Sen. Don Harmon
Filed: 4/11/2014
 
 


 




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1
AMENDMENT TO SENATE BILL 350




2 AMENDMENT NO. ______. Amend Senate Bill 350 by replacing 
3everything after the enacting clause with the following:


4 "Section 5. The State Revenue Sharing Act is amended by 
5changing Section 1 as follows:




6 (30 ILCS 115/1) (from Ch. 85, par. 611)



7 Sec. 1. Local Government Distributive Fund. 
8 (a) Through June 30, 1994, as
soon as may be after the 
9first day of each month the Department of Revenue
shall certify 
10to the Treasurer an amount equal to 1/12 of the net revenue

11realized from the tax imposed by subsections (a) and (b) of 
12Section 201 of the
Illinois Income Tax Act during the preceding 
13month.
14  Beginning July 1, 1994,
and continuing through June 30, 
151995, as soon as may be after the first day of
each month, the 
16Department of Revenue shall certify to the Treasurer an amount

 
 
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1equal to 1/11 of the net revenue realized from the tax imposed 
2by subsections
(a) and (b) of Section 201 of the Illinois 
3Income Tax Act during the preceding
month.
4  Beginning July 1, 1995 and continuing through January 31, 
52011, as soon as may be after the first day of each
month, the 
6Department of Revenue shall certify to the Treasurer an amount 
7equal
to 1/10 of the net revenue realized from the tax imposed 
8by subsections (a) and
(b) of Section 201 of the Illinois 
9Income Tax Act during the preceding month.
10 For the purpose of this subsection (a), net
Net revenue 
11realized for a month shall be defined as the revenue from the 
12tax
imposed by subsections (a) and (b) of Section 201 of the 
13Illinois Income Tax
Act which is deposited in the General 
14Revenue Fund, the Education Assistance
Fund and the Income Tax 
15Surcharge Local Government Distributive Fund during the
month 
16minus the amount paid out of the General Revenue Fund in State 
17warrants
during that same month as refunds to taxpayers for 
18overpayment of liability
under the tax imposed by subsections 
19(a) and (b) of Section 201 of the Illinois
Income Tax Act.
20  Upon receipt of a such certification under this subsection 
21(a), the Treasurer shall
transfer from the General Revenue Fund 
22to a special fund in the State treasury,
to be known as the 
23"Local Government Distributive Fund", the amount shown on
such 
24certification.

25 (b) Beginning February 1, 2011, for all payments collected 
26on or after December 31, 2010, the Treasurer shall transfer 
 
 
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1from the General Revenue Fund into the Local Government 
2Distributive Fund the amounts required to be transferred under 
3subsection (b) of Section 901 of the Illinois Income Tax Act. 
4 (c) All amounts paid into the Local Government Distributive 
5Fund in accordance
with this Section and allocated pursuant to 
6this Act are appropriated on a
continuing basis.

7(Source: P.A. 88-89.)


8 Section 10. If and only if Senate Joint Resolution 
9Constitutional Amendment 40 of the 98th General Assembly is 
10adopted in accordance with Section 7 of the Illinois 
11Constitutional Amendment Act, the Illinois Income Tax Act is 
12amended by changing Sections 201, 502, and 901 as follows:

13 (35 ILCS 5/201) (from Ch. 120, par. 2-201)
14 Sec. 201. Tax Imposed. 
15 (a) In general. A tax measured by net income is hereby 
16imposed on every
individual, corporation, trust and estate for 
17each taxable year ending
after July 31, 1969 on the privilege 
18of earning or receiving income in or
as a resident of this 
19State. Such tax shall be in addition to all other
occupation or 
20privilege taxes imposed by this State or by any municipal

21corporation or political subdivision thereof.
22 (b) Rates. The tax imposed by subsection (a) of this 
23Section shall be
determined as follows, except as adjusted by 
24subsection (d-1):
 
 
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1  (1) In the case of an individual, trust or estate, for 
2 taxable years
ending prior to July 1, 1989, an amount equal 
3 to 2 1/2% of the taxpayer's
net income for the taxable 
4 year.
5  (2) In the case of an individual, trust or estate, for 
6 taxable years
beginning prior to July 1, 1989 and ending 
7 after June 30, 1989, an amount
equal to the sum of (i) 2 
8 1/2% of the taxpayer's net income for the period
prior to 
9 July 1, 1989, as calculated under Section 202.3, and (ii) 
10 3% of the
taxpayer's net income for the period after June 
11 30, 1989, as calculated
under Section 202.3.
12  (3) In the case of an individual, trust or estate, for 
13 taxable years
beginning after June 30, 1989, and ending 
14 prior to January 1, 2011, an amount equal to 3% of the 
15 taxpayer's net
income for the taxable year.
16  (4) In the case of an individual, trust, or estate, for 
17 taxable years beginning prior to January 1, 2011, and 
18 ending after December 31, 2010, an amount equal to the sum 
19 of (i) 3% of the taxpayer's net income for the period prior 
20 to January 1, 2011, as calculated under Section 202.5, and 
21 (ii) 5% of the taxpayer's net income for the period after 
22 December 31, 2010, as calculated under Section 202.5.
23  (5) In the case of an individual, trust, or estate, for 
24 taxable years beginning on or after January 1, 2011, and 
25 ending prior to December 31, 2015 January 1, 2015, an 
26 amount equal to 5% of the taxpayer's net income for the 
 
 
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1 taxable year.
2  (5.1) Graduated rates. 
3   (A) In the case of an individual, spouses filing a 
4 joint return, a trust, or an estate, for taxable years 
5 ending on or after December 31, 2015, the tax imposed 
6 by subsection (a) of this Section shall be computed at 
7 the following rates:
8    (i) on that portion of the taxpayer's net 
9 income that does not exceed $12,500, 2.9%; plus
10    (ii) on that portion of the taxpayer's net 
11 income exceeding $12,500, but not exceeding 
12 $180,000, 4.9%; plus
13    (iii) on that portion of the taxpayer's net 
14 income exceeding $180,000, 6.9%.
15   (B) In the case of a nonresident or part-year 
16 resident, the tax liability shall be determined by 
17 applying the rates in this paragraph (5.1) to the net 
18 income of the taxpayer computed as if the taxpayer were 
19 a resident for the entire taxable year, and multiplying 
20 the result by a fraction equal to the taxpayer's net 
21 income (before the allowance of the net loss deduction 
22 under Section 207 of this Act in the case of a trust or 
23 estate) divided by the net income (before the allowance 
24 of the net loss deduction under Section 207 of this Act 
25 in the case of a trust or estate) computed as if the 
26 taxpayer were a resident for the entire taxable year, 
 
 
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1 provided that the fraction may not exceed 100%. 
2  In the case of an individual, trust, or estate, for 
3 taxable years beginning prior to January 1, 2015, and 
4 ending after December 31, 2014, an amount equal to the sum 
5 of (i) 5% of the taxpayer's net income for the period prior 
6 to January 1, 2015, as calculated under Section 202.5, and 
7 (ii) 3.75% of the taxpayer's net income for the period 
8 after December 31, 2014, as calculated under Section 202.5. 
9  (5.2) (Blank). In the case of an individual, trust, or 
10 estate, for taxable years beginning on or after January 1, 
11 2015, and ending prior to January 1, 2025, an amount equal 
12 to 3.75% of the taxpayer's net income for the taxable year. 
13  (5.3) (Blank). In the case of an individual, trust, or 
14 estate, for taxable years beginning prior to January 1, 
15 2025, and ending after December 31, 2024, an amount equal 
16 to the sum of (i) 3.75% of the taxpayer's net income for 
17 the period prior to January 1, 2025, as calculated under 
18 Section 202.5, and (ii) 3.25% of the taxpayer's net income 
19 for the period after December 31, 2024, as calculated under 
20 Section 202.5. 
21  (5.4) (Blank). In the case of an individual, trust, or 
22 estate, for taxable years beginning on or after January 1, 
23 2025, an amount equal to 3.25% of the taxpayer's net income 
24 for the taxable year. 
25  (6) In the case of a corporation, for taxable years

26 ending prior to July 1, 1989, an amount equal to 4% of the

 
 
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1 taxpayer's net income for the taxable year.
2  (7) In the case of a corporation, for taxable years 
3 beginning prior to
July 1, 1989 and ending after June 30, 
4 1989, an amount equal to the sum of
(i) 4% of the 
5 taxpayer's net income for the period prior to July 1, 1989,

6 as calculated under Section 202.3, and (ii) 4.8% of the 
7 taxpayer's net
income for the period after June 30, 1989, 
8 as calculated under Section
202.3.
9  (8) In the case of a corporation, for taxable years 
10 beginning after
June 30, 1989, and ending prior to January 
11 1, 2011, an amount equal to 4.8% of the taxpayer's net 
12 income for the
taxable year.
13  (9) In the case of a corporation, for taxable years 
14 beginning prior to January 1, 2011, and ending after 
15 December 31, 2010, an amount equal to the sum of (i) 4.8% 
16 of the taxpayer's net income for the period prior to 
17 January 1, 2011, as calculated under Section 202.5, and 
18 (ii) 7% of the taxpayer's net income for the period after 
19 December 31, 2010, as calculated under Section 202.5. 
20  (10) In the case of a corporation, for taxable years 
21 beginning on or after January 1, 2011, and ending prior to 
22 December 31, 2015 January 1, 2015, an amount equal to 7% of 
23 the taxpayer's net income for the taxable year. 
24  (11) In the case of a corporation, for taxable years 
25 ending on or after December 31, 2015, the tax imposed by 
26 subsection (a) of this Section shall be computed at the 
 
 
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1 following rates:
2   (i) on that portion of the corporation's net income 
3 that does not exceed $12,500, 2.9%; plus 
4   (ii) on that portion of the corporation's net 
5 income exceeding $12,500, but not exceeding $180,000, 
6 4.9%; plus 
7   (iii) on that portion of the corporation's net 
8 income exceeding $180,000, 6.9%. 
9  The corporation's tax liability shall be determined by 
10 applying the table in this paragraph (11) to the net income 
11 of the corporation computed as if it were a resident, and 
12 multiplying the result by a fraction equal to the 
13 corporation's net income (before the allowance of the net 
14 loss deduction under Section 207 of this Act) divided by 
15 the net income (before the allowance of the net loss 
16 deduction under Section 207 of this Act) computed as if it 
17 were a resident, provided that the fraction may not exceed 
18 100%. 
19  In the case of a corporation, for taxable years 
20 beginning prior to January 1, 2015, and ending after 
21 December 31, 2014, an amount equal to the sum of (i) 7% of 
22 the taxpayer's net income for the period prior to January 
23 1, 2015, as calculated under Section 202.5, and (ii) 5.25% 
24 of the taxpayer's net income for the period after December 
25 31, 2014, as calculated under Section 202.5. 
26  (12) (Blank). In the case of a corporation, for taxable 
 
 
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1 years beginning on or after January 1, 2015, and ending 
2 prior to January 1, 2025, an amount equal to 5.25% of the 
3 taxpayer's net income for the taxable year. 
4  (13) (Blank). In the case of a corporation, for taxable 
5 years beginning prior to January 1, 2025, and ending after 
6 December 31, 2024, an amount equal to the sum of (i) 5.25% 
7 of the taxpayer's net income for the period prior to 
8 January 1, 2025, as calculated under Section 202.5, and 
9 (ii) 4.8% of the taxpayer's net income for the period after 
10 December 31, 2024, as calculated under Section 202.5. 
11  (14) (Blank). In the case of a corporation, for taxable 
12 years beginning on or after January 1, 2025, an amount 
13 equal to 4.8% of the taxpayer's net income for the taxable 
14 year. 
15 The rates under this subsection (b) are subject to the 
16provisions of Section 201.5. 
17 (c) Personal Property Tax Replacement Income Tax.

