Illinois 2023-2024 Regular Session

Illinois House Bill HB3088 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 HB3088 Introduced , by Rep. Abdelnasser Rashid SYNOPSIS AS INTRODUCED: 35 ILCS 5/203 from Ch. 120, par. 2-203 Amends the Illinois Income Tax Act. Creates an income tax deduction for premiums paid by the taxpayer during the taxable year under an individual health insurance plan covering the taxpayer or the taxpayer's dependents. LRB103 05738 HLH 50758 b PENSION IMPACT NOTE ACT MAY APPLY A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3088 Introduced , by Rep. Abdelnasser Rashid SYNOPSIS AS INTRODUCED: 35 ILCS 5/203 from Ch. 120, par. 2-203 35 ILCS 5/203 from Ch. 120, par. 2-203 Amends the Illinois Income Tax Act. Creates an income tax deduction for premiums paid by the taxpayer during the taxable year under an individual health insurance plan covering the taxpayer or the taxpayer's dependents. LRB103 05738 HLH 50758 b LRB103 05738 HLH 50758 b PENSION IMPACT NOTE ACT MAY APPLY PENSION IMPACT NOTE ACT MAY APPLY A BILL FOR
2	2	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3088 Introduced , by Rep. Abdelnasser Rashid SYNOPSIS AS INTRODUCED:
3	3	35 ILCS 5/203 from Ch. 120, par. 2-203 35 ILCS 5/203 from Ch. 120, par. 2-203
4	4	35 ILCS 5/203 from Ch. 120, par. 2-203
5	5	Amends the Illinois Income Tax Act. Creates an income tax deduction for premiums paid by the taxpayer during the taxable year under an individual health insurance plan covering the taxpayer or the taxpayer's dependents.
6	6	LRB103 05738 HLH 50758 b LRB103 05738 HLH 50758 b
7	7	LRB103 05738 HLH 50758 b
8	8	PENSION IMPACT NOTE ACT MAY APPLY PENSION IMPACT NOTE ACT MAY APPLY
9	9	PENSION IMPACT NOTE ACT MAY APPLY
10	10	A BILL FOR
11	11	HB3088LRB103 05738 HLH 50758 b HB3088 LRB103 05738 HLH 50758 b
12	12	HB3088 LRB103 05738 HLH 50758 b
13	13	1 AN ACT concerning revenue.
14	14	2 Be it enacted by the People of the State of Illinois,
15	15	3 represented in the General Assembly:
16	16	4 Section 5. The Illinois Income Tax Act is amended by
17	17	5 changing Section 203 as follows:
18	18	6 (35 ILCS 5/203) (from Ch. 120, par. 2-203)
19	19	7 Sec. 203. Base income defined.
20	20	8 (a) Individuals.
21	21	9 (1) In general. In the case of an individual, base
22	22	10 income means an amount equal to the taxpayer's adjusted
23	23	11 gross income for the taxable year as modified by paragraph
24	24	12 (2).
25	25	13 (2) Modifications. The adjusted gross income referred
26	26	14 to in paragraph (1) shall be modified by adding thereto
27	27	15 the sum of the following amounts:
28	28	16 (A) An amount equal to all amounts paid or accrued
29	29	17 to the taxpayer as interest or dividends during the
30	30	18 taxable year to the extent excluded from gross income
31	31	19 in the computation of adjusted gross income, except
32	32	20 stock dividends of qualified public utilities
33	33	21 described in Section 305(e) of the Internal Revenue
34	34	22 Code;
35	35	23 (B) An amount equal to the amount of tax imposed by
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39	39	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3088 Introduced , by Rep. Abdelnasser Rashid SYNOPSIS AS INTRODUCED:
40	40	35 ILCS 5/203 from Ch. 120, par. 2-203 35 ILCS 5/203 from Ch. 120, par. 2-203
41	41	35 ILCS 5/203 from Ch. 120, par. 2-203
42	42	Amends the Illinois Income Tax Act. Creates an income tax deduction for premiums paid by the taxpayer during the taxable year under an individual health insurance plan covering the taxpayer or the taxpayer's dependents.
43	43	LRB103 05738 HLH 50758 b LRB103 05738 HLH 50758 b
44	44	LRB103 05738 HLH 50758 b
45	45	PENSION IMPACT NOTE ACT MAY APPLY PENSION IMPACT NOTE ACT MAY APPLY
46	46	PENSION IMPACT NOTE ACT MAY APPLY
47	47	A BILL FOR
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53	53	35 ILCS 5/203 from Ch. 120, par. 2-203
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59	59	PENSION IMPACT NOTE ACT MAY APPLY
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76	76	1 this Act to the extent deducted from gross income in
77	77	2 the computation of adjusted gross income for the
78	78	3 taxable year;
79	79	4 (C) An amount equal to the amount received during
80	80	5 the taxable year as a recovery or refund of real
81	81	6 property taxes paid with respect to the taxpayer's
82	82	7 principal residence under the Revenue Act of 1939 and
83	83	8 for which a deduction was previously taken under
84	84	9 subparagraph (L) of this paragraph (2) prior to July
85	85	10 1, 1991, the retrospective application date of Article
86	86	11 4 of Public Act 87-17. In the case of multi-unit or
87	87	12 multi-use structures and farm dwellings, the taxes on
88	88	13 the taxpayer's principal residence shall be that
89	89	14 portion of the total taxes for the entire property
90	90	15 which is attributable to such principal residence;
91	91	16 (D) An amount equal to the amount of the capital
92	92	17 gain deduction allowable under the Internal Revenue
93	93	18 Code, to the extent deducted from gross income in the
94	94	19 computation of adjusted gross income;
95	95	20 (D-5) An amount, to the extent not included in
96	96	21 adjusted gross income, equal to the amount of money
97	97	22 withdrawn by the taxpayer in the taxable year from a
98	98	23 medical care savings account and the interest earned
99	99	24 on the account in the taxable year of a withdrawal
100	100	25 pursuant to subsection (b) of Section 20 of the
101	101	26 Medical Care Savings Account Act or subsection (b) of
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112	112	1 Section 20 of the Medical Care Savings Account Act of
113	113	2 2000;
114	114	3 (D-10) For taxable years ending after December 31,
115	115	4 1997, an amount equal to any eligible remediation
116	116	5 costs that the individual deducted in computing
117	117	6 adjusted gross income and for which the individual
118	118	7 claims a credit under subsection (l) of Section 201;
119	119	8 (D-15) For taxable years 2001 and thereafter, an
120	120	9 amount equal to the bonus depreciation deduction taken
121	121	10 on the taxpayer's federal income tax return for the
122	122	11 taxable year under subsection (k) of Section 168 of
123	123	12 the Internal Revenue Code;
124	124	13 (D-16) If the taxpayer sells, transfers, abandons,
125	125	14 or otherwise disposes of property for which the
126	126	15 taxpayer was required in any taxable year to make an
127	127	16 addition modification under subparagraph (D-15), then
128	128	17 an amount equal to the aggregate amount of the
129	129	18 deductions taken in all taxable years under
130	130	19 subparagraph (Z) with respect to that property.
131	131	20 If the taxpayer continues to own property through
132	132	21 the last day of the last tax year for which a
133	133	22 subtraction is allowed with respect to that property
134	134	23 under subparagraph (Z) and for which the taxpayer was
135	135	24 allowed in any taxable year to make a subtraction
136	136	25 modification under subparagraph (Z), then an amount
137	137	26 equal to that subtraction modification.
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148	148	1 The taxpayer is required to make the addition
149	149	2 modification under this subparagraph only once with
150	150	3 respect to any one piece of property;
151	151	4 (D-17) An amount equal to the amount otherwise
152	152	5 allowed as a deduction in computing base income for
153	153	6 interest paid, accrued, or incurred, directly or
154	154	7 indirectly, (i) for taxable years ending on or after
155	155	8 December 31, 2004, to a foreign person who would be a
156	156	9 member of the same unitary business group but for the
157	157	10 fact that foreign person's business activity outside
158	158	11 the United States is 80% or more of the foreign
159	159	12 person's total business activity and (ii) for taxable
160	160	13 years ending on or after December 31, 2008, to a person
161	161	14 who would be a member of the same unitary business
162	162	15 group but for the fact that the person is prohibited
163	163	16 under Section 1501(a)(27) from being included in the
164	164	17 unitary business group because he or she is ordinarily
165	165	18 required to apportion business income under different
166	166	19 subsections of Section 304. The addition modification
167	167	20 required by this subparagraph shall be reduced to the
168	168	21 extent that dividends were included in base income of
169	169	22 the unitary group for the same taxable year and
170	170	23 received by the taxpayer or by a member of the
171	171	24 taxpayer's unitary business group (including amounts
172	172	25 included in gross income under Sections 951 through
173	173	26 964 of the Internal Revenue Code and amounts included
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184	184	1 in gross income under Section 78 of the Internal
185	185	2 Revenue Code) with respect to the stock of the same
186	186	3 person to whom the interest was paid, accrued, or
187	187	4 incurred.
188	188	5 This paragraph shall not apply to the following:
189	189	6 (i) an item of interest paid, accrued, or
190	190	7 incurred, directly or indirectly, to a person who
191	191	8 is subject in a foreign country or state, other
192	192	9 than a state which requires mandatory unitary
193	193	10 reporting, to a tax on or measured by net income
194	194	11 with respect to such interest; or
195	195	12 (ii) an item of interest paid, accrued, or
196	196	13 incurred, directly or indirectly, to a person if
197	197	14 the taxpayer can establish, based on a
198	198	15 preponderance of the evidence, both of the
199	199	16 following:
200	200	17 (a) the person, during the same taxable
201	201	18 year, paid, accrued, or incurred, the interest
202	202	19 to a person that is not a related member, and
203	203	20 (b) the transaction giving rise to the
204	204	21 interest expense between the taxpayer and the
205	205	22 person did not have as a principal purpose the
206	206	23 avoidance of Illinois income tax, and is paid
207	207	24 pursuant to a contract or agreement that
208	208	25 reflects an arm's-length interest rate and
209	209	26 terms; or
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220	220	1 (iii) the taxpayer can establish, based on
221	221	2 clear and convincing evidence, that the interest
222	222	3 paid, accrued, or incurred relates to a contract
223	223	4 or agreement entered into at arm's-length rates
224	224	5 and terms and the principal purpose for the
225	225	6 payment is not federal or Illinois tax avoidance;
226	226	7 or
227	227	8 (iv) an item of interest paid, accrued, or
228	228	9 incurred, directly or indirectly, to a person if
229	229	10 the taxpayer establishes by clear and convincing
230	230	11 evidence that the adjustments are unreasonable; or
231	231	12 if the taxpayer and the Director agree in writing
232	232	13 to the application or use of an alternative method
233	233	14 of apportionment under Section 304(f).
234	234	15 Nothing in this subsection shall preclude the
235	235	16 Director from making any other adjustment
236	236	17 otherwise allowed under Section 404 of this Act
237	237	18 for any tax year beginning after the effective
238	238	19 date of this amendment provided such adjustment is
239	239	20 made pursuant to regulation adopted by the
240	240	21 Department and such regulations provide methods
241	241	22 and standards by which the Department will utilize
242	242	23 its authority under Section 404 of this Act;
243	243	24 (D-18) An amount equal to the amount of intangible
244	244	25 expenses and costs otherwise allowed as a deduction in
245	245	26 computing base income, and that were paid, accrued, or
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256	256	1 incurred, directly or indirectly, (i) for taxable
257	257	2 years ending on or after December 31, 2004, to a
258	258	3 foreign person who would be a member of the same
259	259	4 unitary business group but for the fact that the
260	260	5 foreign person's business activity outside the United
261	261	6 States is 80% or more of that person's total business
262	262	7 activity and (ii) for taxable years ending on or after
263	263	8 December 31, 2008, to a person who would be a member of
264	264	9 the same unitary business group but for the fact that
265	265	10 the person is prohibited under Section 1501(a)(27)
266	266	11 from being included in the unitary business group
267	267	12 because he or she is ordinarily required to apportion
268	268	13 business income under different subsections of Section
269	269	14 304. The addition modification required by this
270	270	15 subparagraph shall be reduced to the extent that
271	271	16 dividends were included in base income of the unitary
272	272	17 group for the same taxable year and received by the
273	273	18 taxpayer or by a member of the taxpayer's unitary
274	274	19 business group (including amounts included in gross
275	275	20 income under Sections 951 through 964 of the Internal
276	276	21 Revenue Code and amounts included in gross income
277	277	22 under Section 78 of the Internal Revenue Code) with
278	278	23 respect to the stock of the same person to whom the
279	279	24 intangible expenses and costs were directly or
280	280	25 indirectly paid, incurred, or accrued. The preceding
281	281	26 sentence does not apply to the extent that the same
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292	292	1 dividends caused a reduction to the addition
293	293	2 modification required under Section 203(a)(2)(D-17) of
294	294	3 this Act. As used in this subparagraph, the term
295	295	4 "intangible expenses and costs" includes (1) expenses,
296	296	5 losses, and costs for, or related to, the direct or
297	297	6 indirect acquisition, use, maintenance or management,
298	298	7 ownership, sale, exchange, or any other disposition of
299	299	8 intangible property; (2) losses incurred, directly or
300	300	9 indirectly, from factoring transactions or discounting
301	301	10 transactions; (3) royalty, patent, technical, and
302	302	11 copyright fees; (4) licensing fees; and (5) other
303	303	12 similar expenses and costs. For purposes of this
304	304	13 subparagraph, "intangible property" includes patents,
305	305	14 patent applications, trade names, trademarks, service
306	306	15 marks, copyrights, mask works, trade secrets, and
307	307	16 similar types of intangible assets.
308	308	17 This paragraph shall not apply to the following:
309	309	18 (i) any item of intangible expenses or costs
310	310	19 paid, accrued, or incurred, directly or
311	311	20 indirectly, from a transaction with a person who
312	312	21 is subject in a foreign country or state, other
313	313	22 than a state which requires mandatory unitary
314	314	23 reporting, to a tax on or measured by net income
315	315	24 with respect to such item; or
316	316	25 (ii) any item of intangible expense or cost
317	317	26 paid, accrued, or incurred, directly or
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328	328	1 indirectly, if the taxpayer can establish, based
329	329	2 on a preponderance of the evidence, both of the
330	330	3 following:
331	331	4 (a) the person during the same taxable
332	332	5 year paid, accrued, or incurred, the
333	333	6 intangible expense or cost to a person that is
334	334	7 not a related member, and
335	335	8 (b) the transaction giving rise to the
336	336	9 intangible expense or cost between the
337	337	10 taxpayer and the person did not have as a
338	338	11 principal purpose the avoidance of Illinois
339	339	12 income tax, and is paid pursuant to a contract
340	340	13 or agreement that reflects arm's-length terms;
341	341	14 or
342	342	15 (iii) any item of intangible expense or cost
343	343	16 paid, accrued, or incurred, directly or
344	344	17 indirectly, from a transaction with a person if
345	345	18 the taxpayer establishes by clear and convincing
346	346	19 evidence, that the adjustments are unreasonable;
347	347	20 or if the taxpayer and the Director agree in
348	348	21 writing to the application or use of an
349	349	22 alternative method of apportionment under Section
350	350	23 304(f);
351	351	24 Nothing in this subsection shall preclude the
352	352	25 Director from making any other adjustment
353	353	26 otherwise allowed under Section 404 of this Act
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364	364	1 for any tax year beginning after the effective
365	365	2 date of this amendment provided such adjustment is
366	366	3 made pursuant to regulation adopted by the
367	367	4 Department and such regulations provide methods
368	368	5 and standards by which the Department will utilize
369	369	6 its authority under Section 404 of this Act;
370	370	7 (D-19) For taxable years ending on or after
371	371	8 December 31, 2008, an amount equal to the amount of
372	372	9 insurance premium expenses and costs otherwise allowed
373	373	10 as a deduction in computing base income, and that were
374	374	11 paid, accrued, or incurred, directly or indirectly, to
375	375	12 a person who would be a member of the same unitary
376	376	13 business group but for the fact that the person is
377	377	14 prohibited under Section 1501(a)(27) from being
378	378	15 included in the unitary business group because he or
379	379	16 she is ordinarily required to apportion business
380	380	17 income under different subsections of Section 304. The
381	381	18 addition modification required by this subparagraph
382	382	19 shall be reduced to the extent that dividends were
383	383	20 included in base income of the unitary group for the
384	384	21 same taxable year and received by the taxpayer or by a
385	385	22 member of the taxpayer's unitary business group
386	386	23 (including amounts included in gross income under
387	387	24 Sections 951 through 964 of the Internal Revenue Code
388	388	25 and amounts included in gross income under Section 78
389	389	26 of the Internal Revenue Code) with respect to the
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400	400	1 stock of the same person to whom the premiums and costs
401	401	2 were directly or indirectly paid, incurred, or
402	402	3 accrued. The preceding sentence does not apply to the
403	403	4 extent that the same dividends caused a reduction to
404	404	5 the addition modification required under Section
405	405	6 203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this
406	406	7 Act;
407	407	8 (D-20) For taxable years beginning on or after
408	408	9 January 1, 2002 and ending on or before December 31,
409	409	10 2006, in the case of a distribution from a qualified
410	410	11 tuition program under Section 529 of the Internal
411	411	12 Revenue Code, other than (i) a distribution from a
412	412	13 College Savings Pool created under Section 16.5 of the
413	413	14 State Treasurer Act or (ii) a distribution from the
414	414	15 Illinois Prepaid Tuition Trust Fund, an amount equal
415	415	16 to the amount excluded from gross income under Section
416	416	17 529(c)(3)(B). For taxable years beginning on or after
417	417	18 January 1, 2007, in the case of a distribution from a
418	418	19 qualified tuition program under Section 529 of the
419	419	20 Internal Revenue Code, other than (i) a distribution
420	420	21 from a College Savings Pool created under Section 16.5
421	421	22 of the State Treasurer Act, (ii) a distribution from
422	422	23 the Illinois Prepaid Tuition Trust Fund, or (iii) a
423	423	24 distribution from a qualified tuition program under
424	424	25 Section 529 of the Internal Revenue Code that (I)
425	425	26 adopts and determines that its offering materials
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436	436	1 comply with the College Savings Plans Network's
437	437	2 disclosure principles and (II) has made reasonable
438	438	3 efforts to inform in-state residents of the existence
439	439	4 of in-state qualified tuition programs by informing
440	440	5 Illinois residents directly and, where applicable, to
441	441	6 inform financial intermediaries distributing the
442	442	7 program to inform in-state residents of the existence
443	443	8 of in-state qualified tuition programs at least
444	444	9 annually, an amount equal to the amount excluded from
445	445	10 gross income under Section 529(c)(3)(B).
