Illinois General Assembly - Full Text of SB2505
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Full Text of SB2505  96th General Assembly

SB2505ham003 96TH GENERAL ASSEMBLY

Rep. Barbara Flynn Currie

Filed: 1/11/2011

 

 


 

 


 
09600SB2505ham003LRB096 16340 HLH 44944 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

 

 

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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.

 

 

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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:
 

 

 

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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, 6z-85, 6z-86, and 25.2 as follows:
 
11    (30 ILCS 105/5.786 new)
12    Sec. 5.786. The Fund for the Advancement of Education.
 
13    (30 ILCS 105/5.787 new)
14    Sec. 5.787. The Commitment to Human Services Fund.
 
15    (30 ILCS 105/6z-85 new)
16    Sec. 6z-85. The Fund for the Advancement of Education;
17creation. The Fund for the Advancement of Education is hereby
18created as a special fund in the State treasury. All moneys
19deposited into the fund shall be appropriated to provide
20financial assistance for education programs. Moneys
21appropriated from the Fund shall supplement and not supplant
22the current level of education funding.
 

 

 

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1    (30 ILCS 105/6z-86 new)
2    Sec. 6z-86. The Commitment to Human Services Fund; uses.
3The Commitment to Human Services Fund is hereby created as a
4special fund in the State treasury. All moneys deposited into
5the fund shall be appropriated to provide financial assistance
6for community-based human service providers and for State
7funded human service programs. Moneys appropriated from the
8Fund shall supplement and not supplant the current level of
9human services funding.
 
10    (30 ILCS 105/25.2 new)
11    Sec. 25.2. Statutory mandates not designated in law as
12being subject to appropriation. Notwithstanding any law to the
13contrary, from the effective date of this Section through
14fiscal year 2015, with respect to any statutory mandate that is
15not designated in law as being subject to appropriation, if and
16only if the Governor determines that funds appropriated for
17such statutory mandates are insufficient to satisfy those
18mandates, the Governor may reduce the amount of funds
19appropriated for some or all of those statutory mandates in
20amounts he or she deems necessary to accommodate budgetary
21limitations while attempting to implement such mandates to the
22extent reasonably practical. The reduction shall become
23effective upon the Governor giving notice of the reduction to
24the Speaker of the House of Representatives, the President of

 

 

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1the Senate, the Minority Leader of the House of
2Representatives, the Minority Leader of the Senate, the State
3Comptroller, the State Treasurer, and the Commission on
4Government Forecasting and Accountability. Nothing in this
5Section prohibits adjustments to the Governor's reduction by
6law.
 
7    Section 20. The Illinois Income Tax Act is amended by
8changing Sections 201, 207, 804, and 901 and by adding Sections
9201.5 and 202.5 as follows:
 
10    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
11    Sec. 201. Tax Imposed.
12    (a) In general. A tax measured by net income is hereby
13imposed on every individual, corporation, trust and estate for
14each taxable year ending after July 31, 1969 on the privilege
15of earning or receiving income in or as a resident of this
16State. Such tax shall be in addition to all other occupation or
17privilege taxes imposed by this State or by any municipal
18corporation or political subdivision thereof.
19    (b) Rates. The tax imposed by subsection (a) of this
20Section shall be determined as follows, except as adjusted by
21subsection (d-1):
22        (1) In the case of an individual, trust or estate, for
23    taxable years ending prior to July 1, 1989, an amount equal
24    to 2 1/2% of the taxpayer's net income for the taxable

 

 

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

 

 

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1    ending after December 31, 2014, an amount equal to the sum
2    of (i) 5% of the taxpayer's net income for the period prior
3    to January 1, 2015, as calculated under Section 202.5, and
4    (ii) 3.75% of the taxpayer's net income for the period
5    after December 31, 2014, as calculated under Section 202.5.
6        (5.2) In the case of an individual, trust, or estate,
7    for taxable years beginning on or after January 1, 2015,
8    and ending prior to January 1, 2025, an amount equal to
9    3.75% of the taxpayer's net income for the taxable year.
10        (5.3) In the case of an individual, trust, or estate,
11    for taxable years beginning prior to January 1, 2025, and
12    ending after December 31, 2024, an amount equal to the sum
13    of (i) 3.75% of the taxpayer's net income for the period
14    prior to January 1, 2025, as calculated under Section
15    202.5, and (ii) 3.25% of the taxpayer's net income for the
16    period after December 31, 2024, as calculated under Section
17    202.5.
18        (5.4) In the case of an individual, trust, or estate,
19    for taxable years beginning on or after January 1, 2025, an
20    amount equal to 3.25% of the taxpayer's net income for the
21    taxable year.
22        (6) In the case of a corporation, for taxable years
23    ending prior to July 1, 1989, an amount equal to 4% of the
24    taxpayer's net income for the taxable year.
25        (7) In the case of a corporation, for taxable years
26    beginning prior to July 1, 1989 and ending after June 30,

 

 

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

 

 

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1    31, 2014, as calculated under Section 202.5.
2        (12) In the case of a corporation, for taxable years
3    beginning on or after January 1, 2015, and ending prior to
4    January 1, 2025, an amount equal to 5.25% of the taxpayer's
5    net income for the taxable year.
6        (13) In the case of a corporation, for taxable years
7    beginning prior to January 1, 2025, and ending after
8    December 31, 2024, an amount equal to the sum of (i) 5.25%
9    of the taxpayer's net income for the period prior to
10    January 1, 2025, as calculated under Section 202.5, and
11    (ii) 4.8% of the taxpayer's net income for the period after
12    December 31, 2024, as calculated under Section 202.5.
13        (14) In the case of a corporation, for taxable years
14    beginning on or after January 1, 2025, an amount equal to
15    4.8% of the taxpayer's net income for the taxable year.
16    The rates under this subsection (b) are subject to the
17provisions of Section 201.5.
18    (c) Personal Property Tax Replacement Income Tax.
19Beginning on July 1, 1979 and thereafter, in addition to such
20income tax, there is also hereby imposed the Personal Property
21Tax Replacement Income Tax measured by net income on every
22corporation (including Subchapter S corporations), partnership
23and trust, for each taxable year ending after June 30, 1979.
24Such taxes are imposed on the privilege of earning or receiving
25income in or as a resident of this State. The Personal Property
26Tax Replacement Income Tax shall be in addition to the income

 

 

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

 

 

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1on or after December 31, 1999, the sum of the rates of tax
2imposed by subsections (b) and (d) shall be reduced (but not
3increased) to the rate at which the total amount of tax imposed
4under this Act, net of all credits allowed under this Act,
5shall equal (i) the total amount of tax that would be imposed
6on the foreign insurer's net income allocable to Illinois for
7the taxable year by such foreign insurer's state or country of
8domicile if that net income were subject to all income taxes
9and taxes measured by net income imposed by such foreign
10insurer's state or country of domicile, net of all credits
11allowed or (ii) a rate of zero if no such tax is imposed on such
12income by the foreign insurer's state of domicile. For the
13purposes of this subsection (d-1), an inter-affiliate includes
14a mutual insurer under common management.
15        (1) For the purposes of subsection (d-1), in no event
16    shall the sum of the rates of tax imposed by subsections
17    (b) and (d) be reduced below the rate at which the sum of:
18            (A) the total amount of tax imposed on such foreign
19        insurer under this Act for a taxable year, net of all
20        credits allowed under this Act, plus
21            (B) the privilege tax imposed by Section 409 of the
22        Illinois Insurance Code, the fire insurance company
23        tax imposed by Section 12 of the Fire Investigation
24        Act, and the fire department taxes imposed under
25        Section 11-10-1 of the Illinois Municipal Code,
26    equals 1.25% for taxable years ending prior to December 31,

 

 

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1    2003, or 1.75% for taxable years ending on or after
2    December 31, 2003, of the net taxable premiums written for
3    the taxable year, as described by subsection (1) of Section
4    409 of the Illinois Insurance Code. This paragraph will in
5    no event increase the rates imposed under subsections (b)
6    and (d).
7        (2) Any reduction in the rates of tax imposed by this
8    subsection shall be applied first against the rates imposed
9    by subsection (b) and only after the tax imposed by
10    subsection (a) net of all credits allowed under this
11    Section other than the credit allowed under subsection (i)
12    has been reduced to zero, against the rates imposed by
13    subsection (d).
14    This subsection (d-1) is exempt from the provisions of
15Section 250.
16    (e) Investment credit. A taxpayer shall be allowed a credit
17against the Personal Property Tax Replacement Income Tax for
18investment in qualified property.
19        (1) A taxpayer shall be allowed a credit equal to .5%
20    of the basis of qualified property placed in service during
21    the taxable year, provided such property is placed in
22    service on or after July 1, 1984. There shall be allowed an
23    additional credit equal to .5% of the basis of qualified
24    property placed in service during the taxable year,
25    provided such property is placed in service on or after
26    July 1, 1986, and the taxpayer's base employment within

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    meaning as under Section 46 of the Internal Revenue Code.
2        (7) If during any taxable year, any property ceases to
3    be qualified property in the hands of the taxpayer within
4    48 months after being placed in service, or the situs of
5    any qualified property is moved outside Illinois within 48
6    months after being placed in service, the Personal Property
7    Tax Replacement Income Tax for such taxable year shall be
8    increased. Such increase shall be determined by (i)
9    recomputing the investment credit which would have been
10    allowed for the year in which credit for such property was
11    originally allowed by eliminating such property from such
12    computation and, (ii) subtracting such recomputed credit
13    from the amount of credit previously allowed. For the
14    purposes of this paragraph (7), a reduction of the basis of
15    qualified property resulting from a redetermination of the
16    purchase price shall be deemed a disposition of qualified
17    property to the extent of such reduction.
18        (8) Unless the investment credit is extended by law,
19    the basis of qualified property shall not include costs
20    incurred after December 31, 2013, except for costs incurred
21    pursuant to a binding contract entered into on or before
22    December 31, 2013.
23        (9) Each taxable year ending before December 31, 2000,
24    a partnership may elect to pass through to its partners the
25    credits to which the partnership is entitled under this
26    subsection (e) for the taxable year. A partner may use the

