Illinois 2025-2026 Regular Session

Illinois House Bill HB2609 Compare Versions

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

Old	New	Differences
1	1	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB2609 Introduced , by Rep. Adam M. Niemerg SYNOPSIS AS INTRODUCED: 35 ILCS 5/201 Amends the Illinois Income Tax Act. Reduces the rate of tax on corporations from 7% to 5.5%. Effective immediately. LRB104 10355 HLH 20429 b A BILL FOR 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB2609 Introduced , by Rep. Adam M. Niemerg SYNOPSIS AS INTRODUCED: 35 ILCS 5/201 35 ILCS 5/201 Amends the Illinois Income Tax Act. Reduces the rate of tax on corporations from 7% to 5.5%. Effective immediately. LRB104 10355 HLH 20429 b LRB104 10355 HLH 20429 b A BILL FOR
2	2	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB2609 Introduced , by Rep. Adam M. Niemerg SYNOPSIS AS INTRODUCED:
3	3	35 ILCS 5/201 35 ILCS 5/201
4	4	35 ILCS 5/201
5	5	Amends the Illinois Income Tax Act. Reduces the rate of tax on corporations from 7% to 5.5%. Effective immediately.
6	6	LRB104 10355 HLH 20429 b LRB104 10355 HLH 20429 b
7	7	LRB104 10355 HLH 20429 b
8	8	A BILL FOR
9	9	HB2609LRB104 10355 HLH 20429 b HB2609 LRB104 10355 HLH 20429 b
10	10	HB2609 LRB104 10355 HLH 20429 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 201 as follows:
16	16	6 (35 ILCS 5/201)
17	17	7 Sec. 201. Tax imposed.
18	18	8 (a) In general. A tax measured by net income is hereby
19	19	9 imposed on every individual, corporation, trust and estate for
20	20	10 each taxable year ending after July 31, 1969 on the privilege
21	21	11 of earning or receiving income in or as a resident of this
22	22	12 State. Such tax shall be in addition to all other occupation or
23	23	13 privilege taxes imposed by this State or by any municipal
24	24	14 corporation or political subdivision thereof.
25	25	15 (b) Rates. The tax imposed by subsection (a) of this
26	26	16 Section shall be determined as follows, except as adjusted by
27	27	17 subsection (d-1):
28	28	18 (1) In the case of an individual, trust or estate, for
29	29	19 taxable years ending prior to July 1, 1989, an amount
30	30	20 equal to 2 1/2% of the taxpayer's net income for the
31	31	21 taxable year.
32	32	22 (2) In the case of an individual, trust or estate, for
33	33	23 taxable years beginning prior to July 1, 1989 and ending
34	34
35	35
36	36
37	37	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB2609 Introduced , by Rep. Adam M. Niemerg SYNOPSIS AS INTRODUCED:
38	38	35 ILCS 5/201 35 ILCS 5/201
39	39	35 ILCS 5/201
40	40	Amends the Illinois Income Tax Act. Reduces the rate of tax on corporations from 7% to 5.5%. Effective immediately.
41	41	LRB104 10355 HLH 20429 b LRB104 10355 HLH 20429 b
42	42	LRB104 10355 HLH 20429 b
43	43	A BILL FOR
44	44
45	45
46	46
47	47
48	48
49	49	35 ILCS 5/201
50	50
51	51
52	52
53	53	LRB104 10355 HLH 20429 b
54	54
55	55
56	56
57	57
58	58
59	59
60	60
61	61
62	62
63	63	HB2609 LRB104 10355 HLH 20429 b
64	64
65	65
66	66	HB2609- 2 -LRB104 10355 HLH 20429 b HB2609 - 2 - LRB104 10355 HLH 20429 b
67	67	HB2609 - 2 - LRB104 10355 HLH 20429 b
68	68	1 after June 30, 1989, an amount equal to the sum of (i) 2
69	69	2 1/2% of the taxpayer's net income for the period prior to
70	70	3 July 1, 1989, as calculated under Section 202.3, and (ii)
71	71	4 3% of the taxpayer's net income for the period after June
72	72	5 30, 1989, as calculated under Section 202.3.
73	73	6 (3) In the case of an individual, trust or estate, for
74	74	7 taxable years beginning after June 30, 1989, and ending
75	75	8 prior to January 1, 2011, an amount equal to 3% of the
76	76	9 taxpayer's net income for the taxable year.
77	77	10 (4) In the case of an individual, trust, or estate,
78	78	11 for taxable years beginning prior to January 1, 2011, and
79	79	12 ending after December 31, 2010, an amount equal to the sum
80	80	13 of (i) 3% of the taxpayer's net income for the period prior
81	81	14 to January 1, 2011, as calculated under Section 202.5, and
82	82	15 (ii) 5% of the taxpayer's net income for the period after
83	83	16 December 31, 2010, as calculated under Section 202.5.
84	84	17 (5) In the case of an individual, trust, or estate,
85	85	18 for taxable years beginning on or after January 1, 2011,
86	86	19 and ending prior to January 1, 2015, an amount equal to 5%
87	87	20 of the taxpayer's net income for the taxable year.
88	88	21 (5.1) In the case of an individual, trust, or estate,
89	89	22 for taxable years beginning prior to January 1, 2015, and
90	90	23 ending after December 31, 2014, an amount equal to the sum
91	91	24 of (i) 5% of the taxpayer's net income for the period prior
92	92	25 to January 1, 2015, as calculated under Section 202.5, and
93	93	26 (ii) 3.75% of the taxpayer's net income for the period
94	94
95	95
96	96
97	97
98	98
99	99	HB2609 - 2 - LRB104 10355 HLH 20429 b
100	100
101	101
102	102	HB2609- 3 -LRB104 10355 HLH 20429 b HB2609 - 3 - LRB104 10355 HLH 20429 b
103	103	HB2609 - 3 - LRB104 10355 HLH 20429 b
104	104	1 after December 31, 2014, as calculated under Section
105	105	2 202.5.
106	106	3 (5.2) In the case of an individual, trust, or estate,
107	107	4 for taxable years beginning on or after January 1, 2015,
108	108	5 and ending prior to July 1, 2017, an amount equal to 3.75%
109	109	6 of the taxpayer's net income for the taxable year.
110	110	7 (5.3) In the case of an individual, trust, or estate,
111	111	8 for taxable years beginning prior to July 1, 2017, and
112	112	9 ending after June 30, 2017, an amount equal to the sum of
113	113	10 (i) 3.75% of the taxpayer's net income for the period
114	114	11 prior to July 1, 2017, as calculated under Section 202.5,
115	115	12 and (ii) 4.95% of the taxpayer's net income for the period
116	116	13 after June 30, 2017, as calculated under Section 202.5.
117	117	14 (5.4) In the case of an individual, trust, or estate,
118	118	15 for taxable years beginning on or after July 1, 2017, an
119	119	16 amount equal to 4.95% of the taxpayer's net income for the
120	120	17 taxable year.
121	121	18 (6) In the case of a corporation, for taxable years
122	122	19 ending prior to July 1, 1989, an amount equal to 4% of the
123	123	20 taxpayer's net income for the taxable year.
124	124	21 (7) In the case of a corporation, for taxable years
125	125	22 beginning prior to July 1, 1989 and ending after June 30,
126	126	23 1989, an amount equal to the sum of (i) 4% of the
127	127	24 taxpayer's net income for the period prior to July 1,
128	128	25 1989, as calculated under Section 202.3, and (ii) 4.8% of
129	129	26 the taxpayer's net income for the period after June 30,
130	130
131	131
132	132
133	133
134	134
135	135	HB2609 - 3 - LRB104 10355 HLH 20429 b
136	136
137	137
138	138	HB2609- 4 -LRB104 10355 HLH 20429 b HB2609 - 4 - LRB104 10355 HLH 20429 b
139	139	HB2609 - 4 - LRB104 10355 HLH 20429 b
140	140	1 1989, as calculated under Section 202.3.
141	141	2 (8) In the case of a corporation, for taxable years
142	142	3 beginning after June 30, 1989, and ending prior to January
143	143	4 1, 2011, an amount equal to 4.8% of the taxpayer's net
144	144	5 income for the taxable year.
145	145	6 (9) In the case of a corporation, for taxable years
146	146	7 beginning prior to January 1, 2011, and ending after
147	147	8 December 31, 2010, an amount equal to the sum of (i) 4.8%
148	148	9 of the taxpayer's net income for the period prior to
149	149	10 January 1, 2011, as calculated under Section 202.5, and
150	150	11 (ii) 7% of the taxpayer's net income for the period after
151	151	12 December 31, 2010, as calculated under Section 202.5.
152	152	13 (10) In the case of a corporation, for taxable years
153	153	14 beginning on or after January 1, 2011, and ending prior to
154	154	15 January 1, 2015, an amount equal to 7% of the taxpayer's
155	155	16 net income for the taxable year.
156	156	17 (11) In the case of a corporation, for taxable years
157	157	18 beginning prior to January 1, 2015, and ending after
158	158	19 December 31, 2014, an amount equal to the sum of (i) 7% of
159	159	20 the taxpayer's net income for the period prior to January
160	160	21 1, 2015, as calculated under Section 202.5, and (ii) 5.25%
161	161	22 of the taxpayer's net income for the period after December
162	162	23 31, 2014, as calculated under Section 202.5.
163	163	24 (12) In the case of a corporation, for taxable years
164	164	25 beginning on or after January 1, 2015, and ending prior to
165	165	26 July 1, 2017, an amount equal to 5.25% of the taxpayer's
166	166
167	167
168	168
169	169
170	170
171	171	HB2609 - 4 - LRB104 10355 HLH 20429 b
172	172
173	173
174	174	HB2609- 5 -LRB104 10355 HLH 20429 b HB2609 - 5 - LRB104 10355 HLH 20429 b
175	175	HB2609 - 5 - LRB104 10355 HLH 20429 b
176	176	1 net income for the taxable year.
177	177	2 (13) In the case of a corporation, for taxable years
178	178	3 beginning prior to July 1, 2017, and ending after June 30,
179	179	4 2017, an amount equal to the sum of (i) 5.25% of the
180	180	5 taxpayer's net income for the period prior to July 1,
181	181	6 2017, as calculated under Section 202.5, and (ii) 7% of
182	182	7 the taxpayer's net income for the period after June 30,
183	183	8 2017, as calculated under Section 202.5.
184	184	9 (14) In the case of a corporation, for taxable years
185	185	10 beginning on or after July 1, 2017 and ending prior to
186	186	11 January 1, 2025, an amount equal to 7% of the taxpayer's
187	187	12 net income for the taxable year.
188	188	13 (15) In the case of a corporation, for taxable years
189	189	14 beginning prior to January 1, 2025, and ending after
190	190	15 December 31, 2024, an amount equal to the sum of (i) 7% of
191	191	16 the taxpayer's net income for the period prior to January
192	192	17 1, 2025, as calculated under Section 202.5, and (ii) 5.5%
193	193	18 of the taxpayer's net income for the period after December
194	194	19 31, 2024, as calculated under Section 202.5.
195	195	20 (16) In the case of a corporation, for taxable years
196	196	21 beginning on or after January 1, 2025, an amount equal to
197	197	22 5.5% of the taxpayer's net income for the taxable year.
198	198	23 The rates under this subsection (b) are subject to the
199	199	24 provisions of Section 201.5.