446	446	11 For the purposes of this subparagraph (D-20), a
447	447	12 qualified tuition program has made reasonable efforts
448	448	13 if it makes disclosures (which may use the term
449	449	14 "in-state program" or "in-state plan" and need not
450	450	15 specifically refer to Illinois or its qualified
451	451	16 programs by name) (i) directly to prospective
452	452	17 participants in its offering materials or makes a
453	453	18 public disclosure, such as a website posting; and (ii)
454	454	19 where applicable, to intermediaries selling the
455	455	20 out-of-state program in the same manner that the
456	456	21 out-of-state program distributes its offering
457	457	22 materials;
458	458	23 (D-20.5) For taxable years beginning on or after
459	459	24 January 1, 2018, in the case of a distribution from a
460	460	25 qualified ABLE program under Section 529A of the
461	461	26 Internal Revenue Code, other than a distribution from
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472	472	1 a qualified ABLE program created under Section 16.6 of
473	473	2 the State Treasurer Act, an amount equal to the amount
474	474	3 excluded from gross income under Section 529A(c)(1)(B)
475	475	4 of the Internal Revenue Code;
476	476	5 (D-21) For taxable years beginning on or after
477	477	6 January 1, 2007, in the case of transfer of moneys from
478	478	7 a qualified tuition program under Section 529 of the
479	479	8 Internal Revenue Code that is administered by the
480	480	9 State to an out-of-state program, an amount equal to
481	481	10 the amount of moneys previously deducted from base
482	482	11 income under subsection (a)(2)(Y) of this Section;
483	483	12 (D-21.5) For taxable years beginning on or after
484	484	13 January 1, 2018, in the case of the transfer of moneys
485	485	14 from a qualified tuition program under Section 529 or
486	486	15 a qualified ABLE program under Section 529A of the
487	487	16 Internal Revenue Code that is administered by this
488	488	17 State to an ABLE account established under an
489	489	18 out-of-state ABLE account program, an amount equal to
490	490	19 the contribution component of the transferred amount
491	491	20 that was previously deducted from base income under
492	492	21 subsection (a)(2)(Y) or subsection (a)(2)(HH) of this
493	493	22 Section;
494	494	23 (D-22) For taxable years beginning on or after
495	495	24 January 1, 2009, and prior to January 1, 2018, in the
496	496	25 case of a nonqualified withdrawal or refund of moneys
497	497	26 from a qualified tuition program under Section 529 of
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507	507	HB3088 - 14 - LRB103 05738 HLH 50758 b
508	508	1 the Internal Revenue Code administered by the State
509	509	2 that is not used for qualified expenses at an eligible
510	510	3 education institution, an amount equal to the
511	511	4 contribution component of the nonqualified withdrawal
512	512	5 or refund that was previously deducted from base
513	513	6 income under subsection (a)(2)(y) of this Section,
514	514	7 provided that the withdrawal or refund did not result
515	515	8 from the beneficiary's death or disability. For
516	516	9 taxable years beginning on or after January 1, 2018:
517	517	10 (1) in the case of a nonqualified withdrawal or
518	518	11 refund, as defined under Section 16.5 of the State
519	519	12 Treasurer Act, of moneys from a qualified tuition
520	520	13 program under Section 529 of the Internal Revenue Code
521	521	14 administered by the State, an amount equal to the
522	522	15 contribution component of the nonqualified withdrawal
523	523	16 or refund that was previously deducted from base
524	524	17 income under subsection (a)(2)(Y) of this Section, and
525	525	18 (2) in the case of a nonqualified withdrawal or refund
526	526	19 from a qualified ABLE program under Section 529A of
527	527	20 the Internal Revenue Code administered by the State
528	528	21 that is not used for qualified disability expenses, an
529	529	22 amount equal to the contribution component of the
530	530	23 nonqualified withdrawal or refund that was previously
531	531	24 deducted from base income under subsection (a)(2)(HH)
532	532	25 of this Section;
533	533	26 (D-23) An amount equal to the credit allowable to
534	534
535	535
536	536
537	537
538	538
539	539	HB3088 - 14 - LRB103 05738 HLH 50758 b
540	540
541	541
542	542	HB3088- 15 -LRB103 05738 HLH 50758 b HB3088 - 15 - LRB103 05738 HLH 50758 b
543	543	HB3088 - 15 - LRB103 05738 HLH 50758 b
544	544	1 the taxpayer under Section 218(a) of this Act,
545	545	2 determined without regard to Section 218(c) of this
546	546	3 Act;
547	547	4 (D-24) For taxable years ending on or after
548	548	5 December 31, 2017, an amount equal to the deduction
549	549	6 allowed under Section 199 of the Internal Revenue Code
550	550	7 for the taxable year;
551	551	8 (D-25) In the case of a resident, an amount equal
552	552	9 to the amount of tax for which a credit is allowed
553	553	10 pursuant to Section 201(p)(7) of this Act;
554	554	11 and by deducting from the total so obtained the sum of the
555	555	12 following amounts:
556	556	13 (E) For taxable years ending before December 31,
557	557	14 2001, any amount included in such total in respect of
558	558	15 any compensation (including but not limited to any
559	559	16 compensation paid or accrued to a serviceman while a
560	560	17 prisoner of war or missing in action) paid to a
561	561	18 resident by reason of being on active duty in the Armed
562	562	19 Forces of the United States and in respect of any
563	563	20 compensation paid or accrued to a resident who as a
564	564	21 governmental employee was a prisoner of war or missing
565	565	22 in action, and in respect of any compensation paid to a
566	566	23 resident in 1971 or thereafter for annual training
567	567	24 performed pursuant to Sections 502 and 503, Title 32,
568	568	25 United States Code as a member of the Illinois
569	569	26 National Guard or, beginning with taxable years ending
570	570
571	571
572	572
573	573
574	574
575	575	HB3088 - 15 - LRB103 05738 HLH 50758 b
576	576
577	577
578	578	HB3088- 16 -LRB103 05738 HLH 50758 b HB3088 - 16 - LRB103 05738 HLH 50758 b
579	579	HB3088 - 16 - LRB103 05738 HLH 50758 b
580	580	1 on or after December 31, 2007, the National Guard of
581	581	2 any other state. For taxable years ending on or after
582	582	3 December 31, 2001, any amount included in such total
583	583	4 in respect of any compensation (including but not
584	584	5 limited to any compensation paid or accrued to a
585	585	6 serviceman while a prisoner of war or missing in
586	586	7 action) paid to a resident by reason of being a member
587	587	8 of any component of the Armed Forces of the United
588	588	9 States and in respect of any compensation paid or
589	589	10 accrued to a resident who as a governmental employee
590	590	11 was a prisoner of war or missing in action, and in
591	591	12 respect of any compensation paid to a resident in 2001
592	592	13 or thereafter by reason of being a member of the
593	593	14 Illinois National Guard or, beginning with taxable
594	594	15 years ending on or after December 31, 2007, the
595	595	16 National Guard of any other state. The provisions of
596	596	17 this subparagraph (E) are exempt from the provisions
597	597	18 of Section 250;
598	598	19 (F) An amount equal to all amounts included in
599	599	20 such total pursuant to the provisions of Sections
600	600	21 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
601	601	22 408 of the Internal Revenue Code, or included in such
602	602	23 total as distributions under the provisions of any
603	603	24 retirement or disability plan for employees of any
604	604	25 governmental agency or unit, or retirement payments to
605	605	26 retired partners, which payments are excluded in
606	606
607	607
608	608
609	609
610	610
611	611	HB3088 - 16 - LRB103 05738 HLH 50758 b
612	612
613	613
614	614	HB3088- 17 -LRB103 05738 HLH 50758 b HB3088 - 17 - LRB103 05738 HLH 50758 b
615	615	HB3088 - 17 - LRB103 05738 HLH 50758 b
616	616	1 computing net earnings from self employment by Section
617	617	2 1402 of the Internal Revenue Code and regulations
618	618	3 adopted pursuant thereto;
619	619	4 (G) The valuation limitation amount;
620	620	5 (H) An amount equal to the amount of any tax
621	621	6 imposed by this Act which was refunded to the taxpayer
622	622	7 and included in such total for the taxable year;
623	623	8 (I) An amount equal to all amounts included in
624	624	9 such total pursuant to the provisions of Section 111
625	625	10 of the Internal Revenue Code as a recovery of items
626	626	11 previously deducted from adjusted gross income in the
627	627	12 computation of taxable income;
628	628	13 (J) An amount equal to those dividends included in
629	629	14 such total which were paid by a corporation which
630	630	15 conducts business operations in a River Edge
631	631	16 Redevelopment Zone or zones created under the River
632	632	17 Edge Redevelopment Zone Act, and conducts
633	633	18 substantially all of its operations in a River Edge
634	634	19 Redevelopment Zone or zones. This subparagraph (J) is
635	635	20 exempt from the provisions of Section 250;
636	636	21 (K) An amount equal to those dividends included in
637	637	22 such total that were paid by a corporation that
638	638	23 conducts business operations in a federally designated
639	639	24 Foreign Trade Zone or Sub-Zone and that is designated
640	640	25 a High Impact Business located in Illinois; provided
641	641	26 that dividends eligible for the deduction provided in
642	642
643	643
644	644
645	645
646	646
647	647	HB3088 - 17 - LRB103 05738 HLH 50758 b
648	648
649	649
650	650	HB3088- 18 -LRB103 05738 HLH 50758 b HB3088 - 18 - LRB103 05738 HLH 50758 b
651	651	HB3088 - 18 - LRB103 05738 HLH 50758 b
652	652	1 subparagraph (J) of paragraph (2) of this subsection
653	653	2 shall not be eligible for the deduction provided under
654	654	3 this subparagraph (K);
655	655	4 (L) For taxable years ending after December 31,
656	656	5 1983, an amount equal to all social security benefits
657	657	6 and railroad retirement benefits included in such
658	658	7 total pursuant to Sections 72(r) and 86 of the
659	659	8 Internal Revenue Code;
660	660	9 (M) With the exception of any amounts subtracted
661	661	10 under subparagraph (N), an amount equal to the sum of
662	662	11 all amounts disallowed as deductions by (i) Sections
663	663	12 171(a)(2) and 265(a)(2) of the Internal Revenue Code,
664	664	13 and all amounts of expenses allocable to interest and
665	665	14 disallowed as deductions by Section 265(a)(1) of the
666	666	15 Internal Revenue Code; and (ii) for taxable years
667	667	16 ending on or after August 13, 1999, Sections
668	668	17 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
669	669	18 Internal Revenue Code, plus, for taxable years ending
670	670	19 on or after December 31, 2011, Section 45G(e)(3) of
671	671	20 the Internal Revenue Code and, for taxable years
672	672	21 ending on or after December 31, 2008, any amount
673	673	22 included in gross income under Section 87 of the
674	674	23 Internal Revenue Code; the provisions of this
675	675	24 subparagraph are exempt from the provisions of Section
676	676	25 250;
677	677	26 (N) An amount equal to all amounts included in
678	678
679	679
680	680
681	681
682	682
683	683	HB3088 - 18 - LRB103 05738 HLH 50758 b
684	684
685	685
686	686	HB3088- 19 -LRB103 05738 HLH 50758 b HB3088 - 19 - LRB103 05738 HLH 50758 b
687	687	HB3088 - 19 - LRB103 05738 HLH 50758 b
688	688	1 such total which are exempt from taxation by this
689	689	2 State either by reason of its statutes or Constitution
690	690	3 or by reason of the Constitution, treaties or statutes
691	691	4 of the United States; provided that, in the case of any
692	692	5 statute of this State that exempts income derived from
693	693	6 bonds or other obligations from the tax imposed under
694	694	7 this Act, the amount exempted shall be the interest
695	695	8 net of bond premium amortization;
696	696	9 (O) An amount equal to any contribution made to a
697	697	10 job training project established pursuant to the Tax
698	698	11 Increment Allocation Redevelopment Act;
699	699	12 (P) An amount equal to the amount of the deduction
700	700	13 used to compute the federal income tax credit for
701	701	14 restoration of substantial amounts held under claim of
702	702	15 right for the taxable year pursuant to Section 1341 of
703	703	16 the Internal Revenue Code or of any itemized deduction
704	704	17 taken from adjusted gross income in the computation of
705	705	18 taxable income for restoration of substantial amounts
706	706	19 held under claim of right for the taxable year;
707	707	20 (Q) An amount equal to any amounts included in
708	708	21 such total, received by the taxpayer as an
709	709	22 acceleration in the payment of life, endowment or
710	710	23 annuity benefits in advance of the time they would
711	711	24 otherwise be payable as an indemnity for a terminal
712	712	25 illness;
713	713	26 (R) An amount equal to the amount of any federal or
714	714
715	715
716	716
717	717
718	718
719	719	HB3088 - 19 - LRB103 05738 HLH 50758 b
720	720
721	721
722	722	HB3088- 20 -LRB103 05738 HLH 50758 b HB3088 - 20 - LRB103 05738 HLH 50758 b
723	723	HB3088 - 20 - LRB103 05738 HLH 50758 b
724	724	1 State bonus paid to veterans of the Persian Gulf War;
725	725	2 (S) An amount, to the extent included in adjusted
726	726	3 gross income, equal to the amount of a contribution
727	727	4 made in the taxable year on behalf of the taxpayer to a
728	728	5 medical care savings account established under the
729	729	6 Medical Care Savings Account Act or the Medical Care
730	730	7 Savings Account Act of 2000 to the extent the
731	731	8 contribution is accepted by the account administrator
732	732	9 as provided in that Act;
733	733	10 (T) An amount, to the extent included in adjusted
734	734	11 gross income, equal to the amount of interest earned
735	735	12 in the taxable year on a medical care savings account
736	736	13 established under the Medical Care Savings Account Act
737	737	14 or the Medical Care Savings Account Act of 2000 on
738	738	15 behalf of the taxpayer, other than interest added
739	739	16 pursuant to item (D-5) of this paragraph (2);
740	740	17 (U) For one taxable year beginning on or after
741	741	18 January 1, 1994, an amount equal to the total amount of
742	742	19 tax imposed and paid under subsections (a) and (b) of
743	743	20 Section 201 of this Act on grant amounts received by
744	744	21 the taxpayer under the Nursing Home Grant Assistance
745	745	22 Act during the taxpayer's taxable years 1992 and 1993;
746	746	23 (V) Beginning with tax years ending on or after
747	747	24 December 31, 1995 and ending with tax years ending on
748	748	25 or before December 31, 2004, an amount equal to the
749	749	26 amount paid by a taxpayer who is a self-employed
750	750
751	751
752	752
753	753
754	754
755	755	HB3088 - 20 - LRB103 05738 HLH 50758 b
756	756
757	757
758	758	HB3088- 21 -LRB103 05738 HLH 50758 b HB3088 - 21 - LRB103 05738 HLH 50758 b
759	759	HB3088 - 21 - LRB103 05738 HLH 50758 b
760	760	1 taxpayer, a partner of a partnership, or a shareholder
761	761	2 in a Subchapter S corporation for health insurance or
762	762	3 long-term care insurance for that taxpayer or that
763	763	4 taxpayer's spouse or dependents, to the extent that
764	764	5 the amount paid for that health insurance or long-term
765	765	6 care insurance may be deducted under Section 213 of
766	766	7 the Internal Revenue Code, has not been deducted on
767	767	8 the federal income tax return of the taxpayer, and
768	768	9 does not exceed the taxable income attributable to
769	769	10 that taxpayer's income, self-employment income, or
770	770	11 Subchapter S corporation income; except that no
771	771	12 deduction shall be allowed under this item (V) if the
772	772	13 taxpayer is eligible to participate in any health
773	773	14 insurance or long-term care insurance plan of an
774	774	15 employer of the taxpayer or the taxpayer's spouse. The
775	775	16 amount of the health insurance and long-term care
776	776	17 insurance subtracted under this item (V) shall be
777	777	18 determined by multiplying total health insurance and
778	778	19 long-term care insurance premiums paid by the taxpayer
779	779	20 times a number that represents the fractional
780	780	21 percentage of eligible medical expenses under Section
781	781	22 213 of the Internal Revenue Code of 1986 not actually
782	782	23 deducted on the taxpayer's federal income tax return;
783	783	24 (W) For taxable years beginning on or after
784	784	25 January 1, 1998, all amounts included in the
785	785	26 taxpayer's federal gross income in the taxable year
786	786
787	787
788	788
789	789
790	790
791	791	HB3088 - 21 - LRB103 05738 HLH 50758 b
792	792
793	793
794	794	HB3088- 22 -LRB103 05738 HLH 50758 b HB3088 - 22 - LRB103 05738 HLH 50758 b
795	795	HB3088 - 22 - LRB103 05738 HLH 50758 b
796	796	1 from amounts converted from a regular IRA to a Roth
797	797	2 IRA. This paragraph is exempt from the provisions of
798	798	3 Section 250;
799	799	4 (X) For taxable year 1999 and thereafter, an
800	800	5 amount equal to the amount of any (i) distributions,
801	801	6 to the extent includible in gross income for federal
802	802	7 income tax purposes, made to the taxpayer because of
803	803	8 his or her status as a victim of persecution for racial
804	804	9 or religious reasons by Nazi Germany or any other Axis
805	805	10 regime or as an heir of the victim and (ii) items of
806	806	11 income, to the extent includible in gross income for
807	807	12 federal income tax purposes, attributable to, derived
808	808	13 from or in any way related to assets stolen from,
809	809	14 hidden from, or otherwise lost to a victim of
810	810	15 persecution for racial or religious reasons by Nazi
811	811	16 Germany or any other Axis regime immediately prior to,
812	812	17 during, and immediately after World War II, including,
813	813	18 but not limited to, interest on the proceeds
814	814	19 receivable as insurance under policies issued to a
815	815	20 victim of persecution for racial or religious reasons
816	816	21 by Nazi Germany or any other Axis regime by European
817	817	22 insurance companies immediately prior to and during
818	818	23 World War II; provided, however, this subtraction from
819	819	24 federal adjusted gross income does not apply to assets
820	820	25 acquired with such assets or with the proceeds from
821	821	26 the sale of such assets; provided, further, this
822	822
823	823
824	824
825	825
826	826
827	827	HB3088 - 22 - LRB103 05738 HLH 50758 b
828	828
829	829
830	830	HB3088- 23 -LRB103 05738 HLH 50758 b HB3088 - 23 - LRB103 05738 HLH 50758 b
831	831	HB3088 - 23 - LRB103 05738 HLH 50758 b
832	832	1 paragraph shall only apply to a taxpayer who was the
833	833	2 first recipient of such assets after their recovery
834	834	3 and who is a victim of persecution for racial or
835	835	4 religious reasons by Nazi Germany or any other Axis
836	836	5 regime or as an heir of the victim. The amount of and
837	837	6 the eligibility for any public assistance, benefit, or
838	838	7 similar entitlement is not affected by the inclusion
839	839	8 of items (i) and (ii) of this paragraph in gross income
840	840	9 for federal income tax purposes. This paragraph is
841	841	10 exempt from the provisions of Section 250;
842	842	11 (Y) For taxable years beginning on or after
843	843	12 January 1, 2002 and ending on or before December 31,
844	844	13 2004, moneys contributed in the taxable year to a
845	845	14 College Savings Pool account under Section 16.5 of the
846	846	15 State Treasurer Act, except that amounts excluded from
847	847	16 gross income under Section 529(c)(3)(C)(i) of the
848	848	17 Internal Revenue Code shall not be considered moneys
849	849	18 contributed under this subparagraph (Y). For taxable
850	850	19 years beginning on or after January 1, 2005, a maximum
851	851	20 of $10,000 contributed in the taxable year to (i) a
852	852	21 College Savings Pool account under Section 16.5 of the
853	853	22 State Treasurer Act or (ii) the Illinois Prepaid
854	854	23 Tuition Trust Fund, except that amounts excluded from
855	855	24 gross income under Section 529(c)(3)(C)(i) of the
856	856	25 Internal Revenue Code shall not be considered moneys
857	857	26 contributed under this subparagraph (Y). For purposes
858	858
859	859
860	860
861	861
862	862
863	863	HB3088 - 23 - LRB103 05738 HLH 50758 b
864	864
865	865
866	866	HB3088- 24 -LRB103 05738 HLH 50758 b HB3088 - 24 - LRB103 05738 HLH 50758 b
867	867	HB3088 - 24 - LRB103 05738 HLH 50758 b
868	868	1 of this subparagraph, contributions made by an
869	869	2 employer on behalf of an employee, or matching
870	870	3 contributions made by an employee, shall be treated as
871	871	4 made by the employee. This subparagraph (Y) is exempt
872	872	5 from the provisions of Section 250;
873	873	6 (Z) For taxable years 2001 and thereafter, for the
874	874	7 taxable year in which the bonus depreciation deduction
875	875	8 is taken on the taxpayer's federal income tax return
876	876	9 under subsection (k) of Section 168 of the Internal
877	877	10 Revenue Code and for each applicable taxable year
878	878	11 thereafter, an amount equal to "x", where:
879	879	12 (1) "y" equals the amount of the depreciation
880	880	13 deduction taken for the taxable year on the
881	881	14 taxpayer's federal income tax return on property
882	882	15 for which the bonus depreciation deduction was
883	883	16 taken in any year under subsection (k) of Section
884	884	17 168 of the Internal Revenue Code, but not
885	885	18 including the bonus depreciation deduction;
886	886	19 (2) for taxable years ending on or before
887	887	20 December 31, 2005, "x" equals "y" multiplied by 30
888	888	21 and then divided by 70 (or "y" multiplied by
889	889	22 0.429); and
890	890	23 (3) for taxable years ending after December
891	891	24 31, 2005:
892	892	25 (i) for property on which a bonus
893	893	26 depreciation deduction of 30% of the adjusted
894	894
895	895
896	896
897	897
898	898
899	899	HB3088 - 24 - LRB103 05738 HLH 50758 b
900	900
901	901
902	902	HB3088- 25 -LRB103 05738 HLH 50758 b HB3088 - 25 - LRB103 05738 HLH 50758 b
903	903	HB3088 - 25 - LRB103 05738 HLH 50758 b
904	904	1 basis was taken, "x" equals "y" multiplied by
905	905	2 30 and then divided by 70 (or "y" multiplied
906	906	3 by 0.429);
907	907	4 (ii) for property on which a bonus
908	908	5 depreciation deduction of 50% of the adjusted
909	909	6 basis was taken, "x" equals "y" multiplied by
910	910	7 1.0;
911	911	8 (iii) for property on which a bonus
912	912	9 depreciation deduction of 100% of the adjusted
913	913	10 basis was taken in a taxable year ending on or
914	914	11 after December 31, 2021, "x" equals the
915	915	12 depreciation deduction that would be allowed
916	916	13 on that property if the taxpayer had made the
917	917	14 election under Section 168(k)(7) of the
918	918	15 Internal Revenue Code to not claim bonus
919	919	16 depreciation on that property; and
920	920	17 (iv) for property on which a bonus
921	921	18 depreciation deduction of a percentage other
922	922	19 than 30%, 50% or 100% of the adjusted basis
923	923	20 was taken in a taxable year ending on or after
924	924	21 December 31, 2021, "x" equals "y" multiplied
925	925	22 by 100 times the percentage bonus depreciation
926	926	23 on the property (that is, 100(bonus%)) and
927	927	24 then divided by 100 times 1 minus the
928	928	25 percentage bonus depreciation on the property
929	929	26 (that is, 100(1bonus%)).
930	930
931	931
932	932
933	933
934	934
935	935	HB3088 - 25 - LRB103 05738 HLH 50758 b
936	936
937	937
938	938	HB3088- 26 -LRB103 05738 HLH 50758 b HB3088 - 26 - LRB103 05738 HLH 50758 b
939	939	HB3088 - 26 - LRB103 05738 HLH 50758 b
940	940	1 The aggregate amount deducted under this
941	941	2 subparagraph in all taxable years for any one piece of
942	942	3 property may not exceed the amount of the bonus
943	943	4 depreciation deduction taken on that property on the
944	944	5 taxpayer's federal income tax return under subsection
945	945	6 (k) of Section 168 of the Internal Revenue Code. This
946	946	7 subparagraph (Z) is exempt from the provisions of
947	947	8 Section 250;
948	948	9 (AA) If the taxpayer sells, transfers, abandons,
949	949	10 or otherwise disposes of property for which the
950	950	11 taxpayer was required in any taxable year to make an
951	951	12 addition modification under subparagraph (D-15), then
952	952	13 an amount equal to that addition modification.
953	953	14 If the taxpayer continues to own property through
954	954	15 the last day of the last tax year for which a
955	955	16 subtraction is allowed with respect to that property
956	956	17 under subparagraph (Z) and for which the taxpayer was
957	957	18 required in any taxable year to make an addition
958	958	19 modification under subparagraph (D-15), then an amount
959	959	20 equal to that addition modification.
960	960	21 The taxpayer is allowed to take the deduction
961	961	22 under this subparagraph only once with respect to any
962	962	23 one piece of property.
963	963	24 This subparagraph (AA) is exempt from the
964	964	25 provisions of Section 250;
965	965	26 (BB) Any amount included in adjusted gross income,
966	966
967	967
968	968
969	969
970	970
971	971	HB3088 - 26 - LRB103 05738 HLH 50758 b
972	972
973	973
974	974	HB3088- 27 -LRB103 05738 HLH 50758 b HB3088 - 27 - LRB103 05738 HLH 50758 b
975	975	HB3088 - 27 - LRB103 05738 HLH 50758 b
976	976	1 other than salary, received by a driver in a
977	977	2 ridesharing arrangement using a motor vehicle;
978	978	3 (CC) The amount of (i) any interest income (net of
979	979	4 the deductions allocable thereto) taken into account
980	980	5 for the taxable year with respect to a transaction
981	981	6 with a taxpayer that is required to make an addition
982	982	7 modification with respect to such transaction under
983	983	8 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
984	984	9 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
985	985	10 the amount of that addition modification, and (ii) any
986	986	11 income from intangible property (net of the deductions
987	987	12 allocable thereto) taken into account for the taxable
988	988	13 year with respect to a transaction with a taxpayer
989	989	14 that is required to make an addition modification with
990	990	15 respect to such transaction under Section
991	991	16 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
992	992	17 203(d)(2)(D-8), but not to exceed the amount of that
993	993	18 addition modification. This subparagraph (CC) is
994	994	19 exempt from the provisions of Section 250;
995	995	20 (DD) An amount equal to the interest income taken
996	996	21 into account for the taxable year (net of the
997	997	22 deductions allocable thereto) with respect to
998	998	23 transactions with (i) a foreign person who would be a
999	999	24 member of the taxpayer's unitary business group but
1000	1000	25 for the fact that the foreign person's business
1001	1001	26 activity outside the United States is 80% or more of
1002	1002
1003	1003
1004	1004
1005	1005
1006	1006
1007	1007	HB3088 - 27 - LRB103 05738 HLH 50758 b
1008	1008
1009	1009
1010	1010	HB3088- 28 -LRB103 05738 HLH 50758 b HB3088 - 28 - LRB103 05738 HLH 50758 b
1011	1011	HB3088 - 28 - LRB103 05738 HLH 50758 b
1012	1012	1 that person's total business activity and (ii) for
1013	1013	2 taxable years ending on or after December 31, 2008, to
1014	1014	3 a person who would be a member of the same unitary
1015	1015	4 business group but for the fact that the person is
1016	1016	5 prohibited under Section 1501(a)(27) from being
1017	1017	6 included in the unitary business group because he or
1018	1018	7 she is ordinarily required to apportion business
1019	1019	8 income under different subsections of Section 304, but
1020	1020	9 not to exceed the addition modification required to be
1021	1021	10 made for the same taxable year under Section
1022	1022	11 203(a)(2)(D-17) for interest paid, accrued, or
1023	1023	12 incurred, directly or indirectly, to the same person.
