Bill Text: IL HB3468 | 2017-2018 | 100th General Assembly | Introduced


Bill Title: Amends the Illinois Income Tax Act. Provides that, for taxable years beginning on or after January 1, 2019, the rate of tax shall be 4.8% for corporations (currently, the rate is 5.25%, but it is scheduled to be reduced to 4.8% on January 1, 2025). Makes conforming changes concerning distributions to the Local Government Distributive Fund. Effective immediately.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2017-03-31 - Rule 19(a) / Re-referred to Rules Committee [HB3468 Detail]

Download: Illinois-2017-HB3468-Introduced.html


100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB3468

Introduced , by Rep. Thomas M. Bennett

SYNOPSIS AS INTRODUCED:
35 ILCS 5/201 from Ch. 120, par. 2-201
35 ILCS 5/901 from Ch. 120, par. 9-901

Amends the Illinois Income Tax Act. Provides that, for taxable years beginning on or after January 1, 2019, the rate of tax shall be 4.8% for corporations (currently, the rate is 5.25%, but it is scheduled to be reduced to 4.8% on January 1, 2025). Makes conforming changes concerning distributions to the Local Government Distributive Fund. Effective immediately.
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FISCAL NOTE ACT MAY APPLY

A BILL FOR

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1 AN ACT concerning revenue.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The Illinois Income Tax Act is amended by
5changing Sections 201 and 901 as follows:
6 (35 ILCS 5/201) (from Ch. 120, par. 2-201)
7 Sec. 201. Tax Imposed.
8 (a) In general. A tax measured by net income is hereby
9imposed on every individual, corporation, trust and estate for
10each taxable year ending after July 31, 1969 on the privilege
11of earning or receiving income in or as a resident of this
12State. Such tax shall be in addition to all other occupation or
13privilege taxes imposed by this State or by any municipal
14corporation or political subdivision thereof.
15 (b) Rates. The tax imposed by subsection (a) of this
16Section shall be determined as follows, except as adjusted by
17subsection (d-1):
18 (1) In the case of an individual, trust or estate, for
19 taxable years ending prior to July 1, 1989, an amount equal
20 to 2 1/2% of the taxpayer's net income for the taxable
21 year.
22 (2) In the case of an individual, trust or estate, for
23 taxable years beginning prior to July 1, 1989 and ending

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1 after June 30, 1989, an amount equal to the sum of (i) 2
2 1/2% of the taxpayer's net income for the period prior to
3 July 1, 1989, as calculated under Section 202.3, and (ii)
4 3% of the taxpayer's net income for the period after June
5 30, 1989, as calculated under Section 202.3.
6 (3) In the case of an individual, trust or estate, for
7 taxable years beginning after June 30, 1989, and ending
8 prior to January 1, 2011, an amount equal to 3% of the
9 taxpayer's net income for the taxable year.
10 (4) In the case of an individual, trust, or estate, for
11 taxable years beginning prior to January 1, 2011, and
12 ending after December 31, 2010, an amount equal to the sum
13 of (i) 3% of the taxpayer's net income for the period prior
14 to January 1, 2011, as calculated under Section 202.5, and
15 (ii) 5% of the taxpayer's net income for the period after
16 December 31, 2010, as calculated under Section 202.5.
17 (5) In the case of an individual, trust, or estate, for
18 taxable years beginning on or after January 1, 2011, and
19 ending prior to January 1, 2015, an amount equal to 5% of
20 the taxpayer's net income for the taxable year.
21 (5.1) In the case of an individual, trust, or estate,
22 for taxable years beginning prior to January 1, 2015, and
23 ending after December 31, 2014, an amount equal to the sum
24 of (i) 5% of the taxpayer's net income for the period prior
25 to January 1, 2015, as calculated under Section 202.5, and
26 (ii) 3.75% of the taxpayer's net income for the period

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1 after December 31, 2014, as calculated under Section 202.5.
2 (5.2) In the case of an individual, trust, or estate,
3 for taxable years beginning on or after January 1, 2015,
4 and ending prior to January 1, 2025, an amount equal to
5 3.75% of the taxpayer's net income for the taxable year.
6 (5.3) In the case of an individual, trust, or estate,
7 for taxable years beginning prior to January 1, 2025, and
8 ending after December 31, 2024, an amount equal to the sum
9 of (i) 3.75% of the taxpayer's net income for the period
10 prior to January 1, 2025, as calculated under Section
11 202.5, and (ii) 3.25% of the taxpayer's net income for the
12 period after December 31, 2024, as calculated under Section
13 202.5.
14 (5.4) In the case of an individual, trust, or estate,
15 for taxable years beginning on or after January 1, 2025, an
16 amount equal to 3.25% of the taxpayer's net income for the
17 taxable year.
18 (6) In the case of a corporation, for taxable years
19 ending prior to July 1, 1989, an amount equal to 4% of the
20 taxpayer's net income for the taxable year.
21 (7) In the case of a corporation, for taxable years
22 beginning prior to July 1, 1989 and ending after June 30,
23 1989, an amount equal to the sum of (i) 4% of the
24 taxpayer's net income for the period prior to July 1, 1989,
25 as calculated under Section 202.3, and (ii) 4.8% of the
26 taxpayer's net income for the period after June 30, 1989,

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1 as calculated under Section 202.3.
2 (8) In the case of a corporation, for taxable years
3 beginning after June 30, 1989, and ending prior to January
4 1, 2011, an amount equal to 4.8% of the taxpayer's net
5 income for the taxable year.
6 (9) In the case of a corporation, for taxable years
7 beginning prior to January 1, 2011, and ending after
8 December 31, 2010, an amount equal to the sum of (i) 4.8%
9 of the taxpayer's net income for the period prior to
10 January 1, 2011, as calculated under Section 202.5, and
11 (ii) 7% of the taxpayer's net income for the period after
12 December 31, 2010, as calculated under Section 202.5.
13 (10) In the case of a corporation, for taxable years
14 beginning on or after January 1, 2011, and ending prior to
15 January 1, 2015, an amount equal to 7% of the taxpayer's
16 net income for the taxable year.
17 (11) In the case of a corporation, for taxable years
18 beginning prior to January 1, 2015, and ending after
19 December 31, 2014, an amount equal to the sum of (i) 7% of
20 the taxpayer's net income for the period prior to January
21 1, 2015, as calculated under Section 202.5, and (ii) 5.25%
22 of the taxpayer's net income for the period after December
23 31, 2014, as calculated under Section 202.5.
24 (12) In the case of a corporation, for taxable years
25 beginning on or after January 1, 2015, and ending prior to
26 January 1, 2019 January 1, 2025, an amount equal to 5.25%