18Beginning on July 1, 1979 and thereafter, in addition to such 
19income
tax, there is also hereby imposed the Personal Property 
20Tax Replacement
Income Tax measured by net income on every 
21corporation (including Subchapter
S corporations), partnership 
22and trust, for each taxable year ending after
June 30, 1979. 
23Such taxes are imposed on the privilege of earning or
receiving 
24income in or as a resident of this State. The Personal Property

25Tax Replacement Income Tax shall be in addition to the income 
26tax imposed
by subsections (a) and (b) of this Section and in 
 
 
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1addition to all other
occupation or privilege taxes imposed by 
2this State or by any municipal
corporation or political 
3subdivision thereof.
4 (d) Additional Personal Property Tax Replacement Income 
5Tax Rates.
The personal property tax replacement income tax 
6imposed by this subsection
and subsection (c) of this Section 
7in the case of a corporation, other
than a Subchapter S 
8corporation and except as adjusted by subsection (d-1),
shall 
9be an additional amount equal to
2.85% of such taxpayer's net 
10income for the taxable year, except that
beginning on January 
111, 1981, and thereafter, the rate of 2.85% specified
in this 
12subsection shall be reduced to 2.5%, and in the case of a

13partnership, trust or a Subchapter S corporation shall be an 
14additional
amount equal to 1.5% of such taxpayer's net income 
15for the taxable year.
16 (d-1) Rate reduction for certain foreign insurers. In the 
17case of a
foreign insurer, as defined by Section 35A-5 of the 
18Illinois Insurance Code,
whose state or country of domicile 
19imposes on insurers domiciled in Illinois
a retaliatory tax 
20(excluding any insurer
whose premiums from reinsurance assumed 
21are 50% or more of its total insurance
premiums as determined 
22under paragraph (2) of subsection (b) of Section 304,
except 
23that for purposes of this determination premiums from 
24reinsurance do
not include premiums from inter-affiliate 
25reinsurance arrangements),
beginning with taxable years ending 
26on or after December 31, 1999,
the sum of
the rates of tax 
 
 
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1imposed by subsections (b) and (d) shall be reduced (but not

2increased) to the rate at which the total amount of tax imposed 
3under this Act,
net of all credits allowed under this Act, 
4shall equal (i) the total amount of
tax that would be imposed 
5on the foreign insurer's net income allocable to
Illinois for 
6the taxable year by such foreign insurer's state or country of

7domicile if that net income were subject to all income taxes 
8and taxes
measured by net income imposed by such foreign 
9insurer's state or country of
domicile, net of all credits 
10allowed or (ii) a rate of zero if no such tax is
imposed on such 
11income by the foreign insurer's state of domicile.
For the 
12purposes of this subsection (d-1), an inter-affiliate includes 
13a
mutual insurer under common management.
14  (1) For the purposes of subsection (d-1), in no event 
15 shall the sum of the
rates of tax imposed by subsections 
16 (b) and (d) be reduced below the rate at
which the sum of:
17   (A) the total amount of tax imposed on such foreign 
18 insurer under
this Act for a taxable year, net of all 
19 credits allowed under this Act, plus
20   (B) the privilege tax imposed by Section 409 of the 
21 Illinois Insurance
Code, the fire insurance company 
22 tax imposed by Section 12 of the Fire
Investigation 
23 Act, and the fire department taxes imposed under 
24 Section 11-10-1
of the Illinois Municipal Code,
25 equals 1.25% for taxable years ending prior to December 31, 
26 2003, or
1.75% for taxable years ending on or after 
 
 
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1 December 31, 2003, of the net
taxable premiums written for 
2 the taxable year,
as described by subsection (1) of Section 
3 409 of the Illinois Insurance Code.
This paragraph will in 
4 no event increase the rates imposed under subsections
(b) 
5 and (d).
6  (2) Any reduction in the rates of tax imposed by this 
7 subsection shall be
applied first against the rates imposed 
8 by subsection (b) and only after the
tax imposed by 
9 subsection (a) net of all credits allowed under this 
10 Section
other than the credit allowed under subsection (i) 
11 has been reduced to zero,
against the rates imposed by 
12 subsection (d).
13 This subsection (d-1) is exempt from the provisions of 
14Section 250.
15 (e) Investment credit. A taxpayer shall be allowed a credit

16against the Personal Property Tax Replacement Income Tax for

17investment in qualified property.
18  (1) A taxpayer shall be allowed a credit equal to .5% 
19 of
the basis of qualified property placed in service during 
20 the taxable year,
provided such property is placed in 
21 service on or after
July 1, 1984. There shall be allowed an 
22 additional credit equal
to .5% of the basis of qualified 
23 property placed in service during the
taxable year, 
24 provided such property is placed in service on or
after 
25 July 1, 1986, and the taxpayer's base employment
within 
26 Illinois has increased by 1% or more over the preceding 
 
 
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1 year as
determined by the taxpayer's employment records 
2 filed with the
Illinois Department of Employment Security. 
3 Taxpayers who are new to
Illinois shall be deemed to have 
4 met the 1% growth in base employment for
the first year in 
5 which they file employment records with the Illinois

6 Department of Employment Security. The provisions added to 
7 this Section by
Public Act 85-1200 (and restored by Public 
8 Act 87-895) shall be
construed as declaratory of existing 
9 law and not as a new enactment. If,
in any year, the 
10 increase in base employment within Illinois over the

11 preceding year is less than 1%, the additional credit shall 
12 be limited to that
percentage times a fraction, the 
13 numerator of which is .5% and the denominator
of which is 
14 1%, but shall not exceed .5%. The investment credit shall 
15 not be
allowed to the extent that it would reduce a 
16 taxpayer's liability in any tax
year below zero, nor may 
17 any credit for qualified property be allowed for any
year 
18 other than the year in which the property was placed in 
19 service in
Illinois. For tax years ending on or after 
20 December 31, 1987, and on or
before December 31, 1988, the 
21 credit shall be allowed for the tax year in
which the 
22 property is placed in service, or, if the amount of the 
23 credit
exceeds the tax liability for that year, whether it 
24 exceeds the original
liability or the liability as later 
25 amended, such excess may be carried
forward and applied to 
26 the tax liability of the 5 taxable years following
the 
 
 
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1 excess credit years if the taxpayer (i) makes investments 
2 which cause
the creation of a minimum of 2,000 full-time 
3 equivalent jobs in Illinois,
(ii) is located in an 
4 enterprise zone established pursuant to the Illinois

5 Enterprise Zone Act and (iii) is certified by the 
6 Department of Commerce
and Community Affairs (now 
7 Department of Commerce and Economic Opportunity) as 
8 complying with the requirements specified in
clause (i) and 
9 (ii) by July 1, 1986. The Department of Commerce and

10 Community Affairs (now Department of Commerce and Economic 
11 Opportunity) shall notify the Department of Revenue of all 
12 such
certifications immediately. For tax years ending 
13 after December 31, 1988,
the credit shall be allowed for 
14 the tax year in which the property is
placed in service, 
15 or, if the amount of the credit exceeds the tax
liability 
16 for that year, whether it exceeds the original liability or 
17 the
liability as later amended, such excess may be carried 
18 forward and applied
to the tax liability of the 5 taxable 
19 years following the excess credit
years. The credit shall 
20 be applied to the earliest year for which there is
a 
21 liability. If there is credit from more than one tax year 
22 that is
available to offset a liability, earlier credit 
23 shall be applied first.
24  (2) The term "qualified property" means property 
25 which:
26   (A) is tangible, whether new or used, including 
 
 
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1 buildings and structural
components of buildings and 
2 signs that are real property, but not including
land or 
3 improvements to real property that are not a structural 
4 component of a
building such as landscaping, sewer 
5 lines, local access roads, fencing, parking
lots, and 
6 other appurtenances;
7   (B) is depreciable pursuant to Section 167 of the 
8 Internal Revenue Code,
except that "3-year property" 
9 as defined in Section 168(c)(2)(A) of that
Code is not 
10 eligible for the credit provided by this subsection 
11 (e);
12   (C) is acquired by purchase as defined in Section 
13 179(d) of
the Internal Revenue Code;
14   (D) is used in Illinois by a taxpayer who is 
15 primarily engaged in
manufacturing, or in mining coal 
16 or fluorite, or in retailing, or was placed in service 
17 on or after July 1, 2006 in a River Edge Redevelopment 
18 Zone established pursuant to the River Edge 
19 Redevelopment Zone Act; and
20   (E) has not previously been used in Illinois in 
21 such a manner and by
such a person as would qualify for 
22 the credit provided by this subsection
(e) or 
23 subsection (f).
24  (3) For purposes of this subsection (e), 
25 "manufacturing" means
the material staging and production 
26 of tangible personal property by
procedures commonly 
 
 
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1 regarded as manufacturing, processing, fabrication, or

2 assembling which changes some existing material into new 
3 shapes, new
qualities, or new combinations. For purposes of 
4 this subsection
(e) the term "mining" shall have the same 
5 meaning as the term "mining" in
Section 613(c) of the 
6 Internal Revenue Code. For purposes of this subsection
(e), 
7 the term "retailing" means the sale of tangible personal 
8 property for use or consumption and not for resale, or

9 services rendered in conjunction with the sale of tangible 
10 personal property for use or consumption and not for 
11 resale. For purposes of this subsection (e), "tangible 
12 personal property" has the same meaning as when that term 
13 is used in the Retailers' Occupation Tax Act, and, for 
14 taxable years ending after December 31, 2008, does not 
15 include the generation, transmission, or distribution of 
16 electricity.
17  (4) The basis of qualified property shall be the basis

18 used to compute the depreciation deduction for federal 
19 income tax purposes.
20  (5) If the basis of the property for federal income tax 
21 depreciation
purposes is increased after it has been placed 
22 in service in Illinois by
the taxpayer, the amount of such 
23 increase shall be deemed property placed
in service on the 
24 date of such increase in basis.
25  (6) The term "placed in service" shall have the same

26 meaning as under Section 46 of the Internal Revenue Code.
 
