AS AMENDED THROUGH PUBLIC ACT 100-555
Sec. 101. Short Title...... 1 Sec. 217. Credit for wages paid to qualified veterans...... 47 Sec. 102. Construction...... 1 Sec. 103. Renumbered Internal Revenue Sec. 217.1. Credit for wages paid to Code Provisions...... 1 qualified unemployed veterans. .. 47 Sec. 218. Credit for student-assistance Sec. 201. Tax Imposed...... 1 contributions...... 48 Sec. 201.5. State spending limitation and Sec. 219. Historic preservation credit...... 48 tax reduction...... 11 Sec. 220. Angel investment credit...... 48 Sec. 202. Net Income Defined...... 13 Sec. 221. Rehabilitation costs; qualified Sec. 202.3. Net Income Attributable To historic properties; River Edge The Period Prior To July 1, Redevelopment Zone...... 52 1989 And Net Income Attributable To The Period Sec. 222. Live theater production credit. .... 52 After June 30, 1989...... 13 Sec. 223. Hospital credit...... 53 Sec. 202.4. Net Income Attributable To Sec. 224. Invest in Kids credit...... 53 The Period Prior To July 1, 1993 And Net Income Sec. 225. Credit for instructional Attributable To The Period materials and supplies...... 53 After June 30, 1993...... 13 Sec. 226. Natural disaster credit...... 54 Sec. 202.5. Net income attributable to the Sec. 250. Sunset Of Exemptions, Credits, period beginning prior to the And Deductions...... 54 first day of a month and ending after the last day of the Sec. 301. General Rule...... 55 preceding month...... 13 Sec. 302. Compensation Paid To Sec. 203. Base income defined...... 14 Nonresidents...... 55 Sec. 204. Standard Exemption...... 39 Sec. 303. Non-Business Income Of Persons Other Than Residents. ... 55 Sec. 205. Exempt organizations...... 40 Sec. 304. Business income of persons Sec. 206. Tax Credits For Coal Research other than residents...... 57 And Coal Utilization Equipment...... 41 Sec. 305. Allocation Of Partnership Income By Partnerships And Sec. 207. Net Losses...... 41 Partners Other Than Residents. ... 69 Sec. 208. Tax Credit For Residential Real Sec. 306. Allocation Or Apportionment Property Taxes...... 42 Of Income By Estates And Trusts. Sec. 208.1. Homeowners’ Tax Relief Rebate...... 70 ...... 42 Sec. 307. Allocation Of Income By Estate Sec. 209. Tax Credit for "TECH-PREP" Or Trust Beneficiaries Other youth vocational programs...... 43 Than Residents...... 70 Sec. 210. Dependent Care Assistance Sec. 308. Allocation Of Subchapter S Program Tax Credit...... 43 Corporation Income By Subchapter S Corporations Sec. 210.5. Tax credit for employee child care. And Shareholders Other Than ...... 43 Residents...... 70 Sec. 211. Economic Development for a Sec. 401. Taxable Year...... 71 Growing Economy Tax Credit. ... 44 Sec. 402. Methods Of Accounting...... 71 Sec. 212. Earned income tax credit...... 45 Sec. 403. Effect Of Determination For Sec. 213. Film production services credit. .. 45 Federal Purposes...... 71 Sec. 214. Tax credit for affordable Sec. 404. Reallocation Of Items...... 71 housing donations...... 45 Sec. 405 Carryovers in Certain Acquisitions. Sec. 216. Credit for wages paid to ex-felons...... 72 ...... 46
i As Amended Through Public Act 100-555 Sec. 501. Notice Or Regulations Sec. 507R. Mental Health Research Fund Requiring Records, Statements Checkoff...... 81 And Special Returns...... 72 Sec. 507S. Children’s Cancer Fund Checkoff. Sec. 502. Returns and notices...... 73 ...... 81 Sec. 502.1. Use tax...... 76 Sec. 507T. American Diabetes Association Checkoff...... 82 Sec. 503. Signing Of Returns And Notices...... 76 Sec. 507U. Prostate Cancer Research Fund Sec. 504. Verification...... 77 checkoff...... 82 Sec. 507V. National World War II Sec. 505. Time And Place For Filing Returns. Memorial Fund checkoff...... 82 ...... 77 Sec. 507W. Korean War Veterans National Sec. 506. Federal Returns...... 78 Museum and Library Fund Sec. 506.5. Returns Based On Substitute checkoff...... 82 W-2 Forms...... 78 Sec. 507X. The Multiple Sclerosis Sec. 507. Child Abuse Prevention Fund Assistance Fund checkoff...... 82 Checkoff...... 78 Sec. 507Y. The Illinois Military Family Sec. 507A. Community Health Center Care Relief checkoff...... 82 Fund Checkoff...... 79 Sec. 507Z. World War II Illinois Veterans Sec. 507B. Child Care Expansion Program Memorial Fund checkoff...... 83 Fund Checkoff...... 79 Sec. 507AA. The Lou Gehrig's Disease Sec. 507C. Youth Drug Abuse Prevention (ALS) Research Fund checkoff. Fund Checkoff...... 79 (PA 93-0036) ...... 83 Sec. 507E. Assistive Technology For Sec. 507BB. Asthma and Lung Research Persons With Disabilities Fund checkoff. (PA 93-0292) ...... 83 Checkoff...... 79 Sec. 507CC. The Leukemia Treatment and Sec. 507F. Domestic Violence Shelter And Education checkoff. (PA 93-0324) Service Fund Checkoff...... 79 ...... 83 Sec. 507G. United States Olympians Sec. 507DD. The Illinois Veterans' Homes Assistance Fund Checkoff...... 79 Fund checkoff...... 83 Sec. 507H. Persian Gulf Conflict Veterans Sec. 507EE. Pet Population Control Fund Fund Checkoff...... 80 checkoff...... 83 Sec. 507I. Literacy Advancement Fund Sec. 507FF. Epilepsy Treatment and Checkoff...... 80 Education Grants-in-Aid Fund Sec. 507J. Ryan White Pediatric And checkoff...... 84 Adult AIDS Fund Checkoff...... 80 Sec. 507GG. Diabetes Research Checkoff Sec. 507K. Illinois Special Olympics Checkoff. Fund checkoff...... 84 ...... 80 Sec. 507HH. Sarcoidosis Research Fund Sec. 507L. Penny Severns Breast, Cervical, checkoff...... 84 and Ovarian Cancer Research Sec. 507II. The Vince Demuzio Memorial Fund Checkoff...... 80 Colon Cancer Fund checkoff...... 84 Sec. 507M. Meals On Wheels Fund Checkoff. Sec. 507JJ. The Autism Research Checkoff ...... 80 Fund checkoff...... 84 Sec. 507N. Korean War Memorial Fund Sec. 507KK. Blindness Prevention Fund Checkoff...... 81 checkoff...... 85 Sec. 507O. Heart Disease Treatment And Sec. 507LL. The Illinois Brain Tumor Prevention Fund Checkoff...... 81 Research checkoff...... 85 Sec. 507P. Hemophilia Treatment Fund Sec. 507MM. Supplemental Low-Income Checkoff...... 81 Energy Assistance Fund checkoff. Sec. 507Q. Women In Military Service ...... 85 Memorial Fund Checkoff...... 81 Sec. 507NN. The Heartsaver AED Fund checkoff. (P.A. 94-876) ...... 85
-ii- As Amended Through Public Act 100-0047 Sec. 507PP. The lung cancer research Sec. 603. Credit Of Overpayments For checkoff. (Public Act 95-434) ..... 85 Taxpayers That Are Members Sec. 507QQ. The autoimmune disease Of A Unitary Business Group. .... 92 research checkoff. (Public Act Sec. 604. Payments Not Payable To 95-435) ...... 85 Department...... 92 Sec. 507RR. The Healthy Smiles Fund checkoff. Sec. 605. Payments By Credit Card...... 92 ...... 86 Sec. 606. EDGE payment...... 92 Sec. 507SS. The hunger relief checkoff...... 86 Sec. 701. Requirement and Amount of Sec. 507TT. The crisis nursery checkoff...... 86 Withholding...... 92 Sec. 507UU. The Illinois Route 66 checkoff. ... 86 Sec. 702. Amount Exempt From Sec. 507VV. Habitat for Humanity Fund Withholding...... 93 checkoff...... 86 Sec. 703. Information Statement...... 93 Sec. 507WW. The State parks checkoff...... 86 Sec. 704. Employer's Return and Payment of Tax Withheld...... 93 Sec. 507XX. The property tax relief checkoff for veterans with disabilities...... 86 Sec. 704A. Employer's return and payment Sec. 507YY. Crime Stoppers checkoff...... 87 of tax withheld...... 94 Sec. 705. Employer's Liability For Sec. 507ZZ. After-School Rescue Fund Withheld Taxes...... 96 checkoff...... 87 Sec. 706. Employer's Failure To Sec. 507AAA. The Childhood Cancer Withhold...... 96 Research Fund checkoff...... 87 Sec. 507BBB. The Children's Wellness Charities Sec. 707. Governmental Employers...... 96 Fund checkoff...... 87 Sec. 709.5. Withholding by partnerships, Subchapter S corporations, and Sec. 507CCC. The Housing for Families Fund trusts...... 96 checkoff...... 87 Sec. 710. Withholding From Lottery Sec. 507DDD. Special Olympics Illinois and Winnings...... 97 Special Children's Checkoff...... 