Illinois 2023-2024 Regular Session

Illinois House Bill HB3580 Compare Versions

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

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1	1	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3580 Introduced , by Rep. Blaine Wilhour SYNOPSIS AS INTRODUCED: 35 ILCS 5/203 from Ch. 120, par. 2-203 Amends the Illinois Income Tax Act. Provides that the amendatory Act may be referred to as the Reshore Our Supply Chains Tax Reform Act. In specified provisions concerning base income, provides that a taxpayer may claim a depreciation deduction for federal income tax purposes. LRB103 05339 SPS 50358 b A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3580 Introduced , by Rep. Blaine Wilhour 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. Provides that the amendatory Act may be referred to as the Reshore Our Supply Chains Tax Reform Act. In specified provisions concerning base income, provides that a taxpayer may claim a depreciation deduction for federal income tax purposes. LRB103 05339 SPS 50358 b LRB103 05339 SPS 50358 b A BILL FOR
2	2	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3580 Introduced , by Rep. Blaine Wilhour 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. Provides that the amendatory Act may be referred to as the Reshore Our Supply Chains Tax Reform Act. In specified provisions concerning base income, provides that a taxpayer may claim a depreciation deduction for federal income tax purposes.
6	6	LRB103 05339 SPS 50358 b LRB103 05339 SPS 50358 b
7	7	LRB103 05339 SPS 50358 b
8	8	A BILL FOR
9	9	HB3580LRB103 05339 SPS 50358 b HB3580 LRB103 05339 SPS 50358 b
10	10	HB3580 LRB103 05339 SPS 50358 b
11	11	1 AN ACT concerning revenue.
12	12	2 Be it enacted by the People of the State of Illinois,
13	13	3 represented in the General Assembly:
14	14	4 Section 1. This Act may be referred to as the Reshore Our
15	15	5 Supply Chains Tax Reform Act.
16	16	6 Section 5. The Illinois Income Tax Act is amended by
17	17	7 changing Section 203 as follows:
18	18	8 (35 ILCS 5/203) (from Ch. 120, par. 2-203)
19	19	9 Sec. 203. Base income defined.
20	20	10 (a) Individuals.
21	21	11 (1) In general. In the case of an individual, base
22	22	12 income means an amount equal to the taxpayer's adjusted
23	23	13 gross income for the taxable year as modified by paragraph
24	24	14 (2).
25	25	15 (2) Modifications. The adjusted gross income referred
26	26	16 to in paragraph (1) shall be modified by adding thereto
27	27	17 the sum of the following amounts:
28	28	18 (A) An amount equal to all amounts paid or accrued
29	29	19 to the taxpayer as interest or dividends during the
30	30	20 taxable year to the extent excluded from gross income
31	31	21 in the computation of adjusted gross income, except
32	32	22 stock dividends of qualified public utilities
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36	36	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3580 Introduced , by Rep. Blaine Wilhour SYNOPSIS AS INTRODUCED:
37	37	35 ILCS 5/203 from Ch. 120, par. 2-203 35 ILCS 5/203 from Ch. 120, par. 2-203
38	38	35 ILCS 5/203 from Ch. 120, par. 2-203
39	39	Amends the Illinois Income Tax Act. Provides that the amendatory Act may be referred to as the Reshore Our Supply Chains Tax Reform Act. In specified provisions concerning base income, provides that a taxpayer may claim a depreciation deduction for federal income tax purposes.
40	40	LRB103 05339 SPS 50358 b LRB103 05339 SPS 50358 b
41	41	LRB103 05339 SPS 50358 b
42	42	A BILL FOR
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48	48	35 ILCS 5/203 from Ch. 120, par. 2-203
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67	67	1 described in Section 305(e) of the Internal Revenue
68	68	2 Code;
69	69	3 (B) An amount equal to the amount of tax imposed by
70	70	4 this Act to the extent deducted from gross income in
71	71	5 the computation of adjusted gross income for the
72	72	6 taxable year;
73	73	7 (C) An amount equal to the amount received during
74	74	8 the taxable year as a recovery or refund of real
75	75	9 property taxes paid with respect to the taxpayer's
76	76	10 principal residence under the Revenue Act of 1939 and
77	77	11 for which a deduction was previously taken under
78	78	12 subparagraph (L) of this paragraph (2) prior to July
79	79	13 1, 1991, the retrospective application date of Article
80	80	14 4 of Public Act 87-17. In the case of multi-unit or
81	81	15 multi-use structures and farm dwellings, the taxes on
82	82	16 the taxpayer's principal residence shall be that
83	83	17 portion of the total taxes for the entire property
84	84	18 which is attributable to such principal residence;
85	85	19 (D) An amount equal to the amount of the capital
86	86	20 gain deduction allowable under the Internal Revenue
87	87	21 Code, to the extent deducted from gross income in the
88	88	22 computation of adjusted gross income;
89	89	23 (D-5) An amount, to the extent not included in
90	90	24 adjusted gross income, equal to the amount of money
91	91	25 withdrawn by the taxpayer in the taxable year from a
92	92	26 medical care savings account and the interest earned
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103	103	1 on the account in the taxable year of a withdrawal
104	104	2 pursuant to subsection (b) of Section 20 of the
105	105	3 Medical Care Savings Account Act or subsection (b) of
106	106	4 Section 20 of the Medical Care Savings Account Act of
107	107	5 2000;
108	108	6 (D-10) For taxable years ending after December 31,
109	109	7 1997, an amount equal to any eligible remediation
110	110	8 costs that the individual deducted in computing
111	111	9 adjusted gross income and for which the individual
112	112	10 claims a credit under subsection (l) of Section 201;
113	113	11 (D-15) For taxable years 2001 and thereafter, an
114	114	12 amount equal to the bonus depreciation deduction taken
115	115	13 on the taxpayer's federal income tax return for the
116	116	14 taxable year under subsection (k) of Section 168 of
117	117	15 the Internal Revenue Code;
118	118	16 (D-16) If the taxpayer sells, transfers, abandons,
119	119	17 or otherwise disposes of property for which the
120	120	18 taxpayer was required in any taxable year to make an
121	121	19 addition modification under subparagraph (D-15), then
122	122	20 an amount equal to the aggregate amount of the
123	123	21 deductions taken in all taxable years under
124	124	22 subparagraph (Z) with respect to that property.
125	125	23 If the taxpayer continues to own property through
126	126	24 the last day of the last tax year for which a taxpayer
127	127	25 may claim a depreciation deduction for federal income
128	128	26 tax purposes a subtraction is allowed with respect to
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139	139	1 that property under subparagraph (Z) and for which the
140	140	2 taxpayer was allowed in any taxable year to make a
141	141	3 subtraction modification under subparagraph (Z), then
142	142	4 an amount equal to that subtraction modification.
143	143	5 The taxpayer is required to make the addition
144	144	6 modification under this subparagraph only once with
145	145	7 respect to any one piece of property;
146	146	8 (D-17) An amount equal to the amount otherwise
147	147	9 allowed as a deduction in computing base income for
148	148	10 interest paid, accrued, or incurred, directly or
149	149	11 indirectly, (i) for taxable years ending on or after
150	150	12 December 31, 2004, to a foreign person who would be a
151	151	13 member of the same unitary business group but for the
152	152	14 fact that foreign person's business activity outside
153	153	15 the United States is 80% or more of the foreign
154	154	16 person's total business activity and (ii) for taxable
155	155	17 years ending on or after December 31, 2008, to a person
156	156	18 who would be a member of the same unitary business
157	157	19 group but for the fact that the person is prohibited
158	158	20 under Section 1501(a)(27) from being included in the
159	159	21 unitary business group because he or she is ordinarily
160	160	22 required to apportion business income under different
161	161	23 subsections of Section 304. The addition modification
162	162	24 required by this subparagraph shall be reduced to the
163	163	25 extent that dividends were included in base income of
164	164	26 the unitary group for the same taxable year and
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175	175	1 received by the taxpayer or by a member of the
176	176	2 taxpayer's unitary business group (including amounts
177	177	3 included in gross income under Sections 951 through
178	178	4 964 of the Internal Revenue Code and amounts included
179	179	5 in gross income under Section 78 of the Internal
180	180	6 Revenue Code) with respect to the stock of the same
181	181	7 person to whom the interest was paid, accrued, or
182	182	8 incurred.
183	183	9 This paragraph shall not apply to the following:
184	184	10 (i) an item of interest paid, accrued, or
185	185	11 incurred, directly or indirectly, to a person who
186	186	12 is subject in a foreign country or state, other
187	187	13 than a state which requires mandatory unitary
188	188	14 reporting, to a tax on or measured by net income
189	189	15 with respect to such interest; or
190	190	16 (ii) an item of interest paid, accrued, or
191	191	17 incurred, directly or indirectly, to a person if
192	192	18 the taxpayer can establish, based on a
193	193	19 preponderance of the evidence, both of the
194	194	20 following:
195	195	21 (a) the person, during the same taxable
196	196	22 year, paid, accrued, or incurred, the interest
197	197	23 to a person that is not a related member, and
198	198	24 (b) the transaction giving rise to the
199	199	25 interest expense between the taxpayer and the
200	200	26 person did not have as a principal purpose the
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211	211	1 avoidance of Illinois income tax, and is paid
212	212	2 pursuant to a contract or agreement that
213	213	3 reflects an arm's-length interest rate and
214	214	4 terms; or
215	215	5 (iii) the taxpayer can establish, based on
216	216	6 clear and convincing evidence, that the interest
217	217	7 paid, accrued, or incurred relates to a contract
218	218	8 or agreement entered into at arm's-length rates
219	219	9 and terms and the principal purpose for the
220	220	10 payment is not federal or Illinois tax avoidance;
221	221	11 or
222	222	12 (iv) an item of interest paid, accrued, or
223	223	13 incurred, directly or indirectly, to a person if
224	224	14 the taxpayer establishes by clear and convincing
225	225	15 evidence that the adjustments are unreasonable; or
226	226	16 if the taxpayer and the Director agree in writing
227	227	17 to the application or use of an alternative method
228	228	18 of apportionment under Section 304(f).
229	229	19 Nothing in this subsection shall preclude the
230	230	20 Director from making any other adjustment
231	231	21 otherwise allowed under Section 404 of this Act
232	232	22 for any tax year beginning after the effective
233	233	23 date of this amendment provided such adjustment is
234	234	24 made pursuant to regulation adopted by the
235	235	25 Department and such regulations provide methods
236	236	26 and standards by which the Department will utilize
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247	247	1 its authority under Section 404 of this Act;
248	248	2 (D-18) An amount equal to the amount of intangible
249	249	3 expenses and costs otherwise allowed as a deduction in
250	250	4 computing base income, and that were paid, accrued, or
251	251	5 incurred, directly or indirectly, (i) for taxable
252	252	6 years ending on or after December 31, 2004, to a
253	253	7 foreign person who would be a member of the same
254	254	8 unitary business group but for the fact that the
255	255	9 foreign person's business activity outside the United
256	256	10 States is 80% or more of that person's total business
257	257	11 activity and (ii) for taxable years ending on or after
258	258	12 December 31, 2008, to a person who would be a member of
259	259	13 the same unitary business group but for the fact that
260	260	14 the person is prohibited under Section 1501(a)(27)
261	261	15 from being included in the unitary business group
262	262	16 because he or she is ordinarily required to apportion
263	263	17 business income under different subsections of Section
264	264	18 304. The addition modification required by this
265	265	19 subparagraph shall be reduced to the extent that
266	266	20 dividends were included in base income of the unitary
267	267	21 group for the same taxable year and received by the
268	268	22 taxpayer or by a member of the taxpayer's unitary
269	269	23 business group (including amounts included in gross
270	270	24 income under Sections 951 through 964 of the Internal
271	271	25 Revenue Code and amounts included in gross income
272	272	26 under Section 78 of the Internal Revenue Code) with
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283	283	1 respect to the stock of the same person to whom the
284	284	2 intangible expenses and costs were directly or
285	285	3 indirectly paid, incurred, or accrued. The preceding
286	286	4 sentence does not apply to the extent that the same
287	287	5 dividends caused a reduction to the addition
288	288	6 modification required under Section 203(a)(2)(D-17) of
289	289	7 this Act. As used in this subparagraph, the term
290	290	8 "intangible expenses and costs" includes (1) expenses,
291	291	9 losses, and costs for, or related to, the direct or
292	292	10 indirect acquisition, use, maintenance or management,
293	293	11 ownership, sale, exchange, or any other disposition of
294	294	12 intangible property; (2) losses incurred, directly or
295	295	13 indirectly, from factoring transactions or discounting
296	296	14 transactions; (3) royalty, patent, technical, and
297	297	15 copyright fees; (4) licensing fees; and (5) other
298	298	16 similar expenses and costs. For purposes of this
299	299	17 subparagraph, "intangible property" includes patents,
300	300	18 patent applications, trade names, trademarks, service
301	301	19 marks, copyrights, mask works, trade secrets, and
302	302	20 similar types of intangible assets.
303	303	21 This paragraph shall not apply to the following:
304	304	22 (i) any item of intangible expenses or costs
305	305	23 paid, accrued, or incurred, directly or
306	306	24 indirectly, from a transaction with a person who
307	307	25 is subject in a foreign country or state, other
308	308	26 than a state which requires mandatory unitary
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319	319	1 reporting, to a tax on or measured by net income
320	320	2 with respect to such item; or
321	321	3 (ii) any item of intangible expense or cost
322	322	4 paid, accrued, or incurred, directly or
323	323	5 indirectly, if the taxpayer can establish, based
324	324	6 on a preponderance of the evidence, both of the
325	325	7 following:
326	326	8 (a) the person during the same taxable
327	327	9 year paid, accrued, or incurred, the
328	328	10 intangible expense or cost to a person that is
329	329	11 not a related member, and
330	330	12 (b) the transaction giving rise to the
331	331	13 intangible expense or cost between the
332	332	14 taxpayer and the person did not have as a
333	333	15 principal purpose the avoidance of Illinois
334	334	16 income tax, and is paid pursuant to a contract
335	335	17 or agreement that reflects arm's-length terms;
336	336	18 or
337	337	19 (iii) any item of intangible expense or cost
338	338	20 paid, accrued, or incurred, directly or
339	339	21 indirectly, from a transaction with a person if
340	340	22 the taxpayer establishes by clear and convincing
341	341	23 evidence, that the adjustments are unreasonable;
342	342	24 or if the taxpayer and the Director agree in
343	343	25 writing to the application or use of an
344	344	26 alternative method of apportionment under Section
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355	355	1 304(f);
356	356	2 Nothing in this subsection shall preclude the
357	357	3 Director from making any other adjustment
358	358	4 otherwise allowed under Section 404 of this Act
359	359	5 for any tax year beginning after the effective
360	360	6 date of this amendment provided such adjustment is
361	361	7 made pursuant to regulation adopted by the
362	362	8 Department and such regulations provide methods
363	363	9 and standards by which the Department will utilize
364	364	10 its authority under Section 404 of this Act;
365	365	11 (D-19) For taxable years ending on or after
366	366	12 December 31, 2008, an amount equal to the amount of
367	367	13 insurance premium expenses and costs otherwise allowed
368	368	14 as a deduction in computing base income, and that were
369	369	15 paid, accrued, or incurred, directly or indirectly, to
370	370	16 a person who would be a member of the same unitary
371	371	17 business group but for the fact that the person is
372	372	18 prohibited under Section 1501(a)(27) from being
373	373	19 included in the unitary business group because he or
374	374	20 she is ordinarily required to apportion business
375	375	21 income under different subsections of Section 304. The
376	376	22 addition modification required by this subparagraph
377	377	23 shall be reduced to the extent that dividends were
378	378	24 included in base income of the unitary group for the
379	379	25 same taxable year and received by the taxpayer or by a
380	380	26 member of the taxpayer's unitary business group
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391	391	1 (including amounts included in gross income under
392	392	2 Sections 951 through 964 of the Internal Revenue Code
393	393	3 and amounts included in gross income under Section 78
394	394	4 of the Internal Revenue Code) with respect to the
395	395	5 stock of the same person to whom the premiums and costs
396	396	6 were directly or indirectly paid, incurred, or
397	397	7 accrued. The preceding sentence does not apply to the
398	398	8 extent that the same dividends caused a reduction to
399	399	9 the addition modification required under Section
400	400	10 203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this
401	401	11 Act;
402	402	12 (D-20) For taxable years beginning on or after
403	403	13 January 1, 2002 and ending on or before December 31,
404	404	14 2006, in the case of a distribution from a qualified
405	405	15 tuition program under Section 529 of the Internal
406	406	16 Revenue Code, other than (i) a distribution from a
407	407	17 College Savings Pool created under Section 16.5 of the
408	408	18 State Treasurer Act or (ii) a distribution from the
409	409	19 Illinois Prepaid Tuition Trust Fund, an amount equal
410	410	20 to the amount excluded from gross income under Section
411	411	21 529(c)(3)(B). For taxable years beginning on or after
412	412	22 January 1, 2007, in the case of a distribution from a
413	413	23 qualified tuition program under Section 529 of the
414	414	24 Internal Revenue Code, other than (i) a distribution
415	415	25 from a College Savings Pool created under Section 16.5
416	416	26 of the State Treasurer Act, (ii) a distribution from
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427	427	1 the Illinois Prepaid Tuition Trust Fund, or (iii) a
428	428	2 distribution from a qualified tuition program under
429	429	3 Section 529 of the Internal Revenue Code that (I)
430	430	4 adopts and determines that its offering materials
431	431	5 comply with the College Savings Plans Network's
432	432	6 disclosure principles and (II) has made reasonable
433	433	7 efforts to inform in-state residents of the existence
434	434	8 of in-state qualified tuition programs by informing
435	435	9 Illinois residents directly and, where applicable, to
436	436	10 inform financial intermediaries distributing the
437	437	11 program to inform in-state residents of the existence
438	438	12 of in-state qualified tuition programs at least
439	439	13 annually, an amount equal to the amount excluded from
440	440	14 gross income under Section 529(c)(3)(B).
