Illinois 2023-2024 Regular Session

Illinois Senate Bill SB3233 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 SB3233 Introduced 2/6/2024, by Sen. Robert Peters SYNOPSIS AS INTRODUCED: New Act35 ILCS 5/241 new215 ILCS 5/409 from Ch. 73, par. 1021215 ILCS 5/444 from Ch. 73, par. 1056 Creates the Build Illinois Homes Tax Credit Act. Provides that owners of qualified low-income housing developments are eligible for credits against the taxes imposed by the Illinois Income Tax Act or taxes, penalties, fees, charges, and payments imposed by the Illinois Insurance Code. Amends the Illinois Income Tax Act and the Illinois Insurance Code to make conforming changes. Effective immediately. LRB103 38198 HLH 68331 b A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB3233 Introduced 2/6/2024, by Sen. Robert Peters SYNOPSIS AS INTRODUCED: New Act35 ILCS 5/241 new215 ILCS 5/409 from Ch. 73, par. 1021215 ILCS 5/444 from Ch. 73, par. 1056 New Act 35 ILCS 5/241 new 215 ILCS 5/409 from Ch. 73, par. 1021 215 ILCS 5/444 from Ch. 73, par. 1056 Creates the Build Illinois Homes Tax Credit Act. Provides that owners of qualified low-income housing developments are eligible for credits against the taxes imposed by the Illinois Income Tax Act or taxes, penalties, fees, charges, and payments imposed by the Illinois Insurance Code. Amends the Illinois Income Tax Act and the Illinois Insurance Code to make conforming changes. Effective immediately. LRB103 38198 HLH 68331 b LRB103 38198 HLH 68331 b A BILL FOR
2	2	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB3233 Introduced 2/6/2024, by Sen. Robert Peters SYNOPSIS AS INTRODUCED:
3	3	New Act35 ILCS 5/241 new215 ILCS 5/409 from Ch. 73, par. 1021215 ILCS 5/444 from Ch. 73, par. 1056 New Act 35 ILCS 5/241 new 215 ILCS 5/409 from Ch. 73, par. 1021 215 ILCS 5/444 from Ch. 73, par. 1056
4	4	New Act
5	5	35 ILCS 5/241 new
6	6	215 ILCS 5/409 from Ch. 73, par. 1021
7	7	215 ILCS 5/444 from Ch. 73, par. 1056
8	8	Creates the Build Illinois Homes Tax Credit Act. Provides that owners of qualified low-income housing developments are eligible for credits against the taxes imposed by the Illinois Income Tax Act or taxes, penalties, fees, charges, and payments imposed by the Illinois Insurance Code. Amends the Illinois Income Tax Act and the Illinois Insurance Code to make conforming changes. Effective immediately.
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11	11	A BILL FOR
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14	14	1 AN ACT concerning revenue.
15	15	2 Be it enacted by the People of the State of Illinois,
16	16	3 represented in the General Assembly:
17	17	4 Section 1. Short title. This Act may be cited as the Build
18	18	5 Illinois Homes Tax Credit Act.
19	19	6 Section 5. Definitions. As used in this Act, unless the
20	20	7 context clearly requires otherwise:
21	21	8 "Allocation schedule certification" means a certification
22	22	9 issued by the owner of a qualified development, or by the
23	23	10 owner's designee, under subsection (d) of Section 15 of this
24	24	11 Act. The certification shall include the following:
25	25	12 (1) the building identification number for each
26	26	13 building included in the qualified development;
27	27	14 (2) the calendar year in which the last building of
28	28	15 the qualified development was placed in service;
29	29	16 (3) the amount of the credit allowed for each year of
30	30	17 the credit period;
31	31	18 (4) the amount of credit allocated to each qualified
32	32	19 taxpayer for the qualified development for the applicable
33	33	20 tax year; and
34	34	21 (5) confirmation of whether each qualified taxpayer
35	35	22 elects to apply the credit to income tax or insurance
36	36	23 premium tax.
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40	40	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB3233 Introduced 2/6/2024, by Sen. Robert Peters SYNOPSIS AS INTRODUCED:
41	41	New Act35 ILCS 5/241 new215 ILCS 5/409 from Ch. 73, par. 1021215 ILCS 5/444 from Ch. 73, par. 1056 New Act 35 ILCS 5/241 new 215 ILCS 5/409 from Ch. 73, par. 1021 215 ILCS 5/444 from Ch. 73, par. 1056
42	42	New Act
43	43	35 ILCS 5/241 new
44	44	215 ILCS 5/409 from Ch. 73, par. 1021
45	45	215 ILCS 5/444 from Ch. 73, par. 1056
46	46	Creates the Build Illinois Homes Tax Credit Act. Provides that owners of qualified low-income housing developments are eligible for credits against the taxes imposed by the Illinois Income Tax Act or taxes, penalties, fees, charges, and payments imposed by the Illinois Insurance Code. Amends the Illinois Income Tax Act and the Illinois Insurance Code to make conforming changes. Effective immediately.
