Illinois 2025-2026 Regular Session

Illinois Senate Bill SB1956 Compare Versions

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

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1	1	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB1956 Introduced 2/6/2025, by Sen. Elgie R. Sims, Jr. SYNOPSIS AS INTRODUCED: 35 ILCS 5/203 from Ch. 120, par. 2-203 Amends the Illinois Income Tax Act. Makes changes in provisions concerning (i) an addition modification for interest paid, accrued, or incurred to a person who would be a member of the taxpayer's unitary business group but for the fact that the person is ordinarily required to apportion business income under different provisions of the Act and (ii) an addition modification for intangible expenses and costs otherwise allowed as a deduction in computing the taxpayer's base income that were paid, accrued, or incurred to a person who would be a member of the taxpayer's unitary business group but for the fact that the person is ordinarily required to apportion business income under different provisions of the Act. Effective immediately. LRB104 06843 HLH 16879 b A BILL FOR 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB1956 Introduced 2/6/2025, by Sen. Elgie R. Sims, Jr. 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. Makes changes in provisions concerning (i) an addition modification for interest paid, accrued, or incurred to a person who would be a member of the taxpayer's unitary business group but for the fact that the person is ordinarily required to apportion business income under different provisions of the Act and (ii) an addition modification for intangible expenses and costs otherwise allowed as a deduction in computing the taxpayer's base income that were paid, accrued, or incurred to a person who would be a member of the taxpayer's unitary business group but for the fact that the person is ordinarily required to apportion business income under different provisions of the Act. Effective immediately. LRB104 06843 HLH 16879 b LRB104 06843 HLH 16879 b A BILL FOR
2	2	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB1956 Introduced 2/6/2025, by Sen. Elgie R. Sims, Jr. 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. Makes changes in provisions concerning (i) an addition modification for interest paid, accrued, or incurred to a person who would be a member of the taxpayer's unitary business group but for the fact that the person is ordinarily required to apportion business income under different provisions of the Act and (ii) an addition modification for intangible expenses and costs otherwise allowed as a deduction in computing the taxpayer's base income that were paid, accrued, or incurred to a person who would be a member of the taxpayer's unitary business group but for the fact that the person is ordinarily required to apportion business income under different provisions of the Act. Effective immediately.
6	6	LRB104 06843 HLH 16879 b LRB104 06843 HLH 16879 b
7	7	LRB104 06843 HLH 16879 b
8	8	A BILL FOR
9	9	SB1956LRB104 06843 HLH 16879 b SB1956 LRB104 06843 HLH 16879 b
10	10	SB1956 LRB104 06843 HLH 16879 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	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB1956 Introduced 2/6/2025, by Sen. Elgie R. Sims, Jr. 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. Makes changes in provisions concerning (i) an addition modification for interest paid, accrued, or incurred to a person who would be a member of the taxpayer's unitary business group but for the fact that the person is ordinarily required to apportion business income under different provisions of the Act and (ii) an addition modification for intangible expenses and costs otherwise allowed as a deduction in computing the taxpayer's base income that were paid, accrued, or incurred to a person who would be a member of the taxpayer's unitary business group but for the fact that the person is ordinarily required to apportion business income under different provisions of the Act. Effective immediately.
41	41	LRB104 06843 HLH 16879 b LRB104 06843 HLH 16879 b
42	42	LRB104 06843 HLH 16879 b
43	43	A BILL FOR
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48	48
49	49	35 ILCS 5/203 from Ch. 120, par. 2-203
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53	53	LRB104 06843 HLH 16879 b
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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
166	166
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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. For taxable years ending on and after
180	180	5 December 31, 2025, for purposes of applying this
181	181	6 paragraph in the case of a taxpayer to which
182	182	7 subsection (j) of Section 163 of the Internal Revenue
183	183	8 Code applies for the taxable year, the reduction in
184	184	9 the amount of interest for which a deduction is
185	185	10 allowed by reason of subsection (j) of Section 163
186	186	11 shall be treated as allocable first to persons who are
187	187	12 not foreign persons referred to in this paragraph and
188	188	13 then to those foreign persons.
189	189	14 For taxable years ending before December 31, 2025,
190	190	15 this This paragraph shall not apply to the following:
191	191	16 (i) an item of interest paid, accrued, or
192	192	17 incurred, directly or indirectly, to a person who
193	193	18 is subject in a foreign country or state, other
194	194	19 than a state which requires mandatory unitary
195	195	20 reporting, to a tax on or measured by net income
196	196	21 with respect to such interest; or
197	197	22 (ii) an item of interest paid, accrued, or
198	198	23 incurred, directly or indirectly, to a person if
199	199	24 the taxpayer can establish, based on a
200	200	25 preponderance of the evidence, both of the
201	201	26 following:
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212	212	1 (a) the person, during the same taxable
213	213	2 year, paid, accrued, or incurred, the interest
214	214	3 to a person that is not a related member, and
215	215	4 (b) the transaction giving rise to the
216	216	5 interest expense between the taxpayer and the
217	217	6 person did not have as a principal purpose the
218	218	7 avoidance of Illinois income tax, and is paid
219	219	8 pursuant to a contract or agreement that
220	220	9 reflects an arm's-length interest rate and
221	221	10 terms; or
222	222	11 (iii) the taxpayer can establish, based on
223	223	12 clear and convincing evidence, that the interest
224	224	13 paid, accrued, or incurred relates to a contract
225	225	14 or agreement entered into at arm's-length rates
226	226	15 and terms and the principal purpose for the
227	227	16 payment is not federal or Illinois tax avoidance;
228	228	17 or
229	229	18 (iv) an item of interest paid, accrued, or
230	230	19 incurred, directly or indirectly, to a person if
231	231	20 the taxpayer establishes by clear and convincing
232	232	21 evidence that the adjustments are unreasonable; or
233	233	22 if the taxpayer and the Director agree in writing
234	234	23 to the application or use of an alternative method
235	235	24 of apportionment under Section 304(f).
236	236	25 For taxable years ending on or after December 31,
237	237	26 2025, this paragraph shall not apply to the following:
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248	248	1 (i) an item of interest paid, accrued, or
249	249	2 incurred, directly or indirectly, to a person if
250	250	3 the taxpayer can establish, based on a
251	251	4 preponderance of the evidence, both of the
252	252	5 following:
253	253	6 (a) the person, during the same taxable
254	254	7 year, paid, accrued, or incurred, the interest
255	255	8 to a person that is not a related member, and
256	256	9 (b) the transaction giving rise to the
257	257	10 interest expense between the taxpayer and the
258	258	11 person did not have as a principal purpose the
259	259	12 avoidance of Illinois income tax and is paid
260	260	13 pursuant to a contract or agreement that
261	261	14 reflects an arm's-length interest rate and
262	262	15 terms; or
263	263	16 (ii) an item of interest paid, accrued, or
264	264	17 incurred, directly or indirectly, to a person if
265	265	18 the taxpayer establishes by clear and convincing
266	266	19 evidence that the adjustments are unreasonable; or
267	267	20 if the taxpayer and the Director agree in writing
268	268	21 to the application or use of an alternative method
269	269	22 of apportionment under Section 304(f).
270	270	23 Nothing in this subsection shall preclude the
271	271	24 Director from making any other adjustment
272	272	25 otherwise allowed under Section 404 of this Act
273	273	26 for any tax year beginning after the effective
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284	284	1 date of this amendment provided such adjustment is
285	285	2 made pursuant to regulation adopted by the
286	286	3 Department and such regulations provide methods
287	287	4 and standards by which the Department will utilize
288	288	5 its authority under Section 404 of this Act;
289	289	6 (D-18) An amount equal to the amount of intangible
290	290	7 expenses and costs otherwise allowed as a deduction in
291	291	8 computing base income, and that were paid, accrued, or
292	292	9 incurred, directly or indirectly, (i) for taxable
293	293	10 years ending on or after December 31, 2004, to a
294	294	11 foreign person who would be a member of the same
295	295	12 unitary business group but for the fact that the
296	296	13 foreign person's business activity outside the United
297	297	14 States is 80% or more of that person's total business
298	298	15 activity and (ii) for taxable years ending on or after
299	299	16 December 31, 2008, to a person who would be a member of
300	300	17 the same unitary business group but for the fact that
301	301	18 the person is prohibited under Section 1501(a)(27)
302	302	19 from being included in the unitary business group
303	303	20 because he or she is ordinarily required to apportion
304	304	21 business income under different subsections of Section
305	305	22 304. The addition modification required by this
306	306	23 subparagraph shall be reduced to the extent that
307	307	24 dividends were included in base income of the unitary
308	308	25 group for the same taxable year and received by the
309	309	26 taxpayer or by a member of the taxpayer's unitary
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320	320	1 business group (including amounts included in gross
321	321	2 income under Sections 951 through 964 of the Internal
322	322	3 Revenue Code and amounts included in gross income
323	323	4 under Section 78 of the Internal Revenue Code) with
324	324	5 respect to the stock of the same person to whom the
325	325	6 intangible expenses and costs were directly or
326	326	7 indirectly paid, incurred, or accrued. The preceding
327	327	8 sentence does not apply to the extent that the same
328	328	9 dividends caused a reduction to the addition
329	329	10 modification required under Section 203(a)(2)(D-17) of
330	330	11 this Act. As used in this subparagraph, the term
331	331	12 "intangible expenses and costs" includes (1) expenses,
332	332	13 losses, and costs for, or related to, the direct or
333	333	14 indirect acquisition, use, maintenance or management,
334	334	15 ownership, sale, exchange, or any other disposition of
335	335	16 intangible property; (2) losses incurred, directly or
336	336	17 indirectly, from factoring transactions or discounting
337	337	18 transactions; (3) royalty, patent, technical, and
338	338	19 copyright fees; (4) licensing fees; and (5) other
339	339	20 similar expenses and costs. For purposes of this
340	340	21 subparagraph, "intangible property" includes patents,
341	341	22 patent applications, trade names, trademarks, service
342	342	23 marks, copyrights, mask works, trade secrets, and
343	343	24 similar types of intangible assets.
344	344	25 For taxable years ending before December 31, 2025,
345	345	26 this This paragraph shall not apply to the following:
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356	356	1 (i) any item of intangible expenses or costs
357	357	2 paid, accrued, or incurred, directly or
358	358	3 indirectly, from a transaction with a person who
359	359	4 is subject in a foreign country or state, other
360	360	5 than a state which requires mandatory unitary
361	361	6 reporting, to a tax on or measured by net income
362	362	7 with respect to such item; or
363	363	8 (ii) any item of intangible expense or cost
364	364	9 paid, accrued, or incurred, directly or
365	365	10 indirectly, if the taxpayer can establish, based
366	366	11 on a preponderance of the evidence, both of the
367	367	12 following:
368	368	13 (a) the person during the same taxable
369	369	14 year paid, accrued, or incurred, the
370	370	15 intangible expense or cost to a person that is
371	371	16 not a related member, and
372	372	17 (b) the transaction giving rise to the
373	373	18 intangible expense or cost between the
374	374	19 taxpayer and the person did not have as a
375	375	20 principal purpose the avoidance of Illinois
376	376	21 income tax, and is paid pursuant to a contract
377	377	22 or agreement that reflects arm's-length terms;
378	378	23 or
379	379	24 (iii) any item of intangible expense or cost
380	380	25 paid, accrued, or incurred, directly or
381	381	26 indirectly, from a transaction with a person if
382	382
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392	392	1 the taxpayer establishes by clear and convincing
393	393	2 evidence, that the adjustments are unreasonable;
394	394	3 or if the taxpayer and the Director agree in
395	395	4 writing to the application or use of an
396	396	5 alternative method of apportionment under Section
397	397	6 304(f);
398	398	7 For taxable years ending on or after December 31,
399	399	8 2025, this paragraph shall not apply to the following:
400	400	9 (i) any item of intangible expense or cost
401	401	10 paid, accrued, or incurred, directly or
402	402	11 indirectly, if the taxpayer can establish, based
403	403	12 on a preponderance of the evidence, both of the
404	404	13 following:
405	405	14 (a) the person during the same taxable
406	406	15 year, paid, accrued, or incurred, the
407	407	16 intangible expense or cost to a person that is
408	408	17 not a related member, and
409	409	18 (b) the transaction giving rise to the
410	410	19 intangible expense or cost between the
411	411	20 taxpayer and the person did not have as a
412	412	21 principal purpose the avoidance of Illinois
413	413	22 income tax and is paid pursuant to a contract
414	414	23 or agreement that reflects arm's-length terms;
415	415	24 or
416	416	25 (ii) any item of intangible expense or cost
417	417	26 paid, accrued, or incurred, directly or
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428	428	1 indirectly, from a transaction with a person if
429	429	2 the taxpayer establishes, by clear and convincing
430	430	3 evidence, that the adjustments are unreasonable;
431	431	4 or if the taxpayer and the Director agree in
432	432	5 writing to the application or use of an
433	433	6 alternative method of apportionment under Section
434	434	7 304(f).
435	435	8 Nothing in this subsection shall preclude the
436	436	9 Director from making any other adjustment
437	437	10 otherwise allowed under Section 404 of this Act
438	438	11 for any tax year beginning after the effective
439	439	12 date of this amendment provided such adjustment is
440	440	13 made pursuant to regulation adopted by the
441	441	14 Department and such regulations provide methods
442	442	15 and standards by which the Department will utilize
443	443	16 its authority under Section 404 of this Act;
444	444	17 (D-19) For taxable years ending on or after
445	445	18 December 31, 2008, an amount equal to the amount of
446	446	19 insurance premium expenses and costs otherwise allowed
447	447	20 as a deduction in computing base income, and that were
448	448	21 paid, accrued, or incurred, directly or indirectly, to
449	449	22 a person who would be a member of the same unitary
450	450	23 business group but for the fact that the person is
451	451	24 prohibited under Section 1501(a)(27) from being
452	452	25 included in the unitary business group because he or
453	453	26 she is ordinarily required to apportion business
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464	464	1 income under different subsections of Section 304. The
465	465	2 addition modification required by this subparagraph
466	466	3 shall be reduced to the extent that dividends were
467	467	4 included in base income of the unitary group for the
468	468	5 same taxable year and received by the taxpayer or by a
469	469	6 member of the taxpayer's unitary business group
470	470	7 (including amounts included in gross income under
471	471	8 Sections 951 through 964 of the Internal Revenue Code
472	472	9 and amounts included in gross income under Section 78
473	473	10 of the Internal Revenue Code) with respect to the
474	474	11 stock of the same person to whom the premiums and costs
475	475	12 were directly or indirectly paid, incurred, or
476	476	13 accrued. The preceding sentence does not apply to the
477	477	14 extent that the same dividends caused a reduction to
478	478	15 the addition modification required under Section
479	479	16 203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this
480	480	17 Act;
481	481	18 (D-20) For taxable years beginning on or after
482	482	19 January 1, 2002 and ending on or before December 31,
483	483	20 2006, in the case of a distribution from a qualified
484	484	21 tuition program under Section 529 of the Internal
485	485	22 Revenue Code, other than (i) a distribution from a
486	486	23 College Savings Pool created under Section 16.5 of the
487	487	24 State Treasurer Act or (ii) a distribution from the
488	488	25 Illinois Prepaid Tuition Trust Fund, an amount equal
489	489	26 to the amount excluded from gross income under Section
490	490
491	491
492	492
493	493
494	494
495	495	SB1956 - 13 - LRB104 06843 HLH 16879 b
496	496
497	497
498	498	SB1956- 14 -LRB104 06843 HLH 16879 b SB1956 - 14 - LRB104 06843 HLH 16879 b
499	499	SB1956 - 14 - LRB104 06843 HLH 16879 b
500	500	1 529(c)(3)(B). For taxable years beginning on or after
501	501	2 January 1, 2007, in the case of a distribution from a
502	502	3 qualified tuition program under Section 529 of the
503	503	4 Internal Revenue Code, other than (i) a distribution
504	504	5 from a College Savings Pool created under Section 16.5
505	505	6 of the State Treasurer Act, (ii) a distribution from
506	506	7 the Illinois Prepaid Tuition Trust Fund, or (iii) a
507	507	8 distribution from a qualified tuition program under
508	508	9 Section 529 of the Internal Revenue Code that (I)
509	509	10 adopts and determines that its offering materials
510	510	11 comply with the College Savings Plans Network's
511	511	12 disclosure principles and (II) has made reasonable
512	512	13 efforts to inform in-state residents of the existence
513	513	14 of in-state qualified tuition programs by informing
514	514	15 Illinois residents directly and, where applicable, to
515	515	16 inform financial intermediaries distributing the
516	516	17 program to inform in-state residents of the existence
517	517	18 of in-state qualified tuition programs at least
518	518	19 annually, an amount equal to the amount excluded from
519	519	20 gross income under Section 529(c)(3)(B).
520	520	21 For the purposes of this subparagraph (D-20), a
521	521	22 qualified tuition program has made reasonable efforts
522	522	23 if it makes disclosures (which may use the term
523	523	24 "in-state program" or "in-state plan" and need not
524	524	25 specifically refer to Illinois or its qualified
525	525	26 programs by name) (i) directly to prospective
526	526
527	527
528	528
529	529
530	530
531	531	SB1956 - 14 - LRB104 06843 HLH 16879 b
532	532
533	533
534	534	SB1956- 15 -LRB104 06843 HLH 16879 b SB1956 - 15 - LRB104 06843 HLH 16879 b
535	535	SB1956 - 15 - LRB104 06843 HLH 16879 b
536	536	1 participants in its offering materials or makes a
537	537	2 public disclosure, such as a website posting; and (ii)
538	538	3 where applicable, to intermediaries selling the
539	539	4 out-of-state program in the same manner that the
540	540	5 out-of-state program distributes its offering
541	541	6 materials;
542	542	7 (D-20.5) For taxable years beginning on or after
543	543	8 January 1, 2018, in the case of a distribution from a
544	544	9 qualified ABLE program under Section 529A of the
545	545	10 Internal Revenue Code, other than a distribution from
546	546	11 a qualified ABLE program created under Section 16.6 of
547	547	12 the State Treasurer Act, an amount equal to the amount
548	548	13 excluded from gross income under Section 529A(c)(1)(B)
549	549	14 of the Internal Revenue Code;
550	550	15 (D-21) For taxable years beginning on or after
551	551	16 January 1, 2007, in the case of transfer of moneys from
552	552	17 a qualified tuition program under Section 529 of the
553	553	18 Internal Revenue Code that is administered by the
554	554	19 State to an out-of-state program, an amount equal to
555	555	20 the amount of moneys previously deducted from base
556	556	21 income under subsection (a)(2)(Y) of this Section;
557	557	22 (D-21.5) For taxable years beginning on or after
558	558	23 January 1, 2018, in the case of the transfer of moneys
559	559	24 from a qualified tuition program under Section 529 or
560	560	25 a qualified ABLE program under Section 529A of the
561	561	26 Internal Revenue Code that is administered by this
562	562
563	563
564	564
565	565
566	566
567	567	SB1956 - 15 - LRB104 06843 HLH 16879 b
568	568
569	569
570	570	SB1956- 16 -LRB104 06843 HLH 16879 b SB1956 - 16 - LRB104 06843 HLH 16879 b
571	571	SB1956 - 16 - LRB104 06843 HLH 16879 b
572	572	1 State to an ABLE account established under an
573	573	2 out-of-state ABLE account program, an amount equal to
574	574	3 the contribution component of the transferred amount
575	575	4 that was previously deducted from base income under
576	576	5 subsection (a)(2)(Y) or subsection (a)(2)(HH) of this
577	577	6 Section;
578	578	7 (D-22) For taxable years beginning on or after
579	579	8 January 1, 2009, and prior to January 1, 2018, in the
580	580	9 case of a nonqualified withdrawal or refund of moneys
581	581	10 from a qualified tuition program under Section 529 of
582	582	11 the Internal Revenue Code administered by the State
583	583	12 that is not used for qualified expenses at an eligible
584	584	13 education institution, an amount equal to the
585	585	14 contribution component of the nonqualified withdrawal
586	586	15 or refund that was previously deducted from base
587	587	16 income under subsection (a)(2)(y) of this Section,
588	588	17 provided that the withdrawal or refund did not result
589	589	18 from the beneficiary's death or disability. For
590	590	19 taxable years beginning on or after January 1, 2018:
591	591	20 (1) in the case of a nonqualified withdrawal or
592	592	21 refund, as defined under Section 16.5 of the State
593	593	22 Treasurer Act, of moneys from a qualified tuition
594	594	23 program under Section 529 of the Internal Revenue Code
595	595	24 administered by the State, an amount equal to the
596	596	25 contribution component of the nonqualified withdrawal
597	597	26 or refund that was previously deducted from base
598	598
599	599
600	600
601	601
602	602
603	603	SB1956 - 16 - LRB104 06843 HLH 16879 b
604	604
605	605
606	606	SB1956- 17 -LRB104 06843 HLH 16879 b SB1956 - 17 - LRB104 06843 HLH 16879 b
607	607	SB1956 - 17 - LRB104 06843 HLH 16879 b
608	608	1 income under subsection (a)(2)(Y) of this Section, and
609	609	2 (2) in the case of a nonqualified withdrawal or refund
610	610	3 from a qualified ABLE program under Section 529A of
611	611	4 the Internal Revenue Code administered by the State
612	612	5 that is not used for qualified disability expenses, an
613	613	6 amount equal to the contribution component of the
614	614	7 nonqualified withdrawal or refund that was previously
615	615	8 deducted from base income under subsection (a)(2)(HH)
616	616	9 of this Section;
617	617	10 (D-23) An amount equal to the credit allowable to
618	618	11 the taxpayer under Section 218(a) of this Act,
619	619	12 determined without regard to Section 218(c) of this
620	620	13 Act;
621	621	14 (D-24) For taxable years ending on or after
622	622	15 December 31, 2017, an amount equal to the deduction
623	623	16 allowed under Section 199 of the Internal Revenue Code
624	624	17 for the taxable year;
625	625	18 (D-25) In the case of a resident, an amount equal
626	626	19 to the amount of tax for which a credit is allowed
627	627	20 pursuant to Section 201(p)(7) of this Act;
628	628	21 and by deducting from the total so obtained the sum of the
629	629	22 following amounts:
630	630	23 (E) For taxable years ending before December 31,
631	631	24 2001, any amount included in such total in respect of
632	632	25 any compensation (including but not limited to any
633	633	26 compensation paid or accrued to a serviceman while a
634	634
635	635
636	636
637	637
638	638
639	639	SB1956 - 17 - LRB104 06843 HLH 16879 b
640	640
641	641
642	642	SB1956- 18 -LRB104 06843 HLH 16879 b SB1956 - 18 - LRB104 06843 HLH 16879 b
643	643	SB1956 - 18 - LRB104 06843 HLH 16879 b
644	644	1 prisoner of war or missing in action) paid to a
645	645	2 resident by reason of being on active duty in the Armed
646	646	3 Forces of the United States and in respect of any
647	647	4 compensation paid or accrued to a resident who as a
648	648	5 governmental employee was a prisoner of war or missing
649	649	6 in action, and in respect of any compensation paid to a
650	650	7 resident in 1971 or thereafter for annual training
651	651	8 performed pursuant to Sections 502 and 503, Title 32,
652	652	9 United States Code as a member of the Illinois
653	653	10 National Guard or, beginning with taxable years ending
654	654	11 on or after December 31, 2007, the National Guard of
655	655	12 any other state. For taxable years ending on or after
656	656	13 December 31, 2001, any amount included in such total
657	657	14 in respect of any compensation (including but not
658	658	15 limited to any compensation paid or accrued to a
659	659	16 serviceman while a prisoner of war or missing in
660	660	17 action) paid to a resident by reason of being a member
661	661	18 of any component of the Armed Forces of the United
662	662	19 States and in respect of any compensation paid or
663	663	20 accrued to a resident who as a governmental employee
664	664	21 was a prisoner of war or missing in action, and in
665	665	22 respect of any compensation paid to a resident in 2001
666	666	23 or thereafter by reason of being a member of the
667	667	24 Illinois National Guard or, beginning with taxable
668	668	25 years ending on or after December 31, 2007, the
669	669	26 National Guard of any other state. The provisions of
670	670
671	671
672	672
673	673
674	674
675	675	SB1956 - 18 - LRB104 06843 HLH 16879 b
676	676
677	677
678	678	SB1956- 19 -LRB104 06843 HLH 16879 b SB1956 - 19 - LRB104 06843 HLH 16879 b
679	679	SB1956 - 19 - LRB104 06843 HLH 16879 b
680	680	1 this subparagraph (E) are exempt from the provisions
681	681	2 of Section 250;
682	682	3 (F) An amount equal to all amounts included in
683	683	4 such total pursuant to the provisions of Sections
684	684	5 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
685	685	6 408 of the Internal Revenue Code, or included in such