1024	1024	13 This subparagraph (DD) is exempt from the provisions
1025	1025	14 of Section 250;
1026	1026	15 (EE) An amount equal to the income from intangible
1027	1027	16 property taken into account for the taxable year (net
1028	1028	17 of the deductions allocable thereto) with respect to
1029	1029	18 transactions with (i) a foreign person who would be a
1030	1030	19 member of the taxpayer's unitary business group but
1031	1031	20 for the fact that the foreign person's business
1032	1032	21 activity outside the United States is 80% or more of
1033	1033	22 that person's total business activity and (ii) for
1034	1034	23 taxable years ending on or after December 31, 2008, to
1035	1035	24 a person who would be a member of the same unitary
1036	1036	25 business group but for the fact that the person is
1037	1037	26 prohibited under Section 1501(a)(27) from being
1038	1038
1039	1039
1040	1040
1041	1041
1042	1042
1043	1043	HB3088 - 28 - LRB103 05738 HLH 50758 b
1044	1044
1045	1045
1046	1046	HB3088- 29 -LRB103 05738 HLH 50758 b HB3088 - 29 - LRB103 05738 HLH 50758 b
1047	1047	HB3088 - 29 - LRB103 05738 HLH 50758 b
1048	1048	1 included in the unitary business group because he or
1049	1049	2 she is ordinarily required to apportion business
1050	1050	3 income under different subsections of Section 304, but
1051	1051	4 not to exceed the addition modification required to be
1052	1052	5 made for the same taxable year under Section
1053	1053	6 203(a)(2)(D-18) for intangible expenses and costs
1054	1054	7 paid, accrued, or incurred, directly or indirectly, to
1055	1055	8 the same foreign person. This subparagraph (EE) is
1056	1056	9 exempt from the provisions of Section 250;
1057	1057	10 (FF) An amount equal to any amount awarded to the
1058	1058	11 taxpayer during the taxable year by the Court of
1059	1059	12 Claims under subsection (c) of Section 8 of the Court
1060	1060	13 of Claims Act for time unjustly served in a State
1061	1061	14 prison. This subparagraph (FF) is exempt from the
1062	1062	15 provisions of Section 250;
1063	1063	16 (GG) For taxable years ending on or after December
1064	1064	17 31, 2011, in the case of a taxpayer who was required to
1065	1065	18 add back any insurance premiums under Section
1066	1066	19 203(a)(2)(D-19), such taxpayer may elect to subtract
1067	1067	20 that part of a reimbursement received from the
1068	1068	21 insurance company equal to the amount of the expense
1069	1069	22 or loss (including expenses incurred by the insurance
1070	1070	23 company) that would have been taken into account as a
1071	1071	24 deduction for federal income tax purposes if the
1072	1072	25 expense or loss had been uninsured. If a taxpayer
1073	1073	26 makes the election provided for by this subparagraph
1074	1074
1075	1075
1076	1076
1077	1077
1078	1078
1079	1079	HB3088 - 29 - LRB103 05738 HLH 50758 b
1080	1080
1081	1081
1082	1082	HB3088- 30 -LRB103 05738 HLH 50758 b HB3088 - 30 - LRB103 05738 HLH 50758 b
1083	1083	HB3088 - 30 - LRB103 05738 HLH 50758 b
1084	1084	1 (GG), the insurer to which the premiums were paid must
1085	1085	2 add back to income the amount subtracted by the
1086	1086	3 taxpayer pursuant to this subparagraph (GG). This
1087	1087	4 subparagraph (GG) is exempt from the provisions of
1088	1088	5 Section 250;
1089	1089	6 (HH) For taxable years beginning on or after
1090	1090	7 January 1, 2018 and prior to January 1, 2028, a maximum
1091	1091	8 of $10,000 contributed in the taxable year to a
1092	1092	9 qualified ABLE account under Section 16.6 of the State
1093	1093	10 Treasurer Act, except that amounts excluded from gross
1094	1094	11 income under Section 529(c)(3)(C)(i) or Section
1095	1095	12 529A(c)(1)(C) of the Internal Revenue Code shall not
1096	1096	13 be considered moneys contributed under this
1097	1097	14 subparagraph (HH). For purposes of this subparagraph
1098	1098	15 (HH), contributions made by an employer on behalf of
1099	1099	16 an employee, or matching contributions made by an
1100	1100	17 employee, shall be treated as made by the employee;
1101	1101	18 and
1102	1102	19 (II) For taxable years that begin on or after
1103	1103	20 January 1, 2021 and begin before January 1, 2026, the
1104	1104	21 amount that is included in the taxpayer's federal
1105	1105	22 adjusted gross income pursuant to Section 61 of the
1106	1106	23 Internal Revenue Code as discharge of indebtedness
1107	1107	24 attributable to student loan forgiveness and that is
1108	1108	25 not excluded from the taxpayer's federal adjusted
1109	1109	26 gross income pursuant to paragraph (5) of subsection
1110	1110
1111	1111
1112	1112
1113	1113
1114	1114
1115	1115	HB3088 - 30 - LRB103 05738 HLH 50758 b
1116	1116
1117	1117
1118	1118	HB3088- 31 -LRB103 05738 HLH 50758 b HB3088 - 31 - LRB103 05738 HLH 50758 b
1119	1119	HB3088 - 31 - LRB103 05738 HLH 50758 b
1120	1120	1 (f) of Section 108 of the Internal Revenue Code; and .
1121	1121	2 (JJ) For taxable years that begin on or after
1122	1122	3 January 1, 2024, an amount equal to the premiums paid
1123	1123	4 by the taxpayer during the taxable year under an
1124	1124	5 individual health insurance plan covering the taxpayer
1125	1125	6 or the taxpayer's dependents; this subparagraph (JJ)
1126	1126	7 is exempt from the provisions of Section 250;
1127	1127	8 (b) Corporations.
1128	1128	9 (1) In general. In the case of a corporation, base
1129	1129	10 income means an amount equal to the taxpayer's taxable
1130	1130	11 income for the taxable year as modified by paragraph (2).
1131	1131	12 (2) Modifications. The taxable income referred to in
1132	1132	13 paragraph (1) shall be modified by adding thereto the sum
1133	1133	14 of the following amounts:
1134	1134	15 (A) An amount equal to all amounts paid or accrued
1135	1135	16 to the taxpayer as interest and all distributions
1136	1136	17 received from regulated investment companies during
1137	1137	18 the taxable year to the extent excluded from gross
1138	1138	19 income in the computation of taxable income;
1139	1139	20 (B) An amount equal to the amount of tax imposed by
1140	1140	21 this Act to the extent deducted from gross income in
1141	1141	22 the computation of taxable income for the taxable
1142	1142	23 year;
1143	1143	24 (C) In the case of a regulated investment company,
1144	1144	25 an amount equal to the excess of (i) the net long-term
1145	1145
1146	1146
1147	1147
1148	1148
1149	1149
1150	1150	HB3088 - 31 - LRB103 05738 HLH 50758 b
1151	1151
1152	1152
1153	1153	HB3088- 32 -LRB103 05738 HLH 50758 b HB3088 - 32 - LRB103 05738 HLH 50758 b
1154	1154	HB3088 - 32 - LRB103 05738 HLH 50758 b
1155	1155	1 capital gain for the taxable year, over (ii) the
1156	1156	2 amount of the capital gain dividends designated as
1157	1157	3 such in accordance with Section 852(b)(3)(C) of the
1158	1158	4 Internal Revenue Code and any amount designated under
1159	1159	5 Section 852(b)(3)(D) of the Internal Revenue Code,
1160	1160	6 attributable to the taxable year (this amendatory Act
1161	1161	7 of 1995 (Public Act 89-89) is declarative of existing
1162	1162	8 law and is not a new enactment);
1163	1163	9 (D) The amount of any net operating loss deduction
1164	1164	10 taken in arriving at taxable income, other than a net
1165	1165	11 operating loss carried forward from a taxable year
1166	1166	12 ending prior to December 31, 1986;
1167	1167	13 (E) For taxable years in which a net operating
1168	1168	14 loss carryback or carryforward from a taxable year
1169	1169	15 ending prior to December 31, 1986 is an element of
1170	1170	16 taxable income under paragraph (1) of subsection (e)
1171	1171	17 or subparagraph (E) of paragraph (2) of subsection
1172	1172	18 (e), the amount by which addition modifications other
1173	1173	19 than those provided by this subparagraph (E) exceeded
1174	1174	20 subtraction modifications in such earlier taxable
1175	1175	21 year, with the following limitations applied in the
1176	1176	22 order that they are listed:
1177	1177	23 (i) the addition modification relating to the
1178	1178	24 net operating loss carried back or forward to the
1179	1179	25 taxable year from any taxable year ending prior to
1180	1180	26 December 31, 1986 shall be reduced by the amount
1181	1181
1182	1182
1183	1183
1184	1184
1185	1185
1186	1186	HB3088 - 32 - LRB103 05738 HLH 50758 b
1187	1187
1188	1188
1189	1189	HB3088- 33 -LRB103 05738 HLH 50758 b HB3088 - 33 - LRB103 05738 HLH 50758 b
1190	1190	HB3088 - 33 - LRB103 05738 HLH 50758 b
1191	1191	1 of addition modification under this subparagraph
1192	1192	2 (E) which related to that net operating loss and
1193	1193	3 which was taken into account in calculating the
1194	1194	4 base income of an earlier taxable year, and
1195	1195	5 (ii) the addition modification relating to the
1196	1196	6 net operating loss carried back or forward to the
1197	1197	7 taxable year from any taxable year ending prior to
1198	1198	8 December 31, 1986 shall not exceed the amount of
1199	1199	9 such carryback or carryforward;
1200	1200	10 For taxable years in which there is a net
1201	1201	11 operating loss carryback or carryforward from more
1202	1202	12 than one other taxable year ending prior to December
1203	1203	13 31, 1986, the addition modification provided in this
1204	1204	14 subparagraph (E) shall be the sum of the amounts
1205	1205	15 computed independently under the preceding provisions
1206	1206	16 of this subparagraph (E) for each such taxable year;
1207	1207	17 (E-5) For taxable years ending after December 31,
1208	1208	18 1997, an amount equal to any eligible remediation
1209	1209	19 costs that the corporation deducted in computing
1210	1210	20 adjusted gross income and for which the corporation
1211	1211	21 claims a credit under subsection (l) of Section 201;
1212	1212	22 (E-10) For taxable years 2001 and thereafter, an
1213	1213	23 amount equal to the bonus depreciation deduction taken
1214	1214	24 on the taxpayer's federal income tax return for the
1215	1215	25 taxable year under subsection (k) of Section 168 of
1216	1216	26 the Internal Revenue Code;
1217	1217
1218	1218
1219	1219
1220	1220
1221	1221
1222	1222	HB3088 - 33 - LRB103 05738 HLH 50758 b
1223	1223
1224	1224
1225	1225	HB3088- 34 -LRB103 05738 HLH 50758 b HB3088 - 34 - LRB103 05738 HLH 50758 b
1226	1226	HB3088 - 34 - LRB103 05738 HLH 50758 b
1227	1227	1 (E-11) If the taxpayer sells, transfers, abandons,
1228	1228	2 or otherwise disposes of property for which the
1229	1229	3 taxpayer was required in any taxable year to make an
1230	1230	4 addition modification under subparagraph (E-10), then
1231	1231	5 an amount equal to the aggregate amount of the
1232	1232	6 deductions taken in all taxable years under
1233	1233	7 subparagraph (T) with respect to that property.
1234	1234	8 If the taxpayer continues to own property through
1235	1235	9 the last day of the last tax year for which a
1236	1236	10 subtraction is allowed with respect to that property
1237	1237	11 under subparagraph (T) and for which the taxpayer was
1238	1238	12 allowed in any taxable year to make a subtraction
1239	1239	13 modification under subparagraph (T), then an amount
1240	1240	14 equal to that subtraction modification.
1241	1241	15 The taxpayer is required to make the addition
1242	1242	16 modification under this subparagraph only once with
1243	1243	17 respect to any one piece of property;
1244	1244	18 (E-12) An amount equal to the amount otherwise
1245	1245	19 allowed as a deduction in computing base income for
1246	1246	20 interest paid, accrued, or incurred, directly or
1247	1247	21 indirectly, (i) for taxable years ending on or after
1248	1248	22 December 31, 2004, to a foreign person who would be a
1249	1249	23 member of the same unitary business group but for the
1250	1250	24 fact the foreign person's business activity outside
1251	1251	25 the United States is 80% or more of the foreign
1252	1252	26 person's total business activity and (ii) for taxable
1253	1253
1254	1254
1255	1255
1256	1256
1257	1257
1258	1258	HB3088 - 34 - LRB103 05738 HLH 50758 b
1259	1259
1260	1260
1261	1261	HB3088- 35 -LRB103 05738 HLH 50758 b HB3088 - 35 - LRB103 05738 HLH 50758 b
1262	1262	HB3088 - 35 - LRB103 05738 HLH 50758 b
1263	1263	1 years ending on or after December 31, 2008, to a person
1264	1264	2 who would be a member of the same unitary business
1265	1265	3 group but for the fact that the person is prohibited
1266	1266	4 under Section 1501(a)(27) from being included in the
1267	1267	5 unitary business group because he or she is ordinarily
1268	1268	6 required to apportion business income under different
1269	1269	7 subsections of Section 304. The addition modification
1270	1270	8 required by this subparagraph shall be reduced to the
1271	1271	9 extent that dividends were included in base income of
1272	1272	10 the unitary group for the same taxable year and
1273	1273	11 received by the taxpayer or by a member of the
1274	1274	12 taxpayer's unitary business group (including amounts
1275	1275	13 included in gross income pursuant to Sections 951
1276	1276	14 through 964 of the Internal Revenue Code and amounts
1277	1277	15 included in gross income under Section 78 of the
1278	1278	16 Internal Revenue Code) with respect to the stock of
1279	1279	17 the same person to whom the interest was paid,
1280	1280	18 accrued, or incurred.
1281	1281	19 This paragraph shall not apply to the following:
1282	1282	20 (i) an item of interest paid, accrued, or
1283	1283	21 incurred, directly or indirectly, to a person who
1284	1284	22 is subject in a foreign country or state, other
1285	1285	23 than a state which requires mandatory unitary
1286	1286	24 reporting, to a tax on or measured by net income
1287	1287	25 with respect to such interest; or
1288	1288	26 (ii) an item of interest paid, accrued, or
1289	1289
1290	1290
1291	1291
1292	1292
1293	1293
1294	1294	HB3088 - 35 - LRB103 05738 HLH 50758 b
1295	1295
1296	1296
1297	1297	HB3088- 36 -LRB103 05738 HLH 50758 b HB3088 - 36 - LRB103 05738 HLH 50758 b
1298	1298	HB3088 - 36 - LRB103 05738 HLH 50758 b
1299	1299	1 incurred, directly or indirectly, to a person if
1300	1300	2 the taxpayer can establish, based on a
1301	1301	3 preponderance of the evidence, both of the
1302	1302	4 following:
1303	1303	5 (a) the person, during the same taxable
1304	1304	6 year, paid, accrued, or incurred, the interest
1305	1305	7 to a person that is not a related member, and
1306	1306	8 (b) the transaction giving rise to the
1307	1307	9 interest expense between the taxpayer and the
1308	1308	10 person did not have as a principal purpose the
1309	1309	11 avoidance of Illinois income tax, and is paid
1310	1310	12 pursuant to a contract or agreement that
1311	1311	13 reflects an arm's-length interest rate and
1312	1312	14 terms; or
1313	1313	15 (iii) the taxpayer can establish, based on
1314	1314	16 clear and convincing evidence, that the interest
1315	1315	17 paid, accrued, or incurred relates to a contract
1316	1316	18 or agreement entered into at arm's-length rates
1317	1317	19 and terms and the principal purpose for the
1318	1318	20 payment is not federal or Illinois tax avoidance;
1319	1319	21 or
1320	1320	22 (iv) an item of interest paid, accrued, or
1321	1321	23 incurred, directly or indirectly, to a person if
1322	1322	24 the taxpayer establishes by clear and convincing
1323	1323	25 evidence that the adjustments are unreasonable; or
1324	1324	26 if the taxpayer and the Director agree in writing
1325	1325
1326	1326
1327	1327
1328	1328
1329	1329
1330	1330	HB3088 - 36 - LRB103 05738 HLH 50758 b
1331	1331
1332	1332
1333	1333	HB3088- 37 -LRB103 05738 HLH 50758 b HB3088 - 37 - LRB103 05738 HLH 50758 b
1334	1334	HB3088 - 37 - LRB103 05738 HLH 50758 b
1335	1335	1 to the application or use of an alternative method
1336	1336	2 of apportionment under Section 304(f).
1337	1337	3 Nothing in this subsection shall preclude the
1338	1338	4 Director from making any other adjustment
1339	1339	5 otherwise allowed under Section 404 of this Act
1340	1340	6 for any tax year beginning after the effective
1341	1341	7 date of this amendment provided such adjustment is
1342	1342	8 made pursuant to regulation adopted by the
1343	1343	9 Department and such regulations provide methods
1344	1344	10 and standards by which the Department will utilize
1345	1345	11 its authority under Section 404 of this Act;
1346	1346	12 (E-13) An amount equal to the amount of intangible
1347	1347	13 expenses and costs otherwise allowed as a deduction in
1348	1348	14 computing base income, and that were paid, accrued, or
1349	1349	15 incurred, directly or indirectly, (i) for taxable
1350	1350	16 years ending on or after December 31, 2004, to a
1351	1351	17 foreign person who would be a member of the same
1352	1352	18 unitary business group but for the fact that the
1353	1353	19 foreign person's business activity outside the United
1354	1354	20 States is 80% or more of that person's total business
1355	1355	21 activity and (ii) for taxable years ending on or after
1356	1356	22 December 31, 2008, to a person who would be a member of
1357	1357	23 the same unitary business group but for the fact that
1358	1358	24 the person is prohibited under Section 1501(a)(27)
1359	1359	25 from being included in the unitary business group
1360	1360	26 because he or she is ordinarily required to apportion
1361	1361
1362	1362
1363	1363
1364	1364
1365	1365
1366	1366	HB3088 - 37 - LRB103 05738 HLH 50758 b
1367	1367
1368	1368
1369	1369	HB3088- 38 -LRB103 05738 HLH 50758 b HB3088 - 38 - LRB103 05738 HLH 50758 b
1370	1370	HB3088 - 38 - LRB103 05738 HLH 50758 b
1371	1371	1 business income under different subsections of Section
1372	1372	2 304. The addition modification required by this
1373	1373	3 subparagraph shall be reduced to the extent that
1374	1374	4 dividends were included in base income of the unitary
1375	1375	5 group for the same taxable year and received by the
1376	1376	6 taxpayer or by a member of the taxpayer's unitary
1377	1377	7 business group (including amounts included in gross
1378	1378	8 income pursuant to Sections 951 through 964 of the
1379	1379	9 Internal Revenue Code and amounts included in gross
1380	1380	10 income under Section 78 of the Internal Revenue Code)
1381	1381	11 with respect to the stock of the same person to whom
1382	1382	12 the intangible expenses and costs were directly or
1383	1383	13 indirectly paid, incurred, or accrued. The preceding
1384	1384	14 sentence shall not apply to the extent that the same
1385	1385	15 dividends caused a reduction to the addition
1386	1386	16 modification required under Section 203(b)(2)(E-12) of
1387	1387	17 this Act. As used in this subparagraph, the term
1388	1388	18 "intangible expenses and costs" includes (1) expenses,
1389	1389	19 losses, and costs for, or related to, the direct or
1390	1390	20 indirect acquisition, use, maintenance or management,
1391	1391	21 ownership, sale, exchange, or any other disposition of
1392	1392	22 intangible property; (2) losses incurred, directly or
1393	1393	23 indirectly, from factoring transactions or discounting
1394	1394	24 transactions; (3) royalty, patent, technical, and
1395	1395	25 copyright fees; (4) licensing fees; and (5) other
1396	1396	26 similar expenses and costs. For purposes of this
1397	1397
1398	1398
1399	1399
1400	1400
1401	1401
1402	1402	HB3088 - 38 - LRB103 05738 HLH 50758 b
1403	1403
1404	1404
1405	1405	HB3088- 39 -LRB103 05738 HLH 50758 b HB3088 - 39 - LRB103 05738 HLH 50758 b
1406	1406	HB3088 - 39 - LRB103 05738 HLH 50758 b
1407	1407	1 subparagraph, "intangible property" includes patents,
1408	1408	2 patent applications, trade names, trademarks, service
1409	1409	3 marks, copyrights, mask works, trade secrets, and
1410	1410	4 similar types of intangible assets.
1411	1411	5 This paragraph shall not apply to the following:
1412	1412	6 (i) any item of intangible expenses or costs
1413	1413	7 paid, accrued, or incurred, directly or
1414	1414	8 indirectly, from a transaction with a person who
1415	1415	9 is subject in a foreign country or state, other
1416	1416	10 than a state which requires mandatory unitary
1417	1417	11 reporting, to a tax on or measured by net income
1418	1418	12 with respect to such item; or
1419	1419	13 (ii) any item of intangible expense or cost
1420	1420	14 paid, accrued, or incurred, directly or
1421	1421	15 indirectly, if the taxpayer can establish, based
1422	1422	16 on a preponderance of the evidence, both of the
1423	1423	17 following:
1424	1424	18 (a) the person during the same taxable
1425	1425	19 year paid, accrued, or incurred, the
1426	1426	20 intangible expense or cost to a person that is
1427	1427	21 not a related member, and
1428	1428	22 (b) the transaction giving rise to the
1429	1429	23 intangible expense or cost between the
1430	1430	24 taxpayer and the person did not have as a
1431	1431	25 principal purpose the avoidance of Illinois
1432	1432	26 income tax, and is paid pursuant to a contract
1433	1433
1434	1434
1435	1435
1436	1436
1437	1437
1438	1438	HB3088 - 39 - LRB103 05738 HLH 50758 b
1439	1439
1440	1440
1441	1441	HB3088- 40 -LRB103 05738 HLH 50758 b HB3088 - 40 - LRB103 05738 HLH 50758 b
1442	1442	HB3088 - 40 - LRB103 05738 HLH 50758 b
1443	1443	1 or agreement that reflects arm's-length terms;
1444	1444	2 or
1445	1445	3 (iii) any item of intangible expense or cost
1446	1446	4 paid, accrued, or incurred, directly or
1447	1447	5 indirectly, from a transaction with a person if
1448	1448	6 the taxpayer establishes by clear and convincing
1449	1449	7 evidence, that the adjustments are unreasonable;
1450	1450	8 or if the taxpayer and the Director agree in
1451	1451	9 writing to the application or use of an
1452	1452	10 alternative method of apportionment under Section
1453	1453	11 304(f);
1454	1454	12 Nothing in this subsection shall preclude the
1455	1455	13 Director from making any other adjustment
1456	1456	14 otherwise allowed under Section 404 of this Act
1457	1457	15 for any tax year beginning after the effective
1458	1458	16 date of this amendment provided such adjustment is
1459	1459	17 made pursuant to regulation adopted by the
1460	1460	18 Department and such regulations provide methods
1461	1461	19 and standards by which the Department will utilize
1462	1462	20 its authority under Section 404 of this Act;
1463	1463	21 (E-14) For taxable years ending on or after
1464	1464	22 December 31, 2008, an amount equal to the amount of
1465	1465	23 insurance premium expenses and costs otherwise allowed
1466	1466	24 as a deduction in computing base income, and that were
1467	1467	25 paid, accrued, or incurred, directly or indirectly, to
1468	1468	26 a person who would be a member of the same unitary
1469	1469
1470	1470
1471	1471
1472	1472
1473	1473
1474	1474	HB3088 - 40 - LRB103 05738 HLH 50758 b
1475	1475
1476	1476
1477	1477	HB3088- 41 -LRB103 05738 HLH 50758 b HB3088 - 41 - LRB103 05738 HLH 50758 b
1478	1478	HB3088 - 41 - LRB103 05738 HLH 50758 b
1479	1479	1 business group but for the fact that the person is
1480	1480	2 prohibited under Section 1501(a)(27) from being
1481	1481	3 included in the unitary business group because he or
1482	1482	4 she is ordinarily required to apportion business
1483	1483	5 income under different subsections of Section 304. The
1484	1484	6 addition modification required by this subparagraph
1485	1485	7 shall be reduced to the extent that dividends were
1486	1486	8 included in base income of the unitary group for the
1487	1487	9 same taxable year and received by the taxpayer or by a
1488	1488	10 member of the taxpayer's unitary business group
1489	1489	11 (including amounts included in gross income under
1490	1490	12 Sections 951 through 964 of the Internal Revenue Code
1491	1491	13 and amounts included in gross income under Section 78
1492	1492	14 of the Internal Revenue Code) with respect to the
1493	1493	15 stock of the same person to whom the premiums and costs
1494	1494	16 were directly or indirectly paid, incurred, or
1495	1495	17 accrued. The preceding sentence does not apply to the
1496	1496	18 extent that the same dividends caused a reduction to
1497	1497	19 the addition modification required under Section
1498	1498	20 203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this
1499	1499	21 Act;
1500	1500	22 (E-15) For taxable years beginning after December
1501	1501	23 31, 2008, any deduction for dividends paid by a
1502	1502	24 captive real estate investment trust that is allowed
1503	1503	25 to a real estate investment trust under Section
1504	1504	26 857(b)(2)(B) of the Internal Revenue Code for
1505	1505
1506	1506
1507	1507
1508	1508
1509	1509
1510	1510	HB3088 - 41 - LRB103 05738 HLH 50758 b
1511	1511
1512	1512
1513	1513	HB3088- 42 -LRB103 05738 HLH 50758 b HB3088 - 42 - LRB103 05738 HLH 50758 b
1514	1514	HB3088 - 42 - LRB103 05738 HLH 50758 b
1515	1515	1 dividends paid;
1516	1516	2 (E-16) An amount equal to the credit allowable to
1517	1517	3 the taxpayer under Section 218(a) of this Act,
1518	1518	4 determined without regard to Section 218(c) of this
1519	1519	5 Act;
1520	1520	6 (E-17) For taxable years ending on or after
1521	1521	7 December 31, 2017, an amount equal to the deduction
1522	1522	8 allowed under Section 199 of the Internal Revenue Code
1523	1523	9 for the taxable year;
1524	1524	10 (E-18) for taxable years beginning after December
1525	1525	11 31, 2018, an amount equal to the deduction allowed
1526	1526	12 under Section 250(a)(1)(A) of the Internal Revenue
1527	1527	13 Code for the taxable year;
1528	1528	14 (E-19) for taxable years ending on or after June
1529	1529	15 30, 2021, an amount equal to the deduction allowed
1530	1530	16 under Section 250(a)(1)(B)(i) of the Internal Revenue
1531	1531	17 Code for the taxable year;
1532	1532	18 (E-20) for taxable years ending on or after June
1533	1533	19 30, 2021, an amount equal to the deduction allowed
1534	1534	20 under Sections 243(e) and 245A(a) of the Internal
1535	1535	21 Revenue Code for the taxable year.
