Full Text of HB4636 95th General Assembly
HB4636 95TH GENERAL ASSEMBLY
|
|
|
95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008 HB4636
Introduced , by Rep. Annazette Collins SYNOPSIS AS INTRODUCED: |
|
35 ILCS 5/201 |
from Ch. 120, par. 2-201 |
35 ILCS 5/202.5 new |
|
35 ILCS 5/901 |
from Ch. 120, par. 9-901 |
|
Amends the Illinois Income Tax Act. Increases the rate of tax on individuals and on trusts and estates from 3% to 4% on January 1, 2009. Effective immediately.
|
| |
|
|
| FISCAL NOTE ACT MAY APPLY | |
|
|
A BILL FOR
|
|
|
|
|
HB4636 |
|
LRB095 17012 BDD 43060 b |
|
| 1 |
| AN ACT concerning revenue.
| 2 |
| Be it enacted by the People of the State of Illinois,
| 3 |
| represented in the General Assembly:
| 4 |
| Section 5. The Illinois Income Tax Act is amended by | 5 |
| changing Sections 201 and 901 and by adding Section 202.5 as | 6 |
| follows:
| 7 |
| (35 ILCS 5/201) (from Ch. 120, par. 2-201)
| 8 |
| Sec. 201. Tax Imposed.
| 9 |
| (a) In general. A tax measured by net income is hereby | 10 |
| imposed on every
individual, corporation, trust and estate for | 11 |
| each taxable year ending
after July 31, 1969 on the privilege | 12 |
| of earning or receiving income in or
as a resident of this | 13 |
| State. Such tax shall be in addition to all other
occupation or | 14 |
| privilege taxes imposed by this State or by any municipal
| 15 |
| corporation or political subdivision thereof.
| 16 |
| (b) Rates. The tax imposed by subsection (a) of this | 17 |
| Section shall be
determined as follows, except as adjusted by | 18 |
| subsection (d-1):
| 19 |
| (1) In the case of an individual, trust or estate, for | 20 |
| taxable years
ending prior to July 1, 1989, an amount equal | 21 |
| to 2 1/2% of the taxpayer's
net income for the taxable | 22 |
| year.
| 23 |
| (2) In the case of an individual, trust or estate, for |
|
|
|
HB4636 |
- 2 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| taxable years
beginning prior to July 1, 1989 and ending | 2 |
| after June 30, 1989, an amount
equal to the sum of (i) 2 | 3 |
| 1/2% of the taxpayer's net income for the period
prior to | 4 |
| July 1, 1989, as calculated under Section 202.3, and (ii) | 5 |
| 3% of the
taxpayer's net income for the period after June | 6 |
| 30, 1989, as calculated
under Section 202.3.
| 7 |
| (3) In the case of an individual, trust or estate, for | 8 |
| taxable years
beginning after June 30, 1989 and ending on
| 9 |
| or before December 31, 2008 , an amount equal to 3% of the | 10 |
| taxpayer's net
income for the taxable year.
| 11 |
| (4) In the case of an individual, trust, or estate, for
| 12 |
| taxable years beginning prior to January 1, 2009 and ending
| 13 |
| after December 31, 2008, an amount equal to the sum of (i)
| 14 |
| 3% of the taxpayer's net income for the period prior to
| 15 |
| January 1, 2009, as calculated under Section 202.5, and
| 16 |
| (ii) 4% of the taxpayer's net income for the period after
| 17 |
| December 31, 2008, as calculated under Section 202.5 | 18 |
| (Blank) .
| 19 |
| (5) In the case of an individual, trust or estate, for
| 20 |
| taxable years beginning after December 31, 2008, an amount
| 21 |
| equal to 4% of the taxpayer's net income for the taxable
| 22 |
| year (Blank) .
| 23 |
| (6) In the case of a corporation, for taxable years
| 24 |
| ending prior to July 1, 1989, an amount equal to 4% of the
| 25 |
| taxpayer's net income for the taxable year.
| 26 |
| (7) In the case of a corporation, for taxable years |
|
|
|
HB4636 |
- 3 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| beginning prior to
July 1, 1989 and ending after June 30, | 2 |
| 1989, an amount equal to the sum of
(i) 4% of the | 3 |
| taxpayer's net income for the period prior to July 1, 1989,
| 4 |
| as calculated under Section 202.3, and (ii) 4.8% of the | 5 |
| taxpayer's net
income for the period after June 30, 1989, | 6 |
| as calculated under Section
202.3.
| 7 |
| (8) In the case of a corporation, for taxable years | 8 |
| beginning after
June 30, 1989, an amount equal to 4.8% of | 9 |
| the taxpayer's net income for the
taxable year.
| 10 |
| (c) Personal Property Tax Replacement Income Tax.
| 11 |
| Beginning on July 1, 1979 and thereafter, in addition to such | 12 |
| income
tax, there is also hereby imposed the Personal Property | 13 |
| Tax Replacement
Income Tax measured by net income on every | 14 |
| corporation (including Subchapter
S corporations), partnership | 15 |
| and trust, for each taxable year ending after
June 30, 1979. | 16 |
| Such taxes are imposed on the privilege of earning or
receiving | 17 |
| income in or as a resident of this State. The Personal Property
| 18 |
| Tax Replacement Income Tax shall be in addition to the income | 19 |
| tax imposed
by subsections (a) and (b) of this Section and in | 20 |
| addition to all other
occupation or privilege taxes imposed by | 21 |
| this State or by any municipal
corporation or political | 22 |
| subdivision thereof.
| 23 |
| (d) Additional Personal Property Tax Replacement Income | 24 |
| Tax Rates.
The personal property tax replacement income tax | 25 |
| imposed by this subsection
and subsection (c) of this Section | 26 |
| in the case of a corporation, other
than a Subchapter S |
|
|
|
HB4636 |
- 4 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| corporation and except as adjusted by subsection (d-1),
shall | 2 |
| be an additional amount equal to
2.85% of such taxpayer's net | 3 |
| income for the taxable year, except that
beginning on January | 4 |
| 1, 1981, and thereafter, the rate of 2.85% specified
in this | 5 |
| subsection shall be reduced to 2.5%, and in the case of a
| 6 |
| partnership, trust or a Subchapter S corporation shall be an | 7 |
| additional
amount equal to 1.5% of such taxpayer's net income | 8 |
| for the taxable year.
| 9 |
| (d-1) Rate reduction for certain foreign insurers. In the | 10 |
| case of a
foreign insurer, as defined by Section 35A-5 of the | 11 |
| Illinois Insurance Code,
whose state or country of domicile | 12 |
| imposes on insurers domiciled in Illinois
a retaliatory tax | 13 |
| (excluding any insurer
whose premiums from reinsurance assumed | 14 |
| are 50% or more of its total insurance
premiums as determined | 15 |
| under paragraph (2) of subsection (b) of Section 304,
except | 16 |
| that for purposes of this determination premiums from | 17 |
| reinsurance do
not include premiums from inter-affiliate | 18 |
| reinsurance arrangements),
beginning with taxable years ending | 19 |
| on or after December 31, 1999,
the sum of
the rates of tax | 20 |
| imposed by subsections (b) and (d) shall be reduced (but not
| 21 |
| increased) to the rate at which the total amount of tax imposed | 22 |
| under this Act,
net of all credits allowed under this Act, | 23 |
| shall equal (i) the total amount of
tax that would be imposed | 24 |
| on the foreign insurer's net income allocable to
Illinois for | 25 |
| the taxable year by such foreign insurer's state or country of
| 26 |
| domicile if that net income were subject to all income taxes |
|
|
|
HB4636 |
- 5 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| and taxes
measured by net income imposed by such foreign | 2 |
| insurer's state or country of
domicile, net of all credits | 3 |
| allowed or (ii) a rate of zero if no such tax is
imposed on such | 4 |
| income by the foreign insurer's state of domicile.
For the | 5 |
| purposes of this subsection (d-1), an inter-affiliate includes | 6 |
| a
mutual insurer under common management.
| 7 |
| (1) For the purposes of subsection (d-1), in no event | 8 |
| shall the sum of the
rates of tax imposed by subsections | 9 |
| (b) and (d) be reduced below the rate at
which the sum of:
| 10 |
| (A) the total amount of tax imposed on such foreign | 11 |
| insurer under
this Act for a taxable year, net of all | 12 |
| credits allowed under this Act, plus
| 13 |
| (B) the privilege tax imposed by Section 409 of the | 14 |
| Illinois Insurance
Code, the fire insurance company | 15 |
| tax imposed by Section 12 of the Fire
Investigation | 16 |
| Act, and the fire department taxes imposed under | 17 |
| Section 11-10-1
of the Illinois Municipal Code,
| 18 |
| equals 1.25% for taxable years ending prior to December 31, | 19 |
| 2003, or
1.75% for taxable years ending on or after | 20 |
| December 31, 2003, of the net
taxable premiums written for | 21 |
| the taxable year,
as described by subsection (1) of Section | 22 |
| 409 of the Illinois Insurance Code.
