Illinois 2023-2024 Regular Session

Illinois House Bill HB3039 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 HB3039 Introduced , by Rep. Will Guzzardi SYNOPSIS AS INTRODUCED: New Act30 ILCS 105/5.990 new30 ILCS 105/6z-139 new35 ILCS 5/203 from Ch. 120, par. 2-20335 ILCS 5/901 Creates the Extremely High Wealth Mark-to-Market Tax Act. Provides that a resident taxpayer with net assets worth $1,000,000,000 or more on December 31 of the tax year shall recognize gains or losses as if each asset owned by that taxpayer on December 31 of the tax year had been sold for its fair market value on December 31 of the tax year but with adjustment made for taxes paid on gains in previous years. Amends the Illinois Income Tax Act to make conforming changes. Effective immediately. LRB103 26307 HLH 52667 b A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3039 Introduced , by Rep. Will Guzzardi SYNOPSIS AS INTRODUCED: New Act30 ILCS 105/5.990 new30 ILCS 105/6z-139 new35 ILCS 5/203 from Ch. 120, par. 2-20335 ILCS 5/901 New Act 30 ILCS 105/5.990 new 30 ILCS 105/6z-139 new 35 ILCS 5/203 from Ch. 120, par. 2-203 35 ILCS 5/901 Creates the Extremely High Wealth Mark-to-Market Tax Act. Provides that a resident taxpayer with net assets worth $1,000,000,000 or more on December 31 of the tax year shall recognize gains or losses as if each asset owned by that taxpayer on December 31 of the tax year had been sold for its fair market value on December 31 of the tax year but with adjustment made for taxes paid on gains in previous years. Amends the Illinois Income Tax Act to make conforming changes. Effective immediately. LRB103 26307 HLH 52667 b LRB103 26307 HLH 52667 b A BILL FOR
2	2	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3039 Introduced , by Rep. Will Guzzardi SYNOPSIS AS INTRODUCED:
3	3	New Act30 ILCS 105/5.990 new30 ILCS 105/6z-139 new35 ILCS 5/203 from Ch. 120, par. 2-20335 ILCS 5/901 New Act 30 ILCS 105/5.990 new 30 ILCS 105/6z-139 new 35 ILCS 5/203 from Ch. 120, par. 2-203 35 ILCS 5/901
4	4	New Act
5	5	30 ILCS 105/5.990 new
6	6	30 ILCS 105/6z-139 new
7	7	35 ILCS 5/203 from Ch. 120, par. 2-203
8	8	35 ILCS 5/901
9	9	Creates the Extremely High Wealth Mark-to-Market Tax Act. Provides that a resident taxpayer with net assets worth $1,000,000,000 or more on December 31 of the tax year shall recognize gains or losses as if each asset owned by that taxpayer on December 31 of the tax year had been sold for its fair market value on December 31 of the tax year but with adjustment made for taxes paid on gains in previous years. Amends the Illinois Income Tax Act to make conforming changes. Effective immediately.
10	10	LRB103 26307 HLH 52667 b LRB103 26307 HLH 52667 b
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12	12	A BILL FOR
13	13	HB3039LRB103 26307 HLH 52667 b HB3039 LRB103 26307 HLH 52667 b
14	14	HB3039 LRB103 26307 HLH 52667 b
15	15	1 AN ACT concerning revenue.
16	16	2 Be it enacted by the People of the State of Illinois,
17	17	3 represented in the General Assembly:
18	18	4 Section 1. Short title. This Act may be cited as the
19	19	5 Extremely High Wealth Mark-to-Market Tax Act.
20	20	6 Section 3. Definitions. As used in this Act:
21	21	7 "Basis" means the fair market value of an asset on
22	22	8 December 31 of the taxable year immediately preceding the
23	23	9 taxable year in which the gain or loss is calculated under this
24	24	10 Act. If the asset is acquired by the taxpayer during the
25	25	11 taxable year, then the basis shall be the taxpayer's basis in
26	26	12 the asset for the purpose of calculating capital gains under
27	27	13 the federal Internal Revenue Code.
28	28	14 "Net income" has the meaning given to that term in Section
29	29	15 202 of the Illinois Income Tax Act.
30	30	16 "Phase-in cap amount" means an amount equal to one-fourth
31	31	17 of the worth of a taxpayer's net assets in excess of
32	32	18 $1,000,000,000 on December 31 of the taxable year for which
33	33	19 gains or losses are calculated under this Act.
34	34	20 "Resident taxpayer" means an individual, other than a
35	35	21 nonresident of the State or a part-year resident of the State,
36	36	22 who is subject to the tax imposed under subsections (a) and (b)
37	37	23 of Section 201 of the Illinois Income Tax Act for the taxable
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41	41	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3039 Introduced , by Rep. Will Guzzardi SYNOPSIS AS INTRODUCED:
42	42	New Act30 ILCS 105/5.990 new30 ILCS 105/6z-139 new35 ILCS 5/203 from Ch. 120, par. 2-20335 ILCS 5/901 New Act 30 ILCS 105/5.990 new 30 ILCS 105/6z-139 new 35 ILCS 5/203 from Ch. 120, par. 2-203 35 ILCS 5/901
43	43	New Act
44	44	30 ILCS 105/5.990 new
45	45	30 ILCS 105/6z-139 new
46	46	35 ILCS 5/203 from Ch. 120, par. 2-203
47	47	35 ILCS 5/901
48	48	Creates the Extremely High Wealth Mark-to-Market Tax Act. Provides that a resident taxpayer with net assets worth $1,000,000,000 or more on December 31 of the tax year shall recognize gains or losses as if each asset owned by that taxpayer on December 31 of the tax year had been sold for its fair market value on December 31 of the tax year but with adjustment made for taxes paid on gains in previous years. Amends the Illinois Income Tax Act to make conforming changes. Effective immediately.
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51	51	A BILL FOR
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57	57	New Act
58	58	30 ILCS 105/5.990 new
59	59	30 ILCS 105/6z-139 new
60	60	35 ILCS 5/203 from Ch. 120, par. 2-203
61	61	35 ILCS 5/901
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80	80	1 year.
81	81	2 "Taxable year" or "tax year" has the meaning ascribed to
82	82	3 the term "taxable year" in Section 1501 of the Illinois Income
83	83	4 Tax Act.
84	84	5 Section 5. Tax imposed; tax years ending on or after
85	85	6 December 31, 2023 and ending prior to December 31, 2024.
86	86	7 (a) Notwithstanding any other provision of law, for tax
87	87	8 years ending on or after December 31, 2023 and ending prior to
88	88	9 December 31, 2024, a resident taxpayer with net assets worth
89	89	10 $1,000,000,000 or more on December 31, 2023 shall recognize
90	90	11 gains or losses as if each asset owned by that taxpayer had
91	91	12 been sold for its fair market value on December 31, 2023. An
92	92	13 amount equal to the lesser of (i) the difference between the
93	93	14 total fair market value, on December 31, 2023, of all assets
94	94	15 held by the taxpayer on that date and the combined basis of all
95	95	16 assets held by the taxpayer on that date or (ii) the phase-in
96	96	17 cap amount shall be included in the taxpayer's net income for
97	97	18 that tax year for the purpose of calculating the tax due under
98	98	19 the Illinois Income Tax Act. Proper adjustment shall be made
99	99	20 in the amount of any gain or loss subsequently realized for
100	100	21 gains or losses taken into account under this subsection. At
101	101	22 the taxpayer's option, the tax payable as a result of this
102	102	23 Section shall either be payable in one installment or else
103	103	24 shall be payable annually in 10 equal installments beginning
104	104	25 in the year of the effective date of this Act and with all such
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115	115	1 installment payments commencing after the initial installment
116	116	2 payment also being subject to an annual nondeductible deferral
117	117	3 charge of 7.5% annually.
118	118	4 (b) For resident taxpayers who would recognize net gains
119	119	5 as a result of this Section except for the operation of this
120	120	6 sentence, if the taxpayer can show that any portion of those
121	121	7 gains was accumulated prior to the taxpayer becoming a
122	122	8 resident taxpayer of Illinois, and if the taxpayer can also
123	123	9 show that a portion of those gains was previously taxed by any
124	124	10 state or jurisdiction in which the taxpayer was a resident
125	125	11 prior to becoming a resident of Illinois, then credit shall be
126	126	12 provided in the amount of the tax on those gains that was paid
127	127	13 to any such prior state or jurisdiction. Any credits so
128	128	14 provided by this subsection, however, shall not exceed the
129	129	15 lesser of the total tax owed under this Section on such gains
130	130	16 and the tax imposed on such gains by such other prior states or
131	131	17 jurisdictions in which the taxpayer was a resident prior to
132	132	18 becoming a resident individual of Illinois.
133	133	19 Section 10. Tax imposed; tax years ending on or after
134	134	20 December 31, 2024.
135	135	21 (a) For taxable years ending on or after December 31,
136	136	22 2024, a resident taxpayer with net assets worth $1,000,000,000
137	137	23 or more on December 31 of the tax year shall recognize gains or
138	138	24 losses as if each asset owned by that taxpayer on December 31
139	139	25 of the tax year had been sold for its fair market value on
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150	150	1 December 31 of the tax year but with adjustment made for taxes
151	151	2 paid on gains in previous years. Any resulting net gains from
152	152	3 these deemed sales, up to the phase-in cap amount, shall be
153	153	4 included in the taxpayer's income for such taxable year.
154	154	5 Proper adjustment shall be made in the amount of any gain or
155	155	6 loss subsequently realized for gain or loss taken into account
156	156	7 under the preceding sentence. To the extent that the losses of
157	157	8 a taxpayer exceed the taxpayer's gains, such net losses shall
158	158	9 not be recognized in such taxable year and shall instead carry
159	159	10 forward indefinitely.
160	160	11 (b) For resident taxpayers who would recognize net gains
161	161	12 as a result of this Section except for the operation of this
162	162	13 sentence, if the taxpayer can show that any portion of those
163	163	14 gains was accumulated prior to the taxpayer becoming a
164	164	15 resident taxpayer of Illinois, and if the taxpayer can also
165	165	16 show that a portion of those gains was previously taxed by any
166	166	17 state or jurisdiction in which the taxpayer was a resident
167	167	18 prior to becoming a resident of Illinois, then credit shall be
168	168	19 provided in the amount of the tax on those gains that was paid
169	169	20 to any such prior state or jurisdiction. Any credits so
170	170	21 provided by this subsection, however, shall not exceed the
171	171	22 lesser of the total tax owed under this Section on such gains
172	172	23 and the tax imposed on such gains by such other prior states or
173	173	24 jurisdictions in which the taxpayer was a resident prior to
174	174	25 becoming a resident individual of Illinois.
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185	185	1 Section 20. Net worth calculation.
186	186	2 (a) As used in this Act, the term "asset" means all real or
187	187	3 personal property, whether tangible or intangible and wherever
188	188	4 situated, that is: (1) owned by the taxpayer; (2) owned by the
189	189	5 taxpayer's spouse, minor children, or any trust or estate of
190	190	6 which the taxpayer is a beneficiary; (3) contributed by the
191	191	7 taxpayer, or the taxpayer's spouse, minor children, or any
192	192	8 trust or estate of which the taxpayer is a beneficiary, to any
193	193	9 private foundation, donor advised fund, and any other entity
194	194	10 described in section 501(c) or section 527 of the Internal
195	195	11 Revenue Code of which the taxpayer, or the taxpayer's spouse,
196	196	12 minor children, or any trust or estate of which the taxpayer is
197	197	13 a beneficiary, is a substantial contributor (as such term is
198	198	14 defined in Section 4958(c)(3)(B)(i) of the Internal Revenue
199	199	15 Code); and (4) without duplication, all gifts and donations
200	200	16 made within the past 5 years by the taxpayer, or the taxpayer's
201	201	17 spouse, minor children, or any trust or estate of which the
202	202	18 taxpayer is a beneficiary, as if such gifts and donations were
203	203	19 still owned by the taxpayer. As used in this Section, "net
204	204	20 assets" means the fair market value of the taxpayer's assets
205	205	21 less the fair market value of the taxpayer's liabilities and,
206	206	22 in appropriate cases as determined by the Department of
207	207	23 Revenue, liabilities of such other persons described in this
208	208	24 Section.
209	209	25 (b) The term "assets" includes the real or personal
210	210	26 property described in subsection (a), but only to the extent
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221	221	1 allowable under the Illinois Constitution, the United States
222	222	2 Constitution, and any other governing federal law.
223	223	3 Section 25. Fair market value.
224	224	4 (a) The fair market value of each asset owned by the
225	225	5 taxpayer shall be the price at which the asset would change
226	226	6 hands between a willing buyer and a willing seller, neither
227	227	7 being under any compulsion to buy or to sell and both having
228	228	8 reasonable knowledge of relevant facts. The value of a
229	229	9 particular asset shall not be the price that a forced sale of
230	230	10 the property would produce. Further, the fair market value of
231	231	11 an asset shall not be its sale price in a market other than a
232	232	12 market in which the item is most commonly sold to the public,
233	233	13 taking into account the location of the item wherever
234	234	14 appropriate. In the case of an asset that is generally
235	235	15 obtained by the public in the retail market, the fair market
236	236	16 value of such an asset shall be the price at which the item or
237	237	17 a comparable item would be sold at retail.
238	238	18 (b) For purposes of this Section, any feature of an asset,
239	239	19 such as a poison pill, that was added with the intent, and has
240	240	20 the effect, of reducing the value of the asset shall be
241	241	21 disregarded, and no valuation or other discount shall be taken
242	242	22 into account if it would have the effect of reducing the value
243	243	23 of a pro rata economic interest in an asset below the pro rata
244	244	24 portion of the value of the entire asset.
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255	255	1 Section 30. Administration.
256	256	2 (a) The Department of Revenue shall amend or create tax
257	257	3 forms as necessary for the reporting of gains by assets.
258	258	4 Assets shall be listed with (i) a description of the asset,
259	259	5 (ii) the asset category, (iii) the year the asset was
260	260	6 acquired, (iv) the adjusted Illinois basis of the asset as of
261	261	7 December 31 of the tax year, (v) the fair market value of the
262	262	8 asset as of December 31 of the tax year, and (vi) the amount of
263	263	9 gain that would be taxable under this Act, unless the
264	264	10 Department determines that one or more categories is not
265	265	11 appropriate for a particular type of asset.
266	266	12 (b) Asset categories separately listed shall include, but
267	267	13 shall not be limited to, the following:
268	268	14 (1) stock held in any publicly traded corporation;
269	269	15 (2) stock held in any private C corporation;
270	270	16 (3) stock held in any S corporation;
271	271	17 (4) interests in any private equity or hedge fund
272	272	18 organized as a partnership;
273	273	19 (5) interests in any other partnerships;
274	274	20 (6) interests in any other noncorporate businesses;
275	275	21 (7) bonds and interest bearing savings accounts, cash
276	276	22 and deposits;
277	277	23 (8) interests in mutual funds or index funds;
278	278	24 (9) put and call options;
279	279	25 (10) futures contracts;
280	280	26 (11) financial assets held offshore reported on IRS
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291	291	1 tax form 8938;
292	292	2 (12) real property;
293	293	3 (13) art and collectibles;
294	294	4 (14) pension funds;
295	295	5 (15) other assets;
296	296	6 (16) debts and liabilities; and
297	297	7 (17) assets not owned by the taxpayer but which count
298	298	8 toward the $1,000,000,000 threshold pursuant to Section
299	299	9 20.
300	300	10 (c) The Department shall specifically request the filing
301	301	11 of such forms by any resident individual expected to have net
302	302	12 assets in excess of $1,000,000,000. Such taxpayers shall
303	303	13 include, but not be limited to, taxpayers with an adjusted
304	304	14 gross income summed over the previous 10 years in excess of
305	305	15 $600,000,000.
306	306	16 Section 35. Mark-to-market in other states. If a resident
307	307	17 taxpayer becomes an Illinois resident subsequent to paying tax
308	308	18 to another state as a result of recognizing gain or loss
309	309	19 pursuant to any mark-to-market or deemed-realization regime of
310	310	20 that other state, proper adjustment shall be made in the
311	311	21 amount of any gain or loss subsequently realized for gain or
312	312	22 loss taken into account under such mark-to-market or
313	313	23 deemed-realization regime of that other state for purposes of
314	314	24 computing gain or loss under Sections 5 or 10 of this Act.
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325	325	1 Section 40. Collection. The Department of Revenue shall
326	326	2 collect the mark-to-market taxes imposed by this Act. Money
327	327	3 collected, after deducting amounts necessary for
328	328	4 administration and enforcement by the Department, shall be
329	329	5 paid into the Working Families Fund in the State treasury.
330	330	6 Section 45. Rules. The Department of Revenue shall adopt
331	331	7 rules necessary or appropriate to carry out the purposes of
332	332	8 this Act, including rules to prevent the use of year-end
333	333	9 transfers, related parties, or other arrangements to avoid its
334	334	10 provisions.
335	335	11 Section 900. The State Finance Act is amended by adding
336	336	12 Section 5.990 as follows:
337	337	13 (30 ILCS 105/5.990 new)
338	338	14 Sec. 5.990. The Working Families Fund.
339	339	15 Section 905. The State Finance Act is amended by adding
340	340	16 Section 6z-139 as follows:
341	341	17 (30 ILCS 105/6z-139 new)
342	342	18 Sec. 6z-139. The Working Families Fund; creation. The
343	343	19 Working Families Fund is hereby created as a special fund in
344	344	20 the State treasury. All moneys deposited into the Fund shall
345	345	21 be appropriated for the purpose of providing child care,
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356	356	1 ending homelessness, or supporting public schools. Moneys
357	357	2 appropriated from the Fund shall supplement and not supplant
358	358	3 the current levels of funding for each item.
359	359	4 Section 910. The Illinois Income Tax Act is amended by
360	360	5 changing Sections 203 and 901 as follows:
361	361	6 (35 ILCS 5/203) (from Ch. 120, par. 2-203)
362	362	7 Sec. 203. Base income defined.
363	363	8 (a) Individuals.
364	364	9 (1) In general. In the case of an individual, base
365	365	10 income means an amount equal to the taxpayer's adjusted
366	366	11 gross income for the taxable year as modified by paragraph
367	367	12 (2).
368	368	13 (2) Modifications. The adjusted gross income referred
369	369	14 to in paragraph (1) shall be modified by adding thereto
370	370	15 the sum of the following amounts:
371	371	16 (A) An amount equal to all amounts paid or accrued
372	372	17 to the taxpayer as interest or dividends during the
373	373	18 taxable year to the extent excluded from gross income
374	374	19 in the computation of adjusted gross income, except
375	375	20 stock dividends of qualified public utilities
376	376	21 described in Section 305(e) of the Internal Revenue
377	377	22 Code;
378	378	23 (B) An amount equal to the amount of tax imposed by
379	379	24 this Act to the extent deducted from gross income in
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390	390	1 the computation of adjusted gross income for the
391	391	2 taxable year;
392	392	3 (C) An amount equal to the amount received during
393	393	4 the taxable year as a recovery or refund of real
394	394	5 property taxes paid with respect to the taxpayer's
395	395	6 principal residence under the Revenue Act of 1939 and
396	396	7 for which a deduction was previously taken under
397	397	8 subparagraph (L) of this paragraph (2) prior to July
398	398	9 1, 1991, the retrospective application date of Article
399	399	10 4 of Public Act 87-17. In the case of multi-unit or
400	400	11 multi-use structures and farm dwellings, the taxes on
401	401	12 the taxpayer's principal residence shall be that
402	402	13 portion of the total taxes for the entire property
403	403	14 which is attributable to such principal residence;
404	404	15 (D) An amount equal to the amount of the capital
405	405	16 gain deduction allowable under the Internal Revenue
406	406	17 Code, to the extent deducted from gross income in the
407	407	18 computation of adjusted gross income;
408	408	19 (D-5) An amount, to the extent not included in
409	409	20 adjusted gross income, equal to the amount of money
410	410	21 withdrawn by the taxpayer in the taxable year from a
411	411	22 medical care savings account and the interest earned
412	412	23 on the account in the taxable year of a withdrawal
413	413	24 pursuant to subsection (b) of Section 20 of the
414	414	25 Medical Care Savings Account Act or subsection (b) of
415	415	26 Section 20 of the Medical Care Savings Account Act of
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426	426	1 2000;
427	427	2 (D-10) For taxable years ending after December 31,
428	428	3 1997, an amount equal to any eligible remediation
429	429	4 costs that the individual deducted in computing
430	430	5 adjusted gross income and for which the individual
431	431	6 claims a credit under subsection (l) of Section 201;
432	432	7 (D-15) For taxable years 2001 and thereafter, an
433	433	8 amount equal to the bonus depreciation deduction taken
434	434	9 on the taxpayer's federal income tax return for the
435	435	10 taxable year under subsection (k) of Section 168 of
436	436	11 the Internal Revenue Code;
437	437	12 (D-16) If the taxpayer sells, transfers, abandons,
438	438	13 or otherwise disposes of property for which the
439	439	14 taxpayer was required in any taxable year to make an
440	440	15 addition modification under subparagraph (D-15), then
441	441	16 an amount equal to the aggregate amount of the
442	442	17 deductions taken in all taxable years under
443	443	18 subparagraph (Z) with respect to that property.
444	444	19 If the taxpayer continues to own property through
445	445	20 the last day of the last tax year for which a
446	446	21 subtraction is allowed with respect to that property
447	447	22 under subparagraph (Z) and for which the taxpayer was
448	448	23 allowed in any taxable year to make a subtraction
449	449	24 modification under subparagraph (Z), then an amount
450	450	25 equal to that subtraction modification.
451	451	26 The taxpayer is required to make the addition
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462	462	1 modification under this subparagraph only once with
463	463	2 respect to any one piece of property;
464	464	3 (D-17) An amount equal to the amount otherwise
465	465	4 allowed as a deduction in computing base income for
466	466	5 interest paid, accrued, or incurred, directly or
467	467	6 indirectly, (i) for taxable years ending on or after
468	468	7 December 31, 2004, to a foreign person who would be a
469	469	8 member of the same unitary business group but for the
470	470	9 fact that foreign person's business activity outside
471	471	10 the United States is 80% or more of the foreign
472	472	11 person's total business activity and (ii) for taxable
473	473	12 years ending on or after December 31, 2008, to a person
474	474	13 who would be a member of the same unitary business
475	475	14 group but for the fact that the person is prohibited
476	476	15 under Section 1501(a)(27) from being included in the
477	477	16 unitary business group because he or she is ordinarily
478	478	17 required to apportion business income under different
479	479	18 subsections of Section 304. The addition modification
480	480	19 required by this subparagraph shall be reduced to the
481	481	20 extent that dividends were included in base income of
482	482	21 the unitary group for the same taxable year and
483	483	22 received by the taxpayer or by a member of the
484	484	23 taxpayer's unitary business group (including amounts
485	485	24 included in gross income under Sections 951 through
486	486	25 964 of the Internal Revenue Code and amounts included
487	487	26 in gross income under Section 78 of the Internal
488	488
489	489
490	490
491	491
492	492
493	493	HB3039 - 13 - LRB103 26307 HLH 52667 b
494	494
495	495
496	496	HB3039- 14 -LRB103 26307 HLH 52667 b HB3039 - 14 - LRB103 26307 HLH 52667 b
497	497	HB3039 - 14 - LRB103 26307 HLH 52667 b
498	498	1 Revenue Code) with respect to the stock of the same
499	499	2 person to whom the interest was paid, accrued, or
500	500	3 incurred.
501	501	4 This paragraph shall not apply to the following:
502	502	5 (i) an item of interest paid, accrued, or
503	503	6 incurred, directly or indirectly, to a person who
504	504	7 is subject in a foreign country or state, other
505	505	8 than a state which requires mandatory unitary
506	506	9 reporting, to a tax on or measured by net income
507	507	10 with respect to such interest; or
508	508	11 (ii) an item of interest paid, accrued, or
509	509	12 incurred, directly or indirectly, to a person if
510	510	13 the taxpayer can establish, based on a
511	511	14 preponderance of the evidence, both of the
512	512	15 following:
513	513	16 (a) the person, during the same taxable
514	514	17 year, paid, accrued, or incurred, the interest
515	515	18 to a person that is not a related member, and
516	516	19 (b) the transaction giving rise to the
517	517	20 interest expense between the taxpayer and the
518	518	21 person did not have as a principal purpose the
519	519	22 avoidance of Illinois income tax, and is paid
520	520	23 pursuant to a contract or agreement that
521	521	24 reflects an arm's-length interest rate and
522	522	25 terms; or
523	523	26 (iii) the taxpayer can establish, based on
524	524
525	525
526	526
527	527
528	528
529	529	HB3039 - 14 - LRB103 26307 HLH 52667 b
530	530
531	531
532	532	HB3039- 15 -LRB103 26307 HLH 52667 b HB3039 - 15 - LRB103 26307 HLH 52667 b
533	533	HB3039 - 15 - LRB103 26307 HLH 52667 b
534	534	1 clear and convincing evidence, that the interest
535	535	2 paid, accrued, or incurred relates to a contract
536	536	3 or agreement entered into at arm's-length rates
537	537	4 and terms and the principal purpose for the
538	538	5 payment is not federal or Illinois tax avoidance;
539	539	6 or
540	540	7 (iv) an item of interest paid, accrued, or
541	541	8 incurred, directly or indirectly, to a person if
542	542	9 the taxpayer establishes by clear and convincing
543	543	10 evidence that the adjustments are unreasonable; or
544	544	11 if the taxpayer and the Director agree in writing
545	545	12 to the application or use of an alternative method
546	546	13 of apportionment under Section 304(f).
547	547	14 Nothing in this subsection shall preclude the
548	548	15 Director from making any other adjustment
549	549	16 otherwise allowed under Section 404 of this Act
550	550	17 for any tax year beginning after the effective
551	551	18 date of this amendment provided such adjustment is
552	552	19 made pursuant to regulation adopted by the
553	553	20 Department and such regulations provide methods
554	554	21 and standards by which the Department will utilize
555	555	22 its authority under Section 404 of this Act;
556	556	23 (D-18) An amount equal to the amount of intangible
557	557	24 expenses and costs otherwise allowed as a deduction in
558	558	25 computing base income, and that were paid, accrued, or
559	559	26 incurred, directly or indirectly, (i) for taxable
560	560
561	561
562	562
563	563
564	564
565	565	HB3039 - 15 - LRB103 26307 HLH 52667 b
566	566
567	567
568	568	HB3039- 16 -LRB103 26307 HLH 52667 b HB3039 - 16 - LRB103 26307 HLH 52667 b
569	569	HB3039 - 16 - LRB103 26307 HLH 52667 b
570	570	1 years ending on or after December 31, 2004, to a
571	571	2 foreign person who would be a member of the same
572	572	3 unitary business group but for the fact that the
573	573	4 foreign person's business activity outside the United
574	574	5 States is 80% or more of that person's total business
575	575	6 activity and (ii) for taxable years ending on or after
576	576	7 December 31, 2008, to a person who would be a member of
577	577	8 the same unitary business group but for the fact that
578	578	9 the person is prohibited under Section 1501(a)(27)
579	579	10 from being included in the unitary business group
580	580	11 because he or she is ordinarily required to apportion
581	581	12 business income under different subsections of Section
582	582	13 304. The addition modification required by this
583	583	14 subparagraph shall be reduced to the extent that
584	584	15 dividends were included in base income of the unitary
585	585	16 group for the same taxable year and received by the
586	586	17 taxpayer or by a member of the taxpayer's unitary
587	587	18 business group (including amounts included in gross
588	588	19 income under Sections 951 through 964 of the Internal
589	589	20 Revenue Code and amounts included in gross income
590	590	21 under Section 78 of the Internal Revenue Code) with
591	591	22 respect to the stock of the same person to whom the
592	592	23 intangible expenses and costs were directly or
593	593	24 indirectly paid, incurred, or accrued. The preceding
594	594	25 sentence does not apply to the extent that the same
595	595	26 dividends caused a reduction to the addition
596	596
597	597
598	598
599	599
600	600
601	601	HB3039 - 16 - LRB103 26307 HLH 52667 b
602	602
603	603
604	604	HB3039- 17 -LRB103 26307 HLH 52667 b HB3039 - 17 - LRB103 26307 HLH 52667 b
605	605	HB3039 - 17 - LRB103 26307 HLH 52667 b
606	606	1 modification required under Section 203(a)(2)(D-17) of
607	607	2 this Act. As used in this subparagraph, the term
608	608	3 "intangible expenses and costs" includes (1) expenses,
609	609	4 losses, and costs for, or related to, the direct or
610	610	5 indirect acquisition, use, maintenance or management,
611	611	6 ownership, sale, exchange, or any other disposition of
612	612	7 intangible property; (2) losses incurred, directly or
613	613	8 indirectly, from factoring transactions or discounting
614	614	9 transactions; (3) royalty, patent, technical, and
615	615	10 copyright fees; (4) licensing fees; and (5) other
616	616	11 similar expenses and costs. For purposes of this
617	617	12 subparagraph, "intangible property" includes patents,
618	618	13 patent applications, trade names, trademarks, service
619	619	14 marks, copyrights, mask works, trade secrets, and
620	620	15 similar types of intangible assets.
