be carried forward to the next
21following year in which a tax liability is incurred, except
22that no credit can be carried forward to a year which is more
23than 5 years after the year in which the expense for which the
24credit is given was incurred.
25    No inference shall be drawn from this amendatory Act of the
2691st General Assembly in construing this Section for taxable

 

 

09600SB2505ham002- 36 -LRB096 16340 HLH 44936 a

1years beginning before January 1, 1999.
2    (l) Environmental Remediation Tax Credit.
3        (i) For tax years ending after December 31, 1997 and on
4    or before December 31, 2001, a taxpayer shall be allowed a
5    credit against the tax imposed by subsections (a) and (b)
6    of this Section for certain amounts paid for unreimbursed
7    eligible remediation costs, as specified in this
8    subsection. For purposes of this Section, "unreimbursed
9    eligible remediation costs" means costs approved by the
10    Illinois Environmental Protection Agency ("Agency") under
11    Section 58.14 of the Environmental Protection Act that were
12    paid in performing environmental remediation at a site for
13    which a No Further Remediation Letter was issued by the
14    Agency and recorded under Section 58.10 of the
15    Environmental Protection Act. The credit must be claimed
16    for the taxable year in which Agency approval of the
17    eligible remediation costs is granted. The credit is not
18    available to any taxpayer if the taxpayer or any related
19    party caused or contributed to, in any material respect, a
20    release of regulated substances on, in, or under the site
21    that was identified and addressed by the remedial action
22    pursuant to the Site Remediation Program of the
23    Environmental Protection Act. After the Pollution Control
24    Board rules are adopted pursuant to the Illinois
25    Administrative Procedure Act for the administration and
26    enforcement of Section 58.9 of the Environmental

 

 

09600SB2505ham002- 37 -LRB096 16340 HLH 44936 a

1    Protection Act, determinations as to credit availability
2    for purposes of this Section shall be made consistent with
3    those rules. For purposes of this Section, "taxpayer"
4    includes a person whose tax attributes the taxpayer has
5    succeeded to under Section 381 of the Internal Revenue Code
6    and "related party" includes the persons disallowed a
7    deduction for losses by paragraphs (b), (c), and (f)(1) of
8    Section 267 of the Internal Revenue Code by virtue of being
9    a related taxpayer, as well as any of its partners. The
10    credit allowed against the tax imposed by subsections (a)
11    and (b) shall be equal to 25% of the unreimbursed eligible
12    remediation costs in excess of $100,000 per site, except
13    that the $100,000 threshold shall not apply to any site
14    contained in an enterprise zone as determined by the
15    Department of Commerce and Community Affairs (now
16    Department of Commerce and Economic Opportunity). The
17    total credit allowed shall not exceed $40,000 per year with
18    a maximum total of $150,000 per site. For partners and
19    shareholders of subchapter S corporations, there shall be
20    allowed a credit under this subsection to be determined in
21    accordance with the determination of income and
22    distributive share of income under Sections 702 and 704 and
23    subchapter S of the Internal Revenue Code.
24        (ii) A credit allowed under this subsection that is
25    unused in the year the credit is earned may be carried
26    forward to each of the 5 taxable years following the year

 

 

09600SB2505ham002- 38 -LRB096 16340 HLH 44936 a

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

 

 

09600SB2505ham002- 39 -LRB096 16340 HLH 44936 a

1ending after December 31, 1999, a taxpayer who is the custodian
2of one or more qualifying pupils shall be allowed a credit
3against the tax imposed by subsections (a) and (b) of this
4Section for qualified education expenses incurred on behalf of
5the qualifying pupils. The credit shall be equal to 25% of
6qualified education expenses, but in no event may the total
7credit under this subsection claimed by a family that is the
8custodian of qualifying pupils exceed $500. In no event shall a
9credit under this subsection reduce the taxpayer's liability
10under this Act to less than zero. This subsection is exempt
11from the provisions of Section 250 of this Act.
12    For purposes of this subsection:
13    "Qualifying pupils" means individuals who (i) are
14residents of the State of Illinois, (ii) are under the age of
1521 at the close of the school year for which a credit is
16sought, and (iii) during the school year for which a credit is
17sought were full-time pupils enrolled in a kindergarten through
18twelfth grade education program at any school, as defined in
19this subsection.
20    "Qualified education expense" means the amount incurred on
21behalf of a qualifying pupil in excess of $250 for tuition,
22book fees, and lab fees at the school in which the pupil is
23enrolled during the regular school year.
24    "School" means any public or nonpublic elementary or
25secondary school in Illinois that is in compliance with Title
26VI of the Civil Rights Act of 1964 and attendance at which

 

 

09600SB2505ham002- 40 -LRB096 16340 HLH 44936 a

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

 

 

09600SB2505ham002- 41 -LRB096 16340 HLH 44936 a

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

 

 

09600SB2505ham002- 42 -LRB096 16340 HLH 44936 a

1    offset a liability, the earliest credit arising under this
2    subsection shall be applied first. A credit allowed under
3    this subsection may be sold to a buyer as part of a sale of
4    all or part of the remediation site for which the credit
5    was granted. The purchaser of a remediation site and the
6    tax credit shall succeed to the unused credit and remaining
7    carry-forward period of the seller. To perfect the
8    transfer, the assignor shall record the transfer in the
9    chain of title for the site and provide written notice to
10    the Director of the Illinois Department of Revenue of the
11    assignor's intent to sell the remediation site and the
12    amount of the tax credit to be transferred as a portion of
13    the sale. In no event may a credit be transferred to any
14    taxpayer if the taxpayer or a related party would not be
15    eligible under the provisions of subsection (i).
16        (iii) For purposes of this Section, the term "site"
17    shall have the same meaning as under Section 58.2 of the
18    Environmental Protection Act.
19        (iv) This subsection is exempt from the provisions of
20    Section 250.
21(Source: P.A. 95-454, eff. 8-27-07; 96-115, eff. 7-31-09;
2296-116, eff. 7-31-09; 96-937, eff. 6-23-10; 96-1000, eff.
237-2-10.)
 
24    (35 ILCS 5/201.5 new)
25    Sec. 201.5. State spending limitation and tax reduction.