200	200	25 (b-5) Surcharge; sale or exchange of assets, properties,
201	201	26 and intangibles of organization gaming licensees. For each of
202	202
203	203
204	204
205	205
206	206
207	207	HB2609 - 5 - LRB104 10355 HLH 20429 b
208	208
209	209
210	210	HB2609- 6 -LRB104 10355 HLH 20429 b HB2609 - 6 - LRB104 10355 HLH 20429 b
211	211	HB2609 - 6 - LRB104 10355 HLH 20429 b
212	212	1 taxable years 2019 through 2027, a surcharge is imposed on all
213	213	2 taxpayers on income arising from the sale or exchange of
214	214	3 capital assets, depreciable business property, real property
215	215	4 used in the trade or business, and Section 197 intangibles (i)
216	216	5 of an organization licensee under the Illinois Horse Racing
217	217	6 Act of 1975 and (ii) of an organization gaming licensee under
218	218	7 the Illinois Gambling Act. The amount of the surcharge is
219	219	8 equal to the amount of federal income tax liability for the
220	220	9 taxable year attributable to those sales and exchanges. The
221	221	10 surcharge imposed shall not apply if:
222	222	11 (1) the organization gaming license, organization
223	223	12 license, or racetrack property is transferred as a result
224	224	13 of any of the following:
225	225	14 (A) bankruptcy, a receivership, or a debt
226	226	15 adjustment initiated by or against the initial
227	227	16 licensee or the substantial owners of the initial
228	228	17 licensee;
229	229	18 (B) cancellation, revocation, or termination of
230	230	19 any such license by the Illinois Gaming Board or the
231	231	20 Illinois Racing Board;
232	232	21 (C) a determination by the Illinois Gaming Board
233	233	22 that transfer of the license is in the best interests
234	234	23 of Illinois gaming;
235	235	24 (D) the death of an owner of the equity interest in
236	236	25 a licensee;
237	237	26 (E) the acquisition of a controlling interest in
238	238
239	239
240	240
241	241
242	242
243	243	HB2609 - 6 - LRB104 10355 HLH 20429 b
244	244
245	245
246	246	HB2609- 7 -LRB104 10355 HLH 20429 b HB2609 - 7 - LRB104 10355 HLH 20429 b
247	247	HB2609 - 7 - LRB104 10355 HLH 20429 b
248	248	1 the stock or substantially all of the assets of a
249	249	2 publicly traded company;
250	250	3 (F) a transfer by a parent company to a wholly
251	251	4 owned subsidiary; or
252	252	5 (G) the transfer or sale to or by one person to
253	253	6 another person where both persons were initial owners
254	254	7 of the license when the license was issued; or
255	255	8 (2) the controlling interest in the organization
256	256	9 gaming license, organization license, or racetrack
257	257	10 property is transferred in a transaction to lineal
258	258	11 descendants in which no gain or loss is recognized or as a
259	259	12 result of a transaction in accordance with Section 351 of
260	260	13 the Internal Revenue Code in which no gain or loss is
261	261	14 recognized; or
262	262	15 (3) live horse racing was not conducted in 2010 at a
263	263	16 racetrack located within 3 miles of the Mississippi River
264	264	17 under a license issued pursuant to the Illinois Horse
265	265	18 Racing Act of 1975.
266	266	19 The transfer of an organization gaming license,
267	267	20 organization license, or racetrack property by a person other
268	268	21 than the initial licensee to receive the organization gaming
269	269	22 license is not subject to a surcharge. The Department shall
270	270	23 adopt rules necessary to implement and administer this
271	271	24 subsection.
272	272	25 (c) Personal Property Tax Replacement Income Tax.
273	273	26 Beginning on July 1, 1979 and thereafter, in addition to such
274	274
275	275
276	276
277	277
278	278
279	279	HB2609 - 7 - LRB104 10355 HLH 20429 b
280	280
281	281
282	282	HB2609- 8 -LRB104 10355 HLH 20429 b HB2609 - 8 - LRB104 10355 HLH 20429 b
283	283	HB2609 - 8 - LRB104 10355 HLH 20429 b
284	284	1 income tax, there is also hereby imposed the Personal Property
285	285	2 Tax Replacement Income Tax measured by net income on every
286	286	3 corporation (including Subchapter S corporations), partnership
287	287	4 and trust, for each taxable year ending after June 30, 1979.
288	288	5 Such taxes are imposed on the privilege of earning or
289	289	6 receiving income in or as a resident of this State. The
290	290	7 Personal Property Tax Replacement Income Tax shall be in
291	291	8 addition to the income tax imposed by subsections (a) and (b)
292	292	9 of this Section and in addition to all other occupation or
293	293	10 privilege taxes imposed by this State or by any municipal
294	294	11 corporation or political subdivision thereof.
295	295	12 (d) Additional Personal Property Tax Replacement Income
296	296	13 Tax Rates. The personal property tax replacement income tax
297	297	14 imposed by this subsection and subsection (c) of this Section
298	298	15 in the case of a corporation, other than a Subchapter S
299	299	16 corporation and except as adjusted by subsection (d-1), shall
300	300	17 be an additional amount equal to 2.85% of such taxpayer's net
301	301	18 income for the taxable year, except that beginning on January
302	302	19 1, 1981, and thereafter, the rate of 2.85% specified in this
303	303	20 subsection shall be reduced to 2.5%, and in the case of a
304	304	21 partnership, trust or a Subchapter S corporation shall be an
305	305	22 additional amount equal to 1.5% of such taxpayer's net income
306	306	23 for the taxable year.
307	307	24 (d-1) Rate reduction for certain foreign insurers. In the
308	308	25 case of a foreign insurer, as defined by Section 35A-5 of the
309	309	26 Illinois Insurance Code, whose state or country of domicile
310	310
311	311
312	312
313	313
314	314
315	315	HB2609 - 8 - LRB104 10355 HLH 20429 b
316	316
317	317
318	318	HB2609- 9 -LRB104 10355 HLH 20429 b HB2609 - 9 - LRB104 10355 HLH 20429 b
319	319	HB2609 - 9 - LRB104 10355 HLH 20429 b
320	320	1 imposes on insurers domiciled in Illinois a retaliatory tax
321	321	2 (excluding any insurer whose premiums from reinsurance assumed
322	322	3 are 50% or more of its total insurance premiums as determined
323	323	4 under paragraph (2) of subsection (b) of Section 304, except
324	324	5 that for purposes of this determination premiums from
325	325	6 reinsurance do not include premiums from inter-affiliate
326	326	7 reinsurance arrangements), beginning with taxable years ending
327	327	8 on or after December 31, 1999, the sum of the rates of tax
328	328	9 imposed by subsections (b) and (d) shall be reduced (but not
329	329	10 increased) to the rate at which the total amount of tax imposed
330	330	11 under this Act, net of all credits allowed under this Act,
331	331	12 shall equal (i) the total amount of tax that would be imposed
332	332	13 on the foreign insurer's net income allocable to Illinois for
333	333	14 the taxable year by such foreign insurer's state or country of
334	334	15 domicile if that net income were subject to all income taxes
335	335	16 and taxes measured by net income imposed by such foreign
336	336	17 insurer's state or country of domicile, net of all credits
337	337	18 allowed or (ii) a rate of zero if no such tax is imposed on
338	338	19 such income by the foreign insurer's state of domicile. For
339	339	20 the purposes of this subsection (d-1), an inter-affiliate
340	340	21 includes a mutual insurer under common management.
341	341	22 (1) For the purposes of subsection (d-1), in no event
342	342	23 shall the sum of the rates of tax imposed by subsections
343	343	24 (b) and (d) be reduced below the rate at which the sum of:
344	344	25 (A) the total amount of tax imposed on such
345	345	26 foreign insurer under this Act for a taxable year, net
346	346
347	347
348	348
349	349
350	350
351	351	HB2609 - 9 - LRB104 10355 HLH 20429 b
352	352
353	353
354	354	HB2609- 10 -LRB104 10355 HLH 20429 b HB2609 - 10 - LRB104 10355 HLH 20429 b
355	355	HB2609 - 10 - LRB104 10355 HLH 20429 b
356	356	1 of all credits allowed under this Act, plus
357	357	2 (B) the privilege tax imposed by Section 409 of
358	358	3 the Illinois Insurance Code, the fire insurance
359	359	4 company tax imposed by Section 12 of the Fire
360	360	5 Investigation Act, and the fire department taxes
361	361	6 imposed under Section 11-10-1 of the Illinois
362	362	7 Municipal Code,
363	363	8 equals 1.25% for taxable years ending prior to December
364	364	9 31, 2003, or 1.75% for taxable years ending on or after
365	365	10 December 31, 2003, of the net taxable premiums written for
366	366	11 the taxable year, as described by subsection (1) of
367	367	12 Section 409 of the Illinois Insurance Code. This paragraph
368	368	13 will in no event increase the rates imposed under
369	369	14 subsections (b) and (d).
370	370	15 (2) Any reduction in the rates of tax imposed by this
371	371	16 subsection shall be applied first against the rates
372	372	17 imposed by subsection (b) and only after the tax imposed
373	373	18 by subsection (a) net of all credits allowed under this
374	374	19 Section other than the credit allowed under subsection (i)
375	375	20 has been reduced to zero, against the rates imposed by
376	376	21 subsection (d).
377	377	22 This subsection (d-1) is exempt from the provisions of
378	378	23 Section 250.
379	379	24 (e) Investment credit. A taxpayer shall be allowed a
380	380	25 credit against the Personal Property Tax Replacement Income
381	381	26 Tax for investment in qualified property.
