Bill Text: IL HB3935 | 2021-2022 | 102nd General Assembly | Introduced
Bill Title: Amends the Illinois Income Tax Act. Increases the research and development credit by providing that the increase in research and development activities shall be based on an increase over 50% of the average of the qualifying expenditures for each year in the base period (instead of 100% of the average of the qualifying expenditures for each year in the base period). Provides that the research and development credit applies on a permanent basis. Effective immediately.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2021-03-27 - Rule 19(a) / Re-referred to Rules Committee [HB3935 Detail]
Download: Illinois-2021-HB3935-Introduced.html
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1 | AN ACT concerning revenue.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Income Tax Act is amended by | ||||||||||||||||||||||||
5 | changing Section 201 as follows:
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6 | (35 ILCS 5/201)
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7 | (Text of Section without the changes made by P.A. 101-8, | ||||||||||||||||||||||||
8 | which did not take effect (see Section 99 of P.A. 101-8)) | ||||||||||||||||||||||||
9 | Sec. 201. Tax imposed. | ||||||||||||||||||||||||
10 | (a) In general. A tax measured by net income is hereby | ||||||||||||||||||||||||
11 | imposed on every
individual, corporation, trust and estate for | ||||||||||||||||||||||||
12 | each taxable year ending
after July 31, 1969 on the privilege | ||||||||||||||||||||||||
13 | of earning or receiving income in or
as a resident of this | ||||||||||||||||||||||||
14 | State. Such tax shall be in addition to all other
occupation or | ||||||||||||||||||||||||
15 | privilege taxes imposed by this State or by any municipal
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16 | corporation or political subdivision thereof. | ||||||||||||||||||||||||
17 | (b) Rates. The tax imposed by subsection (a) of this | ||||||||||||||||||||||||
18 | Section shall be
determined as follows, except as adjusted by | ||||||||||||||||||||||||
19 | subsection (d-1): | ||||||||||||||||||||||||
20 | (1) In the case of an individual, trust or estate, for | ||||||||||||||||||||||||
21 | taxable years
ending prior to July 1, 1989, an amount | ||||||||||||||||||||||||
22 | equal to 2 1/2% of the taxpayer's
net income for the | ||||||||||||||||||||||||
23 | taxable year. |
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1 | (2) In the case of an individual, trust or estate, for | ||||||
2 | taxable years
beginning prior to July 1, 1989 and ending | ||||||
3 | after June 30, 1989, an amount
equal to the sum of (i) 2 | ||||||
4 | 1/2% of the taxpayer's net income for the period
prior to | ||||||
5 | July 1, 1989, as calculated under Section 202.3, and (ii) | ||||||
6 | 3% of the
taxpayer's net income for the period after June | ||||||
7 | 30, 1989, as calculated
under Section 202.3. | ||||||
8 | (3) In the case of an individual, trust or estate, for | ||||||
9 | taxable years
beginning after June 30, 1989, and ending | ||||||
10 | prior to January 1, 2011, an amount equal to 3% of the | ||||||
11 | taxpayer's net
income for the taxable year. | ||||||
12 | (4) In the case of an individual, trust, or estate, | ||||||
13 | for taxable years beginning prior to January 1, 2011, and | ||||||
14 | ending after December 31, 2010, an amount equal to the sum | ||||||
15 | of (i) 3% of the taxpayer's net income for the period prior | ||||||
16 | to January 1, 2011, as calculated under Section 202.5, and | ||||||
17 | (ii) 5% of the taxpayer's net income for the period after | ||||||
18 | December 31, 2010, as calculated under Section 202.5. | ||||||
19 | (5) In the case of an individual, trust, or estate, | ||||||
20 | for taxable years beginning on or after January 1, 2011, | ||||||
21 | and ending prior to January 1, 2015, an amount equal to 5% | ||||||
22 | of the taxpayer's net income for the taxable year. | ||||||
23 | (5.1) In the case of an individual, trust, or estate, | ||||||
24 | for taxable years beginning prior to January 1, 2015, and | ||||||
25 | ending after December 31, 2014, an amount equal to the sum | ||||||
26 | of (i) 5% of the taxpayer's net income for the period prior |
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1 | to January 1, 2015, as calculated under Section 202.5, and | ||||||
2 | (ii) 3.75% of the taxpayer's net income for the period | ||||||
3 | after December 31, 2014, as calculated under Section | ||||||
4 | 202.5. | ||||||
5 | (5.2) In the case of an individual, trust, or estate, | ||||||
6 | for taxable years beginning on or after January 1, 2015, | ||||||
7 | and ending prior to July 1, 2017, an amount equal to 3.75% | ||||||
8 | of the taxpayer's net income for the taxable year. | ||||||
9 | (5.3) In the case of an individual, trust, or estate, | ||||||
10 | for taxable years beginning prior to July 1, 2017, and | ||||||
11 | ending after June 30, 2017, an amount equal to the sum of | ||||||
12 | (i) 3.75% of the taxpayer's net income for the period | ||||||
13 | prior to July 1, 2017, as calculated under Section 202.5, | ||||||
14 | and (ii) 4.95% of the taxpayer's net income for the period | ||||||
15 | after June 30, 2017, as calculated under Section 202.5. | ||||||
16 | (5.4) In the case of an individual, trust, or estate, | ||||||
17 | for taxable years beginning on or after July 1, 2017, an | ||||||
18 | amount equal to 4.95% of the taxpayer's net income for the | ||||||
19 | taxable year. | ||||||
20 | (6) In the case of a corporation, for taxable years
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21 | ending prior to July 1, 1989, an amount equal to 4% of the
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22 | taxpayer's net income for the taxable year. | ||||||
23 | (7) In the case of a corporation, for taxable years | ||||||
24 | beginning prior to
July 1, 1989 and ending after June 30, | ||||||
25 | 1989, an amount equal to the sum of
(i) 4% of the | ||||||
26 | taxpayer's net income for the period prior to July 1, |
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1 | 1989,
as calculated under Section 202.3, and (ii) 4.8% of | ||||||
2 | the taxpayer's net
income for the period after June 30, | ||||||
3 | 1989, as calculated under Section
202.3. | ||||||
4 | (8) In the case of a corporation, for taxable years | ||||||
5 | beginning after
June 30, 1989, and ending prior to January | ||||||
6 | 1, 2011, an amount equal to 4.8% of the taxpayer's net | ||||||
7 | income for the
taxable year. | ||||||
8 | (9) In the case of a corporation, for taxable years | ||||||
9 | beginning prior to January 1, 2011, and ending after | ||||||
10 | December 31, 2010, an amount equal to the sum of (i) 4.8% | ||||||
11 | of the taxpayer's net income for the period prior to | ||||||
12 | January 1, 2011, as calculated under Section 202.5, and | ||||||
13 | (ii) 7% of the taxpayer's net income for the period after | ||||||
14 | December 31, 2010, as calculated under Section 202.5. | ||||||
15 | (10) In the case of a corporation, for taxable years | ||||||
16 | beginning on or after January 1, 2011, and ending prior to | ||||||
17 | January 1, 2015, an amount equal to 7% of the taxpayer's | ||||||
18 | net income for the taxable year. | ||||||
19 | (11) In the case of a corporation, for taxable years | ||||||
20 | beginning prior to January 1, 2015, and ending after | ||||||
21 | December 31, 2014, an amount equal to the sum of (i) 7% of | ||||||
22 | the taxpayer's net income for the period prior to January | ||||||
23 | 1, 2015, as calculated under Section 202.5, and (ii) 5.25% | ||||||
24 | of the taxpayer's net income for the period after December | ||||||
25 | 31, 2014, as calculated under Section 202.5. | ||||||
26 | (12) In the case of a corporation, for taxable years |
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1 | beginning on or after January 1, 2015, and ending prior to | ||||||
2 | July 1, 2017, an amount equal to 5.25% of the taxpayer's | ||||||
3 | net income for the taxable year. | ||||||
4 | (13) In the case of a corporation, for taxable years | ||||||
5 | beginning prior to July 1, 2017, and ending after June 30, | ||||||
6 | 2017, an amount equal to the sum of (i) 5.25% of the | ||||||
7 | taxpayer's net income for the period prior to July 1, | ||||||
8 | 2017, as calculated under Section 202.5, and (ii) 7% of | ||||||
9 | the taxpayer's net income for the period after June 30, | ||||||
10 | 2017, as calculated under Section 202.5. | ||||||
11 | (14) In the case of a corporation, for taxable years | ||||||
12 | beginning on or after July 1, 2017, an amount equal to 7% | ||||||
13 | of the taxpayer's net income for the taxable year. | ||||||
14 | The rates under this subsection (b) are subject to the | ||||||
15 | provisions of Section 201.5. | ||||||
16 | (b-5) Surcharge; sale or exchange of assets, properties, | ||||||
17 | and intangibles of organization gaming licensees. For each of | ||||||
18 | taxable years 2019 through 2027, a surcharge is imposed on all | ||||||
19 | taxpayers on income arising from the sale or exchange of | ||||||
20 | capital assets, depreciable business property, real property | ||||||
21 | used in the trade or business, and Section 197 intangibles (i) | ||||||
22 | of an organization licensee under the Illinois Horse Racing | ||||||
23 | Act of 1975 and (ii) of an organization gaming licensee under | ||||||
24 | the Illinois Gambling Act. The amount of the surcharge is | ||||||
25 | equal to the amount of federal income tax liability for the | ||||||
26 | taxable year attributable to those sales and exchanges. The |
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1 | surcharge imposed shall not apply if: | ||||||
2 | (1) the organization gaming license, organization | ||||||
3 | license, or racetrack property is transferred as a result | ||||||
4 | of any of the following: | ||||||
5 | (A) bankruptcy, a receivership, or a debt | ||||||
6 | adjustment initiated by or against the initial | ||||||
7 | licensee or the substantial owners of the initial | ||||||
8 | licensee; | ||||||
9 | (B) cancellation, revocation, or termination of | ||||||
10 | any such license by the Illinois Gaming Board or the | ||||||
11 | Illinois Racing Board; | ||||||
12 | (C) a determination by the Illinois Gaming Board | ||||||
13 | that transfer of the license is in the best interests | ||||||
14 | of Illinois gaming; | ||||||
15 | (D) the death of an owner of the equity interest in | ||||||
16 | a licensee; | ||||||
17 | (E) the acquisition of a controlling interest in | ||||||
18 | the stock or substantially all of the assets of a | ||||||
19 | publicly traded company; | ||||||
20 | (F) a transfer by a parent company to a wholly | ||||||
21 | owned subsidiary; or | ||||||
22 | (G) the transfer or sale to or by one person to | ||||||
23 | another person where both persons were initial owners | ||||||
24 | of the license when the license was issued; or | ||||||
25 | (2) the controlling interest in the organization | ||||||
26 | gaming license, organization license, or racetrack |
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1 | property is transferred in a transaction to lineal | ||||||
2 | descendants in which no gain or loss is recognized or as a | ||||||
3 | result of a transaction in accordance with Section 351 of | ||||||
4 | the Internal Revenue Code in which no gain or loss is | ||||||
5 | recognized; or | ||||||
6 | (3) live horse racing was not conducted in 2010 at a | ||||||
7 | racetrack located within 3 miles of the Mississippi River | ||||||
8 | under a license issued pursuant to the Illinois Horse | ||||||
9 | Racing Act of 1975. | ||||||
10 | The transfer of an organization gaming license, | ||||||
11 | organization license, or racetrack property by a person other | ||||||
12 | than the initial licensee to receive the organization gaming | ||||||
13 | license is not subject to a surcharge. The Department shall | ||||||
14 | adopt rules necessary to implement and administer this | ||||||
15 | subsection. | ||||||
16 | (c) Personal Property Tax Replacement Income Tax.
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17 | Beginning on July 1, 1979 and thereafter, in addition to such | ||||||
18 | income
tax, there is also hereby imposed the Personal Property | ||||||
19 | Tax Replacement
Income Tax measured by net income on every | ||||||
20 | corporation (including Subchapter
S corporations), partnership | ||||||
21 | and trust, for each taxable year ending after
June 30, 1979. | ||||||
22 | Such taxes are imposed on the privilege of earning or
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23 | receiving income in or as a resident of this State. The | ||||||
24 | Personal Property
Tax Replacement Income Tax shall be in | ||||||
25 | addition to the income tax imposed
by subsections (a) and (b) | ||||||
26 | of this Section and in addition to all other
occupation or |
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1 | privilege taxes imposed by this State or by any municipal
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2 | corporation or political subdivision thereof. | ||||||
3 | (d) Additional Personal Property Tax Replacement Income | ||||||
4 | Tax Rates.
The personal property tax replacement income tax | ||||||
5 | imposed by this subsection
and subsection (c) of this Section | ||||||
6 | in the case of a corporation, other
than a Subchapter S | ||||||
7 | corporation and except as adjusted by subsection (d-1),
shall | ||||||
8 | be an additional amount equal to
2.85% of such taxpayer's net | ||||||
9 | income for the taxable year, except that
beginning on January | ||||||
10 | 1, 1981, and thereafter, the rate of 2.85% specified
in this | ||||||
11 | subsection shall be reduced to 2.5%, and in the case of a
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12 | partnership, trust or a Subchapter S corporation shall be an | ||||||
13 | additional
amount equal to 1.5% of such taxpayer's net income | ||||||
14 | for the taxable year. | ||||||
15 | (d-1) Rate reduction for certain foreign insurers. In the | ||||||
16 | case of a
foreign insurer, as defined by Section 35A-5 of the | ||||||
17 | Illinois Insurance Code,
whose state or country of domicile | ||||||
18 | imposes on insurers domiciled in Illinois
a retaliatory tax | ||||||
19 | (excluding any insurer
whose premiums from reinsurance assumed | ||||||
20 | are 50% or more of its total insurance
premiums as determined | ||||||
21 | under paragraph (2) of subsection (b) of Section 304,
except | ||||||
22 | that for purposes of this determination premiums from | ||||||
23 | reinsurance do
not include premiums from inter-affiliate | ||||||
24 | reinsurance arrangements),
beginning with taxable years ending | ||||||
25 | on or after December 31, 1999,
the sum of
the rates of tax | ||||||
26 | imposed by subsections (b) and (d) shall be reduced (but not
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1 | increased) to the rate at which the total amount of tax imposed | ||||||
2 | under this Act,
net of all credits allowed under this Act, | ||||||
3 | shall equal (i) the total amount of
tax that would be imposed | ||||||
4 | on the foreign insurer's net income allocable to
Illinois for | ||||||
5 | the taxable year by such foreign insurer's state or country of
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6 | domicile if that net income were subject to all income taxes | ||||||
7 | and taxes
measured by net income imposed by such foreign | ||||||
8 | insurer's state or country of
domicile, net of all credits | ||||||
9 | allowed or (ii) a rate of zero if no such tax is
imposed on | ||||||
10 | such income by the foreign insurer's state of domicile.
For | ||||||
11 | the purposes of this subsection (d-1), an inter-affiliate | ||||||
12 | includes a
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 | ||||||
17 | foreign insurer under
this Act for a taxable year, net | ||||||
18 | of all credits allowed under this Act, plus | ||||||
19 | (B) the privilege tax imposed by Section 409 of | ||||||
20 | the Illinois Insurance
Code, the fire insurance | ||||||
21 | company tax imposed by Section 12 of the Fire
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22 | Investigation Act, and the fire department taxes | ||||||
23 | imposed under Section 11-10-1
of the Illinois | ||||||
24 | Municipal Code, | ||||||
25 | equals 1.25% for taxable years ending prior to December | ||||||
26 | 31, 2003, or
1.75% for taxable years ending on or after |
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1 | December 31, 2003, of the net
taxable premiums written for | ||||||
2 | the taxable year,
as described by subsection (1) of | ||||||
3 | Section 409 of the Illinois Insurance Code.