 

 

09600SB2505ham002- 43 -LRB096 16340 HLH 44936 a

1    (a) If, beginning in State fiscal year 2012 and continuing
2through State fiscal year 2015, State spending for any fiscal
3year exceeds the State spending limitation set forth in
4subsection (b) of this Section, then the tax rates set forth in
5subsection (b) of Section 201 of this Act shall be reduced,
6according to the procedures set forth in this Section, to 3% of
7the taxpayer's net income for individuals, trusts, and estates
8and to 4.8% of the taxpayer's net income for corporations. For
9all taxable years following the taxable year in which the rate
10has been reduced pursuant to this Section, the tax rate set
11forth in subsection (b) of Section 201 of this Act shall be 3%
12of the taxpayer's net income for individuals, trusts, and
13estates and 4.8% of the taxpayer's net income for corporations.
14    (b) The State spending limitation for fiscal years 2012
15through 2015 shall be as follows: (i) for fiscal year 2012,
16$36,818,000,000; (ii) for fiscal year 2013, $37,554,000,000;
17(iii) for fiscal year 2014, $38,305,000,000; and (iv) for
18fiscal year 2015, $39,072,000,000.
19    (c) Nothwithstanding any other provision of law to the
20contrary, the Auditor General shall examine each Public Act
21authorizing State spending from State general funds and prepare
22a report no later than 30 days after receiving notification of
23the Public Act from the Secretary of State or 60 days after the
24effective date of the Public Act, whichever is earlier. The
25Auditor General shall file the report with the Secretary of
26State and copies with the Governor, the State Treasurer, the

 

 

09600SB2505ham002- 44 -LRB096 16340 HLH 44936 a

1State Comptroller, the Senate, and the House of
2Representatives. The report shall indicate: (i) the amount of
3State spending set forth in the applicable Public Act; (ii) the
4total amount of State spending authorized by law for the
5applicable fiscal year as of the date of the report; and (iii)
6whether State spending exceeds the State spending limitation
7set forth in subsection (b). The Auditor General may examine
8multiple Public Acts in one consolidated report, provided that
9each Public Act is examined within the time period mandated by
10this subsection (c). The Auditor General shall issue reports in
11accordance with this Section through June 30, 2015 or the
12effective date of a reduction in the rate of tax imposed by
13subsections (a) and (b) of Section 201 of this Act pursuant to
14this Section, whichever is earlier.
15    At the request of the Auditor General, each State agency
16shall, without delay, make available to the Auditor General or
17his or her designated representative any record or information
18requested and shall provide for examination or copying all
19records, accounts, papers, reports, vouchers, correspondence,
20books and other documentation in the custody of that agency,
21including information stored in electronic data processing
22systems, which is related to or within the scope of a report
23prepared under this Section. The Auditor General shall report
24to the Governor each instance in which a State agency fails to
25cooperate promptly and fully with his or her office as required
26by this Section.

 

 

09600SB2505ham002- 45 -LRB096 16340 HLH 44936 a

1    The Auditor General's report shall not be in the nature of
2a post-audit or examination and shall not lead to the issuance
3of an opinion as that term is defined in generally accepted
4government auditing standards.
5    (d) If the Auditor General reports that State spending has
6exceeded the State spending limitation set forth in subsection
7(b) and if the Governor has not been presented with a bill or
8bills passed by the General Assembly to reduce State spending
9to a level that does not exceed the State spending limitation
10within 45 calendar days of receipt of the Auditor General's
11report, then the Governor may, for the purpose of reducing
12State spending to a level that does not exceed the State
13spending limitation set forth in subsection (b), designate
14amounts to be set aside as a reserve from the amounts
15appropriated from the State general funds for all boards,
16commissions, agencies, institutions, authorities, colleges,
17universities, and bodies politic and corporate of the State,
18but not other constitutional officers, the legislative or
19judicial branch, the office of the Executive Inspector General,
20or the Executive Ethics Commission. Such a designation must be
21made within 15 calendar days after the end of that 45-day
22period. If the Governor designates amounts to be set aside as a
23reserve, the Governor shall give notice of the designation to
24the Auditor General, the State Treasurer, the State
25Comptroller, the Senate, and the House of Representatives. The
26amounts placed in reserves shall not be transferred, obligated,

 

 

09600SB2505ham002- 46 -LRB096 16340 HLH 44936 a

1encumbered, expended, or otherwise committed unless so
2authorized by law. Any amount placed in reserves is not State
3spending and shall not be considered when calculating the total
4amount of State spending. Any Public Act authorizing the use of
5amounts placed in reserve by the Governor is considered State
6spending, unless such Public Act authorizes the use of amounts
7placed in reserves in response to a fiscal emergency under
8subsection (g).
9    (e) If the Auditor General reports under subsection (c)
10that State spending has exceeded the State spending limitation
11set forth in subsection (b), then the Auditor General shall
12issue a supplemental report no sooner than the 61st day and no
13later than the 65th day after issuing the report pursuant to
14subsection (c). The supplemental report shall: (i) summarize
15details of actions taken by the General Assembly and the
16Governor after the issuance of the initial report to reduce
17State spending, if any, (ii) indicate whether the level of
18State spending has changed since the initial report, and (iii)
19indicate whether State spending exceeds the State spending
20limitation. The Auditor General shall file the report with the
21Secretary of State and copies with the Governor, the State
22Treasurer, the State Comptroller, the Senate, and the House of
23Representatives. If the supplemental report of the Auditor
24General provides that State spending exceeds the State spending
25limitation, then the rate of tax imposed by subsections (a) and
26(b) of Section 201 is reduced as provided in this Section

 

 

09600SB2505ham002- 47 -LRB096 16340 HLH 44936 a

1beginning on the first day of the first month to occur not less
2than 30 days after issuance of the supplemental report.
3    (f) For any taxable year in which the rates of tax have
4been reduced under this Section, the tax imposed by subsections
5(a) and (b) of Section 201 shall be determined as follows:
6        (1) In the case of an individual, trust, or estate, the
7    tax shall be imposed in an amount equal to the sum of (i)
8    the rate applicable to the taxpayer under subsection (b) of
9    Section 201 (without regard to the provisions of this
10    Section) times the taxpayer's net income for any portion of
11    the taxable year prior to the effective date of the
12    reduction and (ii) 3% of the taxpayer's net income for any
13    portion of the taxable year on or after the effective date
14    of the reduction.
15        (2) In the case of a corporation, the tax shall be
16    imposed in an amount equal to the sum of (i) the rate
17    applicable to the taxpayer under subsection (b) of Section
18    201 (without regard to the provisions of this Section)
19    times the taxpayer's net income for any portion of the
20    taxable year prior to the effective date of the reduction
21    and (ii) 4.8% of the taxpayer's net income for any portion
22    of the taxable year on or after the effective date of the
23    reduction.
24        (3) For any taxpayer for whom the rate has been reduced
25    under this Section for a portion of a taxable year, the
26    taxpayer shall determine the net income for each portion of

 

 

09600SB2505ham002- 48 -LRB096 16340 HLH 44936 a

1    the taxable year following the rules set forth in Section
2    202.5 of this Act, using the effective date of the rate
3    reduction rather than the January 1 dates found in that
4    Section, and the day before the effective date of the rate
5    reduction rather than the December 31 dates found in that
6    Section.
7        (4) If the rate applicable to the taxpayer under
8    subsection (b) of Section 201 (without regard to the
9    provisions of this Section) changes during a portion of the
10    taxable year to which that rate is applied under paragraphs
11    (1) or (2) of this subsection (f), the tax for that portion
12    of the taxable year for purposes of paragraph (1) or (2) of
13    this subsection (f) shall be determined as if that portion
14    of the taxable year were a separate taxable year, following
15    the rules set forth in Section 202.5 of this Act. If the
16    taxpayer elects to follow the rules set forth in subsection
17    (b) of Section 202.5, the taxpayer shall follow the rules
18    set forth in subsection (b) of Section 202.5 for all
19    purposes of this Section for that taxable year.
20    (g) Notwithstanding the State spending limitation set
21forth in subsection (b) of this Section, the Governor may
22declare a fiscal emergency by filing a declaration with the
23Secretary of State and copies with the State Treasurer, the
24State Comptroller, the Senate, and the House of
25Representatives. The declaration must be limited to only one
26State fiscal year, set forth compelling reasons for declaring a

