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91_SB0110ham001
LRB9101029PTpkam03
1 AMENDMENT TO SENATE BILL 110
2 AMENDMENT NO. . Amend Senate Bill 110 by replacing
3 everything after the enacting clause with the following:
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
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1 ending after June 30, 1989, an amount equal to the sum of
2 (i) 2 1/2% of the taxpayer's net income for the period
3 prior to July 1, 1989, as calculated under Section 202.3,
4 and (ii) 3% of the taxpayer's net income for the period
5 after June 30, 1989, as calculated under Section 202.3.
6 (3) In the case of an individual, trust or estate,
7 for taxable years beginning after June 30, 1989, an
8 amount equal to 3% of the taxpayer's net income for the
9 taxable year.
10 (4) (Blank).
11 (5) (Blank).
12 (6) In the case of a corporation, for taxable years
13 ending prior to July 1, 1989, an amount equal to 4% of
14 the taxpayer's net income for the taxable year.
15 (7) In the case of a corporation, for taxable years
16 beginning prior to July 1, 1989 and ending after June 30,
17 1989, an amount equal to the sum of (i) 4% of the
18 taxpayer's net income for the period prior to July 1,
19 1989, as calculated under Section 202.3, and (ii) 4.8% of
20 the taxpayer's net income for the period after June 30,
21 1989, as calculated under Section 202.3.
22 (8) In the case of a corporation, for taxable years
23 beginning after June 30, 1989, an amount equal to 4.8% of
24 the taxpayer's net income for the taxable year.
25 (c) Beginning on July 1, 1979 and thereafter, in
26 addition to such income tax, there is also hereby imposed the
27 Personal Property Tax Replacement Income Tax measured by net
28 income on every corporation (including Subchapter S
29 corporations), partnership and trust, for each taxable year
30 ending after June 30, 1979. Such taxes are imposed on the
31 privilege of earning or receiving income in or as a resident
32 of this State. The Personal Property Tax Replacement Income
33 Tax shall be in addition to the income tax imposed by
34 subsections (a) and (b) of this Section and in addition to
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1 all other occupation or privilege taxes imposed by this State
2 or by any municipal corporation or political subdivision
3 thereof.
4 (d) Additional Personal Property Tax Replacement Income
5 Tax Rates. The personal property tax replacement income tax
6 imposed by this subsection and subsection (c) of this Section
7 in the case of a corporation, other than a Subchapter S
8 corporation, shall be an additional amount equal to 2.85% of
9 such taxpayer's net income for the taxable year, except that
10 beginning on January 1, 1981, and thereafter, the rate of
11 2.85% specified in this subsection shall be reduced to 2.5%,
12 and in the case of a partnership, trust or a Subchapter S
13 corporation shall be an additional amount equal to 1.5% of
14 such taxpayer's net income for the taxable year.
15 (e) Investment credit. A taxpayer shall be allowed a
16 credit against the Personal Property Tax Replacement Income
17 Tax for investment in qualified property.
18 (1) A taxpayer shall be allowed a credit equal to
19 .5% of the basis of qualified property placed in service
20 during the taxable year, provided such property is placed
21 in service on or after July 1, 1984. There shall be
22 allowed an additional credit equal to .5% of the basis of
23 qualified property placed in service during the taxable
24 year, provided such property is placed in service on or
25 after July 1, 1986, and the taxpayer's base employment
26 within Illinois has increased by 1% or more over the
27 preceding year as determined by the taxpayer's employment
28 records filed with the Illinois Department of Employment
29 Security. Taxpayers who are new to Illinois shall be
30 deemed to have met the 1% growth in base employment for
31 the first year in which they file employment records with
32 the Illinois Department of Employment Security. The
33 provisions added to this Section by Public Act 85-1200
34 (and restored by Public Act 87-895) shall be construed as
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1 declaratory of existing law and not as a new enactment.
2 If, in any year, the increase in base employment within
3 Illinois over the preceding year is less than 1%, the
4 additional credit shall be limited to that percentage
5 times a fraction, the numerator of which is .5% and the
6 denominator of which is 1%, but shall not exceed .5%.