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49	49	A BILL FOR
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55	55	New Act
56	56	35 ILCS 5/241 new
57	57	215 ILCS 5/409 from Ch. 73, par. 1021
58	58	215 ILCS 5/444 from Ch. 73, par. 1056
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77	77	1 "Authority" means:
78	78	2 (1) the Illinois Housing Development Authority; or
79	79	3 (2) the City of Chicago Department of Housing.
80	80	4 "Building identification number" means the number assigned
81	81	5 to a building within the qualified development by an Authority
82	82	6 when allocating the federal tax credit.
83	83	7 "Credit" means the credit allowed under this Act.
84	84	8 "Credit period" means a period of 6 taxable years
85	85	9 beginning with the taxable year in which a qualified
86	86	10 development is placed in service. No credit period may include
87	87	11 a taxable year beginning prior to January 1, 2025. If a
88	88	12 qualified development consists of more than one building, then
89	89	13 the qualified development is deemed to be placed in service in
90	90	14 the taxable year in which the last building of the qualified
91	91	15 development is placed in service.
92	92	16 "Department" means the Department of Revenue.
93	93	17 "Federal tax credit" means the federal low-income housing
94	94	18 tax credit provided by Section 42 of the federal Internal
95	95	19 Revenue Code, including federal low-income housing tax credits
96	96	20 issued under 26 U.S.C. 42(h)(3) and 26 U.S.C. 42(h)(4).
97	97	21 "Qualified basis" means the qualified basis of the
98	98	22 qualified development as determined under Section 42 of the
99	99	23 federal Internal Revenue Code of 1986.
100	100	24 "Qualified development" means a qualified low-income
101	101	25 housing project, as that term is defined in Section 42 of the
102	102	26 federal Internal Revenue Code of 1986, that is located in the
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113	113	1 State and is determined to be eligible for the federal tax
114	114	2 credit set forth in Section 42 of the Internal Revenue Code.
115	115	3 "Qualified taxpayer" means an individual, person, firm,
116	116	4 corporation, or other entity that owns a direct or indirect
117	117	5 interest in a qualified development and that is subject to the
118	118	6 taxes imposed by subsections (a) and (b) of Section 201 of the
119	119	7 Illinois Income Tax Act or any privilege tax or retaliatory
120	120	8 tax, penalty, fee, charge, or payment imposed by the Illinois
121	121	9 Insurance Code.
122	122	10 "Reservation letter" means a reservation letter issued by
123	123	11 the Illinois Housing Development Authority or a reservation
124	124	12 agreement issued by the City of Chicago Department of Housing.
125	125	13 "State credit eligibility statement" means a statement
126	126	14 issued by an Authority under Section 10 or documents submitted
127	127	15 in satisfaction of a statement as allowed under Section 10.
128	128	16 "State tax return" means the income tax return filed with
129	129	17 the Department or the privilege and retaliatory tax return
130	130	18 filed with the Department of Insurance, as applicable.
131	131	19 Section 10. State credit eligibility statements. Following
132	132	20 construction or rehabilitation of the qualified development,
133	133	21 the applicable Authority shall issue a State credit
134	134	22 eligibility statement with respect to each building located in
135	135	23 the qualified development certifying that the building
136	136	24 qualifies for the credit under this Act and specifying:
137	137	25 (1) the calendar year in which the last building of
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148	148	1 the qualified development was placed in service;
149	149	2 (2) the amount of the credit allowed for each year of
150	150	3 the credit period;
151	151	4 (3) the maximum qualified basis of the qualified
152	152	5 development taken into account in determining such annual
153	153	6 credit amount;
154	154	7 (4) a building identification number; and
155	155	8 (5) that the qualified development is eligible for and
156	156	9 has applied to receive a federal tax credit.
157	157	10 The State credit eligibility statement shall be issued by
158	158	11 an Authority simultaneously with IRS Form 8609. An Authority
159	159	12 may issue, and the Department and Department of Insurance may
160	160	13 accept, an IRS Form 8609, including any additional statements
161	161	14 attached to the IRS Form 8609, and the reservation letter
162	162	15 issued by the Authority for the qualified development in
163	163	16 satisfaction of both federal requirements and the requirements
164	164	17 set forth in this Section.
165	165	18 The State credit eligibility statement shall include a
166	166	19 section to be completed by the owner of the qualified
167	167	20 development annually for each year of the credit period
168	168	21 certifying that the qualified development conforms with all
169	169	22 compliance requirements, including all federal compliance
170	170	23 requirements for the federal tax credit. The State credit
171	171	24 eligibility statement shall be filed with the project owner's
172	172	25 State tax return annually for each year of the credit period.
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183	183	1 Section 15. Credit for low-income housing developments.