 

 

09600SB2505ham002- 49 -LRB096 16340 HLH 44936 a

1fiscal emergency, and request a specific dollar amount. Unless,
2within 10 calendar days of receipt of the Governor's
3declaration, the State Comptroller or State Treasurer notifies
4the Senate and the House of Representatives that he or she does
5not concur in the Governor's declaration, State spending
6authorized by law to address the fiscal emergency in an amount
7no greater than the dollar amount specified in the declaration
8shall not be considered "State spending" for purposes of the
9State spending limitation.
10    (h) As used in this Section:
11    "State general funds" means the General Revenue Fund, the
12Common School Fund, the General Revenue Common School Special
13Account Fund, the Education Assistance Fund, and the Budget
14Stabilization Fund.
15    "State spending" means (i) the total amount authorized for
16spending by appropriation or statutory transfer from the State
17general funds in the applicable fiscal year, and (ii) any
18amounts the Governor places in reserves in accordance with
19subsection (d) that are subsequently released from reserves
20following authorization by a Public Act. For the purpose of
21this definition, "appropriation" means authority to spend
22money from a State general fund for a specific amount, purpose,
23and time period, including any supplemental appropriation or
24continuing appropriation, but does not include
25reappropriations from a previous fiscal year. For the purpose
26of this definition, "statutory transfer" means authority to

 

 

09600SB2505ham002- 50 -LRB096 16340 HLH 44936 a

1transfer funds from one State general fund to any other fund in
2the State Treasury, but does not include transfers made from
3one State general fund to another State general fund.
4    "State spending limitation" means the amount described in
5subsection (b) of this Section for the applicable fiscal year.
 
6    (35 ILCS 5/202.5 new)
7    Sec. 202.5. Net income attributable to the period beginning
8prior to January 1 of any year and ending after December 31 of
9the preceding year.
10    (a) In general. With respect to the taxable year of a
11taxpayer beginning prior to January 1 of any year and ending
12after December 31 of the preceding year, net income for the
13period after December 31 of the preceding year, is that amount
14that bears the same ratio to the taxpayer's net income for the
15entire taxable year as the number of days in that taxable year
16after December 31 bears to the total number of days in that
17taxable year, and the net income for the period prior to
18January 1 is that amount that bears the same ratio to the
19taxpayer's net income for the entire taxable year as the number
20of days in that taxable year prior to January 1 bears to the
21total number of days in that taxable year.
22    (b) Election to attribute income and deduction items
23specifically to the respective portions of a taxable year prior
24to January 1 of any year and after December 31 of the preceding
25year. In the case of a taxpayer with a taxable year beginning

 

 

09600SB2505ham002- 51 -LRB096 16340 HLH 44936 a

1prior to January 1 of any year and ending after December 31 of
2the preceding year, the taxpayer may elect, instead of the
3procedure established in subsection (a) of this Section, to
4determine net income on a specific accounting basis for the 2
5portions of the taxable year:
6        (1) from the beginning of the taxable year through
7    December 31; and
8        (2) from January 1 through the end of the taxable year.
9    The election provided by this subsection must be made in
10form and manner that the Department requires by rule, and must
11be made no later than the due date (including any extensions
12thereof) for the filing of the return for the taxable year, and
13is irrevocable.
14    (c) If the taxpayer elects specific accounting under
15subsection (b):
16        (1) there shall be taken into account in computing base
17    income for each of the 2 portions of the taxable year only
18    those items earned, received, paid, incurred or accrued in
19    each such period;
20        (2) for purposes of apportioning business income of the
21    taxpayer, the provisions in Article 3 shall be applied on
22    the basis of the taxpayer's full taxable year, without
23    regard to this Section;
24        (3) the net loss carryforward deduction for the taxable
25    year under Section 207 may not exceed combined net income
26    of both portions of the taxable year, and shall be used

 

 

09600SB2505ham002- 52 -LRB096 16340 HLH 44936 a

1    against the net income of the portion of the taxable year
2    from the beginning of the taxable year through December 31
3    before any remaining amount is used against the net income
4    of the latter portion of the taxable year.
 
5    (35 ILCS 5/207)  (from Ch. 120, par. 2-207)
6    Sec. 207. Net Losses.
7    (a) If after applying all of the (i) modifications provided
8for in paragraph (2) of Section 203(b), paragraph (2) of
9Section 203(c) and paragraph (2) of Section 203(d) and (ii) the
10allocation and apportionment provisions of Article 3 of this
11Act and subsection (c) of this Section, the taxpayer's net
12income results in a loss;
13        (1) for any taxable year ending prior to December 31,
14    1999, such loss shall be allowed as a carryover or
15    carryback deduction in the manner allowed under Section 172
16    of the Internal Revenue Code;
17        (2) for any taxable year ending on or after December
18    31, 1999 and prior to December 31, 2003, such loss shall be
19    allowed as a carryback to each of the 2 taxable years
20    preceding the taxable year of such loss and shall be a net
21    operating loss carryover to each of the 20 taxable years
22    following the taxable year of such loss; and
23        (3) for any taxable year ending on or after December
24    31, 2003, such loss shall be allowed as a net operating
25    loss carryover to each of the 12 taxable years following

 

 

09600SB2505ham002- 53 -LRB096 16340 HLH 44936 a

1    the taxable year of such loss, except as provided in
2    subsection (d).
3    (a-5) Election to relinquish carryback and order of
4application of losses.
5            (A) For losses incurred in tax years ending prior
6        to December 31, 2003, the taxpayer may elect to
7        relinquish the entire carryback period with respect to
8        such loss. Such election shall be made in the form and
9        manner prescribed by the Department and shall be made
10        by the due date (including extensions of time) for
11        filing the taxpayer's return for the taxable year in
12        which such loss is incurred, and such election, once
13        made, shall be irrevocable.
14            (B) The entire amount of such loss shall be carried
15        to the earliest taxable year to which such loss may be
16        carried. The amount of such loss which shall be carried
17        to each of the other taxable years shall be the excess,
18        if any, of the amount of such loss over the sum of the
19        deductions for carryback or carryover of such loss
20        allowable for each of the prior taxable years to which
21        such loss may be carried.
22    (b) Any loss determined under subsection (a) of this
23Section must be carried back or carried forward in the same
24manner for purposes of subsections (a) and (b) of Section 201
25of this Act as for purposes of subsections (c) and (d) of
26Section 201 of this Act.

