103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB2196
 
Introduced 2/10/2023, by Sen. Elgie R. Sims, Jr.
 
SYNOPSIS AS INTRODUCED:



          
35 ILCS 5/203 from Ch. 120, par. 2-203
70 ILCS 200/245-12
70 ILCS 750/25
70 ILCS 1605/30
70 ILCS 3610/5.01 from Ch. 111 2/3, par. 355.01
70 ILCS 3720/4 from Ch. 111 2/3, par. 254
410 ILCS 705/20-50
410 ILCS 705/60-10
410 ILCS 705/65-10

 Amends the Illinois Income Tax Act. Creates a deduction in an amount equal to the deductions and credits that were disallowed under Section 280E of the Internal Revenue Code for the taxable year. Amends the Civic Center Code, the Flood Prevention District Act, the Metro-East Park and Recreation District Act, the Local Mass Transit District Act, and the Water Commission Act of 1985 to provide that those special districts may not levy a tax upon the cultivation and processing of adult use cannabis. Effective immediately.



LRB103 25662 HLH 52011 b


 
 
A BILL FOR
 


SB2196LRB103 25662 HLH 52011 b



1 AN ACT concerning revenue.


2 Be it enacted by the People of the State of Illinois,

3represented in the General Assembly:



4 Section 5. The Illinois Income Tax Act is amended by 
5changing Section 203 as follows:

6 (35 ILCS 5/203) (from Ch. 120, par. 2-203)
7 Sec. 203. Base income defined. 
8 (a) Individuals.
9  (1) In general. In the case of an individual, base 
10 income means an
amount equal to the taxpayer's adjusted 
11 gross income for the taxable
year as modified by paragraph 
12 (2).
13  (2) Modifications. The adjusted gross income referred 
14 to in
paragraph (1) shall be modified by adding thereto 
15 the sum of the
following amounts:
16   (A) An amount equal to all amounts paid or accrued 
17 to the taxpayer
as interest or dividends during the 
18 taxable year to the extent excluded
from gross income 
19 in the computation of adjusted gross income, except 
20 stock
dividends of qualified public utilities 
21 described in Section 305(e) of the
Internal Revenue 
22 Code;
23   (B) An amount equal to the amount of tax imposed by 
 
 
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1 this Act to the
extent deducted from gross income in 
2 the computation of adjusted gross
income for the 
3 taxable year;
4   (C) An amount equal to the amount received during 
5 the taxable year
as a recovery or refund of real 
6 property taxes paid with respect to the
taxpayer's 
7 principal residence under the Revenue Act of
1939 and 
8 for which a deduction was previously taken under 
9 subparagraph (L) of
this paragraph (2) prior to July 
10 1, 1991, the retrospective application date of
Article 
11 4 of Public Act 87-17. In the case of multi-unit or 
12 multi-use
structures and farm dwellings, the taxes on 
13 the taxpayer's principal residence
shall be that 
14 portion of the total taxes for the entire property 
15 which is
attributable to such principal residence;
16   (D) An amount equal to the amount of the capital 
17 gain deduction
allowable under the Internal Revenue 
18 Code, to the extent deducted from gross
income in the 
19 computation of adjusted gross income;
20   (D-5) An amount, to the extent not included in 
21 adjusted gross income,
equal to the amount of money 
22 withdrawn by the taxpayer in the taxable year from
a 
23 medical care savings account and the interest earned 
24 on the account in the
taxable year of a withdrawal 
25 pursuant to subsection (b) of Section 20 of the

26 Medical Care Savings Account Act or subsection (b) of 
 
 
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1 Section 20 of the
Medical Care Savings Account Act of 
2 2000;
3   (D-10) For taxable years ending after December 31, 
4 1997, an
amount equal to any eligible remediation 
5 costs that the individual
deducted in computing 
6 adjusted gross income and for which the
individual 
7 claims a credit under subsection (l) of Section 201;
8   (D-15) For taxable years 2001 and thereafter, an 
9 amount equal to the
bonus depreciation deduction taken 
10 on the taxpayer's federal income tax return for the 
11 taxable
year under subsection (k) of Section 168 of 
12 the Internal Revenue Code;
13   (D-16) 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 the aggregate amount of the 
18 deductions taken in all taxable
years under 
19 subparagraph (Z) with respect to that property.
20   If the taxpayer continues to own property through 
21 the last day of the last tax year for which a 
22 subtraction is allowed with respect to that property 
23 under subparagraph (Z) and for which the taxpayer was 
24 allowed in any taxable year to make a subtraction 
25 modification under subparagraph (Z), then an amount 
26 equal to that subtraction modification.

 
 
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1   The taxpayer is required to make the addition 
2 modification under this
subparagraph
only once with 
3 respect to any one piece of property;
4   (D-17) An amount equal to the amount otherwise 
5 allowed as a deduction in computing base income for 
6 interest paid, accrued, or incurred, directly or 
7 indirectly, (i) for taxable years ending on or after 
8 December 31, 2004, to a foreign person who would be a 
9 member of the same unitary business group but for the 
10 fact that foreign person's business activity outside 
11 the United States is 80% or more of the foreign 
12 person's total business activity and (ii) for taxable 
13 years ending on or after December 31, 2008, to a person 
14 who would be a member of the same unitary business 
15 group but for the fact that the person is prohibited 
16 under Section 1501(a)(27) from being included in the 
17 unitary business group because he or she is ordinarily 
18 required to apportion business income under different 
19 subsections of Section 304. The addition modification 
20 required by this subparagraph shall be reduced to the 
21 extent that dividends were included in base income of 
22 the unitary group for the same taxable year and 
23 received by the taxpayer or by a member of the 
24 taxpayer's unitary business group (including amounts 
25 included in gross income under Sections 951 through 
26 964 of the Internal Revenue Code and amounts included 
 
 
SB2196- 5 -LRB103 25662 HLH 52011 b


1 in gross income under Section 78 of the Internal 
2 Revenue Code) with respect to the stock of the same 
3 person to whom the interest was paid, accrued, or 
4 incurred.
5   This paragraph shall not apply to the following:

6    (i) an item of interest paid, accrued, or 
7 incurred, directly or indirectly, to a person who 
8 is subject in a foreign country or state, other 
9 than a state which requires mandatory unitary 
10 reporting, to a tax on or measured by net income 
11 with respect to such interest; or
12    (ii) an item of interest paid, accrued, or 
13 incurred, directly or indirectly, to a person if 
14 the taxpayer can establish, based on a 
15 preponderance of the evidence, both of the 
16 following:
17     (a) the person, during the same taxable 
18 year, paid, accrued, or incurred, the interest 
19 to a person that is not a related member, and
20     (b) the transaction giving rise to the 
21 interest expense between the taxpayer and the 
22 person did not have as a principal purpose the 
23 avoidance of Illinois income tax, and is paid 
24 pursuant to a contract or agreement that 
25 reflects an arm's-length interest rate and 
26 terms; or

 
 
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1    (iii) the taxpayer can establish, based on 
2 clear and convincing evidence, that the interest 
3 paid, accrued, or incurred relates to a contract 
4 or agreement entered into at arm's-length rates 
5 and terms and the principal purpose for the 
6 payment is not federal or Illinois tax avoidance; 
7 or

8    (iv) an item of interest paid, accrued, or 
9 incurred, directly or indirectly, to a person if 
10 the taxpayer establishes by clear and convincing 
11 evidence that the adjustments are unreasonable; or 
12 if the taxpayer and the Director agree in writing 
13 to the application or use of an alternative method 
14 of apportionment under Section 304(f).

15    Nothing in this subsection shall preclude the 
16 Director from making any other adjustment 
17 otherwise allowed under Section 404 of this Act 
18 for any tax year beginning after the effective 
19 date of this amendment provided such adjustment is 
20 made pursuant to regulation adopted by the 
21 Department and such regulations provide methods 
22 and standards by which the Department will utilize 
23 its authority under Section 404 of this Act;

24   (D-18) An amount equal to the amount of intangible 
25 expenses and costs otherwise allowed as a deduction in 
26 computing base income, and that were paid, accrued, or 
 
 
SB2196- 7 -LRB103 25662 HLH 52011 b


1 incurred, directly or indirectly, (i) for taxable 
2 years ending on or after December 31, 2004, to a 
3 foreign person who would be a member of the same 
4 unitary business group but for the fact that the 
5 foreign person's business activity outside the United 
6 States is 80% or more of that person's total business 
7 activity and (ii) for taxable years ending on or after 
8 December 31, 2008, to a person who would be a member of 
9 the same unitary business group but for the fact that 
10 the person is prohibited under Section 1501(a)(27) 
11 from being included in the unitary business group 
12 because he or she is ordinarily required to apportion 
13 business income under different subsections of Section 
14 304. The addition modification required by this 
15 subparagraph shall be reduced to the extent that 
16 dividends were included in base income of the unitary 
17 group for the same taxable year and received by the 
18 taxpayer or by a member of the taxpayer's unitary 
19 business group (including amounts included in gross 
20 income under Sections 951 through 964 of the Internal 
21 Revenue Code and amounts included in gross income 
22 under Section 78 of the Internal Revenue Code) with 
23 respect to the stock of the same person to whom the 
24 intangible expenses and costs were directly or 
25 indirectly paid, incurred, or accrued. The preceding 
26 sentence does not apply to the extent that the same 
 
 
SB2196- 8 -LRB103 25662 HLH 52011 b


1 dividends caused a reduction to the addition 
2 modification required under Section 203(a)(2)(D-17) of 
3 this Act. As used in this subparagraph, the term 
4 "intangible expenses and costs" includes (1) expenses, 
5 losses, and costs for, or related to, the direct or 
6 indirect acquisition, use, maintenance or management, 
7 ownership, sale, exchange, or any other disposition of 
8 intangible property; (2) losses incurred, directly or 
9 indirectly, from factoring transactions or discounting 
10 transactions; (3) royalty, patent, technical, and 
11 copyright fees; (4) licensing fees; and (5) other 
12 similar expenses and costs.
For purposes of this 
13 subparagraph, "intangible property" includes patents, 
14 patent applications, trade names, trademarks, service 
15 marks, copyrights, mask works, trade secrets, and 
16 similar types of intangible assets.
17   This paragraph shall not apply to the following:
18    (i) any item of intangible expenses or costs 
19 paid, accrued, or incurred, directly or 
20 indirectly, from a transaction with 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 item; or
25    (ii) any item of intangible expense or cost 
26 paid, accrued, or incurred, directly or 
 
 
SB2196- 9 -LRB103 25662 HLH 52011 b


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

24    Nothing in this subsection shall preclude the 
25 Director from making any other adjustment 
26 otherwise allowed under Section 404 of this Act 
 
 
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1 for any tax year beginning after the effective 
2 date of this amendment provided such adjustment is 
3 made pursuant to regulation adopted by the 
4 Department and such regulations provide methods 
5 and standards by which the Department will utilize 
6 its authority under Section 404 of this Act;

7   (D-19) For taxable years ending on or after 
8 December 31, 2008, an amount equal to the amount of 
9 insurance premium expenses and costs otherwise allowed 
10 as a deduction in computing base income, and that were 
11 paid, accrued, or incurred, directly or indirectly, to 
12 a person who would be a member of the same unitary 
13 business group but for the fact that the person is 
14 prohibited under Section 1501(a)(27) from being 
15 included in the unitary business group because he or 
16 she is ordinarily required to apportion business 
17 income under different subsections of Section 304. The 
18 addition modification required by this subparagraph 
19 shall be reduced to the extent that dividends were 
20 included in base income of the unitary group for the 
21 same taxable year and received by the taxpayer or by a 
22 member of the taxpayer's unitary business group 
23 (including amounts included in gross income under 
24 Sections 951 through 964 of the Internal Revenue Code 
25 and amounts included in gross income under Section 78 
26 of the Internal Revenue Code) with respect to the 
 
 
SB2196- 11 -LRB103 25662 HLH 52011 b


1 stock of the same person to whom the premiums and costs 
2 were directly or indirectly paid, incurred, or 
3 accrued. The preceding sentence does not apply to the 
4 extent that the same dividends caused a reduction to 
5 the addition modification required under Section 
6 203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this 
7 Act;

8   (D-20) For taxable years beginning on or after 
9 January 1,
2002 and ending on or before December 31, 
10 2006, in
the
case of a distribution from a qualified 
11 tuition program under Section 529 of
the Internal 
12 Revenue Code, other than (i) a distribution from a 
13 College Savings
Pool created under Section 16.5 of the 
14 State Treasurer Act or (ii) a
distribution from the 
15 Illinois Prepaid Tuition Trust Fund, an amount equal 
16 to
the amount excluded from gross income under Section 
17 529(c)(3)(B). For taxable years beginning on or after 
18 January 1, 2007, in the case of a distribution from a 
19 qualified tuition program under Section 529 of the 
20 Internal Revenue Code, other than (i) a distribution 
21 from a College Savings Pool created under Section 16.5 
22 of the State Treasurer Act, (ii) a distribution from 
23 the Illinois Prepaid Tuition Trust Fund, or (iii) a 
24 distribution from a qualified tuition program under 
25 Section 529 of the Internal Revenue Code that (I) 
26 adopts and determines that its offering materials 
 
 
SB2196- 12 -LRB103 25662 HLH 52011 b


1 comply with the College Savings Plans Network's 
2 disclosure principles and (II) has made reasonable 
3 efforts to inform in-state residents of the existence 
4 of in-state qualified tuition programs by informing 
5 Illinois residents directly and, where applicable, to 
6 inform financial intermediaries distributing the 
7 program to inform in-state residents of the existence 
8 of in-state qualified tuition programs at least 
9 annually, an amount equal to the amount excluded from 
10 gross income under Section 529(c)(3)(B).
11   For the purposes of this subparagraph (D-20), a 
12 qualified tuition program has made reasonable efforts 
13 if it makes disclosures (which may use the term 
14 "in-state program" or "in-state plan" and need not 
15 specifically refer to Illinois or its qualified 
16 programs by name) (i) directly to prospective 
17 participants in its offering materials or makes a 
18 public disclosure, such as a website posting; and (ii) 
19 where applicable, to intermediaries selling the 
20 out-of-state program in the same manner that the 
21 out-of-state program distributes its offering 
22 materials;
23   (D-20.5) For taxable years beginning on or after 
24 January 1, 2018, in the case of a distribution from a 
25 qualified ABLE program under Section 529A of the 
26 Internal Revenue Code, other than a distribution from 
 
 
SB2196- 13 -LRB103 25662 HLH 52011 b


1 a qualified ABLE program created under Section 16.6 of 
2 the State Treasurer Act, an amount equal to the amount 
3 excluded from gross income under Section 529A(c)(1)(B) 
4 of the Internal Revenue Code; 
5   (D-21) For taxable years beginning on or after 
6 January 1, 2007, in the case of transfer of moneys from 
7 a qualified tuition program under Section 529 of the 
8 Internal Revenue Code that is administered by the 
9 State to an out-of-state program, an amount equal to 
10 the amount of moneys previously deducted from base 
11 income under subsection (a)(2)(Y) of this Section;
12   (D-21.5) For taxable years beginning on or after 
13 January 1, 2018, in the case of the transfer of moneys 
14 from a qualified tuition program under Section 529 or 
15 a qualified ABLE program under Section 529A of the 
16 Internal Revenue Code that is administered by this 
17 State to an ABLE account established under an 
18 out-of-state ABLE account program, an amount equal to 
19 the contribution component of the transferred amount 
20 that was previously deducted from base income under 
21 subsection (a)(2)(Y) or subsection (a)(2)(HH) of this 
22 Section; 
23   (D-22) For taxable years beginning on or after 
24 January 1, 2009, and prior to January 1, 2018, in the 
25 case of a nonqualified withdrawal or refund of moneys 
26 from a qualified tuition program under Section 529 of 
 
 
SB2196- 14 -LRB103 25662 HLH 52011 b


1 the Internal Revenue Code administered by the State 
2 that is not used for qualified expenses at an eligible 
3 education institution, an amount equal to the 
4 contribution component of the nonqualified withdrawal 
5 or refund that was previously deducted from base 
6 income under subsection (a)(2)(y) of this Section, 
7 provided that the withdrawal or refund did not result 
8 from the beneficiary's death or disability. For 
9 taxable years beginning on or after January 1, 2018: 
10 (1) in the case of a nonqualified withdrawal or 
11 refund, as defined under Section
16.5 of the State 
12 Treasurer Act, of moneys from a qualified tuition 
13 program under Section 529 of the Internal Revenue Code 
14 administered by the State, an amount equal to the 
15 contribution component of the nonqualified withdrawal 
16 or refund that was previously deducted from base

17 income under subsection (a)(2)(Y) of this Section, and 
18 (2) in the case of a nonqualified withdrawal or refund 
19 from a qualified ABLE program under Section 529A of 
20 the Internal Revenue Code administered by the State 
21 that is not used for qualified disability expenses, an 
22 amount equal to the contribution component of the 
23 nonqualified withdrawal or refund that was previously 
24 deducted from base income under subsection (a)(2)(HH) 
25 of this Section;
26   (D-23) An amount equal to the credit allowable to 
 
 
SB2196- 15 -LRB103 25662 HLH 52011 b


1 the taxpayer under Section 218(a) of this Act, 
2 determined without regard to Section 218(c) of this 
3 Act;
4   (D-24) For taxable years ending on or after 
5 December 31, 2017, an amount equal to the deduction 
6 allowed under Section 199 of the Internal Revenue Code 
7 for the taxable year; 
8   (D-25) In the case of a resident, an amount equal 
9 to the amount of tax for which a credit is allowed 
10 pursuant to Section 201(p)(7) of this Act; 
11 and by deducting from the total so obtained the
sum of the 
12 following amounts:
13   (E) For taxable years ending before December 31, 
14 2001,
any amount included in such total in respect of 
15 any compensation
(including but not limited to any 
16 compensation paid or accrued to a
serviceman while a 
17 prisoner of war or missing in action) paid to a 
18 resident
by reason of being on active duty in the Armed 
19 Forces of the United States
and in respect of any 
20 compensation paid or accrued to a resident who as a

21 governmental employee was a prisoner of war or missing 
22 in action, and in
respect of any compensation paid to a 
23 resident in 1971 or thereafter for
annual training 
24 performed pursuant to Sections 502 and 503, Title 32,

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

26 retired partners, which payments are excluded in 
 
 
SB2196- 17 -LRB103 25662 HLH 52011 b


1 computing net earnings
from self employment by Section 
2 1402 of the Internal Revenue Code and
regulations 
3 adopted pursuant 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 
9 such total pursuant
to the provisions of Section 111 
10 of the Internal Revenue Code as a
recovery of items 
11 previously deducted from adjusted gross income in the

12 computation 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 
25 a High Impact
Business located in Illinois; provided 
26 that dividends eligible for the
deduction provided in 
 
 
SB2196- 18 -LRB103 25662 HLH 52011 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 
8 Internal 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(a)(2) of the Internal Revenue Code, 
13 and all amounts of expenses allocable
to interest and 
14 disallowed as deductions by Section 265(a)(1) of the 
15 Internal
Revenue Code;
and (ii) for taxable years

16 ending on or after August 13, 1999, Sections 
17 171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of the 
18 Internal Revenue Code, plus, for taxable years ending 
19 on or after December 31, 2011, Section 45G(e)(3) of 
20 the Internal Revenue Code and, for taxable years 
21 ending on or after December 31, 2008, any amount 
22 included in gross income under Section 87 of the 
23 Internal Revenue Code; the provisions of this

24 subparagraph are exempt from the provisions of Section 
25 250;
26   (N) An amount equal to all amounts included in 
 
 
SB2196- 19 -LRB103 25662 HLH 52011 b


1 such total which are
exempt from taxation by this 
2 State either by reason of its statutes or
Constitution

3 or by reason of the Constitution, treaties or statutes 
4 of the United States;
provided that, in the case of any 
5 statute of this State that exempts income
derived from 
6 bonds or other obligations from the tax imposed under 
7 this Act,
the amount exempted shall be the interest 
8 net of bond premium amortization;
9   (O) An amount equal to any contribution made to a 
10 job training
project established pursuant to the Tax 
11 Increment Allocation Redevelopment Act;
12   (P) An amount equal to the amount of the deduction 
13 used to compute the
federal income tax credit for 
14 restoration of substantial amounts held under
claim of 
15 right for the taxable year pursuant to Section 1341 of 
16 the
Internal Revenue Code or of any itemized deduction 
17 taken from adjusted gross income in the computation of 
18 taxable income for restoration of substantial amounts 
19 held under claim of right for the taxable year;
20   (Q) An amount equal to any amounts included in 
21 such total, received by
the taxpayer as an 
22 acceleration in the payment of life, endowment or 
23 annuity
benefits in advance of the time they would 
24 otherwise be payable as an indemnity
for a terminal 
25 illness;
26   (R) An amount equal to the amount of any federal or 
 
 
SB2196- 20 -LRB103 25662 HLH 52011 b


1 State bonus paid
to veterans of the Persian Gulf War;
2   (S) An amount, to the extent included in adjusted 
3 gross income, equal
to the amount of a contribution 
4 made in the taxable year on behalf of the
taxpayer to a 
5 medical care savings account established under the 
6 Medical Care
Savings Account Act or the Medical Care 
7 Savings Account Act of 2000 to the
extent the 
8 contribution is accepted by the account
administrator 
9 as provided in that Act;
10   (T) An amount, to the extent included in adjusted 
11 gross income, equal to
the amount of interest earned 
12 in the taxable year on a medical care savings
account 
13 established under the Medical Care Savings Account Act 
14 or the Medical
Care Savings Account Act of 2000 on 
15 behalf of the
taxpayer, other than interest added 
16 pursuant to item (D-5) of this paragraph
(2);
17   (U) For one taxable year beginning on or after 
18 January 1,
1994, an
amount equal to the total amount of 
19 tax imposed and paid under subsections (a)
and (b) of 
20 Section 201 of this Act on grant amounts received by 
21 the taxpayer
under the Nursing Home Grant Assistance 
22 Act during the taxpayer's taxable years
1992 and 1993;
23   (V) Beginning with tax years ending on or after 
24 December 31, 1995 and
ending with tax years ending on 
25 or before December 31, 2004, an amount equal to
the 
26 amount paid by a taxpayer who is a
self-employed 
 
 
SB2196- 21 -LRB103 25662 HLH 52011 b


1 taxpayer, a partner of a partnership, or a
shareholder 
2 in a Subchapter S corporation for health insurance or 
3 long-term
care insurance for that taxpayer or that 
4 taxpayer's spouse or dependents, to
the extent that 
5 the amount paid for that health insurance or long-term 
6 care
insurance may be deducted under Section 213 of 
7 the Internal Revenue Code, has not been deducted on 
8 the federal income tax return of the taxpayer,
and 
9 does not exceed the taxable income attributable to 
10 that taxpayer's income,
self-employment income, or 
11 Subchapter S corporation income; except that no

12 deduction shall be allowed under this item (V) if the 
13 taxpayer is eligible to
participate in any health 
14 insurance or long-term care insurance plan of an

15 employer of the taxpayer or the taxpayer's
spouse. The 
16 amount of the health insurance and long-term care 
17 insurance
subtracted under this item (V) shall be 
18 determined by multiplying total
health insurance and 
19 long-term care insurance premiums paid by the taxpayer

20 times a number that represents the fractional 
21 percentage of eligible medical
expenses under Section 
22 213 of the Internal Revenue Code of 1986 not actually

23 deducted on the taxpayer's federal income tax return;
24   (W) For taxable years beginning on or after 
25 January 1, 1998,
all amounts included in the 
26 taxpayer's federal gross income
in the taxable year 
 
 
SB2196- 22 -LRB103 25662 HLH 52011 b


1 from amounts converted from a regular IRA to a Roth 
2 IRA.
This paragraph is exempt from the provisions of 
3 Section
250;
4   (X) For taxable year 1999 and thereafter, an 
5 amount equal to the
amount of any (i) distributions, 
6 to the extent includible in gross income for
federal 
7 income tax purposes, made to the taxpayer because of 
8 his or her status
as a victim of persecution for racial 
9 or religious reasons by Nazi Germany or
any other Axis 
10 regime or as an heir of the victim and (ii) items
of 
11 income, to the extent
includible in gross income for 
12 federal income tax purposes, attributable to,
derived 
13 from or in any way related to assets stolen from, 
14 hidden from, or
otherwise lost to a victim of

15 persecution for racial or religious reasons by Nazi 
16 Germany or any other Axis
regime immediately prior to, 
17 during, and immediately after World War II,
including, 
18 but
not limited to, interest on the proceeds 
19 receivable as insurance
under policies issued to a 
20 victim of persecution for racial or religious
reasons

21 by Nazi Germany or any other Axis regime by European 
22 insurance companies
immediately prior to and during 
23 World War II;
provided, however, this subtraction from 
24 federal adjusted gross income does not
apply to assets 
25 acquired with such assets or with the proceeds from 
26 the sale of
such assets; provided, further, this 
 
 
SB2196- 23 -LRB103 25662 HLH 52011 b


1 paragraph shall only apply to a taxpayer
who was the 
2 first recipient of such assets after their recovery 
3 and who is a
victim of persecution for racial or 
4 religious reasons
by Nazi Germany or any other Axis 
5 regime or as an heir of the victim. The
amount of and 
6 the eligibility for any public assistance, benefit, or

7 similar entitlement is not affected by the inclusion 
8 of items (i) and (ii) of
this paragraph in gross income 
9 for federal income tax purposes.
This paragraph is 
10 exempt from the provisions of Section 250;
11   (Y) For taxable years beginning on or after 
12 January 1, 2002
and ending
on or before December 31, 
13 2004, moneys contributed in the taxable year to a 
14 College Savings Pool account under
Section 16.5 of the 
15 State Treasurer Act, except that amounts excluded from

16 gross income under Section 529(c)(3)(C)(i) of the 
17 Internal Revenue Code
shall not be considered moneys 
18 contributed under this subparagraph (Y). For taxable 
19 years beginning on or after January 1, 2005, a maximum 
20 of $10,000
contributed
in the
taxable year to (i) a 
21 College Savings Pool account under Section 16.5 of the

22 State
Treasurer Act or (ii) the Illinois Prepaid 
23 Tuition Trust Fund,
except that
amounts excluded from 
24 gross income under Section 529(c)(3)(C)(i) of the

25 Internal
Revenue Code shall not be considered moneys 
26 contributed under this subparagraph
(Y). For purposes 
 
 
SB2196- 24 -LRB103 25662 HLH 52011 b


1 of this subparagraph, contributions made by an 
2 employer on behalf of an employee, or matching 
3 contributions made by an employee, shall be treated as 
4 made by the employee. This
subparagraph (Y) is exempt 
5 from the provisions of Section 250;
6   (Z) For taxable years 2001 and thereafter, for the 
7 taxable year in
which the bonus depreciation deduction

8 is taken on the taxpayer's federal income tax return 
9 under
subsection (k) of Section 168 of the Internal 
10 Revenue Code and for each
applicable taxable year 
11 thereafter, an amount equal to "x", where:
12    (1) "y" equals the amount of the depreciation 
13 deduction taken for the
taxable year
on the 
14 taxpayer's federal income tax return on property 
15 for which the bonus
depreciation deduction
was 
16 taken in any year under subsection (k) of Section 
17 168 of the Internal
Revenue Code, but not 
18 including the bonus depreciation deduction;
19    (2) for taxable years ending on or before 
20 December 31, 2005, "x" equals "y" multiplied by 30 
21 and then divided by 70 (or "y"
multiplied by 
22 0.429); and
23    (3) for taxable years ending after December 
24 31, 2005:
25     (i) for property on which a bonus 
26 depreciation deduction of 30% of the adjusted 
 
 
SB2196- 25 -LRB103 25662 HLH 52011 b


1 basis was taken, "x" equals "y" multiplied by 
2 30 and then divided by 70 (or "y"
multiplied 
3 by 0.429);
4     (ii) for property on which a bonus 
5 depreciation deduction of 50% of the adjusted 
6 basis was taken, "x" equals "y" multiplied by 
7 1.0;
8     (iii) for property on which a bonus 
9 depreciation deduction of 100% of the adjusted 
10 basis was taken in a taxable year ending on or 
11 after December 31, 2021, "x" equals the 
12 depreciation deduction that would be allowed 
13 on that property if the taxpayer had made the 
14 election under Section 168(k)(7) of the 
15 Internal Revenue Code to not claim bonus 
16 depreciation on that property; and
17     (iv) for property on which a bonus 
18 depreciation deduction of a percentage other 
19 than 30%, 50% or 100% of the adjusted basis 
20 was taken in a taxable year ending on or after 
21 December 31, 2021, "x" equals "y" multiplied 
22 by 100 times the percentage bonus depreciation 
23 on the property (that is, 100(bonus%)) and 
24 then divided by 100 times 1 minus the 
25 percentage bonus depreciation on the property 
26 (that is, 100(1–bonus%)). 
 
