Bill Text: IL SB0009 | 2017-2018 | 100th General Assembly | Engrossed


Bill Title: Creates the Sugar-Sweetened Beverage Tax Act. Imposes a tax on distributors of bottled sugar-sweetened beverages, syrups, or powders at the rate of $0.01 per ounce of bottled sugar-sweetened beverages sold or offered for sale to a retailer for sale in the State to a consumer. Requires those distributors to obtain permits. Provides that 2% of the moneys shall be deposited into the Tax Compliance and Administration Fund for the administrative costs of the Department of Revenue, and 98% of the moneys shall be deposited into the General Revenue Fund. Amends the Illinois Income Tax Act. Makes changes concerning the rate of tax. Extends the research and development credit for tax years ending prior to January 1, 2027. Creates an addition modification in an amount equal to the deduction for qualified domestic production activities allowed under Section 199 of the Internal Revenue Code. Makes changes concerning the definition of "unitary business group". Makes changes concerning estimated taxes. Amends the Film Production Services Tax Credit Act of 2008. Provides that no taxpayer may take a credit awarded under the Act for tax years beginning on or after January 1, 2027. Amends the Business Corporation Act of 1983. Makes changes concerning penalties and reports. Amends the Limited Liability Company Act. Makes changes concerning the fee for filing articles of organization. Effective immediately, but this Act does not take effect at all unless Senate Bills 1, 2, 3, 4, 5, 6, 7, 8, 10, 11, 12, and 13 of the 100th General Assembly become law.

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Engrossed) 2017-05-31 - Final Action Deadline Extended-9(b) June 30, 2017 [SB0009 Detail]

Download: Illinois-2017-SB0009-Engrossed.html



SB0009 EngrossedLRB100 06347 HLH 16385 b
1 AN ACT concerning revenue.
2 WHEREAS, the changes made by this Act are made under
3subsection (a) of Section 3 of Article IX of the Illinois
4Constitution. If there are future changes made to subsection
5(a) of Section 3 of Article IX of the Illinois Constitution,
6then it may result in evaluating the taxes on income imposed by
7this Act; therefore
8 Be it enacted by the People of the State of Illinois,
9represented in the General Assembly:
10
ARTICLE 5. BUDGET ECONOMIC STABILIZATION FUND ACT
11 Section 5-1. Short title. This Act may be cited as the
12Budget Economic Stabilization Fund Act.
13 Section 5-5. Legislative intent.
14 The General Assembly finds that, in order to restore
15Illinois' fiscal health, retaining a share of above-trend State
16revenues for future needs and for reducing the need for new
17taxes or increasing any rate of tax or otherwise modifying the
18tax structure, including the elimination or modification of
19deductions, exclusions, or exemptions, is a priority.
20 Section 5-10. Definitions. As used in this Act:

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1 "Above-trend revenues" means general funds revenue
2collections that exceed 2.4% of the prior fiscal year's general
3funds revenue collections.
4 "General funds" means the General Revenue Fund, the Common
5School Fund, the Education Assistance Fund, and the General
6Revenue Common School Special Account Fund.
7 "General funds revenue collections" means, for each fiscal
8year, all gross personal and corporate income taxes, other
9taxes, fees, and other revenues expected to be deposited into
10the State's general funds and recurring transfers into general
11funds from the State Lottery and gaming, but does not include
12other transfers and federal funds.
13 "Unpaid bills" means: pending vouchers approved for
14payment but not paid as of December 31st for each fiscal year
15by the Office of the Comptroller; pending transfers required by
16State statute that have been recorded but have not been paid
17from the General Revenue Fund, Common School Fund, or Education
18Assistance Fund; and all vouchers for invoices that have been
19certified as a proper bill, as defined by the State Prompt
20Payment Act, by the Departments of Healthcare and Family
21Services, Central Management Services, Human Services,
22Revenue, and Aging but not yet approved by the Comptroller as
23of December 31st of each fiscal year from the General Revenue
24Fund, Common School Fund, Education Assistance Fund, Health
25Insurance Fund, Income Tax Refund Fund, and Healthcare Provider
26Relief Fund.

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1 Section 5-15. Certification of the backlog of bills. The
2amount of unpaid bills shall be reported by the Comptroller and
3the Departments of Healthcare and Family Services, Central
4Management Services, Human Services, Revenue, and Aging to the
5Governor's Office of Management and Budget no later than
6January 10th of each year. By January 15th of each year, the
7Governor's Office of Management and Budget shall notify the
8Comptroller, Treasurer, the Speaker and Minority Leader of the
9House, and the President and Minority Leader of the Senate of
10the total amount of unpaid bills as of the preceding December
1131st.
12 Section 5-20. Payment of unpaid bills. If unpaid bills
13total more than $1,000,000,000, the Governor shall include in
14his or her budget for the next fiscal year an amount to pay
15unpaid bills equal to the lesser of (i) 50% of above-trend
16revenues that the Governor projects to be received by the State
17in the next fiscal year or (ii) the amount of above-trend
18revenues needed to reduce the unpaid bills to $1,000,000,000.
19This amount to pay off unpaid bills shall be included in the
20Governor's budget as an appropriation to the Bill Backlog
21Payment Fund from the General Revenue Fund. Nothing in this Act
22prohibits the Governor from including in his or her budget, or
23the General Assembly from appropriating, additional moneys for
24the payment of unpaid bills. If for any reason the

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1appropriations enacted are insufficient to meet the payment of
2unpaid bills required to be included in the Governor's budget
3under this Section, then there is hereby appropriated, on a
4continuing annual basis in each fiscal year, from the General
5Revenue Fund, the amounts necessary for this payment.
6 Section 5-25. Transfers into the Budget Economic
7Stabilization Fund.
8 (a) If unpaid bills total less than $1,000,000,000 the
9Governor shall include in his or her budget for the next fiscal
10year at least 50% of any above-trend revenues that the Governor
11projects to be received in the next fiscal year for deposit to
12the Budget Economic Stabilization Fund as an appropriation from
13the General Revenue Fund. Except as provided in subsection (b)
14of this Section, if for any reason the appropriations enacted
15are insufficient to make the deposit required by this Section,
16then this Section shall constitute a continuing appropriation
17from the General Revenue Fund of all amounts necessary for this
18deposit.
19 (b) If the balance of the Budget Economic Stabilization
20Fund at the beginning of the next fiscal year is projected by
21the Governor to exceed 5% of the general funds revenue
22collections estimated for the next fiscal year, transfers into
23the Budget Economic Stabilization Fund are not required for
24that fiscal year.

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1 Section 5-30. Withdrawal from Budget Economic
2Stabilization Fund.
3 (a) Upon the direction of the Governor at any time within a
4fiscal year and within the limitations set forth in this
5Section, the Comptroller and the Treasurer shall transfer the
6amounts designated by the Governor from the Budget Economic
7Stabilization Fund to general funds as specified by the
8Governor. The transfer shall be made as soon as practicable on
9or after the 30th day after the Governor has provided written
10notice of his or her direction to transfer to the Clerk of the
11House of Representatives, the Secretary of the Senate, and the
12Index Department of the Office of the Secretary of State, with
13copies of the notice provided to the Comptroller and Treasurer.
14The notice shall be published on the website of the Governor's
15Office of Management and Budget. The amount directed to be
16transferred may not exceed the limits set forth in subsection
17(c) of this Section. The Governor may direct a transfer from
18the Budget Economic Stabilization Fund to any of the general
19funds only if: he or she estimates that general funds revenue
20collections for the current fiscal year will be less than the
21general funds revenue collections as estimated at the time of
22enactment of appropriations for the current fiscal year; the
23transfer is necessary to provide for the health, safety, and
24welfare of the people of the State of Illinois; and the funds
25transferred are to be spent within previously enacted
26appropriations.

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1 (b) In addition to transfers directed by the Governor
2within a fiscal year, transfers or appropriations from the
3Budget Economic Stabilization Fund for the current or next
4fiscal year may be made by vote of the General Assembly if:
5 (1) the General Assembly projects that general funds
6 revenue collections for the current or next fiscal year are
7 less than the general funds revenue collections as
8 estimated at the time of enactment of appropriations for
9 the current fiscal year for the preceding year;
10 (2) the General Assembly finds that general funds
11 revenue collections have remained stagnant or dropped
12 during 2 consecutive fiscal quarters within the preceding
13 12 months as compared to the corresponding 2 fiscal
14 quarters of the prior fiscal year; or
15 (3) that the State Coincident Index for the State of
16 Illinois has remained stagnant or dropped over 2
17 consecutive quarters within the preceding 12 months, as
18 published in the Federal Reserve Bank of Philadelphia's
19 publication entitled "State Coincident Indexes" or its
20 successor publication.
21 (c) Transfers or appropriations from the Budget Economic
22Stabilization Fund may not, during any fiscal year, exceed the
23lesser of:
24 (1) 50% of the Budget Economic Stabilization Fund's
25 balance;
26 (2) in the case of appropriation enacted by the General

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1 Assembly, 50% of the difference between (i) general funds
2 revenue collections, as projected by the Commission on
3 Government Forecasting and Accountability to be received
4 in the next fiscal year, and (ii) a revised general fund
5 revenue collections projection for the current fiscal year
6 presented to the General Assembly by the Commission on
7 Government Forecasting and Accountability; or
8 (3) in the case of transfers to be directed by the
9 Governor within a fiscal year, 50% of the difference
10 between (i) general funds revenue collections, to be
11 received in the next fiscal year as projected by the
12 Governor, and (ii) a revised general fund revenue
13 collections projection for the current fiscal year as
14 projected by the Governor.
15 Section 5-35. Fund creation.
16 (a) There is created the Budget Economic Stabilization Fund
17as a special fund in the State Treasury consisting of moneys
18appropriated or transferred to that Fund as provided in Section
195-30 of this Act and as otherwise provided by law. All earnings
20on Budget Economic Stabilization Fund investments shall be
21deposited into that Fund.
22 (b) There is created the Bill Backlog Payment Fund as a
23special fund in the State Treasury consisting of moneys
24appropriated or transferred to that Fund as provided in Section -
2525 of this Act and as otherwise provided by law. All earnings

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1on Bill Backlog Payment Fund investments shall be deposited
2into that Fund.
3
ARTICLE 10. VIDEO SERVICE TAX MODERNIZATION
4 Section 10-1. Short title. This Act may be cited as the
5Video Service Tax Modernization Act.
6 Section 10-5. Application. This Act applies to the
7provision of direct-to-home satellite service, direct
8broadcast satellite service, and digital audio-visual works on
9or after the effective date of this Act.
10 This Act does not apply to: (1) satellite radio service or
11subscription radio service whereby a digital radio signal is
12broadcast without any corresponding or related video
13programming or services; or (2) a satellite television
14transmission of simulcast horse races broadcast from or
15received at locations operated by an organization licensee, an
16inter-track wagering licensee, or an inter-track wagering
17location licensee licensed under the Illinois Horse Racing Act
18of 1975.
19 Section 10-10. Definitions. As used in this Act:
20 "Department" means the Department of Revenue.
21 "Digital audio-visual works" means a series of related
22images that, when shown in succession, impart an impression of

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1motion, together with accompanying sounds, if any, sold to an
2end user with rights of less than permanent use. "Digital
3audio-visual works" does not include cable service provided by
4a cable operator, as those terms are defined in 47 U.S.C. 522,
5and does not include video service provided by a holder, as
6those terms are defined in Article 21 of the Public Utilities
7Act.
8 "Direct broadcast satellite service" means video services
9transmitted or broadcast by satellite directly to the
10subscriber's premises with the use of or accompanied by ground
11receiving or distribution equipment, including, but not
12limited to, infrastructure to provide Internet access used in
13the transmission or broadcast of such video services, at the
14subscriber's premises, but not in the uplink process to the
15satellite, and includes, but is not limited to, the
16retransmission of local broadcast television, the provision of
17premium channels, other recurring monthly services, service
18and pay-per-view, video-on-demand, and other event-based
19services.
20 "Direct-to-home satellite service" has the meaning given
21to that term in Public Law No. 104-104, Title VI, Section
22602(a), February 8, 1996, 110 Stat. 144 (reprinted at 47 U.S.C.
23152).
24 "End user" means any person other than a person who
25receives by contract a product transferred electronically for
26further commercial broadcast, rebroadcast, transmission,

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1retransmission, licensing, relicensing, distribution,
2redistribution, or exhibition of the product, in whole or in
3part, to another person or persons.
4 "Gross revenue" means all consideration of any kind or
5nature received by a provider, or an affiliate of the provider,
6in connection with the provision of direct-to-home satellite
7service, direct broadcast satellite service, or digital
8audio-visual works to subscribers. "Gross revenue" does not
9include:
10 (1) charges for the rental of equipment related to the
11 provision of direct-to-home satellite service, direct
12 broadcast satellite service, or digital audiovisual works;
13 (2) activation, installation, repair, or maintenance
14 charges or similar service charges related to the provision
15 of direct-to-home satellite service, direct broadcast
16 satellite service, or digital audio-visual works;
17 (3) service order charges, service termination
18 charges, or any other administrative charges related to the
19 provision of direct-to-home satellite service, direct
20 broadcast satellite service, or digital audiovisual works;
21 (4) revenue not actually received, regardless of
22 whether it is billed, including, but not limited to, bad
23 debts;
24 (5) revenue received by an affiliate or other person in
25 exchange for supplying goods and services used by a
26 provider;

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1 (6) the amount of any refunds, rebates, or discounts
2 made to subscribers, advertisers, or other persons;
3 (7) revenue from any service that is subject to tax
4 under the Service Occupation Tax Act, Retailers'
5 Occupation Tax Act, Service Use Tax Act, or Use Tax Act;
6 (8) the tax imposed by this Act or any other tax of
7 general applicability imposed on a provider or a purchaser
8 of direct-to-home satellite service, direct broadcast
9 satellite service, or digital audio-visual works by a
10 federal, State, or local governmental entity and required
11 to be collected by a person and remitted to the taxing
12 entity;
13 (9) late payment fees collected from subscribers;
14 (10) charges, other than those charges specifically
15 described in this Act, that are aggregated or bundled with
16 such specifically-described charges on a subscriber's
17 bill, if the provider can reasonably identify the charges
18 in its books and records kept in the regular course of
19 business;
20 (11) revenue from advertising services; or
21 (12) charges that may not be taxed pursuant to the
22 federal Internet Tax Freedom Act.
23 "Permanent" means perpetual or for an indefinite or
24unspecified length of time.
25 "Person" means a natural individual, firm, trust, estate,
26partnership, association, joint stock company, joint venture,

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1corporation, or limited liability company, or a receiver,
2trustee, guardian, or other representative appointed by order
3of any court, and includes the federal and State governments,
4including State universities created by statute, and
5municipalities, counties, and other political subdivisions of
6this State.
7 "Premises" means a residence or place of business of a
8subscriber in this State.
9 "Provider" means a person who transmits, broadcasts,
10sells, or distributes direct-to-home satellite service, direct
11broadcast satellite service, or digital audio-visual works to
12subscribers in the State.
13 "Subscriber" means a member of the general public who
14receives direct-to-home satellite service, direct broadcast
15satellite service, or digital audio-visual works from a
16provider and does not further distribute the service in the
17ordinary course of business.
18 Section 10-15. Imposition of tax.
19 (a) A tax is imposed upon the act or privilege of providing
20direct-to-home satellite service, direct broadcast satellite
21service, or digital audio-visual works to a subscriber in this
22State by any provider at the rate of 5% of the provider's gross
23revenues derived from or attributable to that subscriber.
24 (b) For purposes of the tax imposed by subsection (a), a
25subscriber is in this State if the subscriber's street address

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1representative of where the subscriber's use or access of the
2direct-to-home satellite service, direct broadcast satellite
3service, or digital audio visual work primarily occurs, which
4must be the street address of the subscriber based on such
5other information kept by the provider in the regular course of
6its business.
7 (c) The tax imposed by subsection (a) may be passed through
8to, and collected from, the provider's subscribers in Illinois.
9To the extent allowed under federal or State law, a provider
10may identify as a separate line item on each regular bill
11issued to a subscriber the amount of the total bill assessed as
12a tax under this Act.
13 (d) To prevent actual multi-state taxation upon the act or
14privilege that is subject to taxation under this Act, any
15taxpayer, upon proof that that taxpayer has paid a tax in
16another state on such event, shall be allowed a credit against
17the tax imposed in this Act to the extent of the amount of such
18tax properly due and paid in such other state. However, such
19tax is not imposed on the act or privilege to the extent such
20act or privilege may not, under the Constitution and statutes
21of the United States, be made the subject of taxation by the
22State.
23 Section 10-20. Remittances.
24 (a) On or before the twentieth day of each calendar month,
25every provider of direct-to-home satellite service, direct

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1broadcast satellite service, or digital audio-visual works
2that provides such service or services to a subscriber in this
3State during the preceding calendar month shall file a return
4with the Department, in a form prescribed by the Department,
5stating:
6 (1) the name of the provider;
7 (2) the address of the provider's principal place of
8 business;
9 (3) the total amount of gross revenues received by the
10 provider during the preceding calendar month, quarter, or
11 year, as the case may be, from the provision of
12 direct-to-home satellite service, direct broadcast
13 satellite service, or digital audio-visual works during
14 that preceding calendar month, quarter, or year and upon
15 the basis of which the tax is imposed;
16 (4) the amount of tax due;
17 (5) the signature of the taxpayer; and
18 (6) such other reasonable information as the
19 Department may require.
20 (b) If a taxpayer fails to sign a return within 30 days
21after the proper notice and demand for signature by the
22Department is received by the taxpayer, then the return shall
23be considered valid and any amount shown to be due on the
24return shall be deemed assessed.
25 (c) If the provider is otherwise required to file a monthly
26return, and if the provider's average monthly tax liability to

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1the Department under this Act does not exceed $200, the
2Department may authorize the provider's returns to be filed on
3a quarter annual basis, with the return for January, February,
4and March of a given year being due by April 20 of that year;
5with the return for April, May, and June of a given year being
6due by July 20 of that year; with the return for July, August,
7and September of a given year being due by October 20 of that
8year, and with the return for October, November, and December
9of a given year being due by January 20 of the following year.
10 (d) If the provider is otherwise required to file a monthly
11or quarterly return, and if the provider's average monthly tax
12liability with the Department under this Act does not exceed
13$50, the Department may authorize the provider's returns to be
14filed on an annual basis, with the return for a given year
15being due by January 20 of the following year.
16 (e) Those quarterly and annual returns shall be subject to
17the same requirements as to form and substance as monthly
18returns.
19 (f) A taxpayer who has an annual tax liability in the
20amount set forth in subsection (b) of Section 2505-210 of the
21Department of Revenue Law shall make all payments required by
22rules of the Department by electronic funds transfer.
23 Any taxpayer not required to make payments by electronic
24funds transfer may make payments by electronic funds transfer
25with the permission of the Department.
26 All taxpayers required to make payment by electronic funds

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1transfer and any taxpayers authorized to voluntarily make
2payments by electronic funds transfer shall make those payments
3in the manner authorized by the Department.
4 Section 10-25. Records.
5 (a) A provider on whom the tax is imposed by this Act shall
6maintain the necessary records, and any other information
7required by the Department, to determine the amount of the tax
8that the provider is required to remit and any credit that the
9provider is entitled to claim under this Act.
10 (b) The records shall be open at all times to inspection by
11the Department.
12 Section 10-30. Rules. The Department is authorized to adopt
13and enforce any reasonable rules and to prescribe such forms
14relating to the administration and enforcement of this Act as
15it may deem appropriate.
16 Section 10-35. Incorporation of Retailers' Occupation Tax
17Act and Uniform Penalty and Interest Act. All of the provisions
18of Sections 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i, and 5j of the
19Retailers' Occupation Tax Act, which are not inconsistent with
20this Act, and the Uniform Penalty and Interest Act, shall
21apply, as far as practicable, to the subject matter of this Act
22to the same extent as if such provisions were included herein.
23References in those incorporated Sections to taxpayers and to

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1persons engaged in the business of selling tangible personal
2property at retail mean providers of direct-to-home satellite
3service, direct broadcast satellite service, or digital
4audio-visual works when used in this Act.
5
ARTICLE 15. ENTERTAINMENT TAX FAIRNESS ACT
6 Section 15-1. Short title. This Act may be cited as the
7Entertainment Tax Fairness Act.
8 Section 15-5. Application. This Act applies to all
9subscribers of entertainment in this State for the privilege to
10witness, view, or otherwise enjoy the entertainment.
11 This Act does not apply to: (1) satellite radio service or
12subscription radio service whereby a digital radio signal is
13broadcast without any corresponding or related video
14programming or services; or (2) a satellite television
15transmission of simulcast horse races broadcast from or
16received at locations operated by an organization licensee, an
17inter-track wagering licensee, or an inter-track wagering
18location licensee licensed under the Illinois Horse Racing Act
19of 1975.
20 Section 15-10. Definitions. As used in this Act:
21 "Cable service" has the meaning given to that term in item
22(6) of 47 U.S.C. 522.

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1 "Department" means the Department of Revenue.
2 "Digital audio-visual works service" means the
3transmission of a series of related images that, when shown in
4succession, impart an impression of motion, together with
5accompanying sounds, if any, sold to an end user with rights of
6less than permanent use. "Digital audio-visual works service"
7does not include cable service or video service.
8 "Direct broadcast satellite service" means video services
9transmitted or broadcast by satellite directly to the
10subscriber's premises with the use of or accompanied by ground
11receiving or distribution equipment, including, but not
12limited to, infrastructure to provide Internet access used in
13the transmission or broadcast of such video services, at the
14subscriber's premises, but not in the uplink process to the
15satellite, and includes, but is not limited to, the
16retransmission of local broadcast television, the provision of
17premium channels, other recurring monthly services, service
18and pay-per-view, video-on-demand, and other event-based
19services.
20 "Direct-to-home satellite service" has the meaning given
21to that term in Public Law No. 104-104, Title VI, Section
22602(a), February 8, 1996, 110 Stat. 144 (reprinted at 47 U.S.C.
23152).
24 "End user" means any person other than a person who
25receives by contract a product transferred electronically for
26further commercial broadcast, rebroadcast, transmission,

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1retransmission, licensing, relicensing, distribution,
2redistribution, or exhibition of the product, in whole or in
3part, to another person or persons.
4 "Entertainment" means any paid video programming whether
5transmitted by cable service, direct-to-home satellite
6service, direct broadcast satellite service, digital
7audio-visual works service, or video service to a subscriber in
8this State.
9 "Permanent" means perpetual or for an indefinite or
10unspecified length of time.
11 "Provider" means a person who transmits, broadcasts,
12sells, or distributes cable service, direct-to-home satellite
13service, direct broadcast satellite service, digital
14audio-visual works service, or video service to subscribers in
15the State.
16 "Subscriber" means a member of the general public who
17receives cable service, direct-to-home satellite service,
18direct broadcast satellite service, or digital audio-visual
19works service, or video service from a provider and does not
20further distribute the service in the ordinary course of
21business.
22 "Video service" has the meaning given to that term in the
23Cable and Video Competition Law of 2007 of the Public Utilities
24Act.
25 Section 15-15. Imposition of tax.

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1 (a) A tax is imposed upon the subscribers of entertainment
2in this State at the rate of 1% of the charges paid for the
3privilege to witness, view, or otherwise enjoy the
4entertainment.
5 (b) For purposes of the tax imposed by subsection (a), a
6subscriber is in this State if the subscriber's street address
7is representative of where the subscriber's use or access of
8the entertainment primarily occurs, which must be the street
9address of the subscriber based on such other information kept
10by the provider in the regular course of its business.
11 (c) The provider of the entertainment shall collect and
12secure from each subscriber the tax imposed by this Act and
13remit the tax to the Department as set forth in Section 15-20
14of this Act.
15 Section 15-20. Remittances.
16 (a) On or before the twentieth day of each calendar month,
17every provider shall file a return with the Department, in a
18form prescribed by the Department, stating:
19 (1) the name of the provider;
20 (2) the address of the provider's principal place of
21 business;
22 (3) the total amount of tax revenues collected by the
23 provider under this Act during the preceding calendar
24 month, quarter, or year, as the case may be, during that
25 preceding calendar month, quarter, or year and upon the

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1 basis of which the tax is imposed;
2 (4) the amount of tax due;
3 (5) the signature of the provider; and
4 (6) such other reasonable information as the
5 Department may require.
6 (b) If a provider fails to sign a return within 30 days
7after the proper notice and demand for signature by the
8Department is received by the provider, then the return shall
9be considered valid and any amount shown to be due on the
10return shall be deemed assessed.
11 (c) If the provider is otherwise required to file a monthly
12return, and if the amount collected by the provider under this
13Act does not exceed $200, the Department may authorize the
14provider's returns to be filed on a quarter annual basis, with
15the return for January, February, and March of a given year
16being due by April 20 of that year; with the return for April,
17May, and June of a given year being due by July 20 of that year;
18with the return for July, August, and September of a given year
19being due by October 20 of that year, and with the return for
20October, November, and December of a given year being due by
21January 20 of the following year.
22 (d) If the provider is otherwise required to file a monthly
23or quarterly return, and if the amount collected by the
24provider under this Act does not exceed $50, the Department may
25authorize the provider's returns to be filed on an annual
26basis, with the return for a given year being due by January 20

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1of the following year.
2 (e) Those quarterly and annual returns shall be subject to
3the same requirements as to form and substance as monthly
4returns.
5 (f) A provider responsible for collecting and remitting the
6amount set forth in subsection (b) of Section 2505-210 of the
7Department of Revenue Law shall make all payments required by
8rules of the Department by electronic funds transfer.
9 Any provider not required to make payments by electronic
10funds transfer may make payments by electronic funds transfer
11with the permission of the Department.
12 All providers required to make payment by electronic funds
13transfer and any taxpayers authorized to voluntarily make
14payments by electronic funds transfer shall make those payments
15in the manner authorized by the Department.
16 Section 15-25. Records.
17 (a) A provider subject to this Act shall maintain the
18necessary records, and any other information required by the
19Department, to determine the amount of the tax that the
20provider is required to collect and remit and any credit that
21the provider is entitled to claim under this Act.
22 (b) The records shall be open at all times to inspection by
23the Department.
24 Section 15-30. Rules. The Department is authorized to adopt

SB0009 Engrossed- 23 -LRB100 06347 HLH 16385 b
1and enforce any reasonable rules and to prescribe such forms
2relating to the administration and enforcement of this Act as
3it may deem appropriate.
4 Section 15-35. Incorporation of Retailers' Occupation Tax
5Act and Uniform Penalty and Interest Act. All of the provisions
6of Sections 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i, and 5j of the
7Retailers' Occupation Tax Act, which are not inconsistent with
8this Act, and the Uniform Penalty and Interest Act, shall
9apply, as far as practicable, to the subject matter of this Act
10to the same extent as if such provisions were included herein.
11References in those incorporated Sections to taxpayers and to
12persons engaged in the business of selling tangible personal
13property at retail mean providers of direct-to-home satellite
14service, direct broadcast satellite service, or digital
15audio-visual works service when used in this Act.
16
ARTICLE 30. AMENDATORY PROVISIONS
17 Section 30-5. The State Finance Act is amended by changing
18Section 6z-51 and by adding Sections 5.878 and 5.879 as
19follows:
20 (30 ILCS 105/5.878 new)
21 Sec. 5.878. The Budget Economic Stabilization Fund.

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1 (30 ILCS 105/5.879 new)
2 Sec. 5.879. The Bill Backlog Payment Fund.
3 (30 ILCS 105/6z-51)
4 Sec. 6z-51. Budget Stabilization Fund.
5 (a) The Budget Stabilization Fund, a special fund in the
6State Treasury, shall consist of moneys appropriated or
7transferred to that Fund, as provided in Section 6z-43 and as
8otherwise provided by law. All earnings on Budget Stabilization
9Fund investments shall be deposited into that Fund.
10 (b) Until an initial transfer has been made to the Budget
11Economic Stabilization Fund under Section 5-30 of the Budget
12Economic Stabilization Fund Act, the The State Comptroller may
13direct the State Treasurer to transfer moneys from the Budget
14Stabilization Fund to the General Revenue Fund in order to meet
15cash flow deficits resulting from timing variations between
16disbursements and the receipt of funds within a fiscal year.
17Any moneys so borrowed in any fiscal year other than Fiscal
18Year 2011 shall be repaid by June 30 of the fiscal year in
19which they were borrowed. Any moneys so borrowed in Fiscal Year
202011 shall be repaid no later than July 15, 2011.
21 (c) During Fiscal Year 2017 only, amounts may be expended
22from the Budget Stabilization Fund only pursuant to specific
23authorization by appropriation. Any moneys expended pursuant
24to appropriation shall not be subject to repayment.
25(Source: P.A. 99-523, eff. 6-30-16.)

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1 Section 30-10. The Illinois Income Tax Act is amended by
2changing Sections 201, 203, 204, 208, 212, 222, 804, 901, and
31501 and by adding Section 225 as follows:
4 (35 ILCS 5/201) (from Ch. 120, par. 2-201)
5 Sec. 201. Tax Imposed.
6 (a) In general. A tax measured by net income is hereby
7imposed on every individual, corporation, trust and estate for
8each taxable year ending after July 31, 1969 on the privilege
9of earning or receiving income in or as a resident of this
10State. Such tax shall be in addition to all other occupation or
11privilege taxes imposed by this State or by any municipal
12corporation or political subdivision thereof.
13 (b) Rates. The tax imposed by subsection (a) of this
14Section shall be determined as follows, except as adjusted by
15subsection (d-1):
16 (1) In the case of an individual, trust or estate, for
17 taxable years ending prior to July 1, 1989, an amount equal
18 to 2 1/2% of the taxpayer's net income for the taxable
19 year.
20 (2) In the case of an individual, trust or estate, for
21 taxable years beginning prior to July 1, 1989 and ending
22 after June 30, 1989, an amount equal to the sum of (i) 2
23 1/2% of the taxpayer's net income for the period prior to
24 July 1, 1989, as calculated under Section 202.3, and (ii)

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1 3% of the taxpayer's net income for the period after June
2 30, 1989, as calculated under Section 202.3.
3 (3) In the case of an individual, trust or estate, for
4 taxable years beginning after June 30, 1989, and ending
5 prior to January 1, 2011, an amount equal to 3% of the
6 taxpayer's net income for the taxable year.
7 (4) In the case of an individual, trust, or estate, for
8 taxable years beginning prior to January 1, 2011, and
9 ending after December 31, 2010, an amount equal to the sum
10 of (i) 3% of the taxpayer's net income for the period prior
11 to January 1, 2011, as calculated under Section 202.5, and
12 (ii) 5% of the taxpayer's net income for the period after
13 December 31, 2010, as calculated under Section 202.5.
14 (5) In the case of an individual, trust, or estate, for
15 taxable years beginning on or after January 1, 2011, and
16 ending prior to January 1, 2015, an amount equal to 5% of
17 the taxpayer's net income for the taxable year.
18 (5.1) In the case of an individual, trust, or estate,
19 for taxable years beginning prior to January 1, 2015, and
20 ending after December 31, 2014, an amount equal to the sum
21 of (i) 5% of the taxpayer's net income for the period prior
22 to January 1, 2015, as calculated under Section 202.5, and
23 (ii) 3.75% of the taxpayer's net income for the period
24 after December 31, 2014, as calculated under Section 202.5.
25 (5.2) In the case of an individual, trust, or estate,
26 for taxable years beginning on or after January 1, 2015,

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1 and ending prior to January 1, 2017 January 1, 2025, an
2 amount equal to 3.75% of the taxpayer's net income for the
3 taxable year.
4 (5.3) In the case of an individual, trust, or estate,
5 for taxable years beginning prior to January 1, 2017
6 January 1, 2025, and ending after December 31, 2016
7 December 31, 2024, an amount equal to the sum of (i) 3.75%
8 of the taxpayer's net income for the period prior to
9 January 1, 2017 January 1, 2025, as calculated under
10 Section 202.5, and (ii) 4.95% 3.25% of the taxpayer's net
11 income for the period after December 31, 2016 December 31,
12 2024, as calculated under Section 202.5.
13 (5.4) In the case of an individual, trust, or estate,
14 for taxable years beginning on or after January 1, 2017
15 January 1, 2025, an amount equal to 4.95% 3.25% of the
16 taxpayer's net income for the taxable year.
17 (6) In the case of a corporation, for taxable years
18 ending prior to July 1, 1989, an amount equal to 4% of the
19 taxpayer's net income for the taxable year.
20 (7) In the case of a corporation, for taxable years
21 beginning prior to July 1, 1989 and ending after June 30,
22 1989, an amount equal to the sum of (i) 4% of the
23 taxpayer's net income for the period prior to July 1, 1989,
24 as calculated under Section 202.3, and (ii) 4.8% of the
25 taxpayer's net income for the period after June 30, 1989,
26 as calculated under Section 202.3.

SB0009 Engrossed- 28 -LRB100 06347 HLH 16385 b
1 (8) In the case of a corporation, for taxable years
2 beginning after June 30, 1989, and ending prior to January
3 1, 2011, an amount equal to 4.8% of the taxpayer's net
4 income for the taxable year.
5 (9) In the case of a corporation, for taxable years
6 beginning prior to January 1, 2011, and ending after
7 December 31, 2010, an amount equal to the sum of (i) 4.8%
8 of the taxpayer's net income for the period prior to
9 January 1, 2011, as calculated under Section 202.5, and
10 (ii) 7% of the taxpayer's net income for the period after
11 December 31, 2010, as calculated under Section 202.5.
12 (10) In the case of a corporation, for taxable years
13 beginning on or after January 1, 2011, and ending prior to
14 January 1, 2015, an amount equal to 7% of the taxpayer's
15 net income for the taxable year.
16 (11) In the case of a corporation, for taxable years
17 beginning prior to January 1, 2015, and ending after
18 December 31, 2014, an amount equal to the sum of (i) 7% of
19 the taxpayer's net income for the period prior to January
20 1, 2015, as calculated under Section 202.5, and (ii) 5.25%
21 of the taxpayer's net income for the period after December
22 31, 2014, as calculated under Section 202.5.
23 (12) In the case of a corporation, for taxable years
24 beginning on or after January 1, 2015, and ending prior to
25 January 1, 2017 January 1, 2025, an amount equal to 5.25%
26 of the taxpayer's net income for the taxable year.

