Bill Text: IL SB2358 | 2021-2022 | 102nd General Assembly | Introduced


Bill Title: Amends the Illinois Income Tax Act. Provides that, when calculating the taxpayer's base income, the taxpayer's federal adjusted gross income shall be modified to exclude the portion of the income or loss received from a trade or business conducted within and without Illinois or from a pass-through entity conducting business within and without Illinois that is not derived from or connected with Illinois sources. Repeals provisions concerning a credit for foreign taxes. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2022-04-30 - Chief Sponsor Changed to Sen. Don Harmon [SB2358 Detail]

Download: Illinois-2021-SB2358-Introduced.html


102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB2358

Introduced 2/26/2021, by Sen. John Connor

SYNOPSIS AS INTRODUCED:
35 ILCS 5/203 from Ch. 120, par. 2-203
35 ILCS 5/601 from Ch. 120, par. 6-601

Amends the Illinois Income Tax Act. Provides that, when calculating the taxpayer's base income, the taxpayer's federal adjusted gross income shall be modified to exclude the portion of the income or loss received from a trade or business conducted within and without Illinois or from a pass-through entity conducting business within and without Illinois that is not derived from or connected with Illinois sources. Repeals provisions concerning a credit for foreign taxes. Effective immediately.
LRB102 10763 HLH 16092 b

A BILL FOR

SB2358LRB102 10763 HLH 16092 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 Sections 203 and 601 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

SB2358- 2 -LRB102 10763 HLH 16092 b
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

SB2358- 3 -LRB102 10763 HLH 16092 b
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 the
22 taxpayer may claim a depreciation deduction for
23 federal income tax purposes and for which the taxpayer
24 was allowed in any taxable year to make a subtraction
25 modification under subparagraph (Z), then an amount
26 equal to that subtraction modification.

SB2358- 4 -LRB102 10763 HLH 16092 b
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

SB2358- 5 -LRB102 10763 HLH 16092 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

SB2358- 6 -LRB102 10763 HLH 16092 b
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

SB2358- 7 -LRB102 10763 HLH 16092 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

SB2358- 8 -LRB102 10763 HLH 16092 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

SB2358- 9 -LRB102 10763 HLH 16092 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

SB2358- 10 -LRB102 10763 HLH 16092 b
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

SB2358- 11 -LRB102 10763 HLH 16092 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

SB2358- 12 -LRB102 10763 HLH 16092 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

SB2358- 13 -LRB102 10763 HLH 16092 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

SB2358- 14 -LRB102 10763 HLH 16092 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

SB2358- 15 -LRB102 10763 HLH 16092 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 and by deducting from the total so obtained the sum of the
9 following amounts:
10 (E) For taxable years ending before December 31,
11 2001, any amount included in such total in respect of
12 any compensation (including but not limited to any
13 compensation paid or accrued to a serviceman while a
14 prisoner of war or missing in action) paid to a
15 resident by reason of being on active duty in the Armed
16 Forces of the United States and in respect of any
17 compensation paid or accrued to a resident who as a
18 governmental employee was a prisoner of war or missing
19 in action, and in respect of any compensation paid to a
20 resident in 1971 or thereafter for annual training
21 performed pursuant to Sections 502 and 503, Title 32,
22 United States Code as a member of the Illinois
23 National Guard or, beginning with taxable years ending
24 on or after December 31, 2007, the National Guard of
25 any other state. For taxable years ending on or after
26 December 31, 2001, any amount included in such total

SB2358- 16 -LRB102 10763 HLH 16092 b
1 in respect of any compensation (including but not
2 limited to any compensation paid or accrued to a
3 serviceman while a prisoner of war or missing in
4 action) paid to a resident by reason of being a member
5 of any component of the Armed Forces of the United
6 States and in respect of any compensation paid or
7 accrued to a resident who as a governmental employee
8 was a prisoner of war or missing in action, and in
9 respect of any compensation paid to a resident in 2001
10 or thereafter by reason of being a member of the
11 Illinois National Guard or, beginning with taxable
12 years ending on or after December 31, 2007, the
13 National Guard of any other state. The provisions of
14 this subparagraph (E) are exempt from the provisions
15 of Section 250;
16 (F) An amount equal to all amounts included in
17 such total pursuant to the provisions of Sections
18 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
19 408 of the Internal Revenue Code, or included in such
20 total as distributions under the provisions of any
21 retirement or disability plan for employees of any
22 governmental agency or unit, or retirement payments to
23 retired partners, which payments are excluded in
24 computing net earnings from self employment by Section
25 1402 of the Internal Revenue Code and regulations
26 adopted pursuant thereto;

SB2358- 17 -LRB102 10763 HLH 16092 b
1 (G) The valuation limitation amount;
2 (H) An amount equal to the amount of any tax
3 imposed by this Act which was refunded to the taxpayer
4 and included in such total for the taxable year;
5 (I) An amount equal to all amounts included in
6 such total pursuant to the provisions of Section 111
7 of the Internal Revenue Code as a recovery of items
8 previously deducted from adjusted gross income in the
9 computation of taxable income;
10 (J) An amount equal to those dividends included in
11 such total which were paid by a corporation which
12 conducts business operations in a River Edge
13 Redevelopment Zone or zones created under the River
14 Edge Redevelopment Zone Act, and conducts
15 substantially all of its operations in a River Edge
16 Redevelopment Zone or zones. This subparagraph (J) is
17 exempt from the provisions of Section 250;
18 (K) An amount equal to those dividends included in
19 such total that were paid by a corporation that
20 conducts business operations in a federally designated
21 Foreign Trade Zone or Sub-Zone and that is designated
22 a High Impact Business located in Illinois; provided
23 that dividends eligible for the deduction provided in
24 subparagraph (J) of paragraph (2) of this subsection
25 shall not be eligible for the deduction provided under
26 this subparagraph (K);

SB2358- 18 -LRB102 10763 HLH 16092 b
1 (L) For taxable years ending after December 31,
2 1983, an amount equal to all social security benefits
3 and railroad retirement benefits included in such
4 total pursuant to Sections 72(r) and 86 of the
5 Internal Revenue Code;
6 (M) With the exception of any amounts subtracted
7 under subparagraph (N), an amount equal to the sum of
8 all amounts disallowed as deductions by (i) Sections
9 171(a)(2), and 265(a)(2) of the Internal Revenue Code,
10 and all amounts of expenses allocable to interest and
11 disallowed as deductions by Section 265(a)(1) of the
12 Internal Revenue Code; and (ii) for taxable years
13 ending on or after August 13, 1999, Sections
14 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
15 Internal Revenue Code, plus, for taxable years ending
16 on or after December 31, 2011, Section 45G(e)(3) of
17 the Internal Revenue Code and, for taxable years
18 ending on or after December 31, 2008, any amount
19 included in gross income under Section 87 of the
20 Internal Revenue Code; the provisions of this
21 subparagraph are exempt from the provisions of Section
22 250;
23 (N) An amount equal to all amounts included in
24 such total which are exempt from taxation by this
25 State either by reason of its statutes or Constitution
26 or by reason of the Constitution, treaties or statutes

SB2358- 19 -LRB102 10763 HLH 16092 b
1 of the United States; provided that, in the case of any
2 statute of this State that exempts income derived from
3 bonds or other obligations from the tax imposed under
4 this Act, the amount exempted shall be the interest
5 net of bond premium amortization;
6 (O) An amount equal to any contribution made to a
7 job training project established pursuant to the Tax
8 Increment Allocation Redevelopment Act;
9 (P) An amount equal to the amount of the deduction
10 used to compute the federal income tax credit for
11 restoration of substantial amounts held under claim of
12 right for the taxable year pursuant to Section 1341 of
13 the Internal Revenue Code or of any itemized deduction
14 taken from adjusted gross income in the computation of
15 taxable income for restoration of substantial amounts
16 held under claim of right for the taxable year;
17 (Q) An amount equal to any amounts included in
18 such total, received by the taxpayer as an
19 acceleration in the payment of life, endowment or
20 annuity benefits in advance of the time they would
21 otherwise be payable as an indemnity for a terminal
22 illness;
23 (R) An amount equal to the amount of any federal or
24 State bonus paid to veterans of the Persian Gulf War;
25 (S) An amount, to the extent included in adjusted
26 gross income, equal to the amount of a contribution

SB2358- 20 -LRB102 10763 HLH 16092 b
1 made in the taxable year on behalf of the taxpayer to a
2 medical care savings account established under the
3 Medical Care Savings Account Act or the Medical Care
4 Savings Account Act of 2000 to the extent the
5 contribution is accepted by the account administrator
6 as provided in that Act;
7 (T) An amount, to the extent included in adjusted
8 gross income, equal to the amount of interest earned
9 in the taxable year on a medical care savings account
10 established under the Medical Care Savings Account Act
11 or the Medical Care Savings Account Act of 2000 on
12 behalf of the taxpayer, other than interest added
13 pursuant to item (D-5) of this paragraph (2);
14 (U) For one taxable year beginning on or after
15 January 1, 1994, an amount equal to the total amount of
16 tax imposed and paid under subsections (a) and (b) of
17 Section 201 of this Act on grant amounts received by
18 the taxpayer under the Nursing Home Grant Assistance
19 Act during the taxpayer's taxable years 1992 and 1993;
20 (V) Beginning with tax years ending on or after
21 December 31, 1995 and ending with tax years ending on
22 or before December 31, 2004, an amount equal to the
23 amount paid by a taxpayer who is a self-employed
24 taxpayer, a partner of a partnership, or a shareholder
25 in a Subchapter S corporation for health insurance or
26 long-term care insurance for that taxpayer or that

SB2358- 21 -LRB102 10763 HLH 16092 b
1 taxpayer's spouse or dependents, to the extent that
2 the amount paid for that health insurance or long-term
3 care insurance may be deducted under Section 213 of
4 the Internal Revenue Code, has not been deducted on
5 the federal income tax return of the taxpayer, and
6 does not exceed the taxable income attributable to
7 that taxpayer's income, self-employment income, or
8 Subchapter S corporation income; except that no
9 deduction shall be allowed under this item (V) if the
10 taxpayer is eligible to participate in any health
11 insurance or long-term care insurance plan of an
12 employer of the taxpayer or the taxpayer's spouse. The
13 amount of the health insurance and long-term care
14 insurance subtracted under this item (V) shall be
15 determined by multiplying total health insurance and
16 long-term care insurance premiums paid by the taxpayer
17 times a number that represents the fractional
18 percentage of eligible medical expenses under Section
19 213 of the Internal Revenue Code of 1986 not actually
20 deducted on the taxpayer's federal income tax return;
21 (W) For taxable years beginning on or after
22 January 1, 1998, all amounts included in the
23 taxpayer's federal gross income in the taxable year
24 from amounts converted from a regular IRA to a Roth
25 IRA. This paragraph is exempt from the provisions of
26 Section 250;

SB2358- 22 -LRB102 10763 HLH 16092 b
1 (X) For taxable year 1999 and thereafter, an
2 amount equal to the amount of any (i) distributions,
3 to the extent includible in gross income for federal
4 income tax purposes, made to the taxpayer because of
5 his or her status as a victim of persecution for racial
6 or religious reasons by Nazi Germany or any other Axis
7 regime or as an heir of the victim and (ii) items of
8 income, to the extent includible in gross income for
9 federal income tax purposes, attributable to, derived
10 from or in any way related to assets stolen from,
11 hidden from, or otherwise lost to a victim of
12 persecution for racial or religious reasons by Nazi
13 Germany or any other Axis regime immediately prior to,
14 during, and immediately after World War II, including,
15 but not limited to, interest on the proceeds
16 receivable as insurance under policies issued to a
17 victim of persecution for racial or religious reasons
18 by Nazi Germany or any other Axis regime by European
19 insurance companies immediately prior to and during
20 World War II; provided, however, this subtraction from
21 federal adjusted gross income does not apply to assets
22 acquired with such assets or with the proceeds from
23 the sale of such assets; provided, further, this
24 paragraph shall only apply to a taxpayer who was the
25 first recipient of such assets after their recovery
26 and who is a victim of persecution for racial or