 
SB2196- 26 -LRB103 25662 HLH 52011 b


1   The aggregate amount deducted under this 
2 subparagraph in all taxable
years for any one piece of 
3 property may not exceed the amount of the bonus

4 depreciation deduction
taken on that property on the 
5 taxpayer's federal income tax return under
subsection 
6 (k) of Section 168 of the Internal Revenue Code. This 
7 subparagraph (Z) is exempt from the provisions of 
8 Section 250;
9   (AA) If the taxpayer sells, transfers, abandons, 
10 or otherwise disposes of
property for which the 
11 taxpayer was required in any taxable year to make an

12 addition modification under subparagraph (D-15), then 
13 an amount equal to that
addition modification.

14   If the taxpayer continues to own property through 
15 the last day of the last tax year for which a 
16 subtraction is allowed with respect to that property 
17 under subparagraph (Z) and for which the taxpayer was 
18 required in any taxable year to make an addition 
19 modification under subparagraph (D-15), then an amount 
20 equal to that addition modification.

21   The taxpayer is allowed to take the deduction 
22 under this subparagraph
only once with respect to any 
23 one piece of property.
24   This subparagraph (AA) is exempt from the 
25 provisions of Section 250;
26   (BB) Any amount included in adjusted gross income, 
 
 
SB2196- 27 -LRB103 25662 HLH 52011 b


1 other
than
salary,
received by a driver in a 
2 ridesharing arrangement using a motor vehicle;
3   (CC) The amount of (i) any interest income (net of 
4 the deductions allocable thereto) taken into account 
5 for the taxable year with respect to a transaction 
6 with a taxpayer that is required to make an addition 
7 modification with respect to such transaction under 
8 Section 203(a)(2)(D-17), 203(b)(2)(E-12), 
9 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed 
10 the amount of that addition modification, and
(ii) any 
11 income from intangible property (net of the deductions 
12 allocable thereto) taken into account for the taxable 
13 year with respect to a transaction with a taxpayer 
14 that is required to make an addition modification with 
15 respect to such transaction under Section 
16 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or 
17 203(d)(2)(D-8), but not to exceed the amount of that 
18 addition modification. This subparagraph (CC) is 
19 exempt from the provisions of Section 250;
20   (DD) An amount equal to the interest income taken 
21 into account for the taxable year (net of the 
22 deductions allocable thereto) with respect to 
23 transactions with (i) a foreign person who would be a 
24 member of the taxpayer's unitary business group but 
25 for the fact that the foreign person's business 
26 activity outside the United States is 80% or more of 
 
 
SB2196- 28 -LRB103 25662 HLH 52011 b


1 that person's total business activity and (ii) for 
2 taxable years ending on or after December 31, 2008, to 
3 a person who would be a member of the same unitary 
4 business group but for the fact that the person is 
5 prohibited under Section 1501(a)(27) from being 
6 included in the unitary business group because he or 
7 she is ordinarily required to apportion business 
8 income under different subsections of Section 304, but 
9 not to exceed the addition modification required to be 
10 made for the same taxable year under Section 
11 203(a)(2)(D-17) for interest paid, accrued, or 
12 incurred, directly or indirectly, to the same person. 
13 This subparagraph (DD) is exempt from the provisions 
14 of Section 250; 
15   (EE) An amount equal to the income from intangible 
16 property taken into account for the taxable year (net 
17 of the deductions allocable thereto) with respect to 
18 transactions with (i) a foreign person who would be a 
19 member of the taxpayer's unitary business group but 
20 for the fact that the foreign person's business 
21 activity outside the United States is 80% or more of 
22 that person's total business activity and (ii) for 
23 taxable years ending on or after December 31, 2008, to 
24 a person who would be a member of the same unitary 
25 business group but for the fact that the person is 
26 prohibited under Section 1501(a)(27) from being 
 
 
SB2196- 29 -LRB103 25662 HLH 52011 b


1 included in the unitary business group because he or 
2 she is ordinarily required to apportion business 
3 income under different subsections of Section 304, but 
4 not to exceed the addition modification required to be 
5 made for the same taxable year under Section 
6 203(a)(2)(D-18) for intangible expenses and costs 
7 paid, accrued, or incurred, directly or indirectly, to 
8 the same foreign person. This subparagraph (EE) is 
9 exempt from the provisions of Section 250;
10   (FF) An amount equal to any amount awarded to the 
11 taxpayer during the taxable year by the Court of 
12 Claims under subsection (c) of Section 8 of the Court 
13 of Claims Act for time unjustly served in a State 
14 prison. This subparagraph (FF) is exempt from the 
15 provisions of Section 250; 
16   (GG) For taxable years ending on or after December 
17 31, 2011, in the case of a taxpayer who was required to 
18 add back any insurance premiums under Section 
19 203(a)(2)(D-19), such taxpayer may elect to subtract 
20 that part of a reimbursement received from the 
21 insurance company equal to the amount of the expense 
22 or loss (including expenses incurred by the insurance 
23 company) that would have been taken into account as a 
24 deduction for federal income tax purposes if the 
25 expense or loss had been uninsured. If a taxpayer 
26 makes the election provided for by this subparagraph 
 
 
SB2196- 30 -LRB103 25662 HLH 52011 b


1 (GG), the insurer to which the premiums were paid must 
2 add back to income the amount subtracted by the 
3 taxpayer pursuant to this subparagraph (GG). This 
4 subparagraph (GG) is exempt from the provisions of 
5 Section 250; 
6   (HH) For taxable years beginning on or after 
7 January 1, 2018 and prior to January 1, 2028, a maximum 
8 of $10,000 contributed in the taxable year to a 
9 qualified ABLE account under Section 16.6 of the State 
10 Treasurer Act, except that amounts excluded from gross 
11 income under Section 529(c)(3)(C)(i) or Section 
12 529A(c)(1)(C) of the Internal Revenue Code shall not 
13 be considered moneys contributed under this 
14 subparagraph (HH). For purposes of this subparagraph 
15 (HH), contributions made by an employer on behalf of 
16 an employee, or matching contributions made by an 
17 employee, shall be treated as made by the employee; 
18 and 
19   (II) For taxable years that begin on or after 
20 January 1, 2021 and begin before January 1, 2026, the 
21 amount that is included in the taxpayer's federal 
22 adjusted gross income pursuant to Section 61 of the 
23 Internal Revenue Code as discharge of indebtedness 
24 attributable to student loan forgiveness and that is 
25 not excluded from the taxpayer's federal adjusted 
26 gross income pursuant to paragraph (5) of subsection 
 
 
SB2196- 31 -LRB103 25662 HLH 52011 b


1 (f) of Section 108 of the Internal Revenue Code; and . 
2   (JJ) For taxable years beginning on or after 
3 January 1, 2024, for any cannabis establishment 
4 operating in this State and licensed under the 
5 Cannabis Regulation and Tax Act or any cannabis 
6 cultivation center or medical cannabis dispensing 
7 organization operating in this State and licensed 
8 under the Compassionate Use of Cannabis Program Act, 
9 an amount equal to the deductions and credits that 
10 were disallowed under Section 280E of the Internal 
11 Revenue Code for the taxable year and that would not be 
12 added back under this subsection. The provisions of 
13 this subparagraph (JJ) are exempt from the provisions 
14 of Section 250. 

15 (b) Corporations.
16  (1) In general. In the case of a corporation, 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 and all distributions 
24 received from regulated investment
companies during 
25 the taxable year to the extent excluded from gross

 
 
SB2196- 32 -LRB103 25662 HLH 52011 b


1 income in the computation of taxable income;
2   (B) An amount equal to the amount of tax imposed by 
3 this Act to the
extent deducted from gross income in 
4 the computation of taxable income
for the taxable 
5 year;
6   (C) In the case of a regulated investment company, 
7 an amount equal to
the excess of (i) the net long-term 
8 capital gain for the taxable year, over
(ii) the 
9 amount of the capital gain dividends designated as 
10 such in accordance
with Section 852(b)(3)(C) of the 
11 Internal Revenue Code and any amount
designated under 
12 Section 852(b)(3)(D) of the Internal Revenue Code,

13 attributable to the taxable year (this amendatory Act 
14 of 1995
(Public Act 89-89) is declarative of existing 
15 law and is not a new
enactment);
16   (D) The amount of any net operating loss deduction 
17 taken in arriving
at taxable income, other than a net 
18 operating loss carried forward from a
taxable year 
19 ending prior to December 31, 1986;
20   (E) For taxable years in which a net operating 
21 loss carryback or
carryforward from a taxable year 
22 ending prior to December 31, 1986 is an
element of 
23 taxable income under paragraph (1) of subsection (e) 
24 or
subparagraph (E) of paragraph (2) of subsection 
25 (e), the amount by which
addition modifications other 
26 than those provided by this subparagraph (E)
exceeded 
 
 
SB2196- 33 -LRB103 25662 HLH 52011 b


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

20 31, 1986, the addition modification provided in this 
21 subparagraph (E) shall
be the sum of the amounts 
22 computed independently under the preceding
provisions 
23 of this subparagraph (E) for each such taxable year;
24   (E-5) For taxable years ending after December 31, 
25 1997, an
amount equal to any eligible remediation 
26 costs that the corporation
deducted in computing 
 
 
SB2196- 34 -LRB103 25662 HLH 52011 b


1 adjusted gross income and for which the
corporation 
2 claims a credit under subsection (l) of Section 201;
3   (E-10) For taxable years 2001 and thereafter, an 
4 amount equal to the
bonus depreciation deduction taken 
5 on the taxpayer's federal income tax return for the 
6 taxable
year under subsection (k) of Section 168 of 
7 the Internal Revenue Code;
8   (E-11) If the taxpayer sells, transfers, abandons, 
9 or otherwise disposes of property for which the 
10 taxpayer was required in any taxable year to
make an 
11 addition modification under subparagraph (E-10), then 
12 an amount equal
to the aggregate amount of the 
13 deductions taken in all taxable
years under 
14 subparagraph (T) with respect to that property.
15   If the taxpayer continues to own property through 
16 the last day of the last tax year for which a 
17 subtraction is allowed with respect to that property 
18 under subparagraph (T) and for which the taxpayer was 
19 allowed in any taxable year to make a subtraction 
20 modification under subparagraph (T), then an amount 
21 equal to that subtraction modification.

22   The taxpayer is required to make the addition 
23 modification under this
subparagraph
only once with 
24 respect to any one piece of property;
25   (E-12) An amount equal to the amount otherwise 
26 allowed as a deduction in computing base income for 
 
 
SB2196- 35 -LRB103 25662 HLH 52011 b


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

26   This paragraph shall not apply to the following:

 
 
SB2196- 36 -LRB103 25662 HLH 52011 b


1    (i) an item of interest paid, accrued, or 
2 incurred, directly or indirectly, to a person who 
3 is subject in a foreign country or state, other 
4 than a state which requires mandatory unitary 
5 reporting, to a tax on or measured by net income 
6 with respect to such interest; or
7    (ii) an item of interest paid, accrued, or 
8 incurred, directly or indirectly, to a person if 
9 the taxpayer can establish, based on a 
10 preponderance of the evidence, both of the 
11 following:
12     (a) the person, during the same taxable 
13 year, paid, accrued, or incurred, the interest 
14 to a person that is not a related member, and
15     (b) the transaction giving rise to the 
16 interest expense between the taxpayer and the 
17 person did not have as a principal purpose the 
18 avoidance of Illinois income tax, and is paid 
19 pursuant to a contract or agreement that 
20 reflects an arm's-length interest rate and 
21 terms; or

22    (iii) the taxpayer can establish, based on 
23 clear and convincing evidence, that the interest 
24 paid, accrued, or incurred relates to a contract 
25 or agreement entered into at arm's-length rates 
26 and terms and the principal purpose for the 
 
 
SB2196- 37 -LRB103 25662 HLH 52011 b


1 payment is not federal or Illinois tax avoidance; 
2 or

3    (iv) an item of interest paid, accrued, or 
4 incurred, directly or indirectly, to a person if 
5 the taxpayer establishes by clear and convincing 
6 evidence that the adjustments are unreasonable; or 
7 if the taxpayer and the Director agree in writing 
8 to the application or use of an alternative method 
9 of apportionment under Section 304(f).

10    Nothing in this subsection shall preclude the 
11 Director from making any other adjustment 
12 otherwise allowed under Section 404 of this Act 
13 for any tax year beginning after the effective 
14 date of this amendment provided such adjustment is 
15 made pursuant to regulation adopted by the 
16 Department and such regulations provide methods 
17 and standards by which the Department will utilize 
18 its authority under Section 404 of this Act;

19   (E-13) An amount equal to the amount of intangible 
20 expenses and costs otherwise allowed as a deduction in 
21 computing base income, and that were paid, accrued, or 
22 incurred, directly or indirectly, (i) for taxable 
23 years ending on or after December 31, 2004, to a 
24 foreign person who would be a member of the same 
25 unitary business group but for the fact that the 
26 foreign person's business activity outside the United 
 
 
SB2196- 38 -LRB103 25662 HLH 52011 b


1 States is 80% or more of that person's total business 
2 activity and (ii) for taxable years ending on or after 
3 December 31, 2008, to a person who would be a member of 
4 the same unitary business group but for the fact that 
5 the person is prohibited under Section 1501(a)(27) 
6 from being included in the unitary business group 
7 because he or she is ordinarily required to apportion 
8 business income under different subsections of Section 
9 304. The addition modification required by this 
10 subparagraph shall be reduced to the extent that 
11 dividends were included in base income of the unitary 
12 group for the same taxable year and received by the 
13 taxpayer or by a member of the taxpayer's unitary 
14 business group (including amounts included in gross 
15 income pursuant to Sections 951 through 964 of the 
16 Internal Revenue Code and amounts included in gross 
17 income under Section 78 of the Internal Revenue Code) 
18 with respect to the stock of the same person to whom 
19 the intangible expenses and costs were directly or 
20 indirectly paid, incurred, or accrued. The preceding 
21 sentence shall not apply to the extent that the same 
22 dividends caused a reduction to the addition 
23 modification required under Section 203(b)(2)(E-12) of 
24 this Act.
As used in this subparagraph, the term 
25 "intangible expenses and costs" includes (1) expenses, 
26 losses, and costs for, or related to, the direct or 
 
 
SB2196- 39 -LRB103 25662 HLH 52011 b


1 indirect acquisition, use, maintenance or management, 
2 ownership, sale, exchange, or any other disposition of 
3 intangible property; (2) losses incurred, directly or 
4 indirectly, from factoring transactions or discounting 
5 transactions; (3) royalty, patent, technical, and 
6 copyright fees; (4) licensing fees; and (5) other 
7 similar expenses and costs.
For purposes of this 
8 subparagraph, "intangible property" includes patents, 
9 patent applications, trade names, trademarks, service 
10 marks, copyrights, mask works, trade secrets, and 
11 similar types of intangible assets.
12   This paragraph shall not apply to the following:
13    (i) any item of intangible expenses or costs 
14 paid, accrued, or incurred, directly or 
15 indirectly, from a transaction with a person who 
16 is subject in a foreign country or state, other 
17 than a state which requires mandatory unitary 
18 reporting, to a tax on or measured by net income 
19 with respect to such item; or
20    (ii) any item of intangible expense or cost 
21 paid, accrued, or incurred, directly or 
22 indirectly, if the taxpayer can establish, based 
23 on a preponderance of the evidence, both of the 
24 following:
25     (a) the person during the same taxable 
26 year paid, accrued, or incurred, the 
 
 
SB2196- 40 -LRB103 25662 HLH 52011 b


1 intangible expense or cost to a person that is 
2 not a related member, and
3     (b) the transaction giving rise to the 
4 intangible expense or cost between the 
5 taxpayer and the person did not have as a 
6 principal purpose the avoidance of Illinois 
7 income tax, and is paid pursuant to a contract 
8 or agreement that reflects arm's-length terms; 
9 or
10    (iii) any item of intangible expense or cost 
11 paid, accrued, or incurred, directly or 
12 indirectly, from a transaction with a person if 
13 the taxpayer establishes by clear and convincing 
14 evidence, that the adjustments are unreasonable; 
15 or if the taxpayer and the Director agree in 
16 writing to the application or use of an 
17 alternative method of apportionment under Section 
18 304(f);

19    Nothing in this subsection shall preclude the 
20 Director from making any other adjustment 
21 otherwise allowed under Section 404 of this Act 
22 for any tax year beginning after the effective 
23 date of this amendment provided such adjustment is 
24 made pursuant to regulation adopted by the 
25 Department and such regulations provide methods 
26 and standards by which the Department will utilize 
 
 
SB2196- 41 -LRB103 25662 HLH 52011 b


1 its authority under Section 404 of this Act;

2   (E-14) For taxable years ending on or after 
3 December 31, 2008, an amount equal to the amount of 
4 insurance premium expenses and costs otherwise allowed 
5 as a deduction in computing base income, and that were 
6 paid, accrued, or incurred, directly or indirectly, to 
7 a person who would be a member of the same unitary 
8 business group but for the fact that the person is 
9 prohibited under Section 1501(a)(27) from being 
10 included in the unitary business group because he or 
11 she is ordinarily required to apportion business 
12 income under different subsections of Section 304. The 
13 addition modification required by this subparagraph 
14 shall be reduced to the extent that dividends were 
15 included in base income of the unitary group for the 
16 same taxable year and received by the taxpayer or by a 
17 member of the taxpayer's unitary business group 
18 (including amounts included in gross income under 
19 Sections 951 through 964 of the Internal Revenue Code 
20 and amounts included in gross income under Section 78 
21 of the Internal Revenue Code) with respect to the 
22 stock of the same person to whom the premiums and costs 
23 were directly or indirectly paid, incurred, or 
24 accrued. The preceding sentence does not apply to the 
25 extent that the same dividends caused a reduction to 
26 the addition modification required under Section 
 
 
SB2196- 42 -LRB103 25662 HLH 52011 b


1 203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this 
2 Act;

3   (E-15) For taxable years beginning after December 
4 31, 2008, any deduction for dividends paid by a 
5 captive real estate investment trust that is allowed 
6 to a real estate investment trust under Section 
7 857(b)(2)(B) of the Internal Revenue Code for 
8 dividends paid;
9   (E-16) An amount equal to the credit allowable to 
10 the taxpayer under Section 218(a) of this Act, 
11 determined without regard to Section 218(c) of this 
12 Act;
13   (E-17) For taxable years ending on or after 
14 December 31, 2017, an amount equal to the deduction 
15 allowed under Section 199 of the Internal Revenue Code 
16 for the taxable year; 
17   (E-18) for taxable years beginning after December 
18 31, 2018, an amount equal to the deduction allowed 
19 under Section 250(a)(1)(A) of the Internal Revenue 
20 Code for the taxable year; 
21   (E-19) for taxable years ending on or after June 
22 30, 2021, an amount equal to the deduction allowed 
23 under Section 250(a)(1)(B)(i) of the Internal Revenue 
24 Code for the taxable year; 
25   (E-20) for taxable years ending on or after June 
26 30, 2021, an amount equal to the deduction allowed 
 
 
SB2196- 43 -LRB103 25662 HLH 52011 b


1 under Sections 243(e) and 245A(a) of the Internal 
2 Revenue Code for the taxable year. 
3 and by deducting from the total so obtained the sum of the 
4 following
amounts:
5   (F) 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   (G) An amount equal to any amount included in such 
9 total under
Section 78 of the Internal Revenue Code;
10   (H) In the case of a regulated investment company, 
11 an amount equal
to the amount of exempt interest 
12 dividends as defined in subsection (b)(5) of Section 
13 852 of the Internal Revenue Code, paid to shareholders

14 for the taxable year;
15   (I) With the exception of any amounts subtracted 
16 under subparagraph
(J),
an amount equal to the sum of 
17 all amounts disallowed as
deductions by (i) Sections 
18 171(a)(2) and 265(a)(2) and amounts disallowed as

19 interest expense by Section 291(a)(3) of the Internal 
20 Revenue Code, and all amounts of expenses allocable to 
21 interest and
disallowed as deductions by Section 
22 265(a)(1) of the Internal Revenue Code;
and (ii) for 
23 taxable years
ending on or after August 13, 1999, 
24 Sections
171(a)(2), 265,
280C, 291(a)(3), and 
25 832(b)(5)(B)(i) of the Internal Revenue Code, plus, 
26 for tax years ending on or after December 31, 2011, 
 
 
SB2196- 44 -LRB103 25662 HLH 52011 b


1 amounts disallowed as deductions by Section 45G(e)(3) 
2 of the Internal Revenue Code and, for taxable years 
3 ending on or after December 31, 2008, any amount 
4 included in gross income under Section 87 of the 
5 Internal Revenue Code and the policyholders' share of 
6 tax-exempt interest of a life insurance company under 
7 Section 807(a)(2)(B) of the Internal Revenue Code (in 
8 the case of a life insurance company with gross income 
9 from a decrease in reserves for the tax year) or 
10 Section 807(b)(1)(B) of the Internal Revenue Code (in 
11 the case of a life insurance company allowed a 
12 deduction for an increase in reserves for the tax 
13 year); the
provisions of this
subparagraph are exempt 
14 from the provisions of Section 250;
15   (J) An amount equal to all amounts included in 
16 such total which are
exempt from taxation by this 
17 State either by reason of its statutes or
Constitution

18 or by reason of the Constitution, treaties or statutes 
19 of the United States;
provided that, in the case of any 
20 statute of this State that exempts income
derived from 
21 bonds or other obligations from the tax imposed under 
22 this Act,
the amount exempted shall be the interest 
23 net of bond premium amortization;
24   (K) An amount equal to those dividends included in 
25 such total
which were paid by a corporation which 
26 conducts
business operations in a River Edge 
 
 
SB2196- 45 -LRB103 25662 HLH 52011 b


1 Redevelopment Zone or zones created under the River 
2 Edge Redevelopment Zone Act and conducts substantially 
3 all of its
operations in a River Edge Redevelopment 
4 Zone or zones. This subparagraph (K) is exempt from 
5 the provisions of Section 250;
6   (L) An amount equal to those dividends included in 
7 such total that
were paid by a corporation that 
8 conducts business operations in a federally
designated 
9 Foreign Trade Zone or Sub-Zone and that is designated 
10 a High Impact
Business located in Illinois; provided 
11 that dividends eligible for the
deduction provided in 
12 subparagraph (K) of paragraph 2 of this subsection

13 shall not be eligible for the deduction provided under 
14 this subparagraph
(L);
15   (M) For any taxpayer that is a financial 
16 organization within the meaning
of Section 304(c) of 
17 this Act, an amount included in such total as interest

18 income from a loan or loans made by such taxpayer to a 
19 borrower, to the extent
that such a loan is secured by 
20 property which is eligible for the River Edge 
21 Redevelopment Zone Investment Credit. To determine the 
22 portion of a loan or loans that is
secured by property 
23 eligible for a Section 201(f) investment
credit to the 
24 borrower, the entire principal amount of the loan or 
25 loans
between the taxpayer and the borrower should be 
26 divided into the basis of the
Section 201(f) 
 
 
SB2196- 46 -LRB103 25662 HLH 52011 b


1 investment credit property which secures the
loan or 
2 loans, using for this purpose the original basis of 
3 such property on
the date that it was placed in service 
4 in the River Edge Redevelopment Zone. The subtraction 
5 modification available to the taxpayer in any
year 
6 under this subsection shall be that portion of the 
7 total interest paid
by the borrower with respect to 
8 such loan attributable to the eligible
property as 
9 calculated under the previous sentence. This 
10 subparagraph (M) is exempt from the provisions of 
11 Section 250;
12   (M-1) For any taxpayer that is a financial 
13 organization within the
meaning of Section 304(c) of 
14 this Act, an amount included in such total as
interest 
15 income from a loan or loans made by such taxpayer to a 
16 borrower,
to the extent that such a loan is secured by 
17 property which is eligible for
the High Impact 
18 Business Investment Credit. To determine the portion 
19 of a
loan or loans that is secured by property eligible 
20 for a Section 201(h) investment credit to the 
21 borrower, the entire principal amount of
the loan or 
22 loans between the taxpayer and the borrower should be 
23 divided into
the basis of the Section 201(h) 
24 investment credit property which
secures the loan or 
25 loans, using for this purpose the original basis of 
26 such
property on the date that it was placed in service 
 