382	382
383	383
384	384
385	385
386	386
387	387	HB2609 - 10 - LRB104 10355 HLH 20429 b
388	388
389	389
390	390	HB2609- 11 -LRB104 10355 HLH 20429 b HB2609 - 11 - LRB104 10355 HLH 20429 b
391	391	HB2609 - 11 - LRB104 10355 HLH 20429 b
392	392	1 (1) A taxpayer shall be allowed a credit equal to .5%
393	393	2 of the basis of qualified property placed in service
394	394	3 during the taxable year, provided such property is placed
395	395	4 in service on or after July 1, 1984. There shall be allowed
396	396	5 an additional credit equal to .5% of the basis of
397	397	6 qualified property placed in service during the taxable
398	398	7 year, provided such property is placed in service on or
399	399	8 after July 1, 1986, and the taxpayer's base employment
400	400	9 within Illinois has increased by 1% or more over the
401	401	10 preceding year as determined by the taxpayer's employment
402	402	11 records filed with the Illinois Department of Employment
403	403	12 Security. Taxpayers who are new to Illinois shall be
404	404	13 deemed to have met the 1% growth in base employment for the
405	405	14 first year in which they file employment records with the
406	406	15 Illinois Department of Employment Security. The provisions
407	407	16 added to this Section by Public Act 85-1200 (and restored
408	408	17 by Public Act 87-895) shall be construed as declaratory of
409	409	18 existing law and not as a new enactment. If, in any year,
410	410	19 the increase in base employment within Illinois over the
411	411	20 preceding year is less than 1%, the additional credit
412	412	21 shall be limited to that percentage times a fraction, the
413	413	22 numerator of which is .5% and the denominator of which is
414	414	23 1%, but shall not exceed .5%. The investment credit shall
415	415	24 not be allowed to the extent that it would reduce a
416	416	25 taxpayer's liability in any tax year below zero, nor may
417	417	26 any credit for qualified property be allowed for any year
418	418
419	419
420	420
421	421
422	422
423	423	HB2609 - 11 - LRB104 10355 HLH 20429 b
424	424
425	425
426	426	HB2609- 12 -LRB104 10355 HLH 20429 b HB2609 - 12 - LRB104 10355 HLH 20429 b
427	427	HB2609 - 12 - LRB104 10355 HLH 20429 b
428	428	1 other than the year in which the property was placed in
429	429	2 service in Illinois. For tax years ending on or after
430	430	3 December 31, 1987, and on or before December 31, 1988, the
431	431	4 credit shall be allowed for the tax year in which the
432	432	5 property is placed in service, or, if the amount of the
433	433	6 credit exceeds the tax liability for that year, whether it
434	434	7 exceeds the original liability or the liability as later
435	435	8 amended, such excess may be carried forward and applied to
436	436	9 the tax liability of the 5 taxable years following the
437	437	10 excess credit years if the taxpayer (i) makes investments
438	438	11 which cause the creation of a minimum of 2,000 full-time
439	439	12 equivalent jobs in Illinois, (ii) is located in an
440	440	13 enterprise zone established pursuant to the Illinois
441	441	14 Enterprise Zone Act and (iii) is certified by the
442	442	15 Department of Commerce and Community Affairs (now
443	443	16 Department of Commerce and Economic Opportunity) as
444	444	17 complying with the requirements specified in clause (i)
445	445	18 and (ii) by July 1, 1986. The Department of Commerce and
446	446	19 Community Affairs (now Department of Commerce and Economic
447	447	20 Opportunity) shall notify the Department of Revenue of all
448	448	21 such certifications immediately. For tax years ending
449	449	22 after December 31, 1988, the credit shall be allowed for
450	450	23 the tax year in which the property is placed in service,
451	451	24 or, if the amount of the credit exceeds the tax liability
452	452	25 for that year, whether it exceeds the original liability
453	453	26 or the liability as later amended, such excess may be
454	454
455	455
456	456
457	457
458	458
459	459	HB2609 - 12 - LRB104 10355 HLH 20429 b
460	460
461	461
462	462	HB2609- 13 -LRB104 10355 HLH 20429 b HB2609 - 13 - LRB104 10355 HLH 20429 b
463	463	HB2609 - 13 - LRB104 10355 HLH 20429 b
464	464	1 carried forward and applied to the tax liability of the 5
465	465	2 taxable years following the excess credit years. The
466	466	3 credit shall be applied to the earliest year for which
467	467	4 there is a liability. If there is credit from more than one
468	468	5 tax year that is available to offset a liability, earlier
469	469	6 credit shall be applied first.
470	470	7 (2) The term "qualified property" means property
471	471	8 which:
472	472	9 (A) is tangible, whether new or used, including
473	473	10 buildings and structural components of buildings and
474	474	11 signs that are real property, but not including land
475	475	12 or improvements to real property that are not a
476	476	13 structural component of a building such as
477	477	14 landscaping, sewer lines, local access roads, fencing,
478	478	15 parking lots, and other appurtenances;
479	479	16 (B) is depreciable pursuant to Section 167 of the
480	480	17 Internal Revenue Code, except that "3-year property"
481	481	18 as defined in Section 168(c)(2)(A) of that Code is not
482	482	19 eligible for the credit provided by this subsection
483	483	20 (e);
484	484	21 (C) is acquired by purchase as defined in Section
485	485	22 179(d) of the Internal Revenue Code;
486	486	23 (D) is used in Illinois by a taxpayer who is
487	487	24 primarily engaged in manufacturing, or in mining coal
488	488	25 or fluorite, or in retailing, or was placed in service
489	489	26 on or after July 1, 2006 in a River Edge Redevelopment
490	490
491	491
492	492
493	493
494	494
495	495	HB2609 - 13 - LRB104 10355 HLH 20429 b
496	496
497	497
498	498	HB2609- 14 -LRB104 10355 HLH 20429 b HB2609 - 14 - LRB104 10355 HLH 20429 b
499	499	HB2609 - 14 - LRB104 10355 HLH 20429 b
500	500	1 Zone established pursuant to the River Edge
501	501	2 Redevelopment Zone Act; and
502	502	3 (E) has not previously been used in Illinois in
503	503	4 such a manner and by such a person as would qualify for
504	504	5 the credit provided by this subsection (e) or
505	505	6 subsection (f).
506	506	7 (3) For purposes of this subsection (e),
507	507	8 "manufacturing" means the material staging and production
508	508	9 of tangible personal property by procedures commonly
509	509	10 regarded as manufacturing, processing, fabrication, or
510	510	11 assembling which changes some existing material into new
511	511	12 shapes, new qualities, or new combinations. For purposes
512	512	13 of this subsection (e) the term "mining" shall have the
513	513	14 same meaning as the term "mining" in Section 613(c) of the
514	514	15 Internal Revenue Code. For purposes of this subsection
515	515	16 (e), the term "retailing" means the sale of tangible
516	516	17 personal property for use or consumption and not for
517	517	18 resale, or services rendered in conjunction with the sale
518	518	19 of tangible personal property for use or consumption and
519	519	20 not for resale. For purposes of this subsection (e),
520	520	21 "tangible personal property" has the same meaning as when
521	521	22 that term is used in the Retailers' Occupation Tax Act,
522	522	23 and, for taxable years ending after December 31, 2008,
523	523	24 does not include the generation, transmission, or
524	524	25 distribution of electricity.
525	525	26 (4) The basis of qualified property shall be the basis
526	526
527	527
528	528
529	529
530	530
531	531	HB2609 - 14 - LRB104 10355 HLH 20429 b
532	532
533	533
534	534	HB2609- 15 -LRB104 10355 HLH 20429 b HB2609 - 15 - LRB104 10355 HLH 20429 b
535	535	HB2609 - 15 - LRB104 10355 HLH 20429 b
536	536	1 used to compute the depreciation deduction for federal
537	537	2 income tax purposes.
538	538	3 (5) If the basis of the property for federal income
539	539	4 tax depreciation purposes is increased after it has been
540	540	5 placed in service in Illinois by the taxpayer, the amount
541	541	6 of such increase shall be deemed property placed in
542	542	7 service on the date of such increase in basis.
543	543	8 (6) The term "placed in service" shall have the same
544	544	9 meaning as under Section 46 of the Internal Revenue Code.
545	545	10 (7) If during any taxable year, any property ceases to
546	546	11 be qualified property in the hands of the taxpayer within
547	547	12 48 months after being placed in service, or the situs of
548	548	13 any qualified property is moved outside Illinois within 48
549	549	14 months after being placed in service, the Personal
550	550	15 Property Tax Replacement Income Tax for such taxable year
551	551	16 shall be increased. Such increase shall be determined by
552	552	17 (i) recomputing the investment credit which would have
553	553	18 been allowed for the year in which credit for such
554	554	19 property was originally allowed by eliminating such
555	555	20 property from such computation and, (ii) subtracting such
556	556	21 recomputed credit from the amount of credit previously
557	557	22 allowed. For the purposes of this paragraph (7), a
558	558	23 reduction of the basis of qualified property resulting
559	559	24 from a redetermination of the purchase price shall be
560	560	25 deemed a disposition of qualified property to the extent
561	561	26 of such reduction.
562	562
563	563
564	564
565	565
566	566
567	567	HB2609 - 15 - LRB104 10355 HLH 20429 b
568	568
569	569
570	570	HB2609- 16 -LRB104 10355 HLH 20429 b HB2609 - 16 - LRB104 10355 HLH 20429 b
571	571	HB2609 - 16 - LRB104 10355 HLH 20429 b
572	572	1 (8) Unless the investment credit is extended by law,
573	573	2 the basis of qualified property shall not include costs
574	574	3 incurred after December 31, 2018, except for costs
575	575	4 incurred pursuant to a binding contract entered into on or
576	576	5 before December 31, 2018.
577	577	6 (9) Each taxable year ending before December 31, 2000,
578	578	7 a partnership may elect to pass through to its partners
579	579	8 the credits to which the partnership is entitled under
580	580	9 this subsection (e) for the taxable year. A partner may
581	581	10 use the credit allocated to him or her under this
582	582	11 paragraph only against the tax imposed in subsections (c)
583	583	12 and (d) of this Section. If the partnership makes that
584	584	13 election, those credits shall be allocated among the
585	585	14 partners in the partnership in accordance with the rules
586	586	15 set forth in Section 704(b) of the Internal Revenue Code,
587	587	16 and the rules promulgated under that Section, and the
588	588	17 allocated amount of the credits shall be allowed to the
589	589	18 partners for that taxable year. The partnership shall make
590	590	19 this election on its Personal Property Tax Replacement
591	591	20 Income Tax return for that taxable year. The election to
592	592	21 pass through the credits shall be irrevocable.
593	593	22 For taxable years ending on or after December 31,
594	594	23 2000, a partner that qualifies its partnership for a
595	595	24 subtraction under subparagraph (I) of paragraph (2) of
596	596	25 subsection (d) of Section 203 or a shareholder that
597	597	26 qualifies a Subchapter S corporation for a subtraction
598	598
599	599
600	600
601	601
602	602
603	603	HB2609 - 16 - LRB104 10355 HLH 20429 b
604	604
605	605
606	606	HB2609- 17 -LRB104 10355 HLH 20429 b HB2609 - 17 - LRB104 10355 HLH 20429 b
607	607	HB2609 - 17 - LRB104 10355 HLH 20429 b
608	608	1 under subparagraph (S) of paragraph (2) of subsection (b)
609	609	2 of Section 203 shall be allowed a credit under this
610	610	3 subsection (e) equal to its share of the credit earned
611	611	4 under this subsection (e) during the taxable year by the
612	612	5 partnership or Subchapter S corporation, determined in
613	613	6 accordance with the determination of income and
614	614	7 distributive share of income under Sections 702 and 704
615	615	8 and Subchapter S of the Internal Revenue Code. This
616	616	9 paragraph is exempt from the provisions of Section 250.
617	617	10 (f) Investment credit; Enterprise Zone; River Edge
618	618	11 Redevelopment Zone.
