Illinois 2023-2024 Regular Session

Illinois Senate Bill SB3474 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 SB3474 Introduced 2/8/2024, by Sen. Elgie R. Sims, Jr. SYNOPSIS AS INTRODUCED: 20 ILCS 605/605-1115 new35 ILCS 5/20135 ILCS 5/241 new Amends the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois. Provides that the Department of Commerce and Economic Opportunity shall award income tax credits in an amount equal to 13% of the qualifying quantum information science expenditures made by the taxpayer during the taxable year. Amends the Illinois Income Tax Act to make conforming changes. Further amends the Illinois Income Tax Act to extend the research and development credit to tax years ending before January 1, 2037 (currently, January 1, 2027). Effective immediately. LRB103 36904 HLH 67017 b A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB3474 Introduced 2/8/2024, by Sen. Elgie R. Sims, Jr. SYNOPSIS AS INTRODUCED: 20 ILCS 605/605-1115 new35 ILCS 5/20135 ILCS 5/241 new 20 ILCS 605/605-1115 new 35 ILCS 5/201 35 ILCS 5/241 new Amends the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois. Provides that the Department of Commerce and Economic Opportunity shall award income tax credits in an amount equal to 13% of the qualifying quantum information science expenditures made by the taxpayer during the taxable year. Amends the Illinois Income Tax Act to make conforming changes. Further amends the Illinois Income Tax Act to extend the research and development credit to tax years ending before January 1, 2037 (currently, January 1, 2027). Effective immediately. LRB103 36904 HLH 67017 b LRB103 36904 HLH 67017 b A BILL FOR
2	2	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB3474 Introduced 2/8/2024, by Sen. Elgie R. Sims, Jr. SYNOPSIS AS INTRODUCED:
3	3	20 ILCS 605/605-1115 new35 ILCS 5/20135 ILCS 5/241 new 20 ILCS 605/605-1115 new 35 ILCS 5/201 35 ILCS 5/241 new
4	4	20 ILCS 605/605-1115 new
5	5	35 ILCS 5/201
6	6	35 ILCS 5/241 new
7	7	Amends the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois. Provides that the Department of Commerce and Economic Opportunity shall award income tax credits in an amount equal to 13% of the qualifying quantum information science expenditures made by the taxpayer during the taxable year. Amends the Illinois Income Tax Act to make conforming changes. Further amends the Illinois Income Tax Act to extend the research and development credit to tax years ending before January 1, 2037 (currently, January 1, 2027). Effective immediately.
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10	10	A BILL FOR
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13	13	1 AN ACT concerning revenue.
14	14	2 Be it enacted by the People of the State of Illinois,
15	15	3 represented in the General Assembly:
16	16	4 Section 5. The Department of Commerce and Economic
17	17	5 Opportunity Law of the Civil Administrative Code of Illinois
18	18	6 is amended by adding Section 605-1115 as follows:
19	19	7 (20 ILCS 605/605-1115 new)
20	20	8 Sec. 605-1115. Quantum information science research and
21	21	9 development.
22	22	10 (a) In order to advance and increase quantum information
23	23	11 science investment and research in the State of Illinois, and
24	24	12 to make the State of Illinois a leader in the are of quantum
25	25	13 information science, quantum computing, and other applications
26	26	14 of quantum science in technology, there is hereby created the
27	27	15 Quantum Information Science Research and Development Tax
28	28	16 Credit Program.
29	29	17 (b) For taxable years ending on or after December 31,
30	30	18 2025, the Department shall issue a tax credit certificate
31	31	19 against the taxes imposed under subsections (a) and (b) of
32	32	20 Section 201 of the Illinois Income Tax Act in an amount equal
33	33	21 to 13% of the qualifying quantum information science
34	34	22 expenditures made by the taxpayer during the taxable year.
35	35	23 (c) Taxpayers seeking a credit certificate for qualifying
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39	39	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB3474 Introduced 2/8/2024, by Sen. Elgie R. Sims, Jr. SYNOPSIS AS INTRODUCED:
40	40	20 ILCS 605/605-1115 new35 ILCS 5/20135 ILCS 5/241 new 20 ILCS 605/605-1115 new 35 ILCS 5/201 35 ILCS 5/241 new
41	41	20 ILCS 605/605-1115 new
42	42	35 ILCS 5/201
43	43	35 ILCS 5/241 new
44	44	Amends the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois. Provides that the Department of Commerce and Economic Opportunity shall award income tax credits in an amount equal to 13% of the qualifying quantum information science expenditures made by the taxpayer during the taxable year. Amends the Illinois Income Tax Act to make conforming changes. Further amends the Illinois Income Tax Act to extend the research and development credit to tax years ending before January 1, 2037 (currently, January 1, 2027). Effective immediately.
45	45	LRB103 36904 HLH 67017 b LRB103 36904 HLH 67017 b
46	46	LRB103 36904 HLH 67017 b
47	47	A BILL FOR
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53	53	20 ILCS 605/605-1115 new
54	54	35 ILCS 5/201
55	55	35 ILCS 5/241 new
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74	74	1 quantum information science expenditures shall apply to the
75	75	2 Department in the form and manner specified by the Department.
76	76	3 (d) The total aggregate amount of the credits awarded
77	77	4 under this Section shall not exceed $25,000,000 in any
78	78	5 calendar year.
79	79	6 (e) The Department, in consultation with the Department of
80	80	7 Revenue, shall adopt rules to implement and administer this
81	81	8 Section.
82	82	9 (f) This Section is exempt from the provisions of Section
83	83	10 250 of the Illinois Income Tax Act.
84	84	11 (g) As used in this Section:
85	85	12 "Qualifying quantum information science expenditures"
86	86	13 means expenditures specifically related to advancing quantum
87	87	14 information science research and development in the State of
88	88	15 Illinois that would otherwise be qualifying expenditures as
89	89	16 defined for the federal credit for increasing research
90	90	17 activities that are allowable under Section 41 of the Internal
91	91	18 Revenue Code and that are conducted in this State.
92	92	19 "Quantum information science" has the meaning given to
93	93	20 that term in Section 2 of the federal National Quantum
94	94	21 Initiative Act.
95	95	22 Section 10. The Illinois Income Tax Act is amended by
96	96	23 changing Section 201 and by adding Section 241 as follows:
97	97	24 (35 ILCS 5/201)
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108	108	1 Sec. 201. Tax imposed.
109	109	2 (a) In general. A tax measured by net income is hereby
110	110	3 imposed on every individual, corporation, trust and estate for
111	111	4 each taxable year ending after July 31, 1969 on the privilege
112	112	5 of earning or receiving income in or as a resident of this
113	113	6 State. Such tax shall be in addition to all other occupation or
114	114	7 privilege taxes imposed by this State or by any municipal
115	115	8 corporation or political subdivision thereof.
116	116	9 (b) Rates. The tax imposed by subsection (a) of this
117	117	10 Section shall be determined as follows, except as adjusted by
118	118	11 subsection (d-1):
119	119	12 (1) In the case of an individual, trust or estate, for
120	120	13 taxable years ending prior to July 1, 1989, an amount
121	121	14 equal to 2 1/2% of the taxpayer's net income for the
122	122	15 taxable year.
123	123	16 (2) In the case of an individual, trust or estate, for
124	124	17 taxable years beginning prior to July 1, 1989 and ending
125	125	18 after June 30, 1989, an amount equal to the sum of (i) 2
126	126	19 1/2% of the taxpayer's net income for the period prior to
127	127	20 July 1, 1989, as calculated under Section 202.3, and (ii)
128	128	21 3% of the taxpayer's net income for the period after June
129	129	22 30, 1989, as calculated under Section 202.3.
130	130	23 (3) In the case of an individual, trust or estate, for
131	131	24 taxable years beginning after June 30, 1989, and ending
132	132	25 prior to January 1, 2011, an amount equal to 3% of the
133	133	26 taxpayer's net income for the taxable year.
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144	144	1 (4) In the case of an individual, trust, or estate,
145	145	2 for taxable years beginning prior to January 1, 2011, and
146	146	3 ending after December 31, 2010, an amount equal to the sum
147	147	4 of (i) 3% of the taxpayer's net income for the period prior
148	148	5 to January 1, 2011, as calculated under Section 202.5, and
149	149	6 (ii) 5% of the taxpayer's net income for the period after
150	150	7 December 31, 2010, as calculated under Section 202.5.
151	151	8 (5) In the case of an individual, trust, or estate,
152	152	9 for taxable years beginning on or after January 1, 2011,
153	153	10 and ending prior to January 1, 2015, an amount equal to 5%
154	154	11 of the taxpayer's net income for the taxable year.
155	155	12 (5.1) In the case of an individual, trust, or estate,
156	156	13 for taxable years beginning prior to January 1, 2015, and
157	157	14 ending after December 31, 2014, an amount equal to the sum
158	158	15 of (i) 5% of the taxpayer's net income for the period prior
159	159	16 to January 1, 2015, as calculated under Section 202.5, and
160	160	17 (ii) 3.75% of the taxpayer's net income for the period
161	161	18 after December 31, 2014, as calculated under Section
162	162	19 202.5.
163	163	20 (5.2) In the case of an individual, trust, or estate,
164	164	21 for taxable years beginning on or after January 1, 2015,
165	165	22 and ending prior to July 1, 2017, an amount equal to 3.75%
166	166	23 of the taxpayer's net income for the taxable year.
167	167	24 (5.3) In the case of an individual, trust, or estate,
168	168	25 for taxable years beginning prior to July 1, 2017, and
169	169	26 ending after June 30, 2017, an amount equal to the sum of
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180	180	1 (i) 3.75% of the taxpayer's net income for the period
181	181	2 prior to July 1, 2017, as calculated under Section 202.5,
182	182	3 and (ii) 4.95% of the taxpayer's net income for the period
183	183	4 after June 30, 2017, as calculated under Section 202.5.
184	184	5 (5.4) In the case of an individual, trust, or estate,
185	185	6 for taxable years beginning on or after July 1, 2017, an
186	186	7 amount equal to 4.95% of the taxpayer's net income for the
187	187	8 taxable year.
188	188	9 (6) In the case of a corporation, for taxable years
189	189	10 ending prior to July 1, 1989, an amount equal to 4% of the
190	190	11 taxpayer's net income for the taxable year.
191	191	12 (7) In the case of a corporation, for taxable years
192	192	13 beginning prior to July 1, 1989 and ending after June 30,
193	193	14 1989, an amount equal to the sum of (i) 4% of the
194	194	15 taxpayer's net income for the period prior to July 1,
195	195	16 1989, as calculated under Section 202.3, and (ii) 4.8% of
196	196	17 the taxpayer's net income for the period after June 30,
197	197	18 1989, as calculated under Section 202.3.
198	198	19 (8) In the case of a corporation, for taxable years
199	199	20 beginning after June 30, 1989, and ending prior to January
200	200	21 1, 2011, an amount equal to 4.8% of the taxpayer's net
201	201	22 income for the taxable year.
202	202	23 (9) In the case of a corporation, for taxable years
203	203	24 beginning prior to January 1, 2011, and ending after
204	204	25 December 31, 2010, an amount equal to the sum of (i) 4.8%
205	205	26 of the taxpayer's net income for the period prior to
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216	216	1 January 1, 2011, as calculated under Section 202.5, and
217	217	2 (ii) 7% of the taxpayer's net income for the period after
218	218	3 December 31, 2010, as calculated under Section 202.5.
