Illinois 2023-2024 Regular Session

Illinois Senate Bill SB3489 Compare Versions

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

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1	1	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB3489 Introduced 2/9/2024, by Sen. Chapin Rose SYNOPSIS AS INTRODUCED: 35 ILCS 5/203 from Ch. 120, par. 2-203 Amends the Illinois Income Tax Act. Creates a deduction for amounts that are disallowed as a deduction on the taxpayer's federal income tax return because of the $10,000 limitation under the federal Internal Revenue Code on deductions for certain State and local taxes. Effective immediately. LRB103 35047 HLH 64992 b A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB3489 Introduced 2/9/2024, by Sen. Chapin Rose SYNOPSIS AS INTRODUCED: 35 ILCS 5/203 from Ch. 120, par. 2-203 35 ILCS 5/203 from Ch. 120, par. 2-203 Amends the Illinois Income Tax Act. Creates a deduction for amounts that are disallowed as a deduction on the taxpayer's federal income tax return because of the $10,000 limitation under the federal Internal Revenue Code on deductions for certain State and local taxes. Effective immediately. LRB103 35047 HLH 64992 b LRB103 35047 HLH 64992 b A BILL FOR
2	2	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB3489 Introduced 2/9/2024, by Sen. Chapin Rose SYNOPSIS AS INTRODUCED:
3	3	35 ILCS 5/203 from Ch. 120, par. 2-203 35 ILCS 5/203 from Ch. 120, par. 2-203
4	4	35 ILCS 5/203 from Ch. 120, par. 2-203
5	5	Amends the Illinois Income Tax Act. Creates a deduction for amounts that are disallowed as a deduction on the taxpayer's federal income tax return because of the $10,000 limitation under the federal Internal Revenue Code on deductions for certain State and local taxes. Effective immediately.
6	6	LRB103 35047 HLH 64992 b LRB103 35047 HLH 64992 b
7	7	LRB103 35047 HLH 64992 b
8	8	A BILL FOR
9	9	SB3489LRB103 35047 HLH 64992 b SB3489 LRB103 35047 HLH 64992 b
10	10	SB3489 LRB103 35047 HLH 64992 b
11	11	1 AN ACT concerning revenue.
12	12	2 Be it enacted by the People of the State of Illinois,
13	13	3 represented in the General Assembly:
14	14	4 Section 5. The Illinois Income Tax Act is amended by
15	15	5 changing Section 203 as follows:
16	16	6 (35 ILCS 5/203) (from Ch. 120, par. 2-203)
17	17	7 Sec. 203. Base income defined.
18	18	8 (a) Individuals.
19	19	9 (1) In general. In the case of an individual, base
20	20	10 income means an amount equal to the taxpayer's adjusted
21	21	11 gross income for the taxable year as modified by paragraph
22	22	12 (2).
23	23	13 (2) Modifications. The adjusted gross income referred
24	24	14 to in paragraph (1) shall be modified by adding thereto
25	25	15 the sum of the following amounts:
26	26	16 (A) An amount equal to all amounts paid or accrued
27	27	17 to the taxpayer as interest or dividends during the
28	28	18 taxable year to the extent excluded from gross income
29	29	19 in the computation of adjusted gross income, except
30	30	20 stock dividends of qualified public utilities
31	31	21 described in Section 305(e) of the Internal Revenue
32	32	22 Code;
33	33	23 (B) An amount equal to the amount of tax imposed by
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37	37	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB3489 Introduced 2/9/2024, by Sen. Chapin Rose SYNOPSIS AS INTRODUCED:
38	38	35 ILCS 5/203 from Ch. 120, par. 2-203 35 ILCS 5/203 from Ch. 120, par. 2-203
39	39	35 ILCS 5/203 from Ch. 120, par. 2-203
40	40	Amends the Illinois Income Tax Act. Creates a deduction for amounts that are disallowed as a deduction on the taxpayer's federal income tax return because of the $10,000 limitation under the federal Internal Revenue Code on deductions for certain State and local taxes. Effective immediately.
41	41	LRB103 35047 HLH 64992 b LRB103 35047 HLH 64992 b
42	42	LRB103 35047 HLH 64992 b
43	43	A BILL FOR
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68	68	1 this Act to the extent deducted from gross income in
69	69	2 the computation of adjusted gross income for the
70	70	3 taxable year;
71	71	4 (C) An amount equal to the amount received during
72	72	5 the taxable year as a recovery or refund of real
73	73	6 property taxes paid with respect to the taxpayer's
74	74	7 principal residence under the Revenue Act of 1939 and
75	75	8 for which a deduction was previously taken under
76	76	9 subparagraph (L) of this paragraph (2) prior to July
77	77	10 1, 1991, the retrospective application date of Article
78	78	11 4 of Public Act 87-17. In the case of multi-unit or
79	79	12 multi-use structures and farm dwellings, the taxes on
80	80	13 the taxpayer's principal residence shall be that
81	81	14 portion of the total taxes for the entire property
82	82	15 which is attributable to such principal residence;
83	83	16 (D) An amount equal to the amount of the capital
84	84	17 gain deduction allowable under the Internal Revenue
85	85	18 Code, to the extent deducted from gross income in the
86	86	19 computation of adjusted gross income;
87	87	20 (D-5) An amount, to the extent not included in
88	88	21 adjusted gross income, equal to the amount of money
89	89	22 withdrawn by the taxpayer in the taxable year from a
90	90	23 medical care savings account and the interest earned
91	91	24 on the account in the taxable year of a withdrawal
92	92	25 pursuant to subsection (b) of Section 20 of the
93	93	26 Medical Care Savings Account Act or subsection (b) of
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104	104	1 Section 20 of the Medical Care Savings Account Act of
105	105	2 2000;
106	106	3 (D-10) For taxable years ending after December 31,
107	107	4 1997, an amount equal to any eligible remediation
108	108	5 costs that the individual deducted in computing
109	109	6 adjusted gross income and for which the individual
110	110	7 claims a credit under subsection (l) of Section 201;
111	111	8 (D-15) For taxable years 2001 and thereafter, an
112	112	9 amount equal to the bonus depreciation deduction taken
113	113	10 on the taxpayer's federal income tax return for the
114	114	11 taxable year under subsection (k) of Section 168 of
115	115	12 the Internal Revenue Code;
116	116	13 (D-16) If the taxpayer sells, transfers, abandons,
117	117	14 or otherwise disposes of property for which the
118	118	15 taxpayer was required in any taxable year to make an
119	119	16 addition modification under subparagraph (D-15), then
120	120	17 an amount equal to the aggregate amount of the
121	121	18 deductions taken in all taxable years under
122	122	19 subparagraph (Z) with respect to that property.
123	123	20 If the taxpayer continues to own property through
124	124	21 the last day of the last tax year for which a
125	125	22 subtraction is allowed with respect to that property
126	126	23 under subparagraph (Z) and for which the taxpayer was
127	127	24 allowed in any taxable year to make a subtraction
128	128	25 modification under subparagraph (Z), then an amount
129	129	26 equal to that subtraction modification.
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140	140	1 The taxpayer is required to make the addition
141	141	2 modification under this subparagraph only once with
142	142	3 respect to any one piece of property;
143	143	4 (D-17) An amount equal to the amount otherwise
144	144	5 allowed as a deduction in computing base income for
145	145	6 interest paid, accrued, or incurred, directly or
146	146	7 indirectly, (i) for taxable years ending on or after
147	147	8 December 31, 2004, to a foreign person who would be a
148	148	9 member of the same unitary business group but for the
149	149	10 fact that foreign person's business activity outside
150	150	11 the United States is 80% or more of the foreign
151	151	12 person's total business activity and (ii) for taxable
152	152	13 years ending on or after December 31, 2008, to a person
153	153	14 who would be a member of the same unitary business
154	154	15 group but for the fact that the person is prohibited
155	155	16 under Section 1501(a)(27) from being included in the
156	156	17 unitary business group because he or she is ordinarily
157	157	18 required to apportion business income under different
158	158	19 subsections of Section 304. The addition modification
159	159	20 required by this subparagraph shall be reduced to the
160	160	21 extent that dividends were included in base income of
161	161	22 the unitary group for the same taxable year and
162	162	23 received by the taxpayer or by a member of the
163	163	24 taxpayer's unitary business group (including amounts
164	164	25 included in gross income under Sections 951 through
165	165	26 964 of the Internal Revenue Code and amounts included
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176	176	1 in gross income under Section 78 of the Internal
177	177	2 Revenue Code) with respect to the stock of the same
178	178	3 person to whom the interest was paid, accrued, or
179	179	4 incurred.
180	180	5 This paragraph shall not apply to the following:
181	181	6 (i) an item of interest paid, accrued, or
182	182	7 incurred, directly or indirectly, to a person who
183	183	8 is subject in a foreign country or state, other
184	184	9 than a state which requires mandatory unitary
185	185	10 reporting, to a tax on or measured by net income
186	186	11 with respect to such interest; or
187	187	12 (ii) an item of interest paid, accrued, or
188	188	13 incurred, directly or indirectly, to a person if
189	189	14 the taxpayer can establish, based on a
190	190	15 preponderance of the evidence, both of the
191	191	16 following:
192	192	17 (a) the person, during the same taxable
193	193	18 year, paid, accrued, or incurred, the interest
194	194	19 to a person that is not a related member, and
195	195	20 (b) the transaction giving rise to the
196	196	21 interest expense between the taxpayer and the
197	197	22 person did not have as a principal purpose the
198	198	23 avoidance of Illinois income tax, and is paid
199	199	24 pursuant to a contract or agreement that
200	200	25 reflects an arm's-length interest rate and
201	201	26 terms; or
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212	212	1 (iii) the taxpayer can establish, based on
213	213	2 clear and convincing evidence, that the interest
214	214	3 paid, accrued, or incurred relates to a contract
215	215	4 or agreement entered into at arm's-length rates
216	216	5 and terms and the principal purpose for the
217	217	6 payment is not federal or Illinois tax avoidance;
218	218	7 or
219	219	8 (iv) an item of interest paid, accrued, or
220	220	9 incurred, directly or indirectly, to a person if
221	221	10 the taxpayer establishes by clear and convincing
222	222	11 evidence that the adjustments are unreasonable; or
223	223	12 if the taxpayer and the Director agree in writing
224	224	13 to the application or use of an alternative method
225	225	14 of apportionment under Section 304(f).
226	226	15 Nothing in this subsection shall preclude the
227	227	16 Director from making any other adjustment
228	228	17 otherwise allowed under Section 404 of this Act
229	229	18 for any tax year beginning after the effective
230	230	19 date of this amendment provided such adjustment is
231	231	20 made pursuant to regulation adopted by the
232	232	21 Department and such regulations provide methods
233	233	22 and standards by which the Department will utilize
234	234	23 its authority under Section 404 of this Act;
235	235	24 (D-18) An amount equal to the amount of intangible
236	236	25 expenses and costs otherwise allowed as a deduction in
237	237	26 computing base income, and that were paid, accrued, or
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248	248	1 incurred, directly or indirectly, (i) for taxable
249	249	2 years ending on or after December 31, 2004, to a
250	250	3 foreign person who would be a member of the same
251	251	4 unitary business group but for the fact that the
252	252	5 foreign person's business activity outside the United
253	253	6 States is 80% or more of that person's total business
254	254	7 activity and (ii) for taxable years ending on or after
255	255	8 December 31, 2008, to a person who would be a member of
256	256	9 the same unitary business group but for the fact that
257	257	10 the person is prohibited under Section 1501(a)(27)
258	258	11 from being included in the unitary business group
259	259	12 because he or she is ordinarily required to apportion
260	260	13 business income under different subsections of Section
261	261	14 304. The addition modification required by this
262	262	15 subparagraph shall be reduced to the extent that
263	263	16 dividends were included in base income of the unitary
264	264	17 group for the same taxable year and received by the
265	265	18 taxpayer or by a member of the taxpayer's unitary
266	266	19 business group (including amounts included in gross
267	267	20 income under Sections 951 through 964 of the Internal
268	268	21 Revenue Code and amounts included in gross income
269	269	22 under Section 78 of the Internal Revenue Code) with
270	270	23 respect to the stock of the same person to whom the
271	271	24 intangible expenses and costs were directly or
272	272	25 indirectly paid, incurred, or accrued. The preceding
273	273	26 sentence does not apply to the extent that the same
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284	284	1 dividends caused a reduction to the addition
285	285	2 modification required under Section 203(a)(2)(D-17) of
286	286	3 this Act. As used in this subparagraph, the term
287	287	4 "intangible expenses and costs" includes (1) expenses,
288	288	5 losses, and costs for, or related to, the direct or
289	289	6 indirect acquisition, use, maintenance or management,
290	290	7 ownership, sale, exchange, or any other disposition of
291	291	8 intangible property; (2) losses incurred, directly or
292	292	9 indirectly, from factoring transactions or discounting
293	293	10 transactions; (3) royalty, patent, technical, and
294	294	11 copyright fees; (4) licensing fees; and (5) other
295	295	12 similar expenses and costs. For purposes of this
296	296	13 subparagraph, "intangible property" includes patents,
297	297	14 patent applications, trade names, trademarks, service
298	298	15 marks, copyrights, mask works, trade secrets, and
299	299	16 similar types of intangible assets.
300	300	17 This paragraph shall not apply to the following:
301	301	18 (i) any item of intangible expenses or costs
302	302	19 paid, accrued, or incurred, directly or
303	303	20 indirectly, from a transaction with a person who
304	304	21 is subject in a foreign country or state, other
305	305	22 than a state which requires mandatory unitary
306	306	23 reporting, to a tax on or measured by net income
307	307	24 with respect to such item; or
308	308	25 (ii) any item of intangible expense or cost
309	309	26 paid, accrued, or incurred, directly or
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320	320	1 indirectly, if the taxpayer can establish, based
321	321	2 on a preponderance of the evidence, both of the
322	322	3 following:
323	323	4 (a) the person during the same taxable
324	324	5 year paid, accrued, or incurred, the
325	325	6 intangible expense or cost to a person that is
326	326	7 not a related member, and
327	327	8 (b) the transaction giving rise to the
328	328	9 intangible expense or cost between the
329	329	10 taxpayer and the person did not have as a
330	330	11 principal purpose the avoidance of Illinois
331	331	12 income tax, and is paid pursuant to a contract
332	332	13 or agreement that reflects arm's-length terms;
333	333	14 or
334	334	15 (iii) any item of intangible expense or cost
335	335	16 paid, accrued, or incurred, directly or
336	336	17 indirectly, from a transaction with a person if
337	337	18 the taxpayer establishes by clear and convincing
338	338	19 evidence, that the adjustments are unreasonable;
339	339	20 or if the taxpayer and the Director agree in
340	340	21 writing to the application or use of an
341	341	22 alternative method of apportionment under Section
342	342	23 304(f);
343	343	24 Nothing in this subsection shall preclude the
344	344	25 Director from making any other adjustment
345	345	26 otherwise allowed under Section 404 of this Act
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356	356	1 for any tax year beginning after the effective
357	357	2 date of this amendment provided such adjustment is
358	358	3 made pursuant to regulation adopted by the
359	359	4 Department and such regulations provide methods
360	360	5 and standards by which the Department will utilize
361	361	6 its authority under Section 404 of this Act;
362	362	7 (D-19) For taxable years ending on or after
363	363	8 December 31, 2008, an amount equal to the amount of
364	364	9 insurance premium expenses and costs otherwise allowed
365	365	10 as a deduction in computing base income, and that were
366	366	11 paid, accrued, or incurred, directly or indirectly, to
367	367	12 a person who would be a member of the same unitary
368	368	13 business group but for the fact that the person is
369	369	14 prohibited under Section 1501(a)(27) from being
370	370	15 included in the unitary business group because he or
371	371	16 she is ordinarily required to apportion business
372	372	17 income under different subsections of Section 304. The
373	373	18 addition modification required by this subparagraph
374	374	19 shall be reduced to the extent that dividends were
375	375	20 included in base income of the unitary group for the
376	376	21 same taxable year and received by the taxpayer or by a
377	377	22 member of the taxpayer's unitary business group
378	378	23 (including amounts included in gross income under
379	379	24 Sections 951 through 964 of the Internal Revenue Code
380	380	25 and amounts included in gross income under Section 78
381	381	26 of the Internal Revenue Code) with respect to the
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392	392	1 stock of the same person to whom the premiums and costs
393	393	2 were directly or indirectly paid, incurred, or
394	394	3 accrued. The preceding sentence does not apply to the
395	395	4 extent that the same dividends caused a reduction to
396	396	5 the addition modification required under Section
397	397	6 203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this
398	398	7 Act;
399	399	8 (D-20) For taxable years beginning on or after
400	400	9 January 1, 2002 and ending on or before December 31,
401	401	10 2006, in the case of a distribution from a qualified
402	402	11 tuition program under Section 529 of the Internal
403	403	12 Revenue Code, other than (i) a distribution from a
404	404	13 College Savings Pool created under Section 16.5 of the
405	405	14 State Treasurer Act or (ii) a distribution from the
406	406	15 Illinois Prepaid Tuition Trust Fund, an amount equal
407	407	16 to the amount excluded from gross income under Section
408	408	17 529(c)(3)(B). For taxable years beginning on or after
409	409	18 January 1, 2007, in the case of a distribution from a
410	410	19 qualified tuition program under Section 529 of the
411	411	20 Internal Revenue Code, other than (i) a distribution
412	412	21 from a College Savings Pool created under Section 16.5
413	413	22 of the State Treasurer Act, (ii) a distribution from
414	414	23 the Illinois Prepaid Tuition Trust Fund, or (iii) a
415	415	24 distribution from a qualified tuition program under
416	416	25 Section 529 of the Internal Revenue Code that (I)
417	417	26 adopts and determines that its offering materials
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428	428	1 comply with the College Savings Plans Network's
429	429	2 disclosure principles and (II) has made reasonable
430	430	3 efforts to inform in-state residents of the existence
431	431	4 of in-state qualified tuition programs by informing
432	432	5 Illinois residents directly and, where applicable, to
433	433	6 inform financial intermediaries distributing the
434	434	7 program to inform in-state residents of the existence
435	435	8 of in-state qualified tuition programs at least
436	436	9 annually, an amount equal to the amount excluded from
437	437	10 gross income under Section 529(c)(3)(B).
