Illinois 2023-2024 Regular Session

Illinois House Bill HB4157 Compare Versions

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

Old	New	Differences
1	1	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB4157 Introduced , by Rep. Michael T. Marron SYNOPSIS AS INTRODUCED: 35 ILCS 5/20135 ILCS 5/203 from Ch. 120, par. 2-203 Amends the Illinois Income Tax Act. Provides that, when calculating the taxpayer's base income, the taxpayer's federal adjusted gross income shall be modified to exclude the portion of the income or loss received from a trade or business conducted within and without Illinois or from a pass-through entity conducting business within and without Illinois that is not derived from or connected with Illinois sources. In provisions concerning the pass-through entity tax, provides that, if a Schedule K-1-P is issued to a partner or shareholder by the partnership or corporation indicating that the tax has been paid by the partnership or corporation, the Department of Revenue shall collect any past due amounts that are represented on the K-1-P from the partnership or corporation and not from the partner or shareholder. Effective immediately. LRB103 33557 HLH 63369 b A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB4157 Introduced , by Rep. Michael T. Marron SYNOPSIS AS INTRODUCED: 35 ILCS 5/20135 ILCS 5/203 from Ch. 120, par. 2-203 35 ILCS 5/201 35 ILCS 5/203 from Ch. 120, par. 2-203 Amends the Illinois Income Tax Act. Provides that, when calculating the taxpayer's base income, the taxpayer's federal adjusted gross income shall be modified to exclude the portion of the income or loss received from a trade or business conducted within and without Illinois or from a pass-through entity conducting business within and without Illinois that is not derived from or connected with Illinois sources. In provisions concerning the pass-through entity tax, provides that, if a Schedule K-1-P is issued to a partner or shareholder by the partnership or corporation indicating that the tax has been paid by the partnership or corporation, the Department of Revenue shall collect any past due amounts that are represented on the K-1-P from the partnership or corporation and not from the partner or shareholder. Effective immediately. LRB103 33557 HLH 63369 b LRB103 33557 HLH 63369 b A BILL FOR
2	2	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB4157 Introduced , by Rep. Michael T. Marron SYNOPSIS AS INTRODUCED:
3	3	35 ILCS 5/20135 ILCS 5/203 from Ch. 120, par. 2-203 35 ILCS 5/201 35 ILCS 5/203 from Ch. 120, par. 2-203
4	4	35 ILCS 5/201
5	5	35 ILCS 5/203 from Ch. 120, par. 2-203
6	6	Amends the Illinois Income Tax Act. Provides that, when calculating the taxpayer's base income, the taxpayer's federal adjusted gross income shall be modified to exclude the portion of the income or loss received from a trade or business conducted within and without Illinois or from a pass-through entity conducting business within and without Illinois that is not derived from or connected with Illinois sources. In provisions concerning the pass-through entity tax, provides that, if a Schedule K-1-P is issued to a partner or shareholder by the partnership or corporation indicating that the tax has been paid by the partnership or corporation, the Department of Revenue shall collect any past due amounts that are represented on the K-1-P from the partnership or corporation and not from the partner or shareholder. Effective immediately.
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12	12	1 AN ACT concerning revenue.
13	13	2 Be it enacted by the People of the State of Illinois,
14	14	3 represented in the General Assembly:
15	15	4 Section 5. The Illinois Income Tax Act is amended by
16	16	5 changing Sections 201 and 203 as follows:
17	17	6 (35 ILCS 5/201)
18	18	7 Sec. 201. Tax imposed.
19	19	8 (a) In general. A tax measured by net income is hereby
20	20	9 imposed on every individual, corporation, trust and estate for
21	21	10 each taxable year ending after July 31, 1969 on the privilege
22	22	11 of earning or receiving income in or as a resident of this
23	23	12 State. Such tax shall be in addition to all other occupation or
24	24	13 privilege taxes imposed by this State or by any municipal
25	25	14 corporation or political subdivision thereof.
26	26	15 (b) Rates. The tax imposed by subsection (a) of this
27	27	16 Section shall be determined as follows, except as adjusted by
28	28	17 subsection (d-1):
29	29	18 (1) In the case of an individual, trust or estate, for
30	30	19 taxable years ending prior to July 1, 1989, an amount
31	31	20 equal to 2 1/2% of the taxpayer's net income for the
32	32	21 taxable year.
33	33	22 (2) In the case of an individual, trust or estate, for
34	34	23 taxable years beginning prior to July 1, 1989 and ending
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38	38	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB4157 Introduced , by Rep. Michael T. Marron SYNOPSIS AS INTRODUCED:
39	39	35 ILCS 5/20135 ILCS 5/203 from Ch. 120, par. 2-203 35 ILCS 5/201 35 ILCS 5/203 from Ch. 120, par. 2-203
40	40	35 ILCS 5/201
41	41	35 ILCS 5/203 from Ch. 120, par. 2-203
42	42	Amends the Illinois Income Tax Act. Provides that, when calculating the taxpayer's base income, the taxpayer's federal adjusted gross income shall be modified to exclude the portion of the income or loss received from a trade or business conducted within and without Illinois or from a pass-through entity conducting business within and without Illinois that is not derived from or connected with Illinois sources. In provisions concerning the pass-through entity tax, provides that, if a Schedule K-1-P is issued to a partner or shareholder by the partnership or corporation indicating that the tax has been paid by the partnership or corporation, the Department of Revenue shall collect any past due amounts that are represented on the K-1-P from the partnership or corporation and not from the partner or shareholder. Effective immediately.
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44	44	LRB103 33557 HLH 63369 b
45	45	A BILL FOR
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51	51	35 ILCS 5/201
52	52	35 ILCS 5/203 from Ch. 120, par. 2-203
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71	71	1 after June 30, 1989, an amount equal to the sum of (i) 2
72	72	2 1/2% of the taxpayer's net income for the period prior to
73	73	3 July 1, 1989, as calculated under Section 202.3, and (ii)
74	74	4 3% of the taxpayer's net income for the period after June
75	75	5 30, 1989, as calculated under Section 202.3.
76	76	6 (3) In the case of an individual, trust or estate, for
77	77	7 taxable years beginning after June 30, 1989, and ending
78	78	8 prior to January 1, 2011, an amount equal to 3% of the
79	79	9 taxpayer's net income for the taxable year.
80	80	10 (4) In the case of an individual, trust, or estate,
81	81	11 for taxable years beginning prior to January 1, 2011, and
82	82	12 ending after December 31, 2010, an amount equal to the sum
83	83	13 of (i) 3% of the taxpayer's net income for the period prior
84	84	14 to January 1, 2011, as calculated under Section 202.5, and
85	85	15 (ii) 5% of the taxpayer's net income for the period after
86	86	16 December 31, 2010, as calculated under Section 202.5.
87	87	17 (5) In the case of an individual, trust, or estate,
88	88	18 for taxable years beginning on or after January 1, 2011,
89	89	19 and ending prior to January 1, 2015, an amount equal to 5%
90	90	20 of the taxpayer's net income for the taxable year.
91	91	21 (5.1) In the case of an individual, trust, or estate,
92	92	22 for taxable years beginning prior to January 1, 2015, and
93	93	23 ending after December 31, 2014, an amount equal to the sum
94	94	24 of (i) 5% of the taxpayer's net income for the period prior
95	95	25 to January 1, 2015, as calculated under Section 202.5, and
96	96	26 (ii) 3.75% of the taxpayer's net income for the period
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107	107	1 after December 31, 2014, as calculated under Section
108	108	2 202.5.
109	109	3 (5.2) In the case of an individual, trust, or estate,
110	110	4 for taxable years beginning on or after January 1, 2015,
111	111	5 and ending prior to July 1, 2017, an amount equal to 3.75%
112	112	6 of the taxpayer's net income for the taxable year.
113	113	7 (5.3) In the case of an individual, trust, or estate,
114	114	8 for taxable years beginning prior to July 1, 2017, and
115	115	9 ending after June 30, 2017, an amount equal to the sum of
116	116	10 (i) 3.75% of the taxpayer's net income for the period
117	117	11 prior to July 1, 2017, as calculated under Section 202.5,
118	118	12 and (ii) 4.95% of the taxpayer's net income for the period
119	119	13 after June 30, 2017, as calculated under Section 202.5.
120	120	14 (5.4) In the case of an individual, trust, or estate,
121	121	15 for taxable years beginning on or after July 1, 2017, an
122	122	16 amount equal to 4.95% of the taxpayer's net income for the
123	123	17 taxable year.
124	124	18 (6) In the case of a corporation, for taxable years
125	125	19 ending prior to July 1, 1989, an amount equal to 4% of the
126	126	20 taxpayer's net income for the taxable year.
127	127	21 (7) In the case of a corporation, for taxable years
128	128	22 beginning prior to July 1, 1989 and ending after June 30,
129	129	23 1989, an amount equal to the sum of (i) 4% of the
130	130	24 taxpayer's net income for the period prior to July 1,
131	131	25 1989, as calculated under Section 202.3, and (ii) 4.8% of
132	132	26 the taxpayer's net income for the period after June 30,
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143	143	1 1989, as calculated under Section 202.3.
144	144	2 (8) In the case of a corporation, for taxable years
145	145	3 beginning after June 30, 1989, and ending prior to January
146	146	4 1, 2011, an amount equal to 4.8% of the taxpayer's net
147	147	5 income for the taxable year.
148	148	6 (9) In the case of a corporation, for taxable years
149	149	7 beginning prior to January 1, 2011, and ending after
150	150	8 December 31, 2010, an amount equal to the sum of (i) 4.8%
151	151	9 of the taxpayer's net income for the period prior to
152	152	10 January 1, 2011, as calculated under Section 202.5, and
153	153	11 (ii) 7% of the taxpayer's net income for the period after
154	154	12 December 31, 2010, as calculated under Section 202.5.
155	155	13 (10) In the case of a corporation, for taxable years
156	156	14 beginning on or after January 1, 2011, and ending prior to
157	157	15 January 1, 2015, an amount equal to 7% of the taxpayer's
158	158	16 net income for the taxable year.
159	159	17 (11) In the case of a corporation, for taxable years
160	160	18 beginning prior to January 1, 2015, and ending after
161	161	19 December 31, 2014, an amount equal to the sum of (i) 7% of
162	162	20 the taxpayer's net income for the period prior to January
163	163	21 1, 2015, as calculated under Section 202.5, and (ii) 5.25%
164	164	22 of the taxpayer's net income for the period after December
165	165	23 31, 2014, as calculated under Section 202.5.
166	166	24 (12) In the case of a corporation, for taxable years
167	167	25 beginning on or after January 1, 2015, and ending prior to
168	168	26 July 1, 2017, an amount equal to 5.25% of the taxpayer's
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179	179	1 net income for the taxable year.
180	180	2 (13) In the case of a corporation, for taxable years
181	181	3 beginning prior to July 1, 2017, and ending after June 30,
182	182	4 2017, an amount equal to the sum of (i) 5.25% of the
183	183	5 taxpayer's net income for the period prior to July 1,
184	184	6 2017, as calculated under Section 202.5, and (ii) 7% of
185	185	7 the taxpayer's net income for the period after June 30,
186	186	8 2017, as calculated under Section 202.5.
187	187	9 (14) In the case of a corporation, for taxable years
188	188	10 beginning on or after July 1, 2017, an amount equal to 7%
189	189	11 of the taxpayer's net income for the taxable year.
190	190	12 The rates under this subsection (b) are subject to the
191	191	13 provisions of Section 201.5.
192	192	14 (b-5) Surcharge; sale or exchange of assets, properties,
193	193	15 and intangibles of organization gaming licensees. For each of
194	194	16 taxable years 2019 through 2027, a surcharge is imposed on all
195	195	17 taxpayers on income arising from the sale or exchange of
196	196	18 capital assets, depreciable business property, real property
197	197	19 used in the trade or business, and Section 197 intangibles (i)
198	198	20 of an organization licensee under the Illinois Horse Racing
199	199	21 Act of 1975 and (ii) of an organization gaming licensee under
200	200	22 the Illinois Gambling Act. The amount of the surcharge is
201	201	23 equal to the amount of federal income tax liability for the
202	202	24 taxable year attributable to those sales and exchanges. The
203	203	25 surcharge imposed shall not apply if:
204	204	26 (1) the organization gaming license, organization
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215	215	1 license, or racetrack property is transferred as a result
216	216	2 of any of the following:
217	217	3 (A) bankruptcy, a receivership, or a debt
218	218	4 adjustment initiated by or against the initial
219	219	5 licensee or the substantial owners of the initial
220	220	6 licensee;
221	221	7 (B) cancellation, revocation, or termination of
222	222	8 any such license by the Illinois Gaming Board or the
223	223	9 Illinois Racing Board;
224	224	10 (C) a determination by the Illinois Gaming Board
225	225	11 that transfer of the license is in the best interests
226	226	12 of Illinois gaming;
227	227	13 (D) the death of an owner of the equity interest in
228	228	14 a licensee;
229	229	15 (E) the acquisition of a controlling interest in
230	230	16 the stock or substantially all of the assets of a
231	231	17 publicly traded company;
232	232	18 (F) a transfer by a parent company to a wholly
233	233	19 owned subsidiary; or
234	234	20 (G) the transfer or sale to or by one person to
235	235	21 another person where both persons were initial owners
236	236	22 of the license when the license was issued; or
237	237	23 (2) the controlling interest in the organization
238	238	24 gaming license, organization license, or racetrack
239	239	25 property is transferred in a transaction to lineal
240	240	26 descendants in which no gain or loss is recognized or as a
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251	251	1 result of a transaction in accordance with Section 351 of
252	252	2 the Internal Revenue Code in which no gain or loss is
253	253	3 recognized; or
254	254	4 (3) live horse racing was not conducted in 2010 at a
255	255	5 racetrack located within 3 miles of the Mississippi River
256	256	6 under a license issued pursuant to the Illinois Horse
257	257	7 Racing Act of 1975.
258	258	8 The transfer of an organization gaming license,
259	259	9 organization license, or racetrack property by a person other
260	260	10 than the initial licensee to receive the organization gaming
261	261	11 license is not subject to a surcharge. The Department shall
262	262	12 adopt rules necessary to implement and administer this
263	263	13 subsection.
264	264	14 (c) Personal Property Tax Replacement Income Tax.
265	265	15 Beginning on July 1, 1979 and thereafter, in addition to such
266	266	16 income tax, there is also hereby imposed the Personal Property
267	267	17 Tax Replacement Income Tax measured by net income on every
268	268	18 corporation (including Subchapter S corporations), partnership
269	269	19 and trust, for each taxable year ending after June 30, 1979.
270	270	20 Such taxes are imposed on the privilege of earning or
271	271	21 receiving income in or as a resident of this State. The
272	272	22 Personal Property Tax Replacement Income Tax shall be in
273	273	23 addition to the income tax imposed by subsections (a) and (b)
274	274	24 of this Section and in addition to all other occupation or
275	275	25 privilege taxes imposed by this State or by any municipal
276	276	26 corporation or political subdivision thereof.
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287	287	1 (d) Additional Personal Property Tax Replacement Income
288	288	2 Tax Rates. The personal property tax replacement income tax
289	289	3 imposed by this subsection and subsection (c) of this Section
290	290	4 in the case of a corporation, other than a Subchapter S
291	291	5 corporation and except as adjusted by subsection (d-1), shall
292	292	6 be an additional amount equal to 2.85% of such taxpayer's net
293	293	7 income for the taxable year, except that beginning on January
294	294	8 1, 1981, and thereafter, the rate of 2.85% specified in this
295	295	9 subsection shall be reduced to 2.5%, and in the case of a
296	296	10 partnership, trust or a Subchapter S corporation shall be an
297	297	11 additional amount equal to 1.5% of such taxpayer's net income
298	298	12 for the taxable year.
299	299	13 (d-1) Rate reduction for certain foreign insurers. In the
300	300	14 case of a foreign insurer, as defined by Section 35A-5 of the
301	301	15 Illinois Insurance Code, whose state or country of domicile
302	302	16 imposes on insurers domiciled in Illinois a retaliatory tax
303	303	17 (excluding any insurer whose premiums from reinsurance assumed
304	304	18 are 50% or more of its total insurance premiums as determined
305	305	19 under paragraph (2) of subsection (b) of Section 304, except
306	306	20 that for purposes of this determination premiums from
307	307	21 reinsurance do not include premiums from inter-affiliate
308	308	22 reinsurance arrangements), beginning with taxable years ending
309	309	23 on or after December 31, 1999, the sum of the rates of tax
310	310	24 imposed by subsections (b) and (d) shall be reduced (but not
311	311	25 increased) to the rate at which the total amount of tax imposed
312	312	26 under this Act, net of all credits allowed under this Act,
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323	323	1 shall equal (i) the total amount of tax that would be imposed
324	324	2 on the foreign insurer's net income allocable to Illinois for
325	325	3 the taxable year by such foreign insurer's state or country of
326	326	4 domicile if that net income were subject to all income taxes
327	327	5 and taxes measured by net income imposed by such foreign
328	328	6 insurer's state or country of domicile, net of all credits
329	329	7 allowed or (ii) a rate of zero if no such tax is imposed on
330	330	8 such income by the foreign insurer's state of domicile. For
331	331	9 the purposes of this subsection (d-1), an inter-affiliate
332	332	10 includes a mutual insurer under common management.
333	333	11 (1) For the purposes of subsection (d-1), in no event
334	334	12 shall the sum of the rates of tax imposed by subsections
335	335	13 (b) and (d) be reduced below the rate at which the sum of:
336	336	14 (A) the total amount of tax imposed on such
337	337	15 foreign insurer under this Act for a taxable year, net
338	338	16 of all credits allowed under this Act, plus
339	339	17 (B) the privilege tax imposed by Section 409 of
340	340	18 the Illinois Insurance Code, the fire insurance
341	341	19 company tax imposed by Section 12 of the Fire
342	342	20 Investigation Act, and the fire department taxes
343	343	21 imposed under Section 11-10-1 of the Illinois
344	344	22 Municipal Code,
345	345	23 equals 1.25% for taxable years ending prior to December
346	346	24 31, 2003, or 1.75% for taxable years ending on or after
347	347	25 December 31, 2003, of the net taxable premiums written for
348	348	26 the taxable year, as described by subsection (1) of
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359	359	1 Section 409 of the Illinois Insurance Code. This paragraph
360	360	2 will in no event increase the rates imposed under
361	361	3 subsections (b) and (d).
362	362	4 (2) Any reduction in the rates of tax imposed by this
363	363	5 subsection shall be applied first against the rates
364	364	6 imposed by subsection (b) and only after the tax imposed
365	365	7 by subsection (a) net of all credits allowed under this
366	366	8 Section other than the credit allowed under subsection (i)
367	367	9 has been reduced to zero, against the rates imposed by
368	368	10 subsection (d).
369	369	11 This subsection (d-1) is exempt from the provisions of
370	370	12 Section 250.
371	371	13 (e) Investment credit. A taxpayer shall be allowed a
372	372	14 credit against the Personal Property Tax Replacement Income
373	373	15 Tax for investment in qualified property.
374	374	16 (1) A taxpayer shall be allowed a credit equal to .5%
375	375	17 of the basis of qualified property placed in service
376	376	18 during the taxable year, provided such property is placed
377	377	19 in service on or after July 1, 1984. There shall be allowed
378	378	20 an additional credit equal to .5% of the basis of
379	379	21 qualified property placed in service during the taxable
380	380	22 year, provided such property is placed in service on or
381	381	23 after July 1, 1986, and the taxpayer's base employment
382	382	24 within Illinois has increased by 1% or more over the
383	383	25 preceding year as determined by the taxpayer's employment
384	384	26 records filed with the Illinois Department of Employment
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395	395	1 Security. Taxpayers who are new to Illinois shall be
396	396	2 deemed to have met the 1% growth in base employment for the
397	397	3 first year in which they file employment records with the
398	398	4 Illinois Department of Employment Security. The provisions
399	399	5 added to this Section by Public Act 85-1200 (and restored
400	400	6 by Public Act 87-895) shall be construed as declaratory of
401	401	7 existing law and not as a new enactment. If, in any year,
402	402	8 the increase in base employment within Illinois over the
403	403	9 preceding year is less than 1%, the additional credit
404	404	10 shall be limited to that percentage times a fraction, the
405	405	11 numerator of which is .5% and the denominator of which is
406	406	12 1%, but shall not exceed .5%. The investment credit shall
407	407	13 not be allowed to the extent that it would reduce a
408	408	14 taxpayer's liability in any tax year below zero, nor may
409	409	15 any credit for qualified property be allowed for any year
410	410	16 other than the year in which the property was placed in
411	411	17 service in Illinois. For tax years ending on or after
412	412	18 December 31, 1987, and on or before December 31, 1988, the
413	413	19 credit shall be allowed for the tax year in which the
414	414	20 property is placed in service, or, if the amount of the
415	415	21 credit exceeds the tax liability for that year, whether it
416	416	22 exceeds the original liability or the liability as later
417	417	23 amended, such excess may be carried forward and applied to
418	418	24 the tax liability of the 5 taxable years following the
419	419	25 excess credit years if the taxpayer (i) makes investments
420	420	26 which cause the creation of a minimum of 2,000 full-time
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431	431	1 equivalent jobs in Illinois, (ii) is located in an
432	432	2 enterprise zone established pursuant to the Illinois
433	433	3 Enterprise Zone Act and (iii) is certified by the
434	434	4 Department of Commerce and Community Affairs (now
435	435	5 Department of Commerce and Economic Opportunity) as
436	436	6 complying with the requirements specified in clause (i)
437	437	7 and (ii) by July 1, 1986. The Department of Commerce and
438	438	8 Community Affairs (now Department of Commerce and Economic
439	439	9 Opportunity) shall notify the Department of Revenue of all
440	440	10 such certifications immediately. For tax years ending
441	441	11 after December 31, 1988, the credit shall be allowed for
442	442	12 the tax year in which the property is placed in service,
443	443	13 or, if the amount of the credit exceeds the tax liability
444	444	14 for that year, whether it exceeds the original liability
445	445	15 or the liability as later amended, such excess may be
446	446	16 carried forward and applied to the tax liability of the 5
447	447	17 taxable years following the excess credit years. The
448	448	18 credit shall be applied to the earliest year for which
449	449	19 there is a liability. If there is credit from more than one
450	450	20 tax year that is available to offset a liability, earlier
451	451	21 credit shall be applied first.
452	452	22 (2) The term "qualified property" means property
453	453	23 which:
454	454	24 (A) is tangible, whether new or used, including
455	455	25 buildings and structural components of buildings and
456	456	26 signs that are real property, but not including land
457	457
458	458
459	459
460	460
461	461
462	462	HB4157 - 12 - LRB103 33557 HLH 63369 b
463	463
464	464
465	465	HB4157- 13 -LRB103 33557 HLH 63369 b HB4157 - 13 - LRB103 33557 HLH 63369 b
466	466	HB4157 - 13 - LRB103 33557 HLH 63369 b
467	467	1 or improvements to real property that are not a
468	468	2 structural component of a building such as
469	469	3 landscaping, sewer lines, local access roads, fencing,
470	470	4 parking lots, and other appurtenances;
471	471	5 (B) is depreciable pursuant to Section 167 of the
472	472	6 Internal Revenue Code, except that "3-year property"
473	473	7 as defined in Section 168(c)(2)(A) of that Code is not
474	474	8 eligible for the credit provided by this subsection
475	475	9 (e);
476	476	10 (C) is acquired by purchase as defined in Section
477	477	11 179(d) of the Internal Revenue Code;
478	478	12 (D) is used in Illinois by a taxpayer who is
479	479	13 primarily engaged in manufacturing, or in mining coal
480	480	14 or fluorite, or in retailing, or was placed in service
481	481	15 on or after July 1, 2006 in a River Edge Redevelopment
482	482	16 Zone established pursuant to the River Edge
483	483	17 Redevelopment Zone Act; and
484	484	18 (E) has not previously been used in Illinois in
485	485	19 such a manner and by such a person as would qualify for
486	486	20 the credit provided by this subsection (e) or
487	487	21 subsection (f).
488	488	22 (3) For purposes of this subsection (e),
489	489	23 "manufacturing" means the material staging and production
490	490	24 of tangible personal property by procedures commonly
491	491	25 regarded as manufacturing, processing, fabrication, or
492	492	26 assembling which changes some existing material into new
493	493
494	494
495	495
496	496
497	497
498	498	HB4157 - 13 - LRB103 33557 HLH 63369 b
499	499
500	500
501	501	HB4157- 14 -LRB103 33557 HLH 63369 b HB4157 - 14 - LRB103 33557 HLH 63369 b
502	502	HB4157 - 14 - LRB103 33557 HLH 63369 b
503	503	1 shapes, new qualities, or new combinations. For purposes
504	504	2 of this subsection (e) the term "mining" shall have the
505	505	3 same meaning as the term "mining" in Section 613(c) of the
506	506	4 Internal Revenue Code. For purposes of this subsection
507	507	5 (e), the term "retailing" means the sale of tangible
508	508	6 personal property for use or consumption and not for
509	509	7 resale, or services rendered in conjunction with the sale
510	510	8 of tangible personal property for use or consumption and
511	511	9 not for resale. For purposes of this subsection (e),
512	512	10 "tangible personal property" has the same meaning as when
513	513	11 that term is used in the Retailers' Occupation Tax Act,
514	514	12 and, for taxable years ending after December 31, 2008,
515	515	13 does not include the generation, transmission, or
516	516	14 distribution of electricity.
517	517	15 (4) The basis of qualified property shall be the basis
518	518	16 used to compute the depreciation deduction for federal
519	519	17 income tax purposes.
520	520	18 (5) If the basis of the property for federal income
521	521	19 tax depreciation purposes is increased after it has been
522	522	20 placed in service in Illinois by the taxpayer, the amount
523	523	21 of such increase shall be deemed property placed in
524	524	22 service on the date of such increase in basis.
525	525	23 (6) The term "placed in service" shall have the same
526	526	24 meaning as under Section 46 of the Internal Revenue Code.
527	527	25 (7) If during any taxable year, any property ceases to
528	528	26 be qualified property in the hands of the taxpayer within
529	529
530	530
531	531
532	532
533	533
534	534	HB4157 - 14 - LRB103 33557 HLH 63369 b
535	535
536	536
537	537	HB4157- 15 -LRB103 33557 HLH 63369 b HB4157 - 15 - LRB103 33557 HLH 63369 b
538	538	HB4157 - 15 - LRB103 33557 HLH 63369 b
539	539	1 48 months after being placed in service, or the situs of
540	540	2 any qualified property is moved outside Illinois within 48
541	541	3 months after being placed in service, the Personal
542	542	4 Property Tax Replacement Income Tax for such taxable year
543	543	5 shall be increased. Such increase shall be determined by
544	544	6 (i) recomputing the investment credit which would have
545	545	7 been allowed for the year in which credit for such
546	546	8 property was originally allowed by eliminating such
547	547	9 property from such computation and, (ii) subtracting such
548	548	10 recomputed credit from the amount of credit previously
549	549	11 allowed. For the purposes of this paragraph (7), a
550	550	12 reduction of the basis of qualified property resulting
551	551	13 from a redetermination of the purchase price shall be
552	552	14 deemed a disposition of qualified property to the extent
553	553	15 of such reduction.
554	554	16 (8) Unless the investment credit is extended by law,
555	555	17 the basis of qualified property shall not include costs
556	556	18 incurred after December 31, 2018, except for costs
557	557	19 incurred pursuant to a binding contract entered into on or
558	558	20 before December 31, 2018.
559	559	21 (9) Each taxable year ending before December 31, 2000,
560	560	22 a partnership may elect to pass through to its partners
561	561	23 the credits to which the partnership is entitled under
562	562	24 this subsection (e) for the taxable year. A partner may
563	563	25 use the credit allocated to him or her under this
564	564	26 paragraph only against the tax imposed in subsections (c)
565	565
566	566
567	567
568	568
569	569
570	570	HB4157 - 15 - LRB103 33557 HLH 63369 b
571	571
572	572
573	573	HB4157- 16 -LRB103 33557 HLH 63369 b HB4157 - 16 - LRB103 33557 HLH 63369 b
574	574	HB4157 - 16 - LRB103 33557 HLH 63369 b
575	575	1 and (d) of this Section. If the partnership makes that
576	576	2 election, those credits shall be allocated among the
577	577	3 partners in the partnership in accordance with the rules
578	578	4 set forth in Section 704(b) of the Internal Revenue Code,
579	579	5 and the rules promulgated under that Section, and the
580	580	6 allocated amount of the credits shall be allowed to the
581	581	7 partners for that taxable year. The partnership shall make
582	582	8 this election on its Personal Property Tax Replacement
583	583	9 Income Tax return for that taxable year. The election to
584	584	10 pass through the credits shall be irrevocable.
585	585	11 For taxable years ending on or after December 31,
586	586	12 2000, a partner that qualifies its partnership for a
587	587	13 subtraction under subparagraph (I) of paragraph (2) of
588	588	14 subsection (d) of Section 203 or a shareholder that
589	589	15 qualifies a Subchapter S corporation for a subtraction
590	590	16 under subparagraph (S) of paragraph (2) of subsection (b)
591	591	17 of Section 203 shall be allowed a credit under this
592	592	18 subsection (e) equal to its share of the credit earned
593	593	19 under this subsection (e) during the taxable year by the
594	594	20 partnership or Subchapter S corporation, determined in
595	595	21 accordance with the determination of income and
596	596	22 distributive share of income under Sections 702 and 704
597	597	23 and Subchapter S of the Internal Revenue Code. This
598	598	24 paragraph is exempt from the provisions of Section 250.
599	599	25 (f) Investment credit; Enterprise Zone; River Edge
600	600	26 Redevelopment Zone.
601	601
602	602
603	603
604	604
605	605
606	606	HB4157 - 16 - LRB103 33557 HLH 63369 b
607	607
608	608
609	609	HB4157- 17 -LRB103 33557 HLH 63369 b HB4157 - 17 - LRB103 33557 HLH 63369 b
610	610	HB4157 - 17 - LRB103 33557 HLH 63369 b
611	611	1 (1) A taxpayer shall be allowed a credit against the
612	612	2 tax imposed by subsections (a) and (b) of this Section for
613	613	3 investment in qualified property which is placed in
614	614	4 service in an Enterprise Zone created pursuant to the
615	615	5 Illinois Enterprise Zone Act or, for property placed in
616	616	6 service on or after July 1, 2006, a River Edge
617	617	7 Redevelopment Zone established pursuant to the River Edge
618	618	8 Redevelopment Zone Act. For partners, shareholders of
619	619	9 Subchapter S corporations, and owners of limited liability
620	620	10 companies, if the liability company is treated as a
621	621	11 partnership for purposes of federal and State income
622	622	12 taxation, there shall be allowed a credit under this
623	623	13 subsection (f) to be determined in accordance with the
624	624	14 determination of income and distributive share of income
625	625	15 under Sections 702 and 704 and Subchapter S of the
626	626	16 Internal Revenue Code. The credit shall be .5% of the
627	627	17 basis for such property. The credit shall be available
628	628	18 only in the taxable year in which the property is placed in
629	629	19 service in the Enterprise Zone or River Edge Redevelopment
630	630	20 Zone and shall not be allowed to the extent that it would
631	631	21 reduce a taxpayer's liability for the tax imposed by
632	632	22 subsections (a) and (b) of this Section to below zero. For
633	633	23 tax years ending on or after December 31, 1985, the credit
634	634	24 shall be allowed for the tax year in which the property is
635	635	25 placed in service, or, if the amount of the credit exceeds
636	636	26 the tax liability for that year, whether it exceeds the
637	637
638	638
639	639
640	640
641	641
642	642	HB4157 - 17 - LRB103 33557 HLH 63369 b
643	643
644	644
645	645	HB4157- 18 -LRB103 33557 HLH 63369 b HB4157 - 18 - LRB103 33557 HLH 63369 b
646	646	HB4157 - 18 - LRB103 33557 HLH 63369 b
647	647	1 original liability or the liability as later amended, such
648	648	2 excess may be carried forward and applied to the tax
649	649	3 liability of the 5 taxable years following the excess
650	650	4 credit year. The credit shall be applied to the earliest
651	651	5 year for which there is a liability. If there is credit
652	652	6 from more than one tax year that is available to offset a
653	653	7 liability, the credit accruing first in time shall be
654	654	8 applied first.
655	655	9 (2) The term qualified property means property which:
656	656	10 (A) is tangible, whether new or used, including
657	657	11 buildings and structural components of buildings;
658	658	12 (B) is depreciable pursuant to Section 167 of the
659	659	13 Internal Revenue Code, except that "3-year property"
660	660	14 as defined in Section 168(c)(2)(A) of that Code is not
661	661	15 eligible for the credit provided by this subsection
662	662	16 (f);
663	663	17 (C) is acquired by purchase as defined in Section
664	664	18 179(d) of the Internal Revenue Code;
665	665	19 (D) is used in the Enterprise Zone or River Edge
666	666	20 Redevelopment Zone by the taxpayer; and
667	667	21 (E) has not been previously used in Illinois in
668	668	22 such a manner and by such a person as would qualify for
669	669	23 the credit provided by this subsection (f) or
670	670	24 subsection (e).
671	671	25 (3) The basis of qualified property shall be the basis
672	672	26 used to compute the depreciation deduction for federal
673	673
674	674
675	675
676	676
677	677
678	678	HB4157 - 18 - LRB103 33557 HLH 63369 b
679	679
680	680
681	681	HB4157- 19 -LRB103 33557 HLH 63369 b HB4157 - 19 - LRB103 33557 HLH 63369 b
682	682	HB4157 - 19 - LRB103 33557 HLH 63369 b
683	683	1 income tax purposes.
684	684	2 (4) If the basis of the property for federal income
685	685	3 tax depreciation purposes is increased after it has been
686	686	4 placed in service in the Enterprise Zone or River Edge
687	687	5 Redevelopment Zone by the taxpayer, the amount of such
688	688	6 increase shall be deemed property placed in service on the
689	689	7 date of such increase in basis.
690	690	8 (5) The term "placed in service" shall have the same
691	691	9 meaning as under Section 46 of the Internal Revenue Code.
692	692	10 (6) If during any taxable year, any property ceases to
693	693	11 be qualified property in the hands of the taxpayer within
694	694	12 48 months after being placed in service, or the situs of
695	695	13 any qualified property is moved outside the Enterprise
696	696	14 Zone or River Edge Redevelopment Zone within 48 months
697	697	15 after being placed in service, the tax imposed under
698	698	16 subsections (a) and (b) of this Section for such taxable
699	699	17 year shall be increased. Such increase shall be determined
700	700	18 by (i) recomputing the investment credit which would have
701	701	19 been allowed for the year in which credit for such
702	702	20 property was originally allowed by eliminating such
703	703	21 property from such computation, and (ii) subtracting such
704	704	22 recomputed credit from the amount of credit previously
705	705	23 allowed. For the purposes of this paragraph (6), a
706	706	24 reduction of the basis of qualified property resulting
707	707	25 from a redetermination of the purchase price shall be
708	708	26 deemed a disposition of qualified property to the extent
709	709
710	710
711	711
712	712
713	713
714	714	HB4157 - 19 - LRB103 33557 HLH 63369 b
715	715
716	716
717	717	HB4157- 20 -LRB103 33557 HLH 63369 b HB4157 - 20 - LRB103 33557 HLH 63369 b
718	718	HB4157 - 20 - LRB103 33557 HLH 63369 b
719	719	1 of such reduction.
