Bill Text: IL HB0310 | 2013-2014 | 98th General Assembly | Engrossed
Bill Title: Amends the Illinois Lottery Law. Makes a technical change in a Section concerning the short title.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2013-04-10 - Third Reading - Short Debate - Lost 013-092-003 [HB0310 Detail]
Download: Illinois-2013-HB0310-Engrossed.html
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1 | AN ACT concerning State government.
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2 | Be it enacted by the People of the State of Illinois, | ||||||
3 | represented in the General Assembly:
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4 | Section 1. Short title. This Act may be cited as the School | ||||||
5 | Choice Act.
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6 | Section 5. Findings and declaration of policy. The General | ||||||
7 | Assembly finds and declares the following: | ||||||
8 | (1) There is a crisis in the education programs in this | ||||||
9 | State. Many schools and their pupils are performing | ||||||
10 | significantly below relevant national standards and are | ||||||
11 | unable to access functions of federal and State law | ||||||
12 | designed to improve their performance. Consequently, many | ||||||
13 | pupils are dropping out of school before completing the | ||||||
14 | ordinary course of secondary education or are leaving | ||||||
15 | school without the basic skills and knowledge that will | ||||||
16 | enable them to find and hold a job or otherwise become | ||||||
17 | functioning, productive members of our society. | ||||||
18 | (2) Within this State there are many public and | ||||||
19 | nonpublic schools and independent education services | ||||||
20 | competently and efficiently educating or contributing to | ||||||
21 | the education of children. Most pupils in those schools or | ||||||
22 | receiving those services perform at or above relevant | ||||||
23 | national standards, complete their secondary education, |
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1 | and matriculate to institutions of higher education at an | ||||||
2 | extremely high rate. These services and schools should be | ||||||
3 | accessible to all and should enjoy a cooperative | ||||||
4 | relationship with public school districts, schools, and | ||||||
5 | employees of this State. | ||||||
6 | (3) Custodians of school age children in this State are | ||||||
7 | frequently unable to enroll their children in schools that | ||||||
8 | will provide them a quality education due to a lack of | ||||||
9 | funds. | ||||||
10 | (4) Adopting a pilot school choice program for a | ||||||
11 | limited number of students would enable parents to select | ||||||
12 | schools or services they believe will provide a quality | ||||||
13 | education for their children, empower them to influence the | ||||||
14 | educational policies and procedures in the schools their | ||||||
15 | children attend, and provide them with at least a portion | ||||||
16 | of the funds necessary to pay for a quality education. Such | ||||||
17 | a program would test a new approach to education that could | ||||||
18 | be expanded to the rest of the State. | ||||||
19 | (5) The provisions of this Act are in the public | ||||||
20 | interest, for the public benefit, and serve a secular | ||||||
21 | public purpose.
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22 | Section 10. Definitions. As used in this Act: | ||||||
23 | "Base year" means the 2013-2014 school year. | ||||||
24 | "Custodian" means, with respect to a qualifying pupil, a | ||||||
25 | parent or legal guardian who is a resident of a qualifying zip |
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1 | code. | ||||||
2 | "Final year" means the 2017-2018 school year. | ||||||
3 | "Nonpublic school" means any State-recognized, nonpublic | ||||||
4 | elementary school that elects to participate in the school | ||||||
5 | choice program established under this Act and does not | ||||||
6 | discriminate on the basis of race, color, or national origin | ||||||
7 | under Title VI of the Civil Rights Act of 1964 and attendance | ||||||
8 | at which satisfies the requirements of Section 26-1 of the | ||||||
9 | School Code, except that nothing in Section 26-1 shall be | ||||||
10 | construed to require a child to attend any particular nonpublic | ||||||
11 | school. | ||||||
12 | "Qualified education expenses" means costs reasonably | ||||||
13 | incurred on behalf of a qualifying pupil for the services of a | ||||||
14 | participating nonpublic school in which the qualifying pupil is | ||||||
15 | enrolled during the regular school year.
Qualified education | ||||||
16 | expenses does not include costs incurred for supplies or | ||||||
17 | extra-curricular activities. | ||||||
18 | "Qualifying pupil" means an individual who: | ||||||
19 | (1) is a resident of a qualifying zip code; | ||||||
20 | (2) is enrolled in kindergarten through grade 7 during | ||||||
21 | the 2013-2014 school year in a public school or has | ||||||
22 | received a School Choice Scholarship in the previous school | ||||||
23 | year; and | ||||||
24 | (3) during the school year for which a scholarship is | ||||||
25 | sought, will be a full-time pupil enrolled in a 1st grade | ||||||
26 | through 8th grade education program. |
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1 | "Qualifying zip code" means one of the 20 zip codes that | ||||||
2 | generated the greatest amount of State lottery sales the | ||||||
3 | previous year from the School Choice Scholarship scratch-off | ||||||
4 | game under Section 21.9 of the Illinois Lottery Law, as | ||||||
5 | certified by the Department of the Lottery. | ||||||
6 | "School Choice Scholarship" means a written instrument | ||||||
7 | issued by the State Board of Education directly to the | ||||||
8 | custodian of a qualifying pupil. The instrument shall be for a | ||||||
9 | sum certain, which must not exceed the foundation level of | ||||||
10 | support amount specified in subsection (B) of Section 18-8.05 | ||||||
11 | of the School Code, to be paid within a designated period of | ||||||
12 | time. The custodian may present the instrument only to a | ||||||
13 | participating nonpublic school as payment for qualified | ||||||
14 | education expenses incurred on behalf of the qualifying pupil.
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15 | Section 15. Establishment of program. There is established | ||||||
16 | the School Choice Program. Under the program, after the base | ||||||
17 | year and through the final year, a custodian of a qualifying | ||||||
18 | pupil shall be entitled to a School Choice Scholarship for | ||||||
19 | payment of qualified education expenses incurred on behalf of | ||||||
20 | the qualifying pupil at any participating nonpublic school in | ||||||
21 | which the qualifying pupil is enrolled. A qualifying pupil | ||||||
22 | shall be entitled to enroll at and attend any participating | ||||||
23 | nonpublic school of his or her choice.
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24 | Section 20. Notification of scholarships. The principal of |
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1 | each public school in a qualifying zip code, as reported by the | ||||||
2 | State Board of Education, shall notify custodians of qualifying | ||||||
3 | pupils that scholarships under this Act are available for the | ||||||
4 | next school year. Notification shall occur in January of each | ||||||
5 | school year beginning with the base year through the school | ||||||
6 | year before the final year. With respect to the custodians of | ||||||
7 | qualifying pupils who have an individualized educational | ||||||
8 | program under Article 14 of the School Code, this notification | ||||||
9 | shall include information regarding the special education | ||||||
10 | services, if any, provided at participating nonpublic schools.
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11 | Section 25. Request for scholarship. A custodian who | ||||||
12 | applies in accordance with procedures established by the State | ||||||
13 | Board of Education shall receive a scholarship under this Act | ||||||
14 | within the scholarship issuance limits set out in this Act. The | ||||||
15 | procedure shall require application for the scholarship, with | ||||||
16 | documentation as to eligibility, between March 1 and May 1 | ||||||
17 | prior to the school year in which the scholarship is to be | ||||||
18 | used.
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19 | Section 30. Issuance and payment of scholarship. A | ||||||
20 | scholarship may only be issued to a custodian who has made | ||||||
21 | proper application pursuant to Section 25 of this Act. The | ||||||
22 | State Board of Education shall determine the number of | ||||||
23 | scholarships that may be issued for a particular school year | ||||||
24 | based on the amount of money in the School Choice Fund to fund |
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1 | full scholarships that school year. The State Board shall adopt | ||||||
2 | rules for a lottery drawing if there are more applications than | ||||||
3 | the number of scholarships for a given school year. The | ||||||
4 | custodian shall present the scholarship to a participating | ||||||
5 | nonpublic school of his or her choice as payment for qualified | ||||||
6 | education expenses. Upon presentment, the State Board of | ||||||
7 | Education shall honor the scholarship and, as issuer of the | ||||||
8 | instrument, pay the participating nonpublic school in | ||||||
9 | accordance with procedures established by the State Board of | ||||||
10 | Education. The procedures shall require all of the following: | ||||||
11 | (1) that the applying custodian be notified of the | ||||||
12 | scholarship award by July 1 of the school year in which the | ||||||
13 | scholarship is to be used; | ||||||
14 | (2) that the scholarship instrument be issued to the | ||||||
15 | custodian no later than August 15 of the school year in | ||||||
16 | which the scholarship is to be used; | ||||||
17 | (3) that the custodian present the scholarship | ||||||
18 | instrument to the participating school no later than | ||||||
19 | September 1 of the school year in which the scholarship is | ||||||
20 | to be used; | ||||||
21 | (4) that the participating school present the | ||||||
22 | scholarship instrument, with proof of service to the | ||||||
23 | custodian of the qualifying pupil, to the State Board of | ||||||
24 | Education no later than September 31 of the school year in | ||||||
25 | which the scholarship is to be used; | ||||||
26 | (5) that the State Board of Education shall honor the |
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1 | scholarship instrument and as issuer pay the participating | ||||||
2 | school no later than November 31 of the school year in | ||||||
3 | which the scholarship is to be used; | ||||||
4 | (6) that participating schools must not be required to | ||||||
5 | accept scholarships as full payment for services but | ||||||
6 | neither shall they charge scholarship pupils tuition or any | ||||||
7 | other educational expenses at a higher rate than other | ||||||
8 | pupils; and | ||||||
9 | (7) that if a student attending a nonpublic school | ||||||
10 | under the School Choice Program is expelled from the | ||||||
11 | nonpublic school before the State Board of Education has | ||||||
12 | honored the scholarship of the school, then the State Board | ||||||
13 | of Education shall pay the corresponding prorated portion | ||||||
14 | of the scholarship amount to the nonpublic school; and that | ||||||
15 | if the State Board of Education has paid the scholarship | ||||||
16 | amount to the nonpublic school and the pupil is expelled, | ||||||
17 | then the nonpublic school shall refund the corresponding | ||||||
18 | prorated portion of the scholarship to the State Board of | ||||||
19 | Education. | ||||||
20 | No scholarships shall be issued for a school year after the | ||||||
21 | final year.
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22 | Section 35. Amount of scholarship. A School Choice | ||||||
23 | Scholarship for qualified education expenses incurred through | ||||||
24 | participating schools during any school year after the base | ||||||
25 | year shall be for the lesser of (i) the foundation level of |
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1 | support amount specified in subsection (B) of Section 18-8.05 | ||||||
2 | of the School Code or (ii) the actual qualified education | ||||||
3 | expenses related to the qualifying pupil's enrollment.
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4 | Section 40. Renewal of scholarship. School Choice | ||||||
5 | Scholarships shall be renewable every year through grade 8 so | ||||||
6 | long as the qualifying pupil and custodian continue to remain | ||||||
7 | eligible pursuant to Section 10 of this Act.
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8 | Section 50. Funding. Funding for the School Choice Program | ||||||
9 | shall come from appropriations made to the State Board of | ||||||
10 | Education from the School Choice Fund.
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11 | Section 55. Not base income. The amount of any scholarship | ||||||
12 | redeemed under this Act shall not be considered base income | ||||||
13 | under subsection (a) of Section 203 of the Illinois Income Tax | ||||||
14 | Act and shall not be taxable for Illinois income tax purposes.
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15 | Section 60. Report and expansion. On or before December 31, | ||||||
16 | 2016, the State Board of Education shall submit a report to the | ||||||
17 | General Assembly reviewing the program operating under this | ||||||
18 | Act. This report shall include, but not be limited to, the | ||||||
19 | number of qualifying pupils receiving a School Choice | ||||||
20 | Scholarship, the names of the schools from which and to which | ||||||
21 | pupils transferred, the financial ramifications of the | ||||||
22 | program, and the results of pupil assessments. In its report, |
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1 | the State Board of Education shall assess whether the program | ||||||
2 | has been financially and academically beneficial and shall make | ||||||
3 | a recommendation on whether the program should be extended or | ||||||
4 | expanded to other areas of this State.
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5 | Section 65. Penalties. It shall be a Class 3 felony to use | ||||||
6 | or attempt to use a scholarship under this Act for any purpose | ||||||
7 | other than those permitted by this Act. It shall also be a | ||||||
8 | Class 3 felony for any person, with intent to defraud, to | ||||||
9 | knowingly forge, alter, or misrepresent information on a | ||||||
10 | scholarship application or on any documents submitted in | ||||||
11 | application for a scholarship, to deliver any such document | ||||||
12 | knowing it to have been thus forged, altered, or based on | ||||||
13 | misrepresentation, or to possess, with intent to issue or | ||||||
14 | deliver, any such document knowing it to have been thus forged, | ||||||
15 | altered, or based on misrepresentation.
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16 | Section 70. Rules. The State Board of Education shall adopt | ||||||
17 | rules to implement this Act. The creation of the School Choice | ||||||
18 | Program does not expand the regulatory authority of this State, | ||||||
19 | its officers, or any school district to impose any additional | ||||||
20 | regulation of nonpublic schools beyond those reasonably | ||||||
21 | necessary to enforce the requirements of the program.
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22 | Section 500. Expiration. This Act is repealed on January 1, | ||||||
23 | 2017.
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1 | Section 895. The Illinois Lottery Law is amended by | ||||||
2 | changing Sections 2 and 20 and by adding Sections 7.4a and 21.9 | ||||||
3 | as follows:
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4 | (20 ILCS 1605/2) (from Ch. 120, par. 1152)
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5 | Sec. 2. This Act is enacted to implement and establish | ||||||
6 | within the State
a lottery to be conducted by the State through | ||||||
7 | the Department. The entire net proceeds of the Lottery
are to | ||||||
8 | be used for the support of the State's Common School Fund,
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9 | except as provided in subsection (o) of Section 9.1 and | ||||||
10 | Sections 21.2, 21.5, 21.6, 21.7, and 21.8 , and 21.9 . The | ||||||
11 | General Assembly finds that it is in the public interest for | ||||||
12 | the Department to conduct the functions of the Lottery with the | ||||||
13 | assistance of a private manager under a management agreement | ||||||
14 | overseen by the Department. The Department shall be accountable | ||||||
15 | to the General Assembly and the people of the State through a | ||||||
16 | comprehensive system of regulation, audits, reports, and | ||||||
17 | enduring operational oversight. The Department's ongoing | ||||||
18 | conduct of the Lottery through a management agreement with a | ||||||
19 | private manager shall act to promote and ensure the integrity, | ||||||
20 | security, honesty, and fairness of the Lottery's operation and | ||||||
21 | administration. It is the intent of the General Assembly that | ||||||
22 | the Department shall conduct the Lottery with the assistance of | ||||||
23 | a private manager under a management agreement at all times in | ||||||
24 | a manner consistent with 18 U.S.C. 1307(a)(1), 1307(b)(1), |
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1 | 1953(b)(4).
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2 | (Source: P.A. 95-331, eff. 8-21-07; 95-673, eff. 10-11-07; | ||||||
3 | 95-674, eff. 10-11-07; 95-876, eff. 8-21-08; 96-34, eff. | ||||||
4 | 7-13-09.)
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5 | (20 ILCS 1605/7.4a new) | ||||||
6 | Sec. 7.4a. Certification under School Choice Act. Before | ||||||
7 | December 15 of each year, the Department shall certify to the | ||||||
8 | State Board of Education the 20 zip codes that generated the | ||||||
9 | greatest amount of State lottery sales the previous year from | ||||||
10 | the School Choice Scholarship scratch-off game under Section | ||||||
11 | 21.9 of this Law for the purposes of the School Choice Act.
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12 | (20 ILCS 1605/20) (from Ch. 120, par. 1170)
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13 | Sec. 20. State Lottery Fund.
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14 | (a) There is created in the State Treasury a special fund | ||||||
15 | to be
known as the "State Lottery Fund". Such fund shall | ||||||
16 | consist of all revenues
received from (1) the sale of lottery | ||||||
17 | tickets or shares, (net of
commissions, fees
representing those | ||||||
18 | expenses that are directly proportionate to the
sale of tickets | ||||||
19 | or shares at the agent location, and prizes of less
than
$600 | ||||||
20 | which
have been validly paid at the agent
level), (2) | ||||||
21 | application fees,
and (3) all other sources including moneys | ||||||
22 | credited or transferred thereto
from
any other fund
or source | ||||||
23 | pursuant to law. Interest earnings of the State Lottery Fund
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24 | shall be credited to the Common School Fund.
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1 | (b) The receipt and distribution of moneys under Section | ||||||
2 | 21.5 of this Act shall be in accordance with Section 21.5.
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3 | (c) The receipt and distribution of moneys under Section | ||||||
4 | 21.6 of this Act shall be in accordance with Section 21.6. | ||||||
5 | (d) The receipt and distribution of moneys under Section | ||||||
6 | 21.7 of this Act shall be in accordance with Section 21.7.
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7 | (e)
The receipt and distribution of moneys under Section | ||||||
8 | 21.8
of this Act shall be in accordance with Section 21.8.
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9 | (f) The receipt and distribution of moneys under Section | ||||||
10 | 21.9 of this Act shall be in accordance with Section 21.9. | ||||||
11 | (Source: P.A. 94-120, eff. 7-6-05; 94-585, eff. 8-15-05; | ||||||
12 | 95-331, eff. 8-21-07; 95-673, eff. 10-11-07; 95-674, eff. | ||||||
13 | 10-11-07; 95-876, eff. 8-21-08.)
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14 | (20 ILCS 1605/21.9 new) | ||||||
15 | Sec. 21.9. Scratch-off for School Choice Scholarships. | ||||||
16 | (a) The Department shall offer a special instant | ||||||
17 | scratch-off game for the funding of School Choice Scholarships | ||||||
18 | under the School Choice Act. The game shall commence as soon as | ||||||
19 | is reasonably practical, at the discretion of the | ||||||
20 | Superintendent. The operation of the game shall be governed by | ||||||
21 | this Act and any rules adopted by the Department. If any | ||||||
22 | provision of this Section is inconsistent with any other | ||||||
23 | provision of this Act, then this Section governs. | ||||||
24 | (b) For purposes of this subsection (b), "net revenue" | ||||||
25 | means the total amount for which tickets have been sold less |
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1 | the sum of the amount paid out in prizes and the actual | ||||||
2 | administrative expenses of the Department solely related to the | ||||||
3 | scratch-off game under this Section. | ||||||
4 | The School Choice Fund is created as a special fund in the | ||||||
5 | State treasury. The net revenue from the School Choice | ||||||
6 | Scholarship scratch-off game must be deposited into the Fund | ||||||
7 | for appropriation by the General Assembly solely to the State | ||||||
8 | Board of Education for the issuance of School Choice | ||||||
9 | Scholarships under the School Choice Act. | ||||||
10 | Moneys received for the purposes of this Section, | ||||||
11 | including, without limitation, net revenue from the | ||||||
12 | scratch-off game and from gifts, grants, and awards from any | ||||||
13 | public or private entity, must be deposited into the Fund. Any | ||||||
14 | interest earned on moneys in the Fund must be deposited into | ||||||
15 | the Fund. | ||||||
16 | (c) During the time that tickets are sold for the School | ||||||
17 | Choice Scholarship scratch-off game, the Department may not | ||||||
18 | unreasonably diminish the efforts devoted to marketing any | ||||||
19 | other instant scratch-off lottery game. | ||||||
20 | (d) The Department may adopt any rules necessary to | ||||||
21 | implement and administer the provisions of this Section.
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22 | Section 897. The State Finance Act is amended by adding | ||||||
23 | Section 5.826 as follows:
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24 | (30 ILCS 105/5.826 new) |
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1 | Sec. 5.826. The School Choice Fund.