87 Sec. 507EEE. U.S.S. Illinois Commissioning Sec. 711. Payor's Return and Payment of Fund checkoff...... 88 Tax Withheld...... 98 Sec. 712. Payor's Liability For Withheld Sec. 507FFF. Autism Care Fund checkoff...... 88 Taxes...... 98 Sec. 507GGG. Thriving Youth checkoff...... 88 Sec. 713. Payor's Failure To Withhold...... 98 Sec. 507HHH. Illinois Police Memorial checkoff. Sec. 803. Payment Of Estimated Tax...... 98 ...... 88 Sec. 804. Failure To Pay Estimated Tax. .... 99 Sec. 508. Transfer Of Checkoff Funds...... 89 Sec. 806. Exemption from penalty ...... 101 Sec. 509. Tax checkoff explanations...... 89 Sec. 807. EDGE payment...... 101 Sec. 509.1. Removal of excess tax checkoff funds...... 89 Sec. 901. Collection Authority...... 101 Sec. 510. Determination of amounts Sec. 902. Notice And Demand...... 105 contributed...... 89 Sec. 903. Assessment...... 106 Sec. 511. Refunds...... 89 Sec. 904. Deficiencies And Overpayments. Sec. 512. School District Information...... 90 ...... 106 Sec. 516. Assistance To The Homeless Fund. Sec. 905. Limitations on Notices of ...... 90 Deficiency...... 107 Sec. 601. Payment on Due Date of Sec. 906. Further Notices Of Deficiency Return...... 90 Restricted...... 109 Sec. 601.1. Payment by electronic funds Sec. 907. Waiver Of Restrictions On transfer...... 91 Assessment...... 109 Sec. 602. Tentative Payments...... 92 Sec. 908. Procedure On Protest...... 110 Sec. 909. Credits And Refunds...... 110
-iii- As Amended Through Public Act 100-0047 Sec. 910. Procedure On Denial Of Claim Sec. 1110. Redemption By State...... 127 For Refund...... 111 Sec. 1201. Administrative Review Law Sec. 911. Limitations on Claims for Refund. Illinois Independent Tax ...... 112 Tribunal Act of 2012...... 127 Sec. 911.1 114 Sec. 1202. Venue...... 127 Sec. 911.2. Refunds withheld; tax claims Sec. 1203. Service, Certification And of other states...... 114 Dismissal...... 127 Sec. 911.3. Refunds withheld; order of Sec. 1204. Modification Of Assessment. .... 128 honoring requests...... 115 Sec. 1301. Willful And Fraudulent Acts. .... 128 Sec. 912. Recovery Of Erroneous Refund. Sec. 1302. Willful Failure To Pay Over. .... 128 ...... 116 Sec. 1401. Promulgation Of Rules And Sec. 913. Access To Books And Records. 116 Regulations...... 128 Sec. 914. Conduct Of Investigations Sec. 1402. Notice...... 129 And Hearings...... 116 Sec. 1403. Substitution Of Parties...... 129 Sec. 915. Immunity Of Witnesses...... 116 Sec. 1404. Appointment Of Secretary Of Sec. 916. Production Of Witnesses And State As Agent For Service Of Records...... 116 Process...... 129 Sec. 917. Confidentiality and Sec. 1405. Transferees...... 129 information sharing...... 117 Sec. 1405.1. Information Reports: ...... 129 Sec. 918. Place Of Hearings...... 118 Sec. 1405.2. Information Reports For Sec. 1001. Failure to File Tax Returns...... 119 Payments Made Under Sec. 1002. Failure To Pay Tax...... 119 Contracts For Personal Services: Sec. 1003. Interest On Deficiencies...... 120 ...... 130 Sec. 1405.3. Information Reports For Sec. 1004. Failure To File Withholding Payments Made For Prizes Returns Or Annual Transmittal Forms For Wage And Tax And Awards...... 131 Statements...... 120 Sec. 1405.4. Tax Refund Inquiries; Response...... 131 Sec. 1005. Penalty For Underpayment Of Tax...... 120 Sec. 1405.5. Registration of tax shelters...... 131 Sec. 1006. Frivolous Returns...... 122 Sec. 1405.6. Investor lists...... 132 Sec. 1007. Failure to register tax shelter Sec. 1406. Identifying Numbers...... 132 or maintain list...... 123 Sec. 1407. Amounts Less Than $1...... 132 Sec. 1008. Promoting tax shelters...... 123 Sec. 1408. Administrative Procedure Sec. 1101. Lien For Tax...... 123 Act - Application...... 132 Sec. 1102. Jeopardy Assessments...... 124 Sec. 1501. Definitions...... 133 Sec. 1103. Filing and Priority of Liens...... 124 Sec. 1502. Arrangement And Captions...... 140 Sec. 1104. Duration Of Lien...... 125 Sec. 1601. Severability...... 140 Sec. 1105. Release of Liens...... 125 Sec. 1701. Effective Date...... 140 Sec. 1106. Nonliability For Costs...... 125 Sec. 1107. Claim To Property...... 125 Sec. 1108. Foreclosure On Real Property. .. 126 Sec. 1109. Demand And Seizure...... 126
-iv- As Amended Through Public Act 100-0047 AN ACT to impose a tax on the privilege of earning (1) In the case of an individual, trust or or receiving income in or as a resident of the State estate, for taxable years ending prior to July 1, 1989, of Illinois. an amount equal to 2 1/2% of the taxpayer's net income for the taxable year. (35 ILCS 5/101 et seq.) (from Ch. 120, par. 1-101 et seq.) (2) In the case of an individual, trust or estate, for taxable years beginning prior to July 1,
1989 and ending after June 30, 1989, an amount Cite: 35 ILCS 5/101 et seq. From: Ch. 120, par. 1- equal to the sum of (i) 2 1/2% of the taxpayer's net 101 et seq. Source: P.A. 76-261. Date: Approved income for the period prior to July 1, 1989, as July 1, 1969. Short title: Illinois Income Tax Act. calculated under Section 202.3, and (ii) 3% of the taxpayer's net income for the period after June 30, ARTICLE 1. SHORT TITLE AND 1989, as calculated under Section 202.3. CONSTRUCTION. (3) In the case of an individual, trust or Sec. 101. Short Title. estate, for taxable years beginning after June 30, This Act shall be known and may be cited 1989, and ending prior to January 1, 2011, an as the "Illinois Income Tax Act." (Source: P.A. 76- amount equal to 3% of the taxpayer's net income for 261.) the taxable year. Sec. 102. Construction. (4) In the case of an individual, trust, or estate, for taxable years beginning prior to January Except as otherwise expressly provided or 1, 2011, and ending after December 31, 2010, an clearly appearing from the context, any term used in amount equal to the sum of (i) 3% of the taxpayer's this Act shall have the same meaning as when used net income for the period prior to January 1, 2011, in a comparable context in the United States Internal as calculated under Section 202.5, and (ii) 5% of the Revenue Code of 1954 or any successor law or laws taxpayer's net income for the period after December relating to federal income taxes and other provisions 31, 2010, as calculated under Section 202.5. of the statutes of the United States relating to federal income taxes as such Code, laws and statutes are in (5) In the case of an individual, trust, or effect for the taxable year. (Source: P.A. 77-726.) estate, for taxable years beginning on or after January 1, 2011, and ending prior to January 1, Sec. 103. Renumbered Internal Revenue 2015, an amount equal to 5% of the taxpayer's net Code Provisions. income for the taxable year. If a provision of the United States Internal (5.1) In the case of an individual, trust, or Revenue Code is specifically mentioned by number estate, for taxable years beginning prior to January in a provision of this Act and if after the effective 1, 2015, and ending after December 31, 2014, an date of the legislation that established such reference amount equal to the sum of (i) 5% of the taxpayer's the Internal Revenue Code provision thus referred to net income for the period prior to January 1, 2015, is, by amendment, renumbered without any other as calculated under Section 202.5, and (ii) 3.75% of change whatever being made to it, then the provision the taxpayer's net income for the period after of this Act containing such reference shall be December 31, 2014, as calculated under Section construed as though the renumbering of the 202.5. provision of the United States Internal Revenue Code had not occurred. (Source: P.A. 86-678.) (5.2) In the case of an individual, trust, or estate, for taxable years beginning on or after ARTICLE 2. TAX IMPOSED January 1, 2015, and ending prior to July 1, 2017, an Sec. 201. Tax Imposed. amount equal to 3.75% of the taxpayer's net income for the taxable year. (a) In general. A tax measured by net income is hereby imposed on every individual, (5.3) In the case of an individual, trust, or corporation, trust and estate for each taxable year estate, for taxable years beginning prior to July 1, ending after July 31, 1969 on the privilege of 2017, and ending after June 30, 2017, an amount earning or receiving income in or as a resident of equal to the sum of (i) 3.75% of the taxpayer's net this State. Such tax shall be in addition to all other income for the period prior to July 1, 2017, as occupation or privilege taxes imposed by this State calculated under Section 202.5, and (ii) 4.95% of the or by any municipal corporation or political taxpayer's net income for the period after June 30, subdivision thereof. 2017, as calculated under Section 202.5. (b) Rates. The tax imposed by subsection (5.4) In the case of an individual, trust, or (a) of this Section shall be determined as follows, estate, for taxable years beginning on or after July 1, except as adjusted by subsection (d-1): 2017, an amount equal to 4.95% of the taxpayer's net income for the taxable year. 1 As Amended Through Public Act 100-555