 

 

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

 

 

09600SB2505ham003- 20 -LRB096 16340 HLH 44944 a

1    (f) Investment credit; Enterprise Zone; River Edge
2Redevelopment Zone.
3        (1) A taxpayer shall be allowed a credit against the
4    tax imposed by subsections (a) and (b) of this Section for
5    investment in qualified property which is placed in service
6    in an Enterprise Zone created pursuant to the Illinois
7    Enterprise Zone Act or, for property placed in service on
8    or after July 1, 2006, a River Edge Redevelopment Zone
9    established pursuant to the River Edge Redevelopment Zone
10    Act. For partners, shareholders of Subchapter S
11    corporations, and owners of limited liability companies,
12    if the liability company is treated as a partnership for
13    purposes of federal and State income taxation, there shall
14    be allowed a credit under this subsection (f) to be
15    determined in accordance with the determination of income
16    and distributive share of income under Sections 702 and 704
17    and Subchapter S of the Internal Revenue Code. The credit
18    shall be .5% of the basis for such property. The credit
19    shall be available only in the taxable year in which the
20    property is placed in service in the Enterprise Zone or
21    River Edge Redevelopment Zone and shall not be allowed to
22    the extent that it would reduce a taxpayer's liability for
23    the tax imposed by subsections (a) and (b) of this Section
24    to below zero. For tax years ending on or after December
25    31, 1985, the credit shall be allowed for the tax year in
26    which the property is placed in service, or, if the amount

 

 

09600SB2505ham003- 21 -LRB096 16340 HLH 44944 a

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

 

 

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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 the Enterprise Zone or River Edge
6    Redevelopment Zone by the taxpayer, the amount of such
7    increase shall be deemed property placed in service on the
8    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, any property ceases to
12    be qualified property in the hands of the taxpayer within
13    48 months after being placed in service, or the situs of
14    any qualified property is moved outside the Enterprise Zone
15    or River Edge Redevelopment Zone within 48 months after
16    being placed in service, the tax imposed under subsections
17    (a) and (b) of this Section for such taxable year shall be
18    increased. Such increase shall be determined by (i)
19    recomputing the investment credit which would have been
20    allowed for the year in which credit for such property was
21    originally allowed by eliminating such property from such
22    computation, and (ii) subtracting such recomputed credit
23    from the amount of credit previously allowed. For the
24    purposes of this paragraph (6), a reduction of the basis of
25    qualified property resulting from a redetermination of the
26    purchase price shall be deemed a disposition of qualified

 

 

09600SB2505ham003- 23 -LRB096 16340 HLH 44944 a

1    property to the extent of such reduction.
2        (7) There shall be allowed an additional credit equal
3    to 0.5% of the basis of qualified property placed in
4    service during the taxable year in a River Edge
5    Redevelopment Zone, provided such property is placed in
6    service on or after July 1, 2006, and the taxpayer's base
7    employment within Illinois has increased by 1% or more over
8    the preceding year as determined by the taxpayer's
9    employment records filed with the Illinois Department of
10    Employment Security. Taxpayers who are new to Illinois
11    shall be deemed to have met the 1% growth in base
12    employment for the first year in which they file employment
13    records with the Illinois Department of Employment
14    Security. If, in any year, the increase in base employment
15    within Illinois over the preceding year is less than 1%,
16    the additional credit shall be limited to that percentage
17    times a fraction, the numerator of which is 0.5% and the
18    denominator of which is 1%, but shall not exceed 0.5%.
19    (g) Jobs Tax Credit; Enterprise Zone, River Edge
20Redevelopment Zone, and Foreign Trade Zone or Sub-Zone.
21        (1) A taxpayer conducting a trade or business in an
22    enterprise zone or a High Impact Business designated by the
23    Department of Commerce and Economic Opportunity or for
24    taxable years ending on or after December 31, 2006, in a
25    River Edge Redevelopment Zone conducting a trade or
26    business in a federally designated Foreign Trade Zone or

 

 

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1    Sub-Zone shall be allowed a credit against the tax imposed
2    by subsections (a) and (b) of this Section in the amount of
3    $500 per eligible employee hired to work in the zone during
4    the taxable year.
5        (2) To qualify for the credit:
6            (A) the taxpayer must hire 5 or more eligible
7        employees to work in an enterprise zone, River Edge
8        Redevelopment Zone, or federally designated Foreign
9        Trade Zone or Sub-Zone during the taxable year;
10            (B) the taxpayer's total employment within the
11        enterprise zone, River Edge Redevelopment Zone, or
12        federally designated Foreign Trade Zone or Sub-Zone
13        must increase by 5 or more full-time employees beyond
14        the total employed in that zone at the end of the
15        previous tax year for which a jobs tax credit under
16        this Section was taken, or beyond the total employed by
17        the taxpayer as of December 31, 1985, whichever is
18        later; and
19            (C) the eligible employees must be employed 180
20        consecutive days in order to be deemed hired for
21        purposes of this subsection.
22        (3) An "eligible employee" means an employee who is:
23            (A) Certified by the Department of Commerce and
24        Economic Opportunity as "eligible for services"
25        pursuant to regulations promulgated in accordance with
26        Title II of the Job Training Partnership Act, Training

 

 

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1        Services for the Disadvantaged or Title III of the Job
2        Training Partnership Act, Employment and Training
3        Assistance for Dislocated Workers Program.
4            (B) Hired after the enterprise zone, River Edge
5        Redevelopment Zone, or federally designated Foreign
6        Trade Zone or Sub-Zone was designated or the trade or
7        business was located in that zone, whichever is later.
8            (C) Employed in the enterprise zone, River Edge
9        Redevelopment Zone, or Foreign Trade Zone or Sub-Zone.
10        An employee is employed in an enterprise zone or
11        federally designated Foreign Trade Zone or Sub-Zone if
12        his services are rendered there or it is the base of
13        operations for the services performed.
14            (D) A full-time employee working 30 or more hours
15        per week.
16        (4) For tax years ending on or after December 31, 1985
17    and prior to December 31, 1988, the credit shall be allowed
18    for the tax year in which the eligible employees are hired.
19    For tax years ending on or after December 31, 1988, the
20    credit shall be allowed for the tax year immediately
21    following the tax year in which the eligible employees are
22    hired. If the amount of the credit exceeds the tax
23    liability for that year, whether it exceeds the original
24    liability or the liability as later amended, such excess
25    may be carried forward and applied to the tax liability of
26    the 5 taxable years following the excess credit year. The

 

 

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1    credit shall be applied to the earliest year for which
2    there is a liability. If there is credit from more than one
3    tax year that is available to offset a liability, earlier
4    credit shall be applied first.
5        (5) The Department of Revenue shall promulgate such
6    rules and regulations as may be deemed necessary to carry
7    out the purposes of this subsection (g).
8        (6) The credit shall be available for eligible
9    employees hired on or after January 1, 1986.
10    (h) Investment credit; High Impact Business.
11        (1) Subject to subsections (b) and (b-5) of Section 5.5
12    of the Illinois Enterprise Zone Act, a taxpayer shall be
13    allowed a credit against the tax imposed by subsections (a)
14    and (b) of this Section for investment in qualified
15    property which is placed in service by a Department of
16    Commerce and Economic Opportunity designated High Impact
17    Business. The credit shall be .5% of the basis for such
18    property. The credit shall not be available (i) until the
19    minimum investments in qualified property set forth in
20    subdivision (a)(3)(A) of Section 5.5 of the Illinois
21    Enterprise Zone Act have been satisfied or (ii) until the
22    time authorized in subsection (b-5) of the Illinois
23    Enterprise Zone Act for entities designated as High Impact
24    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
25    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
26    Act, and shall not be allowed to the extent that it would

 

 

09600SB2505ham003- 27 -LRB096 16340 HLH 44944 a

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

 

 

09600SB2505ham003- 28 -LRB096 16340 HLH 44944 a

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

 

 

09600SB2505ham003- 29 -LRB096 16340 HLH 44944 a

1    property in the hands of the taxpayer within 48 months
2    after being placed in service, or the situs of any
3    qualified property is moved outside Illinois within 48
4    months after being placed in service, the tax imposed under
5    subsections (a) and (b) of this Section for such taxable
6    year shall be increased. Such increase shall be determined
7    by (i) recomputing the investment credit which would have
8    been allowed for the year in which credit for such property
9    was originally allowed by eliminating such property from
10    such computation, and (ii) subtracting such recomputed
11    credit from the amount of credit previously allowed. For
12    the purposes of this paragraph (6), a reduction of the
13    basis of qualified property resulting from a
14    redetermination of the purchase price shall be deemed a
15    disposition of qualified property to the extent of such
16    reduction.
17        (7) Beginning with tax years ending after December 31,
18    1996, if a taxpayer qualifies for the credit under this
19    subsection (h) and thereby is granted a tax abatement and
20    the taxpayer relocates its entire facility in violation of
21    the explicit terms and length of the contract under Section
22    18-183 of the Property Tax Code, the tax imposed under
23    subsections (a) and (b) of this Section shall be increased
24    for the taxable year in which the taxpayer relocated its
25    facility by an amount equal to the amount of credit
26    received by the taxpayer under this subsection (h).