7 The investment credit shall not be allowed to the extent
8 that it would reduce a taxpayer's liability in any tax
9 year below zero, nor may any credit for qualified
10 property be allowed for any year other than the year in
11 which the property was placed in service in Illinois. For
12 tax years ending on or after December 31, 1987, and on or
13 before December 31, 1988, the credit shall be allowed for
14 the tax year in which the property is placed in service,
15 or, if the amount of the credit exceeds the tax liability
16 for that year, whether it exceeds the original liability
17 or the liability as later amended, such excess may be
18 carried forward and applied to the tax liability of the 5
19 taxable years following the excess credit years if the
20 taxpayer (i) makes investments which cause the creation
21 of a minimum of 2,000 full-time equivalent jobs in
22 Illinois, (ii) is located in an enterprise zone
23 established pursuant to the Illinois Enterprise Zone Act
24 and (iii) is certified by the Department of Commerce and
25 Community Affairs as complying with the requirements
26 specified in clause (i) and (ii) by July 1, 1986. The
27 Department of Commerce and Community Affairs shall notify
28 the Department of Revenue of all such certifications
29 immediately. For tax years ending after December 31,
30 1988, the credit shall be allowed for the tax year in
31 which the property is placed in service, or, if the
32 amount of the credit exceeds the tax liability for that
33 year, whether it exceeds the original liability or the
34 liability as later amended, such excess may be carried
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1 forward and applied to the tax liability of the 5 taxable
2 years following the excess credit years. The credit shall
3 be applied to the earliest year for which there is a
4 liability. If there is credit from more than one tax year
5 that is available to offset a liability, earlier credit
6 shall be applied first.
7 (2) The term "qualified property" means property
8 which:
9 (A) is tangible, whether new or used,
10 including buildings and structural components of
11 buildings and signs that are real property, but not
12 including land or improvements to real property that
13 are not a structural component of a building such as
14 landscaping, sewer lines, local access roads,
15 fencing, parking lots, and other appurtenances;
16 (B) is depreciable pursuant to Section 167 of
17 the Internal Revenue Code, except that "3-year
18 property" as defined in Section 168(c)(2)(A) of that
19 Code is not eligible for the credit provided by this
20 subsection (e);
21 (C) is acquired by purchase as defined in
22 Section 179(d) of the Internal Revenue Code;
23 (D) is used in Illinois by a taxpayer who is
24 primarily engaged in manufacturing, or in mining
25 coal or fluorite, or in retailing; and
26 (E) has not previously been used in Illinois
27 in such a manner and by such a person as would
28 qualify for the credit provided by this subsection
29 (e) or subsection (f).
30 (3) For purposes of this subsection (e),
31 "manufacturing" means the material staging and production
32 of tangible personal property by procedures commonly
33 regarded as manufacturing, processing, fabrication, or
34 assembling which changes some existing material into new
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1 shapes, new qualities, or new combinations. For purposes
2 of this subsection (e) the term "mining" shall have the
3 same meaning as the term "mining" in Section 613(c) of
4 the Internal Revenue Code. For purposes of this
5 subsection (e), the term "retailing" means the sale of
6 tangible personal property or services rendered in
7 conjunction with the sale of tangible consumer goods or
8 commodities.
9 (4) The basis of qualified property shall be the
10 basis used to compute the depreciation deduction for
11 federal income tax purposes.
12 (5) If the basis of the property for federal income
13 tax depreciation purposes is increased after it has been
14 placed in service in Illinois by the taxpayer, the amount
15 of such increase shall be deemed property placed in
16 service on the date of such increase in basis.
17 (6) The term "placed in service" shall have the
18 same meaning as under Section 46 of the Internal Revenue
19 Code.
20 (7) If during any taxable year, any property ceases
21 to be qualified property in the hands of the taxpayer
22 within 48 months after being placed in service, or the
23 situs of any qualified property is moved outside Illinois
24 within 48 months after being placed in service, the
25 Personal Property Tax Replacement Income Tax for such
26 taxable year shall be increased. Such increase shall be
27 determined by (i) recomputing the investment credit which
28 would have been allowed for the year in which credit for
29 such property was originally allowed by eliminating such
30 property from such computation and, (ii) subtracting such
31 recomputed credit from the amount of credit previously
32 allowed. For the purposes of this paragraph (7), a
33 reduction of the basis of qualified property resulting
34 from a redetermination of the purchase price shall be
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1 deemed a disposition of qualified property to the extent
2 of such reduction.