SB2358- 23 -LRB102 10763 HLH 16092 b
1 religious reasons by Nazi Germany or any other Axis
2 regime or as an heir of the victim. The amount of and
3 the eligibility for any public assistance, benefit, or
4 similar entitlement is not affected by the inclusion
5 of items (i) and (ii) of this paragraph in gross income
6 for federal income tax purposes. This paragraph is
7 exempt from the provisions of Section 250;
8 (Y) For taxable years beginning on or after
9 January 1, 2002 and ending on or before December 31,
10 2004, moneys contributed in the taxable year to a
11 College Savings Pool account under Section 16.5 of the
12 State Treasurer Act, except that amounts excluded from
13 gross income under Section 529(c)(3)(C)(i) of the
14 Internal Revenue Code shall not be considered moneys
15 contributed under this subparagraph (Y). For taxable
16 years beginning on or after January 1, 2005, a maximum
17 of $10,000 contributed in the taxable year to (i) a
18 College Savings Pool account under Section 16.5 of the
19 State Treasurer Act or (ii) the Illinois Prepaid
20 Tuition Trust Fund, except that amounts excluded from
21 gross income under Section 529(c)(3)(C)(i) of the
22 Internal Revenue Code shall not be considered moneys
23 contributed under this subparagraph (Y). For purposes
24 of this subparagraph, contributions made by an
25 employer on behalf of an employee, or matching
26 contributions made by an employee, shall be treated as

SB2358- 24 -LRB102 10763 HLH 16092 b
1 made by the employee. This subparagraph (Y) is exempt
2 from the provisions of Section 250;
3 (Z) For taxable years 2001 and thereafter, for the
4 taxable year in which the bonus depreciation deduction
5 is taken on the taxpayer's federal income tax return
6 under subsection (k) of Section 168 of the Internal
7 Revenue Code and for each applicable taxable year
8 thereafter, an amount equal to "x", where:
9 (1) "y" equals the amount of the depreciation
10 deduction taken for the taxable year on the
11 taxpayer's federal income tax return on property
12 for which the bonus depreciation deduction was
13 taken in any year under subsection (k) of Section
14 168 of the Internal Revenue Code, but not
15 including the bonus depreciation deduction;
16 (2) for taxable years ending on or before
17 December 31, 2005, "x" equals "y" multiplied by 30
18 and then divided by 70 (or "y" multiplied by
19 0.429); and
20 (3) for taxable years ending after December
21 31, 2005:
22 (i) for property on which a bonus
23 depreciation deduction of 30% of the adjusted
24 basis was taken, "x" equals "y" multiplied by
25 30 and then divided by 70 (or "y" multiplied
26 by 0.429); and

SB2358- 25 -LRB102 10763 HLH 16092 b
1 (ii) for property on which a bonus
2 depreciation deduction of 50% of the adjusted
3 basis was taken, "x" equals "y" multiplied by
4 1.0.
5 The aggregate amount deducted under this
6 subparagraph in all taxable years for any one piece of
7 property may not exceed the amount of the bonus
8 depreciation deduction taken on that property on the
9 taxpayer's federal income tax return under subsection
10 (k) of Section 168 of the Internal Revenue Code. This
11 subparagraph (Z) is exempt from the provisions of
12 Section 250;
13 (AA) If the taxpayer sells, transfers, abandons,
14 or otherwise disposes of property for which the
15 taxpayer was required in any taxable year to make an
16 addition modification under subparagraph (D-15), then
17 an amount equal to that addition modification.
18 If the taxpayer continues to own property through
19 the last day of the last tax year for which the
20 taxpayer may claim a depreciation deduction for
21 federal income tax purposes and for which the taxpayer
22 was required in any taxable year to make an addition
23 modification under subparagraph (D-15), then an amount
24 equal to that addition modification.
25 The taxpayer is allowed to take the deduction
26 under this subparagraph only once with respect to any

SB2358- 26 -LRB102 10763 HLH 16092 b
1 one piece of property.
2 This subparagraph (AA) is exempt from the
3 provisions of Section 250;
4 (BB) Any amount included in adjusted gross income,
5 other than salary, received by a driver in a
6 ridesharing arrangement using a motor vehicle;
7 (CC) The amount of (i) any interest income (net of
8 the deductions allocable thereto) taken into account
9 for the taxable year with respect to a transaction
10 with a taxpayer that is required to make an addition
11 modification with respect to such transaction under
12 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
13 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
14 the amount of that addition modification, and (ii) any
15 income from intangible property (net of the deductions
16 allocable thereto) taken into account for the taxable
17 year with respect to a transaction with a taxpayer
18 that is required to make an addition modification with
19 respect to such transaction under Section
20 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
21 203(d)(2)(D-8), but not to exceed the amount of that
22 addition modification. This subparagraph (CC) is
23 exempt from the provisions of Section 250;
24 (DD) An amount equal to the interest income taken
25 into account for the taxable year (net of the
26 deductions allocable thereto) with respect to

SB2358- 27 -LRB102 10763 HLH 16092 b
1 transactions with (i) a foreign person who would be a
2 member of the taxpayer's unitary business group but
3 for the fact that the foreign person's business
4 activity outside the United States is 80% or more of
5 that person's total business activity and (ii) for
6 taxable years ending on or after December 31, 2008, 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, but
13 not to exceed the addition modification required to be
14 made for the same taxable year under Section
15 203(a)(2)(D-17) for interest paid, accrued, or
16 incurred, directly or indirectly, to the same person.
17 This subparagraph (DD) is exempt from the provisions
18 of Section 250;
19 (EE) An amount equal to the income from intangible
20 property taken into account for the taxable year (net
21 of the deductions allocable thereto) with respect to
22 transactions with (i) a foreign person who would be a
23 member of the taxpayer's unitary business group but
24 for the fact that the foreign person's business
25 activity outside the United States is 80% or more of
26 that person's total business activity and (ii) for

SB2358- 28 -LRB102 10763 HLH 16092 b
1 taxable years ending on or after December 31, 2008, to
2 a person who would be a member of the same unitary
3 business group but for the fact that the person is
4 prohibited under Section 1501(a)(27) from being
5 included in the unitary business group because he or
6 she is ordinarily required to apportion business
7 income under different subsections of Section 304, but
8 not to exceed the addition modification required to be
9 made for the same taxable year under Section
10 203(a)(2)(D-18) for intangible expenses and costs
11 paid, accrued, or incurred, directly or indirectly, to
12 the same foreign person. This subparagraph (EE) is
13 exempt from the provisions of Section 250;
14 (FF) An amount equal to any amount awarded to the
15 taxpayer during the taxable year by the Court of
16 Claims under subsection (c) of Section 8 of the Court
17 of Claims Act for time unjustly served in a State
18 prison. This subparagraph (FF) is exempt from the
19 provisions of Section 250;
20 (GG) For taxable years ending on or after December
21 31, 2011, in the case of a taxpayer who was required to
22 add back any insurance premiums under Section
23 203(a)(2)(D-19), such taxpayer may elect to subtract
24 that part of a reimbursement received from the
25 insurance company equal to the amount of the expense
26 or loss (including expenses incurred by the insurance

SB2358- 29 -LRB102 10763 HLH 16092 b
1 company) that would have been taken into account as a
2 deduction for federal income tax purposes if the
3 expense or loss had been uninsured. If a taxpayer
4 makes the election provided for by this subparagraph
5 (GG), the insurer to which the premiums were paid must
6 add back to income the amount subtracted by the
7 taxpayer pursuant to this subparagraph (GG). This
8 subparagraph (GG) is exempt from the provisions of
9 Section 250; and
10 (HH) For taxable years beginning on or after
11 January 1, 2018 and prior to January 1, 2023, a maximum
12 of $10,000 contributed in the taxable year to a
13 qualified ABLE account under Section 16.6 of the State
14 Treasurer Act, except that amounts excluded from gross
15 income under Section 529(c)(3)(C)(i) or Section
16 529A(c)(1)(C) of the Internal Revenue Code shall not
17 be considered moneys contributed under this
18 subparagraph (HH). For purposes of this subparagraph
19 (HH), contributions made by an employer on behalf of
20 an employee, or matching contributions made by an
21 employee, shall be treated as made by the employee.
22 (b) Corporations.
23 (1) In general. In the case of a corporation, base
24 income means an amount equal to the taxpayer's taxable
25 income for the taxable year as modified by paragraph (2).

SB2358- 30 -LRB102 10763 HLH 16092 b
1 (2) Modifications. The taxable income referred to in
2 paragraph (1) shall be modified by adding thereto the sum
3 of the following amounts:
4 (A) An amount equal to all amounts paid or accrued
5 to the taxpayer as interest and all distributions
6 received from regulated investment companies during
7 the taxable year to the extent excluded from gross
8 income 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 in
11 the computation of taxable income for the taxable
12 year;
13 (C) In the case of a regulated investment company,
14 an amount equal to the excess of (i) the net long-term
15 capital gain for the taxable year, over (ii) the
16 amount of the capital gain dividends designated as
17 such in accordance with Section 852(b)(3)(C) of the
18 Internal Revenue Code and any amount designated under
19 Section 852(b)(3)(D) of the Internal Revenue Code,
20 attributable to the taxable year (this amendatory Act
21 of 1995 (Public Act 89-89) is declarative of existing
22 law and is not a new enactment);
23 (D) The amount of any net operating loss deduction
24 taken in arriving at taxable income, other than a net
25 operating loss carried forward from a taxable year
26 ending prior to December 31, 1986;

SB2358- 31 -LRB102 10763 HLH 16092 b
1 (E) For taxable years in which a net operating
2 loss carryback or carryforward from a taxable year
3 ending prior to December 31, 1986 is an element of
4 taxable income under paragraph (1) of subsection (e)
5 or subparagraph (E) of paragraph (2) of subsection
6 (e), the amount by which addition modifications other
7 than those provided by this subparagraph (E) exceeded
8 subtraction modifications in such earlier taxable
9 year, with the following limitations applied in the
10 order that they are listed:
11 (i) the addition modification relating to the
12 net operating loss carried back or forward to the
13 taxable year from any taxable year ending prior to
14 December 31, 1986 shall be reduced by the amount
15 of addition modification under this subparagraph
16 (E) which related to that net operating loss and
17 which was taken into account in calculating the
18 base income of an earlier taxable year, and
19 (ii) the addition modification relating to the
20 net operating loss carried back or forward to the
21 taxable year from any taxable year ending prior to
22 December 31, 1986 shall not exceed the amount of
23 such carryback or carryforward;
24 For taxable years in which there is a net
25 operating loss carryback or carryforward from more
26 than one other taxable year ending prior to December

SB2358- 32 -LRB102 10763 HLH 16092 b
1 31, 1986, the addition modification provided in this
2 subparagraph (E) shall be the sum of the amounts
3 computed independently under the preceding provisions
4 of this subparagraph (E) for each such taxable year;
5 (E-5) For taxable years ending after December 31,
6 1997, an amount equal to any eligible remediation
7 costs that the corporation deducted in computing
8 adjusted gross income and for which the corporation
9 claims a credit under subsection (l) of Section 201;
10 (E-10) For taxable years 2001 and thereafter, an
11 amount equal to the bonus depreciation deduction taken
12 on the taxpayer's federal income tax return for the
13 taxable year under subsection (k) of Section 168 of
14 the Internal Revenue Code;
15 (E-11) If the taxpayer sells, transfers, abandons,
16 or otherwise disposes of property for which the
17 taxpayer was required in any taxable year to make an
18 addition modification under subparagraph (E-10), then
19 an amount equal to the aggregate amount of the
20 deductions taken in all taxable years under
21 subparagraph (T) with respect to that property.
22 If the taxpayer continues to own property through
23 the last day of the last tax year for which the
24 taxpayer may claim a depreciation deduction for
25 federal income tax purposes and for which the taxpayer
26 was allowed in any taxable year to make a subtraction

SB2358- 33 -LRB102 10763 HLH 16092 b
1 modification under subparagraph (T), then an amount
2 equal to that subtraction modification.
3 The taxpayer is required to make the addition
4 modification under this subparagraph only once with
5 respect to any one piece of property;
6 (E-12) An amount equal to the amount otherwise
7 allowed as a deduction in computing base income for
8 interest paid, accrued, or incurred, directly or
9 indirectly, (i) for taxable years ending on or after
10 December 31, 2004, to a foreign person who would be a
11 member of the same unitary business group but for the
12 fact the foreign person's business activity outside
13 the United States is 80% or more of the foreign
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. The addition modification
22 required by this subparagraph shall be reduced to the
23 extent that dividends were included in base income of
24 the unitary group for the same taxable year and
25 received by the taxpayer or by a member of the
26 taxpayer's unitary business group (including amounts