619	619	12 (1) A taxpayer shall be allowed a credit against the
620	620	13 tax imposed by subsections (a) and (b) of this Section for
621	621	14 investment in qualified property which is placed in
622	622	15 service in an Enterprise Zone created pursuant to the
623	623	16 Illinois Enterprise Zone Act or, for property placed in
624	624	17 service on or after July 1, 2006, a River Edge
625	625	18 Redevelopment Zone established pursuant to the River Edge
626	626	19 Redevelopment Zone Act. For partners, shareholders of
627	627	20 Subchapter S corporations, and owners of limited liability
628	628	21 companies, if the liability company is treated as a
629	629	22 partnership for purposes of federal and State income
630	630	23 taxation, for taxable years ending before December 31,
631	631	24 2023, there shall be allowed a credit under this
632	632	25 subsection (f) to be determined in accordance with the
633	633	26 determination of income and distributive share of income
634	634
635	635
636	636
637	637
638	638
639	639	HB2609 - 17 - LRB104 10355 HLH 20429 b
640	640
641	641
642	642	HB2609- 18 -LRB104 10355 HLH 20429 b HB2609 - 18 - LRB104 10355 HLH 20429 b
643	643	HB2609 - 18 - LRB104 10355 HLH 20429 b
644	644	1 under Sections 702 and 704 and Subchapter S of the
645	645	2 Internal Revenue Code. For taxable years ending on or
646	646	3 after December 31, 2023, for partners and shareholders of
647	647	4 Subchapter S corporations, the provisions of Section 251
648	648	5 shall apply with respect to the credit under this
649	649	6 subsection. The credit shall be .5% of the basis for such
650	650	7 property. The credit shall be available only in the
651	651	8 taxable year in which the property is placed in service in
652	652	9 the Enterprise Zone or River Edge Redevelopment Zone and
653	653	10 shall not be allowed to the extent that it would reduce a
654	654	11 taxpayer's liability for the tax imposed by subsections
655	655	12 (a) and (b) of this Section to below zero. For tax years
656	656	13 ending on or after December 31, 1985, the credit shall be
657	657	14 allowed for the tax year in which the property is placed in
658	658	15 service, or, if the amount of the credit exceeds the tax
659	659	16 liability for that year, whether it exceeds the original
660	660	17 liability or the liability as later amended, such excess
661	661	18 may be carried forward and applied to the tax liability of
662	662	19 the 5 taxable years following the excess credit year. The
663	663	20 credit shall be applied to the earliest year for which
664	664	21 there is a liability. If there is credit from more than one
665	665	22 tax year that is available to offset a liability, the
666	666	23 credit accruing first in time shall be applied first.
667	667	24 (2) The term qualified property means property which:
668	668	25 (A) is tangible, whether new or used, including
669	669	26 buildings and structural components of buildings;
670	670
671	671
672	672
673	673
674	674
675	675	HB2609 - 18 - LRB104 10355 HLH 20429 b
676	676
677	677
678	678	HB2609- 19 -LRB104 10355 HLH 20429 b HB2609 - 19 - LRB104 10355 HLH 20429 b
679	679	HB2609 - 19 - LRB104 10355 HLH 20429 b
680	680	1 (B) is depreciable pursuant to Section 167 of the
681	681	2 Internal Revenue Code, except that "3-year property"
682	682	3 as defined in Section 168(c)(2)(A) of that Code is not
683	683	4 eligible for the credit provided by this subsection
684	684	5 (f);
685	685	6 (C) is acquired by purchase as defined in Section
686	686	7 179(d) of the Internal Revenue Code;
687	687	8 (D) is used in the Enterprise Zone or River Edge
688	688	9 Redevelopment Zone by the taxpayer; and
689	689	10 (E) has not been previously used in Illinois in
690	690	11 such a manner and by such a person as would qualify for
691	691	12 the credit provided by this subsection (f) or
692	692	13 subsection (e).
693	693	14 (3) The basis of qualified property shall be the basis
694	694	15 used to compute the depreciation deduction for federal
695	695	16 income tax purposes.
696	696	17 (4) If the basis of the property for federal income
697	697	18 tax depreciation purposes is increased after it has been
698	698	19 placed in service in the Enterprise Zone or River Edge
699	699	20 Redevelopment Zone by the taxpayer, the amount of such
700	700	21 increase shall be deemed property placed in service on the
701	701	22 date of such increase in basis.
702	702	23 (5) The term "placed in service" shall have the same
703	703	24 meaning as under Section 46 of the Internal Revenue Code.
704	704	25 (6) If during any taxable year, any property ceases to
705	705	26 be qualified property in the hands of the taxpayer within
706	706
707	707
708	708
709	709
710	710
711	711	HB2609 - 19 - LRB104 10355 HLH 20429 b
712	712
713	713
714	714	HB2609- 20 -LRB104 10355 HLH 20429 b HB2609 - 20 - LRB104 10355 HLH 20429 b
715	715	HB2609 - 20 - LRB104 10355 HLH 20429 b
716	716	1 48 months after being placed in service, or the situs of
717	717	2 any qualified property is moved outside the Enterprise
718	718	3 Zone or River Edge Redevelopment Zone within 48 months
719	719	4 after being placed in service, the tax imposed under
720	720	5 subsections (a) and (b) of this Section for such taxable
721	721	6 year shall be increased. Such increase shall be determined
722	722	7 by (i) recomputing the investment credit which would have
723	723	8 been allowed for the year in which credit for such
724	724	9 property was originally allowed by eliminating such
725	725	10 property from such computation, and (ii) subtracting such
726	726	11 recomputed credit from the amount of credit previously
727	727	12 allowed. For the purposes of this paragraph (6), a
728	728	13 reduction of the basis of qualified property resulting
729	729	14 from a redetermination of the purchase price shall be
730	730	15 deemed a disposition of qualified property to the extent
731	731	16 of such reduction.
732	732	17 (7) There shall be allowed an additional credit equal
733	733	18 to 0.5% of the basis of qualified property placed in
734	734	19 service during the taxable year in a River Edge
735	735	20 Redevelopment Zone, provided such property is placed in
736	736	21 service on or after July 1, 2006, and the taxpayer's base
737	737	22 employment within Illinois has increased by 1% or more
738	738	23 over the preceding year as determined by the taxpayer's
739	739	24 employment records filed with the Illinois Department of
740	740	25 Employment Security. Taxpayers who are new to Illinois
741	741	26 shall be deemed to have met the 1% growth in base
742	742
743	743
744	744
745	745
746	746
747	747	HB2609 - 20 - LRB104 10355 HLH 20429 b
748	748
749	749
750	750	HB2609- 21 -LRB104 10355 HLH 20429 b HB2609 - 21 - LRB104 10355 HLH 20429 b
751	751	HB2609 - 21 - LRB104 10355 HLH 20429 b
752	752	1 employment for the first year in which they file
753	753	2 employment records with the Illinois Department of
754	754	3 Employment Security. If, in any year, the increase in base
755	755	4 employment within Illinois over the preceding year is less
756	756	5 than 1%, the additional credit shall be limited to that
757	757	6 percentage times a fraction, the numerator of which is
758	758	7 0.5% and the denominator of which is 1%, but shall not
759	759	8 exceed 0.5%.
760	760	9 (8) For taxable years beginning on or after January 1,
761	761	10 2021, there shall be allowed an Enterprise Zone
762	762	11 construction jobs credit against the taxes imposed under
763	763	12 subsections (a) and (b) of this Section as provided in
764	764	13 Section 13 of the Illinois Enterprise Zone Act.
765	765	14 The credit or credits may not reduce the taxpayer's
766	766	15 liability to less than zero. If the amount of the credit or
767	767	16 credits exceeds the taxpayer's liability, the excess may
768	768	17 be carried forward and applied against the taxpayer's
769	769	18 liability in succeeding calendar years in the same manner
770	770	19 provided under paragraph (4) of Section 211 of this Act.
771	771	20 The credit or credits shall be applied to the earliest
772	772	21 year for which there is a tax liability. If there are
773	773	22 credits from more than one taxable year that are available
774	774	23 to offset a liability, the earlier credit shall be applied
775	775	24 first.
776	776	25 For partners, shareholders of Subchapter S
777	777	26 corporations, and owners of limited liability companies,
778	778
779	779
780	780
781	781
782	782
783	783	HB2609 - 21 - LRB104 10355 HLH 20429 b
784	784
785	785
786	786	HB2609- 22 -LRB104 10355 HLH 20429 b HB2609 - 22 - LRB104 10355 HLH 20429 b
787	787	HB2609 - 22 - LRB104 10355 HLH 20429 b
788	788	1 if the liability company is treated as a partnership for
789	789	2 the purposes of federal and State income taxation, for
790	790	3 taxable years ending before December 31, 2023, there shall
791	791	4 be allowed a credit under this Section to be determined in
792	792	5 accordance with the determination of income and
793	793	6 distributive share of income under Sections 702 and 704
794	794	7 and Subchapter S of the Internal Revenue Code. For taxable
795	795	8 years ending on or after December 31, 2023, for partners
796	796	9 and shareholders of Subchapter S corporations, the
797	797	10 provisions of Section 251 shall apply with respect to the
798	798	11 credit under this subsection.
799	799	12 The total aggregate amount of credits awarded under
800	800	13 the Blue Collar Jobs Act (Article 20 of Public Act 101-9)
801	801	14 shall not exceed $20,000,000 in any State fiscal year.
802	802	15 This paragraph (8) is exempt from the provisions of
803	803	16 Section 250.
804	804	17 (g) (Blank).
805	805	18 (h) Investment credit; High Impact Business.
806	806	19 (1) Subject to subsections (b) and (b-5) of Section
807	807	20 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall
808	808	21 be allowed a credit against the tax imposed by subsections
809	809	22 (a) and (b) of this Section for investment in qualified
810	810	23 property which is placed in service by a Department of
811	811	24 Commerce and Economic Opportunity designated High Impact
812	812	25 Business. The credit shall be .5% of the basis for such
813	813	26 property. The credit shall not be available (i) until the
814	814
815	815
816	816
817	817
818	818
819	819	HB2609 - 22 - LRB104 10355 HLH 20429 b
820	820
821	821
822	822	HB2609- 23 -LRB104 10355 HLH 20429 b HB2609 - 23 - LRB104 10355 HLH 20429 b
823	823	HB2609 - 23 - LRB104 10355 HLH 20429 b
824	824	1 minimum investments in qualified property set forth in
825	825	2 subdivision (a)(3)(A) of Section 5.5 of the Illinois
826	826	3 Enterprise Zone Act have been satisfied or (ii) until the
827	827	4 time authorized in subsection (b-5) of the Illinois
828	828	5 Enterprise Zone Act for entities designated as High Impact
829	829	6 Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
830	830	7 (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
831	831	8 Act, and shall not be allowed to the extent that it would
832	832	9 reduce a taxpayer's liability for the tax imposed by
833	833	10 subsections (a) and (b) of this Section to below zero. The
834	834	11 credit applicable to such investments shall be taken in
835	835	12 the taxable year in which such investments have been
836	836	13 completed. The credit for additional investments beyond
837	837	14 the minimum investment by a designated high impact
838	838	15 business authorized under subdivision (a)(3)(A) of Section
839	839	16 5.5 of the Illinois Enterprise Zone Act shall be available
840	840	17 only in the taxable year in which the property is placed in
841	841	18 service and shall not be allowed to the extent that it
842	842	19 would reduce a taxpayer's liability for the tax imposed by
843	843	20 subsections (a) and (b) of this Section to below zero. For
844	844	21 tax years ending on or after December 31, 1987, the credit
845	845	22 shall be allowed for the tax year in which the property is
846	846	23 placed in service, or, if the amount of the credit exceeds
847	847	24 the tax liability for that year, whether it exceeds the
848	848	25 original liability or the liability as later amended, such
849	849	26 excess may be carried forward and applied to the tax
850	850
851	851
852	852
853	853
854	854
855	855	HB2609 - 23 - LRB104 10355 HLH 20429 b
856	856
857	857
858	858	HB2609- 24 -LRB104 10355 HLH 20429 b HB2609 - 24 - LRB104 10355 HLH 20429 b
859	859	HB2609 - 24 - LRB104 10355 HLH 20429 b
860	860	1 liability of the 5 taxable years following the excess
861	861	2 credit year. The credit shall be applied to the earliest
862	862	3 year for which there is a liability. If there is credit
863	863	4 from more than one tax year that is available to offset a
864	864	5 liability, the credit accruing first in time shall be
865	865	6 applied first.
