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90_SB1705enr
415 ILCS 5/58.13
Amends the Environmental Protection Act. Provides that
the Agency shall have the authority to administer a
Brownfields revolving loan program using grant money awarded
by the United States Environmental Protection Agency.
LRB9008944LDbd
SB1705 Enrolled LRB9008944LDbd
1 AN ACT regarding taxation.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Illinois Income Tax Act is amended by
5 changing Section 201 as follows:
6 (35 ILCS 5/201) (from Ch. 120, par. 2-201)
7 Sec. 201. Tax Imposed.
8 (a) In general. A tax measured by net income is hereby
9 imposed on every individual, corporation, trust and estate
10 for each taxable year ending after July 31, 1969 on the
11 privilege of earning or receiving income in or as a resident
12 of this State. Such tax shall be in addition to all other
13 occupation or privilege taxes imposed by this State or by any
14 municipal corporation or political subdivision thereof.
15 (b) Rates. The tax imposed by subsection (a) of this
16 Section shall be determined as follows:
17 (1) In the case of an individual, trust or estate,
18 for taxable years ending prior to July 1, 1989, an amount
19 equal to 2 1/2% of the taxpayer's net income for the
20 taxable year.
21 (2) In the case of an individual, trust or estate,
22 for taxable years beginning prior to July 1, 1989 and
23 ending after June 30, 1989, an amount equal to the sum of
24 (i) 2 1/2% of the taxpayer's net income for the period
25 prior to July 1, 1989, as calculated under Section 202.3,
26 and (ii) 3% of the taxpayer's net income for the period
27 after June 30, 1989, as calculated under Section 202.3.
28 (3) In the case of an individual, trust or estate,
29 for taxable years beginning after June 30, 1989, an
30 amount equal to 3% of the taxpayer's net income for the
31 taxable year.
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1 (4) (Blank).
2 (5) (Blank).
3 (6) In the case of a corporation, for taxable years
4 ending prior to July 1, 1989, an amount equal to 4% of
5 the taxpayer's net income for the taxable year.
6 (7) In the case of a corporation, for taxable years
7 beginning prior to July 1, 1989 and ending after June 30,
8 1989, an amount equal to the sum of (i) 4% of the
9 taxpayer's net income for the period prior to July 1,
10 1989, as calculated under Section 202.3, and (ii) 4.8% of
11 the taxpayer's net income for the period after June 30,
12 1989, as calculated under Section 202.3.
13 (8) In the case of a corporation, for taxable years
14 beginning after June 30, 1989, an amount equal to 4.8% of
15 the taxpayer's net income for the taxable year.
16 (c) Beginning on July 1, 1979 and thereafter, in
17 addition to such income tax, there is also hereby imposed the
18 Personal Property Tax Replacement Income Tax measured by net
19 income on every corporation (including Subchapter S
20 corporations), partnership and trust, for each taxable year
21 ending after June 30, 1979. Such taxes are imposed on the
22 privilege of earning or receiving income in or as a resident
23 of this State. The Personal Property Tax Replacement Income
24 Tax shall be in addition to the income tax imposed by
25 subsections (a) and (b) of this Section and in addition to
26 all other occupation or privilege taxes imposed by this State
27 or by any municipal corporation or political subdivision
28 thereof.
29 (d) Additional Personal Property Tax Replacement Income
30 Tax Rates. The personal property tax replacement income tax
31 imposed by this subsection and subsection (c) of this Section
32 in the case of a corporation, other than a Subchapter S
33 corporation, shall be an additional amount equal to 2.85% of
34 such taxpayer's net income for the taxable year, except that
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1 beginning on January 1, 1981, and thereafter, the rate of
2 2.85% specified in this subsection shall be reduced to 2.5%,
3 and in the case of a partnership, trust or a Subchapter S
4 corporation shall be an additional amount equal to 1.5% of
5 such taxpayer's net income for the taxable year.
6 (e) Investment credit. A taxpayer shall be allowed a
7 credit against the Personal Property Tax Replacement Income
8 Tax for investment in qualified property.
9 (1) A taxpayer shall be allowed a credit equal to
10 .5% of the basis of qualified property placed in service
11 during the taxable year, provided such property is placed
12 in service on or after July 1, 1984. There shall be
13 allowed an additional credit equal to .5% of the basis of
14 qualified property placed in service during the taxable
15 year, provided such property is placed in service on or
16 after July 1, 1986, and the taxpayer's base employment
17 within Illinois has increased by 1% or more over the
18 preceding year as determined by the taxpayer's employment
19 records filed with the Illinois Department of Employment
20 Security. Taxpayers who are new to Illinois shall be
21 deemed to have met the 1% growth in base employment for
22 the first year in which they file employment records with
23 the Illinois Department of Employment Security. The
24 provisions added to this Section by Public Act 85-1200
25 (and restored by Public Act 87-895) shall be construed as
26 declaratory of existing law and not as a new enactment.
27 If, in any year, the increase in base employment within
28 Illinois over the preceding year is less than 1%, the
29 additional credit shall be limited to that percentage
30 times a fraction, the numerator of which is .5% and the
31 denominator of which is 1%, but shall not exceed .5%.