 
SB2196- 47 -LRB103 25662 HLH 52011 b


1 in a federally designated
Foreign Trade Zone or 
2 Sub-Zone located in Illinois. No taxpayer that is

3 eligible for the deduction provided in subparagraph 
4 (M) of paragraph (2) of
this subsection shall be 
5 eligible for the deduction provided under this

6 subparagraph (M-1). The subtraction modification 
7 available to taxpayers in
any year under this 
8 subsection shall be that portion of the total interest

9 paid by the borrower with respect to such loan 
10 attributable to the eligible
property as calculated 
11 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) 
17 must, by its terms, be used for a
project approved by 
18 the Department of Commerce and Economic Opportunity 
19 under Section 11 of the Illinois Enterprise Zone Act 
20 or under Section 10-10 of the River Edge Redevelopment 
21 Zone Act. This subparagraph (N) is exempt from the 
22 provisions of Section 250;
23   (O) An amount equal to: (i) 85% for taxable years 
24 ending on or before
December 31, 1992, or, a 
25 percentage equal to the percentage allowable under

26 Section 243(a)(1) of the Internal Revenue Code of 1986 
 
 
SB2196- 48 -LRB103 25662 HLH 52011 b


1 for taxable years ending
after December 31, 1992, of 
2 the amount by which dividends included in taxable

3 income and received from a corporation that is not 
4 created or organized under
the laws of the United 
5 States or any state or political subdivision thereof,

6 including, for taxable years ending on or after 
7 December 31, 1988, dividends
received or deemed 
8 received or paid or deemed paid under Sections 951 
9 through
965 of the Internal Revenue Code, exceed the 
10 amount of the modification
provided under subparagraph 
11 (G) of paragraph (2) of this subsection (b) which
is 
12 related to such dividends, and including, for taxable 
13 years ending on or after December 31, 2008, dividends 
14 received from a captive real estate investment trust; 
15 plus (ii) 100% of the amount by which dividends,

16 included in taxable income and received, including, 
17 for taxable years ending on
or after December 31, 
18 1988, dividends received or deemed received or paid or

19 deemed paid under Sections 951 through 964 of the 
20 Internal Revenue Code and including, for taxable years 
21 ending on or after December 31, 2008, dividends 
22 received from a captive real estate investment trust, 
23 from
any such corporation specified in clause (i) that 
24 would but for the provisions
of Section 1504(b)(3) of 
25 the Internal Revenue Code be treated as a member of
the 
26 affiliated group which includes the dividend 
 
 
SB2196- 49 -LRB103 25662 HLH 52011 b


1 recipient, exceed the amount
of the modification 
2 provided under subparagraph (G) of paragraph (2) of 
3 this
subsection (b) which is related to such 
4 dividends. For taxable years ending on or after June 
5 30, 2021, (i) for purposes of this subparagraph, the 
6 term "dividend" does not include any amount treated as 
7 a dividend under Section 1248 of the Internal Revenue 
8 Code, and (ii) this subparagraph shall not apply to 
9 dividends for which a deduction is allowed under 
10 Section 245(a) of the Internal Revenue Code. This 
11 subparagraph (O) is exempt from the provisions of 
12 Section 250 of this Act;
13   (P) An amount equal to any contribution made to a 
14 job training project
established pursuant to the Tax 
15 Increment Allocation Redevelopment Act;
16   (Q) An amount equal to the amount of the deduction 
17 used to compute the
federal income tax credit for 
18 restoration of substantial amounts held under
claim of 
19 right for the taxable year pursuant to Section 1341 of 
20 the
Internal Revenue Code;
21   (R) On and after July 20, 1999, in the case of an 
22 attorney-in-fact with respect to whom an
interinsurer 
23 or a reciprocal insurer has made the election under 
24 Section 835 of
the Internal Revenue Code, 26 U.S.C. 
25 835, an amount equal to the excess, if
any, of the 
26 amounts paid or incurred by that interinsurer or 
 
 
SB2196- 50 -LRB103 25662 HLH 52011 b


1 reciprocal insurer
in the taxable year to the 
2 attorney-in-fact over the deduction allowed to that

3 interinsurer or reciprocal insurer with respect to the 
4 attorney-in-fact under
Section 835(b) of the Internal 
5 Revenue Code for the taxable year; the provisions of 
6 this subparagraph are exempt from the provisions of 
7 Section 250;
8   (S) For taxable years ending on or after December 
9 31, 1997, in the
case of a Subchapter
S corporation, an 
10 amount equal to all amounts of income allocable to a

11 shareholder subject to the Personal Property Tax 
12 Replacement Income Tax imposed
by subsections (c) and 
13 (d) of Section 201 of this Act, including amounts

14 allocable to organizations exempt from federal income 
15 tax by reason of Section
501(a) of the Internal 
16 Revenue Code. This subparagraph (S) is exempt from
the 
17 provisions of Section 250;
18   (T) For taxable years 2001 and thereafter, for the 
19 taxable year in
which the bonus depreciation deduction

20 is taken on the taxpayer's federal income tax return 
21 under
subsection (k) of Section 168 of the Internal 
22 Revenue Code and for each
applicable taxable year 
23 thereafter, an amount equal to "x", where:
24    (1) "y" equals the amount of the depreciation 
25 deduction taken for the
taxable year
on the 
26 taxpayer's federal income tax return on property 
 
 
SB2196- 51 -LRB103 25662 HLH 52011 b


1 for which the bonus
depreciation deduction
was 
2 taken in any year under subsection (k) of Section 
3 168 of the Internal
Revenue Code, but not 
4 including the bonus depreciation deduction;
5    (2) for taxable years ending on or before 
6 December 31, 2005, "x" equals "y" multiplied by 30 
7 and then divided by 70 (or "y"
multiplied by 
8 0.429); and
9    (3) for taxable years ending after December 
10 31, 2005:
11     (i) for property on which a bonus 
12 depreciation deduction of 30% of the adjusted 
13 basis was taken, "x" equals "y" multiplied by 
14 30 and then divided by 70 (or "y"
multiplied 
15 by 0.429);
16     (ii) for property on which a bonus 
17 depreciation deduction of 50% of the adjusted 
18 basis was taken, "x" equals "y" multiplied by 
19 1.0;
20     (iii) for property on which a bonus 
21 depreciation deduction of 100% of the adjusted 
22 basis was taken in a taxable year ending on or 
23 after December 31, 2021, "x" equals the 
24 depreciation deduction that would be allowed 
25 on that property if the taxpayer had made the 
26 election under Section 168(k)(7) of the 
 
 
SB2196- 52 -LRB103 25662 HLH 52011 b


1 Internal Revenue Code to not claim bonus 
2 depreciation on that property; and
3     (iv) for property on which a bonus 
4 depreciation deduction of a percentage other 
5 than 30%, 50% or 100% of the adjusted basis 
6 was taken in a taxable year ending on or after 
7 December 31, 2021, "x" equals "y" multiplied 
8 by 100 times the percentage bonus depreciation 
9 on the property (that is, 100(bonus%)) and 
10 then divided by 100 times 1 minus the 
11 percentage bonus depreciation on the property 
12 (that is, 100(1–bonus%)). 
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 (T) is exempt from the provisions of 
20 Section 250;
21   (U) 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 (E-10), then an amount 
25 equal to that
addition modification.
26   If the taxpayer continues to own property through 
 
 
SB2196- 53 -LRB103 25662 HLH 52011 b


1 the last day of the last tax year for which a 
2 subtraction is allowed with respect to that property 
3 under subparagraph (T) and for which the taxpayer was 
4 required in any taxable year to make an addition 
5 modification under subparagraph (E-10), then an amount 
6 equal to that addition modification.

7   The taxpayer is allowed to take the deduction 
8 under this subparagraph
only once with respect to any 
9 one piece of property.
10   This subparagraph (U) is exempt from the 
11 provisions of Section 250;
12   (V) 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 
15 with 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,
(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 
23 that 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 
 
 
SB2196- 54 -LRB103 25662 HLH 52011 b


1 addition modification, and (iii) any insurance premium 
2 income (net of deductions allocable thereto) taken 
3 into account for the taxable year with respect to a 
4 transaction with a taxpayer that is required to make 
5 an addition modification with respect to such 
6 transaction under Section 203(a)(2)(D-19), Section 
7 203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section 
8 203(d)(2)(D-9), but not to exceed the amount of that 
9 addition modification. This subparagraph (V) is exempt 
10 from the provisions of Section 250;

11   (W) An amount equal to the interest income taken 
12 into account for the taxable year (net of the 
13 deductions allocable thereto) with respect to 
14 transactions with (i) a foreign person who would be a 
15 member of the taxpayer's unitary business group but 
16 for the fact that the foreign person's business 
17 activity outside the United States is 80% or more of 
18 that person's total business activity and (ii) for 
19 taxable years ending on or after December 31, 2008, to 
20 a person who would be a member of the same unitary 
21 business group but for the fact that the person is 
22 prohibited under Section 1501(a)(27) from being 
23 included in the unitary business group because he or 
24 she is ordinarily required to apportion business 
25 income under different subsections of Section 304, but 
26 not to exceed the addition modification required to be 
 
 
SB2196- 55 -LRB103 25662 HLH 52011 b


1 made for the same taxable year under Section 
2 203(b)(2)(E-12) for interest paid, accrued, or 
3 incurred, directly or indirectly, to the same person. 
4 This subparagraph (W) is exempt from the provisions of 
5 Section 250;

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

 
 
SB2196- 56 -LRB103 25662 HLH 52011 b


1   (Y) For taxable years ending on or after December 
2 31, 2011, in the case of a taxpayer who was required to 
3 add back any insurance premiums under Section 
4 203(b)(2)(E-14), such taxpayer may elect to subtract 
5 that part of a reimbursement received from the 
6 insurance company equal to the amount of the expense 
7 or loss (including expenses incurred by the insurance 
8 company) that would have been taken into account as a 
9 deduction for federal income tax purposes if the 
10 expense or loss had been uninsured. If a taxpayer 
11 makes the election provided for by this subparagraph 
12 (Y), the insurer to which the premiums were paid must 
13 add back to income the amount subtracted by the 
14 taxpayer pursuant to this subparagraph (Y). This 
15 subparagraph (Y) is exempt from the provisions of 
16 Section 250; and 
17   (Z) The difference between the nondeductible 
18 controlled foreign corporation dividends under Section 
19 965(e)(3) of the Internal Revenue Code over the 
20 taxable income of the taxpayer, computed without 
21 regard to Section 965(e)(2)(A) of the Internal Revenue 
22 Code, and without regard to any net operating loss 
23 deduction. This subparagraph (Z) is exempt from the 
24 provisions of Section 250; and . 
25   (AA) For taxable years beginning on or after 
26 January 1, 2024, for any cannabis establishment 
 
 
SB2196- 57 -LRB103 25662 HLH 52011 b


1 operating in this State and licensed under the 
2 Cannabis Regulation and Tax Act or any cannabis 
3 cultivation center or medical cannabis dispensing 
4 organization operating in this State and licensed 
5 under the Compassionate Use of Cannabis Program Act, 
6 an amount equal to the deductions and credits that 
7 were disallowed under Section 280E of the Internal 
8 Revenue Code for the taxable year and that would not be 
9 added back under this subsection. The provisions of 
10 this subparagraph (AA) are exempt from the provisions 
11 of Section 250. 
12  (3) Special rule. For purposes of paragraph (2)(A), 
13 "gross income"
in the case of a life insurance company, 
14 for tax years ending on and after
December 31, 1994,
and 
15 prior to December 31, 2011, shall mean the gross 
16 investment income for the taxable year and, for tax years 
17 ending on or after December 31, 2011, shall mean all 
18 amounts included in life insurance gross income under 
19 Section 803(a)(3) of the Internal Revenue Code.

20 (c) Trusts and estates.
21  (1) In general. In the case of a trust or estate, base 
22 income means
an amount equal to the taxpayer's taxable 
23 income for the taxable year as
modified by paragraph (2).
24  (2) Modifications. Subject to the provisions of 
25 paragraph (3), the
taxable income referred to in paragraph 
 
 
SB2196- 58 -LRB103 25662 HLH 52011 b


1 (1) shall be modified by adding
thereto the sum of the 
2 following amounts:
3   (A) An amount equal to all amounts paid or accrued 
4 to the taxpayer
as interest or dividends during the 
5 taxable year to the extent excluded
from gross income 
6 in the computation of taxable income;
7   (B) In the case of (i) an estate, $600; (ii) a 
8 trust which, under
its governing instrument, is 
9 required to distribute all of its income
currently, 
10 $300; and (iii) any other trust, $100, but in each such 
11 case,
only to the extent such amount was deducted in 
12 the computation of
taxable income;
13   (C) An amount equal to the amount of tax imposed by 
14 this Act to the
extent deducted from gross income in 
15 the computation of taxable income
for the taxable 
16 year;
17   (D) The amount of any net operating loss deduction 
18 taken in arriving at
taxable income, other than a net 
19 operating loss carried forward from a
taxable year 
20 ending prior to December 31, 1986;
21   (E) For taxable years in which a net operating 
22 loss carryback or
carryforward from a taxable year 
23 ending prior to December 31, 1986 is an
element of 
24 taxable income under paragraph (1) of subsection (e) 
25 or subparagraph
(E) of paragraph (2) of subsection 
26 (e), the amount by which addition
modifications other 
 
 
SB2196- 59 -LRB103 25662 HLH 52011 b


1 than those provided by this subparagraph (E) exceeded

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

21 31, 1986, the addition modification provided in this 
22 subparagraph (E) shall
be the sum of the amounts 
23 computed independently under the preceding
provisions 
24 of this subparagraph (E) for each such taxable year;
25   (F) For taxable years ending on or after January 
26 1, 1989, an amount
equal to the tax deducted pursuant 
 
 
SB2196- 60 -LRB103 25662 HLH 52011 b


1 to Section 164 of the Internal Revenue
Code if the 
2 trust or estate is claiming the same tax for purposes 
3 of the
Illinois foreign tax credit under Section 601 
4 of this Act;
5   (G) An amount equal to the amount of the capital 
6 gain deduction
allowable under the Internal Revenue 
7 Code, to the extent deducted from
gross income in the 
8 computation of taxable income;
9   (G-5) For taxable years ending after December 31, 
10 1997, an
amount equal to any eligible remediation 
11 costs that the trust or estate
deducted in computing 
12 adjusted gross income and for which the trust
or 
13 estate claims a credit under subsection (l) of Section 
14 201;
15   (G-10) For taxable years 2001 and thereafter, an 
16 amount equal to the
bonus depreciation deduction taken 
17 on the taxpayer's federal income tax return for the 
18 taxable
year under subsection (k) of Section 168 of 
19 the Internal Revenue Code; and
20   (G-11) If the taxpayer sells, transfers, abandons, 
21 or otherwise disposes of property for which the 
22 taxpayer was required in any taxable year to
make an 
23 addition modification under subparagraph (G-10), then 
24 an amount equal
to the aggregate amount of the 
25 deductions taken in all taxable
years under 
26 subparagraph (R) with respect to that property.
 
 
SB2196- 61 -LRB103 25662 HLH 52011 b


1   If the taxpayer continues to own property through 
2 the last day of the last tax year for which a 
3 subtraction is allowed with respect to that property 
4 under subparagraph (R) and for which the taxpayer was 
5 allowed in any taxable year to make a subtraction 
6 modification under subparagraph (R), then an amount 
7 equal to that subtraction modification.

8   The taxpayer is required to make the addition 
9 modification under this
subparagraph
only once with 
10 respect to any one piece of property;
11   (G-12) An amount equal to the amount otherwise 
12 allowed as a deduction in computing base income for 
13 interest paid, accrued, or incurred, directly or 
14 indirectly, (i) for taxable years ending on or after 
15 December 31, 2004, to a foreign person who would be a 
16 member of the same unitary business group but for the 
17 fact that the foreign person's business activity 
18 outside the United States is 80% or more of the foreign 
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. The addition modification 
 
 
SB2196- 62 -LRB103 25662 HLH 52011 b


1 required by this subparagraph shall be reduced to the 
2 extent that dividends were included in base income of 
3 the unitary group for the same taxable year and 
4 received by the taxpayer or by a member of the 
5 taxpayer's unitary business group (including amounts 
6 included in gross income pursuant to Sections 951 
7 through 964 of the Internal Revenue Code and amounts 
8 included in gross income under Section 78 of the 
9 Internal Revenue Code) with respect to the stock of 
10 the same person to whom the interest was paid, 
11 accrued, or incurred.

12   This paragraph shall not apply to the following:

13    (i) an item of interest paid, accrued, or 
14 incurred, directly or indirectly, to a person who 
15 is subject in a foreign country or state, other 
16 than a state which requires mandatory unitary 
17 reporting, to a tax on or measured by net income 
18 with respect to such interest; or
19    (ii) an item of interest paid, accrued, or 
20 incurred, directly or indirectly, to a person if 
21 the taxpayer can establish, based on a 
22 preponderance of the evidence, both of the 
23 following:
24     (a) the person, during the same taxable 
25 year, paid, accrued, or incurred, the interest 
26 to a person that is not a related member, and
 
 
SB2196- 63 -LRB103 25662 HLH 52011 b


1     (b) the transaction giving rise to the 
2 interest expense between the taxpayer and the 
3 person did not have as a principal purpose the 
4 avoidance of Illinois income tax, and is paid 
5 pursuant to a contract or agreement that 
6 reflects an arm's-length interest rate and 
7 terms; or

8    (iii) the taxpayer can establish, based on 
9 clear and convincing evidence, that the interest 
10 paid, accrued, or incurred relates to a contract 
11 or agreement entered into at arm's-length rates 
12 and terms and the principal purpose for the 
13 payment is not federal or Illinois tax avoidance; 
14 or

15    (iv) an item of interest paid, accrued, or 
16 incurred, directly or indirectly, to a person if 
17 the taxpayer establishes by clear and convincing 
18 evidence that the adjustments are unreasonable; or 
19 if the taxpayer and the Director agree in writing 
20 to the application or use of an alternative method 
21 of apportionment under Section 304(f).

22    Nothing in this subsection shall preclude the 
23 Director from making any other adjustment 
24 otherwise allowed under Section 404 of this Act 
25 for any tax year beginning after the effective 
26 date of this amendment provided such adjustment is 
 
 
SB2196- 64 -LRB103 25662 HLH 52011 b


1 made pursuant to regulation adopted by the 
2 Department and such regulations provide methods 
3 and standards by which the Department will utilize 
4 its authority under Section 404 of this Act;

5   (G-13) An amount equal to the amount of intangible 
6 expenses and costs otherwise allowed as a deduction in 
7 computing base income, and that were paid, accrued, or 
8 incurred, directly or indirectly, (i) for taxable 
9 years ending on or after December 31, 2004, to a 
10 foreign person who would be a member of the same 
11 unitary business group but for the fact that the 
12 foreign person's business activity outside the United 
13 States is 80% or more of that person's total business 
14 activity and (ii) for taxable years ending on or after 
15 December 31, 2008, to a person who would be a member of 
16 the same unitary business group but for the fact that 
17 the person is prohibited under Section 1501(a)(27) 
18 from being included in the unitary business group 
19 because he or she is ordinarily required to apportion 
20 business income under different subsections of Section 
21 304. The addition modification required by this 
22 subparagraph shall be reduced to the extent that 
23 dividends were included in base income of the unitary 
24 group for the same taxable year and received by the 
25 taxpayer or by a member of the taxpayer's unitary 
26 business group (including amounts included in gross 
 
 
SB2196- 65 -LRB103 25662 HLH 52011 b


1 income pursuant to Sections 951 through 964 of the 
2 Internal Revenue Code and amounts included in gross 
3 income under Section 78 of the Internal Revenue Code) 
4 with respect to the stock of the same person to whom 
5 the intangible expenses and costs were directly or 
6 indirectly paid, incurred, or accrued. The preceding 
7 sentence shall not apply to the extent that the same 
8 dividends caused a reduction to the addition 
9 modification required under Section 203(c)(2)(G-12) of 
10 this Act. As used in this subparagraph, the term 
11 "intangible expenses and costs" includes: (1) 
12 expenses, losses, and costs for or related to the 
13 direct or indirect acquisition, use, maintenance or 
14 management, ownership, sale, exchange, or any other 
15 disposition of intangible property; (2) losses 
16 incurred, directly or indirectly, from factoring 
17 transactions or discounting transactions; (3) royalty, 
18 patent, technical, and copyright fees; (4) licensing 
19 fees; and (5) other similar expenses and costs. For 
20 purposes of this subparagraph, "intangible property" 
21 includes patents, patent applications, trade names, 
22 trademarks, service marks, copyrights, mask works, 
23 trade secrets, and similar types of intangible assets.
24   This paragraph shall not apply to the following:
25    (i) any item of intangible expenses or costs 
26 paid, accrued, or incurred, directly or 
 
 
SB2196- 66 -LRB103 25662 HLH 52011 b


1 indirectly, from a transaction with a person who 
2 is subject in a foreign country or state, other 
3 than a state which requires mandatory unitary 
4 reporting, to a tax on or measured by net income 
5 with respect to such item; or
6    (ii) any item of intangible expense or cost 
7 paid, accrued, or incurred, directly or 
8 indirectly, if the taxpayer can establish, based 
9 on a preponderance of the evidence, both of the 
10 following:
11     (a) the person during the same taxable 
12 year paid, accrued, or incurred, the 
13 intangible expense or cost to a person that is 
14 not a related member, and
15     (b) the transaction giving rise to the 
16 intangible expense or cost between the 
17 taxpayer and the person did not have as a 
18 principal purpose the avoidance of Illinois 
19 income tax, and is paid pursuant to a contract 
20 or agreement that reflects arm's-length terms; 
21 or
22    (iii) any item of intangible expense or cost 
23 paid, accrued, or incurred, directly or 
24 indirectly, from a transaction with a person if 
25 the taxpayer establishes by clear and convincing 
26 evidence, that the adjustments are unreasonable; 
 
 
SB2196- 67 -LRB103 25662 HLH 52011 b


1 or if the taxpayer and the Director agree in 
2 writing to the application or use of an 
3 alternative method of apportionment under Section 
4 304(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 
8 for any tax year beginning after the effective 
9 date of this amendment provided such adjustment is 
10 made pursuant to regulation adopted by the 
11 Department and such regulations provide methods 
12 and standards by which the Department will utilize 
13 its authority under Section 404 of this Act;

14   (G-14) For taxable years ending on or after 
15 December 31, 2008, an amount equal to the amount of 
16 insurance premium expenses and costs otherwise allowed 
17 as a deduction in computing base income, and that were 
18 paid, accrued, or incurred, directly or indirectly, to 
19 a person who would be a member of the same unitary 
20 business group but for the fact that the person is 
21 prohibited under Section 1501(a)(27) from being 
22 included in the unitary business group because he or 
23 she is ordinarily required to apportion business 
24 income under different subsections of Section 304. The 
25 addition modification required by this subparagraph 
26 shall be reduced to the extent that dividends were 
 
 
SB2196- 68 -LRB103 25662 HLH 52011 b


1 included in base income of the unitary group for the 
2 same taxable year and received by the taxpayer or by a 
3 member of the taxpayer's unitary business group 
4 (including amounts included in gross income under 
5 Sections 951 through 964 of the Internal Revenue Code 
6 and amounts included in gross income under Section 78 
7 of the Internal Revenue Code) with respect to the 
8 stock of the same person to whom the premiums and costs 
9 were directly or indirectly paid, incurred, or 
10 accrued. The preceding sentence does not apply to the 
11 extent that the same dividends caused a reduction to 
12 the addition modification required under Section 
13 203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this 
14 Act;
15   (G-15) An amount equal to the credit allowable to 
16 the taxpayer under Section 218(a) of this Act, 
17 determined without regard to Section 218(c) of this 
18 Act;
19   (G-16) For taxable years ending on or after 
20 December 31, 2017, an amount equal to the deduction 
21 allowed under Section 199 of the Internal Revenue Code 
22 for the taxable year; 
23 and by deducting from the total so obtained the sum of the 
24 following
amounts:
25   (H) An amount equal to all amounts included in 
26 such total pursuant
to the provisions of Sections 
 
 
SB2196- 69 -LRB103 25662 HLH 52011 b


1 402(a), 402(c), 403(a), 403(b), 406(a), 407(a)
and 408 
2 of the Internal Revenue Code or included in such total 
3 as
distributions under the provisions of any 
4 retirement or disability plan for
employees of any 
5 governmental agency or unit, or retirement payments to

6 retired partners, which payments are excluded in 
7 computing net earnings
from self employment by Section 
8 1402 of the Internal Revenue Code and
regulations 
9 adopted pursuant thereto;
10   (I) The valuation limitation amount;
11   (J) An amount equal to the amount of any tax 
12 imposed by this Act
which was refunded to the taxpayer 
13 and included in such total for the
taxable year;
14   (K) An amount equal to all amounts included in 
15 taxable income as
modified by subparagraphs (A), (B), 
16 (C), (D), (E), (F) and (G) which
are exempt from 
17 taxation by this State either by reason of its 
18 statutes or
Constitution
or by reason of the 
19 Constitution, treaties or statutes of the United 
20 States;
provided that, in the case of any statute of 
21 this State that exempts income
derived from bonds or 
22 other obligations from the tax imposed under this Act,

23 the amount exempted shall be the interest net of bond 
24 premium amortization;
25   (L) With the exception of any amounts subtracted 
26 under subparagraph
(K),
an amount equal to the sum of 
 
 
SB2196- 70 -LRB103 25662 HLH 52011 b


1 all amounts disallowed as
deductions by (i) Sections 
2 171(a)(2) and 265(a)(2) of the Internal Revenue
Code, 
3 and all amounts of expenses allocable
to interest and 
4 disallowed as deductions by Section 265(a)(1) of the 
5 Internal
Revenue Code;
and (ii) for taxable years

6 ending on or after August 13, 1999, Sections

7 171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of the 
8 Internal Revenue Code, plus, (iii) for taxable years 
9 ending on or after December 31, 2011, Section 
10 45G(e)(3) of the Internal Revenue Code and, for 
11 taxable years ending on or after December 31, 2008, 
12 any amount included in gross income under Section 87 
13 of the Internal Revenue Code; the provisions of this