438	438	11 For the purposes of this subparagraph (D-20), a
439	439	12 qualified tuition program has made reasonable efforts
440	440	13 if it makes disclosures (which may use the term
441	441	14 "in-state program" or "in-state plan" and need not
442	442	15 specifically refer to Illinois or its qualified
443	443	16 programs by name) (i) directly to prospective
444	444	17 participants in its offering materials or makes a
445	445	18 public disclosure, such as a website posting; and (ii)
446	446	19 where applicable, to intermediaries selling the
447	447	20 out-of-state program in the same manner that the
448	448	21 out-of-state program distributes its offering
449	449	22 materials;
450	450	23 (D-20.5) For taxable years beginning on or after
451	451	24 January 1, 2018, in the case of a distribution from a
452	452	25 qualified ABLE program under Section 529A of the
453	453	26 Internal Revenue Code, other than a distribution from
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464	464	1 a qualified ABLE program created under Section 16.6 of
465	465	2 the State Treasurer Act, an amount equal to the amount
466	466	3 excluded from gross income under Section 529A(c)(1)(B)
467	467	4 of the Internal Revenue Code;
468	468	5 (D-21) For taxable years beginning on or after
469	469	6 January 1, 2007, in the case of transfer of moneys from
470	470	7 a qualified tuition program under Section 529 of the
471	471	8 Internal Revenue Code that is administered by the
472	472	9 State to an out-of-state program, an amount equal to
473	473	10 the amount of moneys previously deducted from base
474	474	11 income under subsection (a)(2)(Y) of this Section;
475	475	12 (D-21.5) For taxable years beginning on or after
476	476	13 January 1, 2018, in the case of the transfer of moneys
477	477	14 from a qualified tuition program under Section 529 or
478	478	15 a qualified ABLE program under Section 529A of the
479	479	16 Internal Revenue Code that is administered by this
480	480	17 State to an ABLE account established under an
481	481	18 out-of-state ABLE account program, an amount equal to
482	482	19 the contribution component of the transferred amount
483	483	20 that was previously deducted from base income under
484	484	21 subsection (a)(2)(Y) or subsection (a)(2)(HH) of this
485	485	22 Section;
486	486	23 (D-22) For taxable years beginning on or after
487	487	24 January 1, 2009, and prior to January 1, 2018, in the
488	488	25 case of a nonqualified withdrawal or refund of moneys
489	489	26 from a qualified tuition program under Section 529 of
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500	500	1 the Internal Revenue Code administered by the State
501	501	2 that is not used for qualified expenses at an eligible
502	502	3 education institution, an amount equal to the
503	503	4 contribution component of the nonqualified withdrawal
504	504	5 or refund that was previously deducted from base
505	505	6 income under subsection (a)(2)(y) of this Section,
506	506	7 provided that the withdrawal or refund did not result
507	507	8 from the beneficiary's death or disability. For
508	508	9 taxable years beginning on or after January 1, 2018:
509	509	10 (1) in the case of a nonqualified withdrawal or
510	510	11 refund, as defined under Section 16.5 of the State
511	511	12 Treasurer Act, of moneys from a qualified tuition
512	512	13 program under Section 529 of the Internal Revenue Code
513	513	14 administered by the State, an amount equal to the
514	514	15 contribution component of the nonqualified withdrawal
515	515	16 or refund that was previously deducted from base
516	516	17 income under subsection (a)(2)(Y) of this Section, and
517	517	18 (2) in the case of a nonqualified withdrawal or refund
518	518	19 from a qualified ABLE program under Section 529A of
519	519	20 the Internal Revenue Code administered by the State
520	520	21 that is not used for qualified disability expenses, an
521	521	22 amount equal to the contribution component of the
522	522	23 nonqualified withdrawal or refund that was previously
523	523	24 deducted from base income under subsection (a)(2)(HH)
524	524	25 of this Section;
525	525	26 (D-23) An amount equal to the credit allowable to
526	526
527	527
528	528
529	529
530	530
531	531	SB3489 - 14 - LRB103 35047 HLH 64992 b
532	532
533	533
534	534	SB3489- 15 -LRB103 35047 HLH 64992 b SB3489 - 15 - LRB103 35047 HLH 64992 b
535	535	SB3489 - 15 - LRB103 35047 HLH 64992 b
536	536	1 the taxpayer under Section 218(a) of this Act,
537	537	2 determined without regard to Section 218(c) of this
538	538	3 Act;
539	539	4 (D-24) For taxable years ending on or after
540	540	5 December 31, 2017, an amount equal to the deduction
541	541	6 allowed under Section 199 of the Internal Revenue Code
542	542	7 for the taxable year;
543	543	8 (D-25) In the case of a resident, an amount equal
544	544	9 to the amount of tax for which a credit is allowed
545	545	10 pursuant to Section 201(p)(7) of this Act;
546	546	11 and by deducting from the total so obtained the sum of the
547	547	12 following amounts:
548	548	13 (E) For taxable years ending before December 31,
549	549	14 2001, any amount included in such total in respect of
550	550	15 any compensation (including but not limited to any
551	551	16 compensation paid or accrued to a serviceman while a
552	552	17 prisoner of war or missing in action) paid to a
553	553	18 resident by reason of being on active duty in the Armed
554	554	19 Forces of the United States and in respect of any
555	555	20 compensation paid or accrued to a resident who as a
556	556	21 governmental employee was a prisoner of war or missing
557	557	22 in action, and in respect of any compensation paid to a
558	558	23 resident in 1971 or thereafter for annual training
559	559	24 performed pursuant to Sections 502 and 503, Title 32,
560	560	25 United States Code as a member of the Illinois
561	561	26 National Guard or, beginning with taxable years ending
562	562
563	563
564	564
565	565
566	566
567	567	SB3489 - 15 - LRB103 35047 HLH 64992 b
568	568
569	569
570	570	SB3489- 16 -LRB103 35047 HLH 64992 b SB3489 - 16 - LRB103 35047 HLH 64992 b
571	571	SB3489 - 16 - LRB103 35047 HLH 64992 b
572	572	1 on or after December 31, 2007, the National Guard of
573	573	2 any other state. For taxable years ending on or after
574	574	3 December 31, 2001, any amount included in such total
575	575	4 in respect of any compensation (including but not
576	576	5 limited to any compensation paid or accrued to a
577	577	6 serviceman while a prisoner of war or missing in
578	578	7 action) paid to a resident by reason of being a member
579	579	8 of any component of the Armed Forces of the United
580	580	9 States and in respect of any compensation paid or
581	581	10 accrued to a resident who as a governmental employee
582	582	11 was a prisoner of war or missing in action, and in
583	583	12 respect of any compensation paid to a resident in 2001
584	584	13 or thereafter by reason of being a member of the
585	585	14 Illinois National Guard or, beginning with taxable
586	586	15 years ending on or after December 31, 2007, the
587	587	16 National Guard of any other state. The provisions of
588	588	17 this subparagraph (E) are exempt from the provisions
589	589	18 of Section 250;
590	590	19 (F) An amount equal to all amounts included in
591	591	20 such total pursuant to the provisions of Sections
592	592	21 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
593	593	22 408 of the Internal Revenue Code, or included in such
594	594	23 total as distributions under the provisions of any
595	595	24 retirement or disability plan for employees of any
596	596	25 governmental agency or unit, or retirement payments to
597	597	26 retired partners, which payments are excluded in
598	598
599	599
600	600
601	601
602	602
603	603	SB3489 - 16 - LRB103 35047 HLH 64992 b
604	604
605	605
606	606	SB3489- 17 -LRB103 35047 HLH 64992 b SB3489 - 17 - LRB103 35047 HLH 64992 b
607	607	SB3489 - 17 - LRB103 35047 HLH 64992 b
608	608	1 computing net earnings from self employment by Section
609	609	2 1402 of the Internal Revenue Code and regulations
610	610	3 adopted pursuant thereto;
611	611	4 (G) The valuation limitation amount;
612	612	5 (H) An amount equal to the amount of any tax
613	613	6 imposed by this Act which was refunded to the taxpayer
614	614	7 and included in such total for the taxable year;
615	615	8 (I) An amount equal to all amounts included in
616	616	9 such total pursuant to the provisions of Section 111
617	617	10 of the Internal Revenue Code as a recovery of items
618	618	11 previously deducted from adjusted gross income in the
619	619	12 computation of taxable income;
620	620	13 (J) An amount equal to those dividends included in
621	621	14 such total which were paid by a corporation which
622	622	15 conducts business operations in a River Edge
623	623	16 Redevelopment Zone or zones created under the River
624	624	17 Edge Redevelopment Zone Act, and conducts
625	625	18 substantially all of its operations in a River Edge
626	626	19 Redevelopment Zone or zones. This subparagraph (J) is
627	627	20 exempt from the provisions of Section 250;
628	628	21 (K) An amount equal to those dividends included in
629	629	22 such total that were paid by a corporation that
630	630	23 conducts business operations in a federally designated
631	631	24 Foreign Trade Zone or Sub-Zone and that is designated
632	632	25 a High Impact Business located in Illinois; provided
633	633	26 that dividends eligible for the deduction provided in
634	634
635	635
636	636
637	637
638	638
639	639	SB3489 - 17 - LRB103 35047 HLH 64992 b
640	640
641	641
642	642	SB3489- 18 -LRB103 35047 HLH 64992 b SB3489 - 18 - LRB103 35047 HLH 64992 b
643	643	SB3489 - 18 - LRB103 35047 HLH 64992 b
644	644	1 subparagraph (J) of paragraph (2) of this subsection
645	645	2 shall not be eligible for the deduction provided under
646	646	3 this subparagraph (K);
647	647	4 (L) For taxable years ending after December 31,
648	648	5 1983, an amount equal to all social security benefits
649	649	6 and railroad retirement benefits included in such
650	650	7 total pursuant to Sections 72(r) and 86 of the
651	651	8 Internal Revenue Code;
652	652	9 (M) With the exception of any amounts subtracted
653	653	10 under subparagraph (N), an amount equal to the sum of
654	654	11 all amounts disallowed as deductions by (i) Sections
655	655	12 171(a)(2) and 265(a)(2) of the Internal Revenue Code,
656	656	13 and all amounts of expenses allocable to interest and
657	657	14 disallowed as deductions by Section 265(a)(1) of the
658	658	15 Internal Revenue Code; and (ii) for taxable years
659	659	16 ending on or after August 13, 1999, Sections
660	660	17 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
661	661	18 Internal Revenue Code, plus, for taxable years ending
662	662	19 on or after December 31, 2011, Section 45G(e)(3) of
663	663	20 the Internal Revenue Code and, for taxable years
664	664	21 ending on or after December 31, 2008, any amount
665	665	22 included in gross income under Section 87 of the
666	666	23 Internal Revenue Code; the provisions of this
667	667	24 subparagraph are exempt from the provisions of Section
668	668	25 250;
669	669	26 (N) An amount equal to all amounts included in
670	670
671	671
672	672
673	673
674	674
675	675	SB3489 - 18 - LRB103 35047 HLH 64992 b
676	676
677	677
678	678	SB3489- 19 -LRB103 35047 HLH 64992 b SB3489 - 19 - LRB103 35047 HLH 64992 b
679	679	SB3489 - 19 - LRB103 35047 HLH 64992 b
680	680	1 such total which are exempt from taxation by this
681	681	2 State either by reason of its statutes or Constitution
682	682	3 or by reason of the Constitution, treaties or statutes
683	683	4 of the United States; provided that, in the case of any
684	684	5 statute of this State that exempts income derived from
685	685	6 bonds or other obligations from the tax imposed under
686	686	7 this Act, the amount exempted shall be the interest
687	687	8 net of bond premium amortization;
688	688	9 (O) An amount equal to any contribution made to a
689	689	10 job training project established pursuant to the Tax
690	690	11 Increment Allocation Redevelopment Act;
691	691	12 (P) An amount equal to the amount of the deduction
692	692	13 used to compute the federal income tax credit for
693	693	14 restoration of substantial amounts held under claim of
694	694	15 right for the taxable year pursuant to Section 1341 of
695	695	16 the Internal Revenue Code or of any itemized deduction
696	696	17 taken from adjusted gross income in the computation of
697	697	18 taxable income for restoration of substantial amounts
698	698	19 held under claim of right for the taxable year;
699	699	20 (Q) An amount equal to any amounts included in
700	700	21 such total, received by the taxpayer as an
701	701	22 acceleration in the payment of life, endowment or
702	702	23 annuity benefits in advance of the time they would
703	703	24 otherwise be payable as an indemnity for a terminal
704	704	25 illness;
705	705	26 (R) An amount equal to the amount of any federal or
706	706
707	707
708	708
709	709
710	710
711	711	SB3489 - 19 - LRB103 35047 HLH 64992 b
712	712
713	713
714	714	SB3489- 20 -LRB103 35047 HLH 64992 b SB3489 - 20 - LRB103 35047 HLH 64992 b
715	715	SB3489 - 20 - LRB103 35047 HLH 64992 b
716	716	1 State bonus paid to veterans of the Persian Gulf War;
717	717	2 (S) An amount, to the extent included in adjusted
718	718	3 gross income, equal to the amount of a contribution
719	719	4 made in the taxable year on behalf of the taxpayer to a
720	720	5 medical care savings account established under the
721	721	6 Medical Care Savings Account Act or the Medical Care
722	722	7 Savings Account Act of 2000 to the extent the
723	723	8 contribution is accepted by the account administrator
724	724	9 as provided in that Act;
725	725	10 (T) An amount, to the extent included in adjusted
726	726	11 gross income, equal to the amount of interest earned
727	727	12 in the taxable year on a medical care savings account
728	728	13 established under the Medical Care Savings Account Act
729	729	14 or the Medical Care Savings Account Act of 2000 on
730	730	15 behalf of the taxpayer, other than interest added
731	731	16 pursuant to item (D-5) of this paragraph (2);
732	732	17 (U) For one taxable year beginning on or after
733	733	18 January 1, 1994, an amount equal to the total amount of
734	734	19 tax imposed and paid under subsections (a) and (b) of
735	735	20 Section 201 of this Act on grant amounts received by
736	736	21 the taxpayer under the Nursing Home Grant Assistance
737	737	22 Act during the taxpayer's taxable years 1992 and 1993;
738	738	23 (V) Beginning with tax years ending on or after
739	739	24 December 31, 1995 and ending with tax years ending on
740	740	25 or before December 31, 2004, an amount equal to the
741	741	26 amount paid by a taxpayer who is a self-employed
742	742
743	743
744	744
745	745
746	746
747	747	SB3489 - 20 - LRB103 35047 HLH 64992 b
748	748
749	749
750	750	SB3489- 21 -LRB103 35047 HLH 64992 b SB3489 - 21 - LRB103 35047 HLH 64992 b
751	751	SB3489 - 21 - LRB103 35047 HLH 64992 b
752	752	1 taxpayer, a partner of a partnership, or a shareholder
753	753	2 in a Subchapter S corporation for health insurance or
754	754	3 long-term care insurance for that taxpayer or that
755	755	4 taxpayer's spouse or dependents, to the extent that
756	756	5 the amount paid for that health insurance or long-term
757	757	6 care insurance may be deducted under Section 213 of
758	758	7 the Internal Revenue Code, has not been deducted on
759	759	8 the federal income tax return of the taxpayer, and
760	760	9 does not exceed the taxable income attributable to
761	761	10 that taxpayer's income, self-employment income, or
762	762	11 Subchapter S corporation income; except that no
763	763	12 deduction shall be allowed under this item (V) if the
764	764	13 taxpayer is eligible to participate in any health
765	765	14 insurance or long-term care insurance plan of an
766	766	15 employer of the taxpayer or the taxpayer's spouse. The
767	767	16 amount of the health insurance and long-term care
768	768	17 insurance subtracted under this item (V) shall be
769	769	18 determined by multiplying total health insurance and
770	770	19 long-term care insurance premiums paid by the taxpayer
771	771	20 times a number that represents the fractional
772	772	21 percentage of eligible medical expenses under Section
773	773	22 213 of the Internal Revenue Code of 1986 not actually
774	774	23 deducted on the taxpayer's federal income tax return;
775	775	24 (W) For taxable years beginning on or after
776	776	25 January 1, 1998, all amounts included in the
777	777	26 taxpayer's federal gross income in the taxable year
778	778
779	779
780	780
781	781
782	782
783	783	SB3489 - 21 - LRB103 35047 HLH 64992 b
784	784
785	785
786	786	SB3489- 22 -LRB103 35047 HLH 64992 b SB3489 - 22 - LRB103 35047 HLH 64992 b
787	787	SB3489 - 22 - LRB103 35047 HLH 64992 b
788	788	1 from amounts converted from a regular IRA to a Roth
789	789	2 IRA. This paragraph is exempt from the provisions of
790	790	3 Section 250;
791	791	4 (X) For taxable year 1999 and thereafter, an
792	792	5 amount equal to the amount of any (i) distributions,
793	793	6 to the extent includible in gross income for federal
794	794	7 income tax purposes, made to the taxpayer because of
795	795	8 his or her status as a victim of persecution for racial
796	796	9 or religious reasons by Nazi Germany or any other Axis
797	797	10 regime or as an heir of the victim and (ii) items of
798	798	11 income, to the extent includible in gross income for
799	799	12 federal income tax purposes, attributable to, derived
800	800	13 from or in any way related to assets stolen from,
801	801	14 hidden from, or otherwise lost to a victim of
802	802	15 persecution for racial or religious reasons by Nazi
803	803	16 Germany or any other Axis regime immediately prior to,
804	804	17 during, and immediately after World War II, including,
805	805	18 but not limited to, interest on the proceeds
806	806	19 receivable as insurance under policies issued to a
807	807	20 victim of persecution for racial or religious reasons
808	808	21 by Nazi Germany or any other Axis regime by European
809	809	22 insurance companies immediately prior to and during
810	810	23 World War II; provided, however, this subtraction from
811	811	24 federal adjusted gross income does not apply to assets
812	812	25 acquired with such assets or with the proceeds from
813	813	26 the sale of such assets; provided, further, this
814	814
815	815
816	816
817	817
818	818
819	819	SB3489 - 22 - LRB103 35047 HLH 64992 b
820	820
821	821
822	822	SB3489- 23 -LRB103 35047 HLH 64992 b SB3489 - 23 - LRB103 35047 HLH 64992 b
823	823	SB3489 - 23 - LRB103 35047 HLH 64992 b
824	824	1 paragraph shall only apply to a taxpayer who was the
825	825	2 first recipient of such assets after their recovery
826	826	3 and who is a victim of persecution for racial or
827	827	4 religious reasons by Nazi Germany or any other Axis
828	828	5 regime or as an heir of the victim. The amount of and
829	829	6 the eligibility for any public assistance, benefit, or
830	830	7 similar entitlement is not affected by the inclusion
831	831	8 of items (i) and (ii) of this paragraph in gross income
832	832	9 for federal income tax purposes. This paragraph is
833	833	10 exempt from the provisions of Section 250;
834	834	11 (Y) For taxable years beginning on or after
835	835	12 January 1, 2002 and ending on or before December 31,
836	836	13 2004, moneys contributed in the taxable year to a
837	837	14 College Savings Pool account under Section 16.5 of the
838	838	15 State Treasurer Act, except that amounts excluded from
839	839	16 gross income under Section 529(c)(3)(C)(i) of the
840	840	17 Internal Revenue Code shall not be considered moneys
841	841	18 contributed under this subparagraph (Y). For taxable
842	842	19 years beginning on or after January 1, 2005, a maximum
843	843	20 of $10,000 contributed in the taxable year to (i) a
844	844	21 College Savings Pool account under Section 16.5 of the
845	845	22 State Treasurer Act or (ii) the Illinois Prepaid
846	846	23 Tuition Trust Fund, except that amounts excluded from
847	847	24 gross income under Section 529(c)(3)(C)(i) of the
848	848	25 Internal Revenue Code shall not be considered moneys
849	849	26 contributed under this subparagraph (Y). For purposes
850	850
851	851
852	852
853	853
854	854
855	855	SB3489 - 23 - LRB103 35047 HLH 64992 b
856	856
857	857
858	858	SB3489- 24 -LRB103 35047 HLH 64992 b SB3489 - 24 - LRB103 35047 HLH 64992 b
859	859	SB3489 - 24 - LRB103 35047 HLH 64992 b
860	860	1 of this subparagraph, contributions made by an
861	861	2 employer on behalf of an employee, or matching
862	862	3 contributions made by an employee, shall be treated as
863	863	4 made by the employee. This subparagraph (Y) is exempt
864	864	5 from the provisions of Section 250;
865	865	6 (Z) For taxable years 2001 and thereafter, for the
866	866	7 taxable year in which the bonus depreciation deduction
867	867	8 is taken on the taxpayer's federal income tax return
868	868	9 under subsection (k) of Section 168 of the Internal
869	869	10 Revenue Code and for each applicable taxable year
870	870	11 thereafter, an amount equal to "x", where:
871	871	12 (1) "y" equals the amount of the depreciation
872	872	13 deduction taken for the taxable year on the
873	873	14 taxpayer's federal income tax return on property
874	874	15 for which the bonus depreciation deduction was
875	875	16 taken in any year under subsection (k) of Section
876	876	17 168 of the Internal Revenue Code, but not
877	877	18 including the bonus depreciation deduction;
878	878	19 (2) for taxable years ending on or before
879	879	20 December 31, 2005, "x" equals "y" multiplied by 30
880	880	21 and then divided by 70 (or "y" multiplied by
881	881	22 0.429); and
882	882	23 (3) for taxable years ending after December
883	883	24 31, 2005:
884	884	25 (i) for property on which a bonus
885	885	26 depreciation deduction of 30% of the adjusted
886	886
887	887
888	888
889	889
890	890
891	891	SB3489 - 24 - LRB103 35047 HLH 64992 b
892	892
893	893
894	894	SB3489- 25 -LRB103 35047 HLH 64992 b SB3489 - 25 - LRB103 35047 HLH 64992 b
895	895	SB3489 - 25 - LRB103 35047 HLH 64992 b
896	896	1 basis was taken, "x" equals "y" multiplied by
897	897	2 30 and then divided by 70 (or "y" multiplied
898	898	3 by 0.429);
899	899	4 (ii) for property on which a bonus
900	900	5 depreciation deduction of 50% of the adjusted
901	901	6 basis was taken, "x" equals "y" multiplied by
902	902	7 1.0;
903	903	8 (iii) for property on which a bonus
904	904	9 depreciation deduction of 100% of the adjusted
905	905	10 basis was taken in a taxable year ending on or
906	906	11 after December 31, 2021, "x" equals the
907	907	12 depreciation deduction that would be allowed
908	908	13 on that property if the taxpayer had made the
909	909	14 election under Section 168(k)(7) of the
910	910	15 Internal Revenue Code to not claim bonus
911	911	16 depreciation on that property; and
912	912	17 (iv) for property on which a bonus
913	913	18 depreciation deduction of a percentage other
914	914	19 than 30%, 50% or 100% of the adjusted basis
915	915	20 was taken in a taxable year ending on or after
916	916	21 December 31, 2021, "x" equals "y" multiplied
917	917	22 by 100 times the percentage bonus depreciation
918	918	23 on the property (that is, 100(bonus%)) and
919	919	24 then divided by 100 times 1 minus the
920	920	25 percentage bonus depreciation on the property
921	921	26 (that is, 100(1bonus%)).
922	922
923	923
924	924
925	925
926	926
927	927	SB3489 - 25 - LRB103 35047 HLH 64992 b
928	928
929	929
930	930	SB3489- 26 -LRB103 35047 HLH 64992 b SB3489 - 26 - LRB103 35047 HLH 64992 b
931	931	SB3489 - 26 - LRB103 35047 HLH 64992 b
932	932	1 The aggregate amount deducted under this
933	933	2 subparagraph in all taxable years for any one piece of
934	934	3 property may not exceed the amount of the bonus
935	935	4 depreciation deduction taken on that property on the
936	936	5 taxpayer's federal income tax return under subsection
937	937	6 (k) of Section 168 of the Internal Revenue Code. This
938	938	7 subparagraph (Z) is exempt from the provisions of
939	939	8 Section 250;
940	940	9 (AA) If the taxpayer sells, transfers, abandons,
941	941	10 or otherwise disposes of property for which the
942	942	11 taxpayer was required in any taxable year to make an
943	943	12 addition modification under subparagraph (D-15), then
944	944	13 an amount equal to that addition modification.
945	945	14 If the taxpayer continues to own property through
946	946	15 the last day of the last tax year for which a
947	947	16 subtraction is allowed with respect to that property
948	948	17 under subparagraph (Z) and for which the taxpayer was
949	949	18 required in any taxable year to make an addition
950	950	19 modification under subparagraph (D-15), then an amount
951	951	20 equal to that addition modification.
952	952	21 The taxpayer is allowed to take the deduction
953	953	22 under this subparagraph only once with respect to any
954	954	23 one piece of property.
955	955	24 This subparagraph (AA) is exempt from the
956	956	25 provisions of Section 250;
957	957	26 (BB) Any amount included in adjusted gross income,
958	958
959	959
960	960
961	961
962	962
963	963	SB3489 - 26 - LRB103 35047 HLH 64992 b
964	964
965	965
966	966	SB3489- 27 -LRB103 35047 HLH 64992 b SB3489 - 27 - LRB103 35047 HLH 64992 b
967	967	SB3489 - 27 - LRB103 35047 HLH 64992 b
968	968	1 other than salary, received by a driver in a
969	969	2 ridesharing arrangement using a motor vehicle;
970	970	3 (CC) The amount of (i) any interest income (net of
971	971	4 the deductions allocable thereto) taken into account
972	972	5 for the taxable year with respect to a transaction
973	973	6 with a taxpayer that is required to make an addition
974	974	7 modification with respect to such transaction under
975	975	8 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
976	976	9 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
977	977	10 the amount of that addition modification, and (ii) any
978	978	11 income from intangible property (net of the deductions
979	979	12 allocable thereto) taken into account for the taxable
980	980	13 year with respect to a transaction with a taxpayer
981	981	14 that is required to make an addition modification with
982	982	15 respect to such transaction under Section
983	983	16 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
984	984	17 203(d)(2)(D-8), but not to exceed the amount of that
985	985	18 addition modification. This subparagraph (CC) is
986	986	19 exempt from the provisions of Section 250;
987	987	20 (DD) An amount equal to the interest income taken
988	988	21 into account for the taxable year (net of the
989	989	22 deductions allocable thereto) with respect to
990	990	23 transactions with (i) a foreign person who would be a
991	991	24 member of the taxpayer's unitary business group but
992	992	25 for the fact that the foreign person's business
993	993	26 activity outside the United States is 80% or more of
994	994
995	995
996	996
997	997
998	998
999	999	SB3489 - 27 - LRB103 35047 HLH 64992 b
1000	1000
1001	1001
1002	1002	SB3489- 28 -LRB103 35047 HLH 64992 b SB3489 - 28 - LRB103 35047 HLH 64992 b
1003	1003	SB3489 - 28 - LRB103 35047 HLH 64992 b
1004	1004	1 that person's total business activity and (ii) for
1005	1005	2 taxable years ending on or after December 31, 2008, to
1006	1006	3 a person who would be a member of the same unitary
1007	1007	4 business group but for the fact that the person is
1008	1008	5 prohibited under Section 1501(a)(27) from being
1009	1009	6 included in the unitary business group because he or
1010	1010	7 she is ordinarily required to apportion business
1011	1011	8 income under different subsections of Section 304, but
1012	1012	9 not to exceed the addition modification required to be
1013	1013	10 made for the same taxable year under Section
1014	1014	11 203(a)(2)(D-17) for interest paid, accrued, or
1015	1015	12 incurred, directly or indirectly, to the same person.