219	219	4 (10) In the case of a corporation, for taxable years
220	220	5 beginning on or after January 1, 2011, and ending prior to
221	221	6 January 1, 2015, an amount equal to 7% of the taxpayer's
222	222	7 net income for the taxable year.
223	223	8 (11) In the case of a corporation, for taxable years
224	224	9 beginning prior to January 1, 2015, and ending after
225	225	10 December 31, 2014, an amount equal to the sum of (i) 7% of
226	226	11 the taxpayer's net income for the period prior to January
227	227	12 1, 2015, as calculated under Section 202.5, and (ii) 5.25%
228	228	13 of the taxpayer's net income for the period after December
229	229	14 31, 2014, as calculated under Section 202.5.
230	230	15 (12) In the case of a corporation, for taxable years
231	231	16 beginning on or after January 1, 2015, and ending prior to
232	232	17 July 1, 2017, an amount equal to 5.25% of the taxpayer's
233	233	18 net income for the taxable year.
234	234	19 (13) In the case of a corporation, for taxable years
235	235	20 beginning prior to July 1, 2017, and ending after June 30,
236	236	21 2017, an amount equal to the sum of (i) 5.25% of the
237	237	22 taxpayer's net income for the period prior to July 1,
238	238	23 2017, as calculated under Section 202.5, and (ii) 7% of
239	239	24 the taxpayer's net income for the period after June 30,
240	240	25 2017, as calculated under Section 202.5.
241	241	26 (14) In the case of a corporation, for taxable years
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252	252	1 beginning on or after July 1, 2017, an amount equal to 7%
253	253	2 of the taxpayer's net income for the taxable year.
254	254	3 The rates under this subsection (b) are subject to the
255	255	4 provisions of Section 201.5.
256	256	5 (b-5) Surcharge; sale or exchange of assets, properties,
257	257	6 and intangibles of organization gaming licensees. For each of
258	258	7 taxable years 2019 through 2027, a surcharge is imposed on all
259	259	8 taxpayers on income arising from the sale or exchange of
260	260	9 capital assets, depreciable business property, real property
261	261	10 used in the trade or business, and Section 197 intangibles (i)
262	262	11 of an organization licensee under the Illinois Horse Racing
263	263	12 Act of 1975 and (ii) of an organization gaming licensee under
264	264	13 the Illinois Gambling Act. The amount of the surcharge is
265	265	14 equal to the amount of federal income tax liability for the
266	266	15 taxable year attributable to those sales and exchanges. The
267	267	16 surcharge imposed shall not apply if:
268	268	17 (1) the organization gaming license, organization
269	269	18 license, or racetrack property is transferred as a result
270	270	19 of any of the following:
271	271	20 (A) bankruptcy, a receivership, or a debt
272	272	21 adjustment initiated by or against the initial
273	273	22 licensee or the substantial owners of the initial
274	274	23 licensee;
275	275	24 (B) cancellation, revocation, or termination of
276	276	25 any such license by the Illinois Gaming Board or the
277	277	26 Illinois Racing Board;
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288	288	1 (C) a determination by the Illinois Gaming Board
289	289	2 that transfer of the license is in the best interests
290	290	3 of Illinois gaming;
291	291	4 (D) the death of an owner of the equity interest in
292	292	5 a licensee;
293	293	6 (E) the acquisition of a controlling interest in
294	294	7 the stock or substantially all of the assets of a
295	295	8 publicly traded company;
296	296	9 (F) a transfer by a parent company to a wholly
297	297	10 owned subsidiary; or
298	298	11 (G) the transfer or sale to or by one person to
299	299	12 another person where both persons were initial owners
300	300	13 of the license when the license was issued; or
301	301	14 (2) the controlling interest in the organization
302	302	15 gaming license, organization license, or racetrack
303	303	16 property is transferred in a transaction to lineal
304	304	17 descendants in which no gain or loss is recognized or as a
305	305	18 result of a transaction in accordance with Section 351 of
306	306	19 the Internal Revenue Code in which no gain or loss is
307	307	20 recognized; or
308	308	21 (3) live horse racing was not conducted in 2010 at a
309	309	22 racetrack located within 3 miles of the Mississippi River
310	310	23 under a license issued pursuant to the Illinois Horse
311	311	24 Racing Act of 1975.
312	312	25 The transfer of an organization gaming license,
313	313	26 organization license, or racetrack property by a person other
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324	324	1 than the initial licensee to receive the organization gaming
325	325	2 license is not subject to a surcharge. The Department shall
326	326	3 adopt rules necessary to implement and administer this
327	327	4 subsection.
328	328	5 (c) Personal Property Tax Replacement Income Tax.
329	329	6 Beginning on July 1, 1979 and thereafter, in addition to such
330	330	7 income tax, there is also hereby imposed the Personal Property
331	331	8 Tax Replacement Income Tax measured by net income on every
332	332	9 corporation (including Subchapter S corporations), partnership
333	333	10 and trust, for each taxable year ending after June 30, 1979.
334	334	11 Such taxes are imposed on the privilege of earning or
335	335	12 receiving income in or as a resident of this State. The
336	336	13 Personal Property Tax Replacement Income Tax shall be in
337	337	14 addition to the income tax imposed by subsections (a) and (b)
338	338	15 of this Section and in addition to all other occupation or
339	339	16 privilege taxes imposed by this State or by any municipal
340	340	17 corporation or political subdivision thereof.
341	341	18 (d) Additional Personal Property Tax Replacement Income
342	342	19 Tax Rates. The personal property tax replacement income tax
343	343	20 imposed by this subsection and subsection (c) of this Section
344	344	21 in the case of a corporation, other than a Subchapter S
345	345	22 corporation and except as adjusted by subsection (d-1), shall
346	346	23 be an additional amount equal to 2.85% of such taxpayer's net
347	347	24 income for the taxable year, except that beginning on January
348	348	25 1, 1981, and thereafter, the rate of 2.85% specified in this
349	349	26 subsection shall be reduced to 2.5%, and in the case of a
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360	360	1 partnership, trust or a Subchapter S corporation shall be an
361	361	2 additional amount equal to 1.5% of such taxpayer's net income
362	362	3 for the taxable year.
363	363	4 (d-1) Rate reduction for certain foreign insurers. In the
364	364	5 case of a foreign insurer, as defined by Section 35A-5 of the
365	365	6 Illinois Insurance Code, whose state or country of domicile
366	366	7 imposes on insurers domiciled in Illinois a retaliatory tax
367	367	8 (excluding any insurer whose premiums from reinsurance assumed
368	368	9 are 50% or more of its total insurance premiums as determined
369	369	10 under paragraph (2) of subsection (b) of Section 304, except
370	370	11 that for purposes of this determination premiums from
371	371	12 reinsurance do not include premiums from inter-affiliate
372	372	13 reinsurance arrangements), beginning with taxable years ending
373	373	14 on or after December 31, 1999, the sum of the rates of tax
374	374	15 imposed by subsections (b) and (d) shall be reduced (but not
375	375	16 increased) to the rate at which the total amount of tax imposed
376	376	17 under this Act, net of all credits allowed under this Act,
377	377	18 shall equal (i) the total amount of tax that would be imposed
378	378	19 on the foreign insurer's net income allocable to Illinois for
379	379	20 the taxable year by such foreign insurer's state or country of
380	380	21 domicile if that net income were subject to all income taxes
381	381	22 and taxes measured by net income imposed by such foreign
382	382	23 insurer's state or country of domicile, net of all credits
383	383	24 allowed or (ii) a rate of zero if no such tax is imposed on
384	384	25 such income by the foreign insurer's state of domicile. For
385	385	26 the purposes of this subsection (d-1), an inter-affiliate
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396	396	1 includes a mutual insurer under common management.
397	397	2 (1) For the purposes of subsection (d-1), in no event
398	398	3 shall the sum of the rates of tax imposed by subsections
399	399	4 (b) and (d) be reduced below the rate at which the sum of:
400	400	5 (A) the total amount of tax imposed on such
401	401	6 foreign insurer under this Act for a taxable year, net
402	402	7 of all credits allowed under this Act, plus
403	403	8 (B) the privilege tax imposed by Section 409 of
404	404	9 the Illinois Insurance Code, the fire insurance
405	405	10 company tax imposed by Section 12 of the Fire
406	406	11 Investigation Act, and the fire department taxes
407	407	12 imposed under Section 11-10-1 of the Illinois
408	408	13 Municipal Code,
409	409	14 equals 1.25% for taxable years ending prior to December
410	410	15 31, 2003, or 1.75% for taxable years ending on or after
411	411	16 December 31, 2003, of the net taxable premiums written for
412	412	17 the taxable year, as described by subsection (1) of
413	413	18 Section 409 of the Illinois Insurance Code. This paragraph
414	414	19 will in no event increase the rates imposed under
415	415	20 subsections (b) and (d).
416	416	21 (2) Any reduction in the rates of tax imposed by this
417	417	22 subsection shall be applied first against the rates
418	418	23 imposed by subsection (b) and only after the tax imposed
419	419	24 by subsection (a) net of all credits allowed under this
420	420	25 Section other than the credit allowed under subsection (i)
421	421	26 has been reduced to zero, against the rates imposed by
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432	432	1 subsection (d).
433	433	2 This subsection (d-1) is exempt from the provisions of
434	434	3 Section 250.
435	435	4 (e) Investment credit. A taxpayer shall be allowed a
436	436	5 credit against the Personal Property Tax Replacement Income
437	437	6 Tax for investment in qualified property.