14 subparagraph are exempt from the provisions of Section 
15 250;
16   (M) An amount equal to those dividends included in 
17 such total
which were paid by a corporation which 
18 conducts business operations in a River Edge 
19 Redevelopment Zone or zones created under the River 
20 Edge Redevelopment Zone Act and
conducts substantially 
21 all of its operations in a River Edge Redevelopment 
22 Zone or zones. This subparagraph (M) is exempt from 
23 the provisions of Section 250;
24   (N) An amount equal to any contribution made to a 
25 job training
project established pursuant to the Tax 
26 Increment Allocation
Redevelopment Act;
 
 
SB2196- 71 -LRB103 25662 HLH 52011 b


1   (O) An amount equal to those dividends included in 
2 such total
that were paid by a corporation that 
3 conducts business operations in a
federally designated 
4 Foreign Trade Zone or Sub-Zone and that is designated

5 a High Impact Business located in Illinois; provided 
6 that dividends eligible
for the deduction provided in 
7 subparagraph (M) of paragraph (2) of this
subsection 
8 shall not be eligible for the deduction provided under 
9 this
subparagraph (O);
10   (P) An amount equal to the amount of the deduction 
11 used to compute the
federal income tax credit for 
12 restoration of substantial amounts held under
claim of 
13 right for the taxable year pursuant to Section 1341 of 
14 the
Internal Revenue Code;
15   (Q) For taxable year 1999 and thereafter, an 
16 amount equal to the
amount of any
(i) distributions, 
17 to the extent includible in gross income for
federal 
18 income tax purposes, made to the taxpayer because of

19 his or her status as a victim of
persecution for racial 
20 or religious reasons by Nazi Germany or any other Axis

21 regime or as an heir of the victim and (ii) items
of 
22 income, to the extent
includible in gross income for 
23 federal income tax purposes, attributable to,
derived 
24 from or in any way related to assets stolen from, 
25 hidden from, or
otherwise lost to a victim of

26 persecution for racial or religious reasons by Nazi

 
 
SB2196- 72 -LRB103 25662 HLH 52011 b


1 Germany or any other Axis regime
immediately prior to, 
2 during, and immediately after World War II, including,

3 but
not limited to, interest on the proceeds 
4 receivable as insurance
under policies issued to a 
5 victim of persecution for racial or religious
reasons 
6 by Nazi Germany or any other Axis regime by European 
7 insurance
companies
immediately prior to and during 
8 World War II;
provided, however, this subtraction from 
9 federal adjusted gross income does not
apply to assets 
10 acquired with such assets or with the proceeds from 
11 the sale of
such assets; provided, further, this 
12 paragraph shall only apply to a taxpayer
who was the 
13 first recipient of such assets after their recovery 
14 and who is a
victim of
persecution for racial or 
15 religious reasons
by Nazi Germany or any other Axis 
16 regime or as an heir of the victim. The
amount of and 
17 the eligibility for any public assistance, benefit, or

18 similar entitlement is not affected by the inclusion 
19 of items (i) and (ii) of
this paragraph in gross income 
20 for federal income tax purposes.
This paragraph is 
21 exempt from the provisions of Section 250;
22   (R) For taxable years 2001 and thereafter, for the 
23 taxable year in
which the bonus depreciation deduction

24 is taken on the taxpayer's federal income tax return 
25 under
subsection (k) of Section 168 of the Internal 
26 Revenue Code and for each
applicable taxable year 
 
 
SB2196- 73 -LRB103 25662 HLH 52011 b


1 thereafter, an amount equal to "x", where:
2    (1) "y" equals the amount of the depreciation 
3 deduction taken for the
taxable year
on the 
4 taxpayer's federal income tax return on property 
5 for which the bonus
depreciation deduction
was 
6 taken in any year under subsection (k) of Section 
7 168 of the Internal
Revenue Code, but not 
8 including the bonus depreciation deduction;
9    (2) for taxable years ending on or before 
10 December 31, 2005, "x" equals "y" multiplied by 30 
11 and then divided by 70 (or "y"
multiplied by 
12 0.429); and
13    (3) for taxable years ending after December 
14 31, 2005:
15     (i) for property on which a bonus 
16 depreciation deduction of 30% of the adjusted 
17 basis was taken, "x" equals "y" multiplied by 
18 30 and then divided by 70 (or "y"
multiplied 
19 by 0.429);
20     (ii) for property on which a bonus 
21 depreciation deduction of 50% of the adjusted 
22 basis was taken, "x" equals "y" multiplied by 
23 1.0;
24     (iii) for property on which a bonus 
25 depreciation deduction of 100% of the adjusted 
26 basis was taken in a taxable year ending on or 
 
 
SB2196- 74 -LRB103 25662 HLH 52011 b


1 after December 31, 2021, "x" equals the 
2 depreciation deduction that would be allowed 
3 on that property if the taxpayer had made the 
4 election under Section 168(k)(7) of the 
5 Internal Revenue Code to not claim bonus 
6 depreciation on that property; and
7     (iv) for property on which a bonus 
8 depreciation deduction of a percentage other 
9 than 30%, 50% or 100% of the adjusted basis 
10 was taken in a taxable year ending on or after 
11 December 31, 2021, "x" equals "y" multiplied 
12 by 100 times the percentage bonus depreciation 
13 on the property (that is, 100(bonus%)) and 
14 then divided by 100 times 1 minus the 
15 percentage bonus depreciation on the property 
16 (that is, 100(1–bonus%)). 
17   The aggregate amount deducted under this 
18 subparagraph in all taxable
years for any one piece of 
19 property may not exceed the amount of the bonus

20 depreciation deduction
taken on that property on the 
21 taxpayer's federal income tax return under
subsection 
22 (k) of Section 168 of the Internal Revenue Code. This 
23 subparagraph (R) is exempt from the provisions of 
24 Section 250;
25   (S) If the taxpayer sells, transfers, abandons, or 
26 otherwise disposes of
property for which the taxpayer 
 
 
SB2196- 75 -LRB103 25662 HLH 52011 b


1 was required in any taxable year to make an
addition 
2 modification under subparagraph (G-10), then an amount 
3 equal to that
addition modification.
4   If the taxpayer continues to own property through 
5 the last day of the last tax year for which a 
6 subtraction is allowed with respect to that property 
7 under subparagraph (R) and for which the taxpayer was 
8 required in any taxable year to make an addition 
9 modification under subparagraph (G-10), then an amount 
10 equal to that addition modification.

11   The taxpayer is allowed to take the deduction 
12 under this subparagraph
only once with respect to any 
13 one piece of property.
14   This subparagraph (S) is exempt from the 
15 provisions of Section 250;
16   (T) The amount of (i) any interest income (net of 
17 the deductions allocable thereto) taken into account 
18 for the taxable year with respect to a transaction 
19 with a taxpayer that is required to make an addition 
20 modification with respect to such transaction under 
21 Section 203(a)(2)(D-17), 203(b)(2)(E-12), 
22 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed 
23 the amount of such addition modification and
(ii) any 
24 income from intangible property (net of the deductions 
25 allocable thereto) taken into account for the taxable 
26 year with respect to a transaction with a taxpayer 
 
 
SB2196- 76 -LRB103 25662 HLH 52011 b


1 that is required to make an addition modification with 
2 respect to such transaction under Section 
3 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or 
4 203(d)(2)(D-8), but not to exceed the amount of such 
5 addition modification. This subparagraph (T) is exempt 
6 from the provisions of Section 250;

7   (U) An amount equal to the interest income taken 
8 into account for the taxable year (net of the 
9 deductions allocable thereto) with respect to 
10 transactions with (i) a foreign person who would be a 
11 member of the taxpayer's unitary business group but 
12 for the fact the foreign person's business activity 
13 outside the United States is 80% or more of that 
14 person's total business activity and (ii) for taxable 
15 years ending on or after December 31, 2008, to a person 
16 who would be a member of the same unitary business 
17 group but for the fact that the person is prohibited 
18 under Section 1501(a)(27) from being included in the 
19 unitary business group because he or she is ordinarily 
20 required to apportion business income under different 
21 subsections of Section 304, but not to exceed the 
22 addition modification required to be made for the same 
23 taxable year under Section 203(c)(2)(G-12) for 
24 interest paid, accrued, or incurred, directly or 
25 indirectly, to the same person. This subparagraph (U) 
26 is exempt from the provisions of Section 250; 
 
 
SB2196- 77 -LRB103 25662 HLH 52011 b


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

22   (W) in the case of an estate, an amount equal to 
23 all amounts included in such total pursuant to the 
24 provisions of Section 111 of the Internal Revenue Code 
25 as a recovery of items previously deducted by the 
26 decedent from adjusted gross income in the computation 
 
 
SB2196- 78 -LRB103 25662 HLH 52011 b


1 of taxable income. This subparagraph (W) is exempt 
2 from Section 250; 
3   (X) an amount equal to the refund included in such 
4 total of any tax deducted for federal income tax 
5 purposes, to the extent that deduction was added back 
6 under subparagraph (F). This subparagraph (X) is 
7 exempt from the provisions of Section 250;
8   (Y) For taxable years ending on or after December 
9 31, 2011, in the case of a taxpayer who was required to 
10 add back any insurance premiums under Section 
11 203(c)(2)(G-14), such taxpayer may elect to subtract 
12 that part of a reimbursement received from the 
13 insurance company equal to the amount of the expense 
14 or loss (including expenses incurred by the insurance 
15 company) that would have been taken into account as a 
16 deduction for federal income tax purposes if the 
17 expense or loss had been uninsured. If a taxpayer 
18 makes the election provided for by this subparagraph 
19 (Y), the insurer to which the premiums were paid must 
20 add back to income the amount subtracted by the 
21 taxpayer pursuant to this subparagraph (Y). This 
22 subparagraph (Y) is exempt from the provisions of 
23 Section 250; and
24   (Z) For taxable years beginning after December 31, 
25 2018 and before January 1, 2026, the amount of excess 
26 business loss of the taxpayer disallowed as a 
 
 
SB2196- 79 -LRB103 25662 HLH 52011 b


1 deduction by Section 461(l)(1)(B) of the Internal 
2 Revenue Code; and . 
3   (AA) For taxable years beginning on or after 
4 January 1, 2024, for any cannabis establishment 
5 operating in this State and licensed under the 
6 Cannabis Regulation and Tax Act or any cannabis 
7 cultivation center or medical cannabis dispensing 
8 organization operating in this State and licensed 
9 under the Compassionate Use of Cannabis Program Act, 
10 an amount equal to the deductions and credits that 
11 were disallowed under Section 280E of the Internal 
12 Revenue Code for the taxable year and that would not be 
13 added back under this subsection. The provisions of 
14 this subparagraph (AA) are exempt from the provisions 
15 of Section 250. 
16  (3) Limitation. The amount of any modification 
17 otherwise required
under this subsection shall, under 
18 regulations prescribed by the
Department, be adjusted by 
19 any amounts included therein which were
properly paid, 
20 credited, or required to be distributed, or permanently 
21 set
aside for charitable purposes pursuant to Internal 
22 Revenue Code Section
642(c) during the taxable year.

23 (d) Partnerships.
24  (1) In general. In the case of a partnership, base 
25 income means an
amount equal to the taxpayer's taxable 
 
 
SB2196- 80 -LRB103 25662 HLH 52011 b


1 income for the taxable year as
modified by paragraph (2).
2  (2) Modifications. The taxable income referred to in 
3 paragraph (1)
shall be modified by adding thereto the sum 
4 of the following amounts:
5   (A) An amount equal to all amounts paid or accrued 
6 to the taxpayer as
interest or dividends during the 
7 taxable year to the extent excluded from
gross income 
8 in the computation of taxable income;
9   (B) An amount equal to the amount of tax imposed by 
10 this Act to the
extent deducted from gross income for 
11 the taxable year;
12   (C) The amount of deductions allowed to the 
13 partnership pursuant to
Section 707 (c) of the 
14 Internal Revenue Code in calculating its taxable 
15 income;
16   (D) An amount equal to the amount of the capital 
17 gain deduction
allowable under the Internal Revenue 
18 Code, to the extent deducted from
gross income in the 
19 computation of taxable income;
20   (D-5) For taxable years 2001 and thereafter, an 
21 amount equal to the
bonus depreciation deduction taken 
22 on the taxpayer's federal income tax return for the 
23 taxable
year under subsection (k) of Section 168 of 
24 the Internal Revenue Code;
25   (D-6) If the taxpayer sells, transfers, abandons, 
26 or otherwise disposes of
property for which the 
 
 
SB2196- 81 -LRB103 25662 HLH 52011 b


1 taxpayer was required in any taxable year to make an

2 addition modification under subparagraph (D-5), then 
3 an amount equal to the
aggregate amount of the 
4 deductions taken in all taxable years
under 
5 subparagraph (O) with respect to that property.
6   If the taxpayer continues to own property through 
7 the last day of the last tax year for which a 
8 subtraction is allowed with respect to that property 
9 under subparagraph (O) and for which the taxpayer was 
10 allowed in any taxable year to make a subtraction 
11 modification under subparagraph (O), then an amount 
12 equal to that subtraction modification.

13   The taxpayer is required to make the addition 
14 modification under this
subparagraph
only once with 
15 respect to any one piece of property;
16   (D-7) An amount equal to the amount otherwise 
17 allowed as a deduction in computing base income for 
18 interest paid, accrued, or incurred, directly or 
19 indirectly, (i) for taxable years ending on or after 
20 December 31, 2004, to a foreign person who would be a 
21 member of the same unitary business group but for the 
22 fact the foreign person's business activity outside 
23 the United States is 80% or more of the foreign 
24 person's total business activity and (ii) for taxable 
25 years ending on or after December 31, 2008, to a person 
26 who would be a member of the same unitary business 
 
 
SB2196- 82 -LRB103 25662 HLH 52011 b


1 group but for the fact that the person is prohibited 
2 under Section 1501(a)(27) from being included in the 
3 unitary business group because he or she is ordinarily 
4 required to apportion business income under different 
5 subsections of Section 304. The addition modification 
6 required by this subparagraph shall be reduced to the 
7 extent that dividends were included in base income of 
8 the unitary group for the same taxable year and 
9 received by the taxpayer or by a member of the 
10 taxpayer's unitary business group (including amounts 
11 included in gross income pursuant to Sections 951 
12 through 964 of the Internal Revenue Code and amounts 
13 included in gross income under Section 78 of the 
14 Internal Revenue Code) with respect to the stock of 
15 the same person to whom the interest was paid, 
16 accrued, or incurred.

17   This paragraph shall not apply to the following:

18    (i) an item of interest paid, accrued, or 
19 incurred, directly or indirectly, to a person who 
20 is subject in a foreign country or state, other 
21 than a state which requires mandatory unitary 
22 reporting, to a tax on or measured by net income 
23 with respect to such interest; or
24    (ii) an item of interest paid, accrued, or 
25 incurred, directly or indirectly, to a person if 
26 the taxpayer can establish, based on a 
 
 
SB2196- 83 -LRB103 25662 HLH 52011 b


1 preponderance of the evidence, both of the 
2 following:
3     (a) the person, during the same taxable 
4 year, paid, accrued, or incurred, the interest 
5 to a person that is not a related member, and
6     (b) the transaction giving rise to the 
7 interest expense between the taxpayer and the 
8 person did not have as a principal purpose the 
9 avoidance of Illinois income tax, and is paid 
10 pursuant to a contract or agreement that 
11 reflects an arm's-length interest rate and 
12 terms; or

13    (iii) the taxpayer can establish, based on 
14 clear and convincing evidence, that the interest 
15 paid, accrued, or incurred relates to a contract 
16 or agreement entered into at arm's-length rates 
17 and terms and the principal purpose for the 
18 payment is not federal or Illinois tax avoidance; 
19 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).

 
 
SB2196- 84 -LRB103 25662 HLH 52011 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 
4 for any tax year beginning after the effective 
5 date of this amendment provided such adjustment is 
6 made pursuant to regulation adopted by the 
7 Department and such regulations provide methods 
8 and standards by which the Department will utilize 
9 its authority under Section 404 of this Act; and

10   (D-8) 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 
 
 
SB2196- 85 -LRB103 25662 HLH 52011 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(d)(2)(D-7) 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 
 
 
SB2196- 86 -LRB103 25662 HLH 52011 b


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 
7 is subject in a foreign country or state, other 
8 than a state which requires mandatory unitary 
9 reporting, to a tax on or measured by net income 
10 with respect 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
 
 
SB2196- 87 -LRB103 25662 HLH 52011 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 
4 the 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 
8 alternative method of apportionment under Section 
9 304(f);

10    Nothing in this subsection shall preclude the 
11 Director from making any other adjustment 
12 otherwise allowed under Section 404 of this Act 
13 for any tax year beginning after the effective 
14 date of this amendment provided such adjustment is 
15 made pursuant to regulation adopted by the 
16 Department and such regulations provide methods 
17 and standards by which the Department will utilize 
18 its authority under Section 404 of this Act;

19   (D-9) For taxable years ending on or after 
20 December 31, 2008, an amount equal to the amount of 
21 insurance premium expenses and costs otherwise allowed 
22 as a deduction in computing base income, and that were 
23 paid, accrued, or incurred, directly or indirectly, to 
24 a person who would be a member of the same unitary 
25 business group but for the fact that the person is 
26 prohibited under Section 1501(a)(27) from being 
 
 
SB2196- 88 -LRB103 25662 HLH 52011 b


1 included in the unitary business group because he or 
2 she is ordinarily required to apportion business 
3 income under different subsections of Section 304. The 
4 addition modification required by this subparagraph 
5 shall be reduced to the extent that dividends were 
6 included in base income of the unitary group for the 
7 same taxable year and received by the taxpayer or by a 
8 member of the taxpayer's unitary business group 
9 (including amounts included in gross income under 
10 Sections 951 through 964 of the Internal Revenue Code 
11 and amounts included in gross income under Section 78 
12 of the Internal Revenue Code) with respect to the 
13 stock of the same person to whom the premiums and costs 
14 were directly or indirectly paid, incurred, or 
15 accrued. The preceding sentence does not apply to the 
16 extent that the same dividends caused a reduction to 
17 the addition modification required under Section 
18 203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act;
19   (D-10) An amount equal to the credit allowable to 
20 the taxpayer under Section 218(a) of this Act, 
21 determined without regard to Section 218(c) of this 
22 Act;
23   (D-11) For taxable years ending on or after 
24 December 31, 2017, an amount equal to the deduction 
25 allowed under Section 199 of the Internal Revenue Code 
26 for the taxable year; 
 
 
SB2196- 89 -LRB103 25662 HLH 52011 b


1 and by deducting from the total so obtained the following 
2 amounts:
3   (E) The valuation limitation amount;
4   (F) An amount equal to the amount of any tax 
5 imposed by this Act which
was refunded to the taxpayer 
6 and included in such total for the taxable year;
7   (G) An amount equal to all amounts included in 
8 taxable income as
modified by subparagraphs (A), (B), 
9 (C) and (D) which are exempt from
taxation by this 
10 State either by reason of its statutes or Constitution 
11 or
by reason of
the Constitution, treaties or statutes 
12 of the United States;
provided that, in the case of any 
13 statute of this State that exempts income
derived from 
14 bonds or other obligations from the tax imposed under 
15 this Act,
the amount exempted shall be the interest 
16 net of bond premium amortization;
17   (H) Any income of the partnership which 
18 constitutes personal service
income as defined in 
19 Section 1348(b)(1) of the Internal Revenue Code (as
in 
20 effect December 31, 1981) or a reasonable allowance 
21 for compensation
paid or accrued for services rendered 
22 by partners to the partnership,
whichever is greater; 
23 this subparagraph (H) is exempt from the provisions of 
24 Section 250;
25   (I) An amount equal to all amounts of income 
26 distributable to an entity
subject to the Personal 
 
 
SB2196- 90 -LRB103 25662 HLH 52011 b


1 Property Tax Replacement Income Tax imposed by

2 subsections (c) and (d) of Section 201 of this Act 
3 including amounts
distributable to organizations 
4 exempt from federal income tax by reason of
Section 
5 501(a) of the Internal Revenue Code; this subparagraph 
6 (I) is exempt from the provisions of Section 250;
7   (J) With the exception of any amounts subtracted 
8 under subparagraph
(G),
an amount equal to the sum of 
9 all amounts disallowed as deductions
by (i) Sections 
10 171(a)(2) and 265(a)(2) of the Internal Revenue Code, 
11 and all amounts of expenses allocable to
interest and 
12 disallowed as deductions by Section 265(a)(1) of the 
13 Internal
Revenue Code;
and (ii) for taxable years

14 ending on or after August 13, 1999, Sections

15 171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of the 
16 Internal Revenue Code, plus, (iii) for taxable years 
17 ending on or after December 31, 2011, Section 
18 45G(e)(3) of the Internal Revenue Code and, for 
19 taxable years ending on or after December 31, 2008, 
20 any amount included in gross income under Section 87 
21 of the Internal Revenue Code; the provisions of this

22 subparagraph are exempt from the provisions of Section 
23 250;
24   (K) An amount equal to those dividends included in 
25 such total which were
paid by a corporation which 
26 conducts business operations in a River Edge 
 
 
SB2196- 91 -LRB103 25662 HLH 52011 b


1 Redevelopment Zone or zones created under the River 
2 Edge Redevelopment Zone Act and
conducts substantially 
3 all of its operations
from a River Edge Redevelopment 
4 Zone or zones. This subparagraph (K) is exempt from 
5 the provisions of Section 250;
6   (L) An amount equal to any contribution made to a 
7 job training project
established pursuant to the Real 
8 Property Tax Increment Allocation
Redevelopment Act;
9   (M) An amount equal to those dividends included in 
10 such total
that were paid by a corporation that 
11 conducts business operations in a
federally designated 
12 Foreign Trade Zone or Sub-Zone and that is designated 
13 a
High Impact Business located in Illinois; provided 
14 that dividends eligible
for the deduction provided in 
15 subparagraph (K) of paragraph (2) of this
subsection 
16 shall not be eligible for the deduction provided under 
17 this
subparagraph (M);
18   (N) An amount equal to the amount of the deduction 
19 used to compute the
federal income tax credit for 
20 restoration of substantial amounts held under
claim of 
21 right for the taxable year pursuant to Section 1341 of 
22 the
Internal Revenue Code;
23   (O) For taxable years 2001 and thereafter, for the 
24 taxable year in
which the bonus depreciation deduction

25 is taken on the taxpayer's federal income tax return 
26 under
subsection (k) of Section 168 of the Internal 
 
 
SB2196- 92 -LRB103 25662 HLH 52011 b


1 Revenue Code and for each
applicable taxable year 
2 thereafter, an amount equal to "x", where:
3    (1) "y" equals the amount of the depreciation 
4 deduction taken for the
taxable year
on the 
5 taxpayer's federal income tax return on property 
6 for which the bonus
depreciation deduction
was 
7 taken in any year under subsection (k) of Section 
8 168 of the Internal
Revenue Code, but not 
9 including the bonus depreciation deduction;
10    (2) for taxable years ending on or before 
11 December 31, 2005, "x" equals "y" multiplied by 30 
12 and then divided by 70 (or "y"
multiplied by 
13 0.429); and
14    (3) for taxable years ending after December 
15 31, 2005:
16     (i) for property on which a bonus 
17 depreciation deduction of 30% of the adjusted 
18 basis was taken, "x" equals "y" multiplied by 
19 30 and then divided by 70 (or "y"
multiplied 
20 by 0.429);
21     (ii) for property on which a bonus 
22 depreciation deduction of 50% of the adjusted 
23 basis was taken, "x" equals "y" multiplied by 
24 1.0;
25     (iii) for property on which a bonus 
26 depreciation deduction of 100% of the adjusted 
 
 
SB2196- 93 -LRB103 25662 HLH 52011 b


1 basis was taken in a taxable year ending on or 
2 after December 31, 2021, "x" equals the 
3 depreciation deduction that would be allowed 
4 on that property if the taxpayer had made the 
5 election under Section 168(k)(7) of the 
6 Internal Revenue Code to not claim bonus 
7 depreciation on that property; and
8     (iv) for property on which a bonus 
9 depreciation deduction of a percentage other 
10 than 30%, 50% or 100% of the adjusted basis 
11 was taken in a taxable year ending on or after 
12 December 31, 2021, "x" equals "y" multiplied 
13 by 100 times the percentage bonus depreciation 
14 on the property (that is, 100(bonus%)) and 
15 then divided by 100 times 1 minus the 
16 percentage bonus depreciation on the property 
17 (that is, 100(1–bonus%)). 
18   The aggregate amount deducted under this 
19 subparagraph in all taxable
years for any one piece of 
20 property may not exceed the amount of the bonus

21 depreciation deduction
taken on that property on the 
22 taxpayer's federal income tax return under
subsection 
23 (k) of Section 168 of the Internal Revenue Code. This 
24 subparagraph (O) is exempt from the provisions of 
25 Section 250;
26   (P) If the taxpayer sells, transfers, abandons, or 
 
 
SB2196- 94 -LRB103 25662 HLH 52011 b


1 otherwise disposes of
property for which the taxpayer 
2 was required in any taxable year to make an
addition 
3 modification under subparagraph (D-5), then an amount 
4 equal to that
addition modification.
5   If the taxpayer continues to own property through 
6 the last day of the last tax year for which a 
7 subtraction is allowed with respect to that property 
8 under subparagraph (O) and for which the taxpayer was 
9 required in any taxable year to make an addition 
10 modification under subparagraph (D-5), then an amount 
11 equal to that addition modification.

