Illinois 2023-2024 Regular Session

Illinois House Bill HB2978 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB2978 Introduced , by Rep. Adam M. Niemerg SYNOPSIS AS INTRODUCED: 35 ILCS 5/201 Amends the Illinois Income Tax Act. Reduces the rate of tax on corporations from 7% to 5.5%. Effective immediately. LRB103 25945 HLH 52297 b A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB2978 Introduced , by Rep. Adam M. Niemerg SYNOPSIS AS INTRODUCED: 35 ILCS 5/201 35 ILCS 5/201 Amends the Illinois Income Tax Act. Reduces the rate of tax on corporations from 7% to 5.5%. Effective immediately. LRB103 25945 HLH 52297 b LRB103 25945 HLH 52297 b A BILL FOR
2	2	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB2978 Introduced , by Rep. Adam M. Niemerg SYNOPSIS AS INTRODUCED:
3	3	35 ILCS 5/201 35 ILCS 5/201
4	4	35 ILCS 5/201
5	5	Amends the Illinois Income Tax Act. Reduces the rate of tax on corporations from 7% to 5.5%. Effective immediately.
6	6	LRB103 25945 HLH 52297 b LRB103 25945 HLH 52297 b
7	7	LRB103 25945 HLH 52297 b
8	8	A BILL FOR
9	9	HB2978LRB103 25945 HLH 52297 b HB2978 LRB103 25945 HLH 52297 b
10	10	HB2978 LRB103 25945 HLH 52297 b
11	11	1 AN ACT concerning revenue.
12	12	2 Be it enacted by the People of the State of Illinois,
13	13	3 represented in the General Assembly:
14	14	4 Section 5. The Illinois Income Tax Act is amended by
15	15	5 changing Section 201 as follows:
16	16	6 (35 ILCS 5/201)
17	17	7 Sec. 201. Tax imposed.
18	18	8 (a) In general. A tax measured by net income is hereby
19	19	9 imposed on every individual, corporation, trust and estate for
20	20	10 each taxable year ending after July 31, 1969 on the privilege
21	21	11 of earning or receiving income in or as a resident of this
22	22	12 State. Such tax shall be in addition to all other occupation or
23	23	13 privilege taxes imposed by this State or by any municipal
24	24	14 corporation or political subdivision thereof.
25	25	15 (b) Rates. The tax imposed by subsection (a) of this
26	26	16 Section shall be determined as follows, except as adjusted by
27	27	17 subsection (d-1):
28	28	18 (1) In the case of an individual, trust or estate, for
29	29	19 taxable years ending prior to July 1, 1989, an amount
30	30	20 equal to 2 1/2% of the taxpayer's net income for the
31	31	21 taxable year.
32	32	22 (2) In the case of an individual, trust or estate, for
33	33	23 taxable years beginning prior to July 1, 1989 and ending
34	34
35	35
36	36
37	37	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB2978 Introduced , by Rep. Adam M. Niemerg SYNOPSIS AS INTRODUCED:
38	38	35 ILCS 5/201 35 ILCS 5/201
39	39	35 ILCS 5/201
40	40	Amends the Illinois Income Tax Act. Reduces the rate of tax on corporations from 7% to 5.5%. Effective immediately.
41	41	LRB103 25945 HLH 52297 b LRB103 25945 HLH 52297 b
42	42	LRB103 25945 HLH 52297 b
43	43	A BILL FOR
44	44
45	45
46	46
47	47
48	48
49	49	35 ILCS 5/201
50	50
51	51
52	52
53	53	LRB103 25945 HLH 52297 b
54	54
55	55
56	56
57	57
58	58
59	59
60	60
61	61
62	62
63	63	HB2978 LRB103 25945 HLH 52297 b
64	64
65	65
66	66	HB2978- 2 -LRB103 25945 HLH 52297 b HB2978 - 2 - LRB103 25945 HLH 52297 b
67	67	HB2978 - 2 - LRB103 25945 HLH 52297 b
68	68	1 after June 30, 1989, an amount equal to the sum of (i) 2
69	69	2 1/2% of the taxpayer's net income for the period prior to
70	70	3 July 1, 1989, as calculated under Section 202.3, and (ii)
71	71	4 3% of the taxpayer's net income for the period after June
72	72	5 30, 1989, as calculated under Section 202.3.
73	73	6 (3) In the case of an individual, trust or estate, for
74	74	7 taxable years beginning after June 30, 1989, and ending
75	75	8 prior to January 1, 2011, an amount equal to 3% of the
76	76	9 taxpayer's net income for the taxable year.
77	77	10 (4) In the case of an individual, trust, or estate,
78	78	11 for taxable years beginning prior to January 1, 2011, and
79	79	12 ending after December 31, 2010, an amount equal to the sum
80	80	13 of (i) 3% of the taxpayer's net income for the period prior
81	81	14 to January 1, 2011, as calculated under Section 202.5, and
82	82	15 (ii) 5% of the taxpayer's net income for the period after
83	83	16 December 31, 2010, as calculated under Section 202.5.
84	84	17 (5) In the case of an individual, trust, or estate,
85	85	18 for taxable years beginning on or after January 1, 2011,
86	86	19 and ending prior to January 1, 2015, an amount equal to 5%
87	87	20 of the taxpayer's net income for the taxable year.
88	88	21 (5.1) In the case of an individual, trust, or estate,
89	89	22 for taxable years beginning prior to January 1, 2015, and
90	90	23 ending after December 31, 2014, an amount equal to the sum
91	91	24 of (i) 5% of the taxpayer's net income for the period prior
92	92	25 to January 1, 2015, as calculated under Section 202.5, and
93	93	26 (ii) 3.75% of the taxpayer's net income for the period
94	94
95	95
96	96
97	97
98	98
99	99	HB2978 - 2 - LRB103 25945 HLH 52297 b
100	100
101	101
102	102	HB2978- 3 -LRB103 25945 HLH 52297 b HB2978 - 3 - LRB103 25945 HLH 52297 b
103	103	HB2978 - 3 - LRB103 25945 HLH 52297 b
104	104	1 after December 31, 2014, as calculated under Section
105	105	2 202.5.
106	106	3 (5.2) In the case of an individual, trust, or estate,
107	107	4 for taxable years beginning on or after January 1, 2015,
108	108	5 and ending prior to July 1, 2017, an amount equal to 3.75%
109	109	6 of the taxpayer's net income for the taxable year.
110	110	7 (5.3) In the case of an individual, trust, or estate,
111	111	8 for taxable years beginning prior to July 1, 2017, and
112	112	9 ending after June 30, 2017, an amount equal to the sum of
113	113	10 (i) 3.75% of the taxpayer's net income for the period
114	114	11 prior to July 1, 2017, as calculated under Section 202.5,
115	115	12 and (ii) 4.95% of the taxpayer's net income for the period
116	116	13 after June 30, 2017, as calculated under Section 202.5.
117	117	14 (5.4) In the case of an individual, trust, or estate,
118	118	15 for taxable years beginning on or after July 1, 2017, an
119	119	16 amount equal to 4.95% of the taxpayer's net income for the
120	120	17 taxable year.
121	121	18 (6) In the case of a corporation, for taxable years
122	122	19 ending prior to July 1, 1989, an amount equal to 4% of the
123	123	20 taxpayer's net income for the taxable year.
124	124	21 (7) In the case of a corporation, for taxable years
125	125	22 beginning prior to July 1, 1989 and ending after June 30,
126	126	23 1989, an amount equal to the sum of (i) 4% of the
127	127	24 taxpayer's net income for the period prior to July 1,
128	128	25 1989, as calculated under Section 202.3, and (ii) 4.8% of
129	129	26 the taxpayer's net income for the period after June 30,
130	130
131	131
132	132
133	133
134	134
135	135	HB2978 - 3 - LRB103 25945 HLH 52297 b
136	136
137	137
138	138	HB2978- 4 -LRB103 25945 HLH 52297 b HB2978 - 4 - LRB103 25945 HLH 52297 b
139	139	HB2978 - 4 - LRB103 25945 HLH 52297 b
140	140	1 1989, as calculated under Section 202.3.
141	141	2 (8) In the case of a corporation, for taxable years
142	142	3 beginning after June 30, 1989, and ending prior to January
143	143	4 1, 2011, an amount equal to 4.8% of the taxpayer's net
144	144	5 income for the taxable year.
145	145	6 (9) In the case of a corporation, for taxable years
146	146	7 beginning prior to January 1, 2011, and ending after
147	147	8 December 31, 2010, an amount equal to the sum of (i) 4.8%
148	148	9 of the taxpayer's net income for the period prior to
149	149	10 January 1, 2011, as calculated under Section 202.5, and
150	150	11 (ii) 7% of the taxpayer's net income for the period after
151	151	12 December 31, 2010, as calculated under Section 202.5.
152	152	13 (10) In the case of a corporation, for taxable years
153	153	14 beginning on or after January 1, 2011, and ending prior to
154	154	15 January 1, 2015, an amount equal to 7% of the taxpayer's
155	155	16 net income for the taxable year.
156	156	17 (11) In the case of a corporation, for taxable years
157	157	18 beginning prior to January 1, 2015, and ending after
158	158	19 December 31, 2014, an amount equal to the sum of (i) 7% of
159	159	20 the taxpayer's net income for the period prior to January
160	160	21 1, 2015, as calculated under Section 202.5, and (ii) 5.25%
161	161	22 of the taxpayer's net income for the period after December
162	162	23 31, 2014, as calculated under Section 202.5.
163	163	24 (12) In the case of a corporation, for taxable years
164	164	25 beginning on or after January 1, 2015, and ending prior to
165	165	26 July 1, 2017, an amount equal to 5.25% of the taxpayer's
166	166
167	167
168	168
169	169
170	170
171	171	HB2978 - 4 - LRB103 25945 HLH 52297 b
172	172
173	173
174	174	HB2978- 5 -LRB103 25945 HLH 52297 b HB2978 - 5 - LRB103 25945 HLH 52297 b
175	175	HB2978 - 5 - LRB103 25945 HLH 52297 b
176	176	1 net income for the taxable year.
177	177	2 (13) In the case of a corporation, for taxable years
178	178	3 beginning prior to July 1, 2017, and ending after June 30,
179	179	4 2017, an amount equal to the sum of (i) 5.25% of the
180	180	5 taxpayer's net income for the period prior to July 1,
181	181	6 2017, as calculated under Section 202.5, and (ii) 7% of
182	182	7 the taxpayer's net income for the period after June 30,
183	183	8 2017, as calculated under Section 202.5.
184	184	9 (14) In the case of a corporation, for taxable years
185	185	10 beginning on or after July 1, 2017 and ending prior to
186	186	11 January 1, 2023, an amount equal to 7% of the taxpayer's
187	187	12 net income for the taxable year.
188	188	13 (15) In the case of a corporation, for taxable years
189	189	14 beginning prior to January 1, 2023, and ending after December
190	190	15 31, 2022, an amount equal to the sum of (i) 7% of the
191	191	16 taxpayer's net income for the period prior to January 1, 2023,
192	192	17 as calculated under Section 202.5, and (ii) 5.5% of the
193	193	18 taxpayer's net income for the period after December 31, 2022,
194	194	19 as calculated under Section 202.5.