(6) In the case of a corporation, for taxable amount equal to 7% of the taxpayer's net income for years ending prior to July 1, 1989, an amount equal the taxable year. to 4% of the taxpayer's net income for the taxable The rates under this subsection (b) are year. subject to the provisions of Section 201.5. (7) In the case of a corporation, for taxable (c) Personal Property Tax Replacement years beginning prior to July 1, 1989 and ending Income Tax. Beginning on July 1, 1979 and after June 30, 1989, an amount equal to the sum of thereafter, in addition to such income tax, there is (i) 4% of the taxpayer's net income for the period also hereby imposed the Personal Property Tax prior to July 1, 1989, as calculated under Section Replacement Income Tax measured by net income 202.3, and (ii) 4.8% of the taxpayer's net income for on every corporation (including Subchapter S the period after June 30, 1989, as calculated under corporations), partnership and trust, for each taxable Section 202.3. year ending after June 30, 1979. Such taxes are (8) In the case of a corporation, for taxable imposed on the privilege of earning or receiving years beginning after June 30, 1989, and ending income in or as a resident of this State. The Personal prior to January 1, 2011, an amount equal to 4.8% Property Tax Replacement Income Tax shall be in of the taxpayer's net income for the taxable year. addition to the income tax imposed by subsections (a) and (b) of this Section and in addition to all other (9) In the case of a corporation, for taxable occupation or privilege taxes imposed by this State years beginning prior to January 1, 2011, and ending or by any municipal corporation or political after December 31, 2010, an amount equal to the subdivision thereof. sum of (i) 4.8% of the taxpayer's net income for the period prior to January 1, 2011, as calculated under (d) Additional Personal Property Tax Section 202.5, and (ii) 7% of the taxpayer's net Replacement Income Tax Rates. The personal income for the period after December 31, 2010, as property tax replacement income tax imposed by calculated under Section 202.5. this subsection and subsection (c) of this Section in the case of a corporation, other than a Subchapter S (10) In the case of a corporation, for corporation and except as adjusted by subsection (d- taxable years beginning on or after January 1, 2011, 1), shall be an additional amount equal to 2.85% of and ending prior to January 1, 2015, an amount such taxpayer's net income for the taxable year, equal to 7% of the taxpayer's net income for the except that beginning on January 1, 1981, and taxable year. thereafter, the rate of 2.85% specified in this (11) In the case of a corporation, for subsection shall be reduced to 2.5%, and in the case taxable years beginning prior to January 1, 2015, of a partnership, trust or a Subchapter S corporation and ending after December 31, 2014, an amount shall be an additional amount equal to 1.5% of such equal to the sum of (i) 7% of the taxpayer's net taxpayer's net income for the taxable year. income for the period prior to January 1, 2015, as (d-1) Rate reduction for certain foreign calculated under Section 202.5, and (ii) 5.25% of the insurers. In the case of a foreign insurer, as defined taxpayer's net income for the period after December by Section 35A-5 of the Illinois Insurance Code, 31, 2014, as calculated under Section 202.5. whose state or country of domicile imposes on (12) In the case of a corporation, for insurers domiciled in Illinois a retaliatory tax taxable years beginning on or after January 1, 2015, (excluding any insurer whose premiums from and ending prior to July 1, 2017, an amount equal to reinsurance assumed are 50% or more of its total 5.25% of the taxpayer's net income for the taxable insurance premiums as determined under paragraph year. (2) of subsection (b) of Section 304, except that for purposes of this determination premiums from (13) In the case of a corporation, for reinsurance do not include premiums from inter- taxable years beginning prior to July 1, 2017, and affiliate reinsurance arrangements), beginning with ending after June 30, 2017, an amount equal to the taxable years ending on or after December 31, 1999, sum of (i) 5.25% of the taxpayer's net income for the the sum of the rates of tax imposed by subsections period prior to July 1, 2017, as calculated under (b) and (d) shall be reduced (but not increased) to Section 202.5, and (ii) 7% of the taxpayer's net the rate at which the total amount of tax imposed income for the period after June 30, 2017, as under this Act, net of all credits allowed under this calculated under Section 202.5. Act, shall equal (i) the total amount of tax that would (14) In the case of a corporation, for be imposed on the foreign insurer's net income taxable years beginning on or after July 1, 2017, an allocable to Illinois for the taxable year by such
2 As Amended Through Public Act 100-555
foreign insurer's state or country of domicile if that as determined by the taxpayer's employment records net income were subject to all income taxes and filed with the Illinois Department of Employment taxes measured by net income imposed by such Security. Taxpayers who are new to Illinois shall be foreign insurer's state or country of domicile, net of deemed to have met the 1% growth in base all credits allowed or (ii) a rate of zero if no such tax employment for the first year in which they file is imposed on such income by the foreign insurer's employment records with the Illinois Department of state of domicile. For the purposes of this subsection Employment Security. The provisions added to this (d-1), an inter-affiliate includes a mutual insurer Section by Public Act 85-1200 (and restored by under common management. Public Act 87-895) shall be construed as declaratory of existing law and not as a new enactment. If, in (1) For the purposes of subsection (d-1), in any year, the increase in base employment within no event shall the sum of the rates of tax imposed by Illinois over the preceding year is less than 1%, the subsections (b) and (d) be reduced below the rate at additional credit shall be limited to that percentage which the sum of: times a fraction, the numerator of which is .5% and (A) the total amount of tax imposed on the denominator of which is 1%, but shall not such foreign insurer under this Act for a taxable exceed .5%. The investment credit shall not be year, net of all credits allowed under this Act, plus allowed to the extent that it would reduce a taxpayer's liability in any tax year below zero, nor (B) the privilege tax imposed by Section may any credit for qualified property be allowed for 409 of the Illinois Insurance Code, the fire insurance any year other than the year in which the property company tax imposed by Section 12 of the Fire was placed in service in Illinois. For tax years Investigation Act, and the fire department taxes ending on or after December 31, 1987, and on or imposed under Section 11-10-1 