Illinois 2023-2024 Regular Session

Illinois Senate Bill SB2105 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 SB2105 Introduced 2/9/2023, by Sen. Robert F. Martwick SYNOPSIS AS INTRODUCED: 35 ILCS 5/201 35 ILCS 5/201.3 new Amends the Illinois Income Tax Act. Amends the Illinois Income Tax Act. Sets forth a schedule of income-based tax rates for individuals, trusts, and estates for taxable years beginning on or after January 1, 2024. LRB103 29118 HLH 55504 b A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB2105 Introduced 2/9/2023, by Sen. Robert F. Martwick SYNOPSIS AS INTRODUCED: 35 ILCS 5/201 35 ILCS 5/201.3 new 35 ILCS 5/201 35 ILCS 5/201.3 new Amends the Illinois Income Tax Act. Amends the Illinois Income Tax Act. Sets forth a schedule of income-based tax rates for individuals, trusts, and estates for taxable years beginning on or after January 1, 2024. LRB103 29118 HLH 55504 b LRB103 29118 HLH 55504 b A BILL FOR
2	2	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB2105 Introduced 2/9/2023, by Sen. Robert F. Martwick SYNOPSIS AS INTRODUCED:
3	3	35 ILCS 5/201 35 ILCS 5/201.3 new 35 ILCS 5/201 35 ILCS 5/201.3 new
4	4	35 ILCS 5/201
5	5	35 ILCS 5/201.3 new
6	6	Amends the Illinois Income Tax Act. Amends the Illinois Income Tax Act. Sets forth a schedule of income-based tax rates for individuals, trusts, and estates for taxable years beginning on or after January 1, 2024.
7	7	LRB103 29118 HLH 55504 b LRB103 29118 HLH 55504 b
8	8	LRB103 29118 HLH 55504 b
9	9	A BILL FOR
10	10	SB2105LRB103 29118 HLH 55504 b SB2105 LRB103 29118 HLH 55504 b
11	11	SB2105 LRB103 29118 HLH 55504 b
12	12	1 AN ACT concerning revenue.
13	13	2 Be it enacted by the People of the State of Illinois,
14	14	3 represented in the General Assembly:
15	15	4 Section 5. The Illinois Income Tax Act is amended by
16	16	5 changing Sections 201, 208, 502, and 901 and by adding
17	17	6 Sections 201.3 and 234 as follows:
18	18	7 (35 ILCS 5/201)
19	19	8 Sec. 201. Tax imposed.
20	20	9 (a) In general. A tax measured by net income is hereby
21	21	10 imposed on every individual, corporation, trust and estate for
22	22	11 each taxable year ending after July 31, 1969 on the privilege
23	23	12 of earning or receiving income in or as a resident of this
24	24	13 State. Such tax shall be in addition to all other occupation or
25	25	14 privilege taxes imposed by this State or by any municipal
26	26	15 corporation or political subdivision thereof.
27	27	16 (b) Rates. The tax imposed by subsection (a) of this
28	28	17 Section shall be determined as follows, except as adjusted by
29	29	18 subsection (d-1):
30	30	19 (1) In the case of an individual, trust or estate, for
31	31	20 taxable years ending prior to July 1, 1989, an amount
32	32	21 equal to 2 1/2% of the taxpayer's net income for the
33	33	22 taxable year.
34	34	23 (2) In the case of an individual, trust or estate, for
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38	38	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB2105 Introduced 2/9/2023, by Sen. Robert F. Martwick SYNOPSIS AS INTRODUCED:
39	39	35 ILCS 5/201 35 ILCS 5/201.3 new 35 ILCS 5/201 35 ILCS 5/201.3 new
40	40	35 ILCS 5/201
41	41	35 ILCS 5/201.3 new
42	42	Amends the Illinois Income Tax Act. Amends the Illinois Income Tax Act. Sets forth a schedule of income-based tax rates for individuals, trusts, and estates for taxable years beginning on or after January 1, 2024.
43	43	LRB103 29118 HLH 55504 b LRB103 29118 HLH 55504 b
44	44	LRB103 29118 HLH 55504 b
45	45	A BILL FOR
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51	51	35 ILCS 5/201
52	52	35 ILCS 5/201.3 new
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71	71	1 taxable years beginning prior to July 1, 1989 and ending
72	72	2 after June 30, 1989, an amount equal to the sum of (i) 2
73	73	3 1/2% of the taxpayer's net income for the period prior to
74	74	4 July 1, 1989, as calculated under Section 202.3, and (ii)
75	75	5 3% of the taxpayer's net income for the period after June
76	76	6 30, 1989, as calculated under Section 202.3.
77	77	7 (3) In the case of an individual, trust or estate, for
78	78	8 taxable years beginning after June 30, 1989, and ending
79	79	9 prior to January 1, 2011, an amount equal to 3% of the
80	80	10 taxpayer's net income for the taxable year.
81	81	11 (4) In the case of an individual, trust, or estate,
82	82	12 for taxable years beginning prior to January 1, 2011, and
83	83	13 ending after December 31, 2010, an amount equal to the sum
84	84	14 of (i) 3% of the taxpayer's net income for the period prior
85	85	15 to January 1, 2011, as calculated under Section 202.5, and
86	86	16 (ii) 5% of the taxpayer's net income for the period after
87	87	17 December 31, 2010, as calculated under Section 202.5.
88	88	18 (5) In the case of an individual, trust, or estate,
89	89	19 for taxable years beginning on or after January 1, 2011,
90	90	20 and ending prior to January 1, 2015, an amount equal to 5%
91	91	21 of the taxpayer's net income for the taxable year.
92	92	22 (5.1) In the case of an individual, trust, or estate,
93	93	23 for taxable years beginning prior to January 1, 2015, and
94	94	24 ending after December 31, 2014, an amount equal to the sum
95	95	25 of (i) 5% of the taxpayer's net income for the period prior
96	96	26 to January 1, 2015, as calculated under Section 202.5, and
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107	107	1 (ii) 3.75% of the taxpayer's net income for the period
108	108	2 after December 31, 2014, as calculated under Section
109	109	3 202.5.
110	110	4 (5.2) In the case of an individual, trust, or estate,
111	111	5 for taxable years beginning on or after January 1, 2015,
112	112	6 and ending prior to July 1, 2017, an amount equal to 3.75%
113	113	7 of the taxpayer's net income for the taxable year.
114	114	8 (5.3) In the case of an individual, trust, or estate,
115	115	9 for taxable years beginning prior to July 1, 2017, and
116	116	10 ending after June 30, 2017, an amount equal to the sum of
117	117	11 (i) 3.75% of the taxpayer's net income for the period
118	118	12 prior to July 1, 2017, as calculated under Section 202.5,
119	119	13 and (ii) 4.95% of the taxpayer's net income for the period
120	120	14 after June 30, 2017, as calculated under Section 202.5.
121	121	15 (5.4) In the case of an individual, trust, or estate,
122	122	16 for taxable years beginning on or after July 1, 2017 and
123	123	17 beginning prior to January 1, 2024, an amount equal to
124	124	18 4.95% of the taxpayer's net income for the taxable year.
125	125	19 (5.5) In the case of an individual, trust, or estate,
126	126	20 for taxable years beginning on or after January 1, 2024,
127	127	21 an amount calculated under the rate structure set forth in
128	128	22 Section 201.3.
129	129	23 (6) In the case of a corporation, for taxable years
130	130	24 ending prior to July 1, 1989, an amount equal to 4% of the
131	131	25 taxpayer's net income for the taxable year.
132	132	26 (7) In the case of a corporation, for taxable years
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143	143	1 beginning prior to July 1, 1989 and ending after June 30,
144	144	2 1989, an amount equal to the sum of (i) 4% of the
145	145	3 taxpayer's net income for the period prior to July 1,
146	146	4 1989, as calculated under Section 202.3, and (ii) 4.8% of
147	147	5 the taxpayer's net income for the period after June 30,
148	148	6 1989, as calculated under Section 202.3.
149	149	7 (8) In the case of a corporation, for taxable years
150	150	8 beginning after June 30, 1989, and ending prior to January
151	151	9 1, 2011, an amount equal to 4.8% of the taxpayer's net
152	152	10 income for the taxable year.
153	153	11 (9) In the case of a corporation, for taxable years
154	154	12 beginning prior to January 1, 2011, and ending after
155	155	13 December 31, 2010, an amount equal to the sum of (i) 4.8%
156	156	14 of the taxpayer's net income for the period prior to
157	157	15 January 1, 2011, as calculated under Section 202.5, and
158	158	16 (ii) 7% of the taxpayer's net income for the period after
159	159	17 December 31, 2010, as calculated under Section 202.5.
160	160	18 (10) In the case of a corporation, for taxable years
161	161	19 beginning on or after January 1, 2011, and ending prior to
162	162	20 January 1, 2015, an amount equal to 7% of the taxpayer's
163	163	21 net income for the taxable year.
164	164	22 (11) In the case of a corporation, for taxable years
165	165	23 beginning prior to January 1, 2015, and ending after
166	166	24 December 31, 2014, an amount equal to the sum of (i) 7% of
167	167	25 the taxpayer's net income for the period prior to January
168	168	26 1, 2015, as calculated under Section 202.5, and (ii) 5.25%
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179	179	1 of the taxpayer's net income for the period after December
180	180	2 31, 2014, as calculated under Section 202.5.
181	181	3 (12) In the case of a corporation, for taxable years
182	182	4 beginning on or after January 1, 2015, and ending prior to
183	183	5 July 1, 2017, an amount equal to 5.25% of the taxpayer's
184	184	6 net income for the taxable year.
185	185	7 (13) In the case of a corporation, for taxable years
186	186	8 beginning prior to July 1, 2017, and ending after June 30,
187	187	9 2017, an amount equal to the sum of (i) 5.25% of the
188	188	10 taxpayer's net income for the period prior to July 1,
189	189	11 2017, as calculated under Section 202.5, and (ii) 7% of
190	190	12 the taxpayer's net income for the period after June 30,
191	191	13 2017, as calculated under Section 202.5.
192	192	14 (14) In the case of a corporation, for taxable years
193	193	15 beginning on or after July 1, 2017, an amount equal to 7%
194	194	16 of the taxpayer's net income for the taxable year.
195	195	17
196	196	18 The rates under this subsection (b) are subject to the
197	197	19 provisions of Section 201.5.