621	621	16 This paragraph shall not apply to the following:
622	622	17 (i) any item of intangible expenses or costs
623	623	18 paid, accrued, or incurred, directly or
624	624	19 indirectly, from a transaction with a person who
625	625	20 is subject in a foreign country or state, other
626	626	21 than a state which requires mandatory unitary
627	627	22 reporting, to a tax on or measured by net income
628	628	23 with respect to such item; or
629	629	24 (ii) any item of intangible expense or cost
630	630	25 paid, accrued, or incurred, directly or
631	631	26 indirectly, if the taxpayer can establish, based
632	632
633	633
634	634
635	635
636	636
637	637	HB3039 - 17 - LRB103 26307 HLH 52667 b
638	638
639	639
640	640	HB3039- 18 -LRB103 26307 HLH 52667 b HB3039 - 18 - LRB103 26307 HLH 52667 b
641	641	HB3039 - 18 - LRB103 26307 HLH 52667 b
642	642	1 on a preponderance of the evidence, both of the
643	643	2 following:
644	644	3 (a) the person during the same taxable
645	645	4 year paid, accrued, or incurred, the
646	646	5 intangible expense or cost to a person that is
647	647	6 not a related member, and
648	648	7 (b) the transaction giving rise to the
649	649	8 intangible expense or cost between the
650	650	9 taxpayer and the person did not have as a
651	651	10 principal purpose the avoidance of Illinois
652	652	11 income tax, and is paid pursuant to a contract
653	653	12 or agreement that reflects arm's-length terms;
654	654	13 or
655	655	14 (iii) any item of intangible expense or cost
656	656	15 paid, accrued, or incurred, directly or
657	657	16 indirectly, from a transaction with a person if
658	658	17 the taxpayer establishes by clear and convincing
659	659	18 evidence, that the adjustments are unreasonable;
660	660	19 or if the taxpayer and the Director agree in
661	661	20 writing to the application or use of an
662	662	21 alternative method of apportionment under Section
663	663	22 304(f);
664	664	23 Nothing in this subsection shall preclude the
665	665	24 Director from making any other adjustment
666	666	25 otherwise allowed under Section 404 of this Act
667	667	26 for any tax year beginning after the effective
668	668
669	669
670	670
671	671
672	672
673	673	HB3039 - 18 - LRB103 26307 HLH 52667 b
674	674
675	675
676	676	HB3039- 19 -LRB103 26307 HLH 52667 b HB3039 - 19 - LRB103 26307 HLH 52667 b
677	677	HB3039 - 19 - LRB103 26307 HLH 52667 b
678	678	1 date of this amendment provided such adjustment is
679	679	2 made pursuant to regulation adopted by the
680	680	3 Department and such regulations provide methods
681	681	4 and standards by which the Department will utilize
682	682	5 its authority under Section 404 of this Act;
683	683	6 (D-19) For taxable years ending on or after
684	684	7 December 31, 2008, an amount equal to the amount of
685	685	8 insurance premium expenses and costs otherwise allowed
686	686	9 as a deduction in computing base income, and that were
687	687	10 paid, accrued, or incurred, directly or indirectly, to
688	688	11 a person who would be a member of the same unitary
689	689	12 business group but for the fact that the person is
690	690	13 prohibited under Section 1501(a)(27) from being
691	691	14 included in the unitary business group because he or
692	692	15 she is ordinarily required to apportion business
693	693	16 income under different subsections of Section 304. The
694	694	17 addition modification required by this subparagraph
695	695	18 shall be reduced to the extent that dividends were
696	696	19 included in base income of the unitary group for the
697	697	20 same taxable year and received by the taxpayer or by a
698	698	21 member of the taxpayer's unitary business group
699	699	22 (including amounts included in gross income under
700	700	23 Sections 951 through 964 of the Internal Revenue Code
701	701	24 and amounts included in gross income under Section 78
702	702	25 of the Internal Revenue Code) with respect to the
703	703	26 stock of the same person to whom the premiums and costs
704	704
705	705
706	706
707	707
708	708
709	709	HB3039 - 19 - LRB103 26307 HLH 52667 b
710	710
711	711
712	712	HB3039- 20 -LRB103 26307 HLH 52667 b HB3039 - 20 - LRB103 26307 HLH 52667 b
713	713	HB3039 - 20 - LRB103 26307 HLH 52667 b
714	714	1 were directly or indirectly paid, incurred, or
715	715	2 accrued. The preceding sentence does not apply to the
716	716	3 extent that the same dividends caused a reduction to
717	717	4 the addition modification required under Section
718	718	5 203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this
719	719	6 Act;
720	720	7 (D-20) For taxable years beginning on or after
721	721	8 January 1, 2002 and ending on or before December 31,
722	722	9 2006, in the case of a distribution from a qualified
723	723	10 tuition program under Section 529 of the Internal
724	724	11 Revenue Code, other than (i) a distribution from a
725	725	12 College Savings Pool created under Section 16.5 of the
726	726	13 State Treasurer Act or (ii) a distribution from the
727	727	14 Illinois Prepaid Tuition Trust Fund, an amount equal
728	728	15 to the amount excluded from gross income under Section
729	729	16 529(c)(3)(B). For taxable years beginning on or after
730	730	17 January 1, 2007, in the case of a distribution from a
731	731	18 qualified tuition program under Section 529 of the
732	732	19 Internal Revenue Code, other than (i) a distribution
733	733	20 from a College Savings Pool created under Section 16.5
734	734	21 of the State Treasurer Act, (ii) a distribution from
735	735	22 the Illinois Prepaid Tuition Trust Fund, or (iii) a
736	736	23 distribution from a qualified tuition program under
737	737	24 Section 529 of the Internal Revenue Code that (I)
738	738	25 adopts and determines that its offering materials
739	739	26 comply with the College Savings Plans Network's
740	740
741	741
742	742
743	743
744	744
745	745	HB3039 - 20 - LRB103 26307 HLH 52667 b
746	746
747	747
748	748	HB3039- 21 -LRB103 26307 HLH 52667 b HB3039 - 21 - LRB103 26307 HLH 52667 b
749	749	HB3039 - 21 - LRB103 26307 HLH 52667 b
750	750	1 disclosure principles and (II) has made reasonable
751	751	2 efforts to inform in-state residents of the existence
752	752	3 of in-state qualified tuition programs by informing
753	753	4 Illinois residents directly and, where applicable, to
754	754	5 inform financial intermediaries distributing the
755	755	6 program to inform in-state residents of the existence
756	756	7 of in-state qualified tuition programs at least
757	757	8 annually, an amount equal to the amount excluded from
758	758	9 gross income under Section 529(c)(3)(B).
759	759	10 For the purposes of this subparagraph (D-20), a
760	760	11 qualified tuition program has made reasonable efforts
761	761	12 if it makes disclosures (which may use the term
762	762	13 "in-state program" or "in-state plan" and need not
763	763	14 specifically refer to Illinois or its qualified
764	764	15 programs by name) (i) directly to prospective
765	765	16 participants in its offering materials or makes a
766	766	17 public disclosure, such as a website posting; and (ii)
767	767	18 where applicable, to intermediaries selling the
768	768	19 out-of-state program in the same manner that the
769	769	20 out-of-state program distributes its offering
770	770	21 materials;
771	771	22 (D-20.5) For taxable years beginning on or after
772	772	23 January 1, 2018, in the case of a distribution from a
773	773	24 qualified ABLE program under Section 529A of the
774	774	25 Internal Revenue Code, other than a distribution from
775	775	26 a qualified ABLE program created under Section 16.6 of
776	776
777	777
778	778
779	779
780	780
781	781	HB3039 - 21 - LRB103 26307 HLH 52667 b
782	782
783	783
784	784	HB3039- 22 -LRB103 26307 HLH 52667 b HB3039 - 22 - LRB103 26307 HLH 52667 b
785	785	HB3039 - 22 - LRB103 26307 HLH 52667 b
786	786	1 the State Treasurer Act, an amount equal to the amount
787	787	2 excluded from gross income under Section 529A(c)(1)(B)
788	788	3 of the Internal Revenue Code;
789	789	4 (D-21) For taxable years beginning on or after
790	790	5 January 1, 2007, in the case of transfer of moneys from
791	791	6 a qualified tuition program under Section 529 of the
792	792	7 Internal Revenue Code that is administered by the
793	793	8 State to an out-of-state program, an amount equal to
794	794	9 the amount of moneys previously deducted from base
795	795	10 income under subsection (a)(2)(Y) of this Section;
796	796	11 (D-21.5) For taxable years beginning on or after
797	797	12 January 1, 2018, in the case of the transfer of moneys
798	798	13 from a qualified tuition program under Section 529 or
799	799	14 a qualified ABLE program under Section 529A of the
800	800	15 Internal Revenue Code that is administered by this
801	801	16 State to an ABLE account established under an
802	802	17 out-of-state ABLE account program, an amount equal to
803	803	18 the contribution component of the transferred amount
804	804	19 that was previously deducted from base income under
805	805	20 subsection (a)(2)(Y) or subsection (a)(2)(HH) of this
806	806	21 Section;
807	807	22 (D-22) For taxable years beginning on or after
808	808	23 January 1, 2009, and prior to January 1, 2018, in the
809	809	24 case of a nonqualified withdrawal or refund of moneys
810	810	25 from a qualified tuition program under Section 529 of
811	811	26 the Internal Revenue Code administered by the State
812	812
813	813
814	814
815	815
816	816
817	817	HB3039 - 22 - LRB103 26307 HLH 52667 b
818	818
819	819
820	820	HB3039- 23 -LRB103 26307 HLH 52667 b HB3039 - 23 - LRB103 26307 HLH 52667 b
821	821	HB3039 - 23 - LRB103 26307 HLH 52667 b
822	822	1 that is not used for qualified expenses at an eligible
823	823	2 education institution, an amount equal to the
824	824	3 contribution component of the nonqualified withdrawal
825	825	4 or refund that was previously deducted from base
826	826	5 income under subsection (a)(2)(y) of this Section,
827	827	6 provided that the withdrawal or refund did not result
828	828	7 from the beneficiary's death or disability. For
829	829	8 taxable years beginning on or after January 1, 2018:
830	830	9 (1) in the case of a nonqualified withdrawal or
831	831	10 refund, as defined under Section 16.5 of the State
832	832	11 Treasurer Act, of moneys from a qualified tuition
833	833	12 program under Section 529 of the Internal Revenue Code
834	834	13 administered by the State, an amount equal to the
835	835	14 contribution component of the nonqualified withdrawal
836	836	15 or refund that was previously deducted from base
837	837	16 income under subsection (a)(2)(Y) of this Section, and
838	838	17 (2) in the case of a nonqualified withdrawal or refund
839	839	18 from a qualified ABLE program under Section 529A of
840	840	19 the Internal Revenue Code administered by the State
841	841	20 that is not used for qualified disability expenses, an
842	842	21 amount equal to the contribution component of the
843	843	22 nonqualified withdrawal or refund that was previously
844	844	23 deducted from base income under subsection (a)(2)(HH)
845	845	24 of this Section;
846	846	25 (D-23) An amount equal to the credit allowable to
847	847	26 the taxpayer under Section 218(a) of this Act,
848	848
849	849
850	850
851	851
852	852
853	853	HB3039 - 23 - LRB103 26307 HLH 52667 b
854	854
855	855
856	856	HB3039- 24 -LRB103 26307 HLH 52667 b HB3039 - 24 - LRB103 26307 HLH 52667 b
857	857	HB3039 - 24 - LRB103 26307 HLH 52667 b
858	858	1 determined without regard to Section 218(c) of this
859	859	2 Act;
860	860	3 (D-24) For taxable years ending on or after
861	861	4 December 31, 2017, an amount equal to the deduction
862	862	5 allowed under Section 199 of the Internal Revenue Code
863	863	6 for the taxable year;
864	864	7 (D-25) In the case of a resident, an amount equal
865	865	8 to the amount of tax for which a credit is allowed
866	866	9 pursuant to Section 201(p)(7) of this Act;
867	867	10 (D-26) The amount recognized as a net gain for the
868	868	11 taxable year under the Extremely High Wealth
869	869	12 Mark-to-Market Tax Act.
870	870	13 and by deducting from the total so obtained the sum of the
871	871	14 following amounts:
872	872	15 (E) For taxable years ending before December 31,
873	873	16 2001, any amount included in such total in respect of
874	874	17 any compensation (including but not limited to any
875	875	18 compensation paid or accrued to a serviceman while a
876	876	19 prisoner of war or missing in action) paid to a
877	877	20 resident by reason of being on active duty in the Armed
878	878	21 Forces of the United States and in respect of any
879	879	22 compensation paid or accrued to a resident who as a
880	880	23 governmental employee was a prisoner of war or missing
881	881	24 in action, and in respect of any compensation paid to a
882	882	25 resident in 1971 or thereafter for annual training
883	883	26 performed pursuant to Sections 502 and 503, Title 32,
884	884
885	885
886	886
887	887
888	888
889	889	HB3039 - 24 - LRB103 26307 HLH 52667 b
890	890
891	891
892	892	HB3039- 25 -LRB103 26307 HLH 52667 b HB3039 - 25 - LRB103 26307 HLH 52667 b
893	893	HB3039 - 25 - LRB103 26307 HLH 52667 b
894	894	1 United States Code as a member of the Illinois
895	895	2 National Guard or, beginning with taxable years ending
896	896	3 on or after December 31, 2007, the National Guard of
897	897	4 any other state. For taxable years ending on or after
898	898	5 December 31, 2001, any amount included in such total
899	899	6 in respect of any compensation (including but not
900	900	7 limited to any compensation paid or accrued to a
901	901	8 serviceman while a prisoner of war or missing in
902	902	9 action) paid to a resident by reason of being a member
903	903	10 of any component of the Armed Forces of the United
904	904	11 States and in respect of any compensation paid or
905	905	12 accrued to a resident who as a governmental employee
906	906	13 was a prisoner of war or missing in action, and in
907	907	14 respect of any compensation paid to a resident in 2001
908	908	15 or thereafter by reason of being a member of the
909	909	16 Illinois National Guard or, beginning with taxable
910	910	17 years ending on or after December 31, 2007, the
911	911	18 National Guard of any other state. The provisions of
912	912	19 this subparagraph (E) are exempt from the provisions
913	913	20 of Section 250;
914	914	21 (F) An amount equal to all amounts included in
915	915	22 such total pursuant to the provisions of Sections
916	916	23 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
917	917	24 408 of the Internal Revenue Code, or included in such
918	918	25 total as distributions under the provisions of any
919	919	26 retirement or disability plan for employees of any
920	920
921	921
922	922
923	923
924	924
925	925	HB3039 - 25 - LRB103 26307 HLH 52667 b
926	926
927	927
928	928	HB3039- 26 -LRB103 26307 HLH 52667 b HB3039 - 26 - LRB103 26307 HLH 52667 b
929	929	HB3039 - 26 - LRB103 26307 HLH 52667 b
930	930	1 governmental agency or unit, or retirement payments to
931	931	2 retired partners, which payments are excluded in
932	932	3 computing net earnings from self employment by Section
933	933	4 1402 of the Internal Revenue Code and regulations
934	934	5 adopted pursuant thereto;
935	935	6 (G) The valuation limitation amount;
936	936	7 (H) An amount equal to the amount of any tax
937	937	8 imposed by this Act which was refunded to the taxpayer
938	938	9 and included in such total for the taxable year;
939	939	10 (I) An amount equal to all amounts included in
940	940	11 such total pursuant to the provisions of Section 111
941	941	12 of the Internal Revenue Code as a recovery of items
942	942	13 previously deducted from adjusted gross income in the
943	943	14 computation of taxable income;
944	944	15 (J) An amount equal to those dividends included in
945	945	16 such total which were paid by a corporation which
946	946	17 conducts business operations in a River Edge
947	947	18 Redevelopment Zone or zones created under the River
948	948	19 Edge Redevelopment Zone Act, and conducts
949	949	20 substantially all of its operations in a River Edge
950	950	21 Redevelopment Zone or zones. This subparagraph (J) is
951	951	22 exempt from the provisions of Section 250;
952	952	23 (K) An amount equal to those dividends included in
953	953	24 such total that were paid by a corporation that
954	954	25 conducts business operations in a federally designated
955	955	26 Foreign Trade Zone or Sub-Zone and that is designated
956	956
957	957
958	958
959	959
960	960
961	961	HB3039 - 26 - LRB103 26307 HLH 52667 b
962	962
963	963
964	964	HB3039- 27 -LRB103 26307 HLH 52667 b HB3039 - 27 - LRB103 26307 HLH 52667 b
965	965	HB3039 - 27 - LRB103 26307 HLH 52667 b
966	966	1 a High Impact Business located in Illinois; provided
967	967	2 that dividends eligible for the deduction provided in
968	968	3 subparagraph (J) of paragraph (2) of this subsection
969	969	4 shall not be eligible for the deduction provided under
970	970	5 this subparagraph (K);
971	971	6 (L) For taxable years ending after December 31,
972	972	7 1983, an amount equal to all social security benefits
973	973	8 and railroad retirement benefits included in such
974	974	9 total pursuant to Sections 72(r) and 86 of the
975	975	10 Internal Revenue Code;
976	976	11 (M) With the exception of any amounts subtracted
977	977	12 under subparagraph (N), an amount equal to the sum of
978	978	13 all amounts disallowed as deductions by (i) Sections
979	979	14 171(a)(2) and 265(a)(2) of the Internal Revenue Code,
980	980	15 and all amounts of expenses allocable to interest and
981	981	16 disallowed as deductions by Section 265(a)(1) of the
982	982	17 Internal Revenue Code; and (ii) for taxable years
983	983	18 ending on or after August 13, 1999, Sections
984	984	19 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
985	985	20 Internal Revenue Code, plus, for taxable years ending
986	986	21 on or after December 31, 2011, Section 45G(e)(3) of
987	987	22 the Internal Revenue Code and, for taxable years
988	988	23 ending on or after December 31, 2008, any amount
989	989	24 included in gross income under Section 87 of the
990	990	25 Internal Revenue Code; the provisions of this
991	991	26 subparagraph are exempt from the provisions of Section
992	992
993	993
994	994
995	995
996	996
997	997	HB3039 - 27 - LRB103 26307 HLH 52667 b
998	998
999	999
1000	1000	HB3039- 28 -LRB103 26307 HLH 52667 b HB3039 - 28 - LRB103 26307 HLH 52667 b
1001	1001	HB3039 - 28 - LRB103 26307 HLH 52667 b
1002	1002	1 250;
1003	1003	2 (N) An amount equal to all amounts included in
1004	1004	3 such total which are exempt from taxation by this
1005	1005	4 State either by reason of its statutes or Constitution
1006	1006	5 or by reason of the Constitution, treaties or statutes
1007	1007	6 of the United States; provided that, in the case of any
1008	1008	7 statute of this State that exempts income derived from
1009	1009	8 bonds or other obligations from the tax imposed under
1010	1010	9 this Act, the amount exempted shall be the interest
1011	1011	10 net of bond premium amortization;
1012	1012	11 (O) An amount equal to any contribution made to a
1013	1013	12 job training project established pursuant to the Tax
1014	1014	13 Increment Allocation Redevelopment Act;
1015	1015	14 (P) An amount equal to the amount of the deduction
1016	1016	15 used to compute the federal income tax credit for
1017	1017	16 restoration of substantial amounts held under claim of
1018	1018	17 right for the taxable year pursuant to Section 1341 of
1019	1019	18 the Internal Revenue Code or of any itemized deduction
1020	1020	19 taken from adjusted gross income in the computation of
1021	1021	20 taxable income for restoration of substantial amounts
1022	1022	21 held under claim of right for the taxable year;
1023	1023	22 (Q) An amount equal to any amounts included in
1024	1024	23 such total, received by the taxpayer as an
1025	1025	24 acceleration in the payment of life, endowment or
1026	1026	25 annuity benefits in advance of the time they would
1027	1027	26 otherwise be payable as an indemnity for a terminal
1028	1028
1029	1029
1030	1030
1031	1031
1032	1032
1033	1033	HB3039 - 28 - LRB103 26307 HLH 52667 b
1034	1034
1035	1035
1036	1036	HB3039- 29 -LRB103 26307 HLH 52667 b HB3039 - 29 - LRB103 26307 HLH 52667 b
1037	1037	HB3039 - 29 - LRB103 26307 HLH 52667 b
1038	1038	1 illness;
1039	1039	2 (R) An amount equal to the amount of any federal or
1040	1040	3 State bonus paid to veterans of the Persian Gulf War;
1041	1041	4 (S) An amount, to the extent included in adjusted
1042	1042	5 gross income, equal to the amount of a contribution
1043	1043	6 made in the taxable year on behalf of the taxpayer to a
1044	1044	7 medical care savings account established under the
1045	1045	8 Medical Care Savings Account Act or the Medical Care
1046	1046	9 Savings Account Act of 2000 to the extent the
1047	1047	10 contribution is accepted by the account administrator
1048	1048	11 as provided in that Act;
1049	1049	12 (T) An amount, to the extent included in adjusted
1050	1050	13 gross income, equal to the amount of interest earned
1051	1051	14 in the taxable year on a medical care savings account
1052	1052	15 established under the Medical Care Savings Account Act
1053	1053	16 or the Medical Care Savings Account Act of 2000 on
1054	1054	17 behalf of the taxpayer, other than interest added
1055	1055	18 pursuant to item (D-5) of this paragraph (2);
1056	1056	19 (U) For one taxable year beginning on or after
1057	1057	20 January 1, 1994, an amount equal to the total amount of
1058	1058	21 tax imposed and paid under subsections (a) and (b) of
1059	1059	22 Section 201 of this Act on grant amounts received by
1060	1060	23 the taxpayer under the Nursing Home Grant Assistance
1061	1061	24 Act during the taxpayer's taxable years 1992 and 1993;
1062	1062	25 (V) Beginning with tax years ending on or after
1063	1063	26 December 31, 1995 and ending with tax years ending on
1064	1064
1065	1065
1066	1066
1067	1067
1068	1068
1069	1069	HB3039 - 29 - LRB103 26307 HLH 52667 b
1070	1070
1071	1071
1072	1072	HB3039- 30 -LRB103 26307 HLH 52667 b HB3039 - 30 - LRB103 26307 HLH 52667 b
1073	1073	HB3039 - 30 - LRB103 26307 HLH 52667 b
1074	1074	1 or before December 31, 2004, an amount equal to the
1075	1075	2 amount paid by a taxpayer who is a self-employed
1076	1076	3 taxpayer, a partner of a partnership, or a shareholder
1077	1077	4 in a Subchapter S corporation for health insurance or
1078	1078	5 long-term care insurance for that taxpayer or that
1079	1079	6 taxpayer's spouse or dependents, to the extent that
1080	1080	7 the amount paid for that health insurance or long-term
1081	1081	8 care insurance may be deducted under Section 213 of
1082	1082	9 the Internal Revenue Code, has not been deducted on
1083	1083	10 the federal income tax return of the taxpayer, and
1084	1084	11 does not exceed the taxable income attributable to
1085	1085	12 that taxpayer's income, self-employment income, or
1086	1086	13 Subchapter S corporation income; except that no
1087	1087	14 deduction shall be allowed under this item (V) if the
1088	1088	15 taxpayer is eligible to participate in any health
1089	1089	16 insurance or long-term care insurance plan of an
1090	1090	17 employer of the taxpayer or the taxpayer's spouse. The
1091	1091	18 amount of the health insurance and long-term care
1092	1092	19 insurance subtracted under this item (V) shall be
1093	1093	20 determined by multiplying total health insurance and
1094	1094	21 long-term care insurance premiums paid by the taxpayer
1095	1095	22 times a number that represents the fractional
1096	1096	23 percentage of eligible medical expenses under Section
1097	1097	24 213 of the Internal Revenue Code of 1986 not actually
1098	1098	25 deducted on the taxpayer's federal income tax return;
1099	1099	26 (W) For taxable years beginning on or after
1100	1100
1101	1101
1102	1102
1103	1103
1104	1104
1105	1105	HB3039 - 30 - LRB103 26307 HLH 52667 b
1106	1106
1107	1107
1108	1108	HB3039- 31 -LRB103 26307 HLH 52667 b HB3039 - 31 - LRB103 26307 HLH 52667 b
1109	1109	HB3039 - 31 - LRB103 26307 HLH 52667 b
1110	1110	1 January 1, 1998, all amounts included in the
1111	1111	2 taxpayer's federal gross income in the taxable year
1112	1112	3 from amounts converted from a regular IRA to a Roth
1113	1113	4 IRA. This paragraph is exempt from the provisions of
1114	1114	5 Section 250;
1115	1115	6 (X) For taxable year 1999 and thereafter, an
1116	1116	7 amount equal to the amount of any (i) distributions,
1117	1117	8 to the extent includible in gross income for federal
1118	1118	9 income tax purposes, made to the taxpayer because of
1119	1119	10 his or her status as a victim of persecution for racial
1120	1120	11 or religious reasons by Nazi Germany or any other Axis
1121	1121	12 regime or as an heir of the victim and (ii) items of
1122	1122	13 income, to the extent includible in gross income for
1123	1123	14 federal income tax purposes, attributable to, derived
1124	1124	15 from or in any way related to assets stolen from,
1125	1125	16 hidden from, or otherwise lost to a victim of
1126	1126	17 persecution for racial or religious reasons by Nazi
1127	1127	18 Germany or any other Axis regime immediately prior to,
1128	1128	19 during, and immediately after World War II, including,
1129	1129	20 but not limited to, interest on the proceeds
1130	1130	21 receivable as insurance under policies issued to a
1131	1131	22 victim of persecution for racial or religious reasons
1132	1132	23 by Nazi Germany or any other Axis regime by European
1133	1133	24 insurance companies immediately prior to and during
1134	1134	25 World War II; provided, however, this subtraction from
1135	1135	26 federal adjusted gross income does not apply to assets
1136	1136
1137	1137
1138	1138
1139	1139
1140	1140
1141	1141	HB3039 - 31 - LRB103 26307 HLH 52667 b
1142	1142
1143	1143
1144	1144	HB3039- 32 -LRB103 26307 HLH 52667 b HB3039 - 32 - LRB103 26307 HLH 52667 b
1145	1145	HB3039 - 32 - LRB103 26307 HLH 52667 b
1146	1146	1 acquired with such assets or with the proceeds from
1147	1147	2 the sale of such assets; provided, further, this
1148	1148	3 paragraph shall only apply to a taxpayer who was the
1149	1149	4 first recipient of such assets after their recovery
1150	1150	5 and who is a victim of persecution for racial or
1151	1151	6 religious reasons by Nazi Germany or any other Axis
1152	1152	7 regime or as an heir of the victim. The amount of and
1153	1153	8 the eligibility for any public assistance, benefit, or
1154	1154	9 similar entitlement is not affected by the inclusion
1155	1155	10 of items (i) and (ii) of this paragraph in gross income
1156	1156	11 for federal income tax purposes. This paragraph is
1157	1157	12 exempt from the provisions of Section 250;
1158	1158	13 (Y) For taxable years beginning on or after
1159	1159	14 January 1, 2002 and ending on or before December 31,
1160	1160	15 2004, moneys contributed in the taxable year to a
1161	1161	16 College Savings Pool account under Section 16.5 of the
1162	1162	17 State Treasurer Act, except that amounts excluded from
1163	1163	18 gross income under Section 529(c)(3)(C)(i) of the
1164	1164	19 Internal Revenue Code shall not be considered moneys
1165	1165	20 contributed under this subparagraph (Y). For taxable
1166	1166	21 years beginning on or after January 1, 2005, a maximum
1167	1167	22 of $10,000 contributed in the taxable year to (i) a
1168	1168	23 College Savings Pool account under Section 16.5 of the
1169	1169	24 State Treasurer Act or (ii) the Illinois Prepaid
1170	1170	25 Tuition Trust Fund, except that amounts excluded from
1171	1171	26 gross income under Section 529(c)(3)(C)(i) of the
1172	1172
1173	1173
1174	1174
1175	1175
1176	1176
1177	1177	HB3039 - 32 - LRB103 26307 HLH 52667 b
1178	1178
1179	1179
1180	1180	HB3039- 33 -LRB103 26307 HLH 52667 b HB3039 - 33 - LRB103 26307 HLH 52667 b
1181	1181	HB3039 - 33 - LRB103 26307 HLH 52667 b
1182	1182	1 Internal Revenue Code shall not be considered moneys
1183	1183	2 contributed under this subparagraph (Y). For purposes
1184	1184	3 of this subparagraph, contributions made by an
1185	1185	4 employer on behalf of an employee, or matching
1186	1186	5 contributions made by an employee, shall be treated as
1187	1187	6 made by the employee. This subparagraph (Y) is exempt
1188	1188	7 from the provisions of Section 250;
1189	1189	8 (Z) For taxable years 2001 and thereafter, for the
1190	1190	9 taxable year in which the bonus depreciation deduction
1191	1191	10 is taken on the taxpayer's federal income tax return
1192	1192	11 under subsection (k) of Section 168 of the Internal
1193	1193	12 Revenue Code and for each applicable taxable year
1194	1194	13 thereafter, an amount equal to "x", where:
1195	1195	14 (1) "y" equals the amount of the depreciation
1196	1196	15 deduction taken for the taxable year on the
1197	1197	16 taxpayer's federal income tax return on property
1198	1198	17 for which the bonus depreciation deduction was
1199	1199	18 taken in any year under subsection (k) of Section
1200	1200	19 168 of the Internal Revenue Code, but not
1201	1201	20 including the bonus depreciation deduction;
1202	1202	21 (2) for taxable years ending on or before
1203	1203	22 December 31, 2005, "x" equals "y" multiplied by 30
1204	1204	23 and then divided by 70 (or "y" multiplied by
1205	1205	24 0.429); and
1206	1206	25 (3) for taxable years ending after December
1207	1207	26 31, 2005:
1208	1208
1209	1209
1210	1210
1211	1211
1212	1212
1213	1213	HB3039 - 33 - LRB103 26307 HLH 52667 b
1214	1214
1215	1215
1216	1216	HB3039- 34 -LRB103 26307 HLH 52667 b HB3039 - 34 - LRB103 26307 HLH 52667 b
1217	1217	HB3039 - 34 - LRB103 26307 HLH 52667 b
1218	1218	1 (i) for property on which a bonus
1219	1219	2 depreciation deduction of 30% of the adjusted
1220	1220	3 basis was taken, "x" equals "y" multiplied by
1221	1221	4 30 and then divided by 70 (or "y" multiplied
1222	1222	5 by 0.429);
1223	1223	6 (ii) for property on which a bonus
1224	1224	7 depreciation deduction of 50% of the adjusted
1225	1225	8 basis was taken, "x" equals "y" multiplied by
1226	1226	9 1.0;
1227	1227	10 (iii) for property on which a bonus
1228	1228	11 depreciation deduction of 100% of the adjusted
1229	1229	12 basis was taken in a taxable year ending on or
1230	1230	13 after December 31, 2021, "x" equals the
1231	1231	14 depreciation deduction that would be allowed
1232	1232	15 on that property if the taxpayer had made the
1233	1233	16 election under Section 168(k)(7) of the
1234	1234	17 Internal Revenue Code to not claim bonus
1235	1235	18 depreciation on that property; and
1236	1236	19 (iv) for property on which a bonus
1237	1237	20 depreciation deduction of a percentage other
1238	1238	21 than 30%, 50% or 100% of the adjusted basis
1239	1239	22 was taken in a taxable year ending on or after
1240	1240	23 December 31, 2021, "x" equals "y" multiplied
1241	1241	24 by 100 times the percentage bonus depreciation
1242	1242	25 on the property (that is, 100(bonus%)) and
1243	1243	26 then divided by 100 times 1 minus the
1244	1244
1245	1245
1246	1246
1247	1247
1248	1248
1249	1249	HB3039 - 34 - LRB103 26307 HLH 52667 b
1250	1250
1251	1251
1252	1252	HB3039- 35 -LRB103 26307 HLH 52667 b HB3039 - 35 - LRB103 26307 HLH 52667 b
1253	1253	HB3039 - 35 - LRB103 26307 HLH 52667 b
1254	1254	1 percentage bonus depreciation on the property
1255	1255	2 (that is, 100(1bonus%)).