3 (8) Unless the investment credit is extended by
4 law, the basis of qualified property shall not include
5 costs incurred after December 31, 2003, except for costs
6 incurred pursuant to a binding contract entered into on
7 or before December 31, 2003.
8 (9) Each taxable year, a partnership may elect to
9 pass through to its partners the credits to which the
10 partnership is entitled under this subsection (e) for the
11 taxable year. A partner may use the credit allocated to
12 him or her under this paragraph only against the tax
13 imposed in subsections (c) and (d) of this Section. If
14 the partnership makes that election, those credits shall
15 be allocated among the partners in the partnership in
16 accordance with the rules set forth in Section 704(b) of
17 the Internal Revenue Code, and the rules promulgated
18 under that Section, and the allocated amount of the
19 credits shall be allowed to the partners for that taxable
20 year. The partnership shall make this election on its
21 Personal Property Tax Replacement Income Tax return for
22 that taxable year. The election to pass through the
23 credits shall be irrevocable.
24 (f) Investment credit; Enterprise Zone.
25 (1) A taxpayer shall be allowed a credit against
26 the tax imposed by subsections (a) and (b) of this
27 Section for investment in qualified property which is
28 placed in service in an Enterprise Zone created pursuant
29 to the Illinois Enterprise Zone Act. For partners and for
30 shareholders of Subchapter S corporations, there shall be
31 allowed a credit under this subsection (f) to be
32 determined in accordance with the determination of income
33 and distributive share of income under Sections 702 and
34 704 and Subchapter S of the Internal Revenue Code. The
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1 credit shall be .5% of the basis for such property. The
2 credit shall be available only in the taxable year in
3 which the property is placed in service in the Enterprise
4 Zone and shall not be allowed to the extent that it would
5 reduce a taxpayer's liability for the tax imposed by
6 subsections (a) and (b) of this Section to below zero.
7 For tax years ending on or after December 31, 1985, the
8 credit shall be allowed for the tax year in which the
9 property is placed in service, or, if the amount of the
10 credit exceeds the tax liability for that year, whether
11 it exceeds the original liability or the liability as
12 later amended, such excess may be carried forward and
13 applied to the tax liability of the 5 taxable years
14 following the excess credit year. The credit shall be
15 applied to the earliest year for which there is a
16 liability. If there is credit from more than one tax year
17 that is available to offset a liability, the credit
18 accruing first in time shall be applied first.
19 (2) The term qualified property means property
20 which:
21 (A) is tangible, whether new or used,
22 including buildings and structural components of
23 buildings;
24 (B) is depreciable pursuant to Section 167 of
25 the Internal Revenue Code, except that "3-year
26 property" as defined in Section 168(c)(2)(A) of that
27 Code is not eligible for the credit provided by this
28 subsection (f);
29 (C) is acquired by purchase as defined in
30 Section 179(d) of the Internal Revenue Code;
31 (D) is used in the Enterprise Zone by the
32 taxpayer; and
33 (E) has not been previously used in Illinois
34 in such a manner and by such a person as would
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1 qualify for the credit provided by this subsection
2 (f) or subsection (e).
3 (3) The basis of qualified property shall be the
4 basis used to compute the depreciation deduction for
5 federal income tax purposes.
6 (4) If the basis of the property for federal income
7 tax depreciation purposes is increased after it has been
8 placed in service in the Enterprise Zone by the taxpayer,
9 the amount of such increase shall be deemed property
10 placed in service on the date of such increase in basis.
11 (5) The term "placed in service" shall have the
12 same meaning as under Section 46 of the Internal Revenue
13 Code.
14 (6) If during any taxable year, any property ceases
15 to be qualified property in the hands of the taxpayer
16 within 48 months after being placed in service, or the
17 situs of any qualified property is moved outside the
18 Enterprise Zone within 48 months after being placed in
19 service, the tax imposed under subsections (a) and (b) of
20 this Section for such taxable year shall be increased.