686	686	7 total as distributions under the provisions of any
687	687	8 retirement or disability plan for employees of any
688	688	9 governmental agency or unit, or retirement payments to
689	689	10 retired partners, which payments are excluded in
690	690	11 computing net earnings from self employment by Section
691	691	12 1402 of the Internal Revenue Code and regulations
692	692	13 adopted pursuant thereto;
693	693	14 (G) The valuation limitation amount;
694	694	15 (H) An amount equal to the amount of any tax
695	695	16 imposed by this Act which was refunded to the taxpayer
696	696	17 and included in such total for the taxable year;
697	697	18 (I) An amount equal to all amounts included in
698	698	19 such total pursuant to the provisions of Section 111
699	699	20 of the Internal Revenue Code as a recovery of items
700	700	21 previously deducted from adjusted gross income in the
701	701	22 computation of taxable income;
702	702	23 (J) An amount equal to those dividends included in
703	703	24 such total which were paid by a corporation which
704	704	25 conducts business operations in a River Edge
705	705	26 Redevelopment Zone or zones created under the River
706	706
707	707
708	708
709	709
710	710
711	711	SB1956 - 19 - LRB104 06843 HLH 16879 b
712	712
713	713
714	714	SB1956- 20 -LRB104 06843 HLH 16879 b SB1956 - 20 - LRB104 06843 HLH 16879 b
715	715	SB1956 - 20 - LRB104 06843 HLH 16879 b
716	716	1 Edge Redevelopment Zone Act, and conducts
717	717	2 substantially all of its operations in a River Edge
718	718	3 Redevelopment Zone or zones. This subparagraph (J) is
719	719	4 exempt from the provisions of Section 250;
720	720	5 (K) An amount equal to those dividends included in
721	721	6 such total that were paid by a corporation that
722	722	7 conducts business operations in a federally designated
723	723	8 Foreign Trade Zone or Sub-Zone and that is designated
724	724	9 a High Impact Business located in Illinois; provided
725	725	10 that dividends eligible for the deduction provided in
726	726	11 subparagraph (J) of paragraph (2) of this subsection
727	727	12 shall not be eligible for the deduction provided under
728	728	13 this subparagraph (K);
729	729	14 (L) For taxable years ending after December 31,
730	730	15 1983, an amount equal to all social security benefits
731	731	16 and railroad retirement benefits included in such
732	732	17 total pursuant to Sections 72(r) and 86 of the
733	733	18 Internal Revenue Code;
734	734	19 (M) With the exception of any amounts subtracted
735	735	20 under subparagraph (N), an amount equal to the sum of
736	736	21 all amounts disallowed as deductions by (i) Sections
737	737	22 171(a)(2) and 265(a)(2) of the Internal Revenue Code,
738	738	23 and all amounts of expenses allocable to interest and
739	739	24 disallowed as deductions by Section 265(a)(1) of the
740	740	25 Internal Revenue Code; and (ii) for taxable years
741	741	26 ending on or after August 13, 1999, Sections
742	742
743	743
744	744
745	745
746	746
747	747	SB1956 - 20 - LRB104 06843 HLH 16879 b
748	748
749	749
750	750	SB1956- 21 -LRB104 06843 HLH 16879 b SB1956 - 21 - LRB104 06843 HLH 16879 b
751	751	SB1956 - 21 - LRB104 06843 HLH 16879 b
752	752	1 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
753	753	2 Internal Revenue Code, plus, for taxable years ending
754	754	3 on or after December 31, 2011, Section 45G(e)(3) of
755	755	4 the Internal Revenue Code and, for taxable years
756	756	5 ending on or after December 31, 2008, any amount
757	757	6 included in gross income under Section 87 of the
758	758	7 Internal Revenue Code; the provisions of this
759	759	8 subparagraph are exempt from the provisions of Section
760	760	9 250;
761	761	10 (N) An amount equal to all amounts included in
762	762	11 such total which are exempt from taxation by this
763	763	12 State either by reason of its statutes or Constitution
764	764	13 or by reason of the Constitution, treaties or statutes
765	765	14 of the United States; provided that, in the case of any
766	766	15 statute of this State that exempts income derived from
767	767	16 bonds or other obligations from the tax imposed under
768	768	17 this Act, the amount exempted shall be the interest
769	769	18 net of bond premium amortization;
770	770	19 (O) An amount equal to any contribution made to a
771	771	20 job training project established pursuant to the Tax
772	772	21 Increment Allocation Redevelopment Act;
773	773	22 (P) An amount equal to the amount of the deduction
774	774	23 used to compute the federal income tax credit for
775	775	24 restoration of substantial amounts held under claim of
776	776	25 right for the taxable year pursuant to Section 1341 of
777	777	26 the Internal Revenue Code or of any itemized deduction
778	778
779	779
780	780
781	781
782	782
783	783	SB1956 - 21 - LRB104 06843 HLH 16879 b
784	784
785	785
786	786	SB1956- 22 -LRB104 06843 HLH 16879 b SB1956 - 22 - LRB104 06843 HLH 16879 b
787	787	SB1956 - 22 - LRB104 06843 HLH 16879 b
788	788	1 taken from adjusted gross income in the computation of
789	789	2 taxable income for restoration of substantial amounts
790	790	3 held under claim of right for the taxable year;
791	791	4 (Q) An amount equal to any amounts included in
792	792	5 such total, received by the taxpayer as an
793	793	6 acceleration in the payment of life, endowment or
794	794	7 annuity benefits in advance of the time they would
795	795	8 otherwise be payable as an indemnity for a terminal
796	796	9 illness;
797	797	10 (R) An amount equal to the amount of any federal or
798	798	11 State bonus paid to veterans of the Persian Gulf War;
799	799	12 (S) An amount, to the extent included in adjusted
800	800	13 gross income, equal to the amount of a contribution
801	801	14 made in the taxable year on behalf of the taxpayer to a
802	802	15 medical care savings account established under the
803	803	16 Medical Care Savings Account Act or the Medical Care
804	804	17 Savings Account Act of 2000 to the extent the
805	805	18 contribution is accepted by the account administrator
806	806	19 as provided in that Act;
807	807	20 (T) An amount, to the extent included in adjusted
808	808	21 gross income, equal to the amount of interest earned
809	809	22 in the taxable year on a medical care savings account
810	810	23 established under the Medical Care Savings Account Act
811	811	24 or the Medical Care Savings Account Act of 2000 on
812	812	25 behalf of the taxpayer, other than interest added
813	813	26 pursuant to item (D-5) of this paragraph (2);
814	814
815	815
816	816
817	817
818	818
819	819	SB1956 - 22 - LRB104 06843 HLH 16879 b
820	820
821	821
822	822	SB1956- 23 -LRB104 06843 HLH 16879 b SB1956 - 23 - LRB104 06843 HLH 16879 b
823	823	SB1956 - 23 - LRB104 06843 HLH 16879 b
824	824	1 (U) For one taxable year beginning on or after
825	825	2 January 1, 1994, an amount equal to the total amount of
826	826	3 tax imposed and paid under subsections (a) and (b) of
827	827	4 Section 201 of this Act on grant amounts received by
828	828	5 the taxpayer under the Nursing Home Grant Assistance
829	829	6 Act during the taxpayer's taxable years 1992 and 1993;
830	830	7 (V) Beginning with tax years ending on or after
831	831	8 December 31, 1995 and ending with tax years ending on
832	832	9 or before December 31, 2004, an amount equal to the
833	833	10 amount paid by a taxpayer who is a self-employed
834	834	11 taxpayer, a partner of a partnership, or a shareholder
835	835	12 in a Subchapter S corporation for health insurance or
836	836	13 long-term care insurance for that taxpayer or that
837	837	14 taxpayer's spouse or dependents, to the extent that
838	838	15 the amount paid for that health insurance or long-term
839	839	16 care insurance may be deducted under Section 213 of
840	840	17 the Internal Revenue Code, has not been deducted on
841	841	18 the federal income tax return of the taxpayer, and
842	842	19 does not exceed the taxable income attributable to
843	843	20 that taxpayer's income, self-employment income, or
844	844	21 Subchapter S corporation income; except that no
845	845	22 deduction shall be allowed under this item (V) if the
846	846	23 taxpayer is eligible to participate in any health
847	847	24 insurance or long-term care insurance plan of an
848	848	25 employer of the taxpayer or the taxpayer's spouse. The
849	849	26 amount of the health insurance and long-term care
850	850
851	851
852	852
853	853
854	854
855	855	SB1956 - 23 - LRB104 06843 HLH 16879 b
856	856
857	857
858	858	SB1956- 24 -LRB104 06843 HLH 16879 b SB1956 - 24 - LRB104 06843 HLH 16879 b
859	859	SB1956 - 24 - LRB104 06843 HLH 16879 b
860	860	1 insurance subtracted under this item (V) shall be
861	861	2 determined by multiplying total health insurance and
862	862	3 long-term care insurance premiums paid by the taxpayer
863	863	4 times a number that represents the fractional
864	864	5 percentage of eligible medical expenses under Section
865	865	6 213 of the Internal Revenue Code of 1986 not actually
866	866	7 deducted on the taxpayer's federal income tax return;
867	867	8 (W) For taxable years beginning on or after
868	868	9 January 1, 1998, all amounts included in the
869	869	10 taxpayer's federal gross income in the taxable year
870	870	11 from amounts converted from a regular IRA to a Roth
871	871	12 IRA. This paragraph is exempt from the provisions of
872	872	13 Section 250;
873	873	14 (X) For taxable year 1999 and thereafter, an
874	874	15 amount equal to the amount of any (i) distributions,
875	875	16 to the extent includible in gross income for federal
876	876	17 income tax purposes, made to the taxpayer because of
877	877	18 his or her status as a victim of persecution for racial
878	878	19 or religious reasons by Nazi Germany or any other Axis
879	879	20 regime or as an heir of the victim and (ii) items of
880	880	21 income, to the extent includible in gross income for
881	881	22 federal income tax purposes, attributable to, derived
882	882	23 from or in any way related to assets stolen from,
883	883	24 hidden from, or otherwise lost to a victim of
884	884	25 persecution for racial or religious reasons by Nazi
885	885	26 Germany or any other Axis regime immediately prior to,
886	886
887	887
888	888
889	889
890	890
891	891	SB1956 - 24 - LRB104 06843 HLH 16879 b
892	892
893	893
894	894	SB1956- 25 -LRB104 06843 HLH 16879 b SB1956 - 25 - LRB104 06843 HLH 16879 b
895	895	SB1956 - 25 - LRB104 06843 HLH 16879 b
896	896	1 during, and immediately after World War II, including,
897	897	2 but not limited to, interest on the proceeds
898	898	3 receivable as insurance under policies issued to a
899	899	4 victim of persecution for racial or religious reasons
900	900	5 by Nazi Germany or any other Axis regime by European
901	901	6 insurance companies immediately prior to and during
902	902	7 World War II; provided, however, this subtraction from
903	903	8 federal adjusted gross income does not apply to assets
904	904	9 acquired with such assets or with the proceeds from
905	905	10 the sale of such assets; provided, further, this
906	906	11 paragraph shall only apply to a taxpayer who was the
907	907	12 first recipient of such assets after their recovery
908	908	13 and who is a victim of persecution for racial or
909	909	14 religious reasons by Nazi Germany or any other Axis
910	910	15 regime or as an heir of the victim. The amount of and
911	911	16 the eligibility for any public assistance, benefit, or
912	912	17 similar entitlement is not affected by the inclusion
913	913	18 of items (i) and (ii) of this paragraph in gross income
914	914	19 for federal income tax purposes. This paragraph is
915	915	20 exempt from the provisions of Section 250;
916	916	21 (Y) For taxable years beginning on or after
917	917	22 January 1, 2002 and ending on or before December 31,
918	918	23 2004, moneys contributed in the taxable year to a
919	919	24 College Savings Pool account under Section 16.5 of the
920	920	25 State Treasurer Act, except that amounts excluded from
921	921	26 gross income under Section 529(c)(3)(C)(i) of the
922	922
923	923
924	924
925	925
926	926
927	927	SB1956 - 25 - LRB104 06843 HLH 16879 b
928	928
929	929
930	930	SB1956- 26 -LRB104 06843 HLH 16879 b SB1956 - 26 - LRB104 06843 HLH 16879 b
931	931	SB1956 - 26 - LRB104 06843 HLH 16879 b
932	932	1 Internal Revenue Code shall not be considered moneys
933	933	2 contributed under this subparagraph (Y). For taxable
934	934	3 years beginning on or after January 1, 2005, a maximum
935	935	4 of $10,000 contributed in the taxable year to (i) a
936	936	5 College Savings Pool account under Section 16.5 of the
937	937	6 State Treasurer Act or (ii) the Illinois Prepaid
938	938	7 Tuition Trust Fund, except that amounts excluded from
939	939	8 gross income under Section 529(c)(3)(C)(i) of the
940	940	9 Internal Revenue Code shall not be considered moneys
941	941	10 contributed under this subparagraph (Y). For purposes
942	942	11 of this subparagraph, contributions made by an
943	943	12 employer on behalf of an employee, or matching
944	944	13 contributions made by an employee, shall be treated as
945	945	14 made by the employee. This subparagraph (Y) is exempt
946	946	15 from the provisions of Section 250;
947	947	16 (Z) For taxable years 2001 and thereafter, for the
948	948	17 taxable year in which the bonus depreciation deduction
949	949	18 is taken on the taxpayer's federal income tax return
950	950	19 under subsection (k) of Section 168 of the Internal
951	951	20 Revenue Code and for each applicable taxable year
952	952	21 thereafter, an amount equal to "x", where:
953	953	22 (1) "y" equals the amount of the depreciation
954	954	23 deduction taken for the taxable year on the
955	955	24 taxpayer's federal income tax return on property
956	956	25 for which the bonus depreciation deduction was
957	957	26 taken in any year under subsection (k) of Section
958	958
959	959
960	960
961	961
962	962
963	963	SB1956 - 26 - LRB104 06843 HLH 16879 b
964	964
965	965
966	966	SB1956- 27 -LRB104 06843 HLH 16879 b SB1956 - 27 - LRB104 06843 HLH 16879 b
967	967	SB1956 - 27 - LRB104 06843 HLH 16879 b
968	968	1 168 of the Internal Revenue Code, but not
969	969	2 including the bonus depreciation deduction;
970	970	3 (2) for taxable years ending on or before
971	971	4 December 31, 2005, "x" equals "y" multiplied by 30
972	972	5 and then divided by 70 (or "y" multiplied by
973	973	6 0.429); and
974	974	7 (3) for taxable years ending after December
975	975	8 31, 2005:
976	976	9 (i) for property on which a bonus
977	977	10 depreciation deduction of 30% of the adjusted
978	978	11 basis was taken, "x" equals "y" multiplied by
979	979	12 30 and then divided by 70 (or "y" multiplied
980	980	13 by 0.429);
981	981	14 (ii) for property on which a bonus
982	982	15 depreciation deduction of 50% of the adjusted
983	983	16 basis was taken, "x" equals "y" multiplied by
984	984	17 1.0;
985	985	18 (iii) for property on which a bonus
986	986	19 depreciation deduction of 100% of the adjusted
987	987	20 basis was taken in a taxable year ending on or
988	988	21 after December 31, 2021, "x" equals the
989	989	22 depreciation deduction that would be allowed
990	990	23 on that property if the taxpayer had made the
991	991	24 election under Section 168(k)(7) of the
992	992	25 Internal Revenue Code to not claim bonus
993	993	26 depreciation on that property; and
994	994
995	995
996	996
997	997
998	998
999	999	SB1956 - 27 - LRB104 06843 HLH 16879 b
1000	1000
1001	1001
1002	1002	SB1956- 28 -LRB104 06843 HLH 16879 b SB1956 - 28 - LRB104 06843 HLH 16879 b
1003	1003	SB1956 - 28 - LRB104 06843 HLH 16879 b
1004	1004	1 (iv) for property on which a bonus
1005	1005	2 depreciation deduction of a percentage other
1006	1006	3 than 30%, 50% or 100% of the adjusted basis
1007	1007	4 was taken in a taxable year ending on or after
1008	1008	5 December 31, 2021, "x" equals "y" multiplied
1009	1009	6 by 100 times the percentage bonus depreciation
1010	1010	7 on the property (that is, 100(bonus%)) and
1011	1011	8 then divided by 100 times 1 minus the
1012	1012	9 percentage bonus depreciation on the property
1013	1013	10 (that is, 100(1-bonus%)).
1014	1014	11 The aggregate amount deducted under this
1015	1015	12 subparagraph in all taxable years for any one piece of
1016	1016	13 property may not exceed the amount of the bonus
1017	1017	14 depreciation deduction taken on that property on the
1018	1018	15 taxpayer's federal income tax return under subsection
1019	1019	16 (k) of Section 168 of the Internal Revenue Code. This
1020	1020	17 subparagraph (Z) is exempt from the provisions of
1021	1021	18 Section 250;
1022	1022	19 (AA) If the taxpayer sells, transfers, abandons,
1023	1023	20 or otherwise disposes of property for which the
1024	1024	21 taxpayer was required in any taxable year to make an
1025	1025	22 addition modification under subparagraph (D-15), then
1026	1026	23 an amount equal to that addition modification.
1027	1027	24 If the taxpayer continues to own property through
1028	1028	25 the last day of the last tax year for which a
1029	1029	26 subtraction is allowed with respect to that property
1030	1030
1031	1031
1032	1032
1033	1033
1034	1034
1035	1035	SB1956 - 28 - LRB104 06843 HLH 16879 b
1036	1036
1037	1037
1038	1038	SB1956- 29 -LRB104 06843 HLH 16879 b SB1956 - 29 - LRB104 06843 HLH 16879 b
1039	1039	SB1956 - 29 - LRB104 06843 HLH 16879 b
1040	1040	1 under subparagraph (Z) and for which the taxpayer was
1041	1041	2 required in any taxable year to make an addition
1042	1042	3 modification under subparagraph (D-15), then an amount
1043	1043	4 equal to that addition modification.
1044	1044	5 The taxpayer is allowed to take the deduction
1045	1045	6 under this subparagraph only once with respect to any
1046	1046	7 one piece of property.
1047	1047	8 This subparagraph (AA) is exempt from the
1048	1048	9 provisions of Section 250;
1049	1049	10 (BB) Any amount included in adjusted gross income,
1050	1050	11 other than salary, received by a driver in a
1051	1051	12 ridesharing arrangement using a motor vehicle;
1052	1052	13 (CC) The amount of (i) any interest income (net of
1053	1053	14 the deductions allocable thereto) taken into account
1054	1054	15 for the taxable year with respect to a transaction
1055	1055	16 with a taxpayer that is required to make an addition
1056	1056	17 modification with respect to such transaction under
1057	1057	18 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
1058	1058	19 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
1059	1059	20 the amount of that addition modification, and (ii) any
1060	1060	21 income from intangible property (net of the deductions
1061	1061	22 allocable thereto) taken into account for the taxable
1062	1062	23 year with respect to a transaction with a taxpayer
1063	1063	24 that is required to make an addition modification with
1064	1064	25 respect to such transaction under Section
1065	1065	26 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
1066	1066
1067	1067
1068	1068
1069	1069
1070	1070
1071	1071	SB1956 - 29 - LRB104 06843 HLH 16879 b
1072	1072
1073	1073
1074	1074	SB1956- 30 -LRB104 06843 HLH 16879 b SB1956 - 30 - LRB104 06843 HLH 16879 b
1075	1075	SB1956 - 30 - LRB104 06843 HLH 16879 b
1076	1076	1 203(d)(2)(D-8), but not to exceed the amount of that
1077	1077	2 addition modification. This subparagraph (CC) is
1078	1078	3 exempt from the provisions of Section 250;
1079	1079	4 (DD) An amount equal to the interest income taken
1080	1080	5 into account for the taxable year (net of the
1081	1081	6 deductions allocable thereto) with respect to
1082	1082	7 transactions with (i) a foreign person who would be a
1083	1083	8 member of the taxpayer's unitary business group but
1084	1084	9 for the fact that the foreign person's business
1085	1085	10 activity outside the United States is 80% or more of
1086	1086	11 that person's total business activity and (ii) for
1087	1087	12 taxable years ending on or after December 31, 2008, to
1088	1088	13 a person who would be a member of the same unitary
1089	1089	14 business group but for the fact that the person is
1090	1090	15 prohibited under Section 1501(a)(27) from being
1091	1091	16 included in the unitary business group because he or
1092	1092	17 she is ordinarily required to apportion business
1093	1093	18 income under different subsections of Section 304, but
1094	1094	19 not to exceed the addition modification required to be
1095	1095	20 made for the same taxable year under Section
1096	1096	21 203(a)(2)(D-17) for interest paid, accrued, or
1097	1097	22 incurred, directly or indirectly, to the same person.
1098	1098	23 This subparagraph (DD) is exempt from the provisions
1099	1099	24 of Section 250;
1100	1100	25 (EE) An amount equal to the income from intangible
1101	1101	26 property taken into account for the taxable year (net
1102	1102
1103	1103
1104	1104
1105	1105
1106	1106
1107	1107	SB1956 - 30 - LRB104 06843 HLH 16879 b
1108	1108
1109	1109
1110	1110	SB1956- 31 -LRB104 06843 HLH 16879 b SB1956 - 31 - LRB104 06843 HLH 16879 b
1111	1111	SB1956 - 31 - LRB104 06843 HLH 16879 b
1112	1112	1 of the deductions allocable thereto) with respect to
1113	1113	2 transactions with (i) a foreign person who would be a
1114	1114	3 member of the taxpayer's unitary business group but
1115	1115	4 for the fact that the foreign person's business
1116	1116	5 activity outside the United States is 80% or more of
1117	1117	6 that person's total business activity and (ii) for
1118	1118	7 taxable years ending on or after December 31, 2008, to
1119	1119	8 a person who would be a member of the same unitary
1120	1120	9 business group but for the fact that the person is
1121	1121	10 prohibited under Section 1501(a)(27) from being
1122	1122	11 included in the unitary business group because he or
1123	1123	12 she is ordinarily required to apportion business
1124	1124	13 income under different subsections of Section 304, but
1125	1125	14 not to exceed the addition modification required to be
1126	1126	15 made for the same taxable year under Section
1127	1127	16 203(a)(2)(D-18) for intangible expenses and costs
1128	1128	17 paid, accrued, or incurred, directly or indirectly, to
1129	1129	18 the same foreign person. This subparagraph (EE) is
1130	1130	19 exempt from the provisions of Section 250;
1131	1131	20 (FF) An amount equal to any amount awarded to the
1132	1132	21 taxpayer during the taxable year by the Court of
1133	1133	22 Claims under subsection (c) of Section 8 of the Court
1134	1134	23 of Claims Act for time unjustly served in a State
1135	1135	24 prison. This subparagraph (FF) is exempt from the
1136	1136	25 provisions of Section 250;
1137	1137	26 (GG) For taxable years ending on or after December
1138	1138
1139	1139
1140	1140
1141	1141
1142	1142
1143	1143	SB1956 - 31 - LRB104 06843 HLH 16879 b
1144	1144
1145	1145
1146	1146	SB1956- 32 -LRB104 06843 HLH 16879 b SB1956 - 32 - LRB104 06843 HLH 16879 b
1147	1147	SB1956 - 32 - LRB104 06843 HLH 16879 b
1148	1148	1 31, 2011, in the case of a taxpayer who was required to
1149	1149	2 add back any insurance premiums under Section
1150	1150	3 203(a)(2)(D-19), such taxpayer may elect to subtract
1151	1151	4 that part of a reimbursement received from the
1152	1152	5 insurance company equal to the amount of the expense
1153	1153	6 or loss (including expenses incurred by the insurance
1154	1154	7 company) that would have been taken into account as a
1155	1155	8 deduction for federal income tax purposes if the
1156	1156	9 expense or loss had been uninsured. If a taxpayer
1157	1157	10 makes the election provided for by this subparagraph
1158	1158	11 (GG), the insurer to which the premiums were paid must
1159	1159	12 add back to income the amount subtracted by the
1160	1160	13 taxpayer pursuant to this subparagraph (GG). This
1161	1161	14 subparagraph (GG) is exempt from the provisions of
1162	1162	15 Section 250;
1163	1163	16 (HH) For taxable years beginning on or after
1164	1164	17 January 1, 2018 and prior to January 1, 2028, a maximum
1165	1165	18 of $10,000 contributed in the taxable year to a
1166	1166	19 qualified ABLE account under Section 16.6 of the State
1167	1167	20 Treasurer Act, except that amounts excluded from gross
1168	1168	21 income under Section 529(c)(3)(C)(i) or Section
1169	1169	22 529A(c)(1)(C) of the Internal Revenue Code shall not
1170	1170	23 be considered moneys contributed under this
1171	1171	24 subparagraph (HH). For purposes of this subparagraph
1172	1172	25 (HH), contributions made by an employer on behalf of
1173	1173	26 an employee, or matching contributions made by an
1174	1174
1175	1175
1176	1176
1177	1177
1178	1178
1179	1179	SB1956 - 32 - LRB104 06843 HLH 16879 b
1180	1180
1181	1181
1182	1182	SB1956- 33 -LRB104 06843 HLH 16879 b SB1956 - 33 - LRB104 06843 HLH 16879 b
1183	1183	SB1956 - 33 - LRB104 06843 HLH 16879 b
1184	1184	1 employee, shall be treated as made by the employee;
1185	1185	2 (II) For taxable years that begin on or after
1186	1186	3 January 1, 2021 and begin before January 1, 2026, the
1187	1187	4 amount that is included in the taxpayer's federal
1188	1188	5 adjusted gross income pursuant to Section 61 of the
1189	1189	6 Internal Revenue Code as discharge of indebtedness
1190	1190	7 attributable to student loan forgiveness and that is
1191	1191	8 not excluded from the taxpayer's federal adjusted
1192	1192	9 gross income pursuant to paragraph (5) of subsection
1193	1193	10 (f) of Section 108 of the Internal Revenue Code;
1194	1194	11 (JJ) For taxable years beginning on or after
1195	1195	12 January 1, 2023, for any cannabis establishment
1196	1196	13 operating in this State and licensed under the
1197	1197	14 Cannabis Regulation and Tax Act or any cannabis
1198	1198	15 cultivation center or medical cannabis dispensing
1199	1199	16 organization operating in this State and licensed
1200	1200	17 under the Compassionate Use of Medical Cannabis
1201	1201	18 Program Act, an amount equal to the deductions that
1202	1202	19 were disallowed under Section 280E of the Internal
1203	1203	20 Revenue Code for the taxable year and that would not be
1204	1204	21 added back under this subsection. The provisions of
1205	1205	22 this subparagraph (JJ) are exempt from the provisions
1206	1206	23 of Section 250; and
1207	1207	24 (KK) To the extent includible in gross income for
1208	1208	25 federal income tax purposes, any amount awarded or
1209	1209	26 paid to the taxpayer as a result of a judgment or
1210	1210
1211	1211
1212	1212
1213	1213
1214	1214
1215	1215	SB1956 - 33 - LRB104 06843 HLH 16879 b
1216	1216
1217	1217
1218	1218	SB1956- 34 -LRB104 06843 HLH 16879 b SB1956 - 34 - LRB104 06843 HLH 16879 b
1219	1219	SB1956 - 34 - LRB104 06843 HLH 16879 b
1220	1220	1 settlement for fertility fraud as provided in Section
1221	1221	2 15 of the Illinois Fertility Fraud Act, donor
1222	1222	3 fertility fraud as provided in Section 20 of the
1223	1223	4 Illinois Fertility Fraud Act, or similar action in
1224	1224	5 another state; and
1225	1225	6 (LL) For taxable years beginning on or after
1226	1226	7 January 1, 2026, if the taxpayer is a qualified
1227	1227	8 worker, as defined in the Workforce Development
1228	1228	9 through Charitable Loan Repayment Act, an amount equal
1229	1229	10 to the amount included in the taxpayer's federal
1230	1230	11 adjusted gross income that is attributable to student
1231	1231	12 loan repayment assistance received by the taxpayer
1232	1232	13 during the taxable year from a qualified community
1233	1233	14 foundation under the provisions of the Workforce
1234	1234	15 Development through Through Charitable Loan Repayment
1235	1235	16 Act.