1256	1256	3 The aggregate amount deducted under this
1257	1257	4 subparagraph in all taxable years for any one piece of
1258	1258	5 property may not exceed the amount of the bonus
1259	1259	6 depreciation deduction taken on that property on the
1260	1260	7 taxpayer's federal income tax return under subsection
1261	1261	8 (k) of Section 168 of the Internal Revenue Code. This
1262	1262	9 subparagraph (Z) is exempt from the provisions of
1263	1263	10 Section 250;
1264	1264	11 (AA) If the taxpayer sells, transfers, abandons,
1265	1265	12 or otherwise disposes of property for which the
1266	1266	13 taxpayer was required in any taxable year to make an
1267	1267	14 addition modification under subparagraph (D-15), then
1268	1268	15 an amount equal to that addition modification.
1269	1269	16 If the taxpayer continues to own property through
1270	1270	17 the last day of the last tax year for which a
1271	1271	18 subtraction is allowed with respect to that property
1272	1272	19 under subparagraph (Z) and for which the taxpayer was
1273	1273	20 required in any taxable year to make an addition
1274	1274	21 modification under subparagraph (D-15), then an amount
1275	1275	22 equal to that addition modification.
1276	1276	23 The taxpayer is allowed to take the deduction
1277	1277	24 under this subparagraph only once with respect to any
1278	1278	25 one piece of property.
1279	1279	26 This subparagraph (AA) is exempt from the
1280	1280
1281	1281
1282	1282
1283	1283
1284	1284
1285	1285	HB3039 - 35 - LRB103 26307 HLH 52667 b
1286	1286
1287	1287
1288	1288	HB3039- 36 -LRB103 26307 HLH 52667 b HB3039 - 36 - LRB103 26307 HLH 52667 b
1289	1289	HB3039 - 36 - LRB103 26307 HLH 52667 b
1290	1290	1 provisions of Section 250;
1291	1291	2 (BB) Any amount included in adjusted gross income,
1292	1292	3 other than salary, received by a driver in a
1293	1293	4 ridesharing arrangement using a motor vehicle;
1294	1294	5 (CC) The amount of (i) any interest income (net of
1295	1295	6 the deductions allocable thereto) taken into account
1296	1296	7 for the taxable year with respect to a transaction
1297	1297	8 with a taxpayer that is required to make an addition
1298	1298	9 modification with respect to such transaction under
1299	1299	10 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
1300	1300	11 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
1301	1301	12 the amount of that addition modification, and (ii) any
1302	1302	13 income from intangible property (net of the deductions
1303	1303	14 allocable thereto) taken into account for the taxable
1304	1304	15 year with respect to a transaction with a taxpayer
1305	1305	16 that is required to make an addition modification with
1306	1306	17 respect to such transaction under Section
1307	1307	18 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
1308	1308	19 203(d)(2)(D-8), but not to exceed the amount of that
1309	1309	20 addition modification. This subparagraph (CC) is
1310	1310	21 exempt from the provisions of Section 250;
1311	1311	22 (DD) An amount equal to the interest income taken
1312	1312	23 into account for the taxable year (net of the
1313	1313	24 deductions allocable thereto) with respect to
1314	1314	25 transactions with (i) a foreign person who would be a
1315	1315	26 member of the taxpayer's unitary business group but
1316	1316
1317	1317
1318	1318
1319	1319
1320	1320
1321	1321	HB3039 - 36 - LRB103 26307 HLH 52667 b
1322	1322
1323	1323
1324	1324	HB3039- 37 -LRB103 26307 HLH 52667 b HB3039 - 37 - LRB103 26307 HLH 52667 b
1325	1325	HB3039 - 37 - LRB103 26307 HLH 52667 b
1326	1326	1 for the fact that the foreign person's business
1327	1327	2 activity outside the United States is 80% or more of
1328	1328	3 that person's total business activity and (ii) for
1329	1329	4 taxable years ending on or after December 31, 2008, to
1330	1330	5 a person who would be a member of the same unitary
1331	1331	6 business group but for the fact that the person is
1332	1332	7 prohibited under Section 1501(a)(27) from being
1333	1333	8 included in the unitary business group because he or
1334	1334	9 she is ordinarily required to apportion business
1335	1335	10 income under different subsections of Section 304, but
1336	1336	11 not to exceed the addition modification required to be
1337	1337	12 made for the same taxable year under Section
1338	1338	13 203(a)(2)(D-17) for interest paid, accrued, or
1339	1339	14 incurred, directly or indirectly, to the same person.
1340	1340	15 This subparagraph (DD) is exempt from the provisions
1341	1341	16 of Section 250;
1342	1342	17 (EE) An amount equal to the income from intangible
1343	1343	18 property taken into account for the taxable year (net
1344	1344	19 of the deductions allocable thereto) with respect to
1345	1345	20 transactions with (i) a foreign person who would be a
1346	1346	21 member of the taxpayer's unitary business group but
1347	1347	22 for the fact that the foreign person's business
1348	1348	23 activity outside the United States is 80% or more of
1349	1349	24 that person's total business activity and (ii) for
1350	1350	25 taxable years ending on or after December 31, 2008, to
1351	1351	26 a person who would be a member of the same unitary
1352	1352
1353	1353
1354	1354
1355	1355
1356	1356
1357	1357	HB3039 - 37 - LRB103 26307 HLH 52667 b
1358	1358
1359	1359
1360	1360	HB3039- 38 -LRB103 26307 HLH 52667 b HB3039 - 38 - LRB103 26307 HLH 52667 b
1361	1361	HB3039 - 38 - LRB103 26307 HLH 52667 b
1362	1362	1 business group but for the fact that the person is
1363	1363	2 prohibited under Section 1501(a)(27) from being
1364	1364	3 included in the unitary business group because he or
1365	1365	4 she is ordinarily required to apportion business
1366	1366	5 income under different subsections of Section 304, but
1367	1367	6 not to exceed the addition modification required to be
1368	1368	7 made for the same taxable year under Section
1369	1369	8 203(a)(2)(D-18) for intangible expenses and costs
1370	1370	9 paid, accrued, or incurred, directly or indirectly, to
1371	1371	10 the same foreign person. This subparagraph (EE) is
1372	1372	11 exempt from the provisions of Section 250;
1373	1373	12 (FF) An amount equal to any amount awarded to the
1374	1374	13 taxpayer during the taxable year by the Court of
1375	1375	14 Claims under subsection (c) of Section 8 of the Court
1376	1376	15 of Claims Act for time unjustly served in a State
1377	1377	16 prison. This subparagraph (FF) is exempt from the
1378	1378	17 provisions of Section 250;
1379	1379	18 (GG) For taxable years ending on or after December
1380	1380	19 31, 2011, in the case of a taxpayer who was required to
1381	1381	20 add back any insurance premiums under Section
1382	1382	21 203(a)(2)(D-19), such taxpayer may elect to subtract
1383	1383	22 that part of a reimbursement received from the
1384	1384	23 insurance company equal to the amount of the expense
1385	1385	24 or loss (including expenses incurred by the insurance
1386	1386	25 company) that would have been taken into account as a
1387	1387	26 deduction for federal income tax purposes if the
1388	1388
1389	1389
1390	1390
1391	1391
1392	1392
1393	1393	HB3039 - 38 - LRB103 26307 HLH 52667 b
1394	1394
1395	1395
1396	1396	HB3039- 39 -LRB103 26307 HLH 52667 b HB3039 - 39 - LRB103 26307 HLH 52667 b
1397	1397	HB3039 - 39 - LRB103 26307 HLH 52667 b
1398	1398	1 expense or loss had been uninsured. If a taxpayer
1399	1399	2 makes the election provided for by this subparagraph
1400	1400	3 (GG), the insurer to which the premiums were paid must
1401	1401	4 add back to income the amount subtracted by the
1402	1402	5 taxpayer pursuant to this subparagraph (GG). This
1403	1403	6 subparagraph (GG) is exempt from the provisions of
1404	1404	7 Section 250;
1405	1405	8 (HH) For taxable years beginning on or after
1406	1406	9 January 1, 2018 and prior to January 1, 2028, a maximum
1407	1407	10 of $10,000 contributed in the taxable year to a
1408	1408	11 qualified ABLE account under Section 16.6 of the State
1409	1409	12 Treasurer Act, except that amounts excluded from gross
1410	1410	13 income under Section 529(c)(3)(C)(i) or Section
1411	1411	14 529A(c)(1)(C) of the Internal Revenue Code shall not
1412	1412	15 be considered moneys contributed under this
1413	1413	16 subparagraph (HH). For purposes of this subparagraph
1414	1414	17 (HH), contributions made by an employer on behalf of
1415	1415	18 an employee, or matching contributions made by an
1416	1416	19 employee, shall be treated as made by the employee;
1417	1417	20 and
1418	1418	21 (II) For taxable years that begin on or after
1419	1419	22 January 1, 2021 and begin before January 1, 2026, the
1420	1420	23 amount that is included in the taxpayer's federal
1421	1421	24 adjusted gross income pursuant to Section 61 of the
1422	1422	25 Internal Revenue Code as discharge of indebtedness
1423	1423	26 attributable to student loan forgiveness and that is
1424	1424
1425	1425
1426	1426
1427	1427
1428	1428
1429	1429	HB3039 - 39 - LRB103 26307 HLH 52667 b
1430	1430
1431	1431
1432	1432	HB3039- 40 -LRB103 26307 HLH 52667 b HB3039 - 40 - LRB103 26307 HLH 52667 b
1433	1433	HB3039 - 40 - LRB103 26307 HLH 52667 b
1434	1434	1 not excluded from the taxpayer's federal adjusted
1435	1435	2 gross income pursuant to paragraph (5) of subsection
1436	1436	3 (f) of Section 108 of the Internal Revenue Code; and .
1437	1437	4 (JJ) An amount eligible to be taken as a loss in
1438	1438	5 the taxable year under the Extremely High Wealth
1439	1439	6 Mark-to-Market Tax Act that is no otherwise deducted
1440	1440	7 under this Act.
1441	1441	8 (b) Corporations.
1442	1442	9 (1) In general. In the case of a corporation, base
1443	1443	10 income means an amount equal to the taxpayer's taxable
1444	1444	11 income for the taxable year as modified by paragraph (2).
1445	1445	12 (2) Modifications. The taxable income referred to in
1446	1446	13 paragraph (1) shall be modified by adding thereto the sum
1447	1447	14 of the following amounts:
1448	1448	15 (A) An amount equal to all amounts paid or accrued
1449	1449	16 to the taxpayer as interest and all distributions
1450	1450	17 received from regulated investment companies during
1451	1451	18 the taxable year to the extent excluded from gross
1452	1452	19 income in the computation of taxable income;
1453	1453	20 (B) An amount equal to the amount of tax imposed by
1454	1454	21 this Act to the extent deducted from gross income in
1455	1455	22 the computation of taxable income for the taxable
1456	1456	23 year;
1457	1457	24 (C) In the case of a regulated investment company,
1458	1458	25 an amount equal to the excess of (i) the net long-term
1459	1459
1460	1460
1461	1461
1462	1462
1463	1463
1464	1464	HB3039 - 40 - LRB103 26307 HLH 52667 b
1465	1465
1466	1466
1467	1467	HB3039- 41 -LRB103 26307 HLH 52667 b HB3039 - 41 - LRB103 26307 HLH 52667 b
1468	1468	HB3039 - 41 - LRB103 26307 HLH 52667 b
1469	1469	1 capital gain for the taxable year, over (ii) the
1470	1470	2 amount of the capital gain dividends designated as
1471	1471	3 such in accordance with Section 852(b)(3)(C) of the
1472	1472	4 Internal Revenue Code and any amount designated under
1473	1473	5 Section 852(b)(3)(D) of the Internal Revenue Code,
1474	1474	6 attributable to the taxable year (this amendatory Act
1475	1475	7 of 1995 (Public Act 89-89) is declarative of existing
1476	1476	8 law and is not a new enactment);
1477	1477	9 (D) The amount of any net operating loss deduction
1478	1478	10 taken in arriving at taxable income, other than a net
1479	1479	11 operating loss carried forward from a taxable year
1480	1480	12 ending prior to December 31, 1986;
1481	1481	13 (E) For taxable years in which a net operating
1482	1482	14 loss carryback or carryforward from a taxable year
1483	1483	15 ending prior to December 31, 1986 is an element of
1484	1484	16 taxable income under paragraph (1) of subsection (e)
1485	1485	17 or subparagraph (E) of paragraph (2) of subsection
1486	1486	18 (e), the amount by which addition modifications other
1487	1487	19 than those provided by this subparagraph (E) exceeded
1488	1488	20 subtraction modifications in such earlier taxable
1489	1489	21 year, with the following limitations applied in the
1490	1490	22 order that they are listed:
1491	1491	23 (i) the addition modification relating to the
1492	1492	24 net operating loss carried back or forward to the
1493	1493	25 taxable year from any taxable year ending prior to
1494	1494	26 December 31, 1986 shall be reduced by the amount
1495	1495
1496	1496
1497	1497
1498	1498
1499	1499
1500	1500	HB3039 - 41 - LRB103 26307 HLH 52667 b
1501	1501
1502	1502
1503	1503	HB3039- 42 -LRB103 26307 HLH 52667 b HB3039 - 42 - LRB103 26307 HLH 52667 b
1504	1504	HB3039 - 42 - LRB103 26307 HLH 52667 b
1505	1505	1 of addition modification under this subparagraph
1506	1506	2 (E) which related to that net operating loss and
1507	1507	3 which was taken into account in calculating the
1508	1508	4 base income of an earlier taxable year, and
1509	1509	5 (ii) the addition modification relating to the
1510	1510	6 net operating loss carried back or forward to the
1511	1511	7 taxable year from any taxable year ending prior to
1512	1512	8 December 31, 1986 shall not exceed the amount of
1513	1513	9 such carryback or carryforward;
1514	1514	10 For taxable years in which there is a net
1515	1515	11 operating loss carryback or carryforward from more
1516	1516	12 than one other taxable year ending prior to December
1517	1517	13 31, 1986, the addition modification provided in this
1518	1518	14 subparagraph (E) shall be the sum of the amounts
1519	1519	15 computed independently under the preceding provisions
1520	1520	16 of this subparagraph (E) for each such taxable year;
1521	1521	17 (E-5) For taxable years ending after December 31,
1522	1522	18 1997, an amount equal to any eligible remediation
1523	1523	19 costs that the corporation deducted in computing
1524	1524	20 adjusted gross income and for which the corporation
1525	1525	21 claims a credit under subsection (l) of Section 201;
1526	1526	22 (E-10) For taxable years 2001 and thereafter, an
1527	1527	23 amount equal to the bonus depreciation deduction taken
1528	1528	24 on the taxpayer's federal income tax return for the
1529	1529	25 taxable year under subsection (k) of Section 168 of
1530	1530	26 the Internal Revenue Code;
1531	1531
1532	1532
1533	1533
1534	1534
1535	1535
1536	1536	HB3039 - 42 - LRB103 26307 HLH 52667 b
1537	1537
1538	1538
1539	1539	HB3039- 43 -LRB103 26307 HLH 52667 b HB3039 - 43 - LRB103 26307 HLH 52667 b
1540	1540	HB3039 - 43 - LRB103 26307 HLH 52667 b
1541	1541	1 (E-11) If the taxpayer sells, transfers, abandons,
1542	1542	2 or otherwise disposes of property for which the
1543	1543	3 taxpayer was required in any taxable year to make an
1544	1544	4 addition modification under subparagraph (E-10), then
1545	1545	5 an amount equal to the aggregate amount of the
1546	1546	6 deductions taken in all taxable years under
1547	1547	7 subparagraph (T) with respect to that property.
1548	1548	8 If the taxpayer continues to own property through
1549	1549	9 the last day of the last tax year for which a
1550	1550	10 subtraction is allowed with respect to that property
1551	1551	11 under subparagraph (T) and for which the taxpayer was
1552	1552	12 allowed in any taxable year to make a subtraction
1553	1553	13 modification under subparagraph (T), then an amount
1554	1554	14 equal to that subtraction modification.
1555	1555	15 The taxpayer is required to make the addition
1556	1556	16 modification under this subparagraph only once with
1557	1557	17 respect to any one piece of property;
1558	1558	18 (E-12) An amount equal to the amount otherwise
1559	1559	19 allowed as a deduction in computing base income for
1560	1560	20 interest paid, accrued, or incurred, directly or
1561	1561	21 indirectly, (i) for taxable years ending on or after
1562	1562	22 December 31, 2004, to a foreign person who would be a
1563	1563	23 member of the same unitary business group but for the
1564	1564	24 fact the foreign person's business activity outside
1565	1565	25 the United States is 80% or more of the foreign
1566	1566	26 person's total business activity and (ii) for taxable
1567	1567
1568	1568
1569	1569
1570	1570
1571	1571
1572	1572	HB3039 - 43 - LRB103 26307 HLH 52667 b
1573	1573
1574	1574
1575	1575	HB3039- 44 -LRB103 26307 HLH 52667 b HB3039 - 44 - LRB103 26307 HLH 52667 b
1576	1576	HB3039 - 44 - LRB103 26307 HLH 52667 b
1577	1577	1 years ending on or after December 31, 2008, to a person
1578	1578	2 who would be a member of the same unitary business
1579	1579	3 group but for the fact that the person is prohibited
1580	1580	4 under Section 1501(a)(27) from being included in the
1581	1581	5 unitary business group because he or she is ordinarily
1582	1582	6 required to apportion business income under different
1583	1583	7 subsections of Section 304. The addition modification
1584	1584	8 required by this subparagraph shall be reduced to the
1585	1585	9 extent that dividends were included in base income of
1586	1586	10 the unitary group for the same taxable year and
1587	1587	11 received by the taxpayer or by a member of the
1588	1588	12 taxpayer's unitary business group (including amounts
1589	1589	13 included in gross income pursuant to Sections 951
1590	1590	14 through 964 of the Internal Revenue Code and amounts
1591	1591	15 included in gross income under Section 78 of the
1592	1592	16 Internal Revenue Code) with respect to the stock of
1593	1593	17 the same person to whom the interest was paid,
1594	1594	18 accrued, or incurred.
1595	1595	19 This paragraph shall not apply to the following:
1596	1596	20 (i) an item of interest paid, accrued, or
1597	1597	21 incurred, directly or indirectly, to a person who
1598	1598	22 is subject in a foreign country or state, other
1599	1599	23 than a state which requires mandatory unitary
1600	1600	24 reporting, to a tax on or measured by net income
1601	1601	25 with respect to such interest; or
1602	1602	26 (ii) an item of interest paid, accrued, or
1603	1603
1604	1604
1605	1605
1606	1606
1607	1607
1608	1608	HB3039 - 44 - LRB103 26307 HLH 52667 b
1609	1609
1610	1610
1611	1611	HB3039- 45 -LRB103 26307 HLH 52667 b HB3039 - 45 - LRB103 26307 HLH 52667 b
1612	1612	HB3039 - 45 - LRB103 26307 HLH 52667 b
1613	1613	1 incurred, directly or indirectly, to a person if
1614	1614	2 the taxpayer can establish, based on a
1615	1615	3 preponderance of the evidence, both of the
1616	1616	4 following:
1617	1617	5 (a) the person, during the same taxable
1618	1618	6 year, paid, accrued, or incurred, the interest
1619	1619	7 to a person that is not a related member, and
1620	1620	8 (b) the transaction giving rise to the
1621	1621	9 interest expense between the taxpayer and the
1622	1622	10 person did not have as a principal purpose the
1623	1623	11 avoidance of Illinois income tax, and is paid
1624	1624	12 pursuant to a contract or agreement that
1625	1625	13 reflects an arm's-length interest rate and
1626	1626	14 terms; or
1627	1627	15 (iii) the taxpayer can establish, based on
1628	1628	16 clear and convincing evidence, that the interest
1629	1629	17 paid, accrued, or incurred relates to a contract
1630	1630	18 or agreement entered into at arm's-length rates
1631	1631	19 and terms and the principal purpose for the
1632	1632	20 payment is not federal or Illinois tax avoidance;
1633	1633	21 or
1634	1634	22 (iv) an item of interest paid, accrued, or
1635	1635	23 incurred, directly or indirectly, to a person if
1636	1636	24 the taxpayer establishes by clear and convincing
1637	1637	25 evidence that the adjustments are unreasonable; or
1638	1638	26 if the taxpayer and the Director agree in writing
1639	1639
1640	1640
1641	1641
1642	1642
1643	1643
1644	1644	HB3039 - 45 - LRB103 26307 HLH 52667 b
1645	1645
1646	1646
1647	1647	HB3039- 46 -LRB103 26307 HLH 52667 b HB3039 - 46 - LRB103 26307 HLH 52667 b
1648	1648	HB3039 - 46 - LRB103 26307 HLH 52667 b
1649	1649	1 to the application or use of an alternative method
1650	1650	2 of apportionment under Section 304(f).
1651	1651	3 Nothing in this subsection shall preclude the
1652	1652	4 Director from making any other adjustment
1653	1653	5 otherwise allowed under Section 404 of this Act
1654	1654	6 for any tax year beginning after the effective
1655	1655	7 date of this amendment provided such adjustment is
1656	1656	8 made pursuant to regulation adopted by the
1657	1657	9 Department and such regulations provide methods
1658	1658	10 and standards by which the Department will utilize
1659	1659	11 its authority under Section 404 of this Act;
1660	1660	12 (E-13) An amount equal to the amount of intangible
1661	1661	13 expenses and costs otherwise allowed as a deduction in
1662	1662	14 computing base income, and that were paid, accrued, or
1663	1663	15 incurred, directly or indirectly, (i) for taxable
1664	1664	16 years ending on or after December 31, 2004, to a
1665	1665	17 foreign person who would be a member of the same
1666	1666	18 unitary business group but for the fact that the
1667	1667	19 foreign person's business activity outside the United
1668	1668	20 States is 80% or more of that person's total business
1669	1669	21 activity and (ii) for taxable years ending on or after
1670	1670	22 December 31, 2008, to a person who would be a member of
1671	1671	23 the same unitary business group but for the fact that
1672	1672	24 the person is prohibited under Section 1501(a)(27)
1673	1673	25 from being included in the unitary business group
1674	1674	26 because he or she is ordinarily required to apportion
1675	1675
1676	1676
1677	1677
1678	1678
1679	1679
1680	1680	HB3039 - 46 - LRB103 26307 HLH 52667 b
1681	1681
1682	1682
1683	1683	HB3039- 47 -LRB103 26307 HLH 52667 b HB3039 - 47 - LRB103 26307 HLH 52667 b
1684	1684	HB3039 - 47 - LRB103 26307 HLH 52667 b
1685	1685	1 business income under different subsections of Section
1686	1686	2 304. The addition modification required by this
1687	1687	3 subparagraph shall be reduced to the extent that
1688	1688	4 dividends were included in base income of the unitary
1689	1689	5 group for the same taxable year and received by the
1690	1690	6 taxpayer or by a member of the taxpayer's unitary
1691	1691	7 business group (including amounts included in gross
1692	1692	8 income pursuant to Sections 951 through 964 of the
1693	1693	9 Internal Revenue Code and amounts included in gross
1694	1694	10 income under Section 78 of the Internal Revenue Code)
1695	1695	11 with respect to the stock of the same person to whom
1696	1696	12 the intangible expenses and costs were directly or
1697	1697	13 indirectly paid, incurred, or accrued. The preceding
1698	1698	14 sentence shall not apply to the extent that the same
1699	1699	15 dividends caused a reduction to the addition
1700	1700	16 modification required under Section 203(b)(2)(E-12) of
1701	1701	17 this Act. As used in this subparagraph, the term
1702	1702	18 "intangible expenses and costs" includes (1) expenses,
1703	1703	19 losses, and costs for, or related to, the direct or
1704	1704	20 indirect acquisition, use, maintenance or management,
1705	1705	21 ownership, sale, exchange, or any other disposition of
1706	1706	22 intangible property; (2) losses incurred, directly or
1707	1707	23 indirectly, from factoring transactions or discounting
1708	1708	24 transactions; (3) royalty, patent, technical, and
1709	1709	25 copyright fees; (4) licensing fees; and (5) other
1710	1710	26 similar expenses and costs. For purposes of this
1711	1711
1712	1712
1713	1713
1714	1714
1715	1715
1716	1716	HB3039 - 47 - LRB103 26307 HLH 52667 b
1717	1717
1718	1718
1719	1719	HB3039- 48 -LRB103 26307 HLH 52667 b HB3039 - 48 - LRB103 26307 HLH 52667 b
1720	1720	HB3039 - 48 - LRB103 26307 HLH 52667 b
1721	1721	1 subparagraph, "intangible property" includes patents,
1722	1722	2 patent applications, trade names, trademarks, service
1723	1723	3 marks, copyrights, mask works, trade secrets, and
1724	1724	4 similar types of intangible assets.