 

 

09600SB2505ham003- 30 -LRB096 16340 HLH 44944 a

1    (i) Credit for Personal Property Tax Replacement Income
2Tax. For tax years ending prior to December 31, 2003, a credit
3shall be allowed against the tax imposed by subsections (a) and
4(b) of this Section for the tax imposed by subsections (c) and
5(d) of this Section. This credit shall be computed by
6multiplying the tax imposed by subsections (c) and (d) of this
7Section by a fraction, the numerator of which is base income
8allocable to Illinois and the denominator of which is Illinois
9base income, and further multiplying the product by the tax
10rate imposed by subsections (a) and (b) of this Section.
11    Any credit earned on or after December 31, 1986 under this
12subsection which is unused in the year the credit is computed
13because it exceeds the tax liability imposed by subsections (a)
14and (b) for that year (whether it exceeds the original
15liability or the liability as later amended) may be carried
16forward and applied to the tax liability imposed by subsections
17(a) and (b) of the 5 taxable years following the excess credit
18year, provided that no credit may be carried forward to any
19year ending on or after December 31, 2003. This credit shall be
20applied first to the earliest year for which there is a
21liability. If there is a credit under this subsection from more
22than one tax year that is available to offset a liability the
23earliest credit arising under this subsection shall be applied
24first.
25    If, during any taxable year ending on or after December 31,
261986, the tax imposed by subsections (c) and (d) of this

 

 

09600SB2505ham003- 31 -LRB096 16340 HLH 44944 a

1Section for which a taxpayer has claimed a credit under this
2subsection (i) is reduced, the amount of credit for such tax
3shall also be reduced. Such reduction shall be determined by
4recomputing the credit to take into account the reduced tax
5imposed by subsections (c) and (d). If any portion of the
6reduced amount of credit has been carried to a different
7taxable year, an amended return shall be filed for such taxable
8year to reduce the amount of credit claimed.
9    (j) Training expense credit. Beginning with tax years
10ending on or after December 31, 1986 and prior to December 31,
112003, a taxpayer shall be allowed a credit against the tax
12imposed by subsections (a) and (b) under this Section for all
13amounts paid or accrued, on behalf of all persons employed by
14the taxpayer in Illinois or Illinois residents employed outside
15of Illinois by a taxpayer, for educational or vocational
16training in semi-technical or technical fields or semi-skilled
17or skilled fields, which were deducted from gross income in the
18computation of taxable income. The credit against the tax
19imposed by subsections (a) and (b) shall be 1.6% of such
20training expenses. For partners, shareholders of subchapter S
21corporations, and owners of limited liability companies, if the
22liability company is treated as a partnership for purposes of
23federal and State income taxation, there shall be allowed a
24credit under this subsection (j) to be determined in accordance
25with the determination of income and distributive share of
26income under Sections 702 and 704 and subchapter S of the

 

 

09600SB2505ham003- 32 -LRB096 16340 HLH 44944 a

1Internal Revenue Code.
2    Any credit allowed under this subsection which is unused in
3the year the credit is earned may be carried forward to each of
4the 5 taxable years following the year for which the credit is
5first computed until it is used. This credit shall be applied
6first to the earliest year for which there is a liability. If
7there is a credit under this subsection from more than one tax
8year that is available to offset a liability the earliest
9credit arising under this subsection shall be applied first. No
10carryforward credit may be claimed in any tax year ending on or
11after December 31, 2003.
12    (k) Research and development credit.
13    For tax years ending after July 1, 1990 and prior to
14December 31, 2003, and beginning again for tax years ending on
15or after December 31, 2004, and ending prior to January 1,
162011, a taxpayer shall be allowed a credit against the tax
17imposed by subsections (a) and (b) of this Section for
18increasing research activities in this State. The credit
19allowed against the tax imposed by subsections (a) and (b)
20shall be equal to 6 1/2% of the qualifying expenditures for
21increasing research activities in this State. For partners,
22shareholders of subchapter S corporations, and owners of
23limited liability companies, if the liability company is
24treated as a partnership for purposes of federal and State
25income taxation, there shall be allowed a credit under this
26subsection to be determined in accordance with the

 

 

09600SB2505ham003- 33 -LRB096 16340 HLH 44944 a

1determination of income and distributive share of income under
2Sections 702 and 704 and subchapter S of the Internal Revenue
3Code.
4    For purposes of this subsection, "qualifying expenditures"
5means the qualifying expenditures as defined for the federal
6credit for increasing research activities which would be
7allowable under Section 41 of the Internal Revenue Code and
8which are conducted in this State, "qualifying expenditures for
9increasing research activities in this State" means the excess
10of qualifying expenditures for the taxable year in which
11incurred over qualifying expenditures for the base period,
12"qualifying expenditures for the base period" means the average
13of the qualifying expenditures for each year in the base
14period, and "base period" means the 3 taxable years immediately
15preceding the taxable year for which the determination is being
16made.
17    Any credit in excess of the tax liability for the taxable
18year may be carried forward. A taxpayer may elect to have the
19unused credit shown on its final completed return carried over
20as a credit against the tax liability for the following 5
21taxable years or until it has been fully used, whichever occurs
22first; provided that no credit earned in a tax year ending
23prior to December 31, 2003 may be carried forward to any year
24ending on or after December 31, 2003, and no credit may be
25carried forward to any taxable year ending on or after January
261, 2011.

 

 

09600SB2505ham003- 34 -LRB096 16340 HLH 44944 a

1    If an unused credit is carried forward to a given year from
22 or more earlier years, that credit arising in the earliest
3year will be applied first against the tax liability for the
4given year. If a tax liability for the given year still
5remains, the credit from the next earliest year will then be
6applied, and so on, until all credits have been used or no tax
7liability for the given year remains. Any remaining unused
8credit or credits then will be carried forward to the next
9following year in which a tax liability is incurred, except
10that no credit can be carried forward to a year which is more
11than 5 years after the year in which the expense for which the
12credit is given was incurred.
13    No inference shall be drawn from this amendatory Act of the
1491st General Assembly in construing this Section for taxable
15years beginning before January 1, 1999.
16    (l) Environmental Remediation Tax Credit.
17        (i) For tax years ending after December 31, 1997 and on
18    or before December 31, 2001, a taxpayer shall be allowed a
19    credit against the tax imposed by subsections (a) and (b)
20    of this Section for certain amounts paid for unreimbursed
21    eligible remediation costs, as specified in this
22    subsection. For purposes of this Section, "unreimbursed
23    eligible remediation costs" means costs approved by the
24    Illinois Environmental Protection Agency ("Agency") under
25    Section 58.14 of the Environmental Protection Act that were
26    paid in performing environmental remediation at a site for

 

 

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

 

 

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

 

 

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1    tax credit shall succeed to the unused credit and remaining
2    carry-forward period of the seller. To perfect the
3    transfer, the assignor shall record the transfer in the
4    chain of title for the site and provide written notice to
5    the Director of the Illinois Department of Revenue of the
6    assignor's intent to sell the remediation site and the
7    amount of the tax credit to be transferred as a portion of
8    the sale. In no event may a credit be transferred to any
9    taxpayer if the taxpayer or a related party would not be
10    eligible under the provisions of subsection (i).
11        (iii) For purposes of this Section, the term "site"
12    shall have the same meaning as under Section 58.2 of the
13    Environmental Protection Act.
14    (m) Education expense credit. Beginning with tax years
15ending after December 31, 1999, a taxpayer who is the custodian
16of one or more qualifying pupils shall be allowed a credit
17against the tax imposed by subsections (a) and (b) of this
18Section for qualified education expenses incurred on behalf of
19the qualifying pupils. The credit shall be equal to 25% of
20qualified education expenses, but in no event may the total
21credit under this subsection claimed by a family that is the
22custodian of qualifying pupils exceed $500. In no event shall a
23credit under this subsection reduce the taxpayer's liability
24under this Act to less than zero. This subsection is exempt
25from the provisions of Section 250 of this Act.
26    For purposes of this subsection:

 

 

09600SB2505ham003- 38 -LRB096 16340 HLH 44944 a

1    "Qualifying pupils" means individuals who (i) are
2residents of the State of Illinois, (ii) are under the age of
321 at the close of the school year for which a credit is
4sought, and (iii) during the school year for which a credit is
5sought were full-time pupils enrolled in a kindergarten through
6twelfth grade education program at any school, as defined in
7this subsection.
8    "Qualified education expense" means the amount incurred on
9behalf of a qualifying pupil in excess of $250 for tuition,
10book fees, and lab fees at the school in which the pupil is
11enrolled during the regular school year.
12    "School" means any public or nonpublic elementary or
13secondary school in Illinois that is in compliance with Title
14VI of the Civil Rights Act of 1964 and attendance at which
15satisfies the requirements of Section 26-1 of the School Code,
16except that nothing shall be construed to require a child to
17attend any particular public or nonpublic school to qualify for
18the credit under this Section.
19    "Custodian" means, with respect to qualifying pupils, an
20Illinois resident who is a parent, the parents, a legal
21guardian, or the legal guardians of the qualifying pupils.
22    (n) River Edge Redevelopment Zone site remediation tax
23credit.
24        (i) For tax years ending on or after December 31, 2006,
25    a taxpayer shall be allowed a credit against the tax
26    imposed by subsections (a) and (b) of this Section for

 

 

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

 

 