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2 | Section 900. The Illinois Income Tax Act is amended by | ||||||
3 | changing Section 203 as follows:
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4 | (35 ILCS 5/203) (from Ch. 120, par. 2-203) | ||||||
5 | Sec. 203. Base income defined. | ||||||
6 | (a) Individuals. | ||||||
7 | (1) In general. In the case of an individual, base | ||||||
8 | income means an
amount equal to the taxpayer's adjusted | ||||||
9 | gross income for the taxable
year as modified by paragraph | ||||||
10 | (2). | ||||||
11 | (2) Modifications. The adjusted gross income referred | ||||||
12 | to in
paragraph (1) shall be modified by adding thereto the | ||||||
13 | sum of the
following amounts: | ||||||
14 | (A) An amount equal to all amounts paid or accrued | ||||||
15 | to the taxpayer
as interest or dividends during the | ||||||
16 | taxable year to the extent excluded
from gross income | ||||||
17 | in the computation of adjusted gross income, except | ||||||
18 | stock
dividends of qualified public utilities | ||||||
19 | described in Section 305(e) of the
Internal Revenue | ||||||
20 | Code; | ||||||
21 | (B) An amount equal to the amount of tax imposed by | ||||||
22 | this Act to the
extent deducted from gross income in | ||||||
23 | the computation of adjusted gross
income for the | ||||||
24 | taxable year; |
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1 | (C) An amount equal to the amount received during | ||||||
2 | the taxable year
as a recovery or refund of real | ||||||
3 | property taxes paid with respect to the
taxpayer's | ||||||
4 | principal residence under the Revenue Act of
1939 and | ||||||
5 | for which a deduction was previously taken under | ||||||
6 | subparagraph (L) of
this paragraph (2) prior to July 1, | ||||||
7 | 1991, the retrospective application date of
Article 4 | ||||||
8 | of Public Act 87-17. In the case of multi-unit or | ||||||
9 | multi-use
structures and farm dwellings, the taxes on | ||||||
10 | the taxpayer's principal residence
shall be that | ||||||
11 | portion of the total taxes for the entire property | ||||||
12 | which is
attributable to such principal residence; | ||||||
13 | (D) An amount equal to the amount of the capital | ||||||
14 | gain deduction
allowable under the Internal Revenue | ||||||
15 | Code, to the extent deducted from gross
income in the | ||||||
16 | computation of adjusted gross income; | ||||||
17 | (D-5) An amount, to the extent not included in | ||||||
18 | adjusted gross income,
equal to the amount of money | ||||||
19 | withdrawn by the taxpayer in the taxable year from
a | ||||||
20 | medical care savings account and the interest earned on | ||||||
21 | the account in the
taxable year of a withdrawal | ||||||
22 | pursuant to subsection (b) of Section 20 of the
Medical | ||||||
23 | Care Savings Account Act or subsection (b) of Section | ||||||
24 | 20 of the
Medical Care Savings Account Act of 2000; | ||||||
25 | (D-10) For taxable years ending after December 31, | ||||||
26 | 1997, an
amount equal to any eligible remediation costs |
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1 | that the individual
deducted in computing adjusted | ||||||
2 | gross income and for which the
individual claims a | ||||||
3 | credit under subsection (l) of Section 201; | ||||||
4 | (D-15) For taxable years 2001 and thereafter, an | ||||||
5 | amount equal to the
bonus depreciation deduction taken | ||||||
6 | on the taxpayer's federal income tax return for the | ||||||
7 | taxable
year under subsection (k) of Section 168 of the | ||||||
8 | Internal Revenue Code; | ||||||
9 | (D-16) If the taxpayer sells, transfers, abandons, | ||||||
10 | or otherwise disposes of property for which the | ||||||
11 | taxpayer was required in any taxable year to
make an | ||||||
12 | addition modification under subparagraph (D-15), then | ||||||
13 | an amount equal
to the aggregate amount of the | ||||||
14 | deductions taken in all taxable
years under | ||||||
15 | subparagraph (Z) with respect to that property. | ||||||
16 | If the taxpayer continues to own property through | ||||||
17 | the last day of the last tax year for which the | ||||||
18 | taxpayer may claim a depreciation deduction for | ||||||
19 | federal income tax purposes and for which the taxpayer | ||||||
20 | was allowed in any taxable year to make a subtraction | ||||||
21 | modification under subparagraph (Z), then an amount | ||||||
22 | equal to that subtraction modification.
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23 | The taxpayer is required to make the addition | ||||||
24 | modification under this
subparagraph
only once with | ||||||
25 | respect to any one piece of property; | ||||||
26 | (D-17) An amount equal to the amount otherwise |
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1 | allowed as a deduction in computing base income for | ||||||
2 | interest paid, accrued, or incurred, directly or | ||||||
3 | indirectly, (i) for taxable years ending on or after | ||||||
4 | December 31, 2004, to a foreign person who would be a | ||||||
5 | member of the same unitary business group but for the | ||||||
6 | fact that foreign person's business activity outside | ||||||
7 | the United States is 80% or more of the foreign | ||||||
8 | person's total business activity and (ii) for taxable | ||||||
9 | years ending on or after December 31, 2008, to a person | ||||||
10 | who would be a member of the same unitary business | ||||||
11 | group but for the fact that the person is prohibited | ||||||
12 | under Section 1501(a)(27) from being included in the | ||||||
13 | unitary business group because he or she is ordinarily | ||||||
14 | required to apportion business income under different | ||||||
15 | subsections of Section 304. The addition modification | ||||||
16 | required by this subparagraph shall be reduced to the | ||||||
17 | extent that dividends were included in base income of | ||||||
18 | the unitary group for the same taxable year and | ||||||
19 | received by the taxpayer or by a member of the | ||||||
20 | taxpayer's unitary business group (including amounts | ||||||
21 | included in gross income under Sections 951 through 964 | ||||||
22 | of the Internal Revenue Code and amounts included in | ||||||
23 | gross income under Section 78 of the Internal Revenue | ||||||
24 | Code) with respect to the stock of the same person to | ||||||
25 | whom the interest was paid, accrued, or incurred. | ||||||
26 | This paragraph shall not apply to the following:
|
| |||||||
| |||||||
1 | (i) an item of interest paid, accrued, or | ||||||
2 | incurred, directly or indirectly, to a person who | ||||||
3 | is subject in a foreign country or state, other | ||||||
4 | than a state which requires mandatory unitary | ||||||
5 | reporting, to a tax on or measured by net income | ||||||
6 | with respect to such interest; or | ||||||
7 | (ii) an item of interest paid, accrued, or | ||||||
8 | incurred, directly or indirectly, to a person if | ||||||
9 | the taxpayer can establish, based on a | ||||||
10 | preponderance of the evidence, both of the | ||||||
11 | following: | ||||||
12 | (a) the person, during the same taxable | ||||||
13 | year, paid, accrued, or incurred, the interest | ||||||
14 | to a person that is not a related member, and | ||||||
15 | (b) the transaction giving rise to the | ||||||
16 | interest expense between the taxpayer and the | ||||||
17 | person did not have as a principal purpose the | ||||||
18 | avoidance of Illinois income tax, and is paid | ||||||
19 | pursuant to a contract or agreement that | ||||||
20 | reflects an arm's-length interest rate and | ||||||
21 | terms; or
| ||||||
22 | (iii) the taxpayer can establish, based on | ||||||
23 | clear and convincing evidence, that the interest | ||||||
24 | paid, accrued, or incurred relates to a contract or | ||||||
25 | agreement entered into at arm's-length rates and | ||||||
26 | terms and the principal purpose for the payment is |
| |||||||
| |||||||
1 | not federal or Illinois tax avoidance; or
| ||||||
2 | (iv) an item of interest paid, accrued, or | ||||||
3 | incurred, directly or indirectly, to a person if | ||||||
4 | the taxpayer establishes by clear and convincing | ||||||
5 | evidence that the adjustments are unreasonable; or | ||||||
6 | if the taxpayer and the Director agree in writing | ||||||
7 | to the application or use of an alternative method | ||||||
8 | of apportionment under Section 304(f).
| ||||||
9 | Nothing in this subsection shall preclude the | ||||||
10 | Director from making any other adjustment | ||||||
11 | otherwise allowed under Section 404 of this Act for | ||||||
12 | any tax year beginning after the effective date of | ||||||
13 | this amendment provided such adjustment is made | ||||||
14 | pursuant to regulation adopted by the Department | ||||||
15 | and such regulations provide methods and standards | ||||||
16 | by which the Department will utilize its authority | ||||||
17 | under Section 404 of this Act;
| ||||||
18 | (D-18) An amount equal to the amount of intangible | ||||||
19 | expenses and costs otherwise allowed as a deduction in | ||||||
20 | computing base income, and that were paid, accrued, or | ||||||
21 | incurred, directly or indirectly, (i) for taxable | ||||||
22 | years ending on or after December 31, 2004, to a | ||||||
23 | foreign person who would be a member of the same | ||||||
24 | unitary business group but for the fact that the | ||||||
25 | foreign person's business activity outside the United | ||||||
26 | States is 80% or more of that person's total business |
| |||||||
| |||||||
1 | activity and (ii) for taxable years ending on or after | ||||||
2 | December 31, 2008, to a person who would be a member of | ||||||
3 | the same unitary business group but for the fact that | ||||||
4 | the person is prohibited under Section 1501(a)(27) | ||||||
5 | from being included in the unitary business group | ||||||
6 | because he or she is ordinarily required to apportion | ||||||
7 | business income under different subsections of Section | ||||||
8 | 304. The addition modification required by this | ||||||
9 | subparagraph shall be reduced to the extent that | ||||||
10 | dividends were included in base income of the unitary | ||||||
11 | group for the same taxable year and received by the | ||||||
12 | taxpayer or by a member of the taxpayer's unitary | ||||||
13 | business group (including amounts included in gross | ||||||
14 | income under Sections 951 through 964 of the Internal | ||||||
15 | Revenue Code and amounts included in gross income under | ||||||
16 | Section 78 of the Internal Revenue Code) with respect | ||||||
17 | to the stock of the same person to whom the intangible | ||||||
18 | expenses and costs were directly or indirectly paid, | ||||||
19 | incurred, or accrued. The preceding sentence does not | ||||||
20 | apply to the extent that the same dividends caused a | ||||||
21 | reduction to the addition modification required under | ||||||
22 | Section 203(a)(2)(D-17) of this Act. As used in this | ||||||
23 | subparagraph, the term "intangible expenses and costs" | ||||||
24 | includes (1) expenses, losses, and costs for, or | ||||||
25 | related to, the direct or indirect acquisition, use, | ||||||
26 | maintenance or management, ownership, sale, exchange, |
| |||||||
| |||||||
1 | or any other disposition of intangible property; (2) | ||||||
2 | losses incurred, directly or indirectly, from | ||||||
3 | factoring transactions or discounting transactions; | ||||||
4 | (3) royalty, patent, technical, and copyright fees; | ||||||
5 | (4) licensing fees; and (5) other similar expenses and | ||||||
6 | costs.
For purposes of this subparagraph, "intangible | ||||||
7 | property" includes patents, patent applications, trade | ||||||
8 | names, trademarks, service marks, copyrights, mask | ||||||
9 | works, trade secrets, and similar types of intangible | ||||||
10 | assets. | ||||||
11 | This paragraph shall not apply to the following: | ||||||
12 | (i) any item of intangible expenses or costs | ||||||
13 | paid, accrued, or incurred, directly or | ||||||
14 | indirectly, from a transaction with a person who is | ||||||
15 | subject in a foreign country or state, other than a | ||||||
16 | state which requires mandatory unitary reporting, | ||||||
17 | to a tax on or measured by net income with respect | ||||||
18 | to such item; or | ||||||
19 | (ii) any item of intangible expense or cost | ||||||
20 | paid, accrued, or incurred, directly or | ||||||
21 | indirectly, if the taxpayer can establish, based | ||||||
22 | on a preponderance of the evidence, both of the | ||||||
23 | following: | ||||||
24 | (a) the person during the same taxable | ||||||
25 | year paid, accrued, or incurred, the | ||||||
26 | intangible expense or cost to a person that is |
| |||||||
| |||||||
1 | not a related member, and | ||||||
2 | (b) the transaction giving rise to the | ||||||
3 | intangible expense or cost between the | ||||||
4 | taxpayer and the person did not have as a | ||||||
5 | principal purpose the avoidance of Illinois | ||||||
6 | income tax, and is paid pursuant to a contract | ||||||
7 | or agreement that reflects arm's-length terms; | ||||||
8 | or | ||||||
9 | (iii) any item of intangible expense or cost | ||||||
10 | paid, accrued, or incurred, directly or | ||||||
11 | indirectly, from a transaction with a person if the | ||||||
12 | taxpayer establishes by clear and convincing | ||||||
13 | evidence, that the adjustments are unreasonable; | ||||||
14 | or if the taxpayer and the Director agree in | ||||||
15 | writing to the application or use of an alternative | ||||||
16 | method of apportionment under Section 304(f);
| ||||||
17 | Nothing in this subsection shall preclude the | ||||||
18 | Director from making any other adjustment | ||||||
19 | otherwise allowed under Section 404 of this Act for | ||||||
20 | any tax year beginning after the effective date of | ||||||
21 | this amendment provided such adjustment is made | ||||||
22 | pursuant to regulation adopted by the Department | ||||||
23 | and such regulations provide methods and standards | ||||||
24 | by which the Department will utilize its authority | ||||||
25 | under Section 404 of this Act;
| ||||||
26 | (D-19) For taxable years ending on or after |
| |||||||
| |||||||
1 | December 31, 2008, an amount equal to the amount of | ||||||
2 | insurance premium expenses and costs otherwise allowed | ||||||
3 | as a deduction in computing base income, and that were | ||||||
4 | paid, accrued, or incurred, directly or indirectly, to | ||||||
5 | a person who would be a member of the same unitary | ||||||
6 | business group but for the fact that the person is | ||||||
7 | prohibited under Section 1501(a)(27) from being | ||||||
8 | included in the unitary business group because he or | ||||||
9 | she is ordinarily required to apportion business | ||||||
10 | income under different subsections of Section 304. The | ||||||
11 | addition modification required by this subparagraph | ||||||
12 | shall be reduced to the extent that dividends were | ||||||
13 | included in base income of the unitary group for the | ||||||
14 | same taxable year and received by the taxpayer or by a | ||||||
15 | member of the taxpayer's unitary business group | ||||||
16 | (including amounts included in gross income under | ||||||
17 | Sections 951 through 964 of the Internal Revenue Code | ||||||
18 | and amounts included in gross income under Section 78 | ||||||
19 | of the Internal Revenue Code) with respect to the stock | ||||||
20 | of the same person to whom the premiums and costs were | ||||||
21 | directly or indirectly paid, incurred, or accrued. The | ||||||
22 | preceding sentence does not apply to the extent that | ||||||
23 | the same dividends caused a reduction to the addition | ||||||
24 | modification required under Section 203(a)(2)(D-17) or | ||||||
25 | Section 203(a)(2)(D-18) of this Act.
| ||||||
26 | (D-20) For taxable years beginning on or after |
| |||||||
| |||||||
1 | January 1,
2002 and ending on or before December 31, | ||||||
2 | 2006, in
the
case of a distribution from a qualified | ||||||
3 | tuition program under Section 529 of
the Internal | ||||||
4 | Revenue Code, other than (i) a distribution from a | ||||||
5 | College Savings
Pool created under Section 16.5 of the | ||||||
6 | State Treasurer Act or (ii) a
distribution from the | ||||||
7 | Illinois Prepaid Tuition Trust Fund, an amount equal to
| ||||||
8 | the amount excluded from gross income under Section | ||||||
9 | 529(c)(3)(B). For taxable years beginning on or after | ||||||
10 | January 1, 2007, in the case of a distribution from a | ||||||
11 | qualified tuition program under Section 529 of the | ||||||
12 | Internal Revenue Code, other than (i) a distribution | ||||||
13 | from a College Savings Pool created under Section 16.5 | ||||||
14 | of the State Treasurer Act, (ii) a distribution from | ||||||
15 | the Illinois Prepaid Tuition Trust Fund, or (iii) a | ||||||
16 | distribution from a qualified tuition program under | ||||||
17 | Section 529 of the Internal Revenue Code that (I) | ||||||
18 | adopts and determines that its offering materials | ||||||
19 | comply with the College Savings Plans Network's | ||||||
20 | disclosure principles and (II) has made reasonable | ||||||
21 | efforts to inform in-state residents of the existence | ||||||
22 | of in-state qualified tuition programs by informing | ||||||
23 | Illinois residents directly and, where applicable, to | ||||||
24 | inform financial intermediaries distributing the | ||||||
25 | program to inform in-state residents of the existence | ||||||
26 | of in-state qualified tuition programs at least |
| |||||||
| |||||||
1 | annually, an amount equal to the amount excluded from | ||||||
2 | gross income under Section 529(c)(3)(B). | ||||||
3 | For the purposes of this subparagraph (D-20), a | ||||||
4 | qualified tuition program has made reasonable efforts | ||||||
5 | if it makes disclosures (which may use the term | ||||||
6 | "in-state program" or "in-state plan" and need not | ||||||
7 | specifically refer to Illinois or its qualified | ||||||
8 | programs by name) (i) directly to prospective | ||||||
9 | participants in its offering materials or makes a | ||||||
10 | public disclosure, such as a website posting; and (ii) | ||||||
11 | where applicable, to intermediaries selling the | ||||||
12 | out-of-state program in the same manner that the | ||||||
13 | out-of-state program distributes its offering | ||||||
14 | materials; | ||||||
15 | (D-21) For taxable years beginning on or after | ||||||
16 | January 1, 2007, in the case of transfer of moneys from | ||||||
17 | a qualified tuition program under Section 529 of the | ||||||
18 | Internal Revenue Code that is administered by the State | ||||||
19 | to an out-of-state program, an amount equal to the | ||||||
20 | amount of moneys previously deducted from base income | ||||||
21 | under subsection (a)(2)(Y) of this Section; | ||||||
22 | (D-22) For taxable years beginning on or after | ||||||
23 | January 1, 2009, in the case of a nonqualified | ||||||
24 | withdrawal or refund of moneys from a qualified tuition | ||||||
25 | program under Section 529 of the Internal Revenue Code | ||||||
26 | administered by the State that is not used for |
| |||||||
| |||||||
1 | qualified expenses at an eligible education | ||||||
2 | institution, an amount equal to the contribution | ||||||
3 | component of the nonqualified withdrawal or refund | ||||||
4 | that was previously deducted from base income under | ||||||
5 | subsection (a)(2)(y) of this Section, provided that | ||||||
6 | the withdrawal or refund did not result from the | ||||||
7 | beneficiary's death or disability; | ||||||
8 | (D-23) An amount equal to the credit allowable to | ||||||
9 | the taxpayer under Section 218(a) of this Act, | ||||||
10 | determined without regard to Section 218(c) of this | ||||||
11 | Act; | ||||||
12 | and by deducting from the total so obtained the
sum of the | ||||||
13 | following amounts: | ||||||
14 | (E) For taxable years ending before December 31, | ||||||
15 | 2001,
any amount included in such total in respect of | ||||||
16 | any compensation
(including but not limited to any | ||||||
17 | compensation paid or accrued to a
serviceman while a | ||||||
18 | prisoner of war or missing in action) paid to a | ||||||
19 | resident
by reason of being on active duty in the Armed | ||||||
20 | Forces of the United States
and in respect of any | ||||||
21 | compensation paid or accrued to a resident who as a
| ||||||
22 | governmental employee was a prisoner of war or missing | ||||||
23 | in action, and in
respect of any compensation paid to a | ||||||
24 | resident in 1971 or thereafter for
annual training | ||||||
25 | performed pursuant to Sections 502 and 503, Title 32,
| ||||||
26 | United States Code as a member of the Illinois National |
| |||||||
| |||||||
1 | Guard or, beginning with taxable years ending on or | ||||||
2 | after December 31, 2007, the National Guard of any | ||||||
3 | other state.
For taxable years ending on or after | ||||||
4 | December 31, 2001, any amount included in
such total in | ||||||
5 | respect of any compensation (including but not limited | ||||||
6 | to any
compensation paid or accrued to a serviceman | ||||||
7 | while a prisoner of war or missing
in action) paid to a | ||||||
8 | resident by reason of being a member of any component | ||||||
9 | of
the Armed Forces of the United States and in respect | ||||||
10 | of any compensation paid
or accrued to a resident who | ||||||
11 | as a governmental employee was a prisoner of war
or | ||||||
12 | missing in action, and in respect of any compensation | ||||||
13 | paid to a resident in
2001 or thereafter by reason of | ||||||
14 | being a member of the Illinois National Guard or, | ||||||
15 | beginning with taxable years ending on or after | ||||||
16 | December 31, 2007, the National Guard of any other | ||||||
17 | state.
