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91_SB0110sam001
LRB9101029PTpkam
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
30 for shareholders of Subchapter S corporations, and owners
31 of limited liability companies, if the liability company
32 is treated as a partnership for purposes of federal and
33 State income taxation, there shall be allowed a credit
34 under this subsection (f) to be determined in accordance
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1 with the determination of income and distributive share
2 of income under Sections 702 and 704 and Subchapter S of
3 the Internal Revenue Code. The credit shall be .5% of the
4 basis for such property. The credit shall be available
5 only in the taxable year in which the property is placed
6 in service in the Enterprise Zone and shall not be
7 allowed to the extent that it would reduce a taxpayer's
8 liability for the tax imposed by subsections (a) and (b)
9 of this Section to below zero. For tax years ending on or
10 after December 31, 1985, the credit shall be allowed for
11 the tax year in which the property is placed in service,
12 or, if the amount of the credit exceeds the tax liability
13 for that year, whether it exceeds the original liability
14 or the liability as later amended, such excess may be
15 carried forward and applied to the tax liability of the 5
16 taxable years following the excess credit year. The
17 credit shall be applied to the earliest year for which
18 there is a liability. If there is credit from more than
19 one tax year that is available to offset a liability, the
20 credit accruing first in time shall be applied first.
21 (2) The term qualified property means property
22 which:
23 (A) is tangible, whether new or used,
24 including buildings and structural components of
25 buildings;
26 (B) is depreciable pursuant to Section 167 of
27 the Internal Revenue Code, except that "3-year
28 property" as defined in Section 168(c)(2)(A) of that
29 Code is not eligible for the credit provided by this
30 subsection (f);
31 (C) is acquired by purchase as defined in
32 Section 179(d) of the Internal Revenue Code;
33 (D) is used in the Enterprise Zone by the
34 taxpayer; and
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1 (E) has not been previously used in Illinois
2 in such a manner and by such a person as would
3 qualify for the credit provided by this subsection
4 (f) or subsection (e).
5 (3) The basis of qualified property shall be the
6 basis used to compute the depreciation deduction for
7 federal income tax purposes.
8 (4) If the basis of the property for federal income
9 tax depreciation purposes is increased after it has been
10 placed in service in the Enterprise Zone by the taxpayer,
11 the amount of such increase shall be deemed property
12 placed in service on the date of such increase in basis.
13 (5) The term "placed in service" shall have the
14 same meaning as under Section 46 of the Internal Revenue
15 Code.
16 (6) If during any taxable year, any property ceases
17 to be qualified property in the hands of the taxpayer
18 within 48 months after being placed in service, or the
19 situs of any qualified property is moved outside the
20 Enterprise Zone within 48 months after being placed in
21 service, the tax imposed under subsections (a) and (b) of
22 this Section for such taxable year shall be increased.
23 Such increase shall be determined by (i) recomputing the
24 investment credit which would have been allowed for the
25 year in which credit for such property was originally
26 allowed by eliminating such property from such
27 computation, and (ii) subtracting such recomputed credit
28 from the amount of credit previously allowed. For the
29 purposes of this paragraph (6), a reduction of the basis
30 of qualified property resulting from a redetermination of
31 the purchase price shall be deemed a disposition of
32 qualified property to the extent of such reduction.
33 (g) Jobs Tax Credit; Enterprise Zone and Foreign
34 Trade Zone or Sub-Zone.
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1 (1) A taxpayer conducting a trade or business in an
2 enterprise zone or a High Impact Business designated by
3 the Department of Commerce and Community Affairs
4 conducting a trade or business in a federally designated
5 Foreign Trade Zone or Sub-Zone shall be allowed a credit
6 against the tax imposed by subsections (a) and (b) of
7 this Section in the amount of $500 per eligible employee
8 hired to work in the zone during the taxable year.