438	438	7 (1) A taxpayer shall be allowed a credit equal to .5%
439	439	8 of the basis of qualified property placed in service
440	440	9 during the taxable year, provided such property is placed
441	441	10 in service on or after July 1, 1984. There shall be allowed
442	442	11 an additional credit equal to .5% of the basis of
443	443	12 qualified property placed in service during the taxable
444	444	13 year, provided such property is placed in service on or
445	445	14 after July 1, 1986, and the taxpayer's base employment
446	446	15 within Illinois has increased by 1% or more over the
447	447	16 preceding year as determined by the taxpayer's employment
448	448	17 records filed with the Illinois Department of Employment
449	449	18 Security. Taxpayers who are new to Illinois shall be
450	450	19 deemed to have met the 1% growth in base employment for the
451	451	20 first year in which they file employment records with the
452	452	21 Illinois Department of Employment Security. The provisions
453	453	22 added to this Section by Public Act 85-1200 (and restored
454	454	23 by Public Act 87-895) shall be construed as declaratory of
455	455	24 existing law and not as a new enactment. If, in any year,
456	456	25 the increase in base employment within Illinois over the
457	457	26 preceding year is less than 1%, the additional credit
458	458
459	459
460	460
461	461
462	462
463	463	SB3474 - 12 - LRB103 36904 HLH 67017 b
464	464
465	465
466	466	SB3474- 13 -LRB103 36904 HLH 67017 b SB3474 - 13 - LRB103 36904 HLH 67017 b
467	467	SB3474 - 13 - LRB103 36904 HLH 67017 b
468	468	1 shall be limited to that percentage times a fraction, the
469	469	2 numerator of which is .5% and the denominator of which is
470	470	3 1%, but shall not exceed .5%. The investment credit shall
471	471	4 not be allowed to the extent that it would reduce a
472	472	5 taxpayer's liability in any tax year below zero, nor may
473	473	6 any credit for qualified property be allowed for any year
474	474	7 other than the year in which the property was placed in
475	475	8 service in Illinois. For tax years ending on or after
476	476	9 December 31, 1987, and on or before December 31, 1988, the
477	477	10 credit shall be allowed for the tax year in which the
478	478	11 property is placed in service, or, if the amount of the
479	479	12 credit exceeds the tax liability for that year, whether it
480	480	13 exceeds the original liability or the liability as later
481	481	14 amended, such excess may be carried forward and applied to
482	482	15 the tax liability of the 5 taxable years following the
483	483	16 excess credit years if the taxpayer (i) makes investments
484	484	17 which cause the creation of a minimum of 2,000 full-time
485	485	18 equivalent jobs in Illinois, (ii) is located in an
486	486	19 enterprise zone established pursuant to the Illinois
487	487	20 Enterprise Zone Act and (iii) is certified by the
488	488	21 Department of Commerce and Community Affairs (now
489	489	22 Department of Commerce and Economic Opportunity) as
490	490	23 complying with the requirements specified in clause (i)
491	491	24 and (ii) by July 1, 1986. The Department of Commerce and
492	492	25 Community Affairs (now Department of Commerce and Economic
493	493	26 Opportunity) shall notify the Department of Revenue of all
494	494
495	495
496	496
497	497
498	498
499	499	SB3474 - 13 - LRB103 36904 HLH 67017 b
500	500
501	501
502	502	SB3474- 14 -LRB103 36904 HLH 67017 b SB3474 - 14 - LRB103 36904 HLH 67017 b
503	503	SB3474 - 14 - LRB103 36904 HLH 67017 b
504	504	1 such certifications immediately. For tax years ending
505	505	2 after December 31, 1988, the credit shall be allowed for
506	506	3 the tax year in which the property is placed in service,
507	507	4 or, if the amount of the credit exceeds the tax liability
508	508	5 for that year, whether it exceeds the original liability
509	509	6 or the liability as later amended, such excess may be
510	510	7 carried forward and applied to the tax liability of the 5
511	511	8 taxable years following the excess credit years. The
512	512	9 credit shall be applied to the earliest year for which
513	513	10 there is a liability. If there is credit from more than one
514	514	11 tax year that is available to offset a liability, earlier
515	515	12 credit shall be applied first.
516	516	13 (2) The term "qualified property" means property
517	517	14 which:
518	518	15 (A) is tangible, whether new or used, including
519	519	16 buildings and structural components of buildings and
520	520	17 signs that are real property, but not including land
521	521	18 or improvements to real property that are not a
522	522	19 structural component of a building such as
523	523	20 landscaping, sewer lines, local access roads, fencing,
524	524	21 parking lots, and other appurtenances;
525	525	22 (B) is depreciable pursuant to Section 167 of the
526	526	23 Internal Revenue Code, except that "3-year property"
527	527	24 as defined in Section 168(c)(2)(A) of that Code is not
528	528	25 eligible for the credit provided by this subsection
529	529	26 (e);
530	530
531	531
532	532
533	533
534	534
535	535	SB3474 - 14 - LRB103 36904 HLH 67017 b
536	536
537	537
538	538	SB3474- 15 -LRB103 36904 HLH 67017 b SB3474 - 15 - LRB103 36904 HLH 67017 b
539	539	SB3474 - 15 - LRB103 36904 HLH 67017 b
540	540	1 (C) is acquired by purchase as defined in Section
541	541	2 179(d) of the Internal Revenue Code;
542	542	3 (D) is used in Illinois by a taxpayer who is
543	543	4 primarily engaged in manufacturing, or in mining coal
544	544	5 or fluorite, or in retailing, or was placed in service
545	545	6 on or after July 1, 2006 in a River Edge Redevelopment
546	546	7 Zone established pursuant to the River Edge
547	547	8 Redevelopment Zone Act; and
548	548	9 (E) has not previously been used in Illinois in
549	549	10 such a manner and by such a person as would qualify for
550	550	11 the credit provided by this subsection (e) or
551	551	12 subsection (f).
552	552	13 (3) For purposes of this subsection (e),
553	553	14 "manufacturing" means the material staging and production
554	554	15 of tangible personal property by procedures commonly
555	555	16 regarded as manufacturing, processing, fabrication, or
556	556	17 assembling which changes some existing material into new
557	557	18 shapes, new qualities, or new combinations. For purposes
558	558	19 of this subsection (e) the term "mining" shall have the
559	559	20 same meaning as the term "mining" in Section 613(c) of the
560	560	21 Internal Revenue Code. For purposes of this subsection
561	561	22 (e), the term "retailing" means the sale of tangible
562	562	23 personal property for use or consumption and not for
563	563	24 resale, or services rendered in conjunction with the sale
564	564	25 of tangible personal property for use or consumption and
565	565	26 not for resale. For purposes of this subsection (e),
566	566
567	567
568	568
569	569
570	570
571	571	SB3474 - 15 - LRB103 36904 HLH 67017 b
572	572
573	573
574	574	SB3474- 16 -LRB103 36904 HLH 67017 b SB3474 - 16 - LRB103 36904 HLH 67017 b
575	575	SB3474 - 16 - LRB103 36904 HLH 67017 b
576	576	1 "tangible personal property" has the same meaning as when
577	577	2 that term is used in the Retailers' Occupation Tax Act,
578	578	3 and, for taxable years ending after December 31, 2008,
579	579	4 does not include the generation, transmission, or
580	580	5 distribution of electricity.
581	581	6 (4) The basis of qualified property shall be the basis
582	582	7 used to compute the depreciation deduction for federal
583	583	8 income tax purposes.
584	584	9 (5) If the basis of the property for federal income
585	585	10 tax depreciation purposes is increased after it has been
586	586	11 placed in service in Illinois by the taxpayer, the amount
587	587	12 of such increase shall be deemed property placed in
588	588	13 service on the date of such increase in basis.
589	589	14 (6) The term "placed in service" shall have the same
590	590	15 meaning as under Section 46 of the Internal Revenue Code.
591	591	16 (7) If during any taxable year, any property ceases to
592	592	17 be qualified property in the hands of the taxpayer within
593	593	18 48 months after being placed in service, or the situs of
594	594	19 any qualified property is moved outside Illinois within 48
595	595	20 months after being placed in service, the Personal
596	596	21 Property Tax Replacement Income Tax for such taxable year
597	597	22 shall be increased. Such increase shall be determined by
598	598	23 (i) recomputing the investment credit which would have
599	599	24 been allowed for the year in which credit for such
600	600	25 property was originally allowed by eliminating such
601	601	26 property from such computation and, (ii) subtracting such
602	602
603	603
604	604
605	605
606	606
607	607	SB3474 - 16 - LRB103 36904 HLH 67017 b
608	608
609	609
610	610	SB3474- 17 -LRB103 36904 HLH 67017 b SB3474 - 17 - LRB103 36904 HLH 67017 b
611	611	SB3474 - 17 - LRB103 36904 HLH 67017 b
612	612	1 recomputed credit from the amount of credit previously
613	613	2 allowed. For the purposes of this paragraph (7), a
614	614	3 reduction of the basis of qualified property resulting
615	615	4 from a redetermination of the purchase price shall be
616	616	5 deemed a disposition of qualified property to the extent
617	617	6 of such reduction.
618	618	7 (8) Unless the investment credit is extended by law,
619	619	8 the basis of qualified property shall not include costs
620	620	9 incurred after December 31, 2018, except for costs
621	621	10 incurred pursuant to a binding contract entered into on or
622	622	11 before December 31, 2018.
623	623	12 (9) Each taxable year ending before December 31, 2000,
624	624	13 a partnership may elect to pass through to its partners
625	625	14 the credits to which the partnership is entitled under
626	626	15 this subsection (e) for the taxable year. A partner may
627	627	16 use the credit allocated to him or her under this
628	628	17 paragraph only against the tax imposed in subsections (c)
629	629	18 and (d) of this Section. If the partnership makes that
630	630	19 election, those credits shall be allocated among the
631	631	20 partners in the partnership in accordance with the rules
632	632	21 set forth in Section 704(b) of the Internal Revenue Code,
633	633	22 and the rules promulgated under that Section, and the
634	634	23 allocated amount of the credits shall be allowed to the
635	635	24 partners for that taxable year. The partnership shall make
636	636	25 this election on its Personal Property Tax Replacement
637	637	26 Income Tax return for that taxable year. The election to
638	638
639	639
640	640
641	641
642	642
643	643	SB3474 - 17 - LRB103 36904 HLH 67017 b
644	644
645	645
646	646	SB3474- 18 -LRB103 36904 HLH 67017 b SB3474 - 18 - LRB103 36904 HLH 67017 b
647	647	SB3474 - 18 - LRB103 36904 HLH 67017 b
648	648	1 pass through the credits shall be irrevocable.
649	649	2 For taxable years ending on or after December 31,
650	650	3 2000, a partner that qualifies its partnership for a
651	651	4 subtraction under subparagraph (I) of paragraph (2) of
652	652	5 subsection (d) of Section 203 or a shareholder that
653	653	6 qualifies a Subchapter S corporation for a subtraction
654	654	7 under subparagraph (S) of paragraph (2) of subsection (b)
655	655	8 of Section 203 shall be allowed a credit under this
656	656	9 subsection (e) equal to its share of the credit earned
657	657	10 under this subsection (e) during the taxable year by the
658	658	11 partnership or Subchapter S corporation, determined in
659	659	12 accordance with the determination of income and
660	660	13 distributive share of income under Sections 702 and 704
661	661	14 and Subchapter S of the Internal Revenue Code. This
662	662	15 paragraph is exempt from the provisions of Section 250.
663	663	16 (f) Investment credit; Enterprise Zone; River Edge
664	664	17 Redevelopment Zone.
665	665	18 (1) A taxpayer shall be allowed a credit against the
666	666	19 tax imposed by subsections (a) and (b) of this Section for
667	667	20 investment in qualified property which is placed in
668	668	21 service in an Enterprise Zone created pursuant to the
669	669	22 Illinois Enterprise Zone Act or, for property placed in
670	670	23 service on or after July 1, 2006, a River Edge
671	671	24 Redevelopment Zone established pursuant to the River Edge
672	672	25 Redevelopment Zone Act. For partners, shareholders of
673	673	26 Subchapter S corporations, and owners of limited liability
674	674
675	675
676	676
677	677
678	678
679	679	SB3474 - 18 - LRB103 36904 HLH 67017 b
680	680
681	681
682	682	SB3474- 19 -LRB103 36904 HLH 67017 b SB3474 - 19 - LRB103 36904 HLH 67017 b
683	683	SB3474 - 19 - LRB103 36904 HLH 67017 b
684	684	1 companies, if the liability company is treated as a
685	685	2 partnership for purposes of federal and State income
686	686	3 taxation, for taxable years ending before December 31,
687	687	4 2023, there shall be allowed a credit under this
688	688	5 subsection (f) to be determined in accordance with the
689	689	6 determination of income and distributive share of income
690	690	7 under Sections 702 and 704 and Subchapter S of the
691	691	8 Internal Revenue Code. For taxable years ending on or
692	692	9 after December 31, 2023, for partners and shareholders of
693	693	10 Subchapter S corporations, the provisions of Section 251
694	694	11 shall apply with respect to the credit under this
695	695	12 subsection. The credit shall be .5% of the basis for such
696	696	13 property. The credit shall be available only in the
697	697	14 taxable year in which the property is placed in service in
698	698	15 the Enterprise Zone or River Edge Redevelopment Zone and
699	699	16 shall not be allowed to the extent that it would reduce a
700	700	17 taxpayer's liability for the tax imposed by subsections
701	701	18 (a) and (b) of this Section to below zero. For tax years
702	702	19 ending on or after December 31, 1985, the credit shall be
703	703	20 allowed for the tax year in which the property is placed in
704	704	21 service, or, if the amount of the credit exceeds the tax
705	705	22 liability for that year, whether it exceeds the original
706	706	23 liability or the liability as later amended, such excess
707	707	24 may be carried forward and applied to the tax liability of
708	708	25 the 5 taxable years following the excess credit year. The
709	709	26 credit shall be applied to the earliest year for which
710	710
711	711
712	712
713	713
714	714
715	715	SB3474 - 19 - LRB103 36904 HLH 67017 b
716	716
717	717
718	718	SB3474- 20 -LRB103 36904 HLH 67017 b SB3474 - 20 - LRB103 36904 HLH 67017 b
719	719	SB3474 - 20 - LRB103 36904 HLH 67017 b
720	720	1 there is a liability. If there is credit from more than one
721	721	2 tax year that is available to offset a liability, the
722	722	3 credit accruing first in time shall be applied first.