441	441	15 For the purposes of this subparagraph (D-20), a
442	442	16 qualified tuition program has made reasonable efforts
443	443	17 if it makes disclosures (which may use the term
444	444	18 "in-state program" or "in-state plan" and need not
445	445	19 specifically refer to Illinois or its qualified
446	446	20 programs by name) (i) directly to prospective
447	447	21 participants in its offering materials or makes a
448	448	22 public disclosure, such as a website posting; and (ii)
449	449	23 where applicable, to intermediaries selling the
450	450	24 out-of-state program in the same manner that the
451	451	25 out-of-state program distributes its offering
452	452	26 materials;
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463	463	1 (D-20.5) For taxable years beginning on or after
464	464	2 January 1, 2018, in the case of a distribution from a
465	465	3 qualified ABLE program under Section 529A of the
466	466	4 Internal Revenue Code, other than a distribution from
467	467	5 a qualified ABLE program created under Section 16.6 of
468	468	6 the State Treasurer Act, an amount equal to the amount
469	469	7 excluded from gross income under Section 529A(c)(1)(B)
470	470	8 of the Internal Revenue Code;
471	471	9 (D-21) For taxable years beginning on or after
472	472	10 January 1, 2007, in the case of transfer of moneys from
473	473	11 a qualified tuition program under Section 529 of the
474	474	12 Internal Revenue Code that is administered by the
475	475	13 State to an out-of-state program, an amount equal to
476	476	14 the amount of moneys previously deducted from base
477	477	15 income under subsection (a)(2)(Y) of this Section;
478	478	16 (D-21.5) For taxable years beginning on or after
479	479	17 January 1, 2018, in the case of the transfer of moneys
480	480	18 from a qualified tuition program under Section 529 or
481	481	19 a qualified ABLE program under Section 529A of the
482	482	20 Internal Revenue Code that is administered by this
483	483	21 State to an ABLE account established under an
484	484	22 out-of-state ABLE account program, an amount equal to
485	485	23 the contribution component of the transferred amount
486	486	24 that was previously deducted from base income under
487	487	25 subsection (a)(2)(Y) or subsection (a)(2)(HH) of this
488	488	26 Section;
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499	499	1 (D-22) For taxable years beginning on or after
500	500	2 January 1, 2009, and prior to January 1, 2018, in the
501	501	3 case of a nonqualified withdrawal or refund of moneys
502	502	4 from a qualified tuition program under Section 529 of
503	503	5 the Internal Revenue Code administered by the State
504	504	6 that is not used for qualified expenses at an eligible
505	505	7 education institution, an amount equal to the
506	506	8 contribution component of the nonqualified withdrawal
507	507	9 or refund that was previously deducted from base
508	508	10 income under subsection (a)(2)(y) of this Section,
509	509	11 provided that the withdrawal or refund did not result
510	510	12 from the beneficiary's death or disability. For
511	511	13 taxable years beginning on or after January 1, 2018:
512	512	14 (1) in the case of a nonqualified withdrawal or
513	513	15 refund, as defined under Section 16.5 of the State
514	514	16 Treasurer Act, of moneys from a qualified tuition
515	515	17 program under Section 529 of the Internal Revenue Code
516	516	18 administered by the State, an amount equal to the
517	517	19 contribution component of the nonqualified withdrawal
518	518	20 or refund that was previously deducted from base
519	519	21 income under subsection (a)(2)(Y) of this Section, and
520	520	22 (2) in the case of a nonqualified withdrawal or refund
521	521	23 from a qualified ABLE program under Section 529A of
522	522	24 the Internal Revenue Code administered by the State
523	523	25 that is not used for qualified disability expenses, an
524	524	26 amount equal to the contribution component of the
525	525
526	526
527	527
528	528
529	529
530	530	HB3580 - 14 - LRB103 05339 SPS 50358 b
531	531
532	532
533	533	HB3580- 15 -LRB103 05339 SPS 50358 b HB3580 - 15 - LRB103 05339 SPS 50358 b
534	534	HB3580 - 15 - LRB103 05339 SPS 50358 b
535	535	1 nonqualified withdrawal or refund that was previously
536	536	2 deducted from base income under subsection (a)(2)(HH)
537	537	3 of this Section;
538	538	4 (D-23) An amount equal to the credit allowable to
539	539	5 the taxpayer under Section 218(a) of this Act,
540	540	6 determined without regard to Section 218(c) of this
541	541	7 Act;
542	542	8 (D-24) For taxable years ending on or after
543	543	9 December 31, 2017, an amount equal to the deduction
544	544	10 allowed under Section 199 of the Internal Revenue Code
545	545	11 for the taxable year;
546	546	12 (D-25) In the case of a resident, an amount equal
547	547	13 to the amount of tax for which a credit is allowed
548	548	14 pursuant to Section 201(p)(7) of this Act;
549	549	15 and by deducting from the total so obtained the sum of the
550	550	16 following amounts:
551	551	17 (E) For taxable years ending before December 31,
552	552	18 2001, any amount included in such total in respect of
553	553	19 any compensation (including but not limited to any
554	554	20 compensation paid or accrued to a serviceman while a
555	555	21 prisoner of war or missing in action) paid to a
556	556	22 resident by reason of being on active duty in the Armed
557	557	23 Forces of the United States and in respect of any
558	558	24 compensation paid or accrued to a resident who as a
559	559	25 governmental employee was a prisoner of war or missing
560	560	26 in action, and in respect of any compensation paid to a
561	561
562	562
563	563
564	564
565	565
566	566	HB3580 - 15 - LRB103 05339 SPS 50358 b
567	567
568	568
569	569	HB3580- 16 -LRB103 05339 SPS 50358 b HB3580 - 16 - LRB103 05339 SPS 50358 b
570	570	HB3580 - 16 - LRB103 05339 SPS 50358 b
571	571	1 resident in 1971 or thereafter for annual training
572	572	2 performed pursuant to Sections 502 and 503, Title 32,
573	573	3 United States Code as a member of the Illinois
574	574	4 National Guard or, beginning with taxable years ending
575	575	5 on or after December 31, 2007, the National Guard of
576	576	6 any other state. For taxable years ending on or after
577	577	7 December 31, 2001, any amount included in such total
578	578	8 in respect of any compensation (including but not
579	579	9 limited to any compensation paid or accrued to a
580	580	10 serviceman while a prisoner of war or missing in
581	581	11 action) paid to a resident by reason of being a member
582	582	12 of any component of the Armed Forces of the United
583	583	13 States and in respect of any compensation paid or
584	584	14 accrued to a resident who as a governmental employee
585	585	15 was a prisoner of war or missing in action, and in
586	586	16 respect of any compensation paid to a resident in 2001
587	587	17 or thereafter by reason of being a member of the
588	588	18 Illinois National Guard or, beginning with taxable
589	589	19 years ending on or after December 31, 2007, the
590	590	20 National Guard of any other state. The provisions of
591	591	21 this subparagraph (E) are exempt from the provisions
592	592	22 of Section 250;
593	593	23 (F) An amount equal to all amounts included in
594	594	24 such total pursuant to the provisions of Sections
595	595	25 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
596	596	26 408 of the Internal Revenue Code, or included in such
597	597
598	598
599	599
600	600
601	601
602	602	HB3580 - 16 - LRB103 05339 SPS 50358 b
603	603
604	604
605	605	HB3580- 17 -LRB103 05339 SPS 50358 b HB3580 - 17 - LRB103 05339 SPS 50358 b
606	606	HB3580 - 17 - LRB103 05339 SPS 50358 b
607	607	1 total as distributions under the provisions of any
608	608	2 retirement or disability plan for employees of any
609	609	3 governmental agency or unit, or retirement payments to
610	610	4 retired partners, which payments are excluded in
611	611	5 computing net earnings from self employment by Section
612	612	6 1402 of the Internal Revenue Code and regulations
613	613	7 adopted pursuant thereto;
614	614	8 (G) The valuation limitation amount;
615	615	9 (H) An amount equal to the amount of any tax
616	616	10 imposed by this Act which was refunded to the taxpayer
617	617	11 and included in such total for the taxable year;
618	618	12 (I) An amount equal to all amounts included in
619	619	13 such total pursuant to the provisions of Section 111
620	620	14 of the Internal Revenue Code as a recovery of items
621	621	15 previously deducted from adjusted gross income in the
622	622	16 computation of taxable income;
623	623	17 (J) An amount equal to those dividends included in
624	624	18 such total which were paid by a corporation which
625	625	19 conducts business operations in a River Edge
626	626	20 Redevelopment Zone or zones created under the River
627	627	21 Edge Redevelopment Zone Act, and conducts
628	628	22 substantially all of its operations in a River Edge
629	629	23 Redevelopment Zone or zones. This subparagraph (J) is
630	630	24 exempt from the provisions of Section 250;
631	631	25 (K) An amount equal to those dividends included in
632	632	26 such total that were paid by a corporation that
633	633
634	634
635	635
636	636
637	637
638	638	HB3580 - 17 - LRB103 05339 SPS 50358 b
639	639
640	640
641	641	HB3580- 18 -LRB103 05339 SPS 50358 b HB3580 - 18 - LRB103 05339 SPS 50358 b
642	642	HB3580 - 18 - LRB103 05339 SPS 50358 b
643	643	1 conducts business operations in a federally designated
644	644	2 Foreign Trade Zone or Sub-Zone and that is designated
645	645	3 a High Impact Business located in Illinois; provided
646	646	4 that dividends eligible for the deduction provided in
647	647	5 subparagraph (J) of paragraph (2) of this subsection
648	648	6 shall not be eligible for the deduction provided under
649	649	7 this subparagraph (K);
650	650	8 (L) For taxable years ending after December 31,
651	651	9 1983, an amount equal to all social security benefits
652	652	10 and railroad retirement benefits included in such
653	653	11 total pursuant to Sections 72(r) and 86 of the
654	654	12 Internal Revenue Code;
655	655	13 (M) With the exception of any amounts subtracted
656	656	14 under subparagraph (N), an amount equal to the sum of
657	657	15 all amounts disallowed as deductions by (i) Sections
658	658	16 171(a)(2) and 265(a)(2) of the Internal Revenue Code,
659	659	17 and all amounts of expenses allocable to interest and
660	660	18 disallowed as deductions by Section 265(a)(1) of the
661	661	19 Internal Revenue Code; and (ii) for taxable years
662	662	20 ending on or after August 13, 1999, Sections
663	663	21 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
664	664	22 Internal Revenue Code, plus, for taxable years ending
665	665	23 on or after December 31, 2011, Section 45G(e)(3) of
666	666	24 the Internal Revenue Code and, for taxable years
667	667	25 ending on or after December 31, 2008, any amount
668	668	26 included in gross income under Section 87 of the
669	669
670	670
671	671
672	672
673	673
674	674	HB3580 - 18 - LRB103 05339 SPS 50358 b
675	675
676	676
677	677	HB3580- 19 -LRB103 05339 SPS 50358 b HB3580 - 19 - LRB103 05339 SPS 50358 b
678	678	HB3580 - 19 - LRB103 05339 SPS 50358 b
679	679	1 Internal Revenue Code; the provisions of this
680	680	2 subparagraph are exempt from the provisions of Section
681	681	3 250;
682	682	4 (N) An amount equal to all amounts included in
683	683	5 such total which are exempt from taxation by this
684	684	6 State either by reason of its statutes or Constitution
685	685	7 or by reason of the Constitution, treaties or statutes
686	686	8 of the United States; provided that, in the case of any
687	687	9 statute of this State that exempts income derived from
688	688	10 bonds or other obligations from the tax imposed under
689	689	11 this Act, the amount exempted shall be the interest
690	690	12 net of bond premium amortization;
691	691	13 (O) An amount equal to any contribution made to a
692	692	14 job training project established pursuant to the Tax
693	693	15 Increment Allocation Redevelopment Act;
694	694	16 (P) An amount equal to the amount of the deduction
695	695	17 used to compute the federal income tax credit for
696	696	18 restoration of substantial amounts held under claim of
697	697	19 right for the taxable year pursuant to Section 1341 of
698	698	20 the Internal Revenue Code or of any itemized deduction
699	699	21 taken from adjusted gross income in the computation of
700	700	22 taxable income for restoration of substantial amounts
701	701	23 held under claim of right for the taxable year;
702	702	24 (Q) An amount equal to any amounts included in
703	703	25 such total, received by the taxpayer as an
704	704	26 acceleration in the payment of life, endowment or
705	705
706	706
707	707
708	708
709	709
710	710	HB3580 - 19 - LRB103 05339 SPS 50358 b
711	711
712	712
713	713	HB3580- 20 -LRB103 05339 SPS 50358 b HB3580 - 20 - LRB103 05339 SPS 50358 b
714	714	HB3580 - 20 - LRB103 05339 SPS 50358 b
715	715	1 annuity benefits in advance of the time they would
716	716	2 otherwise be payable as an indemnity for a terminal
717	717	3 illness;
718	718	4 (R) An amount equal to the amount of any federal or
719	719	5 State bonus paid to veterans of the Persian Gulf War;
720	720	6 (S) An amount, to the extent included in adjusted
721	721	7 gross income, equal to the amount of a contribution
722	722	8 made in the taxable year on behalf of the taxpayer to a
723	723	9 medical care savings account established under the
724	724	10 Medical Care Savings Account Act or the Medical Care
725	725	11 Savings Account Act of 2000 to the extent the
726	726	12 contribution is accepted by the account administrator
727	727	13 as provided in that Act;
728	728	14 (T) An amount, to the extent included in adjusted
729	729	15 gross income, equal to the amount of interest earned
730	730	16 in the taxable year on a medical care savings account
731	731	17 established under the Medical Care Savings Account Act
732	732	18 or the Medical Care Savings Account Act of 2000 on
733	733	19 behalf of the taxpayer, other than interest added
734	734	20 pursuant to item (D-5) of this paragraph (2);
735	735	21 (U) For one taxable year beginning on or after
736	736	22 January 1, 1994, an amount equal to the total amount of
737	737	23 tax imposed and paid under subsections (a) and (b) of
738	738	24 Section 201 of this Act on grant amounts received by
739	739	25 the taxpayer under the Nursing Home Grant Assistance
740	740	26 Act during the taxpayer's taxable years 1992 and 1993;
741	741
742	742
743	743
744	744
745	745
746	746	HB3580 - 20 - LRB103 05339 SPS 50358 b
747	747
748	748
749	749	HB3580- 21 -LRB103 05339 SPS 50358 b HB3580 - 21 - LRB103 05339 SPS 50358 b
750	750	HB3580 - 21 - LRB103 05339 SPS 50358 b
751	751	1 (V) Beginning with tax years ending on or after
752	752	2 December 31, 1995 and ending with tax years ending on
753	753	3 or before December 31, 2004, an amount equal to the
754	754	4 amount paid by a taxpayer who is a self-employed
755	755	5 taxpayer, a partner of a partnership, or a shareholder
756	756	6 in a Subchapter S corporation for health insurance or
757	757	7 long-term care insurance for that taxpayer or that
758	758	8 taxpayer's spouse or dependents, to the extent that
759	759	9 the amount paid for that health insurance or long-term
760	760	10 care insurance may be deducted under Section 213 of
761	761	11 the Internal Revenue Code, has not been deducted on
762	762	12 the federal income tax return of the taxpayer, and
763	763	13 does not exceed the taxable income attributable to
764	764	14 that taxpayer's income, self-employment income, or
765	765	15 Subchapter S corporation income; except that no
766	766	16 deduction shall be allowed under this item (V) if the
767	767	17 taxpayer is eligible to participate in any health
768	768	18 insurance or long-term care insurance plan of an
769	769	19 employer of the taxpayer or the taxpayer's spouse. The
770	770	20 amount of the health insurance and long-term care
771	771	21 insurance subtracted under this item (V) shall be
772	772	22 determined by multiplying total health insurance and
773	773	23 long-term care insurance premiums paid by the taxpayer
774	774	24 times a number that represents the fractional
775	775	25 percentage of eligible medical expenses under Section
776	776	26 213 of the Internal Revenue Code of 1986 not actually
777	777
778	778
779	779
780	780
781	781
782	782	HB3580 - 21 - LRB103 05339 SPS 50358 b
783	783
784	784
785	785	HB3580- 22 -LRB103 05339 SPS 50358 b HB3580 - 22 - LRB103 05339 SPS 50358 b
786	786	HB3580 - 22 - LRB103 05339 SPS 50358 b
787	787	1 deducted on the taxpayer's federal income tax return;
788	788	2 (W) For taxable years beginning on or after
789	789	3 January 1, 1998, all amounts included in the
790	790	4 taxpayer's federal gross income in the taxable year
791	791	5 from amounts converted from a regular IRA to a Roth
792	792	6 IRA. This paragraph is exempt from the provisions of
793	793	7 Section 250;
794	794	8 (X) For taxable year 1999 and thereafter, an
795	795	9 amount equal to the amount of any (i) distributions,
796	796	10 to the extent includible in gross income for federal
797	797	11 income tax purposes, made to the taxpayer because of
798	798	12 his or her status as a victim of persecution for racial
799	799	13 or religious reasons by Nazi Germany or any other Axis
800	800	14 regime or as an heir of the victim and (ii) items of
801	801	15 income, to the extent includible in gross income for
802	802	16 federal income tax purposes, attributable to, derived
803	803	17 from or in any way related to assets stolen from,
804	804	18 hidden from, or otherwise lost to a victim of
805	805	19 persecution for racial or religious reasons by Nazi
806	806	20 Germany or any other Axis regime immediately prior to,
807	807	21 during, and immediately after World War II, including,
808	808	22 but not limited to, interest on the proceeds
809	809	23 receivable as insurance under policies issued to a
810	810	24 victim of persecution for racial or religious reasons
811	811	25 by Nazi Germany or any other Axis regime by European
812	812	26 insurance companies immediately prior to and during
813	813
814	814
815	815
816	816
817	817
818	818	HB3580 - 22 - LRB103 05339 SPS 50358 b
819	819
820	820
821	821	HB3580- 23 -LRB103 05339 SPS 50358 b HB3580 - 23 - LRB103 05339 SPS 50358 b
822	822	HB3580 - 23 - LRB103 05339 SPS 50358 b
823	823	1 World War II; provided, however, this subtraction from
824	824	2 federal adjusted gross income does not apply to assets
825	825	3 acquired with such assets or with the proceeds from
826	826	4 the sale of such assets; provided, further, this
827	827	5 paragraph shall only apply to a taxpayer who was the
828	828	6 first recipient of such assets after their recovery
829	829	7 and who is a victim of persecution for racial or
830	830	8 religious reasons by Nazi Germany or any other Axis
831	831	9 regime or as an heir of the victim. The amount of and
832	832	10 the eligibility for any public assistance, benefit, or
833	833	11 similar entitlement is not affected by the inclusion
834	834	12 of items (i) and (ii) of this paragraph in gross income
835	835	13 for federal income tax purposes. This paragraph is
836	836	14 exempt from the provisions of Section 250;
837	837	15 (Y) For taxable years beginning on or after
838	838	16 January 1, 2002 and ending on or before December 31,
839	839	17 2004, moneys contributed in the taxable year to a
840	840	18 College Savings Pool account under Section 16.5 of the
841	841	19 State Treasurer Act, except that amounts excluded from
842	842	20 gross income under Section 529(c)(3)(C)(i) of the
843	843	21 Internal Revenue Code shall not be considered moneys
844	844	22 contributed under this subparagraph (Y). For taxable
845	845	23 years beginning on or after January 1, 2005, a maximum
846	846	24 of $10,000 contributed in the taxable year to (i) a
847	847	25 College Savings Pool account under Section 16.5 of the
848	848	26 State Treasurer Act or (ii) the Illinois Prepaid
849	849
850	850
851	851
852	852
853	853
854	854	HB3580 - 23 - LRB103 05339 SPS 50358 b
855	855
856	856
857	857	HB3580- 24 -LRB103 05339 SPS 50358 b HB3580 - 24 - LRB103 05339 SPS 50358 b
858	858	HB3580 - 24 - LRB103 05339 SPS 50358 b
859	859	1 Tuition Trust Fund, except that amounts excluded from
860	860	2 gross income under Section 529(c)(3)(C)(i) of the
861	861	3 Internal Revenue Code shall not be considered moneys
862	862	4 contributed under this subparagraph (Y). For purposes
863	863	5 of this subparagraph, contributions made by an
864	864	6 employer on behalf of an employee, or matching
865	865	7 contributions made by an employee, shall be treated as
866	866	8 made by the employee. This subparagraph (Y) is exempt
867	867	9 from the provisions of Section 250;
868	868	10 (Z) For taxable years 2001 and thereafter, for the
869	869	11 taxable year in which the bonus depreciation deduction
870	870	12 is taken on the taxpayer's federal income tax return
871	871	13 under subsection (k) of Section 168 of the Internal
872	872	14 Revenue Code and for each applicable taxable year
873	873	15 thereafter, an amount equal to "x", where:
874	874	16 (1) "y" equals the amount of the depreciation
875	875	17 deduction taken for the taxable year on the
876	876	18 taxpayer's federal income tax return on property
877	877	19 for which the bonus depreciation deduction was
878	878	20 taken in any year under subsection (k) of Section
879	879	21 168 of the Internal Revenue Code, but not
880	880	22 including the bonus depreciation deduction;
881	881	23 (2) for taxable years ending on or before
882	882	24 December 31, 2005, "x" equals "y" multiplied by 30
883	883	25 and then divided by 70 (or "y" multiplied by
884	884	26 0.429); and
885	885
886	886
887	887
888	888
889	889
890	890	HB3580 - 24 - LRB103 05339 SPS 50358 b
891	891
892	892
893	893	HB3580- 25 -LRB103 05339 SPS 50358 b HB3580 - 25 - LRB103 05339 SPS 50358 b
894	894	HB3580 - 25 - LRB103 05339 SPS 50358 b
895	895	1 (3) for taxable years ending after December
896	896	2 31, 2005:
897	897	3 (i) for property on which a bonus
898	898	4 depreciation deduction of 30% of the adjusted
899	899	5 basis was taken, "x" equals "y" multiplied by
900	900	6 30 and then divided by 70 (or "y" multiplied
901	901	7 by 0.429);
902	902	8 (ii) for property on which a bonus
903	903	9 depreciation deduction of 50% of the adjusted
904	904	10 basis was taken, "x" equals "y" multiplied by
905	905	11 1.0;
906	906	12 (iii) for property on which a bonus
907	907	13 depreciation deduction of 100% of the adjusted
908	908	14 basis was taken in a taxable year ending on or
909	909	15 after December 31, 2021, "x" equals the
910	910	16 depreciation deduction that would be allowed
911	911	17 on that property if the taxpayer had made the
912	912	18 election under Section 168(k)(7) of the
913	913	19 Internal Revenue Code to not claim bonus
914	914	20 depreciation on that property; and
915	915	21 (iv) for property on which a bonus
916	916	22 depreciation deduction of a percentage other
917	917	23 than 30%, 50% or 100% of the adjusted basis
918	918	24 was taken in a taxable year ending on or after
919	919	25 December 31, 2021, "x" equals "y" multiplied
920	920	26 by 100 times the percentage bonus depreciation
921	921
922	922
923	923
924	924
925	925
926	926	HB3580 - 25 - LRB103 05339 SPS 50358 b
927	927
928	928
929	929	HB3580- 26 -LRB103 05339 SPS 50358 b HB3580 - 26 - LRB103 05339 SPS 50358 b
930	930	HB3580 - 26 - LRB103 05339 SPS 50358 b
931	931	1 on the property (that is, 100(bonus%)) and
932	932	2 then divided by 100 times 1 minus the
933	933	3 percentage bonus depreciation on the property
934	934	4 (that is, 100(1bonus%)).
935	935	5 The aggregate amount deducted under this
936	936	6 subparagraph in all taxable years for any one piece of
937	937	7 property may not exceed the amount of the bonus
938	938	8 depreciation deduction taken on that property on the
939	939	9 taxpayer's federal income tax return under subsection
940	940	10 (k) of Section 168 of the Internal Revenue Code. This
941	941	11 subparagraph (Z) is exempt from the provisions of
942	942	12 Section 250;
943	943	13 (AA) If the taxpayer sells, transfers, abandons,
944	944	14 or otherwise disposes of property for which the
945	945	15 taxpayer was required in any taxable year to make an
946	946	16 addition modification under subparagraph (D-15), then
947	947	17 an amount equal to that addition modification.
948	948	18 If the taxpayer continues to own property through
949	949	19 the last day of the last tax year for which a taxpayer
950	950	20 may claim a depreciation deduction for federal income
951	951	21 tax purposes a subtraction is allowed with respect to
952	952	22 that property under subparagraph (Z) and for which the
953	953	23 taxpayer was required in any taxable year to make an
954	954	24 addition modification under subparagraph (D-15), then
955	955	25 an amount equal to that addition modification.
956	956	26 The taxpayer is allowed to take the deduction
957	957
958	958
959	959
960	960
961	961
962	962	HB3580 - 26 - LRB103 05339 SPS 50358 b
963	963
964	964
965	965	HB3580- 27 -LRB103 05339 SPS 50358 b HB3580 - 27 - LRB103 05339 SPS 50358 b
966	966	HB3580 - 27 - LRB103 05339 SPS 50358 b
967	967	1 under this subparagraph only once with respect to any
968	968	2 one piece of property.
969	969	3 This subparagraph (AA) is exempt from the
970	970	4 provisions of Section 250;
971	971	5 (BB) Any amount included in adjusted gross income,
972	972	6 other than salary, received by a driver in a
973	973	7 ridesharing arrangement using a motor vehicle;
974	974	8 (CC) The amount of (i) any interest income (net of
975	975	9 the deductions allocable thereto) taken into account
976	976	10 for the taxable year with respect to a transaction
977	977	11 with a taxpayer that is required to make an addition
978	978	12 modification with respect to such transaction under
979	979	13 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
980	980	14 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
981	981	15 the amount of that addition modification, and (ii) any
982	982	16 income from intangible property (net of the deductions
983	983	17 allocable thereto) taken into account for the taxable
984	984	18 year with respect to a transaction with a taxpayer
985	985	19 that is required to make an addition modification with
986	986	20 respect to such transaction under Section
987	987	21 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
988	988	22 203(d)(2)(D-8), but not to exceed the amount of that
989	989	23 addition modification. This subparagraph (CC) is
990	990	24 exempt from the provisions of Section 250;
991	991	25 (DD) An amount equal to the interest income taken
992	992	26 into account for the taxable year (net of the
993	993
994	994
995	995
996	996
997	997
998	998	HB3580 - 27 - LRB103 05339 SPS 50358 b
999	999
1000	1000
1001	1001	HB3580- 28 -LRB103 05339 SPS 50358 b HB3580 - 28 - LRB103 05339 SPS 50358 b
1002	1002	HB3580 - 28 - LRB103 05339 SPS 50358 b
1003	1003	1 deductions allocable thereto) with respect to
1004	1004	2 transactions with (i) a foreign person who would be a
1005	1005	3 member of the taxpayer's unitary business group but
1006	1006	4 for the fact that the foreign person's business
1007	1007	5 activity outside the United States is 80% or more of
1008	1008	6 that person's total business activity and (ii) for
1009	1009	7 taxable years ending on or after December 31, 2008, to
1010	1010	8 a person who would be a member of the same unitary
1011	1011	9 business group but for the fact that the person is
1012	1012	10 prohibited under Section 1501(a)(27) from being
1013	1013	11 included in the unitary business group because he or
1014	1014	12 she is ordinarily required to apportion business
1015	1015	13 income under different subsections of Section 304, but
1016	1016	14 not to exceed the addition modification required to be
1017	1017	15 made for the same taxable year under Section
1018	1018	16 203(a)(2)(D-17) for interest paid, accrued, or
1019	1019	17 incurred, directly or indirectly, to the same person.
