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| | 101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB1905 Introduced 2/15/2019, by Sen. Melinda Bush SYNOPSIS AS INTRODUCED:
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| 35 ILCS 5/201 | from Ch. 120, par. 2-201 |
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Amends the Illinois Income Tax Act. Provides that the research and development credit applies on a permanent basis. Provides that the credit may be carried forward for a period of 20 taxable years (currently, 5 taxable years). Makes changes concerning the calculation of the credit. Effective immediately.
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| | | FISCAL NOTE ACT MAY APPLY | |
| | A BILL FOR |
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| | SB1905 | | LRB101 10790 HLH 55916 b |
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| 1 | | AN ACT concerning revenue.
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| 2 | | Be it enacted by the People of the State of Illinois,
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| 3 | | represented in the General Assembly:
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| 4 | | Section 5. The Illinois Income Tax Act is amended by |
| 5 | | changing Section 201 as follows:
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| 6 | | (35 ILCS 5/201) (from Ch. 120, par. 2-201) |
| 7 | | Sec. 201. Tax imposed. |
| 8 | | (a) In general. A tax measured by net income is hereby |
| 9 | | imposed on every
individual, corporation, trust and estate for |
| 10 | | each taxable year ending
after July 31, 1969 on the privilege |
| 11 | | of earning or receiving income in or
as a resident of this |
| 12 | | State. Such tax shall be in addition to all other
occupation or |
| 13 | | privilege taxes imposed by this State or by any municipal
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| 14 | | corporation or political subdivision thereof. |
| 15 | | (b) Rates. The tax imposed by subsection (a) of this |
| 16 | | Section shall be
determined as follows, except as adjusted by |
| 17 | | subsection (d-1): |
| 18 | | (1) In the case of an individual, trust or estate, for |
| 19 | | taxable years
ending prior to July 1, 1989, an amount equal |
| 20 | | to 2 1/2% of the taxpayer's
net income for the taxable |
| 21 | | year. |
| 22 | | (2) In the case of an individual, trust or estate, for |
| 23 | | taxable years
beginning prior to July 1, 1989 and ending |
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| 1 | | after June 30, 1989, an amount
equal to the sum of (i) 2 |
| 2 | | 1/2% of the taxpayer's net income for the period
prior to |
| 3 | | July 1, 1989, as calculated under Section 202.3, and (ii) |
| 4 | | 3% of the
taxpayer's net income for the period after June |
| 5 | | 30, 1989, as calculated
under Section 202.3. |
| 6 | | (3) In the case of an individual, trust or estate, for |
| 7 | | taxable years
beginning after June 30, 1989, and ending |
| 8 | | prior to January 1, 2011, an amount equal to 3% of the |
| 9 | | taxpayer's net
income for the taxable year. |
| 10 | | (4) In the case of an individual, trust, or estate, for |
| 11 | | taxable years beginning prior to January 1, 2011, and |
| 12 | | ending after December 31, 2010, an amount equal to the sum |
| 13 | | of (i) 3% of the taxpayer's net income for the period prior |
| 14 | | to January 1, 2011, as calculated under Section 202.5, and |
| 15 | | (ii) 5% of the taxpayer's net income for the period after |
| 16 | | December 31, 2010, as calculated under Section 202.5. |
| 17 | | (5) In the case of an individual, trust, or estate, for |
| 18 | | taxable years beginning on or after January 1, 2011, and |
| 19 | | ending prior to January 1, 2015, an amount equal to 5% of |
| 20 | | the taxpayer's net income for the taxable year. |
| 21 | | (5.1) In the case of an individual, trust, or estate, |
| 22 | | for taxable years beginning prior to January 1, 2015, and |
| 23 | | ending after December 31, 2014, an amount equal to the sum |
| 24 | | of (i) 5% of the taxpayer's net income for the period prior |
| 25 | | to January 1, 2015, as calculated under Section 202.5, and |
| 26 | | (ii) 3.75% of the taxpayer's net income for the period |
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| 1 | | after December 31, 2014, as calculated under Section 202.5. |
| 2 | | (5.2) In the case of an individual, trust, or estate, |
| 3 | | for taxable years beginning on or after January 1, 2015, |
| 4 | | and ending prior to July 1, 2017, an amount equal to 3.75% |
| 5 | | of the taxpayer's net income for the taxable year. |
| 6 | | (5.3) In the case of an individual, trust, or estate, |
| 7 | | for taxable years beginning prior to July 1, 2017, and |
| 8 | | ending after June 30, 2017, an amount equal to the sum of |
| 9 | | (i) 3.75% of the taxpayer's net income for the period prior |
| 10 | | to July 1, 2017, as calculated under Section 202.5, and |
| 11 | | (ii) 4.95% of the taxpayer's net income for the period |
| 12 | | after June 30, 2017, 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 July 1, 2017, an |
| 15 | | amount equal to 4.95% of the taxpayer's net income for the |
| 16 | | taxable year. |
| 17 | | (6) In the case of a corporation, for taxable years
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| 18 | | ending prior to July 1, 1989, an amount equal to 4% of the
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| 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,
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| 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. |
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| 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 | | July 1, 2017, an amount equal to 5.25% of the taxpayer's |
| 26 | | net income for the taxable year. |
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| 1 | | (13) In the case of a corporation, for taxable years |
| 2 | | beginning prior to July 1, 2017, and ending after June 30, |
| 3 | | 2017, an amount equal to the sum of (i) 5.25% of the |
| 4 | | taxpayer's net income for the period prior to July 1, 2017, |
| 5 | | as calculated under Section 202.5, and (ii) 7% of the |
| 6 | | taxpayer's net income for the period after June 30, 2017, |
| 7 | | as calculated under Section 202.5. |
| 8 | | (14) In the case of a corporation, for taxable years |
| 9 | | beginning on or after July 1, 2017, an amount equal to 7% |
| 10 | | of the taxpayer's net income for the taxable year. |
| 11 | | The rates under this subsection (b) are subject to the |
| 12 | | provisions of Section 201.5. |
| 13 | | (c) Personal Property Tax Replacement Income Tax.
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| 14 | | Beginning on July 1, 1979 and thereafter, in addition to such |
| 15 | | income
tax, there is also hereby imposed the Personal Property |
| 16 | | Tax Replacement
Income Tax measured by net income on every |
| 17 | | corporation (including Subchapter
S corporations), partnership |
| 18 | | and trust, for each taxable year ending after
June 30, 1979. |
| 19 | | Such taxes are imposed on the privilege of earning or
receiving |
| 20 | | income in or as a resident of this State. The Personal Property
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| 21 | | Tax Replacement Income Tax shall be in addition to the income |
| 22 | | tax imposed
by subsections (a) and (b) of this Section and in |
| 23 | | addition to all other
occupation or privilege taxes imposed by |
| 24 | | this State or by any municipal
corporation or political |
| 25 | | subdivision thereof. |
| 26 | | (d) Additional Personal Property Tax Replacement Income |
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| 1 | | Tax Rates.