This paragraph will in | 23 |
| no event increase the rates imposed under subsections
(b) | 24 |
| and (d).
| 25 |
| (2) Any reduction in the rates of tax imposed by this | 26 |
| subsection shall be
applied first against the rates imposed |
|
|
|
HB4636 |
- 6 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| by subsection (b) and only after the
tax imposed by | 2 |
| subsection (a) net of all credits allowed under this | 3 |
| Section
other than the credit allowed under subsection (i) | 4 |
| has been reduced to zero,
against the rates imposed by | 5 |
| subsection (d).
| 6 |
| This subsection (d-1) is exempt from the provisions of | 7 |
| Section 250.
| 8 |
| (e) Investment credit. A taxpayer shall be allowed a credit
| 9 |
| against the Personal Property Tax Replacement Income Tax for
| 10 |
| investment in qualified property.
| 11 |
| (1) A taxpayer shall be allowed a credit equal to .5% | 12 |
| of
the basis of qualified property placed in service during | 13 |
| the taxable year,
provided such property is placed in | 14 |
| service on or after
July 1, 1984. There shall be allowed an | 15 |
| additional credit equal
to .5% of the basis of qualified | 16 |
| property placed in service during the
taxable year, | 17 |
| provided such property is placed in service on or
after | 18 |
| July 1, 1986, and the taxpayer's base employment
within | 19 |
| Illinois has increased by 1% or more over the preceding | 20 |
| year as
determined by the taxpayer's employment records | 21 |
| filed with the
Illinois Department of Employment Security. | 22 |
| Taxpayers who are new to
Illinois shall be deemed to have | 23 |
| met the 1% growth in base employment for
the first year in | 24 |
| which they file employment records with the Illinois
| 25 |
| Department of Employment Security. The provisions added to | 26 |
| this Section by
Public Act 85-1200 (and restored by Public |
|
|
|
HB4636 |
- 7 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| Act 87-895) shall be
construed as declaratory of existing | 2 |
| law and not as a new enactment. If,
in any year, the | 3 |
| increase in base employment within Illinois over the
| 4 |
| preceding year is less than 1%, the additional credit shall | 5 |
| be limited to that
percentage times a fraction, the | 6 |
| numerator of which is .5% and the denominator
of which is | 7 |
| 1%, but shall not exceed .5%. The investment credit shall | 8 |
| not be
allowed to the extent that it would reduce a | 9 |
| taxpayer's liability in any tax
year below zero, nor may | 10 |
| any credit for qualified property be allowed for any
year | 11 |
| other than the year in which the property was placed in | 12 |
| service in
Illinois. For tax years ending on or after | 13 |
| December 31, 1987, and on or
before December 31, 1988, the | 14 |
| credit shall be allowed for the tax year in
which the | 15 |
| property is placed in service, or, if the amount of the | 16 |
| credit
exceeds the tax liability for that year, whether it | 17 |
| exceeds the original
liability or the liability as later | 18 |
| amended, such excess may be carried
forward and applied to | 19 |
| the tax liability of the 5 taxable years following
the | 20 |
| excess credit years if the taxpayer (i) makes investments | 21 |
| which cause
the creation of a minimum of 2,000 full-time | 22 |
| equivalent jobs in Illinois,
(ii) is located in an | 23 |
| enterprise zone established pursuant to the Illinois
| 24 |
| Enterprise Zone Act and (iii) is certified by the | 25 |
| Department of Commerce
and Community Affairs (now | 26 |
| Department of Commerce and Economic Opportunity) as |
|
|
|
HB4636 |
- 8 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| complying with the requirements specified in
clause (i) and | 2 |
| (ii) by July 1, 1986. The Department of Commerce and
| 3 |
| Community Affairs (now Department of Commerce and Economic | 4 |
| Opportunity) shall notify the Department of Revenue of all | 5 |
| such
certifications immediately. For tax years ending | 6 |
| after December 31, 1988,
the credit shall be allowed for | 7 |
| the tax year in which the property is
placed in service, | 8 |
| or, if the amount of the credit exceeds the tax
liability | 9 |
| for that year, whether it exceeds the original liability or | 10 |
| the
liability as later amended, such excess may be carried | 11 |
| forward and applied
to the tax liability of the 5 taxable | 12 |
| years following the excess credit
years. The credit shall | 13 |
| be applied to the earliest year for which there is
a | 14 |
| liability. If there is credit from more than one tax year | 15 |
| that is
available to offset a liability, earlier credit | 16 |
| shall be applied first.
| 17 |
| (2) The term "qualified property" means property | 18 |
| which:
| 19 |
| (A) is tangible, whether new or used, including | 20 |
| buildings and structural
components of buildings and | 21 |
| signs that are real property, but not including
land or | 22 |
| improvements to real property that are not a structural | 23 |
| component of a
building such as landscaping, sewer | 24 |
| lines, local access roads, fencing, parking
lots, and | 25 |
| other appurtenances;
| 26 |
| (B) is depreciable pursuant to Section 167 of the |
|
|
|
HB4636 |
- 9 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| Internal Revenue Code,
except that "3-year property" | 2 |
| as defined in Section 168(c)(2)(A) of that
Code is not | 3 |
| eligible for the credit provided by this subsection | 4 |
| (e);
| 5 |
| (C) is acquired by purchase as defined in Section | 6 |
| 179(d) of
the Internal Revenue Code;
| 7 |
| (D) is used in Illinois by a taxpayer who is | 8 |
| primarily engaged in
manufacturing, or in mining coal | 9 |
| or fluorite, or in retailing, or was placed in service | 10 |
| on or after July 1, 2006 in a River Edge Redevelopment | 11 |
| Zone established pursuant to the River Edge | 12 |
| Redevelopment Zone Act; and
| 13 |
| (E) has not previously been used in Illinois in | 14 |
| such a manner and by
such a person as would qualify for | 15 |
| the credit provided by this subsection
(e) or | 16 |
| subsection (f).
| 17 |
| (3) For purposes of this subsection (e), | 18 |
| "manufacturing" means
the material staging and production | 19 |
| of tangible personal property by
procedures commonly | 20 |
| regarded as manufacturing, processing, fabrication, or
| 21 |
| assembling which changes some existing material into new | 22 |
| shapes, new
qualities, or new combinations. For purposes of | 23 |
| this subsection
(e) the term "mining" shall have the same | 24 |
| meaning as the term "mining" in
Section 613(c) of the | 25 |
| Internal Revenue Code. For purposes of this subsection
(e), | 26 |
| the term "retailing" means the sale of tangible personal |
|
|
|
HB4636 |
- 10 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| property or
services rendered in conjunction with the sale | 2 |
| of tangible consumer goods
or commodities.
| 3 |
| (4) The basis of qualified property shall be the basis
| 4 |
| used to compute the depreciation deduction for federal | 5 |
| income tax purposes.
| 6 |
| (5) If the basis of the property for federal income tax | 7 |
| depreciation
purposes is increased after it has been placed | 8 |
| in service in Illinois by
the taxpayer, the amount of such | 9 |
| increase shall be deemed property placed
in service on the | 10 |
| date of such increase in basis.
| 11 |
| (6) The term "placed in service" shall have the same
| 12 |
| meaning as under Section 46 of the Internal Revenue Code.
| 13 |
| (7) If during any taxable year, any property ceases to
| 14 |
| be qualified property in the hands of the taxpayer within | 15 |
| 48 months after
being placed in service, or the situs of | 16 |
| any qualified property is
moved outside Illinois within 48 | 17 |
| months after being placed in service, the
Personal Property | 18 |
| Tax Replacement Income Tax for such taxable year shall be
| 19 |
| increased. Such increase shall be determined by (i) | 20 |
| recomputing the
investment credit which would have been | 21 |
| allowed for the year in which
credit for such property was | 22 |
| originally allowed by eliminating such
property from such | 23 |
| computation and, (ii) subtracting such recomputed credit
| 24 |
| from the amount of credit previously allowed. For the | 25 |
| purposes of this
paragraph (7), a reduction of the basis of | 26 |
| qualified property resulting
from a redetermination of the |
|
|
|
HB4636 |
- 11 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| purchase price shall be deemed a disposition
of qualified | 2 |
| property to the extent of such reduction.
| 3 |
| (8) Unless the investment credit is extended by law, | 4 |
| the
basis of qualified property shall not include costs | 5 |
| incurred after
December 31, 2008, except for costs incurred | 6 |
| pursuant to a binding
contract entered into on or before | 7 |
| December 31, 2008.