12   The taxpayer is allowed to take the deduction 
13 under this subparagraph
only once with respect to any 
14 one piece of property.
15   This subparagraph (P) is exempt from the 
16 provisions of Section 250;
17   (Q) The amount of (i) any interest income (net of 
18 the deductions allocable thereto) taken into account 
19 for the taxable year with respect to a transaction 
20 with a taxpayer that is required to make an addition 
21 modification with respect to such transaction under 
22 Section 203(a)(2)(D-17), 203(b)(2)(E-12), 
23 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed 
24 the amount of such addition modification and
(ii) any 
25 income from intangible property (net of the deductions 
26 allocable thereto) taken into account for the taxable 
 
 
SB2196- 95 -LRB103 25662 HLH 52011 b


1 year with respect to a transaction with a taxpayer 
2 that is required to make an addition modification with 
3 respect to such transaction under Section 
4 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or 
5 203(d)(2)(D-8), but not to exceed the amount of such 
6 addition modification. This subparagraph (Q) is exempt 
7 from Section 250;

8   (R) An amount equal to the interest income taken 
9 into account for the taxable year (net of the 
10 deductions allocable thereto) with respect to 
11 transactions with (i) a foreign person who would be a 
12 member of the taxpayer's unitary business group but 
13 for the fact that the foreign person's business 
14 activity outside the United States is 80% or more of 
15 that person's total business activity and (ii) for 
16 taxable years ending on or after December 31, 2008, to 
17 a person who would be a member of the same unitary 
18 business group but for the fact that the person is 
19 prohibited under Section 1501(a)(27) from being 
20 included in the unitary business group because he or 
21 she is ordinarily required to apportion business 
22 income under different subsections of Section 304, but 
23 not to exceed the addition modification required to be 
24 made for the same taxable year under Section 
25 203(d)(2)(D-7) for interest paid, accrued, or 
26 incurred, directly or indirectly, to the same person. 
 
 
SB2196- 96 -LRB103 25662 HLH 52011 b


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

23   (T) For taxable years ending on or after December 
24 31, 2011, in the case of a taxpayer who was required to 
25 add back any insurance premiums under Section 
26 203(d)(2)(D-9), such taxpayer may elect to subtract 
 
 
SB2196- 97 -LRB103 25662 HLH 52011 b


1 that part of a reimbursement received from the 
2 insurance company equal to the amount of the expense 
3 or loss (including expenses incurred by the insurance 
4 company) that would have been taken into account as a 
5 deduction for federal income tax purposes if the 
6 expense or loss had been uninsured. If a taxpayer 
7 makes the election provided for by this subparagraph 
8 (T), the insurer to which the premiums were paid must 
9 add back to income the amount subtracted by the 
10 taxpayer pursuant to this subparagraph (T). This 
11 subparagraph (T) is exempt from the provisions of 
12 Section 250; and . 
13   (U) For taxable years beginning on or after 
14 January 1, 2024, for any cannabis establishment 
15 operating in this State and licensed under the 
16 Cannabis Regulation and Tax Act or any cannabis 
17 cultivation center or medical cannabis dispensing 
18 organization operating in this State and licensed 
19 under the Compassionate Use of Cannabis Program Act, 
20 an amount equal to the deductions and credits that 
21 were disallowed under Section 280E of the Internal 
22 Revenue Code for the taxable year and that would not be 
23 added back under this subsection. The provisions of 
24 this subparagraph (U) are exempt from the provisions 
25 of Section 250. 

 
 
SB2196- 98 -LRB103 25662 HLH 52011 b


1 (e) Gross income; adjusted gross income; taxable income.
2  (1) In general. Subject to the provisions of paragraph 
3 (2) and
subsection (b)(3), for purposes of this Section 
4 and Section 803(e), a
taxpayer's gross income, adjusted 
5 gross income, or taxable income for
the taxable year shall 
6 mean the amount of gross income, adjusted gross
income or 
7 taxable income properly reportable for federal income tax

8 purposes for the taxable year under the provisions of the 
9 Internal
Revenue Code. Taxable income may be less than 
10 zero. However, for taxable
years ending on or after 
11 December 31, 1986, net operating loss
carryforwards from 
12 taxable years ending prior to December 31, 1986, may not

13 exceed the sum of federal taxable income for the taxable 
14 year before net
operating loss deduction, plus the excess 
15 of addition modifications over
subtraction modifications 
16 for the taxable year. For taxable years ending
prior to 
17 December 31, 1986, taxable income may never be an amount 
18 in excess
of the net operating loss for the taxable year as 
19 defined in subsections
(c) and (d) of Section 172 of the 
20 Internal Revenue Code, provided that when
taxable income 
21 of a corporation (other than a Subchapter S corporation),

22 trust, or estate is less than zero and addition 
23 modifications, other than
those provided by subparagraph 
24 (E) of paragraph (2) of subsection (b) for
corporations or 
25 subparagraph (E) of paragraph (2) of subsection (c) for

26 trusts and estates, exceed subtraction modifications, an 
 
 
SB2196- 99 -LRB103 25662 HLH 52011 b


1 addition
modification must be made under those 
2 subparagraphs for any other taxable
year to which the 
3 taxable income less than zero (net operating loss) is

4 applied under Section 172 of the Internal Revenue Code or 
5 under
subparagraph (E) of paragraph (2) of this subsection 
6 (e) applied in
conjunction with Section 172 of the 
7 Internal Revenue Code.
8  (2) Special rule. For purposes of paragraph (1) of 
9 this subsection,
the taxable income properly reportable 
10 for federal income tax purposes
shall mean:
11   (A) Certain life insurance companies. In the case 
12 of a life
insurance company subject to the tax imposed 
13 by Section 801 of the
Internal Revenue Code, life 
14 insurance company taxable income, plus the
amount of 
15 distribution from pre-1984 policyholder surplus 
16 accounts as
calculated under Section 815a of the 
17 Internal Revenue Code;
18   (B) Certain other insurance companies. In the case 
19 of mutual
insurance companies subject to the tax 
20 imposed by Section 831 of the
Internal Revenue Code, 
21 insurance company taxable income;
22   (C) Regulated investment companies. In the case of 
23 a regulated
investment company subject to the tax 
24 imposed by Section 852 of the
Internal Revenue Code, 
25 investment company taxable income;
26   (D) Real estate investment trusts. In the case of 
 
 
SB2196- 100 -LRB103 25662 HLH 52011 b


1 a real estate
investment trust subject to the tax 
2 imposed by Section 857 of the
Internal Revenue Code, 
3 real estate investment trust taxable income;
4   (E) Consolidated corporations. In the case of a 
5 corporation which
is a member of an affiliated group 
6 of corporations filing a consolidated
income tax 
7 return for the taxable year for federal income tax 
8 purposes,
taxable income determined as if such 
9 corporation had filed a separate
return for federal 
10 income tax purposes for the taxable year and each

11 preceding taxable year for which it was a member of an 
12 affiliated group.
For purposes of this subparagraph, 
13 the taxpayer's separate taxable
income shall be 
14 determined as if the election provided by Section

15 243(b)(2) of the Internal Revenue Code had been in 
16 effect for all such years;
17   (F) Cooperatives. In the case of a cooperative 
18 corporation or
association, the taxable income of such 
19 organization determined in
accordance with the 
20 provisions of Section 1381 through 1388 of the

21 Internal Revenue Code, but without regard to the 
22 prohibition against offsetting losses from patronage 
23 activities against income from nonpatronage 
24 activities; except that a cooperative corporation or 
25 association may make an election to follow its federal 
26 income tax treatment of patronage losses and 
 
 
SB2196- 101 -LRB103 25662 HLH 52011 b


1 nonpatronage losses. In the event such election is 
2 made, such losses shall be computed and carried over 
3 in a manner consistent with subsection (a) of Section 
4 207 of this Act and apportioned by the apportionment 
5 factor reported by the cooperative on its Illinois 
6 income tax return filed for the taxable year in which 
7 the losses are incurred. The election shall be 
8 effective for all taxable years with original returns 
9 due on or after the date of the election. In addition, 
10 the cooperative may file an amended return or returns, 
11 as allowed under this Act, to provide that the 
12 election shall be effective for losses incurred or 
13 carried forward for taxable years occurring prior to 
14 the date of the election. Once made, the election may 
15 only be revoked upon approval of the Director. The 
16 Department shall adopt rules setting forth 
17 requirements for documenting the elections and any 
18 resulting Illinois net loss and the standards to be 
19 used by the Director in evaluating requests to revoke 
20 elections. Public Act 96-932 is declaratory of 
21 existing law; 
22   (G) Subchapter S corporations. In the case of: (i) 
23 a Subchapter S
corporation for which there is in 
24 effect an election for the taxable year
under Section 
25 1362 of the Internal Revenue Code, the taxable income 
26 of such
corporation determined in accordance with 
 
 
SB2196- 102 -LRB103 25662 HLH 52011 b


1 Section 1363(b) of the Internal
Revenue Code, except 
2 that taxable income shall take into
account those 
3 items which are required by Section 1363(b)(1) of the

4 Internal Revenue Code to be separately stated; and 
5 (ii) a Subchapter
S corporation for which there is in 
6 effect a federal election to opt out of
the provisions 
7 of the Subchapter S Revision Act of 1982 and have 
8 applied
instead the prior federal Subchapter S rules 
9 as in effect on July 1, 1982,
the taxable income of 
10 such corporation determined in accordance with the

11 federal Subchapter S rules as in effect on July 1, 
12 1982; and
13   (H) Partnerships. In the case of a partnership, 
14 taxable income
determined in accordance with Section 
15 703 of the Internal Revenue Code,
except that taxable 
16 income shall take into account those items which are

17 required by Section 703(a)(1) to be separately stated 
18 but which would be
taken into account by an individual 
19 in calculating his taxable income.
20  (3) Recapture of business expenses on disposition of 
21 asset or business. Notwithstanding any other law to the 
22 contrary, if in prior years income from an asset or 
23 business has been classified as business income and in a 
24 later year is demonstrated to be non-business income, then 
25 all expenses, without limitation, deducted in such later 
26 year and in the 2 immediately preceding taxable years 
 
 
SB2196- 103 -LRB103 25662 HLH 52011 b


1 related to that asset or business that generated the 
2 non-business income shall be added back and recaptured as 
3 business income in the year of the disposition of the 
4 asset or business. Such amount shall be apportioned to 
5 Illinois using the greater of the apportionment fraction 
6 computed for the business under Section 304 of this Act 
7 for the taxable year or the average of the apportionment 
8 fractions computed for the business under Section 304 of 
9 this Act for the taxable year and for the 2 immediately 
10 preceding taxable years.


11 (f) Valuation limitation amount.
12  (1) In general. The valuation limitation amount 
13 referred to in
subsections (a)(2)(G), (c)(2)(I) and 
14 (d)(2)(E) is an amount equal to:
15   (A) The sum of the pre-August 1, 1969 appreciation 
16 amounts (to the
extent consisting of gain reportable 
17 under the provisions of Section
1245 or 1250 of the 
18 Internal Revenue Code) for all property in respect
of 
19 which such gain was reported for the taxable year; 
20 plus
21   (B) The lesser of (i) the sum of the pre-August 1, 
22 1969 appreciation
amounts (to the extent consisting of 
23 capital gain) for all property in
respect of which 
24 such gain was reported for federal income tax purposes

25 for the taxable year, or (ii) the net capital gain for 
 
 
SB2196- 104 -LRB103 25662 HLH 52011 b


1 the taxable year,
reduced in either case by any amount 
2 of such gain included in the amount
determined under 
3 subsection (a)(2)(F) or (c)(2)(H).
4  (2) Pre-August 1, 1969 appreciation amount.
5   (A) If the fair market value of property referred 
6 to in paragraph
(1) was readily ascertainable on 
7 August 1, 1969, the pre-August 1, 1969
appreciation 
8 amount for such property is the lesser of (i) the 
9 excess of
such fair market value over the taxpayer's 
10 basis (for determining gain)
for such property on that 
11 date (determined under the Internal Revenue
Code as in 
12 effect on that date), or (ii) the total gain realized 
13 and
reportable for federal income tax purposes in 
14 respect of the sale,
exchange or other disposition of 
15 such property.
16   (B) If the fair market value of property referred 
17 to in paragraph
(1) was not readily ascertainable on 
18 August 1, 1969, the pre-August 1,
1969 appreciation 
19 amount for such property is that amount which bears

20 the same ratio to the total gain reported in respect of 
21 the property for
federal income tax purposes for the 
22 taxable year, as the number of full
calendar months in 
23 that part of the taxpayer's holding period for the

24 property ending July 31, 1969 bears to the number of 
25 full calendar
months in the taxpayer's entire holding 
26 period for the
property.
 
 
SB2196- 105 -LRB103 25662 HLH 52011 b


1   (C) The Department shall prescribe such 
2 regulations as may be
necessary to carry out the 
3 purposes of this paragraph.

4 (g) Double deductions. Unless specifically provided 
5otherwise, nothing
in this Section shall permit the same item 
6to be deducted more than once.

7 (h) Legislative intention. Except as expressly provided by 
8this
Section there shall be no modifications or limitations on 
9the amounts
of income, gain, loss or deduction taken into 
10account in determining
gross income, adjusted gross income or 
11taxable income for federal income
tax purposes for the taxable 
12year, or in the amount of such items
entering into the 
13computation of base income and net income under this
Act for 
14such taxable year, whether in respect of property values as of

15August 1, 1969 or otherwise.
16(Source: P.A. 101-9, eff. 6-5-19; 101-81, eff. 7-12-19; 
17102-16, eff. 6-17-21; 102-558, eff. 8-20-21; 102-658, eff. 
188-27-21; 102-813, eff. 5-13-22; 102-1112, eff. 12-21-22.)

19 Section 10. The Civic Center Code is amended by changing 
20Section 245-12 as follows:




21 (70 ILCS 200/245-12)



22 Sec. 245-12. Use and occupation taxes. 

 
 
SB2196- 106 -LRB103 25662 HLH 52011 b


1 (a) The Authority may adopt a resolution that authorizes a 
2referendum on
the
question of whether the Authority shall be 
3authorized to impose a retailers'
occupation tax, a service 
4occupation tax, and a use tax in one-quarter percent

5increments at a rate not to exceed 1%. The Authority shall 
6certify the question
to the proper election authorities who 
7shall submit the question to the voters
of the metropolitan 
8area at the next regularly scheduled election in accordance

9with the general election law. The question shall
be in 
10substantially the following form:


11 "Shall the Salem Civic Center Authority be authorized to 
12 impose a retailers'
occupation tax, a service occupation 
13 tax, and a use tax at the rate of (rate)
for the sole 
14 purpose of obtaining funds for the support, construction,

15 maintenance, or financing of a facility of the Authority?"

16 Votes shall be recorded as "yes" or "no". 
17 If a majority of all votes cast on
the proposition are in 
18favor of the proposition, the Authority is authorized to

19impose the tax.

20 (b) The Authority shall impose the retailers'
occupation 
21tax upon all persons engaged in the business of selling 
22tangible
personal property at retail in the metropolitan area, 
23at the
rate approved by referendum, on the
gross receipts from 
24the sales made in the course of such business within
the 
25metropolitan area. Beginning December 1, 2019 and through 
26December 31, 2020, this tax is not imposed on sales of aviation 
 
 
SB2196- 107 -LRB103 25662 HLH 52011 b


1fuel unless the tax revenue is expended for airport-related 
2purposes. If the Authority does not have an airport-related 
3purpose to which it dedicates aviation fuel tax revenue, then 
4aviation fuel is excluded from the tax. The Authority must 
5comply with the certification requirements for airport-related 
6purposes under Section 2-22 of the Retailers' Occupation Tax 
7Act. For purposes of this Section, "airport-related purposes" 
8has the meaning ascribed in Section 6z-20.2 of the State 
9Finance Act. Beginning January 1, 2021, this tax is not 
10imposed on sales of aviation fuel for so long as the revenue 
11use requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133 are 
12binding on the Authority. 
13 The tax imposed under this Section and all civil
penalties 
14that may be assessed as an incident thereof shall be collected

15and enforced by the Department of Revenue. The Department has

16full power to administer and enforce this Section; to collect 
17all taxes
and penalties so collected in the manner provided in 
18this Section; and to
determine
all rights to credit memoranda 
19arising on account of the erroneous payment
of tax or penalty 
20hereunder. In the administration of, and compliance with,
this 
21Section, the Department and persons who are subject to this 
22Section
shall (i) have the same rights, remedies, privileges, 
23immunities, powers and
duties, (ii) be subject to the same 
24conditions, restrictions, limitations,
penalties, exclusions, 
25exemptions, and definitions of terms, and (iii) employ
the 
26same modes of procedure as are prescribed in Sections 1,
1a, 
 
 
SB2196- 108 -LRB103 25662 HLH 52011 b


11a-1, 1c, 1d, 1e, 1f, 1i, 1j, 1k, 1m, 1n, 2, 2-5, 2-5.5, 2-10 
2(in respect
to all provisions
therein other than the State 
3rate of tax), 2-12, 2-15 through 2-70, 2a, 2b, 2c, 3
(except as 
4to
the
disposition of taxes and penalties collected and 
5provisions related to
quarter monthly payments, and except 
6that the retailer's discount is not allowed for taxes paid on 
7aviation fuel that are subject to the revenue use requirements 
8of 49 U.S.C. 47107(b) and 49 U.S.C. 47133), 4, 5, 5a, 5b, 5c, 
95d, 5e,
5f, 5g,
5i, 5j, 5k, 5l, 6, 6a, 6b, 6c, 7, 8, 9, 10, 11, 
1011a, 12, and 13 of
the Retailers' Occupation Tax Act and 
11Section 3-7 of the Uniform Penalty
and Interest Act, as fully 
12as if those provisions were set forth in this
subsection.

13 Persons subject to any tax imposed under this subsection 
14may reimburse
themselves for their seller's tax liability by 
15separately stating
the tax as an additional charge, which 
16charge may be stated in combination,
in a single amount, with 
17State taxes that sellers are required to collect,
in 
18accordance with such bracket schedules as the
Department may 
19prescribe.

20 Whenever the Department determines that a refund should be 
21made under this
subsection to a claimant instead of issuing a 
22credit memorandum, the Department
shall notify the State 
23Comptroller, who shall cause the warrant to be drawn
for the 
24amount specified, and to the person named, in the notification

25from the Department. The refund shall be paid by the State 
26Treasurer out
of the tax fund referenced under
paragraph (g) 
 
 
SB2196- 109 -LRB103 25662 HLH 52011 b


1of this Section or the Local Government Aviation Trust Fund, 
2as appropriate.

3 If a tax is imposed under this subsection (b), a tax shall 
4also be
imposed at the same rate under subsections (c) and (d) 
5of this Section.

6 For the purpose of determining whether a tax authorized 
7under this Section
is applicable, a retail sale, by a producer 
8of coal or other mineral mined
in Illinois, is a sale at retail 
9at the place where the coal or other mineral
mined in Illinois 
10is extracted from the earth. This paragraph does not
apply to 
11coal or other mineral when it is delivered or shipped by the 
12seller
to the purchaser at a point outside Illinois so that the 
13sale is exempt
under the Federal Constitution as a sale in 
14interstate or foreign commerce.

15 Nothing in this Section shall be construed to authorize 
16the Authority
to impose a tax upon the privilege of engaging in 
17any
business which under the Constitution of the United States 
18may not be made
the subject of taxation by this State.

19 (c) If a tax has been imposed under subsection (b), a

20service occupation tax shall
also be imposed at the same rate 
21upon all persons engaged, in the metropolitan
area, in the 
22business
of making sales of service, who, as an incident to 
23making those sales of
service, transfer tangible personal 
24property within the metropolitan area
as an
incident to a sale 
25of service.
The tax imposed under this subsection and all 
26civil penalties that may be
assessed as an incident thereof 
 
 
SB2196- 110 -LRB103 25662 HLH 52011 b


1shall be collected and enforced by the
Department of Revenue. 
2 Beginning December 1, 2019 and through December 31, 2020, 
3this tax is not imposed on sales of aviation fuel unless the 
4tax revenue is expended for airport-related purposes. If the 
5Authority does not have an airport-related purpose to which it 
6dedicates aviation fuel tax revenue, then aviation fuel is 
7excluded from the tax. The Authority must comply with the 
8certification requirements for airport-related purposes under 
9Section 2-22 of the Retailers' Occupation Tax Act. Beginning 
10January 1, 2021, this tax is not imposed on sales of aviation 
11fuel for so long as the revenue use requirements of 49 U.S.C. 
1247107(b) and 49 U.S.C. 47133 are binding on the Authority. 
13 The Department has
full power to
administer and enforce 
14this paragraph; to collect all taxes and penalties
due 
15hereunder; to dispose of taxes and penalties so collected in 
16the manner
hereinafter provided; and to determine all rights 
17to credit memoranda
arising on account of the erroneous 
18payment of tax or penalty hereunder.
In the administration of, 
19and compliance with this paragraph, the
Department and persons 
20who are subject to this paragraph shall (i) have the
same 
21rights, remedies, privileges, immunities, powers, and duties, 
22(ii) be
subject to the same conditions, restrictions, 
23limitations, penalties,
exclusions, exemptions, and 
24definitions of terms, and (iii) employ the same
modes
of 
25procedure as are prescribed in Sections 2 (except that the

26reference to State in the definition of supplier maintaining a 
 
 
SB2196- 111 -LRB103 25662 HLH 52011 b


1place of
business in this State shall mean the metropolitan 
2area), 2a, 2b, 3 through
3-55 (in respect to all provisions 
3therein other than the State rate of
tax), 4 (except that the 
4reference to the State shall be to the Authority),
5, 7, 8 
5(except that the jurisdiction to which the tax shall be a debt 
6to
the extent indicated in that Section 8 shall be the 
7Authority), 9 (except as
to the disposition of taxes and 
8penalties collected, and except that
the returned merchandise 
9credit for this tax may not be taken against any
State tax, and 
10except that the retailer's discount is not allowed for taxes 
11paid on aviation fuel that are subject to the revenue use 
12requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133), 11, 
1312 (except the reference therein to Section 2b of the

14Retailers' Occupation Tax Act), 13 (except that any reference 
15to the State
shall mean the Authority), 15, 16,
17, 18, 19 and 
1620 of the Service Occupation Tax Act and Section 3-7 of
the 
17Uniform Penalty and Interest Act, as fully as if those 
18provisions were
set forth herein.

19 Persons subject to any tax imposed under the authority 
20granted in
this subsection may reimburse themselves for their 
21serviceman's tax liability
by separately stating the tax as an 
22additional charge, which
charge may be stated in combination, 
23in a single amount, with State tax
that servicemen are 
24authorized to collect under the Service Use Tax Act, in

25accordance with such bracket schedules as the Department may 
26prescribe.

 
 
SB2196- 112 -LRB103 25662 HLH 52011 b


1 Whenever the Department determines that a refund should be 
2made under this
subsection to a claimant instead of issuing a 
3credit memorandum, the Department
shall notify the State 
4Comptroller, who shall cause the warrant to be drawn
for the 
5amount specified, and to the person named, in the notification

6from the Department. The refund shall be paid by the State 
7Treasurer out
of the tax fund referenced under
paragraph (g) 
8of this Section or the Local Government Aviation Trust Fund, 
9as appropriate.

10 Nothing in this paragraph shall be construed to authorize 
11the Authority
to impose a tax upon the privilege of engaging in 
12any business which under
the Constitution of the United States 
13may not be made the subject of taxation
by the State.

14 (d) If a tax has been imposed under subsection (b), a
use 
15tax shall
also be imposed at the same rate upon the privilege 
16of using, in the
metropolitan area, any item of
tangible 
17personal property that is purchased outside the metropolitan 
18area at
retail from a retailer, and that is titled or 
19registered at a location within
the metropolitan area with an 
20agency of
this State's government. "Selling price" is
defined 
21as in the Use Tax Act. The tax shall be collected from persons 
22whose
Illinois address for titling or registration purposes is 
23given as being in
the metropolitan area. The tax shall be 
24collected by the Department of Revenue
for
the Authority. The 
25tax must be paid to the State,
or an exemption determination 
26must be obtained from the Department of
Revenue, before the 
 
 
SB2196- 113 -LRB103 25662 HLH 52011 b


1title or certificate of registration for the property
may be 
2issued. The tax or proof of exemption may be transmitted to the

3Department by way of the State agency with which, or the State 
4officer with
whom, the tangible personal property must be 
5titled or registered if the
Department and the State agency or 
6State officer determine that this
procedure will expedite the 
7processing of applications for title or
registration.

8 The Department has full power to administer and enforce 
9this
paragraph; to collect all taxes, penalties and interest 
10due hereunder; to
dispose of taxes, penalties and interest so 
11collected in the manner
hereinafter provided; and to determine 
12all rights to credit memoranda or
refunds arising on account 
13of the erroneous payment of tax, penalty or
interest 
14hereunder. In the administration of, and compliance with, this

15subsection, the Department and persons who are subject to this 
16paragraph
shall (i) have the same rights, remedies, 
17privileges, immunities, powers,
and duties, (ii) be subject to 
18the same conditions, restrictions, limitations,
penalties, 
19exclusions, exemptions, and definitions of terms,
and (iii) 
20employ the same modes of procedure as are prescribed in 
21Sections 2
(except the definition of "retailer maintaining a 
22place of business in this
State"),
3, 3-5, 3-10, 3-45, 3-55, 
233-65, 3-70, 3-85, 3a,
4, 6, 7, 8 (except that the jurisdiction 
24to which the tax shall be a debt to
the extent indicated in 
25that Section 8 shall be the Authority), 9 (except
provisions 
26relating to quarter
monthly payments), 10, 11, 12, 12a, 12b, 
 
 
SB2196- 114 -LRB103 25662 HLH 52011 b


113, 14, 15, 19,
20, 21, and 22 of the Use Tax Act and Section 
23-7 of the Uniform Penalty
and Interest Act, that are not 
3inconsistent with this
paragraph, as fully as if those 
4provisions were set forth herein.

5 Whenever the Department determines that a refund should be 
6made under this
subsection to a claimant instead of issuing a 
7credit memorandum, the Department
shall notify the State 
8Comptroller, who shall cause the order
to be drawn for the 
9amount specified, and to the person named, in the
notification 
10from the Department. The refund shall be paid by the State

11Treasurer out of the tax fund referenced
under paragraph (g) 
12of this Section.

13 (e) A certificate of registration issued by the State 
14Department of
Revenue to a retailer under the Retailers' 
15Occupation Tax Act or under the
Service Occupation Tax Act 
16shall permit the registrant to engage in a
business that is 
17taxed under the tax imposed under paragraphs (b), (c),
or (d) 
18of this Section and no additional registration shall be 
19required.
A certificate issued under the Use Tax Act or the 
20Service Use Tax
Act shall be applicable with regard to any tax 
21imposed under paragraph (c)
of this Section.

22 (f) The results of any election authorizing a proposition 
23to impose a tax
under this Section or effecting a change in the 
24rate of tax shall be certified
by the proper election 
25authorities and filed with the Illinois Department on or

26before the first day of April. In addition, an ordinance 
 
 
SB2196- 115 -LRB103 25662 HLH 52011 b


1imposing,
discontinuing, or effecting a change in the rate of 
2tax under this
Section shall be adopted and a certified copy 
3thereof filed with the
Department
on or before the first day of 
4April. After proper receipt of such
certifications, the 
5Department shall proceed to administer and enforce this

6Section as of the first day of July next following such 
7adoption and filing.