32 The investment credit shall not be allowed to the extent
33 that it would reduce a taxpayer's liability in any tax
34 year below zero, nor may any credit for qualified
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1 property be allowed for any year other than the year in
2 which the property was placed in service in Illinois. For
3 tax years ending on or after December 31, 1987, and on or
4 before December 31, 1988, the credit shall be allowed for
5 the tax year in which the property is placed in service,
6 or, if the amount of the credit exceeds the tax liability
7 for that year, whether it exceeds the original liability
8 or the liability as later amended, such excess may be
9 carried forward and applied to the tax liability of the 5
10 taxable years following the excess credit years if the
11 taxpayer (i) makes investments which cause the creation
12 of a minimum of 2,000 full-time equivalent jobs in
13 Illinois, (ii) is located in an enterprise zone
14 established pursuant to the Illinois Enterprise Zone Act
15 and (iii) is certified by the Department of Commerce and
16 Community Affairs as complying with the requirements
17 specified in clause (i) and (ii) by July 1, 1986. The
18 Department of Commerce and Community Affairs shall notify
19 the Department of Revenue of all such certifications
20 immediately. For tax years ending after December 31,
21 1988, the credit shall be allowed for the tax year in
22 which the property is placed in service, or, if the
23 amount of the credit exceeds the tax liability for that
24 year, whether it exceeds the original liability or the
25 liability as later amended, such excess may be carried
26 forward and applied to the tax liability of the 5 taxable
27 years following the excess credit years. The credit shall
28 be applied to the earliest year for which there is a
29 liability. If there is credit from more than one tax year
30 that is available to offset a liability, earlier credit
31 shall be applied first.
32 (2) The term "qualified property" means property
33 which:
34 (A) is tangible, whether new or used,
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1 including buildings and structural components of
2 buildings and signs that are real property, but not
3 including land or improvements to real property that
4 are not a structural component of a building such as
5 landscaping, sewer lines, local access roads,
6 fencing, parking lots, and other appurtenances;
7 (B) is depreciable pursuant to Section 167 of
8 the Internal Revenue Code, except that "3-year
9 property" as defined in Section 168(c)(2)(A) of that
10 Code is not eligible for the credit provided by this
11 subsection (e);
12 (C) is acquired by purchase as defined in
13 Section 179(d) of the Internal Revenue Code;
14 (D) is used in Illinois by a taxpayer who is
15 primarily engaged in manufacturing, or in mining
16 coal or fluorite, or in retailing; and
17 (E) has not previously been used in Illinois
18 in such a manner and by such a person as would
19 qualify for the credit provided by this subsection
20 (e) or subsection (f).
21 (3) For purposes of this subsection (e),
22 "manufacturing" means the material staging and production
23 of tangible personal property by procedures commonly
24 regarded as manufacturing, processing, fabrication, or
25 assembling which changes some existing material into new
26 shapes, new qualities, or new combinations. For purposes
27 of this subsection (e) the term "mining" shall have the
28 same meaning as the term "mining" in Section 613(c) of
29 the Internal Revenue Code. For purposes of this
30 subsection (e), the term "retailing" means the sale of
31 tangible personal property or services rendered in
32 conjunction with the sale of tangible consumer goods or
33 commodities.
34 (4) The basis of qualified property shall be the
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1 basis used to compute the depreciation deduction for
2 federal income tax purposes.
3 (5) If the basis of the property for federal income
4 tax depreciation purposes is increased after it has been
5 placed in service in Illinois by the taxpayer, the amount
6 of such increase shall be deemed property placed in
7 service on the date of such increase in basis.
8 (6) The term "placed in service" shall have the
9 same meaning as under Section 46 of the Internal Revenue
10 Code.
11 (7) If during any taxable year, any property ceases
12 to be qualified property in the hands of the taxpayer
13 within 48 months after being placed in service, or the
14 situs of any qualified property is moved outside Illinois
15 within 48 months after being placed in service, the
16 Personal Property Tax Replacement Income Tax for such
17 taxable year shall be increased. Such increase shall be
18 determined by (i) recomputing the investment credit which
19 would have been allowed for the year in which credit for
20 such property was originally allowed by eliminating such
21 property from such computation and, (ii) subtracting such
22 recomputed credit from the amount of credit previously
23 allowed. For the purposes of this paragraph (7), a
24 reduction of the basis of qualified property resulting
25 from a redetermination of the purchase price shall be
26 deemed a disposition of qualified property to the extent
27 of such reduction.
28 (8) Unless the investment credit is extended by
29 law, the basis of qualified property shall not include
30 costs incurred after December 31, 2003, except for costs
31 incurred pursuant to a binding contract entered into on
32 or before December 31, 2003.
33 (9) Each taxable year, a partnership may elect to
34 pass through to its partners the credits to which the
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1 partnership is entitled under this subsection (e) for the
2 taxable year. A partner may use the credit allocated to
3 him or her under this paragraph only against the tax
4 imposed in subsections (c) and (d) of this Section. If
5 the partnership makes that election, those credits shall
6 be allocated among the partners in the partnership in
7 accordance with the rules set forth in Section 704(b) of
8 the Internal Revenue Code, and the rules promulgated
9 under that Section, and the allocated amount of the
10 credits shall be allowed to the partners for that taxable
11 year. The partnership shall make this election on its
12 Personal Property Tax Replacement Income Tax return for
13 that taxable year. The election to pass through the
14 credits shall be irrevocable.
15 (f) Investment credit; Enterprise Zone.
16 (1) A taxpayer shall be allowed a credit against
17 the tax imposed by subsections (a) and (b) of this
18 Section for investment in qualified property which is
19 placed in service in an Enterprise Zone created pursuant
20 to the Illinois Enterprise Zone Act. For partners and for
21 shareholders of Subchapter S corporations, there shall be
22 allowed a credit under this subsection (f) to be
23 determined in accordance with the determination of income
24 and distributive share of income under Sections 702 and
25 704 and Subchapter S of the Internal Revenue Code. The
26 credit shall be .5% of the basis for such property. The
27 credit shall be available only in the taxable year in
28 which the property is placed in service in the Enterprise
29 Zone and shall not be allowed to the extent that it would
30 reduce a taxpayer's liability for the tax imposed by
31 subsections (a) and (b) of this Section to below zero.