| 8 |
| (9) Each taxable year ending before December 31, 2000, | 9 |
| a partnership may
elect to pass through to its
partners the | 10 |
| credits to which the partnership is entitled under this | 11 |
| subsection
(e) for the taxable year. A partner may use the | 12 |
| credit allocated to him or her
under this paragraph only | 13 |
| against the tax imposed in subsections (c) and (d) of
this | 14 |
| Section. If the partnership makes that election, those | 15 |
| credits shall be
allocated among the partners in the | 16 |
| partnership in accordance with the rules
set forth in | 17 |
| Section 704(b) of the Internal Revenue Code, and the rules
| 18 |
| promulgated under that Section, and the allocated amount of | 19 |
| the credits shall
be allowed to the partners for that | 20 |
| taxable year. The partnership shall make
this election on | 21 |
| its Personal Property Tax Replacement Income Tax return for
| 22 |
| that taxable year. The election to pass through the credits | 23 |
| shall be
irrevocable.
| 24 |
| For taxable years ending on or after December 31, 2000, | 25 |
| a
partner that qualifies its
partnership for a subtraction | 26 |
| under subparagraph (I) of paragraph (2) of
subsection (d) |
|
|
|
HB4636 |
- 12 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| of Section 203 or a shareholder that qualifies a Subchapter | 2 |
| S
corporation for a subtraction under subparagraph (S) of | 3 |
| paragraph (2) of
subsection (b) of Section 203 shall be | 4 |
| allowed a credit under this subsection
(e) equal to its | 5 |
| share of the credit earned under this subsection (e) during
| 6 |
| the taxable year by the partnership or Subchapter S | 7 |
| corporation, determined in
accordance with the | 8 |
| determination of income and distributive share of
income | 9 |
| under Sections 702 and 704 and Subchapter S of the Internal | 10 |
| Revenue
Code. This paragraph is exempt from the provisions | 11 |
| of Section 250.
| 12 |
| (f) Investment credit; Enterprise Zone; River Edge | 13 |
| Redevelopment Zone.
| 14 |
| (1) A taxpayer shall be allowed a credit against the | 15 |
| tax imposed
by subsections (a) and (b) of this Section for | 16 |
| investment in qualified
property which is placed in service | 17 |
| in an Enterprise Zone created
pursuant to the Illinois | 18 |
| Enterprise Zone Act or, for property placed in service on | 19 |
| or after July 1, 2006, a River Edge Redevelopment Zone | 20 |
| established pursuant to the River Edge Redevelopment Zone | 21 |
| Act. For partners, shareholders
of Subchapter S | 22 |
| corporations, and owners of limited liability companies,
| 23 |
| if the liability company is treated as a partnership for | 24 |
| purposes of
federal and State income taxation, there shall | 25 |
| be allowed a credit under
this subsection (f) to be | 26 |
| determined in accordance with the determination
of income |
|
|
|
HB4636 |
- 13 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| and distributive share of income under Sections 702 and 704 | 2 |
| and
Subchapter S of the Internal Revenue Code. The credit | 3 |
| shall be .5% of the
basis for such property. The credit | 4 |
| shall be available only in the taxable
year in which the | 5 |
| property is placed in service in the Enterprise Zone or | 6 |
| River Edge Redevelopment Zone and
shall not be allowed to | 7 |
| the extent that it would reduce a taxpayer's
liability for | 8 |
| the tax imposed by subsections (a) and (b) of this Section | 9 |
| to
below zero. For tax years ending on or after December | 10 |
| 31, 1985, the credit
shall be allowed for the tax year in | 11 |
| which the property is placed in
service, or, if the amount | 12 |
| of the credit exceeds the tax liability for that
year, | 13 |
| whether it exceeds the original liability or the liability | 14 |
| as later
amended, such excess may be carried forward and | 15 |
| applied to the tax
liability of the 5 taxable years | 16 |
| following the excess credit year.
The credit shall be | 17 |
| applied to the earliest year for which there is a
| 18 |
| liability. If there is credit from more than one tax year | 19 |
| that is available
to offset a liability, the credit | 20 |
| accruing first in time shall be applied
first.
| 21 |
| (2) The term qualified property means property which:
| 22 |
| (A) is tangible, whether new or used, including | 23 |
| buildings and
structural components of buildings;
| 24 |
| (B) is depreciable pursuant to Section 167 of the | 25 |
| Internal Revenue
Code, except that "3-year property" | 26 |
| as defined in Section 168(c)(2)(A) of
that Code is not |
|
|
|
HB4636 |
- 14 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| eligible for the credit provided by this subsection | 2 |
| (f);
| 3 |
| (C) is acquired by purchase as defined in Section | 4 |
| 179(d) of
the Internal Revenue Code;
| 5 |
| (D) is used in the Enterprise Zone or River Edge | 6 |
| Redevelopment Zone by the taxpayer; and
| 7 |
| (E) has not been previously used in Illinois in | 8 |
| such a manner and by
such a person as would qualify for | 9 |
| the credit provided by this subsection
(f) or | 10 |
| subsection (e).
| 11 |
| (3) The basis of qualified property shall be the basis | 12 |
| used to compute
the depreciation deduction for federal | 13 |
| income tax purposes.
| 14 |
| (4) If the basis of the property for federal income tax | 15 |
| depreciation
purposes is increased after it has been placed | 16 |
| in service in the Enterprise
Zone or River Edge | 17 |
| Redevelopment Zone by the taxpayer, the amount of such | 18 |
| increase shall be deemed property
placed in service on the | 19 |
| date of such increase in basis.
| 20 |
| (5) The term "placed in service" shall have the same | 21 |
| meaning as under
Section 46 of the Internal Revenue Code.
| 22 |
| (6) If during any taxable year, any property ceases to | 23 |
| be qualified
property in the hands of the taxpayer within | 24 |
| 48 months after being placed
in service, or the situs of | 25 |
| any qualified property is moved outside the
Enterprise Zone | 26 |
| or River Edge Redevelopment Zone within 48 months after |
|
|
|
HB4636 |
- 15 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| being placed in service, the tax
imposed under subsections | 2 |
| (a) and (b) of this Section for such taxable year
shall be | 3 |
| increased. Such increase shall be determined by (i) | 4 |
| recomputing
the investment credit which would have been | 5 |
| allowed for the year in which
credit for such property was | 6 |
| originally allowed by eliminating such
property from such | 7 |
| computation, and (ii) subtracting such recomputed credit
| 8 |
| from the amount of credit previously allowed. For the | 9 |
| purposes of this
paragraph (6), a reduction of the basis of | 10 |
| qualified property resulting
from a redetermination of the | 11 |
| purchase price shall be deemed a disposition
of qualified | 12 |
| property to the extent of such reduction.
| 13 |
| (7) There shall be allowed an additional credit equal | 14 |
| to 0.5% of the basis of qualified property placed in | 15 |
| service during the taxable year in a River Edge | 16 |
| Redevelopment Zone, provided such property is placed in | 17 |
| service on or after July 1, 2006, and the taxpayer's base | 18 |
| employment within Illinois has increased by 1% or more over | 19 |
| the preceding year as determined by the taxpayer's | 20 |
| employment records filed with the Illinois Department of | 21 |
| Employment Security. Taxpayers who are new to Illinois | 22 |
| shall be deemed to have met the 1% growth in base | 23 |
| employment for the first year in which they file employment | 24 |
| records with the Illinois Department of Employment | 25 |
| Security. If, in any year, the increase in base employment | 26 |
| within Illinois over the preceding year is less than 1%, |
|
|
|
HB4636 |
- 16 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| the additional credit shall be limited to that percentage | 2 |
| times a fraction, the numerator of which is 0.5% and the | 3 |
| denominator of which is 1%, but shall not exceed 0.5%.
| 4 |
| (g) Jobs Tax Credit; Enterprise Zone, River Edge | 5 |
| Redevelopment Zone, and Foreign Trade Zone or Sub-Zone.
| 6 |
| (1) A taxpayer conducting a trade or business in an | 7 |
| enterprise zone
or a High Impact Business designated by the | 8 |
| Department of Commerce and
Economic Opportunity or for | 9 |
| taxable years ending on or after December 31, 2006, in a | 10 |
| River Edge Redevelopment Zone conducting a trade or | 11 |
| business in a federally designated
Foreign Trade Zone or | 12 |
| Sub-Zone shall be allowed a credit against the tax
imposed | 13 |
| by subsections (a) and (b) of this Section in the amount of | 14 |
| $500
per eligible employee hired to work in the zone during | 15 |
| the taxable year.
| 16 |
| (2) To qualify for the credit:
| 17 |
| (A) the taxpayer must hire 5 or more eligible | 18 |
| employees to work in an
enterprise zone, River Edge | 19 |
| Redevelopment Zone, or federally designated Foreign | 20 |
| Trade Zone or Sub-Zone
during the taxable year;
| 21 |
| (B) the taxpayer's total employment within the | 22 |
| enterprise zone, River Edge Redevelopment Zone, or
| 23 |
| federally designated Foreign Trade Zone or Sub-Zone | 24 |
| must
increase by 5 or more full-time employees beyond | 25 |
| the total employed in that
zone at the end of the | 26 |
| previous tax year for which a jobs tax
credit under |
|
|
|
HB4636 |
- 17 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| this Section was taken, or beyond the total employed by | 2 |
| the
taxpayer as of December 31, 1985, whichever is | 3 |
| later; and
| 4 |
| (C) the eligible employees must be employed 180 | 5 |
| consecutive days in
order to be deemed hired for | 6 |
| purposes of this subsection.