723	723	4 (2) The term qualified property means property which:
724	724	5 (A) is tangible, whether new or used, including
725	725	6 buildings and structural components of buildings;
726	726	7 (B) is depreciable pursuant to Section 167 of the
727	727	8 Internal Revenue Code, except that "3-year property"
728	728	9 as defined in Section 168(c)(2)(A) of that Code is not
729	729	10 eligible for the credit provided by this subsection
730	730	11 (f);
731	731	12 (C) is acquired by purchase as defined in Section
732	732	13 179(d) of the Internal Revenue Code;
733	733	14 (D) is used in the Enterprise Zone or River Edge
734	734	15 Redevelopment Zone by the taxpayer; and
735	735	16 (E) has not been previously used in Illinois in
736	736	17 such a manner and by such a person as would qualify for
737	737	18 the credit provided by this subsection (f) or
738	738	19 subsection (e).
739	739	20 (3) The basis of qualified property shall be the basis
740	740	21 used to compute the depreciation deduction for federal
741	741	22 income tax purposes.
742	742	23 (4) If the basis of the property for federal income
743	743	24 tax depreciation purposes is increased after it has been
744	744	25 placed in service in the Enterprise Zone or River Edge
745	745	26 Redevelopment Zone by the taxpayer, the amount of such
746	746
747	747
748	748
749	749
750	750
751	751	SB3474 - 20 - LRB103 36904 HLH 67017 b
752	752
753	753
754	754	SB3474- 21 -LRB103 36904 HLH 67017 b SB3474 - 21 - LRB103 36904 HLH 67017 b
755	755	SB3474 - 21 - LRB103 36904 HLH 67017 b
756	756	1 increase shall be deemed property placed in service on the
757	757	2 date of such increase in basis.
758	758	3 (5) The term "placed in service" shall have the same
759	759	4 meaning as under Section 46 of the Internal Revenue Code.
760	760	5 (6) If during any taxable year, any property ceases to
761	761	6 be qualified property in the hands of the taxpayer within
762	762	7 48 months after being placed in service, or the situs of
763	763	8 any qualified property is moved outside the Enterprise
764	764	9 Zone or River Edge Redevelopment Zone within 48 months
765	765	10 after being placed in service, the tax imposed under
766	766	11 subsections (a) and (b) of this Section for such taxable
767	767	12 year shall be increased. Such increase shall be determined
768	768	13 by (i) recomputing the investment credit which would have
769	769	14 been allowed for the year in which credit for such
770	770	15 property was originally allowed by eliminating such
771	771	16 property from such computation, and (ii) subtracting such
772	772	17 recomputed credit from the amount of credit previously
773	773	18 allowed. For the purposes of this paragraph (6), a
774	774	19 reduction of the basis of qualified property resulting
775	775	20 from a redetermination of the purchase price shall be
776	776	21 deemed a disposition of qualified property to the extent
777	777	22 of such reduction.
778	778	23 (7) There shall be allowed an additional credit equal
779	779	24 to 0.5% of the basis of qualified property placed in
780	780	25 service during the taxable year in a River Edge
781	781	26 Redevelopment Zone, provided such property is placed in
782	782
783	783
784	784
785	785
786	786
787	787	SB3474 - 21 - LRB103 36904 HLH 67017 b
788	788
789	789
790	790	SB3474- 22 -LRB103 36904 HLH 67017 b SB3474 - 22 - LRB103 36904 HLH 67017 b
791	791	SB3474 - 22 - LRB103 36904 HLH 67017 b
792	792	1 service on or after July 1, 2006, and the taxpayer's base
793	793	2 employment within Illinois has increased by 1% or more
794	794	3 over the preceding year as determined by the taxpayer's
795	795	4 employment records filed with the Illinois Department of
796	796	5 Employment Security. Taxpayers who are new to Illinois
797	797	6 shall be deemed to have met the 1% growth in base
798	798	7 employment for the first year in which they file
799	799	8 employment records with the Illinois Department of
800	800	9 Employment Security. If, in any year, the increase in base
801	801	10 employment within Illinois over the preceding year is less
802	802	11 than 1%, the additional credit shall be limited to that
803	803	12 percentage times a fraction, the numerator of which is
804	804	13 0.5% and the denominator of which is 1%, but shall not
805	805	14 exceed 0.5%.
806	806	15 (8) For taxable years beginning on or after January 1,
807	807	16 2021, there shall be allowed an Enterprise Zone
808	808	17 construction jobs credit against the taxes imposed under
809	809	18 subsections (a) and (b) of this Section as provided in
810	810	19 Section 13 of the Illinois Enterprise Zone Act.
811	811	20 The credit or credits may not reduce the taxpayer's
812	812	21 liability to less than zero. If the amount of the credit or
813	813	22 credits exceeds the taxpayer's liability, the excess may
814	814	23 be carried forward and applied against the taxpayer's
815	815	24 liability in succeeding calendar years in the same manner
816	816	25 provided under paragraph (4) of Section 211 of this Act.
817	817	26 The credit or credits shall be applied to the earliest
818	818
819	819
820	820
821	821
822	822
823	823	SB3474 - 22 - LRB103 36904 HLH 67017 b
824	824
825	825
826	826	SB3474- 23 -LRB103 36904 HLH 67017 b SB3474 - 23 - LRB103 36904 HLH 67017 b
827	827	SB3474 - 23 - LRB103 36904 HLH 67017 b
828	828	1 year for which there is a tax liability. If there are
829	829	2 credits from more than one taxable year that are available
830	830	3 to offset a liability, the earlier credit shall be applied
831	831	4 first.
832	832	5 For partners, shareholders of Subchapter S
833	833	6 corporations, and owners of limited liability companies,
834	834	7 if the liability company is treated as a partnership for
835	835	8 the purposes of federal and State income taxation, for
836	836	9 taxable years ending before December 31, 2023, there shall
837	837	10 be allowed a credit under this Section to be determined in
838	838	11 accordance with the determination of income and
839	839	12 distributive share of income under Sections 702 and 704
840	840	13 and Subchapter S of the Internal Revenue Code. For taxable
841	841	14 years ending on or after December 31, 2023, for partners
842	842	15 and shareholders of Subchapter S corporations, the
843	843	16 provisions of Section 251 shall apply with respect to the
844	844	17 credit under this subsection.
845	845	18 The total aggregate amount of credits awarded under
846	846	19 the Blue Collar Jobs Act (Article 20 of Public Act 101-9)
847	847	20 shall not exceed $20,000,000 in any State fiscal year.
848	848	21 This paragraph (8) is exempt from the provisions of
849	849	22 Section 250.
850	850	23 (g) (Blank).
851	851	24 (h) Investment credit; High Impact Business.
852	852	25 (1) Subject to subsections (b) and (b-5) of Section
853	853	26 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall
854	854
855	855
856	856
857	857
858	858
859	859	SB3474 - 23 - LRB103 36904 HLH 67017 b
860	860
861	861
862	862	SB3474- 24 -LRB103 36904 HLH 67017 b SB3474 - 24 - LRB103 36904 HLH 67017 b
863	863	SB3474 - 24 - LRB103 36904 HLH 67017 b
864	864	1 be allowed a credit against the tax imposed by subsections
865	865	2 (a) and (b) of this Section for investment in qualified
866	866	3 property which is placed in service by a Department of
867	867	4 Commerce and Economic Opportunity designated High Impact
868	868	5 Business. The credit shall be .5% of the basis for such
869	869	6 property. The credit shall not be available (i) until the
870	870	7 minimum investments in qualified property set forth in
871	871	8 subdivision (a)(3)(A) of Section 5.5 of the Illinois
872	872	9 Enterprise Zone Act have been satisfied or (ii) until the
873	873	10 time authorized in subsection (b-5) of the Illinois
874	874	11 Enterprise Zone Act for entities designated as High Impact
875	875	12 Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
876	876	13 (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
877	877	14 Act, and shall not be allowed to the extent that it would
878	878	15 reduce a taxpayer's liability for the tax imposed by
879	879	16 subsections (a) and (b) of this Section to below zero. The
880	880	17 credit applicable to such investments shall be taken in
881	881	18 the taxable year in which such investments have been
882	882	19 completed. The credit for additional investments beyond
883	883	20 the minimum investment by a designated high impact
884	884	21 business authorized under subdivision (a)(3)(A) of Section
885	885	22 5.5 of the Illinois Enterprise Zone Act shall be available
886	886	23 only in the taxable year in which the property is placed in
887	887	24 service and shall not be allowed to the extent that it
888	888	25 would reduce a taxpayer's liability for the tax imposed by
889	889	26 subsections (a) and (b) of this Section to below zero. For
890	890
891	891
892	892
893	893
894	894
895	895	SB3474 - 24 - LRB103 36904 HLH 67017 b
896	896
897	897
898	898	SB3474- 25 -LRB103 36904 HLH 67017 b SB3474 - 25 - LRB103 36904 HLH 67017 b
899	899	SB3474 - 25 - LRB103 36904 HLH 67017 b
900	900	1 tax years ending on or after December 31, 1987, the credit
901	901	2 shall be allowed for the tax year in which the property is
902	902	3 placed in service, or, if the amount of the credit exceeds
903	903	4 the tax liability for that year, whether it exceeds the
904	904	5 original liability or the liability as later amended, such
905	905	6 excess may be carried forward and applied to the tax
906	906	7 liability of the 5 taxable years following the excess
907	907	8 credit year. The credit shall be applied to the earliest
908	908	9 year for which there is a liability. If there is credit
909	909	10 from more than one tax year that is available to offset a
910	910	11 liability, the credit accruing first in time shall be
911	911	12 applied first.
912	912	13 Changes made in this subdivision (h)(1) by Public Act
913	913	14 88-670 restore changes made by Public Act 85-1182 and
914	914	15 reflect existing law.