of the Illinois before December 31, 1988, the credit shall be Municipal Code, equals 1.25% for taxable years allowed for the tax year in which the property is ending prior to December 31, 2003, or 1.75% for placed in service, or, if the amount of the credit taxable years ending on or after December 31, 2003, exceeds the tax liability for that year, whether it of the net taxable premiums written for the taxable exceeds the original liability or the liability as later year, as described by subsection (1) of Section 409 amended, such excess may be carried forward and of the Illinois Insurance Code. This paragraph will applied to the tax liability of the 5 taxable years in no event increase the rates imposed under following the excess credit years if the taxpayer (i) subsections (b) and (d). makes investments which cause the creation of a (2) Any reduction in the rates of tax minimum of 2,000 full-time equivalent jobs in imposed by this subsection shall be applied first Illinois, (ii) is located in an enterprise zone against the rates imposed by subsection (b) and only established pursuant to the Illinois Enterprise Zone after the tax imposed by subsection (a) net of all Act and (iii) is certified by the Department of credits allowed under this Section other than the Commerce and Community Affairs (now credit allowed under subsection (i) has been reduced Department of Commerce and Economic to zero, against the rates imposed by subsection (d). Opportunity) as complying with the requirements specified in clause (i) and (ii) by July 1, 1986. The This subsection (d-1) is exempt from the Department of Commerce and Community Affairs provisions of Section 250. (now Department of Commerce and Economic (e) Investment credit. A taxpayer shall be Opportunity) shall notify the Department of allowed a credit against the Personal Property Tax Revenue of all such certifications immediately. For Replacement Income Tax for investment in tax years ending after December 31, 1988, the credit qualified property. shall be allowed for the tax year in which the property is placed in service, or, if the amount of the (1) A taxpayer shall be allowed a credit credit exceeds the tax liability for that year, whether equal to .5% of the basis of qualified property placed it exceeds the original liability or the liability as later in service during the taxable year, provided such amended, such excess may be carried forward and property is placed in service on or after July 1, 1984. applied to the tax liability of the 5 taxable years There shall be allowed an additional credit equal to following the excess credit years. The credit shall be .5% of the basis of qualified property placed in applied to the earliest year for which there is a service during the taxable year, provided such liability. If there is credit from more than one tax property is placed in service on or after July 1, 1986, year that is available to offset a liability, earlier and the taxpayer's base employment within Illinois credit shall be applied first. has increased by 1% or more over the preceding year
3 As Amended Through Public Act 100-555
(2) The term "qualified property" means it has been placed in service in Illinois by the property which: taxpayer, the amount of such increase shall be deemed property placed in service on the date of (A) is tangible, whether new or used, such increase in basis. including buildings and structural components of buildings and signs that are real property, but not (6) The term "placed in service" shall have including land or improvements to real property that the same meaning as under Section 46 of the Internal are not a structural component of a building such as Revenue Code. landscaping, sewer lines, local access roads, (7) If during any taxable year, any property fencing, parking lots, and other appurtenances; ceases to be qualified property in the hands of the (B) is depreciable pursuant to Section 167 taxpayer within 48 months after being placed in of the Internal Revenue Code, except that "3-year service, or the situs of any qualified property is property" as defined in Section 168(c)(2)(A) of that moved outside Illinois within 48 months after being Code is not eligible for the credit provided by this placed in service, the Personal Property Tax subsection (e); Replacement Income Tax for such taxable year shall be increased. Such increase shall be determined by (C) is acquired by purchase as defined in (i) recomputing the investment credit which would Section 179(d) of the Internal Revenue Code; have been allowed for the year in which credit for (D) is used in Illinois by a taxpayer who is such property was originally allowed by eliminating primarily engaged in manufacturing, or in mining such property from such computation and, (ii) coal or fluorite, or in retailing, or was placed in subtracting such recomputed credit from the amount service on or after July 1, 2006 in a River Edge of credit previously allowed. For the purposes of this Redevelopment Zone established pursuant to the paragraph (7), a reduction of the basis of qualified River Edge Redevelopment Zone Act; and property resulting from a redetermination of the purchase price shall be deemed a disposition of (E) has not previously been used in Illinois qualified property to the extent of such reduction. in such a manner and by such a person as would qualify for the credit provided by this subsection (e) (8) Unless the investment credit is or subsection (f). extended by law, the basis of qualified property shall not include costs incurred after December 31, 2018, (3) For purposes of this subsection (e), except for costs incurred pursuant to a binding "manufacturing" means the material staging and contract entered into on or before December 31, production of tangible personal property by 2018. procedures commonly regarded as manufacturing, processing, fabrication, or assembling which (9) Each taxable year ending before changes some existing material into new shapes, December 31, 2000, a partnership may elect to pass new qualities, or new combinations. For purposes of through to its partners the credits to which the this subsection (e) the term "mining" shall have the partnership is entitled under this subsection (e) for same meaning as the term "mining" in Section the taxable year. A partner may use the credit 613(c) of the Internal Revenue Code. For purposes allocated to him or her under this paragraph only of this subsection (e), the term "retailing" means the against the tax imposed in subsections (c) and (d) of sale of tangible personal property for use or this Section. If the partnership makes that election, consumption and not for resale, or services rendered those credits shall be allocated among the partners in conjunction with the sale of tangible personal in the partnership in accordance with the rules set property for use or consumption and not for resale. forth in Section 704(b) of the Internal Revenue For purposes of this subsection (e), "tangible Code, and the rules promulgated under that Section, personal property" has the same meaning as when and the allocated amount of the credits shall be that term is used in the Retailers' Occupation Tax allowed to the partners for that taxable year. The Act, and, for taxable years ending after December partnership shall make this election on its Personal 31, 2008, does not include the generation, Property Tax Replacement Income Tax return for transmission, or distribution of electricity. that taxable year. The election to pass through the credits shall be irrevocable. (4) The basis of qualified property shall be the basis used to compute the depreciation deduction For taxable years ending on or after for federal income tax purposes. December 31, 2000, a partner that qualifies its partnership for a subtraction under subparagraph (I) (5) If the basis of the property for federal of paragraph (2) of subsection (d) of Section 203 or income tax depreciation purposes is increased after