1725	1725	5 This paragraph shall not apply to the following:
1726	1726	6 (i) any item of intangible expenses or costs
1727	1727	7 paid, accrued, or incurred, directly or
1728	1728	8 indirectly, from a transaction with a person who
1729	1729	9 is subject in a foreign country or state, other
1730	1730	10 than a state which requires mandatory unitary
1731	1731	11 reporting, to a tax on or measured by net income
1732	1732	12 with respect to such item; or
1733	1733	13 (ii) any item of intangible expense or cost
1734	1734	14 paid, accrued, or incurred, directly or
1735	1735	15 indirectly, if the taxpayer can establish, based
1736	1736	16 on a preponderance of the evidence, both of the
1737	1737	17 following:
1738	1738	18 (a) the person during the same taxable
1739	1739	19 year paid, accrued, or incurred, the
1740	1740	20 intangible expense or cost to a person that is
1741	1741	21 not a related member, and
1742	1742	22 (b) the transaction giving rise to the
1743	1743	23 intangible expense or cost between the
1744	1744	24 taxpayer and the person did not have as a
1745	1745	25 principal purpose the avoidance of Illinois
1746	1746	26 income tax, and is paid pursuant to a contract
1747	1747
1748	1748
1749	1749
1750	1750
1751	1751
1752	1752	HB3039 - 48 - LRB103 26307 HLH 52667 b
1753	1753
1754	1754
1755	1755	HB3039- 49 -LRB103 26307 HLH 52667 b HB3039 - 49 - LRB103 26307 HLH 52667 b
1756	1756	HB3039 - 49 - LRB103 26307 HLH 52667 b
1757	1757	1 or agreement that reflects arm's-length terms;
1758	1758	2 or
1759	1759	3 (iii) any item of intangible expense or cost
1760	1760	4 paid, accrued, or incurred, directly or
1761	1761	5 indirectly, from a transaction with a person if
1762	1762	6 the taxpayer establishes by clear and convincing
1763	1763	7 evidence, that the adjustments are unreasonable;
1764	1764	8 or if the taxpayer and the Director agree in
1765	1765	9 writing to the application or use of an
1766	1766	10 alternative method of apportionment under Section
1767	1767	11 304(f);
1768	1768	12 Nothing in this subsection shall preclude the
1769	1769	13 Director from making any other adjustment
1770	1770	14 otherwise allowed under Section 404 of this Act
1771	1771	15 for any tax year beginning after the effective
1772	1772	16 date of this amendment provided such adjustment is
1773	1773	17 made pursuant to regulation adopted by the
1774	1774	18 Department and such regulations provide methods
1775	1775	19 and standards by which the Department will utilize
1776	1776	20 its authority under Section 404 of this Act;
1777	1777	21 (E-14) For taxable years ending on or after
1778	1778	22 December 31, 2008, an amount equal to the amount of
1779	1779	23 insurance premium expenses and costs otherwise allowed
1780	1780	24 as a deduction in computing base income, and that were
1781	1781	25 paid, accrued, or incurred, directly or indirectly, to
1782	1782	26 a person who would be a member of the same unitary
1783	1783
1784	1784
1785	1785
1786	1786
1787	1787
1788	1788	HB3039 - 49 - LRB103 26307 HLH 52667 b
1789	1789
1790	1790
1791	1791	HB3039- 50 -LRB103 26307 HLH 52667 b HB3039 - 50 - LRB103 26307 HLH 52667 b
1792	1792	HB3039 - 50 - LRB103 26307 HLH 52667 b
1793	1793	1 business group but for the fact that the person is
1794	1794	2 prohibited under Section 1501(a)(27) from being
1795	1795	3 included in the unitary business group because he or
1796	1796	4 she is ordinarily required to apportion business
1797	1797	5 income under different subsections of Section 304. The
1798	1798	6 addition modification required by this subparagraph
1799	1799	7 shall be reduced to the extent that dividends were
1800	1800	8 included in base income of the unitary group for the
1801	1801	9 same taxable year and received by the taxpayer or by a
1802	1802	10 member of the taxpayer's unitary business group
1803	1803	11 (including amounts included in gross income under
1804	1804	12 Sections 951 through 964 of the Internal Revenue Code
1805	1805	13 and amounts included in gross income under Section 78
1806	1806	14 of the Internal Revenue Code) with respect to the
1807	1807	15 stock of the same person to whom the premiums and costs
1808	1808	16 were directly or indirectly paid, incurred, or
1809	1809	17 accrued. The preceding sentence does not apply to the
1810	1810	18 extent that the same dividends caused a reduction to
1811	1811	19 the addition modification required under Section
1812	1812	20 203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this
1813	1813	21 Act;
1814	1814	22 (E-15) For taxable years beginning after December
1815	1815	23 31, 2008, any deduction for dividends paid by a
1816	1816	24 captive real estate investment trust that is allowed
1817	1817	25 to a real estate investment trust under Section
1818	1818	26 857(b)(2)(B) of the Internal Revenue Code for
1819	1819
1820	1820
1821	1821
1822	1822
1823	1823
1824	1824	HB3039 - 50 - LRB103 26307 HLH 52667 b
1825	1825
1826	1826
1827	1827	HB3039- 51 -LRB103 26307 HLH 52667 b HB3039 - 51 - LRB103 26307 HLH 52667 b
1828	1828	HB3039 - 51 - LRB103 26307 HLH 52667 b
1829	1829	1 dividends paid;
1830	1830	2 (E-16) An amount equal to the credit allowable to
1831	1831	3 the taxpayer under Section 218(a) of this Act,
1832	1832	4 determined without regard to Section 218(c) of this
1833	1833	5 Act;
1834	1834	6 (E-17) For taxable years ending on or after
1835	1835	7 December 31, 2017, an amount equal to the deduction
1836	1836	8 allowed under Section 199 of the Internal Revenue Code
1837	1837	9 for the taxable year;
1838	1838	10 (E-18) for taxable years beginning after December
1839	1839	11 31, 2018, an amount equal to the deduction allowed
1840	1840	12 under Section 250(a)(1)(A) of the Internal Revenue
1841	1841	13 Code for the taxable year;
1842	1842	14 (E-19) for taxable years ending on or after June
1843	1843	15 30, 2021, an amount equal to the deduction allowed
1844	1844	16 under Section 250(a)(1)(B)(i) of the Internal Revenue
1845	1845	17 Code for the taxable year;
1846	1846	18 (E-20) for taxable years ending on or after June
1847	1847	19 30, 2021, an amount equal to the deduction allowed
1848	1848	20 under Sections 243(e) and 245A(a) of the Internal
1849	1849	21 Revenue Code for the taxable year.
1850	1850	22 and by deducting from the total so obtained the sum of the
1851	1851	23 following amounts:
1852	1852	24 (F) An amount equal to the amount of any tax
1853	1853	25 imposed by this Act which was refunded to the taxpayer
1854	1854	26 and included in such total for the taxable year;
1855	1855
1856	1856
1857	1857
1858	1858
1859	1859
1860	1860	HB3039 - 51 - LRB103 26307 HLH 52667 b
1861	1861
1862	1862
1863	1863	HB3039- 52 -LRB103 26307 HLH 52667 b HB3039 - 52 - LRB103 26307 HLH 52667 b
1864	1864	HB3039 - 52 - LRB103 26307 HLH 52667 b
1865	1865	1 (G) An amount equal to any amount included in such
1866	1866	2 total under Section 78 of the Internal Revenue Code;
1867	1867	3 (H) In the case of a regulated investment company,
1868	1868	4 an amount equal to the amount of exempt interest
1869	1869	5 dividends as defined in subsection (b)(5) of Section
1870	1870	6 852 of the Internal Revenue Code, paid to shareholders
1871	1871	7 for the taxable year;
1872	1872	8 (I) With the exception of any amounts subtracted
1873	1873	9 under subparagraph (J), an amount equal to the sum of
1874	1874	10 all amounts disallowed as deductions by (i) Sections
1875	1875	11 171(a)(2) and 265(a)(2) and amounts disallowed as
1876	1876	12 interest expense by Section 291(a)(3) of the Internal
1877	1877	13 Revenue Code, and all amounts of expenses allocable to
1878	1878	14 interest and disallowed as deductions by Section
1879	1879	15 265(a)(1) of the Internal Revenue Code; and (ii) for
1880	1880	16 taxable years ending on or after August 13, 1999,
1881	1881	17 Sections 171(a)(2), 265, 280C, 291(a)(3), and
1882	1882	18 832(b)(5)(B)(i) of the Internal Revenue Code, plus,
1883	1883	19 for tax years ending on or after December 31, 2011,
1884	1884	20 amounts disallowed as deductions by Section 45G(e)(3)
1885	1885	21 of the Internal Revenue Code and, for taxable years
1886	1886	22 ending on or after December 31, 2008, any amount
1887	1887	23 included in gross income under Section 87 of the
1888	1888	24 Internal Revenue Code and the policyholders' share of
1889	1889	25 tax-exempt interest of a life insurance company under
1890	1890	26 Section 807(a)(2)(B) of the Internal Revenue Code (in
1891	1891
1892	1892
1893	1893
1894	1894
1895	1895
1896	1896	HB3039 - 52 - LRB103 26307 HLH 52667 b
1897	1897
1898	1898
1899	1899	HB3039- 53 -LRB103 26307 HLH 52667 b HB3039 - 53 - LRB103 26307 HLH 52667 b
1900	1900	HB3039 - 53 - LRB103 26307 HLH 52667 b
1901	1901	1 the case of a life insurance company with gross income
1902	1902	2 from a decrease in reserves for the tax year) or
1903	1903	3 Section 807(b)(1)(B) of the Internal Revenue Code (in
1904	1904	4 the case of a life insurance company allowed a
1905	1905	5 deduction for an increase in reserves for the tax
1906	1906	6 year); the provisions of this subparagraph are exempt
1907	1907	7 from the provisions of Section 250;
1908	1908	8 (J) An amount equal to all amounts included in
1909	1909	9 such total which are exempt from taxation by this
1910	1910	10 State either by reason of its statutes or Constitution
1911	1911	11 or by reason of the Constitution, treaties or statutes
1912	1912	12 of the United States; provided that, in the case of any
1913	1913	13 statute of this State that exempts income derived from
1914	1914	14 bonds or other obligations from the tax imposed under
1915	1915	15 this Act, the amount exempted shall be the interest
1916	1916	16 net of bond premium amortization;
1917	1917	17 (K) An amount equal to those dividends included in
1918	1918	18 such total which were paid by a corporation which
1919	1919	19 conducts business operations in a River Edge
1920	1920	20 Redevelopment Zone or zones created under the River
1921	1921	21 Edge Redevelopment Zone Act and conducts substantially
1922	1922	22 all of its operations in a River Edge Redevelopment
1923	1923	23 Zone or zones. This subparagraph (K) is exempt from
1924	1924	24 the provisions of Section 250;
1925	1925	25 (L) An amount equal to those dividends included in
1926	1926	26 such total that were paid by a corporation that
1927	1927
1928	1928
1929	1929
1930	1930
1931	1931
1932	1932	HB3039 - 53 - LRB103 26307 HLH 52667 b
1933	1933
1934	1934
1935	1935	HB3039- 54 -LRB103 26307 HLH 52667 b HB3039 - 54 - LRB103 26307 HLH 52667 b
1936	1936	HB3039 - 54 - LRB103 26307 HLH 52667 b
1937	1937	1 conducts business operations in a federally designated
1938	1938	2 Foreign Trade Zone or Sub-Zone and that is designated
1939	1939	3 a High Impact Business located in Illinois; provided
1940	1940	4 that dividends eligible for the deduction provided in
1941	1941	5 subparagraph (K) of paragraph 2 of this subsection
1942	1942	6 shall not be eligible for the deduction provided under
1943	1943	7 this subparagraph (L);
1944	1944	8 (M) For any taxpayer that is a financial
1945	1945	9 organization within the meaning of Section 304(c) of
1946	1946	10 this Act, an amount included in such total as interest
1947	1947	11 income from a loan or loans made by such taxpayer to a
1948	1948	12 borrower, to the extent that such a loan is secured by
1949	1949	13 property which is eligible for the River Edge
1950	1950	14 Redevelopment Zone Investment Credit. To determine the
1951	1951	15 portion of a loan or loans that is secured by property
1952	1952	16 eligible for a Section 201(f) investment credit to the
1953	1953	17 borrower, the entire principal amount of the loan or
1954	1954	18 loans between the taxpayer and the borrower should be
1955	1955	19 divided into the basis of the Section 201(f)
1956	1956	20 investment credit property which secures the loan or
1957	1957	21 loans, using for this purpose the original basis of
1958	1958	22 such property on the date that it was placed in service
1959	1959	23 in the River Edge Redevelopment Zone. The subtraction
1960	1960	24 modification available to the taxpayer in any year
1961	1961	25 under this subsection shall be that portion of the
1962	1962	26 total interest paid by the borrower with respect to
1963	1963
1964	1964
1965	1965
1966	1966
1967	1967
1968	1968	HB3039 - 54 - LRB103 26307 HLH 52667 b
1969	1969
1970	1970
1971	1971	HB3039- 55 -LRB103 26307 HLH 52667 b HB3039 - 55 - LRB103 26307 HLH 52667 b
1972	1972	HB3039 - 55 - LRB103 26307 HLH 52667 b
1973	1973	1 such loan attributable to the eligible property as
1974	1974	2 calculated under the previous sentence. This
1975	1975	3 subparagraph (M) is exempt from the provisions of
1976	1976	4 Section 250;
1977	1977	5 (M-1) For any taxpayer that is a financial
1978	1978	6 organization within the meaning of Section 304(c) of
1979	1979	7 this Act, an amount included in such total as interest
1980	1980	8 income from a loan or loans made by such taxpayer to a
1981	1981	9 borrower, to the extent that such a loan is secured by
1982	1982	10 property which is eligible for the High Impact
1983	1983	11 Business Investment Credit. To determine the portion
1984	1984	12 of a loan or loans that is secured by property eligible
1985	1985	13 for a Section 201(h) investment credit to the
1986	1986	14 borrower, the entire principal amount of the loan or
1987	1987	15 loans between the taxpayer and the borrower should be
1988	1988	16 divided into the basis of the Section 201(h)
1989	1989	17 investment credit property which secures the loan or
1990	1990	18 loans, using for this purpose the original basis of
1991	1991	19 such property on the date that it was placed in service
1992	1992	20 in a federally designated Foreign Trade Zone or
1993	1993	21 Sub-Zone located in Illinois. No taxpayer that is
1994	1994	22 eligible for the deduction provided in subparagraph
1995	1995	23 (M) of paragraph (2) of this subsection shall be
1996	1996	24 eligible for the deduction provided under this
1997	1997	25 subparagraph (M-1). The subtraction modification
1998	1998	26 available to taxpayers in any year under this
1999	1999
2000	2000
2001	2001
2002	2002
2003	2003
2004	2004	HB3039 - 55 - LRB103 26307 HLH 52667 b
2005	2005
2006	2006
2007	2007	HB3039- 56 -LRB103 26307 HLH 52667 b HB3039 - 56 - LRB103 26307 HLH 52667 b
2008	2008	HB3039 - 56 - LRB103 26307 HLH 52667 b
2009	2009	1 subsection shall be that portion of the total interest
2010	2010	2 paid by the borrower with respect to such loan
2011	2011	3 attributable to the eligible property as calculated
2012	2012	4 under the previous sentence;
2013	2013	5 (N) Two times any contribution made during the
2014	2014	6 taxable year to a designated zone organization to the
2015	2015	7 extent that the contribution (i) qualifies as a
2016	2016	8 charitable contribution under subsection (c) of
2017	2017	9 Section 170 of the Internal Revenue Code and (ii)
2018	2018	10 must, by its terms, be used for a project approved by
2019	2019	11 the Department of Commerce and Economic Opportunity
2020	2020	12 under Section 11 of the Illinois Enterprise Zone Act
2021	2021	13 or under Section 10-10 of the River Edge Redevelopment
2022	2022	14 Zone Act. This subparagraph (N) is exempt from the
2023	2023	15 provisions of Section 250;
2024	2024	16 (O) An amount equal to: (i) 85% for taxable years
2025	2025	17 ending on or before December 31, 1992, or, a
2026	2026	18 percentage equal to the percentage allowable under
2027	2027	19 Section 243(a)(1) of the Internal Revenue Code of 1986
2028	2028	20 for taxable years ending after December 31, 1992, of
2029	2029	21 the amount by which dividends included in taxable
2030	2030	22 income and received from a corporation that is not
2031	2031	23 created or organized under the laws of the United
2032	2032	24 States or any state or political subdivision thereof,
2033	2033	25 including, for taxable years ending on or after
2034	2034	26 December 31, 1988, dividends received or deemed
2035	2035
2036	2036
2037	2037
2038	2038
2039	2039
2040	2040	HB3039 - 56 - LRB103 26307 HLH 52667 b
2041	2041
2042	2042
2043	2043	HB3039- 57 -LRB103 26307 HLH 52667 b HB3039 - 57 - LRB103 26307 HLH 52667 b
2044	2044	HB3039 - 57 - LRB103 26307 HLH 52667 b
2045	2045	1 received or paid or deemed paid under Sections 951
2046	2046	2 through 965 of the Internal Revenue Code, exceed the
2047	2047	3 amount of the modification provided under subparagraph
2048	2048	4 (G) of paragraph (2) of this subsection (b) which is
2049	2049	5 related to such dividends, and including, for taxable
2050	2050	6 years ending on or after December 31, 2008, dividends
2051	2051	7 received from a captive real estate investment trust;
2052	2052	8 plus (ii) 100% of the amount by which dividends,
2053	2053	9 included in taxable income and received, including,
2054	2054	10 for taxable years ending on or after December 31,
2055	2055	11 1988, dividends received or deemed received or paid or
2056	2056	12 deemed paid under Sections 951 through 964 of the
2057	2057	13 Internal Revenue Code and including, for taxable years
2058	2058	14 ending on or after December 31, 2008, dividends
2059	2059	15 received from a captive real estate investment trust,
2060	2060	16 from any such corporation specified in clause (i) that
2061	2061	17 would but for the provisions of Section 1504(b)(3) of
2062	2062	18 the Internal Revenue Code be treated as a member of the
2063	2063	19 affiliated group which includes the dividend
2064	2064	20 recipient, exceed the amount of the modification
2065	2065	21 provided under subparagraph (G) of paragraph (2) of
2066	2066	22 this subsection (b) which is related to such
2067	2067	23 dividends. For taxable years ending on or after June
2068	2068	24 30, 2021, (i) for purposes of this subparagraph, the
2069	2069	25 term "dividend" does not include any amount treated as
2070	2070	26 a dividend under Section 1248 of the Internal Revenue
2071	2071
2072	2072
2073	2073
2074	2074
2075	2075
2076	2076	HB3039 - 57 - LRB103 26307 HLH 52667 b
2077	2077
2078	2078
2079	2079	HB3039- 58 -LRB103 26307 HLH 52667 b HB3039 - 58 - LRB103 26307 HLH 52667 b
2080	2080	HB3039 - 58 - LRB103 26307 HLH 52667 b
2081	2081	1 Code, and (ii) this subparagraph shall not apply to
2082	2082	2 dividends for which a deduction is allowed under
2083	2083	3 Section 245(a) of the Internal Revenue Code. This
2084	2084	4 subparagraph (O) is exempt from the provisions of
2085	2085	5 Section 250 of this Act;
2086	2086	6 (P) An amount equal to any contribution made to a
2087	2087	7 job training project established pursuant to the Tax
2088	2088	8 Increment Allocation Redevelopment Act;
2089	2089	9 (Q) An amount equal to the amount of the deduction
2090	2090	10 used to compute the federal income tax credit for
2091	2091	11 restoration of substantial amounts held under claim of
2092	2092	12 right for the taxable year pursuant to Section 1341 of
2093	2093	13 the Internal Revenue Code;
2094	2094	14 (R) On and after July 20, 1999, in the case of an
2095	2095	15 attorney-in-fact with respect to whom an interinsurer
2096	2096	16 or a reciprocal insurer has made the election under
2097	2097	17 Section 835 of the Internal Revenue Code, 26 U.S.C.
2098	2098	18 835, an amount equal to the excess, if any, of the
2099	2099	19 amounts paid or incurred by that interinsurer or
2100	2100	20 reciprocal insurer in the taxable year to the
2101	2101	21 attorney-in-fact over the deduction allowed to that
2102	2102	22 interinsurer or reciprocal insurer with respect to the
2103	2103	23 attorney-in-fact under Section 835(b) of the Internal
2104	2104	24 Revenue Code for the taxable year; the provisions of
2105	2105	25 this subparagraph are exempt from the provisions of
2106	2106	26 Section 250;
2107	2107
2108	2108
2109	2109
2110	2110
2111	2111
2112	2112	HB3039 - 58 - LRB103 26307 HLH 52667 b
2113	2113
2114	2114
2115	2115	HB3039- 59 -LRB103 26307 HLH 52667 b HB3039 - 59 - LRB103 26307 HLH 52667 b
2116	2116	HB3039 - 59 - LRB103 26307 HLH 52667 b
2117	2117	1 (S) For taxable years ending on or after December
2118	2118	2 31, 1997, in the case of a Subchapter S corporation, an
2119	2119	3 amount equal to all amounts of income allocable to a
2120	2120	4 shareholder subject to the Personal Property Tax
2121	2121	5 Replacement Income Tax imposed by subsections (c) and
2122	2122	6 (d) of Section 201 of this Act, including amounts
2123	2123	7 allocable to organizations exempt from federal income
2124	2124	8 tax by reason of Section 501(a) of the Internal
2125	2125	9 Revenue Code. This subparagraph (S) is exempt from the
2126	2126	10 provisions of Section 250;
2127	2127	11 (T) For taxable years 2001 and thereafter, for the
2128	2128	12 taxable year in which the bonus depreciation deduction
2129	2129	13 is taken on the taxpayer's federal income tax return
2130	2130	14 under subsection (k) of Section 168 of the Internal
2131	2131	15 Revenue Code and for each applicable taxable year
2132	2132	16 thereafter, an amount equal to "x", where:
2133	2133	17 (1) "y" equals the amount of the depreciation
2134	2134	18 deduction taken for the taxable year on the
2135	2135	19 taxpayer's federal income tax return on property
2136	2136	20 for which the bonus depreciation deduction was
2137	2137	21 taken in any year under subsection (k) of Section
2138	2138	22 168 of the Internal Revenue Code, but not
2139	2139	23 including the bonus depreciation deduction;
2140	2140	24 (2) for taxable years ending on or before
2141	2141	25 December 31, 2005, "x" equals "y" multiplied by 30
2142	2142	26 and then divided by 70 (or "y" multiplied by
2143	2143
2144	2144
2145	2145
2146	2146
2147	2147
2148	2148	HB3039 - 59 - LRB103 26307 HLH 52667 b
2149	2149
2150	2150
2151	2151	HB3039- 60 -LRB103 26307 HLH 52667 b HB3039 - 60 - LRB103 26307 HLH 52667 b
2152	2152	HB3039 - 60 - LRB103 26307 HLH 52667 b
2153	2153	1 0.429); and
2154	2154	2 (3) for taxable years ending after December
2155	2155	3 31, 2005:
2156	2156	4 (i) for property on which a bonus
2157	2157	5 depreciation deduction of 30% of the adjusted
2158	2158	6 basis was taken, "x" equals "y" multiplied by
2159	2159	7 30 and then divided by 70 (or "y" multiplied
2160	2160	8 by 0.429);
2161	2161	9 (ii) for property on which a bonus
2162	2162	10 depreciation deduction of 50% of the adjusted
2163	2163	11 basis was taken, "x" equals "y" multiplied by
2164	2164	12 1.0;
2165	2165	13 (iii) for property on which a bonus
2166	2166	14 depreciation deduction of 100% of the adjusted
2167	2167	15 basis was taken in a taxable year ending on or
2168	2168	16 after December 31, 2021, "x" equals the
2169	2169	17 depreciation deduction that would be allowed
2170	2170	18 on that property if the taxpayer had made the
2171	2171	19 election under Section 168(k)(7) of the
2172	2172	20 Internal Revenue Code to not claim bonus
2173	2173	21 depreciation on that property; and
2174	2174	22 (iv) for property on which a bonus
2175	2175	23 depreciation deduction of a percentage other
2176	2176	24 than 30%, 50% or 100% of the adjusted basis
2177	2177	25 was taken in a taxable year ending on or after
2178	2178	26 December 31, 2021, "x" equals "y" multiplied
2179	2179
2180	2180
2181	2181
2182	2182
2183	2183
2184	2184	HB3039 - 60 - LRB103 26307 HLH 52667 b
2185	2185
2186	2186
2187	2187	HB3039- 61 -LRB103 26307 HLH 52667 b HB3039 - 61 - LRB103 26307 HLH 52667 b
2188	2188	HB3039 - 61 - LRB103 26307 HLH 52667 b
2189	2189	1 by 100 times the percentage bonus depreciation
2190	2190	2 on the property (that is, 100(bonus%)) and
2191	2191	3 then divided by 100 times 1 minus the
2192	2192	4 percentage bonus depreciation on the property
2193	2193	5 (that is, 100(1bonus%)).
2194	2194	6 The aggregate amount deducted under this
2195	2195	7 subparagraph in all taxable years for any one piece of
2196	2196	8 property may not exceed the amount of the bonus
2197	2197	9 depreciation deduction taken on that property on the
2198	2198	10 taxpayer's federal income tax return under subsection
2199	2199	11 (k) of Section 168 of the Internal Revenue Code. This
2200	2200	12 subparagraph (T) is exempt from the provisions of
2201	2201	13 Section 250;
2202	2202	14 (U) If the taxpayer sells, transfers, abandons, or
2203	2203	15 otherwise disposes of property for which the taxpayer
2204	2204	16 was required in any taxable year to make an addition
2205	2205	17 modification under subparagraph (E-10), then an amount
2206	2206	18 equal to that addition modification.
2207	2207	19 If the taxpayer continues to own property through
2208	2208	20 the last day of the last tax year for which a
2209	2209	21 subtraction is allowed with respect to that property
2210	2210	22 under subparagraph (T) and for which the taxpayer was
2211	2211	23 required in any taxable year to make an addition
2212	2212	24 modification under subparagraph (E-10), then an amount
2213	2213	25 equal to that addition modification.
2214	2214	26 The taxpayer is allowed to take the deduction
2215	2215
2216	2216
2217	2217
2218	2218
2219	2219
2220	2220	HB3039 - 61 - LRB103 26307 HLH 52667 b
2221	2221
2222	2222
2223	2223	HB3039- 62 -LRB103 26307 HLH 52667 b HB3039 - 62 - LRB103 26307 HLH 52667 b
2224	2224	HB3039 - 62 - LRB103 26307 HLH 52667 b
2225	2225	1 under this subparagraph only once with respect to any
2226	2226	2 one piece of property.
2227	2227	3 This subparagraph (U) is exempt from the
2228	2228	4 provisions of Section 250;
2229	2229	5 (V) The amount of: (i) any interest income (net of
2230	2230	6 the deductions allocable thereto) taken into account
2231	2231	7 for the taxable year with respect to a transaction
2232	2232	8 with a taxpayer that is required to make an addition
2233	2233	9 modification with respect to such transaction under
2234	2234	10 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
2235	2235	11 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
2236	2236	12 the amount of such addition modification, (ii) any
2237	2237	13 income from intangible property (net of the deductions
2238	2238	14 allocable thereto) taken into account for the taxable
2239	2239	15 year with respect to a transaction with a taxpayer
2240	2240	16 that is required to make an addition modification with
2241	2241	17 respect to such transaction under Section
2242	2242	18 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
2243	2243	19 203(d)(2)(D-8), but not to exceed the amount of such
2244	2244	20 addition modification, and (iii) any insurance premium
2245	2245	21 income (net of deductions allocable thereto) taken
2246	2246	22 into account for the taxable year with respect to a
2247	2247	23 transaction with a taxpayer that is required to make
2248	2248	24 an addition modification with respect to such
2249	2249	25 transaction under Section 203(a)(2)(D-19), Section
2250	2250	26 203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
2251	2251
2252	2252
2253	2253
2254	2254
2255	2255
2256	2256	HB3039 - 62 - LRB103 26307 HLH 52667 b
2257	2257
2258	2258
2259	2259	HB3039- 63 -LRB103 26307 HLH 52667 b HB3039 - 63 - LRB103 26307 HLH 52667 b
2260	2260	HB3039 - 63 - LRB103 26307 HLH 52667 b
2261	2261	1 203(d)(2)(D-9), but not to exceed the amount of that
2262	2262	2 addition modification. This subparagraph (V) is exempt
2263	2263	3 from the provisions of Section 250;
2264	2264	4 (W) An amount equal to the interest income taken
2265	2265	5 into account for the taxable year (net of the
2266	2266	6 deductions allocable thereto) with respect to
2267	2267	7 transactions with (i) a foreign person who would be a
2268	2268	8 member of the taxpayer's unitary business group but
2269	2269	9 for the fact that the foreign person's business
2270	2270	10 activity outside the United States is 80% or more of
2271	2271	11 that person's total business activity and (ii) for
2272	2272	12 taxable years ending on or after December 31, 2008, to
2273	2273	13 a person who would be a member of the same unitary
2274	2274	14 business group but for the fact that the person is
2275	2275	15 prohibited under Section 1501(a)(27) from being
2276	2276	16 included in the unitary business group because he or
2277	2277	17 she is ordinarily required to apportion business
2278	2278	18 income under different subsections of Section 304, but
2279	2279	19 not to exceed the addition modification required to be
2280	2280	20 made for the same taxable year under Section
2281	2281	21 203(b)(2)(E-12) for interest paid, accrued, or
2282	2282	22 incurred, directly or indirectly, to the same person.