195	195	20 (16) In the case of a corporation, for taxable years
196	196	21 beginning on or after January 1, 2023, an amount equal to 5.5%
197	197	22 of the taxpayer's net income for the taxable year.
198	198	23 The rates under this subsection (b) are subject to the
199	199	24 provisions of Section 201.5.
200	200	25 (b-5) Surcharge; sale or exchange of assets, properties,
201	201	26 and intangibles of organization gaming licensees. For each of
202	202
203	203
204	204
205	205
206	206
207	207	HB2978 - 5 - LRB103 25945 HLH 52297 b
208	208
209	209
210	210	HB2978- 6 -LRB103 25945 HLH 52297 b HB2978 - 6 - LRB103 25945 HLH 52297 b
211	211	HB2978 - 6 - LRB103 25945 HLH 52297 b
212	212	1 taxable years 2019 through 2027, a surcharge is imposed on all
213	213	2 taxpayers on income arising from the sale or exchange of
214	214	3 capital assets, depreciable business property, real property
215	215	4 used in the trade or business, and Section 197 intangibles (i)
216	216	5 of an organization licensee under the Illinois Horse Racing
217	217	6 Act of 1975 and (ii) of an organization gaming licensee under
218	218	7 the Illinois Gambling Act. The amount of the surcharge is
219	219	8 equal to the amount of federal income tax liability for the
220	220	9 taxable year attributable to those sales and exchanges. The
221	221	10 surcharge imposed shall not apply if:
222	222	11 (1) the organization gaming license, organization
223	223	12 license, or racetrack property is transferred as a result
224	224	13 of any of the following:
225	225	14 (A) bankruptcy, a receivership, or a debt
226	226	15 adjustment initiated by or against the initial
227	227	16 licensee or the substantial owners of the initial
228	228	17 licensee;
229	229	18 (B) cancellation, revocation, or termination of
230	230	19 any such license by the Illinois Gaming Board or the
231	231	20 Illinois Racing Board;
232	232	21 (C) a determination by the Illinois Gaming Board
233	233	22 that transfer of the license is in the best interests
234	234	23 of Illinois gaming;
235	235	24 (D) the death of an owner of the equity interest in
236	236	25 a licensee;
237	237	26 (E) the acquisition of a controlling interest in
238	238
239	239
240	240
241	241
242	242
243	243	HB2978 - 6 - LRB103 25945 HLH 52297 b
244	244
245	245
246	246	HB2978- 7 -LRB103 25945 HLH 52297 b HB2978 - 7 - LRB103 25945 HLH 52297 b
247	247	HB2978 - 7 - LRB103 25945 HLH 52297 b
248	248	1 the stock or substantially all of the assets of a
249	249	2 publicly traded company;
250	250	3 (F) a transfer by a parent company to a wholly
251	251	4 owned subsidiary; or
252	252	5 (G) the transfer or sale to or by one person to
253	253	6 another person where both persons were initial owners
254	254	7 of the license when the license was issued; or
255	255	8 (2) the controlling interest in the organization
256	256	9 gaming license, organization license, or racetrack
257	257	10 property is transferred in a transaction to lineal
258	258	11 descendants in which no gain or loss is recognized or as a
259	259	12 result of a transaction in accordance with Section 351 of
260	260	13 the Internal Revenue Code in which no gain or loss is
261	261	14 recognized; or
262	262	15 (3) live horse racing was not conducted in 2010 at a
263	263	16 racetrack located within 3 miles of the Mississippi River
264	264	17 under a license issued pursuant to the Illinois Horse
265	265	18 Racing Act of 1975.
266	266	19 The transfer of an organization gaming license,
267	267	20 organization license, or racetrack property by a person other
268	268	21 than the initial licensee to receive the organization gaming
269	269	22 license is not subject to a surcharge. The Department shall
270	270	23 adopt rules necessary to implement and administer this
271	271	24 subsection.
272	272	25 (c) Personal Property Tax Replacement Income Tax.
273	273	26 Beginning on July 1, 1979 and thereafter, in addition to such
274	274
275	275
276	276
277	277
278	278
279	279	HB2978 - 7 - LRB103 25945 HLH 52297 b
280	280
281	281
282	282	HB2978- 8 -LRB103 25945 HLH 52297 b HB2978 - 8 - LRB103 25945 HLH 52297 b
283	283	HB2978 - 8 - LRB103 25945 HLH 52297 b
284	284	1 income tax, there is also hereby imposed the Personal Property
285	285	2 Tax Replacement Income Tax measured by net income on every
286	286	3 corporation (including Subchapter S corporations), partnership
287	287	4 and trust, for each taxable year ending after June 30, 1979.
288	288	5 Such taxes are imposed on the privilege of earning or
289	289	6 receiving income in or as a resident of this State. The
290	290	7 Personal Property Tax Replacement Income Tax shall be in
291	291	8 addition to the income tax imposed by subsections (a) and (b)
292	292	9 of this Section and in addition to all other occupation or
293	293	10 privilege taxes imposed by this State or by any municipal
294	294	11 corporation or political subdivision thereof.
295	295	12 (d) Additional Personal Property Tax Replacement Income
296	296	13 Tax Rates. The personal property tax replacement income tax
297	297	14 imposed by this subsection and subsection (c) of this Section
298	298	15 in the case of a corporation, other than a Subchapter S
299	299	16 corporation and except as adjusted by subsection (d-1), shall
300	300	17 be an additional amount equal to 2.85% of such taxpayer's net
301	301	18 income for the taxable year, except that beginning on January
302	302	19 1, 1981, and thereafter, the rate of 2.85% specified in this
303	303	20 subsection shall be reduced to 2.5%, and in the case of a
304	304	21 partnership, trust or a Subchapter S corporation shall be an
305	305	22 additional amount equal to 1.5% of such taxpayer's net income
306	306	23 for the taxable year.
307	307	24 (d-1) Rate reduction for certain foreign insurers. In the
308	308	25 case of a foreign insurer, as defined by Section 35A-5 of the
309	309	26 Illinois Insurance Code, whose state or country of domicile
310	310
311	311
312	312
313	313
314	314
315	315	HB2978 - 8 - LRB103 25945 HLH 52297 b
316	316
317	317
318	318	HB2978- 9 -LRB103 25945 HLH 52297 b HB2978 - 9 - LRB103 25945 HLH 52297 b
319	319	HB2978 - 9 - LRB103 25945 HLH 52297 b
320	320	1 imposes on insurers domiciled in Illinois a retaliatory tax
321	321	2 (excluding any insurer whose premiums from reinsurance assumed
322	322	3 are 50% or more of its total insurance premiums as determined
323	323	4 under paragraph (2) of subsection (b) of Section 304, except
324	324	5 that for purposes of this determination premiums from
325	325	6 reinsurance do not include premiums from inter-affiliate
326	326	7 reinsurance arrangements), beginning with taxable years ending
327	327	8 on or after December 31, 1999, the sum of the rates of tax
328	328	9 imposed by subsections (b) and (d) shall be reduced (but not
329	329	10 increased) to the rate at which the total amount of tax imposed
330	330	11 under this Act, net of all credits allowed under this Act,
331	331	12 shall equal (i) the total amount of tax that would be imposed
332	332	13 on the foreign insurer's net income allocable to Illinois for
333	333	14 the taxable year by such foreign insurer's state or country of
334	334	15 domicile if that net income were subject to all income taxes
335	335	16 and taxes measured by net income imposed by such foreign
336	336	17 insurer's state or country of domicile, net of all credits
337	337	18 allowed or (ii) a rate of zero if no such tax is imposed on
338	338	19 such income by the foreign insurer's state of domicile. For
339	339	20 the purposes of this subsection (d-1), an inter-affiliate
340	340	21 includes a mutual insurer under common management.
341	341	22 (1) For the purposes of subsection (d-1), in no event
342	342	23 shall the sum of the rates of tax imposed by subsections
343	343	24 (b) and (d) be reduced below the rate at which the sum of:
344	344	25 (A) the total amount of tax imposed on such
345	345	26 foreign insurer under this Act for a taxable year, net
346	346
347	347
348	348
349	349
350	350
351	351	HB2978 - 9 - LRB103 25945 HLH 52297 b
352	352
353	353
354	354	HB2978- 10 -LRB103 25945 HLH 52297 b HB2978 - 10 - LRB103 25945 HLH 52297 b
355	355	HB2978 - 10 - LRB103 25945 HLH 52297 b
356	356	1 of all credits allowed under this Act, plus
357	357	2 (B) the privilege tax imposed by Section 409 of
358	358	3 the Illinois Insurance Code, the fire insurance
359	359	4 company tax imposed by Section 12 of the Fire
360	360	5 Investigation Act, and the fire department taxes
361	361	6 imposed under Section 11-10-1 of the Illinois
362	362	7 Municipal Code,
363	363	8 equals 1.25% for taxable years ending prior to December
364	364	9 31, 2003, or 1.75% for taxable years ending on or after
365	365	10 December 31, 2003, of the net taxable premiums written for
366	366	11 the taxable year, as described by subsection (1) of
367	367	12 Section 409 of the Illinois Insurance Code. This paragraph
368	368	13 will in no event increase the rates imposed under
369	369	14 subsections (b) and (d).
370	370	15 (2) Any reduction in the rates of tax imposed by this
371	371	16 subsection shall be applied first against the rates
372	372	17 imposed by subsection (b) and only after the tax imposed
373	373	18 by subsection (a) net of all credits allowed under this
374	374	19 Section other than the credit allowed under subsection (i)
375	375	20 has been reduced to zero, against the rates imposed by
376	376	21 subsection (d).
377	377	22 This subsection (d-1) is exempt from the provisions of
378	378	23 Section 250.
379	379	24 (e) Investment credit. A taxpayer shall be allowed a
380	380	25 credit against the Personal Property Tax Replacement Income
381	381	26 Tax for investment in qualified property.