8 (g) Except as otherwise provided, the Department of 
9Revenue shall, upon collecting any taxes and penalties
as

10provided in this Section, pay the taxes and penalties over to 
11the State
Treasurer as
trustee for the Authority. The taxes 
12and penalties shall be held in a trust
fund outside
the State 
13Treasury. Taxes and penalties collected on aviation fuel sold 
14on or after December 1, 2019 and through December 31, 2020, 
15shall be immediately paid over by the Department to the State 
16Treasurer, ex officio, as trustee, for deposit into the Local 
17Government Aviation Trust Fund. The Department shall only pay 
18moneys into the Local Government Aviation Trust Fund under 
19this Section for so long as the revenue use requirements of 49 
20U.S.C. 47107(b) and 49 U.S.C. 47133 are binding on the 
21District. On or before the 25th day of each calendar month, the

22Department of Revenue shall prepare and certify to the 
23Comptroller of
the State of Illinois the amount to be paid to 
24the Authority, which shall be
the balance in the fund, less any 
25amount determined by the Department
to be necessary for the 
26payment of refunds and not including taxes and penalties 
 
 
SB2196- 116 -LRB103 25662 HLH 52011 b


1collected on aviation fuel sold on or after December 1, 2019. 
2Within 10 days after receipt by
the Comptroller of the 
3certification of the amount to be paid to the
Authority, the 
4Comptroller shall cause an order to be drawn for payment
for 
5the amount in accordance with the directions contained in the

6certification.
Amounts received from the tax imposed under 
7this Section shall be used only for
the
support, construction, 
8maintenance, or financing of a facility of the
Authority.

9 (h) When certifying the amount of a monthly disbursement 
10to the Authority
under this Section, the Department shall 
11increase or decrease the amounts by an
amount necessary to 
12offset any miscalculation of previous disbursements. The

13offset amount shall be the amount erroneously disbursed within 
14the previous 6
months from the time a miscalculation is 
15discovered.

16 (h-1) Notwithstanding any other provision of law, no tax 
17may be imposed under this Section on the sale or use of 
18cannabis, as defined in Section 1-10 of the Cannabis 
19Regulation and Tax Act. 
20 (i) This Section may be cited as the Salem Civic Center Use 
21and Occupation
Tax Law.

22(Source: P.A. 101-10, eff. 6-5-19; 101-604, eff. 12-13-19.)


23 Section 15. The Flood Prevention District Act is amended 
24by changing Section 25 as follows:



 
 
SB2196- 117 -LRB103 25662 HLH 52011 b


1 (70 ILCS 750/25)

2 Sec. 25. Flood prevention retailers' and service 
3occupation taxes. 
4 (a) If the Board of Commissioners of a flood prevention 
5district determines that an emergency situation exists 
6regarding levee repair or flood prevention, and upon an 
7ordinance confirming the determination adopted by the 
8affirmative vote of a majority of the members of the county 
9board of the county in which the district is situated, the 
10county may impose a flood prevention
retailers' occupation tax 
11upon all persons engaged in the business of
selling tangible 
12personal property at retail within the territory of the 
13district to provide revenue to pay the costs of providing 
14emergency levee repair and flood prevention and to secure the 
15payment of bonds, notes, and other evidences of indebtedness 
16issued under this Act for a period not to exceed 25 years or as 
17required to repay the bonds, notes, and other evidences of 
18indebtedness issued under this Act.
The tax rate shall be 
190.25%
of the gross receipts from all taxable sales made in the 
20course of that
business. Beginning December 1, 2019 and 
21through December 31, 2020, this tax is not imposed on sales of 
22aviation fuel unless the tax revenue is expended for 
23airport-related purposes. If the District does not have an 
24airport-related purpose to which it dedicates aviation fuel 
25tax revenue, then aviation fuel is excluded from the tax. The 
26County must comply with the certification requirements for 
 
 
SB2196- 118 -LRB103 25662 HLH 52011 b


1airport-related purposes under Section 2-22 of the Retailers' 
2Occupation Tax Act. The tax
imposed under this Section and all 
3civil penalties that may be
assessed as an incident thereof 
4shall be collected and enforced by the
State Department of 
5Revenue. The Department shall have full power to
administer 
6and enforce this Section; to collect all taxes and penalties

7so collected in the manner hereinafter provided; and to 
8determine all
rights to credit memoranda arising on account of 
9the erroneous payment
of tax or penalty hereunder. 
10 For purposes of this Act, "airport-related purposes" has 
11the meaning ascribed in Section 6z-20.2 of the State Finance 
12Act. Beginning January 1, 2021, this tax is not imposed on 
13sales of aviation fuel for so long as the revenue use 
14requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133 are 
15binding on the District. 
16 In the administration of and compliance with this 
17subsection, the Department and persons who are subject to this 
18subsection (i) have the same rights, remedies, privileges, 
19immunities, powers, and duties, (ii) are subject to the same 
20conditions, restrictions, limitations, penalties, and 
21definitions of terms, and (iii) shall employ the same modes of 
22procedure as are set forth in Sections 1 through 1o, 2 through 
232-70 (in respect to all provisions contained in those Sections 
24other than the State rate of tax), 2a through 2h, 3 (except as 
25to the disposition of taxes and penalties collected, and 
26except that the retailer's discount is not allowed for taxes 
 
 
SB2196- 119 -LRB103 25662 HLH 52011 b


1paid on aviation fuel that are subject to the revenue use 
2requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133), 4, 5, 
35a, 5b, 5c, 5d, 5e, 5f, 5g, 5h, 5i, 5l, 6, 6a, 6b, 6c, 6d, 7, 
48, 9, 10, 11, 11a, 12, and 13 of the Retailers' Occupation Tax 
5Act and all provisions of the Uniform Penalty and Interest Act 
6as if those provisions were set forth in this subsection.
7 Persons subject to any tax imposed under this Section may 
8reimburse themselves for their seller's tax
liability 
9hereunder by separately stating the tax as an additional

10charge, which charge may be stated in combination in a single 
11amount
with State taxes that sellers are required to collect 
12under the Use
Tax Act, under any bracket schedules the

13Department may prescribe.
14 If a tax is imposed under this subsection (a), a tax shall 
15also
be imposed under subsection (b) of this Section.
16 (b) If a tax has been imposed under subsection (a), a flood 
17prevention service occupation
tax shall
also be imposed upon 
18all persons engaged within the territory of the district in

19the business of making sales of service, who, as an incident to 
20making the sales
of service, transfer tangible personal 
21property,
either in the form of tangible personal property or 
22in the form of real estate
as an incident to a sale of service 
23to provide revenue to pay the costs of providing emergency 
24levee repair and flood prevention and to secure the payment of 
25bonds, notes, and other evidences of indebtedness issued under 
26this Act for a period not to exceed 25 years or as required to 
 
 
SB2196- 120 -LRB103 25662 HLH 52011 b


1repay the bonds, notes, and other evidences of indebtedness. 
2The tax rate shall be 0.25% of the selling price
of all 
3tangible personal property transferred. Beginning December 1, 
42019 and through December 31, 2020, this tax is not imposed on 
5sales of aviation fuel unless the tax revenue is expended for 
6airport-related purposes. If the District does not have an 
7airport-related purpose to which it dedicates aviation fuel 
8tax revenue, then aviation fuel is excluded from the tax. The 
9County must comply with the certification requirements for 
10airport-related purposes under Section 2-22 of the Retailers' 
11Occupation Tax Act. For purposes of this Act, "airport-related 
12purposes" has the meaning ascribed in Section 6z-20.2 of the 
13State Finance Act. Beginning January 1, 2021, this tax is not 
14imposed on sales of aviation fuel for so long as the revenue 
15use requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133 are 
16binding on the District.
17 The tax imposed under this subsection and all civil

18penalties that may be assessed as an incident thereof shall be 
19collected
and enforced by the State Department of Revenue. The 
20Department shall
have full power to administer and enforce 
21this subsection; to collect all
taxes and penalties due 
22hereunder; to dispose of taxes and penalties
collected in the 
23manner hereinafter provided; and to determine all
rights to 
24credit memoranda arising on account of the erroneous payment

25of tax or penalty hereunder. 
26 In the administration of and compliance with this 
 
 
SB2196- 121 -LRB103 25662 HLH 52011 b


1subsection, the Department and persons who are subject to this 
2subsection shall (i) have the same rights, remedies, 
3privileges, immunities, powers, and duties, (ii) be subject to 
4the same conditions, restrictions, limitations, penalties, and 
5definitions of terms, and (iii) employ the same modes of 
6procedure as are set forth in Sections 2 (except that the 
7reference to State in the definition of supplier maintaining a 
8place of business in this State means the district), 2a 
9through 2d, 3 through 3-50 (in respect to all provisions 
10contained in those Sections other than the State rate of tax), 
114 (except that the reference to the State shall be to the 
12district), 5, 7, 8 (except that the jurisdiction to which the 
13tax is a debt to the extent indicated in that Section 8 is the 
14district), 9 (except as to the disposition of taxes and 
15penalties collected, and except that the retailer's discount 
16is not allowed for taxes paid on aviation fuel that are subject 
17to the revenue use requirements of 49 U.S.C. 47107(b) and 49 
18U.S.C. 47133), 10, 11, 12 (except the reference therein to 
19Section 2b of the Retailers' Occupation Tax Act), 13 (except 
20that any reference to the State means the district), Section 
2115, 16, 17, 18, 19, and 20 of the Service Occupation Tax Act 
22and all provisions of the Uniform Penalty and Interest Act, as 
23fully as if those provisions were set forth herein.
24 Persons subject to any tax imposed under the authority 
25granted
in this subsection may reimburse themselves for their 
26serviceman's tax
liability hereunder by separately stating the 
 
 
SB2196- 122 -LRB103 25662 HLH 52011 b


1tax as an additional
charge, that charge may be stated in 
2combination in a single amount
with State tax that servicemen 
3are authorized to collect under the
Service Use Tax Act, under 
4any bracket schedules the
Department may prescribe.
5 (c) The taxes imposed in subsections (a) and (b) may not be 
6imposed on personal property titled or registered with an 
7agency of the State or on personal property taxed at the 1% 
8rate under the Retailers' Occupation Tax Act and the Service 
9Occupation Tax Act (or at the 0% rate imposed under this 
10amendatory Act of the 102nd General Assembly).
11 (d) Nothing in this Section shall be construed to 
12authorize the
district to impose a tax upon the privilege of 
13engaging in any business
that under the Constitution of the 
14United States may not be made the
subject of taxation by the 
15State.
16 (e) The certificate of registration that is issued by the 
17Department to a retailer under the Retailers' Occupation Tax 
18Act or a serviceman under the Service Occupation Tax Act 
19permits the retailer or serviceman to engage in a business 
20that is taxable without registering separately with the 
21Department under an ordinance or resolution under this 
22Section.
23 (f) Except as otherwise provided, the Department shall 
24immediately pay over to the State Treasurer, ex officio, as 
25trustee, all taxes and penalties collected under this Section 
26to be deposited into the Flood Prevention Occupation Tax Fund, 
 
 
SB2196- 123 -LRB103 25662 HLH 52011 b


1which shall be an unappropriated trust fund held outside the 
2State treasury. Taxes and penalties collected on aviation fuel 
3sold on or after December 1, 2019 and through December 31, 
42020, shall be immediately paid over by the Department to the 
5State Treasurer, ex officio, as trustee, for deposit into the 
6Local Government Aviation Trust Fund. The Department shall 
7only pay moneys into the Local Government Aviation Trust Fund 
8under this Act for so long as the revenue use requirements of 
949 U.S.C. 47107(b) and 49 U.S.C. 47133 are binding on the 
10District.
11 On or before the 25th day of each calendar month, the 
12Department shall prepare and certify to the Comptroller the 
13disbursement of stated sums of money to the counties from 
14which retailers or servicemen have paid taxes or penalties to 
15the Department during the second preceding calendar month. The 
16amount to be paid to each county is equal to the amount (not 
17including credit memoranda and not including taxes and 
18penalties collected on aviation fuel sold on or after December 
191, 2019 and through December 31, 2020) collected from the 
20county under this Section during the second preceding calendar 
21month by the Department, (i) less 2% of that amount (except the 
22amount collected on aviation fuel sold on or after December 1, 
232019 and through December 31, 2020), which shall be deposited 
24into the Tax Compliance and Administration Fund and shall be 
25used by the Department in administering and enforcing the 
26provisions of this Section on behalf of the county, (ii) plus 
 
 
SB2196- 124 -LRB103 25662 HLH 52011 b


1an amount that the Department determines is necessary to 
2offset any amounts that were erroneously paid to a different 
3taxing body; (iii) less an amount equal to the amount of 
4refunds made during the second preceding calendar month by the 
5Department on behalf of the county; and (iv) less any amount 
6that the Department determines is necessary to offset any 
7amounts that were payable to a different taxing body but were 
8erroneously paid to the county. When certifying the amount of 
9a monthly disbursement to a county under this Section, the 
10Department shall increase or decrease the amounts by an amount 
11necessary to offset any miscalculation of previous 
12disbursements within the previous 6 months from the time a 
13miscalculation is discovered.
14 Within 10 days after receipt by the Comptroller from the 
15Department of the disbursement certification to the counties 
16provided for in this Section, the Comptroller shall cause the 
17orders to be drawn for the respective amounts in accordance 
18with directions contained in the certification.
19 If the Department determines that a refund should be made 
20under this Section to a claimant instead of issuing a credit 
21memorandum, then the Department shall notify the Comptroller, 
22who shall cause the order to be drawn for the amount specified 
23and to the person named in the notification from the 
24Department. The refund shall be paid by the Treasurer out of 
25the Flood Prevention Occupation Tax Fund or the Local 
26Government Aviation Trust Fund, as appropriate.
 
 
SB2196- 125 -LRB103 25662 HLH 52011 b


1 (g) If a county imposes a tax under this Section, then the 
2county board shall, by ordinance, discontinue the tax upon the 
3payment of all indebtedness of the flood prevention district. 
4The tax shall not be discontinued until all indebtedness of 
5the District has been paid. 
6 (h) Any ordinance imposing the tax under this Section, or 
7any ordinance that discontinues the tax, must be certified by 
8the county clerk and filed with the Illinois Department of 
9Revenue either (i) on or before the first day of April, 
10whereupon the Department shall proceed to administer and 
11enforce the tax or change in the rate as of the first day of 
12July next following the filing; or (ii) on or before the first 
13day of October, whereupon the Department shall proceed to 
14administer and enforce the tax or change in the rate as of the 
15first day of January next following the filing.
16 (j) County Flood Prevention Occupation Tax Fund. All 
17proceeds received by a county from a tax distribution under 
18this Section must be maintained in a special fund known as the 
19[name of county] flood prevention occupation tax fund. The 
20county shall, at the direction of the flood prevention 
21district, use moneys in the fund to pay the costs of providing 
22emergency levee repair and flood prevention and to pay bonds, 
23notes, and other evidences of indebtedness issued under this 
24Act. 
25 (j-5) Notwithstanding any other provision of law, no tax 
26may be imposed under this Section on the sale or use of 
 
 
SB2196- 126 -LRB103 25662 HLH 52011 b


1cannabis, as defined in Section 1-10 of the Cannabis 
2Regulation and Tax Act. 
3 (k) This Section may be cited as the Flood Prevention 
4Occupation Tax Law.

5(Source: P.A. 101-10, eff. 6-5-19; 101-604, eff. 12-13-19; 
6102-700, eff. 4-19-22.)


7 Section 20. The Metro-East Park and Recreation District 
8Act is amended by changing Section 30 as follows:




9 (70 ILCS 1605/30)


10 Sec. 30. Taxes. 

11 (a) The board shall impose a
tax upon all persons engaged 
12in the business of selling tangible personal
property, other 
13than personal property titled or registered with an agency of

14this State's government,
at retail in the District on the 
15gross receipts from the
sales made in the course of business.

16This tax
shall be imposed only at the rate of one-tenth of one 
17per cent.

18 This additional tax may not be imposed on tangible 
19personal property taxed at the 1% rate under the Retailers' 
20Occupation Tax Act (or at the 0% rate imposed under this 
21amendatory Act of the 102nd General Assembly). Beginning 
22December 1, 2019 and through December 31, 2020, this tax is not 
23imposed on sales of aviation fuel unless the tax revenue is 
24expended for airport-related purposes. If the District does 
 
 
SB2196- 127 -LRB103 25662 HLH 52011 b


1not have an airport-related purpose to which it dedicates 
2aviation fuel tax revenue, then aviation fuel shall be 
3excluded from tax. The board must comply with the 
4certification requirements for airport-related purposes under 
5Section 2-22 of the Retailers' Occupation Tax Act. For 
6purposes of this Act, "airport-related purposes" has the 
7meaning ascribed in Section 6z-20.2 of the State Finance Act. 
8Beginning January 1, 2021, this tax is not imposed on sales of 
9aviation fuel for so long as the revenue use requirements of 49 
10U.S.C. 47107(b) and 49 U.S.C. 47133 are binding on the 
11District.
The tax imposed by the Board under this Section and

12all civil penalties that may be assessed as an incident of the 
13tax shall be
collected and enforced by the Department of 
14Revenue. The certificate
of registration that is issued by the 
15Department to a retailer under the
Retailers' Occupation Tax 
16Act shall permit the retailer to engage in a business
that is 
17taxable without registering separately with the Department 
18under an
ordinance or resolution under this Section. The 
19Department has full
power to administer and enforce this 
20Section, to collect all taxes and
penalties due under this 
21Section, to dispose of taxes and penalties so
collected in the 
22manner provided in this Section, and to determine
all rights 
23to credit memoranda arising on account of the erroneous 
24payment of
a tax or penalty under this Section. In the 
25administration of and compliance
with this Section, the 
26Department and persons who are subject to this Section
shall 
 
 
SB2196- 128 -LRB103 25662 HLH 52011 b


1(i) have the same rights, remedies, privileges, immunities, 
2powers, and
duties, (ii) be subject to the same conditions, 
3restrictions, limitations,
penalties, and definitions of 
4terms, and (iii) employ the same modes of
procedure as are 
5prescribed in Sections 1, 1a, 1a-1, 1d, 1e, 1f,
1i, 1j,
1k, 1m, 
61n,
2,
2-5, 2-5.5, 2-10 (in respect to all provisions 
7contained in those Sections
other than the
State rate of tax), 
82-12, 2-15 through 2-70, 2a, 2b, 2c, 3 (except provisions

9relating to
transaction returns and quarter monthly payments, 
10and except that the retailer's discount is not allowed for 
11taxes paid on aviation fuel that are subject to the revenue use 
12requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133), 4, 5, 
135a, 5b, 5c, 5d, 5e,
5f,
5g, 5h, 5i, 5j, 5k, 5l, 6, 6a, 6b, 6c, 
146d, 7, 8, 9, 10, 11, 11a, 12, and 13 of the
Retailers' 
15Occupation Tax Act and the Uniform Penalty and
Interest Act as 
16if those provisions were set forth in this Section.

17 Persons subject to any tax imposed under the authority 
18granted in this
Section may reimburse themselves for their 
19sellers' tax liability by
separately stating the tax as an 
20additional charge, which charge may be stated
in combination, 
21in a single amount, with State tax which sellers are required

22to collect under the Use Tax Act, pursuant to such bracketed 
23schedules as the
Department may prescribe.

24 Whenever the Department determines that a refund should be 
25made under this
Section to a claimant instead of issuing a 
26credit memorandum, the Department
shall notify the State 
 
 
SB2196- 129 -LRB103 25662 HLH 52011 b


1Comptroller, who shall cause the order to be drawn for
the 
2amount specified and to the person named in the notification 
3from the
Department. The refund shall be paid by the State 
4Treasurer out of the
State Metro-East Park and Recreation 
5District Fund or the Local Government Aviation Trust Fund, as 
6appropriate.

7 (b) If a tax has been imposed under subsection (a), a

8service occupation tax shall
also be imposed at the same rate 
9upon all persons engaged, in the District, in
the business
of 
10making sales of service, who, as an incident to making those 
11sales of
service, transfer tangible personal property within 
12the District
as an
incident to a sale of service.
This tax may 
13not be imposed on tangible personal property taxed at the 1% 
14rate under the Service Occupation Tax Act (or at the 0% rate 
15imposed under this amendatory Act of the 102nd General 
16Assembly). Beginning December 1, 2019 and through December 31, 
172020, this tax may not be imposed on sales of aviation fuel 
18unless the tax revenue is expended for airport-related 
19purposes. If the District does not have an airport-related 
20purpose to which it dedicates aviation fuel tax revenue, then 
21aviation fuel shall be excluded from tax. The board must 
22comply with the certification requirements for airport-related 
23purposes under Section 2-22 of the Retailers' Occupation Tax 
24Act. For purposes of this Act, "airport-related purposes" has 
25the meaning ascribed in Section 6z-20.2 of the State Finance 
26Act. Beginning January 1, 2021, this tax is not imposed on 
 
 
SB2196- 130 -LRB103 25662 HLH 52011 b


1sales of aviation fuel for so long as the revenue use 
2requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133 are 
3binding on the District.
The tax imposed under this subsection 
4and all civil penalties that may be
assessed as an incident 
5thereof shall be collected and enforced by the
Department of 
6Revenue. The Department has
full power to
administer and 
7enforce this subsection; to collect all taxes and penalties

8due hereunder; to dispose of taxes and penalties so collected 
9in the manner
hereinafter provided; and to determine all 
10rights to credit memoranda
arising on account of the erroneous 
11payment of tax or penalty hereunder.
In the administration of, 
12and compliance with this subsection, the
Department and 
13persons who are subject to this paragraph shall (i) have the

14same rights, remedies, privileges, immunities, powers, and 
15duties, (ii) be
subject to the same conditions, restrictions, 
16limitations, penalties,
exclusions, exemptions, and 
17definitions of terms, and (iii) employ the same
modes
of 
18procedure as are prescribed in Sections 2 (except that the

19reference to State in the definition of supplier maintaining a 
20place of
business in this State shall mean the District), 2a, 
212b, 2c, 3 through
3-50 (in respect to all provisions therein 
22other than the State rate of
tax), 4 (except that the reference 
23to the State shall be to the District),
5, 7, 8 (except that 
24the jurisdiction to which the tax shall be a debt to
the extent 
25indicated in that Section 8 shall be the District), 9 (except 
26as
to the disposition of taxes and penalties collected, and 
 
 
SB2196- 131 -LRB103 25662 HLH 52011 b


1except that the retailer's discount is not allowed for taxes 
2paid on aviation fuel that are subject to the revenue use 
3requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133), 10, 
411, 12 (except the
reference therein to Section 2b of the

5Retailers' Occupation Tax Act), 13 (except that any reference 
6to the State
shall mean the District), Sections 15, 16,
17, 18, 
719 and 20 of the Service Occupation Tax Act and
the Uniform 
8Penalty and Interest Act, as fully as if those provisions were

9set forth herein.

10 Persons subject to any tax imposed under the authority 
11granted in
this subsection may reimburse themselves for their 
12serviceman's tax liability
by separately stating the tax as an 
13additional charge, which
charge may be stated in combination, 
14in a single amount, with State tax
that servicemen are 
15authorized to collect under the Service Use Tax Act, in

16accordance with such bracket schedules as the Department may 
17prescribe.

18 Whenever the Department determines that a refund should be 
19made under this
subsection to a claimant instead of issuing a 
20credit memorandum, the Department
shall notify the State 
21Comptroller, who shall cause the warrant to be drawn
for the 
22amount specified, and to the person named, in the notification

23from the Department. The refund shall be paid by the State 
24Treasurer out
of the
State Metro-East Park and Recreation 
25District Fund or the Local Government Aviation Trust Fund, as 
26appropriate.

 
 
SB2196- 132 -LRB103 25662 HLH 52011 b


1 Nothing in this subsection shall be construed to authorize 
2the board
to impose a tax upon the privilege of engaging in any 
3business which under
the Constitution of the United States may 
4not be made the subject of taxation
by the State.

5 (c) Except as otherwise provided in this paragraph, the 
6Department shall immediately pay over to the State Treasurer, 
7ex
officio,
as trustee, all taxes and penalties collected 
8under this Section to be
deposited into the
State Metro-East 
9Park and Recreation District Fund, which
shall be an 
10unappropriated trust fund held outside of the State treasury. 
11Taxes and penalties collected on aviation fuel sold on or 
12after December 1, 2019 and through December 31, 2020, shall be 
13immediately paid over by the Department to the State 
14Treasurer, ex officio, as trustee, for deposit into the Local 
15Government Aviation Trust Fund. The Department shall only pay 
16moneys into the Local Government Aviation Trust Fund under 
17this Act for so long as the revenue use requirements of 49 
18U.S.C. 47107(b) and 49 U.S.C. 47133 are binding on the 
19District. 
20 As soon as possible after the first day of each month, 
21beginning January 1, 2011, upon certification of the 
22Department of Revenue, the Comptroller shall order 
23transferred, and the Treasurer shall transfer, to the STAR 
24Bonds Revenue Fund the local sales tax increment, as defined 
25in the Innovation Development and Economy Act, collected under 
26this Section during the second preceding calendar month for 
 
 
SB2196- 133 -LRB103 25662 HLH 52011 b


1sales within a STAR bond district. The Department shall make 
2this certification only if the Metro East Park and Recreation 
3District imposes a tax on real property as provided in the 
4definition of "local sales taxes" under the Innovation 
5Development and Economy Act. 
6 After the monthly transfer to the STAR Bonds Revenue Fund, 
7on
or before the 25th
day of each calendar month, the 
8Department shall prepare and certify to the
Comptroller the 
9disbursement of stated sums of money
pursuant to Section 35 of 
10this Act to the District from which retailers have
paid
taxes 
11or penalties to the Department during the second preceding

12calendar month. The amount to be paid to the District shall be 
13the amount (not
including credit memoranda and not including 
14taxes and penalties collected on aviation fuel sold on or 
15after December 1, 2019 and through December 31, 2020) 
16collected under this Section during the second
preceding

17calendar month by the Department plus an amount the Department 
18determines is
necessary to offset any amounts that were 
19erroneously paid to a different
taxing body, and not including 
20(i) an amount equal to the amount of refunds
made
during the 
21second preceding calendar month by the Department on behalf of

22the District, (ii) any amount that the Department determines 
23is
necessary to offset any amounts that were payable to a 
24different taxing body
but were erroneously paid to the 
25District, (iii) any amounts that are transferred to the STAR 
26Bonds Revenue Fund, and (iv) 1.5% of the remainder, which the 
 
 
SB2196- 134 -LRB103 25662 HLH 52011 b


1Department shall transfer into the Tax Compliance and 
2Administration Fund. The Department, at the time of each 
3monthly disbursement to the District, shall prepare and 
4certify to the State Comptroller the amount to be transferred 
5into the Tax Compliance and Administration Fund under this 
6subsection. Within 10 days after receipt by the
Comptroller of 
7the disbursement certification to the District and the Tax 
8Compliance and Administration Fund provided for in
this 
9Section to be given to the Comptroller by the Department, the 
10Comptroller
shall cause the orders to be drawn for the 
11respective amounts in accordance
with directions contained in 
12the certification.