32 For tax years ending on or after December 31, 1985, the
33 credit shall be allowed for the tax year in which the
34 property is placed in service, or, if the amount of the
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1 credit exceeds the tax liability for that year, whether
2 it exceeds the original liability or the liability as
3 later amended, such excess may be carried forward and
4 applied to the tax liability of the 5 taxable years
5 following the excess credit year. The credit shall be
6 applied to the earliest year for which there is a
7 liability. If there is credit from more than one tax year
8 that is available to offset a liability, the credit
9 accruing first in time shall be applied first.
10 (2) The term qualified property means property
11 which:
12 (A) is tangible, whether new or used,
13 including buildings and structural components of
14 buildings;
15 (B) is depreciable pursuant to Section 167 of
16 the Internal Revenue Code, except that "3-year
17 property" as defined in Section 168(c)(2)(A) of that
18 Code is not eligible for the credit provided by this
19 subsection (f);
20 (C) is acquired by purchase as defined in
21 Section 179(d) of the Internal Revenue Code;
22 (D) is used in the Enterprise Zone by the
23 taxpayer; and
24 (E) has not been previously used in Illinois
25 in such a manner and by such a person as would
26 qualify for the credit provided by this subsection
27 (f) or subsection (e).
28 (3) The basis of qualified property shall be the
29 basis used to compute the depreciation deduction for
30 federal income tax purposes.
31 (4) If the basis of the property for federal income
32 tax depreciation purposes is increased after it has been
33 placed in service in the Enterprise Zone by the taxpayer,
34 the amount of such increase shall be deemed property
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1 placed in service on the date of such increase in basis.
2 (5) The term "placed in service" shall have the
3 same meaning as under Section 46 of the Internal Revenue
4 Code.
5 (6) If during any taxable year, any property ceases
6 to be qualified property in the hands of the taxpayer
7 within 48 months after being placed in service, or the
8 situs of any qualified property is moved outside the
9 Enterprise Zone within 48 months after being placed in
10 service, the tax imposed under subsections (a) and (b) of
11 this Section for such taxable year shall be increased.
12 Such increase shall be determined by (i) recomputing the
13 investment credit which would have been allowed for the
14 year in which credit for such property was originally
15 allowed by eliminating such property from such
16 computation, and (ii) subtracting such recomputed credit
17 from the amount of credit previously allowed. For the
18 purposes of this paragraph (6), a reduction of the basis
19 of qualified property resulting from a redetermination of
20 the purchase price shall be deemed a disposition of
21 qualified property to the extent of such reduction.
22 (g) Jobs Tax Credit; Enterprise Zone and Foreign
23 Trade Zone or Sub-Zone.
24 (1) A taxpayer conducting a trade or business in an
25 enterprise zone or a High Impact Business designated by
26 the Department of Commerce and Community Affairs
27 conducting a trade or business in a federally designated
28 Foreign Trade Zone or Sub-Zone shall be allowed a credit
29 against the tax imposed by subsections (a) and (b) of
30 this Section in the amount of $500 per eligible employee
31 hired to work in the zone during the taxable year.
32 (2) To qualify for the credit:
33 (A) the taxpayer must hire 5 or more eligible
34 employees to work in an enterprise zone or federally
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1 designated Foreign Trade Zone or Sub-Zone during the
2 taxable year;
3 (B) the taxpayer's total employment within the
4 enterprise zone or federally designated Foreign
5 Trade Zone or Sub-Zone must increase by 5 or more
6 full-time employees beyond the total employed in
7 that zone at the end of the previous tax year for
8 which a jobs tax credit under this Section was
9 taken, or beyond the total employed by the taxpayer
10 as of December 31, 1985, whichever is later; and
11 (C) the eligible employees must be employed
12 180 consecutive days in order to be deemed hired for
13 purposes of this subsection.
14 (3) An "eligible employee" means an employee who
15 is:
16 (A) Certified by the Department of Commerce
17 and Community Affairs as "eligible for services"
18 pursuant to regulations promulgated in accordance
19 with Title II of the Job Training Partnership Act,
20 Training Services for the Disadvantaged or Title III
21 of the Job Training Partnership Act, Employment and
22 Training Assistance for Dislocated Workers Program.
23 (B) Hired after the enterprise zone or
24 federally designated Foreign Trade Zone or Sub-Zone
25 was designated or the trade or business was located
26 in that zone, whichever is later.
27 (C) Employed in the enterprise zone or Foreign
28 Trade Zone or Sub-Zone. An employee is employed in
29 an enterprise zone or federally designated Foreign
30 Trade Zone or Sub-Zone if his services are rendered
31 there or it is the base of operations for the
32 services performed.
33 (D) A full-time employee working 30 or more
34 hours per week.
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1 (4) For tax years ending on or after December 31,
2 1985 and prior to December 31, 1988, the credit shall be
3 allowed for the tax year in which the eligible employees
4 are hired. For tax years ending on or after December 31,
5 1988, the credit shall be allowed for the tax year
6 immediately following the tax year in which the eligible
7 employees are hired. If the amount of the credit exceeds
8 the tax liability for that year, whether it exceeds the
9 original liability or the liability as later amended,
10 such excess may be carried forward and applied to the tax
11 liability of the 5 taxable years following the excess
12 credit year. The credit shall be applied to the earliest
13 year for which there is a liability. If there is credit
14 from more than one tax year that is available to offset a
15 liability, earlier credit shall be applied first.
16 (5) The Department of Revenue shall promulgate such
17 rules and regulations as may be deemed necessary to carry
18 out the purposes of this subsection (g).
19 (6) The credit shall be available for eligible
20 employees hired on or after January 1, 1986.
21 (h) Investment credit; High Impact Business.