382	382
383	383
384	384
385	385
386	386
387	387	HB2978 - 10 - LRB103 25945 HLH 52297 b
388	388
389	389
390	390	HB2978- 11 -LRB103 25945 HLH 52297 b HB2978 - 11 - LRB103 25945 HLH 52297 b
391	391	HB2978 - 11 - LRB103 25945 HLH 52297 b
392	392	1 (1) A taxpayer shall be allowed a credit equal to .5%
393	393	2 of the basis of qualified property placed in service
394	394	3 during the taxable year, provided such property is placed
395	395	4 in service on or after July 1, 1984. There shall be allowed
396	396	5 an additional credit equal to .5% of the basis of
397	397	6 qualified property placed in service during the taxable
398	398	7 year, provided such property is placed in service on or
399	399	8 after July 1, 1986, and the taxpayer's base employment
400	400	9 within Illinois has increased by 1% or more over the
401	401	10 preceding year as determined by the taxpayer's employment
402	402	11 records filed with the Illinois Department of Employment
403	403	12 Security. Taxpayers who are new to Illinois shall be
404	404	13 deemed to have met the 1% growth in base employment for the
405	405	14 first year in which they file employment records with the
406	406	15 Illinois Department of Employment Security. The provisions
407	407	16 added to this Section by Public Act 85-1200 (and restored
408	408	17 by Public Act 87-895) shall be construed as declaratory of
409	409	18 existing law and not as a new enactment. If, in any year,
410	410	19 the increase in base employment within Illinois over the
411	411	20 preceding year is less than 1%, the additional credit
412	412	21 shall be limited to that percentage times a fraction, the
413	413	22 numerator of which is .5% and the denominator of which is
414	414	23 1%, but shall not exceed .5%. The investment credit shall
415	415	24 not be allowed to the extent that it would reduce a
416	416	25 taxpayer's liability in any tax year below zero, nor may
417	417	26 any credit for qualified property be allowed for any year
418	418
419	419
420	420
421	421
422	422
423	423	HB2978 - 11 - LRB103 25945 HLH 52297 b
424	424
425	425
426	426	HB2978- 12 -LRB103 25945 HLH 52297 b HB2978 - 12 - LRB103 25945 HLH 52297 b
427	427	HB2978 - 12 - LRB103 25945 HLH 52297 b
428	428	1 other than the year in which the property was placed in
429	429	2 service in Illinois. For tax years ending on or after
430	430	3 December 31, 1987, and on or before December 31, 1988, the
431	431	4 credit shall be allowed for the tax year in which the
432	432	5 property is placed in service, or, if the amount of the
433	433	6 credit exceeds the tax liability for that year, whether it
434	434	7 exceeds the original liability or the liability as later
435	435	8 amended, such excess may be carried forward and applied to
436	436	9 the tax liability of the 5 taxable years following the
437	437	10 excess credit years if the taxpayer (i) makes investments
438	438	11 which cause the creation of a minimum of 2,000 full-time
439	439	12 equivalent jobs in Illinois, (ii) is located in an
440	440	13 enterprise zone established pursuant to the Illinois
441	441	14 Enterprise Zone Act and (iii) is certified by the
442	442	15 Department of Commerce and Community Affairs (now
443	443	16 Department of Commerce and Economic Opportunity) as
444	444	17 complying with the requirements specified in clause (i)
445	445	18 and (ii) by July 1, 1986. The Department of Commerce and
446	446	19 Community Affairs (now Department of Commerce and Economic
447	447	20 Opportunity) shall notify the Department of Revenue of all
448	448	21 such certifications immediately. For tax years ending
449	449	22 after December 31, 1988, the credit shall be allowed for
450	450	23 the tax year in which the property is placed in service,
451	451	24 or, if the amount of the credit exceeds the tax liability
452	452	25 for that year, whether it exceeds the original liability
453	453	26 or the liability as later amended, such excess may be
454	454
455	455
456	456
457	457
458	458
459	459	HB2978 - 12 - LRB103 25945 HLH 52297 b
460	460
461	461
462	462	HB2978- 13 -LRB103 25945 HLH 52297 b HB2978 - 13 - LRB103 25945 HLH 52297 b
463	463	HB2978 - 13 - LRB103 25945 HLH 52297 b
464	464	1 carried forward and applied to the tax liability of the 5
465	465	2 taxable years following the excess credit years. The
466	466	3 credit shall be applied to the earliest year for which
467	467	4 there is a liability. If there is credit from more than one
468	468	5 tax year that is available to offset a liability, earlier
469	469	6 credit shall be applied first.
470	470	7 (2) The term "qualified property" means property
471	471	8 which:
472	472	9 (A) is tangible, whether new or used, including
473	473	10 buildings and structural components of buildings and
474	474	11 signs that are real property, but not including land
475	475	12 or improvements to real property that are not a
476	476	13 structural component of a building such as
477	477	14 landscaping, sewer lines, local access roads, fencing,
478	478	15 parking lots, and other appurtenances;
479	479	16 (B) is depreciable pursuant to Section 167 of the
480	480	17 Internal Revenue Code, except that "3-year property"
481	481	18 as defined in Section 168(c)(2)(A) of that Code is not
482	482	19 eligible for the credit provided by this subsection
483	483	20 (e);
484	484	21 (C) is acquired by purchase as defined in Section
485	485	22 179(d) of the Internal Revenue Code;
486	486	23 (D) is used in Illinois by a taxpayer who is
487	487	24 primarily engaged in manufacturing, or in mining coal
488	488	25 or fluorite, or in retailing, or was placed in service
489	489	26 on or after July 1, 2006 in a River Edge Redevelopment
490	490
491	491
492	492
493	493
494	494
495	495	HB2978 - 13 - LRB103 25945 HLH 52297 b
496	496
497	497
498	498	HB2978- 14 -LRB103 25945 HLH 52297 b HB2978 - 14 - LRB103 25945 HLH 52297 b
499	499	HB2978 - 14 - LRB103 25945 HLH 52297 b
500	500	1 Zone established pursuant to the River Edge
501	501	2 Redevelopment Zone Act; and
502	502	3 (E) has not previously been used in Illinois in
503	503	4 such a manner and by such a person as would qualify for
504	504	5 the credit provided by this subsection (e) or
505	505	6 subsection (f).
506	506	7 (3) For purposes of this subsection (e),
507	507	8 "manufacturing" means the material staging and production
508	508	9 of tangible personal property by procedures commonly
509	509	10 regarded as manufacturing, processing, fabrication, or
510	510	11 assembling which changes some existing material into new
511	511	12 shapes, new qualities, or new combinations. For purposes
512	512	13 of this subsection (e) the term "mining" shall have the
513	513	14 same meaning as the term "mining" in Section 613(c) of the
514	514	15 Internal Revenue Code. For purposes of this subsection
515	515	16 (e), the term "retailing" means the sale of tangible
516	516	17 personal property for use or consumption and not for
517	517	18 resale, or services rendered in conjunction with the sale
518	518	19 of tangible personal property for use or consumption and
519	519	20 not for resale. For purposes of this subsection (e),
520	520	21 "tangible personal property" has the same meaning as when
521	521	22 that term is used in the Retailers' Occupation Tax Act,
522	522	23 and, for taxable years ending after December 31, 2008,
523	523	24 does not include the generation, transmission, or
524	524	25 distribution of electricity.
525	525	26 (4) The basis of qualified property shall be the basis
526	526
527	527
528	528
529	529
530	530
531	531	HB2978 - 14 - LRB103 25945 HLH 52297 b
532	532
533	533
534	534	HB2978- 15 -LRB103 25945 HLH 52297 b HB2978 - 15 - LRB103 25945 HLH 52297 b
535	535	HB2978 - 15 - LRB103 25945 HLH 52297 b
536	536	1 used to compute the depreciation deduction for federal
537	537	2 income tax purposes.
538	538	3 (5) If the basis of the property for federal income
539	539	4 tax depreciation purposes is increased after it has been
540	540	5 placed in service in Illinois by the taxpayer, the amount
541	541	6 of such increase shall be deemed property placed in
542	542	7 service on the date of such increase in basis.
543	543	8 (6) The term "placed in service" shall have the same
544	544	9 meaning as under Section 46 of the Internal Revenue Code.
545	545	10 (7) If during any taxable year, any property ceases to
546	546	11 be qualified property in the hands of the taxpayer within
547	547	12 48 months after being placed in service, or the situs of
548	548	13 any qualified property is moved outside Illinois within 48
549	549	14 months after being placed in service, the Personal
550	550	15 Property Tax Replacement Income Tax for such taxable year
551	551	16 shall be increased. Such increase shall be determined by
552	552	17 (i) recomputing the investment credit which would have
553	553	18 been allowed for the year in which credit for such
554	554	19 property was originally allowed by eliminating such
555	555	20 property from such computation and, (ii) subtracting such
556	556	21 recomputed credit from the amount of credit previously
557	557	22 allowed. For the purposes of this paragraph (7), a
558	558	23 reduction of the basis of qualified property resulting
559	559	24 from a redetermination of the purchase price shall be
560	560	25 deemed a disposition of qualified property to the extent
561	561	26 of such reduction.
562	562
563	563
564	564
565	565
566	566
567	567	HB2978 - 15 - LRB103 25945 HLH 52297 b
568	568
569	569
570	570	HB2978- 16 -LRB103 25945 HLH 52297 b HB2978 - 16 - LRB103 25945 HLH 52297 b
571	571	HB2978 - 16 - LRB103 25945 HLH 52297 b
572	572	1 (8) Unless the investment credit is extended by law,
573	573	2 the basis of qualified property shall not include costs
574	574	3 incurred after December 31, 2018, except for costs
575	575	4 incurred pursuant to a binding contract entered into on or
576	576	5 before December 31, 2018.
577	577	6 (9) Each taxable year ending before December 31, 2000,
578	578	7 a partnership may elect to pass through to its partners
579	579	8 the credits to which the partnership is entitled under
580	580	9 this subsection (e) for the taxable year. A partner may
581	581	10 use the credit allocated to him or her under this
582	582	11 paragraph only against the tax imposed in subsections (c)
583	583	12 and (d) of this Section. If the partnership makes that
584	584	13 election, those credits shall be allocated among the
585	585	14 partners in the partnership in accordance with the rules
586	586	15 set forth in Section 704(b) of the Internal Revenue Code,
587	587	16 and the rules promulgated under that Section, and the
588	588	17 allocated amount of the credits shall be allowed to the
589	589	18 partners for that taxable year. The partnership shall make
590	590	19 this election on its Personal Property Tax Replacement
591	591	20 Income Tax return for that taxable year. The election to
592	592	21 pass through the credits shall be irrevocable.
593	593	22 For taxable years ending on or after December 31,
594	594	23 2000, a partner that qualifies its partnership for a
595	595	24 subtraction under subparagraph (I) of paragraph (2) of
596	596	25 subsection (d) of Section 203 or a shareholder that
597	597	26 qualifies a Subchapter S corporation for a subtraction
598	598
599	599
600	600
601	601
602	602
603	603	HB2978 - 16 - LRB103 25945 HLH 52297 b
604	604
605	605
606	606	HB2978- 17 -LRB103 25945 HLH 52297 b HB2978 - 17 - LRB103 25945 HLH 52297 b
607	607	HB2978 - 17 - LRB103 25945 HLH 52297 b
608	608	1 under subparagraph (S) of paragraph (2) of subsection (b)
609	609	2 of Section 203 shall be allowed a credit under this
610	610	3 subsection (e) equal to its share of the credit earned
611	611	4 under this subsection (e) during the taxable year by the
612	612	5 partnership or Subchapter S corporation, determined in
613	613	6 accordance with the determination of income and
614	614	7 distributive share of income under Sections 702 and 704
615	615	8 and Subchapter S of the Internal Revenue Code. This
616	616	9 paragraph is exempt from the provisions of Section 250.
617	617	10 (f) Investment credit; Enterprise Zone; River Edge
618	618	11 Redevelopment Zone.
