Illinois 2023-2024 Regular Session

Illinois Senate Bill SB1906 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 SB1906 Introduced 2/9/2023, by Sen. Chapin Rose SYNOPSIS AS INTRODUCED: 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 (i) the portion of income or loss that is received from a trade or business conducted within and without Illinois and that is not derived from or connected with Illinois sources and (ii) the portion of income or loss that is received from a pass-through entity conducting business within and without Illinois and that is not derived from or connected with Illinois sources. Effective immediately. LRB103 05197 HLH 50213 b A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB1906 Introduced 2/9/2023, by Sen. Chapin Rose SYNOPSIS AS INTRODUCED: 35 ILCS 5/203 from Ch. 120, par. 2-203 35 ILCS 5/203 from Ch. 120, par. 2-203 Amends the Illinois Income Tax Act. Provides that, when calculating the taxpayer's base income, the taxpayer's federal adjusted gross income shall be modified to exclude (i) the portion of income or loss that is received from a trade or business conducted within and without Illinois and that is not derived from or connected with Illinois sources and (ii) the portion of income or loss that is received from a pass-through entity conducting business within and without Illinois and that is not derived from or connected with Illinois sources. Effective immediately. LRB103 05197 HLH 50213 b LRB103 05197 HLH 50213 b A BILL FOR
2	2	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB1906 Introduced 2/9/2023, by Sen. Chapin Rose SYNOPSIS AS INTRODUCED:
3	3	35 ILCS 5/203 from Ch. 120, par. 2-203 35 ILCS 5/203 from Ch. 120, par. 2-203
4	4	35 ILCS 5/203 from Ch. 120, par. 2-203
5	5	Amends the Illinois Income Tax Act. Provides that, when calculating the taxpayer's base income, the taxpayer's federal adjusted gross income shall be modified to exclude (i) the portion of income or loss that is received from a trade or business conducted within and without Illinois and that is not derived from or connected with Illinois sources and (ii) the portion of income or loss that is received from a pass-through entity conducting business within and without Illinois and that is not derived from or connected with Illinois sources. Effective immediately.
6	6	LRB103 05197 HLH 50213 b LRB103 05197 HLH 50213 b
7	7	LRB103 05197 HLH 50213 b
8	8	A BILL FOR
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10	10	SB1906 LRB103 05197 HLH 50213 b
11	11	1 AN ACT concerning revenue.
12	12	2 Be it enacted by the People of the State of Illinois,
13	13	3 represented in the General Assembly:
14	14	4 Section 5. The Illinois Income Tax Act is amended by
15	15	5 changing Section 203 as follows:
16	16	6 (35 ILCS 5/203) (from Ch. 120, par. 2-203)
17	17	7 Sec. 203. Base income defined.
18	18	8 (a) Individuals.
19	19	9 (1) In general. In the case of an individual, base
20	20	10 income means an amount equal to the taxpayer's adjusted
21	21	11 gross income for the taxable year as modified by paragraph
22	22	12 (2).
23	23	13 (2) Modifications. The adjusted gross income referred
24	24	14 to in paragraph (1) shall be modified by adding thereto
25	25	15 the sum of the following amounts:
26	26	16 (A) An amount equal to all amounts paid or accrued
27	27	17 to the taxpayer as interest or dividends during the
28	28	18 taxable year to the extent excluded from gross income
29	29	19 in the computation of adjusted gross income, except
30	30	20 stock dividends of qualified public utilities
31	31	21 described in Section 305(e) of the Internal Revenue
32	32	22 Code;
33	33	23 (B) An amount equal to the amount of tax imposed by
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37	37	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB1906 Introduced 2/9/2023, by Sen. Chapin Rose SYNOPSIS AS INTRODUCED:
38	38	35 ILCS 5/203 from Ch. 120, par. 2-203 35 ILCS 5/203 from Ch. 120, par. 2-203
39	39	35 ILCS 5/203 from Ch. 120, par. 2-203
40	40	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 (i) the portion of income or loss that is received from a trade or business conducted within and without Illinois and that is not derived from or connected with Illinois sources and (ii) the portion of income or loss that is received from a pass-through entity conducting business within and without Illinois and that is not derived from or connected with Illinois sources. Effective immediately.
41	41	LRB103 05197 HLH 50213 b LRB103 05197 HLH 50213 b
42	42	LRB103 05197 HLH 50213 b
43	43	A BILL FOR
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49	49	35 ILCS 5/203 from Ch. 120, par. 2-203
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68	68	1 this Act to the extent deducted from gross income in
69	69	2 the computation of adjusted gross income for the
70	70	3 taxable year;
71	71	4 (C) An amount equal to the amount received during
72	72	5 the taxable year as a recovery or refund of real
73	73	6 property taxes paid with respect to the taxpayer's
74	74	7 principal residence under the Revenue Act of 1939 and
75	75	8 for which a deduction was previously taken under
76	76	9 subparagraph (L) of this paragraph (2) prior to July
77	77	10 1, 1991, the retrospective application date of Article
78	78	11 4 of Public Act 87-17. In the case of multi-unit or
79	79	12 multi-use structures and farm dwellings, the taxes on
80	80	13 the taxpayer's principal residence shall be that
81	81	14 portion of the total taxes for the entire property
82	82	15 which is attributable to such principal residence;
83	83	16 (D) An amount equal to the amount of the capital
84	84	17 gain deduction allowable under the Internal Revenue
85	85	18 Code, to the extent deducted from gross income in the
86	86	19 computation of adjusted gross income;
87	87	20 (D-5) An amount, to the extent not included in
88	88	21 adjusted gross income, equal to the amount of money
89	89	22 withdrawn by the taxpayer in the taxable year from a
90	90	23 medical care savings account and the interest earned
91	91	24 on the account in the taxable year of a withdrawal
92	92	25 pursuant to subsection (b) of Section 20 of the
93	93	26 Medical Care Savings Account Act or subsection (b) of
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104	104	1 Section 20 of the Medical Care Savings Account Act of
105	105	2 2000;
106	106	3 (D-10) For taxable years ending after December 31,
107	107	4 1997, an amount equal to any eligible remediation
108	108	5 costs that the individual deducted in computing
109	109	6 adjusted gross income and for which the individual
110	110	7 claims a credit under subsection (l) of Section 201;
111	111	8 (D-15) For taxable years 2001 and thereafter, an
112	112	9 amount equal to the bonus depreciation deduction taken
113	113	10 on the taxpayer's federal income tax return for the
114	114	11 taxable year under subsection (k) of Section 168 of
115	115	12 the Internal Revenue Code;
116	116	13 (D-16) If the taxpayer sells, transfers, abandons,
117	117	14 or otherwise disposes of property for which the
118	118	15 taxpayer was required in any taxable year to make an
119	119	16 addition modification under subparagraph (D-15), then
120	120	17 an amount equal to the aggregate amount of the
121	121	18 deductions taken in all taxable years under
122	122	19 subparagraph (Z) with respect to that property.
123	123	20 If the taxpayer continues to own property through
124	124	21 the last day of the last tax year for which a
125	125	22 subtraction is allowed with respect to that property
126	126	23 under subparagraph (Z) and for which the taxpayer was
127	127	24 allowed in any taxable year to make a subtraction
128	128	25 modification under subparagraph (Z), then an amount
129	129	26 equal to that subtraction modification.
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140	140	1 The taxpayer is required to make the addition
141	141	2 modification under this subparagraph only once with
142	142	3 respect to any one piece of property;
143	143	4 (D-17) An amount equal to the amount otherwise
144	144	5 allowed as a deduction in computing base income for
145	145	6 interest paid, accrued, or incurred, directly or
146	146	7 indirectly, (i) for taxable years ending on or after
147	147	8 December 31, 2004, to a foreign person who would be a
148	148	9 member of the same unitary business group but for the
149	149	10 fact that foreign person's business activity outside
150	150	11 the United States is 80% or more of the foreign
151	151	12 person's total business activity and (ii) for taxable
152	152	13 years ending on or after December 31, 2008, to a person
153	153	14 who would be a member of the same unitary business
154	154	15 group but for the fact that the person is prohibited
155	155	16 under Section 1501(a)(27) from being included in the
156	156	17 unitary business group because he or she is ordinarily
157	157	18 required to apportion business income under different
158	158	19 subsections of Section 304. The addition modification
159	159	20 required by this subparagraph shall be reduced to the
160	160	21 extent that dividends were included in base income of
161	161	22 the unitary group for the same taxable year and
162	162	23 received by the taxpayer or by a member of the
163	163	24 taxpayer's unitary business group (including amounts
164	164	25 included in gross income under Sections 951 through
165	165	26 964 of the Internal Revenue Code and amounts included
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176	176	1 in gross income under Section 78 of the Internal
177	177	2 Revenue Code) with respect to the stock of the same
178	178	3 person to whom the interest was paid, accrued, or
179	179	4 incurred.
180	180	5 This paragraph shall not apply to the following:
181	181	6 (i) an item of interest paid, accrued, or
182	182	7 incurred, directly or indirectly, to a person who
183	183	8 is subject in a foreign country or state, other
184	184	9 than a state which requires mandatory unitary
185	185	10 reporting, to a tax on or measured by net income
186	186	11 with respect to such interest; or
187	187	12 (ii) an item of interest paid, accrued, or
188	188	13 incurred, directly or indirectly, to a person if
189	189	14 the taxpayer can establish, based on a
190	190	15 preponderance of the evidence, both of the
191	191	16 following:
192	192	17 (a) the person, during the same taxable
193	193	18 year, paid, accrued, or incurred, the interest
194	194	19 to a person that is not a related member, and
195	195	20 (b) the transaction giving rise to the
196	196	21 interest expense between the taxpayer and the
197	197	22 person did not have as a principal purpose the
198	198	23 avoidance of Illinois income tax, and is paid
199	199	24 pursuant to a contract or agreement that
200	200	25 reflects an arm's-length interest rate and
201	201	26 terms; or
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212	212	1 (iii) the taxpayer can establish, based on
213	213	2 clear and convincing evidence, that the interest
214	214	3 paid, accrued, or incurred relates to a contract
215	215	4 or agreement entered into at arm's-length rates
216	216	5 and terms and the principal purpose for the
217	217	6 payment is not federal or Illinois tax avoidance;
218	218	7 or
219	219	8 (iv) an item of interest paid, accrued, or
220	220	9 incurred, directly or indirectly, to a person if
221	221	10 the taxpayer establishes by clear and convincing
222	222	11 evidence that the adjustments are unreasonable; or
223	223	12 if the taxpayer and the Director agree in writing
224	224	13 to the application or use of an alternative method
225	225	14 of apportionment under Section 304(f).
226	226	15 Nothing in this subsection shall preclude the
227	227	16 Director from making any other adjustment
228	228	17 otherwise allowed under Section 404 of this Act
229	229	18 for any tax year beginning after the effective
230	230	19 date of this amendment provided such adjustment is
231	231	20 made pursuant to regulation adopted by the
232	232	21 Department and such regulations provide methods
233	233	22 and standards by which the Department will utilize
234	234	23 its authority under Section 404 of this Act;
235	235	24 (D-18) An amount equal to the amount of intangible
236	236	25 expenses and costs otherwise allowed as a deduction in
237	237	26 computing base income, and that were paid, accrued, or
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248	248	1 incurred, directly or indirectly, (i) for taxable
249	249	2 years ending on or after December 31, 2004, to a
250	250	3 foreign person who would be a member of the same
251	251	4 unitary business group but for the fact that the
252	252	5 foreign person's business activity outside the United
253	253	6 States is 80% or more of that person's total business
254	254	7 activity and (ii) for taxable years ending on or after
255	255	8 December 31, 2008, to a person who would be a member of
256	256	9 the same unitary business group but for the fact that
257	257	10 the person is prohibited under Section 1501(a)(27)
258	258	11 from being included in the unitary business group
259	259	12 because he or she is ordinarily required to apportion
260	260	13 business income under different subsections of Section
261	261	14 304. The addition modification required by this
262	262	15 subparagraph shall be reduced to the extent that
263	263	16 dividends were included in base income of the unitary
264	264	17 group for the same taxable year and received by the
265	265	18 taxpayer or by a member of the taxpayer's unitary
266	266	19 business group (including amounts included in gross
267	267	20 income under Sections 951 through 964 of the Internal
268	268	21 Revenue Code and amounts included in gross income
269	269	22 under Section 78 of the Internal Revenue Code) with
270	270	23 respect to the stock of the same person to whom the
271	271	24 intangible expenses and costs were directly or
272	272	25 indirectly paid, incurred, or accrued. The preceding
273	273	26 sentence does not apply to the extent that the same
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284	284	1 dividends caused a reduction to the addition
285	285	2 modification required under Section 203(a)(2)(D-17) of
286	286	3 this Act. As used in this subparagraph, the term
287	287	4 "intangible expenses and costs" includes (1) expenses,
288	288	5 losses, and costs for, or related to, the direct or
289	289	6 indirect acquisition, use, maintenance or management,
290	290	7 ownership, sale, exchange, or any other disposition of
291	291	8 intangible property; (2) losses incurred, directly or
292	292	9 indirectly, from factoring transactions or discounting
293	293	10 transactions; (3) royalty, patent, technical, and
294	294	11 copyright fees; (4) licensing fees; and (5) other
295	295	12 similar expenses and costs. For purposes of this
296	296	13 subparagraph, "intangible property" includes patents,
297	297	14 patent applications, trade names, trademarks, service
298	298	15 marks, copyrights, mask works, trade secrets, and
299	299	16 similar types of intangible assets.
300	300	17 This paragraph shall not apply to the following:
301	301	18 (i) any item of intangible expenses or costs
302	302	19 paid, accrued, or incurred, directly or
303	303	20 indirectly, from a transaction with a person who
304	304	21 is subject in a foreign country or state, other
305	305	22 than a state which requires mandatory unitary
306	306	23 reporting, to a tax on or measured by net income
307	307	24 with respect to such item; or
308	308	25 (ii) any item of intangible expense or cost
309	309	26 paid, accrued, or incurred, directly or
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320	320	1 indirectly, if the taxpayer can establish, based
321	321	2 on a preponderance of the evidence, both of the
322	322	3 following:
323	323	4 (a) the person during the same taxable
324	324	5 year paid, accrued, or incurred, the
325	325	6 intangible expense or cost to a person that is
326	326	7 not a related member, and
327	327	8 (b) the transaction giving rise to the
328	328	9 intangible expense or cost between the
329	329	10 taxpayer and the person did not have as a
330	330	11 principal purpose the avoidance of Illinois
331	331	12 income tax, and is paid pursuant to a contract
332	332	13 or agreement that reflects arm's-length terms;
333	333	14 or
334	334	15 (iii) any item of intangible expense or cost
335	335	16 paid, accrued, or incurred, directly or
336	336	17 indirectly, from a transaction with a person if
337	337	18 the taxpayer establishes by clear and convincing
338	338	19 evidence, that the adjustments are unreasonable;
339	339	20 or if the taxpayer and the Director agree in
340	340	21 writing to the application or use of an
341	341	22 alternative method of apportionment under Section
342	342	23 304(f);
343	343	24 Nothing in this subsection shall preclude the
344	344	25 Director from making any other adjustment
345	345	26 otherwise allowed under Section 404 of this Act
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356	356	1 for any tax year beginning after the effective
357	357	2 date of this amendment provided such adjustment is
358	358	3 made pursuant to regulation adopted by the
359	359	4 Department and such regulations provide methods
360	360	5 and standards by which the Department will utilize
361	361	6 its authority under Section 404 of this Act;
362	362	7 (D-19) For taxable years ending on or after
363	363	8 December 31, 2008, an amount equal to the amount of
364	364	9 insurance premium expenses and costs otherwise allowed
365	365	10 as a deduction in computing base income, and that were
366	366	11 paid, accrued, or incurred, directly or indirectly, to
367	367	12 a person who would be a member of the same unitary
368	368	13 business group but for the fact that the person is
369	369	14 prohibited under Section 1501(a)(27) from being
370	370	15 included in the unitary business group because he or
371	371	16 she is ordinarily required to apportion business
372	372	17 income under different subsections of Section 304. The
373	373	18 addition modification required by this subparagraph
374	374	19 shall be reduced to the extent that dividends were
375	375	20 included in base income of the unitary group for the
376	376	21 same taxable year and received by the taxpayer or by a
377	377	22 member of the taxpayer's unitary business group
378	378	23 (including amounts included in gross income under
379	379	24 Sections 951 through 964 of the Internal Revenue Code
380	380	25 and amounts included in gross income under Section 78
381	381	26 of the Internal Revenue Code) with respect to the
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392	392	1 stock of the same person to whom the premiums and costs
393	393	2 were directly or indirectly paid, incurred, or
394	394	3 accrued. The preceding sentence does not apply to the
395	395	4 extent that the same dividends caused a reduction to
396	396	5 the addition modification required under Section
397	397	6 203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this
398	398	7 Act;
399	399	8 (D-20) For taxable years beginning on or after
400	400	9 January 1, 2002 and ending on or before December 31,
401	401	10 2006, in the case of a distribution from a qualified
402	402	11 tuition program under Section 529 of the Internal
403	403	12 Revenue Code, other than (i) a distribution from a
404	404	13 College Savings Pool created under Section 16.5 of the
405	405	14 State Treasurer Act or (ii) a distribution from the
406	406	15 Illinois Prepaid Tuition Trust Fund, an amount equal
407	407	16 to the amount excluded from gross income under Section
408	408	17 529(c)(3)(B). For taxable years beginning on or after
409	409	18 January 1, 2007, in the case of a distribution from a
410	410	19 qualified tuition program under Section 529 of the
411	411	20 Internal Revenue Code, other than (i) a distribution
412	412	21 from a College Savings Pool created under Section 16.5
413	413	22 of the State Treasurer Act, (ii) a distribution from
414	414	23 the Illinois Prepaid Tuition Trust Fund, or (iii) a
415	415	24 distribution from a qualified tuition program under
416	416	25 Section 529 of the Internal Revenue Code that (I)
417	417	26 adopts and determines that its offering materials
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428	428	1 comply with the College Savings Plans Network's
429	429	2 disclosure principles and (II) has made reasonable
430	430	3 efforts to inform in-state residents of the existence
431	431	4 of in-state qualified tuition programs by informing
432	432	5 Illinois residents directly and, where applicable, to
433	433	6 inform financial intermediaries distributing the
434	434	7 program to inform in-state residents of the existence
435	435	8 of in-state qualified tuition programs at least
436	436	9 annually, an amount equal to the amount excluded from
437	437	10 gross income under Section 529(c)(3)(B).