1536	1536	22 and by deducting from the total so obtained the sum of the
1537	1537	23 following amounts:
1538	1538	24 (F) An amount equal to the amount of any tax
1539	1539	25 imposed by this Act which was refunded to the taxpayer
1540	1540	26 and included in such total for the taxable year;
1541	1541
1542	1542
1543	1543
1544	1544
1545	1545
1546	1546	HB3088 - 42 - LRB103 05738 HLH 50758 b
1547	1547
1548	1548
1549	1549	HB3088- 43 -LRB103 05738 HLH 50758 b HB3088 - 43 - LRB103 05738 HLH 50758 b
1550	1550	HB3088 - 43 - LRB103 05738 HLH 50758 b
1551	1551	1 (G) An amount equal to any amount included in such
1552	1552	2 total under Section 78 of the Internal Revenue Code;
1553	1553	3 (H) In the case of a regulated investment company,
1554	1554	4 an amount equal to the amount of exempt interest
1555	1555	5 dividends as defined in subsection (b)(5) of Section
1556	1556	6 852 of the Internal Revenue Code, paid to shareholders
1557	1557	7 for the taxable year;
1558	1558	8 (I) With the exception of any amounts subtracted
1559	1559	9 under subparagraph (J), an amount equal to the sum of
1560	1560	10 all amounts disallowed as deductions by (i) Sections
1561	1561	11 171(a)(2) and 265(a)(2) and amounts disallowed as
1562	1562	12 interest expense by Section 291(a)(3) of the Internal
1563	1563	13 Revenue Code, and all amounts of expenses allocable to
1564	1564	14 interest and disallowed as deductions by Section
1565	1565	15 265(a)(1) of the Internal Revenue Code; and (ii) for
1566	1566	16 taxable years ending on or after August 13, 1999,
1567	1567	17 Sections 171(a)(2), 265, 280C, 291(a)(3), and
1568	1568	18 832(b)(5)(B)(i) of the Internal Revenue Code, plus,
1569	1569	19 for tax years ending on or after December 31, 2011,
1570	1570	20 amounts disallowed as deductions by Section 45G(e)(3)
1571	1571	21 of the Internal Revenue Code and, for taxable years
1572	1572	22 ending on or after December 31, 2008, any amount
1573	1573	23 included in gross income under Section 87 of the
1574	1574	24 Internal Revenue Code and the policyholders' share of
1575	1575	25 tax-exempt interest of a life insurance company under
1576	1576	26 Section 807(a)(2)(B) of the Internal Revenue Code (in
1577	1577
1578	1578
1579	1579
1580	1580
1581	1581
1582	1582	HB3088 - 43 - LRB103 05738 HLH 50758 b
1583	1583
1584	1584
1585	1585	HB3088- 44 -LRB103 05738 HLH 50758 b HB3088 - 44 - LRB103 05738 HLH 50758 b
1586	1586	HB3088 - 44 - LRB103 05738 HLH 50758 b
1587	1587	1 the case of a life insurance company with gross income
1588	1588	2 from a decrease in reserves for the tax year) or
1589	1589	3 Section 807(b)(1)(B) of the Internal Revenue Code (in
1590	1590	4 the case of a life insurance company allowed a
1591	1591	5 deduction for an increase in reserves for the tax
1592	1592	6 year); the provisions of this subparagraph are exempt
1593	1593	7 from the provisions of Section 250;
1594	1594	8 (J) An amount equal to all amounts included in
1595	1595	9 such total which are exempt from taxation by this
1596	1596	10 State either by reason of its statutes or Constitution
1597	1597	11 or by reason of the Constitution, treaties or statutes
1598	1598	12 of the United States; provided that, in the case of any
1599	1599	13 statute of this State that exempts income derived from
1600	1600	14 bonds or other obligations from the tax imposed under
1601	1601	15 this Act, the amount exempted shall be the interest
1602	1602	16 net of bond premium amortization;
1603	1603	17 (K) An amount equal to those dividends included in
1604	1604	18 such total which were paid by a corporation which
1605	1605	19 conducts business operations in a River Edge
1606	1606	20 Redevelopment Zone or zones created under the River
1607	1607	21 Edge Redevelopment Zone Act and conducts substantially
1608	1608	22 all of its operations in a River Edge Redevelopment
1609	1609	23 Zone or zones. This subparagraph (K) is exempt from
1610	1610	24 the provisions of Section 250;
1611	1611	25 (L) An amount equal to those dividends included in
1612	1612	26 such total that were paid by a corporation that
1613	1613
1614	1614
1615	1615
1616	1616
1617	1617
1618	1618	HB3088 - 44 - LRB103 05738 HLH 50758 b
1619	1619
1620	1620
1621	1621	HB3088- 45 -LRB103 05738 HLH 50758 b HB3088 - 45 - LRB103 05738 HLH 50758 b
1622	1622	HB3088 - 45 - LRB103 05738 HLH 50758 b
1623	1623	1 conducts business operations in a federally designated
1624	1624	2 Foreign Trade Zone or Sub-Zone and that is designated
1625	1625	3 a High Impact Business located in Illinois; provided
1626	1626	4 that dividends eligible for the deduction provided in
1627	1627	5 subparagraph (K) of paragraph 2 of this subsection
1628	1628	6 shall not be eligible for the deduction provided under
1629	1629	7 this subparagraph (L);
1630	1630	8 (M) For any taxpayer that is a financial
1631	1631	9 organization within the meaning of Section 304(c) of
1632	1632	10 this Act, an amount included in such total as interest
1633	1633	11 income from a loan or loans made by such taxpayer to a
1634	1634	12 borrower, to the extent that such a loan is secured by
1635	1635	13 property which is eligible for the River Edge
1636	1636	14 Redevelopment Zone Investment Credit. To determine the
1637	1637	15 portion of a loan or loans that is secured by property
1638	1638	16 eligible for a Section 201(f) investment credit to the
1639	1639	17 borrower, the entire principal amount of the loan or
1640	1640	18 loans between the taxpayer and the borrower should be
1641	1641	19 divided into the basis of the Section 201(f)
1642	1642	20 investment credit property which secures the loan or
1643	1643	21 loans, using for this purpose the original basis of
1644	1644	22 such property on the date that it was placed in service
1645	1645	23 in the River Edge Redevelopment Zone. The subtraction
1646	1646	24 modification available to the taxpayer in any year
1647	1647	25 under this subsection shall be that portion of the
1648	1648	26 total interest paid by the borrower with respect to
1649	1649
1650	1650
1651	1651
1652	1652
1653	1653
1654	1654	HB3088 - 45 - LRB103 05738 HLH 50758 b
1655	1655
1656	1656
1657	1657	HB3088- 46 -LRB103 05738 HLH 50758 b HB3088 - 46 - LRB103 05738 HLH 50758 b
1658	1658	HB3088 - 46 - LRB103 05738 HLH 50758 b
1659	1659	1 such loan attributable to the eligible property as
1660	1660	2 calculated under the previous sentence. This
1661	1661	3 subparagraph (M) is exempt from the provisions of
1662	1662	4 Section 250;
1663	1663	5 (M-1) For any taxpayer that is a financial
1664	1664	6 organization within the meaning of Section 304(c) of
1665	1665	7 this Act, an amount included in such total as interest
1666	1666	8 income from a loan or loans made by such taxpayer to a
1667	1667	9 borrower, to the extent that such a loan is secured by
1668	1668	10 property which is eligible for the High Impact
1669	1669	11 Business Investment Credit. To determine the portion
1670	1670	12 of a loan or loans that is secured by property eligible
1671	1671	13 for a Section 201(h) investment credit to the
1672	1672	14 borrower, the entire principal amount of the loan or
1673	1673	15 loans between the taxpayer and the borrower should be
1674	1674	16 divided into the basis of the Section 201(h)
1675	1675	17 investment credit property which secures the loan or
1676	1676	18 loans, using for this purpose the original basis of
1677	1677	19 such property on the date that it was placed in service
1678	1678	20 in a federally designated Foreign Trade Zone or
1679	1679	21 Sub-Zone located in Illinois. No taxpayer that is
1680	1680	22 eligible for the deduction provided in subparagraph
1681	1681	23 (M) of paragraph (2) of this subsection shall be
1682	1682	24 eligible for the deduction provided under this
1683	1683	25 subparagraph (M-1). The subtraction modification
1684	1684	26 available to taxpayers in any year under this
1685	1685
1686	1686
1687	1687
1688	1688
1689	1689
1690	1690	HB3088 - 46 - LRB103 05738 HLH 50758 b
1691	1691
1692	1692
1693	1693	HB3088- 47 -LRB103 05738 HLH 50758 b HB3088 - 47 - LRB103 05738 HLH 50758 b
1694	1694	HB3088 - 47 - LRB103 05738 HLH 50758 b
1695	1695	1 subsection shall be that portion of the total interest
1696	1696	2 paid by the borrower with respect to such loan
1697	1697	3 attributable to the eligible property as calculated
1698	1698	4 under the previous sentence;
1699	1699	5 (N) Two times any contribution made during the
1700	1700	6 taxable year to a designated zone organization to the
1701	1701	7 extent that the contribution (i) qualifies as a
1702	1702	8 charitable contribution under subsection (c) of
1703	1703	9 Section 170 of the Internal Revenue Code and (ii)
1704	1704	10 must, by its terms, be used for a project approved by
1705	1705	11 the Department of Commerce and Economic Opportunity
1706	1706	12 under Section 11 of the Illinois Enterprise Zone Act
1707	1707	13 or under Section 10-10 of the River Edge Redevelopment
1708	1708	14 Zone Act. This subparagraph (N) is exempt from the
1709	1709	15 provisions of Section 250;
1710	1710	16 (O) An amount equal to: (i) 85% for taxable years
1711	1711	17 ending on or before December 31, 1992, or, a
1712	1712	18 percentage equal to the percentage allowable under
1713	1713	19 Section 243(a)(1) of the Internal Revenue Code of 1986
1714	1714	20 for taxable years ending after December 31, 1992, of
1715	1715	21 the amount by which dividends included in taxable
1716	1716	22 income and received from a corporation that is not
1717	1717	23 created or organized under the laws of the United
1718	1718	24 States or any state or political subdivision thereof,
1719	1719	25 including, for taxable years ending on or after
1720	1720	26 December 31, 1988, dividends received or deemed
1721	1721
1722	1722
1723	1723
1724	1724
1725	1725
1726	1726	HB3088 - 47 - LRB103 05738 HLH 50758 b
1727	1727
1728	1728
1729	1729	HB3088- 48 -LRB103 05738 HLH 50758 b HB3088 - 48 - LRB103 05738 HLH 50758 b
1730	1730	HB3088 - 48 - LRB103 05738 HLH 50758 b
1731	1731	1 received or paid or deemed paid under Sections 951
1732	1732	2 through 965 of the Internal Revenue Code, exceed the
1733	1733	3 amount of the modification provided under subparagraph
1734	1734	4 (G) of paragraph (2) of this subsection (b) which is
1735	1735	5 related to such dividends, and including, for taxable
1736	1736	6 years ending on or after December 31, 2008, dividends
1737	1737	7 received from a captive real estate investment trust;
1738	1738	8 plus (ii) 100% of the amount by which dividends,
1739	1739	9 included in taxable income and received, including,
1740	1740	10 for taxable years ending on or after December 31,
1741	1741	11 1988, dividends received or deemed received or paid or
1742	1742	12 deemed paid under Sections 951 through 964 of the
1743	1743	13 Internal Revenue Code and including, for taxable years
1744	1744	14 ending on or after December 31, 2008, dividends
1745	1745	15 received from a captive real estate investment trust,
1746	1746	16 from any such corporation specified in clause (i) that
1747	1747	17 would but for the provisions of Section 1504(b)(3) of
1748	1748	18 the Internal Revenue Code be treated as a member of the
1749	1749	19 affiliated group which includes the dividend
1750	1750	20 recipient, exceed the amount of the modification
1751	1751	21 provided under subparagraph (G) of paragraph (2) of
1752	1752	22 this subsection (b) which is related to such
1753	1753	23 dividends. For taxable years ending on or after June
1754	1754	24 30, 2021, (i) for purposes of this subparagraph, the
1755	1755	25 term "dividend" does not include any amount treated as
1756	1756	26 a dividend under Section 1248 of the Internal Revenue
1757	1757
1758	1758
1759	1759
1760	1760
1761	1761
1762	1762	HB3088 - 48 - LRB103 05738 HLH 50758 b
1763	1763
1764	1764
1765	1765	HB3088- 49 -LRB103 05738 HLH 50758 b HB3088 - 49 - LRB103 05738 HLH 50758 b
1766	1766	HB3088 - 49 - LRB103 05738 HLH 50758 b
1767	1767	1 Code, and (ii) this subparagraph shall not apply to
1768	1768	2 dividends for which a deduction is allowed under
1769	1769	3 Section 245(a) of the Internal Revenue Code. This
1770	1770	4 subparagraph (O) is exempt from the provisions of
1771	1771	5 Section 250 of this Act;
1772	1772	6 (P) An amount equal to any contribution made to a
1773	1773	7 job training project established pursuant to the Tax
1774	1774	8 Increment Allocation Redevelopment Act;
1775	1775	9 (Q) An amount equal to the amount of the deduction
1776	1776	10 used to compute the federal income tax credit for
1777	1777	11 restoration of substantial amounts held under claim of
1778	1778	12 right for the taxable year pursuant to Section 1341 of
1779	1779	13 the Internal Revenue Code;
1780	1780	14 (R) On and after July 20, 1999, in the case of an
1781	1781	15 attorney-in-fact with respect to whom an interinsurer
1782	1782	16 or a reciprocal insurer has made the election under
1783	1783	17 Section 835 of the Internal Revenue Code, 26 U.S.C.
1784	1784	18 835, an amount equal to the excess, if any, of the
1785	1785	19 amounts paid or incurred by that interinsurer or
1786	1786	20 reciprocal insurer in the taxable year to the
1787	1787	21 attorney-in-fact over the deduction allowed to that
1788	1788	22 interinsurer or reciprocal insurer with respect to the
1789	1789	23 attorney-in-fact under Section 835(b) of the Internal
1790	1790	24 Revenue Code for the taxable year; the provisions of
1791	1791	25 this subparagraph are exempt from the provisions of
1792	1792	26 Section 250;
1793	1793
1794	1794
1795	1795
1796	1796
1797	1797
1798	1798	HB3088 - 49 - LRB103 05738 HLH 50758 b
1799	1799
1800	1800
1801	1801	HB3088- 50 -LRB103 05738 HLH 50758 b HB3088 - 50 - LRB103 05738 HLH 50758 b
1802	1802	HB3088 - 50 - LRB103 05738 HLH 50758 b
1803	1803	1 (S) For taxable years ending on or after December
1804	1804	2 31, 1997, in the case of a Subchapter S corporation, an
1805	1805	3 amount equal to all amounts of income allocable to a
1806	1806	4 shareholder subject to the Personal Property Tax
1807	1807	5 Replacement Income Tax imposed by subsections (c) and
1808	1808	6 (d) of Section 201 of this Act, including amounts
1809	1809	7 allocable to organizations exempt from federal income
1810	1810	8 tax by reason of Section 501(a) of the Internal
1811	1811	9 Revenue Code. This subparagraph (S) is exempt from the
1812	1812	10 provisions of Section 250;
1813	1813	11 (T) For taxable years 2001 and thereafter, for the
1814	1814	12 taxable year in which the bonus depreciation deduction
1815	1815	13 is taken on the taxpayer's federal income tax return
1816	1816	14 under subsection (k) of Section 168 of the Internal
1817	1817	15 Revenue Code and for each applicable taxable year
1818	1818	16 thereafter, an amount equal to "x", where:
1819	1819	17 (1) "y" equals the amount of the depreciation
1820	1820	18 deduction taken for the taxable year on the
1821	1821	19 taxpayer's federal income tax return on property
1822	1822	20 for which the bonus depreciation deduction was
1823	1823	21 taken in any year under subsection (k) of Section
1824	1824	22 168 of the Internal Revenue Code, but not
1825	1825	23 including the bonus depreciation deduction;
1826	1826	24 (2) for taxable years ending on or before
1827	1827	25 December 31, 2005, "x" equals "y" multiplied by 30
1828	1828	26 and then divided by 70 (or "y" multiplied by
1829	1829
1830	1830
1831	1831
1832	1832
1833	1833
1834	1834	HB3088 - 50 - LRB103 05738 HLH 50758 b
1835	1835
1836	1836
1837	1837	HB3088- 51 -LRB103 05738 HLH 50758 b HB3088 - 51 - LRB103 05738 HLH 50758 b
1838	1838	HB3088 - 51 - LRB103 05738 HLH 50758 b
1839	1839	1 0.429); and
1840	1840	2 (3) for taxable years ending after December
1841	1841	3 31, 2005:
1842	1842	4 (i) for property on which a bonus
1843	1843	5 depreciation deduction of 30% of the adjusted
1844	1844	6 basis was taken, "x" equals "y" multiplied by
1845	1845	7 30 and then divided by 70 (or "y" multiplied
1846	1846	8 by 0.429);
1847	1847	9 (ii) for property on which a bonus
1848	1848	10 depreciation deduction of 50% of the adjusted
1849	1849	11 basis was taken, "x" equals "y" multiplied by
1850	1850	12 1.0;
1851	1851	13 (iii) for property on which a bonus
1852	1852	14 depreciation deduction of 100% of the adjusted
1853	1853	15 basis was taken in a taxable year ending on or
1854	1854	16 after December 31, 2021, "x" equals the
1855	1855	17 depreciation deduction that would be allowed
1856	1856	18 on that property if the taxpayer had made the
1857	1857	19 election under Section 168(k)(7) of the
1858	1858	20 Internal Revenue Code to not claim bonus
1859	1859	21 depreciation on that property; and
1860	1860	22 (iv) for property on which a bonus
1861	1861	23 depreciation deduction of a percentage other
1862	1862	24 than 30%, 50% or 100% of the adjusted basis
1863	1863	25 was taken in a taxable year ending on or after
1864	1864	26 December 31, 2021, "x" equals "y" multiplied
1865	1865
1866	1866
1867	1867
1868	1868
1869	1869
1870	1870	HB3088 - 51 - LRB103 05738 HLH 50758 b
1871	1871
1872	1872
1873	1873	HB3088- 52 -LRB103 05738 HLH 50758 b HB3088 - 52 - LRB103 05738 HLH 50758 b
1874	1874	HB3088 - 52 - LRB103 05738 HLH 50758 b
1875	1875	1 by 100 times the percentage bonus depreciation
1876	1876	2 on the property (that is, 100(bonus%)) and
1877	1877	3 then divided by 100 times 1 minus the
1878	1878	4 percentage bonus depreciation on the property
1879	1879	5 (that is, 100(1bonus%)).
1880	1880	6 The aggregate amount deducted under this
1881	1881	7 subparagraph in all taxable years for any one piece of
1882	1882	8 property may not exceed the amount of the bonus
1883	1883	9 depreciation deduction taken on that property on the
1884	1884	10 taxpayer's federal income tax return under subsection
1885	1885	11 (k) of Section 168 of the Internal Revenue Code. This
1886	1886	12 subparagraph (T) is exempt from the provisions of
1887	1887	13 Section 250;
1888	1888	14 (U) If the taxpayer sells, transfers, abandons, or
1889	1889	15 otherwise disposes of property for which the taxpayer
1890	1890	16 was required in any taxable year to make an addition
1891	1891	17 modification under subparagraph (E-10), then an amount
1892	1892	18 equal to that addition modification.
1893	1893	19 If the taxpayer continues to own property through
1894	1894	20 the last day of the last tax year for which a
1895	1895	21 subtraction is allowed with respect to that property
1896	1896	22 under subparagraph (T) and for which the taxpayer was
1897	1897	23 required in any taxable year to make an addition
1898	1898	24 modification under subparagraph (E-10), then an amount
1899	1899	25 equal to that addition modification.
1900	1900	26 The taxpayer is allowed to take the deduction
1901	1901
1902	1902
1903	1903
1904	1904
1905	1905
1906	1906	HB3088 - 52 - LRB103 05738 HLH 50758 b
1907	1907
1908	1908
1909	1909	HB3088- 53 -LRB103 05738 HLH 50758 b HB3088 - 53 - LRB103 05738 HLH 50758 b
1910	1910	HB3088 - 53 - LRB103 05738 HLH 50758 b
1911	1911	1 under this subparagraph only once with respect to any
1912	1912	2 one piece of property.
