Public Act 096-0789
 		





SB2115 Enrolled
LRB096 09480 HLH 19637 b






    AN ACT concerning revenue.

 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:





 
    Section 5. The Illinois Estate and Generation-Skipping 
Transfer Tax Act is amended  by changing Section 2 as follows:
 



    (35 ILCS 405/2)  (from Ch. 120, par. 405A-2)



    Sec. 2. Definitions. 

    "Federal estate tax" means the tax due to the United States 
with respect
to a taxable transfer under Chapter 11 of the 
Internal Revenue Code.

    "Federal generation-skipping transfer tax" means the tax 
due to the
United States with respect to a taxable transfer 
under Chapter 13 of the
Internal Revenue Code.

    "Federal return" means the federal estate tax return with 
respect to the
federal estate tax and means the federal 
generation-skipping transfer tax
return
with respect to the 
federal generation-skipping transfer tax.

    "Federal transfer tax" means the federal estate tax or the 
federal
generation-skipping transfer tax.

    "Illinois estate tax" means the tax due to this State with 
respect to a
taxable transfer.

    "Illinois generation-skipping transfer tax" means the tax 
due to this State
with respect to a taxable transfer that gives 
rise to a federal
generation-skipping transfer tax.

    "Illinois transfer tax" means the Illinois estate tax or 
the Illinois
generation-skipping transfer tax.

    "Internal Revenue Code" means, unless otherwise provided, 
the Internal
Revenue Code of 1986, as
amended from time to 
time.

    "Non-resident trust" means a trust that is not a resident 
of this State
for purposes of the Illinois Income Tax Act, as 
amended from time to time.

    "Person" means and includes any individual, trust, estate, 
partnership,
association, company or corporation.

    "Qualified heir" means a qualified heir as defined in 
Section 2032A(e)(1)
of the Internal Revenue Code.

    "Resident trust" means a trust that is a resident of this 
State for
purposes of the Illinois Income Tax Act, as amended 
from time to time.

    "State" means any state, territory or possession of the 
United States and
the District of Columbia.

    "State tax credit" means:

    (a) For persons dying on or after January 1, 2003 and

through December 31, 2005, an amount
equal
to the full credit 
calculable under Section 2011 or Section 2604 of the
Internal 
Revenue
Code as the credit would have been computed and allowed 
under the Internal
Revenue
Code as in effect on December 31, 
2001, without the reduction in the State
Death Tax
Credit as 
provided in Section 2011(b)(2) or the termination of the State 
Death
Tax Credit
as provided in Section 2011(f) as enacted by 
the Economic Growth and Tax Relief
Reconciliation Act of 2001, 
but recognizing the increased applicable exclusion
amount

through December 31, 2005.

    (b) For persons dying after December 31, 2005 and on or 
before December 31,
2009, an amount equal to the full
credit

calculable under Section 2011 or 2604 of the Internal Revenue 
Code as the
credit would
have been computed and allowed under 
the Internal Revenue Code as in effect on
December 31, 2001, 
without the reduction in the State Death Tax Credit as
provided 
in
Section 2011(b)(2) or the termination of the State Death Tax 
Credit as provided
in
Section 2011(f) as enacted by the 
Economic Growth and Tax Relief Reconciliation
Act of
2001, but 
recognizing the exclusion amount of only $2,000,000, and with 
reduction to the adjusted taxable estate for any qualified 
terminable interest property election as defined in subsection 
(b-1) of this Section.

    (b-1) The person required to file the Illinois return may 
elect on a timely filed Illinois return a marital deduction for 
qualified terminable interest property under Section 
2056(b)(7) of the Internal Revenue Code for purposes of the 
Illinois estate tax that is separate and independent of any 
qualified terminable interest property election for federal 
estate tax purposes.  For purposes of the Illinois estate tax, 
the inclusion of property in the gross estate of a surviving 
spouse is the same as under Section 2044 of the Internal 
Revenue Code. 
    In the case of any trust for which a State or federal 
qualified terminable interest property election is made, the 
trustee may not retain non-income producing assets for more 
than a reasonable amount of time without the consent of the 
surviving spouse. 
    (c) For persons dying after December 31, 2009,
the credit 
for state tax allowable under Section
2011 or Section 2604 of 
the Internal Revenue Code.

    "Taxable transfer" means an event that gives rise to a 
state tax credit,
including any credit as a result of the 
imposition of an
additional tax under Section 2032A(c) of the 
Internal Revenue Code.

    "Transferee" means a transferee within the meaning of 
Section 2603(a)(1)
and Section 6901(h) of the Internal Revenue 
Code.

    "Transferred property" means:


        (1) With respect to a taxable transfer occurring at the 
    death of an
individual, the
deceased individual's gross 
    estate as defined in Section 2031 of the
Internal Revenue 
    Code.


        (2) With respect to a taxable transfer occurring as a 
    result of a
taxable termination as defined in Section 
    2612(a) of the Internal Revenue Code,
 the taxable amount 
    determined under Section 2622(a) of the Internal Revenue

    Code.


        (3) With respect to a taxable transfer occurring as a 
    result of a
taxable distribution as defined in Section 
    2612(b) of the Internal Revenue Code,
the taxable amount 
    determined under Section 2621(a) of the Internal Revenue

    Code.


        (4) With respect to an event which causes the 
    imposition of an
additional estate tax under Section 
    2032A(c) of the Internal Revenue Code,
the
qualified real 
    property that was disposed of or which ceased to be used 
    for
the qualified use, within the meaning of Section 
    2032A(c)(1) of the Internal
Revenue Code.

    "Trust" includes a trust as defined in Section 2652(b)(1) 
of the Internal
Revenue Code.

(Source: P.A. 93-30, eff. 6-20-03.)


 
    Section 99. Effective date. This Act takes effect upon 
becoming law.