1020	1020	18 This subparagraph (DD) is exempt from the provisions
1021	1021	19 of Section 250;
1022	1022	20 (EE) An amount equal to the income from intangible
1023	1023	21 property taken into account for the taxable year (net
1024	1024	22 of the deductions allocable thereto) with respect to
1025	1025	23 transactions with (i) a foreign person who would be a
1026	1026	24 member of the taxpayer's unitary business group but
1027	1027	25 for the fact that the foreign person's business
1028	1028	26 activity outside the United States is 80% or more of
1029	1029
1030	1030
1031	1031
1032	1032
1033	1033
1034	1034	HB3580 - 28 - LRB103 05339 SPS 50358 b
1035	1035
1036	1036
1037	1037	HB3580- 29 -LRB103 05339 SPS 50358 b HB3580 - 29 - LRB103 05339 SPS 50358 b
1038	1038	HB3580 - 29 - LRB103 05339 SPS 50358 b
1039	1039	1 that person's total business activity and (ii) for
1040	1040	2 taxable years ending on or after December 31, 2008, to
1041	1041	3 a person who would be a member of the same unitary
1042	1042	4 business group but for the fact that the person is
1043	1043	5 prohibited under Section 1501(a)(27) from being
1044	1044	6 included in the unitary business group because he or
1045	1045	7 she is ordinarily required to apportion business
1046	1046	8 income under different subsections of Section 304, but
1047	1047	9 not to exceed the addition modification required to be
1048	1048	10 made for the same taxable year under Section
1049	1049	11 203(a)(2)(D-18) for intangible expenses and costs
1050	1050	12 paid, accrued, or incurred, directly or indirectly, to
1051	1051	13 the same foreign person. This subparagraph (EE) is
1052	1052	14 exempt from the provisions of Section 250;
1053	1053	15 (FF) An amount equal to any amount awarded to the
1054	1054	16 taxpayer during the taxable year by the Court of
1055	1055	17 Claims under subsection (c) of Section 8 of the Court
1056	1056	18 of Claims Act for time unjustly served in a State
1057	1057	19 prison. This subparagraph (FF) is exempt from the
1058	1058	20 provisions of Section 250;
1059	1059	21 (GG) For taxable years ending on or after December
1060	1060	22 31, 2011, in the case of a taxpayer who was required to
1061	1061	23 add back any insurance premiums under Section
1062	1062	24 203(a)(2)(D-19), such taxpayer may elect to subtract
1063	1063	25 that part of a reimbursement received from the
1064	1064	26 insurance company equal to the amount of the expense
1065	1065
1066	1066
1067	1067
1068	1068
1069	1069
1070	1070	HB3580 - 29 - LRB103 05339 SPS 50358 b
1071	1071
1072	1072
1073	1073	HB3580- 30 -LRB103 05339 SPS 50358 b HB3580 - 30 - LRB103 05339 SPS 50358 b
1074	1074	HB3580 - 30 - LRB103 05339 SPS 50358 b
1075	1075	1 or loss (including expenses incurred by the insurance
1076	1076	2 company) that would have been taken into account as a
1077	1077	3 deduction for federal income tax purposes if the
1078	1078	4 expense or loss had been uninsured. If a taxpayer
1079	1079	5 makes the election provided for by this subparagraph
1080	1080	6 (GG), the insurer to which the premiums were paid must
1081	1081	7 add back to income the amount subtracted by the
1082	1082	8 taxpayer pursuant to this subparagraph (GG). This
1083	1083	9 subparagraph (GG) is exempt from the provisions of
1084	1084	10 Section 250;
1085	1085	11 (HH) For taxable years beginning on or after
1086	1086	12 January 1, 2018 and prior to January 1, 2028, a maximum
1087	1087	13 of $10,000 contributed in the taxable year to a
1088	1088	14 qualified ABLE account under Section 16.6 of the State
1089	1089	15 Treasurer Act, except that amounts excluded from gross
1090	1090	16 income under Section 529(c)(3)(C)(i) or Section
1091	1091	17 529A(c)(1)(C) of the Internal Revenue Code shall not
1092	1092	18 be considered moneys contributed under this
1093	1093	19 subparagraph (HH). For purposes of this subparagraph
1094	1094	20 (HH), contributions made by an employer on behalf of
1095	1095	21 an employee, or matching contributions made by an
1096	1096	22 employee, shall be treated as made by the employee;
1097	1097	23 and
1098	1098	24 (II) For taxable years that begin on or after
1099	1099	25 January 1, 2021 and begin before January 1, 2026, the
1100	1100	26 amount that is included in the taxpayer's federal
1101	1101
1102	1102
1103	1103
1104	1104
1105	1105
1106	1106	HB3580 - 30 - LRB103 05339 SPS 50358 b
1107	1107
1108	1108
1109	1109	HB3580- 31 -LRB103 05339 SPS 50358 b HB3580 - 31 - LRB103 05339 SPS 50358 b
1110	1110	HB3580 - 31 - LRB103 05339 SPS 50358 b
1111	1111	1 adjusted gross income pursuant to Section 61 of the
1112	1112	2 Internal Revenue Code as discharge of indebtedness
1113	1113	3 attributable to student loan forgiveness and that is
1114	1114	4 not excluded from the taxpayer's federal adjusted
1115	1115	5 gross income pursuant to paragraph (5) of subsection
1116	1116	6 (f) of Section 108 of the Internal Revenue Code.
1117	1117	7 (b) Corporations.
1118	1118	8 (1) In general. In the case of a corporation, base
1119	1119	9 income means an amount equal to the taxpayer's taxable
1120	1120	10 income for the taxable year as modified by paragraph (2).
1121	1121	11 (2) Modifications. The taxable income referred to in
1122	1122	12 paragraph (1) shall be modified by adding thereto the sum
1123	1123	13 of the following amounts:
1124	1124	14 (A) An amount equal to all amounts paid or accrued
1125	1125	15 to the taxpayer as interest and all distributions
1126	1126	16 received from regulated investment companies during
1127	1127	17 the taxable year to the extent excluded from gross
1128	1128	18 income in the computation of taxable income;
1129	1129	19 (B) An amount equal to the amount of tax imposed by
1130	1130	20 this Act to the extent deducted from gross income in
1131	1131	21 the computation of taxable income for the taxable
1132	1132	22 year;
1133	1133	23 (C) In the case of a regulated investment company,
1134	1134	24 an amount equal to the excess of (i) the net long-term
1135	1135	25 capital gain for the taxable year, over (ii) the
1136	1136
1137	1137
1138	1138
1139	1139
1140	1140
1141	1141	HB3580 - 31 - LRB103 05339 SPS 50358 b
1142	1142
1143	1143
1144	1144	HB3580- 32 -LRB103 05339 SPS 50358 b HB3580 - 32 - LRB103 05339 SPS 50358 b
1145	1145	HB3580 - 32 - LRB103 05339 SPS 50358 b
1146	1146	1 amount of the capital gain dividends designated as
1147	1147	2 such in accordance with Section 852(b)(3)(C) of the
1148	1148	3 Internal Revenue Code and any amount designated under
1149	1149	4 Section 852(b)(3)(D) of the Internal Revenue Code,
1150	1150	5 attributable to the taxable year (this amendatory Act
1151	1151	6 of 1995 (Public Act 89-89) is declarative of existing
1152	1152	7 law and is not a new enactment);
1153	1153	8 (D) The amount of any net operating loss deduction
1154	1154	9 taken in arriving at taxable income, other than a net
1155	1155	10 operating loss carried forward from a taxable year
1156	1156	11 ending prior to December 31, 1986;
1157	1157	12 (E) For taxable years in which a net operating
1158	1158	13 loss carryback or carryforward from a taxable year
1159	1159	14 ending prior to December 31, 1986 is an element of
1160	1160	15 taxable income under paragraph (1) of subsection (e)
1161	1161	16 or subparagraph (E) of paragraph (2) of subsection
1162	1162	17 (e), the amount by which addition modifications other
1163	1163	18 than those provided by this subparagraph (E) exceeded
1164	1164	19 subtraction modifications in such earlier taxable
1165	1165	20 year, with the following limitations applied in the
1166	1166	21 order that they are listed:
1167	1167	22 (i) the addition modification relating to the
1168	1168	23 net operating loss carried back or forward to the
1169	1169	24 taxable year from any taxable year ending prior to
1170	1170	25 December 31, 1986 shall be reduced by the amount
1171	1171	26 of addition modification under this subparagraph
1172	1172
1173	1173
1174	1174
1175	1175
1176	1176
1177	1177	HB3580 - 32 - LRB103 05339 SPS 50358 b
1178	1178
1179	1179
1180	1180	HB3580- 33 -LRB103 05339 SPS 50358 b HB3580 - 33 - LRB103 05339 SPS 50358 b
1181	1181	HB3580 - 33 - LRB103 05339 SPS 50358 b
1182	1182	1 (E) which related to that net operating loss and
1183	1183	2 which was taken into account in calculating the
1184	1184	3 base income of an earlier taxable year, and
1185	1185	4 (ii) the addition modification relating to the
1186	1186	5 net operating loss carried back or forward to the
1187	1187	6 taxable year from any taxable year ending prior to
1188	1188	7 December 31, 1986 shall not exceed the amount of
1189	1189	8 such carryback or carryforward;
1190	1190	9 For taxable years in which there is a net
1191	1191	10 operating loss carryback or carryforward from more
1192	1192	11 than one other taxable year ending prior to December
1193	1193	12 31, 1986, the addition modification provided in this
1194	1194	13 subparagraph (E) shall be the sum of the amounts
1195	1195	14 computed independently under the preceding provisions
1196	1196	15 of this subparagraph (E) for each such taxable year;
1197	1197	16 (E-5) For taxable years ending after December 31,
1198	1198	17 1997, an amount equal to any eligible remediation
1199	1199	18 costs that the corporation deducted in computing
1200	1200	19 adjusted gross income and for which the corporation
1201	1201	20 claims a credit under subsection (l) of Section 201;
1202	1202	21 (E-10) For taxable years 2001 and thereafter, an
1203	1203	22 amount equal to the bonus depreciation deduction taken
1204	1204	23 on the taxpayer's federal income tax return for the
1205	1205	24 taxable year under subsection (k) of Section 168 of
1206	1206	25 the Internal Revenue Code;
1207	1207	26 (E-11) If the taxpayer sells, transfers, abandons,
1208	1208
1209	1209
1210	1210
1211	1211
1212	1212
1213	1213	HB3580 - 33 - LRB103 05339 SPS 50358 b
1214	1214
1215	1215
1216	1216	HB3580- 34 -LRB103 05339 SPS 50358 b HB3580 - 34 - LRB103 05339 SPS 50358 b
1217	1217	HB3580 - 34 - LRB103 05339 SPS 50358 b
1218	1218	1 or otherwise disposes of property for which the
1219	1219	2 taxpayer was required in any taxable year to make an
1220	1220	3 addition modification under subparagraph (E-10), then
1221	1221	4 an amount equal to the aggregate amount of the
1222	1222	5 deductions taken in all taxable years under
1223	1223	6 subparagraph (T) with respect to that property.
1224	1224	7 If the taxpayer continues to own property through
1225	1225	8 the last day of the last tax year for a taxpayer may
1226	1226	9 claim a depreciation deduction for federal income tax
1227	1227	10 purposes which a subtraction is allowed with respect
1228	1228	11 to that property under subparagraph (T) and for which
1229	1229	12 the taxpayer was allowed in any taxable year to make a
1230	1230	13 subtraction modification under subparagraph (T), then
1231	1231	14 an amount equal to that subtraction modification.
1232	1232	15 The taxpayer is required to make the addition
1233	1233	16 modification under this subparagraph only once with
1234	1234	17 respect to any one piece of property;
1235	1235	18 (E-12) An amount equal to the amount otherwise
1236	1236	19 allowed as a deduction in computing base income for
1237	1237	20 interest paid, accrued, or incurred, directly or
1238	1238	21 indirectly, (i) for taxable years ending on or after
1239	1239	22 December 31, 2004, to a foreign person who would be a
1240	1240	23 member of the same unitary business group but for the
1241	1241	24 fact the foreign person's business activity outside
1242	1242	25 the United States is 80% or more of the foreign
1243	1243	26 person's total business activity and (ii) for taxable
1244	1244
1245	1245
1246	1246
1247	1247
1248	1248
1249	1249	HB3580 - 34 - LRB103 05339 SPS 50358 b
1250	1250
1251	1251
1252	1252	HB3580- 35 -LRB103 05339 SPS 50358 b HB3580 - 35 - LRB103 05339 SPS 50358 b
1253	1253	HB3580 - 35 - LRB103 05339 SPS 50358 b
1254	1254	1 years ending on or after December 31, 2008, to a person
1255	1255	2 who would be a member of the same unitary business
1256	1256	3 group but for the fact that the person is prohibited
1257	1257	4 under Section 1501(a)(27) from being included in the
1258	1258	5 unitary business group because he or she is ordinarily
1259	1259	6 required to apportion business income under different
1260	1260	7 subsections of Section 304. The addition modification
1261	1261	8 required by this subparagraph shall be reduced to the
1262	1262	9 extent that dividends were included in base income of
1263	1263	10 the unitary group for the same taxable year and
1264	1264	11 received by the taxpayer or by a member of the
1265	1265	12 taxpayer's unitary business group (including amounts
1266	1266	13 included in gross income pursuant to Sections 951
1267	1267	14 through 964 of the Internal Revenue Code and amounts
1268	1268	15 included in gross income under Section 78 of the
1269	1269	16 Internal Revenue Code) with respect to the stock of
1270	1270	17 the same person to whom the interest was paid,
1271	1271	18 accrued, or incurred.
1272	1272	19 This paragraph shall not apply to the following:
1273	1273	20 (i) an item of interest paid, accrued, or
1274	1274	21 incurred, directly or indirectly, to a person who
1275	1275	22 is subject in a foreign country or state, other
1276	1276	23 than a state which requires mandatory unitary
1277	1277	24 reporting, to a tax on or measured by net income
1278	1278	25 with respect to such interest; or
1279	1279	26 (ii) an item of interest paid, accrued, or
1280	1280
1281	1281
1282	1282
1283	1283
1284	1284
1285	1285	HB3580 - 35 - LRB103 05339 SPS 50358 b
1286	1286
1287	1287
1288	1288	HB3580- 36 -LRB103 05339 SPS 50358 b HB3580 - 36 - LRB103 05339 SPS 50358 b
1289	1289	HB3580 - 36 - LRB103 05339 SPS 50358 b
1290	1290	1 incurred, directly or indirectly, to a person if
1291	1291	2 the taxpayer can establish, based on a
1292	1292	3 preponderance of the evidence, both of the
1293	1293	4 following:
1294	1294	5 (a) the person, during the same taxable
1295	1295	6 year, paid, accrued, or incurred, the interest
1296	1296	7 to a person that is not a related member, and
1297	1297	8 (b) the transaction giving rise to the
1298	1298	9 interest expense between the taxpayer and the
1299	1299	10 person did not have as a principal purpose the
1300	1300	11 avoidance of Illinois income tax, and is paid
1301	1301	12 pursuant to a contract or agreement that
1302	1302	13 reflects an arm's-length interest rate and
1303	1303	14 terms; or
1304	1304	15 (iii) the taxpayer can establish, based on
1305	1305	16 clear and convincing evidence, that the interest
1306	1306	17 paid, accrued, or incurred relates to a contract
1307	1307	18 or agreement entered into at arm's-length rates
1308	1308	19 and terms and the principal purpose for the
1309	1309	20 payment is not federal or Illinois tax avoidance;
1310	1310	21 or
1311	1311	22 (iv) an item of interest paid, accrued, or
1312	1312	23 incurred, directly or indirectly, to a person if
1313	1313	24 the taxpayer establishes by clear and convincing
1314	1314	25 evidence that the adjustments are unreasonable; or
1315	1315	26 if the taxpayer and the Director agree in writing
1316	1316
1317	1317
1318	1318
1319	1319
1320	1320
1321	1321	HB3580 - 36 - LRB103 05339 SPS 50358 b
1322	1322
1323	1323
1324	1324	HB3580- 37 -LRB103 05339 SPS 50358 b HB3580 - 37 - LRB103 05339 SPS 50358 b
1325	1325	HB3580 - 37 - LRB103 05339 SPS 50358 b
1326	1326	1 to the application or use of an alternative method
1327	1327	2 of apportionment under Section 304(f).
1328	1328	3 Nothing in this subsection shall preclude the
1329	1329	4 Director from making any other adjustment
1330	1330	5 otherwise allowed under Section 404 of this Act
1331	1331	6 for any tax year beginning after the effective
1332	1332	7 date of this amendment provided such adjustment is
1333	1333	8 made pursuant to regulation adopted by the
1334	1334	9 Department and such regulations provide methods
1335	1335	10 and standards by which the Department will utilize
1336	1336	11 its authority under Section 404 of this Act;
1337	1337	12 (E-13) An amount equal to the amount of intangible
1338	1338	13 expenses and costs otherwise allowed as a deduction in
1339	1339	14 computing base income, and that were paid, accrued, or
1340	1340	15 incurred, directly or indirectly, (i) for taxable
1341	1341	16 years ending on or after December 31, 2004, to a
1342	1342	17 foreign person who would be a member of the same
1343	1343	18 unitary business group but for the fact that the
1344	1344	19 foreign person's business activity outside the United
1345	1345	20 States is 80% or more of that person's total business
1346	1346	21 activity and (ii) for taxable years ending on or after
1347	1347	22 December 31, 2008, to a person who would be a member of
1348	1348	23 the same unitary business group but for the fact that
1349	1349	24 the person is prohibited under Section 1501(a)(27)
1350	1350	25 from being included in the unitary business group
1351	1351	26 because he or she is ordinarily required to apportion
1352	1352
1353	1353
1354	1354
1355	1355
1356	1356
1357	1357	HB3580 - 37 - LRB103 05339 SPS 50358 b
1358	1358
1359	1359
1360	1360	HB3580- 38 -LRB103 05339 SPS 50358 b HB3580 - 38 - LRB103 05339 SPS 50358 b
1361	1361	HB3580 - 38 - LRB103 05339 SPS 50358 b
1362	1362	1 business income under different subsections of Section
1363	1363	2 304. The addition modification required by this
1364	1364	3 subparagraph shall be reduced to the extent that
1365	1365	4 dividends were included in base income of the unitary
1366	1366	5 group for the same taxable year and received by the
1367	1367	6 taxpayer or by a member of the taxpayer's unitary
1368	1368	7 business group (including amounts included in gross
1369	1369	8 income pursuant to Sections 951 through 964 of the
1370	1370	9 Internal Revenue Code and amounts included in gross
1371	1371	10 income under Section 78 of the Internal Revenue Code)
1372	1372	11 with respect to the stock of the same person to whom
1373	1373	12 the intangible expenses and costs were directly or
1374	1374	13 indirectly paid, incurred, or accrued. The preceding
1375	1375	14 sentence shall not apply to the extent that the same
1376	1376	15 dividends caused a reduction to the addition
1377	1377	16 modification required under Section 203(b)(2)(E-12) of
1378	1378	17 this Act. As used in this subparagraph, the term
1379	1379	18 "intangible expenses and costs" includes (1) expenses,
1380	1380	19 losses, and costs for, or related to, the direct or
1381	1381	20 indirect acquisition, use, maintenance or management,
1382	1382	21 ownership, sale, exchange, or any other disposition of
1383	1383	22 intangible property; (2) losses incurred, directly or
1384	1384	23 indirectly, from factoring transactions or discounting
1385	1385	24 transactions; (3) royalty, patent, technical, and
1386	1386	25 copyright fees; (4) licensing fees; and (5) other
1387	1387	26 similar expenses and costs. For purposes of this
1388	1388
1389	1389
1390	1390
1391	1391
1392	1392
1393	1393	HB3580 - 38 - LRB103 05339 SPS 50358 b
1394	1394
1395	1395
1396	1396	HB3580- 39 -LRB103 05339 SPS 50358 b HB3580 - 39 - LRB103 05339 SPS 50358 b
1397	1397	HB3580 - 39 - LRB103 05339 SPS 50358 b
1398	1398	1 subparagraph, "intangible property" includes patents,
1399	1399	2 patent applications, trade names, trademarks, service
1400	1400	3 marks, copyrights, mask works, trade secrets, and
1401	1401	4 similar types of intangible assets.
1402	1402	5 This paragraph shall not apply to the following:
1403	1403	6 (i) any item of intangible expenses or costs
1404	1404	7 paid, accrued, or incurred, directly or
1405	1405	8 indirectly, from a transaction with a person who
1406	1406	9 is subject in a foreign country or state, other
1407	1407	10 than a state which requires mandatory unitary
1408	1408	11 reporting, to a tax on or measured by net income
1409	1409	12 with respect to such item; or
1410	1410	13 (ii) any item of intangible expense or cost
1411	1411	14 paid, accrued, or incurred, directly or
1412	1412	15 indirectly, if the taxpayer can establish, based
1413	1413	16 on a preponderance of the evidence, both of the
1414	1414	17 following:
1415	1415	18 (a) the person during the same taxable
1416	1416	19 year paid, accrued, or incurred, the
1417	1417	20 intangible expense or cost to a person that is
1418	1418	21 not a related member, and
1419	1419	22 (b) the transaction giving rise to the
1420	1420	23 intangible expense or cost between the
1421	1421	24 taxpayer and the person did not have as a
1422	1422	25 principal purpose the avoidance of Illinois
1423	1423	26 income tax, and is paid pursuant to a contract
1424	1424
1425	1425
1426	1426
1427	1427
1428	1428
1429	1429	HB3580 - 39 - LRB103 05339 SPS 50358 b
1430	1430
1431	1431
1432	1432	HB3580- 40 -LRB103 05339 SPS 50358 b HB3580 - 40 - LRB103 05339 SPS 50358 b
1433	1433	HB3580 - 40 - LRB103 05339 SPS 50358 b
1434	1434	1 or agreement that reflects arm's-length terms;
1435	1435	2 or
1436	1436	3 (iii) any item of intangible expense or cost
1437	1437	4 paid, accrued, or incurred, directly or
1438	1438	5 indirectly, from a transaction with a person if
1439	1439	6 the taxpayer establishes by clear and convincing
1440	1440	7 evidence, that the adjustments are unreasonable;
1441	1441	8 or if the taxpayer and the Director agree in
1442	1442	9 writing to the application or use of an
1443	1443	10 alternative method of apportionment under Section
1444	1444	11 304(f);
1445	1445	12 Nothing in this subsection shall preclude the
1446	1446	13 Director from making any other adjustment
1447	1447	14 otherwise allowed under Section 404 of this Act
1448	1448	15 for any tax year beginning after the effective
1449	1449	16 date of this amendment provided such adjustment is
1450	1450	17 made pursuant to regulation adopted by the
1451	1451	18 Department and such regulations provide methods
1452	1452	19 and standards by which the Department will utilize
1453	1453	20 its authority under Section 404 of this Act;
1454	1454	21 (E-14) For taxable years ending on or after
1455	1455	22 December 31, 2008, an amount equal to the amount of
1456	1456	23 insurance premium expenses and costs otherwise allowed
1457	1457	24 as a deduction in computing base income, and that were
1458	1458	25 paid, accrued, or incurred, directly or indirectly, to
1459	1459	26 a person who would be a member of the same unitary
1460	1460
1461	1461
1462	1462
1463	1463
1464	1464
1465	1465	HB3580 - 40 - LRB103 05339 SPS 50358 b
1466	1466
1467	1467
1468	1468	HB3580- 41 -LRB103 05339 SPS 50358 b HB3580 - 41 - LRB103 05339 SPS 50358 b
1469	1469	HB3580 - 41 - LRB103 05339 SPS 50358 b
1470	1470	1 business group but for the fact that the person is
1471	1471	2 prohibited under Section 1501(a)(27) from being
1472	1472	3 included in the unitary business group because he or
1473	1473	4 she is ordinarily required to apportion business
1474	1474	5 income under different subsections of Section 304. The
1475	1475	6 addition modification required by this subparagraph
1476	1476	7 shall be reduced to the extent that dividends were
1477	1477	8 included in base income of the unitary group for the
1478	1478	9 same taxable year and received by the taxpayer or by a
1479	1479	10 member of the taxpayer's unitary business group
1480	1480	11 (including amounts included in gross income under
1481	1481	12 Sections 951 through 964 of the Internal Revenue Code
1482	1482	13 and amounts included in gross income under Section 78
1483	1483	14 of the Internal Revenue Code) with respect to the
1484	1484	15 stock of the same person to whom the premiums and costs
1485	1485	16 were directly or indirectly paid, incurred, or
1486	1486	17 accrued. The preceding sentence does not apply to the
1487	1487	18 extent that the same dividends caused a reduction to
1488	1488	19 the addition modification required under Section
1489	1489	20 203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this
1490	1490	21 Act;
1491	1491	22 (E-15) For taxable years beginning after December
1492	1492	23 31, 2008, any deduction for dividends paid by a
1493	1493	24 captive real estate investment trust that is allowed
1494	1494	25 to a real estate investment trust under Section
1495	1495	26 857(b)(2)(B) of the Internal Revenue Code for
1496	1496
1497	1497
1498	1498
1499	1499
1500	1500
1501	1501	HB3580 - 41 - LRB103 05339 SPS 50358 b
1502	1502
1503	1503
1504	1504	HB3580- 42 -LRB103 05339 SPS 50358 b HB3580 - 42 - LRB103 05339 SPS 50358 b
1505	1505	HB3580 - 42 - LRB103 05339 SPS 50358 b
1506	1506	1 dividends paid;
1507	1507	2 (E-16) An amount equal to the credit allowable to
1508	1508	3 the taxpayer under Section 218(a) of this Act,
1509	1509	4 determined without regard to Section 218(c) of this
1510	1510	5 Act;
1511	1511	6 (E-17) For taxable years ending on or after
1512	1512	7 December 31, 2017, an amount equal to the deduction
1513	1513	8 allowed under Section 199 of the Internal Revenue Code
1514	1514	9 for the taxable year;
1515	1515	10 (E-18) for taxable years beginning after December
1516	1516	11 31, 2018, an amount equal to the deduction allowed
1517	1517	12 under Section 250(a)(1)(A) of the Internal Revenue
1518	1518	13 Code for the taxable year;
1519	1519	14 (E-19) for taxable years ending on or after June
1520	1520	15 30, 2021, an amount equal to the deduction allowed
1521	1521	16 under Section 250(a)(1)(B)(i) of the Internal Revenue
1522	1522	17 Code for the taxable year;
1523	1523	18 (E-20) for taxable years ending on or after June
1524	1524	19 30, 2021, an amount equal to the deduction allowed
1525	1525	20 under Sections 243(e) and 245A(a) of the Internal
1526	1526	21 Revenue Code for the taxable year.