SB2358- 34 -LRB102 10763 HLH 16092 b
1 included in gross income pursuant to Sections 951
2 through 964 of the Internal Revenue Code and amounts
3 included in gross income under Section 78 of the
4 Internal Revenue Code) with respect to the stock of
5 the same person to whom the interest was paid,
6 accrued, or incurred.
7 This paragraph shall not apply to the following:
8 (i) an item of interest paid, accrued, or
9 incurred, directly or indirectly, to a person who
10 is subject in a foreign country or state, other
11 than a state which requires mandatory unitary
12 reporting, to a tax on or measured by net income
13 with respect to such interest; or
14 (ii) an item of interest paid, accrued, or
15 incurred, directly or indirectly, to a person if
16 the taxpayer can establish, based on a
17 preponderance of the evidence, both of the
18 following:
19 (a) the person, during the same taxable
20 year, paid, accrued, or incurred, the interest
21 to a person that is not a related member, and
22 (b) the transaction giving rise to the
23 interest expense between the taxpayer and the
24 person did not have as a principal purpose the
25 avoidance of Illinois income tax, and is paid
26 pursuant to a contract or agreement that

SB2358- 35 -LRB102 10763 HLH 16092 b
1 reflects an arm's-length interest rate and
2 terms; or
3 (iii) the taxpayer can establish, based on
4 clear and convincing evidence, that the interest
5 paid, accrued, or incurred relates to a contract
6 or agreement entered into at arm's-length rates
7 and terms and the principal purpose for the
8 payment is not federal or Illinois tax avoidance;
9 or
10 (iv) an item of interest paid, accrued, or
11 incurred, directly or indirectly, to a person if
12 the taxpayer establishes by clear and convincing
13 evidence that the adjustments are unreasonable; or
14 if the taxpayer and the Director agree in writing
15 to the application or use of an alternative method
16 of apportionment under Section 304(f).
17 Nothing in this subsection shall preclude the
18 Director from making any other adjustment
19 otherwise allowed under Section 404 of this Act
20 for any tax year beginning after the effective
21 date of this amendment provided such adjustment is
22 made pursuant to regulation adopted by the
23 Department and such regulations provide methods
24 and standards by which the Department will utilize
25 its authority under Section 404 of this Act;
26 (E-13) An amount equal to the amount of intangible

SB2358- 36 -LRB102 10763 HLH 16092 b
1 expenses and costs otherwise allowed as a deduction in
2 computing base income, and that were paid, accrued, or
3 incurred, directly or indirectly, (i) for taxable
4 years ending on or after December 31, 2004, to a
5 foreign person who would be a member of the same
6 unitary business group but for the fact that the
7 foreign person's business activity outside the United
8 States is 80% or more of that person's total business
9 activity and (ii) for taxable years ending on or after
10 December 31, 2008, to a person who would be a member of
11 the same unitary business group but for the fact that
12 the person is prohibited under Section 1501(a)(27)
13 from being included in the unitary business group
14 because he or she is ordinarily required to apportion
15 business income under different subsections of Section
16 304. The addition modification required by this
17 subparagraph shall be reduced to the extent that
18 dividends were included in base income of the unitary
19 group for the same taxable year and received by the
20 taxpayer or by a member of the taxpayer's unitary
21 business group (including amounts included in gross
22 income pursuant to Sections 951 through 964 of the
23 Internal Revenue Code and amounts included in gross
24 income under Section 78 of the Internal Revenue Code)
25 with respect to the stock of the same person to whom
26 the intangible expenses and costs were directly or

SB2358- 37 -LRB102 10763 HLH 16092 b
1 indirectly paid, incurred, or accrued. The preceding
2 sentence shall not apply to the extent that the same
3 dividends caused a reduction to the addition
4 modification required under Section 203(b)(2)(E-12) of
5 this Act. As used in this subparagraph, the term
6 "intangible expenses and costs" includes (1) expenses,
7 losses, and costs for, or related to, the direct or
8 indirect acquisition, use, maintenance or management,
9 ownership, sale, exchange, or any other disposition of
10 intangible property; (2) losses incurred, directly or
11 indirectly, from factoring transactions or discounting
12 transactions; (3) royalty, patent, technical, and
13 copyright fees; (4) licensing fees; and (5) other
14 similar expenses and costs. For purposes of this
15 subparagraph, "intangible property" includes patents,
16 patent applications, trade names, trademarks, service
17 marks, copyrights, mask works, trade secrets, and
18 similar types of intangible assets.
19 This paragraph shall not apply to the following:
20 (i) any item of intangible expenses or costs
21 paid, accrued, or incurred, directly or
22 indirectly, from a transaction with a person who
23 is subject in a foreign country or state, other
24 than a state which requires mandatory unitary
25 reporting, to a tax on or measured by net income
26 with respect to such item; or

SB2358- 38 -LRB102 10763 HLH 16092 b
1 (ii) any item of intangible expense or cost
2 paid, accrued, or incurred, directly or
3 indirectly, if the taxpayer can establish, based
4 on a preponderance of the evidence, both of the
5 following:
6 (a) the person during the same taxable
7 year paid, accrued, or incurred, the
8 intangible expense or cost to a person that is
9 not a related member, and
10 (b) the transaction giving rise to the
11 intangible expense or cost between the
12 taxpayer and the person did not have as a
13 principal purpose the avoidance of Illinois
14 income tax, and is paid pursuant to a contract
15 or agreement that reflects arm's-length terms;
16 or
17 (iii) any item of intangible expense or cost
18 paid, accrued, or incurred, directly or
19 indirectly, from a transaction with a person if
20 the taxpayer establishes by clear and convincing
21 evidence, that the adjustments are unreasonable;
22 or if the taxpayer and the Director agree in
23 writing to the application or use of an
24 alternative method of apportionment under Section
25 304(f);
26 Nothing in this subsection shall preclude the

SB2358- 39 -LRB102 10763 HLH 16092 b
1 Director from making any other adjustment
2 otherwise allowed under Section 404 of this Act
3 for any tax year beginning after the effective
4 date of this amendment provided such adjustment is
5 made pursuant to regulation adopted by the
6 Department and such regulations provide methods
7 and standards by which the Department will utilize
8 its authority under Section 404 of this Act;
9 (E-14) For taxable years ending on or after
10 December 31, 2008, an amount equal to the amount of
11 insurance premium expenses and costs otherwise allowed
12 as a deduction in computing base income, and that were
13 paid, accrued, or incurred, directly or indirectly, to
14 a person who would be a member of the same unitary
15 business group but for the fact that the person is
16 prohibited under Section 1501(a)(27) from being
17 included in the unitary business group because he or
18 she is ordinarily required to apportion business
19 income under different subsections of Section 304. The
20 addition modification required by this subparagraph
21 shall be reduced to the extent that dividends were
22 included in base income of the unitary group for the
23 same taxable year and received by the taxpayer or by a
24 member of the taxpayer's unitary business group
25 (including amounts included in gross income under
26 Sections 951 through 964 of the Internal Revenue Code

SB2358- 40 -LRB102 10763 HLH 16092 b
1 and amounts included in gross income under Section 78
2 of the Internal Revenue Code) with respect to the
3 stock of the same person to whom the premiums and costs
4 were directly or indirectly paid, incurred, or
5 accrued. The preceding sentence does not apply to the
6 extent that the same dividends caused a reduction to
7 the addition modification required under Section
8 203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this
9 Act;
10 (E-15) For taxable years beginning after December
11 31, 2008, any deduction for dividends paid by a
12 captive real estate investment trust that is allowed
13 to a real estate investment trust under Section
14 857(b)(2)(B) of the Internal Revenue Code for
15 dividends paid;
16 (E-16) An amount equal to the credit allowable to
17 the taxpayer under Section 218(a) of this Act,
18 determined without regard to Section 218(c) of this
19 Act;
20 (E-17) For taxable years ending on or after
21 December 31, 2017, an amount equal to the deduction
22 allowed under Section 199 of the Internal Revenue Code
23 for the taxable year;
24 (E-18) for taxable years beginning after December
25 31, 2018, an amount equal to the deduction allowed
26 under Section 250(a)(1)(A) of the Internal Revenue

SB2358- 41 -LRB102 10763 HLH 16092 b
1 Code for the taxable year.
2 and by deducting from the total so obtained the sum of the
3 following amounts:
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 any amount included in such
8 total under Section 78 of the Internal Revenue Code;
9 (H) In the case of a regulated investment company,
10 an amount equal to the amount of exempt interest
11 dividends as defined in subsection (b)(5) of Section
12 852 of the Internal Revenue Code, paid to shareholders
13 for the taxable year;
14 (I) With the exception of any amounts subtracted
15 under subparagraph (J), an amount equal to the sum of
16 all amounts disallowed as deductions by (i) Sections
17 171(a)(2), and 265(a)(2) and amounts disallowed as
18 interest expense by Section 291(a)(3) of the Internal
19 Revenue Code, and all amounts of expenses allocable to
20 interest and disallowed as deductions by Section
21 265(a)(1) of the Internal Revenue Code; and (ii) for
22 taxable years ending on or after August 13, 1999,
23 Sections 171(a)(2), 265, 280C, 291(a)(3), and
24 832(b)(5)(B)(i) of the Internal Revenue Code, plus,
25 for tax years ending on or after December 31, 2011,
26 amounts disallowed as deductions by Section 45G(e)(3)

SB2358- 42 -LRB102 10763 HLH 16092 b
1 of the Internal Revenue Code and, for taxable years
2 ending on or after December 31, 2008, any amount
3 included in gross income under Section 87 of the
4 Internal Revenue Code and the policyholders' share of
5 tax-exempt interest of a life insurance company under
6 Section 807(a)(2)(B) of the Internal Revenue Code (in
7 the case of a life insurance company with gross income
8 from a decrease in reserves for the tax year) or
9 Section 807(b)(1)(B) of the Internal Revenue Code (in
10 the case of a life insurance company allowed a
11 deduction for an increase in reserves for the tax
12 year); the provisions of this subparagraph are exempt
13 from the provisions of Section 250;
14 (J) An amount equal to all amounts included in
15 such total which are exempt from taxation by this
16 State either by reason of its statutes or Constitution
17 or by reason of the Constitution, treaties or statutes
18 of the United States; provided that, in the case of any
19 statute of this State that exempts income derived from
20 bonds or other obligations from the tax imposed under
21 this Act, the amount exempted shall be the interest
22 net of bond premium amortization;
23 (K) An amount equal to those dividends included in
24 such total which were paid by a corporation which
25 conducts business operations in a River Edge
26 Redevelopment Zone or zones created under the River

SB2358- 43 -LRB102 10763 HLH 16092 b
1 Edge Redevelopment Zone Act and conducts substantially
2 all of its operations in a River Edge Redevelopment
3 Zone or zones. This subparagraph (K) is exempt from
4 the provisions of Section 250;
5 (L) An amount equal to those dividends included in
6 such total that were paid by a corporation that
7 conducts business operations in a federally designated
8 Foreign Trade Zone or Sub-Zone and that is designated
9 a High Impact Business located in Illinois; provided
10 that dividends eligible for the deduction provided in
11 subparagraph (K) of paragraph 2 of this subsection
12 shall not be eligible for the deduction provided under
13 this subparagraph (L);
14 (M) For any taxpayer that is a financial
15 organization within the meaning of Section 304(c) of
16 this Act, an amount included in such total as interest
17 income from a loan or loans made by such taxpayer to a
18 borrower, to the extent that such a loan is secured by
19 property which is eligible for the River Edge
20 Redevelopment Zone Investment Credit. To determine the
21 portion of a loan or loans that is secured by property
22 eligible for a Section 201(f) investment credit to the
23 borrower, the entire principal amount of the loan or
24 loans between the taxpayer and the borrower should be
25 divided into the basis of the Section 201(f)
26 investment credit property which secures the loan or