915	915	16 (2) The term qualified property means property which:
916	916	17 (A) is tangible, whether new or used, including
917	917	18 buildings and structural components of buildings;
918	918	19 (B) is depreciable pursuant to Section 167 of the
919	919	20 Internal Revenue Code, except that "3-year property"
920	920	21 as defined in Section 168(c)(2)(A) of that Code is not
921	921	22 eligible for the credit provided by this subsection
922	922	23 (h);
923	923	24 (C) is acquired by purchase as defined in Section
924	924	25 179(d) of the Internal Revenue Code; and
925	925	26 (D) is not eligible for the Enterprise Zone
926	926
927	927
928	928
929	929
930	930
931	931	SB3474 - 25 - LRB103 36904 HLH 67017 b
932	932
933	933
934	934	SB3474- 26 -LRB103 36904 HLH 67017 b SB3474 - 26 - LRB103 36904 HLH 67017 b
935	935	SB3474 - 26 - LRB103 36904 HLH 67017 b
936	936	1 Investment Credit provided by subsection (f) of this
937	937	2 Section.
938	938	3 (3) The basis of qualified property shall be the basis
939	939	4 used to compute the depreciation deduction for federal
940	940	5 income tax purposes.
941	941	6 (4) If the basis of the property for federal income
942	942	7 tax depreciation purposes is increased after it has been
943	943	8 placed in service in a federally designated Foreign Trade
944	944	9 Zone or Sub-Zone located in Illinois by the taxpayer, the
945	945	10 amount of such increase shall be deemed property placed in
946	946	11 service on the date of such increase in basis.
947	947	12 (5) The term "placed in service" shall have the same
948	948	13 meaning as under Section 46 of the Internal Revenue Code.
949	949	14 (6) If during any taxable year ending on or before
950	950	15 December 31, 1996, any property ceases to be qualified
951	951	16 property in the hands of the taxpayer within 48 months
952	952	17 after being placed in service, or the situs of any
953	953	18 qualified property is moved outside Illinois within 48
954	954	19 months after being placed in service, the tax imposed
955	955	20 under subsections (a) and (b) of this Section for such
956	956	21 taxable year shall be increased. Such increase shall be
957	957	22 determined by (i) recomputing the investment credit which
958	958	23 would have been allowed for the year in which credit for
959	959	24 such property was originally allowed by eliminating such
960	960	25 property from such computation, and (ii) subtracting such
961	961	26 recomputed credit from the amount of credit previously
962	962
963	963
964	964
965	965
966	966
967	967	SB3474 - 26 - LRB103 36904 HLH 67017 b
968	968
969	969
970	970	SB3474- 27 -LRB103 36904 HLH 67017 b SB3474 - 27 - LRB103 36904 HLH 67017 b
971	971	SB3474 - 27 - LRB103 36904 HLH 67017 b
972	972	1 allowed. For the purposes of this paragraph (6), a
973	973	2 reduction of the basis of qualified property resulting
974	974	3 from a redetermination of the purchase price shall be
975	975	4 deemed a disposition of qualified property to the extent
976	976	5 of such reduction.
977	977	6 (7) Beginning with tax years ending after December 31,
978	978	7 1996, if a taxpayer qualifies for the credit under this
979	979	8 subsection (h) and thereby is granted a tax abatement and
980	980	9 the taxpayer relocates its entire facility in violation of
981	981	10 the explicit terms and length of the contract under
982	982	11 Section 18-183 of the Property Tax Code, the tax imposed
983	983	12 under subsections (a) and (b) of this Section shall be
984	984	13 increased for the taxable year in which the taxpayer
985	985	14 relocated its facility by an amount equal to the amount of
986	986	15 credit received by the taxpayer under this subsection (h).
987	987	16 (h-5) High Impact Business construction jobs credit. For
988	988	17 taxable years beginning on or after January 1, 2021, there
989	989	18 shall also be allowed a High Impact Business construction jobs
990	990	19 credit against the tax imposed under subsections (a) and (b)
991	991	20 of this Section as provided in subsections (i) and (j) of
992	992	21 Section 5.5 of the Illinois Enterprise Zone Act.
993	993	22 The credit or credits may not reduce the taxpayer's
994	994	23 liability to less than zero. If the amount of the credit or
995	995	24 credits exceeds the taxpayer's liability, the excess may be
996	996	25 carried forward and applied against the taxpayer's liability
997	997	26 in succeeding calendar years in the manner provided under
998	998
999	999
1000	1000
1001	1001
1002	1002
1003	1003	SB3474 - 27 - LRB103 36904 HLH 67017 b
1004	1004
1005	1005
1006	1006	SB3474- 28 -LRB103 36904 HLH 67017 b SB3474 - 28 - LRB103 36904 HLH 67017 b
1007	1007	SB3474 - 28 - LRB103 36904 HLH 67017 b
1008	1008	1 paragraph (4) of Section 211 of this Act. The credit or credits
1009	1009	2 shall be applied to the earliest year for which there is a tax
1010	1010	3 liability. If there are credits from more than one taxable
1011	1011	4 year that are available to offset a liability, the earlier
1012	1012	5 credit shall be applied first.
1013	1013	6 For partners, shareholders of Subchapter S corporations,
1014	1014	7 and owners of limited liability companies, for taxable years
1015	1015	8 ending before December 31, 2023, if the liability company is
1016	1016	9 treated as a partnership for the purposes of federal and State
1017	1017	10 income taxation, there shall be allowed a credit under this
1018	1018	11 Section to be determined in accordance with the determination
1019	1019	12 of income and distributive share of income under Sections 702
1020	1020	13 and 704 and Subchapter S of the Internal Revenue Code. For
1021	1021	14 taxable years ending on or after December 31, 2023, for
1022	1022	15 partners and shareholders of Subchapter S corporations, the
1023	1023	16 provisions of Section 251 shall apply with respect to the
1024	1024	17 credit under this subsection.
1025	1025	18 The total aggregate amount of credits awarded under the
1026	1026	19 Blue Collar Jobs Act (Article 20 of Public Act 101-9) shall not
1027	1027	20 exceed $20,000,000 in any State fiscal year.
1028	1028	21 This subsection (h-5) is exempt from the provisions of
1029	1029	22 Section 250.
1030	1030	23 (i) Credit for Personal Property Tax Replacement Income
1031	1031	24 Tax. For tax years ending prior to December 31, 2003, a credit
1032	1032	25 shall be allowed against the tax imposed by subsections (a)
1033	1033	26 and (b) of this Section for the tax imposed by subsections (c)
1034	1034
1035	1035
1036	1036
1037	1037
1038	1038
1039	1039	SB3474 - 28 - LRB103 36904 HLH 67017 b
1040	1040
1041	1041
1042	1042	SB3474- 29 -LRB103 36904 HLH 67017 b SB3474 - 29 - LRB103 36904 HLH 67017 b
1043	1043	SB3474 - 29 - LRB103 36904 HLH 67017 b
1044	1044	1 and (d) of this Section. This credit shall be computed by
1045	1045	2 multiplying the tax imposed by subsections (c) and (d) of this
1046	1046	3 Section by a fraction, the numerator of which is base income
1047	1047	4 allocable to Illinois and the denominator of which is Illinois
1048	1048	5 base income, and further multiplying the product by the tax
1049	1049	6 rate imposed by subsections (a) and (b) of this Section.
1050	1050	7 Any credit earned on or after December 31, 1986 under this
1051	1051	8 subsection which is unused in the year the credit is computed
1052	1052	9 because it exceeds the tax liability imposed by subsections
1053	1053	10 (a) and (b) for that year (whether it exceeds the original
1054	1054	11 liability or the liability as later amended) may be carried
1055	1055	12 forward and applied to the tax liability imposed by
1056	1056	13 subsections (a) and (b) of the 5 taxable years following the
1057	1057	14 excess credit year, provided that no credit may be carried
1058	1058	15 forward to any year ending on or after December 31, 2003. This
1059	1059	16 credit shall be applied first to the earliest year for which
1060	1060	17 there is a liability. If there is a credit under this
1061	1061	18 subsection from more than one tax year that is available to
1062	1062	19 offset a liability the earliest credit arising under this
1063	1063	20 subsection shall be applied first.
1064	1064	21 If, during any taxable year ending on or after December
1065	1065	22 31, 1986, the tax imposed by subsections (c) and (d) of this
1066	1066	23 Section for which a taxpayer has claimed a credit under this
1067	1067	24 subsection (i) is reduced, the amount of credit for such tax
1068	1068	25 shall also be reduced. Such reduction shall be determined by
1069	1069	26 recomputing the credit to take into account the reduced tax
1070	1070
1071	1071
1072	1072
1073	1073
1074	1074
1075	1075	SB3474 - 29 - LRB103 36904 HLH 67017 b
1076	1076
1077	1077
1078	1078	SB3474- 30 -LRB103 36904 HLH 67017 b SB3474 - 30 - LRB103 36904 HLH 67017 b
1079	1079	SB3474 - 30 - LRB103 36904 HLH 67017 b
1080	1080	1 imposed by subsections (c) and (d). If any portion of the
1081	1081	2 reduced amount of credit has been carried to a different
1082	1082	3 taxable year, an amended return shall be filed for such
1083	1083	4 taxable year to reduce the amount of credit claimed.
1084	1084	5 (j) Training expense credit. Beginning with tax years
1085	1085	6 ending on or after December 31, 1986 and prior to December 31,
1086	1086	7 2003, a taxpayer shall be allowed a credit against the tax
1087	1087	8 imposed by subsections (a) and (b) under this Section for all
1088	1088	9 amounts paid or accrued, on behalf of all persons employed by
1089	1089	10 the taxpayer in Illinois or Illinois residents employed
1090	1090	11 outside of Illinois by a taxpayer, for educational or
1091	1091	12 vocational training in semi-technical or technical fields or
1092	1092	13 semi-skilled or skilled fields, which were deducted from gross
1093	1093	14 income in the computation of taxable income. The credit
1094	1094	15 against the tax imposed by subsections (a) and (b) shall be
1095	1095	16 1.6% of such training expenses. For partners, shareholders of
1096	1096	17 subchapter S corporations, and owners of limited liability
1097	1097	18 companies, if the liability company is treated as a
1098	1098	19 partnership for purposes of federal and State income taxation,
1099	1099	20 for taxable years ending before December 31, 2023, there shall
1100	1100	21 be allowed a credit under this subsection (j) to be determined
1101	1101	22 in accordance with the determination of income and
1102	1102	23 distributive share of income under Sections 702 and 704 and
1103	1103	24 subchapter S of the Internal Revenue Code. For taxable years
1104	1104	25 ending on or after December 31, 2023, for partners and
1105	1105	26 shareholders of Subchapter S corporations, the provisions of
1106	1106
1107	1107
1108	1108
1109	1109
1110	1110
1111	1111	SB3474 - 30 - LRB103 36904 HLH 67017 b
1112	1112
1113	1113
1114	1114	SB3474- 31 -LRB103 36904 HLH 67017 b SB3474 - 31 - LRB103 36904 HLH 67017 b
1115	1115	SB3474 - 31 - LRB103 36904 HLH 67017 b
1116	1116	1 Section 251 shall apply with respect to the credit under this
1117	1117	2 subsection.
1118	1118	3 Any credit allowed under this subsection which is unused
1119	1119	4 in the year the credit is earned may be carried forward to each
1120	1120	5 of the 5 taxable years following the year for which the credit
1121	1121	6 is first computed until it is used. This credit shall be
1122	1122	7 applied first to the earliest year for which there is a
1123	1123	8 liability. If there is a credit under this subsection from
1124	1124	9 more than one tax year that is available to offset a liability,
1125	1125	10 the earliest credit arising under this subsection shall be
1126	1126	11 applied first. No carryforward credit may be claimed in any
1127	1127	12 tax year ending on or after December 31, 2003.