This paragraph | ||||||
4 | will in no event increase the rates imposed under | ||||||
5 | subsections
(b) and (d). | ||||||
6 | (2) Any reduction in the rates of tax imposed by this | ||||||
7 | subsection shall be
applied first against the rates | ||||||
8 | imposed by subsection (b) and only after the
tax imposed | ||||||
9 | by subsection (a) net of all credits allowed under this | ||||||
10 | Section
other than the credit allowed under subsection (i) | ||||||
11 | has been reduced to zero,
against the rates imposed by | ||||||
12 | subsection (d). | ||||||
13 | This subsection (d-1) is exempt from the provisions of | ||||||
14 | Section 250. | ||||||
15 | (e) Investment credit. A taxpayer shall be allowed a | ||||||
16 | credit
against the Personal Property Tax Replacement Income | ||||||
17 | Tax for
investment in qualified property. | ||||||
18 | (1) A taxpayer shall be allowed a credit equal to .5% | ||||||
19 | of
the basis of qualified property placed in service | ||||||
20 | during the taxable year,
provided such property is placed | ||||||
21 | in service on or after
July 1, 1984. There shall be allowed | ||||||
22 | an additional credit equal
to .5% of the basis of | ||||||
23 | qualified property placed in service during the
taxable | ||||||
24 | year, provided such property is placed in service on or
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25 | after July 1, 1986, and the taxpayer's base employment
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26 | within Illinois has increased by 1% or more over the |
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1 | preceding year as
determined by the taxpayer's employment | ||||||
2 | records filed with the
Illinois Department of Employment | ||||||
3 | Security. Taxpayers who are new to
Illinois shall be | ||||||
4 | deemed to have met the 1% growth in base employment for
the | ||||||
5 | first year in which they file employment records with the | ||||||
6 | Illinois
Department of Employment Security. The provisions | ||||||
7 | added to this Section by
Public Act 85-1200 (and restored | ||||||
8 | by Public Act 87-895) shall be
construed as declaratory of | ||||||
9 | existing law and not as a new enactment. If,
in any year, | ||||||
10 | the increase in base employment within Illinois over the
| ||||||
11 | preceding year is less than 1%, the additional credit | ||||||
12 | shall be limited to that
percentage times a fraction, the | ||||||
13 | numerator of which is .5% and the denominator
of which is | ||||||
14 | 1%, but shall not exceed .5%. The investment credit shall | ||||||
15 | not be
allowed to the extent that it would reduce a | ||||||
16 | taxpayer's liability in any tax
year below zero, nor may | ||||||
17 | any credit for qualified property be allowed for any
year | ||||||
18 | other than the year in which the property was placed in | ||||||
19 | service in
Illinois. For tax years ending on or after | ||||||
20 | December 31, 1987, and on or
before December 31, 1988, the | ||||||
21 | credit shall be allowed for the tax year in
which the | ||||||
22 | property is placed in service, or, if the amount of the | ||||||
23 | credit
exceeds the tax liability for that year, whether it | ||||||
24 | exceeds the original
liability or the liability as later | ||||||
25 | amended, such excess may be carried
forward and applied to | ||||||
26 | the tax liability of the 5 taxable years following
the |
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1 | excess credit years if the taxpayer (i) makes investments | ||||||
2 | which cause
the creation of a minimum of 2,000 full-time | ||||||
3 | equivalent jobs in Illinois,
(ii) is located in an | ||||||
4 | enterprise zone established pursuant to the Illinois
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5 | Enterprise Zone Act and (iii) is certified by the | ||||||
6 | Department of Commerce
and Community Affairs (now | ||||||
7 | Department of Commerce and Economic Opportunity) as | ||||||
8 | complying with the requirements specified in
clause (i) | ||||||
9 | and (ii) by July 1, 1986. The Department of Commerce and
| ||||||
10 | Community Affairs (now Department of Commerce and Economic | ||||||
11 | Opportunity) shall notify the Department of Revenue of all | ||||||
12 | such
certifications immediately. For tax years ending | ||||||
13 | after December 31, 1988,
the credit shall be allowed for | ||||||
14 | the tax year in which the property is
placed in service, | ||||||
15 | or, if the amount of the credit exceeds the tax
liability | ||||||
16 | for that year, whether it exceeds the original liability | ||||||
17 | or the
liability as later amended, such excess may be | ||||||
18 | carried forward and applied
to the tax liability of the 5 | ||||||
19 | taxable years following the excess credit
years. The | ||||||
20 | credit shall be applied to the earliest year for which | ||||||
21 | there is
a liability. If there is credit from more than one | ||||||
22 | tax year that is
available to offset a liability, earlier | ||||||
23 | credit shall be applied first. | ||||||
24 | (2) The term "qualified property" means property | ||||||
25 | which: | ||||||
26 | (A) is tangible, whether new or used, including |
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1 | buildings and structural
components of buildings and | ||||||
2 | signs that are real property, but not including
land | ||||||
3 | or improvements to real property that are not a | ||||||
4 | structural component of a
building such as | ||||||
5 | landscaping, sewer lines, local access roads, fencing, | ||||||
6 | parking
lots, and other appurtenances; | ||||||
7 | (B) is depreciable pursuant to Section 167 of the | ||||||
8 | Internal Revenue Code,
except that "3-year property" | ||||||
9 | as defined in Section 168(c)(2)(A) of that
Code is not | ||||||
10 | eligible for the credit provided by this subsection | ||||||
11 | (e); | ||||||
12 | (C) is acquired by purchase as defined in Section | ||||||
13 | 179(d) of
the Internal Revenue Code; | ||||||
14 | (D) is used in Illinois by a taxpayer who is | ||||||
15 | primarily engaged in
manufacturing, or in mining coal | ||||||
16 | or fluorite, or in retailing, or was placed in service | ||||||
17 | on or after July 1, 2006 in a River Edge Redevelopment | ||||||
18 | Zone established pursuant to the River Edge | ||||||
19 | Redevelopment Zone Act; and | ||||||
20 | (E) has not previously been used in Illinois in | ||||||
21 | such a manner and by
such a person as would qualify for | ||||||
22 | the credit provided by this subsection
(e) or | ||||||
23 | subsection (f). | ||||||
24 | (3) For purposes of this subsection (e), | ||||||
25 | "manufacturing" means
the material staging and production | ||||||
26 | of tangible personal property by
procedures commonly |
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1 | regarded as manufacturing, processing, fabrication, or
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2 | assembling which changes some existing material into new | ||||||
3 | shapes, new
qualities, or new combinations. For purposes | ||||||
4 | of this subsection
(e) the term "mining" shall have the | ||||||
5 | same meaning as the term "mining" in
Section 613(c) of the | ||||||
6 | Internal Revenue Code. For purposes of this subsection
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7 | (e), the term "retailing" means the sale of tangible | ||||||
8 | personal property for use or consumption and not for | ||||||
9 | resale, or
services rendered in conjunction with the sale | ||||||
10 | of tangible personal property for use or consumption and | ||||||
11 | not for resale. For purposes of this subsection (e), | ||||||
12 | "tangible personal property" has the same meaning as when | ||||||
13 | that term is used in the Retailers' Occupation Tax Act, | ||||||
14 | and, for taxable years ending after December 31, 2008, | ||||||
15 | does not include the generation, transmission, or | ||||||
16 | distribution of electricity. | ||||||
17 | (4) The basis of qualified property shall be the basis
| ||||||
18 | used to compute the depreciation deduction for federal | ||||||
19 | income tax purposes. | ||||||
20 | (5) If the basis of the property for federal income | ||||||
21 | tax depreciation
purposes is increased after it has been | ||||||
22 | placed in service in Illinois by
the taxpayer, the amount | ||||||
23 | of such increase shall be deemed property placed
in | ||||||
24 | service on the date of such increase in basis. | ||||||
25 | (6) The term "placed in service" shall have the same
| ||||||
26 | meaning as under Section 46 of the Internal Revenue Code. |
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1 | (7) If during any taxable year, any property ceases to
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2 | be qualified property in the hands of the taxpayer within | ||||||
3 | 48 months after
being placed in service, or the situs of | ||||||
4 | any qualified property is
moved outside Illinois within 48 | ||||||
5 | months after being placed in service, the
Personal | ||||||
6 | Property Tax Replacement Income Tax for such taxable year | ||||||
7 | shall be
increased. Such increase shall be determined by | ||||||
8 | (i) recomputing the
investment credit which would have | ||||||
9 | been allowed for the year in which
credit for such | ||||||
10 | property was originally allowed by eliminating such
| ||||||
11 | property from such computation and, (ii) subtracting such | ||||||
12 | recomputed credit
from the amount of credit previously | ||||||
13 | allowed. For the purposes of this
paragraph (7), a | ||||||
14 | reduction of the basis of qualified property resulting
| ||||||
15 | from a redetermination of the purchase price shall be | ||||||
16 | deemed a disposition
of qualified property to the extent | ||||||
17 | of such reduction. | ||||||
18 | (8) Unless the investment credit is extended by law, | ||||||
19 | the
basis of qualified property shall not include costs | ||||||
20 | incurred after
December 31, 2018, except for costs | ||||||
21 | incurred pursuant to a binding
contract entered into on or | ||||||
22 | before December 31, 2018. | ||||||
23 | (9) Each taxable year ending before December 31, 2000, | ||||||
24 | a partnership may
elect to pass through to its
partners | ||||||
25 | the credits to which the partnership is entitled under | ||||||
26 | this subsection
(e) for the taxable year. A partner may |
| |||||||
| |||||||
1 | use the credit allocated to him or her
under this | ||||||
2 | paragraph only against the tax imposed in subsections (c) | ||||||
3 | and (d) of
this Section. If the partnership makes that | ||||||
4 | election, those credits shall be
allocated among the | ||||||
5 | partners in the partnership in accordance with the rules
| ||||||
6 | set forth in Section 704(b) of the Internal Revenue Code, | ||||||
7 | and the rules
promulgated under that Section, and the | ||||||
8 | allocated amount of the credits shall
be allowed to the | ||||||
9 | partners for that taxable year. The partnership shall make
| ||||||
10 | this election on its Personal Property Tax Replacement | ||||||
11 | Income Tax return for
that taxable year. The election to | ||||||
12 | pass through the credits shall be
irrevocable. | ||||||
13 | For taxable years ending on or after December 31, | ||||||
14 | 2000, a
partner that qualifies its
partnership for a | ||||||
15 | subtraction under subparagraph (I) of paragraph (2) of
| ||||||
16 | subsection (d) of Section 203 or a shareholder that | ||||||
17 | qualifies a Subchapter S
corporation for a subtraction | ||||||
18 | under subparagraph (S) of paragraph (2) of
subsection (b) | ||||||
19 | of Section 203 shall be allowed a credit under this | ||||||
20 | subsection
(e) equal to its share of the credit earned | ||||||
21 | under this subsection (e) during
the taxable year by the | ||||||
22 | partnership or Subchapter S corporation, determined in
| ||||||
23 | accordance with the determination of income and | ||||||
24 | distributive share of
income under Sections 702 and 704 | ||||||
25 | and Subchapter S of the Internal Revenue
Code. This | ||||||
26 | paragraph is exempt from the provisions of Section 250. |
| |||||||
| |||||||
1 | (f) Investment credit; Enterprise Zone; River Edge | ||||||
2 | Redevelopment Zone. | ||||||
3 | (1) A taxpayer shall be allowed a credit against the | ||||||
4 | tax imposed
by subsections (a) and (b) of this Section for | ||||||
5 | investment in qualified
property which is placed in | ||||||
6 | service in an Enterprise Zone created
pursuant to the | ||||||
7 | Illinois Enterprise Zone Act or, for property placed in | ||||||
8 | service on or after July 1, 2006, a River Edge | ||||||
9 | Redevelopment Zone established pursuant to the River Edge | ||||||
10 | Redevelopment Zone Act. For partners, shareholders
of | ||||||
11 | Subchapter S corporations, and owners of limited liability | ||||||
12 | companies,
if the liability company is treated as a | ||||||
13 | partnership for purposes of
federal and State income | ||||||
14 | taxation, there shall be allowed a credit under
this | ||||||
15 | subsection (f) to be determined in accordance with the | ||||||
16 | determination
of income and distributive share of income | ||||||
17 | under Sections 702 and 704 and
Subchapter S of the | ||||||
18 | Internal Revenue Code. The credit shall be .5% of the
| ||||||
19 | basis for such property. The credit shall be available | ||||||
20 | only in the taxable
year in which the property is placed in | ||||||
21 | service in the Enterprise Zone or River Edge Redevelopment | ||||||
22 | Zone and
shall not be allowed to the extent that it would | ||||||
23 | reduce a taxpayer's
liability for the tax imposed by | ||||||
24 | subsections (a) and (b) of this Section to
below zero. For | ||||||
25 | tax years ending on or after December 31, 1985, the credit
| ||||||
26 | shall be allowed for the tax year in which the property is |
| |||||||
| |||||||
1 | placed in
service, or, if the amount of the credit exceeds | ||||||
2 | the tax liability for that
year, whether it exceeds the | ||||||
3 | original liability or the liability as later
amended, such | ||||||
4 | excess may be carried forward and applied to the tax
| ||||||
5 | liability of the 5 taxable years following the excess | ||||||
6 | credit year.
The credit shall be applied to the earliest | ||||||
7 | year for which there is a
liability. If there is credit | ||||||
8 | from more than one tax year that is available
to offset a | ||||||
9 | liability, the credit accruing first in time shall be | ||||||
10 | applied
first. | ||||||
11 | (2) The term qualified property means property which: | ||||||
12 | (A) is tangible, whether new or used, including | ||||||
13 | buildings and
structural components of buildings; | ||||||
14 | (B) is depreciable pursuant to Section 167 of the | ||||||
15 | Internal Revenue
Code, except that "3-year property" | ||||||
16 | as defined in Section 168(c)(2)(A) of
that Code is not | ||||||
17 | eligible for the credit provided by this subsection | ||||||
18 | (f); | ||||||
19 | (C) is acquired by purchase as defined in Section | ||||||
20 | 179(d) of
the Internal Revenue Code; | ||||||
21 | (D) is used in the Enterprise Zone or River Edge | ||||||
22 | Redevelopment Zone by the taxpayer; and | ||||||
23 | (E) has not been previously used in Illinois in | ||||||
24 | such a manner and by
such a person as would qualify for | ||||||
25 | the credit provided by this subsection
(f) or | ||||||
26 | subsection (e). |
| |||||||
| |||||||
1 | (3) The basis of qualified property shall be the basis | ||||||
2 | used to compute
the depreciation deduction for federal | ||||||
3 | income tax purposes. | ||||||
4 | (4) If the basis of the property for federal income | ||||||
5 | tax depreciation
purposes is increased after it has been | ||||||
6 | placed in service in the Enterprise
Zone or River Edge | ||||||
7 | Redevelopment Zone by the taxpayer, the amount of such | ||||||
8 | increase shall be deemed property
placed in service on the | ||||||
9 | date of such increase in basis. | ||||||
10 | (5) The term "placed in service" shall have the same | ||||||
11 | meaning as under
Section 46 of the Internal Revenue Code. | ||||||
12 | (6) If during any taxable year, any property ceases to | ||||||
13 | be qualified
property in the hands of the taxpayer within | ||||||
14 | 48 months after being placed
in service, or the situs of | ||||||
15 | any qualified property is moved outside the
Enterprise | ||||||
16 | Zone or River Edge Redevelopment Zone within 48 months | ||||||
17 | after being placed in service, the tax
imposed under | ||||||
18 | subsections (a) and (b) of this Section for such taxable | ||||||
19 | year
shall be increased. Such increase shall be determined | ||||||
20 | by (i) recomputing
the investment credit which would have | ||||||
21 | been allowed for the year in which
credit for such | ||||||
22 | property was originally allowed by eliminating such
| ||||||
23 | property from such computation, and (ii) subtracting such | ||||||
24 | recomputed credit
from the amount of credit previously | ||||||
25 | allowed. For the purposes of this
paragraph (6), a | ||||||
26 | reduction of the basis of qualified property resulting
|
| |||||||
| |||||||
1 | from a redetermination of the purchase price shall be | ||||||
2 | deemed a disposition
of qualified property to the extent | ||||||
3 | of such reduction. | ||||||
4 | (7) There shall be allowed an additional credit equal | ||||||
5 | to 0.5% of the basis of qualified property placed in | ||||||
6 | service during the taxable year in a River Edge | ||||||
7 | Redevelopment Zone, provided such property is placed in | ||||||
8 | service on or after July 1, 2006, and the taxpayer's base | ||||||
9 | employment within Illinois has increased by 1% or more | ||||||
10 | over the preceding year as determined by the taxpayer's | ||||||
11 | employment records filed with the Illinois Department of | ||||||
12 | Employment Security. Taxpayers who are new to Illinois | ||||||
13 | shall be deemed to have met the 1% growth in base | ||||||
14 | employment for the first year in which they file | ||||||
15 | employment records with the Illinois Department of | ||||||
16 | Employment Security. If, in any year, the increase in base | ||||||
17 | employment within Illinois over the preceding year is less | ||||||
18 | than 1%, the additional credit shall be limited to that | ||||||
19 | percentage times a fraction, the numerator of which is | ||||||
20 | 0.5% and the denominator of which is 1%, but shall not | ||||||
21 | exceed 0.5%.