22 (1) Subject to subsection (b) of Section 5.5 of the
23 Illinois Enterprise Zone Act, a taxpayer shall be allowed
24 a credit against the tax imposed by subsections (a) and
25 (b) of this Section for investment in qualified property
26 which is placed in service by a Department of Commerce
27 and Community Affairs designated High Impact Business.
28 The credit shall be .5% of the basis for such property.
29 The credit shall not be available until the minimum
30 investments in qualified property set forth in Section
31 5.5 of the Illinois Enterprise Zone Act have been
32 satisfied and shall not be allowed to the extent that it
33 would reduce a taxpayer's liability for the tax imposed
34 by subsections (a) and (b) of this Section to below zero.
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1 The credit applicable to such minimum investments shall
2 be taken in the taxable year in which such minimum
3 investments have been completed. The credit for
4 additional investments beyond the minimum investment by a
5 designated high impact business shall be available only
6 in the taxable year in which the property is placed in
7 service and shall not be allowed to the extent that it
8 would reduce a taxpayer's liability for the tax imposed
9 by subsections (a) and (b) of this Section to below zero.
10 For tax years ending on or after December 31, 1987, the
11 credit shall be allowed for the tax year in which the
12 property is placed in service, or, if the amount of the
13 credit exceeds the tax liability for that year, whether
14 it exceeds the original liability or the liability as
15 later amended, such excess may be carried forward and
16 applied to the tax liability of the 5 taxable years
17 following the excess credit year. The credit shall be
18 applied to the earliest year for which there is a
19 liability. If there is credit from more than one tax
20 year that is available to offset a liability, the credit
21 accruing first in time shall be applied first.
22 Changes made in this subdivision (h)(1) by Public
23 Act 88-670 restore changes made by Public Act 85-1182 and
24 reflect existing law.
25 (2) The term qualified property means property
26 which:
27 (A) is tangible, whether new or used,
28 including buildings and structural components of
29 buildings;
30 (B) is depreciable pursuant to Section 167 of
31 the Internal Revenue Code, except that "3-year
32 property" as defined in Section 168(c)(2)(A) of that
33 Code is not eligible for the credit provided by this
34 subsection (h);
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1 (C) is acquired by purchase as defined in
2 Section 179(d) of the Internal Revenue Code; and
3 (D) is not eligible for the Enterprise Zone
4 Investment Credit provided by subsection (f) of this
5 Section.
6 (3) The basis of qualified property shall be the
7 basis used to compute the depreciation deduction for
8 federal income tax purposes.
9 (4) If the basis of the property for federal income
10 tax depreciation purposes is increased after it has been
11 placed in service in a federally designated Foreign Trade
12 Zone or Sub-Zone located in Illinois by the taxpayer, the
13 amount of such increase shall be deemed property placed
14 in service on the date of such increase in basis.
15 (5) The term "placed in service" shall have the
16 same meaning as under Section 46 of the Internal Revenue
17 Code.
18 (6) If during any taxable year ending on or before
19 December 31, 1996, any property ceases to be qualified
20 property in the hands of the taxpayer within 48 months
21 after being placed in service, or the situs of any
22 qualified property is moved outside Illinois within 48
23 months after being placed in service, the tax imposed
24 under subsections (a) and (b) of this Section for such
25 taxable year shall be increased. Such increase shall be
26 determined by (i) recomputing the investment credit which
27 would have been allowed for the year in which credit for
28 such property was originally allowed by eliminating such
29 property from such computation, and (ii) subtracting such
30 recomputed credit from the amount of credit previously
31 allowed. For the purposes of this paragraph (6), a
32 reduction of the basis of qualified property resulting
33 from a redetermination of the purchase price shall be
34 deemed a disposition of qualified property to the extent
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1 of such reduction.
2 (7) Beginning with tax years ending after December
3 31, 1996, if a taxpayer qualifies for the credit under
4 this subsection (h) and thereby is granted a tax
5 abatement and the taxpayer relocates its entire facility
6 in violation of the explicit terms and length of the
7 contract under Section 18-183 of the Property Tax Code,
8 the tax imposed under subsections (a) and (b) of this
9 Section shall be increased for the taxable year in which
10 the taxpayer relocated its facility by an amount equal to
11 the amount of credit received by the taxpayer under this
12 subsection (h).
13 (i) A credit shall be allowed against the tax imposed by
14 subsections (a) and (b) of this Section for the tax imposed
15 by subsections (c) and (d) of this Section. This credit
16 shall be computed by multiplying the tax imposed by
17 subsections (c) and (d) of this Section by a fraction, the
18 numerator of which is base income allocable to Illinois and
19 the denominator of which is Illinois base income, and further
20 multiplying the product by the tax rate imposed by
21 subsections (a) and (b) of this Section.
22 Any credit earned on or after December 31, 1986 under
23 this subsection which is unused in the year the credit is
24 computed because it exceeds the tax liability imposed by
25 subsections (a) and (b) for that year (whether it exceeds the
26 original liability or the liability as later amended) may be
27 carried forward and applied to the tax liability imposed by
28 subsections (a) and (b) of the 5 taxable years following the
29 excess credit year. This credit shall be applied first to
30 the earliest year for which there is a liability. If there
31 is a credit under this subsection from more than one tax year
32 that is available to offset a liability the earliest credit
33 arising under this subsection shall be applied first.
34 If, during any taxable year ending on or after December
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1 31, 1986, the tax imposed by subsections (c) and (d) of this
2 Section for which a taxpayer has claimed a credit under this
3 subsection (i) is reduced, the amount of credit for such tax
4 shall also be reduced. Such reduction shall be determined by
5 recomputing the credit to take into account the reduced tax
6 imposed by subsection (c) and (d). If any portion of the
7 reduced amount of credit has been carried to a different
8 taxable year, an amended return shall be filed for such
9 taxable year to reduce the amount of credit claimed.