1913	1913	3 This subparagraph (U) is exempt from the
1914	1914	4 provisions of Section 250;
1915	1915	5 (V) The amount of: (i) any interest income (net of
1916	1916	6 the deductions allocable thereto) taken into account
1917	1917	7 for the taxable year with respect to a transaction
1918	1918	8 with a taxpayer that is required to make an addition
1919	1919	9 modification with respect to such transaction under
1920	1920	10 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
1921	1921	11 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
1922	1922	12 the amount of such addition modification, (ii) any
1923	1923	13 income from intangible property (net of the deductions
1924	1924	14 allocable thereto) taken into account for the taxable
1925	1925	15 year with respect to a transaction with a taxpayer
1926	1926	16 that is required to make an addition modification with
1927	1927	17 respect to such transaction under Section
1928	1928	18 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
1929	1929	19 203(d)(2)(D-8), but not to exceed the amount of such
1930	1930	20 addition modification, and (iii) any insurance premium
1931	1931	21 income (net of deductions allocable thereto) taken
1932	1932	22 into account for the taxable year with respect to a
1933	1933	23 transaction with a taxpayer that is required to make
1934	1934	24 an addition modification with respect to such
1935	1935	25 transaction under Section 203(a)(2)(D-19), Section
1936	1936	26 203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
1937	1937
1938	1938
1939	1939
1940	1940
1941	1941
1942	1942	HB3088 - 53 - LRB103 05738 HLH 50758 b
1943	1943
1944	1944
1945	1945	HB3088- 54 -LRB103 05738 HLH 50758 b HB3088 - 54 - LRB103 05738 HLH 50758 b
1946	1946	HB3088 - 54 - LRB103 05738 HLH 50758 b
1947	1947	1 203(d)(2)(D-9), but not to exceed the amount of that
1948	1948	2 addition modification. This subparagraph (V) is exempt
1949	1949	3 from the provisions of Section 250;
1950	1950	4 (W) An amount equal to the interest income taken
1951	1951	5 into account for the taxable year (net of the
1952	1952	6 deductions allocable thereto) with respect to
1953	1953	7 transactions with (i) a foreign person who would be a
1954	1954	8 member of the taxpayer's unitary business group but
1955	1955	9 for the fact that the foreign person's business
1956	1956	10 activity outside the United States is 80% or more of
1957	1957	11 that person's total business activity and (ii) for
1958	1958	12 taxable years ending on or after December 31, 2008, to
1959	1959	13 a person who would be a member of the same unitary
1960	1960	14 business group but for the fact that the person is
1961	1961	15 prohibited under Section 1501(a)(27) from being
1962	1962	16 included in the unitary business group because he or
1963	1963	17 she is ordinarily required to apportion business
1964	1964	18 income under different subsections of Section 304, but
1965	1965	19 not to exceed the addition modification required to be
1966	1966	20 made for the same taxable year under Section
1967	1967	21 203(b)(2)(E-12) for interest paid, accrued, or
1968	1968	22 incurred, directly or indirectly, to the same person.
1969	1969	23 This subparagraph (W) is exempt from the provisions of
1970	1970	24 Section 250;
1971	1971	25 (X) An amount equal to the income from intangible
1972	1972	26 property taken into account for the taxable year (net
1973	1973
1974	1974
1975	1975
1976	1976
1977	1977
1978	1978	HB3088 - 54 - LRB103 05738 HLH 50758 b
1979	1979
1980	1980
1981	1981	HB3088- 55 -LRB103 05738 HLH 50758 b HB3088 - 55 - LRB103 05738 HLH 50758 b
1982	1982	HB3088 - 55 - LRB103 05738 HLH 50758 b
1983	1983	1 of the deductions allocable thereto) with respect to
1984	1984	2 transactions with (i) a foreign person who would be a
1985	1985	3 member of the taxpayer's unitary business group but
1986	1986	4 for the fact that the foreign person's business
1987	1987	5 activity outside the United States is 80% or more of
1988	1988	6 that person's total business activity and (ii) for
1989	1989	7 taxable years ending on or after December 31, 2008, to
1990	1990	8 a person who would be a member of the same unitary
1991	1991	9 business group but for the fact that the person is
1992	1992	10 prohibited under Section 1501(a)(27) from being
1993	1993	11 included in the unitary business group because he or
1994	1994	12 she is ordinarily required to apportion business
1995	1995	13 income under different subsections of Section 304, but
1996	1996	14 not to exceed the addition modification required to be
1997	1997	15 made for the same taxable year under Section
1998	1998	16 203(b)(2)(E-13) for intangible expenses and costs
1999	1999	17 paid, accrued, or incurred, directly or indirectly, to
2000	2000	18 the same foreign person. This subparagraph (X) is
2001	2001	19 exempt from the provisions of Section 250;
2002	2002	20 (Y) For taxable years ending on or after December
2003	2003	21 31, 2011, in the case of a taxpayer who was required to
2004	2004	22 add back any insurance premiums under Section
2005	2005	23 203(b)(2)(E-14), such taxpayer may elect to subtract
2006	2006	24 that part of a reimbursement received from the
2007	2007	25 insurance company equal to the amount of the expense
2008	2008	26 or loss (including expenses incurred by the insurance
2009	2009
2010	2010
2011	2011
2012	2012
2013	2013
2014	2014	HB3088 - 55 - LRB103 05738 HLH 50758 b
2015	2015
2016	2016
2017	2017	HB3088- 56 -LRB103 05738 HLH 50758 b HB3088 - 56 - LRB103 05738 HLH 50758 b
2018	2018	HB3088 - 56 - LRB103 05738 HLH 50758 b
2019	2019	1 company) that would have been taken into account as a
2020	2020	2 deduction for federal income tax purposes if the
2021	2021	3 expense or loss had been uninsured. If a taxpayer
2022	2022	4 makes the election provided for by this subparagraph
2023	2023	5 (Y), the insurer to which the premiums were paid must
2024	2024	6 add back to income the amount subtracted by the
2025	2025	7 taxpayer pursuant to this subparagraph (Y). This
2026	2026	8 subparagraph (Y) is exempt from the provisions of
2027	2027	9 Section 250; and
2028	2028	10 (Z) The difference between the nondeductible
2029	2029	11 controlled foreign corporation dividends under Section
2030	2030	12 965(e)(3) of the Internal Revenue Code over the
2031	2031	13 taxable income of the taxpayer, computed without
2032	2032	14 regard to Section 965(e)(2)(A) of the Internal Revenue
2033	2033	15 Code, and without regard to any net operating loss
2034	2034	16 deduction. This subparagraph (Z) is exempt from the
2035	2035	17 provisions of Section 250.
2036	2036	18 (3) Special rule. For purposes of paragraph (2)(A),
2037	2037	19 "gross income" in the case of a life insurance company,
2038	2038	20 for tax years ending on and after December 31, 1994, and
2039	2039	21 prior to December 31, 2011, shall mean the gross
2040	2040	22 investment income for the taxable year and, for tax years
2041	2041	23 ending on or after December 31, 2011, shall mean all
2042	2042	24 amounts included in life insurance gross income under
2043	2043	25 Section 803(a)(3) of the Internal Revenue Code.
2044	2044
2045	2045
2046	2046
2047	2047
2048	2048
2049	2049	HB3088 - 56 - LRB103 05738 HLH 50758 b
2050	2050
2051	2051
2052	2052	HB3088- 57 -LRB103 05738 HLH 50758 b HB3088 - 57 - LRB103 05738 HLH 50758 b
2053	2053	HB3088 - 57 - LRB103 05738 HLH 50758 b
2054	2054	1 (c) Trusts and estates.
2055	2055	2 (1) In general. In the case of a trust or estate, base
2056	2056	3 income means an amount equal to the taxpayer's taxable
2057	2057	4 income for the taxable year as modified by paragraph (2).
2058	2058	5 (2) Modifications. Subject to the provisions of
2059	2059	6 paragraph (3), the taxable income referred to in paragraph
2060	2060	7 (1) shall be modified by adding thereto the sum of the
2061	2061	8 following amounts:
2062	2062	9 (A) An amount equal to all amounts paid or accrued
2063	2063	10 to the taxpayer as interest or dividends during the
2064	2064	11 taxable year to the extent excluded from gross income
2065	2065	12 in the computation of taxable income;
2066	2066	13 (B) In the case of (i) an estate, $600; (ii) a
2067	2067	14 trust which, under its governing instrument, is
2068	2068	15 required to distribute all of its income currently,
2069	2069	16 $300; and (iii) any other trust, $100, but in each such
2070	2070	17 case, only to the extent such amount was deducted in
2071	2071	18 the computation of taxable income;
2072	2072	19 (C) An amount equal to the amount of tax imposed by
2073	2073	20 this Act to the extent deducted from gross income in
2074	2074	21 the computation of taxable income for the taxable
2075	2075	22 year;
2076	2076	23 (D) The amount of any net operating loss deduction
2077	2077	24 taken in arriving at taxable income, other than a net
2078	2078	25 operating loss carried forward from a taxable year
2079	2079	26 ending prior to December 31, 1986;
2080	2080
2081	2081
2082	2082
2083	2083
2084	2084
2085	2085	HB3088 - 57 - LRB103 05738 HLH 50758 b
2086	2086
2087	2087
2088	2088	HB3088- 58 -LRB103 05738 HLH 50758 b HB3088 - 58 - LRB103 05738 HLH 50758 b
2089	2089	HB3088 - 58 - LRB103 05738 HLH 50758 b
2090	2090	1 (E) For taxable years in which a net operating
2091	2091	2 loss carryback or carryforward from a taxable year
2092	2092	3 ending prior to December 31, 1986 is an element of
2093	2093	4 taxable income under paragraph (1) of subsection (e)
2094	2094	5 or subparagraph (E) of paragraph (2) of subsection
2095	2095	6 (e), the amount by which addition modifications other
2096	2096	7 than those provided by this subparagraph (E) exceeded
2097	2097	8 subtraction modifications in such taxable year, with
2098	2098	9 the following limitations applied in the order that
2099	2099	10 they are listed:
2100	2100	11 (i) the addition modification relating to the
2101	2101	12 net operating loss carried back or forward to the
2102	2102	13 taxable year from any taxable year ending prior to
2103	2103	14 December 31, 1986 shall be reduced by the amount
2104	2104	15 of addition modification under this subparagraph
2105	2105	16 (E) which related to that net operating loss and
2106	2106	17 which was taken into account in calculating the
2107	2107	18 base income of an earlier taxable year, and
2108	2108	19 (ii) the addition modification relating to the
2109	2109	20 net operating loss carried back or forward to the
2110	2110	21 taxable year from any taxable year ending prior to
2111	2111	22 December 31, 1986 shall not exceed the amount of
2112	2112	23 such carryback or carryforward;
2113	2113	24 For taxable years in which there is a net
2114	2114	25 operating loss carryback or carryforward from more
2115	2115	26 than one other taxable year ending prior to December
2116	2116
2117	2117
2118	2118
2119	2119
2120	2120
2121	2121	HB3088 - 58 - LRB103 05738 HLH 50758 b
2122	2122
2123	2123
2124	2124	HB3088- 59 -LRB103 05738 HLH 50758 b HB3088 - 59 - LRB103 05738 HLH 50758 b
2125	2125	HB3088 - 59 - LRB103 05738 HLH 50758 b
2126	2126	1 31, 1986, the addition modification provided in this
2127	2127	2 subparagraph (E) shall be the sum of the amounts
2128	2128	3 computed independently under the preceding provisions
2129	2129	4 of this subparagraph (E) for each such taxable year;
2130	2130	5 (F) For taxable years ending on or after January
2131	2131	6 1, 1989, an amount equal to the tax deducted pursuant
2132	2132	7 to Section 164 of the Internal Revenue Code if the
2133	2133	8 trust or estate is claiming the same tax for purposes
2134	2134	9 of the Illinois foreign tax credit under Section 601
2135	2135	10 of this Act;
2136	2136	11 (G) An amount equal to the amount of the capital
2137	2137	12 gain deduction allowable under the Internal Revenue
2138	2138	13 Code, to the extent deducted from gross income in the
2139	2139	14 computation of taxable income;
2140	2140	15 (G-5) For taxable years ending after December 31,
2141	2141	16 1997, an amount equal to any eligible remediation
2142	2142	17 costs that the trust or estate deducted in computing
2143	2143	18 adjusted gross income and for which the trust or
2144	2144	19 estate claims a credit under subsection (l) of Section
2145	2145	20 201;
2146	2146	21 (G-10) For taxable years 2001 and thereafter, an
2147	2147	22 amount equal to the bonus depreciation deduction taken
2148	2148	23 on the taxpayer's federal income tax return for the
2149	2149	24 taxable year under subsection (k) of Section 168 of
2150	2150	25 the Internal Revenue Code; and
2151	2151	26 (G-11) If the taxpayer sells, transfers, abandons,
2152	2152
2153	2153
2154	2154
2155	2155
2156	2156
2157	2157	HB3088 - 59 - LRB103 05738 HLH 50758 b
2158	2158
2159	2159
2160	2160	HB3088- 60 -LRB103 05738 HLH 50758 b HB3088 - 60 - LRB103 05738 HLH 50758 b
2161	2161	HB3088 - 60 - LRB103 05738 HLH 50758 b
2162	2162	1 or otherwise disposes of property for which the
2163	2163	2 taxpayer was required in any taxable year to make an
2164	2164	3 addition modification under subparagraph (G-10), then
2165	2165	4 an amount equal to the aggregate amount of the
2166	2166	5 deductions taken in all taxable years under
2167	2167	6 subparagraph (R) with respect to that property.
2168	2168	7 If the taxpayer continues to own property through
2169	2169	8 the last day of the last tax year for which a
2170	2170	9 subtraction is allowed with respect to that property
2171	2171	10 under subparagraph (R) and for which the taxpayer was
2172	2172	11 allowed in any taxable year to make a subtraction
2173	2173	12 modification under subparagraph (R), then an amount
2174	2174	13 equal to that subtraction modification.
2175	2175	14 The taxpayer is required to make the addition
2176	2176	15 modification under this subparagraph only once with
2177	2177	16 respect to any one piece of property;
2178	2178	17 (G-12) An amount equal to the amount otherwise
2179	2179	18 allowed as a deduction in computing base income for
2180	2180	19 interest paid, accrued, or incurred, directly or
2181	2181	20 indirectly, (i) for taxable years ending on or after
2182	2182	21 December 31, 2004, to a foreign person who would be a
2183	2183	22 member of the same unitary business group but for the
2184	2184	23 fact that the foreign person's business activity
2185	2185	24 outside the United States is 80% or more of the foreign
2186	2186	25 person's total business activity and (ii) for taxable
2187	2187	26 years ending on or after December 31, 2008, to a person
2188	2188
2189	2189
2190	2190
2191	2191
2192	2192
2193	2193	HB3088 - 60 - LRB103 05738 HLH 50758 b
2194	2194
2195	2195
2196	2196	HB3088- 61 -LRB103 05738 HLH 50758 b HB3088 - 61 - LRB103 05738 HLH 50758 b
2197	2197	HB3088 - 61 - LRB103 05738 HLH 50758 b
2198	2198	1 who would be a member of the same unitary business
2199	2199	2 group but for the fact that the person is prohibited
2200	2200	3 under Section 1501(a)(27) from being included in the
2201	2201	4 unitary business group because he or she is ordinarily
2202	2202	5 required to apportion business income under different
2203	2203	6 subsections of Section 304. The addition modification
2204	2204	7 required by this subparagraph shall be reduced to the
2205	2205	8 extent that dividends were included in base income of
2206	2206	9 the unitary group for the same taxable year and
2207	2207	10 received by the taxpayer or by a member of the
2208	2208	11 taxpayer's unitary business group (including amounts
2209	2209	12 included in gross income pursuant to Sections 951
2210	2210	13 through 964 of the Internal Revenue Code and amounts
2211	2211	14 included in gross income under Section 78 of the
2212	2212	15 Internal Revenue Code) with respect to the stock of
2213	2213	16 the same person to whom the interest was paid,
2214	2214	17 accrued, or incurred.
2215	2215	18 This paragraph shall not apply to the following:
2216	2216	19 (i) an item of interest paid, accrued, or
2217	2217	20 incurred, directly or indirectly, to a person who
2218	2218	21 is subject in a foreign country or state, other
2219	2219	22 than a state which requires mandatory unitary
2220	2220	23 reporting, to a tax on or measured by net income
2221	2221	24 with respect to such interest; or
2222	2222	25 (ii) an item of interest paid, accrued, or
2223	2223	26 incurred, directly or indirectly, to a person if
2224	2224
2225	2225
2226	2226
2227	2227
2228	2228
2229	2229	HB3088 - 61 - LRB103 05738 HLH 50758 b
2230	2230
2231	2231
2232	2232	HB3088- 62 -LRB103 05738 HLH 50758 b HB3088 - 62 - LRB103 05738 HLH 50758 b
2233	2233	HB3088 - 62 - LRB103 05738 HLH 50758 b
2234	2234	1 the taxpayer can establish, based on a
2235	2235	2 preponderance of the evidence, both of the
2236	2236	3 following:
2237	2237	4 (a) the person, during the same taxable
2238	2238	5 year, paid, accrued, or incurred, the interest
2239	2239	6 to a person that is not a related member, and
2240	2240	7 (b) the transaction giving rise to the
2241	2241	8 interest expense between the taxpayer and the
2242	2242	9 person did not have as a principal purpose the
2243	2243	10 avoidance of Illinois income tax, and is paid
2244	2244	11 pursuant to a contract or agreement that
2245	2245	12 reflects an arm's-length interest rate and
2246	2246	13 terms; or
2247	2247	14 (iii) the taxpayer can establish, based on
2248	2248	15 clear and convincing evidence, that the interest
2249	2249	16 paid, accrued, or incurred relates to a contract
2250	2250	17 or agreement entered into at arm's-length rates
2251	2251	18 and terms and the principal purpose for the
2252	2252	19 payment is not federal or Illinois tax avoidance;
2253	2253	20 or
2254	2254	21 (iv) an item of interest paid, accrued, or
2255	2255	22 incurred, directly or indirectly, to a person if
2256	2256	23 the taxpayer establishes by clear and convincing
2257	2257	24 evidence that the adjustments are unreasonable; or
2258	2258	25 if the taxpayer and the Director agree in writing
2259	2259	26 to the application or use of an alternative method
2260	2260
2261	2261
2262	2262
2263	2263
2264	2264
2265	2265	HB3088 - 62 - LRB103 05738 HLH 50758 b
2266	2266
2267	2267
2268	2268	HB3088- 63 -LRB103 05738 HLH 50758 b HB3088 - 63 - LRB103 05738 HLH 50758 b
2269	2269	HB3088 - 63 - LRB103 05738 HLH 50758 b
2270	2270	1 of apportionment under Section 304(f).
2271	2271	2 Nothing in this subsection shall preclude the
2272	2272	3 Director from making any other adjustment
2273	2273	4 otherwise allowed under Section 404 of this Act
2274	2274	5 for any tax year beginning after the effective
2275	2275	6 date of this amendment provided such adjustment is
2276	2276	7 made pursuant to regulation adopted by the
2277	2277	8 Department and such regulations provide methods
2278	2278	9 and standards by which the Department will utilize
2279	2279	10 its authority under Section 404 of this Act;
2280	2280	11 (G-13) An amount equal to the amount of intangible
2281	2281	12 expenses and costs otherwise allowed as a deduction in
2282	2282	13 computing base income, and that were paid, accrued, or
2283	2283	14 incurred, directly or indirectly, (i) for taxable
2284	2284	15 years ending on or after December 31, 2004, to a
2285	2285	16 foreign person who would be a member of the same
2286	2286	17 unitary business group but for the fact that the
2287	2287	18 foreign person's business activity outside the United
2288	2288	19 States is 80% or more of that person's total business
2289	2289	20 activity and (ii) for taxable years ending on or after
2290	2290	21 December 31, 2008, to a person who would be a member of
2291	2291	22 the same unitary business group but for the fact that
2292	2292	23 the person is prohibited under Section 1501(a)(27)
2293	2293	24 from being included in the unitary business group
2294	2294	25 because he or she is ordinarily required to apportion
2295	2295	26 business income under different subsections of Section
2296	2296
2297	2297
2298	2298
2299	2299
2300	2300
2301	2301	HB3088 - 63 - LRB103 05738 HLH 50758 b
2302	2302
2303	2303
2304	2304	HB3088- 64 -LRB103 05738 HLH 50758 b HB3088 - 64 - LRB103 05738 HLH 50758 b
2305	2305	HB3088 - 64 - LRB103 05738 HLH 50758 b
2306	2306	1 304. The addition modification required by this
2307	2307	2 subparagraph shall be reduced to the extent that
2308	2308	3 dividends were included in base income of the unitary
2309	2309	4 group for the same taxable year and received by the
2310	2310	5 taxpayer or by a member of the taxpayer's unitary
2311	2311	6 business group (including amounts included in gross
2312	2312	7 income pursuant to Sections 951 through 964 of the
2313	2313	8 Internal Revenue Code and amounts included in gross
2314	2314	9 income under Section 78 of the Internal Revenue Code)
2315	2315	10 with respect to the stock of the same person to whom
2316	2316	11 the intangible expenses and costs were directly or
2317	2317	12 indirectly paid, incurred, or accrued. The preceding
2318	2318	13 sentence shall not apply to the extent that the same
2319	2319	14 dividends caused a reduction to the addition
2320	2320	15 modification required under Section 203(c)(2)(G-12) of
2321	2321	16 this Act. As used in this subparagraph, the term
2322	2322	17 "intangible expenses and costs" includes: (1)
2323	2323	18 expenses, losses, and costs for or related to the
2324	2324	19 direct or indirect acquisition, use, maintenance or
2325	2325	20 management, ownership, sale, exchange, or any other
2326	2326	21 disposition of intangible property; (2) losses
2327	2327	22 incurred, directly or indirectly, from factoring
2328	2328	23 transactions or discounting transactions; (3) royalty,
2329	2329	24 patent, technical, and copyright fees; (4) licensing
2330	2330	25 fees; and (5) other similar expenses and costs. For
2331	2331	26 purposes of this subparagraph, "intangible property"
2332	2332
2333	2333
2334	2334
2335	2335
2336	2336
2337	2337	HB3088 - 64 - LRB103 05738 HLH 50758 b
2338	2338
2339	2339
2340	2340	HB3088- 65 -LRB103 05738 HLH 50758 b HB3088 - 65 - LRB103 05738 HLH 50758 b
2341	2341	HB3088 - 65 - LRB103 05738 HLH 50758 b
2342	2342	1 includes patents, patent applications, trade names,
2343	2343	2 trademarks, service marks, copyrights, mask works,
2344	2344	3 trade secrets, and similar types of intangible assets.