184	184	2 (a) For taxable years beginning on or after January 1,
185	185	3 2025, an Authority may award a credit to the owner of a
186	186	4 qualified development simultaneously with the federal tax
187	187	5 credit in an amount determined by the Authority, subject to
188	188	6 the following guidelines:
189	189	7 (1) the Authority must find that the credit is
190	190	8 necessary for the financial feasibility of the qualified
191	191	9 development;
192	192	10 (2) the aggregate amount of credits awarded to
193	193	11 qualified developments for each calendar year shall not
194	194	12 exceed $20,000,000, plus the amount of unallocated
195	195	13 credits, if any, from the preceding calendar year, plus
196	196	14 the amount of any credit recaptured or otherwise returned
197	197	15 to an Authority since the preceding calendar year;
198	198	16 (3) of the $20,000,000 annual allocation:
199	199	17 (A) 75.5% of the available credits for each
200	200	18 calendar year shall be awarded by the Illinois Housing
201	201	19 Development Authority, plus any credits the Illinois
202	202	20 Housing Development Authority did not award from prior
203	203	21 calendar years, plus the amount of any credits
204	204	22 recaptured or otherwise returned to the Illinois
205	205	23 Housing Development Authority from prior calendar
206	206	24 years; and
207	207	25 (B) 24.5% of the available credits in each
208	208	26 calendar year shall be awarded by the City of Chicago
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219	219	1 Department of Housing, plus any credits the City of
220	220	2 Chicago Department of Housing did not award from prior
221	221	3 calendar years, plus the amount of any credits
222	222	4 recaptured or otherwise returned to the City of
223	223	5 Chicago Department of Housing since the prior calendar
224	224	6 year; and
225	225	7 (4) unless otherwise provided in this Act, or unless
226	226	8 the context clearly requires otherwise, an Authority must
227	227	9 determine eligibility for credits and award credits in
228	228	10 accordance with the standards and requirements set forth
229	229	11 in Section 42 of the federal Internal Revenue Code of 1986
230	230	12 and, to the extent possible, use the same forms that are
231	231	13 used in administering the credit under Section 42 of the
232	232	14 federal Internal Revenue Code of 1986.
233	233	15 (b) For tax years during the credit period, any qualified
234	234	16 taxpayer is allowed a credit, as provided in this Act, against
235	235	17 either of the following: (i) the taxes imposed by subsections
236	236	18 (a) and (b) of Section 201 of the Illinois Income Tax Act; or
237	237	19 (ii) any privilege tax or retaliatory tax, penalty, fee,
238	238	20 charge, or payment imposed under the Illinois Insurance Code.
239	239	21 (c) A qualified taxpayer may claim a credit under this Act
240	240	22 so long as the taxpayer's direct or indirect interest in the
241	241	23 qualified development is acquired prior to the filing of its
242	242	24 tax return claiming the credit. On or before March 31
243	243	25 following each year of the credit period, the owner must
244	244	26 submit to the Department, the Department of Insurance, and the
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255	255	1 applicable Authority an allocation schedule certification, in
256	256	2 an electronic format prescribed by the Department, the
257	257	3 Department of Insurance, and the Authority, respectively,
258	258	4 detailing the amount of the credit allocated to the qualified
259	259	5 taxpayer for the applicable year and stating whether the
260	260	6 qualified taxpayer has elected to claim the credit against the
261	261	7 taxpayer's State income tax or insurance privilege tax or
262	262	8 retaliatory tax liability. The taxpayer may assign to a
263	263	9 designee the duty of preparing and submitting the allocation
264	264	10 schedule certification. In that case, the designee must
265	265	11 provide the allocation schedule certification to the
266	266	12 Department, the Department of Insurance, and the applicable
267	267	13 Authority on or before the deadline for submission. The
268	268	14 qualified taxpayer must notify the Department, the Department
269	269	15 of Insurance, and the applicable Authority if it assigns that
270	270	16 duty to its designee.
271	271	17 The allocation schedule certification submitted under this
272	272	18 Section may be amended if the State credit eligibility
273	273	19 statement for a project is received after the deadline for
274	274	20 filing the allocation schedule certification. Any amendment to
275	275	21 an allocation schedule certification shall be filed before the
276	276	22 taxpayer attempts to claim tax credits associated with the
277	277	23 applicable State credit eligibility statement. Each qualified
278	278	24 taxpayer is allowed to claim its awarded amount of credit
279	279	25 subject to any restrictions set forth in this Section. If the
280	280	26 credit is to be taken against the income tax and the qualified
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291	291	1 taxpayer is a pass-through entity, then the provisions of
292	292	2 Section 251 of the Illinois Income Tax Act apply.
293	293	3 (d) No credit may be awarded under this Act unless the
294	294	4 qualified development is the subject of a recorded restrictive
295	295	5 covenant requiring the development to be maintained and
296	296	6 operated as a qualified development; this requirement for a
297	297	7 recorded restrictive covenant may be satisfied by the
298	298	8 agreement for an extended low-income housing commitment
299	299	9 required for the federal tax credits as defined in Section
300	300	10 42(h)(6)(B) of the federal Internal Revenue Code of 1986.