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1 of the taxpayer's net income for the taxable year.
2 (13) In the case of a corporation, for taxable years
3 beginning prior to January 1, 2019 January 1, 2025, and
4 ending after December 31, 2018 December 31, 2024, an amount
5 equal to the sum of (i) 5.25% of the taxpayer's net income
6 for the period prior to January 1, 2025, as calculated
7 under Section 202.5, and (ii) 4.8% of the taxpayer's net
8 income for the period after December 31, 2024, as
9 calculated under Section 202.5.
10 (14) In the case of a corporation, for taxable years
11 beginning on or after January 1, 2019 January 1, 2025, an
12 amount equal to 4.8% of the taxpayer's net income for the
13 taxable year.
14 The rates under this subsection (b) are subject to the
15provisions of Section 201.5.
16 (c) Personal Property Tax Replacement Income Tax.
17Beginning on July 1, 1979 and thereafter, in addition to such
18income tax, there is also hereby imposed the Personal Property
19Tax Replacement Income Tax measured by net income on every
20corporation (including Subchapter S corporations), partnership
21and trust, for each taxable year ending after June 30, 1979.
22Such taxes are imposed on the privilege of earning or receiving
23income in or as a resident of this State. The Personal Property
24Tax Replacement Income Tax shall be in addition to the income
25tax imposed by subsections (a) and (b) of this Section and in
26addition to all other occupation or privilege taxes imposed by

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1this State or by any municipal corporation or political
2subdivision thereof.
3 (d) Additional Personal Property Tax Replacement Income
4Tax Rates. The personal property tax replacement income tax
5imposed by this subsection and subsection (c) of this Section
6in the case of a corporation, other than a Subchapter S
7corporation and except as adjusted by subsection (d-1), shall
8be an additional amount equal to 2.85% of such taxpayer's net
9income for the taxable year, except that beginning on January
101, 1981, and thereafter, the rate of 2.85% specified in this
11subsection shall be reduced to 2.5%, and in the case of a
12partnership, trust or a Subchapter S corporation shall be an
13additional amount equal to 1.5% of such taxpayer's net income
14for the taxable year.
15 (d-1) Rate reduction for certain foreign insurers. In the
16case of a foreign insurer, as defined by Section 35A-5 of the
17Illinois Insurance Code, whose state or country of domicile
18imposes on insurers domiciled in Illinois a retaliatory tax
19(excluding any insurer whose premiums from reinsurance assumed
20are 50% or more of its total insurance premiums as determined
21under paragraph (2) of subsection (b) of Section 304, except
22that for purposes of this determination premiums from
23reinsurance do not include premiums from inter-affiliate
24reinsurance arrangements), beginning with taxable years ending
25on or after December 31, 1999, the sum of the rates of tax
26imposed by subsections (b) and (d) shall be reduced (but not

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

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

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

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

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

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1 assembling which changes some existing material into new
2 shapes, new qualities, or new combinations. For purposes of
3 this subsection (e) the term "mining" shall have the same
4 meaning as the term "mining" in Section 613(c) of the
5 Internal Revenue Code. For purposes of this subsection (e),
6 the term "retailing" means the sale of tangible personal
7 property for use or consumption and not for resale, or
8 services rendered in conjunction with the sale of tangible
9 personal property for use or consumption and not for
10 resale. For purposes of this subsection (e), "tangible
11 personal property" has the same meaning as when that term
12 is used in the Retailers' Occupation Tax Act, and, for
13 taxable years ending after December 31, 2008, does not
14 include the generation, transmission, or distribution of
15 electricity.
16 (4) The basis of qualified property shall be the basis
17 used to compute the depreciation deduction for federal
18 income tax purposes.
19 (5) If the basis of the property for federal income tax
20 depreciation purposes is increased after it has been placed
21 in service in Illinois by the taxpayer, the amount of such
22 increase shall be deemed property placed in service on the
23 date of such increase in basis.
24 (6) The term "placed in service" shall have the same
25 meaning as under Section 46 of the Internal Revenue Code.
26 (7) If during any taxable year, any property ceases to

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1 be qualified property in the hands of the taxpayer within
2 48 months after being placed in service, or the situs of
3 any qualified property is moved outside Illinois within 48
4 months after being placed in service, the Personal Property
5 Tax Replacement Income Tax for such taxable year shall be
6 increased. Such increase shall be determined by (i)
7 recomputing the investment credit which would have been
8 allowed for the year in which credit for such property was
9 originally allowed by eliminating such property from such
10 computation and, (ii) subtracting such recomputed credit
11 from the amount of credit previously allowed. For the
12 purposes of this paragraph (7), a reduction of the basis of
13 qualified property resulting from a redetermination of the
14 purchase price shall be deemed a disposition of qualified
15 property to the extent of such reduction.
16 (8) Unless the investment credit is extended by law,
17 the basis of qualified property shall not include costs
18 incurred after December 31, 2018, except for costs incurred
19 pursuant to a binding contract entered into on or before
20 December 31, 2018.
21 (9) Each taxable year ending before December 31, 2000,
22 a partnership may elect to pass through to its partners the
23 credits to which the partnership is entitled under this
24 subsection (e) for the taxable year. A partner may use the
25 credit allocated to him or her under this paragraph only
26 against the tax imposed in subsections (c) and (d) of this