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1    persons disallowed a deduction for losses by paragraphs
2    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
3    Code by virtue of being a related taxpayer, as well as any
4    of its partners. The credit allowed against the tax imposed
5    by subsections (a) and (b) shall be equal to 25% of the
6    unreimbursed eligible remediation costs in excess of
7    $100,000 per site.
8        (ii) A credit allowed under this subsection that is
9    unused in the year the credit is earned may be carried
10    forward to each of the 5 taxable years following the year
11    for which the credit is first earned until it is used. This
12    credit shall be applied first to the earliest year for
13    which there is a liability. If there is a credit under this
14    subsection from more than one tax year that is available to
15    offset a liability, the earliest credit arising under this
16    subsection shall be applied first. A credit allowed under
17    this subsection may be sold to a buyer as part of a sale of
18    all or part of the remediation site for which the credit
19    was granted. The purchaser of a remediation site and the
20    tax credit shall succeed to the unused credit and remaining
21    carry-forward period of the seller. To perfect the
22    transfer, the assignor shall record the transfer in the
23    chain of title for the site and provide written notice to
24    the Director of the Illinois Department of Revenue of the
25    assignor's intent to sell the remediation site and the
26    amount of the tax credit to be transferred as a portion of

 

 

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1    the sale. In no event may a credit be transferred to any
2    taxpayer if the taxpayer or a related party would not be
3    eligible under the provisions of subsection (i).
4        (iii) For purposes of this Section, the term "site"
5    shall have the same meaning as under Section 58.2 of the
6    Environmental Protection Act.
7        (iv) This subsection is exempt from the provisions of
8    Section 250.
9(Source: P.A. 95-454, eff. 8-27-07; 96-115, eff. 7-31-09;
1096-116, eff. 7-31-09; 96-937, eff. 6-23-10; 96-1000, eff.
117-2-10.)
 
12    (35 ILCS 5/201.5 new)
13    Sec. 201.5. State spending limitation and tax reduction.
14    (a) If, beginning in State fiscal year 2012 and continuing
15through State fiscal year 2015, State spending for any fiscal
16year exceeds the State spending limitation set forth in
17subsection (b) of this Section, then the tax rates set forth in
18subsection (b) of Section 201 of this Act shall be reduced,
19according to the procedures set forth in this Section, to 3% of
20the taxpayer's net income for individuals, trusts, and estates
21and to 4.8% of the taxpayer's net income for corporations. For
22all taxable years following the taxable year in which the rate
23has been reduced pursuant to this Section, the tax rate set
24forth in subsection (b) of Section 201 of this Act shall be 3%
25of the taxpayer's net income for individuals, trusts, and

 

 

09600SB2505ham003- 42 -LRB096 16340 HLH 44944 a

1estates and 4.8% of the taxpayer's net income for corporations.
2    (b) The State spending limitation for fiscal years 2012
3through 2015 shall be as follows: (i) for fiscal year 2012,
4$36,818,000,000; (ii) for fiscal year 2013, $37,554,000,000;
5(iii) for fiscal year 2014, $38,305,000,000; and (iv) for
6fiscal year 2015, $39,072,000,000.
7    (c) Nothwithstanding any other provision of law to the
8contrary, the Auditor General shall examine each Public Act
9authorizing State spending from State general funds and prepare
10a report no later than 30 days after receiving notification of
11the Public Act from the Secretary of State or 60 days after the
12effective date of the Public Act, whichever is earlier. The
13Auditor General shall file the report with the Secretary of
14State and copies with the Governor, the State Treasurer, the
15State Comptroller, the Senate, and the House of
16Representatives. The report shall indicate: (i) the amount of
17State spending set forth in the applicable Public Act; (ii) the
18total amount of State spending authorized by law for the
19applicable fiscal year as of the date of the report; and (iii)
20whether State spending exceeds the State spending limitation
21set forth in subsection (b). The Auditor General may examine
22multiple Public Acts in one consolidated report, provided that
23each Public Act is examined within the time period mandated by
24this subsection (c). The Auditor General shall issue reports in
25accordance with this Section through June 30, 2015 or the
26effective date of a reduction in the rate of tax imposed by

 

 

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1subsections (a) and (b) of Section 201 of this Act pursuant to
2this Section, whichever is earlier.
3    At the request of the Auditor General, each State agency
4shall, without delay, make available to the Auditor General or
5his or her designated representative any record or information
6requested and shall provide for examination or copying all
7records, accounts, papers, reports, vouchers, correspondence,
8books and other documentation in the custody of that agency,
9including information stored in electronic data processing
10systems, which is related to or within the scope of a report
11prepared under this Section. The Auditor General shall report
12to the Governor each instance in which a State agency fails to
13cooperate promptly and fully with his or her office as required
14by this Section.
15    The Auditor General's report shall not be in the nature of
16a post-audit or examination and shall not lead to the issuance
17of an opinion as that term is defined in generally accepted
18government auditing standards.
19    (d) If the Auditor General reports that State spending has
20exceeded the State spending limitation set forth in subsection
21(b) and if the Governor has not been presented with a bill or
22bills passed by the General Assembly to reduce State spending
23to a level that does not exceed the State spending limitation
24within 45 calendar days of receipt of the Auditor General's
25report, then the Governor may, for the purpose of reducing
26State spending to a level that does not exceed the State

 

 

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1spending limitation set forth in subsection (b), designate
2amounts to be set aside as a reserve from the amounts
3appropriated from the State general funds for all boards,
4commissions, agencies, institutions, authorities, colleges,
5universities, and bodies politic and corporate of the State,
6but not other constitutional officers, the legislative or
7judicial branch, the office of the Executive Inspector General,
8or the Executive Ethics Commission. Such a designation must be
9made within 15 calendar days after the end of that 45-day
10period. If the Governor designates amounts to be set aside as a
11reserve, the Governor shall give notice of the designation to
12the Auditor General, the State Treasurer, the State
13Comptroller, the Senate, and the House of Representatives. The
14amounts placed in reserves shall not be transferred, obligated,
15encumbered, expended, or otherwise committed unless so
16authorized by law. Any amount placed in reserves is not State
17spending and shall not be considered when calculating the total
18amount of State spending. Any Public Act authorizing the use of
19amounts placed in reserve by the Governor is considered State
20spending, unless such Public Act authorizes the use of amounts
21placed in reserves in response to a fiscal emergency under
22subsection (g).
23    (e) If the Auditor General reports under subsection (c)
24that State spending has exceeded the State spending limitation
25set forth in subsection (b), then the Auditor General shall
26issue a supplemental report no sooner than the 61st day and no

 

 

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1later than the 65th day after issuing the report pursuant to
2subsection (c). The supplemental report shall: (i) summarize
3details of actions taken by the General Assembly and the
4Governor after the issuance of the initial report to reduce
5State spending, if any, (ii) indicate whether the level of
6State spending has changed since the initial report, and (iii)
7indicate whether State spending exceeds the State spending
8limitation. The Auditor General shall file the report with the
9Secretary of State and copies with the Governor, the State
10Treasurer, the State Comptroller, the Senate, and the House of
11Representatives. If the supplemental report of the Auditor
12General provides that State spending exceeds the State spending
13limitation, then the rate of tax imposed by subsections (a) and
14(b) of Section 201 is reduced as provided in this Section
15beginning on the first day of the first month to occur not less
16than 30 days after issuance of the supplemental report.
17    (f) For any taxable year in which the rates of tax have
18been reduced under this Section, the tax imposed by subsections
19(a) and (b) of Section 201 shall be determined as follows:
20        (1) In the case of an individual, trust, or estate, the
21    tax shall be imposed in an amount equal to the sum of (i)
22    the rate applicable to the taxpayer under subsection (b) of
23    Section 201 (without regard to the provisions of this
24    Section) times the taxpayer's net income for any portion of
25    the taxable year prior to the effective date of the
26    reduction and (ii) 3% of the taxpayer's net income for any

 

 

09600SB2505ham003- 46 -LRB096 16340 HLH 44944 a

1    portion of the taxable year on or after the effective date
2    of the reduction.
3        (2) In the case of a corporation, the tax shall be
4    imposed in an amount equal to the sum of (i) the rate
5    applicable to the taxpayer under subsection (b) of Section
6    201 (without regard to the provisions of this Section)
7    times the taxpayer's net income for any portion of the
8    taxable year prior to the effective date of the reduction
9    and (ii) 4.8% of the taxpayer's net income for any portion
10    of the taxable year on or after the effective date of the
11    reduction.
12        (3) For any taxpayer for whom the rate has been reduced
13    under this Section for a portion of a taxable year, the
14    taxpayer shall determine the net income for each portion of
15    the taxable year following the rules set forth in Section
16    202.5 of this Act, using the effective date of the rate
17    reduction rather than the January 1 dates found in that
18    Section, and the day before the effective date of the rate
19    reduction rather than the December 31 dates found in that
20    Section.
21        (4) If the rate applicable to the taxpayer under
22    subsection (b) of Section 201 (without regard to the
23    provisions of this Section) changes during a portion of the
24    taxable year to which that rate is applied under paragraphs
25    (1) or (2) of this subsection (f), the tax for that portion
26    of the taxable year for purposes of paragraph (1) or (2) of

 

 