10 (j) Training expense credit. Beginning with tax years
11 ending on or after December 31, 1986, a taxpayer shall be
12 allowed a credit against the tax imposed by subsection (a)
13 and (b) under this Section for all amounts paid or accrued,
14 on behalf of all persons employed by the taxpayer in Illinois
15 or Illinois residents employed outside of Illinois by a
16 taxpayer, for educational or vocational training in
17 semi-technical or technical fields or semi-skilled or skilled
18 fields, which were deducted from gross income in the
19 computation of taxable income. The credit against the tax
20 imposed by subsections (a) and (b) shall be 1.6% of such
21 training expenses. For partners and for shareholders of
22 subchapter S corporations, there shall be allowed a credit
23 under this subsection (j) to be determined in accordance with
24 the determination of income and distributive share of income
25 under Sections 702 and 704 and subchapter S of the Internal
26 Revenue Code.
27 Any credit allowed under this subsection which is unused
28 in the year the credit is earned may be carried forward to
29 each of the 5 taxable years following the year for which the
30 credit is first computed until it is used. This credit shall
31 be applied first to the earliest year for which there is a
32 liability. If there is a credit under this subsection from
33 more than one tax year that is available to offset a
34 liability the earliest credit arising under this subsection
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1 shall be applied first.
2 (k) Research and development credit.
3 Beginning with tax years ending after July 1, 1990, a
4 taxpayer shall be allowed a credit against the tax imposed by
5 subsections (a) and (b) of this Section for increasing
6 research activities in this State. The credit allowed
7 against the tax imposed by subsections (a) and (b) shall be
8 equal to 6 1/2% of the qualifying expenditures for increasing
9 research activities in this State.
10 For purposes of this subsection, "qualifying
11 expenditures" means the qualifying expenditures as defined
12 for the federal credit for increasing research activities
13 which would be allowable under Section 41 of the Internal
14 Revenue Code and which are conducted in this State,
15 "qualifying expenditures for increasing research activities
16 in this State" means the excess of qualifying expenditures
17 for the taxable year in which incurred over qualifying
18 expenditures for the base period, "qualifying expenditures
19 for the base period" means the average of the qualifying
20 expenditures for each year in the base period, and "base
21 period" means the 3 taxable years immediately preceding the
22 taxable year for which the determination is being made.
23 Any credit in excess of the tax liability for the taxable
24 year may be carried forward. A taxpayer may elect to have the
25 unused credit shown on its final completed return carried
26 over as a credit against the tax liability for the following
27 5 taxable years or until it has been fully used, whichever
28 occurs first.
29 If an unused credit is carried forward to a given year
30 from 2 or more earlier years, that credit arising in the
31 earliest year will be applied first against the tax liability
32 for the given year. If a tax liability for the given year
33 still remains, the credit from the next earliest year will
34 then be applied, and so on, until all credits have been used
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1 or no tax liability for the given year remains. Any
2 remaining unused credit or credits then will be carried
3 forward to the next following year in which a tax liability
4 is incurred, except that no credit can be carried forward to
5 a year which is more than 5 years after the year in which the
6 expense for which the credit is given was incurred.
7 Unless extended by law, the credit shall not include
8 costs incurred after December 31, 1999, except for costs
9 incurred pursuant to a binding contract entered into on or
10 before December 31, 1999.
11 (l) Environmental Remediation Tax Credit.
12 (i) For tax years ending after December 31, 1997
13 and on or before December 31, 2001, a taxpayer shall be
14 allowed a credit against the tax imposed by subsections
15 (a) and (b) of this Section for certain amounts paid for
16 unreimbursed eligible remediation costs, as specified in
17 this subsection. For purposes of this Section,
18 "unreimbursed eligible remediation costs" means costs
19 approved by the Illinois Environmental Protection Agency
20 ("Agency") under Section 58.14 of the Environmental
21 Protection Act that were paid in performing environmental
22 remediation at a site for which a No Further Remediation
23 Letter was issued by the Agency and recorded under
24 Section 58.10 of the Environmental Protection Act, and
25 does not mean approved eligible remediation costs that
26 are at any time deducted under the provisions of the
27 Internal Revenue Code. The credit must be claimed for
28 the taxable year in which Agency approval of the eligible
29 remediation costs is granted. In no event shall
30 unreimbursed eligible remediation costs include any costs
31 taken into account in calculating an environmental
32 remediation credit granted against a tax imposed under
33 the provisions of the Internal Revenue Code. The credit
34 is not available to any taxpayer if the taxpayer or any
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1 related party caused or contributed to, in any material
2 respect, a release of regulated substances on, in, or
3 under the site that was identified and addressed by the
4 remedial action pursuant to the Site Remediation Program
5 of the Environmental Protection Act. After the Pollution
6 Control Board rules are adopted pursuant to the Illinois
7 Administrative Procedure Act for the administration and
8 enforcement of Section 58.9 of the Environmental
9 Protection Act, determinations as to credit availability
10 for purposes of this Section shall be made consistent
11 with those rules. For purposes of this Section,
12 "taxpayer" includes a person whose tax attributes the
13 taxpayer has succeeded to under Section 381 of the
14 Internal Revenue Code and "related party" includes the
15 persons disallowed a deduction for losses by paragraphs
16 (b), (c), and (f)(1) of Section 267 of the Internal
17 Revenue Code by virtue of being a related taxpayer, as
18 well as any of its partners. The credit allowed against
19 the tax imposed by subsections (a) and (b) shall be equal
20 to 25% of the unreimbursed eligible remediation costs in
21 excess of $100,000 per site, except that the $100,000
22 threshold shall not apply to any site contained in an
23 enterprise zone as and located in a census tract that is
24 located in a minor civil division and place or county
25 that has been determined by the Department of Commerce
26 and Community Affairs to contain a majority of households
27 consisting of low and moderate income persons. The total
28 credit allowed shall not exceed $40,000 per year with a
29 maximum total of $150,000 per site. For partners and
30 shareholders of subchapter S corporations, there shall be
31 allowed a credit under this subsection to be determined
32 in accordance with the determination of income and
33 distributive share of income under Sections 702 and 704
34 of subchapter S of the Internal Revenue Code.