438	438	11 For the purposes of this subparagraph (D-20), a
439	439	12 qualified tuition program has made reasonable efforts
440	440	13 if it makes disclosures (which may use the term
441	441	14 "in-state program" or "in-state plan" and need not
442	442	15 specifically refer to Illinois or its qualified
443	443	16 programs by name) (i) directly to prospective
444	444	17 participants in its offering materials or makes a
445	445	18 public disclosure, such as a website posting; and (ii)
446	446	19 where applicable, to intermediaries selling the
447	447	20 out-of-state program in the same manner that the
448	448	21 out-of-state program distributes its offering
449	449	22 materials;
450	450	23 (D-20.5) For taxable years beginning on or after
451	451	24 January 1, 2018, in the case of a distribution from a
452	452	25 qualified ABLE program under Section 529A of the
453	453	26 Internal Revenue Code, other than a distribution from
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464	464	1 a qualified ABLE program created under Section 16.6 of
465	465	2 the State Treasurer Act, an amount equal to the amount
466	466	3 excluded from gross income under Section 529A(c)(1)(B)
467	467	4 of the Internal Revenue Code;
468	468	5 (D-21) For taxable years beginning on or after
469	469	6 January 1, 2007, in the case of transfer of moneys from
470	470	7 a qualified tuition program under Section 529 of the
471	471	8 Internal Revenue Code that is administered by the
472	472	9 State to an out-of-state program, an amount equal to
473	473	10 the amount of moneys previously deducted from base
474	474	11 income under subsection (a)(2)(Y) of this Section;
475	475	12 (D-21.5) For taxable years beginning on or after
476	476	13 January 1, 2018, in the case of the transfer of moneys
477	477	14 from a qualified tuition program under Section 529 or
478	478	15 a qualified ABLE program under Section 529A of the
479	479	16 Internal Revenue Code that is administered by this
480	480	17 State to an ABLE account established under an
481	481	18 out-of-state ABLE account program, an amount equal to
482	482	19 the contribution component of the transferred amount
483	483	20 that was previously deducted from base income under
484	484	21 subsection (a)(2)(Y) or subsection (a)(2)(HH) of this
485	485	22 Section;
486	486	23 (D-22) For taxable years beginning on or after
487	487	24 January 1, 2009, and prior to January 1, 2018, in the
488	488	25 case of a nonqualified withdrawal or refund of moneys
489	489	26 from a qualified tuition program under Section 529 of
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496	496
497	497
498	498	SB1906- 14 -LRB103 05197 HLH 50213 b SB1906 - 14 - LRB103 05197 HLH 50213 b
499	499	SB1906 - 14 - LRB103 05197 HLH 50213 b
500	500	1 the Internal Revenue Code administered by the State
501	501	2 that is not used for qualified expenses at an eligible
502	502	3 education institution, an amount equal to the
503	503	4 contribution component of the nonqualified withdrawal
504	504	5 or refund that was previously deducted from base
505	505	6 income under subsection (a)(2)(y) of this Section,
506	506	7 provided that the withdrawal or refund did not result
507	507	8 from the beneficiary's death or disability. For
508	508	9 taxable years beginning on or after January 1, 2018:
509	509	10 (1) in the case of a nonqualified withdrawal or
510	510	11 refund, as defined under Section 16.5 of the State
511	511	12 Treasurer Act, of moneys from a qualified tuition
512	512	13 program under Section 529 of the Internal Revenue Code
513	513	14 administered by the State, an amount equal to the
514	514	15 contribution component of the nonqualified withdrawal
515	515	16 or refund that was previously deducted from base
516	516	17 income under subsection (a)(2)(Y) of this Section, and
517	517	18 (2) in the case of a nonqualified withdrawal or refund
518	518	19 from a qualified ABLE program under Section 529A of
519	519	20 the Internal Revenue Code administered by the State
520	520	21 that is not used for qualified disability expenses, an
521	521	22 amount equal to the contribution component of the
522	522	23 nonqualified withdrawal or refund that was previously
523	523	24 deducted from base income under subsection (a)(2)(HH)
524	524	25 of this Section;
525	525	26 (D-23) An amount equal to the credit allowable to
526	526
527	527
528	528
529	529
530	530
531	531	SB1906 - 14 - LRB103 05197 HLH 50213 b
532	532
533	533
534	534	SB1906- 15 -LRB103 05197 HLH 50213 b SB1906 - 15 - LRB103 05197 HLH 50213 b
535	535	SB1906 - 15 - LRB103 05197 HLH 50213 b
536	536	1 the taxpayer under Section 218(a) of this Act,
537	537	2 determined without regard to Section 218(c) of this
538	538	3 Act;
539	539	4 (D-24) For taxable years ending on or after
540	540	5 December 31, 2017, an amount equal to the deduction
541	541	6 allowed under Section 199 of the Internal Revenue Code
542	542	7 for the taxable year;
543	543	8 (D-25) In the case of a resident, an amount equal
544	544	9 to the amount of tax for which a credit is allowed
545	545	10 pursuant to Section 201(p)(7) of this Act;
546	546	11 and by deducting from the total so obtained the sum of the
547	547	12 following amounts:
548	548	13 (E) For taxable years ending before December 31,
549	549	14 2001, any amount included in such total in respect of
550	550	15 any compensation (including but not limited to any
551	551	16 compensation paid or accrued to a serviceman while a
552	552	17 prisoner of war or missing in action) paid to a
553	553	18 resident by reason of being on active duty in the Armed
554	554	19 Forces of the United States and in respect of any
555	555	20 compensation paid or accrued to a resident who as a
556	556	21 governmental employee was a prisoner of war or missing
557	557	22 in action, and in respect of any compensation paid to a
558	558	23 resident in 1971 or thereafter for annual training
559	559	24 performed pursuant to Sections 502 and 503, Title 32,
560	560	25 United States Code as a member of the Illinois
561	561	26 National Guard or, beginning with taxable years ending
562	562
563	563
564	564
565	565
566	566
567	567	SB1906 - 15 - LRB103 05197 HLH 50213 b
568	568
569	569
570	570	SB1906- 16 -LRB103 05197 HLH 50213 b SB1906 - 16 - LRB103 05197 HLH 50213 b
571	571	SB1906 - 16 - LRB103 05197 HLH 50213 b
572	572	1 on or after December 31, 2007, the National Guard of
573	573	2 any other state. For taxable years ending on or after
574	574	3 December 31, 2001, any amount included in such total
575	575	4 in respect of any compensation (including but not
576	576	5 limited to any compensation paid or accrued to a
577	577	6 serviceman while a prisoner of war or missing in
578	578	7 action) paid to a resident by reason of being a member
579	579	8 of any component of the Armed Forces of the United
580	580	9 States and in respect of any compensation paid or
581	581	10 accrued to a resident who as a governmental employee
582	582	11 was a prisoner of war or missing in action, and in
583	583	12 respect of any compensation paid to a resident in 2001
584	584	13 or thereafter by reason of being a member of the
585	585	14 Illinois National Guard or, beginning with taxable
586	586	15 years ending on or after December 31, 2007, the
587	587	16 National Guard of any other state. The provisions of
588	588	17 this subparagraph (E) are exempt from the provisions
589	589	18 of Section 250;
590	590	19 (F) An amount equal to all amounts included in
591	591	20 such total pursuant to the provisions of Sections
592	592	21 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
593	593	22 408 of the Internal Revenue Code, or included in such
594	594	23 total as distributions under the provisions of any
595	595	24 retirement or disability plan for employees of any
596	596	25 governmental agency or unit, or retirement payments to
597	597	26 retired partners, which payments are excluded in
598	598
599	599
600	600
601	601
602	602
603	603	SB1906 - 16 - LRB103 05197 HLH 50213 b
604	604
605	605
606	606	SB1906- 17 -LRB103 05197 HLH 50213 b SB1906 - 17 - LRB103 05197 HLH 50213 b
607	607	SB1906 - 17 - LRB103 05197 HLH 50213 b
608	608	1 computing net earnings from self employment by Section
609	609	2 1402 of the Internal Revenue Code and regulations
610	610	3 adopted pursuant thereto;
611	611	4 (G) The valuation limitation amount;
612	612	5 (H) An amount equal to the amount of any tax
613	613	6 imposed by this Act which was refunded to the taxpayer
614	614	7 and included in such total for the taxable year;
615	615	8 (I) An amount equal to all amounts included in
616	616	9 such total pursuant to the provisions of Section 111
617	617	10 of the Internal Revenue Code as a recovery of items
618	618	11 previously deducted from adjusted gross income in the
619	619	12 computation of taxable income;
620	620	13 (J) An amount equal to those dividends included in
621	621	14 such total which were paid by a corporation which
622	622	15 conducts business operations in a River Edge
623	623	16 Redevelopment Zone or zones created under the River
624	624	17 Edge Redevelopment Zone Act, and conducts
625	625	18 substantially all of its operations in a River Edge
626	626	19 Redevelopment Zone or zones. This subparagraph (J) is
627	627	20 exempt from the provisions of Section 250;
628	628	21 (K) An amount equal to those dividends included in
629	629	22 such total that were paid by a corporation that
630	630	23 conducts business operations in a federally designated
631	631	24 Foreign Trade Zone or Sub-Zone and that is designated
632	632	25 a High Impact Business located in Illinois; provided
633	633	26 that dividends eligible for the deduction provided in
634	634
635	635
636	636
637	637
638	638
639	639	SB1906 - 17 - LRB103 05197 HLH 50213 b
640	640
641	641
642	642	SB1906- 18 -LRB103 05197 HLH 50213 b SB1906 - 18 - LRB103 05197 HLH 50213 b
643	643	SB1906 - 18 - LRB103 05197 HLH 50213 b
644	644	1 subparagraph (J) of paragraph (2) of this subsection
645	645	2 shall not be eligible for the deduction provided under
646	646	3 this subparagraph (K);
647	647	4 (L) For taxable years ending after December 31,
648	648	5 1983, an amount equal to all social security benefits
649	649	6 and railroad retirement benefits included in such
650	650	7 total pursuant to Sections 72(r) and 86 of the
651	651	8 Internal Revenue Code;
652	652	9 (M) With the exception of any amounts subtracted
653	653	10 under subparagraph (N), an amount equal to the sum of
654	654	11 all amounts disallowed as deductions by (i) Sections
655	655	12 171(a)(2) and 265(a)(2) of the Internal Revenue Code,
656	656	13 and all amounts of expenses allocable to interest and
657	657	14 disallowed as deductions by Section 265(a)(1) of the
658	658	15 Internal Revenue Code; and (ii) for taxable years
659	659	16 ending on or after August 13, 1999, Sections
660	660	17 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
661	661	18 Internal Revenue Code, plus, for taxable years ending
662	662	19 on or after December 31, 2011, Section 45G(e)(3) of
663	663	20 the Internal Revenue Code and, for taxable years
664	664	21 ending on or after December 31, 2008, any amount
665	665	22 included in gross income under Section 87 of the
666	666	23 Internal Revenue Code; the provisions of this
667	667	24 subparagraph are exempt from the provisions of Section
668	668	25 250;
669	669	26 (N) An amount equal to all amounts included in
670	670
671	671
672	672
673	673
674	674
675	675	SB1906 - 18 - LRB103 05197 HLH 50213 b
676	676
677	677
678	678	SB1906- 19 -LRB103 05197 HLH 50213 b SB1906 - 19 - LRB103 05197 HLH 50213 b
679	679	SB1906 - 19 - LRB103 05197 HLH 50213 b
680	680	1 such total which are exempt from taxation by this
681	681	2 State either by reason of its statutes or Constitution
682	682	3 or by reason of the Constitution, treaties or statutes
683	683	4 of the United States; provided that, in the case of any
684	684	5 statute of this State that exempts income derived from
685	685	6 bonds or other obligations from the tax imposed under
686	686	7 this Act, the amount exempted shall be the interest
687	687	8 net of bond premium amortization;
688	688	9 (O) An amount equal to any contribution made to a
689	689	10 job training project established pursuant to the Tax
690	690	11 Increment Allocation Redevelopment Act;
691	691	12 (P) An amount equal to the amount of the deduction
692	692	13 used to compute the federal income tax credit for
693	693	14 restoration of substantial amounts held under claim of
694	694	15 right for the taxable year pursuant to Section 1341 of
695	695	16 the Internal Revenue Code or of any itemized deduction
696	696	17 taken from adjusted gross income in the computation of
697	697	18 taxable income for restoration of substantial amounts
698	698	19 held under claim of right for the taxable year;
699	699	20 (Q) An amount equal to any amounts included in
700	700	21 such total, received by the taxpayer as an
701	701	22 acceleration in the payment of life, endowment or
702	702	23 annuity benefits in advance of the time they would
703	703	24 otherwise be payable as an indemnity for a terminal
704	704	25 illness;
705	705	26 (R) An amount equal to the amount of any federal or
706	706
707	707
708	708
709	709
710	710
711	711	SB1906 - 19 - LRB103 05197 HLH 50213 b
712	712
713	713
714	714	SB1906- 20 -LRB103 05197 HLH 50213 b SB1906 - 20 - LRB103 05197 HLH 50213 b
715	715	SB1906 - 20 - LRB103 05197 HLH 50213 b
716	716	1 State bonus paid to veterans of the Persian Gulf War;
717	717	2 (S) An amount, to the extent included in adjusted
718	718	3 gross income, equal to the amount of a contribution
719	719	4 made in the taxable year on behalf of the taxpayer to a
720	720	5 medical care savings account established under the
721	721	6 Medical Care Savings Account Act or the Medical Care
722	722	7 Savings Account Act of 2000 to the extent the
723	723	8 contribution is accepted by the account administrator
724	724	9 as provided in that Act;
725	725	10 (T) An amount, to the extent included in adjusted
726	726	11 gross income, equal to the amount of interest earned
727	727	12 in the taxable year on a medical care savings account
728	728	13 established under the Medical Care Savings Account Act
729	729	14 or the Medical Care Savings Account Act of 2000 on
730	730	15 behalf of the taxpayer, other than interest added
731	731	16 pursuant to item (D-5) of this paragraph (2);
732	732	17 (U) For one taxable year beginning on or after
733	733	18 January 1, 1994, an amount equal to the total amount of
734	734	19 tax imposed and paid under subsections (a) and (b) of
735	735	20 Section 201 of this Act on grant amounts received by
736	736	21 the taxpayer under the Nursing Home Grant Assistance
737	737	22 Act during the taxpayer's taxable years 1992 and 1993;
738	738	23 (V) Beginning with tax years ending on or after
739	739	24 December 31, 1995 and ending with tax years ending on
740	740	25 or before December 31, 2004, an amount equal to the
741	741	26 amount paid by a taxpayer who is a self-employed
742	742
743	743
744	744
745	745
746	746
747	747	SB1906 - 20 - LRB103 05197 HLH 50213 b
748	748
749	749
750	750	SB1906- 21 -LRB103 05197 HLH 50213 b SB1906 - 21 - LRB103 05197 HLH 50213 b
751	751	SB1906 - 21 - LRB103 05197 HLH 50213 b
752	752	1 taxpayer, a partner of a partnership, or a shareholder
753	753	2 in a Subchapter S corporation for health insurance or
754	754	3 long-term care insurance for that taxpayer or that
755	755	4 taxpayer's spouse or dependents, to the extent that
756	756	5 the amount paid for that health insurance or long-term
757	757	6 care insurance may be deducted under Section 213 of
758	758	7 the Internal Revenue Code, has not been deducted on
759	759	8 the federal income tax return of the taxpayer, and
760	760	9 does not exceed the taxable income attributable to
761	761	10 that taxpayer's income, self-employment income, or
762	762	11 Subchapter S corporation income; except that no
763	763	12 deduction shall be allowed under this item (V) if the
764	764	13 taxpayer is eligible to participate in any health
765	765	14 insurance or long-term care insurance plan of an
766	766	15 employer of the taxpayer or the taxpayer's spouse. The
767	767	16 amount of the health insurance and long-term care
768	768	17 insurance subtracted under this item (V) shall be
769	769	18 determined by multiplying total health insurance and
770	770	19 long-term care insurance premiums paid by the taxpayer
771	771	20 times a number that represents the fractional
772	772	21 percentage of eligible medical expenses under Section
773	773	22 213 of the Internal Revenue Code of 1986 not actually
774	774	23 deducted on the taxpayer's federal income tax return;
775	775	24 (W) For taxable years beginning on or after
776	776	25 January 1, 1998, all amounts included in the
777	777	26 taxpayer's federal gross income in the taxable year
778	778
779	779
780	780
781	781
782	782
783	783	SB1906 - 21 - LRB103 05197 HLH 50213 b
784	784
785	785
786	786	SB1906- 22 -LRB103 05197 HLH 50213 b SB1906 - 22 - LRB103 05197 HLH 50213 b
787	787	SB1906 - 22 - LRB103 05197 HLH 50213 b
788	788	1 from amounts converted from a regular IRA to a Roth
789	789	2 IRA. This paragraph is exempt from the provisions of
790	790	3 Section 250;
791	791	4 (X) For taxable year 1999 and thereafter, an
792	792	5 amount equal to the amount of any (i) distributions,
793	793	6 to the extent includible in gross income for federal
794	794	7 income tax purposes, made to the taxpayer because of
795	795	8 his or her status as a victim of persecution for racial
796	796	9 or religious reasons by Nazi Germany or any other Axis
797	797	10 regime or as an heir of the victim and (ii) items of
798	798	11 income, to the extent includible in gross income for
799	799	12 federal income tax purposes, attributable to, derived
800	800	13 from or in any way related to assets stolen from,
801	801	14 hidden from, or otherwise lost to a victim of
802	802	15 persecution for racial or religious reasons by Nazi
803	803	16 Germany or any other Axis regime immediately prior to,
804	804	17 during, and immediately after World War II, including,
805	805	18 but not limited to, interest on the proceeds
806	806	19 receivable as insurance under policies issued to a
807	807	20 victim of persecution for racial or religious reasons
808	808	21 by Nazi Germany or any other Axis regime by European
809	809	22 insurance companies immediately prior to and during
810	810	23 World War II; provided, however, this subtraction from
811	811	24 federal adjusted gross income does not apply to assets
812	812	25 acquired with such assets or with the proceeds from
813	813	26 the sale of such assets; provided, further, this
814	814
815	815
816	816
817	817
818	818
819	819	SB1906 - 22 - LRB103 05197 HLH 50213 b
820	820
821	821
822	822	SB1906- 23 -LRB103 05197 HLH 50213 b SB1906 - 23 - LRB103 05197 HLH 50213 b
823	823	SB1906 - 23 - LRB103 05197 HLH 50213 b
824	824	1 paragraph shall only apply to a taxpayer who was the
825	825	2 first recipient of such assets after their recovery
826	826	3 and who is a victim of persecution for racial or
827	827	4 religious reasons by Nazi Germany or any other Axis
828	828	5 regime or as an heir of the victim. The amount of and
829	829	6 the eligibility for any public assistance, benefit, or
830	830	7 similar entitlement is not affected by the inclusion
831	831	8 of items (i) and (ii) of this paragraph in gross income
832	832	9 for federal income tax purposes. This paragraph is
833	833	10 exempt from the provisions of Section 250;
834	834	11 (Y) For taxable years beginning on or after
835	835	12 January 1, 2002 and ending on or before December 31,
836	836	13 2004, moneys contributed in the taxable year to a
837	837	14 College Savings Pool account under Section 16.5 of the
838	838	15 State Treasurer Act, except that amounts excluded from
839	839	16 gross income under Section 529(c)(3)(C)(i) of the
840	840	17 Internal Revenue Code shall not be considered moneys
841	841	18 contributed under this subparagraph (Y). For taxable
842	842	19 years beginning on or after January 1, 2005, a maximum
843	843	20 of $10,000 contributed in the taxable year to (i) a
844	844	21 College Savings Pool account under Section 16.5 of the
845	845	22 State Treasurer Act or (ii) the Illinois Prepaid
846	846	23 Tuition Trust Fund, except that amounts excluded from
847	847	24 gross income under Section 529(c)(3)(C)(i) of the
848	848	25 Internal Revenue Code shall not be considered moneys
849	849	26 contributed under this subparagraph (Y). For purposes
850	850
851	851
852	852
853	853
854	854
855	855	SB1906 - 23 - LRB103 05197 HLH 50213 b
856	856
857	857
858	858	SB1906- 24 -LRB103 05197 HLH 50213 b SB1906 - 24 - LRB103 05197 HLH 50213 b
859	859	SB1906 - 24 - LRB103 05197 HLH 50213 b
860	860	1 of this subparagraph, contributions made by an
861	861	2 employer on behalf of an employee, or matching
862	862	3 contributions made by an employee, shall be treated as
863	863	4 made by the employee. This subparagraph (Y) is exempt
864	864	5 from the provisions of Section 250;
865	865	6 (Z) For taxable years 2001 and thereafter, for the
866	866	7 taxable year in which the bonus depreciation deduction
867	867	8 is taken on the taxpayer's federal income tax return
868	868	9 under subsection (k) of Section 168 of the Internal
869	869	10 Revenue Code and for each applicable taxable year
870	870	11 thereafter, an amount equal to "x", where:
871	871	12 (1) "y" equals the amount of the depreciation
872	872	13 deduction taken for the taxable year on the
873	873	14 taxpayer's federal income tax return on property
874	874	15 for which the bonus depreciation deduction was
875	875	16 taken in any year under subsection (k) of Section
876	876	17 168 of the Internal Revenue Code, but not
877	877	18 including the bonus depreciation deduction;
878	878	19 (2) for taxable years ending on or before
879	879	20 December 31, 2005, "x" equals "y" multiplied by 30
880	880	21 and then divided by 70 (or "y" multiplied by
881	881	22 0.429); and
882	882	23 (3) for taxable years ending after December
883	883	24 31, 2005:
884	884	25 (i) for property on which a bonus
885	885	26 depreciation deduction of 30% of the adjusted
886	886
887	887
888	888
889	889
890	890
891	891	SB1906 - 24 - LRB103 05197 HLH 50213 b
892	892
893	893
894	894	SB1906- 25 -LRB103 05197 HLH 50213 b SB1906 - 25 - LRB103 05197 HLH 50213 b
895	895	SB1906 - 25 - LRB103 05197 HLH 50213 b
896	896	1 basis was taken, "x" equals "y" multiplied by
897	897	2 30 and then divided by 70 (or "y" multiplied
898	898	3 by 0.429);
899	899	4 (ii) for property on which a bonus
900	900	5 depreciation deduction of 50% of the adjusted
901	901	6 basis was taken, "x" equals "y" multiplied by
902	902	7 1.0;
903	903	8 (iii) for property on which a bonus
904	904	9 depreciation deduction of 100% of the adjusted
905	905	10 basis was taken in a taxable year ending on or
906	906	11 after December 31, 2021, "x" equals the
907	907	12 depreciation deduction that would be allowed
908	908	13 on that property if the taxpayer had made the
909	909	14 election under Section 168(k)(7) of the
910	910	15 Internal Revenue Code to not claim bonus
911	911	16 depreciation on that property; and
912	912	17 (iv) for property on which a bonus
913	913	18 depreciation deduction of a percentage other
914	914	19 than 30%, 50% or 100% of the adjusted basis
915	915	20 was taken in a taxable year ending on or after
916	916	21 December 31, 2021, "x" equals "y" multiplied
917	917	22 by 100 times the percentage bonus depreciation
918	918	23 on the property (that is, 100(bonus%)) and
919	919	24 then divided by 100 times 1 minus the
920	920	25 percentage bonus depreciation on the property
921	921	26 (that is, 100(1bonus%)).
922	922
923	923
924	924
925	925
926	926
927	927	SB1906 - 25 - LRB103 05197 HLH 50213 b
928	928
929	929
930	930	SB1906- 26 -LRB103 05197 HLH 50213 b SB1906 - 26 - LRB103 05197 HLH 50213 b
931	931	SB1906 - 26 - LRB103 05197 HLH 50213 b
932	932	1 The aggregate amount deducted under this
933	933	2 subparagraph in all taxable years for any one piece of
934	934	3 property may not exceed the amount of the bonus
935	935	4 depreciation deduction taken on that property on the
936	936	5 taxpayer's federal income tax return under subsection
937	937	6 (k) of Section 168 of the Internal Revenue Code. This
938	938	7 subparagraph (Z) is exempt from the provisions of
939	939	8 Section 250;
940	940	9 (AA) If the taxpayer sells, transfers, abandons,
941	941	10 or otherwise disposes of property for which the
942	942	11 taxpayer was required in any taxable year to make an
943	943	12 addition modification under subparagraph (D-15), then
944	944	13 an amount equal to that addition modification.
945	945	14 If the taxpayer continues to own property through
946	946	15 the last day of the last tax year for which a
947	947	16 subtraction is allowed with respect to that property
948	948	17 under subparagraph (Z) and for which the taxpayer was
949	949	18 required in any taxable year to make an addition
950	950	19 modification under subparagraph (D-15), then an amount
951	951	20 equal to that addition modification.
952	952	21 The taxpayer is allowed to take the deduction
953	953	22 under this subparagraph only once with respect to any
954	954	23 one piece of property.
955	955	24 This subparagraph (AA) is exempt from the
956	956	25 provisions of Section 250;
957	957	26 (BB) Any amount included in adjusted gross income,
958	958
959	959
960	960
961	961
962	962
963	963	SB1906 - 26 - LRB103 05197 HLH 50213 b
964	964
965	965
966	966	SB1906- 27 -LRB103 05197 HLH 50213 b SB1906 - 27 - LRB103 05197 HLH 50213 b
967	967	SB1906 - 27 - LRB103 05197 HLH 50213 b
968	968	1 other than salary, received by a driver in a
969	969	2 ridesharing arrangement using a motor vehicle;
970	970	3 (CC) The amount of (i) any interest income (net of
971	971	4 the deductions allocable thereto) taken into account
972	972	5 for the taxable year with respect to a transaction
973	973	6 with a taxpayer that is required to make an addition
974	974	7 modification with respect to such transaction under
975	975	8 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
976	976	9 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
977	977	10 the amount of that addition modification, and (ii) any
978	978	11 income from intangible property (net of the deductions
979	979	12 allocable thereto) taken into account for the taxable
980	980	13 year with respect to a transaction with a taxpayer
981	981	14 that is required to make an addition modification with
982	982	15 respect to such transaction under Section
983	983	16 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
984	984	17 203(d)(2)(D-8), but not to exceed the amount of that
985	985	18 addition modification. This subparagraph (CC) is
986	986	19 exempt from the provisions of Section 250;
987	987	20 (DD) An amount equal to the interest income taken
988	988	21 into account for the taxable year (net of the
989	989	22 deductions allocable thereto) with respect to
990	990	23 transactions with (i) a foreign person who would be a
991	991	24 member of the taxpayer's unitary business group but
992	992	25 for the fact that the foreign person's business
993	993	26 activity outside the United States is 80% or more of
994	994
995	995
996	996
997	997
998	998
999	999	SB1906 - 27 - LRB103 05197 HLH 50213 b
1000	1000
1001	1001
1002	1002	SB1906- 28 -LRB103 05197 HLH 50213 b SB1906 - 28 - LRB103 05197 HLH 50213 b
1003	1003	SB1906 - 28 - LRB103 05197 HLH 50213 b
1004	1004	1 that person's total business activity and (ii) for
1005	1005	2 taxable years ending on or after December 31, 2008, to
1006	1006	3 a person who would be a member of the same unitary
1007	1007	4 business group but for the fact that the person is
1008	1008	5 prohibited under Section 1501(a)(27) from being
1009	1009	6 included in the unitary business group because he or
1010	1010	7 she is ordinarily required to apportion business
1011	1011	8 income under different subsections of Section 304, but
1012	1012	9 not to exceed the addition modification required to be
1013	1013	10 made for the same taxable year under Section
1014	1014	11 203(a)(2)(D-17) for interest paid, accrued, or
1015	1015	12 incurred, directly or indirectly, to the same person.