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1    this subsection (f) shall be determined as if that portion
2    of the taxable year were a separate taxable year, following
3    the rules set forth in Section 202.5 of this Act. If the
4    taxpayer elects to follow the rules set forth in subsection
5    (b) of Section 202.5, the taxpayer shall follow the rules
6    set forth in subsection (b) of Section 202.5 for all
7    purposes of this Section for that taxable year.
8    (g) Notwithstanding the State spending limitation set
9forth in subsection (b) of this Section, the Governor may
10declare a fiscal emergency by filing a declaration with the
11Secretary of State and copies with the State Treasurer, the
12State Comptroller, the Senate, and the House of
13Representatives. The declaration must be limited to only one
14State fiscal year, set forth compelling reasons for declaring a
15fiscal emergency, and request a specific dollar amount. Unless,
16within 10 calendar days of receipt of the Governor's
17declaration, the State Comptroller or State Treasurer notifies
18the Senate and the House of Representatives that he or she does
19not concur in the Governor's declaration, State spending
20authorized by law to address the fiscal emergency in an amount
21no greater than the dollar amount specified in the declaration
22shall not be considered "State spending" for purposes of the
23State spending limitation.
24    (h) As used in this Section:
25    "State general funds" means the General Revenue Fund, the
26Common School Fund, the General Revenue Common School Special

 

 

09600SB2505ham003- 48 -LRB096 16340 HLH 44944 a

1Account Fund, the Education Assistance Fund, and the Budget
2Stabilization Fund.
3    "State spending" means (i) the total amount authorized for
4spending by appropriation or statutory transfer from the State
5general funds in the applicable fiscal year, and (ii) any
6amounts the Governor places in reserves in accordance with
7subsection (d) that are subsequently released from reserves
8following authorization by a Public Act. For the purpose of
9this definition, "appropriation" means authority to spend
10money from a State general fund for a specific amount, purpose,
11and time period, including any supplemental appropriation or
12continuing appropriation, but does not include
13reappropriations from a previous fiscal year. For the purpose
14of this definition, "statutory transfer" means authority to
15transfer funds from one State general fund to any other fund in
16the State Treasury, but does not include transfers made from
17one State general fund to another State general fund.
18    "State spending limitation" means the amount described in
19subsection (b) of this Section for the applicable fiscal year.
 
20    (35 ILCS 5/202.5 new)
21    Sec. 202.5. Net income attributable to the period beginning
22prior to January 1 of any year and ending after December 31 of
23the preceding year.
24    (a) In general. With respect to the taxable year of a
25taxpayer beginning prior to January 1 of any year and ending

 

 

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1after December 31 of the preceding year, net income for the
2period after December 31 of the preceding year, is that amount
3that bears the same ratio to the taxpayer's net income for the
4entire taxable year as the number of days in that taxable year
5after December 31 bears to the total number of days in that
6taxable year, and the net income for the period prior to
7January 1 is that amount that bears the same ratio to the
8taxpayer's net income for the entire taxable year as the number
9of days in that taxable year prior to January 1 bears to the
10total number of days in that taxable year.
11    (b) Election to attribute income and deduction items
12specifically to the respective portions of a taxable year prior
13to January 1 of any year and after December 31 of the preceding
14year. In the case of a taxpayer with a taxable year beginning
15prior to January 1 of any year and ending after December 31 of
16the preceding year, the taxpayer may elect, instead of the
17procedure established in subsection (a) of this Section, to
18determine net income on a specific accounting basis for the 2
19portions of the taxable year:
20        (1) from the beginning of the taxable year through
21    December 31; and
22        (2) from January 1 through the end of the taxable year.
23    The election provided by this subsection must be made in
24form and manner that the Department requires by rule, and must
25be made no later than the due date (including any extensions
26thereof) for the filing of the return for the taxable year, and

 

 

09600SB2505ham003- 50 -LRB096 16340 HLH 44944 a

1is irrevocable.
2    (c) If the taxpayer elects specific accounting under
3subsection (b):
4        (1) there shall be taken into account in computing base
5    income for each of the 2 portions of the taxable year only
6    those items earned, received, paid, incurred or accrued in
7    each such period;
8        (2) for purposes of apportioning business income of the
9    taxpayer, the provisions in Article 3 shall be applied on
10    the basis of the taxpayer's full taxable year, without
11    regard to this Section;
12        (3) the net loss carryforward deduction for the taxable
13    year under Section 207 may not exceed combined net income
14    of both portions of the taxable year, and shall be used
15    against the net income of the portion of the taxable year
16    from the beginning of the taxable year through December 31
17    before any remaining amount is used against the net income
18    of the latter portion of the taxable year.
 
19    (35 ILCS 5/207)  (from Ch. 120, par. 2-207)
20    Sec. 207. Net Losses.
21    (a) If after applying all of the (i) modifications provided
22for in paragraph (2) of Section 203(b), paragraph (2) of
23Section 203(c) and paragraph (2) of Section 203(d) and (ii) the
24allocation and apportionment provisions of Article 3 of this
25Act and subsection (c) of this Section, the taxpayer's net

 

 

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1income results in a loss;
2        (1) for any taxable year ending prior to December 31,
3    1999, such loss shall be allowed as a carryover or
4    carryback deduction in the manner allowed under Section 172
5    of the Internal Revenue Code;
6        (2) for any taxable year ending on or after December
7    31, 1999 and prior to December 31, 2003, such loss shall be
8    allowed as a carryback to each of the 2 taxable years
9    preceding the taxable year of such loss and shall be a net
10    operating loss carryover to each of the 20 taxable years
11    following the taxable year of such loss; and
12        (3) for any taxable year ending on or after December
13    31, 2003, such loss shall be allowed as a net operating
14    loss carryover to each of the 12 taxable years following
15    the taxable year of such loss, except as provided in
16    subsection (d).
17    (a-5) Election to relinquish carryback and order of
18application of losses.
19            (A) For losses incurred in tax years ending prior
20        to December 31, 2003, the taxpayer may elect to
21        relinquish the entire carryback period with respect to
22        such loss. Such election shall be made in the form and
23        manner prescribed by the Department and shall be made
24        by the due date (including extensions of time) for
25        filing the taxpayer's return for the taxable year in
26        which such loss is incurred, and such election, once

 

 

09600SB2505ham003- 52 -LRB096 16340 HLH 44944 a

1        made, shall be irrevocable.
2            (B) The entire amount of such loss shall be carried
3        to the earliest taxable year to which such loss may be
4        carried. The amount of such loss which shall be carried
5        to each of the other taxable years shall be the excess,
6        if any, of the amount of such loss over the sum of the
7        deductions for carryback or carryover of such loss
8        allowable for each of the prior taxable years to which
9        such loss may be carried.
10    (b) Any loss determined under subsection (a) of this
11Section must be carried back or carried forward in the same
12manner for purposes of subsections (a) and (b) of Section 201
13of this Act as for purposes of subsections (c) and (d) of
14Section 201 of this Act.
15    (c) Notwithstanding any other provision of this Act, for
16each taxable year ending on or after December 31, 2008, for
17purposes of computing the loss for the taxable year under
18subsection (a) of this Section and the deduction taken into
19account for the taxable year for a net operating loss carryover
20under paragraphs (1), (2), and (3) of subsection (a) of this
21Section, the loss and net operating loss carryover shall be
22reduced in an amount equal to the reduction to the net
23operating loss and net operating loss carryover to the taxable
24year, respectively, required under Section 108(b)(2)(A) of the
25Internal Revenue Code, multiplied by a fraction, the numerator
26of which is the amount of discharge of indebtedness income that

 

 

09600SB2505ham003- 53 -LRB096 16340 HLH 44944 a

1is excluded from gross income for the taxable year (but only if
2the taxable year ends on or after December 31, 2008) under
3Section 108(a) of the Internal Revenue Code and that would have
4been allocated and apportioned to this State under Article 3 of
5this Act but for that exclusion, and the denominator of which
6is the total amount of discharge of indebtedness income
7excluded from gross income under Section 108(a) of the Internal
8Revenue Code for the taxable year. The reduction required under
9this subsection (c) shall be made after the determination of
10Illinois net income for the taxable year in which the
11indebtedness is discharged.
12    (d) In the case of a corporation (other than a Subchapter S
13corporation), no carryover deduction shall be allowed under
14this Section for any taxable year ending after December 31,
152010 and prior to December 31, 2014; provided that, for
16purposes of determining the taxable years to which a net loss
17may be carried under subsection (a) of this Section, no taxable
18year for which a deduction is disallowed under this subsection
19shall be counted.
20(Source: P.A. 95-233, eff. 8-16-07.)
 
21    (35 ILCS 5/804)  (from Ch. 120, par. 8-804)
22    Sec. 804. Failure to Pay Estimated Tax.
23    (a) In general. In case of any underpayment of estimated
24tax by a taxpayer, except as provided in subsection (d) or (e),
25the taxpayer shall be liable to a penalty in an amount

 

 

09600SB2505ham003- 54 -LRB096 16340 HLH 44944 a

1determined at the rate prescribed by Section 3-3 of the Uniform
2Penalty and Interest Act upon the amount of the underpayment
3(determined under subsection (b)) for each required
4installment.
5    (b) Amount of underpayment. For purposes of subsection (a),
6the amount of the underpayment shall be the excess of:
7        (1) the amount of the installment which would be
8    required to be paid under subsection (c), over
9        (2) the amount, if any, of the installment paid on or
10    before the last date prescribed for payment.
11    (c) Amount of Required Installments.
12        (1) Amount.
13            (A) In General. Except as provided in paragraph
14        (2), the amount of any required installment shall be
15        25% of the required annual payment.
16            (B) Required Annual Payment. For purposes of
17        subparagraph (A), the term "required annual payment"
18        means the lesser of
19                (i) 90% of the tax shown on the return for the
20            taxable year, or if no return is filed, 90% of the
21            tax for such year, or
22                (ii) for installments due prior to February 1,
23            2011, and after January 31, 2012, 100% of the tax
24            shown on the return of the taxpayer for the
25            preceding taxable year if a return showing a
26            liability for tax was filed by the taxpayer for the

 

 

09600SB2505ham003- 55 -LRB096 16340 HLH 44944 a

1            preceding taxable year and such preceding year was
2            a taxable year of 12 months; or .
3                (iii) for installments due after January 31,
4            2011, and prior to February 1, 2012, 150% of the
5            tax shown on the return of the taxpayer for the
6            preceding taxable year if a return showing a
7            liability for tax was filed by the taxpayer for the
8            preceding taxable year and such preceding year was
9            a taxable year of 12 months.
10        (2) Lower Required Installment where Annualized Income
11    Installment is Less Than Amount Determined Under Paragraph
12    (1).
13            (A) In General. In the case of any required
14        installment if a taxpayer establishes that the
15        annualized income installment is less than the amount
16        determined under paragraph (1),
17                (i) the amount of such required installment
18            shall be the annualized income installment, and
19                (ii) any reduction in a required installment
20            resulting from the application of this
21            subparagraph shall be recaptured by increasing the
22            amount of the next required installment determined
23            under paragraph (1) by the amount of such
24            reduction, and by increasing subsequent required
25            installments to the extent that the reduction has
26            not previously been recaptured under this clause.