 
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1  (7) If during any taxable year, any property ceases to

2 be qualified property in the hands of the taxpayer within 
3 48 months after
being placed in service, or the situs of 
4 any qualified property is
moved outside Illinois within 48 
5 months after being placed in service, the
Personal Property 
6 Tax Replacement Income Tax for such taxable year shall be

7 increased. Such increase shall be determined by (i) 
8 recomputing the
investment credit which would have been 
9 allowed for the year in which
credit for such property was 
10 originally allowed by eliminating such
property from such 
11 computation and, (ii) subtracting such recomputed credit

12 from the amount of credit previously allowed. For the 
13 purposes of this
paragraph (7), a reduction of the basis of 
14 qualified property resulting
from a redetermination of the 
15 purchase price shall be deemed a disposition
of qualified 
16 property to the extent of such reduction.
17  (8) Unless the investment credit is extended by law, 
18 the
basis of qualified property shall not include costs 
19 incurred after
December 31, 2018, except for costs incurred 
20 pursuant to a binding
contract entered into on or before 
21 December 31, 2018.
22  (9) Each taxable year ending before December 31, 2000, 
23 a partnership may
elect to pass through to its
partners the 
24 credits to which the partnership is entitled under this 
25 subsection
(e) for the taxable year. A partner may use the 
26 credit allocated to him or her
under this paragraph only 
 
 
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1 against the tax imposed in subsections (c) and (d) of
this 
2 Section. If the partnership makes that election, those 
3 credits shall be
allocated among the partners in the 
4 partnership in accordance with the rules
set forth in 
5 Section 704(b) of the Internal Revenue Code, and the rules

6 promulgated under that Section, and the allocated amount of 
7 the credits shall
be allowed to the partners for that 
8 taxable year. The partnership shall make
this election on 
9 its Personal Property Tax Replacement Income Tax return for

10 that taxable year. The election to pass through the credits 
11 shall be
irrevocable.
12  For taxable years ending on or after December 31, 2000, 
13 a
partner that qualifies its
partnership for a subtraction 
14 under subparagraph (I) of paragraph (2) of
subsection (d) 
15 of Section 203 or a shareholder that qualifies a Subchapter 
16 S
corporation for a subtraction under subparagraph (S) of 
17 paragraph (2) of
subsection (b) of Section 203 shall be 
18 allowed a credit under this subsection
(e) equal to its 
19 share of the credit earned under this subsection (e) during

20 the taxable year by the partnership or Subchapter S 
21 corporation, determined in
accordance with the 
22 determination of income and distributive share of
income 
23 under Sections 702 and 704 and Subchapter S of the Internal 
24 Revenue
Code. This paragraph is exempt from the provisions 
25 of Section 250.
26 (f) Investment credit; Enterprise Zone; River Edge 
 
 
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1Redevelopment Zone.
2  (1) A taxpayer shall be allowed a credit against the 
3 tax imposed
by subsections (a) and (b) of this Section for 
4 investment in qualified
property which is placed in service 
5 in an Enterprise Zone created
pursuant to the Illinois 
6 Enterprise Zone Act or, for property placed in service on 
7 or after July 1, 2006, a River Edge Redevelopment Zone 
8 established pursuant to the River Edge Redevelopment Zone 
9 Act. For partners, shareholders
of Subchapter S 
10 corporations, and owners of limited liability companies,

11 if the liability company is treated as a partnership for 
12 purposes of
federal and State income taxation, there shall 
13 be allowed a credit under
this subsection (f) to be 
14 determined in accordance with the determination
of income 
15 and distributive share of income under Sections 702 and 704 
16 and
Subchapter S of the Internal Revenue Code. The credit 
17 shall be .5% of the
basis for such property. The credit 
18 shall be available only in the taxable
year in which the 
19 property is placed in service in the Enterprise Zone or 
20 River Edge Redevelopment Zone and
shall not be allowed to 
21 the extent that it would reduce a taxpayer's
liability for 
22 the tax imposed by subsections (a) and (b) of this Section 
23 to
below zero. For tax years ending on or after December 
24 31, 1985, the credit
shall be allowed for the tax year in 
25 which the property is placed in
service, or, if the amount 
26 of the credit exceeds the tax liability for that
year, 
 
 
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1 whether it exceeds the original liability or the liability 
2 as later
amended, such excess may be carried forward and 
3 applied to the tax
liability of the 5 taxable years 
4 following the excess credit year.
The credit shall be 
5 applied to the earliest year for which there is a

6 liability. If there is credit from more than one tax year 
7 that is available
to offset a liability, the credit 
8 accruing first in time shall be applied
first.
9  (2) The term qualified property means property which:
10   (A) is tangible, whether new or used, including 
11 buildings and
structural components of buildings;
12   (B) is depreciable pursuant to Section 167 of the 
13 Internal Revenue
Code, except that "3-year property" 
14 as defined in Section 168(c)(2)(A) of
that Code is not 
15 eligible for the credit provided by this subsection 
16 (f);
17   (C) is acquired by purchase as defined in Section 
18 179(d) of
the Internal Revenue Code;
19   (D) is used in the Enterprise Zone or River Edge 
20 Redevelopment Zone by the taxpayer; and
21   (E) has not been previously used in Illinois in 
22 such a manner and by
such a person as would qualify for 
23 the credit provided by this subsection
(f) or 
24 subsection (e).
25  (3) The basis of qualified property shall be the basis 
26 used to compute
the depreciation deduction for federal 
 
 
09800SB0350sam002- 21 -LRB098 04642 HLH 58523 a


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

22 from the amount of credit previously allowed. For the 
23 purposes of this
paragraph (6), a reduction of the basis of 
24 qualified property resulting
from a redetermination of the 
25 purchase price shall be deemed a disposition
of qualified 
26 property to the extent of such reduction.
 
 
09800SB0350sam002- 22 -LRB098 04642 HLH 58523 a


1  (7) There shall be allowed an additional credit equal 
2 to 0.5% of the basis of qualified property placed in 
3 service during the taxable year in a River Edge 
4 Redevelopment Zone, provided such property is placed in 
5 service on or after July 1, 2006, and the taxpayer's base 
6 employment within Illinois has increased by 1% or more over 
7 the preceding year as determined by the taxpayer's 
8 employment records filed with the Illinois Department of 
9 Employment Security. Taxpayers who are new to Illinois 
10 shall be deemed to have met the 1% growth in base 
11 employment for the first year in which they file employment 
12 records with the Illinois Department of Employment 
13 Security. If, in any year, the increase in base employment 
14 within Illinois over the preceding year is less than 1%, 
15 the additional credit shall be limited to that percentage 
16 times a fraction, the numerator of which is 0.5% and the 
17 denominator of which is 1%, but shall not exceed 0.5%.

18 (g) (Blank).
19 (h) Investment credit; High Impact Business.
20  (1) Subject to subsections (b) and (b-5) of Section
5.5 
21 of the Illinois Enterprise Zone Act, a taxpayer shall be 
22 allowed a credit
against the tax imposed by subsections (a) 
23 and (b) of this Section for
investment in qualified

24 property which is placed in service by a Department of 
25 Commerce and Economic Opportunity
designated High Impact 
26 Business. The credit shall be .5% of the basis
for such 
 
 
09800SB0350sam002- 23 -LRB098 04642 HLH 58523 a


1 property. The credit shall not be available (i) until the 
2 minimum
investments in qualified property set forth in 
3 subdivision (a)(3)(A) of
Section 5.5 of the Illinois

4 Enterprise Zone Act have been satisfied
or (ii) until the 
5 time authorized in subsection (b-5) of the Illinois

6 Enterprise Zone Act for entities designated as High Impact 
7 Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and 
8 (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone 
9 Act, and shall not be allowed to the extent that it would

10 reduce a taxpayer's liability for the tax imposed by 
11 subsections (a) and (b) of
this Section to below zero. The 
12 credit applicable to such investments shall be
taken in the 
13 taxable year in which such investments have been completed. 
14 The
credit for additional investments beyond the minimum 
15 investment by a designated
high impact business authorized 
16 under subdivision (a)(3)(A) of Section 5.5 of
the Illinois 
17 Enterprise Zone Act shall be available only in the taxable 
18 year in
which the property is placed in service and shall 
19 not be allowed to the extent
that it would reduce a 
20 taxpayer's liability for the tax imposed by subsections
(a) 
21 and (b) of this Section to below zero.
For tax years ending 
22 on or after December 31, 1987, the credit shall be
allowed 
23 for the tax year in which the property is placed in 
24 service, or, if
the amount of the credit exceeds the tax 
25 liability for that year, whether
it exceeds the original 
26 liability or the liability as later amended, such
excess 
 
 
09800SB0350sam002- 24 -LRB098 04642 HLH 58523 a


1 may be carried forward and applied to the tax liability of 
2 the 5
taxable years following the excess credit year. The 
3 credit shall be
applied to the earliest year for which 
4 there is a liability. If there is
credit from more than one 
5 tax year that is available to offset a liability,
the 
6 credit accruing first in time shall be applied first.
7  Changes made in this subdivision (h)(1) by Public Act 
8 88-670
restore changes made by Public Act 85-1182 and 
9 reflect existing law.
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 (h);
18   (C) is acquired by purchase as defined in Section 
19 179(d) of the
Internal Revenue Code; and
20   (D) is not eligible for the Enterprise Zone 
21 Investment Credit provided
by subsection (f) of this 
22 Section.
23  (3) The basis of qualified property shall be the basis 
24 used to compute
the depreciation deduction for federal 
25 income tax purposes.
26  (4) If the basis of the property for federal income tax 
 