1016	1016	13 This subparagraph (DD) is exempt from the provisions
1017	1017	14 of Section 250;
1018	1018	15 (EE) An amount equal to the income from intangible
1019	1019	16 property taken into account for the taxable year (net
1020	1020	17 of the deductions allocable thereto) with respect to
1021	1021	18 transactions with (i) a foreign person who would be a
1022	1022	19 member of the taxpayer's unitary business group but
1023	1023	20 for the fact that the foreign person's business
1024	1024	21 activity outside the United States is 80% or more of
1025	1025	22 that person's total business activity and (ii) for
1026	1026	23 taxable years ending on or after December 31, 2008, to
1027	1027	24 a person who would be a member of the same unitary
1028	1028	25 business group but for the fact that the person is
1029	1029	26 prohibited under Section 1501(a)(27) from being
1030	1030
1031	1031
1032	1032
1033	1033
1034	1034
1035	1035	SB1906 - 28 - LRB103 05197 HLH 50213 b
1036	1036
1037	1037
1038	1038	SB1906- 29 -LRB103 05197 HLH 50213 b SB1906 - 29 - LRB103 05197 HLH 50213 b
1039	1039	SB1906 - 29 - LRB103 05197 HLH 50213 b
1040	1040	1 included in the unitary business group because he or
1041	1041	2 she is ordinarily required to apportion business
1042	1042	3 income under different subsections of Section 304, but
1043	1043	4 not to exceed the addition modification required to be
1044	1044	5 made for the same taxable year under Section
1045	1045	6 203(a)(2)(D-18) for intangible expenses and costs
1046	1046	7 paid, accrued, or incurred, directly or indirectly, to
1047	1047	8 the same foreign person. This subparagraph (EE) is
1048	1048	9 exempt from the provisions of Section 250;
1049	1049	10 (FF) An amount equal to any amount awarded to the
1050	1050	11 taxpayer during the taxable year by the Court of
1051	1051	12 Claims under subsection (c) of Section 8 of the Court
1052	1052	13 of Claims Act for time unjustly served in a State
1053	1053	14 prison. This subparagraph (FF) is exempt from the
1054	1054	15 provisions of Section 250;
1055	1055	16 (GG) For taxable years ending on or after December
1056	1056	17 31, 2011, in the case of a taxpayer who was required to
1057	1057	18 add back any insurance premiums under Section
1058	1058	19 203(a)(2)(D-19), such taxpayer may elect to subtract
1059	1059	20 that part of a reimbursement received from the
1060	1060	21 insurance company equal to the amount of the expense
1061	1061	22 or loss (including expenses incurred by the insurance
1062	1062	23 company) that would have been taken into account as a
1063	1063	24 deduction for federal income tax purposes if the
1064	1064	25 expense or loss had been uninsured. If a taxpayer
1065	1065	26 makes the election provided for by this subparagraph
1066	1066
1067	1067
1068	1068
1069	1069
1070	1070
1071	1071	SB1906 - 29 - LRB103 05197 HLH 50213 b
1072	1072
1073	1073
1074	1074	SB1906- 30 -LRB103 05197 HLH 50213 b SB1906 - 30 - LRB103 05197 HLH 50213 b
1075	1075	SB1906 - 30 - LRB103 05197 HLH 50213 b
1076	1076	1 (GG), the insurer to which the premiums were paid must
1077	1077	2 add back to income the amount subtracted by the
1078	1078	3 taxpayer pursuant to this subparagraph (GG). This
1079	1079	4 subparagraph (GG) is exempt from the provisions of
1080	1080	5 Section 250; and
1081	1081	6 (HH) For taxable years beginning on or after
1082	1082	7 January 1, 2018 and prior to January 1, 2023, a maximum
1083	1083	8 of $10,000 contributed in the taxable year to a
1084	1084	9 qualified ABLE account under Section 16.6 of the State
1085	1085	10 Treasurer Act, except that amounts excluded from gross
1086	1086	11 income under Section 529(c)(3)(C)(i) or Section
1087	1087	12 529A(c)(1)(C) of the Internal Revenue Code shall not
1088	1088	13 be considered moneys contributed under this
1089	1089	14 subparagraph (HH). For purposes of this subparagraph
1090	1090	15 (HH), contributions made by an employer on behalf of
1091	1091	16 an employee, or matching contributions made by an
1092	1092	17 employee, shall be treated as made by the employee.
1093	1093	18 (b) Corporations.
1094	1094	19 (1) In general. In the case of a corporation, base
1095	1095	20 income means an amount equal to the taxpayer's taxable
1096	1096	21 income for the taxable year as modified by paragraph (2).
1097	1097	22 (2) Modifications. The taxable income referred to in
1098	1098	23 paragraph (1) shall be modified by adding thereto the sum
1099	1099	24 of the following amounts:
1100	1100	25 (A) An amount equal to all amounts paid or accrued
1101	1101
1102	1102
1103	1103
1104	1104
1105	1105
1106	1106	SB1906 - 30 - LRB103 05197 HLH 50213 b
1107	1107
1108	1108
1109	1109	SB1906- 31 -LRB103 05197 HLH 50213 b SB1906 - 31 - LRB103 05197 HLH 50213 b
1110	1110	SB1906 - 31 - LRB103 05197 HLH 50213 b
1111	1111	1 to the taxpayer as interest and all distributions
1112	1112	2 received from regulated investment companies during
1113	1113	3 the taxable year to the extent excluded from gross
1114	1114	4 income in the computation of taxable income;
1115	1115	5 (B) An amount equal to the amount of tax imposed by
1116	1116	6 this Act to the extent deducted from gross income in
1117	1117	7 the computation of taxable income for the taxable
1118	1118	8 year;
1119	1119	9 (C) In the case of a regulated investment company,
1120	1120	10 an amount equal to the excess of (i) the net long-term
1121	1121	11 capital gain for the taxable year, over (ii) the
1122	1122	12 amount of the capital gain dividends designated as
1123	1123	13 such in accordance with Section 852(b)(3)(C) of the
1124	1124	14 Internal Revenue Code and any amount designated under
1125	1125	15 Section 852(b)(3)(D) of the Internal Revenue Code,
1126	1126	16 attributable to the taxable year (this amendatory Act
1127	1127	17 of 1995 (Public Act 89-89) is declarative of existing
1128	1128	18 law and is not a new enactment);
1129	1129	19 (D) The amount of any net operating loss deduction
1130	1130	20 taken in arriving at taxable income, other than a net
1131	1131	21 operating loss carried forward from a taxable year
1132	1132	22 ending prior to December 31, 1986;
1133	1133	23 (E) For taxable years in which a net operating
1134	1134	24 loss carryback or carryforward from a taxable year
1135	1135	25 ending prior to December 31, 1986 is an element of
1136	1136	26 taxable income under paragraph (1) of subsection (e)
1137	1137
1138	1138
1139	1139
1140	1140
1141	1141
1142	1142	SB1906 - 31 - LRB103 05197 HLH 50213 b
1143	1143
1144	1144
1145	1145	SB1906- 32 -LRB103 05197 HLH 50213 b SB1906 - 32 - LRB103 05197 HLH 50213 b
1146	1146	SB1906 - 32 - LRB103 05197 HLH 50213 b
1147	1147	1 or subparagraph (E) of paragraph (2) of subsection
1148	1148	2 (e), the amount by which addition modifications other
1149	1149	3 than those provided by this subparagraph (E) exceeded
1150	1150	4 subtraction modifications in such earlier taxable
1151	1151	5 year, with the following limitations applied in the
1152	1152	6 order that they are listed:
1153	1153	7 (i) the addition modification relating to the
1154	1154	8 net operating loss carried back or forward to the
1155	1155	9 taxable year from any taxable year ending prior to
1156	1156	10 December 31, 1986 shall be reduced by the amount
1157	1157	11 of addition modification under this subparagraph
1158	1158	12 (E) which related to that net operating loss and
1159	1159	13 which was taken into account in calculating the
1160	1160	14 base income of an earlier taxable year, and
1161	1161	15 (ii) the addition modification relating to the
1162	1162	16 net operating loss carried back or forward to the
1163	1163	17 taxable year from any taxable year ending prior to
1164	1164	18 December 31, 1986 shall not exceed the amount of
1165	1165	19 such carryback or carryforward;
1166	1166	20 For taxable years in which there is a net
1167	1167	21 operating loss carryback or carryforward from more
1168	1168	22 than one other taxable year ending prior to December
1169	1169	23 31, 1986, the addition modification provided in this
1170	1170	24 subparagraph (E) shall be the sum of the amounts
1171	1171	25 computed independently under the preceding provisions
1172	1172	26 of this subparagraph (E) for each such taxable year;
1173	1173
1174	1174
1175	1175
1176	1176
1177	1177
1178	1178	SB1906 - 32 - LRB103 05197 HLH 50213 b
1179	1179
1180	1180
1181	1181	SB1906- 33 -LRB103 05197 HLH 50213 b SB1906 - 33 - LRB103 05197 HLH 50213 b
1182	1182	SB1906 - 33 - LRB103 05197 HLH 50213 b
1183	1183	1 (E-5) For taxable years ending after December 31,
1184	1184	2 1997, an amount equal to any eligible remediation
1185	1185	3 costs that the corporation deducted in computing
1186	1186	4 adjusted gross income and for which the corporation
1187	1187	5 claims a credit under subsection (l) of Section 201;
1188	1188	6 (E-10) For taxable years 2001 and thereafter, an
1189	1189	7 amount equal to the bonus depreciation deduction taken
1190	1190	8 on the taxpayer's federal income tax return for the
1191	1191	9 taxable year under subsection (k) of Section 168 of
1192	1192	10 the Internal Revenue Code;
1193	1193	11 (E-11) If the taxpayer sells, transfers, abandons,
1194	1194	12 or otherwise disposes of property for which the
1195	1195	13 taxpayer was required in any taxable year to make an
1196	1196	14 addition modification under subparagraph (E-10), then
1197	1197	15 an amount equal to the aggregate amount of the
1198	1198	16 deductions taken in all taxable years under
1199	1199	17 subparagraph (T) with respect to that property.
1200	1200	18 If the taxpayer continues to own property through
1201	1201	19 the last day of the last tax year for which a
1202	1202	20 subtraction is allowed with respect to that property
1203	1203	21 under subparagraph (T) and for which the taxpayer was
1204	1204	22 allowed in any taxable year to make a subtraction
1205	1205	23 modification under subparagraph (T), then an amount
1206	1206	24 equal to that subtraction modification.
1207	1207	25 The taxpayer is required to make the addition
1208	1208	26 modification under this subparagraph only once with
1209	1209
1210	1210
1211	1211
1212	1212
1213	1213
1214	1214	SB1906 - 33 - LRB103 05197 HLH 50213 b
1215	1215
1216	1216
1217	1217	SB1906- 34 -LRB103 05197 HLH 50213 b SB1906 - 34 - LRB103 05197 HLH 50213 b
1218	1218	SB1906 - 34 - LRB103 05197 HLH 50213 b
1219	1219	1 respect to any one piece of property;
1220	1220	2 (E-12) An amount equal to the amount otherwise
1221	1221	3 allowed as a deduction in computing base income for
1222	1222	4 interest paid, accrued, or incurred, directly or
1223	1223	5 indirectly, (i) for taxable years ending on or after
1224	1224	6 December 31, 2004, to a foreign person who would be a
1225	1225	7 member of the same unitary business group but for the
1226	1226	8 fact the foreign person's business activity outside
1227	1227	9 the United States is 80% or more of the foreign
1228	1228	10 person's total business activity and (ii) for taxable
1229	1229	11 years ending on or after December 31, 2008, to a person
1230	1230	12 who would be a member of the same unitary business
1231	1231	13 group but for the fact that the person is prohibited
1232	1232	14 under Section 1501(a)(27) from being included in the
1233	1233	15 unitary business group because he or she is ordinarily
1234	1234	16 required to apportion business income under different
1235	1235	17 subsections of Section 304. The addition modification
1236	1236	18 required by this subparagraph shall be reduced to the
1237	1237	19 extent that dividends were included in base income of
1238	1238	20 the unitary group for the same taxable year and
1239	1239	21 received by the taxpayer or by a member of the
1240	1240	22 taxpayer's unitary business group (including amounts
1241	1241	23 included in gross income pursuant to Sections 951
1242	1242	24 through 964 of the Internal Revenue Code and amounts
1243	1243	25 included in gross income under Section 78 of the
1244	1244	26 Internal Revenue Code) with respect to the stock of
1245	1245
1246	1246
1247	1247
1248	1248
1249	1249
1250	1250	SB1906 - 34 - LRB103 05197 HLH 50213 b
1251	1251
1252	1252
1253	1253	SB1906- 35 -LRB103 05197 HLH 50213 b SB1906 - 35 - LRB103 05197 HLH 50213 b
1254	1254	SB1906 - 35 - LRB103 05197 HLH 50213 b
1255	1255	1 the same person to whom the interest was paid,
1256	1256	2 accrued, or incurred.
1257	1257	3 This paragraph shall not apply to the following:
1258	1258	4 (i) an item of interest paid, accrued, or
1259	1259	5 incurred, directly or indirectly, to a person who
1260	1260	6 is subject in a foreign country or state, other
1261	1261	7 than a state which requires mandatory unitary
1262	1262	8 reporting, to a tax on or measured by net income
1263	1263	9 with respect to such interest; or
1264	1264	10 (ii) an item of interest paid, accrued, or
1265	1265	11 incurred, directly or indirectly, to a person if
1266	1266	12 the taxpayer can establish, based on a
1267	1267	13 preponderance of the evidence, both of the
1268	1268	14 following:
1269	1269	15 (a) the person, during the same taxable
1270	1270	16 year, paid, accrued, or incurred, the interest
1271	1271	17 to a person that is not a related member, and
1272	1272	18 (b) the transaction giving rise to the
1273	1273	19 interest expense between the taxpayer and the
1274	1274	20 person did not have as a principal purpose the
1275	1275	21 avoidance of Illinois income tax, and is paid
1276	1276	22 pursuant to a contract or agreement that
1277	1277	23 reflects an arm's-length interest rate and
1278	1278	24 terms; or
1279	1279	25 (iii) the taxpayer can establish, based on
1280	1280	26 clear and convincing evidence, that the interest
1281	1281
1282	1282
1283	1283
1284	1284
1285	1285
1286	1286	SB1906 - 35 - LRB103 05197 HLH 50213 b
1287	1287
1288	1288
1289	1289	SB1906- 36 -LRB103 05197 HLH 50213 b SB1906 - 36 - LRB103 05197 HLH 50213 b
1290	1290	SB1906 - 36 - LRB103 05197 HLH 50213 b
1291	1291	1 paid, accrued, or incurred relates to a contract
1292	1292	2 or agreement entered into at arm's-length rates
1293	1293	3 and terms and the principal purpose for the
1294	1294	4 payment is not federal or Illinois tax avoidance;
1295	1295	5 or
1296	1296	6 (iv) an item of interest paid, accrued, or
1297	1297	7 incurred, directly or indirectly, to a person if
1298	1298	8 the taxpayer establishes by clear and convincing
1299	1299	9 evidence that the adjustments are unreasonable; or
1300	1300	10 if the taxpayer and the Director agree in writing
1301	1301	11 to the application or use of an alternative method
1302	1302	12 of apportionment under Section 304(f).
1303	1303	13 Nothing in this subsection shall preclude the
1304	1304	14 Director from making any other adjustment
1305	1305	15 otherwise allowed under Section 404 of this Act
1306	1306	16 for any tax year beginning after the effective
1307	1307	17 date of this amendment provided such adjustment is
1308	1308	18 made pursuant to regulation adopted by the
1309	1309	19 Department and such regulations provide methods
1310	1310	20 and standards by which the Department will utilize
1311	1311	21 its authority under Section 404 of this Act;
1312	1312	22 (E-13) An amount equal to the amount of intangible
1313	1313	23 expenses and costs otherwise allowed as a deduction in
1314	1314	24 computing base income, and that were paid, accrued, or
1315	1315	25 incurred, directly or indirectly, (i) for taxable
1316	1316	26 years ending on or after December 31, 2004, to a
1317	1317
1318	1318
1319	1319
1320	1320
1321	1321
1322	1322	SB1906 - 36 - LRB103 05197 HLH 50213 b
1323	1323
1324	1324
1325	1325	SB1906- 37 -LRB103 05197 HLH 50213 b SB1906 - 37 - LRB103 05197 HLH 50213 b
1326	1326	SB1906 - 37 - LRB103 05197 HLH 50213 b
1327	1327	1 foreign person who would be a member of the same
1328	1328	2 unitary business group but for the fact that the
1329	1329	3 foreign person's business activity outside the United
1330	1330	4 States is 80% or more of that person's total business
1331	1331	5 activity and (ii) for taxable years ending on or after
1332	1332	6 December 31, 2008, to a person who would be a member of
1333	1333	7 the same unitary business group but for the fact that
1334	1334	8 the person is prohibited under Section 1501(a)(27)
1335	1335	9 from being included in the unitary business group
1336	1336	10 because he or she is ordinarily required to apportion
1337	1337	11 business income under different subsections of Section
1338	1338	12 304. The addition modification required by this
1339	1339	13 subparagraph shall be reduced to the extent that
1340	1340	14 dividends were included in base income of the unitary
1341	1341	15 group for the same taxable year and received by the
1342	1342	16 taxpayer or by a member of the taxpayer's unitary
1343	1343	17 business group (including amounts included in gross
1344	1344	18 income pursuant to Sections 951 through 964 of the
1345	1345	19 Internal Revenue Code and amounts included in gross
1346	1346	20 income under Section 78 of the Internal Revenue Code)
1347	1347	21 with respect to the stock of the same person to whom
1348	1348	22 the intangible expenses and costs were directly or
1349	1349	23 indirectly paid, incurred, or accrued. The preceding
1350	1350	24 sentence shall not apply to the extent that the same
1351	1351	25 dividends caused a reduction to the addition
1352	1352	26 modification required under Section 203(b)(2)(E-12) of
1353	1353
1354	1354
1355	1355
1356	1356
1357	1357
1358	1358	SB1906 - 37 - LRB103 05197 HLH 50213 b
1359	1359
1360	1360
1361	1361	SB1906- 38 -LRB103 05197 HLH 50213 b SB1906 - 38 - LRB103 05197 HLH 50213 b
1362	1362	SB1906 - 38 - LRB103 05197 HLH 50213 b
1363	1363	1 this Act. As used in this subparagraph, the term
1364	1364	2 "intangible expenses and costs" includes (1) expenses,
1365	1365	3 losses, and costs for, or related to, the direct or
1366	1366	4 indirect acquisition, use, maintenance or management,
1367	1367	5 ownership, sale, exchange, or any other disposition of
1368	1368	6 intangible property; (2) losses incurred, directly or
1369	1369	7 indirectly, from factoring transactions or discounting
1370	1370	8 transactions; (3) royalty, patent, technical, and
1371	1371	9 copyright fees; (4) licensing fees; and (5) other
1372	1372	10 similar expenses and costs. For purposes of this
1373	1373	11 subparagraph, "intangible property" includes patents,
1374	1374	12 patent applications, trade names, trademarks, service
1375	1375	13 marks, copyrights, mask works, trade secrets, and
1376	1376	14 similar types of intangible assets.
1377	1377	15 This paragraph shall not apply to the following:
1378	1378	16 (i) any item of intangible expenses or costs
1379	1379	17 paid, accrued, or incurred, directly or
1380	1380	18 indirectly, from a transaction with a person who
1381	1381	19 is subject in a foreign country or state, other
1382	1382	20 than a state which requires mandatory unitary
1383	1383	21 reporting, to a tax on or measured by net income
1384	1384	22 with respect to such item; or
1385	1385	23 (ii) any item of intangible expense or cost
1386	1386	24 paid, accrued, or incurred, directly or
1387	1387	25 indirectly, if the taxpayer can establish, based
1388	1388	26 on a preponderance of the evidence, both of the
1389	1389
1390	1390
1391	1391
1392	1392
1393	1393
1394	1394	SB1906 - 38 - LRB103 05197 HLH 50213 b
1395	1395
1396	1396
1397	1397	SB1906- 39 -LRB103 05197 HLH 50213 b SB1906 - 39 - LRB103 05197 HLH 50213 b
1398	1398	SB1906 - 39 - LRB103 05197 HLH 50213 b
1399	1399	1 following:
1400	1400	2 (a) the person during the same taxable
1401	1401	3 year paid, accrued, or incurred, the
1402	1402	4 intangible expense or cost to a person that is
1403	1403	5 not a related member, and
1404	1404	6 (b) the transaction giving rise to the
1405	1405	7 intangible expense or cost between the
1406	1406	8 taxpayer and the person did not have as a
1407	1407	9 principal purpose the avoidance of Illinois
1408	1408	10 income tax, and is paid pursuant to a contract
1409	1409	11 or agreement that reflects arm's-length terms;
1410	1410	12 or
1411	1411	13 (iii) any item of intangible expense or cost
1412	1412	14 paid, accrued, or incurred, directly or
1413	1413	15 indirectly, from a transaction with a person if
1414	1414	16 the taxpayer establishes by clear and convincing
1415	1415	17 evidence, that the adjustments are unreasonable;
1416	1416	18 or if the taxpayer and the Director agree in
1417	1417	19 writing to the application or use of an
1418	1418	20 alternative method of apportionment under Section
1419	1419	21 304(f);
1420	1420	22 Nothing in this subsection shall preclude the
1421	1421	23 Director from making any other adjustment
1422	1422	24 otherwise allowed under Section 404 of this Act
1423	1423	25 for any tax year beginning after the effective
1424	1424	26 date of this amendment provided such adjustment is
1425	1425
1426	1426
1427	1427
1428	1428
1429	1429
1430	1430	SB1906 - 39 - LRB103 05197 HLH 50213 b
1431	1431
1432	1432
1433	1433	SB1906- 40 -LRB103 05197 HLH 50213 b SB1906 - 40 - LRB103 05197 HLH 50213 b
1434	1434	SB1906 - 40 - LRB103 05197 HLH 50213 b
1435	1435	1 made pursuant to regulation adopted by the
1436	1436	2 Department and such regulations provide methods
1437	1437	3 and standards by which the Department will utilize
1438	1438	4 its authority under Section 404 of this Act;
1439	1439	5 (E-14) For taxable years ending on or after
1440	1440	6 December 31, 2008, an amount equal to the amount of
1441	1441	7 insurance premium expenses and costs otherwise allowed
1442	1442	8 as a deduction in computing base income, and that were
1443	1443	9 paid, accrued, or incurred, directly or indirectly, to
1444	1444	10 a person who would be a member of the same unitary
1445	1445	11 business group but for the fact that the person is
1446	1446	12 prohibited under Section 1501(a)(27) from being
1447	1447	13 included in the unitary business group because he or
1448	1448	14 she is ordinarily required to apportion business
1449	1449	15 income under different subsections of Section 304. The
1450	1450	16 addition modification required by this subparagraph
1451	1451	17 shall be reduced to the extent that dividends were
1452	1452	18 included in base income of the unitary group for the
1453	1453	19 same taxable year and received by the taxpayer or by a
1454	1454	20 member of the taxpayer's unitary business group
1455	1455	21 (including amounts included in gross income under
1456	1456	22 Sections 951 through 964 of the Internal Revenue Code
1457	1457	23 and amounts included in gross income under Section 78
1458	1458	24 of the Internal Revenue Code) with respect to the
1459	1459	25 stock of the same person to whom the premiums and costs
1460	1460	26 were directly or indirectly paid, incurred, or
1461	1461
1462	1462
1463	1463
1464	1464
1465	1465
1466	1466	SB1906 - 40 - LRB103 05197 HLH 50213 b
1467	1467
1468	1468
1469	1469	SB1906- 41 -LRB103 05197 HLH 50213 b SB1906 - 41 - LRB103 05197 HLH 50213 b
1470	1470	SB1906 - 41 - LRB103 05197 HLH 50213 b
1471	1471	1 accrued. The preceding sentence does not apply to the
1472	1472	2 extent that the same dividends caused a reduction to
1473	1473	3 the addition modification required under Section
1474	1474	4 203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this
1475	1475	5 Act;
1476	1476	6 (E-15) For taxable years beginning after December
1477	1477	7 31, 2008, any deduction for dividends paid by a
1478	1478	8 captive real estate investment trust that is allowed
1479	1479	9 to a real estate investment trust under Section
1480	1480	10 857(b)(2)(B) of the Internal Revenue Code for
1481	1481	11 dividends paid;
1482	1482	12 (E-16) An amount equal to the credit allowable to
1483	1483	13 the taxpayer under Section 218(a) of this Act,
1484	1484	14 determined without regard to Section 218(c) of this
1485	1485	15 Act;
1486	1486	16 (E-17) For taxable years ending on or after
1487	1487	17 December 31, 2017, an amount equal to the deduction
1488	1488	18 allowed under Section 199 of the Internal Revenue Code
1489	1489	19 for the taxable year;
1490	1490	20 (E-18) for taxable years beginning after December
1491	1491	21 31, 2018, an amount equal to the deduction allowed
1492	1492	22 under Section 250(a)(1)(A) of the Internal Revenue
1493	1493	23 Code for the taxable year;
1494	1494	24 (E-19) for taxable years ending on or after June
1495	1495	25 30, 2021, an amount equal to the deduction allowed
1496	1496	26 under Section 250(a)(1)(B)(i) of the Internal Revenue
1497	1497
1498	1498
1499	1499
1500	1500
1501	1501
1502	1502	SB1906 - 41 - LRB103 05197 HLH 50213 b
1503	1503
1504	1504
1505	1505	SB1906- 42 -LRB103 05197 HLH 50213 b SB1906 - 42 - LRB103 05197 HLH 50213 b
1506	1506	SB1906 - 42 - LRB103 05197 HLH 50213 b
1507	1507	1 Code for the taxable year;
1508	1508	2 (E-20) for taxable years ending on or after June
1509	1509	3 30, 2021, an amount equal to the deduction allowed
1510	1510	4 under Sections 243(e) and 245A(a) of the Internal
1511	1511	5 Revenue Code for the taxable year.