2345	2345	4 This paragraph shall not apply to the following:
2346	2346	5 (i) any item of intangible expenses or costs
2347	2347	6 paid, accrued, or incurred, directly or
2348	2348	7 indirectly, from a transaction with a person who
2349	2349	8 is subject in a foreign country or state, other
2350	2350	9 than a state which requires mandatory unitary
2351	2351	10 reporting, to a tax on or measured by net income
2352	2352	11 with respect to such item; or
2353	2353	12 (ii) any item of intangible expense or cost
2354	2354	13 paid, accrued, or incurred, directly or
2355	2355	14 indirectly, if the taxpayer can establish, based
2356	2356	15 on a preponderance of the evidence, both of the
2357	2357	16 following:
2358	2358	17 (a) the person during the same taxable
2359	2359	18 year paid, accrued, or incurred, the
2360	2360	19 intangible expense or cost to a person that is
2361	2361	20 not a related member, and
2362	2362	21 (b) the transaction giving rise to the
2363	2363	22 intangible expense or cost between the
2364	2364	23 taxpayer and the person did not have as a
2365	2365	24 principal purpose the avoidance of Illinois
2366	2366	25 income tax, and is paid pursuant to a contract
2367	2367	26 or agreement that reflects arm's-length terms;
2368	2368
2369	2369
2370	2370
2371	2371
2372	2372
2373	2373	HB3088 - 65 - LRB103 05738 HLH 50758 b
2374	2374
2375	2375
2376	2376	HB3088- 66 -LRB103 05738 HLH 50758 b HB3088 - 66 - LRB103 05738 HLH 50758 b
2377	2377	HB3088 - 66 - LRB103 05738 HLH 50758 b
2378	2378	1 or
2379	2379	2 (iii) any item of intangible expense or cost
2380	2380	3 paid, accrued, or incurred, directly or
2381	2381	4 indirectly, from a transaction with a person if
2382	2382	5 the taxpayer establishes by clear and convincing
2383	2383	6 evidence, that the adjustments are unreasonable;
2384	2384	7 or if the taxpayer and the Director agree in
2385	2385	8 writing to the application or use of an
2386	2386	9 alternative method of apportionment under Section
2387	2387	10 304(f);
2388	2388	11 Nothing in this subsection shall preclude the
2389	2389	12 Director from making any other adjustment
2390	2390	13 otherwise allowed under Section 404 of this Act
2391	2391	14 for any tax year beginning after the effective
2392	2392	15 date of this amendment provided such adjustment is
2393	2393	16 made pursuant to regulation adopted by the
2394	2394	17 Department and such regulations provide methods
2395	2395	18 and standards by which the Department will utilize
2396	2396	19 its authority under Section 404 of this Act;
2397	2397	20 (G-14) For taxable years ending on or after
2398	2398	21 December 31, 2008, an amount equal to the amount of
2399	2399	22 insurance premium expenses and costs otherwise allowed
2400	2400	23 as a deduction in computing base income, and that were
2401	2401	24 paid, accrued, or incurred, directly or indirectly, to
2402	2402	25 a person who would be a member of the same unitary
2403	2403	26 business group but for the fact that the person is
2404	2404
2405	2405
2406	2406
2407	2407
2408	2408
2409	2409	HB3088 - 66 - LRB103 05738 HLH 50758 b
2410	2410
2411	2411
2412	2412	HB3088- 67 -LRB103 05738 HLH 50758 b HB3088 - 67 - LRB103 05738 HLH 50758 b
2413	2413	HB3088 - 67 - LRB103 05738 HLH 50758 b
2414	2414	1 prohibited under Section 1501(a)(27) from being
2415	2415	2 included in the unitary business group because he or
2416	2416	3 she is ordinarily required to apportion business
2417	2417	4 income under different subsections of Section 304. The
2418	2418	5 addition modification required by this subparagraph
2419	2419	6 shall be reduced to the extent that dividends were
2420	2420	7 included in base income of the unitary group for the
2421	2421	8 same taxable year and received by the taxpayer or by a
2422	2422	9 member of the taxpayer's unitary business group
2423	2423	10 (including amounts included in gross income under
2424	2424	11 Sections 951 through 964 of the Internal Revenue Code
2425	2425	12 and amounts included in gross income under Section 78
2426	2426	13 of the Internal Revenue Code) with respect to the
2427	2427	14 stock of the same person to whom the premiums and costs
2428	2428	15 were directly or indirectly paid, incurred, or
2429	2429	16 accrued. The preceding sentence does not apply to the
2430	2430	17 extent that the same dividends caused a reduction to
2431	2431	18 the addition modification required under Section
2432	2432	19 203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this
2433	2433	20 Act;
2434	2434	21 (G-15) An amount equal to the credit allowable to
2435	2435	22 the taxpayer under Section 218(a) of this Act,
2436	2436	23 determined without regard to Section 218(c) of this
2437	2437	24 Act;
2438	2438	25 (G-16) For taxable years ending on or after
2439	2439	26 December 31, 2017, an amount equal to the deduction
2440	2440
2441	2441
2442	2442
2443	2443
2444	2444
2445	2445	HB3088 - 67 - LRB103 05738 HLH 50758 b
2446	2446
2447	2447
2448	2448	HB3088- 68 -LRB103 05738 HLH 50758 b HB3088 - 68 - LRB103 05738 HLH 50758 b
2449	2449	HB3088 - 68 - LRB103 05738 HLH 50758 b
2450	2450	1 allowed under Section 199 of the Internal Revenue Code
2451	2451	2 for the taxable year;
2452	2452	3 and by deducting from the total so obtained the sum of the
2453	2453	4 following amounts:
2454	2454	5 (H) An amount equal to all amounts included in
2455	2455	6 such total pursuant to the provisions of Sections
2456	2456	7 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 408
2457	2457	8 of the Internal Revenue Code or included in such total
2458	2458	9 as distributions under the provisions of any
2459	2459	10 retirement or disability plan for employees of any
2460	2460	11 governmental agency or unit, or retirement payments to
2461	2461	12 retired partners, which payments are excluded in
2462	2462	13 computing net earnings from self employment by Section
2463	2463	14 1402 of the Internal Revenue Code and regulations
2464	2464	15 adopted pursuant thereto;
2465	2465	16 (I) The valuation limitation amount;
2466	2466	17 (J) An amount equal to the amount of any tax
2467	2467	18 imposed by this Act which was refunded to the taxpayer
2468	2468	19 and included in such total for the taxable year;
2469	2469	20 (K) An amount equal to all amounts included in
2470	2470	21 taxable income as modified by subparagraphs (A), (B),
2471	2471	22 (C), (D), (E), (F) and (G) which are exempt from
2472	2472	23 taxation by this State either by reason of its
2473	2473	24 statutes or Constitution or by reason of the
2474	2474	25 Constitution, treaties or statutes of the United
2475	2475	26 States; provided that, in the case of any statute of
2476	2476
2477	2477
2478	2478
2479	2479
2480	2480
2481	2481	HB3088 - 68 - LRB103 05738 HLH 50758 b
2482	2482
2483	2483
2484	2484	HB3088- 69 -LRB103 05738 HLH 50758 b HB3088 - 69 - LRB103 05738 HLH 50758 b
2485	2485	HB3088 - 69 - LRB103 05738 HLH 50758 b
2486	2486	1 this State that exempts income derived from bonds or
2487	2487	2 other obligations from the tax imposed under this Act,
2488	2488	3 the amount exempted shall be the interest net of bond
2489	2489	4 premium amortization;
2490	2490	5 (L) With the exception of any amounts subtracted
2491	2491	6 under subparagraph (K), an amount equal to the sum of
2492	2492	7 all amounts disallowed as deductions by (i) Sections
2493	2493	8 171(a)(2) and 265(a)(2) of the Internal Revenue Code,
2494	2494	9 and all amounts of expenses allocable to interest and
2495	2495	10 disallowed as deductions by Section 265(a)(1) of the
2496	2496	11 Internal Revenue Code; and (ii) for taxable years
2497	2497	12 ending on or after August 13, 1999, Sections
2498	2498	13 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
2499	2499	14 Internal Revenue Code, plus, (iii) for taxable years
2500	2500	15 ending on or after December 31, 2011, Section
2501	2501	16 45G(e)(3) of the Internal Revenue Code and, for
2502	2502	17 taxable years ending on or after December 31, 2008,
2503	2503	18 any amount included in gross income under Section 87
2504	2504	19 of the Internal Revenue Code; the provisions of this
2505	2505	20 subparagraph are exempt from the provisions of Section
2506	2506	21 250;
2507	2507	22 (M) An amount equal to those dividends included in
2508	2508	23 such total which were paid by a corporation which
2509	2509	24 conducts business operations in a River Edge
2510	2510	25 Redevelopment Zone or zones created under the River
2511	2511	26 Edge Redevelopment Zone Act and conducts substantially
2512	2512
2513	2513
2514	2514
2515	2515
2516	2516
2517	2517	HB3088 - 69 - LRB103 05738 HLH 50758 b
2518	2518
2519	2519
2520	2520	HB3088- 70 -LRB103 05738 HLH 50758 b HB3088 - 70 - LRB103 05738 HLH 50758 b
2521	2521	HB3088 - 70 - LRB103 05738 HLH 50758 b
2522	2522	1 all of its operations in a River Edge Redevelopment
2523	2523	2 Zone or zones. This subparagraph (M) is exempt from
2524	2524	3 the provisions of Section 250;
2525	2525	4 (N) An amount equal to any contribution made to a
2526	2526	5 job training project established pursuant to the Tax
2527	2527	6 Increment Allocation Redevelopment Act;
2528	2528	7 (O) An amount equal to those dividends included in
2529	2529	8 such total that were paid by a corporation that
2530	2530	9 conducts business operations in a federally designated
2531	2531	10 Foreign Trade Zone or Sub-Zone and that is designated
2532	2532	11 a High Impact Business located in Illinois; provided
2533	2533	12 that dividends eligible for the deduction provided in
2534	2534	13 subparagraph (M) of paragraph (2) of this subsection
2535	2535	14 shall not be eligible for the deduction provided under
2536	2536	15 this subparagraph (O);
2537	2537	16 (P) An amount equal to the amount of the deduction
2538	2538	17 used to compute the federal income tax credit for
2539	2539	18 restoration of substantial amounts held under claim of
2540	2540	19 right for the taxable year pursuant to Section 1341 of
2541	2541	20 the Internal Revenue Code;
2542	2542	21 (Q) For taxable year 1999 and thereafter, an
2543	2543	22 amount equal to the amount of any (i) distributions,
2544	2544	23 to the extent includible in gross income for federal
2545	2545	24 income tax purposes, made to the taxpayer because of
2546	2546	25 his or her status as a victim of persecution for racial
2547	2547	26 or religious reasons by Nazi Germany or any other Axis
2548	2548
2549	2549
2550	2550
2551	2551
2552	2552
2553	2553	HB3088 - 70 - LRB103 05738 HLH 50758 b
2554	2554
2555	2555
2556	2556	HB3088- 71 -LRB103 05738 HLH 50758 b HB3088 - 71 - LRB103 05738 HLH 50758 b
2557	2557	HB3088 - 71 - LRB103 05738 HLH 50758 b
2558	2558	1 regime or as an heir of the victim and (ii) items of
2559	2559	2 income, to the extent includible in gross income for
2560	2560	3 federal income tax purposes, attributable to, derived
2561	2561	4 from or in any way related to assets stolen from,
2562	2562	5 hidden from, or otherwise lost to a victim of
2563	2563	6 persecution for racial or religious reasons by Nazi
2564	2564	7 Germany or any other Axis regime immediately prior to,
2565	2565	8 during, and immediately after World War II, including,
2566	2566	9 but not limited to, interest on the proceeds
2567	2567	10 receivable as insurance under policies issued to a
2568	2568	11 victim of persecution for racial or religious reasons
2569	2569	12 by Nazi Germany or any other Axis regime by European
2570	2570	13 insurance companies immediately prior to and during
2571	2571	14 World War II; provided, however, this subtraction from
2572	2572	15 federal adjusted gross income does not apply to assets
2573	2573	16 acquired with such assets or with the proceeds from
2574	2574	17 the sale of such assets; provided, further, this
2575	2575	18 paragraph shall only apply to a taxpayer who was the
2576	2576	19 first recipient of such assets after their recovery
2577	2577	20 and who is a victim of persecution for racial or
2578	2578	21 religious reasons by Nazi Germany or any other Axis
2579	2579	22 regime or as an heir of the victim. The amount of and
2580	2580	23 the eligibility for any public assistance, benefit, or
2581	2581	24 similar entitlement is not affected by the inclusion
2582	2582	25 of items (i) and (ii) of this paragraph in gross income
2583	2583	26 for federal income tax purposes. This paragraph is
2584	2584
2585	2585
2586	2586
2587	2587
2588	2588
2589	2589	HB3088 - 71 - LRB103 05738 HLH 50758 b
2590	2590
2591	2591
2592	2592	HB3088- 72 -LRB103 05738 HLH 50758 b HB3088 - 72 - LRB103 05738 HLH 50758 b
2593	2593	HB3088 - 72 - LRB103 05738 HLH 50758 b
2594	2594	1 exempt from the provisions of Section 250;
2595	2595	2 (R) For taxable years 2001 and thereafter, for the
2596	2596	3 taxable year in which the bonus depreciation deduction
2597	2597	4 is taken on the taxpayer's federal income tax return
2598	2598	5 under subsection (k) of Section 168 of the Internal
2599	2599	6 Revenue Code and for each applicable taxable year
2600	2600	7 thereafter, an amount equal to "x", where:
2601	2601	8 (1) "y" equals the amount of the depreciation
2602	2602	9 deduction taken for the taxable year on the
2603	2603	10 taxpayer's federal income tax return on property
2604	2604	11 for which the bonus depreciation deduction was
2605	2605	12 taken in any year under subsection (k) of Section
2606	2606	13 168 of the Internal Revenue Code, but not
2607	2607	14 including the bonus depreciation deduction;
2608	2608	15 (2) for taxable years ending on or before
2609	2609	16 December 31, 2005, "x" equals "y" multiplied by 30
2610	2610	17 and then divided by 70 (or "y" multiplied by
2611	2611	18 0.429); and
2612	2612	19 (3) for taxable years ending after December
2613	2613	20 31, 2005:
2614	2614	21 (i) for property on which a bonus
2615	2615	22 depreciation deduction of 30% of the adjusted
2616	2616	23 basis was taken, "x" equals "y" multiplied by
2617	2617	24 30 and then divided by 70 (or "y" multiplied
2618	2618	25 by 0.429);
2619	2619	26 (ii) for property on which a bonus
2620	2620
2621	2621
2622	2622
2623	2623
2624	2624
2625	2625	HB3088 - 72 - LRB103 05738 HLH 50758 b
2626	2626
2627	2627
2628	2628	HB3088- 73 -LRB103 05738 HLH 50758 b HB3088 - 73 - LRB103 05738 HLH 50758 b
2629	2629	HB3088 - 73 - LRB103 05738 HLH 50758 b
2630	2630	1 depreciation deduction of 50% of the adjusted
2631	2631	2 basis was taken, "x" equals "y" multiplied by
2632	2632	3 1.0;
2633	2633	4 (iii) for property on which a bonus
2634	2634	5 depreciation deduction of 100% of the adjusted
2635	2635	6 basis was taken in a taxable year ending on or
2636	2636	7 after December 31, 2021, "x" equals the
2637	2637	8 depreciation deduction that would be allowed
2638	2638	9 on that property if the taxpayer had made the
2639	2639	10 election under Section 168(k)(7) of the
2640	2640	11 Internal Revenue Code to not claim bonus
2641	2641	12 depreciation on that property; and
2642	2642	13 (iv) for property on which a bonus
2643	2643	14 depreciation deduction of a percentage other
2644	2644	15 than 30%, 50% or 100% of the adjusted basis
2645	2645	16 was taken in a taxable year ending on or after
2646	2646	17 December 31, 2021, "x" equals "y" multiplied
2647	2647	18 by 100 times the percentage bonus depreciation
2648	2648	19 on the property (that is, 100(bonus%)) and
2649	2649	20 then divided by 100 times 1 minus the
2650	2650	21 percentage bonus depreciation on the property
2651	2651	22 (that is, 100(1bonus%)).
2652	2652	23 The aggregate amount deducted under this
2653	2653	24 subparagraph in all taxable years for any one piece of
2654	2654	25 property may not exceed the amount of the bonus
2655	2655	26 depreciation deduction taken on that property on the
2656	2656
2657	2657
2658	2658
2659	2659
2660	2660
2661	2661	HB3088 - 73 - LRB103 05738 HLH 50758 b
2662	2662
2663	2663
2664	2664	HB3088- 74 -LRB103 05738 HLH 50758 b HB3088 - 74 - LRB103 05738 HLH 50758 b
2665	2665	HB3088 - 74 - LRB103 05738 HLH 50758 b
2666	2666	1 taxpayer's federal income tax return under subsection
2667	2667	2 (k) of Section 168 of the Internal Revenue Code. This
2668	2668	3 subparagraph (R) is exempt from the provisions of
2669	2669	4 Section 250;
2670	2670	5 (S) If the taxpayer sells, transfers, abandons, or
2671	2671	6 otherwise disposes of property for which the taxpayer
2672	2672	7 was required in any taxable year to make an addition
2673	2673	8 modification under subparagraph (G-10), then an amount
2674	2674	9 equal to that addition modification.
2675	2675	10 If the taxpayer continues to own property through
2676	2676	11 the last day of the last tax year for which a
2677	2677	12 subtraction is allowed with respect to that property
2678	2678	13 under subparagraph (R) and for which the taxpayer was
2679	2679	14 required in any taxable year to make an addition
2680	2680	15 modification under subparagraph (G-10), then an amount
2681	2681	16 equal to that addition modification.
2682	2682	17 The taxpayer is allowed to take the deduction
2683	2683	18 under this subparagraph only once with respect to any
2684	2684	19 one piece of property.
2685	2685	20 This subparagraph (S) is exempt from the
2686	2686	21 provisions of Section 250;
2687	2687	22 (T) The amount of (i) any interest income (net of
2688	2688	23 the deductions allocable thereto) taken into account
2689	2689	24 for the taxable year with respect to a transaction
2690	2690	25 with a taxpayer that is required to make an addition
2691	2691	26 modification with respect to such transaction under
2692	2692
2693	2693
2694	2694
2695	2695
2696	2696
2697	2697	HB3088 - 74 - LRB103 05738 HLH 50758 b
2698	2698
2699	2699
2700	2700	HB3088- 75 -LRB103 05738 HLH 50758 b HB3088 - 75 - LRB103 05738 HLH 50758 b
2701	2701	HB3088 - 75 - LRB103 05738 HLH 50758 b
2702	2702	1 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
2703	2703	2 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
2704	2704	3 the amount of such addition modification and (ii) any
2705	2705	4 income from intangible property (net of the deductions
2706	2706	5 allocable thereto) taken into account for the taxable
2707	2707	6 year with respect to a transaction with a taxpayer
2708	2708	7 that is required to make an addition modification with
2709	2709	8 respect to such transaction under Section
2710	2710	9 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
2711	2711	10 203(d)(2)(D-8), but not to exceed the amount of such
2712	2712	11 addition modification. This subparagraph (T) is exempt
2713	2713	12 from the provisions of Section 250;
2714	2714	13 (U) An amount equal to the interest income taken
2715	2715	14 into account for the taxable year (net of the
2716	2716	15 deductions allocable thereto) with respect to
2717	2717	16 transactions with (i) a foreign person who would be a
2718	2718	17 member of the taxpayer's unitary business group but
2719	2719	18 for the fact the foreign person's business activity
2720	2720	19 outside the United States is 80% or more of that
2721	2721	20 person's total business activity and (ii) for taxable
2722	2722	21 years ending on or after December 31, 2008, to a person
2723	2723	22 who would be a member of the same unitary business
2724	2724	23 group but for the fact that the person is prohibited
2725	2725	24 under Section 1501(a)(27) from being included in the
2726	2726	25 unitary business group because he or she is ordinarily
2727	2727	26 required to apportion business income under different
2728	2728
2729	2729
2730	2730
2731	2731
2732	2732
2733	2733	HB3088 - 75 - LRB103 05738 HLH 50758 b
2734	2734
2735	2735
2736	2736	HB3088- 76 -LRB103 05738 HLH 50758 b HB3088 - 76 - LRB103 05738 HLH 50758 b
2737	2737	HB3088 - 76 - LRB103 05738 HLH 50758 b
2738	2738	1 subsections of Section 304, but not to exceed the
2739	2739	2 addition modification required to be made for the same
2740	2740	3 taxable year under Section 203(c)(2)(G-12) for
2741	2741	4 interest paid, accrued, or incurred, directly or
2742	2742	5 indirectly, to the same person. This subparagraph (U)
2743	2743	6 is exempt from the provisions of Section 250;
2744	2744	7 (V) An amount equal to the income from intangible
2745	2745	8 property taken into account for the taxable year (net
2746	2746	9 of the deductions allocable thereto) with respect to
2747	2747	10 transactions with (i) a foreign person who would be a
2748	2748	11 member of the taxpayer's unitary business group but
2749	2749	12 for the fact that the foreign person's business
2750	2750	13 activity outside the United States is 80% or more of
2751	2751	14 that person's total business activity and (ii) for
2752	2752	15 taxable years ending on or after December 31, 2008, to
2753	2753	16 a person who would be a member of the same unitary
2754	2754	17 business group but for the fact that the person is
2755	2755	18 prohibited under Section 1501(a)(27) from being
2756	2756	19 included in the unitary business group because he or
2757	2757	20 she is ordinarily required to apportion business
2758	2758	21 income under different subsections of Section 304, but
2759	2759	22 not to exceed the addition modification required to be
2760	2760	23 made for the same taxable year under Section
2761	2761	24 203(c)(2)(G-13) for intangible expenses and costs
2762	2762	25 paid, accrued, or incurred, directly or indirectly, to
2763	2763	26 the same foreign person. This subparagraph (V) is
2764	2764
2765	2765
2766	2766
2767	2767
2768	2768
2769	2769	HB3088 - 76 - LRB103 05738 HLH 50758 b
2770	2770
2771	2771
2772	2772	HB3088- 77 -LRB103 05738 HLH 50758 b HB3088 - 77 - LRB103 05738 HLH 50758 b
2773	2773	HB3088 - 77 - LRB103 05738 HLH 50758 b
2774	2774	1 exempt from the provisions of Section 250;
2775	2775	2 (W) in the case of an estate, an amount equal to
2776	2776	3 all amounts included in such total pursuant to the
2777	2777	4 provisions of Section 111 of the Internal Revenue Code
2778	2778	5 as a recovery of items previously deducted by the
2779	2779	6 decedent from adjusted gross income in the computation
2780	2780	7 of taxable income. This subparagraph (W) is exempt
2781	2781	8 from Section 250;
2782	2782	9 (X) an amount equal to the refund included in such
2783	2783	10 total of any tax deducted for federal income tax
2784	2784	11 purposes, to the extent that deduction was added back
2785	2785	12 under subparagraph (F). This subparagraph (X) is
2786	2786	13 exempt from the provisions of Section 250;
2787	2787	14 (Y) For taxable years ending on or after December
2788	2788	15 31, 2011, in the case of a taxpayer who was required to
2789	2789	16 add back any insurance premiums under Section
2790	2790	17 203(c)(2)(G-14), such taxpayer may elect to subtract
2791	2791	18 that part of a reimbursement received from the
2792	2792	19 insurance company equal to the amount of the expense
2793	2793	20 or loss (including expenses incurred by the insurance
2794	2794	21 company) that would have been taken into account as a
2795	2795	22 deduction for federal income tax purposes if the
2796	2796	23 expense or loss had been uninsured. If a taxpayer
2797	2797	24 makes the election provided for by this subparagraph
2798	2798	25 (Y), the insurer to which the premiums were paid must
2799	2799	26 add back to income the amount subtracted by the
2800	2800
2801	2801
2802	2802
2803	2803
2804	2804
2805	2805	HB3088 - 77 - LRB103 05738 HLH 50758 b
2806	2806
2807	2807
2808	2808	HB3088- 78 -LRB103 05738 HLH 50758 b HB3088 - 78 - LRB103 05738 HLH 50758 b
2809	2809	HB3088 - 78 - LRB103 05738 HLH 50758 b
2810	2810	1 taxpayer pursuant to this subparagraph (Y). This
2811	2811	2 subparagraph (Y) is exempt from the provisions of
2812	2812	3 Section 250; and
2813	2813	4 (Z) For taxable years beginning after December 31,
2814	2814	5 2018 and before January 1, 2026, the amount of excess
2815	2815	6 business loss of the taxpayer disallowed as a
2816	2816	7 deduction by Section 461(l)(1)(B) of the Internal
2817	2817	8 Revenue Code.
2818	2818	9 (3) Limitation. The amount of any modification
2819	2819	10 otherwise required under this subsection shall, under
2820	2820	11 regulations prescribed by the Department, be adjusted by
2821	2821	12 any amounts included therein which were properly paid,
2822	2822	13 credited, or required to be distributed, or permanently
2823	2823	14 set aside for charitable purposes pursuant to Internal
2824	2824	15 Revenue Code Section 642(c) during the taxable year.
2825	2825	16 (d) Partnerships.
2826	2826	17 (1) In general. In the case of a partnership, base
2827	2827	18 income means an amount equal to the taxpayer's taxable
2828	2828	19 income for the taxable year as modified by paragraph (2).
