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) 2021-03-27 - Rule 19(a) / Re-referred to Rules Committee [HB3935 Detail]

Download: Illinois-2021-HB3935-Introduced.html


102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB3935

Introduced , by Rep. Tony McCombie

SYNOPSIS AS INTRODUCED:
35 ILCS 5/201

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.
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FISCAL NOTE ACT MAY APPLY

A BILL FOR

HB3935LRB102 10382 HLH 15709 b
1 AN ACT concerning revenue.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The Illinois Income Tax Act is amended by
5changing Section 201 as follows:
6 (35 ILCS 5/201)
7 (Text of Section without the changes made by P.A. 101-8,
8which 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
11imposed on every individual, corporation, trust and estate for
12each taxable year ending after July 31, 1969 on the privilege
13of earning or receiving income in or as a resident of this
14State. Such tax shall be in addition to all other occupation or
15privilege taxes imposed by this State or by any municipal
16corporation or political subdivision thereof.
17 (b) Rates. The tax imposed by subsection (a) of this
18Section shall be determined as follows, except as adjusted by
19subsection (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
21 ending prior to July 1, 1989, an amount equal to 4% of the
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
15provisions of Section 201.5.
16 (b-5) Surcharge; sale or exchange of assets, properties,
17and intangibles of organization gaming licensees. For each of
18taxable years 2019 through 2027, a surcharge is imposed on all
19taxpayers on income arising from the sale or exchange of
20capital assets, depreciable business property, real property
21used in the trade or business, and Section 197 intangibles (i)
22of an organization licensee under the Illinois Horse Racing
23Act of 1975 and (ii) of an organization gaming licensee under
24the Illinois Gambling Act. The amount of the surcharge is
25equal to the amount of federal income tax liability for the
26taxable year attributable to those sales and exchanges. The

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1surcharge 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,
11organization license, or racetrack property by a person other
12than the initial licensee to receive the organization gaming
13license is not subject to a surcharge. The Department shall
14adopt rules necessary to implement and administer this
15subsection.
16 (c) Personal Property Tax Replacement Income Tax.
17Beginning on July 1, 1979 and thereafter, in addition to such
18income tax, there is also hereby imposed the Personal Property
19Tax Replacement Income Tax measured by net income on every
20corporation (including Subchapter S corporations), partnership
21and trust, for each taxable year ending after June 30, 1979.
22Such taxes are imposed on the privilege of earning or
23receiving income in or as a resident of this State. The
24Personal Property Tax Replacement Income Tax shall be in
25addition to the income tax imposed by subsections (a) and (b)
26of this Section and in addition to all other occupation or

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

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1increased) to the rate at which the total amount of tax imposed
2under this Act, net of all credits allowed under this Act,
3shall equal (i) the total amount of tax that would be imposed
4on the foreign insurer's net income allocable to Illinois for
5the taxable year by such foreign insurer's state or country of
6domicile if that net income were subject to all income taxes
7and taxes measured by net income imposed by such foreign
8insurer's state or country of domicile, net of all credits
9allowed or (ii) a rate of zero if no such tax is imposed on
10such income by the foreign insurer's state of domicile. For
11the purposes of this subsection (d-1), an inter-affiliate
12includes 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
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
14Section 250.
15 (e) Investment credit. A taxpayer shall be allowed a
16credit against the Personal Property Tax Replacement Income
17Tax 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
25 after July 1, 1986, and the taxpayer's base employment
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
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
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
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
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

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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.

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1 (f) Investment credit; Enterprise Zone; River Edge
2Redevelopment 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

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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).

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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

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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.

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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).