1016	1016	13 This subparagraph (DD) is exempt from the provisions
1017	1017	14 of Section 250;
1018	1018	15 (EE) An amount equal to the income from intangible
1019	1019	16 property taken into account for the taxable year (net
1020	1020	17 of the deductions allocable thereto) with respect to
1021	1021	18 transactions with (i) a foreign person who would be a
1022	1022	19 member of the taxpayer's unitary business group but
1023	1023	20 for the fact that the foreign person's business
1024	1024	21 activity outside the United States is 80% or more of
1025	1025	22 that person's total business activity and (ii) for
1026	1026	23 taxable years ending on or after December 31, 2008, to
1027	1027	24 a person who would be a member of the same unitary
1028	1028	25 business group but for the fact that the person is
1029	1029	26 prohibited under Section 1501(a)(27) from being
1030	1030
1031	1031
1032	1032
1033	1033
1034	1034
1035	1035	SB3489 - 28 - LRB103 35047 HLH 64992 b
1036	1036
1037	1037
1038	1038	SB3489- 29 -LRB103 35047 HLH 64992 b SB3489 - 29 - LRB103 35047 HLH 64992 b
1039	1039	SB3489 - 29 - LRB103 35047 HLH 64992 b
1040	1040	1 included in the unitary business group because he or
1041	1041	2 she is ordinarily required to apportion business
1042	1042	3 income under different subsections of Section 304, but
1043	1043	4 not to exceed the addition modification required to be
1044	1044	5 made for the same taxable year under Section
1045	1045	6 203(a)(2)(D-18) for intangible expenses and costs
1046	1046	7 paid, accrued, or incurred, directly or indirectly, to
1047	1047	8 the same foreign person. This subparagraph (EE) is
1048	1048	9 exempt from the provisions of Section 250;
1049	1049	10 (FF) An amount equal to any amount awarded to the
1050	1050	11 taxpayer during the taxable year by the Court of
1051	1051	12 Claims under subsection (c) of Section 8 of the Court
1052	1052	13 of Claims Act for time unjustly served in a State
1053	1053	14 prison. This subparagraph (FF) is exempt from the
1054	1054	15 provisions of Section 250;
1055	1055	16 (GG) For taxable years ending on or after December
1056	1056	17 31, 2011, in the case of a taxpayer who was required to
1057	1057	18 add back any insurance premiums under Section
1058	1058	19 203(a)(2)(D-19), such taxpayer may elect to subtract
1059	1059	20 that part of a reimbursement received from the
1060	1060	21 insurance company equal to the amount of the expense
1061	1061	22 or loss (including expenses incurred by the insurance
1062	1062	23 company) that would have been taken into account as a
1063	1063	24 deduction for federal income tax purposes if the
1064	1064	25 expense or loss had been uninsured. If a taxpayer
1065	1065	26 makes the election provided for by this subparagraph
1066	1066
1067	1067
1068	1068
1069	1069
1070	1070
1071	1071	SB3489 - 29 - LRB103 35047 HLH 64992 b
1072	1072
1073	1073
1074	1074	SB3489- 30 -LRB103 35047 HLH 64992 b SB3489 - 30 - LRB103 35047 HLH 64992 b
1075	1075	SB3489 - 30 - LRB103 35047 HLH 64992 b
1076	1076	1 (GG), the insurer to which the premiums were paid must
1077	1077	2 add back to income the amount subtracted by the
1078	1078	3 taxpayer pursuant to this subparagraph (GG). This
1079	1079	4 subparagraph (GG) is exempt from the provisions of
1080	1080	5 Section 250;
1081	1081	6 (HH) For taxable years beginning on or after
1082	1082	7 January 1, 2018 and prior to January 1, 2028, a maximum
1083	1083	8 of $10,000 contributed in the taxable year to a
1084	1084	9 qualified ABLE account under Section 16.6 of the State
1085	1085	10 Treasurer Act, except that amounts excluded from gross
1086	1086	11 income under Section 529(c)(3)(C)(i) or Section
1087	1087	12 529A(c)(1)(C) of the Internal Revenue Code shall not
1088	1088	13 be considered moneys contributed under this
1089	1089	14 subparagraph (HH). For purposes of this subparagraph
1090	1090	15 (HH), contributions made by an employer on behalf of
1091	1091	16 an employee, or matching contributions made by an
1092	1092	17 employee, shall be treated as made by the employee;
1093	1093	18 and
1094	1094	19 (II) For taxable years that begin on or after
1095	1095	20 January 1, 2021 and begin before January 1, 2026, the
1096	1096	21 amount that is included in the taxpayer's federal
1097	1097	22 adjusted gross income pursuant to Section 61 of the
1098	1098	23 Internal Revenue Code as discharge of indebtedness
1099	1099	24 attributable to student loan forgiveness and that is
1100	1100	25 not excluded from the taxpayer's federal adjusted
1101	1101	26 gross income pursuant to paragraph (5) of subsection
1102	1102
1103	1103
1104	1104
1105	1105
1106	1106
1107	1107	SB3489 - 30 - LRB103 35047 HLH 64992 b
1108	1108
1109	1109
1110	1110	SB3489- 31 -LRB103 35047 HLH 64992 b SB3489 - 31 - LRB103 35047 HLH 64992 b
1111	1111	SB3489 - 31 - LRB103 35047 HLH 64992 b
1112	1112	1 (f) of Section 108 of the Internal Revenue Code; and .
1113	1113	2 (JJ) For taxable years beginning on or after
1114	1114	3 January 1, 2024, the amount that was paid during the
1115	1115	4 taxable year in taxes described in paragraphs (1),
1116	1116	5 (2), and (3) of subsection (a) of Section 164 of the
1117	1117	6 federal Internal Revenue Code and paragraph (5) of
1118	1118	7 subsection (b) of Section 164 of the federal Internal
1119	1119	8 Revenue Code that was disallowed as a deduction on the
1120	1120	9 taxpayer's federal income tax return for the taxable
1121	1121	10 year as a result of the limitation set forth under
1122	1122	11 subparagraph (B) of paragraph (6) of subsection (b) of
1123	1123	12 Section 164 of the federal Internal Revenue Code. This
1124	1124	13 subparagraph (JJ) is exempt from the provisions of
1125	1125	14 Section 250.
1126	1126	15 (b) Corporations.
1127	1127	16 (1) In general. In the case of a corporation, base
1128	1128	17 income means an amount equal to the taxpayer's taxable
1129	1129	18 income for the taxable year as modified by paragraph (2).
1130	1130	19 (2) Modifications. The taxable income referred to in
1131	1131	20 paragraph (1) shall be modified by adding thereto the sum
1132	1132	21 of the following amounts:
1133	1133	22 (A) An amount equal to all amounts paid or accrued
1134	1134	23 to the taxpayer as interest and all distributions
1135	1135	24 received from regulated investment companies during
1136	1136	25 the taxable year to the extent excluded from gross
1137	1137
1138	1138
1139	1139
1140	1140
1141	1141
1142	1142	SB3489 - 31 - LRB103 35047 HLH 64992 b
1143	1143
1144	1144
1145	1145	SB3489- 32 -LRB103 35047 HLH 64992 b SB3489 - 32 - LRB103 35047 HLH 64992 b
1146	1146	SB3489 - 32 - LRB103 35047 HLH 64992 b
1147	1147	1 income in the computation of taxable income;
1148	1148	2 (B) An amount equal to the amount of tax imposed by
1149	1149	3 this Act to the extent deducted from gross income in
1150	1150	4 the computation of taxable income for the taxable
1151	1151	5 year;
1152	1152	6 (C) In the case of a regulated investment company,
1153	1153	7 an amount equal to the excess of (i) the net long-term
1154	1154	8 capital gain for the taxable year, over (ii) the
1155	1155	9 amount of the capital gain dividends designated as
1156	1156	10 such in accordance with Section 852(b)(3)(C) of the
1157	1157	11 Internal Revenue Code and any amount designated under
1158	1158	12 Section 852(b)(3)(D) of the Internal Revenue Code,
1159	1159	13 attributable to the taxable year (this amendatory Act
1160	1160	14 of 1995 (Public Act 89-89) is declarative of existing
1161	1161	15 law and is not a new enactment);
1162	1162	16 (D) The amount of any net operating loss deduction
1163	1163	17 taken in arriving at taxable income, other than a net
1164	1164	18 operating loss carried forward from a taxable year
1165	1165	19 ending prior to December 31, 1986;
1166	1166	20 (E) For taxable years in which a net operating
1167	1167	21 loss carryback or carryforward from a taxable year
1168	1168	22 ending prior to December 31, 1986 is an element of
1169	1169	23 taxable income under paragraph (1) of subsection (e)
1170	1170	24 or subparagraph (E) of paragraph (2) of subsection
1171	1171	25 (e), the amount by which addition modifications other
1172	1172	26 than those provided by this subparagraph (E) exceeded
1173	1173
1174	1174
1175	1175
1176	1176
1177	1177
1178	1178	SB3489 - 32 - LRB103 35047 HLH 64992 b
1179	1179
1180	1180
1181	1181	SB3489- 33 -LRB103 35047 HLH 64992 b SB3489 - 33 - LRB103 35047 HLH 64992 b
1182	1182	SB3489 - 33 - LRB103 35047 HLH 64992 b
1183	1183	1 subtraction modifications in such earlier taxable
1184	1184	2 year, with the following limitations applied in the
1185	1185	3 order that they are listed:
1186	1186	4 (i) the addition modification relating to the
1187	1187	5 net operating loss carried back or forward to the
1188	1188	6 taxable year from any taxable year ending prior to
1189	1189	7 December 31, 1986 shall be reduced by the amount
1190	1190	8 of addition modification under this subparagraph
1191	1191	9 (E) which related to that net operating loss and
1192	1192	10 which was taken into account in calculating the
1193	1193	11 base income of an earlier taxable year, and
1194	1194	12 (ii) the addition modification relating to the
1195	1195	13 net operating loss carried back or forward to the
1196	1196	14 taxable year from any taxable year ending prior to
1197	1197	15 December 31, 1986 shall not exceed the amount of
1198	1198	16 such carryback or carryforward;
1199	1199	17 For taxable years in which there is a net
1200	1200	18 operating loss carryback or carryforward from more
1201	1201	19 than one other taxable year ending prior to December
1202	1202	20 31, 1986, the addition modification provided in this
1203	1203	21 subparagraph (E) shall be the sum of the amounts
1204	1204	22 computed independently under the preceding provisions
1205	1205	23 of this subparagraph (E) for each such taxable year;
1206	1206	24 (E-5) For taxable years ending after December 31,
1207	1207	25 1997, an amount equal to any eligible remediation
1208	1208	26 costs that the corporation deducted in computing
1209	1209
1210	1210
1211	1211
1212	1212
1213	1213
1214	1214	SB3489 - 33 - LRB103 35047 HLH 64992 b
1215	1215
1216	1216
1217	1217	SB3489- 34 -LRB103 35047 HLH 64992 b SB3489 - 34 - LRB103 35047 HLH 64992 b
1218	1218	SB3489 - 34 - LRB103 35047 HLH 64992 b
1219	1219	1 adjusted gross income and for which the corporation
1220	1220	2 claims a credit under subsection (l) of Section 201;
1221	1221	3 (E-10) For taxable years 2001 and thereafter, an
1222	1222	4 amount equal to the bonus depreciation deduction taken
1223	1223	5 on the taxpayer's federal income tax return for the
1224	1224	6 taxable year under subsection (k) of Section 168 of
1225	1225	7 the Internal Revenue Code;
1226	1226	8 (E-11) If the taxpayer sells, transfers, abandons,
1227	1227	9 or otherwise disposes of property for which the
1228	1228	10 taxpayer was required in any taxable year to make an
1229	1229	11 addition modification under subparagraph (E-10), then
1230	1230	12 an amount equal to the aggregate amount of the
1231	1231	13 deductions taken in all taxable years under
1232	1232	14 subparagraph (T) with respect to that property.
1233	1233	15 If the taxpayer continues to own property through
1234	1234	16 the last day of the last tax year for which a
1235	1235	17 subtraction is allowed with respect to that property
1236	1236	18 under subparagraph (T) and for which the taxpayer was
1237	1237	19 allowed in any taxable year to make a subtraction
1238	1238	20 modification under subparagraph (T), then an amount
1239	1239	21 equal to that subtraction modification.
1240	1240	22 The taxpayer is required to make the addition
1241	1241	23 modification under this subparagraph only once with
1242	1242	24 respect to any one piece of property;
1243	1243	25 (E-12) An amount equal to the amount otherwise
1244	1244	26 allowed as a deduction in computing base income for
1245	1245
1246	1246
1247	1247
1248	1248
1249	1249
1250	1250	SB3489 - 34 - LRB103 35047 HLH 64992 b
1251	1251
1252	1252
1253	1253	SB3489- 35 -LRB103 35047 HLH 64992 b SB3489 - 35 - LRB103 35047 HLH 64992 b
1254	1254	SB3489 - 35 - LRB103 35047 HLH 64992 b
1255	1255	1 interest paid, accrued, or incurred, directly or
1256	1256	2 indirectly, (i) for taxable years ending on or after
1257	1257	3 December 31, 2004, to a foreign person who would be a
1258	1258	4 member of the same unitary business group but for the
1259	1259	5 fact the foreign person's business activity outside
1260	1260	6 the United States is 80% or more of the foreign
1261	1261	7 person's total business activity and (ii) for taxable
1262	1262	8 years ending on or after December 31, 2008, to a person
1263	1263	9 who would be a member of the same unitary business
1264	1264	10 group but for the fact that the person is prohibited
1265	1265	11 under Section 1501(a)(27) from being included in the
1266	1266	12 unitary business group because he or she is ordinarily
1267	1267	13 required to apportion business income under different
1268	1268	14 subsections of Section 304. The addition modification
1269	1269	15 required by this subparagraph shall be reduced to the
1270	1270	16 extent that dividends were included in base income of
1271	1271	17 the unitary group for the same taxable year and
1272	1272	18 received by the taxpayer or by a member of the
1273	1273	19 taxpayer's unitary business group (including amounts
1274	1274	20 included in gross income pursuant to Sections 951
1275	1275	21 through 964 of the Internal Revenue Code and amounts
1276	1276	22 included in gross income under Section 78 of the
1277	1277	23 Internal Revenue Code) with respect to the stock of
1278	1278	24 the same person to whom the interest was paid,
1279	1279	25 accrued, or incurred.
1280	1280	26 This paragraph shall not apply to the following:
1281	1281
1282	1282
1283	1283
1284	1284
1285	1285
1286	1286	SB3489 - 35 - LRB103 35047 HLH 64992 b
1287	1287
1288	1288
1289	1289	SB3489- 36 -LRB103 35047 HLH 64992 b SB3489 - 36 - LRB103 35047 HLH 64992 b
1290	1290	SB3489 - 36 - LRB103 35047 HLH 64992 b
1291	1291	1 (i) an item of interest paid, accrued, or
1292	1292	2 incurred, directly or indirectly, to a person who
1293	1293	3 is subject in a foreign country or state, other
1294	1294	4 than a state which requires mandatory unitary
1295	1295	5 reporting, to a tax on or measured by net income
1296	1296	6 with respect to such interest; or
1297	1297	7 (ii) an item of interest paid, accrued, or
1298	1298	8 incurred, directly or indirectly, to a person if
1299	1299	9 the taxpayer can establish, based on a
1300	1300	10 preponderance of the evidence, both of the
1301	1301	11 following:
1302	1302	12 (a) the person, during the same taxable
1303	1303	13 year, paid, accrued, or incurred, the interest
1304	1304	14 to a person that is not a related member, and
1305	1305	15 (b) the transaction giving rise to the
1306	1306	16 interest expense between the taxpayer and the
1307	1307	17 person did not have as a principal purpose the
1308	1308	18 avoidance of Illinois income tax, and is paid
1309	1309	19 pursuant to a contract or agreement that
1310	1310	20 reflects an arm's-length interest rate and
1311	1311	21 terms; or
1312	1312	22 (iii) the taxpayer can establish, based on
1313	1313	23 clear and convincing evidence, that the interest
1314	1314	24 paid, accrued, or incurred relates to a contract
1315	1315	25 or agreement entered into at arm's-length rates
1316	1316	26 and terms and the principal purpose for the
1317	1317
1318	1318
1319	1319
1320	1320
1321	1321
1322	1322	SB3489 - 36 - LRB103 35047 HLH 64992 b
1323	1323
1324	1324
1325	1325	SB3489- 37 -LRB103 35047 HLH 64992 b SB3489 - 37 - LRB103 35047 HLH 64992 b
1326	1326	SB3489 - 37 - LRB103 35047 HLH 64992 b
1327	1327	1 payment is not federal or Illinois tax avoidance;
1328	1328	2 or
1329	1329	3 (iv) an item of interest paid, accrued, or
1330	1330	4 incurred, directly or indirectly, to a person if
1331	1331	5 the taxpayer establishes by clear and convincing
1332	1332	6 evidence that the adjustments are unreasonable; or
1333	1333	7 if the taxpayer and the Director agree in writing
1334	1334	8 to the application or use of an alternative method
1335	1335	9 of apportionment under Section 304(f).
1336	1336	10 Nothing in this subsection shall preclude the
1337	1337	11 Director from making any other adjustment
1338	1338	12 otherwise allowed under Section 404 of this Act
1339	1339	13 for any tax year beginning after the effective
1340	1340	14 date of this amendment provided such adjustment is
1341	1341	15 made pursuant to regulation adopted by the
1342	1342	16 Department and such regulations provide methods
1343	1343	17 and standards by which the Department will utilize
1344	1344	18 its authority under Section 404 of this Act;
1345	1345	19 (E-13) An amount equal to the amount of intangible
1346	1346	20 expenses and costs otherwise allowed as a deduction in
1347	1347	21 computing base income, and that were paid, accrued, or
1348	1348	22 incurred, directly or indirectly, (i) for taxable
1349	1349	23 years ending on or after December 31, 2004, to a
1350	1350	24 foreign person who would be a member of the same
1351	1351	25 unitary business group but for the fact that the
1352	1352	26 foreign person's business activity outside the United
1353	1353
1354	1354
1355	1355
1356	1356
1357	1357
1358	1358	SB3489 - 37 - LRB103 35047 HLH 64992 b
1359	1359
1360	1360
1361	1361	SB3489- 38 -LRB103 35047 HLH 64992 b SB3489 - 38 - LRB103 35047 HLH 64992 b
1362	1362	SB3489 - 38 - LRB103 35047 HLH 64992 b
1363	1363	1 States is 80% or more of that person's total business
1364	1364	2 activity and (ii) for taxable years ending on or after
1365	1365	3 December 31, 2008, to a person who would be a member of
1366	1366	4 the same unitary business group but for the fact that
1367	1367	5 the person is prohibited under Section 1501(a)(27)
1368	1368	6 from being included in the unitary business group
1369	1369	7 because he or she is ordinarily required to apportion
1370	1370	8 business income under different subsections of Section
1371	1371	9 304. The addition modification required by this
1372	1372	10 subparagraph shall be reduced to the extent that
1373	1373	11 dividends were included in base income of the unitary
1374	1374	12 group for the same taxable year and received by the
1375	1375	13 taxpayer or by a member of the taxpayer's unitary
1376	1376	14 business group (including amounts included in gross
1377	1377	15 income pursuant to Sections 951 through 964 of the
1378	1378	16 Internal Revenue Code and amounts included in gross
1379	1379	17 income under Section 78 of the Internal Revenue Code)
1380	1380	18 with respect to the stock of the same person to whom
1381	1381	19 the intangible expenses and costs were directly or
1382	1382	20 indirectly paid, incurred, or accrued. The preceding
1383	1383	21 sentence shall not apply to the extent that the same
1384	1384	22 dividends caused a reduction to the addition
1385	1385	23 modification required under Section 203(b)(2)(E-12) of
1386	1386	24 this Act. As used in this subparagraph, the term
1387	1387	25 "intangible expenses and costs" includes (1) expenses,
1388	1388	26 losses, and costs for, or related to, the direct or
1389	1389
1390	1390
1391	1391
1392	1392
1393	1393
1394	1394	SB3489 - 38 - LRB103 35047 HLH 64992 b
1395	1395
1396	1396
1397	1397	SB3489- 39 -LRB103 35047 HLH 64992 b SB3489 - 39 - LRB103 35047 HLH 64992 b
1398	1398	SB3489 - 39 - LRB103 35047 HLH 64992 b
1399	1399	1 indirect acquisition, use, maintenance or management,
1400	1400	2 ownership, sale, exchange, or any other disposition of
1401	1401	3 intangible property; (2) losses incurred, directly or
1402	1402	4 indirectly, from factoring transactions or discounting
1403	1403	5 transactions; (3) royalty, patent, technical, and
1404	1404	6 copyright fees; (4) licensing fees; and (5) other
1405	1405	7 similar expenses and costs. For purposes of this
1406	1406	8 subparagraph, "intangible property" includes patents,
1407	1407	9 patent applications, trade names, trademarks, service
1408	1408	10 marks, copyrights, mask works, trade secrets, and
1409	1409	11 similar types of intangible assets.
1410	1410	12 This paragraph shall not apply to the following:
1411	1411	13 (i) any item of intangible expenses or costs
1412	1412	14 paid, accrued, or incurred, directly or
1413	1413	15 indirectly, from a transaction with a person who
1414	1414	16 is subject in a foreign country or state, other
1415	1415	17 than a state which requires mandatory unitary
1416	1416	18 reporting, to a tax on or measured by net income
1417	1417	19 with respect to such item; or
1418	1418	20 (ii) any item of intangible expense or cost
1419	1419	21 paid, accrued, or incurred, directly or
1420	1420	22 indirectly, if the taxpayer can establish, based
1421	1421	23 on a preponderance of the evidence, both of the
1422	1422	24 following:
1423	1423	25 (a) the person during the same taxable
1424	1424	26 year paid, accrued, or incurred, the
1425	1425
1426	1426
1427	1427
1428	1428
1429	1429
1430	1430	SB3489 - 39 - LRB103 35047 HLH 64992 b
1431	1431
1432	1432
1433	1433	SB3489- 40 -LRB103 35047 HLH 64992 b SB3489 - 40 - LRB103 35047 HLH 64992 b
1434	1434	SB3489 - 40 - LRB103 35047 HLH 64992 b
1435	1435	1 intangible expense or cost to a person that is
1436	1436	2 not a related member, and
1437	1437	3 (b) the transaction giving rise to the
1438	1438	4 intangible expense or cost between the
1439	1439	5 taxpayer and the person did not have as a
1440	1440	6 principal purpose the avoidance of Illinois
1441	1441	7 income tax, and is paid pursuant to a contract
1442	1442	8 or agreement that reflects arm's-length terms;
1443	1443	9 or
1444	1444	10 (iii) any item of intangible expense or cost
1445	1445	11 paid, accrued, or incurred, directly or
1446	1446	12 indirectly, from a transaction with a person if
1447	1447	13 the taxpayer establishes by clear and convincing
1448	1448	14 evidence, that the adjustments are unreasonable;
1449	1449	15 or if the taxpayer and the Director agree in
1450	1450	16 writing to the application or use of an
1451	1451	17 alternative method of apportionment under Section
1452	1452	18 304(f);
1453	1453	19 Nothing in this subsection shall preclude the
1454	1454	20 Director from making any other adjustment
1455	1455	21 otherwise allowed under Section 404 of this Act
1456	1456	22 for any tax year beginning after the effective
1457	1457	23 date of this amendment provided such adjustment is
1458	1458	24 made pursuant to regulation adopted by the
1459	1459	25 Department and such regulations provide methods
1460	1460	26 and standards by which the Department will utilize
1461	1461
1462	1462
1463	1463
1464	1464
1465	1465
1466	1466	SB3489 - 40 - LRB103 35047 HLH 64992 b
1467	1467
1468	1468
1469	1469	SB3489- 41 -LRB103 35047 HLH 64992 b SB3489 - 41 - LRB103 35047 HLH 64992 b
1470	1470	SB3489 - 41 - LRB103 35047 HLH 64992 b
1471	1471	1 its authority under Section 404 of this Act;
1472	1472	2 (E-14) For taxable years ending on or after
1473	1473	3 December 31, 2008, an amount equal to the amount of
1474	1474	4 insurance premium expenses and costs otherwise allowed
1475	1475	5 as a deduction in computing base income, and that were
1476	1476	6 paid, accrued, or incurred, directly or indirectly, to
1477	1477	7 a person who would be a member of the same unitary
1478	1478	8 business group but for the fact that the person is
1479	1479	9 prohibited under Section 1501(a)(27) from being
1480	1480	10 included in the unitary business group because he or
1481	1481	11 she is ordinarily required to apportion business
1482	1482	12 income under different subsections of Section 304. The
1483	1483	13 addition modification required by this subparagraph
1484	1484	14 shall be reduced to the extent that dividends were
1485	1485	15 included in base income of the unitary group for the
1486	1486	16 same taxable year and received by the taxpayer or by a
1487	1487	17 member of the taxpayer's unitary business group
1488	1488	18 (including amounts included in gross income under
1489	1489	19 Sections 951 through 964 of the Internal Revenue Code
1490	1490	20 and amounts included in gross income under Section 78
1491	1491	21 of the Internal Revenue Code) with respect to the
1492	1492	22 stock of the same person to whom the premiums and costs
1493	1493	23 were directly or indirectly paid, incurred, or
1494	1494	24 accrued. The preceding sentence does not apply to the
1495	1495	25 extent that the same dividends caused a reduction to
1496	1496	26 the addition modification required under Section
1497	1497
1498	1498
1499	1499
1500	1500
1501	1501
1502	1502	SB3489 - 41 - LRB103 35047 HLH 64992 b
1503	1503
1504	1504
1505	1505	SB3489- 42 -LRB103 35047 HLH 64992 b SB3489 - 42 - LRB103 35047 HLH 64992 b
1506	1506	SB3489 - 42 - LRB103 35047 HLH 64992 b
1507	1507	1 203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this
1508	1508	2 Act;
1509	1509	3 (E-15) For taxable years beginning after December
1510	1510	4 31, 2008, any deduction for dividends paid by a
1511	1511	5 captive real estate investment trust that is allowed
1512	1512	6 to a real estate investment trust under Section
1513	1513	7 857(b)(2)(B) of the Internal Revenue Code for
1514	1514	8 dividends paid;
1515	1515	9 (E-16) An amount equal to the credit allowable to
1516	1516	10 the taxpayer under Section 218(a) of this Act,
1517	1517	11 determined without regard to Section 218(c) of this
1518	1518	12 Act;
1519	1519	13 (E-17) For taxable years ending on or after
1520	1520	14 December 31, 2017, an amount equal to the deduction
1521	1521	15 allowed under Section 199 of the Internal Revenue Code
1522	1522	16 for the taxable year;
1523	1523	17 (E-18) for taxable years beginning after December
1524	1524	18 31, 2018, an amount equal to the deduction allowed
1525	1525	19 under Section 250(a)(1)(A) of the Internal Revenue
1526	1526	20 Code for the taxable year;
1527	1527	21 (E-19) for taxable years ending on or after June
1528	1528	22 30, 2021, an amount equal to the deduction allowed
1529	1529	23 under Section 250(a)(1)(B)(i) of the Internal Revenue
1530	1530	24 Code for the taxable year;
1531	1531	25 (E-20) for taxable years ending on or after June
1532	1532	26 30, 2021, an amount equal to the deduction allowed
1533	1533
1534	1534
1535	1535
1536	1536
1537	1537
1538	1538	SB3489 - 42 - LRB103 35047 HLH 64992 b
1539	1539
1540	1540
1541	1541	SB3489- 43 -LRB103 35047 HLH 64992 b SB3489 - 43 - LRB103 35047 HLH 64992 b
1542	1542	SB3489 - 43 - LRB103 35047 HLH 64992 b
1543	1543	1 under Sections 243(e) and 245A(a) of the Internal
1544	1544	2 Revenue Code for the taxable year.