 

 

09600SB2505ham002- 54 -LRB096 16340 HLH 44936 a

1    (c) Notwithstanding any other provision of this Act, for
2each taxable year ending on or after December 31, 2008, for
3purposes of computing the loss for the taxable year under
4subsection (a) of this Section and the deduction taken into
5account for the taxable year for a net operating loss carryover
6under paragraphs (1), (2), and (3) of subsection (a) of this
7Section, the loss and net operating loss carryover shall be
8reduced in an amount equal to the reduction to the net
9operating loss and net operating loss carryover to the taxable
10year, respectively, required under Section 108(b)(2)(A) of the
11Internal Revenue Code, multiplied by a fraction, the numerator
12of which is the amount of discharge of indebtedness income that
13is excluded from gross income for the taxable year (but only if
14the taxable year ends on or after December 31, 2008) under
15Section 108(a) of the Internal Revenue Code and that would have
16been allocated and apportioned to this State under Article 3 of
17this Act but for that exclusion, and the denominator of which
18is the total amount of discharge of indebtedness income
19excluded from gross income under Section 108(a) of the Internal
20Revenue Code for the taxable year. The reduction required under
21this subsection (c) shall be made after the determination of
22Illinois net income for the taxable year in which the
23indebtedness is discharged.
24    (d) In the case of a corporation (other than a Subchapter S
25corporation), no carryover deduction shall be allowed under
26this Section for any taxable year ending after December 31,

 

 

09600SB2505ham002- 55 -LRB096 16340 HLH 44936 a

12010 and prior to December 31, 2014; provided that, for
2purposes of determining the taxable years to which a net loss
3may be carried under subsection (a) of this Section, no taxable
4year for which a deduction is disallowed under this subsection
5shall be counted.
6(Source: P.A. 95-233, eff. 8-16-07.)
 
7    (35 ILCS 5/208)  (from Ch. 120, par. 2-208)
8    Sec. 208. Tax credit for residential real property taxes.
9For Beginning with tax years ending on or after December 31,
101991 and ending on or before December 31, 2010, every
11individual taxpayer shall be entitled to a tax credit equal to
125% of real property taxes paid by such taxpayer during the
13taxable year on the principal residence of the taxpayer. In the
14case of multi-unit or multi-use structures and farm dwellings,
15the taxes on the taxpayer's principal residence shall be that
16portion of the total taxes which is attributable to such
17principal residence.
18(Source: P.A. 87-17.)
 
19    (35 ILCS 5/517 new)
20    Sec. 517. Property tax rebate information. For taxable
21years beginning on or after January 1, 2011, for the purposes
22of making distributions from the Property Tax Rebate Trust
23Fund, the Department shall print on its standard individual
24income tax form a provision allowing the taxpayer to indicate

 

 

09600SB2505ham002- 56 -LRB096 16340 HLH 44936 a

1whether (i) he or she was responsible for paying real property
2taxes on his or her principal residence located in the State
3during the taxable year and (ii) he or she is the only person
4claiming a rebate for that residence. The Department shall
5develop a schedule to be attached to the individual income tax
6form for the purpose of verifying the taxpayer's property tax
7liability. If the rate of tax imposed by subsections (a) and
8(b) of Section 201 is reduced pursuant to Section 201.5 of this
9Act, the Department shall not require the schedule on or after
10the effective date of the reduction.
 
11    (35 ILCS 5/804)  (from Ch. 120, par. 8-804)
12    Sec. 804. Failure to Pay Estimated Tax.
13    (a) In general. In case of any underpayment of estimated
14tax by a taxpayer, except as provided in subsection (d) or (e),
15the taxpayer shall be liable to a penalty in an amount
16determined at the rate prescribed by Section 3-3 of the Uniform
17Penalty and Interest Act upon the amount of the underpayment
18(determined under subsection (b)) for each required
19installment.
20    (b) Amount of underpayment. For purposes of subsection (a),
21the amount of the underpayment shall be the excess of:
22        (1) the amount of the installment which would be
23    required to be paid under subsection (c), over
24        (2) the amount, if any, of the installment paid on or
25    before the last date prescribed for payment.

 

 

09600SB2505ham002- 57 -LRB096 16340 HLH 44936 a

1    (c) Amount of Required Installments.
2        (1) Amount.
3            (A) In General. Except as provided in paragraph
4        (2), the amount of any required installment shall be
5        25% of the required annual payment.
6            (B) Required Annual Payment. For purposes of
7        subparagraph (A), the term "required annual payment"
8        means the lesser of
9                (i) 90% of the tax shown on the return for the
10            taxable year, or if no return is filed, 90% of the
11            tax for such year, or
12                (ii) for installments due prior to February 1,
13            2011, and after January 31, 2012, 100% of the tax
14            shown on the return of the taxpayer for the
15            preceding taxable year if a return showing a
16            liability for tax was filed by the taxpayer for the
17            preceding taxable year and such preceding year was
18            a taxable year of 12 months; or .
19                (iii) for installments due after January 31,
20            2011, and prior to February 1, 2012, 150% of the
21            tax shown on the return of the taxpayer for the
22            preceding taxable year if a return showing a
23            liability for tax was filed by the taxpayer for the
24            preceding taxable year and such preceding year was
25            a taxable year of 12 months.
26        (2) Lower Required Installment where Annualized Income

 

 

09600SB2505ham002- 58 -LRB096 16340 HLH 44936 a

1    Installment is Less Than Amount Determined Under Paragraph
2    (1).
3            (A) In General. In the case of any required
4        installment if a taxpayer establishes that the
5        annualized income installment is less than the amount
6        determined under paragraph (1),
7                (i) the amount of such required installment
8            shall be the annualized income installment, and
9                (ii) any reduction in a required installment
10            resulting from the application of this
11            subparagraph shall be recaptured by increasing the
12            amount of the next required installment determined
13            under paragraph (1) by the amount of such
14            reduction, and by increasing subsequent required
15            installments to the extent that the reduction has
16            not previously been recaptured under this clause.
17            (B) Determination of Annualized Income
18        Installment. In the case of any required installment,
19        the annualized income installment is the excess, if
20        any, of
21                (i) an amount equal to the applicable
22            percentage of the tax for the taxable year computed
23            by placing on an annualized basis the net income
24            for months in the taxable year ending before the
25            due date for the installment, over
26                (ii) the aggregate amount of any prior

 

 