1527	1527	22 and by deducting from the total so obtained the sum of the
1528	1528	23 following amounts:
1529	1529	24 (F) An amount equal to the amount of any tax
1530	1530	25 imposed by this Act which was refunded to the taxpayer
1531	1531	26 and included in such total for the taxable year;
1532	1532
1533	1533
1534	1534
1535	1535
1536	1536
1537	1537	HB3580 - 42 - LRB103 05339 SPS 50358 b
1538	1538
1539	1539
1540	1540	HB3580- 43 -LRB103 05339 SPS 50358 b HB3580 - 43 - LRB103 05339 SPS 50358 b
1541	1541	HB3580 - 43 - LRB103 05339 SPS 50358 b
1542	1542	1 (G) An amount equal to any amount included in such
1543	1543	2 total under Section 78 of the Internal Revenue Code;
1544	1544	3 (H) In the case of a regulated investment company,
1545	1545	4 an amount equal to the amount of exempt interest
1546	1546	5 dividends as defined in subsection (b)(5) of Section
1547	1547	6 852 of the Internal Revenue Code, paid to shareholders
1548	1548	7 for the taxable year;
1549	1549	8 (I) With the exception of any amounts subtracted
1550	1550	9 under subparagraph (J), an amount equal to the sum of
1551	1551	10 all amounts disallowed as deductions by (i) Sections
1552	1552	11 171(a)(2) and 265(a)(2) and amounts disallowed as
1553	1553	12 interest expense by Section 291(a)(3) of the Internal
1554	1554	13 Revenue Code, and all amounts of expenses allocable to
1555	1555	14 interest and disallowed as deductions by Section
1556	1556	15 265(a)(1) of the Internal Revenue Code; and (ii) for
1557	1557	16 taxable years ending on or after August 13, 1999,
1558	1558	17 Sections 171(a)(2), 265, 280C, 291(a)(3), and
1559	1559	18 832(b)(5)(B)(i) of the Internal Revenue Code, plus,
1560	1560	19 for tax years ending on or after December 31, 2011,
1561	1561	20 amounts disallowed as deductions by Section 45G(e)(3)
1562	1562	21 of the Internal Revenue Code and, for taxable years
1563	1563	22 ending on or after December 31, 2008, any amount
1564	1564	23 included in gross income under Section 87 of the
1565	1565	24 Internal Revenue Code and the policyholders' share of
1566	1566	25 tax-exempt interest of a life insurance company under
1567	1567	26 Section 807(a)(2)(B) of the Internal Revenue Code (in
1568	1568
1569	1569
1570	1570
1571	1571
1572	1572
1573	1573	HB3580 - 43 - LRB103 05339 SPS 50358 b
1574	1574
1575	1575
1576	1576	HB3580- 44 -LRB103 05339 SPS 50358 b HB3580 - 44 - LRB103 05339 SPS 50358 b
1577	1577	HB3580 - 44 - LRB103 05339 SPS 50358 b
1578	1578	1 the case of a life insurance company with gross income
1579	1579	2 from a decrease in reserves for the tax year) or
1580	1580	3 Section 807(b)(1)(B) of the Internal Revenue Code (in
1581	1581	4 the case of a life insurance company allowed a
1582	1582	5 deduction for an increase in reserves for the tax
1583	1583	6 year); the provisions of this subparagraph are exempt
1584	1584	7 from the provisions of Section 250;
1585	1585	8 (J) An amount equal to all amounts included in
1586	1586	9 such total which are exempt from taxation by this
1587	1587	10 State either by reason of its statutes or Constitution
1588	1588	11 or by reason of the Constitution, treaties or statutes
1589	1589	12 of the United States; provided that, in the case of any
1590	1590	13 statute of this State that exempts income derived from
1591	1591	14 bonds or other obligations from the tax imposed under
1592	1592	15 this Act, the amount exempted shall be the interest
1593	1593	16 net of bond premium amortization;
1594	1594	17 (K) An amount equal to those dividends included in
1595	1595	18 such total which were paid by a corporation which
1596	1596	19 conducts business operations in a River Edge
1597	1597	20 Redevelopment Zone or zones created under the River
1598	1598	21 Edge Redevelopment Zone Act and conducts substantially
1599	1599	22 all of its operations in a River Edge Redevelopment
1600	1600	23 Zone or zones. This subparagraph (K) is exempt from
1601	1601	24 the provisions of Section 250;
1602	1602	25 (L) An amount equal to those dividends included in
1603	1603	26 such total that were paid by a corporation that
1604	1604
1605	1605
1606	1606
1607	1607
1608	1608
1609	1609	HB3580 - 44 - LRB103 05339 SPS 50358 b
1610	1610
1611	1611
1612	1612	HB3580- 45 -LRB103 05339 SPS 50358 b HB3580 - 45 - LRB103 05339 SPS 50358 b
1613	1613	HB3580 - 45 - LRB103 05339 SPS 50358 b
1614	1614	1 conducts business operations in a federally designated
1615	1615	2 Foreign Trade Zone or Sub-Zone and that is designated
1616	1616	3 a High Impact Business located in Illinois; provided
1617	1617	4 that dividends eligible for the deduction provided in
1618	1618	5 subparagraph (K) of paragraph 2 of this subsection
1619	1619	6 shall not be eligible for the deduction provided under
1620	1620	7 this subparagraph (L);
1621	1621	8 (M) For any taxpayer that is a financial
1622	1622	9 organization within the meaning of Section 304(c) of
1623	1623	10 this Act, an amount included in such total as interest
1624	1624	11 income from a loan or loans made by such taxpayer to a
1625	1625	12 borrower, to the extent that such a loan is secured by
1626	1626	13 property which is eligible for the River Edge
1627	1627	14 Redevelopment Zone Investment Credit. To determine the
1628	1628	15 portion of a loan or loans that is secured by property
1629	1629	16 eligible for a Section 201(f) investment credit to the
1630	1630	17 borrower, the entire principal amount of the loan or
1631	1631	18 loans between the taxpayer and the borrower should be
1632	1632	19 divided into the basis of the Section 201(f)
1633	1633	20 investment credit property which secures the loan or
1634	1634	21 loans, using for this purpose the original basis of
1635	1635	22 such property on the date that it was placed in service
1636	1636	23 in the River Edge Redevelopment Zone. The subtraction
1637	1637	24 modification available to the taxpayer in any year
1638	1638	25 under this subsection shall be that portion of the
1639	1639	26 total interest paid by the borrower with respect to
1640	1640
1641	1641
1642	1642
1643	1643
1644	1644
1645	1645	HB3580 - 45 - LRB103 05339 SPS 50358 b
1646	1646
1647	1647
1648	1648	HB3580- 46 -LRB103 05339 SPS 50358 b HB3580 - 46 - LRB103 05339 SPS 50358 b
1649	1649	HB3580 - 46 - LRB103 05339 SPS 50358 b
1650	1650	1 such loan attributable to the eligible property as
1651	1651	2 calculated under the previous sentence. This
1652	1652	3 subparagraph (M) is exempt from the provisions of
1653	1653	4 Section 250;
1654	1654	5 (M-1) For any taxpayer that is a financial
1655	1655	6 organization within the meaning of Section 304(c) of
1656	1656	7 this Act, an amount included in such total as interest
1657	1657	8 income from a loan or loans made by such taxpayer to a
1658	1658	9 borrower, to the extent that such a loan is secured by
1659	1659	10 property which is eligible for the High Impact
1660	1660	11 Business Investment Credit. To determine the portion
1661	1661	12 of a loan or loans that is secured by property eligible
1662	1662	13 for a Section 201(h) investment credit to the
1663	1663	14 borrower, the entire principal amount of the loan or
1664	1664	15 loans between the taxpayer and the borrower should be
1665	1665	16 divided into the basis of the Section 201(h)
1666	1666	17 investment credit property which secures the loan or
1667	1667	18 loans, using for this purpose the original basis of
1668	1668	19 such property on the date that it was placed in service
1669	1669	20 in a federally designated Foreign Trade Zone or
1670	1670	21 Sub-Zone located in Illinois. No taxpayer that is
1671	1671	22 eligible for the deduction provided in subparagraph
1672	1672	23 (M) of paragraph (2) of this subsection shall be
1673	1673	24 eligible for the deduction provided under this
1674	1674	25 subparagraph (M-1). The subtraction modification
1675	1675	26 available to taxpayers in any year under this
1676	1676
1677	1677
1678	1678
1679	1679
1680	1680
1681	1681	HB3580 - 46 - LRB103 05339 SPS 50358 b
1682	1682
1683	1683
1684	1684	HB3580- 47 -LRB103 05339 SPS 50358 b HB3580 - 47 - LRB103 05339 SPS 50358 b
1685	1685	HB3580 - 47 - LRB103 05339 SPS 50358 b
1686	1686	1 subsection shall be that portion of the total interest
1687	1687	2 paid by the borrower with respect to such loan
1688	1688	3 attributable to the eligible property as calculated
1689	1689	4 under the previous sentence;
1690	1690	5 (N) Two times any contribution made during the
1691	1691	6 taxable year to a designated zone organization to the
1692	1692	7 extent that the contribution (i) qualifies as a
1693	1693	8 charitable contribution under subsection (c) of
1694	1694	9 Section 170 of the Internal Revenue Code and (ii)
1695	1695	10 must, by its terms, be used for a project approved by
1696	1696	11 the Department of Commerce and Economic Opportunity
1697	1697	12 under Section 11 of the Illinois Enterprise Zone Act
1698	1698	13 or under Section 10-10 of the River Edge Redevelopment
1699	1699	14 Zone Act. This subparagraph (N) is exempt from the
1700	1700	15 provisions of Section 250;
1701	1701	16 (O) An amount equal to: (i) 85% for taxable years
1702	1702	17 ending on or before December 31, 1992, or, a
1703	1703	18 percentage equal to the percentage allowable under
1704	1704	19 Section 243(a)(1) of the Internal Revenue Code of 1986
1705	1705	20 for taxable years ending after December 31, 1992, of
1706	1706	21 the amount by which dividends included in taxable
1707	1707	22 income and received from a corporation that is not
1708	1708	23 created or organized under the laws of the United
1709	1709	24 States or any state or political subdivision thereof,
1710	1710	25 including, for taxable years ending on or after
1711	1711	26 December 31, 1988, dividends received or deemed
1712	1712
1713	1713
1714	1714
1715	1715
1716	1716
1717	1717	HB3580 - 47 - LRB103 05339 SPS 50358 b
1718	1718
1719	1719
1720	1720	HB3580- 48 -LRB103 05339 SPS 50358 b HB3580 - 48 - LRB103 05339 SPS 50358 b
1721	1721	HB3580 - 48 - LRB103 05339 SPS 50358 b
1722	1722	1 received or paid or deemed paid under Sections 951
1723	1723	2 through 965 of the Internal Revenue Code, exceed the
1724	1724	3 amount of the modification provided under subparagraph
1725	1725	4 (G) of paragraph (2) of this subsection (b) which is
1726	1726	5 related to such dividends, and including, for taxable
1727	1727	6 years ending on or after December 31, 2008, dividends
1728	1728	7 received from a captive real estate investment trust;
1729	1729	8 plus (ii) 100% of the amount by which dividends,
1730	1730	9 included in taxable income and received, including,
1731	1731	10 for taxable years ending on or after December 31,
1732	1732	11 1988, dividends received or deemed received or paid or
1733	1733	12 deemed paid under Sections 951 through 964 of the
1734	1734	13 Internal Revenue Code and including, for taxable years
1735	1735	14 ending on or after December 31, 2008, dividends
1736	1736	15 received from a captive real estate investment trust,
1737	1737	16 from any such corporation specified in clause (i) that
1738	1738	17 would but for the provisions of Section 1504(b)(3) of
1739	1739	18 the Internal Revenue Code be treated as a member of the
1740	1740	19 affiliated group which includes the dividend
1741	1741	20 recipient, exceed the amount of the modification
1742	1742	21 provided under subparagraph (G) of paragraph (2) of
1743	1743	22 this subsection (b) which is related to such
1744	1744	23 dividends. For taxable years ending on or after June
1745	1745	24 30, 2021, (i) for purposes of this subparagraph, the
1746	1746	25 term "dividend" does not include any amount treated as
1747	1747	26 a dividend under Section 1248 of the Internal Revenue
1748	1748
1749	1749
1750	1750
1751	1751
1752	1752
1753	1753	HB3580 - 48 - LRB103 05339 SPS 50358 b
1754	1754
1755	1755
1756	1756	HB3580- 49 -LRB103 05339 SPS 50358 b HB3580 - 49 - LRB103 05339 SPS 50358 b
1757	1757	HB3580 - 49 - LRB103 05339 SPS 50358 b
1758	1758	1 Code, and (ii) this subparagraph shall not apply to
1759	1759	2 dividends for which a deduction is allowed under
1760	1760	3 Section 245(a) of the Internal Revenue Code. This
1761	1761	4 subparagraph (O) is exempt from the provisions of
1762	1762	5 Section 250 of this Act;
1763	1763	6 (P) An amount equal to any contribution made to a
1764	1764	7 job training project established pursuant to the Tax
1765	1765	8 Increment Allocation Redevelopment Act;
1766	1766	9 (Q) An amount equal to the amount of the deduction
1767	1767	10 used to compute the federal income tax credit for
1768	1768	11 restoration of substantial amounts held under claim of
1769	1769	12 right for the taxable year pursuant to Section 1341 of
1770	1770	13 the Internal Revenue Code;
1771	1771	14 (R) On and after July 20, 1999, in the case of an
1772	1772	15 attorney-in-fact with respect to whom an interinsurer
1773	1773	16 or a reciprocal insurer has made the election under
1774	1774	17 Section 835 of the Internal Revenue Code, 26 U.S.C.
1775	1775	18 835, an amount equal to the excess, if any, of the
1776	1776	19 amounts paid or incurred by that interinsurer or
1777	1777	20 reciprocal insurer in the taxable year to the
1778	1778	21 attorney-in-fact over the deduction allowed to that
1779	1779	22 interinsurer or reciprocal insurer with respect to the
1780	1780	23 attorney-in-fact under Section 835(b) of the Internal
1781	1781	24 Revenue Code for the taxable year; the provisions of
1782	1782	25 this subparagraph are exempt from the provisions of
1783	1783	26 Section 250;
1784	1784
1785	1785
1786	1786
1787	1787
1788	1788
1789	1789	HB3580 - 49 - LRB103 05339 SPS 50358 b
1790	1790
1791	1791
1792	1792	HB3580- 50 -LRB103 05339 SPS 50358 b HB3580 - 50 - LRB103 05339 SPS 50358 b
1793	1793	HB3580 - 50 - LRB103 05339 SPS 50358 b
1794	1794	1 (S) For taxable years ending on or after December
1795	1795	2 31, 1997, in the case of a Subchapter S corporation, an
1796	1796	3 amount equal to all amounts of income allocable to a
1797	1797	4 shareholder subject to the Personal Property Tax
1798	1798	5 Replacement Income Tax imposed by subsections (c) and
1799	1799	6 (d) of Section 201 of this Act, including amounts
1800	1800	7 allocable to organizations exempt from federal income
1801	1801	8 tax by reason of Section 501(a) of the Internal
1802	1802	9 Revenue Code. This subparagraph (S) is exempt from the
1803	1803	10 provisions of Section 250;
1804	1804	11 (T) For taxable years 2001 and thereafter, for the
1805	1805	12 taxable year in which the bonus depreciation deduction
1806	1806	13 is taken on the taxpayer's federal income tax return
1807	1807	14 under subsection (k) of Section 168 of the Internal
1808	1808	15 Revenue Code and for each applicable taxable year
1809	1809	16 thereafter, an amount equal to "x", where:
1810	1810	17 (1) "y" equals the amount of the depreciation
1811	1811	18 deduction taken for the taxable year on the
1812	1812	19 taxpayer's federal income tax return on property
1813	1813	20 for which the bonus depreciation deduction was
1814	1814	21 taken in any year under subsection (k) of Section
1815	1815	22 168 of the Internal Revenue Code, but not
1816	1816	23 including the bonus depreciation deduction;
1817	1817	24 (2) for taxable years ending on or before
1818	1818	25 December 31, 2005, "x" equals "y" multiplied by 30
1819	1819	26 and then divided by 70 (or "y" multiplied by
1820	1820
1821	1821
1822	1822
1823	1823
1824	1824
1825	1825	HB3580 - 50 - LRB103 05339 SPS 50358 b
1826	1826
1827	1827
1828	1828	HB3580- 51 -LRB103 05339 SPS 50358 b HB3580 - 51 - LRB103 05339 SPS 50358 b
1829	1829	HB3580 - 51 - LRB103 05339 SPS 50358 b
1830	1830	1 0.429); and
1831	1831	2 (3) for taxable years ending after December
1832	1832	3 31, 2005:
1833	1833	4 (i) for property on which a bonus
1834	1834	5 depreciation deduction of 30% of the adjusted
1835	1835	6 basis was taken, "x" equals "y" multiplied by
1836	1836	7 30 and then divided by 70 (or "y" multiplied
1837	1837	8 by 0.429);
1838	1838	9 (ii) for property on which a bonus
1839	1839	10 depreciation deduction of 50% of the adjusted
1840	1840	11 basis was taken, "x" equals "y" multiplied by
1841	1841	12 1.0;
1842	1842	13 (iii) for property on which a bonus
1843	1843	14 depreciation deduction of 100% of the adjusted
1844	1844	15 basis was taken in a taxable year ending on or
1845	1845	16 after December 31, 2021, "x" equals the
1846	1846	17 depreciation deduction that would be allowed
1847	1847	18 on that property if the taxpayer had made the
1848	1848	19 election under Section 168(k)(7) of the
1849	1849	20 Internal Revenue Code to not claim bonus
1850	1850	21 depreciation on that property; and
1851	1851	22 (iv) for property on which a bonus
1852	1852	23 depreciation deduction of a percentage other
1853	1853	24 than 30%, 50% or 100% of the adjusted basis
1854	1854	25 was taken in a taxable year ending on or after
1855	1855	26 December 31, 2021, "x" equals "y" multiplied
1856	1856
1857	1857
1858	1858
1859	1859
1860	1860
1861	1861	HB3580 - 51 - LRB103 05339 SPS 50358 b
1862	1862
1863	1863
1864	1864	HB3580- 52 -LRB103 05339 SPS 50358 b HB3580 - 52 - LRB103 05339 SPS 50358 b
1865	1865	HB3580 - 52 - LRB103 05339 SPS 50358 b
1866	1866	1 by 100 times the percentage bonus depreciation
1867	1867	2 on the property (that is, 100(bonus%)) and
1868	1868	3 then divided by 100 times 1 minus the
1869	1869	4 percentage bonus depreciation on the property
1870	1870	5 (that is, 100(1bonus%)).
1871	1871	6 The aggregate amount deducted under this
1872	1872	7 subparagraph in all taxable years for any one piece of
1873	1873	8 property may not exceed the amount of the bonus
1874	1874	9 depreciation deduction taken on that property on the
1875	1875	10 taxpayer's federal income tax return under subsection
1876	1876	11 (k) of Section 168 of the Internal Revenue Code. This
1877	1877	12 subparagraph (T) is exempt from the provisions of
1878	1878	13 Section 250;
1879	1879	14 (U) If the taxpayer sells, transfers, abandons, or
1880	1880	15 otherwise disposes of property for which the taxpayer
1881	1881	16 was required in any taxable year to make an addition
1882	1882	17 modification under subparagraph (E-10), then an amount
1883	1883	18 equal to that addition modification.
1884	1884	19 If the taxpayer continues to own property through
1885	1885	20 the last day of the last tax year for which a taxpayer
1886	1886	21 may claim a depreciation deduction for federal income
1887	1887	22 tax purposes a subtraction is allowed with respect to
1888	1888	23 that property under subparagraph (T) and for which the
1889	1889	24 taxpayer was required in any taxable year to make an
1890	1890	25 addition modification under subparagraph (E-10), then
1891	1891	26 an amount equal to that addition modification.
1892	1892
1893	1893
1894	1894
1895	1895
1896	1896
1897	1897	HB3580 - 52 - LRB103 05339 SPS 50358 b
1898	1898
1899	1899
1900	1900	HB3580- 53 -LRB103 05339 SPS 50358 b HB3580 - 53 - LRB103 05339 SPS 50358 b
1901	1901	HB3580 - 53 - LRB103 05339 SPS 50358 b
1902	1902	1 The taxpayer is allowed to take the deduction
1903	1903	2 under this subparagraph only once with respect to any
1904	1904	3 one piece of property.
1905	1905	4 This subparagraph (U) is exempt from the
1906	1906	5 provisions of Section 250;
1907	1907	6 (V) The amount of: (i) any interest income (net of
1908	1908	7 the deductions allocable thereto) taken into account
1909	1909	8 for the taxable year with respect to a transaction
1910	1910	9 with a taxpayer that is required to make an addition
1911	1911	10 modification with respect to such transaction under
1912	1912	11 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
1913	1913	12 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
1914	1914	13 the amount of such addition modification, (ii) any
1915	1915	14 income from intangible property (net of the deductions
1916	1916	15 allocable thereto) taken into account for the taxable
1917	1917	16 year with respect to a transaction with a taxpayer
1918	1918	17 that is required to make an addition modification with
1919	1919	18 respect to such transaction under Section
1920	1920	19 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
1921	1921	20 203(d)(2)(D-8), but not to exceed the amount of such
1922	1922	21 addition modification, and (iii) any insurance premium
1923	1923	22 income (net of deductions allocable thereto) taken
1924	1924	23 into account for the taxable year with respect to a
1925	1925	24 transaction with a taxpayer that is required to make
1926	1926	25 an addition modification with respect to such
1927	1927	26 transaction under Section 203(a)(2)(D-19), Section
1928	1928
1929	1929
1930	1930
1931	1931
1932	1932
1933	1933	HB3580 - 53 - LRB103 05339 SPS 50358 b
1934	1934
1935	1935
1936	1936	HB3580- 54 -LRB103 05339 SPS 50358 b HB3580 - 54 - LRB103 05339 SPS 50358 b
1937	1937	HB3580 - 54 - LRB103 05339 SPS 50358 b
1938	1938	1 203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
1939	1939	2 203(d)(2)(D-9), but not to exceed the amount of that
1940	1940	3 addition modification. This subparagraph (V) is exempt
1941	1941	4 from the provisions of Section 250;
1942	1942	5 (W) An amount equal to the interest income taken
1943	1943	6 into account for the taxable year (net of the
1944	1944	7 deductions allocable thereto) with respect to
1945	1945	8 transactions with (i) a foreign person who would be a
1946	1946	9 member of the taxpayer's unitary business group but
1947	1947	10 for the fact that the foreign person's business
1948	1948	11 activity outside the United States is 80% or more of
1949	1949	12 that person's total business activity and (ii) for
1950	1950	13 taxable years ending on or after December 31, 2008, to
1951	1951	14 a person who would be a member of the same unitary
1952	1952	15 business group but for the fact that the person is
1953	1953	16 prohibited under Section 1501(a)(27) from being
1954	1954	17 included in the unitary business group because he or
1955	1955	18 she is ordinarily required to apportion business
1956	1956	19 income under different subsections of Section 304, but
1957	1957	20 not to exceed the addition modification required to be
1958	1958	21 made for the same taxable year under Section
1959	1959	22 203(b)(2)(E-12) for interest paid, accrued, or
1960	1960	23 incurred, directly or indirectly, to the same person.