1545	1545	3 and by deducting from the total so obtained the sum of the
1546	1546	4 following amounts:
1547	1547	5 (F) An amount equal to the amount of any tax
1548	1548	6 imposed by this Act which was refunded to the taxpayer
1549	1549	7 and included in such total for the taxable year;
1550	1550	8 (G) An amount equal to any amount included in such
1551	1551	9 total under Section 78 of the Internal Revenue Code;
1552	1552	10 (H) In the case of a regulated investment company,
1553	1553	11 an amount equal to the amount of exempt interest
1554	1554	12 dividends as defined in subsection (b)(5) of Section
1555	1555	13 852 of the Internal Revenue Code, paid to shareholders
1556	1556	14 for the taxable year;
1557	1557	15 (I) With the exception of any amounts subtracted
1558	1558	16 under subparagraph (J), an amount equal to the sum of
1559	1559	17 all amounts disallowed as deductions by (i) Sections
1560	1560	18 171(a)(2) and 265(a)(2) and amounts disallowed as
1561	1561	19 interest expense by Section 291(a)(3) of the Internal
1562	1562	20 Revenue Code, and all amounts of expenses allocable to
1563	1563	21 interest and disallowed as deductions by Section
1564	1564	22 265(a)(1) of the Internal Revenue Code; and (ii) for
1565	1565	23 taxable years ending on or after August 13, 1999,
1566	1566	24 Sections 171(a)(2), 265, 280C, 291(a)(3), and
1567	1567	25 832(b)(5)(B)(i) of the Internal Revenue Code, plus,
1568	1568	26 for tax years ending on or after December 31, 2011,
1569	1569
1570	1570
1571	1571
1572	1572
1573	1573
1574	1574	SB3489 - 43 - LRB103 35047 HLH 64992 b
1575	1575
1576	1576
1577	1577	SB3489- 44 -LRB103 35047 HLH 64992 b SB3489 - 44 - LRB103 35047 HLH 64992 b
1578	1578	SB3489 - 44 - LRB103 35047 HLH 64992 b
1579	1579	1 amounts disallowed as deductions by Section 45G(e)(3)
1580	1580	2 of the Internal Revenue Code and, for taxable years
1581	1581	3 ending on or after December 31, 2008, any amount
1582	1582	4 included in gross income under Section 87 of the
1583	1583	5 Internal Revenue Code and the policyholders' share of
1584	1584	6 tax-exempt interest of a life insurance company under
1585	1585	7 Section 807(a)(2)(B) of the Internal Revenue Code (in
1586	1586	8 the case of a life insurance company with gross income
1587	1587	9 from a decrease in reserves for the tax year) or
1588	1588	10 Section 807(b)(1)(B) of the Internal Revenue Code (in
1589	1589	11 the case of a life insurance company allowed a
1590	1590	12 deduction for an increase in reserves for the tax
1591	1591	13 year); the provisions of this subparagraph are exempt
1592	1592	14 from the provisions of Section 250;
1593	1593	15 (J) An amount equal to all amounts included in
1594	1594	16 such total which are exempt from taxation by this
1595	1595	17 State either by reason of its statutes or Constitution
1596	1596	18 or by reason of the Constitution, treaties or statutes
1597	1597	19 of the United States; provided that, in the case of any
1598	1598	20 statute of this State that exempts income derived from
1599	1599	21 bonds or other obligations from the tax imposed under
1600	1600	22 this Act, the amount exempted shall be the interest
1601	1601	23 net of bond premium amortization;
1602	1602	24 (K) An amount equal to those dividends included in
1603	1603	25 such total which were paid by a corporation which
1604	1604	26 conducts business operations in a River Edge
1605	1605
1606	1606
1607	1607
1608	1608
1609	1609
1610	1610	SB3489 - 44 - LRB103 35047 HLH 64992 b
1611	1611
1612	1612
1613	1613	SB3489- 45 -LRB103 35047 HLH 64992 b SB3489 - 45 - LRB103 35047 HLH 64992 b
1614	1614	SB3489 - 45 - LRB103 35047 HLH 64992 b
1615	1615	1 Redevelopment Zone or zones created under the River
1616	1616	2 Edge Redevelopment Zone Act and conducts substantially
1617	1617	3 all of its operations in a River Edge Redevelopment
1618	1618	4 Zone or zones. This subparagraph (K) is exempt from
1619	1619	5 the provisions of Section 250;
1620	1620	6 (L) An amount equal to those dividends included in
1621	1621	7 such total that were paid by a corporation that
1622	1622	8 conducts business operations in a federally designated
1623	1623	9 Foreign Trade Zone or Sub-Zone and that is designated
1624	1624	10 a High Impact Business located in Illinois; provided
1625	1625	11 that dividends eligible for the deduction provided in
1626	1626	12 subparagraph (K) of paragraph 2 of this subsection
1627	1627	13 shall not be eligible for the deduction provided under
1628	1628	14 this subparagraph (L);
1629	1629	15 (M) For any taxpayer that is a financial
1630	1630	16 organization within the meaning of Section 304(c) of
1631	1631	17 this Act, an amount included in such total as interest
1632	1632	18 income from a loan or loans made by such taxpayer to a
1633	1633	19 borrower, to the extent that such a loan is secured by
1634	1634	20 property which is eligible for the River Edge
1635	1635	21 Redevelopment Zone Investment Credit. To determine the
1636	1636	22 portion of a loan or loans that is secured by property
1637	1637	23 eligible for a Section 201(f) investment credit to the
1638	1638	24 borrower, the entire principal amount of the loan or
1639	1639	25 loans between the taxpayer and the borrower should be
1640	1640	26 divided into the basis of the Section 201(f)
1641	1641
1642	1642
1643	1643
1644	1644
1645	1645
1646	1646	SB3489 - 45 - LRB103 35047 HLH 64992 b
1647	1647
1648	1648
1649	1649	SB3489- 46 -LRB103 35047 HLH 64992 b SB3489 - 46 - LRB103 35047 HLH 64992 b
1650	1650	SB3489 - 46 - LRB103 35047 HLH 64992 b
1651	1651	1 investment credit property which secures the loan or
1652	1652	2 loans, using for this purpose the original basis of
1653	1653	3 such property on the date that it was placed in service
1654	1654	4 in the River Edge Redevelopment Zone. The subtraction
1655	1655	5 modification available to the taxpayer in any year
1656	1656	6 under this subsection shall be that portion of the
1657	1657	7 total interest paid by the borrower with respect to
1658	1658	8 such loan attributable to the eligible property as
1659	1659	9 calculated under the previous sentence. This
1660	1660	10 subparagraph (M) is exempt from the provisions of
1661	1661	11 Section 250;
1662	1662	12 (M-1) For any taxpayer that is a financial
1663	1663	13 organization within the meaning of Section 304(c) of
1664	1664	14 this Act, an amount included in such total as interest
1665	1665	15 income from a loan or loans made by such taxpayer to a
1666	1666	16 borrower, to the extent that such a loan is secured by
1667	1667	17 property which is eligible for the High Impact
1668	1668	18 Business Investment Credit. To determine the portion
1669	1669	19 of a loan or loans that is secured by property eligible
1670	1670	20 for a Section 201(h) investment credit to the
1671	1671	21 borrower, the entire principal amount of the loan or
1672	1672	22 loans between the taxpayer and the borrower should be
1673	1673	23 divided into the basis of the Section 201(h)
1674	1674	24 investment credit property which secures the loan or
1675	1675	25 loans, using for this purpose the original basis of
1676	1676	26 such property on the date that it was placed in service
1677	1677
1678	1678
1679	1679
1680	1680
1681	1681
1682	1682	SB3489 - 46 - LRB103 35047 HLH 64992 b
1683	1683
1684	1684
1685	1685	SB3489- 47 -LRB103 35047 HLH 64992 b SB3489 - 47 - LRB103 35047 HLH 64992 b
1686	1686	SB3489 - 47 - LRB103 35047 HLH 64992 b
1687	1687	1 in a federally designated Foreign Trade Zone or
1688	1688	2 Sub-Zone located in Illinois. No taxpayer that is
1689	1689	3 eligible for the deduction provided in subparagraph
1690	1690	4 (M) of paragraph (2) of this subsection shall be
1691	1691	5 eligible for the deduction provided under this
1692	1692	6 subparagraph (M-1). The subtraction modification
1693	1693	7 available to taxpayers in any year under this
1694	1694	8 subsection shall be that portion of the total interest
1695	1695	9 paid by the borrower with respect to such loan
1696	1696	10 attributable to the eligible property as calculated
1697	1697	11 under the previous sentence;
1698	1698	12 (N) Two times any contribution made during the
1699	1699	13 taxable year to a designated zone organization to the
1700	1700	14 extent that the contribution (i) qualifies as a
1701	1701	15 charitable contribution under subsection (c) of
1702	1702	16 Section 170 of the Internal Revenue Code and (ii)
1703	1703	17 must, by its terms, be used for a project approved by
1704	1704	18 the Department of Commerce and Economic Opportunity
1705	1705	19 under Section 11 of the Illinois Enterprise Zone Act
1706	1706	20 or under Section 10-10 of the River Edge Redevelopment
1707	1707	21 Zone Act. This subparagraph (N) is exempt from the
1708	1708	22 provisions of Section 250;
1709	1709	23 (O) An amount equal to: (i) 85% for taxable years
1710	1710	24 ending on or before December 31, 1992, or, a
1711	1711	25 percentage equal to the percentage allowable under
1712	1712	26 Section 243(a)(1) of the Internal Revenue Code of 1986
1713	1713
1714	1714
1715	1715
1716	1716
1717	1717
1718	1718	SB3489 - 47 - LRB103 35047 HLH 64992 b
1719	1719
1720	1720
1721	1721	SB3489- 48 -LRB103 35047 HLH 64992 b SB3489 - 48 - LRB103 35047 HLH 64992 b
1722	1722	SB3489 - 48 - LRB103 35047 HLH 64992 b
1723	1723	1 for taxable years ending after December 31, 1992, of
1724	1724	2 the amount by which dividends included in taxable
1725	1725	3 income and received from a corporation that is not
1726	1726	4 created or organized under the laws of the United
1727	1727	5 States or any state or political subdivision thereof,
1728	1728	6 including, for taxable years ending on or after
1729	1729	7 December 31, 1988, dividends received or deemed
1730	1730	8 received or paid or deemed paid under Sections 951
1731	1731	9 through 965 of the Internal Revenue Code, exceed the
1732	1732	10 amount of the modification provided under subparagraph
1733	1733	11 (G) of paragraph (2) of this subsection (b) which is
1734	1734	12 related to such dividends, and including, for taxable
1735	1735	13 years ending on or after December 31, 2008, dividends
1736	1736	14 received from a captive real estate investment trust;
1737	1737	15 plus (ii) 100% of the amount by which dividends,
1738	1738	16 included in taxable income and received, including,
1739	1739	17 for taxable years ending on or after December 31,
1740	1740	18 1988, dividends received or deemed received or paid or
1741	1741	19 deemed paid under Sections 951 through 964 of the
1742	1742	20 Internal Revenue Code and including, for taxable years
1743	1743	21 ending on or after December 31, 2008, dividends
1744	1744	22 received from a captive real estate investment trust,
1745	1745	23 from any such corporation specified in clause (i) that
1746	1746	24 would but for the provisions of Section 1504(b)(3) of
1747	1747	25 the Internal Revenue Code be treated as a member of the
1748	1748	26 affiliated group which includes the dividend
1749	1749
1750	1750
1751	1751
1752	1752
1753	1753
1754	1754	SB3489 - 48 - LRB103 35047 HLH 64992 b
1755	1755
1756	1756
1757	1757	SB3489- 49 -LRB103 35047 HLH 64992 b SB3489 - 49 - LRB103 35047 HLH 64992 b
1758	1758	SB3489 - 49 - LRB103 35047 HLH 64992 b
1759	1759	1 recipient, exceed the amount of the modification
1760	1760	2 provided under subparagraph (G) of paragraph (2) of
1761	1761	3 this subsection (b) which is related to such
1762	1762	4 dividends. For taxable years ending on or after June
1763	1763	5 30, 2021, (i) for purposes of this subparagraph, the
1764	1764	6 term "dividend" does not include any amount treated as
1765	1765	7 a dividend under Section 1248 of the Internal Revenue
1766	1766	8 Code, and (ii) this subparagraph shall not apply to
1767	1767	9 dividends for which a deduction is allowed under
1768	1768	10 Section 245(a) of the Internal Revenue Code. This
1769	1769	11 subparagraph (O) is exempt from the provisions of
1770	1770	12 Section 250 of this Act;
1771	1771	13 (P) An amount equal to any contribution made to a
1772	1772	14 job training project established pursuant to the Tax
1773	1773	15 Increment Allocation Redevelopment Act;
1774	1774	16 (Q) An amount equal to the amount of the deduction
1775	1775	17 used to compute the federal income tax credit for
1776	1776	18 restoration of substantial amounts held under claim of
1777	1777	19 right for the taxable year pursuant to Section 1341 of
1778	1778	20 the Internal Revenue Code;
1779	1779	21 (R) On and after July 20, 1999, in the case of an
1780	1780	22 attorney-in-fact with respect to whom an interinsurer
1781	1781	23 or a reciprocal insurer has made the election under
1782	1782	24 Section 835 of the Internal Revenue Code, 26 U.S.C.
1783	1783	25 835, an amount equal to the excess, if any, of the
1784	1784	26 amounts paid or incurred by that interinsurer or
1785	1785
1786	1786
1787	1787
1788	1788
1789	1789
1790	1790	SB3489 - 49 - LRB103 35047 HLH 64992 b
1791	1791
1792	1792
1793	1793	SB3489- 50 -LRB103 35047 HLH 64992 b SB3489 - 50 - LRB103 35047 HLH 64992 b
1794	1794	SB3489 - 50 - LRB103 35047 HLH 64992 b
1795	1795	1 reciprocal insurer in the taxable year to the
1796	1796	2 attorney-in-fact over the deduction allowed to that
1797	1797	3 interinsurer or reciprocal insurer with respect to the
1798	1798	4 attorney-in-fact under Section 835(b) of the Internal
1799	1799	5 Revenue Code for the taxable year; the provisions of
1800	1800	6 this subparagraph are exempt from the provisions of
1801	1801	7 Section 250;
1802	1802	8 (S) For taxable years ending on or after December
1803	1803	9 31, 1997, in the case of a Subchapter S corporation, an
1804	1804	10 amount equal to all amounts of income allocable to a
1805	1805	11 shareholder subject to the Personal Property Tax
1806	1806	12 Replacement Income Tax imposed by subsections (c) and
1807	1807	13 (d) of Section 201 of this Act, including amounts
1808	1808	14 allocable to organizations exempt from federal income
1809	1809	15 tax by reason of Section 501(a) of the Internal
1810	1810	16 Revenue Code. This subparagraph (S) is exempt from the
1811	1811	17 provisions of Section 250;
1812	1812	18 (T) For taxable years 2001 and thereafter, for the
1813	1813	19 taxable year in which the bonus depreciation deduction
1814	1814	20 is taken on the taxpayer's federal income tax return
1815	1815	21 under subsection (k) of Section 168 of the Internal
1816	1816	22 Revenue Code and for each applicable taxable year
1817	1817	23 thereafter, an amount equal to "x", where:
1818	1818	24 (1) "y" equals the amount of the depreciation
1819	1819	25 deduction taken for the taxable year on the
1820	1820	26 taxpayer's federal income tax return on property
1821	1821
1822	1822
1823	1823
1824	1824
1825	1825
1826	1826	SB3489 - 50 - LRB103 35047 HLH 64992 b
1827	1827
1828	1828
1829	1829	SB3489- 51 -LRB103 35047 HLH 64992 b SB3489 - 51 - LRB103 35047 HLH 64992 b
1830	1830	SB3489 - 51 - LRB103 35047 HLH 64992 b
1831	1831	1 for which the bonus depreciation deduction was
1832	1832	2 taken in any year under subsection (k) of Section
1833	1833	3 168 of the Internal Revenue Code, but not
1834	1834	4 including the bonus depreciation deduction;
1835	1835	5 (2) for taxable years ending on or before
1836	1836	6 December 31, 2005, "x" equals "y" multiplied by 30
1837	1837	7 and then divided by 70 (or "y" multiplied by
1838	1838	8 0.429); and
1839	1839	9 (3) for taxable years ending after December
1840	1840	10 31, 2005:
1841	1841	11 (i) for property on which a bonus
1842	1842	12 depreciation deduction of 30% of the adjusted
1843	1843	13 basis was taken, "x" equals "y" multiplied by
1844	1844	14 30 and then divided by 70 (or "y" multiplied
1845	1845	15 by 0.429);
1846	1846	16 (ii) for property on which a bonus
1847	1847	17 depreciation deduction of 50% of the adjusted
1848	1848	18 basis was taken, "x" equals "y" multiplied by
1849	1849	19 1.0;
1850	1850	20 (iii) for property on which a bonus
1851	1851	21 depreciation deduction of 100% of the adjusted
1852	1852	22 basis was taken in a taxable year ending on or
1853	1853	23 after December 31, 2021, "x" equals the
1854	1854	24 depreciation deduction that would be allowed
1855	1855	25 on that property if the taxpayer had made the
1856	1856	26 election under Section 168(k)(7) of the
1857	1857
1858	1858
1859	1859
1860	1860
1861	1861
1862	1862	SB3489 - 51 - LRB103 35047 HLH 64992 b
1863	1863
1864	1864
1865	1865	SB3489- 52 -LRB103 35047 HLH 64992 b SB3489 - 52 - LRB103 35047 HLH 64992 b
1866	1866	SB3489 - 52 - LRB103 35047 HLH 64992 b
1867	1867	1 Internal Revenue Code to not claim bonus
1868	1868	2 depreciation on that property; and
1869	1869	3 (iv) for property on which a bonus
1870	1870	4 depreciation deduction of a percentage other
1871	1871	5 than 30%, 50% or 100% of the adjusted basis
1872	1872	6 was taken in a taxable year ending on or after
1873	1873	7 December 31, 2021, "x" equals "y" multiplied
1874	1874	8 by 100 times the percentage bonus depreciation
1875	1875	9 on the property (that is, 100(bonus%)) and
1876	1876	10 then divided by 100 times 1 minus the
1877	1877	11 percentage bonus depreciation on the property
1878	1878	12 (that is, 100(1bonus%)).
1879	1879	13 The aggregate amount deducted under this
1880	1880	14 subparagraph in all taxable years for any one piece of
1881	1881	15 property may not exceed the amount of the bonus
1882	1882	16 depreciation deduction taken on that property on the
1883	1883	17 taxpayer's federal income tax return under subsection
1884	1884	18 (k) of Section 168 of the Internal Revenue Code. This
1885	1885	19 subparagraph (T) is exempt from the provisions of
1886	1886	20 Section 250;
1887	1887	21 (U) If the taxpayer sells, transfers, abandons, or
1888	1888	22 otherwise disposes of property for which the taxpayer
1889	1889	23 was required in any taxable year to make an addition
1890	1890	24 modification under subparagraph (E-10), then an amount
1891	1891	25 equal to that addition modification.
1892	1892	26 If the taxpayer continues to own property through
1893	1893
1894	1894
1895	1895
1896	1896
1897	1897
1898	1898	SB3489 - 52 - LRB103 35047 HLH 64992 b
1899	1899
1900	1900
1901	1901	SB3489- 53 -LRB103 35047 HLH 64992 b SB3489 - 53 - LRB103 35047 HLH 64992 b
1902	1902	SB3489 - 53 - LRB103 35047 HLH 64992 b
1903	1903	1 the last day of the last tax year for which a
1904	1904	2 subtraction is allowed with respect to that property
1905	1905	3 under subparagraph (T) and for which the taxpayer was
1906	1906	4 required in any taxable year to make an addition
1907	1907	5 modification under subparagraph (E-10), then an amount
1908	1908	6 equal to that addition modification.
1909	1909	7 The taxpayer is allowed to take the deduction
1910	1910	8 under this subparagraph only once with respect to any
1911	1911	9 one piece of property.