866	866	7 Changes made in this subdivision (h)(1) by Public Act
867	867	8 88-670 restore changes made by Public Act 85-1182 and
868	868	9 reflect existing law.
869	869	10 (2) The term qualified property means property which:
870	870	11 (A) is tangible, whether new or used, including
871	871	12 buildings and structural components of buildings;
872	872	13 (B) is depreciable pursuant to Section 167 of the
873	873	14 Internal Revenue Code, except that "3-year property"
874	874	15 as defined in Section 168(c)(2)(A) of that Code is not
875	875	16 eligible for the credit provided by this subsection
876	876	17 (h);
877	877	18 (C) is acquired by purchase as defined in Section
878	878	19 179(d) of the Internal Revenue Code; and
879	879	20 (D) is not eligible for the Enterprise Zone
880	880	21 Investment Credit provided by subsection (f) of this
881	881	22 Section.
882	882	23 (3) The basis of qualified property shall be the basis
883	883	24 used to compute the depreciation deduction for federal
884	884	25 income tax purposes.
885	885	26 (4) If the basis of the property for federal income
886	886
887	887
888	888
889	889
890	890
891	891	HB2609 - 24 - LRB104 10355 HLH 20429 b
892	892
893	893
894	894	HB2609- 25 -LRB104 10355 HLH 20429 b HB2609 - 25 - LRB104 10355 HLH 20429 b
895	895	HB2609 - 25 - LRB104 10355 HLH 20429 b
896	896	1 tax depreciation purposes is increased after it has been
897	897	2 placed in service in a federally designated Foreign Trade
898	898	3 Zone or Sub-Zone located in Illinois by the taxpayer, the
899	899	4 amount of such increase shall be deemed property placed in
900	900	5 service on the date of such increase in basis.
901	901	6 (5) The term "placed in service" shall have the same
902	902	7 meaning as under Section 46 of the Internal Revenue Code.
903	903	8 (6) If during any taxable year ending on or before
904	904	9 December 31, 1996, any property ceases to be qualified
905	905	10 property in the hands of the taxpayer within 48 months
906	906	11 after being placed in service, or the situs of any
907	907	12 qualified property is moved outside Illinois within 48
908	908	13 months after being placed in service, the tax imposed
909	909	14 under subsections (a) and (b) of this Section for such
910	910	15 taxable year shall be increased. Such increase shall be
911	911	16 determined by (i) recomputing the investment credit which
912	912	17 would have been allowed for the year in which credit for
913	913	18 such property was originally allowed by eliminating such
914	914	19 property from such computation, and (ii) subtracting such
915	915	20 recomputed credit from the amount of credit previously
916	916	21 allowed. For the purposes of this paragraph (6), a
917	917	22 reduction of the basis of qualified property resulting
918	918	23 from a redetermination of the purchase price shall be
919	919	24 deemed a disposition of qualified property to the extent
920	920	25 of such reduction.
921	921	26 (7) Beginning with tax years ending after December 31,
922	922
923	923
924	924
925	925
926	926
927	927	HB2609 - 25 - LRB104 10355 HLH 20429 b
928	928
929	929
930	930	HB2609- 26 -LRB104 10355 HLH 20429 b HB2609 - 26 - LRB104 10355 HLH 20429 b
931	931	HB2609 - 26 - LRB104 10355 HLH 20429 b
932	932	1 1996, if a taxpayer qualifies for the credit under this
933	933	2 subsection (h) and thereby is granted a tax abatement and
934	934	3 the taxpayer relocates its entire facility in violation of
935	935	4 the explicit terms and length of the contract under
936	936	5 Section 18-183 of the Property Tax Code, the tax imposed
937	937	6 under subsections (a) and (b) of this Section shall be
938	938	7 increased for the taxable year in which the taxpayer
939	939	8 relocated its facility by an amount equal to the amount of
940	940	9 credit received by the taxpayer under this subsection (h).
941	941	10 (h-5) High Impact Business construction jobs credit. For
942	942	11 taxable years beginning on or after January 1, 2021, there
943	943	12 shall also be allowed a High Impact Business construction jobs
944	944	13 credit against the tax imposed under subsections (a) and (b)
945	945	14 of this Section as provided in subsections (i) and (j) of
946	946	15 Section 5.5 of the Illinois Enterprise Zone Act.
947	947	16 The credit or credits may not reduce the taxpayer's
948	948	17 liability to less than zero. If the amount of the credit or
949	949	18 credits exceeds the taxpayer's liability, the excess may be
950	950	19 carried forward and applied against the taxpayer's liability
951	951	20 in succeeding calendar years in the manner provided under
952	952	21 paragraph (4) of Section 211 of this Act. The credit or credits
953	953	22 shall be applied to the earliest year for which there is a tax
954	954	23 liability. If there are credits from more than one taxable
955	955	24 year that are available to offset a liability, the earlier
956	956	25 credit shall be applied first.
957	957	26 For partners, shareholders of Subchapter S corporations,
958	958
959	959
960	960
961	961
962	962
963	963	HB2609 - 26 - LRB104 10355 HLH 20429 b
964	964
965	965
966	966	HB2609- 27 -LRB104 10355 HLH 20429 b HB2609 - 27 - LRB104 10355 HLH 20429 b
967	967	HB2609 - 27 - LRB104 10355 HLH 20429 b
968	968	1 and owners of limited liability companies, for taxable years
969	969	2 ending before December 31, 2023, if the liability company is
970	970	3 treated as a partnership for the purposes of federal and State
971	971	4 income taxation, there shall be allowed a credit under this
972	972	5 Section to be determined in accordance with the determination
973	973	6 of income and distributive share of income under Sections 702
974	974	7 and 704 and Subchapter S of the Internal Revenue Code. For
975	975	8 taxable years ending on or after December 31, 2023, for
976	976	9 partners and shareholders of Subchapter S corporations, the
977	977	10 provisions of Section 251 shall apply with respect to the
978	978	11 credit under this subsection.
979	979	12 The total aggregate amount of credits awarded under the
980	980	13 Blue Collar Jobs Act (Article 20 of Public Act 101-9) shall not
981	981	14 exceed $20,000,000 in any State fiscal year.
982	982	15 This subsection (h-5) is exempt from the provisions of
983	983	16 Section 250.
984	984	17 (i) Credit for Personal Property Tax Replacement Income
985	985	18 Tax. For tax years ending prior to December 31, 2003, a credit
986	986	19 shall be allowed against the tax imposed by subsections (a)
987	987	20 and (b) of this Section for the tax imposed by subsections (c)
988	988	21 and (d) of this Section. This credit shall be computed by
989	989	22 multiplying the tax imposed by subsections (c) and (d) of this
990	990	23 Section by a fraction, the numerator of which is base income
991	991	24 allocable to Illinois and the denominator of which is Illinois
992	992	25 base income, and further multiplying the product by the tax
993	993	26 rate imposed by subsections (a) and (b) of this Section.
994	994
995	995
996	996
997	997
998	998
999	999	HB2609 - 27 - LRB104 10355 HLH 20429 b
1000	1000
1001	1001
1002	1002	HB2609- 28 -LRB104 10355 HLH 20429 b HB2609 - 28 - LRB104 10355 HLH 20429 b
1003	1003	HB2609 - 28 - LRB104 10355 HLH 20429 b
1004	1004	1 Any credit earned on or after December 31, 1986 under this
1005	1005	2 subsection which is unused in the year the credit is computed
1006	1006	3 because it exceeds the tax liability imposed by subsections
1007	1007	4 (a) and (b) for that year (whether it exceeds the original
1008	1008	5 liability or the liability as later amended) may be carried
1009	1009	6 forward and applied to the tax liability imposed by
1010	1010	7 subsections (a) and (b) of the 5 taxable years following the
1011	1011	8 excess credit year, provided that no credit may be carried
1012	1012	9 forward to any year ending on or after December 31, 2003. This
1013	1013	10 credit shall be applied first to the earliest year for which
1014	1014	11 there is a liability. If there is a credit under this
1015	1015	12 subsection from more than one tax year that is available to
1016	1016	13 offset a liability the earliest credit arising under this
1017	1017	14 subsection shall be applied first.
1018	1018	15 If, during any taxable year ending on or after December
1019	1019	16 31, 1986, the tax imposed by subsections (c) and (d) of this
1020	1020	17 Section for which a taxpayer has claimed a credit under this
1021	1021	18 subsection (i) is reduced, the amount of credit for such tax
1022	1022	19 shall also be reduced. Such reduction shall be determined by
1023	1023	20 recomputing the credit to take into account the reduced tax
1024	1024	21 imposed by subsections (c) and (d). If any portion of the
1025	1025	22 reduced amount of credit has been carried to a different
1026	1026	23 taxable year, an amended return shall be filed for such
1027	1027	24 taxable year to reduce the amount of credit claimed.
1028	1028	25 (j) Training expense credit. Beginning with tax years
1029	1029	26 ending on or after December 31, 1986 and prior to December 31,
1030	1030
1031	1031
1032	1032
1033	1033
1034	1034
1035	1035	HB2609 - 28 - LRB104 10355 HLH 20429 b
1036	1036
1037	1037
1038	1038	HB2609- 29 -LRB104 10355 HLH 20429 b HB2609 - 29 - LRB104 10355 HLH 20429 b
1039	1039	HB2609 - 29 - LRB104 10355 HLH 20429 b
1040	1040	1 2003, a taxpayer shall be allowed a credit against the tax
1041	1041	2 imposed by subsections (a) and (b) under this Section for all
1042	1042	3 amounts paid or accrued, on behalf of all persons employed by
1043	1043	4 the taxpayer in Illinois or Illinois residents employed
1044	1044	5 outside of Illinois by a taxpayer, for educational or
1045	1045	6 vocational training in semi-technical or technical fields or
1046	1046	7 semi-skilled or skilled fields, which were deducted from gross
1047	1047	8 income in the computation of taxable income. The credit
1048	1048	9 against the tax imposed by subsections (a) and (b) shall be
1049	1049	10 1.6% of such training expenses. For partners, shareholders of
1050	1050	11 subchapter S corporations, and owners of limited liability
1051	1051	12 companies, if the liability company is treated as a
1052	1052	13 partnership for purposes of federal and State income taxation,
1053	1053	14 for taxable years ending before December 31, 2023, there shall
1054	1054	15 be allowed a credit under this subsection (j) to be determined
1055	1055	16 in accordance with the determination of income and
1056	1056	17 distributive share of income under Sections 702 and 704 and
1057	1057	18 subchapter S of the Internal Revenue Code. For taxable years
1058	1058	19 ending on or after December 31, 2023, for partners and
1059	1059	20 shareholders of Subchapter S corporations, the provisions of
1060	1060	21 Section 251 shall apply with respect to the credit under this
1061	1061	22 subsection.