9 (2) To qualify for the credit:
10 (A) the taxpayer must hire 5 or more eligible
11 employees to work in an enterprise zone or federally
12 designated Foreign Trade Zone or Sub-Zone during the
13 taxable year;
14 (B) the taxpayer's total employment within the
15 enterprise zone or federally designated Foreign
16 Trade Zone or Sub-Zone must increase by 5 or more
17 full-time employees beyond the total employed in
18 that zone at the end of the previous tax year for
19 which a jobs tax credit under this Section was
20 taken, or beyond the total employed by the taxpayer
21 as of December 31, 1985, whichever is later; and
22 (C) the eligible employees must be employed
23 180 consecutive days in order to be deemed hired for
24 purposes of this subsection.
25 (3) An "eligible employee" means an employee who
26 is:
27 (A) Certified by the Department of Commerce
28 and Community Affairs as "eligible for services"
29 pursuant to regulations promulgated in accordance
30 with Title II of the Job Training Partnership Act,
31 Training Services for the Disadvantaged or Title III
32 of the Job Training Partnership Act, Employment and
33 Training Assistance for Dislocated Workers Program.
34 (B) Hired after the enterprise zone or
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1 federally designated Foreign Trade Zone or Sub-Zone
2 was designated or the trade or business was located
3 in that zone, whichever is later.
4 (C) Employed in the enterprise zone or Foreign
5 Trade Zone or Sub-Zone. An employee is employed in
6 an enterprise zone or federally designated Foreign
7 Trade Zone or Sub-Zone if his services are rendered
8 there or it is the base of operations for the
9 services performed.
10 (D) A full-time employee working 30 or more
11 hours per week.
12 (4) For tax years ending on or after December 31,
13 1985 and prior to December 31, 1988, the credit shall be
14 allowed for the tax year in which the eligible employees
15 are hired. For tax years ending on or after December 31,
16 1988, the credit shall be allowed for the tax year
17 immediately following the tax year in which the eligible
18 employees are hired. If the amount of the credit exceeds
19 the tax liability for that year, whether it exceeds the
20 original liability or the liability as later amended,
21 such excess may be carried forward and applied to the tax
22 liability of the 5 taxable years following the excess
23 credit year. The credit shall be applied to the earliest
24 year for which there is a liability. If there is credit
25 from more than one tax year that is available to offset a
26 liability, earlier credit shall be applied first.
27 (5) The Department of Revenue shall promulgate such
28 rules and regulations as may be deemed necessary to carry
29 out the purposes of this subsection (g).
30 (6) The credit shall be available for eligible
31 employees hired on or after January 1, 1986.
32 (h) Investment credit; High Impact Business.
33 (1) Subject to subsection (b) of Section 5.5 of the
34 Illinois Enterprise Zone Act, a taxpayer shall be allowed
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1 a credit against the tax imposed by subsections (a) and
2 (b) of this Section for investment in qualified property
3 which is placed in service by a Department of Commerce
4 and Community Affairs designated High Impact Business.
5 The credit shall be .5% of the basis for such property.
6 The credit shall not be available until the minimum
7 investments in qualified property set forth in Section
8 5.5 of the Illinois Enterprise Zone Act have been
9 satisfied and shall not be allowed to the extent that it
10 would reduce a taxpayer's liability for the tax imposed
11 by subsections (a) and (b) of this Section to below zero.
12 The credit applicable to such minimum investments shall
13 be taken in the taxable year in which such minimum
14 investments have been completed. The credit for
15 additional investments beyond the minimum investment by a
16 designated high impact business shall be available only
17 in the taxable year in which the property is placed in
18 service and shall not be allowed to the extent that it
19 would reduce a taxpayer's liability for the tax imposed
20 by subsections (a) and (b) of this Section to below zero.
21 For tax years ending on or after December 31, 1987, the
22 credit shall be allowed for the tax year in which the
23 property is placed in service, or, if the amount of the
24 credit exceeds the tax liability for that year, whether
25 it exceeds the original liability or the liability as
26 later amended, such excess may be carried forward and
27 applied to the tax liability of the 5 taxable years
28 following the excess credit year. The credit shall be
29 applied to the earliest year for which there is a
30 liability. If there is credit from more than one tax
31 year that is available to offset a liability, the credit
32 accruing first in time shall be applied first.