13 (d) For the purpose of determining
whether a tax 
14authorized under this Section is
applicable, a retail sale by 
15a producer of coal or another mineral mined in
Illinois is a 
16sale at retail at the place where the coal or other mineral 
17mined
in Illinois is extracted from the earth. This paragraph 
18does not apply to coal
or another mineral when it is delivered 
19or shipped by the seller to the
purchaser
at a point outside 
20Illinois so that the sale is exempt under the United States

21Constitution as a sale in interstate or foreign commerce.

22 (e) Nothing in this Section shall be construed to 
23authorize the board to
impose a
tax upon the privilege of 
24engaging in any business that under the Constitution
of the 
25United States may not be made the subject of taxation by this 
26State.

 
 
SB2196- 135 -LRB103 25662 HLH 52011 b


1 (f) An ordinance imposing a tax under this Section or an 
2ordinance extending
the
imposition of a tax to an additional 
3county or counties
shall be certified
by the
board and filed 
4with the Department of Revenue
either (i) on or
before the 
5first day of April, whereupon the Department shall proceed to

6administer and enforce the tax as of the first day of July next 
7following
the filing; or (ii)
on or before the first day of 
8October, whereupon the
Department shall proceed to administer 
9and enforce the tax as of the first
day of January next 
10following the filing.

11 (g) When certifying the amount of a monthly disbursement 
12to the District
under
this
Section, the Department shall 
13increase or decrease the amounts by an amount
necessary to 
14offset any misallocation of previous disbursements. The offset

15amount shall be the amount erroneously disbursed within the 
16previous 6 months
from the time a misallocation is discovered.

17 (h) Notwithstanding any other provision of law, no tax may 
18be imposed under this Section on the sale or use of cannabis, 
19as defined in Section 1-10 of the Cannabis Regulation and Tax 
20Act. 
21(Source: P.A. 101-10, eff. 6-5-19; 101-81, eff. 7-12-19; 
22101-604, eff. 12-13-19; 102-700, eff. 4-19-22.)


23 Section 25. The Local Mass Transit District Act is amended 
24by changing Section 5.01 as follows:



 
 
SB2196- 136 -LRB103 25662 HLH 52011 b


1 (70 ILCS 3610/5.01)
 (from Ch. 111 2/3, par. 355.01)



2 Sec. 5.01. Metro East Mass Transit District; use and 
3occupation taxes. 

4 (a) The Board of Trustees of any Metro East Mass Transit

5District may, by ordinance adopted with the concurrence of 
6two-thirds of
the then trustees, impose throughout the 
7District any or all of the taxes and
fees provided in this 
8Section. Except as otherwise provided, all taxes and fees 
9imposed under this Section
shall be used only for public mass 
10transportation systems, and the amount used
to provide mass 
11transit service to unserved areas of the District shall be in

12the same proportion to the total proceeds as the number of 
13persons residing in
the unserved areas is to the total 
14population of the District. Except as
otherwise provided in 
15this Act, taxes imposed under
this Section and civil penalties 
16imposed incident thereto shall be
collected and enforced by 
17the State Department of Revenue.
The Department shall have the 
18power to administer and enforce the taxes
and to determine all 
19rights for refunds for erroneous payments of the taxes.

20 (b) The Board may impose a Metro East Mass Transit 
21District Retailers'
Occupation Tax upon all persons engaged in 
22the business of selling tangible
personal property at retail 
23in the district at a rate of 1/4 of 1%, or as
authorized under 
24subsection (d-5) of this Section, of the
gross receipts from 
25the sales made in the course of such business within
the 
26district, except that the rate of tax imposed under this 
 
 
SB2196- 137 -LRB103 25662 HLH 52011 b


1Section on sales of aviation fuel on or after December 1, 2019 
2shall be 0.25% in Madison County unless the Metro-East Mass 
3Transit District in Madison County has an "airport-related 
4purpose" and any additional amount authorized under subsection 
5(d-5) is expended for airport-related purposes. If there is no 
6airport-related purpose to which aviation fuel tax revenue is 
7dedicated, then aviation fuel is excluded from any additional 
8amount authorized under subsection (d-5). The rate in St. 
9Clair County shall be 0.25% unless the Metro-East Mass Transit 
10District in St. Clair County has an "airport-related purpose" 
11and the additional 0.50% of the 0.75% tax on aviation fuel 
12imposed in that County is expended for airport-related 
13purposes. If there is no airport-related purpose to which 
14aviation fuel tax revenue is dedicated, then aviation fuel is 
15excluded from the additional 0.50% of the 0.75% tax. 
16 The Board must comply with the certification requirements 
17for airport-related purposes under Section 2-22 of the 
18Retailers' Occupation Tax Act. For purposes of this Section, 
19"airport-related purposes" has the meaning ascribed in Section 
206z-20.2 of the State Finance Act. This exclusion for aviation 
21fuel only applies for so long as the revenue use requirements 
22of 49 U.S.C. 47107(b) and 49 U.S.C. 47133 are binding on the 
23District. 
24 The tax imposed under this Section and all civil
penalties 
25that may be assessed as an incident thereof shall be collected

26and enforced by the State Department of Revenue. The 
 
 
SB2196- 138 -LRB103 25662 HLH 52011 b


1Department shall have
full power to administer and enforce 
2this Section; to collect all taxes
and penalties so collected 
3in the manner hereinafter provided; and to determine
all 
4rights to credit memoranda arising on account of the erroneous 
5payment
of tax or penalty hereunder. In the administration of, 
6and compliance with,
this Section, the Department and persons 
7who are subject to this Section
shall have the same rights, 
8remedies, privileges, immunities, powers and
duties, and be 
9subject to the same conditions, restrictions, limitations,

10penalties, exclusions, exemptions and definitions of terms and 
11employ
the same modes of procedure, as are prescribed in 
12Sections 1, 1a, 1a-1,
1c, 1d, 1e, 1f, 1i, 1j, 2 through 2-65 
13(in respect to all provisions
therein other than the State 
14rate of tax), 2c, 3 (except as to the
disposition of taxes and 
15penalties collected, and except that the retailer's discount 
16is not allowed for taxes paid on aviation fuel that are subject 
17to the revenue use requirements of 49 U.S.C. 47107(b) and 49 
18U.S.C. 47133), 4, 5, 5a, 5c, 5d, 5e, 5f,
5g, 5h, 5i, 5j, 5k, 
195l, 6, 6a, 6b, 6c, 6d, 7, 8, 9, 10, 11, 12, 13, and 14 of
the 
20Retailers' Occupation Tax Act and Section 3-7 of the Uniform 
21Penalty
and Interest Act, as fully as if those provisions were 
22set forth herein.

23 Persons subject to any tax imposed under the Section may 
24reimburse
themselves for their seller's tax liability 
25hereunder by separately stating
the tax as an additional 
26charge, which charge may be stated in combination,
in a single 
 
 
SB2196- 139 -LRB103 25662 HLH 52011 b


1amount, with State taxes that sellers are required to collect

2under the Use Tax Act, in accordance with such bracket 
3schedules as the
Department may prescribe.

4 Whenever the Department determines that a refund should be 
5made under this
Section to a claimant instead of issuing a 
6credit memorandum, the Department
shall notify the State 
7Comptroller, who shall cause the warrant to be drawn
for the 
8amount specified, and to the person named, in the notification

9from the Department. The refund shall be paid by the State 
10Treasurer out
of the Metro East Mass Transit District tax fund 
11established under
paragraph (h)
of this Section or the Local 
12Government Aviation Trust Fund, as appropriate.

13 If a tax is imposed under this subsection (b), a tax shall 
14also be
imposed under subsections (c) and (d) of this Section.

15 For the purpose of determining whether a tax authorized 
16under this Section
is applicable, a retail sale, by a producer 
17of coal or other mineral mined
in Illinois, is a sale at retail 
18at the place where the coal or other mineral
mined in Illinois 
19is extracted from the earth. This paragraph does not
apply to 
20coal or other mineral when it is delivered or shipped by the 
21seller
to the purchaser at a point outside Illinois so that the 
22sale is exempt
under the Federal Constitution as a sale in 
23interstate or foreign commerce.

24 No tax shall be imposed or collected under this subsection 
25on the sale of a motor vehicle in this State to a resident of 
26another state if that motor vehicle will not be titled in this 
 
 
SB2196- 140 -LRB103 25662 HLH 52011 b


1State.

2 Nothing in this Section shall be construed to authorize 
3the Metro East
Mass Transit District to impose a tax upon the 
4privilege of engaging in any
business which under the 
5Constitution of the United States may not be made
the subject 
6of taxation by this State.

7 (c) If a tax has been imposed under subsection (b), a Metro 
8East Mass
Transit District Service Occupation Tax shall
also 
9be imposed upon all persons engaged, in the district, in the 
10business
of making sales of service, who, as an incident to 
11making those sales of
service, transfer tangible personal 
12property within the District, either in
the form of tangible 
13personal property or in the form of real estate as an
incident 
14to a sale of service. The tax rate shall be 1/4%, or as 
15authorized
under subsection (d-5) of this Section, of the 
16selling
price of tangible personal property so transferred 
17within the district, except that the rate of tax imposed in 
18these Counties under this Section on sales of aviation fuel on 
19or after December 1, 2019 shall be 0.25% in Madison County 
20unless the Metro-East Mass Transit District in Madison County 
21has an "airport-related purpose" and any additional amount 
22authorized under subsection (d-5) is expended for 
23airport-related purposes. If there is no airport-related 
24purpose to which aviation fuel tax revenue is dedicated, then 
25aviation fuel is excluded from any additional amount 
26authorized under subsection (d-5). The rate in St. Clair 
 
 
SB2196- 141 -LRB103 25662 HLH 52011 b


1County shall be 0.25% unless the Metro-East Mass Transit 
2District in St. Clair County has an "airport-related purpose" 
3and the additional 0.50% of the 0.75% tax on aviation fuel is 
4expended for airport-related purposes. If there is no 
5airport-related purpose to which aviation fuel tax revenue is 
6dedicated, then aviation fuel is excluded from the additional 
70.50% of the 0.75% tax.

8 The Board must comply with the certification requirements 
9for airport-related purposes under Section 2-22 of the 
10Retailers' Occupation Tax Act. For purposes of this Section, 
11"airport-related purposes" has the meaning ascribed in Section 
126z-20.2 of the State Finance Act. This exclusion for aviation 
13fuel only applies for so long as the revenue use requirements 
14of 49 U.S.C. 47107(b) and 49 U.S.C. 47133 are binding on the 
15District. 
16 The tax imposed under this paragraph and all civil 
17penalties that may be
assessed as an incident thereof shall be 
18collected and enforced by the
State Department of Revenue. The 
19Department shall have full power to
administer and enforce 
20this paragraph; to collect all taxes and penalties
due 
21hereunder; to dispose of taxes and penalties so collected in 
22the manner
hereinafter provided; and to determine all rights 
23to credit memoranda
arising on account of the erroneous 
24payment of tax or penalty hereunder.
In the administration of, 
25and compliance with this paragraph, the
Department and persons 
26who are subject to this paragraph shall have the
same rights, 
 
 
SB2196- 142 -LRB103 25662 HLH 52011 b


1remedies, privileges, immunities, powers and duties, and be

2subject to the same conditions, restrictions, limitations, 
3penalties,
exclusions, exemptions and definitions of terms and 
4employ the same modes
of procedure as are prescribed in 
5Sections 1a-1, 2 (except that the
reference to State in the 
6definition of supplier maintaining a place of
business in this 
7State shall mean the Authority), 2a, 3 through
3-50 (in 
8respect to all provisions therein other than the State rate of

9tax), 4 (except that the reference to the State shall be to the 
10Authority),
5, 7, 8 (except that the jurisdiction to which the 
11tax shall be a debt to
the extent indicated in that Section 8 
12shall be the District), 9 (except as
to the disposition of 
13taxes and penalties collected, and except that
the returned 
14merchandise credit for this tax may not be taken against any

15State tax, and except that the retailer's discount is not 
16allowed for taxes paid on aviation fuel that are subject to the 
17revenue use requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 
1847133), 10, 11, 12 (except the reference therein to Section 2b 
19of the
Retailers' Occupation Tax Act), 13 (except that any 
20reference to the State
shall mean the District), the first 
21paragraph of Section 15, 16,
17, 18, 19 and 20 of the Service 
22Occupation Tax Act and Section 3-7 of
the Uniform Penalty and 
23Interest Act, as fully as if those provisions were
set forth 
24herein.

25 Persons subject to any tax imposed under the authority 
26granted in
this paragraph may reimburse themselves for their 
 
 
SB2196- 143 -LRB103 25662 HLH 52011 b


1serviceman's tax liability
hereunder by separately stating the 
2tax as an additional charge, which
charge may be stated in 
3combination, in a single amount, with State tax
that 
4servicemen are authorized to collect under the Service Use Tax 
5Act, in
accordance with such bracket schedules as the 
6Department may prescribe.

7 Whenever the Department determines that a refund should be 
8made under this
paragraph to a claimant instead of issuing a 
9credit memorandum, the Department
shall notify the State 
10Comptroller, who shall cause the warrant to be drawn
for the 
11amount specified, and to the person named, in the notification

12from the Department. The refund shall be paid by the State 
13Treasurer out
of the Metro East Mass Transit District tax fund 
14established under
paragraph (h)
of this Section or the Local 
15Government Aviation Trust Fund, as appropriate.

16 Nothing in this paragraph shall be construed to authorize 
17the District
to impose a tax upon the privilege of engaging in 
18any business which under
the Constitution of the United States 
19may not be made the subject of taxation
by the State.

20 (d) If a tax has been imposed under subsection (b), a Metro 
21East Mass
Transit District Use Tax shall
also be imposed upon 
22the privilege of using, in the district, any item of
tangible 
23personal property that is purchased outside the district at

24retail from a retailer, and that is titled or registered with 
25an agency of
this State's government, at a rate of 1/4%, or as 
26authorized under subsection
(d-5) of this Section, of the 
 
 
SB2196- 144 -LRB103 25662 HLH 52011 b


1selling price of the
tangible personal property within the 
2District, as "selling price" is
defined in the Use Tax Act. The 
3tax shall be collected from persons whose
Illinois address for 
4titling or registration purposes is given as being in
the 
5District. The tax shall be collected by the Department of 
6Revenue for
the Metro East Mass Transit District. The tax must 
7be paid to the State,
or an exemption determination must be 
8obtained from the Department of
Revenue, before the title or 
9certificate of registration for the property
may be issued. 
10The tax or proof of exemption may be transmitted to the

11Department by way of the State agency with which, or the State 
12officer with
whom, the tangible personal property must be 
13titled or registered if the
Department and the State agency or 
14State officer determine that this
procedure will expedite the 
15processing of applications for title or
registration.

16 The Department shall have full power to administer and 
17enforce this
paragraph; to collect all taxes, penalties and 
18interest due hereunder; to
dispose of taxes, penalties and 
19interest so collected in the manner
hereinafter provided; and 
20to determine all rights to credit memoranda or
refunds arising 
21on account of the erroneous payment of tax, penalty or

22interest hereunder. In the administration of, and compliance 
23with, this
paragraph, the Department and persons who are 
24subject to this paragraph
shall have the same rights, 
25remedies, privileges, immunities, powers and
duties, and be 
26subject to the same conditions, restrictions, limitations,

 
 
SB2196- 145 -LRB103 25662 HLH 52011 b


1penalties, exclusions, exemptions and definitions of terms
and 
2employ the same modes of procedure, as are prescribed in 
3Sections 2
(except the definition of "retailer maintaining a 
4place of business in this
State"), 3 through 3-80 (except 
5provisions pertaining to the State rate
of tax, and except 
6provisions concerning collection or refunding of the tax
by 
7retailers), 4, 11, 12, 12a, 14, 15, 19 (except the portions 
8pertaining
to claims by retailers and except the last 
9paragraph concerning refunds),
20, 21 and 22 of the Use Tax Act 
10and Section 3-7 of the Uniform Penalty
and Interest Act, that 
11are not inconsistent with this
paragraph, as fully as if those 
12provisions were set forth herein.

13 Whenever the Department determines that a refund should be 
14made under this
paragraph to a claimant instead of issuing a 
15credit memorandum, the Department
shall notify the State 
16Comptroller, who shall cause the order
to be drawn for the 
17amount specified, and to the person named, in the
notification 
18from the Department. The refund shall be paid by the State

19Treasurer out of the Metro East Mass Transit District tax fund 
20established
under paragraph (h)
of this Section.

21 (d-5) (A) The county board of any county participating in 
22the Metro
East Mass Transit District may authorize, by 
23ordinance, a
referendum on the question of whether the tax 
24rates for the
Metro East Mass Transit District Retailers' 
25Occupation Tax, the
Metro East Mass Transit District Service 
26Occupation Tax, and the
Metro East Mass Transit District Use 
 
 
SB2196- 146 -LRB103 25662 HLH 52011 b


1Tax for
the District should be increased from 0.25% to 0.75%.

2Upon adopting the ordinance, the county
board shall certify 
3the proposition to the proper election officials who shall

4submit the proposition to the voters of the District at the 
5next election,
in accordance with the general election law.

6 The proposition shall be in substantially the following 
7form:

8  Shall the tax rates for the Metro East Mass Transit 
9 District Retailers'
Occupation Tax, the Metro East Mass 
10 Transit District Service Occupation Tax,
and the Metro 
11 East Mass Transit District Use Tax be increased from 0.25% 
12 to
0.75%?

13 (B) Two thousand five hundred electors of any Metro East 
14Mass Transit
District may petition the Chief Judge of the 
15Circuit Court, or any judge of
that Circuit designated by the 
16Chief Judge, in which that District is located
to cause to be 
17submitted to a vote of the electors the question whether the 
18tax
rates for the Metro East Mass Transit District Retailers' 
19Occupation Tax, the
Metro East Mass Transit District Service 
20Occupation Tax, and the Metro East
Mass Transit District Use 
21Tax for the District should be increased from 0.25%
to 0.75%.

22 Upon submission of such petition the court shall set a 
23date not less than 10
nor more than 30 days thereafter for a 
24hearing on the sufficiency thereof.
Notice of the filing of 
25such petition and of such date shall be given in
writing to the 
26District and the County Clerk at least 7 days before the date 


 
 
SB2196- 147 -LRB103 25662 HLH 52011 b


1of
such hearing.

2 If such petition is found sufficient, the court shall 
3enter an order to
submit that proposition at the next 
4election, in accordance with general
election law.

5 The form of the petition shall be in substantially the 
6following form: To the
Circuit Court of the County of (name of 
7county):

8  We, the undersigned electors of the (name of transit 
9 district),
respectfully petition your honor to submit to a 
10 vote of the electors of (name
of transit district) the 
11 following proposition:

12  Shall the tax rates for the Metro East Mass Transit 
13 District Retailers'
Occupation Tax, the Metro East Mass 
14 Transit District Service Occupation Tax,
and the Metro 
15 East Mass Transit District Use Tax be increased from 0.25% 
16 to
0.75%?

17  Name    Address, with Street and Number.

18..............................................................
19..............................................................
20 (C) The votes shall be recorded as "YES" or "NO". If a 
21majority of all
votes
cast on the proposition are for the 
22increase in
the tax rates, the Metro East Mass Transit 
23District shall begin imposing the
increased rates in the 
24District, and
the Department of Revenue shall begin collecting 
25the increased amounts, as
provided under this Section.
An 
26ordinance imposing or discontinuing a tax hereunder or 
 
 
SB2196- 148 -LRB103 25662 HLH 52011 b


1effecting a change
in the rate thereof shall be adopted and a 
2certified copy thereof filed with
the Department on or before 
3the first day of October, whereupon the Department
shall 
4proceed to administer and enforce this Section as of the first 
5day of
January next following the adoption and filing, or on or 
6before the first day
of April, whereupon the Department shall 
7proceed to administer and enforce this
Section as of the first 
8day of July next following the adoption and filing.

9 (D) If the voters have approved a referendum under this 
10subsection,
before
November 1, 1994, to
increase the tax rate 
11under this subsection, the Metro East Mass Transit
District 
12Board of Trustees may adopt by a majority vote an ordinance at 
13any
time
before January 1, 1995 that excludes from the rate 
14increase tangible personal
property that is titled or 
15registered with an
agency of this State's government.
The 
16ordinance excluding titled or
registered tangible personal 
17property from the rate increase must be filed with
the 
18Department at least 15 days before its effective date.
At any 
19time after adopting an ordinance excluding from the rate 
20increase
tangible personal property that is titled or 
21registered with an agency of this
State's government, the 
22Metro East Mass Transit District Board of Trustees may
adopt 
23an ordinance applying the rate increase to that tangible 
24personal
property. The ordinance shall be adopted, and a 
25certified copy of that
ordinance shall be filed with the 
26Department, on or before October 1, whereupon
the Department 
 
 
SB2196- 149 -LRB103 25662 HLH 52011 b


1shall proceed to administer and enforce the rate increase

2against tangible personal property titled or registered with 
3an agency of this
State's government as of the following 
4January
1. After December 31, 1995, any reimposed rate 
5increase in effect under this
subsection shall no longer apply 
6to tangible personal property titled or
registered with an 
7agency of this State's government. Beginning January 1,
1996, 
8the Board of Trustees of any Metro East Mass Transit
District 
9may never reimpose a previously excluded tax rate increase on 
10tangible
personal property titled or registered with an agency 
11of this State's
government.
After July 1, 2004, if the voters 
12have approved a referendum under this
subsection to increase 
13the tax rate under this subsection, the Metro East Mass

14Transit District Board of Trustees may adopt by a majority 
15vote an ordinance
that excludes from the rate increase 
16tangible personal property that is titled
or registered with 
17an agency of this State's government. The ordinance excluding 
18titled or registered tangible personal property from the rate 
19increase shall be
adopted, and a certified copy of that 
20ordinance shall be filed with the
Department on or before 
21October 1, whereupon the Department shall administer and 
22enforce this exclusion from the rate increase as of the

23following January 1, or on or before April 1, whereupon the 
24Department shall
administer and enforce this exclusion from 
25the rate increase as of the
following July 1. The Board of 
26Trustees of any Metro East Mass Transit District
may never

 
 
SB2196- 150 -LRB103 25662 HLH 52011 b


1reimpose a previously excluded tax rate increase on tangible 
2personal property
titled or registered with an agency of this 
3State's government.

4 (d-6) If the Board of Trustees of any Metro East Mass 
5Transit District has
imposed a rate increase under subsection 
6(d-5) and filed an
ordinance with the Department of Revenue 
7excluding titled property from the
higher rate, then that 
8Board may, by ordinance adopted with
the concurrence of 
9two-thirds of the then trustees, impose throughout the

10District a fee. The fee on the excluded property shall not 
11exceed $20 per
retail transaction or an
amount
equal to the 
12amount of tax excluded, whichever is less, on
tangible 
13personal property that is titled or registered with an agency 
14of this
State's government. Beginning July 1, 2004, the fee 
15shall apply only to
titled property that is subject to either 
16the Metro East Mass Transit District
Retailers' Occupation Tax 
17or the Metro East Mass Transit District Service
Occupation 
18Tax. No fee shall be imposed or collected under this 
19subsection on the sale of a motor vehicle in this State to a 
20resident of another state if that motor vehicle will not be 
21titled in this State.


22 (d-7) Until June 30, 2004, if a fee has been imposed under 
23subsection
(d-6), a fee shall also
be imposed upon the 
24privilege of using, in the district, any item of tangible

25personal property that is titled or registered with any agency 
26of this State's
government, in an amount equal to the amount of 
 
 
SB2196- 151 -LRB103 25662 HLH 52011 b


1the fee imposed under
subsection (d-6). 

2 (d-7.1) Beginning July 1, 2004, any fee imposed by the 
3Board of Trustees
of any Metro East Mass Transit District 
4under subsection (d-6) and all civil
penalties that may be 
5assessed as an incident of the fees shall be collected
and 
6enforced by the State Department of Revenue. Reference to 
7"taxes" in this
Section shall be construed to apply to the 
8administration, payment, and
remittance of all fees under this 
9Section. For purposes of any fee imposed
under subsection 
10(d-6), 4% of the fee, penalty, and interest received by the

11Department in the first 12 months that the fee is collected and 
12enforced by
the Department and 2% of the fee, penalty, and 
13interest following the first
12 months (except the amount 
14collected on aviation fuel sold on or after December 1, 2019) 
15shall be deposited into the Tax Compliance and Administration

16Fund and shall be used by the Department, subject to 
17appropriation, to cover
the costs of the Department. No 
18retailers' discount shall apply to any fee
imposed under 
19subsection (d-6).

20 (d-8) No item of titled property shall be subject to both

21the higher rate approved by referendum, as authorized under 
22subsection (d-5),
and any fee imposed under subsection (d-6) 
23or (d-7).

24 (d-9) (Blank).


25 (d-10) (Blank).


26 (e) A certificate of registration issued by the State 
 
 
SB2196- 152 -LRB103 25662 HLH 52011 b


1Department of
Revenue to a retailer under the Retailers' 
2Occupation Tax Act or under the
Service Occupation Tax Act 
3shall permit the registrant to engage in a
business that is 
4taxed under the tax imposed under paragraphs (b), (c)
or (d) of 
5this Section and no additional registration shall be required 
6under
the tax. A certificate issued under the Use Tax Act or 
7the Service Use Tax
Act shall be applicable with regard to any 
8tax imposed under paragraph (c)
of this Section.

9 (f) (Blank).


