Bill Text: IL SB3456 | 2021-2022 | 102nd General Assembly | Introduced

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Bill Title: Amends the Illinois Income Tax Act. Removes a provision for taxable years ending on or after December 31, 2021 and prior to December 31, 2024 limiting the net loss carryover deduction to $100,000. Effective immediately.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Introduced - Dead) 2022-02-16 - Added as Co-Sponsor Sen. Chapin Rose [SB3456 Detail]

Download: Illinois-2021-SB3456-Introduced.html

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102ND GENERAL ASSEMBLY State of Illinois 2021 and 2022 SB3456 Introduced 1/18/2022, by Sen. Brian W. Stewart SYNOPSIS AS INTRODUCED:
35 ILCS 5/207 from Ch. 120, par. 2-207
Amends the Illinois Income Tax Act. Removes a provision for taxable years ending on or after December 31, 2021 and prior to December 31, 2024 limiting the net loss carryover deduction to $100,000. Effective immediately.
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A BILL FOR
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AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Income Tax Act is amended by
changing Section 207 as follows:
(35 ILCS 5/207) (from Ch. 120, par. 2-207)
Sec. 207. Net Losses.
(a) If after applying all of the (i) modifications
provided for in paragraph (2) of Section 203(b), paragraph (2)
of Section 203(c) and paragraph (2) of Section 203(d) and (ii)
the allocation and apportionment provisions of Article 3 of
this Act and subsection (c) of this Section, the taxpayer's
net income results in a loss;
(1) for any taxable year ending prior to December 31,
1999, such loss shall be allowed as a carryover or
carryback deduction in the manner allowed under Section
172 of the Internal Revenue Code;
(2) for any taxable year ending on or after December
31, 1999 and prior to December 31, 2003, such loss shall be
allowed as a carryback to each of the 2 taxable years
preceding the taxable year of such loss and shall be a net
operating loss carryover to each of the 20 taxable years
following the taxable year of such loss;

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(3) for any taxable year ending on or after December
31, 2003 and prior to December 31, 2021, such loss shall be
allowed as a net operating loss carryover to each of the 12
taxable years following the taxable year of such loss,
except as provided in subsection (d); and
(4) for any taxable year ending on or after December
31, 2021, and for any net loss incurred in a taxable year
prior to a taxable year ending on or after December 31,
2021 for which the statute of limitation for utilization
of such net loss has not expired, such loss shall be
allowed as a net operating loss carryover to each of the 20
taxable years following the taxable year of such loss,
except as provided in subsection (d).
(a-5) Election to relinquish carryback and order of
application of losses.
(A) For losses incurred in tax years ending prior
to December 31, 2003, the taxpayer may elect to
relinquish the entire carryback period with respect to
such loss. Such election shall be made in the form and
manner prescribed by the Department and shall be made
by the due date (including extensions of time) for
filing the taxpayer's return for the taxable year in
which such loss is incurred, and such election, once
made, shall be irrevocable.
(B) The entire amount of such loss shall be
carried to the earliest taxable year to which such

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loss may be carried. The amount of such loss which
shall be carried to each of the other taxable years
shall be the excess, if any, of the amount of such loss
over the sum of the deductions for carryback or
carryover of such loss allowable for each of the prior
taxable years to which such loss may be carried.
(b) Any loss determined under subsection (a) of this
Section must be carried back or carried forward in the same
manner for purposes of subsections (a) and (b) of Section 201
of this Act as for purposes of subsections (c) and (d) of
Section 201 of this Act.
(c) Notwithstanding any other provision of this Act, for
each taxable year ending on or after December 31, 2008, for
purposes of computing the loss for the taxable year under
subsection (a) of this Section and the deduction taken into
account for the taxable year for a net operating loss
carryover under paragraphs (1), (2), and (3) of subsection (a)
of this Section, the loss and net operating loss carryover
shall be reduced in an amount equal to the reduction to the net
operating loss and net operating loss carryover to the taxable
year, respectively, required under Section 108(b)(2)(A) of the
Internal Revenue Code, multiplied by a fraction, the numerator
of which is the amount of discharge of indebtedness income
that is excluded from gross income for the taxable year (but
only if the taxable year ends on or after December 31, 2008)
under Section 108(a) of the Internal Revenue Code and that

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would have been allocated and apportioned to this State under
Article 3 of this Act but for that exclusion, and the
denominator of which is the total amount of discharge of
indebtedness income excluded from gross income under Section
108(a) of the Internal Revenue Code for the taxable year. The
reduction required under this subsection (c) shall be made
after the determination of Illinois net income for the taxable
year in which the indebtedness is discharged.
(d) In the case of a corporation (other than a Subchapter S
corporation), no carryover deduction shall be allowed under
this Section for any taxable year ending after December 31,
2010 and prior to December 31, 2012, and no carryover
deduction shall exceed $100,000 for any taxable year ending on
or after December 31, 2012 and prior to December 31, 2014 and
for any taxable year ending on or after December 31, 2021 and
prior to December 31, 2024; provided that, for purposes of
determining the taxable years to which a net loss may be
carried under subsection (a) of this Section, no taxable year
for which a deduction is disallowed under this subsection, or
for which the deduction would exceed $100,000 if not for this
subsection, shall be counted.
(e) In the case of a residual interest holder in a real
estate mortgage investment conduit subject to Section 860E of
the Internal Revenue Code, the net loss in subsection (a)
shall be equal to:
(1) the amount computed under subsection (a), without

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regard to this subsection (e), or if that amount is
positive, zero;
(2) minus an amount equal to the amount computed under
subsection (a), without regard to this subsection (e),
minus the amount that would be computed under subsection
(a) if the taxpayer's federal taxable income were computed
without regard to Section 860E of the Internal Revenue
Code and without regard to this subsection (e).
The modification in this subsection (e) is exempt from the
provisions of Section 250.
(Source: P.A. 102-16, eff. 6-17-21; 102-669, eff. 11-16-21.)
Section 99. Effective date. This Act takes effect upon
becoming law.