09600SB2505ham002- 59 -LRB096 16340 HLH 44936 a

1            required installments for the taxable year.
2            (C) Applicable Percentage.
3        In the case of the followingThe applicable
4        required installments:percentage is:
5        1st ...............................22.5%
6        2nd ...............................45%
7        3rd ...............................67.5%
8        4th ...............................90%
9            (D) Annualized Net Income; Individuals. For
10        individuals, net income shall be placed on an
11        annualized basis by:
12                (i) multiplying by 12, or in the case of a
13            taxable year of less than 12 months, by the number
14            of months in the taxable year, the net income
15            computed without regard to the standard exemption
16            for the months in the taxable year ending before
17            the month in which the installment is required to
18            be paid;
19                (ii) dividing the resulting amount by the
20            number of months in the taxable year ending before
21            the month in which such installment date falls; and
22                (iii) deducting from such amount the standard
23            exemption allowable for the taxable year, such
24            standard exemption being determined as of the last
25            date prescribed for payment of the installment.
26            (E) Annualized Net Income; Corporations. For

 

 

09600SB2505ham002- 60 -LRB096 16340 HLH 44936 a

1        corporations, net income shall be placed on an
2        annualized basis by multiplying by 12 the taxable
3        income
4                (i) for the first 3 months of the taxable year,
5            in the case of the installment required to be paid
6            in the 4th month,
7                (ii) for the first 3 months or for the first 5
8            months of the taxable year, in the case of the
9            installment required to be paid in the 6th month,
10                (iii) for the first 6 months or for the first 8
11            months of the taxable year, in the case of the
12            installment required to be paid in the 9th month,
13            and
14                (iv) for the first 9 months or for the first 11
15            months of the taxable year, in the case of the
16            installment required to be paid in the 12th month
17            of the taxable year,
18        then dividing the resulting amount by the number of
19        months in the taxable year (3, 5, 6, 8, 9, or 11 as the
20        case may be).
21    (d) Exceptions. Notwithstanding the provisions of the
22preceding subsections, the penalty imposed by subsection (a)
23shall not be imposed if the taxpayer was not required to file
24an Illinois income tax return for the preceding taxable year,
25or, for individuals, if the taxpayer had no tax liability for
26the preceding taxable year and such year was a taxable year of

 

 

09600SB2505ham002- 61 -LRB096 16340 HLH 44936 a

112 months. The penalty imposed by subsection (a) shall also not
2be imposed on any underpayments of estimated tax due before the
3effective date of this amendatory Act of 1998 which
4underpayments are solely attributable to the change in
5apportionment from subsection (a) to subsection (h) of Section
6304. The provisions of this amendatory Act of 1998 apply to tax
7years ending on or after December 31, 1998.
8    (e) The penalty imposed for underpayment of estimated tax
9by subsection (a) of this Section shall not be imposed to the
10extent that the Director or his or her designate determines,
11pursuant to Section 3-8 of the Uniform Penalty and Interest Act
12that the penalty should not be imposed.
13    (f) Definition of tax. For purposes of subsections (b) and
14(c), the term "tax" means the excess of the tax imposed under
15Article 2 of this Act, over the amounts credited against such
16tax under Sections 601(b) (3) and (4).
17    (g) Application of Section in case of tax withheld under
18Article 7. For purposes of applying this Section:
19        (1) in the case of an individual, tax withheld from
20    compensation for the taxable year shall be deemed a payment
21    of estimated tax, and an equal part of such amount shall be
22    deemed paid on each installment date for such taxable year,
23    unless the taxpayer establishes the dates on which all
24    amounts were actually withheld, in which case the amounts
25    so withheld shall be deemed payments of estimated tax on
26    the dates on which such amounts were actually withheld;

 

 

09600SB2505ham002- 62 -LRB096 16340 HLH 44936 a

1        (2) amounts timely paid by a partnership, Subchapter S
2    corporation, or trust on behalf of a partner, shareholder,
3    or beneficiary pursuant to subsection (f) of Section 502 or
4    Section 709.5 and claimed as a payment of estimated tax
5    shall be deemed a payment of estimated tax made on the last
6    day of the taxable year of the partnership, Subchapter S
7    corporation, or trust for which the income from the
8    withholding is made was computed; and
9        (3) all other amounts pursuant to Article 7 shall be
10    deemed a payment of estimated tax on the date the payment
11    is made to the taxpayer of the amount from which the tax is
12    withheld.
13    (g-5) Amounts withheld under the State Salary and Annuity
14Withholding Act. An individual who has amounts withheld under
15paragraph (10) of Section 4 of the State Salary and Annuity
16Withholding Act may elect to have those amounts treated as
17payments of estimated tax made on the dates on which those
18amounts are actually withheld.
19    (i) Short taxable year. The application of this Section to
20taxable years of less than 12 months shall be in accordance
21with regulations prescribed by the Department.
22    The changes in this Section made by Public Act 84-127 shall
23apply to taxable years ending on or after January 1, 1986.
24(Source: P.A. 95-233, eff. 8-16-07.)
 
25    (35 ILCS 5/901)  (from Ch. 120, par. 9-901)

 

 

09600SB2505ham002- 63 -LRB096 16340 HLH 44936 a

1    Sec. 901. Collection Authority.
2    (a) In general.
3    The Department shall collect the taxes imposed by this Act.
4The Department shall collect certified past due child support
5amounts under Section 2505-650 of the Department of Revenue Law
6(20 ILCS 2505/2505-650). Except as provided in subsections (c),
7and (e), (f), (g), and (h) of this Section, money collected
8pursuant to subsections (a) and (b) of Section 201 of this Act
9shall be paid into the General Revenue Fund in the State
10treasury; money collected pursuant to subsections (c) and (d)
11of Section 201 of this Act shall be paid into the Personal
12Property Tax Replacement Fund, a special fund in the State
13Treasury; and money collected under Section 2505-650 of the
14Department of Revenue Law (20 ILCS 2505/2505-650) shall be paid
15into the Child Support Enforcement Trust Fund, a special fund
16outside the State Treasury, or to the State Disbursement Unit
17established under Section 10-26 of the Illinois Public Aid
18Code, as directed by the Department of Healthcare and Family
19Services.
20    (b) Local Government Distributive Fund.
21    Beginning August 1, 1969, and continuing through June 30,
221994, the Treasurer shall transfer each month from the General
23Revenue Fund to a special fund in the State treasury, to be
24known as the "Local Government Distributive Fund", an amount
25equal to 1/12 of the net revenue realized from the tax imposed
26by subsections (a) and (b) of Section 201 of this Act during

 

 