1912	1912	10 This subparagraph (U) is exempt from the
1913	1913	11 provisions of Section 250;
1914	1914	12 (V) The amount of: (i) any interest income (net of
1915	1915	13 the deductions allocable thereto) taken into account
1916	1916	14 for the taxable year with respect to a transaction
1917	1917	15 with a taxpayer that is required to make an addition
1918	1918	16 modification with respect to such transaction under
1919	1919	17 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
1920	1920	18 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
1921	1921	19 the amount of such addition modification, (ii) any
1922	1922	20 income from intangible property (net of the deductions
1923	1923	21 allocable thereto) taken into account for the taxable
1924	1924	22 year with respect to a transaction with a taxpayer
1925	1925	23 that is required to make an addition modification with
1926	1926	24 respect to such transaction under Section
1927	1927	25 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
1928	1928	26 203(d)(2)(D-8), but not to exceed the amount of such
1929	1929
1930	1930
1931	1931
1932	1932
1933	1933
1934	1934	SB3489 - 53 - LRB103 35047 HLH 64992 b
1935	1935
1936	1936
1937	1937	SB3489- 54 -LRB103 35047 HLH 64992 b SB3489 - 54 - LRB103 35047 HLH 64992 b
1938	1938	SB3489 - 54 - LRB103 35047 HLH 64992 b
1939	1939	1 addition modification, and (iii) any insurance premium
1940	1940	2 income (net of deductions allocable thereto) taken
1941	1941	3 into account for the taxable year with respect to a
1942	1942	4 transaction with a taxpayer that is required to make
1943	1943	5 an addition modification with respect to such
1944	1944	6 transaction under Section 203(a)(2)(D-19), Section
1945	1945	7 203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
1946	1946	8 203(d)(2)(D-9), but not to exceed the amount of that
1947	1947	9 addition modification. This subparagraph (V) is exempt
1948	1948	10 from the provisions of Section 250;
1949	1949	11 (W) An amount equal to the interest income taken
1950	1950	12 into account for the taxable year (net of the
1951	1951	13 deductions allocable thereto) with respect to
1952	1952	14 transactions with (i) a foreign person who would be a
1953	1953	15 member of the taxpayer's unitary business group but
1954	1954	16 for the fact that the foreign person's business
1955	1955	17 activity outside the United States is 80% or more of
1956	1956	18 that person's total business activity and (ii) for
1957	1957	19 taxable years ending on or after December 31, 2008, to
1958	1958	20 a person who would be a member of the same unitary
1959	1959	21 business group but for the fact that the person is
1960	1960	22 prohibited under Section 1501(a)(27) from being
1961	1961	23 included in the unitary business group because he or
1962	1962	24 she is ordinarily required to apportion business
1963	1963	25 income under different subsections of Section 304, but
1964	1964	26 not to exceed the addition modification required to be
1965	1965
1966	1966
1967	1967
1968	1968
1969	1969
1970	1970	SB3489 - 54 - LRB103 35047 HLH 64992 b
1971	1971
1972	1972
1973	1973	SB3489- 55 -LRB103 35047 HLH 64992 b SB3489 - 55 - LRB103 35047 HLH 64992 b
1974	1974	SB3489 - 55 - LRB103 35047 HLH 64992 b
1975	1975	1 made for the same taxable year under Section
1976	1976	2 203(b)(2)(E-12) for interest paid, accrued, or
1977	1977	3 incurred, directly or indirectly, to the same person.
1978	1978	4 This subparagraph (W) is exempt from the provisions of
1979	1979	5 Section 250;
1980	1980	6 (X) An amount equal to the income from intangible
1981	1981	7 property taken into account for the taxable year (net
1982	1982	8 of the deductions allocable thereto) with respect to
1983	1983	9 transactions with (i) a foreign person who would be a
1984	1984	10 member of the taxpayer's unitary business group but
1985	1985	11 for the fact that the foreign person's business
1986	1986	12 activity outside the United States is 80% or more of
1987	1987	13 that person's total business activity and (ii) for
1988	1988	14 taxable years ending on or after December 31, 2008, to
1989	1989	15 a person who would be a member of the same unitary
1990	1990	16 business group but for the fact that the person is
1991	1991	17 prohibited under Section 1501(a)(27) from being
1992	1992	18 included in the unitary business group because he or
1993	1993	19 she is ordinarily required to apportion business
1994	1994	20 income under different subsections of Section 304, but
1995	1995	21 not to exceed the addition modification required to be
1996	1996	22 made for the same taxable year under Section
1997	1997	23 203(b)(2)(E-13) for intangible expenses and costs
1998	1998	24 paid, accrued, or incurred, directly or indirectly, to
1999	1999	25 the same foreign person. This subparagraph (X) is
2000	2000	26 exempt from the provisions of Section 250;
2001	2001
2002	2002
2003	2003
2004	2004
2005	2005
2006	2006	SB3489 - 55 - LRB103 35047 HLH 64992 b
2007	2007
2008	2008
2009	2009	SB3489- 56 -LRB103 35047 HLH 64992 b SB3489 - 56 - LRB103 35047 HLH 64992 b
2010	2010	SB3489 - 56 - LRB103 35047 HLH 64992 b
2011	2011	1 (Y) For taxable years ending on or after December
2012	2012	2 31, 2011, in the case of a taxpayer who was required to
2013	2013	3 add back any insurance premiums under Section
2014	2014	4 203(b)(2)(E-14), such taxpayer may elect to subtract
2015	2015	5 that part of a reimbursement received from the
2016	2016	6 insurance company equal to the amount of the expense
2017	2017	7 or loss (including expenses incurred by the insurance
2018	2018	8 company) that would have been taken into account as a
2019	2019	9 deduction for federal income tax purposes if the
2020	2020	10 expense or loss had been uninsured. If a taxpayer
2021	2021	11 makes the election provided for by this subparagraph
2022	2022	12 (Y), the insurer to which the premiums were paid must
2023	2023	13 add back to income the amount subtracted by the
2024	2024	14 taxpayer pursuant to this subparagraph (Y). This
2025	2025	15 subparagraph (Y) is exempt from the provisions of
2026	2026	16 Section 250; and
2027	2027	17 (Z) The difference between the nondeductible
2028	2028	18 controlled foreign corporation dividends under Section
2029	2029	19 965(e)(3) of the Internal Revenue Code over the
2030	2030	20 taxable income of the taxpayer, computed without
2031	2031	21 regard to Section 965(e)(2)(A) of the Internal Revenue
2032	2032	22 Code, and without regard to any net operating loss
2033	2033	23 deduction. This subparagraph (Z) is exempt from the
2034	2034	24 provisions of Section 250.
2035	2035	25 (3) Special rule. For purposes of paragraph (2)(A),
2036	2036	26 "gross income" in the case of a life insurance company,
2037	2037
2038	2038
2039	2039
2040	2040
2041	2041
2042	2042	SB3489 - 56 - LRB103 35047 HLH 64992 b
2043	2043
2044	2044
2045	2045	SB3489- 57 -LRB103 35047 HLH 64992 b SB3489 - 57 - LRB103 35047 HLH 64992 b
2046	2046	SB3489 - 57 - LRB103 35047 HLH 64992 b
2047	2047	1 for tax years ending on and after December 31, 1994, and
2048	2048	2 prior to December 31, 2011, shall mean the gross
2049	2049	3 investment income for the taxable year and, for tax years
2050	2050	4 ending on or after December 31, 2011, shall mean all
2051	2051	5 amounts included in life insurance gross income under
2052	2052	6 Section 803(a)(3) of the Internal Revenue Code.
2053	2053	7 (c) Trusts and estates.
2054	2054	8 (1) In general. In the case of a trust or estate, base
2055	2055	9 income means an amount equal to the taxpayer's taxable
2056	2056	10 income for the taxable year as modified by paragraph (2).
2057	2057	11 (2) Modifications. Subject to the provisions of
2058	2058	12 paragraph (3), the taxable income referred to in paragraph
2059	2059	13 (1) shall be modified by adding thereto the sum of the
2060	2060	14 following amounts:
2061	2061	15 (A) An amount equal to all amounts paid or accrued
2062	2062	16 to the taxpayer as interest or dividends during the
2063	2063	17 taxable year to the extent excluded from gross income
2064	2064	18 in the computation of taxable income;
2065	2065	19 (B) In the case of (i) an estate, $600; (ii) a
2066	2066	20 trust which, under its governing instrument, is
2067	2067	21 required to distribute all of its income currently,
2068	2068	22 $300; and (iii) any other trust, $100, but in each such
2069	2069	23 case, only to the extent such amount was deducted in
2070	2070	24 the computation of taxable income;
2071	2071	25 (C) An amount equal to the amount of tax imposed by
2072	2072
2073	2073
2074	2074
2075	2075
2076	2076
2077	2077	SB3489 - 57 - LRB103 35047 HLH 64992 b
2078	2078
2079	2079
2080	2080	SB3489- 58 -LRB103 35047 HLH 64992 b SB3489 - 58 - LRB103 35047 HLH 64992 b
2081	2081	SB3489 - 58 - LRB103 35047 HLH 64992 b
2082	2082	1 this Act to the extent deducted from gross income in
2083	2083	2 the computation of taxable income for the taxable
2084	2084	3 year;
2085	2085	4 (D) The amount of any net operating loss deduction
2086	2086	5 taken in arriving at taxable income, other than a net
2087	2087	6 operating loss carried forward from a taxable year
2088	2088	7 ending prior to December 31, 1986;
2089	2089	8 (E) For taxable years in which a net operating
2090	2090	9 loss carryback or carryforward from a taxable year
2091	2091	10 ending prior to December 31, 1986 is an element of
2092	2092	11 taxable income under paragraph (1) of subsection (e)
2093	2093	12 or subparagraph (E) of paragraph (2) of subsection
2094	2094	13 (e), the amount by which addition modifications other
2095	2095	14 than those provided by this subparagraph (E) exceeded
2096	2096	15 subtraction modifications in such taxable year, with
2097	2097	16 the following limitations applied in the order that
2098	2098	17 they are listed:
2099	2099	18 (i) the addition modification relating to the
2100	2100	19 net operating loss carried back or forward to the
2101	2101	20 taxable year from any taxable year ending prior to
2102	2102	21 December 31, 1986 shall be reduced by the amount
2103	2103	22 of addition modification under this subparagraph
2104	2104	23 (E) which related to that net operating loss and
2105	2105	24 which was taken into account in calculating the
2106	2106	25 base income of an earlier taxable year, and
2107	2107	26 (ii) the addition modification relating to the
2108	2108
2109	2109
2110	2110
2111	2111
2112	2112
2113	2113	SB3489 - 58 - LRB103 35047 HLH 64992 b
2114	2114
2115	2115
2116	2116	SB3489- 59 -LRB103 35047 HLH 64992 b SB3489 - 59 - LRB103 35047 HLH 64992 b
2117	2117	SB3489 - 59 - LRB103 35047 HLH 64992 b
2118	2118	1 net operating loss carried back or forward to the
2119	2119	2 taxable year from any taxable year ending prior to
2120	2120	3 December 31, 1986 shall not exceed the amount of
2121	2121	4 such carryback or carryforward;
2122	2122	5 For taxable years in which there is a net
2123	2123	6 operating loss carryback or carryforward from more
2124	2124	7 than one other taxable year ending prior to December
2125	2125	8 31, 1986, the addition modification provided in this
2126	2126	9 subparagraph (E) shall be the sum of the amounts
2127	2127	10 computed independently under the preceding provisions
2128	2128	11 of this subparagraph (E) for each such taxable year;
2129	2129	12 (F) For taxable years ending on or after January
2130	2130	13 1, 1989, an amount equal to the tax deducted pursuant
2131	2131	14 to Section 164 of the Internal Revenue Code if the
2132	2132	15 trust or estate is claiming the same tax for purposes
2133	2133	16 of the Illinois foreign tax credit under Section 601
2134	2134	17 of this Act;
2135	2135	18 (G) An amount equal to the amount of the capital
2136	2136	19 gain deduction allowable under the Internal Revenue
2137	2137	20 Code, to the extent deducted from gross income in the
2138	2138	21 computation of taxable income;
2139	2139	22 (G-5) For taxable years ending after December 31,
2140	2140	23 1997, an amount equal to any eligible remediation
2141	2141	24 costs that the trust or estate deducted in computing
2142	2142	25 adjusted gross income and for which the trust or
2143	2143	26 estate claims a credit under subsection (l) of Section
2144	2144
2145	2145
2146	2146
2147	2147
2148	2148
2149	2149	SB3489 - 59 - LRB103 35047 HLH 64992 b
2150	2150
2151	2151
2152	2152	SB3489- 60 -LRB103 35047 HLH 64992 b SB3489 - 60 - LRB103 35047 HLH 64992 b
2153	2153	SB3489 - 60 - LRB103 35047 HLH 64992 b
2154	2154	1 201;
2155	2155	2 (G-10) For taxable years 2001 and thereafter, an
2156	2156	3 amount equal to the bonus depreciation deduction taken
2157	2157	4 on the taxpayer's federal income tax return for the
2158	2158	5 taxable year under subsection (k) of Section 168 of
2159	2159	6 the Internal Revenue Code; and
2160	2160	7 (G-11) If the taxpayer sells, transfers, abandons,
2161	2161	8 or otherwise disposes of property for which the
2162	2162	9 taxpayer was required in any taxable year to make an
2163	2163	10 addition modification under subparagraph (G-10), then
2164	2164	11 an amount equal to the aggregate amount of the
2165	2165	12 deductions taken in all taxable years under
2166	2166	13 subparagraph (R) with respect to that property.
2167	2167	14 If the taxpayer continues to own property through
2168	2168	15 the last day of the last tax year for which a
2169	2169	16 subtraction is allowed with respect to that property
2170	2170	17 under subparagraph (R) and for which the taxpayer was
2171	2171	18 allowed in any taxable year to make a subtraction
2172	2172	19 modification under subparagraph (R), then an amount
2173	2173	20 equal to that subtraction modification.
2174	2174	21 The taxpayer is required to make the addition
2175	2175	22 modification under this subparagraph only once with
2176	2176	23 respect to any one piece of property;
2177	2177	24 (G-12) An amount equal to the amount otherwise
2178	2178	25 allowed as a deduction in computing base income for
2179	2179	26 interest paid, accrued, or incurred, directly or
2180	2180
2181	2181
2182	2182
2183	2183
2184	2184
2185	2185	SB3489 - 60 - LRB103 35047 HLH 64992 b
2186	2186
2187	2187
2188	2188	SB3489- 61 -LRB103 35047 HLH 64992 b SB3489 - 61 - LRB103 35047 HLH 64992 b
2189	2189	SB3489 - 61 - LRB103 35047 HLH 64992 b
2190	2190	1 indirectly, (i) for taxable years ending on or after
2191	2191	2 December 31, 2004, to a foreign person who would be a
2192	2192	3 member of the same unitary business group but for the
2193	2193	4 fact that the foreign person's business activity
2194	2194	5 outside the United States is 80% or more of the foreign
2195	2195	6 person's total business activity and (ii) for taxable
2196	2196	7 years ending on or after December 31, 2008, to a person
2197	2197	8 who would be a member of the same unitary business
2198	2198	9 group but for the fact that the person is prohibited
2199	2199	10 under Section 1501(a)(27) from being included in the
2200	2200	11 unitary business group because he or she is ordinarily
2201	2201	12 required to apportion business income under different
2202	2202	13 subsections of Section 304. The addition modification
2203	2203	14 required by this subparagraph shall be reduced to the
2204	2204	15 extent that dividends were included in base income of
2205	2205	16 the unitary group for the same taxable year and
2206	2206	17 received by the taxpayer or by a member of the
2207	2207	18 taxpayer's unitary business group (including amounts
2208	2208	19 included in gross income pursuant to Sections 951
2209	2209	20 through 964 of the Internal Revenue Code and amounts
2210	2210	21 included in gross income under Section 78 of the
2211	2211	22 Internal Revenue Code) with respect to the stock of
2212	2212	23 the same person to whom the interest was paid,
2213	2213	24 accrued, or incurred.
2214	2214	25 This paragraph shall not apply to the following:
2215	2215	26 (i) an item of interest paid, accrued, or
2216	2216
2217	2217
2218	2218
2219	2219
2220	2220
2221	2221	SB3489 - 61 - LRB103 35047 HLH 64992 b
2222	2222
2223	2223
2224	2224	SB3489- 62 -LRB103 35047 HLH 64992 b SB3489 - 62 - LRB103 35047 HLH 64992 b
2225	2225	SB3489 - 62 - LRB103 35047 HLH 64992 b
2226	2226	1 incurred, directly or indirectly, to a person who
2227	2227	2 is subject in a foreign country or state, other
2228	2228	3 than a state which requires mandatory unitary
2229	2229	4 reporting, to a tax on or measured by net income
2230	2230	5 with respect to such interest; or
2231	2231	6 (ii) an item of interest paid, accrued, or
2232	2232	7 incurred, directly or indirectly, to a person if
2233	2233	8 the taxpayer can establish, based on a
2234	2234	9 preponderance of the evidence, both of the
2235	2235	10 following:
2236	2236	11 (a) the person, during the same taxable
2237	2237	12 year, paid, accrued, or incurred, the interest
2238	2238	13 to a person that is not a related member, and
2239	2239	14 (b) the transaction giving rise to the
2240	2240	15 interest expense between the taxpayer and the
2241	2241	16 person did not have as a principal purpose the
2242	2242	17 avoidance of Illinois income tax, and is paid
2243	2243	18 pursuant to a contract or agreement that
2244	2244	19 reflects an arm's-length interest rate and
2245	2245	20 terms; or
2246	2246	21 (iii) the taxpayer can establish, based on
2247	2247	22 clear and convincing evidence, that the interest
2248	2248	23 paid, accrued, or incurred relates to a contract
2249	2249	24 or agreement entered into at arm's-length rates
2250	2250	25 and terms and the principal purpose for the
2251	2251	26 payment is not federal or Illinois tax avoidance;
2252	2252
2253	2253
2254	2254
2255	2255
2256	2256
2257	2257	SB3489 - 62 - LRB103 35047 HLH 64992 b
2258	2258
2259	2259
2260	2260	SB3489- 63 -LRB103 35047 HLH 64992 b SB3489 - 63 - LRB103 35047 HLH 64992 b
2261	2261	SB3489 - 63 - LRB103 35047 HLH 64992 b
2262	2262	1 or
2263	2263	2 (iv) an item of interest paid, accrued, or
2264	2264	3 incurred, directly or indirectly, to a person if
2265	2265	4 the taxpayer establishes by clear and convincing
2266	2266	5 evidence that the adjustments are unreasonable; or
2267	2267	6 if the taxpayer and the Director agree in writing
2268	2268	7 to the application or use of an alternative method
2269	2269	8 of apportionment under Section 304(f).
2270	2270	9 Nothing in this subsection shall preclude the
2271	2271	10 Director from making any other adjustment
2272	2272	11 otherwise allowed under Section 404 of this Act
2273	2273	12 for any tax year beginning after the effective
2274	2274	13 date of this amendment provided such adjustment is
2275	2275	14 made pursuant to regulation adopted by the
2276	2276	15 Department and such regulations provide methods
2277	2277	16 and standards by which the Department will utilize
2278	2278	17 its authority under Section 404 of this Act;
2279	2279	18 (G-13) An amount equal to the amount of intangible
2280	2280	19 expenses and costs otherwise allowed as a deduction in
2281	2281	20 computing base income, and that were paid, accrued, or
2282	2282	21 incurred, directly or indirectly, (i) for taxable
2283	2283	22 years ending on or after December 31, 2004, to a
2284	2284	23 foreign person who would be a member of the same
2285	2285	24 unitary business group but for the fact that the
2286	2286	25 foreign person's business activity outside the United
2287	2287	26 States is 80% or more of that person's total business
2288	2288
2289	2289
2290	2290
2291	2291
2292	2292
2293	2293	SB3489 - 63 - LRB103 35047 HLH 64992 b
2294	2294
2295	2295
2296	2296	SB3489- 64 -LRB103 35047 HLH 64992 b SB3489 - 64 - LRB103 35047 HLH 64992 b
2297	2297	SB3489 - 64 - LRB103 35047 HLH 64992 b
2298	2298	1 activity and (ii) for taxable years ending on or after
2299	2299	2 December 31, 2008, to a person who would be a member of
2300	2300	3 the same unitary business group but for the fact that
2301	2301	4 the person is prohibited under Section 1501(a)(27)
2302	2302	5 from being included in the unitary business group
2303	2303	6 because he or she is ordinarily required to apportion
2304	2304	7 business income under different subsections of Section
2305	2305	8 304. The addition modification required by this
2306	2306	9 subparagraph shall be reduced to the extent that
2307	2307	10 dividends were included in base income of the unitary
2308	2308	11 group for the same taxable year and received by the
2309	2309	12 taxpayer or by a member of the taxpayer's unitary
2310	2310	13 business group (including amounts included in gross
2311	2311	14 income pursuant to Sections 951 through 964 of the
2312	2312	15 Internal Revenue Code and amounts included in gross
2313	2313	16 income under Section 78 of the Internal Revenue Code)
2314	2314	17 with respect to the stock of the same person to whom
2315	2315	18 the intangible expenses and costs were directly or
2316	2316	19 indirectly paid, incurred, or accrued. The preceding
2317	2317	20 sentence shall not apply to the extent that the same
2318	2318	21 dividends caused a reduction to the addition
2319	2319	22 modification required under Section 203(c)(2)(G-12) of
2320	2320	23 this Act. As used in this subparagraph, the term
2321	2321	24 "intangible expenses and costs" includes: (1)
2322	2322	25 expenses, losses, and costs for or related to the
2323	2323	26 direct or indirect acquisition, use, maintenance or
2324	2324
2325	2325
2326	2326
2327	2327
2328	2328
2329	2329	SB3489 - 64 - LRB103 35047 HLH 64992 b
2330	2330
2331	2331
2332	2332	SB3489- 65 -LRB103 35047 HLH 64992 b SB3489 - 65 - LRB103 35047 HLH 64992 b
2333	2333	SB3489 - 65 - LRB103 35047 HLH 64992 b
2334	2334	1 management, ownership, sale, exchange, or any other
2335	2335	2 disposition of intangible property; (2) losses
2336	2336	3 incurred, directly or indirectly, from factoring
2337	2337	4 transactions or discounting transactions; (3) royalty,
2338	2338	5 patent, technical, and copyright fees; (4) licensing
2339	2339	6 fees; and (5) other similar expenses and costs. For
2340	2340	7 purposes of this subparagraph, "intangible property"
2341	2341	8 includes patents, patent applications, trade names,
2342	2342	9 trademarks, service marks, copyrights, mask works,
2343	2343	10 trade secrets, and similar types of intangible assets.