198	198	20 (b-5) Surcharge; sale or exchange of assets, properties,
199	199	21 and intangibles of organization gaming licensees. For each of
200	200	22 taxable years 2019 through 2027, a surcharge is imposed on all
201	201	23 taxpayers on income arising from the sale or exchange of
202	202	24 capital assets, depreciable business property, real property
203	203	25 used in the trade or business, and Section 197 intangibles (i)
204	204	26 of an organization licensee under the Illinois Horse Racing
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215	215	1 Act of 1975 and (ii) of an organization gaming licensee under
216	216	2 the Illinois Gambling Act. The amount of the surcharge is
217	217	3 equal to the amount of federal income tax liability for the
218	218	4 taxable year attributable to those sales and exchanges. The
219	219	5 surcharge imposed shall not apply if:
220	220	6 (1) the organization gaming license, organization
221	221	7 license, or racetrack property is transferred as a result
222	222	8 of any of the following:
223	223	9 (A) bankruptcy, a receivership, or a debt
224	224	10 adjustment initiated by or against the initial
225	225	11 licensee or the substantial owners of the initial
226	226	12 licensee;
227	227	13 (B) cancellation, revocation, or termination of
228	228	14 any such license by the Illinois Gaming Board or the
229	229	15 Illinois Racing Board;
230	230	16 (C) a determination by the Illinois Gaming Board
231	231	17 that transfer of the license is in the best interests
232	232	18 of Illinois gaming;
233	233	19 (D) the death of an owner of the equity interest in
234	234	20 a licensee;
235	235	21 (E) the acquisition of a controlling interest in
236	236	22 the stock or substantially all of the assets of a
237	237	23 publicly traded company;
238	238	24 (F) a transfer by a parent company to a wholly
239	239	25 owned subsidiary; or
240	240	26 (G) the transfer or sale to or by one person to
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251	251	1 another person where both persons were initial owners
252	252	2 of the license when the license was issued; or
253	253	3 (2) the controlling interest in the organization
254	254	4 gaming license, organization license, or racetrack
255	255	5 property is transferred in a transaction to lineal
256	256	6 descendants in which no gain or loss is recognized or as a
257	257	7 result of a transaction in accordance with Section 351 of
258	258	8 the Internal Revenue Code in which no gain or loss is
259	259	9 recognized; or
260	260	10 (3) live horse racing was not conducted in 2010 at a
261	261	11 racetrack located within 3 miles of the Mississippi River
262	262	12 under a license issued pursuant to the Illinois Horse
263	263	13 Racing Act of 1975.
264	264	14 The transfer of an organization gaming license,
265	265	15 organization license, or racetrack property by a person other
266	266	16 than the initial licensee to receive the organization gaming
267	267	17 license is not subject to a surcharge. The Department shall
268	268	18 adopt rules necessary to implement and administer this
269	269	19 subsection.
270	270	20 (c) Personal Property Tax Replacement Income Tax.
271	271	21 Beginning on July 1, 1979 and thereafter, in addition to such
272	272	22 income tax, there is also hereby imposed the Personal Property
273	273	23 Tax Replacement Income Tax measured by net income on every
274	274	24 corporation (including Subchapter S corporations), partnership
275	275	25 and trust, for each taxable year ending after June 30, 1979.
276	276	26 Such taxes are imposed on the privilege of earning or
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287	287	1 receiving income in or as a resident of this State. The
288	288	2 Personal Property Tax Replacement Income Tax shall be in
289	289	3 addition to the income tax imposed by subsections (a) and (b)
290	290	4 of this Section and in addition to all other occupation or
291	291	5 privilege taxes imposed by this State or by any municipal
292	292	6 corporation or political subdivision thereof.
293	293	7 (d) Additional Personal Property Tax Replacement Income
294	294	8 Tax Rates. The personal property tax replacement income tax
295	295	9 imposed by this subsection and subsection (c) of this Section
296	296	10 in the case of a corporation, other than a Subchapter S
297	297	11 corporation and except as adjusted by subsection (d-1), shall
298	298	12 be an additional amount equal to 2.85% of such taxpayer's net
299	299	13 income for the taxable year, except that beginning on January
300	300	14 1, 1981, and thereafter, the rate of 2.85% specified in this
301	301	15 subsection shall be reduced to 2.5%, and in the case of a
302	302	16 partnership, trust or a Subchapter S corporation shall be an
303	303	17 additional amount equal to 1.5% of such taxpayer's net income
304	304	18 for the taxable year.
305	305	19 (d-1) Rate reduction for certain foreign insurers. In the
306	306	20 case of a foreign insurer, as defined by Section 35A-5 of the
307	307	21 Illinois Insurance Code, whose state or country of domicile
308	308	22 imposes on insurers domiciled in Illinois a retaliatory tax
309	309	23 (excluding any insurer whose premiums from reinsurance assumed
310	310	24 are 50% or more of its total insurance premiums as determined
311	311	25 under paragraph (2) of subsection (b) of Section 304, except
312	312	26 that for purposes of this determination premiums from
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323	323	1 reinsurance do not include premiums from inter-affiliate
324	324	2 reinsurance arrangements), beginning with taxable years ending
325	325	3 on or after December 31, 1999, the sum of the rates of tax
326	326	4 imposed by subsections (b) and (d) shall be reduced (but not
327	327	5 increased) to the rate at which the total amount of tax imposed
328	328	6 under this Act, net of all credits allowed under this Act,
329	329	7 shall equal (i) the total amount of tax that would be imposed
330	330	8 on the foreign insurer's net income allocable to Illinois for
331	331	9 the taxable year by such foreign insurer's state or country of
332	332	10 domicile if that net income were subject to all income taxes
333	333	11 and taxes measured by net income imposed by such foreign
334	334	12 insurer's state or country of domicile, net of all credits
335	335	13 allowed or (ii) a rate of zero if no such tax is imposed on
336	336	14 such income by the foreign insurer's state of domicile. For
337	337	15 the purposes of this subsection (d-1), an inter-affiliate
338	338	16 includes a mutual insurer under common management.
339	339	17 (1) For the purposes of subsection (d-1), in no event
340	340	18 shall the sum of the rates of tax imposed by subsections
341	341	19 (b) and (d) be reduced below the rate at which the sum of:
342	342	20 (A) the total amount of tax imposed on such
343	343	21 foreign insurer under this Act for a taxable year, net
344	344	22 of all credits allowed under this Act, plus
345	345	23 (B) the privilege tax imposed by Section 409 of
346	346	24 the Illinois Insurance Code, the fire insurance
347	347	25 company tax imposed by Section 12 of the Fire
348	348	26 Investigation Act, and the fire department taxes
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359	359	1 imposed under Section 11-10-1 of the Illinois
360	360	2 Municipal Code,
361	361	3 equals 1.25% for taxable years ending prior to December
362	362	4 31, 2003, or 1.75% for taxable years ending on or after
363	363	5 December 31, 2003, of the net taxable premiums written for
364	364	6 the taxable year, as described by subsection (1) of
365	365	7 Section 409 of the Illinois Insurance Code. This paragraph
366	366	8 will in no event increase the rates imposed under
367	367	9 subsections (b) and (d).
368	368	10 (2) Any reduction in the rates of tax imposed by this
369	369	11 subsection shall be applied first against the rates
370	370	12 imposed by subsection (b) and only after the tax imposed
371	371	13 by subsection (a) net of all credits allowed under this
372	372	14 Section other than the credit allowed under subsection (i)
373	373	15 has been reduced to zero, against the rates imposed by
374	374	16 subsection (d).
375	375	17 This subsection (d-1) is exempt from the provisions of
376	376	18 Section 250.
377	377	19 (e) Investment credit. A taxpayer shall be allowed a
378	378	20 credit against the Personal Property Tax Replacement Income
379	379	21 Tax for investment in qualified property.
380	380	22 (1) A taxpayer shall be allowed a credit equal to .5%
381	381	23 of the basis of qualified property placed in service
382	382	24 during the taxable year, provided such property is placed
383	383	25 in service on or after July 1, 1984. There shall be allowed
384	384	26 an additional credit equal to .5% of the basis of
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395	395	1 qualified property placed in service during the taxable
396	396	2 year, provided such property is placed in service on or
397	397	3 after July 1, 1986, and the taxpayer's base employment
398	398	4 within Illinois has increased by 1% or more over the
399	399	5 preceding year as determined by the taxpayer's employment
400	400	6 records filed with the Illinois Department of Employment
401	401	7 Security. Taxpayers who are new to Illinois shall be
402	402	8 deemed to have met the 1% growth in base employment for the
403	403	9 first year in which they file employment records with the
404	404	10 Illinois Department of Employment Security. The provisions
405	405	11 added to this Section by Public Act 85-1200 (and restored
406	406	12 by Public Act 87-895) shall be construed as declaratory of
407	407	13 existing law and not as a new enactment. If, in any year,
408	408	14 the increase in base employment within Illinois over the
409	409	15 preceding year is less than 1%, the additional credit
410	410	16 shall be limited to that percentage times a fraction, the
411	411	17 numerator of which is .5% and the denominator of which is
412	412	18 1%, but shall not exceed .5%. The investment credit shall
413	413	19 not be allowed to the extent that it would reduce a
414	414	20 taxpayer's liability in any tax year below zero, nor may
415	415	21 any credit for qualified property be allowed for any year
416	416	22 other than the year in which the property was placed in
417	417	23 service in Illinois. For tax years ending on or after
418	418	24 December 31, 1987, and on or before December 31, 1988, the
419	419	25 credit shall be allowed for the tax year in which the
420	420	26 property is placed in service, or, if the amount of the
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431	431	1 credit exceeds the tax liability for that year, whether it
432	432	2 exceeds the original liability or the liability as later
433	433	3 amended, such excess may be carried forward and applied to
434	434	4 the tax liability of the 5 taxable years following the
435	435	5 excess credit years if the taxpayer (i) makes investments
436	436	6 which cause the creation of a minimum of 2,000 full-time
437	437	7 equivalent jobs in Illinois, (ii) is located in an
438	438	8 enterprise zone established pursuant to the Illinois
439	439	9 Enterprise Zone Act and (iii) is certified by the
440	440	10 Department of Commerce and Community Affairs (now
441	441	11 Department of Commerce and Economic Opportunity) as
442	442	12 complying with the requirements specified in clause (i)
443	443	13 and (ii) by July 1, 1986. The Department of Commerce and
444	444	14 Community Affairs (now Department of Commerce and Economic
445	445	15 Opportunity) shall notify the Department of Revenue of all
446	446	16 such certifications immediately. For tax years ending
447	447	17 after December 31, 1988, the credit shall be allowed for
448	448	18 the tax year in which the property is placed in service,
449	449	19 or, if the amount of the credit exceeds the tax liability
450	450	20 for that year, whether it exceeds the original liability
451	451	21 or the liability as later amended, such excess may be
452	452	22 carried forward and applied to the tax liability of the 5
453	453	23 taxable years following the excess credit years. The
454	454	24 credit shall be applied to the earliest year for which
455	455	25 there is a liability. If there is credit from more than one
456	456	26 tax year that is available to offset a liability, earlier
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467	467	1 credit shall be applied first.