| 7 |
| (3) An "eligible employee" means an employee who is:
| 8 |
| (A) Certified by the Department of Commerce and | 9 |
| Economic Opportunity
as "eligible for services" | 10 |
| pursuant to regulations promulgated in
accordance with | 11 |
| Title II of the Job Training Partnership Act, Training
| 12 |
| Services for the Disadvantaged or Title III of the Job | 13 |
| Training Partnership
Act, Employment and Training | 14 |
| Assistance for Dislocated Workers Program.
| 15 |
| (B) Hired after the enterprise zone, River Edge | 16 |
| Redevelopment Zone, or federally designated Foreign
| 17 |
| Trade Zone or Sub-Zone was designated or the trade or
| 18 |
| business was located in that zone, whichever is later.
| 19 |
| (C) Employed in the enterprise zone, River Edge | 20 |
| Redevelopment Zone, or Foreign Trade Zone or
Sub-Zone. | 21 |
| An employee is employed in an
enterprise zone or | 22 |
| federally designated Foreign Trade Zone or Sub-Zone
if | 23 |
| his services are rendered there or it is the base of
| 24 |
| operations for the services performed.
| 25 |
| (D) A full-time employee working 30 or more hours | 26 |
| per week.
|
|
|
|
HB4636 |
- 18 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| (4) For tax years ending on or after December 31, 1985 | 2 |
| and prior to
December 31, 1988, the credit shall be allowed | 3 |
| for the tax year in which
the eligible employees are hired. | 4 |
| For tax years ending on or after
December 31, 1988, the | 5 |
| credit shall be allowed for the tax year immediately
| 6 |
| following the tax year in which the eligible employees are | 7 |
| hired. If the
amount of the credit exceeds the tax | 8 |
| liability for that year, whether it
exceeds the original | 9 |
| liability or the liability as later amended, such
excess | 10 |
| may be carried forward and applied to the tax liability of | 11 |
| the 5
taxable years following the excess credit year. The | 12 |
| credit shall be
applied to the earliest year for which | 13 |
| there is a liability. If there is
credit from more than one | 14 |
| tax year that is available to offset a liability,
earlier | 15 |
| credit shall be applied first.
| 16 |
| (5) The Department of Revenue shall promulgate such | 17 |
| rules and regulations
as may be deemed necessary to carry | 18 |
| out the purposes of this subsection (g).
| 19 |
| (6) The credit shall be available for eligible | 20 |
| employees hired on or
after January 1, 1986.
| 21 |
| (h) Investment credit; High Impact Business.
| 22 |
| (1) Subject to subsections (b) and (b-5) of Section
5.5 | 23 |
| of the Illinois Enterprise Zone Act, a taxpayer shall be | 24 |
| allowed a credit
against the tax imposed by subsections (a) | 25 |
| and (b) of this Section for
investment in qualified
| 26 |
| property which is placed in service by a Department of |
|
|
|
HB4636 |
- 19 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| Commerce and Economic Opportunity
designated High Impact | 2 |
| Business. The credit shall be .5% of the basis
for such | 3 |
| property. The credit shall not be available (i) until the | 4 |
| minimum
investments in qualified property set forth in | 5 |
| subdivision (a)(3)(A) of
Section 5.5 of the Illinois
| 6 |
| Enterprise Zone Act have been satisfied
or (ii) until the | 7 |
| time authorized in subsection (b-5) of the Illinois
| 8 |
| Enterprise Zone Act for entities designated as High Impact | 9 |
| Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and | 10 |
| (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone | 11 |
| Act, and shall not be allowed to the extent that it would
| 12 |
| reduce a taxpayer's liability for the tax imposed by | 13 |
| subsections (a) and (b) of
this Section to below zero. The | 14 |
| credit applicable to such investments shall be
taken in the | 15 |
| taxable year in which such investments have been completed. | 16 |
| The
credit for additional investments beyond the minimum | 17 |
| investment by a designated
high impact business authorized | 18 |
| under subdivision (a)(3)(A) of Section 5.5 of
the Illinois | 19 |
| Enterprise Zone Act shall be available only in the taxable | 20 |
| year in
which the property is placed in service and shall | 21 |
| not be allowed to the extent
that it would reduce a | 22 |
| taxpayer's liability for the tax imposed by subsections
(a) | 23 |
| and (b) of this Section to below zero.
For tax years ending | 24 |
| on or after December 31, 1987, the credit shall be
allowed | 25 |
| for the tax year in which the property is placed in | 26 |
| service, or, if
the amount of the credit exceeds the tax |
|
|
|
HB4636 |
- 20 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| liability for that year, whether
it exceeds the original | 2 |
| liability or the liability as later amended, such
excess | 3 |
| may be carried forward and applied to the tax liability of | 4 |
| the 5
taxable years following the excess credit year. The | 5 |
| credit shall be
applied to the earliest year for which | 6 |
| there is a liability. If there is
credit from more than one | 7 |
| tax year that is available to offset a liability,
the | 8 |
| credit accruing first in time shall be applied first.
| 9 |
| Changes made in this subdivision (h)(1) by Public Act | 10 |
| 88-670
restore changes made by Public Act 85-1182 and | 11 |
| reflect existing law.
| 12 |
| (2) The term qualified property means property which:
| 13 |
| (A) is tangible, whether new or used, including | 14 |
| buildings and
structural components of buildings;
| 15 |
| (B) is depreciable pursuant to Section 167 of the | 16 |
| Internal Revenue
Code, except that "3-year property" | 17 |
| as defined in Section 168(c)(2)(A) of
that Code is not | 18 |
| eligible for the credit provided by this subsection | 19 |
| (h);
| 20 |
| (C) is acquired by purchase as defined in Section | 21 |
| 179(d) of the
Internal Revenue Code; and
| 22 |
| (D) is not eligible for the Enterprise Zone | 23 |
| Investment Credit provided
by subsection (f) of this | 24 |
| Section.
| 25 |
| (3) The basis of qualified property shall be the basis | 26 |
| used to compute
the depreciation deduction for federal |
|
|
|
HB4636 |
- 21 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| income tax purposes.
| 2 |
| (4) If the basis of the property for federal income tax | 3 |
| depreciation
purposes is increased after it has been placed | 4 |
| in service in a federally
designated Foreign Trade Zone or | 5 |
| Sub-Zone located in Illinois by the taxpayer,
the amount of | 6 |
| such increase shall be deemed property placed in service on
| 7 |
| the date of such increase in basis.
| 8 |
| (5) The term "placed in service" shall have the same | 9 |
| meaning as under
Section 46 of the Internal Revenue Code.
| 10 |
| (6) If during any taxable year ending on or before | 11 |
| December 31, 1996,
any property ceases to be qualified
| 12 |
| property in the hands of the taxpayer within 48 months | 13 |
| after being placed
in service, or the situs of any | 14 |
| qualified property is moved outside
Illinois within 48 | 15 |
| months after being placed in service, the tax imposed
under | 16 |
| subsections (a) and (b) of this Section for such taxable | 17 |
| year shall
be increased. Such increase shall be determined | 18 |
| by (i) recomputing the
investment credit which would have | 19 |
| been allowed for the year in which
credit for such property | 20 |
| was originally allowed by eliminating such
property from | 21 |
| such computation, and (ii) subtracting such recomputed | 22 |
| credit
from the amount of credit previously allowed. For | 23 |
| the purposes of this
paragraph (6), a reduction of the | 24 |
| basis of qualified property resulting
from a | 25 |
| redetermination of the purchase price shall be deemed a | 26 |
| disposition
of qualified property to the extent of such |
|
|
|
HB4636 |
- 22 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| reduction.
| 2 |
| (7) Beginning with tax years ending after December 31, | 3 |
| 1996, if a
taxpayer qualifies for the credit under this | 4 |
| subsection (h) and thereby is
granted a tax abatement and | 5 |
| the taxpayer relocates its entire facility in
violation of | 6 |
| the explicit terms and length of the contract under Section
| 7 |
| 18-183 of the Property Tax Code, the tax imposed under | 8 |
| subsections
(a) and (b) of this Section shall be increased | 9 |
| for the taxable year
in which the taxpayer relocated its | 10 |
| facility by an amount equal to the
amount of credit | 11 |
| received by the taxpayer under this subsection (h).
| 12 |
| (i) Credit for Personal Property Tax Replacement Income | 13 |
| Tax.