1128	1128	13 (k) Research and development credit. For tax years ending
1129	1129	14 after July 1, 1990 and prior to December 31, 2003, and
1130	1130	15 beginning again for tax years ending on or after December 31,
1131	1131	16 2004, and ending prior to January 1, 2037 January 1, 2027, a
1132	1132	17 taxpayer shall be allowed a credit against the tax imposed by
1133	1133	18 subsections (a) and (b) of this Section for increasing
1134	1134	19 research activities in this State. The credit allowed against
1135	1135	20 the tax imposed by subsections (a) and (b) shall be equal to 6
1136	1136	21 1/2% of the qualifying expenditures for increasing research
1137	1137	22 activities in this State. For partners, shareholders of
1138	1138	23 subchapter S corporations, and owners of limited liability
1139	1139	24 companies, if the liability company is treated as a
1140	1140	25 partnership for purposes of federal and State income taxation,
1141	1141	26 for taxable years ending before December 31, 2023, there shall
1142	1142
1143	1143
1144	1144
1145	1145
1146	1146
1147	1147	SB3474 - 31 - LRB103 36904 HLH 67017 b
1148	1148
1149	1149
1150	1150	SB3474- 32 -LRB103 36904 HLH 67017 b SB3474 - 32 - LRB103 36904 HLH 67017 b
1151	1151	SB3474 - 32 - LRB103 36904 HLH 67017 b
1152	1152	1 be allowed a credit under this subsection to be determined in
1153	1153	2 accordance with the determination of income and distributive
1154	1154	3 share of income under Sections 702 and 704 and subchapter S of
1155	1155	4 the Internal Revenue Code. For taxable years ending on or
1156	1156	5 after December 31, 2023, for partners and shareholders of
1157	1157	6 Subchapter S corporations, the provisions of Section 251 shall
1158	1158	7 apply with respect to the credit under this subsection.
1159	1159	8 As used in For purposes of this subsection: ,
1160	1160	9 "Base period" means the 3 taxable years immediately
1161	1161	10 preceding the taxable year for which the determination is
1162	1162	11 being made.
1163	1163	12 "Qualifying "qualifying expenditures" means the qualifying
1164	1164	13 expenditures as defined for the federal credit for increasing
1165	1165	14 research activities which would be allowable under Section 41
1166	1166	15 of the Internal Revenue Code and which are conducted in this
1167	1167	16 State. ,
1168	1168	17 "Qualifying "qualifying expenditures for increasing
1169	1169	18 research activities in this State" means the excess of
1170	1170	19 qualifying expenditures for the taxable year in which incurred
1171	1171	20 over qualifying expenditures for the base period. ,
1172	1172	21 "Qualifying "qualifying expenditures for the base period"
1173	1173	22 means the average of the qualifying expenditures for each year
1174	1174	23 in the base period. , and "base period" means the 3 taxable
1175	1175	24 years immediately preceding the taxable year for which the
1176	1176	25 determination is being made.
1177	1177	26 Any credit in excess of the tax liability for the taxable
1178	1178
1179	1179
1180	1180
1181	1181
1182	1182
1183	1183	SB3474 - 32 - LRB103 36904 HLH 67017 b
1184	1184
1185	1185
1186	1186	SB3474- 33 -LRB103 36904 HLH 67017 b SB3474 - 33 - LRB103 36904 HLH 67017 b
1187	1187	SB3474 - 33 - LRB103 36904 HLH 67017 b
1188	1188	1 year may be carried forward. A taxpayer may elect to have the
1189	1189	2 unused credit shown on its final completed return carried over
1190	1190	3 as a credit against the tax liability for the following 5
1191	1191	4 taxable years or until it has been fully used, whichever
1192	1192	5 occurs first; provided that no credit earned in a tax year
1193	1193	6 ending prior to December 31, 2003 may be carried forward to any
1194	1194	7 year ending on or after December 31, 2003.
1195	1195	8 If an unused credit is carried forward to a given year from
1196	1196	9 2 or more earlier years, that credit arising in the earliest
1197	1197	10 year will be applied first against the tax liability for the
1198	1198	11 given year. If a tax liability for the given year still
1199	1199	12 remains, the credit from the next earliest year will then be
1200	1200	13 applied, and so on, until all credits have been used or no tax
1201	1201	14 liability for the given year remains. Any remaining unused
1202	1202	15 credit or credits then will be carried forward to the next
1203	1203	16 following year in which a tax liability is incurred, except
1204	1204	17 that no credit can be carried forward to a year which is more
1205	1205	18 than 5 years after the year in which the expense for which the
1206	1206	19 credit is given was incurred.
1207	1207	20 No inference shall be drawn from Public Act 91-644 in
1208	1208	21 construing this Section for taxable years beginning before
1209	1209	22 January 1, 1999.
1210	1210	23 It is the intent of the General Assembly that the research
1211	1211	24 and development credit under this subsection (k) shall apply
1212	1212	25 continuously for all tax years ending on or after December 31,
1213	1213	26 2004 and ending prior to January 1, 2027, including, but not
1214	1214
1215	1215
1216	1216
1217	1217
1218	1218
1219	1219	SB3474 - 33 - LRB103 36904 HLH 67017 b
1220	1220
1221	1221
1222	1222	SB3474- 34 -LRB103 36904 HLH 67017 b SB3474 - 34 - LRB103 36904 HLH 67017 b
1223	1223	SB3474 - 34 - LRB103 36904 HLH 67017 b
1224	1224	1 limited to, the period beginning on January 1, 2016 and ending
1225	1225	2 on July 6, 2017 (the effective date of Public Act 100-22). All
1226	1226	3 actions taken in reliance on the continuation of the credit
1227	1227	4 under this subsection (k) by any taxpayer are hereby
1228	1228	5 validated.
1229	1229	6 (l) Environmental Remediation Tax Credit.
1230	1230	7 (i) For tax years ending after December 31, 1997 and
1231	1231	8 on or before December 31, 2001, a taxpayer shall be
1232	1232	9 allowed a credit against the tax imposed by subsections
1233	1233	10 (a) and (b) of this Section for certain amounts paid for
1234	1234	11 unreimbursed eligible remediation costs, as specified in
1235	1235	12 this subsection. For purposes of this Section,
1236	1236	13 "unreimbursed eligible remediation costs" means costs
1237	1237	14 approved by the Illinois Environmental Protection Agency
1238	1238	15 ("Agency") under Section 58.14 of the Environmental
1239	1239	16 Protection Act that were paid in performing environmental
1240	1240	17 remediation at a site for which a No Further Remediation
1241	1241	18 Letter was issued by the Agency and recorded under Section
1242	1242	19 58.10 of the Environmental Protection Act. The credit must
1243	1243	20 be claimed for the taxable year in which Agency approval
1244	1244	21 of the eligible remediation costs is granted. The credit
1245	1245	22 is not available to any taxpayer if the taxpayer or any
1246	1246	23 related party caused or contributed to, in any material
1247	1247	24 respect, a release of regulated substances on, in, or
1248	1248	25 under the site that was identified and addressed by the
1249	1249	26 remedial action pursuant to the Site Remediation Program
1250	1250
1251	1251
1252	1252
1253	1253
1254	1254
1255	1255	SB3474 - 34 - LRB103 36904 HLH 67017 b
1256	1256
1257	1257
1258	1258	SB3474- 35 -LRB103 36904 HLH 67017 b SB3474 - 35 - LRB103 36904 HLH 67017 b
1259	1259	SB3474 - 35 - LRB103 36904 HLH 67017 b
1260	1260	1 of the Environmental Protection Act. After the Pollution
1261	1261	2 Control Board rules are adopted pursuant to the Illinois
1262	1262	3 Administrative Procedure Act for the administration and
1263	1263	4 enforcement of Section 58.9 of the Environmental
1264	1264	5 Protection Act, determinations as to credit availability
1265	1265	6 for purposes of this Section shall be made consistent with
1266	1266	7 those rules. For purposes of this Section, "taxpayer"
1267	1267	8 includes a person whose tax attributes the taxpayer has
1268	1268	9 succeeded to under Section 381 of the Internal Revenue
1269	1269	10 Code and "related party" includes the persons disallowed a
1270	1270	11 deduction for losses by paragraphs (b), (c), and (f)(1) of
1271	1271	12 Section 267 of the Internal Revenue Code by virtue of
1272	1272	13 being a related taxpayer, as well as any of its partners.
1273	1273	14 The credit allowed against the tax imposed by subsections
1274	1274	15 (a) and (b) shall be equal to 25% of the unreimbursed
1275	1275	16 eligible remediation costs in excess of $100,000 per site,
1276	1276	17 except that the $100,000 threshold shall not apply to any
1277	1277	18 site contained in an enterprise zone as determined by the
1278	1278	19 Department of Commerce and Community Affairs (now
1279	1279	20 Department of Commerce and Economic Opportunity). The
1280	1280	21 total credit allowed shall not exceed $40,000 per year
1281	1281	22 with a maximum total of $150,000 per site. For partners
1282	1282	23 and shareholders of subchapter S corporations, there shall
1283	1283	24 be allowed a credit under this subsection to be determined
1284	1284	25 in accordance with the determination of income and
1285	1285	26 distributive share of income under Sections 702 and 704
1286	1286
1287	1287
1288	1288
1289	1289
1290	1290
1291	1291	SB3474 - 35 - LRB103 36904 HLH 67017 b
1292	1292
1293	1293
1294	1294	SB3474- 36 -LRB103 36904 HLH 67017 b SB3474 - 36 - LRB103 36904 HLH 67017 b
1295	1295	SB3474 - 36 - LRB103 36904 HLH 67017 b
1296	1296	1 and subchapter S of the Internal Revenue Code.
1297	1297	2 (ii) A credit allowed under this subsection that is
1298	1298	3 unused in the year the credit is earned may be carried
1299	1299	4 forward to each of the 5 taxable years following the year
1300	1300	5 for which the credit is first earned until it is used. The
1301	1301	6 term "unused credit" does not include any amounts of
1302	1302	7 unreimbursed eligible remediation costs in excess of the
1303	1303	8 maximum credit per site authorized under paragraph (i).
1304	1304	9 This credit shall be applied first to the earliest year
1305	1305	10 for which there is a liability. If there is a credit under
1306	1306	11 this subsection from more than one tax year that is
1307	1307	12 available to offset a liability, the earliest credit
1308	1308	13 arising under this subsection shall be applied first. A
1309	1309	14 credit allowed under this subsection may be sold to a
1310	1310	15 buyer as part of a sale of all or part of the remediation
1311	1311	16 site for which the credit was granted. The purchaser of a
1312	1312	17 remediation site and the tax credit shall succeed to the
1313	1313	18 unused credit and remaining carry-forward period of the
1314	1314	19 seller. To perfect the transfer, the assignor shall record
1315	1315	20 the transfer in the chain of title for the site and provide
1316	1316	21 written notice to the Director of the Illinois Department
1317	1317	22 of Revenue of the assignor's intent to sell the
1318	1318	23 remediation site and the amount of the tax credit to be
1319	1319	24 transferred as a portion of the sale. In no event may a
1320	1320	25 credit be transferred to any taxpayer if the taxpayer or a
1321	1321	26 related party would not be eligible under the provisions
1322	1322
1323	1323
1324	1324
1325	1325
1326	1326
1327	1327	SB3474 - 36 - LRB103 36904 HLH 67017 b
1328	1328
1329	1329
1330	1330	SB3474- 37 -LRB103 36904 HLH 67017 b SB3474 - 37 - LRB103 36904 HLH 67017 b
1331	1331	SB3474 - 37 - LRB103 36904 HLH 67017 b
1332	1332	1 of subsection (i).