4 As Amended Through Public Act 100-555
a shareholder that qualifies a Subchapter S (A) is tangible, whether new or used, corporation for a subtraction under subparagraph (S) including buildings and structural components of of paragraph (2) of subsection (b) of Section 203 buildings; shall be allowed a credit under this subsection (e) (B) is depreciable pursuant to Section 167 equal to its share of the credit earned under this of the Internal Revenue Code, except that "3-year subsection (e) during the taxable year by the property" as defined in Section 168(c)(2)(A) of that partnership or Subchapter S corporation, determined Code is not eligible for the credit provided by this in accordance with the determination of income and subsection (f); distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code. (C) is acquired by purchase as defined in This paragraph is exempt from the provisions of Section 179(d) of the Internal Revenue Code; Section 250. (D) is used in the Enterprise Zone or River (f) Investment credit; Enterprise Zone; Edge Redevelopment Zone by the taxpayer; and River Edge Redevelopment Zone. (E) has not been previously used in Illinois (1) A taxpayer shall be allowed a credit in such a manner and by such a person as would against the tax imposed by subsections (a) and (b) of qualify for the credit provided by this subsection (f) this Section for investment in qualified property or subsection (e). which is placed in service in an Enterprise Zone (3) The basis of qualified property shall be created pursuant to the Illinois Enterprise Zone Act the basis used to compute the depreciation deduction or, for property placed in service on or after July 1, 2006, a River Edge Redevelopment Zone for federal income tax purposes. established pursuant to the River Edge (4) If the basis of the property for federal Redevelopment Zone Act. For partners, income tax depreciation purposes is increased after shareholders of Subchapter S corporations, and it has been placed in service in the Enterprise Zone owners of limited liability companies, if the liability or River Edge Redevelopment Zone by the taxpayer, company is treated as a partnership for purposes of the amount of such increase shall be deemed federal and State income taxation, there shall be property placed in service on the date of such allowed a credit under this subsection (f) to be increase in basis. determined in accordance with the determination of income and distributive share of income under (5) The term "placed in service" shall have Sections 702 and 704 and Subchapter S of the the same meaning as under Section 46 of the Internal Internal Revenue Code. The credit shall be .5% of Revenue Code. the basis for such property. The credit shall be (6) If during any taxable year, any property available only in the taxable year in which the ceases to be qualified property in the hands of the property is placed in service in the Enterprise Zone taxpayer within 48 months after being placed in or River Edge Redevelopment Zone and shall not be service, or the situs of any qualified property is allowed to the extent that it would reduce a moved outside the Enterprise Zone or River Edge taxpayer's liability for the tax imposed by Redevelopment Zone within 48 months after being subsections (a) and (b) of this Section to below zero. placed in service, the tax imposed under subsections For tax years ending on or after December 31, 1985, (a) and (b) of this Section for such taxable year shall the credit shall be allowed for the tax year in which be increased. Such increase shall be determined by the property is placed in service, or, if the amount of (i) recomputing the investment credit which would the credit exceeds the tax liability for that year, have been allowed for the year in which credit for whether it exceeds the original liability or the such property was originally allowed by eliminating liability as later amended, such excess may be such property from such computation, and (ii) carried forward and applied to the tax liability of the subtracting such recomputed credit from the amount 5 taxable years following the excess credit year. The of credit previously allowed. For the purposes of this credit shall be applied to the earliest year for which paragraph (6), a reduction of the basis of qualified there is a liability. If there is credit from more than property resulting from a redetermination of the one tax year that is available to offset a liability, the purchase price shall be deemed a disposition of credit accruing first in time shall be applied first. qualified property to the extent of such reduction. (2) The term qualified property means (7) There shall be allowed an additional property which: credit equal to 0.5% of the basis of qualified property placed in service during the taxable year in
5 As Amended Through Public Act 100-555
a River Edge Redevelopment Zone, provided such tax liability for that year, whether it exceeds the property is placed in service on or after July 1, 2006, original liability or the liability as later amended, and the taxpayer's base employment within Illinois such excess may be carried forward and applied to has increased by 1% or more over the preceding year the tax liability of the 5 taxable years following the as determined by the taxpayer's employment records excess credit year. The credit shall be applied to the filed with the Illinois Department of Employment earliest year for which there is a liability. If there is Security. Taxpayers who are new to Illinois shall be credit from more than one tax year that is available deemed to have met the 1% growth in base to offset a liability, the credit accruing first in time employment for the first year in which they file shall be applied first. employment records with the Illinois Department of Changes made in this subdivision (h)(1) by Employment Security. If, in any year, the increase Public Act 88-670 restore changes made by Public in base employment within Illinois over the Act 85-1182 and reflect existing law. preceding year is less than 1%, the additional credit shall be limited to that percentage times a fraction, (2) The term qualified property means the numerator of which is 0.5% and the denominator property which: of which is 1%, but shall not exceed 0.5%. (A) is tangible, whether new or used, (g) (Blank) including buildings and structural components of buildings; (h) Investment credit; High Impact Business. (B) is depreciable pursuant to Section 167 of the Internal Revenue Code, except that "3-year (1) Subject to subsections (b) and (b-5) of property" as defined in Section 168(c)(2)(A) of that Section 5.5 of the Illinois Enterprise Zone Act, a Code is not eligible for the credit provided by this taxpayer shall be allowed a credit against the tax subsection (h); imposed by subsections (a) and (b) of this Section for investment in qualified property which is placed (C) is acquired by purchase as defined in in service by a Department of Commerce and Section 179(d) of the Internal Revenue Code; and Economic Opportunity designated High Impact Business. The credit shall be .5% of the basis for (D) is not eligible for the Enterprise Zone Investment Credit provided by subsection (f) of this such property. The credit shall not be available (i) Section. until the minimum investments in qualified property set forth in subdivision (a)(3)(A) of Section 5.5 of (3) The basis of qualified property shall be the Illinois Enterprise Zone Act have been satisfied the basis used to compute the depreciation deduction or (ii) until the time authorized in subsection (b-5) for federal income tax purposes. of the Illinois Enterprise Zone Act for entities designated as High Impact Businesses under (4) If the basis of the property for federal subdivisions (a)(3)(B), (a)(3)(C), and (a)(3)(D) of income tax depreciation purposes is increased after Section 5.5 of the Illinois Enterprise Zone Act, and it has been placed in service in a federally shall not be allowed to the