 
09800SB0350sam002- 25 -LRB098 04642 HLH 58523 a


1 depreciation
purposes is increased after it has been placed 
2 in service in a federally
designated Foreign Trade Zone or 
3 Sub-Zone located in Illinois by the taxpayer,
the amount of 
4 such increase shall be deemed property placed in service on

5 the date of such increase in basis.
6  (5) The term "placed in service" shall have the same 
7 meaning as under
Section 46 of the Internal Revenue Code.
8  (6) If during any taxable year ending on or before 
9 December 31, 1996,
any property ceases to be qualified

10 property in the hands of the taxpayer within 48 months 
11 after being placed
in service, or the situs of any 
12 qualified property is moved outside
Illinois within 48 
13 months after being placed in service, the tax imposed
under 
14 subsections (a) and (b) of this Section for such taxable 
15 year shall
be increased. Such increase shall be determined 
16 by (i) recomputing the
investment credit which would have 
17 been allowed for the year in which
credit for such property 
18 was originally allowed by eliminating such
property from 
19 such computation, and (ii) subtracting such recomputed 
20 credit
from the amount of credit previously allowed. For 
21 the purposes of this
paragraph (6), a reduction of the 
22 basis of qualified property resulting
from a 
23 redetermination of the purchase price shall be deemed a 
24 disposition
of qualified property to the extent of such 
25 reduction.
26  (7) Beginning with tax years ending after December 31, 
 
 
09800SB0350sam002- 26 -LRB098 04642 HLH 58523 a


1 1996, if a
taxpayer qualifies for the credit under this 
2 subsection (h) and thereby is
granted a tax abatement and 
3 the taxpayer relocates its entire facility in
violation of 
4 the explicit terms and length of the contract under Section

5 18-183 of the Property Tax Code, the tax imposed under 
6 subsections
(a) and (b) of this Section shall be increased 
7 for the taxable year
in which the taxpayer relocated its 
8 facility by an amount equal to the
amount of credit 
9 received by the taxpayer under this subsection (h).
10 (i) Credit for Personal Property Tax Replacement Income 
11Tax.
For tax years ending prior to December 31, 2003, a credit 
12shall be allowed
against the tax imposed by
subsections (a) and 
13(b) of this Section for the tax imposed by subsections (c)
and 
14(d) of this Section. This credit shall be computed by 
15multiplying the tax
imposed by subsections (c) and (d) of this 
16Section by a fraction, the numerator
of which is base income 
17allocable to Illinois and the denominator of which is
Illinois 
18base income, and further multiplying the product by the tax 
19rate
imposed by subsections (a) and (b) of this Section.
20 Any credit earned on or after December 31, 1986 under
this 
21subsection which is unused in the year
the credit is computed 
22because it exceeds the tax liability imposed by
subsections (a) 
23and (b) for that year (whether it exceeds the original

24liability or the liability as later amended) may be carried 
25forward and
applied to the tax liability imposed by subsections 
26(a) and (b) of the 5
taxable years following the excess credit 
 
 
09800SB0350sam002- 27 -LRB098 04642 HLH 58523 a


1year, provided that no credit may
be carried forward to any 
2year ending on or
after December 31, 2003. This credit shall be

3applied first to the earliest year for which there is a 
4liability. If
there is a credit under this subsection from more 
5than one tax year that is
available to offset a liability the 
6earliest credit arising under this
subsection shall be applied 
7first.
8 If, during any taxable year ending on or after December 31, 
91986, the
tax imposed by subsections (c) and (d) of this 
10Section for which a taxpayer
has claimed a credit under this 
11subsection (i) is reduced, the amount of
credit for such tax 
12shall also be reduced. Such reduction shall be
determined by 
13recomputing the credit to take into account the reduced tax

14imposed by subsections (c) and (d). If any portion of the

15reduced amount of credit has been carried to a different 
16taxable year, an
amended return shall be filed for such taxable 
17year to reduce the amount of
credit claimed.
18 (j) Training expense credit. Beginning with tax years 
19ending on or
after December 31, 1986 and prior to December 31, 
202003, a taxpayer shall be
allowed a credit against the
tax 
21imposed by subsections (a) and (b) under this Section
for all 
22amounts paid or accrued, on behalf of all persons
employed by 
23the taxpayer in Illinois or Illinois residents employed
outside 
24of Illinois by a taxpayer, for educational or vocational 
25training in
semi-technical or technical fields or semi-skilled 
26or skilled fields, which
were deducted from gross income in the 
 
 
09800SB0350sam002- 28 -LRB098 04642 HLH 58523 a


1computation of taxable income. The
credit against the tax 
2imposed by subsections (a) and (b) shall be 1.6% of
such 
3training expenses. For partners, shareholders of subchapter S

4corporations, and owners of limited liability companies, if the 
5liability
company is treated as a partnership for purposes of 
6federal and State income
taxation, there shall be allowed a 
7credit under this subsection (j) to be
determined in accordance 
8with the determination of income and distributive
share of 
9income under Sections 702 and 704 and subchapter S of the 
10Internal
Revenue Code.
11 Any credit allowed under this subsection which is unused in 
12the year
the credit is earned may be carried forward to each of 
13the 5 taxable
years following the year for which the credit is 
14first computed until it is
used. This credit shall be applied 
15first to the earliest year for which
there is a liability. If 
16there is a credit under this subsection from more
than one tax 
17year that is available to offset a liability the earliest

18credit arising under this subsection shall be applied first. No 
19carryforward
credit may be claimed in any tax year ending on or 
20after
December 31, 2003.
21 (k) Research and development credit. For tax years ending 
22after July 1, 1990 and prior to
December 31, 2003, and 
23beginning again for tax years ending on or after December 31, 
242004, and ending prior to January 1, 2016, a taxpayer shall be

25allowed a credit against the tax imposed by subsections (a) and 
26(b) of this
Section for increasing research activities in this 
 
 
09800SB0350sam002- 29 -LRB098 04642 HLH 58523 a


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

 
 
09800SB0350sam002- 30 -LRB098 04642 HLH 58523 a


1unused credit shown on its final completed return carried over 
2as a credit
against the tax liability for the following 5 
3taxable years or until it has
been fully used, whichever occurs 
4first; provided that no credit earned in a tax year ending 
5prior to December 31, 2003 may be carried forward to any year 
6ending on or after December 31, 2003.
7 If an unused credit is carried forward to a given year from 
82 or more
earlier years, that credit arising in the earliest 
9year will be applied
first against the tax liability for the 
10given year. If a tax liability for
the given year still 
11remains, the credit from the next earliest year will
then be 
12applied, and so on, until all credits have been used or no tax

13liability for the given year remains. Any remaining unused 
14credit or
credits then will be carried forward to the next 
15following year in which a
tax liability is incurred, except 
16that no credit can be carried forward to
a year which is more 
17than 5 years after the year in which the expense for
which the 
18credit is given was incurred.
19 No inference shall be drawn from this amendatory Act of the 
2091st General
Assembly in construing this Section for taxable 
21years beginning before January
1, 1999.
22 (l) Environmental Remediation Tax Credit.
23  (i) For tax years ending after December 31, 1997 and on 
24 or before
December 31, 2001, a taxpayer shall be allowed a 
25 credit against the tax
imposed by subsections (a) and (b) 
26 of this Section for certain amounts paid
for unreimbursed 
 
 
09800SB0350sam002- 31 -LRB098 04642 HLH 58523 a


1 eligible remediation costs, as specified in this 
2 subsection.
For purposes of this Section, "unreimbursed 
3 eligible remediation costs" means
costs approved by the 
4 Illinois Environmental Protection Agency ("Agency") under

5 Section 58.14 of the Environmental Protection Act that were 
6 paid in performing
environmental remediation at a site for 
7 which a No Further Remediation Letter
was issued by the 
8 Agency and recorded under Section 58.10 of the 
9 Environmental
Protection Act. The credit must be claimed 
10 for the taxable year in which
Agency approval of the 
11 eligible remediation costs is granted. The credit is
not 
12 available to any taxpayer if the taxpayer or any related 
13 party caused or
contributed to, in any material respect, a 
14 release of regulated substances on,
in, or under the site 
15 that was identified and addressed by the remedial
action 
16 pursuant to the Site Remediation Program of the 
17 Environmental Protection
Act. After the Pollution Control 
18 Board rules are adopted pursuant to the
Illinois 
19 Administrative Procedure Act for the administration and 
20 enforcement of
Section 58.9 of the Environmental 
21 Protection Act, determinations as to credit
availability 
22 for purposes of this Section shall be made consistent with 
23 those
rules. For purposes of this Section, "taxpayer" 
24 includes a person whose tax
attributes the taxpayer has 
25 succeeded to under Section 381 of the Internal
Revenue Code 
26 and "related party" includes the persons disallowed a 
 
 
09800SB0350sam002- 32 -LRB098 04642 HLH 58523 a


1 deduction
for losses by paragraphs (b), (c), and (f)(1) of 
2 Section 267 of the Internal
Revenue Code by virtue of being 
3 a related taxpayer, as well as any of its
partners. The 
4 credit allowed against the tax imposed by subsections (a) 
5 and
(b) shall be equal to 25% of the unreimbursed eligible 
6 remediation costs in
excess of $100,000 per site, except 
7 that the $100,000 threshold shall not apply
to any site 
8 contained in an enterprise zone as determined by the 
9 Department of
Commerce and Community Affairs (now 
10 Department of Commerce and Economic Opportunity). The 
11 total credit allowed shall not exceed
$40,000 per year with 
12 a maximum total of $150,000 per site. For partners and

13 shareholders of subchapter S corporations, there shall be 
14 allowed a credit
under this subsection to be determined in 
15 accordance with the determination of
income and 
16 distributive share of income under Sections 702 and 704 and

17 subchapter S of the Internal Revenue Code.
18  (ii) A credit allowed under this subsection that is 
19 unused in the year
the credit is earned may be carried 
20 forward to each of the 5 taxable years
following the year 
21 for which the credit is first earned until it is used.
The 
22 term "unused credit" does not include any amounts of 
23 unreimbursed eligible
remediation costs in excess of the 
24 maximum credit per site authorized under
paragraph (i). 
25 This credit shall be applied first to the earliest year
for 
26 which there is a liability. If there is a credit under this 
 
 
09800SB0350sam002- 33 -LRB098 04642 HLH 58523 a


1 subsection
from more than one tax year that is available to 
2 offset a liability, the
earliest credit arising under this 
3 subsection shall be applied first. A
credit allowed under 
4 this subsection may be sold to a buyer as part of a sale
of 
5 all or part of the remediation site for which the credit 
6 was granted. The
purchaser of a remediation site and the 
7 tax credit shall succeed to the unused
credit and remaining 
8 carry-forward period of the seller. To perfect the