1333	1333	2 (iii) For purposes of this Section, the term "site"
1334	1334	3 shall have the same meaning as under Section 58.2 of the
1335	1335	4 Environmental Protection Act.
1336	1336	5 (m) Education expense credit. Beginning with tax years
1337	1337	6 ending after December 31, 1999, a taxpayer who is the
1338	1338	7 custodian of one or more qualifying pupils shall be allowed a
1339	1339	8 credit against the tax imposed by subsections (a) and (b) of
1340	1340	9 this Section for qualified education expenses incurred on
1341	1341	10 behalf of the qualifying pupils. The credit shall be equal to
1342	1342	11 25% of qualified education expenses, but in no event may the
1343	1343	12 total credit under this subsection claimed by a family that is
1344	1344	13 the custodian of qualifying pupils exceed (i) $500 for tax
1345	1345	14 years ending prior to December 31, 2017, and (ii) $750 for tax
1346	1346	15 years ending on or after December 31, 2017. In no event shall a
1347	1347	16 credit under this subsection reduce the taxpayer's liability
1348	1348	17 under this Act to less than zero. Notwithstanding any other
1349	1349	18 provision of law, for taxable years beginning on or after
1350	1350	19 January 1, 2017, no taxpayer may claim a credit under this
1351	1351	20 subsection (m) if the taxpayer's adjusted gross income for the
1352	1352	21 taxable year exceeds (i) $500,000, in the case of spouses
1353	1353	22 filing a joint federal tax return or (ii) $250,000, in the case
1354	1354	23 of all other taxpayers. This subsection is exempt from the
1355	1355	24 provisions of Section 250 of this Act.
1356	1356	25 For purposes of this subsection:
1357	1357	26 "Qualifying pupils" means individuals who (i) are
1358	1358
1359	1359
1360	1360
1361	1361
1362	1362
1363	1363	SB3474 - 37 - LRB103 36904 HLH 67017 b
1364	1364
1365	1365
1366	1366	SB3474- 38 -LRB103 36904 HLH 67017 b SB3474 - 38 - LRB103 36904 HLH 67017 b
1367	1367	SB3474 - 38 - LRB103 36904 HLH 67017 b
1368	1368	1 residents of the State of Illinois, (ii) are under the age of
1369	1369	2 21 at the close of the school year for which a credit is
1370	1370	3 sought, and (iii) during the school year for which a credit is
1371	1371	4 sought were full-time pupils enrolled in a kindergarten
1372	1372	5 through twelfth grade education program at any school, as
1373	1373	6 defined in this subsection.
1374	1374	7 "Qualified education expense" means the amount incurred on
1375	1375	8 behalf of a qualifying pupil in excess of $250 for tuition,
1376	1376	9 book fees, and lab fees at the school in which the pupil is
1377	1377	10 enrolled during the regular school year.
1378	1378	11 "School" means any public or nonpublic elementary or
1379	1379	12 secondary school in Illinois that is in compliance with Title
1380	1380	13 VI of the Civil Rights Act of 1964 and attendance at which
1381	1381	14 satisfies the requirements of Section 26-1 of the School Code,
1382	1382	15 except that nothing shall be construed to require a child to
1383	1383	16 attend any particular public or nonpublic school to qualify
1384	1384	17 for the credit under this Section.
1385	1385	18 "Custodian" means, with respect to qualifying pupils, an
1386	1386	19 Illinois resident who is a parent, the parents, a legal
1387	1387	20 guardian, or the legal guardians of the qualifying pupils.
1388	1388	21 (n) River Edge Redevelopment Zone site remediation tax
1389	1389	22 credit.
1390	1390	23 (i) For tax years ending on or after December 31,
1391	1391	24 2006, a taxpayer shall be allowed a credit against the tax
1392	1392	25 imposed by subsections (a) and (b) of this Section for
1393	1393	26 certain amounts paid for unreimbursed eligible remediation
1394	1394
1395	1395
1396	1396
1397	1397
1398	1398
1399	1399	SB3474 - 38 - LRB103 36904 HLH 67017 b
1400	1400
1401	1401
1402	1402	SB3474- 39 -LRB103 36904 HLH 67017 b SB3474 - 39 - LRB103 36904 HLH 67017 b
1403	1403	SB3474 - 39 - LRB103 36904 HLH 67017 b
1404	1404	1 costs, as specified in this subsection. For purposes of
1405	1405	2 this Section, "unreimbursed eligible remediation costs"
1406	1406	3 means costs approved by the Illinois Environmental
1407	1407	4 Protection Agency ("Agency") under Section 58.14a of the
1408	1408	5 Environmental Protection Act that were paid in performing
1409	1409	6 environmental remediation at a site within a River Edge
1410	1410	7 Redevelopment Zone for which a No Further Remediation
1411	1411	8 Letter was issued by the Agency and recorded under Section
1412	1412	9 58.10 of the Environmental Protection Act. The credit must
1413	1413	10 be claimed for the taxable year in which Agency approval
1414	1414	11 of the eligible remediation costs is granted. The credit
1415	1415	12 is not available to any taxpayer if the taxpayer or any
1416	1416	13 related party caused or contributed to, in any material
1417	1417	14 respect, a release of regulated substances on, in, or
1418	1418	15 under the site that was identified and addressed by the
1419	1419	16 remedial action pursuant to the Site Remediation Program
1420	1420	17 of the Environmental Protection Act. Determinations as to
1421	1421	18 credit availability for purposes of this Section shall be
1422	1422	19 made consistent with rules adopted by the Pollution
1423	1423	20 Control Board pursuant to the Illinois Administrative
1424	1424	21 Procedure Act for the administration and enforcement of
1425	1425	22 Section 58.9 of the Environmental Protection Act. For
1426	1426	23 purposes of this Section, "taxpayer" includes a person
1427	1427	24 whose tax attributes the taxpayer has succeeded to under
1428	1428	25 Section 381 of the Internal Revenue Code and "related
1429	1429	26 party" includes the persons disallowed a deduction for
1430	1430
1431	1431
1432	1432
1433	1433
1434	1434
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1436	1436
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1439	1439	SB3474 - 40 - LRB103 36904 HLH 67017 b
1440	1440	1 losses by paragraphs (b), (c), and (f)(1) of Section 267
1441	1441	2 of the Internal Revenue Code by virtue of being a related
1442	1442	3 taxpayer, as well as any of its partners. The credit
1443	1443	4 allowed against the tax imposed by subsections (a) and (b)
1444	1444	5 shall be equal to 25% of the unreimbursed eligible
1445	1445	6 remediation costs in excess of $100,000 per site.
1446	1446	7 (ii) A credit allowed under this subsection that is
1447	1447	8 unused in the year the credit is earned may be carried
1448	1448	9 forward to each of the 5 taxable years following the year
1449	1449	10 for which the credit is first earned until it is used. This
1450	1450	11 credit shall be applied first to the earliest year for
1451	1451	12 which there is a liability. If there is a credit under this
1452	1452	13 subsection from more than one tax year that is available
1453	1453	14 to offset a liability, the earliest credit arising under
1454	1454	15 this subsection shall be applied first. A credit allowed
1455	1455	16 under this subsection may be sold to a buyer as part of a
1456	1456	17 sale of all or part of the remediation site for which the
1457	1457	18 credit was granted. The purchaser of a remediation site
1458	1458	19 and the tax credit shall succeed to the unused credit and
1459	1459	20 remaining carry-forward period of the seller. To perfect
1460	1460	21 the transfer, the assignor shall record the transfer in
1461	1461	22 the chain of title for the site and provide written notice
1462	1462	23 to the Director of the Illinois Department of Revenue of
1463	1463	24 the assignor's intent to sell the remediation site and the
1464	1464	25 amount of the tax credit to be transferred as a portion of
1465	1465	26 the sale. In no event may a credit be transferred to any
1466	1466
1467	1467
1468	1468
1469	1469
1470	1470
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1472	1472
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1475	1475	SB3474 - 41 - LRB103 36904 HLH 67017 b
1476	1476	1 taxpayer if the taxpayer or a related party would not be
1477	1477	2 eligible under the provisions of subsection (i).
1478	1478	3 (iii) For purposes of this Section, the term "site"
1479	1479	4 shall have the same meaning as under Section 58.2 of the
1480	1480	5 Environmental Protection Act.
1481	1481	6 (o) For each of taxable years during the Compassionate Use
1482	1482	7 of Medical Cannabis Program, a surcharge is imposed on all
1483	1483	8 taxpayers on income arising from the sale or exchange of
1484	1484	9 capital assets, depreciable business property, real property
1485	1485	10 used in the trade or business, and Section 197 intangibles of
1486	1486	11 an organization registrant under the Compassionate Use of
1487	1487	12 Medical Cannabis Program Act. The amount of the surcharge is
1488	1488	13 equal to the amount of federal income tax liability for the
1489	1489	14 taxable year attributable to those sales and exchanges. The
1490	1490	15 surcharge imposed does not apply if:
1491	1491	16 (1) the medical cannabis cultivation center
1492	1492	17 registration, medical cannabis dispensary registration, or
1493	1493	18 the property of a registration is transferred as a result
1494	1494	19 of any of the following:
1495	1495	20 (A) bankruptcy, a receivership, or a debt
1496	1496	21 adjustment initiated by or against the initial
1497	1497	22 registration or the substantial owners of the initial
1498	1498	23 registration;
1499	1499	24 (B) cancellation, revocation, or termination of
1500	1500	25 any registration by the Illinois Department of Public
1501	1501	26 Health;
1502	1502
1503	1503
1504	1504
1505	1505
1506	1506
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1508	1508
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1512	1512	1 (C) a determination by the Illinois Department of
1513	1513	2 Public Health that transfer of the registration is in
1514	1514	3 the best interests of Illinois qualifying patients as
1515	1515	4 defined by the Compassionate Use of Medical Cannabis
1516	1516	5 Program Act;
1517	1517	6 (D) the death of an owner of the equity interest in
1518	1518	7 a registrant;
1519	1519	8 (E) the acquisition of a controlling interest in
1520	1520	9 the stock or substantially all of the assets of a
1521	1521	10 publicly traded company;
1522	1522	11 (F) a transfer by a parent company to a wholly
1523	1523	12 owned subsidiary; or
1524	1524	13 (G) the transfer or sale to or by one person to
1525	1525	14 another person where both persons were initial owners
1526	1526	15 of the registration when the registration was issued;
1527	1527	16 or
1528	1528	17 (2) the cannabis cultivation center registration,
1529	1529	18 medical cannabis dispensary registration, or the
1530	1530	19 controlling interest in a registrant's property is
1531	1531	20 transferred in a transaction to lineal descendants in
1532	1532	21 which no gain or loss is recognized or as a result of a
1533	1533	22 transaction in accordance with Section 351 of the Internal
1534	1534	23 Revenue Code in which no gain or loss is recognized.