extent that it would designated Foreign Trade Zone or Sub-Zone located reduce a taxpayer's liability for the tax imposed by in Illinois by the taxpayer, the amount of such subsections (a) and (b) of this Section to below zero. increase shall be deemed property placed in service The credit applicable to such investments shall be on the date of such increase in basis. taken in the taxable year in which such investments (5) The term "placed in service" shall have have been completed. The credit for additional the same meaning as under Section 46 of the Internal investments beyond the minimum investment by a Revenue Code. designated high impact business authorized under subdivision (a)(3)(A) of Section 5.5 of the Illinois (6) If during any taxable year ending on or Enterprise Zone Act shall be available only in the before December 31, 1996, any property ceases to taxable year in which the property is placed in be qualified property in the hands of the taxpayer service and shall not be allowed to the extent that it within 48 months after being placed in service, or would reduce a taxpayer's liability for the tax the situs of any qualified property is moved outside imposed by subsections (a) and (b) of this Section to Illinois within 48 months after being placed in below zero. For tax years ending on or after service, the tax imposed under subsections (a) and December 31, 1987, the credit shall be allowed for (b) of this Section for such taxable year shall be the tax year in which the property is placed in increased. Such increase shall be determined by (i) service, or, if the amount of the credit exceeds the recomputing the investment credit which would have been allowed for the year in which credit for
6 As Amended Through Public Act 100-555
such property was originally allowed by eliminating also be reduced. Such reduction shall be determined such property from such computation, and (ii) by recomputing the credit to take into account the subtracting such recomputed credit from the amount reduced tax imposed by subsections (c) and (d). If of credit previously allowed. For the purposes of this any portion of the reduced amount of credit has been paragraph (6), a reduction of the basis of qualified carried to a different taxable year, an amended property resulting from a redetermination of the return shall be filed for such taxable year to reduce purchase price shall be deemed a disposition of the amount of credit claimed. qualified property to the extent of such reduction. (j) Training expense credit. Beginning (7) Beginning with tax years ending after with tax years ending on or after December 31, 1986 December 31, 1996, if a taxpayer qualifies for the and prior to December 31, 2003, a taxpayer shall be credit under this subsection (h) and thereby is allowed a credit against the tax imposed by granted a tax abatement and the taxpayer relocates subsections (a) and (b) under this Section for all its entire facility in violation of the explicit terms amounts paid or accrued, on behalf of all persons and length of the contract under Section 18-183 of employed by the taxpayer in Illinois or Illinois the Property Tax Code, the tax imposed under residents employed outside of Illinois by a taxpayer, subsections (a) and (b) of this Section shall be for educational or vocational training in semi- increased for the taxable year in which the taxpayer technical or technical fields or semi-skilled or relocated its facility by an amount equal to the skilled fields, which were deducted from gross amount of credit received by the taxpayer under this income in the computation of taxable income. The subsection (h). credit against the tax imposed by subsections (a) and (b) shall be 1.6% of such training expenses. For (i) Credit for Personal Property Tax partners, shareholders of subchapter S corporations, Replacement Income Tax. For tax years ending and owners of limited liability companies, if the prior to December 31, 2003, a credit shall be liability company is treated as a partnership for allowed against the tax imposed by subsections (a) purposes of federal and State income taxation, there and (b) of this Section for the tax imposed by shall be allowed a credit under this subsection (j) to subsections (c) and (d) of this Section. This credit be determined in accordance with the determination shall be computed by multiplying the tax imposed of income and distributive share of income under by subsections (c) and (d) of this Section by a Sections 702 and 704 and subchapter S of the fraction, the numerator of which is base income Internal Revenue Code. allocable to Illinois and the denominator of which is Illinois base income, and further multiplying the Any credit allowed under this subsection product by the tax rate imposed by subsections (a) which is unused in the year the credit is earned may and (b) of this Section. be carried forward to each of the 5 taxable years following the year for which the credit is first Any credit earned on or after December 31, computed until it is used. This credit shall be applied 1986 under this subsection which is unused in the first to the earliest year for which there is a liability. year the credit is computed because it exceeds the If there is a credit under this subsection from more tax liability imposed by subsections (a) and (b) for than one tax year that is available to offset a liability that year (whether it exceeds the original liability or the earliest credit arising under this subsection shall the liability as later amended) may be carried be applied first. No carryforward credit may be forward and applied to the tax liability imposed by claimed in any tax year ending on or after December subsections (a) and (b) of the 5 taxable years 31, 2003. following the excess credit year, provided that no credit may be carried forward to any year ending on (k) Research and development credit. or after December 31, 2003. This credit shall be For tax years ending after July 1, 1990 and applied first to the earliest year for which there is a prior to December 31, 2003, and beginning again for liability. If there is a credit under this subsection tax years ending on or after December 31, 2004, and from more than one tax year that is available to ending prior to January 1, 2022, a taxpayer shall be offset a liability the earliest credit arising under this allowed a credit against the tax imposed by subsection shall be applied first. subsections (a) and (b) of this Section for increasing If, during any taxable year ending on or research activities in this State. The credit allowed after December 31, 1986, the tax imposed by against the tax imposed by subsections (a) and (b) subsections (c) and (d) of this Section for which a shall be equal to 6 1/2% of the qualifying taxpayer has claimed a credit under this subsection expenditures for increasing research activities in this (i) is reduced, the amount of credit for such tax shall State. For partners, shareholders of subchapter S
7 As Amended Through Public Act 100-555