301	301	11 (e) If, during a taxable year, there is a determination
302	302	12 that no recorded restrictive covenant meeting the requirements
303	303	13 of subsection (d) was in effect as of the beginning of that
304	304	14 year, the determination shall not apply to any period before
305	305	15 that year and subsection (e) shall be applied without regard
306	306	16 to that determination if the failure is corrected within one
307	307	17 year after the date of the determination.
308	308	18 (f) The tax credit under this Act may not reduce the
309	309	19 taxpayer's liability to less than zero. If the amount of the
310	310	20 tax credit exceeds the tax liability for the year, the excess
311	311	21 may be carried forward and applied to the tax liability of the
312	312	22 5 taxable years following the excess credit year. The credit
313	313	23 must be applied to the earliest year for which there is a tax
314	314	24 liability. If there are credits from more than one tax year
315	315	25 that are available to offset a liability, then the earlier
316	316	26 credit must be applied first. Credits that are initially
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327	327	1 claimed against taxes imposed by the Illinois Income Tax Act
328	328	2 may be carried forward only against the taxpayer's future
329	329	3 Illinois Income Tax liability. Credits that are initially
330	330	4 claimed against taxes, penalties, fees, charges, and payments
331	331	5 imposed by the Illinois Insurance Code may be carried forward
332	332	6 only against taxes, penalties, fees, charges, and payments
333	333	7 imposed by the Illinois Insurance Code. Credits that are not
334	334	8 claimed or carried forward may not be refunded to the
335	335	9 taxpayer. The qualified taxpayer is solely responsible for
336	336	10 correctly filing tax returns, and an Authority is not
337	337	11 responsible for monitoring the calculation of taxes under this
338	338	12 Section.
339	339	13 (g) By March 31, 2025 and by March 31 of each year
340	340	14 thereafter, each Authority shall provide to the Department and
341	341	15 the Department of Insurance an electronic file containing all
342	342	16 data related to all State credit eligibility statements issued
343	343	17 during the preceding year in the manner and form as provided by
344	344	18 each respective Department.
345	345	19 (h) Each Authority is entitled to a reservation fee of 1%
346	346	20 of the credit awarded under this Section for each year of the
347	347	21 award to support the cost of compliance monitoring. An
348	348	22 Authority may exercise the option to impose a compliance fee
349	349	23 or a penalty in the exercise of its compliance monitoring
350	350	24 function under this Act.
351	351	25 Section 20. Recapture. If, under Section 42 of the
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362	362	1 Internal Revenue Code, a portion of any federal tax credit
363	363	2 claimed with respect to a qualified development for which a
364	364	3 credit has been awarded under this Act is required by the
365	365	4 Internal Revenue Service to be recaptured during the first 6
366	366	5 years after a project is placed in service, then, within 60
367	367	6 days after becoming aware of the federal tax credit recapture,
368	368	7 the project owner shall provide the Department, the Department
369	369	8 of Insurance, and the applicable Authority with notice of the
370	370	9 federal tax credit recapture. Notice shall be provided in the
371	371	10 manner and form as provided by the Department, the Department
372	372	11 of Insurance, and the Authority, respectively. If an Authority
373	373	12 issues a federal Form 8823 to the owner of a qualified
374	374	13 development that has been awarded a credit under this Act, and
375	375	14 an Authority has not been notified within 6 months of filing
376	376	15 the Form 8823 that the noncompliance has been remedied, an
377	377	16 Authority shall submit the Form 8823 to the Department or
378	378	17 Department of Insurance, as applicable. The amount of credit
379	379	18 subject to recapture shall be proportionately equal to the
380	380	19 amount of the qualified development's federal tax credits that
381	381	20 are subject to recapture. If the project owner (or one of the
382	382	21 project owner's direct or indirect members) fails to notify
383	383	22 the Department or the Department of Insurance, as applicable,
384	384	23 of any recapture of the federal tax credit, then the entire
385	385	24 amount of the State tax credit awarded for the qualified
386	386	25 development is subject to recapture. The qualified taxpayer
387	387	26 subject to recapture shall increase the qualified taxpayer's
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398	398	1 tax by the amount of any credit subject to recapture in the tax
399	399	2 year the qualified taxpayer is notified of the recapture. If
400	400	3 multiple taxpayers claimed credit with respect to the building
401	401	4 for which credit is to be recaptured, each of those taxpayers
402	402	5 shall be liable for a portion of the recapture equal to the
403	403	6 percentages of credit with respect to the building originally
404	404	7 claimed by the taxpayer.