1236	1236	17 This subparagraph (LL) is exempt from the
1237	1237	18 provisions of Section 250; and .
1238	1238	19 (MM) (LL) For taxable years beginning on or after
1239	1239	20 January 1, 2025, if the taxpayer is an eligible
1240	1240	21 resident as defined in the Medical Debt Relief Act, an
1241	1241	22 amount equal to the amount included in the taxpayer's
1242	1242	23 federal adjusted gross income that is attributable to
1243	1243	24 medical debt relief received by the taxpayer during
1244	1244	25 the taxable year from a nonprofit medical debt relief
1245	1245	26 coordinator under the provisions of the Medical Debt
1246	1246
1247	1247
1248	1248
1249	1249
1250	1250
1251	1251	SB1956 - 34 - LRB104 06843 HLH 16879 b
1252	1252
1253	1253
1254	1254	SB1956- 35 -LRB104 06843 HLH 16879 b SB1956 - 35 - LRB104 06843 HLH 16879 b
1255	1255	SB1956 - 35 - LRB104 06843 HLH 16879 b
1256	1256	1 Relief Act. This subparagraph (MM) (LL) is exempt from
1257	1257	2 the provisions of Section 250.
1258	1258	3 (b) Corporations.
1259	1259	4 (1) In general. In the case of a corporation, base
1260	1260	5 income means an amount equal to the taxpayer's taxable
1261	1261	6 income for the taxable year as modified by paragraph (2).
1262	1262	7 (2) Modifications. The taxable income referred to in
1263	1263	8 paragraph (1) shall be modified by adding thereto the sum
1264	1264	9 of the following amounts:
1265	1265	10 (A) An amount equal to all amounts paid or accrued
1266	1266	11 to the taxpayer as interest and all distributions
1267	1267	12 received from regulated investment companies during
1268	1268	13 the taxable year to the extent excluded from gross
1269	1269	14 income in the computation of taxable income;
1270	1270	15 (B) An amount equal to the amount of tax imposed by
1271	1271	16 this Act to the extent deducted from gross income in
1272	1272	17 the computation of taxable income for the taxable
1273	1273	18 year;
1274	1274	19 (C) In the case of a regulated investment company,
1275	1275	20 an amount equal to the excess of (i) the net long-term
1276	1276	21 capital gain for the taxable year, over (ii) the
1277	1277	22 amount of the capital gain dividends designated as
1278	1278	23 such in accordance with Section 852(b)(3)(C) of the
1279	1279	24 Internal Revenue Code and any amount designated under
1280	1280	25 Section 852(b)(3)(D) of the Internal Revenue Code,
1281	1281
1282	1282
1283	1283
1284	1284
1285	1285
1286	1286	SB1956 - 35 - LRB104 06843 HLH 16879 b
1287	1287
1288	1288
1289	1289	SB1956- 36 -LRB104 06843 HLH 16879 b SB1956 - 36 - LRB104 06843 HLH 16879 b
1290	1290	SB1956 - 36 - LRB104 06843 HLH 16879 b
1291	1291	1 attributable to the taxable year (this amendatory Act
1292	1292	2 of 1995 (Public Act 89-89) is declarative of existing
1293	1293	3 law and is not a new enactment);
1294	1294	4 (D) The amount of any net operating loss deduction
1295	1295	5 taken in arriving at taxable income, other than a net
1296	1296	6 operating loss carried forward from a taxable year
1297	1297	7 ending prior to December 31, 1986;
1298	1298	8 (E) For taxable years in which a net operating
1299	1299	9 loss carryback or carryforward from a taxable year
1300	1300	10 ending prior to December 31, 1986 is an element of
1301	1301	11 taxable income under paragraph (1) of subsection (e)
1302	1302	12 or subparagraph (E) of paragraph (2) of subsection
1303	1303	13 (e), the amount by which addition modifications other
1304	1304	14 than those provided by this subparagraph (E) exceeded
1305	1305	15 subtraction modifications in such earlier taxable
1306	1306	16 year, with the following limitations applied in the
1307	1307	17 order that they are listed:
1308	1308	18 (i) the addition modification relating to the
1309	1309	19 net operating loss carried back or forward to the
1310	1310	20 taxable year from any taxable year ending prior to
1311	1311	21 December 31, 1986 shall be reduced by the amount
1312	1312	22 of addition modification under this subparagraph
1313	1313	23 (E) which related to that net operating loss and
1314	1314	24 which was taken into account in calculating the
1315	1315	25 base income of an earlier taxable year, and
1316	1316	26 (ii) the addition modification relating to the
1317	1317
1318	1318
1319	1319
1320	1320
1321	1321
1322	1322	SB1956 - 36 - LRB104 06843 HLH 16879 b
1323	1323
1324	1324
1325	1325	SB1956- 37 -LRB104 06843 HLH 16879 b SB1956 - 37 - LRB104 06843 HLH 16879 b
1326	1326	SB1956 - 37 - LRB104 06843 HLH 16879 b
1327	1327	1 net operating loss carried back or forward to the
1328	1328	2 taxable year from any taxable year ending prior to
1329	1329	3 December 31, 1986 shall not exceed the amount of
1330	1330	4 such carryback or carryforward;
1331	1331	5 For taxable years in which there is a net
1332	1332	6 operating loss carryback or carryforward from more
1333	1333	7 than one other taxable year ending prior to December
1334	1334	8 31, 1986, the addition modification provided in this
1335	1335	9 subparagraph (E) shall be the sum of the amounts
1336	1336	10 computed independently under the preceding provisions
1337	1337	11 of this subparagraph (E) for each such taxable year;
1338	1338	12 (E-5) For taxable years ending after December 31,
1339	1339	13 1997, an amount equal to any eligible remediation
1340	1340	14 costs that the corporation deducted in computing
1341	1341	15 adjusted gross income and for which the corporation
1342	1342	16 claims a credit under subsection (l) of Section 201;
1343	1343	17 (E-10) For taxable years 2001 and thereafter, an
1344	1344	18 amount equal to the bonus depreciation deduction taken
1345	1345	19 on the taxpayer's federal income tax return for the
1346	1346	20 taxable year under subsection (k) of Section 168 of
1347	1347	21 the Internal Revenue Code;
1348	1348	22 (E-11) If the taxpayer sells, transfers, abandons,
1349	1349	23 or otherwise disposes of property for which the
1350	1350	24 taxpayer was required in any taxable year to make an
1351	1351	25 addition modification under subparagraph (E-10), then
1352	1352	26 an amount equal to the aggregate amount of the
1353	1353
1354	1354
1355	1355
1356	1356
1357	1357
1358	1358	SB1956 - 37 - LRB104 06843 HLH 16879 b
1359	1359
1360	1360
1361	1361	SB1956- 38 -LRB104 06843 HLH 16879 b SB1956 - 38 - LRB104 06843 HLH 16879 b
1362	1362	SB1956 - 38 - LRB104 06843 HLH 16879 b
1363	1363	1 deductions taken in all taxable years under
1364	1364	2 subparagraph (T) with respect to that property.
1365	1365	3 If the taxpayer continues to own property through
1366	1366	4 the last day of the last tax year for which a
1367	1367	5 subtraction is allowed with respect to that property
1368	1368	6 under subparagraph (T) and for which the taxpayer was
1369	1369	7 allowed in any taxable year to make a subtraction
1370	1370	8 modification under subparagraph (T), then an amount
1371	1371	9 equal to that subtraction modification.
1372	1372	10 The taxpayer is required to make the addition
1373	1373	11 modification under this subparagraph only once with
1374	1374	12 respect to any one piece of property;
1375	1375	13 (E-12) An amount equal to the amount otherwise
1376	1376	14 allowed as a deduction in computing base income for
1377	1377	15 interest paid, accrued, or incurred, directly or
1378	1378	16 indirectly, (i) for taxable years ending on or after
1379	1379	17 December 31, 2004, to a foreign person who would be a
1380	1380	18 member of the same unitary business group but for the
1381	1381	19 fact the foreign person's business activity outside
1382	1382	20 the United States is 80% or more of the foreign
1383	1383	21 person's total business activity and (ii) for taxable
1384	1384	22 years ending on or after December 31, 2008, to a person
1385	1385	23 who would be a member of the same unitary business
1386	1386	24 group but for the fact that the person is prohibited
1387	1387	25 under Section 1501(a)(27) from being included in the
1388	1388	26 unitary business group because he or she is ordinarily
1389	1389
1390	1390
1391	1391
1392	1392
1393	1393
1394	1394	SB1956 - 38 - LRB104 06843 HLH 16879 b
1395	1395
1396	1396
1397	1397	SB1956- 39 -LRB104 06843 HLH 16879 b SB1956 - 39 - LRB104 06843 HLH 16879 b
1398	1398	SB1956 - 39 - LRB104 06843 HLH 16879 b
1399	1399	1 required to apportion business income under different
1400	1400	2 subsections of Section 304. The addition modification
1401	1401	3 required by this subparagraph shall be reduced to the
1402	1402	4 extent that dividends were included in base income of
1403	1403	5 the unitary group for the same taxable year and
1404	1404	6 received by the taxpayer or by a member of the
1405	1405	7 taxpayer's unitary business group (including amounts
1406	1406	8 included in gross income pursuant to Sections 951
1407	1407	9 through 964 of the Internal Revenue Code and amounts
1408	1408	10 included in gross income under Section 78 of the
1409	1409	11 Internal Revenue Code) with respect to the stock of
1410	1410	12 the same person to whom the interest was paid,
1411	1411	13 accrued, or incurred. For taxable years ending on and
1412	1412	14 after December 31, 2025, for purposes of applying this
1413	1413	15 paragraph in the case of a taxpayer to which
1414	1414	16 subsection (j) of Section 163 of the Internal Revenue
1415	1415	17 Code applies for the taxable year, the reduction in
1416	1416	18 the amount of interest for which a deduction is
1417	1417	19 allowed by reason of subsection (j) of Section 163
1418	1418	20 shall be treated as allocable first to persons who are
1419	1419	21 not foreign persons referred to in this paragraph and
1420	1420	22 then to those foreign persons.
1421	1421	23 For taxable years ending before December 31, 2025,
1422	1422	24 this This paragraph shall not apply to the following:
1423	1423	25 (i) an item of interest paid, accrued, or
1424	1424	26 incurred, directly or indirectly, to a person who
1425	1425
1426	1426
1427	1427
1428	1428
1429	1429
1430	1430	SB1956 - 39 - LRB104 06843 HLH 16879 b
1431	1431
1432	1432
1433	1433	SB1956- 40 -LRB104 06843 HLH 16879 b SB1956 - 40 - LRB104 06843 HLH 16879 b
1434	1434	SB1956 - 40 - LRB104 06843 HLH 16879 b
1435	1435	1 is subject in a foreign country or state, other
1436	1436	2 than a state which requires mandatory unitary
1437	1437	3 reporting, to a tax on or measured by net income
1438	1438	4 with respect to such interest; or
1439	1439	5 (ii) an item of interest paid, accrued, or
1440	1440	6 incurred, directly or indirectly, to a person if
1441	1441	7 the taxpayer can establish, based on a
1442	1442	8 preponderance of the evidence, both of the
1443	1443	9 following:
1444	1444	10 (a) the person, during the same taxable
1445	1445	11 year, paid, accrued, or incurred, the interest
1446	1446	12 to a person that is not a related member, and
1447	1447	13 (b) the transaction giving rise to the
1448	1448	14 interest expense between the taxpayer and the
1449	1449	15 person did not have as a principal purpose the
1450	1450	16 avoidance of Illinois income tax, and is paid
1451	1451	17 pursuant to a contract or agreement that
1452	1452	18 reflects an arm's-length interest rate and
1453	1453	19 terms; or
1454	1454	20 (iii) the taxpayer can establish, based on
1455	1455	21 clear and convincing evidence, that the interest
1456	1456	22 paid, accrued, or incurred relates to a contract
1457	1457	23 or agreement entered into at arm's-length rates
1458	1458	24 and terms and the principal purpose for the
1459	1459	25 payment is not federal or Illinois tax avoidance;
1460	1460	26 or
1461	1461
1462	1462
1463	1463
1464	1464
1465	1465
1466	1466	SB1956 - 40 - LRB104 06843 HLH 16879 b
1467	1467
1468	1468
1469	1469	SB1956- 41 -LRB104 06843 HLH 16879 b SB1956 - 41 - LRB104 06843 HLH 16879 b
1470	1470	SB1956 - 41 - LRB104 06843 HLH 16879 b
1471	1471	1 (iv) an item of interest paid, accrued, or
1472	1472	2 incurred, directly or indirectly, to a person if
1473	1473	3 the taxpayer establishes by clear and convincing
1474	1474	4 evidence that the adjustments are unreasonable; or
1475	1475	5 if the taxpayer and the Director agree in writing
1476	1476	6 to the application or use of an alternative method
1477	1477	7 of apportionment under Section 304(f).
1478	1478	8 For taxable years ending on or after December 31,
1479	1479	9 2025, this paragraph shall not apply to the following:
1480	1480	10 (i) an item of interest paid, accrued, or
1481	1481	11 incurred, directly or indirectly, to a person if
1482	1482	12 the taxpayer can establish, based on a
1483	1483	13 preponderance of the evidence, both of the
1484	1484	14 following:
1485	1485	15 (a) the person, during the same taxable
1486	1486	16 year, paid, accrued, or incurred, the interest
1487	1487	17 to a person that is not a related member, and
1488	1488	18 (b) the transaction giving rise to the
1489	1489	19 interest expense between the taxpayer and the
1490	1490	20 person did not have as a principal purpose the
1491	1491	21 avoidance of Illinois income tax and is paid
1492	1492	22 pursuant to a contract or agreement that
1493	1493	23 reflects an arm's-length interest rate and
1494	1494	24 terms; or
1495	1495	25 (ii) an item of interest paid, accrued, or
1496	1496	26 incurred, directly or indirectly, to a person if
1497	1497
1498	1498
1499	1499
1500	1500
1501	1501
1502	1502	SB1956 - 41 - LRB104 06843 HLH 16879 b
1503	1503
1504	1504
1505	1505	SB1956- 42 -LRB104 06843 HLH 16879 b SB1956 - 42 - LRB104 06843 HLH 16879 b
1506	1506	SB1956 - 42 - LRB104 06843 HLH 16879 b
1507	1507	1 the taxpayer establishes, by clear and convincing
1508	1508	2 evidence that the adjustments are unreasonable; or
1509	1509	3 if the taxpayer and the Director agree in writing
1510	1510	4 to the application or use of an alternative method
1511	1511	5 of apportionment under Section 304(f).
1512	1512	6 Nothing in this subsection shall preclude the
1513	1513	7 Director from making any other adjustment
1514	1514	8 otherwise allowed under Section 404 of this Act
1515	1515	9 for any tax year beginning after the effective
1516	1516	10 date of this amendment provided such adjustment is
1517	1517	11 made pursuant to regulation adopted by the
1518	1518	12 Department and such regulations provide methods
1519	1519	13 and standards by which the Department will utilize
1520	1520	14 its authority under Section 404 of this Act;
1521	1521	15 (E-13) An amount equal to the amount of intangible
1522	1522	16 expenses and costs otherwise allowed as a deduction in
1523	1523	17 computing base income, and that were paid, accrued, or
1524	1524	18 incurred, directly or indirectly, (i) for taxable
1525	1525	19 years ending on or after December 31, 2004, to a
1526	1526	20 foreign person who would be a member of the same
1527	1527	21 unitary business group but for the fact that the
1528	1528	22 foreign person's business activity outside the United
1529	1529	23 States is 80% or more of that person's total business
1530	1530	24 activity and (ii) for taxable years ending on or after
1531	1531	25 December 31, 2008, to a person who would be a member of
1532	1532	26 the same unitary business group but for the fact that
1533	1533
1534	1534
1535	1535
1536	1536
1537	1537
1538	1538	SB1956 - 42 - LRB104 06843 HLH 16879 b
1539	1539
1540	1540
1541	1541	SB1956- 43 -LRB104 06843 HLH 16879 b SB1956 - 43 - LRB104 06843 HLH 16879 b
1542	1542	SB1956 - 43 - LRB104 06843 HLH 16879 b
1543	1543	1 the person is prohibited under Section 1501(a)(27)
1544	1544	2 from being included in the unitary business group
1545	1545	3 because he or she is ordinarily required to apportion
1546	1546	4 business income under different subsections of Section
1547	1547	5 304. The addition modification required by this
1548	1548	6 subparagraph shall be reduced to the extent that
1549	1549	7 dividends were included in base income of the unitary
1550	1550	8 group for the same taxable year and received by the
1551	1551	9 taxpayer or by a member of the taxpayer's unitary
1552	1552	10 business group (including amounts included in gross
1553	1553	11 income pursuant to Sections 951 through 964 of the
1554	1554	12 Internal Revenue Code and amounts included in gross
1555	1555	13 income under Section 78 of the Internal Revenue Code)
1556	1556	14 with respect to the stock of the same person to whom
1557	1557	15 the intangible expenses and costs were directly or
1558	1558	16 indirectly paid, incurred, or accrued. The preceding
1559	1559	17 sentence shall not apply to the extent that the same
1560	1560	18 dividends caused a reduction to the addition
1561	1561	19 modification required under Section 203(b)(2)(E-12) of
1562	1562	20 this Act. As used in this subparagraph, the term
1563	1563	21 "intangible expenses and costs" includes (1) expenses,
1564	1564	22 losses, and costs for, or related to, the direct or
1565	1565	23 indirect acquisition, use, maintenance or management,
1566	1566	24 ownership, sale, exchange, or any other disposition of
1567	1567	25 intangible property; (2) losses incurred, directly or
1568	1568	26 indirectly, from factoring transactions or discounting
1569	1569
1570	1570
1571	1571
1572	1572
1573	1573
1574	1574	SB1956 - 43 - LRB104 06843 HLH 16879 b
1575	1575
1576	1576
1577	1577	SB1956- 44 -LRB104 06843 HLH 16879 b SB1956 - 44 - LRB104 06843 HLH 16879 b
1578	1578	SB1956 - 44 - LRB104 06843 HLH 16879 b
1579	1579	1 transactions; (3) royalty, patent, technical, and
1580	1580	2 copyright fees; (4) licensing fees; and (5) other
1581	1581	3 similar expenses and costs. For purposes of this
1582	1582	4 subparagraph, "intangible property" includes patents,
1583	1583	5 patent applications, trade names, trademarks, service
1584	1584	6 marks, copyrights, mask works, trade secrets, and
1585	1585	7 similar types of intangible assets.
1586	1586	8 For taxable years ending before December 31, 2025,
1587	1587	9 this This paragraph shall not apply to the following:
1588	1588	10 (i) any item of intangible expenses or costs
1589	1589	11 paid, accrued, or incurred, directly or
1590	1590	12 indirectly, from a transaction with a person who
1591	1591	13 is subject in a foreign country or state, other
1592	1592	14 than a state which requires mandatory unitary
1593	1593	15 reporting, to a tax on or measured by net income
1594	1594	16 with respect to such item; or
1595	1595	17 (ii) any item of intangible expense or cost
1596	1596	18 paid, accrued, or incurred, directly or
1597	1597	19 indirectly, if the taxpayer can establish, based
1598	1598	20 on a preponderance of the evidence, both of the
1599	1599	21 following:
1600	1600	22 (a) the person during the same taxable
1601	1601	23 year paid, accrued, or incurred, the
1602	1602	24 intangible expense or cost to a person that is
1603	1603	25 not a related member, and
1604	1604	26 (b) the transaction giving rise to the
1605	1605
1606	1606
1607	1607
1608	1608
1609	1609
1610	1610	SB1956 - 44 - LRB104 06843 HLH 16879 b
1611	1611
1612	1612
1613	1613	SB1956- 45 -LRB104 06843 HLH 16879 b SB1956 - 45 - LRB104 06843 HLH 16879 b
1614	1614	SB1956 - 45 - LRB104 06843 HLH 16879 b
1615	1615	1 intangible expense or cost between the
1616	1616	2 taxpayer and the person did not have as a
1617	1617	3 principal purpose the avoidance of Illinois
1618	1618	4 income tax, and is paid pursuant to a contract
1619	1619	5 or agreement that reflects arm's-length terms;
1620	1620	6 or
1621	1621	7 (iii) any item of intangible expense or cost
1622	1622	8 paid, accrued, or incurred, directly or
1623	1623	9 indirectly, from a transaction with a person if
1624	1624	10 the taxpayer establishes by clear and convincing
1625	1625	11 evidence, that the adjustments are unreasonable;
1626	1626	12 or if the taxpayer and the Director agree in
1627	1627	13 writing to the application or use of an
1628	1628	14 alternative method of apportionment under Section
1629	1629	15 304(f);
1630	1630	16 For taxable years ending on or after December 31,
1631	1631	17 2025, this paragraph shall not apply to the following:
1632	1632	18 (i) any item of intangible expense or cost
1633	1633	19 paid, accrued, or incurred, directly or
1634	1634	20 indirectly, if the taxpayer can establish, based
1635	1635	21 on a preponderance of the evidence, both of the
1636	1636	22 following:
1637	1637	23 (a) the person during the same taxable
1638	1638	24 year paid, accrued, or incurred, the
1639	1639	25 intangible expense or cost to a person that is
1640	1640	26 not a related member, and
1641	1641
1642	1642
1643	1643
1644	1644
1645	1645
1646	1646	SB1956 - 45 - LRB104 06843 HLH 16879 b
1647	1647
1648	1648
1649	1649	SB1956- 46 -LRB104 06843 HLH 16879 b SB1956 - 46 - LRB104 06843 HLH 16879 b
1650	1650	SB1956 - 46 - LRB104 06843 HLH 16879 b
1651	1651	1 (b) the transaction giving rise to the
1652	1652	2 intangible expense or cost between the
1653	1653	3 taxpayer and the person did not have as a
1654	1654	4 principal purpose the avoidance of Illinois
1655	1655	5 income tax and is paid pursuant to a contract
1656	1656	6 or agreement that reflects arm's-length terms;
1657	1657	7 or
1658	1658	8 (ii) any item of intangible expense or cost
1659	1659	9 paid, accrued, or incurred, directly or
1660	1660	10 indirectly, from a transaction with a person if
1661	1661	11 the taxpayer establishes, by clear and convincing
1662	1662	12 evidence, that the adjustments are unreasonable;
1663	1663	13 or if the taxpayer and the Director agree in
1664	1664	14 writing to the application or use of an
1665	1665	15 alternative method of apportionment under Section
1666	1666	16 304(f).