1961	1961	24 This subparagraph (W) is exempt from the provisions of
1962	1962	25 Section 250;
1963	1963	26 (X) An amount equal to the income from intangible
1964	1964
1965	1965
1966	1966
1967	1967
1968	1968
1969	1969	HB3580 - 54 - LRB103 05339 SPS 50358 b
1970	1970
1971	1971
1972	1972	HB3580- 55 -LRB103 05339 SPS 50358 b HB3580 - 55 - LRB103 05339 SPS 50358 b
1973	1973	HB3580 - 55 - LRB103 05339 SPS 50358 b
1974	1974	1 property taken into account for the taxable year (net
1975	1975	2 of the deductions allocable thereto) with respect to
1976	1976	3 transactions with (i) a foreign person who would be a
1977	1977	4 member of the taxpayer's unitary business group but
1978	1978	5 for the fact that the foreign person's business
1979	1979	6 activity outside the United States is 80% or more of
1980	1980	7 that person's total business activity and (ii) for
1981	1981	8 taxable years ending on or after December 31, 2008, to
1982	1982	9 a person who would be a member of the same unitary
1983	1983	10 business group but for the fact that the person is
1984	1984	11 prohibited under Section 1501(a)(27) from being
1985	1985	12 included in the unitary business group because he or
1986	1986	13 she is ordinarily required to apportion business
1987	1987	14 income under different subsections of Section 304, but
1988	1988	15 not to exceed the addition modification required to be
1989	1989	16 made for the same taxable year under Section
1990	1990	17 203(b)(2)(E-13) for intangible expenses and costs
1991	1991	18 paid, accrued, or incurred, directly or indirectly, to
1992	1992	19 the same foreign person. This subparagraph (X) is
1993	1993	20 exempt from the provisions of Section 250;
1994	1994	21 (Y) For taxable years ending on or after December
1995	1995	22 31, 2011, in the case of a taxpayer who was required to
1996	1996	23 add back any insurance premiums under Section
1997	1997	24 203(b)(2)(E-14), such taxpayer may elect to subtract
1998	1998	25 that part of a reimbursement received from the
1999	1999	26 insurance company equal to the amount of the expense
2000	2000
2001	2001
2002	2002
2003	2003
2004	2004
2005	2005	HB3580 - 55 - LRB103 05339 SPS 50358 b
2006	2006
2007	2007
2008	2008	HB3580- 56 -LRB103 05339 SPS 50358 b HB3580 - 56 - LRB103 05339 SPS 50358 b
2009	2009	HB3580 - 56 - LRB103 05339 SPS 50358 b
2010	2010	1 or loss (including expenses incurred by the insurance
2011	2011	2 company) that would have been taken into account as a
2012	2012	3 deduction for federal income tax purposes if the
2013	2013	4 expense or loss had been uninsured. If a taxpayer
2014	2014	5 makes the election provided for by this subparagraph
2015	2015	6 (Y), the insurer to which the premiums were paid must
2016	2016	7 add back to income the amount subtracted by the
2017	2017	8 taxpayer pursuant to this subparagraph (Y). This
2018	2018	9 subparagraph (Y) is exempt from the provisions of
2019	2019	10 Section 250; and
2020	2020	11 (Z) The difference between the nondeductible
2021	2021	12 controlled foreign corporation dividends under Section
2022	2022	13 965(e)(3) of the Internal Revenue Code over the
2023	2023	14 taxable income of the taxpayer, computed without
2024	2024	15 regard to Section 965(e)(2)(A) of the Internal Revenue
2025	2025	16 Code, and without regard to any net operating loss
2026	2026	17 deduction. This subparagraph (Z) is exempt from the
2027	2027	18 provisions of Section 250.
2028	2028	19 (3) Special rule. For purposes of paragraph (2)(A),
2029	2029	20 "gross income" in the case of a life insurance company,
2030	2030	21 for tax years ending on and after December 31, 1994, and
2031	2031	22 prior to December 31, 2011, shall mean the gross
2032	2032	23 investment income for the taxable year and, for tax years
2033	2033	24 ending on or after December 31, 2011, shall mean all
2034	2034	25 amounts included in life insurance gross income under
2035	2035	26 Section 803(a)(3) of the Internal Revenue Code.
2036	2036
2037	2037
2038	2038
2039	2039
2040	2040
2041	2041	HB3580 - 56 - LRB103 05339 SPS 50358 b
2042	2042
2043	2043
2044	2044	HB3580- 57 -LRB103 05339 SPS 50358 b HB3580 - 57 - LRB103 05339 SPS 50358 b
2045	2045	HB3580 - 57 - LRB103 05339 SPS 50358 b
2046	2046	1 (c) Trusts and estates.
2047	2047	2 (1) In general. In the case of a trust or estate, base
2048	2048	3 income means an amount equal to the taxpayer's taxable
2049	2049	4 income for the taxable year as modified by paragraph (2).
2050	2050	5 (2) Modifications. Subject to the provisions of
2051	2051	6 paragraph (3), the taxable income referred to in paragraph
2052	2052	7 (1) shall be modified by adding thereto the sum of the
2053	2053	8 following amounts:
2054	2054	9 (A) An amount equal to all amounts paid or accrued
2055	2055	10 to the taxpayer as interest or dividends during the
2056	2056	11 taxable year to the extent excluded from gross income
2057	2057	12 in the computation of taxable income;
2058	2058	13 (B) In the case of (i) an estate, $600; (ii) a
2059	2059	14 trust which, under its governing instrument, is
2060	2060	15 required to distribute all of its income currently,
2061	2061	16 $300; and (iii) any other trust, $100, but in each such
2062	2062	17 case, only to the extent such amount was deducted in
2063	2063	18 the computation of taxable income;
2064	2064	19 (C) An amount equal to the amount of tax imposed by
2065	2065	20 this Act to the extent deducted from gross income in
2066	2066	21 the computation of taxable income for the taxable
2067	2067	22 year;
2068	2068	23 (D) The amount of any net operating loss deduction
2069	2069	24 taken in arriving at taxable income, other than a net
2070	2070	25 operating loss carried forward from a taxable year
2071	2071
2072	2072
2073	2073
2074	2074
2075	2075
2076	2076	HB3580 - 57 - LRB103 05339 SPS 50358 b
2077	2077
2078	2078
2079	2079	HB3580- 58 -LRB103 05339 SPS 50358 b HB3580 - 58 - LRB103 05339 SPS 50358 b
2080	2080	HB3580 - 58 - LRB103 05339 SPS 50358 b
2081	2081	1 ending prior to December 31, 1986;
2082	2082	2 (E) For taxable years in which a net operating
2083	2083	3 loss carryback or carryforward from a taxable year
2084	2084	4 ending prior to December 31, 1986 is an element of
2085	2085	5 taxable income under paragraph (1) of subsection (e)
2086	2086	6 or subparagraph (E) of paragraph (2) of subsection
2087	2087	7 (e), the amount by which addition modifications other
2088	2088	8 than those provided by this subparagraph (E) exceeded
2089	2089	9 subtraction modifications in such taxable year, with
2090	2090	10 the following limitations applied in the order that
2091	2091	11 they are listed:
2092	2092	12 (i) the addition modification relating to the
2093	2093	13 net operating loss carried back or forward to the
2094	2094	14 taxable year from any taxable year ending prior to
2095	2095	15 December 31, 1986 shall be reduced by the amount
2096	2096	16 of addition modification under this subparagraph
2097	2097	17 (E) which related to that net operating loss and
2098	2098	18 which was taken into account in calculating the
2099	2099	19 base income of an earlier taxable year, and
2100	2100	20 (ii) the addition modification relating to the
2101	2101	21 net operating loss carried back or forward to the
2102	2102	22 taxable year from any taxable year ending prior to
2103	2103	23 December 31, 1986 shall not exceed the amount of
2104	2104	24 such carryback or carryforward;
2105	2105	25 For taxable years in which there is a net
2106	2106	26 operating loss carryback or carryforward from more
2107	2107
2108	2108
2109	2109
2110	2110
2111	2111
2112	2112	HB3580 - 58 - LRB103 05339 SPS 50358 b
2113	2113
2114	2114
2115	2115	HB3580- 59 -LRB103 05339 SPS 50358 b HB3580 - 59 - LRB103 05339 SPS 50358 b
2116	2116	HB3580 - 59 - LRB103 05339 SPS 50358 b
2117	2117	1 than one other taxable year ending prior to December
2118	2118	2 31, 1986, the addition modification provided in this
2119	2119	3 subparagraph (E) shall be the sum of the amounts
2120	2120	4 computed independently under the preceding provisions
2121	2121	5 of this subparagraph (E) for each such taxable year;
2122	2122	6 (F) For taxable years ending on or after January
2123	2123	7 1, 1989, an amount equal to the tax deducted pursuant
2124	2124	8 to Section 164 of the Internal Revenue Code if the
2125	2125	9 trust or estate is claiming the same tax for purposes
2126	2126	10 of the Illinois foreign tax credit under Section 601
2127	2127	11 of this Act;
2128	2128	12 (G) An amount equal to the amount of the capital
2129	2129	13 gain deduction allowable under the Internal Revenue
2130	2130	14 Code, to the extent deducted from gross income in the
2131	2131	15 computation of taxable income;
2132	2132	16 (G-5) For taxable years ending after December 31,
2133	2133	17 1997, an amount equal to any eligible remediation
2134	2134	18 costs that the trust or estate deducted in computing
2135	2135	19 adjusted gross income and for which the trust or
2136	2136	20 estate claims a credit under subsection (l) of Section
2137	2137	21 201;
2138	2138	22 (G-10) For taxable years 2001 and thereafter, an
2139	2139	23 amount equal to the bonus depreciation deduction taken
2140	2140	24 on the taxpayer's federal income tax return for the
2141	2141	25 taxable year under subsection (k) of Section 168 of
2142	2142	26 the Internal Revenue Code; and
2143	2143
2144	2144
2145	2145
2146	2146
2147	2147
2148	2148	HB3580 - 59 - LRB103 05339 SPS 50358 b
2149	2149
2150	2150
2151	2151	HB3580- 60 -LRB103 05339 SPS 50358 b HB3580 - 60 - LRB103 05339 SPS 50358 b
2152	2152	HB3580 - 60 - LRB103 05339 SPS 50358 b
2153	2153	1 (G-11) If the taxpayer sells, transfers, abandons,
2154	2154	2 or otherwise disposes of property for which the
2155	2155	3 taxpayer was required in any taxable year to make an
2156	2156	4 addition modification under subparagraph (G-10), then
2157	2157	5 an amount equal to the aggregate amount of the
2158	2158	6 deductions taken in all taxable years under
2159	2159	7 subparagraph (R) with respect to that property.
2160	2160	8 If the taxpayer continues to own property through
2161	2161	9 the last day of the last tax year for which a taxpayer
2162	2162	10 may claim a depreciation deduction for federal income
2163	2163	11 tax purposes a subtraction is allowed with respect to
2164	2164	12 that property under subparagraph (R) and for which the
2165	2165	13 taxpayer was allowed in any taxable year to make a
2166	2166	14 subtraction modification under subparagraph (R), then
2167	2167	15 an amount equal to that subtraction modification.
2168	2168	16 The taxpayer is required to make the addition
2169	2169	17 modification under this subparagraph only once with
2170	2170	18 respect to any one piece of property;
2171	2171	19 (G-12) An amount equal to the amount otherwise
2172	2172	20 allowed as a deduction in computing base income for
2173	2173	21 interest paid, accrued, or incurred, directly or
2174	2174	22 indirectly, (i) for taxable years ending on or after
2175	2175	23 December 31, 2004, to a foreign person who would be a
2176	2176	24 member of the same unitary business group but for the
2177	2177	25 fact that the foreign person's business activity
2178	2178	26 outside the United States is 80% or more of the foreign
2179	2179
2180	2180
2181	2181
2182	2182
2183	2183
2184	2184	HB3580 - 60 - LRB103 05339 SPS 50358 b
2185	2185
2186	2186
2187	2187	HB3580- 61 -LRB103 05339 SPS 50358 b HB3580 - 61 - LRB103 05339 SPS 50358 b
2188	2188	HB3580 - 61 - LRB103 05339 SPS 50358 b
2189	2189	1 person's total business activity and (ii) for taxable
2190	2190	2 years ending on or after December 31, 2008, to a person
2191	2191	3 who would be a member of the same unitary business
2192	2192	4 group but for the fact that the person is prohibited
2193	2193	5 under Section 1501(a)(27) from being included in the
2194	2194	6 unitary business group because he or she is ordinarily
2195	2195	7 required to apportion business income under different
2196	2196	8 subsections of Section 304. The addition modification
2197	2197	9 required by this subparagraph shall be reduced to the
2198	2198	10 extent that dividends were included in base income of
2199	2199	11 the unitary group for the same taxable year and
2200	2200	12 received by the taxpayer or by a member of the
2201	2201	13 taxpayer's unitary business group (including amounts
2202	2202	14 included in gross income pursuant to Sections 951
2203	2203	15 through 964 of the Internal Revenue Code and amounts
2204	2204	16 included in gross income under Section 78 of the
2205	2205	17 Internal Revenue Code) with respect to the stock of
2206	2206	18 the same person to whom the interest was paid,
2207	2207	19 accrued, or incurred.
2208	2208	20 This paragraph shall not apply to the following:
2209	2209	21 (i) an item of interest paid, accrued, or
2210	2210	22 incurred, directly or indirectly, to a person who
2211	2211	23 is subject in a foreign country or state, other
2212	2212	24 than a state which requires mandatory unitary
2213	2213	25 reporting, to a tax on or measured by net income
2214	2214	26 with respect to such interest; or
2215	2215
2216	2216
2217	2217
2218	2218
2219	2219
2220	2220	HB3580 - 61 - LRB103 05339 SPS 50358 b
2221	2221
2222	2222
2223	2223	HB3580- 62 -LRB103 05339 SPS 50358 b HB3580 - 62 - LRB103 05339 SPS 50358 b
2224	2224	HB3580 - 62 - LRB103 05339 SPS 50358 b
2225	2225	1 (ii) an item of interest paid, accrued, or
2226	2226	2 incurred, directly or indirectly, to a person if
2227	2227	3 the taxpayer can establish, based on a
2228	2228	4 preponderance of the evidence, both of the
2229	2229	5 following:
2230	2230	6 (a) the person, during the same taxable
2231	2231	7 year, paid, accrued, or incurred, the interest
2232	2232	8 to a person that is not a related member, and
2233	2233	9 (b) the transaction giving rise to the
2234	2234	10 interest expense between the taxpayer and the
2235	2235	11 person did not have as a principal purpose the
2236	2236	12 avoidance of Illinois income tax, and is paid
2237	2237	13 pursuant to a contract or agreement that
2238	2238	14 reflects an arm's-length interest rate and
2239	2239	15 terms; or
2240	2240	16 (iii) the taxpayer can establish, based on
2241	2241	17 clear and convincing evidence, that the interest
2242	2242	18 paid, accrued, or incurred relates to a contract
2243	2243	19 or agreement entered into at arm's-length rates
2244	2244	20 and terms and the principal purpose for the
2245	2245	21 payment is not federal or Illinois tax avoidance;
2246	2246	22 or
2247	2247	23 (iv) an item of interest paid, accrued, or
2248	2248	24 incurred, directly or indirectly, to a person if
2249	2249	25 the taxpayer establishes by clear and convincing
2250	2250	26 evidence that the adjustments are unreasonable; or
2251	2251
2252	2252
2253	2253
2254	2254
2255	2255
2256	2256	HB3580 - 62 - LRB103 05339 SPS 50358 b
2257	2257
2258	2258
2259	2259	HB3580- 63 -LRB103 05339 SPS 50358 b HB3580 - 63 - LRB103 05339 SPS 50358 b
2260	2260	HB3580 - 63 - LRB103 05339 SPS 50358 b
2261	2261	1 if the taxpayer and the Director agree in writing
2262	2262	2 to the application or use of an alternative method
2263	2263	3 of apportionment under Section 304(f).
2264	2264	4 Nothing in this subsection shall preclude the
2265	2265	5 Director from making any other adjustment
2266	2266	6 otherwise allowed under Section 404 of this Act
2267	2267	7 for any tax year beginning after the effective
2268	2268	8 date of this amendment provided such adjustment is
2269	2269	9 made pursuant to regulation adopted by the
2270	2270	10 Department and such regulations provide methods
2271	2271	11 and standards by which the Department will utilize
2272	2272	12 its authority under Section 404 of this Act;
2273	2273	13 (G-13) An amount equal to the amount of intangible
2274	2274	14 expenses and costs otherwise allowed as a deduction in
2275	2275	15 computing base income, and that were paid, accrued, or
2276	2276	16 incurred, directly or indirectly, (i) for taxable
2277	2277	17 years ending on or after December 31, 2004, to a
2278	2278	18 foreign person who would be a member of the same
2279	2279	19 unitary business group but for the fact that the
2280	2280	20 foreign person's business activity outside the United
2281	2281	21 States is 80% or more of that person's total business
2282	2282	22 activity and (ii) for taxable years ending on or after
2283	2283	23 December 31, 2008, to a person who would be a member of
2284	2284	24 the same unitary business group but for the fact that
2285	2285	25 the person is prohibited under Section 1501(a)(27)
2286	2286	26 from being included in the unitary business group
2287	2287
2288	2288
2289	2289
2290	2290
2291	2291
2292	2292	HB3580 - 63 - LRB103 05339 SPS 50358 b
2293	2293
2294	2294
2295	2295	HB3580- 64 -LRB103 05339 SPS 50358 b HB3580 - 64 - LRB103 05339 SPS 50358 b
2296	2296	HB3580 - 64 - LRB103 05339 SPS 50358 b
2297	2297	1 because he or she is ordinarily required to apportion
2298	2298	2 business income under different subsections of Section
2299	2299	3 304. The addition modification required by this
2300	2300	4 subparagraph shall be reduced to the extent that
2301	2301	5 dividends were included in base income of the unitary
2302	2302	6 group for the same taxable year and received by the
2303	2303	7 taxpayer or by a member of the taxpayer's unitary
2304	2304	8 business group (including amounts included in gross
2305	2305	9 income pursuant to Sections 951 through 964 of the
2306	2306	10 Internal Revenue Code and amounts included in gross
2307	2307	11 income under Section 78 of the Internal Revenue Code)
2308	2308	12 with respect to the stock of the same person to whom
2309	2309	13 the intangible expenses and costs were directly or
2310	2310	14 indirectly paid, incurred, or accrued. The preceding
2311	2311	15 sentence shall not apply to the extent that the same
2312	2312	16 dividends caused a reduction to the addition
2313	2313	17 modification required under Section 203(c)(2)(G-12) of
2314	2314	18 this Act. As used in this subparagraph, the term
2315	2315	19 "intangible expenses and costs" includes: (1)
2316	2316	20 expenses, losses, and costs for or related to the
2317	2317	21 direct or indirect acquisition, use, maintenance or
2318	2318	22 management, ownership, sale, exchange, or any other
2319	2319	23 disposition of intangible property; (2) losses
2320	2320	24 incurred, directly or indirectly, from factoring
2321	2321	25 transactions or discounting transactions; (3) royalty,
2322	2322	26 patent, technical, and copyright fees; (4) licensing
2323	2323
2324	2324
2325	2325
2326	2326
2327	2327
2328	2328	HB3580 - 64 - LRB103 05339 SPS 50358 b
2329	2329
2330	2330
2331	2331	HB3580- 65 -LRB103 05339 SPS 50358 b HB3580 - 65 - LRB103 05339 SPS 50358 b
2332	2332	HB3580 - 65 - LRB103 05339 SPS 50358 b
2333	2333	1 fees; and (5) other similar expenses and costs. For
2334	2334	2 purposes of this subparagraph, "intangible property"
2335	2335	3 includes patents, patent applications, trade names,
2336	2336	4 trademarks, service marks, copyrights, mask works,
2337	2337	5 trade secrets, and similar types of intangible assets.