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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

HB3935- 23 -LRB102 10382 HLH 15709 b
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);

HB3935- 24 -LRB102 10382 HLH 15709 b
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

HB3935- 25 -LRB102 10382 HLH 15709 b
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
20credit. For taxable years beginning on or after January 1,
212021, there shall also be allowed a High Impact Business
22construction jobs credit against the tax imposed under
23subsections (a) and (b) of this Section as provided in
24subsections (i) and (j) of Section 5.5 of the Illinois
25Enterprise Zone Act.
26 The credit or credits may not reduce the taxpayer's

HB3935- 26 -LRB102 10382 HLH 15709 b
1liability to less than zero. If the amount of the credit or
2credits exceeds the taxpayer's liability, the excess may be
3carried forward and applied against the taxpayer's liability
4in succeeding calendar years in the manner provided under
5paragraph (4) of Section 211 of this Act. The credit or credits
6shall be applied to the earliest year for which there is a tax
7liability. If there are credits from more than one taxable
8year that are available to offset a liability, the earlier
9credit shall be applied first.
10 For partners, shareholders of Subchapter S corporations,
11and owners of limited liability companies, if the liability
12company is treated as a partnership for the purposes of
13federal and State income taxation, there shall be allowed a
14credit under this Section to be determined in accordance with
15the determination of income and distributive share of income
16under Sections 702 and 704 and Subchapter S of the Internal
17Revenue Code.
18 The total aggregate amount of credits awarded under the
19Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
20amendatory 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
23Section 250.
24 (i) Credit for Personal Property Tax Replacement Income
25Tax. For tax years ending prior to December 31, 2003, a credit
26shall be allowed against the tax imposed by subsections (a)

HB3935- 27 -LRB102 10382 HLH 15709 b
1and (b) of this Section for the tax imposed by subsections (c)
2and (d) of this Section. This credit shall be computed by
3multiplying the tax imposed by subsections (c) and (d) of this
4Section by a fraction, the numerator of which is base income
5allocable to Illinois and the denominator of which is Illinois
6base income, and further multiplying the product by the tax
7rate imposed by subsections (a) and (b) of this Section.
8 Any credit earned on or after December 31, 1986 under this
9subsection which is unused in the year the credit is computed
10because it exceeds the tax liability imposed by subsections
11(a) and (b) for that year (whether it exceeds the original
12liability or the liability as later amended) may be carried
13forward and applied to the tax liability imposed by
14subsections (a) and (b) of the 5 taxable years following the
15excess credit year, provided that no credit may be carried
16forward to any year ending on or after December 31, 2003. This
17credit shall be applied first to the earliest year for which
18there is a liability. If there is a credit under this
19subsection from more than one tax year that is available to
20offset a liability the earliest credit arising under this
21subsection shall be applied first.
22 If, during any taxable year ending on or after December
2331, 1986, the tax imposed by subsections (c) and (d) of this
24Section for which a taxpayer has claimed a credit under this
25subsection (i) is reduced, the amount of credit for such tax
26shall also be reduced. Such reduction shall be determined by

HB3935- 28 -LRB102 10382 HLH 15709 b
1recomputing the credit to take into account the reduced tax
2imposed by subsections (c) and (d). If any portion of the
3reduced amount of credit has been carried to a different
4taxable year, an amended return shall be filed for such
5taxable year to reduce the amount of credit claimed.
6 (j) Training expense credit. Beginning with tax years
7ending on or after December 31, 1986 and prior to December 31,
82003, a taxpayer shall be allowed a credit against the tax
9imposed by subsections (a) and (b) under this Section for all
10amounts paid or accrued, on behalf of all persons employed by
11the taxpayer in Illinois or Illinois residents employed
12outside of Illinois by a taxpayer, for educational or
13vocational training in semi-technical or technical fields or
14semi-skilled or skilled fields, which were deducted from gross
15income in the computation of taxable income. The credit
16against the tax imposed by subsections (a) and (b) shall be
171.6% of such training expenses. For partners, shareholders of
18subchapter S corporations, and owners of limited liability
19companies, if the liability company is treated as a
20partnership for purposes of federal and State income taxation,
21there shall be allowed a credit under this subsection (j) to be
22determined in accordance with the determination of income and
23distributive share of income under Sections 702 and 704 and
24subchapter S of the Internal Revenue Code.
25 Any credit allowed under this subsection which is unused
26in the year the credit is earned may be carried forward to each