09600SB2505ham002- 64 -LRB096 16340 HLH 44936 a

1the preceding month. Beginning July 1, 1994, and continuing
2through June 30, 1995, the Treasurer shall transfer each month
3from the General Revenue Fund to the Local Government
4Distributive Fund an amount equal to 1/11 of the net revenue
5realized from the tax imposed by subsections (a) and (b) of
6Section 201 of this Act during the preceding month. Beginning
7July 1, 1995 and continuing through January 31, 2011, the
8Treasurer shall transfer each month from the General Revenue
9Fund to the Local Government Distributive Fund an amount equal
10to the net of (i) 1/10 of the net revenue realized from the tax
11imposed by subsections (a) and (b) of Section 201 of the
12Illinois Income Tax Act during the preceding month (ii) minus,
13beginning July 1, 2003 and ending June 30, 2004, $6,666,666,
14and beginning July 1, 2004, zero. Beginning February 1, 2011,
15and continuing through January 31, 2015, the Treasurer shall
16transfer each month from the General Revenue Fund to the Local
17Government Distributive Fund an amount equal to the sum of (i)
186% (10% of the ratio of the 3% individual income tax rate prior
19to 2011 to the 5% individual income tax rate after 2010) of the
20net revenue realized from the tax imposed by subsections (a)
21and (b) of Section 201 of this Act upon individuals, trusts,
22and estates during the preceding month and (ii) 6.86% (10% of
23the ratio of the 4.8% corporate income tax rate prior to 2011
24to the 7% corporate income tax rate after 2010) of the net
25revenue realized from the tax imposed by subsections (a) and
26(b) of Section 201 of this Act upon corporations during the

 

 

09600SB2505ham002- 65 -LRB096 16340 HLH 44936 a

1preceding month. Beginning February 1, 2015 and continuing
2through January 31, 2025, the Treasurer shall transfer each
3month from the General Revenue Fund to the Local Government
4Distributive Fund an amount equal to the sum of (i) 7.5% (10%
5of the ratio of the 3% individual income tax rate prior to 2011
6to the 4% individual income tax rate after 2014) of the net
7revenue realized from the tax imposed by subsections (a) and
8(b) of Section 201 of this Act upon individuals, trusts, and
9estates during the preceding month and (ii) 8.57% (10% of the
10ratio of the 4.8% corporate income tax rate prior to 2011 to
11the 5.6% corporate income tax rate after 2014) of the net
12revenue realized from the tax imposed by subsections (a) and
13(b) of Section 201 of this Act upon corporations during the
14preceding month. Beginning February 1, 2025, the Treasurer
15shall transfer each month from the General Revenue Fund to the
16Local Government Distributive Fund an amount equal to the sum
17of (i) 8.57% (10% of the ratio of the 3% individual income tax
18rate prior to 2011 to the 3.5% individual income tax rate after
192024) of the net revenue realized from the tax imposed by
20subsections (a) and (b) of Section 201 of this Act upon
21individuals, trusts, and estates during the preceding month and
22(ii) 9.8% (10% of the ratio of the 4.8% corporate income tax
23rate prior to 2011 to the 4.9% corporate income tax rate after
242024) of the net revenue realized from the tax imposed by
25subsections (a) and (b) of Section 201 of this Act upon
26corporations during the preceding month. Net revenue realized

 

 

09600SB2505ham002- 66 -LRB096 16340 HLH 44936 a

1for a month shall be defined as the revenue from the tax
2imposed by subsections (a) and (b) of Section 201 of this Act
3which is deposited in the General Revenue Fund, the Education
4Educational Assistance Fund, and the Income Tax Surcharge Local
5Government Distributive Fund, the Property Tax Rebate Trust
6Fund, the Fund for the Advancement of Education, and the
7Commitment to Human Services Fund during the month minus the
8amount paid out of the General Revenue Fund in State warrants
9during that same month as refunds to taxpayers for overpayment
10of liability under the tax imposed by subsections (a) and (b)
11of Section 201 of this Act.
12    (c) Deposits Into Income Tax Refund Fund.
13        (1) Beginning on January 1, 1989 and thereafter, the
14    Department shall deposit a percentage of the amounts
15    collected pursuant to subsections (a) and (b)(1), (2), and
16    (3), of Section 201 of this Act into a fund in the State
17    treasury known as the Income Tax Refund Fund. The
18    Department shall deposit 6% of such amounts during the
19    period beginning January 1, 1989 and ending on June 30,
20    1989. Beginning with State fiscal year 1990 and for each
21    fiscal year thereafter, the percentage deposited into the
22    Income Tax Refund Fund during a fiscal year shall be the
23    Annual Percentage. For fiscal years 1999 through 2001, the
24    Annual Percentage shall be 7.1%. For fiscal year 2003, the
25    Annual Percentage shall be 8%. For fiscal year 2004, the
26    Annual Percentage shall be 11.7%. Upon the effective date

 

 

09600SB2505ham002- 67 -LRB096 16340 HLH 44936 a

1    of this amendatory Act of the 93rd General Assembly, the
2    Annual Percentage shall be 10% for fiscal year 2005. For
3    fiscal year 2006, the Annual Percentage shall be 9.75%. For
4    fiscal year 2007, the Annual Percentage shall be 9.75%. For
5    fiscal year 2008, the Annual Percentage shall be 7.75%. For
6    fiscal year 2009, the Annual Percentage shall be 9.75%. For
7    fiscal year 2010, the Annual Percentage shall be 9.75%. For
8    fiscal year 2011, the Annual Percentage shall be 8.75%. For
9    all other fiscal years, the Annual Percentage shall be
10    calculated as a fraction, the numerator of which shall be
11    the amount of refunds approved for payment by the
12    Department during the preceding fiscal year as a result of
13    overpayment of tax liability under subsections (a) and
14    (b)(1), (2), and (3) of Section 201 of this Act plus the
15    amount of such refunds remaining approved but unpaid at the
16    end of the preceding fiscal year, minus the amounts
17    transferred into the Income Tax Refund Fund from the
18    Tobacco Settlement Recovery Fund, and the denominator of
19    which shall be the amounts which will be collected pursuant
20    to subsections (a) and (b)(1), (2), and (3) of Section 201
21    of this Act during the preceding fiscal year; except that
22    in State fiscal year 2002, the Annual Percentage shall in
23    no event exceed 7.6%. The Director of Revenue shall certify
24    the Annual Percentage to the Comptroller on the last
25    business day of the fiscal year immediately preceding the
26    fiscal year for which it is to be effective.

 

 

09600SB2505ham002- 68 -LRB096 16340 HLH 44936 a

1        (2) Beginning on January 1, 1989 and thereafter, the
2    Department shall deposit a percentage of the amounts
3    collected pursuant to subsections (a) and (b)(6), (7), and
4    (8), (c) and (d) of Section 201 of this Act into a fund in
5    the State treasury known as the Income Tax Refund Fund. The
6    Department shall deposit 18% of such amounts during the
7    period beginning January 1, 1989 and ending on June 30,
8    1989. Beginning with State fiscal year 1990 and for each
9    fiscal year thereafter, the percentage deposited into the
10    Income Tax Refund Fund during a fiscal year shall be the
11    Annual Percentage. For fiscal years 1999, 2000, and 2001,
12    the Annual Percentage shall be 19%. For fiscal year 2003,
13    the Annual Percentage shall be 27%. For fiscal year 2004,
14    the Annual Percentage shall be 32%. Upon the effective date
15    of this amendatory Act of the 93rd General Assembly, the
16    Annual Percentage shall be 24% for fiscal year 2005. For
17    fiscal year 2006, the Annual Percentage shall be 20%. For
18    fiscal year 2007, the Annual Percentage shall be 17.5%. For
19    fiscal year 2008, the Annual Percentage shall be 15.5%. For
20    fiscal year 2009, the Annual Percentage shall be 17.5%. For
21    fiscal year 2010, the Annual Percentage shall be 17.5%. For
22    fiscal year 2011, the Annual Percentage shall be 17.5%. For
23    all other fiscal years, the Annual Percentage shall be
24    calculated as a fraction, the numerator of which shall be
25    the amount of refunds approved for payment by the
26    Department during the preceding fiscal year as a result of