1062	1062	23 Any credit allowed under this subsection which is unused
1063	1063	24 in the year the credit is earned may be carried forward to each
1064	1064	25 of the 5 taxable years following the year for which the credit
1065	1065	26 is first computed until it is used. This credit shall be
1066	1066
1067	1067
1068	1068
1069	1069
1070	1070
1071	1071	HB2609 - 29 - LRB104 10355 HLH 20429 b
1072	1072
1073	1073
1074	1074	HB2609- 30 -LRB104 10355 HLH 20429 b HB2609 - 30 - LRB104 10355 HLH 20429 b
1075	1075	HB2609 - 30 - LRB104 10355 HLH 20429 b
1076	1076	1 applied first to the earliest year for which there is a
1077	1077	2 liability. If there is a credit under this subsection from
1078	1078	3 more than one tax year that is available to offset a liability,
1079	1079	4 the earliest credit arising under this subsection shall be
1080	1080	5 applied first. No carryforward credit may be claimed in any
1081	1081	6 tax year ending on or after December 31, 2003.
1082	1082	7 (k) Research and development credit. For tax years ending
1083	1083	8 after July 1, 1990 and prior to December 31, 2003, and
1084	1084	9 beginning again for tax years ending on or after December 31,
1085	1085	10 2004, and ending prior to January 1, 2032, a taxpayer shall be
1086	1086	11 allowed a credit against the tax imposed by subsections (a)
1087	1087	12 and (b) of this Section for increasing research activities in
1088	1088	13 this State. The credit allowed against the tax imposed by
1089	1089	14 subsections (a) and (b) shall be equal to 6 1/2% of the
1090	1090	15 qualifying expenditures for increasing research activities in
1091	1091	16 this State. For partners, shareholders of subchapter S
1092	1092	17 corporations, and owners of limited liability companies, if
1093	1093	18 the liability company is treated as a partnership for purposes
1094	1094	19 of federal and State income taxation, for taxable years ending
1095	1095	20 before December 31, 2023, there shall be allowed a credit
1096	1096	21 under this subsection to be determined in accordance with the
1097	1097	22 determination of income and distributive share of income under
1098	1098	23 Sections 702 and 704 and subchapter S of the Internal Revenue
1099	1099	24 Code. For taxable years ending on or after December 31, 2023,
1100	1100	25 for partners and shareholders of Subchapter S corporations,
1101	1101	26 the provisions of Section 251 shall apply with respect to the
1102	1102
1103	1103
1104	1104
1105	1105
1106	1106
1107	1107	HB2609 - 30 - LRB104 10355 HLH 20429 b
1108	1108
1109	1109
1110	1110	HB2609- 31 -LRB104 10355 HLH 20429 b HB2609 - 31 - LRB104 10355 HLH 20429 b
1111	1111	HB2609 - 31 - LRB104 10355 HLH 20429 b
1112	1112	1 credit under this subsection.
1113	1113	2 For purposes of this subsection, "qualifying expenditures"
1114	1114	3 means the qualifying expenditures as defined for the federal
1115	1115	4 credit for increasing research activities which would be
1116	1116	5 allowable under Section 41 of the Internal Revenue Code and
1117	1117	6 which are conducted in this State, "qualifying expenditures
1118	1118	7 for increasing research activities in this State" means the
1119	1119	8 excess of qualifying expenditures for the taxable year in
1120	1120	9 which incurred over qualifying expenditures for the base
1121	1121	10 period, "qualifying expenditures for the base period" means
1122	1122	11 the average of the qualifying expenditures for each year in
1123	1123	12 the base period, and "base period" means the 3 taxable years
1124	1124	13 immediately preceding the taxable year for which the
1125	1125	14 determination is being made.
1126	1126	15 Any credit in excess of the tax liability for the taxable
1127	1127	16 year may be carried forward. A taxpayer may elect to have the
1128	1128	17 unused credit shown on its final completed return carried over
1129	1129	18 as a credit against the tax liability for the following 5
1130	1130	19 taxable years or until it has been fully used, whichever
1131	1131	20 occurs first; provided that no credit earned in a tax year
1132	1132	21 ending prior to December 31, 2003 may be carried forward to any
1133	1133	22 year ending on or after December 31, 2003.
1134	1134	23 If an unused credit is carried forward to a given year from
1135	1135	24 2 or more earlier years, that credit arising in the earliest
1136	1136	25 year will be applied first against the tax liability for the
1137	1137	26 given year. If a tax liability for the given year still
1138	1138
1139	1139
1140	1140
1141	1141
1142	1142
1143	1143	HB2609 - 31 - LRB104 10355 HLH 20429 b
1144	1144
1145	1145
1146	1146	HB2609- 32 -LRB104 10355 HLH 20429 b HB2609 - 32 - LRB104 10355 HLH 20429 b
1147	1147	HB2609 - 32 - LRB104 10355 HLH 20429 b
1148	1148	1 remains, the credit from the next earliest year will then be
1149	1149	2 applied, and so on, until all credits have been used or no tax
1150	1150	3 liability for the given year remains. Any remaining unused
1151	1151	4 credit or credits then will be carried forward to the next
1152	1152	5 following year in which a tax liability is incurred, except
1153	1153	6 that no credit can be carried forward to a year which is more
1154	1154	7 than 5 years after the year in which the expense for which the
1155	1155	8 credit is given was incurred.
1156	1156	9 No inference shall be drawn from Public Act 91-644 in
1157	1157	10 construing this Section for taxable years beginning before
1158	1158	11 January 1, 1999.
1159	1159	12 It is the intent of the General Assembly that the research
1160	1160	13 and development credit under this subsection (k) shall apply
1161	1161	14 continuously for all tax years ending on or after December 31,
1162	1162	15 2004 and ending prior to January 1, 2032, including, but not
1163	1163	16 limited to, the period beginning on January 1, 2016 and ending
1164	1164	17 on July 6, 2017 (the effective date of Public Act 100-22). All
1165	1165	18 actions taken in reliance on the continuation of the credit
1166	1166	19 under this subsection (k) by any taxpayer are hereby
1167	1167	20 validated.
1168	1168	21 (l) Environmental Remediation Tax Credit.
1169	1169	22 (i) For tax years ending after December 31, 1997 and
1170	1170	23 on or before December 31, 2001, a taxpayer shall be
1171	1171	24 allowed a credit against the tax imposed by subsections
1172	1172	25 (a) and (b) of this Section for certain amounts paid for
1173	1173	26 unreimbursed eligible remediation costs, as specified in
1174	1174
1175	1175
1176	1176
1177	1177
1178	1178
1179	1179	HB2609 - 32 - LRB104 10355 HLH 20429 b
1180	1180
1181	1181
1182	1182	HB2609- 33 -LRB104 10355 HLH 20429 b HB2609 - 33 - LRB104 10355 HLH 20429 b
1183	1183	HB2609 - 33 - LRB104 10355 HLH 20429 b
1184	1184	1 this subsection. For purposes of this Section,
1185	1185	2 "unreimbursed eligible remediation costs" means costs
1186	1186	3 approved by the Illinois Environmental Protection Agency
1187	1187	4 ("Agency") under Section 58.14 of the Environmental
1188	1188	5 Protection Act that were paid in performing environmental
1189	1189	6 remediation at a site for which a No Further Remediation
1190	1190	7 Letter was issued by the Agency and recorded under Section
1191	1191	8 58.10 of the Environmental Protection Act. The credit must
1192	1192	9 be claimed for the taxable year in which Agency approval
1193	1193	10 of the eligible remediation costs is granted. The credit
1194	1194	11 is not available to any taxpayer if the taxpayer or any
1195	1195	12 related party caused or contributed to, in any material
1196	1196	13 respect, a release of regulated substances on, in, or
1197	1197	14 under the site that was identified and addressed by the
1198	1198	15 remedial action pursuant to the Site Remediation Program
1199	1199	16 of the Environmental Protection Act. After the Pollution
1200	1200	17 Control Board rules are adopted pursuant to the Illinois
1201	1201	18 Administrative Procedure Act for the administration and
1202	1202	19 enforcement of Section 58.9 of the Environmental
1203	1203	20 Protection Act, determinations as to credit availability
1204	1204	21 for purposes of this Section shall be made consistent with
1205	1205	22 those rules. For purposes of this Section, "taxpayer"
1206	1206	23 includes a person whose tax attributes the taxpayer has
1207	1207	24 succeeded to under Section 381 of the Internal Revenue
1208	1208	25 Code and "related party" includes the persons disallowed a
1209	1209	26 deduction for losses by paragraphs (b), (c), and (f)(1) of
1210	1210
1211	1211
1212	1212
1213	1213
1214	1214
1215	1215	HB2609 - 33 - LRB104 10355 HLH 20429 b
1216	1216
1217	1217
1218	1218	HB2609- 34 -LRB104 10355 HLH 20429 b HB2609 - 34 - LRB104 10355 HLH 20429 b
1219	1219	HB2609 - 34 - LRB104 10355 HLH 20429 b
1220	1220	1 Section 267 of the Internal Revenue Code by virtue of
1221	1221	2 being a related taxpayer, as well as any of its partners.
1222	1222	3 The credit allowed against the tax imposed by subsections
1223	1223	4 (a) and (b) shall be equal to 25% of the unreimbursed
1224	1224	5 eligible remediation costs in excess of $100,000 per site,
1225	1225	6 except that the $100,000 threshold shall not apply to any
1226	1226	7 site contained in an enterprise zone as determined by the
1227	1227	8 Department of Commerce and Community Affairs (now
1228	1228	9 Department of Commerce and Economic Opportunity). The
1229	1229	10 total credit allowed shall not exceed $40,000 per year
1230	1230	11 with a maximum total of $150,000 per site. For partners
1231	1231	12 and shareholders of subchapter S corporations, there shall
1232	1232	13 be allowed a credit under this subsection to be determined
1233	1233	14 in accordance with the determination of income and
1234	1234	15 distributive share of income under Sections 702 and 704
1235	1235	16 and subchapter S of the Internal Revenue Code.
1236	1236	17 (ii) A credit allowed under this subsection that is
1237	1237	18 unused in the year the credit is earned may be carried
1238	1238	19 forward to each of the 5 taxable years following the year
1239	1239	20 for which the credit is first earned until it is used. The
1240	1240	21 term "unused credit" does not include any amounts of
1241	1241	22 unreimbursed eligible remediation costs in excess of the
1242	1242	23 maximum credit per site authorized under paragraph (i).
1243	1243	24 This credit shall be applied first to the earliest year
1244	1244	25 for which there is a liability. If there is a credit under
1245	1245	26 this subsection from more than one tax year that is
1246	1246
1247	1247
1248	1248
1249	1249
1250	1250
1251	1251	HB2609 - 34 - LRB104 10355 HLH 20429 b
1252	1252
1253	1253
1254	1254	HB2609- 35 -LRB104 10355 HLH 20429 b HB2609 - 35 - LRB104 10355 HLH 20429 b
1255	1255	HB2609 - 35 - LRB104 10355 HLH 20429 b
1256	1256	1 available to offset a liability, the earliest credit
1257	1257	2 arising under this subsection shall be applied first. A
1258	1258	3 credit allowed under this subsection may be sold to a
1259	1259	4 buyer as part of a sale of all or part of the remediation
1260	1260	5 site for which the credit was granted. The purchaser of a
1261	1261	6 remediation site and the tax credit shall succeed to the
1262	1262	7 unused credit and remaining carry-forward period of the
1263	1263	8 seller. To perfect the transfer, the assignor shall record
1264	1264	9 the transfer in the chain of title for the site and provide
1265	1265	10 written notice to the Director of the Illinois Department
1266	1266	11 of Revenue of the assignor's intent to sell the
1267	1267	12 remediation site and the amount of the tax credit to be
1268	1268	13 transferred as a portion of the sale. In no event may a
1269	1269	14 credit be transferred to any taxpayer if the taxpayer or a
1270	1270	15 related party would not be eligible under the provisions
1271	1271	16 of subsection (i).