619	619	12 (1) A taxpayer shall be allowed a credit against the
620	620	13 tax imposed by subsections (a) and (b) of this Section for
621	621	14 investment in qualified property which is placed in
622	622	15 service in an Enterprise Zone created pursuant to the
623	623	16 Illinois Enterprise Zone Act or, for property placed in
624	624	17 service on or after July 1, 2006, a River Edge
625	625	18 Redevelopment Zone established pursuant to the River Edge
626	626	19 Redevelopment Zone Act. For partners, shareholders of
627	627	20 Subchapter S corporations, and owners of limited liability
628	628	21 companies, if the liability company is treated as a
629	629	22 partnership for purposes of federal and State income
630	630	23 taxation, there shall be allowed a credit under this
631	631	24 subsection (f) to be determined in accordance with the
632	632	25 determination of income and distributive share of income
633	633	26 under Sections 702 and 704 and Subchapter S of the
634	634
635	635
636	636
637	637
638	638
639	639	HB2978 - 17 - LRB103 25945 HLH 52297 b
640	640
641	641
642	642	HB2978- 18 -LRB103 25945 HLH 52297 b HB2978 - 18 - LRB103 25945 HLH 52297 b
643	643	HB2978 - 18 - LRB103 25945 HLH 52297 b
644	644	1 Internal Revenue Code. The credit shall be .5% of the
645	645	2 basis for such property. The credit shall be available
646	646	3 only in the taxable year in which the property is placed in
647	647	4 service in the Enterprise Zone or River Edge Redevelopment
648	648	5 Zone and shall not be allowed to the extent that it would
649	649	6 reduce a taxpayer's liability for the tax imposed by
650	650	7 subsections (a) and (b) of this Section to below zero. For
651	651	8 tax years ending on or after December 31, 1985, the credit
652	652	9 shall be allowed for the tax year in which the property is
653	653	10 placed in service, or, if the amount of the credit exceeds
654	654	11 the tax liability for that year, whether it exceeds the
655	655	12 original liability or the liability as later amended, such
656	656	13 excess may be carried forward and applied to the tax
657	657	14 liability of the 5 taxable years following the excess
658	658	15 credit year. The credit shall be applied to the earliest
659	659	16 year for which there is a liability. If there is credit
660	660	17 from more than one tax year that is available to offset a
661	661	18 liability, the credit accruing first in time shall be
662	662	19 applied first.
663	663	20 (2) The term qualified property means property which:
664	664	21 (A) is tangible, whether new or used, including
665	665	22 buildings and structural components of buildings;
666	666	23 (B) is depreciable pursuant to Section 167 of the
667	667	24 Internal Revenue Code, except that "3-year property"
668	668	25 as defined in Section 168(c)(2)(A) of that Code is not
669	669	26 eligible for the credit provided by this subsection
670	670
671	671
672	672
673	673
674	674
675	675	HB2978 - 18 - LRB103 25945 HLH 52297 b
676	676
677	677
678	678	HB2978- 19 -LRB103 25945 HLH 52297 b HB2978 - 19 - LRB103 25945 HLH 52297 b
679	679	HB2978 - 19 - LRB103 25945 HLH 52297 b
680	680	1 (f);
681	681	2 (C) is acquired by purchase as defined in Section
682	682	3 179(d) of the Internal Revenue Code;
683	683	4 (D) is used in the Enterprise Zone or River Edge
684	684	5 Redevelopment Zone by the taxpayer; and
685	685	6 (E) has not been previously used in Illinois in
686	686	7 such a manner and by such a person as would qualify for
687	687	8 the credit provided by this subsection (f) or
688	688	9 subsection (e).
689	689	10 (3) The basis of qualified property shall be the basis
690	690	11 used to compute the depreciation deduction for federal
691	691	12 income tax purposes.
692	692	13 (4) If the basis of the property for federal income
693	693	14 tax depreciation purposes is increased after it has been
694	694	15 placed in service in the Enterprise Zone or River Edge
695	695	16 Redevelopment Zone by the taxpayer, the amount of such
696	696	17 increase shall be deemed property placed in service on the
697	697	18 date of such increase in basis.
698	698	19 (5) The term "placed in service" shall have the same
699	699	20 meaning as under Section 46 of the Internal Revenue Code.
700	700	21 (6) If during any taxable year, any property ceases to
701	701	22 be qualified property in the hands of the taxpayer within
702	702	23 48 months after being placed in service, or the situs of
703	703	24 any qualified property is moved outside the Enterprise
704	704	25 Zone or River Edge Redevelopment Zone within 48 months
705	705	26 after being placed in service, the tax imposed under
706	706
707	707
708	708
709	709
710	710
711	711	HB2978 - 19 - LRB103 25945 HLH 52297 b
712	712
713	713
714	714	HB2978- 20 -LRB103 25945 HLH 52297 b HB2978 - 20 - LRB103 25945 HLH 52297 b
715	715	HB2978 - 20 - LRB103 25945 HLH 52297 b
716	716	1 subsections (a) and (b) of this Section for such taxable
717	717	2 year shall be increased. Such increase shall be determined
718	718	3 by (i) recomputing the investment credit which would have
719	719	4 been allowed for the year in which credit for such
720	720	5 property was originally allowed by eliminating such
721	721	6 property from such computation, and (ii) subtracting such
722	722	7 recomputed credit from the amount of credit previously
723	723	8 allowed. For the purposes of this paragraph (6), a
724	724	9 reduction of the basis of qualified property resulting
725	725	10 from a redetermination of the purchase price shall be
726	726	11 deemed a disposition of qualified property to the extent
727	727	12 of such reduction.
728	728	13 (7) There shall be allowed an additional credit equal
729	729	14 to 0.5% of the basis of qualified property placed in
730	730	15 service during the taxable year in a River Edge
731	731	16 Redevelopment Zone, provided such property is placed in
732	732	17 service on or after July 1, 2006, and the taxpayer's base
733	733	18 employment within Illinois has increased by 1% or more
734	734	19 over the preceding year as determined by the taxpayer's
735	735	20 employment records filed with the Illinois Department of
736	736	21 Employment Security. Taxpayers who are new to Illinois
737	737	22 shall be deemed to have met the 1% growth in base
738	738	23 employment for the first year in which they file
739	739	24 employment records with the Illinois Department of
740	740	25 Employment Security. If, in any year, the increase in base
741	741	26 employment within Illinois over the preceding year is less
742	742
743	743
744	744
745	745
746	746
747	747	HB2978 - 20 - LRB103 25945 HLH 52297 b
748	748
749	749
750	750	HB2978- 21 -LRB103 25945 HLH 52297 b HB2978 - 21 - LRB103 25945 HLH 52297 b
751	751	HB2978 - 21 - LRB103 25945 HLH 52297 b
752	752	1 than 1%, the additional credit shall be limited to that
753	753	2 percentage times a fraction, the numerator of which is
754	754	3 0.5% and the denominator of which is 1%, but shall not
755	755	4 exceed 0.5%.
756	756	5 (8) For taxable years beginning on or after January 1,
757	757	6 2021, there shall be allowed an Enterprise Zone
758	758	7 construction jobs credit against the taxes imposed under
759	759	8 subsections (a) and (b) of this Section as provided in
760	760	9 Section 13 of the Illinois Enterprise Zone Act.
761	761	10 The credit or credits may not reduce the taxpayer's
762	762	11 liability to less than zero. If the amount of the credit or
763	763	12 credits exceeds the taxpayer's liability, the excess may
764	764	13 be carried forward and applied against the taxpayer's
765	765	14 liability in succeeding calendar years in the same manner
766	766	15 provided under paragraph (4) of Section 211 of this Act.
767	767	16 The credit or credits shall be applied to the earliest
768	768	17 year for which there is a tax liability. If there are
769	769	18 credits from more than one taxable year that are available
770	770	19 to offset a liability, the earlier credit shall be applied
771	771	20 first.
772	772	21 For partners, shareholders of Subchapter S
773	773	22 corporations, and owners of limited liability companies,
774	774	23 if the liability company is treated as a partnership for
775	775	24 the purposes of federal and State income taxation, there
776	776	25 shall be allowed a credit under this Section to be
777	777	26 determined in accordance with the determination of income
778	778
779	779
780	780
781	781
782	782
783	783	HB2978 - 21 - LRB103 25945 HLH 52297 b
784	784
785	785
786	786	HB2978- 22 -LRB103 25945 HLH 52297 b HB2978 - 22 - LRB103 25945 HLH 52297 b
787	787	HB2978 - 22 - LRB103 25945 HLH 52297 b
788	788	1 and distributive share of income under Sections 702 and
789	789	2 704 and Subchapter S of the Internal Revenue Code.
790	790	3 The total aggregate amount of credits awarded under
791	791	4 the Blue Collar Jobs Act (Article 20 of Public Act 101-9)
792	792	5 shall not exceed $20,000,000 in any State fiscal year.
793	793	6 This paragraph (8) is exempt from the provisions of
794	794	7 Section 250.
795	795	8 (g) (Blank).
796	796	9 (h) Investment credit; High Impact Business.
797	797	10 (1) Subject to subsections (b) and (b-5) of Section
798	798	11 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall
799	799	12 be allowed a credit against the tax imposed by subsections
800	800	13 (a) and (b) of this Section for investment in qualified
801	801	14 property which is placed in service by a Department of
802	802	15 Commerce and Economic Opportunity designated High Impact
803	803	16 Business. The credit shall be .5% of the basis for such
804	804	17 property. The credit shall not be available (i) until the
805	805	18 minimum investments in qualified property set forth in
806	806	19 subdivision (a)(3)(A) of Section 5.5 of the Illinois
807	807	20 Enterprise Zone Act have been satisfied or (ii) until the
808	808	21 time authorized in subsection (b-5) of the Illinois
809	809	22 Enterprise Zone Act for entities designated as High Impact
810	810	23 Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
811	811	24 (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
812	812	25 Act, and shall not be allowed to the extent that it would
813	813	26 reduce a taxpayer's liability for the tax imposed by
814	814
815	815
816	816
817	817
818	818
819	819	HB2978 - 22 - LRB103 25945 HLH 52297 b
820	820
821	821
822	822	HB2978- 23 -LRB103 25945 HLH 52297 b HB2978 - 23 - LRB103 25945 HLH 52297 b
823	823	HB2978 - 23 - LRB103 25945 HLH 52297 b
824	824	1 subsections (a) and (b) of this Section to below zero. The
825	825	2 credit applicable to such investments shall be taken in
826	826	3 the taxable year in which such investments have been
827	827	4 completed. The credit for additional investments beyond
828	828	5 the minimum investment by a designated high impact
829	829	6 business authorized under subdivision (a)(3)(A) of Section
830	830	7 5.5 of the Illinois Enterprise Zone Act shall be available
831	831	8 only in the taxable year in which the property is placed in
832	832	9 service and shall not be allowed to the extent that it
833	833	10 would reduce a taxpayer's liability for the tax imposed by
834	834	11 subsections (a) and (b) of this Section to below zero. For
835	835	12 tax years ending on or after December 31, 1987, the credit
836	836	13 shall be allowed for the tax year in which the property is
837	837	14 placed in service, or, if the amount of the credit exceeds
838	838	15 the tax liability for that year, whether it exceeds the
839	839	16 original liability or the liability as later amended, such
840	840	17 excess may be carried forward and applied to the tax
841	841	18 liability of the 5 taxable years following the excess
842	842	19 credit year. The credit shall be applied to the earliest
843	843	20 year for which there is a liability. If there is credit
844	844	21 from more than one tax year that is available to offset a
845	845	22 liability, the credit accruing first in time shall be
846	846	23 applied first.