468	468	2 (2) The term "qualified property" means property
469	469	3 which:
470	470	4 (A) is tangible, whether new or used, including
471	471	5 buildings and structural components of buildings and
472	472	6 signs that are real property, but not including land
473	473	7 or improvements to real property that are not a
474	474	8 structural component of a building such as
475	475	9 landscaping, sewer lines, local access roads, fencing,
476	476	10 parking lots, and other appurtenances;
477	477	11 (B) is depreciable pursuant to Section 167 of the
478	478	12 Internal Revenue Code, except that "3-year property"
479	479	13 as defined in Section 168(c)(2)(A) of that Code is not
480	480	14 eligible for the credit provided by this subsection
481	481	15 (e);
482	482	16 (C) is acquired by purchase as defined in Section
483	483	17 179(d) of the Internal Revenue Code;
484	484	18 (D) is used in Illinois by a taxpayer who is
485	485	19 primarily engaged in manufacturing, or in mining coal
486	486	20 or fluorite, or in retailing, or was placed in service
487	487	21 on or after July 1, 2006 in a River Edge Redevelopment
488	488	22 Zone established pursuant to the River Edge
489	489	23 Redevelopment Zone Act; and
490	490	24 (E) has not previously been used in Illinois in
491	491	25 such a manner and by such a person as would qualify for
492	492	26 the credit provided by this subsection (e) or
493	493
494	494
495	495
496	496
497	497
498	498	SB2105 - 13 - LRB103 29118 HLH 55504 b
499	499
500	500
501	501	SB2105- 14 -LRB103 29118 HLH 55504 b SB2105 - 14 - LRB103 29118 HLH 55504 b
502	502	SB2105 - 14 - LRB103 29118 HLH 55504 b
503	503	1 subsection (f).
504	504	2 (3) For purposes of this subsection (e),
505	505	3 "manufacturing" means the material staging and production
506	506	4 of tangible personal property by procedures commonly
507	507	5 regarded as manufacturing, processing, fabrication, or
508	508	6 assembling which changes some existing material into new
509	509	7 shapes, new qualities, or new combinations. For purposes
510	510	8 of this subsection (e) the term "mining" shall have the
511	511	9 same meaning as the term "mining" in Section 613(c) of the
512	512	10 Internal Revenue Code. For purposes of this subsection
513	513	11 (e), the term "retailing" means the sale of tangible
514	514	12 personal property for use or consumption and not for
515	515	13 resale, or services rendered in conjunction with the sale
516	516	14 of tangible personal property for use or consumption and
517	517	15 not for resale. For purposes of this subsection (e),
518	518	16 "tangible personal property" has the same meaning as when
519	519	17 that term is used in the Retailers' Occupation Tax Act,
520	520	18 and, for taxable years ending after December 31, 2008,
521	521	19 does not include the generation, transmission, or
522	522	20 distribution of electricity.
523	523	21 (4) The basis of qualified property shall be the basis
524	524	22 used to compute the depreciation deduction for federal
525	525	23 income tax purposes.
526	526	24 (5) If the basis of the property for federal income
527	527	25 tax depreciation purposes is increased after it has been
528	528	26 placed in service in Illinois by the taxpayer, the amount
529	529
530	530
531	531
532	532
533	533
534	534	SB2105 - 14 - LRB103 29118 HLH 55504 b
535	535
536	536
537	537	SB2105- 15 -LRB103 29118 HLH 55504 b SB2105 - 15 - LRB103 29118 HLH 55504 b
538	538	SB2105 - 15 - LRB103 29118 HLH 55504 b
539	539	1 of such increase shall be deemed property placed in
540	540	2 service on the date of such increase in basis.
541	541	3 (6) The term "placed in service" shall have the same
542	542	4 meaning as under Section 46 of the Internal Revenue Code.
543	543	5 (7) If during any taxable year, any property ceases to
544	544	6 be qualified property in the hands of the taxpayer within
545	545	7 48 months after being placed in service, or the situs of
546	546	8 any qualified property is moved outside Illinois within 48
547	547	9 months after being placed in service, the Personal
548	548	10 Property Tax Replacement Income Tax for such taxable year
549	549	11 shall be increased. Such increase shall be determined by
550	550	12 (i) recomputing the investment credit which would have
551	551	13 been allowed for the year in which credit for such
552	552	14 property was originally allowed by eliminating such
553	553	15 property from such computation and, (ii) subtracting such
554	554	16 recomputed credit from the amount of credit previously
555	555	17 allowed. For the purposes of this paragraph (7), a
556	556	18 reduction of the basis of qualified property resulting
557	557	19 from a redetermination of the purchase price shall be
558	558	20 deemed a disposition of qualified property to the extent
559	559	21 of such reduction.
560	560	22 (8) Unless the investment credit is extended by law,
561	561	23 the basis of qualified property shall not include costs
562	562	24 incurred after December 31, 2018, except for costs
563	563	25 incurred pursuant to a binding contract entered into on or
564	564	26 before December 31, 2018.
565	565
566	566
567	567
568	568
569	569
570	570	SB2105 - 15 - LRB103 29118 HLH 55504 b
571	571
572	572
573	573	SB2105- 16 -LRB103 29118 HLH 55504 b SB2105 - 16 - LRB103 29118 HLH 55504 b
574	574	SB2105 - 16 - LRB103 29118 HLH 55504 b
575	575	1 (9) Each taxable year ending before December 31, 2000,
576	576	2 a partnership may elect to pass through to its partners
577	577	3 the credits to which the partnership is entitled under
578	578	4 this subsection (e) for the taxable year. A partner may
579	579	5 use the credit allocated to him or her under this
580	580	6 paragraph only against the tax imposed in subsections (c)
581	581	7 and (d) of this Section. If the partnership makes that
582	582	8 election, those credits shall be allocated among the
583	583	9 partners in the partnership in accordance with the rules
584	584	10 set forth in Section 704(b) of the Internal Revenue Code,
585	585	11 and the rules promulgated under that Section, and the
586	586	12 allocated amount of the credits shall be allowed to the
587	587	13 partners for that taxable year. The partnership shall make
588	588	14 this election on its Personal Property Tax Replacement
589	589	15 Income Tax return for that taxable year. The election to
590	590	16 pass through the credits shall be irrevocable.
591	591	17 For taxable years ending on or after December 31,
592	592	18 2000, a partner that qualifies its partnership for a
593	593	19 subtraction under subparagraph (I) of paragraph (2) of
594	594	20 subsection (d) of Section 203 or a shareholder that
595	595	21 qualifies a Subchapter S corporation for a subtraction
596	596	22 under subparagraph (S) of paragraph (2) of subsection (b)
597	597	23 of Section 203 shall be allowed a credit under this
598	598	24 subsection (e) equal to its share of the credit earned
599	599	25 under this subsection (e) during the taxable year by the
600	600	26 partnership or Subchapter S corporation, determined in
601	601
602	602
603	603
604	604
605	605
606	606	SB2105 - 16 - LRB103 29118 HLH 55504 b
607	607
608	608
609	609	SB2105- 17 -LRB103 29118 HLH 55504 b SB2105 - 17 - LRB103 29118 HLH 55504 b
610	610	SB2105 - 17 - LRB103 29118 HLH 55504 b
611	611	1 accordance with the determination of income and
612	612	2 distributive share of income under Sections 702 and 704
613	613	3 and Subchapter S of the Internal Revenue Code. This
614	614	4 paragraph is exempt from the provisions of Section 250.
615	615	5 (f) Investment credit; Enterprise Zone; River Edge
616	616	6 Redevelopment Zone.
617	617	7 (1) A taxpayer shall be allowed a credit against the
618	618	8 tax imposed by subsections (a) and (b) of this Section for
619	619	9 investment in qualified property which is placed in
620	620	10 service in an Enterprise Zone created pursuant to the
621	621	11 Illinois Enterprise Zone Act or, for property placed in
622	622	12 service on or after July 1, 2006, a River Edge
623	623	13 Redevelopment Zone established pursuant to the River Edge
624	624	14 Redevelopment Zone Act. For partners, shareholders of
625	625	15 Subchapter S corporations, and owners of limited liability
626	626	16 companies, if the liability company is treated as a
627	627	17 partnership for purposes of federal and State income
628	628	18 taxation, there shall be allowed a credit under this
629	629	19 subsection (f) to be determined in accordance with the
630	630	20 determination of income and distributive share of income
631	631	21 under Sections 702 and 704 and Subchapter S of the
632	632	22 Internal Revenue Code. The credit shall be .5% of the
633	633	23 basis for such property. The credit shall be available
634	634	24 only in the taxable year in which the property is placed in
635	635	25 service in the Enterprise Zone or River Edge Redevelopment
636	636	26 Zone and shall not be allowed to the extent that it would
637	637
638	638
639	639
640	640
641	641
642	642	SB2105 - 17 - LRB103 29118 HLH 55504 b
643	643
644	644
645	645	SB2105- 18 -LRB103 29118 HLH 55504 b SB2105 - 18 - LRB103 29118 HLH 55504 b
646	646	SB2105 - 18 - LRB103 29118 HLH 55504 b
647	647	1 reduce a taxpayer's liability for the tax imposed by
648	648	2 subsections (a) and (b) of this Section to below zero. For
649	649	3 tax years ending on or after December 31, 1985, the credit
650	650	4 shall be allowed for the tax year in which the property is
651	651	5 placed in service, or, if the amount of the credit exceeds
652	652	6 the tax liability for that year, whether it exceeds the
653	653	7 original liability or the liability as later amended, such
654	654	8 excess may be carried forward and applied to the tax
655	655	9 liability of the 5 taxable years following the excess
656	656	10 credit year. The credit shall be applied to the earliest
657	657	11 year for which there is a liability. If there is credit
658	658	12 from more than one tax year that is available to offset a
659	659	13 liability, the credit accruing first in time shall be
660	660	14 applied first.
661	661	15 (2) The term qualified property means property which:
662	662	16 (A) is tangible, whether new or used, including
663	663	17 buildings and structural components of buildings;
664	664	18 (B) is depreciable pursuant to Section 167 of the
665	665	19 Internal Revenue Code, except that "3-year property"
666	666	20 as defined in Section 168(c)(2)(A) of that Code is not
667	667	21 eligible for the credit provided by this subsection
668	668	22 (f);
669	669	23 (C) is acquired by purchase as defined in Section
670	670	24 179(d) of the Internal Revenue Code;
671	671	25 (D) is used in the Enterprise Zone or River Edge
672	672	26 Redevelopment Zone by the taxpayer; and
673	673
674	674
675	675
676	676
677	677
678	678	SB2105 - 18 - LRB103 29118 HLH 55504 b
679	679
680	680
681	681	SB2105- 19 -LRB103 29118 HLH 55504 b SB2105 - 19 - LRB103 29118 HLH 55504 b
682	682	SB2105 - 19 - LRB103 29118 HLH 55504 b
683	683	1 (E) has not been previously used in Illinois in
684	684	2 such a manner and by such a person as would qualify for
685	685	3 the credit provided by this subsection (f) or
686	686	4 subsection (e).
687	687	5 (3) The basis of qualified property shall be the basis
688	688	6 used to compute the depreciation deduction for federal
689	689	7 income tax purposes.
690	690	8 (4) If the basis of the property for federal income
691	691	9 tax depreciation purposes is increased after it has been
692	692	10 placed in service in the Enterprise Zone or River Edge
693	693	11 Redevelopment Zone by the taxpayer, the amount of such
694	694	12 increase shall be deemed property placed in service on the
695	695	13 date of such increase in basis.
696	696	14 (5) The term "placed in service" shall have the same
697	697	15 meaning as under Section 46 of the Internal Revenue Code.