1667	1667	17 Nothing in this subsection shall preclude the
1668	1668	18 Director from making any other adjustment
1669	1669	19 otherwise allowed under Section 404 of this Act
1670	1670	20 for any tax year beginning after the effective
1671	1671	21 date of this amendment provided such adjustment is
1672	1672	22 made pursuant to regulation adopted by the
1673	1673	23 Department and such regulations provide methods
1674	1674	24 and standards by which the Department will utilize
1675	1675	25 its authority under Section 404 of this Act;
1676	1676	26 (E-14) For taxable years ending on or after
1677	1677
1678	1678
1679	1679
1680	1680
1681	1681
1682	1682	SB1956 - 46 - LRB104 06843 HLH 16879 b
1683	1683
1684	1684
1685	1685	SB1956- 47 -LRB104 06843 HLH 16879 b SB1956 - 47 - LRB104 06843 HLH 16879 b
1686	1686	SB1956 - 47 - LRB104 06843 HLH 16879 b
1687	1687	1 December 31, 2008, an amount equal to the amount of
1688	1688	2 insurance premium expenses and costs otherwise allowed
1689	1689	3 as a deduction in computing base income, and that were
1690	1690	4 paid, accrued, or incurred, directly or indirectly, to
1691	1691	5 a person who would be a member of the same unitary
1692	1692	6 business group but for the fact that the person is
1693	1693	7 prohibited under Section 1501(a)(27) from being
1694	1694	8 included in the unitary business group because he or
1695	1695	9 she is ordinarily required to apportion business
1696	1696	10 income under different subsections of Section 304. The
1697	1697	11 addition modification required by this subparagraph
1698	1698	12 shall be reduced to the extent that dividends were
1699	1699	13 included in base income of the unitary group for the
1700	1700	14 same taxable year and received by the taxpayer or by a
1701	1701	15 member of the taxpayer's unitary business group
1702	1702	16 (including amounts included in gross income under
1703	1703	17 Sections 951 through 964 of the Internal Revenue Code
1704	1704	18 and amounts included in gross income under Section 78
1705	1705	19 of the Internal Revenue Code) with respect to the
1706	1706	20 stock of the same person to whom the premiums and costs
1707	1707	21 were directly or indirectly paid, incurred, or
1708	1708	22 accrued. The preceding sentence does not apply to the
1709	1709	23 extent that the same dividends caused a reduction to
1710	1710	24 the addition modification required under Section
1711	1711	25 203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this
1712	1712	26 Act;
1713	1713
1714	1714
1715	1715
1716	1716
1717	1717
1718	1718	SB1956 - 47 - LRB104 06843 HLH 16879 b
1719	1719
1720	1720
1721	1721	SB1956- 48 -LRB104 06843 HLH 16879 b SB1956 - 48 - LRB104 06843 HLH 16879 b
1722	1722	SB1956 - 48 - LRB104 06843 HLH 16879 b
1723	1723	1 (E-15) For taxable years beginning after December
1724	1724	2 31, 2008, any deduction for dividends paid by a
1725	1725	3 captive real estate investment trust that is allowed
1726	1726	4 to a real estate investment trust under Section
1727	1727	5 857(b)(2)(B) of the Internal Revenue Code for
1728	1728	6 dividends paid;
1729	1729	7 (E-16) An amount equal to the credit allowable to
1730	1730	8 the taxpayer under Section 218(a) of this Act,
1731	1731	9 determined without regard to Section 218(c) of this
1732	1732	10 Act;
1733	1733	11 (E-17) For taxable years ending on or after
1734	1734	12 December 31, 2017, an amount equal to the deduction
1735	1735	13 allowed under Section 199 of the Internal Revenue Code
1736	1736	14 for the taxable year;
1737	1737	15 (E-18) for taxable years beginning after December
1738	1738	16 31, 2018, an amount equal to the deduction allowed
1739	1739	17 under Section 250(a)(1)(A) of the Internal Revenue
1740	1740	18 Code for the taxable year;
1741	1741	19 (E-19) for taxable years ending on or after June
1742	1742	20 30, 2021, an amount equal to the deduction allowed
1743	1743	21 under Section 250(a)(1)(B)(i) of the Internal Revenue
1744	1744	22 Code for the taxable year;
1745	1745	23 (E-20) for taxable years ending on or after June
1746	1746	24 30, 2021, an amount equal to the deduction allowed
1747	1747	25 under Sections 243(e) and 245A(a) of the Internal
1748	1748	26 Revenue Code for the taxable year;
1749	1749
1750	1750
1751	1751
1752	1752
1753	1753
1754	1754	SB1956 - 48 - LRB104 06843 HLH 16879 b
1755	1755
1756	1756
1757	1757	SB1956- 49 -LRB104 06843 HLH 16879 b SB1956 - 49 - LRB104 06843 HLH 16879 b
1758	1758	SB1956 - 49 - LRB104 06843 HLH 16879 b
1759	1759	1 (E-21) the amount that is claimed as a federal
1760	1760	2 deduction when computing the taxpayer's federal
1761	1761	3 taxable income for the taxable year and that is
1762	1762	4 attributable to an endowment gift for which the
1763	1763	5 taxpayer receives a credit under the Illinois Gives
1764	1764	6 Tax Credit Act;
1765	1765	7 and by deducting from the total so obtained the sum of the
1766	1766	8 following amounts:
1767	1767	9 (F) An amount equal to the amount of any tax
1768	1768	10 imposed by this Act which was refunded to the taxpayer
1769	1769	11 and included in such total for the taxable year;
1770	1770	12 (G) An amount equal to any amount included in such
1771	1771	13 total under Section 78 of the Internal Revenue Code;
1772	1772	14 (H) In the case of a regulated investment company,
1773	1773	15 an amount equal to the amount of exempt interest
1774	1774	16 dividends as defined in subsection (b)(5) of Section
1775	1775	17 852 of the Internal Revenue Code, paid to shareholders
1776	1776	18 for the taxable year;
1777	1777	19 (I) With the exception of any amounts subtracted
1778	1778	20 under subparagraph (J), an amount equal to the sum of
1779	1779	21 all amounts disallowed as deductions by (i) Sections
1780	1780	22 171(a)(2) and 265(a)(2) and amounts disallowed as
1781	1781	23 interest expense by Section 291(a)(3) of the Internal
1782	1782	24 Revenue Code, and all amounts of expenses allocable to
1783	1783	25 interest and disallowed as deductions by Section
1784	1784	26 265(a)(1) of the Internal Revenue Code; and (ii) for
1785	1785
1786	1786
1787	1787
1788	1788
1789	1789
1790	1790	SB1956 - 49 - LRB104 06843 HLH 16879 b
1791	1791
1792	1792
1793	1793	SB1956- 50 -LRB104 06843 HLH 16879 b SB1956 - 50 - LRB104 06843 HLH 16879 b
1794	1794	SB1956 - 50 - LRB104 06843 HLH 16879 b
1795	1795	1 taxable years ending on or after August 13, 1999,
1796	1796	2 Sections 171(a)(2), 265, 280C, 291(a)(3), and
1797	1797	3 832(b)(5)(B)(i) of the Internal Revenue Code, plus,
1798	1798	4 for tax years ending on or after December 31, 2011,
1799	1799	5 amounts disallowed as deductions by Section 45G(e)(3)
1800	1800	6 of the Internal Revenue Code and, for taxable years
1801	1801	7 ending on or after December 31, 2008, any amount
1802	1802	8 included in gross income under Section 87 of the
1803	1803	9 Internal Revenue Code and the policyholders' share of
1804	1804	10 tax-exempt interest of a life insurance company under
1805	1805	11 Section 807(a)(2)(B) of the Internal Revenue Code (in
1806	1806	12 the case of a life insurance company with gross income
1807	1807	13 from a decrease in reserves for the tax year) or
1808	1808	14 Section 807(b)(1)(B) of the Internal Revenue Code (in
1809	1809	15 the case of a life insurance company allowed a
1810	1810	16 deduction for an increase in reserves for the tax
1811	1811	17 year); the provisions of this subparagraph are exempt
1812	1812	18 from the provisions of Section 250;
1813	1813	19 (J) An amount equal to all amounts included in
1814	1814	20 such total which are exempt from taxation by this
1815	1815	21 State either by reason of its statutes or Constitution
1816	1816	22 or by reason of the Constitution, treaties or statutes
1817	1817	23 of the United States; provided that, in the case of any
1818	1818	24 statute of this State that exempts income derived from
1819	1819	25 bonds or other obligations from the tax imposed under
1820	1820	26 this Act, the amount exempted shall be the interest
1821	1821
1822	1822
1823	1823
1824	1824
1825	1825
1826	1826	SB1956 - 50 - LRB104 06843 HLH 16879 b
1827	1827
1828	1828
1829	1829	SB1956- 51 -LRB104 06843 HLH 16879 b SB1956 - 51 - LRB104 06843 HLH 16879 b
1830	1830	SB1956 - 51 - LRB104 06843 HLH 16879 b
1831	1831	1 net of bond premium amortization;
1832	1832	2 (K) An amount equal to those dividends included in
1833	1833	3 such total which were paid by a corporation which
1834	1834	4 conducts business operations in a River Edge
1835	1835	5 Redevelopment Zone or zones created under the River
1836	1836	6 Edge Redevelopment Zone Act and conducts substantially
1837	1837	7 all of its operations in a River Edge Redevelopment
1838	1838	8 Zone or zones. This subparagraph (K) is exempt from
1839	1839	9 the provisions of Section 250;
1840	1840	10 (L) An amount equal to those dividends included in
1841	1841	11 such total that were paid by a corporation that
1842	1842	12 conducts business operations in a federally designated
1843	1843	13 Foreign Trade Zone or Sub-Zone and that is designated
1844	1844	14 a High Impact Business located in Illinois; provided
1845	1845	15 that dividends eligible for the deduction provided in
1846	1846	16 subparagraph (K) of paragraph 2 of this subsection
1847	1847	17 shall not be eligible for the deduction provided under
1848	1848	18 this subparagraph (L);
1849	1849	19 (M) For any taxpayer that is a financial
1850	1850	20 organization within the meaning of Section 304(c) of
1851	1851	21 this Act, an amount included in such total as interest
1852	1852	22 income from a loan or loans made by such taxpayer to a
1853	1853	23 borrower, to the extent that such a loan is secured by
1854	1854	24 property which is eligible for the River Edge
1855	1855	25 Redevelopment Zone Investment Credit. To determine the
1856	1856	26 portion of a loan or loans that is secured by property
1857	1857
1858	1858
1859	1859
1860	1860
1861	1861
1862	1862	SB1956 - 51 - LRB104 06843 HLH 16879 b
1863	1863
1864	1864
1865	1865	SB1956- 52 -LRB104 06843 HLH 16879 b SB1956 - 52 - LRB104 06843 HLH 16879 b
1866	1866	SB1956 - 52 - LRB104 06843 HLH 16879 b
1867	1867	1 eligible for a Section 201(f) investment credit to the
1868	1868	2 borrower, the entire principal amount of the loan or
1869	1869	3 loans between the taxpayer and the borrower should be
1870	1870	4 divided into the basis of the Section 201(f)
1871	1871	5 investment credit property which secures the loan or
1872	1872	6 loans, using for this purpose the original basis of
1873	1873	7 such property on the date that it was placed in service
1874	1874	8 in the River Edge Redevelopment Zone. The subtraction
1875	1875	9 modification available to the taxpayer in any year
1876	1876	10 under this subsection shall be that portion of the
1877	1877	11 total interest paid by the borrower with respect to
1878	1878	12 such loan attributable to the eligible property as
1879	1879	13 calculated under the previous sentence. This
1880	1880	14 subparagraph (M) is exempt from the provisions of
1881	1881	15 Section 250;
1882	1882	16 (M-1) For any taxpayer that is a financial
1883	1883	17 organization within the meaning of Section 304(c) of
1884	1884	18 this Act, an amount included in such total as interest
1885	1885	19 income from a loan or loans made by such taxpayer to a
1886	1886	20 borrower, to the extent that such a loan is secured by
1887	1887	21 property which is eligible for the High Impact
1888	1888	22 Business Investment Credit. To determine the portion
1889	1889	23 of a loan or loans that is secured by property eligible
1890	1890	24 for a Section 201(h) investment credit to the
1891	1891	25 borrower, the entire principal amount of the loan or
1892	1892	26 loans between the taxpayer and the borrower should be
1893	1893
1894	1894
1895	1895
1896	1896
1897	1897
1898	1898	SB1956 - 52 - LRB104 06843 HLH 16879 b
1899	1899
1900	1900
1901	1901	SB1956- 53 -LRB104 06843 HLH 16879 b SB1956 - 53 - LRB104 06843 HLH 16879 b
1902	1902	SB1956 - 53 - LRB104 06843 HLH 16879 b
1903	1903	1 divided into the basis of the Section 201(h)
1904	1904	2 investment credit property which secures the loan or
1905	1905	3 loans, using for this purpose the original basis of
1906	1906	4 such property on the date that it was placed in service
1907	1907	5 in a federally designated Foreign Trade Zone or
1908	1908	6 Sub-Zone located in Illinois. No taxpayer that is
1909	1909	7 eligible for the deduction provided in subparagraph
1910	1910	8 (M) of paragraph (2) of this subsection shall be
1911	1911	9 eligible for the deduction provided under this
1912	1912	10 subparagraph (M-1). The subtraction modification
1913	1913	11 available to taxpayers in any year under this
1914	1914	12 subsection shall be that portion of the total interest
1915	1915	13 paid by the borrower with respect to such loan
1916	1916	14 attributable to the eligible property as calculated
1917	1917	15 under the previous sentence;
1918	1918	16 (N) Two times any contribution made during the
1919	1919	17 taxable year to a designated zone organization to the
1920	1920	18 extent that the contribution (i) qualifies as a
1921	1921	19 charitable contribution under subsection (c) of
1922	1922	20 Section 170 of the Internal Revenue Code and (ii)
1923	1923	21 must, by its terms, be used for a project approved by
1924	1924	22 the Department of Commerce and Economic Opportunity
1925	1925	23 under Section 11 of the Illinois Enterprise Zone Act
1926	1926	24 or under Section 10-10 of the River Edge Redevelopment
1927	1927	25 Zone Act. This subparagraph (N) is exempt from the
1928	1928	26 provisions of Section 250;
1929	1929
1930	1930
1931	1931
1932	1932
1933	1933
1934	1934	SB1956 - 53 - LRB104 06843 HLH 16879 b
1935	1935
1936	1936
1937	1937	SB1956- 54 -LRB104 06843 HLH 16879 b SB1956 - 54 - LRB104 06843 HLH 16879 b
1938	1938	SB1956 - 54 - LRB104 06843 HLH 16879 b
1939	1939	1 (O) An amount equal to: (i) 85% for taxable years
1940	1940	2 ending on or before December 31, 1992, or, a
1941	1941	3 percentage equal to the percentage allowable under
1942	1942	4 Section 243(a)(1) of the Internal Revenue Code of 1986
1943	1943	5 for taxable years ending after December 31, 1992, of
1944	1944	6 the amount by which dividends included in taxable
1945	1945	7 income and received from a corporation that is not
1946	1946	8 created or organized under the laws of the United
1947	1947	9 States or any state or political subdivision thereof,
1948	1948	10 including, for taxable years ending on or after
1949	1949	11 December 31, 1988, dividends received or deemed
1950	1950	12 received or paid or deemed paid under Sections 951
1951	1951	13 through 965 of the Internal Revenue Code, exceed the
1952	1952	14 amount of the modification provided under subparagraph
1953	1953	15 (G) of paragraph (2) of this subsection (b) which is
1954	1954	16 related to such dividends, and including, for taxable
1955	1955	17 years ending on or after December 31, 2008, dividends
1956	1956	18 received from a captive real estate investment trust;
1957	1957	19 plus (ii) 100% of the amount by which dividends,
1958	1958	20 included in taxable income and received, including,
1959	1959	21 for taxable years ending on or after December 31,
1960	1960	22 1988, dividends received or deemed received or paid or
1961	1961	23 deemed paid under Sections 951 through 964 of the
1962	1962	24 Internal Revenue Code and including, for taxable years
1963	1963	25 ending on or after December 31, 2008, dividends
1964	1964	26 received from a captive real estate investment trust,
1965	1965
1966	1966
1967	1967
1968	1968
1969	1969
1970	1970	SB1956 - 54 - LRB104 06843 HLH 16879 b
1971	1971
1972	1972
1973	1973	SB1956- 55 -LRB104 06843 HLH 16879 b SB1956 - 55 - LRB104 06843 HLH 16879 b
1974	1974	SB1956 - 55 - LRB104 06843 HLH 16879 b
1975	1975	1 from any such corporation specified in clause (i) that
1976	1976	2 would but for the provisions of Section 1504(b)(3) of
1977	1977	3 the Internal Revenue Code be treated as a member of the
1978	1978	4 affiliated group which includes the dividend
1979	1979	5 recipient, exceed the amount of the modification
1980	1980	6 provided under subparagraph (G) of paragraph (2) of
1981	1981	7 this subsection (b) which is related to such
1982	1982	8 dividends. For taxable years ending on or after June
1983	1983	9 30, 2021, (i) for purposes of this subparagraph, the
1984	1984	10 term "dividend" does not include any amount treated as
1985	1985	11 a dividend under Section 1248 of the Internal Revenue
1986	1986	12 Code, and (ii) this subparagraph shall not apply to
1987	1987	13 dividends for which a deduction is allowed under
1988	1988	14 Section 245(a) of the Internal Revenue Code. This
1989	1989	15 subparagraph (O) is exempt from the provisions of
1990	1990	16 Section 250 of this Act;
1991	1991	17 (P) An amount equal to any contribution made to a
1992	1992	18 job training project established pursuant to the Tax
1993	1993	19 Increment Allocation Redevelopment Act;
1994	1994	20 (Q) An amount equal to the amount of the deduction
1995	1995	21 used to compute the federal income tax credit for
1996	1996	22 restoration of substantial amounts held under claim of
1997	1997	23 right for the taxable year pursuant to Section 1341 of
1998	1998	24 the Internal Revenue Code;
1999	1999	25 (R) On and after July 20, 1999, in the case of an
2000	2000	26 attorney-in-fact with respect to whom an interinsurer
2001	2001
2002	2002
2003	2003
2004	2004
2005	2005
2006	2006	SB1956 - 55 - LRB104 06843 HLH 16879 b
2007	2007
2008	2008
2009	2009	SB1956- 56 -LRB104 06843 HLH 16879 b SB1956 - 56 - LRB104 06843 HLH 16879 b
2010	2010	SB1956 - 56 - LRB104 06843 HLH 16879 b
2011	2011	1 or a reciprocal insurer has made the election under
2012	2012	2 Section 835 of the Internal Revenue Code, 26 U.S.C.
2013	2013	3 835, an amount equal to the excess, if any, of the
2014	2014	4 amounts paid or incurred by that interinsurer or
2015	2015	5 reciprocal insurer in the taxable year to the
2016	2016	6 attorney-in-fact over the deduction allowed to that
2017	2017	7 interinsurer or reciprocal insurer with respect to the
2018	2018	8 attorney-in-fact under Section 835(b) of the Internal
2019	2019	9 Revenue Code for the taxable year; the provisions of
2020	2020	10 this subparagraph are exempt from the provisions of
2021	2021	11 Section 250;
2022	2022	12 (S) For taxable years ending on or after December
2023	2023	13 31, 1997, in the case of a Subchapter S corporation, an
2024	2024	14 amount equal to all amounts of income allocable to a
2025	2025	15 shareholder subject to the Personal Property Tax
2026	2026	16 Replacement Income Tax imposed by subsections (c) and
2027	2027	17 (d) of Section 201 of this Act, including amounts
2028	2028	18 allocable to organizations exempt from federal income
2029	2029	19 tax by reason of Section 501(a) of the Internal
2030	2030	20 Revenue Code. This subparagraph (S) is exempt from the
2031	2031	21 provisions of Section 250;
2032	2032	22 (T) For taxable years 2001 and thereafter, for the
2033	2033	23 taxable year in which the bonus depreciation deduction
2034	2034	24 is taken on the taxpayer's federal income tax return
2035	2035	25 under subsection (k) of Section 168 of the Internal
2036	2036	26 Revenue Code and for each applicable taxable year
2037	2037
2038	2038
2039	2039
2040	2040
2041	2041
2042	2042	SB1956 - 56 - LRB104 06843 HLH 16879 b
2043	2043
2044	2044
2045	2045	SB1956- 57 -LRB104 06843 HLH 16879 b SB1956 - 57 - LRB104 06843 HLH 16879 b
2046	2046	SB1956 - 57 - LRB104 06843 HLH 16879 b
2047	2047	1 thereafter, an amount equal to "x", where:
2048	2048	2 (1) "y" equals the amount of the depreciation
2049	2049	3 deduction taken for the taxable year on the
2050	2050	4 taxpayer's federal income tax return on property
2051	2051	5 for which the bonus depreciation deduction was
2052	2052	6 taken in any year under subsection (k) of Section
2053	2053	7 168 of the Internal Revenue Code, but not
2054	2054	8 including the bonus depreciation deduction;
2055	2055	9 (2) for taxable years ending on or before
2056	2056	10 December 31, 2005, "x" equals "y" multiplied by 30
2057	2057	11 and then divided by 70 (or "y" multiplied by
2058	2058	12 0.429); and
2059	2059	13 (3) for taxable years ending after December
2060	2060	14 31, 2005:
2061	2061	15 (i) for property on which a bonus
2062	2062	16 depreciation deduction of 30% of the adjusted
2063	2063	17 basis was taken, "x" equals "y" multiplied by
2064	2064	18 30 and then divided by 70 (or "y" multiplied
2065	2065	19 by 0.429);
2066	2066	20 (ii) for property on which a bonus
2067	2067	21 depreciation deduction of 50% of the adjusted
2068	2068	22 basis was taken, "x" equals "y" multiplied by
2069	2069	23 1.0;
2070	2070	24 (iii) for property on which a bonus
2071	2071	25 depreciation deduction of 100% of the adjusted
2072	2072	26 basis was taken in a taxable year ending on or
2073	2073
2074	2074
2075	2075
2076	2076
2077	2077
2078	2078	SB1956 - 57 - LRB104 06843 HLH 16879 b
2079	2079
2080	2080
2081	2081	SB1956- 58 -LRB104 06843 HLH 16879 b SB1956 - 58 - LRB104 06843 HLH 16879 b
2082	2082	SB1956 - 58 - LRB104 06843 HLH 16879 b
2083	2083	1 after December 31, 2021, "x" equals the
2084	2084	2 depreciation deduction that would be allowed
2085	2085	3 on that property if the taxpayer had made the
2086	2086	4 election under Section 168(k)(7) of the
2087	2087	5 Internal Revenue Code to not claim bonus
2088	2088	6 depreciation on that property; and
2089	2089	7 (iv) for property on which a bonus
2090	2090	8 depreciation deduction of a percentage other
2091	2091	9 than 30%, 50% or 100% of the adjusted basis
2092	2092	10 was taken in a taxable year ending on or after
2093	2093	11 December 31, 2021, "x" equals "y" multiplied
2094	2094	12 by 100 times the percentage bonus depreciation
2095	2095	13 on the property (that is, 100(bonus%)) and
2096	2096	14 then divided by 100 times 1 minus the
2097	2097	15 percentage bonus depreciation on the property
2098	2098	16 (that is, 100(1-bonus%)).
2099	2099	17 The aggregate amount deducted under this
2100	2100	18 subparagraph in all taxable years for any one piece of
2101	2101	19 property may not exceed the amount of the bonus
2102	2102	20 depreciation deduction taken on that property on the
2103	2103	21 taxpayer's federal income tax return under subsection
2104	2104	22 (k) of Section 168 of the Internal Revenue Code. This
2105	2105	23 subparagraph (T) is exempt from the provisions of
2106	2106	24 Section 250;
2107	2107	25 (U) If the taxpayer sells, transfers, abandons, or
2108	2108	26 otherwise disposes of property for which the taxpayer
2109	2109
2110	2110
2111	2111
2112	2112
2113	2113
2114	2114	SB1956 - 58 - LRB104 06843 HLH 16879 b
2115	2115
2116	2116
2117	2117	SB1956- 59 -LRB104 06843 HLH 16879 b SB1956 - 59 - LRB104 06843 HLH 16879 b
2118	2118	SB1956 - 59 - LRB104 06843 HLH 16879 b
2119	2119	1 was required in any taxable year to make an addition
2120	2120	2 modification under subparagraph (E-10), then an amount
2121	2121	3 equal to that addition modification.
2122	2122	4 If the taxpayer continues to own property through
2123	2123	5 the last day of the last tax year for which a
2124	2124	6 subtraction is allowed with respect to that property
2125	2125	7 under subparagraph (T) and for which the taxpayer was
2126	2126	8 required in any taxable year to make an addition
2127	2127	9 modification under subparagraph (E-10), then an amount
2128	2128	10 equal to that addition modification.
2129	2129	11 The taxpayer is allowed to take the deduction
2130	2130	12 under this subparagraph only once with respect to any
2131	2131	13 one piece of property.
2132	2132	14 This subparagraph (U) is exempt from the
2133	2133	15 provisions of Section 250;
2134	2134	16 (V) The amount of: (i) any interest income (net of
2135	2135	17 the deductions allocable thereto) taken into account
2136	2136	18 for the taxable year with respect to a transaction
2137	2137	19 with a taxpayer that is required to make an addition
2138	2138	20 modification with respect to such transaction under
2139	2139	21 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
2140	2140	22 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
2141	2141	23 the amount of such addition modification, (ii) any
2142	2142	24 income from intangible property (net of the deductions
2143	2143	25 allocable thereto) taken into account for the taxable
2144	2144	26 year with respect to a transaction with a taxpayer
2145	2145
2146	2146
2147	2147
2148	2148
2149	2149
2150	2150	SB1956 - 59 - LRB104 06843 HLH 16879 b
2151	2151
2152	2152
2153	2153	SB1956- 60 -LRB104 06843 HLH 16879 b SB1956 - 60 - LRB104 06843 HLH 16879 b
2154	2154	SB1956 - 60 - LRB104 06843 HLH 16879 b
2155	2155	1 that is required to make an addition modification with
2156	2156	2 respect to such transaction under Section
2157	2157	3 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
2158	2158	4 203(d)(2)(D-8), but not to exceed the amount of such
2159	2159	5 addition modification, and (iii) any insurance premium
2160	2160	6 income (net of deductions allocable thereto) taken
2161	2161	7 into account for the taxable year with respect to a
2162	2162	8 transaction with a taxpayer that is required to make
2163	2163	9 an addition modification with respect to such
2164	2164	10 transaction under Section 203(a)(2)(D-19), Section
2165	2165	11 203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
2166	2166	12 203(d)(2)(D-9), but not to exceed the amount of that
2167	2167	13 addition modification. This subparagraph (V) is exempt
2168	2168	14 from the provisions of Section 250;
2169	2169	15 (W) An amount equal to the interest income taken
2170	2170	16 into account for the taxable year (net of the
2171	2171	17 deductions allocable thereto) with respect to
2172	2172	18 transactions with (i) a foreign person who would be a
2173	2173	19 member of the taxpayer's unitary business group but
2174	2174	20 for the fact that the foreign person's business
2175	2175	21 activity outside the United States is 80% or more of
2176	2176	22 that person's total business activity and (ii) for
2177	2177	23 taxable years ending on or after December 31, 2008, to
2178	2178	24 a person who would be a member of the same unitary
2179	2179	25 business group but for the fact that the person is
2180	2180	26 prohibited under Section 1501(a)(27) from being
2181	2181
2182	2182
2183	2183
2184	2184
2185	2185
2186	2186	SB1956 - 60 - LRB104 06843 HLH 16879 b
2187	2187
2188	2188
2189	2189	SB1956- 61 -LRB104 06843 HLH 16879 b SB1956 - 61 - LRB104 06843 HLH 16879 b
2190	2190	SB1956 - 61 - LRB104 06843 HLH 16879 b
2191	2191	1 included in the unitary business group because he or
2192	2192	2 she is ordinarily required to apportion business
2193	2193	3 income under different subsections of Section 304, but
2194	2194	4 not to exceed the addition modification required to be
2195	2195	5 made for the same taxable year under Section
2196	2196	6 203(b)(2)(E-12) for interest paid, accrued, or
2197	2197	7 incurred, directly or indirectly, to the same person.