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

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

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

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

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1 to 0.5% of the basis of qualified property placed in
2 service during the taxable year in a River Edge
3 Redevelopment Zone, provided such property is placed in
4 service on or after July 1, 2006, and the taxpayer's base
5 employment within Illinois has increased by 1% or more over
6 the preceding year as determined by the taxpayer's
7 employment records filed with the Illinois Department of
8 Employment Security. Taxpayers who are new to Illinois
9 shall be deemed to have met the 1% growth in base
10 employment for the first year in which they file employment
11 records with the Illinois Department of Employment
12 Security. If, in any year, the increase in base employment
13 within Illinois over the preceding year is less than 1%,
14 the additional credit shall be limited to that percentage
15 times a fraction, the numerator of which is 0.5% and the
16 denominator of which is 1%, but shall not exceed 0.5%.
17 (g) (Blank).
18 (h) Investment credit; High Impact Business.
19 (1) Subject to subsections (b) and (b-5) of Section 5.5
20 of the Illinois Enterprise Zone Act, a taxpayer shall be
21 allowed a credit against the tax imposed by subsections (a)
22 and (b) of this Section for investment in qualified
23 property which is placed in service by a Department of
24 Commerce and Economic Opportunity designated High Impact
25 Business. The credit shall be .5% of the basis for such
26 property. The credit shall not be available (i) until the

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

HB3468- 20 -LRB100 11193 HLH 21494 b
1 the 5 taxable years following the excess credit year. The
2 credit shall be applied to the earliest year for which
3 there is a liability. If there is credit from more than one
4 tax year that is available to offset a liability, the
5 credit accruing first in time shall be applied first.
6 Changes made in this subdivision (h)(1) by Public Act
7 88-670 restore changes made by Public Act 85-1182 and
8 reflect existing law.
9 (2) The term qualified property means property which:
10 (A) is tangible, whether new or used, including
11 buildings and structural components of buildings;
12 (B) is depreciable pursuant to Section 167 of the
13 Internal Revenue Code, except that "3-year property"
14 as defined in Section 168(c)(2)(A) of that Code is not
15 eligible for the credit provided by this subsection
16 (h);
17 (C) is acquired by purchase as defined in Section
18 179(d) of the Internal Revenue Code; and
19 (D) is not eligible for the Enterprise Zone
20 Investment Credit provided by subsection (f) of this
21 Section.
22 (3) The basis of qualified property shall be the basis
23 used to compute the depreciation deduction for federal
24 income tax purposes.
25 (4) If the basis of the property for federal income tax
26 depreciation purposes is increased after it has been placed

HB3468- 21 -LRB100 11193 HLH 21494 b
1 in service in a federally designated Foreign Trade Zone or
2 Sub-Zone located in Illinois by the taxpayer, the amount of
3 such increase shall be deemed property placed in service on
4 the date of such increase in basis.
5 (5) The term "placed in service" shall have the same
6 meaning as under Section 46 of the Internal Revenue Code.
7 (6) If during any taxable year ending on or before
8 December 31, 1996, any property ceases to be qualified
9 property in the hands of the taxpayer within 48 months
10 after being placed in service, or the situs of any
11 qualified property is moved outside Illinois within 48
12 months after being placed in service, the tax imposed under
13 subsections (a) and (b) of this Section for such taxable
14 year shall be increased. Such increase shall be determined
15 by (i) recomputing the investment credit which would have
16 been allowed for the year in which credit for such property
17 was originally allowed by eliminating such property from
18 such computation, and (ii) subtracting such recomputed
19 credit from the amount of credit previously allowed. For
20 the purposes of this paragraph (6), a reduction of the
21 basis of qualified property resulting from a
22 redetermination of the purchase price shall be deemed a
23 disposition of qualified property to the extent of such
24 reduction.
25 (7) Beginning with tax years ending after December 31,
26 1996, if a taxpayer qualifies for the credit under this

HB3468- 22 -LRB100 11193 HLH 21494 b
1 subsection (h) and thereby is granted a tax abatement and
2 the taxpayer relocates its entire facility in violation of
3 the explicit terms and length of the contract under Section
4 18-183 of the Property Tax Code, the tax imposed under
5 subsections (a) and (b) of this Section shall be increased
6 for the taxable year in which the taxpayer relocated its
7 facility by an amount equal to the amount of credit
8 received by the taxpayer under this subsection (h).
9 (i) Credit for Personal Property Tax Replacement Income
10Tax. For tax years ending prior to December 31, 2003, a credit
11shall be allowed against the tax imposed by subsections (a) and
12(b) of this Section for the tax imposed by subsections (c) and
13(d) of this Section. This credit shall be computed by
14multiplying the tax imposed by subsections (c) and (d) of this
15Section by a fraction, the numerator of which is base income
16allocable to Illinois and the denominator of which is Illinois
17base income, and further multiplying the product by the tax
18rate imposed by subsections (a) and (b) of this Section.
19 Any credit earned on or after December 31, 1986 under this
20subsection which is unused in the year the credit is computed
21because it exceeds the tax liability imposed by subsections (a)
22and (b) for that year (whether it exceeds the original
23liability or the liability as later amended) may be carried
24forward and applied to the tax liability imposed by subsections
25(a) and (b) of the 5 taxable years following the excess credit
26year, provided that no credit may be carried forward to any

HB3468- 23 -LRB100 11193 HLH 21494 b
1year ending on or after December 31, 2003. This credit shall be
2applied first to the earliest year for which there is a
3liability. If there is a credit under this subsection from more
4than one tax year that is available to offset a liability the
5earliest credit arising under this subsection shall be applied
6first.
7 If, during any taxable year ending on or after December 31,
81986, the tax imposed by subsections (c) and (d) of this
9Section for which a taxpayer has claimed a credit under this
10subsection (i) is reduced, the amount of credit for such tax
11shall also be reduced. Such reduction shall be determined by
12recomputing the credit to take into account the reduced tax
13imposed by subsections (c) and (d). If any portion of the
14reduced amount of credit has been carried to a different
15taxable year, an amended return shall be filed for such taxable
16year to reduce the amount of credit claimed.
17 (j) Training expense credit. Beginning with tax years
18ending on or after December 31, 1986 and prior to December 31,
192003, a taxpayer shall be allowed a credit against the tax
20imposed by subsections (a) and (b) under this Section for all
21amounts paid or accrued, on behalf of all persons employed by
22the taxpayer in Illinois or Illinois residents employed outside
23of Illinois by a taxpayer, for educational or vocational
24training in semi-technical or technical fields or semi-skilled
25or skilled fields, which were deducted from gross income in the
26computation of taxable income. The credit against the tax