The personal property tax replacement income tax |
| 2 | | imposed by this subsection
and subsection (c) of this Section |
| 3 | | in the case of a corporation, other
than a Subchapter S |
| 4 | | corporation and except as adjusted by subsection (d-1),
shall |
| 5 | | be an additional amount equal to
2.85% of such taxpayer's net |
| 6 | | income for the taxable year, except that
beginning on January |
| 7 | | 1, 1981, and thereafter, the rate of 2.85% specified
in this |
| 8 | | subsection shall be reduced to 2.5%, and in the case of a
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| 9 | | partnership, trust or a Subchapter S corporation shall be an |
| 10 | | additional
amount equal to 1.5% of such taxpayer's net income |
| 11 | | for the taxable year. |
| 12 | | (d-1) Rate reduction for certain foreign insurers. In the |
| 13 | | case of a
foreign insurer, as defined by Section 35A-5 of the |
| 14 | | Illinois Insurance Code,
whose state or country of domicile |
| 15 | | imposes on insurers domiciled in Illinois
a retaliatory tax |
| 16 | | (excluding any insurer
whose premiums from reinsurance assumed |
| 17 | | are 50% or more of its total insurance
premiums as determined |
| 18 | | under paragraph (2) of subsection (b) of Section 304,
except |
| 19 | | that for purposes of this determination premiums from |
| 20 | | reinsurance do
not include premiums from inter-affiliate |
| 21 | | reinsurance arrangements),
beginning with taxable years ending |
| 22 | | on or after December 31, 1999,
the sum of
the rates of tax |
| 23 | | imposed by subsections (b) and (d) shall be reduced (but not
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| 24 | | increased) to the rate at which the total amount of tax imposed |
| 25 | | under this Act,
net of all credits allowed under this Act, |
| 26 | | shall equal (i) the total amount of
tax that would be imposed |
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| 1 | | on the foreign insurer's net income allocable to
Illinois for |
| 2 | | the taxable year by such foreign insurer's state or country of
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| 3 | | domicile if that net income were subject to all income taxes |
| 4 | | and taxes
measured by net income imposed by such foreign |
| 5 | | insurer's state or country of
domicile, net of all credits |
| 6 | | allowed or (ii) a rate of zero if no such tax is
imposed on such |
| 7 | | income by the foreign insurer's state of domicile.
For the |
| 8 | | purposes of this subsection (d-1), an inter-affiliate includes |
| 9 | | a
mutual insurer under common management. |
| 10 | | (1) For the purposes of subsection (d-1), in no event |
| 11 | | shall the sum of the
rates of tax imposed by subsections |
| 12 | | (b) and (d) be reduced below the rate at
which the sum of: |
| 13 | | (A) the total amount of tax imposed on such foreign |
| 14 | | insurer under
this Act for a taxable year, net of all |
| 15 | | credits allowed under this Act, plus |
| 16 | | (B) the privilege tax imposed by Section 409 of the |
| 17 | | Illinois Insurance
Code, the fire insurance company |
| 18 | | tax imposed by Section 12 of the Fire
Investigation |
| 19 | | Act, and the fire department taxes imposed under |
| 20 | | Section 11-10-1
of the Illinois Municipal Code, |
| 21 | | equals 1.25% for taxable years ending prior to December 31, |
| 22 | | 2003, or
1.75% for taxable years ending on or after |
| 23 | | December 31, 2003, of the net
taxable premiums written for |
| 24 | | the taxable year,
as described by subsection (1) of Section |
| 25 | | 409 of the Illinois Insurance Code.
This paragraph will in |
| 26 | | no event increase the rates imposed under subsections
(b) |
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| 1 | | and (d). |
| 2 | | (2) Any reduction in the rates of tax imposed by this |
| 3 | | subsection shall be
applied first against the rates imposed |
| 4 | | by subsection (b) and only after the
tax imposed by |
| 5 | | subsection (a) net of all credits allowed under this |
| 6 | | Section
other than the credit allowed under subsection (i) |
| 7 | | has been reduced to zero,
against the rates imposed by |
| 8 | | subsection (d). |
| 9 | | This subsection (d-1) is exempt from the provisions of |
| 10 | | Section 250. |
| 11 | | (e) Investment credit. A taxpayer shall be allowed a credit
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| 12 | | against the Personal Property Tax Replacement Income Tax for
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| 13 | | investment in qualified property. |
| 14 | | (1) A taxpayer shall be allowed a credit equal to .5% |
| 15 | | of
the basis of qualified property placed in service during |
| 16 | | the taxable year,
provided such property is placed in |
| 17 | | service on or after
July 1, 1984. There shall be allowed an |
| 18 | | additional credit equal
to .5% of the basis of qualified |
| 19 | | property placed in service during the
taxable year, |
| 20 | | provided such property is placed in service on or
after |
| 21 | | July 1, 1986, and the taxpayer's base employment
within |
| 22 | | Illinois has increased by 1% or more over the preceding |
| 23 | | year as
determined by the taxpayer's employment records |
| 24 | | filed with the
Illinois Department of Employment Security. |
| 25 | | Taxpayers who are new to
Illinois shall be deemed to have |
| 26 | | met the 1% growth in base employment for
the first year in |
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| 1 | | which they file employment records with the Illinois
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| 2 | | Department of Employment Security. The provisions added to |
| 3 | | this Section by
Public Act 85-1200 (and restored by Public |
| 4 | | Act 87-895) shall be
construed as declaratory of existing |
| 5 | | law and not as a new enactment. If,
in any year, the |
| 6 | | increase in base employment within Illinois over the
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| 7 | | preceding year is less than 1%, the additional credit shall |
| 8 | | be limited to that
percentage times a fraction, the |
| 9 | | numerator of which is .5% and the denominator
of which is |
| 10 | | 1%, but shall not exceed .5%. The investment credit shall |
| 11 | | not be
allowed to the extent that it would reduce a |
| 12 | | taxpayer's liability in any tax
year below zero, nor may |
| 13 | | any credit for qualified property be allowed for any
year |
| 14 | | other than the year in which the property was placed in |
| 15 | | service in
Illinois. For tax years ending on or after |
| 16 | | December 31, 1987, and on or
before December 31, 1988, the |
| 17 | | credit shall be allowed for the tax year in
which the |
| 18 | | property is placed in service, or, if the amount of the |
| 19 | | credit
exceeds the tax liability for that year, whether it |
| 20 | | exceeds the original
liability or the liability as later |
| 21 | | amended, such excess may be carried
forward and applied to |
| 22 | | the tax liability of the 5 taxable years following
the |
| 23 | | excess credit years if the taxpayer (i) makes investments |
| 24 | | which cause
the creation of a minimum of 2,000 full-time |
| 25 | | equivalent jobs in Illinois,
(ii) is located in an |
| 26 | | enterprise zone established pursuant to the Illinois
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| 1 | | Enterprise Zone Act and (iii) is certified by the |