1512	1512	6 and by deducting from the total so obtained the sum of the
1513	1513	7 following amounts:
1514	1514	8 (F) An amount equal to the amount of any tax
1515	1515	9 imposed by this Act which was refunded to the taxpayer
1516	1516	10 and included in such total for the taxable year;
1517	1517	11 (G) An amount equal to any amount included in such
1518	1518	12 total under Section 78 of the Internal Revenue Code;
1519	1519	13 (H) In the case of a regulated investment company,
1520	1520	14 an amount equal to the amount of exempt interest
1521	1521	15 dividends as defined in subsection (b)(5) of Section
1522	1522	16 852 of the Internal Revenue Code, paid to shareholders
1523	1523	17 for the taxable year;
1524	1524	18 (I) With the exception of any amounts subtracted
1525	1525	19 under subparagraph (J), an amount equal to the sum of
1526	1526	20 all amounts disallowed as deductions by (i) Sections
1527	1527	21 171(a)(2) and 265(a)(2) and amounts disallowed as
1528	1528	22 interest expense by Section 291(a)(3) of the Internal
1529	1529	23 Revenue Code, and all amounts of expenses allocable to
1530	1530	24 interest and disallowed as deductions by Section
1531	1531	25 265(a)(1) of the Internal Revenue Code; and (ii) for
1532	1532	26 taxable years ending on or after August 13, 1999,
1533	1533
1534	1534
1535	1535
1536	1536
1537	1537
1538	1538	SB1906 - 42 - LRB103 05197 HLH 50213 b
1539	1539
1540	1540
1541	1541	SB1906- 43 -LRB103 05197 HLH 50213 b SB1906 - 43 - LRB103 05197 HLH 50213 b
1542	1542	SB1906 - 43 - LRB103 05197 HLH 50213 b
1543	1543	1 Sections 171(a)(2), 265, 280C, 291(a)(3), and
1544	1544	2 832(b)(5)(B)(i) of the Internal Revenue Code, plus,
1545	1545	3 for tax years ending on or after December 31, 2011,
1546	1546	4 amounts disallowed as deductions by Section 45G(e)(3)
1547	1547	5 of the Internal Revenue Code and, for taxable years
1548	1548	6 ending on or after December 31, 2008, any amount
1549	1549	7 included in gross income under Section 87 of the
1550	1550	8 Internal Revenue Code and the policyholders' share of
1551	1551	9 tax-exempt interest of a life insurance company under
1552	1552	10 Section 807(a)(2)(B) of the Internal Revenue Code (in
1553	1553	11 the case of a life insurance company with gross income
1554	1554	12 from a decrease in reserves for the tax year) or
1555	1555	13 Section 807(b)(1)(B) of the Internal Revenue Code (in
1556	1556	14 the case of a life insurance company allowed a
1557	1557	15 deduction for an increase in reserves for the tax
1558	1558	16 year); the provisions of this subparagraph are exempt
1559	1559	17 from the provisions of Section 250;
1560	1560	18 (J) An amount equal to all amounts included in
1561	1561	19 such total which are exempt from taxation by this
1562	1562	20 State either by reason of its statutes or Constitution
1563	1563	21 or by reason of the Constitution, treaties or statutes
1564	1564	22 of the United States; provided that, in the case of any
1565	1565	23 statute of this State that exempts income derived from
1566	1566	24 bonds or other obligations from the tax imposed under
1567	1567	25 this Act, the amount exempted shall be the interest
1568	1568	26 net of bond premium amortization;
1569	1569
1570	1570
1571	1571
1572	1572
1573	1573
1574	1574	SB1906 - 43 - LRB103 05197 HLH 50213 b
1575	1575
1576	1576
1577	1577	SB1906- 44 -LRB103 05197 HLH 50213 b SB1906 - 44 - LRB103 05197 HLH 50213 b
1578	1578	SB1906 - 44 - LRB103 05197 HLH 50213 b
1579	1579	1 (K) An amount equal to those dividends included in
1580	1580	2 such total which were paid by a corporation which
1581	1581	3 conducts business operations in a River Edge
1582	1582	4 Redevelopment Zone or zones created under the River
1583	1583	5 Edge Redevelopment Zone Act and conducts substantially
1584	1584	6 all of its operations in a River Edge Redevelopment
1585	1585	7 Zone or zones. This subparagraph (K) is exempt from
1586	1586	8 the provisions of Section 250;
1587	1587	9 (L) An amount equal to those dividends included in
1588	1588	10 such total that were paid by a corporation that
1589	1589	11 conducts business operations in a federally designated
1590	1590	12 Foreign Trade Zone or Sub-Zone and that is designated
1591	1591	13 a High Impact Business located in Illinois; provided
1592	1592	14 that dividends eligible for the deduction provided in
1593	1593	15 subparagraph (K) of paragraph 2 of this subsection
1594	1594	16 shall not be eligible for the deduction provided under
1595	1595	17 this subparagraph (L);
1596	1596	18 (M) For any taxpayer that is a financial
1597	1597	19 organization within the meaning of Section 304(c) of
1598	1598	20 this Act, an amount included in such total as interest
1599	1599	21 income from a loan or loans made by such taxpayer to a
1600	1600	22 borrower, to the extent that such a loan is secured by
1601	1601	23 property which is eligible for the River Edge
1602	1602	24 Redevelopment Zone Investment Credit. To determine the
1603	1603	25 portion of a loan or loans that is secured by property
1604	1604	26 eligible for a Section 201(f) investment credit to the
1605	1605
1606	1606
1607	1607
1608	1608
1609	1609
1610	1610	SB1906 - 44 - LRB103 05197 HLH 50213 b
1611	1611
1612	1612
1613	1613	SB1906- 45 -LRB103 05197 HLH 50213 b SB1906 - 45 - LRB103 05197 HLH 50213 b
1614	1614	SB1906 - 45 - LRB103 05197 HLH 50213 b
1615	1615	1 borrower, the entire principal amount of the loan or
1616	1616	2 loans between the taxpayer and the borrower should be
1617	1617	3 divided into the basis of the Section 201(f)
1618	1618	4 investment credit property which secures the loan or
1619	1619	5 loans, using for this purpose the original basis of
1620	1620	6 such property on the date that it was placed in service
1621	1621	7 in the River Edge Redevelopment Zone. The subtraction
1622	1622	8 modification available to the taxpayer in any year
1623	1623	9 under this subsection shall be that portion of the
1624	1624	10 total interest paid by the borrower with respect to
1625	1625	11 such loan attributable to the eligible property as
1626	1626	12 calculated under the previous sentence. This
1627	1627	13 subparagraph (M) is exempt from the provisions of
1628	1628	14 Section 250;
1629	1629	15 (M-1) For any taxpayer that is a financial
1630	1630	16 organization within the meaning of Section 304(c) of
1631	1631	17 this Act, an amount included in such total as interest
1632	1632	18 income from a loan or loans made by such taxpayer to a
1633	1633	19 borrower, to the extent that such a loan is secured by
1634	1634	20 property which is eligible for the High Impact
1635	1635	21 Business Investment Credit. To determine the portion
1636	1636	22 of a loan or loans that is secured by property eligible
1637	1637	23 for a Section 201(h) investment credit to the
1638	1638	24 borrower, the entire principal amount of the loan or
1639	1639	25 loans between the taxpayer and the borrower should be
1640	1640	26 divided into the basis of the Section 201(h)
1641	1641
1642	1642
1643	1643
1644	1644
1645	1645
1646	1646	SB1906 - 45 - LRB103 05197 HLH 50213 b
1647	1647
1648	1648
1649	1649	SB1906- 46 -LRB103 05197 HLH 50213 b SB1906 - 46 - LRB103 05197 HLH 50213 b
1650	1650	SB1906 - 46 - LRB103 05197 HLH 50213 b
1651	1651	1 investment credit property which secures the loan or
1652	1652	2 loans, using for this purpose the original basis of
1653	1653	3 such property on the date that it was placed in service
1654	1654	4 in a federally designated Foreign Trade Zone or
1655	1655	5 Sub-Zone located in Illinois. No taxpayer that is
1656	1656	6 eligible for the deduction provided in subparagraph
1657	1657	7 (M) of paragraph (2) of this subsection shall be
1658	1658	8 eligible for the deduction provided under this
1659	1659	9 subparagraph (M-1). The subtraction modification
1660	1660	10 available to taxpayers in any year under this
1661	1661	11 subsection shall be that portion of the total interest
1662	1662	12 paid by the borrower with respect to such loan
1663	1663	13 attributable to the eligible property as calculated
1664	1664	14 under the previous sentence;
1665	1665	15 (N) Two times any contribution made during the
1666	1666	16 taxable year to a designated zone organization to the
1667	1667	17 extent that the contribution (i) qualifies as a
1668	1668	18 charitable contribution under subsection (c) of
1669	1669	19 Section 170 of the Internal Revenue Code and (ii)
1670	1670	20 must, by its terms, be used for a project approved by
1671	1671	21 the Department of Commerce and Economic Opportunity
1672	1672	22 under Section 11 of the Illinois Enterprise Zone Act
1673	1673	23 or under Section 10-10 of the River Edge Redevelopment
1674	1674	24 Zone Act. This subparagraph (N) is exempt from the
1675	1675	25 provisions of Section 250;
1676	1676	26 (O) An amount equal to: (i) 85% for taxable years
1677	1677
1678	1678
1679	1679
1680	1680
1681	1681
1682	1682	SB1906 - 46 - LRB103 05197 HLH 50213 b
1683	1683
1684	1684
1685	1685	SB1906- 47 -LRB103 05197 HLH 50213 b SB1906 - 47 - LRB103 05197 HLH 50213 b
1686	1686	SB1906 - 47 - LRB103 05197 HLH 50213 b
1687	1687	1 ending on or before December 31, 1992, or, a
1688	1688	2 percentage equal to the percentage allowable under
1689	1689	3 Section 243(a)(1) of the Internal Revenue Code of 1986
1690	1690	4 for taxable years ending after December 31, 1992, of
1691	1691	5 the amount by which dividends included in taxable
1692	1692	6 income and received from a corporation that is not
1693	1693	7 created or organized under the laws of the United
1694	1694	8 States or any state or political subdivision thereof,
1695	1695	9 including, for taxable years ending on or after
1696	1696	10 December 31, 1988, dividends received or deemed
1697	1697	11 received or paid or deemed paid under Sections 951
1698	1698	12 through 965 of the Internal Revenue Code, exceed the
1699	1699	13 amount of the modification provided under subparagraph
1700	1700	14 (G) of paragraph (2) of this subsection (b) which is
1701	1701	15 related to such dividends, and including, for taxable
1702	1702	16 years ending on or after December 31, 2008, dividends
1703	1703	17 received from a captive real estate investment trust;
1704	1704	18 plus (ii) 100% of the amount by which dividends,
1705	1705	19 included in taxable income and received, including,
1706	1706	20 for taxable years ending on or after December 31,
1707	1707	21 1988, dividends received or deemed received or paid or
1708	1708	22 deemed paid under Sections 951 through 964 of the
1709	1709	23 Internal Revenue Code and including, for taxable years
1710	1710	24 ending on or after December 31, 2008, dividends
1711	1711	25 received from a captive real estate investment trust,
1712	1712	26 from any such corporation specified in clause (i) that
1713	1713
1714	1714
1715	1715
1716	1716
1717	1717
1718	1718	SB1906 - 47 - LRB103 05197 HLH 50213 b
1719	1719
1720	1720
1721	1721	SB1906- 48 -LRB103 05197 HLH 50213 b SB1906 - 48 - LRB103 05197 HLH 50213 b
1722	1722	SB1906 - 48 - LRB103 05197 HLH 50213 b
1723	1723	1 would but for the provisions of Section 1504(b)(3) of
1724	1724	2 the Internal Revenue Code be treated as a member of the
1725	1725	3 affiliated group which includes the dividend
1726	1726	4 recipient, exceed the amount of the modification
1727	1727	5 provided under subparagraph (G) of paragraph (2) of
1728	1728	6 this subsection (b) which is related to such
1729	1729	7 dividends. For taxable years ending on or after June
1730	1730	8 30, 2021, (i) for purposes of this subparagraph, the
1731	1731	9 term "dividend" does not include any amount treated as
1732	1732	10 a dividend under Section 1248 of the Internal Revenue
1733	1733	11 Code, and (ii) this subparagraph shall not apply to
1734	1734	12 dividends for which a deduction is allowed under
1735	1735	13 Section 245(a) of the Internal Revenue Code. This
1736	1736	14 subparagraph (O) is exempt from the provisions of
1737	1737	15 Section 250 of this Act;
1738	1738	16 (P) An amount equal to any contribution made to a
1739	1739	17 job training project established pursuant to the Tax
1740	1740	18 Increment Allocation Redevelopment Act;
1741	1741	19 (Q) An amount equal to the amount of the deduction
1742	1742	20 used to compute the federal income tax credit for
1743	1743	21 restoration of substantial amounts held under claim of
1744	1744	22 right for the taxable year pursuant to Section 1341 of
1745	1745	23 the Internal Revenue Code;
1746	1746	24 (R) On and after July 20, 1999, in the case of an
1747	1747	25 attorney-in-fact with respect to whom an interinsurer
1748	1748	26 or a reciprocal insurer has made the election under
1749	1749
1750	1750
1751	1751
1752	1752
1753	1753
1754	1754	SB1906 - 48 - LRB103 05197 HLH 50213 b
1755	1755
1756	1756
1757	1757	SB1906- 49 -LRB103 05197 HLH 50213 b SB1906 - 49 - LRB103 05197 HLH 50213 b
1758	1758	SB1906 - 49 - LRB103 05197 HLH 50213 b
1759	1759	1 Section 835 of the Internal Revenue Code, 26 U.S.C.
1760	1760	2 835, an amount equal to the excess, if any, of the
1761	1761	3 amounts paid or incurred by that interinsurer or
1762	1762	4 reciprocal insurer in the taxable year to the
1763	1763	5 attorney-in-fact over the deduction allowed to that
1764	1764	6 interinsurer or reciprocal insurer with respect to the
1765	1765	7 attorney-in-fact under Section 835(b) of the Internal
1766	1766	8 Revenue Code for the taxable year; the provisions of
1767	1767	9 this subparagraph are exempt from the provisions of
1768	1768	10 Section 250;
1769	1769	11 (S) For taxable years ending on or after December
1770	1770	12 31, 1997, in the case of a Subchapter S corporation, an
1771	1771	13 amount equal to all amounts of income allocable to a
1772	1772	14 shareholder subject to the Personal Property Tax
1773	1773	15 Replacement Income Tax imposed by subsections (c) and
1774	1774	16 (d) of Section 201 of this Act, including amounts
1775	1775	17 allocable to organizations exempt from federal income
1776	1776	18 tax by reason of Section 501(a) of the Internal
1777	1777	19 Revenue Code. This subparagraph (S) is exempt from the
1778	1778	20 provisions of Section 250;
1779	1779	21 (T) For taxable years 2001 and thereafter, for the
1780	1780	22 taxable year in which the bonus depreciation deduction
1781	1781	23 is taken on the taxpayer's federal income tax return
1782	1782	24 under subsection (k) of Section 168 of the Internal
1783	1783	25 Revenue Code and for each applicable taxable year
1784	1784	26 thereafter, an amount equal to "x", where:
1785	1785
1786	1786
1787	1787
1788	1788
1789	1789
1790	1790	SB1906 - 49 - LRB103 05197 HLH 50213 b
1791	1791
1792	1792
1793	1793	SB1906- 50 -LRB103 05197 HLH 50213 b SB1906 - 50 - LRB103 05197 HLH 50213 b
1794	1794	SB1906 - 50 - LRB103 05197 HLH 50213 b
1795	1795	1 (1) "y" equals the amount of the depreciation
1796	1796	2 deduction taken for the taxable year on the
1797	1797	3 taxpayer's federal income tax return on property
1798	1798	4 for which the bonus depreciation deduction was
1799	1799	5 taken in any year under subsection (k) of Section
1800	1800	6 168 of the Internal Revenue Code, but not
1801	1801	7 including the bonus depreciation deduction;
1802	1802	8 (2) for taxable years ending on or before
1803	1803	9 December 31, 2005, "x" equals "y" multiplied by 30
1804	1804	10 and then divided by 70 (or "y" multiplied by
1805	1805	11 0.429); and
1806	1806	12 (3) for taxable years ending after December
1807	1807	13 31, 2005:
1808	1808	14 (i) for property on which a bonus
1809	1809	15 depreciation deduction of 30% of the adjusted
1810	1810	16 basis was taken, "x" equals "y" multiplied by
1811	1811	17 30 and then divided by 70 (or "y" multiplied
1812	1812	18 by 0.429);
1813	1813	19 (ii) for property on which a bonus
1814	1814	20 depreciation deduction of 50% of the adjusted
1815	1815	21 basis was taken, "x" equals "y" multiplied by
1816	1816	22 1.0;
1817	1817	23 (iii) for property on which a bonus
1818	1818	24 depreciation deduction of 100% of the adjusted
1819	1819	25 basis was taken in a taxable year ending on or
1820	1820	26 after December 31, 2021, "x" equals the
1821	1821
1822	1822
1823	1823
1824	1824
1825	1825
1826	1826	SB1906 - 50 - LRB103 05197 HLH 50213 b
1827	1827
1828	1828
1829	1829	SB1906- 51 -LRB103 05197 HLH 50213 b SB1906 - 51 - LRB103 05197 HLH 50213 b
1830	1830	SB1906 - 51 - LRB103 05197 HLH 50213 b
1831	1831	1 depreciation deduction that would be allowed
1832	1832	2 on that property if the taxpayer had made the
1833	1833	3 election under Section 168(k)(7) of the
1834	1834	4 Internal Revenue Code to not claim bonus
1835	1835	5 depreciation on that property; and
1836	1836	6 (iv) for property on which a bonus
1837	1837	7 depreciation deduction of a percentage other
1838	1838	8 than 30%, 50% or 100% of the adjusted basis
1839	1839	9 was taken in a taxable year ending on or after
1840	1840	10 December 31, 2021, "x" equals "y" multiplied
1841	1841	11 by 100 times the percentage bonus depreciation
1842	1842	12 on the property (that is, 100(bonus%)) and
1843	1843	13 then divided by 100 times 1 minus the
1844	1844	14 percentage bonus depreciation on the property
1845	1845	15 (that is, 100(1bonus%)).
1846	1846	16 The aggregate amount deducted under this
1847	1847	17 subparagraph in all taxable years for any one piece of
1848	1848	18 property may not exceed the amount of the bonus
1849	1849	19 depreciation deduction taken on that property on the
1850	1850	20 taxpayer's federal income tax return under subsection
1851	1851	21 (k) of Section 168 of the Internal Revenue Code. This
1852	1852	22 subparagraph (T) is exempt from the provisions of
1853	1853	23 Section 250;
1854	1854	24 (U) If the taxpayer sells, transfers, abandons, or
1855	1855	25 otherwise disposes of property for which the taxpayer
1856	1856	26 was required in any taxable year to make an addition
1857	1857
1858	1858
1859	1859
1860	1860
1861	1861
1862	1862	SB1906 - 51 - LRB103 05197 HLH 50213 b
1863	1863
1864	1864
1865	1865	SB1906- 52 -LRB103 05197 HLH 50213 b SB1906 - 52 - LRB103 05197 HLH 50213 b
1866	1866	SB1906 - 52 - LRB103 05197 HLH 50213 b
1867	1867	1 modification under subparagraph (E-10), then an amount
1868	1868	2 equal to that addition modification.
1869	1869	3 If the taxpayer continues to own property through
1870	1870	4 the last day of the last tax year for which a
1871	1871	5 subtraction is allowed with respect to that property
1872	1872	6 under subparagraph (T) and for which the taxpayer was
1873	1873	7 required in any taxable year to make an addition
1874	1874	8 modification under subparagraph (E-10), then an amount
1875	1875	9 equal to that addition modification.
1876	1876	10 The taxpayer is allowed to take the deduction
1877	1877	11 under this subparagraph only once with respect to any
1878	1878	12 one piece of property.
1879	1879	13 This subparagraph (U) is exempt from the
1880	1880	14 provisions of Section 250;
1881	1881	15 (V) The amount of: (i) any interest income (net of
1882	1882	16 the deductions allocable thereto) taken into account
1883	1883	17 for the taxable year with respect to a transaction
1884	1884	18 with a taxpayer that is required to make an addition
1885	1885	19 modification with respect to such transaction under
1886	1886	20 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
1887	1887	21 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
1888	1888	22 the amount of such addition modification, (ii) any
1889	1889	23 income from intangible property (net of the deductions
1890	1890	24 allocable thereto) taken into account for the taxable
1891	1891	25 year with respect to a transaction with a taxpayer
1892	1892	26 that is required to make an addition modification with
1893	1893
1894	1894
1895	1895
1896	1896
1897	1897
1898	1898	SB1906 - 52 - LRB103 05197 HLH 50213 b
1899	1899
1900	1900
1901	1901	SB1906- 53 -LRB103 05197 HLH 50213 b SB1906 - 53 - LRB103 05197 HLH 50213 b
1902	1902	SB1906 - 53 - LRB103 05197 HLH 50213 b
1903	1903	1 respect to such transaction under Section
1904	1904	2 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
1905	1905	3 203(d)(2)(D-8), but not to exceed the amount of such
1906	1906	4 addition modification, and (iii) any insurance premium
1907	1907	5 income (net of deductions allocable thereto) taken
1908	1908	6 into account for the taxable year with respect to a
1909	1909	7 transaction with a taxpayer that is required to make
1910	1910	8 an addition modification with respect to such
1911	1911	9 transaction under Section 203(a)(2)(D-19), Section
1912	1912	10 203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
1913	1913	11 203(d)(2)(D-9), but not to exceed the amount of that
1914	1914	12 addition modification. This subparagraph (V) is exempt
1915	1915	13 from the provisions of Section 250;
1916	1916	14 (W) An amount equal to the interest income taken
1917	1917	15 into account for the taxable year (net of the
1918	1918	16 deductions allocable thereto) with respect to
1919	1919	17 transactions with (i) a foreign person who would be a
1920	1920	18 member of the taxpayer's unitary business group but
1921	1921	19 for the fact that the foreign person's business
1922	1922	20 activity outside the United States is 80% or more of
1923	1923	21 that person's total business activity and (ii) for
1924	1924	22 taxable years ending on or after December 31, 2008, to
1925	1925	23 a person who would be a member of the same unitary
1926	1926	24 business group but for the fact that the person is
1927	1927	25 prohibited under Section 1501(a)(27) from being
1928	1928	26 included in the unitary business group because he or
1929	1929
1930	1930
1931	1931
1932	1932
1933	1933
1934	1934	SB1906 - 53 - LRB103 05197 HLH 50213 b
1935	1935
1936	1936
1937	1937	SB1906- 54 -LRB103 05197 HLH 50213 b SB1906 - 54 - LRB103 05197 HLH 50213 b
1938	1938	SB1906 - 54 - LRB103 05197 HLH 50213 b
1939	1939	1 she is ordinarily required to apportion business
1940	1940	2 income under different subsections of Section 304, but
1941	1941	3 not to exceed the addition modification required to be
1942	1942	4 made for the same taxable year under Section
1943	1943	5 203(b)(2)(E-12) for interest paid, accrued, or
1944	1944	6 incurred, directly or indirectly, to the same person.