2829	2829	20 (2) Modifications. The taxable income referred to in
2830	2830	21 paragraph (1) shall be modified by adding thereto the sum
2831	2831	22 of the following amounts:
2832	2832	23 (A) An amount equal to all amounts paid or accrued
2833	2833	24 to the taxpayer as interest or dividends during the
2834	2834	25 taxable year to the extent excluded from gross income
2835	2835
2836	2836
2837	2837
2838	2838
2839	2839
2840	2840	HB3088 - 78 - LRB103 05738 HLH 50758 b
2841	2841
2842	2842
2843	2843	HB3088- 79 -LRB103 05738 HLH 50758 b HB3088 - 79 - LRB103 05738 HLH 50758 b
2844	2844	HB3088 - 79 - LRB103 05738 HLH 50758 b
2845	2845	1 in the computation of taxable income;
2846	2846	2 (B) An amount equal to the amount of tax imposed by
2847	2847	3 this Act to the extent deducted from gross income for
2848	2848	4 the taxable year;
2849	2849	5 (C) The amount of deductions allowed to the
2850	2850	6 partnership pursuant to Section 707 (c) of the
2851	2851	7 Internal Revenue Code in calculating its taxable
2852	2852	8 income;
2853	2853	9 (D) An amount equal to the amount of the capital
2854	2854	10 gain deduction allowable under the Internal Revenue
2855	2855	11 Code, to the extent deducted from gross income in the
2856	2856	12 computation of taxable income;
2857	2857	13 (D-5) For taxable years 2001 and thereafter, an
2858	2858	14 amount equal to the bonus depreciation deduction taken
2859	2859	15 on the taxpayer's federal income tax return for the
2860	2860	16 taxable year under subsection (k) of Section 168 of
2861	2861	17 the Internal Revenue Code;
2862	2862	18 (D-6) If the taxpayer sells, transfers, abandons,
2863	2863	19 or otherwise disposes of property for which the
2864	2864	20 taxpayer was required in any taxable year to make an
2865	2865	21 addition modification under subparagraph (D-5), then
2866	2866	22 an amount equal to the aggregate amount of the
2867	2867	23 deductions taken in all taxable years under
2868	2868	24 subparagraph (O) with respect to that property.
2869	2869	25 If the taxpayer continues to own property through
2870	2870	26 the last day of the last tax year for which a
2871	2871
2872	2872
2873	2873
2874	2874
2875	2875
2876	2876	HB3088 - 79 - LRB103 05738 HLH 50758 b
2877	2877
2878	2878
2879	2879	HB3088- 80 -LRB103 05738 HLH 50758 b HB3088 - 80 - LRB103 05738 HLH 50758 b
2880	2880	HB3088 - 80 - LRB103 05738 HLH 50758 b
2881	2881	1 subtraction is allowed with respect to that property
2882	2882	2 under subparagraph (O) and for which the taxpayer was
2883	2883	3 allowed in any taxable year to make a subtraction
2884	2884	4 modification under subparagraph (O), then an amount
2885	2885	5 equal to that subtraction modification.
2886	2886	6 The taxpayer is required to make the addition
2887	2887	7 modification under this subparagraph only once with
2888	2888	8 respect to any one piece of property;
2889	2889	9 (D-7) An amount equal to the amount otherwise
2890	2890	10 allowed as a deduction in computing base income for
2891	2891	11 interest paid, accrued, or incurred, directly or
2892	2892	12 indirectly, (i) for taxable years ending on or after
2893	2893	13 December 31, 2004, to a foreign person who would be a
2894	2894	14 member of the same unitary business group but for the
2895	2895	15 fact the foreign person's business activity outside
2896	2896	16 the United States is 80% or more of the foreign
2897	2897	17 person's total business activity and (ii) for taxable
2898	2898	18 years ending on or after December 31, 2008, to a person
2899	2899	19 who would be a member of the same unitary business
2900	2900	20 group but for the fact that the person is prohibited
2901	2901	21 under Section 1501(a)(27) from being included in the
2902	2902	22 unitary business group because he or she is ordinarily
2903	2903	23 required to apportion business income under different
2904	2904	24 subsections of Section 304. The addition modification
2905	2905	25 required by this subparagraph shall be reduced to the
2906	2906	26 extent that dividends were included in base income of
2907	2907
2908	2908
2909	2909
2910	2910
2911	2911
2912	2912	HB3088 - 80 - LRB103 05738 HLH 50758 b
2913	2913
2914	2914
2915	2915	HB3088- 81 -LRB103 05738 HLH 50758 b HB3088 - 81 - LRB103 05738 HLH 50758 b
2916	2916	HB3088 - 81 - LRB103 05738 HLH 50758 b
2917	2917	1 the unitary group for the same taxable year and
2918	2918	2 received by the taxpayer or by a member of the
2919	2919	3 taxpayer's unitary business group (including amounts
2920	2920	4 included in gross income pursuant to Sections 951
2921	2921	5 through 964 of the Internal Revenue Code and amounts
2922	2922	6 included in gross income under Section 78 of the
2923	2923	7 Internal Revenue Code) with respect to the stock of
2924	2924	8 the same person to whom the interest was paid,
2925	2925	9 accrued, or incurred.
2926	2926	10 This paragraph shall not apply to the following:
2927	2927	11 (i) an item of interest paid, accrued, or
2928	2928	12 incurred, directly or indirectly, to a person who
2929	2929	13 is subject in a foreign country or state, other
2930	2930	14 than a state which requires mandatory unitary
2931	2931	15 reporting, to a tax on or measured by net income
2932	2932	16 with respect to such interest; or
2933	2933	17 (ii) an item of interest paid, accrued, or
2934	2934	18 incurred, directly or indirectly, to a person if
2935	2935	19 the taxpayer can establish, based on a
2936	2936	20 preponderance of the evidence, both of the
2937	2937	21 following:
2938	2938	22 (a) the person, during the same taxable
2939	2939	23 year, paid, accrued, or incurred, the interest
2940	2940	24 to a person that is not a related member, and
2941	2941	25 (b) the transaction giving rise to the
2942	2942	26 interest expense between the taxpayer and the
2943	2943
2944	2944
2945	2945
2946	2946
2947	2947
2948	2948	HB3088 - 81 - LRB103 05738 HLH 50758 b
2949	2949
2950	2950
2951	2951	HB3088- 82 -LRB103 05738 HLH 50758 b HB3088 - 82 - LRB103 05738 HLH 50758 b
2952	2952	HB3088 - 82 - LRB103 05738 HLH 50758 b
2953	2953	1 person did not have as a principal purpose the
2954	2954	2 avoidance of Illinois income tax, and is paid
2955	2955	3 pursuant to a contract or agreement that
2956	2956	4 reflects an arm's-length interest rate and
2957	2957	5 terms; or
2958	2958	6 (iii) the taxpayer can establish, based on
2959	2959	7 clear and convincing evidence, that the interest
2960	2960	8 paid, accrued, or incurred relates to a contract
2961	2961	9 or agreement entered into at arm's-length rates
2962	2962	10 and terms and the principal purpose for the
2963	2963	11 payment is not federal or Illinois tax avoidance;
2964	2964	12 or
2965	2965	13 (iv) an item of interest paid, accrued, or
2966	2966	14 incurred, directly or indirectly, to a person if
2967	2967	15 the taxpayer establishes by clear and convincing
2968	2968	16 evidence that the adjustments are unreasonable; or
2969	2969	17 if the taxpayer and the Director agree in writing
2970	2970	18 to the application or use of an alternative method
2971	2971	19 of apportionment under Section 304(f).
2972	2972	20 Nothing in this subsection shall preclude the
2973	2973	21 Director from making any other adjustment
2974	2974	22 otherwise allowed under Section 404 of this Act
2975	2975	23 for any tax year beginning after the effective
2976	2976	24 date of this amendment provided such adjustment is
2977	2977	25 made pursuant to regulation adopted by the
2978	2978	26 Department and such regulations provide methods
2979	2979
2980	2980
2981	2981
2982	2982
2983	2983
2984	2984	HB3088 - 82 - LRB103 05738 HLH 50758 b
2985	2985
2986	2986
2987	2987	HB3088- 83 -LRB103 05738 HLH 50758 b HB3088 - 83 - LRB103 05738 HLH 50758 b
2988	2988	HB3088 - 83 - LRB103 05738 HLH 50758 b
2989	2989	1 and standards by which the Department will utilize
2990	2990	2 its authority under Section 404 of this Act; and
2991	2991	3 (D-8) An amount equal to the amount of intangible
2992	2992	4 expenses and costs otherwise allowed as a deduction in
2993	2993	5 computing base income, and that were paid, accrued, or
2994	2994	6 incurred, directly or indirectly, (i) for taxable
2995	2995	7 years ending on or after December 31, 2004, to a
2996	2996	8 foreign person who would be a member of the same
2997	2997	9 unitary business group but for the fact that the
2998	2998	10 foreign person's business activity outside the United
2999	2999	11 States is 80% or more of that person's total business
3000	3000	12 activity and (ii) for taxable years ending on or after
3001	3001	13 December 31, 2008, to a person who would be a member of
3002	3002	14 the same unitary business group but for the fact that
3003	3003	15 the person is prohibited under Section 1501(a)(27)
3004	3004	16 from being included in the unitary business group
3005	3005	17 because he or she is ordinarily required to apportion
3006	3006	18 business income under different subsections of Section
3007	3007	19 304. The addition modification required by this
3008	3008	20 subparagraph shall be reduced to the extent that
3009	3009	21 dividends were included in base income of the unitary
3010	3010	22 group for the same taxable year and received by the
3011	3011	23 taxpayer or by a member of the taxpayer's unitary
3012	3012	24 business group (including amounts included in gross
3013	3013	25 income pursuant to Sections 951 through 964 of the
3014	3014	26 Internal Revenue Code and amounts included in gross
3015	3015
3016	3016
3017	3017
3018	3018
3019	3019
3020	3020	HB3088 - 83 - LRB103 05738 HLH 50758 b
3021	3021
3022	3022
3023	3023	HB3088- 84 -LRB103 05738 HLH 50758 b HB3088 - 84 - LRB103 05738 HLH 50758 b
3024	3024	HB3088 - 84 - LRB103 05738 HLH 50758 b
3025	3025	1 income under Section 78 of the Internal Revenue Code)
3026	3026	2 with respect to the stock of the same person to whom
3027	3027	3 the intangible expenses and costs were directly or
3028	3028	4 indirectly paid, incurred or accrued. The preceding
3029	3029	5 sentence shall not apply to the extent that the same
3030	3030	6 dividends caused a reduction to the addition
3031	3031	7 modification required under Section 203(d)(2)(D-7) of
3032	3032	8 this Act. As used in this subparagraph, the term
3033	3033	9 "intangible expenses and costs" includes (1) expenses,
3034	3034	10 losses, and costs for, or related to, the direct or
3035	3035	11 indirect acquisition, use, maintenance or management,
3036	3036	12 ownership, sale, exchange, or any other disposition of
3037	3037	13 intangible property; (2) losses incurred, directly or
3038	3038	14 indirectly, from factoring transactions or discounting
3039	3039	15 transactions; (3) royalty, patent, technical, and
3040	3040	16 copyright fees; (4) licensing fees; and (5) other
3041	3041	17 similar expenses and costs. For purposes of this
3042	3042	18 subparagraph, "intangible property" includes patents,
3043	3043	19 patent applications, trade names, trademarks, service
3044	3044	20 marks, copyrights, mask works, trade secrets, and
3045	3045	21 similar types of intangible assets;
3046	3046	22 This paragraph shall not apply to the following:
3047	3047	23 (i) any item of intangible expenses or costs
3048	3048	24 paid, accrued, or incurred, directly or
3049	3049	25 indirectly, from a transaction with a person who
3050	3050	26 is subject in a foreign country or state, other
3051	3051
3052	3052
3053	3053
3054	3054
3055	3055
3056	3056	HB3088 - 84 - LRB103 05738 HLH 50758 b
3057	3057
3058	3058
3059	3059	HB3088- 85 -LRB103 05738 HLH 50758 b HB3088 - 85 - LRB103 05738 HLH 50758 b
3060	3060	HB3088 - 85 - LRB103 05738 HLH 50758 b
3061	3061	1 than a state which requires mandatory unitary
3062	3062	2 reporting, to a tax on or measured by net income
3063	3063	3 with respect to such item; or
3064	3064	4 (ii) any item of intangible expense or cost
3065	3065	5 paid, accrued, or incurred, directly or
3066	3066	6 indirectly, if the taxpayer can establish, based
3067	3067	7 on a preponderance of the evidence, both of the
3068	3068	8 following:
3069	3069	9 (a) the person during the same taxable
3070	3070	10 year paid, accrued, or incurred, the
3071	3071	11 intangible expense or cost to a person that is
3072	3072	12 not a related member, and
3073	3073	13 (b) the transaction giving rise to the
3074	3074	14 intangible expense or cost between the
3075	3075	15 taxpayer and the person did not have as a
3076	3076	16 principal purpose the avoidance of Illinois
3077	3077	17 income tax, and is paid pursuant to a contract
3078	3078	18 or agreement that reflects arm's-length terms;
3079	3079	19 or
3080	3080	20 (iii) any item of intangible expense or cost
3081	3081	21 paid, accrued, or incurred, directly or
3082	3082	22 indirectly, from a transaction with a person if
3083	3083	23 the taxpayer establishes by clear and convincing
3084	3084	24 evidence, that the adjustments are unreasonable;
3085	3085	25 or if the taxpayer and the Director agree in
3086	3086	26 writing to the application or use of an
3087	3087
3088	3088
3089	3089
3090	3090
3091	3091
3092	3092	HB3088 - 85 - LRB103 05738 HLH 50758 b
3093	3093
3094	3094
3095	3095	HB3088- 86 -LRB103 05738 HLH 50758 b HB3088 - 86 - LRB103 05738 HLH 50758 b
3096	3096	HB3088 - 86 - LRB103 05738 HLH 50758 b
3097	3097	1 alternative method of apportionment under Section
3098	3098	2 304(f);
3099	3099	3 Nothing in this subsection shall preclude the
3100	3100	4 Director from making any other adjustment
3101	3101	5 otherwise allowed under Section 404 of this Act
3102	3102	6 for any tax year beginning after the effective
3103	3103	7 date of this amendment provided such adjustment is
3104	3104	8 made pursuant to regulation adopted by the
3105	3105	9 Department and such regulations provide methods
3106	3106	10 and standards by which the Department will utilize
3107	3107	11 its authority under Section 404 of this Act;
3108	3108	12 (D-9) For taxable years ending on or after
3109	3109	13 December 31, 2008, an amount equal to the amount of
3110	3110	14 insurance premium expenses and costs otherwise allowed
3111	3111	15 as a deduction in computing base income, and that were
3112	3112	16 paid, accrued, or incurred, directly or indirectly, to
3113	3113	17 a person who would be a member of the same unitary
3114	3114	18 business group but for the fact that the person is
3115	3115	19 prohibited under Section 1501(a)(27) from being
3116	3116	20 included in the unitary business group because he or
3117	3117	21 she is ordinarily required to apportion business
3118	3118	22 income under different subsections of Section 304. The
3119	3119	23 addition modification required by this subparagraph
3120	3120	24 shall be reduced to the extent that dividends were
3121	3121	25 included in base income of the unitary group for the
3122	3122	26 same taxable year and received by the taxpayer or by a
3123	3123
3124	3124
3125	3125
3126	3126
3127	3127
3128	3128	HB3088 - 86 - LRB103 05738 HLH 50758 b
3129	3129
3130	3130
3131	3131	HB3088- 87 -LRB103 05738 HLH 50758 b HB3088 - 87 - LRB103 05738 HLH 50758 b
3132	3132	HB3088 - 87 - LRB103 05738 HLH 50758 b
3133	3133	1 member of the taxpayer's unitary business group
3134	3134	2 (including amounts included in gross income under
3135	3135	3 Sections 951 through 964 of the Internal Revenue Code
3136	3136	4 and amounts included in gross income under Section 78
3137	3137	5 of the Internal Revenue Code) with respect to the
3138	3138	6 stock of the same person to whom the premiums and costs
3139	3139	7 were directly or indirectly paid, incurred, or
3140	3140	8 accrued. The preceding sentence does not apply to the
3141	3141	9 extent that the same dividends caused a reduction to
3142	3142	10 the addition modification required under Section
3143	3143	11 203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act;
3144	3144	12 (D-10) An amount equal to the credit allowable to
3145	3145	13 the taxpayer under Section 218(a) of this Act,
3146	3146	14 determined without regard to Section 218(c) of this
3147	3147	15 Act;
3148	3148	16 (D-11) For taxable years ending on or after
3149	3149	17 December 31, 2017, an amount equal to the deduction
3150	3150	18 allowed under Section 199 of the Internal Revenue Code
3151	3151	19 for the taxable year;
3152	3152	20 and by deducting from the total so obtained the following
3153	3153	21 amounts:
3154	3154	22 (E) The valuation limitation amount;
3155	3155	23 (F) An amount equal to the amount of any tax
3156	3156	24 imposed by this Act which was refunded to the taxpayer
3157	3157	25 and included in such total for the taxable year;
3158	3158	26 (G) An amount equal to all amounts included in
3159	3159
3160	3160
3161	3161
3162	3162
3163	3163
3164	3164	HB3088 - 87 - LRB103 05738 HLH 50758 b
3165	3165
3166	3166
3167	3167	HB3088- 88 -LRB103 05738 HLH 50758 b HB3088 - 88 - LRB103 05738 HLH 50758 b
3168	3168	HB3088 - 88 - LRB103 05738 HLH 50758 b
3169	3169	1 taxable income as modified by subparagraphs (A), (B),
3170	3170	2 (C) and (D) which are exempt from taxation by this
3171	3171	3 State either by reason of its statutes or Constitution
3172	3172	4 or by reason of the Constitution, treaties or statutes
3173	3173	5 of the United States; provided that, in the case of any
3174	3174	6 statute of this State that exempts income derived from
3175	3175	7 bonds or other obligations from the tax imposed under
3176	3176	8 this Act, the amount exempted shall be the interest
3177	3177	9 net of bond premium amortization;
3178	3178	10 (H) Any income of the partnership which
3179	3179	11 constitutes personal service income as defined in
3180	3180	12 Section 1348(b)(1) of the Internal Revenue Code (as in
3181	3181	13 effect December 31, 1981) or a reasonable allowance
3182	3182	14 for compensation paid or accrued for services rendered
3183	3183	15 by partners to the partnership, whichever is greater;
3184	3184	16 this subparagraph (H) is exempt from the provisions of
3185	3185	17 Section 250;
3186	3186	18 (I) An amount equal to all amounts of income
3187	3187	19 distributable to an entity subject to the Personal
3188	3188	20 Property Tax Replacement Income Tax imposed by
3189	3189	21 subsections (c) and (d) of Section 201 of this Act
3190	3190	22 including amounts distributable to organizations
3191	3191	23 exempt from federal income tax by reason of Section
3192	3192	24 501(a) of the Internal Revenue Code; this subparagraph
3193	3193	25 (I) is exempt from the provisions of Section 250;
3194	3194	26 (J) With the exception of any amounts subtracted
3195	3195
3196	3196
3197	3197
3198	3198
3199	3199
3200	3200	HB3088 - 88 - LRB103 05738 HLH 50758 b
3201	3201
3202	3202
3203	3203	HB3088- 89 -LRB103 05738 HLH 50758 b HB3088 - 89 - LRB103 05738 HLH 50758 b
3204	3204	HB3088 - 89 - LRB103 05738 HLH 50758 b
3205	3205	1 under subparagraph (G), an amount equal to the sum of
3206	3206	2 all amounts disallowed as deductions by (i) Sections
3207	3207	3 171(a)(2) and 265(a)(2) of the Internal Revenue Code,
3208	3208	4 and all amounts of expenses allocable to interest and
3209	3209	5 disallowed as deductions by Section 265(a)(1) of the
3210	3210	6 Internal Revenue Code; and (ii) for taxable years
3211	3211	7 ending on or after August 13, 1999, Sections
3212	3212	8 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
3213	3213	9 Internal Revenue Code, plus, (iii) for taxable years
3214	3214	10 ending on or after December 31, 2011, Section
3215	3215	11 45G(e)(3) of the Internal Revenue Code and, for
3216	3216	12 taxable years ending on or after December 31, 2008,
3217	3217	13 any amount included in gross income under Section 87
3218	3218	14 of the Internal Revenue Code; the provisions of this
3219	3219	15 subparagraph are exempt from the provisions of Section
3220	3220	16 250;
3221	3221	17 (K) An amount equal to those dividends included in
3222	3222	18 such total which were paid by a corporation which
3223	3223	19 conducts business operations in a River Edge
3224	3224	20 Redevelopment Zone or zones created under the River
3225	3225	21 Edge Redevelopment Zone Act and conducts substantially
3226	3226	22 all of its operations from a River Edge Redevelopment
3227	3227	23 Zone or zones. This subparagraph (K) is exempt from
3228	3228	24 the provisions of Section 250;
3229	3229	25 (L) An amount equal to any contribution made to a
3230	3230	26 job training project established pursuant to the Real
3231	3231
3232	3232
3233	3233
3234	3234
3235	3235
3236	3236	HB3088 - 89 - LRB103 05738 HLH 50758 b
3237	3237
3238	3238
3239	3239	HB3088- 90 -LRB103 05738 HLH 50758 b HB3088 - 90 - LRB103 05738 HLH 50758 b
3240	3240	HB3088 - 90 - LRB103 05738 HLH 50758 b
3241	3241	1 Property Tax Increment Allocation Redevelopment Act;
3242	3242	2 (M) An amount equal to those dividends included in
3243	3243	3 such total that were paid by a corporation that
3244	3244	4 conducts business operations in a federally designated
3245	3245	5 Foreign Trade Zone or Sub-Zone and that is designated
3246	3246	6 a High Impact Business located in Illinois; provided
3247	3247	7 that dividends eligible for the deduction provided in
3248	3248	8 subparagraph (K) of paragraph (2) of this subsection
3249	3249	9 shall not be eligible for the deduction provided under
3250	3250	10 this subparagraph (M);
3251	3251	11 (N) An amount equal to the amount of the deduction
3252	3252	12 used to compute the federal income tax credit for
3253	3253	13 restoration of substantial amounts held under claim of
3254	3254	14 right for the taxable year pursuant to Section 1341 of
3255	3255	15 the Internal Revenue Code;
3256	3256	16 (O) For taxable years 2001 and thereafter, for the
3257	3257	17 taxable year in which the bonus depreciation deduction
3258	3258	18 is taken on the taxpayer's federal income tax return
3259	3259	19 under subsection (k) of Section 168 of the Internal
3260	3260	20 Revenue Code and for each applicable taxable year
3261	3261	21 thereafter, an amount equal to "x", where:
3262	3262	22 (1) "y" equals the amount of the depreciation
3263	3263	23 deduction taken for the taxable year on the
3264	3264	24 taxpayer's federal income tax return on property
3265	3265	25 for which the bonus depreciation deduction was
3266	3266	26 taken in any year under subsection (k) of Section
3267	3267
3268	3268
3269	3269
3270	3270
3271	3271
3272	3272	HB3088 - 90 - LRB103 05738 HLH 50758 b
3273	3273
3274	3274
3275	3275	HB3088- 91 -LRB103 05738 HLH 50758 b HB3088 - 91 - LRB103 05738 HLH 50758 b
3276	3276	HB3088 - 91 - LRB103 05738 HLH 50758 b
3277	3277	1 168 of the Internal Revenue Code, but not
3278	3278	2 including the bonus depreciation deduction;
3279	3279	3 (2) for taxable years ending on or before
3280	3280	4 December 31, 2005, "x" equals "y" multiplied by 30
3281	3281	5 and then divided by 70 (or "y" multiplied by
3282	3282	6 0.429); and
3283	3283	7 (3) for taxable years ending after December
3284	3284	8 31, 2005:
3285	3285	9 (i) for property on which a bonus
3286	3286	10 depreciation deduction of 30% of the adjusted
3287	3287	11 basis was taken, "x" equals "y" multiplied by
3288	3288	12 30 and then divided by 70 (or "y" multiplied
3289	3289	13 by 0.429);
3290	3290	14 (ii) for property on which a bonus
3291	3291	15 depreciation deduction of 50% of the adjusted
3292	3292	16 basis was taken, "x" equals "y" multiplied by
3293	3293	17 1.0;
3294	3294	18 (iii) for property on which a bonus
3295	3295	19 depreciation deduction of 100% of the adjusted
3296	3296	20 basis was taken in a taxable year ending on or
3297	3297	21 after December 31, 2021, "x" equals the
3298	3298	22 depreciation deduction that would be allowed
3299	3299	23 on that property if the taxpayer had made the
3300	3300	24 election under Section 168(k)(7) of the
3301	3301	25 Internal Revenue Code to not claim bonus
3302	3302	26 depreciation on that property; and
3303	3303
3304	3304
3305	3305
3306	3306
3307	3307
3308	3308	HB3088 - 91 - LRB103 05738 HLH 50758 b
3309	3309
3310	3310
3311	3311	HB3088- 92 -LRB103 05738 HLH 50758 b HB3088 - 92 - LRB103 05738 HLH 50758 b
3312	3312	HB3088 - 92 - LRB103 05738 HLH 50758 b
3313	3313	1 (iv) for property on which a bonus
3314	3314	2 depreciation deduction of a percentage other
3315	3315	3 than 30%, 50% or 100% of the adjusted basis
3316	3316	4 was taken in a taxable year ending on or after
3317	3317	5 December 31, 2021, "x" equals "y" multiplied
3318	3318	6 by 100 times the percentage bonus depreciation
3319	3319	7 on the property (that is, 100(bonus%)) and
3320	3320	8 then divided by 100 times 1 minus the
3321	3321	9 percentage bonus depreciation on the property
3322	3322	10 (that is, 100(1bonus%)).