2344	2344	11 This paragraph shall not apply to the following:
2345	2345	12 (i) any item of intangible expenses or costs
2346	2346	13 paid, accrued, or incurred, directly or
2347	2347	14 indirectly, from a transaction with a person who
2348	2348	15 is subject in a foreign country or state, other
2349	2349	16 than a state which requires mandatory unitary
2350	2350	17 reporting, to a tax on or measured by net income
2351	2351	18 with respect to such item; or
2352	2352	19 (ii) any item of intangible expense or cost
2353	2353	20 paid, accrued, or incurred, directly or
2354	2354	21 indirectly, if the taxpayer can establish, based
2355	2355	22 on a preponderance of the evidence, both of the
2356	2356	23 following:
2357	2357	24 (a) the person during the same taxable
2358	2358	25 year paid, accrued, or incurred, the
2359	2359	26 intangible expense or cost to a person that is
2360	2360
2361	2361
2362	2362
2363	2363
2364	2364
2365	2365	SB3489 - 65 - LRB103 35047 HLH 64992 b
2366	2366
2367	2367
2368	2368	SB3489- 66 -LRB103 35047 HLH 64992 b SB3489 - 66 - LRB103 35047 HLH 64992 b
2369	2369	SB3489 - 66 - LRB103 35047 HLH 64992 b
2370	2370	1 not a related member, and
2371	2371	2 (b) the transaction giving rise to the
2372	2372	3 intangible expense or cost between the
2373	2373	4 taxpayer and the person did not have as a
2374	2374	5 principal purpose the avoidance of Illinois
2375	2375	6 income tax, and is paid pursuant to a contract
2376	2376	7 or agreement that reflects arm's-length terms;
2377	2377	8 or
2378	2378	9 (iii) any item of intangible expense or cost
2379	2379	10 paid, accrued, or incurred, directly or
2380	2380	11 indirectly, from a transaction with a person if
2381	2381	12 the taxpayer establishes by clear and convincing
2382	2382	13 evidence, that the adjustments are unreasonable;
2383	2383	14 or if the taxpayer and the Director agree in
2384	2384	15 writing to the application or use of an
2385	2385	16 alternative method of apportionment under Section
2386	2386	17 304(f);
2387	2387	18 Nothing in this subsection shall preclude the
2388	2388	19 Director from making any other adjustment
2389	2389	20 otherwise allowed under Section 404 of this Act
2390	2390	21 for any tax year beginning after the effective
2391	2391	22 date of this amendment provided such adjustment is
2392	2392	23 made pursuant to regulation adopted by the
2393	2393	24 Department and such regulations provide methods
2394	2394	25 and standards by which the Department will utilize
2395	2395	26 its authority under Section 404 of this Act;
2396	2396
2397	2397
2398	2398
2399	2399
2400	2400
2401	2401	SB3489 - 66 - LRB103 35047 HLH 64992 b
2402	2402
2403	2403
2404	2404	SB3489- 67 -LRB103 35047 HLH 64992 b SB3489 - 67 - LRB103 35047 HLH 64992 b
2405	2405	SB3489 - 67 - LRB103 35047 HLH 64992 b
2406	2406	1 (G-14) For taxable years ending on or after
2407	2407	2 December 31, 2008, an amount equal to the amount of
2408	2408	3 insurance premium expenses and costs otherwise allowed
2409	2409	4 as a deduction in computing base income, and that were
2410	2410	5 paid, accrued, or incurred, directly or indirectly, to
2411	2411	6 a person who would be a member of the same unitary
2412	2412	7 business group but for the fact that the person is
2413	2413	8 prohibited under Section 1501(a)(27) from being
2414	2414	9 included in the unitary business group because he or
2415	2415	10 she is ordinarily required to apportion business
2416	2416	11 income under different subsections of Section 304. The
2417	2417	12 addition modification required by this subparagraph
2418	2418	13 shall be reduced to the extent that dividends were
2419	2419	14 included in base income of the unitary group for the
2420	2420	15 same taxable year and received by the taxpayer or by a
2421	2421	16 member of the taxpayer's unitary business group
2422	2422	17 (including amounts included in gross income under
2423	2423	18 Sections 951 through 964 of the Internal Revenue Code
2424	2424	19 and amounts included in gross income under Section 78
2425	2425	20 of the Internal Revenue Code) with respect to the
2426	2426	21 stock of the same person to whom the premiums and costs
2427	2427	22 were directly or indirectly paid, incurred, or
2428	2428	23 accrued. The preceding sentence does not apply to the
2429	2429	24 extent that the same dividends caused a reduction to
2430	2430	25 the addition modification required under Section
2431	2431	26 203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this
2432	2432
2433	2433
2434	2434
2435	2435
2436	2436
2437	2437	SB3489 - 67 - LRB103 35047 HLH 64992 b
2438	2438
2439	2439
2440	2440	SB3489- 68 -LRB103 35047 HLH 64992 b SB3489 - 68 - LRB103 35047 HLH 64992 b
2441	2441	SB3489 - 68 - LRB103 35047 HLH 64992 b
2442	2442	1 Act;
2443	2443	2 (G-15) An amount equal to the credit allowable to
2444	2444	3 the taxpayer under Section 218(a) of this Act,
2445	2445	4 determined without regard to Section 218(c) of this
2446	2446	5 Act;
2447	2447	6 (G-16) For taxable years ending on or after
2448	2448	7 December 31, 2017, an amount equal to the deduction
2449	2449	8 allowed under Section 199 of the Internal Revenue Code
2450	2450	9 for the taxable year;
2451	2451	10 and by deducting from the total so obtained the sum of the
2452	2452	11 following amounts:
2453	2453	12 (H) An amount equal to all amounts included in
2454	2454	13 such total pursuant to the provisions of Sections
2455	2455	14 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 408
2456	2456	15 of the Internal Revenue Code or included in such total
2457	2457	16 as distributions under the provisions of any
2458	2458	17 retirement or disability plan for employees of any
2459	2459	18 governmental agency or unit, or retirement payments to
2460	2460	19 retired partners, which payments are excluded in
2461	2461	20 computing net earnings from self employment by Section
2462	2462	21 1402 of the Internal Revenue Code and regulations
2463	2463	22 adopted pursuant thereto;
2464	2464	23 (I) The valuation limitation amount;
2465	2465	24 (J) An amount equal to the amount of any tax
2466	2466	25 imposed by this Act which was refunded to the taxpayer
2467	2467	26 and included in such total for the taxable year;
2468	2468
2469	2469
2470	2470
2471	2471
2472	2472
2473	2473	SB3489 - 68 - LRB103 35047 HLH 64992 b
2474	2474
2475	2475
2476	2476	SB3489- 69 -LRB103 35047 HLH 64992 b SB3489 - 69 - LRB103 35047 HLH 64992 b
2477	2477	SB3489 - 69 - LRB103 35047 HLH 64992 b
2478	2478	1 (K) An amount equal to all amounts included in
2479	2479	2 taxable income as modified by subparagraphs (A), (B),
2480	2480	3 (C), (D), (E), (F) and (G) which are exempt from
2481	2481	4 taxation by this State either by reason of its
2482	2482	5 statutes or Constitution or by reason of the
2483	2483	6 Constitution, treaties or statutes of the United
2484	2484	7 States; provided that, in the case of any statute of
2485	2485	8 this State that exempts income derived from bonds or
2486	2486	9 other obligations from the tax imposed under this Act,
2487	2487	10 the amount exempted shall be the interest net of bond
2488	2488	11 premium amortization;
2489	2489	12 (L) With the exception of any amounts subtracted
2490	2490	13 under subparagraph (K), an amount equal to the sum of
2491	2491	14 all amounts disallowed as deductions by (i) Sections
2492	2492	15 171(a)(2) and 265(a)(2) of the Internal Revenue Code,
2493	2493	16 and all amounts of expenses allocable to interest and
2494	2494	17 disallowed as deductions by Section 265(a)(1) of the
2495	2495	18 Internal Revenue Code; and (ii) for taxable years
2496	2496	19 ending on or after August 13, 1999, Sections
2497	2497	20 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
2498	2498	21 Internal Revenue Code, plus, (iii) for taxable years
2499	2499	22 ending on or after December 31, 2011, Section
2500	2500	23 45G(e)(3) of the Internal Revenue Code and, for
2501	2501	24 taxable years ending on or after December 31, 2008,
2502	2502	25 any amount included in gross income under Section 87
2503	2503	26 of the Internal Revenue Code; the provisions of this
2504	2504
2505	2505
2506	2506
2507	2507
2508	2508
2509	2509	SB3489 - 69 - LRB103 35047 HLH 64992 b
2510	2510
2511	2511
2512	2512	SB3489- 70 -LRB103 35047 HLH 64992 b SB3489 - 70 - LRB103 35047 HLH 64992 b
2513	2513	SB3489 - 70 - LRB103 35047 HLH 64992 b
2514	2514	1 subparagraph are exempt from the provisions of Section
2515	2515	2 250;
2516	2516	3 (M) An amount equal to those dividends included in
2517	2517	4 such total which were paid by a corporation which
2518	2518	5 conducts business operations in a River Edge
2519	2519	6 Redevelopment Zone or zones created under the River
2520	2520	7 Edge Redevelopment Zone Act and conducts substantially
2521	2521	8 all of its operations in a River Edge Redevelopment
2522	2522	9 Zone or zones. This subparagraph (M) is exempt from
2523	2523	10 the provisions of Section 250;
2524	2524	11 (N) An amount equal to any contribution made to a
2525	2525	12 job training project established pursuant to the Tax
2526	2526	13 Increment Allocation Redevelopment Act;
2527	2527	14 (O) An amount equal to those dividends included in
2528	2528	15 such total that were paid by a corporation that
2529	2529	16 conducts business operations in a federally designated
2530	2530	17 Foreign Trade Zone or Sub-Zone and that is designated
2531	2531	18 a High Impact Business located in Illinois; provided
2532	2532	19 that dividends eligible for the deduction provided in
2533	2533	20 subparagraph (M) of paragraph (2) of this subsection
2534	2534	21 shall not be eligible for the deduction provided under
2535	2535	22 this subparagraph (O);
2536	2536	23 (P) An amount equal to the amount of the deduction
2537	2537	24 used to compute the federal income tax credit for
2538	2538	25 restoration of substantial amounts held under claim of
2539	2539	26 right for the taxable year pursuant to Section 1341 of
2540	2540
2541	2541
2542	2542
2543	2543
2544	2544
2545	2545	SB3489 - 70 - LRB103 35047 HLH 64992 b
2546	2546
2547	2547
2548	2548	SB3489- 71 -LRB103 35047 HLH 64992 b SB3489 - 71 - LRB103 35047 HLH 64992 b
2549	2549	SB3489 - 71 - LRB103 35047 HLH 64992 b
2550	2550	1 the Internal Revenue Code;
2551	2551	2 (Q) For taxable year 1999 and thereafter, an
2552	2552	3 amount equal to the amount of any (i) distributions,
2553	2553	4 to the extent includible in gross income for federal
2554	2554	5 income tax purposes, made to the taxpayer because of
2555	2555	6 his or her status as a victim of persecution for racial
2556	2556	7 or religious reasons by Nazi Germany or any other Axis
2557	2557	8 regime or as an heir of the victim and (ii) items of
2558	2558	9 income, to the extent includible in gross income for
2559	2559	10 federal income tax purposes, attributable to, derived
2560	2560	11 from or in any way related to assets stolen from,
2561	2561	12 hidden from, or otherwise lost to a victim of
2562	2562	13 persecution for racial or religious reasons by Nazi
2563	2563	14 Germany or any other Axis regime immediately prior to,
2564	2564	15 during, and immediately after World War II, including,
2565	2565	16 but not limited to, interest on the proceeds
2566	2566	17 receivable as insurance under policies issued to a
2567	2567	18 victim of persecution for racial or religious reasons
2568	2568	19 by Nazi Germany or any other Axis regime by European
2569	2569	20 insurance companies immediately prior to and during
2570	2570	21 World War II; provided, however, this subtraction from
2571	2571	22 federal adjusted gross income does not apply to assets
2572	2572	23 acquired with such assets or with the proceeds from
2573	2573	24 the sale of such assets; provided, further, this
2574	2574	25 paragraph shall only apply to a taxpayer who was the
2575	2575	26 first recipient of such assets after their recovery
2576	2576
2577	2577
2578	2578
2579	2579
2580	2580
2581	2581	SB3489 - 71 - LRB103 35047 HLH 64992 b
2582	2582
2583	2583
2584	2584	SB3489- 72 -LRB103 35047 HLH 64992 b SB3489 - 72 - LRB103 35047 HLH 64992 b
2585	2585	SB3489 - 72 - LRB103 35047 HLH 64992 b
2586	2586	1 and who is a victim of persecution for racial or
2587	2587	2 religious reasons by Nazi Germany or any other Axis
2588	2588	3 regime or as an heir of the victim. The amount of and
2589	2589	4 the eligibility for any public assistance, benefit, or
2590	2590	5 similar entitlement is not affected by the inclusion
2591	2591	6 of items (i) and (ii) of this paragraph in gross income
2592	2592	7 for federal income tax purposes. This paragraph is
2593	2593	8 exempt from the provisions of Section 250;
2594	2594	9 (R) For taxable years 2001 and thereafter, for the
2595	2595	10 taxable year in which the bonus depreciation deduction
2596	2596	11 is taken on the taxpayer's federal income tax return
2597	2597	12 under subsection (k) of Section 168 of the Internal
2598	2598	13 Revenue Code and for each applicable taxable year
2599	2599	14 thereafter, an amount equal to "x", where:
2600	2600	15 (1) "y" equals the amount of the depreciation
2601	2601	16 deduction taken for the taxable year on the
2602	2602	17 taxpayer's federal income tax return on property
2603	2603	18 for which the bonus depreciation deduction was
2604	2604	19 taken in any year under subsection (k) of Section
2605	2605	20 168 of the Internal Revenue Code, but not
2606	2606	21 including the bonus depreciation deduction;
2607	2607	22 (2) for taxable years ending on or before
2608	2608	23 December 31, 2005, "x" equals "y" multiplied by 30
2609	2609	24 and then divided by 70 (or "y" multiplied by
2610	2610	25 0.429); and
2611	2611	26 (3) for taxable years ending after December
2612	2612
2613	2613
2614	2614
2615	2615
2616	2616
2617	2617	SB3489 - 72 - LRB103 35047 HLH 64992 b
2618	2618
2619	2619
2620	2620	SB3489- 73 -LRB103 35047 HLH 64992 b SB3489 - 73 - LRB103 35047 HLH 64992 b
2621	2621	SB3489 - 73 - LRB103 35047 HLH 64992 b
2622	2622	1 31, 2005:
2623	2623	2 (i) for property on which a bonus
2624	2624	3 depreciation deduction of 30% of the adjusted
2625	2625	4 basis was taken, "x" equals "y" multiplied by
2626	2626	5 30 and then divided by 70 (or "y" multiplied
2627	2627	6 by 0.429);
2628	2628	7 (ii) for property on which a bonus
2629	2629	8 depreciation deduction of 50% of the adjusted
2630	2630	9 basis was taken, "x" equals "y" multiplied by
2631	2631	10 1.0;
2632	2632	11 (iii) for property on which a bonus
2633	2633	12 depreciation deduction of 100% of the adjusted
2634	2634	13 basis was taken in a taxable year ending on or
2635	2635	14 after December 31, 2021, "x" equals the
2636	2636	15 depreciation deduction that would be allowed
2637	2637	16 on that property if the taxpayer had made the
2638	2638	17 election under Section 168(k)(7) of the
2639	2639	18 Internal Revenue Code to not claim bonus
2640	2640	19 depreciation on that property; and
2641	2641	20 (iv) for property on which a bonus
2642	2642	21 depreciation deduction of a percentage other
2643	2643	22 than 30%, 50% or 100% of the adjusted basis
2644	2644	23 was taken in a taxable year ending on or after
2645	2645	24 December 31, 2021, "x" equals "y" multiplied
2646	2646	25 by 100 times the percentage bonus depreciation
2647	2647	26 on the property (that is, 100(bonus%)) and
2648	2648
2649	2649
2650	2650
2651	2651
2652	2652
2653	2653	SB3489 - 73 - LRB103 35047 HLH 64992 b
2654	2654
2655	2655
2656	2656	SB3489- 74 -LRB103 35047 HLH 64992 b SB3489 - 74 - LRB103 35047 HLH 64992 b
2657	2657	SB3489 - 74 - LRB103 35047 HLH 64992 b
2658	2658	1 then divided by 100 times 1 minus the
2659	2659	2 percentage bonus depreciation on the property
2660	2660	3 (that is, 100(1bonus%)).
2661	2661	4 The aggregate amount deducted under this
2662	2662	5 subparagraph in all taxable years for any one piece of
2663	2663	6 property may not exceed the amount of the bonus
2664	2664	7 depreciation deduction taken on that property on the
2665	2665	8 taxpayer's federal income tax return under subsection
2666	2666	9 (k) of Section 168 of the Internal Revenue Code. This
2667	2667	10 subparagraph (R) is exempt from the provisions of
2668	2668	11 Section 250;
2669	2669	12 (S) If the taxpayer sells, transfers, abandons, or
2670	2670	13 otherwise disposes of property for which the taxpayer
2671	2671	14 was required in any taxable year to make an addition
2672	2672	15 modification under subparagraph (G-10), then an amount
2673	2673	16 equal to that addition modification.
2674	2674	17 If the taxpayer continues to own property through
2675	2675	18 the last day of the last tax year for which a
2676	2676	19 subtraction is allowed with respect to that property
2677	2677	20 under subparagraph (R) and for which the taxpayer was
2678	2678	21 required in any taxable year to make an addition
2679	2679	22 modification under subparagraph (G-10), then an amount
2680	2680	23 equal to that addition modification.
2681	2681	24 The taxpayer is allowed to take the deduction
2682	2682	25 under this subparagraph only once with respect to any
2683	2683	26 one piece of property.
2684	2684
2685	2685
2686	2686
2687	2687
2688	2688
2689	2689	SB3489 - 74 - LRB103 35047 HLH 64992 b
2690	2690
2691	2691
2692	2692	SB3489- 75 -LRB103 35047 HLH 64992 b SB3489 - 75 - LRB103 35047 HLH 64992 b
2693	2693	SB3489 - 75 - LRB103 35047 HLH 64992 b
2694	2694	1 This subparagraph (S) is exempt from the
2695	2695	2 provisions of Section 250;
2696	2696	3 (T) The amount of (i) any interest income (net of
2697	2697	4 the deductions allocable thereto) taken into account
2698	2698	5 for the taxable year with respect to a transaction
2699	2699	6 with a taxpayer that is required to make an addition
2700	2700	7 modification with respect to such transaction under
2701	2701	8 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
2702	2702	9 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
2703	2703	10 the amount of such addition modification and (ii) any
2704	2704	11 income from intangible property (net of the deductions
2705	2705	12 allocable thereto) taken into account for the taxable
2706	2706	13 year with respect to a transaction with a taxpayer
2707	2707	14 that is required to make an addition modification with
2708	2708	15 respect to such transaction under Section
2709	2709	16 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
2710	2710	17 203(d)(2)(D-8), but not to exceed the amount of such
2711	2711	18 addition modification. This subparagraph (T) is exempt
2712	2712	19 from the provisions of Section 250;
2713	2713	20 (U) An amount equal to the interest income taken
2714	2714	21 into account for the taxable year (net of the
2715	2715	22 deductions allocable thereto) with respect to
2716	2716	23 transactions with (i) a foreign person who would be a
2717	2717	24 member of the taxpayer's unitary business group but
2718	2718	25 for the fact the foreign person's business activity
2719	2719	26 outside the United States is 80% or more of that
2720	2720
2721	2721
2722	2722
2723	2723
2724	2724
2725	2725	SB3489 - 75 - LRB103 35047 HLH 64992 b
2726	2726
2727	2727
2728	2728	SB3489- 76 -LRB103 35047 HLH 64992 b SB3489 - 76 - LRB103 35047 HLH 64992 b
2729	2729	SB3489 - 76 - LRB103 35047 HLH 64992 b
2730	2730	1 person's total business activity and (ii) for taxable
2731	2731	2 years ending on or after December 31, 2008, to a person
2732	2732	3 who would be a member of the same unitary business
2733	2733	4 group but for the fact that the person is prohibited
2734	2734	5 under Section 1501(a)(27) from being included in the
2735	2735	6 unitary business group because he or she is ordinarily
2736	2736	7 required to apportion business income under different
2737	2737	8 subsections of Section 304, but not to exceed the
2738	2738	9 addition modification required to be made for the same
2739	2739	10 taxable year under Section 203(c)(2)(G-12) for
2740	2740	11 interest paid, accrued, or incurred, directly or
2741	2741	12 indirectly, to the same person. This subparagraph (U)
2742	2742	13 is exempt from the provisions of Section 250;
2743	2743	14 (V) An amount equal to the income from intangible
2744	2744	15 property taken into account for the taxable year (net
2745	2745	16 of the deductions allocable thereto) with respect to
2746	2746	17 transactions with (i) a foreign person who would be a
2747	2747	18 member of the taxpayer's unitary business group but
2748	2748	19 for the fact that the foreign person's business
2749	2749	20 activity outside the United States is 80% or more of
2750	2750	21 that person's total business activity and (ii) for
2751	2751	22 taxable years ending on or after December 31, 2008, to
2752	2752	23 a person who would be a member of the same unitary
2753	2753	24 business group but for the fact that the person is
2754	2754	25 prohibited under Section 1501(a)(27) from being
2755	2755	26 included in the unitary business group because he or
2756	2756
2757	2757
2758	2758
2759	2759
2760	2760
2761	2761	SB3489 - 76 - LRB103 35047 HLH 64992 b
2762	2762
2763	2763
2764	2764	SB3489- 77 -LRB103 35047 HLH 64992 b SB3489 - 77 - LRB103 35047 HLH 64992 b
2765	2765	SB3489 - 77 - LRB103 35047 HLH 64992 b
2766	2766	1 she is ordinarily required to apportion business
2767	2767	2 income under different subsections of Section 304, but
2768	2768	3 not to exceed the addition modification required to be
2769	2769	4 made for the same taxable year under Section
2770	2770	5 203(c)(2)(G-13) for intangible expenses and costs
2771	2771	6 paid, accrued, or incurred, directly or indirectly, to
2772	2772	7 the same foreign person. This subparagraph (V) is
2773	2773	8 exempt from the provisions of Section 250;
2774	2774	9 (W) in the case of an estate, an amount equal to
2775	2775	10 all amounts included in such total pursuant to the
2776	2776	11 provisions of Section 111 of the Internal Revenue Code
2777	2777	12 as a recovery of items previously deducted by the
2778	2778	13 decedent from adjusted gross income in the computation
2779	2779	14 of taxable income. This subparagraph (W) is exempt
2780	2780	15 from Section 250;
2781	2781	16 (X) an amount equal to the refund included in such
2782	2782	17 total of any tax deducted for federal income tax
2783	2783	18 purposes, to the extent that deduction was added back
2784	2784	19 under subparagraph (F). This subparagraph (X) is
2785	2785	20 exempt from the provisions of Section 250;
2786	2786	21 (Y) For taxable years ending on or after December
2787	2787	22 31, 2011, in the case of a taxpayer who was required to
2788	2788	23 add back any insurance premiums under Section
2789	2789	24 203(c)(2)(G-14), such taxpayer may elect to subtract
2790	2790	25 that part of a reimbursement received from the
2791	2791	26 insurance company equal to the amount of the expense
2792	2792
2793	2793
2794	2794
2795	2795
2796	2796
2797	2797	SB3489 - 77 - LRB103 35047 HLH 64992 b
2798	2798
2799	2799
2800	2800	SB3489- 78 -LRB103 35047 HLH 64992 b SB3489 - 78 - LRB103 35047 HLH 64992 b
2801	2801	SB3489 - 78 - LRB103 35047 HLH 64992 b
2802	2802	1 or loss (including expenses incurred by the insurance
2803	2803	2 company) that would have been taken into account as a
2804	2804	3 deduction for federal income tax purposes if the
2805	2805	4 expense or loss had been uninsured. If a taxpayer
2806	2806	5 makes the election provided for by this subparagraph
2807	2807	6 (Y), the insurer to which the premiums were paid must
2808	2808	7 add back to income the amount subtracted by the
2809	2809	8 taxpayer pursuant to this subparagraph (Y). This
2810	2810	9 subparagraph (Y) is exempt from the provisions of
2811	2811	10 Section 250; and
2812	2812	11 (Z) For taxable years beginning after December 31,
2813	2813	12 2018 and before January 1, 2026, the amount of excess
2814	2814	13 business loss of the taxpayer disallowed as a
2815	2815	14 deduction by Section 461(l)(1)(B) of the Internal
2816	2816	15 Revenue Code.
2817	2817	16 (3) Limitation. The amount of any modification
2818	2818	17 otherwise required under this subsection shall, under
2819	2819	18 regulations prescribed by the Department, be adjusted by
2820	2820	19 any amounts included therein which were properly paid,
2821	2821	20 credited, or required to be distributed, or permanently
2822	2822	21 set aside for charitable purposes pursuant to Internal
2823	2823	22 Revenue Code Section 642(c) during the taxable year.
2824	2824	23 (d) Partnerships.
2825	2825	24 (1) In general. In the case of a partnership, base
2826	2826	25 income means an amount equal to the taxpayer's taxable
2827	2827
2828	2828
2829	2829
2830	2830
2831	2831
2832	2832	SB3489 - 78 - LRB103 35047 HLH 64992 b
2833	2833
2834	2834
2835	2835	SB3489- 79 -LRB103 35047 HLH 64992 b SB3489 - 79 - LRB103 35047 HLH 64992 b
2836	2836	SB3489 - 79 - LRB103 35047 HLH 64992 b
2837	2837	1 income for the taxable year as modified by paragraph (2).