1945	1945	7 This subparagraph (W) is exempt from the provisions of
1946	1946	8 Section 250;
1947	1947	9 (X) An amount equal to the income from intangible
1948	1948	10 property taken into account for the taxable year (net
1949	1949	11 of the deductions allocable thereto) with respect to
1950	1950	12 transactions with (i) a foreign person who would be a
1951	1951	13 member of the taxpayer's unitary business group but
1952	1952	14 for the fact that the foreign person's business
1953	1953	15 activity outside the United States is 80% or more of
1954	1954	16 that person's total business activity and (ii) for
1955	1955	17 taxable years ending on or after December 31, 2008, to
1956	1956	18 a person who would be a member of the same unitary
1957	1957	19 business group but for the fact that the person is
1958	1958	20 prohibited under Section 1501(a)(27) from being
1959	1959	21 included in the unitary business group because he or
1960	1960	22 she is ordinarily required to apportion business
1961	1961	23 income under different subsections of Section 304, but
1962	1962	24 not to exceed the addition modification required to be
1963	1963	25 made for the same taxable year under Section
1964	1964	26 203(b)(2)(E-13) for intangible expenses and costs
1965	1965
1966	1966
1967	1967
1968	1968
1969	1969
1970	1970	SB1906 - 54 - LRB103 05197 HLH 50213 b
1971	1971
1972	1972
1973	1973	SB1906- 55 -LRB103 05197 HLH 50213 b SB1906 - 55 - LRB103 05197 HLH 50213 b
1974	1974	SB1906 - 55 - LRB103 05197 HLH 50213 b
1975	1975	1 paid, accrued, or incurred, directly or indirectly, to
1976	1976	2 the same foreign person. This subparagraph (X) is
1977	1977	3 exempt from the provisions of Section 250;
1978	1978	4 (Y) For taxable years ending on or after December
1979	1979	5 31, 2011, in the case of a taxpayer who was required to
1980	1980	6 add back any insurance premiums under Section
1981	1981	7 203(b)(2)(E-14), such taxpayer may elect to subtract
1982	1982	8 that part of a reimbursement received from the
1983	1983	9 insurance company equal to the amount of the expense
1984	1984	10 or loss (including expenses incurred by the insurance
1985	1985	11 company) that would have been taken into account as a
1986	1986	12 deduction for federal income tax purposes if the
1987	1987	13 expense or loss had been uninsured. If a taxpayer
1988	1988	14 makes the election provided for by this subparagraph
1989	1989	15 (Y), the insurer to which the premiums were paid must
1990	1990	16 add back to income the amount subtracted by the
1991	1991	17 taxpayer pursuant to this subparagraph (Y). This
1992	1992	18 subparagraph (Y) is exempt from the provisions of
1993	1993	19 Section 250; and
1994	1994	20 (Z) The difference between the nondeductible
1995	1995	21 controlled foreign corporation dividends under Section
1996	1996	22 965(e)(3) of the Internal Revenue Code over the
1997	1997	23 taxable income of the taxpayer, computed without
1998	1998	24 regard to Section 965(e)(2)(A) of the Internal Revenue
1999	1999	25 Code, and without regard to any net operating loss
2000	2000	26 deduction. This subparagraph (Z) is exempt from the
2001	2001
2002	2002
2003	2003
2004	2004
2005	2005
2006	2006	SB1906 - 55 - LRB103 05197 HLH 50213 b
2007	2007
2008	2008
2009	2009	SB1906- 56 -LRB103 05197 HLH 50213 b SB1906 - 56 - LRB103 05197 HLH 50213 b
2010	2010	SB1906 - 56 - LRB103 05197 HLH 50213 b
2011	2011	1 provisions of Section 250.
2012	2012	2 (3) Special rule. For purposes of paragraph (2)(A),
2013	2013	3 "gross income" in the case of a life insurance company,
2014	2014	4 for tax years ending on and after December 31, 1994, and
2015	2015	5 prior to December 31, 2011, shall mean the gross
2016	2016	6 investment income for the taxable year and, for tax years
2017	2017	7 ending on or after December 31, 2011, shall mean all
2018	2018	8 amounts included in life insurance gross income under
2019	2019	9 Section 803(a)(3) of the Internal Revenue Code.
2020	2020	10 (c) Trusts and estates.
2021	2021	11 (1) In general. In the case of a trust or estate, base
2022	2022	12 income means an amount equal to the taxpayer's taxable
2023	2023	13 income for the taxable year as modified by paragraph (2).
2024	2024	14 (2) Modifications. Subject to the provisions of
2025	2025	15 paragraph (3), the taxable income referred to in paragraph
2026	2026	16 (1) shall be modified by adding thereto the sum of the
2027	2027	17 following amounts:
2028	2028	18 (A) An amount equal to all amounts paid or accrued
2029	2029	19 to the taxpayer as interest or dividends during the
2030	2030	20 taxable year to the extent excluded from gross income
2031	2031	21 in the computation of taxable income;
2032	2032	22 (B) In the case of (i) an estate, $600; (ii) a
2033	2033	23 trust which, under its governing instrument, is
2034	2034	24 required to distribute all of its income currently,
2035	2035	25 $300; and (iii) any other trust, $100, but in each such
2036	2036
2037	2037
2038	2038
2039	2039
2040	2040
2041	2041	SB1906 - 56 - LRB103 05197 HLH 50213 b
2042	2042
2043	2043
2044	2044	SB1906- 57 -LRB103 05197 HLH 50213 b SB1906 - 57 - LRB103 05197 HLH 50213 b
2045	2045	SB1906 - 57 - LRB103 05197 HLH 50213 b
2046	2046	1 case, only to the extent such amount was deducted in
2047	2047	2 the computation of taxable income;
2048	2048	3 (C) An amount equal to the amount of tax imposed by
2049	2049	4 this Act to the extent deducted from gross income in
2050	2050	5 the computation of taxable income for the taxable
2051	2051	6 year;
2052	2052	7 (D) The amount of any net operating loss deduction
2053	2053	8 taken in arriving at taxable income, other than a net
2054	2054	9 operating loss carried forward from a taxable year
2055	2055	10 ending prior to December 31, 1986;
2056	2056	11 (E) For taxable years in which a net operating
2057	2057	12 loss carryback or carryforward from a taxable year
2058	2058	13 ending prior to December 31, 1986 is an element of
2059	2059	14 taxable income under paragraph (1) of subsection (e)
2060	2060	15 or subparagraph (E) of paragraph (2) of subsection
2061	2061	16 (e), the amount by which addition modifications other
2062	2062	17 than those provided by this subparagraph (E) exceeded
2063	2063	18 subtraction modifications in such taxable year, with
2064	2064	19 the following limitations applied in the order that
2065	2065	20 they are listed:
2066	2066	21 (i) the addition modification relating to the
2067	2067	22 net operating loss carried back or forward to the
2068	2068	23 taxable year from any taxable year ending prior to
2069	2069	24 December 31, 1986 shall be reduced by the amount
2070	2070	25 of addition modification under this subparagraph
2071	2071	26 (E) which related to that net operating loss and
2072	2072
2073	2073
2074	2074
2075	2075
2076	2076
2077	2077	SB1906 - 57 - LRB103 05197 HLH 50213 b
2078	2078
2079	2079
2080	2080	SB1906- 58 -LRB103 05197 HLH 50213 b SB1906 - 58 - LRB103 05197 HLH 50213 b
2081	2081	SB1906 - 58 - LRB103 05197 HLH 50213 b
2082	2082	1 which was taken into account in calculating the
2083	2083	2 base income of an earlier taxable year, and
2084	2084	3 (ii) the addition modification relating to the
2085	2085	4 net operating loss carried back or forward to the
2086	2086	5 taxable year from any taxable year ending prior to
2087	2087	6 December 31, 1986 shall not exceed the amount of
2088	2088	7 such carryback or carryforward;
2089	2089	8 For taxable years in which there is a net
2090	2090	9 operating loss carryback or carryforward from more
2091	2091	10 than one other taxable year ending prior to December
2092	2092	11 31, 1986, the addition modification provided in this
2093	2093	12 subparagraph (E) shall be the sum of the amounts
2094	2094	13 computed independently under the preceding provisions
2095	2095	14 of this subparagraph (E) for each such taxable year;
2096	2096	15 (F) For taxable years ending on or after January
2097	2097	16 1, 1989, an amount equal to the tax deducted pursuant
2098	2098	17 to Section 164 of the Internal Revenue Code if the
2099	2099	18 trust or estate is claiming the same tax for purposes
2100	2100	19 of the Illinois foreign tax credit under Section 601
2101	2101	20 of this Act;
2102	2102	21 (G) An amount equal to the amount of the capital
2103	2103	22 gain deduction allowable under the Internal Revenue
2104	2104	23 Code, to the extent deducted from gross income in the
2105	2105	24 computation of taxable income;
2106	2106	25 (G-5) For taxable years ending after December 31,
2107	2107	26 1997, an amount equal to any eligible remediation
2108	2108
2109	2109
2110	2110
2111	2111
2112	2112
2113	2113	SB1906 - 58 - LRB103 05197 HLH 50213 b
2114	2114
2115	2115
2116	2116	SB1906- 59 -LRB103 05197 HLH 50213 b SB1906 - 59 - LRB103 05197 HLH 50213 b
2117	2117	SB1906 - 59 - LRB103 05197 HLH 50213 b
2118	2118	1 costs that the trust or estate deducted in computing
2119	2119	2 adjusted gross income and for which the trust or
2120	2120	3 estate claims a credit under subsection (l) of Section
2121	2121	4 201;
2122	2122	5 (G-10) For taxable years 2001 and thereafter, an
2123	2123	6 amount equal to the bonus depreciation deduction taken
2124	2124	7 on the taxpayer's federal income tax return for the
2125	2125	8 taxable year under subsection (k) of Section 168 of
2126	2126	9 the Internal Revenue Code; and
2127	2127	10 (G-11) If the taxpayer sells, transfers, abandons,
2128	2128	11 or otherwise disposes of property for which the
2129	2129	12 taxpayer was required in any taxable year to make an
2130	2130	13 addition modification under subparagraph (G-10), then
2131	2131	14 an amount equal to the aggregate amount of the
2132	2132	15 deductions taken in all taxable years under
2133	2133	16 subparagraph (R) with respect to that property.
2134	2134	17 If the taxpayer continues to own property through
2135	2135	18 the last day of the last tax year for which a
2136	2136	19 subtraction is allowed with respect to that property
2137	2137	20 under subparagraph (R) and for which the taxpayer was
2138	2138	21 allowed in any taxable year to make a subtraction
2139	2139	22 modification under subparagraph (R), then an amount
2140	2140	23 equal to that subtraction modification.
2141	2141	24 The taxpayer is required to make the addition
2142	2142	25 modification under this subparagraph only once with
2143	2143	26 respect to any one piece of property;
2144	2144
2145	2145
2146	2146
2147	2147
2148	2148
2149	2149	SB1906 - 59 - LRB103 05197 HLH 50213 b
2150	2150
2151	2151
2152	2152	SB1906- 60 -LRB103 05197 HLH 50213 b SB1906 - 60 - LRB103 05197 HLH 50213 b
2153	2153	SB1906 - 60 - LRB103 05197 HLH 50213 b
2154	2154	1 (G-12) An amount equal to the amount otherwise
2155	2155	2 allowed as a deduction in computing base income for
2156	2156	3 interest paid, accrued, or incurred, directly or
2157	2157	4 indirectly, (i) for taxable years ending on or after
2158	2158	5 December 31, 2004, to a foreign person who would be a
2159	2159	6 member of the same unitary business group but for the
2160	2160	7 fact that the foreign person's business activity
2161	2161	8 outside the United States is 80% or more of the foreign
2162	2162	9 person's total business activity and (ii) for taxable
2163	2163	10 years ending on or after December 31, 2008, to a person
2164	2164	11 who would be a member of the same unitary business
2165	2165	12 group but for the fact that the person is prohibited
2166	2166	13 under Section 1501(a)(27) from being included in the
2167	2167	14 unitary business group because he or she is ordinarily
2168	2168	15 required to apportion business income under different
2169	2169	16 subsections of Section 304. The addition modification
2170	2170	17 required by this subparagraph shall be reduced to the
2171	2171	18 extent that dividends were included in base income of
2172	2172	19 the unitary group for the same taxable year and
2173	2173	20 received by the taxpayer or by a member of the
2174	2174	21 taxpayer's unitary business group (including amounts
2175	2175	22 included in gross income pursuant to Sections 951
2176	2176	23 through 964 of the Internal Revenue Code and amounts
2177	2177	24 included in gross income under Section 78 of the
2178	2178	25 Internal Revenue Code) with respect to the stock of
2179	2179	26 the same person to whom the interest was paid,
2180	2180
2181	2181
2182	2182
2183	2183
2184	2184
2185	2185	SB1906 - 60 - LRB103 05197 HLH 50213 b
2186	2186
2187	2187
2188	2188	SB1906- 61 -LRB103 05197 HLH 50213 b SB1906 - 61 - LRB103 05197 HLH 50213 b
2189	2189	SB1906 - 61 - LRB103 05197 HLH 50213 b
2190	2190	1 accrued, or incurred.
2191	2191	2 This paragraph shall not apply to the following:
2192	2192	3 (i) an item of interest paid, accrued, or
2193	2193	4 incurred, directly or indirectly, to a person who
2194	2194	5 is subject in a foreign country or state, other
2195	2195	6 than a state which requires mandatory unitary
2196	2196	7 reporting, to a tax on or measured by net income
2197	2197	8 with respect to such interest; or
2198	2198	9 (ii) an item of interest paid, accrued, or
2199	2199	10 incurred, directly or indirectly, to a person if
2200	2200	11 the taxpayer can establish, based on a
2201	2201	12 preponderance of the evidence, both of the
2202	2202	13 following:
2203	2203	14 (a) the person, during the same taxable
2204	2204	15 year, paid, accrued, or incurred, the interest
2205	2205	16 to a person that is not a related member, and
2206	2206	17 (b) the transaction giving rise to the
2207	2207	18 interest expense between the taxpayer and the
2208	2208	19 person did not have as a principal purpose the
2209	2209	20 avoidance of Illinois income tax, and is paid
2210	2210	21 pursuant to a contract or agreement that
2211	2211	22 reflects an arm's-length interest rate and
2212	2212	23 terms; or
2213	2213	24 (iii) the taxpayer can establish, based on
2214	2214	25 clear and convincing evidence, that the interest
2215	2215	26 paid, accrued, or incurred relates to a contract
2216	2216
2217	2217
2218	2218
2219	2219
2220	2220
2221	2221	SB1906 - 61 - LRB103 05197 HLH 50213 b
2222	2222
2223	2223
2224	2224	SB1906- 62 -LRB103 05197 HLH 50213 b SB1906 - 62 - LRB103 05197 HLH 50213 b
2225	2225	SB1906 - 62 - LRB103 05197 HLH 50213 b
2226	2226	1 or agreement entered into at arm's-length rates
2227	2227	2 and terms and the principal purpose for the
2228	2228	3 payment is not federal or Illinois tax avoidance;
2229	2229	4 or
2230	2230	5 (iv) an item of interest paid, accrued, or
2231	2231	6 incurred, directly or indirectly, to a person if
2232	2232	7 the taxpayer establishes by clear and convincing
2233	2233	8 evidence that the adjustments are unreasonable; or
2234	2234	9 if the taxpayer and the Director agree in writing
2235	2235	10 to the application or use of an alternative method
2236	2236	11 of apportionment under Section 304(f).
2237	2237	12 Nothing in this subsection shall preclude the
2238	2238	13 Director from making any other adjustment
2239	2239	14 otherwise allowed under Section 404 of this Act
2240	2240	15 for any tax year beginning after the effective
2241	2241	16 date of this amendment provided such adjustment is
2242	2242	17 made pursuant to regulation adopted by the
2243	2243	18 Department and such regulations provide methods
2244	2244	19 and standards by which the Department will utilize
2245	2245	20 its authority under Section 404 of this Act;
2246	2246	21 (G-13) An amount equal to the amount of intangible
2247	2247	22 expenses and costs otherwise allowed as a deduction in
2248	2248	23 computing base income, and that were paid, accrued, or
2249	2249	24 incurred, directly or indirectly, (i) for taxable
2250	2250	25 years ending on or after December 31, 2004, to a
2251	2251	26 foreign person who would be a member of the same
2252	2252
2253	2253
2254	2254
2255	2255
2256	2256
2257	2257	SB1906 - 62 - LRB103 05197 HLH 50213 b
2258	2258
2259	2259
2260	2260	SB1906- 63 -LRB103 05197 HLH 50213 b SB1906 - 63 - LRB103 05197 HLH 50213 b
2261	2261	SB1906 - 63 - LRB103 05197 HLH 50213 b
2262	2262	1 unitary business group but for the fact that the
2263	2263	2 foreign person's business activity outside the United
2264	2264	3 States is 80% or more of that person's total business
2265	2265	4 activity and (ii) for taxable years ending on or after
2266	2266	5 December 31, 2008, to a person who would be a member of
2267	2267	6 the same unitary business group but for the fact that
2268	2268	7 the person is prohibited under Section 1501(a)(27)
2269	2269	8 from being included in the unitary business group
2270	2270	9 because he or she is ordinarily required to apportion
2271	2271	10 business income under different subsections of Section
2272	2272	11 304. The addition modification required by this
2273	2273	12 subparagraph shall be reduced to the extent that
2274	2274	13 dividends were included in base income of the unitary
2275	2275	14 group for the same taxable year and received by the
2276	2276	15 taxpayer or by a member of the taxpayer's unitary
2277	2277	16 business group (including amounts included in gross
2278	2278	17 income pursuant to Sections 951 through 964 of the
2279	2279	18 Internal Revenue Code and amounts included in gross
2280	2280	19 income under Section 78 of the Internal Revenue Code)
2281	2281	20 with respect to the stock of the same person to whom
2282	2282	21 the intangible expenses and costs were directly or
2283	2283	22 indirectly paid, incurred, or accrued. The preceding
2284	2284	23 sentence shall not apply to the extent that the same
2285	2285	24 dividends caused a reduction to the addition
2286	2286	25 modification required under Section 203(c)(2)(G-12) of
2287	2287	26 this Act. As used in this subparagraph, the term
2288	2288
2289	2289
2290	2290
2291	2291
2292	2292
2293	2293	SB1906 - 63 - LRB103 05197 HLH 50213 b
2294	2294
2295	2295
2296	2296	SB1906- 64 -LRB103 05197 HLH 50213 b SB1906 - 64 - LRB103 05197 HLH 50213 b
2297	2297	SB1906 - 64 - LRB103 05197 HLH 50213 b
2298	2298	1 "intangible expenses and costs" includes: (1)
2299	2299	2 expenses, losses, and costs for or related to the
2300	2300	3 direct or indirect acquisition, use, maintenance or
2301	2301	4 management, ownership, sale, exchange, or any other
2302	2302	5 disposition of intangible property; (2) losses
2303	2303	6 incurred, directly or indirectly, from factoring
2304	2304	7 transactions or discounting transactions; (3) royalty,
2305	2305	8 patent, technical, and copyright fees; (4) licensing
2306	2306	9 fees; and (5) other similar expenses and costs. For
2307	2307	10 purposes of this subparagraph, "intangible property"
2308	2308	11 includes patents, patent applications, trade names,
2309	2309	12 trademarks, service marks, copyrights, mask works,
2310	2310	13 trade secrets, and similar types of intangible assets.