698	698	16 (6) If during any taxable year, any property ceases to
699	699	17 be qualified property in the hands of the taxpayer within
700	700	18 48 months after being placed in service, or the situs of
701	701	19 any qualified property is moved outside the Enterprise
702	702	20 Zone or River Edge Redevelopment Zone within 48 months
703	703	21 after being placed in service, the tax imposed under
704	704	22 subsections (a) and (b) of this Section for such taxable
705	705	23 year shall be increased. Such increase shall be determined
706	706	24 by (i) recomputing the investment credit which would have
707	707	25 been allowed for the year in which credit for such
708	708	26 property was originally allowed by eliminating such
709	709
710	710
711	711
712	712
713	713
714	714	SB2105 - 19 - LRB103 29118 HLH 55504 b
715	715
716	716
717	717	SB2105- 20 -LRB103 29118 HLH 55504 b SB2105 - 20 - LRB103 29118 HLH 55504 b
718	718	SB2105 - 20 - LRB103 29118 HLH 55504 b
719	719	1 property from such computation, and (ii) subtracting such
720	720	2 recomputed credit from the amount of credit previously
721	721	3 allowed. For the purposes of this paragraph (6), a
722	722	4 reduction of the basis of qualified property resulting
723	723	5 from a redetermination of the purchase price shall be
724	724	6 deemed a disposition of qualified property to the extent
725	725	7 of such reduction.
726	726	8 (7) There shall be allowed an additional credit equal
727	727	9 to 0.5% of the basis of qualified property placed in
728	728	10 service during the taxable year in a River Edge
729	729	11 Redevelopment Zone, provided such property is placed in
730	730	12 service on or after July 1, 2006, and the taxpayer's base
731	731	13 employment within Illinois has increased by 1% or more
732	732	14 over the preceding year as determined by the taxpayer's
733	733	15 employment records filed with the Illinois Department of
734	734	16 Employment Security. Taxpayers who are new to Illinois
735	735	17 shall be deemed to have met the 1% growth in base
736	736	18 employment for the first year in which they file
737	737	19 employment records with the Illinois Department of
738	738	20 Employment Security. If, in any year, the increase in base
739	739	21 employment within Illinois over the preceding year is less
740	740	22 than 1%, the additional credit shall be limited to that
741	741	23 percentage times a fraction, the numerator of which is
742	742	24 0.5% and the denominator of which is 1%, but shall not
743	743	25 exceed 0.5%.
744	744	26 (8) For taxable years beginning on or after January 1,
745	745
746	746
747	747
748	748
749	749
750	750	SB2105 - 20 - LRB103 29118 HLH 55504 b
751	751
752	752
753	753	SB2105- 21 -LRB103 29118 HLH 55504 b SB2105 - 21 - LRB103 29118 HLH 55504 b
754	754	SB2105 - 21 - LRB103 29118 HLH 55504 b
755	755	1 2021, there shall be allowed an Enterprise Zone
756	756	2 construction jobs credit against the taxes imposed under
757	757	3 subsections (a) and (b) of this Section as provided in
758	758	4 Section 13 of the Illinois Enterprise Zone Act.
759	759	5 The credit or credits may not reduce the taxpayer's
760	760	6 liability to less than zero. If the amount of the credit or
761	761	7 credits exceeds the taxpayer's liability, the excess may
762	762	8 be carried forward and applied against the taxpayer's
763	763	9 liability in succeeding calendar years in the same manner
764	764	10 provided under paragraph (4) of Section 211 of this Act.
765	765	11 The credit or credits shall be applied to the earliest
766	766	12 year for which there is a tax liability. If there are
767	767	13 credits from more than one taxable year that are available
768	768	14 to offset a liability, the earlier credit shall be applied
769	769	15 first.
770	770	16 For partners, shareholders of Subchapter S
771	771	17 corporations, and owners of limited liability companies,
772	772	18 if the liability company is treated as a partnership for
773	773	19 the purposes of federal and State income taxation, there
774	774	20 shall be allowed a credit under this Section to be
775	775	21 determined in accordance with the determination of income
776	776	22 and distributive share of income under Sections 702 and
777	777	23 704 and Subchapter S of the Internal Revenue Code.
778	778	24 The total aggregate amount of credits awarded under
779	779	25 the Blue Collar Jobs Act (Article 20 of Public Act 101-9)
780	780	26 shall not exceed $20,000,000 in any State fiscal year.
781	781
782	782
783	783
784	784
785	785
786	786	SB2105 - 21 - LRB103 29118 HLH 55504 b
787	787
788	788
789	789	SB2105- 22 -LRB103 29118 HLH 55504 b SB2105 - 22 - LRB103 29118 HLH 55504 b
790	790	SB2105 - 22 - LRB103 29118 HLH 55504 b
791	791	1 This paragraph (8) is exempt from the provisions of
792	792	2 Section 250.
793	793	3 (g) (Blank).
794	794	4 (h) Investment credit; High Impact Business.
795	795	5 (1) Subject to subsections (b) and (b-5) of Section
796	796	6 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall
797	797	7 be allowed a credit against the tax imposed by subsections
798	798	8 (a) and (b) of this Section for investment in qualified
799	799	9 property which is placed in service by a Department of
800	800	10 Commerce and Economic Opportunity designated High Impact
801	801	11 Business. The credit shall be .5% of the basis for such
802	802	12 property. The credit shall not be available (i) until the
803	803	13 minimum investments in qualified property set forth in
804	804	14 subdivision (a)(3)(A) of Section 5.5 of the Illinois
805	805	15 Enterprise Zone Act have been satisfied or (ii) until the
806	806	16 time authorized in subsection (b-5) of the Illinois
807	807	17 Enterprise Zone Act for entities designated as High Impact
808	808	18 Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
809	809	19 (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
810	810	20 Act, and shall not be allowed to the extent that it would
811	811	21 reduce a taxpayer's liability for the tax imposed by
812	812	22 subsections (a) and (b) of this Section to below zero. The
813	813	23 credit applicable to such investments shall be taken in
814	814	24 the taxable year in which such investments have been
815	815	25 completed. The credit for additional investments beyond
816	816	26 the minimum investment by a designated high impact
817	817
818	818
819	819
820	820
821	821
822	822	SB2105 - 22 - LRB103 29118 HLH 55504 b
823	823
824	824
825	825	SB2105- 23 -LRB103 29118 HLH 55504 b SB2105 - 23 - LRB103 29118 HLH 55504 b
826	826	SB2105 - 23 - LRB103 29118 HLH 55504 b
827	827	1 business authorized under subdivision (a)(3)(A) of Section
828	828	2 5.5 of the Illinois Enterprise Zone Act shall be available
829	829	3 only in the taxable year in which the property is placed in
830	830	4 service and shall not be allowed to the extent that it
831	831	5 would reduce a taxpayer's liability for the tax imposed by
832	832	6 subsections (a) and (b) of this Section to below zero. For
833	833	7 tax years ending on or after December 31, 1987, the credit
834	834	8 shall be allowed for the tax year in which the property is
835	835	9 placed in service, or, if the amount of the credit exceeds
836	836	10 the tax liability for that year, whether it exceeds the
837	837	11 original liability or the liability as later amended, such
838	838	12 excess may be carried forward and applied to the tax
839	839	13 liability of the 5 taxable years following the excess
840	840	14 credit year. The credit shall be applied to the earliest
841	841	15 year for which there is a liability. If there is credit
842	842	16 from more than one tax year that is available to offset a
843	843	17 liability, the credit accruing first in time shall be
844	844	18 applied first.
845	845	19 Changes made in this subdivision (h)(1) by Public Act
846	846	20 88-670 restore changes made by Public Act 85-1182 and
847	847	21 reflect existing law.
848	848	22 (2) The term qualified property means property which:
849	849	23 (A) is tangible, whether new or used, including
850	850	24 buildings and structural components of buildings;
851	851	25 (B) is depreciable pursuant to Section 167 of the
852	852	26 Internal Revenue Code, except that "3-year property"
853	853
854	854
855	855
856	856
857	857
858	858	SB2105 - 23 - LRB103 29118 HLH 55504 b
859	859
860	860
861	861	SB2105- 24 -LRB103 29118 HLH 55504 b SB2105 - 24 - LRB103 29118 HLH 55504 b
862	862	SB2105 - 24 - LRB103 29118 HLH 55504 b
863	863	1 as defined in Section 168(c)(2)(A) of that Code is not
864	864	2 eligible for the credit provided by this subsection
865	865	3 (h);
866	866	4 (C) is acquired by purchase as defined in Section
867	867	5 179(d) of the Internal Revenue Code; and
868	868	6 (D) is not eligible for the Enterprise Zone
869	869	7 Investment Credit provided by subsection (f) of this
870	870	8 Section.
871	871	9 (3) The basis of qualified property shall be the basis
872	872	10 used to compute the depreciation deduction for federal
873	873	11 income tax purposes.
874	874	12 (4) If the basis of the property for federal income
875	875	13 tax depreciation purposes is increased after it has been
876	876	14 placed in service in a federally designated Foreign Trade
877	877	15 Zone or Sub-Zone located in Illinois by the taxpayer, the
878	878	16 amount of such increase shall be deemed property placed in
879	879	17 service on the date of such increase in basis.
880	880	18 (5) The term "placed in service" shall have the same
881	881	19 meaning as under Section 46 of the Internal Revenue Code.
882	882	20 (6) If during any taxable year ending on or before
883	883	21 December 31, 1996, any property ceases to be qualified
884	884	22 property in the hands of the taxpayer within 48 months
885	885	23 after being placed in service, or the situs of any
886	886	24 qualified property is moved outside Illinois within 48
887	887	25 months after being placed in service, the tax imposed
888	888	26 under subsections (a) and (b) of this Section for such
889	889
890	890
891	891
892	892
893	893
894	894	SB2105 - 24 - LRB103 29118 HLH 55504 b
895	895
896	896
897	897	SB2105- 25 -LRB103 29118 HLH 55504 b SB2105 - 25 - LRB103 29118 HLH 55504 b
898	898	SB2105 - 25 - LRB103 29118 HLH 55504 b
899	899	1 taxable year shall be increased. Such increase shall be
900	900	2 determined by (i) recomputing the investment credit which
901	901	3 would have been allowed for the year in which credit for
902	902	4 such property was originally allowed by eliminating such
903	903	5 property from such computation, and (ii) subtracting such
904	904	6 recomputed credit from the amount of credit previously
905	905	7 allowed. For the purposes of this paragraph (6), a
906	906	8 reduction of the basis of qualified property resulting
907	907	9 from a redetermination of the purchase price shall be
908	908	10 deemed a disposition of qualified property to the extent
909	909	11 of such reduction.
910	910	12 (7) Beginning with tax years ending after December 31,
911	911	13 1996, if a taxpayer qualifies for the credit under this
912	912	14 subsection (h) and thereby is granted a tax abatement and
913	913	15 the taxpayer relocates its entire facility in violation of
914	914	16 the explicit terms and length of the contract under
915	915	17 Section 18-183 of the Property Tax Code, the tax imposed
916	916	18 under subsections (a) and (b) of this Section shall be
917	917	19 increased for the taxable year in which the taxpayer
918	918	20 relocated its facility by an amount equal to the amount of
919	919	21 credit received by the taxpayer under this subsection (h).