| 2 | | Department of Commerce
and Community Affairs (now |
| 3 | | Department of Commerce and Economic Opportunity) as |
| 4 | | complying with the requirements specified in
clause (i) and |
| 5 | | (ii) by July 1, 1986. The Department of Commerce and
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| 6 | | Community Affairs (now Department of Commerce and Economic |
| 7 | | Opportunity) shall notify the Department of Revenue of all |
| 8 | | such
certifications immediately. For tax years ending |
| 9 | | after December 31, 1988,
the credit shall be allowed for |
| 10 | | the tax year in which the property is
placed in service, |
| 11 | | or, if the amount of the credit exceeds the tax
liability |
| 12 | | for that year, whether it exceeds the original liability or |
| 13 | | the
liability as later amended, such excess may be carried |
| 14 | | forward and applied
to the tax liability of the 5 taxable |
| 15 | | years following the excess credit
years. The credit shall |
| 16 | | be applied to the earliest year for which there is
a |
| 17 | | liability. If there is credit from more than one tax year |
| 18 | | that is
available to offset a liability, earlier credit |
| 19 | | shall be applied first. |
| 20 | | (2) The term "qualified property" means property |
| 21 | | which: |
| 22 | | (A) is tangible, whether new or used, including |
| 23 | | buildings and structural
components of buildings and |
| 24 | | signs that are real property, but not including
land or |
| 25 | | improvements to real property that are not a structural |
| 26 | | component of a
building such as landscaping, sewer |
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| 1 | | lines, local access roads, fencing, parking
lots, and |
| 2 | | other appurtenances; |
| 3 | | (B) is depreciable pursuant to Section 167 of the |
| 4 | | Internal Revenue Code,
except that "3-year property" |
| 5 | | as defined in Section 168(c)(2)(A) of that
Code is not |
| 6 | | eligible for the credit provided by this subsection |
| 7 | | (e); |
| 8 | | (C) is acquired by purchase as defined in Section |
| 9 | | 179(d) of
the Internal Revenue Code; |
| 10 | | (D) is used in Illinois by a taxpayer who is |
| 11 | | primarily engaged in
manufacturing, or in mining coal |
| 12 | | or fluorite, or in retailing, or was placed in service |
| 13 | | on or after July 1, 2006 in a River Edge Redevelopment |
| 14 | | Zone established pursuant to the River Edge |
| 15 | | Redevelopment Zone Act; and |
| 16 | | (E) has not previously been used in Illinois in |
| 17 | | such a manner and by
such a person as would qualify for |
| 18 | | the credit provided by this subsection
(e) or |
| 19 | | subsection (f). |
| 20 | | (3) For purposes of this subsection (e), |
| 21 | | "manufacturing" means
the material staging and production |
| 22 | | of tangible personal property by
procedures commonly |
| 23 | | regarded as manufacturing, processing, fabrication, or
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| 24 | | assembling which changes some existing material into new |
| 25 | | shapes, new
qualities, or new combinations. For purposes of |
| 26 | | this subsection
(e) the term "mining" shall have the same |
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| 1 | | meaning as the term "mining" in
Section 613(c) of the |
| 2 | | Internal Revenue Code. For purposes of this subsection
(e), |
| 3 | | the term "retailing" means the sale of tangible personal |
| 4 | | property for use or consumption and not for resale, or
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| 5 | | services rendered in conjunction with the sale of tangible |
| 6 | | personal property for use or consumption and not for |
| 7 | | resale. For purposes of this subsection (e), "tangible |
| 8 | | personal property" has the same meaning as when that term |
| 9 | | is used in the Retailers' Occupation Tax Act, and, for |
| 10 | | taxable years ending after December 31, 2008, does not |
| 11 | | include the generation, transmission, or distribution of |
| 12 | | electricity. |
| 13 | | (4) The basis of qualified property shall be the basis
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| 14 | | used to compute the depreciation deduction for federal |
| 15 | | income tax purposes. |
| 16 | | (5) If the basis of the property for federal income tax |
| 17 | | depreciation
purposes is increased after it has been placed |
| 18 | | in service in Illinois by
the taxpayer, the amount of such |
| 19 | | increase shall be deemed property placed
in service on the |
| 20 | | date of such increase in basis. |
| 21 | | (6) The term "placed in service" shall have the same
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| 22 | | meaning as under Section 46 of the Internal Revenue Code. |
| 23 | | (7) If during any taxable year, any property ceases to
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| 24 | | be qualified property in the hands of the taxpayer within |
| 25 | | 48 months after
being placed in service, or the situs of |
| 26 | | any qualified property is
moved outside Illinois within 48 |
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| 1 | | months after being placed in service, the
Personal Property |
| 2 | | Tax Replacement Income Tax for such taxable year shall be
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| 3 | | increased. Such increase shall be determined by (i) |
| 4 | | recomputing the
investment credit which would have been |
| 5 | | allowed for the year in which
credit for such property was |
| 6 | | originally allowed by eliminating such
property from such |
| 7 | | computation and, (ii) subtracting such recomputed credit
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| 8 | | from the amount of credit previously allowed. For the |
| 9 | | purposes of this
paragraph (7), a reduction of the basis of |
| 10 | | qualified property resulting
from a redetermination of the |
| 11 | | purchase price shall be deemed a disposition
of qualified |
| 12 | | property to the extent of such reduction. |
| 13 | | (8) Unless the investment credit is extended by law, |
| 14 | | the
basis of qualified property shall not include costs |
| 15 | | incurred after
December 31, 2018, except for costs incurred |
| 16 | | pursuant to a binding
contract entered into on or before |
| 17 | | December 31, 2018. |
| 18 | | (9) Each taxable year ending before December 31, 2000, |
| 19 | | a partnership may
elect to pass through to its
partners the |
| 20 | | credits to which the partnership is entitled under this |
| 21 | | subsection
(e) for the taxable year. A partner may use the |
| 22 | | credit allocated to him or her
under this paragraph only |
| 23 | | against the tax imposed in subsections (c) and (d) of
this |
| 24 | | Section. If the partnership makes that election, those |
| 25 | | credits shall be
allocated among the partners in the |
| 26 | | partnership in accordance with the rules
set forth in |
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| 1 | | Section 704(b) of the Internal Revenue Code, and the rules
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| 2 | | promulgated under that Section, and the allocated amount of |
| 3 | | the credits shall
be allowed to the partners for that |
| 4 | | taxable year. The partnership shall make
this election on |
| 5 | | its Personal Property Tax Replacement Income Tax return for