9 transfer, the assignor shall record the transfer in the 
10 chain of title for the
site and provide written notice to 
11 the Director of the Illinois Department of
Revenue of the 
12 assignor's intent to sell the remediation site and the 
13 amount of
the tax credit to be transferred as a portion of 
14 the sale. In no event may a
credit be transferred to any 
15 taxpayer if the taxpayer or a related party would
not be 
16 eligible under the provisions of subsection (i).
17  (iii) For purposes of this Section, the term "site" 
18 shall have the same
meaning as under Section 58.2 of the 
19 Environmental Protection Act.
20 (m) Education expense credit. Beginning with tax years 
21ending after
December 31, 1999, a taxpayer who
is the custodian 
22of one or more qualifying pupils shall be allowed a credit

23against the tax imposed by subsections (a) and (b) of this 
24Section for
qualified education expenses incurred on behalf of 
25the qualifying pupils.
The credit shall be equal to 25% of 
26qualified education expenses, but in no
event may the total 
 
 
09800SB0350sam002- 34 -LRB098 04642 HLH 58523 a


1credit under this subsection claimed by a
family that is the

2custodian of qualifying pupils exceed $500. In no event shall a 
3credit under
this subsection reduce the taxpayer's liability 
4under this Act to less than
zero. This subsection is exempt 
5from the provisions of Section 250 of this
Act.
6 For purposes of this subsection:
7 "Qualifying pupils" means individuals who (i) are 
8residents of the State of
Illinois, (ii) are under the age of 
921 at the close of the school year for
which a credit is 
10sought, and (iii) during the school year for which a credit
is 
11sought were full-time pupils enrolled in a kindergarten through 
12twelfth
grade education program at any school, as defined in 
13this subsection.
14 "Qualified education expense" means the amount incurred
on 
15behalf of a qualifying pupil in excess of $250 for tuition, 
16book fees, and
lab fees at the school in which the pupil is 
17enrolled during the regular school
year.
18 "School" means any public or nonpublic elementary or 
19secondary school in
Illinois that is in compliance with Title 
20VI of the Civil Rights Act of 1964
and attendance at which 
21satisfies the requirements of Section 26-1 of the
School Code, 
22except that nothing shall be construed to require a child to

23attend any particular public or nonpublic school to qualify for 
24the credit
under this Section.
25 "Custodian" means, with respect to qualifying pupils, an 
26Illinois resident
who is a parent, the parents, a legal 
 
 
09800SB0350sam002- 35 -LRB098 04642 HLH 58523 a


1guardian, or the legal guardians of the
qualifying pupils.
2 (n) River Edge Redevelopment Zone site remediation tax 
3credit.

4  (i) For tax years ending on or after December 31, 2006, 
5 a taxpayer shall be allowed a credit against the tax 
6 imposed by subsections (a) and (b) of this Section for 
7 certain amounts paid for unreimbursed eligible remediation 
8 costs, as specified in this subsection. For purposes of 
9 this Section, "unreimbursed eligible remediation costs" 
10 means costs approved by the Illinois Environmental 
11 Protection Agency ("Agency") under Section 58.14a of the 
12 Environmental Protection Act that were paid in performing 
13 environmental remediation at a site within a River Edge 
14 Redevelopment Zone for which a No Further Remediation 
15 Letter was issued by the Agency and recorded under Section 
16 58.10 of the Environmental Protection Act. The credit must 
17 be claimed for the taxable year in which Agency approval of 
18 the eligible remediation costs is granted. The credit is 
19 not available to any taxpayer if the taxpayer or any 
20 related party caused or contributed to, in any material 
21 respect, a release of regulated substances on, in, or under 
22 the site that was identified and addressed by the remedial 
23 action pursuant to the Site Remediation Program of the 
24 Environmental Protection Act. Determinations as to credit 
25 availability for purposes of this Section shall be made 
26 consistent with rules adopted by the Pollution Control 
 
 
09800SB0350sam002- 36 -LRB098 04642 HLH 58523 a


1 Board pursuant to the Illinois Administrative Procedure 
2 Act for the administration and enforcement of Section 58.9 
3 of the Environmental Protection Act. For purposes of this 
4 Section, "taxpayer" includes a person whose tax attributes 
5 the taxpayer has succeeded to under Section 381 of the 
6 Internal Revenue Code and "related party" includes the 
7 persons disallowed a deduction for losses by paragraphs 
8 (b), (c), and (f)(1) of Section 267 of the Internal Revenue 
9 Code by virtue of being a related taxpayer, as well as any 
10 of its partners. The credit allowed against the tax imposed 
11 by subsections (a) and (b) shall be equal to 25% of the 
12 unreimbursed eligible remediation costs in excess of 
13 $100,000 per site.
14  (ii) A credit allowed under this subsection that is 
15 unused in the year the credit is earned may be carried 
16 forward to each of the 5 taxable years following the year 
17 for which the credit is first earned until it is used. This 
18 credit shall be applied first to the earliest year for 
19 which there is a liability. If there is a credit under this 
20 subsection from more than one tax year that is available to 
21 offset a liability, the earliest credit arising under this 
22 subsection shall be applied first. A credit allowed under 
23 this subsection may be sold to a buyer as part of a sale of 
24 all or part of the remediation site for which the credit 
25 was granted. The purchaser of a remediation site and the 
26 tax credit shall succeed to the unused credit and remaining 
 
 
09800SB0350sam002- 37 -LRB098 04642 HLH 58523 a


1 carry-forward period of the seller. To perfect the 
2 transfer, the assignor shall record the transfer in the 
3 chain of title for the site and provide written notice to 
4 the Director of the Illinois Department of Revenue of the 
5 assignor's intent to sell the remediation site and the 
6 amount of the tax credit to be transferred as a portion of 
7 the sale. In no event may a credit be transferred to any 
8 taxpayer if the taxpayer or a related party would not be 
9 eligible under the provisions of subsection (i).
10  (iii) For purposes of this Section, the term "site" 
11 shall have the same meaning as under Section 58.2 of the 
12 Environmental Protection Act.
13 (o) For each of taxable years during the Compassionate Use 
14of Medical Cannabis Pilot Program, a surcharge is imposed on 
15all taxpayers on income arising from the sale or exchange of 
16capital assets, depreciable business property, real property 
17used in the trade or business, and Section 197 intangibles of 
18an organization registrant under the Compassionate Use of 
19Medical Cannabis Pilot Program Act. The amount of the surcharge 
20is equal to the amount of federal income tax liability for the 
21taxable year attributable to those sales and exchanges. The 
22surcharge imposed does not apply if:
23  (1) the medical cannabis cultivation center 
24 registration, medical cannabis dispensary registration, or 
25 the property of a registration is transferred as a result 
26 of any of the following:
 
 
09800SB0350sam002- 38 -LRB098 04642 HLH 58523 a


1   (A) bankruptcy, a receivership, or a debt 
2 adjustment initiated by or against the initial 
3 registration or the substantial owners of the initial 
4 registration;
5   (B) cancellation, revocation, or termination of 
6 any registration by the Illinois Department of Public 
7 Health;
8   (C) a determination by the Illinois Department of 
9 Public Health that transfer of the registration is in 
10 the best interests of Illinois qualifying patients as 
11 defined by the Compassionate Use of Medical Cannabis 
12 Pilot Program Act;
13   (D) the death of an owner of the equity interest in 
14 a registrant;
15   (E) the acquisition of a controlling interest in 
16 the stock or substantially all of the assets of a 
17 publicly traded company;
18   (F) a transfer by a parent company to a wholly 
19 owned subsidiary; or
20   (G) the transfer or sale to or by one person to 
21 another person where both persons were initial owners 
22 of the registration when the registration was issued; 
23 or
24  (2) the cannabis cultivation center registration, 
25 medical cannabis dispensary registration, or the 
26 controlling interest in a registrant's property is 
 
 
09800SB0350sam002- 39 -LRB098 04642 HLH 58523 a


1 transferred in a transaction to lineal descendants in which 
2 no gain or loss is recognized or as a result of a 
3 transaction in accordance with Section 351 of the Internal 
4 Revenue Code in which no gain or loss is recognized.
5(Source: P.A. 97-2, eff. 5-6-11; 97-636, eff. 6-1-12; 97-905, 
6eff. 8-7-12; 98-109, eff. 7-25-13; 98-122, eff. 1-1-14; revised 
78-9-13.)




8 (35 ILCS 5/502) (from Ch. 120, par. 5-502)



9 Sec. 502. Returns and notices. 

10 (a) In general. A return with respect to the taxes imposed 
11by this
Act shall be made by every person for any taxable year:


12  (1) for which such person is liable for a tax imposed 
13 by this Act,
or


14  (2) in the case of a resident or in the case of a 
15 corporation which
is qualified to do business in this 
16 State, for which such person is
required to make a federal 
17 income tax return, regardless of whether such
person is 
18 liable for a tax imposed by this Act. However, this 
19 paragraph
shall not require a resident to make a return if 
20 such person has
an
Illinois base income of the basic amount 
21 in Section 204(b) or
less and is either claimed as a 
22 dependent on
another person's tax return under the Internal 
23 Revenue Code, or is
claimed as a dependent on another 
24 person's tax return under this Act.

25 Notwithstanding the provisions of paragraph (1), a 
 
 
09800SB0350sam002- 40 -LRB098 04642 HLH 58523 a


1nonresident (other than, for taxable years ending on or after 
2December 31, 2011, a nonresident required to withhold tax under 
3Section 709.5) whose Illinois income tax liability under 
4subsections (a), (b), (c), and (d) of Section 201 of this Act 
5is paid in full after taking into account the credits allowed 
6under subsection (f) of this Section or allowed under Section 
7709.5 of this Act shall not be required to file a return under 
8this subsection (a).

9 (b) Fiduciaries and receivers.


10  (1) Decedents. If an individual is deceased, any return 
11 or notice
required of such individual under this Act shall 
12 be made by his
executor, administrator, or other person 
13 charged with the property of
such decedent.


14  (2) Individuals under a disability. If an individual is 
15 unable
to make a return or notice required under this Act, 
16 the return or notice
required of such individual shall be 
17 made by his duly authorized agent,
guardian, fiduciary or 
18 other person charged with the care
of the person or 
19 property of such individual.


20  (3) Estates and trusts. Returns or notices required of 
21 an estate
or a trust shall be made by the fiduciary 
22 thereof.