847	847	24 Changes made in this subdivision (h)(1) by Public Act
848	848	25 88-670 restore changes made by Public Act 85-1182 and
849	849	26 reflect existing law.
850	850
851	851
852	852
853	853
854	854
855	855	HB2978 - 23 - LRB103 25945 HLH 52297 b
856	856
857	857
858	858	HB2978- 24 -LRB103 25945 HLH 52297 b HB2978 - 24 - LRB103 25945 HLH 52297 b
859	859	HB2978 - 24 - LRB103 25945 HLH 52297 b
860	860	1 (2) The term qualified property means property which:
861	861	2 (A) is tangible, whether new or used, including
862	862	3 buildings and structural components of buildings;
863	863	4 (B) is depreciable pursuant to Section 167 of the
864	864	5 Internal Revenue Code, except that "3-year property"
865	865	6 as defined in Section 168(c)(2)(A) of that Code is not
866	866	7 eligible for the credit provided by this subsection
867	867	8 (h);
868	868	9 (C) is acquired by purchase as defined in Section
869	869	10 179(d) of the Internal Revenue Code; and
870	870	11 (D) is not eligible for the Enterprise Zone
871	871	12 Investment Credit provided by subsection (f) of this
872	872	13 Section.
873	873	14 (3) The basis of qualified property shall be the basis
874	874	15 used to compute the depreciation deduction for federal
875	875	16 income tax purposes.
876	876	17 (4) If the basis of the property for federal income
877	877	18 tax depreciation purposes is increased after it has been
878	878	19 placed in service in a federally designated Foreign Trade
879	879	20 Zone or Sub-Zone located in Illinois by the taxpayer, the
880	880	21 amount of such increase shall be deemed property placed in
881	881	22 service on the date of such increase in basis.
882	882	23 (5) The term "placed in service" shall have the same
883	883	24 meaning as under Section 46 of the Internal Revenue Code.
884	884	25 (6) If during any taxable year ending on or before
885	885	26 December 31, 1996, any property ceases to be qualified
886	886
887	887
888	888
889	889
890	890
891	891	HB2978 - 24 - LRB103 25945 HLH 52297 b
892	892
893	893
894	894	HB2978- 25 -LRB103 25945 HLH 52297 b HB2978 - 25 - LRB103 25945 HLH 52297 b
895	895	HB2978 - 25 - LRB103 25945 HLH 52297 b
896	896	1 property in the hands of the taxpayer within 48 months
897	897	2 after being placed in service, or the situs of any
898	898	3 qualified property is moved outside Illinois within 48
899	899	4 months after being placed in service, the tax imposed
900	900	5 under subsections (a) and (b) of this Section for such
901	901	6 taxable year shall be increased. Such increase shall be
902	902	7 determined by (i) recomputing the investment credit which
903	903	8 would have been allowed for the year in which credit for
904	904	9 such property was originally allowed by eliminating such
905	905	10 property from such computation, and (ii) subtracting such
906	906	11 recomputed credit from the amount of credit previously
907	907	12 allowed. For the purposes of this paragraph (6), a
908	908	13 reduction of the basis of qualified property resulting
909	909	14 from a redetermination of the purchase price shall be
910	910	15 deemed a disposition of qualified property to the extent
911	911	16 of such reduction.
912	912	17 (7) Beginning with tax years ending after December 31,
913	913	18 1996, if a taxpayer qualifies for the credit under this
914	914	19 subsection (h) and thereby is granted a tax abatement and
915	915	20 the taxpayer relocates its entire facility in violation of
916	916	21 the explicit terms and length of the contract under
917	917	22 Section 18-183 of the Property Tax Code, the tax imposed
918	918	23 under subsections (a) and (b) of this Section shall be
919	919	24 increased for the taxable year in which the taxpayer
920	920	25 relocated its facility by an amount equal to the amount of
921	921	26 credit received by the taxpayer under this subsection (h).
922	922
923	923
924	924
925	925
926	926
927	927	HB2978 - 25 - LRB103 25945 HLH 52297 b
928	928
929	929
930	930	HB2978- 26 -LRB103 25945 HLH 52297 b HB2978 - 26 - LRB103 25945 HLH 52297 b
931	931	HB2978 - 26 - LRB103 25945 HLH 52297 b
932	932	1 (h-5) High Impact Business construction jobs credit. For
933	933	2 taxable years beginning on or after January 1, 2021, there
934	934	3 shall also be allowed a High Impact Business construction jobs
935	935	4 credit against the tax imposed under subsections (a) and (b)
936	936	5 of this Section as provided in subsections (i) and (j) of
937	937	6 Section 5.5 of the Illinois Enterprise Zone Act.
938	938	7 The credit or credits may not reduce the taxpayer's
939	939	8 liability to less than zero. If the amount of the credit or
940	940	9 credits exceeds the taxpayer's liability, the excess may be
941	941	10 carried forward and applied against the taxpayer's liability
942	942	11 in succeeding calendar years in the manner provided under
943	943	12 paragraph (4) of Section 211 of this Act. The credit or credits
944	944	13 shall be applied to the earliest year for which there is a tax
945	945	14 liability. If there are credits from more than one taxable
946	946	15 year that are available to offset a liability, the earlier
947	947	16 credit shall be applied first.
948	948	17 For partners, shareholders of Subchapter S corporations,
949	949	18 and owners of limited liability companies, if the liability
950	950	19 company is treated as a partnership for the purposes of
951	951	20 federal and State income taxation, there shall be allowed a
952	952	21 credit under this Section to be determined in accordance with
953	953	22 the determination of income and distributive share of income
954	954	23 under Sections 702 and 704 and Subchapter S of the Internal
955	955	24 Revenue Code.
956	956	25 The total aggregate amount of credits awarded under the
957	957	26 Blue Collar Jobs Act (Article 20 of Public Act 101-9) shall not
958	958
959	959
960	960
961	961
962	962
963	963	HB2978 - 26 - LRB103 25945 HLH 52297 b
964	964
965	965
966	966	HB2978- 27 -LRB103 25945 HLH 52297 b HB2978 - 27 - LRB103 25945 HLH 52297 b
967	967	HB2978 - 27 - LRB103 25945 HLH 52297 b
968	968	1 exceed $20,000,000 in any State fiscal year.
969	969	2 This subsection (h-5) is exempt from the provisions of
970	970	3 Section 250.
971	971	4 (i) Credit for Personal Property Tax Replacement Income
972	972	5 Tax. For tax years ending prior to December 31, 2003, a credit
973	973	6 shall be allowed against the tax imposed by subsections (a)
974	974	7 and (b) of this Section for the tax imposed by subsections (c)
975	975	8 and (d) of this Section. This credit shall be computed by
976	976	9 multiplying the tax imposed by subsections (c) and (d) of this
977	977	10 Section by a fraction, the numerator of which is base income
978	978	11 allocable to Illinois and the denominator of which is Illinois
979	979	12 base income, and further multiplying the product by the tax
980	980	13 rate imposed by subsections (a) and (b) of this Section.
981	981	14 Any credit earned on or after December 31, 1986 under this
982	982	15 subsection which is unused in the year the credit is computed
983	983	16 because it exceeds the tax liability imposed by subsections
984	984	17 (a) and (b) for that year (whether it exceeds the original
985	985	18 liability or the liability as later amended) may be carried
986	986	19 forward and applied to the tax liability imposed by
987	987	20 subsections (a) and (b) of the 5 taxable years following the
988	988	21 excess credit year, provided that no credit may be carried
989	989	22 forward to any year ending on or after December 31, 2003. This
990	990	23 credit shall be applied first to the earliest year for which
991	991	24 there is a liability. If there is a credit under this
992	992	25 subsection from more than one tax year that is available to
993	993	26 offset a liability the earliest credit arising under this
994	994
995	995
996	996
997	997
998	998
999	999	HB2978 - 27 - LRB103 25945 HLH 52297 b
1000	1000
1001	1001
1002	1002	HB2978- 28 -LRB103 25945 HLH 52297 b HB2978 - 28 - LRB103 25945 HLH 52297 b
1003	1003	HB2978 - 28 - LRB103 25945 HLH 52297 b
1004	1004	1 subsection shall be applied first.
1005	1005	2 If, during any taxable year ending on or after December
1006	1006	3 31, 1986, the tax imposed by subsections (c) and (d) of this
1007	1007	4 Section for which a taxpayer has claimed a credit under this
1008	1008	5 subsection (i) is reduced, the amount of credit for such tax
1009	1009	6 shall also be reduced. Such reduction shall be determined by
1010	1010	7 recomputing the credit to take into account the reduced tax
1011	1011	8 imposed by subsections (c) and (d). If any portion of the
1012	1012	9 reduced amount of credit has been carried to a different
1013	1013	10 taxable year, an amended return shall be filed for such
1014	1014	11 taxable year to reduce the amount of credit claimed.
1015	1015	12 (j) Training expense credit. Beginning with tax years
1016	1016	13 ending on or after December 31, 1986 and prior to December 31,
1017	1017	14 2003, a taxpayer shall be allowed a credit against the tax
1018	1018	15 imposed by subsections (a) and (b) under this Section for all
1019	1019	16 amounts paid or accrued, on behalf of all persons employed by
1020	1020	17 the taxpayer in Illinois or Illinois residents employed
1021	1021	18 outside of Illinois by a taxpayer, for educational or
1022	1022	19 vocational training in semi-technical or technical fields or
1023	1023	20 semi-skilled or skilled fields, which were deducted from gross
1024	1024	21 income in the computation of taxable income. The credit
1025	1025	22 against the tax imposed by subsections (a) and (b) shall be
1026	1026	23 1.6% of such training expenses. For partners, shareholders of
1027	1027	24 subchapter S corporations, and owners of limited liability
1028	1028	25 companies, if the liability company is treated as a
1029	1029	26 partnership for purposes of federal and State income taxation,
1030	1030
1031	1031
1032	1032
1033	1033
1034	1034
1035	1035	HB2978 - 28 - LRB103 25945 HLH 52297 b
1036	1036
1037	1037
1038	1038	HB2978- 29 -LRB103 25945 HLH 52297 b HB2978 - 29 - LRB103 25945 HLH 52297 b
1039	1039	HB2978 - 29 - LRB103 25945 HLH 52297 b
1040	1040	1 there shall be allowed a credit under this subsection (j) to be
1041	1041	2 determined in accordance with the determination of income and
1042	1042	3 distributive share of income under Sections 702 and 704 and
1043	1043	4 subchapter S of the Internal Revenue Code.