SB2358- 44 -LRB102 10763 HLH 16092 b
1 loans, using for this purpose the original basis of
2 such property on the date that it was placed in service
3 in the River Edge Redevelopment Zone. The subtraction
4 modification available to the taxpayer in any year
5 under this subsection shall be that portion of the
6 total interest paid by the borrower with respect to
7 such loan attributable to the eligible property as
8 calculated under the previous sentence. This
9 subparagraph (M) is exempt from the provisions of
10 Section 250;
11 (M-1) For any taxpayer that is a financial
12 organization within the meaning of Section 304(c) of
13 this Act, an amount included in such total as interest
14 income from a loan or loans made by such taxpayer to a
15 borrower, to the extent that such a loan is secured by
16 property which is eligible for the High Impact
17 Business Investment Credit. To determine the portion
18 of a loan or loans that is secured by property eligible
19 for a Section 201(h) investment credit to the
20 borrower, the entire principal amount of the loan or
21 loans between the taxpayer and the borrower should be
22 divided into the basis of the Section 201(h)
23 investment credit property which secures the loan or
24 loans, using for this purpose the original basis of
25 such property on the date that it was placed in service
26 in a federally designated Foreign Trade Zone or

SB2358- 45 -LRB102 10763 HLH 16092 b
1 Sub-Zone located in Illinois. No taxpayer that is
2 eligible for the deduction provided in subparagraph
3 (M) of paragraph (2) of this subsection shall be
4 eligible for the deduction provided under this
5 subparagraph (M-1). The subtraction modification
6 available to taxpayers in any year under this
7 subsection shall be that portion of the total interest
8 paid by the borrower with respect to such loan
9 attributable to the eligible property as calculated
10 under the previous sentence;
11 (N) Two times any contribution made during the
12 taxable year to a designated zone organization to the
13 extent that the contribution (i) qualifies as a
14 charitable contribution under subsection (c) of
15 Section 170 of the Internal Revenue Code and (ii)
16 must, by its terms, be used for a project approved by
17 the Department of Commerce and Economic Opportunity
18 under Section 11 of the Illinois Enterprise Zone Act
19 or under Section 10-10 of the River Edge Redevelopment
20 Zone Act. This subparagraph (N) is exempt from the
21 provisions of Section 250;
22 (O) An amount equal to: (i) 85% for taxable years
23 ending on or before December 31, 1992, or, a
24 percentage equal to the percentage allowable under
25 Section 243(a)(1) of the Internal Revenue Code of 1986
26 for taxable years ending after December 31, 1992, of

SB2358- 46 -LRB102 10763 HLH 16092 b
1 the amount by which dividends included in taxable
2 income and received from a corporation that is not
3 created or organized under the laws of the United
4 States or any state or political subdivision thereof,
5 including, for taxable years ending on or after
6 December 31, 1988, dividends received or deemed
7 received or paid or deemed paid under Sections 951
8 through 965 of the Internal Revenue Code, exceed the
9 amount of the modification provided under subparagraph
10 (G) of paragraph (2) of this subsection (b) which is
11 related to such dividends, and including, for taxable
12 years ending on or after December 31, 2008, dividends
13 received from a captive real estate investment trust;
14 plus (ii) 100% of the amount by which dividends,
15 included in taxable income and received, including,
16 for taxable years ending on or after December 31,
17 1988, dividends received or deemed received or paid or
18 deemed paid under Sections 951 through 964 of the
19 Internal Revenue Code and including, for taxable years
20 ending on or after December 31, 2008, dividends
21 received from a captive real estate investment trust,
22 from any such corporation specified in clause (i) that
23 would but for the provisions of Section 1504(b)(3) of
24 the Internal Revenue Code be treated as a member of the
25 affiliated group which includes the dividend
26 recipient, exceed the amount of the modification

SB2358- 47 -LRB102 10763 HLH 16092 b
1 provided under subparagraph (G) of paragraph (2) of
2 this subsection (b) which is related to such
3 dividends. This subparagraph (O) is exempt from the
4 provisions of Section 250 of this Act;
5 (P) An amount equal to any contribution made to a
6 job training project established pursuant to the Tax
7 Increment Allocation Redevelopment Act;
8 (Q) An amount equal to the amount of the deduction
9 used to compute the federal income tax credit for
10 restoration of substantial amounts held under claim of
11 right for the taxable year pursuant to Section 1341 of
12 the Internal Revenue Code;
13 (R) On and after July 20, 1999, in the case of an
14 attorney-in-fact with respect to whom an interinsurer
15 or a reciprocal insurer has made the election under
16 Section 835 of the Internal Revenue Code, 26 U.S.C.
17 835, an amount equal to the excess, if any, of the
18 amounts paid or incurred by that interinsurer or
19 reciprocal insurer in the taxable year to the
20 attorney-in-fact over the deduction allowed to that
21 interinsurer or reciprocal insurer with respect to the
22 attorney-in-fact under Section 835(b) of the Internal
23 Revenue Code for the taxable year; the provisions of
24 this subparagraph are exempt from the provisions of
25 Section 250;
26 (S) For taxable years ending on or after December

SB2358- 48 -LRB102 10763 HLH 16092 b
1 31, 1997, in the case of a Subchapter S corporation, an
2 amount equal to all amounts of income allocable to a
3 shareholder subject to the Personal Property Tax
4 Replacement Income Tax imposed by subsections (c) and
5 (d) of Section 201 of this Act, including amounts
6 allocable to organizations exempt from federal income
7 tax by reason of Section 501(a) of the Internal
8 Revenue Code. This subparagraph (S) is exempt from the
9 provisions of Section 250;
10 (T) For taxable years 2001 and thereafter, for the
11 taxable year in which the bonus depreciation deduction
12 is taken on the taxpayer's federal income tax return
13 under subsection (k) of Section 168 of the Internal
14 Revenue Code and for each applicable taxable year
15 thereafter, an amount equal to "x", where:
16 (1) "y" equals the amount of the depreciation
17 deduction taken for the taxable year on the
18 taxpayer's federal income tax return on property
19 for which the bonus depreciation deduction was
20 taken in any year under subsection (k) of Section
21 168 of the Internal Revenue Code, but not
22 including the bonus depreciation deduction;
23 (2) for taxable years ending on or before
24 December 31, 2005, "x" equals "y" multiplied by 30
25 and then divided by 70 (or "y" multiplied by
26 0.429); and

SB2358- 49 -LRB102 10763 HLH 16092 b
1 (3) for taxable years ending after December
2 31, 2005:
3 (i) for property on which a bonus
4 depreciation deduction of 30% of the adjusted
5 basis was taken, "x" equals "y" multiplied by
6 30 and then divided by 70 (or "y" multiplied
7 by 0.429); and
8 (ii) for property on which a bonus
9 depreciation deduction of 50% of the adjusted
10 basis was taken, "x" equals "y" multiplied by
11 1.0.
12 The aggregate amount deducted under this
13 subparagraph in all taxable years for any one piece of
14 property may not exceed the amount of the bonus
15 depreciation deduction taken on that property on the
16 taxpayer's federal income tax return under subsection
17 (k) of Section 168 of the Internal Revenue Code. This
18 subparagraph (T) is exempt from the provisions of
19 Section 250;
20 (U) If the taxpayer sells, transfers, abandons, or
21 otherwise disposes of property for which the taxpayer
22 was required in any taxable year to make an addition
23 modification under subparagraph (E-10), then an amount
24 equal to that addition modification.
25 If the taxpayer continues to own property through
26 the last day of the last tax year for which the

SB2358- 50 -LRB102 10763 HLH 16092 b
1 taxpayer may claim a depreciation deduction for
2 federal income tax purposes and for which the taxpayer
3 was required in any taxable year to make an addition
4 modification under subparagraph (E-10), then an amount
5 equal to that addition modification.
6 The taxpayer is allowed to take the deduction
7 under this subparagraph only once with respect to any
8 one piece of property.
9 This subparagraph (U) is exempt from the
10 provisions of Section 250;
11 (V) The amount of: (i) any interest income (net of
12 the deductions allocable thereto) taken into account
13 for the taxable year with respect to a transaction
14 with a taxpayer that is required to make an addition
15 modification with respect to such transaction under
16 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
17 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
18 the amount of such addition modification, (ii) any
19 income from intangible property (net of the deductions
20 allocable thereto) taken into account for the taxable
21 year with respect to a transaction with a taxpayer
22 that is required to make an addition modification with
23 respect to such transaction under Section
24 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
25 203(d)(2)(D-8), but not to exceed the amount of such
26 addition modification, and (iii) any insurance premium

SB2358- 51 -LRB102 10763 HLH 16092 b
1 income (net of deductions allocable thereto) taken
2 into account for the taxable year with respect to a
3 transaction with a taxpayer that is required to make
4 an addition modification with respect to such
5 transaction under Section 203(a)(2)(D-19), Section
6 203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
7 203(d)(2)(D-9), but not to exceed the amount of that
8 addition modification. This subparagraph (V) is exempt
9 from the provisions of Section 250;
10 (W) An amount equal to the interest income taken
11 into account for the taxable year (net of the
12 deductions allocable thereto) with respect to
13 transactions with (i) a foreign person who would be a
14 member of the taxpayer's unitary business group but
15 for the fact that the foreign person's business
16 activity outside the United States is 80% or more of
17 that person's total business activity and (ii) for
18 taxable years ending on or after December 31, 2008, 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, but
25 not to exceed the addition modification required to be
26 made for the same taxable year under Section

SB2358- 52 -LRB102 10763 HLH 16092 b
1 203(b)(2)(E-12) for interest paid, accrued, or
2 incurred, directly or indirectly, to the same person.
3 This subparagraph (W) is exempt from the provisions of
4 Section 250;
5 (X) An amount equal to the income from intangible
6 property taken into account for the taxable year (net
7 of the deductions allocable thereto) with respect to
8 transactions with (i) a foreign person who would be a
9 member of the taxpayer's unitary business group but
10 for the fact that the foreign person's business
11 activity outside the United States is 80% or more of
12 that person's total business activity and (ii) for
13 taxable years ending on or after December 31, 2008, to
14 a person who would be a member of the same unitary
15 business group but for the fact that the person is
16 prohibited under Section 1501(a)(27) from being
17 included in the unitary business group because he or
18 she is ordinarily required to apportion business
19 income under different subsections of Section 304, but
20 not to exceed the addition modification required to be
21 made for the same taxable year under Section
22 203(b)(2)(E-13) for intangible expenses and costs
23 paid, accrued, or incurred, directly or indirectly, to
24 the same foreign person. This subparagraph (X) is
25 exempt from the provisions of Section 250;
26 (Y) For taxable years ending on or after December

SB2358- 53 -LRB102 10763 HLH 16092 b
1 31, 2011, in the case of a taxpayer who was required to
2 add back any insurance premiums under Section
3 203(b)(2)(E-14), such taxpayer may elect to subtract
4 that part of a reimbursement received from the
5 insurance company equal to the amount of the expense
6 or loss (including expenses incurred by the insurance
7 company) that would have been taken into account as a
8 deduction for federal income tax purposes if the
9 expense or loss had been uninsured. If a taxpayer
10 makes the election provided for by this subparagraph
11 (Y), the insurer to which the premiums were paid must
12 add back to income the amount subtracted by the
13 taxpayer pursuant to this subparagraph (Y). This
14 subparagraph (Y) is exempt from the provisions of
15 Section 250; and
16 (Z) The difference between the nondeductible
17 controlled foreign corporation dividends under Section
18 965(e)(3) of the Internal Revenue Code over the
19 taxable income of the taxpayer, computed without
20 regard to Section 965(e)(2)(A) of the Internal Revenue
21 Code, and without regard to any net operating loss
22 deduction. This subparagraph (Z) is exempt from the
23 provisions of Section 250.
24 (3) Special rule. For purposes of paragraph (2)(A),
25 "gross income" in the case of a life insurance company,
26 for tax years ending on and after December 31, 1994, and