SB0009 Engrossed- 29 -LRB100 06347 HLH 16385 b
1 (13) In the case of a corporation, for taxable years
2 beginning prior to January 1, 2017 January 1, 2025, and
3 ending after December 31, 2016 December 31, 2024, an amount
4 equal to the sum of (i) 5.25% of the taxpayer's net income
5 for the period prior to January 1, 2017 January 1, 2025, as
6 calculated under Section 202.5, and (ii) 7% 4.8% of the
7 taxpayer's net income for the period after December 31,
8 2016 December 31, 2024, as calculated under Section 202.5.
9 (14) In the case of a corporation, for taxable years
10 beginning on or after January 1, 2017 January 1, 2025, an
11 amount equal to 7% 4.8% of the taxpayer's net income for
12 the taxable year.
13 The rates under this subsection (b) are subject to the
14provisions of Section 201.5.
15 (c) Personal Property Tax Replacement Income Tax.
16Beginning on July 1, 1979 and thereafter, in addition to such
17income tax, there is also hereby imposed the Personal Property
18Tax Replacement Income Tax measured by net income on every
19corporation (including Subchapter S corporations), partnership
20and trust, for each taxable year ending after June 30, 1979.
21Such taxes are imposed on the privilege of earning or receiving
22income in or as a resident of this State. The Personal Property
23Tax Replacement Income Tax shall be in addition to the income
24tax imposed by subsections (a) and (b) of this Section and in
25addition to all other occupation or privilege taxes imposed by
26this State or by any municipal corporation or political

SB0009 Engrossed- 30 -LRB100 06347 HLH 16385 b
1subdivision thereof.
2 (d) Additional Personal Property Tax Replacement Income
3Tax Rates. The personal property tax replacement income tax
4imposed by this subsection and subsection (c) of this Section
5in the case of a corporation, other than a Subchapter S
6corporation and except as adjusted by subsection (d-1), shall
7be an additional amount equal to 2.85% of such taxpayer's net
8income for the taxable year, except that beginning on January
91, 1981, and thereafter, the rate of 2.85% specified in this
10subsection shall be reduced to 2.5%, and in the case of a
11partnership, trust or a Subchapter S corporation shall be an
12additional amount equal to 1.5% of such taxpayer's net income
13for the taxable year.
14 (d-1) Rate reduction for certain foreign insurers. In the
15case of a foreign insurer, as defined by Section 35A-5 of the
16Illinois Insurance Code, whose state or country of domicile
17imposes on insurers domiciled in Illinois a retaliatory tax
18(excluding any insurer whose premiums from reinsurance assumed
19are 50% or more of its total insurance premiums as determined
20under paragraph (2) of subsection (b) of Section 304, except
21that for purposes of this determination premiums from
22reinsurance do not include premiums from inter-affiliate
23reinsurance arrangements), beginning with taxable years ending
24on or after December 31, 1999, the sum of the rates of tax
25imposed by subsections (b) and (d) shall be reduced (but not
26increased) to the rate at which the total amount of tax imposed

SB0009 Engrossed- 31 -LRB100 06347 HLH 16385 b
1under this Act, net of all credits allowed under this Act,
2shall equal (i) the total amount of tax that would be imposed
3on the foreign insurer's net income allocable to Illinois for
4the taxable year by such foreign insurer's state or country of
5domicile if that net income were subject to all income taxes
6and taxes measured by net income imposed by such foreign
7insurer's state or country of domicile, net of all credits
8allowed or (ii) a rate of zero if no such tax is imposed on such
9income by the foreign insurer's state of domicile. For the
10purposes of this subsection (d-1), an inter-affiliate includes
11a mutual insurer under common management.
12 (1) For the purposes of subsection (d-1), in no event
13 shall the sum of the rates of tax imposed by subsections
14 (b) and (d) be reduced below the rate at which the sum of:
15 (A) the total amount of tax imposed on such foreign
16 insurer under this Act for a taxable year, net of all
17 credits allowed under this Act, plus
18 (B) the privilege tax imposed by Section 409 of the
19 Illinois Insurance Code, the fire insurance company
20 tax imposed by Section 12 of the Fire Investigation
21 Act, and the fire department taxes imposed under
22 Section 11-10-1 of the Illinois Municipal Code,
23 equals 1.25% for taxable years ending prior to December 31,
24 2003, or 1.75% for taxable years ending on or after
25 December 31, 2003, of the net taxable premiums written for
26 the taxable year, as described by subsection (1) of Section

SB0009 Engrossed- 32 -LRB100 06347 HLH 16385 b
1 409 of the Illinois Insurance Code. This paragraph will in
2 no event increase the rates imposed under subsections (b)
3 and (d).
4 (2) Any reduction in the rates of tax imposed by this
5 subsection shall be applied first against the rates imposed
6 by subsection (b) and only after the tax imposed by
7 subsection (a) net of all credits allowed under this
8 Section other than the credit allowed under subsection (i)
9 has been reduced to zero, against the rates imposed by
10 subsection (d).
11 This subsection (d-1) is exempt from the provisions of
12Section 250.
13 (e) Investment credit. A taxpayer shall be allowed a credit
14against the Personal Property Tax Replacement Income Tax for
15investment in qualified property.
16 (1) A taxpayer shall be allowed a credit equal to .5%
17 of the basis of qualified property placed in service during
18 the taxable year, provided such property is placed in
19 service on or after July 1, 1984. There shall be allowed an
20 additional credit equal to .5% of the basis of qualified
21 property placed in service during the taxable year,
22 provided such property is placed in service on or after
23 July 1, 1986, and the taxpayer's base employment within
24 Illinois has increased by 1% or more over the preceding
25 year as determined by the taxpayer's employment records
26 filed with the Illinois Department of Employment Security.

SB0009 Engrossed- 33 -LRB100 06347 HLH 16385 b
1 Taxpayers who are new to Illinois shall be deemed to have
2 met the 1% growth in base employment for the first year in
3 which they file employment records with the Illinois
4 Department of Employment Security. The provisions added to
5 this Section by Public Act 85-1200 (and restored by Public
6 Act 87-895) shall be construed as declaratory of existing
7 law and not as a new enactment. If, in any year, the
8 increase in base employment within Illinois over the
9 preceding year is less than 1%, the additional credit shall
10 be limited to that percentage times a fraction, the
11 numerator of which is .5% and the denominator of which is
12 1%, but shall not exceed .5%. The investment credit shall
13 not be allowed to the extent that it would reduce a
14 taxpayer's liability in any tax year below zero, nor may
15 any credit for qualified property be allowed for any year
16 other than the year in which the property was placed in
17 service in Illinois. For tax years ending on or after
18 December 31, 1987, and on or before December 31, 1988, the
19 credit shall be allowed for the tax year in which the
20 property is placed in service, or, if the amount of the
21 credit exceeds the tax liability for that year, whether it
22 exceeds the original liability or the liability as later
23 amended, such excess may be carried forward and applied to
24 the tax liability of the 5 taxable years following the
25 excess credit years if the taxpayer (i) makes investments
26 which cause the creation of a minimum of 2,000 full-time

SB0009 Engrossed- 34 -LRB100 06347 HLH 16385 b
1 equivalent jobs in Illinois, (ii) is located in an
2 enterprise zone established pursuant to the Illinois
3 Enterprise Zone Act and (iii) is certified by the
4 Department of Commerce and Community Affairs (now
5 Department of Commerce and Economic Opportunity) as
6 complying with the requirements specified in clause (i) and
7 (ii) by July 1, 1986. The Department of Commerce and
8 Community Affairs (now Department of Commerce and Economic
9 Opportunity) shall notify the Department of Revenue of all
10 such certifications immediately. For tax years ending
11 after December 31, 1988, the credit shall be allowed for
12 the tax year in which the property is placed in service,
13 or, if the amount of the credit exceeds the tax liability
14 for that year, whether it exceeds the original liability or
15 the liability as later amended, such excess may be carried
16 forward and applied to the tax liability of the 5 taxable
17 years following the excess credit years. The credit shall
18 be applied to the earliest year for which there is a
19 liability. If there is credit from more than one tax year
20 that is available to offset a liability, earlier credit
21 shall be applied first.
22 (2) The term "qualified property" means property
23 which:
24 (A) is tangible, whether new or used, including
25 buildings and structural components of buildings and
26 signs that are real property, but not including land or

SB0009 Engrossed- 35 -LRB100 06347 HLH 16385 b
1 improvements to real property that are not a structural
2 component of a building such as landscaping, sewer
3 lines, local access roads, fencing, parking lots, and
4 other appurtenances;
5 (B) is depreciable pursuant to Section 167 of the
6 Internal Revenue Code, except that "3-year property"
7 as defined in Section 168(c)(2)(A) of that Code is not
8 eligible for the credit provided by this subsection
9 (e);
10 (C) is acquired by purchase as defined in Section
11 179(d) of the Internal Revenue Code;
12 (D) is used in Illinois by a taxpayer who is
13 primarily engaged in manufacturing, or in mining coal
14 or fluorite, or in retailing, or was placed in service
15 on or after July 1, 2006 in a River Edge Redevelopment
16 Zone established pursuant to the River Edge
17 Redevelopment Zone Act; and
18 (E) has not previously been used in Illinois in
19 such a manner and by such a person as would qualify for
20 the credit provided by this subsection (e) or
21 subsection (f).
22 (3) For purposes of this subsection (e),
23 "manufacturing" means the material staging and production
24 of tangible personal property by procedures commonly
25 regarded as manufacturing, processing, fabrication, or
26 assembling which changes some existing material into new

SB0009 Engrossed- 36 -LRB100 06347 HLH 16385 b
1 shapes, new qualities, or new combinations. For purposes of
2 this subsection (e) the term "mining" shall have the same
3 meaning as the term "mining" in Section 613(c) of the
4 Internal Revenue Code. For purposes of this subsection (e),
5 the term "retailing" means the sale of tangible personal
6 property for use or consumption and not for resale, or
7 services rendered in conjunction with the sale of tangible
8 personal property for use or consumption and not for
9 resale. For purposes of this subsection (e), "tangible
10 personal property" has the same meaning as when that term
11 is used in the Retailers' Occupation Tax Act, and, for
12 taxable years ending after December 31, 2008, does not
13 include the generation, transmission, or distribution of
14 electricity.
15 (4) The basis of qualified property shall be the basis
16 used to compute the depreciation deduction for federal
17 income tax purposes.
18 (5) If the basis of the property for federal income tax
19 depreciation purposes is increased after it has been placed
20 in service in Illinois by the taxpayer, the amount of such
21 increase shall be deemed property placed in service on the
22 date of such increase in basis.
23 (6) The term "placed in service" shall have the same
24 meaning as under Section 46 of the Internal Revenue Code.
25 (7) If during any taxable year, any property ceases to
26 be qualified property in the hands of the taxpayer within

SB0009 Engrossed- 37 -LRB100 06347 HLH 16385 b
1 48 months after being placed in service, or the situs of
2 any qualified property is moved outside Illinois within 48
3 months after being placed in service, the Personal Property
4 Tax Replacement Income Tax for such taxable year shall be
5 increased. Such increase shall be determined by (i)
6 recomputing the investment credit which would have been
7 allowed for the year in which credit for such property was
8 originally allowed by eliminating such property from such
9 computation and, (ii) subtracting such recomputed credit
10 from the amount of credit previously allowed. For the
11 purposes of this paragraph (7), a reduction of the basis of
12 qualified property resulting from a redetermination of the
13 purchase price shall be deemed a disposition of qualified
14 property to the extent of such reduction.
15 (8) Unless the investment credit is extended by law,
16 the basis of qualified property shall not include costs
17 incurred after December 31, 2018, except for costs incurred
18 pursuant to a binding contract entered into on or before
19 December 31, 2018.
20 (9) Each taxable year ending before December 31, 2000,
21 a partnership may elect to pass through to its partners the
22 credits to which the partnership is entitled under this
23 subsection (e) for the taxable year. A partner may use the
24 credit allocated to him or her under this paragraph only
25 against the tax imposed in subsections (c) and (d) of this
26 Section. If the partnership makes that election, those

SB0009 Engrossed- 38 -LRB100 06347 HLH 16385 b
1 credits shall be allocated among the partners in the
2 partnership in accordance with the rules set forth in
3 Section 704(b) of the Internal Revenue Code, and the rules
4 promulgated under that Section, and the allocated amount of
5 the credits shall be allowed to the partners for that
6 taxable year. The partnership shall make this election on
7 its Personal Property Tax Replacement Income Tax return for
8 that taxable year. The election to pass through the credits
9 shall be irrevocable.
10 For taxable years ending on or after December 31, 2000,
11 a partner that qualifies its partnership for a subtraction
12 under subparagraph (I) of paragraph (2) of subsection (d)
13 of Section 203 or a shareholder that qualifies a Subchapter
14 S corporation for a subtraction under subparagraph (S) of
15 paragraph (2) of subsection (b) of Section 203 shall be
16 allowed a credit under this subsection (e) equal to its
17 share of the credit earned under this subsection (e) during
18 the taxable year by the partnership or Subchapter S
19 corporation, determined in accordance with the
20 determination of income and distributive share of income
21 under Sections 702 and 704 and Subchapter S of the Internal
22 Revenue Code. This paragraph is exempt from the provisions
23 of Section 250.
24 (f) Investment credit; Enterprise Zone; River Edge
25Redevelopment Zone.
26 (1) A taxpayer shall be allowed a credit against the

SB0009 Engrossed- 39 -LRB100 06347 HLH 16385 b
1 tax imposed by subsections (a) and (b) of this Section for
2 investment in qualified property which is placed in service
3 in an Enterprise Zone created pursuant to the Illinois
4 Enterprise Zone Act or, for property placed in service on
5 or after July 1, 2006, a River Edge Redevelopment Zone
6 established pursuant to the River Edge Redevelopment Zone
7 Act. For partners, shareholders of Subchapter S
8 corporations, and owners of limited liability companies,
9 if the liability company is treated as a partnership for
10 purposes of federal and State income taxation, there shall
11 be allowed a credit under this subsection (f) to be
12 determined in accordance with the determination of income
13 and distributive share of income under Sections 702 and 704
14 and Subchapter S of the Internal Revenue Code. The credit
15 shall be .5% of the basis for such property. The credit
16 shall be available only in the taxable year in which the
17 property is placed in service in the Enterprise Zone or
18 River Edge Redevelopment Zone and shall not be allowed to
19 the extent that it would reduce a taxpayer's liability for
20 the tax imposed by subsections (a) and (b) of this Section
21 to below zero. For tax years ending on or after December
22 31, 1985, the credit shall be allowed for the tax year in
23 which the property is placed in service, or, if the amount
24 of the credit exceeds the tax liability for that year,
25 whether it exceeds the original liability or the liability
26 as later amended, such excess may be carried forward and

SB0009 Engrossed- 40 -LRB100 06347 HLH 16385 b
1 applied to the tax liability of the 5 taxable years
2 following the excess credit year. The credit shall be
3 applied to the earliest year for which there is a
4 liability. If there is credit from more than one tax year
5 that is available to offset a liability, the credit
6 accruing first in time shall be applied first.
7 (2) The term qualified property means property which:
8 (A) is tangible, whether new or used, including
9 buildings and structural components of buildings;
10 (B) is depreciable pursuant to Section 167 of the
11 Internal Revenue Code, except that "3-year property"
12 as defined in Section 168(c)(2)(A) of that Code is not
13 eligible for the credit provided by this subsection
14 (f);
15 (C) is acquired by purchase as defined in Section
16 179(d) of the Internal Revenue Code;
17 (D) is used in the Enterprise Zone or River Edge
18 Redevelopment Zone by the taxpayer; and
19 (E) has not been previously used in Illinois in
20 such a manner and by such a person as would qualify for
21 the credit provided by this subsection (f) or
22 subsection (e).
23 (3) The basis of qualified property shall be the basis
24 used to compute the depreciation deduction for federal
25 income tax purposes.
26 (4) If the basis of the property for federal income tax

SB0009 Engrossed- 41 -LRB100 06347 HLH 16385 b
1 depreciation purposes is increased after it has been placed
2 in service in the Enterprise Zone or River Edge
3 Redevelopment Zone by the taxpayer, the amount of such
4 increase shall be deemed property placed in service on the
5 date of such increase in basis.
6 (5) The term "placed in service" shall have the same
7 meaning as under Section 46 of the Internal Revenue Code.
8 (6) If during any taxable year, any property ceases to
9 be qualified property in the hands of the taxpayer within
10 48 months after being placed in service, or the situs of
11 any qualified property is moved outside the Enterprise Zone
12 or River Edge Redevelopment Zone within 48 months after
13 being placed in service, the tax imposed under subsections
14 (a) and (b) of this Section for such taxable year shall be
15 increased. Such increase shall be determined by (i)
16 recomputing the investment credit which would have been
17 allowed for the year in which credit for such property was
18 originally allowed by eliminating such property from such
19 computation, and (ii) subtracting such recomputed credit
20 from the amount of credit previously allowed. For the
21 purposes of this paragraph (6), a reduction of the basis of
22 qualified property resulting from a redetermination of the
23 purchase price shall be deemed a disposition of qualified
24 property to the extent of such reduction.
25 (7) There shall be allowed an additional credit equal
26 to 0.5% of the basis of qualified property placed in

SB0009 Engrossed- 42 -LRB100 06347 HLH 16385 b
1 service during the taxable year in a River Edge
2 Redevelopment Zone, provided such property is placed in
3 service on or after July 1, 2006, and the taxpayer's base
4 employment within Illinois has increased by 1% or more over
5 the preceding year as determined by the taxpayer's
6 employment records filed with the Illinois Department of
7 Employment Security. Taxpayers who are new to Illinois
8 shall be deemed to have met the 1% growth in base
9 employment for the first year in which they file employment
10 records with the Illinois Department of Employment
11 Security. If, in any year, the increase in base employment
12 within Illinois over the preceding year is less than 1%,
13 the additional credit shall be limited to that percentage
14 times a fraction, the numerator of which is 0.5% and the
15 denominator of which is 1%, but shall not exceed 0.5%.
16 (g) (Blank).
17 (h) Investment credit; High Impact Business.
18 (1) Subject to subsections (b) and (b-5) of Section 5.5
19 of the Illinois Enterprise Zone Act, a taxpayer shall be
20 allowed a credit against the tax imposed by subsections (a)
21 and (b) of this Section for investment in qualified
22 property which is placed in service by a Department of
23 Commerce and Economic Opportunity designated High Impact
24 Business. The credit shall be .5% of the basis for such
25 property. The credit shall not be available (i) until the
26 minimum investments in qualified property set forth in

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

SB0009 Engrossed- 44 -LRB100 06347 HLH 16385 b
1 credit shall be applied to the earliest year for which
2 there is a liability. If there is credit from more than one
3 tax year that is available to offset a liability, the
4 credit accruing first in time shall be applied first.
5 Changes made in this subdivision (h)(1) by Public Act
6 88-670 restore changes made by Public Act 85-1182 and
7 reflect existing law.
8 (2) The term qualified property means property which:
9 (A) is tangible, whether new or used, including
10 buildings and structural components of buildings;
11 (B) is depreciable pursuant to Section 167 of the
12 Internal Revenue Code, except that "3-year property"
13 as defined in Section 168(c)(2)(A) of that Code is not
14 eligible for the credit provided by this subsection
15 (h);
16 (C) is acquired by purchase as defined in Section
17 179(d) of the Internal Revenue Code; and
18 (D) is not eligible for the Enterprise Zone
19 Investment Credit provided by subsection (f) of this
20 Section.
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 tax
25 depreciation purposes is increased after it has been placed
26 in service in a federally designated Foreign Trade Zone or

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1 Sub-Zone located in Illinois by the taxpayer, the amount of
2 such increase shall be deemed property placed in service on
3 the 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 ending on or before
7 December 31, 1996, any property ceases to be qualified
8 property in the hands of the taxpayer within 48 months
9 after being placed in service, or the situs of any
10 qualified property is moved outside Illinois within 48
11 months 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 property
16 was originally allowed by eliminating such property from
17 such computation, and (ii) subtracting such recomputed
18 credit from the amount of credit previously allowed. For
19 the purposes of this paragraph (6), a reduction of the
20 basis of qualified property resulting from a
21 redetermination of the purchase price shall be deemed a
22 disposition of qualified property to the extent of such
23 reduction.
24 (7) Beginning with tax years ending after December 31,
25 1996, if a taxpayer qualifies for the credit under this
26 subsection (h) and thereby is granted a tax abatement and

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

SB0009 Engrossed- 47 -LRB100 06347 HLH 16385 b
1applied first to the earliest year for which there is a
2liability. If there is a credit under this subsection from more
3than one tax year that is available to offset a liability the
4earliest credit arising under this subsection shall be applied
5first.
6 If, during any taxable year ending on or after December 31,
71986, the tax imposed by subsections (c) and (d) of this
8Section for which a taxpayer has claimed a credit under this
9subsection (i) is reduced, the amount of credit for such tax
10shall also be reduced. Such reduction shall be determined by
11recomputing the credit to take into account the reduced tax
12imposed by subsections (c) and (d). If any portion of the
13reduced amount of credit has been carried to a different
14taxable year, an amended return shall be filed for such taxable
15year to reduce the amount of credit claimed.
16 (j) Training expense credit. Beginning with tax years
17ending on or after December 31, 1986 and prior to December 31,
182003, a taxpayer shall be allowed a credit against the tax
19imposed by subsections (a) and (b) under this Section for all
20amounts paid or accrued, on behalf of all persons employed by
21the taxpayer in Illinois or Illinois residents employed outside
22of Illinois by a taxpayer, for educational or vocational
23training in semi-technical or technical fields or semi-skilled
24or skilled fields, which were deducted from gross income in the
25computation of taxable income. The credit against the tax
26imposed by subsections (a) and (b) shall be 1.6% of such

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1training expenses. For partners, shareholders of subchapter S
2corporations, and owners of limited liability companies, if the
3liability company is treated as a partnership for purposes of
4federal and State income taxation, there shall be allowed a
5credit under this subsection (j) to be determined in accordance
6with the determination of income and distributive share of
7income under Sections 702 and 704 and subchapter S of the
8Internal Revenue Code.
9 Any credit allowed under this subsection which is unused in
10the year the credit is earned may be carried forward to each of
11the 5 taxable years following the year for which the credit is
12first computed until it is used. This credit shall be applied
13first to the earliest year for which there is a liability. If
14there is a credit under this subsection from more than one tax
15year that is available to offset a liability the earliest
16credit arising under this subsection shall be applied first. No
17carryforward credit may be claimed in any tax year ending on or
18after December 31, 2003.
19 (k) Research and development credit. For tax years ending
20after July 1, 1990 and prior to December 31, 2003, and
21beginning again for tax years ending on or after December 31,
222004, and ending prior to January 1, 2016, a taxpayer shall be
23allowed a credit against the tax imposed by subsections (a) and
24(b) of this Section for increasing research activities in this
25State. The credit allowed against the tax imposed by
26subsections (a) and (b) shall be equal to 6 1/2% of the

SB0009 Engrossed- 49 -LRB100 06347 HLH 16385 b
1qualifying expenditures for increasing research activities in
2this State. For partners, shareholders of subchapter S
3corporations, and owners of limited liability companies, if the
4liability company is treated as a partnership for purposes of
5federal and State income taxation, there shall be allowed a
6credit under this subsection to be determined in accordance
7with the determination of income and distributive share of
8income under Sections 702 and 704 and subchapter S of the
9Internal Revenue Code.
10 For purposes of this subsection, "qualifying expenditures"
11means the qualifying expenditures as defined for the federal
12credit for increasing research activities which would be
13allowable under Section 41 of the Internal Revenue Code and
14which are conducted in this State, "qualifying expenditures for
15increasing research activities in this State" means the excess
16of qualifying expenditures for the taxable year in which
17incurred over qualifying expenditures for the base period,
18"qualifying expenditures for the base period" means (i) for tax
19years ending prior to December 31, 2017, the average of the
20qualifying expenditures for each year in the base period; and
21(2) for tax years ending on or after December 31, 2017, 50% of
22the average of the qualifying expenditures for each year in the
23base period, and "base period" means the 3 taxable years
24immediately preceding the taxable year for which the
25determination is being made.
26 Any credit in excess of the tax liability for the taxable

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1year may be carried forward. A taxpayer may elect to have the
2unused credit shown on its final completed return carried over
3as a credit against the tax liability for the following 5
4taxable years or until it has been fully used, whichever occurs
5first; provided that no credit earned in a tax year ending
6prior to December 31, 2003 may be carried forward to any year
7ending on or after December 31, 2003.
8 If an unused credit is carried forward to a given year from
92 or more earlier years, that credit arising in the earliest
10year will be applied first against the tax liability for the
11given year. If a tax liability for the given year still
12remains, the credit from the next earliest year will then be
13applied, and so on, until all credits have been used or no tax
14liability for the given year remains. Any remaining unused
15credit or credits then will be carried forward to the next
16following year in which a tax liability is incurred, except
17that no credit can be carried forward to a year which is more
18than 5 years after the year in which the expense for which the
19credit is given was incurred.
20 No inference shall be drawn from this amendatory Act of the
2191st General Assembly in construing this Section for taxable
22years beginning before January 1, 1999.
23 This subsection (k) is exempt from the provisions of
24Section 250.
25 It is the intent of the General Assembly that the research
26and development credit under this subsection (k) shall apply

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1continuously for all tax years ending on or after December 31,
22004, including, but not limited to, the period beginning on
3January 1, 2016 and ending on the effective date of this
4amendatory Act of the 100th General Assembly. All actions taken
5in reliance on the continuation of the credit under this
6subsection (k) by any taxpayer are hereby validated.
7 (l) Environmental Remediation Tax Credit.
8 (i) For tax years ending after December 31, 1997 and on
9 or before December 31, 2001, a taxpayer shall be allowed a
10 credit against the tax imposed by subsections (a) and (b)
11 of this Section for certain amounts paid for unreimbursed
12 eligible remediation costs, as specified in this
13 subsection. For purposes of this Section, "unreimbursed
14 eligible remediation costs" means costs approved by the
15 Illinois Environmental Protection Agency ("Agency") under
16 Section 58.14 of the Environmental Protection Act that were
17 paid in performing environmental remediation at a site for
18 which a No Further Remediation Letter was issued by the
19 Agency and recorded under Section 58.10 of the
20 Environmental Protection Act. The credit must be claimed
21 for the taxable year in which Agency approval of the
22 eligible remediation costs is granted. The credit is not
23 available to any taxpayer if the taxpayer or any related
24 party caused or contributed to, in any material respect, a
25 release of regulated substances on, in, or under the site
26 that was identified and addressed by the remedial action

SB0009 Engrossed- 52 -LRB100 06347 HLH 16385 b
1 pursuant to the Site Remediation Program of the
2 Environmental Protection Act. After the Pollution Control
3 Board rules are adopted pursuant to the Illinois
4 Administrative Procedure Act for the administration and
5 enforcement of Section 58.9 of the Environmental
6 Protection Act, determinations as to credit availability
7 for purposes of this Section shall be made consistent with
8 those rules. For purposes of this Section, "taxpayer"
9 includes a person whose tax attributes the taxpayer has
10 succeeded to under Section 381 of the Internal Revenue Code
11 and "related party" includes the persons disallowed a
12 deduction for losses by paragraphs (b), (c), and (f)(1) of
13 Section 267 of the Internal Revenue Code by virtue of being
14 a related taxpayer, as well as any of its partners. The
15 credit allowed against the tax imposed by subsections (a)
16 and (b) shall be equal to 25% of the unreimbursed eligible
17 remediation costs in excess of $100,000 per site, except
18 that the $100,000 threshold shall not apply to any site
19 contained in an enterprise zone as determined by the
20 Department of Commerce and Community Affairs (now
21 Department of Commerce and Economic Opportunity). The
22 total credit allowed shall not exceed $40,000 per year with
23 a maximum total of $150,000 per site. For partners and
24 shareholders of subchapter S corporations, there shall be
25 allowed a credit under this subsection to be determined in
26 accordance with the determination of income and

SB0009 Engrossed- 53 -LRB100 06347 HLH 16385 b
1 distributive share of income under Sections 702 and 704 and
2 subchapter S of the Internal Revenue Code.
3 (ii) A credit allowed under this subsection that is
4 unused in the year the credit is earned may be carried
5 forward to each of the 5 taxable years following the year
6 for which the credit is first earned until it is used. The
7 term "unused credit" does not include any amounts of
8 unreimbursed eligible remediation costs in excess of the
9 maximum credit per site authorized under paragraph (i).
10 This credit shall be applied first to the earliest year for
11 which there is a liability. If there is a credit under this
12 subsection from more than one tax year that is available to
13 offset a liability, the earliest credit arising under this
14 subsection shall be applied first. A credit allowed under
15 this subsection may be sold to a buyer as part of a sale of
16 all or part of the remediation site for which the credit
17 was granted. The purchaser of a remediation site and the
18 tax credit shall succeed to the unused credit and remaining
19 carry-forward period of the seller. To perfect the
20 transfer, the assignor shall record the transfer in the
21 chain of title for the site and provide written notice to
22 the Director of the Illinois Department of Revenue of the
23 assignor's intent to sell the remediation site and the
24 amount of the tax credit to be transferred as a portion of
25 the sale. In no event may a credit be transferred to any
26 taxpayer if the taxpayer or a related party would not be

SB0009 Engrossed- 54 -LRB100 06347 HLH 16385 b
1 eligible under the provisions of subsection (i).
2 (iii) For purposes of this Section, the term "site"
3 shall have the same meaning as under Section 58.2 of the
4 Environmental Protection Act.
5 (m) Education expense credit. Beginning with tax years
6ending after December 31, 1999, a taxpayer who is the custodian
7of one or more qualifying pupils shall be allowed a credit
8against the tax imposed by subsections (a) and (b) of this
9Section for qualified education expenses incurred on behalf of
10the qualifying pupils. The credit shall be equal to 25% of
11qualified education expenses, but in no event may the total
12credit under this subsection claimed by a family that is the
13custodian of qualifying pupils exceed (i) $500 for tax years
14ending prior to December 31, 2017, and (ii) $750 for tax years
15ending on or after December 31, 2017. In no event shall a
16credit under this subsection reduce the taxpayer's liability
17under this Act to less than zero. Notwithstanding any other
18provision of law, for taxable years beginning on or after
19January 1, 2018, no taxpayer may claim a credit under this
20subsection (m) if the taxpayer's adjusted gross income for the
21taxable year exceeds (i) $500,000, in the case of spouses
22filing a joint federal tax return or (ii) $250,000, in the case
23of all other taxpayers. This subsection is exempt from the
24provisions of Section 250 of this Act.
25 For purposes of this subsection:
26 "Qualifying pupils" means individuals who (i) are

SB0009 Engrossed- 55 -LRB100 06347 HLH 16385 b
1residents of the State of Illinois, (ii) are under the age of
221 at the close of the school year for which a credit is
3sought, and (iii) during the school year for which a credit is
4sought were full-time pupils enrolled in a kindergarten through
5twelfth grade education program at any school, as defined in
6this subsection.
7 "Qualified education expense" means the amount incurred on
8behalf of a qualifying pupil in excess of $250 for tuition,
9book fees, and lab fees at the school in which the pupil is
10enrolled during the regular school year.
11 "School" means any public or nonpublic elementary or
12secondary school in Illinois that is in compliance with Title
13VI of the Civil Rights Act of 1964 and attendance at which
14satisfies the requirements of Section 26-1 of the School Code,
15except that nothing shall be construed to require a child to
16attend any particular public or nonpublic school to qualify for
17the credit under this Section.
18 "Custodian" means, with respect to qualifying pupils, an
19Illinois resident who is a parent, the parents, a legal
20guardian, or the legal guardians of the qualifying pupils.
21 (n) River Edge Redevelopment Zone site remediation tax
22credit.
23 (i) For tax years ending on or after December 31, 2006,
24 a taxpayer shall be allowed a credit against the tax
25 imposed by subsections (a) and (b) of this Section for
26 certain amounts paid for unreimbursed eligible remediation

SB0009 Engrossed- 56 -LRB100 06347 HLH 16385 b
1 costs, as specified in this subsection. For purposes of
2 this Section, "unreimbursed eligible remediation costs"
3 means costs approved by the Illinois Environmental
4 Protection Agency ("Agency") under Section 58.14a of the
5 Environmental Protection Act that were paid in performing
6 environmental remediation at a site within a River Edge
7 Redevelopment Zone for which a No Further Remediation
8 Letter was issued by the Agency and recorded under Section
9 58.10 of the Environmental Protection Act. The credit must
10 be claimed for the taxable year in which Agency approval of
11 the eligible remediation costs is granted. The credit is
12 not available to any taxpayer if the taxpayer or any
13 related party caused or contributed to, in any material
14 respect, a release of regulated substances on, in, or under
15 the site that was identified and addressed by the remedial
16 action pursuant to the Site Remediation Program of the
17 Environmental Protection Act. Determinations as to credit
18 availability for purposes of this Section shall be made
19 consistent with rules adopted by the Pollution Control
20 Board pursuant to the Illinois Administrative Procedure
21 Act for the administration and enforcement of Section 58.9
22 of the Environmental Protection Act. For purposes of this
23 Section, "taxpayer" includes a person whose tax attributes
24 the taxpayer has succeeded to under Section 381 of the
25 Internal Revenue Code and "related party" includes the
26 persons disallowed a deduction for losses by paragraphs

SB0009 Engrossed- 57 -LRB100 06347 HLH 16385 b
1 (b), (c), and (f)(1) of Section 267 of the Internal Revenue
2 Code by virtue of being a related taxpayer, as well as any
3 of its partners. The credit allowed against the tax imposed
4 by subsections (a) and (b) shall be equal to 25% of the
5 unreimbursed eligible remediation costs in excess of
6 $100,000 per site.
7 (ii) A credit allowed under this subsection that is
8 unused in the year the credit is earned may be carried
9 forward to each of the 5 taxable years following the year
10 for which the credit is first earned until it is used. This
11 credit shall be applied first to the earliest year for
12 which there is a liability. If there is a credit under this
13 subsection from more than one tax year that is available to
14 offset a liability, the earliest credit arising under this
15 subsection shall be applied first. A credit allowed under
16 this subsection may be sold to a buyer as part of a sale of
17 all or part of the remediation site for which the credit
18 was granted. The purchaser of a remediation site and the
19 tax credit shall succeed to the unused credit and remaining
20 carry-forward period of the seller. To perfect the
21 transfer, the assignor shall record the transfer in the
22 chain of title for the site and provide written notice to
23 the Director of the Illinois Department of Revenue of the
24 assignor's intent to sell the remediation site and the
25 amount of the tax credit to be transferred as a portion of
26 the sale. In no event may a credit be transferred to any

SB0009 Engrossed- 58 -LRB100 06347 HLH 16385 b
1 taxpayer if the taxpayer or a related party would not be
2 eligible under the provisions of subsection (i).
3 (iii) For purposes of this Section, the term "site"
4 shall have the same meaning as under Section 58.2 of the
5 Environmental Protection Act.
6 (o) For each of taxable years during the Compassionate Use
7of Medical Cannabis Pilot Program, a surcharge is imposed on
8all taxpayers on income arising from the sale or exchange of
9capital assets, depreciable business property, real property
10used in the trade or business, and Section 197 intangibles of
11an organization registrant under the Compassionate Use of
12Medical Cannabis Pilot Program Act. The amount of the surcharge
13is equal to the amount of federal income tax liability for the
14taxable year attributable to those sales and exchanges. The
15surcharge imposed does not apply if:
16 (1) the medical cannabis cultivation center
17 registration, medical cannabis dispensary registration, or
18 the property of a registration is transferred as a result
19 of any of the following:
20 (A) bankruptcy, a receivership, or a debt
21 adjustment initiated by or against the initial
22 registration or the substantial owners of the initial
23 registration;
24 (B) cancellation, revocation, or termination of
25 any registration by the Illinois Department of Public
26 Health;

SB0009 Engrossed- 59 -LRB100 06347 HLH 16385 b
1 (C) a determination by the Illinois Department of
2 Public Health that transfer of the registration is in
3 the best interests of Illinois qualifying patients as
4 defined by the Compassionate Use of Medical Cannabis
5 Pilot Program Act;
6 (D) the death of an owner of the equity interest in
7 a registrant;
8 (E) the acquisition of a controlling interest in
9 the stock or substantially all of the assets of a
10 publicly traded company;
11 (F) a transfer by a parent company to a wholly
12 owned subsidiary; or
13 (G) the transfer or sale to or by one person to
14 another person where both persons were initial owners
15 of the registration when the registration was issued;
16 or
17 (2) the cannabis cultivation center registration,
18 medical cannabis dispensary registration, or the
19 controlling interest in a registrant's property is
20 transferred in a transaction to lineal descendants in which
21 no gain or loss is recognized or as a result of a
22 transaction in accordance with Section 351 of the Internal
23 Revenue Code in which no gain or loss is recognized.
24(Source: P.A. 97-2, eff. 5-6-11; 97-636, eff. 6-1-12; 97-905,
25eff. 8-7-12; 98-109, eff. 7-25-13; 98-122, eff. 1-1-14; 98-756,
26eff. 7-16-14.)