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1 (ii) A credit allowed under this subsection that is
2 unused in the year the credit is earned may be carried
3 forward to each of the 5 taxable years following the year
4 for which the credit is first earned until it is used.
5 The term "unused credit" does not include any amounts of
6 unreimbursed eligible remediation costs in excess of the
7 maximum credit per site authorized under paragraph (i).
8 This credit shall be applied first to the earliest year
9 for which there is a liability. If there is a credit
10 under this subsection from more than one tax year that is
11 available to offset a liability, the earliest credit
12 arising under this subsection shall be applied first. A
13 credit allowed under this subsection may be sold to a
14 buyer as part of a sale of all or part of the remediation
15 site for which the credit was granted. The purchaser of
16 a remediation site and the tax credit shall succeed to
17 the unused credit and remaining carry-forward period of
18 the seller. To perfect the transfer, the assignor shall
19 record the transfer in the chain of title for the site
20 and provide written notice to the Director of the
21 Illinois Department of Revenue of the assignor's intent
22 to sell the remediation site and the amount of the tax
23 credit to be transferred as a portion of the sale. In no
24 event may a credit be transferred to any taxpayer if the
25 taxpayer or a related party would not be eligible under
26 the provisions of subsection (i).
27 (iii) For purposes of this Section, the term "site"
28 shall have the same meaning as under Section 58.2 of the
29 Environmental Protection Act.
30 (Source: P.A. 89-235, eff. 8-4-95; 89-519, eff. 7-18-96;
31 89-591, eff. 8-1-96; 90-123, eff. 7-21-97; 90-458, eff.
32 8-17-97; revised 10-16-97.)
33 Section 6. The Use Tax Act is amended by changing
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1 Section 12 as follows:
2 (35 ILCS 105/12) (from Ch. 120, par. 439.12)
3 Sec. 12. Applicability of Retailers' Occupation Tax Act
4 and Uniform Penalty and Interest Act. All of the provisions
5 of Sections 1d, 1e, 1f, 1i, 1j, 1j.1, 1k, 1m, 1n, 1o, 2a, 2b,
6 2c, 3, 4 (except that the time limitation provisions shall
7 run from the date when the tax is due rather than from the
8 date when gross receipts are received), 5 (except that the
9 time limitation provisions on the issuance of notices of tax
10 liability shall run from the date when the tax is due rather
11 than from the date when gross receipts are received and
12 except that in the case of a failure to file a return
13 required by this Act, no notice of tax liability shall be
14 issued on and after each July 1 and January 1 covering tax
15 due with that return during any month or period more than 6
16 years before that July 1 or January 1, respectively), 5a, 5b,
17 5c, 5d, 5e, 5f, 5g, 5h, 5j, 5k, 5l, 7, 8, 9, 10, 11 and 12 of
18 the Retailers' Occupation Tax Act and Section 3-7 of the
19 Uniform Penalty and Interest Act, which are not inconsistent
20 with this Act, shall apply, as far as practicable, to the
21 subject matter of this Act to the same extent as if such
22 provisions were included herein.
23 (Source: P.A. 90-42, eff. 1-1-98.)
24 Section 7. The Service Use Tax Act is amended by
25 changing Section 12 as follows:
26 (35 ILCS 110/12) (from Ch. 120, par. 439.42)
27 Sec. 12. Applicability of Retailers' Occupation Tax Act
28 and Uniform Penalty and Interest Act. All of the provisions
29 of Sections 1d, 1e, 1f, 1i, 1j, 1j.1, 1k, 1m, 1n, 1o, 2a, 2b,
30 2c, 3 (except as to the disposition by the Department of the
31 money collected under this Act), 4 (except that the time
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1 limitation provisions shall run from the date when gross
2 receipts are received), 5 (except that the time limitation
3 provisions on the issuance of notices of tax liability shall
4 run from the date when the tax is due rather than from the
5 date when gross receipts are received and except that in the
6 case of a failure to file a return required by this Act, no
7 notice of tax liability shall be issued on and after July 1
8 and January 1 covering tax due with that return during any
9 month or period more than 6 years before that July 1 or
10 January 1, respectively), 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5j, 5k,
11 5l, 7, 8, 9, 10, 11 and 12 of the Retailers' Occupation Tax
12 Act which are not inconsistent with this Act, and Section 3-7
13 of the Uniform Penalty and Interest Act, shall apply, as far
14 as practicable, to the subject matter of this Act to the same
15 extent as if such provisions were included herein.
16 (Source: P.A. 90-42, eff. 1-1-98.)
17 Section 8. The Service Occupation Tax Act is amended by
18 changing Section 12 as follows:
19 (35 ILCS 115/12) (from Ch. 120, par. 439.112)
20 Sec. 12. All of the provisions of Sections 1d, 1e, 1f,
21 1i, 1j, 1j.1, 1k, 1m, 1n, 1o, 2a, 2b, 2c, 3 (except as to the
22 disposition by the Department of the tax collected under this
23 Act), 4 (except that the time limitation provisions shall run
24 from the date when the tax is due rather than from the date
25 when gross receipts are received), 5 (except that the time
26 limitation provisions on the issuance of notices of tax
27 liability shall run from the date when the tax is due rather
28 than from the date when gross receipts are received), 5a, 5b,
29 5c, 5d, 5e, 5f, 5g, 5j, 5k, 5l, 7, 8, 9, 10, 11 and 12 of the
30 "Retailers' Occupation Tax Act" which are not inconsistent
31 with this Act, and Section 3-7 of the Uniform Penalty and
32 Interest Act shall apply, as far as practicable, to the
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1 subject matter of this Act to the same extent as if such
2 provisions were included herein.