corporations, and owners of limited liability It is the intent of the General Assembly that companies, if the liability company is treated as a the research and development credit under this partnership for purposes of federal and State income subsection (k) shall apply continuously for all tax taxation, there shall be allowed a credit under this years ending on or after December 31, 2004 and subsection to be determined in accordance with the ending prior to January 1, 2022, including, but not determination of income and distributive share of limited to, the period beginning on January 1, 2016 income under Sections 702 and 704 and subchapter and ending on the effective date of this amendatory S of the Internal Revenue Code. Act of the 100th General Assembly. All actions taken in reliance on the continuation of the credit For purposes of this subsection, under this subsection (k) by any taxpayer are hereby "qualifying expenditures" means the qualifying validated. expenditures as defined for the federal credit for increasing research activities which would be (l) Environmental Remediation Tax allowable under Section 41 of the Internal Revenue Credit. Code and which are conducted in this State, (i) For tax years ending after December 31, "qualifying expenditures for increasing research 1997 and on or before December 31, 2001, a activities in this State" means the excess of taxpayer shall be allowed a credit against the tax qualifying expenditures for the taxable year in imposed by subsections (a) and (b) of this Section which incurred over qualifying expenditures for the for certain amounts paid for unreimbursed eligible base period, "qualifying expenditures for the base remediation costs, as specified in this subsection. period" means the average of the qualifying For purposes of this Section, "unreimbursed eligible expenditures for each year in the base period, and remediation costs" means costs approved by the "base period" means the 3 taxable years Illinois Environmental Protection Agency immediately preceding the taxable year for which ("Agency") under Section 58.14 of the the determination is being made. Environmental Protection Act that were paid in Any credit in excess of the tax liability for performing environmental remediation at a site for the taxable year may be carried forward. A taxpayer which a No Further Remediation Letter was issued may elect to have the unused credit shown on its by the Agency and recorded under Section 58.10 of final completed return carried over as a credit the Environmental Protection Act. The credit must against the tax liability for the following 5 taxable be claimed for the taxable year in which Agency years or until it has been fully used, whichever approval of the eligible remediation costs is granted. occurs first; provided that no credit earned in a tax The credit is not available to any taxpayer if the year ending prior to December 31, 2003 may be taxpayer or any related party caused or contributed carried forward to any year ending on or after to, in any material respect, a release of regulated December 31, 2003. substances on, in, or under the site that was identified and addressed by the remedial action If an unused credit is carried forward to a pursuant to the Site Remediation Program of the given year from 2 or more earlier years, that credit Environmental Protection Act. After the Pollution arising in the earliest year will be applied first Control Board rules are adopted pursuant to the against the tax liability for the given year. If a tax Illinois Administrative Procedure Act for the liability for the given year still remains, the credit administration and enforcement of Section 58.9 of from the next earliest year will then be applied, and the Environmental Protection Act, determinations as so on, until all credits have been used or no tax to credit availability for purposes of this Section liability for the given year remains. Any remaining shall be made consistent with those rules. For unused credit or credits then will be carried forward purposes of this Section, "taxpayer" includes a to the next following year in which a tax liability is person whose tax attributes the taxpayer has incurred, except that no credit can be carried succeeded to under Section 381 of the Internal forward to a year which is more than 5 years after Revenue Code and "related party" includes the the year in which the expense for which the credit is persons disallowed a deduction for losses by given was incurred. paragraphs (b), (c), and (f)(1) of Section 267 of the No inference shall be drawn from this Internal Revenue Code by virtue of being a related amendatory Act of the 91st General Assembly in taxpayer, as well as any of its partners. The credit construing this Section for taxable years beginning allowed against the tax imposed by subsections (a) before January 1, 1999. and (b) shall be equal to 25% of the unreimbursed eligible remediation costs in excess of $100,000 per site, except that the $100,000 threshold shall not
8 As Amended Through Public Act 100-555
apply to any site contained in an enterprise zone as ending prior to December 31, 2017, and (ii) $750 for determined by the Department of Commerce and tax years ending on or after December 31, 2017. In Community Affairs (now Department of Commerce no event shall a credit under this subsection reduce and Economic Opportunity). The total credit the taxpayer's liability under this Act to less than allowed shall not exceed $40,000 per year with a zero. Notwithstanding any other provision of law, maximum total of $150,000 per site. For partners for taxable years beginning on or after January 1, and shareholders of subchapter S corporations, there 2017, no taxpayer may claim a credit under this shall be allowed a credit under this subsection to be subsection (m) if the taxpayer's adjusted gross determined in accordance with the determination of income for the taxable year exceeds (i) $500,000, in income and distributive share of income under the case of spouses filing a joint federal tax return or Sections 702 and 704 and subchapter S of the (ii) $250,000, in the case of all other taxpayers. This Internal Revenue Code. subsection is exempt from the provisions of Section 250 of this Act. (ii) A credit allowed under this subsection that is unused in the year the credit is earned may be For purposes of this subsection: carried forward to each of the 5 taxable years "Qualifying pupils" means individuals who following the year for which the credit is first earned (i) are residents of the State of Illinois, (ii) are under until it is used. The term "unused credit" does not the age of 21 at the close of the school year for which include any amounts of unreimbursed eligible a credit is sought, and (iii) during the school year for remediation costs in excess of the maximum credit which a credit is sought were full-time pupils per site authorized under paragraph (i). This credit enrolled in a kindergarten through twelfth grade shall be applied first to the earliest year for which education program at any school, as defined in this there is a liability. If there is a credit under this subsection. subsection from more than one tax year that is available to offset a liability, the earliest credit "Qualified education expense" means the arising under this subsection shall be applied first. A amount incurred on behalf of a qualifying pupil in credit allowed under this subsection may be sold to excess of $250 for tuition, book fees, and lab fees at a buyer as part of a sale of all or part of the the school in which the pupil is enrolled during the remediation site for which the credit was granted. regular school year. The purchaser of a remediation site and the tax "School" means any public or nonpublic credit shall succeed to the unused credit and elementary or secondary school in Illinois that is in remaining carry-forward period of the seller. To perfect the transfer, the assignor shall record the compliance with Title VI of the Civil Rights Act of transfer in the chain of title for the site and provide 1964 and attendance at which satisfies the requirements of Section 26-1 of the School Code, written notice to the Director of the Illinois except that nothing shall be construed to require a Department of Revenue of the assignor's intent to child to attend any particular public or nonpublic sell the remediation site and the amount of the tax school to qualify for the credit under this Section. credit to be transferred as a portion of the sale. In no event may a credit be transferred to any taxpayer if "Custodian" means, with respect to the taxpayer or a related party would not be eligible qualifying pupils, an Illinois resident who is a under the provisions of subsection (i). parent, the parents, a legal guardian, or the legal guardians of the qualifying pupils. (iii) For purposes of this Section, the term "site" shall have the same meaning as under Section (n) River Edge Redevelopment Zone site 58.2 of the Environmental Protection Act. remediation tax credit. (m) Education expense credit. Beginning (i) For tax years ending on or after with tax years ending after December 31, 1999, a December 31, 2006, a taxpayer shall be allowed a taxpayer who is the custodian of one or more credit against the tax imposed by subsections (a) and qualifying pupils shall be allowed a credit against (b) of this Section for certain amounts paid for the tax imposed by subsections (a) and (b) of this unreimbursed eligible remediation costs, as Section for qualified education expenses incurred on specified in this subsection. For purposes of this behalf of the qualifying pupils. The credit shall be Section, "unreimbursed eligible remediation costs" equal to 25% of qualified education expenses, but in means costs approved by the Illinois Environmental no event may the total credit under this subsection Protection Agency ("Agency") under Section claimed by a family that is the custodian of 58.14a of the Environmental Protection Act that qualifying pupils exceed (i) $500 for tax years were paid in performing environmental remediation