1535	1535	24 (p) Pass-through entity tax.
1536	1536	25 (1) For taxable years ending on or after December 31,
1537	1537	26 2021 and beginning prior to January 1, 2026, a partnership
1538	1538
1539	1539
1540	1540
1541	1541
1542	1542
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1544	1544
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1547	1547	SB3474 - 43 - LRB103 36904 HLH 67017 b
1548	1548	1 (other than a publicly traded partnership under Section
1549	1549	2 7704 of the Internal Revenue Code) or Subchapter S
1550	1550	3 corporation may elect to apply the provisions of this
1551	1551	4 subsection. A separate election shall be made for each
1552	1552	5 taxable year. Such election shall be made at such time,
1553	1553	6 and in such form and manner as prescribed by the
1554	1554	7 Department, and, once made, is irrevocable.
1555	1555	8 (2) Entity-level tax. A partnership or Subchapter S
1556	1556	9 corporation electing to apply the provisions of this
1557	1557	10 subsection shall be subject to a tax for the privilege of
1558	1558	11 earning or receiving income in this State in an amount
1559	1559	12 equal to 4.95% of the taxpayer's net income for the
1560	1560	13 taxable year.
1561	1561	14 (3) Net income defined.
1562	1562	15 (A) In general. For purposes of paragraph (2), the
1563	1563	16 term net income has the same meaning as defined in
1564	1564	17 Section 202 of this Act, except that, for tax years
1565	1565	18 ending on or after December 31, 2023, a deduction
1566	1566	19 shall be allowed in computing base income for
1567	1567	20 distributions to a retired partner to the extent that
1568	1568	21 the partner's distributions are exempt from tax under
1569	1569	22 Section 203(a)(2)(F) of this Act. In addition, the
1570	1570	23 following modifications shall not apply:
1571	1571	24 (i) the standard exemption allowed under
1572	1572	25 Section 204;
1573	1573	26 (ii) the deduction for net losses allowed
1574	1574
1575	1575
1576	1576
1577	1577
1578	1578
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1580	1580
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1583	1583	SB3474 - 44 - LRB103 36904 HLH 67017 b
1584	1584	1 under Section 207;
1585	1585	2 (iii) in the case of an S corporation, the
1586	1586	3 modification under Section 203(b)(2)(S); and
1587	1587	4 (iv) in the case of a partnership, the
1588	1588	5 modifications under Section 203(d)(2)(H) and
1589	1589	6 Section 203(d)(2)(I).
1590	1590	7 (B) Special rule for tiered partnerships. If a
1591	1591	8 taxpayer making the election under paragraph (1) is a
1592	1592	9 partner of another taxpayer making the election under
1593	1593	10 paragraph (1), net income shall be computed as
1594	1594	11 provided in subparagraph (A), except that the taxpayer
1595	1595	12 shall subtract its distributive share of the net
1596	1596	13 income of the electing partnership (including its
1597	1597	14 distributive share of the net income of the electing
1598	1598	15 partnership derived as a distributive share from
1599	1599	16 electing partnerships in which it is a partner).
1600	1600	17 (4) Credit for entity level tax. Each partner or
1601	1601	18 shareholder of a taxpayer making the election under this
1602	1602	19 Section shall be allowed a credit against the tax imposed
1603	1603	20 under subsections (a) and (b) of Section 201 of this Act
1604	1604	21 for the taxable year of the partnership or Subchapter S
1605	1605	22 corporation for which an election is in effect ending
1606	1606	23 within or with the taxable year of the partner or
1607	1607	24 shareholder in an amount equal to 4.95% times the partner
1608	1608	25 or shareholder's distributive share of the net income of
1609	1609	26 the electing partnership or Subchapter S corporation, but
1610	1610
1611	1611
1612	1612
1613	1613
1614	1614
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1616	1616
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1619	1619	SB3474 - 45 - LRB103 36904 HLH 67017 b
1620	1620	1 not to exceed the partner's or shareholder's share of the
1621	1621	2 tax imposed under paragraph (1) which is actually paid by
1622	1622	3 the partnership or Subchapter S corporation. If the
1623	1623	4 taxpayer is a partnership or Subchapter S corporation that
1624	1624	5 is itself a partner of a partnership making the election
1625	1625	6 under paragraph (1), the credit under this paragraph shall
1626	1626	7 be allowed to the taxpayer's partners or shareholders (or
1627	1627	8 if the partner is a partnership or Subchapter S
1628	1628	9 corporation then its partners or shareholders) in
1629	1629	10 accordance with the determination of income and
1630	1630	11 distributive share of income under Sections 702 and 704
1631	1631	12 and Subchapter S of the Internal Revenue Code. If the
1632	1632	13 amount of the credit allowed under this paragraph exceeds
1633	1633	14 the partner's or shareholder's liability for tax imposed
1634	1634	15 under subsections (a) and (b) of Section 201 of this Act
1635	1635	16 for the taxable year, such excess shall be treated as an
1636	1636	17 overpayment for purposes of Section 909 of this Act.
1637	1637	18 (5) Nonresidents. A nonresident individual who is a
1638	1638	19 partner or shareholder of a partnership or Subchapter S
1639	1639	20 corporation for a taxable year for which an election is in
1640	1640	21 effect under paragraph (1) shall not be required to file
1641	1641	22 an income tax return under this Act for such taxable year
1642	1642	23 if the only source of net income of the individual (or the
1643	1643	24 individual and the individual's spouse in the case of a
1644	1644	25 joint return) is from an entity making the election under
1645	1645	26 paragraph (1) and the credit allowed to the partner or
1646	1646
1647	1647
1648	1648
1649	1649
1650	1650
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1652	1652
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1655	1655	SB3474 - 46 - LRB103 36904 HLH 67017 b
1656	1656	1 shareholder under paragraph (4) equals or exceeds the
1657	1657	2 individual's liability for the tax imposed under
1658	1658	3 subsections (a) and (b) of Section 201 of this Act for the
1659	1659	4 taxable year.
1660	1660	5 (6) Liability for tax. Except as provided in this
1661	1661	6 paragraph, a partnership or Subchapter S making the
1662	1662	7 election under paragraph (1) is liable for the
1663	1663	8 entity-level tax imposed under paragraph (2). If the
1664	1664	9 electing partnership or corporation fails to pay the full
1665	1665	10 amount of tax deemed assessed under paragraph (2), the
1666	1666	11 partners or shareholders shall be liable to pay the tax
1667	1667	12 assessed (including penalties and interest). Each partner
1668	1668	13 or shareholder shall be liable for the unpaid assessment
1669	1669	14 based on the ratio of the partner's or shareholder's share
1670	1670	15 of the net income of the partnership over the total net
1671	1671	16 income of the partnership. If the partnership or
1672	1672	17 Subchapter S corporation fails to pay the tax assessed
1673	1673	18 (including penalties and interest) and thereafter an
1674	1674	19 amount of such tax is paid by the partners or
1675	1675	20 shareholders, such amount shall not be collected from the
1676	1676	21 partnership or corporation.
1677	1677	22 (7) Foreign tax. For purposes of the credit allowed
1678	1678	23 under Section 601(b)(3) of this Act, tax paid by a
1679	1679	24 partnership or Subchapter S corporation to another state
1680	1680	25 which, as determined by the Department, is substantially
1681	1681	26 similar to the tax imposed under this subsection, shall be
1682	1682
1683	1683
1684	1684
1685	1685
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1691	1691	SB3474 - 47 - LRB103 36904 HLH 67017 b
1692	1692	1 considered tax paid by the partner or shareholder to the
1693	1693	2 extent that the partner's or shareholder's share of the
1694	1694	3 income of the partnership or Subchapter S corporation
1695	1695	4 allocated and apportioned to such other state bears to the
1696	1696	5 total income of the partnership or Subchapter S
1697	1697	6 corporation allocated or apportioned to such other state.
1698	1698	7 (8) Suspension of withholding. The provisions of
1699	1699	8 Section 709.5 of this Act shall not apply to a partnership
1700	1700	9 or Subchapter S corporation for the taxable year for which
1701	1701	10 an election under paragraph (1) is in effect.
1702	1702	11 (9) Requirement to pay estimated tax. For each taxable
1703	1703	12 year for which an election under paragraph (1) is in
1704	1704	13 effect, a partnership or Subchapter S corporation is
1705	1705	14 required to pay estimated tax for such taxable year under
1706	1706	15 Sections 803 and 804 of this Act if the amount payable as
1707	1707	16 estimated tax can reasonably be expected to exceed $500.
1708	1708	17 (10) The provisions of this subsection shall apply
1709	1709	18 only with respect to taxable years for which the
1710	1710	19 limitation on individual deductions applies under Section
1711	1711	20 164(b)(6) of the Internal Revenue Code.
1712	1712	21 (Source: P.A. 102-558, eff. 8-20-21; 102-658, eff. 8-27-21;
1713	1713	22 103-9, eff. 6-7-23; 103-396, eff. 1-1-24; revised 12-12-23.)
1714	1714	23 (35 ILCS 5/241 new)
1715	1715	24 Sec. 241. Quantum information science research and
1716	1716	25 development tax credit.
1717	1717
1718	1718
1719	1719
1720	1720
1721	1721
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1727	1727	1 (a) For tax years ending on or after December 31, 2025, a
1728	1728	2 taxpayer who qualifies for a quantum information science
1729	1729	3 research and development tax credit pursuant to Section
1730	1730	4 605-1115 of the Department of Commerce and Economic
1731	1731	5 Opportunity Law of the Civil Administrative Code of Illinois,
1732	1732	6 is entitled to a credit against the tax imposed by subsections
1733	1733	7 (a) and (b) of Section 201 of this Act as provided in that
1734	1734	8 Section.
1735	1735	9 (b) For partners and shareholders of subchapter S
1736	1736	10 corporations, the credit under this Section shall be
1737	1737	11 determined in accordance with Section 251.
1738	1738	12 (c) In no event shall a taxpayer be allowed both a credit
1739	1739	13 under this Section for qualifying quantum information science
1740	1740	14 expenditures and the research and development credit provided
1741	1741	15 under subsection (k) of Section 201 for the same expenditures.
1742	1742	16 (d) Any credit awarded under this Section in excess of the
1743	1743	17 taxpayer's tax liability for the taxable year may be carried
1744	1744	18 forward. A taxpayer may elect to have the unused credit shown
1745	1745	19 on its final completed return carried over as a credit against
1746	1746	20 the tax liability for the following 5 taxable years or until
1747	1747	21 the credit has been fully used, whichever occurs first. If a
1748	1748	22 tax liability for the given year still remains, the credit
1749	1749	23 from the next earliest year will then be applied, and so on,
1750	1750	24 until all credits have been used or no tax liability for the
1751	1751	25 given year remains. Any remaining unused credit or credits
1752	1752	26 then will be carried forward to the next following year in
1753	1753
1754	1754
1755	1755
1756	1756
1757	1757
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1763	1763	1 which a tax liability is incurred, except that no credit can be
1764	1764	2 carried forward to a year which is more than 5 years after the
1765	1765	3 year in which the expense for which the credit is given was
1766	1766	4 incurred.
1767	1767	5 (e) This Section is exempt from the provisions of Section
1768	1768	6 250 of this Act.
1769	1769
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1771	1771
1772	1772
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