| ||||||
22 | (8) For taxable years beginning on or after January 1, | ||||||
23 | 2021, there shall be allowed an Enterprise Zone | ||||||
24 | construction jobs credit against the taxes imposed under | ||||||
25 | subsections (a) and (b) of this Section as provided in | ||||||
26 | Section 13 of the Illinois Enterprise Zone Act. |
| |||||||
| |||||||
1 | The credit or credits may not reduce the taxpayer's | ||||||
2 | liability to less than zero. If the amount of the credit or | ||||||
3 | credits exceeds the taxpayer's liability, the excess may | ||||||
4 | be carried forward and applied against the taxpayer's | ||||||
5 | liability in succeeding calendar years in the same manner | ||||||
6 | provided under paragraph (4) of Section 211 of this Act. | ||||||
7 | The credit or credits shall be applied to the earliest | ||||||
8 | year for which there is a tax liability. If there are | ||||||
9 | credits from more than one taxable year that are available | ||||||
10 | to offset a liability, the earlier credit shall be applied | ||||||
11 | first. | ||||||
12 | For partners, shareholders of Subchapter S | ||||||
13 | corporations, and owners of limited liability companies, | ||||||
14 | if the liability company is treated as a partnership for | ||||||
15 | the purposes of federal and State income taxation, there | ||||||
16 | shall be allowed a credit under this Section to be | ||||||
17 | determined in accordance with the determination of income | ||||||
18 | and distributive share of income under Sections 702 and | ||||||
19 | 704 and Subchapter S of the Internal Revenue Code. | ||||||
20 | The total aggregate amount of credits awarded under | ||||||
21 | the Blue Collar Jobs Act (Article 20 of Public Act 101-9 | ||||||
22 | this amendatory Act of the 101st General Assembly ) shall | ||||||
23 | not exceed $20,000,000 in any State fiscal year . | ||||||
24 | This paragraph (8) is exempt from the provisions of | ||||||
25 | Section 250. | ||||||
26 | (g) (Blank). |
| |||||||
| |||||||
1 | (h) Investment credit; High Impact Business. | ||||||
2 | (1) Subject to subsections (b) and (b-5) of Section
| ||||||
3 | 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall | ||||||
4 | be allowed a credit
against the tax imposed by subsections | ||||||
5 | (a) and (b) of this Section for
investment in qualified
| ||||||
6 | property which is placed in service by a Department of | ||||||
7 | Commerce and Economic Opportunity
designated High Impact | ||||||
8 | Business. The credit shall be .5% of the basis
for such | ||||||
9 | property. The credit shall not be available (i) until the | ||||||
10 | minimum
investments in qualified property set forth in | ||||||
11 | subdivision (a)(3)(A) of
Section 5.5 of the Illinois
| ||||||
12 | Enterprise Zone Act have been satisfied
or (ii) until the | ||||||
13 | time authorized in subsection (b-5) of the Illinois
| ||||||
14 | Enterprise Zone Act for entities designated as High Impact | ||||||
15 | Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and | ||||||
16 | (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone | ||||||
17 | Act, and shall not be allowed to the extent that it would
| ||||||
18 | reduce a taxpayer's liability for the tax imposed by | ||||||
19 | subsections (a) and (b) of
this Section to below zero. The | ||||||
20 | credit applicable to such investments shall be
taken in | ||||||
21 | the taxable year in which such investments have been | ||||||
22 | completed. The
credit for additional investments beyond | ||||||
23 | the minimum investment by a designated
high impact | ||||||
24 | business authorized under subdivision (a)(3)(A) of Section | ||||||
25 | 5.5 of
the Illinois Enterprise Zone Act shall be available | ||||||
26 | only in the taxable year in
which the property is placed in |
| |||||||
| |||||||
1 | service and shall not be allowed to the extent
that it | ||||||
2 | would reduce a taxpayer's liability for the tax imposed by | ||||||
3 | subsections
(a) and (b) of this Section to below zero.
For | ||||||
4 | tax years ending on or after December 31, 1987, the credit | ||||||
5 | shall be
allowed for the tax year in which the property is | ||||||
6 | placed in service, or, if
the amount of the credit exceeds | ||||||
7 | the tax liability for that year, whether
it exceeds the | ||||||
8 | original liability or the liability as later amended, such
| ||||||
9 | excess may be carried forward and applied to the tax | ||||||
10 | liability of the 5
taxable years following the excess | ||||||
11 | credit year. The credit shall be
applied to the earliest | ||||||
12 | year for which there is a liability. If there is
credit | ||||||
13 | from more than one tax year that is available to offset a | ||||||
14 | liability,
the credit accruing first in time shall be | ||||||
15 | applied first. | ||||||
16 | Changes made in this subdivision (h)(1) by Public Act | ||||||
17 | 88-670
restore changes made by Public Act 85-1182 and | ||||||
18 | reflect existing law. | ||||||
19 | (2) The term qualified property means property which: | ||||||
20 | (A) is tangible, whether new or used, including | ||||||
21 | buildings and
structural components of buildings; | ||||||
22 | (B) is depreciable pursuant to Section 167 of the | ||||||
23 | Internal Revenue
Code, except that "3-year property" | ||||||
24 | as defined in Section 168(c)(2)(A) of
that Code is not | ||||||
25 | eligible for the credit provided by this subsection | ||||||
26 | (h); |
| |||||||
| |||||||
1 | (C) is acquired by purchase as defined in Section | ||||||
2 | 179(d) of the
Internal Revenue Code; and | ||||||
3 | (D) is not eligible for the Enterprise Zone | ||||||
4 | Investment Credit provided
by subsection (f) of this | ||||||
5 | Section. | ||||||
6 | (3) The basis of qualified property shall be the basis | ||||||
7 | used to compute
the depreciation deduction for federal | ||||||
8 | income tax purposes. | ||||||
9 | (4) If the basis of the property for federal income | ||||||
10 | tax depreciation
purposes is increased after it has been | ||||||
11 | placed in service in a federally
designated Foreign Trade | ||||||
12 | Zone or Sub-Zone located in Illinois by the taxpayer,
the | ||||||
13 | amount of such increase shall be deemed property placed in | ||||||
14 | service on
the date of such increase in basis. | ||||||
15 | (5) The term "placed in service" shall have the same | ||||||
16 | meaning as under
Section 46 of the Internal Revenue Code. | ||||||
17 | (6) If during any taxable year ending on or before | ||||||
18 | December 31, 1996,
any property ceases to be qualified
| ||||||
19 | property in the hands of the taxpayer within 48 months | ||||||
20 | after being placed
in service, or the situs of any | ||||||
21 | qualified property is moved outside
Illinois within 48 | ||||||
22 | months after being placed in service, the tax imposed
| ||||||
23 | under subsections (a) and (b) of this Section for such | ||||||
24 | taxable year shall
be increased. Such increase shall be | ||||||
25 | determined by (i) recomputing the
investment credit which | ||||||
26 | would have been allowed for the year in which
credit for |
| |||||||
| |||||||
1 | such property was originally allowed by eliminating such
| ||||||
2 | property from such computation, and (ii) subtracting such | ||||||
3 | recomputed credit
from the amount of credit previously | ||||||
4 | allowed. For the purposes of this
paragraph (6), a | ||||||
5 | reduction of the basis of qualified property resulting
| ||||||
6 | from a redetermination of the purchase price shall be | ||||||
7 | deemed a disposition
of qualified property to the extent | ||||||
8 | of such reduction. | ||||||
9 | (7) Beginning with tax years ending after December 31, | ||||||
10 | 1996, if a
taxpayer qualifies for the credit under this | ||||||
11 | subsection (h) and thereby is
granted a tax abatement and | ||||||
12 | the taxpayer relocates its entire facility in
violation of | ||||||
13 | the explicit terms and length of the contract under | ||||||
14 | Section
18-183 of the Property Tax Code, the tax imposed | ||||||
15 | under subsections
(a) and (b) of this Section shall be | ||||||
16 | increased for the taxable year
in which the taxpayer | ||||||
17 | relocated its facility by an amount equal to the
amount of | ||||||
18 | credit received by the taxpayer under this subsection (h). | ||||||
19 | (h-5) High Impact Business construction constructions jobs | ||||||
20 | credit. For taxable years beginning on or after January 1, | ||||||
21 | 2021, there shall also be allowed a High Impact Business | ||||||
22 | construction jobs credit against the tax imposed under | ||||||
23 | subsections (a) and (b) of this Section as provided in | ||||||
24 | subsections (i) and (j) of Section 5.5 of the Illinois | ||||||
25 | Enterprise Zone Act. | ||||||
26 | The credit or credits may not reduce the taxpayer's |
| |||||||
| |||||||
1 | liability to less than zero. If the amount of the credit or | ||||||
2 | credits exceeds the taxpayer's liability, the excess may be | ||||||
3 | carried forward and applied against the taxpayer's liability | ||||||
4 | in succeeding calendar years in the manner provided under | ||||||
5 | paragraph (4) of Section 211 of this Act. The credit or credits | ||||||
6 | shall be applied to the earliest year for which there is a tax | ||||||
7 | liability. If there are credits from more than one taxable | ||||||
8 | year that are available to offset a liability, the earlier | ||||||
9 | credit shall be applied first. | ||||||
10 | For partners, shareholders of Subchapter S corporations, | ||||||
11 | and owners of limited liability companies, if the liability | ||||||
12 | company is treated as a partnership for the purposes of | ||||||
13 | federal and State income taxation, there shall be allowed a | ||||||
14 | credit under this Section to be determined in accordance with | ||||||
15 | the determination of income and distributive share of income | ||||||
16 | under Sections 702 and 704 and Subchapter S of the Internal | ||||||
17 | Revenue Code. | ||||||
18 | The total aggregate amount of credits awarded under the | ||||||
19 | Blue Collar Jobs Act (Article 20 of Public Act 101-9 this | ||||||
20 | amendatory Act of the 101st General Assembly ) shall not exceed | ||||||
21 | $20,000,000 in any State fiscal year . | ||||||
22 | This subsection (h-5) is exempt from the provisions of | ||||||
23 | Section 250. | ||||||
24 | (i) Credit for Personal Property Tax Replacement Income | ||||||
25 | Tax.
For tax years ending prior to December 31, 2003, a credit | ||||||
26 | shall be allowed
against the tax imposed by
subsections (a) |
| |||||||
| |||||||
1 | and (b) of this Section for the tax imposed by subsections (c)
| ||||||
2 | and (d) of this Section. This credit shall be computed by | ||||||
3 | multiplying the tax
imposed by subsections (c) and (d) of this | ||||||
4 | Section by a fraction, the numerator
of which is base income | ||||||
5 | allocable to Illinois and the denominator of which is
Illinois | ||||||
6 | base income, and further multiplying the product by the tax | ||||||
7 | rate
imposed by subsections (a) and (b) of this Section. | ||||||
8 | Any credit earned on or after December 31, 1986 under
this | ||||||
9 | subsection which is unused in the year
the credit is computed | ||||||
10 | because it exceeds the tax liability imposed by
subsections | ||||||
11 | (a) and (b) for that year (whether it exceeds the original
| ||||||
12 | liability or the liability as later amended) may be carried | ||||||
13 | forward and
applied to the tax liability imposed by | ||||||
14 | subsections (a) and (b) of the 5
taxable years following the | ||||||
15 | excess credit year, provided that no credit may
be carried | ||||||
16 | forward to any year ending on or
after December 31, 2003. This | ||||||
17 | credit shall be
applied first to the earliest year for which | ||||||
18 | 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. | ||||||
22 | If, during any taxable year ending on or after December | ||||||
23 | 31, 1986, the
tax imposed by subsections (c) and (d) of this | ||||||
24 | Section for which a taxpayer
has claimed a credit under this | ||||||
25 | subsection (i) is reduced, the amount of
credit for such tax | ||||||
26 | shall also be reduced. Such reduction shall be
determined by |
| |||||||
| |||||||
1 | recomputing the credit to take into account the reduced tax
| ||||||
2 | imposed by subsections (c) and (d). If any portion of the
| ||||||
3 | reduced amount of credit has been carried to a different | ||||||
4 | taxable year, an
amended return shall be filed for such | ||||||
5 | taxable year to reduce the amount of
credit claimed. | ||||||
6 | (j) Training expense credit. Beginning with tax years | ||||||
7 | ending on or
after December 31, 1986 and prior to December 31, | ||||||
8 | 2003, a taxpayer shall be
allowed a credit against the
tax | ||||||
9 | imposed by subsections (a) and (b) under this Section
for all | ||||||
10 | amounts paid or accrued, on behalf of all persons
employed by | ||||||
11 | the taxpayer in Illinois or Illinois residents employed
| ||||||
12 | outside of Illinois by a taxpayer, for educational or | ||||||
13 | vocational training in
semi-technical or technical fields or | ||||||
14 | semi-skilled or skilled fields, which
were deducted from gross | ||||||
15 | income in the computation of taxable income. The
credit | ||||||
16 | against the tax imposed by subsections (a) and (b) shall be | ||||||
17 | 1.6% of
such training expenses. For partners, shareholders of | ||||||
18 | subchapter S
corporations, and owners of limited liability | ||||||
19 | companies, if the liability
company is treated as a | ||||||
20 | partnership for purposes of federal and State income
taxation, | ||||||
21 | there shall be allowed a credit under this subsection (j) to be
| ||||||
22 | determined in accordance with the determination of income and | ||||||
23 | distributive
share of income under Sections 702 and 704 and | ||||||
24 | subchapter S of the Internal
Revenue Code. | ||||||
25 | Any credit allowed under this subsection which is unused | ||||||
26 | in the year
the credit is earned may be carried forward to each |
| |||||||
| |||||||
1 | of the 5 taxable
years following the year for which the credit | ||||||
2 | is first computed until it is
used. This credit shall be | ||||||
3 | applied first to the earliest year for which
there is a | ||||||
4 | liability. If there is a credit under this subsection from | ||||||
5 | more
than one tax year that is available to offset a liability , | ||||||
6 | the earliest
credit arising under this subsection shall be | ||||||
7 | applied first. No carryforward
credit may be claimed in any | ||||||
8 | tax year ending on or after
December 31, 2003. | ||||||
9 | (k) Research and development credit. For tax years ending | ||||||
10 | after July 1, 1990 and prior to
December 31, 2003, and | ||||||
11 | beginning again for tax years ending on or after December 31, | ||||||
12 | 2004, and ending prior to January 1, 2027, a taxpayer shall be
| ||||||
13 | allowed a credit against the tax imposed by subsections (a) | ||||||
14 | and (b) of this
Section for increasing research activities in | ||||||
15 | this State. The credit
allowed against the tax imposed by | ||||||
16 | subsections (a) and (b) shall be equal
to 6 1/2% of the | ||||||
17 | qualifying expenditures for increasing research activities
in | ||||||
18 | this State. For partners, shareholders of subchapter S | ||||||
19 | corporations, and
owners of limited liability companies, if | ||||||
20 | the liability company is treated as a
partnership for purposes | ||||||
21 | of federal and State income taxation, there shall be
allowed a | ||||||
22 | credit under this subsection to be determined in accordance | ||||||
23 | with the
determination of income and distributive share of | ||||||
24 | income under Sections 702 and
704 and subchapter S of the | ||||||
25 | Internal Revenue Code. | ||||||
26 | For purposes of this subsection, the following terms have |
| |||||||
| |||||||
1 | the following meanings. "Qualifying "qualifying expenditures" | ||||||
2 | means the
qualifying expenditures as defined for the federal | ||||||
3 | credit for increasing
research activities which would be | ||||||
4 | allowable under Section 41 of the
Internal Revenue Code and | ||||||
5 | which are conducted in this State . "Qualifying , "qualifying
| ||||||
6 | expenditures for increasing research activities in this State" | ||||||
7 | means the
excess of qualifying expenditures for the taxable | ||||||
8 | year in which incurred
over qualifying expenditures for the | ||||||
9 | base period . "Qualifying , "qualifying expenditures
for the | ||||||
10 | base period" means : (1) for taxable years ending prior to | ||||||
11 | December 31, 2021, the average of the qualifying expenditures | ||||||
12 | for
each year in the base period ; and (2) for taxable years | ||||||
13 | ending on or after December 31, 2021, 50% of the average of the | ||||||
14 | qualifying expenditures for each year in the base period. | ||||||
15 | "Base , and "base period" means the 3 taxable years
immediately | ||||||
16 | preceding the taxable year for which the determination is
| ||||||
17 | being made. | ||||||
18 | Any credit in excess of the tax liability for the taxable | ||||||
19 | year
may be carried forward. A taxpayer may elect to have the
| ||||||
20 | unused credit shown on its final completed return carried over | ||||||
21 | as a credit
against the tax liability for the following 5 | ||||||
22 | taxable years or until it has
been fully used, whichever | ||||||
23 | occurs first; provided that no credit earned in a tax year | ||||||
24 | ending prior to December 31, 2003 may be carried forward to any | ||||||
25 | year ending on or after December 31, 2003. | ||||||
26 | If an unused credit is carried forward to a given year from |
| |||||||
| |||||||
1 | 2 or more
earlier years, that credit arising in the earliest | ||||||
2 | year will be applied
first against the tax liability for the | ||||||
3 | given year. If a tax liability for
the given year still | ||||||
4 | remains, the credit from the next earliest year will
then be | ||||||
5 | applied, and so on, until all credits have been used or no tax
| ||||||
6 | liability for the given year remains. Any remaining unused | ||||||
7 | credit or
credits then will be carried forward to the next | ||||||
8 | following year in which a
tax liability is incurred, except | ||||||
9 | that no credit can be carried forward to
a year which is more | ||||||
10 | than 5 years after the year in which the expense for
which the | ||||||
11 | credit is given was incurred. | ||||||
12 | No inference shall be drawn from Public Act 91-644 this | ||||||
13 | amendatory Act of the 91st General
Assembly in construing this | ||||||
14 | Section for taxable years beginning before January
1, 1999. | ||||||
15 | It is the intent of the General Assembly that the research | ||||||
16 | and development credit under this subsection (k) shall apply | ||||||
17 | continuously for all tax years ending on or after December 31, | ||||||
18 | 2004 and ending prior to January 1, 2027, including, but not | ||||||
19 | limited to, the period beginning on January 1, 2016 and ending | ||||||
20 | on July 6, 2017 ( the effective date of Public Act 100-22) this | ||||||
21 | amendatory Act of the 100th General Assembly . All actions | ||||||
22 | taken in reliance on the continuation of the credit under this | ||||||
23 | subsection (k) by any taxpayer are hereby validated. | ||||||
24 | This subsection (k) is exempt from the provisions of | ||||||
25 | Section 250. | ||||||
26 | (l) Environmental Remediation Tax Credit. |
| |||||||
| |||||||
1 | (i) For tax years ending after December 31, 1997 and | ||||||
2 | on or before
December 31, 2001, a taxpayer shall be | ||||||
3 | allowed a credit against the tax
imposed by subsections | ||||||
4 | (a) and (b) of this Section for certain amounts paid
for | ||||||
5 | unreimbursed eligible remediation costs, as specified in | ||||||
6 | this subsection.