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1 (35 ILCS 5/203) (from Ch. 120, par. 2-203)
2 Sec. 203. Base income defined.
3 (a) Individuals.
4 (1) In general. In the case of an individual, base
5 income means an amount equal to the taxpayer's adjusted
6 gross income for the taxable year as modified by paragraph
7 (2).
8 (2) Modifications. The adjusted gross income referred
9 to in paragraph (1) shall be modified by adding thereto the
10 sum of the following amounts:
11 (A) An amount equal to all amounts paid or accrued
12 to the taxpayer as interest or dividends during the
13 taxable year to the extent excluded from gross income
14 in the computation of adjusted gross income, except
15 stock dividends of qualified public utilities
16 described in Section 305(e) of the Internal Revenue
17 Code;
18 (B) An amount equal to the amount of tax imposed by
19 this Act to the extent deducted from gross income in
20 the computation of adjusted gross income for the
21 taxable year;
22 (C) An amount equal to the amount received during
23 the taxable year as a recovery or refund of real
24 property taxes paid with respect to the taxpayer's
25 principal residence under the Revenue Act of 1939 and

SB0009 Engrossed- 61 -LRB100 06347 HLH 16385 b
1 for which a deduction was previously taken under
2 subparagraph (L) of this paragraph (2) prior to July 1,
3 1991, the retrospective application date of Article 4
4 of Public Act 87-17. In the case of multi-unit or
5 multi-use structures and farm dwellings, the taxes on
6 the taxpayer's principal residence shall be that
7 portion of the total taxes for the entire property
8 which is attributable to such principal residence;
9 (D) An amount equal to the amount of the capital
10 gain deduction allowable under the Internal Revenue
11 Code, to the extent deducted from gross income in the
12 computation of adjusted gross income;
13 (D-5) An amount, to the extent not included in
14 adjusted gross income, equal to the amount of money
15 withdrawn by the taxpayer in the taxable year from a
16 medical care savings account and the interest earned on
17 the account in the taxable year of a withdrawal
18 pursuant to subsection (b) of Section 20 of the Medical
19 Care Savings Account Act or subsection (b) of Section
20 20 of the Medical Care Savings Account Act of 2000;
21 (D-10) For taxable years ending after December 31,
22 1997, an amount equal to any eligible remediation costs
23 that the individual deducted in computing adjusted
24 gross income and for which the individual claims a
25 credit under subsection (l) of Section 201;
26 (D-15) For taxable years 2001 and thereafter, an

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1 amount equal to the bonus depreciation deduction taken
2 on the taxpayer's federal income tax return for the
3 taxable year under subsection (k) of Section 168 of the
4 Internal Revenue Code;
5 (D-16) If the taxpayer sells, transfers, abandons,
6 or otherwise disposes of property for which the
7 taxpayer was required in any taxable year to make an
8 addition modification under subparagraph (D-15), then
9 an amount equal to the aggregate amount of the
10 deductions taken in all taxable years under
11 subparagraph (Z) with respect to that property.
12 If the taxpayer continues to own property through
13 the last day of the last tax year for which the
14 taxpayer may claim a depreciation deduction for
15 federal income tax purposes and for which the taxpayer
16 was allowed in any taxable year to make a subtraction
17 modification under subparagraph (Z), then an amount
18 equal to that subtraction modification.
19 The taxpayer is required to make the addition
20 modification under this subparagraph only once with
21 respect to any one piece of property;
22 (D-17) An amount equal to the amount otherwise
23 allowed as a deduction in computing base income for
24 interest paid, accrued, or incurred, directly or
25 indirectly, (i) for taxable years ending on or after
26 December 31, 2004, to a foreign person who would be a

SB0009 Engrossed- 63 -LRB100 06347 HLH 16385 b
1 member of the same unitary business group but for the
2 fact that foreign person's business activity outside
3 the United States is 80% or more of the foreign
4 person's total business activity and (ii) for taxable
5 years ending on or after December 31, 2008, to a person
6 who would be a member of the same unitary business
7 group but for the fact that the person is prohibited
8 under Section 1501(a)(27) from being included in the
9 unitary business group because he or she is ordinarily
10 required to apportion business income under different
11 subsections of Section 304. The addition modification
12 required by this subparagraph shall be reduced to the
13 extent that dividends were included in base income of
14 the unitary group for the same taxable year and
15 received by the taxpayer or by a member of the
16 taxpayer's unitary business group (including amounts
17 included in gross income under Sections 951 through 964
18 of the Internal Revenue Code and amounts included in
19 gross income under Section 78 of the Internal Revenue
20 Code) with respect to the stock of the same person to
21 whom the interest was paid, accrued, or incurred.
22 This paragraph shall not apply to the following:
23 (i) an item of interest paid, accrued, or
24 incurred, directly or indirectly, to a person who
25 is subject in a foreign country or state, other
26 than a state which requires mandatory unitary

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1 reporting, to a tax on or measured by net income
2 with respect to such interest; or
3 (ii) an item of interest paid, accrued, or
4 incurred, directly or indirectly, to a person if
5 the taxpayer can establish, based on a
6 preponderance of the evidence, both of the
7 following:
8 (a) the person, during the same taxable
9 year, paid, accrued, or incurred, the interest
10 to a person that is not a related member, and
11 (b) the transaction giving rise to the
12 interest expense between the taxpayer and the
13 person did not have as a principal purpose the
14 avoidance of Illinois income tax, and is paid
15 pursuant to a contract or agreement that
16 reflects an arm's-length interest rate and
17 terms; or
18 (iii) the taxpayer can establish, based on
19 clear and convincing evidence, that the interest
20 paid, accrued, or incurred relates to a contract or
21 agreement entered into at arm's-length rates and
22 terms and the principal purpose for the payment is
23 not federal or Illinois tax avoidance; or
24 (iv) an item of interest paid, accrued, or
25 incurred, directly or indirectly, to a person if
26 the taxpayer establishes by clear and convincing

SB0009 Engrossed- 65 -LRB100 06347 HLH 16385 b
1 evidence that the adjustments are unreasonable; or
2 if the taxpayer and the Director agree in writing
3 to the application or use of an alternative method
4 of apportionment under Section 304(f).
5 Nothing in this subsection shall preclude the
6 Director from making any other adjustment
7 otherwise allowed under Section 404 of this Act for
8 any tax year beginning after the effective date of
9 this amendment provided such adjustment is made
10 pursuant to regulation adopted by the Department
11 and such regulations provide methods and standards
12 by which the Department will utilize its authority
13 under Section 404 of this Act;
14 (D-18) An amount equal to the amount of intangible
15 expenses and costs otherwise allowed as a deduction in
16 computing base income, and that were paid, accrued, or
17 incurred, directly or indirectly, (i) for taxable
18 years ending on or after December 31, 2004, to a
19 foreign person who would be a member of the same
20 unitary business group but for the fact that the
21 foreign person's business activity outside the United
22 States is 80% or more of that person's total business
23 activity and (ii) for taxable years ending on or after
24 December 31, 2008, to a person who would be a member of
25 the same unitary business group but for the fact that
26 the person is prohibited under Section 1501(a)(27)

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1 from being included in the unitary business group
2 because he or she is ordinarily required to apportion
3 business income under different subsections of Section
4 304. The addition modification required by this
5 subparagraph shall be reduced to the extent that
6 dividends were included in base income of the unitary
7 group for the same taxable year and received by the
8 taxpayer or by a member of the taxpayer's unitary
9 business group (including amounts included in gross
10 income under Sections 951 through 964 of the Internal
11 Revenue Code and amounts included in gross income under
12 Section 78 of the Internal Revenue Code) with respect
13 to the stock of the same person to whom the intangible
14 expenses and costs were directly or indirectly paid,
15 incurred, or accrued. The preceding sentence does not
16 apply to the extent that the same dividends caused a
17 reduction to the addition modification required under
18 Section 203(a)(2)(D-17) of this Act. As used in this
19 subparagraph, the term "intangible expenses and costs"
20 includes (1) expenses, losses, and costs for, or
21 related to, the direct or indirect acquisition, use,
22 maintenance or management, ownership, sale, exchange,
23 or any other disposition of intangible property; (2)
24 losses incurred, directly or indirectly, from
25 factoring transactions or discounting transactions;
26 (3) royalty, patent, technical, and copyright fees;

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1 (4) licensing fees; and (5) other similar expenses and
2 costs. For purposes of this subparagraph, "intangible
3 property" includes patents, patent applications, trade
4 names, trademarks, service marks, copyrights, mask
5 works, trade secrets, and similar types of intangible
6 assets.
7 This paragraph shall not apply to the following:
8 (i) any item of intangible expenses or costs
9 paid, accrued, or incurred, directly or
10 indirectly, from a transaction with a person who is
11 subject in a foreign country or state, other than a
12 state which requires mandatory unitary reporting,
13 to a tax on or measured by net income with respect
14 to such item; or
15 (ii) any item of intangible expense or cost
16 paid, accrued, or incurred, directly or
17 indirectly, if the taxpayer can establish, based
18 on a preponderance of the evidence, both of the
19 following:
20 (a) the person during the same taxable
21 year paid, accrued, or incurred, the
22 intangible expense or cost to a person that is
23 not a related member, and
24 (b) the transaction giving rise to the
25 intangible expense or cost between the
26 taxpayer and the person did not have as a

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1 principal purpose the avoidance of Illinois
2 income tax, and is paid pursuant to a contract
3 or agreement that reflects arm's-length terms;
4 or
5 (iii) any item of intangible expense or cost
6 paid, accrued, or incurred, directly or
7 indirectly, from a transaction with a person if the
8 taxpayer establishes by clear and convincing
9 evidence, that the adjustments are unreasonable;
10 or if the taxpayer and the Director agree in
11 writing to the application or use of an alternative
12 method of apportionment under Section 304(f);
13 Nothing in this subsection shall preclude the
14 Director from making any other adjustment
15 otherwise allowed under Section 404 of this Act for
16 any tax year beginning after the effective date of
17 this amendment provided such adjustment is made
18 pursuant to regulation adopted by the Department
19 and such regulations provide methods and standards
20 by which the Department will utilize its authority
21 under Section 404 of this Act;
22 (D-19) For taxable years ending on or after
23 December 31, 2008, an amount equal to the amount of
24 insurance premium expenses and costs otherwise allowed
25 as a deduction in computing base income, and that were
26 paid, accrued, or incurred, directly or indirectly, to

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1 a person who would be a member of the same unitary
2 business group but for the fact that the person is
3 prohibited under Section 1501(a)(27) from being
4 included in the unitary business group because he or
5 she is ordinarily required to apportion business
6 income under different subsections of Section 304. The
7 addition modification required by this subparagraph
8 shall be reduced to the extent that dividends were
9 included in base income of the unitary group for the
10 same taxable year and received by the taxpayer or by a
11 member of the taxpayer's unitary business group
12 (including amounts included in gross income under
13 Sections 951 through 964 of the Internal Revenue Code
14 and amounts included in gross income under Section 78
15 of the Internal Revenue Code) with respect to the stock
16 of the same person to whom the premiums and costs were
17 directly or indirectly paid, incurred, or accrued. The
18 preceding sentence does not apply to the extent that
19 the same dividends caused a reduction to the addition
20 modification required under Section 203(a)(2)(D-17) or
21 Section 203(a)(2)(D-18) of this Act.
22 (D-20) For taxable years beginning on or after
23 January 1, 2002 and ending on or before December 31,
24 2006, in the case of a distribution from a qualified
25 tuition program under Section 529 of the Internal
26 Revenue Code, other than (i) a distribution from a

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1 College Savings Pool created under Section 16.5 of the
2 State Treasurer Act or (ii) a distribution from the
3 Illinois Prepaid Tuition Trust Fund, an amount equal to
4 the amount excluded from gross income under Section
5 529(c)(3)(B). For taxable years beginning on or after
6 January 1, 2007, in the case of a distribution from a
7 qualified tuition program under Section 529 of the
8 Internal Revenue Code, other than (i) a distribution
9 from a College Savings Pool created under Section 16.5
10 of the State Treasurer Act, (ii) a distribution from
11 the Illinois Prepaid Tuition Trust Fund, or (iii) a
12 distribution from a qualified tuition program under
13 Section 529 of the Internal Revenue Code that (I)
14 adopts and determines that its offering materials
15 comply with the College Savings Plans Network's
16 disclosure principles and (II) has made reasonable
17 efforts to inform in-state residents of the existence
18 of in-state qualified tuition programs by informing
19 Illinois residents directly and, where applicable, to
20 inform financial intermediaries distributing the
21 program to inform in-state residents of the existence
22 of in-state qualified tuition programs at least
23 annually, an amount equal to the amount excluded from
24 gross income under Section 529(c)(3)(B).
25 For the purposes of this subparagraph (D-20), a
26 qualified tuition program has made reasonable efforts

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1 if it makes disclosures (which may use the term
2 "in-state program" or "in-state plan" and need not
3 specifically refer to Illinois or its qualified
4 programs by name) (i) directly to prospective
5 participants in its offering materials or makes a
6 public disclosure, such as a website posting; and (ii)
7 where applicable, to intermediaries selling the
8 out-of-state program in the same manner that the
9 out-of-state program distributes its offering
10 materials;
11 (D-21) For taxable years beginning on or after
12 January 1, 2007, in the case of transfer of moneys from
13 a qualified tuition program under Section 529 of the
14 Internal Revenue Code that is administered by the State
15 to an out-of-state program, an amount equal to the
16 amount of moneys previously deducted from base income
17 under subsection (a)(2)(Y) of this Section;
18 (D-22) For taxable years beginning on or after
19 January 1, 2009, in the case of a nonqualified
20 withdrawal or refund of moneys from a qualified tuition
21 program under Section 529 of the Internal Revenue Code
22 administered by the State that is not used for
23 qualified expenses at an eligible education
24 institution, an amount equal to the contribution
25 component of the nonqualified withdrawal or refund
26 that was previously deducted from base income under

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1 subsection (a)(2)(y) of this Section, provided that
2 the withdrawal or refund did not result from the
3 beneficiary's death or disability;
4 (D-23) An amount equal to the credit allowable to
5 the taxpayer under Section 218(a) of this Act,
6 determined without regard to Section 218(c) of this
7 Act;
8 (D-24) For taxable years beginning on or after
9 January 1, 2017, an amount equal to the deduction
10 allowed under Section 199 of the Internal Revenue Code
11 for the taxable year;
12 and by deducting from the total so obtained the sum of the
13 following amounts:
14 (E) For taxable years ending before December 31,
15 2001, any amount included in such total in respect of
16 any compensation (including but not limited to any
17 compensation paid or accrued to a serviceman while a
18 prisoner of war or missing in action) paid to a
19 resident by reason of being on active duty in the Armed
20 Forces of the United States and in respect of any
21 compensation paid or accrued to a resident who as a
22 governmental employee was a prisoner of war or missing
23 in action, and in respect of any compensation paid to a
24 resident in 1971 or thereafter for annual training
25 performed pursuant to Sections 502 and 503, Title 32,
26 United States Code as a member of the Illinois National

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1 Guard or, beginning with taxable years ending on or
2 after December 31, 2007, the National Guard of any
3 other state. For taxable years ending on or after
4 December 31, 2001, any amount included in such total in
5 respect of any compensation (including but not limited
6 to any compensation paid or accrued to a serviceman
7 while a prisoner of war or missing in action) paid to a
8 resident by reason of being a member of any component
9 of the Armed Forces of the United States and in respect
10 of any compensation paid or accrued to a resident who
11 as a governmental employee was a prisoner of war or
12 missing in action, and in respect of any compensation
13 paid to a resident in 2001 or thereafter by reason of
14 being a member of the Illinois National Guard or,
15 beginning with taxable years ending on or after
16 December 31, 2007, the National Guard of any other
17 state. The provisions of this subparagraph (E) are
18 exempt from the provisions of Section 250;
19 (F) An amount equal to all amounts included in such
20 total pursuant to the provisions of Sections 402(a),
21 402(c), 403(a), 403(b), 406(a), 407(a), and 408 of the
22 Internal Revenue Code, or included in such total as
23 distributions under the provisions of any retirement
24 or disability plan for employees of any governmental
25 agency or unit, or retirement payments to retired
26 partners, which payments are excluded in computing net

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1 earnings from self employment by Section 1402 of the
2 Internal Revenue Code and regulations adopted pursuant
3 thereto;
4 (G) The valuation limitation amount;
5 (H) An amount equal to the amount of any tax
6 imposed by this Act which was refunded to the taxpayer
7 and included in such total for the taxable year;
8 (I) An amount equal to all amounts included in such
9 total pursuant to the provisions of Section 111 of the
10 Internal Revenue Code as a recovery of items previously
11 deducted from adjusted gross income in the computation
12 of taxable income;
13 (J) An amount equal to those dividends included in
14 such total which were paid by a corporation which
15 conducts business operations in a River Edge
16 Redevelopment Zone or zones created under the River
17 Edge Redevelopment Zone Act, and conducts
18 substantially all of its operations in a River Edge
19 Redevelopment Zone or zones. This subparagraph (J) is
20 exempt from the provisions of Section 250;
21 (K) An amount equal to those dividends included in
22 such total that were paid by a corporation that
23 conducts business operations in a federally designated
24 Foreign Trade Zone or Sub-Zone and that is designated a
25 High Impact Business located in Illinois; provided
26 that dividends eligible for the deduction provided in

SB0009 Engrossed- 75 -LRB100 06347 HLH 16385 b
1 subparagraph (J) of paragraph (2) of this subsection
2 shall not be eligible for the deduction provided under
3 this subparagraph (K);
4 (L) For taxable years ending after December 31,
5 1983, an amount equal to all social security benefits
6 and railroad retirement benefits included in such
7 total pursuant to Sections 72(r) and 86 of the Internal
8 Revenue Code;
9 (M) With the exception of any amounts subtracted
10 under subparagraph (N), an amount equal to the sum of
11 all amounts disallowed as deductions by (i) Sections
12 171(a) (2), and 265(2) of the Internal Revenue Code,
13 and all amounts of expenses allocable to interest and
14 disallowed as deductions by Section 265(1) of the
15 Internal Revenue Code; and (ii) for taxable years
16 ending on or after August 13, 1999, Sections 171(a)(2),
17 265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue
18 Code, plus, for taxable years ending on or after
19 December 31, 2011, Section 45G(e)(3) of the Internal
20 Revenue Code and, for taxable years ending on or after
21 December 31, 2008, any amount included in gross income
22 under Section 87 of the Internal Revenue Code; the
23 provisions of this subparagraph are exempt from the
24 provisions of Section 250;
25 (N) An amount equal to all amounts included in such
26 total which are exempt from taxation by this State

SB0009 Engrossed- 76 -LRB100 06347 HLH 16385 b
1 either by reason of its statutes or Constitution or by
2 reason of the Constitution, treaties or statutes of the
3 United States; provided that, in the case of any
4 statute of this State that exempts income derived from
5 bonds or other obligations from the tax imposed under
6 this Act, the amount exempted shall be the interest net
7 of bond premium amortization;
8 (O) An amount equal to any contribution made to a
9 job training project established pursuant to the Tax
10 Increment Allocation Redevelopment Act;
11 (P) An amount equal to the amount of the deduction
12 used to compute the federal income tax credit for
13 restoration of substantial amounts held under claim of
14 right for the taxable year pursuant to Section 1341 of
15 the Internal Revenue Code or of any itemized deduction
16 taken from adjusted gross income in the computation of
17 taxable income for restoration of substantial amounts
18 held under claim of right for the taxable year;
19 (Q) An amount equal to any amounts included in such
20 total, received by the taxpayer as an acceleration in
21 the payment of life, endowment or annuity benefits in
22 advance of the time they would otherwise be payable as
23 an indemnity for a terminal illness;
24 (R) An amount equal to the amount of any federal or
25 State bonus paid to veterans of the Persian Gulf War;
26 (S) An amount, to the extent included in adjusted

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1 gross income, equal to the amount of a contribution
2 made in the taxable year on behalf of the taxpayer to a
3 medical care savings account established under the
4 Medical Care Savings Account Act or the Medical Care
5 Savings Account Act of 2000 to the extent the
6 contribution is accepted by the account administrator
7 as provided in that Act;
8 (T) An amount, to the extent included in adjusted
9 gross income, equal to the amount of interest earned in
10 the taxable year on a medical care savings account
11 established under the Medical Care Savings Account Act
12 or the Medical Care Savings Account Act of 2000 on
13 behalf of the taxpayer, other than interest added
14 pursuant to item (D-5) of this paragraph (2);
15 (U) For one taxable year beginning on or after
16 January 1, 1994, an amount equal to the total amount of
17 tax imposed and paid under subsections (a) and (b) of
18 Section 201 of this Act on grant amounts received by
19 the taxpayer under the Nursing Home Grant Assistance
20 Act during the taxpayer's taxable years 1992 and 1993;
21 (V) Beginning with tax years ending on or after
22 December 31, 1995 and ending with tax years ending on
23 or before December 31, 2004, an amount equal to the
24 amount paid by a taxpayer who is a self-employed
25 taxpayer, a partner of a partnership, or a shareholder
26 in a Subchapter S corporation for health insurance or

SB0009 Engrossed- 78 -LRB100 06347 HLH 16385 b
1 long-term care insurance for that taxpayer or that
2 taxpayer's spouse or dependents, to the extent that the
3 amount paid for that health insurance or long-term care
4 insurance may be deducted under Section 213 of the
5 Internal Revenue Code, has not been deducted on the
6 federal income tax return of the taxpayer, and does not
7 exceed the taxable income attributable to that
8 taxpayer's income, self-employment income, or
9 Subchapter S corporation income; except that no
10 deduction shall be allowed under this item (V) if the
11 taxpayer is eligible to participate in any health
12 insurance or long-term care insurance plan of an
13 employer of the taxpayer or the taxpayer's spouse. The
14 amount of the health insurance and long-term care
15 insurance subtracted under this item (V) shall be
16 determined by multiplying total health insurance and
17 long-term care insurance premiums paid by the taxpayer
18 times a number that represents the fractional
19 percentage of eligible medical expenses under Section
20 213 of the Internal Revenue Code of 1986 not actually
21 deducted on the taxpayer's federal income tax return;
22 (W) For taxable years beginning on or after January
23 1, 1998, all amounts included in the taxpayer's federal
24 gross income in the taxable year from amounts converted
25 from a regular IRA to a Roth IRA. This paragraph is
26 exempt from the provisions of Section 250;

SB0009 Engrossed- 79 -LRB100 06347 HLH 16385 b
1 (X) For taxable year 1999 and thereafter, an amount
2 equal to the amount of any (i) distributions, to the
3 extent includible in gross income for federal income
4 tax purposes, made to the taxpayer because of his or
5 her status as a victim of persecution for racial or
6 religious reasons by Nazi Germany or any other Axis
7 regime or as an heir of the victim and (ii) items of
8 income, to the extent includible in gross income for
9 federal income tax purposes, attributable to, derived
10 from or in any way related to assets stolen from,
11 hidden from, or otherwise lost to a victim of
12 persecution for racial or religious reasons by Nazi
13 Germany or any other Axis regime immediately prior to,
14 during, and immediately after World War II, including,
15 but not limited to, interest on the proceeds receivable
16 as insurance under policies issued to a victim of
17 persecution for racial or religious reasons by Nazi
18 Germany or any other Axis regime by European insurance
19 companies immediately prior to and during World War II;
20 provided, however, this subtraction from federal
21 adjusted gross income does not apply to assets acquired
22 with such assets or with the proceeds from the sale of
23 such assets; provided, further, this paragraph shall
24 only apply to a taxpayer who was the first recipient of
25 such assets after their recovery and who is a victim of
26 persecution for racial or religious reasons by Nazi

SB0009 Engrossed- 80 -LRB100 06347 HLH 16385 b
1 Germany or any other Axis regime or as an heir of the
2 victim. The amount of and the eligibility for any
3 public assistance, benefit, or similar entitlement is
4 not affected by the inclusion of items (i) and (ii) of
5 this paragraph in gross income for federal income tax
6 purposes. This paragraph is exempt from the provisions
7 of Section 250;
8 (Y) For taxable years beginning on or after January
9 1, 2002 and ending on or before December 31, 2004,
10 moneys contributed in the taxable year to a College
11 Savings Pool account under Section 16.5 of the State
12 Treasurer Act, except that amounts excluded from gross
13 income under Section 529(c)(3)(C)(i) of the Internal
14 Revenue Code shall not be considered moneys
15 contributed under this subparagraph (Y). For taxable
16 years beginning on or after January 1, 2005, a maximum
17 of $10,000 contributed in the taxable year to (i) a
18 College Savings Pool account under Section 16.5 of the
19 State Treasurer Act or (ii) the Illinois Prepaid
20 Tuition Trust Fund, except that amounts excluded from
21 gross income under Section 529(c)(3)(C)(i) of the
22 Internal Revenue Code shall not be considered moneys
23 contributed under this subparagraph (Y). For purposes
24 of this subparagraph, contributions made by an
25 employer on behalf of an employee, or matching
26 contributions made by an employee, shall be treated as

SB0009 Engrossed- 81 -LRB100 06347 HLH 16385 b
1 made by the employee. This subparagraph (Y) is exempt
2 from the provisions of Section 250;
3 (Z) For taxable years 2001 and thereafter, for the
4 taxable year in which the bonus depreciation deduction
5 is taken on the taxpayer's federal income tax return
6 under subsection (k) of Section 168 of the Internal
7 Revenue Code and for each applicable taxable year
8 thereafter, an amount equal to "x", where:
9 (1) "y" equals the amount of the depreciation
10 deduction taken for the taxable year on the
11 taxpayer's federal income tax return on property
12 for which the bonus depreciation deduction was
13 taken in any year under subsection (k) of Section
14 168 of the Internal Revenue Code, but not including
15 the bonus depreciation deduction;
16 (2) for taxable years ending on or before
17 December 31, 2005, "x" equals "y" multiplied by 30
18 and then divided by 70 (or "y" multiplied by
19 0.429); and
20 (3) for taxable years ending after December
21 31, 2005:
22 (i) for property on which a bonus
23 depreciation deduction of 30% of the adjusted
24 basis was taken, "x" equals "y" multiplied by
25 30 and then divided by 70 (or "y" multiplied by
26 0.429); and

SB0009 Engrossed- 82 -LRB100 06347 HLH 16385 b
1 (ii) for property on which a bonus
2 depreciation deduction of 50% of the adjusted
3 basis was taken, "x" equals "y" multiplied by
4 1.0.
5 The aggregate amount deducted under this
6 subparagraph in all taxable years for any one piece of
7 property may not exceed the amount of the bonus
8 depreciation deduction taken on that property on the
9 taxpayer's federal income tax return under subsection
10 (k) of Section 168 of the Internal Revenue Code. This
11 subparagraph (Z) is exempt from the provisions of
12 Section 250;
13 (AA) If the taxpayer sells, transfers, abandons,
14 or otherwise disposes of property for which the
15 taxpayer was required in any taxable year to make an
16 addition modification under subparagraph (D-15), then
17 an amount equal to that addition modification.
18 If the taxpayer continues to own property through
19 the last day of the last tax year for which the
20 taxpayer may claim a depreciation deduction for
21 federal income tax purposes and for which the taxpayer
22 was required in any taxable year to make an addition
23 modification under subparagraph (D-15), then an amount
24 equal to that addition modification.
25 The taxpayer is allowed to take the deduction under
26 this subparagraph only once with respect to any one

SB0009 Engrossed- 83 -LRB100 06347 HLH 16385 b
1 piece of property.
2 This subparagraph (AA) is exempt from the
3 provisions of Section 250;
4 (BB) Any amount included in adjusted gross income,
5 other than salary, received by a driver in a
6 ridesharing arrangement using a motor vehicle;
7 (CC) The amount of (i) any interest income (net of
8 the deductions allocable thereto) taken into account
9 for the taxable year with respect to a transaction with
10 a taxpayer that is required to make an addition
11 modification with respect to such transaction under
12 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
13 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
14 the amount of that addition modification, and (ii) any
15 income from intangible property (net of the deductions
16 allocable thereto) taken into account for the taxable
17 year with respect to a transaction with a taxpayer that
18 is required to make an addition modification with
19 respect to such transaction under Section
20 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
21 203(d)(2)(D-8), but not to exceed the amount of that
22 addition modification. This subparagraph (CC) is
23 exempt from the provisions of Section 250;
24 (DD) An amount equal to the interest income taken
25 into account for the taxable year (net of the
26 deductions allocable thereto) with respect to

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1 transactions with (i) a foreign person who would be a
2 member of the taxpayer's unitary business group but for
3 the fact that the foreign person's business activity
4 outside the United States is 80% or more of that
5 person's total business activity and (ii) for taxable
6 years ending on or after December 31, 2008, to a person
7 who would be a member of the same unitary business
8 group but for the fact that the person is prohibited
9 under Section 1501(a)(27) from being included in the
10 unitary business group because he or she is ordinarily
11 required to apportion business income under different
12 subsections of Section 304, but not to exceed the
13 addition modification required to be made for the same
14 taxable year under Section 203(a)(2)(D-17) for
15 interest paid, accrued, or incurred, directly or
16 indirectly, to the same person. This subparagraph (DD)
17 is exempt from the provisions of Section 250;
18 (EE) An amount equal to the income from intangible
19 property taken into account for the taxable year (net
20 of the deductions allocable thereto) with respect to
21 transactions with (i) a foreign person who would be a
22 member of the taxpayer's unitary business group but for
23 the fact that the foreign person's business activity
24 outside the United States is 80% or more of that
25 person's total business activity and (ii) for taxable
26 years ending on or after December 31, 2008, to a person

SB0009 Engrossed- 85 -LRB100 06347 HLH 16385 b
1 who would be a member of the same unitary business
2 group but for the fact that the person is prohibited
3 under Section 1501(a)(27) from being included in the
4 unitary business group because he or she is ordinarily
5 required to apportion business income under different
6 subsections of Section 304, but not to exceed the
7 addition modification required to be made for the same
8 taxable year under Section 203(a)(2)(D-18) for
9 intangible expenses and costs paid, accrued, or
10 incurred, directly or indirectly, to the same foreign
11 person. This subparagraph (EE) is exempt from the
12 provisions of Section 250;
13 (FF) An amount equal to any amount awarded to the
14 taxpayer during the taxable year by the Court of Claims
15 under subsection (c) of Section 8 of the Court of
16 Claims Act for time unjustly served in a State prison.
17 This subparagraph (FF) is exempt from the provisions of
18 Section 250; and
19 (GG) For taxable years ending on or after December
20 31, 2011, in the case of a taxpayer who was required to
21 add back any insurance premiums under Section
22 203(a)(2)(D-19), such taxpayer may elect to subtract
23 that part of a reimbursement received from the
24 insurance company equal to the amount of the expense or
25 loss (including expenses incurred by the insurance
26 company) that would have been taken into account as a

SB0009 Engrossed- 86 -LRB100 06347 HLH 16385 b
1 deduction for federal income tax purposes if the
2 expense or loss had been uninsured. If a taxpayer makes
3 the election provided for by this subparagraph (GG),
4 the insurer to which the premiums were paid must add
5 back to income the amount subtracted by the taxpayer
6 pursuant to this subparagraph (GG). This subparagraph
7 (GG) is exempt from the provisions of Section 250.
8 (b) Corporations.
9 (1) In general. In the case of a corporation, base
10 income means an amount equal to the taxpayer's taxable
11 income for the taxable year as modified by paragraph (2).
12 (2) Modifications. The taxable income referred to in
13 paragraph (1) shall be modified by adding thereto the sum
14 of the following amounts:
15 (A) An amount equal to all amounts paid or accrued
16 to the taxpayer as interest and all distributions
17 received from regulated investment companies during
18 the taxable year to the extent excluded from gross
19 income in the computation of taxable income;
20 (B) An amount equal to the amount of tax imposed by
21 this Act to the extent deducted from gross income in
22 the computation of taxable income for the taxable year;
23 (C) In the case of a regulated investment company,
24 an amount equal to the excess of (i) the net long-term
25 capital gain for the taxable year, over (ii) the amount