 

 

09600SB2505ham002- 69 -LRB096 16340 HLH 44936 a

1    overpayment of tax liability under subsections (a) and
2    (b)(6), (7), and (8), (c) and (d) of Section 201 of this
3    Act plus the amount of such refunds remaining approved but
4    unpaid at the end of the preceding fiscal year, and the
5    denominator of which shall be the amounts which will be
6    collected pursuant to subsections (a) and (b)(6), (7), and
7    (8), (c) and (d) of Section 201 of this Act during the
8    preceding fiscal year; except that in State fiscal year
9    2002, the Annual Percentage shall in no event exceed 23%.
10    The Director of Revenue shall certify the Annual Percentage
11    to the Comptroller on the last business day of the fiscal
12    year immediately preceding the fiscal year for which it is
13    to be effective.
14        (3) The Comptroller shall order transferred and the
15    Treasurer shall transfer from the Tobacco Settlement
16    Recovery Fund to the Income Tax Refund Fund (i) $35,000,000
17    in January, 2001, (ii) $35,000,000 in January, 2002, and
18    (iii) $35,000,000 in January, 2003.
19    (d) Expenditures from Income Tax Refund Fund.
20        (1) Beginning January 1, 1989, money in the Income Tax
21    Refund Fund shall be expended exclusively for the purpose
22    of paying refunds resulting from overpayment of tax
23    liability under Section 201 of this Act, for paying rebates
24    under Section 208.1 in the event that the amounts in the
25    Homeowners' Tax Relief Fund are insufficient for that
26    purpose, and for making transfers pursuant to this

 

 

09600SB2505ham002- 70 -LRB096 16340 HLH 44936 a

1    subsection (d).
2        (2) The Director shall order payment of refunds
3    resulting from overpayment of tax liability under Section
4    201 of this Act from the Income Tax Refund Fund only to the
5    extent that amounts collected pursuant to Section 201 of
6    this Act and transfers pursuant to this subsection (d) and
7    item (3) of subsection (c) have been deposited and retained
8    in the Fund.
9        (3) As soon as possible after the end of each fiscal
10    year, the Director shall order transferred and the State
11    Treasurer and State Comptroller shall transfer from the
12    Income Tax Refund Fund to the Personal Property Tax
13    Replacement Fund an amount, certified by the Director to
14    the Comptroller, equal to the excess of the amount
15    collected pursuant to subsections (c) and (d) of Section
16    201 of this Act deposited into the Income Tax Refund Fund
17    during the fiscal year over the amount of refunds resulting
18    from overpayment of tax liability under subsections (c) and
19    (d) of Section 201 of this Act paid from the Income Tax
20    Refund Fund during the fiscal year.
21        (4) As soon as possible after the end of each fiscal
22    year, the Director shall order transferred and the State
23    Treasurer and State Comptroller shall transfer from the
24    Personal Property Tax Replacement Fund to the Income Tax
25    Refund Fund an amount, certified by the Director to the
26    Comptroller, equal to the excess of the amount of refunds

 

 

09600SB2505ham002- 71 -LRB096 16340 HLH 44936 a

1    resulting from overpayment of tax liability under
2    subsections (c) and (d) of Section 201 of this Act paid
3    from the Income Tax Refund Fund during the fiscal year over
4    the amount collected pursuant to subsections (c) and (d) of
5    Section 201 of this Act deposited into the Income Tax
6    Refund Fund during the fiscal year.
7        (4.5) As soon as possible after the end of fiscal year
8    1999 and of each fiscal year thereafter, the Director shall
9    order transferred and the State Treasurer and State
10    Comptroller shall transfer from the Income Tax Refund Fund
11    to the General Revenue Fund any surplus remaining in the
12    Income Tax Refund Fund as of the end of such fiscal year;
13    excluding for fiscal years 2000, 2001, and 2002 amounts
14    attributable to transfers under item (3) of subsection (c)
15    less refunds resulting from the earned income tax credit.
16        (5) This Act shall constitute an irrevocable and
17    continuing appropriation from the Income Tax Refund Fund
18    for the purpose of paying refunds upon the order of the
19    Director in accordance with the provisions of this Section.
20    (e) Deposits into the Education Assistance Fund and the
21Income Tax Surcharge Local Government Distributive Fund.
22    On July 1, 1991, and thereafter, of the amounts collected
23pursuant to subsections (a) and (b) of Section 201 of this Act,
24minus deposits into the Income Tax Refund Fund, the Department
25shall deposit 7.3% into the Education Assistance Fund in the
26State Treasury. Beginning July 1, 1991, and continuing through

 

 

09600SB2505ham002- 72 -LRB096 16340 HLH 44936 a

1January 31, 1993, of the amounts collected pursuant to
2subsections (a) and (b) of Section 201 of the Illinois Income
3Tax Act, minus deposits into the Income Tax Refund Fund, the
4Department shall deposit 3.0% into the Income Tax Surcharge
5Local Government Distributive Fund in the State Treasury.
6Beginning February 1, 1993 and continuing through June 30,
71993, of the amounts collected pursuant to subsections (a) and
8(b) of Section 201 of the Illinois Income Tax Act, minus
9deposits into the Income Tax Refund Fund, the Department shall
10deposit 4.4% into the Income Tax Surcharge Local Government
11Distributive Fund in the State Treasury. Beginning July 1,
121993, and continuing through June 30, 1994, of the amounts
13collected under subsections (a) and (b) of Section 201 of this
14Act, minus deposits into the Income Tax Refund Fund, the
15Department shall deposit 1.475% into the Income Tax Surcharge
16Local Government Distributive Fund in the State Treasury.
17    (f) Deposits into the Property Tax Rebate Trust Fund.
18Beginning July 1, 2011, the Department shall deposit the
19following portions of the revenue realized from the tax imposed
20upon individuals, trusts, and estates by subsections (a) and
21(b) of Section 201 of this Act during the preceding month,
22minus deposits into the Income Tax Refund Fund, into the
23Property Tax Rebate Trust Fund:
24        (1) beginning July 1, 2011, and prior to July 1, 2015,
25    1/20;
26        (2) beginning July 1, 2015, and prior to July 1, 2025,

 

 