2283	2283	23 This subparagraph (W) is exempt from the provisions of
2284	2284	24 Section 250;
2285	2285	25 (X) An amount equal to the income from intangible
2286	2286	26 property taken into account for the taxable year (net
2287	2287
2288	2288
2289	2289
2290	2290
2291	2291
2292	2292	HB3039 - 63 - LRB103 26307 HLH 52667 b
2293	2293
2294	2294
2295	2295	HB3039- 64 -LRB103 26307 HLH 52667 b HB3039 - 64 - LRB103 26307 HLH 52667 b
2296	2296	HB3039 - 64 - LRB103 26307 HLH 52667 b
2297	2297	1 of the deductions allocable thereto) with respect to
2298	2298	2 transactions with (i) a foreign person who would be a
2299	2299	3 member of the taxpayer's unitary business group but
2300	2300	4 for the fact that the foreign person's business
2301	2301	5 activity outside the United States is 80% or more of
2302	2302	6 that person's total business activity and (ii) for
2303	2303	7 taxable years ending on or after December 31, 2008, to
2304	2304	8 a person who would be a member of the same unitary
2305	2305	9 business group but for the fact that the person is
2306	2306	10 prohibited under Section 1501(a)(27) from being
2307	2307	11 included in the unitary business group because he or
2308	2308	12 she is ordinarily required to apportion business
2309	2309	13 income under different subsections of Section 304, but
2310	2310	14 not to exceed the addition modification required to be
2311	2311	15 made for the same taxable year under Section
2312	2312	16 203(b)(2)(E-13) for intangible expenses and costs
2313	2313	17 paid, accrued, or incurred, directly or indirectly, to
2314	2314	18 the same foreign person. This subparagraph (X) is
2315	2315	19 exempt from the provisions of Section 250;
2316	2316	20 (Y) For taxable years ending on or after December
2317	2317	21 31, 2011, in the case of a taxpayer who was required to
2318	2318	22 add back any insurance premiums under Section
2319	2319	23 203(b)(2)(E-14), such taxpayer may elect to subtract
2320	2320	24 that part of a reimbursement received from the
2321	2321	25 insurance company equal to the amount of the expense
2322	2322	26 or loss (including expenses incurred by the insurance
2323	2323
2324	2324
2325	2325
2326	2326
2327	2327
2328	2328	HB3039 - 64 - LRB103 26307 HLH 52667 b
2329	2329
2330	2330
2331	2331	HB3039- 65 -LRB103 26307 HLH 52667 b HB3039 - 65 - LRB103 26307 HLH 52667 b
2332	2332	HB3039 - 65 - LRB103 26307 HLH 52667 b
2333	2333	1 company) that would have been taken into account as a
2334	2334	2 deduction for federal income tax purposes if the
2335	2335	3 expense or loss had been uninsured. If a taxpayer
2336	2336	4 makes the election provided for by this subparagraph
2337	2337	5 (Y), the insurer to which the premiums were paid must
2338	2338	6 add back to income the amount subtracted by the
2339	2339	7 taxpayer pursuant to this subparagraph (Y). This
2340	2340	8 subparagraph (Y) is exempt from the provisions of
2341	2341	9 Section 250; and
2342	2342	10 (Z) The difference between the nondeductible
2343	2343	11 controlled foreign corporation dividends under Section
2344	2344	12 965(e)(3) of the Internal Revenue Code over the
2345	2345	13 taxable income of the taxpayer, computed without
2346	2346	14 regard to Section 965(e)(2)(A) of the Internal Revenue
2347	2347	15 Code, and without regard to any net operating loss
2348	2348	16 deduction. This subparagraph (Z) is exempt from the
2349	2349	17 provisions of Section 250.
2350	2350	18 (3) Special rule. For purposes of paragraph (2)(A),
2351	2351	19 "gross income" in the case of a life insurance company,
2352	2352	20 for tax years ending on and after December 31, 1994, and
2353	2353	21 prior to December 31, 2011, shall mean the gross
2354	2354	22 investment income for the taxable year and, for tax years
2355	2355	23 ending on or after December 31, 2011, shall mean all
2356	2356	24 amounts included in life insurance gross income under
2357	2357	25 Section 803(a)(3) of the Internal Revenue Code.
2358	2358
2359	2359
2360	2360
2361	2361
2362	2362
2363	2363	HB3039 - 65 - LRB103 26307 HLH 52667 b
2364	2364
2365	2365
2366	2366	HB3039- 66 -LRB103 26307 HLH 52667 b HB3039 - 66 - LRB103 26307 HLH 52667 b
2367	2367	HB3039 - 66 - LRB103 26307 HLH 52667 b
2368	2368	1 (c) Trusts and estates.
2369	2369	2 (1) In general. In the case of a trust or estate, base
2370	2370	3 income means an amount equal to the taxpayer's taxable
2371	2371	4 income for the taxable year as modified by paragraph (2).
2372	2372	5 (2) Modifications. Subject to the provisions of
2373	2373	6 paragraph (3), the taxable income referred to in paragraph
2374	2374	7 (1) shall be modified by adding thereto the sum of the
2375	2375	8 following amounts:
2376	2376	9 (A) An amount equal to all amounts paid or accrued
2377	2377	10 to the taxpayer as interest or dividends during the
2378	2378	11 taxable year to the extent excluded from gross income
2379	2379	12 in the computation of taxable income;
2380	2380	13 (B) In the case of (i) an estate, $600; (ii) a
2381	2381	14 trust which, under its governing instrument, is
2382	2382	15 required to distribute all of its income currently,
2383	2383	16 $300; and (iii) any other trust, $100, but in each such
2384	2384	17 case, only to the extent such amount was deducted in
2385	2385	18 the computation of taxable income;
2386	2386	19 (C) An amount equal to the amount of tax imposed by
2387	2387	20 this Act to the extent deducted from gross income in
2388	2388	21 the computation of taxable income for the taxable
2389	2389	22 year;
2390	2390	23 (D) The amount of any net operating loss deduction
2391	2391	24 taken in arriving at taxable income, other than a net
2392	2392	25 operating loss carried forward from a taxable year
2393	2393	26 ending prior to December 31, 1986;
2394	2394
2395	2395
2396	2396
2397	2397
2398	2398
2399	2399	HB3039 - 66 - LRB103 26307 HLH 52667 b
2400	2400
2401	2401
2402	2402	HB3039- 67 -LRB103 26307 HLH 52667 b HB3039 - 67 - LRB103 26307 HLH 52667 b
2403	2403	HB3039 - 67 - LRB103 26307 HLH 52667 b
2404	2404	1 (E) For taxable years in which a net operating
2405	2405	2 loss carryback or carryforward from a taxable year
2406	2406	3 ending prior to December 31, 1986 is an element of
2407	2407	4 taxable income under paragraph (1) of subsection (e)
2408	2408	5 or subparagraph (E) of paragraph (2) of subsection
2409	2409	6 (e), the amount by which addition modifications other
2410	2410	7 than those provided by this subparagraph (E) exceeded
2411	2411	8 subtraction modifications in such taxable year, with
2412	2412	9 the following limitations applied in the order that
2413	2413	10 they are listed:
2414	2414	11 (i) the addition modification relating to the
2415	2415	12 net operating loss carried back or forward to the
2416	2416	13 taxable year from any taxable year ending prior to
2417	2417	14 December 31, 1986 shall be reduced by the amount
2418	2418	15 of addition modification under this subparagraph
2419	2419	16 (E) which related to that net operating loss and
2420	2420	17 which was taken into account in calculating the
2421	2421	18 base income of an earlier taxable year, and
2422	2422	19 (ii) the addition modification relating to the
2423	2423	20 net operating loss carried back or forward to the
2424	2424	21 taxable year from any taxable year ending prior to
2425	2425	22 December 31, 1986 shall not exceed the amount of
2426	2426	23 such carryback or carryforward;
2427	2427	24 For taxable years in which there is a net
2428	2428	25 operating loss carryback or carryforward from more
2429	2429	26 than one other taxable year ending prior to December
2430	2430
2431	2431
2432	2432
2433	2433
2434	2434
2435	2435	HB3039 - 67 - LRB103 26307 HLH 52667 b
2436	2436
2437	2437
2438	2438	HB3039- 68 -LRB103 26307 HLH 52667 b HB3039 - 68 - LRB103 26307 HLH 52667 b
2439	2439	HB3039 - 68 - LRB103 26307 HLH 52667 b
2440	2440	1 31, 1986, the addition modification provided in this
2441	2441	2 subparagraph (E) shall be the sum of the amounts
2442	2442	3 computed independently under the preceding provisions
2443	2443	4 of this subparagraph (E) for each such taxable year;
2444	2444	5 (F) For taxable years ending on or after January
2445	2445	6 1, 1989, an amount equal to the tax deducted pursuant
2446	2446	7 to Section 164 of the Internal Revenue Code if the
2447	2447	8 trust or estate is claiming the same tax for purposes
2448	2448	9 of the Illinois foreign tax credit under Section 601
2449	2449	10 of this Act;
2450	2450	11 (G) An amount equal to the amount of the capital
2451	2451	12 gain deduction allowable under the Internal Revenue
2452	2452	13 Code, to the extent deducted from gross income in the
2453	2453	14 computation of taxable income;
2454	2454	15 (G-5) For taxable years ending after December 31,
2455	2455	16 1997, an amount equal to any eligible remediation
2456	2456	17 costs that the trust or estate deducted in computing
2457	2457	18 adjusted gross income and for which the trust or
2458	2458	19 estate claims a credit under subsection (l) of Section
2459	2459	20 201;
2460	2460	21 (G-10) For taxable years 2001 and thereafter, an
2461	2461	22 amount equal to the bonus depreciation deduction taken
2462	2462	23 on the taxpayer's federal income tax return for the
2463	2463	24 taxable year under subsection (k) of Section 168 of
2464	2464	25 the Internal Revenue Code; and
2465	2465	26 (G-11) If the taxpayer sells, transfers, abandons,
2466	2466
2467	2467
2468	2468
2469	2469
2470	2470
2471	2471	HB3039 - 68 - LRB103 26307 HLH 52667 b
2472	2472
2473	2473
2474	2474	HB3039- 69 -LRB103 26307 HLH 52667 b HB3039 - 69 - LRB103 26307 HLH 52667 b
2475	2475	HB3039 - 69 - LRB103 26307 HLH 52667 b
2476	2476	1 or otherwise disposes of property for which the
2477	2477	2 taxpayer was required in any taxable year to make an
2478	2478	3 addition modification under subparagraph (G-10), then
2479	2479	4 an amount equal to the aggregate amount of the
2480	2480	5 deductions taken in all taxable years under
2481	2481	6 subparagraph (R) with respect to that property.
2482	2482	7 If the taxpayer continues to own property through
2483	2483	8 the last day of the last tax year for which a
2484	2484	9 subtraction is allowed with respect to that property
2485	2485	10 under subparagraph (R) and for which the taxpayer was
2486	2486	11 allowed in any taxable year to make a subtraction
2487	2487	12 modification under subparagraph (R), then an amount
2488	2488	13 equal to that subtraction modification.
2489	2489	14 The taxpayer is required to make the addition
2490	2490	15 modification under this subparagraph only once with
2491	2491	16 respect to any one piece of property;
2492	2492	17 (G-12) An amount equal to the amount otherwise
2493	2493	18 allowed as a deduction in computing base income for
2494	2494	19 interest paid, accrued, or incurred, directly or
2495	2495	20 indirectly, (i) for taxable years ending on or after
2496	2496	21 December 31, 2004, to a foreign person who would be a
2497	2497	22 member of the same unitary business group but for the
2498	2498	23 fact that the foreign person's business activity
2499	2499	24 outside the United States is 80% or more of the foreign
2500	2500	25 person's total business activity and (ii) for taxable
2501	2501	26 years ending on or after December 31, 2008, to a person
2502	2502
2503	2503
2504	2504
2505	2505
2506	2506
2507	2507	HB3039 - 69 - LRB103 26307 HLH 52667 b
2508	2508
2509	2509
2510	2510	HB3039- 70 -LRB103 26307 HLH 52667 b HB3039 - 70 - LRB103 26307 HLH 52667 b
2511	2511	HB3039 - 70 - LRB103 26307 HLH 52667 b
2512	2512	1 who would be a member of the same unitary business
2513	2513	2 group but for the fact that the person is prohibited
2514	2514	3 under Section 1501(a)(27) from being included in the
2515	2515	4 unitary business group because he or she is ordinarily
2516	2516	5 required to apportion business income under different
2517	2517	6 subsections of Section 304. The addition modification
2518	2518	7 required by this subparagraph shall be reduced to the
2519	2519	8 extent that dividends were included in base income of
2520	2520	9 the unitary group for the same taxable year and
2521	2521	10 received by the taxpayer or by a member of the
2522	2522	11 taxpayer's unitary business group (including amounts
2523	2523	12 included in gross income pursuant to Sections 951
2524	2524	13 through 964 of the Internal Revenue Code and amounts
2525	2525	14 included in gross income under Section 78 of the
2526	2526	15 Internal Revenue Code) with respect to the stock of
2527	2527	16 the same person to whom the interest was paid,
2528	2528	17 accrued, or incurred.
2529	2529	18 This paragraph shall not apply to the following:
2530	2530	19 (i) an item of interest paid, accrued, or
2531	2531	20 incurred, directly or indirectly, to a person who
2532	2532	21 is subject in a foreign country or state, other
2533	2533	22 than a state which requires mandatory unitary
2534	2534	23 reporting, to a tax on or measured by net income
2535	2535	24 with respect to such interest; or
2536	2536	25 (ii) an item of interest paid, accrued, or
2537	2537	26 incurred, directly or indirectly, to a person if
2538	2538
2539	2539
2540	2540
2541	2541
2542	2542
2543	2543	HB3039 - 70 - LRB103 26307 HLH 52667 b
2544	2544
2545	2545
2546	2546	HB3039- 71 -LRB103 26307 HLH 52667 b HB3039 - 71 - LRB103 26307 HLH 52667 b
2547	2547	HB3039 - 71 - LRB103 26307 HLH 52667 b
2548	2548	1 the taxpayer can establish, based on a
2549	2549	2 preponderance of the evidence, both of the
2550	2550	3 following:
2551	2551	4 (a) the person, during the same taxable
2552	2552	5 year, paid, accrued, or incurred, the interest
2553	2553	6 to a person that is not a related member, and
2554	2554	7 (b) the transaction giving rise to the
2555	2555	8 interest expense between the taxpayer and the
2556	2556	9 person did not have as a principal purpose the
2557	2557	10 avoidance of Illinois income tax, and is paid
2558	2558	11 pursuant to a contract or agreement that
2559	2559	12 reflects an arm's-length interest rate and
2560	2560	13 terms; or
2561	2561	14 (iii) the taxpayer can establish, based on
2562	2562	15 clear and convincing evidence, that the interest
2563	2563	16 paid, accrued, or incurred relates to a contract
2564	2564	17 or agreement entered into at arm's-length rates
2565	2565	18 and terms and the principal purpose for the
2566	2566	19 payment is not federal or Illinois tax avoidance;
2567	2567	20 or
2568	2568	21 (iv) an item of interest paid, accrued, or
2569	2569	22 incurred, directly or indirectly, to a person if
2570	2570	23 the taxpayer establishes by clear and convincing
2571	2571	24 evidence that the adjustments are unreasonable; or
2572	2572	25 if the taxpayer and the Director agree in writing
2573	2573	26 to the application or use of an alternative method
2574	2574
2575	2575
2576	2576
2577	2577
2578	2578
2579	2579	HB3039 - 71 - LRB103 26307 HLH 52667 b
2580	2580
2581	2581
2582	2582	HB3039- 72 -LRB103 26307 HLH 52667 b HB3039 - 72 - LRB103 26307 HLH 52667 b
2583	2583	HB3039 - 72 - LRB103 26307 HLH 52667 b
2584	2584	1 of apportionment under Section 304(f).
2585	2585	2 Nothing in this subsection shall preclude the
2586	2586	3 Director from making any other adjustment
2587	2587	4 otherwise allowed under Section 404 of this Act
2588	2588	5 for any tax year beginning after the effective
2589	2589	6 date of this amendment provided such adjustment is
2590	2590	7 made pursuant to regulation adopted by the
2591	2591	8 Department and such regulations provide methods
2592	2592	9 and standards by which the Department will utilize
2593	2593	10 its authority under Section 404 of this Act;
2594	2594	11 (G-13) An amount equal to the amount of intangible
2595	2595	12 expenses and costs otherwise allowed as a deduction in
2596	2596	13 computing base income, and that were paid, accrued, or
2597	2597	14 incurred, directly or indirectly, (i) for taxable
2598	2598	15 years ending on or after December 31, 2004, to a
2599	2599	16 foreign person who would be a member of the same
2600	2600	17 unitary business group but for the fact that the
2601	2601	18 foreign person's business activity outside the United
2602	2602	19 States is 80% or more of that person's total business
2603	2603	20 activity and (ii) for taxable years ending on or after
2604	2604	21 December 31, 2008, to a person who would be a member of
2605	2605	22 the same unitary business group but for the fact that
2606	2606	23 the person is prohibited under Section 1501(a)(27)
2607	2607	24 from being included in the unitary business group
2608	2608	25 because he or she is ordinarily required to apportion
2609	2609	26 business income under different subsections of Section
2610	2610
2611	2611
2612	2612
2613	2613
2614	2614
2615	2615	HB3039 - 72 - LRB103 26307 HLH 52667 b
2616	2616
2617	2617
2618	2618	HB3039- 73 -LRB103 26307 HLH 52667 b HB3039 - 73 - LRB103 26307 HLH 52667 b
2619	2619	HB3039 - 73 - LRB103 26307 HLH 52667 b
2620	2620	1 304. The addition modification required by this
2621	2621	2 subparagraph shall be reduced to the extent that
2622	2622	3 dividends were included in base income of the unitary
2623	2623	4 group for the same taxable year and received by the
2624	2624	5 taxpayer or by a member of the taxpayer's unitary
2625	2625	6 business group (including amounts included in gross
2626	2626	7 income pursuant to Sections 951 through 964 of the
2627	2627	8 Internal Revenue Code and amounts included in gross
2628	2628	9 income under Section 78 of the Internal Revenue Code)
2629	2629	10 with respect to the stock of the same person to whom
2630	2630	11 the intangible expenses and costs were directly or
2631	2631	12 indirectly paid, incurred, or accrued. The preceding
2632	2632	13 sentence shall not apply to the extent that the same
2633	2633	14 dividends caused a reduction to the addition
2634	2634	15 modification required under Section 203(c)(2)(G-12) of
2635	2635	16 this Act. As used in this subparagraph, the term
2636	2636	17 "intangible expenses and costs" includes: (1)
2637	2637	18 expenses, losses, and costs for or related to the
2638	2638	19 direct or indirect acquisition, use, maintenance or
2639	2639	20 management, ownership, sale, exchange, or any other
2640	2640	21 disposition of intangible property; (2) losses
2641	2641	22 incurred, directly or indirectly, from factoring
2642	2642	23 transactions or discounting transactions; (3) royalty,
2643	2643	24 patent, technical, and copyright fees; (4) licensing
2644	2644	25 fees; and (5) other similar expenses and costs. For
2645	2645	26 purposes of this subparagraph, "intangible property"
2646	2646
2647	2647
2648	2648
2649	2649
2650	2650
2651	2651	HB3039 - 73 - LRB103 26307 HLH 52667 b
2652	2652
2653	2653
2654	2654	HB3039- 74 -LRB103 26307 HLH 52667 b HB3039 - 74 - LRB103 26307 HLH 52667 b
2655	2655	HB3039 - 74 - LRB103 26307 HLH 52667 b
2656	2656	1 includes patents, patent applications, trade names,
2657	2657	2 trademarks, service marks, copyrights, mask works,
2658	2658	3 trade secrets, and similar types of intangible assets.
2659	2659	4 This paragraph shall not apply to the following:
2660	2660	5 (i) any item of intangible expenses or costs
2661	2661	6 paid, accrued, or incurred, directly or
2662	2662	7 indirectly, from a transaction with a person who
2663	2663	8 is subject in a foreign country or state, other
2664	2664	9 than a state which requires mandatory unitary
2665	2665	10 reporting, to a tax on or measured by net income
2666	2666	11 with respect to such item; or
2667	2667	12 (ii) any item of intangible expense or cost
2668	2668	13 paid, accrued, or incurred, directly or
2669	2669	14 indirectly, if the taxpayer can establish, based
2670	2670	15 on a preponderance of the evidence, both of the
2671	2671	16 following:
2672	2672	17 (a) the person during the same taxable
2673	2673	18 year paid, accrued, or incurred, the
2674	2674	19 intangible expense or cost to a person that is
2675	2675	20 not a related member, and
2676	2676	21 (b) the transaction giving rise to the
2677	2677	22 intangible expense or cost between the
2678	2678	23 taxpayer and the person did not have as a
2679	2679	24 principal purpose the avoidance of Illinois
2680	2680	25 income tax, and is paid pursuant to a contract
2681	2681	26 or agreement that reflects arm's-length terms;
2682	2682
2683	2683
2684	2684
2685	2685
2686	2686
2687	2687	HB3039 - 74 - LRB103 26307 HLH 52667 b
2688	2688
2689	2689
2690	2690	HB3039- 75 -LRB103 26307 HLH 52667 b HB3039 - 75 - LRB103 26307 HLH 52667 b
2691	2691	HB3039 - 75 - LRB103 26307 HLH 52667 b
2692	2692	1 or
2693	2693	2 (iii) any item of intangible expense or cost
2694	2694	3 paid, accrued, or incurred, directly or
2695	2695	4 indirectly, from a transaction with a person if
2696	2696	5 the taxpayer establishes by clear and convincing
2697	2697	6 evidence, that the adjustments are unreasonable;
2698	2698	7 or if the taxpayer and the Director agree in
2699	2699	8 writing to the application or use of an
2700	2700	9 alternative method of apportionment under Section
2701	2701	10 304(f);
2702	2702	11 Nothing in this subsection shall preclude the
2703	2703	12 Director from making any other adjustment
2704	2704	13 otherwise allowed under Section 404 of this Act
2705	2705	14 for any tax year beginning after the effective
2706	2706	15 date of this amendment provided such adjustment is
2707	2707	16 made pursuant to regulation adopted by the
2708	2708	17 Department and such regulations provide methods
2709	2709	18 and standards by which the Department will utilize
2710	2710	19 its authority under Section 404 of this Act;
2711	2711	20 (G-14) For taxable years ending on or after
2712	2712	21 December 31, 2008, an amount equal to the amount of
2713	2713	22 insurance premium expenses and costs otherwise allowed
2714	2714	23 as a deduction in computing base income, and that were
2715	2715	24 paid, accrued, or incurred, directly or indirectly, to
2716	2716	25 a person who would be a member of the same unitary
2717	2717	26 business group but for the fact that the person is
2718	2718
2719	2719
2720	2720
2721	2721
2722	2722
2723	2723	HB3039 - 75 - LRB103 26307 HLH 52667 b
2724	2724
2725	2725
2726	2726	HB3039- 76 -LRB103 26307 HLH 52667 b HB3039 - 76 - LRB103 26307 HLH 52667 b
2727	2727	HB3039 - 76 - LRB103 26307 HLH 52667 b
2728	2728	1 prohibited under Section 1501(a)(27) from being
2729	2729	2 included in the unitary business group because he or
2730	2730	3 she is ordinarily required to apportion business
2731	2731	4 income under different subsections of Section 304. The
2732	2732	5 addition modification required by this subparagraph
2733	2733	6 shall be reduced to the extent that dividends were
2734	2734	7 included in base income of the unitary group for the
2735	2735	8 same taxable year and received by the taxpayer or by a
2736	2736	9 member of the taxpayer's unitary business group
2737	2737	10 (including amounts included in gross income under
2738	2738	11 Sections 951 through 964 of the Internal Revenue Code
2739	2739	12 and amounts included in gross income under Section 78
2740	2740	13 of the Internal Revenue Code) with respect to the
2741	2741	14 stock of the same person to whom the premiums and costs
2742	2742	15 were directly or indirectly paid, incurred, or
2743	2743	16 accrued. The preceding sentence does not apply to the
2744	2744	17 extent that the same dividends caused a reduction to
2745	2745	18 the addition modification required under Section
2746	2746	19 203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this
2747	2747	20 Act;
2748	2748	21 (G-15) An amount equal to the credit allowable to
2749	2749	22 the taxpayer under Section 218(a) of this Act,
2750	2750	23 determined without regard to Section 218(c) of this
2751	2751	24 Act;
2752	2752	25 (G-16) For taxable years ending on or after
2753	2753	26 December 31, 2017, an amount equal to the deduction
2754	2754
2755	2755
2756	2756
2757	2757
2758	2758
2759	2759	HB3039 - 76 - LRB103 26307 HLH 52667 b
2760	2760
2761	2761
2762	2762	HB3039- 77 -LRB103 26307 HLH 52667 b HB3039 - 77 - LRB103 26307 HLH 52667 b
2763	2763	HB3039 - 77 - LRB103 26307 HLH 52667 b
2764	2764	1 allowed under Section 199 of the Internal Revenue Code
2765	2765	2 for the taxable year;
2766	2766	3 and by deducting from the total so obtained the sum of the
2767	2767	4 following amounts:
2768	2768	5 (H) An amount equal to all amounts included in
2769	2769	6 such total pursuant to the provisions of Sections
2770	2770	7 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 408
2771	2771	8 of the Internal Revenue Code or included in such total
2772	2772	9 as distributions under the provisions of any
2773	2773	10 retirement or disability plan for employees of any
2774	2774	11 governmental agency or unit, or retirement payments to
2775	2775	12 retired partners, which payments are excluded in
2776	2776	13 computing net earnings from self employment by Section
2777	2777	14 1402 of the Internal Revenue Code and regulations
2778	2778	15 adopted pursuant thereto;
2779	2779	16 (I) The valuation limitation amount;
2780	2780	17 (J) An amount equal to the amount of any tax
2781	2781	18 imposed by this Act which was refunded to the taxpayer
2782	2782	19 and included in such total for the taxable year;
2783	2783	20 (K) An amount equal to all amounts included in
2784	2784	21 taxable income as modified by subparagraphs (A), (B),
2785	2785	22 (C), (D), (E), (F) and (G) which are exempt from
2786	2786	23 taxation by this State either by reason of its
2787	2787	24 statutes or Constitution or by reason of the
2788	2788	25 Constitution, treaties or statutes of the United
2789	2789	26 States; provided that, in the case of any statute of
2790	2790
2791	2791
2792	2792
2793	2793
2794	2794
2795	2795	HB3039 - 77 - LRB103 26307 HLH 52667 b
2796	2796
2797	2797
2798	2798	HB3039- 78 -LRB103 26307 HLH 52667 b HB3039 - 78 - LRB103 26307 HLH 52667 b
2799	2799	HB3039 - 78 - LRB103 26307 HLH 52667 b
2800	2800	1 this State that exempts income derived from bonds or
2801	2801	2 other obligations from the tax imposed under this Act,
2802	2802	3 the amount exempted shall be the interest net of bond
2803	2803	4 premium amortization;
2804	2804	5 (L) With the exception of any amounts subtracted
2805	2805	6 under subparagraph (K), an amount equal to the sum of
2806	2806	7 all amounts disallowed as deductions by (i) Sections
2807	2807	8 171(a)(2) and 265(a)(2) of the Internal Revenue Code,
2808	2808	9 and all amounts of expenses allocable to interest and
2809	2809	10 disallowed as deductions by Section 265(a)(1) of the
2810	2810	11 Internal Revenue Code; and (ii) for taxable years
2811	2811	12 ending on or after August 13, 1999, Sections
2812	2812	13 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
2813	2813	14 Internal Revenue Code, plus, (iii) for taxable years
2814	2814	15 ending on or after December 31, 2011, Section
2815	2815	16 45G(e)(3) of the Internal Revenue Code and, for
2816	2816	17 taxable years ending on or after December 31, 2008,
2817	2817	18 any amount included in gross income under Section 87
2818	2818	19 of the Internal Revenue Code; the provisions of this
2819	2819	20 subparagraph are exempt from the provisions of Section
2820	2820	21 250;
2821	2821	22 (M) An amount equal to those dividends included in
2822	2822	23 such total which were paid by a corporation which
2823	2823	24 conducts business operations in a River Edge
2824	2824	25 Redevelopment Zone or zones created under the River
2825	2825	26 Edge Redevelopment Zone Act and conducts substantially
2826	2826
2827	2827
2828	2828
2829	2829
2830	2830
2831	2831	HB3039 - 78 - LRB103 26307 HLH 52667 b
2832	2832
2833	2833
2834	2834	HB3039- 79 -LRB103 26307 HLH 52667 b HB3039 - 79 - LRB103 26307 HLH 52667 b
2835	2835	HB3039 - 79 - LRB103 26307 HLH 52667 b
2836	2836	1 all of its operations in a River Edge Redevelopment
2837	2837	2 Zone or zones. This subparagraph (M) is exempt from
2838	2838	3 the provisions of Section 250;
2839	2839	4 (N) An amount equal to any contribution made to a
2840	2840	5 job training project established pursuant to the Tax
2841	2841	6 Increment Allocation Redevelopment Act;
2842	2842	7 (O) An amount equal to those dividends included in
2843	2843	8 such total that were paid by a corporation that
2844	2844	9 conducts business operations in a federally designated
2845	2845	10 Foreign Trade Zone or Sub-Zone and that is designated
2846	2846	11 a High Impact Business located in Illinois; provided
2847	2847	12 that dividends eligible for the deduction provided in
2848	2848	13 subparagraph (M) of paragraph (2) of this subsection
2849	2849	14 shall not be eligible for the deduction provided under
2850	2850	15 this subparagraph (O);
2851	2851	16 (P) An amount equal to the amount of the deduction
2852	2852	17 used to compute the federal income tax credit for
2853	2853	18 restoration of substantial amounts held under claim of
2854	2854	19 right for the taxable year pursuant to Section 1341 of
2855	2855	20 the Internal Revenue Code;
2856	2856	21 (Q) For taxable year 1999 and thereafter, an
2857	2857	22 amount equal to the amount of any (i) distributions,
2858	2858	23 to the extent includible in gross income for federal
2859	2859	24 income tax purposes, made to the taxpayer because of
2860	2860	25 his or her status as a victim of persecution for racial
2861	2861	26 or religious reasons by Nazi Germany or any other Axis
2862	2862
2863	2863
2864	2864
2865	2865
2866	2866
2867	2867	HB3039 - 79 - LRB103 26307 HLH 52667 b
2868	2868
2869	2869
2870	2870	HB3039- 80 -LRB103 26307 HLH 52667 b HB3039 - 80 - LRB103 26307 HLH 52667 b
2871	2871	HB3039 - 80 - LRB103 26307 HLH 52667 b
2872	2872	1 regime or as an heir of the victim and (ii) items of
2873	2873	2 income, to the extent includible in gross income for
2874	2874	3 federal income tax purposes, attributable to, derived
2875	2875	4 from or in any way related to assets stolen from,
2876	2876	5 hidden from, or otherwise lost to a victim of
2877	2877	6 persecution for racial or religious reasons by Nazi
2878	2878	7 Germany or any other Axis regime immediately prior to,
2879	2879	8 during, and immediately after World War II, including,
2880	2880	9 but not limited to, interest on the proceeds
2881	2881	10 receivable as insurance under policies issued to a
2882	2882	11 victim of persecution for racial or religious reasons
2883	2883	12 by Nazi Germany or any other Axis regime by European
2884	2884	13 insurance companies immediately prior to and during
2885	2885	14 World War II; provided, however, this subtraction from
2886	2886	15 federal adjusted gross income does not apply to assets
2887	2887	16 acquired with such assets or with the proceeds from
2888	2888	17 the sale of such assets; provided, further, this
2889	2889	18 paragraph shall only apply to a taxpayer who was the
2890	2890	19 first recipient of such assets after their recovery
2891	2891	20 and who is a victim of persecution for racial or
2892	2892	21 religious reasons by Nazi Germany or any other Axis
2893	2893	22 regime or as an heir of the victim. The amount of and
2894	2894	23 the eligibility for any public assistance, benefit, or
2895	2895	24 similar entitlement is not affected by the inclusion
2896	2896	25 of items (i) and (ii) of this paragraph in gross income
2897	2897	26 for federal income tax purposes. This paragraph is
2898	2898
2899	2899
2900	2900
2901	2901
2902	2902
2903	2903	HB3039 - 80 - LRB103 26307 HLH 52667 b
2904	2904
2905	2905
2906	2906	HB3039- 81 -LRB103 26307 HLH 52667 b HB3039 - 81 - LRB103 26307 HLH 52667 b
2907	2907	HB3039 - 81 - LRB103 26307 HLH 52667 b
2908	2908	1 exempt from the provisions of Section 250;
2909	2909	2 (R) For taxable years 2001 and thereafter, for the
2910	2910	3 taxable year in which the bonus depreciation deduction
2911	2911	4 is taken on the taxpayer's federal income tax return
2912	2912	5 under subsection (k) of Section 168 of the Internal
2913	2913	6 Revenue Code and for each applicable taxable year
2914	2914	7 thereafter, an amount equal to "x", where:
2915	2915	8 (1) "y" equals the amount of the depreciation
2916	2916	9 deduction taken for the taxable year on the
2917	2917	10 taxpayer's federal income tax return on property
2918	2918	11 for which the bonus depreciation deduction was
2919	2919	12 taken in any year under subsection (k) of Section
2920	2920	13 168 of the Internal Revenue Code, but not
2921	2921	14 including the bonus depreciation deduction;
2922	2922	15 (2) for taxable years ending on or before
2923	2923	16 December 31, 2005, "x" equals "y" multiplied by 30
2924	2924	17 and then divided by 70 (or "y" multiplied by
2925	2925	18 0.429); and
2926	2926	19 (3) for taxable years ending after December
2927	2927	20 31, 2005:
2928	2928	21 (i) for property on which a bonus
2929	2929	22 depreciation deduction of 30% of the adjusted
2930	2930	23 basis was taken, "x" equals "y" multiplied by
2931	2931	24 30 and then divided by 70 (or "y" multiplied
2932	2932	25 by 0.429);
2933	2933	26 (ii) for property on which a bonus
2934	2934
2935	2935
2936	2936
2937	2937
2938	2938
2939	2939	HB3039 - 81 - LRB103 26307 HLH 52667 b
2940	2940
2941	2941
2942	2942	HB3039- 82 -LRB103 26307 HLH 52667 b HB3039 - 82 - LRB103 26307 HLH 52667 b
2943	2943	HB3039 - 82 - LRB103 26307 HLH 52667 b
2944	2944	1 depreciation deduction of 50% of the adjusted
2945	2945	2 basis was taken, "x" equals "y" multiplied by
2946	2946	3 1.0;
2947	2947	4 (iii) for property on which a bonus
2948	2948	5 depreciation deduction of 100% of the adjusted
2949	2949	6 basis was taken in a taxable year ending on or
2950	2950	7 after December 31, 2021, "x" equals the
2951	2951	8 depreciation deduction that would be allowed
2952	2952	9 on that property if the taxpayer had made the
2953	2953	10 election under Section 168(k)(7) of the
2954	2954	11 Internal Revenue Code to not claim bonus
2955	2955	12 depreciation on that property; and
2956	2956	13 (iv) for property on which a bonus
2957	2957	14 depreciation deduction of a percentage other
2958	2958	15 than 30%, 50% or 100% of the adjusted basis
2959	2959	16 was taken in a taxable year ending on or after
2960	2960	17 December 31, 2021, "x" equals "y" multiplied
2961	2961	18 by 100 times the percentage bonus depreciation
2962	2962	19 on the property (that is, 100(bonus%)) and
2963	2963	20 then divided by 100 times 1 minus the
2964	2964	21 percentage bonus depreciation on the property
2965	2965	22 (that is, 100(1bonus%)).