For purposes of this Section, | ||||||
7 | "unreimbursed eligible remediation costs" means
costs | ||||||
8 | approved by the Illinois Environmental Protection Agency | ||||||
9 | ("Agency") under
Section 58.14 of the Environmental | ||||||
10 | Protection Act that were paid in performing
environmental | ||||||
11 | remediation at a site for which a No Further Remediation | ||||||
12 | Letter
was issued by the Agency and recorded under Section | ||||||
13 | 58.10 of the Environmental
Protection Act. The credit must | ||||||
14 | be claimed for the taxable year in which
Agency approval | ||||||
15 | of the eligible remediation costs is granted. The credit | ||||||
16 | is
not available to any taxpayer if the taxpayer or any | ||||||
17 | related party caused or
contributed to, in any material | ||||||
18 | respect, a release of regulated substances on,
in, or | ||||||
19 | under the site that was identified and addressed by the | ||||||
20 | remedial
action pursuant to the Site Remediation Program | ||||||
21 | of the Environmental Protection
Act. After the Pollution | ||||||
22 | Control Board rules are adopted pursuant to the
Illinois | ||||||
23 | Administrative Procedure Act for the administration and | ||||||
24 | enforcement of
Section 58.9 of the Environmental | ||||||
25 | Protection Act, determinations as to credit
availability | ||||||
26 | for purposes of this Section shall be made consistent with |
| |||||||
| |||||||
1 | those
rules. For purposes of this Section, "taxpayer" | ||||||
2 | includes a person whose tax
attributes the taxpayer has | ||||||
3 | succeeded to under Section 381 of the Internal
Revenue | ||||||
4 | Code and "related party" includes the persons disallowed a | ||||||
5 | deduction
for losses by paragraphs (b), (c), and (f)(1) of | ||||||
6 | Section 267 of the Internal
Revenue Code by virtue of | ||||||
7 | being a related taxpayer, as well as any of its
partners. | ||||||
8 | The credit allowed against the tax imposed by subsections | ||||||
9 | (a) and
(b) shall be equal to 25% of the unreimbursed | ||||||
10 | eligible remediation costs in
excess of $100,000 per site, | ||||||
11 | except that the $100,000 threshold shall not apply
to any | ||||||
12 | site contained in an enterprise zone as determined by the | ||||||
13 | Department of
Commerce and Community Affairs (now | ||||||
14 | Department of Commerce and Economic Opportunity). The | ||||||
15 | total credit allowed shall not exceed
$40,000 per year | ||||||
16 | with a maximum total of $150,000 per site. For partners | ||||||
17 | and
shareholders of subchapter S corporations, there shall | ||||||
18 | be allowed a credit
under this subsection to be determined | ||||||
19 | in accordance with the determination of
income and | ||||||
20 | distributive share of income under Sections 702 and 704 | ||||||
21 | and
subchapter S of the Internal Revenue Code. | ||||||
22 | (ii) A credit allowed under this subsection that is | ||||||
23 | unused in the year
the credit is earned may be carried | ||||||
24 | forward to each of the 5 taxable years
following the year | ||||||
25 | for which the credit is first earned until it is used.
The | ||||||
26 | term "unused credit" does not include any amounts of |
| |||||||
| |||||||
1 | unreimbursed eligible
remediation costs in excess of the | ||||||
2 | maximum credit per site authorized under
paragraph (i). | ||||||
3 | This credit shall be applied first to the earliest year
| ||||||
4 | for which there is a liability. If there is a credit under | ||||||
5 | this subsection
from more than one tax year that is | ||||||
6 | available to offset a liability, the
earliest credit | ||||||
7 | arising under this subsection shall be applied first. A
| ||||||
8 | credit allowed under this subsection may be sold to a | ||||||
9 | buyer as part of a sale
of all or part of the remediation | ||||||
10 | site for which the credit was granted. The
purchaser of a | ||||||
11 | remediation site and the tax credit shall succeed to the | ||||||
12 | unused
credit and remaining carry-forward period of the | ||||||
13 | seller. To perfect the
transfer, the assignor shall record | ||||||
14 | the transfer in the chain of title for the
site and provide | ||||||
15 | written notice to the Director of the Illinois Department | ||||||
16 | of
Revenue of the assignor's intent to sell the | ||||||
17 | remediation site and the amount of
the tax credit to be | ||||||
18 | transferred as a portion of the sale. In no event may a
| ||||||
19 | credit be transferred to any taxpayer if the taxpayer or a | ||||||
20 | related party would
not be eligible under the provisions | ||||||
21 | of subsection (i). | ||||||
22 | (iii) For purposes of this Section, the term "site" | ||||||
23 | shall have the same
meaning as under Section 58.2 of the | ||||||
24 | Environmental Protection Act. | ||||||
25 | (m) Education expense credit. Beginning with tax years | ||||||
26 | ending after
December 31, 1999, a taxpayer who
is the |
| |||||||
| |||||||
1 | custodian of one or more qualifying pupils shall be allowed a | ||||||
2 | credit
against the tax imposed by subsections (a) and (b) of | ||||||
3 | this Section for
qualified education expenses incurred on | ||||||
4 | behalf of the qualifying pupils.
The credit shall be equal to | ||||||
5 | 25% of qualified education expenses, but in no
event may the | ||||||
6 | total credit under this subsection claimed by a
family that is | ||||||
7 | the
custodian of qualifying pupils exceed (i) $500 for tax | ||||||
8 | years ending prior to December 31, 2017, and (ii) $750 for tax | ||||||
9 | years ending on or after December 31, 2017. In no event shall a | ||||||
10 | credit under
this subsection reduce the taxpayer's liability | ||||||
11 | under this Act to less than
zero. Notwithstanding any other | ||||||
12 | provision of law, for taxable years beginning on or after | ||||||
13 | January 1, 2017, no taxpayer may claim a credit under this | ||||||
14 | subsection (m) if the taxpayer's adjusted gross income for the | ||||||
15 | taxable year exceeds (i) $500,000, in the case of spouses | ||||||
16 | filing a joint federal tax return or (ii) $250,000, in the case | ||||||
17 | of all other taxpayers. This subsection is exempt from the | ||||||
18 | provisions of Section 250 of this
Act. | ||||||
19 | For purposes of this subsection: | ||||||
20 | "Qualifying pupils" means individuals who (i) are | ||||||
21 | residents of the State of
Illinois, (ii) are under the age of | ||||||
22 | 21 at the close of the school year for
which a credit is | ||||||
23 | sought, and (iii) during the school year for which a credit
is | ||||||
24 | sought were full-time pupils enrolled in a kindergarten | ||||||
25 | through twelfth
grade education program at any school, as | ||||||
26 | defined in this subsection. |
| |||||||
| |||||||
1 | "Qualified education expense" means the amount incurred
on | ||||||
2 | behalf of a qualifying pupil in excess of $250 for tuition, | ||||||
3 | book fees, and
lab fees at the school in which the pupil is | ||||||
4 | enrolled during the regular school
year. | ||||||
5 | "School" means any public or nonpublic elementary or | ||||||
6 | secondary school in
Illinois that is in compliance with Title | ||||||
7 | VI of the Civil Rights Act of 1964
and attendance at which | ||||||
8 | satisfies the requirements of Section 26-1 of the
School Code, | ||||||
9 | except that nothing shall be construed to require a child to
| ||||||
10 | attend any particular public or nonpublic school to qualify | ||||||
11 | for the credit
under this Section. | ||||||
12 | "Custodian" means, with respect to qualifying pupils, an | ||||||
13 | Illinois resident
who is a parent, the parents, a legal | ||||||
14 | guardian, or the legal guardians of the
qualifying pupils. | ||||||
15 | (n) River Edge Redevelopment Zone site remediation tax | ||||||
16 | credit.
| ||||||
17 | (i) For tax years ending on or after December 31, | ||||||
18 | 2006, a taxpayer shall be allowed a credit against the tax | ||||||
19 | imposed by subsections (a) and (b) of this Section for | ||||||
20 | certain amounts paid for unreimbursed eligible remediation | ||||||
21 | costs, as specified in this subsection. For purposes of | ||||||
22 | this Section, "unreimbursed eligible remediation costs" | ||||||
23 | means costs approved by the Illinois Environmental | ||||||
24 | Protection Agency ("Agency") under Section 58.14a of the | ||||||
25 | Environmental Protection Act that were paid in performing | ||||||
26 | environmental remediation at a site within a River Edge |
| |||||||
| |||||||
1 | Redevelopment Zone for which a No Further Remediation | ||||||
2 | Letter was issued by the Agency and recorded under Section | ||||||
3 | 58.10 of the Environmental Protection Act. The credit must | ||||||
4 | be claimed for the taxable year in which Agency approval | ||||||
5 | of the eligible remediation costs is granted. The credit | ||||||
6 | is not available to any taxpayer if the taxpayer or any | ||||||
7 | related party caused or contributed to, in any material | ||||||
8 | respect, a release of regulated substances on, in, or | ||||||
9 | under the site that was identified and addressed by the | ||||||
10 | remedial action pursuant to the Site Remediation Program | ||||||
11 | of the Environmental Protection Act. Determinations as to | ||||||
12 | credit availability for purposes of this Section shall be | ||||||
13 | made consistent with rules adopted by the Pollution | ||||||
14 | Control Board pursuant to the Illinois Administrative | ||||||
15 | Procedure Act for the administration and enforcement of | ||||||
16 | Section 58.9 of the Environmental Protection Act. For | ||||||
17 | purposes of this Section, "taxpayer" includes a person | ||||||
18 | whose tax attributes the taxpayer has succeeded to under | ||||||
19 | Section 381 of the Internal Revenue Code and "related | ||||||
20 | party" includes the persons disallowed a deduction for | ||||||
21 | losses by paragraphs (b), (c), and (f)(1) of Section 267 | ||||||
22 | of the Internal Revenue Code by virtue of being a related | ||||||
23 | taxpayer, as well as any of its partners. The credit | ||||||
24 | allowed against the tax imposed by subsections (a) and (b) | ||||||
25 | shall be equal to 25% of the unreimbursed eligible | ||||||
26 | remediation costs in excess of $100,000 per site. |
| |||||||
| |||||||
1 | (ii) A credit allowed under this subsection that is | ||||||
2 | unused in the year the credit is earned may be carried | ||||||
3 | forward to each of the 5 taxable years following the year | ||||||
4 | for which the credit is first earned until it is used. This | ||||||
5 | credit shall be applied first to the earliest year for | ||||||
6 | which there is a liability. If there is a credit under this | ||||||
7 | subsection from more than one tax year that is available | ||||||
8 | to offset a liability, the earliest credit arising under | ||||||
9 | this subsection shall be applied first. A credit allowed | ||||||
10 | under this subsection may be sold to a buyer as part of a | ||||||
11 | sale of all or part of the remediation site for which the | ||||||
12 | credit was granted. The purchaser of a remediation site | ||||||
13 | and the tax credit shall succeed to the unused credit and | ||||||
14 | remaining carry-forward period of the seller. To perfect | ||||||
15 | the transfer, the assignor shall record the transfer in | ||||||
16 | the chain of title for the site and provide written notice | ||||||
17 | to the Director of the Illinois Department of Revenue of | ||||||
18 | the assignor's intent to sell the remediation site and the | ||||||
19 | amount of the tax credit to be transferred as a portion of | ||||||
20 | the sale. In no event may a credit be transferred to any | ||||||
21 | taxpayer if the taxpayer or a related party would not be | ||||||
22 | eligible under the provisions of subsection (i). | ||||||
23 | (iii) For purposes of this Section, the term "site" | ||||||
24 | shall have the same meaning as under Section 58.2 of the | ||||||
25 | Environmental Protection Act. | ||||||
26 | (o) For each of taxable years during the Compassionate Use |
| |||||||
| |||||||
1 | of Medical Cannabis Program, a surcharge is imposed on all | ||||||
2 | taxpayers on income arising from the sale or exchange of | ||||||
3 | capital assets, depreciable business property, real property | ||||||
4 | used in the trade or business, and Section 197 intangibles of | ||||||
5 | an organization registrant under the Compassionate Use of | ||||||
6 | Medical Cannabis Program Act. The amount of the surcharge is | ||||||
7 | equal to the amount of federal income tax liability for the | ||||||
8 | taxable year attributable to those sales and exchanges. The | ||||||
9 | surcharge imposed does not apply if: | ||||||
10 | (1) the medical cannabis cultivation center | ||||||
11 | registration, medical cannabis dispensary registration, or | ||||||
12 | the property of a registration is transferred as a result | ||||||
13 | of any of the following: | ||||||
14 | (A) bankruptcy, a receivership, or a debt | ||||||
15 | adjustment initiated by or against the initial | ||||||
16 | registration or the substantial owners of the initial | ||||||
17 | registration; | ||||||
18 | (B) cancellation, revocation, or termination of | ||||||
19 | any registration by the Illinois Department of Public | ||||||
20 | Health; | ||||||
21 | (C) a determination by the Illinois Department of | ||||||
22 | Public Health that transfer of the registration is in | ||||||
23 | the best interests of Illinois qualifying patients as | ||||||
24 | defined by the Compassionate Use of Medical Cannabis | ||||||
25 | Program Act; | ||||||
26 | (D) the death of an owner of the equity interest in |
| |||||||
| |||||||
1 | a registrant; | ||||||
2 | (E) the acquisition of a controlling interest in | ||||||
3 | the stock or substantially all of the assets of a | ||||||
4 | publicly traded company; | ||||||
5 | (F) a transfer by a parent company to a wholly | ||||||
6 | owned subsidiary; or | ||||||
7 | (G) the transfer or sale to or by one person to | ||||||
8 | another person where both persons were initial owners | ||||||
9 | of the registration when the registration was issued; | ||||||
10 | or | ||||||
11 | (2) the cannabis cultivation center registration, | ||||||
12 | medical cannabis dispensary registration, or the | ||||||
13 | controlling interest in a registrant's property is | ||||||
14 | transferred in a transaction to lineal descendants in | ||||||
15 | which no gain or loss is recognized or as a result of a | ||||||
16 | transaction in accordance with Section 351 of the Internal | ||||||
17 | Revenue Code in which no gain or loss is recognized. | ||||||
18 | (Source: P.A. 100-22, eff. 7-6-17; 101-9, eff. 6-5-19; 101-31, | ||||||
19 | eff. 6-28-19; 101-207, eff. 8-2-19; 101-363, eff. 8-9-19; | ||||||
20 | revised 11-18-20.)