SB2358- 54 -LRB102 10763 HLH 16092 b
1 prior to December 31, 2011, shall mean the gross
2 investment income for the taxable year and, for tax years
3 ending on or after December 31, 2011, shall mean all
4 amounts included in life insurance gross income under
5 Section 803(a)(3) of the Internal Revenue Code.
6 (c) Trusts and estates.
7 (1) In general. In the case of a trust or estate, base
8 income means an amount equal to the taxpayer's taxable
9 income for the taxable year as modified by paragraph (2).
10 (2) Modifications. Subject to the provisions of
11 paragraph (3), the taxable income referred to in paragraph
12 (1) shall be modified by adding thereto the sum of the
13 following amounts:
14 (A) An amount equal to all amounts paid or accrued
15 to the taxpayer as interest or dividends during the
16 taxable year to the extent excluded from gross income
17 in the computation of taxable income;
18 (B) In the case of (i) an estate, $600; (ii) a
19 trust which, under its governing instrument, is
20 required to distribute all of its income currently,
21 $300; and (iii) any other trust, $100, but in each such
22 case, only to the extent such amount was deducted in
23 the computation of taxable income;
24 (C) An amount equal to the amount of tax imposed by
25 this Act to the extent deducted from gross income in

SB2358- 55 -LRB102 10763 HLH 16092 b
1 the computation of taxable income for the taxable
2 year;
3 (D) The amount of any net operating loss deduction
4 taken in arriving at taxable income, other than a net
5 operating loss carried forward from a taxable year
6 ending prior to December 31, 1986;
7 (E) For taxable years in which a net operating
8 loss carryback or carryforward from a taxable year
9 ending prior to December 31, 1986 is an element of
10 taxable income under paragraph (1) of subsection (e)
11 or subparagraph (E) of paragraph (2) of subsection
12 (e), the amount by which addition modifications other
13 than those provided by this subparagraph (E) exceeded
14 subtraction modifications in such taxable year, with
15 the following limitations applied in the order that
16 they are listed:
17 (i) the addition modification relating to the
18 net operating loss carried back or forward to the
19 taxable year from any taxable year ending prior to
20 December 31, 1986 shall be reduced by the amount
21 of addition modification under this subparagraph
22 (E) which related to that net operating loss and
23 which was taken into account in calculating the
24 base income of an earlier taxable year, and
25 (ii) the addition modification relating to the
26 net operating loss carried back or forward to the

SB2358- 56 -LRB102 10763 HLH 16092 b
1 taxable year from any taxable year ending prior to
2 December 31, 1986 shall not exceed the amount of
3 such carryback or carryforward;
4 For taxable years in which there is a net
5 operating loss carryback or carryforward from more
6 than one other taxable year ending prior to December
7 31, 1986, the addition modification provided in this
8 subparagraph (E) shall be the sum of the amounts
9 computed independently under the preceding provisions
10 of this subparagraph (E) for each such taxable year;
11 (F) For taxable years ending on or after January
12 1, 1989, an amount equal to the tax deducted pursuant
13 to Section 164 of the Internal Revenue Code if the
14 trust or estate is claiming the same tax for purposes
15 of the Illinois foreign tax credit under Section 601
16 of this Act;
17 (G) An amount equal to the amount of the capital
18 gain deduction allowable under the Internal Revenue
19 Code, to the extent deducted from gross income in the
20 computation of taxable income;
21 (G-5) For taxable years ending after December 31,
22 1997, an amount equal to any eligible remediation
23 costs that the trust or estate deducted in computing
24 adjusted gross income and for which the trust or
25 estate claims a credit under subsection (l) of Section
26 201;

SB2358- 57 -LRB102 10763 HLH 16092 b
1 (G-10) For taxable years 2001 and thereafter, an
2 amount equal to the bonus depreciation deduction taken
3 on the taxpayer's federal income tax return for the
4 taxable year under subsection (k) of Section 168 of
5 the Internal Revenue Code; and
6 (G-11) If the taxpayer sells, transfers, abandons,
7 or otherwise disposes of property for which the
8 taxpayer was required in any taxable year to make an
9 addition modification under subparagraph (G-10), then
10 an amount equal to the aggregate amount of the
11 deductions taken in all taxable years under
12 subparagraph (R) with respect to that property.
13 If the taxpayer continues to own property through
14 the last day of the last tax year for which the
15 taxpayer may claim a depreciation deduction for
16 federal income tax purposes and for which the taxpayer
17 was allowed in any taxable year to make a subtraction
18 modification under subparagraph (R), then an amount
19 equal to that subtraction modification.
20 The taxpayer is required to make the addition
21 modification under this subparagraph only once with
22 respect to any one piece of property;
23 (G-12) An amount equal to the amount otherwise
24 allowed as a deduction in computing base income for
25 interest paid, accrued, or incurred, directly or
26 indirectly, (i) for taxable years ending on or after

SB2358- 58 -LRB102 10763 HLH 16092 b
1 December 31, 2004, to a foreign person who would be a
2 member of the same unitary business group but for the
3 fact that the foreign person's business activity
4 outside the United States is 80% or more of the foreign
5 person's total business activity and (ii) for taxable
6 years ending on or after December 31, 2008, to a person
7 who would be a member of the same unitary business
8 group but for the fact that the person is prohibited
9 under Section 1501(a)(27) from being included in the
10 unitary business group because he or she is ordinarily
11 required to apportion business income under different
12 subsections of Section 304. The addition modification
13 required by this subparagraph shall be reduced to the
14 extent that dividends were included in base income of
15 the unitary group for the same taxable year and
16 received by the taxpayer or by a member of the
17 taxpayer's unitary business group (including amounts
18 included in gross income pursuant to Sections 951
19 through 964 of the Internal Revenue Code and amounts
20 included in gross income under Section 78 of the
21 Internal Revenue Code) with respect to the stock of
22 the same person to whom the interest was paid,
23 accrued, or incurred.
24 This paragraph shall not apply to the following:
25 (i) an item of interest paid, accrued, or
26 incurred, directly or indirectly, to a person who

SB2358- 59 -LRB102 10763 HLH 16092 b
1 is subject in a foreign country or state, other
2 than a state which requires mandatory unitary
3 reporting, to a tax on or measured by net income
4 with respect to such interest; or
5 (ii) an item of interest paid, accrued, or
6 incurred, directly or indirectly, to a person if
7 the taxpayer can establish, based on a
8 preponderance of the evidence, both of the
9 following:
10 (a) the person, during the same taxable
11 year, paid, accrued, or incurred, the interest
12 to a person that is not a related member, and
13 (b) the transaction giving rise to the
14 interest expense between the taxpayer and the
15 person did not have as a principal purpose the
16 avoidance of Illinois income tax, and is paid
17 pursuant to a contract or agreement that
18 reflects an arm's-length interest rate and
19 terms; or
20 (iii) the taxpayer can establish, based on
21 clear and convincing evidence, that the interest
22 paid, accrued, or incurred relates to a contract
23 or agreement entered into at arm's-length rates
24 and terms and the principal purpose for the
25 payment is not federal or Illinois tax avoidance;
26 or

SB2358- 60 -LRB102 10763 HLH 16092 b
1 (iv) an item of interest paid, accrued, or
2 incurred, directly or indirectly, to a person if
3 the taxpayer establishes by clear and convincing
4 evidence that the adjustments are unreasonable; or
5 if the taxpayer and the Director agree in writing
6 to the application or use of an alternative method
7 of apportionment under Section 304(f).
8 Nothing in this subsection shall preclude the
9 Director from making any other adjustment
10 otherwise allowed under Section 404 of this Act
11 for any tax year beginning after the effective
12 date of this amendment provided such adjustment is
13 made pursuant to regulation adopted by the
14 Department and such regulations provide methods
15 and standards by which the Department will utilize
16 its authority under Section 404 of this Act;
17 (G-13) An amount equal to the amount of intangible
18 expenses and costs otherwise allowed as a deduction in
19 computing base income, and that were paid, accrued, or
20 incurred, directly or indirectly, (i) for taxable
21 years ending on or after December 31, 2004, to a
22 foreign person who would be a member of the same
23 unitary business group but for the fact that the
24 foreign person's business activity outside the United
25 States is 80% or more of that person's total business
26 activity and (ii) for taxable years ending on or after

SB2358- 61 -LRB102 10763 HLH 16092 b
1 December 31, 2008, to a person who would be a member of
2 the same unitary business group but for the fact that
3 the person is prohibited under Section 1501(a)(27)
4 from being included in the unitary business group
5 because he or she is ordinarily required to apportion
6 business income under different subsections of Section
7 304. The addition modification required by this
8 subparagraph shall be reduced to the extent that
9 dividends were included in base income of the unitary
10 group for the same taxable year and received by the
11 taxpayer or by a member of the taxpayer's unitary
12 business group (including amounts included in gross
13 income pursuant to Sections 951 through 964 of the
14 Internal Revenue Code and amounts included in gross
15 income under Section 78 of the Internal Revenue Code)
16 with respect to the stock of the same person to whom
17 the intangible expenses and costs were directly or
18 indirectly paid, incurred, or accrued. The preceding
19 sentence shall not apply to the extent that the same
20 dividends caused a reduction to the addition
21 modification required under Section 203(c)(2)(G-12) of
22 this Act. As used in this subparagraph, the term
23 "intangible expenses and costs" includes: (1)
24 expenses, losses, and costs for or related to the
25 direct or indirect acquisition, use, maintenance or
26 management, ownership, sale, exchange, or any other

SB2358- 62 -LRB102 10763 HLH 16092 b
1 disposition of intangible property; (2) losses
2 incurred, directly or indirectly, from factoring
3 transactions or discounting transactions; (3) royalty,
4 patent, technical, and copyright fees; (4) licensing
5 fees; and (5) other similar expenses and costs. For
6 purposes of this subparagraph, "intangible property"
7 includes patents, patent applications, trade names,
8 trademarks, service marks, copyrights, mask works,
9 trade secrets, and similar types of intangible assets.
10 This paragraph shall not apply to the following:
11 (i) any item of intangible expenses or costs
12 paid, accrued, or incurred, directly or
13 indirectly, from a transaction with a person who
14 is subject in a foreign country or state, other
15 than a state which requires mandatory unitary
16 reporting, to a tax on or measured by net income
17 with respect to such item; or
18 (ii) any item of intangible expense or cost
19 paid, accrued, or incurred, directly or
20 indirectly, if the taxpayer can establish, based
21 on a preponderance of the evidence, both of the
22 following:
23 (a) the person during the same taxable
24 year paid, accrued, or incurred, the
25 intangible expense or cost to a person that is
26 not a related member, and

SB2358- 63 -LRB102 10763 HLH 16092 b
1 (b) the transaction giving rise to the
2 intangible expense or cost between the
3 taxpayer and the person did not have as a
4 principal purpose the avoidance of Illinois
5 income tax, and is paid pursuant to a contract
6 or agreement that reflects arm's-length terms;
7 or
8 (iii) any item of intangible expense or cost
9 paid, accrued, or incurred, directly or
10 indirectly, from a transaction with a person if
11 the taxpayer establishes by clear and convincing
12 evidence, that the adjustments are unreasonable;
13 or if the taxpayer and the Director agree in
14 writing to the application or use of an
15 alternative method of apportionment under Section
16 304(f);
17 Nothing in this subsection shall preclude the
18 Director from making any other adjustment
19 otherwise allowed under Section 404 of this Act
20 for any tax year beginning after the effective
21 date of this amendment provided such adjustment is
22 made pursuant to regulation adopted by the
23 Department and such regulations provide methods
24 and standards by which the Department will utilize
25 its authority under Section 404 of this Act;
26 (G-14) For taxable years ending on or after

SB2358- 64 -LRB102 10763 HLH 16092 b
1 December 31, 2008, an amount equal to the amount of
2 insurance premium expenses and costs otherwise allowed
3 as a deduction in computing base income, and that were
4 paid, accrued, or incurred, directly or indirectly, to
5 a person who would be a member of the same unitary
6 business group but for the fact that the person is
7 prohibited under Section 1501(a)(27) from being
8 included in the unitary business group because he or
9 she is ordinarily required to apportion business
10 income under different subsections of Section 304. The
11 addition modification required by this subparagraph
12 shall be reduced to the extent that dividends were
13 included in base income of the unitary group for the
14 same taxable year and received by the taxpayer or by a
15 member of the taxpayer's unitary business group
16 (including amounts included in gross income under
17 Sections 951 through 964 of the Internal Revenue Code
18 and amounts included in gross income under Section 78
19 of the Internal Revenue Code) with respect to the
20 stock of the same person to whom the premiums and costs
21 were directly or indirectly paid, incurred, or
22 accrued. The preceding sentence does not apply to the
23 extent that the same dividends caused a reduction to
24 the addition modification required under Section
25 203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this
26 Act;