1044	1044	5 Any credit allowed under this subsection which is unused
1045	1045	6 in the year the credit is earned may be carried forward to each
1046	1046	7 of the 5 taxable years following the year for which the credit
1047	1047	8 is first computed until it is used. This credit shall be
1048	1048	9 applied first to the earliest year for which there is a
1049	1049	10 liability. If there is a credit under this subsection from
1050	1050	11 more than one tax year that is available to offset a liability,
1051	1051	12 the earliest credit arising under this subsection shall be
1052	1052	13 applied first. No carryforward credit may be claimed in any
1053	1053	14 tax year ending on or after December 31, 2003.
1054	1054	15 (k) Research and development credit. For tax years ending
1055	1055	16 after July 1, 1990 and prior to December 31, 2003, and
1056	1056	17 beginning again for tax years ending on or after December 31,
1057	1057	18 2004, and ending prior to January 1, 2027, a taxpayer shall be
1058	1058	19 allowed a credit against the tax imposed by subsections (a)
1059	1059	20 and (b) of this Section for increasing research activities in
1060	1060	21 this State. The credit allowed against the tax imposed by
1061	1061	22 subsections (a) and (b) shall be equal to 6 1/2% of the
1062	1062	23 qualifying expenditures for increasing research activities in
1063	1063	24 this State. For partners, shareholders of subchapter S
1064	1064	25 corporations, and owners of limited liability companies, if
1065	1065	26 the liability company is treated as a partnership for purposes
1066	1066
1067	1067
1068	1068
1069	1069
1070	1070
1071	1071	HB2978 - 29 - LRB103 25945 HLH 52297 b
1072	1072
1073	1073
1074	1074	HB2978- 30 -LRB103 25945 HLH 52297 b HB2978 - 30 - LRB103 25945 HLH 52297 b
1075	1075	HB2978 - 30 - LRB103 25945 HLH 52297 b
1076	1076	1 of federal and State income taxation, there shall be allowed a
1077	1077	2 credit under this subsection to be determined in accordance
1078	1078	3 with the determination of income and distributive share of
1079	1079	4 income under Sections 702 and 704 and subchapter S of the
1080	1080	5 Internal Revenue Code.
1081	1081	6 For purposes of this subsection, "qualifying expenditures"
1082	1082	7 means the qualifying expenditures as defined for the federal
1083	1083	8 credit for increasing research activities which would be
1084	1084	9 allowable under Section 41 of the Internal Revenue Code and
1085	1085	10 which are conducted in this State, "qualifying expenditures
1086	1086	11 for increasing research activities in this State" means the
1087	1087	12 excess of qualifying expenditures for the taxable year in
1088	1088	13 which incurred over qualifying expenditures for the base
1089	1089	14 period, "qualifying expenditures for the base period" means
1090	1090	15 the average of the qualifying expenditures for each year in
1091	1091	16 the base period, and "base period" means the 3 taxable years
1092	1092	17 immediately preceding the taxable year for which the
1093	1093	18 determination is being made.
1094	1094	19 Any credit in excess of the tax liability for the taxable
1095	1095	20 year may be carried forward. A taxpayer may elect to have the
1096	1096	21 unused credit shown on its final completed return carried over
1097	1097	22 as a credit against the tax liability for the following 5
1098	1098	23 taxable years or until it has been fully used, whichever
1099	1099	24 occurs first; provided that no credit earned in a tax year
1100	1100	25 ending prior to December 31, 2003 may be carried forward to any
1101	1101	26 year ending on or after December 31, 2003.
1102	1102
1103	1103
1104	1104
1105	1105
1106	1106
1107	1107	HB2978 - 30 - LRB103 25945 HLH 52297 b
1108	1108
1109	1109
1110	1110	HB2978- 31 -LRB103 25945 HLH 52297 b HB2978 - 31 - LRB103 25945 HLH 52297 b
1111	1111	HB2978 - 31 - LRB103 25945 HLH 52297 b
1112	1112	1 If an unused credit is carried forward to a given year from
1113	1113	2 2 or more earlier years, that credit arising in the earliest
1114	1114	3 year will be applied first against the tax liability for the
1115	1115	4 given year. If a tax liability for the given year still
1116	1116	5 remains, the credit from the next earliest year will then be
1117	1117	6 applied, and so on, until all credits have been used or no tax
1118	1118	7 liability for the given year remains. Any remaining unused
1119	1119	8 credit or credits then will be carried forward to the next
1120	1120	9 following year in which a tax liability is incurred, except
1121	1121	10 that no credit can be carried forward to a year which is more
1122	1122	11 than 5 years after the year in which the expense for which the
1123	1123	12 credit is given was incurred.
1124	1124	13 No inference shall be drawn from Public Act 91-644 in
1125	1125	14 construing this Section for taxable years beginning before
1126	1126	15 January 1, 1999.
1127	1127	16 It is the intent of the General Assembly that the research
1128	1128	17 and development credit under this subsection (k) shall apply
1129	1129	18 continuously for all tax years ending on or after December 31,
1130	1130	19 2004 and ending prior to January 1, 2027, including, but not
1131	1131	20 limited to, the period beginning on January 1, 2016 and ending
1132	1132	21 on July 6, 2017 (the effective date of Public Act 100-22). All
1133	1133	22 actions taken in reliance on the continuation of the credit
1134	1134	23 under this subsection (k) by any taxpayer are hereby
1135	1135	24 validated.
1136	1136	25 (l) Environmental Remediation Tax Credit.
1137	1137	26 (i) For tax years ending after December 31, 1997 and
1138	1138
1139	1139
1140	1140
1141	1141
1142	1142
1143	1143	HB2978 - 31 - LRB103 25945 HLH 52297 b
1144	1144
1145	1145
1146	1146	HB2978- 32 -LRB103 25945 HLH 52297 b HB2978 - 32 - LRB103 25945 HLH 52297 b
1147	1147	HB2978 - 32 - LRB103 25945 HLH 52297 b
1148	1148	1 on or before December 31, 2001, a taxpayer shall be
1149	1149	2 allowed a credit against the tax imposed by subsections
1150	1150	3 (a) and (b) of this Section for certain amounts paid for
1151	1151	4 unreimbursed eligible remediation costs, as specified in
1152	1152	5 this subsection. For purposes of this Section,
1153	1153	6 "unreimbursed eligible remediation costs" means costs
1154	1154	7 approved by the Illinois Environmental Protection Agency
1155	1155	8 ("Agency") under Section 58.14 of the Environmental
1156	1156	9 Protection Act that were paid in performing environmental
1157	1157	10 remediation at a site for which a No Further Remediation
1158	1158	11 Letter was issued by the Agency and recorded under Section
1159	1159	12 58.10 of the Environmental Protection Act. The credit must
1160	1160	13 be claimed for the taxable year in which Agency approval
1161	1161	14 of the eligible remediation costs is granted. The credit
1162	1162	15 is not available to any taxpayer if the taxpayer or any
1163	1163	16 related party caused or contributed to, in any material
1164	1164	17 respect, a release of regulated substances on, in, or
1165	1165	18 under the site that was identified and addressed by the
1166	1166	19 remedial action pursuant to the Site Remediation Program
1167	1167	20 of the Environmental Protection Act. After the Pollution
1168	1168	21 Control Board rules are adopted pursuant to the Illinois
1169	1169	22 Administrative Procedure Act for the administration and
1170	1170	23 enforcement of Section 58.9 of the Environmental
1171	1171	24 Protection Act, determinations as to credit availability
1172	1172	25 for purposes of this Section shall be made consistent with
1173	1173	26 those rules. For purposes of this Section, "taxpayer"
1174	1174
1175	1175
1176	1176
1177	1177
1178	1178
1179	1179	HB2978 - 32 - LRB103 25945 HLH 52297 b
1180	1180
1181	1181
1182	1182	HB2978- 33 -LRB103 25945 HLH 52297 b HB2978 - 33 - LRB103 25945 HLH 52297 b
1183	1183	HB2978 - 33 - LRB103 25945 HLH 52297 b
1184	1184	1 includes a person whose tax attributes the taxpayer has
1185	1185	2 succeeded to under Section 381 of the Internal Revenue
1186	1186	3 Code and "related party" includes the persons disallowed a
1187	1187	4 deduction for losses by paragraphs (b), (c), and (f)(1) of
1188	1188	5 Section 267 of the Internal Revenue Code by virtue of
1189	1189	6 being a related taxpayer, as well as any of its partners.
1190	1190	7 The credit allowed against the tax imposed by subsections
1191	1191	8 (a) and (b) shall be equal to 25% of the unreimbursed
1192	1192	9 eligible remediation costs in excess of $100,000 per site,
1193	1193	10 except that the $100,000 threshold shall not apply to any
1194	1194	11 site contained in an enterprise zone as determined by the
1195	1195	12 Department of Commerce and Community Affairs (now
1196	1196	13 Department of Commerce and Economic Opportunity). The
1197	1197	14 total credit allowed shall not exceed $40,000 per year
1198	1198	15 with a maximum total of $150,000 per site. For partners
1199	1199	16 and shareholders of subchapter S corporations, there shall
1200	1200	17 be allowed a credit under this subsection to be determined
1201	1201	18 in accordance with the determination of income and
1202	1202	19 distributive share of income under Sections 702 and 704
1203	1203	20 and subchapter S of the Internal Revenue Code.
1204	1204	21 (ii) A credit allowed under this subsection that is
1205	1205	22 unused in the year the credit is earned may be carried
1206	1206	23 forward to each of the 5 taxable years following the year
1207	1207	24 for which the credit is first earned until it is used. The
1208	1208	25 term "unused credit" does not include any amounts of
1209	1209	26 unreimbursed eligible remediation costs in excess of the
1210	1210
1211	1211
1212	1212
1213	1213
1214	1214
1215	1215	HB2978 - 33 - LRB103 25945 HLH 52297 b
1216	1216
1217	1217
1218	1218	HB2978- 34 -LRB103 25945 HLH 52297 b HB2978 - 34 - LRB103 25945 HLH 52297 b
1219	1219	HB2978 - 34 - LRB103 25945 HLH 52297 b
1220	1220	1 maximum credit per site authorized under paragraph (i).
1221	1221	2 This credit shall be applied first to the earliest year
1222	1222	3 for which there is a liability. If there is a credit under
1223	1223	4 this subsection from more than one tax year that is
1224	1224	5 available to offset a liability, the earliest credit
1225	1225	6 arising under this subsection shall be applied first. A
1226	1226	7 credit allowed under this subsection may be sold to a
1227	1227	8 buyer as part of a sale of all or part of the remediation
1228	1228	9 site for which the credit was granted. The purchaser of a
1229	1229	10 remediation site and the tax credit shall succeed to the
1230	1230	11 unused credit and remaining carry-forward period of the
1231	1231	12 seller. To perfect the transfer, the assignor shall record
1232	1232	13 the transfer in the chain of title for the site and provide
1233	1233	14 written notice to the Director of the Illinois Department
1234	1234	15 of Revenue of the assignor's intent to sell the
1235	1235	16 remediation site and the amount of the tax credit to be
1236	1236	17 transferred as a portion of the sale. In no event may a
1237	1237	18 credit be transferred to any taxpayer if the taxpayer or a
1238	1238	19 related party would not be eligible under the provisions
1239	1239	20 of subsection (i).