HB3468- 24 -LRB100 11193 HLH 21494 b
1imposed by subsections (a) and (b) shall be 1.6% of such
2training expenses. For partners, shareholders of subchapter S
3corporations, and owners of limited liability companies, if the
4liability company is treated as a partnership for purposes of
5federal and State income taxation, there shall be allowed a
6credit under this subsection (j) to be determined in accordance
7with the determination of income and distributive share of
8income under Sections 702 and 704 and subchapter S of the
9Internal Revenue Code.
10 Any credit allowed under this subsection which is unused in
11the year the credit is earned may be carried forward to each of
12the 5 taxable years following the year for which the credit is
13first computed until it is used. This credit shall be applied
14first to the earliest year for which there is a liability. If
15there is a credit under this subsection from more than one tax
16year that is available to offset a liability the earliest
17credit arising under this subsection shall be applied first. No
18carryforward credit may be claimed in any tax year ending on or
19after December 31, 2003.
20 (k) Research and development credit. For tax years ending
21after July 1, 1990 and prior to December 31, 2003, and
22beginning again for tax years ending on or after December 31,
232004, and ending prior to January 1, 2016, a taxpayer shall be
24allowed a credit against the tax imposed by subsections (a) and
25(b) of this Section for increasing research activities in this
26State. The credit allowed against the tax imposed by

HB3468- 25 -LRB100 11193 HLH 21494 b
1subsections (a) and (b) shall be equal to 6 1/2% of the
2qualifying expenditures for increasing research activities in
3this State. For partners, shareholders of subchapter S
4corporations, and owners of limited liability companies, if the
5liability company is treated as a partnership for purposes of
6federal and State income taxation, there shall be allowed a
7credit under this subsection to be determined in accordance
8with the determination of income and distributive share of
9income under Sections 702 and 704 and subchapter S of the
10Internal Revenue Code.
11 For purposes of this subsection, "qualifying expenditures"
12means the qualifying expenditures as defined for the federal
13credit for increasing research activities which would be
14allowable under Section 41 of the Internal Revenue Code and
15which are conducted in this State, "qualifying expenditures for
16increasing research activities in this State" means the excess
17of qualifying expenditures for the taxable year in which
18incurred over qualifying expenditures for the base period,
19"qualifying expenditures for the base period" means the average
20of the qualifying expenditures for each year in the base
21period, and "base period" means the 3 taxable years immediately
22preceding the taxable year for which the determination is being
23made.
24 Any credit in excess of the tax liability for the taxable
25year may be carried forward. A taxpayer may elect to have the
26unused credit shown on its final completed return carried over

HB3468- 26 -LRB100 11193 HLH 21494 b
1as a credit against the tax liability for the following 5
2taxable years or until it has been fully used, whichever occurs
3first; provided that no credit earned in a tax year ending
4prior to December 31, 2003 may be carried forward to any year
5ending on or after December 31, 2003.
6 If an unused credit is carried forward to a given year from
72 or more earlier years, that credit arising in the earliest
8year will be applied first against the tax liability for the
9given year. If a tax liability for the given year still
10remains, the credit from the next earliest year will then be
11applied, and so on, until all credits have been used or no tax
12liability for the given year remains. Any remaining unused
13credit or credits then will be carried forward to the next
14following year in which a tax liability is incurred, except
15that no credit can be carried forward to a year which is more
16than 5 years after the year in which the expense for which the
17credit is given was incurred.
18 No inference shall be drawn from this amendatory Act of the
1991st General Assembly in construing this Section for taxable
20years beginning before January 1, 1999.
21 (l) Environmental Remediation Tax Credit.
22 (i) For tax years ending after December 31, 1997 and on
23 or before December 31, 2001, a taxpayer shall be allowed a
24 credit against the tax imposed by subsections (a) and (b)
25 of this Section for certain amounts paid for unreimbursed
26 eligible remediation costs, as specified in this

HB3468- 27 -LRB100 11193 HLH 21494 b
1 subsection. For purposes of this Section, "unreimbursed
2 eligible remediation costs" means costs approved by the
3 Illinois Environmental Protection Agency ("Agency") under
4 Section 58.14 of the Environmental Protection Act that were
5 paid in performing environmental remediation at a site for
6 which a No Further Remediation Letter was issued by the
7 Agency and recorded under Section 58.10 of the
8 Environmental Protection Act. The credit must be claimed
9 for the taxable year in which Agency approval of the
10 eligible remediation costs is granted. The credit is not
11 available to any taxpayer if the taxpayer or any related
12 party caused or contributed to, in any material respect, a
13 release of regulated substances on, in, or under the site
14 that was identified and addressed by the remedial action
15 pursuant to the Site Remediation Program of the
16 Environmental Protection Act. After the Pollution Control
17 Board rules are adopted pursuant to the Illinois
18 Administrative Procedure Act for the administration and
19 enforcement of Section 58.9 of the Environmental
20 Protection Act, determinations as to credit availability
21 for purposes of this Section shall be made consistent with
22 those rules. For purposes of this Section, "taxpayer"
23 includes a person whose tax attributes the taxpayer has
24 succeeded to under Section 381 of the Internal Revenue Code
25 and "related party" includes the persons disallowed a
26 deduction for losses by paragraphs (b), (c), and (f)(1) of