SB2358- 65 -LRB102 10763 HLH 16092 b
1 (G-15) An amount equal to the credit allowable to
2 the taxpayer under Section 218(a) of this Act,
3 determined without regard to Section 218(c) of this
4 Act;
5 (G-16) For taxable years ending on or after
6 December 31, 2017, an amount equal to the deduction
7 allowed under Section 199 of the Internal Revenue Code
8 for the taxable year;
9 and by deducting from the total so obtained the sum of the
10 following amounts:
11 (H) An amount equal to all amounts included in
12 such total pursuant to the provisions of Sections
13 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 408
14 of the Internal Revenue Code or included in such total
15 as distributions under the provisions of any
16 retirement or disability plan for employees of any
17 governmental agency or unit, or retirement payments to
18 retired partners, which payments are excluded in
19 computing net earnings from self employment by Section
20 1402 of the Internal Revenue Code and regulations
21 adopted pursuant thereto;
22 (I) The valuation limitation amount;
23 (J) An amount equal to the amount of any tax
24 imposed by this Act which was refunded to the taxpayer
25 and included in such total for the taxable year;
26 (K) An amount equal to all amounts included in

SB2358- 66 -LRB102 10763 HLH 16092 b
1 taxable income as modified by subparagraphs (A), (B),
2 (C), (D), (E), (F) and (G) which are exempt from
3 taxation by this State either by reason of its
4 statutes or Constitution or by reason of the
5 Constitution, treaties or statutes of the United
6 States; provided that, in the case of any statute of
7 this State that exempts income derived from bonds or
8 other obligations from the tax imposed under this Act,
9 the amount exempted shall be the interest net of bond
10 premium amortization;
11 (L) With the exception of any amounts subtracted
12 under subparagraph (K), an amount equal to the sum of
13 all amounts disallowed as deductions by (i) Sections
14 171(a)(2) and 265(a)(2) of the Internal Revenue Code,
15 and all amounts of expenses allocable to interest and
16 disallowed as deductions by Section 265(a)(1) of the
17 Internal Revenue Code; and (ii) for taxable years
18 ending on or after August 13, 1999, Sections
19 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
20 Internal Revenue Code, plus, (iii) for taxable years
21 ending on or after December 31, 2011, Section
22 45G(e)(3) of the Internal Revenue Code and, for
23 taxable years ending on or after December 31, 2008,
24 any amount included in gross income under Section 87
25 of the Internal Revenue Code; the provisions of this
26 subparagraph are exempt from the provisions of Section

SB2358- 67 -LRB102 10763 HLH 16092 b
1 250;
2 (M) An amount equal to those dividends included in
3 such total which were paid by a corporation which
4 conducts business operations in a River Edge
5 Redevelopment Zone or zones created under the River
6 Edge Redevelopment Zone Act and conducts substantially
7 all of its operations in a River Edge Redevelopment
8 Zone or zones. This subparagraph (M) is exempt from
9 the provisions of Section 250;
10 (N) An amount equal to any contribution made to a
11 job training project established pursuant to the Tax
12 Increment Allocation Redevelopment Act;
13 (O) An amount equal to those dividends included in
14 such total that were paid by a corporation that
15 conducts business operations in a federally designated
16 Foreign Trade Zone or Sub-Zone and that is designated
17 a High Impact Business located in Illinois; provided
18 that dividends eligible for the deduction provided in
19 subparagraph (M) of paragraph (2) of this subsection
20 shall not be eligible for the deduction provided under
21 this subparagraph (O);
22 (P) An amount equal to the amount of the deduction
23 used to compute the federal income tax credit for
24 restoration of substantial amounts held under claim of
25 right for the taxable year pursuant to Section 1341 of
26 the Internal Revenue Code;

SB2358- 68 -LRB102 10763 HLH 16092 b
1 (Q) For taxable year 1999 and thereafter, an
2 amount equal to the amount of any (i) distributions,
3 to the extent includible in gross income for federal
4 income tax purposes, made to the taxpayer because of
5 his or her status as a victim of persecution for racial
6 or religious reasons by Nazi Germany or any other Axis
7 regime or as an heir of the victim and (ii) items of
8 income, to the extent includible in gross income for
9 federal income tax purposes, attributable to, derived
10 from or in any way related to assets stolen from,
11 hidden from, or otherwise lost to a victim of
12 persecution for racial or religious reasons by Nazi
13 Germany or any other Axis regime immediately prior to,
14 during, and immediately after World War II, including,
15 but not limited to, interest on the proceeds
16 receivable as insurance under policies issued to a
17 victim of persecution for racial or religious reasons
18 by Nazi Germany or any other Axis regime by European
19 insurance companies immediately prior to and during
20 World War II; provided, however, this subtraction from
21 federal adjusted gross income does not apply to assets
22 acquired with such assets or with the proceeds from
23 the sale of such assets; provided, further, this
24 paragraph shall only apply to a taxpayer who was the
25 first recipient of such assets after their recovery
26 and who is a victim of persecution for racial or

SB2358- 69 -LRB102 10763 HLH 16092 b
1 religious reasons by Nazi Germany or any other Axis
2 regime or as an heir of the victim. The amount of and
3 the eligibility for any public assistance, benefit, or
4 similar entitlement is not affected by the inclusion
5 of items (i) and (ii) of this paragraph in gross income
6 for federal income tax purposes. This paragraph is
7 exempt from the provisions of Section 250;
8 (R) For taxable years 2001 and thereafter, for the
9 taxable year in which the bonus depreciation deduction
10 is taken on the taxpayer's federal income tax return
11 under subsection (k) of Section 168 of the Internal
12 Revenue Code and for each applicable taxable year
13 thereafter, an amount equal to "x", where:
14 (1) "y" equals the amount of the depreciation
15 deduction taken for the taxable year on the
16 taxpayer's federal income tax return on property
17 for which the bonus depreciation deduction was
18 taken in any year under subsection (k) of Section
19 168 of the Internal Revenue Code, but not
20 including the bonus depreciation deduction;
21 (2) for taxable years ending on or before
22 December 31, 2005, "x" equals "y" multiplied by 30
23 and then divided by 70 (or "y" multiplied by
24 0.429); and
25 (3) for taxable years ending after December
26 31, 2005:

SB2358- 70 -LRB102 10763 HLH 16092 b
1 (i) for property on which a bonus
2 depreciation deduction of 30% of the adjusted
3 basis was taken, "x" equals "y" multiplied by
4 30 and then divided by 70 (or "y" multiplied
5 by 0.429); and
6 (ii) for property on which a bonus
7 depreciation deduction of 50% of the adjusted
8 basis was taken, "x" equals "y" multiplied by
9 1.0.
10 The aggregate amount deducted under this
11 subparagraph in all taxable years for any one piece of
12 property may not exceed the amount of the bonus
13 depreciation deduction taken on that property on the
14 taxpayer's federal income tax return under subsection
15 (k) of Section 168 of the Internal Revenue Code. This
16 subparagraph (R) is exempt from the provisions of
17 Section 250;
18 (S) If the taxpayer sells, transfers, abandons, or
19 otherwise disposes of property for which the taxpayer
20 was required in any taxable year to make an addition
21 modification under subparagraph (G-10), then an amount
22 equal to that addition modification.
23 If the taxpayer continues to own property through
24 the last day of the last tax year for which the
25 taxpayer may claim a depreciation deduction for
26 federal income tax purposes and for which the taxpayer

SB2358- 71 -LRB102 10763 HLH 16092 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 The taxpayer is allowed to take the deduction
5 under this subparagraph only once with respect to any
6 one piece of property.
7 This subparagraph (S) is exempt from the
8 provisions of Section 250;
9 (T) The amount of (i) any interest income (net of
10 the deductions allocable thereto) taken into account
11 for the taxable year with respect to a transaction
12 with a taxpayer that is required to make an addition
13 modification with respect to such transaction under
14 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
15 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
16 the amount of such addition modification and (ii) any
17 income from intangible property (net of the deductions
18 allocable thereto) taken into account for the taxable
19 year with respect to a transaction with a taxpayer
20 that is required to make an addition modification with
21 respect to such transaction under Section
22 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
23 203(d)(2)(D-8), but not to exceed the amount of such
24 addition modification. This subparagraph (T) is exempt
25 from the provisions of Section 250;
26 (U) An amount equal to the interest income taken

SB2358- 72 -LRB102 10763 HLH 16092 b
1 into account for the taxable year (net of the
2 deductions allocable thereto) with respect to
3 transactions with (i) a foreign person who would be a
4 member of the taxpayer's unitary business group but
5 for the fact the foreign person's business activity
6 outside the United States is 80% or more of that
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, but not to exceed the
15 addition modification required to be made for the same
16 taxable year under Section 203(c)(2)(G-12) for
17 interest paid, accrued, or incurred, directly or
18 indirectly, to the same person. This subparagraph (U)
19 is exempt from the provisions of Section 250;
20 (V) An amount equal to the income from intangible
21 property taken into account for the taxable year (net
22 of the 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

SB2358- 73 -LRB102 10763 HLH 16092 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(c)(2)(G-13) for intangible expenses and costs
12 paid, accrued, or incurred, directly or indirectly, to
13 the same foreign person. This subparagraph (V) is
14 exempt from the provisions of Section 250;
15 (W) in the case of an estate, an amount equal to
16 all amounts included in such total pursuant to the
17 provisions of Section 111 of the Internal Revenue Code
18 as a recovery of items previously deducted by the
19 decedent from adjusted gross income in the computation
20 of taxable income. This subparagraph (W) is exempt
21 from Section 250;
22 (X) an amount equal to the refund included in such
23 total of any tax deducted for federal income tax
24 purposes, to the extent that deduction was added back
25 under subparagraph (F). This subparagraph (X) is
26 exempt from the provisions of Section 250;

SB2358- 74 -LRB102 10763 HLH 16092 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(c)(2)(G-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) For taxable years beginning after December 31,
18 2018 and before January 1, 2026, the amount of excess
19 business loss of the taxpayer disallowed as a
20 deduction by Section 461(l)(1)(B) of the Internal
21 Revenue Code.
22 (3) Limitation. The amount of any modification
23 otherwise required under this subsection shall, under
24 regulations prescribed by the Department, be adjusted by
25 any amounts included therein which were properly paid,
26 credited, or required to be distributed, or permanently

SB2358- 75 -LRB102 10763 HLH 16092 b
1 set aside for charitable purposes pursuant to Internal
2 Revenue Code Section 642(c) during the taxable year.
3 (d) Partnerships.
4 (1) In general. In the case of a partnership, base
5 income means an amount equal to the taxpayer's taxable
6 income for the taxable year as modified by paragraph (2).
7 (2) Modifications. The taxable income referred to in
8 paragraph (1) shall be modified by adding thereto the sum
9 of the following amounts:
10 (A) An amount equal to all amounts paid or accrued
11 to the taxpayer as interest or dividends during the
12 taxable year to the extent excluded from gross income
13 in the computation of taxable income;
14 (B) An amount equal to the amount of tax imposed by
15 this Act to the extent deducted from gross income for
16 the taxable year;
17 (C) The amount of deductions allowed to the
18 partnership pursuant to Section 707 (c) of the
19 Internal Revenue Code in calculating its taxable
20 income;
21 (D) An amount equal to the amount of the capital
22 gain deduction allowable under the Internal Revenue
23 Code, to the extent deducted from gross income in the
24 computation of taxable income;
25 (D-5) For taxable years 2001 and thereafter, an