09600SB2505ham002- 73 -LRB096 16340 HLH 44936 a

1    1/16; and
2        (3) beginning July 1, 2025, 1/14.
3    If the rate of tax imposed by subsection (a) and (b) of
4Section 201 is reduced pursuant to Section 201.5 of this Act,
5the Department shall not make the deposits required by this
6subsection (f) on or after the effective date of the reduction.
7    (g) Deposits into the Fund for the Advancement of
8Education. Beginning February 1, 2015, the Department shall
9deposit the following portions of the revenue realized from the
10tax imposed upon individuals, trusts, and estates by
11subsections (a) and (b) of Section 201 of this Act during the
12preceding month, minus deposits into the Income Tax Refund
13Fund, into the Fund for the Advancement of Education:
14        (1) beginning February 1, 2015, and prior to February
15    1, 2025, 1/32; and
16        (2) beginning February 1, 2025, 1/28.
17    If the rate of tax imposed by subsection (a) and (b) of
18Section 201 is reduced pursuant to Section 201.5 of this Act,
19the Department shall not make the deposits required by this
20subsection (g) on or after the effective date of the reduction.
21    (h) Deposits into the Commitment to Human Services Fund.
22Beginning February 1, 2015, the Department shall deposit the
23following portions of the revenue realized from the tax imposed
24upon individuals, trusts, and estates by subsections (a) and
25(b) of Section 201 of this Act during the preceding month,
26minus deposits into the Income Tax Refund Fund, into the

 

 

09600SB2505ham002- 74 -LRB096 16340 HLH 44936 a

1Commitment to Human Services Fund:
2        (1) beginning February 1, 2015, and prior to February
3    1, 2025, 1/32; and
4        (2) beginning February 1, 2025, 1/28.
5    If the rate of tax imposed by subsection (a) and (b) of
6Section 201 is reduced pursuant to Section 201.5 of this Act,
7the Department shall not make the deposits required by this
8subsection (h) on or after the effective date of the reduction.
9(Source: P.A. 95-707, eff. 1-11-08; 95-744, eff. 7-18-08;
1096-45, eff. 7-15-09; 96-328, eff. 8-11-09; 96-959, eff.
117-1-10.)
 
12    Section 25. The Illinois Estate and Generation-Skipping
13Transfer Tax Act is amended by changing Section 2 as follows:
 
14    (35 ILCS 405/2)  (from Ch. 120, par. 405A-2)
15    Sec. 2. Definitions.
16    "Federal estate tax" means the tax due to the United States
17with respect to a taxable transfer under Chapter 11 of the
18Internal Revenue Code.
19    "Federal generation-skipping transfer tax" means the tax
20due to the United States with respect to a taxable transfer
21under Chapter 13 of the Internal Revenue Code.
22    "Federal return" means the federal estate tax return with
23respect to the federal estate tax and means the federal
24generation-skipping transfer tax return with respect to the

 

 

09600SB2505ham002- 75 -LRB096 16340 HLH 44936 a

1federal generation-skipping transfer tax.
2    "Federal transfer tax" means the federal estate tax or the
3federal generation-skipping transfer tax.
4    "Illinois estate tax" means the tax due to this State with
5respect to a taxable transfer.
6    "Illinois generation-skipping transfer tax" means the tax
7due to this State with respect to a taxable transfer that gives
8rise to a federal generation-skipping transfer tax.
9    "Illinois transfer tax" means the Illinois estate tax or
10the Illinois generation-skipping transfer tax.
11    "Internal Revenue Code" means, unless otherwise provided,
12the Internal Revenue Code of 1986, as amended from time to
13time.
14    "Non-resident trust" means a trust that is not a resident
15of this State for purposes of the Illinois Income Tax Act, as
16amended from time to time.
17    "Person" means and includes any individual, trust, estate,
18partnership, association, company or corporation.
19    "Qualified heir" means a qualified heir as defined in
20Section 2032A(e)(1) of the Internal Revenue Code.
21    "Resident trust" means a trust that is a resident of this
22State for purposes of the Illinois Income Tax Act, as amended
23from time to time.
24    "State" means any state, territory or possession of the
25United States and the District of Columbia.
26    "State tax credit" means:

 

 

09600SB2505ham002- 76 -LRB096 16340 HLH 44936 a

1    (a) For persons dying on or after January 1, 2003 and
2through December 31, 2005, an amount equal to the full credit
3calculable under Section 2011 or Section 2604 of the Internal
4Revenue Code as the credit would have been computed and allowed
5under the Internal Revenue Code as in effect on December 31,
62001, without the reduction in the State Death Tax Credit as
7provided in Section 2011(b)(2) or the termination of the State
8Death Tax Credit as provided in Section 2011(f) as enacted by
9the Economic Growth and Tax Relief Reconciliation Act of 2001,
10but recognizing the increased applicable exclusion amount
11through December 31, 2005.
12    (b) For persons dying after December 31, 2005 and on or
13before December 31, 2009, and for persons dying after December
1431, 2010, an amount equal to the full credit calculable under
15Section 2011 or 2604 of the Internal Revenue Code as the credit
16would have been computed and allowed under the Internal Revenue
17Code as in effect on December 31, 2001, without the reduction
18in the State Death Tax Credit as provided in Section 2011(b)(2)
19or the termination of the State Death Tax Credit as provided in
20Section 2011(f) as enacted by the Economic Growth and Tax
21Relief Reconciliation Act of 2001, but recognizing the
22exclusion amount of only $2,000,000, and with reduction to the
23adjusted taxable estate for any qualified terminable interest
24property election as defined in subsection (b-1) of this
25Section.
26    (b-1) The person required to file the Illinois return may

 

 

09600SB2505ham002- 77 -LRB096 16340 HLH 44936 a

1elect on a timely filed Illinois return a marital deduction for
2qualified terminable interest property under Section
32056(b)(7) of the Internal Revenue Code for purposes of the
4Illinois estate tax that is separate and independent of any
5qualified terminable interest property election for federal
6estate tax purposes. For purposes of the Illinois estate tax,
7the inclusion of property in the gross estate of a surviving
8spouse is the same as under Section 2044 of the Internal
9Revenue Code.
10    In the case of any trust for which a State or federal
11qualified terminable interest property election is made, the
12trustee may not retain non-income producing assets for more
13than a reasonable amount of time without the consent of the
14surviving spouse.
15    (c) For persons dying after December 31, 2009, the credit
16for state tax allowable under Section 2011 or Section 2604 of
17the Internal Revenue Code.
18    "Taxable transfer" means an event that gives rise to a
19state tax credit, including any credit as a result of the
20imposition of an additional tax under Section 2032A(c) of the
21Internal Revenue Code.
22    "Transferee" means a transferee within the meaning of
23Section 2603(a)(1) and Section 6901(h) of the Internal Revenue
24Code.
25    "Transferred property" means:
26        (1) With respect to a taxable transfer occurring at the

 

 

09600SB2505ham002- 78 -LRB096 16340 HLH 44936 a

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)
21of the Internal Revenue Code.
22(Source: P.A. 96-789, eff. 9-8-09.)
 
23    Section 99. Effective date. This Act takes effect upon
24becoming law.".