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1 of the capital gain dividends designated as such in
2 accordance with Section 852(b)(3)(C) of the Internal
3 Revenue Code and any amount designated under Section
4 852(b)(3)(D) of the Internal Revenue Code,
5 attributable to the taxable year (this amendatory Act
6 of 1995 (Public Act 89-89) is declarative of existing
7 law and is not a new enactment);
8 (D) The amount of any net operating loss deduction
9 taken in arriving at taxable income, other than a net
10 operating loss carried forward from a taxable year
11 ending prior to December 31, 1986;
12 (E) For taxable years in which a net operating loss
13 carryback or carryforward from a taxable year ending
14 prior to December 31, 1986 is an element of taxable
15 income under paragraph (1) of subsection (e) or
16 subparagraph (E) of paragraph (2) of subsection (e),
17 the amount by which addition modifications other than
18 those provided by this subparagraph (E) exceeded
19 subtraction modifications in such earlier taxable
20 year, with the following limitations applied in the
21 order that they are listed:
22 (i) the addition modification relating to the
23 net operating loss carried back or forward to the
24 taxable year from any taxable year ending prior to
25 December 31, 1986 shall be reduced by the amount of
26 addition modification under this subparagraph (E)

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1 which related to that net operating loss and which
2 was taken into account in calculating the base
3 income of an earlier taxable year, and
4 (ii) the addition modification relating to the
5 net operating loss carried back or forward to the
6 taxable year from any taxable year ending prior to
7 December 31, 1986 shall not exceed the amount of
8 such carryback or carryforward;
9 For taxable years in which there is a net operating
10 loss carryback or carryforward from more than one other
11 taxable year ending prior to December 31, 1986, the
12 addition modification provided in this subparagraph
13 (E) shall be the sum of the amounts computed
14 independently under the preceding provisions of this
15 subparagraph (E) for each such taxable year;
16 (E-5) For taxable years ending after December 31,
17 1997, an amount equal to any eligible remediation costs
18 that the corporation deducted in computing adjusted
19 gross income and for which the corporation claims a
20 credit under subsection (l) of Section 201;
21 (E-10) For taxable years 2001 and thereafter, an
22 amount equal to the bonus depreciation deduction taken
23 on the taxpayer's federal income tax return for the
24 taxable year under subsection (k) of Section 168 of the
25 Internal Revenue Code;
26 (E-11) If the taxpayer sells, transfers, abandons,

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1 or otherwise disposes of property for which the
2 taxpayer was required in any taxable year to make an
3 addition modification under subparagraph (E-10), then
4 an amount equal to the aggregate amount of the
5 deductions taken in all taxable years under
6 subparagraph (T) with respect to that property.
7 If the taxpayer continues to own property through
8 the last day of the last tax year for which the
9 taxpayer may claim a depreciation deduction for
10 federal income tax purposes and for which the taxpayer
11 was allowed in any taxable year to make a subtraction
12 modification under subparagraph (T), then an amount
13 equal to that subtraction modification.
14 The taxpayer is required to make the addition
15 modification under this subparagraph only once with
16 respect to any one piece of property;
17 (E-12) An amount equal to the amount otherwise
18 allowed as a deduction in computing base income for
19 interest paid, accrued, or incurred, directly or
20 indirectly, (i) for taxable years ending on or after
21 December 31, 2004, to a foreign person who would be a
22 member of the same unitary business group but for the
23 fact the foreign person's business activity outside
24 the United States is 80% or more of the foreign
25 person's total business activity and (ii) for taxable
26 years ending on or after December 31, 2008, to a person

SB0009 Engrossed- 90 -LRB100 06347 HLH 16385 b
1 who would be a member of the same unitary business
2 group but for the fact that the person is prohibited
3 under Section 1501(a)(27) from being included in the
4 unitary business group because he or she is ordinarily
5 required to apportion business income under different
6 subsections of Section 304. The addition modification
7 required by this subparagraph shall be reduced to the
8 extent that dividends were included in base income of
9 the unitary group for the same taxable year and
10 received by the taxpayer or by a member of the
11 taxpayer's unitary business group (including amounts
12 included in gross income pursuant to Sections 951
13 through 964 of the Internal Revenue Code and amounts
14 included in gross income under Section 78 of the
15 Internal Revenue Code) with respect to the stock of the
16 same person to whom the interest was paid, accrued, or
17 incurred.
18 This paragraph shall not apply to the following:
19 (i) an item of interest paid, accrued, or
20 incurred, directly or indirectly, to a person who
21 is subject in a foreign country or state, other
22 than a state which requires mandatory unitary
23 reporting, to a tax on or measured by net income
24 with respect to such interest; or
25 (ii) an item of interest paid, accrued, or
26 incurred, directly or indirectly, to a person if

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1 the taxpayer can establish, based on a
2 preponderance of the evidence, both of the
3 following:
4 (a) the person, during the same taxable
5 year, paid, accrued, or incurred, the interest
6 to a person that is not a related member, and
7 (b) the transaction giving rise to the
8 interest expense between the taxpayer and the
9 person did not have as a principal purpose the
10 avoidance of Illinois income tax, and is paid
11 pursuant to a contract or agreement that
12 reflects an arm's-length interest rate and
13 terms; or
14 (iii) the taxpayer can establish, based on
15 clear and convincing evidence, that the interest
16 paid, accrued, or incurred relates to a contract or
17 agreement entered into at arm's-length rates and
18 terms and the principal purpose for the payment is
19 not federal or Illinois tax avoidance; or
20 (iv) an item of interest paid, accrued, or
21 incurred, directly or indirectly, to a person if
22 the taxpayer establishes by clear and convincing
23 evidence that the adjustments are unreasonable; or
24 if the taxpayer and the Director agree in writing
25 to the application or use of an alternative method
26 of apportionment under Section 304(f).

SB0009 Engrossed- 92 -LRB100 06347 HLH 16385 b
1 Nothing in this subsection shall preclude the
2 Director from making any other adjustment
3 otherwise allowed under Section 404 of this Act for
4 any tax year beginning after the effective date of
5 this amendment provided such adjustment is made
6 pursuant to regulation adopted by the Department
7 and such regulations provide methods and standards
8 by which the Department will utilize its authority
9 under Section 404 of this Act;
10 (E-13) An amount equal to the amount of intangible
11 expenses and costs otherwise allowed as a deduction in
12 computing base income, and that were paid, accrued, or
13 incurred, directly or indirectly, (i) for taxable
14 years ending on or after December 31, 2004, to a
15 foreign person who would be a member of the same
16 unitary business group but for the fact that the
17 foreign person's business activity outside the United
18 States is 80% or more of that person's total business
19 activity and (ii) for taxable years ending on or after
20 December 31, 2008, to a person who would be a member of
21 the same unitary business group but for the fact that
22 the person is prohibited under Section 1501(a)(27)
23 from being included in the unitary business group
24 because he or she is ordinarily required to apportion
25 business income under different subsections of Section
26 304. The addition modification required by this

SB0009 Engrossed- 93 -LRB100 06347 HLH 16385 b
1 subparagraph shall be reduced to the extent that
2 dividends were included in base income of the unitary
3 group for the same taxable year and received by the
4 taxpayer or by a member of the taxpayer's unitary
5 business group (including amounts included in gross
6 income pursuant to Sections 951 through 964 of the
7 Internal Revenue Code and amounts included in gross
8 income under Section 78 of the Internal Revenue Code)
9 with respect to the stock of the same person to whom
10 the intangible expenses and costs were directly or
11 indirectly paid, incurred, or accrued. The preceding
12 sentence shall not apply to the extent that the same
13 dividends caused a reduction to the addition
14 modification required under Section 203(b)(2)(E-12) of
15 this Act. As used in this subparagraph, the term
16 "intangible expenses and costs" includes (1) expenses,
17 losses, and costs for, or related to, the direct or
18 indirect acquisition, use, maintenance or management,
19 ownership, sale, exchange, or any other disposition of
20 intangible property; (2) losses incurred, directly or
21 indirectly, from factoring transactions or discounting
22 transactions; (3) royalty, patent, technical, and
23 copyright fees; (4) licensing fees; and (5) other
24 similar expenses and costs. For purposes of this
25 subparagraph, "intangible property" includes patents,
26 patent applications, trade names, trademarks, service

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1 marks, copyrights, mask works, trade secrets, and
2 similar types of intangible assets.
3 This paragraph shall not apply to the following:
4 (i) any item of intangible expenses or costs
5 paid, accrued, or incurred, directly or
6 indirectly, from a transaction with a person who is
7 subject in a foreign country or state, other than a
8 state which requires mandatory unitary reporting,
9 to a tax on or measured by net income with respect
10 to such item; or
11 (ii) any item of intangible expense or cost
12 paid, accrued, or incurred, directly or
13 indirectly, if the taxpayer can establish, based
14 on a preponderance of the evidence, both of the
15 following:
16 (a) the person during the same taxable
17 year paid, accrued, or incurred, the
18 intangible expense or cost to a person that is
19 not a related member, and
20 (b) the transaction giving rise to the
21 intangible expense or cost between the
22 taxpayer and the person did not have as a
23 principal purpose the avoidance of Illinois
24 income tax, and is paid pursuant to a contract
25 or agreement that reflects arm's-length terms;
26 or

SB0009 Engrossed- 95 -LRB100 06347 HLH 16385 b
1 (iii) any item of intangible expense or cost
2 paid, accrued, or incurred, directly or
3 indirectly, from a transaction with a person if the
4 taxpayer establishes by clear and convincing
5 evidence, that the adjustments are unreasonable;
6 or if the taxpayer and the Director agree in
7 writing to the application or use of an alternative
8 method of apportionment under Section 304(f);
9 Nothing in this subsection shall preclude the
10 Director from making any other adjustment
11 otherwise allowed under Section 404 of this Act for
12 any tax year beginning after the effective date of
13 this amendment provided such adjustment is made
14 pursuant to regulation adopted by the Department
15 and such regulations provide methods and standards
16 by which the Department will utilize its authority
17 under Section 404 of this Act;
18 (E-14) For taxable years ending on or after
19 December 31, 2008, an amount equal to the amount of
20 insurance premium expenses and costs otherwise allowed
21 as a deduction in computing base income, and that were
22 paid, accrued, or incurred, directly or indirectly, to
23 a person who would be a member of the same unitary
24 business group but for the fact that the person is
25 prohibited under Section 1501(a)(27) from being
26 included in the unitary business group because he or

SB0009 Engrossed- 96 -LRB100 06347 HLH 16385 b
1 she is ordinarily required to apportion business
2 income under different subsections of Section 304. The
3 addition modification required by this subparagraph
4 shall be reduced to the extent that dividends were
5 included in base income of the unitary group for the
6 same taxable year and received by the taxpayer or by a
7 member of the taxpayer's unitary business group
8 (including amounts included in gross income under
9 Sections 951 through 964 of the Internal Revenue Code
10 and amounts included in gross income under Section 78
11 of the Internal Revenue Code) with respect to the stock
12 of the same person to whom the premiums and costs were
13 directly or indirectly paid, incurred, or accrued. The
14 preceding sentence does not apply to the extent that
15 the same dividends caused a reduction to the addition
16 modification required under Section 203(b)(2)(E-12) or
17 Section 203(b)(2)(E-13) of this Act;
18 (E-15) For taxable years beginning after December
19 31, 2008, any deduction for dividends paid by a captive
20 real estate investment trust that is allowed to a real
21 estate investment trust under Section 857(b)(2)(B) of
22 the Internal Revenue Code for dividends paid;
23 (E-16) An amount equal to the credit allowable to
24 the taxpayer under Section 218(a) of this Act,
25 determined without regard to Section 218(c) of this
26 Act;

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1 (E-17) For taxable years beginning on or after
2 January 1, 2017, an amount equal to the deduction
3 allowed under Section 199 of the Internal Revenue Code
4 for the taxable year;
5 and by deducting from the total so obtained the sum of the
6 following amounts:
7 (F) An amount equal to the amount of any tax
8 imposed by this Act which was refunded to the taxpayer
9 and included in such total for the taxable year;
10 (G) An amount equal to any amount included in such
11 total under Section 78 of the Internal Revenue Code;
12 (H) In the case of a regulated investment company,
13 an amount equal to the amount of exempt interest
14 dividends as defined in subsection (b) (5) of Section
15 852 of the Internal Revenue Code, paid to shareholders
16 for the taxable year;
17 (I) With the exception of any amounts subtracted
18 under subparagraph (J), an amount equal to the sum of
19 all amounts disallowed as deductions by (i) Sections
20 171(a) (2), and 265(a)(2) and amounts disallowed as
21 interest expense by Section 291(a)(3) of the Internal
22 Revenue Code, and all amounts of expenses allocable to
23 interest and disallowed as deductions by Section
24 265(a)(1) of the Internal Revenue Code; and (ii) for
25 taxable years ending on or after August 13, 1999,
26 Sections 171(a)(2), 265, 280C, 291(a)(3), and

SB0009 Engrossed- 98 -LRB100 06347 HLH 16385 b
1 832(b)(5)(B)(i) of the Internal Revenue Code, plus,
2 for tax years ending on or after December 31, 2011,
3 amounts disallowed as deductions by Section 45G(e)(3)
4 of the Internal Revenue Code and, for taxable years
5 ending on or after December 31, 2008, any amount
6 included in gross income under Section 87 of the
7 Internal Revenue Code and the policyholders' share of
8 tax-exempt interest of a life insurance company under
9 Section 807(a)(2)(B) of the Internal Revenue Code (in
10 the case of a life insurance company with gross income
11 from a decrease in reserves for the tax year) or
12 Section 807(b)(1)(B) of the Internal Revenue Code (in
13 the case of a life insurance company allowed a
14 deduction for an increase in reserves for the tax
15 year); the provisions of this subparagraph are exempt
16 from the provisions of Section 250;
17 (J) An amount equal to all amounts included in such
18 total which are exempt from taxation by this State
19 either by reason of its statutes or Constitution or by
20 reason of the Constitution, treaties or statutes of the
21 United States; provided that, in the case of any
22 statute of this State that exempts income derived from
23 bonds or other obligations from the tax imposed under
24 this Act, the amount exempted shall be the interest net
25 of bond premium amortization;
26 (K) An amount equal to those dividends included in

SB0009 Engrossed- 99 -LRB100 06347 HLH 16385 b
1 such total which were paid by a corporation which
2 conducts business operations in a River Edge
3 Redevelopment Zone or zones created under the River
4 Edge Redevelopment Zone Act and conducts substantially
5 all of its operations in a River Edge Redevelopment
6 Zone or zones. This subparagraph (K) is exempt from the
7 provisions of Section 250;
8 (L) An amount equal to those dividends included in
9 such total that were paid by a corporation that
10 conducts business operations in a federally designated
11 Foreign Trade Zone or Sub-Zone and that is designated a
12 High Impact Business located in Illinois; provided
13 that dividends eligible for the deduction provided in
14 subparagraph (K) of paragraph 2 of this subsection
15 shall not be eligible for the deduction provided under
16 this subparagraph (L);
17 (M) For any taxpayer that is a financial
18 organization within the meaning of Section 304(c) of
19 this Act, an amount included in such total as interest
20 income from a loan or loans made by such taxpayer to a
21 borrower, to the extent that such a loan is secured by
22 property which is eligible for the River Edge
23 Redevelopment Zone Investment Credit. To determine the
24 portion of a loan or loans that is secured by property
25 eligible for a Section 201(f) investment credit to the
26 borrower, the entire principal amount of the loan or

SB0009 Engrossed- 100 -LRB100 06347 HLH 16385 b
1 loans between the taxpayer and the borrower should be
2 divided into the basis of the Section 201(f) investment
3 credit property which secures the loan or loans, using
4 for this purpose the original basis of such property on
5 the date that it was placed in service in the River
6 Edge Redevelopment Zone. The subtraction modification
7 available to taxpayer in any year under this subsection
8 shall be that portion of the total interest paid by the
9 borrower with respect to such loan attributable to the
10 eligible property as calculated under the previous
11 sentence. This subparagraph (M) is exempt from the
12 provisions of Section 250;
13 (M-1) For any taxpayer that is a financial
14 organization within the meaning of Section 304(c) of
15 this Act, an amount included in such total as interest
16 income from a loan or loans made by such taxpayer to a
17 borrower, to the extent that such a loan is secured by
18 property which is eligible for the High Impact Business
19 Investment Credit. To determine the portion of a loan
20 or loans that is secured by property eligible for a
21 Section 201(h) investment credit to the borrower, the
22 entire principal amount of the loan or loans between
23 the taxpayer and the borrower should be divided into
24 the basis of the Section 201(h) investment credit
25 property which secures the loan or loans, using for
26 this purpose the original basis of such property on the

SB0009 Engrossed- 101 -LRB100 06347 HLH 16385 b
1 date that it was placed in service in a federally
2 designated Foreign Trade Zone or Sub-Zone located in
3 Illinois. No taxpayer that is eligible for the
4 deduction provided in subparagraph (M) of paragraph
5 (2) of this subsection shall be eligible for the
6 deduction provided under this subparagraph (M-1). The
7 subtraction modification available to taxpayers in any
8 year under this subsection shall be that portion of the
9 total interest paid by the borrower with respect to
10 such loan attributable to the eligible property as
11 calculated under the previous sentence;
12 (N) Two times any contribution made during the
13 taxable year to a designated zone organization to the
14 extent that the contribution (i) qualifies as a
15 charitable contribution under subsection (c) of
16 Section 170 of the Internal Revenue Code and (ii) must,
17 by its terms, be used for a project approved by the
18 Department of Commerce and Economic Opportunity under
19 Section 11 of the Illinois Enterprise Zone Act or under
20 Section 10-10 of the River Edge Redevelopment Zone Act.
21 This subparagraph (N) is exempt from the provisions of
22 Section 250;
23 (O) An amount equal to: (i) 85% for taxable years
24 ending on or before December 31, 1992, or, a percentage
25 equal to the percentage allowable under Section
26 243(a)(1) of the Internal Revenue Code of 1986 for

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1 taxable years ending after December 31, 1992, of the
2 amount by which dividends included in taxable income
3 and received from a corporation that is not created or
4 organized under the laws of the United States or any
5 state or political subdivision thereof, including, for
6 taxable years ending on or after December 31, 1988,
7 dividends received or deemed received or paid or deemed
8 paid under Sections 951 through 965 of the Internal
9 Revenue Code, exceed the amount of the modification
10 provided under subparagraph (G) of paragraph (2) of
11 this subsection (b) which is related to such dividends,
12 and including, for taxable years ending on or after
13 December 31, 2008, dividends received from a captive
14 real estate investment trust; plus (ii) 100% of the
15 amount by which dividends, included in taxable income
16 and received, including, for taxable years ending on or
17 after December 31, 1988, dividends received or deemed
18 received or paid or deemed paid under Sections 951
19 through 964 of the Internal Revenue Code and including,
20 for taxable years ending on or after December 31, 2008,
21 dividends received from a captive real estate
22 investment trust, from any such corporation specified
23 in clause (i) that would but for the provisions of
24 Section 1504 (b) (3) of the Internal Revenue Code be
25 treated as a member of the affiliated group which
26 includes the dividend recipient, exceed the amount of

SB0009 Engrossed- 103 -LRB100 06347 HLH 16385 b
1 the modification provided under subparagraph (G) of
2 paragraph (2) of this subsection (b) which is related
3 to such dividends. This subparagraph (O) is exempt from
4 the provisions of Section 250 of this Act;
5 (P) An amount equal to any contribution made to a
6 job training project established pursuant to the Tax
7 Increment Allocation Redevelopment Act;
8 (Q) An amount equal to the amount of the deduction
9 used to compute the federal income tax credit for
10 restoration of substantial amounts held under claim of
11 right for the taxable year pursuant to Section 1341 of
12 the Internal Revenue Code;
13 (R) On and after July 20, 1999, in the case of an
14 attorney-in-fact with respect to whom an interinsurer
15 or a reciprocal insurer has made the election under
16 Section 835 of the Internal Revenue Code, 26 U.S.C.
17 835, an amount equal to the excess, if any, of the
18 amounts paid or incurred by that interinsurer or
19 reciprocal insurer in the taxable year to the
20 attorney-in-fact over the deduction allowed to that
21 interinsurer or reciprocal insurer with respect to the
22 attorney-in-fact under Section 835(b) of the Internal
23 Revenue Code for the taxable year; the provisions of
24 this subparagraph are exempt from the provisions of
25 Section 250;
26 (S) For taxable years ending on or after December

SB0009 Engrossed- 104 -LRB100 06347 HLH 16385 b
1 31, 1997, in the case of a Subchapter S corporation, an
2 amount equal to all amounts of income allocable to a
3 shareholder subject to the Personal Property Tax
4 Replacement Income Tax imposed by subsections (c) and
5 (d) of Section 201 of this Act, including amounts
6 allocable to organizations exempt from federal income
7 tax by reason of Section 501(a) of the Internal Revenue
8 Code. This subparagraph (S) is exempt from the
9 provisions of Section 250;
10 (T) For taxable years 2001 and thereafter, for the
11 taxable year in which the bonus depreciation deduction
12 is taken on the taxpayer's federal income tax return
13 under subsection (k) of Section 168 of the Internal
14 Revenue Code and for each applicable taxable year
15 thereafter, an amount equal to "x", where:
16 (1) "y" equals the amount of the depreciation
17 deduction taken for the taxable year on the
18 taxpayer's federal income tax return on property
19 for which the bonus depreciation deduction was
20 taken in any year under subsection (k) of Section
21 168 of the Internal Revenue Code, but not including
22 the bonus depreciation deduction;
23 (2) for taxable years ending on or before
24 December 31, 2005, "x" equals "y" multiplied by 30
25 and then divided by 70 (or "y" multiplied by
26 0.429); and

SB0009 Engrossed- 105 -LRB100 06347 HLH 16385 b
1 (3) for taxable years ending after December
2 31, 2005:
3 (i) for property on which a bonus
4 depreciation deduction of 30% of the adjusted
5 basis was taken, "x" equals "y" multiplied by
6 30 and then divided by 70 (or "y" multiplied by
7 0.429); and
8 (ii) for property on which a bonus
9 depreciation deduction of 50% of the adjusted
10 basis was taken, "x" equals "y" multiplied by
11 1.0.
12 The aggregate amount deducted under this
13 subparagraph in all taxable years for any one piece of
14 property may not exceed the amount of the bonus
15 depreciation deduction taken on that property on the
16 taxpayer's federal income tax return under subsection
17 (k) of Section 168 of the Internal Revenue Code. This
18 subparagraph (T) is exempt from the provisions of
19 Section 250;
20 (U) If the taxpayer sells, transfers, abandons, or
21 otherwise disposes of property for which the taxpayer
22 was required in any taxable year to make an addition
23 modification under subparagraph (E-10), then an amount
24 equal to that addition modification.
25 If the taxpayer continues to own property through
26 the last day of the last tax year for which the

SB0009 Engrossed- 106 -LRB100 06347 HLH 16385 b
1 taxpayer may claim a depreciation deduction for
2 federal income tax purposes and for which the taxpayer
3 was required in any taxable year to make an addition
4 modification under subparagraph (E-10), then an amount
5 equal to that addition modification.
6 The taxpayer is allowed to take the deduction under
7 this subparagraph only once with respect to any one
8 piece of property.
9 This subparagraph (U) is exempt from the
10 provisions of Section 250;
11 (V) The amount of: (i) any interest income (net of
12 the deductions allocable thereto) taken into account
13 for the taxable year with respect to a transaction with
14 a taxpayer that is required to make an addition
15 modification with respect to such transaction under
16 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
17 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
18 the amount of such addition modification, (ii) any
19 income from intangible property (net of the deductions
20 allocable thereto) taken into account for the taxable
21 year with respect to a transaction with a taxpayer that
22 is required to make an addition modification with
23 respect to such transaction under Section
24 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
25 203(d)(2)(D-8), but not to exceed the amount of such
26 addition modification, and (iii) any insurance premium

SB0009 Engrossed- 107 -LRB100 06347 HLH 16385 b
1 income (net of deductions allocable thereto) taken
2 into account for the taxable year with respect to a
3 transaction with a taxpayer that is required to make an
4 addition modification with respect to such transaction
5 under Section 203(a)(2)(D-19), Section
6 203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
7 203(d)(2)(D-9), but not to exceed the amount of that
8 addition modification. This subparagraph (V) is exempt
9 from the provisions of Section 250;
10 (W) An amount equal to the interest income taken
11 into account for the taxable year (net of the
12 deductions allocable thereto) with respect to
13 transactions with (i) a foreign person who would be a
14 member of the taxpayer's unitary business group but for
15 the fact that the foreign person's business activity
16 outside the United States is 80% or more of that
17 person's total business activity and (ii) for taxable
18 years ending on or after December 31, 2008, to a person
19 who would be a member of the same unitary business
20 group but for the fact that the person is prohibited
21 under Section 1501(a)(27) from being included in the
22 unitary business group because he or she is ordinarily
23 required to apportion business income under different
24 subsections of Section 304, but not to exceed the
25 addition modification required to be made for the same
26 taxable year under Section 203(b)(2)(E-12) for

SB0009 Engrossed- 108 -LRB100 06347 HLH 16385 b
1 interest paid, accrued, or incurred, directly or
2 indirectly, to the same person. This subparagraph (W)
3 is exempt from the provisions of Section 250;
4 (X) An amount equal to the income from intangible
5 property taken into account for the taxable year (net
6 of the deductions allocable thereto) with respect to
7 transactions with (i) a foreign person who would be a
8 member of the taxpayer's unitary business group but for
9 the fact that the foreign person's business activity
10 outside the United States is 80% or more of that
11 person's total business activity and (ii) for taxable
12 years ending on or after December 31, 2008, to a person
13 who would be a member of the same unitary business
14 group but for the fact that the person is prohibited
15 under Section 1501(a)(27) from being included in the
16 unitary business group because he or she is ordinarily
17 required to apportion business income under different
18 subsections of Section 304, but not to exceed the
19 addition modification required to be made for the same
20 taxable year under Section 203(b)(2)(E-13) for
21 intangible expenses and costs paid, accrued, or
22 incurred, directly or indirectly, to the same foreign
23 person. This subparagraph (X) is exempt from the
24 provisions of Section 250;
25 (Y) For taxable years ending on or after December
26 31, 2011, in the case of a taxpayer who was required to

SB0009 Engrossed- 109 -LRB100 06347 HLH 16385 b
1 add back any insurance premiums under Section
2 203(b)(2)(E-14), such taxpayer may elect to subtract
3 that part of a reimbursement received from the
4 insurance company equal to the amount of the expense or
5 loss (including expenses incurred by the insurance
6 company) that would have been taken into account as a
7 deduction for federal income tax purposes if the
8 expense or loss had been uninsured. If a taxpayer makes
9 the election provided for by this subparagraph (Y), the
10 insurer to which the premiums were paid must add back
11 to income the amount subtracted by the taxpayer
12 pursuant to this subparagraph (Y). This subparagraph
13 (Y) is exempt from the provisions of Section 250; and
14 (Z) The difference between the nondeductible
15 controlled foreign corporation dividends under Section
16 965(e)(3) of the Internal Revenue Code over the taxable
17 income of the taxpayer, computed without regard to
18 Section 965(e)(2)(A) of the Internal Revenue Code, and
19 without regard to any net operating loss deduction.
20 This subparagraph (Z) is exempt from the provisions of
21 Section 250.
22 (3) Special rule. For purposes of paragraph (2) (A),
23 "gross income" in the case of a life insurance company, for
24 tax years ending on and after December 31, 1994, and prior
25 to December 31, 2011, shall mean the gross investment
26 income for the taxable year and, for tax years ending on or

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1 after December 31, 2011, shall mean all amounts included in
2 life insurance gross income under Section 803(a)(3) of the
3 Internal Revenue Code.
4 (c) Trusts and estates.
5 (1) In general. In the case of a trust or estate, base
6 income means an amount equal to the taxpayer's taxable
7 income for the taxable year as modified by paragraph (2).
8 (2) Modifications. Subject to the provisions of
9 paragraph (3), the taxable income referred to in paragraph
10 (1) shall be modified by adding thereto the sum of the
11 following amounts:
12 (A) An amount equal to all amounts paid or accrued
13 to the taxpayer as interest or dividends during the
14 taxable year to the extent excluded from gross income
15 in the computation of taxable income;
16 (B) In the case of (i) an estate, $600; (ii) a
17 trust which, under its governing instrument, is
18 required to distribute all of its income currently,
19 $300; and (iii) any other trust, $100, but in each such
20 case, only to the extent such amount was deducted in
21 the computation of taxable income;
22 (C) An amount equal to the amount of tax imposed by
23 this Act to the extent deducted from gross income in
24 the computation of taxable income for the taxable year;
25 (D) The amount of any net operating loss deduction

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1 taken in arriving at taxable income, other than a net
2 operating loss carried forward from a taxable year
3 ending prior to December 31, 1986;
4 (E) For taxable years in which a net operating loss
5 carryback or carryforward from a taxable year ending
6 prior to December 31, 1986 is an element of taxable
7 income under paragraph (1) of subsection (e) or
8 subparagraph (E) of paragraph (2) of subsection (e),
9 the amount by which addition modifications other than
10 those provided by this subparagraph (E) exceeded
11 subtraction modifications in such taxable year, with
12 the following limitations applied in the order that
13 they are listed:
14 (i) the addition modification relating to the
15 net operating loss carried back or forward to the
16 taxable year from any taxable year ending prior to
17 December 31, 1986 shall be reduced by the amount of
18 addition modification under this subparagraph (E)
19 which related to that net operating loss and which
20 was taken into account in calculating the base
21 income of an earlier taxable year, and
22 (ii) the addition modification relating to the
23 net operating loss carried back or forward to the
24 taxable year from any taxable year ending prior to
25 December 31, 1986 shall not exceed the amount of
26 such carryback or carryforward;

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1 For taxable years in which there is a net operating
2 loss carryback or carryforward from more than one other
3 taxable year ending prior to December 31, 1986, the
4 addition modification provided in this subparagraph
5 (E) shall be the sum of the amounts computed
6 independently under the preceding provisions of this
7 subparagraph (E) for each such taxable year;
8 (F) For taxable years ending on or after January 1,
9 1989, an amount equal to the tax deducted pursuant to
10 Section 164 of the Internal Revenue Code if the trust
11 or estate is claiming the same tax for purposes of the
12 Illinois foreign tax credit under Section 601 of this
13 Act;
14 (G) An amount equal to the amount of the capital
15 gain deduction allowable under the Internal Revenue
16 Code, to the extent deducted from gross income in the
17 computation of taxable income;
18 (G-5) For taxable years ending after December 31,
19 1997, an amount equal to any eligible remediation costs
20 that the trust or estate deducted in computing adjusted
21 gross income and for which the trust or estate claims a
22 credit under subsection (l) of Section 201;
23 (G-10) For taxable years 2001 and thereafter, an
24 amount equal to the bonus depreciation deduction taken
25 on the taxpayer's federal income tax return for the
26 taxable year under subsection (k) of Section 168 of the

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1 Internal Revenue Code; and
2 (G-11) If the taxpayer sells, transfers, abandons,
3 or otherwise disposes of property for which the
4 taxpayer was required in any taxable year to make an
5 addition modification under subparagraph (G-10), then
6 an amount equal to the aggregate amount of the
7 deductions taken in all taxable years under
8 subparagraph (R) with respect to that property.
9 If the taxpayer continues to own property through
10 the last day of the last tax year for which the
11 taxpayer may claim a depreciation deduction for
12 federal income tax purposes and for which the taxpayer
13 was allowed in any taxable year to make a subtraction
14 modification under subparagraph (R), then an amount
15 equal to that subtraction modification.
16 The taxpayer is required to make the addition
17 modification under this subparagraph only once with
18 respect to any one piece of property;
19 (G-12) An amount equal to the amount otherwise
20 allowed as a deduction in computing base income for
21 interest paid, accrued, or incurred, directly or
22 indirectly, (i) for taxable years ending on or after
23 December 31, 2004, to a foreign person who would be a
24 member of the same unitary business group but for the
25 fact that the foreign person's business activity
26 outside the United States is 80% or more of the foreign

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1 person's total business activity and (ii) for taxable
2 years ending on or after December 31, 2008, to a person
3 who would be a member of the same unitary business
4 group but for the fact that the person is prohibited
5 under Section 1501(a)(27) from being included in the
6 unitary business group because he or she is ordinarily
7 required to apportion business income under different
8 subsections of Section 304. The addition modification
9 required by this subparagraph shall be reduced to the
10 extent that dividends were included in base income of
11 the unitary group for the same taxable year and
12 received by the taxpayer or by a member of the
13 taxpayer's unitary business group (including amounts
14 included in gross income pursuant to Sections 951
15 through 964 of the Internal Revenue Code and amounts
16 included in gross income under Section 78 of the
17 Internal Revenue Code) with respect to the stock of the
18 same person to whom the interest was paid, accrued, or
19 incurred.
20 This paragraph shall not apply to the following:
21 (i) an item of interest paid, accrued, or
22 incurred, directly or indirectly, to a person who
23 is subject in a foreign country or state, other
24 than a state which requires mandatory unitary
25 reporting, to a tax on or measured by net income
26 with respect to such interest; or

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1 (ii) an item of interest paid, accrued, or
2 incurred, directly or indirectly, to a person if
3 the taxpayer can establish, based on a
4 preponderance of the evidence, both of the
5 following:
6 (a) the person, during the same taxable
7 year, paid, accrued, or incurred, the interest
8 to a person that is not a related member, and
9 (b) the transaction giving rise to the
10 interest expense between the taxpayer and the
11 person did not have as a principal purpose the
12 avoidance of Illinois income tax, and is paid
13 pursuant to a contract or agreement that
14 reflects an arm's-length interest rate and
15 terms; or
16 (iii) the taxpayer can establish, based on
17 clear and convincing evidence, that the interest
18 paid, accrued, or incurred relates to a contract or
19 agreement entered into at arm's-length rates and
20 terms and the principal purpose for the payment is
21 not federal or Illinois tax avoidance; or
22 (iv) an item of interest paid, accrued, or
23 incurred, directly or indirectly, to a person if
24 the taxpayer establishes by clear and convincing
25 evidence that the adjustments are unreasonable; or
26 if the taxpayer and the Director agree in writing