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| 6 | | that taxable year. The election to pass through the credits |
| 7 | | shall be
irrevocable. |
| 8 | | For taxable years ending on or after December 31, 2000, |
| 9 | | a
partner that qualifies its
partnership for a subtraction |
| 10 | | under subparagraph (I) of paragraph (2) of
subsection (d) |
| 11 | | of Section 203 or a shareholder that qualifies a Subchapter |
| 12 | | S
corporation for a subtraction under subparagraph (S) of |
| 13 | | paragraph (2) of
subsection (b) of Section 203 shall be |
| 14 | | allowed a credit under this subsection
(e) equal to its |
| 15 | | share of the credit earned under this subsection (e) during
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| 16 | | the taxable year by the partnership or Subchapter S |
| 17 | | corporation, determined in
accordance with the |
| 18 | | determination of income and distributive share of
income |
| 19 | | under Sections 702 and 704 and Subchapter S of the Internal |
| 20 | | Revenue
Code. This paragraph is exempt from the provisions |
| 21 | | of Section 250. |
| 22 | | (f) Investment credit; Enterprise Zone; River Edge |
| 23 | | Redevelopment Zone. |
| 24 | | (1) A taxpayer shall be allowed a credit against the |
| 25 | | tax imposed
by subsections (a) and (b) of this Section for |
| 26 | | investment in qualified
property which is placed in service |
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| 1 | | in an Enterprise Zone created
pursuant to the Illinois |
| 2 | | Enterprise Zone Act or, for property placed in service on |
| 3 | | or after July 1, 2006, a River Edge Redevelopment Zone |
| 4 | | established pursuant to the River Edge Redevelopment Zone |
| 5 | | Act. For partners, shareholders
of Subchapter S |
| 6 | | corporations, and owners of limited liability companies,
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| 7 | | if the liability company is treated as a partnership for |
| 8 | | purposes of
federal and State income taxation, there shall |
| 9 | | be allowed a credit under
this subsection (f) to be |
| 10 | | determined in accordance with the determination
of income |
| 11 | | and distributive share of income under Sections 702 and 704 |
| 12 | | and
Subchapter S of the Internal Revenue Code. The credit |
| 13 | | shall be .5% of the
basis for such property. The credit |
| 14 | | shall be available only in the taxable
year in which the |
| 15 | | property is placed in service in the Enterprise Zone or |
| 16 | | River Edge Redevelopment Zone and
shall not be allowed to |
| 17 | | the extent that it would reduce a taxpayer's
liability for |
| 18 | | the tax imposed by subsections (a) and (b) of this Section |
| 19 | | to
below zero. For tax years ending on or after December |
| 20 | | 31, 1985, the credit
shall be allowed for the tax year in |
| 21 | | which the property is placed in
service, or, if the amount |
| 22 | | of the credit exceeds the tax liability for that
year, |
| 23 | | whether it exceeds the original liability or the liability |
| 24 | | as later
amended, such excess may be carried forward and |
| 25 | | applied to the tax
liability of the 5 taxable years |
| 26 | | following the excess credit year.
The credit shall be |
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| 1 | | applied to the earliest year for which there is a
|
| 2 | | liability. If there is credit from more than one tax year |
| 3 | | that is available
to offset a liability, the credit |
| 4 | | accruing first in time shall be applied
first. |
| 5 | | (2) The term qualified property means property which: |
| 6 | | (A) is tangible, whether new or used, including |
| 7 | | buildings and
structural components of buildings; |
| 8 | | (B) is depreciable pursuant to Section 167 of the |
| 9 | | Internal Revenue
Code, except that "3-year property" |
| 10 | | as defined in Section 168(c)(2)(A) of
that Code is not |
| 11 | | eligible for the credit provided by this subsection |
| 12 | | (f); |
| 13 | | (C) is acquired by purchase as defined in Section |
| 14 | | 179(d) of
the Internal Revenue Code; |
| 15 | | (D) is used in the Enterprise Zone or River Edge |
| 16 | | Redevelopment Zone by the taxpayer; and |
| 17 | | (E) has not been previously used in Illinois in |
| 18 | | such a manner and by
such a person as would qualify for |
| 19 | | the credit provided by this subsection
(f) or |
| 20 | | subsection (e). |
| 21 | | (3) The basis of qualified property shall be the basis |
| 22 | | used to compute
the depreciation deduction for federal |
| 23 | | income tax purposes. |
| 24 | | (4) If the basis of the property for federal income tax |
| 25 | | depreciation
purposes is increased after it has been placed |
| 26 | | in service in the Enterprise
Zone or River Edge |
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| 1 | | Redevelopment Zone by the taxpayer, the amount of such |
| 2 | | increase shall be deemed property
placed in service on the |
| 3 | | date of such increase in basis. |
| 4 | | (5) The term "placed in service" shall have the same |
| 5 | | meaning as under
Section 46 of the Internal Revenue Code. |
| 6 | | (6) If during any taxable year, any property ceases to |
| 7 | | be qualified
property in the hands of the taxpayer within |
| 8 | | 48 months after being placed
in service, or the situs of |
| 9 | | any qualified property is moved outside the
Enterprise Zone |
| 10 | | or River Edge Redevelopment Zone within 48 months after |
| 11 | | being placed in service, the tax
imposed under subsections |
| 12 | | (a) and (b) of this Section for such taxable year
shall be |
| 13 | | increased. Such increase shall be determined by (i) |
| 14 | | recomputing
the investment credit which would have been |
| 15 | | allowed for the year in which
credit for such property was |
| 16 | | originally allowed by eliminating such
property from such |
| 17 | | computation, and (ii) subtracting such recomputed credit
|
| 18 | | from the amount of credit previously allowed. For the |
| 19 | | purposes of this
paragraph (6), a reduction of the basis of |
| 20 | | qualified property resulting
from a redetermination of the |
| 21 | | purchase price shall be deemed a disposition
of qualified |
| 22 | | property to the extent of such reduction. |
| 23 | | (7) There shall be allowed an additional credit equal |
| 24 | | to 0.5% of the basis of qualified property placed in |
| 25 | | service during the taxable year in a River Edge |
| 26 | | Redevelopment Zone, provided such property is placed in |
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| 1 | | service on or after July 1, 2006, and the taxpayer's base |
| 2 | | employment within Illinois has increased by 1% or more over |
| 3 | | the preceding year as determined by the taxpayer's |
| 4 | | employment records filed with the Illinois Department of |
| 5 | | Employment Security. Taxpayers who are new to Illinois |
| 6 | | shall be deemed to have met the 1% growth in base |
| 7 | | employment for the first year in which they file employment |
| 8 | | records with the Illinois Department of Employment |
| 9 | | Security. If, in any year, the increase in base employment |
| 10 | | within Illinois over the preceding year is less than 1%, |
| 11 | | the additional credit shall be limited to that percentage |
| 12 | | times a fraction, the numerator of which is 0.5% and the |
| 13 | | denominator of which is 1%, but shall not exceed 0.5%.