1272	1272	17 (iii) For purposes of this Section, the term "site"
1273	1273	18 shall have the same meaning as under Section 58.2 of the
1274	1274	19 Environmental Protection Act.
1275	1275	20 (m) Education expense credit. Beginning with tax years
1276	1276	21 ending after December 31, 1999, a taxpayer who is the
1277	1277	22 custodian of one or more qualifying pupils shall be allowed a
1278	1278	23 credit against the tax imposed by subsections (a) and (b) of
1279	1279	24 this Section for qualified education expenses incurred on
1280	1280	25 behalf of the qualifying pupils. The credit shall be equal to
1281	1281	26 25% of qualified education expenses, but in no event may the
1282	1282
1283	1283
1284	1284
1285	1285
1286	1286
1287	1287	HB2609 - 35 - LRB104 10355 HLH 20429 b
1288	1288
1289	1289
1290	1290	HB2609- 36 -LRB104 10355 HLH 20429 b HB2609 - 36 - LRB104 10355 HLH 20429 b
1291	1291	HB2609 - 36 - LRB104 10355 HLH 20429 b
1292	1292	1 total credit under this subsection claimed by a family that is
1293	1293	2 the custodian of qualifying pupils exceed (i) $500 for tax
1294	1294	3 years ending prior to December 31, 2017, and (ii) $750 for tax
1295	1295	4 years ending on or after December 31, 2017. In no event shall a
1296	1296	5 credit under this subsection reduce the taxpayer's liability
1297	1297	6 under this Act to less than zero. Notwithstanding any other
1298	1298	7 provision of law, for taxable years beginning on or after
1299	1299	8 January 1, 2017, no taxpayer may claim a credit under this
1300	1300	9 subsection (m) if the taxpayer's adjusted gross income for the
1301	1301	10 taxable year exceeds (i) $500,000, in the case of spouses
1302	1302	11 filing a joint federal tax return or (ii) $250,000, in the case
1303	1303	12 of all other taxpayers. This subsection is exempt from the
1304	1304	13 provisions of Section 250 of this Act.
1305	1305	14 For purposes of this subsection:
1306	1306	15 "Qualifying pupils" means individuals who (i) are
1307	1307	16 residents of the State of Illinois, (ii) are under the age of
1308	1308	17 21 at the close of the school year for which a credit is
1309	1309	18 sought, and (iii) during the school year for which a credit is
1310	1310	19 sought were full-time pupils enrolled in a kindergarten
1311	1311	20 through twelfth grade education program at any school, as
1312	1312	21 defined in this subsection.
1313	1313	22 "Qualified education expense" means the amount incurred on
1314	1314	23 behalf of a qualifying pupil in excess of $250 for tuition,
1315	1315	24 book fees, and lab fees at the school in which the pupil is
1316	1316	25 enrolled during the regular school year.
1317	1317	26 "School" means any public or nonpublic elementary or
1318	1318
1319	1319
1320	1320
1321	1321
1322	1322
1323	1323	HB2609 - 36 - LRB104 10355 HLH 20429 b
1324	1324
1325	1325
1326	1326	HB2609- 37 -LRB104 10355 HLH 20429 b HB2609 - 37 - LRB104 10355 HLH 20429 b
1327	1327	HB2609 - 37 - LRB104 10355 HLH 20429 b
1328	1328	1 secondary school in Illinois that is in compliance with Title
1329	1329	2 VI of the Civil Rights Act of 1964 and attendance at which
1330	1330	3 satisfies the requirements of Section 26-1 of the School Code,
1331	1331	4 except that nothing shall be construed to require a child to
1332	1332	5 attend any particular public or nonpublic school to qualify
1333	1333	6 for the credit under this Section.
1334	1334	7 "Custodian" means, with respect to qualifying pupils, an
1335	1335	8 Illinois resident who is a parent, the parents, a legal
1336	1336	9 guardian, or the legal guardians of the qualifying pupils.
1337	1337	10 (n) River Edge Redevelopment Zone site remediation tax
1338	1338	11 credit.
1339	1339	12 (i) For tax years ending on or after December 31,
1340	1340	13 2006, a taxpayer shall be allowed a credit against the tax
1341	1341	14 imposed by subsections (a) and (b) of this Section for
1342	1342	15 certain amounts paid for unreimbursed eligible remediation
1343	1343	16 costs, as specified in this subsection. For purposes of
1344	1344	17 this Section, "unreimbursed eligible remediation costs"
1345	1345	18 means costs approved by the Illinois Environmental
1346	1346	19 Protection Agency ("Agency") under Section 58.14a of the
1347	1347	20 Environmental Protection Act that were paid in performing
1348	1348	21 environmental remediation at a site within a River Edge
1349	1349	22 Redevelopment Zone for which a No Further Remediation
1350	1350	23 Letter was issued by the Agency and recorded under Section
1351	1351	24 58.10 of the Environmental Protection Act. The credit must
1352	1352	25 be claimed for the taxable year in which Agency approval
1353	1353	26 of the eligible remediation costs is granted. The credit
1354	1354
1355	1355
1356	1356
1357	1357
1358	1358
1359	1359	HB2609 - 37 - LRB104 10355 HLH 20429 b
1360	1360
1361	1361
1362	1362	HB2609- 38 -LRB104 10355 HLH 20429 b HB2609 - 38 - LRB104 10355 HLH 20429 b
1363	1363	HB2609 - 38 - LRB104 10355 HLH 20429 b
1364	1364	1 is not available to any taxpayer if the taxpayer or any
1365	1365	2 related party caused or contributed to, in any material
1366	1366	3 respect, a release of regulated substances on, in, or
1367	1367	4 under the site that was identified and addressed by the
1368	1368	5 remedial action pursuant to the Site Remediation Program
1369	1369	6 of the Environmental Protection Act. Determinations as to
1370	1370	7 credit availability for purposes of this Section shall be
1371	1371	8 made consistent with rules adopted by the Pollution
1372	1372	9 Control Board pursuant to the Illinois Administrative
1373	1373	10 Procedure Act for the administration and enforcement of
1374	1374	11 Section 58.9 of the Environmental Protection Act. For
1375	1375	12 purposes of this Section, "taxpayer" includes a person
1376	1376	13 whose tax attributes the taxpayer has succeeded to under
1377	1377	14 Section 381 of the Internal Revenue Code and "related
1378	1378	15 party" includes the persons disallowed a deduction for
1379	1379	16 losses by paragraphs (b), (c), and (f)(1) of Section 267
1380	1380	17 of the Internal Revenue Code by virtue of being a related
1381	1381	18 taxpayer, as well as any of its partners. The credit
1382	1382	19 allowed against the tax imposed by subsections (a) and (b)
1383	1383	20 shall be equal to 25% of the unreimbursed eligible
1384	1384	21 remediation costs in excess of $100,000 per site.
1385	1385	22 (ii) A credit allowed under this subsection that is
1386	1386	23 unused in the year the credit is earned may be carried
1387	1387	24 forward to each of the 5 taxable years following the year
1388	1388	25 for which the credit is first earned until it is used. This
1389	1389	26 credit shall be applied first to the earliest year for
1390	1390
1391	1391
1392	1392
1393	1393
1394	1394
1395	1395	HB2609 - 38 - LRB104 10355 HLH 20429 b
1396	1396
1397	1397
1398	1398	HB2609- 39 -LRB104 10355 HLH 20429 b HB2609 - 39 - LRB104 10355 HLH 20429 b
1399	1399	HB2609 - 39 - LRB104 10355 HLH 20429 b
1400	1400	1 which there is a liability. If there is a credit under this
1401	1401	2 subsection from more than one tax year that is available
1402	1402	3 to offset a liability, the earliest credit arising under
1403	1403	4 this subsection shall be applied first. A credit allowed
1404	1404	5 under this subsection may be sold to a buyer as part of a
1405	1405	6 sale of all or part of the remediation site for which the
1406	1406	7 credit was granted. The purchaser of a remediation site
1407	1407	8 and the tax credit shall succeed to the unused credit and
1408	1408	9 remaining carry-forward period of the seller. To perfect
1409	1409	10 the transfer, the assignor shall record the transfer in
1410	1410	11 the chain of title for the site and provide written notice
1411	1411	12 to the Director of the Illinois Department of Revenue of
1412	1412	13 the assignor's intent to sell the remediation site and the
1413	1413	14 amount of the tax credit to be transferred as a portion of
1414	1414	15 the sale. In no event may a credit be transferred to any
1415	1415	16 taxpayer if the taxpayer or a related party would not be
1416	1416	17 eligible under the provisions of subsection (i).
1417	1417	18 (iii) For purposes of this Section, the term "site"
1418	1418	19 shall have the same meaning as under Section 58.2 of the
1419	1419	20 Environmental Protection Act.
1420	1420	21 (o) For each of taxable years during the Compassionate Use
1421	1421	22 of Medical Cannabis Program, a surcharge is imposed on all
1422	1422	23 taxpayers on income arising from the sale or exchange of
1423	1423	24 capital assets, depreciable business property, real property
1424	1424	25 used in the trade or business, and Section 197 intangibles of
1425	1425	26 an organization registrant under the Compassionate Use of
1426	1426
1427	1427
1428	1428
1429	1429
1430	1430
1431	1431	HB2609 - 39 - LRB104 10355 HLH 20429 b
1432	1432
1433	1433
1434	1434	HB2609- 40 -LRB104 10355 HLH 20429 b HB2609 - 40 - LRB104 10355 HLH 20429 b
1435	1435	HB2609 - 40 - LRB104 10355 HLH 20429 b
1436	1436	1 Medical Cannabis Program Act. The amount of the surcharge is
1437	1437	2 equal to the amount of federal income tax liability for the
1438	1438	3 taxable year attributable to those sales and exchanges. The
1439	1439	4 surcharge imposed does not apply if:
1440	1440	5 (1) the medical cannabis cultivation center
1441	1441	6 registration, medical cannabis dispensary registration, or
1442	1442	7 the property of a registration is transferred as a result
1443	1443	8 of any of the following:
1444	1444	9 (A) bankruptcy, a receivership, or a debt
1445	1445	10 adjustment initiated by or against the initial
1446	1446	11 registration or the substantial owners of the initial
1447	1447	12 registration;
1448	1448	13 (B) cancellation, revocation, or termination of
1449	1449	14 any registration by the Illinois Department of Public
1450	1450	15 Health;
1451	1451	16 (C) a determination by the Illinois Department of
1452	1452	17 Public Health that transfer of the registration is in
1453	1453	18 the best interests of Illinois qualifying patients as
1454	1454	19 defined by the Compassionate Use of Medical Cannabis
1455	1455	20 Program Act;
1456	1456	21 (D) the death of an owner of the equity interest in
1457	1457	22 a registrant;
1458	1458	23 (E) the acquisition of a controlling interest in
1459	1459	24 the stock or substantially all of the assets of a
1460	1460	25 publicly traded company;
1461	1461	26 (F) a transfer by a parent company to a wholly
1462	1462
1463	1463
1464	1464
1465	1465
1466	1466
1467	1467	HB2609 - 40 - LRB104 10355 HLH 20429 b
1468	1468
1469	1469
1470	1470	HB2609- 41 -LRB104 10355 HLH 20429 b HB2609 - 41 - LRB104 10355 HLH 20429 b
1471	1471	HB2609 - 41 - LRB104 10355 HLH 20429 b
1472	1472	1 owned subsidiary; or
1473	1473	2 (G) the transfer or sale to or by one person to
1474	1474	3 another person where both persons were initial owners
1475	1475	4 of the registration when the registration was issued;
1476	1476	5 or
1477	1477	6 (2) the cannabis cultivation center registration,
1478	1478	7 medical cannabis dispensary registration, or the
1479	1479	8 controlling interest in a registrant's property is
1480	1480	9 transferred in a transaction to lineal descendants in
1481	1481	10 which no gain or loss is recognized or as a result of a
1482	1482	11 transaction in accordance with Section 351 of the Internal
1483	1483	12 Revenue Code in which no gain or loss is recognized.