920	920	22 (h-5) High Impact Business construction jobs credit. For
921	921	23 taxable years beginning on or after January 1, 2021, there
922	922	24 shall also be allowed a High Impact Business construction jobs
923	923	25 credit against the tax imposed under subsections (a) and (b)
924	924	26 of this Section as provided in subsections (i) and (j) of
925	925
926	926
927	927
928	928
929	929
930	930	SB2105 - 25 - LRB103 29118 HLH 55504 b
931	931
932	932
933	933	SB2105- 26 -LRB103 29118 HLH 55504 b SB2105 - 26 - LRB103 29118 HLH 55504 b
934	934	SB2105 - 26 - LRB103 29118 HLH 55504 b
935	935	1 Section 5.5 of the Illinois Enterprise Zone Act.
936	936	2 The credit or credits may not reduce the taxpayer's
937	937	3 liability to less than zero. If the amount of the credit or
938	938	4 credits exceeds the taxpayer's liability, the excess may be
939	939	5 carried forward and applied against the taxpayer's liability
940	940	6 in succeeding calendar years in the manner provided under
941	941	7 paragraph (4) of Section 211 of this Act. The credit or credits
942	942	8 shall be applied to the earliest year for which there is a tax
943	943	9 liability. If there are credits from more than one taxable
944	944	10 year that are available to offset a liability, the earlier
945	945	11 credit shall be applied first.
946	946	12 For partners, shareholders of Subchapter S corporations,
947	947	13 and owners of limited liability companies, if the liability
948	948	14 company is treated as a partnership for the purposes of
949	949	15 federal and State income taxation, there shall be allowed a
950	950	16 credit under this Section to be determined in accordance with
951	951	17 the determination of income and distributive share of income
952	952	18 under Sections 702 and 704 and Subchapter S of the Internal
953	953	19 Revenue Code.
954	954	20 The total aggregate amount of credits awarded under the
955	955	21 Blue Collar Jobs Act (Article 20 of Public Act 101-9) shall not
956	956	22 exceed $20,000,000 in any State fiscal year.
957	957	23 This subsection (h-5) is exempt from the provisions of
958	958	24 Section 250.
959	959	25 (i) Credit for Personal Property Tax Replacement Income
960	960	26 Tax. For tax years ending prior to December 31, 2003, a credit
961	961
962	962
963	963
964	964
965	965
966	966	SB2105 - 26 - LRB103 29118 HLH 55504 b
967	967
968	968
969	969	SB2105- 27 -LRB103 29118 HLH 55504 b SB2105 - 27 - LRB103 29118 HLH 55504 b
970	970	SB2105 - 27 - LRB103 29118 HLH 55504 b
971	971	1 shall be allowed against the tax imposed by subsections (a)
972	972	2 and (b) of this Section for the tax imposed by subsections (c)
973	973	3 and (d) of this Section. This credit shall be computed by
974	974	4 multiplying the tax imposed by subsections (c) and (d) of this
975	975	5 Section by a fraction, the numerator of which is base income
976	976	6 allocable to Illinois and the denominator of which is Illinois
977	977	7 base income, and further multiplying the product by the tax
978	978	8 rate imposed by subsections (a) and (b) of this Section.
979	979	9 Any credit earned on or after December 31, 1986 under this
980	980	10 subsection which is unused in the year the credit is computed
981	981	11 because it exceeds the tax liability imposed by subsections
982	982	12 (a) and (b) for that year (whether it exceeds the original
983	983	13 liability or the liability as later amended) may be carried
984	984	14 forward and applied to the tax liability imposed by
985	985	15 subsections (a) and (b) of the 5 taxable years following the
986	986	16 excess credit year, provided that no credit may be carried
987	987	17 forward to any year ending on or after December 31, 2003. This
988	988	18 credit shall be applied first to the earliest year for which
989	989	19 there is a liability. If there is a credit under this
990	990	20 subsection from more than one tax year that is available to
991	991	21 offset a liability the earliest credit arising under this
992	992	22 subsection shall be applied first.
993	993	23 If, during any taxable year ending on or after December
994	994	24 31, 1986, the tax imposed by subsections (c) and (d) of this
995	995	25 Section for which a taxpayer has claimed a credit under this
996	996	26 subsection (i) is reduced, the amount of credit for such tax
997	997
998	998
999	999
1000	1000
1001	1001
1002	1002	SB2105 - 27 - LRB103 29118 HLH 55504 b
1003	1003
1004	1004
1005	1005	SB2105- 28 -LRB103 29118 HLH 55504 b SB2105 - 28 - LRB103 29118 HLH 55504 b
1006	1006	SB2105 - 28 - LRB103 29118 HLH 55504 b
1007	1007	1 shall also be reduced. Such reduction shall be determined by
1008	1008	2 recomputing the credit to take into account the reduced tax
1009	1009	3 imposed by subsections (c) and (d). If any portion of the
1010	1010	4 reduced amount of credit has been carried to a different
1011	1011	5 taxable year, an amended return shall be filed for such
1012	1012	6 taxable year to reduce the amount of credit claimed.
1013	1013	7 (j) Training expense credit. Beginning with tax years
1014	1014	8 ending on or after December 31, 1986 and prior to December 31,
1015	1015	9 2003, a taxpayer shall be allowed a credit against the tax
1016	1016	10 imposed by subsections (a) and (b) under this Section for all
1017	1017	11 amounts paid or accrued, on behalf of all persons employed by
1018	1018	12 the taxpayer in Illinois or Illinois residents employed
1019	1019	13 outside of Illinois by a taxpayer, for educational or
1020	1020	14 vocational training in semi-technical or technical fields or
1021	1021	15 semi-skilled or skilled fields, which were deducted from gross
1022	1022	16 income in the computation of taxable income. The credit
1023	1023	17 against the tax imposed by subsections (a) and (b) shall be
1024	1024	18 1.6% of such training expenses. For partners, shareholders of
1025	1025	19 subchapter S corporations, and owners of limited liability
1026	1026	20 companies, if the liability company is treated as a
1027	1027	21 partnership for purposes of federal and State income taxation,
1028	1028	22 there shall be allowed a credit under this subsection (j) to be
1029	1029	23 determined in accordance with the determination of income and
1030	1030	24 distributive share of income under Sections 702 and 704 and
1031	1031	25 subchapter S of the Internal Revenue Code.
1032	1032	26 Any credit allowed under this subsection which is unused
1033	1033
1034	1034
1035	1035
1036	1036
1037	1037
1038	1038	SB2105 - 28 - LRB103 29118 HLH 55504 b
1039	1039
1040	1040
1041	1041	SB2105- 29 -LRB103 29118 HLH 55504 b SB2105 - 29 - LRB103 29118 HLH 55504 b
1042	1042	SB2105 - 29 - LRB103 29118 HLH 55504 b
1043	1043	1 in the year the credit is earned may be carried forward to each
1044	1044	2 of the 5 taxable years following the year for which the credit
1045	1045	3 is first computed until it is used. This credit shall be
1046	1046	4 applied first to the earliest year for which there is a
1047	1047	5 liability. If there is a credit under this subsection from
1048	1048	6 more than one tax year that is available to offset a liability,
1049	1049	7 the earliest credit arising under this subsection shall be
1050	1050	8 applied first. No carryforward credit may be claimed in any
1051	1051	9 tax year ending on or after December 31, 2003.
1052	1052	10 (k) Research and development credit. For tax years ending
1053	1053	11 after July 1, 1990 and prior to December 31, 2003, and
1054	1054	12 beginning again for tax years ending on or after December 31,
1055	1055	13 2004, and ending prior to January 1, 2027, a taxpayer shall be
1056	1056	14 allowed a credit against the tax imposed by subsections (a)
1057	1057	15 and (b) of this Section for increasing research activities in
1058	1058	16 this State. The credit allowed against the tax imposed by
1059	1059	17 subsections (a) and (b) shall be equal to 6 1/2% of the
1060	1060	18 qualifying expenditures for increasing research activities in
1061	1061	19 this State. For partners, shareholders of subchapter S
1062	1062	20 corporations, and owners of limited liability companies, if
1063	1063	21 the liability company is treated as a partnership for purposes
1064	1064	22 of federal and State income taxation, there shall be allowed a
1065	1065	23 credit under this subsection to be determined in accordance
1066	1066	24 with the determination of income and distributive share of
1067	1067	25 income under Sections 702 and 704 and subchapter S of the
1068	1068	26 Internal Revenue Code.
1069	1069
1070	1070
1071	1071
1072	1072
1073	1073
1074	1074	SB2105 - 29 - LRB103 29118 HLH 55504 b
1075	1075
1076	1076
1077	1077	SB2105- 30 -LRB103 29118 HLH 55504 b SB2105 - 30 - LRB103 29118 HLH 55504 b
1078	1078	SB2105 - 30 - LRB103 29118 HLH 55504 b
1079	1079	1 For purposes of this subsection, "qualifying expenditures"
1080	1080	2 means the qualifying expenditures as defined for the federal
1081	1081	3 credit for increasing research activities which would be
1082	1082	4 allowable under Section 41 of the Internal Revenue Code and
1083	1083	5 which are conducted in this State, "qualifying expenditures
1084	1084	6 for increasing research activities in this State" means the
1085	1085	7 excess of qualifying expenditures for the taxable year in
1086	1086	8 which incurred over qualifying expenditures for the base
1087	1087	9 period, "qualifying expenditures for the base period" means
1088	1088	10 the average of the qualifying expenditures for each year in
1089	1089	11 the base period, and "base period" means the 3 taxable years
1090	1090	12 immediately preceding the taxable year for which the
1091	1091	13 determination is being made.
1092	1092	14 Any credit in excess of the tax liability for the taxable
1093	1093	15 year may be carried forward. A taxpayer may elect to have the
1094	1094	16 unused credit shown on its final completed return carried over
1095	1095	17 as a credit against the tax liability for the following 5
1096	1096	18 taxable years or until it has been fully used, whichever
1097	1097	19 occurs first; provided that no credit earned in a tax year
1098	1098	20 ending prior to December 31, 2003 may be carried forward to any
1099	1099	21 year ending on or after December 31, 2003.
1100	1100	22 If an unused credit is carried forward to a given year from
1101	1101	23 2 or more earlier years, that credit arising in the earliest
1102	1102	24 year will be applied first against the tax liability for the
1103	1103	25 given year. If a tax liability for the given year still
1104	1104	26 remains, the credit from the next earliest year will then be
1105	1105
1106	1106
1107	1107
1108	1108
1109	1109
1110	1110	SB2105 - 30 - LRB103 29118 HLH 55504 b
1111	1111
1112	1112
1113	1113	SB2105- 31 -LRB103 29118 HLH 55504 b SB2105 - 31 - LRB103 29118 HLH 55504 b
1114	1114	SB2105 - 31 - LRB103 29118 HLH 55504 b
1115	1115	1 applied, and so on, until all credits have been used or no tax
1116	1116	2 liability for the given year remains. Any remaining unused
1117	1117	3 credit or credits then will be carried forward to the next
1118	1118	4 following year in which a tax liability is incurred, except
1119	1119	5 that no credit can be carried forward to a year which is more
1120	1120	6 than 5 years after the year in which the expense for which the
1121	1121	7 credit is given was incurred.