HB3935- 29 -LRB102 10382 HLH 15709 b
1of the 5 taxable years following the year for which the credit
2is first computed until it is used. This credit shall be
3applied first to the earliest year for which there is a
4liability. If there is a credit under this subsection from
5more than one tax year that is available to offset a liability,
6the earliest credit arising under this subsection shall be
7applied first. No carryforward credit may be claimed in any
8tax year ending on or after December 31, 2003.
9 (k) Research and development credit. For tax years ending
10after July 1, 1990 and prior to December 31, 2003, and
11beginning again for tax years ending on or after December 31,
122004, and ending prior to January 1, 2027, a taxpayer shall be
13allowed a credit against the tax imposed by subsections (a)
14and (b) of this Section for increasing research activities in
15this State. The credit allowed against the tax imposed by
16subsections (a) and (b) shall be equal to 6 1/2% of the
17qualifying expenditures for increasing research activities in
18this State. For partners, shareholders of subchapter S
19corporations, and owners of limited liability companies, if
20the liability company is treated as a partnership for purposes
21of federal and State income taxation, there shall be allowed a
22credit under this subsection to be determined in accordance
23with the determination of income and distributive share of
24income under Sections 702 and 704 and subchapter S of the
25Internal Revenue Code.
26 For purposes of this subsection, the following terms have

HB3935- 30 -LRB102 10382 HLH 15709 b
1the following meanings. "Qualifying "qualifying expenditures"
2means the qualifying expenditures as defined for the federal
3credit for increasing research activities which would be
4allowable under Section 41 of the Internal Revenue Code and
5which are conducted in this State. "Qualifying , "qualifying
6expenditures for increasing research activities in this State"
7means the excess of qualifying expenditures for the taxable
8year in which incurred over qualifying expenditures for the
9base period. "Qualifying , "qualifying expenditures for the
10base period" means: (1) for taxable years ending prior to
11December 31, 2021, the average of the qualifying expenditures
12for each year in the base period; and (2) for taxable years
13ending on or after December 31, 2021, 50% of the average of the
14qualifying expenditures for each year in the base period.
15"Base , and "base period" means the 3 taxable years immediately
16preceding the taxable year for which the determination is
17being made.
18 Any credit in excess of the tax liability for the taxable
19year may be carried forward. A taxpayer may elect to have the
20unused credit shown on its final completed return carried over
21as a credit against the tax liability for the following 5
22taxable years or until it has been fully used, whichever
23occurs first; provided that no credit earned in a tax year
24ending prior to December 31, 2003 may be carried forward to any
25year ending on or after December 31, 2003.
26 If an unused credit is carried forward to a given year from

HB3935- 31 -LRB102 10382 HLH 15709 b
12 or more earlier years, that credit arising in the earliest
2year will be applied first against the tax liability for the
3given year. If a tax liability for the given year still
4remains, the credit from the next earliest year will then be
5applied, and so on, until all credits have been used or no tax
6liability for the given year remains. Any remaining unused
7credit or credits then will be carried forward to the next
8following year in which a tax liability is incurred, except
9that no credit can be carried forward to a year which is more
10than 5 years after the year in which the expense for which the
11credit is given was incurred.
12 No inference shall be drawn from Public Act 91-644 this
13amendatory Act of the 91st General Assembly in construing this
14Section for taxable years beginning before January 1, 1999.
15 It is the intent of the General Assembly that the research
16and development credit under this subsection (k) shall apply
17continuously for all tax years ending on or after December 31,
182004 and ending prior to January 1, 2027, including, but not
19limited to, the period beginning on January 1, 2016 and ending
20on July 6, 2017 (the effective date of Public Act 100-22) this
21amendatory Act of the 100th General Assembly. All actions
22taken in reliance on the continuation of the credit under this
23subsection (k) by any taxpayer are hereby validated.
24 This subsection (k) is exempt from the provisions of
25Section 250.
26 (l) Environmental Remediation Tax Credit.