1484	1484	13 (p) Pass-through entity tax.
1485	1485	14 (1) For taxable years ending on or after December 31,
1486	1486	15 2021 and beginning prior to January 1, 2026, a partnership
1487	1487	16 (other than a publicly traded partnership under Section
1488	1488	17 7704 of the Internal Revenue Code) or Subchapter S
1489	1489	18 corporation may elect to apply the provisions of this
1490	1490	19 subsection. A separate election shall be made for each
1491	1491	20 taxable year. Such election shall be made at such time,
1492	1492	21 and in such form and manner as prescribed by the
1493	1493	22 Department, and, once made, is irrevocable.
1494	1494	23 (2) Entity-level tax. A partnership or Subchapter S
1495	1495	24 corporation electing to apply the provisions of this
1496	1496	25 subsection shall be subject to a tax for the privilege of
1497	1497	26 earning or receiving income in this State in an amount
1498	1498
1499	1499
1500	1500
1501	1501
1502	1502
1503	1503	HB2609 - 41 - LRB104 10355 HLH 20429 b
1504	1504
1505	1505
1506	1506	HB2609- 42 -LRB104 10355 HLH 20429 b HB2609 - 42 - LRB104 10355 HLH 20429 b
1507	1507	HB2609 - 42 - LRB104 10355 HLH 20429 b
1508	1508	1 equal to 4.95% of the taxpayer's net income for the
1509	1509	2 taxable year.
1510	1510	3 (3) Net income defined.
1511	1511	4 (A) In general. For purposes of paragraph (2), the
1512	1512	5 term net income has the same meaning as defined in
1513	1513	6 Section 202 of this Act, except that, for tax years
1514	1514	7 ending on or after December 31, 2023, a deduction
1515	1515	8 shall be allowed in computing base income for
1516	1516	9 distributions to a retired partner to the extent that
1517	1517	10 the partner's distributions are exempt from tax under
1518	1518	11 Section 203(a)(2)(F) of this Act. In addition, the
1519	1519	12 following modifications shall not apply:
1520	1520	13 (i) the standard exemption allowed under
1521	1521	14 Section 204;
1522	1522	15 (ii) the deduction for net losses allowed
1523	1523	16 under Section 207;
1524	1524	17 (iii) in the case of an S corporation, the
1525	1525	18 modification under Section 203(b)(2)(S); and
1526	1526	19 (iv) in the case of a partnership, the
1527	1527	20 modifications under Section 203(d)(2)(H) and
1528	1528	21 Section 203(d)(2)(I).
1529	1529	22 (B) Special rule for tiered partnerships. If a
1530	1530	23 taxpayer making the election under paragraph (1) is a
1531	1531	24 partner of another taxpayer making the election under
1532	1532	25 paragraph (1), net income shall be computed as
1533	1533	26 provided in subparagraph (A), except that the taxpayer
1534	1534
1535	1535
1536	1536
1537	1537
1538	1538
1539	1539	HB2609 - 42 - LRB104 10355 HLH 20429 b
1540	1540
1541	1541
1542	1542	HB2609- 43 -LRB104 10355 HLH 20429 b HB2609 - 43 - LRB104 10355 HLH 20429 b
1543	1543	HB2609 - 43 - LRB104 10355 HLH 20429 b
1544	1544	1 shall subtract its distributive share of the net
1545	1545	2 income of the electing partnership (including its
1546	1546	3 distributive share of the net income of the electing
1547	1547	4 partnership derived as a distributive share from
1548	1548	5 electing partnerships in which it is a partner).
1549	1549	6 (4) Credit for entity level tax. Each partner or
1550	1550	7 shareholder of a taxpayer making the election under this
1551	1551	8 Section shall be allowed a credit against the tax imposed
1552	1552	9 under subsections (a) and (b) of Section 201 of this Act
1553	1553	10 for the taxable year of the partnership or Subchapter S
1554	1554	11 corporation for which an election is in effect ending
1555	1555	12 within or with the taxable year of the partner or
1556	1556	13 shareholder in an amount equal to 4.95% times the partner
1557	1557	14 or shareholder's distributive share of the net income of
1558	1558	15 the electing partnership or Subchapter S corporation, but
1559	1559	16 not to exceed the partner's or shareholder's share of the
1560	1560	17 tax imposed under paragraph (1) which is actually paid by
1561	1561	18 the partnership or Subchapter S corporation. If the
1562	1562	19 taxpayer is a partnership or Subchapter S corporation that
1563	1563	20 is itself a partner of a partnership making the election
1564	1564	21 under paragraph (1), the credit under this paragraph shall
1565	1565	22 be allowed to the taxpayer's partners or shareholders (or
1566	1566	23 if the partner is a partnership or Subchapter S
1567	1567	24 corporation then its partners or shareholders) in
1568	1568	25 accordance with the determination of income and
1569	1569	26 distributive share of income under Sections 702 and 704
1570	1570
1571	1571
1572	1572
1573	1573
1574	1574
1575	1575	HB2609 - 43 - LRB104 10355 HLH 20429 b
1576	1576
1577	1577
1578	1578	HB2609- 44 -LRB104 10355 HLH 20429 b HB2609 - 44 - LRB104 10355 HLH 20429 b
1579	1579	HB2609 - 44 - LRB104 10355 HLH 20429 b
1580	1580	1 and Subchapter S of the Internal Revenue Code. If the
1581	1581	2 amount of the credit allowed under this paragraph exceeds
1582	1582	3 the partner's or shareholder's liability for tax imposed
1583	1583	4 under subsections (a) and (b) of Section 201 of this Act
1584	1584	5 for the taxable year, such excess shall be treated as an
1585	1585	6 overpayment for purposes of Section 909 of this Act.
1586	1586	7 (5) Nonresidents. A nonresident individual who is a
1587	1587	8 partner or shareholder of a partnership or Subchapter S
1588	1588	9 corporation for a taxable year for which an election is in
1589	1589	10 effect under paragraph (1) shall not be required to file
1590	1590	11 an income tax return under this Act for such taxable year
1591	1591	12 if the only source of net income of the individual (or the
1592	1592	13 individual and the individual's spouse in the case of a
1593	1593	14 joint return) is from an entity making the election under
1594	1594	15 paragraph (1) and the credit allowed to the partner or
1595	1595	16 shareholder under paragraph (4) equals or exceeds the
1596	1596	17 individual's liability for the tax imposed under
1597	1597	18 subsections (a) and (b) of Section 201 of this Act for the
1598	1598	19 taxable year.
1599	1599	20 (6) Liability for tax. Except as provided in this
1600	1600	21 paragraph, a partnership or Subchapter S making the
1601	1601	22 election under paragraph (1) is liable for the
1602	1602	23 entity-level tax imposed under paragraph (2). If the
1603	1603	24 electing partnership or corporation fails to pay the full
1604	1604	25 amount of tax deemed assessed under paragraph (2), the
1605	1605	26 partners or shareholders shall be liable to pay the tax
1606	1606
1607	1607
1608	1608
1609	1609
1610	1610
1611	1611	HB2609 - 44 - LRB104 10355 HLH 20429 b
1612	1612
1613	1613
1614	1614	HB2609- 45 -LRB104 10355 HLH 20429 b HB2609 - 45 - LRB104 10355 HLH 20429 b
1615	1615	HB2609 - 45 - LRB104 10355 HLH 20429 b
1616	1616	1 assessed (including penalties and interest). Each partner
1617	1617	2 or shareholder shall be liable for the unpaid assessment
1618	1618	3 based on the ratio of the partner's or shareholder's share
1619	1619	4 of the net income of the partnership over the total net
1620	1620	5 income of the partnership. If the partnership or
1621	1621	6 Subchapter S corporation fails to pay the tax assessed
1622	1622	7 (including penalties and interest) and thereafter an
1623	1623	8 amount of such tax is paid by the partners or
1624	1624	9 shareholders, such amount shall not be collected from the
1625	1625	10 partnership or corporation.
1626	1626	11 (7) Foreign tax. For purposes of the credit allowed
1627	1627	12 under Section 601(b)(3) of this Act, tax paid by a
1628	1628	13 partnership or Subchapter S corporation to another state
1629	1629	14 which, as determined by the Department, is substantially
1630	1630	15 similar to the tax imposed under this subsection, shall be
1631	1631	16 considered tax paid by the partner or shareholder to the
1632	1632	17 extent that the partner's or shareholder's share of the
1633	1633	18 income of the partnership or Subchapter S corporation
1634	1634	19 allocated and apportioned to such other state bears to the
1635	1635	20 total income of the partnership or Subchapter S
1636	1636	21 corporation allocated or apportioned to such other state.
1637	1637	22 (8) Suspension of withholding. The provisions of
1638	1638	23 Section 709.5 of this Act shall not apply to a partnership
1639	1639	24 or Subchapter S corporation for the taxable year for which
1640	1640	25 an election under paragraph (1) is in effect.
1641	1641	26 (9) Requirement to pay estimated tax. For each taxable
1642	1642
1643	1643
1644	1644
1645	1645
1646	1646
1647	1647	HB2609 - 45 - LRB104 10355 HLH 20429 b
1648	1648
1649	1649
1650	1650	HB2609- 46 -LRB104 10355 HLH 20429 b HB2609 - 46 - LRB104 10355 HLH 20429 b
1651	1651	HB2609 - 46 - LRB104 10355 HLH 20429 b
1652	1652	1 year for which an election under paragraph (1) is in
1653	1653	2 effect, a partnership or Subchapter S corporation is
1654	1654	3 required to pay estimated tax for such taxable year under
1655	1655	4 Sections 803 and 804 of this Act if the amount payable as
1656	1656	5 estimated tax can reasonably be expected to exceed $500.
1657	1657	6 (10) The provisions of this subsection shall apply
1658	1658	7 only with respect to taxable years for which the
1659	1659	8 limitation on individual deductions applies under Section
1660	1660	9 164(b)(6) of the Internal Revenue Code.
1661	1661	10 (Source: P.A. 102-558, eff. 8-20-21; 102-658, eff. 8-27-21;
1662	1662	11 103-9, eff. 6-7-23; 103-396, eff. 1-1-24; 103-595, eff.
1663	1663	12 6-26-24; 103-605, eff. 7-1-24.)
1664	1664
1665	1665
1666	1666
1667	1667
1668	1668
1669	1669	HB2609 - 46 - LRB104 10355 HLH 20429 b