1122	1122	8 No inference shall be drawn from Public Act 91-644 in
1123	1123	9 construing this Section for taxable years beginning before
1124	1124	10 January 1, 1999.
1125	1125	11 It is the intent of the General Assembly that the research
1126	1126	12 and development credit under this subsection (k) shall apply
1127	1127	13 continuously for all tax years ending on or after December 31,
1128	1128	14 2004 and ending prior to January 1, 2027, including, but not
1129	1129	15 limited to, the period beginning on January 1, 2016 and ending
1130	1130	16 on July 6, 2017 (the effective date of Public Act 100-22). All
1131	1131	17 actions taken in reliance on the continuation of the credit
1132	1132	18 under this subsection (k) by any taxpayer are hereby
1133	1133	19 validated.
1134	1134	20 (l) Environmental Remediation Tax Credit.
1135	1135	21 (i) For tax years ending after December 31, 1997 and
1136	1136	22 on or before December 31, 2001, a taxpayer shall be
1137	1137	23 allowed a credit against the tax imposed by subsections
1138	1138	24 (a) and (b) of this Section for certain amounts paid for
1139	1139	25 unreimbursed eligible remediation costs, as specified in
1140	1140	26 this subsection. For purposes of this Section,
1141	1141
1142	1142
1143	1143
1144	1144
1145	1145
1146	1146	SB2105 - 31 - LRB103 29118 HLH 55504 b
1147	1147
1148	1148
1149	1149	SB2105- 32 -LRB103 29118 HLH 55504 b SB2105 - 32 - LRB103 29118 HLH 55504 b
1150	1150	SB2105 - 32 - LRB103 29118 HLH 55504 b
1151	1151	1 "unreimbursed eligible remediation costs" means costs
1152	1152	2 approved by the Illinois Environmental Protection Agency
1153	1153	3 ("Agency") under Section 58.14 of the Environmental
1154	1154	4 Protection Act that were paid in performing environmental
1155	1155	5 remediation at a site for which a No Further Remediation
1156	1156	6 Letter was issued by the Agency and recorded under Section
1157	1157	7 58.10 of the Environmental Protection Act. The credit must
1158	1158	8 be claimed for the taxable year in which Agency approval
1159	1159	9 of the eligible remediation costs is granted. The credit
1160	1160	10 is not available to any taxpayer if the taxpayer or any
1161	1161	11 related party caused or contributed to, in any material
1162	1162	12 respect, a release of regulated substances on, in, or
1163	1163	13 under the site that was identified and addressed by the
1164	1164	14 remedial action pursuant to the Site Remediation Program
1165	1165	15 of the Environmental Protection Act. After the Pollution
1166	1166	16 Control Board rules are adopted pursuant to the Illinois
1167	1167	17 Administrative Procedure Act for the administration and
1168	1168	18 enforcement of Section 58.9 of the Environmental
1169	1169	19 Protection Act, determinations as to credit availability
1170	1170	20 for purposes of this Section shall be made consistent with
1171	1171	21 those rules. For purposes of this Section, "taxpayer"
1172	1172	22 includes a person whose tax attributes the taxpayer has
1173	1173	23 succeeded to under Section 381 of the Internal Revenue
1174	1174	24 Code and "related party" includes the persons disallowed a
1175	1175	25 deduction for losses by paragraphs (b), (c), and (f)(1) of
1176	1176	26 Section 267 of the Internal Revenue Code by virtue of
1177	1177
1178	1178
1179	1179
1180	1180
1181	1181
1182	1182	SB2105 - 32 - LRB103 29118 HLH 55504 b
1183	1183
1184	1184
1185	1185	SB2105- 33 -LRB103 29118 HLH 55504 b SB2105 - 33 - LRB103 29118 HLH 55504 b
1186	1186	SB2105 - 33 - LRB103 29118 HLH 55504 b
1187	1187	1 being a related taxpayer, as well as any of its partners.
1188	1188	2 The credit allowed against the tax imposed by subsections
1189	1189	3 (a) and (b) shall be equal to 25% of the unreimbursed
1190	1190	4 eligible remediation costs in excess of $100,000 per site,
1191	1191	5 except that the $100,000 threshold shall not apply to any
1192	1192	6 site contained in an enterprise zone as determined by the
1193	1193	7 Department of Commerce and Community Affairs (now
1194	1194	8 Department of Commerce and Economic Opportunity). The
1195	1195	9 total credit allowed shall not exceed $40,000 per year
1196	1196	10 with a maximum total of $150,000 per site. For partners
1197	1197	11 and shareholders of subchapter S corporations, there shall
1198	1198	12 be allowed a credit under this subsection to be determined
1199	1199	13 in accordance with the determination of income and
1200	1200	14 distributive share of income under Sections 702 and 704
1201	1201	15 and subchapter S of the Internal Revenue Code.
1202	1202	16 (ii) A credit allowed under this subsection that is
1203	1203	17 unused in the year the credit is earned may be carried
1204	1204	18 forward to each of the 5 taxable years following the year
1205	1205	19 for which the credit is first earned until it is used. The
1206	1206	20 term "unused credit" does not include any amounts of
1207	1207	21 unreimbursed eligible remediation costs in excess of the
1208	1208	22 maximum credit per site authorized under paragraph (i).
1209	1209	23 This credit shall be applied first to the earliest year
1210	1210	24 for which there is a liability. If there is a credit under
1211	1211	25 this subsection from more than one tax year that is
1212	1212	26 available to offset a liability, the earliest credit
1213	1213
1214	1214
1215	1215
1216	1216
1217	1217
1218	1218	SB2105 - 33 - LRB103 29118 HLH 55504 b
1219	1219
1220	1220
1221	1221	SB2105- 34 -LRB103 29118 HLH 55504 b SB2105 - 34 - LRB103 29118 HLH 55504 b
1222	1222	SB2105 - 34 - LRB103 29118 HLH 55504 b
1223	1223	1 arising under this subsection shall be applied first. A
1224	1224	2 credit allowed under this subsection may be sold to a
1225	1225	3 buyer as part of a sale of all or part of the remediation
1226	1226	4 site for which the credit was granted. The purchaser of a
1227	1227	5 remediation site and the tax credit shall succeed to the
1228	1228	6 unused credit and remaining carry-forward period of the
1229	1229	7 seller. To perfect the transfer, the assignor shall record
1230	1230	8 the transfer in the chain of title for the site and provide
1231	1231	9 written notice to the Director of the Illinois Department
1232	1232	10 of Revenue of the assignor's intent to sell the
1233	1233	11 remediation site and the amount of the tax credit to be
1234	1234	12 transferred as a portion of the sale. In no event may a
1235	1235	13 credit be transferred to any taxpayer if the taxpayer or a
1236	1236	14 related party would not be eligible under the provisions
1237	1237	15 of subsection (i).
1238	1238	16 (iii) For purposes of this Section, the term "site"
1239	1239	17 shall have the same meaning as under Section 58.2 of the
1240	1240	18 Environmental Protection Act.
1241	1241	19 (m) Education expense credit. Beginning with tax years
1242	1242	20 ending after December 31, 1999, a taxpayer who is the
1243	1243	21 custodian of one or more qualifying pupils shall be allowed a
1244	1244	22 credit against the tax imposed by subsections (a) and (b) of
1245	1245	23 this Section for qualified education expenses incurred on
1246	1246	24 behalf of the qualifying pupils. The credit shall be equal to
1247	1247	25 25% of qualified education expenses, but in no event may the
1248	1248	26 total credit under this subsection claimed by a family that is
1249	1249
1250	1250
1251	1251
1252	1252
1253	1253
1254	1254	SB2105 - 34 - LRB103 29118 HLH 55504 b
1255	1255
1256	1256
1257	1257	SB2105- 35 -LRB103 29118 HLH 55504 b SB2105 - 35 - LRB103 29118 HLH 55504 b
1258	1258	SB2105 - 35 - LRB103 29118 HLH 55504 b
1259	1259	1 the custodian of qualifying pupils exceed (i) $500 for tax
1260	1260	2 years ending prior to December 31, 2017, and (ii) $750 for tax
1261	1261	3 years ending on or after December 31, 2017. In no event shall a
1262	1262	4 credit under this subsection reduce the taxpayer's liability
1263	1263	5 under this Act to less than zero. Notwithstanding any other
1264	1264	6 provision of law, for taxable years beginning on or after
1265	1265	7 January 1, 2017, no taxpayer may claim a credit under this
1266	1266	8 subsection (m) if the taxpayer's adjusted gross income for the
1267	1267	9 taxable year exceeds (i) $500,000, in the case of spouses
1268	1268	10 filing a joint federal tax return or (ii) $250,000, in the case
1269	1269	11 of all other taxpayers. This subsection is exempt from the
1270	1270	12 provisions of Section 250 of this Act.
1271	1271	13 For purposes of this subsection:
1272	1272	14 "Qualifying pupils" means individuals who (i) are
1273	1273	15 residents of the State of Illinois, (ii) are under the age of
1274	1274	16 21 at the close of the school year for which a credit is
1275	1275	17 sought, and (iii) during the school year for which a credit is
1276	1276	18 sought were full-time pupils enrolled in a kindergarten
1277	1277	19 through twelfth grade education program at any school, as
1278	1278	20 defined in this subsection.
1279	1279	21 "Qualified education expense" means the amount incurred on
1280	1280	22 behalf of a qualifying pupil in excess of $250 for tuition,
1281	1281	23 book fees, and lab fees at the school in which the pupil is
1282	1282	24 enrolled during the regular school year.
1283	1283	25 "School" means any public or nonpublic elementary or
1284	1284	26 secondary school in Illinois that is in compliance with Title
1285	1285
1286	1286
1287	1287
1288	1288
1289	1289
1290	1290	SB2105 - 35 - LRB103 29118 HLH 55504 b
1291	1291
1292	1292
1293	1293	SB2105- 36 -LRB103 29118 HLH 55504 b SB2105 - 36 - LRB103 29118 HLH 55504 b
1294	1294	SB2105 - 36 - LRB103 29118 HLH 55504 b
1295	1295	1 VI of the Civil Rights Act of 1964 and attendance at which
1296	1296	2 satisfies the requirements of Section 26-1 of the School Code,
1297	1297	3 except that nothing shall be construed to require a child to
1298	1298	4 attend any particular public or nonpublic school to qualify
1299	1299	5 for the credit under this Section.
1300	1300	6 "Custodian" means, with respect to qualifying pupils, an
1301	1301	7 Illinois resident who is a parent, the parents, a legal
1302	1302	8 guardian, or the legal guardians of the qualifying pupils.
1303	1303	9 (n) River Edge Redevelopment Zone site remediation tax
1304	1304	10 credit.