| ||||||
21 | (Text of Section with the changes made by P.A. 101-8, | ||||||
22 | which did not take effect (see Section 99 of P.A. 101-8))
| ||||||
23 | Sec. 201. Tax imposed. | ||||||
24 | (a) In general. A tax measured by net income is hereby | ||||||
25 | imposed on every
individual, corporation, trust and estate for |
| |||||||
| |||||||
1 | each taxable year ending
after July 31, 1969 on the privilege | ||||||
2 | of earning or receiving income in or
as a resident of this | ||||||
3 | State. Such tax shall be in addition to all other
occupation or | ||||||
4 | privilege taxes imposed by this State or by any municipal
| ||||||
5 | corporation or political subdivision thereof. | ||||||
6 | (b) Rates. The tax imposed by subsection (a) of this | ||||||
7 | Section shall be
determined as follows, except as adjusted by | ||||||
8 | subsection (d-1): | ||||||
9 | (1) In the case of an individual, trust or estate, for | ||||||
10 | taxable years
ending prior to July 1, 1989, an amount | ||||||
11 | equal to 2 1/2% of the taxpayer's
net income for the | ||||||
12 | taxable year. | ||||||
13 | (2) In the case of an individual, trust or estate, for | ||||||
14 | taxable years
beginning prior to July 1, 1989 and ending | ||||||
15 | after June 30, 1989, an amount
equal to the sum of (i) 2 | ||||||
16 | 1/2% of the taxpayer's net income for the period
prior to | ||||||
17 | July 1, 1989, as calculated under Section 202.3, and (ii) | ||||||
18 | 3% of the
taxpayer's net income for the period after June | ||||||
19 | 30, 1989, as calculated
under Section 202.3. | ||||||
20 | (3) In the case of an individual, trust or estate, for | ||||||
21 | taxable years
beginning after June 30, 1989, and ending | ||||||
22 | prior to January 1, 2011, an amount equal to 3% of the | ||||||
23 | taxpayer's net
income for the taxable year. | ||||||
24 | (4) In the case of an individual, trust, or estate, | ||||||
25 | for taxable years beginning prior to January 1, 2011, and | ||||||
26 | ending after December 31, 2010, an amount equal to the sum |
| |||||||
| |||||||
1 | of (i) 3% of the taxpayer's net income for the period prior | ||||||
2 | to January 1, 2011, as calculated under Section 202.5, and | ||||||
3 | (ii) 5% of the taxpayer's net income for the period after | ||||||
4 | December 31, 2010, as calculated under Section 202.5. | ||||||
5 | (5) In the case of an individual, trust, or estate, | ||||||
6 | for taxable years beginning on or after January 1, 2011, | ||||||
7 | and ending prior to January 1, 2015, an amount equal to 5% | ||||||
8 | of the taxpayer's net income for the taxable year. | ||||||
9 | (5.1) In the case of an individual, trust, or estate, | ||||||
10 | for taxable years beginning prior to January 1, 2015, and | ||||||
11 | ending after December 31, 2014, an amount equal to the sum | ||||||
12 | of (i) 5% of the taxpayer's net income for the period prior | ||||||
13 | to January 1, 2015, as calculated under Section 202.5, and | ||||||
14 | (ii) 3.75% of the taxpayer's net income for the period | ||||||
15 | after December 31, 2014, as calculated under Section | ||||||
16 | 202.5. | ||||||
17 | (5.2) In the case of an individual, trust, or estate, | ||||||
18 | for taxable years beginning on or after January 1, 2015, | ||||||
19 | and ending prior to July 1, 2017, an amount equal to 3.75% | ||||||
20 | of the taxpayer's net income for the taxable year. | ||||||
21 | (5.3) In the case of an individual, trust, or estate, | ||||||
22 | for taxable years beginning prior to July 1, 2017, and | ||||||
23 | ending after June 30, 2017, an amount equal to the sum of | ||||||
24 | (i) 3.75% of the taxpayer's net income for the period | ||||||
25 | prior to July 1, 2017, as calculated under Section 202.5, | ||||||
26 | and (ii) 4.95% of the taxpayer's net income for the period |
| |||||||
| |||||||
1 | after June 30, 2017, as calculated under Section 202.5. | ||||||
2 | (5.4) In the case of an individual, trust, or estate, | ||||||
3 | for taxable years beginning on or after July 1, 2017 and | ||||||
4 | beginning prior to January 1, 2021 , an amount equal to | ||||||
5 | 4.95% of the taxpayer's net income for the taxable year. | ||||||
6 | (5.5) In the case of an individual, trust, or estate, | ||||||
7 | for taxable years beginning on or after January 1, 2021, | ||||||
8 | an amount calculated under the rate structure set forth in | ||||||
9 | Section 201.1. | ||||||
10 | (6) In the case of a corporation, for taxable years
| ||||||
11 | ending prior to July 1, 1989, an amount equal to 4% of the
| ||||||
12 | taxpayer's net income for the taxable year. | ||||||
13 | (7) In the case of a corporation, for taxable years | ||||||
14 | beginning prior to
July 1, 1989 and ending after June 30, | ||||||
15 | 1989, an amount equal to the sum of
(i) 4% of the | ||||||
16 | taxpayer's net income for the period prior to July 1, | ||||||
17 | 1989,
as calculated under Section 202.3, and (ii) 4.8% of | ||||||
18 | the taxpayer's net
income for the period after June 30, | ||||||
19 | 1989, as calculated under Section
202.3. | ||||||
20 | (8) In the case of a corporation, for taxable years | ||||||
21 | beginning after
June 30, 1989, and ending prior to January | ||||||
22 | 1, 2011, an amount equal to 4.8% of the taxpayer's net | ||||||
23 | income for the
taxable year. | ||||||
24 | (9) In the case of a corporation, for taxable years | ||||||
25 | beginning prior to January 1, 2011, and ending after | ||||||
26 | December 31, 2010, an amount equal to the sum of (i) 4.8% |
| |||||||
| |||||||
1 | of the taxpayer's net income for the period prior to | ||||||
2 | January 1, 2011, as calculated under Section 202.5, and | ||||||
3 | (ii) 7% of the taxpayer's net income for the period after | ||||||
4 | December 31, 2010, as calculated under Section 202.5. | ||||||
5 | (10) In the case of a corporation, for taxable years | ||||||
6 | beginning on or after January 1, 2011, and ending prior to | ||||||
7 | January 1, 2015, an amount equal to 7% of the taxpayer's | ||||||
8 | net income for the taxable year. | ||||||
9 | (11) In the case of a corporation, for taxable years | ||||||
10 | beginning prior to January 1, 2015, and ending after | ||||||
11 | December 31, 2014, an amount equal to the sum of (i) 7% of | ||||||
12 | the taxpayer's net income for the period prior to January | ||||||
13 | 1, 2015, as calculated under Section 202.5, and (ii) 5.25% | ||||||
14 | of the taxpayer's net income for the period after December | ||||||
15 | 31, 2014, as calculated under Section 202.5. | ||||||
16 | (12) In the case of a corporation, for taxable years | ||||||
17 | beginning on or after January 1, 2015, and ending prior to | ||||||
18 | July 1, 2017, an amount equal to 5.25% of the taxpayer's | ||||||
19 | net income for the taxable year. | ||||||
20 | (13) In the case of a corporation, for taxable years | ||||||
21 | beginning prior to July 1, 2017, and ending after June 30, | ||||||
22 | 2017, an amount equal to the sum of (i) 5.25% of the | ||||||
23 | taxpayer's net income for the period prior to July 1, | ||||||
24 | 2017, as calculated under Section 202.5, and (ii) 7% of | ||||||
25 | the taxpayer's net income for the period after June 30, | ||||||
26 | 2017, as calculated under Section 202.5. |
| |||||||
| |||||||
1 | (14) In the case of a corporation, for taxable years | ||||||
2 | beginning on or after July 1, 2017 and beginning prior to | ||||||
3 | January 1, 2021 , an amount equal to 7% of the taxpayer's | ||||||
4 | net income for the taxable year. | ||||||
5 | (15) In the case of a corporation, for taxable years | ||||||
6 | beginning on or after January 1, 2021, an amount equal to | ||||||
7 | 7.99% of the taxpayer's net income for the taxable year. | ||||||
8 | The rates under this subsection (b) are subject to the | ||||||
9 | provisions of Section 201.5. | ||||||
10 | (b-5) Surcharge; sale or exchange of assets, properties, | ||||||
11 | and intangibles of organization gaming licensees. For each of | ||||||
12 | taxable years 2019 through 2027, a surcharge is imposed on all | ||||||
13 | taxpayers on income arising from the sale or exchange of | ||||||
14 | capital assets, depreciable business property, real property | ||||||
15 | used in the trade or business, and Section 197 intangibles (i) | ||||||
16 | of an organization licensee under the Illinois Horse Racing | ||||||
17 | Act of 1975 and (ii) of an organization gaming licensee under | ||||||
18 | the Illinois Gambling Act. The amount of the surcharge is | ||||||
19 | equal to the amount of federal income tax liability for the | ||||||
20 | taxable year attributable to those sales and exchanges. The | ||||||
21 | surcharge imposed shall not apply if: | ||||||
22 | (1) the organization gaming license, organization | ||||||
23 | license, or racetrack property is transferred as a result | ||||||
24 | of any of the following: | ||||||
25 | (A) bankruptcy, a receivership, or a debt | ||||||
26 | adjustment initiated by or against the initial |
| |||||||
| |||||||
1 | licensee or the substantial owners of the initial | ||||||
2 | licensee; | ||||||
3 | (B) cancellation, revocation, or termination of | ||||||
4 | any such license by the Illinois Gaming Board or the | ||||||
5 | Illinois Racing Board; | ||||||
6 | (C) a determination by the Illinois Gaming Board | ||||||
7 | that transfer of the license is in the best interests | ||||||
8 | of Illinois gaming; | ||||||
9 | (D) the death of an owner of the equity interest in | ||||||
10 | a licensee; | ||||||
11 | (E) the acquisition of a controlling interest in | ||||||
12 | the stock or substantially all of the assets of a | ||||||
13 | publicly traded company; | ||||||
14 | (F) a transfer by a parent company to a wholly | ||||||
15 | owned subsidiary; or | ||||||
16 | (G) the transfer or sale to or by one person to | ||||||
17 | another person where both persons were initial owners | ||||||
18 | of the license when the license was issued; or | ||||||
19 | (2) the controlling interest in the organization | ||||||
20 | gaming license, organization license, or racetrack | ||||||
21 | property is transferred in a transaction to lineal | ||||||
22 | descendants in which no gain or loss is recognized or as a | ||||||
23 | result of a transaction in accordance with Section 351 of | ||||||
24 | the Internal Revenue Code in which no gain or loss is | ||||||
25 | recognized; or | ||||||
26 | (3) live horse racing was not conducted in 2010 at a |
| |||||||
| |||||||
1 | racetrack located within 3 miles of the Mississippi River | ||||||
2 | under a license issued pursuant to the Illinois Horse | ||||||
3 | Racing Act of 1975. | ||||||
4 | The transfer of an organization gaming license, | ||||||
5 | organization license, or racetrack property by a person other | ||||||
6 | than the initial licensee to receive the organization gaming | ||||||
7 | license is not subject to a surcharge. The Department shall | ||||||
8 | adopt rules necessary to implement and administer this | ||||||
9 | subsection. | ||||||
10 | (c) Personal Property Tax Replacement Income Tax.
| ||||||
11 | Beginning on July 1, 1979 and thereafter, in addition to such | ||||||
12 | income
tax, there is also hereby imposed the Personal Property | ||||||
13 | Tax Replacement
Income Tax measured by net income on every | ||||||
14 | corporation (including Subchapter
S corporations), partnership | ||||||
15 | and trust, for each taxable year ending after
June 30, 1979. | ||||||
16 | Such taxes are imposed on the privilege of earning or
| ||||||
17 | receiving income in or as a resident of this State. The | ||||||
18 | Personal Property
Tax Replacement Income Tax shall be in | ||||||
19 | addition to the income tax imposed
by subsections (a) and (b) | ||||||
20 | of this Section and in addition to all other
occupation or | ||||||
21 | privilege taxes imposed by this State or by any municipal
| ||||||
22 | corporation or political subdivision thereof. | ||||||
23 | (d) Additional Personal Property Tax Replacement Income | ||||||
24 | Tax Rates.
The personal property tax replacement income tax | ||||||
25 | imposed by this subsection
and subsection (c) of this Section | ||||||
26 | in the case of a corporation, other
than a Subchapter S |
| |||||||
| |||||||
1 | corporation and except as adjusted by subsection (d-1),
shall | ||||||
2 | be an additional amount equal to
2.85% of such taxpayer's net | ||||||
3 | income for the taxable year, except that
beginning on January | ||||||
4 | 1, 1981, and thereafter, the rate of 2.85% specified
in this | ||||||
5 | subsection shall be reduced to 2.5%, and in the case of a
| ||||||
6 | partnership, trust or a Subchapter S corporation shall be an | ||||||
7 | additional
amount equal to 1.5% of such taxpayer's net income | ||||||
8 | for the taxable year. | ||||||
9 | (d-1) Rate reduction for certain foreign insurers. In the | ||||||
10 | case of a
foreign insurer, as defined by Section 35A-5 of the | ||||||
11 | Illinois Insurance Code,
whose state or country of domicile | ||||||
12 | imposes on insurers domiciled in Illinois
a retaliatory tax | ||||||
13 | (excluding any insurer
whose premiums from reinsurance assumed | ||||||
14 | are 50% or more of its total insurance
premiums as determined | ||||||
15 | under paragraph (2) of subsection (b) of Section 304,
except | ||||||
16 | that for purposes of this determination premiums from | ||||||
17 | reinsurance do
not include premiums from inter-affiliate | ||||||
18 | reinsurance arrangements),
beginning with taxable years ending | ||||||
19 | on or after December 31, 1999,
the sum of
the rates of tax | ||||||
20 | imposed by subsections (b) and (d) shall be reduced (but not
| ||||||
21 | increased) to the rate at which the total amount of tax imposed | ||||||
22 | under this Act,
net of all credits allowed under this Act, | ||||||
23 | shall equal (i) the total amount of
tax that would be imposed | ||||||
24 | on the foreign insurer's net income allocable to
Illinois for | ||||||
25 | the taxable year by such foreign insurer's state or country of
| ||||||
26 | domicile if that net income were subject to all income taxes |
| |||||||
| |||||||
1 | and taxes
measured by net income imposed by such foreign | ||||||
2 | insurer's state or country of
domicile, net of all credits | ||||||
3 | allowed or (ii) a rate of zero if no such tax is
imposed on | ||||||
4 | such income by the foreign insurer's state of domicile.
For | ||||||
5 | the purposes of this subsection (d-1), an inter-affiliate | ||||||
6 | includes a
mutual insurer under common management. | ||||||
7 | (1) For the purposes of subsection (d-1), in no event | ||||||
8 | shall the sum of the
rates of tax imposed by subsections | ||||||
9 | (b) and (d) be reduced below the rate at
which the sum of: | ||||||
10 | (A) the total amount of tax imposed on such | ||||||
11 | foreign insurer under
this Act for a taxable year, net | ||||||
12 | of all credits allowed under this Act, plus | ||||||
13 | (B) the privilege tax imposed by Section 409 of | ||||||
14 | the Illinois Insurance
Code, the fire insurance | ||||||
15 | company tax imposed by Section 12 of the Fire
| ||||||
16 | Investigation Act, and the fire department taxes | ||||||
17 | imposed under Section 11-10-1
of the Illinois | ||||||
18 | Municipal Code, | ||||||
19 | equals 1.25% for taxable years ending prior to December | ||||||
20 | 31, 2003, or
1.75% for taxable years ending on or after | ||||||
21 | December 31, 2003, of the net
taxable premiums written for | ||||||
22 | the taxable year,
as described by subsection (1) of | ||||||
23 | Section 409 of the Illinois Insurance Code.