2338	2338	6 This paragraph shall not apply to the following:
2339	2339	7 (i) any item of intangible expenses or costs
2340	2340	8 paid, accrued, or incurred, directly or
2341	2341	9 indirectly, from a transaction with a person who
2342	2342	10 is subject in a foreign country or state, other
2343	2343	11 than a state which requires mandatory unitary
2344	2344	12 reporting, to a tax on or measured by net income
2345	2345	13 with respect to such item; or
2346	2346	14 (ii) any item of intangible expense or cost
2347	2347	15 paid, accrued, or incurred, directly or
2348	2348	16 indirectly, if the taxpayer can establish, based
2349	2349	17 on a preponderance of the evidence, both of the
2350	2350	18 following:
2351	2351	19 (a) the person during the same taxable
2352	2352	20 year paid, accrued, or incurred, the
2353	2353	21 intangible expense or cost to a person that is
2354	2354	22 not a related member, and
2355	2355	23 (b) the transaction giving rise to the
2356	2356	24 intangible expense or cost between the
2357	2357	25 taxpayer and the person did not have as a
2358	2358	26 principal purpose the avoidance of Illinois
2359	2359
2360	2360
2361	2361
2362	2362
2363	2363
2364	2364	HB3580 - 65 - LRB103 05339 SPS 50358 b
2365	2365
2366	2366
2367	2367	HB3580- 66 -LRB103 05339 SPS 50358 b HB3580 - 66 - LRB103 05339 SPS 50358 b
2368	2368	HB3580 - 66 - LRB103 05339 SPS 50358 b
2369	2369	1 income tax, and is paid pursuant to a contract
2370	2370	2 or agreement that reflects arm's-length terms;
2371	2371	3 or
2372	2372	4 (iii) any item of intangible expense or cost
2373	2373	5 paid, accrued, or incurred, directly or
2374	2374	6 indirectly, from a transaction with a person if
2375	2375	7 the taxpayer establishes by clear and convincing
2376	2376	8 evidence, that the adjustments are unreasonable;
2377	2377	9 or if the taxpayer and the Director agree in
2378	2378	10 writing to the application or use of an
2379	2379	11 alternative method of apportionment under Section
2380	2380	12 304(f);
2381	2381	13 Nothing in this subsection shall preclude the
2382	2382	14 Director from making any other adjustment
2383	2383	15 otherwise allowed under Section 404 of this Act
2384	2384	16 for any tax year beginning after the effective
2385	2385	17 date of this amendment provided such adjustment is
2386	2386	18 made pursuant to regulation adopted by the
2387	2387	19 Department and such regulations provide methods
2388	2388	20 and standards by which the Department will utilize
2389	2389	21 its authority under Section 404 of this Act;
2390	2390	22 (G-14) For taxable years ending on or after
2391	2391	23 December 31, 2008, an amount equal to the amount of
2392	2392	24 insurance premium expenses and costs otherwise allowed
2393	2393	25 as a deduction in computing base income, and that were
2394	2394	26 paid, accrued, or incurred, directly or indirectly, to
2395	2395
2396	2396
2397	2397
2398	2398
2399	2399
2400	2400	HB3580 - 66 - LRB103 05339 SPS 50358 b
2401	2401
2402	2402
2403	2403	HB3580- 67 -LRB103 05339 SPS 50358 b HB3580 - 67 - LRB103 05339 SPS 50358 b
2404	2404	HB3580 - 67 - LRB103 05339 SPS 50358 b
2405	2405	1 a person who would be a member of the same unitary
2406	2406	2 business group but for the fact that the person is
2407	2407	3 prohibited under Section 1501(a)(27) from being
2408	2408	4 included in the unitary business group because he or
2409	2409	5 she is ordinarily required to apportion business
2410	2410	6 income under different subsections of Section 304. The
2411	2411	7 addition modification required by this subparagraph
2412	2412	8 shall be reduced to the extent that dividends were
2413	2413	9 included in base income of the unitary group for the
2414	2414	10 same taxable year and received by the taxpayer or by a
2415	2415	11 member of the taxpayer's unitary business group
2416	2416	12 (including amounts included in gross income under
2417	2417	13 Sections 951 through 964 of the Internal Revenue Code
2418	2418	14 and amounts included in gross income under Section 78
2419	2419	15 of the Internal Revenue Code) with respect to the
2420	2420	16 stock of the same person to whom the premiums and costs
2421	2421	17 were directly or indirectly paid, incurred, or
2422	2422	18 accrued. The preceding sentence does not apply to the
2423	2423	19 extent that the same dividends caused a reduction to
2424	2424	20 the addition modification required under Section
2425	2425	21 203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this
2426	2426	22 Act;
2427	2427	23 (G-15) An amount equal to the credit allowable to
2428	2428	24 the taxpayer under Section 218(a) of this Act,
2429	2429	25 determined without regard to Section 218(c) of this
2430	2430	26 Act;
2431	2431
2432	2432
2433	2433
2434	2434
2435	2435
2436	2436	HB3580 - 67 - LRB103 05339 SPS 50358 b
2437	2437
2438	2438
2439	2439	HB3580- 68 -LRB103 05339 SPS 50358 b HB3580 - 68 - LRB103 05339 SPS 50358 b
2440	2440	HB3580 - 68 - LRB103 05339 SPS 50358 b
2441	2441	1 (G-16) For taxable years ending on or after
2442	2442	2 December 31, 2017, an amount equal to the deduction
2443	2443	3 allowed under Section 199 of the Internal Revenue Code
2444	2444	4 for the taxable year;
2445	2445	5 and by deducting from the total so obtained the sum of the
2446	2446	6 following amounts:
2447	2447	7 (H) An amount equal to all amounts included in
2448	2448	8 such total pursuant to the provisions of Sections
2449	2449	9 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 408
2450	2450	10 of the Internal Revenue Code or included in such total
2451	2451	11 as distributions under the provisions of any
2452	2452	12 retirement or disability plan for employees of any
2453	2453	13 governmental agency or unit, or retirement payments to
2454	2454	14 retired partners, which payments are excluded in
2455	2455	15 computing net earnings from self employment by Section
2456	2456	16 1402 of the Internal Revenue Code and regulations
2457	2457	17 adopted pursuant thereto;
2458	2458	18 (I) The valuation limitation amount;
2459	2459	19 (J) An amount equal to the amount of any tax
2460	2460	20 imposed by this Act which was refunded to the taxpayer
2461	2461	21 and included in such total for the taxable year;
2462	2462	22 (K) An amount equal to all amounts included in
2463	2463	23 taxable income as modified by subparagraphs (A), (B),
2464	2464	24 (C), (D), (E), (F) and (G) which are exempt from
2465	2465	25 taxation by this State either by reason of its
2466	2466	26 statutes or Constitution or by reason of the
2467	2467
2468	2468
2469	2469
2470	2470
2471	2471
2472	2472	HB3580 - 68 - LRB103 05339 SPS 50358 b
2473	2473
2474	2474
2475	2475	HB3580- 69 -LRB103 05339 SPS 50358 b HB3580 - 69 - LRB103 05339 SPS 50358 b
2476	2476	HB3580 - 69 - LRB103 05339 SPS 50358 b
2477	2477	1 Constitution, treaties or statutes of the United
2478	2478	2 States; provided that, in the case of any statute of
2479	2479	3 this State that exempts income derived from bonds or
2480	2480	4 other obligations from the tax imposed under this Act,
2481	2481	5 the amount exempted shall be the interest net of bond
2482	2482	6 premium amortization;
2483	2483	7 (L) With the exception of any amounts subtracted
2484	2484	8 under subparagraph (K), an amount equal to the sum of
2485	2485	9 all amounts disallowed as deductions by (i) Sections
2486	2486	10 171(a)(2) and 265(a)(2) of the Internal Revenue Code,
2487	2487	11 and all amounts of expenses allocable to interest and
2488	2488	12 disallowed as deductions by Section 265(a)(1) of the
2489	2489	13 Internal Revenue Code; and (ii) for taxable years
2490	2490	14 ending on or after August 13, 1999, Sections
2491	2491	15 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
2492	2492	16 Internal Revenue Code, plus, (iii) for taxable years
2493	2493	17 ending on or after December 31, 2011, Section
2494	2494	18 45G(e)(3) of the Internal Revenue Code and, for
2495	2495	19 taxable years ending on or after December 31, 2008,
2496	2496	20 any amount included in gross income under Section 87
2497	2497	21 of the Internal Revenue Code; the provisions of this
2498	2498	22 subparagraph are exempt from the provisions of Section
2499	2499	23 250;
2500	2500	24 (M) An amount equal to those dividends included in
2501	2501	25 such total which were paid by a corporation which
2502	2502	26 conducts business operations in a River Edge
2503	2503
2504	2504
2505	2505
2506	2506
2507	2507
2508	2508	HB3580 - 69 - LRB103 05339 SPS 50358 b
2509	2509
2510	2510
2511	2511	HB3580- 70 -LRB103 05339 SPS 50358 b HB3580 - 70 - LRB103 05339 SPS 50358 b
2512	2512	HB3580 - 70 - LRB103 05339 SPS 50358 b
2513	2513	1 Redevelopment Zone or zones created under the River
2514	2514	2 Edge Redevelopment Zone Act and conducts substantially
2515	2515	3 all of its operations in a River Edge Redevelopment
2516	2516	4 Zone or zones. This subparagraph (M) is exempt from
2517	2517	5 the provisions of Section 250;
2518	2518	6 (N) An amount equal to any contribution made to a
2519	2519	7 job training project established pursuant to the Tax
2520	2520	8 Increment Allocation Redevelopment Act;
2521	2521	9 (O) An amount equal to those dividends included in
2522	2522	10 such total that were paid by a corporation that
2523	2523	11 conducts business operations in a federally designated
2524	2524	12 Foreign Trade Zone or Sub-Zone and that is designated
2525	2525	13 a High Impact Business located in Illinois; provided
2526	2526	14 that dividends eligible for the deduction provided in
2527	2527	15 subparagraph (M) of paragraph (2) of this subsection
2528	2528	16 shall not be eligible for the deduction provided under
2529	2529	17 this subparagraph (O);
2530	2530	18 (P) An amount equal to the amount of the deduction
2531	2531	19 used to compute the federal income tax credit for
2532	2532	20 restoration of substantial amounts held under claim of
2533	2533	21 right for the taxable year pursuant to Section 1341 of
2534	2534	22 the Internal Revenue Code;
2535	2535	23 (Q) For taxable year 1999 and thereafter, an
2536	2536	24 amount equal to the amount of any (i) distributions,
2537	2537	25 to the extent includible in gross income for federal
2538	2538	26 income tax purposes, made to the taxpayer because of
2539	2539
2540	2540
2541	2541
2542	2542
2543	2543
2544	2544	HB3580 - 70 - LRB103 05339 SPS 50358 b
2545	2545
2546	2546
2547	2547	HB3580- 71 -LRB103 05339 SPS 50358 b HB3580 - 71 - LRB103 05339 SPS 50358 b
2548	2548	HB3580 - 71 - LRB103 05339 SPS 50358 b
2549	2549	1 his or her status as a victim of persecution for racial
2550	2550	2 or religious reasons by Nazi Germany or any other Axis
2551	2551	3 regime or as an heir of the victim and (ii) items of
2552	2552	4 income, to the extent includible in gross income for
2553	2553	5 federal income tax purposes, attributable to, derived
2554	2554	6 from or in any way related to assets stolen from,
2555	2555	7 hidden from, or otherwise lost to a victim of
2556	2556	8 persecution for racial or religious reasons by Nazi
2557	2557	9 Germany or any other Axis regime immediately prior to,
2558	2558	10 during, and immediately after World War II, including,
2559	2559	11 but not limited to, interest on the proceeds
2560	2560	12 receivable as insurance under policies issued to a
2561	2561	13 victim of persecution for racial or religious reasons
2562	2562	14 by Nazi Germany or any other Axis regime by European
2563	2563	15 insurance companies immediately prior to and during
2564	2564	16 World War II; provided, however, this subtraction from
2565	2565	17 federal adjusted gross income does not apply to assets
2566	2566	18 acquired with such assets or with the proceeds from
2567	2567	19 the sale of such assets; provided, further, this
2568	2568	20 paragraph shall only apply to a taxpayer who was the
2569	2569	21 first recipient of such assets after their recovery
2570	2570	22 and who is a victim of persecution for racial or
2571	2571	23 religious reasons by Nazi Germany or any other Axis
2572	2572	24 regime or as an heir of the victim. The amount of and
2573	2573	25 the eligibility for any public assistance, benefit, or
2574	2574	26 similar entitlement is not affected by the inclusion
2575	2575
2576	2576
2577	2577
2578	2578
2579	2579
2580	2580	HB3580 - 71 - LRB103 05339 SPS 50358 b
2581	2581
2582	2582
2583	2583	HB3580- 72 -LRB103 05339 SPS 50358 b HB3580 - 72 - LRB103 05339 SPS 50358 b
2584	2584	HB3580 - 72 - LRB103 05339 SPS 50358 b
2585	2585	1 of items (i) and (ii) of this paragraph in gross income
2586	2586	2 for federal income tax purposes. This paragraph is
2587	2587	3 exempt from the provisions of Section 250;
2588	2588	4 (R) For taxable years 2001 and thereafter, for the
2589	2589	5 taxable year in which the bonus depreciation deduction
2590	2590	6 is taken on the taxpayer's federal income tax return
2591	2591	7 under subsection (k) of Section 168 of the Internal
2592	2592	8 Revenue Code and for each applicable taxable year
2593	2593	9 thereafter, an amount equal to "x", where:
2594	2594	10 (1) "y" equals the amount of the depreciation
2595	2595	11 deduction taken for the taxable year on the
2596	2596	12 taxpayer's federal income tax return on property
2597	2597	13 for which the bonus depreciation deduction was
2598	2598	14 taken in any year under subsection (k) of Section
2599	2599	15 168 of the Internal Revenue Code, but not
2600	2600	16 including the bonus depreciation deduction;
2601	2601	17 (2) for taxable years ending on or before
2602	2602	18 December 31, 2005, "x" equals "y" multiplied by 30
2603	2603	19 and then divided by 70 (or "y" multiplied by
2604	2604	20 0.429); and
2605	2605	21 (3) for taxable years ending after December
2606	2606	22 31, 2005:
2607	2607	23 (i) for property on which a bonus
2608	2608	24 depreciation deduction of 30% of the adjusted
2609	2609	25 basis was taken, "x" equals "y" multiplied by
2610	2610	26 30 and then divided by 70 (or "y" multiplied
2611	2611
2612	2612
2613	2613
2614	2614
2615	2615
2616	2616	HB3580 - 72 - LRB103 05339 SPS 50358 b
2617	2617
2618	2618
2619	2619	HB3580- 73 -LRB103 05339 SPS 50358 b HB3580 - 73 - LRB103 05339 SPS 50358 b
2620	2620	HB3580 - 73 - LRB103 05339 SPS 50358 b
2621	2621	1 by 0.429);
2622	2622	2 (ii) for property on which a bonus
2623	2623	3 depreciation deduction of 50% of the adjusted
2624	2624	4 basis was taken, "x" equals "y" multiplied by
2625	2625	5 1.0;
2626	2626	6 (iii) for property on which a bonus
2627	2627	7 depreciation deduction of 100% of the adjusted
2628	2628	8 basis was taken in a taxable year ending on or
2629	2629	9 after December 31, 2021, "x" equals the
2630	2630	10 depreciation deduction that would be allowed
2631	2631	11 on that property if the taxpayer had made the
2632	2632	12 election under Section 168(k)(7) of the
2633	2633	13 Internal Revenue Code to not claim bonus
2634	2634	14 depreciation on that property; and
2635	2635	15 (iv) for property on which a bonus
2636	2636	16 depreciation deduction of a percentage other
2637	2637	17 than 30%, 50% or 100% of the adjusted basis
2638	2638	18 was taken in a taxable year ending on or after
2639	2639	19 December 31, 2021, "x" equals "y" multiplied
2640	2640	20 by 100 times the percentage bonus depreciation
2641	2641	21 on the property (that is, 100(bonus%)) and
2642	2642	22 then divided by 100 times 1 minus the
2643	2643	23 percentage bonus depreciation on the property
2644	2644	24 (that is, 100(1bonus%)).
2645	2645	25 The aggregate amount deducted under this
2646	2646	26 subparagraph in all taxable years for any one piece of
2647	2647
2648	2648
2649	2649
2650	2650
2651	2651
2652	2652	HB3580 - 73 - LRB103 05339 SPS 50358 b
2653	2653
2654	2654
2655	2655	HB3580- 74 -LRB103 05339 SPS 50358 b HB3580 - 74 - LRB103 05339 SPS 50358 b
2656	2656	HB3580 - 74 - LRB103 05339 SPS 50358 b
2657	2657	1 property may not exceed the amount of the bonus
2658	2658	2 depreciation deduction taken on that property on the
2659	2659	3 taxpayer's federal income tax return under subsection
2660	2660	4 (k) of Section 168 of the Internal Revenue Code. This
2661	2661	5 subparagraph (R) is exempt from the provisions of
2662	2662	6 Section 250;
2663	2663	7 (S) If the taxpayer sells, transfers, abandons, or
2664	2664	8 otherwise disposes of property for which the taxpayer
2665	2665	9 was required in any taxable year to make an addition
2666	2666	10 modification under subparagraph (G-10), then an amount
2667	2667	11 equal to that addition modification.
2668	2668	12 If the taxpayer continues to own property through
2669	2669	13 the last day of the last tax year for which a taxpayer
2670	2670	14 may claim a depreciation deduction for federal income
2671	2671	15 tax purposes a subtraction is allowed with respect to
2672	2672	16 that property under subparagraph (R) and for which the
2673	2673	17 taxpayer was required in any taxable year to make an
2674	2674	18 addition modification under subparagraph (G-10), then
2675	2675	19 an amount equal to that addition modification.
2676	2676	20 The taxpayer is allowed to take the deduction
2677	2677	21 under this subparagraph only once with respect to any
2678	2678	22 one piece of property.
2679	2679	23 This subparagraph (S) is exempt from the
2680	2680	24 provisions of Section 250;
2681	2681	25 (T) The amount of (i) any interest income (net of
2682	2682	26 the deductions allocable thereto) taken into account
2683	2683
2684	2684
2685	2685
2686	2686
2687	2687
2688	2688	HB3580 - 74 - LRB103 05339 SPS 50358 b
2689	2689
2690	2690
2691	2691	HB3580- 75 -LRB103 05339 SPS 50358 b HB3580 - 75 - LRB103 05339 SPS 50358 b
2692	2692	HB3580 - 75 - LRB103 05339 SPS 50358 b
2693	2693	1 for the taxable year with respect to a transaction
2694	2694	2 with a taxpayer that is required to make an addition
2695	2695	3 modification with respect to such transaction under
2696	2696	4 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
2697	2697	5 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
2698	2698	6 the amount of such addition modification and (ii) any
2699	2699	7 income from intangible property (net of the deductions
2700	2700	8 allocable thereto) taken into account for the taxable
2701	2701	9 year with respect to a transaction with a taxpayer
2702	2702	10 that is required to make an addition modification with
2703	2703	11 respect to such transaction under Section
2704	2704	12 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
2705	2705	13 203(d)(2)(D-8), but not to exceed the amount of such
2706	2706	14 addition modification. This subparagraph (T) is exempt
2707	2707	15 from the provisions of Section 250;
2708	2708	16 (U) An amount equal to the interest income taken
2709	2709	17 into account for the taxable year (net of the
2710	2710	18 deductions allocable thereto) with respect to
2711	2711	19 transactions with (i) a foreign person who would be a
2712	2712	20 member of the taxpayer's unitary business group but
2713	2713	21 for the fact the foreign person's business activity
2714	2714	22 outside the United States is 80% or more of that
2715	2715	23 person's total business activity and (ii) for taxable
2716	2716	24 years ending on or after December 31, 2008, to a person
2717	2717	25 who would be a member of the same unitary business
2718	2718	26 group but for the fact that the person is prohibited
2719	2719
2720	2720
2721	2721
2722	2722
2723	2723
2724	2724	HB3580 - 75 - LRB103 05339 SPS 50358 b
2725	2725
2726	2726
2727	2727	HB3580- 76 -LRB103 05339 SPS 50358 b HB3580 - 76 - LRB103 05339 SPS 50358 b
2728	2728	HB3580 - 76 - LRB103 05339 SPS 50358 b
2729	2729	1 under Section 1501(a)(27) from being included in the
2730	2730	2 unitary business group because he or she is ordinarily
2731	2731	3 required to apportion business income under different
2732	2732	4 subsections of Section 304, but not to exceed the
2733	2733	5 addition modification required to be made for the same
2734	2734	6 taxable year under Section 203(c)(2)(G-12) for
2735	2735	7 interest paid, accrued, or incurred, directly or
2736	2736	8 indirectly, to the same person. This subparagraph (U)
2737	2737	9 is exempt from the provisions of Section 250;
2738	2738	10 (V) An amount equal to the income from intangible
2739	2739	11 property taken into account for the taxable year (net
2740	2740	12 of the deductions allocable thereto) with respect to
2741	2741	13 transactions with (i) a foreign person who would be a
2742	2742	14 member of the taxpayer's unitary business group but
2743	2743	15 for the fact that the foreign person's business
2744	2744	16 activity outside the United States is 80% or more of
2745	2745	17 that person's total business activity and (ii) for
2746	2746	18 taxable years ending on or after December 31, 2008, to
2747	2747	19 a person who would be a member of the same unitary
2748	2748	20 business group but for the fact that the person is
2749	2749	21 prohibited under Section 1501(a)(27) from being
2750	2750	22 included in the unitary business group because he or
2751	2751	23 she is ordinarily required to apportion business
2752	2752	24 income under different subsections of Section 304, but
2753	2753	25 not to exceed the addition modification required to be
2754	2754	26 made for the same taxable year under Section
2755	2755
2756	2756
2757	2757
2758	2758
2759	2759
2760	2760	HB3580 - 76 - LRB103 05339 SPS 50358 b
2761	2761
2762	2762
2763	2763	HB3580- 77 -LRB103 05339 SPS 50358 b HB3580 - 77 - LRB103 05339 SPS 50358 b
2764	2764	HB3580 - 77 - LRB103 05339 SPS 50358 b
2765	2765	1 203(c)(2)(G-13) for intangible expenses and costs
2766	2766	2 paid, accrued, or incurred, directly or indirectly, to
2767	2767	3 the same foreign person. This subparagraph (V) is
2768	2768	4 exempt from the provisions of Section 250;
2769	2769	5 (W) in the case of an estate, an amount equal to
2770	2770	6 all amounts included in such total pursuant to the
2771	2771	7 provisions of Section 111 of the Internal Revenue Code
2772	2772	8 as a recovery of items previously deducted by the
2773	2773	9 decedent from adjusted gross income in the computation
2774	2774	10 of taxable income. This subparagraph (W) is exempt
2775	2775	11 from Section 250;
2776	2776	12 (X) an amount equal to the refund included in such
2777	2777	13 total of any tax deducted for federal income tax
2778	2778	14 purposes, to the extent that deduction was added back
2779	2779	15 under subparagraph (F). This subparagraph (X) is
2780	2780	16 exempt from the provisions of Section 250;
2781	2781	17 (Y) For taxable years ending on or after December
2782	2782	18 31, 2011, in the case of a taxpayer who was required to
2783	2783	19 add back any insurance premiums under Section
2784	2784	20 203(c)(2)(G-14), such taxpayer may elect to subtract
2785	2785	21 that part of a reimbursement received from the
2786	2786	22 insurance company equal to the amount of the expense
2787	2787	23 or loss (including expenses incurred by the insurance
2788	2788	24 company) that would have been taken into account as a
2789	2789	25 deduction for federal income tax purposes if the
2790	2790	26 expense or loss had been uninsured. If a taxpayer
2791	2791
2792	2792
2793	2793
2794	2794
2795	2795
2796	2796	HB3580 - 77 - LRB103 05339 SPS 50358 b
2797	2797
2798	2798
2799	2799	HB3580- 78 -LRB103 05339 SPS 50358 b HB3580 - 78 - LRB103 05339 SPS 50358 b
2800	2800	HB3580 - 78 - LRB103 05339 SPS 50358 b
2801	2801	1 makes the election provided for by this subparagraph
2802	2802	2 (Y), the insurer to which the premiums were paid must
2803	2803	3 add back to income the amount subtracted by the
2804	2804	4 taxpayer pursuant to this subparagraph (Y). This
2805	2805	5 subparagraph (Y) is exempt from the provisions of
2806	2806	6 Section 250; and
2807	2807	7 (Z) For taxable years beginning after December 31,
2808	2808	8 2018 and before January 1, 2026, the amount of excess
2809	2809	9 business loss of the taxpayer disallowed as a
2810	2810	10 deduction by Section 461(l)(1)(B) of the Internal
2811	2811	11 Revenue Code.
2812	2812	12 (3) Limitation. The amount of any modification
2813	2813	13 otherwise required under this subsection shall, under
2814	2814	14 regulations prescribed by the Department, be adjusted by
2815	2815	15 any amounts included therein which were properly paid,
2816	2816	16 credited, or required to be distributed, or permanently
2817	2817	17 set aside for charitable purposes pursuant to Internal
2818	2818	18 Revenue Code Section 642(c) during the taxable year.
2819	2819	19 (d) Partnerships.
2820	2820	20 (1) In general. In the case of a partnership, base
2821	2821	21 income means an amount equal to the taxpayer's taxable
2822	2822	22 income for the taxable year as modified by paragraph (2).