HB3935- 32 -LRB102 10382 HLH 15709 b
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

HB3935- 33 -LRB102 10382 HLH 15709 b
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

HB3935- 34 -LRB102 10382 HLH 15709 b
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
26ending after December 31, 1999, a taxpayer who is the

HB3935- 35 -LRB102 10382 HLH 15709 b
1custodian of one or more qualifying pupils shall be allowed a
2credit against the tax imposed by subsections (a) and (b) of
3this Section for qualified education expenses incurred on
4behalf of the qualifying pupils. The credit shall be equal to
525% of qualified education expenses, but in no event may the
6total credit under this subsection claimed by a family that is
7the custodian of qualifying pupils exceed (i) $500 for tax
8years ending prior to December 31, 2017, and (ii) $750 for tax
9years ending on or after December 31, 2017. In no event shall a
10credit under this subsection reduce the taxpayer's liability
11under this Act to less than zero. Notwithstanding any other
12provision of law, for taxable years beginning on or after
13January 1, 2017, no taxpayer may claim a credit under this
14subsection (m) if the taxpayer's adjusted gross income for the
15taxable year exceeds (i) $500,000, in the case of spouses
16filing a joint federal tax return or (ii) $250,000, in the case
17of all other taxpayers. This subsection is exempt from the
18provisions of Section 250 of this Act.
19 For purposes of this subsection:
20 "Qualifying pupils" means individuals who (i) are
21residents of the State of Illinois, (ii) are under the age of
2221 at the close of the school year for which a credit is
23sought, and (iii) during the school year for which a credit is
24sought were full-time pupils enrolled in a kindergarten
25through twelfth grade education program at any school, as
26defined in this subsection.

HB3935- 36 -LRB102 10382 HLH 15709 b
1 "Qualified education expense" means the amount incurred on
2behalf of a qualifying pupil in excess of $250 for tuition,
3book fees, and lab fees at the school in which the pupil is
4enrolled during the regular school year.
5 "School" means any public or nonpublic elementary or
6secondary school in Illinois that is in compliance with Title
7VI of the Civil Rights Act of 1964 and attendance at which
8satisfies the requirements of Section 26-1 of the School Code,
9except that nothing shall be construed to require a child to
10attend any particular public or nonpublic school to qualify
11for the credit under this Section.
12 "Custodian" means, with respect to qualifying pupils, an
13Illinois resident who is a parent, the parents, a legal
14guardian, or the legal guardians of the qualifying pupils.
15 (n) River Edge Redevelopment Zone site remediation tax
16credit.
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

HB3935- 37 -LRB102 10382 HLH 15709 b
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.

HB3935- 38 -LRB102 10382 HLH 15709 b
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

HB3935- 39 -LRB102 10382 HLH 15709 b
1of Medical Cannabis Program, a surcharge is imposed on all
2taxpayers on income arising from the sale or exchange of
3capital assets, depreciable business property, real property
4used in the trade or business, and Section 197 intangibles of
5an organization registrant under the Compassionate Use of
6Medical Cannabis Program Act. The amount of the surcharge is
7equal to the amount of federal income tax liability for the
8taxable year attributable to those sales and exchanges. The
9surcharge 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

HB3935- 40 -LRB102 10382 HLH 15709 b
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,
19eff. 6-28-19; 101-207, eff. 8-2-19; 101-363, eff. 8-9-19;
20revised 11-18-20.)
21 (Text of Section with the changes made by P.A. 101-8,
22which 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
25imposed on every individual, corporation, trust and estate for

HB3935- 41 -LRB102 10382 HLH 15709 b
1each taxable year ending after July 31, 1969 on the privilege
2of earning or receiving income in or as a resident of this
3State. Such tax shall be in addition to all other occupation or
4privilege taxes imposed by this State or by any municipal
5corporation or political subdivision thereof.
6 (b) Rates. The tax imposed by subsection (a) of this
7Section shall be determined as follows, except as adjusted by
8subsection (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

HB3935- 42 -LRB102 10382 HLH 15709 b
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

HB3935- 43 -LRB102 10382 HLH 15709 b
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%

HB3935- 44 -LRB102 10382 HLH 15709 b
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.