1240	1240	21 (iii) For purposes of this Section, the term "site"
1241	1241	22 shall have the same meaning as under Section 58.2 of the
1242	1242	23 Environmental Protection Act.
1243	1243	24 (m) Education expense credit. Beginning with tax years
1244	1244	25 ending after December 31, 1999, a taxpayer who is the
1245	1245	26 custodian of one or more qualifying pupils shall be allowed a
1246	1246
1247	1247
1248	1248
1249	1249
1250	1250
1251	1251	HB2978 - 34 - LRB103 25945 HLH 52297 b
1252	1252
1253	1253
1254	1254	HB2978- 35 -LRB103 25945 HLH 52297 b HB2978 - 35 - LRB103 25945 HLH 52297 b
1255	1255	HB2978 - 35 - LRB103 25945 HLH 52297 b
1256	1256	1 credit against the tax imposed by subsections (a) and (b) of
1257	1257	2 this Section for qualified education expenses incurred on
1258	1258	3 behalf of the qualifying pupils. The credit shall be equal to
1259	1259	4 25% of qualified education expenses, but in no event may the
1260	1260	5 total credit under this subsection claimed by a family that is
1261	1261	6 the custodian of qualifying pupils exceed (i) $500 for tax
1262	1262	7 years ending prior to December 31, 2017, and (ii) $750 for tax
1263	1263	8 years ending on or after December 31, 2017. In no event shall a
1264	1264	9 credit under this subsection reduce the taxpayer's liability
1265	1265	10 under this Act to less than zero. Notwithstanding any other
1266	1266	11 provision of law, for taxable years beginning on or after
1267	1267	12 January 1, 2017, no taxpayer may claim a credit under this
1268	1268	13 subsection (m) if the taxpayer's adjusted gross income for the
1269	1269	14 taxable year exceeds (i) $500,000, in the case of spouses
1270	1270	15 filing a joint federal tax return or (ii) $250,000, in the case
1271	1271	16 of all other taxpayers. This subsection is exempt from the
1272	1272	17 provisions of Section 250 of this Act.
1273	1273	18 For purposes of this subsection:
1274	1274	19 "Qualifying pupils" means individuals who (i) are
1275	1275	20 residents of the State of Illinois, (ii) are under the age of
1276	1276	21 21 at the close of the school year for which a credit is
1277	1277	22 sought, and (iii) during the school year for which a credit is
1278	1278	23 sought were full-time pupils enrolled in a kindergarten
1279	1279	24 through twelfth grade education program at any school, as
1280	1280	25 defined in this subsection.
1281	1281	26 "Qualified education expense" means the amount incurred on
1282	1282
1283	1283
1284	1284
1285	1285
1286	1286
1287	1287	HB2978 - 35 - LRB103 25945 HLH 52297 b
1288	1288
1289	1289
1290	1290	HB2978- 36 -LRB103 25945 HLH 52297 b HB2978 - 36 - LRB103 25945 HLH 52297 b
1291	1291	HB2978 - 36 - LRB103 25945 HLH 52297 b
1292	1292	1 behalf of a qualifying pupil in excess of $250 for tuition,
1293	1293	2 book fees, and lab fees at the school in which the pupil is
1294	1294	3 enrolled during the regular school year.
1295	1295	4 "School" means any public or nonpublic elementary or
1296	1296	5 secondary school in Illinois that is in compliance with Title
1297	1297	6 VI of the Civil Rights Act of 1964 and attendance at which
1298	1298	7 satisfies the requirements of Section 26-1 of the School Code,
1299	1299	8 except that nothing shall be construed to require a child to
1300	1300	9 attend any particular public or nonpublic school to qualify
1301	1301	10 for the credit under this Section.
1302	1302	11 "Custodian" means, with respect to qualifying pupils, an
1303	1303	12 Illinois resident who is a parent, the parents, a legal
1304	1304	13 guardian, or the legal guardians of the qualifying pupils.
1305	1305	14 (n) River Edge Redevelopment Zone site remediation tax
1306	1306	15 credit.
1307	1307	16 (i) For tax years ending on or after December 31,
1308	1308	17 2006, a taxpayer shall be allowed a credit against the tax
1309	1309	18 imposed by subsections (a) and (b) of this Section for
1310	1310	19 certain amounts paid for unreimbursed eligible remediation
1311	1311	20 costs, as specified in this subsection. For purposes of
1312	1312	21 this Section, "unreimbursed eligible remediation costs"
1313	1313	22 means costs approved by the Illinois Environmental
1314	1314	23 Protection Agency ("Agency") under Section 58.14a of the
1315	1315	24 Environmental Protection Act that were paid in performing
1316	1316	25 environmental remediation at a site within a River Edge
1317	1317	26 Redevelopment Zone for which a No Further Remediation
1318	1318
1319	1319
1320	1320
1321	1321
1322	1322
1323	1323	HB2978 - 36 - LRB103 25945 HLH 52297 b
1324	1324
1325	1325
1326	1326	HB2978- 37 -LRB103 25945 HLH 52297 b HB2978 - 37 - LRB103 25945 HLH 52297 b
1327	1327	HB2978 - 37 - LRB103 25945 HLH 52297 b
1328	1328	1 Letter was issued by the Agency and recorded under Section
1329	1329	2 58.10 of the Environmental Protection Act. The credit must
1330	1330	3 be claimed for the taxable year in which Agency approval
1331	1331	4 of the eligible remediation costs is granted. The credit
1332	1332	5 is not available to any taxpayer if the taxpayer or any
1333	1333	6 related party caused or contributed to, in any material
1334	1334	7 respect, a release of regulated substances on, in, or
1335	1335	8 under the site that was identified and addressed by the
1336	1336	9 remedial action pursuant to the Site Remediation Program
1337	1337	10 of the Environmental Protection Act. Determinations as to
1338	1338	11 credit availability for purposes of this Section shall be
1339	1339	12 made consistent with rules adopted by the Pollution
1340	1340	13 Control Board pursuant to the Illinois Administrative
1341	1341	14 Procedure Act for the administration and enforcement of
1342	1342	15 Section 58.9 of the Environmental Protection Act. For
1343	1343	16 purposes of this Section, "taxpayer" includes a person
1344	1344	17 whose tax attributes the taxpayer has succeeded to under
1345	1345	18 Section 381 of the Internal Revenue Code and "related
1346	1346	19 party" includes the persons disallowed a deduction for
1347	1347	20 losses by paragraphs (b), (c), and (f)(1) of Section 267
1348	1348	21 of the Internal Revenue Code by virtue of being a related
1349	1349	22 taxpayer, as well as any of its partners. The credit
1350	1350	23 allowed against the tax imposed by subsections (a) and (b)
1351	1351	24 shall be equal to 25% of the unreimbursed eligible
1352	1352	25 remediation costs in excess of $100,000 per site.
1353	1353	26 (ii) A credit allowed under this subsection that is
1354	1354
1355	1355
1356	1356
1357	1357
1358	1358
1359	1359	HB2978 - 37 - LRB103 25945 HLH 52297 b
1360	1360
1361	1361
1362	1362	HB2978- 38 -LRB103 25945 HLH 52297 b HB2978 - 38 - LRB103 25945 HLH 52297 b
1363	1363	HB2978 - 38 - LRB103 25945 HLH 52297 b
1364	1364	1 unused in the year the credit is earned may be carried
1365	1365	2 forward to each of the 5 taxable years following the year
1366	1366	3 for which the credit is first earned until it is used. This
1367	1367	4 credit shall be applied first to the earliest year for
1368	1368	5 which there is a liability. If there is a credit under this
1369	1369	6 subsection from more than one tax year that is available
1370	1370	7 to offset a liability, the earliest credit arising under
1371	1371	8 this subsection shall be applied first. A credit allowed
1372	1372	9 under this subsection may be sold to a buyer as part of a
1373	1373	10 sale of all or part of the remediation site for which the
1374	1374	11 credit was granted. The purchaser of a remediation site
1375	1375	12 and the tax credit shall succeed to the unused credit and
1376	1376	13 remaining carry-forward period of the seller. To perfect
1377	1377	14 the transfer, the assignor shall record the transfer in
1378	1378	15 the chain of title for the site and provide written notice
1379	1379	16 to the Director of the Illinois Department of Revenue of
1380	1380	17 the assignor's intent to sell the remediation site and the
1381	1381	18 amount of the tax credit to be transferred as a portion of
1382	1382	19 the sale. In no event may a credit be transferred to any
1383	1383	20 taxpayer if the taxpayer or a related party would not be
1384	1384	21 eligible under the provisions of subsection (i).
1385	1385	22 (iii) For purposes of this Section, the term "site"
1386	1386	23 shall have the same meaning as under Section 58.2 of the
1387	1387	24 Environmental Protection Act.
1388	1388	25 (o) For each of taxable years during the Compassionate Use
1389	1389	26 of Medical Cannabis Program, a surcharge is imposed on all
1390	1390
1391	1391
1392	1392
1393	1393
1394	1394
1395	1395	HB2978 - 38 - LRB103 25945 HLH 52297 b
1396	1396
1397	1397
1398	1398	HB2978- 39 -LRB103 25945 HLH 52297 b HB2978 - 39 - LRB103 25945 HLH 52297 b
1399	1399	HB2978 - 39 - LRB103 25945 HLH 52297 b
1400	1400	1 taxpayers on income arising from the sale or exchange of
1401	1401	2 capital assets, depreciable business property, real property
1402	1402	3 used in the trade or business, and Section 197 intangibles of
1403	1403	4 an organization registrant under the Compassionate Use of
1404	1404	5 Medical Cannabis Program Act. The amount of the surcharge is
1405	1405	6 equal to the amount of federal income tax liability for the
1406	1406	7 taxable year attributable to those sales and exchanges. The
1407	1407	8 surcharge imposed does not apply if:
1408	1408	9 (1) the medical cannabis cultivation center
1409	1409	10 registration, medical cannabis dispensary registration, or
1410	1410	11 the property of a registration is transferred as a result
1411	1411	12 of any of the following:
1412	1412	13 (A) bankruptcy, a receivership, or a debt
1413	1413	14 adjustment initiated by or against the initial
1414	1414	15 registration or the substantial owners of the initial
1415	1415	16 registration;
1416	1416	17 (B) cancellation, revocation, or termination of
1417	1417	18 any registration by the Illinois Department of Public
1418	1418	19 Health;
1419	1419	20 (C) a determination by the Illinois Department of
1420	1420	21 Public Health that transfer of the registration is in
1421	1421	22 the best interests of Illinois qualifying patients as
1422	1422	23 defined by the Compassionate Use of Medical Cannabis
1423	1423	24 Program Act;
1424	1424	25 (D) the death of an owner of the equity interest in
1425	1425	26 a registrant;
1426	1426
1427	1427
1428	1428
1429	1429
1430	1430
1431	1431	HB2978 - 39 - LRB103 25945 HLH 52297 b
1432	1432
1433	1433
1434	1434	HB2978- 40 -LRB103 25945 HLH 52297 b HB2978 - 40 - LRB103 25945 HLH 52297 b
1435	1435	HB2978 - 40 - LRB103 25945 HLH 52297 b
1436	1436	1 (E) the acquisition of a controlling interest in
1437	1437	2 the stock or substantially all of the assets of a
1438	1438	3 publicly traded company;
1439	1439	4 (F) a transfer by a parent company to a wholly
1440	1440	5 owned subsidiary; or
1441	1441	6 (G) the transfer or sale to or by one person to
1442	1442	7 another person where both persons were initial owners
1443	1443	8 of the registration when the registration was issued;
1444	1444	9 or
1445	1445	10 (2) the cannabis cultivation center registration,
1446	1446	11 medical cannabis dispensary registration, or the
1447	1447	12 controlling interest in a registrant's property is
1448	1448	13 transferred in a transaction to lineal descendants in
1449	1449	14 which no gain or loss is recognized or as a result of a
1450	1450	15 transaction in accordance with Section 351 of the Internal
1451	1451	16 Revenue Code in which no gain or loss is recognized.