33 Changes made in this subdivision (h)(1) by Public
34 Act 88-670 restore changes made by Public Act 85-1182 and
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1 reflect existing law.
2 (2) The term qualified property means property
3 which:
4 (A) is tangible, whether new or used,
5 including buildings and structural components of
6 buildings;
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 (h);
12 (C) is acquired by purchase as defined in
13 Section 179(d) of the Internal Revenue Code; and
14 (D) is not eligible for the Enterprise Zone
15 Investment Credit provided by subsection (f) of this
16 Section.
17 (3) The basis of qualified property shall be the
18 basis used to compute the depreciation deduction for
19 federal income tax purposes.
20 (4) If the basis of the property for federal income
21 tax depreciation purposes is increased after it has been
22 placed in service in a federally designated Foreign Trade
23 Zone or Sub-Zone located in Illinois by the taxpayer, the
24 amount of such increase shall be deemed property placed
25 in service on the date of such increase in basis.
26 (5) The term "placed in service" shall have the
27 same meaning as under Section 46 of the Internal Revenue
28 Code.
29 (6) If during any taxable year ending on or before
30 December 31, 1996, any property ceases to be qualified
31 property in the hands of the taxpayer within 48 months
32 after being placed in service, or the situs of any
33 qualified property is moved outside Illinois within 48
34 months after being placed in service, the tax imposed
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1 under subsections (a) and (b) of this Section for such
2 taxable year shall be increased. Such increase shall be
3 determined by (i) recomputing the investment credit which
4 would have been allowed for the year in which credit for
5 such property was originally allowed by eliminating such
6 property from such computation, and (ii) subtracting such
7 recomputed credit from the amount of credit previously
8 allowed. For the purposes of this paragraph (6), a
9 reduction of the basis of qualified property resulting
10 from a redetermination of the purchase price shall be
11 deemed a disposition of qualified property to the extent
12 of such reduction.
13 (7) Beginning with tax years ending after December
14 31, 1996, if a taxpayer qualifies for the credit under
15 this subsection (h) and thereby is granted a tax
16 abatement and the taxpayer relocates its entire facility
17 in violation of the explicit terms and length of the
18 contract under Section 18-183 of the Property Tax Code,
19 the tax imposed under subsections (a) and (b) of this
20 Section shall be increased for the taxable year in which
21 the taxpayer relocated its facility by an amount equal to
22 the amount of credit received by the taxpayer under this
23 subsection (h).
24 (i) A credit shall be allowed against the tax imposed by
25 subsections (a) and (b) of this Section for the tax imposed
26 by subsections (c) and (d) of this Section. This credit
27 shall be computed by multiplying the tax imposed by
28 subsections (c) and (d) of this Section by a fraction, the
29 numerator of which is base income allocable to Illinois and
30 the denominator of which is Illinois base income, and further
31 multiplying the product by the tax rate imposed by
32 subsections (a) and (b) of this Section.
33 Any credit earned on or after December 31, 1986 under
34 this subsection which is unused in the year the credit is
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1 computed because it exceeds the tax liability imposed by
2 subsections (a) and (b) for that year (whether it exceeds the
3 original liability or the liability as later amended) may be
4 carried forward and applied to the tax liability imposed by
5 subsections (a) and (b) of the 5 taxable years following the
6 excess credit year. This credit shall be applied first to
7 the earliest year for which there is a liability. If there
8 is a credit under this subsection from more than one tax year
9 that is available to offset a liability the earliest credit
10 arising under this subsection shall be applied first.
11 If, during any taxable year ending on or after December
12 31, 1986, the tax imposed by subsections (c) and (d) of this
13 Section for which a taxpayer has claimed a credit under this
14 subsection (i) is reduced, the amount of credit for such tax
15 shall also be reduced. Such reduction shall be determined by
16 recomputing the credit to take into account the reduced tax
17 imposed by subsection (c) and (d). If any portion of the
18 reduced amount of credit has been carried to a different
19 taxable year, an amended return shall be filed for such
20 taxable year to reduce the amount of credit claimed.