|
| 14 | | (g) (Blank). |
| 15 | | (h) Investment credit; High Impact Business. |
| 16 | | (1) Subject to subsections (b) and (b-5) of Section
5.5 |
| 17 | | of the Illinois Enterprise Zone Act, a taxpayer shall be |
| 18 | | allowed a credit
against the tax imposed by subsections (a) |
| 19 | | and (b) of this Section for
investment in qualified
|
| 20 | | property which is placed in service by a Department of |
| 21 | | Commerce and Economic Opportunity
designated High Impact |
| 22 | | Business. The credit shall be .5% of the basis
for such |
| 23 | | property. The credit shall not be available (i) until the |
| 24 | | minimum
investments in qualified property set forth in |
| 25 | | subdivision (a)(3)(A) of
Section 5.5 of the Illinois
|
| 26 | | Enterprise Zone Act have been satisfied
or (ii) until the |
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| 1 | | time authorized in subsection (b-5) of the Illinois
|
| 2 | | Enterprise Zone Act for entities designated as High Impact |
| 3 | | Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and |
| 4 | | (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone |
| 5 | | Act, and shall not be allowed to the extent that it would
|
| 6 | | reduce a taxpayer's liability for the tax imposed by |
| 7 | | subsections (a) and (b) of
this Section to below zero. The |
| 8 | | credit applicable to such investments shall be
taken in the |
| 9 | | taxable year in which such investments have been completed. |
| 10 | | The
credit for additional investments beyond the minimum |
| 11 | | investment by a designated
high impact business authorized |
| 12 | | under subdivision (a)(3)(A) of Section 5.5 of
the Illinois |
| 13 | | Enterprise Zone Act shall be available only in the taxable |
| 14 | | year in
which the property is placed in service and shall |
| 15 | | not be allowed to the extent
that it would reduce a |
| 16 | | taxpayer's liability for the tax imposed by subsections
(a) |
| 17 | | and (b) of this Section to below zero.
For tax years ending |
| 18 | | on or after December 31, 1987, the credit shall be
allowed |
| 19 | | for the tax year in which the property is placed in |
| 20 | | service, or, if
the amount of the credit exceeds the tax |
| 21 | | liability for that year, whether
it exceeds the original |
| 22 | | liability or the liability as later amended, such
excess |
| 23 | | may be carried forward and applied to the tax liability of |
| 24 | | the 5
taxable years following the excess credit year. The |
| 25 | | credit shall be
applied to the earliest year for which |
| 26 | | there is a liability. If there is
credit from more than one |
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| 1 | | tax year that is available to offset a liability,
the |
| 2 | | credit accruing first in time shall be applied first. |
| 3 | | Changes made in this subdivision (h)(1) by Public Act |
| 4 | | 88-670
restore changes made by Public Act 85-1182 and |
| 5 | | reflect existing law. |
| 6 | | (2) The term qualified property means property which: |
| 7 | | (A) is tangible, whether new or used, including |
| 8 | | buildings and
structural components of buildings; |
| 9 | | (B) is depreciable pursuant to Section 167 of the |
| 10 | | Internal Revenue
Code, except that "3-year property" |
| 11 | | as defined in Section 168(c)(2)(A) of
that Code is not |
| 12 | | eligible for the credit provided by this subsection |
| 13 | | (h); |
| 14 | | (C) is acquired by purchase as defined in Section |
| 15 | | 179(d) of the
Internal Revenue Code; and |
| 16 | | (D) is not eligible for the Enterprise Zone |
| 17 | | Investment Credit provided
by subsection (f) of this |
| 18 | | Section. |
| 19 | | (3) The basis of qualified property shall be the basis |
| 20 | | used to compute
the depreciation deduction for federal |
| 21 | | income tax purposes. |
| 22 | | (4) If the basis of the property for federal income tax |
| 23 | | depreciation
purposes is increased after it has been placed |
| 24 | | in service in a federally
designated Foreign Trade Zone or |
| 25 | | Sub-Zone located in Illinois by the taxpayer,
the amount of |
| 26 | | such increase shall be deemed property placed in service on
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| 1 | | the date of such increase in basis. |
| 2 | | (5) The term "placed in service" shall have the same |
| 3 | | meaning as under
Section 46 of the Internal Revenue Code. |
| 4 | | (6) If during any taxable year ending on or before |
| 5 | | December 31, 1996,
any property ceases to be qualified
|
| 6 | | property in the hands of the taxpayer within 48 months |
| 7 | | after being placed
in service, or the situs of any |
| 8 | | qualified property is moved outside
Illinois within 48 |
| 9 | | months after being placed in service, the tax imposed
under |
| 10 | | subsections (a) and (b) of this Section for such taxable |
| 11 | | year shall
be increased. Such increase shall be determined |
| 12 | | by (i) recomputing the
investment credit which would have |
| 13 | | been allowed for the year in which
credit for such property |
| 14 | | was originally allowed by eliminating such
property from |
| 15 | | such computation, and (ii) subtracting such recomputed |
| 16 | | credit
from the amount of credit previously allowed. For |
| 17 | | the purposes of this
paragraph (6), a reduction of the |
| 18 | | basis of qualified property resulting
from a |
| 19 | | redetermination of the purchase price shall be deemed a |
| 20 | | disposition
of qualified property to the extent of such |
| 21 | | reduction. |
| 22 | | (7) Beginning with tax years ending after December 31, |
| 23 | | 1996, if a
taxpayer qualifies for the credit under this |
| 24 | | subsection (h) and thereby is
granted a tax abatement and |
| 25 | | the taxpayer relocates its entire facility in
violation of |
| 26 | | the explicit terms and length of the contract under Section
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| 1 | | 18-183 of the Property Tax Code, the tax imposed under |
| 2 | | subsections
(a) and (b) of this Section shall be increased |
| 3 | | for the taxable year
in which the taxpayer relocated its |
| 4 | | facility by an amount equal to the
amount of credit |
| 5 | | received by the taxpayer under this subsection (h). |
| 6 | | (i) Credit for Personal Property Tax Replacement Income |
| 7 | | Tax.