The provisions of this subparagraph (E) are | ||||||
18 | exempt
from the provisions of Section 250; | ||||||
19 | (F) An amount equal to all amounts included in such | ||||||
20 | total pursuant
to the provisions of Sections 402(a), | ||||||
21 | 402(c), 403(a), 403(b), 406(a), 407(a),
and 408 of the | ||||||
22 | Internal Revenue Code, or included in such total as
| ||||||
23 | distributions under the provisions of any retirement | ||||||
24 | or disability plan for
employees of any governmental | ||||||
25 | agency or unit, or retirement payments to
retired | ||||||
26 | partners, which payments are excluded in computing net |
| |||||||
| |||||||
1 | earnings
from self employment by Section 1402 of the | ||||||
2 | Internal Revenue Code and
regulations adopted pursuant | ||||||
3 | thereto; | ||||||
4 | (G) The valuation limitation amount; | ||||||
5 | (H) An amount equal to the amount of any tax | ||||||
6 | imposed by this Act
which was refunded to the taxpayer | ||||||
7 | and included in such total for the
taxable year; | ||||||
8 | (I) An amount equal to all amounts included in such | ||||||
9 | total pursuant
to the provisions of Section 111 of the | ||||||
10 | Internal Revenue Code as a
recovery of items previously | ||||||
11 | deducted from adjusted gross income in the
computation | ||||||
12 | of taxable income; | ||||||
13 | (J) An amount equal to those dividends included in | ||||||
14 | such total which were
paid by a corporation which | ||||||
15 | conducts business operations in a River Edge | ||||||
16 | Redevelopment Zone or zones created under the River | ||||||
17 | Edge Redevelopment Zone Act, and conducts
| ||||||
18 | substantially all of its operations in a River Edge | ||||||
19 | Redevelopment Zone or zones. This subparagraph (J) is | ||||||
20 | exempt from the provisions of Section 250; | ||||||
21 | (K) An amount equal to those dividends included in | ||||||
22 | such total that
were paid by a corporation that | ||||||
23 | conducts business operations in a federally
designated | ||||||
24 | Foreign Trade Zone or Sub-Zone and that is designated a | ||||||
25 | High Impact
Business located in Illinois; provided | ||||||
26 | that dividends eligible for the
deduction provided in |
| |||||||
| |||||||
1 | subparagraph (J) of paragraph (2) of this subsection
| ||||||
2 | shall not be eligible for the deduction provided under | ||||||
3 | this subparagraph
(K); | ||||||
4 | (L) For taxable years ending after December 31, | ||||||
5 | 1983, an amount equal to
all social security benefits | ||||||
6 | and railroad retirement benefits included in
such | ||||||
7 | total pursuant to Sections 72(r) and 86 of the Internal | ||||||
8 | Revenue Code; | ||||||
9 | (M) With the exception of any amounts subtracted | ||||||
10 | under subparagraph
(N), an amount equal to the sum of | ||||||
11 | all amounts disallowed as
deductions by (i) Sections | ||||||
12 | 171(a) (2), and 265(2) of the Internal Revenue Code, | ||||||
13 | and all amounts of expenses allocable
to interest and | ||||||
14 | disallowed as deductions by Section 265(1) of the | ||||||
15 | Internal
Revenue Code;
and (ii) for taxable years
| ||||||
16 | ending on or after August 13, 1999, Sections 171(a)(2), | ||||||
17 | 265,
280C, and 832(b)(5)(B)(i) of the Internal Revenue | ||||||
18 | Code, plus, for taxable years ending on or after | ||||||
19 | December 31, 2011, Section 45G(e)(3) of the Internal | ||||||
20 | Revenue Code and, for taxable years ending on or after | ||||||
21 | December 31, 2008, any amount included in gross income | ||||||
22 | under Section 87 of the Internal Revenue Code; the | ||||||
23 | provisions of this
subparagraph are exempt from the | ||||||
24 | provisions of Section 250; | ||||||
25 | (N) An amount equal to all amounts included in such | ||||||
26 | total which are
exempt from taxation by this State |
| |||||||
| |||||||
1 | either by reason of its statutes or
Constitution
or by | ||||||
2 | reason of the Constitution, treaties or statutes of the | ||||||
3 | United States;
provided that, in the case of any | ||||||
4 | statute of this State that exempts income
derived from | ||||||
5 | bonds or other obligations from the tax imposed under | ||||||
6 | this Act,
the amount exempted shall be the interest net | ||||||
7 | of bond premium amortization; | ||||||
8 | (O) An amount equal to any contribution made to a | ||||||
9 | job training
project established pursuant to the Tax | ||||||
10 | Increment Allocation Redevelopment Act; | ||||||
11 | (P) An amount equal to the amount of the deduction | ||||||
12 | used to compute the
federal income tax credit for | ||||||
13 | restoration of substantial amounts held under
claim of | ||||||
14 | right for the taxable year pursuant to Section 1341 of | ||||||
15 | the
Internal Revenue Code or of any itemized deduction | ||||||
16 | taken from adjusted gross income in the computation of | ||||||
17 | taxable income for restoration of substantial amounts | ||||||
18 | held under claim of right for the taxable year; | ||||||
19 | (Q) An amount equal to any amounts included in such | ||||||
20 | total, received by
the taxpayer as an acceleration in | ||||||
21 | the payment of life, endowment or annuity
benefits in | ||||||
22 | advance of the time they would otherwise be payable as | ||||||
23 | an indemnity
for a terminal illness; | ||||||
24 | (R) An amount equal to the amount of any federal or | ||||||
25 | State bonus paid
to veterans of the Persian Gulf War; | ||||||
26 | (S) An amount, to the extent included in adjusted |
| |||||||
| |||||||
1 | gross income, equal
to the amount of a contribution | ||||||
2 | made in the taxable year on behalf of the
taxpayer to a | ||||||
3 | medical care savings account established under the | ||||||
4 | Medical Care
Savings Account Act or the Medical Care | ||||||
5 | Savings Account Act of 2000 to the
extent the | ||||||
6 | contribution is accepted by the account
administrator | ||||||
7 | as provided in that Act; | ||||||
8 | (T) An amount, to the extent included in adjusted | ||||||
9 | gross income, equal to
the amount of interest earned in | ||||||
10 | the taxable year on a medical care savings
account | ||||||
11 | established under the Medical Care Savings Account Act | ||||||
12 | or the Medical
Care Savings Account Act of 2000 on | ||||||
13 | behalf of the
taxpayer, other than interest added | ||||||
14 | pursuant to item (D-5) of this paragraph
(2); | ||||||
15 | (U) For one taxable year beginning on or after | ||||||
16 | January 1,
1994, an
amount equal to the total amount of | ||||||
17 | tax imposed and paid under subsections (a)
and (b) of | ||||||
18 | Section 201 of this Act on grant amounts received by | ||||||
19 | the taxpayer
under the Nursing Home Grant Assistance | ||||||
20 | Act during the taxpayer's taxable years
1992 and 1993; | ||||||
21 | (V) Beginning with tax years ending on or after | ||||||
22 | December 31, 1995 and
ending with tax years ending on | ||||||
23 | or before December 31, 2004, an amount equal to
the | ||||||
24 | amount paid by a taxpayer who is a
self-employed | ||||||
25 | taxpayer, a partner of a partnership, or a
shareholder | ||||||
26 | in a Subchapter S corporation for health insurance or |
| |||||||
| |||||||
1 | long-term
care insurance for that taxpayer or that | ||||||
2 | taxpayer's spouse or dependents, to
the extent that the | ||||||
3 | amount paid for that health insurance or long-term care
| ||||||
4 | insurance may be deducted under Section 213 of the | ||||||
5 | Internal Revenue Code, has not been deducted on the | ||||||
6 | federal income tax return of the taxpayer,
and does not | ||||||
7 | exceed the taxable income attributable to that | ||||||
8 | taxpayer's income,
self-employment income, or | ||||||
9 | Subchapter S corporation income; except that no
| ||||||
10 | deduction shall be allowed under this item (V) if the | ||||||
11 | taxpayer is eligible to
participate in any health | ||||||
12 | insurance or long-term care insurance plan of an
| ||||||
13 | employer of the taxpayer or the taxpayer's
spouse. The | ||||||
14 | amount of the health insurance and long-term care | ||||||
15 | insurance
subtracted under this item (V) shall be | ||||||
16 | determined by multiplying total
health insurance and | ||||||
17 | long-term care insurance premiums paid by the taxpayer
| ||||||
18 | times a number that represents the fractional | ||||||
19 | percentage of eligible medical
expenses under Section | ||||||
20 | 213 of the Internal Revenue Code of 1986 not actually
| ||||||
21 | deducted on the taxpayer's federal income tax return; | ||||||
22 | (W) For taxable years beginning on or after January | ||||||
23 | 1, 1998,
all amounts included in the taxpayer's federal | ||||||
24 | gross income
in the taxable year from amounts converted | ||||||
25 | from a regular IRA to a Roth IRA.
This paragraph is | ||||||
26 | exempt from the provisions of Section
250; |
| |||||||
| |||||||
1 | (X) For taxable year 1999 and thereafter, an amount | ||||||
2 | equal to the
amount of any (i) distributions, to the | ||||||
3 | extent includible in gross income for
federal income | ||||||
4 | tax purposes, made to the taxpayer because of his or | ||||||
5 | her status
as a victim of persecution for racial or | ||||||
6 | religious reasons by Nazi Germany or
any other Axis | ||||||
7 | regime or as an heir of the victim and (ii) items
of | ||||||
8 | income, to the extent
includible in gross income for | ||||||
9 | federal income tax purposes, attributable to,
derived | ||||||
10 | from or in any way related to assets stolen from, | ||||||
11 | hidden from, or
otherwise lost to a victim of
| ||||||
12 | persecution for racial or religious reasons by Nazi | ||||||
13 | Germany or any other Axis
regime immediately prior to, | ||||||
14 | during, and immediately after World War II,
including, | ||||||
15 | but
not limited to, interest on the proceeds receivable | ||||||
16 | as insurance
under policies issued to a victim of | ||||||
17 | persecution for racial or religious
reasons
by Nazi | ||||||
18 | Germany or any other Axis regime by European insurance | ||||||
19 | companies
immediately prior to and during World War II;
| ||||||
20 | provided, however, this subtraction from federal | ||||||
21 | adjusted gross income does not
apply to assets acquired | ||||||
22 | with such assets or with the proceeds from the sale of
| ||||||
23 | such assets; provided, further, this paragraph shall | ||||||
24 | only apply to a taxpayer
who was the first recipient of | ||||||
25 | such assets after their recovery and who is a
victim of | ||||||
26 | persecution for racial or religious reasons
by Nazi |
| |||||||
| |||||||
1 | Germany or any other Axis regime or as an heir of the | ||||||
2 | victim. The
amount of and the eligibility for any | ||||||
3 | public assistance, benefit, or
similar entitlement is | ||||||
4 | not affected by the inclusion of items (i) and (ii) of
| ||||||
5 | this paragraph in gross income for federal income tax | ||||||
6 | purposes.
This paragraph is exempt from the provisions | ||||||
7 | of Section 250; | ||||||
8 | (Y) For taxable years beginning on or after January | ||||||
9 | 1, 2002
and ending
on or before December 31, 2004, | ||||||
10 | moneys contributed in the taxable year to a College | ||||||
11 | Savings Pool account under
Section 16.5 of the State | ||||||
12 | Treasurer Act, except that amounts excluded from
gross | ||||||
13 | income under Section 529(c)(3)(C)(i) of the Internal | ||||||
14 | Revenue Code
shall not be considered moneys | ||||||
15 | contributed under this subparagraph (Y). For taxable | ||||||
16 | years beginning on or after January 1, 2005, a maximum | ||||||
17 | of $10,000
contributed
in the
taxable year to (i) a | ||||||
18 | College Savings Pool account under Section 16.5 of the
| ||||||
19 | State
Treasurer Act or (ii) the Illinois Prepaid | ||||||
20 | Tuition Trust Fund,
except that
amounts excluded from | ||||||
21 | gross income under Section 529(c)(3)(C)(i) of the
| ||||||
22 | Internal
Revenue Code shall not be considered moneys | ||||||
23 | contributed under this subparagraph
(Y). For purposes | ||||||
24 | of this subparagraph, contributions made by an | ||||||
25 | employer on behalf of an employee, or matching | ||||||
26 | contributions made by an employee, shall be treated as |
| |||||||
| |||||||
1 | made by the employee. This
subparagraph (Y) is exempt | ||||||
2 | from the provisions of Section 250; | ||||||
3 | (Z) For taxable years 2001 and thereafter, for the | ||||||
4 | taxable year in
which the bonus depreciation deduction
| ||||||
5 | is taken on the taxpayer's federal income tax return | ||||||
6 | under
subsection (k) of Section 168 of the Internal | ||||||
7 | Revenue Code and for each
applicable taxable year | ||||||
8 | thereafter, an amount equal to "x", where: | ||||||
9 | (1) "y" equals the amount of the depreciation | ||||||
10 | deduction taken for the
taxable year
on the | ||||||
11 | taxpayer's federal income tax return on property | ||||||
12 | for which the bonus
depreciation deduction
was | ||||||
13 | taken in any year under subsection (k) of Section | ||||||
14 | 168 of the Internal
Revenue Code, but not including | ||||||
15 | the bonus depreciation deduction; | ||||||
16 | (2) for taxable years ending on or before | ||||||
17 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
18 | and then divided by 70 (or "y"
multiplied by | ||||||
19 | 0.429); and | ||||||
20 | (3) for taxable years ending after December | ||||||
21 | 31, 2005: | ||||||
22 | (i) for property on which a bonus | ||||||
23 | depreciation deduction of 30% of the adjusted | ||||||
24 | basis was taken, "x" equals "y" multiplied by | ||||||
25 | 30 and then divided by 70 (or "y"
multiplied by | ||||||
26 | 0.429); and |
| |||||||
| |||||||
1 | (ii) for property on which a bonus | ||||||
2 | depreciation deduction of 50% of the adjusted | ||||||
3 | basis was taken, "x" equals "y" multiplied by | ||||||
4 | 1.0. | ||||||
5 | The aggregate amount deducted under this | ||||||
6 | subparagraph in all taxable
years for any one piece of | ||||||
7 | property may not exceed the amount of the bonus
| ||||||
8 | depreciation deduction
taken on that property on the | ||||||
9 | taxpayer's federal income tax return under
subsection | ||||||
10 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
11 | subparagraph (Z) is exempt from the provisions of | ||||||
12 | Section 250; | ||||||
13 | (AA) If the taxpayer sells, transfers, abandons, | ||||||
14 | or otherwise disposes of
property for which the | ||||||
15 | taxpayer was required in any taxable year to make an
| ||||||
16 | addition modification under subparagraph (D-15), then | ||||||
17 | an amount equal to that
addition modification.
| ||||||
18 | If the taxpayer continues to own property through | ||||||
19 | the last day of the last tax year for which the | ||||||
20 | taxpayer may claim a depreciation deduction for | ||||||
21 | federal income tax purposes and for which the taxpayer | ||||||
22 | was required in any taxable year to make an addition | ||||||
23 | modification under subparagraph (D-15), then an amount | ||||||
24 | equal to that addition modification.
| ||||||
25 | The taxpayer is allowed to take the deduction under | ||||||
26 | this subparagraph
only once with respect to any one |
| |||||||
| |||||||
1 | piece of property. | ||||||
2 | This subparagraph (AA) is exempt from the | ||||||
3 | provisions of Section 250; | ||||||
4 | (BB) Any amount included in adjusted gross income, | ||||||
5 | other
than
salary,
received by a driver in a | ||||||
6 | ridesharing arrangement using a motor vehicle; | ||||||
7 | (CC) The amount of (i) any interest income (net of | ||||||
8 | the deductions allocable thereto) taken into account | ||||||
9 | for the taxable year with respect to a transaction with | ||||||
10 | a taxpayer that is required to make an addition | ||||||
11 | modification with respect to such transaction under | ||||||
12 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
13 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
14 | the amount of that addition modification, and
(ii) any | ||||||
15 | income from intangible property (net of the deductions | ||||||
16 | allocable thereto) taken into account for the taxable | ||||||
17 | year with respect to a transaction with a taxpayer that | ||||||
18 | is required to make an addition modification with | ||||||
19 | respect to such transaction under Section | ||||||
20 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
21 | 203(d)(2)(D-8), but not to exceed the amount of that | ||||||
22 | addition modification. This subparagraph (CC) is | ||||||
23 | exempt from the provisions of Section 250; | ||||||
24 | (DD) An amount equal to the interest income taken | ||||||
25 | into account for the taxable year (net of the | ||||||
26 | deductions allocable thereto) with respect to |
| |||||||
| |||||||
1 | transactions with (i) a foreign person who would be a | ||||||
2 | member of the taxpayer's unitary business group but for | ||||||
3 | the fact that the foreign person's business activity | ||||||
4 | outside the United States is 80% or more of that | ||||||
5 | person's total business activity and (ii) for taxable | ||||||
6 | years ending on or after December 31, 2008, to a person | ||||||
7 | who would be a member of the same unitary business | ||||||
8 | group but for the fact that the person is prohibited | ||||||
9 | under Section 1501(a)(27) from being included in the | ||||||
10 | unitary business group because he or she is ordinarily | ||||||
11 | required to apportion business income under different | ||||||
12 | subsections of Section 304, but not to exceed the | ||||||
13 | addition modification required to be made for the same | ||||||
14 | taxable year under Section 203(a)(2)(D-17) for | ||||||
15 | interest paid, accrued, or incurred, directly or | ||||||
16 | indirectly, to the same person. This subparagraph (DD) | ||||||
17 | is exempt from the provisions of Section 250; | ||||||
18 | (EE) An amount equal to the income from intangible | ||||||
19 | property taken into account for the taxable year (net | ||||||
20 | of the deductions allocable thereto) with respect to | ||||||
21 | transactions with (i) a foreign person who would be a | ||||||
22 | member of the taxpayer's unitary business group but for | ||||||
23 | the fact that the foreign person's business activity | ||||||
24 | outside the United States is 80% or more of that | ||||||
25 | person's total business activity and (ii) for taxable | ||||||
26 | years ending on or after December 31, 2008, to a person |
| |||||||
| |||||||
1 | who would be a member of the same unitary business | ||||||
2 | group but for the fact that the person is prohibited | ||||||
3 | under Section 1501(a)(27) from being included in the | ||||||
4 | unitary business group because he or she is ordinarily | ||||||
5 | required to apportion business income under different | ||||||
6 | subsections of Section 304, but not to exceed the | ||||||
7 | addition modification required to be made for the same | ||||||
8 | taxable year under Section 203(a)(2)(D-18) for | ||||||
9 | intangible expenses and costs paid, accrued, or | ||||||
10 | incurred, directly or indirectly, to the same foreign | ||||||
11 | person. This subparagraph (EE) is exempt from the | ||||||
12 | provisions of Section 250; | ||||||
13 | (FF) An amount equal to any amount awarded to the | ||||||
14 | taxpayer during the taxable year by the Court of Claims | ||||||
15 | under subsection (c) of Section 8 of the Court of | ||||||
16 | Claims Act for time unjustly served in a State prison. | ||||||
17 | This subparagraph (FF) is exempt from the provisions of | ||||||
18 | Section 250; and | ||||||
19 | (GG) For taxable years ending on or after December | ||||||
20 | 31, 2011, in the case of a taxpayer who was required to | ||||||
21 | add back any insurance premiums under Section | ||||||
22 | 203(a)(2)(D-19), such taxpayer may elect to subtract | ||||||
23 | that part of a reimbursement received from the | ||||||
24 | insurance company equal to the amount of the expense or | ||||||
25 | loss (including expenses incurred by the insurance | ||||||
26 | company) that would have been taken into account as a |
| |||||||
| |||||||
1 | deduction for federal income tax purposes if the | ||||||
2 | expense or loss had been uninsured. If a taxpayer makes | ||||||
3 | the election provided for by this subparagraph (GG), | ||||||
4 | the insurer to which the premiums were paid must add | ||||||
5 | back to income the amount subtracted by the taxpayer | ||||||
6 | pursuant to this subparagraph (GG). This subparagraph | ||||||
7 | (GG) is exempt from the provisions of Section 250 ; and . | ||||||
8 | (HH) For taxable years ending on or after December | ||||||
9 | 31, 2013, an amount, to the extent that it is included | ||||||
10 | in adjusted gross income, equal to any scholarship | ||||||
11 | redeemed under the School Choice Act. This | ||||||
12 | subparagraph (HH) is exempt from the provisions of | ||||||
13 | Section 250.