2198	2198	8 This subparagraph (W) is exempt from the provisions of
2199	2199	9 Section 250;
2200	2200	10 (X) An amount equal to the income from intangible
2201	2201	11 property taken into account for the taxable year (net
2202	2202	12 of the deductions allocable thereto) with respect to
2203	2203	13 transactions with (i) a foreign person who would be a
2204	2204	14 member of the taxpayer's unitary business group but
2205	2205	15 for the fact that the foreign person's business
2206	2206	16 activity outside the United States is 80% or more of
2207	2207	17 that person's total business activity and (ii) for
2208	2208	18 taxable years ending on or after December 31, 2008, to
2209	2209	19 a person who would be a member of the same unitary
2210	2210	20 business group but for the fact that the person is
2211	2211	21 prohibited under Section 1501(a)(27) from being
2212	2212	22 included in the unitary business group because he or
2213	2213	23 she is ordinarily required to apportion business
2214	2214	24 income under different subsections of Section 304, but
2215	2215	25 not to exceed the addition modification required to be
2216	2216	26 made for the same taxable year under Section
2217	2217
2218	2218
2219	2219
2220	2220
2221	2221
2222	2222	SB1956 - 61 - LRB104 06843 HLH 16879 b
2223	2223
2224	2224
2225	2225	SB1956- 62 -LRB104 06843 HLH 16879 b SB1956 - 62 - LRB104 06843 HLH 16879 b
2226	2226	SB1956 - 62 - LRB104 06843 HLH 16879 b
2227	2227	1 203(b)(2)(E-13) for intangible expenses and costs
2228	2228	2 paid, accrued, or incurred, directly or indirectly, to
2229	2229	3 the same foreign person. This subparagraph (X) is
2230	2230	4 exempt from the provisions of Section 250;
2231	2231	5 (Y) For taxable years ending on or after December
2232	2232	6 31, 2011, in the case of a taxpayer who was required to
2233	2233	7 add back any insurance premiums under Section
2234	2234	8 203(b)(2)(E-14), such taxpayer may elect to subtract
2235	2235	9 that part of a reimbursement received from the
2236	2236	10 insurance company equal to the amount of the expense
2237	2237	11 or loss (including expenses incurred by the insurance
2238	2238	12 company) that would have been taken into account as a
2239	2239	13 deduction for federal income tax purposes if the
2240	2240	14 expense or loss had been uninsured. If a taxpayer
2241	2241	15 makes the election provided for by this subparagraph
2242	2242	16 (Y), the insurer to which the premiums were paid must
2243	2243	17 add back to income the amount subtracted by the
2244	2244	18 taxpayer pursuant to this subparagraph (Y). This
2245	2245	19 subparagraph (Y) is exempt from the provisions of
2246	2246	20 Section 250;
2247	2247	21 (Z) The difference between the nondeductible
2248	2248	22 controlled foreign corporation dividends under Section
2249	2249	23 965(e)(3) of the Internal Revenue Code over the
2250	2250	24 taxable income of the taxpayer, computed without
2251	2251	25 regard to Section 965(e)(2)(A) of the Internal Revenue
2252	2252	26 Code, and without regard to any net operating loss
2253	2253
2254	2254
2255	2255
2256	2256
2257	2257
2258	2258	SB1956 - 62 - LRB104 06843 HLH 16879 b
2259	2259
2260	2260
2261	2261	SB1956- 63 -LRB104 06843 HLH 16879 b SB1956 - 63 - LRB104 06843 HLH 16879 b
2262	2262	SB1956 - 63 - LRB104 06843 HLH 16879 b
2263	2263	1 deduction. This subparagraph (Z) is exempt from the
2264	2264	2 provisions of Section 250; and
2265	2265	3 (AA) For taxable years beginning on or after
2266	2266	4 January 1, 2023, for any cannabis establishment
2267	2267	5 operating in this State and licensed under the
2268	2268	6 Cannabis Regulation and Tax Act or any cannabis
2269	2269	7 cultivation center or medical cannabis dispensing
2270	2270	8 organization operating in this State and licensed
2271	2271	9 under the Compassionate Use of Medical Cannabis
2272	2272	10 Program Act, an amount equal to the deductions that
2273	2273	11 were disallowed under Section 280E of the Internal
2274	2274	12 Revenue Code for the taxable year and that would not be
2275	2275	13 added back under this subsection. The provisions of
2276	2276	14 this subparagraph (AA) are exempt from the provisions
2277	2277	15 of Section 250.
2278	2278	16 (3) Special rule. For purposes of paragraph (2)(A),
2279	2279	17 "gross income" in the case of a life insurance company,
2280	2280	18 for tax years ending on and after December 31, 1994, and
2281	2281	19 prior to December 31, 2011, shall mean the gross
2282	2282	20 investment income for the taxable year and, for tax years
2283	2283	21 ending on or after December 31, 2011, shall mean all
2284	2284	22 amounts included in life insurance gross income under
2285	2285	23 Section 803(a)(3) of the Internal Revenue Code.
2286	2286	24 (c) Trusts and estates.
2287	2287	25 (1) In general. In the case of a trust or estate, base
2288	2288
2289	2289
2290	2290
2291	2291
2292	2292
2293	2293	SB1956 - 63 - LRB104 06843 HLH 16879 b
2294	2294
2295	2295
2296	2296	SB1956- 64 -LRB104 06843 HLH 16879 b SB1956 - 64 - LRB104 06843 HLH 16879 b
2297	2297	SB1956 - 64 - LRB104 06843 HLH 16879 b
2298	2298	1 income means an amount equal to the taxpayer's taxable
2299	2299	2 income for the taxable year as modified by paragraph (2).
2300	2300	3 (2) Modifications. Subject to the provisions of
2301	2301	4 paragraph (3), the taxable income referred to in paragraph
2302	2302	5 (1) shall be modified by adding thereto the sum of the
2303	2303	6 following amounts:
2304	2304	7 (A) An amount equal to all amounts paid or accrued
2305	2305	8 to the taxpayer as interest or dividends during the
2306	2306	9 taxable year to the extent excluded from gross income
2307	2307	10 in the computation of taxable income;
2308	2308	11 (B) In the case of (i) an estate, $600; (ii) a
2309	2309	12 trust which, under its governing instrument, is
2310	2310	13 required to distribute all of its income currently,
2311	2311	14 $300; and (iii) any other trust, $100, but in each such
2312	2312	15 case, only to the extent such amount was deducted in
2313	2313	16 the computation of taxable income;
2314	2314	17 (C) An amount equal to the amount of tax imposed by
2315	2315	18 this Act to the extent deducted from gross income in
2316	2316	19 the computation of taxable income for the taxable
2317	2317	20 year;
2318	2318	21 (D) The amount of any net operating loss deduction
2319	2319	22 taken in arriving at taxable income, other than a net
2320	2320	23 operating loss carried forward from a taxable year
2321	2321	24 ending prior to December 31, 1986;
2322	2322	25 (E) For taxable years in which a net operating
2323	2323	26 loss carryback or carryforward from a taxable year
2324	2324
2325	2325
2326	2326
2327	2327
2328	2328
2329	2329	SB1956 - 64 - LRB104 06843 HLH 16879 b
2330	2330
2331	2331
2332	2332	SB1956- 65 -LRB104 06843 HLH 16879 b SB1956 - 65 - LRB104 06843 HLH 16879 b
2333	2333	SB1956 - 65 - LRB104 06843 HLH 16879 b
2334	2334	1 ending prior to December 31, 1986 is an element of
2335	2335	2 taxable income under paragraph (1) of subsection (e)
2336	2336	3 or subparagraph (E) of paragraph (2) of subsection
2337	2337	4 (e), the amount by which addition modifications other
2338	2338	5 than those provided by this subparagraph (E) exceeded
2339	2339	6 subtraction modifications in such taxable year, with
2340	2340	7 the following limitations applied in the order that
2341	2341	8 they are listed:
2342	2342	9 (i) the addition modification relating to the
2343	2343	10 net operating loss carried back or forward to the
2344	2344	11 taxable year from any taxable year ending prior to
2345	2345	12 December 31, 1986 shall be reduced by the amount
2346	2346	13 of addition modification under this subparagraph
2347	2347	14 (E) which related to that net operating loss and
2348	2348	15 which was taken into account in calculating the
2349	2349	16 base income of an earlier taxable year, and
2350	2350	17 (ii) the addition modification relating to the
2351	2351	18 net operating loss carried back or forward to the
2352	2352	19 taxable year from any taxable year ending prior to
2353	2353	20 December 31, 1986 shall not exceed the amount of
2354	2354	21 such carryback or carryforward;
2355	2355	22 For taxable years in which there is a net
2356	2356	23 operating loss carryback or carryforward from more
2357	2357	24 than one other taxable year ending prior to December
2358	2358	25 31, 1986, the addition modification provided in this
2359	2359	26 subparagraph (E) shall be the sum of the amounts
2360	2360
2361	2361
2362	2362
2363	2363
2364	2364
2365	2365	SB1956 - 65 - LRB104 06843 HLH 16879 b
2366	2366
2367	2367
2368	2368	SB1956- 66 -LRB104 06843 HLH 16879 b SB1956 - 66 - LRB104 06843 HLH 16879 b
2369	2369	SB1956 - 66 - LRB104 06843 HLH 16879 b
2370	2370	1 computed independently under the preceding provisions
2371	2371	2 of this subparagraph (E) for each such taxable year;
2372	2372	3 (F) For taxable years ending on or after January
2373	2373	4 1, 1989, an amount equal to the tax deducted pursuant
2374	2374	5 to Section 164 of the Internal Revenue Code if the
2375	2375	6 trust or estate is claiming the same tax for purposes
2376	2376	7 of the Illinois foreign tax credit under Section 601
2377	2377	8 of this Act;
2378	2378	9 (G) An amount equal to the amount of the capital
2379	2379	10 gain deduction allowable under the Internal Revenue
2380	2380	11 Code, to the extent deducted from gross income in the
2381	2381	12 computation of taxable income;
2382	2382	13 (G-5) For taxable years ending after December 31,
2383	2383	14 1997, an amount equal to any eligible remediation
2384	2384	15 costs that the trust or estate deducted in computing
2385	2385	16 adjusted gross income and for which the trust or
2386	2386	17 estate claims a credit under subsection (l) of Section
2387	2387	18 201;
2388	2388	19 (G-10) For taxable years 2001 and thereafter, an
2389	2389	20 amount equal to the bonus depreciation deduction taken
2390	2390	21 on the taxpayer's federal income tax return for the
2391	2391	22 taxable year under subsection (k) of Section 168 of
2392	2392	23 the Internal Revenue Code; and
2393	2393	24 (G-11) If the taxpayer sells, transfers, abandons,
2394	2394	25 or otherwise disposes of property for which the
2395	2395	26 taxpayer was required in any taxable year to make an
2396	2396
2397	2397
2398	2398
2399	2399
2400	2400
2401	2401	SB1956 - 66 - LRB104 06843 HLH 16879 b
2402	2402
2403	2403
2404	2404	SB1956- 67 -LRB104 06843 HLH 16879 b SB1956 - 67 - LRB104 06843 HLH 16879 b
2405	2405	SB1956 - 67 - LRB104 06843 HLH 16879 b
2406	2406	1 addition modification under subparagraph (G-10), then
2407	2407	2 an amount equal to the aggregate amount of the
2408	2408	3 deductions taken in all taxable years under
2409	2409	4 subparagraph (R) with respect to that property.
2410	2410	5 If the taxpayer continues to own property through
2411	2411	6 the last day of the last tax year for which a
2412	2412	7 subtraction is allowed with respect to that property
2413	2413	8 under subparagraph (R) and for which the taxpayer was
2414	2414	9 allowed in any taxable year to make a subtraction
2415	2415	10 modification under subparagraph (R), then an amount
2416	2416	11 equal to that subtraction modification.
2417	2417	12 The taxpayer is required to make the addition
2418	2418	13 modification under this subparagraph only once with
2419	2419	14 respect to any one piece of property;
2420	2420	15 (G-12) An amount equal to the amount otherwise
2421	2421	16 allowed as a deduction in computing base income for
2422	2422	17 interest paid, accrued, or incurred, directly or
2423	2423	18 indirectly, (i) for taxable years ending on or after
2424	2424	19 December 31, 2004, to a foreign person who would be a
2425	2425	20 member of the same unitary business group but for the
2426	2426	21 fact that the foreign person's business activity
2427	2427	22 outside the United States is 80% or more of the foreign
2428	2428	23 person's total business activity and (ii) for taxable
2429	2429	24 years ending on or after December 31, 2008, to a person
2430	2430	25 who would be a member of the same unitary business
2431	2431	26 group but for the fact that the person is prohibited
2432	2432
2433	2433
2434	2434
2435	2435
2436	2436
2437	2437	SB1956 - 67 - LRB104 06843 HLH 16879 b
2438	2438
2439	2439
2440	2440	SB1956- 68 -LRB104 06843 HLH 16879 b SB1956 - 68 - LRB104 06843 HLH 16879 b
2441	2441	SB1956 - 68 - LRB104 06843 HLH 16879 b
2442	2442	1 under Section 1501(a)(27) from being included in the
2443	2443	2 unitary business group because he or she is ordinarily
2444	2444	3 required to apportion business income under different
2445	2445	4 subsections of Section 304. The addition modification
2446	2446	5 required by this subparagraph shall be reduced to the
2447	2447	6 extent that dividends were included in base income of
2448	2448	7 the unitary group for the same taxable year and
2449	2449	8 received by the taxpayer or by a member of the
2450	2450	9 taxpayer's unitary business group (including amounts
2451	2451	10 included in gross income pursuant to Sections 951
2452	2452	11 through 964 of the Internal Revenue Code and amounts
2453	2453	12 included in gross income under Section 78 of the
2454	2454	13 Internal Revenue Code) with respect to the stock of
2455	2455	14 the same person to whom the interest was paid,
2456	2456	15 accrued, or incurred. For taxable years ending on and
2457	2457	16 after December 31, 2025, for purposes of applying this
2458	2458	17 paragraph in the case of a taxpayer to which
2459	2459	18 subsection (j) of Section 163 of the Internal Revenue
2460	2460	19 Code applies for the taxable year, the reduction in
2461	2461	20 the amount of interest for which a deduction is
2462	2462	21 allowed by reason of subsection (j) of Section 163
2463	2463	22 shall be treated as allocable first to persons who are
2464	2464	23 not foreign persons referred to in this paragraph and
2465	2465	24 then to those foreign persons.
2466	2466	25 For taxable years ending before December 31, 2025,
2467	2467	26 this This paragraph shall not apply to the following:
2468	2468
2469	2469
2470	2470
2471	2471
2472	2472
2473	2473	SB1956 - 68 - LRB104 06843 HLH 16879 b
2474	2474
2475	2475
2476	2476	SB1956- 69 -LRB104 06843 HLH 16879 b SB1956 - 69 - LRB104 06843 HLH 16879 b
2477	2477	SB1956 - 69 - LRB104 06843 HLH 16879 b
2478	2478	1 (i) an item of interest paid, accrued, or
2479	2479	2 incurred, directly or indirectly, to a person who
2480	2480	3 is subject in a foreign country or state, other
2481	2481	4 than a state which requires mandatory unitary
2482	2482	5 reporting, to a tax on or measured by net income
2483	2483	6 with respect to such interest; or
2484	2484	7 (ii) an item of interest paid, accrued, or
2485	2485	8 incurred, directly or indirectly, to a person if
2486	2486	9 the taxpayer can establish, based on a
2487	2487	10 preponderance of the evidence, both of the
2488	2488	11 following:
2489	2489	12 (a) the person, during the same taxable
2490	2490	13 year, paid, accrued, or incurred, the interest
2491	2491	14 to a person that is not a related member, and
2492	2492	15 (b) the transaction giving rise to the
2493	2493	16 interest expense between the taxpayer and the
2494	2494	17 person did not have as a principal purpose the
2495	2495	18 avoidance of Illinois income tax, and is paid
2496	2496	19 pursuant to a contract or agreement that
2497	2497	20 reflects an arm's-length interest rate and
2498	2498	21 terms; or
2499	2499	22 (iii) the taxpayer can establish, based on
2500	2500	23 clear and convincing evidence, that the interest
2501	2501	24 paid, accrued, or incurred relates to a contract
2502	2502	25 or agreement entered into at arm's-length rates
2503	2503	26 and terms and the principal purpose for the
2504	2504
2505	2505
2506	2506
2507	2507
2508	2508
2509	2509	SB1956 - 69 - LRB104 06843 HLH 16879 b
2510	2510
2511	2511
2512	2512	SB1956- 70 -LRB104 06843 HLH 16879 b SB1956 - 70 - LRB104 06843 HLH 16879 b
2513	2513	SB1956 - 70 - LRB104 06843 HLH 16879 b
2514	2514	1 payment is not federal or Illinois tax avoidance;
2515	2515	2 or
2516	2516	3 (iv) an item of interest paid, accrued, or
2517	2517	4 incurred, directly or indirectly, to a person if
2518	2518	5 the taxpayer establishes by clear and convincing
2519	2519	6 evidence that the adjustments are unreasonable; or
2520	2520	7 if the taxpayer and the Director agree in writing
2521	2521	8 to the application or use of an alternative method
2522	2522	9 of apportionment under Section 304(f).
2523	2523	10 For taxable years ending on or after December 31,
2524	2524	11 2025, this paragraph shall not apply to the following:
2525	2525	12 (i) an item of interest paid, accrued, or
2526	2526	13 incurred, directly or indirectly, to a person if
2527	2527	14 the taxpayer can establish, based on a
2528	2528	15 preponderance of the evidence, both of the
2529	2529	16 following:
2530	2530	17 (a) the person, during the same taxable
2531	2531	18 year, paid, accrued, or incurred, the interest
2532	2532	19 to a person that is not a related member, and
2533	2533	20 (b) the transaction giving rise to the
2534	2534	21 interest expense between the taxpayer and the
2535	2535	22 person did not have as a principal purpose the
2536	2536	23 avoidance of Illinois income tax and is paid
2537	2537	24 pursuant to a contract or agreement that
2538	2538	25 reflects an arm's-length interest rate and
2539	2539	26 terms; or
2540	2540
2541	2541
2542	2542
2543	2543
2544	2544
2545	2545	SB1956 - 70 - LRB104 06843 HLH 16879 b
2546	2546
2547	2547
2548	2548	SB1956- 71 -LRB104 06843 HLH 16879 b SB1956 - 71 - LRB104 06843 HLH 16879 b
2549	2549	SB1956 - 71 - LRB104 06843 HLH 16879 b
2550	2550	1 (ii) an item of interest paid, accrued, or
2551	2551	2 incurred, directly or indirectly, to a person if
2552	2552	3 the taxpayer establishes by clear and convincing
2553	2553	4 evidence that the adjustments are unreasonable; or
2554	2554	5 if the taxpayer and the Director agree in writing
2555	2555	6 to the application or use of an alternative method
2556	2556	7 of apportionment under Section 304(f).
2557	2557	8 Nothing in this subsection shall preclude the
2558	2558	9 Director from making any other adjustment
2559	2559	10 otherwise allowed under Section 404 of this Act
2560	2560	11 for any tax year beginning after the effective
2561	2561	12 date of this amendment provided such adjustment is
2562	2562	13 made pursuant to regulation adopted by the
2563	2563	14 Department and such regulations provide methods
2564	2564	15 and standards by which the Department will utilize
2565	2565	16 its authority under Section 404 of this Act;
2566	2566	17 (G-13) An amount equal to the amount of intangible
2567	2567	18 expenses and costs otherwise allowed as a deduction in
2568	2568	19 computing base income, and that were paid, accrued, or
2569	2569	20 incurred, directly or indirectly, (i) for taxable
2570	2570	21 years ending on or after December 31, 2004, to a
2571	2571	22 foreign person who would be a member of the same
2572	2572	23 unitary business group but for the fact that the
2573	2573	24 foreign person's business activity outside the United
2574	2574	25 States is 80% or more of that person's total business
2575	2575	26 activity and (ii) for taxable years ending on or after
2576	2576
2577	2577
2578	2578
2579	2579
2580	2580
2581	2581	SB1956 - 71 - LRB104 06843 HLH 16879 b
2582	2582
2583	2583
2584	2584	SB1956- 72 -LRB104 06843 HLH 16879 b SB1956 - 72 - LRB104 06843 HLH 16879 b
2585	2585	SB1956 - 72 - LRB104 06843 HLH 16879 b
2586	2586	1 December 31, 2008, to a person who would be a member of
2587	2587	2 the same unitary business group but for the fact that
2588	2588	3 the person is prohibited under Section 1501(a)(27)
2589	2589	4 from being included in the unitary business group
2590	2590	5 because he or she is ordinarily required to apportion
2591	2591	6 business income under different subsections of Section
2592	2592	7 304. The addition modification required by this
2593	2593	8 subparagraph shall be reduced to the extent that
2594	2594	9 dividends were included in base income of the unitary
2595	2595	10 group for the same taxable year and received by the
2596	2596	11 taxpayer or by a member of the taxpayer's unitary
2597	2597	12 business group (including amounts included in gross
2598	2598	13 income pursuant to Sections 951 through 964 of the
2599	2599	14 Internal Revenue Code and amounts included in gross
2600	2600	15 income under Section 78 of the Internal Revenue Code)
2601	2601	16 with respect to the stock of the same person to whom
2602	2602	17 the intangible expenses and costs were directly or
2603	2603	18 indirectly paid, incurred, or accrued. The preceding
2604	2604	19 sentence shall not apply to the extent that the same
2605	2605	20 dividends caused a reduction to the addition
2606	2606	21 modification required under Section 203(c)(2)(G-12) of
2607	2607	22 this Act. As used in this subparagraph, the term
2608	2608	23 "intangible expenses and costs" includes: (1)
2609	2609	24 expenses, losses, and costs for or related to the
2610	2610	25 direct or indirect acquisition, use, maintenance or
2611	2611	26 management, ownership, sale, exchange, or any other
2612	2612
2613	2613
2614	2614
2615	2615
2616	2616
2617	2617	SB1956 - 72 - LRB104 06843 HLH 16879 b
2618	2618
2619	2619
2620	2620	SB1956- 73 -LRB104 06843 HLH 16879 b SB1956 - 73 - LRB104 06843 HLH 16879 b
2621	2621	SB1956 - 73 - LRB104 06843 HLH 16879 b
2622	2622	1 disposition of intangible property; (2) losses
2623	2623	2 incurred, directly or indirectly, from factoring
2624	2624	3 transactions or discounting transactions; (3) royalty,
2625	2625	4 patent, technical, and copyright fees; (4) licensing
2626	2626	5 fees; and (5) other similar expenses and costs. For
2627	2627	6 purposes of this subparagraph, "intangible property"
2628	2628	7 includes patents, patent applications, trade names,
2629	2629	8 trademarks, service marks, copyrights, mask works,
2630	2630	9 trade secrets, and similar types of intangible assets.
2631	2631	10 For taxable years ending before December 31, 2025,
2632	2632	11 this This paragraph shall not apply to the following:
2633	2633	12 (i) any item of intangible expenses or costs
2634	2634	13 paid, accrued, or incurred, directly or
2635	2635	14 indirectly, from a transaction with a person who
2636	2636	15 is subject in a foreign country or state, other
2637	2637	16 than a state which requires mandatory unitary
2638	2638	17 reporting, to a tax on or measured by net income
2639	2639	18 with respect to such item; or
2640	2640	19 (ii) any item of intangible expense or cost
2641	2641	20 paid, accrued, or incurred, directly or
2642	2642	21 indirectly, if the taxpayer can establish, based
2643	2643	22 on a preponderance of the evidence, both of the
2644	2644	23 following:
2645	2645	24 (a) the person during the same taxable
2646	2646	25 year paid, accrued, or incurred, the
2647	2647	26 intangible expense or cost to a person that is
2648	2648
2649	2649
2650	2650
2651	2651
2652	2652
2653	2653	SB1956 - 73 - LRB104 06843 HLH 16879 b
2654	2654
2655	2655
2656	2656	SB1956- 74 -LRB104 06843 HLH 16879 b SB1956 - 74 - LRB104 06843 HLH 16879 b
2657	2657	SB1956 - 74 - LRB104 06843 HLH 16879 b
2658	2658	1 not a related member, and
2659	2659	2 (b) the transaction giving rise to the
2660	2660	3 intangible expense or cost between the
2661	2661	4 taxpayer and the person did not have as a
2662	2662	5 principal purpose the avoidance of Illinois
2663	2663	6 income tax, and is paid pursuant to a contract
2664	2664	7 or agreement that reflects arm's-length terms;
2665	2665	8 or
2666	2666	9 (iii) any item of intangible expense or cost
2667	2667	10 paid, accrued, or incurred, directly or
2668	2668	11 indirectly, from a transaction with a person if
2669	2669	12 the taxpayer establishes by clear and convincing
2670	2670	13 evidence, that the adjustments are unreasonable;
2671	2671	14 or if the taxpayer and the Director agree in
2672	2672	15 writing to the application or use of an
2673	2673	16 alternative method of apportionment under Section
2674	2674	17 304(f);
2675	2675	18 For taxable years ending on or after December 31,
2676	2676	19 2025, this paragraph shall not apply to the following:
2677	2677	20 (i) any item of intangible expense or cost
2678	2678	21 paid, accrued, or incurred, directly or
2679	2679	22 indirectly, if the taxpayer can establish, based
2680	2680	23 on a preponderance of the evidence, both of the
2681	2681	24 following:
2682	2682	25 (a) the person during the same taxable
2683	2683	26 year paid, accrued, or incurred, the
2684	2684
2685	2685
2686	2686
2687	2687
2688	2688
2689	2689	SB1956 - 74 - LRB104 06843 HLH 16879 b
2690	2690
2691	2691
2692	2692	SB1956- 75 -LRB104 06843 HLH 16879 b SB1956 - 75 - LRB104 06843 HLH 16879 b
2693	2693	SB1956 - 75 - LRB104 06843 HLH 16879 b
2694	2694	1 intangible expense or cost to a person that is
2695	2695	2 not a related member, and
2696	2696	3 (b) the transaction giving rise to the
2697	2697	4 intangible expense or cost between the
2698	2698	5 taxpayer and the person did not have as a
2699	2699	6 principal purpose the avoidance of Illinois
2700	2700	7 income tax, and is paid pursuant to a contract
2701	2701	8 or agreement that reflects arm's-length terms;
2702	2702	9 or
2703	2703	10 (ii) any item of intangible expense or cost
2704	2704	11 paid, accrued, or incurred, directly or
2705	2705	12 indirectly, from a transaction with a person if
2706	2706	13 the taxpayer establishes, by clear and convincing
2707	2707	14 evidence, that the adjustments are unreasonable;
2708	2708	15 or if the taxpayer and the Director agree in
2709	2709	16 writing to the application or use of an
2710	2710	17 alternative method of apportionment under Section
2711	2711	18 304(f).