HB3468- 28 -LRB100 11193 HLH 21494 b
1 Section 267 of the Internal Revenue Code by virtue of being
2 a related taxpayer, as well as any of its partners. The
3 credit allowed against the tax imposed by subsections (a)
4 and (b) shall be equal to 25% of the unreimbursed eligible
5 remediation costs in excess of $100,000 per site, except
6 that the $100,000 threshold shall not apply to any site
7 contained in an enterprise zone as determined by the
8 Department of Commerce and Community Affairs (now
9 Department of Commerce and Economic Opportunity). The
10 total credit allowed shall not exceed $40,000 per year with
11 a maximum total of $150,000 per site. For partners and
12 shareholders of subchapter S corporations, there shall be
13 allowed a credit under this subsection to be determined in
14 accordance with the determination of income and
15 distributive share of income under Sections 702 and 704 and
16 subchapter S of the Internal Revenue Code.
17 (ii) A credit allowed under this subsection that is
18 unused in the year the credit is earned may be carried
19 forward to each of the 5 taxable years following the year
20 for which the credit is first earned until it is used. The
21 term "unused credit" does not include any amounts of
22 unreimbursed eligible remediation costs in excess of the
23 maximum credit per site authorized under paragraph (i).
24 This credit shall be applied first to the earliest year for
25 which there is a liability. If there is a credit under this
26 subsection from more than one tax year that is available to

HB3468- 29 -LRB100 11193 HLH 21494 b
1 offset a liability, the earliest credit arising under this
2 subsection shall be applied first. A credit allowed under
3 this subsection may be sold to a buyer as part of a sale of
4 all or part of the remediation site for which the credit
5 was granted. The purchaser of a remediation site and the
6 tax credit shall succeed to the unused credit and remaining
7 carry-forward period of the seller. To perfect the
8 transfer, the assignor shall record the transfer in the
9 chain of title for the site and provide written notice to
10 the Director of the Illinois Department of Revenue of the
11 assignor's intent to sell the remediation site and the
12 amount of the tax credit to be transferred as a portion of
13 the sale. In no event may a credit be transferred to any
14 taxpayer if the taxpayer or a related party would not be
15 eligible under the provisions of subsection (i).
16 (iii) For purposes of this Section, the term "site"
17 shall have the same meaning as under Section 58.2 of the
18 Environmental Protection Act.
19 (m) Education expense credit. Beginning with tax years
20ending after December 31, 1999, a taxpayer who is the custodian
21of one or more qualifying pupils shall be allowed a credit
22against the tax imposed by subsections (a) and (b) of this
23Section for qualified education expenses incurred on behalf of
24the qualifying pupils. The credit shall be equal to 25% of
25qualified education expenses, but in no event may the total
26credit under this subsection claimed by a family that is the

HB3468- 30 -LRB100 11193 HLH 21494 b
1custodian of qualifying pupils exceed $500. In no event shall a
2credit under this subsection reduce the taxpayer's liability
3under this Act to less than zero. This subsection is exempt
4from the provisions of Section 250 of this Act.
5 For purposes of this subsection:
6 "Qualifying pupils" means individuals who (i) are
7residents of the State of Illinois, (ii) are under the age of
821 at the close of the school year for which a credit is
9sought, and (iii) during the school year for which a credit is
10sought were full-time pupils enrolled in a kindergarten through
11twelfth grade education program at any school, as defined in
12this subsection.
13 "Qualified education expense" means the amount incurred on
14behalf of a qualifying pupil in excess of $250 for tuition,
15book fees, and lab fees at the school in which the pupil is
16enrolled during the regular school year.
17 "School" means any public or nonpublic elementary or
18secondary school in Illinois that is in compliance with Title
19VI of the Civil Rights Act of 1964 and attendance at which
20satisfies the requirements of Section 26-1 of the School Code,
21except that nothing shall be construed to require a child to
22attend any particular public or nonpublic school to qualify for
23the credit under this Section.
24 "Custodian" means, with respect to qualifying pupils, an
25Illinois resident who is a parent, the parents, a legal
26guardian, or the legal guardians of the qualifying pupils.

HB3468- 31 -LRB100 11193 HLH 21494 b
1 (n) River Edge Redevelopment Zone site remediation tax
2credit.
3 (i) For tax years ending on or after December 31, 2006,
4 a taxpayer shall be allowed a credit against the tax
5 imposed by subsections (a) and (b) of this Section for
6 certain amounts paid for unreimbursed eligible remediation
7 costs, as specified in this subsection. For purposes of
8 this Section, "unreimbursed eligible remediation costs"
9 means costs approved by the Illinois Environmental
10 Protection Agency ("Agency") under Section 58.14a of the
11 Environmental Protection Act that were paid in performing
12 environmental remediation at a site within a River Edge
13 Redevelopment Zone for which a No Further Remediation
14 Letter was issued by the Agency and recorded under Section
15 58.10 of the Environmental Protection Act. The credit must
16 be claimed for the taxable year in which Agency approval of
17 the eligible remediation costs is granted. The credit is
18 not available to any taxpayer if the taxpayer or any
19 related party caused or contributed to, in any material
20 respect, a release of regulated substances on, in, or under
21 the site that was identified and addressed by the remedial
22 action pursuant to the Site Remediation Program of the
23 Environmental Protection Act. Determinations as to credit
24 availability for purposes of this Section shall be made
25 consistent with rules adopted by the Pollution Control
26 Board pursuant to the Illinois Administrative Procedure

HB3468- 32 -LRB100 11193 HLH 21494 b
1 Act for the administration and enforcement of Section 58.9
2 of the Environmental Protection Act. For purposes of this
3 Section, "taxpayer" includes a person whose tax attributes
4 the taxpayer has succeeded to under Section 381 of the
5 Internal Revenue Code and "related party" includes the
6 persons disallowed a deduction for losses by paragraphs
7 (b), (c), and (f)(1) of Section 267 of the Internal Revenue
8 Code by virtue of being a related taxpayer, as well as any
9 of its partners. The credit allowed against the tax imposed
10 by subsections (a) and (b) shall be equal to 25% of the
11 unreimbursed eligible remediation costs in excess of
12 $100,000 per site.
13 (ii) A credit allowed under this subsection that is
14 unused in the year the credit is earned may be carried
15 forward to each of the 5 taxable years following the year
16 for which the credit is first earned until it is used. This
17 credit shall be applied first to the earliest year for
18 which there is a liability. If there is a credit under this
19 subsection from more than one tax year that is available to
20 offset a liability, the earliest credit arising under this
21 subsection shall be applied first. A credit allowed under
22 this subsection may be sold to a buyer as part of a sale of
23 all or part of the remediation site for which the credit
24 was granted. The purchaser of a remediation site and the
25 tax credit shall succeed to the unused credit and remaining
26 carry-forward period of the seller. To perfect the