1452	1452	17 (p) Pass-through entity tax.
1453	1453	18 (1) For taxable years ending on or after December 31,
1454	1454	19 2021 and beginning prior to January 1, 2026, a partnership
1455	1455	20 (other than a publicly traded partnership under Section
1456	1456	21 7704 of the Internal Revenue Code) or Subchapter S
1457	1457	22 corporation may elect to apply the provisions of this
1458	1458	23 subsection. A separate election shall be made for each
1459	1459	24 taxable year. Such election shall be made at such time,
1460	1460	25 and in such form and manner as prescribed by the
1461	1461	26 Department, and, once made, is irrevocable.
1462	1462
1463	1463
1464	1464
1465	1465
1466	1466
1467	1467	HB2978 - 40 - LRB103 25945 HLH 52297 b
1468	1468
1469	1469
1470	1470	HB2978- 41 -LRB103 25945 HLH 52297 b HB2978 - 41 - LRB103 25945 HLH 52297 b
1471	1471	HB2978 - 41 - LRB103 25945 HLH 52297 b
1472	1472	1 (2) Entity-level tax. A partnership or Subchapter S
1473	1473	2 corporation electing to apply the provisions of this
1474	1474	3 subsection shall be subject to a tax for the privilege of
1475	1475	4 earning or receiving income in this State in an amount
1476	1476	5 equal to 4.95% of the taxpayer's net income for the
1477	1477	6 taxable year.
1478	1478	7 (3) Net income defined.
1479	1479	8 (A) In general. For purposes of paragraph (2), the
1480	1480	9 term net income has the same meaning as defined in
1481	1481	10 Section 202 of this Act, except that the following
1482	1482	11 provisions shall not apply:
1483	1483	12 (i) the standard exemption allowed under
1484	1484	13 Section 204;
1485	1485	14 (ii) the deduction for net losses allowed
1486	1486	15 under Section 207;
1487	1487	16 (iii) in the case of an S corporation, the
1488	1488	17 modification under Section 203(b)(2)(S); and
1489	1489	18 (iv) in the case of a partnership, the
1490	1490	19 modifications under Section 203(d)(2)(H) and
1491	1491	20 Section 203(d)(2)(I).
1492	1492	21 (B) Special rule for tiered partnerships. If a
1493	1493	22 taxpayer making the election under paragraph (1) is a
1494	1494	23 partner of another taxpayer making the election under
1495	1495	24 paragraph (1), net income shall be computed as
1496	1496	25 provided in subparagraph (A), except that the taxpayer
1497	1497	26 shall subtract its distributive share of the net
1498	1498
1499	1499
1500	1500
1501	1501
1502	1502
1503	1503	HB2978 - 41 - LRB103 25945 HLH 52297 b
1504	1504
1505	1505
1506	1506	HB2978- 42 -LRB103 25945 HLH 52297 b HB2978 - 42 - LRB103 25945 HLH 52297 b
1507	1507	HB2978 - 42 - LRB103 25945 HLH 52297 b
1508	1508	1 income of the electing partnership (including its
1509	1509	2 distributive share of the net income of the electing
1510	1510	3 partnership derived as a distributive share from
1511	1511	4 electing partnerships in which it is a partner).
1512	1512	5 (4) Credit for entity level tax. Each partner or
1513	1513	6 shareholder of a taxpayer making the election under this
1514	1514	7 Section shall be allowed a credit against the tax imposed
1515	1515	8 under subsections (a) and (b) of Section 201 of this Act
1516	1516	9 for the taxable year of the partnership or Subchapter S
1517	1517	10 corporation for which an election is in effect ending
1518	1518	11 within or with the taxable year of the partner or
1519	1519	12 shareholder in an amount equal to 4.95% times the partner
1520	1520	13 or shareholder's distributive share of the net income of
1521	1521	14 the electing partnership or Subchapter S corporation, but
1522	1522	15 not to exceed the partner's or shareholder's share of the
1523	1523	16 tax imposed under paragraph (1) which is actually paid by
1524	1524	17 the partnership or Subchapter S corporation. If the
1525	1525	18 taxpayer is a partnership or Subchapter S corporation that
1526	1526	19 is itself a partner of a partnership making the election
1527	1527	20 under paragraph (1), the credit under this paragraph shall
1528	1528	21 be allowed to the taxpayer's partners or shareholders (or
1529	1529	22 if the partner is a partnership or Subchapter S
1530	1530	23 corporation then its partners or shareholders) in
1531	1531	24 accordance with the determination of income and
1532	1532	25 distributive share of income under Sections 702 and 704
1533	1533	26 and Subchapter S of the Internal Revenue Code. If the
1534	1534
1535	1535
1536	1536
1537	1537
1538	1538
1539	1539	HB2978 - 42 - LRB103 25945 HLH 52297 b
1540	1540
1541	1541
1542	1542	HB2978- 43 -LRB103 25945 HLH 52297 b HB2978 - 43 - LRB103 25945 HLH 52297 b
1543	1543	HB2978 - 43 - LRB103 25945 HLH 52297 b
1544	1544	1 amount of the credit allowed under this paragraph exceeds
1545	1545	2 the partner's or shareholder's liability for tax imposed
1546	1546	3 under subsections (a) and (b) of Section 201 of this Act
1547	1547	4 for the taxable year, such excess shall be treated as an
1548	1548	5 overpayment for purposes of Section 909 of this Act.
1549	1549	6 (5) Nonresidents. A nonresident individual who is a
1550	1550	7 partner or shareholder of a partnership or Subchapter S
1551	1551	8 corporation for a taxable year for which an election is in
1552	1552	9 effect under paragraph (1) shall not be required to file
1553	1553	10 an income tax return under this Act for such taxable year
1554	1554	11 if the only source of net income of the individual (or the
1555	1555	12 individual and the individual's spouse in the case of a
1556	1556	13 joint return) is from an entity making the election under
1557	1557	14 paragraph (1) and the credit allowed to the partner or
1558	1558	15 shareholder under paragraph (4) equals or exceeds the
1559	1559	16 individual's liability for the tax imposed under
1560	1560	17 subsections (a) and (b) of Section 201 of this Act for the
1561	1561	18 taxable year.
1562	1562	19 (6) Liability for tax. Except as provided in this
1563	1563	20 paragraph, a partnership or Subchapter S making the
1564	1564	21 election under paragraph (1) is liable for the
1565	1565	22 entity-level tax imposed under paragraph (2). If the
1566	1566	23 electing partnership or corporation fails to pay the full
1567	1567	24 amount of tax deemed assessed under paragraph (2), the
1568	1568	25 partners or shareholders shall be liable to pay the tax
1569	1569	26 assessed (including penalties and interest). Each partner
1570	1570
1571	1571
1572	1572
1573	1573
1574	1574
1575	1575	HB2978 - 43 - LRB103 25945 HLH 52297 b
1576	1576
1577	1577
1578	1578	HB2978- 44 -LRB103 25945 HLH 52297 b HB2978 - 44 - LRB103 25945 HLH 52297 b
1579	1579	HB2978 - 44 - LRB103 25945 HLH 52297 b
1580	1580	1 or shareholder shall be liable for the unpaid assessment
1581	1581	2 based on the ratio of the partner's or shareholder's share
1582	1582	3 of the net income of the partnership over the total net
1583	1583	4 income of the partnership. If the partnership or
1584	1584	5 Subchapter S corporation fails to pay the tax assessed
1585	1585	6 (including penalties and interest) and thereafter an
1586	1586	7 amount of such tax is paid by the partners or
1587	1587	8 shareholders, such amount shall not be collected from the
1588	1588	9 partnership or corporation.
1589	1589	10 (7) Foreign tax. For purposes of the credit allowed
1590	1590	11 under Section 601(b)(3) of this Act, tax paid by a
1591	1591	12 partnership or Subchapter S corporation to another state
1592	1592	13 which, as determined by the Department, is substantially
1593	1593	14 similar to the tax imposed under this subsection, shall be
1594	1594	15 considered tax paid by the partner or shareholder to the
1595	1595	16 extent that the partner's or shareholder's share of the
1596	1596	17 income of the partnership or Subchapter S corporation
1597	1597	18 allocated and apportioned to such other state bears to the
1598	1598	19 total income of the partnership or Subchapter S
1599	1599	20 corporation allocated or apportioned to such other state.
1600	1600	21 (8) Suspension of withholding. The provisions of
1601	1601	22 Section 709.5 of this Act shall not apply to a partnership
1602	1602	23 or Subchapter S corporation for the taxable year for which
1603	1603	24 an election under paragraph (1) is in effect.
1604	1604	25 (9) Requirement to pay estimated tax. For each taxable
1605	1605	26 year for which an election under paragraph (1) is in
1606	1606
1607	1607
1608	1608
1609	1609
1610	1610
1611	1611	HB2978 - 44 - LRB103 25945 HLH 52297 b
1612	1612
1613	1613
1614	1614	HB2978- 45 -LRB103 25945 HLH 52297 b HB2978 - 45 - LRB103 25945 HLH 52297 b
1615	1615	HB2978 - 45 - LRB103 25945 HLH 52297 b
1616	1616	1 effect, a partnership or Subchapter S corporation is
1617	1617	2 required to pay estimated tax for such taxable year under
1618	1618	3 Sections 803 and 804 of this Act if the amount payable as
1619	1619	4 estimated tax can reasonably be expected to exceed $500.
1620	1620	5 (10) The provisions of this subsection shall apply
1621	1621	6 only with respect to taxable years for which the
1622	1622	7 limitation on individual deductions applies under Section
1623	1623	8 164(b)(6) of the Internal Revenue Code.
1624	1624	9 (Source: P.A. 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
1625	1625	10 101-207, eff. 8-2-19; 101-363, eff. 8-9-19; 102-558, eff.
1626	1626	11 8-20-21; 102-658, eff. 8-27-21.)
1627	1627	12 Section 99. Effective date. This Act takes effect upon
1628	1628	13 becoming law.
1629	1629
1630	1630
1631	1631
1632	1632
1633	1633
1634	1634	HB2978 - 45 - LRB103 25945 HLH 52297 b