21 (j) Training expense credit. Beginning with tax years
22 ending on or after December 31, 1986, a taxpayer shall be
23 allowed a credit against the tax imposed by subsection (a)
24 and (b) under this Section for all amounts paid or accrued,
25 on behalf of all persons employed by the taxpayer in Illinois
26 or Illinois residents employed outside of Illinois by a
27 taxpayer, for educational or vocational training in
28 semi-technical or technical fields or semi-skilled or skilled
29 fields, which were deducted from gross income in the
30 computation of taxable income. The credit against the tax
31 imposed by subsections (a) and (b) shall be 1.6% of such
32 training expenses. For partners, and for shareholders of
33 subchapter S corporations, and owners of limited liability
34 companies, if the liability company is treated as a
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1 partnership for purposes of federal and State income
2 taxation, there shall be allowed a credit under this
3 subsection (j) to be determined in accordance with the
4 determination of income and distributive share of income
5 under Sections 702 and 704 and subchapter S of the Internal
6 Revenue Code.
7 Any credit allowed under this subsection which is unused
8 in the year the credit is earned may be carried forward to
9 each of the 5 taxable years following the year for which the
10 credit is first computed until it is used. This credit shall
11 be applied first to the earliest year for which there is a
12 liability. If there is a credit under this subsection from
13 more than one tax year that is available to offset a
14 liability the earliest credit arising under this subsection
15 shall be applied first.
16 (k) Research and development credit.
17 Beginning with tax years ending after July 1, 1990, a
18 taxpayer shall be allowed a credit against the tax imposed by
19 subsections (a) and (b) of this Section for increasing
20 research activities in this State. The credit allowed
21 against the tax imposed by subsections (a) and (b) shall be
22 equal to 6 1/2% of the qualifying expenditures for increasing
23 research activities in this State. For partners, shareholders
24 of subchapter S corporations, and owners of limited liability
25 companies, if the liability company is treated as a
26 partnership for purposes of federal and State income
27 taxation, there shall be allowed a credit under this
28 subsection to be determined in accordance with the
29 determination of income and distributive share of income
30 under Sections 702 and 704 and subchapter S of the Internal
31 Revenue Code.
32 For purposes of this subsection, "qualifying
33 expenditures" means the qualifying expenditures as defined
34 for the federal credit for increasing research activities
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1 which would be allowable under Section 41 of the Internal
2 Revenue Code and which are conducted in this State,
3 "qualifying expenditures for increasing research activities
4 in this State" means the excess of qualifying expenditures
5 for the taxable year in which incurred over qualifying
6 expenditures for the base period, "qualifying expenditures
7 for the base period" means the average of the qualifying
8 expenditures for each year in the base period, and "base
9 period" means the 3 taxable years immediately preceding the
10 taxable year for which the determination is being made.
11 Any credit in excess of the tax liability for the taxable
12 year may be carried forward. A taxpayer may elect to have the
13 unused credit shown on its final completed return carried
14 over as a credit against the tax liability for the following
15 5 taxable years or until it has been fully used, whichever
16 occurs first.
17 If an unused credit is carried forward to a given year
18 from 2 or more earlier years, that credit arising in the
19 earliest year will be applied first against the tax liability
20 for the given year. If a tax liability for the given year
21 still remains, the credit from the next earliest year will
22 then be applied, and so on, until all credits have been used
23 or no tax liability for the given year remains. Any
24 remaining unused credit or credits then will be carried
25 forward to the next following year in which a tax liability
26 is incurred, except that no credit can be carried forward to
27 a year which is more than 5 years after the year in which the
28 expense for which the credit is given was incurred.
29 Unless extended by law, the credit shall not include
30 costs incurred after December 31, 2004, except for costs
31 incurred pursuant to a binding contract entered into on or
32 before December 31, 2004.
33 (l) Environmental Remediation Tax Credit.