2712	2712	19 Nothing in this subsection shall preclude the
2713	2713	20 Director from making any other adjustment
2714	2714	21 otherwise allowed under Section 404 of this Act
2715	2715	22 for any tax year beginning after the effective
2716	2716	23 date of this amendment provided such adjustment is
2717	2717	24 made pursuant to regulation adopted by the
2718	2718	25 Department and such regulations provide methods
2719	2719	26 and standards by which the Department will utilize
2720	2720
2721	2721
2722	2722
2723	2723
2724	2724
2725	2725	SB1956 - 75 - LRB104 06843 HLH 16879 b
2726	2726
2727	2727
2728	2728	SB1956- 76 -LRB104 06843 HLH 16879 b SB1956 - 76 - LRB104 06843 HLH 16879 b
2729	2729	SB1956 - 76 - LRB104 06843 HLH 16879 b
2730	2730	1 its authority under Section 404 of this Act;
2731	2731	2 (G-14) For taxable years ending on or after
2732	2732	3 December 31, 2008, an amount equal to the amount of
2733	2733	4 insurance premium expenses and costs otherwise allowed
2734	2734	5 as a deduction in computing base income, and that were
2735	2735	6 paid, accrued, or incurred, directly or indirectly, to
2736	2736	7 a person who would be a member of the same unitary
2737	2737	8 business group but for the fact that the person is
2738	2738	9 prohibited under Section 1501(a)(27) from being
2739	2739	10 included in the unitary business group because he or
2740	2740	11 she is ordinarily required to apportion business
2741	2741	12 income under different subsections of Section 304. The
2742	2742	13 addition modification required by this subparagraph
2743	2743	14 shall be reduced to the extent that dividends were
2744	2744	15 included in base income of the unitary group for the
2745	2745	16 same taxable year and received by the taxpayer or by a
2746	2746	17 member of the taxpayer's unitary business group
2747	2747	18 (including amounts included in gross income under
2748	2748	19 Sections 951 through 964 of the Internal Revenue Code
2749	2749	20 and amounts included in gross income under Section 78
2750	2750	21 of the Internal Revenue Code) with respect to the
2751	2751	22 stock of the same person to whom the premiums and costs
2752	2752	23 were directly or indirectly paid, incurred, or
2753	2753	24 accrued. The preceding sentence does not apply to the
2754	2754	25 extent that the same dividends caused a reduction to
2755	2755	26 the addition modification required under Section
2756	2756
2757	2757
2758	2758
2759	2759
2760	2760
2761	2761	SB1956 - 76 - LRB104 06843 HLH 16879 b
2762	2762
2763	2763
2764	2764	SB1956- 77 -LRB104 06843 HLH 16879 b SB1956 - 77 - LRB104 06843 HLH 16879 b
2765	2765	SB1956 - 77 - LRB104 06843 HLH 16879 b
2766	2766	1 203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this
2767	2767	2 Act;
2768	2768	3 (G-15) An amount equal to the credit allowable to
2769	2769	4 the taxpayer under Section 218(a) of this Act,
2770	2770	5 determined without regard to Section 218(c) of this
2771	2771	6 Act;
2772	2772	7 (G-16) For taxable years ending on or after
2773	2773	8 December 31, 2017, an amount equal to the deduction
2774	2774	9 allowed under Section 199 of the Internal Revenue Code
2775	2775	10 for the taxable year;
2776	2776	11 (G-17) the amount that is claimed as a federal
2777	2777	12 deduction when computing the taxpayer's federal
2778	2778	13 taxable income for the taxable year and that is
2779	2779	14 attributable to an endowment gift for which the
2780	2780	15 taxpayer receives a credit under the Illinois Gives
2781	2781	16 Tax Credit Act;
2782	2782	17 and by deducting from the total so obtained the sum of the
2783	2783	18 following amounts:
2784	2784	19 (H) An amount equal to all amounts included in
2785	2785	20 such total pursuant to the provisions of Sections
2786	2786	21 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 408
2787	2787	22 of the Internal Revenue Code or included in such total
2788	2788	23 as distributions under the provisions of any
2789	2789	24 retirement or disability plan for employees of any
2790	2790	25 governmental agency or unit, or retirement payments to
2791	2791	26 retired partners, which payments are excluded in
2792	2792
2793	2793
2794	2794
2795	2795
2796	2796
2797	2797	SB1956 - 77 - LRB104 06843 HLH 16879 b
2798	2798
2799	2799
2800	2800	SB1956- 78 -LRB104 06843 HLH 16879 b SB1956 - 78 - LRB104 06843 HLH 16879 b
2801	2801	SB1956 - 78 - LRB104 06843 HLH 16879 b
2802	2802	1 computing net earnings from self employment by Section
2803	2803	2 1402 of the Internal Revenue Code and regulations
2804	2804	3 adopted pursuant thereto;
2805	2805	4 (I) The valuation limitation amount;
2806	2806	5 (J) An amount equal to the amount of any tax
2807	2807	6 imposed by this Act which was refunded to the taxpayer
2808	2808	7 and included in such total for the taxable year;
2809	2809	8 (K) An amount equal to all amounts included in
2810	2810	9 taxable income as modified by subparagraphs (A), (B),
2811	2811	10 (C), (D), (E), (F) and (G) which are exempt from
2812	2812	11 taxation by this State either by reason of its
2813	2813	12 statutes or Constitution or by reason of the
2814	2814	13 Constitution, treaties or statutes of the United
2815	2815	14 States; provided that, in the case of any statute of
2816	2816	15 this State that exempts income derived from bonds or
2817	2817	16 other obligations from the tax imposed under this Act,
2818	2818	17 the amount exempted shall be the interest net of bond
2819	2819	18 premium amortization;
2820	2820	19 (L) With the exception of any amounts subtracted
2821	2821	20 under subparagraph (K), an amount equal to the sum of
2822	2822	21 all amounts disallowed as deductions by (i) Sections
2823	2823	22 171(a)(2) and 265(a)(2) of the Internal Revenue Code,
2824	2824	23 and all amounts of expenses allocable to interest and
2825	2825	24 disallowed as deductions by Section 265(a)(1) of the
2826	2826	25 Internal Revenue Code; and (ii) for taxable years
2827	2827	26 ending on or after August 13, 1999, Sections
2828	2828
2829	2829
2830	2830
2831	2831
2832	2832
2833	2833	SB1956 - 78 - LRB104 06843 HLH 16879 b
2834	2834
2835	2835
2836	2836	SB1956- 79 -LRB104 06843 HLH 16879 b SB1956 - 79 - LRB104 06843 HLH 16879 b
2837	2837	SB1956 - 79 - LRB104 06843 HLH 16879 b
2838	2838	1 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
2839	2839	2 Internal Revenue Code, plus, (iii) for taxable years
2840	2840	3 ending on or after December 31, 2011, Section
2841	2841	4 45G(e)(3) of the Internal Revenue Code and, for
2842	2842	5 taxable years ending on or after December 31, 2008,
2843	2843	6 any amount included in gross income under Section 87
2844	2844	7 of the Internal Revenue Code; the provisions of this
2845	2845	8 subparagraph are exempt from the provisions of Section
2846	2846	9 250;
2847	2847	10 (M) An amount equal to those dividends included in
2848	2848	11 such total which were paid by a corporation which
2849	2849	12 conducts business operations in a River Edge
2850	2850	13 Redevelopment Zone or zones created under the River
2851	2851	14 Edge Redevelopment Zone Act and conducts substantially
2852	2852	15 all of its operations in a River Edge Redevelopment
2853	2853	16 Zone or zones. This subparagraph (M) is exempt from
2854	2854	17 the provisions of Section 250;
2855	2855	18 (N) An amount equal to any contribution made to a
2856	2856	19 job training project established pursuant to the Tax
2857	2857	20 Increment Allocation Redevelopment Act;
2858	2858	21 (O) An amount equal to those dividends included in
2859	2859	22 such total that were paid by a corporation that
2860	2860	23 conducts business operations in a federally designated
2861	2861	24 Foreign Trade Zone or Sub-Zone and that is designated
2862	2862	25 a High Impact Business located in Illinois; provided
2863	2863	26 that dividends eligible for the deduction provided in
2864	2864
2865	2865
2866	2866
2867	2867
2868	2868
2869	2869	SB1956 - 79 - LRB104 06843 HLH 16879 b
2870	2870
2871	2871
2872	2872	SB1956- 80 -LRB104 06843 HLH 16879 b SB1956 - 80 - LRB104 06843 HLH 16879 b
2873	2873	SB1956 - 80 - LRB104 06843 HLH 16879 b
2874	2874	1 subparagraph (M) of paragraph (2) of this subsection
2875	2875	2 shall not be eligible for the deduction provided under
2876	2876	3 this subparagraph (O);
2877	2877	4 (P) An amount equal to the amount of the deduction
2878	2878	5 used to compute the federal income tax credit for
2879	2879	6 restoration of substantial amounts held under claim of
2880	2880	7 right for the taxable year pursuant to Section 1341 of
2881	2881	8 the Internal Revenue Code;
2882	2882	9 (Q) For taxable year 1999 and thereafter, an
2883	2883	10 amount equal to the amount of any (i) distributions,
2884	2884	11 to the extent includible in gross income for federal
2885	2885	12 income tax purposes, made to the taxpayer because of
2886	2886	13 his or her status as a victim of persecution for racial
2887	2887	14 or religious reasons by Nazi Germany or any other Axis
2888	2888	15 regime or as an heir of the victim and (ii) items of
2889	2889	16 income, to the extent includible in gross income for
2890	2890	17 federal income tax purposes, attributable to, derived
2891	2891	18 from or in any way related to assets stolen from,
2892	2892	19 hidden from, or otherwise lost to a victim of
2893	2893	20 persecution for racial or religious reasons by Nazi
2894	2894	21 Germany or any other Axis regime immediately prior to,
2895	2895	22 during, and immediately after World War II, including,
2896	2896	23 but not limited to, interest on the proceeds
2897	2897	24 receivable as insurance under policies issued to a
2898	2898	25 victim of persecution for racial or religious reasons
2899	2899	26 by Nazi Germany or any other Axis regime by European
2900	2900
2901	2901
2902	2902
2903	2903
2904	2904
2905	2905	SB1956 - 80 - LRB104 06843 HLH 16879 b
2906	2906
2907	2907
2908	2908	SB1956- 81 -LRB104 06843 HLH 16879 b SB1956 - 81 - LRB104 06843 HLH 16879 b
2909	2909	SB1956 - 81 - LRB104 06843 HLH 16879 b
2910	2910	1 insurance companies immediately prior to and during
2911	2911	2 World War II; provided, however, this subtraction from
2912	2912	3 federal adjusted gross income does not apply to assets
2913	2913	4 acquired with such assets or with the proceeds from
2914	2914	5 the sale of such assets; provided, further, this
2915	2915	6 paragraph shall only apply to a taxpayer who was the
2916	2916	7 first recipient of such assets after their recovery
2917	2917	8 and who is a victim of persecution for racial or
2918	2918	9 religious reasons by Nazi Germany or any other Axis
2919	2919	10 regime or as an heir of the victim. The amount of and
2920	2920	11 the eligibility for any public assistance, benefit, or
2921	2921	12 similar entitlement is not affected by the inclusion
2922	2922	13 of items (i) and (ii) of this paragraph in gross income
2923	2923	14 for federal income tax purposes. This paragraph is
2924	2924	15 exempt from the provisions of Section 250;
2925	2925	16 (R) For taxable years 2001 and thereafter, for the
2926	2926	17 taxable year in which the bonus depreciation deduction
2927	2927	18 is taken on the taxpayer's federal income tax return
2928	2928	19 under subsection (k) of Section 168 of the Internal
2929	2929	20 Revenue Code and for each applicable taxable year
2930	2930	21 thereafter, an amount equal to "x", where:
2931	2931	22 (1) "y" equals the amount of the depreciation
2932	2932	23 deduction taken for the taxable year on the
2933	2933	24 taxpayer's federal income tax return on property
2934	2934	25 for which the bonus depreciation deduction was
2935	2935	26 taken in any year under subsection (k) of Section
2936	2936
2937	2937
2938	2938
2939	2939
2940	2940
2941	2941	SB1956 - 81 - LRB104 06843 HLH 16879 b
2942	2942
2943	2943
2944	2944	SB1956- 82 -LRB104 06843 HLH 16879 b SB1956 - 82 - LRB104 06843 HLH 16879 b
2945	2945	SB1956 - 82 - LRB104 06843 HLH 16879 b
2946	2946	1 168 of the Internal Revenue Code, but not
2947	2947	2 including the bonus depreciation deduction;
2948	2948	3 (2) for taxable years ending on or before
2949	2949	4 December 31, 2005, "x" equals "y" multiplied by 30
2950	2950	5 and then divided by 70 (or "y" multiplied by
2951	2951	6 0.429); and
2952	2952	7 (3) for taxable years ending after December
2953	2953	8 31, 2005:
2954	2954	9 (i) for property on which a bonus
2955	2955	10 depreciation deduction of 30% of the adjusted
2956	2956	11 basis was taken, "x" equals "y" multiplied by
2957	2957	12 30 and then divided by 70 (or "y" multiplied
2958	2958	13 by 0.429);
2959	2959	14 (ii) for property on which a bonus
2960	2960	15 depreciation deduction of 50% of the adjusted
2961	2961	16 basis was taken, "x" equals "y" multiplied by
2962	2962	17 1.0;
2963	2963	18 (iii) for property on which a bonus
2964	2964	19 depreciation deduction of 100% of the adjusted
2965	2965	20 basis was taken in a taxable year ending on or
2966	2966	21 after December 31, 2021, "x" equals the
2967	2967	22 depreciation deduction that would be allowed
2968	2968	23 on that property if the taxpayer had made the
2969	2969	24 election under Section 168(k)(7) of the
2970	2970	25 Internal Revenue Code to not claim bonus
2971	2971	26 depreciation on that property; and
2972	2972
2973	2973
2974	2974
2975	2975
2976	2976
2977	2977	SB1956 - 82 - LRB104 06843 HLH 16879 b
2978	2978
2979	2979
2980	2980	SB1956- 83 -LRB104 06843 HLH 16879 b SB1956 - 83 - LRB104 06843 HLH 16879 b
2981	2981	SB1956 - 83 - LRB104 06843 HLH 16879 b
2982	2982	1 (iv) for property on which a bonus
2983	2983	2 depreciation deduction of a percentage other
2984	2984	3 than 30%, 50% or 100% of the adjusted basis
2985	2985	4 was taken in a taxable year ending on or after
2986	2986	5 December 31, 2021, "x" equals "y" multiplied
2987	2987	6 by 100 times the percentage bonus depreciation
2988	2988	7 on the property (that is, 100(bonus%)) and
2989	2989	8 then divided by 100 times 1 minus the
2990	2990	9 percentage bonus depreciation on the property
2991	2991	10 (that is, 100(1-bonus%)).
2992	2992	11 The aggregate amount deducted under this
2993	2993	12 subparagraph in all taxable years for any one piece of
2994	2994	13 property may not exceed the amount of the bonus
2995	2995	14 depreciation deduction taken on that property on the
2996	2996	15 taxpayer's federal income tax return under subsection
2997	2997	16 (k) of Section 168 of the Internal Revenue Code. This
2998	2998	17 subparagraph (R) is exempt from the provisions of
2999	2999	18 Section 250;
3000	3000	19 (S) If the taxpayer sells, transfers, abandons, or
3001	3001	20 otherwise disposes of property for which the taxpayer
3002	3002	21 was required in any taxable year to make an addition
3003	3003	22 modification under subparagraph (G-10), then an amount
3004	3004	23 equal to that addition modification.
3005	3005	24 If the taxpayer continues to own property through
3006	3006	25 the last day of the last tax year for which a
3007	3007	26 subtraction is allowed with respect to that property
3008	3008
3009	3009
3010	3010
3011	3011
3012	3012
3013	3013	SB1956 - 83 - LRB104 06843 HLH 16879 b
3014	3014
3015	3015
3016	3016	SB1956- 84 -LRB104 06843 HLH 16879 b SB1956 - 84 - LRB104 06843 HLH 16879 b
3017	3017	SB1956 - 84 - LRB104 06843 HLH 16879 b
3018	3018	1 under subparagraph (R) and for which the taxpayer was
3019	3019	2 required in any taxable year to make an addition
3020	3020	3 modification under subparagraph (G-10), then an amount
3021	3021	4 equal to that addition modification.
3022	3022	5 The taxpayer is allowed to take the deduction
3023	3023	6 under this subparagraph only once with respect to any
3024	3024	7 one piece of property.
3025	3025	8 This subparagraph (S) is exempt from the
3026	3026	9 provisions of Section 250;
3027	3027	10 (T) The amount of (i) any interest income (net of
3028	3028	11 the deductions allocable thereto) taken into account
3029	3029	12 for the taxable year with respect to a transaction
3030	3030	13 with a taxpayer that is required to make an addition
3031	3031	14 modification with respect to such transaction under
3032	3032	15 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
3033	3033	16 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
3034	3034	17 the amount of such addition modification and (ii) any
3035	3035	18 income from intangible property (net of the deductions
3036	3036	19 allocable thereto) taken into account for the taxable
3037	3037	20 year with respect to a transaction with a taxpayer
3038	3038	21 that is required to make an addition modification with
3039	3039	22 respect to such transaction under Section
3040	3040	23 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
3041	3041	24 203(d)(2)(D-8), but not to exceed the amount of such
3042	3042	25 addition modification. This subparagraph (T) is exempt
3043	3043	26 from the provisions of Section 250;
3044	3044
3045	3045
3046	3046
3047	3047
3048	3048
3049	3049	SB1956 - 84 - LRB104 06843 HLH 16879 b
3050	3050
3051	3051
3052	3052	SB1956- 85 -LRB104 06843 HLH 16879 b SB1956 - 85 - LRB104 06843 HLH 16879 b
3053	3053	SB1956 - 85 - LRB104 06843 HLH 16879 b
3054	3054	1 (U) An amount equal to the interest income taken
3055	3055	2 into account for the taxable year (net of the
3056	3056	3 deductions allocable thereto) with respect to
3057	3057	4 transactions with (i) a foreign person who would be a
3058	3058	5 member of the taxpayer's unitary business group but
3059	3059	6 for the fact the foreign person's business activity
3060	3060	7 outside the United States is 80% or more of that
3061	3061	8 person's total business activity and (ii) for taxable
3062	3062	9 years ending on or after December 31, 2008, to a person
3063	3063	10 who would be a member of the same unitary business
3064	3064	11 group but for the fact that the person is prohibited
3065	3065	12 under Section 1501(a)(27) from being included in the
3066	3066	13 unitary business group because he or she is ordinarily
3067	3067	14 required to apportion business income under different
3068	3068	15 subsections of Section 304, but not to exceed the
3069	3069	16 addition modification required to be made for the same
3070	3070	17 taxable year under Section 203(c)(2)(G-12) for
3071	3071	18 interest paid, accrued, or incurred, directly or
3072	3072	19 indirectly, to the same person. This subparagraph (U)
3073	3073	20 is exempt from the provisions of Section 250;
3074	3074	21 (V) An amount equal to the income from intangible
3075	3075	22 property taken into account for the taxable year (net
3076	3076	23 of the deductions allocable thereto) with respect to
3077	3077	24 transactions with (i) a foreign person who would be a
3078	3078	25 member of the taxpayer's unitary business group but
3079	3079	26 for the fact that the foreign person's business
3080	3080
3081	3081
3082	3082
3083	3083
3084	3084
3085	3085	SB1956 - 85 - LRB104 06843 HLH 16879 b
3086	3086
3087	3087
3088	3088	SB1956- 86 -LRB104 06843 HLH 16879 b SB1956 - 86 - LRB104 06843 HLH 16879 b
3089	3089	SB1956 - 86 - LRB104 06843 HLH 16879 b
3090	3090	1 activity outside the United States is 80% or more of
3091	3091	2 that person's total business activity and (ii) for
3092	3092	3 taxable years ending on or after December 31, 2008, to
3093	3093	4 a person who would be a member of the same unitary
3094	3094	5 business group but for the fact that the person is
3095	3095	6 prohibited under Section 1501(a)(27) from being
3096	3096	7 included in the unitary business group because he or
3097	3097	8 she is ordinarily required to apportion business
3098	3098	9 income under different subsections of Section 304, but
3099	3099	10 not to exceed the addition modification required to be
3100	3100	11 made for the same taxable year under Section
3101	3101	12 203(c)(2)(G-13) for intangible expenses and costs
3102	3102	13 paid, accrued, or incurred, directly or indirectly, to
3103	3103	14 the same foreign person. This subparagraph (V) is
3104	3104	15 exempt from the provisions of Section 250;
3105	3105	16 (W) in the case of an estate, an amount equal to
3106	3106	17 all amounts included in such total pursuant to the
3107	3107	18 provisions of Section 111 of the Internal Revenue Code
3108	3108	19 as a recovery of items previously deducted by the
3109	3109	20 decedent from adjusted gross income in the computation
3110	3110	21 of taxable income. This subparagraph (W) is exempt
3111	3111	22 from Section 250;
3112	3112	23 (X) an amount equal to the refund included in such
3113	3113	24 total of any tax deducted for federal income tax
3114	3114	25 purposes, to the extent that deduction was added back
3115	3115	26 under subparagraph (F). This subparagraph (X) is
3116	3116
3117	3117
3118	3118
3119	3119
3120	3120
3121	3121	SB1956 - 86 - LRB104 06843 HLH 16879 b
3122	3122
3123	3123
3124	3124	SB1956- 87 -LRB104 06843 HLH 16879 b SB1956 - 87 - LRB104 06843 HLH 16879 b
3125	3125	SB1956 - 87 - LRB104 06843 HLH 16879 b
3126	3126	1 exempt from the provisions of Section 250;
3127	3127	2 (Y) For taxable years ending on or after December
3128	3128	3 31, 2011, in the case of a taxpayer who was required to
3129	3129	4 add back any insurance premiums under Section
3130	3130	5 203(c)(2)(G-14), such taxpayer may elect to subtract
3131	3131	6 that part of a reimbursement received from the
3132	3132	7 insurance company equal to the amount of the expense
3133	3133	8 or loss (including expenses incurred by the insurance
3134	3134	9 company) that would have been taken into account as a
3135	3135	10 deduction for federal income tax purposes if the
3136	3136	11 expense or loss had been uninsured. If a taxpayer
3137	3137	12 makes the election provided for by this subparagraph
3138	3138	13 (Y), the insurer to which the premiums were paid must
3139	3139	14 add back to income the amount subtracted by the
3140	3140	15 taxpayer pursuant to this subparagraph (Y). This
3141	3141	16 subparagraph (Y) is exempt from the provisions of
3142	3142	17 Section 250;
3143	3143	18 (Z) For taxable years beginning after December 31,
3144	3144	19 2018 and before January 1, 2026, the amount of excess
3145	3145	20 business loss of the taxpayer disallowed as a
3146	3146	21 deduction by Section 461(l)(1)(B) of the Internal
3147	3147	22 Revenue Code; and
3148	3148	23 (AA) For taxable years beginning on or after
3149	3149	24 January 1, 2023, for any cannabis establishment
3150	3150	25 operating in this State and licensed under the
3151	3151	26 Cannabis Regulation and Tax Act or any cannabis
3152	3152
3153	3153
3154	3154
3155	3155
3156	3156
3157	3157	SB1956 - 87 - LRB104 06843 HLH 16879 b
3158	3158
3159	3159
3160	3160	SB1956- 88 -LRB104 06843 HLH 16879 b SB1956 - 88 - LRB104 06843 HLH 16879 b
3161	3161	SB1956 - 88 - LRB104 06843 HLH 16879 b
3162	3162	1 cultivation center or medical cannabis dispensing
3163	3163	2 organization operating in this State and licensed
3164	3164	3 under the Compassionate Use of Medical Cannabis
3165	3165	4 Program Act, an amount equal to the deductions that
3166	3166	5 were disallowed under Section 280E of the Internal
3167	3167	6 Revenue Code for the taxable year and that would not be
3168	3168	7 added back under this subsection. The provisions of
3169	3169	8 this subparagraph (AA) are exempt from the provisions
3170	3170	9 of Section 250.
3171	3171	10 (3) Limitation. The amount of any modification
3172	3172	11 otherwise required under this subsection shall, under
3173	3173	12 regulations prescribed by the Department, be adjusted by
3174	3174	13 any amounts included therein which were properly paid,
3175	3175	14 credited, or required to be distributed, or permanently
3176	3176	15 set aside for charitable purposes pursuant to Internal
3177	3177	16 Revenue Code Section 642(c) during the taxable year.
3178	3178	17 (d) Partnerships.
3179	3179	18 (1) In general. In the case of a partnership, base
3180	3180	19 income means an amount equal to the taxpayer's taxable
3181	3181	20 income for the taxable year as modified by paragraph (2).
3182	3182	21 (2) Modifications. The taxable income referred to in
3183	3183	22 paragraph (1) shall be modified by adding thereto the sum
3184	3184	23 of the following amounts:
3185	3185	24 (A) An amount equal to all amounts paid or accrued
3186	3186	25 to the taxpayer as interest or dividends during the
3187	3187
3188	3188
3189	3189
3190	3190
3191	3191
3192	3192	SB1956 - 88 - LRB104 06843 HLH 16879 b
3193	3193
3194	3194
3195	3195	SB1956- 89 -LRB104 06843 HLH 16879 b SB1956 - 89 - LRB104 06843 HLH 16879 b
3196	3196	SB1956 - 89 - LRB104 06843 HLH 16879 b
3197	3197	1 taxable year to the extent excluded from gross income
3198	3198	2 in the computation of taxable income;
3199	3199	3 (B) An amount equal to the amount of tax imposed by
3200	3200	4 this Act to the extent deducted from gross income for
3201	3201	5 the taxable year;
3202	3202	6 (C) The amount of deductions allowed to the
3203	3203	7 partnership pursuant to Section 707 (c) of the
3204	3204	8 Internal Revenue Code in calculating its taxable
3205	3205	9 income;
3206	3206	10 (D) An amount equal to the amount of the capital
3207	3207	11 gain deduction allowable under the Internal Revenue
3208	3208	12 Code, to the extent deducted from gross income in the
3209	3209	13 computation of taxable income;
3210	3210	14 (D-5) For taxable years 2001 and thereafter, an
3211	3211	15 amount equal to the bonus depreciation deduction taken
3212	3212	16 on the taxpayer's federal income tax return for the
3213	3213	17 taxable year under subsection (k) of Section 168 of
3214	3214	18 the Internal Revenue Code;
3215	3215	19 (D-6) If the taxpayer sells, transfers, abandons,
3216	3216	20 or otherwise disposes of property for which the
3217	3217	21 taxpayer was required in any taxable year to make an
3218	3218	22 addition modification under subparagraph (D-5), then
3219	3219	23 an amount equal to the aggregate amount of the
3220	3220	24 deductions taken in all taxable years under
3221	3221	25 subparagraph (O) with respect to that property.