21 Such increase shall be determined by (i) recomputing the
22 investment credit which would have been allowed for the
23 year in which credit for such property was originally
24 allowed by eliminating such property from such
25 computation, and (ii) subtracting such recomputed credit
26 from the amount of credit previously allowed. For the
27 purposes of this paragraph (6), a reduction of the basis
28 of qualified property resulting from a redetermination of
29 the purchase price shall be deemed a disposition of
30 qualified property to the extent of such reduction.
31 (g) Jobs Tax Credit; Enterprise Zone and Foreign
32 Trade Zone or Sub-Zone.
33 (1) A taxpayer conducting a trade or business in an
34 enterprise zone or a High Impact Business designated by
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1 the Department of Commerce and Community Affairs
2 conducting a trade or business in a federally designated
3 Foreign Trade Zone or Sub-Zone shall be allowed a credit
4 against the tax imposed by subsections (a) and (b) of
5 this Section in the amount of $500 per eligible employee
6 hired to work in the zone during the taxable year.
7 (2) To qualify for the credit:
8 (A) the taxpayer must hire 5 or more eligible
9 employees to work in an enterprise zone or federally
10 designated Foreign Trade Zone or Sub-Zone during the
11 taxable year;
12 (B) the taxpayer's total employment within the
13 enterprise zone or federally designated Foreign
14 Trade Zone or Sub-Zone must increase by 5 or more
15 full-time employees beyond the total employed in
16 that zone at the end of the previous tax year for
17 which a jobs tax credit under this Section was
18 taken, or beyond the total employed by the taxpayer
19 as of December 31, 1985, whichever is later; and
20 (C) the eligible employees must be employed
21 180 consecutive days in order to be deemed hired for
22 purposes of this subsection.
23 (3) An "eligible employee" means an employee who
24 is:
25 (A) Certified by the Department of Commerce
26 and Community Affairs as "eligible for services"
27 pursuant to regulations promulgated in accordance
28 with Title II of the Job Training Partnership Act,
29 Training Services for the Disadvantaged or Title III
30 of the Job Training Partnership Act, Employment and
31 Training Assistance for Dislocated Workers Program.
32 (B) Hired after the enterprise zone or
33 federally designated Foreign Trade Zone or Sub-Zone
34 was designated or the trade or business was located
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1 in that zone, whichever is later.
2 (C) Employed in the enterprise zone or Foreign
3 Trade Zone or Sub-Zone. An employee is employed in
4 an enterprise zone or federally designated Foreign
5 Trade Zone or Sub-Zone if his services are rendered
6 there or it is the base of operations for the
7 services performed.
8 (D) A full-time employee working 30 or more
9 hours per week.
10 (4) For tax years ending on or after December 31,
11 1985 and prior to December 31, 1988, the credit shall be
12 allowed for the tax year in which the eligible employees
13 are hired. For tax years ending on or after December 31,
14 1988, the credit shall be allowed for the tax year
15 immediately following the tax year in which the eligible
16 employees are hired. If the amount of the credit exceeds
17 the tax liability for that year, whether it exceeds the
18 original liability or the liability as later amended,
19 such excess may be carried forward and applied to the tax
20 liability of the 5 taxable years following the excess
21 credit year. The credit shall be applied to the earliest
22 year for which there is a liability. If there is credit
23 from more than one tax year that is available to offset a
24 liability, earlier credit shall be applied first.
25 (5) The Department of Revenue shall promulgate such
26 rules and regulations as may be deemed necessary to carry
27 out the purposes of this subsection (g).
28 (6) The credit shall be available for eligible
29 employees hired on or after January 1, 1986.
30 (h) Investment credit; High Impact Business.
31 (1) Subject to subsection (b) of Section 5.5 of the
32 Illinois Enterprise Zone Act, a taxpayer shall be allowed
33 a credit against the tax imposed by subsections (a) and
34 (b) of this Section for investment in qualified property
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1 which is placed in service by a Department of Commerce
2 and Community Affairs designated High Impact Business.
3 The credit shall be .5% of the basis for such property.
4 The credit shall not be available until the minimum
5 investments in qualified property set forth in Section
6 5.5 of the Illinois Enterprise Zone Act have been
7 satisfied 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 The credit applicable to such minimum investments shall
11 be taken in the taxable year in which such minimum
12 investments have been completed. The credit for
13 additional investments beyond the minimum investment by a
14 designated high impact business shall be available only
15 in the taxable year in which the property is placed in
16 service and shall not be allowed to the extent that it
17 would reduce a taxpayer's liability for the tax imposed
18 by subsections (a) and (b) of this Section to below zero.