SB2358- 76 -LRB102 10763 HLH 16092 b
1 amount equal to the bonus depreciation deduction taken
2 on the taxpayer's federal income tax return for the
3 taxable year under subsection (k) of Section 168 of
4 the Internal Revenue Code;
5 (D-6) If the taxpayer sells, transfers, abandons,
6 or otherwise disposes of property for which the
7 taxpayer was required in any taxable year to make an
8 addition modification under subparagraph (D-5), then
9 an amount equal to the aggregate amount of the
10 deductions taken in all taxable years under
11 subparagraph (O) with respect to that property.
12 If the taxpayer continues to own property through
13 the last day of the last tax year for which the
14 taxpayer may claim a depreciation deduction for
15 federal income tax purposes and for which the taxpayer
16 was allowed in any taxable year to make a subtraction
17 modification under subparagraph (O), then an amount
18 equal to that subtraction modification.
19 The taxpayer is required to make the addition
20 modification under this subparagraph only once with
21 respect to any one piece of property;
22 (D-7) An amount equal to the amount otherwise
23 allowed as a deduction in computing base income for
24 interest paid, accrued, or incurred, directly or
25 indirectly, (i) for taxable years ending on or after
26 December 31, 2004, to a foreign person who would be a

SB2358- 77 -LRB102 10763 HLH 16092 b
1 member of the same unitary business group but for the
2 fact the foreign person's business activity outside
3 the United States is 80% or more of the foreign
4 person's total business activity and (ii) for taxable
5 years ending on or after December 31, 2008, to a person
6 who would be a member of the same unitary business
7 group but for the fact that the person is prohibited
8 under Section 1501(a)(27) from being included in the
9 unitary business group because he or she is ordinarily
10 required to apportion business income under different
11 subsections of Section 304. The addition modification
12 required by this subparagraph shall be reduced to the
13 extent that dividends were included in base income of
14 the unitary group for the same taxable year and
15 received by the taxpayer or by a member of the
16 taxpayer's unitary business group (including amounts
17 included in gross income pursuant to Sections 951
18 through 964 of the Internal Revenue Code and amounts
19 included in gross income under Section 78 of the
20 Internal Revenue Code) with respect to the stock of
21 the same person to whom the interest was paid,
22 accrued, or incurred.
23 This paragraph shall not apply to the following:
24 (i) an item of interest paid, accrued, or
25 incurred, directly or indirectly, to a person who
26 is subject in a foreign country or state, other

SB2358- 78 -LRB102 10763 HLH 16092 b
1 than a state which requires mandatory unitary
2 reporting, to a tax on or measured by net income
3 with respect to such interest; or
4 (ii) an item of interest paid, accrued, or
5 incurred, directly or indirectly, to a person if
6 the taxpayer can establish, based on a
7 preponderance of the evidence, both of the
8 following:
9 (a) the person, during the same taxable
10 year, paid, accrued, or incurred, the interest
11 to a person that is not a related member, and
12 (b) the transaction giving rise to the
13 interest expense between the taxpayer and the
14 person did not have as a principal purpose the
15 avoidance of Illinois income tax, and is paid
16 pursuant to a contract or agreement that
17 reflects an arm's-length interest rate and
18 terms; or
19 (iii) the taxpayer can establish, based on
20 clear and convincing evidence, that the interest
21 paid, accrued, or incurred relates to a contract
22 or agreement entered into at arm's-length rates
23 and terms and the principal purpose for the
24 payment is not federal or Illinois tax avoidance;
25 or
26 (iv) an item of interest paid, accrued, or

SB2358- 79 -LRB102 10763 HLH 16092 b
1 incurred, directly or indirectly, to a person if
2 the taxpayer establishes by clear and convincing
3 evidence that the adjustments are unreasonable; or
4 if the taxpayer and the Director agree in writing
5 to the application or use of an alternative method
6 of apportionment under Section 304(f).
7 Nothing in this subsection shall preclude the
8 Director from making any other adjustment
9 otherwise allowed under Section 404 of this Act
10 for any tax year beginning after the effective
11 date of this amendment provided such adjustment is
12 made pursuant to regulation adopted by the
13 Department and such regulations provide methods
14 and standards by which the Department will utilize
15 its authority under Section 404 of this Act; and
16 (D-8) An amount equal to the amount of intangible
17 expenses and costs otherwise allowed as a deduction in
18 computing base income, and that were paid, accrued, or
19 incurred, directly or indirectly, (i) for taxable
20 years ending on or after December 31, 2004, to a
21 foreign person who would be a member of the same
22 unitary business group but for the fact that the
23 foreign person's business activity outside the United
24 States is 80% or more of that person's total business
25 activity and (ii) for taxable years ending on or after
26 December 31, 2008, to a person who would be a member of

SB2358- 80 -LRB102 10763 HLH 16092 b
1 the same unitary business group but for the fact that
2 the person is prohibited under Section 1501(a)(27)
3 from being included in the unitary business group
4 because he or she is ordinarily required to apportion
5 business income under different subsections of Section
6 304. The addition modification required by this
7 subparagraph shall be reduced to the extent that
8 dividends were included in base income of the unitary
9 group for the same taxable year and received by the
10 taxpayer or by a member of the taxpayer's unitary
11 business group (including amounts included in gross
12 income pursuant to Sections 951 through 964 of the
13 Internal Revenue Code and amounts included in gross
14 income under Section 78 of the Internal Revenue Code)
15 with respect to the stock of the same person to whom
16 the intangible expenses and costs were directly or
17 indirectly paid, incurred or accrued. The preceding
18 sentence shall not apply to the extent that the same
19 dividends caused a reduction to the addition
20 modification required under Section 203(d)(2)(D-7) of
21 this Act. As used in this subparagraph, the term
22 "intangible expenses and costs" includes (1) expenses,
23 losses, and costs for, or related to, the direct or
24 indirect acquisition, use, maintenance or management,
25 ownership, sale, exchange, or any other disposition of
26 intangible property; (2) losses incurred, directly or

SB2358- 81 -LRB102 10763 HLH 16092 b
1 indirectly, from factoring transactions or discounting
2 transactions; (3) royalty, patent, technical, and
3 copyright fees; (4) licensing fees; and (5) other
4 similar expenses and costs. For purposes of this
5 subparagraph, "intangible property" includes patents,
6 patent applications, trade names, trademarks, service
7 marks, copyrights, mask works, trade secrets, and
8 similar types of intangible assets;
9 This paragraph shall not apply to the following:
10 (i) any item of intangible expenses or costs
11 paid, accrued, or incurred, directly or
12 indirectly, from a transaction with a person who
13 is subject in a foreign country or state, other
14 than a state which requires mandatory unitary
15 reporting, to a tax on or measured by net income
16 with respect to such item; or
17 (ii) any item of intangible expense or cost
18 paid, accrued, or incurred, directly or
19 indirectly, if the taxpayer can establish, based
20 on a preponderance of the evidence, both of the
21 following:
22 (a) the person during the same taxable
23 year paid, accrued, or incurred, the
24 intangible expense or cost to a person that is
25 not a related member, and
26 (b) the transaction giving rise to the

SB2358- 82 -LRB102 10763 HLH 16092 b
1 intangible expense or cost between the
2 taxpayer and the person did not have as a
3 principal purpose the avoidance of Illinois
4 income tax, and is paid pursuant to a contract
5 or agreement that reflects arm's-length terms;
6 or
7 (iii) any item of intangible expense or cost
8 paid, accrued, or incurred, directly or
9 indirectly, from a transaction with a person if
10 the taxpayer establishes by clear and convincing
11 evidence, that the adjustments are unreasonable;
12 or if the taxpayer and the Director agree in
13 writing to the application or use of an
14 alternative method of apportionment under Section
15 304(f);
16 Nothing in this subsection shall preclude the
17 Director from making any other adjustment
18 otherwise allowed under Section 404 of this Act
19 for any tax year beginning after the effective
20 date of this amendment provided such adjustment is
21 made pursuant to regulation adopted by the
22 Department and such regulations provide methods
23 and standards by which the Department will utilize
24 its authority under Section 404 of this Act;
25 (D-9) For taxable years ending on or after
26 December 31, 2008, an amount equal to the amount of

SB2358- 83 -LRB102 10763 HLH 16092 b
1 insurance premium expenses and costs otherwise allowed
2 as a deduction in computing base income, and that were
3 paid, accrued, or incurred, directly or indirectly, to
4 a person who would be a member of the same unitary
5 business group but for the fact that the person is
6 prohibited under Section 1501(a)(27) from being
7 included in the unitary business group because he or
8 she is ordinarily required to apportion business
9 income under different subsections of Section 304. The
10 addition modification required by this subparagraph
11 shall be reduced to the extent that dividends were
12 included in base income of the unitary group for the
13 same taxable year and received by the taxpayer or by a
14 member of the taxpayer's unitary business group
15 (including amounts included in gross income under
16 Sections 951 through 964 of the Internal Revenue Code
17 and amounts included in gross income under Section 78
18 of the Internal Revenue Code) with respect to the
19 stock of the same person to whom the premiums and costs
20 were directly or indirectly paid, incurred, or
21 accrued. The preceding sentence does not apply to the
22 extent that the same dividends caused a reduction to
23 the addition modification required under Section
24 203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act;
25 (D-10) An amount equal to the credit allowable to
26 the taxpayer under Section 218(a) of this Act,

SB2358- 84 -LRB102 10763 HLH 16092 b
1 determined without regard to Section 218(c) of this
2 Act;
3 (D-11) For taxable years ending on or after
4 December 31, 2017, an amount equal to the deduction
5 allowed under Section 199 of the Internal Revenue Code
6 for the taxable year;
7 and by deducting from the total so obtained the following
8 amounts:
9 (E) The valuation limitation amount;
10 (F) An amount equal to the amount of any tax
11 imposed by this Act which was refunded to the taxpayer
12 and included in such total for the taxable year;
13 (G) An amount equal to all amounts included in
14 taxable income as modified by subparagraphs (A), (B),
15 (C) and (D) which are exempt from taxation by this
16 State either by reason of its statutes or Constitution
17 or by reason of the Constitution, treaties or statutes
18 of the United States; provided that, in the case of any
19 statute of this State that exempts income derived from
20 bonds or other obligations from the tax imposed under
21 this Act, the amount exempted shall be the interest
22 net of bond premium amortization;
23 (H) Any income of the partnership which
24 constitutes personal service income as defined in
25 Section 1348(b)(1) of the Internal Revenue Code (as in
26 effect December 31, 1981) or a reasonable allowance

SB2358- 85 -LRB102 10763 HLH 16092 b
1 for compensation paid or accrued for services rendered
2 by partners to the partnership, whichever is greater;
3 this subparagraph (H) is exempt from the provisions of
4 Section 250;
5 (I) An amount equal to all amounts of income
6 distributable to an entity subject to the Personal
7 Property Tax Replacement Income Tax imposed by
8 subsections (c) and (d) of Section 201 of this Act
9 including amounts distributable to organizations
10 exempt from federal income tax by reason of Section
11 501(a) of the Internal Revenue Code; this subparagraph
12 (I) is exempt from the provisions of Section 250;
13 (J) With the exception of any amounts subtracted
14 under subparagraph (G), an amount equal to the sum of
15 all amounts disallowed as deductions by (i) Sections
16 171(a)(2), and 265(a)(2) of the Internal Revenue Code,
17 and all amounts of expenses allocable to interest and
18 disallowed as deductions by Section 265(a)(1) of the
19 Internal Revenue Code; and (ii) for taxable years
20 ending on or after August 13, 1999, Sections
21 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
22 Internal Revenue Code, plus, (iii) for taxable years
23 ending on or after December 31, 2011, Section
24 45G(e)(3) of the Internal Revenue Code and, for
25 taxable years ending on or after December 31, 2008,
26 any amount included in gross income under Section 87

SB2358- 86 -LRB102 10763 HLH 16092 b
1 of the Internal Revenue Code; the provisions of this
2 subparagraph are exempt from the provisions of Section
3 250;
4 (K) An amount equal to those dividends included in
5 such total which were paid by a corporation which
6 conducts business operations in a River Edge
7 Redevelopment Zone or zones created under the River
8 Edge Redevelopment Zone Act and conducts substantially
9 all of its operations from a River Edge Redevelopment
10 Zone or zones. This subparagraph (K) is exempt from
11 the provisions of Section 250;
12 (L) An amount equal to any contribution made to a
13 job training project established pursuant to the Real
14 Property Tax Increment Allocation Redevelopment Act;
15 (M) An amount equal to those dividends included in
16 such total that were paid by a corporation that
17 conducts business operations in a federally designated
18 Foreign Trade Zone or Sub-Zone and that is designated
19 a High Impact Business located in Illinois; provided
20 that dividends eligible for the deduction provided in
21 subparagraph (K) of paragraph (2) of this subsection
22 shall not be eligible for the deduction provided under
23 this subparagraph (M);
24 (N) An amount equal to the amount of the deduction
25 used to compute the federal income tax credit for
26 restoration of substantial amounts held under claim of