3222	3222	26 If the taxpayer continues to own property through
3223	3223
3224	3224
3225	3225
3226	3226
3227	3227
3228	3228	SB1956 - 89 - LRB104 06843 HLH 16879 b
3229	3229
3230	3230
3231	3231	SB1956- 90 -LRB104 06843 HLH 16879 b SB1956 - 90 - LRB104 06843 HLH 16879 b
3232	3232	SB1956 - 90 - LRB104 06843 HLH 16879 b
3233	3233	1 the last day of the last tax year for which a
3234	3234	2 subtraction is allowed with respect to that property
3235	3235	3 under subparagraph (O) and for which the taxpayer was
3236	3236	4 allowed in any taxable year to make a subtraction
3237	3237	5 modification under subparagraph (O), then an amount
3238	3238	6 equal to that subtraction modification.
3239	3239	7 The taxpayer is required to make the addition
3240	3240	8 modification under this subparagraph only once with
3241	3241	9 respect to any one piece of property;
3242	3242	10 (D-7) An amount equal to the amount otherwise
3243	3243	11 allowed as a deduction in computing base income for
3244	3244	12 interest paid, accrued, or incurred, directly or
3245	3245	13 indirectly, (i) for taxable years ending on or after
3246	3246	14 December 31, 2004, to a foreign person who would be a
3247	3247	15 member of the same unitary business group but for the
3248	3248	16 fact the foreign person's business activity outside
3249	3249	17 the United States is 80% or more of the foreign
3250	3250	18 person's total business activity and (ii) for taxable
3251	3251	19 years ending on or after December 31, 2008, to a person
3252	3252	20 who would be a member of the same unitary business
3253	3253	21 group but for the fact that the person is prohibited
3254	3254	22 under Section 1501(a)(27) from being included in the
3255	3255	23 unitary business group because he or she is ordinarily
3256	3256	24 required to apportion business income under different
3257	3257	25 subsections of Section 304. The addition modification
3258	3258	26 required by this subparagraph shall be reduced to the
3259	3259
3260	3260
3261	3261
3262	3262
3263	3263
3264	3264	SB1956 - 90 - LRB104 06843 HLH 16879 b
3265	3265
3266	3266
3267	3267	SB1956- 91 -LRB104 06843 HLH 16879 b SB1956 - 91 - LRB104 06843 HLH 16879 b
3268	3268	SB1956 - 91 - LRB104 06843 HLH 16879 b
3269	3269	1 extent that dividends were included in base income of
3270	3270	2 the unitary group for the same taxable year and
3271	3271	3 received by the taxpayer or by a member of the
3272	3272	4 taxpayer's unitary business group (including amounts
3273	3273	5 included in gross income pursuant to Sections 951
3274	3274	6 through 964 of the Internal Revenue Code and amounts
3275	3275	7 included in gross income under Section 78 of the
3276	3276	8 Internal Revenue Code) with respect to the stock of
3277	3277	9 the same person to whom the interest was paid,
3278	3278	10 accrued, or incurred. For taxable years ending on and
3279	3279	11 after December 31, 2025, for purposes of applying this
3280	3280	12 paragraph in the case of a taxpayer to which
3281	3281	13 subsection (j) of Section 163 of the Internal Revenue
3282	3282	14 Code applies for the taxable year, the reduction in
3283	3283	15 the amount of interest for which a deduction is
3284	3284	16 allowed by reason of subsection (j) of Section 163
3285	3285	17 shall be treated as allocable first to persons who are
3286	3286	18 not foreign persons referred to in this paragraph and
3287	3287	19 then to those foreign persons.
3288	3288	20 For taxable years ending before December 31, 2025,
3289	3289	21 this This paragraph shall not apply to the following:
3290	3290	22 (i) an item of interest paid, accrued, or
3291	3291	23 incurred, directly or indirectly, to a person who
3292	3292	24 is subject in a foreign country or state, other
3293	3293	25 than a state which requires mandatory unitary
3294	3294	26 reporting, to a tax on or measured by net income
3295	3295
3296	3296
3297	3297
3298	3298
3299	3299
3300	3300	SB1956 - 91 - LRB104 06843 HLH 16879 b
3301	3301
3302	3302
3303	3303	SB1956- 92 -LRB104 06843 HLH 16879 b SB1956 - 92 - LRB104 06843 HLH 16879 b
3304	3304	SB1956 - 92 - LRB104 06843 HLH 16879 b
3305	3305	1 with respect to such interest; or
3306	3306	2 (ii) an item of interest paid, accrued, or
3307	3307	3 incurred, directly or indirectly, to a person if
3308	3308	4 the taxpayer can establish, based on a
3309	3309	5 preponderance of the evidence, both of the
3310	3310	6 following:
3311	3311	7 (a) the person, during the same taxable
3312	3312	8 year, paid, accrued, or incurred, the interest
3313	3313	9 to a person that is not a related member, and
3314	3314	10 (b) the transaction giving rise to the
3315	3315	11 interest expense between the taxpayer and the
3316	3316	12 person did not have as a principal purpose the
3317	3317	13 avoidance of Illinois income tax, and is paid
3318	3318	14 pursuant to a contract or agreement that
3319	3319	15 reflects an arm's-length interest rate and
3320	3320	16 terms; or
3321	3321	17 (iii) the taxpayer can establish, based on
3322	3322	18 clear and convincing evidence, that the interest
3323	3323	19 paid, accrued, or incurred relates to a contract
3324	3324	20 or agreement entered into at arm's-length rates
3325	3325	21 and terms and the principal purpose for the
3326	3326	22 payment is not federal or Illinois tax avoidance;
3327	3327	23 or
3328	3328	24 (iv) an item of interest paid, accrued, or
3329	3329	25 incurred, directly or indirectly, to a person if
3330	3330	26 the taxpayer establishes by clear and convincing
3331	3331
3332	3332
3333	3333
3334	3334
3335	3335
3336	3336	SB1956 - 92 - LRB104 06843 HLH 16879 b
3337	3337
3338	3338
3339	3339	SB1956- 93 -LRB104 06843 HLH 16879 b SB1956 - 93 - LRB104 06843 HLH 16879 b
3340	3340	SB1956 - 93 - LRB104 06843 HLH 16879 b
3341	3341	1 evidence that the adjustments are unreasonable; or
3342	3342	2 if the taxpayer and the Director agree in writing
3343	3343	3 to the application or use of an alternative method
3344	3344	4 of apportionment under Section 304(f).
3345	3345	5 For taxable years ending on or after December 31,
3346	3346	6 2025, this paragraph shall not apply to the following:
3347	3347	7 (i) an item of interest paid, accrued, or
3348	3348	8 incurred, directly or indirectly, to a person if
3349	3349	9 the taxpayer can establish, based on a
3350	3350	10 preponderance of the evidence, both of the
3351	3351	11 following:
3352	3352	12 (a) the person, during the same taxable
3353	3353	13 year, paid, accrued, or incurred, the interest
3354	3354	14 to a person that is not a related member, and
3355	3355	15 (b) the transaction giving rise to the
3356	3356	16 interest expense between the taxpayer and the
3357	3357	17 person did not have as a principal purpose the
3358	3358	18 avoidance of Illinois income tax and is paid
3359	3359	19 pursuant to a contract or agreement that
3360	3360	20 reflects an arm's-length interest rate and
3361	3361	21 terms; or
3362	3362	22 (ii) an item of interest paid, accrued, or
3363	3363	23 incurred, directly or indirectly, to a person if
3364	3364	24 the taxpayer establishes, by clear and convincing
3365	3365	25 evidence, that the adjustments are unreasonable;
3366	3366	26 or if the taxpayer and the Director agree in
3367	3367
3368	3368
3369	3369
3370	3370
3371	3371
3372	3372	SB1956 - 93 - LRB104 06843 HLH 16879 b
3373	3373
3374	3374
3375	3375	SB1956- 94 -LRB104 06843 HLH 16879 b SB1956 - 94 - LRB104 06843 HLH 16879 b
3376	3376	SB1956 - 94 - LRB104 06843 HLH 16879 b
3377	3377	1 writing to the application or use of an
3378	3378	2 alternative method of apportionment under Section
3379	3379	3 304(f).
3380	3380	4 Nothing in this subsection shall preclude the
3381	3381	5 Director from making any other adjustment
3382	3382	6 otherwise allowed under Section 404 of this Act
3383	3383	7 for any tax year beginning after the effective
3384	3384	8 date of this amendment provided such adjustment is
3385	3385	9 made pursuant to regulation adopted by the
3386	3386	10 Department and such regulations provide methods
3387	3387	11 and standards by which the Department will utilize
3388	3388	12 its authority under Section 404 of this Act; and
3389	3389	13 (D-8) An amount equal to the amount of intangible
3390	3390	14 expenses and costs otherwise allowed as a deduction in
3391	3391	15 computing base income, and that were paid, accrued, or
3392	3392	16 incurred, directly or indirectly, (i) for taxable
3393	3393	17 years ending on or after December 31, 2004, to a
3394	3394	18 foreign person who would be a member of the same
3395	3395	19 unitary business group but for the fact that the
3396	3396	20 foreign person's business activity outside the United
3397	3397	21 States is 80% or more of that person's total business
3398	3398	22 activity and (ii) for taxable years ending on or after
3399	3399	23 December 31, 2008, to a person who would be a member of
3400	3400	24 the same unitary business group but for the fact that
3401	3401	25 the person is prohibited under Section 1501(a)(27)
3402	3402	26 from being included in the unitary business group
3403	3403
3404	3404
3405	3405
3406	3406
3407	3407
3408	3408	SB1956 - 94 - LRB104 06843 HLH 16879 b
3409	3409
3410	3410
3411	3411	SB1956- 95 -LRB104 06843 HLH 16879 b SB1956 - 95 - LRB104 06843 HLH 16879 b
3412	3412	SB1956 - 95 - LRB104 06843 HLH 16879 b
3413	3413	1 because he or she is ordinarily required to apportion
3414	3414	2 business income under different subsections of Section
3415	3415	3 304. The addition modification required by this
3416	3416	4 subparagraph shall be reduced to the extent that
3417	3417	5 dividends were included in base income of the unitary
3418	3418	6 group for the same taxable year and received by the
3419	3419	7 taxpayer or by a member of the taxpayer's unitary
3420	3420	8 business group (including amounts included in gross
3421	3421	9 income pursuant to Sections 951 through 964 of the
3422	3422	10 Internal Revenue Code and amounts included in gross
3423	3423	11 income under Section 78 of the Internal Revenue Code)
3424	3424	12 with respect to the stock of the same person to whom
3425	3425	13 the intangible expenses and costs were directly or
3426	3426	14 indirectly paid, incurred or accrued. The preceding
3427	3427	15 sentence shall not apply to the extent that the same
3428	3428	16 dividends caused a reduction to the addition
3429	3429	17 modification required under Section 203(d)(2)(D-7) of
3430	3430	18 this Act. As used in this subparagraph, the term
3431	3431	19 "intangible expenses and costs" includes (1) expenses,
3432	3432	20 losses, and costs for, or related to, the direct or
3433	3433	21 indirect acquisition, use, maintenance or management,
3434	3434	22 ownership, sale, exchange, or any other disposition of
3435	3435	23 intangible property; (2) losses incurred, directly or
3436	3436	24 indirectly, from factoring transactions or discounting
3437	3437	25 transactions; (3) royalty, patent, technical, and
3438	3438	26 copyright fees; (4) licensing fees; and (5) other
3439	3439
3440	3440
3441	3441
3442	3442
3443	3443
3444	3444	SB1956 - 95 - LRB104 06843 HLH 16879 b
3445	3445
3446	3446
3447	3447	SB1956- 96 -LRB104 06843 HLH 16879 b SB1956 - 96 - LRB104 06843 HLH 16879 b
3448	3448	SB1956 - 96 - LRB104 06843 HLH 16879 b
3449	3449	1 similar expenses and costs. For purposes of this
3450	3450	2 subparagraph, "intangible property" includes patents,
3451	3451	3 patent applications, trade names, trademarks, service
3452	3452	4 marks, copyrights, mask works, trade secrets, and
3453	3453	5 similar types of intangible assets;
3454	3454	6 For taxable years ending on or after December 31,
3455	3455	7 2025, this This paragraph shall not apply to the
3456	3456	8 following:
3457	3457	9 (i) any item of intangible expenses or costs
3458	3458	10 paid, accrued, or incurred, directly or
3459	3459	11 indirectly, from a transaction with a person who
3460	3460	12 is subject in a foreign country or state, other
3461	3461	13 than a state which requires mandatory unitary
3462	3462	14 reporting, to a tax on or measured by net income
3463	3463	15 with respect to such item; or
3464	3464	16 (ii) any item of intangible expense or cost
3465	3465	17 paid, accrued, or incurred, directly or
3466	3466	18 indirectly, if the taxpayer can establish, based
3467	3467	19 on a preponderance of the evidence, both of the
3468	3468	20 following:
3469	3469	21 (a) the person during the same taxable
3470	3470	22 year paid, accrued, or incurred, the
3471	3471	23 intangible expense or cost to a person that is
3472	3472	24 not a related member, and
3473	3473	25 (b) the transaction giving rise to the
3474	3474	26 intangible expense or cost between the
3475	3475
3476	3476
3477	3477
3478	3478
3479	3479
3480	3480	SB1956 - 96 - LRB104 06843 HLH 16879 b
3481	3481
3482	3482
3483	3483	SB1956- 97 -LRB104 06843 HLH 16879 b SB1956 - 97 - LRB104 06843 HLH 16879 b
3484	3484	SB1956 - 97 - LRB104 06843 HLH 16879 b
3485	3485	1 taxpayer and the person did not have as a
3486	3486	2 principal purpose the avoidance of Illinois
3487	3487	3 income tax, and is paid pursuant to a contract
3488	3488	4 or agreement that reflects arm's-length terms;
3489	3489	5 or
3490	3490	6 (iii) any item of intangible expense or cost
3491	3491	7 paid, accrued, or incurred, directly or
3492	3492	8 indirectly, from a transaction with a person if
3493	3493	9 the taxpayer establishes by clear and convincing
3494	3494	10 evidence, that the adjustments are unreasonable;
3495	3495	11 or if the taxpayer and the Director agree in
3496	3496	12 writing to the application or use of an
3497	3497	13 alternative method of apportionment under Section
3498	3498	14 304(f);
3499	3499	15 For taxable years ending on or after December 31,
3500	3500	16 2025, this paragraph shall not apply to the following:
3501	3501	17 (i) any item of intangible expense or cost
3502	3502	18 paid, accrued, or incurred, directly or
3503	3503	19 indirectly, if the taxpayer can establish, based
3504	3504	20 on a preponderance of the evidence, both of the
3505	3505	21 following:
3506	3506	22 (a) the person during the same taxable
3507	3507	23 year paid, accrued, or incurred, the
3508	3508	24 intangible expense or cost to a person that is
3509	3509	25 not a related member, and
3510	3510	26 (b) the transaction giving rise to the
3511	3511
3512	3512
3513	3513
3514	3514
3515	3515
3516	3516	SB1956 - 97 - LRB104 06843 HLH 16879 b
3517	3517
3518	3518
3519	3519	SB1956- 98 -LRB104 06843 HLH 16879 b SB1956 - 98 - LRB104 06843 HLH 16879 b
3520	3520	SB1956 - 98 - LRB104 06843 HLH 16879 b
3521	3521	1 intangible expense or cost between the
3522	3522	2 taxpayer and the person did not have as a
3523	3523	3 principal purpose the avoidance of Illinois
3524	3524	4 income tax, and is paid pursuant to a contract
3525	3525	5 or agreement that reflects arm's-length terms;
3526	3526	6 or
3527	3527	7 (ii) any item of intangible expense or cost
3528	3528	8 paid, accrued, or incurred, directly or
3529	3529	9 indirectly, from a transaction with a person if
3530	3530	10 the taxpayer establishes, by clear and convincing
3531	3531	11 evidence, that the adjustments are unreasonable;
3532	3532	12 or if the taxpayer and the Director agree in
3533	3533	13 writing to the application or use of an
3534	3534	14 alternative method of apportionment under Section
3535	3535	15 304(f).
3536	3536	16 Nothing in this subsection shall preclude the
3537	3537	17 Director from making any other adjustment
3538	3538	18 otherwise allowed under Section 404 of this Act
3539	3539	19 for any tax year beginning after the effective
3540	3540	20 date of this amendment provided such adjustment is
3541	3541	21 made pursuant to regulation adopted by the
3542	3542	22 Department and such regulations provide methods
3543	3543	23 and standards by which the Department will utilize
3544	3544	24 its authority under Section 404 of this Act;
3545	3545	25 (D-9) For taxable years ending on or after
3546	3546	26 December 31, 2008, an amount equal to the amount of
3547	3547
3548	3548
3549	3549
3550	3550
3551	3551
3552	3552	SB1956 - 98 - LRB104 06843 HLH 16879 b
3553	3553
3554	3554
3555	3555	SB1956- 99 -LRB104 06843 HLH 16879 b SB1956 - 99 - LRB104 06843 HLH 16879 b
3556	3556	SB1956 - 99 - LRB104 06843 HLH 16879 b
3557	3557	1 insurance premium expenses and costs otherwise allowed
3558	3558	2 as a deduction in computing base income, and that were
3559	3559	3 paid, accrued, or incurred, directly or indirectly, to
3560	3560	4 a person who would be a member of the same unitary
3561	3561	5 business group but for the fact that the person is
3562	3562	6 prohibited under Section 1501(a)(27) from being
3563	3563	7 included in the unitary business group because he or
3564	3564	8 she is ordinarily required to apportion business
3565	3565	9 income under different subsections of Section 304. The
3566	3566	10 addition modification required by this subparagraph
3567	3567	11 shall be reduced to the extent that dividends were
3568	3568	12 included in base income of the unitary group for the
3569	3569	13 same taxable year and received by the taxpayer or by a
3570	3570	14 member of the taxpayer's unitary business group
3571	3571	15 (including amounts included in gross income under
3572	3572	16 Sections 951 through 964 of the Internal Revenue Code
3573	3573	17 and amounts included in gross income under Section 78
3574	3574	18 of the Internal Revenue Code) with respect to the
3575	3575	19 stock of the same person to whom the premiums and costs
3576	3576	20 were directly or indirectly paid, incurred, or
3577	3577	21 accrued. The preceding sentence does not apply to the
3578	3578	22 extent that the same dividends caused a reduction to
3579	3579	23 the addition modification required under Section
3580	3580	24 203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act;
3581	3581	25 (D-10) An amount equal to the credit allowable to
3582	3582	26 the taxpayer under Section 218(a) of this Act,
3583	3583
3584	3584
3585	3585
3586	3586
3587	3587
3588	3588	SB1956 - 99 - LRB104 06843 HLH 16879 b
3589	3589
3590	3590
3591	3591	SB1956- 100 -LRB104 06843 HLH 16879 b SB1956 - 100 - LRB104 06843 HLH 16879 b
3592	3592	SB1956 - 100 - LRB104 06843 HLH 16879 b
3593	3593	1 determined without regard to Section 218(c) of this
3594	3594	2 Act;
3595	3595	3 (D-11) For taxable years ending on or after
3596	3596	4 December 31, 2017, an amount equal to the deduction
3597	3597	5 allowed under Section 199 of the Internal Revenue Code
3598	3598	6 for the taxable year;
3599	3599	7 (D-12) the amount that is claimed as a federal
3600	3600	8 deduction when computing the taxpayer's federal
3601	3601	9 taxable income for the taxable year and that is
3602	3602	10 attributable to an endowment gift for which the
3603	3603	11 taxpayer receives a credit under the Illinois Gives
3604	3604	12 Tax Credit Act;
3605	3605	13 and by deducting from the total so obtained the following
3606	3606	14 amounts:
3607	3607	15 (E) The valuation limitation amount;
3608	3608	16 (F) An amount equal to the amount of any tax
3609	3609	17 imposed by this Act which was refunded to the taxpayer
3610	3610	18 and included in such total for the taxable year;
3611	3611	19 (G) An amount equal to all amounts included in
3612	3612	20 taxable income as modified by subparagraphs (A), (B),
3613	3613	21 (C) and (D) which are exempt from taxation by this
3614	3614	22 State either by reason of its statutes or Constitution
3615	3615	23 or by reason of the Constitution, treaties or statutes
3616	3616	24 of the United States; provided that, in the case of any
3617	3617	25 statute of this State that exempts income derived from
3618	3618	26 bonds or other obligations from the tax imposed under
3619	3619
3620	3620
3621	3621
3622	3622
3623	3623
3624	3624	SB1956 - 100 - LRB104 06843 HLH 16879 b
3625	3625
3626	3626
3627	3627	SB1956- 101 -LRB104 06843 HLH 16879 b SB1956 - 101 - LRB104 06843 HLH 16879 b
3628	3628	SB1956 - 101 - LRB104 06843 HLH 16879 b
3629	3629	1 this Act, the amount exempted shall be the interest
3630	3630	2 net of bond premium amortization;
3631	3631	3 (H) Any income of the partnership which
3632	3632	4 constitutes personal service income as defined in
3633	3633	5 Section 1348(b)(1) of the Internal Revenue Code (as in
3634	3634	6 effect December 31, 1981) or a reasonable allowance
3635	3635	7 for compensation paid or accrued for services rendered
3636	3636	8 by partners to the partnership, whichever is greater;
3637	3637	9 this subparagraph (H) is exempt from the provisions of
3638	3638	10 Section 250;
3639	3639	11 (I) An amount equal to all amounts of income
3640	3640	12 distributable to an entity subject to the Personal
3641	3641	13 Property Tax Replacement Income Tax imposed by
3642	3642	14 subsections (c) and (d) of Section 201 of this Act
3643	3643	15 including amounts distributable to organizations
3644	3644	16 exempt from federal income tax by reason of Section
3645	3645	17 501(a) of the Internal Revenue Code; this subparagraph
3646	3646	18 (I) is exempt from the provisions of Section 250;
3647	3647	19 (J) With the exception of any amounts subtracted
3648	3648	20 under subparagraph (G), an amount equal to the sum of
3649	3649	21 all amounts disallowed as deductions by (i) Sections
3650	3650	22 171(a)(2) and 265(a)(2) of the Internal Revenue Code,
3651	3651	23 and all amounts of expenses allocable to interest and
3652	3652	24 disallowed as deductions by Section 265(a)(1) of the
3653	3653	25 Internal Revenue Code; and (ii) for taxable years
3654	3654	26 ending on or after August 13, 1999, Sections
3655	3655
3656	3656
3657	3657
3658	3658
3659	3659
3660	3660	SB1956 - 101 - LRB104 06843 HLH 16879 b
3661	3661
3662	3662
3663	3663	SB1956- 102 -LRB104 06843 HLH 16879 b SB1956 - 102 - LRB104 06843 HLH 16879 b
3664	3664	SB1956 - 102 - LRB104 06843 HLH 16879 b
3665	3665	1 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
3666	3666	2 Internal Revenue Code, plus, (iii) for taxable years
3667	3667	3 ending on or after December 31, 2011, Section
3668	3668	4 45G(e)(3) of the Internal Revenue Code and, for
3669	3669	5 taxable years ending on or after December 31, 2008,
3670	3670	6 any amount included in gross income under Section 87
3671	3671	7 of the Internal Revenue Code; the provisions of this
3672	3672	8 subparagraph are exempt from the provisions of Section
3673	3673	9 250;
3674	3674	10 (K) An amount equal to those dividends included in
3675	3675	11 such total which were paid by a corporation which
3676	3676	12 conducts business operations in a River Edge
3677	3677	13 Redevelopment Zone or zones created under the River
3678	3678	14 Edge Redevelopment Zone Act and conducts substantially
3679	3679	15 all of its operations from a River Edge Redevelopment
3680	3680	16 Zone or zones. This subparagraph (K) is exempt from
3681	3681	17 the provisions of Section 250;
3682	3682	18 (L) An amount equal to any contribution made to a
3683	3683	19 job training project established pursuant to the Real
3684	3684	20 Property Tax Increment Allocation Redevelopment Act;
3685	3685	21 (M) An amount equal to those dividends included in
3686	3686	22 such total that were paid by a corporation that
3687	3687	23 conducts business operations in a federally designated
3688	3688	24 Foreign Trade Zone or Sub-Zone and that is designated
3689	3689	25 a High Impact Business located in Illinois; provided
3690	3690	26 that dividends eligible for the deduction provided in
3691	3691
3692	3692
3693	3693
3694	3694
3695	3695
3696	3696	SB1956 - 102 - LRB104 06843 HLH 16879 b
3697	3697
3698	3698
3699	3699	SB1956- 103 -LRB104 06843 HLH 16879 b SB1956 - 103 - LRB104 06843 HLH 16879 b
3700	3700	SB1956 - 103 - LRB104 06843 HLH 16879 b
3701	3701	1 subparagraph (K) of paragraph (2) of this subsection
3702	3702	2 shall not be eligible for the deduction provided under
3703	3703	3 this subparagraph (M);
3704	3704	4 (N) An amount equal to the amount of the deduction
3705	3705	5 used to compute the federal income tax credit for
3706	3706	6 restoration of substantial amounts held under claim of
3707	3707	7 right for the taxable year pursuant to Section 1341 of
3708	3708	8 the Internal Revenue Code;
3709	3709	9 (O) For taxable years 2001 and thereafter, for the
3710	3710	10 taxable year in which the bonus depreciation deduction
3711	3711	11 is taken on the taxpayer's federal income tax return
3712	3712	12 under subsection (k) of Section 168 of the Internal
3713	3713	13 Revenue Code and for each applicable taxable year
3714	3714	14 thereafter, an amount equal to "x", where:
3715	3715	15 (1) "y" equals the amount of the depreciation
3716	3716	16 deduction taken for the taxable year on the
3717	3717	17 taxpayer's federal income tax return on property
3718	3718	18 for which the bonus depreciation deduction was
3719	3719	19 taken in any year under subsection (k) of Section
3720	3720	20 168 of the Internal Revenue Code, but not
3721	3721	21 including the bonus depreciation deduction;
3722	3722	22 (2) for taxable years ending on or before
3723	3723	23 December 31, 2005, "x" equals "y" multiplied by 30
3724	3724	24 and then divided by 70 (or "y" multiplied by
3725	3725	25 0.429); and
3726	3726	26 (3) for taxable years ending after December
3727	3727
3728	3728
3729	3729
3730	3730
3731	3731
3732	3732	SB1956 - 103 - LRB104 06843 HLH 16879 b
3733	3733
3734	3734
3735	3735	SB1956- 104 -LRB104 06843 HLH 16879 b SB1956 - 104 - LRB104 06843 HLH 16879 b
3736	3736	SB1956 - 104 - LRB104 06843 HLH 16879 b
3737	3737	1 31, 2005:
3738	3738	2 (i) for property on which a bonus
3739	3739	3 depreciation deduction of 30% of the adjusted
3740	3740	4 basis was taken, "x" equals "y" multiplied by
3741	3741	5 30 and then divided by 70 (or "y" multiplied
3742	3742	6 by 0.429);
3743	3743	7 (ii) for property on which a bonus
3744	3744	8 depreciation deduction of 50% of the adjusted
3745	3745	9 basis was taken, "x" equals "y" multiplied by
3746	3746	10 1.0;
3747	3747	11 (iii) for property on which a bonus
3748	3748	12 depreciation deduction of 100% of the adjusted
3749	3749	13 basis was taken in a taxable year ending on or
3750	3750	14 after December 31, 2021, "x" equals the
3751	3751	15 depreciation deduction that would be allowed
3752	3752	16 on that property if the taxpayer had made the
3753	3753	17 election under Section 168(k)(7) of the
3754	3754	18 Internal Revenue Code to not claim bonus
3755	3755	19 depreciation on that property; and
3756	3756	20 (iv) for property on which a bonus
3757	3757	21 depreciation deduction of a percentage other
3758	3758	22 than 30%, 50% or 100% of the adjusted basis
3759	3759	23 was taken in a taxable year ending on or after
3760	3760	24 December 31, 2021, "x" equals "y" multiplied
3761	3761	25 by 100 times the percentage bonus depreciation
3762	3762	26 on the property (that is, 100(bonus%)) and
3763	3763
3764	3764
3765	3765
3766	3766
3767	3767
3768	3768	SB1956 - 104 - LRB104 06843 HLH 16879 b
3769	3769
3770	3770
3771	3771	SB1956- 105 -LRB104 06843 HLH 16879 b SB1956 - 105 - LRB104 06843 HLH 16879 b
3772	3772	SB1956 - 105 - LRB104 06843 HLH 16879 b
3773	3773	1 then divided by 100 times 1 minus the
3774	3774	2 percentage bonus depreciation on the property
3775	3775	3 (that is, 100(1-bonus%)).