1305	1305	11 (i) For tax years ending on or after December 31,
1306	1306	12 2006, a taxpayer shall be allowed a credit against the tax
1307	1307	13 imposed by subsections (a) and (b) of this Section for
1308	1308	14 certain amounts paid for unreimbursed eligible remediation
1309	1309	15 costs, as specified in this subsection. For purposes of
1310	1310	16 this Section, "unreimbursed eligible remediation costs"
1311	1311	17 means costs approved by the Illinois Environmental
1312	1312	18 Protection Agency ("Agency") under Section 58.14a of the
1313	1313	19 Environmental Protection Act that were paid in performing
1314	1314	20 environmental remediation at a site within a River Edge
1315	1315	21 Redevelopment Zone for which a No Further Remediation
1316	1316	22 Letter was issued by the Agency and recorded under Section
1317	1317	23 58.10 of the Environmental Protection Act. The credit must
1318	1318	24 be claimed for the taxable year in which Agency approval
1319	1319	25 of the eligible remediation costs is granted. The credit
1320	1320	26 is not available to any taxpayer if the taxpayer or any
1321	1321
1322	1322
1323	1323
1324	1324
1325	1325
1326	1326	SB2105 - 36 - LRB103 29118 HLH 55504 b
1327	1327
1328	1328
1329	1329	SB2105- 37 -LRB103 29118 HLH 55504 b SB2105 - 37 - LRB103 29118 HLH 55504 b
1330	1330	SB2105 - 37 - LRB103 29118 HLH 55504 b
1331	1331	1 related party caused or contributed to, in any material
1332	1332	2 respect, a release of regulated substances on, in, or
1333	1333	3 under the site that was identified and addressed by the
1334	1334	4 remedial action pursuant to the Site Remediation Program
1335	1335	5 of the Environmental Protection Act. Determinations as to
1336	1336	6 credit availability for purposes of this Section shall be
1337	1337	7 made consistent with rules adopted by the Pollution
1338	1338	8 Control Board pursuant to the Illinois Administrative
1339	1339	9 Procedure Act for the administration and enforcement of
1340	1340	10 Section 58.9 of the Environmental Protection Act. For
1341	1341	11 purposes of this Section, "taxpayer" includes a person
1342	1342	12 whose tax attributes the taxpayer has succeeded to under
1343	1343	13 Section 381 of the Internal Revenue Code and "related
1344	1344	14 party" includes the persons disallowed a deduction for
1345	1345	15 losses by paragraphs (b), (c), and (f)(1) of Section 267
1346	1346	16 of the Internal Revenue Code by virtue of being a related
1347	1347	17 taxpayer, as well as any of its partners. The credit
1348	1348	18 allowed against the tax imposed by subsections (a) and (b)
1349	1349	19 shall be equal to 25% of the unreimbursed eligible
1350	1350	20 remediation costs in excess of $100,000 per site.
1351	1351	21 (ii) A credit allowed under this subsection that is
1352	1352	22 unused in the year the credit is earned may be carried
1353	1353	23 forward to each of the 5 taxable years following the year
1354	1354	24 for which the credit is first earned until it is used. This
1355	1355	25 credit shall be applied first to the earliest year for
1356	1356	26 which there is a liability. If there is a credit under this
1357	1357
1358	1358
1359	1359
1360	1360
1361	1361
1362	1362	SB2105 - 37 - LRB103 29118 HLH 55504 b
1363	1363
1364	1364
1365	1365	SB2105- 38 -LRB103 29118 HLH 55504 b SB2105 - 38 - LRB103 29118 HLH 55504 b
1366	1366	SB2105 - 38 - LRB103 29118 HLH 55504 b
1367	1367	1 subsection from more than one tax year that is available
1368	1368	2 to offset a liability, the earliest credit arising under
1369	1369	3 this subsection shall be applied first. A credit allowed
1370	1370	4 under this subsection may be sold to a buyer as part of a
1371	1371	5 sale of all or part of the remediation site for which the
1372	1372	6 credit was granted. The purchaser of a remediation site
1373	1373	7 and the tax credit shall succeed to the unused credit and
1374	1374	8 remaining carry-forward period of the seller. To perfect
1375	1375	9 the transfer, the assignor shall record the transfer in
1376	1376	10 the chain of title for the site and provide written notice
1377	1377	11 to the Director of the Illinois Department of Revenue of
1378	1378	12 the assignor's intent to sell the remediation site and the
1379	1379	13 amount of the tax credit to be transferred as a portion of
1380	1380	14 the sale. In no event may a credit be transferred to any
1381	1381	15 taxpayer if the taxpayer or a related party would not be
1382	1382	16 eligible under the provisions of subsection (i).
1383	1383	17 (iii) For purposes of this Section, the term "site"
1384	1384	18 shall have the same meaning as under Section 58.2 of the
1385	1385	19 Environmental Protection Act.
1386	1386	20 (o) For each of taxable years during the Compassionate Use
1387	1387	21 of Medical Cannabis Program, a surcharge is imposed on all
1388	1388	22 taxpayers on income arising from the sale or exchange of
1389	1389	23 capital assets, depreciable business property, real property
1390	1390	24 used in the trade or business, and Section 197 intangibles of
1391	1391	25 an organization registrant under the Compassionate Use of
1392	1392	26 Medical Cannabis Program Act. The amount of the surcharge is
1393	1393
1394	1394
1395	1395
1396	1396
1397	1397
1398	1398	SB2105 - 38 - LRB103 29118 HLH 55504 b
1399	1399
1400	1400
1401	1401	SB2105- 39 -LRB103 29118 HLH 55504 b SB2105 - 39 - LRB103 29118 HLH 55504 b
1402	1402	SB2105 - 39 - LRB103 29118 HLH 55504 b
1403	1403	1 equal to the amount of federal income tax liability for the
1404	1404	2 taxable year attributable to those sales and exchanges. The
1405	1405	3 surcharge imposed does not apply if:
1406	1406	4 (1) the medical cannabis cultivation center
1407	1407	5 registration, medical cannabis dispensary registration, or
1408	1408	6 the property of a registration is transferred as a result
1409	1409	7 of any of the following:
1410	1410	8 (A) bankruptcy, a receivership, or a debt
1411	1411	9 adjustment initiated by or against the initial
1412	1412	10 registration or the substantial owners of the initial
1413	1413	11 registration;
1414	1414	12 (B) cancellation, revocation, or termination of
1415	1415	13 any registration by the Illinois Department of Public
1416	1416	14 Health;
1417	1417	15 (C) a determination by the Illinois Department of
1418	1418	16 Public Health that transfer of the registration is in
1419	1419	17 the best interests of Illinois qualifying patients as
1420	1420	18 defined by the Compassionate Use of Medical Cannabis
1421	1421	19 Program Act;
1422	1422	20 (D) the death of an owner of the equity interest in
1423	1423	21 a registrant;
1424	1424	22 (E) the acquisition of a controlling interest in
1425	1425	23 the stock or substantially all of the assets of a
1426	1426	24 publicly traded company;
1427	1427	25 (F) a transfer by a parent company to a wholly
1428	1428	26 owned subsidiary; or
1429	1429
1430	1430
1431	1431
1432	1432
1433	1433
1434	1434	SB2105 - 39 - LRB103 29118 HLH 55504 b
1435	1435
1436	1436
1437	1437	SB2105- 40 -LRB103 29118 HLH 55504 b SB2105 - 40 - LRB103 29118 HLH 55504 b
1438	1438	SB2105 - 40 - LRB103 29118 HLH 55504 b
1439	1439	1 (G) the transfer or sale to or by one person to
1440	1440	2 another person where both persons were initial owners
1441	1441	3 of the registration when the registration was issued;
1442	1442	4 or
1443	1443	5 (2) the cannabis cultivation center registration,
1444	1444	6 medical cannabis dispensary registration, or the
1445	1445	7 controlling interest in a registrant's property is
1446	1446	8 transferred in a transaction to lineal descendants in
1447	1447	9 which no gain or loss is recognized or as a result of a
1448	1448	10 transaction in accordance with Section 351 of the Internal
1449	1449	11 Revenue Code in which no gain or loss is recognized.
1450	1450	12 (p) Pass-through entity tax.
1451	1451	13 (1) For taxable years ending on or after December 31,
1452	1452	14 2021 and beginning prior to January 1, 2026, a partnership
1453	1453	15 (other than a publicly traded partnership under Section
1454	1454	16 7704 of the Internal Revenue Code) or Subchapter S
1455	1455	17 corporation may elect to apply the provisions of this
1456	1456	18 subsection. A separate election shall be made for each
1457	1457	19 taxable year. Such election shall be made at such time,
1458	1458	20 and in such form and manner as prescribed by the
1459	1459	21 Department, and, once made, is irrevocable.
1460	1460	22 (2) Entity-level tax. A partnership or Subchapter S
1461	1461	23 corporation electing to apply the provisions of this
1462	1462	24 subsection shall be subject to a tax for the privilege of
1463	1463	25 earning or receiving income in this State in an amount
1464	1464	26 equal to 4.95% of the taxpayer's net income for the
1465	1465
1466	1466
1467	1467
1468	1468
1469	1469
1470	1470	SB2105 - 40 - LRB103 29118 HLH 55504 b
1471	1471
1472	1472
1473	1473	SB2105- 41 -LRB103 29118 HLH 55504 b SB2105 - 41 - LRB103 29118 HLH 55504 b
1474	1474	SB2105 - 41 - LRB103 29118 HLH 55504 b
1475	1475	1 taxable year.
1476	1476	2 (3) Net income defined.
1477	1477	3 (A) In general. For purposes of paragraph (2), the
1478	1478	4 term net income has the same meaning as defined in
1479	1479	5 Section 202 of this Act, except that the following
1480	1480	6 provisions shall not apply:
1481	1481	7 (i) the standard exemption allowed under
1482	1482	8 Section 204;
1483	1483	9 (ii) the deduction for net losses allowed
1484	1484	10 under Section 207;
1485	1485	11 (iii) in the case of an S corporation, the
1486	1486	12 modification under Section 203(b)(2)(S); and
1487	1487	13 (iv) in the case of a partnership, the
1488	1488	14 modifications under Section 203(d)(2)(H) and
1489	1489	15 Section 203(d)(2)(I).
1490	1490	16 (B) Special rule for tiered partnerships. If a
1491	1491	17 taxpayer making the election under paragraph (1) is a
1492	1492	18 partner of another taxpayer making the election under
1493	1493	19 paragraph (1), net income shall be computed as
1494	1494	20 provided in subparagraph (A), except that the taxpayer
1495	1495	21 shall subtract its distributive share of the net
1496	1496	22 income of the electing partnership (including its
1497	1497	23 distributive share of the net income of the electing
1498	1498	24 partnership derived as a distributive share from
1499	1499	25 electing partnerships in which it is a partner).