HB3468- 33 -LRB100 11193 HLH 21494 b
1 transfer, the assignor shall record the transfer in the
2 chain of title for the site and provide written notice to
3 the Director of the Illinois Department of Revenue of the
4 assignor's intent to sell the remediation site and the
5 amount of the tax credit to be transferred as a portion of
6 the sale. In no event may a credit be transferred to any
7 taxpayer if the taxpayer or a related party would not be
8 eligible under the provisions of subsection (i).
9 (iii) For purposes of this Section, the term "site"
10 shall have the same meaning as under Section 58.2 of the
11 Environmental Protection Act.
12 (o) For each of taxable years during the Compassionate Use
13of Medical Cannabis Pilot Program, a surcharge is imposed on
14all taxpayers on income arising from the sale or exchange of
15capital assets, depreciable business property, real property
16used in the trade or business, and Section 197 intangibles of
17an organization registrant under the Compassionate Use of
18Medical Cannabis Pilot Program Act. The amount of the surcharge
19is equal to the amount of federal income tax liability for the
20taxable year attributable to those sales and exchanges. The
21surcharge imposed does not apply if:
22 (1) the medical cannabis cultivation center
23 registration, medical cannabis dispensary registration, or
24 the property of a registration is transferred as a result
25 of any of the following:
26 (A) bankruptcy, a receivership, or a debt

HB3468- 34 -LRB100 11193 HLH 21494 b
1 adjustment initiated by or against the initial
2 registration or the substantial owners of the initial
3 registration;
4 (B) cancellation, revocation, or termination of
5 any registration by the Illinois Department of Public
6 Health;
7 (C) a determination by the Illinois Department of
8 Public Health that transfer of the registration is in
9 the best interests of Illinois qualifying patients as
10 defined by the Compassionate Use of Medical Cannabis
11 Pilot Program Act;
12 (D) the death of an owner of the equity interest in
13 a registrant;
14 (E) the acquisition of a controlling interest in
15 the stock or substantially all of the assets of a
16 publicly traded company;
17 (F) a transfer by a parent company to a wholly
18 owned subsidiary; or
19 (G) the transfer or sale to or by one person to
20 another person where both persons were initial owners
21 of the registration when the registration was issued;
22 or
23 (2) the cannabis cultivation center registration,
24 medical cannabis dispensary registration, or the
25 controlling interest in a registrant's property is
26 transferred in a transaction to lineal descendants in which

HB3468- 35 -LRB100 11193 HLH 21494 b
1 no gain or loss is recognized or as a result of a
2 transaction in accordance with Section 351 of the Internal
3 Revenue Code in which no gain or loss is recognized.
4(Source: P.A. 97-2, eff. 5-6-11; 97-636, eff. 6-1-12; 97-905,
5eff. 8-7-12; 98-109, eff. 7-25-13; 98-122, eff. 1-1-14; 98-756,
6eff. 7-16-14.)
7 (35 ILCS 5/901) (from Ch. 120, par. 9-901)
8 Sec. 901. Collection authority.
9 (a) In general.
10 The Department shall collect the taxes imposed by this Act.
11The Department shall collect certified past due child support
12amounts under Section 2505-650 of the Department of Revenue Law
13(20 ILCS 2505/2505-650). Except as provided in subsections (c),
14(e), (f), (g), and (h) of this Section, money collected
15pursuant to subsections (a) and (b) of Section 201 of this Act
16shall be paid into the General Revenue Fund in the State
17treasury; money collected pursuant to subsections (c) and (d)
18of Section 201 of this Act shall be paid into the Personal
19Property Tax Replacement Fund, a special fund in the State
20Treasury; and money collected under Section 2505-650 of the
21Department of Revenue Law (20 ILCS 2505/2505-650) shall be paid
22into the Child Support Enforcement Trust Fund, a special fund
23outside the State Treasury, or to the State Disbursement Unit
24established under Section 10-26 of the Illinois Public Aid
25Code, as directed by the Department of Healthcare and Family

HB3468- 36 -LRB100 11193 HLH 21494 b
1Services.
2 (b) Local Government Distributive Fund.
3 Beginning August 1, 1969, and continuing through June 30,
41994, the Treasurer shall transfer each month from the General
5Revenue Fund to a special fund in the State treasury, to be
6known as the "Local Government Distributive Fund", an amount
7equal to 1/12 of the net revenue realized from the tax imposed
8by subsections (a) and (b) of Section 201 of this Act during
9the preceding month. Beginning July 1, 1994, and continuing
10through June 30, 1995, the Treasurer shall transfer each month
11from the General Revenue Fund to the Local Government
12Distributive Fund an amount equal to 1/11 of the net revenue
13realized from the tax imposed by subsections (a) and (b) of
14Section 201 of this Act during the preceding month. Beginning
15July 1, 1995 and continuing through January 31, 2011, the
16Treasurer shall transfer each month from the General Revenue
17Fund to the Local Government Distributive Fund an amount equal
18to the net of (i) 1/10 of the net revenue realized from the tax
19imposed by subsections (a) and (b) of Section 201 of the
20Illinois Income Tax Act during the preceding month (ii) minus,
21beginning July 1, 2003 and ending June 30, 2004, $6,666,666,
22and beginning July 1, 2004, zero. Beginning February 1, 2011,
23and continuing through January 31, 2015, the Treasurer shall
24transfer each month from the General Revenue Fund to the Local
25Government Distributive Fund an amount equal to the sum of (i)
266% (10% of the ratio of the 3% individual income tax rate prior