405	405	8 Section 25. Filing requirements. An owner of a qualified
406	406	9 development that has been awarded a credit and each qualified
407	407	10 taxpayer claiming any portion of the credit must file with
408	408	11 their State tax returns a copy of the State credit eligibility
409	409	12 statement issued by an Authority for that qualified
410	410	13 development. In addition, the owner of a qualified development
411	411	14 or its designee shall file a copy of the allocation schedule
412	412	15 certification prior to any tax return being filed claiming a
413	413	16 State credit for such qualified development. A qualified
414	414	17 taxpayer receiving any allocated portion of a credit through a
415	415	18 pass-through entity shall attach to its State tax return a
416	416	19 copy of the Schedule K-1-P for that taxable year.
417	417	20 Section 30. Compliance monitoring. An Authority, in
418	418	21 consultation with the Department and Department of Insurance,
419	419	22 shall monitor and oversee compliance with the provisions of
420	420	23 this Act and shall report specific occurrences of
421	421	24 noncompliance to the Department and the Department of
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432	432	1 Insurance in the manner and form as provided by the Department
433	433	2 and the Department of Insurance. An Authority shall make every
434	434	3 effort to monitor and report noncompliance using the same
435	435	4 procedures used for compliance monitoring of the federal tax
436	436	5 credits.
437	437	6 Section 35. Report to the General Assembly.
438	438	7 (a) Each Authority must, by March 31, 2026 and by March 31
439	439	8 of each year thereafter, provide a written report to the
440	440	9 General Assembly and must publish that report on its website.
441	441	10 (b) The report shall:
442	442	11 (1) set forth the number of qualified developments
443	443	12 that have been awarded tax credits under this Act during
444	444	13 the calendar year and the total number of units supported
445	445	14 by each qualified development;
446	446	15 (2) describe each qualified development that has been
447	447	16 awarded tax credits under this Act, including, without
448	448	17 limitation, the geographic location of the qualified
449	449	18 development, the household type, the income levels
450	450	19 intended to be served by the qualified development, and
451	451	20 the rents or set-asides authorized for each qualified
452	452	21 development;
453	453	22 (3) provide housing market information that
454	454	23 demonstrates how the qualified developments supported by
455	455	24 the tax credits are addressing the need for affordable
456	456	25 housing within the communities they are intended to serve
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467	467	1 as well as information about any remaining disparities in
468	468	2 the affordability of housing within those communities; and
469	469	3 (4) provide information about the percentage of
470	470	4 qualified developments that were awarded credits and that
471	471	5 received incentive scoring points as a result of the
472	472	6 general contractor, property manager, architect, or
473	473	7 sponsor being certified under the Business Enterprise
474	474	8 Program for Minorities, Females, and Persons with a
475	475	9 Disability.
476	476	10 Section 40. Exempt from automatic sunset. The credit under
477	477	11 this Act is exempt from the provisions of Section 250 of the
478	478	12 Illinois Income Tax Act.
479	479	13 Section 900. The Illinois Income Tax Act is amended by
480	480	14 adding Section 241 as follows:
481	481	15 (35 ILCS 5/241 new)
482	482	16 Sec. 241. Build Illinois Homes Tax Credit Act.
483	483	17 (a) For taxable years beginning on or after January 1,
484	484	18 2025, any eligible taxpayer with respect to a credit awarded
485	485	19 in accordance with the Build Illinois Homes Tax Credit Act
486	486	20 that is named on an allocation schedule certification for a
487	487	21 particular tax year is entitled to a credit against the taxes
488	488	22 imposed by subsections (a) and (b) of Section 201 as provided
489	489	23 in the Build Illinois Homes Tax Credit Act.
490	490
491	491
492	492
493	493
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496	496
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500	500	1 (b) The taxpayer shall attach a copy of the allocation
501	501	2 schedule certification and the State credit eligibility
502	502	3 certificate issued under the Build Illinois Homes Tax Credit
503	503	4 Act to the tax return on which the credits are to be claimed.
504	504	5 (c) If, during any taxable year, a taxpayer is notified of
505	505	6 a recapture of a credit previously claimed on a State income
506	506	7 tax return in accordance with 42 U.S.C. 42, the tax imposed
507	507	8 under subsections (a) and (b) of Section 201 for that taxpayer
508	508	9 for that taxable year shall be increased. The amount of the
509	509	10 increase shall be determined by (i) recomputing the Build
510	510	11 Illinois Homes Tax Credit that would have been allowed for the
511	511	12 year in which the credit was originally allowed by eliminating
512	512	13 the recaptured amount from such computation, and (ii)
513	513	14 subtracting that recomputed credit from the amount of credit
514	514	15 previously allowed. No Build Illinois Homes Tax Credit shall
515	515	16 be allowed with respect to any credit subject to a recapture
516	516	17 notice for any taxable year ending after the issuance of a
517	517	18 recapture notice.
518	518	19 (d) This Section is exempt from the provisions of Section
519	519	20 250.
520	520	21 Section 905. The Illinois Insurance Code is amended by
521	521	22 changing Sections 409 and 444 as follows:
522	522	23 (215 ILCS 5/409) (from Ch. 73, par. 1021)
523	523	24 Sec. 409. Annual privilege tax payable by companies.