| ||||||
14 | (b) Corporations. | ||||||
15 | (1) In general. In the case of a corporation, base | ||||||
16 | income means an
amount equal to the taxpayer's taxable | ||||||
17 | income for the taxable year as
modified by paragraph (2). | ||||||
18 | (2) Modifications. The taxable income referred to in | ||||||
19 | paragraph (1)
shall be modified by adding thereto the sum | ||||||
20 | of the following amounts: | ||||||
21 | (A) An amount equal to all amounts paid or accrued | ||||||
22 | to the taxpayer
as interest and all distributions | ||||||
23 | received from regulated investment
companies during | ||||||
24 | the taxable year to the extent excluded from gross
| ||||||
25 | income in the computation of taxable income; |
| |||||||
| |||||||
1 | (B) An amount equal to the amount of tax imposed by | ||||||
2 | this Act to the
extent deducted from gross income in | ||||||
3 | the computation of taxable income
for the taxable year; | ||||||
4 | (C) In the case of a regulated investment company, | ||||||
5 | an amount equal to
the excess of (i) the net long-term | ||||||
6 | capital gain for the taxable year, over
(ii) the amount | ||||||
7 | of the capital gain dividends designated as such in | ||||||
8 | accordance
with Section 852(b)(3)(C) of the Internal | ||||||
9 | Revenue Code and any amount
designated under Section | ||||||
10 | 852(b)(3)(D) of the Internal Revenue Code,
| ||||||
11 | attributable to the taxable year (this amendatory Act | ||||||
12 | of 1995
(Public Act 89-89) is declarative of existing | ||||||
13 | law and is not a new
enactment); | ||||||
14 | (D) The amount of any net operating loss deduction | ||||||
15 | taken in arriving
at taxable income, other than a net | ||||||
16 | operating loss carried forward from a
taxable year | ||||||
17 | ending prior to December 31, 1986; | ||||||
18 | (E) For taxable years in which a net operating loss | ||||||
19 | carryback or
carryforward from a taxable year ending | ||||||
20 | prior to December 31, 1986 is an
element of taxable | ||||||
21 | income under paragraph (1) of subsection (e) or
| ||||||
22 | subparagraph (E) of paragraph (2) of subsection (e), | ||||||
23 | the amount by which
addition modifications other than | ||||||
24 | those provided by this subparagraph (E)
exceeded | ||||||
25 | subtraction modifications in such earlier taxable | ||||||
26 | year, with the
following limitations applied in the |
| |||||||
| |||||||
1 | order that they are listed: | ||||||
2 | (i) the addition modification relating to the | ||||||
3 | net operating loss
carried back or forward to the | ||||||
4 | taxable year from any taxable year ending
prior to | ||||||
5 | December 31, 1986 shall be reduced by the amount of | ||||||
6 | addition
modification under this subparagraph (E) | ||||||
7 | which related to that net operating
loss and which | ||||||
8 | was taken into account in calculating the base | ||||||
9 | income of an
earlier taxable year, and | ||||||
10 | (ii) the addition modification relating to the | ||||||
11 | net operating loss
carried back or forward to the | ||||||
12 | taxable year from any taxable year ending
prior to | ||||||
13 | December 31, 1986 shall not exceed the amount of | ||||||
14 | such carryback or
carryforward; | ||||||
15 | For taxable years in which there is a net operating | ||||||
16 | loss carryback or
carryforward from more than one other | ||||||
17 | taxable year ending prior to December
31, 1986, the | ||||||
18 | addition modification provided in this subparagraph | ||||||
19 | (E) shall
be the sum of the amounts computed | ||||||
20 | independently under the preceding
provisions of this | ||||||
21 | subparagraph (E) for each such taxable year; | ||||||
22 | (E-5) For taxable years ending after December 31, | ||||||
23 | 1997, an
amount equal to any eligible remediation costs | ||||||
24 | that the corporation
deducted in computing adjusted | ||||||
25 | gross income and for which the
corporation claims a | ||||||
26 | credit under subsection (l) of Section 201; |
| |||||||
| |||||||
1 | (E-10) For taxable years 2001 and thereafter, an | ||||||
2 | amount equal to the
bonus depreciation deduction taken | ||||||
3 | on the taxpayer's federal income tax return for the | ||||||
4 | taxable
year under subsection (k) of Section 168 of the | ||||||
5 | Internal Revenue Code; | ||||||
6 | (E-11) If the taxpayer sells, transfers, abandons, | ||||||
7 | or otherwise disposes of property for which the | ||||||
8 | taxpayer was required in any taxable year to
make an | ||||||
9 | addition modification under subparagraph (E-10), then | ||||||
10 | an amount equal
to the aggregate amount of the | ||||||
11 | deductions taken in all taxable
years under | ||||||
12 | subparagraph (T) with respect to that property. | ||||||
13 | If the taxpayer continues to own property through | ||||||
14 | the last day of the last tax year for which the | ||||||
15 | taxpayer may claim a depreciation deduction for | ||||||
16 | federal income tax purposes and for which the taxpayer | ||||||
17 | was allowed in any taxable year to make a subtraction | ||||||
18 | modification under subparagraph (T), then an amount | ||||||
19 | equal to that subtraction modification.
| ||||||
20 | The taxpayer is required to make the addition | ||||||
21 | modification under this
subparagraph
only once with | ||||||
22 | respect to any one piece of property; | ||||||
23 | (E-12) An amount equal to the amount otherwise | ||||||
24 | allowed as a deduction in computing base income for | ||||||
25 | interest paid, accrued, or incurred, directly or | ||||||
26 | indirectly, (i) for taxable years ending on or after |
| |||||||
| |||||||
1 | December 31, 2004, to a foreign person who would be a | ||||||
2 | member of the same unitary business group but for the | ||||||
3 | fact the foreign person's business activity outside | ||||||
4 | the United States is 80% or more of the foreign | ||||||
5 | person's total business activity and (ii) for taxable | ||||||
6 | years ending on or after December 31, 2008, to a person | ||||||
7 | who would be a member of the same unitary business | ||||||
8 | group but for the fact that the person is prohibited | ||||||
9 | under Section 1501(a)(27) from being included in the | ||||||
10 | unitary business group because he or she is ordinarily | ||||||
11 | required to apportion business income under different | ||||||
12 | subsections of Section 304. The addition modification | ||||||
13 | required by this subparagraph shall be reduced to the | ||||||
14 | extent that dividends were included in base income of | ||||||
15 | the unitary group for the same taxable year and | ||||||
16 | received by the taxpayer or by a member of the | ||||||
17 | taxpayer's unitary business group (including amounts | ||||||
18 | included in gross income pursuant to Sections 951 | ||||||
19 | through 964 of the Internal Revenue Code and amounts | ||||||
20 | included in gross income under Section 78 of the | ||||||
21 | Internal Revenue Code) with respect to the stock of the | ||||||
22 | same person to whom the interest was paid, accrued, or | ||||||
23 | incurred.
| ||||||
24 | This paragraph shall not apply to the following:
| ||||||
25 | (i) an item of interest paid, accrued, or | ||||||
26 | incurred, directly or indirectly, to a person who |
| |||||||
| |||||||
1 | is subject in a foreign country or state, other | ||||||
2 | than a state which requires mandatory unitary | ||||||
3 | reporting, to a tax on or measured by net income | ||||||
4 | with respect to such interest; or | ||||||
5 | (ii) an item of interest paid, accrued, or | ||||||
6 | incurred, directly or indirectly, to a person if | ||||||
7 | the taxpayer can establish, based on a | ||||||
8 | preponderance of the evidence, both of the | ||||||
9 | following: | ||||||
10 | (a) the person, during the same taxable | ||||||
11 | year, paid, accrued, or incurred, the interest | ||||||
12 | to a person that is not a related member, and | ||||||
13 | (b) the transaction giving rise to the | ||||||
14 | interest expense between the taxpayer and the | ||||||
15 | person did not have as a principal purpose the | ||||||
16 | avoidance of Illinois income tax, and is paid | ||||||
17 | pursuant to a contract or agreement that | ||||||
18 | reflects an arm's-length interest rate and | ||||||
19 | terms; or
| ||||||
20 | (iii) the taxpayer can establish, based on | ||||||
21 | clear and convincing evidence, that the interest | ||||||
22 | paid, accrued, or incurred relates to a contract or | ||||||
23 | agreement entered into at arm's-length rates and | ||||||
24 | terms and the principal purpose for the payment is | ||||||
25 | not federal or Illinois tax avoidance; or
| ||||||
26 | (iv) an item of interest paid, accrued, or |
| |||||||
| |||||||
1 | incurred, directly or indirectly, to a person if | ||||||
2 | the taxpayer establishes by clear and convincing | ||||||
3 | evidence that the adjustments are unreasonable; or | ||||||
4 | if the taxpayer and the Director agree in writing | ||||||
5 | to the application or use of an alternative method | ||||||
6 | of apportionment under Section 304(f).
| ||||||
7 | Nothing in this subsection shall preclude the | ||||||
8 | Director from making any other adjustment | ||||||
9 | otherwise allowed under Section 404 of this Act for | ||||||
10 | any tax year beginning after the effective date of | ||||||
11 | this amendment provided such adjustment is made | ||||||
12 | pursuant to regulation adopted by the Department | ||||||
13 | and such regulations provide methods and standards | ||||||
14 | by which the Department will utilize its authority | ||||||
15 | under Section 404 of this Act;
| ||||||
16 | (E-13) An amount equal to the amount of intangible | ||||||
17 | expenses and costs otherwise allowed as a deduction in | ||||||
18 | computing base income, and that were paid, accrued, or | ||||||
19 | incurred, directly or indirectly, (i) for taxable | ||||||
20 | years ending on or after December 31, 2004, to a | ||||||
21 | foreign person who would be a member of the same | ||||||
22 | unitary business group but for the fact that the | ||||||
23 | foreign person's business activity outside the United | ||||||
24 | States is 80% or more of that person's total business | ||||||
25 | activity and (ii) for taxable years ending on or after | ||||||
26 | December 31, 2008, to a person who would be a member of |
| |||||||
| |||||||
1 | the same unitary business group but for the fact that | ||||||
2 | the person is prohibited under Section 1501(a)(27) | ||||||
3 | from being included in the unitary business group | ||||||
4 | because he or she is ordinarily required to apportion | ||||||
5 | business income under different subsections of Section | ||||||
6 | 304. The addition modification required by this | ||||||
7 | subparagraph shall be reduced to the extent that | ||||||
8 | dividends were included in base income of the unitary | ||||||
9 | group for the same taxable year and received by the | ||||||
10 | taxpayer or by a member of the taxpayer's unitary | ||||||
11 | business group (including amounts included in gross | ||||||
12 | income pursuant to Sections 951 through 964 of the | ||||||
13 | Internal Revenue Code and amounts included in gross | ||||||
14 | income under Section 78 of the Internal Revenue Code) | ||||||
15 | with respect to the stock of the same person to whom | ||||||
16 | the intangible expenses and costs were directly or | ||||||
17 | indirectly paid, incurred, or accrued. The preceding | ||||||
18 | sentence shall not apply to the extent that the same | ||||||
19 | dividends caused a reduction to the addition | ||||||
20 | modification required under Section 203(b)(2)(E-12) of | ||||||
21 | this Act.
As used in this subparagraph, the term | ||||||
22 | "intangible expenses and costs" includes (1) expenses, | ||||||
23 | losses, and costs for, or related to, the direct or | ||||||
24 | indirect acquisition, use, maintenance or management, | ||||||
25 | ownership, sale, exchange, or any other disposition of | ||||||
26 | intangible property; (2) losses incurred, directly or |
| |||||||
| |||||||
1 | indirectly, from factoring transactions or discounting | ||||||
2 | transactions; (3) royalty, patent, technical, and | ||||||
3 | copyright fees; (4) licensing fees; and (5) other | ||||||
4 | similar expenses and costs.
For purposes of this | ||||||
5 | subparagraph, "intangible property" includes patents, | ||||||
6 | patent applications, trade names, trademarks, service | ||||||
7 | marks, copyrights, mask works, trade secrets, and | ||||||
8 | similar types of intangible assets. | ||||||
9 | This paragraph shall not apply to the following: | ||||||
10 | (i) any item of intangible expenses or costs | ||||||
11 | paid, accrued, or incurred, directly or | ||||||
12 | indirectly, from a transaction with a person who is | ||||||
13 | subject in a foreign country or state, other than a | ||||||
14 | state which requires mandatory unitary reporting, | ||||||
15 | to a tax on or measured by net income with respect | ||||||
16 | to such item; or | ||||||
17 | (ii) any item of intangible expense or cost | ||||||
18 | paid, accrued, or incurred, directly or | ||||||
19 | indirectly, if the taxpayer can establish, based | ||||||
20 | on a preponderance of the evidence, both of the | ||||||
21 | following: | ||||||
22 | (a) the person during the same taxable | ||||||
23 | year paid, accrued, or incurred, the | ||||||
24 | intangible expense or cost to a person that is | ||||||
25 | not a related member, and | ||||||
26 | (b) the transaction giving rise to the |
| |||||||
| |||||||
1 | intangible expense or cost between the | ||||||
2 | taxpayer and the person did not have as a | ||||||
3 | principal purpose the avoidance of Illinois | ||||||
4 | income tax, and is paid pursuant to a contract | ||||||
5 | or agreement that reflects arm's-length terms; | ||||||
6 | or | ||||||
7 | (iii) any item of intangible expense or cost | ||||||
8 | paid, accrued, or incurred, directly or | ||||||
9 | indirectly, from a transaction with a person if the | ||||||
10 | taxpayer establishes by clear and convincing | ||||||
11 | evidence, that the adjustments are unreasonable; | ||||||
12 | or if the taxpayer and the Director agree in | ||||||
13 | writing to the application or use of an alternative | ||||||
14 | method of apportionment under Section 304(f);
| ||||||
15 | Nothing in this subsection shall preclude the | ||||||
16 | Director from making any other adjustment | ||||||
17 | otherwise allowed under Section 404 of this Act for | ||||||
18 | any tax year beginning after the effective date of | ||||||
19 | this amendment provided such adjustment is made | ||||||
20 | pursuant to regulation adopted by the Department | ||||||
21 | and such regulations provide methods and standards | ||||||
22 | by which the Department will utilize its authority | ||||||
23 | under Section 404 of this Act;
| ||||||
24 | (E-14) For taxable years ending on or after | ||||||
25 | December 31, 2008, an amount equal to the amount of | ||||||
26 | insurance premium expenses and costs otherwise allowed |
| |||||||
| |||||||
1 | as a deduction in computing base income, and that were | ||||||
2 | paid, accrued, or incurred, directly or indirectly, to | ||||||
3 | a person who would be a member of the same unitary | ||||||
4 | business group but for the fact that the person is | ||||||
5 | prohibited under Section 1501(a)(27) from being | ||||||
6 | included in the unitary business group because he or | ||||||
7 | she is ordinarily required to apportion business | ||||||
8 | income under different subsections of Section 304. The | ||||||
9 | addition modification required by this subparagraph | ||||||
10 | shall be reduced to the extent that dividends were | ||||||
11 | included in base income of the unitary group for the | ||||||
12 | same taxable year and received by the taxpayer or by a | ||||||
13 | member of the taxpayer's unitary business group | ||||||
14 | (including amounts included in gross income under | ||||||
15 | Sections 951 through 964 of the Internal Revenue Code | ||||||
16 | and amounts included in gross income under Section 78 | ||||||
17 | of the Internal Revenue Code) with respect to the stock | ||||||
18 | of the same person to whom the premiums and costs were | ||||||
19 | directly or indirectly paid, incurred, or accrued. The | ||||||
20 | preceding sentence does not apply to the extent that | ||||||
21 | the same dividends caused a reduction to the addition | ||||||
22 | modification required under Section 203(b)(2)(E-12) or | ||||||
23 | Section 203(b)(2)(E-13) of this Act;
| ||||||
24 | (E-15) For taxable years beginning after December | ||||||
25 | 31, 2008, any deduction for dividends paid by a captive | ||||||
26 | real estate investment trust that is allowed to a real |
| |||||||
| |||||||
1 | estate investment trust under Section 857(b)(2)(B) of | ||||||
2 | the Internal Revenue Code for dividends paid; | ||||||
3 | (E-16) An amount equal to the credit allowable to | ||||||
4 | the taxpayer under Section 218(a) of this Act, | ||||||
5 | determined without regard to Section 218(c) of this | ||||||
6 | Act; | ||||||
7 | and by deducting from the total so obtained the sum of the | ||||||
8 | following
amounts: | ||||||
9 | (F) An amount equal to the amount of any tax | ||||||
10 | imposed by this Act
which was refunded to the taxpayer | ||||||
11 | and included in such total for the
taxable year; | ||||||
12 | (G) An amount equal to any amount included in such | ||||||
13 | total under
Section 78 of the Internal Revenue Code; | ||||||
14 | (H) In the case of a regulated investment company, | ||||||
15 | an amount equal
to the amount of exempt interest | ||||||
16 | dividends as defined in subsection (b)
(5) of Section | ||||||
17 | 852 of the Internal Revenue Code, paid to shareholders
| ||||||
18 | for the taxable year; | ||||||
19 | (I) With the exception of any amounts subtracted | ||||||
20 | under subparagraph
(J),
an amount equal to the sum of | ||||||
21 | all amounts disallowed as
deductions by (i) Sections | ||||||
22 | 171(a) (2), and 265(a)(2) and amounts disallowed as
| ||||||
23 | interest expense by Section 291(a)(3) of the Internal | ||||||
24 | Revenue Code, and all amounts of expenses allocable to | ||||||
25 | interest and
disallowed as deductions by Section | ||||||
26 | 265(a)(1) of the Internal Revenue Code;
and (ii) for |
| |||||||
| |||||||
1 | taxable years
ending on or after August 13, 1999, | ||||||
2 | Sections
171(a)(2), 265,
280C, 291(a)(3), and | ||||||
3 | 832(b)(5)(B)(i) of the Internal Revenue Code, plus, | ||||||
4 | for tax years ending on or after December 31, 2011, | ||||||
5 | amounts disallowed as deductions by Section 45G(e)(3) | ||||||
6 | of the Internal Revenue Code and, for taxable years | ||||||
7 | ending on or after December 31, 2008, any amount | ||||||
8 | included in gross income under Section 87 of the | ||||||
9 | Internal Revenue Code and the policyholders' share of | ||||||
10 | tax-exempt interest of a life insurance company under | ||||||
11 | Section 807(a)(2)(B) of the Internal Revenue Code (in | ||||||
12 | the case of a life insurance company with gross income | ||||||
13 | from a decrease in reserves for the tax year) or | ||||||
14 | Section 807(b)(1)(B) of the Internal Revenue Code (in | ||||||
15 | the case of a life insurance company allowed a | ||||||
16 | deduction for an increase in reserves for the tax | ||||||
17 | year); the
provisions of this
subparagraph are exempt | ||||||
18 | from the provisions of Section 250; | ||||||
19 | (J) An amount equal to all amounts included in such | ||||||
20 | total which are
exempt from taxation by this State | ||||||
21 | either by reason of its statutes or
Constitution
or by | ||||||
22 | reason of the Constitution, treaties or statutes of the | ||||||
23 | United States;
provided that, in the case of any | ||||||
24 | statute of this State that exempts income
derived from | ||||||
25 | bonds or other obligations from the tax imposed under | ||||||
26 | this Act,
the amount exempted shall be the interest net |
| |||||||
| |||||||
1 | of bond premium amortization; | ||||||
2 | (K) An amount equal to those dividends included in | ||||||
3 | such total
which were paid by a corporation which | ||||||
4 | conducts
business operations in a River Edge | ||||||
5 | Redevelopment Zone or zones created under the River | ||||||
6 | Edge Redevelopment Zone Act and conducts substantially | ||||||
7 | all of its
operations in a River Edge Redevelopment | ||||||
8 | Zone or zones. This subparagraph (K) is exempt from the | ||||||
9 | provisions of Section 250; | ||||||
10 | (L) An amount equal to those dividends included in | ||||||
11 | such total that
were paid by a corporation that | ||||||
12 | conducts business operations in a federally
designated | ||||||
13 | Foreign Trade Zone or Sub-Zone and that is designated a | ||||||
14 | High Impact
Business located in Illinois; provided | ||||||
15 | that dividends eligible for the
deduction provided in | ||||||
16 | subparagraph (K) of paragraph 2 of this subsection
| ||||||
17 | shall not be eligible for the deduction provided under | ||||||
18 | this subparagraph
(L); | ||||||
19 | (M) For any taxpayer that is a financial | ||||||
20 | organization within the meaning
of Section 304(c) of | ||||||
21 | this Act, an amount included in such total as interest
| ||||||
22 | income from a loan or loans made by such taxpayer to a | ||||||
23 | borrower, to the extent
that such a loan is secured by | ||||||
24 | property which is eligible for the River Edge | ||||||
25 | Redevelopment Zone Investment Credit. To determine the | ||||||
26 | portion of a loan or loans that is
secured by property |
| |||||||
| |||||||
1 | eligible for a Section 201(f) investment
credit to the | ||||||
2 | borrower, the entire principal amount of the loan or | ||||||
3 | loans
between the taxpayer and the borrower should be | ||||||
4 | divided into the basis of the
Section 201(f) investment | ||||||
5 | credit property which secures the
loan or loans, using | ||||||
6 | for this purpose the original basis of such property on
| ||||||
7 | the date that it was placed in service in the River | ||||||
8 | Edge Redevelopment Zone. The subtraction modification | ||||||
9 | available to taxpayer in any
year under this subsection | ||||||
10 | shall be that portion of the total interest paid
by the | ||||||
11 | borrower with respect to such loan attributable to the | ||||||
12 | eligible
property as calculated under the previous | ||||||
13 | sentence. This subparagraph (M) is exempt from the | ||||||
14 | provisions of Section 250; | ||||||
15 | (M-1) For any taxpayer that is a financial | ||||||
16 | organization within the
meaning of Section 304(c) of | ||||||
17 | this Act, an amount included in such total as
interest | ||||||
18 | income from a loan or loans made by such taxpayer to a | ||||||
19 | borrower,