3 (Source: P.A. 90-42, eff. 1-1-98.)
4 Section 9. The Retailers' Occupation Tax Act is amended
5 by adding Section 1o as follows:
6 (35 ILCS 120/1o new)
7 Sec. 1o. Aircraft support center exemption.
8 (a) For the purposes of this Act, "aircraft support
9 center" means a support center operated by a carrier for hire
10 that is used primarily for the maintenance, rebuilding, or
11 repair of aircraft, aircraft parts, and auxiliary equipment,
12 and which carrier:
13 (1) will make an investment of $30,000,000 or more
14 at a federal Air Force Base located in this State;
15 (2) will cause the creation of at least 750
16 full-time jobs at a joint use military and civilian
17 airport at that federal Air Force Base;
18 (3) enters into a legally binding agreement with the
19 Department of Commerce and Community Affairs to comply
20 with paragraphs (1) and (2) within a time period
21 specified in the rules and regulations promulgated by the
22 Department of Commerce and Community Affairs pursuant to
23 this subsection; and
24 (4) is certified by the Department of Commerce and
25 Community Affairs to be in compliance with paragraphs
26 (1), (2), and (3).
27 Any aircraft support center applying for an exemption stated
28 in this Section shall make application to the Department of
29 Commerce and Community Affairs in such form and providing
30 such information as may be prescribed by that Department. The
31 Department of Commerce and Community Affairs shall determine
32 whether the aircraft support center meets the criteria
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1 prescribed in this subsection. If the Department of Commerce
2 and Community Affairs determines that the aircraft support
3 center meets the criteria, it shall issue a certificate of
4 eligibility for exemption in the form prescribed by the
5 Department of Revenue to the carrier operating the aircraft
6 support center. The Department of Commerce and Community
7 Affairs shall act upon certification request within 60 days
8 after receipt of application and shall file with the
9 Department of Revenue a copy of each certificate of
10 eligibility for exemption.
11 The Department of Commerce and Community Affairs shall
12 promulgate rules and regulations to carry out the provisions
13 of this subsection and to require that any business operating
14 an aircraft support center that is granted a tax exemption
15 pay the exempted tax to the Department of Revenue if the
16 business fails to comply with the terms and conditions of the
17 certification and pay all penalties and interest on that
18 exempted tax as determined by the Department of Revenue.
19 The certificate of eligibility for exemption shall be
20 presented by the carrier operating an aircraft support center
21 to its supplier when making the initial purchase of items for
22 which an exemption is granted by this Section together with a
23 certification by the business that the items are exempt from
24 taxation under this Act. The exempt status, if any, of each
25 subsequent purchase shall be indicated on the face of the
26 purchase order.
27 (b) Subject to the provisions of this subsection, jet
28 fuel and petroleum products used or consumed by any aircraft
29 support center directly in the process of maintaining,
30 rebuilding, or repairing aircraft is exempt from the tax
31 imposed by this Act. The Department of Revenue shall
32 promulgate any rules necessary to further define the items
33 eligible for exemption.
34 (c) This Section is exempt from the provisions of
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1 Section 2-70.
2 Section 10. The Environmental Protection Act is amended
3 by changing Section 58.14 as follows:
4 (415 ILCS 5/58.14)
5 Sec. 58.14. Environmental Remediation Tax Credit review.
6 (a) Prior to applying for the Environmental Remediation
7 Tax Credit under Section 201 of the Illinois Income Tax Act,
8 Remediation Applicants shall first submit to the Agency an
9 application for review of remediation costs. The application
10 and review process shall be conducted in accordance with the
11 requirements of this Section and the rules adopted under
12 subsection (g). A preliminary review of the estimated
13 remediation costs for development and implementation of the
14 Remedial Action Plan may be obtained in accordance with
15 subsection (d).
16 (b) No application for review shall be submitted until a
17 No Further Remediation Letter has been issued by the Agency
18 and recorded in the chain of title for the site in accordance
19 with Section 58.10. The Agency shall review the application
20 to determine whether the costs submitted are remediation
21 costs, and whether the costs incurred are reasonable. The
22 application shall be on forms prescribed and provided by the
23 Agency. At a minimum, the application shall include the
24 following:
25 (1) information identifying the Remediation
26 Applicant and the site for which the tax credit is being
27 sought and the date of acceptance of the site into the
28 Site Remediation Program;
29 (2) a copy of the No Further Remediation Letter
30 with official verification that the letter has been
31 recorded in the chain of title for the site and a
32 demonstration that the site for which the application is
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1 submitted is the same site as the one for which the No
2 Further Remediation Letter is issued;
3 (3) a demonstration that the release of the
4 regulated substances of concern for which the No Further
5 Remediation Letter was issued were not caused or
6 contributed to in any material respect by the Remediation
7 Applicant. After the Pollution Control Board rules are
8 adopted pursuant to the Illinois Administrative Procedure
9 Act for the administration and enforcement of Section
10 58.9 of the Environmental Protection Act, determinations
11 as to credit availability shall be made consistent with
12 those rules;
13 (4) an itemization and documentation, including
14 receipts, of the remediation costs incurred;
15 (5) a demonstration that the costs incurred are
16 remediation costs as defined in this Act and its rules;
17 (6) a demonstration that the costs submitted for
18 review were incurred by the Remediation Applicant who
19 received the No Further Remediation Letter;
20 (7) an application fee in the amount set forth in
21 subsection (e) for each site for which review of
22 remediation costs is requested and, if applicable,
23 certification from the Department of Commerce and
24 Community Affairs that the site is located in an
25 enterprise zone and is located in a census tract that is
26 located in a minor civil division and place or county
27 that has been determined by the Department of Commerce
28 and Community Affairs to contain a majority of households
29 consisting of low and moderate income persons;