2966	2966	23 The aggregate amount deducted under this
2967	2967	24 subparagraph in all taxable years for any one piece of
2968	2968	25 property may not exceed the amount of the bonus
2969	2969	26 depreciation deduction taken on that property on the
2970	2970
2971	2971
2972	2972
2973	2973
2974	2974
2975	2975	HB3039 - 82 - LRB103 26307 HLH 52667 b
2976	2976
2977	2977
2978	2978	HB3039- 83 -LRB103 26307 HLH 52667 b HB3039 - 83 - LRB103 26307 HLH 52667 b
2979	2979	HB3039 - 83 - LRB103 26307 HLH 52667 b
2980	2980	1 taxpayer's federal income tax return under subsection
2981	2981	2 (k) of Section 168 of the Internal Revenue Code. This
2982	2982	3 subparagraph (R) is exempt from the provisions of
2983	2983	4 Section 250;
2984	2984	5 (S) If the taxpayer sells, transfers, abandons, or
2985	2985	6 otherwise disposes of property for which the taxpayer
2986	2986	7 was required in any taxable year to make an addition
2987	2987	8 modification under subparagraph (G-10), then an amount
2988	2988	9 equal to that addition modification.
2989	2989	10 If the taxpayer continues to own property through
2990	2990	11 the last day of the last tax year for which a
2991	2991	12 subtraction is allowed with respect to that property
2992	2992	13 under subparagraph (R) and for which the taxpayer was
2993	2993	14 required in any taxable year to make an addition
2994	2994	15 modification under subparagraph (G-10), then an amount
2995	2995	16 equal to that addition modification.
2996	2996	17 The taxpayer is allowed to take the deduction
2997	2997	18 under this subparagraph only once with respect to any
2998	2998	19 one piece of property.
2999	2999	20 This subparagraph (S) is exempt from the
3000	3000	21 provisions of Section 250;
3001	3001	22 (T) The amount of (i) any interest income (net of
3002	3002	23 the deductions allocable thereto) taken into account
3003	3003	24 for the taxable year with respect to a transaction
3004	3004	25 with a taxpayer that is required to make an addition
3005	3005	26 modification with respect to such transaction under
3006	3006
3007	3007
3008	3008
3009	3009
3010	3010
3011	3011	HB3039 - 83 - LRB103 26307 HLH 52667 b
3012	3012
3013	3013
3014	3014	HB3039- 84 -LRB103 26307 HLH 52667 b HB3039 - 84 - LRB103 26307 HLH 52667 b
3015	3015	HB3039 - 84 - LRB103 26307 HLH 52667 b
3016	3016	1 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
3017	3017	2 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
3018	3018	3 the amount of such addition modification and (ii) any
3019	3019	4 income from intangible property (net of the deductions
3020	3020	5 allocable thereto) taken into account for the taxable
3021	3021	6 year with respect to a transaction with a taxpayer
3022	3022	7 that is required to make an addition modification with
3023	3023	8 respect to such transaction under Section
3024	3024	9 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
3025	3025	10 203(d)(2)(D-8), but not to exceed the amount of such
3026	3026	11 addition modification. This subparagraph (T) is exempt
3027	3027	12 from the provisions of Section 250;
3028	3028	13 (U) An amount equal to the interest income taken
3029	3029	14 into account for the taxable year (net of the
3030	3030	15 deductions allocable thereto) with respect to
3031	3031	16 transactions with (i) a foreign person who would be a
3032	3032	17 member of the taxpayer's unitary business group but
3033	3033	18 for the fact the foreign person's business activity
3034	3034	19 outside the United States is 80% or more of that
3035	3035	20 person's total business activity and (ii) for taxable
3036	3036	21 years ending on or after December 31, 2008, to a person
3037	3037	22 who would be a member of the same unitary business
3038	3038	23 group but for the fact that the person is prohibited
3039	3039	24 under Section 1501(a)(27) from being included in the
3040	3040	25 unitary business group because he or she is ordinarily
3041	3041	26 required to apportion business income under different
3042	3042
3043	3043
3044	3044
3045	3045
3046	3046
3047	3047	HB3039 - 84 - LRB103 26307 HLH 52667 b
3048	3048
3049	3049
3050	3050	HB3039- 85 -LRB103 26307 HLH 52667 b HB3039 - 85 - LRB103 26307 HLH 52667 b
3051	3051	HB3039 - 85 - LRB103 26307 HLH 52667 b
3052	3052	1 subsections of Section 304, but not to exceed the
3053	3053	2 addition modification required to be made for the same
3054	3054	3 taxable year under Section 203(c)(2)(G-12) for
3055	3055	4 interest paid, accrued, or incurred, directly or
3056	3056	5 indirectly, to the same person. This subparagraph (U)
3057	3057	6 is exempt from the provisions of Section 250;
3058	3058	7 (V) An amount equal to the income from intangible
3059	3059	8 property taken into account for the taxable year (net
3060	3060	9 of the deductions allocable thereto) with respect to
3061	3061	10 transactions with (i) a foreign person who would be a
3062	3062	11 member of the taxpayer's unitary business group but
3063	3063	12 for the fact that the foreign person's business
3064	3064	13 activity outside the United States is 80% or more of
3065	3065	14 that person's total business activity and (ii) for
3066	3066	15 taxable years ending on or after December 31, 2008, to
3067	3067	16 a person who would be a member of the same unitary
3068	3068	17 business group but for the fact that the person is
3069	3069	18 prohibited under Section 1501(a)(27) from being
3070	3070	19 included in the unitary business group because he or
3071	3071	20 she is ordinarily required to apportion business
3072	3072	21 income under different subsections of Section 304, but
3073	3073	22 not to exceed the addition modification required to be
3074	3074	23 made for the same taxable year under Section
3075	3075	24 203(c)(2)(G-13) for intangible expenses and costs
3076	3076	25 paid, accrued, or incurred, directly or indirectly, to
3077	3077	26 the same foreign person. This subparagraph (V) is
3078	3078
3079	3079
3080	3080
3081	3081
3082	3082
3083	3083	HB3039 - 85 - LRB103 26307 HLH 52667 b
3084	3084
3085	3085
3086	3086	HB3039- 86 -LRB103 26307 HLH 52667 b HB3039 - 86 - LRB103 26307 HLH 52667 b
3087	3087	HB3039 - 86 - LRB103 26307 HLH 52667 b
3088	3088	1 exempt from the provisions of Section 250;
3089	3089	2 (W) in the case of an estate, an amount equal to
3090	3090	3 all amounts included in such total pursuant to the
3091	3091	4 provisions of Section 111 of the Internal Revenue Code
3092	3092	5 as a recovery of items previously deducted by the
3093	3093	6 decedent from adjusted gross income in the computation
3094	3094	7 of taxable income. This subparagraph (W) is exempt
3095	3095	8 from Section 250;
3096	3096	9 (X) an amount equal to the refund included in such
3097	3097	10 total of any tax deducted for federal income tax
3098	3098	11 purposes, to the extent that deduction was added back
3099	3099	12 under subparagraph (F). This subparagraph (X) is
3100	3100	13 exempt from the provisions of Section 250;
3101	3101	14 (Y) For taxable years ending on or after December
3102	3102	15 31, 2011, in the case of a taxpayer who was required to
3103	3103	16 add back any insurance premiums under Section
3104	3104	17 203(c)(2)(G-14), such taxpayer may elect to subtract
3105	3105	18 that part of a reimbursement received from the
3106	3106	19 insurance company equal to the amount of the expense
3107	3107	20 or loss (including expenses incurred by the insurance
3108	3108	21 company) that would have been taken into account as a
3109	3109	22 deduction for federal income tax purposes if the
3110	3110	23 expense or loss had been uninsured. If a taxpayer
3111	3111	24 makes the election provided for by this subparagraph
3112	3112	25 (Y), the insurer to which the premiums were paid must
3113	3113	26 add back to income the amount subtracted by the
3114	3114
3115	3115
3116	3116
3117	3117
3118	3118
3119	3119	HB3039 - 86 - LRB103 26307 HLH 52667 b
3120	3120
3121	3121
3122	3122	HB3039- 87 -LRB103 26307 HLH 52667 b HB3039 - 87 - LRB103 26307 HLH 52667 b
3123	3123	HB3039 - 87 - LRB103 26307 HLH 52667 b
3124	3124	1 taxpayer pursuant to this subparagraph (Y). This
3125	3125	2 subparagraph (Y) is exempt from the provisions of
3126	3126	3 Section 250; and
3127	3127	4 (Z) For taxable years beginning after December 31,
3128	3128	5 2018 and before January 1, 2026, the amount of excess
3129	3129	6 business loss of the taxpayer disallowed as a
3130	3130	7 deduction by Section 461(l)(1)(B) of the Internal
3131	3131	8 Revenue Code.
3132	3132	9 (3) Limitation. The amount of any modification
3133	3133	10 otherwise required under this subsection shall, under
3134	3134	11 regulations prescribed by the Department, be adjusted by
3135	3135	12 any amounts included therein which were properly paid,
3136	3136	13 credited, or required to be distributed, or permanently
3137	3137	14 set aside for charitable purposes pursuant to Internal
3138	3138	15 Revenue Code Section 642(c) during the taxable year.
3139	3139	16 (d) Partnerships.
3140	3140	17 (1) In general. In the case of a partnership, base
3141	3141	18 income means an amount equal to the taxpayer's taxable
3142	3142	19 income for the taxable year as modified by paragraph (2).
3143	3143	20 (2) Modifications. The taxable income referred to in
3144	3144	21 paragraph (1) shall be modified by adding thereto the sum
3145	3145	22 of the following amounts:
3146	3146	23 (A) An amount equal to all amounts paid or accrued
3147	3147	24 to the taxpayer as interest or dividends during the
3148	3148	25 taxable year to the extent excluded from gross income
3149	3149
3150	3150
3151	3151
3152	3152
3153	3153
3154	3154	HB3039 - 87 - LRB103 26307 HLH 52667 b
3155	3155
3156	3156
3157	3157	HB3039- 88 -LRB103 26307 HLH 52667 b HB3039 - 88 - LRB103 26307 HLH 52667 b
3158	3158	HB3039 - 88 - LRB103 26307 HLH 52667 b
3159	3159	1 in the computation of taxable income;
3160	3160	2 (B) An amount equal to the amount of tax imposed by
3161	3161	3 this Act to the extent deducted from gross income for
3162	3162	4 the taxable year;
3163	3163	5 (C) The amount of deductions allowed to the
3164	3164	6 partnership pursuant to Section 707 (c) of the
3165	3165	7 Internal Revenue Code in calculating its taxable
3166	3166	8 income;
3167	3167	9 (D) An amount equal to the amount of the capital
3168	3168	10 gain deduction allowable under the Internal Revenue
3169	3169	11 Code, to the extent deducted from gross income in the
3170	3170	12 computation of taxable income;
3171	3171	13 (D-5) For taxable years 2001 and thereafter, an
3172	3172	14 amount equal to the bonus depreciation deduction taken
3173	3173	15 on the taxpayer's federal income tax return for the
3174	3174	16 taxable year under subsection (k) of Section 168 of
3175	3175	17 the Internal Revenue Code;
3176	3176	18 (D-6) If the taxpayer sells, transfers, abandons,
3177	3177	19 or otherwise disposes of property for which the
3178	3178	20 taxpayer was required in any taxable year to make an
3179	3179	21 addition modification under subparagraph (D-5), then
3180	3180	22 an amount equal to the aggregate amount of the
3181	3181	23 deductions taken in all taxable years under
3182	3182	24 subparagraph (O) with respect to that property.
3183	3183	25 If the taxpayer continues to own property through
3184	3184	26 the last day of the last tax year for which a
3185	3185
3186	3186
3187	3187
3188	3188
3189	3189
3190	3190	HB3039 - 88 - LRB103 26307 HLH 52667 b
3191	3191
3192	3192
3193	3193	HB3039- 89 -LRB103 26307 HLH 52667 b HB3039 - 89 - LRB103 26307 HLH 52667 b
3194	3194	HB3039 - 89 - LRB103 26307 HLH 52667 b
3195	3195	1 subtraction is allowed with respect to that property
3196	3196	2 under subparagraph (O) and for which the taxpayer was
3197	3197	3 allowed in any taxable year to make a subtraction
3198	3198	4 modification under subparagraph (O), then an amount
3199	3199	5 equal to that subtraction modification.
3200	3200	6 The taxpayer is required to make the addition
3201	3201	7 modification under this subparagraph only once with
3202	3202	8 respect to any one piece of property;
3203	3203	9 (D-7) An amount equal to the amount otherwise
3204	3204	10 allowed as a deduction in computing base income for
3205	3205	11 interest paid, accrued, or incurred, directly or
3206	3206	12 indirectly, (i) for taxable years ending on or after
3207	3207	13 December 31, 2004, to a foreign person who would be a
3208	3208	14 member of the same unitary business group but for the
3209	3209	15 fact the foreign person's business activity outside
3210	3210	16 the United States is 80% or more of the foreign
3211	3211	17 person's total business activity and (ii) for taxable
3212	3212	18 years ending on or after December 31, 2008, to a person
3213	3213	19 who would be a member of the same unitary business
3214	3214	20 group but for the fact that the person is prohibited
3215	3215	21 under Section 1501(a)(27) from being included in the
3216	3216	22 unitary business group because he or she is ordinarily
3217	3217	23 required to apportion business income under different
3218	3218	24 subsections of Section 304. The addition modification
3219	3219	25 required by this subparagraph shall be reduced to the
3220	3220	26 extent that dividends were included in base income of
3221	3221
3222	3222
3223	3223
3224	3224
3225	3225
3226	3226	HB3039 - 89 - LRB103 26307 HLH 52667 b
3227	3227
3228	3228
3229	3229	HB3039- 90 -LRB103 26307 HLH 52667 b HB3039 - 90 - LRB103 26307 HLH 52667 b
3230	3230	HB3039 - 90 - LRB103 26307 HLH 52667 b
3231	3231	1 the unitary group for the same taxable year and
3232	3232	2 received by the taxpayer or by a member of the
3233	3233	3 taxpayer's unitary business group (including amounts
3234	3234	4 included in gross income pursuant to Sections 951
3235	3235	5 through 964 of the Internal Revenue Code and amounts
3236	3236	6 included in gross income under Section 78 of the
3237	3237	7 Internal Revenue Code) with respect to the stock of
3238	3238	8 the same person to whom the interest was paid,
3239	3239	9 accrued, or incurred.
3240	3240	10 This paragraph shall not apply to the following:
3241	3241	11 (i) an item of interest paid, accrued, or
3242	3242	12 incurred, directly or indirectly, to a person who
3243	3243	13 is subject in a foreign country or state, other
3244	3244	14 than a state which requires mandatory unitary
3245	3245	15 reporting, to a tax on or measured by net income
3246	3246	16 with respect to such interest; or
3247	3247	17 (ii) an item of interest paid, accrued, or
3248	3248	18 incurred, directly or indirectly, to a person if
3249	3249	19 the taxpayer can establish, based on a
3250	3250	20 preponderance of the evidence, both of the
3251	3251	21 following:
3252	3252	22 (a) the person, during the same taxable
3253	3253	23 year, paid, accrued, or incurred, the interest
3254	3254	24 to a person that is not a related member, and
3255	3255	25 (b) the transaction giving rise to the
3256	3256	26 interest expense between the taxpayer and the
3257	3257
3258	3258
3259	3259
3260	3260
3261	3261
3262	3262	HB3039 - 90 - LRB103 26307 HLH 52667 b
3263	3263
3264	3264
3265	3265	HB3039- 91 -LRB103 26307 HLH 52667 b HB3039 - 91 - LRB103 26307 HLH 52667 b
3266	3266	HB3039 - 91 - LRB103 26307 HLH 52667 b
3267	3267	1 person did not have as a principal purpose the
3268	3268	2 avoidance of Illinois income tax, and is paid
3269	3269	3 pursuant to a contract or agreement that
3270	3270	4 reflects an arm's-length interest rate and
3271	3271	5 terms; or
3272	3272	6 (iii) the taxpayer can establish, based on
3273	3273	7 clear and convincing evidence, that the interest
3274	3274	8 paid, accrued, or incurred relates to a contract
3275	3275	9 or agreement entered into at arm's-length rates
3276	3276	10 and terms and the principal purpose for the
3277	3277	11 payment is not federal or Illinois tax avoidance;
3278	3278	12 or
3279	3279	13 (iv) an item of interest paid, accrued, or
3280	3280	14 incurred, directly or indirectly, to a person if
3281	3281	15 the taxpayer establishes by clear and convincing
3282	3282	16 evidence that the adjustments are unreasonable; or
3283	3283	17 if the taxpayer and the Director agree in writing
3284	3284	18 to the application or use of an alternative method
3285	3285	19 of apportionment under Section 304(f).