720	720	2 (7) There shall be allowed an additional credit equal
721	721	3 to 0.5% of the basis of qualified property placed in
722	722	4 service during the taxable year in a River Edge
723	723	5 Redevelopment Zone, provided such property is placed in
724	724	6 service on or after July 1, 2006, and the taxpayer's base
725	725	7 employment within Illinois has increased by 1% or more
726	726	8 over the preceding year as determined by the taxpayer's
727	727	9 employment records filed with the Illinois Department of
728	728	10 Employment Security. Taxpayers who are new to Illinois
729	729	11 shall be deemed to have met the 1% growth in base
730	730	12 employment for the first year in which they file
731	731	13 employment records with the Illinois Department of
732	732	14 Employment Security. If, in any year, the increase in base
733	733	15 employment within Illinois over the preceding year is less
734	734	16 than 1%, the additional credit shall be limited to that
735	735	17 percentage times a fraction, the numerator of which is
736	736	18 0.5% and the denominator of which is 1%, but shall not
737	737	19 exceed 0.5%.
738	738	20 (8) For taxable years beginning on or after January 1,
739	739	21 2021, there shall be allowed an Enterprise Zone
740	740	22 construction jobs credit against the taxes imposed under
741	741	23 subsections (a) and (b) of this Section as provided in
742	742	24 Section 13 of the Illinois Enterprise Zone Act.
743	743	25 The credit or credits may not reduce the taxpayer's
744	744	26 liability to less than zero. If the amount of the credit or
745	745
746	746
747	747
748	748
749	749
750	750	HB4157 - 20 - LRB103 33557 HLH 63369 b
751	751
752	752
753	753	HB4157- 21 -LRB103 33557 HLH 63369 b HB4157 - 21 - LRB103 33557 HLH 63369 b
754	754	HB4157 - 21 - LRB103 33557 HLH 63369 b
755	755	1 credits exceeds the taxpayer's liability, the excess may
756	756	2 be carried forward and applied against the taxpayer's
757	757	3 liability in succeeding calendar years in the same manner
758	758	4 provided under paragraph (4) of Section 211 of this Act.
759	759	5 The credit or credits shall be applied to the earliest
760	760	6 year for which there is a tax liability. If there are
761	761	7 credits from more than one taxable year that are available
762	762	8 to offset a liability, the earlier credit shall be applied
763	763	9 first.
764	764	10 For partners, shareholders of Subchapter S
765	765	11 corporations, and owners of limited liability companies,
766	766	12 if the liability company is treated as a partnership for
767	767	13 the purposes of federal and State income taxation, there
768	768	14 shall be allowed a credit under this Section to be
769	769	15 determined in accordance with the determination of income
770	770	16 and distributive share of income under Sections 702 and
771	771	17 704 and Subchapter S of the Internal Revenue Code.
772	772	18 The total aggregate amount of credits awarded under
773	773	19 the Blue Collar Jobs Act (Article 20 of Public Act 101-9)
774	774	20 shall not exceed $20,000,000 in any State fiscal year.
775	775	21 This paragraph (8) is exempt from the provisions of
776	776	22 Section 250.
777	777	23 (g) (Blank).
778	778	24 (h) Investment credit; High Impact Business.
779	779	25 (1) Subject to subsections (b) and (b-5) of Section
780	780	26 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall
781	781
782	782
783	783
784	784
785	785
786	786	HB4157 - 21 - LRB103 33557 HLH 63369 b
787	787
788	788
789	789	HB4157- 22 -LRB103 33557 HLH 63369 b HB4157 - 22 - LRB103 33557 HLH 63369 b
790	790	HB4157 - 22 - LRB103 33557 HLH 63369 b
791	791	1 be allowed a credit against the tax imposed by subsections
792	792	2 (a) and (b) of this Section for investment in qualified
793	793	3 property which is placed in service by a Department of
794	794	4 Commerce and Economic Opportunity designated High Impact
795	795	5 Business. The credit shall be .5% of the basis for such
796	796	6 property. The credit shall not be available (i) until the
797	797	7 minimum investments in qualified property set forth in
798	798	8 subdivision (a)(3)(A) of Section 5.5 of the Illinois
799	799	9 Enterprise Zone Act have been satisfied or (ii) until the
800	800	10 time authorized in subsection (b-5) of the Illinois
801	801	11 Enterprise Zone Act for entities designated as High Impact
802	802	12 Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
803	803	13 (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
804	804	14 Act, and shall not be allowed to the extent that it would
805	805	15 reduce a taxpayer's liability for the tax imposed by
806	806	16 subsections (a) and (b) of this Section to below zero. The
807	807	17 credit applicable to such investments shall be taken in
808	808	18 the taxable year in which such investments have been
809	809	19 completed. The credit for additional investments beyond
810	810	20 the minimum investment by a designated high impact
811	811	21 business authorized under subdivision (a)(3)(A) of Section
812	812	22 5.5 of the Illinois Enterprise Zone Act shall be available
813	813	23 only in the taxable year in which the property is placed in
814	814	24 service and shall not be allowed to the extent that it
815	815	25 would reduce a taxpayer's liability for the tax imposed by
816	816	26 subsections (a) and (b) of this Section to below zero. For
817	817
818	818
819	819
820	820
821	821
822	822	HB4157 - 22 - LRB103 33557 HLH 63369 b
823	823
824	824
825	825	HB4157- 23 -LRB103 33557 HLH 63369 b HB4157 - 23 - LRB103 33557 HLH 63369 b
826	826	HB4157 - 23 - LRB103 33557 HLH 63369 b
827	827	1 tax years ending on or after December 31, 1987, the credit
828	828	2 shall be allowed for the tax year in which the property is
829	829	3 placed in service, or, if the amount of the credit exceeds
830	830	4 the tax liability for that year, whether it exceeds the
831	831	5 original liability or the liability as later amended, such
832	832	6 excess may be carried forward and applied to the tax
833	833	7 liability of the 5 taxable years following the excess
834	834	8 credit year. The credit shall be applied to the earliest
835	835	9 year for which there is a liability. If there is credit
836	836	10 from more than one tax year that is available to offset a
837	837	11 liability, the credit accruing first in time shall be
838	838	12 applied first.
839	839	13 Changes made in this subdivision (h)(1) by Public Act
840	840	14 88-670 restore changes made by Public Act 85-1182 and
841	841	15 reflect existing law.
842	842	16 (2) The term qualified property means property which:
843	843	17 (A) is tangible, whether new or used, including
844	844	18 buildings and structural components of buildings;
845	845	19 (B) is depreciable pursuant to Section 167 of the
846	846	20 Internal Revenue Code, except that "3-year property"
847	847	21 as defined in Section 168(c)(2)(A) of that Code is not
848	848	22 eligible for the credit provided by this subsection
849	849	23 (h);
850	850	24 (C) is acquired by purchase as defined in Section
851	851	25 179(d) of the Internal Revenue Code; and
852	852	26 (D) is not eligible for the Enterprise Zone
853	853
854	854
855	855
856	856
857	857
858	858	HB4157 - 23 - LRB103 33557 HLH 63369 b
859	859
860	860
861	861	HB4157- 24 -LRB103 33557 HLH 63369 b HB4157 - 24 - LRB103 33557 HLH 63369 b
862	862	HB4157 - 24 - LRB103 33557 HLH 63369 b
863	863	1 Investment Credit provided by subsection (f) of this
864	864	2 Section.
865	865	3 (3) The basis of qualified property shall be the basis
866	866	4 used to compute the depreciation deduction for federal
867	867	5 income tax purposes.
868	868	6 (4) If the basis of the property for federal income
869	869	7 tax depreciation purposes is increased after it has been
870	870	8 placed in service in a federally designated Foreign Trade
871	871	9 Zone or Sub-Zone located in Illinois by the taxpayer, the
872	872	10 amount of such increase shall be deemed property placed in
873	873	11 service on the date of such increase in basis.
874	874	12 (5) The term "placed in service" shall have the same
875	875	13 meaning as under Section 46 of the Internal Revenue Code.
876	876	14 (6) If during any taxable year ending on or before
877	877	15 December 31, 1996, any property ceases to be qualified
878	878	16 property in the hands of the taxpayer within 48 months
879	879	17 after being placed in service, or the situs of any
880	880	18 qualified property is moved outside Illinois within 48
881	881	19 months after being placed in service, the tax imposed
882	882	20 under subsections (a) and (b) of this Section for such
883	883	21 taxable year shall be increased. Such increase shall be
884	884	22 determined by (i) recomputing the investment credit which
885	885	23 would have been allowed for the year in which credit for
886	886	24 such property was originally allowed by eliminating such
887	887	25 property from such computation, and (ii) subtracting such
888	888	26 recomputed credit from the amount of credit previously
889	889
890	890
891	891
892	892
893	893
894	894	HB4157 - 24 - LRB103 33557 HLH 63369 b
895	895
896	896
897	897	HB4157- 25 -LRB103 33557 HLH 63369 b HB4157 - 25 - LRB103 33557 HLH 63369 b
898	898	HB4157 - 25 - LRB103 33557 HLH 63369 b
899	899	1 allowed. For the purposes of this paragraph (6), a
900	900	2 reduction of the basis of qualified property resulting
901	901	3 from a redetermination of the purchase price shall be
902	902	4 deemed a disposition of qualified property to the extent
903	903	5 of such reduction.
904	904	6 (7) Beginning with tax years ending after December 31,
905	905	7 1996, if a taxpayer qualifies for the credit under this
906	906	8 subsection (h) and thereby is granted a tax abatement and
907	907	9 the taxpayer relocates its entire facility in violation of
908	908	10 the explicit terms and length of the contract under
909	909	11 Section 18-183 of the Property Tax Code, the tax imposed
910	910	12 under subsections (a) and (b) of this Section shall be
911	911	13 increased for the taxable year in which the taxpayer
912	912	14 relocated its facility by an amount equal to the amount of
913	913	15 credit received by the taxpayer under this subsection (h).
914	914	16 (h-5) High Impact Business construction jobs credit. For
915	915	17 taxable years beginning on or after January 1, 2021, there
916	916	18 shall also be allowed a High Impact Business construction jobs
917	917	19 credit against the tax imposed under subsections (a) and (b)
918	918	20 of this Section as provided in subsections (i) and (j) of
919	919	21 Section 5.5 of the Illinois Enterprise Zone Act.
920	920	22 The credit or credits may not reduce the taxpayer's
921	921	23 liability to less than zero. If the amount of the credit or
922	922	24 credits exceeds the taxpayer's liability, the excess may be
923	923	25 carried forward and applied against the taxpayer's liability
924	924	26 in succeeding calendar years in the manner provided under
925	925
926	926
927	927
928	928
929	929
930	930	HB4157 - 25 - LRB103 33557 HLH 63369 b
931	931
932	932
933	933	HB4157- 26 -LRB103 33557 HLH 63369 b HB4157 - 26 - LRB103 33557 HLH 63369 b
934	934	HB4157 - 26 - LRB103 33557 HLH 63369 b
935	935	1 paragraph (4) of Section 211 of this Act. The credit or credits
936	936	2 shall be applied to the earliest year for which there is a tax
937	937	3 liability. If there are credits from more than one taxable
938	938	4 year that are available to offset a liability, the earlier
939	939	5 credit shall be applied first.
940	940	6 For partners, shareholders of Subchapter S corporations,
941	941	7 and owners of limited liability companies, if the liability
942	942	8 company is treated as a partnership for the purposes of
943	943	9 federal and State income taxation, there shall be allowed a
944	944	10 credit under this Section to be determined in accordance with
945	945	11 the determination of income and distributive share of income
946	946	12 under Sections 702 and 704 and Subchapter S of the Internal
947	947	13 Revenue Code.
948	948	14 The total aggregate amount of credits awarded under the
949	949	15 Blue Collar Jobs Act (Article 20 of Public Act 101-9) shall not
950	950	16 exceed $20,000,000 in any State fiscal year.
951	951	17 This subsection (h-5) is exempt from the provisions of
952	952	18 Section 250.
953	953	19 (i) Credit for Personal Property Tax Replacement Income
954	954	20 Tax. For tax years ending prior to December 31, 2003, a credit
955	955	21 shall be allowed against the tax imposed by subsections (a)
956	956	22 and (b) of this Section for the tax imposed by subsections (c)
957	957	23 and (d) of this Section. This credit shall be computed by
958	958	24 multiplying the tax imposed by subsections (c) and (d) of this
959	959	25 Section by a fraction, the numerator of which is base income
960	960	26 allocable to Illinois and the denominator of which is Illinois
961	961
962	962
963	963
964	964
965	965
966	966	HB4157 - 26 - LRB103 33557 HLH 63369 b
967	967
968	968
969	969	HB4157- 27 -LRB103 33557 HLH 63369 b HB4157 - 27 - LRB103 33557 HLH 63369 b
970	970	HB4157 - 27 - LRB103 33557 HLH 63369 b
971	971	1 base income, and further multiplying the product by the tax
972	972	2 rate imposed by subsections (a) and (b) of this Section.
973	973	3 Any credit earned on or after December 31, 1986 under this
974	974	4 subsection which is unused in the year the credit is computed
975	975	5 because it exceeds the tax liability imposed by subsections
976	976	6 (a) and (b) for that year (whether it exceeds the original
977	977	7 liability or the liability as later amended) may be carried
978	978	8 forward and applied to the tax liability imposed by
979	979	9 subsections (a) and (b) of the 5 taxable years following the
980	980	10 excess credit year, provided that no credit may be carried
981	981	11 forward to any year ending on or after December 31, 2003. This
982	982	12 credit shall be applied first to the earliest year for which
983	983	13 there is a liability. If there is a credit under this
984	984	14 subsection from more than one tax year that is available to
985	985	15 offset a liability the earliest credit arising under this
986	986	16 subsection shall be applied first.
987	987	17 If, during any taxable year ending on or after December
988	988	18 31, 1986, the tax imposed by subsections (c) and (d) of this
989	989	19 Section for which a taxpayer has claimed a credit under this
990	990	20 subsection (i) is reduced, the amount of credit for such tax
991	991	21 shall also be reduced. Such reduction shall be determined by
992	992	22 recomputing the credit to take into account the reduced tax
993	993	23 imposed by subsections (c) and (d). If any portion of the
994	994	24 reduced amount of credit has been carried to a different
995	995	25 taxable year, an amended return shall be filed for such
996	996	26 taxable year to reduce the amount of credit claimed.
997	997
998	998
999	999
1000	1000
1001	1001
1002	1002	HB4157 - 27 - LRB103 33557 HLH 63369 b
1003	1003
1004	1004
1005	1005	HB4157- 28 -LRB103 33557 HLH 63369 b HB4157 - 28 - LRB103 33557 HLH 63369 b
1006	1006	HB4157 - 28 - LRB103 33557 HLH 63369 b
1007	1007	1 (j) Training expense credit. Beginning with tax years
1008	1008	2 ending on or after December 31, 1986 and prior to December 31,
1009	1009	3 2003, a taxpayer shall be allowed a credit against the tax
1010	1010	4 imposed by subsections (a) and (b) under this Section for all
1011	1011	5 amounts paid or accrued, on behalf of all persons employed by
1012	1012	6 the taxpayer in Illinois or Illinois residents employed
1013	1013	7 outside of Illinois by a taxpayer, for educational or
1014	1014	8 vocational training in semi-technical or technical fields or
1015	1015	9 semi-skilled or skilled fields, which were deducted from gross
1016	1016	10 income in the computation of taxable income. The credit
1017	1017	11 against the tax imposed by subsections (a) and (b) shall be
1018	1018	12 1.6% of such training expenses. For partners, shareholders of
1019	1019	13 subchapter S corporations, and owners of limited liability
1020	1020	14 companies, if the liability company is treated as a
1021	1021	15 partnership for purposes of federal and State income taxation,
1022	1022	16 there shall be allowed a credit under this subsection (j) to be
1023	1023	17 determined in accordance with the determination of income and
1024	1024	18 distributive share of income under Sections 702 and 704 and
1025	1025	19 subchapter S of the Internal Revenue Code.
1026	1026	20 Any credit allowed under this subsection which is unused
1027	1027	21 in the year the credit is earned may be carried forward to each
1028	1028	22 of the 5 taxable years following the year for which the credit
1029	1029	23 is first computed until it is used. This credit shall be
1030	1030	24 applied first to the earliest year for which there is a
1031	1031	25 liability. If there is a credit under this subsection from
1032	1032	26 more than one tax year that is available to offset a liability,
1033	1033
1034	1034
1035	1035
1036	1036
1037	1037
1038	1038	HB4157 - 28 - LRB103 33557 HLH 63369 b
1039	1039
1040	1040
1041	1041	HB4157- 29 -LRB103 33557 HLH 63369 b HB4157 - 29 - LRB103 33557 HLH 63369 b
1042	1042	HB4157 - 29 - LRB103 33557 HLH 63369 b
1043	1043	1 the earliest credit arising under this subsection shall be
1044	1044	2 applied first. No carryforward credit may be claimed in any
1045	1045	3 tax year ending on or after December 31, 2003.
1046	1046	4 (k) Research and development credit. For tax years ending
1047	1047	5 after July 1, 1990 and prior to December 31, 2003, and
1048	1048	6 beginning again for tax years ending on or after December 31,
1049	1049	7 2004, and ending prior to January 1, 2027, a taxpayer shall be
1050	1050	8 allowed a credit against the tax imposed by subsections (a)
1051	1051	9 and (b) of this Section for increasing research activities in
1052	1052	10 this State. The credit allowed against the tax imposed by
1053	1053	11 subsections (a) and (b) shall be equal to 6 1/2% of the
1054	1054	12 qualifying expenditures for increasing research activities in
1055	1055	13 this State. For partners, shareholders of subchapter S
1056	1056	14 corporations, and owners of limited liability companies, if
1057	1057	15 the liability company is treated as a partnership for purposes
1058	1058	16 of federal and State income taxation, there shall be allowed a
1059	1059	17 credit under this subsection to be determined in accordance
1060	1060	18 with the determination of income and distributive share of
1061	1061	19 income under Sections 702 and 704 and subchapter S of the
1062	1062	20 Internal Revenue Code.
1063	1063	21 For purposes of this subsection, "qualifying expenditures"
1064	1064	22 means the qualifying expenditures as defined for the federal
1065	1065	23 credit for increasing research activities which would be
1066	1066	24 allowable under Section 41 of the Internal Revenue Code and
1067	1067	25 which are conducted in this State, "qualifying expenditures
1068	1068	26 for increasing research activities in this State" means the
1069	1069
1070	1070
1071	1071
1072	1072
1073	1073
1074	1074	HB4157 - 29 - LRB103 33557 HLH 63369 b
1075	1075
1076	1076
1077	1077	HB4157- 30 -LRB103 33557 HLH 63369 b HB4157 - 30 - LRB103 33557 HLH 63369 b
1078	1078	HB4157 - 30 - LRB103 33557 HLH 63369 b
1079	1079	1 excess of qualifying expenditures for the taxable year in
1080	1080	2 which incurred over qualifying expenditures for the base
1081	1081	3 period, "qualifying expenditures for the base period" means
1082	1082	4 the average of the qualifying expenditures for each year in
1083	1083	5 the base period, and "base period" means the 3 taxable years
1084	1084	6 immediately preceding the taxable year for which the
1085	1085	7 determination is being made.
1086	1086	8 Any credit in excess of the tax liability for the taxable
1087	1087	9 year may be carried forward. A taxpayer may elect to have the
1088	1088	10 unused credit shown on its final completed return carried over
1089	1089	11 as a credit against the tax liability for the following 5
1090	1090	12 taxable years or until it has been fully used, whichever
1091	1091	13 occurs first; provided that no credit earned in a tax year
1092	1092	14 ending prior to December 31, 2003 may be carried forward to any
1093	1093	15 year ending on or after December 31, 2003.
1094	1094	16 If an unused credit is carried forward to a given year from
1095	1095	17 2 or more earlier years, that credit arising in the earliest
1096	1096	18 year will be applied first against the tax liability for the
1097	1097	19 given year. If a tax liability for the given year still
1098	1098	20 remains, the credit from the next earliest year will then be
1099	1099	21 applied, and so on, until all credits have been used or no tax
1100	1100	22 liability for the given year remains. Any remaining unused
1101	1101	23 credit or credits then will be carried forward to the next
1102	1102	24 following year in which a tax liability is incurred, except
1103	1103	25 that no credit can be carried forward to a year which is more
1104	1104	26 than 5 years after the year in which the expense for which the
1105	1105
1106	1106
1107	1107
1108	1108
1109	1109
1110	1110	HB4157 - 30 - LRB103 33557 HLH 63369 b
1111	1111
1112	1112
1113	1113	HB4157- 31 -LRB103 33557 HLH 63369 b HB4157 - 31 - LRB103 33557 HLH 63369 b
1114	1114	HB4157 - 31 - LRB103 33557 HLH 63369 b
1115	1115	1 credit is given was incurred.
1116	1116	2 No inference shall be drawn from Public Act 91-644 in
1117	1117	3 construing this Section for taxable years beginning before
1118	1118	4 January 1, 1999.
1119	1119	5 It is the intent of the General Assembly that the research
1120	1120	6 and development credit under this subsection (k) shall apply
1121	1121	7 continuously for all tax years ending on or after December 31,
1122	1122	8 2004 and ending prior to January 1, 2027, including, but not
1123	1123	9 limited to, the period beginning on January 1, 2016 and ending
1124	1124	10 on July 6, 2017 (the effective date of Public Act 100-22). All
1125	1125	11 actions taken in reliance on the continuation of the credit
1126	1126	12 under this subsection (k) by any taxpayer are hereby
1127	1127	13 validated.
1128	1128	14 (l) Environmental Remediation Tax Credit.
1129	1129	15 (i) For tax years ending after December 31, 1997 and
1130	1130	16 on or before December 31, 2001, a taxpayer shall be
1131	1131	17 allowed a credit against the tax imposed by subsections
1132	1132	18 (a) and (b) of this Section for certain amounts paid for
1133	1133	19 unreimbursed eligible remediation costs, as specified in
1134	1134	20 this subsection. For purposes of this Section,
1135	1135	21 "unreimbursed eligible remediation costs" means costs
1136	1136	22 approved by the Illinois Environmental Protection Agency
1137	1137	23 ("Agency") under Section 58.14 of the Environmental
1138	1138	24 Protection Act that were paid in performing environmental
1139	1139	25 remediation at a site for which a No Further Remediation
1140	1140	26 Letter was issued by the Agency and recorded under Section
1141	1141
1142	1142
1143	1143
1144	1144
1145	1145
1146	1146	HB4157 - 31 - LRB103 33557 HLH 63369 b
1147	1147
1148	1148
1149	1149	HB4157- 32 -LRB103 33557 HLH 63369 b HB4157 - 32 - LRB103 33557 HLH 63369 b
1150	1150	HB4157 - 32 - LRB103 33557 HLH 63369 b
1151	1151	1 58.10 of the Environmental Protection Act. The credit must
1152	1152	2 be claimed for the taxable year in which Agency approval
1153	1153	3 of the eligible remediation costs is granted. The credit
1154	1154	4 is not available to any taxpayer if the taxpayer or any
1155	1155	5 related party caused or contributed to, in any material
1156	1156	6 respect, a release of regulated substances on, in, or
1157	1157	7 under the site that was identified and addressed by the
1158	1158	8 remedial action pursuant to the Site Remediation Program
1159	1159	9 of the Environmental Protection Act. After the Pollution
1160	1160	10 Control Board rules are adopted pursuant to the Illinois
1161	1161	11 Administrative Procedure Act for the administration and
1162	1162	12 enforcement of Section 58.9 of the Environmental
1163	1163	13 Protection Act, determinations as to credit availability
1164	1164	14 for purposes of this Section shall be made consistent with
1165	1165	15 those rules. For purposes of this Section, "taxpayer"
1166	1166	16 includes a person whose tax attributes the taxpayer has
1167	1167	17 succeeded to under Section 381 of the Internal Revenue
1168	1168	18 Code and "related party" includes the persons disallowed a
1169	1169	19 deduction for losses by paragraphs (b), (c), and (f)(1) of
1170	1170	20 Section 267 of the Internal Revenue Code by virtue of
1171	1171	21 being a related taxpayer, as well as any of its partners.
1172	1172	22 The credit allowed against the tax imposed by subsections
1173	1173	23 (a) and (b) shall be equal to 25% of the unreimbursed
1174	1174	24 eligible remediation costs in excess of $100,000 per site,
1175	1175	25 except that the $100,000 threshold shall not apply to any
1176	1176	26 site contained in an enterprise zone as determined by the
1177	1177
1178	1178
1179	1179
1180	1180
1181	1181
1182	1182	HB4157 - 32 - LRB103 33557 HLH 63369 b
1183	1183
1184	1184
1185	1185	HB4157- 33 -LRB103 33557 HLH 63369 b HB4157 - 33 - LRB103 33557 HLH 63369 b
1186	1186	HB4157 - 33 - LRB103 33557 HLH 63369 b
1187	1187	1 Department of Commerce and Community Affairs (now
1188	1188	2 Department of Commerce and Economic Opportunity). The
1189	1189	3 total credit allowed shall not exceed $40,000 per year
1190	1190	4 with a maximum total of $150,000 per site. For partners
1191	1191	5 and shareholders of subchapter S corporations, there shall
1192	1192	6 be allowed a credit under this subsection to be determined
1193	1193	7 in accordance with the determination of income and
1194	1194	8 distributive share of income under Sections 702 and 704
1195	1195	9 and subchapter S of the Internal Revenue Code.
1196	1196	10 (ii) A credit allowed under this subsection that is
1197	1197	11 unused in the year the credit is earned may be carried
1198	1198	12 forward to each of the 5 taxable years following the year
1199	1199	13 for which the credit is first earned until it is used. The
1200	1200	14 term "unused credit" does not include any amounts of
1201	1201	15 unreimbursed eligible remediation costs in excess of the
1202	1202	16 maximum credit per site authorized under paragraph (i).
1203	1203	17 This credit shall be applied first to the earliest year
1204	1204	18 for which there is a liability. If there is a credit under
1205	1205	19 this subsection from more than one tax year that is
1206	1206	20 available to offset a liability, the earliest credit
1207	1207	21 arising under this subsection shall be applied first. A
1208	1208	22 credit allowed under this subsection may be sold to a
1209	1209	23 buyer as part of a sale of all or part of the remediation
1210	1210	24 site for which the credit was granted. The purchaser of a
1211	1211	25 remediation site and the tax credit shall succeed to the
1212	1212	26 unused credit and remaining carry-forward period of the
1213	1213
1214	1214
1215	1215
1216	1216
1217	1217
1218	1218	HB4157 - 33 - LRB103 33557 HLH 63369 b
1219	1219
1220	1220
1221	1221	HB4157- 34 -LRB103 33557 HLH 63369 b HB4157 - 34 - LRB103 33557 HLH 63369 b
1222	1222	HB4157 - 34 - LRB103 33557 HLH 63369 b
1223	1223	1 seller. To perfect the transfer, the assignor shall record
1224	1224	2 the transfer in the chain of title for the site and provide
1225	1225	3 written notice to the Director of the Illinois Department
1226	1226	4 of Revenue of the assignor's intent to sell the
1227	1227	5 remediation site and the amount of the tax credit to be
1228	1228	6 transferred as a portion of the sale. In no event may a
1229	1229	7 credit be transferred to any taxpayer if the taxpayer or a
1230	1230	8 related party would not be eligible under the provisions
1231	1231	9 of subsection (i).
1232	1232	10 (iii) For purposes of this Section, the term "site"
1233	1233	11 shall have the same meaning as under Section 58.2 of the
1234	1234	12 Environmental Protection Act.
1235	1235	13 (m) Education expense credit. Beginning with tax years
1236	1236	14 ending after December 31, 1999, a taxpayer who is the
1237	1237	15 custodian of one or more qualifying pupils shall be allowed a
1238	1238	16 credit against the tax imposed by subsections (a) and (b) of
1239	1239	17 this Section for qualified education expenses incurred on
1240	1240	18 behalf of the qualifying pupils. The credit shall be equal to
1241	1241	19 25% of qualified education expenses, but in no event may the
1242	1242	20 total credit under this subsection claimed by a family that is
1243	1243	21 the custodian of qualifying pupils exceed (i) $500 for tax
1244	1244	22 years ending prior to December 31, 2017, and (ii) $750 for tax
1245	1245	23 years ending on or after December 31, 2017. In no event shall a
1246	1246	24 credit under this subsection reduce the taxpayer's liability
1247	1247	25 under this Act to less than zero. Notwithstanding any other
1248	1248	26 provision of law, for taxable years beginning on or after
1249	1249
1250	1250
1251	1251
1252	1252
1253	1253
1254	1254	HB4157 - 34 - LRB103 33557 HLH 63369 b
1255	1255
1256	1256
1257	1257	HB4157- 35 -LRB103 33557 HLH 63369 b HB4157 - 35 - LRB103 33557 HLH 63369 b
1258	1258	HB4157 - 35 - LRB103 33557 HLH 63369 b
1259	1259	1 January 1, 2017, no taxpayer may claim a credit under this
1260	1260	2 subsection (m) if the taxpayer's adjusted gross income for the
1261	1261	3 taxable year exceeds (i) $500,000, in the case of spouses
1262	1262	4 filing a joint federal tax return or (ii) $250,000, in the case
1263	1263	5 of all other taxpayers. This subsection is exempt from the
1264	1264	6 provisions of Section 250 of this Act.
1265	1265	7 For purposes of this subsection:
1266	1266	8 "Qualifying pupils" means individuals who (i) are
1267	1267	9 residents of the State of Illinois, (ii) are under the age of
1268	1268	10 21 at the close of the school year for which a credit is
1269	1269	11 sought, and (iii) during the school year for which a credit is
1270	1270	12 sought were full-time pupils enrolled in a kindergarten
1271	1271	13 through twelfth grade education program at any school, as
1272	1272	14 defined in this subsection.
1273	1273	15 "Qualified education expense" means the amount incurred on
1274	1274	16 behalf of a qualifying pupil in excess of $250 for tuition,
1275	1275	17 book fees, and lab fees at the school in which the pupil is
1276	1276	18 enrolled during the regular school year.
1277	1277	19 "School" means any public or nonpublic elementary or
1278	1278	20 secondary school in Illinois that is in compliance with Title
1279	1279	21 VI of the Civil Rights Act of 1964 and attendance at which
1280	1280	22 satisfies the requirements of Section 26-1 of the School Code,
1281	1281	23 except that nothing shall be construed to require a child to
1282	1282	24 attend any particular public or nonpublic school to qualify
1283	1283	25 for the credit under this Section.
1284	1284	26 "Custodian" means, with respect to qualifying pupils, an
1285	1285
1286	1286
1287	1287
1288	1288
1289	1289
1290	1290	HB4157 - 35 - LRB103 33557 HLH 63369 b
1291	1291
1292	1292
1293	1293	HB4157- 36 -LRB103 33557 HLH 63369 b HB4157 - 36 - LRB103 33557 HLH 63369 b
1294	1294	HB4157 - 36 - LRB103 33557 HLH 63369 b
1295	1295	1 Illinois resident who is a parent, the parents, a legal
1296	1296	2 guardian, or the legal guardians of the qualifying pupils.
1297	1297	3 (n) River Edge Redevelopment Zone site remediation tax
1298	1298	4 credit.
1299	1299	5 (i) For tax years ending on or after December 31,
1300	1300	6 2006, a taxpayer shall be allowed a credit against the tax
1301	1301	7 imposed by subsections (a) and (b) of this Section for
1302	1302	8 certain amounts paid for unreimbursed eligible remediation
1303	1303	9 costs, as specified in this subsection. For purposes of
1304	1304	10 this Section, "unreimbursed eligible remediation costs"
1305	1305	11 means costs approved by the Illinois Environmental
1306	1306	12 Protection Agency ("Agency") under Section 58.14a of the
1307	1307	13 Environmental Protection Act that were paid in performing
1308	1308	14 environmental remediation at a site within a River Edge
1309	1309	15 Redevelopment Zone for which a No Further Remediation
1310	1310	16 Letter was issued by the Agency and recorded under Section
1311	1311	17 58.10 of the Environmental Protection Act. The credit must
1312	1312	18 be claimed for the taxable year in which Agency approval
1313	1313	19 of the eligible remediation costs is granted. The credit
1314	1314	20 is not available to any taxpayer if the taxpayer or any
1315	1315	21 related party caused or contributed to, in any material
1316	1316	22 respect, a release of regulated substances on, in, or
1317	1317	23 under the site that was identified and addressed by the
1318	1318	24 remedial action pursuant to the Site Remediation Program
1319	1319	25 of the Environmental Protection Act. Determinations as to
1320	1320	26 credit availability for purposes of this Section shall be
1321	1321
1322	1322
1323	1323
1324	1324
1325	1325
1326	1326	HB4157 - 36 - LRB103 33557 HLH 63369 b
1327	1327
1328	1328
1329	1329	HB4157- 37 -LRB103 33557 HLH 63369 b HB4157 - 37 - LRB103 33557 HLH 63369 b
1330	1330	HB4157 - 37 - LRB103 33557 HLH 63369 b
1331	1331	1 made consistent with rules adopted by the Pollution
1332	1332	2 Control Board pursuant to the Illinois Administrative
1333	1333	3 Procedure Act for the administration and enforcement of
1334	1334	4 Section 58.9 of the Environmental Protection Act. For
1335	1335	5 purposes of this Section, "taxpayer" includes a person
1336	1336	6 whose tax attributes the taxpayer has succeeded to under
1337	1337	7 Section 381 of the Internal Revenue Code and "related
1338	1338	8 party" includes the persons disallowed a deduction for
1339	1339	9 losses by paragraphs (b), (c), and (f)(1) of Section 267
1340	1340	10 of the Internal Revenue Code by virtue of being a related
1341	1341	11 taxpayer, as well as any of its partners. The credit
1342	1342	12 allowed against the tax imposed by subsections (a) and (b)
1343	1343	13 shall be equal to 25% of the unreimbursed eligible
1344	1344	14 remediation costs in excess of $100,000 per site.