 

 

09600SB2505ham003- 56 -LRB096 16340 HLH 44944 a

1            (B) Determination of Annualized Income
2        Installment. In the case of any required installment,
3        the annualized income installment is the excess, if
4        any, of
5                (i) an amount equal to the applicable
6            percentage of the tax for the taxable year computed
7            by placing on an annualized basis the net income
8            for months in the taxable year ending before the
9            due date for the installment, over
10                (ii) the aggregate amount of any prior
11            required installments for the taxable year.
12            (C) Applicable Percentage.
13        In the case of the followingThe applicable
14        required installments:percentage is:
15        1st ...............................22.5%
16        2nd ...............................45%
17        3rd ...............................67.5%
18        4th ...............................90%
19            (D) Annualized Net Income; Individuals. For
20        individuals, net income shall be placed on an
21        annualized basis by:
22                (i) multiplying by 12, or in the case of a
23            taxable year of less than 12 months, by the number
24            of months in the taxable year, the net income
25            computed without regard to the standard exemption
26            for the months in the taxable year ending before

 

 

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1            the month in which the installment is required to
2            be paid;
3                (ii) dividing the resulting amount by the
4            number of months in the taxable year ending before
5            the month in which such installment date falls; and
6                (iii) deducting from such amount the standard
7            exemption allowable for the taxable year, such
8            standard exemption being determined as of the last
9            date prescribed for payment of the installment.
10            (E) Annualized Net Income; Corporations. For
11        corporations, net income shall be placed on an
12        annualized basis by multiplying by 12 the taxable
13        income
14                (i) for the first 3 months of the taxable year,
15            in the case of the installment required to be paid
16            in the 4th month,
17                (ii) for the first 3 months or for the first 5
18            months of the taxable year, in the case of the
19            installment required to be paid in the 6th month,
20                (iii) for the first 6 months or for the first 8
21            months of the taxable year, in the case of the
22            installment required to be paid in the 9th month,
23            and
24                (iv) for the first 9 months or for the first 11
25            months of the taxable year, in the case of the
26            installment required to be paid in the 12th month

 

 

09600SB2505ham003- 58 -LRB096 16340 HLH 44944 a

1            of the taxable year,
2        then dividing the resulting amount by the number of
3        months in the taxable year (3, 5, 6, 8, 9, or 11 as the
4        case may be).
5    (d) Exceptions. Notwithstanding the provisions of the
6preceding subsections, the penalty imposed by subsection (a)
7shall not be imposed if the taxpayer was not required to file
8an Illinois income tax return for the preceding taxable year,
9or, for individuals, if the taxpayer had no tax liability for
10the preceding taxable year and such year was a taxable year of
1112 months. The penalty imposed by subsection (a) shall also not
12be imposed on any underpayments of estimated tax due before the
13effective date of this amendatory Act of 1998 which
14underpayments are solely attributable to the change in
15apportionment from subsection (a) to subsection (h) of Section
16304. The provisions of this amendatory Act of 1998 apply to tax
17years ending on or after December 31, 1998.
18    (e) The penalty imposed for underpayment of estimated tax
19by subsection (a) of this Section shall not be imposed to the
20extent that the Director or his or her designate determines,
21pursuant to Section 3-8 of the Uniform Penalty and Interest Act
22that the penalty should not be imposed.
23    (f) Definition of tax. For purposes of subsections (b) and
24(c), the term "tax" means the excess of the tax imposed under
25Article 2 of this Act, over the amounts credited against such
26tax under Sections 601(b) (3) and (4).

 

 

09600SB2505ham003- 59 -LRB096 16340 HLH 44944 a

1    (g) Application of Section in case of tax withheld under
2Article 7. For purposes of applying this Section:
3        (1) in the case of an individual, tax withheld from
4    compensation for the taxable year shall be deemed a payment
5    of estimated tax, and an equal part of such amount shall be
6    deemed paid on each installment date for such taxable year,
7    unless the taxpayer establishes the dates on which all
8    amounts were actually withheld, in which case the amounts
9    so withheld shall be deemed payments of estimated tax on
10    the dates on which such amounts were actually withheld;
11        (2) amounts timely paid by a partnership, Subchapter S
12    corporation, or trust on behalf of a partner, shareholder,
13    or beneficiary pursuant to subsection (f) of Section 502 or
14    Section 709.5 and claimed as a payment of estimated tax
15    shall be deemed a payment of estimated tax made on the last
16    day of the taxable year of the partnership, Subchapter S
17    corporation, or trust for which the income from the
18    withholding is made was computed; and
19        (3) all other amounts pursuant to Article 7 shall be
20    deemed a payment of estimated tax on the date the payment
21    is made to the taxpayer of the amount from which the tax is
22    withheld.
23    (g-5) Amounts withheld under the State Salary and Annuity
24Withholding Act. An individual who has amounts withheld under
25paragraph (10) of Section 4 of the State Salary and Annuity
26Withholding Act may elect to have those amounts treated as

 

 

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1payments of estimated tax made on the dates on which those
2amounts are actually withheld.
3    (i) Short taxable year. The application of this Section to
4taxable years of less than 12 months shall be in accordance
5with regulations prescribed by the Department.
6    The changes in this Section made by Public Act 84-127 shall
7apply to taxable years ending on or after January 1, 1986.
8(Source: P.A. 95-233, eff. 8-16-07.)
 
9    (35 ILCS 5/901)  (from Ch. 120, par. 9-901)
10    Sec. 901. Collection Authority.
11    (a) In general.
12    The Department shall collect the taxes imposed by this Act.
13The Department shall collect certified past due child support
14amounts under Section 2505-650 of the Department of Revenue Law
15(20 ILCS 2505/2505-650). Except as provided in subsections (c),
16and (e), (f), and (g) of this Section, money collected pursuant
17to subsections (a) and (b) of Section 201 of this Act shall be
18paid into the General Revenue Fund in the State treasury; money
19collected pursuant to subsections (c) and (d) of Section 201 of
20this Act shall be paid into the Personal Property Tax
21Replacement Fund, a special fund in the State Treasury; and
22money collected under Section 2505-650 of the Department of
23Revenue Law (20 ILCS 2505/2505-650) shall be paid into the
24Child Support Enforcement Trust Fund, a special fund outside
25the State Treasury, or to the State Disbursement Unit

 

 

09600SB2505ham003- 61 -LRB096 16340 HLH 44944 a

1established under Section 10-26 of the Illinois Public Aid
2Code, as directed by the Department of Healthcare and Family
3Services.
4    (b) Local Government Distributive Fund.
5    Beginning August 1, 1969, and continuing through June 30,
61994, the Treasurer shall transfer each month from the General
7Revenue Fund to a special fund in the State treasury, to be
8known as the "Local Government Distributive Fund", an amount
9equal to 1/12 of the net revenue realized from the tax imposed
10by subsections (a) and (b) of Section 201 of this Act during
11the preceding month. Beginning July 1, 1994, and continuing
12through June 30, 1995, the Treasurer shall transfer each month
13from the General Revenue Fund to the Local Government
14Distributive Fund an amount equal to 1/11 of the net revenue
15realized from the tax imposed by subsections (a) and (b) of
16Section 201 of this Act during the preceding month. Beginning
17July 1, 1995 and continuing through January 31, 2011, the
18Treasurer shall transfer each month from the General Revenue
19Fund to the Local Government Distributive Fund an amount equal
20to the net of (i) 1/10 of the net revenue realized from the tax
21imposed by subsections (a) and (b) of Section 201 of the
22Illinois Income Tax Act during the preceding month (ii) minus,
23beginning July 1, 2003 and ending June 30, 2004, $6,666,666,
24and beginning July 1, 2004, zero. Beginning February 1, 2011,
25and continuing through January 31, 2015, the Treasurer shall
26transfer each month from the General Revenue Fund to the Local

 

 