HB3468- 37 -LRB100 11193 HLH 21494 b
1to 2011 to the 5% individual income tax rate after 2010) of the
2net revenue realized from the tax imposed by subsections (a)
3and (b) of Section 201 of this Act upon individuals, trusts,
4and estates during the preceding month and (ii) 6.86% (10% of
5the ratio of the 4.8% corporate income tax rate prior to 2011
6to the 7% corporate income tax rate after 2010) of the net
7revenue realized from the tax imposed by subsections (a) and
8(b) of Section 201 of this Act upon corporations during the
9preceding month. Beginning February 1, 2015 and continuing
10through January 31, 2019 January 31, 2025, the Treasurer shall
11transfer each month from the General Revenue Fund to the Local
12Government Distributive Fund an amount equal to the sum of (i)
138% (10% of the ratio of the 3% individual income tax rate prior
14to 2011 to the 3.75% individual income tax rate after 2014) of
15the net revenue realized from the tax imposed by subsections
16(a) and (b) of Section 201 of this Act upon individuals,
17trusts, and estates during the preceding month and (ii) 9.14%
18(10% of the ratio of the 4.8% corporate income tax rate prior
19to 2011 to the 5.25% corporate income tax rate after 2014) of
20the net revenue realized from the tax imposed by subsections
21(a) and (b) of Section 201 of this Act upon corporations during
22the preceding month. Beginning on February 1, 2019 and
23continuing through January 31, 2025, the Treasurer shall
24transfer each month from the General Revenue Fund to the Local
25Government Distributive Fund an amount equal to the sum of (i)
268% (10% of the ratio of the 3% individual income tax rate prior

HB3468- 38 -LRB100 11193 HLH 21494 b
1to 2011 to the 3.75% individual income tax rate after 2014) of
2the net revenue realized from the tax imposed by subsections
3(a) and (b) of Section 201 of this Act upon individuals,
4trusts, and estates during the preceding month and (ii) 10% of
5the net revenue realized from the tax imposed by subsections
6(a) and (b) of Section 201 of this Act upon corporations during
7the preceding month. Beginning February 1, 2025, the Treasurer
8shall transfer each month from the General Revenue Fund to the
9Local Government Distributive Fund an amount equal to the sum
10of (i) 9.23% (10% of the ratio of the 3% individual income tax
11rate prior to 2011 to the 3.25% individual income tax rate
12after 2024) of the net revenue realized from the tax imposed by
13subsections (a) and (b) of Section 201 of this Act upon
14individuals, trusts, and estates during the preceding month and
15(ii) 10% of the net revenue realized from the tax imposed by
16subsections (a) and (b) of Section 201 of this Act upon
17corporations during the preceding month. Net revenue realized
18for a month shall be defined as the revenue from the tax
19imposed by subsections (a) and (b) of Section 201 of this Act
20which is deposited in the General Revenue Fund, the Education
21Assistance Fund, the Income Tax Surcharge Local Government
22Distributive Fund, the Fund for the Advancement of Education,
23and the Commitment to Human Services Fund during the month
24minus the amount paid out of the General Revenue Fund in State
25warrants during that same month as refunds to taxpayers for
26overpayment of liability under the tax imposed by subsections

HB3468- 39 -LRB100 11193 HLH 21494 b
1(a) and (b) of Section 201 of this Act.
2 Beginning on August 26, 2014 (the effective date of Public
3Act 98-1052), the Comptroller shall perform the transfers
4required by this subsection (b) no later than 60 days after he
5or she receives the certification from the Treasurer as
6provided in Section 1 of the State Revenue Sharing Act.
7 (c) Deposits Into Income Tax Refund Fund.
8 (1) Beginning on January 1, 1989 and thereafter, the
9 Department shall deposit a percentage of the amounts
10 collected pursuant to subsections (a) and (b)(1), (2), and
11 (3), of Section 201 of this Act into a fund in the State
12 treasury known as the Income Tax Refund Fund. The
13 Department shall deposit 6% of such amounts during the
14 period beginning January 1, 1989 and ending on June 30,
15 1989. Beginning with State fiscal year 1990 and for each
16 fiscal year thereafter, the percentage deposited into the
17 Income Tax Refund Fund during a fiscal year shall be the
18 Annual Percentage. For fiscal years 1999 through 2001, the
19 Annual Percentage shall be 7.1%. For fiscal year 2003, the
20 Annual Percentage shall be 8%. For fiscal year 2004, the
21 Annual Percentage shall be 11.7%. Upon the effective date
22 of this amendatory Act of the 93rd General Assembly, the
23 Annual Percentage shall be 10% for fiscal year 2005. For
24 fiscal year 2006, the Annual Percentage shall be 9.75%. For
25 fiscal year 2007, the Annual Percentage shall be 9.75%. For
26 fiscal year 2008, the Annual Percentage shall be 7.75%. For

HB3468- 40 -LRB100 11193 HLH 21494 b
1 fiscal year 2009, the Annual Percentage shall be 9.75%. For
2 fiscal year 2010, the Annual Percentage shall be 9.75%. For
3 fiscal year 2011, the Annual Percentage shall be 8.75%. For
4 fiscal year 2012, the Annual Percentage shall be 8.75%. For
5 fiscal year 2013, the Annual Percentage shall be 9.75%. For
6 fiscal year 2014, the Annual Percentage shall be 9.5%. For
7 fiscal year 2015, the Annual Percentage shall be 10%. For
8 all other fiscal years, the Annual Percentage shall be
9 calculated as a fraction, the numerator of which shall be
10 the amount of refunds approved for payment by the
11 Department during the preceding fiscal year as a result of
12 overpayment of tax liability under subsections (a) and
13 (b)(1), (2), and (3) of Section 201 of this Act plus the
14 amount of such refunds remaining approved but unpaid at the
15 end of the preceding fiscal year, minus the amounts
16 transferred into the Income Tax Refund Fund from the
17 Tobacco Settlement Recovery Fund, and the denominator of
18 which shall be the amounts which will be collected pursuant
19 to subsections (a) and (b)(1), (2), and (3) of Section 201
20 of this Act during the preceding fiscal year; except that
21 in State fiscal year 2002, the Annual Percentage shall in
22 no event exceed 7.6%. The Director of Revenue shall certify
23 the Annual Percentage to the Comptroller on the last
24 business day of the fiscal year immediately preceding the
25 fiscal year for which it is to be effective.
26 (2) Beginning on January 1, 1989 and thereafter, the