2823	2823	23 (2) Modifications. The taxable income referred to in
2824	2824	24 paragraph (1) shall be modified by adding thereto the sum
2825	2825	25 of the following amounts:
2826	2826
2827	2827
2828	2828
2829	2829
2830	2830
2831	2831	HB3580 - 78 - LRB103 05339 SPS 50358 b
2832	2832
2833	2833
2834	2834	HB3580- 79 -LRB103 05339 SPS 50358 b HB3580 - 79 - LRB103 05339 SPS 50358 b
2835	2835	HB3580 - 79 - LRB103 05339 SPS 50358 b
2836	2836	1 (A) An amount equal to all amounts paid or accrued
2837	2837	2 to the taxpayer as interest or dividends during the
2838	2838	3 taxable year to the extent excluded from gross income
2839	2839	4 in the computation of taxable income;
2840	2840	5 (B) An amount equal to the amount of tax imposed by
2841	2841	6 this Act to the extent deducted from gross income for
2842	2842	7 the taxable year;
2843	2843	8 (C) The amount of deductions allowed to the
2844	2844	9 partnership pursuant to Section 707 (c) of the
2845	2845	10 Internal Revenue Code in calculating its taxable
2846	2846	11 income;
2847	2847	12 (D) An amount equal to the amount of the capital
2848	2848	13 gain deduction allowable under the Internal Revenue
2849	2849	14 Code, to the extent deducted from gross income in the
2850	2850	15 computation of taxable income;
2851	2851	16 (D-5) For taxable years 2001 and thereafter, an
2852	2852	17 amount equal to the bonus depreciation deduction taken
2853	2853	18 on the taxpayer's federal income tax return for the
2854	2854	19 taxable year under subsection (k) of Section 168 of
2855	2855	20 the Internal Revenue Code;
2856	2856	21 (D-6) If the taxpayer sells, transfers, abandons,
2857	2857	22 or otherwise disposes of property for which the
2858	2858	23 taxpayer was required in any taxable year to make an
2859	2859	24 addition modification under subparagraph (D-5), then
2860	2860	25 an amount equal to the aggregate amount of the
2861	2861	26 deductions taken in all taxable years under
2862	2862
2863	2863
2864	2864
2865	2865
2866	2866
2867	2867	HB3580 - 79 - LRB103 05339 SPS 50358 b
2868	2868
2869	2869
2870	2870	HB3580- 80 -LRB103 05339 SPS 50358 b HB3580 - 80 - LRB103 05339 SPS 50358 b
2871	2871	HB3580 - 80 - LRB103 05339 SPS 50358 b
2872	2872	1 subparagraph (O) with respect to that property.
2873	2873	2 If the taxpayer continues to own property through
2874	2874	3 the last day of the last tax year for which a taxpayer
2875	2875	4 may claim a depreciation deduction for federal income
2876	2876	5 tax purposes a subtraction is allowed with respect to
2877	2877	6 that property under subparagraph (O) and for which the
2878	2878	7 taxpayer was allowed in any taxable year to make a
2879	2879	8 subtraction modification under subparagraph (O), then
2880	2880	9 an amount equal to that subtraction modification.
2881	2881	10 The taxpayer is required to make the addition
2882	2882	11 modification under this subparagraph only once with
2883	2883	12 respect to any one piece of property;
2884	2884	13 (D-7) An amount equal to the amount otherwise
2885	2885	14 allowed as a deduction in computing base income for
2886	2886	15 interest paid, accrued, or incurred, directly or
2887	2887	16 indirectly, (i) for taxable years ending on or after
2888	2888	17 December 31, 2004, to a foreign person who would be a
2889	2889	18 member of the same unitary business group but for the
2890	2890	19 fact the foreign person's business activity outside
2891	2891	20 the United States is 80% or more of the foreign
2892	2892	21 person's total business activity and (ii) for taxable
2893	2893	22 years ending on or after December 31, 2008, to a person
2894	2894	23 who would be a member of the same unitary business
2895	2895	24 group but for the fact that the person is prohibited
2896	2896	25 under Section 1501(a)(27) from being included in the
2897	2897	26 unitary business group because he or she is ordinarily
2898	2898
2899	2899
2900	2900
2901	2901
2902	2902
2903	2903	HB3580 - 80 - LRB103 05339 SPS 50358 b
2904	2904
2905	2905
2906	2906	HB3580- 81 -LRB103 05339 SPS 50358 b HB3580 - 81 - LRB103 05339 SPS 50358 b
2907	2907	HB3580 - 81 - LRB103 05339 SPS 50358 b
2908	2908	1 required to apportion business income under different
2909	2909	2 subsections of Section 304. The addition modification
2910	2910	3 required by this subparagraph shall be reduced to the
2911	2911	4 extent that dividends were included in base income of
2912	2912	5 the unitary group for the same taxable year and
2913	2913	6 received by the taxpayer or by a member of the
2914	2914	7 taxpayer's unitary business group (including amounts
2915	2915	8 included in gross income pursuant to Sections 951
2916	2916	9 through 964 of the Internal Revenue Code and amounts
2917	2917	10 included in gross income under Section 78 of the
2918	2918	11 Internal Revenue Code) with respect to the stock of
2919	2919	12 the same person to whom the interest was paid,
2920	2920	13 accrued, or incurred.
2921	2921	14 This paragraph shall not apply to the following:
2922	2922	15 (i) an item of interest paid, accrued, or
2923	2923	16 incurred, directly or indirectly, to a person who
2924	2924	17 is subject in a foreign country or state, other
2925	2925	18 than a state which requires mandatory unitary
2926	2926	19 reporting, to a tax on or measured by net income
2927	2927	20 with respect to such interest; or
2928	2928	21 (ii) an item of interest paid, accrued, or
2929	2929	22 incurred, directly or indirectly, to a person if
2930	2930	23 the taxpayer can establish, based on a
2931	2931	24 preponderance of the evidence, both of the
2932	2932	25 following:
2933	2933	26 (a) the person, during the same taxable
2934	2934
2935	2935
2936	2936
2937	2937
2938	2938
2939	2939	HB3580 - 81 - LRB103 05339 SPS 50358 b
2940	2940
2941	2941
2942	2942	HB3580- 82 -LRB103 05339 SPS 50358 b HB3580 - 82 - LRB103 05339 SPS 50358 b
2943	2943	HB3580 - 82 - LRB103 05339 SPS 50358 b
2944	2944	1 year, paid, accrued, or incurred, the interest
2945	2945	2 to a person that is not a related member, and
2946	2946	3 (b) the transaction giving rise to the
2947	2947	4 interest expense between the taxpayer and the
2948	2948	5 person did not have as a principal purpose the
2949	2949	6 avoidance of Illinois income tax, and is paid
2950	2950	7 pursuant to a contract or agreement that
2951	2951	8 reflects an arm's-length interest rate and
2952	2952	9 terms; or
2953	2953	10 (iii) the taxpayer can establish, based on
2954	2954	11 clear and convincing evidence, that the interest
2955	2955	12 paid, accrued, or incurred relates to a contract
2956	2956	13 or agreement entered into at arm's-length rates
2957	2957	14 and terms and the principal purpose for the
2958	2958	15 payment is not federal or Illinois tax avoidance;
2959	2959	16 or
2960	2960	17 (iv) an item of interest paid, accrued, or
2961	2961	18 incurred, directly or indirectly, to a person if
2962	2962	19 the taxpayer establishes by clear and convincing
2963	2963	20 evidence that the adjustments are unreasonable; or
2964	2964	21 if the taxpayer and the Director agree in writing
2965	2965	22 to the application or use of an alternative method
2966	2966	23 of apportionment under Section 304(f).
2967	2967	24 Nothing in this subsection shall preclude the
2968	2968	25 Director from making any other adjustment
2969	2969	26 otherwise allowed under Section 404 of this Act
2970	2970
2971	2971
2972	2972
2973	2973
2974	2974
2975	2975	HB3580 - 82 - LRB103 05339 SPS 50358 b
2976	2976
2977	2977
2978	2978	HB3580- 83 -LRB103 05339 SPS 50358 b HB3580 - 83 - LRB103 05339 SPS 50358 b
2979	2979	HB3580 - 83 - LRB103 05339 SPS 50358 b
2980	2980	1 for any tax year beginning after the effective
2981	2981	2 date of this amendment provided such adjustment is
2982	2982	3 made pursuant to regulation adopted by the
2983	2983	4 Department and such regulations provide methods
2984	2984	5 and standards by which the Department will utilize
2985	2985	6 its authority under Section 404 of this Act; and
2986	2986	7 (D-8) An amount equal to the amount of intangible
2987	2987	8 expenses and costs otherwise allowed as a deduction in
2988	2988	9 computing base income, and that were paid, accrued, or
2989	2989	10 incurred, directly or indirectly, (i) for taxable
2990	2990	11 years ending on or after December 31, 2004, to a
2991	2991	12 foreign person who would be a member of the same
2992	2992	13 unitary business group but for the fact that the
2993	2993	14 foreign person's business activity outside the United
2994	2994	15 States is 80% or more of that person's total business
2995	2995	16 activity and (ii) for taxable years ending on or after
2996	2996	17 December 31, 2008, to a person who would be a member of
2997	2997	18 the same unitary business group but for the fact that
2998	2998	19 the person is prohibited under Section 1501(a)(27)
2999	2999	20 from being included in the unitary business group
3000	3000	21 because he or she is ordinarily required to apportion
3001	3001	22 business income under different subsections of Section
3002	3002	23 304. The addition modification required by this
3003	3003	24 subparagraph shall be reduced to the extent that
3004	3004	25 dividends were included in base income of the unitary
3005	3005	26 group for the same taxable year and received by the
3006	3006
3007	3007
3008	3008
3009	3009
3010	3010
3011	3011	HB3580 - 83 - LRB103 05339 SPS 50358 b
3012	3012
3013	3013
3014	3014	HB3580- 84 -LRB103 05339 SPS 50358 b HB3580 - 84 - LRB103 05339 SPS 50358 b
3015	3015	HB3580 - 84 - LRB103 05339 SPS 50358 b
3016	3016	1 taxpayer or by a member of the taxpayer's unitary
3017	3017	2 business group (including amounts included in gross
3018	3018	3 income pursuant to Sections 951 through 964 of the
3019	3019	4 Internal Revenue Code and amounts included in gross
3020	3020	5 income under Section 78 of the Internal Revenue Code)
3021	3021	6 with respect to the stock of the same person to whom
3022	3022	7 the intangible expenses and costs were directly or
3023	3023	8 indirectly paid, incurred or accrued. The preceding
3024	3024	9 sentence shall not apply to the extent that the same
3025	3025	10 dividends caused a reduction to the addition
3026	3026	11 modification required under Section 203(d)(2)(D-7) of
3027	3027	12 this Act. As used in this subparagraph, the term
3028	3028	13 "intangible expenses and costs" includes (1) expenses,
3029	3029	14 losses, and costs for, or related to, the direct or
3030	3030	15 indirect acquisition, use, maintenance or management,
3031	3031	16 ownership, sale, exchange, or any other disposition of
3032	3032	17 intangible property; (2) losses incurred, directly or
3033	3033	18 indirectly, from factoring transactions or discounting
3034	3034	19 transactions; (3) royalty, patent, technical, and
3035	3035	20 copyright fees; (4) licensing fees; and (5) other
3036	3036	21 similar expenses and costs. For purposes of this
3037	3037	22 subparagraph, "intangible property" includes patents,
3038	3038	23 patent applications, trade names, trademarks, service
3039	3039	24 marks, copyrights, mask works, trade secrets, and
3040	3040	25 similar types of intangible assets;
3041	3041	26 This paragraph shall not apply to the following:
3042	3042
3043	3043
3044	3044
3045	3045
3046	3046
3047	3047	HB3580 - 84 - LRB103 05339 SPS 50358 b
3048	3048
3049	3049
3050	3050	HB3580- 85 -LRB103 05339 SPS 50358 b HB3580 - 85 - LRB103 05339 SPS 50358 b
3051	3051	HB3580 - 85 - LRB103 05339 SPS 50358 b
3052	3052	1 (i) any item of intangible expenses or costs
3053	3053	2 paid, accrued, or incurred, directly or
3054	3054	3 indirectly, from a transaction with a person who
3055	3055	4 is subject in a foreign country or state, other
3056	3056	5 than a state which requires mandatory unitary
3057	3057	6 reporting, to a tax on or measured by net income
3058	3058	7 with respect to such item; or
3059	3059	8 (ii) any item of intangible expense or cost
3060	3060	9 paid, accrued, or incurred, directly or
3061	3061	10 indirectly, if the taxpayer can establish, based
3062	3062	11 on a preponderance of the evidence, both of the
3063	3063	12 following:
3064	3064	13 (a) the person during the same taxable
3065	3065	14 year paid, accrued, or incurred, the
3066	3066	15 intangible expense or cost to a person that is
3067	3067	16 not a related member, and
3068	3068	17 (b) the transaction giving rise to the
3069	3069	18 intangible expense or cost between the
3070	3070	19 taxpayer and the person did not have as a
3071	3071	20 principal purpose the avoidance of Illinois
3072	3072	21 income tax, and is paid pursuant to a contract
3073	3073	22 or agreement that reflects arm's-length terms;
3074	3074	23 or
3075	3075	24 (iii) any item of intangible expense or cost
3076	3076	25 paid, accrued, or incurred, directly or
3077	3077	26 indirectly, from a transaction with a person if
3078	3078
3079	3079
3080	3080
3081	3081
3082	3082
3083	3083	HB3580 - 85 - LRB103 05339 SPS 50358 b
3084	3084
3085	3085
3086	3086	HB3580- 86 -LRB103 05339 SPS 50358 b HB3580 - 86 - LRB103 05339 SPS 50358 b
3087	3087	HB3580 - 86 - LRB103 05339 SPS 50358 b
3088	3088	1 the taxpayer establishes by clear and convincing
3089	3089	2 evidence, that the adjustments are unreasonable;
3090	3090	3 or if the taxpayer and the Director agree in
3091	3091	4 writing to the application or use of an
3092	3092	5 alternative method of apportionment under Section
3093	3093	6 304(f);
3094	3094	7 Nothing in this subsection shall preclude the
3095	3095	8 Director from making any other adjustment
3096	3096	9 otherwise allowed under Section 404 of this Act
3097	3097	10 for any tax year beginning after the effective
3098	3098	11 date of this amendment provided such adjustment is
3099	3099	12 made pursuant to regulation adopted by the
3100	3100	13 Department and such regulations provide methods
3101	3101	14 and standards by which the Department will utilize
3102	3102	15 its authority under Section 404 of this Act;
3103	3103	16 (D-9) For taxable years ending on or after
3104	3104	17 December 31, 2008, an amount equal to the amount of
3105	3105	18 insurance premium expenses and costs otherwise allowed
3106	3106	19 as a deduction in computing base income, and that were
3107	3107	20 paid, accrued, or incurred, directly or indirectly, to
3108	3108	21 a person who would be a member of the same unitary
3109	3109	22 business group but for the fact that the person is
3110	3110	23 prohibited under Section 1501(a)(27) from being
3111	3111	24 included in the unitary business group because he or
3112	3112	25 she is ordinarily required to apportion business
3113	3113	26 income under different subsections of Section 304. The
3114	3114
3115	3115
3116	3116
3117	3117
3118	3118
3119	3119	HB3580 - 86 - LRB103 05339 SPS 50358 b
3120	3120
3121	3121
3122	3122	HB3580- 87 -LRB103 05339 SPS 50358 b HB3580 - 87 - LRB103 05339 SPS 50358 b
3123	3123	HB3580 - 87 - LRB103 05339 SPS 50358 b
3124	3124	1 addition modification required by this subparagraph
3125	3125	2 shall be reduced to the extent that dividends were
3126	3126	3 included in base income of the unitary group for the
3127	3127	4 same taxable year and received by the taxpayer or by a
3128	3128	5 member of the taxpayer's unitary business group
3129	3129	6 (including amounts included in gross income under
3130	3130	7 Sections 951 through 964 of the Internal Revenue Code
3131	3131	8 and amounts included in gross income under Section 78
3132	3132	9 of the Internal Revenue Code) with respect to the
3133	3133	10 stock of the same person to whom the premiums and costs
3134	3134	11 were directly or indirectly paid, incurred, or
3135	3135	12 accrued. The preceding sentence does not apply to the
3136	3136	13 extent that the same dividends caused a reduction to
3137	3137	14 the addition modification required under Section
3138	3138	15 203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act;
3139	3139	16 (D-10) An amount equal to the credit allowable to
3140	3140	17 the taxpayer under Section 218(a) of this Act,
3141	3141	18 determined without regard to Section 218(c) of this
3142	3142	19 Act;
3143	3143	20 (D-11) For taxable years ending on or after
3144	3144	21 December 31, 2017, an amount equal to the deduction
3145	3145	22 allowed under Section 199 of the Internal Revenue Code
3146	3146	23 for the taxable year;
3147	3147	24 and by deducting from the total so obtained the following
3148	3148	25 amounts:
3149	3149	26 (E) The valuation limitation amount;
3150	3150
3151	3151
3152	3152
3153	3153
3154	3154
3155	3155	HB3580 - 87 - LRB103 05339 SPS 50358 b
3156	3156
3157	3157
3158	3158	HB3580- 88 -LRB103 05339 SPS 50358 b HB3580 - 88 - LRB103 05339 SPS 50358 b
3159	3159	HB3580 - 88 - LRB103 05339 SPS 50358 b
3160	3160	1 (F) An amount equal to the amount of any tax
3161	3161	2 imposed by this Act which was refunded to the taxpayer
3162	3162	3 and included in such total for the taxable year;
3163	3163	4 (G) An amount equal to all amounts included in
3164	3164	5 taxable income as modified by subparagraphs (A), (B),
3165	3165	6 (C) and (D) which are exempt from taxation by this
3166	3166	7 State either by reason of its statutes or Constitution
3167	3167	8 or by reason of the Constitution, treaties or statutes
3168	3168	9 of the United States; provided that, in the case of any
3169	3169	10 statute of this State that exempts income derived from
3170	3170	11 bonds or other obligations from the tax imposed under
3171	3171	12 this Act, the amount exempted shall be the interest
3172	3172	13 net of bond premium amortization;
3173	3173	14 (H) Any income of the partnership which
3174	3174	15 constitutes personal service income as defined in
3175	3175	16 Section 1348(b)(1) of the Internal Revenue Code (as in
3176	3176	17 effect December 31, 1981) or a reasonable allowance
3177	3177	18 for compensation paid or accrued for services rendered
3178	3178	19 by partners to the partnership, whichever is greater;
3179	3179	20 this subparagraph (H) is exempt from the provisions of
3180	3180	21 Section 250;
3181	3181	22 (I) An amount equal to all amounts of income
3182	3182	23 distributable to an entity subject to the Personal
3183	3183	24 Property Tax Replacement Income Tax imposed by
3184	3184	25 subsections (c) and (d) of Section 201 of this Act
3185	3185	26 including amounts distributable to organizations
3186	3186
3187	3187
3188	3188
3189	3189
3190	3190
3191	3191	HB3580 - 88 - LRB103 05339 SPS 50358 b
3192	3192
3193	3193
3194	3194	HB3580- 89 -LRB103 05339 SPS 50358 b HB3580 - 89 - LRB103 05339 SPS 50358 b
3195	3195	HB3580 - 89 - LRB103 05339 SPS 50358 b
3196	3196	1 exempt from federal income tax by reason of Section
3197	3197	2 501(a) of the Internal Revenue Code; this subparagraph
3198	3198	3 (I) is exempt from the provisions of Section 250;
3199	3199	4 (J) With the exception of any amounts subtracted
3200	3200	5 under subparagraph (G), an amount equal to the sum of
3201	3201	6 all amounts disallowed as deductions by (i) Sections
3202	3202	7 171(a)(2) and 265(a)(2) of the Internal Revenue Code,
3203	3203	8 and all amounts of expenses allocable to interest and
3204	3204	9 disallowed as deductions by Section 265(a)(1) of the
3205	3205	10 Internal Revenue Code; and (ii) for taxable years
3206	3206	11 ending on or after August 13, 1999, Sections
3207	3207	12 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
3208	3208	13 Internal Revenue Code, plus, (iii) for taxable years
3209	3209	14 ending on or after December 31, 2011, Section
3210	3210	15 45G(e)(3) of the Internal Revenue Code and, for
3211	3211	16 taxable years ending on or after December 31, 2008,
3212	3212	17 any amount included in gross income under Section 87
3213	3213	18 of the Internal Revenue Code; the provisions of this
3214	3214	19 subparagraph are exempt from the provisions of Section
3215	3215	20 250;
3216	3216	21 (K) An amount equal to those dividends included in
3217	3217	22 such total which were paid by a corporation which
3218	3218	23 conducts business operations in a River Edge
3219	3219	24 Redevelopment Zone or zones created under the River
3220	3220	25 Edge Redevelopment Zone Act and conducts substantially
3221	3221	26 all of its operations from a River Edge Redevelopment
3222	3222
3223	3223
3224	3224
3225	3225
3226	3226
3227	3227	HB3580 - 89 - LRB103 05339 SPS 50358 b
3228	3228
3229	3229
3230	3230	HB3580- 90 -LRB103 05339 SPS 50358 b HB3580 - 90 - LRB103 05339 SPS 50358 b
3231	3231	HB3580 - 90 - LRB103 05339 SPS 50358 b
3232	3232	1 Zone or zones. This subparagraph (K) is exempt from
3233	3233	2 the provisions of Section 250;
3234	3234	3 (L) An amount equal to any contribution made to a
3235	3235	4 job training project established pursuant to the Real
3236	3236	5 Property Tax Increment Allocation Redevelopment Act;
3237	3237	6 (M) An amount equal to those dividends included in
3238	3238	7 such total that were paid by a corporation that
3239	3239	8 conducts business operations in a federally designated
3240	3240	9 Foreign Trade Zone or Sub-Zone and that is designated
3241	3241	10 a High Impact Business located in Illinois; provided
3242	3242	11 that dividends eligible for the deduction provided in
3243	3243	12 subparagraph (K) of paragraph (2) of this subsection
3244	3244	13 shall not be eligible for the deduction provided under
3245	3245	14 this subparagraph (M);
3246	3246	15 (N) An amount equal to the amount of the deduction
3247	3247	16 used to compute the federal income tax credit for
3248	3248	17 restoration of substantial amounts held under claim of
3249	3249	18 right for the taxable year pursuant to Section 1341 of
3250	3250	19 the Internal Revenue Code;
3251	3251	20 (O) For taxable years 2001 and thereafter, for the
3252	3252	21 taxable year in which the bonus depreciation deduction
3253	3253	22 is taken on the taxpayer's federal income tax return
3254	3254	23 under subsection (k) of Section 168 of the Internal
3255	3255	24 Revenue Code and for each applicable taxable year
3256	3256	25 thereafter, an amount equal to "x", where:
3257	3257	26 (1) "y" equals the amount of the depreciation
3258	3258
3259	3259
3260	3260
3261	3261
3262	3262
3263	3263	HB3580 - 90 - LRB103 05339 SPS 50358 b
3264	3264
3265	3265
3266	3266	HB3580- 91 -LRB103 05339 SPS 50358 b HB3580 - 91 - LRB103 05339 SPS 50358 b
3267	3267	HB3580 - 91 - LRB103 05339 SPS 50358 b
3268	3268	1 deduction taken for the taxable year on the
3269	3269	2 taxpayer's federal income tax return on property
3270	3270	3 for which the bonus depreciation deduction was
3271	3271	4 taken in any year under subsection (k) of Section
3272	3272	5 168 of the Internal Revenue Code, but not
3273	3273	6 including the bonus depreciation deduction;
3274	3274	7 (2) for taxable years ending on or before
3275	3275	8 December 31, 2005, "x" equals "y" multiplied by 30
3276	3276	9 and then divided by 70 (or "y" multiplied by
3277	3277	10 0.429); and
3278	3278	11 (3) for taxable years ending after December
3279	3279	12 31, 2005:
3280	3280	13 (i) for property on which a bonus
3281	3281	14 depreciation deduction of 30% of the adjusted
3282	3282	15 basis was taken, "x" equals "y" multiplied by
3283	3283	16 30 and then divided by 70 (or "y" multiplied
3284	3284	17 by 0.429);
3285	3285	18 (ii) for property on which a bonus
3286	3286	19 depreciation deduction of 50% of the adjusted
3287	3287	20 basis was taken, "x" equals "y" multiplied by
3288	3288	21 1.0;
3289	3289	22 (iii) for property on which a bonus
3290	3290	23 depreciation deduction of 100% of the adjusted
3291	3291	24 basis was taken in a taxable year ending on or
3292	3292	25 after December 31, 2021, "x" equals the
3293	3293	26 depreciation deduction that would be allowed
3294	3294
3295	3295
3296	3296
3297	3297
3298	3298
3299	3299	HB3580 - 91 - LRB103 05339 SPS 50358 b
3300	3300
3301	3301
3302	3302	HB3580- 92 -LRB103 05339 SPS 50358 b HB3580 - 92 - LRB103 05339 SPS 50358 b
3303	3303	HB3580 - 92 - LRB103 05339 SPS 50358 b
3304	3304	1 on that property if the taxpayer had made the
3305	3305	2 election under Section 168(k)(7) of the
3306	3306	3 Internal Revenue Code to not claim bonus
3307	3307	4 depreciation on that property; and
3308	3308	5 (iv) for property on which a bonus
3309	3309	6 depreciation deduction of a percentage other
3310	3310	7 than 30%, 50% or 100% of the adjusted basis
3311	3311	8 was taken in a taxable year ending on or after
3312	3312	9 December 31, 2021, "x" equals "y" multiplied
3313	3313	10 by 100 times the percentage bonus depreciation
3314	3314	11 on the property (that is, 100(bonus%)) and
3315	3315	12 then divided by 100 times 1 minus the
3316	3316	13 percentage bonus depreciation on the property
3317	3317	14 (that is, 100(1bonus%)).