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1Government Distributive Fund an amount equal to the sum of (i)
26% (10% of the ratio of the 3% individual income tax rate prior
3to 2011 to the 5% individual income tax rate after 2010) of the
4net revenue realized from the tax imposed by subsections (a)
5and (b) of Section 201 of this Act upon individuals, trusts,
6and estates during the preceding month and (ii) 6.86% (10% of
7the ratio of the 4.8% corporate income tax rate prior to 2011
8to the 7% corporate income tax rate after 2010) of the net
9revenue realized from the tax imposed by subsections (a) and
10(b) of Section 201 of this Act upon corporations during the
11preceding month. Beginning February 1, 2015 and continuing
12through January 31, 2025, the Treasurer shall transfer each
13month from the General Revenue Fund to the Local Government
14Distributive Fund an amount equal to the sum of (i) 8% (10% of
15the ratio of the 3% individual income tax rate prior to 2011 to
16the 3.75% individual income tax rate after 2014) of the net
17revenue realized from the tax imposed by subsections (a) and
18(b) of Section 201 of this Act upon individuals, trusts, and
19estates during the preceding month and (ii) 9.14% (10% of the
20ratio of the 4.8% corporate income tax rate prior to 2011 to
21the 5.25% corporate income tax rate after 2014) of the net
22revenue realized from the tax imposed by subsections (a) and
23(b) of Section 201 of this Act upon corporations during the
24preceding month. Beginning February 1, 2025, the Treasurer
25shall transfer each month from the General Revenue Fund to the
26Local Government Distributive Fund an amount equal to the sum

 

 

09600SB2505ham003- 63 -LRB096 16340 HLH 44944 a

1of (i) 9.23% (10% of the ratio of the 3% individual income tax
2rate prior to 2011 to the 3.25% individual income tax rate
3after 2024) of the net revenue realized from the tax imposed by
4subsections (a) and (b) of Section 201 of this Act upon
5individuals, trusts, and estates during the preceding month and
6(ii) 10% of the net revenue realized from the tax imposed by
7subsections (a) and (b) of Section 201 of this Act upon
8corporations during the preceding month. Net revenue realized
9for a month shall be defined as the revenue from the tax
10imposed by subsections (a) and (b) of Section 201 of this Act
11which is deposited in the General Revenue Fund, the Education
12Educational Assistance Fund, and the Income Tax Surcharge Local
13Government Distributive Fund, the Fund for the Advancement of
14Education, and the Commitment to Human Services Fund during the
15month minus the amount paid out of the General Revenue Fund in
16State warrants during that same month as refunds to taxpayers
17for overpayment of liability under the tax imposed by
18subsections (a) and (b) of Section 201 of this Act.
19    (c) Deposits Into Income Tax Refund Fund.
20        (1) Beginning on January 1, 1989 and thereafter, the
21    Department shall deposit a percentage of the amounts
22    collected pursuant to subsections (a) and (b)(1), (2), and
23    (3), of Section 201 of this Act into a fund in the State
24    treasury known as the Income Tax Refund Fund. The
25    Department shall deposit 6% of such amounts during the
26    period beginning January 1, 1989 and ending on June 30,

 

 

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1    1989. Beginning with State fiscal year 1990 and for each
2    fiscal year thereafter, the percentage deposited into the
3    Income Tax Refund Fund during a fiscal year shall be the
4    Annual Percentage. For fiscal years 1999 through 2001, the
5    Annual Percentage shall be 7.1%. For fiscal year 2003, the
6    Annual Percentage shall be 8%. For fiscal year 2004, the
7    Annual Percentage shall be 11.7%. Upon the effective date
8    of this amendatory Act of the 93rd General Assembly, the
9    Annual Percentage shall be 10% for fiscal year 2005. For
10    fiscal year 2006, the Annual Percentage shall be 9.75%. For
11    fiscal year 2007, the Annual Percentage shall be 9.75%. For
12    fiscal year 2008, the Annual Percentage shall be 7.75%. For
13    fiscal year 2009, the Annual Percentage shall be 9.75%. For
14    fiscal year 2010, the Annual Percentage shall be 9.75%. For
15    fiscal year 2011, the Annual Percentage shall be 8.75%. For
16    all other fiscal years, the Annual Percentage shall be
17    calculated as a fraction, the numerator of which shall be
18    the amount of refunds approved for payment by the
19    Department during the preceding fiscal year as a result of
20    overpayment of tax liability under subsections (a) and
21    (b)(1), (2), and (3) of Section 201 of this Act plus the
22    amount of such refunds remaining approved but unpaid at the
23    end of the preceding fiscal year, minus the amounts
24    transferred into the Income Tax Refund Fund from the
25    Tobacco Settlement Recovery Fund, and the denominator of
26    which shall be the amounts which will be collected pursuant

 

 

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1    to subsections (a) and (b)(1), (2), and (3) of Section 201
2    of this Act during the preceding fiscal year; except that
3    in State fiscal year 2002, the Annual Percentage shall in
4    no event exceed 7.6%. The Director of Revenue shall certify
5    the Annual Percentage to the Comptroller on the last
6    business day of the fiscal year immediately preceding the
7    fiscal year for which it is to be effective.
8        (2) Beginning on January 1, 1989 and thereafter, the
9    Department shall deposit a percentage of the amounts
10    collected pursuant to subsections (a) and (b)(6), (7), and
11    (8), (c) and (d) of Section 201 of this Act into a fund in
12    the State treasury known as the Income Tax Refund Fund. The
13    Department shall deposit 18% of such amounts during the
14    period beginning January 1, 1989 and ending on June 30,
15    1989. Beginning with State fiscal year 1990 and for each
16    fiscal year thereafter, the percentage deposited into the
17    Income Tax Refund Fund during a fiscal year shall be the
18    Annual Percentage. For fiscal years 1999, 2000, and 2001,
19    the Annual Percentage shall be 19%. For fiscal year 2003,
20    the Annual Percentage shall be 27%. For fiscal year 2004,
21    the Annual Percentage shall be 32%. Upon the effective date
22    of this amendatory Act of the 93rd General Assembly, the
23    Annual Percentage shall be 24% for fiscal year 2005. For
24    fiscal year 2006, the Annual Percentage shall be 20%. For
25    fiscal year 2007, the Annual Percentage shall be 17.5%. For
26    fiscal year 2008, the Annual Percentage shall be 15.5%. For

 

 

09600SB2505ham003- 66 -LRB096 16340 HLH 44944 a

1    fiscal year 2009, the Annual Percentage shall be 17.5%. For
2    fiscal year 2010, the Annual Percentage shall be 17.5%. For
3    fiscal year 2011, the Annual Percentage shall be 17.5%. For
4    all other fiscal years, the Annual Percentage shall be
5    calculated as a fraction, the numerator of which shall be
6    the amount of refunds approved for payment by the
7    Department during the preceding fiscal year as a result of
8    overpayment of tax liability under subsections (a) and
9    (b)(6), (7), and (8), (c) and (d) of Section 201 of this
10    Act plus the amount of such refunds remaining approved but
11    unpaid at the end of the preceding fiscal year, and the
12    denominator of which shall be the amounts which will be
13    collected pursuant to subsections (a) and (b)(6), (7), and
14    (8), (c) and (d) of Section 201 of this Act during the
15    preceding fiscal year; except that in State fiscal year
16    2002, the Annual Percentage shall in no event exceed 23%.
17    The Director of Revenue shall certify the Annual Percentage
18    to the Comptroller on the last business day of the fiscal
19    year immediately preceding the fiscal year for which it is
20    to be effective.
21        (3) The Comptroller shall order transferred and the
22    Treasurer shall transfer from the Tobacco Settlement
23    Recovery Fund to the Income Tax Refund Fund (i) $35,000,000
24    in January, 2001, (ii) $35,000,000 in January, 2002, and
25    (iii) $35,000,000 in January, 2003.
26    (d) Expenditures from Income Tax Refund Fund.

 

 

09600SB2505ham003- 67 -LRB096 16340 HLH 44944 a

1        (1) Beginning January 1, 1989, money in the Income Tax
2    Refund Fund shall be expended exclusively for the purpose
3    of paying refunds resulting from overpayment of tax
4    liability under Section 201 of this Act, for paying rebates
5    under Section 208.1 in the event that the amounts in the
6    Homeowners' Tax Relief Fund are insufficient for that
7    purpose, and for making transfers pursuant to this
8    subsection (d).
9        (2) The Director shall order payment of refunds
10    resulting from overpayment of tax liability under Section
11    201 of this Act from the Income Tax Refund Fund only to the
12    extent that amounts collected pursuant to Section 201 of
13    this Act and transfers pursuant to this subsection (d) and
14    item (3) of subsection (c) have been deposited and retained
15    in the Fund.
16        (3) As soon as possible after the end of each fiscal
17    year, the Director shall order transferred and the State
18    Treasurer and State Comptroller shall transfer from the
19    Income Tax Refund Fund to the Personal Property Tax
20    Replacement Fund an amount, certified by the Director to
21    the Comptroller, equal to the excess of the amount
22    collected pursuant to subsections (c) and (d) of Section
23    201 of this Act deposited into the Income Tax Refund Fund
24    during the fiscal year over the amount of refunds resulting
25    from overpayment of tax liability under subsections (c) and
26    (d) of Section 201 of this Act paid from the Income Tax

 

 

09600SB2505ham003- 68 -LRB096 16340 HLH 44944 a

1    Refund Fund during the fiscal year.
2        (4) As soon as possible after the end of each fiscal
3    year, the Director shall order transferred and the State
4    Treasurer and State Comptroller shall transfer from the
5    Personal Property Tax Replacement Fund to the Income Tax
6    Refund Fund an amount, certified by the Director to the
7    Comptroller, equal to the excess of the amount of refunds
8    resulting from overpayment of tax liability under
9    subsections (c) and (d) of Section 201 of this Act paid
10    from the Income Tax Refund Fund during the fiscal year over
11    the amount collected pursuant to subsections (c) and (d) of
12    Section 201 of this Act deposited into the Income Tax
13    Refund Fund during the fiscal year.
14        (4.5) As soon as possible after the end of fiscal year
15    1999 and of each fiscal year thereafter, the Director shall
16    order transferred and the State Treasurer and State
17    Comptroller shall transfer from the Income Tax Refund Fund
18    to the General Revenue Fund any surplus remaining in the
19    Income Tax Refund Fund as of the end of such fiscal year;
20    excluding for fiscal years 2000, 2001, and 2002 amounts
21    attributable to transfers under item (3) of subsection (c)
22    less refunds resulting from the earned income tax credit.
23        (5) This Act shall constitute an irrevocable and
24    continuing appropriation from the Income Tax Refund Fund
25    for the purpose of paying refunds upon the order of the
26    Director in accordance with the provisions of this Section.