For tax years ending prior to December 31, 2003, a credit | 14 |
| shall be allowed
against the tax imposed by
subsections (a) and | 15 |
| (b) of this Section for the tax imposed by subsections (c)
and | 16 |
| (d) of this Section. This credit shall be computed by | 17 |
| multiplying the tax
imposed by subsections (c) and (d) of this | 18 |
| Section by a fraction, the numerator
of which is base income | 19 |
| allocable to Illinois and the denominator of which is
Illinois | 20 |
| base income, and further multiplying the product by the tax | 21 |
| rate
imposed by subsections (a) and (b) of this Section.
| 22 |
| Any credit earned on or after December 31, 1986 under
this | 23 |
| subsection which is unused in the year
the credit is computed | 24 |
| because it exceeds the tax liability imposed by
subsections (a) | 25 |
| and (b) for that year (whether it exceeds the original
| 26 |
| liability or the liability as later amended) may be carried |
|
|
|
HB4636 |
- 23 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| forward and
applied to the tax liability imposed by subsections | 2 |
| (a) and (b) of the 5
taxable years following the excess credit | 3 |
| year, provided that no credit may
be carried forward to any | 4 |
| year ending on or
after December 31, 2003. This credit shall be
| 5 |
| applied first to the earliest year for which there is a | 6 |
| liability. If
there is a credit under this subsection from more | 7 |
| than one tax year that is
available to offset a liability the | 8 |
| earliest credit arising under this
subsection shall be applied | 9 |
| first.
| 10 |
| If, during any taxable year ending on or after December 31, | 11 |
| 1986, the
tax imposed by subsections (c) and (d) of this | 12 |
| Section for which a taxpayer
has claimed a credit under this | 13 |
| subsection (i) is reduced, the amount of
credit for such tax | 14 |
| shall also be reduced. Such reduction shall be
determined by | 15 |
| recomputing the credit to take into account the reduced tax
| 16 |
| imposed by subsections (c) and (d). If any portion of the
| 17 |
| reduced amount of credit has been carried to a different | 18 |
| taxable year, an
amended return shall be filed for such taxable | 19 |
| year to reduce the amount of
credit claimed.
| 20 |
| (j) Training expense credit. Beginning with tax years | 21 |
| ending on or
after December 31, 1986 and prior to December 31, | 22 |
| 2003, a taxpayer shall be
allowed a credit against the
tax | 23 |
| imposed by subsections (a) and (b) under this Section
for all | 24 |
| amounts paid or accrued, on behalf of all persons
employed by | 25 |
| the taxpayer in Illinois or Illinois residents employed
outside | 26 |
| of Illinois by a taxpayer, for educational or vocational |
|
|
|
HB4636 |
- 24 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| training in
semi-technical or technical fields or semi-skilled | 2 |
| or skilled fields, which
were deducted from gross income in the | 3 |
| computation of taxable income. The
credit against the tax | 4 |
| imposed by subsections (a) and (b) shall be 1.6% of
such | 5 |
| training expenses. For partners, shareholders of subchapter S
| 6 |
| corporations, and owners of limited liability companies, if the | 7 |
| liability
company is treated as a partnership for purposes of | 8 |
| federal and State income
taxation, there shall be allowed a | 9 |
| credit under this subsection (j) to be
determined in accordance | 10 |
| with the determination of income and distributive
share of | 11 |
| income under Sections 702 and 704 and subchapter S of the | 12 |
| Internal
Revenue Code.
| 13 |
| Any credit allowed under this subsection which is unused in | 14 |
| the year
the credit is earned may be carried forward to each of | 15 |
| the 5 taxable
years following the year for which the credit is | 16 |
| first computed until it is
used. This credit shall be applied | 17 |
| first to the earliest year for which
there is a liability. If | 18 |
| there is a credit under this subsection from more
than one tax | 19 |
| year that is available to offset a liability the earliest
| 20 |
| credit arising under this subsection shall be applied first. No | 21 |
| carryforward
credit may be claimed in any tax year ending on or | 22 |
| after
December 31, 2003.
| 23 |
| (k) Research and development credit.
| 24 |
| For tax years ending after July 1, 1990 and prior to
| 25 |
| December 31, 2003, and beginning again for tax years ending on | 26 |
| or after December 31, 2004, a taxpayer shall be
allowed a |
|
|
|
HB4636 |
- 25 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| credit against the tax imposed by subsections (a) and (b) of | 2 |
| this
Section for increasing research activities in this State. | 3 |
| The credit
allowed against the tax imposed by subsections (a) | 4 |
| and (b) shall be equal
to 6 1/2% of the qualifying expenditures | 5 |
| for increasing research activities
in this State. For partners, | 6 |
| shareholders of subchapter S corporations, and
owners of | 7 |
| limited liability companies, if the liability company is | 8 |
| treated as a
partnership for purposes of federal and State | 9 |
| income taxation, there shall be
allowed a credit under this | 10 |
| subsection to be determined in accordance with the
| 11 |
| determination of income and distributive share of income under | 12 |
| Sections 702 and
704 and subchapter S of the Internal Revenue | 13 |
| Code.
| 14 |
| For purposes of this subsection, "qualifying expenditures" | 15 |
| means the
qualifying expenditures as defined for the federal | 16 |
| credit for increasing
research activities which would be | 17 |
| allowable under Section 41 of the
Internal Revenue Code and | 18 |
| which are conducted in this State, "qualifying
expenditures for | 19 |
| increasing research activities in this State" means the
excess | 20 |
| of qualifying expenditures for the taxable year in which | 21 |
| incurred
over qualifying expenditures for the base period, | 22 |
| "qualifying expenditures
for the base period" means the average | 23 |
| of the qualifying expenditures for
each year in the base | 24 |
| period, and "base period" means the 3 taxable years
immediately | 25 |
| preceding the taxable year for which the determination is
being | 26 |
| made.
|
|
|
|
HB4636 |
- 26 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| Any credit in excess of the tax liability for the taxable | 2 |
| year
may be carried forward. A taxpayer may elect to have the
| 3 |
| unused credit shown on its final completed return carried over | 4 |
| as a credit
against the tax liability for the following 5 | 5 |
| taxable years or until it has
been fully used, whichever occurs | 6 |
| first; provided that no credit earned in a tax year ending | 7 |
| prior to December 31, 2003 may be carried forward to any year | 8 |
| ending on or after December 31, 2003.
| 9 |
| If an unused credit is carried forward to a given year from | 10 |
| 2 or more
earlier years, that credit arising in the earliest | 11 |
| year will be applied
first against the tax liability for the | 12 |
| given year. If a tax liability for
the given year still | 13 |
| remains, the credit from the next earliest year will
then be | 14 |
| applied, and so on, until all credits have been used or no tax
| 15 |
| liability for the given year remains. Any remaining unused | 16 |
| credit or
credits then will be carried forward to the next | 17 |
| following year in which a
tax liability is incurred, except | 18 |
| that no credit can be carried forward to
a year which is more | 19 |
| than 5 years after the year in which the expense for
which the | 20 |
| credit is given was incurred.
| 21 |
| No inference shall be drawn from this amendatory Act of the | 22 |
| 91st General
Assembly in construing this Section for taxable | 23 |
| years beginning before January
1, 1999.
| 24 |
| (l) Environmental Remediation Tax Credit.
| 25 |
| (i) For tax years ending after December 31, 1997 and on | 26 |
| or before
December 31, 2001, a taxpayer shall be allowed a |
|
|
|
HB4636 |
- 27 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| credit against the tax
imposed by subsections (a) and (b) | 2 |
| of this Section for certain amounts paid
for unreimbursed | 3 |
| eligible remediation costs, as specified in this | 4 |
| subsection.
For purposes of this Section, "unreimbursed | 5 |
| eligible remediation costs" means
costs approved by the | 6 |
| Illinois Environmental Protection Agency ("Agency") under
| 7 |
| Section 58.14 of the Environmental Protection Act that were | 8 |
| paid in performing
environmental remediation at a site for | 9 |
| which a No Further Remediation Letter
was issued by the | 10 |
| Agency and recorded under Section 58.10 of the | 11 |
| Environmental
Protection Act. The credit must be claimed | 12 |
| for the taxable year in which
Agency approval of the | 13 |
| eligible remediation costs is granted. The credit is
not | 14 |
| available to any taxpayer if the taxpayer or any related | 15 |
| party caused or
contributed to, in any material respect, a | 16 |
| release of regulated substances on,
in, or under the site | 17 |
| that was identified and addressed by the remedial
action | 18 |
| pursuant to the Site Remediation Program of the | 19 |
| Environmental Protection
Act. After the Pollution Control | 20 |
| Board rules are adopted pursuant to the
Illinois | 21 |
| Administrative Procedure Act for the administration and | 22 |
| enforcement of
Section 58.9 of the Environmental | 23 |
| Protection Act, determinations as to credit
availability | 24 |
| for purposes of this Section shall be made consistent with | 25 |
| those
rules. For purposes of this Section, "taxpayer" | 26 |
| includes a person whose tax
attributes the taxpayer has |
|
|
|
HB4636 |
- 28 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| succeeded to under Section 381 of the Internal
Revenue Code | 2 |
| and "related party" includes the persons disallowed a | 3 |
| deduction
for losses by paragraphs (b), (c), and (f)(1) of | 4 |
| Section 267 of the Internal
Revenue Code by virtue of being | 5 |
| a related taxpayer, as well as any of its
partners. The | 6 |
| credit allowed against the tax imposed by subsections (a) | 7 |
| and
(b) shall be equal to 25% of the unreimbursed eligible | 8 |
| remediation costs in
excess of $100,000 per site, except | 9 |
| that the $100,000 threshold shall not apply
to any site | 10 |
| contained in an enterprise zone as determined by the | 11 |
| Department of
Commerce and Community Affairs (now | 12 |
| Department of Commerce and Economic Opportunity). The | 13 |
| total credit allowed shall not exceed
$40,000 per year with | 14 |
| a maximum total of $150,000 per site. For partners and
| 15 |
| shareholders of subchapter S corporations, there shall be | 16 |
| allowed a credit
under this subsection to be determined in | 17 |
| accordance with the determination of
income and | 18 |
| distributive share of income under Sections 702 and 704 and
| 19 |
| subchapter S of the Internal Revenue Code.