to the extent that such a loan is secured by | ||||||
20 | property which is eligible for
the High Impact Business | ||||||
21 | Investment Credit. To determine the portion of a
loan | ||||||
22 | or loans that is secured by property eligible for a | ||||||
23 | Section 201(h) investment credit to the borrower, the | ||||||
24 | entire principal amount of
the loan or loans between | ||||||
25 | the taxpayer and the borrower should be divided into
| ||||||
26 | the basis of the Section 201(h) investment credit |
| |||||||
| |||||||
1 | property which
secures the loan or loans, using for | ||||||
2 | this purpose the original basis of such
property on the | ||||||
3 | date that it was placed in service in a federally | ||||||
4 | designated
Foreign Trade Zone or Sub-Zone located in | ||||||
5 | Illinois. No taxpayer that is
eligible for the | ||||||
6 | deduction provided in subparagraph (M) of paragraph | ||||||
7 | (2) of
this subsection shall be eligible for the | ||||||
8 | deduction provided under this
subparagraph (M-1). The | ||||||
9 | subtraction modification available to taxpayers in
any | ||||||
10 | year under this subsection shall be that portion of the | ||||||
11 | total interest
paid by the borrower with respect to | ||||||
12 | such loan attributable to the eligible
property as | ||||||
13 | calculated under the previous sentence; | ||||||
14 | (N) Two times any contribution made during the | ||||||
15 | taxable year to a
designated zone organization to the | ||||||
16 | extent that the contribution (i)
qualifies as a | ||||||
17 | charitable contribution under subsection (c) of | ||||||
18 | Section 170
of the Internal Revenue Code and (ii) must, | ||||||
19 | by its terms, be used for a
project approved by the | ||||||
20 | Department of Commerce and Economic Opportunity under | ||||||
21 | Section 11 of the Illinois Enterprise Zone Act or under | ||||||
22 | Section 10-10 of the River Edge Redevelopment Zone Act. | ||||||
23 | This subparagraph (N) is exempt from the provisions of | ||||||
24 | Section 250; | ||||||
25 | (O) An amount equal to: (i) 85% for taxable years | ||||||
26 | ending on or before
December 31, 1992, or, a percentage |
| |||||||
| |||||||
1 | equal to the percentage allowable under
Section | ||||||
2 | 243(a)(1) of the Internal Revenue Code of 1986 for | ||||||
3 | taxable years ending
after December 31, 1992, of the | ||||||
4 | amount by which dividends included in taxable
income | ||||||
5 | and received from a corporation that is not created or | ||||||
6 | organized under
the laws of the United States or any | ||||||
7 | state or political subdivision thereof,
including, for | ||||||
8 | taxable years ending on or after December 31, 1988, | ||||||
9 | dividends
received or deemed received or paid or deemed | ||||||
10 | paid under Sections 951 through
965 of the Internal | ||||||
11 | Revenue Code, exceed the amount of the modification
| ||||||
12 | provided under subparagraph (G) of paragraph (2) of | ||||||
13 | this subsection (b) which
is related to such dividends, | ||||||
14 | and including, for taxable years ending on or after | ||||||
15 | December 31, 2008, dividends received from a captive | ||||||
16 | real estate investment trust; plus (ii) 100% of the | ||||||
17 | amount by which dividends,
included in taxable income | ||||||
18 | and received, including, for taxable years ending on
or | ||||||
19 | after December 31, 1988, dividends received or deemed | ||||||
20 | received or paid or
deemed paid under Sections 951 | ||||||
21 | through 964 of the Internal Revenue Code and including, | ||||||
22 | for taxable years ending on or after December 31, 2008, | ||||||
23 | dividends received from a captive real estate | ||||||
24 | investment trust, from
any such corporation specified | ||||||
25 | in clause (i) that would but for the provisions
of | ||||||
26 | Section 1504 (b) (3) of the Internal Revenue Code be |
| |||||||
| |||||||
1 | treated as a member of
the affiliated group which | ||||||
2 | includes the dividend recipient, exceed the amount
of | ||||||
3 | the modification provided under subparagraph (G) of | ||||||
4 | paragraph (2) of this
subsection (b) which is related | ||||||
5 | to such dividends. This subparagraph (O) is exempt from | ||||||
6 | the provisions of Section 250 of this Act; | ||||||
7 | (P) An amount equal to any contribution made to a | ||||||
8 | job training project
established pursuant to the Tax | ||||||
9 | Increment Allocation Redevelopment Act; | ||||||
10 | (Q) An amount equal to the amount of the deduction | ||||||
11 | used to compute the
federal income tax credit for | ||||||
12 | restoration of substantial amounts held under
claim of | ||||||
13 | right for the taxable year pursuant to Section 1341 of | ||||||
14 | the
Internal Revenue Code; | ||||||
15 | (R) On and after July 20, 1999, in the case of an | ||||||
16 | attorney-in-fact with respect to whom an
interinsurer | ||||||
17 | or a reciprocal insurer has made the election under | ||||||
18 | Section 835 of
the Internal Revenue Code, 26 U.S.C. | ||||||
19 | 835, an amount equal to the excess, if
any, of the | ||||||
20 | amounts paid or incurred by that interinsurer or | ||||||
21 | reciprocal insurer
in the taxable year to the | ||||||
22 | attorney-in-fact over the deduction allowed to that
| ||||||
23 | interinsurer or reciprocal insurer with respect to the | ||||||
24 | attorney-in-fact under
Section 835(b) of the Internal | ||||||
25 | Revenue Code for the taxable year; the provisions of | ||||||
26 | this subparagraph are exempt from the provisions of |
| |||||||
| |||||||
1 | Section 250; | ||||||
2 | (S) For taxable years ending on or after December | ||||||
3 | 31, 1997, in the
case of a Subchapter
S corporation, an | ||||||
4 | amount equal to all amounts of income allocable to a
| ||||||
5 | shareholder subject to the Personal Property Tax | ||||||
6 | Replacement Income Tax imposed
by subsections (c) and | ||||||
7 | (d) of Section 201 of this Act, including amounts
| ||||||
8 | allocable to organizations exempt from federal income | ||||||
9 | tax by reason of Section
501(a) of the Internal Revenue | ||||||
10 | Code. This subparagraph (S) is exempt from
the | ||||||
11 | provisions of Section 250; | ||||||
12 | (T) For taxable years 2001 and thereafter, for the | ||||||
13 | taxable year in
which the bonus depreciation deduction
| ||||||
14 | is taken on the taxpayer's federal income tax return | ||||||
15 | under
subsection (k) of Section 168 of the Internal | ||||||
16 | Revenue Code and for each
applicable taxable year | ||||||
17 | thereafter, an amount equal to "x", where: | ||||||
18 | (1) "y" equals the amount of the depreciation | ||||||
19 | deduction taken for the
taxable year
on the | ||||||
20 | taxpayer's federal income tax return on property | ||||||
21 | for which the bonus
depreciation deduction
was | ||||||
22 | taken in any year under subsection (k) of Section | ||||||
23 | 168 of the Internal
Revenue Code, but not including | ||||||
24 | the bonus depreciation deduction; | ||||||
25 | (2) for taxable years ending on or before | ||||||
26 | December 31, 2005, "x" equals "y" multiplied by 30 |
| |||||||
| |||||||
1 | and then divided by 70 (or "y"
multiplied by | ||||||
2 | 0.429); and | ||||||
3 | (3) for taxable years ending after December | ||||||
4 | 31, 2005: | ||||||
5 | (i) for property on which a bonus | ||||||
6 | depreciation deduction of 30% of the adjusted | ||||||
7 | basis was taken, "x" equals "y" multiplied by | ||||||
8 | 30 and then divided by 70 (or "y"
multiplied by | ||||||
9 | 0.429); and | ||||||
10 | (ii) for property on which a bonus | ||||||
11 | depreciation deduction of 50% of the adjusted | ||||||
12 | basis was taken, "x" equals "y" multiplied by | ||||||
13 | 1.0. | ||||||
14 | The aggregate amount deducted under this | ||||||
15 | subparagraph in all taxable
years for any one piece of | ||||||
16 | property may not exceed the amount of the bonus
| ||||||
17 | depreciation deduction
taken on that property on the | ||||||
18 | taxpayer's federal income tax return under
subsection | ||||||
19 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
20 | subparagraph (T) is exempt from the provisions of | ||||||
21 | Section 250; | ||||||
22 | (U) If the taxpayer sells, transfers, abandons, or | ||||||
23 | otherwise disposes of
property for which the taxpayer | ||||||
24 | was required in any taxable year to make an
addition | ||||||
25 | modification under subparagraph (E-10), then an amount | ||||||
26 | equal to that
addition modification. |
| |||||||
| |||||||
1 | If the taxpayer continues to own property through | ||||||
2 | the last day of the last tax year for which the | ||||||
3 | taxpayer may claim a depreciation deduction for | ||||||
4 | federal income tax purposes and for which the taxpayer | ||||||
5 | was required in any taxable year to make an addition | ||||||
6 | modification under subparagraph (E-10), then an amount | ||||||
7 | equal to that addition modification.
| ||||||
8 | The taxpayer is allowed to take the deduction under | ||||||
9 | this subparagraph
only once with respect to any one | ||||||
10 | piece of property. | ||||||
11 | This subparagraph (U) is exempt from the | ||||||
12 | provisions of Section 250; | ||||||
13 | (V) The amount of: (i) any interest income (net of | ||||||
14 | the deductions allocable thereto) taken into account | ||||||
15 | for the taxable year with respect to a transaction with | ||||||
16 | a taxpayer that is required to make an addition | ||||||
17 | modification with respect to such transaction under | ||||||
18 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
19 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
20 | the amount of such addition modification,
(ii) any | ||||||
21 | income from intangible property (net of the deductions | ||||||
22 | allocable thereto) taken into account for the taxable | ||||||
23 | year with respect to a transaction with a taxpayer that | ||||||
24 | is required to make an addition modification with | ||||||
25 | respect to such transaction under Section | ||||||
26 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or |
| |||||||
| |||||||
1 | 203(d)(2)(D-8), but not to exceed the amount of such | ||||||
2 | addition modification, and (iii) any insurance premium | ||||||
3 | income (net of deductions allocable thereto) taken | ||||||
4 | into account for the taxable year with respect to a | ||||||
5 | transaction with a taxpayer that is required to make an | ||||||
6 | addition modification with respect to such transaction | ||||||
7 | under Section 203(a)(2)(D-19), Section | ||||||
8 | 203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section | ||||||
9 | 203(d)(2)(D-9), but not to exceed the amount of that | ||||||
10 | addition modification. This subparagraph (V) is exempt | ||||||
11 | from the provisions of Section 250;
| ||||||
12 | (W) An amount equal to the interest income taken | ||||||
13 | into account for the taxable year (net of the | ||||||
14 | deductions allocable thereto) with respect to | ||||||
15 | transactions with (i) a foreign person who would be a | ||||||
16 | member of the taxpayer's unitary business group but for | ||||||
17 | the fact that the foreign person's business activity | ||||||
18 | outside the United States is 80% or more of that | ||||||
19 | person's total business activity and (ii) for taxable | ||||||
20 | years ending on or after December 31, 2008, to a person | ||||||
21 | who would be a member of the same unitary business | ||||||
22 | group but for the fact that the person is prohibited | ||||||
23 | under Section 1501(a)(27) from being included in the | ||||||
24 | unitary business group because he or she is ordinarily | ||||||
25 | required to apportion business income under different | ||||||
26 | subsections of Section 304, but not to exceed the |
| |||||||
| |||||||
1 | addition modification required to be made for the same | ||||||
2 | taxable year under Section 203(b)(2)(E-12) for | ||||||
3 | interest paid, accrued, or incurred, directly or | ||||||
4 | indirectly, to the same person. This subparagraph (W) | ||||||
5 | is exempt from the provisions of Section 250;
| ||||||
6 | (X) An amount equal to the income from intangible | ||||||
7 | property taken into account for the taxable year (net | ||||||
8 | of the deductions allocable thereto) with respect to | ||||||
9 | transactions with (i) a foreign person who would be a | ||||||
10 | member of the taxpayer's unitary business group but for | ||||||
11 | the fact that the foreign person's business activity | ||||||
12 | outside the United States is 80% or more of that | ||||||
13 | person's total business activity and (ii) for taxable | ||||||
14 | years ending on or after December 31, 2008, to a person | ||||||
15 | who would be a member of the same unitary business | ||||||
16 | group but for the fact that the person is prohibited | ||||||
17 | under Section 1501(a)(27) from being included in the | ||||||
18 | unitary business group because he or she is ordinarily | ||||||
19 | required to apportion business income under different | ||||||
20 | subsections of Section 304, but not to exceed the | ||||||
21 | addition modification required to be made for the same | ||||||
22 | taxable year under Section 203(b)(2)(E-13) for | ||||||
23 | intangible expenses and costs paid, accrued, or | ||||||
24 | incurred, directly or indirectly, to the same foreign | ||||||
25 | person. This subparagraph (X) is exempt from the | ||||||
26 | provisions of Section 250;
|
| |||||||
| |||||||
1 | (Y) For taxable years ending on or after December | ||||||
2 | 31, 2011, in the case of a taxpayer who was required to | ||||||
3 | add back any insurance premiums under Section | ||||||
4 | 203(b)(2)(E-14), such taxpayer may elect to subtract | ||||||
5 | that part of a reimbursement received from the | ||||||
6 | insurance company equal to the amount of the expense or | ||||||
7 | loss (including expenses incurred by the insurance | ||||||
8 | company) that would have been taken into account as a | ||||||
9 | deduction for federal income tax purposes if the | ||||||
10 | expense or loss had been uninsured. If a taxpayer makes | ||||||
11 | the election provided for by this subparagraph (Y), the | ||||||
12 | insurer to which the premiums were paid must add back | ||||||
13 | to income the amount subtracted by the taxpayer | ||||||
14 | pursuant to this subparagraph (Y). This subparagraph | ||||||
15 | (Y) is exempt from the provisions of Section 250; and | ||||||
16 | (Z) The difference between the nondeductible | ||||||
17 | controlled foreign corporation dividends under Section | ||||||
18 | 965(e)(3) of the Internal Revenue Code over the taxable | ||||||
19 | income of the taxpayer, computed without regard to | ||||||
20 | Section 965(e)(2)(A) of the Internal Revenue Code, and | ||||||
21 | without regard to any net operating loss deduction. | ||||||
22 | This subparagraph (Z) is exempt from the provisions of | ||||||
23 | Section 250. | ||||||
24 | (3) Special rule. For purposes of paragraph (2) (A), | ||||||
25 | "gross income"
in the case of a life insurance company, for | ||||||
26 | tax years ending on and after
December 31, 1994,
and prior |
| |||||||
| |||||||
1 | to December 31, 2011, shall mean the gross investment | ||||||
2 | income for the taxable year and, for tax years ending on or | ||||||
3 | after December 31, 2011, shall mean all amounts included in | ||||||
4 | life insurance gross income under Section 803(a)(3) of the | ||||||
5 | Internal Revenue Code.
| ||||||
6 | (c) Trusts and estates. | ||||||
7 | (1) In general. In the case of a trust or estate, base | ||||||
8 | income means
an amount equal to the taxpayer's taxable | ||||||
9 | income for the taxable year as
modified by paragraph (2). | ||||||
10 | (2) Modifications. Subject to the provisions of | ||||||
11 | paragraph (3), the
taxable income referred to in paragraph | ||||||
12 | (1) shall be modified by adding
thereto the sum of the | ||||||
13 | following amounts: | ||||||
14 | (A) An amount equal to all amounts paid or accrued | ||||||
15 | to the taxpayer
as interest or dividends during the | ||||||
16 | taxable year to the extent excluded
from gross income | ||||||
17 | in the computation of taxable income; | ||||||
18 | (B) In the case of (i) an estate, $600; (ii) a | ||||||
19 | trust which, under
its governing instrument, is | ||||||
20 | required to distribute all of its income
currently, | ||||||
21 | $300; and (iii) any other trust, $100, but in each such | ||||||
22 | case,
only to the extent such amount was deducted in | ||||||
23 | the computation of
taxable income; | ||||||
24 | (C) An amount equal to the amount of tax imposed by | ||||||
25 | this Act to the
extent deducted from gross income in |
| |||||||
| |||||||
1 | the computation of taxable income
for the taxable year; | ||||||
2 | (D) The amount of any net operating loss deduction | ||||||
3 | taken in arriving at
taxable income, other than a net | ||||||
4 | operating loss carried forward from a
taxable year | ||||||
5 | ending prior to December 31, 1986; | ||||||
6 | (E) For taxable years in which a net operating loss | ||||||
7 | carryback or
carryforward from a taxable year ending | ||||||
8 | prior to December 31, 1986 is an
element of taxable | ||||||
9 | income under paragraph (1) of subsection (e) or | ||||||
10 | subparagraph
(E) of paragraph (2) of subsection (e), | ||||||
11 | the amount by which addition
modifications other than | ||||||
12 | those provided by this subparagraph (E) exceeded
| ||||||
13 | subtraction modifications in such taxable year, with | ||||||
14 | the following limitations
applied in the order that | ||||||
15 | they are listed: | ||||||
16 | (i) the addition modification relating to the | ||||||
17 | net operating loss
carried back or forward to the | ||||||
18 | taxable year from any taxable year ending
prior to | ||||||
19 | December 31, 1986 shall be reduced by the amount of | ||||||
20 | addition
modification under this subparagraph (E) | ||||||
21 | which related to that net
operating loss and which | ||||||
22 | was taken into account in calculating the base
| ||||||
23 | income of an earlier taxable year, and | ||||||
24 | (ii) the addition modification relating to the | ||||||
25 | net operating loss
carried back or forward to the | ||||||
26 | taxable year from any taxable year ending
prior to |
| |||||||
| |||||||
1 | December 31, 1986 shall not exceed the amount of | ||||||
2 | such carryback or
carryforward; | ||||||
3 | For taxable years in which there is a net operating | ||||||
4 | loss carryback or
carryforward from more than one other | ||||||
5 | taxable year ending prior to December
31, 1986, the | ||||||
6 | addition modification provided in this subparagraph | ||||||
7 | (E) shall
be the sum of the amounts computed | ||||||
8 | independently under the preceding
provisions of this | ||||||
9 | subparagraph (E) for each such taxable year; | ||||||
10 | (F) For taxable years ending on or after January 1, | ||||||
11 | 1989, an amount
equal to the tax deducted pursuant to | ||||||
12 | Section 164 of the Internal Revenue
Code if the trust | ||||||
13 | or estate is claiming the same tax for purposes of the
| ||||||
14 | Illinois foreign tax credit under Section 601 of this | ||||||
15 | Act; | ||||||
16 | (G) An amount equal to the amount of the capital | ||||||
17 | gain deduction
allowable under the Internal Revenue | ||||||
18 | Code, to the extent deducted from
gross income in the | ||||||
19 | computation of taxable income; | ||||||
20 | (G-5) For taxable years ending after December 31, | ||||||
21 | 1997, an
amount equal to any eligible remediation costs | ||||||
22 | that the trust or estate
deducted in computing adjusted | ||||||
23 | gross income and for which the trust
or estate claims a | ||||||
24 | credit under subsection (l) of Section 201; | ||||||
25 | (G-10) For taxable years 2001 and thereafter, an | ||||||
26 | amount equal to the
bonus depreciation deduction taken |
| |||||||
| |||||||
1 | on the taxpayer's federal income tax return for the | ||||||
2 | taxable
year under subsection (k) of Section 168 of the | ||||||
3 | Internal Revenue Code; and | ||||||
4 | (G-11) If the taxpayer sells, transfers, abandons, | ||||||
5 | or otherwise disposes of property for which the | ||||||
6 | taxpayer was required in any taxable year to
make an | ||||||
7 | addition modification under subparagraph (G-10), then | ||||||
8 | an amount equal
to the aggregate amount of the | ||||||
9 | deductions taken in all taxable
years under | ||||||
10 | subparagraph (R) with respect to that property. | ||||||
11 | If the taxpayer continues to own property through | ||||||
12 | the last day of the last tax year for which the | ||||||
13 | taxpayer may claim a depreciation deduction for | ||||||
14 | federal income tax purposes and for which the taxpayer | ||||||
15 | was allowed in any taxable year to make a subtraction | ||||||
16 | modification under subparagraph (R), then an amount | ||||||
17 | equal to that subtraction modification.
| ||||||
18 | The taxpayer is required to make the addition | ||||||
19 | modification under this
subparagraph
only once with | ||||||
20 | respect to any one piece of property; | ||||||
21 | (G-12) An amount equal to the amount otherwise | ||||||
22 | allowed as a deduction in computing base income for | ||||||
23 | interest paid, accrued, or incurred, directly or | ||||||
24 | indirectly, (i) for taxable years ending on or after | ||||||
25 | December 31, 2004, to a foreign person who would be a | ||||||
26 | member of the same unitary business group but for the |
| |||||||
| |||||||
1 | fact that the foreign person's business activity | ||||||
2 | outside the United States is 80% or more of the foreign | ||||||
3 | person's total business activity and (ii) for taxable | ||||||
4 | years ending on or after December 31, 2008, to a person | ||||||
5 | who would be a member of the same unitary business | ||||||
6 | group but for the fact that the person is prohibited | ||||||
7 | under Section 1501(a)(27) from being included in the | ||||||
8 | unitary business group because he or she is ordinarily | ||||||
9 | required to apportion business income under different | ||||||
10 | subsections of Section 304. The addition modification | ||||||
11 | required by this subparagraph shall be reduced to the | ||||||
12 | extent that dividends were included in base income of | ||||||
13 | the unitary group for the same taxable year and | ||||||
14 | received by the taxpayer or by a member of the | ||||||
15 | taxpayer's unitary business group (including amounts | ||||||
16 | included in gross income pursuant to Sections 951 | ||||||
17 | through 964 of the Internal Revenue Code and amounts | ||||||
18 | included in gross income under Section 78 of the | ||||||
19 | Internal Revenue Code) with respect to the stock of the | ||||||
20 | same person to whom the interest was paid, accrued, or | ||||||
21 | incurred.