1345	1345	15 (ii) A credit allowed under this subsection that is
1346	1346	16 unused in the year the credit is earned may be carried
1347	1347	17 forward to each of the 5 taxable years following the year
1348	1348	18 for which the credit is first earned until it is used. This
1349	1349	19 credit shall be applied first to the earliest year for
1350	1350	20 which there is a liability. If there is a credit under this
1351	1351	21 subsection from more than one tax year that is available
1352	1352	22 to offset a liability, the earliest credit arising under
1353	1353	23 this subsection shall be applied first. A credit allowed
1354	1354	24 under this subsection may be sold to a buyer as part of a
1355	1355	25 sale of all or part of the remediation site for which the
1356	1356	26 credit was granted. The purchaser of a remediation site
1357	1357
1358	1358
1359	1359
1360	1360
1361	1361
1362	1362	HB4157 - 37 - LRB103 33557 HLH 63369 b
1363	1363
1364	1364
1365	1365	HB4157- 38 -LRB103 33557 HLH 63369 b HB4157 - 38 - LRB103 33557 HLH 63369 b
1366	1366	HB4157 - 38 - LRB103 33557 HLH 63369 b
1367	1367	1 and the tax credit shall succeed to the unused credit and
1368	1368	2 remaining carry-forward period of the seller. To perfect
1369	1369	3 the transfer, the assignor shall record the transfer in
1370	1370	4 the chain of title for the site and provide written notice
1371	1371	5 to the Director of the Illinois Department of Revenue of
1372	1372	6 the assignor's intent to sell the remediation site and the
1373	1373	7 amount of the tax credit to be transferred as a portion of
1374	1374	8 the sale. In no event may a credit be transferred to any
1375	1375	9 taxpayer if the taxpayer or a related party would not be
1376	1376	10 eligible under the provisions of subsection (i).
1377	1377	11 (iii) For purposes of this Section, the term "site"
1378	1378	12 shall have the same meaning as under Section 58.2 of the
1379	1379	13 Environmental Protection Act.
1380	1380	14 (o) For each of taxable years during the Compassionate Use
1381	1381	15 of Medical Cannabis Program, a surcharge is imposed on all
1382	1382	16 taxpayers on income arising from the sale or exchange of
1383	1383	17 capital assets, depreciable business property, real property
1384	1384	18 used in the trade or business, and Section 197 intangibles of
1385	1385	19 an organization registrant under the Compassionate Use of
1386	1386	20 Medical Cannabis Program Act. The amount of the surcharge is
1387	1387	21 equal to the amount of federal income tax liability for the
1388	1388	22 taxable year attributable to those sales and exchanges. The
1389	1389	23 surcharge imposed does not apply if:
1390	1390	24 (1) the medical cannabis cultivation center
1391	1391	25 registration, medical cannabis dispensary registration, or
1392	1392	26 the property of a registration is transferred as a result
1393	1393
1394	1394
1395	1395
1396	1396
1397	1397
1398	1398	HB4157 - 38 - LRB103 33557 HLH 63369 b
1399	1399
1400	1400
1401	1401	HB4157- 39 -LRB103 33557 HLH 63369 b HB4157 - 39 - LRB103 33557 HLH 63369 b
1402	1402	HB4157 - 39 - LRB103 33557 HLH 63369 b
1403	1403	1 of any of the following:
1404	1404	2 (A) bankruptcy, a receivership, or a debt
1405	1405	3 adjustment initiated by or against the initial
1406	1406	4 registration or the substantial owners of the initial
1407	1407	5 registration;
1408	1408	6 (B) cancellation, revocation, or termination of
1409	1409	7 any registration by the Illinois Department of Public
1410	1410	8 Health;
1411	1411	9 (C) a determination by the Illinois Department of
1412	1412	10 Public Health that transfer of the registration is in
1413	1413	11 the best interests of Illinois qualifying patients as
1414	1414	12 defined by the Compassionate Use of Medical Cannabis
1415	1415	13 Program Act;
1416	1416	14 (D) the death of an owner of the equity interest in
1417	1417	15 a registrant;
1418	1418	16 (E) the acquisition of a controlling interest in
1419	1419	17 the stock or substantially all of the assets of a
1420	1420	18 publicly traded company;
1421	1421	19 (F) a transfer by a parent company to a wholly
1422	1422	20 owned subsidiary; or
1423	1423	21 (G) the transfer or sale to or by one person to
1424	1424	22 another person where both persons were initial owners
1425	1425	23 of the registration when the registration was issued;
1426	1426	24 or
1427	1427	25 (2) the cannabis cultivation center registration,
1428	1428	26 medical cannabis dispensary registration, or the
1429	1429
1430	1430
1431	1431
1432	1432
1433	1433
1434	1434	HB4157 - 39 - LRB103 33557 HLH 63369 b
1435	1435
1436	1436
1437	1437	HB4157- 40 -LRB103 33557 HLH 63369 b HB4157 - 40 - LRB103 33557 HLH 63369 b
1438	1438	HB4157 - 40 - LRB103 33557 HLH 63369 b
1439	1439	1 controlling interest in a registrant's property is
1440	1440	2 transferred in a transaction to lineal descendants in
1441	1441	3 which no gain or loss is recognized or as a result of a
1442	1442	4 transaction in accordance with Section 351 of the Internal
1443	1443	5 Revenue Code in which no gain or loss is recognized.
1444	1444	6 (p) Pass-through entity tax.
1445	1445	7 (1) For taxable years ending on or after December 31,
1446	1446	8 2021 and beginning prior to January 1, 2026, a partnership
1447	1447	9 (other than a publicly traded partnership under Section
1448	1448	10 7704 of the Internal Revenue Code) or Subchapter S
1449	1449	11 corporation may elect to apply the provisions of this
1450	1450	12 subsection. A separate election shall be made for each
1451	1451	13 taxable year. Such election shall be made at such time,
1452	1452	14 and in such form and manner as prescribed by the
1453	1453	15 Department, and, once made, is irrevocable.
1454	1454	16 (2) Entity-level tax. A partnership or Subchapter S
1455	1455	17 corporation electing to apply the provisions of this
1456	1456	18 subsection shall be subject to a tax for the privilege of
1457	1457	19 earning or receiving income in this State in an amount
1458	1458	20 equal to 4.95% of the taxpayer's net income for the
1459	1459	21 taxable year.
1460	1460	22 (3) Net income defined.
1461	1461	23 (A) In general. For purposes of paragraph (2), the
1462	1462	24 term net income has the same meaning as defined in
1463	1463	25 Section 202 of this Act, except that the following
1464	1464	26 provisions shall not apply:
1465	1465
1466	1466
1467	1467
1468	1468
1469	1469
1470	1470	HB4157 - 40 - LRB103 33557 HLH 63369 b
1471	1471
1472	1472
1473	1473	HB4157- 41 -LRB103 33557 HLH 63369 b HB4157 - 41 - LRB103 33557 HLH 63369 b
1474	1474	HB4157 - 41 - LRB103 33557 HLH 63369 b
1475	1475	1 (i) the standard exemption allowed under
1476	1476	2 Section 204;
1477	1477	3 (ii) the deduction for net losses allowed
1478	1478	4 under Section 207;
1479	1479	5 (iii) in the case of an S corporation, the
1480	1480	6 modification under Section 203(b)(2)(S); and
1481	1481	7 (iv) in the case of a partnership, the
1482	1482	8 modifications under Section 203(d)(2)(H) and
1483	1483	9 Section 203(d)(2)(I).
1484	1484	10 (B) Special rule for tiered partnerships. If a
1485	1485	11 taxpayer making the election under paragraph (1) is a
1486	1486	12 partner of another taxpayer making the election under
1487	1487	13 paragraph (1), net income shall be computed as
1488	1488	14 provided in subparagraph (A), except that the taxpayer
1489	1489	15 shall subtract its distributive share of the net
1490	1490	16 income of the electing partnership (including its
1491	1491	17 distributive share of the net income of the electing
1492	1492	18 partnership derived as a distributive share from
1493	1493	19 electing partnerships in which it is a partner).
1494	1494	20 (4) Credit for entity level tax. Each partner or
1495	1495	21 shareholder of a taxpayer making the election under this
1496	1496	22 Section shall be allowed a credit against the tax imposed
1497	1497	23 under subsections (a) and (b) of Section 201 of this Act
1498	1498	24 for the taxable year of the partnership or Subchapter S
1499	1499	25 corporation for which an election is in effect ending
1500	1500	26 within or with the taxable year of the partner or
1501	1501
1502	1502
1503	1503
1504	1504
1505	1505
1506	1506	HB4157 - 41 - LRB103 33557 HLH 63369 b
1507	1507
1508	1508
1509	1509	HB4157- 42 -LRB103 33557 HLH 63369 b HB4157 - 42 - LRB103 33557 HLH 63369 b
1510	1510	HB4157 - 42 - LRB103 33557 HLH 63369 b
1511	1511	1 shareholder in an amount equal to 4.95% times the partner
1512	1512	2 or shareholder's distributive share of the net income of
1513	1513	3 the electing partnership or Subchapter S corporation, but
1514	1514	4 not to exceed the partner's or shareholder's share of the
1515	1515	5 tax imposed under paragraph (1) which is actually paid by
1516	1516	6 the partnership or Subchapter S corporation. If the
1517	1517	7 taxpayer is a partnership or Subchapter S corporation that
1518	1518	8 is itself a partner of a partnership making the election
1519	1519	9 under paragraph (1), the credit under this paragraph shall
1520	1520	10 be allowed to the taxpayer's partners or shareholders (or
1521	1521	11 if the partner is a partnership or Subchapter S
1522	1522	12 corporation then its partners or shareholders) in
1523	1523	13 accordance with the determination of income and
1524	1524	14 distributive share of income under Sections 702 and 704
1525	1525	15 and Subchapter S of the Internal Revenue Code. If the
1526	1526	16 amount of the credit allowed under this paragraph exceeds
1527	1527	17 the partner's or shareholder's liability for tax imposed
1528	1528	18 under subsections (a) and (b) of Section 201 of this Act
1529	1529	19 for the taxable year, such excess shall be treated as an
1530	1530	20 overpayment for purposes of Section 909 of this Act.
1531	1531	21 (5) Nonresidents. A nonresident individual who is a
1532	1532	22 partner or shareholder of a partnership or Subchapter S
1533	1533	23 corporation for a taxable year for which an election is in
1534	1534	24 effect under paragraph (1) shall not be required to file
1535	1535	25 an income tax return under this Act for such taxable year
1536	1536	26 if the only source of net income of the individual (or the
1537	1537
1538	1538
1539	1539
1540	1540
1541	1541
1542	1542	HB4157 - 42 - LRB103 33557 HLH 63369 b
1543	1543
1544	1544
1545	1545	HB4157- 43 -LRB103 33557 HLH 63369 b HB4157 - 43 - LRB103 33557 HLH 63369 b
1546	1546	HB4157 - 43 - LRB103 33557 HLH 63369 b
1547	1547	1 individual and the individual's spouse in the case of a
1548	1548	2 joint return) is from an entity making the election under
1549	1549	3 paragraph (1) and the credit allowed to the partner or
1550	1550	4 shareholder under paragraph (4) equals or exceeds the
1551	1551	5 individual's liability for the tax imposed under
1552	1552	6 subsections (a) and (b) of Section 201 of this Act for the
1553	1553	7 taxable year.
1554	1554	8 (6) Liability for tax. Except as provided in this
1555	1555	9 paragraph, a partnership or Subchapter S making the
1556	1556	10 election under paragraph (1) is liable for the
1557	1557	11 entity-level tax imposed under paragraph (2). If the
1558	1558	12 electing partnership or corporation fails to pay the full
1559	1559	13 amount of tax deemed assessed under paragraph (2), the
1560	1560	14 partners or shareholders shall be liable to pay the tax
1561	1561	15 assessed (including penalties and interest). Each partner
1562	1562	16 or shareholder shall be liable for the unpaid assessment
1563	1563	17 based on the ratio of the partner's or shareholder's share
1564	1564	18 of the net income of the partnership over the total net
1565	1565	19 income of the partnership. If the partnership or
1566	1566	20 Subchapter S corporation fails to pay the tax assessed
1567	1567	21 (including penalties and interest) and thereafter an
1568	1568	22 amount of such tax is paid by the partners or
1569	1569	23 shareholders, such amount shall not be collected from the
1570	1570	24 partnership or corporation. Notwithstanding the provisions
1571	1571	25 of this paragraph (6), if a Schedule K-1-P is issued to a
1572	1572	26 partner or shareholder by the partnership or corporation
1573	1573
1574	1574
1575	1575
1576	1576
1577	1577
1578	1578	HB4157 - 43 - LRB103 33557 HLH 63369 b
1579	1579
1580	1580
1581	1581	HB4157- 44 -LRB103 33557 HLH 63369 b HB4157 - 44 - LRB103 33557 HLH 63369 b
1582	1582	HB4157 - 44 - LRB103 33557 HLH 63369 b
1583	1583	1 indicating that the tax under this subsection (p) has been
1584	1584	2 paid by the partnership or corporation, the Department
1585	1585	3 shall collect any past due amounts that are represented on
1586	1586	4 the K-1-P from the partnership or corporation and not from
1587	1587	5 the partner or shareholder.
1588	1588	6 (7) Foreign tax. For purposes of the credit allowed
1589	1589	7 under Section 601(b)(3) of this Act, tax paid by a
1590	1590	8 partnership or Subchapter S corporation to another state
1591	1591	9 which, as determined by the Department, is substantially
1592	1592	10 similar to the tax imposed under this subsection, shall be
1593	1593	11 considered tax paid by the partner or shareholder to the
1594	1594	12 extent that the partner's or shareholder's share of the
1595	1595	13 income of the partnership or Subchapter S corporation
1596	1596	14 allocated and apportioned to such other state bears to the
1597	1597	15 total income of the partnership or Subchapter S
1598	1598	16 corporation allocated or apportioned to such other state.
1599	1599	17 (8) Suspension of withholding. The provisions of
1600	1600	18 Section 709.5 of this Act shall not apply to a partnership
1601	1601	19 or Subchapter S corporation for the taxable year for which
1602	1602	20 an election under paragraph (1) is in effect.
1603	1603	21 (9) Requirement to pay estimated tax. For each taxable
1604	1604	22 year for which an election under paragraph (1) is in
1605	1605	23 effect, a partnership or Subchapter S corporation is
1606	1606	24 required to pay estimated tax for such taxable year under
1607	1607	25 Sections 803 and 804 of this Act if the amount payable as
1608	1608	26 estimated tax can reasonably be expected to exceed $500.
1609	1609
1610	1610
1611	1611
1612	1612
1613	1613
1614	1614	HB4157 - 44 - LRB103 33557 HLH 63369 b
1615	1615
1616	1616
1617	1617	HB4157- 45 -LRB103 33557 HLH 63369 b HB4157 - 45 - LRB103 33557 HLH 63369 b
1618	1618	HB4157 - 45 - LRB103 33557 HLH 63369 b
1619	1619	1 (10) The provisions of this subsection shall apply
1620	1620	2 only with respect to taxable years for which the
1621	1621	3 limitation on individual deductions applies under Section
1622	1622	4 164(b)(6) of the Internal Revenue Code.
1623	1623	5 (Source: P.A. 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
1624	1624	6 101-207, eff. 8-2-19; 101-363, eff. 8-9-19; 102-558, eff.
1625	1625	7 8-20-21; 102-658, eff. 8-27-21.)
1626	1626	8 (35 ILCS 5/203) (from Ch. 120, par. 2-203)
1627	1627	9 Sec. 203. Base income defined.
1628	1628	10 (a) Individuals.
1629	1629	11 (1) In general. In the case of an individual, base
1630	1630	12 income means an amount equal to the taxpayer's adjusted
1631	1631	13 gross income for the taxable year as modified by paragraph
1632	1632	14 (2).
1633	1633	15 (2) Modifications. The adjusted gross income referred
1634	1634	16 to in paragraph (1) shall be modified by adding thereto
1635	1635	17 the sum of the following amounts:
1636	1636	18 (A) An amount equal to all amounts paid or accrued
1637	1637	19 to the taxpayer as interest or dividends during the
1638	1638	20 taxable year to the extent excluded from gross income
1639	1639	21 in the computation of adjusted gross income, except
1640	1640	22 stock dividends of qualified public utilities
1641	1641	23 described in Section 305(e) of the Internal Revenue
1642	1642	24 Code;
1643	1643	25 (B) An amount equal to the amount of tax imposed by
1644	1644
1645	1645
1646	1646
1647	1647
1648	1648
1649	1649	HB4157 - 45 - LRB103 33557 HLH 63369 b
1650	1650
1651	1651
1652	1652	HB4157- 46 -LRB103 33557 HLH 63369 b HB4157 - 46 - LRB103 33557 HLH 63369 b
1653	1653	HB4157 - 46 - LRB103 33557 HLH 63369 b
1654	1654	1 this Act to the extent deducted from gross income in
1655	1655	2 the computation of adjusted gross income for the
1656	1656	3 taxable year;
1657	1657	4 (C) An amount equal to the amount received during
1658	1658	5 the taxable year as a recovery or refund of real
1659	1659	6 property taxes paid with respect to the taxpayer's
1660	1660	7 principal residence under the Revenue Act of 1939 and
1661	1661	8 for which a deduction was previously taken under
1662	1662	9 subparagraph (L) of this paragraph (2) prior to July
1663	1663	10 1, 1991, the retrospective application date of Article
1664	1664	11 4 of Public Act 87-17. In the case of multi-unit or
1665	1665	12 multi-use structures and farm dwellings, the taxes on
1666	1666	13 the taxpayer's principal residence shall be that
1667	1667	14 portion of the total taxes for the entire property
1668	1668	15 which is attributable to such principal residence;
1669	1669	16 (D) An amount equal to the amount of the capital
1670	1670	17 gain deduction allowable under the Internal Revenue
1671	1671	18 Code, to the extent deducted from gross income in the
1672	1672	19 computation of adjusted gross income;
1673	1673	20 (D-5) An amount, to the extent not included in
1674	1674	21 adjusted gross income, equal to the amount of money
1675	1675	22 withdrawn by the taxpayer in the taxable year from a
1676	1676	23 medical care savings account and the interest earned
1677	1677	24 on the account in the taxable year of a withdrawal
1678	1678	25 pursuant to subsection (b) of Section 20 of the
1679	1679	26 Medical Care Savings Account Act or subsection (b) of
1680	1680
1681	1681
1682	1682
1683	1683
1684	1684
1685	1685	HB4157 - 46 - LRB103 33557 HLH 63369 b
1686	1686
1687	1687
1688	1688	HB4157- 47 -LRB103 33557 HLH 63369 b HB4157 - 47 - LRB103 33557 HLH 63369 b
1689	1689	HB4157 - 47 - LRB103 33557 HLH 63369 b
1690	1690	1 Section 20 of the Medical Care Savings Account Act of
1691	1691	2 2000;
1692	1692	3 (D-10) For taxable years ending after December 31,
1693	1693	4 1997, an amount equal to any eligible remediation
1694	1694	5 costs that the individual deducted in computing
1695	1695	6 adjusted gross income and for which the individual
1696	1696	7 claims a credit under subsection (l) of Section 201;
1697	1697	8 (D-15) For taxable years 2001 and thereafter, an
1698	1698	9 amount equal to the bonus depreciation deduction taken
1699	1699	10 on the taxpayer's federal income tax return for the
1700	1700	11 taxable year under subsection (k) of Section 168 of
1701	1701	12 the Internal Revenue Code;
1702	1702	13 (D-16) If the taxpayer sells, transfers, abandons,
1703	1703	14 or otherwise disposes of property for which the
1704	1704	15 taxpayer was required in any taxable year to make an
1705	1705	16 addition modification under subparagraph (D-15), then
1706	1706	17 an amount equal to the aggregate amount of the
1707	1707	18 deductions taken in all taxable years under
1708	1708	19 subparagraph (Z) with respect to that property.
1709	1709	20 If the taxpayer continues to own property through
1710	1710	21 the last day of the last tax year for which a
1711	1711	22 subtraction is allowed with respect to that property
1712	1712	23 under subparagraph (Z) and for which the taxpayer was
1713	1713	24 allowed in any taxable year to make a subtraction
1714	1714	25 modification under subparagraph (Z), then an amount
1715	1715	26 equal to that subtraction modification.
1716	1716
1717	1717
1718	1718
1719	1719
1720	1720
1721	1721	HB4157 - 47 - LRB103 33557 HLH 63369 b
1722	1722
1723	1723
1724	1724	HB4157- 48 -LRB103 33557 HLH 63369 b HB4157 - 48 - LRB103 33557 HLH 63369 b
1725	1725	HB4157 - 48 - LRB103 33557 HLH 63369 b
1726	1726	1 The taxpayer is required to make the addition
1727	1727	2 modification under this subparagraph only once with
1728	1728	3 respect to any one piece of property;
1729	1729	4 (D-17) An amount equal to the amount otherwise
1730	1730	5 allowed as a deduction in computing base income for
1731	1731	6 interest paid, accrued, or incurred, directly or
1732	1732	7 indirectly, (i) for taxable years ending on or after
1733	1733	8 December 31, 2004, to a foreign person who would be a
1734	1734	9 member of the same unitary business group but for the
1735	1735	10 fact that foreign person's business activity outside
1736	1736	11 the United States is 80% or more of the foreign
1737	1737	12 person's total business activity and (ii) for taxable
1738	1738	13 years ending on or after December 31, 2008, to a person
1739	1739	14 who would be a member of the same unitary business
1740	1740	15 group but for the fact that the person is prohibited
1741	1741	16 under Section 1501(a)(27) from being included in the
1742	1742	17 unitary business group because he or she is ordinarily
1743	1743	18 required to apportion business income under different
1744	1744	19 subsections of Section 304. The addition modification
1745	1745	20 required by this subparagraph shall be reduced to the
1746	1746	21 extent that dividends were included in base income of
1747	1747	22 the unitary group for the same taxable year and
1748	1748	23 received by the taxpayer or by a member of the
1749	1749	24 taxpayer's unitary business group (including amounts
1750	1750	25 included in gross income under Sections 951 through
1751	1751	26 964 of the Internal Revenue Code and amounts included
1752	1752
1753	1753
1754	1754
1755	1755
1756	1756
1757	1757	HB4157 - 48 - LRB103 33557 HLH 63369 b
1758	1758
1759	1759
1760	1760	HB4157- 49 -LRB103 33557 HLH 63369 b HB4157 - 49 - LRB103 33557 HLH 63369 b
1761	1761	HB4157 - 49 - LRB103 33557 HLH 63369 b
1762	1762	1 in gross income under Section 78 of the Internal
1763	1763	2 Revenue Code) with respect to the stock of the same
1764	1764	3 person to whom the interest was paid, accrued, or
1765	1765	4 incurred.
1766	1766	5 This paragraph shall not apply to the following:
1767	1767	6 (i) an item of interest paid, accrued, or
1768	1768	7 incurred, directly or indirectly, to a person who
1769	1769	8 is subject in a foreign country or state, other
1770	1770	9 than a state which requires mandatory unitary
1771	1771	10 reporting, to a tax on or measured by net income
1772	1772	11 with respect to such interest; or
1773	1773	12 (ii) an item of interest paid, accrued, or
1774	1774	13 incurred, directly or indirectly, to a person if
1775	1775	14 the taxpayer can establish, based on a
1776	1776	15 preponderance of the evidence, both of the
1777	1777	16 following:
1778	1778	17 (a) the person, during the same taxable
1779	1779	18 year, paid, accrued, or incurred, the interest
1780	1780	19 to a person that is not a related member, and
1781	1781	20 (b) the transaction giving rise to the
1782	1782	21 interest expense between the taxpayer and the
1783	1783	22 person did not have as a principal purpose the
1784	1784	23 avoidance of Illinois income tax, and is paid
1785	1785	24 pursuant to a contract or agreement that
1786	1786	25 reflects an arm's-length interest rate and
1787	1787	26 terms; or
1788	1788
1789	1789
1790	1790
1791	1791
1792	1792
1793	1793	HB4157 - 49 - LRB103 33557 HLH 63369 b
1794	1794
1795	1795
1796	1796	HB4157- 50 -LRB103 33557 HLH 63369 b HB4157 - 50 - LRB103 33557 HLH 63369 b
1797	1797	HB4157 - 50 - LRB103 33557 HLH 63369 b
1798	1798	1 (iii) the taxpayer can establish, based on
1799	1799	2 clear and convincing evidence, that the interest
1800	1800	3 paid, accrued, or incurred relates to a contract
1801	1801	4 or agreement entered into at arm's-length rates
1802	1802	5 and terms and the principal purpose for the
1803	1803	6 payment is not federal or Illinois tax avoidance;
1804	1804	7 or
1805	1805	8 (iv) an item of interest paid, accrued, or
1806	1806	9 incurred, directly or indirectly, to a person if
1807	1807	10 the taxpayer establishes by clear and convincing
1808	1808	11 evidence that the adjustments are unreasonable; or
1809	1809	12 if the taxpayer and the Director agree in writing
1810	1810	13 to the application or use of an alternative method
1811	1811	14 of apportionment under Section 304(f).
1812	1812	15 Nothing in this subsection shall preclude the
1813	1813	16 Director from making any other adjustment
1814	1814	17 otherwise allowed under Section 404 of this Act
1815	1815	18 for any tax year beginning after the effective
1816	1816	19 date of this amendment provided such adjustment is
1817	1817	20 made pursuant to regulation adopted by the
1818	1818	21 Department and such regulations provide methods
1819	1819	22 and standards by which the Department will utilize
1820	1820	23 its authority under Section 404 of this Act;
1821	1821	24 (D-18) An amount equal to the amount of intangible
1822	1822	25 expenses and costs otherwise allowed as a deduction in
1823	1823	26 computing base income, and that were paid, accrued, or
1824	1824
1825	1825
1826	1826
1827	1827
1828	1828
1829	1829	HB4157 - 50 - LRB103 33557 HLH 63369 b
1830	1830
1831	1831
1832	1832	HB4157- 51 -LRB103 33557 HLH 63369 b HB4157 - 51 - LRB103 33557 HLH 63369 b
1833	1833	HB4157 - 51 - LRB103 33557 HLH 63369 b
1834	1834	1 incurred, directly or indirectly, (i) for taxable
1835	1835	2 years ending on or after December 31, 2004, to a
1836	1836	3 foreign person who would be a member of the same
1837	1837	4 unitary business group but for the fact that the
1838	1838	5 foreign person's business activity outside the United
1839	1839	6 States is 80% or more of that person's total business
1840	1840	7 activity and (ii) for taxable years ending on or after
1841	1841	8 December 31, 2008, to a person who would be a member of
1842	1842	9 the same unitary business group but for the fact that
1843	1843	10 the person is prohibited under Section 1501(a)(27)
1844	1844	11 from being included in the unitary business group
1845	1845	12 because he or she is ordinarily required to apportion
1846	1846	13 business income under different subsections of Section
1847	1847	14 304. The addition modification required by this
1848	1848	15 subparagraph shall be reduced to the extent that
1849	1849	16 dividends were included in base income of the unitary
1850	1850	17 group for the same taxable year and received by the
1851	1851	18 taxpayer or by a member of the taxpayer's unitary
1852	1852	19 business group (including amounts included in gross
1853	1853	20 income under Sections 951 through 964 of the Internal
1854	1854	21 Revenue Code and amounts included in gross income
1855	1855	22 under Section 78 of the Internal Revenue Code) with
1856	1856	23 respect to the stock of the same person to whom the
1857	1857	24 intangible expenses and costs were directly or
1858	1858	25 indirectly paid, incurred, or accrued. The preceding
1859	1859	26 sentence does not apply to the extent that the same
1860	1860
1861	1861
1862	1862
1863	1863
1864	1864
1865	1865	HB4157 - 51 - LRB103 33557 HLH 63369 b
1866	1866
1867	1867
1868	1868	HB4157- 52 -LRB103 33557 HLH 63369 b HB4157 - 52 - LRB103 33557 HLH 63369 b
1869	1869	HB4157 - 52 - LRB103 33557 HLH 63369 b
1870	1870	1 dividends caused a reduction to the addition
1871	1871	2 modification required under Section 203(a)(2)(D-17) of
1872	1872	3 this Act. As used in this subparagraph, the term
1873	1873	4 "intangible expenses and costs" includes (1) expenses,
1874	1874	5 losses, and costs for, or related to, the direct or
1875	1875	6 indirect acquisition, use, maintenance or management,
1876	1876	7 ownership, sale, exchange, or any other disposition of
1877	1877	8 intangible property; (2) losses incurred, directly or
1878	1878	9 indirectly, from factoring transactions or discounting
1879	1879	10 transactions; (3) royalty, patent, technical, and
1880	1880	11 copyright fees; (4) licensing fees; and (5) other
1881	1881	12 similar expenses and costs. For purposes of this
1882	1882	13 subparagraph, "intangible property" includes patents,
1883	1883	14 patent applications, trade names, trademarks, service
1884	1884	15 marks, copyrights, mask works, trade secrets, and
1885	1885	16 similar types of intangible assets.
1886	1886	17 This paragraph shall not apply to the following:
1887	1887	18 (i) any item of intangible expenses or costs
1888	1888	19 paid, accrued, or incurred, directly or
1889	1889	20 indirectly, from a transaction with a person who
1890	1890	21 is subject in a foreign country or state, other
1891	1891	22 than a state which requires mandatory unitary
1892	1892	23 reporting, to a tax on or measured by net income
1893	1893	24 with respect to such item; or
1894	1894	25 (ii) any item of intangible expense or cost
1895	1895	26 paid, accrued, or incurred, directly or
1896	1896
1897	1897
1898	1898
1899	1899
1900	1900
1901	1901	HB4157 - 52 - LRB103 33557 HLH 63369 b
1902	1902
1903	1903
1904	1904	HB4157- 53 -LRB103 33557 HLH 63369 b HB4157 - 53 - LRB103 33557 HLH 63369 b
1905	1905	HB4157 - 53 - LRB103 33557 HLH 63369 b
1906	1906	1 indirectly, if the taxpayer can establish, based
1907	1907	2 on a preponderance of the evidence, both of the
1908	1908	3 following:
1909	1909	4 (a) the person during the same taxable
1910	1910	5 year paid, accrued, or incurred, the
1911	1911	6 intangible expense or cost to a person that is
1912	1912	7 not a related member, and
1913	1913	8 (b) the transaction giving rise to the
1914	1914	9 intangible expense or cost between the
1915	1915	10 taxpayer and the person did not have as a
1916	1916	11 principal purpose the avoidance of Illinois
1917	1917	12 income tax, and is paid pursuant to a contract
1918	1918	13 or agreement that reflects arm's-length terms;
1919	1919	14 or
1920	1920	15 (iii) any item of intangible expense or cost
1921	1921	16 paid, accrued, or incurred, directly or
1922	1922	17 indirectly, from a transaction with a person if
1923	1923	18 the taxpayer establishes by clear and convincing
1924	1924	19 evidence, that the adjustments are unreasonable;
1925	1925	20 or if the taxpayer and the Director agree in
1926	1926	21 writing to the application or use of an
1927	1927	22 alternative method of apportionment under Section
1928	1928	23 304(f);
1929	1929	24 Nothing in this subsection shall preclude the
1930	1930	25 Director from making any other adjustment
1931	1931	26 otherwise allowed under Section 404 of this Act
1932	1932
1933	1933
1934	1934
1935	1935
1936	1936
1937	1937	HB4157 - 53 - LRB103 33557 HLH 63369 b
1938	1938
1939	1939
1940	1940	HB4157- 54 -LRB103 33557 HLH 63369 b HB4157 - 54 - LRB103 33557 HLH 63369 b
1941	1941	HB4157 - 54 - LRB103 33557 HLH 63369 b
1942	1942	1 for any tax year beginning after the effective
1943	1943	2 date of this amendment provided such adjustment is
1944	1944	3 made pursuant to regulation adopted by the
1945	1945	4 Department and such regulations provide methods
1946	1946	5 and standards by which the Department will utilize
1947	1947	6 its authority under Section 404 of this Act;
1948	1948	7 (D-19) For taxable years ending on or after
1949	1949	8 December 31, 2008, an amount equal to the amount of
1950	1950	9 insurance premium expenses and costs otherwise allowed
1951	1951	10 as a deduction in computing base income, and that were
1952	1952	11 paid, accrued, or incurred, directly or indirectly, to
1953	1953	12 a person who would be a member of the same unitary
1954	1954	13 business group but for the fact that the person is
1955	1955	14 prohibited under Section 1501(a)(27) from being
1956	1956	15 included in the unitary business group because he or
1957	1957	16 she is ordinarily required to apportion business
1958	1958	17 income under different subsections of Section 304. The
1959	1959	18 addition modification required by this subparagraph
1960	1960	19 shall be reduced to the extent that dividends were
1961	1961	20 included in base income of the unitary group for the
1962	1962	21 same taxable year and received by the taxpayer or by a
1963	1963	22 member of the taxpayer's unitary business group
1964	1964	23 (including amounts included in gross income under
1965	1965	24 Sections 951 through 964 of the Internal Revenue Code
1966	1966	25 and amounts included in gross income under Section 78
1967	1967	26 of the Internal Revenue Code) with respect to the
1968	1968
1969	1969
1970	1970
1971	1971
1972	1972
1973	1973	HB4157 - 54 - LRB103 33557 HLH 63369 b
1974	1974
1975	1975
1976	1976	HB4157- 55 -LRB103 33557 HLH 63369 b HB4157 - 55 - LRB103 33557 HLH 63369 b
1977	1977	HB4157 - 55 - LRB103 33557 HLH 63369 b
1978	1978	1 stock of the same person to whom the premiums and costs
1979	1979	2 were directly or indirectly paid, incurred, or
1980	1980	3 accrued. The preceding sentence does not apply to the
1981	1981	4 extent that the same dividends caused a reduction to
1982	1982	5 the addition modification required under Section
1983	1983	6 203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this
1984	1984	7 Act;
1985	1985	8 (D-20) For taxable years beginning on or after
1986	1986	9 January 1, 2002 and ending on or before December 31,
1987	1987	10 2006, in the case of a distribution from a qualified
1988	1988	11 tuition program under Section 529 of the Internal
1989	1989	12 Revenue Code, other than (i) a distribution from a
1990	1990	13 College Savings Pool created under Section 16.5 of the
1991	1991	14 State Treasurer Act or (ii) a distribution from the
1992	1992	15 Illinois Prepaid Tuition Trust Fund, an amount equal
1993	1993	16 to the amount excluded from gross income under Section
1994	1994	17 529(c)(3)(B). For taxable years beginning on or after
1995	1995	18 January 1, 2007, in the case of a distribution from a
1996	1996	19 qualified tuition program under Section 529 of the
1997	1997	20 Internal Revenue Code, other than (i) a distribution
1998	1998	21 from a College Savings Pool created under Section 16.5
1999	1999	22 of the State Treasurer Act, (ii) a distribution from
2000	2000	23 the Illinois Prepaid Tuition Trust Fund, or (iii) a
2001	2001	24 distribution from a qualified tuition program under
2002	2002	25 Section 529 of the Internal Revenue Code that (I)
2003	2003	26 adopts and determines that its offering materials
2004	2004
2005	2005
2006	2006
2007	2007
2008	2008
2009	2009	HB4157 - 55 - LRB103 33557 HLH 63369 b
2010	2010
2011	2011
2012	2012	HB4157- 56 -LRB103 33557 HLH 63369 b HB4157 - 56 - LRB103 33557 HLH 63369 b
2013	2013	HB4157 - 56 - LRB103 33557 HLH 63369 b
2014	2014	1 comply with the College Savings Plans Network's
2015	2015	2 disclosure principles and (II) has made reasonable
2016	2016	3 efforts to inform in-state residents of the existence
2017	2017	4 of in-state qualified tuition programs by informing
2018	2018	5 Illinois residents directly and, where applicable, to
2019	2019	6 inform financial intermediaries distributing the
2020	2020	7 program to inform in-state residents of the existence
2021	2021	8 of in-state qualified tuition programs at least
2022	2022	9 annually, an amount equal to the amount excluded from
2023	2023	10 gross income under Section 529(c)(3)(B).