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1 to the application or use of an alternative method
2 of apportionment under Section 304(f).
3 Nothing in this subsection shall preclude the
4 Director from making any other adjustment
5 otherwise allowed under Section 404 of this Act for
6 any tax year beginning after the effective date of
7 this amendment provided such adjustment is made
8 pursuant to regulation adopted by the Department
9 and such regulations provide methods and standards
10 by which the Department will utilize its authority
11 under Section 404 of this Act;
12 (G-13) An amount equal to the amount of intangible
13 expenses and costs otherwise allowed as a deduction in
14 computing base income, and that were paid, accrued, or
15 incurred, directly or indirectly, (i) for taxable
16 years ending on or after December 31, 2004, to a
17 foreign person who would be a member of the same
18 unitary business group but for the fact that the
19 foreign person's business activity outside the United
20 States is 80% or more of that person's total business
21 activity and (ii) for taxable years ending on or after
22 December 31, 2008, to a person who would be a member of
23 the same unitary business group but for the fact that
24 the person is prohibited under Section 1501(a)(27)
25 from being included in the unitary business group
26 because he or she is ordinarily required to apportion

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1 business income under different subsections of Section
2 304. The addition modification required by this
3 subparagraph shall be reduced to the extent that
4 dividends were included in base income of the unitary
5 group for the same taxable year and received by the
6 taxpayer or by a member of the taxpayer's unitary
7 business group (including amounts included in gross
8 income pursuant to Sections 951 through 964 of the
9 Internal Revenue Code and amounts included in gross
10 income under Section 78 of the Internal Revenue Code)
11 with respect to the stock of the same person to whom
12 the intangible expenses and costs were directly or
13 indirectly paid, incurred, or accrued. The preceding
14 sentence shall not apply to the extent that the same
15 dividends caused a reduction to the addition
16 modification required under Section 203(c)(2)(G-12) of
17 this Act. As used in this subparagraph, the term
18 "intangible expenses and costs" includes: (1)
19 expenses, losses, and costs for or related to the
20 direct or indirect acquisition, use, maintenance or
21 management, ownership, sale, exchange, or any other
22 disposition of intangible property; (2) losses
23 incurred, directly or indirectly, from factoring
24 transactions or discounting transactions; (3) royalty,
25 patent, technical, and copyright fees; (4) licensing
26 fees; and (5) other similar expenses and costs. For

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1 purposes of this subparagraph, "intangible property"
2 includes patents, patent applications, trade names,
3 trademarks, service marks, copyrights, mask works,
4 trade secrets, and similar types of intangible assets.
5 This paragraph shall not apply to the following:
6 (i) any item of intangible expenses or costs
7 paid, accrued, or incurred, directly or
8 indirectly, from a transaction with a person who is
9 subject in a foreign country or state, other than a
10 state which requires mandatory unitary reporting,
11 to a tax on or measured by net income with respect
12 to such item; or
13 (ii) any item of intangible expense or cost
14 paid, accrued, or incurred, directly or
15 indirectly, if the taxpayer can establish, based
16 on a preponderance of the evidence, both of the
17 following:
18 (a) the person during the same taxable
19 year paid, accrued, or incurred, the
20 intangible expense or cost to a person that is
21 not a related member, and
22 (b) the transaction giving rise to the
23 intangible expense or cost between the
24 taxpayer and the person did not have as a
25 principal purpose the avoidance of Illinois
26 income tax, and is paid pursuant to a contract

SB0009 Engrossed- 119 -LRB100 06347 HLH 16385 b
1 or agreement that reflects arm's-length terms;
2 or
3 (iii) any item of intangible expense or cost
4 paid, accrued, or incurred, directly or
5 indirectly, from a transaction with a person if the
6 taxpayer establishes by clear and convincing
7 evidence, that the adjustments are unreasonable;
8 or if the taxpayer and the Director agree in
9 writing to the application or use of an alternative
10 method of apportionment under Section 304(f);
11 Nothing in this subsection shall preclude the
12 Director from making any other adjustment
13 otherwise allowed under Section 404 of this Act for
14 any tax year beginning after the effective date of
15 this amendment provided such adjustment is made
16 pursuant to regulation adopted by the Department
17 and such regulations provide methods and standards
18 by which the Department will utilize its authority
19 under Section 404 of this Act;
20 (G-14) For taxable years ending on or after
21 December 31, 2008, an amount equal to the amount of
22 insurance premium expenses and costs otherwise allowed
23 as a deduction in computing base income, and that were
24 paid, accrued, or incurred, directly or indirectly, to
25 a person who would be a member of the same unitary
26 business group but for the fact that the person is

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1 prohibited under Section 1501(a)(27) from being
2 included in the unitary business group because he or
3 she is ordinarily required to apportion business
4 income under different subsections of Section 304. The
5 addition modification required by this subparagraph
6 shall be reduced to the extent that dividends were
7 included in base income of the unitary group for the
8 same taxable year and received by the taxpayer or by a
9 member of the taxpayer's unitary business group
10 (including amounts included in gross income under
11 Sections 951 through 964 of the Internal Revenue Code
12 and amounts included in gross income under Section 78
13 of the Internal Revenue Code) with respect to the stock
14 of the same person to whom the premiums and costs were
15 directly or indirectly paid, incurred, or accrued. The
16 preceding sentence does not apply to the extent that
17 the same dividends caused a reduction to the addition
18 modification required under Section 203(c)(2)(G-12) or
19 Section 203(c)(2)(G-13) of this Act;
20 (G-15) An amount equal to the credit allowable to
21 the taxpayer under Section 218(a) of this Act,
22 determined without regard to Section 218(c) of this
23 Act;
24 (G-16) For taxable years beginning on or after
25 January 1, 2017, an amount equal to the deduction
26 allowed under Section 199 of the Internal Revenue Code

SB0009 Engrossed- 121 -LRB100 06347 HLH 16385 b
1 for the taxable year;
2 and by deducting from the total so obtained the sum of the
3 following amounts:
4 (H) An amount equal to all amounts included in such
5 total pursuant to the provisions of Sections 402(a),
6 402(c), 403(a), 403(b), 406(a), 407(a) and 408 of the
7 Internal Revenue Code or included in such total as
8 distributions under the provisions of any retirement
9 or disability plan for employees of any governmental
10 agency or unit, or retirement payments to retired
11 partners, which payments are excluded in computing net
12 earnings from self employment by Section 1402 of the
13 Internal Revenue Code and regulations adopted pursuant
14 thereto;
15 (I) The valuation limitation amount;
16 (J) An amount equal to the amount of any tax
17 imposed by this Act which was refunded to the taxpayer
18 and included in such total for the taxable year;
19 (K) An amount equal to all amounts included in
20 taxable income as modified by subparagraphs (A), (B),
21 (C), (D), (E), (F) and (G) which are exempt from
22 taxation by this State either by reason of its statutes
23 or Constitution or by reason of the Constitution,
24 treaties or statutes of the United States; provided
25 that, in the case of any statute of this State that
26 exempts income derived from bonds or other obligations

SB0009 Engrossed- 122 -LRB100 06347 HLH 16385 b
1 from the tax imposed under this Act, the amount
2 exempted shall be the interest net of bond premium
3 amortization;
4 (L) With the exception of any amounts subtracted
5 under subparagraph (K), an amount equal to the sum of
6 all amounts disallowed as deductions by (i) Sections
7 171(a) (2) and 265(a)(2) of the Internal Revenue Code,
8 and all amounts of expenses allocable to interest and
9 disallowed as deductions by Section 265(1) of the
10 Internal Revenue Code; and (ii) for taxable years
11 ending on or after August 13, 1999, Sections 171(a)(2),
12 265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue
13 Code, plus, (iii) for taxable years ending on or after
14 December 31, 2011, Section 45G(e)(3) of the Internal
15 Revenue Code and, for taxable years ending on or after
16 December 31, 2008, any amount included in gross income
17 under Section 87 of the Internal Revenue Code; the
18 provisions of this subparagraph are exempt from the
19 provisions of Section 250;
20 (M) An amount equal to those dividends included in
21 such total which were paid by a corporation which
22 conducts business operations in a River Edge
23 Redevelopment Zone or zones created under the River
24 Edge Redevelopment Zone Act and conducts substantially
25 all of its operations in a River Edge Redevelopment
26 Zone or zones. This subparagraph (M) is exempt from the

SB0009 Engrossed- 123 -LRB100 06347 HLH 16385 b
1 provisions of Section 250;
2 (N) An amount equal to any contribution made to a
3 job training project established pursuant to the Tax
4 Increment Allocation Redevelopment Act;
5 (O) An amount equal to those dividends included in
6 such total that were paid by a corporation that
7 conducts business operations in a federally designated
8 Foreign Trade Zone or Sub-Zone and that is designated a
9 High Impact Business located in Illinois; provided
10 that dividends eligible for the deduction provided in
11 subparagraph (M) of paragraph (2) of this subsection
12 shall not be eligible for the deduction provided under
13 this subparagraph (O);
14 (P) An amount equal to the amount of the deduction
15 used to compute the federal income tax credit for
16 restoration of substantial amounts held under claim of
17 right for the taxable year pursuant to Section 1341 of
18 the Internal Revenue Code;
19 (Q) For taxable year 1999 and thereafter, an amount
20 equal to the amount of any (i) distributions, to the
21 extent includible in gross income for federal income
22 tax purposes, made to the taxpayer because of his or
23 her status as a victim of persecution for racial or
24 religious reasons by Nazi Germany or any other Axis
25 regime or as an heir of the victim and (ii) items of
26 income, to the extent includible in gross income for

SB0009 Engrossed- 124 -LRB100 06347 HLH 16385 b
1 federal income tax purposes, attributable to, derived
2 from or in any way related to assets stolen from,
3 hidden from, or otherwise lost to a victim of
4 persecution for racial or religious reasons by Nazi
5 Germany or any other Axis regime immediately prior to,
6 during, and immediately after World War II, including,
7 but not limited to, interest on the proceeds receivable
8 as insurance under policies issued to a victim of
9 persecution for racial or religious reasons by Nazi
10 Germany or any other Axis regime by European insurance
11 companies immediately prior to and during World War II;
12 provided, however, this subtraction from federal
13 adjusted gross income does not apply to assets acquired
14 with such assets or with the proceeds from the sale of
15 such assets; provided, further, this paragraph shall
16 only apply to a taxpayer who was the first recipient of
17 such assets after their recovery and who is a victim of
18 persecution for racial or religious reasons by Nazi
19 Germany or any other Axis regime or as an heir of the
20 victim. The amount of and the eligibility for any
21 public assistance, benefit, or similar entitlement is
22 not affected by the inclusion of items (i) and (ii) of
23 this paragraph in gross income for federal income tax
24 purposes. This paragraph is exempt from the provisions
25 of Section 250;
26 (R) For taxable years 2001 and thereafter, for the

SB0009 Engrossed- 125 -LRB100 06347 HLH 16385 b
1 taxable year in which the bonus depreciation deduction
2 is taken on the taxpayer's federal income tax return
3 under subsection (k) of Section 168 of the Internal
4 Revenue Code and for each applicable taxable year
5 thereafter, an amount equal to "x", where:
6 (1) "y" equals the amount of the depreciation
7 deduction taken for the taxable year on the
8 taxpayer's federal income tax return on property
9 for which the bonus depreciation deduction was
10 taken in any year under subsection (k) of Section
11 168 of the Internal Revenue Code, but not including
12 the bonus depreciation deduction;
13 (2) for taxable years ending on or before
14 December 31, 2005, "x" equals "y" multiplied by 30
15 and then divided by 70 (or "y" multiplied by
16 0.429); and
17 (3) for taxable years ending after December
18 31, 2005:
19 (i) for property on which a bonus
20 depreciation deduction of 30% of the adjusted
21 basis was taken, "x" equals "y" multiplied by
22 30 and then divided by 70 (or "y" multiplied by
23 0.429); and
24 (ii) for property on which a bonus
25 depreciation deduction of 50% of the adjusted
26 basis was taken, "x" equals "y" multiplied by

SB0009 Engrossed- 126 -LRB100 06347 HLH 16385 b
1 1.0.
2 The aggregate amount deducted under this
3 subparagraph in all taxable years for any one piece of
4 property may not exceed the amount of the bonus
5 depreciation deduction taken on that property on the
6 taxpayer's federal income tax return under subsection
7 (k) of Section 168 of the Internal Revenue Code. This
8 subparagraph (R) is exempt from the provisions of
9 Section 250;
10 (S) If the taxpayer sells, transfers, abandons, or
11 otherwise disposes of property for which the taxpayer
12 was required in any taxable year to make an addition
13 modification under subparagraph (G-10), then an amount
14 equal to that addition modification.
15 If the taxpayer continues to own property through
16 the last day of the last tax year for which the
17 taxpayer may claim a depreciation deduction for
18 federal income tax purposes and for which the taxpayer
19 was required in any taxable year to make an addition
20 modification under subparagraph (G-10), then an amount
21 equal to that addition modification.
22 The taxpayer is allowed to take the deduction under
23 this subparagraph only once with respect to any one
24 piece of property.
25 This subparagraph (S) is exempt from the
26 provisions of Section 250;

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1 (T) The amount of (i) any interest income (net of
2 the deductions allocable thereto) taken into account
3 for the taxable year with respect to a transaction with
4 a taxpayer that is required to make an addition
5 modification with respect to such transaction under
6 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
7 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
8 the amount of such addition modification and (ii) any
9 income from intangible property (net of the deductions
10 allocable thereto) taken into account for the taxable
11 year with respect to a transaction with a taxpayer that
12 is required to make an addition modification with
13 respect to such transaction under Section
14 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
15 203(d)(2)(D-8), but not to exceed the amount of such
16 addition modification. This subparagraph (T) is exempt
17 from the provisions of Section 250;
18 (U) An amount equal to the interest income taken
19 into account for the taxable year (net of the
20 deductions allocable thereto) with respect to
21 transactions with (i) a foreign person who would be a
22 member of the taxpayer's unitary business group but for
23 the fact the foreign person's business activity
24 outside the United States is 80% or more of that
25 person's total business activity and (ii) for taxable
26 years ending on or after December 31, 2008, to a person

SB0009 Engrossed- 128 -LRB100 06347 HLH 16385 b
1 who would be a member of the same unitary business
2 group but for the fact that the person is prohibited
3 under Section 1501(a)(27) from being included in the
4 unitary business group because he or she is ordinarily
5 required to apportion business income under different
6 subsections of Section 304, but not to exceed the
7 addition modification required to be made for the same
8 taxable year under Section 203(c)(2)(G-12) for
9 interest paid, accrued, or incurred, directly or
10 indirectly, to the same person. This subparagraph (U)
11 is exempt from the provisions of Section 250;
12 (V) An amount equal to the income from intangible
13 property taken into account for the taxable year (net
14 of the deductions allocable thereto) with respect to
15 transactions with (i) a foreign person who would be a
16 member of the taxpayer's unitary business group but for
17 the fact that the foreign person's business activity
18 outside the United States is 80% or more of that
19 person's total business activity and (ii) for taxable
20 years ending on or after December 31, 2008, to a person
21 who would be a member of the same unitary business
22 group but for the fact that the person is prohibited
23 under Section 1501(a)(27) from being included in the
24 unitary business group because he or she is ordinarily
25 required to apportion business income under different
26 subsections of Section 304, but not to exceed the

SB0009 Engrossed- 129 -LRB100 06347 HLH 16385 b
1 addition modification required to be made for the same
2 taxable year under Section 203(c)(2)(G-13) for
3 intangible expenses and costs paid, accrued, or
4 incurred, directly or indirectly, to the same foreign
5 person. This subparagraph (V) is exempt from the
6 provisions of Section 250;
7 (W) in the case of an estate, an amount equal to
8 all amounts included in such total pursuant to the
9 provisions of Section 111 of the Internal Revenue Code
10 as a recovery of items previously deducted by the
11 decedent from adjusted gross income in the computation
12 of taxable income. This subparagraph (W) is exempt from
13 Section 250;
14 (X) an amount equal to the refund included in such
15 total of any tax deducted for federal income tax
16 purposes, to the extent that deduction was added back
17 under subparagraph (F). This subparagraph (X) is
18 exempt from the provisions of Section 250; and
19 (Y) For taxable years ending on or after December
20 31, 2011, in the case of a taxpayer who was required to
21 add back any insurance premiums under Section
22 203(c)(2)(G-14), such taxpayer may elect to subtract
23 that part of a reimbursement received from the
24 insurance company equal to the amount of the expense or
25 loss (including expenses incurred by the insurance
26 company) that would have been taken into account as a

SB0009 Engrossed- 130 -LRB100 06347 HLH 16385 b
1 deduction for federal income tax purposes if the
2 expense or loss had been uninsured. If a taxpayer makes
3 the election provided for by this subparagraph (Y), the
4 insurer to which the premiums were paid must add back
5 to income the amount subtracted by the taxpayer
6 pursuant to this subparagraph (Y). This subparagraph
7 (Y) is exempt from the provisions of Section 250.
8 (3) Limitation. The amount of any modification
9 otherwise required under this subsection shall, under
10 regulations prescribed by the Department, be adjusted by
11 any amounts included therein which were properly paid,
12 credited, or required to be distributed, or permanently set
13 aside for charitable purposes pursuant to Internal Revenue
14 Code Section 642(c) during the taxable year.
15 (d) Partnerships.
16 (1) In general. In the case of a partnership, base
17 income means an amount equal to the taxpayer's taxable
18 income for the taxable year as modified by paragraph (2).
19 (2) Modifications. The taxable income referred to in
20 paragraph (1) shall be modified by adding thereto the sum
21 of the following amounts:
22 (A) An amount equal to all amounts paid or accrued
23 to the taxpayer as interest or dividends during the
24 taxable year to the extent excluded from gross income
25 in the computation of taxable income;

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1 (B) An amount equal to the amount of tax imposed by
2 this Act to the extent deducted from gross income for
3 the taxable year;
4 (C) The amount of deductions allowed to the
5 partnership pursuant to Section 707 (c) of the Internal
6 Revenue Code in calculating its taxable income;
7 (D) An amount equal to the amount of the capital
8 gain deduction allowable under the Internal Revenue
9 Code, to the extent deducted from gross income in the
10 computation of taxable income;
11 (D-5) For taxable years 2001 and thereafter, an
12 amount equal to the bonus depreciation deduction taken
13 on the taxpayer's federal income tax return for the
14 taxable year under subsection (k) of Section 168 of the
15 Internal Revenue Code;
16 (D-6) If the taxpayer sells, transfers, abandons,
17 or otherwise disposes of property for which the
18 taxpayer was required in any taxable year to make an
19 addition modification under subparagraph (D-5), then
20 an amount equal to the aggregate amount of the
21 deductions taken in all taxable years under
22 subparagraph (O) with respect to that property.
23 If the taxpayer continues to own property through
24 the last day of the last tax year for which the
25 taxpayer may claim a depreciation deduction for
26 federal income tax purposes and for which the taxpayer

SB0009 Engrossed- 132 -LRB100 06347 HLH 16385 b
1 was allowed in any taxable year to make a subtraction
2 modification under subparagraph (O), then an amount
3 equal to that subtraction modification.
4 The taxpayer is required to make the addition
5 modification under this subparagraph only once with
6 respect to any one piece of property;
7 (D-7) An amount equal to the amount otherwise
8 allowed as a deduction in computing base income for
9 interest paid, accrued, or incurred, directly or
10 indirectly, (i) for taxable years ending on or after
11 December 31, 2004, to a foreign person who would be a
12 member of the same unitary business group but for the
13 fact the foreign person's business activity outside
14 the United States is 80% or more of the foreign
15 person's total business activity and (ii) for taxable
16 years ending on or after December 31, 2008, to a person
17 who would be a member of the same unitary business
18 group but for the fact that the person is prohibited
19 under Section 1501(a)(27) from being included in the
20 unitary business group because he or she is ordinarily
21 required to apportion business income under different
22 subsections of Section 304. The addition modification
23 required by this subparagraph shall be reduced to the
24 extent that dividends were included in base income of
25 the unitary group for the same taxable year and
26 received by the taxpayer or by a member of the

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1 taxpayer's unitary business group (including amounts
2 included in gross income pursuant to Sections 951
3 through 964 of the Internal Revenue Code and amounts
4 included in gross income under Section 78 of the
5 Internal Revenue Code) with respect to the stock of the
6 same person to whom the interest was paid, accrued, or
7 incurred.
8 This paragraph shall not apply to the following:
9 (i) an item of interest paid, accrued, or
10 incurred, directly or indirectly, to a person who
11 is subject in a foreign country or state, other
12 than a state which requires mandatory unitary
13 reporting, to a tax on or measured by net income
14 with respect to such interest; or
15 (ii) an item of interest paid, accrued, or
16 incurred, directly or indirectly, to a person if
17 the taxpayer can establish, based on a
18 preponderance of the evidence, both of the
19 following:
20 (a) the person, during the same taxable
21 year, paid, accrued, or incurred, the interest
22 to a person that is not a related member, and
23 (b) the transaction giving rise to the
24 interest expense between the taxpayer and the
25 person did not have as a principal purpose the
26 avoidance of Illinois income tax, and is paid

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1 pursuant to a contract or agreement that
2 reflects an arm's-length interest rate and
3 terms; or
4 (iii) the taxpayer can establish, based on
5 clear and convincing evidence, that the interest
6 paid, accrued, or incurred relates to a contract or
7 agreement entered into at arm's-length rates and
8 terms and the principal purpose for the payment is
9 not federal or Illinois tax avoidance; or
10 (iv) an item of interest paid, accrued, or
11 incurred, directly or indirectly, to a person if
12 the taxpayer establishes by clear and convincing
13 evidence that the adjustments are unreasonable; or
14 if the taxpayer and the Director agree in writing
15 to the application or use of an alternative method
16 of apportionment under Section 304(f).
17 Nothing in this subsection shall preclude the
18 Director from making any other adjustment
19 otherwise allowed under Section 404 of this Act for
20 any tax year beginning after the effective date of
21 this amendment provided such adjustment is made
22 pursuant to regulation adopted by the Department
23 and such regulations provide methods and standards
24 by which the Department will utilize its authority
25 under Section 404 of this Act; and
26 (D-8) An amount equal to the amount of intangible

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1 expenses and costs otherwise allowed as a deduction in
2 computing base income, and that were paid, accrued, or
3 incurred, directly or indirectly, (i) for taxable
4 years ending on or after December 31, 2004, to a
5 foreign person who would be a member of the same
6 unitary business group but for the fact that the
7 foreign person's business activity outside the United
8 States is 80% or more of that person's total business
9 activity and (ii) for taxable years ending on or after
10 December 31, 2008, to a person who would be a member of
11 the same unitary business group but for the fact that
12 the person is prohibited under Section 1501(a)(27)
13 from being included in the unitary business group
14 because he or she is ordinarily required to apportion
15 business income under different subsections of Section
16 304. The addition modification required by this
17 subparagraph shall be reduced to the extent that
18 dividends were included in base income of the unitary
19 group for the same taxable year and received by the
20 taxpayer or by a member of the taxpayer's unitary
21 business group (including amounts included in gross
22 income pursuant to Sections 951 through 964 of the
23 Internal Revenue Code and amounts included in gross
24 income under Section 78 of the Internal Revenue Code)
25 with respect to the stock of the same person to whom
26 the intangible expenses and costs were directly or

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1 indirectly paid, incurred or accrued. The preceding
2 sentence shall not apply to the extent that the same
3 dividends caused a reduction to the addition
4 modification required under Section 203(d)(2)(D-7) of
5 this Act. As used in this subparagraph, the term
6 "intangible expenses and costs" includes (1) expenses,
7 losses, and costs for, or related to, the direct or
8 indirect acquisition, use, maintenance or management,
9 ownership, sale, exchange, or any other disposition of
10 intangible property; (2) losses incurred, directly or
11 indirectly, from factoring transactions or discounting
12 transactions; (3) royalty, patent, technical, and
13 copyright fees; (4) licensing fees; and (5) other
14 similar expenses and costs. For purposes of this
15 subparagraph, "intangible property" includes patents,
16 patent applications, trade names, trademarks, service
17 marks, copyrights, mask works, trade secrets, and
18 similar types of intangible assets;
19 This paragraph shall not apply to the following:
20 (i) any item of intangible expenses or costs
21 paid, accrued, or incurred, directly or
22 indirectly, from a transaction with a person who is
23 subject in a foreign country or state, other than a
24 state which requires mandatory unitary reporting,
25 to a tax on or measured by net income with respect
26 to such item; or

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1 (ii) any item of intangible expense or cost
2 paid, accrued, or incurred, directly or
3 indirectly, if the taxpayer can establish, based
4 on a preponderance of the evidence, both of the
5 following:
6 (a) the person during the same taxable
7 year paid, accrued, or incurred, the
8 intangible expense or cost to a person that is
9 not a related member, and
10 (b) the transaction giving rise to the
11 intangible expense or cost between the
12 taxpayer and the person did not have as a
13 principal purpose the avoidance of Illinois
14 income tax, and is paid pursuant to a contract
15 or agreement that reflects arm's-length terms;
16 or
17 (iii) any item of intangible expense or cost
18 paid, accrued, or incurred, directly or
19 indirectly, from a transaction with a person if the
20 taxpayer establishes by clear and convincing
21 evidence, that the adjustments are unreasonable;
22 or if the taxpayer and the Director agree in
23 writing to the application or use of an alternative
24 method of apportionment under Section 304(f);
25 Nothing in this subsection shall preclude the
26 Director from making any other adjustment

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1 otherwise allowed under Section 404 of this Act for
2 any tax year beginning after the effective date of
3 this amendment provided such adjustment is made
4 pursuant to regulation adopted by the Department
5 and such regulations provide methods and standards
6 by which the Department will utilize its authority
7 under Section 404 of this Act;
8 (D-9) For taxable years ending on or after December
9 31, 2008, an amount equal to the amount of insurance
10 premium expenses and costs otherwise allowed as a
11 deduction in computing base income, and that were paid,
12 accrued, or incurred, directly or indirectly, to a
13 person who would be a member of the same unitary
14 business group but for the fact that the person is
15 prohibited under Section 1501(a)(27) from being
16 included in the unitary business group because he or
17 she is ordinarily required to apportion business
18 income under different subsections of Section 304. The
19 addition modification required by this subparagraph
20 shall be reduced to the extent that dividends were
21 included in base income of the unitary group for the
22 same taxable year and received by the taxpayer or by a
23 member of the taxpayer's unitary business group
24 (including amounts included in gross income under
25 Sections 951 through 964 of the Internal Revenue Code
26 and amounts included in gross income under Section 78

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1 of the Internal Revenue Code) with respect to the stock
2 of the same person to whom the premiums and costs were
3 directly or indirectly paid, incurred, or accrued. The
4 preceding sentence does not apply to the extent that
5 the same dividends caused a reduction to the addition
6 modification required under Section 203(d)(2)(D-7) or
7 Section 203(d)(2)(D-8) of this Act;
8 (D-10) An amount equal to the credit allowable to
9 the taxpayer under Section 218(a) of this Act,
10 determined without regard to Section 218(c) of this
11 Act;
12 (D-11) For taxable years beginning on or after
13 January 1, 2017, an amount equal to the deduction
14 allowed under Section 199 of the Internal Revenue Code
15 for the taxable year;
16 and by deducting from the total so obtained the following
17 amounts:
18 (E) The valuation limitation amount;
19 (F) An amount equal to the amount of any tax
20 imposed by this Act which was refunded to the taxpayer
21 and included in such total for the taxable year;
22 (G) An amount equal to all amounts included in
23 taxable income as modified by subparagraphs (A), (B),
24 (C) and (D) which are exempt from taxation by this
25 State either by reason of its statutes or Constitution
26 or by reason of the Constitution, treaties or statutes

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1 of the United States; provided that, in the case of any
2 statute of this State that exempts income derived from
3 bonds or other obligations from the tax imposed under
4 this Act, the amount exempted shall be the interest net
5 of bond premium amortization;
6 (H) Any income of the partnership which
7 constitutes personal service income as defined in
8 Section 1348 (b) (1) of the Internal Revenue Code (as
9 in effect December 31, 1981) or a reasonable allowance
10 for compensation paid or accrued for services rendered
11 by partners to the partnership, whichever is greater;
12 this subparagraph (H) is exempt from the provisions of
13 Section 250;
14 (I) An amount equal to all amounts of income
15 distributable to an entity subject to the Personal
16 Property Tax Replacement Income Tax imposed by
17 subsections (c) and (d) of Section 201 of this Act
18 including amounts distributable to organizations
19 exempt from federal income tax by reason of Section
20 501(a) of the Internal Revenue Code; this subparagraph
21 (I) is exempt from the provisions of Section 250;
22 (J) With the exception of any amounts subtracted
23 under subparagraph (G), an amount equal to the sum of
24 all amounts disallowed as deductions by (i) Sections
25 171(a) (2), and 265(2) of the Internal Revenue Code,
26 and all amounts of expenses allocable to interest and

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1 disallowed as deductions by Section 265(1) of the
2 Internal Revenue Code; and (ii) for taxable years
3 ending on or after August 13, 1999, Sections 171(a)(2),
4 265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue
5 Code, plus, (iii) for taxable years ending on or after
6 December 31, 2011, Section 45G(e)(3) of the Internal
7 Revenue Code and, for taxable years ending on or after
8 December 31, 2008, any amount included in gross income
9 under Section 87 of the Internal Revenue Code; the
10 provisions of this subparagraph are exempt from the
11 provisions of Section 250;
12 (K) An amount equal to those dividends included in
13 such total which were paid by a corporation which
14 conducts business operations in a River Edge
15 Redevelopment Zone or zones created under the River
16 Edge Redevelopment Zone Act and conducts substantially
17 all of its operations from a River Edge Redevelopment
18 Zone or zones. This subparagraph (K) is exempt from the
19 provisions of Section 250;
20 (L) An amount equal to any contribution made to a
21 job training project established pursuant to the Real
22 Property Tax Increment Allocation Redevelopment Act;
23 (M) An amount equal to those dividends included in
24 such total that were paid by a corporation that
25 conducts business operations in a federally designated
26 Foreign Trade Zone or Sub-Zone and that is designated a

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1 High Impact Business located in Illinois; provided
2 that dividends eligible for the deduction provided in
3 subparagraph (K) of paragraph (2) of this subsection
4 shall not be eligible for the deduction provided under
5 this subparagraph (M);
6 (N) An amount equal to the amount of the deduction
7 used to compute the federal income tax credit for
8 restoration of substantial amounts held under claim of
9 right for the taxable year pursuant to Section 1341 of
10 the Internal Revenue Code;
11 (O) For taxable years 2001 and thereafter, for the
12 taxable year in which the bonus depreciation deduction
13 is taken on the taxpayer's federal income tax return
14 under subsection (k) of Section 168 of the Internal
15 Revenue Code and for each applicable taxable year
16 thereafter, an amount equal to "x", where:
17 (1) "y" equals the amount of the depreciation
18 deduction taken for the taxable year on the
19 taxpayer's federal income tax return on property
20 for which the bonus depreciation deduction was
21 taken in any year under subsection (k) of Section
22 168 of the Internal Revenue Code, but not including
23 the bonus depreciation deduction;
24 (2) for taxable years ending on or before
25 December 31, 2005, "x" equals "y" multiplied by 30
26 and then divided by 70 (or "y" multiplied by

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1 0.429); and
2 (3) for taxable years ending after December
3 31, 2005:
4 (i) for property on which a bonus
5 depreciation deduction of 30% of the adjusted
6 basis was taken, "x" equals "y" multiplied by
7 30 and then divided by 70 (or "y" multiplied by
8 0.429); and
9 (ii) for property on which a bonus
10 depreciation deduction of 50% of the adjusted
11 basis was taken, "x" equals "y" multiplied by
12 1.0.
13 The aggregate amount deducted under this
14 subparagraph in all taxable years for any one piece of
15 property may not exceed the amount of the bonus
16 depreciation deduction taken on that property on the
17 taxpayer's federal income tax return under subsection
18 (k) of Section 168 of the Internal Revenue Code. This
19 subparagraph (O) is exempt from the provisions of
20 Section 250;
21 (P) If the taxpayer sells, transfers, abandons, or
22 otherwise disposes of property for which the taxpayer
23 was required in any taxable year to make an addition
24 modification under subparagraph (D-5), then an amount
25 equal to that addition modification.
26 If the taxpayer continues to own property through

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1 the last day of the last tax year for which the
2 taxpayer may claim a depreciation deduction for
3 federal income tax purposes and for which the taxpayer
4 was required in any taxable year to make an addition
5 modification under subparagraph (D-5), then an amount
6 equal to that addition modification.
7 The taxpayer is allowed to take the deduction under
8 this subparagraph only once with respect to any one
9 piece of property.
10 This subparagraph (P) is exempt from the
11 provisions of Section 250;
12 (Q) The amount of (i) any interest income (net of
13 the deductions allocable thereto) taken into account
14 for the taxable year with respect to a transaction with
15 a taxpayer that is required to make an addition
16 modification with respect to such transaction under
17 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
18 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
19 the amount of such addition modification and (ii) any
20 income from intangible property (net of the deductions
21 allocable thereto) taken into account for the taxable
22 year with respect to a transaction with a taxpayer that
23 is required to make an addition modification with
24 respect to such transaction under Section
25 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
26 203(d)(2)(D-8), but not to exceed the amount of such

SB0009 Engrossed- 145 -LRB100 06347 HLH 16385 b
1 addition modification. This subparagraph (Q) is exempt
2 from Section 250;
3 (R) An amount equal to the interest income taken
4 into account for the taxable year (net of the
5 deductions allocable thereto) with respect to
6 transactions with (i) a foreign person who would be a
7 member of the taxpayer's unitary business group but for
8 the fact that the foreign person's business activity
9 outside the United States is 80% or more of that
10 person's total business activity and (ii) for taxable
11 years ending on or after December 31, 2008, to a person
12 who would be a member of the same unitary business
13 group but for the fact that the person is prohibited
14 under Section 1501(a)(27) from being included in the
15 unitary business group because he or she is ordinarily
16 required to apportion business income under different
17 subsections of Section 304, but not to exceed the
18 addition modification required to be made for the same
19 taxable year under Section 203(d)(2)(D-7) for interest
20 paid, accrued, or incurred, directly or indirectly, to
21 the same person. This subparagraph (R) is exempt from
22 Section 250;
23 (S) An amount equal to the income from intangible
24 property taken into account for the taxable year (net
25 of the deductions allocable thereto) with respect to
26 transactions with (i) a foreign person who would be a