For tax years ending prior to December 31, 2003, a credit |
| 8 | | shall be allowed
against the tax imposed by
subsections (a) and |
| 9 | | (b) of this Section for the tax imposed by subsections (c)
and |
| 10 | | (d) of this Section. This credit shall be computed by |
| 11 | | multiplying the tax
imposed by subsections (c) and (d) of this |
| 12 | | Section by a fraction, the numerator
of which is base income |
| 13 | | allocable to Illinois and the denominator of which is
Illinois |
| 14 | | base income, and further multiplying the product by the tax |
| 15 | | rate
imposed by subsections (a) and (b) of this Section. |
| 16 | | Any credit earned on or after December 31, 1986 under
this |
| 17 | | subsection which is unused in the year
the credit is computed |
| 18 | | because it exceeds the tax liability imposed by
subsections (a) |
| 19 | | and (b) for that year (whether it exceeds the original
|
| 20 | | liability or the liability as later amended) may be carried |
| 21 | | forward and
applied to the tax liability imposed by subsections |
| 22 | | (a) and (b) of the 5
taxable years following the excess credit |
| 23 | | year, provided that no credit may
be carried forward to any |
| 24 | | year ending on or
after December 31, 2003. This credit shall be
|
| 25 | | applied first to the earliest year for which there is a |
| 26 | | liability. If
there is a credit under this subsection from more |
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| 1 | | than one tax year that is
available to offset a liability the |
| 2 | | earliest credit arising under this
subsection shall be applied |
| 3 | | first. |
| 4 | | If, during any taxable year ending on or after December 31, |
| 5 | | 1986, the
tax imposed by subsections (c) and (d) of this |
| 6 | | Section for which a taxpayer
has claimed a credit under this |
| 7 | | subsection (i) is reduced, the amount of
credit for such tax |
| 8 | | shall also be reduced. Such reduction shall be
determined by |
| 9 | | recomputing the credit to take into account the reduced tax
|
| 10 | | imposed by subsections (c) and (d). If any portion of the
|
| 11 | | reduced amount of credit has been carried to a different |
| 12 | | taxable year, an
amended return shall be filed for such taxable |
| 13 | | year to reduce the amount of
credit claimed. |
| 14 | | (j) Training expense credit. Beginning with tax years |
| 15 | | ending on or
after December 31, 1986 and prior to December 31, |
| 16 | | 2003, a taxpayer shall be
allowed a credit against the
tax |
| 17 | | imposed by subsections (a) and (b) under this Section
for all |
| 18 | | amounts paid or accrued, on behalf of all persons
employed by |
| 19 | | the taxpayer in Illinois or Illinois residents employed
outside |
| 20 | | of Illinois by a taxpayer, for educational or vocational |
| 21 | | training in
semi-technical or technical fields or semi-skilled |
| 22 | | or skilled fields, which
were deducted from gross income in the |
| 23 | | computation of taxable income. The
credit against the tax |
| 24 | | imposed by subsections (a) and (b) shall be 1.6% of
such |
| 25 | | training expenses. For partners, shareholders of subchapter S
|
| 26 | | corporations, and owners of limited liability companies, if the |
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| 1 | | liability
company is treated as a partnership for purposes of |
| 2 | | federal and State income
taxation, there shall be allowed a |
| 3 | | credit under this subsection (j) to be
determined in accordance |
| 4 | | with the determination of income and distributive
share of |
| 5 | | income under Sections 702 and 704 and subchapter S of the |
| 6 | | Internal
Revenue Code. |
| 7 | | Any credit allowed under this subsection which is unused in |
| 8 | | the year
the credit is earned may be carried forward to each of |
| 9 | | the 5 taxable
years following the year for which the credit is |
| 10 | | first computed until it is
used. This credit shall be applied |
| 11 | | first to the earliest year for which
there is a liability. If |
| 12 | | there is a credit under this subsection from more
than one tax |
| 13 | | year that is available to offset a liability the earliest
|
| 14 | | credit arising under this subsection shall be applied first. No |
| 15 | | carryforward
credit may be claimed in any tax year ending on or |
| 16 | | after
December 31, 2003. |
| 17 | | (k) Research and development credit. For tax years ending |
| 18 | | after July 1, 1990 and prior to
December 31, 2003, and |
| 19 | | beginning again for tax years ending on or after December 31, |
| 20 | | 2004, and ending prior to January 1, 2022, a taxpayer shall be
|
| 21 | | allowed a credit against the tax imposed by subsections (a) and |
| 22 | | (b) of this
Section for increasing research activities in this |
| 23 | | State. The credit
allowed against the tax imposed by |
| 24 | | subsections (a) and (b) shall be equal
to 6 1/2% of the |
| 25 | | qualifying expenditures for increasing research activities
in |
| 26 | | this State. For partners, shareholders of subchapter S |
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| 1 | | corporations, and
owners of limited liability companies, if the |
| 2 | | liability company is treated as a
partnership for purposes of |
| 3 | | federal and State income taxation, there shall be
allowed a |
| 4 | | credit under this subsection to be determined in accordance |
| 5 | | with the
determination of income and distributive share of |
| 6 | | income under Sections 702 and
704 and subchapter S of the |
| 7 | | Internal Revenue Code. |
| 8 | | For purposes of this subsection, "qualifying expenditures" |
| 9 | | means the
qualifying expenditures as defined for the federal |
| 10 | | credit for increasing
research activities which would be |
| 11 | | allowable under Section 41 of the
Internal Revenue Code and |
| 12 | | which are conducted in this State, "qualifying
expenditures for |
| 13 | | increasing research activities in this State" means the
excess |
| 14 | | of qualifying expenditures for the taxable year in which |
| 15 | | incurred
over qualifying expenditures for the base period, |
| 16 | | "qualifying expenditures
for the base period" means: for tax |
| 17 | | years ending prior to December 31, 2019, the average of the |
| 18 | | qualifying expenditures for
each year in the base period; and |
| 19 | | (2) for tax years ending on or after December 31, 2019, 50% of |
| 20 | | the average of the qualifying expenditures for each year in the |
| 21 | | base period. "Base , and "base period" means the 3 taxable years
|
| 22 | | immediately preceding the taxable year for which the |
| 23 | | determination is
being made. |
| 24 | | Any credit in excess of the tax liability for the taxable |
| 25 | | year
may be carried forward. A taxpayer may elect to have the
|
| 26 | | unused credit shown on its final completed return carried over |
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| 1 | | as a credit
against the tax liability for the carry forward |
| 2 | | period following 5 taxable years or until it has
been fully |
| 3 | | used, whichever occurs first; provided that no credit earned in |
| 4 | | a tax year ending prior to December 31, 2003 may be carried |
| 5 | | forward to any year ending on or after December 31, 2003. For |
| 6 | | purposes of this subsection, "carry forward period" means (i) |
| 7 | | for credits earned prior to the effective date of this |
| 8 | | amendatory Act of the 101st General Assembly, the following 5 |
| 9 | | taxable years or until the credit has
been fully used, |
| 10 | | whichever occurs first, and (ii) for credits earned on or after |
| 11 | | the effective date of this amendatory Act of the 101st General |
| 12 | | Assembly, the following 20 taxable years or until the credit |
| 13 | | has
been fully used, whichever occurs first. |
| 14 | | If an unused credit is carried forward to a given year from |
| 15 | | 2 or more
earlier years, that credit arising in the earliest |
| 16 | | year will be applied
first against the tax liability for the |
| 17 | | given year. If a tax liability for
the given year still |
| 18 | | remains, the credit from the next earliest year will
then be |
| 19 | | applied, and so on, until all credits have been used or no tax
|
| 20 | | liability for the given year remains. Any remaining unused |
| 21 | | credit or
credits then will be carried forward to the next |
| 22 | | following year in which a
tax liability is incurred, except |
| 23 | | that no credit can be carried forward to
a year which is more |
| 24 | | than 5 years after the year in which the expense for
which the |
| 25 | | credit is given was incurred. |
| 26 | | No inference shall be drawn from this amendatory Act of the |
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| 1 | | 91st General
Assembly in construing this Section for taxable |
| 2 | | years beginning before January
1, 1999. |
| 3 | | It is the intent of the General Assembly that the research |
| 4 | | and development credit under this subsection (k) shall apply |
| 5 | | continuously for all tax years ending on or after December 31, |
| 6 | | 2004 and ending prior to January 1, 2022, including, but not |
| 7 | | limited to, the period beginning on January 1, 2016 and ending |
| 8 | | on the effective date of this amendatory Act of the 100th |
| 9 | | General Assembly. All actions taken in reliance on the |
| 10 | | continuation of the credit under this subsection (k) by any |
| 11 | | taxpayer are hereby validated. |
| 12 | | This subsection is exempt from the provisions of Section |
| 13 | | 250 of this
Act. |
| 14 | | (l) Environmental Remediation Tax Credit. |
| 15 | | (i) For tax years ending after December 31, 1997 and on |
| 16 | | or before
December 31, 2001, a taxpayer shall be allowed a |
| 17 | | credit against the tax
imposed by subsections (a) and (b) |
| 18 | | of this Section for certain amounts paid
for unreimbursed |
| 19 | | eligible remediation costs, as specified in this |
| 20 | | subsection.