2024	2024	11 For the purposes of this subparagraph (D-20), a
2025	2025	12 qualified tuition program has made reasonable efforts
2026	2026	13 if it makes disclosures (which may use the term
2027	2027	14 "in-state program" or "in-state plan" and need not
2028	2028	15 specifically refer to Illinois or its qualified
2029	2029	16 programs by name) (i) directly to prospective
2030	2030	17 participants in its offering materials or makes a
2031	2031	18 public disclosure, such as a website posting; and (ii)
2032	2032	19 where applicable, to intermediaries selling the
2033	2033	20 out-of-state program in the same manner that the
2034	2034	21 out-of-state program distributes its offering
2035	2035	22 materials;
2036	2036	23 (D-20.5) For taxable years beginning on or after
2037	2037	24 January 1, 2018, in the case of a distribution from a
2038	2038	25 qualified ABLE program under Section 529A of the
2039	2039	26 Internal Revenue Code, other than a distribution from
2040	2040
2041	2041
2042	2042
2043	2043
2044	2044
2045	2045	HB4157 - 56 - LRB103 33557 HLH 63369 b
2046	2046
2047	2047
2048	2048	HB4157- 57 -LRB103 33557 HLH 63369 b HB4157 - 57 - LRB103 33557 HLH 63369 b
2049	2049	HB4157 - 57 - LRB103 33557 HLH 63369 b
2050	2050	1 a qualified ABLE program created under Section 16.6 of
2051	2051	2 the State Treasurer Act, an amount equal to the amount
2052	2052	3 excluded from gross income under Section 529A(c)(1)(B)
2053	2053	4 of the Internal Revenue Code;
2054	2054	5 (D-21) For taxable years beginning on or after
2055	2055	6 January 1, 2007, in the case of transfer of moneys from
2056	2056	7 a qualified tuition program under Section 529 of the
2057	2057	8 Internal Revenue Code that is administered by the
2058	2058	9 State to an out-of-state program, an amount equal to
2059	2059	10 the amount of moneys previously deducted from base
2060	2060	11 income under subsection (a)(2)(Y) of this Section;
2061	2061	12 (D-21.5) For taxable years beginning on or after
2062	2062	13 January 1, 2018, in the case of the transfer of moneys
2063	2063	14 from a qualified tuition program under Section 529 or
2064	2064	15 a qualified ABLE program under Section 529A of the
2065	2065	16 Internal Revenue Code that is administered by this
2066	2066	17 State to an ABLE account established under an
2067	2067	18 out-of-state ABLE account program, an amount equal to
2068	2068	19 the contribution component of the transferred amount
2069	2069	20 that was previously deducted from base income under
2070	2070	21 subsection (a)(2)(Y) or subsection (a)(2)(HH) of this
2071	2071	22 Section;
2072	2072	23 (D-22) For taxable years beginning on or after
2073	2073	24 January 1, 2009, and prior to January 1, 2018, in the
2074	2074	25 case of a nonqualified withdrawal or refund of moneys
2075	2075	26 from a qualified tuition program under Section 529 of
2076	2076
2077	2077
2078	2078
2079	2079
2080	2080
2081	2081	HB4157 - 57 - LRB103 33557 HLH 63369 b
2082	2082
2083	2083
2084	2084	HB4157- 58 -LRB103 33557 HLH 63369 b HB4157 - 58 - LRB103 33557 HLH 63369 b
2085	2085	HB4157 - 58 - LRB103 33557 HLH 63369 b
2086	2086	1 the Internal Revenue Code administered by the State
2087	2087	2 that is not used for qualified expenses at an eligible
2088	2088	3 education institution, an amount equal to the
2089	2089	4 contribution component of the nonqualified withdrawal
2090	2090	5 or refund that was previously deducted from base
2091	2091	6 income under subsection (a)(2)(y) of this Section,
2092	2092	7 provided that the withdrawal or refund did not result
2093	2093	8 from the beneficiary's death or disability. For
2094	2094	9 taxable years beginning on or after January 1, 2018:
2095	2095	10 (1) in the case of a nonqualified withdrawal or
2096	2096	11 refund, as defined under Section 16.5 of the State
2097	2097	12 Treasurer Act, of moneys from a qualified tuition
2098	2098	13 program under Section 529 of the Internal Revenue Code
2099	2099	14 administered by the State, an amount equal to the
2100	2100	15 contribution component of the nonqualified withdrawal
2101	2101	16 or refund that was previously deducted from base
2102	2102	17 income under subsection (a)(2)(Y) of this Section, and
2103	2103	18 (2) in the case of a nonqualified withdrawal or refund
2104	2104	19 from a qualified ABLE program under Section 529A of
2105	2105	20 the Internal Revenue Code administered by the State
2106	2106	21 that is not used for qualified disability expenses, an
2107	2107	22 amount equal to the contribution component of the
2108	2108	23 nonqualified withdrawal or refund that was previously
2109	2109	24 deducted from base income under subsection (a)(2)(HH)
2110	2110	25 of this Section;
2111	2111	26 (D-23) An amount equal to the credit allowable to
2112	2112
2113	2113
2114	2114
2115	2115
2116	2116
2117	2117	HB4157 - 58 - LRB103 33557 HLH 63369 b
2118	2118
2119	2119
2120	2120	HB4157- 59 -LRB103 33557 HLH 63369 b HB4157 - 59 - LRB103 33557 HLH 63369 b
2121	2121	HB4157 - 59 - LRB103 33557 HLH 63369 b
2122	2122	1 the taxpayer under Section 218(a) of this Act,
2123	2123	2 determined without regard to Section 218(c) of this
2124	2124	3 Act;
2125	2125	4 (D-24) For taxable years ending on or after
2126	2126	5 December 31, 2017, an amount equal to the deduction
2127	2127	6 allowed under Section 199 of the Internal Revenue Code
2128	2128	7 for the taxable year;
2129	2129	8 (D-25) In the case of a resident, an amount equal
2130	2130	9 to the amount of tax for which a credit is allowed
2131	2131	10 pursuant to Section 201(p)(7) of this Act;
2132	2132	11 and by deducting from the total so obtained the sum of the
2133	2133	12 following amounts:
2134	2134	13 (E) For taxable years ending before December 31,
2135	2135	14 2001, any amount included in such total in respect of
2136	2136	15 any compensation (including but not limited to any
2137	2137	16 compensation paid or accrued to a serviceman while a
2138	2138	17 prisoner of war or missing in action) paid to a
2139	2139	18 resident by reason of being on active duty in the Armed
2140	2140	19 Forces of the United States and in respect of any
2141	2141	20 compensation paid or accrued to a resident who as a
2142	2142	21 governmental employee was a prisoner of war or missing
2143	2143	22 in action, and in respect of any compensation paid to a
2144	2144	23 resident in 1971 or thereafter for annual training
2145	2145	24 performed pursuant to Sections 502 and 503, Title 32,
2146	2146	25 United States Code as a member of the Illinois
2147	2147	26 National Guard or, beginning with taxable years ending
2148	2148
2149	2149
2150	2150
2151	2151
2152	2152
2153	2153	HB4157 - 59 - LRB103 33557 HLH 63369 b
2154	2154
2155	2155
2156	2156	HB4157- 60 -LRB103 33557 HLH 63369 b HB4157 - 60 - LRB103 33557 HLH 63369 b
2157	2157	HB4157 - 60 - LRB103 33557 HLH 63369 b
2158	2158	1 on or after December 31, 2007, the National Guard of
2159	2159	2 any other state. For taxable years ending on or after
2160	2160	3 December 31, 2001, any amount included in such total
2161	2161	4 in respect of any compensation (including but not
2162	2162	5 limited to any compensation paid or accrued to a
2163	2163	6 serviceman while a prisoner of war or missing in
2164	2164	7 action) paid to a resident by reason of being a member
2165	2165	8 of any component of the Armed Forces of the United
2166	2166	9 States and in respect of any compensation paid or
2167	2167	10 accrued to a resident who as a governmental employee
2168	2168	11 was a prisoner of war or missing in action, and in
2169	2169	12 respect of any compensation paid to a resident in 2001
2170	2170	13 or thereafter by reason of being a member of the
2171	2171	14 Illinois National Guard or, beginning with taxable
2172	2172	15 years ending on or after December 31, 2007, the
2173	2173	16 National Guard of any other state. The provisions of
2174	2174	17 this subparagraph (E) are exempt from the provisions
2175	2175	18 of Section 250;
2176	2176	19 (F) An amount equal to all amounts included in
2177	2177	20 such total pursuant to the provisions of Sections
2178	2178	21 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
2179	2179	22 408 of the Internal Revenue Code, or included in such
2180	2180	23 total as distributions under the provisions of any
2181	2181	24 retirement or disability plan for employees of any
2182	2182	25 governmental agency or unit, or retirement payments to
2183	2183	26 retired partners, which payments are excluded in
2184	2184
2185	2185
2186	2186
2187	2187
2188	2188
2189	2189	HB4157 - 60 - LRB103 33557 HLH 63369 b
2190	2190
2191	2191
2192	2192	HB4157- 61 -LRB103 33557 HLH 63369 b HB4157 - 61 - LRB103 33557 HLH 63369 b
2193	2193	HB4157 - 61 - LRB103 33557 HLH 63369 b
2194	2194	1 computing net earnings from self employment by Section
2195	2195	2 1402 of the Internal Revenue Code and regulations
2196	2196	3 adopted pursuant thereto;
2197	2197	4 (G) The valuation limitation amount;
2198	2198	5 (H) An amount equal to the amount of any tax
2199	2199	6 imposed by this Act which was refunded to the taxpayer
2200	2200	7 and included in such total for the taxable year;
2201	2201	8 (I) An amount equal to all amounts included in
2202	2202	9 such total pursuant to the provisions of Section 111
2203	2203	10 of the Internal Revenue Code as a recovery of items
2204	2204	11 previously deducted from adjusted gross income in the
2205	2205	12 computation of taxable income;
2206	2206	13 (J) An amount equal to those dividends included in
2207	2207	14 such total which were paid by a corporation which
2208	2208	15 conducts business operations in a River Edge
2209	2209	16 Redevelopment Zone or zones created under the River
2210	2210	17 Edge Redevelopment Zone Act, and conducts
2211	2211	18 substantially all of its operations in a River Edge
2212	2212	19 Redevelopment Zone or zones. This subparagraph (J) is
2213	2213	20 exempt from the provisions of Section 250;
2214	2214	21 (K) An amount equal to those dividends included in
2215	2215	22 such total that were paid by a corporation that
2216	2216	23 conducts business operations in a federally designated
2217	2217	24 Foreign Trade Zone or Sub-Zone and that is designated
2218	2218	25 a High Impact Business located in Illinois; provided
2219	2219	26 that dividends eligible for the deduction provided in
2220	2220
2221	2221
2222	2222
2223	2223
2224	2224
2225	2225	HB4157 - 61 - LRB103 33557 HLH 63369 b
2226	2226
2227	2227
2228	2228	HB4157- 62 -LRB103 33557 HLH 63369 b HB4157 - 62 - LRB103 33557 HLH 63369 b
2229	2229	HB4157 - 62 - LRB103 33557 HLH 63369 b
2230	2230	1 subparagraph (J) of paragraph (2) of this subsection
2231	2231	2 shall not be eligible for the deduction provided under
2232	2232	3 this subparagraph (K);
2233	2233	4 (L) For taxable years ending after December 31,
2234	2234	5 1983, an amount equal to all social security benefits
2235	2235	6 and railroad retirement benefits included in such
2236	2236	7 total pursuant to Sections 72(r) and 86 of the
2237	2237	8 Internal Revenue Code;
2238	2238	9 (M) With the exception of any amounts subtracted
2239	2239	10 under subparagraph (N), an amount equal to the sum of
2240	2240	11 all amounts disallowed as deductions by (i) Sections
2241	2241	12 171(a)(2) and 265(a)(2) of the Internal Revenue Code,
2242	2242	13 and all amounts of expenses allocable to interest and
2243	2243	14 disallowed as deductions by Section 265(a)(1) of the
2244	2244	15 Internal Revenue Code; and (ii) for taxable years
2245	2245	16 ending on or after August 13, 1999, Sections
2246	2246	17 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
2247	2247	18 Internal Revenue Code, plus, for taxable years ending
2248	2248	19 on or after December 31, 2011, Section 45G(e)(3) of
2249	2249	20 the Internal Revenue Code and, for taxable years
2250	2250	21 ending on or after December 31, 2008, any amount
2251	2251	22 included in gross income under Section 87 of the
2252	2252	23 Internal Revenue Code; the provisions of this
2253	2253	24 subparagraph are exempt from the provisions of Section
2254	2254	25 250;
2255	2255	26 (N) An amount equal to all amounts included in
2256	2256
2257	2257
2258	2258
2259	2259
2260	2260
2261	2261	HB4157 - 62 - LRB103 33557 HLH 63369 b
2262	2262
2263	2263
2264	2264	HB4157- 63 -LRB103 33557 HLH 63369 b HB4157 - 63 - LRB103 33557 HLH 63369 b
2265	2265	HB4157 - 63 - LRB103 33557 HLH 63369 b
2266	2266	1 such total which are exempt from taxation by this
2267	2267	2 State either by reason of its statutes or Constitution
2268	2268	3 or by reason of the Constitution, treaties or statutes
2269	2269	4 of the United States; provided that, in the case of any
2270	2270	5 statute of this State that exempts income derived from
2271	2271	6 bonds or other obligations from the tax imposed under
2272	2272	7 this Act, the amount exempted shall be the interest
2273	2273	8 net of bond premium amortization;
2274	2274	9 (O) An amount equal to any contribution made to a
2275	2275	10 job training project established pursuant to the Tax
2276	2276	11 Increment Allocation Redevelopment Act;
2277	2277	12 (P) An amount equal to the amount of the deduction
2278	2278	13 used to compute the federal income tax credit for
2279	2279	14 restoration of substantial amounts held under claim of
2280	2280	15 right for the taxable year pursuant to Section 1341 of
2281	2281	16 the Internal Revenue Code or of any itemized deduction
2282	2282	17 taken from adjusted gross income in the computation of
2283	2283	18 taxable income for restoration of substantial amounts
2284	2284	19 held under claim of right for the taxable year;
2285	2285	20 (Q) An amount equal to any amounts included in
2286	2286	21 such total, received by the taxpayer as an
2287	2287	22 acceleration in the payment of life, endowment or
2288	2288	23 annuity benefits in advance of the time they would
2289	2289	24 otherwise be payable as an indemnity for a terminal
2290	2290	25 illness;
2291	2291	26 (R) An amount equal to the amount of any federal or
2292	2292
2293	2293
2294	2294
2295	2295
2296	2296
2297	2297	HB4157 - 63 - LRB103 33557 HLH 63369 b
2298	2298
2299	2299
2300	2300	HB4157- 64 -LRB103 33557 HLH 63369 b HB4157 - 64 - LRB103 33557 HLH 63369 b
2301	2301	HB4157 - 64 - LRB103 33557 HLH 63369 b
2302	2302	1 State bonus paid to veterans of the Persian Gulf War;
2303	2303	2 (S) An amount, to the extent included in adjusted
2304	2304	3 gross income, equal to the amount of a contribution
2305	2305	4 made in the taxable year on behalf of the taxpayer to a
2306	2306	5 medical care savings account established under the
2307	2307	6 Medical Care Savings Account Act or the Medical Care
2308	2308	7 Savings Account Act of 2000 to the extent the
2309	2309	8 contribution is accepted by the account administrator
2310	2310	9 as provided in that Act;
2311	2311	10 (T) An amount, to the extent included in adjusted
2312	2312	11 gross income, equal to the amount of interest earned
2313	2313	12 in the taxable year on a medical care savings account
2314	2314	13 established under the Medical Care Savings Account Act
2315	2315	14 or the Medical Care Savings Account Act of 2000 on
2316	2316	15 behalf of the taxpayer, other than interest added
2317	2317	16 pursuant to item (D-5) of this paragraph (2);
2318	2318	17 (U) For one taxable year beginning on or after
2319	2319	18 January 1, 1994, an amount equal to the total amount of
2320	2320	19 tax imposed and paid under subsections (a) and (b) of
2321	2321	20 Section 201 of this Act on grant amounts received by
2322	2322	21 the taxpayer under the Nursing Home Grant Assistance
2323	2323	22 Act during the taxpayer's taxable years 1992 and 1993;
2324	2324	23 (V) Beginning with tax years ending on or after
2325	2325	24 December 31, 1995 and ending with tax years ending on
2326	2326	25 or before December 31, 2004, an amount equal to the
2327	2327	26 amount paid by a taxpayer who is a self-employed
2328	2328
2329	2329
2330	2330
2331	2331
2332	2332
2333	2333	HB4157 - 64 - LRB103 33557 HLH 63369 b
2334	2334
2335	2335
2336	2336	HB4157- 65 -LRB103 33557 HLH 63369 b HB4157 - 65 - LRB103 33557 HLH 63369 b
2337	2337	HB4157 - 65 - LRB103 33557 HLH 63369 b
2338	2338	1 taxpayer, a partner of a partnership, or a shareholder
2339	2339	2 in a Subchapter S corporation for health insurance or
2340	2340	3 long-term care insurance for that taxpayer or that
2341	2341	4 taxpayer's spouse or dependents, to the extent that
2342	2342	5 the amount paid for that health insurance or long-term
2343	2343	6 care insurance may be deducted under Section 213 of
2344	2344	7 the Internal Revenue Code, has not been deducted on
2345	2345	8 the federal income tax return of the taxpayer, and
2346	2346	9 does not exceed the taxable income attributable to
2347	2347	10 that taxpayer's income, self-employment income, or
2348	2348	11 Subchapter S corporation income; except that no
2349	2349	12 deduction shall be allowed under this item (V) if the
2350	2350	13 taxpayer is eligible to participate in any health
2351	2351	14 insurance or long-term care insurance plan of an
2352	2352	15 employer of the taxpayer or the taxpayer's spouse. The
2353	2353	16 amount of the health insurance and long-term care
2354	2354	17 insurance subtracted under this item (V) shall be
2355	2355	18 determined by multiplying total health insurance and
2356	2356	19 long-term care insurance premiums paid by the taxpayer
2357	2357	20 times a number that represents the fractional
2358	2358	21 percentage of eligible medical expenses under Section
2359	2359	22 213 of the Internal Revenue Code of 1986 not actually
2360	2360	23 deducted on the taxpayer's federal income tax return;
2361	2361	24 (W) For taxable years beginning on or after
2362	2362	25 January 1, 1998, all amounts included in the
2363	2363	26 taxpayer's federal gross income in the taxable year
2364	2364
2365	2365
2366	2366
2367	2367
2368	2368
2369	2369	HB4157 - 65 - LRB103 33557 HLH 63369 b
2370	2370
2371	2371
2372	2372	HB4157- 66 -LRB103 33557 HLH 63369 b HB4157 - 66 - LRB103 33557 HLH 63369 b
2373	2373	HB4157 - 66 - LRB103 33557 HLH 63369 b
2374	2374	1 from amounts converted from a regular IRA to a Roth
2375	2375	2 IRA. This paragraph is exempt from the provisions of
2376	2376	3 Section 250;
2377	2377	4 (X) For taxable year 1999 and thereafter, an
2378	2378	5 amount equal to the amount of any (i) distributions,
2379	2379	6 to the extent includible in gross income for federal
2380	2380	7 income tax purposes, made to the taxpayer because of
2381	2381	8 his or her status as a victim of persecution for racial
2382	2382	9 or religious reasons by Nazi Germany or any other Axis
2383	2383	10 regime or as an heir of the victim and (ii) items of
2384	2384	11 income, to the extent includible in gross income for
2385	2385	12 federal income tax purposes, attributable to, derived
2386	2386	13 from or in any way related to assets stolen from,
2387	2387	14 hidden from, or otherwise lost to a victim of
2388	2388	15 persecution for racial or religious reasons by Nazi
2389	2389	16 Germany or any other Axis regime immediately prior to,
2390	2390	17 during, and immediately after World War II, including,
2391	2391	18 but not limited to, interest on the proceeds
2392	2392	19 receivable as insurance under policies issued to a
2393	2393	20 victim of persecution for racial or religious reasons
2394	2394	21 by Nazi Germany or any other Axis regime by European
2395	2395	22 insurance companies immediately prior to and during
2396	2396	23 World War II; provided, however, this subtraction from
2397	2397	24 federal adjusted gross income does not apply to assets
2398	2398	25 acquired with such assets or with the proceeds from
2399	2399	26 the sale of such assets; provided, further, this
2400	2400
2401	2401
2402	2402
2403	2403
2404	2404
2405	2405	HB4157 - 66 - LRB103 33557 HLH 63369 b
2406	2406
2407	2407
2408	2408	HB4157- 67 -LRB103 33557 HLH 63369 b HB4157 - 67 - LRB103 33557 HLH 63369 b
2409	2409	HB4157 - 67 - LRB103 33557 HLH 63369 b
2410	2410	1 paragraph shall only apply to a taxpayer who was the
2411	2411	2 first recipient of such assets after their recovery
2412	2412	3 and who is a victim of persecution for racial or
2413	2413	4 religious reasons by Nazi Germany or any other Axis
2414	2414	5 regime or as an heir of the victim. The amount of and
2415	2415	6 the eligibility for any public assistance, benefit, or
2416	2416	7 similar entitlement is not affected by the inclusion
2417	2417	8 of items (i) and (ii) of this paragraph in gross income
2418	2418	9 for federal income tax purposes. This paragraph is
2419	2419	10 exempt from the provisions of Section 250;
2420	2420	11 (Y) For taxable years beginning on or after
2421	2421	12 January 1, 2002 and ending on or before December 31,
2422	2422	13 2004, moneys contributed in the taxable year to a
2423	2423	14 College Savings Pool account under Section 16.5 of the
2424	2424	15 State Treasurer Act, except that amounts excluded from
2425	2425	16 gross income under Section 529(c)(3)(C)(i) of the
2426	2426	17 Internal Revenue Code shall not be considered moneys
2427	2427	18 contributed under this subparagraph (Y). For taxable
2428	2428	19 years beginning on or after January 1, 2005, a maximum
2429	2429	20 of $10,000 contributed in the taxable year to (i) a
2430	2430	21 College Savings Pool account under Section 16.5 of the
2431	2431	22 State Treasurer Act or (ii) the Illinois Prepaid
2432	2432	23 Tuition Trust Fund, except that amounts excluded from
2433	2433	24 gross income under Section 529(c)(3)(C)(i) of the
2434	2434	25 Internal Revenue Code shall not be considered moneys
2435	2435	26 contributed under this subparagraph (Y). For purposes
2436	2436
2437	2437
2438	2438
2439	2439
2440	2440
2441	2441	HB4157 - 67 - LRB103 33557 HLH 63369 b
2442	2442
2443	2443
2444	2444	HB4157- 68 -LRB103 33557 HLH 63369 b HB4157 - 68 - LRB103 33557 HLH 63369 b
2445	2445	HB4157 - 68 - LRB103 33557 HLH 63369 b
2446	2446	1 of this subparagraph, contributions made by an
2447	2447	2 employer on behalf of an employee, or matching
2448	2448	3 contributions made by an employee, shall be treated as
2449	2449	4 made by the employee. This subparagraph (Y) is exempt
2450	2450	5 from the provisions of Section 250;
2451	2451	6 (Z) For taxable years 2001 and thereafter, for the
2452	2452	7 taxable year in which the bonus depreciation deduction
2453	2453	8 is taken on the taxpayer's federal income tax return
2454	2454	9 under subsection (k) of Section 168 of the Internal
2455	2455	10 Revenue Code and for each applicable taxable year
2456	2456	11 thereafter, an amount equal to "x", where:
2457	2457	12 (1) "y" equals the amount of the depreciation
2458	2458	13 deduction taken for the taxable year on the
2459	2459	14 taxpayer's federal income tax return on property
2460	2460	15 for which the bonus depreciation deduction was
2461	2461	16 taken in any year under subsection (k) of Section
2462	2462	17 168 of the Internal Revenue Code, but not
2463	2463	18 including the bonus depreciation deduction;
2464	2464	19 (2) for taxable years ending on or before
2465	2465	20 December 31, 2005, "x" equals "y" multiplied by 30
2466	2466	21 and then divided by 70 (or "y" multiplied by
2467	2467	22 0.429); and
2468	2468	23 (3) for taxable years ending after December
2469	2469	24 31, 2005:
2470	2470	25 (i) for property on which a bonus
2471	2471	26 depreciation deduction of 30% of the adjusted
2472	2472
2473	2473
2474	2474
2475	2475
2476	2476
2477	2477	HB4157 - 68 - LRB103 33557 HLH 63369 b
2478	2478
2479	2479
2480	2480	HB4157- 69 -LRB103 33557 HLH 63369 b HB4157 - 69 - LRB103 33557 HLH 63369 b
2481	2481	HB4157 - 69 - LRB103 33557 HLH 63369 b
2482	2482	1 basis was taken, "x" equals "y" multiplied by
2483	2483	2 30 and then divided by 70 (or "y" multiplied
2484	2484	3 by 0.429);
2485	2485	4 (ii) for property on which a bonus
2486	2486	5 depreciation deduction of 50% of the adjusted
2487	2487	6 basis was taken, "x" equals "y" multiplied by
2488	2488	7 1.0;
2489	2489	8 (iii) for property on which a bonus
2490	2490	9 depreciation deduction of 100% of the adjusted
2491	2491	10 basis was taken in a taxable year ending on or
2492	2492	11 after December 31, 2021, "x" equals the
2493	2493	12 depreciation deduction that would be allowed
2494	2494	13 on that property if the taxpayer had made the
2495	2495	14 election under Section 168(k)(7) of the
2496	2496	15 Internal Revenue Code to not claim bonus
2497	2497	16 depreciation on that property; and
2498	2498	17 (iv) for property on which a bonus
2499	2499	18 depreciation deduction of a percentage other
2500	2500	19 than 30%, 50% or 100% of the adjusted basis
2501	2501	20 was taken in a taxable year ending on or after
2502	2502	21 December 31, 2021, "x" equals "y" multiplied
2503	2503	22 by 100 times the percentage bonus depreciation
2504	2504	23 on the property (that is, 100(bonus%)) and
2505	2505	24 then divided by 100 times 1 minus the
2506	2506	25 percentage bonus depreciation on the property
2507	2507	26 (that is, 100(1bonus%)).
2508	2508
2509	2509
2510	2510
2511	2511
2512	2512
2513	2513	HB4157 - 69 - LRB103 33557 HLH 63369 b
2514	2514
2515	2515
2516	2516	HB4157- 70 -LRB103 33557 HLH 63369 b HB4157 - 70 - LRB103 33557 HLH 63369 b
2517	2517	HB4157 - 70 - LRB103 33557 HLH 63369 b
2518	2518	1 The aggregate amount deducted under this
2519	2519	2 subparagraph in all taxable years for any one piece of
2520	2520	3 property may not exceed the amount of the bonus
2521	2521	4 depreciation deduction taken on that property on the
2522	2522	5 taxpayer's federal income tax return under subsection
2523	2523	6 (k) of Section 168 of the Internal Revenue Code. This
2524	2524	7 subparagraph (Z) is exempt from the provisions of
2525	2525	8 Section 250;
2526	2526	9 (AA) If the taxpayer sells, transfers, abandons,
2527	2527	10 or otherwise disposes of property for which the
2528	2528	11 taxpayer was required in any taxable year to make an
2529	2529	12 addition modification under subparagraph (D-15), then
2530	2530	13 an amount equal to that addition modification.
2531	2531	14 If the taxpayer continues to own property through
2532	2532	15 the last day of the last tax year for which a
2533	2533	16 subtraction is allowed with respect to that property
2534	2534	17 under subparagraph (Z) and for which the taxpayer was
2535	2535	18 required in any taxable year to make an addition
2536	2536	19 modification under subparagraph (D-15), then an amount
2537	2537	20 equal to that addition modification.
2538	2538	21 The taxpayer is allowed to take the deduction
2539	2539	22 under this subparagraph only once with respect to any
2540	2540	23 one piece of property.
2541	2541	24 This subparagraph (AA) is exempt from the
2542	2542	25 provisions of Section 250;
2543	2543	26 (BB) Any amount included in adjusted gross income,
2544	2544
2545	2545
2546	2546
2547	2547
2548	2548
2549	2549	HB4157 - 70 - LRB103 33557 HLH 63369 b
2550	2550
2551	2551
2552	2552	HB4157- 71 -LRB103 33557 HLH 63369 b HB4157 - 71 - LRB103 33557 HLH 63369 b
2553	2553	HB4157 - 71 - LRB103 33557 HLH 63369 b
2554	2554	1 other than salary, received by a driver in a
2555	2555	2 ridesharing arrangement using a motor vehicle;
2556	2556	3 (CC) The amount of (i) any interest income (net of
2557	2557	4 the deductions allocable thereto) taken into account
2558	2558	5 for the taxable year with respect to a transaction
2559	2559	6 with a taxpayer that is required to make an addition
2560	2560	7 modification with respect to such transaction under
2561	2561	8 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
2562	2562	9 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
2563	2563	10 the amount of that addition modification, and (ii) any
2564	2564	11 income from intangible property (net of the deductions
2565	2565	12 allocable thereto) taken into account for the taxable
2566	2566	13 year with respect to a transaction with a taxpayer
2567	2567	14 that is required to make an addition modification with
2568	2568	15 respect to such transaction under Section
2569	2569	16 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
2570	2570	17 203(d)(2)(D-8), but not to exceed the amount of that
2571	2571	18 addition modification. This subparagraph (CC) is
2572	2572	19 exempt from the provisions of Section 250;
2573	2573	20 (DD) An amount equal to the interest income taken
2574	2574	21 into account for the taxable year (net of the
2575	2575	22 deductions allocable thereto) with respect to
2576	2576	23 transactions with (i) a foreign person who would be a
2577	2577	24 member of the taxpayer's unitary business group but
2578	2578	25 for the fact that the foreign person's business
2579	2579	26 activity outside the United States is 80% or more of
2580	2580
2581	2581
2582	2582
2583	2583
2584	2584
2585	2585	HB4157 - 71 - LRB103 33557 HLH 63369 b
2586	2586
2587	2587
2588	2588	HB4157- 72 -LRB103 33557 HLH 63369 b HB4157 - 72 - LRB103 33557 HLH 63369 b
2589	2589	HB4157 - 72 - LRB103 33557 HLH 63369 b
2590	2590	1 that person's total business activity and (ii) for
2591	2591	2 taxable years ending on or after December 31, 2008, to
2592	2592	3 a person who would be a member of the same unitary
2593	2593	4 business group but for the fact that the person is
2594	2594	5 prohibited under Section 1501(a)(27) from being
2595	2595	6 included in the unitary business group because he or
2596	2596	7 she is ordinarily required to apportion business
2597	2597	8 income under different subsections of Section 304, but
2598	2598	9 not to exceed the addition modification required to be
2599	2599	10 made for the same taxable year under Section
2600	2600	11 203(a)(2)(D-17) for interest paid, accrued, or
2601	2601	12 incurred, directly or indirectly, to the same person.
2602	2602	13 This subparagraph (DD) is exempt from the provisions
2603	2603	14 of Section 250;
2604	2604	15 (EE) An amount equal to the income from intangible
2605	2605	16 property taken into account for the taxable year (net
2606	2606	17 of the deductions allocable thereto) with respect to
2607	2607	18 transactions with (i) a foreign person who would be a
2608	2608	19 member of the taxpayer's unitary business group but
2609	2609	20 for the fact that the foreign person's business
2610	2610	21 activity outside the United States is 80% or more of
2611	2611	22 that person's total business activity and (ii) for
2612	2612	23 taxable years ending on or after December 31, 2008, to
2613	2613	24 a person who would be a member of the same unitary
2614	2614	25 business group but for the fact that the person is
2615	2615	26 prohibited under Section 1501(a)(27) from being
2616	2616
2617	2617
2618	2618
2619	2619
2620	2620
2621	2621	HB4157 - 72 - LRB103 33557 HLH 63369 b
2622	2622
2623	2623
2624	2624	HB4157- 73 -LRB103 33557 HLH 63369 b HB4157 - 73 - LRB103 33557 HLH 63369 b
2625	2625	HB4157 - 73 - LRB103 33557 HLH 63369 b
2626	2626	1 included in the unitary business group because he or
2627	2627	2 she is ordinarily required to apportion business
2628	2628	3 income under different subsections of Section 304, but
2629	2629	4 not to exceed the addition modification required to be
2630	2630	5 made for the same taxable year under Section
2631	2631	6 203(a)(2)(D-18) for intangible expenses and costs
2632	2632	7 paid, accrued, or incurred, directly or indirectly, to
2633	2633	8 the same foreign person. This subparagraph (EE) is
2634	2634	9 exempt from the provisions of Section 250;
2635	2635	10 (FF) An amount equal to any amount awarded to the
2636	2636	11 taxpayer during the taxable year by the Court of
2637	2637	12 Claims under subsection (c) of Section 8 of the Court
2638	2638	13 of Claims Act for time unjustly served in a State
2639	2639	14 prison. This subparagraph (FF) is exempt from the
2640	2640	15 provisions of Section 250;
2641	2641	16 (GG) For taxable years ending on or after December
2642	2642	17 31, 2011, in the case of a taxpayer who was required to
2643	2643	18 add back any insurance premiums under Section
2644	2644	19 203(a)(2)(D-19), such taxpayer may elect to subtract
2645	2645	20 that part of a reimbursement received from the
2646	2646	21 insurance company equal to the amount of the expense
2647	2647	22 or loss (including expenses incurred by the insurance
2648	2648	23 company) that would have been taken into account as a
2649	2649	24 deduction for federal income tax purposes if the
2650	2650	25 expense or loss had been uninsured. If a taxpayer
2651	2651	26 makes the election provided for by this subparagraph
2652	2652
2653	2653
2654	2654
2655	2655
2656	2656
2657	2657	HB4157 - 73 - LRB103 33557 HLH 63369 b
2658	2658
2659	2659
2660	2660	HB4157- 74 -LRB103 33557 HLH 63369 b HB4157 - 74 - LRB103 33557 HLH 63369 b
2661	2661	HB4157 - 74 - LRB103 33557 HLH 63369 b
2662	2662	1 (GG), the insurer to which the premiums were paid must
2663	2663	2 add back to income the amount subtracted by the
2664	2664	3 taxpayer pursuant to this subparagraph (GG). This
2665	2665	4 subparagraph (GG) is exempt from the provisions of
2666	2666	5 Section 250;
2667	2667	6 (HH) For taxable years beginning on or after
2668	2668	7 January 1, 2018 and prior to January 1, 2028, a maximum
2669	2669	8 of $10,000 contributed in the taxable year to a
2670	2670	9 qualified ABLE account under Section 16.6 of the State
2671	2671	10 Treasurer Act, except that amounts excluded from gross
2672	2672	11 income under Section 529(c)(3)(C)(i) or Section
2673	2673	12 529A(c)(1)(C) of the Internal Revenue Code shall not
2674	2674	13 be considered moneys contributed under this
2675	2675	14 subparagraph (HH). For purposes of this subparagraph
2676	2676	15 (HH), contributions made by an employer on behalf of
2677	2677	16 an employee, or matching contributions made by an
2678	2678	17 employee, shall be treated as made by the employee;
2679	2679	18 and
2680	2680	19 (II) For taxable years that begin on or after
2681	2681	20 January 1, 2021 and begin before January 1, 2026, the
2682	2682	21 amount that is included in the taxpayer's federal
2683	2683	22 adjusted gross income pursuant to Section 61 of the
2684	2684	23 Internal Revenue Code as discharge of indebtedness
2685	2685	24 attributable to student loan forgiveness and that is
2686	2686	25 not excluded from the taxpayer's federal adjusted
2687	2687	26 gross income pursuant to paragraph (5) of subsection
2688	2688
2689	2689
2690	2690
2691	2691
2692	2692
2693	2693	HB4157 - 74 - LRB103 33557 HLH 63369 b
2694	2694
2695	2695
2696	2696	HB4157- 75 -LRB103 33557 HLH 63369 b HB4157 - 75 - LRB103 33557 HLH 63369 b
2697	2697	HB4157 - 75 - LRB103 33557 HLH 63369 b
2698	2698	1 (f) of Section 108 of the Internal Revenue Code.