This paragraph | ||||||
24 | will in no event increase the rates imposed under | ||||||
25 | subsections
(b) and (d). | ||||||
26 | (2) Any reduction in the rates of tax imposed by this |
| |||||||
| |||||||
1 | subsection shall be
applied first against the rates | ||||||
2 | imposed by subsection (b) and only after the
tax imposed | ||||||
3 | by subsection (a) net of all credits allowed under this | ||||||
4 | Section
other than the credit allowed under subsection (i) | ||||||
5 | has been reduced to zero,
against the rates imposed by | ||||||
6 | subsection (d). | ||||||
7 | This subsection (d-1) is exempt from the provisions of | ||||||
8 | Section 250. | ||||||
9 | (e) Investment credit. A taxpayer shall be allowed a | ||||||
10 | credit
against the Personal Property Tax Replacement Income | ||||||
11 | Tax for
investment in qualified property. | ||||||
12 | (1) A taxpayer shall be allowed a credit equal to .5% | ||||||
13 | of
the basis of qualified property placed in service | ||||||
14 | during the taxable year,
provided such property is placed | ||||||
15 | in service on or after
July 1, 1984. There shall be allowed | ||||||
16 | an additional credit equal
to .5% of the basis of | ||||||
17 | qualified property placed in service during the
taxable | ||||||
18 | year, provided such property is placed in service on or
| ||||||
19 | after July 1, 1986, and the taxpayer's base employment
| ||||||
20 | within Illinois has increased by 1% or more over the | ||||||
21 | preceding year as
determined by the taxpayer's employment | ||||||
22 | records filed with the
Illinois Department of Employment | ||||||
23 | Security. Taxpayers who are new to
Illinois shall be | ||||||
24 | deemed to have met the 1% growth in base employment for
the | ||||||
25 | first year in which they file employment records with the | ||||||
26 | Illinois
Department of Employment Security. The provisions |
| |||||||
| |||||||
1 | added to this Section by
Public Act 85-1200 (and restored | ||||||
2 | by Public Act 87-895) shall be
construed as declaratory of | ||||||
3 | existing law and not as a new enactment. If,
in any year, | ||||||
4 | the increase in base employment within Illinois over the
| ||||||
5 | preceding year is less than 1%, the additional credit | ||||||
6 | shall be limited to that
percentage times a fraction, the | ||||||
7 | numerator of which is .5% and the denominator
of which is | ||||||
8 | 1%, but shall not exceed .5%. The investment credit shall | ||||||
9 | not be
allowed to the extent that it would reduce a | ||||||
10 | taxpayer's liability in any tax
year below zero, nor may | ||||||
11 | any credit for qualified property be allowed for any
year | ||||||
12 | other than the year in which the property was placed in | ||||||
13 | service in
Illinois. For tax years ending on or after | ||||||
14 | December 31, 1987, and on or
before December 31, 1988, the | ||||||
15 | credit shall be allowed for the tax year in
which the | ||||||
16 | property is placed in service, or, if the amount of the | ||||||
17 | credit
exceeds the tax liability for that year, whether it | ||||||
18 | exceeds the original
liability or the liability as later | ||||||
19 | amended, such excess may be carried
forward and applied to | ||||||
20 | the tax liability of the 5 taxable years following
the | ||||||
21 | excess credit years if the taxpayer (i) makes investments | ||||||
22 | which cause
the creation of a minimum of 2,000 full-time | ||||||
23 | equivalent jobs in Illinois,
(ii) is located in an | ||||||
24 | enterprise zone established pursuant to the Illinois
| ||||||
25 | Enterprise Zone Act and (iii) is certified by the | ||||||
26 | Department of Commerce
and Community Affairs (now |
| |||||||
| |||||||
1 | Department of Commerce and Economic Opportunity) as | ||||||
2 | complying with the requirements specified in
clause (i) | ||||||
3 | and (ii) by July 1, 1986. The Department of Commerce and
| ||||||
4 | Community Affairs (now Department of Commerce and Economic | ||||||
5 | Opportunity) shall notify the Department of Revenue of all | ||||||
6 | such
certifications immediately. For tax years ending | ||||||
7 | after December 31, 1988,
the credit shall be allowed for | ||||||
8 | the tax year in which the property is
placed in service, | ||||||
9 | or, if the amount of the credit exceeds the tax
liability | ||||||
10 | for that year, whether it exceeds the original liability | ||||||
11 | or the
liability as later amended, such excess may be | ||||||
12 | carried forward and applied
to the tax liability of the 5 | ||||||
13 | taxable years following the excess credit
years. The | ||||||
14 | credit shall be applied to the earliest year for which | ||||||
15 | there is
a liability. If there is credit from more than one | ||||||
16 | tax year that is
available to offset a liability, earlier | ||||||
17 | credit shall be applied first. | ||||||
18 | (2) The term "qualified property" means property | ||||||
19 | which: | ||||||
20 | (A) is tangible, whether new or used, including | ||||||
21 | buildings and structural
components of buildings and | ||||||
22 | signs that are real property, but not including
land | ||||||
23 | or improvements to real property that are not a | ||||||
24 | structural component of a
building such as | ||||||
25 | landscaping, sewer lines, local access roads, fencing, | ||||||
26 | parking
lots, and other appurtenances; |
| |||||||
| |||||||
1 | (B) is depreciable pursuant to Section 167 of the | ||||||
2 | Internal Revenue Code,
except that "3-year property" | ||||||
3 | as defined in Section 168(c)(2)(A) of that
Code is not | ||||||
4 | eligible for the credit provided by this subsection | ||||||
5 | (e); | ||||||
6 | (C) is acquired by purchase as defined in Section | ||||||
7 | 179(d) of
the Internal Revenue Code; | ||||||
8 | (D) is used in Illinois by a taxpayer who is | ||||||
9 | primarily engaged in
manufacturing, or in mining coal | ||||||
10 | or fluorite, or in retailing, or was placed in service | ||||||
11 | on or after July 1, 2006 in a River Edge Redevelopment | ||||||
12 | Zone established pursuant to the River Edge | ||||||
13 | Redevelopment Zone Act; and | ||||||
14 | (E) has not previously been used in Illinois in | ||||||
15 | such a manner and by
such a person as would qualify for | ||||||
16 | the credit provided by this subsection
(e) or | ||||||
17 | subsection (f). | ||||||
18 | (3) For purposes of this subsection (e), | ||||||
19 | "manufacturing" means
the material staging and production | ||||||
20 | of tangible personal property by
procedures commonly | ||||||
21 | regarded as manufacturing, processing, fabrication, or
| ||||||
22 | assembling which changes some existing material into new | ||||||
23 | shapes, new
qualities, or new combinations. For purposes | ||||||
24 | of this subsection
(e) the term "mining" shall have the | ||||||
25 | same meaning as the term "mining" in
Section 613(c) of the | ||||||
26 | Internal Revenue Code. For purposes of this subsection
|
| |||||||
| |||||||
1 | (e), the term "retailing" means the sale of tangible | ||||||
2 | personal property for use or consumption and not for | ||||||
3 | resale, or
services rendered in conjunction with the sale | ||||||
4 | of tangible personal property for use or consumption and | ||||||
5 | not for resale. For purposes of this subsection (e), | ||||||
6 | "tangible personal property" has the same meaning as when | ||||||
7 | that term is used in the Retailers' Occupation Tax Act, | ||||||
8 | and, for taxable years ending after December 31, 2008, | ||||||
9 | does not include the generation, transmission, or | ||||||
10 | distribution of electricity. | ||||||
11 | (4) The basis of qualified property shall be the basis
| ||||||
12 | used to compute the depreciation deduction for federal | ||||||
13 | income tax purposes. | ||||||
14 | (5) If the basis of the property for federal income | ||||||
15 | tax depreciation
purposes is increased after it has been | ||||||
16 | placed in service in Illinois by
the taxpayer, the amount | ||||||
17 | of such increase shall be deemed property placed
in | ||||||
18 | service on the date of such increase in basis. | ||||||
19 | (6) The term "placed in service" shall have the same
| ||||||
20 | meaning as under Section 46 of the Internal Revenue Code. | ||||||
21 | (7) If during any taxable year, any property ceases to
| ||||||
22 | be qualified property in the hands of the taxpayer within | ||||||
23 | 48 months after
being placed in service, or the situs of | ||||||
24 | any qualified property is
moved outside Illinois within 48 | ||||||
25 | months after being placed in service, the
Personal | ||||||
26 | Property Tax Replacement Income Tax for such taxable year |
| |||||||
| |||||||
1 | shall be
increased. Such increase shall be determined by | ||||||
2 | (i) recomputing the
investment credit which would have | ||||||
3 | been allowed for the year in which
credit for such | ||||||
4 | property was originally allowed by eliminating such
| ||||||
5 | property from such computation and, (ii) subtracting such | ||||||
6 | recomputed credit
from the amount of credit previously | ||||||
7 | allowed. For the purposes of this
paragraph (7), a | ||||||
8 | reduction of the basis of qualified property resulting
| ||||||
9 | from a redetermination of the purchase price shall be | ||||||
10 | deemed a disposition
of qualified property to the extent | ||||||
11 | of such reduction. | ||||||
12 | (8) Unless the investment credit is extended by law, | ||||||
13 | the
basis of qualified property shall not include costs | ||||||
14 | incurred after
December 31, 2018, except for costs | ||||||
15 | incurred pursuant to a binding
contract entered into on or | ||||||
16 | before December 31, 2018. | ||||||
17 | (9) Each taxable year ending before December 31, 2000, | ||||||
18 | a partnership may
elect to pass through to its
partners | ||||||
19 | the credits to which the partnership is entitled under | ||||||
20 | this subsection
(e) for the taxable year. A partner may | ||||||
21 | use the credit allocated to him or her
under this | ||||||
22 | paragraph only against the tax imposed in subsections (c) | ||||||
23 | and (d) of
this Section. If the partnership makes that | ||||||
24 | election, those credits shall be
allocated among the | ||||||
25 | partners in the partnership in accordance with the rules
| ||||||
26 | set forth in Section 704(b) of the Internal Revenue Code, |
| |||||||
| |||||||
1 | and the rules
promulgated under that Section, and the | ||||||
2 | allocated amount of the credits shall
be allowed to the | ||||||
3 | partners for that taxable year. The partnership shall make
| ||||||
4 | this election on its Personal Property Tax Replacement | ||||||
5 | Income Tax return for
that taxable year. The election to | ||||||
6 | pass through the credits shall be
irrevocable. | ||||||
7 | For taxable years ending on or after December 31, | ||||||
8 | 2000, a
partner that qualifies its
partnership for a | ||||||
9 | subtraction under subparagraph (I) of paragraph (2) of
| ||||||
10 | subsection (d) of Section 203 or a shareholder that | ||||||
11 | qualifies a Subchapter S
corporation for a subtraction | ||||||
12 | under subparagraph (S) of paragraph (2) of
subsection (b) | ||||||
13 | of Section 203 shall be allowed a credit under this | ||||||
14 | subsection
(e) equal to its share of the credit earned | ||||||
15 | under this subsection (e) during
the taxable year by the | ||||||
16 | partnership or Subchapter S corporation, determined in
| ||||||
17 | accordance with the determination of income and | ||||||
18 | distributive share of
income under Sections 702 and 704 | ||||||
19 | and Subchapter S of the Internal Revenue
Code. This | ||||||
20 | paragraph is exempt from the provisions of Section 250. | ||||||
21 | (f) Investment credit; Enterprise Zone; River Edge | ||||||
22 | Redevelopment Zone. | ||||||
23 | (1) A taxpayer shall be allowed a credit against the | ||||||
24 | tax imposed
by subsections (a) and (b) of this Section for | ||||||
25 | investment in qualified
property which is placed in | ||||||
26 | service in an Enterprise Zone created
pursuant to the |
| |||||||
| |||||||
1 | Illinois Enterprise Zone Act or, for property placed in | ||||||
2 | service on or after July 1, 2006, a River Edge | ||||||
3 | Redevelopment Zone established pursuant to the River Edge | ||||||
4 | Redevelopment Zone Act. For partners, shareholders
of | ||||||
5 | Subchapter S corporations, and owners of limited liability | ||||||
6 | companies,
if the liability company is treated as a | ||||||
7 | partnership for purposes of
federal and State income | ||||||
8 | taxation, there shall be allowed a credit under
this | ||||||
9 | subsection (f) to be determined in accordance with the | ||||||
10 | determination
of income and distributive share of income | ||||||
11 | under Sections 702 and 704 and
Subchapter S of the | ||||||
12 | Internal Revenue Code. The credit shall be .5% of the
| ||||||
13 | basis for such property. The credit shall be available | ||||||
14 | only in the taxable
year in which the property is placed in | ||||||
15 | service in the Enterprise Zone or River Edge Redevelopment | ||||||
16 | Zone and
shall not be allowed to the extent that it would | ||||||
17 | reduce a taxpayer's
liability for the tax imposed by | ||||||
18 | subsections (a) and (b) of this Section to
below zero. For | ||||||
19 | tax years ending on or after December 31, 1985, the credit
| ||||||
20 | shall be allowed for the tax year in which the property is | ||||||
21 | placed in
service, or, if the amount of the credit exceeds | ||||||
22 | the tax liability for that
year, whether it exceeds the | ||||||
23 | original liability or the liability as later
amended, such | ||||||
24 | excess may be carried forward and applied to the tax
| ||||||
25 | liability of the 5 taxable years following the excess | ||||||
26 | credit year.
The credit shall be applied to the earliest |
| |||||||
| |||||||
1 | year for which there is a
liability. If there is credit | ||||||
2 | from more than one tax year that is available
to offset a | ||||||
3 | liability, the credit accruing first in time shall be | ||||||
4 | applied
first. | ||||||
5 | (2) The term qualified property means property which: | ||||||
6 | (A) is tangible, whether new or used, including | ||||||
7 | buildings and
structural components of buildings; | ||||||
8 | (B) is depreciable pursuant to Section 167 of the | ||||||
9 | Internal Revenue
Code, except that "3-year property" | ||||||
10 | as defined in Section 168(c)(2)(A) of
that Code is not | ||||||
11 | eligible for the credit provided by this subsection | ||||||
12 | (f); | ||||||
13 | (C) is acquired by purchase as defined in Section | ||||||
14 | 179(d) of
the Internal Revenue Code; | ||||||
15 | (D) is used in the Enterprise Zone or River Edge | ||||||
16 | Redevelopment Zone by the taxpayer; and | ||||||
17 | (E) has not been previously used in Illinois in | ||||||
18 | such a manner and by
such a person as would qualify for | ||||||
19 | the credit provided by this subsection
(f) or | ||||||
20 | subsection (e). | ||||||
21 | (3) The basis of qualified property shall be the basis | ||||||
22 | used to compute
the depreciation deduction for federal | ||||||
23 | income tax purposes. | ||||||
24 | (4) If the basis of the property for federal income | ||||||
25 | tax depreciation
purposes is increased after it has been | ||||||
26 | placed in service in the Enterprise
Zone or River Edge |
| |||||||
| |||||||
1 | Redevelopment Zone by the taxpayer, the amount of such | ||||||
2 | increase shall be deemed property
placed in service on the | ||||||
3 | date of such increase in basis. | ||||||
4 | (5) The term "placed in service" shall have the same | ||||||
5 | meaning as under
Section 46 of the Internal Revenue Code. | ||||||
6 | (6) If during any taxable year, any property ceases to | ||||||
7 | be qualified
property in the hands of the taxpayer within | ||||||
8 | 48 months after being placed
in service, or the situs of | ||||||
9 | any qualified property is moved outside the
Enterprise | ||||||
10 | Zone or River Edge Redevelopment Zone within 48 months | ||||||
11 | after being placed in service, the tax
imposed under | ||||||
12 | subsections (a) and (b) of this Section for such taxable | ||||||
13 | year
shall be increased. Such increase shall be determined | ||||||
14 | by (i) recomputing
the investment credit which would have | ||||||
15 | been allowed for the year in which
credit for such | ||||||
16 | property was originally allowed by eliminating such
| ||||||
17 | property from such computation, and (ii) subtracting such | ||||||
18 | recomputed credit
from the amount of credit previously | ||||||
19 | allowed. For the purposes of this
paragraph (6), a | ||||||
20 | reduction of the basis of qualified property resulting
| ||||||
21 | from a redetermination of the purchase price shall be | ||||||
22 | deemed a disposition
of qualified property to the extent | ||||||
23 | of such reduction. | ||||||
24 | (7) There shall be allowed an additional credit equal | ||||||
25 | to 0.5% of the basis of qualified property placed in | ||||||
26 | service during the taxable year in a River Edge |
| |||||||
| |||||||
1 | Redevelopment Zone, provided such property is placed in | ||||||
2 | service on or after July 1, 2006, and the taxpayer's base | ||||||
3 | employment within Illinois has increased by 1% or more | ||||||
4 | over the preceding year as determined by the taxpayer's | ||||||
5 | employment records filed with the Illinois Department of | ||||||
6 | Employment Security. Taxpayers who are new to Illinois | ||||||
7 | shall be deemed to have met the 1% growth in base | ||||||
8 | employment for the first year in which they file | ||||||
9 | employment records with the Illinois Department of | ||||||
10 | Employment Security. If, in any year, the increase in base | ||||||
11 | employment within Illinois over the preceding year is less | ||||||
12 | than 1%, the additional credit shall be limited to that | ||||||
13 | percentage times a fraction, the numerator of which is | ||||||
14 | 0.5% and the denominator of which is 1%, but shall not | ||||||
15 | exceed 0.5%.