3323	3323	11 The aggregate amount deducted under this
3324	3324	12 subparagraph in all taxable years for any one piece of
3325	3325	13 property may not exceed the amount of the bonus
3326	3326	14 depreciation deduction taken on that property on the
3327	3327	15 taxpayer's federal income tax return under subsection
3328	3328	16 (k) of Section 168 of the Internal Revenue Code. This
3329	3329	17 subparagraph (O) is exempt from the provisions of
3330	3330	18 Section 250;
3331	3331	19 (P) If the taxpayer sells, transfers, abandons, or
3332	3332	20 otherwise disposes of property for which the taxpayer
3333	3333	21 was required in any taxable year to make an addition
3334	3334	22 modification under subparagraph (D-5), then an amount
3335	3335	23 equal to that addition modification.
3336	3336	24 If the taxpayer continues to own property through
3337	3337	25 the last day of the last tax year for which a
3338	3338	26 subtraction is allowed with respect to that property
3339	3339
3340	3340
3341	3341
3342	3342
3343	3343
3344	3344	HB3088 - 92 - LRB103 05738 HLH 50758 b
3345	3345
3346	3346
3347	3347	HB3088- 93 -LRB103 05738 HLH 50758 b HB3088 - 93 - LRB103 05738 HLH 50758 b
3348	3348	HB3088 - 93 - LRB103 05738 HLH 50758 b
3349	3349	1 under subparagraph (O) and for which the taxpayer was
3350	3350	2 required in any taxable year to make an addition
3351	3351	3 modification under subparagraph (D-5), then an amount
3352	3352	4 equal to that addition modification.
3353	3353	5 The taxpayer is allowed to take the deduction
3354	3354	6 under this subparagraph only once with respect to any
3355	3355	7 one piece of property.
3356	3356	8 This subparagraph (P) is exempt from the
3357	3357	9 provisions of Section 250;
3358	3358	10 (Q) The amount of (i) any interest income (net of
3359	3359	11 the deductions allocable thereto) taken into account
3360	3360	12 for the taxable year with respect to a transaction
3361	3361	13 with a taxpayer that is required to make an addition
3362	3362	14 modification with respect to such transaction under
3363	3363	15 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
3364	3364	16 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
3365	3365	17 the amount of such addition modification and (ii) any
3366	3366	18 income from intangible property (net of the deductions
3367	3367	19 allocable thereto) taken into account for the taxable
3368	3368	20 year with respect to a transaction with a taxpayer
3369	3369	21 that is required to make an addition modification with
3370	3370	22 respect to such transaction under Section
3371	3371	23 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
3372	3372	24 203(d)(2)(D-8), but not to exceed the amount of such
3373	3373	25 addition modification. This subparagraph (Q) is exempt
3374	3374	26 from Section 250;
3375	3375
3376	3376
3377	3377
3378	3378
3379	3379
3380	3380	HB3088 - 93 - LRB103 05738 HLH 50758 b
3381	3381
3382	3382
3383	3383	HB3088- 94 -LRB103 05738 HLH 50758 b HB3088 - 94 - LRB103 05738 HLH 50758 b
3384	3384	HB3088 - 94 - LRB103 05738 HLH 50758 b
3385	3385	1 (R) An amount equal to the interest income taken
3386	3386	2 into account for the taxable year (net of the
3387	3387	3 deductions allocable thereto) with respect to
3388	3388	4 transactions with (i) a foreign person who would be a
3389	3389	5 member of the taxpayer's unitary business group but
3390	3390	6 for the fact that the foreign person's business
3391	3391	7 activity outside the United States is 80% or more of
3392	3392	8 that person's total business activity and (ii) for
3393	3393	9 taxable years ending on or after December 31, 2008, to
3394	3394	10 a person who would be a member of the same unitary
3395	3395	11 business group but for the fact that the person is
3396	3396	12 prohibited under Section 1501(a)(27) from being
3397	3397	13 included in the unitary business group because he or
3398	3398	14 she is ordinarily required to apportion business
3399	3399	15 income under different subsections of Section 304, but
3400	3400	16 not to exceed the addition modification required to be
3401	3401	17 made for the same taxable year under Section
3402	3402	18 203(d)(2)(D-7) for interest paid, accrued, or
3403	3403	19 incurred, directly or indirectly, to the same person.
3404	3404	20 This subparagraph (R) is exempt from Section 250;
3405	3405	21 (S) An amount equal to the income from intangible
3406	3406	22 property taken into account for the taxable year (net
3407	3407	23 of the deductions allocable thereto) with respect to
3408	3408	24 transactions with (i) a foreign person who would be a
3409	3409	25 member of the taxpayer's unitary business group but
3410	3410	26 for the fact that the foreign person's business
3411	3411
3412	3412
3413	3413
3414	3414
3415	3415
3416	3416	HB3088 - 94 - LRB103 05738 HLH 50758 b
3417	3417
3418	3418
3419	3419	HB3088- 95 -LRB103 05738 HLH 50758 b HB3088 - 95 - LRB103 05738 HLH 50758 b
3420	3420	HB3088 - 95 - LRB103 05738 HLH 50758 b
3421	3421	1 activity outside the United States is 80% or more of
3422	3422	2 that person's total business activity and (ii) for
3423	3423	3 taxable years ending on or after December 31, 2008, to
3424	3424	4 a person who would be a member of the same unitary
3425	3425	5 business group but for the fact that the person is
3426	3426	6 prohibited under Section 1501(a)(27) from being
3427	3427	7 included in the unitary business group because he or
3428	3428	8 she is ordinarily required to apportion business
3429	3429	9 income under different subsections of Section 304, but
3430	3430	10 not to exceed the addition modification required to be
3431	3431	11 made for the same taxable year under Section
3432	3432	12 203(d)(2)(D-8) for intangible expenses and costs paid,
3433	3433	13 accrued, or incurred, directly or indirectly, to the
3434	3434	14 same person. This subparagraph (S) is exempt from
3435	3435	15 Section 250; and
3436	3436	16 (T) For taxable years ending on or after December
3437	3437	17 31, 2011, in the case of a taxpayer who was required to
3438	3438	18 add back any insurance premiums under Section
3439	3439	19 203(d)(2)(D-9), such taxpayer may elect to subtract
3440	3440	20 that part of a reimbursement received from the
3441	3441	21 insurance company equal to the amount of the expense
3442	3442	22 or loss (including expenses incurred by the insurance
3443	3443	23 company) that would have been taken into account as a
3444	3444	24 deduction for federal income tax purposes if the
3445	3445	25 expense or loss had been uninsured. If a taxpayer
3446	3446	26 makes the election provided for by this subparagraph
3447	3447
3448	3448
3449	3449
3450	3450
3451	3451
3452	3452	HB3088 - 95 - LRB103 05738 HLH 50758 b
3453	3453
3454	3454
3455	3455	HB3088- 96 -LRB103 05738 HLH 50758 b HB3088 - 96 - LRB103 05738 HLH 50758 b
3456	3456	HB3088 - 96 - LRB103 05738 HLH 50758 b
3457	3457	1 (T), the insurer to which the premiums were paid must
3458	3458	2 add back to income the amount subtracted by the
3459	3459	3 taxpayer pursuant to this subparagraph (T). This
3460	3460	4 subparagraph (T) is exempt from the provisions of
3461	3461	5 Section 250.
3462	3462	6 (e) Gross income; adjusted gross income; taxable income.
3463	3463	7 (1) In general. Subject to the provisions of paragraph
3464	3464	8 (2) and subsection (b)(3), for purposes of this Section
3465	3465	9 and Section 803(e), a taxpayer's gross income, adjusted
3466	3466	10 gross income, or taxable income for the taxable year shall
3467	3467	11 mean the amount of gross income, adjusted gross income or
3468	3468	12 taxable income properly reportable for federal income tax
3469	3469	13 purposes for the taxable year under the provisions of the
3470	3470	14 Internal Revenue Code. Taxable income may be less than
3471	3471	15 zero. However, for taxable years ending on or after
3472	3472	16 December 31, 1986, net operating loss carryforwards from
3473	3473	17 taxable years ending prior to December 31, 1986, may not
3474	3474	18 exceed the sum of federal taxable income for the taxable
3475	3475	19 year before net operating loss deduction, plus the excess
3476	3476	20 of addition modifications over subtraction modifications
3477	3477	21 for the taxable year. For taxable years ending prior to
3478	3478	22 December 31, 1986, taxable income may never be an amount
3479	3479	23 in excess of the net operating loss for the taxable year as
3480	3480	24 defined in subsections (c) and (d) of Section 172 of the
3481	3481	25 Internal Revenue Code, provided that when taxable income
3482	3482
3483	3483
3484	3484
3485	3485
3486	3486
3487	3487	HB3088 - 96 - LRB103 05738 HLH 50758 b
3488	3488
3489	3489
3490	3490	HB3088- 97 -LRB103 05738 HLH 50758 b HB3088 - 97 - LRB103 05738 HLH 50758 b
3491	3491	HB3088 - 97 - LRB103 05738 HLH 50758 b
3492	3492	1 of a corporation (other than a Subchapter S corporation),
3493	3493	2 trust, or estate is less than zero and addition
3494	3494	3 modifications, other than those provided by subparagraph
3495	3495	4 (E) of paragraph (2) of subsection (b) for corporations or
3496	3496	5 subparagraph (E) of paragraph (2) of subsection (c) for
3497	3497	6 trusts and estates, exceed subtraction modifications, an
3498	3498	7 addition modification must be made under those
3499	3499	8 subparagraphs for any other taxable year to which the
3500	3500	9 taxable income less than zero (net operating loss) is
3501	3501	10 applied under Section 172 of the Internal Revenue Code or
3502	3502	11 under subparagraph (E) of paragraph (2) of this subsection
3503	3503	12 (e) applied in conjunction with Section 172 of the
3504	3504	13 Internal Revenue Code.
3505	3505	14 (2) Special rule. For purposes of paragraph (1) of
3506	3506	15 this subsection, the taxable income properly reportable
3507	3507	16 for federal income tax purposes shall mean:
3508	3508	17 (A) Certain life insurance companies. In the case
3509	3509	18 of a life insurance company subject to the tax imposed
3510	3510	19 by Section 801 of the Internal Revenue Code, life
3511	3511	20 insurance company taxable income, plus the amount of
3512	3512	21 distribution from pre-1984 policyholder surplus
3513	3513	22 accounts as calculated under Section 815a of the
3514	3514	23 Internal Revenue Code;
3515	3515	24 (B) Certain other insurance companies. In the case
3516	3516	25 of mutual insurance companies subject to the tax
3517	3517	26 imposed by Section 831 of the Internal Revenue Code,
3518	3518
3519	3519
3520	3520
3521	3521
3522	3522
3523	3523	HB3088 - 97 - LRB103 05738 HLH 50758 b
3524	3524
3525	3525
3526	3526	HB3088- 98 -LRB103 05738 HLH 50758 b HB3088 - 98 - LRB103 05738 HLH 50758 b
3527	3527	HB3088 - 98 - LRB103 05738 HLH 50758 b
3528	3528	1 insurance company taxable income;
3529	3529	2 (C) Regulated investment companies. In the case of
3530	3530	3 a regulated investment company subject to the tax
3531	3531	4 imposed by Section 852 of the Internal Revenue Code,
3532	3532	5 investment company taxable income;
3533	3533	6 (D) Real estate investment trusts. In the case of
3534	3534	7 a real estate investment trust subject to the tax
3535	3535	8 imposed by Section 857 of the Internal Revenue Code,
3536	3536	9 real estate investment trust taxable income;
3537	3537	10 (E) Consolidated corporations. In the case of a
3538	3538	11 corporation which is a member of an affiliated group
3539	3539	12 of corporations filing a consolidated income tax
3540	3540	13 return for the taxable year for federal income tax
3541	3541	14 purposes, taxable income determined as if such
3542	3542	15 corporation had filed a separate return for federal
3543	3543	16 income tax purposes for the taxable year and each
3544	3544	17 preceding taxable year for which it was a member of an
3545	3545	18 affiliated group. For purposes of this subparagraph,
3546	3546	19 the taxpayer's separate taxable income shall be
3547	3547	20 determined as if the election provided by Section
3548	3548	21 243(b)(2) of the Internal Revenue Code had been in
3549	3549	22 effect for all such years;
3550	3550	23 (F) Cooperatives. In the case of a cooperative
3551	3551	24 corporation or association, the taxable income of such
3552	3552	25 organization determined in accordance with the
3553	3553	26 provisions of Section 1381 through 1388 of the
3554	3554
3555	3555
3556	3556
3557	3557
3558	3558
3559	3559	HB3088 - 98 - LRB103 05738 HLH 50758 b
3560	3560
3561	3561
3562	3562	HB3088- 99 -LRB103 05738 HLH 50758 b HB3088 - 99 - LRB103 05738 HLH 50758 b
3563	3563	HB3088 - 99 - LRB103 05738 HLH 50758 b
3564	3564	1 Internal Revenue Code, but without regard to the
3565	3565	2 prohibition against offsetting losses from patronage
3566	3566	3 activities against income from nonpatronage
3567	3567	4 activities; except that a cooperative corporation or
3568	3568	5 association may make an election to follow its federal
3569	3569	6 income tax treatment of patronage losses and
3570	3570	7 nonpatronage losses. In the event such election is
3571	3571	8 made, such losses shall be computed and carried over
3572	3572	9 in a manner consistent with subsection (a) of Section
3573	3573	10 207 of this Act and apportioned by the apportionment
3574	3574	11 factor reported by the cooperative on its Illinois
3575	3575	12 income tax return filed for the taxable year in which
3576	3576	13 the losses are incurred. The election shall be
3577	3577	14 effective for all taxable years with original returns
3578	3578	15 due on or after the date of the election. In addition,
3579	3579	16 the cooperative may file an amended return or returns,
3580	3580	17 as allowed under this Act, to provide that the
3581	3581	18 election shall be effective for losses incurred or
3582	3582	19 carried forward for taxable years occurring prior to
3583	3583	20 the date of the election. Once made, the election may
3584	3584	21 only be revoked upon approval of the Director. The
3585	3585	22 Department shall adopt rules setting forth
3586	3586	23 requirements for documenting the elections and any
3587	3587	24 resulting Illinois net loss and the standards to be
3588	3588	25 used by the Director in evaluating requests to revoke
3589	3589	26 elections. Public Act 96-932 is declaratory of
3590	3590
3591	3591
3592	3592
3593	3593
3594	3594
3595	3595	HB3088 - 99 - LRB103 05738 HLH 50758 b
3596	3596
3597	3597
3598	3598	HB3088- 100 -LRB103 05738 HLH 50758 b HB3088 - 100 - LRB103 05738 HLH 50758 b
3599	3599	HB3088 - 100 - LRB103 05738 HLH 50758 b
3600	3600	1 existing law;
3601	3601	2 (G) Subchapter S corporations. In the case of: (i)
3602	3602	3 a Subchapter S corporation for which there is in
3603	3603	4 effect an election for the taxable year under Section
3604	3604	5 1362 of the Internal Revenue Code, the taxable income
3605	3605	6 of such corporation determined in accordance with
3606	3606	7 Section 1363(b) of the Internal Revenue Code, except
3607	3607	8 that taxable income shall take into account those
3608	3608	9 items which are required by Section 1363(b)(1) of the
3609	3609	10 Internal Revenue Code to be separately stated; and
3610	3610	11 (ii) a Subchapter S corporation for which there is in
3611	3611	12 effect a federal election to opt out of the provisions
3612	3612	13 of the Subchapter S Revision Act of 1982 and have
3613	3613	14 applied instead the prior federal Subchapter S rules
3614	3614	15 as in effect on July 1, 1982, the taxable income of
3615	3615	16 such corporation determined in accordance with the
3616	3616	17 federal Subchapter S rules as in effect on July 1,
3617	3617	18 1982; and
3618	3618	19 (H) Partnerships. In the case of a partnership,
3619	3619	20 taxable income determined in accordance with Section
3620	3620	21 703 of the Internal Revenue Code, except that taxable
3621	3621	22 income shall take into account those items which are
3622	3622	23 required by Section 703(a)(1) to be separately stated
3623	3623	24 but which would be taken into account by an individual
3624	3624	25 in calculating his taxable income.
3625	3625	26 (3) Recapture of business expenses on disposition of
3626	3626
3627	3627
3628	3628
3629	3629
3630	3630
3631	3631	HB3088 - 100 - LRB103 05738 HLH 50758 b
3632	3632
3633	3633
3634	3634	HB3088- 101 -LRB103 05738 HLH 50758 b HB3088 - 101 - LRB103 05738 HLH 50758 b
3635	3635	HB3088 - 101 - LRB103 05738 HLH 50758 b
3636	3636	1 asset or business. Notwithstanding any other law to the
3637	3637	2 contrary, if in prior years income from an asset or
3638	3638	3 business has been classified as business income and in a
3639	3639	4 later year is demonstrated to be non-business income, then
3640	3640	5 all expenses, without limitation, deducted in such later
3641	3641	6 year and in the 2 immediately preceding taxable years
3642	3642	7 related to that asset or business that generated the
3643	3643	8 non-business income shall be added back and recaptured as
3644	3644	9 business income in the year of the disposition of the
3645	3645	10 asset or business. Such amount shall be apportioned to
3646	3646	11 Illinois using the greater of the apportionment fraction
3647	3647	12 computed for the business under Section 304 of this Act
3648	3648	13 for the taxable year or the average of the apportionment
3649	3649	14 fractions computed for the business under Section 304 of
3650	3650	15 this Act for the taxable year and for the 2 immediately
3651	3651	16 preceding taxable years.
3652	3652	17 (f) Valuation limitation amount.
3653	3653	18 (1) In general. The valuation limitation amount
3654	3654	19 referred to in subsections (a)(2)(G), (c)(2)(I) and
3655	3655	20 (d)(2)(E) is an amount equal to:
3656	3656	21 (A) The sum of the pre-August 1, 1969 appreciation
3657	3657	22 amounts (to the extent consisting of gain reportable
3658	3658	23 under the provisions of Section 1245 or 1250 of the
3659	3659	24 Internal Revenue Code) for all property in respect of
3660	3660	25 which such gain was reported for the taxable year;
3661	3661
3662	3662
3663	3663
3664	3664
3665	3665
3666	3666	HB3088 - 101 - LRB103 05738 HLH 50758 b
3667	3667
3668	3668
3669	3669	HB3088- 102 -LRB103 05738 HLH 50758 b HB3088 - 102 - LRB103 05738 HLH 50758 b
3670	3670	HB3088 - 102 - LRB103 05738 HLH 50758 b
3671	3671	1 plus
3672	3672	2 (B) The lesser of (i) the sum of the pre-August 1,
3673	3673	3 1969 appreciation amounts (to the extent consisting of
3674	3674	4 capital gain) for all property in respect of which
3675	3675	5 such gain was reported for federal income tax purposes
3676	3676	6 for the taxable year, or (ii) the net capital gain for
3677	3677	7 the taxable year, reduced in either case by any amount
3678	3678	8 of such gain included in the amount determined under
3679	3679	9 subsection (a)(2)(F) or (c)(2)(H).
3680	3680	10 (2) Pre-August 1, 1969 appreciation amount.
3681	3681	11 (A) If the fair market value of property referred
3682	3682	12 to in paragraph (1) was readily ascertainable on
3683	3683	13 August 1, 1969, the pre-August 1, 1969 appreciation
3684	3684	14 amount for such property is the lesser of (i) the
3685	3685	15 excess of such fair market value over the taxpayer's
3686	3686	16 basis (for determining gain) for such property on that
3687	3687	17 date (determined under the Internal Revenue Code as in
3688	3688	18 effect on that date), or (ii) the total gain realized
3689	3689	19 and reportable for federal income tax purposes in
3690	3690	20 respect of the sale, exchange or other disposition of
3691	3691	21 such property.
3692	3692	22 (B) If the fair market value of property referred
3693	3693	23 to in paragraph (1) was not readily ascertainable on
3694	3694	24 August 1, 1969, the pre-August 1, 1969 appreciation
3695	3695	25 amount for such property is that amount which bears
3696	3696	26 the same ratio to the total gain reported in respect of
3697	3697
3698	3698
3699	3699
3700	3700
3701	3701
3702	3702	HB3088 - 102 - LRB103 05738 HLH 50758 b
3703	3703
3704	3704
3705	3705	HB3088- 103 -LRB103 05738 HLH 50758 b HB3088 - 103 - LRB103 05738 HLH 50758 b
3706	3706	HB3088 - 103 - LRB103 05738 HLH 50758 b
3707	3707	1 the property for federal income tax purposes for the
3708	3708	2 taxable year, as the number of full calendar months in
3709	3709	3 that part of the taxpayer's holding period for the
3710	3710	4 property ending July 31, 1969 bears to the number of
3711	3711	5 full calendar months in the taxpayer's entire holding
3712	3712	6 period for the property.
3713	3713	7 (C) The Department shall prescribe such
3714	3714	8 regulations as may be necessary to carry out the
3715	3715	9 purposes of this paragraph.
3716	3716	10 (g) Double deductions. Unless specifically provided
3717	3717	11 otherwise, nothing in this Section shall permit the same item
3718	3718	12 to be deducted more than once.
3719	3719	13 (h) Legislative intention. Except as expressly provided by
3720	3720	14 this Section there shall be no modifications or limitations on
3721	3721	15 the amounts of income, gain, loss or deduction taken into
3722	3722	16 account in determining gross income, adjusted gross income or
3723	3723	17 taxable income for federal income tax purposes for the taxable
3724	3724	18 year, or in the amount of such items entering into the
3725	3725	19 computation of base income and net income under this Act for
3726	3726	20 such taxable year, whether in respect of property values as of
3727	3727	21 August 1, 1969 or otherwise.
3728	3728	22 (Source: P.A. 101-9, eff. 6-5-19; 101-81, eff. 7-12-19;
3729	3729	23 102-16, eff. 6-17-21; 102-558, eff. 8-20-21; 102-658, eff.
3730	3730	24 8-27-21; 102-813, eff. 5-13-22; 102-1112, eff. 12-21-22.)
3731	3731
3732	3732
3733	3733
3734	3734
3735	3735
3736	3736	HB3088 - 103 - LRB103 05738 HLH 50758 b