 

 

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1    (e) Deposits into the Education Assistance Fund and the
2Income Tax Surcharge Local Government Distributive Fund.
3    On July 1, 1991, and thereafter, of the amounts collected
4pursuant to subsections (a) and (b) of Section 201 of this Act,
5minus deposits into the Income Tax Refund Fund, the Department
6shall deposit 7.3% into the Education Assistance Fund in the
7State Treasury. Beginning July 1, 1991, and continuing through
8January 31, 1993, of the amounts collected pursuant to
9subsections (a) and (b) of Section 201 of the Illinois Income
10Tax Act, minus deposits into the Income Tax Refund Fund, the
11Department shall deposit 3.0% into the Income Tax Surcharge
12Local Government Distributive Fund in the State Treasury.
13Beginning February 1, 1993 and continuing through June 30,
141993, of the amounts collected pursuant to subsections (a) and
15(b) of Section 201 of the Illinois Income Tax Act, minus
16deposits into the Income Tax Refund Fund, the Department shall
17deposit 4.4% into the Income Tax Surcharge Local Government
18Distributive Fund in the State Treasury. Beginning July 1,
191993, and continuing through June 30, 1994, of the amounts
20collected under subsections (a) and (b) of Section 201 of this
21Act, minus deposits into the Income Tax Refund Fund, the
22Department shall deposit 1.475% into the Income Tax Surcharge
23Local Government Distributive Fund in the State Treasury.
24    (f) Deposits into the Fund for the Advancement of
25Education. Beginning February 1, 2015, the Department shall
26deposit the following portions of the revenue realized from the

 

 

09600SB2505ham003- 70 -LRB096 16340 HLH 44944 a

1tax imposed upon individuals, trusts, and estates by
2subsections (a) and (b) of Section 201 of this Act during the
3preceding month, minus deposits into the Income Tax Refund
4Fund, into the Fund for the Advancement of Education:
5        (1) beginning February 1, 2015, and prior to February
6    1, 2025, 1/30; and
7        (2) beginning February 1, 2025, 1/26.
8    If the rate of tax imposed by subsection (a) and (b) of
9Section 201 is reduced pursuant to Section 201.5 of this Act,
10the Department shall not make the deposits required by this
11subsection (f) on or after the effective date of the reduction.
12    (g) Deposits into the Commitment to Human Services Fund.
13Beginning February 1, 2015, the Department shall deposit the
14following portions of the revenue realized from the tax imposed
15upon individuals, trusts, and estates by subsections (a) and
16(b) of Section 201 of this Act during the preceding month,
17minus deposits into the Income Tax Refund Fund, into the
18Commitment to Human Services Fund:
19        (1) beginning February 1, 2015, and prior to February
20    1, 2025, 1/30; and
21        (2) beginning February 1, 2025, 1/26.
22    If the rate of tax imposed by subsection (a) and (b) of
23Section 201 is reduced pursuant to Section 201.5 of this Act,
24the Department shall not make the deposits required by this
25subsection (g) on or after the effective date of the reduction.
26(Source: P.A. 95-707, eff. 1-11-08; 95-744, eff. 7-18-08;

 

 

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196-45, eff. 7-15-09; 96-328, eff. 8-11-09; 96-959, eff.
27-1-10.)
 
3    Section 25. The Illinois Estate and Generation-Skipping
4Transfer Tax Act is amended by changing Section 2 as follows:
 
5    (35 ILCS 405/2)  (from Ch. 120, par. 405A-2)
6    Sec. 2. Definitions.
7    "Federal estate tax" means the tax due to the United States
8with respect to a taxable transfer under Chapter 11 of the
9Internal Revenue Code.
10    "Federal generation-skipping transfer tax" means the tax
11due to the United States with respect to a taxable transfer
12under Chapter 13 of the Internal Revenue Code.
13    "Federal return" means the federal estate tax return with
14respect to the federal estate tax and means the federal
15generation-skipping transfer tax return with respect to the
16federal generation-skipping transfer tax.
17    "Federal transfer tax" means the federal estate tax or the
18federal generation-skipping transfer tax.
19    "Illinois estate tax" means the tax due to this State with
20respect to a taxable transfer.
21    "Illinois generation-skipping transfer tax" means the tax
22due to this State with respect to a taxable transfer that gives
23rise to a federal generation-skipping transfer tax.
24    "Illinois transfer tax" means the Illinois estate tax or

 

 

09600SB2505ham003- 72 -LRB096 16340 HLH 44944 a

1the Illinois generation-skipping transfer tax.
2    "Internal Revenue Code" means, unless otherwise provided,
3the Internal Revenue Code of 1986, as amended from time to
4time.
5    "Non-resident trust" means a trust that is not a resident
6of this State for purposes of the Illinois Income Tax Act, as
7amended from time to time.
8    "Person" means and includes any individual, trust, estate,
9partnership, association, company or corporation.
10    "Qualified heir" means a qualified heir as defined in
11Section 2032A(e)(1) of the Internal Revenue Code.
12    "Resident trust" means a trust that is a resident of this
13State for purposes of the Illinois Income Tax Act, as amended
14from time to time.
15    "State" means any state, territory or possession of the
16United States and the District of Columbia.
17    "State tax credit" means:
18    (a) For persons dying on or after January 1, 2003 and
19through December 31, 2005, an amount equal to the full credit
20calculable under Section 2011 or Section 2604 of the Internal
21Revenue Code as the credit would have been computed and allowed
22under the Internal Revenue Code as in effect on December 31,
232001, without the reduction in the State Death Tax Credit as
24provided in Section 2011(b)(2) or the termination of the State
25Death Tax Credit as provided in Section 2011(f) as enacted by
26the Economic Growth and Tax Relief Reconciliation Act of 2001,

 

 

09600SB2505ham003- 73 -LRB096 16340 HLH 44944 a

1but recognizing the increased applicable exclusion amount
2through December 31, 2005.
3    (b) For persons dying after December 31, 2005 and on or
4before December 31, 2009, and for persons dying after December
531, 2010, an amount equal to the full credit calculable under
6Section 2011 or 2604 of the Internal Revenue Code as the credit
7would have been computed and allowed under the Internal Revenue
8Code as in effect on December 31, 2001, without the reduction
9in the State Death Tax Credit as provided in Section 2011(b)(2)
10or the termination of the State Death Tax Credit as provided in
11Section 2011(f) as enacted by the Economic Growth and Tax
12Relief Reconciliation Act of 2001, but recognizing the
13exclusion amount of only $2,000,000, and with reduction to the
14adjusted taxable estate for any qualified terminable interest
15property election as defined in subsection (b-1) of this
16Section.
17    (b-1) The person required to file the Illinois return may
18elect on a timely filed Illinois return a marital deduction for
19qualified terminable interest property under Section
202056(b)(7) of the Internal Revenue Code for purposes of the
21Illinois estate tax that is separate and independent of any
22qualified terminable interest property election for federal
23estate tax purposes. For purposes of the Illinois estate tax,
24the inclusion of property in the gross estate of a surviving
25spouse is the same as under Section 2044 of the Internal
26Revenue Code.

 

 

09600SB2505ham003- 74 -LRB096 16340 HLH 44944 a

1    In the case of any trust for which a State or federal
2qualified terminable interest property election is made, the
3trustee may not retain non-income producing assets for more
4than a reasonable amount of time without the consent of the
5surviving spouse.
6    (c) For persons dying after December 31, 2009, the credit
7for state tax allowable under Section 2011 or Section 2604 of
8the Internal Revenue Code.
9    "Taxable transfer" means an event that gives rise to a
10state tax credit, including any credit as a result of the
11imposition of an additional tax under Section 2032A(c) of the
12Internal Revenue Code.
13    "Transferee" means a transferee within the meaning of
14Section 2603(a)(1) and Section 6901(h) of the Internal Revenue
15Code.
16    "Transferred property" means:
17        (1) With respect to a taxable transfer occurring at the
18    death of an individual, the deceased individual's gross
19    estate as defined in Section 2031 of the Internal Revenue
20    Code.
21        (2) With respect to a taxable transfer occurring as a
22    result of a taxable termination as defined in Section
23    2612(a) of the Internal Revenue Code, the taxable amount
24    determined under Section 2622(a) of the Internal Revenue
25    Code.
26        (3) With respect to a taxable transfer occurring as a

 

 

09600SB2505ham003- 75 -LRB096 16340 HLH 44944 a

1    result of a taxable distribution as defined in Section
2    2612(b) of the Internal Revenue Code, the taxable amount
3    determined under Section 2621(a) of the Internal Revenue
4    Code.
5        (4) With respect to an event which causes the
6    imposition of an additional estate tax under Section
7    2032A(c) of the Internal Revenue Code, the qualified real
8    property that was disposed of or which ceased to be used
9    for the qualified use, within the meaning of Section
10    2032A(c)(1) of the Internal Revenue Code.
11    "Trust" includes a trust as defined in Section 2652(b)(1)
12of the Internal Revenue Code.
13(Source: P.A. 96-789, eff. 9-8-09.)
 
14    Section 99. Effective date. This Act takes effect upon
15becoming law.".