| 20 |
| (ii) A credit allowed under this subsection that is | 21 |
| unused in the year
the credit is earned may be carried | 22 |
| forward to each of the 5 taxable years
following the year | 23 |
| for which the credit is first earned until it is used.
The | 24 |
| term "unused credit" does not include any amounts of | 25 |
| unreimbursed eligible
remediation costs in excess of the | 26 |
| maximum credit per site authorized under
paragraph (i). |
|
|
|
HB4636 |
- 29 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| This credit shall be applied first to the earliest year
for | 2 |
| which there is a liability. If there is a credit under this | 3 |
| subsection
from more than one tax year that is available to | 4 |
| offset a liability, the
earliest credit arising under this | 5 |
| subsection shall be applied first. A
credit allowed under | 6 |
| this subsection may be sold to a buyer as part of a sale
of | 7 |
| all or part of the remediation site for which the credit | 8 |
| was granted. The
purchaser of a remediation site and the | 9 |
| tax credit shall succeed to the unused
credit and remaining | 10 |
| carry-forward period of the seller. To perfect the
| 11 |
| transfer, the assignor shall record the transfer in the | 12 |
| chain of title for the
site and provide written notice to | 13 |
| the Director of the Illinois Department of
Revenue of the | 14 |
| assignor's intent to sell the remediation site and the | 15 |
| amount of
the tax credit to be transferred as a portion of | 16 |
| the sale. In no event may a
credit be transferred to any | 17 |
| taxpayer if the taxpayer or a related party would
not be | 18 |
| eligible under the provisions of subsection (i).
| 19 |
| (iii) For purposes of this Section, the term "site" | 20 |
| shall have the same
meaning as under Section 58.2 of the | 21 |
| Environmental Protection Act.
| 22 |
| (m) Education expense credit. Beginning with tax years | 23 |
| ending after
December 31, 1999, a taxpayer who
is the custodian | 24 |
| of one or more qualifying pupils shall be allowed a credit
| 25 |
| against the tax imposed by subsections (a) and (b) of this | 26 |
| Section for
qualified education expenses incurred on behalf of |
|
|
|
HB4636 |
- 30 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| the qualifying pupils.
The credit shall be equal to 25% of | 2 |
| qualified education expenses, but in no
event may the total | 3 |
| credit under this subsection claimed by a
family that is the
| 4 |
| custodian of qualifying pupils exceed $500. In no event shall a | 5 |
| credit under
this subsection reduce the taxpayer's liability | 6 |
| under this Act to less than
zero. This subsection is exempt | 7 |
| from the provisions of Section 250 of this
Act.
| 8 |
| For purposes of this subsection:
| 9 |
| "Qualifying pupils" means individuals who (i) are | 10 |
| residents of the State of
Illinois, (ii) are under the age of | 11 |
| 21 at the close of the school year for
which a credit is | 12 |
| sought, and (iii) during the school year for which a credit
is | 13 |
| sought were full-time pupils enrolled in a kindergarten through | 14 |
| twelfth
grade education program at any school, as defined in | 15 |
| this subsection.
| 16 |
| "Qualified education expense" means the amount incurred
on | 17 |
| behalf of a qualifying pupil in excess of $250 for tuition, | 18 |
| book fees, and
lab fees at the school in which the pupil is | 19 |
| enrolled during the regular school
year.
| 20 |
| "School" means any public or nonpublic elementary or | 21 |
| secondary school in
Illinois that is in compliance with Title | 22 |
| VI of the Civil Rights Act of 1964
and attendance at which | 23 |
| satisfies the requirements of Section 26-1 of the
School Code, | 24 |
| except that nothing shall be construed to require a child to
| 25 |
| attend any particular public or nonpublic school to qualify for | 26 |
| the credit
under this Section.
|
|
|
|
HB4636 |
- 31 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| "Custodian" means, with respect to qualifying pupils, an | 2 |
| Illinois resident
who is a parent, the parents, a legal | 3 |
| guardian, or the legal guardians of the
qualifying pupils.
| 4 |
| (n) River Edge Redevelopment Zone site remediation tax | 5 |
| credit.
| 6 |
| (i) For tax years ending on or after December 31, 2006, | 7 |
| a taxpayer shall be allowed a credit against the tax | 8 |
| imposed by subsections (a) and (b) of this Section for | 9 |
| certain amounts paid for unreimbursed eligible remediation | 10 |
| costs, as specified in this subsection. For purposes of | 11 |
| this Section, "unreimbursed eligible remediation costs" | 12 |
| means costs approved by the Illinois Environmental | 13 |
| Protection Agency ("Agency") under Section 58.14a of the | 14 |
| Environmental Protection Act that were paid in performing | 15 |
| environmental remediation at a site within a River Edge | 16 |
| Redevelopment Zone for which a No Further Remediation | 17 |
| Letter was issued by the Agency and recorded under Section | 18 |
| 58.10 of the Environmental Protection Act. The credit must | 19 |
| be claimed for the taxable year in which Agency approval of | 20 |
| the eligible remediation costs is granted. The credit is | 21 |
| not available to any taxpayer if the taxpayer or any | 22 |
| related party caused or contributed to, in any material | 23 |
| respect, a release of regulated substances on, in, or under | 24 |
| the site that was identified and addressed by the remedial | 25 |
| action pursuant to the Site Remediation Program of the | 26 |
| Environmental Protection Act. Determinations as to credit |
|
|
|
HB4636 |
- 32 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| availability for purposes of this Section shall be made | 2 |
| consistent with rules adopted by the Pollution Control | 3 |
| Board pursuant to the Illinois Administrative Procedure | 4 |
| Act for the administration and enforcement of Section 58.9 | 5 |
| of the Environmental Protection Act. For purposes of this | 6 |
| Section, "taxpayer" includes a person whose tax attributes | 7 |
| the taxpayer has succeeded to under Section 381 of the | 8 |
| Internal Revenue Code and "related party" includes the | 9 |
| persons disallowed a deduction for losses by paragraphs | 10 |
| (b), (c), and (f)(1) of Section 267 of the Internal Revenue | 11 |
| Code by virtue of being a related taxpayer, as well as any | 12 |
| of its partners. The credit allowed against the tax imposed | 13 |
| by subsections (a) and (b) shall be equal to 25% of the | 14 |
| unreimbursed eligible remediation costs in excess of | 15 |
| $100,000 per site. | 16 |
| (ii) A credit allowed under this subsection that is | 17 |
| unused in the year the credit is earned may be carried | 18 |
| forward to each of the 5 taxable years following the year | 19 |
| for which the credit is first earned until it is used. This | 20 |
| credit shall be applied first to the earliest year for | 21 |
| which there is a liability. If there is a credit under this | 22 |
| subsection from more than one tax year that is available to | 23 |
| offset a liability, the earliest credit arising under this | 24 |
| subsection shall be applied first. A credit allowed under | 25 |
| this subsection may be sold to a buyer as part of a sale of | 26 |
| all or part of the remediation site for which the credit |
|
|
|
HB4636 |
- 33 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| was granted. The purchaser of a remediation site and the | 2 |
| tax credit shall succeed to the unused credit and remaining | 3 |
| carry-forward period of the seller. To perfect the | 4 |
| transfer, the assignor shall record the transfer in the | 5 |
| chain of title for the site and provide written notice to | 6 |
| the Director of the Illinois Department of Revenue of the | 7 |
| assignor's intent to sell the remediation site and the | 8 |
| amount of the tax credit to be transferred as a portion of | 9 |
| the sale. In no event may a credit be transferred to any | 10 |
| taxpayer if the taxpayer or a related party would not be | 11 |
| eligible under the provisions of subsection (i). | 12 |
| (iii) For purposes of this Section, the term "site" | 13 |
| shall have the same meaning as under Section 58.2 of the | 14 |
| Environmental Protection Act. | 15 |
| (iv) This subsection is exempt from the provisions of | 16 |
| Section 250.