3286	3286	20 Nothing in this subsection shall preclude the
3287	3287	21 Director from making any other adjustment
3288	3288	22 otherwise allowed under Section 404 of this Act
3289	3289	23 for any tax year beginning after the effective
3290	3290	24 date of this amendment provided such adjustment is
3291	3291	25 made pursuant to regulation adopted by the
3292	3292	26 Department and such regulations provide methods
3293	3293
3294	3294
3295	3295
3296	3296
3297	3297
3298	3298	HB3039 - 91 - LRB103 26307 HLH 52667 b
3299	3299
3300	3300
3301	3301	HB3039- 92 -LRB103 26307 HLH 52667 b HB3039 - 92 - LRB103 26307 HLH 52667 b
3302	3302	HB3039 - 92 - LRB103 26307 HLH 52667 b
3303	3303	1 and standards by which the Department will utilize
3304	3304	2 its authority under Section 404 of this Act; and
3305	3305	3 (D-8) An amount equal to the amount of intangible
3306	3306	4 expenses and costs otherwise allowed as a deduction in
3307	3307	5 computing base income, and that were paid, accrued, or
3308	3308	6 incurred, directly or indirectly, (i) for taxable
3309	3309	7 years ending on or after December 31, 2004, to a
3310	3310	8 foreign person who would be a member of the same
3311	3311	9 unitary business group but for the fact that the
3312	3312	10 foreign person's business activity outside the United
3313	3313	11 States is 80% or more of that person's total business
3314	3314	12 activity and (ii) for taxable years ending on or after
3315	3315	13 December 31, 2008, to a person who would be a member of
3316	3316	14 the same unitary business group but for the fact that
3317	3317	15 the person is prohibited under Section 1501(a)(27)
3318	3318	16 from being included in the unitary business group
3319	3319	17 because he or she is ordinarily required to apportion
3320	3320	18 business income under different subsections of Section
3321	3321	19 304. The addition modification required by this
3322	3322	20 subparagraph shall be reduced to the extent that
3323	3323	21 dividends were included in base income of the unitary
3324	3324	22 group for the same taxable year and received by the
3325	3325	23 taxpayer or by a member of the taxpayer's unitary
3326	3326	24 business group (including amounts included in gross
3327	3327	25 income pursuant to Sections 951 through 964 of the
3328	3328	26 Internal Revenue Code and amounts included in gross
3329	3329
3330	3330
3331	3331
3332	3332
3333	3333
3334	3334	HB3039 - 92 - LRB103 26307 HLH 52667 b
3335	3335
3336	3336
3337	3337	HB3039- 93 -LRB103 26307 HLH 52667 b HB3039 - 93 - LRB103 26307 HLH 52667 b
3338	3338	HB3039 - 93 - LRB103 26307 HLH 52667 b
3339	3339	1 income under Section 78 of the Internal Revenue Code)
3340	3340	2 with respect to the stock of the same person to whom
3341	3341	3 the intangible expenses and costs were directly or
3342	3342	4 indirectly paid, incurred or accrued. The preceding
3343	3343	5 sentence shall not apply to the extent that the same
3344	3344	6 dividends caused a reduction to the addition
3345	3345	7 modification required under Section 203(d)(2)(D-7) of
3346	3346	8 this Act. As used in this subparagraph, the term
3347	3347	9 "intangible expenses and costs" includes (1) expenses,
3348	3348	10 losses, and costs for, or related to, the direct or
3349	3349	11 indirect acquisition, use, maintenance or management,
3350	3350	12 ownership, sale, exchange, or any other disposition of
3351	3351	13 intangible property; (2) losses incurred, directly or
3352	3352	14 indirectly, from factoring transactions or discounting
3353	3353	15 transactions; (3) royalty, patent, technical, and
3354	3354	16 copyright fees; (4) licensing fees; and (5) other
3355	3355	17 similar expenses and costs. For purposes of this
3356	3356	18 subparagraph, "intangible property" includes patents,
3357	3357	19 patent applications, trade names, trademarks, service
3358	3358	20 marks, copyrights, mask works, trade secrets, and
3359	3359	21 similar types of intangible assets;
3360	3360	22 This paragraph shall not apply to the following:
3361	3361	23 (i) any item of intangible expenses or costs
3362	3362	24 paid, accrued, or incurred, directly or
3363	3363	25 indirectly, from a transaction with a person who
3364	3364	26 is subject in a foreign country or state, other
3365	3365
3366	3366
3367	3367
3368	3368
3369	3369
3370	3370	HB3039 - 93 - LRB103 26307 HLH 52667 b
3371	3371
3372	3372
3373	3373	HB3039- 94 -LRB103 26307 HLH 52667 b HB3039 - 94 - LRB103 26307 HLH 52667 b
3374	3374	HB3039 - 94 - LRB103 26307 HLH 52667 b
3375	3375	1 than a state which requires mandatory unitary
3376	3376	2 reporting, to a tax on or measured by net income
3377	3377	3 with respect to such item; or
3378	3378	4 (ii) any item of intangible expense or cost
3379	3379	5 paid, accrued, or incurred, directly or
3380	3380	6 indirectly, if the taxpayer can establish, based
3381	3381	7 on a preponderance of the evidence, both of the
3382	3382	8 following:
3383	3383	9 (a) the person during the same taxable
3384	3384	10 year paid, accrued, or incurred, the
3385	3385	11 intangible expense or cost to a person that is
3386	3386	12 not a related member, and
3387	3387	13 (b) the transaction giving rise to the
3388	3388	14 intangible expense or cost between the
3389	3389	15 taxpayer and the person did not have as a
3390	3390	16 principal purpose the avoidance of Illinois
3391	3391	17 income tax, and is paid pursuant to a contract
3392	3392	18 or agreement that reflects arm's-length terms;
3393	3393	19 or
3394	3394	20 (iii) any item of intangible expense or cost
3395	3395	21 paid, accrued, or incurred, directly or
3396	3396	22 indirectly, from a transaction with a person if
3397	3397	23 the taxpayer establishes by clear and convincing
3398	3398	24 evidence, that the adjustments are unreasonable;
3399	3399	25 or if the taxpayer and the Director agree in
3400	3400	26 writing to the application or use of an
3401	3401
3402	3402
3403	3403
3404	3404
3405	3405
3406	3406	HB3039 - 94 - LRB103 26307 HLH 52667 b
3407	3407
3408	3408
3409	3409	HB3039- 95 -LRB103 26307 HLH 52667 b HB3039 - 95 - LRB103 26307 HLH 52667 b
3410	3410	HB3039 - 95 - LRB103 26307 HLH 52667 b
3411	3411	1 alternative method of apportionment under Section
3412	3412	2 304(f);
3413	3413	3 Nothing in this subsection shall preclude the
3414	3414	4 Director from making any other adjustment
3415	3415	5 otherwise allowed under Section 404 of this Act
3416	3416	6 for any tax year beginning after the effective
3417	3417	7 date of this amendment provided such adjustment is
3418	3418	8 made pursuant to regulation adopted by the
3419	3419	9 Department and such regulations provide methods
3420	3420	10 and standards by which the Department will utilize
3421	3421	11 its authority under Section 404 of this Act;
3422	3422	12 (D-9) For taxable years ending on or after
3423	3423	13 December 31, 2008, an amount equal to the amount of
3424	3424	14 insurance premium expenses and costs otherwise allowed
3425	3425	15 as a deduction in computing base income, and that were
3426	3426	16 paid, accrued, or incurred, directly or indirectly, to
3427	3427	17 a person who would be a member of the same unitary
3428	3428	18 business group but for the fact that the person is
3429	3429	19 prohibited under Section 1501(a)(27) from being
3430	3430	20 included in the unitary business group because he or
3431	3431	21 she is ordinarily required to apportion business
3432	3432	22 income under different subsections of Section 304. The
3433	3433	23 addition modification required by this subparagraph
3434	3434	24 shall be reduced to the extent that dividends were
3435	3435	25 included in base income of the unitary group for the
3436	3436	26 same taxable year and received by the taxpayer or by a
3437	3437
3438	3438
3439	3439
3440	3440
3441	3441
3442	3442	HB3039 - 95 - LRB103 26307 HLH 52667 b
3443	3443
3444	3444
3445	3445	HB3039- 96 -LRB103 26307 HLH 52667 b HB3039 - 96 - LRB103 26307 HLH 52667 b
3446	3446	HB3039 - 96 - LRB103 26307 HLH 52667 b
3447	3447	1 member of the taxpayer's unitary business group
3448	3448	2 (including amounts included in gross income under
3449	3449	3 Sections 951 through 964 of the Internal Revenue Code
3450	3450	4 and amounts included in gross income under Section 78
3451	3451	5 of the Internal Revenue Code) with respect to the
3452	3452	6 stock of the same person to whom the premiums and costs
3453	3453	7 were directly or indirectly paid, incurred, or
3454	3454	8 accrued. The preceding sentence does not apply to the
3455	3455	9 extent that the same dividends caused a reduction to
3456	3456	10 the addition modification required under Section
3457	3457	11 203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act;
3458	3458	12 (D-10) An amount equal to the credit allowable to
3459	3459	13 the taxpayer under Section 218(a) of this Act,
3460	3460	14 determined without regard to Section 218(c) of this
3461	3461	15 Act;
3462	3462	16 (D-11) For taxable years ending on or after
3463	3463	17 December 31, 2017, an amount equal to the deduction
3464	3464	18 allowed under Section 199 of the Internal Revenue Code
3465	3465	19 for the taxable year;
3466	3466	20 and by deducting from the total so obtained the following
3467	3467	21 amounts:
3468	3468	22 (E) The valuation limitation amount;
3469	3469	23 (F) An amount equal to the amount of any tax
3470	3470	24 imposed by this Act which was refunded to the taxpayer
3471	3471	25 and included in such total for the taxable year;
3472	3472	26 (G) An amount equal to all amounts included in
3473	3473
3474	3474
3475	3475
3476	3476
3477	3477
3478	3478	HB3039 - 96 - LRB103 26307 HLH 52667 b
3479	3479
3480	3480
3481	3481	HB3039- 97 -LRB103 26307 HLH 52667 b HB3039 - 97 - LRB103 26307 HLH 52667 b
3482	3482	HB3039 - 97 - LRB103 26307 HLH 52667 b
3483	3483	1 taxable income as modified by subparagraphs (A), (B),
3484	3484	2 (C) and (D) which are exempt from taxation by this
3485	3485	3 State either by reason of its statutes or Constitution
3486	3486	4 or by reason of the Constitution, treaties or statutes
3487	3487	5 of the United States; provided that, in the case of any
3488	3488	6 statute of this State that exempts income derived from
3489	3489	7 bonds or other obligations from the tax imposed under
3490	3490	8 this Act, the amount exempted shall be the interest
3491	3491	9 net of bond premium amortization;
3492	3492	10 (H) Any income of the partnership which
3493	3493	11 constitutes personal service income as defined in
3494	3494	12 Section 1348(b)(1) of the Internal Revenue Code (as in
3495	3495	13 effect December 31, 1981) or a reasonable allowance
3496	3496	14 for compensation paid or accrued for services rendered
3497	3497	15 by partners to the partnership, whichever is greater;
3498	3498	16 this subparagraph (H) is exempt from the provisions of
3499	3499	17 Section 250;
3500	3500	18 (I) An amount equal to all amounts of income
3501	3501	19 distributable to an entity subject to the Personal
3502	3502	20 Property Tax Replacement Income Tax imposed by
3503	3503	21 subsections (c) and (d) of Section 201 of this Act
3504	3504	22 including amounts distributable to organizations
3505	3505	23 exempt from federal income tax by reason of Section
3506	3506	24 501(a) of the Internal Revenue Code; this subparagraph
3507	3507	25 (I) is exempt from the provisions of Section 250;
3508	3508	26 (J) With the exception of any amounts subtracted
3509	3509
3510	3510
3511	3511
3512	3512
3513	3513
3514	3514	HB3039 - 97 - LRB103 26307 HLH 52667 b
3515	3515
3516	3516
3517	3517	HB3039- 98 -LRB103 26307 HLH 52667 b HB3039 - 98 - LRB103 26307 HLH 52667 b
3518	3518	HB3039 - 98 - LRB103 26307 HLH 52667 b
3519	3519	1 under subparagraph (G), an amount equal to the sum of
3520	3520	2 all amounts disallowed as deductions by (i) Sections
3521	3521	3 171(a)(2) and 265(a)(2) of the Internal Revenue Code,
3522	3522	4 and all amounts of expenses allocable to interest and
3523	3523	5 disallowed as deductions by Section 265(a)(1) of the
3524	3524	6 Internal Revenue Code; and (ii) for taxable years
3525	3525	7 ending on or after August 13, 1999, Sections
3526	3526	8 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
3527	3527	9 Internal Revenue Code, plus, (iii) for taxable years
3528	3528	10 ending on or after December 31, 2011, Section
3529	3529	11 45G(e)(3) of the Internal Revenue Code and, for
3530	3530	12 taxable years ending on or after December 31, 2008,
3531	3531	13 any amount included in gross income under Section 87
3532	3532	14 of the Internal Revenue Code; the provisions of this
3533	3533	15 subparagraph are exempt from the provisions of Section
3534	3534	16 250;
3535	3535	17 (K) An amount equal to those dividends included in
3536	3536	18 such total which were paid by a corporation which
3537	3537	19 conducts business operations in a River Edge
3538	3538	20 Redevelopment Zone or zones created under the River
3539	3539	21 Edge Redevelopment Zone Act and conducts substantially
3540	3540	22 all of its operations from a River Edge Redevelopment
3541	3541	23 Zone or zones. This subparagraph (K) is exempt from
3542	3542	24 the provisions of Section 250;
3543	3543	25 (L) An amount equal to any contribution made to a
3544	3544	26 job training project established pursuant to the Real
3545	3545
3546	3546
3547	3547
3548	3548
3549	3549
3550	3550	HB3039 - 98 - LRB103 26307 HLH 52667 b
3551	3551
3552	3552
3553	3553	HB3039- 99 -LRB103 26307 HLH 52667 b HB3039 - 99 - LRB103 26307 HLH 52667 b
3554	3554	HB3039 - 99 - LRB103 26307 HLH 52667 b
3555	3555	1 Property Tax Increment Allocation Redevelopment Act;
3556	3556	2 (M) An amount equal to those dividends included in
3557	3557	3 such total that were paid by a corporation that
3558	3558	4 conducts business operations in a federally designated
3559	3559	5 Foreign Trade Zone or Sub-Zone and that is designated
3560	3560	6 a High Impact Business located in Illinois; provided
3561	3561	7 that dividends eligible for the deduction provided in
3562	3562	8 subparagraph (K) of paragraph (2) of this subsection
3563	3563	9 shall not be eligible for the deduction provided under
3564	3564	10 this subparagraph (M);
3565	3565	11 (N) An amount equal to the amount of the deduction
3566	3566	12 used to compute the federal income tax credit for
3567	3567	13 restoration of substantial amounts held under claim of
3568	3568	14 right for the taxable year pursuant to Section 1341 of
3569	3569	15 the Internal Revenue Code;
3570	3570	16 (O) For taxable years 2001 and thereafter, for the
3571	3571	17 taxable year in which the bonus depreciation deduction
3572	3572	18 is taken on the taxpayer's federal income tax return
3573	3573	19 under subsection (k) of Section 168 of the Internal
3574	3574	20 Revenue Code and for each applicable taxable year
3575	3575	21 thereafter, an amount equal to "x", where:
3576	3576	22 (1) "y" equals the amount of the depreciation
3577	3577	23 deduction taken for the taxable year on the
3578	3578	24 taxpayer's federal income tax return on property
3579	3579	25 for which the bonus depreciation deduction was
3580	3580	26 taken in any year under subsection (k) of Section
3581	3581
3582	3582
3583	3583
3584	3584
3585	3585
3586	3586	HB3039 - 99 - LRB103 26307 HLH 52667 b
3587	3587
3588	3588
3589	3589	HB3039- 100 -LRB103 26307 HLH 52667 b HB3039 - 100 - LRB103 26307 HLH 52667 b
3590	3590	HB3039 - 100 - LRB103 26307 HLH 52667 b
3591	3591	1 168 of the Internal Revenue Code, but not
3592	3592	2 including the bonus depreciation deduction;
3593	3593	3 (2) for taxable years ending on or before
3594	3594	4 December 31, 2005, "x" equals "y" multiplied by 30
3595	3595	5 and then divided by 70 (or "y" multiplied by
3596	3596	6 0.429); and
3597	3597	7 (3) for taxable years ending after December
3598	3598	8 31, 2005:
3599	3599	9 (i) for property on which a bonus
3600	3600	10 depreciation deduction of 30% of the adjusted
3601	3601	11 basis was taken, "x" equals "y" multiplied by
3602	3602	12 30 and then divided by 70 (or "y" multiplied
3603	3603	13 by 0.429);
3604	3604	14 (ii) for property on which a bonus
3605	3605	15 depreciation deduction of 50% of the adjusted
3606	3606	16 basis was taken, "x" equals "y" multiplied by
3607	3607	17 1.0;
3608	3608	18 (iii) for property on which a bonus
3609	3609	19 depreciation deduction of 100% of the adjusted
3610	3610	20 basis was taken in a taxable year ending on or
3611	3611	21 after December 31, 2021, "x" equals the
3612	3612	22 depreciation deduction that would be allowed
3613	3613	23 on that property if the taxpayer had made the
3614	3614	24 election under Section 168(k)(7) of the
3615	3615	25 Internal Revenue Code to not claim bonus
3616	3616	26 depreciation on that property; and
3617	3617
3618	3618
3619	3619
3620	3620
3621	3621
3622	3622	HB3039 - 100 - LRB103 26307 HLH 52667 b
3623	3623
3624	3624
3625	3625	HB3039- 101 -LRB103 26307 HLH 52667 b HB3039 - 101 - LRB103 26307 HLH 52667 b
3626	3626	HB3039 - 101 - LRB103 26307 HLH 52667 b
3627	3627	1 (iv) for property on which a bonus
3628	3628	2 depreciation deduction of a percentage other
3629	3629	3 than 30%, 50% or 100% of the adjusted basis
3630	3630	4 was taken in a taxable year ending on or after
3631	3631	5 December 31, 2021, "x" equals "y" multiplied
3632	3632	6 by 100 times the percentage bonus depreciation
3633	3633	7 on the property (that is, 100(bonus%)) and
3634	3634	8 then divided by 100 times 1 minus the
3635	3635	9 percentage bonus depreciation on the property
3636	3636	10 (that is, 100(1bonus%)).
3637	3637	11 The aggregate amount deducted under this
3638	3638	12 subparagraph in all taxable years for any one piece of
3639	3639	13 property may not exceed the amount of the bonus
3640	3640	14 depreciation deduction taken on that property on the
3641	3641	15 taxpayer's federal income tax return under subsection
3642	3642	16 (k) of Section 168 of the Internal Revenue Code. This
3643	3643	17 subparagraph (O) is exempt from the provisions of
3644	3644	18 Section 250;
3645	3645	19 (P) If the taxpayer sells, transfers, abandons, or
3646	3646	20 otherwise disposes of property for which the taxpayer
3647	3647	21 was required in any taxable year to make an addition
3648	3648	22 modification under subparagraph (D-5), then an amount
3649	3649	23 equal to that addition modification.
3650	3650	24 If the taxpayer continues to own property through
3651	3651	25 the last day of the last tax year for which a
3652	3652	26 subtraction is allowed with respect to that property
3653	3653
3654	3654
3655	3655
3656	3656
3657	3657
3658	3658	HB3039 - 101 - LRB103 26307 HLH 52667 b
3659	3659
3660	3660
3661	3661	HB3039- 102 -LRB103 26307 HLH 52667 b HB3039 - 102 - LRB103 26307 HLH 52667 b
3662	3662	HB3039 - 102 - LRB103 26307 HLH 52667 b
3663	3663	1 under subparagraph (O) and for which the taxpayer was
3664	3664	2 required in any taxable year to make an addition
3665	3665	3 modification under subparagraph (D-5), then an amount
3666	3666	4 equal to that addition modification.
3667	3667	5 The taxpayer is allowed to take the deduction
3668	3668	6 under this subparagraph only once with respect to any
3669	3669	7 one piece of property.
3670	3670	8 This subparagraph (P) is exempt from the
3671	3671	9 provisions of Section 250;
3672	3672	10 (Q) The amount of (i) any interest income (net of
3673	3673	11 the deductions allocable thereto) taken into account
3674	3674	12 for the taxable year with respect to a transaction
3675	3675	13 with a taxpayer that is required to make an addition
3676	3676	14 modification with respect to such transaction under
3677	3677	15 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
3678	3678	16 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
3679	3679	17 the amount of such addition modification and (ii) any
3680	3680	18 income from intangible property (net of the deductions
3681	3681	19 allocable thereto) taken into account for the taxable
3682	3682	20 year with respect to a transaction with a taxpayer
3683	3683	21 that is required to make an addition modification with
3684	3684	22 respect to such transaction under Section
3685	3685	23 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
3686	3686	24 203(d)(2)(D-8), but not to exceed the amount of such
3687	3687	25 addition modification. This subparagraph (Q) is exempt
3688	3688	26 from Section 250;
3689	3689
3690	3690
3691	3691
3692	3692
3693	3693
3694	3694	HB3039 - 102 - LRB103 26307 HLH 52667 b
3695	3695
3696	3696
3697	3697	HB3039- 103 -LRB103 26307 HLH 52667 b HB3039 - 103 - LRB103 26307 HLH 52667 b
3698	3698	HB3039 - 103 - LRB103 26307 HLH 52667 b
3699	3699	1 (R) An amount equal to the interest income taken
3700	3700	2 into account for the taxable year (net of the
3701	3701	3 deductions allocable thereto) with respect to
3702	3702	4 transactions with (i) a foreign person who would be a
3703	3703	5 member of the taxpayer's unitary business group but
3704	3704	6 for the fact that the foreign person's business
3705	3705	7 activity outside the United States is 80% or more of
3706	3706	8 that person's total business activity and (ii) for
3707	3707	9 taxable years ending on or after December 31, 2008, to
3708	3708	10 a person who would be a member of the same unitary
3709	3709	11 business group but for the fact that the person is
3710	3710	12 prohibited under Section 1501(a)(27) from being
3711	3711	13 included in the unitary business group because he or
3712	3712	14 she is ordinarily required to apportion business
3713	3713	15 income under different subsections of Section 304, but
3714	3714	16 not to exceed the addition modification required to be
3715	3715	17 made for the same taxable year under Section
3716	3716	18 203(d)(2)(D-7) for interest paid, accrued, or
3717	3717	19 incurred, directly or indirectly, to the same person.
3718	3718	20 This subparagraph (R) is exempt from Section 250;
3719	3719	21 (S) An amount equal to the income from intangible
3720	3720	22 property taken into account for the taxable year (net
3721	3721	23 of the deductions allocable thereto) with respect to
3722	3722	24 transactions with (i) a foreign person who would be a
3723	3723	25 member of the taxpayer's unitary business group but
3724	3724	26 for the fact that the foreign person's business
3725	3725
3726	3726
3727	3727
3728	3728
3729	3729
3730	3730	HB3039 - 103 - LRB103 26307 HLH 52667 b
3731	3731
3732	3732
3733	3733	HB3039- 104 -LRB103 26307 HLH 52667 b HB3039 - 104 - LRB103 26307 HLH 52667 b
3734	3734	HB3039 - 104 - LRB103 26307 HLH 52667 b
3735	3735	1 activity outside the United States is 80% or more of
3736	3736	2 that person's total business activity and (ii) for
3737	3737	3 taxable years ending on or after December 31, 2008, to
3738	3738	4 a person who would be a member of the same unitary
3739	3739	5 business group but for the fact that the person is
3740	3740	6 prohibited under Section 1501(a)(27) from being
3741	3741	7 included in the unitary business group because he or
3742	3742	8 she is ordinarily required to apportion business
3743	3743	9 income under different subsections of Section 304, but
3744	3744	10 not to exceed the addition modification required to be
3745	3745	11 made for the same taxable year under Section
3746	3746	12 203(d)(2)(D-8) for intangible expenses and costs paid,
3747	3747	13 accrued, or incurred, directly or indirectly, to the
3748	3748	14 same person. This subparagraph (S) is exempt from
3749	3749	15 Section 250; and
3750	3750	16 (T) For taxable years ending on or after December
3751	3751	17 31, 2011, in the case of a taxpayer who was required to
3752	3752	18 add back any insurance premiums under Section
3753	3753	19 203(d)(2)(D-9), such taxpayer may elect to subtract
3754	3754	20 that part of a reimbursement received from the
3755	3755	21 insurance company equal to the amount of the expense
3756	3756	22 or loss (including expenses incurred by the insurance
3757	3757	23 company) that would have been taken into account as a
3758	3758	24 deduction for federal income tax purposes if the
3759	3759	25 expense or loss had been uninsured. If a taxpayer
3760	3760	26 makes the election provided for by this subparagraph
3761	3761
3762	3762
3763	3763
3764	3764
3765	3765
3766	3766	HB3039 - 104 - LRB103 26307 HLH 52667 b
3767	3767
3768	3768
3769	3769	HB3039- 105 -LRB103 26307 HLH 52667 b HB3039 - 105 - LRB103 26307 HLH 52667 b
3770	3770	HB3039 - 105 - LRB103 26307 HLH 52667 b
3771	3771	1 (T), the insurer to which the premiums were paid must
3772	3772	2 add back to income the amount subtracted by the
3773	3773	3 taxpayer pursuant to this subparagraph (T). This
3774	3774	4 subparagraph (T) is exempt from the provisions of
3775	3775	5 Section 250.
3776	3776	6 (e) Gross income; adjusted gross income; taxable income.
3777	3777	7 (1) In general. Subject to the provisions of paragraph
3778	3778	8 (2) and subsection (b)(3), for purposes of this Section
3779	3779	9 and Section 803(e), a taxpayer's gross income, adjusted
3780	3780	10 gross income, or taxable income for the taxable year shall
3781	3781	11 mean the amount of gross income, adjusted gross income or
3782	3782	12 taxable income properly reportable for federal income tax
3783	3783	13 purposes for the taxable year under the provisions of the
3784	3784	14 Internal Revenue Code. Taxable income may be less than
3785	3785	15 zero. However, for taxable years ending on or after
3786	3786	16 December 31, 1986, net operating loss carryforwards from
3787	3787	17 taxable years ending prior to December 31, 1986, may not
3788	3788	18 exceed the sum of federal taxable income for the taxable
3789	3789	19 year before net operating loss deduction, plus the excess
3790	3790	20 of addition modifications over subtraction modifications
3791	3791	21 for the taxable year. For taxable years ending prior to
3792	3792	22 December 31, 1986, taxable income may never be an amount
3793	3793	23 in excess of the net operating loss for the taxable year as
3794	3794	24 defined in subsections (c) and (d) of Section 172 of the
3795	3795	25 Internal Revenue Code, provided that when taxable income
3796	3796
3797	3797
3798	3798
3799	3799
3800	3800
3801	3801	HB3039 - 105 - LRB103 26307 HLH 52667 b
3802	3802
3803	3803
3804	3804	HB3039- 106 -LRB103 26307 HLH 52667 b HB3039 - 106 - LRB103 26307 HLH 52667 b
3805	3805	HB3039 - 106 - LRB103 26307 HLH 52667 b
3806	3806	1 of a corporation (other than a Subchapter S corporation),
3807	3807	2 trust, or estate is less than zero and addition
3808	3808	3 modifications, other than those provided by subparagraph
3809	3809	4 (E) of paragraph (2) of subsection (b) for corporations or
3810	3810	5 subparagraph (E) of paragraph (2) of subsection (c) for
3811	3811	6 trusts and estates, exceed subtraction modifications, an
3812	3812	7 addition modification must be made under those
3813	3813	8 subparagraphs for any other taxable year to which the
3814	3814	9 taxable income less than zero (net operating loss) is
3815	3815	10 applied under Section 172 of the Internal Revenue Code or
3816	3816	11 under subparagraph (E) of paragraph (2) of this subsection
3817	3817	12 (e) applied in conjunction with Section 172 of the
3818	3818	13 Internal Revenue Code.
3819	3819	14 (2) Special rule. For purposes of paragraph (1) of
3820	3820	15 this subsection, the taxable income properly reportable
3821	3821	16 for federal income tax purposes shall mean:
3822	3822	17 (A) Certain life insurance companies. In the case
3823	3823	18 of a life insurance company subject to the tax imposed
3824	3824	19 by Section 801 of the Internal Revenue Code, life
3825	3825	20 insurance company taxable income, plus the amount of
3826	3826	21 distribution from pre-1984 policyholder surplus
3827	3827	22 accounts as calculated under Section 815a of the
3828	3828	23 Internal Revenue Code;
3829	3829	24 (B) Certain other insurance companies. In the case
3830	3830	25 of mutual insurance companies subject to the tax
3831	3831	26 imposed by Section 831 of the Internal Revenue Code,
3832	3832
3833	3833
3834	3834
3835	3835
3836	3836
3837	3837	HB3039 - 106 - LRB103 26307 HLH 52667 b
3838	3838
3839	3839
3840	3840	HB3039- 107 -LRB103 26307 HLH 52667 b HB3039 - 107 - LRB103 26307 HLH 52667 b
3841	3841	HB3039 - 107 - LRB103 26307 HLH 52667 b
3842	3842	1 insurance company taxable income;
3843	3843	2 (C) Regulated investment companies. In the case of
3844	3844	3 a regulated investment company subject to the tax
3845	3845	4 imposed by Section 852 of the Internal Revenue Code,
3846	3846	5 investment company taxable income;
3847	3847	6 (D) Real estate investment trusts. In the case of
3848	3848	7 a real estate investment trust subject to the tax
3849	3849	8 imposed by Section 857 of the Internal Revenue Code,
3850	3850	9 real estate investment trust taxable income;
3851	3851	10 (E) Consolidated corporations. In the case of a
3852	3852	11 corporation which is a member of an affiliated group
3853	3853	12 of corporations filing a consolidated income tax
3854	3854	13 return for the taxable year for federal income tax
3855	3855	14 purposes, taxable income determined as if such
3856	3856	15 corporation had filed a separate return for federal
3857	3857	16 income tax purposes for the taxable year and each
3858	3858	17 preceding taxable year for which it was a member of an
3859	3859	18 affiliated group. For purposes of this subparagraph,
3860	3860	19 the taxpayer's separate taxable income shall be
3861	3861	20 determined as if the election provided by Section
3862	3862	21 243(b)(2) of the Internal Revenue Code had been in
3863	3863	22 effect for all such years;
3864	3864	23 (F) Cooperatives. In the case of a cooperative
3865	3865	24 corporation or association, the taxable income of such
3866	3866	25 organization determined in accordance with the
3867	3867	26 provisions of Section 1381 through 1388 of the
3868	3868
3869	3869
3870	3870
3871	3871
3872	3872
3873	3873	HB3039 - 107 - LRB103 26307 HLH 52667 b
3874	3874
3875	3875
3876	3876	HB3039- 108 -LRB103 26307 HLH 52667 b HB3039 - 108 - LRB103 26307 HLH 52667 b
3877	3877	HB3039 - 108 - LRB103 26307 HLH 52667 b
3878	3878	1 Internal Revenue Code, but without regard to the
3879	3879	2 prohibition against offsetting losses from patronage
3880	3880	3 activities against income from nonpatronage
3881	3881	4 activities; except that a cooperative corporation or
3882	3882	5 association may make an election to follow its federal
3883	3883	6 income tax treatment of patronage losses and
3884	3884	7 nonpatronage losses. In the event such election is
3885	3885	8 made, such losses shall be computed and carried over
3886	3886	9 in a manner consistent with subsection (a) of Section
3887	3887	10 207 of this Act and apportioned by the apportionment
3888	3888	11 factor reported by the cooperative on its Illinois
3889	3889	12 income tax return filed for the taxable year in which
3890	3890	13 the losses are incurred. The election shall be
3891	3891	14 effective for all taxable years with original returns
3892	3892	15 due on or after the date of the election. In addition,
3893	3893	16 the cooperative may file an amended return or returns,
3894	3894	17 as allowed under this Act, to provide that the
3895	3895	18 election shall be effective for losses incurred or
3896	3896	19 carried forward for taxable years occurring prior to
3897	3897	20 the date of the election. Once made, the election may
3898	3898	21 only be revoked upon approval of the Director. The
3899	3899	22 Department shall adopt rules setting forth
3900	3900	23 requirements for documenting the elections and any
3901	3901	24 resulting Illinois net loss and the standards to be
3902	3902	25 used by the Director in evaluating requests to revoke
3903	3903	26 elections. Public Act 96-932 is declaratory of
3904	3904
3905	3905
3906	3906
3907	3907
3908	3908
3909	3909	HB3039 - 108 - LRB103 26307 HLH 52667 b
3910	3910
3911	3911
3912	3912	HB3039- 109 -LRB103 26307 HLH 52667 b HB3039 - 109 - LRB103 26307 HLH 52667 b
3913	3913	HB3039 - 109 - LRB103 26307 HLH 52667 b
3914	3914	1 existing law;
3915	3915	2 (G) Subchapter S corporations. In the case of: (i)
3916	3916	3 a Subchapter S corporation for which there is in
3917	3917	4 effect an election for the taxable year under Section
3918	3918	5 1362 of the Internal Revenue Code, the taxable income
3919	3919	6 of such corporation determined in accordance with
3920	3920	7 Section 1363(b) of the Internal Revenue Code, except
3921	3921	8 that taxable income shall take into account those
3922	3922	9 items which are required by Section 1363(b)(1) of the
3923	3923	10 Internal Revenue Code to be separately stated; and
3924	3924	11 (ii) a Subchapter S corporation for which there is in
3925	3925	12 effect a federal election to opt out of the provisions
3926	3926	13 of the Subchapter S Revision Act of 1982 and have
3927	3927	14 applied instead the prior federal Subchapter S rules
3928	3928	15 as in effect on July 1, 1982, the taxable income of
3929	3929	16 such corporation determined in accordance with the
3930	3930	17 federal Subchapter S rules as in effect on July 1,
3931	3931	18 1982; and
3932	3932	19 (H) Partnerships. In the case of a partnership,
3933	3933	20 taxable income determined in accordance with Section
3934	3934	21 703 of the Internal Revenue Code, except that taxable
3935	3935	22 income shall take into account those items which are
3936	3936	23 required by Section 703(a)(1) to be separately stated
3937	3937	24 but which would be taken into account by an individual
3938	3938	25 in calculating his taxable income.