2838	2838	2 (2) Modifications. The taxable income referred to in
2839	2839	3 paragraph (1) shall be modified by adding thereto the sum
2840	2840	4 of the following amounts:
2841	2841	5 (A) An amount equal to all amounts paid or accrued
2842	2842	6 to the taxpayer as interest or dividends during the
2843	2843	7 taxable year to the extent excluded from gross income
2844	2844	8 in the computation of taxable income;
2845	2845	9 (B) An amount equal to the amount of tax imposed by
2846	2846	10 this Act to the extent deducted from gross income for
2847	2847	11 the taxable year;
2848	2848	12 (C) The amount of deductions allowed to the
2849	2849	13 partnership pursuant to Section 707 (c) of the
2850	2850	14 Internal Revenue Code in calculating its taxable
2851	2851	15 income;
2852	2852	16 (D) An amount equal to the amount of the capital
2853	2853	17 gain deduction allowable under the Internal Revenue
2854	2854	18 Code, to the extent deducted from gross income in the
2855	2855	19 computation of taxable income;
2856	2856	20 (D-5) For taxable years 2001 and thereafter, an
2857	2857	21 amount equal to the bonus depreciation deduction taken
2858	2858	22 on the taxpayer's federal income tax return for the
2859	2859	23 taxable year under subsection (k) of Section 168 of
2860	2860	24 the Internal Revenue Code;
2861	2861	25 (D-6) If the taxpayer sells, transfers, abandons,
2862	2862	26 or otherwise disposes of property for which the
2863	2863
2864	2864
2865	2865
2866	2866
2867	2867
2868	2868	SB3489 - 79 - LRB103 35047 HLH 64992 b
2869	2869
2870	2870
2871	2871	SB3489- 80 -LRB103 35047 HLH 64992 b SB3489 - 80 - LRB103 35047 HLH 64992 b
2872	2872	SB3489 - 80 - LRB103 35047 HLH 64992 b
2873	2873	1 taxpayer was required in any taxable year to make an
2874	2874	2 addition modification under subparagraph (D-5), then
2875	2875	3 an amount equal to the aggregate amount of the
2876	2876	4 deductions taken in all taxable years under
2877	2877	5 subparagraph (O) with respect to that property.
2878	2878	6 If the taxpayer continues to own property through
2879	2879	7 the last day of the last tax year for which a
2880	2880	8 subtraction is allowed with respect to that property
2881	2881	9 under subparagraph (O) and for which the taxpayer was
2882	2882	10 allowed in any taxable year to make a subtraction
2883	2883	11 modification under subparagraph (O), then an amount
2884	2884	12 equal to that subtraction modification.
2885	2885	13 The taxpayer is required to make the addition
2886	2886	14 modification under this subparagraph only once with
2887	2887	15 respect to any one piece of property;
2888	2888	16 (D-7) An amount equal to the amount otherwise
2889	2889	17 allowed as a deduction in computing base income for
2890	2890	18 interest paid, accrued, or incurred, directly or
2891	2891	19 indirectly, (i) for taxable years ending on or after
2892	2892	20 December 31, 2004, to a foreign person who would be a
2893	2893	21 member of the same unitary business group but for the
2894	2894	22 fact the foreign person's business activity outside
2895	2895	23 the United States is 80% or more of the foreign
2896	2896	24 person's total business activity and (ii) for taxable
2897	2897	25 years ending on or after December 31, 2008, to a person
2898	2898	26 who would be a member of the same unitary business
2899	2899
2900	2900
2901	2901
2902	2902
2903	2903
2904	2904	SB3489 - 80 - LRB103 35047 HLH 64992 b
2905	2905
2906	2906
2907	2907	SB3489- 81 -LRB103 35047 HLH 64992 b SB3489 - 81 - LRB103 35047 HLH 64992 b
2908	2908	SB3489 - 81 - LRB103 35047 HLH 64992 b
2909	2909	1 group but for the fact that the person is prohibited
2910	2910	2 under Section 1501(a)(27) from being included in the
2911	2911	3 unitary business group because he or she is ordinarily
2912	2912	4 required to apportion business income under different
2913	2913	5 subsections of Section 304. The addition modification
2914	2914	6 required by this subparagraph shall be reduced to the
2915	2915	7 extent that dividends were included in base income of
2916	2916	8 the unitary group for the same taxable year and
2917	2917	9 received by the taxpayer or by a member of the
2918	2918	10 taxpayer's unitary business group (including amounts
2919	2919	11 included in gross income pursuant to Sections 951
2920	2920	12 through 964 of the Internal Revenue Code and amounts
2921	2921	13 included in gross income under Section 78 of the
2922	2922	14 Internal Revenue Code) with respect to the stock of
2923	2923	15 the same person to whom the interest was paid,
2924	2924	16 accrued, or incurred.
2925	2925	17 This paragraph shall not apply to the following:
2926	2926	18 (i) an item of interest paid, accrued, or
2927	2927	19 incurred, directly or indirectly, to a person who
2928	2928	20 is subject in a foreign country or state, other
2929	2929	21 than a state which requires mandatory unitary
2930	2930	22 reporting, to a tax on or measured by net income
2931	2931	23 with respect to such interest; or
2932	2932	24 (ii) an item of interest paid, accrued, or
2933	2933	25 incurred, directly or indirectly, to a person if
2934	2934	26 the taxpayer can establish, based on a
2935	2935
2936	2936
2937	2937
2938	2938
2939	2939
2940	2940	SB3489 - 81 - LRB103 35047 HLH 64992 b
2941	2941
2942	2942
2943	2943	SB3489- 82 -LRB103 35047 HLH 64992 b SB3489 - 82 - LRB103 35047 HLH 64992 b
2944	2944	SB3489 - 82 - LRB103 35047 HLH 64992 b
2945	2945	1 preponderance of the evidence, both of the
2946	2946	2 following:
2947	2947	3 (a) the person, during the same taxable
2948	2948	4 year, paid, accrued, or incurred, the interest
2949	2949	5 to a person that is not a related member, and
2950	2950	6 (b) the transaction giving rise to the
2951	2951	7 interest expense between the taxpayer and the
2952	2952	8 person did not have as a principal purpose the
2953	2953	9 avoidance of Illinois income tax, and is paid
2954	2954	10 pursuant to a contract or agreement that
2955	2955	11 reflects an arm's-length interest rate and
2956	2956	12 terms; or
2957	2957	13 (iii) the taxpayer can establish, based on
2958	2958	14 clear and convincing evidence, that the interest
2959	2959	15 paid, accrued, or incurred relates to a contract
2960	2960	16 or agreement entered into at arm's-length rates
2961	2961	17 and terms and the principal purpose for the
2962	2962	18 payment is not federal or Illinois tax avoidance;
2963	2963	19 or
2964	2964	20 (iv) an item of interest paid, accrued, or
2965	2965	21 incurred, directly or indirectly, to a person if
2966	2966	22 the taxpayer establishes by clear and convincing
2967	2967	23 evidence that the adjustments are unreasonable; or
2968	2968	24 if the taxpayer and the Director agree in writing
2969	2969	25 to the application or use of an alternative method
2970	2970	26 of apportionment under Section 304(f).
2971	2971
2972	2972
2973	2973
2974	2974
2975	2975
2976	2976	SB3489 - 82 - LRB103 35047 HLH 64992 b
2977	2977
2978	2978
2979	2979	SB3489- 83 -LRB103 35047 HLH 64992 b SB3489 - 83 - LRB103 35047 HLH 64992 b
2980	2980	SB3489 - 83 - LRB103 35047 HLH 64992 b
2981	2981	1 Nothing in this subsection shall preclude the
2982	2982	2 Director from making any other adjustment
2983	2983	3 otherwise allowed under Section 404 of this Act
2984	2984	4 for any tax year beginning after the effective
2985	2985	5 date of this amendment provided such adjustment is
2986	2986	6 made pursuant to regulation adopted by the
2987	2987	7 Department and such regulations provide methods
2988	2988	8 and standards by which the Department will utilize
2989	2989	9 its authority under Section 404 of this Act; and
2990	2990	10 (D-8) An amount equal to the amount of intangible
2991	2991	11 expenses and costs otherwise allowed as a deduction in
2992	2992	12 computing base income, and that were paid, accrued, or
2993	2993	13 incurred, directly or indirectly, (i) for taxable
2994	2994	14 years ending on or after December 31, 2004, to a
2995	2995	15 foreign person who would be a member of the same
2996	2996	16 unitary business group but for the fact that the
2997	2997	17 foreign person's business activity outside the United
2998	2998	18 States is 80% or more of that person's total business
2999	2999	19 activity and (ii) for taxable years ending on or after
3000	3000	20 December 31, 2008, to a person who would be a member of
3001	3001	21 the same unitary business group but for the fact that
3002	3002	22 the person is prohibited under Section 1501(a)(27)
3003	3003	23 from being included in the unitary business group
3004	3004	24 because he or she is ordinarily required to apportion
3005	3005	25 business income under different subsections of Section
3006	3006	26 304. The addition modification required by this
3007	3007
3008	3008
3009	3009
3010	3010
3011	3011
3012	3012	SB3489 - 83 - LRB103 35047 HLH 64992 b
3013	3013
3014	3014
3015	3015	SB3489- 84 -LRB103 35047 HLH 64992 b SB3489 - 84 - LRB103 35047 HLH 64992 b
3016	3016	SB3489 - 84 - LRB103 35047 HLH 64992 b
3017	3017	1 subparagraph shall be reduced to the extent that
3018	3018	2 dividends were included in base income of the unitary
3019	3019	3 group for the same taxable year and received by the
3020	3020	4 taxpayer or by a member of the taxpayer's unitary
3021	3021	5 business group (including amounts included in gross
3022	3022	6 income pursuant to Sections 951 through 964 of the
3023	3023	7 Internal Revenue Code and amounts included in gross
3024	3024	8 income under Section 78 of the Internal Revenue Code)
3025	3025	9 with respect to the stock of the same person to whom
3026	3026	10 the intangible expenses and costs were directly or
3027	3027	11 indirectly paid, incurred or accrued. The preceding
3028	3028	12 sentence shall not apply to the extent that the same
3029	3029	13 dividends caused a reduction to the addition
3030	3030	14 modification required under Section 203(d)(2)(D-7) of
3031	3031	15 this Act. As used in this subparagraph, the term
3032	3032	16 "intangible expenses and costs" includes (1) expenses,
3033	3033	17 losses, and costs for, or related to, the direct or
3034	3034	18 indirect acquisition, use, maintenance or management,
3035	3035	19 ownership, sale, exchange, or any other disposition of
3036	3036	20 intangible property; (2) losses incurred, directly or
3037	3037	21 indirectly, from factoring transactions or discounting
3038	3038	22 transactions; (3) royalty, patent, technical, and
3039	3039	23 copyright fees; (4) licensing fees; and (5) other
3040	3040	24 similar expenses and costs. For purposes of this
3041	3041	25 subparagraph, "intangible property" includes patents,
3042	3042	26 patent applications, trade names, trademarks, service
3043	3043
3044	3044
3045	3045
3046	3046
3047	3047
3048	3048	SB3489 - 84 - LRB103 35047 HLH 64992 b
3049	3049
3050	3050
3051	3051	SB3489- 85 -LRB103 35047 HLH 64992 b SB3489 - 85 - LRB103 35047 HLH 64992 b
3052	3052	SB3489 - 85 - LRB103 35047 HLH 64992 b
3053	3053	1 marks, copyrights, mask works, trade secrets, and
3054	3054	2 similar types of intangible assets;
3055	3055	3 This paragraph shall not apply to the following:
3056	3056	4 (i) any item of intangible expenses or costs
3057	3057	5 paid, accrued, or incurred, directly or
3058	3058	6 indirectly, from a transaction with a person who
3059	3059	7 is subject in a foreign country or state, other
3060	3060	8 than a state which requires mandatory unitary
3061	3061	9 reporting, to a tax on or measured by net income
3062	3062	10 with respect to such item; or
3063	3063	11 (ii) any item of intangible expense or cost
3064	3064	12 paid, accrued, or incurred, directly or
3065	3065	13 indirectly, if the taxpayer can establish, based
3066	3066	14 on a preponderance of the evidence, both of the
3067	3067	15 following:
3068	3068	16 (a) the person during the same taxable
3069	3069	17 year paid, accrued, or incurred, the
3070	3070	18 intangible expense or cost to a person that is
3071	3071	19 not a related member, and
3072	3072	20 (b) the transaction giving rise to the
3073	3073	21 intangible expense or cost between the
3074	3074	22 taxpayer and the person did not have as a
3075	3075	23 principal purpose the avoidance of Illinois
3076	3076	24 income tax, and is paid pursuant to a contract
3077	3077	25 or agreement that reflects arm's-length terms;
3078	3078	26 or
3079	3079
3080	3080
3081	3081
3082	3082
3083	3083
3084	3084	SB3489 - 85 - LRB103 35047 HLH 64992 b
3085	3085
3086	3086
3087	3087	SB3489- 86 -LRB103 35047 HLH 64992 b SB3489 - 86 - LRB103 35047 HLH 64992 b
3088	3088	SB3489 - 86 - LRB103 35047 HLH 64992 b
3089	3089	1 (iii) any item of intangible expense or cost
3090	3090	2 paid, accrued, or incurred, directly or
3091	3091	3 indirectly, from a transaction with a person if
3092	3092	4 the taxpayer establishes by clear and convincing
3093	3093	5 evidence, that the adjustments are unreasonable;
3094	3094	6 or if the taxpayer and the Director agree in
3095	3095	7 writing to the application or use of an
3096	3096	8 alternative method of apportionment under Section
3097	3097	9 304(f);
3098	3098	10 Nothing in this subsection shall preclude the
3099	3099	11 Director from making any other adjustment
3100	3100	12 otherwise allowed under Section 404 of this Act
3101	3101	13 for any tax year beginning after the effective
3102	3102	14 date of this amendment provided such adjustment is
3103	3103	15 made pursuant to regulation adopted by the
3104	3104	16 Department and such regulations provide methods
3105	3105	17 and standards by which the Department will utilize
3106	3106	18 its authority under Section 404 of this Act;
3107	3107	19 (D-9) For taxable years ending on or after
3108	3108	20 December 31, 2008, an amount equal to the amount of
3109	3109	21 insurance premium expenses and costs otherwise allowed
3110	3110	22 as a deduction in computing base income, and that were
3111	3111	23 paid, accrued, or incurred, directly or indirectly, to
3112	3112	24 a person who would be a member of the same unitary
3113	3113	25 business group but for the fact that the person is
3114	3114	26 prohibited under Section 1501(a)(27) from being
3115	3115
3116	3116
3117	3117
3118	3118
3119	3119
3120	3120	SB3489 - 86 - LRB103 35047 HLH 64992 b
3121	3121
3122	3122
3123	3123	SB3489- 87 -LRB103 35047 HLH 64992 b SB3489 - 87 - LRB103 35047 HLH 64992 b
3124	3124	SB3489 - 87 - LRB103 35047 HLH 64992 b
3125	3125	1 included in the unitary business group because he or
3126	3126	2 she is ordinarily required to apportion business
3127	3127	3 income under different subsections of Section 304. The
3128	3128	4 addition modification required by this subparagraph
3129	3129	5 shall be reduced to the extent that dividends were
3130	3130	6 included in base income of the unitary group for the
3131	3131	7 same taxable year and received by the taxpayer or by a
3132	3132	8 member of the taxpayer's unitary business group
3133	3133	9 (including amounts included in gross income under
3134	3134	10 Sections 951 through 964 of the Internal Revenue Code
3135	3135	11 and amounts included in gross income under Section 78
3136	3136	12 of the Internal Revenue Code) with respect to the
3137	3137	13 stock of the same person to whom the premiums and costs
3138	3138	14 were directly or indirectly paid, incurred, or
3139	3139	15 accrued. The preceding sentence does not apply to the
3140	3140	16 extent that the same dividends caused a reduction to
3141	3141	17 the addition modification required under Section
3142	3142	18 203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act;
3143	3143	19 (D-10) An amount equal to the credit allowable to
3144	3144	20 the taxpayer under Section 218(a) of this Act,
3145	3145	21 determined without regard to Section 218(c) of this
3146	3146	22 Act;
3147	3147	23 (D-11) For taxable years ending on or after
3148	3148	24 December 31, 2017, an amount equal to the deduction
3149	3149	25 allowed under Section 199 of the Internal Revenue Code
3150	3150	26 for the taxable year;
3151	3151
3152	3152
3153	3153
3154	3154
3155	3155
3156	3156	SB3489 - 87 - LRB103 35047 HLH 64992 b
3157	3157
3158	3158
3159	3159	SB3489- 88 -LRB103 35047 HLH 64992 b SB3489 - 88 - LRB103 35047 HLH 64992 b
3160	3160	SB3489 - 88 - LRB103 35047 HLH 64992 b
3161	3161	1 and by deducting from the total so obtained the following
3162	3162	2 amounts:
3163	3163	3 (E) The valuation limitation amount;
3164	3164	4 (F) An amount equal to the amount of any tax
3165	3165	5 imposed by this Act which was refunded to the taxpayer
3166	3166	6 and included in such total for the taxable year;
3167	3167	7 (G) An amount equal to all amounts included in
3168	3168	8 taxable income as modified by subparagraphs (A), (B),
3169	3169	9 (C) and (D) which are exempt from taxation by this
3170	3170	10 State either by reason of its statutes or Constitution
3171	3171	11 or by reason of the Constitution, treaties or statutes
3172	3172	12 of the United States; provided that, in the case of any
3173	3173	13 statute of this State that exempts income derived from
3174	3174	14 bonds or other obligations from the tax imposed under
3175	3175	15 this Act, the amount exempted shall be the interest
3176	3176	16 net of bond premium amortization;
3177	3177	17 (H) Any income of the partnership which
3178	3178	18 constitutes personal service income as defined in
3179	3179	19 Section 1348(b)(1) of the Internal Revenue Code (as in
3180	3180	20 effect December 31, 1981) or a reasonable allowance
3181	3181	21 for compensation paid or accrued for services rendered
3182	3182	22 by partners to the partnership, whichever is greater;
3183	3183	23 this subparagraph (H) is exempt from the provisions of
3184	3184	24 Section 250;
3185	3185	25 (I) An amount equal to all amounts of income
3186	3186	26 distributable to an entity subject to the Personal
3187	3187
3188	3188
3189	3189
3190	3190
3191	3191
3192	3192	SB3489 - 88 - LRB103 35047 HLH 64992 b
3193	3193
3194	3194
3195	3195	SB3489- 89 -LRB103 35047 HLH 64992 b SB3489 - 89 - LRB103 35047 HLH 64992 b
3196	3196	SB3489 - 89 - LRB103 35047 HLH 64992 b
3197	3197	1 Property Tax Replacement Income Tax imposed by
3198	3198	2 subsections (c) and (d) of Section 201 of this Act
3199	3199	3 including amounts distributable to organizations
3200	3200	4 exempt from federal income tax by reason of Section
3201	3201	5 501(a) of the Internal Revenue Code; this subparagraph
3202	3202	6 (I) is exempt from the provisions of Section 250;
3203	3203	7 (J) With the exception of any amounts subtracted
3204	3204	8 under subparagraph (G), an amount equal to the sum of
3205	3205	9 all amounts disallowed as deductions by (i) Sections
3206	3206	10 171(a)(2) and 265(a)(2) of the Internal Revenue Code,
3207	3207	11 and all amounts of expenses allocable to interest and
3208	3208	12 disallowed as deductions by Section 265(a)(1) of the
3209	3209	13 Internal Revenue Code; and (ii) for taxable years
3210	3210	14 ending on or after August 13, 1999, Sections
3211	3211	15 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
3212	3212	16 Internal Revenue Code, plus, (iii) for taxable years
3213	3213	17 ending on or after December 31, 2011, Section
3214	3214	18 45G(e)(3) of the Internal Revenue Code and, for
3215	3215	19 taxable years ending on or after December 31, 2008,
3216	3216	20 any amount included in gross income under Section 87
3217	3217	21 of the Internal Revenue Code; the provisions of this
3218	3218	22 subparagraph are exempt from the provisions of Section
3219	3219	23 250;
3220	3220	24 (K) An amount equal to those dividends included in
3221	3221	25 such total which were paid by a corporation which
3222	3222	26 conducts business operations in a River Edge
3223	3223
3224	3224
3225	3225
3226	3226
3227	3227
3228	3228	SB3489 - 89 - LRB103 35047 HLH 64992 b
3229	3229
3230	3230
3231	3231	SB3489- 90 -LRB103 35047 HLH 64992 b SB3489 - 90 - LRB103 35047 HLH 64992 b
3232	3232	SB3489 - 90 - LRB103 35047 HLH 64992 b
3233	3233	1 Redevelopment Zone or zones created under the River
3234	3234	2 Edge Redevelopment Zone Act and conducts substantially
3235	3235	3 all of its operations from a River Edge Redevelopment
3236	3236	4 Zone or zones. This subparagraph (K) is exempt from
3237	3237	5 the provisions of Section 250;
3238	3238	6 (L) An amount equal to any contribution made to a
3239	3239	7 job training project established pursuant to the Real
3240	3240	8 Property Tax Increment Allocation Redevelopment Act;
3241	3241	9 (M) An amount equal to those dividends included in
3242	3242	10 such total that were paid by a corporation that
3243	3243	11 conducts business operations in a federally designated
3244	3244	12 Foreign Trade Zone or Sub-Zone and that is designated
3245	3245	13 a High Impact Business located in Illinois; provided
3246	3246	14 that dividends eligible for the deduction provided in
3247	3247	15 subparagraph (K) of paragraph (2) of this subsection
3248	3248	16 shall not be eligible for the deduction provided under
3249	3249	17 this subparagraph (M);
3250	3250	18 (N) An amount equal to the amount of the deduction
3251	3251	19 used to compute the federal income tax credit for
3252	3252	20 restoration of substantial amounts held under claim of
3253	3253	21 right for the taxable year pursuant to Section 1341 of
3254	3254	22 the Internal Revenue Code;
3255	3255	23 (O) For taxable years 2001 and thereafter, for the
3256	3256	24 taxable year in which the bonus depreciation deduction
3257	3257	25 is taken on the taxpayer's federal income tax return
3258	3258	26 under subsection (k) of Section 168 of the Internal
3259	3259
3260	3260
3261	3261
3262	3262
3263	3263
3264	3264	SB3489 - 90 - LRB103 35047 HLH 64992 b
3265	3265
3266	3266
3267	3267	SB3489- 91 -LRB103 35047 HLH 64992 b SB3489 - 91 - LRB103 35047 HLH 64992 b
3268	3268	SB3489 - 91 - LRB103 35047 HLH 64992 b
3269	3269	1 Revenue Code and for each applicable taxable year
3270	3270	2 thereafter, an amount equal to "x", where:
3271	3271	3 (1) "y" equals the amount of the depreciation
3272	3272	4 deduction taken for the taxable year on the
3273	3273	5 taxpayer's federal income tax return on property
3274	3274	6 for which the bonus depreciation deduction was
3275	3275	7 taken in any year under subsection (k) of Section
3276	3276	8 168 of the Internal Revenue Code, but not
3277	3277	9 including the bonus depreciation deduction;
3278	3278	10 (2) for taxable years ending on or before
3279	3279	11 December 31, 2005, "x" equals "y" multiplied by 30
3280	3280	12 and then divided by 70 (or "y" multiplied by
3281	3281	13 0.429); and
3282	3282	14 (3) for taxable years ending after December
3283	3283	15 31, 2005:
3284	3284	16 (i) for property on which a bonus
3285	3285	17 depreciation deduction of 30% of the adjusted
3286	3286	18 basis was taken, "x" equals "y" multiplied by
3287	3287	19 30 and then divided by 70 (or "y" multiplied
3288	3288	20 by 0.429);
3289	3289	21 (ii) for property on which a bonus
3290	3290	22 depreciation deduction of 50% of the adjusted
3291	3291	23 basis was taken, "x" equals "y" multiplied by
3292	3292	24 1.0;
3293	3293	25 (iii) for property on which a bonus
3294	3294	26 depreciation deduction of 100% of the adjusted
3295	3295
3296	3296
3297	3297
3298	3298
3299	3299
3300	3300	SB3489 - 91 - LRB103 35047 HLH 64992 b
3301	3301
3302	3302
3303	3303	SB3489- 92 -LRB103 35047 HLH 64992 b SB3489 - 92 - LRB103 35047 HLH 64992 b
3304	3304	SB3489 - 92 - LRB103 35047 HLH 64992 b
3305	3305	1 basis was taken in a taxable year ending on or
3306	3306	2 after December 31, 2021, "x" equals the
3307	3307	3 depreciation deduction that would be allowed
3308	3308	4 on that property if the taxpayer had made the
3309	3309	5 election under Section 168(k)(7) of the
3310	3310	6 Internal Revenue Code to not claim bonus
3311	3311	7 depreciation on that property; and
3312	3312	8 (iv) for property on which a bonus
3313	3313	9 depreciation deduction of a percentage other
3314	3314	10 than 30%, 50% or 100% of the adjusted basis
3315	3315	11 was taken in a taxable year ending on or after
3316	3316	12 December 31, 2021, "x" equals "y" multiplied
3317	3317	13 by 100 times the percentage bonus depreciation
3318	3318	14 on the property (that is, 100(bonus%)) and
3319	3319	15 then divided by 100 times 1 minus the
3320	3320	16 percentage bonus depreciation on the property
3321	3321	17 (that is, 100(1bonus%)).