SB2358- 87 -LRB102 10763 HLH 16092 b
1 right for the taxable year pursuant to Section 1341 of
2 the Internal Revenue Code;
3 (O) For taxable years 2001 and thereafter, for the
4 taxable year in which the bonus depreciation deduction
5 is taken on the taxpayer's federal income tax return
6 under subsection (k) of Section 168 of the Internal
7 Revenue Code and for each applicable taxable year
8 thereafter, an amount equal to "x", where:
9 (1) "y" equals the amount of the depreciation
10 deduction taken for the taxable year on the
11 taxpayer's federal income tax return on property
12 for which the bonus depreciation deduction was
13 taken in any year under subsection (k) of Section
14 168 of the Internal Revenue Code, but not
15 including the bonus depreciation deduction;
16 (2) for taxable years ending on or before
17 December 31, 2005, "x" equals "y" multiplied by 30
18 and then divided by 70 (or "y" multiplied by
19 0.429); and
20 (3) for taxable years ending after December
21 31, 2005:
22 (i) for property on which a bonus
23 depreciation deduction of 30% of the adjusted
24 basis was taken, "x" equals "y" multiplied by
25 30 and then divided by 70 (or "y" multiplied
26 by 0.429); and

SB2358- 88 -LRB102 10763 HLH 16092 b
1 (ii) for property on which a bonus
2 depreciation deduction of 50% of the adjusted
3 basis was taken, "x" equals "y" multiplied by
4 1.0.
5 The aggregate amount deducted under this
6 subparagraph in all taxable years for any one piece of
7 property may not exceed the amount of the bonus
8 depreciation deduction taken on that property on the
9 taxpayer's federal income tax return under subsection
10 (k) of Section 168 of the Internal Revenue Code. This
11 subparagraph (O) is exempt from the provisions of
12 Section 250;
13 (P) If the taxpayer sells, transfers, abandons, or
14 otherwise disposes of property for which the taxpayer
15 was required in any taxable year to make an addition
16 modification under subparagraph (D-5), then an amount
17 equal to that addition modification.
18 If the taxpayer continues to own property through
19 the last day of the last tax year for which the
20 taxpayer may claim a depreciation deduction for
21 federal income tax purposes and for which the taxpayer
22 was required in any taxable year to make an addition
23 modification under subparagraph (D-5), then an amount
24 equal to that addition modification.
25 The taxpayer is allowed to take the deduction
26 under this subparagraph only once with respect to any

SB2358- 89 -LRB102 10763 HLH 16092 b
1 one piece of property.
2 This subparagraph (P) is exempt from the
3 provisions of Section 250;
4 (Q) The amount of (i) any interest income (net of
5 the deductions allocable thereto) taken into account
6 for the taxable year with respect to a transaction
7 with a taxpayer that is required to make an addition
8 modification with respect to such transaction under
9 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
10 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
11 the amount of such addition modification and (ii) any
12 income from intangible property (net of the deductions
13 allocable thereto) taken into account for the taxable
14 year with respect to a transaction with a taxpayer
15 that is required to make an addition modification with
16 respect to such transaction under Section
17 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
18 203(d)(2)(D-8), but not to exceed the amount of such
19 addition modification. This subparagraph (Q) is exempt
20 from Section 250;
21 (R) An amount equal to the interest income taken
22 into account for the taxable year (net of the
23 deductions allocable thereto) with respect to
24 transactions with (i) a foreign person who would be a
25 member of the taxpayer's unitary business group but
26 for the fact that the foreign person's business

SB2358- 90 -LRB102 10763 HLH 16092 b
1 activity outside the United States is 80% or more of
2 that person's total business activity and (ii) for
3 taxable years ending on or after December 31, 2008, to
4 a person who would be a member of the same unitary
5 business group but for the fact that the person is
6 prohibited under Section 1501(a)(27) from being
7 included in the unitary business group because he or
8 she is ordinarily required to apportion business
9 income under different subsections of Section 304, but
10 not to exceed the addition modification required to be
11 made for the same taxable year under Section
12 203(d)(2)(D-7) for interest paid, accrued, or
13 incurred, directly or indirectly, to the same person.
14 This subparagraph (R) is exempt from Section 250;
15 (S) 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

SB2358- 91 -LRB102 10763 HLH 16092 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(d)(2)(D-8) for intangible expenses and costs paid,
7 accrued, or incurred, directly or indirectly, to the
8 same person. This subparagraph (S) is exempt from
9 Section 250; and
10 (T) For taxable years ending on or after December
11 31, 2011, in the case of a taxpayer who was required to
12 add back any insurance premiums under Section
13 203(d)(2)(D-9), such taxpayer may elect to subtract
14 that part of a reimbursement received from the
15 insurance company equal to the amount of the expense
16 or loss (including expenses incurred by the insurance
17 company) that would have been taken into account as a
18 deduction for federal income tax purposes if the
19 expense or loss had been uninsured. If a taxpayer
20 makes the election provided for by this subparagraph
21 (T), the insurer to which the premiums were paid must
22 add back to income the amount subtracted by the
23 taxpayer pursuant to this subparagraph (T). This
24 subparagraph (T) is exempt from the provisions of
25 Section 250.

SB2358- 92 -LRB102 10763 HLH 16092 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

SB2358- 93 -LRB102 10763 HLH 16092 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

SB2358- 94 -LRB102 10763 HLH 16092 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

SB2358- 95 -LRB102 10763 HLH 16092 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

SB2358- 96 -LRB102 10763 HLH 16092 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

SB2358- 97 -LRB102 10763 HLH 16092 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

SB2358- 98 -LRB102 10763 HLH 16092 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.

SB2358- 99 -LRB102 10763 HLH 16092 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 (g-5) For taxable years beginning on or after January 1,
82022, in calculating the taxpayer's base income, the
9taxpayer's federal adjusted gross income shall also be
10modified to exclude the portion of the income or loss received
11from a trade or business conducted within and without Illinois
12or from a pass-through entity conducting business within and
13without Illinois that is not derived from or connected with
14Illinois sources as determined in the provisions in Article 3
15of this Act. This subsection (g-5) is exempt from the
16provisions of Section 250.
17 (h) Legislative intention. Except as expressly provided by
18this Section there shall be no modifications or limitations on
19the amounts of income, gain, loss or deduction taken into
20account in determining gross income, adjusted gross income or
21taxable income for federal income tax purposes for the taxable
22year, or in the amount of such items entering into the
23computation of base income and net income under this Act for

SB2358- 100 -LRB102 10763 HLH 16092 b
1such taxable year, whether in respect of property values as of
2August 1, 1969 or otherwise.
3(Source: P.A. 100-22, eff. 7-6-17; 100-905, eff. 8-17-18;
4101-9, eff. 6-5-19; 101-81, eff. 7-12-19; revised 9-20-19.)
5 (35 ILCS 5/601) (from Ch. 120, par. 6-601)
6 Sec. 601. Payment on due date of return.
7 (a) In general. Every taxpayer required to file a return
8under this Act shall, without assessment, notice or demand,
9pay any tax due thereon to the Department, at the place fixed
10for filing, on or before the date fixed for filing such return
11(determined without regard to any extension of time for filing
12the return) pursuant to regulations prescribed by the
13Department. If, however, the due date for payment of a
14taxpayer's federal income tax liability for a tax year (as
15provided in the Internal Revenue Code or by Treasury
16regulation, or as extended by the Internal Revenue Service) is
17later than the date fixed for filing the taxpayer's Illinois
18income tax return for that tax year, the Department may, by
19rule, prescribe a due date for payment that is not later than
20the due date for payment of the taxpayer's federal income tax
21liability. For purposes of the Illinois Administrative
22Procedure Act, the adoption of rules to prescribe a later due
23date for payment shall be deemed an emergency and necessary
24for the public interest, safety, and welfare.
25 (b) Amount payable. In making payment as provided in this

SB2358- 101 -LRB102 10763 HLH 16092 b
1section there shall remain payable only the balance of such
2tax remaining due after giving effect to the following:
3 (1) Withheld tax. Any amount withheld during any
4 calendar year pursuant to Article 7 from compensation paid
5 to a taxpayer shall be deemed to have been paid on account
6 of any tax imposed by subsections 201(a) and (b) of this
7 Act on such taxpayer for his taxable year beginning in
8 such calendar year. If more than one taxable year begins
9 in a calendar year, such amount shall be deemed to have
10 been paid on account of such tax for the last taxable year
11 so beginning.
12 (2) Estimated and tentative tax payments. Any amount
13 of estimated tax paid by a taxpayer pursuant to Article 8
14 for a taxable year shall be deemed to have been paid on
15 account of the tax imposed by this Act for such taxable
16 year.
17 (3) Foreign tax. For taxable years beginning prior to
18 January 1, 2022, the The aggregate amount of tax which is
19 imposed upon or measured by income and which is paid by a
20 resident for a taxable year to another state or states on
21 income which is also subject to the tax imposed by
22 subsections 201(a) and (b) of this Act shall be credited
23 against the tax imposed by subsections 201(a) and (b)
24 otherwise due under this Act for such taxable year. For
25 taxable years ending prior to December 31, 2009 but
26 beginning prior to January 1, 2022, the aggregate credit

SB2358- 102 -LRB102 10763 HLH 16092 b
1 provided under this paragraph shall not exceed that amount
2 which bears the same ratio to the tax imposed by
3 subsections 201(a) and (b) otherwise due under this Act as
4 the amount of the taxpayer's base income subject to tax
5 both by such other state or states and by this State bears
6 to his total base income subject to tax by this State for
7 the taxable year. For taxable years ending on or after
8 December 31, 2009 but beginning prior to January 1, 2022,
9 the credit provided under this paragraph for tax paid to
10 other states shall not exceed that amount which bears the
11 same ratio to the tax imposed by subsections 201(a) and
12 (b) otherwise due under this Act as the amount of the
13 taxpayer's base income that would be allocated or
14 apportioned to other states if all other states had
15 adopted the provisions in Article 3 of this Act bears to
16 the taxpayer's total base income subject to tax by this
17 State for the taxable year. This subsection is exempt from
18 the 30-day threshold set forth in subparagraph (iii) of
19 paragraph (B) of item (2) of subsection (a) of Section
20 304. The credit provided by this paragraph shall not be
21 allowed if any creditable tax was deducted in determining
22 base income for the taxable year. Any person claiming such
23 credit shall attach a statement in support thereof and
24 shall notify the Director of any refund or reductions in
25 the amount of tax claimed as a credit hereunder all in such
26 manner and at such time as the Department shall by

SB2358- 103 -LRB102 10763 HLH 16092 b
1 regulations prescribe.
2 (4) Accumulation and capital gain distributions. If
3 the net income of a taxpayer includes amounts included in
4 his base income by reason of Section 667 of the Internal
5 Revenue Code (relating to accumulation and capital gain
6 distributions by a trust, respectively), the tax imposed
7 on such taxpayer by this Act shall be credited with his pro
8 rata portion of the taxes imposed by this Act on such trust
9 for preceding taxable years which would not have been
10 payable for such preceding years if the trust had in fact
11 made distributions to its beneficiaries at the times and
12 in the amounts specified in Sections 666 and 669 of the
13 Internal Revenue Code. The credit provided by this
14 paragraph shall not reduce the tax otherwise due from the
15 taxpayer to an amount less than that which would be due if
16 the amounts included by reason of Section 667 of the
17 Internal Revenue Code were excluded from his or her base
18 income.
19 (c) Cross reference. For application against tax due of
20overpayments of tax for a prior year, see Section 909.
21(Source: P.A. 101-585, eff. 8-26-19.)
22 Section 99. Effective date. This Act takes effect upon
23becoming law.
feedback