19 For tax years ending on or after December 31, 1987, the
20 credit shall be allowed for the tax year in which the
21 property is placed in service, or, if the amount of the
22 credit exceeds the tax liability for that year, whether
23 it exceeds the original liability or the liability as
24 later amended, such excess may be carried forward and
25 applied to the tax liability of the 5 taxable years
26 following the excess credit year. The credit shall be
27 applied to the earliest year for which there is a
28 liability. If there is credit from more than one tax
29 year that is available to offset a liability, the credit
30 accruing first in time shall be applied first.
31 Changes made in this subdivision (h)(1) by Public
32 Act 88-670 restore changes made by Public Act 85-1182 and
33 reflect existing law.
34 (2) The term qualified property means property
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1 which:
2 (A) is tangible, whether new or used,
3 including buildings and structural components of
4 buildings;
5 (B) is depreciable pursuant to Section 167 of
6 the Internal Revenue Code, except that "3-year
7 property" as defined in Section 168(c)(2)(A) of that
8 Code is not eligible for the credit provided by this
9 subsection (h);
10 (C) is acquired by purchase as defined in
11 Section 179(d) of the Internal Revenue Code; and
12 (D) is not eligible for the Enterprise Zone
13 Investment Credit provided by subsection (f) of this
14 Section.
15 (3) The basis of qualified property shall be the
16 basis used to compute the depreciation deduction for
17 federal income tax purposes.
18 (4) If the basis of the property for federal income
19 tax depreciation purposes is increased after it has been
20 placed in service in a federally designated Foreign Trade
21 Zone or Sub-Zone located in Illinois by the taxpayer, the
22 amount of such increase shall be deemed property placed
23 in service on the date of such increase in basis.
24 (5) The term "placed in service" shall have the
25 same meaning as under Section 46 of the Internal Revenue
26 Code.
27 (6) If during any taxable year ending on or before
28 December 31, 1996, any property ceases to be qualified
29 property in the hands of the taxpayer within 48 months
30 after being placed in service, or the situs of any
31 qualified property is moved outside Illinois within 48
32 months after being placed in service, the tax imposed
33 under subsections (a) and (b) of this Section for such
34 taxable year shall be increased. Such increase shall be
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1 determined by (i) recomputing the investment credit which
2 would have been allowed for the year in which credit for
3 such property was originally allowed by eliminating such
4 property from such computation, and (ii) subtracting such
5 recomputed credit from the amount of credit previously
6 allowed. For the purposes of this paragraph (6), a
7 reduction of the basis of qualified property resulting
8 from a redetermination of the purchase price shall be
9 deemed a disposition of qualified property to the extent
10 of such reduction.
11 (7) Beginning with tax years ending after December
12 31, 1996, if a taxpayer qualifies for the credit under
13 this subsection (h) and thereby is granted a tax
14 abatement and the taxpayer relocates its entire facility
15 in violation of the explicit terms and length of the
16 contract under Section 18-183 of the Property Tax Code,
17 the tax imposed under subsections (a) and (b) of this
18 Section shall be increased for the taxable year in which
19 the taxpayer relocated its facility by an amount equal to
20 the amount of credit received by the taxpayer under this
21 subsection (h).
22 (i) A credit shall be allowed against the tax imposed by
23 subsections (a) and (b) of this Section for the tax imposed
24 by subsections (c) and (d) of this Section. This credit
25 shall be computed by multiplying the tax imposed by
26 subsections (c) and (d) of this Section by a fraction, the
27 numerator of which is base income allocable to Illinois and
28 the denominator of which is Illinois base income, and further
29 multiplying the product by the tax rate imposed by
30 subsections (a) and (b) of this Section.