2699	2699	2 (b) Corporations.
2700	2700	3 (1) In general. In the case of a corporation, base
2701	2701	4 income means an amount equal to the taxpayer's taxable
2702	2702	5 income for the taxable year as modified by paragraph (2).
2703	2703	6 (2) Modifications. The taxable income referred to in
2704	2704	7 paragraph (1) shall be modified by adding thereto the sum
2705	2705	8 of the following amounts:
2706	2706	9 (A) An amount equal to all amounts paid or accrued
2707	2707	10 to the taxpayer as interest and all distributions
2708	2708	11 received from regulated investment companies during
2709	2709	12 the taxable year to the extent excluded from gross
2710	2710	13 income in the computation of taxable income;
2711	2711	14 (B) An amount equal to the amount of tax imposed by
2712	2712	15 this Act to the extent deducted from gross income in
2713	2713	16 the computation of taxable income for the taxable
2714	2714	17 year;
2715	2715	18 (C) In the case of a regulated investment company,
2716	2716	19 an amount equal to the excess of (i) the net long-term
2717	2717	20 capital gain for the taxable year, over (ii) the
2718	2718	21 amount of the capital gain dividends designated as
2719	2719	22 such in accordance with Section 852(b)(3)(C) of the
2720	2720	23 Internal Revenue Code and any amount designated under
2721	2721	24 Section 852(b)(3)(D) of the Internal Revenue Code,
2722	2722	25 attributable to the taxable year (this amendatory Act
2723	2723
2724	2724
2725	2725
2726	2726
2727	2727
2728	2728	HB4157 - 75 - LRB103 33557 HLH 63369 b
2729	2729
2730	2730
2731	2731	HB4157- 76 -LRB103 33557 HLH 63369 b HB4157 - 76 - LRB103 33557 HLH 63369 b
2732	2732	HB4157 - 76 - LRB103 33557 HLH 63369 b
2733	2733	1 of 1995 (Public Act 89-89) is declarative of existing
2734	2734	2 law and is not a new enactment);
2735	2735	3 (D) The amount of any net operating loss deduction
2736	2736	4 taken in arriving at taxable income, other than a net
2737	2737	5 operating loss carried forward from a taxable year
2738	2738	6 ending prior to December 31, 1986;
2739	2739	7 (E) For taxable years in which a net operating
2740	2740	8 loss carryback or carryforward from a taxable year
2741	2741	9 ending prior to December 31, 1986 is an element of
2742	2742	10 taxable income under paragraph (1) of subsection (e)
2743	2743	11 or subparagraph (E) of paragraph (2) of subsection
2744	2744	12 (e), the amount by which addition modifications other
2745	2745	13 than those provided by this subparagraph (E) exceeded
2746	2746	14 subtraction modifications in such earlier taxable
2747	2747	15 year, with the following limitations applied in the
2748	2748	16 order that they are listed:
2749	2749	17 (i) the addition modification relating to the
2750	2750	18 net operating loss carried back or forward to the
2751	2751	19 taxable year from any taxable year ending prior to
2752	2752	20 December 31, 1986 shall be reduced by the amount
2753	2753	21 of addition modification under this subparagraph
2754	2754	22 (E) which related to that net operating loss and
2755	2755	23 which was taken into account in calculating the
2756	2756	24 base income of an earlier taxable year, and
2757	2757	25 (ii) the addition modification relating to the
2758	2758	26 net operating loss carried back or forward to the
2759	2759
2760	2760
2761	2761
2762	2762
2763	2763
2764	2764	HB4157 - 76 - LRB103 33557 HLH 63369 b
2765	2765
2766	2766
2767	2767	HB4157- 77 -LRB103 33557 HLH 63369 b HB4157 - 77 - LRB103 33557 HLH 63369 b
2768	2768	HB4157 - 77 - LRB103 33557 HLH 63369 b
2769	2769	1 taxable year from any taxable year ending prior to
2770	2770	2 December 31, 1986 shall not exceed the amount of
2771	2771	3 such carryback or carryforward;
2772	2772	4 For taxable years in which there is a net
2773	2773	5 operating loss carryback or carryforward from more
2774	2774	6 than one other taxable year ending prior to December
2775	2775	7 31, 1986, the addition modification provided in this
2776	2776	8 subparagraph (E) shall be the sum of the amounts
2777	2777	9 computed independently under the preceding provisions
2778	2778	10 of this subparagraph (E) for each such taxable year;
2779	2779	11 (E-5) For taxable years ending after December 31,
2780	2780	12 1997, an amount equal to any eligible remediation
2781	2781	13 costs that the corporation deducted in computing
2782	2782	14 adjusted gross income and for which the corporation
2783	2783	15 claims a credit under subsection (l) of Section 201;
2784	2784	16 (E-10) For taxable years 2001 and thereafter, an
2785	2785	17 amount equal to the bonus depreciation deduction taken
2786	2786	18 on the taxpayer's federal income tax return for the
2787	2787	19 taxable year under subsection (k) of Section 168 of
2788	2788	20 the Internal Revenue Code;
2789	2789	21 (E-11) If the taxpayer sells, transfers, abandons,
2790	2790	22 or otherwise disposes of property for which the
2791	2791	23 taxpayer was required in any taxable year to make an
2792	2792	24 addition modification under subparagraph (E-10), then
2793	2793	25 an amount equal to the aggregate amount of the
2794	2794	26 deductions taken in all taxable years under
2795	2795
2796	2796
2797	2797
2798	2798
2799	2799
2800	2800	HB4157 - 77 - LRB103 33557 HLH 63369 b
2801	2801
2802	2802
2803	2803	HB4157- 78 -LRB103 33557 HLH 63369 b HB4157 - 78 - LRB103 33557 HLH 63369 b
2804	2804	HB4157 - 78 - LRB103 33557 HLH 63369 b
2805	2805	1 subparagraph (T) with respect to that property.
2806	2806	2 If the taxpayer continues to own property through
2807	2807	3 the last day of the last tax year for which a
2808	2808	4 subtraction is allowed with respect to that property
2809	2809	5 under subparagraph (T) and for which the taxpayer was
2810	2810	6 allowed in any taxable year to make a subtraction
2811	2811	7 modification under subparagraph (T), then an amount
2812	2812	8 equal to that subtraction modification.
2813	2813	9 The taxpayer is required to make the addition
2814	2814	10 modification under this subparagraph only once with
2815	2815	11 respect to any one piece of property;
2816	2816	12 (E-12) An amount equal to the amount otherwise
2817	2817	13 allowed as a deduction in computing base income for
2818	2818	14 interest paid, accrued, or incurred, directly or
2819	2819	15 indirectly, (i) for taxable years ending on or after
2820	2820	16 December 31, 2004, to a foreign person who would be a
2821	2821	17 member of the same unitary business group but for the
2822	2822	18 fact the foreign person's business activity outside
2823	2823	19 the United States is 80% or more of the foreign
2824	2824	20 person's total business activity and (ii) for taxable
2825	2825	21 years ending on or after December 31, 2008, to a person
2826	2826	22 who would be a member of the same unitary business
2827	2827	23 group but for the fact that the person is prohibited
2828	2828	24 under Section 1501(a)(27) from being included in the
2829	2829	25 unitary business group because he or she is ordinarily
2830	2830	26 required to apportion business income under different
2831	2831
2832	2832
2833	2833
2834	2834
2835	2835
2836	2836	HB4157 - 78 - LRB103 33557 HLH 63369 b
2837	2837
2838	2838
2839	2839	HB4157- 79 -LRB103 33557 HLH 63369 b HB4157 - 79 - LRB103 33557 HLH 63369 b
2840	2840	HB4157 - 79 - LRB103 33557 HLH 63369 b
2841	2841	1 subsections of Section 304. The addition modification
2842	2842	2 required by this subparagraph shall be reduced to the
2843	2843	3 extent that dividends were included in base income of
2844	2844	4 the unitary group for the same taxable year and
2845	2845	5 received by the taxpayer or by a member of the
2846	2846	6 taxpayer's unitary business group (including amounts
2847	2847	7 included in gross income pursuant to Sections 951
2848	2848	8 through 964 of the Internal Revenue Code and amounts
2849	2849	9 included in gross income under Section 78 of the
2850	2850	10 Internal Revenue Code) with respect to the stock of
2851	2851	11 the same person to whom the interest was paid,
2852	2852	12 accrued, or incurred.
2853	2853	13 This paragraph shall not apply to the following:
2854	2854	14 (i) an item of interest paid, accrued, or
2855	2855	15 incurred, directly or indirectly, to a person who
2856	2856	16 is subject in a foreign country or state, other
2857	2857	17 than a state which requires mandatory unitary
2858	2858	18 reporting, to a tax on or measured by net income
2859	2859	19 with respect to such interest; or
2860	2860	20 (ii) an item of interest paid, accrued, or
2861	2861	21 incurred, directly or indirectly, to a person if
2862	2862	22 the taxpayer can establish, based on a
2863	2863	23 preponderance of the evidence, both of the
2864	2864	24 following:
2865	2865	25 (a) the person, during the same taxable
2866	2866	26 year, paid, accrued, or incurred, the interest
2867	2867
2868	2868
2869	2869
2870	2870
2871	2871
2872	2872	HB4157 - 79 - LRB103 33557 HLH 63369 b
2873	2873
2874	2874
2875	2875	HB4157- 80 -LRB103 33557 HLH 63369 b HB4157 - 80 - LRB103 33557 HLH 63369 b
2876	2876	HB4157 - 80 - LRB103 33557 HLH 63369 b
2877	2877	1 to a person that is not a related member, and
2878	2878	2 (b) the transaction giving rise to the
2879	2879	3 interest expense between the taxpayer and the
2880	2880	4 person did not have as a principal purpose the
2881	2881	5 avoidance of Illinois income tax, and is paid
2882	2882	6 pursuant to a contract or agreement that
2883	2883	7 reflects an arm's-length interest rate and
2884	2884	8 terms; or
2885	2885	9 (iii) the taxpayer can establish, based on
2886	2886	10 clear and convincing evidence, that the interest
2887	2887	11 paid, accrued, or incurred relates to a contract
2888	2888	12 or agreement entered into at arm's-length rates
2889	2889	13 and terms and the principal purpose for the
2890	2890	14 payment is not federal or Illinois tax avoidance;
2891	2891	15 or
2892	2892	16 (iv) an item of interest paid, accrued, or
2893	2893	17 incurred, directly or indirectly, to a person if
2894	2894	18 the taxpayer establishes by clear and convincing
2895	2895	19 evidence that the adjustments are unreasonable; or
2896	2896	20 if the taxpayer and the Director agree in writing
2897	2897	21 to the application or use of an alternative method
2898	2898	22 of apportionment under Section 304(f).
2899	2899	23 Nothing in this subsection shall preclude the
2900	2900	24 Director from making any other adjustment
2901	2901	25 otherwise allowed under Section 404 of this Act
2902	2902	26 for any tax year beginning after the effective
2903	2903
2904	2904
2905	2905
2906	2906
2907	2907
2908	2908	HB4157 - 80 - LRB103 33557 HLH 63369 b
2909	2909
2910	2910
2911	2911	HB4157- 81 -LRB103 33557 HLH 63369 b HB4157 - 81 - LRB103 33557 HLH 63369 b
2912	2912	HB4157 - 81 - LRB103 33557 HLH 63369 b
2913	2913	1 date of this amendment provided such adjustment is
2914	2914	2 made pursuant to regulation adopted by the
2915	2915	3 Department and such regulations provide methods
2916	2916	4 and standards by which the Department will utilize
2917	2917	5 its authority under Section 404 of this Act;
2918	2918	6 (E-13) An amount equal to the amount of intangible
2919	2919	7 expenses and costs otherwise allowed as a deduction in
2920	2920	8 computing base income, and that were paid, accrued, or
2921	2921	9 incurred, directly or indirectly, (i) for taxable
2922	2922	10 years ending on or after December 31, 2004, to a
2923	2923	11 foreign person who would be a member of the same
2924	2924	12 unitary business group but for the fact that the
2925	2925	13 foreign person's business activity outside the United
2926	2926	14 States is 80% or more of that person's total business
2927	2927	15 activity and (ii) for taxable years ending on or after
2928	2928	16 December 31, 2008, to a person who would be a member of
2929	2929	17 the same unitary business group but for the fact that
2930	2930	18 the person is prohibited under Section 1501(a)(27)
2931	2931	19 from being included in the unitary business group
2932	2932	20 because he or she is ordinarily required to apportion
2933	2933	21 business income under different subsections of Section
2934	2934	22 304. The addition modification required by this
2935	2935	23 subparagraph shall be reduced to the extent that
2936	2936	24 dividends were included in base income of the unitary
2937	2937	25 group for the same taxable year and received by the
2938	2938	26 taxpayer or by a member of the taxpayer's unitary
2939	2939
2940	2940
2941	2941
2942	2942
2943	2943
2944	2944	HB4157 - 81 - LRB103 33557 HLH 63369 b
2945	2945
2946	2946
2947	2947	HB4157- 82 -LRB103 33557 HLH 63369 b HB4157 - 82 - LRB103 33557 HLH 63369 b
2948	2948	HB4157 - 82 - LRB103 33557 HLH 63369 b
2949	2949	1 business group (including amounts included in gross
2950	2950	2 income pursuant to Sections 951 through 964 of the
2951	2951	3 Internal Revenue Code and amounts included in gross
2952	2952	4 income under Section 78 of the Internal Revenue Code)
2953	2953	5 with respect to the stock of the same person to whom
2954	2954	6 the intangible expenses and costs were directly or
2955	2955	7 indirectly paid, incurred, or accrued. The preceding
2956	2956	8 sentence shall not apply to the extent that the same
2957	2957	9 dividends caused a reduction to the addition
2958	2958	10 modification required under Section 203(b)(2)(E-12) of
2959	2959	11 this Act. As used in this subparagraph, the term
2960	2960	12 "intangible expenses and costs" includes (1) expenses,
2961	2961	13 losses, and costs for, or related to, the direct or
2962	2962	14 indirect acquisition, use, maintenance or management,
2963	2963	15 ownership, sale, exchange, or any other disposition of
2964	2964	16 intangible property; (2) losses incurred, directly or
2965	2965	17 indirectly, from factoring transactions or discounting
2966	2966	18 transactions; (3) royalty, patent, technical, and
2967	2967	19 copyright fees; (4) licensing fees; and (5) other
2968	2968	20 similar expenses and costs. For purposes of this
2969	2969	21 subparagraph, "intangible property" includes patents,
2970	2970	22 patent applications, trade names, trademarks, service
2971	2971	23 marks, copyrights, mask works, trade secrets, and
2972	2972	24 similar types of intangible assets.
2973	2973	25 This paragraph shall not apply to the following:
2974	2974	26 (i) any item of intangible expenses or costs
2975	2975
2976	2976
2977	2977
2978	2978
2979	2979
2980	2980	HB4157 - 82 - LRB103 33557 HLH 63369 b
2981	2981
2982	2982
2983	2983	HB4157- 83 -LRB103 33557 HLH 63369 b HB4157 - 83 - LRB103 33557 HLH 63369 b
2984	2984	HB4157 - 83 - LRB103 33557 HLH 63369 b
2985	2985	1 paid, accrued, or incurred, directly or
2986	2986	2 indirectly, from a transaction with a person who
2987	2987	3 is subject in a foreign country or state, other
2988	2988	4 than a state which requires mandatory unitary
2989	2989	5 reporting, to a tax on or measured by net income
2990	2990	6 with respect to such item; or
2991	2991	7 (ii) any item of intangible expense or cost
2992	2992	8 paid, accrued, or incurred, directly or
2993	2993	9 indirectly, if the taxpayer can establish, based
2994	2994	10 on a preponderance of the evidence, both of the
2995	2995	11 following:
2996	2996	12 (a) the person during the same taxable
2997	2997	13 year paid, accrued, or incurred, the
2998	2998	14 intangible expense or cost to a person that is
2999	2999	15 not a related member, and
3000	3000	16 (b) the transaction giving rise to the
3001	3001	17 intangible expense or cost between the
3002	3002	18 taxpayer and the person did not have as a
3003	3003	19 principal purpose the avoidance of Illinois
3004	3004	20 income tax, and is paid pursuant to a contract
3005	3005	21 or agreement that reflects arm's-length terms;
3006	3006	22 or
3007	3007	23 (iii) any item of intangible expense or cost
3008	3008	24 paid, accrued, or incurred, directly or
3009	3009	25 indirectly, from a transaction with a person if
3010	3010	26 the taxpayer establishes by clear and convincing
3011	3011
3012	3012
3013	3013
3014	3014
3015	3015
3016	3016	HB4157 - 83 - LRB103 33557 HLH 63369 b
3017	3017
3018	3018
3019	3019	HB4157- 84 -LRB103 33557 HLH 63369 b HB4157 - 84 - LRB103 33557 HLH 63369 b
3020	3020	HB4157 - 84 - LRB103 33557 HLH 63369 b
3021	3021	1 evidence, that the adjustments are unreasonable;
3022	3022	2 or if the taxpayer and the Director agree in
3023	3023	3 writing to the application or use of an
3024	3024	4 alternative method of apportionment under Section
3025	3025	5 304(f);
3026	3026	6 Nothing in this subsection shall preclude the
3027	3027	7 Director from making any other adjustment
3028	3028	8 otherwise allowed under Section 404 of this Act
3029	3029	9 for any tax year beginning after the effective
3030	3030	10 date of this amendment provided such adjustment is
3031	3031	11 made pursuant to regulation adopted by the
3032	3032	12 Department and such regulations provide methods
3033	3033	13 and standards by which the Department will utilize
3034	3034	14 its authority under Section 404 of this Act;
3035	3035	15 (E-14) For taxable years ending on or after
3036	3036	16 December 31, 2008, an amount equal to the amount of
3037	3037	17 insurance premium expenses and costs otherwise allowed
3038	3038	18 as a deduction in computing base income, and that were
3039	3039	19 paid, accrued, or incurred, directly or indirectly, to
3040	3040	20 a person who would be a member of the same unitary
3041	3041	21 business group but for the fact that the person is
3042	3042	22 prohibited under Section 1501(a)(27) from being
3043	3043	23 included in the unitary business group because he or
3044	3044	24 she is ordinarily required to apportion business
3045	3045	25 income under different subsections of Section 304. The
3046	3046	26 addition modification required by this subparagraph
3047	3047
3048	3048
3049	3049
3050	3050
3051	3051
3052	3052	HB4157 - 84 - LRB103 33557 HLH 63369 b
3053	3053
3054	3054
3055	3055	HB4157- 85 -LRB103 33557 HLH 63369 b HB4157 - 85 - LRB103 33557 HLH 63369 b
3056	3056	HB4157 - 85 - LRB103 33557 HLH 63369 b
3057	3057	1 shall be reduced to the extent that dividends were
3058	3058	2 included in base income of the unitary group for the
3059	3059	3 same taxable year and received by the taxpayer or by a
3060	3060	4 member of the taxpayer's unitary business group
3061	3061	5 (including amounts included in gross income under
3062	3062	6 Sections 951 through 964 of the Internal Revenue Code
3063	3063	7 and amounts included in gross income under Section 78
3064	3064	8 of the Internal Revenue Code) with respect to the
3065	3065	9 stock of the same person to whom the premiums and costs
3066	3066	10 were directly or indirectly paid, incurred, or
3067	3067	11 accrued. The preceding sentence does not apply to the
3068	3068	12 extent that the same dividends caused a reduction to
3069	3069	13 the addition modification required under Section
3070	3070	14 203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this
3071	3071	15 Act;
3072	3072	16 (E-15) For taxable years beginning after December
3073	3073	17 31, 2008, any deduction for dividends paid by a
3074	3074	18 captive real estate investment trust that is allowed
3075	3075	19 to a real estate investment trust under Section
3076	3076	20 857(b)(2)(B) of the Internal Revenue Code for
3077	3077	21 dividends paid;
3078	3078	22 (E-16) An amount equal to the credit allowable to
3079	3079	23 the taxpayer under Section 218(a) of this Act,
3080	3080	24 determined without regard to Section 218(c) of this
3081	3081	25 Act;
3082	3082	26 (E-17) For taxable years ending on or after
3083	3083
3084	3084
3085	3085
3086	3086
3087	3087
3088	3088	HB4157 - 85 - LRB103 33557 HLH 63369 b
3089	3089
3090	3090
3091	3091	HB4157- 86 -LRB103 33557 HLH 63369 b HB4157 - 86 - LRB103 33557 HLH 63369 b
3092	3092	HB4157 - 86 - LRB103 33557 HLH 63369 b
3093	3093	1 December 31, 2017, an amount equal to the deduction
3094	3094	2 allowed under Section 199 of the Internal Revenue Code
3095	3095	3 for the taxable year;
3096	3096	4 (E-18) for taxable years beginning after December
3097	3097	5 31, 2018, an amount equal to the deduction allowed
3098	3098	6 under Section 250(a)(1)(A) of the Internal Revenue
3099	3099	7 Code for the taxable year;
3100	3100	8 (E-19) for taxable years ending on or after June
3101	3101	9 30, 2021, an amount equal to the deduction allowed
3102	3102	10 under Section 250(a)(1)(B)(i) of the Internal Revenue
3103	3103	11 Code for the taxable year;
3104	3104	12 (E-20) for taxable years ending on or after June
3105	3105	13 30, 2021, an amount equal to the deduction allowed
3106	3106	14 under Sections 243(e) and 245A(a) of the Internal
3107	3107	15 Revenue Code for the taxable year.
3108	3108	16 and by deducting from the total so obtained the sum of the
3109	3109	17 following amounts:
3110	3110	18 (F) An amount equal to the amount of any tax
3111	3111	19 imposed by this Act which was refunded to the taxpayer
3112	3112	20 and included in such total for the taxable year;
3113	3113	21 (G) An amount equal to any amount included in such
3114	3114	22 total under Section 78 of the Internal Revenue Code;
3115	3115	23 (H) In the case of a regulated investment company,
3116	3116	24 an amount equal to the amount of exempt interest
3117	3117	25 dividends as defined in subsection (b)(5) of Section
3118	3118	26 852 of the Internal Revenue Code, paid to shareholders
3119	3119
3120	3120
3121	3121
3122	3122
3123	3123
3124	3124	HB4157 - 86 - LRB103 33557 HLH 63369 b
3125	3125
3126	3126
3127	3127	HB4157- 87 -LRB103 33557 HLH 63369 b HB4157 - 87 - LRB103 33557 HLH 63369 b
3128	3128	HB4157 - 87 - LRB103 33557 HLH 63369 b
3129	3129	1 for the taxable year;
3130	3130	2 (I) With the exception of any amounts subtracted
3131	3131	3 under subparagraph (J), an amount equal to the sum of
3132	3132	4 all amounts disallowed as deductions by (i) Sections
3133	3133	5 171(a)(2) and 265(a)(2) and amounts disallowed as
3134	3134	6 interest expense by Section 291(a)(3) of the Internal
3135	3135	7 Revenue Code, and all amounts of expenses allocable to
3136	3136	8 interest and disallowed as deductions by Section
3137	3137	9 265(a)(1) of the Internal Revenue Code; and (ii) for
3138	3138	10 taxable years ending on or after August 13, 1999,
3139	3139	11 Sections 171(a)(2), 265, 280C, 291(a)(3), and
3140	3140	12 832(b)(5)(B)(i) of the Internal Revenue Code, plus,
3141	3141	13 for tax years ending on or after December 31, 2011,
3142	3142	14 amounts disallowed as deductions by Section 45G(e)(3)
3143	3143	15 of the Internal Revenue Code and, for taxable years
3144	3144	16 ending on or after December 31, 2008, any amount
3145	3145	17 included in gross income under Section 87 of the
3146	3146	18 Internal Revenue Code and the policyholders' share of
3147	3147	19 tax-exempt interest of a life insurance company under
3148	3148	20 Section 807(a)(2)(B) of the Internal Revenue Code (in
3149	3149	21 the case of a life insurance company with gross income
3150	3150	22 from a decrease in reserves for the tax year) or
3151	3151	23 Section 807(b)(1)(B) of the Internal Revenue Code (in
3152	3152	24 the case of a life insurance company allowed a
3153	3153	25 deduction for an increase in reserves for the tax
3154	3154	26 year); the provisions of this subparagraph are exempt
3155	3155
3156	3156
3157	3157
3158	3158
3159	3159
3160	3160	HB4157 - 87 - LRB103 33557 HLH 63369 b
3161	3161
3162	3162
3163	3163	HB4157- 88 -LRB103 33557 HLH 63369 b HB4157 - 88 - LRB103 33557 HLH 63369 b
3164	3164	HB4157 - 88 - LRB103 33557 HLH 63369 b
3165	3165	1 from the provisions of Section 250;
3166	3166	2 (J) An amount equal to all amounts included in
3167	3167	3 such total which are exempt from taxation by this
3168	3168	4 State either by reason of its statutes or Constitution
3169	3169	5 or by reason of the Constitution, treaties or statutes
3170	3170	6 of the United States; provided that, in the case of any
3171	3171	7 statute of this State that exempts income derived from
3172	3172	8 bonds or other obligations from the tax imposed under
3173	3173	9 this Act, the amount exempted shall be the interest
3174	3174	10 net of bond premium amortization;
3175	3175	11 (K) An amount equal to those dividends included in
3176	3176	12 such total which were paid by a corporation which
3177	3177	13 conducts business operations in a River Edge
3178	3178	14 Redevelopment Zone or zones created under the River
3179	3179	15 Edge Redevelopment Zone Act and conducts substantially
3180	3180	16 all of its operations in a River Edge Redevelopment
3181	3181	17 Zone or zones. This subparagraph (K) is exempt from
3182	3182	18 the provisions of Section 250;
3183	3183	19 (L) An amount equal to those dividends included in
3184	3184	20 such total that were paid by a corporation that
3185	3185	21 conducts business operations in a federally designated
3186	3186	22 Foreign Trade Zone or Sub-Zone and that is designated
3187	3187	23 a High Impact Business located in Illinois; provided
3188	3188	24 that dividends eligible for the deduction provided in
3189	3189	25 subparagraph (K) of paragraph 2 of this subsection
3190	3190	26 shall not be eligible for the deduction provided under
3191	3191
3192	3192
3193	3193
3194	3194
3195	3195
3196	3196	HB4157 - 88 - LRB103 33557 HLH 63369 b
3197	3197
3198	3198
3199	3199	HB4157- 89 -LRB103 33557 HLH 63369 b HB4157 - 89 - LRB103 33557 HLH 63369 b
3200	3200	HB4157 - 89 - LRB103 33557 HLH 63369 b
3201	3201	1 this subparagraph (L);
3202	3202	2 (M) For any taxpayer that is a financial
3203	3203	3 organization within the meaning of Section 304(c) of
3204	3204	4 this Act, an amount included in such total as interest
3205	3205	5 income from a loan or loans made by such taxpayer to a
3206	3206	6 borrower, to the extent that such a loan is secured by
3207	3207	7 property which is eligible for the River Edge
3208	3208	8 Redevelopment Zone Investment Credit. To determine the
3209	3209	9 portion of a loan or loans that is secured by property
3210	3210	10 eligible for a Section 201(f) investment credit to the
3211	3211	11 borrower, the entire principal amount of the loan or
3212	3212	12 loans between the taxpayer and the borrower should be
3213	3213	13 divided into the basis of the Section 201(f)
3214	3214	14 investment credit property which secures the loan or
3215	3215	15 loans, using for this purpose the original basis of
3216	3216	16 such property on the date that it was placed in service
3217	3217	17 in the River Edge Redevelopment Zone. The subtraction
3218	3218	18 modification available to the taxpayer in any year
3219	3219	19 under this subsection shall be that portion of the
3220	3220	20 total interest paid by the borrower with respect to
3221	3221	21 such loan attributable to the eligible property as
3222	3222	22 calculated under the previous sentence. This
3223	3223	23 subparagraph (M) is exempt from the provisions of
3224	3224	24 Section 250;
3225	3225	25 (M-1) For any taxpayer that is a financial
3226	3226	26 organization within the meaning of Section 304(c) of
3227	3227
3228	3228
3229	3229
3230	3230
3231	3231
3232	3232	HB4157 - 89 - LRB103 33557 HLH 63369 b
3233	3233
3234	3234
3235	3235	HB4157- 90 -LRB103 33557 HLH 63369 b HB4157 - 90 - LRB103 33557 HLH 63369 b
3236	3236	HB4157 - 90 - LRB103 33557 HLH 63369 b
3237	3237	1 this Act, an amount included in such total as interest
3238	3238	2 income from a loan or loans made by such taxpayer to a
3239	3239	3 borrower, to the extent that such a loan is secured by
3240	3240	4 property which is eligible for the High Impact
3241	3241	5 Business Investment Credit. To determine the portion
3242	3242	6 of a loan or loans that is secured by property eligible
3243	3243	7 for a Section 201(h) investment credit to the
3244	3244	8 borrower, the entire principal amount of the loan or
3245	3245	9 loans between the taxpayer and the borrower should be
3246	3246	10 divided into the basis of the Section 201(h)
3247	3247	11 investment credit property which secures the loan or
3248	3248	12 loans, using for this purpose the original basis of
3249	3249	13 such property on the date that it was placed in service
3250	3250	14 in a federally designated Foreign Trade Zone or
3251	3251	15 Sub-Zone located in Illinois. No taxpayer that is
3252	3252	16 eligible for the deduction provided in subparagraph
3253	3253	17 (M) of paragraph (2) of this subsection shall be
3254	3254	18 eligible for the deduction provided under this
3255	3255	19 subparagraph (M-1). The subtraction modification
3256	3256	20 available to taxpayers in any year under this
3257	3257	21 subsection shall be that portion of the total interest
3258	3258	22 paid by the borrower with respect to such loan
3259	3259	23 attributable to the eligible property as calculated
3260	3260	24 under the previous sentence;
3261	3261	25 (N) Two times any contribution made during the
3262	3262	26 taxable year to a designated zone organization to the
3263	3263
3264	3264
3265	3265
3266	3266
3267	3267
3268	3268	HB4157 - 90 - LRB103 33557 HLH 63369 b
3269	3269
3270	3270
3271	3271	HB4157- 91 -LRB103 33557 HLH 63369 b HB4157 - 91 - LRB103 33557 HLH 63369 b
3272	3272	HB4157 - 91 - LRB103 33557 HLH 63369 b
3273	3273	1 extent that the contribution (i) qualifies as a
3274	3274	2 charitable contribution under subsection (c) of
3275	3275	3 Section 170 of the Internal Revenue Code and (ii)
3276	3276	4 must, by its terms, be used for a project approved by
3277	3277	5 the Department of Commerce and Economic Opportunity
3278	3278	6 under Section 11 of the Illinois Enterprise Zone Act
3279	3279	7 or under Section 10-10 of the River Edge Redevelopment
3280	3280	8 Zone Act. This subparagraph (N) is exempt from the
3281	3281	9 provisions of Section 250;
3282	3282	10 (O) An amount equal to: (i) 85% for taxable years
3283	3283	11 ending on or before December 31, 1992, or, a
3284	3284	12 percentage equal to the percentage allowable under
3285	3285	13 Section 243(a)(1) of the Internal Revenue Code of 1986
3286	3286	14 for taxable years ending after December 31, 1992, of
3287	3287	15 the amount by which dividends included in taxable
3288	3288	16 income and received from a corporation that is not
3289	3289	17 created or organized under the laws of the United
3290	3290	18 States or any state or political subdivision thereof,
3291	3291	19 including, for taxable years ending on or after
3292	3292	20 December 31, 1988, dividends received or deemed
3293	3293	21 received or paid or deemed paid under Sections 951
3294	3294	22 through 965 of the Internal Revenue Code, exceed the
3295	3295	23 amount of the modification provided under subparagraph
3296	3296	24 (G) of paragraph (2) of this subsection (b) which is
3297	3297	25 related to such dividends, and including, for taxable
3298	3298	26 years ending on or after December 31, 2008, dividends
3299	3299
3300	3300
3301	3301
3302	3302
3303	3303
3304	3304	HB4157 - 91 - LRB103 33557 HLH 63369 b
3305	3305
3306	3306
3307	3307	HB4157- 92 -LRB103 33557 HLH 63369 b HB4157 - 92 - LRB103 33557 HLH 63369 b
3308	3308	HB4157 - 92 - LRB103 33557 HLH 63369 b
3309	3309	1 received from a captive real estate investment trust;
3310	3310	2 plus (ii) 100% of the amount by which dividends,
3311	3311	3 included in taxable income and received, including,
3312	3312	4 for taxable years ending on or after December 31,
3313	3313	5 1988, dividends received or deemed received or paid or
3314	3314	6 deemed paid under Sections 951 through 964 of the
3315	3315	7 Internal Revenue Code and including, for taxable years
3316	3316	8 ending on or after December 31, 2008, dividends
3317	3317	9 received from a captive real estate investment trust,
3318	3318	10 from any such corporation specified in clause (i) that
3319	3319	11 would but for the provisions of Section 1504(b)(3) of
3320	3320	12 the Internal Revenue Code be treated as a member of the
3321	3321	13 affiliated group which includes the dividend
3322	3322	14 recipient, exceed the amount of the modification
3323	3323	15 provided under subparagraph (G) of paragraph (2) of
3324	3324	16 this subsection (b) which is related to such
3325	3325	17 dividends. For taxable years ending on or after June
3326	3326	18 30, 2021, (i) for purposes of this subparagraph, the
3327	3327	19 term "dividend" does not include any amount treated as
3328	3328	20 a dividend under Section 1248 of the Internal Revenue
3329	3329	21 Code, and (ii) this subparagraph shall not apply to
3330	3330	22 dividends for which a deduction is allowed under
3331	3331	23 Section 245(a) of the Internal Revenue Code. This
3332	3332	24 subparagraph (O) is exempt from the provisions of
3333	3333	25 Section 250 of this Act;
3334	3334	26 (P) An amount equal to any contribution made to a
3335	3335
3336	3336
3337	3337
3338	3338
3339	3339
3340	3340	HB4157 - 92 - LRB103 33557 HLH 63369 b
3341	3341
3342	3342
3343	3343	HB4157- 93 -LRB103 33557 HLH 63369 b HB4157 - 93 - LRB103 33557 HLH 63369 b
3344	3344	HB4157 - 93 - LRB103 33557 HLH 63369 b
3345	3345	1 job training project established pursuant to the Tax
3346	3346	2 Increment Allocation Redevelopment Act;
3347	3347	3 (Q) An amount equal to the amount of the deduction
3348	3348	4 used to compute the federal income tax credit for
3349	3349	5 restoration of substantial amounts held under claim of
3350	3350	6 right for the taxable year pursuant to Section 1341 of
3351	3351	7 the Internal Revenue Code;
3352	3352	8 (R) On and after July 20, 1999, in the case of an
3353	3353	9 attorney-in-fact with respect to whom an interinsurer
3354	3354	10 or a reciprocal insurer has made the election under
3355	3355	11 Section 835 of the Internal Revenue Code, 26 U.S.C.