2311	2311	14 This paragraph shall not apply to the following:
2312	2312	15 (i) any item of intangible expenses or costs
2313	2313	16 paid, accrued, or incurred, directly or
2314	2314	17 indirectly, from a transaction with a person who
2315	2315	18 is subject in a foreign country or state, other
2316	2316	19 than a state which requires mandatory unitary
2317	2317	20 reporting, to a tax on or measured by net income
2318	2318	21 with respect to such item; or
2319	2319	22 (ii) any item of intangible expense or cost
2320	2320	23 paid, accrued, or incurred, directly or
2321	2321	24 indirectly, if the taxpayer can establish, based
2322	2322	25 on a preponderance of the evidence, both of the
2323	2323	26 following:
2324	2324
2325	2325
2326	2326
2327	2327
2328	2328
2329	2329	SB1906 - 64 - LRB103 05197 HLH 50213 b
2330	2330
2331	2331
2332	2332	SB1906- 65 -LRB103 05197 HLH 50213 b SB1906 - 65 - LRB103 05197 HLH 50213 b
2333	2333	SB1906 - 65 - LRB103 05197 HLH 50213 b
2334	2334	1 (a) the person during the same taxable
2335	2335	2 year paid, accrued, or incurred, the
2336	2336	3 intangible expense or cost to a person that is
2337	2337	4 not a related member, and
2338	2338	5 (b) the transaction giving rise to the
2339	2339	6 intangible expense or cost between the
2340	2340	7 taxpayer and the person did not have as a
2341	2341	8 principal purpose the avoidance of Illinois
2342	2342	9 income tax, and is paid pursuant to a contract
2343	2343	10 or agreement that reflects arm's-length terms;
2344	2344	11 or
2345	2345	12 (iii) any item of intangible expense or cost
2346	2346	13 paid, accrued, or incurred, directly or
2347	2347	14 indirectly, from a transaction with a person if
2348	2348	15 the taxpayer establishes by clear and convincing
2349	2349	16 evidence, that the adjustments are unreasonable;
2350	2350	17 or if the taxpayer and the Director agree in
2351	2351	18 writing to the application or use of an
2352	2352	19 alternative method of apportionment under Section
2353	2353	20 304(f);
2354	2354	21 Nothing in this subsection shall preclude the
2355	2355	22 Director from making any other adjustment
2356	2356	23 otherwise allowed under Section 404 of this Act
2357	2357	24 for any tax year beginning after the effective
2358	2358	25 date of this amendment provided such adjustment is
2359	2359	26 made pursuant to regulation adopted by the
2360	2360
2361	2361
2362	2362
2363	2363
2364	2364
2365	2365	SB1906 - 65 - LRB103 05197 HLH 50213 b
2366	2366
2367	2367
2368	2368	SB1906- 66 -LRB103 05197 HLH 50213 b SB1906 - 66 - LRB103 05197 HLH 50213 b
2369	2369	SB1906 - 66 - LRB103 05197 HLH 50213 b
2370	2370	1 Department and such regulations provide methods
2371	2371	2 and standards by which the Department will utilize
2372	2372	3 its authority under Section 404 of this Act;
2373	2373	4 (G-14) For taxable years ending on or after
2374	2374	5 December 31, 2008, an amount equal to the amount of
2375	2375	6 insurance premium expenses and costs otherwise allowed
2376	2376	7 as a deduction in computing base income, and that were
2377	2377	8 paid, accrued, or incurred, directly or indirectly, to
2378	2378	9 a person who would be a member of the same unitary
2379	2379	10 business group but for the fact that the person is
2380	2380	11 prohibited under Section 1501(a)(27) from being
2381	2381	12 included in the unitary business group because he or
2382	2382	13 she is ordinarily required to apportion business
2383	2383	14 income under different subsections of Section 304. The
2384	2384	15 addition modification required by this subparagraph
2385	2385	16 shall be reduced to the extent that dividends were
2386	2386	17 included in base income of the unitary group for the
2387	2387	18 same taxable year and received by the taxpayer or by a
2388	2388	19 member of the taxpayer's unitary business group
2389	2389	20 (including amounts included in gross income under
2390	2390	21 Sections 951 through 964 of the Internal Revenue Code
2391	2391	22 and amounts included in gross income under Section 78
2392	2392	23 of the Internal Revenue Code) with respect to the
2393	2393	24 stock of the same person to whom the premiums and costs
2394	2394	25 were directly or indirectly paid, incurred, or
2395	2395	26 accrued. The preceding sentence does not apply to the
2396	2396
2397	2397
2398	2398
2399	2399
2400	2400
2401	2401	SB1906 - 66 - LRB103 05197 HLH 50213 b
2402	2402
2403	2403
2404	2404	SB1906- 67 -LRB103 05197 HLH 50213 b SB1906 - 67 - LRB103 05197 HLH 50213 b
2405	2405	SB1906 - 67 - LRB103 05197 HLH 50213 b
2406	2406	1 extent that the same dividends caused a reduction to
2407	2407	2 the addition modification required under Section
2408	2408	3 203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this
2409	2409	4 Act;
2410	2410	5 (G-15) An amount equal to the credit allowable to
2411	2411	6 the taxpayer under Section 218(a) of this Act,
2412	2412	7 determined without regard to Section 218(c) of this
2413	2413	8 Act;
2414	2414	9 (G-16) For taxable years ending on or after
2415	2415	10 December 31, 2017, an amount equal to the deduction
2416	2416	11 allowed under Section 199 of the Internal Revenue Code
2417	2417	12 for the taxable year;
2418	2418	13 and by deducting from the total so obtained the sum of the
2419	2419	14 following amounts:
2420	2420	15 (H) An amount equal to all amounts included in
2421	2421	16 such total pursuant to the provisions of Sections
2422	2422	17 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 408
2423	2423	18 of the Internal Revenue Code or included in such total
2424	2424	19 as distributions under the provisions of any
2425	2425	20 retirement or disability plan for employees of any
2426	2426	21 governmental agency or unit, or retirement payments to
2427	2427	22 retired partners, which payments are excluded in
2428	2428	23 computing net earnings from self employment by Section
2429	2429	24 1402 of the Internal Revenue Code and regulations
2430	2430	25 adopted pursuant thereto;
2431	2431	26 (I) The valuation limitation amount;
2432	2432
2433	2433
2434	2434
2435	2435
2436	2436
2437	2437	SB1906 - 67 - LRB103 05197 HLH 50213 b
2438	2438
2439	2439
2440	2440	SB1906- 68 -LRB103 05197 HLH 50213 b SB1906 - 68 - LRB103 05197 HLH 50213 b
2441	2441	SB1906 - 68 - LRB103 05197 HLH 50213 b
2442	2442	1 (J) An amount equal to the amount of any tax
2443	2443	2 imposed by this Act which was refunded to the taxpayer
2444	2444	3 and included in such total for the taxable year;
2445	2445	4 (K) An amount equal to all amounts included in
2446	2446	5 taxable income as modified by subparagraphs (A), (B),
2447	2447	6 (C), (D), (E), (F) and (G) which are exempt from
2448	2448	7 taxation by this State either by reason of its
2449	2449	8 statutes or Constitution or by reason of the
2450	2450	9 Constitution, treaties or statutes of the United
2451	2451	10 States; provided that, in the case of any statute of
2452	2452	11 this State that exempts income derived from bonds or
2453	2453	12 other obligations from the tax imposed under this Act,
2454	2454	13 the amount exempted shall be the interest net of bond
2455	2455	14 premium amortization;
2456	2456	15 (L) With the exception of any amounts subtracted
2457	2457	16 under subparagraph (K), an amount equal to the sum of
2458	2458	17 all amounts disallowed as deductions by (i) Sections
2459	2459	18 171(a)(2) and 265(a)(2) of the Internal Revenue Code,
2460	2460	19 and all amounts of expenses allocable to interest and
2461	2461	20 disallowed as deductions by Section 265(a)(1) of the
2462	2462	21 Internal Revenue Code; and (ii) for taxable years
2463	2463	22 ending on or after August 13, 1999, Sections
2464	2464	23 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
2465	2465	24 Internal Revenue Code, plus, (iii) for taxable years
2466	2466	25 ending on or after December 31, 2011, Section
2467	2467	26 45G(e)(3) of the Internal Revenue Code and, for
2468	2468
2469	2469
2470	2470
2471	2471
2472	2472
2473	2473	SB1906 - 68 - LRB103 05197 HLH 50213 b
2474	2474
2475	2475
2476	2476	SB1906- 69 -LRB103 05197 HLH 50213 b SB1906 - 69 - LRB103 05197 HLH 50213 b
2477	2477	SB1906 - 69 - LRB103 05197 HLH 50213 b
2478	2478	1 taxable years ending on or after December 31, 2008,
2479	2479	2 any amount included in gross income under Section 87
2480	2480	3 of the Internal Revenue Code; the provisions of this
2481	2481	4 subparagraph are exempt from the provisions of Section
2482	2482	5 250;
2483	2483	6 (M) An amount equal to those dividends included in
2484	2484	7 such total which were paid by a corporation which
2485	2485	8 conducts business operations in a River Edge
2486	2486	9 Redevelopment Zone or zones created under the River
2487	2487	10 Edge Redevelopment Zone Act and conducts substantially
2488	2488	11 all of its operations in a River Edge Redevelopment
2489	2489	12 Zone or zones. This subparagraph (M) is exempt from
2490	2490	13 the provisions of Section 250;
2491	2491	14 (N) An amount equal to any contribution made to a
2492	2492	15 job training project established pursuant to the Tax
2493	2493	16 Increment Allocation Redevelopment Act;
2494	2494	17 (O) An amount equal to those dividends included in
2495	2495	18 such total that were paid by a corporation that
2496	2496	19 conducts business operations in a federally designated
2497	2497	20 Foreign Trade Zone or Sub-Zone and that is designated
2498	2498	21 a High Impact Business located in Illinois; provided
2499	2499	22 that dividends eligible for the deduction provided in
2500	2500	23 subparagraph (M) of paragraph (2) of this subsection
2501	2501	24 shall not be eligible for the deduction provided under
2502	2502	25 this subparagraph (O);
2503	2503	26 (P) An amount equal to the amount of the deduction
2504	2504
2505	2505
2506	2506
2507	2507
2508	2508
2509	2509	SB1906 - 69 - LRB103 05197 HLH 50213 b
2510	2510
2511	2511
2512	2512	SB1906- 70 -LRB103 05197 HLH 50213 b SB1906 - 70 - LRB103 05197 HLH 50213 b
2513	2513	SB1906 - 70 - LRB103 05197 HLH 50213 b
2514	2514	1 used to compute the federal income tax credit for
2515	2515	2 restoration of substantial amounts held under claim of
2516	2516	3 right for the taxable year pursuant to Section 1341 of
2517	2517	4 the Internal Revenue Code;
2518	2518	5 (Q) For taxable year 1999 and thereafter, an
2519	2519	6 amount equal to the amount of any (i) distributions,
2520	2520	7 to the extent includible in gross income for federal
2521	2521	8 income tax purposes, made to the taxpayer because of
2522	2522	9 his or her status as a victim of persecution for racial
2523	2523	10 or religious reasons by Nazi Germany or any other Axis
2524	2524	11 regime or as an heir of the victim and (ii) items of
2525	2525	12 income, to the extent includible in gross income for
2526	2526	13 federal income tax purposes, attributable to, derived
2527	2527	14 from or in any way related to assets stolen from,
2528	2528	15 hidden from, or otherwise lost to a victim of
2529	2529	16 persecution for racial or religious reasons by Nazi
2530	2530	17 Germany or any other Axis regime immediately prior to,
2531	2531	18 during, and immediately after World War II, including,
2532	2532	19 but not limited to, interest on the proceeds
2533	2533	20 receivable as insurance under policies issued to a
2534	2534	21 victim of persecution for racial or religious reasons
2535	2535	22 by Nazi Germany or any other Axis regime by European
2536	2536	23 insurance companies immediately prior to and during
2537	2537	24 World War II; provided, however, this subtraction from
2538	2538	25 federal adjusted gross income does not apply to assets
2539	2539	26 acquired with such assets or with the proceeds from
2540	2540
2541	2541
2542	2542
2543	2543
2544	2544
2545	2545	SB1906 - 70 - LRB103 05197 HLH 50213 b
2546	2546
2547	2547
2548	2548	SB1906- 71 -LRB103 05197 HLH 50213 b SB1906 - 71 - LRB103 05197 HLH 50213 b
2549	2549	SB1906 - 71 - LRB103 05197 HLH 50213 b
2550	2550	1 the sale of such assets; provided, further, this
2551	2551	2 paragraph shall only apply to a taxpayer who was the
2552	2552	3 first recipient of such assets after their recovery
2553	2553	4 and who is a victim of persecution for racial or
2554	2554	5 religious reasons by Nazi Germany or any other Axis
2555	2555	6 regime or as an heir of the victim. The amount of and
2556	2556	7 the eligibility for any public assistance, benefit, or
2557	2557	8 similar entitlement is not affected by the inclusion
2558	2558	9 of items (i) and (ii) of this paragraph in gross income
2559	2559	10 for federal income tax purposes. This paragraph is
2560	2560	11 exempt from the provisions of Section 250;
2561	2561	12 (R) For taxable years 2001 and thereafter, for the
2562	2562	13 taxable year in which the bonus depreciation deduction
2563	2563	14 is taken on the taxpayer's federal income tax return
2564	2564	15 under subsection (k) of Section 168 of the Internal
2565	2565	16 Revenue Code and for each applicable taxable year
2566	2566	17 thereafter, an amount equal to "x", where:
2567	2567	18 (1) "y" equals the amount of the depreciation
2568	2568	19 deduction taken for the taxable year on the
2569	2569	20 taxpayer's federal income tax return on property
2570	2570	21 for which the bonus depreciation deduction was
2571	2571	22 taken in any year under subsection (k) of Section
2572	2572	23 168 of the Internal Revenue Code, but not
2573	2573	24 including the bonus depreciation deduction;
2574	2574	25 (2) for taxable years ending on or before
2575	2575	26 December 31, 2005, "x" equals "y" multiplied by 30
2576	2576
2577	2577
2578	2578
2579	2579
2580	2580
2581	2581	SB1906 - 71 - LRB103 05197 HLH 50213 b
2582	2582
2583	2583
2584	2584	SB1906- 72 -LRB103 05197 HLH 50213 b SB1906 - 72 - LRB103 05197 HLH 50213 b
2585	2585	SB1906 - 72 - LRB103 05197 HLH 50213 b
2586	2586	1 and then divided by 70 (or "y" multiplied by
2587	2587	2 0.429); and
2588	2588	3 (3) for taxable years ending after December
2589	2589	4 31, 2005:
2590	2590	5 (i) for property on which a bonus
2591	2591	6 depreciation deduction of 30% of the adjusted
2592	2592	7 basis was taken, "x" equals "y" multiplied by
2593	2593	8 30 and then divided by 70 (or "y" multiplied
2594	2594	9 by 0.429);
2595	2595	10 (ii) for property on which a bonus
2596	2596	11 depreciation deduction of 50% of the adjusted
2597	2597	12 basis was taken, "x" equals "y" multiplied by
2598	2598	13 1.0;
2599	2599	14 (iii) for property on which a bonus
2600	2600	15 depreciation deduction of 100% of the adjusted
2601	2601	16 basis was taken in a taxable year ending on or
2602	2602	17 after December 31, 2021, "x" equals the
2603	2603	18 depreciation deduction that would be allowed
2604	2604	19 on that property if the taxpayer had made the
2605	2605	20 election under Section 168(k)(7) of the
2606	2606	21 Internal Revenue Code to not claim bonus
2607	2607	22 depreciation on that property; and
2608	2608	23 (iv) for property on which a bonus
2609	2609	24 depreciation deduction of a percentage other
2610	2610	25 than 30%, 50% or 100% of the adjusted basis
2611	2611	26 was taken in a taxable year ending on or after
2612	2612
2613	2613
2614	2614
2615	2615
2616	2616
2617	2617	SB1906 - 72 - LRB103 05197 HLH 50213 b
2618	2618
2619	2619
2620	2620	SB1906- 73 -LRB103 05197 HLH 50213 b SB1906 - 73 - LRB103 05197 HLH 50213 b
2621	2621	SB1906 - 73 - LRB103 05197 HLH 50213 b
2622	2622	1 December 31, 2021, "x" equals "y" multiplied
2623	2623	2 by 100 times the percentage bonus depreciation
2624	2624	3 on the property (that is, 100(bonus%)) and
2625	2625	4 then divided by 100 times 1 minus the
2626	2626	5 percentage bonus depreciation on the property
2627	2627	6 (that is, 100(1bonus%)).
2628	2628	7 The aggregate amount deducted under this
2629	2629	8 subparagraph in all taxable years for any one piece of
2630	2630	9 property may not exceed the amount of the bonus
2631	2631	10 depreciation deduction taken on that property on the
2632	2632	11 taxpayer's federal income tax return under subsection
2633	2633	12 (k) of Section 168 of the Internal Revenue Code. This
2634	2634	13 subparagraph (R) is exempt from the provisions of
2635	2635	14 Section 250;
2636	2636	15 (S) If the taxpayer sells, transfers, abandons, or
2637	2637	16 otherwise disposes of property for which the taxpayer
2638	2638	17 was required in any taxable year to make an addition
2639	2639	18 modification under subparagraph (G-10), then an amount
2640	2640	19 equal to that addition modification.
2641	2641	20 If the taxpayer continues to own property through
2642	2642	21 the last day of the last tax year for which a
2643	2643	22 subtraction is allowed with respect to that property
2644	2644	23 under subparagraph (R) and for which the taxpayer was
2645	2645	24 required in any taxable year to make an addition
2646	2646	25 modification under subparagraph (G-10), then an amount
2647	2647	26 equal to that addition modification.
2648	2648
2649	2649
2650	2650
2651	2651
2652	2652
2653	2653	SB1906 - 73 - LRB103 05197 HLH 50213 b
2654	2654
2655	2655
2656	2656	SB1906- 74 -LRB103 05197 HLH 50213 b SB1906 - 74 - LRB103 05197 HLH 50213 b
2657	2657	SB1906 - 74 - LRB103 05197 HLH 50213 b
2658	2658	1 The taxpayer is allowed to take the deduction
2659	2659	2 under this subparagraph only once with respect to any
2660	2660	3 one piece of property.
2661	2661	4 This subparagraph (S) is exempt from the
2662	2662	5 provisions of Section 250;
2663	2663	6 (T) The amount of (i) any interest income (net of
2664	2664	7 the deductions allocable thereto) taken into account
2665	2665	8 for the taxable year with respect to a transaction
2666	2666	9 with a taxpayer that is required to make an addition
2667	2667	10 modification with respect to such transaction under
2668	2668	11 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
2669	2669	12 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
2670	2670	13 the amount of such addition modification and (ii) any
2671	2671	14 income from intangible property (net of the deductions
2672	2672	15 allocable thereto) taken into account for the taxable
2673	2673	16 year with respect to a transaction with a taxpayer
2674	2674	17 that is required to make an addition modification with
2675	2675	18 respect to such transaction under Section
2676	2676	19 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
2677	2677	20 203(d)(2)(D-8), but not to exceed the amount of such
2678	2678	21 addition modification. This subparagraph (T) is exempt
2679	2679	22 from the provisions of Section 250;
2680	2680	23 (U) An amount equal to the interest income taken
2681	2681	24 into account for the taxable year (net of the
2682	2682	25 deductions allocable thereto) with respect to
2683	2683	26 transactions with (i) a foreign person who would be a
2684	2684
2685	2685
2686	2686
2687	2687
2688	2688
2689	2689	SB1906 - 74 - LRB103 05197 HLH 50213 b
2690	2690
2691	2691
2692	2692	SB1906- 75 -LRB103 05197 HLH 50213 b SB1906 - 75 - LRB103 05197 HLH 50213 b
2693	2693	SB1906 - 75 - LRB103 05197 HLH 50213 b
2694	2694	1 member of the taxpayer's unitary business group but
2695	2695	2 for the fact the foreign person's business activity
2696	2696	3 outside the United States is 80% or more of that
2697	2697	4 person's total business activity and (ii) for taxable
2698	2698	5 years ending on or after December 31, 2008, to a person
2699	2699	6 who would be a member of the same unitary business
2700	2700	7 group but for the fact that the person is prohibited
2701	2701	8 under Section 1501(a)(27) from being included in the
2702	2702	9 unitary business group because he or she is ordinarily
2703	2703	10 required to apportion business income under different
2704	2704	11 subsections of Section 304, but not to exceed the
2705	2705	12 addition modification required to be made for the same
2706	2706	13 taxable year under Section 203(c)(2)(G-12) for
2707	2707	14 interest paid, accrued, or incurred, directly or
2708	2708	15 indirectly, to the same person. This subparagraph (U)
2709	2709	16 is exempt from the provisions of Section 250;
2710	2710	17 (V) An amount equal to the income from intangible
2711	2711	18 property taken into account for the taxable year (net
2712	2712	19 of the deductions allocable thereto) with respect to
2713	2713	20 transactions with (i) a foreign person who would be a
2714	2714	21 member of the taxpayer's unitary business group but
2715	2715	22 for the fact that the foreign person's business
2716	2716	23 activity outside the United States is 80% or more of
2717	2717	24 that person's total business activity and (ii) for
2718	2718	25 taxable years ending on or after December 31, 2008, to
2719	2719	26 a person who would be a member of the same unitary
2720	2720
2721	2721
2722	2722
2723	2723
2724	2724
2725	2725	SB1906 - 75 - LRB103 05197 HLH 50213 b
2726	2726
2727	2727
2728	2728	SB1906- 76 -LRB103 05197 HLH 50213 b SB1906 - 76 - LRB103 05197 HLH 50213 b
2729	2729	SB1906 - 76 - LRB103 05197 HLH 50213 b
2730	2730	1 business group but for the fact that the person is
2731	2731	2 prohibited under Section 1501(a)(27) from being
2732	2732	3 included in the unitary business group because he or
2733	2733	4 she is ordinarily required to apportion business
2734	2734	5 income under different subsections of Section 304, but
2735	2735	6 not to exceed the addition modification required to be
2736	2736	7 made for the same taxable year under Section
2737	2737	8 203(c)(2)(G-13) for intangible expenses and costs
2738	2738	9 paid, accrued, or incurred, directly or indirectly, to
2739	2739	10 the same foreign person. This subparagraph (V) is
2740	2740	11 exempt from the provisions of Section 250;
2741	2741	12 (W) in the case of an estate, an amount equal to
2742	2742	13 all amounts included in such total pursuant to the
2743	2743	14 provisions of Section 111 of the Internal Revenue Code
2744	2744	15 as a recovery of items previously deducted by the
2745	2745	16 decedent from adjusted gross income in the computation
2746	2746	17 of taxable income. This subparagraph (W) is exempt
2747	2747	18 from Section 250;
2748	2748	19 (X) an amount equal to the refund included in such
2749	2749	20 total of any tax deducted for federal income tax
2750	2750	21 purposes, to the extent that deduction was added back
2751	2751	22 under subparagraph (F). This subparagraph (X) is
2752	2752	23 exempt from the provisions of Section 250;
2753	2753	24 (Y) For taxable years ending on or after December
2754	2754	25 31, 2011, in the case of a taxpayer who was required to
2755	2755	26 add back any insurance premiums under Section
2756	2756
2757	2757
2758	2758
2759	2759
2760	2760
2761	2761	SB1906 - 76 - LRB103 05197 HLH 50213 b
2762	2762
2763	2763
2764	2764	SB1906- 77 -LRB103 05197 HLH 50213 b SB1906 - 77 - LRB103 05197 HLH 50213 b
2765	2765	SB1906 - 77 - LRB103 05197 HLH 50213 b
2766	2766	1 203(c)(2)(G-14), such taxpayer may elect to subtract
2767	2767	2 that part of a reimbursement received from the
2768	2768	3 insurance company equal to the amount of the expense
2769	2769	4 or loss (including expenses incurred by the insurance
2770	2770	5 company) that would have been taken into account as a
2771	2771	6 deduction for federal income tax purposes if the
2772	2772	7 expense or loss had been uninsured. If a taxpayer
2773	2773	8 makes the election provided for by this subparagraph
2774	2774	9 (Y), the insurer to which the premiums were paid must
2775	2775	10 add back to income the amount subtracted by the
2776	2776	11 taxpayer pursuant to this subparagraph (Y). This
2777	2777	12 subparagraph (Y) is exempt from the provisions of
2778	2778	13 Section 250; and
2779	2779	14 (Z) For taxable years beginning after December 31,
2780	2780	15 2018 and before January 1, 2026, the amount of excess
2781	2781	16 business loss of the taxpayer disallowed as a
2782	2782	17 deduction by Section 461(l)(1)(B) of the Internal
2783	2783	18 Revenue Code.
2784	2784	19 (3) Limitation. The amount of any modification
2785	2785	20 otherwise required under this subsection shall, under
2786	2786	21 regulations prescribed by the Department, be adjusted by
2787	2787	22 any amounts included therein which were properly paid,
2788	2788	23 credited, or required to be distributed, or permanently
2789	2789	24 set aside for charitable purposes pursuant to Internal
2790	2790	25 Revenue Code Section 642(c) during the taxable year.
2791	2791
2792	2792
2793	2793
2794	2794
2795	2795
2796	2796	SB1906 - 77 - LRB103 05197 HLH 50213 b
2797	2797
2798	2798
2799	2799	SB1906- 78 -LRB103 05197 HLH 50213 b SB1906 - 78 - LRB103 05197 HLH 50213 b
2800	2800	SB1906 - 78 - LRB103 05197 HLH 50213 b
2801	2801	1 (d) Partnerships.
2802	2802	2 (1) In general. In the case of a partnership, base
2803	2803	3 income means an amount equal to the taxpayer's taxable
2804	2804	4 income for the taxable year as modified by paragraph (2).
2805	2805	5 (2) Modifications. The taxable income referred to in
2806	2806	6 paragraph (1) shall be modified by adding thereto the sum
2807	2807	7 of the following amounts:
2808	2808	8 (A) An amount equal to all amounts paid or accrued
2809	2809	9 to the taxpayer as interest or dividends during the
2810	2810	10 taxable year to the extent excluded from gross income
2811	2811	11 in the computation of taxable income;
2812	2812	12 (B) An amount equal to the amount of tax imposed by
2813	2813	13 this Act to the extent deducted from gross income for
2814	2814	14 the taxable year;
2815	2815	15 (C) The amount of deductions allowed to the
2816	2816	16 partnership pursuant to Section 707 (c) of the
2817	2817	17 Internal Revenue Code in calculating its taxable
2818	2818	18 income;
2819	2819	19 (D) An amount equal to the amount of the capital
2820	2820	20 gain deduction allowable under the Internal Revenue
2821	2821	21 Code, to the extent deducted from gross income in the
2822	2822	22 computation of taxable income;
2823	2823	23 (D-5) For taxable years 2001 and thereafter, an
2824	2824	24 amount equal to the bonus depreciation deduction taken
2825	2825	25 on the taxpayer's federal income tax return for the
2826	2826	26 taxable year under subsection (k) of Section 168 of
2827	2827
2828	2828
2829	2829
2830	2830
2831	2831
2832	2832	SB1906 - 78 - LRB103 05197 HLH 50213 b
2833	2833
2834	2834
2835	2835	SB1906- 79 -LRB103 05197 HLH 50213 b SB1906 - 79 - LRB103 05197 HLH 50213 b
2836	2836	SB1906 - 79 - LRB103 05197 HLH 50213 b
2837	2837	1 the Internal Revenue Code;
2838	2838	2 (D-6) If the taxpayer sells, transfers, abandons,
2839	2839	3 or otherwise disposes of property for which the
2840	2840	4 taxpayer was required in any taxable year to make an
2841	2841	5 addition modification under subparagraph (D-5), then
2842	2842	6 an amount equal to the aggregate amount of the
2843	2843	7 deductions taken in all taxable years under
2844	2844	8 subparagraph (O) with respect to that property.