31 Any credit earned on or after December 31, 1986 under
32 this subsection which is unused in the year the credit is
33 computed because it exceeds the tax liability imposed by
34 subsections (a) and (b) for that year (whether it exceeds the
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1 original liability or the liability as later amended) may be
2 carried forward and applied to the tax liability imposed by
3 subsections (a) and (b) of the 5 taxable years following the
4 excess credit year. This credit shall be applied first to
5 the earliest year for which there is a liability. If there
6 is a credit under this subsection from more than one tax year
7 that is available to offset a liability the earliest credit
8 arising under this subsection shall be applied first.
9 If, during any taxable year ending on or after December
10 31, 1986, the tax imposed by subsections (c) and (d) of this
11 Section for which a taxpayer has claimed a credit under this
12 subsection (i) is reduced, the amount of credit for such tax
13 shall also be reduced. Such reduction shall be determined by
14 recomputing the credit to take into account the reduced tax
15 imposed by subsection (c) and (d). If any portion of the
16 reduced amount of credit has been carried to a different
17 taxable year, an amended return shall be filed for such
18 taxable year to reduce the amount of credit claimed.
19 (j) Training expense credit. Beginning with tax years
20 ending on or after December 31, 1986, a taxpayer shall be
21 allowed a credit against the tax imposed by subsection (a)
22 and (b) under this Section for all amounts paid or accrued,
23 on behalf of all persons employed by the taxpayer in Illinois
24 or Illinois residents employed outside of Illinois by a
25 taxpayer, for educational or vocational training in
26 semi-technical or technical fields or semi-skilled or skilled
27 fields, which were deducted from gross income in the
28 computation of taxable income. The credit against the tax
29 imposed by subsections (a) and (b) shall be 1.6% of such
30 training expenses. For partners and for shareholders of
31 subchapter S corporations, there shall be allowed a credit
32 under this subsection (j) to be determined in accordance with
33 the determination of income and distributive share of income
34 under Sections 702 and 704 and subchapter S of the Internal
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1 Revenue Code.
2 Any credit allowed under this subsection which is unused
3 in the year the credit is earned may be carried forward to
4 each of the 5 taxable years following the year for which the
5 credit is first computed until it is used. This credit shall
6 be applied first to the earliest year for which there is a
7 liability. If there is a credit under this subsection from
8 more than one tax year that is available to offset a
9 liability the earliest credit arising under this subsection
10 shall be applied first.
11 (k) Research and development credit.
12 Beginning with tax years ending after July 1, 1990, a
13 taxpayer shall be allowed a credit against the tax imposed by
14 subsections (a) and (b) of this Section for increasing
15 research activities in this State. The credit allowed
16 against the tax imposed by subsections (a) and (b) shall be
17 equal to 6 1/2% of the qualifying expenditures for increasing
18 research activities in this State.
19 For purposes of this subsection, "qualifying
20 expenditures" means the qualifying expenditures as defined
21 for the federal credit for increasing research activities
22 which would be allowable under Section 41 of the Internal
23 Revenue Code and which are conducted in this State,
24 "qualifying expenditures for increasing research activities
25 in this State" means the excess of qualifying expenditures
26 for the taxable year in which incurred over qualifying
27 expenditures for the base period, "qualifying expenditures
28 for the base period" means the average of the qualifying
29 expenditures for each year in the base period, and "base
30 period" means the 3 taxable years immediately preceding the
31 taxable year for which the determination is being made.
32 Any credit in excess of the tax liability for the taxable
33 year may be carried forward. A taxpayer may elect to have the
34 unused credit shown on its final completed return carried
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1 over as a credit against the tax liability for the following
2 5 taxable years or until it has been fully used, whichever
3 occurs first.
4 If an unused credit is carried forward to a given year
5 from 2 or more earlier years, that credit arising in the
6 earliest year will be applied first against the tax liability
7 for the given year. If a tax liability for the given year
8 still remains, the credit from the next earliest year will
9 then be applied, and so on, until all credits have been used
10 or no tax liability for the given year remains. Any
11 remaining unused credit or credits then will be carried
12 forward to the next following year in which a tax liability
13 is incurred, except that no credit can be carried forward to
14 a year which is more than 5 years after the year in which the
15 expense for which the credit is given was incurred.
16 Unless extended by law, the credit shall not include
17 costs incurred after December 31, 2004, except for costs
18 incurred pursuant to a binding contract entered into on or
19 before December 31, 2004.
20 (l) Environmental Remediation Tax Credit.