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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
9provisions of Section 201.5.
10 (b-5) Surcharge; sale or exchange of assets, properties,
11and intangibles of organization gaming licensees. For each of
12taxable years 2019 through 2027, a surcharge is imposed on all
13taxpayers on income arising from the sale or exchange of
14capital assets, depreciable business property, real property
15used in the trade or business, and Section 197 intangibles (i)
16of an organization licensee under the Illinois Horse Racing
17Act of 1975 and (ii) of an organization gaming licensee under
18the Illinois Gambling Act. The amount of the surcharge is
19equal to the amount of federal income tax liability for the
20taxable year attributable to those sales and exchanges. The
21surcharge 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

HB3935- 46 -LRB102 10382 HLH 15709 b
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

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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,
5organization license, or racetrack property by a person other
6than the initial licensee to receive the organization gaming
7license is not subject to a surcharge. The Department shall
8adopt rules necessary to implement and administer this
9subsection.
10 (c) Personal Property Tax Replacement Income Tax.
11Beginning on July 1, 1979 and thereafter, in addition to such
12income tax, there is also hereby imposed the Personal Property
13Tax Replacement Income Tax measured by net income on every
14corporation (including Subchapter S corporations), partnership
15and trust, for each taxable year ending after June 30, 1979.
16Such taxes are imposed on the privilege of earning or
17receiving income in or as a resident of this State. The
18Personal Property Tax Replacement Income Tax shall be in
19addition to the income tax imposed by subsections (a) and (b)
20of this Section and in addition to all other occupation or
21privilege taxes imposed by this State or by any municipal
22corporation or political subdivision thereof.
23 (d) Additional Personal Property Tax Replacement Income
24Tax Rates. The personal property tax replacement income tax
25imposed by this subsection and subsection (c) of this Section
26in the case of a corporation, other than a Subchapter S

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1corporation and except as adjusted by subsection (d-1), shall
2be an additional amount equal to 2.85% of such taxpayer's net
3income for the taxable year, except that beginning on January
41, 1981, and thereafter, the rate of 2.85% specified in this
5subsection shall be reduced to 2.5%, and in the case of a
6partnership, trust or a Subchapter S corporation shall be an
7additional amount equal to 1.5% of such taxpayer's net income
8for the taxable year.
9 (d-1) Rate reduction for certain foreign insurers. In the
10case of a foreign insurer, as defined by Section 35A-5 of the
11Illinois Insurance Code, whose state or country of domicile
12imposes on insurers domiciled in Illinois a retaliatory tax
13(excluding any insurer whose premiums from reinsurance assumed
14are 50% or more of its total insurance premiums as determined
15under paragraph (2) of subsection (b) of Section 304, except
16that for purposes of this determination premiums from
17reinsurance do not include premiums from inter-affiliate
18reinsurance arrangements), beginning with taxable years ending
19on or after December 31, 1999, the sum of the rates of tax
20imposed by subsections (b) and (d) shall be reduced (but not
21increased) to the rate at which the total amount of tax imposed
22under this Act, net of all credits allowed under this Act,
23shall equal (i) the total amount of tax that would be imposed
24on the foreign insurer's net income allocable to Illinois for
25the taxable year by such foreign insurer's state or country of
26domicile if that net income were subject to all income taxes

HB3935- 49 -LRB102 10382 HLH 15709 b
1and taxes measured by net income imposed by such foreign
2insurer's state or country of domicile, net of all credits
3allowed or (ii) a rate of zero if no such tax is imposed on
4such income by the foreign insurer's state of domicile. For
5the purposes of this subsection (d-1), an inter-affiliate
6includes 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

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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
8Section 250.
9 (e) Investment credit. A taxpayer shall be allowed a
10credit against the Personal Property Tax Replacement Income
11Tax 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

HB3935- 51 -LRB102 10382 HLH 15709 b
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

HB3935- 52 -LRB102 10382 HLH 15709 b
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;

HB3935- 53 -LRB102 10382 HLH 15709 b
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

HB3935- 54 -LRB102 10382 HLH 15709 b
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

HB3935- 55 -LRB102 10382 HLH 15709 b
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,

HB3935- 56 -LRB102 10382 HLH 15709 b
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
22Redevelopment 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

HB3935- 57 -LRB102 10382 HLH 15709 b
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

HB3935- 58 -LRB102 10382 HLH 15709 b
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

HB3935- 59 -LRB102 10382 HLH 15709 b
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

HB3935- 60 -LRB102 10382 HLH 15709 b
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.