| ||||||
16 | (8) For taxable years beginning on or after January 1, | ||||||
17 | 2021, there shall be allowed an Enterprise Zone | ||||||
18 | construction jobs credit against the taxes imposed under | ||||||
19 | subsections (a) and (b) of this Section as provided in | ||||||
20 | Section 13 of the Illinois Enterprise Zone Act. | ||||||
21 | The credit or credits may not reduce the taxpayer's | ||||||
22 | liability to less than zero. If the amount of the credit or | ||||||
23 | credits exceeds the taxpayer's liability, the excess may | ||||||
24 | be carried forward and applied against the taxpayer's | ||||||
25 | liability in succeeding calendar years in the same manner | ||||||
26 | provided under paragraph (4) of Section 211 of this Act. |
| |||||||
| |||||||
1 | The credit or credits shall be applied to the earliest | ||||||
2 | year for which there is a tax liability. If there are | ||||||
3 | credits from more than one taxable year that are available | ||||||
4 | to offset a liability, the earlier credit shall be applied | ||||||
5 | first. | ||||||
6 | For partners, shareholders of Subchapter S | ||||||
7 | corporations, and owners of limited liability companies, | ||||||
8 | if the liability company is treated as a partnership for | ||||||
9 | the purposes of federal and State income taxation, there | ||||||
10 | shall be allowed a credit under this Section to be | ||||||
11 | determined in accordance with the determination of income | ||||||
12 | and distributive share of income under Sections 702 and | ||||||
13 | 704 and Subchapter S of the Internal Revenue Code. | ||||||
14 | The total aggregate amount of credits awarded under | ||||||
15 | the Blue Collar Jobs Act (Article 20 of Public Act 101-9 | ||||||
16 | this amendatory Act of the 101st General Assembly ) shall | ||||||
17 | not exceed $20,000,000 in any State fiscal year . | ||||||
18 | This paragraph (8) is exempt from the provisions of | ||||||
19 | Section 250. | ||||||
20 | (g) (Blank). | ||||||
21 | (h) Investment credit; High Impact Business. | ||||||
22 | (1) Subject to subsections (b) and (b-5) of Section
| ||||||
23 | 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall | ||||||
24 | be allowed a credit
against the tax imposed by subsections | ||||||
25 | (a) and (b) of this Section for
investment in qualified
| ||||||
26 | property which is placed in service by a Department of |
| |||||||
| |||||||
1 | Commerce and Economic Opportunity
designated High Impact | ||||||
2 | Business. The credit shall be .5% of the basis
for such | ||||||
3 | property. The credit shall not be available (i) until the | ||||||
4 | minimum
investments in qualified property set forth in | ||||||
5 | subdivision (a)(3)(A) of
Section 5.5 of the Illinois
| ||||||
6 | Enterprise Zone Act have been satisfied
or (ii) until the | ||||||
7 | time authorized in subsection (b-5) of the Illinois
| ||||||
8 | Enterprise Zone Act for entities designated as High Impact | ||||||
9 | Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and | ||||||
10 | (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone | ||||||
11 | Act, and shall not be allowed to the extent that it would
| ||||||
12 | reduce a taxpayer's liability for the tax imposed by | ||||||
13 | subsections (a) and (b) of
this Section to below zero. The | ||||||
14 | credit applicable to such investments shall be
taken in | ||||||
15 | the taxable year in which such investments have been | ||||||
16 | completed. The
credit for additional investments beyond | ||||||
17 | the minimum investment by a designated
high impact | ||||||
18 | business authorized under subdivision (a)(3)(A) of Section | ||||||
19 | 5.5 of
the Illinois Enterprise Zone Act shall be available | ||||||
20 | only in the taxable year in
which the property is placed in | ||||||
21 | service and shall not be allowed to the extent
that it | ||||||
22 | would reduce a taxpayer's liability for the tax imposed by | ||||||
23 | subsections
(a) and (b) of this Section to below zero.
For | ||||||
24 | tax years ending on or after December 31, 1987, the credit | ||||||
25 | shall be
allowed for the tax year in which the property is | ||||||
26 | placed in service, or, if
the amount of the credit exceeds |
| |||||||
| |||||||
1 | the tax liability for that year, whether
it exceeds the | ||||||
2 | original liability or the liability as later amended, such
| ||||||
3 | excess may be carried forward and applied to the tax | ||||||
4 | liability of the 5
taxable years following the excess | ||||||
5 | credit year. The credit shall be
applied to the earliest | ||||||
6 | year for which there is a liability. If there is
credit | ||||||
7 | from more than one tax year that is available to offset a | ||||||
8 | liability,
the credit accruing first in time shall be | ||||||
9 | applied first. | ||||||
10 | Changes made in this subdivision (h)(1) by Public Act | ||||||
11 | 88-670
restore changes made by Public Act 85-1182 and | ||||||
12 | reflect existing law. | ||||||
13 | (2) The term qualified property means property which: | ||||||
14 | (A) is tangible, whether new or used, including | ||||||
15 | buildings and
structural components of buildings; | ||||||
16 | (B) is depreciable pursuant to Section 167 of the | ||||||
17 | Internal Revenue
Code, except that "3-year property" | ||||||
18 | as defined in Section 168(c)(2)(A) of
that Code is not | ||||||
19 | eligible for the credit provided by this subsection | ||||||
20 | (h); | ||||||
21 | (C) is acquired by purchase as defined in Section | ||||||
22 | 179(d) of the
Internal Revenue Code; and | ||||||
23 | (D) is not eligible for the Enterprise Zone | ||||||
24 | Investment Credit provided
by subsection (f) of this | ||||||
25 | Section. | ||||||
26 | (3) The basis of qualified property shall be the basis |
| |||||||
| |||||||
1 | used to compute
the depreciation deduction for federal | ||||||
2 | income tax purposes. | ||||||
3 | (4) If the basis of the property for federal income | ||||||
4 | tax depreciation
purposes is increased after it has been | ||||||
5 | placed in service in a federally
designated Foreign Trade | ||||||
6 | Zone or Sub-Zone located in Illinois by the taxpayer,
the | ||||||
7 | amount of such increase shall be deemed property placed in | ||||||
8 | service on
the date of such increase in basis. | ||||||
9 | (5) The term "placed in service" shall have the same | ||||||
10 | meaning as under
Section 46 of the Internal Revenue Code. | ||||||
11 | (6) If during any taxable year ending on or before | ||||||
12 | December 31, 1996,
any property ceases to be qualified
| ||||||
13 | property in the hands of the taxpayer within 48 months | ||||||
14 | after being placed
in service, or the situs of any | ||||||
15 | qualified property is moved outside
Illinois within 48 | ||||||
16 | months after being placed in service, the tax imposed
| ||||||
17 | under subsections (a) and (b) of this Section for such | ||||||
18 | taxable year shall
be increased. Such increase shall be | ||||||
19 | determined by (i) recomputing the
investment credit which | ||||||
20 | would have been allowed for the year in which
credit for | ||||||
21 | such property was originally allowed by eliminating such
| ||||||
22 | property from such computation, and (ii) subtracting such | ||||||
23 | recomputed credit
from the amount of credit previously | ||||||
24 | allowed. For the purposes of this
paragraph (6), a | ||||||
25 | reduction of the basis of qualified property resulting
| ||||||
26 | from a redetermination of the purchase price shall be |
| |||||||
| |||||||
1 | deemed a disposition
of qualified property to the extent | ||||||
2 | of such reduction. | ||||||
3 | (7) Beginning with tax years ending after December 31, | ||||||
4 | 1996, if a
taxpayer qualifies for the credit under this | ||||||
5 | subsection (h) and thereby is
granted a tax abatement and | ||||||
6 | the taxpayer relocates its entire facility in
violation of | ||||||
7 | the explicit terms and length of the contract under | ||||||
8 | Section
18-183 of the Property Tax Code, the tax imposed | ||||||
9 | under subsections
(a) and (b) of this Section shall be | ||||||
10 | increased for the taxable year
in which the taxpayer | ||||||
11 | relocated its facility by an amount equal to the
amount of | ||||||
12 | credit received by the taxpayer under this subsection (h). | ||||||
13 | (h-5) High Impact Business construction constructions jobs | ||||||
14 | credit. For taxable years beginning on or after January 1, | ||||||
15 | 2021, there shall also be allowed a High Impact Business | ||||||
16 | construction jobs credit against the tax imposed under | ||||||
17 | subsections (a) and (b) of this Section as provided in | ||||||
18 | subsections (i) and (j) of Section 5.5 of the Illinois | ||||||
19 | Enterprise Zone Act. | ||||||
20 | The credit or credits may not reduce the taxpayer's | ||||||
21 | liability to less than zero. If the amount of the credit or | ||||||
22 | credits exceeds the taxpayer's liability, the excess may be | ||||||
23 | carried forward and applied against the taxpayer's liability | ||||||
24 | in succeeding calendar years in the manner provided under | ||||||
25 | paragraph (4) of Section 211 of this Act. The credit or credits | ||||||
26 | shall be applied to the earliest year for which there is a tax |
| |||||||
| |||||||
1 | liability. If there are credits from more than one taxable | ||||||
2 | year that are available to offset a liability, the earlier | ||||||
3 | credit shall be applied first. | ||||||
4 | For partners, shareholders of Subchapter S corporations, | ||||||
5 | and owners of limited liability companies, if the liability | ||||||
6 | company is treated as a partnership for the purposes of | ||||||
7 | federal and State income taxation, there shall be allowed a | ||||||
8 | credit under this Section to be determined in accordance with | ||||||
9 | the determination of income and distributive share of income | ||||||
10 | under Sections 702 and 704 and Subchapter S of the Internal | ||||||
11 | Revenue Code. | ||||||
12 | The total aggregate amount of credits awarded under the | ||||||
13 | Blue Collar Jobs Act (Article 20 of Public Act 101-9 this | ||||||
14 | amendatory Act of the 101st General Assembly ) shall not exceed | ||||||
15 | $20,000,000 in any State fiscal year . | ||||||
16 | This subsection (h-5) is exempt from the provisions of | ||||||
17 | Section 250. | ||||||
18 | (i) Credit for Personal Property Tax Replacement Income | ||||||
19 | Tax.
For tax years ending prior to December 31, 2003, a credit | ||||||
20 | shall be allowed
against the tax imposed by
subsections (a) | ||||||
21 | and (b) of this Section for the tax imposed by subsections (c)
| ||||||
22 | and (d) of this Section. This credit shall be computed by | ||||||
23 | multiplying the tax
imposed by subsections (c) and (d) of this | ||||||
24 | Section by a fraction, the numerator
of which is base income | ||||||
25 | allocable to Illinois and the denominator of which is
Illinois | ||||||
26 | base income, and further multiplying the product by the tax |
| |||||||
| |||||||
1 | rate
imposed by subsections (a) and (b) of this Section. | ||||||
2 | Any credit earned on or after December 31, 1986 under
this | ||||||
3 | subsection which is unused in the year
the credit is computed | ||||||
4 | because it exceeds the tax liability imposed by
subsections | ||||||
5 | (a) and (b) for that year (whether it exceeds the original
| ||||||
6 | liability or the liability as later amended) may be carried | ||||||
7 | forward and
applied to the tax liability imposed by | ||||||
8 | subsections (a) and (b) of the 5
taxable years following the | ||||||
9 | excess credit year, provided that no credit may
be carried | ||||||
10 | forward to any year ending on or
after December 31, 2003. This | ||||||
11 | credit shall be
applied first to the earliest year for which | ||||||
12 | there is a liability. If
there is a credit under this | ||||||
13 | subsection from more than one tax year that is
available to | ||||||
14 | offset a liability the earliest credit arising under this
| ||||||
15 | subsection shall be applied first. | ||||||
16 | If, during any taxable year ending on or after December | ||||||
17 | 31, 1986, the
tax imposed by subsections (c) and (d) of this | ||||||
18 | Section for which a taxpayer
has claimed a credit under this | ||||||
19 | subsection (i) is reduced, the amount of
credit for such tax | ||||||
20 | shall also be reduced. Such reduction shall be
determined by | ||||||
21 | recomputing the credit to take into account the reduced tax
| ||||||
22 | imposed by subsections (c) and (d). If any portion of the
| ||||||
23 | reduced amount of credit has been carried to a different | ||||||
24 | taxable year, an
amended return shall be filed for such | ||||||
25 | taxable year to reduce the amount of
credit claimed. | ||||||
26 | (j) Training expense credit. Beginning with tax years |
| |||||||
| |||||||
1 | ending on or
after December 31, 1986 and prior to December 31, | ||||||
2 | 2003, a taxpayer shall be
allowed a credit against the
tax | ||||||
3 | imposed by subsections (a) and (b) under this Section
for all | ||||||
4 | amounts paid or accrued, on behalf of all persons
employed by | ||||||
5 | the taxpayer in Illinois or Illinois residents employed
| ||||||
6 | outside of Illinois by a taxpayer, for educational or | ||||||
7 | vocational training in
semi-technical or technical fields or | ||||||
8 | semi-skilled or skilled fields, which
were deducted from gross | ||||||
9 | income in the computation of taxable income. The
credit | ||||||
10 | against the tax imposed by subsections (a) and (b) shall be | ||||||
11 | 1.6% of
such training expenses. For partners, shareholders of | ||||||
12 | subchapter S
corporations, and owners of limited liability | ||||||
13 | companies, if the liability
company is treated as a | ||||||
14 | partnership for purposes of federal and State income
taxation, | ||||||
15 | there shall be allowed a credit under this subsection (j) to be
| ||||||
16 | determined in accordance with the determination of income and | ||||||
17 | distributive
share of income under Sections 702 and 704 and | ||||||
18 | subchapter S of the Internal
Revenue Code. | ||||||
19 | Any credit allowed under this subsection which is unused | ||||||
20 | in the year
the credit is earned may be carried forward to each | ||||||
21 | of the 5 taxable
years following the year for which the credit | ||||||
22 | is first computed until it is
used. This credit shall be | ||||||
23 | applied first to the earliest year for which
there is a | ||||||
24 | liability. If there is a credit under this subsection from | ||||||
25 | more
than one tax year that is available to offset a liability , | ||||||
26 | the earliest
credit arising under this subsection shall be |
| |||||||
| |||||||
1 | applied first. No carryforward
credit may be claimed in any | ||||||
2 | tax year ending on or after
December 31, 2003. | ||||||
3 | (k) Research and development credit. For tax years ending | ||||||
4 | after July 1, 1990 and prior to
December 31, 2003, and | ||||||
5 | beginning again for tax years ending on or after December 31, | ||||||
6 | 2004, and ending prior to January 1, 2027, a taxpayer shall be
| ||||||
7 | allowed a credit against the tax imposed by subsections (a) | ||||||
8 | and (b) of this
Section for increasing research activities in | ||||||
9 | this State. The credit
allowed against the tax imposed by | ||||||
10 | subsections (a) and (b) shall be equal
to 6 1/2% of the | ||||||
11 | qualifying expenditures for increasing research activities
in | ||||||
12 | this State. For partners, shareholders of subchapter S | ||||||
13 | corporations, and
owners of limited liability companies, if | ||||||
14 | the liability company is treated as a
partnership for purposes | ||||||
15 | of federal and State income taxation, there shall be
allowed a | ||||||
16 | credit under this subsection to be determined in accordance | ||||||
17 | with the
determination of income and distributive share of | ||||||
18 | income under Sections 702 and
704 and subchapter S of the | ||||||
19 | Internal Revenue Code. | ||||||
20 | For purposes of this subsection, the following terms have | ||||||
21 | the following meanings. "Qualifying "qualifying expenditures" | ||||||
22 | means the
qualifying expenditures as defined for the federal | ||||||
23 | credit for increasing
research activities which would be | ||||||
24 | allowable under Section 41 of the
Internal Revenue Code and | ||||||
25 | which are conducted in this State . "Qualifying , "qualifying
| ||||||
26 | expenditures for increasing research activities in this State" |
| |||||||
| |||||||
1 | means the
excess of qualifying expenditures for the taxable | ||||||
2 | year in which incurred
over qualifying expenditures for the | ||||||
3 | base period . "Qualifying , "qualifying expenditures
for the | ||||||
4 | base period" means : (1) for taxable years ending prior to | ||||||
5 | December 31, 2021, the average of the qualifying expenditures | ||||||
6 | for
each year in the base period ; and (2) for taxable years | ||||||
7 | ending on or after December 31, 2021, 50% of the average of the | ||||||
8 | qualifying expenditures for each year in the base period. | ||||||
9 | "Base , and "base period" means the 3 taxable years
immediately | ||||||
10 | preceding the taxable year for which the determination is
| ||||||
11 | being made. | ||||||
12 | Any credit in excess of the tax liability for the taxable | ||||||
13 | year
may be carried forward. A taxpayer may elect to have the
| ||||||
14 | unused credit shown on its final completed return carried over | ||||||
15 | as a credit
against the tax liability for the following 5 | ||||||
16 | taxable years or until it has
been fully used, whichever | ||||||
17 | occurs first; provided that no credit earned in a tax year | ||||||
18 | ending prior to December 31, 2003 may be carried forward to any | ||||||
19 | year ending on or after December 31, 2003. | ||||||
20 | If an unused credit is carried forward to a given year from | ||||||
21 | 2 or more
earlier years, that credit arising in the earliest | ||||||
22 | year will be applied
first against the tax liability for the | ||||||
23 | given year. If a tax liability for
the given year still | ||||||
24 | remains, the credit from the next earliest year will
then be | ||||||
25 | applied, and so on, until all credits have been used or no tax
| ||||||
26 | liability for the given year remains. Any remaining unused |
| |||||||
| |||||||
1 | credit or
credits then will be carried forward to the next | ||||||
2 | following year in which a
tax liability is incurred, except | ||||||
3 | that no credit can be carried forward to
a year which is more | ||||||
4 | than 5 years after the year in which the expense for
which the | ||||||
5 | credit is given was incurred. | ||||||
6 | No inference shall be drawn from Public Act 91-644 this | ||||||
7 | amendatory Act of the 91st General
Assembly in construing this | ||||||
8 | Section for taxable years beginning before January
1, 1999. | ||||||
9 | It is the intent of the General Assembly that the research | ||||||
10 | and development credit under this subsection (k) shall apply | ||||||
11 | continuously for all tax years ending on or after December 31, | ||||||
12 | 2004 and ending prior to January 1, 2027, including, but not | ||||||
13 | limited to, the period beginning on January 1, 2016 and ending | ||||||
14 | on July 6, 2017 ( the effective date of Public Act 100-22) this | ||||||
15 | amendatory Act of the 100th General Assembly . All actions | ||||||
16 | taken in reliance on the continuation of the credit under this | ||||||
17 | subsection (k) by any taxpayer are hereby validated. | ||||||
18 | This subsection (k) is exempt from the provisions of | ||||||
19 | Section 250. | ||||||
20 | (l) Environmental Remediation Tax Credit. | ||||||
21 | (i) For tax years ending after December 31, 1997 and | ||||||
22 | on or before
December 31, 2001, a taxpayer shall be | ||||||
23 | allowed a credit against the tax
imposed by subsections | ||||||
24 | (a) and (b) of this Section for certain amounts paid
for | ||||||
25 | unreimbursed eligible remediation costs, as specified in | ||||||
26 | this subsection.