10 (g) Any ordinance imposing or discontinuing any tax under 
11this
Section shall be adopted and a certified copy thereof 
12filed with the
Department on or before June 1, whereupon the 
13Department of Revenue shall
proceed to administer and enforce 
14this Section on behalf of the Metro East
Mass Transit District 
15as of September 1 next following such
adoption and filing. 
16Beginning January 1, 1992, an ordinance or resolution
imposing 
17or discontinuing the tax hereunder shall be adopted and a

18certified copy thereof filed with the Department on or before 
19the first day
of July, whereupon the Department shall proceed 
20to administer and enforce
this Section as of the first day of 
21October next following such adoption
and filing. Beginning 
22January 1, 1993, except as provided in subsection
(d-5) of 
23this Section, an ordinance or resolution imposing
or 
24discontinuing the tax hereunder shall be adopted and a 
25certified copy
thereof filed with the Department on or before 
26the first day of October,
whereupon the Department shall 
 
 
SB2196- 153 -LRB103 25662 HLH 52011 b


1proceed to administer and enforce this
Section as of the first 
2day of January next following such adoption and
filing,
or, 
3beginning January 1, 2004, on or before the first day of April, 
4whereupon
the Department shall proceed to administer and 
5enforce this Section as of the
first day of July next following 
6the adoption and filing.

7 (h) Except as provided in subsection (d-7.1), the State 
8Department of
Revenue shall, upon collecting any taxes as

9provided in this Section, pay the taxes over to the State 
10Treasurer as
trustee for the District. The taxes shall be held 
11in a trust fund outside
the State Treasury. If an 
12airport-related purpose has been certified, taxes and 
13penalties collected in St. Clair County on aviation fuel sold 
14on or after December 1, 2019 from the 0.50% of the 0.75% rate 
15shall be immediately paid over by the Department to the State 
16Treasurer, ex officio, as trustee, for deposit into the Local 
17Government Aviation Trust Fund. The Department shall only pay 
18moneys into the Local Government Aviation Trust Fund under 
19this Act for so long as the revenue use requirements of 49 
20U.S.C. 47107(b) and 49 U.S.C. 47133 are binding on the 
21District.
22 As soon as possible after the first day of each month, 
23beginning January 1, 2011, upon certification of the 
24Department of Revenue, the Comptroller shall order 
25transferred, and the Treasurer shall transfer, to the STAR 
26Bonds Revenue Fund the local sales tax increment, as defined 
 
 
SB2196- 154 -LRB103 25662 HLH 52011 b


1in the Innovation Development and Economy Act, collected under 
2this Section during the second preceding calendar month for 
3sales within a STAR bond district. The Department shall make 
4this certification only if the local mass transit district 
5imposes a tax on real property as provided in the definition of 
6"local sales taxes" under the Innovation Development and 
7Economy Act.
8 After the monthly transfer to the STAR Bonds Revenue Fund, 
9on or before the 25th day of each calendar month, the
State 
10Department of Revenue shall prepare and certify to the 
11Comptroller of
the State of Illinois the amount to be paid to 
12the District, which shall be
the amount (not including credit 
13memoranda and not including taxes and penalties collected on 
14aviation fuel sold on or after December 1, 2019 that are 
15deposited into the Local Government Aviation Trust Fund) 
16collected under this Section during the second preceding 
17calendar month by the Department plus an amount the Department 
18determines is necessary to offset any amounts that were 
19erroneously paid to a different taxing body, and not including 
20any amount equal to the amount of refunds made during the 
21second preceding calendar month by the Department on behalf of 
22the District, and not including any amount that the Department 
23determines is necessary to offset any amounts that were 
24payable to a different taxing body but were erroneously paid 
25to the District, and less any amounts that are transferred to 
26the STAR Bonds Revenue Fund, less 1.5% of the remainder, which 
 
 
SB2196- 155 -LRB103 25662 HLH 52011 b


1the Department shall transfer into the Tax Compliance and 
2Administration Fund. The Department, at the time of each 
3monthly disbursement to the District, shall prepare and 
4certify to the State Comptroller the amount to be transferred 
5into the Tax Compliance and Administration Fund under this 
6subsection. Within 10 days after receipt by
the Comptroller of 
7the certification of the amount to be paid to the
District and 
8the Tax Compliance and Administration Fund, the Comptroller 
9shall cause an order to be drawn for payment
for the amount in 
10accordance with the direction in the certification.

11 (i) Notwithstanding any other provision of law, no tax may 
12be imposed under this Section on the sale or use of cannabis, 
13as defined in Section 1-10 of the Cannabis Regulation and Tax 
14Act. 
15(Source: P.A. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18; 
16101-10, eff. 6-5-19; 101-604, eff. 12-13-19.)


17 Section 30. The Water Commission Act of 1985 is amended by 
18changing Section 4 as follows:




19 (70 ILCS 3720/4) (from Ch. 111 2/3, par. 254)


20 Sec. 4. Taxes.
21 (a) The board of commissioners of any county water 
22commission
may, by ordinance, impose throughout the territory 
23of the commission any or
all of the taxes provided in this 
24Section for its corporate purposes.
However, no county water 
 
 
SB2196- 156 -LRB103 25662 HLH 52011 b


1commission may impose any such tax unless the
commission 
2certifies the proposition of imposing the tax to the proper

3election officials, who shall submit the proposition to the 
4voters residing
in the territory at an election in accordance 
5with the general election
law, and the proposition has been 
6approved by a majority of those voting on
the proposition.

7 The proposition shall be in the form provided in Section 5 
8or shall be
substantially in the following form:

9-------------------------------------------------------------

10 Shall the (insert corporate

11name of county water commission) YES

12impose (state type of tax or ------------------------

13taxes to be imposed) at the NO

14rate of 1/4%?

15-------------------------------------------------------------

16 Taxes imposed under this Section and civil penalties 
17imposed
incident thereto shall be collected and enforced by 
18the State Department of
Revenue. The Department shall have the 
19power to administer and enforce the
taxes and to determine all 
20rights for refunds for erroneous payments of
the taxes.

21 (b) The board of commissioners may impose a County Water 
22Commission
Retailers' Occupation Tax upon all persons engaged 
23in the business of
selling tangible personal property at 
24retail in the territory of the
commission at a rate of 1/4% of 
25the gross receipts from the sales made in
the course of such 
26business within the territory. Beginning January 1, 2021, this 
 
 
SB2196- 157 -LRB103 25662 HLH 52011 b


1tax is not imposed on sales of aviation fuel for so long as the 
2revenue use requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 
347133 are binding on the District.
4 The tax imposed under
this paragraph and all civil 
5penalties that may be assessed as an incident
thereof shall be 
6collected and enforced by the State Department of Revenue.
The 
7Department shall have full power to administer and enforce 
8this
paragraph; to collect all taxes and penalties due 
9hereunder; to dispose of
taxes and penalties so collected in 
10the manner hereinafter provided; and to
determine all rights 
11to credit memoranda arising on account of the
erroneous 
12payment of tax or penalty hereunder. In the administration of,

13and compliance with, this paragraph, the Department and 
14persons who are
subject to this paragraph shall have the same 
15rights, remedies, privileges,
immunities, powers and duties, 
16and be subject to the same conditions,
restrictions, 
17limitations, penalties, exclusions, exemptions and
definitions 
18of terms, and employ the same modes of procedure, as are

19prescribed in Sections 1, 1a, 1a-1, 1c, 1d, 1e, 1f, 1i, 1j, 2 
20through 2-65
(in respect to all provisions therein other than 
21the State rate of tax
except that tangible personal property 
22taxed at the 1% rate under the Retailers' Occupation Tax Act

23shall not be subject to tax hereunder), 2c, 3 (except as to the 
24disposition
of taxes and penalties collected, and except that 
25the retailer's discount is not allowed for taxes paid on 
26aviation fuel sold on or after December 1, 2019 and through 
 
 
SB2196- 158 -LRB103 25662 HLH 52011 b


1December 31, 2020), 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5h,
5i, 
25j, 5k, 5l, 6, 6a, 6b, 6c, 6d, 7, 8, 9, 10, 11, 12, and 13 of

3the Retailers' Occupation Tax Act and Section 3-7 of the 
4Uniform Penalty
and Interest Act, as fully as if those 
5provisions were set forth herein.

6 Persons subject to any tax imposed under the authority 
7granted in this
paragraph may reimburse themselves for their 
8seller's tax liability
hereunder by separately stating the tax 
9as an additional charge, which
charge may be stated in 
10combination, in a single amount, with State taxes
that sellers 
11are required to collect under the Use Tax Act and under

12subsection (e) of Section 4.03 of the Regional Transportation 
13Authority
Act, in accordance with such bracket schedules as 
14the Department may prescribe.

15 Whenever the Department determines that a refund should be 
16made under this
paragraph to a claimant instead of issuing a 
17credit memorandum, the Department
shall notify the State 
18Comptroller, who shall cause the warrant to be drawn
for the 
19amount specified, and to the person named, in the notification

20from the Department. The refund shall be paid by the State 
21Treasurer out
of a county water commission tax fund 
22established under subsection (g) of
this Section.

23 For the purpose of determining whether a tax authorized 
24under this paragraph
is applicable, a retail sale by a 
25producer of coal or other mineral mined
in Illinois is a sale 
26at retail at the place where the coal or other mineral
mined in 
 
 
SB2196- 159 -LRB103 25662 HLH 52011 b


1Illinois is extracted from the earth. This paragraph does not

2apply to coal or other mineral when it is delivered or shipped 
3by the seller
to the purchaser at a point outside Illinois so 
4that the sale is exempt
under the Federal Constitution as a 
5sale in interstate or foreign commerce.

6 If a tax is imposed under this subsection (b), a tax shall 
7also be
imposed under subsections (c) and (d) of this Section.

8 No tax shall be imposed or collected under this subsection 
9on the sale of a motor vehicle in this State to a resident of 
10another state if that motor vehicle will not be titled in this 
11State.

12 Nothing in this paragraph shall be construed to authorize 
13a county water
commission to impose a tax upon the privilege of 
14engaging in any
business which under the Constitution of the 
15United States may not be made
the subject of taxation by this 
16State.

17 (c) If a tax has been imposed under subsection (b), a

18County Water Commission Service Occupation
Tax shall
also be 
19imposed upon all persons engaged, in the territory of the

20commission, in the business of making sales of service, who, 
21as an
incident to making the sales of service, transfer 
22tangible personal
property within the territory. The tax rate 
23shall be 1/4% of the selling
price of tangible personal 
24property so transferred within the territory.
Beginning 
25January 1, 2021, this tax is not imposed on sales of aviation 
26fuel for so long as the revenue use requirements of 49 U.S.C. 
 
 
SB2196- 160 -LRB103 25662 HLH 52011 b


147107(b) and 49 U.S.C. 47133 are binding on the District.
2 The tax imposed under this paragraph and all civil 
3penalties that may be
assessed as an incident thereof shall be 
4collected and enforced by the
State Department of Revenue. The 
5Department shall have full power to
administer and enforce 
6this paragraph; to collect all taxes and penalties
due 
7hereunder; to dispose of taxes and penalties so collected in 
8the manner
hereinafter provided; and to determine all rights 
9to credit memoranda
arising on account of the erroneous 
10payment of tax or penalty hereunder.
In the administration of, 
11and compliance with, this paragraph, the
Department and 
12persons who are subject to this paragraph shall have the
same 
13rights, remedies, privileges, immunities, powers and duties, 
14and be
subject to the same conditions, restrictions, 
15limitations, penalties,
exclusions, exemptions and definitions 
16of terms, and employ the same modes
of procedure, as are 
17prescribed in Sections 1a-1, 2 (except that the
reference to 
18State in the definition of supplier maintaining a place of

19business in this State shall mean the territory of the 
20commission), 2a, 3
through 3-50 (in respect to all provisions 
21therein other than the State
rate of tax except that tangible 
22personal property taxed at the 1% rate under the Service 
23Occupation Tax Act shall not be subject to tax hereunder), 4 
24(except that the
reference to the State shall be to the 
25territory of the commission), 5, 7,
8 (except that the 
26jurisdiction to which the tax shall be a debt to the
extent 
 
 
SB2196- 161 -LRB103 25662 HLH 52011 b


1indicated in that Section 8 shall be the commission), 9 
2(except as
to the disposition of taxes and penalties collected 
3and except that the
returned merchandise credit for this tax 
4may not be taken against any State
tax, and except that the 
5retailer's discount is not allowed for taxes paid on aviation 
6fuel sold on or after December 1, 2019 and through December 31, 
72020), 10, 11, 12 (except the reference therein to Section 2b 
8of the
Retailers' Occupation Tax Act), 13 (except that any 
9reference to the State
shall mean the territory of the 
10commission), the first paragraph of Section
15, 15.5, 16, 17, 
1118, 19, and 20 of the Service Occupation Tax Act as fully
as if 
12those provisions were set forth herein.

13 Persons subject to any tax imposed under the authority 
14granted in
this paragraph may reimburse themselves for their 
15serviceman's tax liability
hereunder by separately stating the 
16tax as an additional charge, which
charge may be stated in 
17combination, in a single amount, with State tax
that 
18servicemen are authorized to collect under the Service Use Tax 
19Act,
and any tax for which servicemen may be liable under 
20subsection (f) of Section
4.03 of the Regional Transportation 
21Authority Act, in accordance
with such bracket schedules as 
22the Department may prescribe.

23 Whenever the Department determines that a refund should be 
24made under this
paragraph to a claimant instead of issuing a 
25credit memorandum, the Department
shall notify the State 
26Comptroller, who shall cause the warrant to be drawn
for the 
 
 
SB2196- 162 -LRB103 25662 HLH 52011 b


1amount specified, and to the person named, in the notification 
2from
the Department. The refund shall be paid by the State 
3Treasurer out of a
county water commission tax fund 
4established under subsection (g) of this
Section.

5 Nothing in this paragraph shall be construed to authorize 
6a county water
commission to impose a tax upon the privilege of 
7engaging in any business
which under the Constitution of the 
8United States may not be made the
subject of taxation by the 
9State.

10 (d) If a tax has been imposed under subsection (b), a tax 
11shall
also be imposed upon the privilege of using, in the 
12territory of the
commission, any item of tangible personal 
13property that is purchased
outside the territory at retail 
14from a retailer, and that is titled or
registered with an 
15agency of this State's government, at a rate of 1/4% of
the 
16selling price of the tangible personal property within the 
17territory,
as "selling price" is defined in the Use Tax Act. 
18The tax shall be collected
from persons whose Illinois address 
19for titling or registration purposes
is given as being in the 
20territory. The tax shall be collected by the
Department of 
21Revenue for a county water commission. The tax must be paid
to 
22the State, or an exemption determination must be obtained from 
23the
Department of Revenue, before the title or certificate of 
24registration for
the property may be issued. The tax or proof 
25of exemption may be
transmitted to the Department by way of the 
26State agency with which, or the
State officer with whom, the 
 
 
SB2196- 163 -LRB103 25662 HLH 52011 b


1tangible personal property must be titled or
registered if the 
2Department and the State agency or State officer
determine 
3that this procedure will expedite the processing of 
4applications
for title or registration.

5 The Department shall have full power to administer and 
6enforce this
paragraph; to collect all taxes, penalties, and 
7interest due hereunder; to
dispose of taxes, penalties, and 
8interest so collected in the manner
hereinafter provided; and 
9to determine all rights to credit memoranda or
refunds arising 
10on account of the erroneous payment of tax, penalty, or

11interest hereunder. In the administration of and compliance 
12with this
paragraph, the Department and persons who are 
13subject to this paragraph
shall have the same rights, 
14remedies, privileges, immunities, powers, and
duties, and be 
15subject to the same conditions, restrictions, limitations,

16penalties, exclusions, exemptions, and definitions of terms 
17and employ the
same modes of procedure, as are prescribed in 
18Sections 2 (except the
definition of "retailer maintaining a 
19place of business in this State"), 3
through 3-80 (except 
20provisions pertaining to the State rate of tax,
and except 
21provisions concerning collection or refunding of the tax by

22retailers), 4, 11,
12, 12a, 14, 15, 19 (except the portions 
23pertaining to claims by retailers
and except the last 
24paragraph concerning refunds), 20, 21, and 22 of the Use
Tax 
25Act and Section 3-7 of the Uniform Penalty and Interest Act 
26that are
not inconsistent with this paragraph, as fully as if 
 
 
SB2196- 164 -LRB103 25662 HLH 52011 b


1those provisions were
set forth herein.

2 Whenever the Department determines that a refund should be 
3made under this
paragraph to a claimant instead of issuing a 
4credit memorandum, the Department
shall notify the State 
5Comptroller, who shall cause the order
to be drawn for the 
6amount specified, and to the person named, in the
notification 
7from the Department. The refund shall be paid by the State

8Treasurer out of a county water commission tax fund 
9established
under subsection (g) of this Section.

10 (e) A certificate of registration issued by the State 
11Department of
Revenue to a retailer under the Retailers' 
12Occupation Tax Act or under the
Service Occupation Tax Act 
13shall permit the registrant to engage in a
business that is 
14taxed under the tax imposed under subsection (b), (c),
or (d) 
15of this Section and no additional registration shall be 
16required under
the tax. A certificate issued under the Use Tax 
17Act or the Service Use Tax
Act shall be applicable with regard 
18to any tax imposed under subsection (c)
of this Section.

19 (f) Any ordinance imposing or discontinuing any tax under 
20this Section
shall be adopted and a certified copy thereof 
21filed with the Department on
or before June 1, whereupon the 
22Department of Revenue shall proceed to
administer and enforce 
23this Section on behalf of the county water
commission as of 
24September 1 next following the adoption and filing.
Beginning 
25January 1, 1992, an ordinance or resolution imposing or

26discontinuing the tax hereunder shall be adopted and a 
 
 
SB2196- 165 -LRB103 25662 HLH 52011 b


1certified copy
thereof filed with the Department on or before 
2the first day of July,
whereupon the Department shall proceed 
3to administer and enforce this
Section as of the first day of 
4October next following such adoption and
filing. Beginning 
5January 1, 1993, an ordinance or resolution imposing or

6discontinuing the tax hereunder shall be adopted and a 
7certified copy
thereof filed with the Department on or before 
8the first day of October,
whereupon the Department shall 
9proceed to administer and enforce this
Section as of the first 
10day of January next following such adoption and filing.

11 (g) The State Department of Revenue shall, upon collecting 
12any taxes as
provided in this Section, pay the taxes over to 
13the State Treasurer as
trustee for the commission. The taxes 
14shall be held in a trust fund outside
the State Treasury. 
15 As soon as possible after the first day of each month, 
16beginning January 1, 2011, upon certification of the 
17Department of Revenue, the Comptroller shall order 
18transferred, and the Treasurer shall transfer, to the STAR 
19Bonds Revenue Fund the local sales tax increment, as defined 
20in the Innovation Development and Economy Act, collected under 
21this Section during the second preceding calendar month for 
22sales within a STAR bond district.
23 After the monthly transfer to the STAR Bonds Revenue Fund, 
24on or before the 25th day of each calendar month, the
State 
25Department of Revenue shall prepare and certify to the 
26Comptroller of
the State of Illinois the amount to be paid to 
 
 
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1the commission, which shall be
the amount (not including 
2credit memoranda) collected under this Section during the 
3second preceding calendar month by the Department plus an 
4amount the Department determines is necessary to offset any 
5amounts that were erroneously paid to a different taxing body, 
6and not including any amount equal to the amount of refunds 
7made during the second preceding calendar month by the 
8Department on behalf of the commission, and not including any 
9amount that the Department determines is necessary to offset 
10any amounts that were payable to a different taxing body but 
11were erroneously paid to the commission, and less any amounts 
12that are transferred to the STAR Bonds Revenue Fund, less 1.5% 
13of the remainder, which shall be transferred into the Tax 
14Compliance and Administration Fund. The Department, at the 
15time of each monthly disbursement to the commission, shall 
16prepare and certify to the State Comptroller the amount to be 
17transferred into the Tax Compliance and Administration Fund 
18under this subsection. Within 10 days after receipt by
the 
19Comptroller of the certification of the amount to be paid to 
20the
commission and the Tax Compliance and Administration Fund, 
21the Comptroller shall cause an order to be drawn for the 
22payment
for the amount in accordance with the direction in the 
23certification.

24 (h) Beginning June 1, 2016, any tax imposed pursuant to 
25this Section may no longer be imposed or collected, unless a 
26continuation of the tax is approved by the voters at a 
 
 
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1referendum as set forth in this Section.
2 (i) Notwithstanding any other provision of law, no tax may 
3be imposed under this Section on the sale or use of cannabis, 
4as defined in Section 1-10 of the Cannabis Regulation and Tax 
5Act. 
6(Source: P.A. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18; 
7100-863, eff. 8-14-18; 100-1171, eff. 1-4-19; 101-10, eff. 
86-5-19; 101-81, eff. 7-12-19; 101-604, eff. 12-13-19.)


9 Section 35. The Cannabis Regulation and Tax Act is amended 
10by changing Sections 20-50, 60-10, and 65-10 as follows:

11 (410 ILCS 705/20-50)

12 Sec. 20-50. Cultivator taxes; returns. 
13 (a) A tax is imposed upon the privilege of cultivating and 
14processing adult use cannabis at the rate of 7% of the gross 
15receipts from the sale of cannabis by a cultivator to a 
16dispensing organization. The sale of any adult use product 
17that contains any amount of cannabis or any derivative thereof 
18is subject to the tax under this Section on the full selling 
19price of the product. The proceeds from this tax shall be 
20deposited into the Cannabis Regulation Fund. This tax shall be 
21paid by the cultivator who makes the first sale and is not the 
22responsibility of a dispensing organization, qualifying 
23patient, or purchaser.
24 (b) In the administration of and compliance with this 
 
 
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1Section, the Department of Revenue and persons who are subject 
2to this Section: (i) have the same rights, remedies, 
3privileges, immunities, powers, and duties, (ii) are subject 
4to the same conditions, restrictions, limitations, penalties, 
5and definitions of terms, and (iii) shall employ the same 
6modes of procedure as are set forth in the Cannabis 
7Cultivation Privilege Tax Law and the Uniform Penalty and 
8Interest Act as if those provisions were set forth in this 
9Section.
10 (c) The tax imposed under this Act shall be in addition to 
11all other occupation or privilege taxes imposed by the State 
12of Illinois or by any municipal corporation or political 
13subdivision thereof.


14 (d) Notwithstanding any other provision of law, no tax may 
15be imposed under this Section on the sale or use of cannabis, 
16as defined in Section 1-10 of the Cannabis Regulation and Tax 
17Act. 
18(Source: P.A. 101-27, eff. 6-25-19.)

19 (410 ILCS 705/60-10)

20 Sec. 60-10. Tax imposed. 
21 (a) Beginning September 1, 2019, a tax is imposed upon the 
22privilege of cultivating cannabis at the rate of 7% of the 
23gross receipts from the first sale of cannabis by a 
24cultivator. The sale of any product that contains any amount 
25of cannabis or any derivative thereof is subject to the tax 
 
 
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1under this Section on the full selling price of the product. 
2The Department may determine the selling price of the cannabis 
3when the seller and purchaser are affiliated persons, when the 
4sale and purchase of cannabis is not an arm's length 
5transaction, or when cannabis is transferred by a craft grower 
6to the craft grower's dispensing organization or infuser or 
7processing organization and a value is not established for the 
8cannabis. The value determined by the Department shall be 
9commensurate with the actual price received for products of 
10like quality, character, and use in the area. If there are no 
11sales of cannabis of like quality, character, and use in the 
12same area, then the Department shall establish a reasonable 
13value based on sales of products of like quality, character, 
14and use in other areas of the State, taking into consideration 
15any other relevant factors.
16 (b) The Cannabis Cultivation Privilege Tax imposed under 
17this Article is solely the responsibility of the cultivator 
18who makes the first sale and is not the responsibility of a 
19subsequent purchaser, a dispensing organization, or an 
20infuser. Persons subject to the tax imposed under this Article 
21may, however, reimburse themselves for their tax liability 
22hereunder by separately stating reimbursement for their tax 
23liability as an additional charge. 
24 (c) The tax imposed under this Article shall be in 
25addition to all other occupation, privilege, or excise taxes 
26imposed by the State of Illinois or by any unit of local 
 
 
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1government.

2 (d) Notwithstanding any other provision of law, no special 
3district may levy a tax upon the cultivation and processing of 
4adult use cannabis. 
5(Source: P.A. 101-27, eff. 6-25-19.)

6 (410 ILCS 705/65-10)

7 Sec. 65-10. Tax imposed. 
8 (a) Beginning January 1, 2020, a tax is imposed upon 
9purchasers for the privilege of using cannabis at the 
10following rates:
11  (1) Any cannabis, other than a cannabis-infused 
12 product, with an adjusted delta-9-tetrahydrocannabinol 
13 level at or below 35% shall be taxed at a rate of 10% of 
14 the purchase price; 
15  (2) Any cannabis, other than a cannabis-infused 
16 product, with an adjusted delta-9-tetrahydrocannabinol 
17 level above 35% shall be taxed at a rate of 25% of the 
18 purchase price; and 
19  (3) A cannabis-infused product shall be taxed at a 
20 rate of 20% of the purchase price.
21 (b) The purchase of any product that contains any amount 
22of cannabis or any derivative thereof is subject to the tax 
23under subsection (a) of this Section on the full purchase 
24price of the product.
25 (c) The tax imposed under this Section is not imposed on 
 
 
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1cannabis that is subject to tax under the Compassionate Use of 
2Medical Cannabis Program Act. The tax imposed by this Section 
3is not imposed with respect to any transaction in interstate 
4commerce, to the extent the transaction may not, under the 
5Constitution and statutes of the United States, be made the 
6subject of taxation by this State.
7 (d) The tax imposed under this Article shall be in 
8addition to all other occupation, privilege, or excise taxes 
9imposed by the State of Illinois or by any municipal 
10corporation or political subdivision thereof.
11 (e) The tax imposed under this Article shall not be 
12imposed on any purchase by a purchaser if the cannabis 
13retailer is prohibited by federal or State Constitution, 
14treaty, convention, statute, or court decision from collecting 
15the tax from the purchaser.

16 (f) Notwithstanding any other provision of law, no special 
17district may levy a tax upon purchasers for the use of 
18cannabis. 
19(Source: P.A. 101-27, eff. 6-25-19; 101-593, eff. 12-4-19.)


20 Section 99. Effective date. This Act takes effect upon 
21becoming law.