2845	2845	9 If the taxpayer continues to own property through
2846	2846	10 the last day of the last tax year for which a
2847	2847	11 subtraction is allowed with respect to that property
2848	2848	12 under subparagraph (O) and for which the taxpayer was
2849	2849	13 allowed in any taxable year to make a subtraction
2850	2850	14 modification under subparagraph (O), then an amount
2851	2851	15 equal to that subtraction modification.
2852	2852	16 The taxpayer is required to make the addition
2853	2853	17 modification under this subparagraph only once with
2854	2854	18 respect to any one piece of property;
2855	2855	19 (D-7) An amount equal to the amount otherwise
2856	2856	20 allowed as a deduction in computing base income for
2857	2857	21 interest paid, accrued, or incurred, directly or
2858	2858	22 indirectly, (i) for taxable years ending on or after
2859	2859	23 December 31, 2004, to a foreign person who would be a
2860	2860	24 member of the same unitary business group but for the
2861	2861	25 fact the foreign person's business activity outside
2862	2862	26 the United States is 80% or more of the foreign
2863	2863
2864	2864
2865	2865
2866	2866
2867	2867
2868	2868	SB1906 - 79 - LRB103 05197 HLH 50213 b
2869	2869
2870	2870
2871	2871	SB1906- 80 -LRB103 05197 HLH 50213 b SB1906 - 80 - LRB103 05197 HLH 50213 b
2872	2872	SB1906 - 80 - LRB103 05197 HLH 50213 b
2873	2873	1 person's total business activity and (ii) for taxable
2874	2874	2 years ending on or after December 31, 2008, to a person
2875	2875	3 who would be a member of the same unitary business
2876	2876	4 group but for the fact that the person is prohibited
2877	2877	5 under Section 1501(a)(27) from being included in the
2878	2878	6 unitary business group because he or she is ordinarily
2879	2879	7 required to apportion business income under different
2880	2880	8 subsections of Section 304. The addition modification
2881	2881	9 required by this subparagraph shall be reduced to the
2882	2882	10 extent that dividends were included in base income of
2883	2883	11 the unitary group for the same taxable year and
2884	2884	12 received by the taxpayer or by a member of the
2885	2885	13 taxpayer's unitary business group (including amounts
2886	2886	14 included in gross income pursuant to Sections 951
2887	2887	15 through 964 of the Internal Revenue Code and amounts
2888	2888	16 included in gross income under Section 78 of the
2889	2889	17 Internal Revenue Code) with respect to the stock of
2890	2890	18 the same person to whom the interest was paid,
2891	2891	19 accrued, or incurred.
2892	2892	20 This paragraph shall not apply to the following:
2893	2893	21 (i) an item of interest paid, accrued, or
2894	2894	22 incurred, directly or indirectly, to a person who
2895	2895	23 is subject in a foreign country or state, other
2896	2896	24 than a state which requires mandatory unitary
2897	2897	25 reporting, to a tax on or measured by net income
2898	2898	26 with respect to such interest; or
2899	2899
2900	2900
2901	2901
2902	2902
2903	2903
2904	2904	SB1906 - 80 - LRB103 05197 HLH 50213 b
2905	2905
2906	2906
2907	2907	SB1906- 81 -LRB103 05197 HLH 50213 b SB1906 - 81 - LRB103 05197 HLH 50213 b
2908	2908	SB1906 - 81 - LRB103 05197 HLH 50213 b
2909	2909	1 (ii) an item of interest paid, accrued, or
2910	2910	2 incurred, directly or indirectly, to a person if
2911	2911	3 the taxpayer can establish, based on a
2912	2912	4 preponderance of the evidence, both of the
2913	2913	5 following:
2914	2914	6 (a) the person, during the same taxable
2915	2915	7 year, paid, accrued, or incurred, the interest
2916	2916	8 to a person that is not a related member, and
2917	2917	9 (b) the transaction giving rise to the
2918	2918	10 interest expense between the taxpayer and the
2919	2919	11 person did not have as a principal purpose the
2920	2920	12 avoidance of Illinois income tax, and is paid
2921	2921	13 pursuant to a contract or agreement that
2922	2922	14 reflects an arm's-length interest rate and
2923	2923	15 terms; or
2924	2924	16 (iii) the taxpayer can establish, based on
2925	2925	17 clear and convincing evidence, that the interest
2926	2926	18 paid, accrued, or incurred relates to a contract
2927	2927	19 or agreement entered into at arm's-length rates
2928	2928	20 and terms and the principal purpose for the
2929	2929	21 payment is not federal or Illinois tax avoidance;
2930	2930	22 or
2931	2931	23 (iv) an item of interest paid, accrued, or
2932	2932	24 incurred, directly or indirectly, to a person if
2933	2933	25 the taxpayer establishes by clear and convincing
2934	2934	26 evidence that the adjustments are unreasonable; or
2935	2935
2936	2936
2937	2937
2938	2938
2939	2939
2940	2940	SB1906 - 81 - LRB103 05197 HLH 50213 b
2941	2941
2942	2942
2943	2943	SB1906- 82 -LRB103 05197 HLH 50213 b SB1906 - 82 - LRB103 05197 HLH 50213 b
2944	2944	SB1906 - 82 - LRB103 05197 HLH 50213 b
2945	2945	1 if the taxpayer and the Director agree in writing
2946	2946	2 to the application or use of an alternative method
2947	2947	3 of apportionment under Section 304(f).
2948	2948	4 Nothing in this subsection shall preclude the
2949	2949	5 Director from making any other adjustment
2950	2950	6 otherwise allowed under Section 404 of this Act
2951	2951	7 for any tax year beginning after the effective
2952	2952	8 date of this amendment provided such adjustment is
2953	2953	9 made pursuant to regulation adopted by the
2954	2954	10 Department and such regulations provide methods
2955	2955	11 and standards by which the Department will utilize
2956	2956	12 its authority under Section 404 of this Act; and
2957	2957	13 (D-8) An amount equal to the amount of intangible
2958	2958	14 expenses and costs otherwise allowed as a deduction in
2959	2959	15 computing base income, and that were paid, accrued, or
2960	2960	16 incurred, directly or indirectly, (i) for taxable
2961	2961	17 years ending on or after December 31, 2004, to a
2962	2962	18 foreign person who would be a member of the same
2963	2963	19 unitary business group but for the fact that the
2964	2964	20 foreign person's business activity outside the United
2965	2965	21 States is 80% or more of that person's total business
2966	2966	22 activity and (ii) for taxable years ending on or after
2967	2967	23 December 31, 2008, to a person who would be a member of
2968	2968	24 the same unitary business group but for the fact that
2969	2969	25 the person is prohibited under Section 1501(a)(27)
2970	2970	26 from being included in the unitary business group
2971	2971
2972	2972
2973	2973
2974	2974
2975	2975
2976	2976	SB1906 - 82 - LRB103 05197 HLH 50213 b
2977	2977
2978	2978
2979	2979	SB1906- 83 -LRB103 05197 HLH 50213 b SB1906 - 83 - LRB103 05197 HLH 50213 b
2980	2980	SB1906 - 83 - LRB103 05197 HLH 50213 b
2981	2981	1 because he or she is ordinarily required to apportion
2982	2982	2 business income under different subsections of Section
2983	2983	3 304. The addition modification required by this
2984	2984	4 subparagraph shall be reduced to the extent that
2985	2985	5 dividends were included in base income of the unitary
2986	2986	6 group for the same taxable year and received by the
2987	2987	7 taxpayer or by a member of the taxpayer's unitary
2988	2988	8 business group (including amounts included in gross
2989	2989	9 income pursuant to Sections 951 through 964 of the
2990	2990	10 Internal Revenue Code and amounts included in gross
2991	2991	11 income under Section 78 of the Internal Revenue Code)
2992	2992	12 with respect to the stock of the same person to whom
2993	2993	13 the intangible expenses and costs were directly or
2994	2994	14 indirectly paid, incurred or accrued. The preceding
2995	2995	15 sentence shall not apply to the extent that the same
2996	2996	16 dividends caused a reduction to the addition
2997	2997	17 modification required under Section 203(d)(2)(D-7) of
2998	2998	18 this Act. As used in this subparagraph, the term
2999	2999	19 "intangible expenses and costs" includes (1) expenses,
3000	3000	20 losses, and costs for, or related to, the direct or
3001	3001	21 indirect acquisition, use, maintenance or management,
3002	3002	22 ownership, sale, exchange, or any other disposition of
3003	3003	23 intangible property; (2) losses incurred, directly or
3004	3004	24 indirectly, from factoring transactions or discounting
3005	3005	25 transactions; (3) royalty, patent, technical, and
3006	3006	26 copyright fees; (4) licensing fees; and (5) other
3007	3007
3008	3008
3009	3009
3010	3010
3011	3011
3012	3012	SB1906 - 83 - LRB103 05197 HLH 50213 b
3013	3013
3014	3014
3015	3015	SB1906- 84 -LRB103 05197 HLH 50213 b SB1906 - 84 - LRB103 05197 HLH 50213 b
3016	3016	SB1906 - 84 - LRB103 05197 HLH 50213 b
3017	3017	1 similar expenses and costs. For purposes of this
3018	3018	2 subparagraph, "intangible property" includes patents,
3019	3019	3 patent applications, trade names, trademarks, service
3020	3020	4 marks, copyrights, mask works, trade secrets, and
3021	3021	5 similar types of intangible assets;
3022	3022	6 This paragraph shall not apply to the following:
3023	3023	7 (i) any item of intangible expenses or costs
3024	3024	8 paid, accrued, or incurred, directly or
3025	3025	9 indirectly, from a transaction with a person who
3026	3026	10 is subject in a foreign country or state, other
3027	3027	11 than a state which requires mandatory unitary
3028	3028	12 reporting, to a tax on or measured by net income
3029	3029	13 with respect to such item; or
3030	3030	14 (ii) any item of intangible expense or cost
3031	3031	15 paid, accrued, or incurred, directly or
3032	3032	16 indirectly, if the taxpayer can establish, based
3033	3033	17 on a preponderance of the evidence, both of the
3034	3034	18 following:
3035	3035	19 (a) the person during the same taxable
3036	3036	20 year paid, accrued, or incurred, the
3037	3037	21 intangible expense or cost to a person that is
3038	3038	22 not a related member, and
3039	3039	23 (b) the transaction giving rise to the
3040	3040	24 intangible expense or cost between the
3041	3041	25 taxpayer and the person did not have as a
3042	3042	26 principal purpose the avoidance of Illinois
3043	3043
3044	3044
3045	3045
3046	3046
3047	3047
3048	3048	SB1906 - 84 - LRB103 05197 HLH 50213 b
3049	3049
3050	3050
3051	3051	SB1906- 85 -LRB103 05197 HLH 50213 b SB1906 - 85 - LRB103 05197 HLH 50213 b
3052	3052	SB1906 - 85 - LRB103 05197 HLH 50213 b
3053	3053	1 income tax, and is paid pursuant to a contract
3054	3054	2 or agreement that reflects arm's-length terms;
3055	3055	3 or
3056	3056	4 (iii) any item of intangible expense or cost
3057	3057	5 paid, accrued, or incurred, directly or
3058	3058	6 indirectly, from a transaction with a person if
3059	3059	7 the taxpayer establishes by clear and convincing
3060	3060	8 evidence, that the adjustments are unreasonable;
3061	3061	9 or if the taxpayer and the Director agree in
3062	3062	10 writing to the application or use of an
3063	3063	11 alternative method of apportionment under Section
3064	3064	12 304(f);
3065	3065	13 Nothing in this subsection shall preclude the
3066	3066	14 Director from making any other adjustment
3067	3067	15 otherwise allowed under Section 404 of this Act
3068	3068	16 for any tax year beginning after the effective
3069	3069	17 date of this amendment provided such adjustment is
3070	3070	18 made pursuant to regulation adopted by the
3071	3071	19 Department and such regulations provide methods
3072	3072	20 and standards by which the Department will utilize
3073	3073	21 its authority under Section 404 of this Act;
3074	3074	22 (D-9) For taxable years ending on or after
3075	3075	23 December 31, 2008, an amount equal to the amount of
3076	3076	24 insurance premium expenses and costs otherwise allowed
3077	3077	25 as a deduction in computing base income, and that were
3078	3078	26 paid, accrued, or incurred, directly or indirectly, to
3079	3079
3080	3080
3081	3081
3082	3082
3083	3083
3084	3084	SB1906 - 85 - LRB103 05197 HLH 50213 b
3085	3085
3086	3086
3087	3087	SB1906- 86 -LRB103 05197 HLH 50213 b SB1906 - 86 - LRB103 05197 HLH 50213 b
3088	3088	SB1906 - 86 - LRB103 05197 HLH 50213 b
3089	3089	1 a person who would be a member of the same unitary
3090	3090	2 business group but for the fact that the person is
3091	3091	3 prohibited under Section 1501(a)(27) from being
3092	3092	4 included in the unitary business group because he or
3093	3093	5 she is ordinarily required to apportion business
3094	3094	6 income under different subsections of Section 304. The
3095	3095	7 addition modification required by this subparagraph
3096	3096	8 shall be reduced to the extent that dividends were
3097	3097	9 included in base income of the unitary group for the
3098	3098	10 same taxable year and received by the taxpayer or by a
3099	3099	11 member of the taxpayer's unitary business group
3100	3100	12 (including amounts included in gross income under
3101	3101	13 Sections 951 through 964 of the Internal Revenue Code
3102	3102	14 and amounts included in gross income under Section 78
3103	3103	15 of the Internal Revenue Code) with respect to the
3104	3104	16 stock of the same person to whom the premiums and costs
3105	3105	17 were directly or indirectly paid, incurred, or
3106	3106	18 accrued. The preceding sentence does not apply to the
3107	3107	19 extent that the same dividends caused a reduction to
3108	3108	20 the addition modification required under Section
3109	3109	21 203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act;
3110	3110	22 (D-10) An amount equal to the credit allowable to
3111	3111	23 the taxpayer under Section 218(a) of this Act,
3112	3112	24 determined without regard to Section 218(c) of this
3113	3113	25 Act;
3114	3114	26 (D-11) For taxable years ending on or after
3115	3115
3116	3116
3117	3117
3118	3118
3119	3119
3120	3120	SB1906 - 86 - LRB103 05197 HLH 50213 b
3121	3121
3122	3122
3123	3123	SB1906- 87 -LRB103 05197 HLH 50213 b SB1906 - 87 - LRB103 05197 HLH 50213 b
3124	3124	SB1906 - 87 - LRB103 05197 HLH 50213 b
3125	3125	1 December 31, 2017, an amount equal to the deduction
3126	3126	2 allowed under Section 199 of the Internal Revenue Code
3127	3127	3 for the taxable year;
3128	3128	4 and by deducting from the total so obtained the following
3129	3129	5 amounts:
3130	3130	6 (E) The valuation limitation amount;
3131	3131	7 (F) An amount equal to the amount of any tax
3132	3132	8 imposed by this Act which was refunded to the taxpayer
3133	3133	9 and included in such total for the taxable year;
3134	3134	10 (G) An amount equal to all amounts included in
3135	3135	11 taxable income as modified by subparagraphs (A), (B),
3136	3136	12 (C) and (D) which are exempt from taxation by this
3137	3137	13 State either by reason of its statutes or Constitution
3138	3138	14 or by reason of the Constitution, treaties or statutes
3139	3139	15 of the United States; provided that, in the case of any
3140	3140	16 statute of this State that exempts income derived from
3141	3141	17 bonds or other obligations from the tax imposed under
3142	3142	18 this Act, the amount exempted shall be the interest
3143	3143	19 net of bond premium amortization;
3144	3144	20 (H) Any income of the partnership which
3145	3145	21 constitutes personal service income as defined in
3146	3146	22 Section 1348(b)(1) of the Internal Revenue Code (as in
3147	3147	23 effect December 31, 1981) or a reasonable allowance
3148	3148	24 for compensation paid or accrued for services rendered
3149	3149	25 by partners to the partnership, whichever is greater;
3150	3150	26 this subparagraph (H) is exempt from the provisions of
3151	3151
3152	3152
3153	3153
3154	3154
3155	3155
3156	3156	SB1906 - 87 - LRB103 05197 HLH 50213 b
3157	3157
3158	3158
3159	3159	SB1906- 88 -LRB103 05197 HLH 50213 b SB1906 - 88 - LRB103 05197 HLH 50213 b
3160	3160	SB1906 - 88 - LRB103 05197 HLH 50213 b
3161	3161	1 Section 250;
3162	3162	2 (I) An amount equal to all amounts of income
3163	3163	3 distributable to an entity subject to the Personal
3164	3164	4 Property Tax Replacement Income Tax imposed by
3165	3165	5 subsections (c) and (d) of Section 201 of this Act
3166	3166	6 including amounts distributable to organizations
3167	3167	7 exempt from federal income tax by reason of Section
3168	3168	8 501(a) of the Internal Revenue Code; this subparagraph
3169	3169	9 (I) is exempt from the provisions of Section 250;
3170	3170	10 (J) With the exception of any amounts subtracted
3171	3171	11 under subparagraph (G), an amount equal to the sum of
3172	3172	12 all amounts disallowed as deductions by (i) Sections
3173	3173	13 171(a)(2) and 265(a)(2) of the Internal Revenue Code,
3174	3174	14 and all amounts of expenses allocable to interest and
3175	3175	15 disallowed as deductions by Section 265(a)(1) of the
3176	3176	16 Internal Revenue Code; and (ii) for taxable years
3177	3177	17 ending on or after August 13, 1999, Sections
3178	3178	18 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
3179	3179	19 Internal Revenue Code, plus, (iii) for taxable years
3180	3180	20 ending on or after December 31, 2011, Section
3181	3181	21 45G(e)(3) of the Internal Revenue Code and, for
3182	3182	22 taxable years ending on or after December 31, 2008,
3183	3183	23 any amount included in gross income under Section 87
3184	3184	24 of the Internal Revenue Code; the provisions of this
3185	3185	25 subparagraph are exempt from the provisions of Section
3186	3186	26 250;
3187	3187
3188	3188
3189	3189
3190	3190
3191	3191
3192	3192	SB1906 - 88 - LRB103 05197 HLH 50213 b
3193	3193
3194	3194
3195	3195	SB1906- 89 -LRB103 05197 HLH 50213 b SB1906 - 89 - LRB103 05197 HLH 50213 b
3196	3196	SB1906 - 89 - LRB103 05197 HLH 50213 b
3197	3197	1 (K) An amount equal to those dividends included in
3198	3198	2 such total which were paid by a corporation which
3199	3199	3 conducts business operations in a River Edge
3200	3200	4 Redevelopment Zone or zones created under the River
3201	3201	5 Edge Redevelopment Zone Act and conducts substantially
3202	3202	6 all of its operations from a River Edge Redevelopment
3203	3203	7 Zone or zones. This subparagraph (K) is exempt from
3204	3204	8 the provisions of Section 250;
3205	3205	9 (L) An amount equal to any contribution made to a
3206	3206	10 job training project established pursuant to the Real
3207	3207	11 Property Tax Increment Allocation Redevelopment Act;
3208	3208	12 (M) An amount equal to those dividends included in
3209	3209	13 such total that were paid by a corporation that
3210	3210	14 conducts business operations in a federally designated
3211	3211	15 Foreign Trade Zone or Sub-Zone and that is designated
3212	3212	16 a High Impact Business located in Illinois; provided
3213	3213	17 that dividends eligible for the deduction provided in
3214	3214	18 subparagraph (K) of paragraph (2) of this subsection
3215	3215	19 shall not be eligible for the deduction provided under
3216	3216	20 this subparagraph (M);
3217	3217	21 (N) An amount equal to the amount of the deduction
3218	3218	22 used to compute the federal income tax credit for
3219	3219	23 restoration of substantial amounts held under claim of
3220	3220	24 right for the taxable year pursuant to Section 1341 of
3221	3221	25 the Internal Revenue Code;
3222	3222	26 (O) For taxable years 2001 and thereafter, for the
3223	3223
3224	3224
3225	3225
3226	3226
3227	3227
3228	3228	SB1906 - 89 - LRB103 05197 HLH 50213 b
3229	3229
3230	3230
3231	3231	SB1906- 90 -LRB103 05197 HLH 50213 b SB1906 - 90 - LRB103 05197 HLH 50213 b
3232	3232	SB1906 - 90 - LRB103 05197 HLH 50213 b
3233	3233	1 taxable year in which the bonus depreciation deduction
3234	3234	2 is taken on the taxpayer's federal income tax return
3235	3235	3 under subsection (k) of Section 168 of the Internal
3236	3236	4 Revenue Code and for each applicable taxable year
3237	3237	5 thereafter, an amount equal to "x", where:
3238	3238	6 (1) "y" equals the amount of the depreciation
3239	3239	7 deduction taken for the taxable year on the
3240	3240	8 taxpayer's federal income tax return on property
3241	3241	9 for which the bonus depreciation deduction was
3242	3242	10 taken in any year under subsection (k) of Section
3243	3243	11 168 of the Internal Revenue Code, but not
3244	3244	12 including the bonus depreciation deduction;
3245	3245	13 (2) for taxable years ending on or before
3246	3246	14 December 31, 2005, "x" equals "y" multiplied by 30
3247	3247	15 and then divided by 70 (or "y" multiplied by
3248	3248	16 0.429); and
3249	3249	17 (3) for taxable years ending after December
3250	3250	18 31, 2005:
3251	3251	19 (i) for property on which a bonus
3252	3252	20 depreciation deduction of 30% of the adjusted
3253	3253	21 basis was taken, "x" equals "y" multiplied by
3254	3254	22 30 and then divided by 70 (or "y" multiplied
3255	3255	23 by 0.429);
3256	3256	24 (ii) for property on which a bonus
3257	3257	25 depreciation deduction of 50% of the adjusted
3258	3258	26 basis was taken, "x" equals "y" multiplied by
3259	3259
3260	3260
3261	3261
3262	3262
3263	3263
3264	3264	SB1906 - 90 - LRB103 05197 HLH 50213 b
3265	3265
3266	3266
3267	3267	SB1906- 91 -LRB103 05197 HLH 50213 b SB1906 - 91 - LRB103 05197 HLH 50213 b
3268	3268	SB1906 - 91 - LRB103 05197 HLH 50213 b
3269	3269	1 1.0;
3270	3270	2 (iii) for property on which a bonus
3271	3271	3 depreciation deduction of 100% of the adjusted
3272	3272	4 basis was taken in a taxable year ending on or
3273	3273	5 after December 31, 2021, "x" equals the
3274	3274	6 depreciation deduction that would be allowed
3275	3275	7 on that property if the taxpayer had made the
3276	3276	8 election under Section 168(k)(7) of the
3277	3277	9 Internal Revenue Code to not claim bonus
3278	3278	10 depreciation on that property; and
3279	3279	11 (iv) for property on which a bonus
3280	3280	12 depreciation deduction of a percentage other
3281	3281	13 than 30%, 50% or 100% of the adjusted basis
3282	3282	14 was taken in a taxable year ending on or after
3283	3283	15 December 31, 2021, "x" equals "y" multiplied
3284	3284	16 by 100 times the percentage bonus depreciation
3285	3285	17 on the property (that is, 100(bonus%)) and
3286	3286	18 then divided by 100 times 1 minus the
3287	3287	19 percentage bonus depreciation on the property
3288	3288	20 (that is, 100(1bonus%)).