For purposes of this Section, "unreimbursed |
| 21 | | eligible remediation costs" means
costs approved by the |
| 22 | | Illinois Environmental Protection Agency ("Agency") under
|
| 23 | | Section 58.14 of the Environmental Protection Act that were |
| 24 | | paid in performing
environmental remediation at a site for |
| 25 | | which a No Further Remediation Letter
was issued by the |
| 26 | | Agency and recorded under Section 58.10 of the |
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| 1 | | Environmental
Protection Act. The credit must be claimed |
| 2 | | for the taxable year in which
Agency approval of the |
| 3 | | eligible remediation costs is granted. The credit is
not |
| 4 | | available to any taxpayer if the taxpayer or any related |
| 5 | | party caused or
contributed to, in any material respect, a |
| 6 | | release of regulated substances on,
in, or under the site |
| 7 | | that was identified and addressed by the remedial
action |
| 8 | | pursuant to the Site Remediation Program of the |
| 9 | | Environmental Protection
Act. After the Pollution Control |
| 10 | | Board rules are adopted pursuant to the
Illinois |
| 11 | | Administrative Procedure Act for the administration and |
| 12 | | enforcement of
Section 58.9 of the Environmental |
| 13 | | Protection Act, determinations as to credit
availability |
| 14 | | for purposes of this Section shall be made consistent with |
| 15 | | those
rules. For purposes of this Section, "taxpayer" |
| 16 | | includes a person whose tax
attributes the taxpayer has |
| 17 | | succeeded to under Section 381 of the Internal
Revenue Code |
| 18 | | and "related party" includes the persons disallowed a |
| 19 | | deduction
for losses by paragraphs (b), (c), and (f)(1) of |
| 20 | | Section 267 of the Internal
Revenue Code by virtue of being |
| 21 | | a related taxpayer, as well as any of its
partners. The |
| 22 | | credit allowed against the tax imposed by subsections (a) |
| 23 | | and
(b) shall be equal to 25% of the unreimbursed eligible |
| 24 | | remediation costs in
excess of $100,000 per site, except |
| 25 | | that the $100,000 threshold shall not apply
to any site |
| 26 | | contained in an enterprise zone as determined by the |
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| 1 | | Department of
Commerce and Community Affairs (now |
| 2 | | Department of Commerce and Economic Opportunity). The |
| 3 | | total credit allowed shall not exceed
$40,000 per year with |
| 4 | | a maximum total of $150,000 per site. For partners and
|
| 5 | | shareholders of subchapter S corporations, there shall be |
| 6 | | allowed a credit
under this subsection to be determined in |
| 7 | | accordance with the determination of
income and |
| 8 | | distributive share of income under Sections 702 and 704 and
|
| 9 | | subchapter S of the Internal Revenue Code. |
| 10 | | (ii) A credit allowed under this subsection that is |
| 11 | | unused in the year
the credit is earned may be carried |
| 12 | | forward to each of the 5 taxable years
following the year |
| 13 | | for which the credit is first earned until it is used.
The |
| 14 | | term "unused credit" does not include any amounts of |
| 15 | | unreimbursed eligible
remediation costs in excess of the |
| 16 | | maximum credit per site authorized under
paragraph (i). |
| 17 | | This credit shall be applied first to the earliest year
for |
| 18 | | which there is a liability. If there is a credit under this |
| 19 | | subsection
from more than one tax year that is available to |
| 20 | | offset a liability, the
earliest credit arising under this |
| 21 | | subsection shall be applied first. A
credit allowed under |
| 22 | | this subsection may be sold to a buyer as part of a sale
of |
| 23 | | all or part of the remediation site for which the credit |
| 24 | | was granted. The
purchaser of a remediation site and the |
| 25 | | tax credit shall succeed to the unused
credit and remaining |
| 26 | | carry-forward period of the seller. To perfect the
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| 1 | | transfer, the assignor shall record the transfer in the |
| 2 | | chain of title for the
site and provide written notice to |
| 3 | | the Director of the Illinois Department of
Revenue of the |
| 4 | | assignor's intent to sell the remediation site and the |
| 5 | | amount of
the tax credit to be transferred as a portion of |
| 6 | | the sale. In no event may a
credit be transferred to any |
| 7 | | taxpayer if the taxpayer or a related party would
not be |
| 8 | | eligible under the provisions of subsection (i). |
| 9 | | (iii) For purposes of this Section, the term "site" |
| 10 | | shall have the same
meaning as under Section 58.2 of the |
| 11 | | Environmental Protection Act. |
| 12 | | (m) Education expense credit. Beginning with tax years |
| 13 | | ending after
December 31, 1999, a taxpayer who
is the custodian |
| 14 | | of one or more qualifying pupils shall be allowed a credit
|
| 15 | | against the tax imposed by subsections (a) and (b) of this |
| 16 | | Section for
qualified education expenses incurred on behalf of |
| 17 | | the qualifying pupils.
The credit shall be equal to 25% of |
| 18 | | qualified education expenses, but in no
event may the total |
| 19 | | credit under this subsection claimed by a
family that is the
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| 20 | | custodian of qualifying pupils exceed (i) $500 for tax years |
| 21 | | ending prior to December 31, 2017, and (ii) $750 for tax years |
| 22 | | ending on or after December 31, 2017. In no event shall a |
| 23 | | credit under
this subsection reduce the taxpayer's liability |
| 24 | | under this Act to less than
zero. Notwithstanding any other |
| 25 | | provision of law, for taxable years beginning on or after |
| 26 | | January 1, 2017, no taxpayer may claim a credit under this |
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| 1 | | subsection (m) if the taxpayer's adjusted gross income for the |
| 2 | | taxable year exceeds (i) $500,000, in the case of spouses |
| 3 | | filing a joint federal tax return or (ii) $250,000, in the case |
| 4 | | of all other taxpayers. This subsection is exempt from the |
| 5 | | provisions of Section 250 of this
Act. |
| 6 | | For purposes of this subsection: |
| 7 | | "Qualifying pupils" means individuals who (i) are |
| 8 | | residents of the State of
Illinois, (ii) are under the age of |
| 9 | | 21 at the close of the school year for
which a credit is |
| 10 | | sought, and (iii) during the school year for which a credit
is |
| 11 | | sought were full-time pupils enrolled in a kindergarten through |
| 12 | | twelfth
grade education program at any school, as defined in |
| 13 | | this subsection. |
| 14 | | "Qualified education expense" means the amount incurred
on |
| 15 | | behalf of a qualifying pupil in excess of $250 for tuition, |
| 16 | | book fees, and
lab fees at the school in which the pupil is |
| 17 | | enrolled during the regular school
year. |
| 18 | | "School" means any public or nonpublic elementary or |
| 19 | | secondary school in
Illinois that is in compliance with Title |
| 20 | | VI of the Civil Rights Act of 1964
and attendance at which |
| 21 | | satisfies the requirements of Section 26-1 of the
School Code, |
| 22 | | except that nothing shall be construed to require a child to
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| 23 | | attend any particular public or nonpublic school to qualify for |
| 24 | | the credit
under this Section. |
| 25 | | "Custodian" means, with respect to qualifying pupils, an |
| 26 | | Illinois resident
who is a parent, the parents, a legal |
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| 1 | | guardian, or the legal guardians of the
qualifying pupils. |
| 2 | | (n) River Edge Redevelopment Zone site remediation tax |
| 3 | | credit.