HB3468- 41 -LRB100 11193 HLH 21494 b
1 Department shall deposit a percentage of the amounts
2 collected pursuant to subsections (a) and (b)(6), (7), and
3 (8), (c) and (d) of Section 201 of this Act into a fund in
4 the State treasury known as the Income Tax Refund Fund. The
5 Department shall deposit 18% of such amounts during the
6 period beginning January 1, 1989 and ending on June 30,
7 1989. Beginning with State fiscal year 1990 and for each
8 fiscal year thereafter, the percentage deposited into the
9 Income Tax Refund Fund during a fiscal year shall be the
10 Annual Percentage. For fiscal years 1999, 2000, and 2001,
11 the Annual Percentage shall be 19%. For fiscal year 2003,
12 the Annual Percentage shall be 27%. For fiscal year 2004,
13 the Annual Percentage shall be 32%. Upon the effective date
14 of this amendatory Act of the 93rd General Assembly, the
15 Annual Percentage shall be 24% for fiscal year 2005. For
16 fiscal year 2006, the Annual Percentage shall be 20%. For
17 fiscal year 2007, the Annual Percentage shall be 17.5%. For
18 fiscal year 2008, the Annual Percentage shall be 15.5%. For
19 fiscal year 2009, the Annual Percentage shall be 17.5%. For
20 fiscal year 2010, the Annual Percentage shall be 17.5%. For
21 fiscal year 2011, the Annual Percentage shall be 17.5%. For
22 fiscal year 2012, the Annual Percentage shall be 17.5%. For
23 fiscal year 2013, the Annual Percentage shall be 14%. For
24 fiscal year 2014, the Annual Percentage shall be 13.4%. For
25 fiscal year 2015, the Annual Percentage shall be 14%. For
26 all other fiscal years, the Annual Percentage shall be

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

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

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

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1minus deposits into the Income Tax Refund Fund, the Department
2shall deposit 7.3% into the Education Assistance Fund in the
3State Treasury. Beginning July 1, 1991, and continuing through
4January 31, 1993, of the amounts collected pursuant to
5subsections (a) and (b) of Section 201 of the Illinois Income
6Tax Act, minus deposits into the Income Tax Refund Fund, the
7Department shall deposit 3.0% into the Income Tax Surcharge
8Local Government Distributive Fund in the State Treasury.
9Beginning February 1, 1993 and continuing through June 30,
101993, of the amounts collected pursuant to subsections (a) and
11(b) of Section 201 of the Illinois Income Tax Act, minus
12deposits into the Income Tax Refund Fund, the Department shall
13deposit 4.4% into the Income Tax Surcharge Local Government
14Distributive Fund in the State Treasury. Beginning July 1,
151993, and continuing through June 30, 1994, of the amounts
16collected under subsections (a) and (b) of Section 201 of this
17Act, minus deposits into the Income Tax Refund Fund, the
18Department shall deposit 1.475% into the Income Tax Surcharge
19Local Government Distributive Fund in the State Treasury.
20 (f) Deposits into the Fund for the Advancement of
21Education. Beginning February 1, 2015, the Department shall
22deposit the following portions of the revenue realized from the
23tax imposed upon individuals, trusts, and estates by
24subsections (a) and (b) of Section 201 of this Act during the
25preceding month, minus deposits into the Income Tax Refund
26Fund, into the Fund for the Advancement of Education:

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1 (1) beginning February 1, 2015, and prior to February
2 1, 2025, 1/30; and
3 (2) beginning February 1, 2025, 1/26.
4 If the rate of tax imposed by subsection (a) and (b) of
5Section 201 is reduced pursuant to Section 201.5 of this Act,
6the Department shall not make the deposits required by this
7subsection (f) on or after the effective date of the reduction.
8 (g) Deposits into the Commitment to Human Services Fund.
9Beginning February 1, 2015, the Department shall deposit the
10following portions of the revenue realized from the tax imposed
11upon individuals, trusts, and estates by subsections (a) and
12(b) of Section 201 of this Act during the preceding month,
13minus deposits into the Income Tax Refund Fund, into the
14Commitment to Human Services Fund:
15 (1) beginning February 1, 2015, and prior to February
16 1, 2025, 1/30; and
17 (2) beginning February 1, 2025, 1/26.
18 If the rate of tax imposed by subsection (a) and (b) of
19Section 201 is reduced pursuant to Section 201.5 of this Act,
20the Department shall not make the deposits required by this
21subsection (g) on or after the effective date of the reduction.
22 (h) Deposits into the Tax Compliance and Administration
23Fund. Beginning on the first day of the first calendar month to
24occur on or after August 26, 2014 (the effective date of Public
25Act 98-1098), each month the Department shall pay into the Tax
26Compliance and Administration Fund, to be used, subject to

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1appropriation, to fund additional auditors and compliance
2personnel at the Department, an amount equal to 1/12 of 5% of
3the cash receipts collected during the preceding fiscal year by
4the Audit Bureau of the Department from the tax imposed by
5subsections (a), (b), (c), and (d) of Section 201 of this Act,
6net of deposits into the Income Tax Refund Fund made from those
7cash receipts.
8(Source: P.A. 98-24, eff. 6-19-13; 98-674, eff. 6-30-14;
998-1052, eff. 8-26-14; 98-1098, eff. 8-26-14; 99-78, eff.
107-20-15.)
11 Section 99. Effective date. This Act takes effect upon
12becoming law.
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