3356	3356	12 835, an amount equal to the excess, if any, of the
3357	3357	13 amounts paid or incurred by that interinsurer or
3358	3358	14 reciprocal insurer in the taxable year to the
3359	3359	15 attorney-in-fact over the deduction allowed to that
3360	3360	16 interinsurer or reciprocal insurer with respect to the
3361	3361	17 attorney-in-fact under Section 835(b) of the Internal
3362	3362	18 Revenue Code for the taxable year; the provisions of
3363	3363	19 this subparagraph are exempt from the provisions of
3364	3364	20 Section 250;
3365	3365	21 (S) For taxable years ending on or after December
3366	3366	22 31, 1997, in the case of a Subchapter S corporation, an
3367	3367	23 amount equal to all amounts of income allocable to a
3368	3368	24 shareholder subject to the Personal Property Tax
3369	3369	25 Replacement Income Tax imposed by subsections (c) and
3370	3370	26 (d) of Section 201 of this Act, including amounts
3371	3371
3372	3372
3373	3373
3374	3374
3375	3375
3376	3376	HB4157 - 93 - LRB103 33557 HLH 63369 b
3377	3377
3378	3378
3379	3379	HB4157- 94 -LRB103 33557 HLH 63369 b HB4157 - 94 - LRB103 33557 HLH 63369 b
3380	3380	HB4157 - 94 - LRB103 33557 HLH 63369 b
3381	3381	1 allocable to organizations exempt from federal income
3382	3382	2 tax by reason of Section 501(a) of the Internal
3383	3383	3 Revenue Code. This subparagraph (S) is exempt from the
3384	3384	4 provisions of Section 250;
3385	3385	5 (T) For taxable years 2001 and thereafter, for the
3386	3386	6 taxable year in which the bonus depreciation deduction
3387	3387	7 is taken on the taxpayer's federal income tax return
3388	3388	8 under subsection (k) of Section 168 of the Internal
3389	3389	9 Revenue Code and for each applicable taxable year
3390	3390	10 thereafter, an amount equal to "x", where:
3391	3391	11 (1) "y" equals the amount of the depreciation
3392	3392	12 deduction taken for the taxable year on the
3393	3393	13 taxpayer's federal income tax return on property
3394	3394	14 for which the bonus depreciation deduction was
3395	3395	15 taken in any year under subsection (k) of Section
3396	3396	16 168 of the Internal Revenue Code, but not
3397	3397	17 including the bonus depreciation deduction;
3398	3398	18 (2) for taxable years ending on or before
3399	3399	19 December 31, 2005, "x" equals "y" multiplied by 30
3400	3400	20 and then divided by 70 (or "y" multiplied by
3401	3401	21 0.429); and
3402	3402	22 (3) for taxable years ending after December
3403	3403	23 31, 2005:
3404	3404	24 (i) for property on which a bonus
3405	3405	25 depreciation deduction of 30% of the adjusted
3406	3406	26 basis was taken, "x" equals "y" multiplied by
3407	3407
3408	3408
3409	3409
3410	3410
3411	3411
3412	3412	HB4157 - 94 - LRB103 33557 HLH 63369 b
3413	3413
3414	3414
3415	3415	HB4157- 95 -LRB103 33557 HLH 63369 b HB4157 - 95 - LRB103 33557 HLH 63369 b
3416	3416	HB4157 - 95 - LRB103 33557 HLH 63369 b
3417	3417	1 30 and then divided by 70 (or "y" multiplied
3418	3418	2 by 0.429);
3419	3419	3 (ii) for property on which a bonus
3420	3420	4 depreciation deduction of 50% of the adjusted
3421	3421	5 basis was taken, "x" equals "y" multiplied by
3422	3422	6 1.0;
3423	3423	7 (iii) for property on which a bonus
3424	3424	8 depreciation deduction of 100% of the adjusted
3425	3425	9 basis was taken in a taxable year ending on or
3426	3426	10 after December 31, 2021, "x" equals the
3427	3427	11 depreciation deduction that would be allowed
3428	3428	12 on that property if the taxpayer had made the
3429	3429	13 election under Section 168(k)(7) of the
3430	3430	14 Internal Revenue Code to not claim bonus
3431	3431	15 depreciation on that property; and
3432	3432	16 (iv) for property on which a bonus
3433	3433	17 depreciation deduction of a percentage other
3434	3434	18 than 30%, 50% or 100% of the adjusted basis
3435	3435	19 was taken in a taxable year ending on or after
3436	3436	20 December 31, 2021, "x" equals "y" multiplied
3437	3437	21 by 100 times the percentage bonus depreciation
3438	3438	22 on the property (that is, 100(bonus%)) and
3439	3439	23 then divided by 100 times 1 minus the
3440	3440	24 percentage bonus depreciation on the property
3441	3441	25 (that is, 100(1bonus%)).
3442	3442	26 The aggregate amount deducted under this
3443	3443
3444	3444
3445	3445
3446	3446
3447	3447
3448	3448	HB4157 - 95 - LRB103 33557 HLH 63369 b
3449	3449
3450	3450
3451	3451	HB4157- 96 -LRB103 33557 HLH 63369 b HB4157 - 96 - LRB103 33557 HLH 63369 b
3452	3452	HB4157 - 96 - LRB103 33557 HLH 63369 b
3453	3453	1 subparagraph in all taxable years for any one piece of
3454	3454	2 property may not exceed the amount of the bonus
3455	3455	3 depreciation deduction taken on that property on the
3456	3456	4 taxpayer's federal income tax return under subsection
3457	3457	5 (k) of Section 168 of the Internal Revenue Code. This
3458	3458	6 subparagraph (T) is exempt from the provisions of
3459	3459	7 Section 250;
3460	3460	8 (U) If the taxpayer sells, transfers, abandons, or
3461	3461	9 otherwise disposes of property for which the taxpayer
3462	3462	10 was required in any taxable year to make an addition
3463	3463	11 modification under subparagraph (E-10), then an amount
3464	3464	12 equal to that addition modification.
3465	3465	13 If the taxpayer continues to own property through
3466	3466	14 the last day of the last tax year for which a
3467	3467	15 subtraction is allowed with respect to that property
3468	3468	16 under subparagraph (T) and for which the taxpayer was
3469	3469	17 required in any taxable year to make an addition
3470	3470	18 modification under subparagraph (E-10), then an amount
3471	3471	19 equal to that addition modification.
3472	3472	20 The taxpayer is allowed to take the deduction
3473	3473	21 under this subparagraph only once with respect to any
3474	3474	22 one piece of property.
3475	3475	23 This subparagraph (U) is exempt from the
3476	3476	24 provisions of Section 250;
3477	3477	25 (V) The amount of: (i) any interest income (net of
3478	3478	26 the deductions allocable thereto) taken into account
3479	3479
3480	3480
3481	3481
3482	3482
3483	3483
3484	3484	HB4157 - 96 - LRB103 33557 HLH 63369 b
3485	3485
3486	3486
3487	3487	HB4157- 97 -LRB103 33557 HLH 63369 b HB4157 - 97 - LRB103 33557 HLH 63369 b
3488	3488	HB4157 - 97 - LRB103 33557 HLH 63369 b
3489	3489	1 for the taxable year with respect to a transaction
3490	3490	2 with a taxpayer that is required to make an addition
3491	3491	3 modification with respect to such transaction under
3492	3492	4 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
3493	3493	5 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
3494	3494	6 the amount of such addition modification, (ii) any
3495	3495	7 income from intangible property (net of the deductions
3496	3496	8 allocable thereto) taken into account for the taxable
3497	3497	9 year with respect to a transaction with a taxpayer
3498	3498	10 that is required to make an addition modification with
3499	3499	11 respect to such transaction under Section
3500	3500	12 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
3501	3501	13 203(d)(2)(D-8), but not to exceed the amount of such
3502	3502	14 addition modification, and (iii) any insurance premium
3503	3503	15 income (net of deductions allocable thereto) taken
3504	3504	16 into account for the taxable year with respect to a
3505	3505	17 transaction with a taxpayer that is required to make
3506	3506	18 an addition modification with respect to such
3507	3507	19 transaction under Section 203(a)(2)(D-19), Section
3508	3508	20 203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
3509	3509	21 203(d)(2)(D-9), but not to exceed the amount of that
3510	3510	22 addition modification. This subparagraph (V) is exempt
3511	3511	23 from the provisions of Section 250;
3512	3512	24 (W) An amount equal to the interest income taken
3513	3513	25 into account for the taxable year (net of the
3514	3514	26 deductions allocable thereto) with respect to
3515	3515
3516	3516
3517	3517
3518	3518
3519	3519
3520	3520	HB4157 - 97 - LRB103 33557 HLH 63369 b
3521	3521
3522	3522
3523	3523	HB4157- 98 -LRB103 33557 HLH 63369 b HB4157 - 98 - LRB103 33557 HLH 63369 b
3524	3524	HB4157 - 98 - LRB103 33557 HLH 63369 b
3525	3525	1 transactions with (i) a foreign person who would be a
3526	3526	2 member of the taxpayer's unitary business group but
3527	3527	3 for the fact that the foreign person's business
3528	3528	4 activity outside the United States is 80% or more of
3529	3529	5 that person's total business activity and (ii) for
3530	3530	6 taxable years ending on or after December 31, 2008, to
3531	3531	7 a person who would be a member of the same unitary
3532	3532	8 business group but for the fact that the person is
3533	3533	9 prohibited under Section 1501(a)(27) from being
3534	3534	10 included in the unitary business group because he or
3535	3535	11 she is ordinarily required to apportion business
3536	3536	12 income under different subsections of Section 304, but
3537	3537	13 not to exceed the addition modification required to be
3538	3538	14 made for the same taxable year under Section
3539	3539	15 203(b)(2)(E-12) for interest paid, accrued, or
3540	3540	16 incurred, directly or indirectly, to the same person.
3541	3541	17 This subparagraph (W) is exempt from the provisions of
3542	3542	18 Section 250;
3543	3543	19 (X) An amount equal to the income from intangible
3544	3544	20 property taken into account for the taxable year (net
3545	3545	21 of the deductions allocable thereto) with respect to
3546	3546	22 transactions with (i) a foreign person who would be a
3547	3547	23 member of the taxpayer's unitary business group but
3548	3548	24 for the fact that the foreign person's business
3549	3549	25 activity outside the United States is 80% or more of
3550	3550	26 that person's total business activity and (ii) for
3551	3551
3552	3552
3553	3553
3554	3554
3555	3555
3556	3556	HB4157 - 98 - LRB103 33557 HLH 63369 b
3557	3557
3558	3558
3559	3559	HB4157- 99 -LRB103 33557 HLH 63369 b HB4157 - 99 - LRB103 33557 HLH 63369 b
3560	3560	HB4157 - 99 - LRB103 33557 HLH 63369 b
3561	3561	1 taxable years ending on or after December 31, 2008, to
3562	3562	2 a person who would be a member of the same unitary
3563	3563	3 business group but for the fact that the person is
3564	3564	4 prohibited under Section 1501(a)(27) from being
3565	3565	5 included in the unitary business group because he or
3566	3566	6 she is ordinarily required to apportion business
3567	3567	7 income under different subsections of Section 304, but
3568	3568	8 not to exceed the addition modification required to be
3569	3569	9 made for the same taxable year under Section
3570	3570	10 203(b)(2)(E-13) for intangible expenses and costs
3571	3571	11 paid, accrued, or incurred, directly or indirectly, to
3572	3572	12 the same foreign person. This subparagraph (X) is
3573	3573	13 exempt from the provisions of Section 250;
3574	3574	14 (Y) For taxable years ending on or after December
3575	3575	15 31, 2011, in the case of a taxpayer who was required to
3576	3576	16 add back any insurance premiums under Section
3577	3577	17 203(b)(2)(E-14), such taxpayer may elect to subtract
3578	3578	18 that part of a reimbursement received from the
3579	3579	19 insurance company equal to the amount of the expense
3580	3580	20 or loss (including expenses incurred by the insurance
3581	3581	21 company) that would have been taken into account as a
3582	3582	22 deduction for federal income tax purposes if the
3583	3583	23 expense or loss had been uninsured. If a taxpayer
3584	3584	24 makes the election provided for by this subparagraph
3585	3585	25 (Y), the insurer to which the premiums were paid must
3586	3586	26 add back to income the amount subtracted by the
3587	3587
3588	3588
3589	3589
3590	3590
3591	3591
3592	3592	HB4157 - 99 - LRB103 33557 HLH 63369 b
3593	3593
3594	3594
3595	3595	HB4157- 100 -LRB103 33557 HLH 63369 b HB4157 - 100 - LRB103 33557 HLH 63369 b
3596	3596	HB4157 - 100 - LRB103 33557 HLH 63369 b
3597	3597	1 taxpayer pursuant to this subparagraph (Y). This
3598	3598	2 subparagraph (Y) is exempt from the provisions of
3599	3599	3 Section 250; and
3600	3600	4 (Z) The difference between the nondeductible
3601	3601	5 controlled foreign corporation dividends under Section
3602	3602	6 965(e)(3) of the Internal Revenue Code over the
3603	3603	7 taxable income of the taxpayer, computed without
3604	3604	8 regard to Section 965(e)(2)(A) of the Internal Revenue
3605	3605	9 Code, and without regard to any net operating loss
3606	3606	10 deduction. This subparagraph (Z) is exempt from the
3607	3607	11 provisions of Section 250.
3608	3608	12 (3) Special rule. For purposes of paragraph (2)(A),
3609	3609	13 "gross income" in the case of a life insurance company,
3610	3610	14 for tax years ending on and after December 31, 1994, and
3611	3611	15 prior to December 31, 2011, shall mean the gross
3612	3612	16 investment income for the taxable year and, for tax years
3613	3613	17 ending on or after December 31, 2011, shall mean all
3614	3614	18 amounts included in life insurance gross income under
3615	3615	19 Section 803(a)(3) of the Internal Revenue Code.
3616	3616	20 (c) Trusts and estates.
3617	3617	21 (1) In general. In the case of a trust or estate, base
3618	3618	22 income means an amount equal to the taxpayer's taxable
3619	3619	23 income for the taxable year as modified by paragraph (2).
3620	3620	24 (2) Modifications. Subject to the provisions of
3621	3621	25 paragraph (3), the taxable income referred to in paragraph
3622	3622
3623	3623
3624	3624
3625	3625
3626	3626
3627	3627	HB4157 - 100 - LRB103 33557 HLH 63369 b
3628	3628
3629	3629
3630	3630	HB4157- 101 -LRB103 33557 HLH 63369 b HB4157 - 101 - LRB103 33557 HLH 63369 b
3631	3631	HB4157 - 101 - LRB103 33557 HLH 63369 b
3632	3632	1 (1) shall be modified by adding thereto the sum of the
3633	3633	2 following amounts:
3634	3634	3 (A) An amount equal to all amounts paid or accrued
3635	3635	4 to the taxpayer as interest or dividends during the
3636	3636	5 taxable year to the extent excluded from gross income
3637	3637	6 in the computation of taxable income;
3638	3638	7 (B) In the case of (i) an estate, $600; (ii) a
3639	3639	8 trust which, under its governing instrument, is
3640	3640	9 required to distribute all of its income currently,
3641	3641	10 $300; and (iii) any other trust, $100, but in each such
3642	3642	11 case, only to the extent such amount was deducted in
3643	3643	12 the computation of taxable income;
3644	3644	13 (C) An amount equal to the amount of tax imposed by
3645	3645	14 this Act to the extent deducted from gross income in
3646	3646	15 the computation of taxable income for the taxable
3647	3647	16 year;
3648	3648	17 (D) The amount of any net operating loss deduction
3649	3649	18 taken in arriving at taxable income, other than a net
3650	3650	19 operating loss carried forward from a taxable year
3651	3651	20 ending prior to December 31, 1986;
3652	3652	21 (E) For taxable years in which a net operating
3653	3653	22 loss carryback or carryforward from a taxable year
3654	3654	23 ending prior to December 31, 1986 is an element of
3655	3655	24 taxable income under paragraph (1) of subsection (e)
3656	3656	25 or subparagraph (E) of paragraph (2) of subsection
3657	3657	26 (e), the amount by which addition modifications other
3658	3658
3659	3659
3660	3660
3661	3661
3662	3662
3663	3663	HB4157 - 101 - LRB103 33557 HLH 63369 b
3664	3664
3665	3665
3666	3666	HB4157- 102 -LRB103 33557 HLH 63369 b HB4157 - 102 - LRB103 33557 HLH 63369 b
3667	3667	HB4157 - 102 - LRB103 33557 HLH 63369 b
3668	3668	1 than those provided by this subparagraph (E) exceeded
3669	3669	2 subtraction modifications in such taxable year, with
3670	3670	3 the following limitations applied in the order that
3671	3671	4 they are listed:
3672	3672	5 (i) the addition modification relating to the
3673	3673	6 net operating loss carried back or forward to the
3674	3674	7 taxable year from any taxable year ending prior to
3675	3675	8 December 31, 1986 shall be reduced by the amount
3676	3676	9 of addition modification under this subparagraph
3677	3677	10 (E) which related to that net operating loss and
3678	3678	11 which was taken into account in calculating the
3679	3679	12 base income of an earlier taxable year, and
3680	3680	13 (ii) the addition modification relating to the
3681	3681	14 net operating loss carried back or forward to the
3682	3682	15 taxable year from any taxable year ending prior to
3683	3683	16 December 31, 1986 shall not exceed the amount of
3684	3684	17 such carryback or carryforward;
3685	3685	18 For taxable years in which there is a net
3686	3686	19 operating loss carryback or carryforward from more
3687	3687	20 than one other taxable year ending prior to December
3688	3688	21 31, 1986, the addition modification provided in this
3689	3689	22 subparagraph (E) shall be the sum of the amounts
3690	3690	23 computed independently under the preceding provisions
3691	3691	24 of this subparagraph (E) for each such taxable year;
3692	3692	25 (F) For taxable years ending on or after January
3693	3693	26 1, 1989, an amount equal to the tax deducted pursuant
3694	3694
3695	3695
3696	3696
3697	3697
3698	3698
3699	3699	HB4157 - 102 - LRB103 33557 HLH 63369 b
3700	3700
3701	3701
3702	3702	HB4157- 103 -LRB103 33557 HLH 63369 b HB4157 - 103 - LRB103 33557 HLH 63369 b
3703	3703	HB4157 - 103 - LRB103 33557 HLH 63369 b
3704	3704	1 to Section 164 of the Internal Revenue Code if the
3705	3705	2 trust or estate is claiming the same tax for purposes
3706	3706	3 of the Illinois foreign tax credit under Section 601
3707	3707	4 of this Act;
3708	3708	5 (G) An amount equal to the amount of the capital
3709	3709	6 gain deduction allowable under the Internal Revenue
3710	3710	7 Code, to the extent deducted from gross income in the
3711	3711	8 computation of taxable income;
3712	3712	9 (G-5) For taxable years ending after December 31,
3713	3713	10 1997, an amount equal to any eligible remediation
3714	3714	11 costs that the trust or estate deducted in computing
3715	3715	12 adjusted gross income and for which the trust or
3716	3716	13 estate claims a credit under subsection (l) of Section
3717	3717	14 201;
3718	3718	15 (G-10) For taxable years 2001 and thereafter, an
3719	3719	16 amount equal to the bonus depreciation deduction taken
3720	3720	17 on the taxpayer's federal income tax return for the
3721	3721	18 taxable year under subsection (k) of Section 168 of
3722	3722	19 the Internal Revenue Code; and
3723	3723	20 (G-11) If the taxpayer sells, transfers, abandons,
3724	3724	21 or otherwise disposes of property for which the
3725	3725	22 taxpayer was required in any taxable year to make an
3726	3726	23 addition modification under subparagraph (G-10), then
3727	3727	24 an amount equal to the aggregate amount of the
3728	3728	25 deductions taken in all taxable years under
3729	3729	26 subparagraph (R) with respect to that property.
3730	3730
3731	3731
3732	3732
3733	3733
3734	3734
3735	3735	HB4157 - 103 - LRB103 33557 HLH 63369 b
3736	3736
3737	3737
3738	3738	HB4157- 104 -LRB103 33557 HLH 63369 b HB4157 - 104 - LRB103 33557 HLH 63369 b
3739	3739	HB4157 - 104 - LRB103 33557 HLH 63369 b
3740	3740	1 If the taxpayer continues to own property through
3741	3741	2 the last day of the last tax year for which a
3742	3742	3 subtraction is allowed with respect to that property
3743	3743	4 under subparagraph (R) and for which the taxpayer was
3744	3744	5 allowed in any taxable year to make a subtraction
3745	3745	6 modification under subparagraph (R), then an amount
3746	3746	7 equal to that subtraction modification.
3747	3747	8 The taxpayer is required to make the addition
3748	3748	9 modification under this subparagraph only once with
3749	3749	10 respect to any one piece of property;
3750	3750	11 (G-12) An amount equal to the amount otherwise
3751	3751	12 allowed as a deduction in computing base income for
3752	3752	13 interest paid, accrued, or incurred, directly or
3753	3753	14 indirectly, (i) for taxable years ending on or after
3754	3754	15 December 31, 2004, to a foreign person who would be a
3755	3755	16 member of the same unitary business group but for the
3756	3756	17 fact that the foreign person's business activity
3757	3757	18 outside the United States is 80% or more of the foreign
3758	3758	19 person's total business activity and (ii) for taxable
3759	3759	20 years ending on or after December 31, 2008, to a person
3760	3760	21 who would be a member of the same unitary business
3761	3761	22 group but for the fact that the person is prohibited
3762	3762	23 under Section 1501(a)(27) from being included in the
3763	3763	24 unitary business group because he or she is ordinarily
3764	3764	25 required to apportion business income under different
3765	3765	26 subsections of Section 304. The addition modification
3766	3766
3767	3767
3768	3768
3769	3769
3770	3770
3771	3771	HB4157 - 104 - LRB103 33557 HLH 63369 b
3772	3772
3773	3773
3774	3774	HB4157- 105 -LRB103 33557 HLH 63369 b HB4157 - 105 - LRB103 33557 HLH 63369 b
3775	3775	HB4157 - 105 - LRB103 33557 HLH 63369 b
3776	3776	1 required by this subparagraph shall be reduced to the
3777	3777	2 extent that dividends were included in base income of
3778	3778	3 the unitary group for the same taxable year and
3779	3779	4 received by the taxpayer or by a member of the
3780	3780	5 taxpayer's unitary business group (including amounts
3781	3781	6 included in gross income pursuant to Sections 951
3782	3782	7 through 964 of the Internal Revenue Code and amounts
3783	3783	8 included in gross income under Section 78 of the
3784	3784	9 Internal Revenue Code) with respect to the stock of
3785	3785	10 the same person to whom the interest was paid,
3786	3786	11 accrued, or incurred.
3787	3787	12 This paragraph shall not apply to the following:
3788	3788	13 (i) an item of interest paid, accrued, or
3789	3789	14 incurred, directly or indirectly, to a person who
3790	3790	15 is subject in a foreign country or state, other
3791	3791	16 than a state which requires mandatory unitary
3792	3792	17 reporting, to a tax on or measured by net income
3793	3793	18 with respect to such interest; or
3794	3794	19 (ii) an item of interest paid, accrued, or
3795	3795	20 incurred, directly or indirectly, to a person if
3796	3796	21 the taxpayer can establish, based on a
3797	3797	22 preponderance of the evidence, both of the
3798	3798	23 following:
3799	3799	24 (a) the person, during the same taxable
3800	3800	25 year, paid, accrued, or incurred, the interest
3801	3801	26 to a person that is not a related member, and
3802	3802
3803	3803
3804	3804
3805	3805
3806	3806
3807	3807	HB4157 - 105 - LRB103 33557 HLH 63369 b
3808	3808
3809	3809
3810	3810	HB4157- 106 -LRB103 33557 HLH 63369 b HB4157 - 106 - LRB103 33557 HLH 63369 b
3811	3811	HB4157 - 106 - LRB103 33557 HLH 63369 b
3812	3812	1 (b) the transaction giving rise to the
3813	3813	2 interest expense between the taxpayer and the
3814	3814	3 person did not have as a principal purpose the
3815	3815	4 avoidance of Illinois income tax, and is paid
3816	3816	5 pursuant to a contract or agreement that
3817	3817	6 reflects an arm's-length interest rate and
3818	3818	7 terms; or
3819	3819	8 (iii) the taxpayer can establish, based on
3820	3820	9 clear and convincing evidence, that the interest
3821	3821	10 paid, accrued, or incurred relates to a contract
3822	3822	11 or agreement entered into at arm's-length rates
3823	3823	12 and terms and the principal purpose for the
3824	3824	13 payment is not federal or Illinois tax avoidance;
3825	3825	14 or
3826	3826	15 (iv) an item of interest paid, accrued, or
3827	3827	16 incurred, directly or indirectly, to a person if
3828	3828	17 the taxpayer establishes by clear and convincing
3829	3829	18 evidence that the adjustments are unreasonable; or
3830	3830	19 if the taxpayer and the Director agree in writing
3831	3831	20 to the application or use of an alternative method
3832	3832	21 of apportionment under Section 304(f).
3833	3833	22 Nothing in this subsection shall preclude the
3834	3834	23 Director from making any other adjustment
3835	3835	24 otherwise allowed under Section 404 of this Act
3836	3836	25 for any tax year beginning after the effective
3837	3837	26 date of this amendment provided such adjustment is
3838	3838
3839	3839
3840	3840
3841	3841
3842	3842
3843	3843	HB4157 - 106 - LRB103 33557 HLH 63369 b
3844	3844
3845	3845
3846	3846	HB4157- 107 -LRB103 33557 HLH 63369 b HB4157 - 107 - LRB103 33557 HLH 63369 b
3847	3847	HB4157 - 107 - LRB103 33557 HLH 63369 b
3848	3848	1 made pursuant to regulation adopted by the
3849	3849	2 Department and such regulations provide methods
3850	3850	3 and standards by which the Department will utilize
3851	3851	4 its authority under Section 404 of this Act;
3852	3852	5 (G-13) An amount equal to the amount of intangible
3853	3853	6 expenses and costs otherwise allowed as a deduction in
3854	3854	7 computing base income, and that were paid, accrued, or
3855	3855	8 incurred, directly or indirectly, (i) for taxable
3856	3856	9 years ending on or after December 31, 2004, to a
3857	3857	10 foreign person who would be a member of the same
3858	3858	11 unitary business group but for the fact that the
3859	3859	12 foreign person's business activity outside the United
3860	3860	13 States is 80% or more of that person's total business
3861	3861	14 activity and (ii) for taxable years ending on or after
3862	3862	15 December 31, 2008, to a person who would be a member of
3863	3863	16 the same unitary business group but for the fact that
3864	3864	17 the person is prohibited under Section 1501(a)(27)
3865	3865	18 from being included in the unitary business group
3866	3866	19 because he or she is ordinarily required to apportion
3867	3867	20 business income under different subsections of Section
3868	3868	21 304. The addition modification required by this
3869	3869	22 subparagraph shall be reduced to the extent that
3870	3870	23 dividends were included in base income of the unitary
3871	3871	24 group for the same taxable year and received by the
3872	3872	25 taxpayer or by a member of the taxpayer's unitary
3873	3873	26 business group (including amounts included in gross
3874	3874
3875	3875
3876	3876
3877	3877
3878	3878
3879	3879	HB4157 - 107 - LRB103 33557 HLH 63369 b
3880	3880
3881	3881
3882	3882	HB4157- 108 -LRB103 33557 HLH 63369 b HB4157 - 108 - LRB103 33557 HLH 63369 b
3883	3883	HB4157 - 108 - LRB103 33557 HLH 63369 b
3884	3884	1 income pursuant to Sections 951 through 964 of the
3885	3885	2 Internal Revenue Code and amounts included in gross
3886	3886	3 income under Section 78 of the Internal Revenue Code)
3887	3887	4 with respect to the stock of the same person to whom
3888	3888	5 the intangible expenses and costs were directly or
3889	3889	6 indirectly paid, incurred, or accrued. The preceding
3890	3890	7 sentence shall not apply to the extent that the same
3891	3891	8 dividends caused a reduction to the addition
3892	3892	9 modification required under Section 203(c)(2)(G-12) of
3893	3893	10 this Act. As used in this subparagraph, the term
3894	3894	11 "intangible expenses and costs" includes: (1)
3895	3895	12 expenses, losses, and costs for or related to the
3896	3896	13 direct or indirect acquisition, use, maintenance or
3897	3897	14 management, ownership, sale, exchange, or any other
3898	3898	15 disposition of intangible property; (2) losses
3899	3899	16 incurred, directly or indirectly, from factoring
3900	3900	17 transactions or discounting transactions; (3) royalty,
3901	3901	18 patent, technical, and copyright fees; (4) licensing
3902	3902	19 fees; and (5) other similar expenses and costs. For
3903	3903	20 purposes of this subparagraph, "intangible property"
3904	3904	21 includes patents, patent applications, trade names,
3905	3905	22 trademarks, service marks, copyrights, mask works,
3906	3906	23 trade secrets, and similar types of intangible assets.