23  (4) Receivers, trustees and assignees for 
24 corporations. In a
case where a receiver, trustee in 
25 bankruptcy, or assignee, by order of a
court of competent 
26 jurisdiction, by operation of law, or otherwise, has

 
 
09800SB0350sam002- 41 -LRB098 04642 HLH 58523 a


1 possession of or holds title to all or substantially all 
2 the property or
business of a corporation, whether or not 
3 such property or business is
being operated, such receiver, 
4 trustee, or assignee shall make the
returns and notices 
5 required of such corporation in the same manner and
form as 
6 corporations are required to make such returns and notices.

7 (c) Joint returns by husband and wife.


8  (1) Except as provided in paragraph (3):
9   (A) if a husband and wife file a
joint federal 
10 income tax return for a taxable year ending before 
11 December 31, 2009, or for a taxable year ending on or 
12 after December 31, 2015, they shall file a joint
return 
13 under this Act for such taxable year and their 
14 liabilities shall be
joint and several, and any 
15 overpayment for that taxable year may be withheld under 
16 Section 909 of this Act or under Section 2505-275 of 
17 the Department of Revenue Law of the Civil 
18 Administrative Code of Illinois and applied against a 
19 debt of either spouse without regard to the amount of 
20 the overpayment attributable to the other spouse;
21   (B) if a husband and wife file a joint federal 
22 income tax return for a taxable year ending on or after 
23 December 31, 2009, and prior to December 31, 2015, they 
24 may elect to file separate returns under this Act for 
25 such taxable year. The election under this paragraph 
26 must be made on or before the due date (including 
 
 
09800SB0350sam002- 42 -LRB098 04642 HLH 58523 a


1 extensions) of the return and, once made, shall be 
2 irrevocable. If no election is timely made under this 
3 paragraph for a taxable year:
4    (i) the couple must file a joint return under 
5 this Act for such taxable year,
6    (ii) their liabilities shall be joint and 
7 several, and
8    (iii) any overpayment for that taxable year 
9 may be withheld under Section 909 of this Act or 
10 under Section 2505-275 of the Civil Administrative 
11 Code of Illinois and applied against a debt of 
12 either spouse without regard to the amount of the 
13 overpayment attributable to the other spouse; and
14   (C) if the federal income tax liability of either 
15 spouse is
determined on a separate federal income tax 
16 return, they shall file separate
returns under this 
17 Act.


18  (2) If neither spouse is required to file a federal 
19 income tax
return and either or both are required to file a 
20 return under this Act,
they may elect to file separate or 
21 joint returns and pursuant to such
election their 
22 liabilities shall be separate or joint and several.


23  (3) For taxable years ending prior to December 31, 
24 2015, if If either husband or wife is a resident and the 
25 other is a
nonresident, they shall file separate returns in 
26 this State on such
forms as may be required by the 
 
 
09800SB0350sam002- 43 -LRB098 04642 HLH 58523 a


1 Department in which event their tax
liabilities shall be 
2 separate; but if they file a joint federal income tax 
3 return for a taxable year, they may elect to determine 
4 their
joint net income and file a joint return for that 
5 taxable year under the provisions of paragraph (1) of this 
6 subsection as if both were residents and
in such case, 
7 their liabilities shall be joint and several.


8  (4) Innocent spouses.


9   (A) However, for tax liabilities arising and paid 
10 prior to August 13,
1999, an innocent spouse shall be 
11 relieved of
liability for tax
(including interest and 
12 penalties) for any taxable year for which a joint

13 return has been made, upon submission of proof that the 
14 Internal Revenue
Service has made a determination 
15 under Section 6013(e) of the Internal
Revenue Code, for 
16 the same taxable year, which determination relieved 
17 the
spouse from liability for federal income taxes.
If 
18 there is no federal income tax liability at issue for 
19 the
same taxable year, the Department shall rely on the 
20 provisions of Section
6013(e) to determine whether the 
21 person requesting innocent spouse abatement of
tax, 
22 penalty, and interest is entitled to that relief.


23   (B) For tax liabilities arising on and after August 
24 13, 1999 or which arose prior to that date, but remain 
25 unpaid as of that date, if
an individual
who filed a 
26 joint return for any taxable year has made an election 
 
 
09800SB0350sam002- 44 -LRB098 04642 HLH 58523 a


1 under this
paragraph, the individual's liability for 
2 any tax shown on the joint return
shall not exceed the 
3 individual's separate return amount and the 
4 individual's
liability for any deficiency assessed for 
5 that taxable year shall not exceed
the portion of the 
6 deficiency properly allocable to the individual. For

7 purposes of this paragraph:


8    (i) An election properly made pursuant to 
9 Section 6015 of the Internal
Revenue Code shall 
10 constitute an election under this paragraph, 
11 provided that
the election shall not be effective 
12 until the individual has notified the
Department 
13 of the election in the form and manner prescribed 
14 by the Department.


15    (ii) If no election has been made under Section 
16 6015, the individual
may make an election under 
17 this paragraph in the form and manner prescribed by

18 the Department, provided that no election may be 
19 made if the Department finds
that assets were 
20 transferred
between individuals filing a joint 
21 return as part of a scheme by such
individuals to 
22 avoid payment of Illinois income tax and the 
23 election shall not
eliminate the individual's 
24 liability for any portion of a deficiency

25 attributable to an error on the return of which the 
26 individual had actual
knowledge as of the date of 
 
 
09800SB0350sam002- 45 -LRB098 04642 HLH 58523 a


1 filing.


2    (iii) In determining the separate return 
3 amount or portion of any
deficiency attributable 
4 to an individual, the Department shall follow the

5 provisions in subsections (c) and (d) of Section 
6 6015 of the Internal Revenue Code.


7    (iv) In determining the validity of an 
8 individual's election under
subparagraph (ii) and 
9 in determining an electing individual's separate 
10 return
amount or portion of any deficiency under 
11 subparagraph (iii), any determination
made by the 
12 Secretary of the Treasury, by the United States Tax 
13 Court on
petition for review of a determination by 
14 the Secretary of the Treasury, or on
appeal from 
15 the United States Tax Court under Section 6015 of

16 the Internal
Revenue Code regarding criteria for 
17 eligibility or under subsection (d) of
Section 
18 6015
of the Internal Revenue Code regarding the 
19 allocation of any item of income,
deduction, 
20 payment, or credit between an individual making 
21 the federal election
and that individual's spouse 
22 shall be conclusively presumed to be correct.
With 
23 respect to any item that is not the subject of a 
24 determination by the
Secretary of the Treasury or 
25 the federal courts, in any proceeding
involving 
26 this subsection, the
individual making the 
 
 
09800SB0350sam002- 46 -LRB098 04642 HLH 58523 a


1 election shall have the burden of proof with 
2 respect to
any item except that the Department 
3 shall have the burden of proof with respect
to 
4 items in subdivision (ii).


5    (v) Any election made by an individual under 
6 this subsection shall
apply to all years for which 
7 that individual and the spouse named in the

8 election have filed a joint return.


9    (vi) After receiving a notice that the federal 
10 election has been made
or after receiving an 
11 election under subdivision (ii), the Department 
12 shall
take no collection action against the 
13 electing individual for any liability
arising from 
14 a joint return covered by the election until the 
15 Department has
notified the electing individual in 
16 writing that the election is invalid or of
the 
17 portion of the liability the Department has 
18 allocated to the electing
individual. Within 60 
19 days (150 days if the individual is outside the 
20 United
States) after the issuance of such 
21 notification, the individual may file a
written 
22 protest of the denial of the election or of the 
23 Department's
determination of the liability 
24 allocated to him or her and shall be granted a

25 hearing within the Department under the provisions 
26 of Section 908. If a
protest is filed, the 
 
 
09800SB0350sam002- 47 -LRB098 04642 HLH 58523 a


1 Department shall take no collection action against 
2 the
electing individual until the decision 
3 regarding the protest has become final
under 
4 subsection (d) of Section 908 or, if 
5 administrative review of the
Department's decision

6 is requested under Section 1201, until the 
7 decision of the court becomes
final.

8 (d) Partnerships. Every partnership having any base income

9allocable to this State in accordance with section 305(c) shall 
10retain
information concerning all items of income, gain, loss 
11and
deduction; the names and addresses of all of the partners, 
12or names and
addresses of members of a limited liability 
13company, or other
persons who would be entitled to share in the 
14base income of the
partnership if distributed; the amount of 
15the distributive share of
each; and such other pertinent 
16information as the Department may by
forms or regulations 
17prescribe. The partnership shall make that information

18available to the Department when requested by the Department.

19 (e) For taxable years ending on or after December 31, 1985, 
20and before
December 31, 1993, taxpayers
that are corporations 
21(other than Subchapter S corporations) having the
same taxable 
22year and that are members of the same unitary business group

23may elect to be treated as one taxpayer for purposes of any 
24original return,
amended return which includes the same 
25taxpayers of the unitary group which
joined in the election to 
26file the original return, extension, claim for
refund, 
 
 
09800SB0350sam002- 48 -LRB098 04642 HLH 58523 a


1assessment, collection and payment and determination of the

2group's tax liability under this Act. This subsection (e) does 
3not permit the
election to be made for some, but not all, of 
4the purposes enumerated above.
For taxable years ending on or 
5after December 31, 1987, corporate members
(other than 
6Subchapter S corporations) of the same unitary business group

7making this subsection (e) election are not required to have 
8the same taxable
year.

9 For taxable years ending on or after December 31, 1993, 
10taxpayers that are
corporations (other than Subchapter S 
11corporations) and that are members of
the same unitary business 
12group shall be treated as one taxpayer for purposes
of any 
13original return, amended return which includes the same 
14taxpayers of the
unitary group which joined in filing the 
15original return, extension, claim for
refund, assessment, 
16collection and payment and determination of the group's tax

17liability under this Act.

18 (f) For taxable years ending prior to December 31, 2014, 
19the Department may promulgate regulations to permit 
20nonresident
individual partners of the same partnership, 
21nonresident Subchapter S
corporation shareholders of the same 
22Subchapter S corporation, and
nonresident individuals 
23transacting an insurance business in Illinois under
a Lloyds 
24plan of operation, and nonresident individual members of the 
25same
limited liability company that is treated as a partnership 
26under Section 1501
(a)(16) of this Act, to file composite 
 
 
09800SB0350sam002- 49 -LRB098 04642 HLH 58523 a


1individual income tax returns
reflecting the composite income 
2of such individuals allocable to Illinois
and to make composite 
3individual income tax payments. For taxable years ending prior 
4to December 31, 2014, the Department may
by regulation also 
5permit such composite returns to include the income tax
owed by 
6Illinois residents attributable to their income from 
7partnerships,
Subchapter S corporations, insurance businesses 
8organized under a Lloyds
plan of operation, or limited 
9liability companies that are treated as
partnership under 
10Section 1501(a)(16) of this Act, in which case such
Illinois 
11residents will be permitted to claim credits on their 
12individual
returns for their shares of the composite tax 
13payments. This paragraph of
subsection (f) applies to taxable 
14years ending on or after December 31, 1987 and ending prior to 
15December 31, 2014.