| ||||||
22 | This paragraph shall not apply to the following:
| ||||||
23 | (i) an item of interest paid, accrued, or | ||||||
24 | incurred, directly or indirectly, to a person who | ||||||
25 | is subject in a foreign country or state, other | ||||||
26 | than a state which requires mandatory unitary |
| |||||||
| |||||||
1 | reporting, to a tax on or measured by net income | ||||||
2 | with respect to such interest; or | ||||||
3 | (ii) an item of interest paid, accrued, or | ||||||
4 | incurred, directly or indirectly, to a person if | ||||||
5 | the taxpayer can establish, based on a | ||||||
6 | preponderance of the evidence, both of the | ||||||
7 | following: | ||||||
8 | (a) the person, during the same taxable | ||||||
9 | year, paid, accrued, or incurred, the interest | ||||||
10 | to a person that is not a related member, and | ||||||
11 | (b) the transaction giving rise to the | ||||||
12 | interest expense between the taxpayer and the | ||||||
13 | person did not have as a principal purpose the | ||||||
14 | avoidance of Illinois income tax, and is paid | ||||||
15 | pursuant to a contract or agreement that | ||||||
16 | reflects an arm's-length interest rate and | ||||||
17 | terms; or
| ||||||
18 | (iii) the taxpayer can establish, based on | ||||||
19 | clear and convincing evidence, that the interest | ||||||
20 | paid, accrued, or incurred relates to a contract or | ||||||
21 | agreement entered into at arm's-length rates and | ||||||
22 | terms and the principal purpose for the payment is | ||||||
23 | not federal or Illinois tax avoidance; or
| ||||||
24 | (iv) an item of interest paid, accrued, or | ||||||
25 | incurred, directly or indirectly, to a person if | ||||||
26 | the taxpayer establishes by clear and convincing |
| |||||||
| |||||||
1 | evidence that the adjustments are unreasonable; or | ||||||
2 | if the taxpayer and the Director agree in writing | ||||||
3 | to the application or use of an alternative method | ||||||
4 | of apportionment under Section 304(f).
| ||||||
5 | Nothing in this subsection shall preclude the | ||||||
6 | Director from making any other adjustment | ||||||
7 | otherwise allowed under Section 404 of this Act for | ||||||
8 | any tax year beginning after the effective date of | ||||||
9 | this amendment provided such adjustment is made | ||||||
10 | pursuant to regulation adopted by the Department | ||||||
11 | and such regulations provide methods and standards | ||||||
12 | by which the Department will utilize its authority | ||||||
13 | under Section 404 of this Act;
| ||||||
14 | (G-13) An amount equal to the amount of intangible | ||||||
15 | expenses and costs otherwise allowed as a deduction in | ||||||
16 | computing base income, and that were paid, accrued, or | ||||||
17 | incurred, directly or indirectly, (i) for taxable | ||||||
18 | years ending on or after December 31, 2004, to a | ||||||
19 | foreign person who would be a member of the same | ||||||
20 | unitary business group but for the fact that the | ||||||
21 | foreign person's business activity outside the United | ||||||
22 | States is 80% or more of that person's total business | ||||||
23 | activity and (ii) for taxable years ending on or after | ||||||
24 | December 31, 2008, to a person who would be a member of | ||||||
25 | the same unitary business group but for the fact that | ||||||
26 | the person is prohibited under Section 1501(a)(27) |
| |||||||
| |||||||
1 | from being included in the unitary business group | ||||||
2 | because he or she is ordinarily required to apportion | ||||||
3 | business income under different subsections of Section | ||||||
4 | 304. The addition modification required by this | ||||||
5 | subparagraph shall be reduced to the extent that | ||||||
6 | dividends were included in base income of the unitary | ||||||
7 | group for the same taxable year and received by the | ||||||
8 | taxpayer or by a member of the taxpayer's unitary | ||||||
9 | business group (including amounts included in gross | ||||||
10 | income pursuant to Sections 951 through 964 of the | ||||||
11 | Internal Revenue Code and amounts included in gross | ||||||
12 | income under Section 78 of the Internal Revenue Code) | ||||||
13 | with respect to the stock of the same person to whom | ||||||
14 | the intangible expenses and costs were directly or | ||||||
15 | indirectly paid, incurred, or accrued. The preceding | ||||||
16 | sentence shall not apply to the extent that the same | ||||||
17 | dividends caused a reduction to the addition | ||||||
18 | modification required under Section 203(c)(2)(G-12) of | ||||||
19 | this Act. As used in this subparagraph, the term | ||||||
20 | "intangible expenses and costs" includes: (1) | ||||||
21 | expenses, losses, and costs for or related to the | ||||||
22 | direct or indirect acquisition, use, maintenance or | ||||||
23 | management, ownership, sale, exchange, or any other | ||||||
24 | disposition of intangible property; (2) losses | ||||||
25 | incurred, directly or indirectly, from factoring | ||||||
26 | transactions or discounting transactions; (3) royalty, |
| |||||||
| |||||||
1 | patent, technical, and copyright fees; (4) licensing | ||||||
2 | fees; and (5) other similar expenses and costs. For | ||||||
3 | purposes of this subparagraph, "intangible property" | ||||||
4 | includes patents, patent applications, trade names, | ||||||
5 | trademarks, service marks, copyrights, mask works, | ||||||
6 | trade secrets, and similar types of intangible assets. | ||||||
7 | This paragraph shall not apply to the following: | ||||||
8 | (i) any item of intangible expenses or costs | ||||||
9 | paid, accrued, or incurred, directly or | ||||||
10 | indirectly, from a transaction with a person who is | ||||||
11 | subject in a foreign country or state, other than a | ||||||
12 | state which requires mandatory unitary reporting, | ||||||
13 | to a tax on or measured by net income with respect | ||||||
14 | to such item; or | ||||||
15 | (ii) any item of intangible expense or cost | ||||||
16 | paid, accrued, or incurred, directly or | ||||||
17 | indirectly, if the taxpayer can establish, based | ||||||
18 | on a preponderance of the evidence, both of the | ||||||
19 | following: | ||||||
20 | (a) the person during the same taxable | ||||||
21 | year paid, accrued, or incurred, the | ||||||
22 | intangible expense or cost to a person that is | ||||||
23 | not a related member, and | ||||||
24 | (b) the transaction giving rise to the | ||||||
25 | intangible expense or cost between the | ||||||
26 | taxpayer and the person did not have as a |
| |||||||
| |||||||
1 | principal purpose the avoidance of Illinois | ||||||
2 | income tax, and is paid pursuant to a contract | ||||||
3 | or agreement that reflects arm's-length terms; | ||||||
4 | or | ||||||
5 | (iii) any item of intangible expense or cost | ||||||
6 | paid, accrued, or incurred, directly or | ||||||
7 | indirectly, from a transaction with a person if the | ||||||
8 | taxpayer establishes by clear and convincing | ||||||
9 | evidence, that the adjustments are unreasonable; | ||||||
10 | or if the taxpayer and the Director agree in | ||||||
11 | writing to the application or use of an alternative | ||||||
12 | method of apportionment under Section 304(f);
| ||||||
13 | Nothing in this subsection shall preclude the | ||||||
14 | Director from making any other adjustment | ||||||
15 | otherwise allowed under Section 404 of this Act for | ||||||
16 | any tax year beginning after the effective date of | ||||||
17 | this amendment provided such adjustment is made | ||||||
18 | pursuant to regulation adopted by the Department | ||||||
19 | and such regulations provide methods and standards | ||||||
20 | by which the Department will utilize its authority | ||||||
21 | under Section 404 of this Act;
| ||||||
22 | (G-14) For taxable years ending on or after | ||||||
23 | December 31, 2008, an amount equal to the amount of | ||||||
24 | insurance premium expenses and costs otherwise allowed | ||||||
25 | as a deduction in computing base income, and that were | ||||||
26 | paid, accrued, or incurred, directly or indirectly, to |
| |||||||
| |||||||
1 | a person who would be a member of the same unitary | ||||||
2 | business group but for the fact that the person is | ||||||
3 | prohibited under Section 1501(a)(27) from being | ||||||
4 | included in the unitary business group because he or | ||||||
5 | she is ordinarily required to apportion business | ||||||
6 | income under different subsections of Section 304. The | ||||||
7 | addition modification required by this subparagraph | ||||||
8 | shall be reduced to the extent that dividends were | ||||||
9 | included in base income of the unitary group for the | ||||||
10 | same taxable year and received by the taxpayer or by a | ||||||
11 | member of the taxpayer's unitary business group | ||||||
12 | (including amounts included in gross income under | ||||||
13 | Sections 951 through 964 of the Internal Revenue Code | ||||||
14 | and amounts included in gross income under Section 78 | ||||||
15 | of the Internal Revenue Code) with respect to the stock | ||||||
16 | of the same person to whom the premiums and costs were | ||||||
17 | directly or indirectly paid, incurred, or accrued. The | ||||||
18 | preceding sentence does not apply to the extent that | ||||||
19 | the same dividends caused a reduction to the addition | ||||||
20 | modification required under Section 203(c)(2)(G-12) or | ||||||
21 | Section 203(c)(2)(G-13) of this Act; | ||||||
22 | (G-15) An amount equal to the credit allowable to | ||||||
23 | the taxpayer under Section 218(a) of this Act, | ||||||
24 | determined without regard to Section 218(c) of this | ||||||
25 | Act; | ||||||
26 | and by deducting from the total so obtained the sum of the |
| |||||||
| |||||||
1 | following
amounts: | ||||||
2 | (H) An amount equal to all amounts included in such | ||||||
3 | total pursuant
to the provisions of Sections 402(a), | ||||||
4 | 402(c), 403(a), 403(b), 406(a), 407(a)
and 408 of the | ||||||
5 | Internal Revenue Code or included in such total as
| ||||||
6 | distributions under the provisions of any retirement | ||||||
7 | or disability plan for
employees of any governmental | ||||||
8 | agency or unit, or retirement payments to
retired | ||||||
9 | partners, which payments are excluded in computing net | ||||||
10 | earnings
from self employment by Section 1402 of the | ||||||
11 | Internal Revenue Code and
regulations adopted pursuant | ||||||
12 | thereto; | ||||||
13 | (I) The valuation limitation amount; | ||||||
14 | (J) An amount equal to the amount of any tax | ||||||
15 | imposed by this Act
which was refunded to the taxpayer | ||||||
16 | and included in such total for the
taxable year; | ||||||
17 | (K) An amount equal to all amounts included in | ||||||
18 | taxable income as
modified by subparagraphs (A), (B), | ||||||
19 | (C), (D), (E), (F) and (G) which
are exempt from | ||||||
20 | taxation by this State either by reason of its statutes | ||||||
21 | or
Constitution
or by reason of the Constitution, | ||||||
22 | treaties or statutes of the United States;
provided | ||||||
23 | that, in the case of any statute of this State that | ||||||
24 | exempts income
derived from bonds or other obligations | ||||||
25 | from the tax imposed under this Act,
the amount | ||||||
26 | exempted shall be the interest net of bond premium |
| |||||||
| |||||||
1 | amortization; | ||||||
2 | (L) With the exception of any amounts subtracted | ||||||
3 | under subparagraph
(K),
an amount equal to the sum of | ||||||
4 | all amounts disallowed as
deductions by (i) Sections | ||||||
5 | 171(a) (2) and 265(a)(2) of the Internal Revenue
Code, | ||||||
6 | and all amounts of expenses allocable
to interest and | ||||||
7 | disallowed as deductions by Section 265(1) of the | ||||||
8 | Internal
Revenue Code;
and (ii) for taxable years
| ||||||
9 | ending on or after August 13, 1999, Sections
171(a)(2), | ||||||
10 | 265,
280C, and 832(b)(5)(B)(i) of the Internal Revenue | ||||||
11 | Code, plus, (iii) for taxable years ending on or after | ||||||
12 | December 31, 2011, Section 45G(e)(3) of the Internal | ||||||
13 | Revenue Code and, for taxable years ending on or after | ||||||
14 | December 31, 2008, any amount included in gross income | ||||||
15 | under Section 87 of the Internal Revenue Code; the | ||||||
16 | provisions of this
subparagraph are exempt from the | ||||||
17 | provisions of Section 250; | ||||||
18 | (M) An amount equal to those dividends included in | ||||||
19 | such total
which were paid by a corporation which | ||||||
20 | conducts business operations in a River Edge | ||||||
21 | Redevelopment Zone or zones created under the River | ||||||
22 | Edge Redevelopment Zone Act and
conducts substantially | ||||||
23 | all of its operations in a River Edge Redevelopment | ||||||
24 | Zone or zones. This subparagraph (M) is exempt from the | ||||||
25 | provisions of Section 250; | ||||||
26 | (N) An amount equal to any contribution made to a |
| |||||||
| |||||||
1 | job training
project established pursuant to the Tax | ||||||
2 | Increment Allocation
Redevelopment Act; | ||||||
3 | (O) An amount equal to those dividends included in | ||||||
4 | such total
that were paid by a corporation that | ||||||
5 | conducts business operations in a
federally designated | ||||||
6 | Foreign Trade Zone or Sub-Zone and that is designated
a | ||||||
7 | High Impact Business located in Illinois; provided | ||||||
8 | that dividends eligible
for the deduction provided in | ||||||
9 | subparagraph (M) of paragraph (2) of this
subsection | ||||||
10 | shall not be eligible for the deduction provided under | ||||||
11 | this
subparagraph (O); | ||||||
12 | (P) An amount equal to the amount of the deduction | ||||||
13 | used to compute the
federal income tax credit for | ||||||
14 | restoration of substantial amounts held under
claim of | ||||||
15 | right for the taxable year pursuant to Section 1341 of | ||||||
16 | the
Internal Revenue Code; | ||||||
17 | (Q) For taxable year 1999 and thereafter, an amount | ||||||
18 | equal to the
amount of any
(i) distributions, to the | ||||||
19 | extent includible in gross income for
federal income | ||||||
20 | tax purposes, made to the taxpayer because of
his or | ||||||
21 | her status as a victim of
persecution for racial or | ||||||
22 | religious reasons by Nazi Germany or any other Axis
| ||||||
23 | regime or as an heir of the victim and (ii) items
of | ||||||
24 | income, to the extent
includible in gross income for | ||||||
25 | federal income tax purposes, attributable to,
derived | ||||||
26 | from or in any way related to assets stolen from, |
| |||||||
| |||||||
1 | hidden from, or
otherwise lost to a victim of
| ||||||
2 | persecution for racial or religious reasons by Nazi
| ||||||
3 | Germany or any other Axis regime
immediately prior to, | ||||||
4 | during, and immediately after World War II, including,
| ||||||
5 | but
not limited to, interest on the proceeds receivable | ||||||
6 | as insurance
under policies issued to a victim of | ||||||
7 | persecution for racial or religious
reasons by Nazi | ||||||
8 | Germany or any other Axis regime by European insurance
| ||||||
9 | companies
immediately prior to and during World War II;
| ||||||
10 | provided, however, this subtraction from federal | ||||||
11 | adjusted gross income does not
apply to assets acquired | ||||||
12 | with such assets or with the proceeds from the sale of
| ||||||
13 | such assets; provided, further, this paragraph shall | ||||||
14 | only apply to a taxpayer
who was the first recipient of | ||||||
15 | such assets after their recovery and who is a
victim of
| ||||||
16 | persecution for racial or religious reasons
by Nazi | ||||||
17 | Germany or any other Axis regime or as an heir of the | ||||||
18 | victim. The
amount of and the eligibility for any | ||||||
19 | public assistance, benefit, or
similar entitlement is | ||||||
20 | not affected by the inclusion of items (i) and (ii) of
| ||||||
21 | this paragraph in gross income for federal income tax | ||||||
22 | purposes.
This paragraph is exempt from the provisions | ||||||
23 | of Section 250; | ||||||
24 | (R) For taxable years 2001 and thereafter, for the | ||||||
25 | taxable year in
which the bonus depreciation deduction
| ||||||
26 | is taken on the taxpayer's federal income tax return |
| |||||||
| |||||||
1 | under
subsection (k) of Section 168 of the Internal | ||||||
2 | Revenue Code and for each
applicable taxable year | ||||||
3 | thereafter, an amount equal to "x", where: | ||||||
4 | (1) "y" equals the amount of the depreciation | ||||||
5 | deduction taken for the
taxable year
on the | ||||||
6 | taxpayer's federal income tax return on property | ||||||
7 | for which the bonus
depreciation deduction
was | ||||||
8 | taken in any year under subsection (k) of Section | ||||||
9 | 168 of the Internal
Revenue Code, but not including | ||||||
10 | the bonus depreciation deduction; | ||||||
11 | (2) for taxable years ending on or before | ||||||
12 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
13 | and then divided by 70 (or "y"
multiplied by | ||||||
14 | 0.429); and | ||||||
15 | (3) for taxable years ending after December | ||||||
16 | 31, 2005: | ||||||
17 | (i) for property on which a bonus | ||||||
18 | depreciation deduction of 30% of the adjusted | ||||||
19 | basis was taken, "x" equals "y" multiplied by | ||||||
20 | 30 and then divided by 70 (or "y"
multiplied by | ||||||
21 | 0.429); and | ||||||
22 | (ii) for property on which a bonus | ||||||
23 | depreciation deduction of 50% of the adjusted | ||||||
24 | basis was taken, "x" equals "y" multiplied by | ||||||
25 | 1.0. | ||||||
26 | The aggregate amount deducted under this |
| |||||||
| |||||||
1 | subparagraph in all taxable
years for any one piece of | ||||||
2 | property may not exceed the amount of the bonus
| ||||||
3 | depreciation deduction
taken on that property on the | ||||||
4 | taxpayer's federal income tax return under
subsection | ||||||
5 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
6 | subparagraph (R) is exempt from the provisions of | ||||||
7 | Section 250; | ||||||
8 | (S) If the taxpayer sells, transfers, abandons, or | ||||||
9 | otherwise disposes of
property for which the taxpayer | ||||||
10 | was required in any taxable year to make an
addition | ||||||
11 | modification under subparagraph (G-10), then an amount | ||||||
12 | equal to that
addition modification. | ||||||
13 | If the taxpayer continues to own property through | ||||||
14 | the last day of the last tax year for which the | ||||||
15 | taxpayer may claim a depreciation deduction for | ||||||
16 | federal income tax purposes and for which the taxpayer | ||||||
17 | was required in any taxable year to make an addition | ||||||
18 | modification under subparagraph (G-10), then an amount | ||||||
19 | equal to that addition modification.