34 (i) For tax years ending after December 31, 1997
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1 and on or before December 31, 2001, a taxpayer shall be
2 allowed a credit against the tax imposed by subsections
3 (a) and (b) of this Section for certain amounts paid for
4 unreimbursed eligible remediation costs, as specified in
5 this subsection. For purposes of this Section,
6 "unreimbursed eligible remediation costs" means costs
7 approved by the Illinois Environmental Protection Agency
8 ("Agency") under Section 58.14 of the Environmental
9 Protection Act that were paid in performing environmental
10 remediation at a site for which a No Further Remediation
11 Letter was issued by the Agency and recorded under
12 Section 58.10 of the Environmental Protection Act. The
13 credit must be claimed for the taxable year in which
14 Agency approval of the eligible remediation costs is
15 granted. The credit is not available to any taxpayer if
16 the taxpayer or any related party caused or contributed
17 to, in any material respect, a release of regulated
18 substances on, in, or under the site that was identified
19 and addressed by the remedial action pursuant to the Site
20 Remediation Program of the Environmental Protection Act.
21 After the Pollution Control Board rules are adopted
22 pursuant to the Illinois Administrative Procedure Act for
23 the administration and enforcement of Section 58.9 of the
24 Environmental Protection Act, determinations as to credit
25 availability for purposes of this Section shall be made
26 consistent with those rules. For purposes of this
27 Section, "taxpayer" includes a person whose tax
28 attributes the taxpayer has succeeded to under Section
29 381 of the Internal Revenue Code and "related party"
30 includes the persons disallowed a deduction for losses by
31 paragraphs (b), (c), and (f)(1) of Section 267 of the
32 Internal Revenue Code by virtue of being a related
33 taxpayer, as well as any of its partners. The credit
34 allowed against the tax imposed by subsections (a) and
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1 (b) shall be equal to 25% of the unreimbursed eligible
2 remediation costs in excess of $100,000 per site, except
3 that the $100,000 threshold shall not apply to any site
4 contained in an enterprise zone as determined by the
5 Department of Commerce and Community Affairs. The total
6 credit allowed shall not exceed $40,000 per year with a
7 maximum total of $150,000 per site. For partners and
8 shareholders of subchapter S corporations, there shall be
9 allowed a credit under this subsection to be determined
10 in accordance with the determination of income and
11 distributive share of income under Sections 702 and 704
12 of subchapter S of the Internal Revenue Code.
13 (ii) A credit allowed under this subsection that is
14 unused in the year the credit is earned may be carried
15 forward to each of the 5 taxable years following the year
16 for which the credit is first earned until it is used.
17 The term "unused credit" does not include any amounts of
18 unreimbursed eligible remediation costs in excess of the
19 maximum credit per site authorized under paragraph (i).
20 This credit shall be applied first to the earliest year
21 for which there is a liability. If there is a credit
22 under this subsection from more than one tax year that is
23 available to offset a liability, the earliest credit
24 arising under this subsection shall be applied first. A
25 credit allowed under this subsection may be sold to a
26 buyer as part of a sale of all or part of the remediation
27 site for which the credit was granted. The purchaser of
28 a remediation site and the tax credit shall succeed to
29 the unused credit and remaining carry-forward period of
30 the seller. To perfect the transfer, the assignor shall
31 record the transfer in the chain of title for the site
32 and provide written notice to the Director of the
33 Illinois Department of Revenue of the assignor's intent
34 to sell the remediation site and the amount of the tax
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1 credit to be transferred as a portion of the sale. In no
2 event may a credit be transferred to any taxpayer if the
3 taxpayer or a related party would not be eligible under
4 the provisions of subsection (i).
5 (iii) For purposes of this Section, the term "site"
6 shall have the same meaning as under Section 58.2 of the
7 Environmental Protection Act.
8 (Source: P.A. 89-235, eff. 8-4-95; 89-519, eff. 7-18-96;
9 89-591, eff. 8-1-96; 90-123, eff. 7-21-97; 90-458, eff.
10 8-17-97; 90-605, eff. 6-30-98; 90-655, eff. 7-30-98; 90-717,
11 eff. 8-7-98; 90-792, eff. 1-1-99; revised 9-16-98.)
12 Section 99. Effective date. This Act takes effect upon
13 becoming law.".