30 (8) any other information deemed appropriate by the
31 Agency.
32 (c) Within 60 days after receipt by the Agency of an
33 application meeting the requirements of subsection (b), the
34 Agency shall issue a letter to the applicant approving,
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1 disapproving, or modifying the remediation costs submitted in
2 the application. If the remediation costs are approved as
3 submitted, the Agency's letter shall state the amount of the
4 remediation costs to be applied toward the Environmental
5 Remediation Tax Credit. If an application is disapproved or
6 approved with modification of remediation costs, the Agency's
7 letter shall set forth the reasons for the disapproval or
8 modification and state the amount of the remediation costs,
9 if any, to be applied toward the Environmental Remediation
10 Tax Credit.
11 If a preliminary review of a budget plan has been
12 obtained under subsection (d), the Remediation Applicant may
13 submit, with the application and supporting documentation
14 under subsection (b), a copy of the Agency's final
15 determination accompanied by a certification that the actual
16 remediation costs incurred for the development and
17 implementation of the Remedial Action Plan are equal to or
18 less than the costs approved in the Agency's final
19 determination on the budget plan. The certification shall be
20 signed by the Remediation Applicant and notarized. Based on
21 that submission, the Agency shall not be required to conduct
22 further review of the costs incurred for development and
23 implementation of the Remedial Action Plan and may approve
24 costs as submitted.
25 Within 35 days after receipt of an Agency letter
26 disapproving or modifying an application for approval of
27 remediation costs, the Remediation Applicant may appeal the
28 Agency's decision to the Board in the manner provided for the
29 review of permits in Section 40 of this Act.
30 (d) (1) A Remediation Applicant may obtain a preliminary
31 review of estimated remediation costs for the development
32 and implementation of the Remedial Action Plan by
33 submitting a budget plan along with the Remedial Action
34 Plan. The budget plan shall be set forth on forms
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1 prescribed and provided by the Agency and shall include
2 but shall not be limited to line item estimates of the
3 costs associated with each line item (such as personnel,
4 equipment, and materials) that the Remediation Applicant
5 anticipates will be incurred for the development and
6 implementation of the Remedial Action Plan. The Agency
7 shall review the budget plan along with the Remedial
8 Action Plan to determine whether the estimated costs
9 submitted are remediation costs and whether the costs
10 estimated for the activities are reasonable.
11 (2) If the Remedial Action Plan is amended by the
12 Remediation Applicant or as a result of Agency action,
13 the corresponding budget plan shall be revised
14 accordingly and resubmitted for Agency review.
15 (3) The budget plan shall be accompanied by the
16 applicable fee as set forth in subsection (e).
17 (4) Submittal of a budget plan shall be deemed an
18 automatic 60-day waiver of the Remedial Action Plan
19 review deadlines set forth in this Section and its rules.
20 (5) Within the applicable period of review, the
21 Agency shall issue a letter to the Remediation Applicant
22 approving, disapproving, or modifying the estimated
23 remediation costs submitted in the budget plan. If a
24 budget plan is disapproved or approved with modification
25 of estimated remediation costs, the Agency's letter shall
26 set forth the reasons for the disapproval or
27 modification.
28 (6) Within 35 days after receipt of an Agency
29 letter disapproving or modifying a budget plan, the
30 Remediation Applicant may appeal the Agency's decision to
31 the Board in the manner provided for the review of
32 permits in Section 40 of this Act.
33 (e) The fees for reviews conducted under this Section
34 are in addition to any other fees or payments for Agency
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1 services rendered pursuant to the Site Remediation Program
2 and shall be as follows:
3 (1) The fee for an application for review of
4 remediation costs shall be $1,000 for each site reviewed.
5 (2) The fee for the review of the budget plan
6 submitted under subsection (d) shall be $500 for each
7 site reviewed.
8 (3) In the case of a Remediation Applicant
9 submitting for review total remediation costs of $100,000
10 or less for a site located within an enterprise zone (as
11 set forth in paragraph (i) of subsection (l) of Section
12 201 of the Illinois Income Tax Act), the fee for an
13 application for review of remediation costs shall be $250
14 for each site reviewed. For those sites, there shall be
15 no fee for review of a budget plan under subsection (d).
16 The application fee shall be made payable to the State of
17 Illinois, for deposit into the Hazardous Waste Fund.
18 Pursuant to appropriation, the Agency shall use the fees
19 collected under this subsection for development and
20 administration of the review program.
21 (f) The Agency shall have the authority to enter into
22 any contracts or agreements that may be necessary to carry
23 out its duties and responsibilities under this Section.
24 (g) Within 6 months after the effective date of this
25 amendatory Act of 1997, the Agency shall propose rules
26 prescribing procedures and standards for its administration
27 of this Section. Within 6 months after receipt of the
28 Agency's proposed rules, the Board shall adopt on second
29 notice, pursuant to Sections 27 and 28 of this Act and the
30 Illinois Administrative Procedure Act, rules that are
31 consistent with this Section. Prior to the effective date of
32 rules adopted under this Section, the Agency may conduct
33 reviews of applications under this Section and the Agency is
34 further authorized to distribute guidance documents on costs
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1 that are eligible or ineligible as remediation costs.
2 (Source: P.A. 90-123, eff. 7-21-97.)