16 For taxable years ending on or after December 31, 1999, the 
17Department may,
by regulation, permit any persons transacting 
18an insurance business
organized under a Lloyds plan of 
19operation to file composite returns reflecting
the income of 
20such persons allocable to Illinois and the tax rates applicable

21to such persons under Section 201 and to make composite tax 
22payments and shall,
by regulation, also provide that the income 
23and apportionment factors
attributable to the transaction of an 
24insurance business organized under a
Lloyds plan of operation 
25by any person joining in the filing of a composite
return 
26shall, for purposes of allocating and apportioning income under 
 
 
09800SB0350sam002- 50 -LRB098 04642 HLH 58523 a


1Article
3 of this Act and computing net income under Section 
2202 of this Act, be
excluded from any other income and 
3apportionment factors of that person or of
any unitary business 
4group, as defined in subdivision (a)(27) of Section 1501,
to 
5which that person may belong.

6 For taxable years ending on or after December 31, 2008, 
7every nonresident shall be allowed a credit against his or her 
8liability under subsections (a) and (b) of Section 201 for any 
9amount of tax reported on a composite return and paid on his or 
10her behalf under this subsection (f). Residents (other than 
11persons transacting an insurance business organized under a 
12Lloyds plan of operation) may claim a credit for taxes reported 
13on a composite return and paid on their behalf under this 
14subsection (f) only as permitted by the Department by rule.

15 (f-5) For taxable years ending on or after December 31, 
162008, the Department may adopt rules to provide that, when a 
17partnership or Subchapter S corporation has made an error in 
18determining the amount of any item of income, deduction, 
19addition, subtraction, or credit required to be reported on its 
20return that affects the liability imposed under this Act on a 
21partner or shareholder, the partnership or Subchapter S 
22corporation may report the changes in liabilities of its 
23partners or shareholders and claim a refund of the resulting 
24overpayments, or pay the resulting underpayments, on behalf of 
25its partners and shareholders.

26 (g) The Department may adopt rules to authorize the 
 
 
09800SB0350sam002- 51 -LRB098 04642 HLH 58523 a


1electronic filing of
any return required to be filed under this 
2Section.

3(Source: P.A. 97-507, eff. 8-23-11; 98-478, eff. 1-1-14.)


4 (35 ILCS 5/901) (from Ch. 120, par. 9-901)
5 Sec. 901. Collection Authority. 
6 (a) In general.
7 The Department shall collect the taxes imposed by this Act. 
8The Department
shall collect certified past due child support 
9amounts under Section 2505-650
of the Department of Revenue Law 
10(20 ILCS 2505/2505-650). Except as
provided in subsections (c), 
11(e), (f), and (g) of this Section, money collected
pursuant to 
12subsections (a) and (b) of Section 201 of this Act shall be

13paid into the General Revenue Fund in the State treasury; money

14collected pursuant to subsections (c) and (d) of Section 201 of 
15this Act
shall be paid into the Personal Property Tax 
16Replacement Fund, a special
fund in the State Treasury; and 
17money collected under Section 2505-650 of the
Department of 
18Revenue Law (20 ILCS 2505/2505-650) shall be paid
into the

19Child Support Enforcement Trust Fund, a special fund outside 
20the State
Treasury, or
to the State
Disbursement Unit 
21established under Section 10-26 of the Illinois Public Aid

22Code, as directed by the Department of Healthcare and Family 
23Services.
24 (b) Local Government Distributive Fund.
25 Beginning August 1, 1969, and continuing through June 30, 
 
 
09800SB0350sam002- 52 -LRB098 04642 HLH 58523 a


11994, the Treasurer
shall transfer each month from the General 
2Revenue Fund to a special fund in
the State treasury, to be 
3known as the "Local Government Distributive Fund", an
amount 
4equal to 1/12 of the net revenue realized from the tax imposed 
5by
subsections (a) and (b) of Section 201 of this Act during 
6the preceding month.
Beginning July 1, 1994, and continuing 
7through June 30, 1995, the Treasurer
shall transfer each month 
8from the General Revenue Fund to the Local Government

9Distributive Fund an amount equal to 1/11 of the net revenue 
10realized from the
tax imposed by subsections (a) and (b) of 
11Section 201 of this Act during the
preceding month. Beginning 
12July 1, 1995 and continuing through January 31, 2011, the 
13Treasurer shall transfer each
month from the General Revenue 
14Fund to the Local Government Distributive Fund
an amount equal 
15to the net of (i) 1/10 of the net revenue realized from the
tax 
16imposed by
subsections (a) and (b) of Section 201 of the 
17Illinois Income Tax Act during
the preceding month
(ii) minus, 
18beginning July 1, 2003 and ending June 30, 2004, $6,666,666, 
19and
beginning July 1,
2004,
zero. Beginning February 1, 2011, 
20and continuing through January 31, 2016, January 31, 2015, the 
21Treasurer shall transfer each month from the General Revenue 
22Fund to the Local Government Distributive Fund an amount equal 
23to the sum of (i) 6% (10% of the ratio of the 3% individual 
24income tax rate prior to 2011 to the 5% individual income tax 
25rate after 2010) of the net revenue realized from the tax 
26imposed by subsections (a) and (b) of Section 201 of this Act 
 
 
09800SB0350sam002- 53 -LRB098 04642 HLH 58523 a


1upon individuals, trusts, and estates during the preceding 
2month and (ii) 6.86% (10% of the ratio of the 4.8% corporate 
3income tax rate prior to 2011 to the 7% corporate income tax 
4rate after 2010) of the net revenue realized from the tax 
5imposed by subsections (a) and (b) of Section 201 of this Act 
6upon corporations during the preceding month. Beginning 
7February 1, 2016 February 1, 2015 and continuing through 
8January 31, 2025, the Treasurer shall transfer each month from 
9the General Revenue Fund to the Local Government Distributive 
10Fund an amount equal 1/12 of the net revenue realized from the 
11tax imposed by subsections (a) and (b) of Section 201 of the 
12Illinois Income Tax Act during the preceding month. to the sum 
13of (i) 8% (10% of the ratio of the 3% individual income tax 
14rate prior to 2011 to the 3.75% individual income tax rate 
15after 2014) of the net revenue realized from the tax imposed by 
16subsections (a) and (b) of Section 201 of this Act upon 
17individuals, trusts, and estates during the preceding month and 
18(ii) 9.14% (10% of the ratio of the 4.8% corporate income tax 
19rate prior to 2011 to the 5.25% corporate income tax rate after 
202014) of the net revenue realized from the tax imposed by 
21subsections (a) and (b) of Section 201 of this Act upon 
22corporations during the preceding month. Beginning February 1, 
232025, the Treasurer shall transfer each month from the General 
24Revenue Fund to the Local Government Distributive Fund an 
25amount equal to the sum of (i) 9.23% (10% of the ratio of the 3% 
26individual income tax rate prior to 2011 to the 3.25% 
 
 
09800SB0350sam002- 54 -LRB098 04642 HLH 58523 a


1individual income tax rate after 2024) of the net revenue 
2realized from the tax imposed by subsections (a) and (b) of 
3Section 201 of this Act upon individuals, trusts, and estates 
4during the preceding month and (ii) 10% of the net revenue 
5realized from the tax imposed by subsections (a) and (b) of 
6Section 201 of this Act upon corporations during the preceding 
7month. Net revenue realized for a month shall be defined as the

8revenue from the tax imposed by subsections (a) and (b) of 
9Section 201 of this
Act which is deposited in the General 
10Revenue Fund, the Education Assistance
Fund, the Income Tax 
11Surcharge Local Government Distributive Fund, the Fund for the 
12Advancement of Education, and the Commitment to Human Services 
13Fund during the
month minus the amount paid out of the General 
14Revenue Fund in State warrants
during that same month as 
15refunds to taxpayers for overpayment of liability
under the tax 
16imposed by subsections (a) and (b) of Section 201 of this Act.
17 (c) Deposits Into Income Tax Refund Fund.
18  (1) Beginning on January 1, 1989 and thereafter, the 
19 Department shall
deposit a percentage of the amounts 
20 collected pursuant to subsections (a),
and (b)(1), (2), and 
21 (3), (4), (5), and (5.1) of Section 201 of this Act into a 
22 fund in the State
treasury known as the Income Tax Refund 
23 Fund. The Department shall deposit 6%
of such amounts 
24 during the period beginning January 1, 1989 and ending on 
25 June
30, 1989. Beginning with State fiscal year 1990 and 
26 for each fiscal year
thereafter, the percentage deposited 
 
 
09800SB0350sam002- 55 -LRB098 04642 HLH 58523 a


1 into the Income Tax Refund Fund during a
fiscal year shall 
2 be the Annual Percentage. For fiscal years 1999 through

3 2001, the Annual Percentage shall be 7.1%.
For fiscal year 
4 2003, the Annual Percentage shall be 8%.
For fiscal year 
5 2004, the Annual Percentage shall be 11.7%. Upon the 
6 effective date of this amendatory Act of the 93rd General 
7 Assembly, the Annual Percentage shall be 10% for fiscal 
8 year 2005. For fiscal year 2006, the Annual Percentage 
9 shall be 9.75%. For fiscal
year 2007, the Annual Percentage 
10 shall be 9.75%. For fiscal year 2008, the Annual Percentage 
11 shall be 7.75%. For fiscal year 2009, the Annual Percentage 
12 shall be 9.75%. For fiscal year 2010, the Annual Percentage 
13 shall be 9.75%. For fiscal year 2011, the Annual Percentage 
14 shall be 8.75%. For fiscal year 2012, the Annual Percentage 
15 shall be 8.75%. For fiscal year 2013, the Annual Percentage 
16 shall be 9.75%. For fiscal year 2014, the Annual Percentage 
17 shall be 9.5%. For all other
fiscal years, the
Annual 
18 Percentage shall be calculated as a fraction, the numerator 
19 of which
shall be the amount of refunds approved for 
20 payment by the Department during
the preceding fiscal year 
21 as a result of overpayment of tax liability under