| 17 |
| (Source: P.A. 94-1021, eff. 7-12-06; 95-454, eff. 8-27-07.)
| 18 |
| (35 ILCS 5/202.5 new) | 19 |
| Sec. 202.5. Net income attributable to the period prior to
| 20 |
| January 1, 2009 and net income attributable to the period after
| 21 |
| December 31, 2008. | 22 |
| (a) In general. With respect to the taxable year of a
| 23 |
| taxpayer beginning prior to January 1, 2009 and ending after
| 24 |
| December 31, 2008, net income for the period after December 31,
| 25 |
| 2008 is that amount that bears the same ratio to the
taxpayer's |
|
|
|
HB4636 |
- 34 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| net income for the entire taxable year as the number
of days in | 2 |
| that year after December 31, 2008 bears to the total
number of | 3 |
| days in that year, and the net income for the period
prior to | 4 |
| January 1, 2009 is that amount that bears the
same ratio to the | 5 |
| taxpayer's net income for the entire taxable
year as the number | 6 |
| of days in that year prior to January 1,
2009 bears to the | 7 |
| total number of days in that year. | 8 |
| (b) Election to attribute income and deduction items
| 9 |
| specifically to the respective portions of a taxable year prior
| 10 |
| to January 1, 2009 and after December 31, 2008. In the case of
| 11 |
| a taxpayer with a taxable year beginning prior to January 1,
| 12 |
| 2009 and ending after December 31, 2008, the taxpayer may
| 13 |
| elect, instead of the procedure established in subsection (a)
| 14 |
| of this Section, to determine net income on a specific
| 15 |
| accounting basis for the 2 portions of his or her taxable year: | 16 |
| (i) from the beginning of the taxable year through
| 17 |
| December 31, 2008; and | 18 |
| (ii) from January 1, 2009 through the end of the
| 19 |
| taxable year. | 20 |
| If the taxpayer elects specific accounting under this
| 21 |
| subsection, there shall be taken into account in computing base
| 22 |
| income for each of the 2 portions of the taxable year only
| 23 |
| those items earned, received, paid, incurred or accrued in each | 24 |
| such period. The standard exemption provided by Section 204
| 25 |
| must be divided between the respective periods in amounts that
| 26 |
| bear the same ratio to the total exemption allowable under
|
|
|
|
HB4636 |
- 35 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| Section 204 (determined without regard to this Section) as the
| 2 |
| total number of days in each such period bears to the total
| 3 |
| number of days in the taxable year. The election provided by
| 4 |
| this subsection must be made in form and manner
that the | 5 |
| Department requires by rule, but
must be made no later than the | 6 |
| due date (including any
extensions thereof) for the filing of | 7 |
| the return for the
taxable year, and is irrevocable.
| 8 |
| (35 ILCS 5/901) (from Ch. 120, par. 9-901)
| 9 |
| Sec. 901. Collection Authority.
| 10 |
| (a) In general.
| 11 |
| The Department shall collect the taxes imposed by this Act. | 12 |
| The Department
shall collect certified past due child support | 13 |
| amounts under Section 2505-650
of the Department of Revenue Law | 14 |
| (20 ILCS 2505/2505-650). Except as
provided in subsections (c) | 15 |
| and (e) of this Section, money collected
pursuant to | 16 |
| subsections (a) and (b) of Section 201 of this Act shall be
| 17 |
| paid into the General Revenue Fund in the State treasury; money
| 18 |
| collected pursuant to subsections (c) and (d) of Section 201 of | 19 |
| this Act
shall be paid into the Personal Property Tax | 20 |
| Replacement Fund, a special
fund in the State Treasury; and | 21 |
| money collected under Section 2505-650 of the
Department of | 22 |
| Revenue Law (20 ILCS 2505/2505-650) shall be paid
into the
| 23 |
| Child Support Enforcement Trust Fund, a special fund outside | 24 |
| the State
Treasury, or
to the State
Disbursement Unit | 25 |
| established under Section 10-26 of the Illinois Public Aid
|
|
|
|
HB4636 |
- 36 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| Code, as directed by the Department of Healthcare and Family | 2 |
| Services.
| 3 |
| (b) Local Governmental Distributive Fund.
| 4 |
| Beginning August 1, 1969, and continuing through June 30, | 5 |
| 1994, the Treasurer
shall transfer each month from the General | 6 |
| Revenue Fund to a special fund in
the State treasury, to be | 7 |
| known as the "Local Government Distributive Fund", an
amount | 8 |
| equal to 1/12 of the net revenue realized from the tax imposed | 9 |
| by
subsections (a) and (b) of Section 201 of this Act during | 10 |
| the preceding month.
Beginning July 1, 1994, and continuing | 11 |
| through June 30, 1995, the Treasurer
shall transfer each month | 12 |
| from the General Revenue Fund to the Local Government
| 13 |
| Distributive Fund an amount equal to 1/11 of the net revenue | 14 |
| realized from the
tax imposed by subsections (a) and (b) of | 15 |
| Section 201 of this Act during the
preceding month. Beginning | 16 |
| July 1, 1995, the Treasurer shall transfer each
month from the | 17 |
| General Revenue Fund to the Local Government Distributive Fund
| 18 |
| an amount equal to the net of (i) 1/10 of the net revenue | 19 |
| realized from the
tax imposed by
subsections (a) and (b) of | 20 |
| Section 201 of the Illinois Income Tax Act during
the preceding | 21 |
| month
(ii) minus, beginning July 1, 2003 and ending June 30, | 22 |
| 2004, $6,666,666, and
beginning July 1,
2004,
zero. Net revenue | 23 |
| realized for a month shall be defined as the
revenue from the | 24 |
| tax imposed by subsections (a) and (b) of Section 201 of this
| 25 |
| Act which is deposited in the General Revenue Fund, the | 26 |
| Educational Assistance
Fund and the Income Tax Surcharge Local |
|
|
|
HB4636 |
- 37 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| Government Distributive Fund during the
month minus the amount | 2 |
| paid out of the General Revenue Fund in State warrants
during | 3 |
| that same month as refunds to taxpayers for overpayment of | 4 |
| liability
under the tax imposed by subsections (a) and (b) of | 5 |
| Section 201 of this Act.
| 6 |
| (c) Deposits Into Income Tax Refund Fund.
| 7 |
| (1) Beginning on January 1, 1989 and thereafter, the | 8 |
| Department shall
deposit a percentage of the amounts | 9 |
| collected pursuant to subsections (a)
and (b)(1), (2), and | 10 |
| (3), (4), and (5), of Section 201 of this Act into a fund | 11 |
| in the State
treasury known as the Income Tax Refund Fund. | 12 |
| The Department shall deposit 6%
of such amounts during the | 13 |
| period beginning January 1, 1989 and ending on June
30, | 14 |
| 1989. Beginning with State fiscal year 1990 and for each | 15 |
| fiscal year
thereafter, the percentage deposited into the | 16 |
| Income Tax Refund Fund during a
fiscal year shall be the | 17 |
| Annual Percentage. For fiscal years 1999 through
2001, the | 18 |
| Annual Percentage shall be 7.1%.
For fiscal year 2003, the | 19 |
| Annual Percentage shall be 8%.
For fiscal year 2004, the | 20 |
| Annual Percentage shall be 11.7%. Upon the effective date | 21 |
| of this amendatory Act of the 93rd General Assembly, the | 22 |
| Annual Percentage shall be 10% for fiscal year 2005. For | 23 |
| fiscal year 2006, the Annual Percentage shall be 9.75%. For | 24 |
| fiscal
year 2007, the Annual Percentage shall be 9.75%. For | 25 |
| fiscal year 2008, the Annual Percentage shall be 7.75%. For | 26 |
| all other
fiscal years, the
Annual Percentage shall be |
|
|
|
HB4636 |
- 38 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| calculated as a fraction, the numerator of which
shall be | 2 |
| the amount of refunds approved for payment by the | 3 |
| Department during
the preceding fiscal year as a result of | 4 |
| overpayment of tax liability under
subsections (a) and | 5 |
| (b)(1), (2), and (3) , (4), and (5), of Section 201 of this | 6 |
| Act plus the
amount of such refunds remaining approved but | 7 |
| unpaid at the end of the
preceding fiscal year, minus the | 8 |
| amounts transferred into the Income Tax
Refund Fund from | 9 |
| the Tobacco Settlement Recovery Fund, and
the denominator | 10 |
| of which shall be the amounts which will be collected | 11 |
| pursuant
to subsections (a) and (b)(1), (2), and (3) , (4), | 12 |
| and (5), of Section 201 of this Act during
the preceding | 13 |
| fiscal year; except that in State fiscal year 2002, the | 14 |
| Annual
Percentage shall in no event exceed 7.6%. The | 15 |
| Director of Revenue shall
certify the Annual Percentage to | 16 |
| the Comptroller on the last business day of
the fiscal year | 17 |
| immediately preceding the fiscal year for which it is to be
| 18 |
| effective.
| 19 |
| (2) Beginning on January 1, 1989 and thereafter, the | 20 |
| Department shall
deposit a percentage of the amounts | 21 |
| collected pursuant to subsections (a)
and (b)(6), (7), and | 22 |
| (8), (c) and (d) of Section 201
of this Act into a fund in | 23 |
| the State treasury known as the Income Tax
Refund Fund. The | 24 |
| Department shall deposit 18% of such amounts during the
| 25 |
| period beginning January 1, 1989 and ending on June 30, | 26 |
| 1989. Beginning
with State fiscal year 1990 and for each |
|
|
|
HB4636 |
- 39 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| fiscal year thereafter, the
percentage deposited into the | 2 |
| Income Tax Refund Fund during a fiscal year
shall be the | 3 |
| Annual Percentage. For fiscal years 1999, 2000, and 2001, | 4 |
| the
Annual Percentage shall be 19%.