524	524
525	525
526	526
527	527
528	528
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530	530
531	531
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533	533	SB3233 - 15 - LRB103 38198 HLH 68331 b
534	534	1 (1) As of January 1, 1999 for all health maintenance
535	535	2 organization premiums written; as of July 1, 1998 for all
536	536	3 premiums written as accident and health business, voluntary
537	537	4 health service plan business, dental service plan business, or
538	538	5 limited health service organization business; and as of
539	539	6 January 1, 1998 for all other types of insurance premiums
540	540	7 written, every company doing any form of insurance business in
541	541	8 this State, including, but not limited to, every risk
542	542	9 retention group, and excluding all fraternal benefit
543	543	10 societies, all farm mutual companies, all religious charitable
544	544	11 risk pooling trusts, and excluding all statutory residual
545	545	12 market and special purpose entities in which companies are
546	546	13 statutorily required to participate, whether incorporated or
547	547	14 otherwise, shall pay, for the privilege of doing business in
548	548	15 this State, to the Director for the State treasury a State tax
549	549	16 equal to 0.5% of the net taxable premium written, together
550	550	17 with any amounts due under Section 444 of this Code, except
551	551	18 that the tax to be paid on any premium derived from any
552	552	19 accident and health insurance or on any insurance business
553	553	20 written by any company operating as a health maintenance
554	554	21 organization, voluntary health service plan, dental service
555	555	22 plan, or limited health service organization shall be equal to
556	556	23 0.4% of such net taxable premium written, together with any
557	557	24 amounts due under Section 444. Upon the failure of any company
558	558	25 to pay any such tax due, the Director may, by order, revoke or
559	559	26 suspend the company's certificate of authority after giving 20
560	560
561	561
562	562
563	563
564	564
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566	566
567	567
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569	569	SB3233 - 16 - LRB103 38198 HLH 68331 b
570	570	1 days written notice to the company, or commence proceedings
571	571	2 for the suspension of business in this State under the
572	572	3 procedures set forth by Section 401.1 of this Code. The gross
573	573	4 taxable premium written shall be the gross amount of premiums
574	574	5 received on direct business during the calendar year on
575	575	6 contracts covering risks in this State, except premiums on
576	576	7 annuities, premiums on which State premium taxes are
577	577	8 prohibited by federal law, premiums paid by the State for
578	578	9 health care coverage for Medicaid eligible insureds as
579	579	10 described in Section 5-2 of the Illinois Public Aid Code,
580	580	11 premiums paid for health care services included as an element
581	581	12 of tuition charges at any university or college owned and
582	582	13 operated by the State of Illinois, premiums on group insurance
583	583	14 contracts under the State Employees Group Insurance Act of
584	584	15 1971, and except premiums for deferred compensation plans for
585	585	16 employees of the State, units of local government, or school
586	586	17 districts. The net taxable premium shall be the gross taxable
587	587	18 premium written reduced only by the following:
588	588	19 (a) the amount of premiums returned thereon which
589	589	20 shall be limited to premiums returned during the same
590	590	21 preceding calendar year and shall not include the return
591	591	22 of cash surrender values or death benefits on life
592	592	23 policies including annuities;
593	593	24 (b) dividends on such direct business that have been
594	594	25 paid in cash, applied in reduction of premiums or left to
595	595	26 accumulate to the credit of policyholders or annuitants.
596	596
597	597
598	598
599	599
600	600
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602	602
603	603
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605	605	SB3233 - 17 - LRB103 38198 HLH 68331 b
606	606	1 In the case of life insurance, no deduction shall be made
607	607	2 for the payment of deferred dividends paid in cash to
608	608	3 policyholders on maturing policies; dividends left to
609	609	4 accumulate to the credit of policyholders or annuitants
610	610	5 shall be included as gross taxable premium written when
611	611	6 such dividend accumulations are applied to purchase
612	612	7 paid-up insurance or to shorten the endowment or premium
613	613	8 paying period.
614	614	9 (2) The annual privilege tax payment due from a company
615	615	10 under subsection (4) of this Section may be reduced by: (a) the
616	616	11 excess amount, if any, by which the aggregate income taxes
617	617	12 paid by the company, on a cash basis, for the preceding
618	618	13 calendar year under Sections 601 and 803 of the Illinois
619	619	14 Income Tax Act exceed 1.5% of the company's net taxable
620	620	15 premium written for that prior calendar year, as determined
621	621	16 under subsection (1) of this Section; and (b) the amount of any
622	622	17 fire department taxes paid by the company during the preceding
623	623	18 calendar year under Section 11-10-1 of the Illinois Municipal
624	624	19 Code. Any deductible amount or offset allowed under items (a)
625	625	20 and (b) of this subsection for any calendar year will not be
626	626	21 allowed as a deduction or offset against the company's
627	627	22 privilege tax liability for any other taxing period or
628	628	23 calendar year.