For purposes of this Section, |
| |||||||
| |||||||
1 | "unreimbursed eligible remediation costs" means
costs | ||||||
2 | approved by the Illinois Environmental Protection Agency | ||||||
3 | ("Agency") under
Section 58.14 of the Environmental | ||||||
4 | Protection Act that were paid in performing
environmental | ||||||
5 | remediation at a site for which a No Further Remediation | ||||||
6 | Letter
was issued by the Agency and recorded under Section | ||||||
7 | 58.10 of the Environmental
Protection Act. The credit must | ||||||
8 | be claimed for the taxable year in which
Agency approval | ||||||
9 | of the eligible remediation costs is granted. The credit | ||||||
10 | is
not available to any taxpayer if the taxpayer or any | ||||||
11 | related party caused or
contributed to, in any material | ||||||
12 | respect, a release of regulated substances on,
in, or | ||||||
13 | under the site that was identified and addressed by the | ||||||
14 | remedial
action pursuant to the Site Remediation Program | ||||||
15 | of the Environmental Protection
Act. After the Pollution | ||||||
16 | Control Board rules are adopted pursuant to the
Illinois | ||||||
17 | Administrative Procedure Act for the administration and | ||||||
18 | enforcement of
Section 58.9 of the Environmental | ||||||
19 | Protection Act, determinations as to credit
availability | ||||||
20 | for purposes of this Section shall be made consistent with | ||||||
21 | those
rules. For purposes of this Section, "taxpayer" | ||||||
22 | includes a person whose tax
attributes the taxpayer has | ||||||
23 | succeeded to under Section 381 of the Internal
Revenue | ||||||
24 | Code and "related party" includes the persons disallowed a | ||||||
25 | deduction
for losses by paragraphs (b), (c), and (f)(1) of | ||||||
26 | Section 267 of the Internal
Revenue Code by virtue of |
| |||||||
| |||||||
1 | being a related taxpayer, as well as any of its
partners. | ||||||
2 | The credit allowed against the tax imposed by subsections | ||||||
3 | (a) and
(b) shall be equal to 25% of the unreimbursed | ||||||
4 | eligible remediation costs in
excess of $100,000 per site, | ||||||
5 | except that the $100,000 threshold shall not apply
to any | ||||||
6 | site contained in an enterprise zone as determined by the | ||||||
7 | Department of
Commerce and Community Affairs (now | ||||||
8 | Department of Commerce and Economic Opportunity). The | ||||||
9 | total credit allowed shall not exceed
$40,000 per year | ||||||
10 | with a maximum total of $150,000 per site. For partners | ||||||
11 | and
shareholders of subchapter S corporations, there shall | ||||||
12 | be allowed a credit
under this subsection to be determined | ||||||
13 | in accordance with the determination of
income and | ||||||
14 | distributive share of income under Sections 702 and 704 | ||||||
15 | and
subchapter S of the Internal Revenue Code. | ||||||
16 | (ii) A credit allowed under this subsection that is | ||||||
17 | unused in the year
the credit is earned may be carried | ||||||
18 | forward to each of the 5 taxable years
following the year | ||||||
19 | for which the credit is first earned until it is used.
The | ||||||
20 | term "unused credit" does not include any amounts of | ||||||
21 | unreimbursed eligible
remediation costs in excess of the | ||||||
22 | maximum credit per site authorized under
paragraph (i). | ||||||
23 | This credit shall be applied first to the earliest year
| ||||||
24 | for which there is a liability. If there is a credit under | ||||||
25 | this subsection
from more than one tax year that is | ||||||
26 | available to offset a liability, the
earliest credit |
| |||||||
| |||||||
1 | arising under this subsection shall be applied first. A
| ||||||
2 | credit allowed under this subsection may be sold to a | ||||||
3 | buyer as part of a sale
of all or part of the remediation | ||||||
4 | site for which the credit was granted. The
purchaser of a | ||||||
5 | remediation site and the tax credit shall succeed to the | ||||||
6 | unused
credit and remaining carry-forward period of the | ||||||
7 | seller. To perfect the
transfer, the assignor shall record | ||||||
8 | the transfer in the chain of title for the
site and provide | ||||||
9 | written notice to the Director of the Illinois Department | ||||||
10 | of
Revenue of the assignor's intent to sell the | ||||||
11 | remediation site and the amount of
the tax credit to be | ||||||
12 | transferred as a portion of the sale. In no event may a
| ||||||
13 | credit be transferred to any taxpayer if the taxpayer or a | ||||||
14 | related party would
not be eligible under the provisions | ||||||
15 | 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 | ||||||
20 | ending after
December 31, 1999, a taxpayer who
is the | ||||||
21 | custodian of one or more qualifying pupils shall be allowed a | ||||||
22 | credit
against the tax imposed by subsections (a) and (b) of | ||||||
23 | this Section for
qualified education expenses incurred on | ||||||
24 | behalf of the qualifying pupils.
The credit shall be equal to | ||||||
25 | 25% of qualified education expenses, but in no
event may the | ||||||
26 | total credit under this subsection claimed by a
family that is |
| |||||||
| |||||||
1 | the
custodian of qualifying pupils exceed (i) $500 for tax | ||||||
2 | years ending prior to December 31, 2017, and (ii) $750 for tax | ||||||
3 | years ending on or after December 31, 2017. In no event shall a | ||||||
4 | credit under
this subsection reduce the taxpayer's liability | ||||||
5 | under this Act to less than
zero. Notwithstanding any other | ||||||
6 | provision of law, for taxable years beginning on or after | ||||||
7 | January 1, 2017, no taxpayer may claim a credit under this | ||||||
8 | subsection (m) if the taxpayer's adjusted gross income for the | ||||||
9 | taxable year exceeds (i) $500,000, in the case of spouses | ||||||
10 | filing a joint federal tax return or (ii) $250,000, in the case | ||||||
11 | of all other taxpayers. This subsection is exempt from the | ||||||
12 | provisions of Section 250 of this
Act. | ||||||
13 | For purposes of this subsection: | ||||||
14 | "Qualifying pupils" means individuals who (i) are | ||||||
15 | residents of the State of
Illinois, (ii) are under the age of | ||||||
16 | 21 at the close of the school year for
which a credit is | ||||||
17 | sought, and (iii) during the school year for which a credit
is | ||||||
18 | sought were full-time pupils enrolled in a kindergarten | ||||||
19 | through twelfth
grade education program at any school, as | ||||||
20 | defined in this subsection. | ||||||
21 | "Qualified education expense" means the amount incurred
on | ||||||
22 | behalf of a qualifying pupil in excess of $250 for tuition, | ||||||
23 | book fees, and
lab fees at the school in which the pupil is | ||||||
24 | enrolled during the regular school
year. | ||||||
25 | "School" means any public or nonpublic elementary or | ||||||
26 | secondary school in
Illinois that is in compliance with Title |
| |||||||
| |||||||
1 | VI of the Civil Rights Act of 1964
and attendance at which | ||||||
2 | satisfies the requirements of Section 26-1 of the
School Code, | ||||||
3 | except that nothing shall be construed to require a child to
| ||||||
4 | attend any particular public or nonpublic school to qualify | ||||||
5 | for the credit
under this Section. | ||||||
6 | "Custodian" means, with respect to qualifying pupils, an | ||||||
7 | Illinois resident
who is a parent, the parents, a legal | ||||||
8 | guardian, or the legal guardians of the
qualifying pupils. | ||||||
9 | (n) River Edge Redevelopment Zone site remediation tax | ||||||
10 | credit.
| ||||||
11 | (i) For tax years ending on or after December 31, | ||||||
12 | 2006, a taxpayer shall be allowed a credit against the tax | ||||||
13 | imposed by subsections (a) and (b) of this Section for | ||||||
14 | certain amounts paid for unreimbursed eligible remediation | ||||||
15 | costs, as specified in this subsection. For purposes of | ||||||
16 | this Section, "unreimbursed eligible remediation costs" | ||||||
17 | means costs approved by the Illinois Environmental | ||||||
18 | Protection Agency ("Agency") under Section 58.14a of the | ||||||
19 | Environmental Protection Act that were paid in performing | ||||||
20 | environmental remediation at a site within a River Edge | ||||||
21 | Redevelopment Zone for which a No Further Remediation | ||||||
22 | Letter was issued by the Agency and recorded under Section | ||||||
23 | 58.10 of the Environmental Protection Act. The credit must | ||||||
24 | be claimed for the taxable year in which Agency approval | ||||||
25 | of the eligible remediation costs is granted. The credit | ||||||
26 | is not available to any taxpayer if the taxpayer or any |
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1 | related party caused or contributed to, in any material | ||||||
2 | respect, a release of regulated substances on, in, or | ||||||
3 | under the site that was identified and addressed by the | ||||||
4 | remedial action pursuant to the Site Remediation Program | ||||||
5 | of the Environmental Protection Act. Determinations as to | ||||||
6 | credit availability for purposes of this Section shall be | ||||||
7 | made consistent with rules adopted by the Pollution | ||||||
8 | Control Board pursuant to the Illinois Administrative | ||||||
9 | Procedure Act for the administration and enforcement of | ||||||
10 | Section 58.9 of the Environmental Protection Act. For | ||||||
11 | purposes of this Section, "taxpayer" includes a person | ||||||
12 | whose tax attributes the taxpayer has succeeded to under | ||||||
13 | Section 381 of the Internal Revenue Code and "related | ||||||
14 | party" includes the persons disallowed a deduction for | ||||||
15 | losses by paragraphs (b), (c), and (f)(1) of Section 267 | ||||||
16 | of the Internal Revenue Code by virtue of being a related | ||||||
17 | taxpayer, as well as any of its partners. The credit | ||||||
18 | allowed against the tax imposed by subsections (a) and (b) | ||||||
19 | shall be equal to 25% of the unreimbursed eligible | ||||||
20 | remediation costs in excess of $100,000 per site. | ||||||
21 | (ii) A credit allowed under this subsection that is | ||||||
22 | unused in the year the credit is earned may be carried | ||||||
23 | forward to each of the 5 taxable years following the year | ||||||
24 | for which the credit is first earned until it is used. This | ||||||
25 | credit shall be applied first to the earliest year for | ||||||
26 | which there is a liability. If there is a credit under this |
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1 | subsection from more than one tax year that is available | ||||||
2 | to offset a liability, the earliest credit arising under | ||||||
3 | this subsection shall be applied first. A credit allowed | ||||||
4 | under this subsection may be sold to a buyer as part of a | ||||||
5 | sale of all or part of the remediation site for which the | ||||||
6 | credit was granted. The purchaser of a remediation site | ||||||
7 | and the tax credit shall succeed to the unused credit and | ||||||
8 | remaining carry-forward period of the seller. To perfect | ||||||
9 | the transfer, the assignor shall record the transfer in | ||||||
10 | the chain of title for the site and provide written notice | ||||||
11 | to the Director of the Illinois Department of Revenue of | ||||||
12 | the assignor's intent to sell the remediation site and the | ||||||
13 | amount of the tax credit to be transferred as a portion of | ||||||
14 | the sale. In no event may a credit be transferred to any | ||||||
15 | taxpayer if the taxpayer or a related party would not be | ||||||
16 | eligible under the provisions of subsection (i). | ||||||
17 | (iii) For purposes of this Section, the term "site" | ||||||
18 | shall have the same meaning as under Section 58.2 of the | ||||||
19 | Environmental Protection Act. | ||||||
20 | (o) For each of taxable years during the Compassionate Use | ||||||
21 | of Medical Cannabis Program, a surcharge is imposed on all | ||||||
22 | taxpayers on income arising from the sale or exchange of | ||||||
23 | capital assets, depreciable business property, real property | ||||||
24 | used in the trade or business, and Section 197 intangibles of | ||||||
25 | an organization registrant under the Compassionate Use of | ||||||
26 | Medical Cannabis Program Act. The amount of the surcharge is |
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1 | equal to the amount of federal income tax liability for the | ||||||
2 | taxable year attributable to those sales and exchanges. The | ||||||
3 | surcharge imposed does not apply if: | ||||||
4 | (1) the medical cannabis cultivation center | ||||||
5 | registration, medical cannabis dispensary registration, or | ||||||
6 | the property of a registration is transferred as a result | ||||||
7 | of any of the following: | ||||||
8 | (A) bankruptcy, a receivership, or a debt | ||||||
9 | adjustment initiated by or against the initial | ||||||
10 | registration or the substantial owners of the initial | ||||||
11 | registration; | ||||||
12 | (B) cancellation, revocation, or termination of | ||||||
13 | any registration by the Illinois Department of Public | ||||||
14 | Health; | ||||||
15 | (C) a determination by the Illinois Department of | ||||||
16 | Public Health that transfer of the registration is in | ||||||
17 | the best interests of Illinois qualifying patients as | ||||||
18 | defined by the Compassionate Use of Medical Cannabis | ||||||
19 | Program Act; | ||||||
20 | (D) the death of an owner of the equity interest in | ||||||
21 | a registrant; | ||||||
22 | (E) the acquisition of a controlling interest in | ||||||
23 | the stock or substantially all of the assets of a | ||||||
24 | publicly traded company; | ||||||
25 | (F) a transfer by a parent company to a wholly | ||||||
26 | owned subsidiary; or |
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1 | (G) the transfer or sale to or by one person to | ||||||
2 | another person where both persons were initial owners | ||||||
3 | of the registration when the registration was issued; | ||||||
4 | or | ||||||
5 | (2) the cannabis cultivation center registration, | ||||||
6 | medical cannabis dispensary registration, or the | ||||||
7 | controlling interest in a registrant's property is | ||||||
8 | transferred in a transaction to lineal descendants in | ||||||
9 | which no gain or loss is recognized or as a result of a | ||||||
10 | transaction in accordance with Section 351 of the Internal | ||||||
11 | Revenue Code in which no gain or loss is recognized. | ||||||
12 | (Source: P.A. 100-22, eff. 7-6-17; 101-8, see Section 99 for | ||||||
13 | effective date; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19; | ||||||
14 | 101-207, eff. 8-2-19; 101-363, eff. 8-9-19; revised 11-18-20.)
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15 | Section 95. No acceleration or delay. Where this Act makes | ||||||
16 | changes in a statute that is represented in this Act by text | ||||||
17 | that is not yet or no longer in effect (for example, a Section | ||||||
18 | represented by multiple versions), the use of that text does | ||||||
19 | not accelerate or delay the taking effect of (i) the changes | ||||||
20 | made by this Act or (ii) provisions derived from any other | ||||||
21 | Public Act.
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22 | Section 99. Effective date. This Act takes effect upon | ||||||
23 | becoming law.
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