For fiscal year 2003, | 5 |
| the Annual Percentage shall be 27%. For fiscal year
2004, | 6 |
| the Annual Percentage shall be 32%.
Upon the effective date | 7 |
| of this amendatory Act of the 93rd General Assembly, the | 8 |
| Annual Percentage shall be 24% for fiscal year 2005.
For | 9 |
| fiscal year 2006, the Annual Percentage shall be 20%. For | 10 |
| fiscal
year 2007, the Annual Percentage shall be 17.5%. For | 11 |
| fiscal year 2008, the Annual Percentage shall be 15.5%. For | 12 |
| all other fiscal years, the Annual
Percentage shall be | 13 |
| calculated
as a fraction, the numerator of which shall be | 14 |
| the amount of refunds
approved for payment by the | 15 |
| Department during the preceding fiscal year as
a result of | 16 |
| overpayment of tax liability under subsections (a) and | 17 |
| (b)(6),
(7), and (8), (c) and (d) of Section 201 of this | 18 |
| Act plus the
amount of such refunds remaining approved but | 19 |
| unpaid at the end of the
preceding fiscal year, and the | 20 |
| denominator of
which shall be the amounts which will be | 21 |
| collected pursuant to subsections (a)
and (b)(6), (7), and | 22 |
| (8), (c) and (d) of Section 201 of this Act during the
| 23 |
| preceding fiscal year; except that in State fiscal year | 24 |
| 2002, the Annual
Percentage shall in no event exceed 23%. | 25 |
| The Director of Revenue shall
certify the Annual Percentage | 26 |
| to the Comptroller on the last business day of
the fiscal |
|
|
|
HB4636 |
- 40 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| year immediately preceding the fiscal year for which it is | 2 |
| to be
effective.
| 3 |
| (3) The Comptroller shall order transferred and the | 4 |
| Treasurer shall
transfer from the Tobacco Settlement | 5 |
| Recovery Fund to the Income Tax Refund
Fund (i) $35,000,000 | 6 |
| in January, 2001, (ii) $35,000,000 in January, 2002, and
| 7 |
| (iii) $35,000,000 in January, 2003.
| 8 |
| (d) Expenditures from Income Tax Refund Fund.
| 9 |
| (1) Beginning January 1, 1989, money in the Income Tax | 10 |
| Refund Fund
shall be expended exclusively for the purpose | 11 |
| of paying refunds resulting
from overpayment of tax | 12 |
| liability under Section 201 of this Act, for paying
rebates | 13 |
| under Section 208.1 in the event that the amounts in the | 14 |
| Homeowners'
Tax Relief Fund are insufficient for that | 15 |
| purpose,
and for
making transfers pursuant to this | 16 |
| subsection (d).
| 17 |
| (2) The Director shall order payment of refunds | 18 |
| resulting from
overpayment of tax liability under Section | 19 |
| 201 of this Act from the
Income Tax Refund Fund only to the | 20 |
| extent that amounts collected pursuant
to Section 201 of | 21 |
| this Act and transfers pursuant to this subsection (d)
and | 22 |
| item (3) of subsection (c) have been deposited and retained | 23 |
| in the
Fund.
| 24 |
| (3) As soon as possible after the end of each fiscal | 25 |
| year, the Director
shall
order transferred and the State | 26 |
| Treasurer and State Comptroller shall
transfer from the |
|
|
|
HB4636 |
- 41 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| Income Tax Refund Fund to the Personal Property Tax
| 2 |
| Replacement Fund an amount, certified by the Director to | 3 |
| the Comptroller,
equal to the excess of the amount | 4 |
| collected pursuant to subsections (c) and
(d) of Section | 5 |
| 201 of this Act deposited into the Income Tax Refund Fund
| 6 |
| during the fiscal year over the amount of refunds resulting | 7 |
| from
overpayment of tax liability under subsections (c) and | 8 |
| (d) of Section 201
of this Act paid from the Income Tax | 9 |
| Refund Fund during the fiscal year.
| 10 |
| (4) As soon as possible after the end of each fiscal | 11 |
| year, the Director shall
order transferred and the State | 12 |
| Treasurer and State Comptroller shall
transfer from the | 13 |
| Personal Property Tax Replacement Fund to the Income Tax
| 14 |
| Refund Fund an amount, certified by the Director to the | 15 |
| Comptroller, equal
to the excess of the amount of refunds | 16 |
| resulting from overpayment of tax
liability under | 17 |
| subsections (c) and (d) of Section 201 of this Act paid
| 18 |
| from the Income Tax Refund Fund during the fiscal year over | 19 |
| the amount
collected pursuant to subsections (c) and (d) of | 20 |
| Section 201 of this Act
deposited into the Income Tax | 21 |
| Refund Fund during the fiscal year.
| 22 |
| (4.5) As soon as possible after the end of fiscal year | 23 |
| 1999 and of each
fiscal year
thereafter, the Director shall | 24 |
| order transferred and the State Treasurer and
State | 25 |
| Comptroller shall transfer from the Income Tax Refund Fund | 26 |
| to the General
Revenue Fund any surplus remaining in the |
|
|
|
HB4636 |
- 42 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| Income Tax Refund Fund as of the end
of such fiscal year; | 2 |
| excluding for fiscal years 2000, 2001, and 2002
amounts | 3 |
| attributable to transfers under item (3) of subsection (c) | 4 |
| less refunds
resulting from the earned income tax credit.
| 5 |
| (5) This Act shall constitute an irrevocable and | 6 |
| continuing
appropriation from the Income Tax Refund Fund | 7 |
| for the purpose of paying
refunds upon the order of the | 8 |
| Director in accordance with the provisions of
this Section.
| 9 |
| (e) Deposits into the Education Assistance Fund and the | 10 |
| Income Tax
Surcharge Local Government Distributive Fund.
| 11 |
| On July 1, 1991, and thereafter, of the amounts collected | 12 |
| pursuant to
subsections (a) and (b) of Section 201 of this Act, | 13 |
| minus deposits into the
Income Tax Refund Fund, the Department | 14 |
| shall deposit 7.3% into the
Education Assistance Fund in the | 15 |
| State Treasury. Beginning July 1, 1991,
and continuing through | 16 |
| January 31, 1993, of the amounts collected pursuant to
| 17 |
| subsections (a) and (b) of Section 201 of the Illinois Income | 18 |
| Tax Act, minus
deposits into the Income Tax Refund Fund, the | 19 |
| Department shall deposit 3.0%
into the Income Tax Surcharge | 20 |
| Local Government Distributive Fund in the State
Treasury. | 21 |
| Beginning February 1, 1993 and continuing through June 30, | 22 |
| 1993, of
the amounts collected pursuant to subsections (a) and | 23 |
| (b) of Section 201 of the
Illinois Income Tax Act, minus | 24 |
| deposits into the Income Tax Refund Fund, the
Department shall | 25 |
| deposit 4.4% into the Income Tax Surcharge Local Government
| 26 |
| Distributive Fund in the State Treasury. Beginning July 1, |
|
|
|
HB4636 |
- 43 - |
LRB095 17012 BDD 43060 b |
|
| 1 |
| 1993, and
continuing through June 30, 1994, of the amounts | 2 |
| collected under subsections
(a) and (b) of Section 201 of this | 3 |
| Act, minus deposits into the Income Tax
Refund Fund, the | 4 |
| Department shall deposit 1.475% into the Income Tax Surcharge
| 5 |
| Local Government Distributive Fund in the State Treasury.
| 6 |
| (Source: P.A. 94-91, eff. 7-1-05; 94-839, eff. 6-6-06; 95-707, | 7 |
| eff. 1-11-08.)
| 8 |
| Section 99. Effective date. This Act takes effect upon | 9 |
| becoming law.
|
|