629	629	24 (3) If a company survives or was formed by a merger,
630	630	25 consolidation, reorganization, or reincorporation, the
631	631	26 premiums received and amounts returned or paid by all
632	632
633	633
634	634
635	635
636	636
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638	638
639	639
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641	641	SB3233 - 18 - LRB103 38198 HLH 68331 b
642	642	1 companies party to the merger, consolidation, reorganization,
643	643	2 or reincorporation shall, for purposes of determining the
644	644	3 amount of the tax imposed by this Section, be regarded as
645	645	4 received, returned, or paid by the surviving or new company.
646	646	5 (4)(a) All companies subject to the provisions of this
647	647	6 Section shall make an annual return for the preceding calendar
648	648	7 year on or before March 15 setting forth such information on
649	649	8 such forms as the Director may reasonably require. Payments of
650	650	9 quarterly installments of the taxpayer's total estimated tax
651	651	10 for the current calendar year shall be due on or before April
652	652	11 15, June 15, September 15, and December 15 of such year, except
653	653	12 that all companies transacting insurance in this State whose
654	654	13 annual tax for the immediately preceding calendar year was
655	655	14 less than $5,000 shall make only an annual return. Failure of a
656	656	15 company to make the annual payment, or to make the quarterly
657	657	16 payments, if required, of at least 25% of either (i) the total
658	658	17 tax paid during the previous calendar year or (ii) 80% of the
659	659	18 actual tax for the current calendar year shall subject it to
660	660	19 the penalty provisions set forth in Section 412 of this Code.
661	661	20 (b) Notwithstanding the foregoing provisions, no annual
662	662	21 return shall be required or made on March 15, 1998, under this
663	663	22 subsection. For the calendar year 1998:
664	664	23 (i) each health maintenance organization shall have no
665	665	24 estimated tax installments;
666	666	25 (ii) all companies subject to the tax as of July 1,
667	667	26 1998 as set forth in subsection (1) shall have estimated
668	668
669	669
670	670
671	671
672	672
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674	674
675	675
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677	677	SB3233 - 19 - LRB103 38198 HLH 68331 b
678	678	1 tax installments due on September 15 and December 15 of
679	679	2 1998 which installments shall each amount to no less than
680	680	3 one-half of 80% of the actual tax on its net taxable
681	681	4 premium written during the period July 1, 1998, through
682	682	5 December 31, 1998; and
683	683	6 (iii) all other companies shall have estimated tax
684	684	7 installments due on June 15, September 15, and December 15
685	685	8 of 1998 which installments shall each amount to no less
686	686	9 than one-third of 80% of the actual tax on its net taxable
687	687	10 premium written during the calendar year 1998.
688	688	11 In the year 1999 and thereafter all companies shall make
689	689	12 annual and quarterly installments of their estimated tax as
690	690	13 provided by paragraph (a) of this subsection.
691	691	14 (5) In addition to the authority specifically granted
692	692	15 under Article XXV of this Code, the Director shall have such
693	693	16 authority to adopt rules and establish forms as may be
694	694	17 reasonably necessary for purposes of determining the
695	695	18 allocation of Illinois corporate income taxes paid under
696	696	19 subsections (a) through (d) of Section 201 of the Illinois
697	697	20 Income Tax Act amongst members of a business group that files
698	698	21 an Illinois corporate income tax return on a unitary basis,
699	699	22 for purposes of regulating the amendment of tax returns, for
700	700	23 purposes of defining terms, and for purposes of enforcing the
701	701	24 provisions of Article XXV of this Code. The Director shall
702	702	25 also have authority to defer, waive, or abate the tax imposed
703	703	26 by this Section if in his opinion the company's solvency and
704	704
705	705
706	706
707	707
708	708
709	709	SB3233 - 19 - LRB103 38198 HLH 68331 b
710	710
711	711
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713	713	SB3233 - 20 - LRB103 38198 HLH 68331 b
714	714	1 ability to meet its insured obligations would be immediately
715	715	2 threatened by payment of the tax due.
716	716	3 (6) This Section is subject to the provisions of Section
717	717	4 10 of the New Markets Development Program Act.
718	718	5 (7) This Section is subject to the provisions of the Build
719	719	6 Illinois Homes Tax Credit Act.
720	720	7 (Source: P.A. 97-813, eff. 7-13-12; 98-1169, eff. 1-9-15.)
721	721	8 (215 ILCS 5/444) (from Ch. 73, par. 1056)
722	722	9 Sec. 444. Retaliation.