HB3935- 61 -LRB102 10382 HLH 15709 b
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

HB3935- 62 -LRB102 10382 HLH 15709 b
1 Commerce and Economic Opportunity designated High Impact
2 Business. The credit shall be .5% of the basis for such
3 property. The credit shall not be available (i) until the
4 minimum investments in qualified property set forth in
5 subdivision (a)(3)(A) of Section 5.5 of the Illinois
6 Enterprise Zone Act have been satisfied or (ii) until the
7 time authorized in subsection (b-5) of the Illinois
8 Enterprise Zone Act for entities designated as High Impact
9 Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
10 (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
11 Act, and shall not be allowed to the extent that it would
12 reduce a taxpayer's liability for the tax imposed by
13 subsections (a) and (b) of this Section to below zero. The
14 credit applicable to such investments shall be taken in
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

HB3935- 63 -LRB102 10382 HLH 15709 b
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

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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

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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
14credit. For taxable years beginning on or after January 1,
152021, there shall also be allowed a High Impact Business
16construction jobs credit against the tax imposed under
17subsections (a) and (b) of this Section as provided in
18subsections (i) and (j) of Section 5.5 of the Illinois
19Enterprise Zone Act.
20 The credit or credits may not reduce the taxpayer's
21liability to less than zero. If the amount of the credit or
22credits exceeds the taxpayer's liability, the excess may be
23carried forward and applied against the taxpayer's liability
24in succeeding calendar years in the manner provided under
25paragraph (4) of Section 211 of this Act. The credit or credits
26shall be applied to the earliest year for which there is a tax

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1liability. If there are credits from more than one taxable
2year that are available to offset a liability, the earlier
3credit shall be applied first.
4 For partners, shareholders of Subchapter S corporations,
5and owners of limited liability companies, if the liability
6company is treated as a partnership for the purposes of
7federal and State income taxation, there shall be allowed a
8credit under this Section to be determined in accordance with
9the determination of income and distributive share of income
10under Sections 702 and 704 and Subchapter S of the Internal
11Revenue Code.
12 The total aggregate amount of credits awarded under the
13Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
14amendatory 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
17Section 250.
18 (i) Credit for Personal Property Tax Replacement Income
19Tax. For tax years ending prior to December 31, 2003, a credit
20shall be allowed against the tax imposed by subsections (a)
21and (b) of this Section for the tax imposed by subsections (c)
22and (d) of this Section. This credit shall be computed by
23multiplying the tax imposed by subsections (c) and (d) of this
24Section by a fraction, the numerator of which is base income
25allocable to Illinois and the denominator of which is Illinois
26base income, and further multiplying the product by the tax

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1rate imposed by subsections (a) and (b) of this Section.
2 Any credit earned on or after December 31, 1986 under this
3subsection which is unused in the year the credit is computed
4because it exceeds the tax liability imposed by subsections
5(a) and (b) for that year (whether it exceeds the original
6liability or the liability as later amended) may be carried
7forward and applied to the tax liability imposed by
8subsections (a) and (b) of the 5 taxable years following the
9excess credit year, provided that no credit may be carried
10forward to any year ending on or after December 31, 2003. This
11credit shall be applied first to the earliest year for which
12there is a liability. If there is a credit under this
13subsection from more than one tax year that is available to
14offset a liability the earliest credit arising under this
15subsection shall be applied first.
16 If, during any taxable year ending on or after December
1731, 1986, the tax imposed by subsections (c) and (d) of this
18Section for which a taxpayer has claimed a credit under this
19subsection (i) is reduced, the amount of credit for such tax
20shall also be reduced. Such reduction shall be determined by
21recomputing the credit to take into account the reduced tax
22imposed by subsections (c) and (d). If any portion of the
23reduced amount of credit has been carried to a different
24taxable year, an amended return shall be filed for such
25taxable year to reduce the amount of credit claimed.
26 (j) Training expense credit. Beginning with tax years