21 (i) For tax years ending after December 31, 1997
22 and on or before December 31, 2001, a taxpayer shall be
23 allowed a credit against the tax imposed by subsections
24 (a) and (b) of this Section for certain amounts paid for
25 unreimbursed eligible remediation costs, as specified in
26 this subsection. For purposes of this Section,
27 "unreimbursed eligible remediation costs" means costs
28 approved by the Illinois Environmental Protection Agency
29 ("Agency") under Section 58.14 of the Environmental
30 Protection Act that were paid in performing environmental
31 remediation at a site for which a No Further Remediation
32 Letter was issued by the Agency and recorded under
33 Section 58.10 of the Environmental Protection Act. The
34 credit must be claimed for the taxable year in which
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1 Agency approval of the eligible remediation costs is
2 granted. The credit is not available to any taxpayer if
3 the taxpayer or any related party caused or contributed
4 to, in any material respect, a release of regulated
5 substances on, in, or under the site that was identified
6 and addressed by the remedial action pursuant to the Site
7 Remediation Program of the Environmental Protection Act.
8 After the Pollution Control Board rules are adopted
9 pursuant to the Illinois Administrative Procedure Act for
10 the administration and enforcement of Section 58.9 of the
11 Environmental Protection Act, determinations as to credit
12 availability for purposes of this Section shall be made
13 consistent with those rules. For purposes of this
14 Section, "taxpayer" includes a person whose tax
15 attributes the taxpayer has succeeded to under Section
16 381 of the Internal Revenue Code and "related party"
17 includes the persons disallowed a deduction for losses by
18 paragraphs (b), (c), and (f)(1) of Section 267 of the
19 Internal Revenue Code by virtue of being a related
20 taxpayer, as well as any of its partners. The credit
21 allowed against the tax imposed by subsections (a) and
22 (b) shall be equal to 25% of the unreimbursed eligible
23 remediation costs in excess of $100,000 per site, except
24 that the $100,000 threshold shall not apply to any site
25 contained in an enterprise zone as determined by the
26 Department of Commerce and Community Affairs. The total
27 credit allowed shall not exceed $40,000 per year with a
28 maximum total of $150,000 per site. For partners and
29 shareholders of subchapter S corporations, there shall be
30 allowed a credit under this subsection to be determined
31 in accordance with the determination of income and
32 distributive share of income under Sections 702 and 704
33 of subchapter S of the Internal Revenue Code.
34 (ii) A credit allowed under this subsection that is
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1 unused in the year the credit is earned may be carried
2 forward to each of the 5 taxable years following the year
3 for which the credit is first earned until it is used.
4 The term "unused credit" does not include any amounts of
5 unreimbursed eligible remediation costs in excess of the
6 maximum credit per site authorized under paragraph (i).
7 This credit shall be applied first to the earliest year
8 for which there is a liability. If there is a credit
9 under this subsection from more than one tax year that is
10 available to offset a liability, the earliest credit
11 arising under this subsection shall be applied first. A
12 credit allowed under this subsection may be sold to a
13 buyer as part of a sale of all or part of the remediation
14 site for which the credit was granted. The purchaser of
15 a remediation site and the tax credit shall succeed to
16 the unused credit and remaining carry-forward period of
17 the seller. To perfect the transfer, the assignor shall
18 record the transfer in the chain of title for the site
19 and provide written notice to the Director of the
20 Illinois Department of Revenue of the assignor's intent
21 to sell the remediation site and the amount of the tax
22 credit to be transferred as a portion of the sale. In no
23 event may a credit be transferred to any taxpayer if the
24 taxpayer or a related party would not be eligible under
25 the provisions of subsection (i).
26 (iii) For purposes of this Section, the term "site"
27 shall have the same meaning as under Section 58.2 of the
28 Environmental Protection Act.
29 (Source: P.A. 89-235, eff. 8-4-95; 89-519, eff. 7-18-96;
30 89-591, eff. 8-1-96; 90-123, eff. 7-21-97; 90-458, eff.
31 8-17-97; 90-605, eff. 6-30-98; 90-655, eff. 7-30-98; 90-717,
32 eff. 8-7-98; 90-792, eff. 1-1-99; revised 9-16-98.)".