SB0009 Engrossed- 146 -LRB100 06347 HLH 16385 b
1 member of the taxpayer's unitary business group but for
2 the fact that the foreign person's business activity
3 outside the United States is 80% or more of that
4 person's total business activity and (ii) for taxable
5 years ending on or after December 31, 2008, to a person
6 who would be a member of the same unitary business
7 group but for the fact that the person is prohibited
8 under Section 1501(a)(27) from being included in the
9 unitary business group because he or she is ordinarily
10 required to apportion business income under different
11 subsections of Section 304, but not to exceed the
12 addition modification required to be made for the same
13 taxable year under Section 203(d)(2)(D-8) for
14 intangible expenses and costs paid, accrued, or
15 incurred, directly or indirectly, to the same person.
16 This subparagraph (S) is exempt from Section 250; and
17 (T) For taxable years ending on or after December
18 31, 2011, in the case of a taxpayer who was required to
19 add back any insurance premiums under Section
20 203(d)(2)(D-9), such taxpayer may elect to subtract
21 that part of a reimbursement received from the
22 insurance company equal to the amount of the expense or
23 loss (including expenses incurred by the insurance
24 company) that would have been taken into account as a
25 deduction for federal income tax purposes if the
26 expense or loss had been uninsured. If a taxpayer makes

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1 the election provided for by this subparagraph (T), the
2 insurer to which the premiums were paid must add back
3 to income the amount subtracted by the taxpayer
4 pursuant to this subparagraph (T). This subparagraph
5 (T) is exempt from the provisions of Section 250.
6 (e) Gross income; adjusted gross income; taxable income.
7 (1) In general. Subject to the provisions of paragraph
8 (2) and subsection (b) (3), for purposes of this Section
9 and Section 803(e), a taxpayer's gross income, adjusted
10 gross income, or taxable income for the taxable year shall
11 mean the amount of gross income, adjusted gross income or
12 taxable income properly reportable for federal income tax
13 purposes for the taxable year under the provisions of the
14 Internal Revenue Code. Taxable income may be less than
15 zero. However, for taxable years ending on or after
16 December 31, 1986, net operating loss carryforwards from
17 taxable years ending prior to December 31, 1986, may not
18 exceed the sum of federal taxable income for the taxable
19 year before net operating loss deduction, plus the excess
20 of addition modifications over subtraction modifications
21 for the taxable year. For taxable years ending prior to
22 December 31, 1986, taxable income may never be an amount in
23 excess of the net operating loss for the taxable year as
24 defined in subsections (c) and (d) of Section 172 of the
25 Internal Revenue Code, provided that when taxable income of

SB0009 Engrossed- 148 -LRB100 06347 HLH 16385 b
1 a corporation (other than a Subchapter S corporation),
2 trust, or estate is less than zero and addition
3 modifications, other than those provided by subparagraph
4 (E) of paragraph (2) of subsection (b) for corporations or
5 subparagraph (E) of paragraph (2) of subsection (c) for
6 trusts and estates, exceed subtraction modifications, an
7 addition modification must be made under those
8 subparagraphs for any other taxable year to which the
9 taxable income less than zero (net operating loss) is
10 applied under Section 172 of the Internal Revenue Code or
11 under subparagraph (E) of paragraph (2) of this subsection
12 (e) applied in conjunction with Section 172 of the Internal
13 Revenue Code.
14 (2) Special rule. For purposes of paragraph (1) of this
15 subsection, the taxable income properly reportable for
16 federal income tax purposes shall mean:
17 (A) Certain life insurance companies. In the case
18 of a life insurance company subject to the tax imposed
19 by Section 801 of the Internal Revenue Code, life
20 insurance company taxable income, plus the amount of
21 distribution from pre-1984 policyholder surplus
22 accounts as calculated under Section 815a of the
23 Internal Revenue Code;
24 (B) Certain other insurance companies. In the case
25 of mutual insurance companies subject to the tax
26 imposed by Section 831 of the Internal Revenue Code,

SB0009 Engrossed- 149 -LRB100 06347 HLH 16385 b
1 insurance company taxable income;
2 (C) Regulated investment companies. In the case of
3 a regulated investment company subject to the tax
4 imposed by Section 852 of the Internal Revenue Code,
5 investment company taxable income;
6 (D) Real estate investment trusts. In the case of a
7 real estate investment trust subject to the tax imposed
8 by Section 857 of the Internal Revenue Code, real
9 estate investment trust taxable income;
10 (E) Consolidated corporations. In the case of a
11 corporation which is a member of an affiliated group of
12 corporations filing a consolidated income tax return
13 for the taxable year for federal income tax purposes,
14 taxable income determined as if such corporation had
15 filed a separate return for federal income tax purposes
16 for the taxable year and each preceding taxable year
17 for which it was a member of an affiliated group. For
18 purposes of this subparagraph, the taxpayer's separate
19 taxable income shall be determined as if the election
20 provided by Section 243(b) (2) of the Internal Revenue
21 Code had been in effect for all such years;
22 (F) Cooperatives. In the case of a cooperative
23 corporation or association, the taxable income of such
24 organization determined in accordance with the
25 provisions of Section 1381 through 1388 of the Internal
26 Revenue Code, but without regard to the prohibition

SB0009 Engrossed- 150 -LRB100 06347 HLH 16385 b
1 against offsetting losses from patronage activities
2 against income from nonpatronage activities; except
3 that a cooperative corporation or association may make
4 an election to follow its federal income tax treatment
5 of patronage losses and nonpatronage losses. In the
6 event such election is made, such losses shall be
7 computed and carried over in a manner consistent with
8 subsection (a) of Section 207 of this Act and
9 apportioned by the apportionment factor reported by
10 the cooperative on its Illinois income tax return filed
11 for the taxable year in which the losses are incurred.
12 The election shall be effective for all taxable years
13 with original returns due on or after the date of the
14 election. In addition, the cooperative may file an
15 amended return or returns, as allowed under this Act,
16 to provide that the election shall be effective for
17 losses incurred or carried forward for taxable years
18 occurring prior to the date of the election. Once made,
19 the election may only be revoked upon approval of the
20 Director. The Department shall adopt rules setting
21 forth requirements for documenting the elections and
22 any resulting Illinois net loss and the standards to be
23 used by the Director in evaluating requests to revoke
24 elections. Public Act 96-932 is declaratory of
25 existing law;
26 (G) Subchapter S corporations. In the case of: (i)

SB0009 Engrossed- 151 -LRB100 06347 HLH 16385 b
1 a Subchapter S corporation for which there is in effect
2 an election for the taxable year under Section 1362 of
3 the Internal Revenue Code, the taxable income of such
4 corporation determined in accordance with Section
5 1363(b) of the Internal Revenue Code, except that
6 taxable income shall take into account those items
7 which are required by Section 1363(b)(1) of the
8 Internal Revenue Code to be separately stated; and (ii)
9 a Subchapter S corporation for which there is in effect
10 a federal election to opt out of the provisions of the
11 Subchapter S Revision Act of 1982 and have applied
12 instead the prior federal Subchapter S rules as in
13 effect on July 1, 1982, the taxable income of such
14 corporation determined in accordance with the federal
15 Subchapter S rules as in effect on July 1, 1982; and
16 (H) Partnerships. In the case of a partnership,
17 taxable income determined in accordance with Section
18 703 of the Internal Revenue Code, except that taxable
19 income shall take into account those items which are
20 required by Section 703(a)(1) to be separately stated
21 but which would be taken into account by an individual
22 in calculating his taxable income.
23 (3) Recapture of business expenses on disposition of
24 asset or business. Notwithstanding any other law to the
25 contrary, if in prior years income from an asset or
26 business has been classified as business income and in a

SB0009 Engrossed- 152 -LRB100 06347 HLH 16385 b
1 later year is demonstrated to be non-business income, then
2 all expenses, without limitation, deducted in such later
3 year and in the 2 immediately preceding taxable years
4 related to that asset or business that generated the
5 non-business income shall be added back and recaptured as
6 business income in the year of the disposition of the asset
7 or business. Such amount shall be apportioned to Illinois
8 using the greater of the apportionment fraction computed
9 for the business under Section 304 of this Act for the
10 taxable year or the average of the apportionment fractions
11 computed for the business under Section 304 of this Act for
12 the taxable year and for the 2 immediately preceding
13 taxable years.
14 (f) Valuation limitation amount.
15 (1) In general. The valuation limitation amount
16 referred to in subsections (a) (2) (G), (c) (2) (I) and
17 (d)(2) (E) is an amount equal to:
18 (A) The sum of the pre-August 1, 1969 appreciation
19 amounts (to the extent consisting of gain reportable
20 under the provisions of Section 1245 or 1250 of the
21 Internal Revenue Code) for all property in respect of
22 which such gain was reported for the taxable year; plus
23 (B) The lesser of (i) the sum of the pre-August 1,
24 1969 appreciation amounts (to the extent consisting of
25 capital gain) for all property in respect of which such

SB0009 Engrossed- 153 -LRB100 06347 HLH 16385 b
1 gain was reported for federal income tax purposes for
2 the taxable year, or (ii) the net capital gain for the
3 taxable year, reduced in either case by any amount of
4 such gain included in the amount determined under
5 subsection (a) (2) (F) or (c) (2) (H).
6 (2) Pre-August 1, 1969 appreciation amount.
7 (A) If the fair market value of property referred
8 to in paragraph (1) was readily ascertainable on August
9 1, 1969, the pre-August 1, 1969 appreciation amount for
10 such property is the lesser of (i) the excess of such
11 fair market value over the taxpayer's basis (for
12 determining gain) for such property on that date
13 (determined under the Internal Revenue Code as in
14 effect on that date), or (ii) the total gain realized
15 and reportable for federal income tax purposes in
16 respect of the sale, exchange or other disposition of
17 such property.
18 (B) If the fair market value of property referred
19 to in paragraph (1) was not readily ascertainable on
20 August 1, 1969, the pre-August 1, 1969 appreciation
21 amount for such property is that amount which bears the
22 same ratio to the total gain reported in respect of the
23 property for federal income tax purposes for the
24 taxable year, as the number of full calendar months in
25 that part of the taxpayer's holding period for the
26 property ending July 31, 1969 bears to the number of

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1 full calendar months in the taxpayer's entire holding
2 period for the property.
3 (C) The Department shall prescribe such
4 regulations as may be necessary to carry out the
5 purposes of this paragraph.
6 (g) Double deductions. Unless specifically provided
7otherwise, nothing in this Section shall permit the same item
8to be deducted more than once.
9 (h) Legislative intention. Except as expressly provided by
10this Section there shall be no modifications or limitations on
11the amounts of income, gain, loss or deduction taken into
12account in determining gross income, adjusted gross income or
13taxable income for federal income tax purposes for the taxable
14year, or in the amount of such items entering into the
15computation of base income and net income under this Act for
16such taxable year, whether in respect of property values as of
17August 1, 1969 or otherwise.
18(Source: P.A. 96-45, eff. 7-15-09; 96-120, eff. 8-4-09; 96-198,
19eff. 8-10-09; 96-328, eff. 8-11-09; 96-520, eff. 8-14-09;
2096-835, eff. 12-16-09; 96-932, eff. 1-1-11; 96-935, eff.
216-21-10; 96-1214, eff. 7-22-10; 97-333, eff. 8-12-11; 97-507,
22eff. 8-23-11; 97-905, eff. 8-7-12.)
23 (35 ILCS 5/204) (from Ch. 120, par. 2-204)

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1 Sec. 204. Standard Exemption.
2 (a) Allowance of exemption. In computing net income under
3this Act, there shall be allowed as an exemption the sum of the
4amounts determined under subsections (b), (c) and (d),
5multiplied by a fraction the numerator of which is the amount
6of the taxpayer's base income allocable to this State for the
7taxable year and the denominator of which is the taxpayer's
8total base income for the taxable year.
9 (b) Basic amount. For the purpose of subsection (a) of this
10Section, except as provided by subsection (a) of Section 205
11and in this subsection, each taxpayer shall be allowed a basic
12amount of $1000, except that for corporations the basic amount
13shall be zero for tax years ending on or after December 31,
142003, and for individuals the basic amount shall be:
15 (1) for taxable years ending on or after December 31,
16 1998 and prior to December 31, 1999, $1,300;
17 (2) for taxable years ending on or after December 31,
18 1999 and prior to December 31, 2000, $1,650;
19 (3) for taxable years ending on or after December 31,
20 2000 and prior to December 31, 2012, $2,000;
21 (4) for taxable years ending on or after December 31,
22 2012 and prior to December 31, 2013, $2,050;
23 (5) for taxable years ending on or after December 31,
24 2013, $2,050 plus the cost-of-living adjustment under
25 subsection (d-5).
26For taxable years ending on or after December 31, 1992, a

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1taxpayer whose Illinois base income exceeds the basic amount
2and who is claimed as a dependent on another person's tax
3return under the Internal Revenue Code shall not be allowed any
4basic amount under this subsection.
5 (c) Additional amount for individuals. In the case of an
6individual taxpayer, there shall be allowed for the purpose of
7subsection (a), in addition to the basic amount provided by
8subsection (b), an additional exemption equal to the basic
9amount for each exemption in excess of one allowable to such
10individual taxpayer for the taxable year under Section 151 of
11the Internal Revenue Code.
12 (d) Additional exemptions for an individual taxpayer and
13his or her spouse. In the case of an individual taxpayer and
14his or her spouse, he or she shall each be allowed additional
15exemptions as follows:
16 (1) Additional exemption for taxpayer or spouse 65
17 years of age or older.
18 (A) For taxpayer. An additional exemption of
19 $1,000 for the taxpayer if he or she has attained the
20 age of 65 before the end of the taxable year.
21 (B) For spouse when a joint return is not filed. An
22 additional exemption of $1,000 for the spouse of the
23 taxpayer if a joint return is not made by the taxpayer
24 and his spouse, and if the spouse has attained the age
25 of 65 before the end of such taxable year, and, for the
26 calendar year in which the taxable year of the taxpayer

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1 begins, has no gross income and is not the dependent of
2 another taxpayer.
3 (2) Additional exemption for blindness of taxpayer or
4 spouse.
5 (A) For taxpayer. An additional exemption of
6 $1,000 for the taxpayer if he or she is blind at the
7 end of the taxable year.
8 (B) For spouse when a joint return is not filed. An
9 additional exemption of $1,000 for the spouse of the
10 taxpayer if a separate return is made by the taxpayer,
11 and if the spouse is blind and, for the calendar year
12 in which the taxable year of the taxpayer begins, has
13 no gross income and is not the dependent of another
14 taxpayer. For purposes of this paragraph, the
15 determination of whether the spouse is blind shall be
16 made as of the end of the taxable year of the taxpayer;
17 except that if the spouse dies during such taxable year
18 such determination shall be made as of the time of such
19 death.
20 (C) Blindness defined. For purposes of this
21 subsection, an individual is blind only if his or her
22 central visual acuity does not exceed 20/200 in the
23 better eye with correcting lenses, or if his or her
24 visual acuity is greater than 20/200 but is accompanied
25 by a limitation in the fields of vision such that the
26 widest diameter of the visual fields subtends an angle

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1 no greater than 20 degrees.
2 (d-5) Cost-of-living adjustment. For purposes of item (5)
3of subsection (b), the cost-of-living adjustment for any
4calendar year and for taxable years ending prior to the end of
5the subsequent calendar year is equal to $2,050 times the
6percentage (if any) by which:
7 (1) the Consumer Price Index for the preceding calendar
8 year, exceeds
9 (2) the Consumer Price Index for the calendar year
10 2011.
11 The Consumer Price Index for any calendar year is the
12average of the Consumer Price Index as of the close of the
1312-month period ending on August 31 of that calendar year.
14 The term "Consumer Price Index" means the last Consumer
15Price Index for All Urban Consumers published by the United
16States Department of Labor or any successor agency.
17 If any cost-of-living adjustment is not a multiple of $25,
18that adjustment shall be rounded to the next lowest multiple of
19$25.
20 (e) Cross reference. See Article 3 for the manner of
21determining base income allocable to this State.
22 (f) Application of Section 250. Section 250 does not apply
23to the amendments to this Section made by Public Act 90-613.
24 (g) Notwithstanding any other provision of law, for taxable
25years beginning on or after January 1, 2018, no taxpayer may
26claim an exemption under this Section if the taxpayer's

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1adjusted gross income for the taxable year exceeds (i)
2$500,000, in the case of spouses filing a joint federal tax
3return or (ii) $250,000, in the case of all other taxpayers.
4(Source: P.A. 97-507, eff. 8-23-11; 97-652, eff. 6-1-12.)
5 (35 ILCS 5/208) (from Ch. 120, par. 2-208)
6 Sec. 208. Tax credit for residential real property taxes.
7Beginning with tax years ending on or after December 31, 1991,
8every individual taxpayer shall be entitled to a tax credit
9equal to 5% of real property taxes paid by such taxpayer during
10the taxable year on the principal residence of the taxpayer. In
11the case of multi-unit or multi-use structures and farm
12dwellings, the taxes on the taxpayer's principal residence
13shall be that portion of the total taxes which is attributable
14to such principal residence. Notwithstanding any other
15provision of law, for taxable years beginning on or after
16January 1, 2018, no taxpayer may claim a credit under this
17Section if the taxpayer's adjusted gross income for the taxable
18year exceeds (i) $500,000, in the case of spouses filing a
19joint federal tax return, or (ii) $250,000, in the case of all
20other taxpayers.
21(Source: P.A. 87-17.)
22 (35 ILCS 5/212)
23 Sec. 212. Earned income tax credit.
24 (a) With respect to the federal earned income tax credit

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1allowed for the taxable year under Section 32 of the federal
2Internal Revenue Code, 26 U.S.C. 32, each individual taxpayer
3is entitled to a credit against the tax imposed by subsections
4(a) and (b) of Section 201 in an amount equal to (i) 5% of the
5federal tax credit for each taxable year beginning on or after
6January 1, 2000 and ending prior to December 31, 2012, (ii)
77.5% of the federal tax credit for each taxable year beginning
8on or after January 1, 2012 and ending prior to December 31,
92013, and (iii) 10% of the federal tax credit for each taxable
10year beginning on or after January 1, 2013 and beginning prior
11to January 1, 2017, and (iv) 15% of the federal tax credit for
12each taxable year beginning on or after January 1, 2017.
13 For a non-resident or part-year resident, the amount of the
14credit under this Section shall be in proportion to the amount
15of income attributable to this State.
16 (b) For taxable years beginning before January 1, 2003, in
17no event shall a credit under this Section reduce the
18taxpayer's liability to less than zero. For each taxable year
19beginning on or after January 1, 2003, if the amount of the
20credit exceeds the income tax liability for the applicable tax
21year, then the excess credit shall be refunded to the taxpayer.
22The amount of a refund shall not be included in the taxpayer's
23income or resources for the purposes of determining eligibility
24or benefit level in any means-tested benefit program
25administered by a governmental entity unless required by
26federal law.

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1 (c) This Section is exempt from the provisions of Section
2250.
3(Source: P.A. 97-652, eff. 6-1-12.)
4 (35 ILCS 5/222)
5 Sec. 222. Live theater production credit.
6 (a) For tax years beginning on or after January 1, 2012 and
7beginning prior to January 1, 2027, a taxpayer who has received
8a tax credit award under the Live Theater Production Tax Credit
9Act is entitled to a credit against the taxes imposed under
10subsections (a) and (b) of Section 201 of this Act in an amount
11determined under that Act by the Department of Commerce and
12Economic Opportunity.
13 (b) If the taxpayer is a partnership, limited liability
14partnership, limited liability company, or Subchapter S
15corporation, the tax credit award is allowed to the partners,
16unit holders, or shareholders in accordance with the
17determination of income and distributive share of income under
18Sections 702 and 704 and Subchapter S of the Internal Revenue
19Code.
20 (c) A sale, assignment, or transfer of the tax credit award
21may be made by the taxpayer earning the credit within one year
22after the credit is awarded in accordance with rules adopted by
23the Department of Commerce and Economic Opportunity.
24 (d) The Department of Revenue, in cooperation with the
25Department of Commerce and Economic Opportunity, shall adopt

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1rules to enforce and administer the provisions of this Section.
2 (e) The tax credit award may not be carried back. If the
3amount of the credit exceeds the tax liability for the year,
4the excess may be carried forward and applied to the tax
5liability of the 5 tax years following the excess credit year.
6The tax credit award shall be applied to the earliest year for
7which there is a tax liability. If there are credits from more
8than one tax year that are available to offset liability, the
9earlier credit shall be applied first. In no event may a credit
10under this Section reduce the taxpayer's liability to less than
11zero.
12(Source: P.A. 97-636, eff. 6-1-12.)
13 (35 ILCS 5/225 new)
14 Sec. 225. Credit for instructional materials and supplies.
15For taxable years beginning on and after January 1, 2017, a
16taxpayer shall be allowed a credit in the amount paid by the
17taxpayer during the taxable year for instructional materials
18and supplies with respect to classroom based instruction in a
19qualified school, or $250, whichever is less, provided that the
20taxpayer is a teacher, instructor, counselor, principal, or
21aide in a qualified school for at least 900 hours during a
22school year.
23 The credit may not be carried back and may not reduce the
24taxpayer's liability to less than zero. If the amount of the
25credit exceeds the tax liability for the year, the excess may

SB0009 Engrossed- 163 -LRB100 06347 HLH 16385 b
1be carried forward and applied to the tax liability of the 5
2taxable years following the excess credit year. The tax credit
3shall be applied to the earliest year for which there is a tax
4liability. If there are credits for more than one year that are
5available to offset a liability, the earlier credit shall be
6applied first.
7 For purposes of this Section, the term "materials and
8supplies" means amounts paid for instructional materials or
9supplies that are designated for classroom use in any qualified
10school. For purposes of this Section, the term "qualified
11school" means a public school or non-public school located in
12Illinois.
13 This Section is exempt from the provisions of Section 250.
14 (35 ILCS 5/804) (from Ch. 120, par. 8-804)
15 Sec. 804. Failure to Pay Estimated Tax.
16 (a) In general. In case of any underpayment of estimated
17tax by a taxpayer, except as provided in subsection (d) or (e),
18the taxpayer shall be liable to a penalty in an amount
19determined at the rate prescribed by Section 3-3 of the Uniform
20Penalty and Interest Act upon the amount of the underpayment
21(determined under subsection (b)) for each required
22installment.
23 (b) Amount of underpayment. For purposes of subsection (a),
24the amount of the underpayment shall be the excess of:
25 (1) the amount of the installment which would be

SB0009 Engrossed- 164 -LRB100 06347 HLH 16385 b
1 required to be paid under subsection (c), over
2 (2) the amount, if any, of the installment paid on or
3 before the last date prescribed for payment.
4 (c) Amount of Required Installments.
5 (1) Amount.
6 (A) In General. Except as provided in paragraphs
7 (2) and (3), the amount of any required installment
8 shall be 25% of the required annual payment.
9 (B) Required Annual Payment. For purposes of
10 subparagraph (A), the term "required annual payment"
11 means the lesser of:
12 (i) 90% of the tax shown on the return for the
13 taxable year, or if no return is filed, 90% of the
14 tax for such year;
15 (ii) for installments due prior to February 1,
16 2011, and after January 31, 2012, 100% of the tax
17 shown on the return of the taxpayer for the
18 preceding taxable year if a return showing a
19 liability for tax was filed by the taxpayer for the
20 preceding taxable year and such preceding year was
21 a taxable year of 12 months; or
22 (iii) for installments due after January 31,
23 2011, and prior to February 1, 2012, 150% of the
24 tax shown on the return of the taxpayer for the
25 preceding taxable year if a return showing a
26 liability for tax was filed by the taxpayer for the

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1 preceding taxable year and such preceding year was
2 a taxable year of 12 months.
3 (2) Lower Required Installment where Annualized Income
4 Installment is Less Than Amount Determined Under Paragraph
5 (1).
6 (A) In General. In the case of any required
7 installment if a taxpayer establishes that the
8 annualized income installment is less than the amount
9 determined under paragraph (1),
10 (i) the amount of such required installment
11 shall be the annualized income installment, and
12 (ii) any reduction in a required installment
13 resulting from the application of this
14 subparagraph shall be recaptured by increasing the
15 amount of the next required installment determined
16 under paragraph (1) by the amount of such
17 reduction, and by increasing subsequent required
18 installments to the extent that the reduction has
19 not previously been recaptured under this clause.
20 (B) Determination of Annualized Income
21 Installment. In the case of any required installment,
22 the annualized income installment is the excess, if
23 any, of:
24 (i) an amount equal to the applicable
25 percentage of the tax for the taxable year computed
26 by placing on an annualized basis the net income

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1 for months in the taxable year ending before the
2 due date for the installment, over
3 (ii) the aggregate amount of any prior
4 required installments for the taxable year.
5 (C) Applicable Percentage.
6 In the case of the followingThe applicable
7 required installments:percentage is:
8 1st ...............................22.5%
9 2nd ...............................45%
10 3rd ...............................67.5%
11 4th ...............................90%
12 (D) Annualized Net Income; Individuals. For
13 individuals, net income shall be placed on an
14 annualized basis by:
15 (i) multiplying by 12, or in the case of a
16 taxable year of less than 12 months, by the number
17 of months in the taxable year, the net income
18 computed without regard to the standard exemption
19 for the months in the taxable year ending before
20 the month in which the installment is required to
21 be paid;
22 (ii) dividing the resulting amount by the
23 number of months in the taxable year ending before
24 the month in which such installment date falls; and
25 (iii) deducting from such amount the standard
26 exemption allowable for the taxable year, such

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1 standard exemption being determined as of the last
2 date prescribed for payment of the installment.
3 (E) Annualized Net Income; Corporations. For
4 corporations, net income shall be placed on an
5 annualized basis by multiplying by 12 the taxable
6 income
7 (i) for the first 3 months of the taxable year,
8 in the case of the installment required to be paid
9 in the 4th month,
10 (ii) for the first 3 months or for the first 5
11 months of the taxable year, in the case of the
12 installment required to be paid in the 6th month,
13 (iii) for the first 6 months or for the first 8
14 months of the taxable year, in the case of the
15 installment required to be paid in the 9th month,
16 and
17 (iv) for the first 9 months or for the first 11
18 months of the taxable year, in the case of the
19 installment required to be paid in the 12th month
20 of the taxable year,
21 then dividing the resulting amount by the number of
22 months in the taxable year (3, 5, 6, 8, 9, or 11 as the
23 case may be).
24 (3) Notwithstanding any other provision of this
25 subsection (c), in the case of a federally regulated
26 exchange that elects to apportion its income under Section

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1 304(c-1) of this Act, the amount of each required
2 installment due prior to June 30 of the first taxable year
3 to which the election applies shall be 25% of the tax that
4 would have been shown on the return for that taxable year
5 if the taxpayer had not made such election.
6 (d) Exceptions. Notwithstanding the provisions of the
7preceding subsections, the penalty imposed by subsection (a)
8shall not be imposed if the taxpayer was not required to file
9an Illinois income tax return for the preceding taxable year,
10or, for individuals, if the taxpayer had no tax liability for
11the preceding taxable year and such year was a taxable year of
1212 months. The penalty imposed by subsection (a) shall also not
13be imposed on any underpayments of estimated tax due before the
14effective date of this amendatory Act of 1998 which
15underpayments are solely attributable to the change in
16apportionment from subsection (a) to subsection (h) of Section
17304. The provisions of this amendatory Act of 1998 apply to tax
18years ending on or after December 31, 1998.
19 (e) The penalty imposed for underpayment of estimated tax
20by subsection (a) of this Section shall not be imposed to the
21extent that the Director or his or her designate determines,
22pursuant to Section 3-8 of the Uniform Penalty and Interest Act
23that the penalty should not be imposed.
24 (f) Definition of tax. For purposes of subsections (b) and
25(c), the term "tax" means the excess of the tax imposed under
26Article 2 of this Act, over the amounts credited against such

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1tax under Sections 601(b) (3) and (4).
2 (g) Application of Section in case of tax withheld under
3Article 7. For purposes of applying this Section:
4 (1) tax withheld from compensation for the taxable year
5 shall be deemed a payment of estimated tax, and an equal
6 part of such amount shall be deemed paid on each
7 installment date for such taxable year, unless the taxpayer
8 establishes the dates on which all amounts were actually
9 withheld, in which case the amounts so withheld shall be
10 deemed payments of estimated tax on the dates on which such
11 amounts were actually withheld;
12 (2) amounts timely paid by a partnership, Subchapter S
13 corporation, or trust on behalf of a partner, shareholder,
14 or beneficiary pursuant to subsection (f) of Section 502 or
15 Section 709.5 and claimed as a payment of estimated tax
16 shall be deemed a payment of estimated tax made on the last
17 day of the taxable year of the partnership, Subchapter S
18 corporation, or trust for which the income from the
19 withholding is made was computed; and
20 (3) all other amounts pursuant to Article 7 shall be
21 deemed a payment of estimated tax on the date the payment
22 is made to the taxpayer of the amount from which the tax is
23 withheld.
24 (g-5) Amounts withheld under the State Salary and Annuity
25Withholding Act. An individual who has amounts withheld under
26paragraph (10) of Section 4 of the State Salary and Annuity

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1Withholding Act may elect to have those amounts treated as
2payments of estimated tax made on the dates on which those
3amounts are actually withheld.
4 (g-10) Notwithstanding any other provision of law, no
5penalty shall apply with respect to an underpayment of
6estimated tax for the first, second, or third quarter of any
7taxable year beginning on or after January 1, 2017 and
8beginning prior to January 1, 2018 if (i) the underpayment was
9due to the changes made by this amendatory Act of the 100th
10General Assembly, (ii) the payment was otherwise timely made,
11and (iii) the balance due is included with the taxpayer's
12estimated tax payment for the fourth quarter.
13 (i) Short taxable year. The application of this Section to
14taxable years of less than 12 months shall be in accordance
15with regulations prescribed by the Department.
16 The changes in this Section made by Public Act 84-127 shall
17apply to taxable years ending on or after January 1, 1986.
18(Source: P.A. 96-1496, eff. 1-13-11; 97-507, eff. 8-23-11;
1997-636, eff. 6-1-12.)
20 (35 ILCS 5/901) (from Ch. 120, par. 9-901)
21 Sec. 901. Collection authority.
22 (a) In general.
23 The Department shall collect the taxes imposed by this Act.
24The Department shall collect certified past due child support
25amounts under Section 2505-650 of the Department of Revenue Law

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1(20 ILCS 2505/2505-650). Except as provided in subsections (c),
2(e), (f), (g), and (h) of this Section, money collected
3pursuant to subsections (a) and (b) of Section 201 of this Act
4shall be paid into the General Revenue Fund in the State
5treasury; money collected pursuant to subsections (c) and (d)
6of Section 201 of this Act shall be paid into the Personal
7Property Tax Replacement Fund, a special fund in the State
8Treasury; and money collected under Section 2505-650 of the
9Department of Revenue Law (20 ILCS 2505/2505-650) shall be paid
10into the Child Support Enforcement Trust Fund, a special fund
11outside the State Treasury, or to the State Disbursement Unit
12established under Section 10-26 of the Illinois Public Aid
13Code, as directed by the Department of Healthcare and Family
14Services.
15 (b) Local Government Distributive Fund.
16 Beginning August 1, 1969, and continuing through June 30,
171994, the Treasurer shall transfer each month from the General
18Revenue Fund to a special fund in the State treasury, to be
19known as the "Local Government Distributive Fund", an amount
20equal to 1/12 of the net revenue realized from the tax imposed
21by subsections (a) and (b) of Section 201 of this Act during
22the preceding month. Beginning July 1, 1994, and continuing
23through June 30, 1995, the Treasurer shall transfer each month
24from the General Revenue Fund to the Local Government
25Distributive Fund an amount equal to 1/11 of the net revenue
26realized from the tax imposed by subsections (a) and (b) of

SB0009 Engrossed- 172 -LRB100 06347 HLH 16385 b
1Section 201 of this Act during the preceding month. Beginning
2July 1, 1995 and continuing through January 31, 2011, the
3Treasurer shall transfer each month from the General Revenue
4Fund to the Local Government Distributive Fund an amount equal
5to the net of (i) 1/10 of the net revenue realized from the tax
6imposed by subsections (a) and (b) of Section 201 of the
7Illinois Income Tax Act during the preceding month (ii) minus,
8beginning July 1, 2003 and ending June 30, 2004, $6,666,666,
9and beginning July 1, 2004, zero. Beginning February 1, 2011,
10and continuing through January 31, 2015, the Treasurer shall
11transfer each month from the General Revenue Fund to the Local
12Government Distributive Fund an amount equal to the sum of (i)
136% (10% of the ratio of the 3% individual income tax rate prior
14to 2011 to the 5% individual income tax rate after 2010) of the
15net revenue realized from the tax imposed by subsections (a)
16and (b) of Section 201 of this Act upon individuals, trusts,
17and estates during the preceding month and (ii) 6.86% (10% of
18the ratio of the 4.8% corporate income tax rate prior to 2011
19to the 7% corporate income tax rate after 2010) of the net
20revenue realized from the tax imposed by subsections (a) and
21(b) of Section 201 of this Act upon corporations during the
22preceding month. Beginning February 1, 2015 and continuing
23through January 31, 2017 January 31, 2025, the Treasurer shall
24transfer each month from the General Revenue Fund to the Local
25Government Distributive Fund an amount equal to the sum of (i)
268% (10% of the ratio of the 3% individual income tax rate prior

SB0009 Engrossed- 173 -LRB100 06347 HLH 16385 b
1to 2011 to the 3.75% individual income tax rate after 2014) of
2the net revenue realized from the tax imposed by subsections
3(a) and (b) of Section 201 of this Act upon individuals,
4trusts, and estates during the preceding month and (ii) 9.14%
5(10% of the ratio of the 4.8% corporate income tax rate prior
6to 2011 to the 5.25% corporate income tax rate after 2014) of
7the net revenue realized from the tax imposed by subsections
8(a) and (b) of Section 201 of this Act upon corporations during
9the preceding month. Beginning February 1, 2017 February 1,
102025, the Treasurer shall transfer each month from the General
11Revenue Fund to the Local Government Distributive Fund an
12amount equal to the sum of (i) 6.06% 9.23% (10% of the ratio of
13the 3% individual income tax rate prior to 2011 to the 4.95%
143.25% individual income tax rate beginning in 2017 after 2024)
15of the net revenue realized from the tax imposed by subsections
16(a) and (b) of Section 201 of this Act upon individuals,
17trusts, and estates during the preceding month and (ii) 6.86%
18(10% of the ratio of the 4.8% corporate income tax rate prior
19to 2011 to the 7% corporate income tax rate beginning in 2017)
2010% of the net revenue realized from the tax imposed by
21subsections (a) and (b) of Section 201 of this Act upon
22corporations during the preceding month. Net revenue realized
23for a month shall be defined as the revenue from the tax
24imposed by subsections (a) and (b) of Section 201 of this Act
25which is deposited in the General Revenue Fund, the Education
26Assistance Fund, the Income Tax Surcharge Local Government