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1ending on or after December 31, 1986 and prior to December 31,
22003, a taxpayer shall be allowed a credit against the tax
3imposed by subsections (a) and (b) under this Section for all
4amounts paid or accrued, on behalf of all persons employed by
5the taxpayer in Illinois or Illinois residents employed
6outside of Illinois by a taxpayer, for educational or
7vocational training in semi-technical or technical fields or
8semi-skilled or skilled fields, which were deducted from gross
9income in the computation of taxable income. The credit
10against the tax imposed by subsections (a) and (b) shall be
111.6% of such training expenses. For partners, shareholders of
12subchapter S corporations, and owners of limited liability
13companies, if the liability company is treated as a
14partnership for purposes of federal and State income taxation,
15there shall be allowed a credit under this subsection (j) to be
16determined in accordance with the determination of income and
17distributive share of income under Sections 702 and 704 and
18subchapter S of the Internal Revenue Code.
19 Any credit allowed under this subsection which is unused
20in the year the credit is earned may be carried forward to each
21of the 5 taxable years following the year for which the credit
22is first computed until it is used. This credit shall be
23applied first to the earliest year for which there is a
24liability. If there is a credit under this subsection from
25more than one tax year that is available to offset a liability,
26the earliest credit arising under this subsection shall be

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1applied first. No carryforward credit may be claimed in any
2tax year ending on or after December 31, 2003.
3 (k) Research and development credit. For tax years ending
4after July 1, 1990 and prior to December 31, 2003, and
5beginning again for tax years ending on or after December 31,
62004, and ending prior to January 1, 2027, a taxpayer shall be
7allowed a credit against the tax imposed by subsections (a)
8and (b) of this Section for increasing research activities in
9this State. The credit allowed against the tax imposed by
10subsections (a) and (b) shall be equal to 6 1/2% of the
11qualifying expenditures for increasing research activities in
12this State. For partners, shareholders of subchapter S
13corporations, and owners of limited liability companies, if
14the liability company is treated as a partnership for purposes
15of federal and State income taxation, there shall be allowed a
16credit under this subsection to be determined in accordance
17with the determination of income and distributive share of
18income under Sections 702 and 704 and subchapter S of the
19Internal Revenue Code.
20 For purposes of this subsection, the following terms have
21the following meanings. "Qualifying "qualifying expenditures"
22means the qualifying expenditures as defined for the federal
23credit for increasing research activities which would be
24allowable under Section 41 of the Internal Revenue Code and
25which are conducted in this State. "Qualifying , "qualifying
26expenditures for increasing research activities in this State"

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1means the excess of qualifying expenditures for the taxable
2year in which incurred over qualifying expenditures for the
3base period. "Qualifying , "qualifying expenditures for the
4base period" means: (1) for taxable years ending prior to
5December 31, 2021, the average of the qualifying expenditures
6for each year in the base period; and (2) for taxable years
7ending on or after December 31, 2021, 50% of the average of the
8qualifying expenditures for each year in the base period.
9"Base , and "base period" means the 3 taxable years immediately
10preceding the taxable year for which the determination is
11being made.
12 Any credit in excess of the tax liability for the taxable
13year may be carried forward. A taxpayer may elect to have the
14unused credit shown on its final completed return carried over
15as a credit against the tax liability for the following 5
16taxable years or until it has been fully used, whichever
17occurs first; provided that no credit earned in a tax year
18ending prior to December 31, 2003 may be carried forward to any
19year ending on or after December 31, 2003.
20 If an unused credit is carried forward to a given year from
212 or more earlier years, that credit arising in the earliest
22year will be applied first against the tax liability for the
23given year. If a tax liability for the given year still
24remains, the credit from the next earliest year will then be
25applied, and so on, until all credits have been used or no tax
26liability for the given year remains. Any remaining unused