3939	3939	26 (3) Recapture of business expenses on disposition of
3940	3940
3941	3941
3942	3942
3943	3943
3944	3944
3945	3945	HB3039 - 109 - LRB103 26307 HLH 52667 b
3946	3946
3947	3947
3948	3948	HB3039- 110 -LRB103 26307 HLH 52667 b HB3039 - 110 - LRB103 26307 HLH 52667 b
3949	3949	HB3039 - 110 - LRB103 26307 HLH 52667 b
3950	3950	1 asset or business. Notwithstanding any other law to the
3951	3951	2 contrary, if in prior years income from an asset or
3952	3952	3 business has been classified as business income and in a
3953	3953	4 later year is demonstrated to be non-business income, then
3954	3954	5 all expenses, without limitation, deducted in such later
3955	3955	6 year and in the 2 immediately preceding taxable years
3956	3956	7 related to that asset or business that generated the
3957	3957	8 non-business income shall be added back and recaptured as
3958	3958	9 business income in the year of the disposition of the
3959	3959	10 asset or business. Such amount shall be apportioned to
3960	3960	11 Illinois using the greater of the apportionment fraction
3961	3961	12 computed for the business under Section 304 of this Act
3962	3962	13 for the taxable year or the average of the apportionment
3963	3963	14 fractions computed for the business under Section 304 of
3964	3964	15 this Act for the taxable year and for the 2 immediately
3965	3965	16 preceding taxable years.
3966	3966	17 (f) Valuation limitation amount.
3967	3967	18 (1) In general. The valuation limitation amount
3968	3968	19 referred to in subsections (a)(2)(G), (c)(2)(I) and
3969	3969	20 (d)(2)(E) is an amount equal to:
3970	3970	21 (A) The sum of the pre-August 1, 1969 appreciation
3971	3971	22 amounts (to the extent consisting of gain reportable
3972	3972	23 under the provisions of Section 1245 or 1250 of the
3973	3973	24 Internal Revenue Code) for all property in respect of
3974	3974	25 which such gain was reported for the taxable year;
3975	3975
3976	3976
3977	3977
3978	3978
3979	3979
3980	3980	HB3039 - 110 - LRB103 26307 HLH 52667 b
3981	3981
3982	3982
3983	3983	HB3039- 111 -LRB103 26307 HLH 52667 b HB3039 - 111 - LRB103 26307 HLH 52667 b
3984	3984	HB3039 - 111 - LRB103 26307 HLH 52667 b
3985	3985	1 plus
3986	3986	2 (B) The lesser of (i) the sum of the pre-August 1,
3987	3987	3 1969 appreciation amounts (to the extent consisting of
3988	3988	4 capital gain) for all property in respect of which
3989	3989	5 such gain was reported for federal income tax purposes
3990	3990	6 for the taxable year, or (ii) the net capital gain for
3991	3991	7 the taxable year, reduced in either case by any amount
3992	3992	8 of such gain included in the amount determined under
3993	3993	9 subsection (a)(2)(F) or (c)(2)(H).
3994	3994	10 (2) Pre-August 1, 1969 appreciation amount.
3995	3995	11 (A) If the fair market value of property referred
3996	3996	12 to in paragraph (1) was readily ascertainable on
3997	3997	13 August 1, 1969, the pre-August 1, 1969 appreciation
3998	3998	14 amount for such property is the lesser of (i) the
3999	3999	15 excess of such fair market value over the taxpayer's
4000	4000	16 basis (for determining gain) for such property on that
4001	4001	17 date (determined under the Internal Revenue Code as in
4002	4002	18 effect on that date), or (ii) the total gain realized
4003	4003	19 and reportable for federal income tax purposes in
4004	4004	20 respect of the sale, exchange or other disposition of
4005	4005	21 such property.
4006	4006	22 (B) If the fair market value of property referred
4007	4007	23 to in paragraph (1) was not readily ascertainable on
4008	4008	24 August 1, 1969, the pre-August 1, 1969 appreciation
4009	4009	25 amount for such property is that amount which bears
4010	4010	26 the same ratio to the total gain reported in respect of
4011	4011
4012	4012
4013	4013
4014	4014
4015	4015
4016	4016	HB3039 - 111 - LRB103 26307 HLH 52667 b
4017	4017
4018	4018
4019	4019	HB3039- 112 -LRB103 26307 HLH 52667 b HB3039 - 112 - LRB103 26307 HLH 52667 b
4020	4020	HB3039 - 112 - LRB103 26307 HLH 52667 b
4021	4021	1 the property for federal income tax purposes for the
4022	4022	2 taxable year, as the number of full calendar months in
4023	4023	3 that part of the taxpayer's holding period for the
4024	4024	4 property ending July 31, 1969 bears to the number of
4025	4025	5 full calendar months in the taxpayer's entire holding
4026	4026	6 period for the property.
4027	4027	7 (C) The Department shall prescribe such
4028	4028	8 regulations as may be necessary to carry out the
4029	4029	9 purposes of this paragraph.
4030	4030	10 (g) Double deductions. Unless specifically provided
4031	4031	11 otherwise, nothing in this Section shall permit the same item
4032	4032	12 to be deducted more than once.
4033	4033	13 (h) Legislative intention. Except as expressly provided by
4034	4034	14 this Section there shall be no modifications or limitations on
4035	4035	15 the amounts of income, gain, loss or deduction taken into
4036	4036	16 account in determining gross income, adjusted gross income or
4037	4037	17 taxable income for federal income tax purposes for the taxable
4038	4038	18 year, or in the amount of such items entering into the
4039	4039	19 computation of base income and net income under this Act for
4040	4040	20 such taxable year, whether in respect of property values as of
4041	4041	21 August 1, 1969 or otherwise.
4042	4042	22 (Source: P.A. 101-9, eff. 6-5-19; 101-81, eff. 7-12-19;
4043	4043	23 102-16, eff. 6-17-21; 102-558, eff. 8-20-21; 102-658, eff.
4044	4044	24 8-27-21; 102-813, eff. 5-13-22; 102-1112, eff. 12-21-22.)
4045	4045
4046	4046
4047	4047
4048	4048
4049	4049
4050	4050	HB3039 - 112 - LRB103 26307 HLH 52667 b
4051	4051
4052	4052
4053	4053	HB3039- 113 -LRB103 26307 HLH 52667 b HB3039 - 113 - LRB103 26307 HLH 52667 b
4054	4054	HB3039 - 113 - LRB103 26307 HLH 52667 b
4055	4055	1 (35 ILCS 5/901)
4056	4056	2 Sec. 901. Collection authority.
4057	4057	3 (a) In general. The Department shall collect the taxes
4058	4058	4 imposed by this Act. The Department shall collect certified
4059	4059	5 past due child support amounts under Section 2505-650 of the
4060	4060	6 Department of Revenue Law of the Civil Administrative Code of
4061	4061	7 Illinois. Except as provided in subsections (b), (c), (e),
4062	4062	8 (f), (g), and (h) of this Section, money collected pursuant to
4063	4063	9 subsections (a) and (b) of Section 201 of this Act shall be
4064	4064	10 paid into the General Revenue Fund in the State treasury;
4065	4065	11 money collected pursuant to subsections (c) and (d) of Section
4066	4066	12 201 of this Act shall be paid into the Personal Property Tax
4067	4067	13 Replacement Fund, a special fund in the State Treasury; and
4068	4068	14 money collected under Section 2505-650 of the Department of
4069	4069	15 Revenue Law of the Civil Administrative Code of Illinois shall
4070	4070	16 be paid into the Child Support Enforcement Trust Fund, a
4071	4071	17 special fund outside the State Treasury, or to the State
4072	4072	18 Disbursement Unit established under Section 10-26 of the
4073	4073	19 Illinois Public Aid Code, as directed by the Department of
4074	4074	20 Healthcare and Family Services.
4075	4075	21 (b) Local Government Distributive Fund. Beginning August
4076	4076	22 1, 2017 and continuing through July 31, 2022, the Treasurer
4077	4077	23 shall transfer each month from the General Revenue Fund to the
4078	4078	24 Local Government Distributive Fund an amount equal to the sum
4079	4079	25 of: (i) 6.06% (10% of the ratio of the 3% individual income tax
4080	4080
4081	4081
4082	4082
4083	4083
4084	4084
4085	4085	HB3039 - 113 - LRB103 26307 HLH 52667 b
4086	4086
4087	4087
4088	4088	HB3039- 114 -LRB103 26307 HLH 52667 b HB3039 - 114 - LRB103 26307 HLH 52667 b
4089	4089	HB3039 - 114 - LRB103 26307 HLH 52667 b
4090	4090	1 rate prior to 2011 to the 4.95% individual income tax rate
4091	4091	2 after July 1, 2017) of the net revenue realized from the tax
4092	4092	3 imposed by subsections (a) and (b) of Section 201 of this Act
4093	4093	4 upon individuals, trusts, and estates during the preceding
4094	4094	5 month; (ii) 6.85% (10% of the ratio of the 4.8% corporate
4095	4095	6 income tax rate prior to 2011 to the 7% corporate income tax
4096	4096	7 rate after July 1, 2017) of the net revenue realized from the
4097	4097	8 tax imposed by subsections (a) and (b) of Section 201 of this
4098	4098	9 Act upon corporations during the preceding month; and (iii)
4099	4099	10 beginning February 1, 2022, 6.06% of the net revenue realized
4100	4100	11 from the tax imposed by subsection (p) of Section 201 of this
4101	4101	12 Act upon electing pass-through entities. Beginning August 1,
4102	4102	13 2022, the Treasurer shall transfer each month from the General
4103	4103	14 Revenue Fund to the Local Government Distributive Fund an
4104	4104	15 amount equal to the sum of: (i) 6.16% of the net revenue
4105	4105	16 realized from the tax imposed by subsections (a) and (b) of
4106	4106	17 Section 201 of this Act upon individuals, trusts, and estates
4107	4107	18 during the preceding month; (ii) 6.85% of the net revenue
4108	4108	19 realized from the tax imposed by subsections (a) and (b) of
4109	4109	20 Section 201 of this Act upon corporations during the preceding
4110	4110	21 month; and (iii) 6.16% of the net revenue realized from the tax
4111	4111	22 imposed by subsection (p) of Section 201 of this Act upon
4112	4112	23 electing pass-through entities. Net revenue realized for a
4113	4113	24 month shall be defined as the revenue from the tax imposed by
4114	4114	25 subsections (a) and (b) of Section 201 of this Act which is
4115	4115	26 deposited in the General Revenue Fund, the Education
4116	4116
4117	4117
4118	4118
4119	4119
4120	4120
4121	4121	HB3039 - 114 - LRB103 26307 HLH 52667 b
4122	4122
4123	4123
4124	4124	HB3039- 115 -LRB103 26307 HLH 52667 b HB3039 - 115 - LRB103 26307 HLH 52667 b
4125	4125	HB3039 - 115 - LRB103 26307 HLH 52667 b
4126	4126	1 Assistance Fund, the Income Tax Surcharge Local Government
4127	4127	2 Distributive Fund, the Fund for the Advancement of Education,
4128	4128	3 and the Commitment to Human Services Fund during the month
4129	4129	4 minus the amount paid out of the General Revenue Fund in State
4130	4130	5 warrants during that same month as refunds to taxpayers for
4131	4131	6 overpayment of liability under the tax imposed by subsections
4132	4132	7 (a) and (b) of Section 201 of this Act.
4133	4133	8 Notwithstanding any provision of law to the contrary,
4134	4134	9 beginning on July 6, 2017 (the effective date of Public Act
4135	4135	10 100-23), those amounts required under this subsection (b) to
4136	4136	11 be transferred by the Treasurer into the Local Government
4137	4137	12 Distributive Fund from the General Revenue Fund shall be
4138	4138	13 directly deposited into the Local Government Distributive Fund
4139	4139	14 as the revenue is realized from the tax imposed by subsections
4140	4140	15 (a) and (b) of Section 201 of this Act.
4141	4141	16 (c) Deposits Into Income Tax Refund Fund.
4142	4142	17 (1) Beginning on January 1, 1989 and thereafter, the
4143	4143	18 Department shall deposit a percentage of the amounts
4144	4144	19 collected pursuant to subsections (a) and (b)(1), (2), and
4145	4145	20 (3) of Section 201 of this Act into a fund in the State
4146	4146	21 treasury known as the Income Tax Refund Fund. Beginning
4147	4147	22 with State fiscal year 1990 and for each fiscal year
4148	4148	23 thereafter, the percentage deposited into the Income Tax
4149	4149	24 Refund Fund during a fiscal year shall be the Annual
4150	4150	25 Percentage. For fiscal year 2011, the Annual Percentage
4151	4151	26 shall be 8.75%. For fiscal year 2012, the Annual
4152	4152
4153	4153
4154	4154
4155	4155
4156	4156
4157	4157	HB3039 - 115 - LRB103 26307 HLH 52667 b
4158	4158
4159	4159
4160	4160	HB3039- 116 -LRB103 26307 HLH 52667 b HB3039 - 116 - LRB103 26307 HLH 52667 b
4161	4161	HB3039 - 116 - LRB103 26307 HLH 52667 b
4162	4162	1 Percentage shall be 8.75%. For fiscal year 2013, the
4163	4163	2 Annual Percentage shall be 9.75%. For fiscal year 2014,
4164	4164	3 the Annual Percentage shall be 9.5%. For fiscal year 2015,
4165	4165	4 the Annual Percentage shall be 10%. For fiscal year 2018,
4166	4166	5 the Annual Percentage shall be 9.8%. For fiscal year 2019,
4167	4167	6 the Annual Percentage shall be 9.7%. For fiscal year 2020,
4168	4168	7 the Annual Percentage shall be 9.5%. For fiscal year 2021,
4169	4169	8 the Annual Percentage shall be 9%. For fiscal year 2022,
4170	4170	9 the Annual Percentage shall be 9.25%. For fiscal year
4171	4171	10 2023, the Annual Percentage shall be 9.25%. For all other
4172	4172	11 fiscal years, the Annual Percentage shall be calculated as
4173	4173	12 a fraction, the numerator of which shall be the amount of
4174	4174	13 refunds approved for payment by the Department during the
4175	4175	14 preceding fiscal year as a result of overpayment of tax
4176	4176	15 liability under subsections (a) and (b)(1), (2), and (3)
4177	4177	16 of Section 201 of this Act plus the amount of such refunds
4178	4178	17 remaining approved but unpaid at the end of the preceding
4179	4179	18 fiscal year, minus the amounts transferred into the Income
4180	4180	19 Tax Refund Fund from the Tobacco Settlement Recovery Fund,
4181	4181	20 and the denominator of which shall be the amounts which
4182	4182	21 will be collected pursuant to subsections (a) and (b)(1),
4183	4183	22 (2), and (3) of Section 201 of this Act during the
4184	4184	23 preceding fiscal year; except that in State fiscal year
4185	4185	24 2002, the Annual Percentage shall in no event exceed 7.6%.
4186	4186	25 The Director of Revenue shall certify the Annual
4187	4187	26 Percentage to the Comptroller on the last business day of
4188	4188
4189	4189
4190	4190
4191	4191
4192	4192
4193	4193	HB3039 - 116 - LRB103 26307 HLH 52667 b
4194	4194
4195	4195
4196	4196	HB3039- 117 -LRB103 26307 HLH 52667 b HB3039 - 117 - LRB103 26307 HLH 52667 b
4197	4197	HB3039 - 117 - LRB103 26307 HLH 52667 b
4198	4198	1 the fiscal year immediately preceding the fiscal year for
4199	4199	2 which it is to be effective.
4200	4200	3 (2) Beginning on January 1, 1989 and thereafter, the
4201	4201	4 Department shall deposit a percentage of the amounts
4202	4202	5 collected pursuant to subsections (a) and (b)(6), (7), and
4203	4203	6 (8), (c) and (d) of Section 201 of this Act into a fund in
4204	4204	7 the State treasury known as the Income Tax Refund Fund.
4205	4205	8 Beginning with State fiscal year 1990 and for each fiscal
4206	4206	9 year thereafter, the percentage deposited into the Income
4207	4207	10 Tax Refund Fund during a fiscal year shall be the Annual
4208	4208	11 Percentage. For fiscal year 2011, the Annual Percentage
4209	4209	12 shall be 17.5%. For fiscal year 2012, the Annual
4210	4210	13 Percentage shall be 17.5%. For fiscal year 2013, the
4211	4211	14 Annual Percentage shall be 14%. For fiscal year 2014, the
4212	4212	15 Annual Percentage shall be 13.4%. For fiscal year 2015,
4213	4213	16 the Annual Percentage shall be 14%. For fiscal year 2018,
4214	4214	17 the Annual Percentage shall be 17.5%. For fiscal year
4215	4215	18 2019, the Annual Percentage shall be 15.5%. For fiscal
4216	4216	19 year 2020, the Annual Percentage shall be 14.25%. For
4217	4217	20 fiscal year 2021, the Annual Percentage shall be 14%. For
4218	4218	21 fiscal year 2022, the Annual Percentage shall be 15%. For
4219	4219	22 fiscal year 2023, the Annual Percentage shall be 14.5%.
4220	4220	23 For all other fiscal years, the Annual Percentage shall be
4221	4221	24 calculated as a fraction, the numerator of which shall be
4222	4222	25 the amount of refunds approved for payment by the
4223	4223	26 Department during the preceding fiscal year as a result of
4224	4224
4225	4225
4226	4226
4227	4227
4228	4228
4229	4229	HB3039 - 117 - LRB103 26307 HLH 52667 b
4230	4230
4231	4231
4232	4232	HB3039- 118 -LRB103 26307 HLH 52667 b HB3039 - 118 - LRB103 26307 HLH 52667 b
4233	4233	HB3039 - 118 - LRB103 26307 HLH 52667 b
4234	4234	1 overpayment of tax liability under subsections (a) and
4235	4235	2 (b)(6), (7), and (8), (c) and (d) of Section 201 of this
4236	4236	3 Act plus the amount of such refunds remaining approved but
4237	4237	4 unpaid at the end of the preceding fiscal year, and the
4238	4238	5 denominator of which shall be the amounts which will be
4239	4239	6 collected pursuant to subsections (a) and (b)(6), (7), and
4240	4240	7 (8), (c) and (d) of Section 201 of this Act during the
4241	4241	8 preceding fiscal year; except that in State fiscal year
4242	4242	9 2002, the Annual Percentage shall in no event exceed 23%.
4243	4243	10 The Director of Revenue shall certify the Annual
4244	4244	11 Percentage to the Comptroller on the last business day of
4245	4245	12 the fiscal year immediately preceding the fiscal year for
4246	4246	13 which it is to be effective.
4247	4247	14 (3) The Comptroller shall order transferred and the
4248	4248	15 Treasurer shall transfer from the Tobacco Settlement
4249	4249	16 Recovery Fund to the Income Tax Refund Fund (i)
4250	4250	17 $35,000,000 in January, 2001, (ii) $35,000,000 in January,
4251	4251	18 2002, and (iii) $35,000,000 in January, 2003.
4252	4252	19 (d) Expenditures from Income Tax Refund Fund.
4253	4253	20 (1) Beginning January 1, 1989, money in the Income Tax
4254	4254	21 Refund Fund shall be expended exclusively for the purpose
4255	4255	22 of paying refunds resulting from overpayment of tax
4256	4256	23 liability under Section 201 of this Act and for making
4257	4257	24 transfers pursuant to this subsection (d), except that in
4258	4258	25 State fiscal years 2022 and 2023, moneys in the Income Tax
4259	4259	26 Refund Fund shall also be used to pay one-time rebate
4260	4260
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4269	4269	HB3039 - 119 - LRB103 26307 HLH 52667 b
4270	4270	1 payments as provided under Sections 208.5 and 212.1.
4271	4271	2 (2) The Director shall order payment of refunds
4272	4272	3 resulting from overpayment of tax liability under Section
4273	4273	4 201 of this Act from the Income Tax Refund Fund only to the
4274	4274	5 extent that amounts collected pursuant to Section 201 of
4275	4275	6 this Act and transfers pursuant to this subsection (d) and
4276	4276	7 item (3) of subsection (c) have been deposited and
4277	4277	8 retained in the Fund.
4278	4278	9 (3) As soon as possible after the end of each fiscal
4279	4279	10 year, the Director shall order transferred and the State
4280	4280	11 Treasurer and State Comptroller shall transfer from the
4281	4281	12 Income Tax Refund Fund to the Personal Property Tax
4282	4282	13 Replacement Fund an amount, certified by the Director to
4283	4283	14 the Comptroller, equal to the excess of the amount
4284	4284	15 collected pursuant to subsections (c) and (d) of Section
4285	4285	16 201 of this Act deposited into the Income Tax Refund Fund
4286	4286	17 during the fiscal year over the amount of refunds
4287	4287	18 resulting from overpayment of tax liability under
4288	4288	19 subsections (c) and (d) of Section 201 of this Act paid
4289	4289	20 from the Income Tax Refund Fund during the fiscal year.
4290	4290	21 (4) As soon as possible after the end of each fiscal
4291	4291	22 year, the Director shall order transferred and the State
4292	4292	23 Treasurer and State Comptroller shall transfer from the
4293	4293	24 Personal Property Tax Replacement Fund to the Income Tax
4294	4294	25 Refund Fund an amount, certified by the Director to the
4295	4295	26 Comptroller, equal to the excess of the amount of refunds
4296	4296
4297	4297
4298	4298
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4305	4305	HB3039 - 120 - LRB103 26307 HLH 52667 b
4306	4306	1 resulting from overpayment of tax liability under
4307	4307	2 subsections (c) and (d) of Section 201 of this Act paid
4308	4308	3 from the Income Tax Refund Fund during the fiscal year
4309	4309	4 over the amount collected pursuant to subsections (c) and
4310	4310	5 (d) of Section 201 of this Act deposited into the Income
4311	4311	6 Tax Refund Fund during the fiscal year.
4312	4312	7 (4.5) As soon as possible after the end of fiscal year
4313	4313	8 1999 and of each fiscal year thereafter, the Director
4314	4314	9 shall order transferred and the State Treasurer and State
4315	4315	10 Comptroller shall transfer from the Income Tax Refund Fund
4316	4316	11 to the General Revenue Fund any surplus remaining in the
4317	4317	12 Income Tax Refund Fund as of the end of such fiscal year;
4318	4318	13 excluding for fiscal years 2000, 2001, and 2002 amounts
4319	4319	14 attributable to transfers under item (3) of subsection (c)
4320	4320	15 less refunds resulting from the earned income tax credit,
4321	4321	16 and excluding for fiscal year 2022 amounts attributable to
4322	4322	17 transfers from the General Revenue Fund authorized by
4323	4323	18 Public Act 102-700 this amendatory Act of the 102nd
4324	4324	19 General Assembly.
4325	4325	20 (5) This Act shall constitute an irrevocable and
4326	4326	21 continuing appropriation from the Income Tax Refund Fund
4327	4327	22 for the purposes of (i) paying refunds upon the order of
4328	4328	23 the Director in accordance with the provisions of this
4329	4329	24 Section and (ii) paying one-time rebate payments under
4330	4330	25 Sections 208.5 and 212.1.
4331	4331	26 (e) Deposits into the Education Assistance Fund and the
4332	4332
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4342	4342	1 Income Tax Surcharge Local Government Distributive Fund. On
4343	4343	2 July 1, 1991, and thereafter, of the amounts collected
4344	4344	3 pursuant to subsections (a) and (b) of Section 201 of this Act,
4345	4345	4 minus deposits into the Income Tax Refund Fund, the Department
4346	4346	5 shall deposit 7.3% into the Education Assistance Fund in the
4347	4347	6 State Treasury. Beginning July 1, 1991, and continuing through
4348	4348	7 January 31, 1993, of the amounts collected pursuant to
4349	4349	8 subsections (a) and (b) of Section 201 of the Illinois Income
4350	4350	9 Tax Act, minus deposits into the Income Tax Refund Fund, the
4351	4351	10 Department shall deposit 3.0% into the Income Tax Surcharge
4352	4352	11 Local Government Distributive Fund in the State Treasury.
4353	4353	12 Beginning February 1, 1993 and continuing through June 30,
4354	4354	13 1993, of the amounts collected pursuant to subsections (a) and
4355	4355	14 (b) of Section 201 of the Illinois Income Tax Act, minus
4356	4356	15 deposits into the Income Tax Refund Fund, the Department shall
4357	4357	16 deposit 4.4% into the Income Tax Surcharge Local Government
4358	4358	17 Distributive Fund in the State Treasury. Beginning July 1,
4359	4359	18 1993, and continuing through June 30, 1994, of the amounts
4360	4360	19 collected under subsections (a) and (b) of Section 201 of this
4361	4361	20 Act, minus deposits into the Income Tax Refund Fund, the
4362	4362	21 Department shall deposit 1.475% into the Income Tax Surcharge
4363	4363	22 Local Government Distributive Fund in the State Treasury.
4364	4364	23 (f) Deposits into the Fund for the Advancement of
4365	4365	24 Education. Beginning February 1, 2015, the Department shall
4366	4366	25 deposit the following portions of the revenue realized from
4367	4367	26 the tax imposed upon individuals, trusts, and estates by
4368	4368
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4370	4370
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4378	4378	1 subsections (a) and (b) of Section 201 of this Act, minus
4379	4379	2 deposits into the Income Tax Refund Fund, into the Fund for the
4380	4380	3 Advancement of Education:
4381	4381	4 (1) beginning February 1, 2015, and prior to February
4382	4382	5 1, 2025, 1/30; and
4383	4383	6 (2) beginning February 1, 2025, 1/26.
4384	4384	7 If the rate of tax imposed by subsection (a) and (b) of
4385	4385	8 Section 201 is reduced pursuant to Section 201.5 of this Act,
4386	4386	9 the Department shall not make the deposits required by this
4387	4387	10 subsection (f) on or after the effective date of the
4388	4388	11 reduction.
4389	4389	12 (g) Deposits into the Commitment to Human Services Fund.
4390	4390	13 Beginning February 1, 2015, the Department shall deposit the
4391	4391	14 following portions of the revenue realized from the tax
4392	4392	15 imposed upon individuals, trusts, and estates by subsections
4393	4393	16 (a) and (b) of Section 201 of this Act, minus deposits into the
4394	4394	17 Income Tax Refund Fund, into the Commitment to Human Services
4395	4395	18 Fund:
4396	4396	19 (1) beginning February 1, 2015, and prior to February
4397	4397	20 1, 2025, 1/30; and
4398	4398	21 (2) beginning February 1, 2025, 1/26.
4399	4399	22 If the rate of tax imposed by subsection (a) and (b) of
4400	4400	23 Section 201 is reduced pursuant to Section 201.5 of this Act,
4401	4401	24 the Department shall not make the deposits required by this
4402	4402	25 subsection (g) on or after the effective date of the
4403	4403	26 reduction.
4404	4404
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4414	4414	1 (h) Deposits into the Tax Compliance and Administration
4415	4415	2 Fund. Beginning on the first day of the first calendar month to
4416	4416	3 occur on or after August 26, 2014 (the effective date of Public
4417	4417	4 Act 98-1098), each month the Department shall pay into the Tax
4418	4418	5 Compliance and Administration Fund, to be used, subject to
4419	4419	6 appropriation, to fund additional auditors and compliance
4420	4420	7 personnel at the Department, an amount equal to 1/12 of 5% of
4421	4421	8 the cash receipts collected during the preceding fiscal year
4422	4422	9 by the Audit Bureau of the Department from the tax imposed by
4423	4423	10 subsections (a), (b), (c), and (d) of Section 201 of this Act,
4424	4424	11 net of deposits into the Income Tax Refund Fund made from those
4425	4425	12 cash receipts.
4426	4426	13 (i) Notwithstanding any other provision of law, the tax
4427	4427	14 collected from gains realized under the Extremely High Wealth
4428	4428	15 Mark-to-Market Tax Act shall be deposited into the Working
4429	4429	16 Families Fund.
4430	4430	17 (Source: P.A. 101-8, see Section 99 for effective date;
4431	4431	18 101-10, eff. 6-5-19; 101-81, eff. 7-12-19; 101-636, eff.
4432	4432	19 6-10-20; 102-16, eff. 6-17-21; 102-558, eff. 8-20-21; 102-658,
4433	4433	20 eff. 8-27-21; 102-699, eff. 4-19-22; 102-700, eff. 4-19-22;
4434	4434	21 102-813, eff. 5-13-22; revised 8-2-22.)
4435	4435	22 Section 999. Effective date. This Act takes effect upon
4436	4436	23 becoming law.
4437	4437
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