22 subsections (a), and (b)(1), (2), and (3), (4), (5), and 
23 (5.1) of Section 201 of this Act plus the
amount of such 
24 refunds remaining approved but unpaid at the end of the

25 preceding fiscal year, minus the amounts transferred into 
26 the Income Tax
Refund Fund from the Tobacco Settlement 
 
 
09800SB0350sam002- 56 -LRB098 04642 HLH 58523 a


1 Recovery Fund, and
the denominator of which shall be the 
2 amounts which will be collected pursuant
to subsections 
3 (a), and (b)(1), (2), and (3) , (4), (5), and (5.1) of 
4 Section 201 of this Act during
the preceding fiscal year; 
5 except that in State fiscal year 2002, the Annual

6 Percentage shall in no event exceed 7.6%. The Director of 
7 Revenue shall
certify the Annual Percentage to the 
8 Comptroller on the last business day of
the fiscal year 
9 immediately preceding the fiscal year for which it is to be

10 effective.
11  (2) Beginning on January 1, 1989 and thereafter, the 
12 Department shall
deposit a percentage of the amounts 
13 collected pursuant to subsections (a),
and (b)(6), (7), and 
14 (8), (9), (10), and (11), (c) and (d) of Section 201
of 
15 this Act into a fund in the State treasury known as the 
16 Income Tax
Refund Fund. The Department shall deposit 18% of 
17 such amounts during the
period beginning January 1, 1989 
18 and ending on June 30, 1989. Beginning
with State fiscal 
19 year 1990 and for each fiscal year thereafter, the

20 percentage deposited into the Income Tax Refund Fund during 
21 a fiscal year
shall be the Annual Percentage. For fiscal 
22 years 1999, 2000, and 2001, the
Annual Percentage shall be 
23 19%.
For fiscal year 2003, the Annual Percentage shall be 
24 27%. For fiscal year
2004, the Annual Percentage shall be 
25 32%.
Upon the effective date of this amendatory Act of the 
26 93rd General Assembly, the Annual Percentage shall be 24% 
 
 
09800SB0350sam002- 57 -LRB098 04642 HLH 58523 a


1 for fiscal year 2005.
For fiscal year 2006, the Annual 
2 Percentage shall be 20%. For fiscal
year 2007, the Annual 
3 Percentage shall be 17.5%. For fiscal year 2008, the Annual 
4 Percentage shall be 15.5%. For fiscal year 2009, the Annual 
5 Percentage shall be 17.5%. For fiscal year 2010, the Annual 
6 Percentage shall be 17.5%. For fiscal year 2011, the Annual 
7 Percentage shall be 17.5%. For fiscal year 2012, the Annual 
8 Percentage shall be 17.5%. For fiscal year 2013, the Annual 
9 Percentage shall be 14%. For fiscal year 2014, the Annual 
10 Percentage shall be 13.4%. For all other fiscal years, the 
11 Annual
Percentage shall be calculated
as a fraction, the 
12 numerator of which shall be the amount of refunds
approved 
13 for payment by the Department during the preceding fiscal 
14 year as
a result of overpayment of tax liability under 
15 subsections (a), and (b)(6),
(7), and (8), (9), (10), and 
16 (11), (c) and (d) of Section 201 of this Act plus the

17 amount of such refunds remaining approved but unpaid at the 
18 end of the
preceding fiscal year, and the denominator of

19 which shall be the amounts which will be collected pursuant 
20 to subsections (a),
and (b)(6), (7), and (8), (9), (10), 
21 and (11), (c) and (d) of Section 201 of this Act during the

22 preceding fiscal year; except that in State fiscal year 
23 2002, the Annual
Percentage shall in no event exceed 23%. 
24 The Director of Revenue shall
certify the Annual Percentage 
25 to the Comptroller on the last business day of
the fiscal 
26 year immediately preceding the fiscal year for which it is 
 
 
09800SB0350sam002- 58 -LRB098 04642 HLH 58523 a


1 to be
effective.
2  (3) The Comptroller shall order transferred and the 
3 Treasurer shall
transfer from the Tobacco Settlement 
4 Recovery Fund to the Income Tax Refund
Fund (i) $35,000,000 
5 in January, 2001, (ii) $35,000,000 in January, 2002, and

6 (iii) $35,000,000 in January, 2003.
7 (d) Expenditures from Income Tax Refund Fund.
8  (1) Beginning January 1, 1989, money in the Income Tax 
9 Refund Fund
shall be expended exclusively for the purpose 
10 of paying refunds resulting
from overpayment of tax 
11 liability under Section 201 of this Act, for paying
rebates 
12 under Section 208.1 in the event that the amounts in the 
13 Homeowners'
Tax Relief Fund are insufficient for that 
14 purpose,
and for
making transfers pursuant to this 
15 subsection (d).
16  (2) The Director shall order payment of refunds 
17 resulting from
overpayment of tax liability under Section 
18 201 of this Act from the
Income Tax Refund Fund only to the 
19 extent that amounts collected pursuant
to Section 201 of 
20 this Act and transfers pursuant to this subsection (d)
and 
21 item (3) of subsection (c) have been deposited and retained 
22 in the
Fund.
23  (3) As soon as possible after the end of each fiscal 
24 year, the Director
shall
order transferred and the State 
25 Treasurer and State Comptroller shall
transfer from the 
26 Income Tax Refund Fund to the Personal Property Tax

 
 
09800SB0350sam002- 59 -LRB098 04642 HLH 58523 a


1 Replacement Fund an amount, certified by the Director to 
2 the Comptroller,
equal to the excess of the amount 
3 collected pursuant to subsections (c) and
(d) of Section 
4 201 of this Act deposited into the Income Tax Refund Fund

5 during the fiscal year over the amount of refunds resulting 
6 from
overpayment of tax liability under subsections (c) and 
7 (d) of Section 201
of this Act paid from the Income Tax 
8 Refund Fund during the fiscal year.
9  (4) As soon as possible after the end of each fiscal 
10 year, the Director shall
order transferred and the State 
11 Treasurer and State Comptroller shall
transfer from the 
12 Personal Property Tax Replacement Fund to the Income Tax

13 Refund Fund an amount, certified by the Director to the 
14 Comptroller, equal
to the excess of the amount of refunds 
15 resulting from overpayment of tax
liability under 
16 subsections (c) and (d) of Section 201 of this Act paid

17 from the Income Tax Refund Fund during the fiscal year over 
18 the amount
collected pursuant to subsections (c) and (d) of 
19 Section 201 of this Act
deposited into the Income Tax 
20 Refund Fund during the fiscal year.
21  (4.5) As soon as possible after the end of fiscal year 
22 1999 and of each
fiscal year
thereafter, the Director shall 
23 order transferred and the State Treasurer and
State 
24 Comptroller shall transfer from the Income Tax Refund Fund 
25 to the General
Revenue Fund any surplus remaining in the 
26 Income Tax Refund Fund as of the end
of such fiscal year; 
 
 
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1 excluding for fiscal years 2000, 2001, and 2002
amounts 
2 attributable to transfers under item (3) of subsection (c) 
3 less refunds
resulting from the earned income tax credit.
4  (5) This Act shall constitute an irrevocable and 
5 continuing
appropriation from the Income Tax Refund Fund 
6 for the purpose of paying
refunds upon the order of the 
7 Director in accordance with the provisions of
this Section.
8 (e) Deposits into the Education Assistance Fund and the 
9Income Tax
Surcharge Local Government Distributive Fund.
10 On July 1, 1991, and thereafter, of the amounts collected 
11pursuant to
subsections (a) and (b) of Section 201 of this Act, 
12minus deposits into the
Income Tax Refund Fund, the Department 
13shall deposit 7.3% into the
Education Assistance Fund in the 
14State Treasury. Beginning July 1, 1991,
and continuing through 
15January 31, 1993, of the amounts collected pursuant to

16subsections (a) and (b) of Section 201 of the Illinois Income 
17Tax Act, minus
deposits into the Income Tax Refund Fund, the 
18Department shall deposit 3.0%
into the Income Tax Surcharge 
19Local Government Distributive Fund in the State
Treasury. 
20Beginning February 1, 1993 and continuing through June 30, 
211993, of
the amounts collected pursuant to subsections (a) and 
22(b) of Section 201 of the
Illinois Income Tax Act, minus 
23deposits into the Income Tax Refund Fund, the
Department shall 
24deposit 4.4% into the Income Tax Surcharge Local Government

25Distributive Fund in the State Treasury. Beginning July 1, 
261993, and
continuing through June 30, 1994, of the amounts 
 
 
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1collected under subsections
(a) and (b) of Section 201 of this 
2Act, minus deposits into the Income Tax
Refund Fund, the 
3Department shall deposit 1.475% into the Income Tax Surcharge

4Local Government Distributive Fund in the State Treasury.
5 (f) Deposits into the Fund for the Advancement of 
6Education. Beginning February 1, 2015, the Department shall 
7deposit the following portions of the revenue realized from the 
8tax imposed upon individuals, trusts, and estates by 
9subsections (a) and (b) of Section 201 of this Act during the 
10preceding month, minus deposits into the Income Tax Refund 
11Fund, into the Fund for the Advancement of Education: 
12  (1) beginning February 1, 2015, and prior to February 
13 1, 2025, 1/30; and 
14  (2) beginning February 1, 2025, 1/26. 
15 If the rate of tax imposed by subsection (a) and (b) of 
16Section 201 is reduced pursuant to Section 201.5 of this Act, 
17the Department shall not make the deposits required by this 
18subsection (f) on or after the effective date of the reduction. 
19 (g) Deposits into the Commitment to Human Services Fund. 
20Beginning February 1, 2015, the Department shall deposit the 
21following portions of the revenue realized from the tax imposed 
22upon individuals, trusts, and estates by subsections (a) and 
23(b) of Section 201 of this Act during the preceding month, 
24minus deposits into the Income Tax Refund Fund, into the 
25Commitment to Human Services Fund: 
26  (1) beginning February 1, 2015, and prior to February 
 
 
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1 1, 2025, 1/30; and 
2  (2) beginning February 1, 2025, 1/26. 
3 If the rate of tax imposed by subsection (a) and (b) of 
4Section 201 is reduced pursuant to Section 201.5 of this Act, 
5the Department shall not make the deposits required by this 
6subsection (g) on or after the effective date of the reduction. 
7(Source: P.A. 97-72, eff. 7-1-11; 97-732, eff. 6-30-12; 98-24, 
8eff. 6-19-13.)".