3776	3776	4 The aggregate amount deducted under this
3777	3777	5 subparagraph in all taxable years for any one piece of
3778	3778	6 property may not exceed the amount of the bonus
3779	3779	7 depreciation deduction taken on that property on the
3780	3780	8 taxpayer's federal income tax return under subsection
3781	3781	9 (k) of Section 168 of the Internal Revenue Code. This
3782	3782	10 subparagraph (O) is exempt from the provisions of
3783	3783	11 Section 250;
3784	3784	12 (P) If the taxpayer sells, transfers, abandons, or
3785	3785	13 otherwise disposes of property for which the taxpayer
3786	3786	14 was required in any taxable year to make an addition
3787	3787	15 modification under subparagraph (D-5), then an amount
3788	3788	16 equal to that addition modification.
3789	3789	17 If the taxpayer continues to own property through
3790	3790	18 the last day of the last tax year for which a
3791	3791	19 subtraction is allowed with respect to that property
3792	3792	20 under subparagraph (O) and for which the taxpayer was
3793	3793	21 required in any taxable year to make an addition
3794	3794	22 modification under subparagraph (D-5), then an amount
3795	3795	23 equal to that addition modification.
3796	3796	24 The taxpayer is allowed to take the deduction
3797	3797	25 under this subparagraph only once with respect to any
3798	3798	26 one piece of property.
3799	3799
3800	3800
3801	3801
3802	3802
3803	3803
3804	3804	SB1956 - 105 - LRB104 06843 HLH 16879 b
3805	3805
3806	3806
3807	3807	SB1956- 106 -LRB104 06843 HLH 16879 b SB1956 - 106 - LRB104 06843 HLH 16879 b
3808	3808	SB1956 - 106 - LRB104 06843 HLH 16879 b
3809	3809	1 This subparagraph (P) is exempt from the
3810	3810	2 provisions of Section 250;
3811	3811	3 (Q) The amount of (i) any interest income (net of
3812	3812	4 the deductions allocable thereto) taken into account
3813	3813	5 for the taxable year with respect to a transaction
3814	3814	6 with a taxpayer that is required to make an addition
3815	3815	7 modification with respect to such transaction under
3816	3816	8 Section 203(a)(2)(D-17), 203(b)(2)(E-12),
3817	3817	9 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
3818	3818	10 the amount of such addition modification and (ii) any
3819	3819	11 income from intangible property (net of the deductions
3820	3820	12 allocable thereto) taken into account for the taxable
3821	3821	13 year with respect to a transaction with a taxpayer
3822	3822	14 that is required to make an addition modification with
3823	3823	15 respect to such transaction under Section
3824	3824	16 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
3825	3825	17 203(d)(2)(D-8), but not to exceed the amount of such
3826	3826	18 addition modification. This subparagraph (Q) is exempt
3827	3827	19 from Section 250;
3828	3828	20 (R) An amount equal to the interest income taken
3829	3829	21 into account for the taxable year (net of the
3830	3830	22 deductions allocable thereto) with respect to
3831	3831	23 transactions with (i) a foreign person who would be a
3832	3832	24 member of the taxpayer's unitary business group but
3833	3833	25 for the fact that the foreign person's business
3834	3834	26 activity outside the United States is 80% or more of
3835	3835
3836	3836
3837	3837
3838	3838
3839	3839
3840	3840	SB1956 - 106 - LRB104 06843 HLH 16879 b
3841	3841
3842	3842
3843	3843	SB1956- 107 -LRB104 06843 HLH 16879 b SB1956 - 107 - LRB104 06843 HLH 16879 b
3844	3844	SB1956 - 107 - LRB104 06843 HLH 16879 b
3845	3845	1 that person's total business activity and (ii) for
3846	3846	2 taxable years ending on or after December 31, 2008, to
3847	3847	3 a person who would be a member of the same unitary
3848	3848	4 business group but for the fact that the person is
3849	3849	5 prohibited under Section 1501(a)(27) from being
3850	3850	6 included in the unitary business group because he or
3851	3851	7 she is ordinarily required to apportion business
3852	3852	8 income under different subsections of Section 304, but
3853	3853	9 not to exceed the addition modification required to be
3854	3854	10 made for the same taxable year under Section
3855	3855	11 203(d)(2)(D-7) for interest paid, accrued, or
3856	3856	12 incurred, directly or indirectly, to the same person.
3857	3857	13 This subparagraph (R) is exempt from Section 250;
3858	3858	14 (S) An amount equal to the income from intangible
3859	3859	15 property taken into account for the taxable year (net
3860	3860	16 of the deductions allocable thereto) with respect to
3861	3861	17 transactions with (i) a foreign person who would be a
3862	3862	18 member of the taxpayer's unitary business group but
3863	3863	19 for the fact that the foreign person's business
3864	3864	20 activity outside the United States is 80% or more of
3865	3865	21 that person's total business activity and (ii) for
3866	3866	22 taxable years ending on or after December 31, 2008, to
3867	3867	23 a person who would be a member of the same unitary
3868	3868	24 business group but for the fact that the person is
3869	3869	25 prohibited under Section 1501(a)(27) from being
3870	3870	26 included in the unitary business group because he or
3871	3871
3872	3872
3873	3873
3874	3874
3875	3875
3876	3876	SB1956 - 107 - LRB104 06843 HLH 16879 b
3877	3877
3878	3878
3879	3879	SB1956- 108 -LRB104 06843 HLH 16879 b SB1956 - 108 - LRB104 06843 HLH 16879 b
3880	3880	SB1956 - 108 - LRB104 06843 HLH 16879 b
3881	3881	1 she is ordinarily required to apportion business
3882	3882	2 income under different subsections of Section 304, but
3883	3883	3 not to exceed the addition modification required to be
3884	3884	4 made for the same taxable year under Section
3885	3885	5 203(d)(2)(D-8) for intangible expenses and costs paid,
3886	3886	6 accrued, or incurred, directly or indirectly, to the
3887	3887	7 same person. This subparagraph (S) is exempt from
3888	3888	8 Section 250;
3889	3889	9 (T) For taxable years ending on or after December
3890	3890	10 31, 2011, in the case of a taxpayer who was required to
3891	3891	11 add back any insurance premiums under Section
3892	3892	12 203(d)(2)(D-9), such taxpayer may elect to subtract
3893	3893	13 that part of a reimbursement received from the
3894	3894	14 insurance company equal to the amount of the expense
3895	3895	15 or loss (including expenses incurred by the insurance
3896	3896	16 company) that would have been taken into account as a
3897	3897	17 deduction for federal income tax purposes if the
3898	3898	18 expense or loss had been uninsured. If a taxpayer
3899	3899	19 makes the election provided for by this subparagraph
3900	3900	20 (T), the insurer to which the premiums were paid must
3901	3901	21 add back to income the amount subtracted by the
3902	3902	22 taxpayer pursuant to this subparagraph (T). This
3903	3903	23 subparagraph (T) is exempt from the provisions of
3904	3904	24 Section 250; and
3905	3905	25 (U) For taxable years beginning on or after
3906	3906	26 January 1, 2023, for any cannabis establishment
3907	3907
3908	3908
3909	3909
3910	3910
3911	3911
3912	3912	SB1956 - 108 - LRB104 06843 HLH 16879 b
3913	3913
3914	3914
3915	3915	SB1956- 109 -LRB104 06843 HLH 16879 b SB1956 - 109 - LRB104 06843 HLH 16879 b
3916	3916	SB1956 - 109 - LRB104 06843 HLH 16879 b
3917	3917	1 operating in this State and licensed under the
3918	3918	2 Cannabis Regulation and Tax Act or any cannabis
3919	3919	3 cultivation center or medical cannabis dispensing
3920	3920	4 organization operating in this State and licensed
3921	3921	5 under the Compassionate Use of Medical Cannabis
3922	3922	6 Program Act, an amount equal to the deductions that
3923	3923	7 were disallowed under Section 280E of the Internal
3924	3924	8 Revenue Code for the taxable year and that would not be
3925	3925	9 added back under this subsection. The provisions of
3926	3926	10 this subparagraph (U) are exempt from the provisions
3927	3927	11 of Section 250.
3928	3928	12 (e) Gross income; adjusted gross income; taxable income.
3929	3929	13 (1) In general. Subject to the provisions of paragraph
3930	3930	14 (2) and subsection (b)(3), for purposes of this Section
3931	3931	15 and Section 803(e), a taxpayer's gross income, adjusted
3932	3932	16 gross income, or taxable income for the taxable year shall
3933	3933	17 mean the amount of gross income, adjusted gross income or
3934	3934	18 taxable income properly reportable for federal income tax
3935	3935	19 purposes for the taxable year under the provisions of the
3936	3936	20 Internal Revenue Code. Taxable income may be less than
3937	3937	21 zero. However, for taxable years ending on or after
3938	3938	22 December 31, 1986, net operating loss carryforwards from
3939	3939	23 taxable years ending prior to December 31, 1986, may not
3940	3940	24 exceed the sum of federal taxable income for the taxable
3941	3941	25 year before net operating loss deduction, plus the excess
3942	3942
3943	3943
3944	3944
3945	3945
3946	3946
3947	3947	SB1956 - 109 - LRB104 06843 HLH 16879 b
3948	3948
3949	3949
3950	3950	SB1956- 110 -LRB104 06843 HLH 16879 b SB1956 - 110 - LRB104 06843 HLH 16879 b
3951	3951	SB1956 - 110 - LRB104 06843 HLH 16879 b
3952	3952	1 of addition modifications over subtraction modifications
3953	3953	2 for the taxable year. For taxable years ending prior to
3954	3954	3 December 31, 1986, taxable income may never be an amount
3955	3955	4 in excess of the net operating loss for the taxable year as
3956	3956	5 defined in subsections (c) and (d) of Section 172 of the
3957	3957	6 Internal Revenue Code, provided that when taxable income
3958	3958	7 of a corporation (other than a Subchapter S corporation),
3959	3959	8 trust, or estate is less than zero and addition
3960	3960	9 modifications, other than those provided by subparagraph
3961	3961	10 (E) of paragraph (2) of subsection (b) for corporations or
3962	3962	11 subparagraph (E) of paragraph (2) of subsection (c) for
3963	3963	12 trusts and estates, exceed subtraction modifications, an
3964	3964	13 addition modification must be made under those
3965	3965	14 subparagraphs for any other taxable year to which the
3966	3966	15 taxable income less than zero (net operating loss) is
3967	3967	16 applied under Section 172 of the Internal Revenue Code or
3968	3968	17 under subparagraph (E) of paragraph (2) of this subsection
3969	3969	18 (e) applied in conjunction with Section 172 of the
3970	3970	19 Internal Revenue Code.
3971	3971	20 (2) Special rule. For purposes of paragraph (1) of
3972	3972	21 this subsection, the taxable income properly reportable
3973	3973	22 for federal income tax purposes shall mean:
3974	3974	23 (A) Certain life insurance companies. In the case
3975	3975	24 of a life insurance company subject to the tax imposed
3976	3976	25 by Section 801 of the Internal Revenue Code, life
3977	3977	26 insurance company taxable income, plus the amount of
3978	3978
3979	3979
3980	3980
3981	3981
3982	3982
3983	3983	SB1956 - 110 - LRB104 06843 HLH 16879 b
3984	3984
3985	3985
3986	3986	SB1956- 111 -LRB104 06843 HLH 16879 b SB1956 - 111 - LRB104 06843 HLH 16879 b
3987	3987	SB1956 - 111 - LRB104 06843 HLH 16879 b
3988	3988	1 distribution from pre-1984 policyholder surplus
3989	3989	2 accounts as calculated under Section 815a of the
3990	3990	3 Internal Revenue Code;
3991	3991	4 (B) Certain other insurance companies. In the case
3992	3992	5 of mutual insurance companies subject to the tax
3993	3993	6 imposed by Section 831 of the Internal Revenue Code,
3994	3994	7 insurance company taxable income;
3995	3995	8 (C) Regulated investment companies. In the case of
3996	3996	9 a regulated investment company subject to the tax
3997	3997	10 imposed by Section 852 of the Internal Revenue Code,
3998	3998	11 investment company taxable income;
3999	3999	12 (D) Real estate investment trusts. In the case of
4000	4000	13 a real estate investment trust subject to the tax
4001	4001	14 imposed by Section 857 of the Internal Revenue Code,
4002	4002	15 real estate investment trust taxable income;
4003	4003	16 (E) Consolidated corporations. In the case of a
4004	4004	17 corporation which is a member of an affiliated group
4005	4005	18 of corporations filing a consolidated income tax
4006	4006	19 return for the taxable year for federal income tax
4007	4007	20 purposes, taxable income determined as if such
4008	4008	21 corporation had filed a separate return for federal
4009	4009	22 income tax purposes for the taxable year and each
4010	4010	23 preceding taxable year for which it was a member of an
4011	4011	24 affiliated group. For purposes of this subparagraph,
4012	4012	25 the taxpayer's separate taxable income shall be
4013	4013	26 determined as if the election provided by Section
4014	4014
4015	4015
4016	4016
4017	4017
4018	4018
4019	4019	SB1956 - 111 - LRB104 06843 HLH 16879 b
4020	4020
4021	4021
4022	4022	SB1956- 112 -LRB104 06843 HLH 16879 b SB1956 - 112 - LRB104 06843 HLH 16879 b
4023	4023	SB1956 - 112 - LRB104 06843 HLH 16879 b
4024	4024	1 243(b)(2) of the Internal Revenue Code had been in
4025	4025	2 effect for all such years;
4026	4026	3 (F) Cooperatives. In the case of a cooperative
4027	4027	4 corporation or association, the taxable income of such
4028	4028	5 organization determined in accordance with the
4029	4029	6 provisions of Section 1381 through 1388 of the
4030	4030	7 Internal Revenue Code, but without regard to the
4031	4031	8 prohibition against offsetting losses from patronage
4032	4032	9 activities against income from nonpatronage
4033	4033	10 activities; except that a cooperative corporation or
4034	4034	11 association may make an election to follow its federal
4035	4035	12 income tax treatment of patronage losses and
4036	4036	13 nonpatronage losses. In the event such election is
4037	4037	14 made, such losses shall be computed and carried over
4038	4038	15 in a manner consistent with subsection (a) of Section
4039	4039	16 207 of this Act and apportioned by the apportionment
4040	4040	17 factor reported by the cooperative on its Illinois
4041	4041	18 income tax return filed for the taxable year in which
4042	4042	19 the losses are incurred. The election shall be
4043	4043	20 effective for all taxable years with original returns
4044	4044	21 due on or after the date of the election. In addition,
4045	4045	22 the cooperative may file an amended return or returns,
4046	4046	23 as allowed under this Act, to provide that the
4047	4047	24 election shall be effective for losses incurred or
4048	4048	25 carried forward for taxable years occurring prior to
4049	4049	26 the date of the election. Once made, the election may
4050	4050
4051	4051
4052	4052
4053	4053
4054	4054
4055	4055	SB1956 - 112 - LRB104 06843 HLH 16879 b
4056	4056
4057	4057
4058	4058	SB1956- 113 -LRB104 06843 HLH 16879 b SB1956 - 113 - LRB104 06843 HLH 16879 b
4059	4059	SB1956 - 113 - LRB104 06843 HLH 16879 b
4060	4060	1 only be revoked upon approval of the Director. The
4061	4061	2 Department shall adopt rules setting forth
4062	4062	3 requirements for documenting the elections and any
4063	4063	4 resulting Illinois net loss and the standards to be
4064	4064	5 used by the Director in evaluating requests to revoke
4065	4065	6 elections. Public Act 96-932 is declaratory of
4066	4066	7 existing law;
4067	4067	8 (G) Subchapter S corporations. In the case of: (i)
4068	4068	9 a Subchapter S corporation for which there is in
4069	4069	10 effect an election for the taxable year under Section
4070	4070	11 1362 of the Internal Revenue Code, the taxable income
4071	4071	12 of such corporation determined in accordance with
4072	4072	13 Section 1363(b) of the Internal Revenue Code, except
4073	4073	14 that taxable income shall take into account those
4074	4074	15 items which are required by Section 1363(b)(1) of the
4075	4075	16 Internal Revenue Code to be separately stated; and
4076	4076	17 (ii) a Subchapter S corporation for which there is in
4077	4077	18 effect a federal election to opt out of the provisions
4078	4078	19 of the Subchapter S Revision Act of 1982 and have
4079	4079	20 applied instead the prior federal Subchapter S rules
4080	4080	21 as in effect on July 1, 1982, the taxable income of
4081	4081	22 such corporation determined in accordance with the
4082	4082	23 federal Subchapter S rules as in effect on July 1,
4083	4083	24 1982; and
4084	4084	25 (H) Partnerships. In the case of a partnership,
4085	4085	26 taxable income determined in accordance with Section
4086	4086
4087	4087
4088	4088
4089	4089
4090	4090
4091	4091	SB1956 - 113 - LRB104 06843 HLH 16879 b
4092	4092
4093	4093
4094	4094	SB1956- 114 -LRB104 06843 HLH 16879 b SB1956 - 114 - LRB104 06843 HLH 16879 b
4095	4095	SB1956 - 114 - LRB104 06843 HLH 16879 b
4096	4096	1 703 of the Internal Revenue Code, except that taxable
4097	4097	2 income shall take into account those items which are
4098	4098	3 required by Section 703(a)(1) to be separately stated
4099	4099	4 but which would be taken into account by an individual
4100	4100	5 in calculating his taxable income.
4101	4101	6 (3) Recapture of business expenses on disposition of
4102	4102	7 asset or business. Notwithstanding any other law to the
4103	4103	8 contrary, if in prior years income from an asset or
4104	4104	9 business has been classified as business income and in a
4105	4105	10 later year is demonstrated to be non-business income, then
4106	4106	11 all expenses, without limitation, deducted in such later
4107	4107	12 year and in the 2 immediately preceding taxable years
4108	4108	13 related to that asset or business that generated the
4109	4109	14 non-business income shall be added back and recaptured as
4110	4110	15 business income in the year of the disposition of the
4111	4111	16 asset or business. Such amount shall be apportioned to
4112	4112	17 Illinois using the greater of the apportionment fraction
4113	4113	18 computed for the business under Section 304 of this Act
4114	4114	19 for the taxable year or the average of the apportionment
4115	4115	20 fractions computed for the business under Section 304 of
4116	4116	21 this Act for the taxable year and for the 2 immediately
4117	4117	22 preceding taxable years.
4118	4118	23 (f) Valuation limitation amount.
4119	4119	24 (1) In general. The valuation limitation amount
4120	4120	25 referred to in subsections (a)(2)(G), (c)(2)(I) and
4121	4121
4122	4122
4123	4123
4124	4124
4125	4125
4126	4126	SB1956 - 114 - LRB104 06843 HLH 16879 b
4127	4127
4128	4128
4129	4129	SB1956- 115 -LRB104 06843 HLH 16879 b SB1956 - 115 - LRB104 06843 HLH 16879 b
4130	4130	SB1956 - 115 - LRB104 06843 HLH 16879 b
4131	4131	1 (d)(2)(E) is an amount equal to:
4132	4132	2 (A) The sum of the pre-August 1, 1969 appreciation
4133	4133	3 amounts (to the extent consisting of gain reportable
4134	4134	4 under the provisions of Section 1245 or 1250 of the
4135	4135	5 Internal Revenue Code) for all property in respect of
4136	4136	6 which such gain was reported for the taxable year;
4137	4137	7 plus
4138	4138	8 (B) The lesser of (i) the sum of the pre-August 1,
4139	4139	9 1969 appreciation amounts (to the extent consisting of
4140	4140	10 capital gain) for all property in respect of which
4141	4141	11 such gain was reported for federal income tax purposes
4142	4142	12 for the taxable year, or (ii) the net capital gain for
4143	4143	13 the taxable year, reduced in either case by any amount
4144	4144	14 of such gain included in the amount determined under
4145	4145	15 subsection (a)(2)(F) or (c)(2)(H).
4146	4146	16 (2) Pre-August 1, 1969 appreciation amount.
4147	4147	17 (A) If the fair market value of property referred
4148	4148	18 to in paragraph (1) was readily ascertainable on
4149	4149	19 August 1, 1969, the pre-August 1, 1969 appreciation
4150	4150	20 amount for such property is the lesser of (i) the
4151	4151	21 excess of such fair market value over the taxpayer's
4152	4152	22 basis (for determining gain) for such property on that
4153	4153	23 date (determined under the Internal Revenue Code as in
4154	4154	24 effect on that date), or (ii) the total gain realized
4155	4155	25 and reportable for federal income tax purposes in
4156	4156	26 respect of the sale, exchange or other disposition of
4157	4157
4158	4158
4159	4159
4160	4160
4161	4161
4162	4162	SB1956 - 115 - LRB104 06843 HLH 16879 b
4163	4163
4164	4164
4165	4165	SB1956- 116 -LRB104 06843 HLH 16879 b SB1956 - 116 - LRB104 06843 HLH 16879 b
4166	4166	SB1956 - 116 - LRB104 06843 HLH 16879 b
4167	4167	1 such property.
4168	4168	2 (B) If the fair market value of property referred
4169	4169	3 to in paragraph (1) was not readily ascertainable on
4170	4170	4 August 1, 1969, the pre-August 1, 1969 appreciation
4171	4171	5 amount for such property is that amount which bears
4172	4172	6 the same ratio to the total gain reported in respect of
4173	4173	7 the property for federal income tax purposes for the
4174	4174	8 taxable year, as the number of full calendar months in
4175	4175	9 that part of the taxpayer's holding period for the
4176	4176	10 property ending July 31, 1969 bears to the number of
4177	4177	11 full calendar months in the taxpayer's entire holding
4178	4178	12 period for the property.
4179	4179	13 (C) The Department shall prescribe such
4180	4180	14 regulations as may be necessary to carry out the
4181	4181	15 purposes of this paragraph.
4182	4182	16 (g) Double deductions. Unless specifically provided
4183	4183	17 otherwise, nothing in this Section shall permit the same item
4184	4184	18 to be deducted more than once.
4185	4185	19 (h) Legislative intention. Except as expressly provided by
4186	4186	20 this Section there shall be no modifications or limitations on
4187	4187	21 the amounts of income, gain, loss or deduction taken into
4188	4188	22 account in determining gross income, adjusted gross income or
4189	4189	23 taxable income for federal income tax purposes for the taxable
4190	4190	24 year, or in the amount of such items entering into the
4191	4191
4192	4192
4193	4193
4194	4194
4195	4195
4196	4196	SB1956 - 116 - LRB104 06843 HLH 16879 b
4197	4197
4198	4198
4199	4199	SB1956- 117 -LRB104 06843 HLH 16879 b SB1956 - 117 - LRB104 06843 HLH 16879 b
4200	4200	SB1956 - 117 - LRB104 06843 HLH 16879 b
4201	4201	1 computation of base income and net income under this Act for
4202	4202	2 such taxable year, whether in respect of property values as of
4203	4203	3 August 1, 1969 or otherwise.
4204	4204	4 (Source: P.A. 102-16, eff. 6-17-21; 102-558, eff. 8-20-21;
4205	4205	5 102-658, eff. 8-27-21; 102-813, eff. 5-13-22; 102-1112, eff.
4206	4206	6 12-21-22; 103-8, eff. 6-7-23; 103-478, eff. 1-1-24; 103-592,
4207	4207	7 Article 10, Section 10-900, eff. 6-7-24; 103-592, Article 170,
4208	4208	8 Section 170-90, eff. 6-7-24; 103-605, eff. 7-1-24; 103-647,
4209	4209	9 eff. 7-1-24; revised 8-20-24.)
4210	4210
4211	4211
4212	4212
4213	4213
4214	4214
4215	4215	SB1956 - 117 - LRB104 06843 HLH 16879 b