1500	1500	26 (4) Credit for entity level tax. Each partner or
1501	1501
1502	1502
1503	1503
1504	1504
1505	1505
1506	1506	SB2105 - 41 - LRB103 29118 HLH 55504 b
1507	1507
1508	1508
1509	1509	SB2105- 42 -LRB103 29118 HLH 55504 b SB2105 - 42 - LRB103 29118 HLH 55504 b
1510	1510	SB2105 - 42 - LRB103 29118 HLH 55504 b
1511	1511	1 shareholder of a taxpayer making the election under this
1512	1512	2 Section shall be allowed a credit against the tax imposed
1513	1513	3 under subsections (a) and (b) of Section 201 of this Act
1514	1514	4 for the taxable year of the partnership or Subchapter S
1515	1515	5 corporation for which an election is in effect ending
1516	1516	6 within or with the taxable year of the partner or
1517	1517	7 shareholder in an amount equal to 4.95% times the partner
1518	1518	8 or shareholder's distributive share of the net income of
1519	1519	9 the electing partnership or Subchapter S corporation, but
1520	1520	10 not to exceed the partner's or shareholder's share of the
1521	1521	11 tax imposed under paragraph (1) which is actually paid by
1522	1522	12 the partnership or Subchapter S corporation. If the
1523	1523	13 taxpayer is a partnership or Subchapter S corporation that
1524	1524	14 is itself a partner of a partnership making the election
1525	1525	15 under paragraph (1), the credit under this paragraph shall
1526	1526	16 be allowed to the taxpayer's partners or shareholders (or
1527	1527	17 if the partner is a partnership or Subchapter S
1528	1528	18 corporation then its partners or shareholders) in
1529	1529	19 accordance with the determination of income and
1530	1530	20 distributive share of income under Sections 702 and 704
1531	1531	21 and Subchapter S of the Internal Revenue Code. If the
1532	1532	22 amount of the credit allowed under this paragraph exceeds
1533	1533	23 the partner's or shareholder's liability for tax imposed
1534	1534	24 under subsections (a) and (b) of Section 201 of this Act
1535	1535	25 for the taxable year, such excess shall be treated as an
1536	1536	26 overpayment for purposes of Section 909 of this Act.
1537	1537
1538	1538
1539	1539
1540	1540
1541	1541
1542	1542	SB2105 - 42 - LRB103 29118 HLH 55504 b
1543	1543
1544	1544
1545	1545	SB2105- 43 -LRB103 29118 HLH 55504 b SB2105 - 43 - LRB103 29118 HLH 55504 b
1546	1546	SB2105 - 43 - LRB103 29118 HLH 55504 b
1547	1547	1 (5) Nonresidents. A nonresident individual who is a
1548	1548	2 partner or shareholder of a partnership or Subchapter S
1549	1549	3 corporation for a taxable year for which an election is in
1550	1550	4 effect under paragraph (1) shall not be required to file
1551	1551	5 an income tax return under this Act for such taxable year
1552	1552	6 if the only source of net income of the individual (or the
1553	1553	7 individual and the individual's spouse in the case of a
1554	1554	8 joint return) is from an entity making the election under
1555	1555	9 paragraph (1) and the credit allowed to the partner or
1556	1556	10 shareholder under paragraph (4) equals or exceeds the
1557	1557	11 individual's liability for the tax imposed under
1558	1558	12 subsections (a) and (b) of Section 201 of this Act for the
1559	1559	13 taxable year.
1560	1560	14 (6) Liability for tax. Except as provided in this
1561	1561	15 paragraph, a partnership or Subchapter S making the
1562	1562	16 election under paragraph (1) is liable for the
1563	1563	17 entity-level tax imposed under paragraph (2). If the
1564	1564	18 electing partnership or corporation fails to pay the full
1565	1565	19 amount of tax deemed assessed under paragraph (2), the
1566	1566	20 partners or shareholders shall be liable to pay the tax
1567	1567	21 assessed (including penalties and interest). Each partner
1568	1568	22 or shareholder shall be liable for the unpaid assessment
1569	1569	23 based on the ratio of the partner's or shareholder's share
1570	1570	24 of the net income of the partnership over the total net
1571	1571	25 income of the partnership. If the partnership or
1572	1572	26 Subchapter S corporation fails to pay the tax assessed
1573	1573
1574	1574
1575	1575
1576	1576
1577	1577
1578	1578	SB2105 - 43 - LRB103 29118 HLH 55504 b
1579	1579
1580	1580
1581	1581	SB2105- 44 -LRB103 29118 HLH 55504 b SB2105 - 44 - LRB103 29118 HLH 55504 b
1582	1582	SB2105 - 44 - LRB103 29118 HLH 55504 b
1583	1583	1 (including penalties and interest) and thereafter an
1584	1584	2 amount of such tax is paid by the partners or
1585	1585	3 shareholders, such amount shall not be collected from the
1586	1586	4 partnership or corporation.
1587	1587	5 (7) Foreign tax. For purposes of the credit allowed
1588	1588	6 under Section 601(b)(3) of this Act, tax paid by a
1589	1589	7 partnership or Subchapter S corporation to another state
1590	1590	8 which, as determined by the Department, is substantially
1591	1591	9 similar to the tax imposed under this subsection, shall be
1592	1592	10 considered tax paid by the partner or shareholder to the
1593	1593	11 extent that the partner's or shareholder's share of the
1594	1594	12 income of the partnership or Subchapter S corporation
1595	1595	13 allocated and apportioned to such other state bears to the
1596	1596	14 total income of the partnership or Subchapter S
1597	1597	15 corporation allocated or apportioned to such other state.
1598	1598	16 (8) Suspension of withholding. The provisions of
1599	1599	17 Section 709.5 of this Act shall not apply to a partnership
1600	1600	18 or Subchapter S corporation for the taxable year for which
1601	1601	19 an election under paragraph (1) is in effect.
1602	1602	20 (9) Requirement to pay estimated tax. For each taxable
1603	1603	21 year for which an election under paragraph (1) is in
1604	1604	22 effect, a partnership or Subchapter S corporation is
1605	1605	23 required to pay estimated tax for such taxable year under
1606	1606	24 Sections 803 and 804 of this Act if the amount payable as
1607	1607	25 estimated tax can reasonably be expected to exceed $500.
1608	1608	26 (10) The provisions of this subsection shall apply
1609	1609
1610	1610
1611	1611
1612	1612
1613	1613
1614	1614	SB2105 - 44 - LRB103 29118 HLH 55504 b
1615	1615
1616	1616
1617	1617	SB2105- 45 -LRB103 29118 HLH 55504 b SB2105 - 45 - LRB103 29118 HLH 55504 b
1618	1618	SB2105 - 45 - LRB103 29118 HLH 55504 b
1619	1619	1 only with respect to taxable years for which the
1620	1620	2 limitation on individual deductions applies under Section
1621	1621	3 164(b)(6) of the Internal Revenue Code.
1622	1622	4 (Source: P.A. 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
1623	1623	5 101-207, eff. 8-2-19; 101-363, eff. 8-9-19; 102-558, eff.
1624	1624	6 8-20-21; 102-658, eff. 8-27-21.)
1625	1625	7 (35 ILCS 5/201.3 new)
1626	1626	8 Sec. 201.3. Tax rates. In the case of an individual,
1627	1627	9 trust, or estate, for taxable years beginning on or after
1628	1628	10 January 1, 2024, the amount of the tax imposed by subsection
1629	1629	11 (a) of Section 201 of this Act shall be determined according to
1630	1630	12 the following tax rate structure:
1631	1631	13 (1) for taxpayers who do not file a joint return and
1632	1632	14 have a net income of $500,000 or less:
1633	1633	15 (A) 4.00% of the portion of the taxpayer's net
1634	1634	16 income that does not exceed $25,000;
1635	1635	17 (B) 4.125% of the portion of the taxpayer's net
1636	1636	18 income that exceeds $25,000 but does not exceed
1637	1637	19 $50,000;
1638	1638	20 (C) 4.25% of the portion of the taxpayer's net
1639	1639	21 income that exceeds $50,000 but does not exceed
1640	1640	22 $100,000;
1641	1641	23 (D) 4.75% of the portion of the taxpayer's net
1642	1642	24 income that exceeds $100,000 but does not exceed
1643	1643	25 $150,000;
1644	1644
1645	1645
1646	1646
1647	1647
1648	1648
1649	1649	SB2105 - 45 - LRB103 29118 HLH 55504 b
1650	1650
1651	1651
1652	1652	SB2105- 46 -LRB103 29118 HLH 55504 b SB2105 - 46 - LRB103 29118 HLH 55504 b
1653	1653	SB2105 - 46 - LRB103 29118 HLH 55504 b
1654	1654	1 (E) 4.95% of the portion of the taxpayer's net
1655	1655	2 income that exceeds 150,000 but does not exceed
1656	1656	3 $250,000;
1657	1657	4 (F) 5.45% of the portion of the taxpayer's net
1658	1658	5 income that exceeds 250,000 but does not exceed
1659	1659	6 $375,000;
1660	1660	7 (G) 5.95% of the portion of the taxpayer's net
1661	1661	8 income that exceeds $375,000 but does not exceed
1662	1662	9 $500,000; and
1663	1663	10 (2) for taxpayers who do not file a joint return and
1664	1664	11 have a net income that exceeds $500,000, 6.95% of the
1665	1665	12 taxpayer's net income;
1666	1666	13 (3) for taxpayers who file a joint return and have a
1667	1667	14 net income of $1,000,000 or less:
1668	1668	15 (A) 4.00% of the portion of the taxpayer's net
1669	1669	16 income that does not exceed $50,000;
1670	1670	17 (B) 4.125% of the portion of the taxpayer's net
1671	1671	18 income that exceeds $50,000 but does not exceed
1672	1672	19 $100,000;
1673	1673	20 (C) 4.25% of the portion of the taxpayer's net
1674	1674	21 income that exceeds $100,000 but does not exceed
1675	1675	22 $200,000;
1676	1676	23 (D) 4.75% of the portion of the taxpayer's net
1677	1677	24 income that exceeds$200,000 but does not exceed
1678	1678	25 $300,000;
1679	1679	26 (E) 4.95% of the portion of the taxpayer's net
1680	1680
1681	1681
1682	1682
1683	1683
1684	1684
1685	1685	SB2105 - 46 - LRB103 29118 HLH 55504 b
1686	1686
1687	1687
1688	1688	SB2105- 47 -LRB103 29118 HLH 55504 b SB2105 - 47 - LRB103 29118 HLH 55504 b
1689	1689	SB2105 - 47 - LRB103 29118 HLH 55504 b
1690	1690	1 income that exceeds $300,000 but does not exceed
1691	1691	2 $500,000; and
1692	1692	3 (F) 5.45% of the portion of the taxpayer's net
1693	1693	4 income that exceeds $500,000 but does not exceed
1694	1694	5 $750,000; and
1695	1695	6 (G) 5.95% of the portion of the taxpayer's net
1696	1696	7 income that exceeds $750,000 but does not exceed
1697	1697	8 $1,000,000; and
1698	1698	9 (4) for taxpayers who file a joint return and have a
1699	1699	10 net income of more than $1,000,000, 6.95% of the
1700	1700	11 taxpayer's net income.
1701	1701
1702	1702
1703	1703
1704	1704
1705	1705
1706	1706	SB2105 - 47 - LRB103 29118 HLH 55504 b