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| 4 | | (i) For tax years ending on or after December 31, 2006, |
| 5 | | a taxpayer shall be allowed a credit against the tax |
| 6 | | imposed by subsections (a) and (b) of this Section for |
| 7 | | certain amounts paid for unreimbursed eligible remediation |
| 8 | | costs, as specified in this subsection. For purposes of |
| 9 | | this Section, "unreimbursed eligible remediation costs" |
| 10 | | means costs approved by the Illinois Environmental |
| 11 | | Protection Agency ("Agency") under Section 58.14a of the |
| 12 | | Environmental Protection Act that were paid in performing |
| 13 | | environmental remediation at a site within a River Edge |
| 14 | | Redevelopment Zone for which a No Further Remediation |
| 15 | | Letter was issued by the Agency and recorded under Section |
| 16 | | 58.10 of the Environmental Protection Act. The credit must |
| 17 | | be claimed for the taxable year in which Agency approval of |
| 18 | | the eligible remediation costs is granted. The credit is |
| 19 | | not available to any taxpayer if the taxpayer or any |
| 20 | | related party caused or contributed to, in any material |
| 21 | | respect, a release of regulated substances on, in, or under |
| 22 | | the site that was identified and addressed by the remedial |
| 23 | | action pursuant to the Site Remediation Program of the |
| 24 | | Environmental Protection Act. Determinations as to credit |
| 25 | | availability for purposes of this Section shall be made |
| 26 | | consistent with rules adopted by the Pollution Control |
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| 1 | | Board pursuant to the Illinois Administrative Procedure |
| 2 | | Act for the administration and enforcement of Section 58.9 |
| 3 | | of the Environmental Protection Act. For purposes of this |
| 4 | | Section, "taxpayer" includes a person whose tax attributes |
| 5 | | the taxpayer has succeeded to under Section 381 of the |
| 6 | | Internal Revenue Code and "related party" includes the |
| 7 | | persons disallowed a deduction for losses by paragraphs |
| 8 | | (b), (c), and (f)(1) of Section 267 of the Internal Revenue |
| 9 | | Code by virtue of being a related taxpayer, as well as any |
| 10 | | of its partners. The credit allowed against the tax imposed |
| 11 | | by subsections (a) and (b) shall be equal to 25% of the |
| 12 | | unreimbursed eligible remediation costs in excess of |
| 13 | | $100,000 per site. |
| 14 | | (ii) A credit allowed under this subsection that is |
| 15 | | unused in the year the credit is earned may be carried |
| 16 | | forward to each of the 5 taxable years following the year |
| 17 | | for which the credit is first earned until it is used. This |
| 18 | | credit shall be applied first to the earliest year for |
| 19 | | which there is a liability. If there is a credit under this |
| 20 | | subsection from more than one tax year that is available to |
| 21 | | offset a liability, the earliest credit arising under this |
| 22 | | subsection shall be applied first. A credit allowed under |
| 23 | | this subsection may be sold to a buyer as part of a sale of |
| 24 | | all or part of the remediation site for which the credit |
| 25 | | was granted. The purchaser of a remediation site and the |
| 26 | | tax credit shall succeed to the unused credit and remaining |
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| 1 | | carry-forward period of the seller. To perfect the |
| 2 | | transfer, the assignor shall record the transfer in the |
| 3 | | chain of title for the site and provide written notice to |
| 4 | | the Director of the Illinois Department of Revenue of the |
| 5 | | assignor's intent to sell the remediation site and the |
| 6 | | amount of the tax credit to be transferred as a portion of |
| 7 | | the sale. In no event may a credit be transferred to any |
| 8 | | taxpayer if the taxpayer or a related party would not be |
| 9 | | eligible under the provisions of subsection (i). |
| 10 | | (iii) For purposes of this Section, the term "site" |
| 11 | | shall have the same meaning as under Section 58.2 of the |
| 12 | | Environmental Protection Act. |
| 13 | | (o) For each of taxable years during the Compassionate Use |
| 14 | | of Medical Cannabis Pilot Program, a surcharge is imposed on |
| 15 | | all taxpayers on income arising from the sale or exchange of |
| 16 | | capital assets, depreciable business property, real property |
| 17 | | used in the trade or business, and Section 197 intangibles of |
| 18 | | an organization registrant under the Compassionate Use of |
| 19 | | Medical Cannabis Pilot Program Act. The amount of the surcharge |
| 20 | | is equal to the amount of federal income tax liability for the |
| 21 | | taxable year attributable to those sales and exchanges. The |
| 22 | | surcharge imposed does not apply if: |
| 23 | | (1) the medical cannabis cultivation center |
| 24 | | registration, medical cannabis dispensary registration, or |
| 25 | | the property of a registration is transferred as a result |
| 26 | | of any of the following: |
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| 1 | | (A) bankruptcy, a receivership, or a debt |
| 2 | | adjustment initiated by or against the initial |
| 3 | | registration or the substantial owners of the initial |
| 4 | | registration; |
| 5 | | (B) cancellation, revocation, or termination of |
| 6 | | any registration by the Illinois Department of Public |
| 7 | | Health; |
| 8 | | (C) a determination by the Illinois Department of |
| 9 | | Public Health that transfer of the registration is in |
| 10 | | the best interests of Illinois qualifying patients as |
| 11 | | defined by the Compassionate Use of Medical Cannabis |
| 12 | | Pilot Program Act; |
| 13 | | (D) the death of an owner of the equity interest in |
| 14 | | a registrant; |
| 15 | | (E) the acquisition of a controlling interest in |
| 16 | | the stock or substantially all of the assets of a |
| 17 | | publicly traded company; |
| 18 | | (F) a transfer by a parent company to a wholly |
| 19 | | owned subsidiary; or |
| 20 | | (G) the transfer or sale to or by one person to |
| 21 | | another person where both persons were initial owners |
| 22 | | of the registration when the registration was issued; |
| 23 | | or |
| 24 | | (2) the cannabis cultivation center registration, |
| 25 | | medical cannabis dispensary registration, or the |
| 26 | | controlling interest in a registrant's property is |