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1Distributive Fund, the Fund for the Advancement of Education,
2and the Commitment to Human Services Fund during the month
3minus the amount paid out of the General Revenue Fund in State
4warrants during that same month as refunds to taxpayers for
5overpayment of liability under the tax imposed by subsections
6(a) and (b) of Section 201 of this Act.
7 Beginning on August 26, 2014 (the effective date of Public
8Act 98-1052), the Comptroller shall perform the transfers
9required by this subsection (b) no later than 60 days after he
10or she receives the certification from the Treasurer as
11provided in Section 1 of the State Revenue Sharing Act.
12 (c) Deposits Into Income Tax Refund Fund.
13 (1) Beginning on January 1, 1989 and thereafter, the
14 Department shall deposit a percentage of the amounts
15 collected pursuant to subsections (a) and (b)(1), (2), and
16 (3), of Section 201 of this Act into a fund in the State
17 treasury known as the Income Tax Refund Fund. The
18 Department shall deposit 6% of such amounts during the
19 period beginning January 1, 1989 and ending on June 30,
20 1989. Beginning with State fiscal year 1990 and for each
21 fiscal year thereafter, the percentage deposited into the
22 Income Tax Refund Fund during a fiscal year shall be the
23 Annual Percentage. For fiscal years 1999 through 2001, the
24 Annual Percentage shall be 7.1%. For fiscal year 2003, the
25 Annual Percentage shall be 8%. For fiscal year 2004, the
26 Annual Percentage shall be 11.7%. Upon the effective date

SB0009 Engrossed- 175 -LRB100 06347 HLH 16385 b
1 of this amendatory Act of the 93rd General Assembly, the
2 Annual Percentage shall be 10% for fiscal year 2005. For
3 fiscal year 2006, the Annual Percentage shall be 9.75%. For
4 fiscal year 2007, the Annual Percentage shall be 9.75%. For
5 fiscal year 2008, the Annual Percentage shall be 7.75%. For
6 fiscal year 2009, the Annual Percentage shall be 9.75%. For
7 fiscal year 2010, the Annual Percentage shall be 9.75%. For
8 fiscal year 2011, the Annual Percentage shall be 8.75%. For
9 fiscal year 2012, the Annual Percentage shall be 8.75%. For
10 fiscal year 2013, the Annual Percentage shall be 9.75%. For
11 fiscal year 2014, the Annual Percentage shall be 9.5%. For
12 fiscal year 2015, the Annual Percentage shall be 10%. For
13 all other fiscal years, the Annual Percentage shall be
14 calculated as a fraction, the numerator of which shall be
15 the amount of refunds approved for payment by the
16 Department during the preceding fiscal year as a result of
17 overpayment of tax liability under subsections (a) and
18 (b)(1), (2), and (3) of Section 201 of this Act plus the
19 amount of such refunds remaining approved but unpaid at the
20 end of the preceding fiscal year, minus the amounts
21 transferred into the Income Tax Refund Fund from the
22 Tobacco Settlement Recovery Fund, and the denominator of
23 which shall be the amounts which will be collected pursuant
24 to subsections (a) and (b)(1), (2), and (3) of Section 201
25 of this Act during the preceding fiscal year; except that
26 in State fiscal year 2002, the Annual Percentage shall in

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1 no event exceed 7.6%. The Director of Revenue shall certify
2 the Annual Percentage to the Comptroller on the last
3 business day of the fiscal year immediately preceding the
4 fiscal year for which it is to be effective.
5 (2) Beginning on January 1, 1989 and thereafter, the
6 Department shall deposit a percentage of the amounts
7 collected pursuant to subsections (a) and (b)(6), (7), and
8 (8), (c) and (d) of Section 201 of this Act into a fund in
9 the State treasury known as the Income Tax Refund Fund. The
10 Department shall deposit 18% of such amounts during the
11 period beginning January 1, 1989 and ending on June 30,
12 1989. Beginning with State fiscal year 1990 and for each
13 fiscal year thereafter, the percentage deposited into the
14 Income Tax Refund Fund during a fiscal year shall be the
15 Annual Percentage. For fiscal years 1999, 2000, and 2001,
16 the Annual Percentage shall be 19%. For fiscal year 2003,
17 the Annual Percentage shall be 27%. For fiscal year 2004,
18 the Annual Percentage shall be 32%. Upon the effective date
19 of this amendatory Act of the 93rd General Assembly, the
20 Annual Percentage shall be 24% for fiscal year 2005. For
21 fiscal year 2006, the Annual Percentage shall be 20%. For
22 fiscal year 2007, the Annual Percentage shall be 17.5%. For
23 fiscal year 2008, the Annual Percentage shall be 15.5%. For
24 fiscal year 2009, the Annual Percentage shall be 17.5%. For
25 fiscal year 2010, the Annual Percentage shall be 17.5%. For
26 fiscal year 2011, the Annual Percentage shall be 17.5%. For

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1 fiscal year 2012, the Annual Percentage shall be 17.5%. For
2 fiscal year 2013, the Annual Percentage shall be 14%. For
3 fiscal year 2014, the Annual Percentage shall be 13.4%. For
4 fiscal year 2015, the Annual Percentage shall be 14%. For
5 all other fiscal years, the Annual Percentage shall be
6 calculated as a fraction, the numerator of which shall be
7 the amount of refunds approved for payment by the
8 Department during the preceding fiscal year as a result of
9 overpayment of tax liability under subsections (a) and
10 (b)(6), (7), and (8), (c) and (d) of Section 201 of this
11 Act plus the amount of such refunds remaining approved but
12 unpaid at the end of the preceding fiscal year, and the
13 denominator of which shall be the amounts which will be
14 collected pursuant to subsections (a) and (b)(6), (7), and
15 (8), (c) and (d) of Section 201 of this Act during the
16 preceding fiscal year; except that in State fiscal year
17 2002, the Annual Percentage shall in no event exceed 23%.
18 The Director of Revenue shall certify the Annual Percentage
19 to the Comptroller on the last business day of the fiscal
20 year immediately preceding the fiscal year for which it is
21 to be effective.
22 (3) The Comptroller shall order transferred and the
23 Treasurer shall transfer from the Tobacco Settlement
24 Recovery Fund to the Income Tax Refund Fund (i) $35,000,000
25 in January, 2001, (ii) $35,000,000 in January, 2002, and
26 (iii) $35,000,000 in January, 2003.

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

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

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1 Director in accordance with the provisions of this Section.
2 (e) Deposits into the Education Assistance Fund and the
3Income Tax Surcharge Local Government Distributive Fund.
4 On July 1, 1991, and thereafter, of the amounts collected
5pursuant to subsections (a) and (b) of Section 201 of this Act,
6minus deposits into the Income Tax Refund Fund, the Department
7shall deposit 7.3% into the Education Assistance Fund in the
8State Treasury. Beginning July 1, 1991, and continuing through
9January 31, 1993, of the amounts collected pursuant to
10subsections (a) and (b) of Section 201 of the Illinois Income
11Tax Act, minus deposits into the Income Tax Refund Fund, the
12Department shall deposit 3.0% into the Income Tax Surcharge
13Local Government Distributive Fund in the State Treasury.
14Beginning February 1, 1993 and continuing through June 30,
151993, of the amounts collected pursuant to subsections (a) and
16(b) of Section 201 of the Illinois Income Tax Act, minus
17deposits into the Income Tax Refund Fund, the Department shall
18deposit 4.4% into the Income Tax Surcharge Local Government
19Distributive Fund in the State Treasury. Beginning July 1,
201993, and continuing through June 30, 1994, of the amounts
21collected under subsections (a) and (b) of Section 201 of this
22Act, minus deposits into the Income Tax Refund Fund, the
23Department shall deposit 1.475% into the Income Tax Surcharge
24Local Government Distributive Fund in the State Treasury.
25 (f) Deposits into the Fund for the Advancement of
26Education. Beginning February 1, 2015, the Department shall

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

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1 (h) Deposits into the Tax Compliance and Administration
2Fund. Beginning on the first day of the first calendar month to
3occur on or after August 26, 2014 (the effective date of Public
4Act 98-1098), each month the Department shall pay into the Tax
5Compliance and Administration Fund, to be used, subject to
6appropriation, to fund additional auditors and compliance
7personnel at the Department, an amount equal to 1/12 of 5% of
8the cash receipts collected during the preceding fiscal year by
9the Audit Bureau of the Department from the tax imposed by
10subsections (a), (b), (c), and (d) of Section 201 of this Act,
11net of deposits into the Income Tax Refund Fund made from those
12cash receipts.
13(Source: P.A. 98-24, eff. 6-19-13; 98-674, eff. 6-30-14;
1498-1052, eff. 8-26-14; 98-1098, eff. 8-26-14; 99-78, eff.
157-20-15.)
16 (35 ILCS 5/1501) (from Ch. 120, par. 15-1501)
17 Sec. 1501. Definitions.
18 (a) In general. When used in this Act, where not otherwise
19distinctly expressed or manifestly incompatible with the
20intent thereof:
21 (1) Business income. The term "business income" means
22 all income that may be treated as apportionable business
23 income under the Constitution of the United States.
24 Business income is net of the deductions allocable thereto.
25 Such term does not include compensation or the deductions

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1 allocable thereto. For each taxable year beginning on or
2 after January 1, 2003, a taxpayer may elect to treat all
3 income other than compensation as business income. This
4 election shall be made in accordance with rules adopted by
5 the Department and, once made, shall be irrevocable.
6 (1.5) Captive real estate investment trust:
7 (A) The term "captive real estate investment
8 trust" means a corporation, trust, or association:
9 (i) that is considered a real estate
10 investment trust for the taxable year under
11 Section 856 of the Internal Revenue Code;
12 (ii) the certificates of beneficial interest
13 or shares of which are not regularly traded on an
14 established securities market; and
15 (iii) of which more than 50% of the voting
16 power or value of the beneficial interest or
17 shares, at any time during the last half of the
18 taxable year, is owned or controlled, directly,
19 indirectly, or constructively, by a single
20 corporation.
21 (B) The term "captive real estate investment
22 trust" does not include:
23 (i) a real estate investment trust of which
24 more than 50% of the voting power or value of the
25 beneficial interest or shares is owned or
26 controlled, directly, indirectly, or

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1 constructively, by:
2 (a) a real estate investment trust, other
3 than a captive real estate investment trust;
4 (b) a person who is exempt from taxation
5 under Section 501 of the Internal Revenue Code,
6 and who is not required to treat income
7 received from the real estate investment trust
8 as unrelated business taxable income under
9 Section 512 of the Internal Revenue Code;
10 (c) a listed Australian property trust, if
11 no more than 50% of the voting power or value
12 of the beneficial interest or shares of that
13 trust, at any time during the last half of the
14 taxable year, is owned or controlled, directly
15 or indirectly, by a single person;
16 (d) an entity organized as a trust,
17 provided a listed Australian property trust
18 described in subparagraph (c) owns or
19 controls, directly or indirectly, or
20 constructively, 75% or more of the voting power
21 or value of the beneficial interests or shares
22 of such entity; or
23 (e) an entity that is organized outside of
24 the laws of the United States and that
25 satisfies all of the following criteria:
26 (1) at least 75% of the entity's total

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1 asset value at the close of its taxable
2 year is represented by real estate assets
3 (as defined in Section 856(c)(5)(B) of the
4 Internal Revenue Code, thereby including
5 shares or certificates of beneficial
6 interest in any real estate investment
7 trust), cash and cash equivalents, and
8 U.S. Government securities;
9 (2) the entity is not subject to tax on
10 amounts that are distributed to its
11 beneficial owners or is exempt from
12 entity-level taxation;
13 (3) the entity distributes at least
14 85% of its taxable income (as computed in
15 the jurisdiction in which it is organized)
16 to the holders of its shares or
17 certificates of beneficial interest on an
18 annual basis;
19 (4) either (i) the shares or
20 beneficial interests of the entity are
21 regularly traded on an established
22 securities market or (ii) not more than 10%
23 of the voting power or value in the entity
24 is held, directly, indirectly, or
25 constructively, by a single entity or
26 individual; and

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1 (5) the entity is organized in a
2 country that has entered into a tax treaty
3 with the United States; or
4 (ii) during its first taxable year for which it
5 elects to be treated as a real estate investment
6 trust under Section 856(c)(1) of the Internal
7 Revenue Code, a real estate investment trust the
8 certificates of beneficial interest or shares of
9 which are not regularly traded on an established
10 securities market, but only if the certificates of
11 beneficial interest or shares of the real estate
12 investment trust are regularly traded on an
13 established securities market prior to the earlier
14 of the due date (including extensions) for filing
15 its return under this Act for that first taxable
16 year or the date it actually files that return.
17 (C) For the purposes of this subsection (1.5), the
18 constructive ownership rules prescribed under Section
19 318(a) of the Internal Revenue Code, as modified by
20 Section 856(d)(5) of the Internal Revenue Code, apply
21 in determining the ownership of stock, assets, or net
22 profits of any person.
23 (D) For the purposes of this item (1.5), for
24 taxable years ending on or after August 16, 2007, the
25 voting power or value of the beneficial interest or
26 shares of a real estate investment trust does not

SB0009 Engrossed- 187 -LRB100 06347 HLH 16385 b
1 include any voting power or value of beneficial
2 interest or shares in a real estate investment trust
3 held directly or indirectly in a segregated asset
4 account by a life insurance company (as described in
5 Section 817 of the Internal Revenue Code) to the extent
6 such voting power or value is for the benefit of
7 entities or persons who are either immune from taxation
8 or exempt from taxation under subtitle A of the
9 Internal Revenue Code.
10 (2) Commercial domicile. The term "commercial
11 domicile" means the principal place from which the trade or
12 business of the taxpayer is directed or managed.
13 (3) Compensation. The term "compensation" means wages,
14 salaries, commissions and any other form of remuneration
15 paid to employees for personal services.
16 (4) Corporation. The term "corporation" includes
17 associations, joint-stock companies, insurance companies
18 and cooperatives. Any entity, including a limited
19 liability company formed under the Illinois Limited
20 Liability Company Act, shall be treated as a corporation if
21 it is so classified for federal income tax purposes.
22 (5) Department. The term "Department" means the
23 Department of Revenue of this State.
24 (6) Director. The term "Director" means the Director of
25 Revenue of this State.
26 (7) Fiduciary. The term "fiduciary" means a guardian,

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1 trustee, executor, administrator, receiver, or any person
2 acting in any fiduciary capacity for any person.
3 (8) Financial organization.
4 (A) The term "financial organization" means any
5 bank, bank holding company, trust company, savings
6 bank, industrial bank, land bank, safe deposit
7 company, private banker, savings and loan association,
8 building and loan association, credit union, currency
9 exchange, cooperative bank, small loan company, sales
10 finance company, investment company, or any person
11 which is owned by a bank or bank holding company. For
12 the purpose of this Section a "person" will include
13 only those persons which a bank holding company may
14 acquire and hold an interest in, directly or
15 indirectly, under the provisions of the Bank Holding
16 Company Act of 1956 (12 U.S.C. 1841, et seq.), except
17 where interests in any person must be disposed of
18 within certain required time limits under the Bank
19 Holding Company Act of 1956.
20 (B) For purposes of subparagraph (A) of this
21 paragraph, the term "bank" includes (i) any entity that
22 is regulated by the Comptroller of the Currency under
23 the National Bank Act, or by the Federal Reserve Board,
24 or by the Federal Deposit Insurance Corporation and
25 (ii) any federally or State chartered bank operating as
26 a credit card bank.

SB0009 Engrossed- 189 -LRB100 06347 HLH 16385 b
1 (C) For purposes of subparagraph (A) of this
2 paragraph, the term "sales finance company" has the
3 meaning provided in the following item (i) or (ii):
4 (i) A person primarily engaged in one or more
5 of the following businesses: the business of
6 purchasing customer receivables, the business of
7 making loans upon the security of customer
8 receivables, the business of making loans for the
9 express purpose of funding purchases of tangible
10 personal property or services by the borrower, or
11 the business of finance leasing. For purposes of
12 this item (i), "customer receivable" means:
13 (a) a retail installment contract or
14 retail charge agreement within the meaning of
15 the Sales Finance Agency Act, the Retail
16 Installment Sales Act, or the Motor Vehicle
17 Retail Installment Sales Act;
18 (b) an installment, charge, credit, or
19 similar contract or agreement arising from the
20 sale of tangible personal property or services
21 in a transaction involving a deferred payment
22 price payable in one or more installments
23 subsequent to the sale; or
24 (c) the outstanding balance of a contract
25 or agreement described in provisions (a) or (b)
26 of this item (i).

SB0009 Engrossed- 190 -LRB100 06347 HLH 16385 b
1 A customer receivable need not provide for
2 payment of interest on deferred payments. A sales
3 finance company may purchase a customer receivable
4 from, or make a loan secured by a customer
5 receivable to, the seller in the original
6 transaction or to a person who purchased the
7 customer receivable directly or indirectly from
8 that seller.
9 (ii) A corporation meeting each of the
10 following criteria:
11 (a) the corporation must be a member of an
12 "affiliated group" within the meaning of
13 Section 1504(a) of the Internal Revenue Code,
14 determined without regard to Section 1504(b)
15 of the Internal Revenue Code;
16 (b) more than 50% of the gross income of
17 the corporation for the taxable year must be
18 interest income derived from qualifying loans.
19 A "qualifying loan" is a loan made to a member
20 of the corporation's affiliated group that
21 originates customer receivables (within the
22 meaning of item (i)) or to whom customer
23 receivables originated by a member of the
24 affiliated group have been transferred, to the
25 extent the average outstanding balance of
26 loans from that corporation to members of its

SB0009 Engrossed- 191 -LRB100 06347 HLH 16385 b
1 affiliated group during the taxable year do not
2 exceed the limitation amount for that
3 corporation. The "limitation amount" for a
4 corporation is the average outstanding
5 balances during the taxable year of customer
6 receivables (within the meaning of item (i))
7 originated by all members of the affiliated
8 group. If the average outstanding balances of
9 the loans made by a corporation to members of
10 its affiliated group exceed the limitation
11 amount, the interest income of that
12 corporation from qualifying loans shall be
13 equal to its interest income from loans to
14 members of its affiliated groups times a
15 fraction equal to the limitation amount
16 divided by the average outstanding balances of
17 the loans made by that corporation to members
18 of its affiliated group;
19 (c) the total of all shareholder's equity
20 (including, without limitation, paid-in
21 capital on common and preferred stock and
22 retained earnings) of the corporation plus the
23 total of all of its loans, advances, and other
24 obligations payable or owed to members of its
25 affiliated group may not exceed 20% of the
26 total assets of the corporation at any time

SB0009 Engrossed- 192 -LRB100 06347 HLH 16385 b
1 during the tax year; and
2 (d) more than 50% of all interest-bearing
3 obligations of the affiliated group payable to
4 persons outside the group determined in
5 accordance with generally accepted accounting
6 principles must be obligations of the
7 corporation.
8 This amendatory Act of the 91st General Assembly is
9 declaratory of existing law.
10 (D) Subparagraphs (B) and (C) of this paragraph are
11 declaratory of existing law and apply retroactively,
12 for all tax years beginning on or before December 31,
13 1996, to all original returns, to all amended returns
14 filed no later than 30 days after the effective date of
15 this amendatory Act of 1996, and to all notices issued
16 on or before the effective date of this amendatory Act
17 of 1996 under subsection (a) of Section 903, subsection
18 (a) of Section 904, subsection (e) of Section 909, or
19 Section 912. A taxpayer that is a "financial
20 organization" that engages in any transaction with an
21 affiliate shall be a "financial organization" for all
22 purposes of this Act.
23 (E) For all tax years beginning on or before
24 December 31, 1996, a taxpayer that falls within the
25 definition of a "financial organization" under
26 subparagraphs (B) or (C) of this paragraph, but who

SB0009 Engrossed- 193 -LRB100 06347 HLH 16385 b
1 does not fall within the definition of a "financial
2 organization" under the Proposed Regulations issued by
3 the Department of Revenue on July 19, 1996, may
4 irrevocably elect to apply the Proposed Regulations
5 for all of those years as though the Proposed
6 Regulations had been lawfully promulgated, adopted,
7 and in effect for all of those years. For purposes of
8 applying subparagraphs (B) or (C) of this paragraph to
9 all of those years, the election allowed by this
10 subparagraph applies only to the taxpayer making the
11 election and to those members of the taxpayer's unitary
12 business group who are ordinarily required to
13 apportion business income under the same subsection of
14 Section 304 of this Act as the taxpayer making the
15 election. No election allowed by this subparagraph
16 shall be made under a claim filed under subsection (d)
17 of Section 909 more than 30 days after the effective
18 date of this amendatory Act of 1996.
19 (F) Finance Leases. For purposes of this
20 subsection, a finance lease shall be treated as a loan
21 or other extension of credit, rather than as a lease,
22 regardless of how the transaction is characterized for
23 any other purpose, including the purposes of any
24 regulatory agency to which the lessor is subject. A
25 finance lease is any transaction in the form of a lease
26 in which the lessee is treated as the owner of the

SB0009 Engrossed- 194 -LRB100 06347 HLH 16385 b
1 leased asset entitled to any deduction for
2 depreciation allowed under Section 167 of the Internal
3 Revenue Code.
4 (9) Fiscal year. The term "fiscal year" means an
5 accounting period of 12 months ending on the last day of
6 any month other than December.
7 (9.5) Fixed place of business. The term "fixed place of
8 business" has the same meaning as that term is given in
9 Section 864 of the Internal Revenue Code and the related
10 Treasury regulations.
11 (10) Includes and including. The terms "includes" and
12 "including" when used in a definition contained in this Act
13 shall not be deemed to exclude other things otherwise
14 within the meaning of the term defined.
15 (11) Internal Revenue Code. The term "Internal Revenue
16 Code" means the United States Internal Revenue Code of 1954
17 or any successor law or laws relating to federal income
18 taxes in effect for the taxable year.
19 (11.5) Investment partnership.
20 (A) The term "investment partnership" means any
21 entity that is treated as a partnership for federal
22 income tax purposes that meets the following
23 requirements:
24 (i) no less than 90% of the partnership's cost
25 of its total assets consists of qualifying
26 investment securities, deposits at banks or other

SB0009 Engrossed- 195 -LRB100 06347 HLH 16385 b
1 financial institutions, and office space and
2 equipment reasonably necessary to carry on its
3 activities as an investment partnership;
4 (ii) no less than 90% of its gross income
5 consists of interest, dividends, and gains from
6 the sale or exchange of qualifying investment
7 securities; and
8 (iii) the partnership is not a dealer in
9 qualifying investment securities.
10 (B) For purposes of this paragraph (11.5), the term
11 "qualifying investment securities" includes all of the
12 following:
13 (i) common stock, including preferred or debt
14 securities convertible into common stock, and
15 preferred stock;
16 (ii) bonds, debentures, and other debt
17 securities;
18 (iii) foreign and domestic currency deposits
19 secured by federal, state, or local governmental
20 agencies;
21 (iv) mortgage or asset-backed securities
22 secured by federal, state, or local governmental
23 agencies;
24 (v) repurchase agreements and loan
25 participations;
26 (vi) foreign currency exchange contracts and

SB0009 Engrossed- 196 -LRB100 06347 HLH 16385 b
1 forward and futures contracts on foreign
2 currencies;
3 (vii) stock and bond index securities and
4 futures contracts and other similar financial
5 securities and futures contracts on those
6 securities;
7 (viii) options for the purchase or sale of any
8 of the securities, currencies, contracts, or
9 financial instruments described in items (i) to
10 (vii), inclusive;
11 (ix) regulated futures contracts;
12 (x) commodities (not described in Section
13 1221(a)(1) of the Internal Revenue Code) or
14 futures, forwards, and options with respect to
15 such commodities, provided, however, that any item
16 of a physical commodity to which title is actually
17 acquired in the partnership's capacity as a dealer
18 in such commodity shall not be a qualifying
19 investment security;
20 (xi) derivatives; and
21 (xii) a partnership interest in another
22 partnership that is an investment partnership.
23 (12) Mathematical error. The term "mathematical error"
24 includes the following types of errors, omissions, or
25 defects in a return filed by a taxpayer which prevents
26 acceptance of the return as filed for processing:

SB0009 Engrossed- 197 -LRB100 06347 HLH 16385 b
1 (A) arithmetic errors or incorrect computations on
2 the return or supporting schedules;
3 (B) entries on the wrong lines;
4 (C) omission of required supporting forms or
5 schedules or the omission of the information in whole
6 or in part called for thereon; and
7 (D) an attempt to claim, exclude, deduct, or
8 improperly report, in a manner directly contrary to the
9 provisions of the Act and regulations thereunder any
10 item of income, exemption, deduction, or credit.
11 (13) Nonbusiness income. The term "nonbusiness income"
12 means all income other than business income or
13 compensation.
14 (14) Nonresident. The term "nonresident" means a
15 person who is not a resident.
16 (15) Paid, incurred and accrued. The terms "paid",
17 "incurred" and "accrued" shall be construed according to
18 the method of accounting upon the basis of which the
19 person's base income is computed under this Act.
20 (16) Partnership and partner. The term "partnership"
21 includes a syndicate, group, pool, joint venture or other
22 unincorporated organization, through or by means of which
23 any business, financial operation, or venture is carried
24 on, and which is not, within the meaning of this Act, a
25 trust or estate or a corporation; and the term "partner"
26 includes a member in such syndicate, group, pool, joint

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1 venture or organization.
2 The term "partnership" includes any entity, including
3 a limited liability company formed under the Illinois
4 Limited Liability Company Act, classified as a partnership
5 for federal income tax purposes.
6 The term "partnership" does not include a syndicate,
7 group, pool, joint venture, or other unincorporated
8 organization established for the sole purpose of playing
9 the Illinois State Lottery.
10 (17) Part-year resident. The term "part-year resident"
11 means an individual who became a resident during the
12 taxable year or ceased to be a resident during the taxable
13 year. Under Section 1501(a)(20)(A)(i) residence commences
14 with presence in this State for other than a temporary or
15 transitory purpose and ceases with absence from this State
16 for other than a temporary or transitory purpose. Under
17 Section 1501(a)(20)(A)(ii) residence commences with the
18 establishment of domicile in this State and ceases with the
19 establishment of domicile in another State.
20 (18) Person. The term "person" shall be construed to
21 mean and include an individual, a trust, estate,
22 partnership, association, firm, company, corporation,
23 limited liability company, or fiduciary. For purposes of
24 Section 1301 and 1302 of this Act, a "person" means (i) an
25 individual, (ii) a corporation, (iii) an officer, agent, or
26 employee of a corporation, (iv) a member, agent or employee

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1 of a partnership, or (v) a member, manager, employee,
2 officer, director, or agent of a limited liability company
3 who in such capacity commits an offense specified in
4 Section 1301 and 1302.
5 (18A) Records. The term "records" includes all data
6 maintained by the taxpayer, whether on paper, microfilm,
7 microfiche, or any type of machine-sensible data
8 compilation.
9 (19) Regulations. The term "regulations" includes
10 rules promulgated and forms prescribed by the Department.
11 (20) Resident. The term "resident" means:
12 (A) an individual (i) who is in this State for
13 other than a temporary or transitory purpose during the
14 taxable year; or (ii) who is domiciled in this State
15 but is absent from the State for a temporary or
16 transitory purpose during the taxable year;
17 (B) The estate of a decedent who at his or her
18 death was domiciled in this State;
19 (C) A trust created by a will of a decedent who at
20 his death was domiciled in this State; and
21 (D) An irrevocable trust, the grantor of which was
22 domiciled in this State at the time such trust became
23 irrevocable. For purpose of this subparagraph, a trust
24 shall be considered irrevocable to the extent that the
25 grantor is not treated as the owner thereof under
26 Sections 671 through 678 of the Internal Revenue Code.

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1 (21) Sales. The term "sales" means all gross receipts
2 of the taxpayer not allocated under Sections 301, 302 and
3 303.
4 (22) State. The term "state" when applied to a
5 jurisdiction other than this State means any state of the
6 United States, the District of Columbia, the Commonwealth
7 of Puerto Rico, any Territory or Possession of the United
8 States, and any foreign country, or any political
9 subdivision of any of the foregoing. For purposes of the
10 foreign tax credit under Section 601, the term "state"
11 means any state of the United States, the District of
12 Columbia, the Commonwealth of Puerto Rico, and any
13 territory or possession of the United States, or any
14 political subdivision of any of the foregoing, effective
15 for tax years ending on or after December 31, 1989.
16 (23) Taxable year. The term "taxable year" means the
17 calendar year, or the fiscal year ending during such
18 calendar year, upon the basis of which the base income is
19 computed under this Act. "Taxable year" means, in the case
20 of a return made for a fractional part of a year under the
21 provisions of this Act, the period for which such return is
22 made.
23 (24) Taxpayer. The term "taxpayer" means any person
24 subject to the tax imposed by this Act.
25 (25) International banking facility. The term
26 international banking facility shall have the same meaning

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1 as is set forth in the Illinois Banking Act or as is set
2 forth in the laws of the United States or regulations of
3 the Board of Governors of the Federal Reserve System.
4 (26) Income Tax Return Preparer.
5 (A) The term "income tax return preparer" means any
6 person who prepares for compensation, or who employs
7 one or more persons to prepare for compensation, any
8 return of tax imposed by this Act or any claim for
9 refund of tax imposed by this Act. The preparation of a
10 substantial portion of a return or claim for refund
11 shall be treated as the preparation of that return or
12 claim for refund.
13 (B) A person is not an income tax return preparer
14 if all he or she does is
15 (i) furnish typing, reproducing, or other
16 mechanical assistance;
17 (ii) prepare returns or claims for refunds for
18 the employer by whom he or she is regularly and
19 continuously employed;
20 (iii) prepare as a fiduciary returns or claims
21 for refunds for any person; or
22 (iv) prepare claims for refunds for a taxpayer
23 in response to any notice of deficiency issued to
24 that taxpayer or in response to any waiver of
25 restriction after the commencement of an audit of
26 that taxpayer or of another taxpayer if a

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1 determination in the audit of the other taxpayer
2 directly or indirectly affects the tax liability
3 of the taxpayer whose claims he or she is
4 preparing.
5 (27) Unitary business group.
6 (A) The term "unitary business group" means a group
7 of persons related through common ownership whose
8 business activities are integrated with, dependent
9 upon and contribute to each other. The group will not
10 include those members whose business activity outside
11 the United States is 80% or more of any such member's
12 total business activity; for purposes of this
13 paragraph and clause (a)(3)(B)(ii) of Section 304,
14 business activity within the United States shall be
15 measured by means of the factors ordinarily applicable
16 under subsections (a), (b), (c), (d), or (h) of Section
17 304 except that, in the case of members ordinarily
18 required to apportion business income by means of the 3
19 factor formula of property, payroll and sales
20 specified in subsection (a) of Section 304, including
21 the formula as weighted in subsection (h) of Section
22 304, such members shall not use the sales factor in the
23 computation and the results of the property and payroll
24 factor computations of subsection (a) of Section 304
25 shall be divided by 2 (by one if either the property or
26 payroll factor has a denominator of zero). The

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1 computation required by the preceding sentence shall,
2 in each case, involve the division of the member's
3 property, payroll, or revenue miles in the United
4 States, insurance premiums on property or risk in the
5 United States, or financial organization business
6 income from sources within the United States, as the
7 case may be, by the respective worldwide figures for
8 such items. Common ownership in the case of
9 corporations is the direct or indirect control or
10 ownership of more than 50% of the outstanding voting
11 stock of the persons carrying on unitary business
12 activity. Unitary business activity can ordinarily be
13 illustrated where the activities of the members are:
14 (1) in the same general line (such as manufacturing,
15 wholesaling, retailing of tangible personal property,
16 insurance, transportation or finance); or (2) are
17 steps in a vertically structured enterprise or process
18 (such as the steps involved in the production of
19 natural resources, which might include exploration,
20 mining, refining, and marketing); and, in either
21 instance, the members are functionally integrated
22 through the exercise of strong centralized management
23 (where, for example, authority over such matters as
24 purchasing, financing, tax compliance, product line,
25 personnel, marketing and capital investment is not
26 left to each member).

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1 (B) In no event, for taxable years beginning prior
2 to January 1, 2017, and excepting any unitary business
3 group that apportions business income under Section
4 304(b) of this Act and is subject to the insurance
5 premium tax imposed under the Illinois Insurance Code,
6 shall any unitary business group include members which
7 are ordinarily required to apportion business income
8 under different subsections of Section 304 except that
9 for tax years ending on or after December 31, 1987 this
10 prohibition shall not apply to a holding company that
11 would otherwise be a member of a unitary business group
12 with taxpayers that apportion business income under
13 any of subsections (b), (c), (c-1), or (d) of Section
14 304. If a unitary business group would, but for the
15 preceding sentence, include members that are
16 ordinarily required to apportion business income under
17 different subsections of Section 304, then for each
18 subsection of Section 304 for which there are two or
19 more members, there shall be a separate unitary
20 business group composed of such members. For purposes
21 of the preceding two sentences, a member is "ordinarily
22 required to apportion business income" under a
23 particular subsection of Section 304 if it would be
24 required to use the apportionment method prescribed by
25 such subsection except for the fact that it derives
26 business income solely from Illinois. As used in this

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1 paragraph, the phrase "United States" means only the 50
2 states and the District of Columbia and , but does not
3 include any territory or possession of the United
4 States, but, for taxable years ending on or after
5 December 31, 2017, does include or any area over which
6 the United States has asserted jurisdiction or claimed
7 exclusive rights with respect to the exploration for or
8 exploitation of natural resources.
9 (C) Holding companies.
10 (i) For purposes of this subparagraph, a
11 "holding company" is a corporation (other than a
12 corporation that is a financial organization under
13 paragraph (8) of this subsection (a) of Section
14 1501 because it is a bank holding company under the
15 provisions of the Bank Holding Company Act of 1956
16 (12 U.S.C. 1841, et seq.) or because it is owned by
17 a bank or a bank holding company) that owns a
18 controlling interest in one or more other
19 taxpayers ("controlled taxpayers"); that, during
20 the period that includes the taxable year and the 2
21 immediately preceding taxable years or, if the
22 corporation was formed during the current or
23 immediately preceding taxable year, the taxable
24 years in which the corporation has been in
25 existence, derived substantially all its gross
26 income from dividends, interest, rents, royalties,

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1 fees or other charges received from controlled
2 taxpayers for the provision of services, and gains
3 on the sale or other disposition of interests in
4 controlled taxpayers or in property leased or
5 licensed to controlled taxpayers or used by the
6 taxpayer in providing services to controlled
7 taxpayers; and that incurs no substantial expenses
8 other than expenses (including interest and other
9 costs of borrowing) incurred in connection with
10 the acquisition and holding of interests in
11 controlled taxpayers and in the provision of
12 services to controlled taxpayers or in the leasing
13 or licensing of property to controlled taxpayers.
14 (ii) The income of a holding company which is a
15 member of more than one unitary business group
16 shall be included in each unitary business group of
17 which it is a member on a pro rata basis, by
18 including in each unitary business group that
19 portion of the base income of the holding company
20 that bears the same proportion to the total base
21 income of the holding company as the gross receipts
22 of the unitary business group bears to the combined
23 gross receipts of all unitary business groups (in
24 both cases without regard to the holding company)
25 or on any other reasonable basis, consistently
26 applied.