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1credit or credits then will be carried forward to the next
2following year in which a tax liability is incurred, except
3that no credit can be carried forward to a year which is more
4than 5 years after the year in which the expense for which the
5credit is given was incurred.
6 No inference shall be drawn from Public Act 91-644 this
7amendatory Act of the 91st General Assembly in construing this
8Section for taxable years beginning before January 1, 1999.
9 It is the intent of the General Assembly that the research
10and development credit under this subsection (k) shall apply
11continuously for all tax years ending on or after December 31,
122004 and ending prior to January 1, 2027, including, but not
13limited to, the period beginning on January 1, 2016 and ending
14on July 6, 2017 (the effective date of Public Act 100-22) this
15amendatory Act of the 100th General Assembly. All actions
16taken in reliance on the continuation of the credit under this
17subsection (k) by any taxpayer are hereby validated.
18 This subsection (k) is exempt from the provisions of
19Section 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,

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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

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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

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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
20ending after December 31, 1999, a taxpayer who is the
21custodian of one or more qualifying pupils shall be allowed a
22credit against the tax imposed by subsections (a) and (b) of
23this Section for qualified education expenses incurred on
24behalf of the qualifying pupils. The credit shall be equal to
2525% of qualified education expenses, but in no event may the
26total credit under this subsection claimed by a family that is

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1the custodian of qualifying pupils exceed (i) $500 for tax
2years ending prior to December 31, 2017, and (ii) $750 for tax
3years ending on or after December 31, 2017. In no event shall a
4credit under this subsection reduce the taxpayer's liability
5under this Act to less than zero. Notwithstanding any other
6provision of law, for taxable years beginning on or after
7January 1, 2017, no taxpayer may claim a credit under this
8subsection (m) if the taxpayer's adjusted gross income for the
9taxable year exceeds (i) $500,000, in the case of spouses
10filing a joint federal tax return or (ii) $250,000, in the case
11of all other taxpayers. This subsection is exempt from the
12provisions of Section 250 of this Act.
13 For purposes of this subsection:
14 "Qualifying pupils" means individuals who (i) are
15residents of the State of Illinois, (ii) are under the age of
1621 at the close of the school year for which a credit is
17sought, and (iii) during the school year for which a credit is
18sought were full-time pupils enrolled in a kindergarten
19through twelfth grade education program at any school, as
20defined in this subsection.
21 "Qualified education expense" means the amount incurred on
22behalf of a qualifying pupil in excess of $250 for tuition,
23book fees, and lab fees at the school in which the pupil is
24enrolled during the regular school year.
25 "School" means any public or nonpublic elementary or
26secondary school in Illinois that is in compliance with Title

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1VI of the Civil Rights Act of 1964 and attendance at which
2satisfies the requirements of Section 26-1 of the School Code,
3except that nothing shall be construed to require a child to
4attend any particular public or nonpublic school to qualify
5for the credit under this Section.
6 "Custodian" means, with respect to qualifying pupils, an
7Illinois resident who is a parent, the parents, a legal
8guardian, or the legal guardians of the qualifying pupils.
9 (n) River Edge Redevelopment Zone site remediation tax
10credit.
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

HB3935- 78 -LRB102 10382 HLH 15709 b
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
21of Medical Cannabis Program, a surcharge is imposed on all
22taxpayers on income arising from the sale or exchange of
23capital assets, depreciable business property, real property
24used in the trade or business, and Section 197 intangibles of
25an organization registrant under the Compassionate Use of
26Medical Cannabis Program Act. The amount of the surcharge is

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1equal to the amount of federal income tax liability for the
2taxable year attributable to those sales and exchanges. The
3surcharge 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
13effective date; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
14101-207, eff. 8-2-19; 101-363, eff. 8-9-19; revised 11-18-20.)
15 Section 95. No acceleration or delay. Where this Act makes
16changes in a statute that is represented in this Act by text
17that is not yet or no longer in effect (for example, a Section
18represented by multiple versions), the use of that text does
19not accelerate or delay the taking effect of (i) the changes
20made by this Act or (ii) provisions derived from any other
21Public Act.
22 Section 99. Effective date. This Act takes effect upon
23becoming law.
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