3907	3907	24 This paragraph shall not apply to the following:
3908	3908	25 (i) any item of intangible expenses or costs
3909	3909	26 paid, accrued, or incurred, directly or
3910	3910
3911	3911
3912	3912
3913	3913
3914	3914
3915	3915	HB4157 - 108 - LRB103 33557 HLH 63369 b
3916	3916
3917	3917
3918	3918	HB4157- 109 -LRB103 33557 HLH 63369 b HB4157 - 109 - LRB103 33557 HLH 63369 b
3919	3919	HB4157 - 109 - LRB103 33557 HLH 63369 b
3920	3920	1 indirectly, from a transaction with a person who
3921	3921	2 is subject in a foreign country or state, other
3922	3922	3 than a state which requires mandatory unitary
3923	3923	4 reporting, to a tax on or measured by net income
3924	3924	5 with respect to such item; or
3925	3925	6 (ii) any item of intangible expense or cost
3926	3926	7 paid, accrued, or incurred, directly or
3927	3927	8 indirectly, if the taxpayer can establish, based
3928	3928	9 on a preponderance of the evidence, both of the
3929	3929	10 following:
3930	3930	11 (a) the person during the same taxable
3931	3931	12 year paid, accrued, or incurred, the
3932	3932	13 intangible expense or cost to a person that is
3933	3933	14 not a related member, and
3934	3934	15 (b) the transaction giving rise to the
3935	3935	16 intangible expense or cost between the
3936	3936	17 taxpayer and the person did not have as a
3937	3937	18 principal purpose the avoidance of Illinois
3938	3938	19 income tax, and is paid pursuant to a contract
3939	3939	20 or agreement that reflects arm's-length terms;
3940	3940	21 or
3941	3941	22 (iii) any item of intangible expense or cost
3942	3942	23 paid, accrued, or incurred, directly or
3943	3943	24 indirectly, from a transaction with a person if
3944	3944	25 the taxpayer establishes by clear and convincing
3945	3945	26 evidence, that the adjustments are unreasonable;
3946	3946
3947	3947
3948	3948
3949	3949
3950	3950
3951	3951	HB4157 - 109 - LRB103 33557 HLH 63369 b
3952	3952
3953	3953
3954	3954	HB4157- 110 -LRB103 33557 HLH 63369 b HB4157 - 110 - LRB103 33557 HLH 63369 b
3955	3955	HB4157 - 110 - LRB103 33557 HLH 63369 b
3956	3956	1 or if the taxpayer and the Director agree in
3957	3957	2 writing to the application or use of an
3958	3958	3 alternative method of apportionment under Section
3959	3959	4 304(f);
3960	3960	5 Nothing in this subsection shall preclude the
3961	3961	6 Director from making any other adjustment
3962	3962	7 otherwise allowed under Section 404 of this Act
3963	3963	8 for any tax year beginning after the effective
3964	3964	9 date of this amendment provided such adjustment is
3965	3965	10 made pursuant to regulation adopted by the
3966	3966	11 Department and such regulations provide methods
3967	3967	12 and standards by which the Department will utilize
3968	3968	13 its authority under Section 404 of this Act;
3969	3969	14 (G-14) For taxable years ending on or after
3970	3970	15 December 31, 2008, an amount equal to the amount of
3971	3971	16 insurance premium expenses and costs otherwise allowed
3972	3972	17 as a deduction in computing base income, and that were
3973	3973	18 paid, accrued, or incurred, directly or indirectly, to
3974	3974	19 a person who would be a member of the same unitary
3975	3975	20 business group but for the fact that the person is
3976	3976	21 prohibited under Section 1501(a)(27) from being
3977	3977	22 included in the unitary business group because he or
3978	3978	23 she is ordinarily required to apportion business
3979	3979	24 income under different subsections of Section 304. The
3980	3980	25 addition modification required by this subparagraph
3981	3981	26 shall be reduced to the extent that dividends were
3982	3982
3983	3983
3984	3984
3985	3985
3986	3986
3987	3987	HB4157 - 110 - LRB103 33557 HLH 63369 b
3988	3988
3989	3989
3990	3990	HB4157- 111 -LRB103 33557 HLH 63369 b HB4157 - 111 - LRB103 33557 HLH 63369 b
3991	3991	HB4157 - 111 - LRB103 33557 HLH 63369 b
3992	3992	1 included in base income of the unitary group for the
3993	3993	2 same taxable year and received by the taxpayer or by a
3994	3994	3 member of the taxpayer's unitary business group
3995	3995	4 (including amounts included in gross income under
3996	3996	5 Sections 951 through 964 of the Internal Revenue Code
3997	3997	6 and amounts included in gross income under Section 78
3998	3998	7 of the Internal Revenue Code) with respect to the
3999	3999	8 stock of the same person to whom the premiums and costs
4000	4000	9 were directly or indirectly paid, incurred, or
4001	4001	10 accrued. The preceding sentence does not apply to the
4002	4002	11 extent that the same dividends caused a reduction to
4003	4003	12 the addition modification required under Section
4004	4004	13 203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this
4005	4005	14 Act;
4006	4006	15 (G-15) An amount equal to the credit allowable to
4007	4007	16 the taxpayer under Section 218(a) of this Act,
4008	4008	17 determined without regard to Section 218(c) of this
4009	4009	18 Act;
4010	4010	19 (G-16) For taxable years ending on or after
4011	4011	20 December 31, 2017, an amount equal to the deduction
4012	4012	21 allowed under Section 199 of the Internal Revenue Code
4013	4013	22 for the taxable year;
4014	4014	23 and by deducting from the total so obtained the sum of the
4015	4015	24 following amounts:
4016	4016	25 (H) An amount equal to all amounts included in
4017	4017	26 such total pursuant to the provisions of Sections
4018	4018
4019	4019
4020	4020
4021	4021
4022	4022
4023	4023	HB4157 - 111 - LRB103 33557 HLH 63369 b
4024	4024
4025	4025
4026	4026	HB4157- 112 -LRB103 33557 HLH 63369 b HB4157 - 112 - LRB103 33557 HLH 63369 b
4027	4027	HB4157 - 112 - LRB103 33557 HLH 63369 b
4028	4028	1 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 408
4029	4029	2 of the Internal Revenue Code or included in such total
4030	4030	3 as distributions under the provisions of any
4031	4031	4 retirement or disability plan for employees of any
4032	4032	5 governmental agency or unit, or retirement payments to
4033	4033	6 retired partners, which payments are excluded in
4034	4034	7 computing net earnings from self employment by Section
4035	4035	8 1402 of the Internal Revenue Code and regulations
4036	4036	9 adopted pursuant thereto;
4037	4037	10 (I) The valuation limitation amount;
4038	4038	11 (J) An amount equal to the amount of any tax
4039	4039	12 imposed by this Act which was refunded to the taxpayer
4040	4040	13 and included in such total for the taxable year;
4041	4041	14 (K) An amount equal to all amounts included in
4042	4042	15 taxable income as modified by subparagraphs (A), (B),
4043	4043	16 (C), (D), (E), (F) and (G) which are exempt from
4044	4044	17 taxation by this State either by reason of its
4045	4045	18 statutes or Constitution or by reason of the
4046	4046	19 Constitution, treaties or statutes of the United
4047	4047	20 States; provided that, in the case of any statute of
4048	4048	21 this State that exempts income derived from bonds or
4049	4049	22 other obligations from the tax imposed under this Act,
4050	4050	23 the amount exempted shall be the interest net of bond
4051	4051	24 premium amortization;
4052	4052	25 (L) With the exception of any amounts subtracted
4053	4053	26 under subparagraph (K), an amount equal to the sum of
4054	4054
4055	4055
4056	4056
4057	4057
4058	4058
4059	4059	HB4157 - 112 - LRB103 33557 HLH 63369 b
4060	4060
4061	4061
4062	4062	HB4157- 113 -LRB103 33557 HLH 63369 b HB4157 - 113 - LRB103 33557 HLH 63369 b
4063	4063	HB4157 - 113 - LRB103 33557 HLH 63369 b
4064	4064	1 all amounts disallowed as deductions by (i) Sections
4065	4065	2 171(a)(2) and 265(a)(2) of the Internal Revenue Code,
4066	4066	3 and all amounts of expenses allocable to interest and
4067	4067	4 disallowed as deductions by Section 265(a)(1) of the
4068	4068	5 Internal Revenue Code; and (ii) for taxable years
4069	4069	6 ending on or after August 13, 1999, Sections
4070	4070	7 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
4071	4071	8 Internal Revenue Code, plus, (iii) for taxable years
4072	4072	9 ending on or after December 31, 2011, Section
4073	4073	10 45G(e)(3) of the Internal Revenue Code and, for
4074	4074	11 taxable years ending on or after December 31, 2008,
4075	4075	12 any amount included in gross income under Section 87
4076	4076	13 of the Internal Revenue Code; the provisions of this
4077	4077	14 subparagraph are exempt from the provisions of Section
4078	4078	15 250;
4079	4079	16 (M) An amount equal to those dividends included in
4080	4080	17 such total which were paid by a corporation which
4081	4081	18 conducts business operations in a River Edge
4082	4082	19 Redevelopment Zone or zones created under the River
4083	4083	20 Edge Redevelopment Zone Act and conducts substantially
4084	4084	21 all of its operations in a River Edge Redevelopment
4085	4085	22 Zone or zones. This subparagraph (M) is exempt from
4086	4086	23 the provisions of Section 250;
4087	4087	24 (N) An amount equal to any contribution made to a
4088	4088	25 job training project established pursuant to the Tax
4089	4089	26 Increment Allocation Redevelopment Act;
4090	4090
4091	4091
4092	4092
4093	4093
4094	4094
4095	4095	HB4157 - 113 - LRB103 33557 HLH 63369 b
4096	4096
4097	4097
4098	4098	HB4157- 114 -LRB103 33557 HLH 63369 b HB4157 - 114 - LRB103 33557 HLH 63369 b
4099	4099	HB4157 - 114 - LRB103 33557 HLH 63369 b
4100	4100	1 (O) An amount equal to those dividends included in
4101	4101	2 such total that were paid by a corporation that
4102	4102	3 conducts business operations in a federally designated
4103	4103	4 Foreign Trade Zone or Sub-Zone and that is designated
4104	4104	5 a High Impact Business located in Illinois; provided
4105	4105	6 that dividends eligible for the deduction provided in
4106	4106	7 subparagraph (M) of paragraph (2) of this subsection
4107	4107	8 shall not be eligible for the deduction provided under
4108	4108	9 this subparagraph (O);
4109	4109	10 (P) An amount equal to the amount of the deduction
4110	4110	11 used to compute the federal income tax credit for
4111	4111	12 restoration of substantial amounts held under claim of
4112	4112	13 right for the taxable year pursuant to Section 1341 of
4113	4113	14 the Internal Revenue Code;
4114	4114	15 (Q) For taxable year 1999 and thereafter, an
4115	4115	16 amount equal to the amount of any (i) distributions,
4116	4116	17 to the extent includible in gross income for federal
4117	4117	18 income tax purposes, made to the taxpayer because of
4118	4118	19 his or her status as a victim of persecution for racial
4119	4119	20 or religious reasons by Nazi Germany or any other Axis
4120	4120	21 regime or as an heir of the victim and (ii) items of
4121	4121	22 income, to the extent includible in gross income for
4122	4122	23 federal income tax purposes, attributable to, derived
4123	4123	24 from or in any way related to assets stolen from,
4124	4124	25 hidden from, or otherwise lost to a victim of
4125	4125	26 persecution for racial or religious reasons by Nazi
4126	4126
4127	4127
4128	4128
4129	4129
4130	4130
4131	4131	HB4157 - 114 - LRB103 33557 HLH 63369 b
4132	4132
4133	4133
4134	4134	HB4157- 115 -LRB103 33557 HLH 63369 b HB4157 - 115 - LRB103 33557 HLH 63369 b
4135	4135	HB4157 - 115 - LRB103 33557 HLH 63369 b
4136	4136	1 Germany or any other Axis regime immediately prior to,
4137	4137	2 during, and immediately after World War II, including,
4138	4138	3 but not limited to, interest on the proceeds
4139	4139	4 receivable as insurance under policies issued to a
4140	4140	5 victim of persecution for racial or religious reasons
4141	4141	6 by Nazi Germany or any other Axis regime by European
4142	4142	7 insurance companies immediately prior to and during
4143	4143	8 World War II; provided, however, this subtraction from
4144	4144	9 federal adjusted gross income does not apply to assets
4145	4145	10 acquired with such assets or with the proceeds from
4146	4146	11 the sale of such assets; provided, further, this
4147	4147	12 paragraph shall only apply to a taxpayer who was the
4148	4148	13 first recipient of such assets after their recovery
4149	4149	14 and who is a victim of persecution for racial or
4150	4150	15 religious reasons by Nazi Germany or any other Axis
4151	4151	16 regime or as an heir of the victim. The amount of and
4152	4152	17 the eligibility for any public assistance, benefit, or
4153	4153	18 similar entitlement is not affected by the inclusion
4154	4154	19 of items (i) and (ii) of this paragraph in gross income
4155	4155	20 for federal income tax purposes. This paragraph is
4156	4156	21 exempt from the provisions of Section 250;
4157	4157	22 (R) For taxable years 2001 and thereafter, for the
4158	4158	23 taxable year in which the bonus depreciation deduction
4159	4159	24 is taken on the taxpayer's federal income tax return
4160	4160	25 under subsection (k) of Section 168 of the Internal
4161	4161	26 Revenue Code and for each applicable taxable year
4162	4162
4163	4163
4164	4164
4165	4165
4166	4166
4167	4167	HB4157 - 115 - LRB103 33557 HLH 63369 b
4168	4168
4169	4169
4170	4170	HB4157- 116 -LRB103 33557 HLH 63369 b HB4157 - 116 - LRB103 33557 HLH 63369 b
4171	4171	HB4157 - 116 - LRB103 33557 HLH 63369 b
4172	4172	1 thereafter, an amount equal to "x", where:
4173	4173	2 (1) "y" equals the amount of the depreciation
4174	4174	3 deduction taken for the taxable year on the
4175	4175	4 taxpayer's federal income tax return on property
4176	4176	5 for which the bonus depreciation deduction was
4177	4177	6 taken in any year under subsection (k) of Section
4178	4178	7 168 of the Internal Revenue Code, but not
4179	4179	8 including the bonus depreciation deduction;
4180	4180	9 (2) for taxable years ending on or before
4181	4181	10 December 31, 2005, "x" equals "y" multiplied by 30
4182	4182	11 and then divided by 70 (or "y" multiplied by
4183	4183	12 0.429); and
4184	4184	13 (3) for taxable years ending after December
4185	4185	14 31, 2005:
4186	4186	15 (i) for property on which a bonus
4187	4187	16 depreciation deduction of 30% of the adjusted
4188	4188	17 basis was taken, "x" equals "y" multiplied by
4189	4189	18 30 and then divided by 70 (or "y" multiplied
4190	4190	19 by 0.429);
4191	4191	20 (ii) for property on which a bonus
4192	4192	21 depreciation deduction of 50% of the adjusted
4193	4193	22 basis was taken, "x" equals "y" multiplied by
4194	4194	23 1.0;
4195	4195	24 (iii) for property on which a bonus
4196	4196	25 depreciation deduction of 100% of the adjusted
4197	4197	26 basis was taken in a taxable year ending on or
4198	4198
4199	4199
4200	4200
4201	4201
4202	4202
4203	4203	HB4157 - 116 - LRB103 33557 HLH 63369 b
4204	4204
4205	4205
4206	4206	HB4157- 117 -LRB103 33557 HLH 63369 b HB4157 - 117 - LRB103 33557 HLH 63369 b
4207	4207	HB4157 - 117 - LRB103 33557 HLH 63369 b
4208	4208	1 after December 31, 2021, "x" equals the
4209	4209	2 depreciation deduction that would be allowed
4210	4210	3 on that property if the taxpayer had made the
4211	4211	4 election under Section 168(k)(7) of the
4212	4212	5 Internal Revenue Code to not claim bonus
4213	4213	6 depreciation on that property; and
4214	4214	7 (iv) for property on which a bonus
4215	4215	8 depreciation deduction of a percentage other
4216	4216	9 than 30%, 50% or 100% of the adjusted basis
4217	4217	10 was taken in a taxable year ending on or after
4218	4218	11 December 31, 2021, "x" equals "y" multiplied
4219	4219	12 by 100 times the percentage bonus depreciation
4220	4220	13 on the property (that is, 100(bonus%)) and
4221	4221	14 then divided by 100 times 1 minus the
4222	4222	15 percentage bonus depreciation on the property
4223	4223	16 (that is, 100(1bonus%)).
4224	4224	17 The aggregate amount deducted under this
4225	4225	18 subparagraph in all taxable years for any one piece of
4226	4226	19 property may not exceed the amount of the bonus
4227	4227	20 depreciation deduction taken on that property on the
4228	4228	21 taxpayer's federal income tax return under subsection
4229	4229	22 (k) of Section 168 of the Internal Revenue Code. This
4230	4230	23 subparagraph (R) is exempt from the provisions of
4231	4231	24 Section 250;
4232	4232	25 (S) If the taxpayer sells, transfers, abandons, or
4233	4233	26 otherwise disposes of property for which the taxpayer
4234	4234
4235	4235
4236	4236
4237	4237
4238	4238
4239	4239	HB4157 - 117 - LRB103 33557 HLH 63369 b
4240	4240
4241	4241
4242	4242	HB4157- 118 -LRB103 33557 HLH 63369 b HB4157 - 118 - LRB103 33557 HLH 63369 b
4243	4243	HB4157 - 118 - LRB103 33557 HLH 63369 b
4244	4244	1 was required in any taxable year to make an addition
4245	4245	2 modification under subparagraph (G-10), then an amount
4246	4246	3 equal to that addition modification.
4247	4247	4 If the taxpayer continues to own property through
4248	4248	5 the last day of the last tax year for which a
4249	4249	6 subtraction is allowed with respect to that property
4250	4250	7 under subparagraph (R) and for which the taxpayer was
4251	4251	8 required in any taxable year to make an addition
4252	4252	9 modification under subparagraph (G-10), then an amount
4253	4253	10 equal to that addition modification.
4254	4254	11 The taxpayer is allowed to take the deduction
4255	4255	12 under this subparagraph only once with respect to any
4256	4256	13 one piece of property.
4257	4257	14 This subparagraph (S) is exempt from the
4258	4258	15 provisions of Section 250;
4259	4259	16 (T) The amount of (i) any interest income (net of
4260	4260	17 the deductions allocable thereto) taken into account
4261	4261	18 for the taxable year with respect to a transaction
4262	4262	19 with a taxpayer that is required to make an addition
4263	4263	20 modification with respect to such transaction under
4264	4264	21 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
4265	4265	22 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
4266	4266	23 the amount of such addition modification and (ii) any
4267	4267	24 income from intangible property (net of the deductions
4268	4268	25 allocable thereto) taken into account for the taxable
4269	4269	26 year with respect to a transaction with a taxpayer
4270	4270
4271	4271
4272	4272
4273	4273
4274	4274
4275	4275	HB4157 - 118 - LRB103 33557 HLH 63369 b
4276	4276
4277	4277
4278	4278	HB4157- 119 -LRB103 33557 HLH 63369 b HB4157 - 119 - LRB103 33557 HLH 63369 b
4279	4279	HB4157 - 119 - LRB103 33557 HLH 63369 b
4280	4280	1 that is required to make an addition modification with
4281	4281	2 respect to such transaction under Section
4282	4282	3 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
4283	4283	4 203(d)(2)(D-8), but not to exceed the amount of such
4284	4284	5 addition modification. This subparagraph (T) is exempt
4285	4285	6 from the provisions of Section 250;
4286	4286	7 (U) An amount equal to the interest income taken
4287	4287	8 into account for the taxable year (net of the
4288	4288	9 deductions allocable thereto) with respect to
4289	4289	10 transactions with (i) a foreign person who would be a
4290	4290	11 member of the taxpayer's unitary business group but
4291	4291	12 for the fact the foreign person's business activity
4292	4292	13 outside the United States is 80% or more of that
4293	4293	14 person's total business activity and (ii) for taxable
4294	4294	15 years ending on or after December 31, 2008, to a person
4295	4295	16 who would be a member of the same unitary business
4296	4296	17 group but for the fact that the person is prohibited
4297	4297	18 under Section 1501(a)(27) from being included in the
4298	4298	19 unitary business group because he or she is ordinarily
4299	4299	20 required to apportion business income under different
4300	4300	21 subsections of Section 304, but not to exceed the
4301	4301	22 addition modification required to be made for the same
4302	4302	23 taxable year under Section 203(c)(2)(G-12) for
4303	4303	24 interest paid, accrued, or incurred, directly or
4304	4304	25 indirectly, to the same person. This subparagraph (U)
4305	4305	26 is exempt from the provisions of Section 250;
4306	4306
4307	4307
4308	4308
4309	4309
4310	4310
4311	4311	HB4157 - 119 - LRB103 33557 HLH 63369 b
4312	4312
4313	4313
4314	4314	HB4157- 120 -LRB103 33557 HLH 63369 b HB4157 - 120 - LRB103 33557 HLH 63369 b
4315	4315	HB4157 - 120 - LRB103 33557 HLH 63369 b
4316	4316	1 (V) An amount equal to the income from intangible
4317	4317	2 property taken into account for the taxable year (net
4318	4318	3 of the deductions allocable thereto) with respect to
4319	4319	4 transactions with (i) a foreign person who would be a
4320	4320	5 member of the taxpayer's unitary business group but
4321	4321	6 for the fact that the foreign person's business
4322	4322	7 activity outside the United States is 80% or more of
4323	4323	8 that person's total business activity and (ii) for
4324	4324	9 taxable years ending on or after December 31, 2008, to
4325	4325	10 a person who would be a member of the same unitary
4326	4326	11 business group but for the fact that the person is
4327	4327	12 prohibited under Section 1501(a)(27) from being
4328	4328	13 included in the unitary business group because he or
4329	4329	14 she is ordinarily required to apportion business
4330	4330	15 income under different subsections of Section 304, but
4331	4331	16 not to exceed the addition modification required to be
4332	4332	17 made for the same taxable year under Section
4333	4333	18 203(c)(2)(G-13) for intangible expenses and costs
4334	4334	19 paid, accrued, or incurred, directly or indirectly, to
4335	4335	20 the same foreign person. This subparagraph (V) is
4336	4336	21 exempt from the provisions of Section 250;
4337	4337	22 (W) in the case of an estate, an amount equal to
4338	4338	23 all amounts included in such total pursuant to the
4339	4339	24 provisions of Section 111 of the Internal Revenue Code
4340	4340	25 as a recovery of items previously deducted by the
4341	4341	26 decedent from adjusted gross income in the computation
4342	4342
4343	4343
4344	4344
4345	4345
4346	4346
4347	4347	HB4157 - 120 - LRB103 33557 HLH 63369 b
4348	4348
4349	4349
4350	4350	HB4157- 121 -LRB103 33557 HLH 63369 b HB4157 - 121 - LRB103 33557 HLH 63369 b
4351	4351	HB4157 - 121 - LRB103 33557 HLH 63369 b
4352	4352	1 of taxable income. This subparagraph (W) is exempt
4353	4353	2 from Section 250;
4354	4354	3 (X) an amount equal to the refund included in such
4355	4355	4 total of any tax deducted for federal income tax
4356	4356	5 purposes, to the extent that deduction was added back
4357	4357	6 under subparagraph (F). This subparagraph (X) is
4358	4358	7 exempt from the provisions of Section 250;
4359	4359	8 (Y) For taxable years ending on or after December
4360	4360	9 31, 2011, in the case of a taxpayer who was required to
4361	4361	10 add back any insurance premiums under Section
4362	4362	11 203(c)(2)(G-14), such taxpayer may elect to subtract
4363	4363	12 that part of a reimbursement received from the
4364	4364	13 insurance company equal to the amount of the expense
4365	4365	14 or loss (including expenses incurred by the insurance
4366	4366	15 company) that would have been taken into account as a
4367	4367	16 deduction for federal income tax purposes if the
4368	4368	17 expense or loss had been uninsured. If a taxpayer
4369	4369	18 makes the election provided for by this subparagraph
4370	4370	19 (Y), the insurer to which the premiums were paid must
4371	4371	20 add back to income the amount subtracted by the
4372	4372	21 taxpayer pursuant to this subparagraph (Y). This
4373	4373	22 subparagraph (Y) is exempt from the provisions of
4374	4374	23 Section 250; and
4375	4375	24 (Z) For taxable years beginning after December 31,
4376	4376	25 2018 and before January 1, 2026, the amount of excess
4377	4377	26 business loss of the taxpayer disallowed as a
4378	4378
4379	4379
4380	4380
4381	4381
4382	4382
4383	4383	HB4157 - 121 - LRB103 33557 HLH 63369 b
4384	4384
4385	4385
4386	4386	HB4157- 122 -LRB103 33557 HLH 63369 b HB4157 - 122 - LRB103 33557 HLH 63369 b
4387	4387	HB4157 - 122 - LRB103 33557 HLH 63369 b
4388	4388	1 deduction by Section 461(l)(1)(B) of the Internal
4389	4389	2 Revenue Code.
4390	4390	3 (3) Limitation. The amount of any modification
4391	4391	4 otherwise required under this subsection shall, under
4392	4392	5 regulations prescribed by the Department, be adjusted by
4393	4393	6 any amounts included therein which were properly paid,
4394	4394	7 credited, or required to be distributed, or permanently
4395	4395	8 set aside for charitable purposes pursuant to Internal
4396	4396	9 Revenue Code Section 642(c) during the taxable year.
4397	4397	10 (d) Partnerships.
4398	4398	11 (1) In general. In the case of a partnership, base
4399	4399	12 income means an amount equal to the taxpayer's taxable
4400	4400	13 income for the taxable year as modified by paragraph (2).
4401	4401	14 (2) Modifications. The taxable income referred to in
4402	4402	15 paragraph (1) shall be modified by adding thereto the sum
4403	4403	16 of the following amounts:
4404	4404	17 (A) An amount equal to all amounts paid or accrued
4405	4405	18 to the taxpayer as interest or dividends during the
4406	4406	19 taxable year to the extent excluded from gross income
4407	4407	20 in the computation of taxable income;
4408	4408	21 (B) An amount equal to the amount of tax imposed by
4409	4409	22 this Act to the extent deducted from gross income for
4410	4410	23 the taxable year;
4411	4411	24 (C) The amount of deductions allowed to the
4412	4412	25 partnership pursuant to Section 707 (c) of the
4413	4413
4414	4414
4415	4415
4416	4416
4417	4417
4418	4418	HB4157 - 122 - LRB103 33557 HLH 63369 b
4419	4419
4420	4420
4421	4421	HB4157- 123 -LRB103 33557 HLH 63369 b HB4157 - 123 - LRB103 33557 HLH 63369 b
4422	4422	HB4157 - 123 - LRB103 33557 HLH 63369 b
4423	4423	1 Internal Revenue Code in calculating its taxable
4424	4424	2 income;
4425	4425	3 (D) An amount equal to the amount of the capital
4426	4426	4 gain deduction allowable under the Internal Revenue
4427	4427	5 Code, to the extent deducted from gross income in the
4428	4428	6 computation of taxable income;
4429	4429	7 (D-5) For taxable years 2001 and thereafter, an
4430	4430	8 amount equal to the bonus depreciation deduction taken
4431	4431	9 on the taxpayer's federal income tax return for the
4432	4432	10 taxable year under subsection (k) of Section 168 of
4433	4433	11 the Internal Revenue Code;
4434	4434	12 (D-6) If the taxpayer sells, transfers, abandons,
4435	4435	13 or otherwise disposes of property for which the
4436	4436	14 taxpayer was required in any taxable year to make an
4437	4437	15 addition modification under subparagraph (D-5), then
4438	4438	16 an amount equal to the aggregate amount of the
4439	4439	17 deductions taken in all taxable years under
4440	4440	18 subparagraph (O) with respect to that property.
4441	4441	19 If the taxpayer continues to own property through
4442	4442	20 the last day of the last tax year for which a
4443	4443	21 subtraction is allowed with respect to that property
4444	4444	22 under subparagraph (O) and for which the taxpayer was
4445	4445	23 allowed in any taxable year to make a subtraction
4446	4446	24 modification under subparagraph (O), then an amount
4447	4447	25 equal to that subtraction modification.
4448	4448	26 The taxpayer is required to make the addition
4449	4449
4450	4450
4451	4451
4452	4452
4453	4453
4454	4454	HB4157 - 123 - LRB103 33557 HLH 63369 b
4455	4455
4456	4456
4457	4457	HB4157- 124 -LRB103 33557 HLH 63369 b HB4157 - 124 - LRB103 33557 HLH 63369 b
4458	4458	HB4157 - 124 - LRB103 33557 HLH 63369 b
4459	4459	1 modification under this subparagraph only once with
4460	4460	2 respect to any one piece of property;
4461	4461	3 (D-7) An amount equal to the amount otherwise
4462	4462	4 allowed as a deduction in computing base income for
4463	4463	5 interest paid, accrued, or incurred, directly or
4464	4464	6 indirectly, (i) for taxable years ending on or after
4465	4465	7 December 31, 2004, to a foreign person who would be a
4466	4466	8 member of the same unitary business group but for the
4467	4467	9 fact the foreign person's business activity outside
4468	4468	10 the United States is 80% or more of the foreign
4469	4469	11 person's total business activity and (ii) for taxable
4470	4470	12 years ending on or after December 31, 2008, to a person
4471	4471	13 who would be a member of the same unitary business
4472	4472	14 group but for the fact that the person is prohibited
4473	4473	15 under Section 1501(a)(27) from being included in the
4474	4474	16 unitary business group because he or she is ordinarily
4475	4475	17 required to apportion business income under different
4476	4476	18 subsections of Section 304. The addition modification
4477	4477	19 required by this subparagraph shall be reduced to the
4478	4478	20 extent that dividends were included in base income of
4479	4479	21 the unitary group for the same taxable year and
4480	4480	22 received by the taxpayer or by a member of the
4481	4481	23 taxpayer's unitary business group (including amounts
4482	4482	24 included in gross income pursuant to Sections 951
4483	4483	25 through 964 of the Internal Revenue Code and amounts
4484	4484	26 included in gross income under Section 78 of the
4485	4485
4486	4486
4487	4487
4488	4488
4489	4489
4490	4490	HB4157 - 124 - LRB103 33557 HLH 63369 b
4491	4491
4492	4492
4493	4493	HB4157- 125 -LRB103 33557 HLH 63369 b HB4157 - 125 - LRB103 33557 HLH 63369 b
4494	4494	HB4157 - 125 - LRB103 33557 HLH 63369 b
4495	4495	1 Internal Revenue Code) with respect to the stock of
4496	4496	2 the same person to whom the interest was paid,
4497	4497	3 accrued, or incurred.
4498	4498	4 This paragraph shall not apply to the following:
4499	4499	5 (i) an item of interest paid, accrued, or
4500	4500	6 incurred, directly or indirectly, to a person who
4501	4501	7 is subject in a foreign country or state, other
4502	4502	8 than a state which requires mandatory unitary
4503	4503	9 reporting, to a tax on or measured by net income
4504	4504	10 with respect to such interest; or
4505	4505	11 (ii) an item of interest paid, accrued, or
4506	4506	12 incurred, directly or indirectly, to a person if
4507	4507	13 the taxpayer can establish, based on a
4508	4508	14 preponderance of the evidence, both of the
4509	4509	15 following:
4510	4510	16 (a) the person, during the same taxable
4511	4511	17 year, paid, accrued, or incurred, the interest
4512	4512	18 to a person that is not a related member, and
4513	4513	19 (b) the transaction giving rise to the
4514	4514	20 interest expense between the taxpayer and the
4515	4515	21 person did not have as a principal purpose the
4516	4516	22 avoidance of Illinois income tax, and is paid
4517	4517	23 pursuant to a contract or agreement that
4518	4518	24 reflects an arm's-length interest rate and
4519	4519	25 terms; or
4520	4520	26 (iii) the taxpayer can establish, based on
4521	4521
4522	4522
4523	4523
4524	4524
4525	4525
4526	4526	HB4157 - 125 - LRB103 33557 HLH 63369 b
4527	4527
4528	4528
4529	4529	HB4157- 126 -LRB103 33557 HLH 63369 b HB4157 - 126 - LRB103 33557 HLH 63369 b
4530	4530	HB4157 - 126 - LRB103 33557 HLH 63369 b
4531	4531	1 clear and convincing evidence, that the interest
4532	4532	2 paid, accrued, or incurred relates to a contract
4533	4533	3 or agreement entered into at arm's-length rates
4534	4534	4 and terms and the principal purpose for the
4535	4535	5 payment is not federal or Illinois tax avoidance;
4536	4536	6 or
4537	4537	7 (iv) an item of interest paid, accrued, or
4538	4538	8 incurred, directly or indirectly, to a person if
4539	4539	9 the taxpayer establishes by clear and convincing
4540	4540	10 evidence that the adjustments are unreasonable; or
4541	4541	11 if the taxpayer and the Director agree in writing
4542	4542	12 to the application or use of an alternative method
4543	4543	13 of apportionment under Section 304(f).