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1 (iii) A holding company shall apportion its
2 business income under the subsection of Section
3 304 used by the other members of its unitary
4 business group. The apportionment factors of a
5 holding company which would be a member of more
6 than one unitary business group shall be included
7 with the apportionment factors of each unitary
8 business group of which it is a member on a pro
9 rata basis using the same method used in clause
10 (ii).
11 (iv) The provisions of this subparagraph (C)
12 are intended to clarify existing law.
13 (D) If including the base income and factors of a
14 holding company in more than one unitary business group
15 under subparagraph (C) does not fairly reflect the
16 degree of integration between the holding company and
17 one or more of the unitary business groups, the
18 dependence of the holding company and one or more of
19 the unitary business groups upon each other, or the
20 contributions between the holding company and one or
21 more of the unitary business groups, the holding
22 company may petition the Director, under the
23 procedures provided under Section 304(f), for
24 permission to include all base income and factors of
25 the holding company only with members of a unitary
26 business group apportioning their business income

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1 under one subsection of subsections (a), (b), (c), or
2 (d) of Section 304. If the petition is granted, the
3 holding company shall be included in a unitary business
4 group only with persons apportioning their business
5 income under the selected subsection of Section 304
6 until the Director grants a petition of the holding
7 company either to be included in more than one unitary
8 business group under subparagraph (C) or to include its
9 base income and factors only with members of a unitary
10 business group apportioning their business income
11 under a different subsection of Section 304.
12 (E) If the unitary business group members'
13 accounting periods differ, the common parent's
14 accounting period or, if there is no common parent, the
15 accounting period of the member that is expected to
16 have, on a recurring basis, the greatest Illinois
17 income tax liability must be used to determine whether
18 to use the apportionment method provided in subsection
19 (a) or subsection (h) of Section 304. The prohibition
20 against membership in a unitary business group for
21 taxpayers ordinarily required to apportion income
22 under different subsections of Section 304 does not
23 apply to taxpayers required to apportion income under
24 subsection (a) and subsection (h) of Section 304. The
25 provisions of this amendatory Act of 1998 apply to tax
26 years ending on or after December 31, 1998.

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1 (28) Subchapter S corporation. The term "Subchapter S
2 corporation" means a corporation for which there is in
3 effect an election under Section 1362 of the Internal
4 Revenue Code, or for which there is a federal election to
5 opt out of the provisions of the Subchapter S Revision Act
6 of 1982 and have applied instead the prior federal
7 Subchapter S rules as in effect on July 1, 1982.
8 (30) Foreign person. The term "foreign person" means
9 any person who is a nonresident alien individual and any
10 nonindividual entity, regardless of where created or
11 organized, whose business activity outside the United
12 States is 80% or more of the entity's total business
13 activity.
14 (b) Other definitions.
15 (1) Words denoting number, gender, and so forth, when
16 used in this Act, where not otherwise distinctly expressed
17 or manifestly incompatible with the intent thereof:
18 (A) Words importing the singular include and apply
19 to several persons, parties or things;
20 (B) Words importing the plural include the
21 singular; and
22 (C) Words importing the masculine gender include
23 the feminine as well.
24 (2) "Company" or "association" as including successors
25 and assigns. The word "company" or "association", when used

SB0009 Engrossed- 210 -LRB100 06347 HLH 16385 b
1 in reference to a corporation, shall be deemed to embrace
2 the words "successors and assigns of such company or
3 association", and in like manner as if these last-named
4 words, or words of similar import, were expressed.
5 (3) Other terms. Any term used in any Section of this
6 Act with respect to the application of, or in connection
7 with, the provisions of any other Section of this Act shall
8 have the same meaning as in such other Section.
9(Source: P.A. 99-213, eff. 7-31-15.)
10 Section 30-15. The Film Production Services Tax Credit Act
11of 2008 is amended by changing Section 42 as follows:
12 (35 ILCS 16/42)
13 Sec. 42. Sunset of credits. The application of credits
14awarded pursuant to this Act shall be limited by a reasonable
15and appropriate sunset date. A taxpayer shall not be entitled
16to take a credit awarded pursuant to this Act for tax years
17beginning on or after January 1, 2027 10 years after the
18effective date of this amendatory Act of the 97th General
19Assembly. After the initial 10-year sunset, the General
20Assembly may extend the sunset date by 5-year intervals.
21(Source: P.A. 97-2, eff. 5-6-11; 97-3, eff. 5-6-11.)
22 Section 30-20. The Use Tax Act is amended by changing
23Sections 2, 3, 3-5, 3-10, 3-10.5, 3-45, 3-50, 3-55, 3-65, 3-75,

SB0009 Engrossed- 211 -LRB100 06347 HLH 16385 b
13a, 4, 5, 6, 7, 8, 9, 10, and 11 and by adding Section 2a-2 as
2follows:
3 (35 ILCS 105/2) (from Ch. 120, par. 439.2)
4 Sec. 2. Definitions.
5 "Use" means the exercise by any person of any right or
6power over tangible personal property incident to the ownership
7of that property or the exercise by any person of any right or
8power over, or the enjoyment of, a taxable service, except that
9it does not include the sale of such property or taxable
10service in any form as tangible personal property or a taxable
11service in the regular course of business to the extent that
12such property or taxable service is not first subjected to a
13use for which it was purchased, and does not include the use of
14such property or taxable service by its owner for demonstration
15purposes: Provided that the property or service purchased is
16deemed to be purchased for the purpose of resale, despite first
17being used, to the extent to which it is resold as an
18ingredient of an intentionally produced product or by-product
19of manufacturing or is otherwise transferred to the purchaser
20of tangible personal property or taxable service. "Use" does
21not mean the demonstration use or interim use of tangible
22personal property or a taxable service by a retailer before he
23sells that tangible personal property or taxable service. For
24watercraft or aircraft, if the period of demonstration use or
25interim use by the retailer exceeds 18 months, the retailer

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1shall pay on the retailers' original cost price the tax imposed
2by this Act, and no credit for that tax is permitted if the
3watercraft or aircraft is subsequently sold by the retailer.
4"Use" does not mean the physical incorporation of tangible
5personal property, to the extent not first subjected to a use
6for which it was purchased, as an ingredient or constituent,
7into other tangible personal property (a) which is sold in the
8regular course of business or (b) which the person
9incorporating such ingredient or constituent therein has
10undertaken at the time of such purchase to cause to be
11transported in interstate commerce to destinations outside the
12State of Illinois: Provided that the property purchased is
13deemed to be purchased for the purpose of resale, despite first
14being used, to the extent to which it is resold as an
15ingredient of an intentionally produced product or by-product
16of manufacturing.
17 "Watercraft" means a Class 2, Class 3, or Class 4
18watercraft as defined in Section 3-2 of the Boat Registration
19and Safety Act, a personal watercraft, or any boat equipped
20with an inboard motor.
21 "Purchase at retail" means the acquisition of the ownership
22of or title to tangible personal property or the acquisition of
23a taxable service through a sale at retail.
24 "Purchaser" means anyone who, through a sale at retail,
25acquires a taxable service or the ownership of tangible
26personal property for a valuable consideration.

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1 "Sale at retail" means any transfer of the ownership of or
2title to tangible personal property to a purchaser or the
3performance of a taxable service for a purchaser, for the
4purpose of use, and not for the purpose of resale in any form
5as tangible personal property or taxable service to the extent
6not first subjected to a use for which it was purchased, for a
7valuable consideration: Provided that the property purchased
8is deemed to be purchased for the purpose of resale, despite
9first being used, to the extent to which it is resold as an
10ingredient of an intentionally produced product or by-product
11of manufacturing. For this purpose, slag produced as an
12incident to manufacturing pig iron or steel and sold is
13considered to be an intentionally produced by-product of
14manufacturing. "Sale at retail" includes any such transfer made
15for resale unless made in compliance with Section 2c of the
16Retailers' Occupation Tax Act, as incorporated by reference
17into Section 12 of this Act. Transactions whereby the
18possession of the property is transferred but the seller
19retains the title as security for payment of the selling price
20are sales.
21 "Sale at retail" shall also be construed to include any
22Illinois florist's sales transaction in which the purchase
23order is received in Illinois by a florist and the sale is for
24use or consumption, but the Illinois florist has a florist in
25another state deliver the property to the purchaser or the
26purchaser's donee in such other state.

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1 Nonreusable tangible personal property that is used by
2persons engaged in the business of operating a restaurant,
3cafeteria, or drive-in is a sale for resale when it is
4transferred to customers in the ordinary course of business as
5part of the sale of food or beverages and is used to deliver,
6package, or consume food or beverages, regardless of where
7consumption of the food or beverages occurs. Examples of those
8items include, but are not limited to nonreusable, paper and
9plastic cups, plates, baskets, boxes, sleeves, buckets or other
10containers, utensils, straws, placemats, napkins, doggie bags,
11and wrapping or packaging materials that are transferred to
12customers as part of the sale of food or beverages in the
13ordinary course of business.
14 The purchase, employment and transfer of such tangible
15personal property as newsprint and ink for the primary purpose
16of conveying news (with or without other information) is not a
17purchase, use or sale of tangible personal property.
18 "Selling price" means the consideration for a sale valued
19in money whether received in money or otherwise, including
20cash, credits, property other than as hereinafter provided, and
21services, but not including the value of or credit given for
22traded-in tangible personal property where the item that is
23traded-in is of like kind and character as that which is being
24sold, and shall be determined without any deduction on account
25of the cost of the property sold, the cost of materials used,
26labor or service cost or any other expense whatsoever, but does

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1not include interest or finance charges which appear as
2separate items on the bill of sale or sales contract nor
3charges that are added to prices by sellers on account of the
4seller's tax liability under the "Retailers' Occupation Tax
5Act", or on account of the seller's duty to collect, from the
6purchaser, the tax that is imposed by this Act, or, except as
7otherwise provided with respect to any cigarette tax imposed by
8a home rule unit, on account of the seller's tax liability
9under any local occupation tax administered by the Department,
10or, except as otherwise provided with respect to any cigarette
11tax imposed by a home rule unit on account of the seller's duty
12to collect, from the purchasers, the tax that is imposed under
13any local use tax administered by the Department. Effective
14December 1, 1985, "selling price" shall include charges that
15are added to prices by sellers on account of the seller's tax
16liability under the Cigarette Tax Act, on account of the
17seller's duty to collect, from the purchaser, the tax imposed
18under the Cigarette Use Tax Act, and on account of the seller's
19duty to collect, from the purchaser, any cigarette tax imposed
20by a home rule unit.
21 Notwithstanding any law to the contrary, for any motor
22vehicle, as defined in Section 1-146 of the Vehicle Code, that
23is sold on or after January 1, 2015 for the purpose of leasing
24the vehicle for a defined period that is longer than one year
25and (1) is a motor vehicle of the second division that: (A) is
26a self-contained motor vehicle designed or permanently

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1converted to provide living quarters for recreational,
2camping, or travel use, with direct walk through access to the
3living quarters from the driver's seat; (B) is of the van
4configuration designed for the transportation of not less than
57 nor more than 16 passengers; or (C) has a gross vehicle
6weight rating of 8,000 pounds or less or (2) is a motor vehicle
7of the first division, "selling price" or "amount of sale"
8means the consideration received by the lessor pursuant to the
9lease contract, including amounts due at lease signing and all
10monthly or other regular payments charged over the term of the
11lease. Also included in the selling price is any amount
12received by the lessor from the lessee for the leased vehicle
13that is not calculated at the time the lease is executed,
14including, but not limited to, excess mileage charges and
15charges for excess wear and tear. For sales that occur in
16Illinois, with respect to any amount received by the lessor
17from the lessee for the leased vehicle that is not calculated
18at the time the lease is executed, the lessor who purchased the
19motor vehicle does not incur the tax imposed by the Use Tax Act
20on those amounts, and the retailer who makes the retail sale of
21the motor vehicle to the lessor is not required to collect the
22tax imposed by this Act or to pay the tax imposed by the
23Retailers' Occupation Tax Act on those amounts. However, the
24lessor who purchased the motor vehicle assumes the liability
25for reporting and paying the tax on those amounts directly to
26the Department in the same form (Illinois Retailers' Occupation

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1Tax, and local retailers' occupation taxes, if applicable) in
2which the retailer would have reported and paid such tax if the
3retailer had accounted for the tax to the Department. For
4amounts received by the lessor from the lessee that are not
5calculated at the time the lease is executed, the lessor must
6file the return and pay the tax to the Department by the due
7date otherwise required by this Act for returns other than
8transaction returns. If the retailer is entitled under this Act
9to a discount for collecting and remitting the tax imposed
10under this Act to the Department with respect to the sale of
11the motor vehicle to the lessor, then the right to the discount
12provided in this Act shall be transferred to the lessor with
13respect to the tax paid by the lessor for any amount received
14by the lessor from the lessee for the leased vehicle that is
15not calculated at the time the lease is executed; provided that
16the discount is only allowed if the return is timely filed and
17for amounts timely paid. The "selling price" of a motor vehicle
18that is sold on or after January 1, 2015 for the purpose of
19leasing for a defined period of longer than one year shall not
20be reduced by the value of or credit given for traded-in
21tangible personal property owned by the lessor, nor shall it be
22reduced by the value of or credit given for traded-in tangible
23personal property owned by the lessee, regardless of whether
24the trade-in value thereof is assigned by the lessee to the
25lessor. In the case of a motor vehicle that is sold for the
26purpose of leasing for a defined period of longer than one

SB0009 Engrossed- 218 -LRB100 06347 HLH 16385 b
1year, the sale occurs at the time of the delivery of the
2vehicle, regardless of the due date of any lease payments. A
3lessor who incurs a Retailers' Occupation Tax liability on the
4sale of a motor vehicle coming off lease may not take a credit
5against that liability for the Use Tax the lessor paid upon the
6purchase of the motor vehicle (or for any tax the lessor paid
7with respect to any amount received by the lessor from the
8lessee for the leased vehicle that was not calculated at the
9time the lease was executed) if the selling price of the motor
10vehicle at the time of purchase was calculated using the
11definition of "selling price" as defined in this paragraph.
12Notwithstanding any other provision of this Act to the
13contrary, lessors shall file all returns and make all payments
14required under this paragraph to the Department by electronic
15means in the manner and form as required by the Department.
16This paragraph does not apply to leases of motor vehicles for
17which, at the time the lease is entered into, the term of the
18lease is not a defined period, including leases with a defined
19initial period with the option to continue the lease on a
20month-to-month or other basis beyond the initial defined
21period.
22 The phrase "like kind and character" shall be liberally
23construed (including but not limited to any form of motor
24vehicle for any form of motor vehicle, or any kind of farm or
25agricultural implement for any other kind of farm or
26agricultural implement), while not including a kind of item

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1which, if sold at retail by that retailer, would be exempt from
2retailers' occupation tax and use tax as an isolated or
3occasional sale.
4 "Department" means the Department of Revenue.
5 "Person" means any natural individual, firm, partnership,
6association, joint stock company, joint adventure, public or
7private corporation, limited liability company, or a receiver,
8executor, trustee, guardian or other representative appointed
9by order of any court.
10 "Retailer" means and includes every person engaged in the
11business of making sales at retail as defined in this Section.
12 A person who holds himself or herself out as being engaged
13(or who habitually engages) in selling tangible personal
14property or taxable services at retail is a retailer hereunder
15with respect to such sales (and not primarily in a nontaxable
16service occupation) notwithstanding the fact that such person
17designs and produces such tangible personal property or taxable
18service on special order for the purchaser and in such a way as
19to render the property or service of value only to such
20purchaser, if such tangible personal property or taxable
21service so produced on special order serves substantially the
22same function as stock or standard items of tangible personal
23property or taxable service that are sold at retail.
24 A person whose activities are organized and conducted
25primarily as a not-for-profit service enterprise, and who
26engages in selling tangible personal property or taxable

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1services at retail (whether to the public or merely to members
2and their guests) is a retailer with respect to such
3transactions, excepting only a person organized and operated
4exclusively for charitable, religious or educational purposes
5either (1), to the extent of sales by such person to its
6members, students, patients or inmates of tangible personal
7property to be used primarily for the purposes of such person,
8or (2), to the extent of sales by such person of tangible
9personal property or taxable services which are is not sold or
10offered for sale by persons organized for profit. The selling
11of school books and school supplies by schools at retail to
12students is not "primarily for the purposes of" the school
13which does such selling. This paragraph does not apply to nor
14subject to taxation occasional dinners, social or similar
15activities of a person organized and operated exclusively for
16charitable, religious or educational purposes, whether or not
17such activities are open to the public.
18 A person who is the recipient of a grant or contract under
19Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
20serves meals to participants in the federal Nutrition Program
21for the Elderly in return for contributions established in
22amount by the individual participant pursuant to a schedule of
23suggested fees as provided for in the federal Act is not a
24retailer under this Act with respect to such transactions.
25 Persons who engage in the business of transferring tangible
26personal property or taxable services upon the redemption of

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1trading stamps are retailers hereunder when engaged in such
2business.
3 The isolated or occasional sale of tangible personal
4property or taxable services at retail by a person who does not
5hold himself out as being engaged (or who does not habitually
6engage) in selling such tangible personal property or taxable
7services at retail or a sale through a bulk vending machine
8does not make such person a retailer hereunder. However, any
9person who is engaged in a business which is not subject to the
10tax imposed by the "Retailers' Occupation Tax Act" because of
11involving the sale of or a contract to sell real estate or a
12construction contract to improve real estate, but who, in the
13course of conducting such business, transfers tangible
14personal property to users or consumers in the finished form in
15which it was purchased, and which does not become real estate,
16under any provision of a construction contract or real estate
17sale or real estate sales agreement entered into with some
18other person arising out of or because of such nontaxable
19business, is a retailer to the extent of the value of the
20tangible personal property so transferred. If, in such
21transaction, a separate charge is made for the tangible
22personal property so transferred, the value of such property,
23for the purposes of this Act, is the amount so separately
24charged, but not less than the cost of such property to the
25transferor; if no separate charge is made, the value of such
26property, for the purposes of this Act, is the cost to the

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1transferor of such tangible personal property.
2 "Retailer maintaining a place of business in this State",
3or any like term, means and includes any of the following
4retailers:
5 1. A retailer having or maintaining within this State,
6 directly or by a subsidiary, an office, distribution house,
7 sales house, warehouse or other place of business, or any
8 agent or other representative operating within this State
9 under the authority of the retailer or its subsidiary,
10 irrespective of whether such place of business or agent or
11 other representative is located here permanently or
12 temporarily, or whether such retailer or subsidiary is
13 licensed to do business in this State. However, the
14 ownership of property that is located at the premises of a
15 printer with which the retailer has contracted for printing
16 and that consists of the final printed product, property
17 that becomes a part of the final printed product, or copy
18 from which the printed product is produced shall not result
19 in the retailer being deemed to have or maintain an office,
20 distribution house, sales house, warehouse, or other place
21 of business within this State.
22 1.1. A retailer having a contract with a person located
23 in this State under which the person, for a commission or
24 other consideration based upon the sale of tangible
25 personal property or taxable services by the retailer,
26 directly or indirectly refers potential customers to the

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1 retailer by providing to the potential customers a
2 promotional code or other mechanism that allows the
3 retailer to track purchases referred by such persons.
4 Examples of mechanisms that allow the retailer to track
5 purchases referred by such persons include but are not
6 limited to the use of a link on the person's Internet
7 website, promotional codes distributed through the
8 person's hand-delivered or mailed material, and
9 promotional codes distributed by the person through radio
10 or other broadcast media. The provisions of this paragraph
11 1.1 shall apply only if the cumulative gross receipts from
12 sales of tangible personal property or taxable service by
13 the retailer to customers who are referred to the retailer
14 by all persons in this State under such contracts exceed
15 $10,000 during the preceding 4 quarterly periods ending on
16 the last day of March, June, September, and December. A
17 retailer meeting the requirements of this paragraph 1.1
18 shall be presumed to be maintaining a place of business in
19 this State but may rebut this presumption by submitting
20 proof that the referrals or other activities pursued within
21 this State by such persons were not sufficient to meet the
22 nexus standards of the United States Constitution during
23 the preceding 4 quarterly periods.
24 1.2. Beginning July 1, 2011, a retailer having a
25 contract with a person located in this State under which:
26 A. the retailer sells the same or substantially

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1 similar line of products or taxable services as the
2 person located in this State and does so using an
3 identical or substantially similar name, trade name,
4 or trademark as the person located in this State; and
5 B. the retailer provides a commission or other
6 consideration to the person located in this State based
7 upon the sale of tangible personal property or taxable
8 service by the retailer.
9 The provisions of this paragraph 1.2 shall apply only if
10 the cumulative gross receipts from sales of tangible
11 personal property or taxable service by the retailer to
12 customers in this State under all such contracts exceed
13 $10,000 during the preceding 4 quarterly periods ending on
14 the last day of March, June, September, and December.
15 2. A retailer soliciting orders for tangible personal
16 property or taxable service by means of a telecommunication
17 or television shopping system (which utilizes toll free
18 numbers) which is intended by the retailer to be broadcast
19 by cable television or other means of broadcasting, to
20 consumers located in this State.
21 3. A retailer, pursuant to a contract with a
22 broadcaster or publisher located in this State, soliciting
23 orders for tangible personal property or taxable service by
24 means of advertising which is disseminated primarily to
25 consumers located in this State and only secondarily to
26 bordering jurisdictions.

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1 4. A retailer soliciting orders for tangible personal
2 property or taxable service by mail if the solicitations
3 are substantial and recurring and if the retailer benefits
4 from any banking, financing, debt collection,
5 telecommunication, or marketing activities occurring in
6 this State or benefits from the location in this State of
7 authorized installation, servicing, or repair facilities.
8 5. A retailer that is owned or controlled by the same
9 interests that own or control any retailer engaging in
10 business in the same or similar line of business in this
11 State.
12 6. A retailer having a franchisee or licensee operating
13 under its trade name if the franchisee or licensee is
14 required to collect the tax under this Section.
15 7. A retailer, pursuant to a contract with a cable
16 television operator located in this State, soliciting
17 orders for tangible personal property or taxable service by
18 means of advertising which is transmitted or distributed
19 over a cable television system in this State.
20 8. A retailer engaging in activities in Illinois, which
21 activities in the state in which the retail business
22 engaging in such activities is located would constitute
23 maintaining a place of business in that state.
24 "Bulk vending machine" means a vending machine, containing
25unsorted confections, nuts, toys, or other items designed
26primarily to be used or played with by children which, when a

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1coin or coins of a denomination not larger than $0.50 are
2inserted, are dispensed in equal portions, at random and
3without selection by the customer.
4(Source: P.A. 98-628, eff. 1-1-15; 98-1080, eff. 8-26-14;
598-1089, eff. 1-1-15; 99-78, eff. 7-20-15.)
6 (35 ILCS 105/2a-2 new)
7 Sec. 2a-2. Taxable services. Beginning January 1, 2018,
8"taxable service" means any of the following services:
9 (1) Providing space for storage.
10 (A) "Storage" means the retaining or keeping of
11 tangible personal property in this State for any
12 purpose. For purposes of this Section, tangible
13 personal property, does not include "grain" as defined
14 in the Public Grain Warehouse and Warehouse Receipts
15 Act.
16 (B) "Space for storage" means (i) secure areas,
17 such as rooms, units, compartments or containers,
18 whether accessible from outside or from within a
19 building, that are designated for the use of a
20 purchaser, where the purchaser can store and retrieve
21 property, including self-storage units, mini-storage
22 units, and areas by any other name; (ii) any parking
23 lot, ramp, or parking garage for a vehicle, whether the
24 vehicle is parked by the operator of the vehicle or by
25 an attendant; (iii) any aircraft parking area, ramp, or

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1 hanger; (iv) any boat slip, dock, or dry dock; (v) any
2 recreational vehicle parking area or garage; and (vi)
3 any other areas for storage or parking of tangible
4 personal property.
5 (C) "Self-storage or mini-storage" includes
6 storage lockers or storage units in apartment
7 complexes (if the locker or unit is utilized at the
8 tenant's option and includes payment of a fee in
9 addition to apartment rental), and in amusement parks,
10 water parks, recreational facilities, and other
11 locations where lockers are rented for self-storage.
12 (2) Laundry, drycleaning, cloth pressing, dyeing, or
13 linen service, except when the service is performed by the
14 purchaser through the use of coin-operated, self-service
15 machines.
16 (3) Private detective, private alarm, and private
17 security service for which the provider of the service is
18 required to be licensed pursuant to the Private Detective,
19 Private Alarm, Private Security, Fingerprint Vendor, and
20 Locksmith Act of 2004, or would be required to be so
21 licensed in performing those services in this State.
22 (4) Structural pest control services. "Structural pest
23 control services" means use of any device or the
24 application of any substance to prevent, repel, mitigate,
25 curb, control, or eradicate any structural pest in, on,
26 under, or around a structure, or within a part of, or

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1 materials used in building, a structure; the use of any
2 pesticide, including insecticides, fungicides and other
3 wood treatment products, attractants, repellents,
4 rodenticides, fumigants, or mechanical devices for
5 preventing, controlling, eradicating, identifying,
6 mitigating, diminishing, or curbing insects, vermin, rats,
7 mice, or other pests in, on, under, or around a structure,
8 or within a part of, or materials used in building, a
9 structure; vault fumigation and fumigation of box cars,
10 trucks, ships, airplanes, docks, warehouses, and common
11 carriers or soliciting to perform any of the foregoing
12 functions.
13 (5) Tattooing and body piercing.
14 (35 ILCS 105/3) (from Ch. 120, par. 439.3)
15 Sec. 3. Tax imposed. A tax is imposed upon the privilege of
16using in this State a taxable service or tangible personal
17property purchased at retail from a retailer, including
18computer software, and including photographs, negatives, and
19positives that are the product of photoprocessing, but not
20including products of photoprocessing produced for use in
21motion pictures for commercial exhibition. Beginning January
221, 2001, prepaid telephone calling arrangements shall be
23considered tangible personal property subject to the tax
24imposed under this Act regardless of the form in which those
25arrangements may be embodied, transmitted, or fixed by any

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1method now known or hereafter developed. Purchases of (1)
2electricity delivered to customers by wire; (2) natural or
3artificial gas that is delivered to customers through pipes,
4pipelines, or mains; and (3) water that is delivered to
5customers through pipes, pipelines, or mains are not subject to
6tax under this Act. The provisions of this amendatory Act of
7the 98th General Assembly are declaratory of existing law as to
8the meaning and scope of this Act.
9(Source: P.A. 98-583, eff. 1-1-14.)
10 (35 ILCS 105/3-5)
11 Sec. 3-5. Exemptions. Use of the following tangible
12personal property or taxable service is exempt from the tax
13imposed by this Act:
14 (1) Personal property or taxable services purchased from a
15corporation, society, association, foundation, institution, or
16organization, other than a limited liability company, that is
17organized and operated as a not-for-profit service enterprise
18for the benefit of persons 65 years of age or older if the
19personal property or taxable service was not purchased by the
20enterprise for the purpose of resale by the enterprise.
21 (2) Personal property or taxable service purchased by a
22not-for-profit Illinois county fair association for use in
23conducting, operating, or promoting the county fair.
24 (3) Personal property or taxable services purchased by a
25not-for-profit arts or cultural organization that establishes,

SB0009 Engrossed- 230 -LRB100 06347 HLH 16385 b
1by proof required by the Department by rule, that it has
2received an exemption under Section 501(c)(3) of the Internal
3Revenue Code and that is organized and operated primarily for
4the presentation or support of arts or cultural programming,
5activities, or services. These organizations include, but are
6not limited to, music and dramatic arts organizations such as
7symphony orchestras and theatrical groups, arts and cultural
8service organizations, local arts councils, visual arts
9organizations, and media arts organizations. On and after the
10effective date of this amendatory Act of the 92nd General
11Assembly, however, an entity otherwise eligible for this
12exemption shall not make tax-free purchases unless it has an
13active identification number issued by the Department.
14 (4) Personal property or taxable services purchased by a
15governmental body, by a corporation, society, association,
16foundation, or institution organized and operated exclusively
17for charitable, religious, or educational purposes, or by a
18not-for-profit corporation, society, association, foundation,
19institution, or organization that has no compensated officers
20or employees and that is organized and operated primarily for
21the recreation of persons 55 years of age or older. A limited
22liability company may qualify for the exemption under this
23paragraph only if the limited liability company is organized
24and operated exclusively for educational purposes. On and after
25July 1, 1987, however, no entity otherwise eligible for this
26exemption shall make tax-free purchases unless it has an active

SB0009 Engrossed- 231 -LRB100 06347 HLH 16385 b
1exemption identification number issued by the Department.
2 (5) Until July 1, 2003, a passenger car that is a
3replacement vehicle to the extent that the purchase price of
4the car is subject to the Replacement Vehicle Tax.
5 (6) Until July 1, 2003 and beginning again on September 1,
62004 through August 30, 2014, graphic arts machinery and
7equipment, including repair and replacement parts, both new and
8used, and including that manufactured on special order,
9certified by the purchaser to be used primarily for graphic
10arts production, and including machinery and equipment
11purchased for lease. Equipment includes chemicals or chemicals
12acting as catalysts but only if the chemicals or chemicals
13acting as catalysts effect a direct and immediate change upon a
14graphic arts product. Beginning on July 1, 2017, graphic arts
15machinery and equipment is included in the manufacturing and
16assembling machinery and equipment exemption under paragraph
17(18).
18 (7) Farm chemicals.
19 (8) Legal tender, currency, medallions, or gold or silver
20coinage issued by the State of Illinois, the government of the
21United States of America, or the government of any foreign
22country, and bullion.
23 (9) Personal property purchased from a teacher-sponsored
24student organization affiliated with an elementary or
25secondary school located in Illinois.
26 (10) A motor vehicle that is used for automobile renting,

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1as defined in the Automobile Renting Occupation and Use Tax
2Act.
3 (11) Farm machinery and equipment, both new and used,
4including that manufactured on special order, certified by the
5purchaser to be used primarily for production agriculture or
6State or federal agricultural programs, including individual
7replacement parts for the machinery and equipment, including
8machinery and equipment purchased for lease, and including
9implements of husbandry defined in Section 1-130 of the
10Illinois Vehicle Code, farm machinery and agricultural
11chemical and fertilizer spreaders, and nurse wagons required to
12be registered under Section 3-809 of the Illinois Vehicle Code,
13but excluding other motor vehicles required to be registered
14under the Illinois Vehicle Code. Horticultural polyhouses or
15hoop houses used for propagating, growing, or overwintering
16plants shall be considered farm machinery and equipment under
17this item (11). Agricultural chemical tender tanks and dry
18boxes shall include units sold separately from a motor vehicle
19required to be licensed and units sold mounted on a motor
20vehicle required to be licensed if the selling price of the
21tender is separately stated.
22 Farm machinery and equipment shall include precision
23farming equipment that is installed or purchased to be
24installed on farm machinery and equipment including, but not
25limited to, tractors, harvesters, sprayers, planters, seeders,
26or spreaders. Precision farming equipment includes, but is not

SB0009 Engrossed- 233 -LRB100 06347 HLH 16385 b
1limited to, soil testing sensors, computers, monitors,
2software, global positioning and mapping systems, and other
3such equipment.
4 Farm machinery and equipment also includes computers,
5sensors, software, and related equipment used primarily in the
6computer-assisted operation of production agriculture
7facilities, equipment, and activities such as, but not limited
8to, the collection, monitoring, and correlation of animal and
9crop data for the purpose of formulating animal diets and
10agricultural chemicals. This item (11) is exempt from the
11provisions of Section 3-90.
12 (12) Until June 30, 2013, fuel and petroleum products sold
13to or used by an air common carrier, certified by the carrier
14to be used for consumption, shipment, or storage in the conduct
15of its business as an air common carrier, for a flight destined
16for or returning from a location or locations outside the
17United States without regard to previous or subsequent domestic
18stopovers.
19 Beginning July 1, 2013, fuel and petroleum products sold to
20or used by an air carrier, certified by the carrier to be used
21for consumption, shipment, or storage in the conduct of its
22business as an air common carrier, for a flight that (i) is
23engaged in foreign trade or is engaged in trade between the
24United States and any of its possessions and (ii) transports at
25least one individual or package for hire from the city of
26origination to the city of final destination on the same

SB0009 Engrossed- 234 -LRB100 06347 HLH 16385 b
1aircraft, without regard to a change in the flight number of
2that aircraft.
3 (13) Proceeds of mandatory service charges separately
4stated on customers' bills for the purchase and consumption of
5food and beverages or taxable services purchased at retail from
6a retailer, to the extent that the proceeds of the service
7charge are in fact turned over as tips or as a substitute for
8tips to the employees who participate directly in preparing,
9serving, hosting or cleaning up the food or beverage function
10with respect to which the service charge is imposed.
11 (14) Until July 1, 2003, oil field exploration, drilling,
12and production equipment, including (i) rigs and parts of rigs,
13rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
14tubular goods, including casing and drill strings, (iii) pumps
15and pump-jack units, (iv) storage tanks and flow lines, (v) any
16individual replacement part for oil field exploration,
17drilling, and production equipment, and (vi) machinery