| ||||||
20 | The taxpayer is allowed to take the deduction under | ||||||
21 | this subparagraph
only once with respect to any one | ||||||
22 | piece of property. | ||||||
23 | This subparagraph (S) is exempt from the | ||||||
24 | provisions of Section 250; | ||||||
25 | (T) The amount of (i) any interest income (net of | ||||||
26 | the deductions allocable thereto) taken into account |
| |||||||
| |||||||
1 | for the taxable year with respect to a transaction with | ||||||
2 | a taxpayer that is required to make an addition | ||||||
3 | modification with respect to such transaction under | ||||||
4 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
5 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
6 | the amount of such addition modification and
(ii) any | ||||||
7 | income from intangible property (net of the deductions | ||||||
8 | allocable thereto) taken into account for the taxable | ||||||
9 | year with respect to a transaction with a taxpayer that | ||||||
10 | is required to make an addition modification with | ||||||
11 | respect to such transaction under Section | ||||||
12 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
13 | 203(d)(2)(D-8), but not to exceed the amount of such | ||||||
14 | addition modification. This subparagraph (T) is exempt | ||||||
15 | from the provisions of Section 250;
| ||||||
16 | (U) An amount equal to the interest income taken | ||||||
17 | into account for the taxable year (net of the | ||||||
18 | deductions allocable thereto) with respect to | ||||||
19 | transactions with (i) a foreign person who would be a | ||||||
20 | member of the taxpayer's unitary business group but for | ||||||
21 | the fact the foreign person's business activity | ||||||
22 | outside the United States is 80% or more of that | ||||||
23 | person's total business activity and (ii) for taxable | ||||||
24 | years ending on or after December 31, 2008, to a person | ||||||
25 | who would be a member of the same unitary business | ||||||
26 | group but for the fact that the person is prohibited |
| |||||||
| |||||||
1 | under Section 1501(a)(27) from being included in the | ||||||
2 | unitary business group because he or she is ordinarily | ||||||
3 | required to apportion business income under different | ||||||
4 | subsections of Section 304, but not to exceed the | ||||||
5 | addition modification required to be made for the same | ||||||
6 | taxable year under Section 203(c)(2)(G-12) for | ||||||
7 | interest paid, accrued, or incurred, directly or | ||||||
8 | indirectly, to the same person. This subparagraph (U) | ||||||
9 | is exempt from the provisions of Section 250; | ||||||
10 | (V) An amount equal to the income from intangible | ||||||
11 | property taken into account for the taxable year (net | ||||||
12 | of the deductions allocable thereto) with respect to | ||||||
13 | transactions with (i) a foreign person who would be a | ||||||
14 | member of the taxpayer's unitary business group but for | ||||||
15 | the fact that the foreign person's business activity | ||||||
16 | outside the United States is 80% or more of that | ||||||
17 | person's total business activity and (ii) for taxable | ||||||
18 | years ending on or after December 31, 2008, to a person | ||||||
19 | who would be a member of the same unitary business | ||||||
20 | group but for the fact that the person is prohibited | ||||||
21 | under Section 1501(a)(27) from being included in the | ||||||
22 | unitary business group because he or she is ordinarily | ||||||
23 | required to apportion business income under different | ||||||
24 | subsections of Section 304, but not to exceed the | ||||||
25 | addition modification required to be made for the same | ||||||
26 | taxable year under Section 203(c)(2)(G-13) for |
| |||||||
| |||||||
1 | intangible expenses and costs paid, accrued, or | ||||||
2 | incurred, directly or indirectly, to the same foreign | ||||||
3 | person. This subparagraph (V) is exempt from the | ||||||
4 | provisions of Section 250;
| ||||||
5 | (W) in the case of an estate, an amount equal to | ||||||
6 | all amounts included in such total pursuant to the | ||||||
7 | provisions of Section 111 of the Internal Revenue Code | ||||||
8 | as a recovery of items previously deducted by the | ||||||
9 | decedent from adjusted gross income in the computation | ||||||
10 | of taxable income. This subparagraph (W) is exempt from | ||||||
11 | Section 250; | ||||||
12 | (X) an amount equal to the refund included in such | ||||||
13 | total of any tax deducted for federal income tax | ||||||
14 | purposes, to the extent that deduction was added back | ||||||
15 | under subparagraph (F). This subparagraph (X) is | ||||||
16 | exempt from the provisions of Section 250; and | ||||||
17 | (Y) For taxable years ending on or after December | ||||||
18 | 31, 2011, in the case of a taxpayer who was required to | ||||||
19 | add back any insurance premiums under Section | ||||||
20 | 203(c)(2)(G-14), such taxpayer may elect to subtract | ||||||
21 | that part of a reimbursement received from the | ||||||
22 | insurance company equal to the amount of the expense or | ||||||
23 | loss (including expenses incurred by the insurance | ||||||
24 | company) that would have been taken into account as a | ||||||
25 | deduction for federal income tax purposes if the | ||||||
26 | expense or loss had been uninsured. If a taxpayer makes |
| |||||||
| |||||||
1 | the election provided for by this subparagraph (Y), the | ||||||
2 | insurer to which the premiums were paid must add back | ||||||
3 | to income the amount subtracted by the taxpayer | ||||||
4 | pursuant to this subparagraph (Y). This subparagraph | ||||||
5 | (Y) is exempt from the provisions of Section 250. | ||||||
6 | (3) Limitation. The amount of any modification | ||||||
7 | otherwise required
under this subsection shall, under | ||||||
8 | regulations prescribed by the
Department, be adjusted by | ||||||
9 | any amounts included therein which were
properly paid, | ||||||
10 | credited, or required to be distributed, or permanently set
| ||||||
11 | aside for charitable purposes pursuant to Internal Revenue | ||||||
12 | Code Section
642(c) during the taxable year.
| ||||||
13 | (d) Partnerships. | ||||||
14 | (1) In general. In the case of a partnership, base | ||||||
15 | income means an
amount equal to the taxpayer's taxable | ||||||
16 | income for the taxable year as
modified by paragraph (2). | ||||||
17 | (2) Modifications. The taxable income referred to in | ||||||
18 | paragraph (1)
shall be modified by adding thereto the sum | ||||||
19 | of the following amounts: | ||||||
20 | (A) An amount equal to all amounts paid or accrued | ||||||
21 | to the taxpayer as
interest or dividends during the | ||||||
22 | taxable year to the extent excluded from
gross income | ||||||
23 | in the computation of taxable income; | ||||||
24 | (B) An amount equal to the amount of tax imposed by | ||||||
25 | this Act to the
extent deducted from gross income for |
| |||||||
| |||||||
1 | the taxable year; | ||||||
2 | (C) The amount of deductions allowed to the | ||||||
3 | partnership pursuant to
Section 707 (c) of the Internal | ||||||
4 | Revenue Code in calculating its taxable income; | ||||||
5 | (D) An amount equal to the amount of the capital | ||||||
6 | gain deduction
allowable under the Internal Revenue | ||||||
7 | Code, to the extent deducted from
gross income in the | ||||||
8 | computation of taxable income; | ||||||
9 | (D-5) For taxable years 2001 and thereafter, an | ||||||
10 | amount equal to the
bonus depreciation deduction taken | ||||||
11 | on the taxpayer's federal income tax return for the | ||||||
12 | taxable
year under subsection (k) of Section 168 of the | ||||||
13 | Internal Revenue Code; | ||||||
14 | (D-6) If the taxpayer sells, transfers, abandons, | ||||||
15 | or otherwise disposes of
property for which the | ||||||
16 | taxpayer was required in any taxable year to make an
| ||||||
17 | addition modification under subparagraph (D-5), then | ||||||
18 | an amount equal to the
aggregate amount of the | ||||||
19 | deductions taken in all taxable years
under | ||||||
20 | subparagraph (O) with respect to that property. | ||||||
21 | If the taxpayer continues to own property through | ||||||
22 | the last day of the last tax year for which the | ||||||
23 | taxpayer may claim a depreciation deduction for | ||||||
24 | federal income tax purposes and for which the taxpayer | ||||||
25 | was allowed in any taxable year to make a subtraction | ||||||
26 | modification under subparagraph (O), then an amount |
| |||||||
| |||||||
1 | equal to that subtraction modification.
| ||||||
2 | The taxpayer is required to make the addition | ||||||
3 | modification under this
subparagraph
only once with | ||||||
4 | respect to any one piece of property; | ||||||
5 | (D-7) An amount equal to the amount otherwise | ||||||
6 | allowed as a deduction in computing base income for | ||||||
7 | interest paid, accrued, or incurred, directly or | ||||||
8 | indirectly, (i) for taxable years ending on or after | ||||||
9 | December 31, 2004, to a foreign person who would be a | ||||||
10 | member of the same unitary business group but for the | ||||||
11 | fact the foreign person's business activity outside | ||||||
12 | the United States is 80% or more of the foreign | ||||||
13 | person's total business activity and (ii) for taxable | ||||||
14 | years ending on or after December 31, 2008, to a person | ||||||
15 | who would be a member of the same unitary business | ||||||
16 | group but for the fact that the person is prohibited | ||||||
17 | under Section 1501(a)(27) from being included in the | ||||||
18 | unitary business group because he or she is ordinarily | ||||||
19 | required to apportion business income under different | ||||||
20 | subsections of Section 304. The addition modification | ||||||
21 | required by this subparagraph shall be reduced to the | ||||||
22 | extent that dividends were included in base income of | ||||||
23 | the unitary group for the same taxable year and | ||||||
24 | received by the taxpayer or by a member of the | ||||||
25 | taxpayer's unitary business group (including amounts | ||||||
26 | included in gross income pursuant to Sections 951 |
| |||||||
| |||||||
1 | through 964 of the Internal Revenue Code and amounts | ||||||
2 | included in gross income under Section 78 of the | ||||||
3 | Internal Revenue Code) with respect to the stock of the | ||||||
4 | same person to whom the interest was paid, accrued, or | ||||||
5 | incurred.
| ||||||
6 | This paragraph shall not apply to the following:
| ||||||
7 | (i) an item of interest paid, accrued, or | ||||||
8 | incurred, directly or indirectly, to a person who | ||||||
9 | is subject in a foreign country or state, other | ||||||
10 | than a state which requires mandatory unitary | ||||||
11 | reporting, to a tax on or measured by net income | ||||||
12 | with respect to such interest; or | ||||||
13 | (ii) an item of interest paid, accrued, or | ||||||
14 | incurred, directly or indirectly, to a person if | ||||||
15 | the taxpayer can establish, based on a | ||||||
16 | preponderance of the evidence, both of the | ||||||
17 | following: | ||||||
18 | (a) the person, during the same taxable | ||||||
19 | year, paid, accrued, or incurred, the interest | ||||||
20 | to a person that is not a related member, and | ||||||
21 | (b) the transaction giving rise to the | ||||||
22 | interest expense between the taxpayer and the | ||||||
23 | person did not have as a principal purpose the | ||||||
24 | avoidance of Illinois income tax, and is paid | ||||||
25 | pursuant to a contract or agreement that | ||||||
26 | reflects an arm's-length interest rate and |
| |||||||
| |||||||
1 | terms; or
| ||||||
2 | (iii) the taxpayer can establish, based on | ||||||
3 | clear and convincing evidence, that the interest | ||||||
4 | paid, accrued, or incurred relates to a contract or | ||||||
5 | agreement entered into at arm's-length rates and | ||||||
6 | terms and the principal purpose for the payment is | ||||||
7 | not federal or Illinois tax avoidance; or
| ||||||
8 | (iv) an item of interest paid, accrued, or | ||||||
9 | incurred, directly or indirectly, to a person if | ||||||
10 | the taxpayer establishes by clear and convincing | ||||||
11 | evidence that the adjustments are unreasonable; or | ||||||
12 | if the taxpayer and the Director agree in writing | ||||||
13 | to the application or use of an alternative method | ||||||
14 | of apportionment under Section 304(f).
| ||||||
15 | Nothing in this subsection shall preclude the | ||||||
16 | Director from making any other adjustment | ||||||
17 | otherwise allowed under Section 404 of this Act for | ||||||
18 | any tax year beginning after the effective date of | ||||||
19 | this amendment provided such adjustment is made | ||||||
20 | pursuant to regulation adopted by the Department | ||||||
21 | and such regulations provide methods and standards | ||||||
22 | by which the Department will utilize its authority | ||||||
23 | under Section 404 of this Act; and
| ||||||
24 | (D-8) An amount equal to the amount of intangible | ||||||
25 | expenses and costs otherwise allowed as a deduction in | ||||||
26 | computing base income, and that were paid, accrued, or |
| |||||||
| |||||||
1 | incurred, directly or indirectly, (i) for taxable | ||||||
2 | years ending on or after December 31, 2004, to a | ||||||
3 | foreign person who would be a member of the same | ||||||
4 | unitary business group but for the fact that the | ||||||
5 | foreign person's business activity outside the United | ||||||
6 | States is 80% or more of that person's total business | ||||||
7 | activity and (ii) for taxable years ending on or after | ||||||
8 | December 31, 2008, to a person who would be a member of | ||||||
9 | the same unitary business group but for the fact that | ||||||
10 | the person is prohibited under Section 1501(a)(27) | ||||||
11 | from being included in the unitary business group | ||||||
12 | because he or she is ordinarily required to apportion | ||||||
13 | business income under different subsections of Section | ||||||
14 | 304. The addition modification required by this | ||||||
15 | subparagraph shall be reduced to the extent that | ||||||
16 | dividends were included in base income of the unitary | ||||||
17 | group for the same taxable year and received by the | ||||||
18 | taxpayer or by a member of the taxpayer's unitary | ||||||
19 | business group (including amounts included in gross | ||||||
20 | income pursuant to Sections 951 through 964 of the | ||||||
21 | Internal Revenue Code and amounts included in gross | ||||||
22 | income under Section 78 of the Internal Revenue Code) | ||||||
23 | with respect to the stock of the same person to whom | ||||||
24 | the intangible expenses and costs were directly or | ||||||
25 | indirectly paid, incurred or accrued. The preceding | ||||||
26 | sentence shall not apply to the extent that the same |
| |||||||
| |||||||
1 | dividends caused a reduction to the addition | ||||||
2 | modification required under Section 203(d)(2)(D-7) of | ||||||
3 | this Act. As used in this subparagraph, the term | ||||||
4 | "intangible expenses and costs" includes (1) expenses, | ||||||
5 | losses, and costs for, or related to, the direct or | ||||||
6 | indirect acquisition, use, maintenance or management, | ||||||
7 | ownership, sale, exchange, or any other disposition of | ||||||
8 | intangible property; (2) losses incurred, directly or | ||||||
9 | indirectly, from factoring transactions or discounting | ||||||
10 | transactions; (3) royalty, patent, technical, and | ||||||
11 | copyright fees; (4) licensing fees; and (5) other | ||||||
12 | similar expenses and costs. For purposes of this | ||||||
13 | subparagraph, "intangible property" includes patents, | ||||||
14 | patent applications, trade names, trademarks, service | ||||||
15 | marks, copyrights, mask works, trade secrets, and | ||||||
16 | similar types of intangible assets; | ||||||
17 | This paragraph shall not apply to the following: | ||||||
18 | (i) any item of intangible expenses or costs | ||||||
19 | paid, accrued, or incurred, directly or | ||||||
20 | indirectly, from a transaction with a person who is | ||||||
21 | subject in a foreign country or state, other than a | ||||||
22 | state which requires mandatory unitary reporting, | ||||||
23 | to a tax on or measured by net income with respect | ||||||
24 | to such item; or | ||||||
25 | (ii) any item of intangible expense or cost | ||||||
26 | paid, accrued, or incurred, directly or |
| |||||||
| |||||||
1 | indirectly, if the taxpayer can establish, based | ||||||
2 | on a preponderance of the evidence, both of the | ||||||
3 | following: | ||||||
4 | (a) the person during the same taxable | ||||||
5 | year paid, accrued, or incurred, the | ||||||
6 | intangible expense or cost to a person that is | ||||||
7 | not a related member, and | ||||||
8 | (b) the transaction giving rise to the | ||||||
9 | intangible expense or cost between the | ||||||
10 | taxpayer and the person did not have as a | ||||||
11 | principal purpose the avoidance of Illinois | ||||||
12 | income tax, and is paid pursuant to a contract | ||||||
13 | or agreement that reflects arm's-length terms; | ||||||
14 | or | ||||||
15 | (iii) any item of intangible expense or cost | ||||||
16 | paid, accrued, or incurred, directly or | ||||||
17 | indirectly, from a transaction with a person if the | ||||||
18 | taxpayer establishes by clear and convincing | ||||||
19 | evidence, that the adjustments are unreasonable; | ||||||
20 | or if the taxpayer and the Director agree in | ||||||
21 | writing to the application or use of an alternative | ||||||
22 | method of apportionment under Section 304(f);
| ||||||
23 | Nothing in this subsection shall preclude the | ||||||
24 | Director from making any other adjustment | ||||||
25 | otherwise allowed under Section 404 of this Act for | ||||||
26 | any tax year beginning after the effective date of |
| |||||||
| |||||||
1 | this amendment provided such adjustment is made | ||||||
2 | pursuant to regulation adopted by the Department | ||||||
3 | and such regulations provide methods and standards | ||||||
4 | by which the Department will utilize its authority | ||||||
5 | under Section 404 of this Act;
| ||||||
6 | (D-9) For taxable years ending on or after December | ||||||
7 | 31, 2008, an amount equal to the amount of insurance | ||||||
8 | premium expenses and costs otherwise allowed as a | ||||||
9 | deduction in computing base income, and that were paid, | ||||||
10 | accrued, or incurred, directly or indirectly, to a | ||||||
11 | person who would be a member of the same unitary | ||||||
12 | business group but for the fact that the person is | ||||||
13 | prohibited under Section 1501(a)(27) from being | ||||||
14 | included in the unitary business group because he or | ||||||
15 | she is ordinarily required to apportion business | ||||||
16 | income under different subsections of Section 304. The | ||||||
17 | addition modification required by this subparagraph | ||||||
18 | shall be reduced to the extent that dividends were | ||||||
19 | included in base income of the unitary group for the | ||||||
20 | same taxable year and received by the taxpayer or by a | ||||||
21 | member of the taxpayer's unitary business group | ||||||
22 | (including amounts included in gross income under | ||||||
23 | Sections 951 through 964 of the Internal Revenue Code | ||||||
24 | and amounts included in gross income under Section 78 | ||||||
25 | of the Internal Revenue Code) with respect to the stock | ||||||
26 | of the same person to whom the premiums and costs were |
| |||||||
| |||||||
1 | directly or indirectly paid, incurred, or accrued. The | ||||||
2 | preceding sentence does not apply to the extent that | ||||||
3 | the same dividends caused a reduction to the addition | ||||||
4 | modification required under Section 203(d)(2)(D-7) or | ||||||
5 | Section 203(d)(2)(D-8) of this Act; | ||||||
6 | (D-10) An amount equal to the credit allowable to | ||||||
7 | the taxpayer under Section 218(a) of this Act, | ||||||
8 | determined without regard to Section 218(c) of this | ||||||
9 | Act; | ||||||
10 | and by deducting from the total so obtained the following | ||||||
11 | amounts: | ||||||
12 | (E) The valuation limitation amount; | ||||||
13 | (F) An amount equal to the amount of any tax | ||||||
14 | imposed by this Act which
was refunded to the taxpayer | ||||||
15 | and included in such total for the taxable year; | ||||||
16 | (G) An amount equal to all amounts included in | ||||||
17 | taxable income as
modified by subparagraphs (A), (B), | ||||||
18 | (C) and (D) which are exempt from
taxation by this | ||||||
19 | State either by reason of its statutes or Constitution | ||||||
20 | or
by reason of
the Constitution, treaties or statutes | ||||||
21 | of the United States;
provided that, in the case of any | ||||||
22 | statute of this State that exempts income
derived from | ||||||
23 | bonds or other obligations from the tax imposed under | ||||||
24 | this Act,
the amount exempted shall be the interest net | ||||||
25 | of bond premium amortization; | ||||||
26 | (H) Any income of the partnership which |
| |||||||
| |||||||
1 | constitutes personal service
income as defined in | ||||||
2 | Section 1348 (b) (1) of the Internal Revenue Code (as
| ||||||
3 | in effect December 31, 1981) or a reasonable allowance | ||||||
4 | for compensation
paid or accrued for services rendered | ||||||
5 | by partners to the partnership,
whichever is greater; | ||||||
6 | this subparagraph (H) is exempt from the provisions of | ||||||
7 | Section 250; | ||||||
8 | (I) An amount equal to all amounts of income | ||||||
9 | distributable to an entity
subject to the Personal | ||||||
10 | Property Tax Replacement Income Tax imposed by
| ||||||
11 | subsections (c) and (d) of Section 201 of this Act | ||||||
12 | including amounts
distributable to organizations | ||||||
13 | exempt from federal income tax by reason of
Section | ||||||
14 | 501(a) of the Internal Revenue Code; this subparagraph | ||||||
15 | (I) is exempt from the provisions of Section 250; | ||||||
16 | (J) With the exception of any amounts subtracted | ||||||
17 | under subparagraph
(G),
an amount equal to the sum of | ||||||
18 | all amounts disallowed as deductions
by (i) Sections | ||||||
19 | 171(a) (2), and 265(2) of the Internal Revenue Code, | ||||||
20 | and all amounts of expenses allocable to
interest and | ||||||
21 | disallowed as deductions by Section 265(1) of the | ||||||
22 | Internal
Revenue Code;
and (ii) for taxable years
| ||||||
23 | ending on or after August 13, 1999, Sections
171(a)(2), | ||||||
24 | 265,
280C, and 832(b)(5)(B)(i) of the Internal Revenue | ||||||
25 | Code, plus, (iii) for taxable years ending on or after | ||||||
26 | December 31, 2011, Section 45G(e)(3) of the Internal |
| |||||||
| |||||||
1 | Revenue Code and, for taxable years ending on or after | ||||||
2 | December 31, 2008, any amount included in gross income | ||||||
3 | under Section 87 of the Internal Revenue Code; the | ||||||
4 | provisions of this
subparagraph are exempt from the | ||||||
5 | provisions of Section 250; | ||||||
6 | (K) An amount equal to those dividends included in | ||||||
7 | such total which were
paid by a corporation which | ||||||
8 | conducts business operations in a River Edge | ||||||
9 | Redevelopment Zone or zones created under the River | ||||||
10 | Edge Redevelopment Zone Act and
conducts substantially | ||||||
11 | all of its operations
from a River Edge Redevelopment | ||||||
12 | Zone or zones. This subparagraph (K) is exempt from the | ||||||
13 | provisions of Section 250; | ||||||
14 | (L) An amount equal to any contribution made to a | ||||||
15 | job training project
established pursuant to the Real | ||||||
16 | Property Tax Increment Allocation
Redevelopment Act; | ||||||
17 | (M) An amount equal to those dividends included in | ||||||
18 | such total
that were paid by a corporation that | ||||||
19 | conducts business operations in a
federally designated | ||||||
20 | Foreign Trade Zone or Sub-Zone and that is designated a
| ||||||
21 | High Impact Business located in Illinois; provided | ||||||
22 | that dividends eligible
for the deduction provided in | ||||||
23 | subparagraph (K) of paragraph (2) of this
subsection | ||||||
24 | shall not be eligible for the deduction provided under | ||||||
25 | this
subparagraph (M); | ||||||
26 | (N) An amount equal to the amount of the deduction |
| |||||||
| |||||||
1 | used to compute the
federal income tax credit for | ||||||
2 | restoration of substantial amounts held under
claim of | ||||||
3 | right for the taxable year pursuant to Section 1341 of | ||||||
4 | the
Internal Revenue Code; | ||||||
5 | (O) For taxable years 2001 and thereafter, for the | ||||||
6 | taxable year in
which the bonus depreciation deduction
| ||||||
7 | is taken on the taxpayer's federal income tax return | ||||||
8 | under
subsection (k) of Section 168 of the Internal | ||||||
9 | Revenue Code and for each
applicable taxable year | ||||||
10 | thereafter, an amount equal to "x", where: | ||||||
11 | (1) "y" equals the amount of the depreciation | ||||||
12 | deduction taken for the
taxable year
on the | ||||||
13 | taxpayer's federal income tax return on property | ||||||
14 | for which the bonus
depreciation deduction
was | ||||||
15 | taken in any year under subsection (k) of Section | ||||||
16 | 168 of the Internal
Revenue Code, but not including | ||||||
17 | the bonus depreciation deduction; | ||||||
18 | (2) for taxable years ending on or before | ||||||
19 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
20 | and then divided by 70 (or "y"
multiplied by | ||||||
21 | 0.429); and | ||||||
22 | (3) for taxable years ending after December | ||||||
23 | 31, 2005: | ||||||
24 | (i) for property on which a bonus | ||||||
25 | depreciation deduction of 30% of the adjusted | ||||||
26 | basis was taken, "x" equals "y" multiplied by |
| |||||||
| |||||||
1 | 30 and then divided by 70 (or "y"
multiplied by | ||||||
2 | 0.429); and | ||||||
3 | (ii) for property on which a bonus | ||||||
4 | depreciation deduction of 50% of the adjusted | ||||||
5 | basis was taken, "x" equals "y" multiplied by | ||||||
6 | 1.0. | ||||||
7 | The aggregate amount deducted under this | ||||||
8 | subparagraph in all taxable
years for any one piece of | ||||||
9 | property may not exceed the amount of the bonus
| ||||||
10 | depreciation deduction
taken on that property on the | ||||||
11 | taxpayer's federal income tax return under
subsection | ||||||
12 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
13 | subparagraph (O) is exempt from the provisions of | ||||||
14 | Section 250; | ||||||
15 | (P) If the taxpayer sells, transfers, abandons, or | ||||||
16 | otherwise disposes of
property for which the taxpayer | ||||||
17 | was required in any taxable year to make an
addition | ||||||
18 | modification under subparagraph (D-5), then an amount | ||||||
19 | equal to that
addition modification. | ||||||
20 | If the taxpayer continues to own property through | ||||||
21 | the last day of the last tax year for which the | ||||||
22 | taxpayer may claim a depreciation deduction for | ||||||
23 | federal income tax purposes and for which the taxpayer | ||||||
24 | was required in any taxable year to make an addition | ||||||
25 | modification under subparagraph (D-5), then an amount | ||||||
26 | equal to that addition modification.