723	723	10 (1) Whenever the existing or future laws of any other
724	724	11 state or country shall require of companies incorporated or
725	725	12 organized under the laws of this State as a condition
726	726	13 precedent to their doing business in such other state or
727	727	14 country, compliance with laws, rules, regulations, and
728	728	15 prohibitions more onerous or burdensome than the rules and
729	729	16 regulations imposed by this State on foreign or alien
730	730	17 companies, or shall require any deposit of securities or other
731	731	18 obligations in such state or country, for the protection of
732	732	19 policyholders or otherwise or require of such companies or
733	733	20 agents thereof or brokers the payment of penalties, fees,
734	734	21 charges, or taxes greater than the penalties, fees, charges,
735	735	22 or taxes required in the aggregate for like purposes by this
736	736	23 Code or any other law of this State, of foreign or alien
737	737	24 companies, agents thereof or brokers, then such laws, rules,
738	738	25 regulations, and prohibitions of said other state or country
739	739
740	740
741	741
742	742
743	743
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745	745
746	746
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748	748	SB3233 - 21 - LRB103 38198 HLH 68331 b
749	749	1 shall apply to companies incorporated or organized under the
750	750	2 laws of such state or country doing business in this State, and
751	751	3 all such companies, agents thereof, or brokers doing business
752	752	4 in this State, shall be required to make deposits, pay
753	753	5 penalties, fees, charges, and taxes, in amounts equal to those
754	754	6 required in the aggregate for like purposes of Illinois
755	755	7 companies doing business in such state or country, agents
756	756	8 thereof or brokers. Whenever any other state or country shall
757	757	9 refuse to permit any insurance company incorporated or
758	758	10 organized under the laws of this State to transact business
759	759	11 according to its usual plan in such other state or country, the
760	760	12 director may, if satisfied that such company of this State is
761	761	13 solvent, properly managed, and can operate legally under the
762	762	14 laws of such other state or country, forthwith suspend or
763	763	15 cancel the license of every insurance company doing business
764	764	16 in this State which is incorporated or organized under the
765	765	17 laws of such other state or country to the extent that it
766	766	18 insures in this State against any of the risks or hazards which
767	767	19 are sought to be insured against by the company of this State
768	768	20 in such other state or country.
769	769	21 (2) The provisions of this Section shall not apply to
770	770	22 residual market or special purpose assessments or guaranty
771	771	23 fund or guaranty association assessments, both under the laws
772	772	24 of this State and under the laws of any other state or country,
773	773	25 and any tax offset or credit for any such assessment shall, for
774	774	26 purposes of this Section, be treated as a tax paid both under
775	775
776	776
777	777
778	778
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781	781
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784	784	SB3233 - 22 - LRB103 38198 HLH 68331 b
785	785	1 the laws of this State and under the laws of any other state or
786	786	2 country.
787	787	3 (3) The terms "penalties", "fees", "charges", and "taxes"
788	788	4 in subsection (1) of this Section shall include: the
789	789	5 penalties, fees, charges, and taxes collected on a cash basis
790	790	6 under State law and referenced within Article XXV exclusive of
791	791	7 any items referenced by subsection (2) of this Section, but
792	792	8 including any tax offset allowed under Section 531.13 of this
793	793	9 Code; the aggregate Illinois corporate income taxes paid under
794	794	10 Sections 601 and 803 of the Illinois Income Tax Act during the
795	795	11 calendar year for which the retaliatory tax calculation is
796	796	12 being made, less the recapture of any Illinois corporate
797	797	13 income tax cash refunds to the extent that the amount of tax
798	798	14 refunded was reported as part of the Illinois basis in the
799	799	15 calculation of the retaliatory tax for a prior tax year,
800	800	16 provided that such recaptured refund shall not exceed the
801	801	17 amount necessary for equivalence of the Illinois basis with
802	802	18 the state of incorporation basis in such tax year, and after
803	803	19 any tax offset allowed under Section 531.13 of this Code;
804	804	20 income or personal property taxes imposed by other states or
805	805	21 countries; penalties, fees, charges, and taxes of other states
806	806	22 or countries imposed for purposes like those of the penalties,
807	807	23 fees, charges, and taxes specified in Article XXV of this Code
808	808	24 exclusive of any item referenced in subsection (2) of this
809	809	25 Section; and any penalties, fees, charges, and taxes required
810	810	26 as a franchise, privilege, or licensing tax for conducting the
811	811
812	812
813	813
814	814
815	815
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817	817
818	818
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821	821	1 business of insurance whether calculated as a percentage of
822	822	2 income, gross receipts, premium, or otherwise.
823	823	3 (4) Nothing contained in this Section or Section 409 or
824	824	4 Section 444.1 is intended to authorize or expand any power of
825	825	5 local governmental units or municipalities to impose taxes,
826	826	6 fees, or charges.
827	827	7 (5) This Section is subject to the provisions of Section
828	828	8 10 of the New Markets Development Program Act.
829	829	9 (6) This Section is subject to the provisions of the Build
830	830	10 Illinois Homes Tax Credit Act.
831	831	11 (Source: P.A. 98-1169, eff. 1-9-15.)
832	832
833	833
834	834
835	835
836	836
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