3322	3322	18 The aggregate amount deducted under this
3323	3323	19 subparagraph in all taxable years for any one piece of
3324	3324	20 property may not exceed the amount of the bonus
3325	3325	21 depreciation deduction taken on that property on the
3326	3326	22 taxpayer's federal income tax return under subsection
3327	3327	23 (k) of Section 168 of the Internal Revenue Code. This
3328	3328	24 subparagraph (O) is exempt from the provisions of
3329	3329	25 Section 250;
3330	3330	26 (P) If the taxpayer sells, transfers, abandons, or
3331	3331
3332	3332
3333	3333
3334	3334
3335	3335
3336	3336	SB3489 - 92 - LRB103 35047 HLH 64992 b
3337	3337
3338	3338
3339	3339	SB3489- 93 -LRB103 35047 HLH 64992 b SB3489 - 93 - LRB103 35047 HLH 64992 b
3340	3340	SB3489 - 93 - LRB103 35047 HLH 64992 b
3341	3341	1 otherwise disposes of property for which the taxpayer
3342	3342	2 was required in any taxable year to make an addition
3343	3343	3 modification under subparagraph (D-5), then an amount
3344	3344	4 equal to that addition modification.
3345	3345	5 If the taxpayer continues to own property through
3346	3346	6 the last day of the last tax year for which a
3347	3347	7 subtraction is allowed with respect to that property
3348	3348	8 under subparagraph (O) and for which the taxpayer was
3349	3349	9 required in any taxable year to make an addition
3350	3350	10 modification under subparagraph (D-5), then an amount
3351	3351	11 equal to that addition modification.
3352	3352	12 The taxpayer is allowed to take the deduction
3353	3353	13 under this subparagraph only once with respect to any
3354	3354	14 one piece of property.
3355	3355	15 This subparagraph (P) is exempt from the
3356	3356	16 provisions of Section 250;
3357	3357	17 (Q) The amount of (i) any interest income (net of
3358	3358	18 the deductions allocable thereto) taken into account
3359	3359	19 for the taxable year with respect to a transaction
3360	3360	20 with a taxpayer that is required to make an addition
3361	3361	21 modification with respect to such transaction under
3362	3362	22 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
3363	3363	23 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
3364	3364	24 the amount of such addition modification and (ii) any
3365	3365	25 income from intangible property (net of the deductions
3366	3366	26 allocable thereto) taken into account for the taxable
3367	3367
3368	3368
3369	3369
3370	3370
3371	3371
3372	3372	SB3489 - 93 - LRB103 35047 HLH 64992 b
3373	3373
3374	3374
3375	3375	SB3489- 94 -LRB103 35047 HLH 64992 b SB3489 - 94 - LRB103 35047 HLH 64992 b
3376	3376	SB3489 - 94 - LRB103 35047 HLH 64992 b
3377	3377	1 year with respect to a transaction with a taxpayer
3378	3378	2 that is required to make an addition modification with
3379	3379	3 respect to such transaction under Section
3380	3380	4 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
3381	3381	5 203(d)(2)(D-8), but not to exceed the amount of such
3382	3382	6 addition modification. This subparagraph (Q) is exempt
3383	3383	7 from Section 250;
3384	3384	8 (R) An amount equal to the interest income taken
3385	3385	9 into account for the taxable year (net of the
3386	3386	10 deductions allocable thereto) with respect to
3387	3387	11 transactions with (i) a foreign person who would be a
3388	3388	12 member of the taxpayer's unitary business group but
3389	3389	13 for the fact that the foreign person's business
3390	3390	14 activity outside the United States is 80% or more of
3391	3391	15 that person's total business activity and (ii) for
3392	3392	16 taxable years ending on or after December 31, 2008, to
3393	3393	17 a person who would be a member of the same unitary
3394	3394	18 business group but for the fact that the person is
3395	3395	19 prohibited under Section 1501(a)(27) from being
3396	3396	20 included in the unitary business group because he or
3397	3397	21 she is ordinarily required to apportion business
3398	3398	22 income under different subsections of Section 304, but
3399	3399	23 not to exceed the addition modification required to be
3400	3400	24 made for the same taxable year under Section
3401	3401	25 203(d)(2)(D-7) for interest paid, accrued, or
3402	3402	26 incurred, directly or indirectly, to the same person.
3403	3403
3404	3404
3405	3405
3406	3406
3407	3407
3408	3408	SB3489 - 94 - LRB103 35047 HLH 64992 b
3409	3409
3410	3410
3411	3411	SB3489- 95 -LRB103 35047 HLH 64992 b SB3489 - 95 - LRB103 35047 HLH 64992 b
3412	3412	SB3489 - 95 - LRB103 35047 HLH 64992 b
3413	3413	1 This subparagraph (R) is exempt from Section 250;
3414	3414	2 (S) An amount equal to the income from intangible
3415	3415	3 property taken into account for the taxable year (net
3416	3416	4 of the deductions allocable thereto) with respect to
3417	3417	5 transactions with (i) a foreign person who would be a
3418	3418	6 member of the taxpayer's unitary business group but
3419	3419	7 for the fact that the foreign person's business
3420	3420	8 activity outside the United States is 80% or more of
3421	3421	9 that person's total business activity and (ii) for
3422	3422	10 taxable years ending on or after December 31, 2008, to
3423	3423	11 a person who would be a member of the same unitary
3424	3424	12 business group but for the fact that the person is
3425	3425	13 prohibited under Section 1501(a)(27) from being
3426	3426	14 included in the unitary business group because he or
3427	3427	15 she is ordinarily required to apportion business
3428	3428	16 income under different subsections of Section 304, but
3429	3429	17 not to exceed the addition modification required to be
3430	3430	18 made for the same taxable year under Section
3431	3431	19 203(d)(2)(D-8) for intangible expenses and costs paid,
3432	3432	20 accrued, or incurred, directly or indirectly, to the
3433	3433	21 same person. This subparagraph (S) is exempt from
3434	3434	22 Section 250; and
3435	3435	23 (T) For taxable years ending on or after December
3436	3436	24 31, 2011, in the case of a taxpayer who was required to
3437	3437	25 add back any insurance premiums under Section
3438	3438	26 203(d)(2)(D-9), such taxpayer may elect to subtract
3439	3439
3440	3440
3441	3441
3442	3442
3443	3443
3444	3444	SB3489 - 95 - LRB103 35047 HLH 64992 b
3445	3445
3446	3446
3447	3447	SB3489- 96 -LRB103 35047 HLH 64992 b SB3489 - 96 - LRB103 35047 HLH 64992 b
3448	3448	SB3489 - 96 - LRB103 35047 HLH 64992 b
3449	3449	1 that part of a reimbursement received from the
3450	3450	2 insurance company equal to the amount of the expense
3451	3451	3 or loss (including expenses incurred by the insurance
3452	3452	4 company) that would have been taken into account as a
3453	3453	5 deduction for federal income tax purposes if the
3454	3454	6 expense or loss had been uninsured. If a taxpayer
3455	3455	7 makes the election provided for by this subparagraph
3456	3456	8 (T), the insurer to which the premiums were paid must
3457	3457	9 add back to income the amount subtracted by the
3458	3458	10 taxpayer pursuant to this subparagraph (T). This
3459	3459	11 subparagraph (T) is exempt from the provisions of
3460	3460	12 Section 250.
3461	3461	13 (e) Gross income; adjusted gross income; taxable income.
3462	3462	14 (1) In general. Subject to the provisions of paragraph
3463	3463	15 (2) and subsection (b)(3), for purposes of this Section
3464	3464	16 and Section 803(e), a taxpayer's gross income, adjusted
3465	3465	17 gross income, or taxable income for the taxable year shall
3466	3466	18 mean the amount of gross income, adjusted gross income or
3467	3467	19 taxable income properly reportable for federal income tax
3468	3468	20 purposes for the taxable year under the provisions of the
3469	3469	21 Internal Revenue Code. Taxable income may be less than
3470	3470	22 zero. However, for taxable years ending on or after
3471	3471	23 December 31, 1986, net operating loss carryforwards from
3472	3472	24 taxable years ending prior to December 31, 1986, may not
3473	3473	25 exceed the sum of federal taxable income for the taxable
3474	3474
3475	3475
3476	3476
3477	3477
3478	3478
3479	3479	SB3489 - 96 - LRB103 35047 HLH 64992 b
3480	3480
3481	3481
3482	3482	SB3489- 97 -LRB103 35047 HLH 64992 b SB3489 - 97 - LRB103 35047 HLH 64992 b
3483	3483	SB3489 - 97 - LRB103 35047 HLH 64992 b
3484	3484	1 year before net operating loss deduction, plus the excess
3485	3485	2 of addition modifications over subtraction modifications
3486	3486	3 for the taxable year. For taxable years ending prior to
3487	3487	4 December 31, 1986, taxable income may never be an amount
3488	3488	5 in excess of the net operating loss for the taxable year as
3489	3489	6 defined in subsections (c) and (d) of Section 172 of the
3490	3490	7 Internal Revenue Code, provided that when taxable income
3491	3491	8 of a corporation (other than a Subchapter S corporation),
3492	3492	9 trust, or estate is less than zero and addition
3493	3493	10 modifications, other than those provided by subparagraph
3494	3494	11 (E) of paragraph (2) of subsection (b) for corporations or
3495	3495	12 subparagraph (E) of paragraph (2) of subsection (c) for
3496	3496	13 trusts and estates, exceed subtraction modifications, an
3497	3497	14 addition modification must be made under those
3498	3498	15 subparagraphs for any other taxable year to which the
3499	3499	16 taxable income less than zero (net operating loss) is
3500	3500	17 applied under Section 172 of the Internal Revenue Code or
3501	3501	18 under subparagraph (E) of paragraph (2) of this subsection
3502	3502	19 (e) applied in conjunction with Section 172 of the
3503	3503	20 Internal Revenue Code.
3504	3504	21 (2) Special rule. For purposes of paragraph (1) of
3505	3505	22 this subsection, the taxable income properly reportable
3506	3506	23 for federal income tax purposes shall mean:
3507	3507	24 (A) Certain life insurance companies. In the case
3508	3508	25 of a life insurance company subject to the tax imposed
3509	3509	26 by Section 801 of the Internal Revenue Code, life
3510	3510
3511	3511
3512	3512
3513	3513
3514	3514
3515	3515	SB3489 - 97 - LRB103 35047 HLH 64992 b
3516	3516
3517	3517
3518	3518	SB3489- 98 -LRB103 35047 HLH 64992 b SB3489 - 98 - LRB103 35047 HLH 64992 b
3519	3519	SB3489 - 98 - LRB103 35047 HLH 64992 b
3520	3520	1 insurance company taxable income, plus the amount of
3521	3521	2 distribution from pre-1984 policyholder surplus
3522	3522	3 accounts as calculated under Section 815a of the
3523	3523	4 Internal Revenue Code;
3524	3524	5 (B) Certain other insurance companies. In the case
3525	3525	6 of mutual insurance companies subject to the tax
3526	3526	7 imposed by Section 831 of the Internal Revenue Code,
3527	3527	8 insurance company taxable income;
3528	3528	9 (C) Regulated investment companies. In the case of
3529	3529	10 a regulated investment company subject to the tax
3530	3530	11 imposed by Section 852 of the Internal Revenue Code,
3531	3531	12 investment company taxable income;
3532	3532	13 (D) Real estate investment trusts. In the case of
3533	3533	14 a real estate investment trust subject to the tax
3534	3534	15 imposed by Section 857 of the Internal Revenue Code,
3535	3535	16 real estate investment trust taxable income;
3536	3536	17 (E) Consolidated corporations. In the case of a
3537	3537	18 corporation which is a member of an affiliated group
3538	3538	19 of corporations filing a consolidated income tax
3539	3539	20 return for the taxable year for federal income tax
3540	3540	21 purposes, taxable income determined as if such
3541	3541	22 corporation had filed a separate return for federal
3542	3542	23 income tax purposes for the taxable year and each
3543	3543	24 preceding taxable year for which it was a member of an
3544	3544	25 affiliated group. For purposes of this subparagraph,
3545	3545	26 the taxpayer's separate taxable income shall be
3546	3546
3547	3547
3548	3548
3549	3549
3550	3550
3551	3551	SB3489 - 98 - LRB103 35047 HLH 64992 b
3552	3552
3553	3553
3554	3554	SB3489- 99 -LRB103 35047 HLH 64992 b SB3489 - 99 - LRB103 35047 HLH 64992 b
3555	3555	SB3489 - 99 - LRB103 35047 HLH 64992 b
3556	3556	1 determined as if the election provided by Section
3557	3557	2 243(b)(2) of the Internal Revenue Code had been in
3558	3558	3 effect for all such years;
3559	3559	4 (F) Cooperatives. In the case of a cooperative
3560	3560	5 corporation or association, the taxable income of such
3561	3561	6 organization determined in accordance with the
3562	3562	7 provisions of Section 1381 through 1388 of the
3563	3563	8 Internal Revenue Code, but without regard to the
3564	3564	9 prohibition against offsetting losses from patronage
3565	3565	10 activities against income from nonpatronage
3566	3566	11 activities; except that a cooperative corporation or
3567	3567	12 association may make an election to follow its federal
3568	3568	13 income tax treatment of patronage losses and
3569	3569	14 nonpatronage losses. In the event such election is
3570	3570	15 made, such losses shall be computed and carried over
3571	3571	16 in a manner consistent with subsection (a) of Section
3572	3572	17 207 of this Act and apportioned by the apportionment
3573	3573	18 factor reported by the cooperative on its Illinois
3574	3574	19 income tax return filed for the taxable year in which
3575	3575	20 the losses are incurred. The election shall be
3576	3576	21 effective for all taxable years with original returns
3577	3577	22 due on or after the date of the election. In addition,
3578	3578	23 the cooperative may file an amended return or returns,
3579	3579	24 as allowed under this Act, to provide that the
3580	3580	25 election shall be effective for losses incurred or
3581	3581	26 carried forward for taxable years occurring prior to
3582	3582
3583	3583
3584	3584
3585	3585
3586	3586
3587	3587	SB3489 - 99 - LRB103 35047 HLH 64992 b
3588	3588
3589	3589
3590	3590	SB3489- 100 -LRB103 35047 HLH 64992 b SB3489 - 100 - LRB103 35047 HLH 64992 b
3591	3591	SB3489 - 100 - LRB103 35047 HLH 64992 b
3592	3592	1 the date of the election. Once made, the election may
3593	3593	2 only be revoked upon approval of the Director. The
3594	3594	3 Department shall adopt rules setting forth
3595	3595	4 requirements for documenting the elections and any
3596	3596	5 resulting Illinois net loss and the standards to be
3597	3597	6 used by the Director in evaluating requests to revoke
3598	3598	7 elections. Public Act 96-932 is declaratory of
3599	3599	8 existing law;
3600	3600	9 (G) Subchapter S corporations. In the case of: (i)
3601	3601	10 a Subchapter S corporation for which there is in
3602	3602	11 effect an election for the taxable year under Section
3603	3603	12 1362 of the Internal Revenue Code, the taxable income
3604	3604	13 of such corporation determined in accordance with
3605	3605	14 Section 1363(b) of the Internal Revenue Code, except
3606	3606	15 that taxable income shall take into account those
3607	3607	16 items which are required by Section 1363(b)(1) of the
3608	3608	17 Internal Revenue Code to be separately stated; and
3609	3609	18 (ii) a Subchapter S corporation for which there is in
3610	3610	19 effect a federal election to opt out of the provisions
3611	3611	20 of the Subchapter S Revision Act of 1982 and have
3612	3612	21 applied instead the prior federal Subchapter S rules
3613	3613	22 as in effect on July 1, 1982, the taxable income of
3614	3614	23 such corporation determined in accordance with the
3615	3615	24 federal Subchapter S rules as in effect on July 1,
3616	3616	25 1982; and
3617	3617	26 (H) Partnerships. In the case of a partnership,
3618	3618
3619	3619
3620	3620
3621	3621
3622	3622
3623	3623	SB3489 - 100 - LRB103 35047 HLH 64992 b
3624	3624
3625	3625
3626	3626	SB3489- 101 -LRB103 35047 HLH 64992 b SB3489 - 101 - LRB103 35047 HLH 64992 b
3627	3627	SB3489 - 101 - LRB103 35047 HLH 64992 b
3628	3628	1 taxable income determined in accordance with Section
3629	3629	2 703 of the Internal Revenue Code, except that taxable
3630	3630	3 income shall take into account those items which are
3631	3631	4 required by Section 703(a)(1) to be separately stated
3632	3632	5 but which would be taken into account by an individual
3633	3633	6 in calculating his taxable income.
3634	3634	7 (3) Recapture of business expenses on disposition of
3635	3635	8 asset or business. Notwithstanding any other law to the
3636	3636	9 contrary, if in prior years income from an asset or
3637	3637	10 business has been classified as business income and in a
3638	3638	11 later year is demonstrated to be non-business income, then
3639	3639	12 all expenses, without limitation, deducted in such later
3640	3640	13 year and in the 2 immediately preceding taxable years
3641	3641	14 related to that asset or business that generated the
3642	3642	15 non-business income shall be added back and recaptured as
3643	3643	16 business income in the year of the disposition of the
3644	3644	17 asset or business. Such amount shall be apportioned to
3645	3645	18 Illinois using the greater of the apportionment fraction
3646	3646	19 computed for the business under Section 304 of this Act
3647	3647	20 for the taxable year or the average of the apportionment
3648	3648	21 fractions computed for the business under Section 304 of
3649	3649	22 this Act for the taxable year and for the 2 immediately
3650	3650	23 preceding taxable years.
3651	3651	24 (f) Valuation limitation amount.
3652	3652	25 (1) In general. The valuation limitation amount
3653	3653
3654	3654
3655	3655
3656	3656
3657	3657
3658	3658	SB3489 - 101 - LRB103 35047 HLH 64992 b
3659	3659
3660	3660
3661	3661	SB3489- 102 -LRB103 35047 HLH 64992 b SB3489 - 102 - LRB103 35047 HLH 64992 b
3662	3662	SB3489 - 102 - LRB103 35047 HLH 64992 b
3663	3663	1 referred to in subsections (a)(2)(G), (c)(2)(I) and
3664	3664	2 (d)(2)(E) is an amount equal to:
3665	3665	3 (A) The sum of the pre-August 1, 1969 appreciation
3666	3666	4 amounts (to the extent consisting of gain reportable
3667	3667	5 under the provisions of Section 1245 or 1250 of the
3668	3668	6 Internal Revenue Code) for all property in respect of
3669	3669	7 which such gain was reported for the taxable year;
3670	3670	8 plus
3671	3671	9 (B) The lesser of (i) the sum of the pre-August 1,
3672	3672	10 1969 appreciation amounts (to the extent consisting of
3673	3673	11 capital gain) for all property in respect of which
3674	3674	12 such gain was reported for federal income tax purposes
3675	3675	13 for the taxable year, or (ii) the net capital gain for
3676	3676	14 the taxable year, reduced in either case by any amount
3677	3677	15 of such gain included in the amount determined under
3678	3678	16 subsection (a)(2)(F) or (c)(2)(H).
3679	3679	17 (2) Pre-August 1, 1969 appreciation amount.
3680	3680	18 (A) If the fair market value of property referred
3681	3681	19 to in paragraph (1) was readily ascertainable on
3682	3682	20 August 1, 1969, the pre-August 1, 1969 appreciation
3683	3683	21 amount for such property is the lesser of (i) the
3684	3684	22 excess of such fair market value over the taxpayer's
3685	3685	23 basis (for determining gain) for such property on that
3686	3686	24 date (determined under the Internal Revenue Code as in
3687	3687	25 effect on that date), or (ii) the total gain realized
3688	3688	26 and reportable for federal income tax purposes in
3689	3689
3690	3690
3691	3691
3692	3692
3693	3693
3694	3694	SB3489 - 102 - LRB103 35047 HLH 64992 b
3695	3695
3696	3696
3697	3697	SB3489- 103 -LRB103 35047 HLH 64992 b SB3489 - 103 - LRB103 35047 HLH 64992 b
3698	3698	SB3489 - 103 - LRB103 35047 HLH 64992 b
3699	3699	1 respect of the sale, exchange or other disposition of
3700	3700	2 such property.
3701	3701	3 (B) If the fair market value of property referred
3702	3702	4 to in paragraph (1) was not readily ascertainable on
3703	3703	5 August 1, 1969, the pre-August 1, 1969 appreciation
3704	3704	6 amount for such property is that amount which bears
3705	3705	7 the same ratio to the total gain reported in respect of
3706	3706	8 the property for federal income tax purposes for the
3707	3707	9 taxable year, as the number of full calendar months in
3708	3708	10 that part of the taxpayer's holding period for the
3709	3709	11 property ending July 31, 1969 bears to the number of
3710	3710	12 full calendar months in the taxpayer's entire holding
3711	3711	13 period for the property.
3712	3712	14 (C) The Department shall prescribe such
3713	3713	15 regulations as may be necessary to carry out the
3714	3714	16 purposes of this paragraph.
3715	3715	17 (g) Double deductions. Unless specifically provided
3716	3716	18 otherwise, nothing in this Section shall permit the same item
3717	3717	19 to be deducted more than once.
3718	3718	20 (h) Legislative intention. Except as expressly provided by
3719	3719	21 this Section there shall be no modifications or limitations on
3720	3720	22 the amounts of income, gain, loss or deduction taken into
3721	3721	23 account in determining gross income, adjusted gross income or
3722	3722	24 taxable income for federal income tax purposes for the taxable
3723	3723
3724	3724
3725	3725
3726	3726
3727	3727
3728	3728	SB3489 - 103 - LRB103 35047 HLH 64992 b
3729	3729
3730	3730
3731	3731	SB3489- 104 -LRB103 35047 HLH 64992 b SB3489 - 104 - LRB103 35047 HLH 64992 b
3732	3732	SB3489 - 104 - LRB103 35047 HLH 64992 b
3733	3733	1 year, or in the amount of such items entering into the
3734	3734	2 computation of base income and net income under this Act for
3735	3735	3 such taxable year, whether in respect of property values as of
3736	3736	4 August 1, 1969 or otherwise.
3737	3737	5 (Source: P.A. 101-9, eff. 6-5-19; 101-81, eff. 7-12-19;
3738	3738	6 102-16, eff. 6-17-21; 102-558, eff. 8-20-21; 102-658, eff.
3739	3739	7 8-27-21; 102-813, eff. 5-13-22; 102-1112, eff. 12-21-22.)
3740	3740
3741	3741
3742	3742
3743	3743
3744	3744
3745	3745	SB3489 - 104 - LRB103 35047 HLH 64992 b