3289	3289	21 The aggregate amount deducted under this
3290	3290	22 subparagraph in all taxable years for any one piece of
3291	3291	23 property may not exceed the amount of the bonus
3292	3292	24 depreciation deduction taken on that property on the
3293	3293	25 taxpayer's federal income tax return under subsection
3294	3294	26 (k) of Section 168 of the Internal Revenue Code. This
3295	3295
3296	3296
3297	3297
3298	3298
3299	3299
3300	3300	SB1906 - 91 - LRB103 05197 HLH 50213 b
3301	3301
3302	3302
3303	3303	SB1906- 92 -LRB103 05197 HLH 50213 b SB1906 - 92 - LRB103 05197 HLH 50213 b
3304	3304	SB1906 - 92 - LRB103 05197 HLH 50213 b
3305	3305	1 subparagraph (O) is exempt from the provisions of
3306	3306	2 Section 250;
3307	3307	3 (P) If the taxpayer sells, transfers, abandons, or
3308	3308	4 otherwise disposes of property for which the taxpayer
3309	3309	5 was required in any taxable year to make an addition
3310	3310	6 modification under subparagraph (D-5), then an amount
3311	3311	7 equal to that addition modification.
3312	3312	8 If the taxpayer continues to own property through
3313	3313	9 the last day of the last tax year for which a
3314	3314	10 subtraction is allowed with respect to that property
3315	3315	11 under subparagraph (O) and for which the taxpayer was
3316	3316	12 required in any taxable year to make an addition
3317	3317	13 modification under subparagraph (D-5), then an amount
3318	3318	14 equal to that addition modification.
3319	3319	15 The taxpayer is allowed to take the deduction
3320	3320	16 under this subparagraph only once with respect to any
3321	3321	17 one piece of property.
3322	3322	18 This subparagraph (P) is exempt from the
3323	3323	19 provisions of Section 250;
3324	3324	20 (Q) The amount of (i) any interest income (net of
3325	3325	21 the deductions allocable thereto) taken into account
3326	3326	22 for the taxable year with respect to a transaction
3327	3327	23 with a taxpayer that is required to make an addition
3328	3328	24 modification with respect to such transaction under
3329	3329	25 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
3330	3330	26 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
3331	3331
3332	3332
3333	3333
3334	3334
3335	3335
3336	3336	SB1906 - 92 - LRB103 05197 HLH 50213 b
3337	3337
3338	3338
3339	3339	SB1906- 93 -LRB103 05197 HLH 50213 b SB1906 - 93 - LRB103 05197 HLH 50213 b
3340	3340	SB1906 - 93 - LRB103 05197 HLH 50213 b
3341	3341	1 the amount of such addition modification and (ii) any
3342	3342	2 income from intangible property (net of the deductions
3343	3343	3 allocable thereto) taken into account for the taxable
3344	3344	4 year with respect to a transaction with a taxpayer
3345	3345	5 that is required to make an addition modification with
3346	3346	6 respect to such transaction under Section
3347	3347	7 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
3348	3348	8 203(d)(2)(D-8), but not to exceed the amount of such
3349	3349	9 addition modification. This subparagraph (Q) is exempt
3350	3350	10 from Section 250;
3351	3351	11 (R) An amount equal to the interest income taken
3352	3352	12 into account for the taxable year (net of the
3353	3353	13 deductions allocable thereto) with respect to
3354	3354	14 transactions with (i) a foreign person who would be a
3355	3355	15 member of the taxpayer's unitary business group but
3356	3356	16 for the fact that the foreign person's business
3357	3357	17 activity outside the United States is 80% or more of
3358	3358	18 that person's total business activity and (ii) for
3359	3359	19 taxable years ending on or after December 31, 2008, to
3360	3360	20 a person who would be a member of the same unitary
3361	3361	21 business group but for the fact that the person is
3362	3362	22 prohibited under Section 1501(a)(27) from being
3363	3363	23 included in the unitary business group because he or
3364	3364	24 she is ordinarily required to apportion business
3365	3365	25 income under different subsections of Section 304, but
3366	3366	26 not to exceed the addition modification required to be
3367	3367
3368	3368
3369	3369
3370	3370
3371	3371
3372	3372	SB1906 - 93 - LRB103 05197 HLH 50213 b
3373	3373
3374	3374
3375	3375	SB1906- 94 -LRB103 05197 HLH 50213 b SB1906 - 94 - LRB103 05197 HLH 50213 b
3376	3376	SB1906 - 94 - LRB103 05197 HLH 50213 b
3377	3377	1 made for the same taxable year under Section
3378	3378	2 203(d)(2)(D-7) for interest paid, accrued, or
3379	3379	3 incurred, directly or indirectly, to the same person.
3380	3380	4 This subparagraph (R) is exempt from Section 250;
3381	3381	5 (S) An amount equal to the income from intangible
3382	3382	6 property taken into account for the taxable year (net
3383	3383	7 of the deductions allocable thereto) with respect to
3384	3384	8 transactions with (i) a foreign person who would be a
3385	3385	9 member of the taxpayer's unitary business group but
3386	3386	10 for the fact that the foreign person's business
3387	3387	11 activity outside the United States is 80% or more of
3388	3388	12 that person's total business activity and (ii) for
3389	3389	13 taxable years ending on or after December 31, 2008, to
3390	3390	14 a person who would be a member of the same unitary
3391	3391	15 business group but for the fact that the person is
3392	3392	16 prohibited under Section 1501(a)(27) from being
3393	3393	17 included in the unitary business group because he or
3394	3394	18 she is ordinarily required to apportion business
3395	3395	19 income under different subsections of Section 304, but
3396	3396	20 not to exceed the addition modification required to be
3397	3397	21 made for the same taxable year under Section
3398	3398	22 203(d)(2)(D-8) for intangible expenses and costs paid,
3399	3399	23 accrued, or incurred, directly or indirectly, to the
3400	3400	24 same person. This subparagraph (S) is exempt from
3401	3401	25 Section 250; and
3402	3402	26 (T) For taxable years ending on or after December
3403	3403
3404	3404
3405	3405
3406	3406
3407	3407
3408	3408	SB1906 - 94 - LRB103 05197 HLH 50213 b
3409	3409
3410	3410
3411	3411	SB1906- 95 -LRB103 05197 HLH 50213 b SB1906 - 95 - LRB103 05197 HLH 50213 b
3412	3412	SB1906 - 95 - LRB103 05197 HLH 50213 b
3413	3413	1 31, 2011, in the case of a taxpayer who was required to
3414	3414	2 add back any insurance premiums under Section
3415	3415	3 203(d)(2)(D-9), such taxpayer may elect to subtract
3416	3416	4 that part of a reimbursement received from the
3417	3417	5 insurance company equal to the amount of the expense
3418	3418	6 or loss (including expenses incurred by the insurance
3419	3419	7 company) that would have been taken into account as a
3420	3420	8 deduction for federal income tax purposes if the
3421	3421	9 expense or loss had been uninsured. If a taxpayer
3422	3422	10 makes the election provided for by this subparagraph
3423	3423	11 (T), the insurer to which the premiums were paid must
3424	3424	12 add back to income the amount subtracted by the
3425	3425	13 taxpayer pursuant to this subparagraph (T). This
3426	3426	14 subparagraph (T) is exempt from the provisions of
3427	3427	15 Section 250.
3428	3428	16 (e) Gross income; adjusted gross income; taxable income.
3429	3429	17 (1) In general. Subject to the provisions of paragraph
3430	3430	18 (2) and subsection (b)(3), for purposes of this Section
3431	3431	19 and Section 803(e), a taxpayer's gross income, adjusted
3432	3432	20 gross income, or taxable income for the taxable year shall
3433	3433	21 mean the amount of gross income, adjusted gross income or
3434	3434	22 taxable income properly reportable for federal income tax
3435	3435	23 purposes for the taxable year under the provisions of the
3436	3436	24 Internal Revenue Code. Taxable income may be less than
3437	3437	25 zero. However, for taxable years ending on or after
3438	3438
3439	3439
3440	3440
3441	3441
3442	3442
3443	3443	SB1906 - 95 - LRB103 05197 HLH 50213 b
3444	3444
3445	3445
3446	3446	SB1906- 96 -LRB103 05197 HLH 50213 b SB1906 - 96 - LRB103 05197 HLH 50213 b
3447	3447	SB1906 - 96 - LRB103 05197 HLH 50213 b
3448	3448	1 December 31, 1986, net operating loss carryforwards from
3449	3449	2 taxable years ending prior to December 31, 1986, may not
3450	3450	3 exceed the sum of federal taxable income for the taxable
3451	3451	4 year before net operating loss deduction, plus the excess
3452	3452	5 of addition modifications over subtraction modifications
3453	3453	6 for the taxable year. For taxable years ending prior to
3454	3454	7 December 31, 1986, taxable income may never be an amount
3455	3455	8 in excess of the net operating loss for the taxable year as
3456	3456	9 defined in subsections (c) and (d) of Section 172 of the
3457	3457	10 Internal Revenue Code, provided that when taxable income
3458	3458	11 of a corporation (other than a Subchapter S corporation),
3459	3459	12 trust, or estate is less than zero and addition
3460	3460	13 modifications, other than those provided by subparagraph
3461	3461	14 (E) of paragraph (2) of subsection (b) for corporations or
3462	3462	15 subparagraph (E) of paragraph (2) of subsection (c) for
3463	3463	16 trusts and estates, exceed subtraction modifications, an
3464	3464	17 addition modification must be made under those
3465	3465	18 subparagraphs for any other taxable year to which the
3466	3466	19 taxable income less than zero (net operating loss) is
3467	3467	20 applied under Section 172 of the Internal Revenue Code or
3468	3468	21 under subparagraph (E) of paragraph (2) of this subsection
3469	3469	22 (e) applied in conjunction with Section 172 of the
3470	3470	23 Internal Revenue Code.
3471	3471	24 (2) Special rule. For purposes of paragraph (1) of
3472	3472	25 this subsection, the taxable income properly reportable
3473	3473	26 for federal income tax purposes shall mean:
3474	3474
3475	3475
3476	3476
3477	3477
3478	3478
3479	3479	SB1906 - 96 - LRB103 05197 HLH 50213 b
3480	3480
3481	3481
3482	3482	SB1906- 97 -LRB103 05197 HLH 50213 b SB1906 - 97 - LRB103 05197 HLH 50213 b
3483	3483	SB1906 - 97 - LRB103 05197 HLH 50213 b
3484	3484	1 (A) Certain life insurance companies. In the case
3485	3485	2 of a life insurance company subject to the tax imposed
3486	3486	3 by Section 801 of the Internal Revenue Code, life
3487	3487	4 insurance company taxable income, plus the amount of
3488	3488	5 distribution from pre-1984 policyholder surplus
3489	3489	6 accounts as calculated under Section 815a of the
3490	3490	7 Internal Revenue Code;
3491	3491	8 (B) Certain other insurance companies. In the case
3492	3492	9 of mutual insurance companies subject to the tax
3493	3493	10 imposed by Section 831 of the Internal Revenue Code,
3494	3494	11 insurance company taxable income;
3495	3495	12 (C) Regulated investment companies. In the case of
3496	3496	13 a regulated investment company subject to the tax
3497	3497	14 imposed by Section 852 of the Internal Revenue Code,
3498	3498	15 investment company taxable income;
3499	3499	16 (D) Real estate investment trusts. In the case of
3500	3500	17 a real estate investment trust subject to the tax
3501	3501	18 imposed by Section 857 of the Internal Revenue Code,
3502	3502	19 real estate investment trust taxable income;
3503	3503	20 (E) Consolidated corporations. In the case of a
3504	3504	21 corporation which is a member of an affiliated group
3505	3505	22 of corporations filing a consolidated income tax
3506	3506	23 return for the taxable year for federal income tax
3507	3507	24 purposes, taxable income determined as if such
3508	3508	25 corporation had filed a separate return for federal
3509	3509	26 income tax purposes for the taxable year and each
3510	3510
3511	3511
3512	3512
3513	3513
3514	3514
3515	3515	SB1906 - 97 - LRB103 05197 HLH 50213 b
3516	3516
3517	3517
3518	3518	SB1906- 98 -LRB103 05197 HLH 50213 b SB1906 - 98 - LRB103 05197 HLH 50213 b
3519	3519	SB1906 - 98 - LRB103 05197 HLH 50213 b
3520	3520	1 preceding taxable year for which it was a member of an
3521	3521	2 affiliated group. For purposes of this subparagraph,
3522	3522	3 the taxpayer's separate taxable income shall be
3523	3523	4 determined as if the election provided by Section
3524	3524	5 243(b)(2) of the Internal Revenue Code had been in
3525	3525	6 effect for all such years;
3526	3526	7 (F) Cooperatives. In the case of a cooperative
3527	3527	8 corporation or association, the taxable income of such
3528	3528	9 organization determined in accordance with the
3529	3529	10 provisions of Section 1381 through 1388 of the
3530	3530	11 Internal Revenue Code, but without regard to the
3531	3531	12 prohibition against offsetting losses from patronage
3532	3532	13 activities against income from nonpatronage
3533	3533	14 activities; except that a cooperative corporation or
3534	3534	15 association may make an election to follow its federal
3535	3535	16 income tax treatment of patronage losses and
3536	3536	17 nonpatronage losses. In the event such election is
3537	3537	18 made, such losses shall be computed and carried over
3538	3538	19 in a manner consistent with subsection (a) of Section
3539	3539	20 207 of this Act and apportioned by the apportionment
3540	3540	21 factor reported by the cooperative on its Illinois
3541	3541	22 income tax return filed for the taxable year in which
3542	3542	23 the losses are incurred. The election shall be
3543	3543	24 effective for all taxable years with original returns
3544	3544	25 due on or after the date of the election. In addition,
3545	3545	26 the cooperative may file an amended return or returns,
3546	3546
3547	3547
3548	3548
3549	3549
3550	3550
3551	3551	SB1906 - 98 - LRB103 05197 HLH 50213 b
3552	3552
3553	3553
3554	3554	SB1906- 99 -LRB103 05197 HLH 50213 b SB1906 - 99 - LRB103 05197 HLH 50213 b
3555	3555	SB1906 - 99 - LRB103 05197 HLH 50213 b
3556	3556	1 as allowed under this Act, to provide that the
3557	3557	2 election shall be effective for losses incurred or
3558	3558	3 carried forward for taxable years occurring prior to
3559	3559	4 the date of the election. Once made, the election may
3560	3560	5 only be revoked upon approval of the Director. The
3561	3561	6 Department shall adopt rules setting forth
3562	3562	7 requirements for documenting the elections and any
3563	3563	8 resulting Illinois net loss and the standards to be
3564	3564	9 used by the Director in evaluating requests to revoke
3565	3565	10 elections. Public Act 96-932 is declaratory of
3566	3566	11 existing law;
3567	3567	12 (G) Subchapter S corporations. In the case of: (i)
3568	3568	13 a Subchapter S corporation for which there is in
3569	3569	14 effect an election for the taxable year under Section
3570	3570	15 1362 of the Internal Revenue Code, the taxable income
3571	3571	16 of such corporation determined in accordance with
3572	3572	17 Section 1363(b) of the Internal Revenue Code, except
3573	3573	18 that taxable income shall take into account those
3574	3574	19 items which are required by Section 1363(b)(1) of the
3575	3575	20 Internal Revenue Code to be separately stated; and
3576	3576	21 (ii) a Subchapter S corporation for which there is in
3577	3577	22 effect a federal election to opt out of the provisions
3578	3578	23 of the Subchapter S Revision Act of 1982 and have
3579	3579	24 applied instead the prior federal Subchapter S rules
3580	3580	25 as in effect on July 1, 1982, the taxable income of
3581	3581	26 such corporation determined in accordance with the
3582	3582
3583	3583
3584	3584
3585	3585
3586	3586
3587	3587	SB1906 - 99 - LRB103 05197 HLH 50213 b
3588	3588
3589	3589
3590	3590	SB1906- 100 -LRB103 05197 HLH 50213 b SB1906 - 100 - LRB103 05197 HLH 50213 b
3591	3591	SB1906 - 100 - LRB103 05197 HLH 50213 b
3592	3592	1 federal Subchapter S rules as in effect on July 1,
3593	3593	2 1982; and
3594	3594	3 (H) Partnerships. In the case of a partnership,
3595	3595	4 taxable income determined in accordance with Section
3596	3596	5 703 of the Internal Revenue Code, except that taxable
3597	3597	6 income shall take into account those items which are
3598	3598	7 required by Section 703(a)(1) to be separately stated
3599	3599	8 but which would be taken into account by an individual
3600	3600	9 in calculating his taxable income.
3601	3601	10 (3) Recapture of business expenses on disposition of
3602	3602	11 asset or business. Notwithstanding any other law to the
3603	3603	12 contrary, if in prior years income from an asset or
3604	3604	13 business has been classified as business income and in a
3605	3605	14 later year is demonstrated to be non-business income, then
3606	3606	15 all expenses, without limitation, deducted in such later
3607	3607	16 year and in the 2 immediately preceding taxable years
3608	3608	17 related to that asset or business that generated the
3609	3609	18 non-business income shall be added back and recaptured as
3610	3610	19 business income in the year of the disposition of the
3611	3611	20 asset or business. Such amount shall be apportioned to
3612	3612	21 Illinois using the greater of the apportionment fraction
3613	3613	22 computed for the business under Section 304 of this Act
3614	3614	23 for the taxable year or the average of the apportionment
3615	3615	24 fractions computed for the business under Section 304 of
3616	3616	25 this Act for the taxable year and for the 2 immediately
3617	3617	26 preceding taxable years.
3618	3618
3619	3619
3620	3620
3621	3621
3622	3622
3623	3623	SB1906 - 100 - LRB103 05197 HLH 50213 b
3624	3624
3625	3625
3626	3626	SB1906- 101 -LRB103 05197 HLH 50213 b SB1906 - 101 - LRB103 05197 HLH 50213 b
3627	3627	SB1906 - 101 - LRB103 05197 HLH 50213 b
3628	3628	1 (f) Valuation limitation amount.
3629	3629	2 (1) In general. The valuation limitation amount
3630	3630	3 referred to in subsections (a)(2)(G), (c)(2)(I) and
3631	3631	4 (d)(2)(E) is an amount equal to:
3632	3632	5 (A) The sum of the pre-August 1, 1969 appreciation
3633	3633	6 amounts (to the extent consisting of gain reportable
3634	3634	7 under the provisions of Section 1245 or 1250 of the
3635	3635	8 Internal Revenue Code) for all property in respect of
3636	3636	9 which such gain was reported for the taxable year;
3637	3637	10 plus
3638	3638	11 (B) The lesser of (i) the sum of the pre-August 1,
3639	3639	12 1969 appreciation amounts (to the extent consisting of
3640	3640	13 capital gain) for all property in respect of which
3641	3641	14 such gain was reported for federal income tax purposes
3642	3642	15 for the taxable year, or (ii) the net capital gain for
3643	3643	16 the taxable year, reduced in either case by any amount
3644	3644	17 of such gain included in the amount determined under
3645	3645	18 subsection (a)(2)(F) or (c)(2)(H).
3646	3646	19 (2) Pre-August 1, 1969 appreciation amount.
3647	3647	20 (A) If the fair market value of property referred
3648	3648	21 to in paragraph (1) was readily ascertainable on
3649	3649	22 August 1, 1969, the pre-August 1, 1969 appreciation
3650	3650	23 amount for such property is the lesser of (i) the
3651	3651	24 excess of such fair market value over the taxpayer's
3652	3652	25 basis (for determining gain) for such property on that
3653	3653
3654	3654
3655	3655
3656	3656
3657	3657
3658	3658	SB1906 - 101 - LRB103 05197 HLH 50213 b
3659	3659
3660	3660
3661	3661	SB1906- 102 -LRB103 05197 HLH 50213 b SB1906 - 102 - LRB103 05197 HLH 50213 b
3662	3662	SB1906 - 102 - LRB103 05197 HLH 50213 b
3663	3663	1 date (determined under the Internal Revenue Code as in
3664	3664	2 effect on that date), or (ii) the total gain realized
3665	3665	3 and reportable for federal income tax purposes in
3666	3666	4 respect of the sale, exchange or other disposition of
3667	3667	5 such property.
3668	3668	6 (B) If the fair market value of property referred
3669	3669	7 to in paragraph (1) was not readily ascertainable on
3670	3670	8 August 1, 1969, the pre-August 1, 1969 appreciation
3671	3671	9 amount for such property is that amount which bears
3672	3672	10 the same ratio to the total gain reported in respect of
3673	3673	11 the property for federal income tax purposes for the
3674	3674	12 taxable year, as the number of full calendar months in
3675	3675	13 that part of the taxpayer's holding period for the
3676	3676	14 property ending July 31, 1969 bears to the number of
3677	3677	15 full calendar months in the taxpayer's entire holding
3678	3678	16 period for the property.
3679	3679	17 (C) The Department shall prescribe such
3680	3680	18 regulations as may be necessary to carry out the
3681	3681	19 purposes of this paragraph.
3682	3682	20 (g) Double deductions. Unless specifically provided
3683	3683	21 otherwise, nothing in this Section shall permit the same item
3684	3684	22 to be deducted more than once.
3685	3685	23 (g-5) For taxable years beginning on or after January 1,
3686	3686	24 2024, in calculating the taxpayer's base income, the
3687	3687	25 taxpayer's federal adjusted gross income shall also be
3688	3688
3689	3689
3690	3690
3691	3691
3692	3692
3693	3693	SB1906 - 102 - LRB103 05197 HLH 50213 b
3694	3694
3695	3695
3696	3696	SB1906- 103 -LRB103 05197 HLH 50213 b SB1906 - 103 - LRB103 05197 HLH 50213 b
3697	3697	SB1906 - 103 - LRB103 05197 HLH 50213 b
3698	3698	1 modified to exclude (i) the portion of income or loss that is
3699	3699	2 received from a trade or business conducted within and without
3700	3700	3 Illinois and that is not derived from or connected with
3701	3701	4 Illinois sources as determined in the provisions in Article 3
3702	3702	5 of this Act and (ii) the portion of income or loss that is
3703	3703	6 received from a pass-through entity conducting business within
3704	3704	7 and without Illinois and that is not derived from or connected
3705	3705	8 with Illinois sources as determined in the provisions in
3706	3706	9 Article 3 of this Act. This subsection (g-5) is exempt from the
3707	3707	10 provisions of Section 250.
3708	3708	11 (h) Legislative intention. Except as expressly provided by
3709	3709	12 this Section there shall be no modifications or limitations on
3710	3710	13 the amounts of income, gain, loss or deduction taken into
3711	3711	14 account in determining gross income, adjusted gross income or
3712	3712	15 taxable income for federal income tax purposes for the taxable
3713	3713	16 year, or in the amount of such items entering into the
3714	3714	17 computation of base income and net income under this Act for
3715	3715	18 such taxable year, whether in respect of property values as of
3716	3716	19 August 1, 1969 or otherwise.
3717	3717	20 (Source: P.A. 101-9, eff. 6-5-19; 101-81, eff. 7-12-19;
3718	3718	21 102-16, eff. 6-17-21; 102-558, eff. 8-20-21; 102-658, eff.
3719	3719	22 8-27-21; 102-813, eff. 5-13-22.)
3720	3720	23 Section 99. Effective date. This Act takes effect upon
3721	3721	24 becoming law.
3722	3722
3723	3723
3724	3724
3725	3725
3726	3726
3727	3727	SB1906 - 103 - LRB103 05197 HLH 50213 b