|
| |||||||
| |||||||
1 | The taxpayer is allowed to take the deduction under | ||||||
2 | this subparagraph
only once with respect to any one | ||||||
3 | piece of property. | ||||||
4 | This subparagraph (P) is exempt from the | ||||||
5 | provisions of Section 250; | ||||||
6 | (Q) The amount of (i) any interest income (net of | ||||||
7 | the deductions allocable thereto) taken into account | ||||||
8 | for the taxable year with respect to a transaction with | ||||||
9 | a taxpayer that is required to make an addition | ||||||
10 | modification with respect to such transaction under | ||||||
11 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
12 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
13 | the amount of such addition modification and
(ii) any | ||||||
14 | income from intangible property (net of the deductions | ||||||
15 | allocable thereto) taken into account for the taxable | ||||||
16 | year with respect to a transaction with a taxpayer that | ||||||
17 | is required to make an addition modification with | ||||||
18 | respect to such transaction under Section | ||||||
19 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
20 | 203(d)(2)(D-8), but not to exceed the amount of such | ||||||
21 | addition modification. This subparagraph (Q) is exempt | ||||||
22 | from Section 250;
| ||||||
23 | (R) An amount equal to the interest income taken | ||||||
24 | into account for the taxable year (net of the | ||||||
25 | deductions allocable thereto) with respect to | ||||||
26 | transactions with (i) a foreign person who would be a |
| |||||||
| |||||||
1 | member of the taxpayer's unitary business group but for | ||||||
2 | the fact that the foreign person's business activity | ||||||
3 | outside the United States is 80% or more of that | ||||||
4 | person's total business activity and (ii) for taxable | ||||||
5 | years ending on or after December 31, 2008, to a person | ||||||
6 | who would be a member of the same unitary business | ||||||
7 | group but for the fact that the person is prohibited | ||||||
8 | under Section 1501(a)(27) from being included in the | ||||||
9 | unitary business group because he or she is ordinarily | ||||||
10 | required to apportion business income under different | ||||||
11 | subsections of Section 304, but not to exceed the | ||||||
12 | addition modification required to be made for the same | ||||||
13 | taxable year under Section 203(d)(2)(D-7) for interest | ||||||
14 | paid, accrued, or incurred, directly or indirectly, to | ||||||
15 | the same person. This subparagraph (R) is exempt from | ||||||
16 | Section 250; | ||||||
17 | (S) An amount equal to the income from intangible | ||||||
18 | property taken into account for the taxable year (net | ||||||
19 | of the deductions allocable thereto) with respect to | ||||||
20 | transactions with (i) a foreign person who would be a | ||||||
21 | member of the taxpayer's unitary business group but for | ||||||
22 | the fact that the foreign person's business activity | ||||||
23 | outside the United States is 80% or more of that | ||||||
24 | person's total business activity and (ii) for taxable | ||||||
25 | years ending on or after December 31, 2008, to a person | ||||||
26 | who would be a member of the same unitary business |
| |||||||
| |||||||
1 | group but for the fact that the person is prohibited | ||||||
2 | under Section 1501(a)(27) from being included in the | ||||||
3 | unitary business group because he or she is ordinarily | ||||||
4 | required to apportion business income under different | ||||||
5 | subsections of Section 304, but not to exceed the | ||||||
6 | addition modification required to be made for the same | ||||||
7 | taxable year under Section 203(d)(2)(D-8) for | ||||||
8 | intangible expenses and costs paid, accrued, or | ||||||
9 | incurred, directly or indirectly, to the same person. | ||||||
10 | This subparagraph (S) is exempt from Section 250; and
| ||||||
11 | (T) For taxable years ending on or after December | ||||||
12 | 31, 2011, in the case of a taxpayer who was required to | ||||||
13 | add back any insurance premiums under Section | ||||||
14 | 203(d)(2)(D-9), such taxpayer may elect to subtract | ||||||
15 | that part of a reimbursement received from the | ||||||
16 | insurance company equal to the amount of the expense or | ||||||
17 | loss (including expenses incurred by the insurance | ||||||
18 | company) that would have been taken into account as a | ||||||
19 | deduction for federal income tax purposes if the | ||||||
20 | expense or loss had been uninsured. If a taxpayer makes | ||||||
21 | the election provided for by this subparagraph (T), the | ||||||
22 | insurer to which the premiums were paid must add back | ||||||
23 | to income the amount subtracted by the taxpayer | ||||||
24 | pursuant to this subparagraph (T). This subparagraph | ||||||
25 | (T) is exempt from the provisions of Section 250.
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| |||||||
1 | (e) Gross income; adjusted gross income; taxable income. | ||||||
2 | (1) In general. Subject to the provisions of paragraph | ||||||
3 | (2) and
subsection (b) (3), for purposes of this Section | ||||||
4 | and Section 803(e), a
taxpayer's gross income, adjusted | ||||||
5 | gross income, or taxable income for
the taxable year shall | ||||||
6 | mean the amount of gross income, adjusted gross
income or | ||||||
7 | taxable income properly reportable for federal income tax
| ||||||
8 | purposes for the taxable year under the provisions of the | ||||||
9 | Internal
Revenue Code. Taxable income may be less than | ||||||
10 | zero. However, for taxable
years ending on or after | ||||||
11 | December 31, 1986, net operating loss
carryforwards from | ||||||
12 | taxable years ending prior to December 31, 1986, may not
| ||||||
13 | exceed the sum of federal taxable income for the taxable | ||||||
14 | year before net
operating loss deduction, plus the excess | ||||||
15 | of addition modifications over
subtraction modifications | ||||||
16 | for the taxable year. For taxable years ending
prior to | ||||||
17 | December 31, 1986, taxable income may never be an amount in | ||||||
18 | excess
of the net operating loss for the taxable year as | ||||||
19 | defined in subsections
(c) and (d) of Section 172 of the | ||||||
20 | Internal Revenue Code, provided that when
taxable income of | ||||||
21 | a corporation (other than a Subchapter S corporation),
| ||||||
22 | trust, or estate is less than zero and addition | ||||||
23 | modifications, other than
those provided by subparagraph | ||||||
24 | (E) of paragraph (2) of subsection (b) for
corporations or | ||||||
25 | subparagraph (E) of paragraph (2) of subsection (c) for
| ||||||
26 | trusts and estates, exceed subtraction modifications, an |
| |||||||
| |||||||
1 | addition
modification must be made under those | ||||||
2 | subparagraphs for any other taxable
year to which the | ||||||
3 | taxable income less than zero (net operating loss) is
| ||||||
4 | applied under Section 172 of the Internal Revenue Code or | ||||||
5 | under
subparagraph (E) of paragraph (2) of this subsection | ||||||
6 | (e) applied in
conjunction with Section 172 of the Internal | ||||||
7 | Revenue Code. | ||||||
8 | (2) Special rule. For purposes of paragraph (1) of this | ||||||
9 | subsection,
the taxable income properly reportable for | ||||||
10 | federal income tax purposes
shall mean: | ||||||
11 | (A) Certain life insurance companies. In the case | ||||||
12 | of a life
insurance company subject to the tax imposed | ||||||
13 | by Section 801 of the
Internal Revenue Code, life | ||||||
14 | insurance company taxable income, plus the
amount of | ||||||
15 | distribution from pre-1984 policyholder surplus | ||||||
16 | accounts as
calculated under Section 815a of the | ||||||
17 | Internal Revenue Code; | ||||||
18 | (B) Certain other insurance companies. In the case | ||||||
19 | of mutual
insurance companies subject to the tax | ||||||
20 | imposed by Section 831 of the
Internal Revenue Code, | ||||||
21 | insurance company taxable income; | ||||||
22 | (C) Regulated investment companies. In the case of | ||||||
23 | a regulated
investment company subject to the tax | ||||||
24 | imposed by Section 852 of the
Internal Revenue Code, | ||||||
25 | investment company taxable income; | ||||||
26 | (D) Real estate investment trusts. In the case of a |
| |||||||
| |||||||
1 | real estate
investment trust subject to the tax imposed | ||||||
2 | by Section 857 of the
Internal Revenue Code, real | ||||||
3 | estate investment trust taxable income; | ||||||
4 | (E) Consolidated corporations. In the case of a | ||||||
5 | corporation which
is a member of an affiliated group of | ||||||
6 | corporations filing a consolidated
income tax return | ||||||
7 | for the taxable year for federal income tax purposes,
| ||||||
8 | taxable income determined as if such corporation had | ||||||
9 | filed a separate
return for federal income tax purposes | ||||||
10 | for the taxable year and each
preceding taxable year | ||||||
11 | for which it was a member of an affiliated group.
For | ||||||
12 | purposes of this subparagraph, the taxpayer's separate | ||||||
13 | taxable
income shall be determined as if the election | ||||||
14 | provided by Section
243(b) (2) of the Internal Revenue | ||||||
15 | Code had been in effect for all such years; | ||||||
16 | (F) Cooperatives. In the case of a cooperative | ||||||
17 | corporation or
association, the taxable income of such | ||||||
18 | organization determined in
accordance with the | ||||||
19 | provisions of Section 1381 through 1388 of the
Internal | ||||||
20 | Revenue Code, but without regard to the prohibition | ||||||
21 | against offsetting losses from patronage activities | ||||||
22 | against income from nonpatronage activities; except | ||||||
23 | that a cooperative corporation or association may make | ||||||
24 | an election to follow its federal income tax treatment | ||||||
25 | of patronage losses and nonpatronage losses. In the | ||||||
26 | event such election is made, such losses shall be |
| |||||||
| |||||||
1 | computed and carried over in a manner consistent with | ||||||
2 | subsection (a) of Section 207 of this Act and | ||||||
3 | apportioned by the apportionment factor reported by | ||||||
4 | the cooperative on its Illinois income tax return filed | ||||||
5 | for the taxable year in which the losses are incurred. | ||||||
6 | The election shall be effective for all taxable years | ||||||
7 | with original returns due on or after the date of the | ||||||
8 | election. In addition, the cooperative may file an | ||||||
9 | amended return or returns, as allowed under this Act, | ||||||
10 | to provide that the election shall be effective for | ||||||
11 | losses incurred or carried forward for taxable years | ||||||
12 | occurring prior to the date of the election. Once made, | ||||||
13 | the election may only be revoked upon approval of the | ||||||
14 | Director. The Department shall adopt rules setting | ||||||
15 | forth requirements for documenting the elections and | ||||||
16 | any resulting Illinois net loss and the standards to be | ||||||
17 | used by the Director in evaluating requests to revoke | ||||||
18 | elections. Public Act 96-932 is declaratory of | ||||||
19 | existing law; | ||||||
20 | (G) Subchapter S corporations. In the case of: (i) | ||||||
21 | a Subchapter S
corporation for which there is in effect | ||||||
22 | an election for the taxable year
under Section 1362 of | ||||||
23 | the Internal Revenue Code, the taxable income of such
| ||||||
24 | corporation determined in accordance with Section | ||||||
25 | 1363(b) of the Internal
Revenue Code, except that | ||||||
26 | taxable income shall take into
account those items |
| |||||||
| |||||||
1 | which are required by Section 1363(b)(1) of the
| ||||||
2 | Internal Revenue Code to be separately stated; and (ii) | ||||||
3 | a Subchapter
S corporation for which there is in effect | ||||||
4 | a federal election to opt out of
the provisions of the | ||||||
5 | Subchapter S Revision Act of 1982 and have applied
| ||||||
6 | instead the prior federal Subchapter S rules as in | ||||||
7 | effect on July 1, 1982,
the taxable income of such | ||||||
8 | corporation determined in accordance with the
federal | ||||||
9 | Subchapter S rules as in effect on July 1, 1982; and | ||||||
10 | (H) Partnerships. In the case of a partnership, | ||||||
11 | taxable income
determined in accordance with Section | ||||||
12 | 703 of the Internal Revenue Code,
except that taxable | ||||||
13 | income shall take into account those items which are
| ||||||
14 | required by Section 703(a)(1) to be separately stated | ||||||
15 | but which would be
taken into account by an individual | ||||||
16 | in calculating his taxable income. | ||||||
17 | (3) Recapture of business expenses on disposition of | ||||||
18 | asset or business. Notwithstanding any other law to the | ||||||
19 | contrary, if in prior years income from an asset or | ||||||
20 | business has been classified as business income and in a | ||||||
21 | later year is demonstrated to be non-business income, then | ||||||
22 | all expenses, without limitation, deducted in such later | ||||||
23 | year and in the 2 immediately preceding taxable years | ||||||
24 | related to that asset or business that generated the | ||||||
25 | non-business income shall be added back and recaptured as | ||||||
26 | business income in the year of the disposition of the asset |
| |||||||
| |||||||
1 | or business. Such amount shall be apportioned to Illinois | ||||||
2 | using the greater of the apportionment fraction computed | ||||||
3 | for the business under Section 304 of this Act for the | ||||||
4 | taxable year or the average of the apportionment fractions | ||||||
5 | computed for the business under Section 304 of this Act for | ||||||
6 | the taxable year and for the 2 immediately preceding | ||||||
7 | taxable years.
| ||||||
8 | (f) Valuation limitation amount. | ||||||
9 | (1) In general. The valuation limitation amount | ||||||
10 | referred to in
subsections (a) (2) (G), (c) (2) (I) and | ||||||
11 | (d)(2) (E) is an amount equal to: | ||||||
12 | (A) The sum of the pre-August 1, 1969 appreciation | ||||||
13 | amounts (to the
extent consisting of gain reportable | ||||||
14 | under the provisions of Section
1245 or 1250 of the | ||||||
15 | Internal Revenue Code) for all property in respect
of | ||||||
16 | which such gain was reported for the taxable year; plus | ||||||
17 | (B) The lesser of (i) the sum of the pre-August 1, | ||||||
18 | 1969 appreciation
amounts (to the extent consisting of | ||||||
19 | capital gain) for all property in
respect of which such | ||||||
20 | gain was reported for federal income tax purposes
for | ||||||
21 | the taxable year, or (ii) the net capital gain for the | ||||||
22 | taxable year,
reduced in either case by any amount of | ||||||
23 | such gain included in the amount
determined under | ||||||
24 | subsection (a) (2) (F) or (c) (2) (H). | ||||||
25 | (2) Pre-August 1, 1969 appreciation amount. |
| |||||||
| |||||||
1 | (A) If the fair market value of property referred | ||||||
2 | to in paragraph
(1) was readily ascertainable on August | ||||||
3 | 1, 1969, the pre-August 1, 1969
appreciation amount for | ||||||
4 | such property is the lesser of (i) the excess of
such | ||||||
5 | fair market value over the taxpayer's basis (for | ||||||
6 | determining gain)
for such property on that date | ||||||
7 | (determined under the Internal Revenue
Code as in | ||||||
8 | effect on that date), or (ii) the total gain realized | ||||||
9 | and
reportable for federal income tax purposes in | ||||||
10 | respect of the sale,
exchange or other disposition of | ||||||
11 | such property. | ||||||
12 | (B) If the fair market value of property referred | ||||||
13 | to in paragraph
(1) was not readily ascertainable on | ||||||
14 | August 1, 1969, the pre-August 1,
1969 appreciation | ||||||
15 | amount for such property is that amount which bears
the | ||||||
16 | same ratio to the total gain reported in respect of the | ||||||
17 | property for
federal income tax purposes for the | ||||||
18 | taxable year, as the number of full
calendar months in | ||||||
19 | that part of the taxpayer's holding period for the
| ||||||
20 | property ending July 31, 1969 bears to the number of | ||||||
21 | full calendar
months in the taxpayer's entire holding | ||||||
22 | period for the
property. | ||||||
23 | (C) The Department shall prescribe such | ||||||
24 | regulations as may be
necessary to carry out the | ||||||
25 | purposes of this paragraph.
|
| |||||||
| |||||||
1 | (g) Double deductions. Unless specifically provided | ||||||
2 | otherwise, nothing
in this Section shall permit the same item | ||||||
3 | to be deducted more than once.
| ||||||
4 | (h) Legislative intention. Except as expressly provided by | ||||||
5 | this
Section there shall be no modifications or limitations on | ||||||
6 | the amounts
of income, gain, loss or deduction taken into | ||||||
7 | account in determining
gross income, adjusted gross income or | ||||||
8 | taxable income for federal income
tax purposes for the taxable | ||||||
9 | year, or in the amount of such items
entering into the | ||||||
10 | computation of base income and net income under this
Act for | ||||||
11 | such taxable year, whether in respect of property values as of
| ||||||
12 | August 1, 1969 or otherwise. | ||||||
13 | (Source: P.A. 96-45, eff. 7-15-09; 96-120, eff. 8-4-09; 96-198, | ||||||
14 | eff. 8-10-09; 96-328, eff. 8-11-09; 96-520, eff. 8-14-09; | ||||||
15 | 96-835, eff. 12-16-09; 96-932, eff. 1-1-11; 96-935, eff. | ||||||
16 | 6-21-10; 96-1214, eff. 7-22-10; 97-333, eff. 8-12-11; 97-507, | ||||||
17 | eff. 8-23-11; 97-905, eff. 8-7-12.)
|