4544	4544	14 Nothing in this subsection shall preclude the
4545	4545	15 Director from making any other adjustment
4546	4546	16 otherwise allowed under Section 404 of this Act
4547	4547	17 for any tax year beginning after the effective
4548	4548	18 date of this amendment provided such adjustment is
4549	4549	19 made pursuant to regulation adopted by the
4550	4550	20 Department and such regulations provide methods
4551	4551	21 and standards by which the Department will utilize
4552	4552	22 its authority under Section 404 of this Act; and
4553	4553	23 (D-8) An amount equal to the amount of intangible
4554	4554	24 expenses and costs otherwise allowed as a deduction in
4555	4555	25 computing base income, and that were paid, accrued, or
4556	4556	26 incurred, directly or indirectly, (i) for taxable
4557	4557
4558	4558
4559	4559
4560	4560
4561	4561
4562	4562	HB4157 - 126 - LRB103 33557 HLH 63369 b
4563	4563
4564	4564
4565	4565	HB4157- 127 -LRB103 33557 HLH 63369 b HB4157 - 127 - LRB103 33557 HLH 63369 b
4566	4566	HB4157 - 127 - LRB103 33557 HLH 63369 b
4567	4567	1 years ending on or after December 31, 2004, to a
4568	4568	2 foreign person who would be a member of the same
4569	4569	3 unitary business group but for the fact that the
4570	4570	4 foreign person's business activity outside the United
4571	4571	5 States is 80% or more of that person's total business
4572	4572	6 activity and (ii) for taxable years ending on or after
4573	4573	7 December 31, 2008, to a person who would be a member of
4574	4574	8 the same unitary business group but for the fact that
4575	4575	9 the person is prohibited under Section 1501(a)(27)
4576	4576	10 from being included in the unitary business group
4577	4577	11 because he or she is ordinarily required to apportion
4578	4578	12 business income under different subsections of Section
4579	4579	13 304. The addition modification required by this
4580	4580	14 subparagraph shall be reduced to the extent that
4581	4581	15 dividends were included in base income of the unitary
4582	4582	16 group for the same taxable year and received by the
4583	4583	17 taxpayer or by a member of the taxpayer's unitary
4584	4584	18 business group (including amounts included in gross
4585	4585	19 income pursuant to Sections 951 through 964 of the
4586	4586	20 Internal Revenue Code and amounts included in gross
4587	4587	21 income under Section 78 of the Internal Revenue Code)
4588	4588	22 with respect to the stock of the same person to whom
4589	4589	23 the intangible expenses and costs were directly or
4590	4590	24 indirectly paid, incurred or accrued. The preceding
4591	4591	25 sentence shall not apply to the extent that the same
4592	4592	26 dividends caused a reduction to the addition
4593	4593
4594	4594
4595	4595
4596	4596
4597	4597
4598	4598	HB4157 - 127 - LRB103 33557 HLH 63369 b
4599	4599
4600	4600
4601	4601	HB4157- 128 -LRB103 33557 HLH 63369 b HB4157 - 128 - LRB103 33557 HLH 63369 b
4602	4602	HB4157 - 128 - LRB103 33557 HLH 63369 b
4603	4603	1 modification required under Section 203(d)(2)(D-7) of
4604	4604	2 this Act. As used in this subparagraph, the term
4605	4605	3 "intangible expenses and costs" includes (1) expenses,
4606	4606	4 losses, and costs for, or related to, the direct or
4607	4607	5 indirect acquisition, use, maintenance or management,
4608	4608	6 ownership, sale, exchange, or any other disposition of
4609	4609	7 intangible property; (2) losses incurred, directly or
4610	4610	8 indirectly, from factoring transactions or discounting
4611	4611	9 transactions; (3) royalty, patent, technical, and
4612	4612	10 copyright fees; (4) licensing fees; and (5) other
4613	4613	11 similar expenses and costs. For purposes of this
4614	4614	12 subparagraph, "intangible property" includes patents,
4615	4615	13 patent applications, trade names, trademarks, service
4616	4616	14 marks, copyrights, mask works, trade secrets, and
4617	4617	15 similar types of intangible assets;
4618	4618	16 This paragraph shall not apply to the following:
4619	4619	17 (i) any item of intangible expenses or costs
4620	4620	18 paid, accrued, or incurred, directly or
4621	4621	19 indirectly, from a transaction with a person who
4622	4622	20 is subject in a foreign country or state, other
4623	4623	21 than a state which requires mandatory unitary
4624	4624	22 reporting, to a tax on or measured by net income
4625	4625	23 with respect to such item; or
4626	4626	24 (ii) any item of intangible expense or cost
4627	4627	25 paid, accrued, or incurred, directly or
4628	4628	26 indirectly, if the taxpayer can establish, based
4629	4629
4630	4630
4631	4631
4632	4632
4633	4633
4634	4634	HB4157 - 128 - LRB103 33557 HLH 63369 b
4635	4635
4636	4636
4637	4637	HB4157- 129 -LRB103 33557 HLH 63369 b HB4157 - 129 - LRB103 33557 HLH 63369 b
4638	4638	HB4157 - 129 - LRB103 33557 HLH 63369 b
4639	4639	1 on a preponderance of the evidence, both of the
4640	4640	2 following:
4641	4641	3 (a) the person during the same taxable
4642	4642	4 year paid, accrued, or incurred, the
4643	4643	5 intangible expense or cost to a person that is
4644	4644	6 not a related member, and
4645	4645	7 (b) the transaction giving rise to the
4646	4646	8 intangible expense or cost between the
4647	4647	9 taxpayer and the person did not have as a
4648	4648	10 principal purpose the avoidance of Illinois
4649	4649	11 income tax, and is paid pursuant to a contract
4650	4650	12 or agreement that reflects arm's-length terms;
4651	4651	13 or
4652	4652	14 (iii) any item of intangible expense or cost
4653	4653	15 paid, accrued, or incurred, directly or
4654	4654	16 indirectly, from a transaction with a person if
4655	4655	17 the taxpayer establishes by clear and convincing
4656	4656	18 evidence, that the adjustments are unreasonable;
4657	4657	19 or if the taxpayer and the Director agree in
4658	4658	20 writing to the application or use of an
4659	4659	21 alternative method of apportionment under Section
4660	4660	22 304(f);
4661	4661	23 Nothing in this subsection shall preclude the
4662	4662	24 Director from making any other adjustment
4663	4663	25 otherwise allowed under Section 404 of this Act
4664	4664	26 for any tax year beginning after the effective
4665	4665
4666	4666
4667	4667
4668	4668
4669	4669
4670	4670	HB4157 - 129 - LRB103 33557 HLH 63369 b
4671	4671
4672	4672
4673	4673	HB4157- 130 -LRB103 33557 HLH 63369 b HB4157 - 130 - LRB103 33557 HLH 63369 b
4674	4674	HB4157 - 130 - LRB103 33557 HLH 63369 b
4675	4675	1 date of this amendment provided such adjustment is
4676	4676	2 made pursuant to regulation adopted by the
4677	4677	3 Department and such regulations provide methods
4678	4678	4 and standards by which the Department will utilize
4679	4679	5 its authority under Section 404 of this Act;
4680	4680	6 (D-9) For taxable years ending on or after
4681	4681	7 December 31, 2008, an amount equal to the amount of
4682	4682	8 insurance premium expenses and costs otherwise allowed
4683	4683	9 as a deduction in computing base income, and that were
4684	4684	10 paid, accrued, or incurred, directly or indirectly, to
4685	4685	11 a person who would be a member of the same unitary
4686	4686	12 business group but for the fact that the person is
4687	4687	13 prohibited under Section 1501(a)(27) from being
4688	4688	14 included in the unitary business group because he or
4689	4689	15 she is ordinarily required to apportion business
4690	4690	16 income under different subsections of Section 304. The
4691	4691	17 addition modification required by this subparagraph
4692	4692	18 shall be reduced to the extent that dividends were
4693	4693	19 included in base income of the unitary group for the
4694	4694	20 same taxable year and received by the taxpayer or by a
4695	4695	21 member of the taxpayer's unitary business group
4696	4696	22 (including amounts included in gross income under
4697	4697	23 Sections 951 through 964 of the Internal Revenue Code
4698	4698	24 and amounts included in gross income under Section 78
4699	4699	25 of the Internal Revenue Code) with respect to the
4700	4700	26 stock of the same person to whom the premiums and costs
4701	4701
4702	4702
4703	4703
4704	4704
4705	4705
4706	4706	HB4157 - 130 - LRB103 33557 HLH 63369 b
4707	4707
4708	4708
4709	4709	HB4157- 131 -LRB103 33557 HLH 63369 b HB4157 - 131 - LRB103 33557 HLH 63369 b
4710	4710	HB4157 - 131 - LRB103 33557 HLH 63369 b
4711	4711	1 were directly or indirectly paid, incurred, or
4712	4712	2 accrued. The preceding sentence does not apply to the
4713	4713	3 extent that the same dividends caused a reduction to
4714	4714	4 the addition modification required under Section
4715	4715	5 203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act;
4716	4716	6 (D-10) An amount equal to the credit allowable to
4717	4717	7 the taxpayer under Section 218(a) of this Act,
4718	4718	8 determined without regard to Section 218(c) of this
4719	4719	9 Act;
4720	4720	10 (D-11) For taxable years ending on or after
4721	4721	11 December 31, 2017, an amount equal to the deduction
4722	4722	12 allowed under Section 199 of the Internal Revenue Code
4723	4723	13 for the taxable year;
4724	4724	14 and by deducting from the total so obtained the following
4725	4725	15 amounts:
4726	4726	16 (E) The valuation limitation amount;
4727	4727	17 (F) An amount equal to the amount of any tax
4728	4728	18 imposed by this Act which was refunded to the taxpayer
4729	4729	19 and included in such total for the taxable year;
4730	4730	20 (G) An amount equal to all amounts included in
4731	4731	21 taxable income as modified by subparagraphs (A), (B),
4732	4732	22 (C) and (D) which are exempt from taxation by this
4733	4733	23 State either by reason of its statutes or Constitution
4734	4734	24 or by reason of the Constitution, treaties or statutes
4735	4735	25 of the United States; provided that, in the case of any
4736	4736	26 statute of this State that exempts income derived from
4737	4737
4738	4738
4739	4739
4740	4740
4741	4741
4742	4742	HB4157 - 131 - LRB103 33557 HLH 63369 b
4743	4743
4744	4744
4745	4745	HB4157- 132 -LRB103 33557 HLH 63369 b HB4157 - 132 - LRB103 33557 HLH 63369 b
4746	4746	HB4157 - 132 - LRB103 33557 HLH 63369 b
4747	4747	1 bonds or other obligations from the tax imposed under
4748	4748	2 this Act, the amount exempted shall be the interest
4749	4749	3 net of bond premium amortization;
4750	4750	4 (H) Any income of the partnership which
4751	4751	5 constitutes personal service income as defined in
4752	4752	6 Section 1348(b)(1) of the Internal Revenue Code (as in
4753	4753	7 effect December 31, 1981) or a reasonable allowance
4754	4754	8 for compensation paid or accrued for services rendered
4755	4755	9 by partners to the partnership, whichever is greater;
4756	4756	10 this subparagraph (H) is exempt from the provisions of
4757	4757	11 Section 250;
4758	4758	12 (I) An amount equal to all amounts of income
4759	4759	13 distributable to an entity subject to the Personal
4760	4760	14 Property Tax Replacement Income Tax imposed by
4761	4761	15 subsections (c) and (d) of Section 201 of this Act
4762	4762	16 including amounts distributable to organizations
4763	4763	17 exempt from federal income tax by reason of Section
4764	4764	18 501(a) of the Internal Revenue Code; this subparagraph
4765	4765	19 (I) is exempt from the provisions of Section 250;
4766	4766	20 (J) With the exception of any amounts subtracted
4767	4767	21 under subparagraph (G), an amount equal to the sum of
4768	4768	22 all amounts disallowed as deductions by (i) Sections
4769	4769	23 171(a)(2) and 265(a)(2) of the Internal Revenue Code,
4770	4770	24 and all amounts of expenses allocable to interest and
4771	4771	25 disallowed as deductions by Section 265(a)(1) of the
4772	4772	26 Internal Revenue Code; and (ii) for taxable years
4773	4773
4774	4774
4775	4775
4776	4776
4777	4777
4778	4778	HB4157 - 132 - LRB103 33557 HLH 63369 b
4779	4779
4780	4780
4781	4781	HB4157- 133 -LRB103 33557 HLH 63369 b HB4157 - 133 - LRB103 33557 HLH 63369 b
4782	4782	HB4157 - 133 - LRB103 33557 HLH 63369 b
4783	4783	1 ending on or after August 13, 1999, Sections
4784	4784	2 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
4785	4785	3 Internal Revenue Code, plus, (iii) for taxable years
4786	4786	4 ending on or after December 31, 2011, Section
4787	4787	5 45G(e)(3) of the Internal Revenue Code and, for
4788	4788	6 taxable years ending on or after December 31, 2008,
4789	4789	7 any amount included in gross income under Section 87
4790	4790	8 of the Internal Revenue Code; the provisions of this
4791	4791	9 subparagraph are exempt from the provisions of Section
4792	4792	10 250;
4793	4793	11 (K) An amount equal to those dividends included in
4794	4794	12 such total which were paid by a corporation which
4795	4795	13 conducts business operations in a River Edge
4796	4796	14 Redevelopment Zone or zones created under the River
4797	4797	15 Edge Redevelopment Zone Act and conducts substantially
4798	4798	16 all of its operations from a River Edge Redevelopment
4799	4799	17 Zone or zones. This subparagraph (K) is exempt from
4800	4800	18 the provisions of Section 250;
4801	4801	19 (L) An amount equal to any contribution made to a
4802	4802	20 job training project established pursuant to the Real
4803	4803	21 Property Tax Increment Allocation Redevelopment Act;
4804	4804	22 (M) An amount equal to those dividends included in
4805	4805	23 such total that were paid by a corporation that
4806	4806	24 conducts business operations in a federally designated
4807	4807	25 Foreign Trade Zone or Sub-Zone and that is designated
4808	4808	26 a High Impact Business located in Illinois; provided
4809	4809
4810	4810
4811	4811
4812	4812
4813	4813
4814	4814	HB4157 - 133 - LRB103 33557 HLH 63369 b
4815	4815
4816	4816
4817	4817	HB4157- 134 -LRB103 33557 HLH 63369 b HB4157 - 134 - LRB103 33557 HLH 63369 b
4818	4818	HB4157 - 134 - LRB103 33557 HLH 63369 b
4819	4819	1 that dividends eligible for the deduction provided in
4820	4820	2 subparagraph (K) of paragraph (2) of this subsection
4821	4821	3 shall not be eligible for the deduction provided under
4822	4822	4 this subparagraph (M);
4823	4823	5 (N) An amount equal to the amount of the deduction
4824	4824	6 used to compute the federal income tax credit for
4825	4825	7 restoration of substantial amounts held under claim of
4826	4826	8 right for the taxable year pursuant to Section 1341 of
4827	4827	9 the Internal Revenue Code;
4828	4828	10 (O) For taxable years 2001 and thereafter, for the
4829	4829	11 taxable year in which the bonus depreciation deduction
4830	4830	12 is taken on the taxpayer's federal income tax return
4831	4831	13 under subsection (k) of Section 168 of the Internal
4832	4832	14 Revenue Code and for each applicable taxable year
4833	4833	15 thereafter, an amount equal to "x", where:
4834	4834	16 (1) "y" equals the amount of the depreciation
4835	4835	17 deduction taken for the taxable year on the
4836	4836	18 taxpayer's federal income tax return on property
4837	4837	19 for which the bonus depreciation deduction was
4838	4838	20 taken in any year under subsection (k) of Section
4839	4839	21 168 of the Internal Revenue Code, but not
4840	4840	22 including the bonus depreciation deduction;
4841	4841	23 (2) for taxable years ending on or before
4842	4842	24 December 31, 2005, "x" equals "y" multiplied by 30
4843	4843	25 and then divided by 70 (or "y" multiplied by
4844	4844	26 0.429); and
4845	4845
4846	4846
4847	4847
4848	4848
4849	4849
4850	4850	HB4157 - 134 - LRB103 33557 HLH 63369 b
4851	4851
4852	4852
4853	4853	HB4157- 135 -LRB103 33557 HLH 63369 b HB4157 - 135 - LRB103 33557 HLH 63369 b
4854	4854	HB4157 - 135 - LRB103 33557 HLH 63369 b
4855	4855	1 (3) for taxable years ending after December
4856	4856	2 31, 2005:
4857	4857	3 (i) for property on which a bonus
4858	4858	4 depreciation deduction of 30% of the adjusted
4859	4859	5 basis was taken, "x" equals "y" multiplied by
4860	4860	6 30 and then divided by 70 (or "y" multiplied
4861	4861	7 by 0.429);
4862	4862	8 (ii) for property on which a bonus
4863	4863	9 depreciation deduction of 50% of the adjusted
4864	4864	10 basis was taken, "x" equals "y" multiplied by
4865	4865	11 1.0;
4866	4866	12 (iii) for property on which a bonus
4867	4867	13 depreciation deduction of 100% of the adjusted
4868	4868	14 basis was taken in a taxable year ending on or
4869	4869	15 after December 31, 2021, "x" equals the
4870	4870	16 depreciation deduction that would be allowed
4871	4871	17 on that property if the taxpayer had made the
4872	4872	18 election under Section 168(k)(7) of the
4873	4873	19 Internal Revenue Code to not claim bonus
4874	4874	20 depreciation on that property; and
4875	4875	21 (iv) for property on which a bonus
4876	4876	22 depreciation deduction of a percentage other
4877	4877	23 than 30%, 50% or 100% of the adjusted basis
4878	4878	24 was taken in a taxable year ending on or after
4879	4879	25 December 31, 2021, "x" equals "y" multiplied
4880	4880	26 by 100 times the percentage bonus depreciation
4881	4881
4882	4882
4883	4883
4884	4884
4885	4885
4886	4886	HB4157 - 135 - LRB103 33557 HLH 63369 b
4887	4887
4888	4888
4889	4889	HB4157- 136 -LRB103 33557 HLH 63369 b HB4157 - 136 - LRB103 33557 HLH 63369 b
4890	4890	HB4157 - 136 - LRB103 33557 HLH 63369 b
4891	4891	1 on the property (that is, 100(bonus%)) and
4892	4892	2 then divided by 100 times 1 minus the
4893	4893	3 percentage bonus depreciation on the property
4894	4894	4 (that is, 100(1bonus%)).
4895	4895	5 The aggregate amount deducted under this
4896	4896	6 subparagraph in all taxable years for any one piece of
4897	4897	7 property may not exceed the amount of the bonus
4898	4898	8 depreciation deduction taken on that property on the
4899	4899	9 taxpayer's federal income tax return under subsection
4900	4900	10 (k) of Section 168 of the Internal Revenue Code. This
4901	4901	11 subparagraph (O) is exempt from the provisions of
4902	4902	12 Section 250;
4903	4903	13 (P) If the taxpayer sells, transfers, abandons, or
4904	4904	14 otherwise disposes of property for which the taxpayer
4905	4905	15 was required in any taxable year to make an addition
4906	4906	16 modification under subparagraph (D-5), then an amount
4907	4907	17 equal to that addition modification.
4908	4908	18 If the taxpayer continues to own property through
4909	4909	19 the last day of the last tax year for which a
4910	4910	20 subtraction is allowed with respect to that property
4911	4911	21 under subparagraph (O) and for which the taxpayer was
4912	4912	22 required in any taxable year to make an addition
4913	4913	23 modification under subparagraph (D-5), then an amount
4914	4914	24 equal to that addition modification.
4915	4915	25 The taxpayer is allowed to take the deduction
4916	4916	26 under this subparagraph only once with respect to any
4917	4917
4918	4918
4919	4919
4920	4920
4921	4921
4922	4922	HB4157 - 136 - LRB103 33557 HLH 63369 b
4923	4923
4924	4924
4925	4925	HB4157- 137 -LRB103 33557 HLH 63369 b HB4157 - 137 - LRB103 33557 HLH 63369 b
4926	4926	HB4157 - 137 - LRB103 33557 HLH 63369 b
4927	4927	1 one piece of property.
4928	4928	2 This subparagraph (P) is exempt from the
4929	4929	3 provisions of Section 250;
4930	4930	4 (Q) The amount of (i) any interest income (net of
4931	4931	5 the deductions allocable thereto) taken into account
4932	4932	6 for the taxable year with respect to a transaction
4933	4933	7 with a taxpayer that is required to make an addition
4934	4934	8 modification with respect to such transaction under
4935	4935	9 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
4936	4936	10 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
4937	4937	11 the amount of such addition modification and (ii) any
4938	4938	12 income from intangible property (net of the deductions
4939	4939	13 allocable thereto) taken into account for the taxable
4940	4940	14 year with respect to a transaction with a taxpayer
4941	4941	15 that is required to make an addition modification with
4942	4942	16 respect to such transaction under Section
4943	4943	17 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
4944	4944	18 203(d)(2)(D-8), but not to exceed the amount of such
4945	4945	19 addition modification. This subparagraph (Q) is exempt
4946	4946	20 from Section 250;
4947	4947	21 (R) An amount equal to the interest income taken
4948	4948	22 into account for the taxable year (net of the
4949	4949	23 deductions allocable thereto) with respect to
4950	4950	24 transactions with (i) a foreign person who would be a
4951	4951	25 member of the taxpayer's unitary business group but
4952	4952	26 for the fact that the foreign person's business
4953	4953
4954	4954
4955	4955
4956	4956
4957	4957
4958	4958	HB4157 - 137 - LRB103 33557 HLH 63369 b
4959	4959
4960	4960
4961	4961	HB4157- 138 -LRB103 33557 HLH 63369 b HB4157 - 138 - LRB103 33557 HLH 63369 b
4962	4962	HB4157 - 138 - LRB103 33557 HLH 63369 b
4963	4963	1 activity outside the United States is 80% or more of
4964	4964	2 that person's total business activity and (ii) for
4965	4965	3 taxable years ending on or after December 31, 2008, to
4966	4966	4 a person who would be a member of the same unitary
4967	4967	5 business group but for the fact that the person is
4968	4968	6 prohibited under Section 1501(a)(27) from being
4969	4969	7 included in the unitary business group because he or
4970	4970	8 she is ordinarily required to apportion business
4971	4971	9 income under different subsections of Section 304, but
4972	4972	10 not to exceed the addition modification required to be
4973	4973	11 made for the same taxable year under Section
4974	4974	12 203(d)(2)(D-7) for interest paid, accrued, or
4975	4975	13 incurred, directly or indirectly, to the same person.
4976	4976	14 This subparagraph (R) is exempt from Section 250;
4977	4977	15 (S) An amount equal to the income from intangible
4978	4978	16 property taken into account for the taxable year (net
4979	4979	17 of the deductions allocable thereto) with respect to
4980	4980	18 transactions with (i) a foreign person who would be a
4981	4981	19 member of the taxpayer's unitary business group but
4982	4982	20 for the fact that the foreign person's business
4983	4983	21 activity outside the United States is 80% or more of
4984	4984	22 that person's total business activity and (ii) for
4985	4985	23 taxable years ending on or after December 31, 2008, to
4986	4986	24 a person who would be a member of the same unitary
4987	4987	25 business group but for the fact that the person is
4988	4988	26 prohibited under Section 1501(a)(27) from being
4989	4989
4990	4990
4991	4991
4992	4992
4993	4993
4994	4994	HB4157 - 138 - LRB103 33557 HLH 63369 b
4995	4995
4996	4996
4997	4997	HB4157- 139 -LRB103 33557 HLH 63369 b HB4157 - 139 - LRB103 33557 HLH 63369 b
4998	4998	HB4157 - 139 - LRB103 33557 HLH 63369 b
4999	4999	1 included in the unitary business group because he or
5000	5000	2 she is ordinarily required to apportion business
5001	5001	3 income under different subsections of Section 304, but
5002	5002	4 not to exceed the addition modification required to be
5003	5003	5 made for the same taxable year under Section
5004	5004	6 203(d)(2)(D-8) for intangible expenses and costs paid,
5005	5005	7 accrued, or incurred, directly or indirectly, to the
5006	5006	8 same person. This subparagraph (S) is exempt from
5007	5007	9 Section 250; and
5008	5008	10 (T) For taxable years ending on or after December
5009	5009	11 31, 2011, in the case of a taxpayer who was required to
5010	5010	12 add back any insurance premiums under Section
5011	5011	13 203(d)(2)(D-9), such taxpayer may elect to subtract
5012	5012	14 that part of a reimbursement received from the
5013	5013	15 insurance company equal to the amount of the expense
5014	5014	16 or loss (including expenses incurred by the insurance
5015	5015	17 company) that would have been taken into account as a
5016	5016	18 deduction for federal income tax purposes if the
5017	5017	19 expense or loss had been uninsured. If a taxpayer
5018	5018	20 makes the election provided for by this subparagraph
5019	5019	21 (T), the insurer to which the premiums were paid must
5020	5020	22 add back to income the amount subtracted by the
5021	5021	23 taxpayer pursuant to this subparagraph (T). This
5022	5022	24 subparagraph (T) is exempt from the provisions of
5023	5023	25 Section 250.
5024	5024
5025	5025
5026	5026
5027	5027
5028	5028
5029	5029	HB4157 - 139 - LRB103 33557 HLH 63369 b
5030	5030
5031	5031
5032	5032	HB4157- 140 -LRB103 33557 HLH 63369 b HB4157 - 140 - LRB103 33557 HLH 63369 b
5033	5033	HB4157 - 140 - LRB103 33557 HLH 63369 b
5034	5034	1 (e) Gross income; adjusted gross income; taxable income.
5035	5035	2 (1) In general. Subject to the provisions of paragraph
5036	5036	3 (2) and subsection (b)(3), for purposes of this Section
5037	5037	4 and Section 803(e), a taxpayer's gross income, adjusted
5038	5038	5 gross income, or taxable income for the taxable year shall
5039	5039	6 mean the amount of gross income, adjusted gross income or
5040	5040	7 taxable income properly reportable for federal income tax
5041	5041	8 purposes for the taxable year under the provisions of the
5042	5042	9 Internal Revenue Code. Taxable income may be less than
5043	5043	10 zero. However, for taxable years ending on or after
5044	5044	11 December 31, 1986, net operating loss carryforwards from
5045	5045	12 taxable years ending prior to December 31, 1986, may not
5046	5046	13 exceed the sum of federal taxable income for the taxable
5047	5047	14 year before net operating loss deduction, plus the excess
5048	5048	15 of addition modifications over subtraction modifications
5049	5049	16 for the taxable year. For taxable years ending prior to
5050	5050	17 December 31, 1986, taxable income may never be an amount
5051	5051	18 in excess of the net operating loss for the taxable year as
5052	5052	19 defined in subsections (c) and (d) of Section 172 of the
5053	5053	20 Internal Revenue Code, provided that when taxable income
5054	5054	21 of a corporation (other than a Subchapter S corporation),
5055	5055	22 trust, or estate is less than zero and addition
5056	5056	23 modifications, other than those provided by subparagraph
5057	5057	24 (E) of paragraph (2) of subsection (b) for corporations or
5058	5058	25 subparagraph (E) of paragraph (2) of subsection (c) for
5059	5059	26 trusts and estates, exceed subtraction modifications, an
5060	5060
5061	5061
5062	5062
5063	5063
5064	5064
5065	5065	HB4157 - 140 - LRB103 33557 HLH 63369 b
5066	5066
5067	5067
5068	5068	HB4157- 141 -LRB103 33557 HLH 63369 b HB4157 - 141 - LRB103 33557 HLH 63369 b
5069	5069	HB4157 - 141 - LRB103 33557 HLH 63369 b
5070	5070	1 addition modification must be made under those
5071	5071	2 subparagraphs for any other taxable year to which the
5072	5072	3 taxable income less than zero (net operating loss) is
5073	5073	4 applied under Section 172 of the Internal Revenue Code or
5074	5074	5 under subparagraph (E) of paragraph (2) of this subsection
5075	5075	6 (e) applied in conjunction with Section 172 of the
5076	5076	7 Internal Revenue Code.
5077	5077	8 (2) Special rule. For purposes of paragraph (1) of
5078	5078	9 this subsection, the taxable income properly reportable
5079	5079	10 for federal income tax purposes shall mean:
5080	5080	11 (A) Certain life insurance companies. In the case
5081	5081	12 of a life insurance company subject to the tax imposed
5082	5082	13 by Section 801 of the Internal Revenue Code, life
5083	5083	14 insurance company taxable income, plus the amount of
5084	5084	15 distribution from pre-1984 policyholder surplus
5085	5085	16 accounts as calculated under Section 815a of the
5086	5086	17 Internal Revenue Code;
5087	5087	18 (B) Certain other insurance companies. In the case
5088	5088	19 of mutual insurance companies subject to the tax
5089	5089	20 imposed by Section 831 of the Internal Revenue Code,
5090	5090	21 insurance company taxable income;
5091	5091	22 (C) Regulated investment companies. In the case of
5092	5092	23 a regulated investment company subject to the tax
5093	5093	24 imposed by Section 852 of the Internal Revenue Code,
5094	5094	25 investment company taxable income;
5095	5095	26 (D) Real estate investment trusts. In the case of
5096	5096
5097	5097
5098	5098
5099	5099
5100	5100
5101	5101	HB4157 - 141 - LRB103 33557 HLH 63369 b
5102	5102
5103	5103
5104	5104	HB4157- 142 -LRB103 33557 HLH 63369 b HB4157 - 142 - LRB103 33557 HLH 63369 b
5105	5105	HB4157 - 142 - LRB103 33557 HLH 63369 b
5106	5106	1 a real estate investment trust subject to the tax
5107	5107	2 imposed by Section 857 of the Internal Revenue Code,
5108	5108	3 real estate investment trust taxable income;
5109	5109	4 (E) Consolidated corporations. In the case of a
5110	5110	5 corporation which is a member of an affiliated group
5111	5111	6 of corporations filing a consolidated income tax
5112	5112	7 return for the taxable year for federal income tax
5113	5113	8 purposes, taxable income determined as if such
5114	5114	9 corporation had filed a separate return for federal
5115	5115	10 income tax purposes for the taxable year and each
5116	5116	11 preceding taxable year for which it was a member of an
5117	5117	12 affiliated group. For purposes of this subparagraph,
5118	5118	13 the taxpayer's separate taxable income shall be
5119	5119	14 determined as if the election provided by Section
5120	5120	15 243(b)(2) of the Internal Revenue Code had been in
5121	5121	16 effect for all such years;
5122	5122	17 (F) Cooperatives. In the case of a cooperative
5123	5123	18 corporation or association, the taxable income of such
5124	5124	19 organization determined in accordance with the
5125	5125	20 provisions of Section 1381 through 1388 of the
5126	5126	21 Internal Revenue Code, but without regard to the
5127	5127	22 prohibition against offsetting losses from patronage
5128	5128	23 activities against income from nonpatronage
5129	5129	24 activities; except that a cooperative corporation or
5130	5130	25 association may make an election to follow its federal
5131	5131	26 income tax treatment of patronage losses and
5132	5132
5133	5133
5134	5134
5135	5135
5136	5136
5137	5137	HB4157 - 142 - LRB103 33557 HLH 63369 b
5138	5138
5139	5139
5140	5140	HB4157- 143 -LRB103 33557 HLH 63369 b HB4157 - 143 - LRB103 33557 HLH 63369 b
5141	5141	HB4157 - 143 - LRB103 33557 HLH 63369 b
5142	5142	1 nonpatronage losses. In the event such election is
5143	5143	2 made, such losses shall be computed and carried over
5144	5144	3 in a manner consistent with subsection (a) of Section
5145	5145	4 207 of this Act and apportioned by the apportionment
5146	5146	5 factor reported by the cooperative on its Illinois
5147	5147	6 income tax return filed for the taxable year in which
5148	5148	7 the losses are incurred. The election shall be
5149	5149	8 effective for all taxable years with original returns
5150	5150	9 due on or after the date of the election. In addition,
5151	5151	10 the cooperative may file an amended return or returns,
5152	5152	11 as allowed under this Act, to provide that the
5153	5153	12 election shall be effective for losses incurred or
5154	5154	13 carried forward for taxable years occurring prior to
5155	5155	14 the date of the election. Once made, the election may
5156	5156	15 only be revoked upon approval of the Director. The
5157	5157	16 Department shall adopt rules setting forth
5158	5158	17 requirements for documenting the elections and any
5159	5159	18 resulting Illinois net loss and the standards to be
5160	5160	19 used by the Director in evaluating requests to revoke
5161	5161	20 elections. Public Act 96-932 is declaratory of
5162	5162	21 existing law;
5163	5163	22 (G) Subchapter S corporations. In the case of: (i)
5164	5164	23 a Subchapter S corporation for which there is in
5165	5165	24 effect an election for the taxable year under Section
5166	5166	25 1362 of the Internal Revenue Code, the taxable income
5167	5167	26 of such corporation determined in accordance with
5168	5168
5169	5169
5170	5170
5171	5171
5172	5172
5173	5173	HB4157 - 143 - LRB103 33557 HLH 63369 b
5174	5174
5175	5175
5176	5176	HB4157- 144 -LRB103 33557 HLH 63369 b HB4157 - 144 - LRB103 33557 HLH 63369 b
5177	5177	HB4157 - 144 - LRB103 33557 HLH 63369 b
5178	5178	1 Section 1363(b) of the Internal Revenue Code, except
5179	5179	2 that taxable income shall take into account those
5180	5180	3 items which are required by Section 1363(b)(1) of the
5181	5181	4 Internal Revenue Code to be separately stated; and
5182	5182	5 (ii) a Subchapter S corporation for which there is in
5183	5183	6 effect a federal election to opt out of the provisions
5184	5184	7 of the Subchapter S Revision Act of 1982 and have
5185	5185	8 applied instead the prior federal Subchapter S rules
5186	5186	9 as in effect on July 1, 1982, the taxable income of
5187	5187	10 such corporation determined in accordance with the
5188	5188	11 federal Subchapter S rules as in effect on July 1,
5189	5189	12 1982; and
5190	5190	13 (H) Partnerships. In the case of a partnership,
5191	5191	14 taxable income determined in accordance with Section
5192	5192	15 703 of the Internal Revenue Code, except that taxable
5193	5193	16 income shall take into account those items which are
5194	5194	17 required by Section 703(a)(1) to be separately stated
5195	5195	18 but which would be taken into account by an individual
5196	5196	19 in calculating his taxable income.
5197	5197	20 (3) Recapture of business expenses on disposition of
5198	5198	21 asset or business. Notwithstanding any other law to the
5199	5199	22 contrary, if in prior years income from an asset or
5200	5200	23 business has been classified as business income and in a
5201	5201	24 later year is demonstrated to be non-business income, then
5202	5202	25 all expenses, without limitation, deducted in such later
5203	5203	26 year and in the 2 immediately preceding taxable years
5204	5204
5205	5205
5206	5206
5207	5207
5208	5208
5209	5209	HB4157 - 144 - LRB103 33557 HLH 63369 b
5210	5210
5211	5211
5212	5212	HB4157- 145 -LRB103 33557 HLH 63369 b HB4157 - 145 - LRB103 33557 HLH 63369 b
5213	5213	HB4157 - 145 - LRB103 33557 HLH 63369 b
5214	5214	1 related to that asset or business that generated the
5215	5215	2 non-business income shall be added back and recaptured as
5216	5216	3 business income in the year of the disposition of the
5217	5217	4 asset or business. Such amount shall be apportioned to
5218	5218	5 Illinois using the greater of the apportionment fraction
5219	5219	6 computed for the business under Section 304 of this Act
5220	5220	7 for the taxable year or the average of the apportionment
5221	5221	8 fractions computed for the business under Section 304 of
5222	5222	9 this Act for the taxable year and for the 2 immediately
5223	5223	10 preceding taxable years.
5224	5224	11 (f) Valuation limitation amount.
5225	5225	12 (1) In general. The valuation limitation amount
5226	5226	13 referred to in subsections (a)(2)(G), (c)(2)(I) and
5227	5227	14 (d)(2)(E) is an amount equal to:
5228	5228	15 (A) The sum of the pre-August 1, 1969 appreciation
5229	5229	16 amounts (to the extent consisting of gain reportable
5230	5230	17 under the provisions of Section 1245 or 1250 of the
5231	5231	18 Internal Revenue Code) for all property in respect of
5232	5232	19 which such gain was reported for the taxable year;
5233	5233	20 plus
5234	5234	21 (B) The lesser of (i) the sum of the pre-August 1,
5235	5235	22 1969 appreciation amounts (to the extent consisting of
5236	5236	23 capital gain) for all property in respect of which
5237	5237	24 such gain was reported for federal income tax purposes
5238	5238	25 for the taxable year, or (ii) the net capital gain for
5239	5239
5240	5240
5241	5241
5242	5242
5243	5243
5244	5244	HB4157 - 145 - LRB103 33557 HLH 63369 b
5245	5245
5246	5246
5247	5247	HB4157- 146 -LRB103 33557 HLH 63369 b HB4157 - 146 - LRB103 33557 HLH 63369 b
5248	5248	HB4157 - 146 - LRB103 33557 HLH 63369 b
5249	5249	1 the taxable year, reduced in either case by any amount
5250	5250	2 of such gain included in the amount determined under
5251	5251	3 subsection (a)(2)(F) or (c)(2)(H).
5252	5252	4 (2) Pre-August 1, 1969 appreciation amount.
5253	5253	5 (A) If the fair market value of property referred
5254	5254	6 to in paragraph (1) was readily ascertainable on
5255	5255	7 August 1, 1969, the pre-August 1, 1969 appreciation
5256	5256	8 amount for such property is the lesser of (i) the
5257	5257	9 excess of such fair market value over the taxpayer's
5258	5258	10 basis (for determining gain) for such property on that
5259	5259	11 date (determined under the Internal Revenue Code as in
5260	5260	12 effect on that date), or (ii) the total gain realized
5261	5261	13 and reportable for federal income tax purposes in
5262	5262	14 respect of the sale, exchange or other disposition of
5263	5263	15 such property.
5264	5264	16 (B) If the fair market value of property referred
5265	5265	17 to in paragraph (1) was not readily ascertainable on
5266	5266	18 August 1, 1969, the pre-August 1, 1969 appreciation
5267	5267	19 amount for such property is that amount which bears
5268	5268	20 the same ratio to the total gain reported in respect of
5269	5269	21 the property for federal income tax purposes for the
5270	5270	22 taxable year, as the number of full calendar months in
5271	5271	23 that part of the taxpayer's holding period for the
5272	5272	24 property ending July 31, 1969 bears to the number of
5273	5273	25 full calendar months in the taxpayer's entire holding
5274	5274	26 period for the property.
5275	5275
5276	5276
5277	5277
5278	5278
5279	5279
5280	5280	HB4157 - 146 - LRB103 33557 HLH 63369 b
5281	5281
5282	5282
5283	5283	HB4157- 147 -LRB103 33557 HLH 63369 b HB4157 - 147 - LRB103 33557 HLH 63369 b
5284	5284	HB4157 - 147 - LRB103 33557 HLH 63369 b
5285	5285	1 (C) The Department shall prescribe such
5286	5286	2 regulations as may be necessary to carry out the
5287	5287	3 purposes of this paragraph.
5288	5288	4 (g) Double deductions. Unless specifically provided
5289	5289	5 otherwise, nothing in this Section shall permit the same item
5290	5290	6 to be deducted more than once.
5291	5291	7 (g-5) For taxable years beginning on or after January 1,
5292	5292	8 2024, in calculating the taxpayer's base income, the
5293	5293	9 taxpayer's federal adjusted gross income shall also be
5294	5294	10 modified to exclude the portion of the income or loss received
5295	5295	11 from a trade or business conducted within and without Illinois
5296	5296	12 or from a pass-through entity conducting business within and
5297	5297	13 without Illinois that is not derived from or connected with
5298	5298	14 Illinois sources as determined in the provisions in Article 3
5299	5299	15 of this Act. This subsection (g-5) is exempt from the
5300	5300	16 provisions of Section 250.
5301	5301	17 (h) Legislative intention. Except as expressly provided by
5302	5302	18 this Section there shall be no modifications or limitations on
5303	5303	19 the amounts of income, gain, loss or deduction taken into
5304	5304	20 account in determining gross income, adjusted gross income or
5305	5305	21 taxable income for federal income tax purposes for the taxable
5306	5306	22 year, or in the amount of such items entering into the
5307	5307	23 computation of base income and net income under this Act for
5308	5308	24 such taxable year, whether in respect of property values as of
5309	5309
5310	5310
5311	5311
5312	5312
5313	5313
5314	5314	HB4157 - 147 - LRB103 33557 HLH 63369 b
5315	5315
5316	5316
5317	5317	HB4157- 148 -LRB103 33557 HLH 63369 b HB4157 - 148 - LRB103 33557 HLH 63369 b
5318	5318	HB4157 - 148 - LRB103 33557 HLH 63369 b
5319	5319	1 August 1, 1969 or otherwise.
5320	5320	2 (Source: P.A. 101-9, eff. 6-5-19; 101-81, eff. 7-12-19;
5321	5321	3 102-16, eff. 6-17-21; 102-558, eff. 8-20-21; 102-658, eff.
5322	5322	4 8-27-21; 102-813, eff. 5-13-22; 102-1112, eff. 12-21-22.)
5323	5323
5324	5324
5325	5325
5326	5326
5327	5327
5328	5328	HB4157 - 148 - LRB103 33557 HLH 63369 b