3318	3318	15 The aggregate amount deducted under this
3319	3319	16 subparagraph in all taxable years for any one piece of
3320	3320	17 property may not exceed the amount of the bonus
3321	3321	18 depreciation deduction taken on that property on the
3322	3322	19 taxpayer's federal income tax return under subsection
3323	3323	20 (k) of Section 168 of the Internal Revenue Code. This
3324	3324	21 subparagraph (O) is exempt from the provisions of
3325	3325	22 Section 250;
3326	3326	23 (P) If the taxpayer sells, transfers, abandons, or
3327	3327	24 otherwise disposes of property for which the taxpayer
3328	3328	25 was required in any taxable year to make an addition
3329	3329	26 modification under subparagraph (D-5), then an amount
3330	3330
3331	3331
3332	3332
3333	3333
3334	3334
3335	3335	HB3580 - 92 - LRB103 05339 SPS 50358 b
3336	3336
3337	3337
3338	3338	HB3580- 93 -LRB103 05339 SPS 50358 b HB3580 - 93 - LRB103 05339 SPS 50358 b
3339	3339	HB3580 - 93 - LRB103 05339 SPS 50358 b
3340	3340	1 equal to that addition modification.
3341	3341	2 If the taxpayer continues to own property through
3342	3342	3 the last day of the last tax year for which a taxpayer
3343	3343	4 may claim a depreciation deduction for federal income
3344	3344	5 tax purposes a subtraction is allowed with respect to
3345	3345	6 that property under subparagraph (O) and for which the
3346	3346	7 taxpayer was required in any taxable year to make an
3347	3347	8 addition modification under subparagraph (D-5), then
3348	3348	9 an amount equal to that addition modification.
3349	3349	10 The taxpayer is allowed to take the deduction
3350	3350	11 under this subparagraph only once with respect to any
3351	3351	12 one piece of property.
3352	3352	13 This subparagraph (P) is exempt from the
3353	3353	14 provisions of Section 250;
3354	3354	15 (Q) The amount of (i) any interest income (net of
3355	3355	16 the deductions allocable thereto) taken into account
3356	3356	17 for the taxable year with respect to a transaction
3357	3357	18 with a taxpayer that is required to make an addition
3358	3358	19 modification with respect to such transaction under
3359	3359	20 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
3360	3360	21 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
3361	3361	22 the amount of such addition modification and (ii) any
3362	3362	23 income from intangible property (net of the deductions
3363	3363	24 allocable thereto) taken into account for the taxable
3364	3364	25 year with respect to a transaction with a taxpayer
3365	3365	26 that is required to make an addition modification with
3366	3366
3367	3367
3368	3368
3369	3369
3370	3370
3371	3371	HB3580 - 93 - LRB103 05339 SPS 50358 b
3372	3372
3373	3373
3374	3374	HB3580- 94 -LRB103 05339 SPS 50358 b HB3580 - 94 - LRB103 05339 SPS 50358 b
3375	3375	HB3580 - 94 - LRB103 05339 SPS 50358 b
3376	3376	1 respect to such transaction under Section
3377	3377	2 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
3378	3378	3 203(d)(2)(D-8), but not to exceed the amount of such
3379	3379	4 addition modification. This subparagraph (Q) is exempt
3380	3380	5 from Section 250;
3381	3381	6 (R) An amount equal to the interest income taken
3382	3382	7 into account for the taxable year (net of the
3383	3383	8 deductions allocable thereto) with respect to
3384	3384	9 transactions with (i) a foreign person who would be a
3385	3385	10 member of the taxpayer's unitary business group but
3386	3386	11 for the fact that the foreign person's business
3387	3387	12 activity outside the United States is 80% or more of
3388	3388	13 that person's total business activity and (ii) for
3389	3389	14 taxable years ending on or after December 31, 2008, to
3390	3390	15 a person who would be a member of the same unitary
3391	3391	16 business group but for the fact that the person is
3392	3392	17 prohibited under Section 1501(a)(27) from being
3393	3393	18 included in the unitary business group because he or
3394	3394	19 she is ordinarily required to apportion business
3395	3395	20 income under different subsections of Section 304, but
3396	3396	21 not to exceed the addition modification required to be
3397	3397	22 made for the same taxable year under Section
3398	3398	23 203(d)(2)(D-7) for interest paid, accrued, or
3399	3399	24 incurred, directly or indirectly, to the same person.
3400	3400	25 This subparagraph (R) is exempt from Section 250;
3401	3401	26 (S) An amount equal to the income from intangible
3402	3402
3403	3403
3404	3404
3405	3405
3406	3406
3407	3407	HB3580 - 94 - LRB103 05339 SPS 50358 b
3408	3408
3409	3409
3410	3410	HB3580- 95 -LRB103 05339 SPS 50358 b HB3580 - 95 - LRB103 05339 SPS 50358 b
3411	3411	HB3580 - 95 - LRB103 05339 SPS 50358 b
3412	3412	1 property taken into account for the taxable year (net
3413	3413	2 of the deductions allocable thereto) with respect to
3414	3414	3 transactions with (i) a foreign person who would be a
3415	3415	4 member of the taxpayer's unitary business group but
3416	3416	5 for the fact that the foreign person's business
3417	3417	6 activity outside the United States is 80% or more of
3418	3418	7 that person's total business activity and (ii) for
3419	3419	8 taxable years ending on or after December 31, 2008, to
3420	3420	9 a person who would be a member of the same unitary
3421	3421	10 business group but for the fact that the person is
3422	3422	11 prohibited under Section 1501(a)(27) from being
3423	3423	12 included in the unitary business group because he or
3424	3424	13 she is ordinarily required to apportion business
3425	3425	14 income under different subsections of Section 304, but
3426	3426	15 not to exceed the addition modification required to be
3427	3427	16 made for the same taxable year under Section
3428	3428	17 203(d)(2)(D-8) for intangible expenses and costs paid,
3429	3429	18 accrued, or incurred, directly or indirectly, to the
3430	3430	19 same person. This subparagraph (S) is exempt from
3431	3431	20 Section 250; and
3432	3432	21 (T) For taxable years ending on or after December
3433	3433	22 31, 2011, in the case of a taxpayer who was required to
3434	3434	23 add back any insurance premiums under Section
3435	3435	24 203(d)(2)(D-9), such taxpayer may elect to subtract
3436	3436	25 that part of a reimbursement received from the
3437	3437	26 insurance company equal to the amount of the expense
3438	3438
3439	3439
3440	3440
3441	3441
3442	3442
3443	3443	HB3580 - 95 - LRB103 05339 SPS 50358 b
3444	3444
3445	3445
3446	3446	HB3580- 96 -LRB103 05339 SPS 50358 b HB3580 - 96 - LRB103 05339 SPS 50358 b
3447	3447	HB3580 - 96 - LRB103 05339 SPS 50358 b
3448	3448	1 or loss (including expenses incurred by the insurance
3449	3449	2 company) that would have been taken into account as a
3450	3450	3 deduction for federal income tax purposes if the
3451	3451	4 expense or loss had been uninsured. If a taxpayer
3452	3452	5 makes the election provided for by this subparagraph
3453	3453	6 (T), the insurer to which the premiums were paid must
3454	3454	7 add back to income the amount subtracted by the
3455	3455	8 taxpayer pursuant to this subparagraph (T). This
3456	3456	9 subparagraph (T) is exempt from the provisions of
3457	3457	10 Section 250.
3458	3458	11 (e) Gross income; adjusted gross income; taxable income.
3459	3459	12 (1) In general. Subject to the provisions of paragraph
3460	3460	13 (2) and subsection (b)(3), for purposes of this Section
3461	3461	14 and Section 803(e), a taxpayer's gross income, adjusted
3462	3462	15 gross income, or taxable income for the taxable year shall
3463	3463	16 mean the amount of gross income, adjusted gross income or
3464	3464	17 taxable income properly reportable for federal income tax
3465	3465	18 purposes for the taxable year under the provisions of the
3466	3466	19 Internal Revenue Code. Taxable income may be less than
3467	3467	20 zero. However, for taxable years ending on or after
3468	3468	21 December 31, 1986, net operating loss carryforwards from
3469	3469	22 taxable years ending prior to December 31, 1986, may not
3470	3470	23 exceed the sum of federal taxable income for the taxable
3471	3471	24 year before net operating loss deduction, plus the excess
3472	3472	25 of addition modifications over subtraction modifications
3473	3473
3474	3474
3475	3475
3476	3476
3477	3477
3478	3478	HB3580 - 96 - LRB103 05339 SPS 50358 b
3479	3479
3480	3480
3481	3481	HB3580- 97 -LRB103 05339 SPS 50358 b HB3580 - 97 - LRB103 05339 SPS 50358 b
3482	3482	HB3580 - 97 - LRB103 05339 SPS 50358 b
3483	3483	1 for the taxable year. For taxable years ending prior to
3484	3484	2 December 31, 1986, taxable income may never be an amount
3485	3485	3 in excess of the net operating loss for the taxable year as
3486	3486	4 defined in subsections (c) and (d) of Section 172 of the
3487	3487	5 Internal Revenue Code, provided that when taxable income
3488	3488	6 of a corporation (other than a Subchapter S corporation),
3489	3489	7 trust, or estate is less than zero and addition
3490	3490	8 modifications, other than those provided by subparagraph
3491	3491	9 (E) of paragraph (2) of subsection (b) for corporations or
3492	3492	10 subparagraph (E) of paragraph (2) of subsection (c) for
3493	3493	11 trusts and estates, exceed subtraction modifications, an
3494	3494	12 addition modification must be made under those
3495	3495	13 subparagraphs for any other taxable year to which the
3496	3496	14 taxable income less than zero (net operating loss) is
3497	3497	15 applied under Section 172 of the Internal Revenue Code or
3498	3498	16 under subparagraph (E) of paragraph (2) of this subsection
3499	3499	17 (e) applied in conjunction with Section 172 of the
3500	3500	18 Internal Revenue Code.
3501	3501	19 (2) Special rule. For purposes of paragraph (1) of
3502	3502	20 this subsection, the taxable income properly reportable
3503	3503	21 for federal income tax purposes shall mean:
3504	3504	22 (A) Certain life insurance companies. In the case
3505	3505	23 of a life insurance company subject to the tax imposed
3506	3506	24 by Section 801 of the Internal Revenue Code, life
3507	3507	25 insurance company taxable income, plus the amount of
3508	3508	26 distribution from pre-1984 policyholder surplus
3509	3509
3510	3510
3511	3511
3512	3512
3513	3513
3514	3514	HB3580 - 97 - LRB103 05339 SPS 50358 b
3515	3515
3516	3516
3517	3517	HB3580- 98 -LRB103 05339 SPS 50358 b HB3580 - 98 - LRB103 05339 SPS 50358 b
3518	3518	HB3580 - 98 - LRB103 05339 SPS 50358 b
3519	3519	1 accounts as calculated under Section 815a of the
3520	3520	2 Internal Revenue Code;
3521	3521	3 (B) Certain other insurance companies. In the case
3522	3522	4 of mutual insurance companies subject to the tax
3523	3523	5 imposed by Section 831 of the Internal Revenue Code,
3524	3524	6 insurance company taxable income;
3525	3525	7 (C) Regulated investment companies. In the case of
3526	3526	8 a regulated investment company subject to the tax
3527	3527	9 imposed by Section 852 of the Internal Revenue Code,
3528	3528	10 investment company taxable income;
3529	3529	11 (D) Real estate investment trusts. In the case of
3530	3530	12 a real estate investment trust subject to the tax
3531	3531	13 imposed by Section 857 of the Internal Revenue Code,
3532	3532	14 real estate investment trust taxable income;
3533	3533	15 (E) Consolidated corporations. In the case of a
3534	3534	16 corporation which is a member of an affiliated group
3535	3535	17 of corporations filing a consolidated income tax
3536	3536	18 return for the taxable year for federal income tax
3537	3537	19 purposes, taxable income determined as if such
3538	3538	20 corporation had filed a separate return for federal
3539	3539	21 income tax purposes for the taxable year and each
3540	3540	22 preceding taxable year for which it was a member of an
3541	3541	23 affiliated group. For purposes of this subparagraph,
3542	3542	24 the taxpayer's separate taxable income shall be
3543	3543	25 determined as if the election provided by Section
3544	3544	26 243(b)(2) of the Internal Revenue Code had been in
3545	3545
3546	3546
3547	3547
3548	3548
3549	3549
3550	3550	HB3580 - 98 - LRB103 05339 SPS 50358 b
3551	3551
3552	3552
3553	3553	HB3580- 99 -LRB103 05339 SPS 50358 b HB3580 - 99 - LRB103 05339 SPS 50358 b
3554	3554	HB3580 - 99 - LRB103 05339 SPS 50358 b
3555	3555	1 effect for all such years;
3556	3556	2 (F) Cooperatives. In the case of a cooperative
3557	3557	3 corporation or association, the taxable income of such
3558	3558	4 organization determined in accordance with the
3559	3559	5 provisions of Section 1381 through 1388 of the
3560	3560	6 Internal Revenue Code, but without regard to the
3561	3561	7 prohibition against offsetting losses from patronage
3562	3562	8 activities against income from nonpatronage
3563	3563	9 activities; except that a cooperative corporation or
3564	3564	10 association may make an election to follow its federal
3565	3565	11 income tax treatment of patronage losses and
3566	3566	12 nonpatronage losses. In the event such election is
3567	3567	13 made, such losses shall be computed and carried over
3568	3568	14 in a manner consistent with subsection (a) of Section
3569	3569	15 207 of this Act and apportioned by the apportionment
3570	3570	16 factor reported by the cooperative on its Illinois
3571	3571	17 income tax return filed for the taxable year in which
3572	3572	18 the losses are incurred. The election shall be
3573	3573	19 effective for all taxable years with original returns
3574	3574	20 due on or after the date of the election. In addition,
3575	3575	21 the cooperative may file an amended return or returns,
3576	3576	22 as allowed under this Act, to provide that the
3577	3577	23 election shall be effective for losses incurred or
3578	3578	24 carried forward for taxable years occurring prior to
3579	3579	25 the date of the election. Once made, the election may
3580	3580	26 only be revoked upon approval of the Director. The
3581	3581
3582	3582
3583	3583
3584	3584
3585	3585
3586	3586	HB3580 - 99 - LRB103 05339 SPS 50358 b
3587	3587
3588	3588
3589	3589	HB3580- 100 -LRB103 05339 SPS 50358 b HB3580 - 100 - LRB103 05339 SPS 50358 b
3590	3590	HB3580 - 100 - LRB103 05339 SPS 50358 b
3591	3591	1 Department shall adopt rules setting forth
3592	3592	2 requirements for documenting the elections and any
3593	3593	3 resulting Illinois net loss and the standards to be
3594	3594	4 used by the Director in evaluating requests to revoke
3595	3595	5 elections. Public Act 96-932 is declaratory of
3596	3596	6 existing law;
3597	3597	7 (G) Subchapter S corporations. In the case of: (i)
3598	3598	8 a Subchapter S corporation for which there is in
3599	3599	9 effect an election for the taxable year under Section
3600	3600	10 1362 of the Internal Revenue Code, the taxable income
3601	3601	11 of such corporation determined in accordance with
3602	3602	12 Section 1363(b) of the Internal Revenue Code, except
3603	3603	13 that taxable income shall take into account those
3604	3604	14 items which are required by Section 1363(b)(1) of the
3605	3605	15 Internal Revenue Code to be separately stated; and
3606	3606	16 (ii) a Subchapter S corporation for which there is in
3607	3607	17 effect a federal election to opt out of the provisions
3608	3608	18 of the Subchapter S Revision Act of 1982 and have
3609	3609	19 applied instead the prior federal Subchapter S rules
3610	3610	20 as in effect on July 1, 1982, the taxable income of
3611	3611	21 such corporation determined in accordance with the
3612	3612	22 federal Subchapter S rules as in effect on July 1,
3613	3613	23 1982; and
3614	3614	24 (H) Partnerships. In the case of a partnership,
3615	3615	25 taxable income determined in accordance with Section
3616	3616	26 703 of the Internal Revenue Code, except that taxable
3617	3617
3618	3618
3619	3619
3620	3620
3621	3621
3622	3622	HB3580 - 100 - LRB103 05339 SPS 50358 b
3623	3623
3624	3624
3625	3625	HB3580- 101 -LRB103 05339 SPS 50358 b HB3580 - 101 - LRB103 05339 SPS 50358 b
3626	3626	HB3580 - 101 - LRB103 05339 SPS 50358 b
3627	3627	1 income shall take into account those items which are
3628	3628	2 required by Section 703(a)(1) to be separately stated
3629	3629	3 but which would be taken into account by an individual
3630	3630	4 in calculating his taxable income.
3631	3631	5 (3) Recapture of business expenses on disposition of
3632	3632	6 asset or business. Notwithstanding any other law to the
3633	3633	7 contrary, if in prior years income from an asset or
3634	3634	8 business has been classified as business income and in a
3635	3635	9 later year is demonstrated to be non-business income, then
3636	3636	10 all expenses, without limitation, deducted in such later
3637	3637	11 year and in the 2 immediately preceding taxable years
3638	3638	12 related to that asset or business that generated the
3639	3639	13 non-business income shall be added back and recaptured as
3640	3640	14 business income in the year of the disposition of the
3641	3641	15 asset or business. Such amount shall be apportioned to
3642	3642	16 Illinois using the greater of the apportionment fraction
3643	3643	17 computed for the business under Section 304 of this Act
3644	3644	18 for the taxable year or the average of the apportionment
3645	3645	19 fractions computed for the business under Section 304 of
3646	3646	20 this Act for the taxable year and for the 2 immediately
3647	3647	21 preceding taxable years.
3648	3648	22 (f) Valuation limitation amount.
3649	3649	23 (1) In general. The valuation limitation amount
3650	3650	24 referred to in subsections (a)(2)(G), (c)(2)(I) and
3651	3651	25 (d)(2)(E) is an amount equal to:
3652	3652
3653	3653
3654	3654
3655	3655
3656	3656
3657	3657	HB3580 - 101 - LRB103 05339 SPS 50358 b
3658	3658
3659	3659
3660	3660	HB3580- 102 -LRB103 05339 SPS 50358 b HB3580 - 102 - LRB103 05339 SPS 50358 b
3661	3661	HB3580 - 102 - LRB103 05339 SPS 50358 b
3662	3662	1 (A) The sum of the pre-August 1, 1969 appreciation
3663	3663	2 amounts (to the extent consisting of gain reportable
3664	3664	3 under the provisions of Section 1245 or 1250 of the
3665	3665	4 Internal Revenue Code) for all property in respect of
3666	3666	5 which such gain was reported for the taxable year;
3667	3667	6 plus
3668	3668	7 (B) The lesser of (i) the sum of the pre-August 1,
3669	3669	8 1969 appreciation amounts (to the extent consisting of
3670	3670	9 capital gain) for all property in respect of which
3671	3671	10 such gain was reported for federal income tax purposes
3672	3672	11 for the taxable year, or (ii) the net capital gain for
3673	3673	12 the taxable year, reduced in either case by any amount
3674	3674	13 of such gain included in the amount determined under
3675	3675	14 subsection (a)(2)(F) or (c)(2)(H).
3676	3676	15 (2) Pre-August 1, 1969 appreciation amount.
3677	3677	16 (A) If the fair market value of property referred
3678	3678	17 to in paragraph (1) was readily ascertainable on
3679	3679	18 August 1, 1969, the pre-August 1, 1969 appreciation
3680	3680	19 amount for such property is the lesser of (i) the
3681	3681	20 excess of such fair market value over the taxpayer's
3682	3682	21 basis (for determining gain) for such property on that
3683	3683	22 date (determined under the Internal Revenue Code as in
3684	3684	23 effect on that date), or (ii) the total gain realized
3685	3685	24 and reportable for federal income tax purposes in
3686	3686	25 respect of the sale, exchange or other disposition of
3687	3687	26 such property.
3688	3688
3689	3689
3690	3690
3691	3691
3692	3692
3693	3693	HB3580 - 102 - LRB103 05339 SPS 50358 b
3694	3694
3695	3695
3696	3696	HB3580- 103 -LRB103 05339 SPS 50358 b HB3580 - 103 - LRB103 05339 SPS 50358 b
3697	3697	HB3580 - 103 - LRB103 05339 SPS 50358 b
3698	3698	1 (B) If the fair market value of property referred
3699	3699	2 to in paragraph (1) was not readily ascertainable on
3700	3700	3 August 1, 1969, the pre-August 1, 1969 appreciation
3701	3701	4 amount for such property is that amount which bears
3702	3702	5 the same ratio to the total gain reported in respect of
3703	3703	6 the property for federal income tax purposes for the
3704	3704	7 taxable year, as the number of full calendar months in
3705	3705	8 that part of the taxpayer's holding period for the
3706	3706	9 property ending July 31, 1969 bears to the number of
3707	3707	10 full calendar months in the taxpayer's entire holding
3708	3708	11 period for the property.
3709	3709	12 (C) The Department shall prescribe such
3710	3710	13 regulations as may be necessary to carry out the
3711	3711	14 purposes of this paragraph.
3712	3712	15 (g) Double deductions. Unless specifically provided
3713	3713	16 otherwise, nothing in this Section shall permit the same item
3714	3714	17 to be deducted more than once.
3715	3715	18 (h) Legislative intention. Except as expressly provided by
3716	3716	19 this Section there shall be no modifications or limitations on
3717	3717	20 the amounts of income, gain, loss or deduction taken into
3718	3718	21 account in determining gross income, adjusted gross income or
3719	3719	22 taxable income for federal income tax purposes for the taxable
3720	3720	23 year, or in the amount of such items entering into the
3721	3721	24 computation of base income and net income under this Act for
3722	3722
3723	3723
3724	3724
3725	3725
3726	3726
3727	3727	HB3580 - 103 - LRB103 05339 SPS 50358 b
3728	3728
3729	3729
3730	3730	HB3580- 104 -LRB103 05339 SPS 50358 b HB3580 - 104 - LRB103 05339 SPS 50358 b
3731	3731	HB3580 - 104 - LRB103 05339 SPS 50358 b
3732	3732	1 such taxable year, whether in respect of property values as of
3733	3733	2 August 1, 1969 or otherwise.
3734	3734	3 (Source: P.A. 101-9, eff. 6-5-19; 101-81, eff. 7-12-19;
3735	3735	4 102-16, eff. 6-17-21; 102-558, eff. 8-20-21; 102-658, eff.
3736	3736	5 8-27-21; 102-813, eff. 5-13-22; 102-1112, eff. 12-21-22.)
3737	3737
3738	3738
3739	3739
3740	3740
3741	3741
3742	3742	HB3580 - 104 - LRB103 05339 SPS 50358 b