9 As Amended Through Public Act 100-555
at a site within a River Edge Redevelopment Zone (iii) For purposes of this Section, the term for which a No Further Remediation Letter was "site" shall have the same meaning as under Section issued by the Agency and recorded under Section 58.2 of the Environmental Protection Act. 58.10 of the Environmental Protection Act. The (o) For each of taxable years during the credit must be claimed for the taxable year in which Compassionate Use of Medical Cannabis Pilot Agency approval of the eligible remediation costs is Program, a surcharge is imposed on all taxpayers on granted. The credit is not available to any taxpayer income arising from the sale or exchange of capital if the taxpayer or any related party caused or assets, depreciable business property, real property contributed to, in any material respect, a release of used in the trade or business, and Section 197 regulated substances on, in, or under the site that intangibles of an organization registrant under the was identified and addressed by the remedial action Compassionate Use of Medical Cannabis Pilot pursuant to the Site Remediation Program of the Program Act. The amount of the surcharge is equal Environmental Protection Act. Determinations as to to the amount of federal income tax liability for the credit availability for purposes of this Section shall taxable year attributable to those sales and be made consistent with rules adopted by the exchanges. The surcharge imposed does not apply Pollution Control Board pursuant to the Illinois if: Administrative Procedure Act for the administration and enforcement of Section 58.9 of the (1) the medical cannabis cultivation center Environmental Protection Act. For purposes of this registration, medical cannabis dispensary Section, "taxpayer" includes a person whose tax registration, or the property of a registration is attributes the taxpayer has succeeded to under transferred as a result of any of the following: Section 381 of the Internal Revenue Code and (A) bankruptcy, a receivership, or a debt "related party" includes the persons disallowed a adjustment initiated by or against the initial deduction for losses by paragraphs (b), (c), and registration or the substantial owners of the initial (f)(1) of Section 267 of the Internal Revenue Code by virtue of being a related taxpayer, as well as any registration; of its partners. The credit allowed against the tax (B) cancellation, revocation, or termination imposed by subsections (a) and (b) shall be equal to of any registration by the Illinois Department of 25% of the unreimbursed eligible remediation costs Public Health; in excess of $100,000 per site. (C) a determination by the Illinois (ii) A credit allowed under this subsection Department of Public Health that transfer of the that is unused in the year the credit is earned may be registration is in the best interests of Illinois carried forward to each of the 5 taxable years qualifying patients as defined by the Compassionate following the year for which the credit is first earned Use of Medical Cannabis Pilot Program Act; until it is used. This credit shall be applied first to the earliest year for which there is a liability. If there (D) the death of an owner of the equity is a credit under this subsection from more than one interest in a registrant; tax year that is available to offset a liability, the (E) the acquisition of a controlling interest earliest credit arising under this subsection shall be in the stock or substantially all of the assets of a applied first. A credit allowed under this subsection publicly traded company; may be sold to a buyer as part of a sale of all or part of the remediation site for which the credit was (F) a transfer by a parent company to a granted. The purchaser of a remediation site and the wholly owned subsidiary; or tax credit shall succeed to the unused credit and (G) the transfer or sale to or by one person remaining carry-forward period of the seller. To to another person where both persons were initial perfect the transfer, the assignor shall record the owners of the registration when the registration was transfer in the chain of title for the site and provide issued; or written notice to the Director of the Illinois Department of Revenue of the assignor's intent to (2) the cannabis cultivation center sell the remediation site and the amount of the tax registration, medical cannabis dispensary credit to be transferred as a portion of the sale. In no registration, or the controlling interest in a event may a credit be transferred to any taxpayer if registrant's property is transferred in a transaction to the taxpayer or a related party would not be eligible lineal descendants in which no gain or loss is under the provisions of subsection (i). recognized or as a result of a transaction in accordance with Section 351 of the Internal
10 As Amended Through Public Act 100-555
Revenue Code in which no gain or loss is At the request of the Auditor General, each recognized. State agency shall, without delay, make available to the Auditor General or his or her designated Sec. 201.5. State spending limitation and representative any record or information requested tax reduction. and shall provide for examination or copying all (a) If, beginning in State fiscal year 2012 records, accounts, papers, reports, vouchers, and continuing through State fiscal year 2015, State correspondence, books and other documentation in spending for any fiscal year exceeds the State the custody of that agency, including information spending limitation set forth in subsection (b) of this stored in electronic data processing systems, which Section, then the tax rates set forth in subsection (b) is related to or within the scope of a report prepared of Section 201 of this Act shall be reduced, under this Section. The Auditor General shall report according to the procedures set forth in this Section, to the Governor each instance in which a State to 3% of the taxpayer's net income for individuals, agency fails to cooperate promptly and fully with his trusts, and estates and to 4.8% of the taxpayer's net or her office as required by this Section. income for corporations. For all taxable years The Auditor General's report shall not be in following the taxable year in which the rate has been the nature of a post-audit or examination and shall reduced pursuant to this Section, the tax rate set not lead to the issuance of an opinion as that term is forth in subsection (b) of Section 201 of this Act defined in generally accepted government auditing shall be 3% of the taxpayer's net income for standards. individuals, trusts, and estates and 4.8% of the taxpayer's net income for corporations. (d) If the Auditor General reports that State spending has exceeded the State spending limitation (b) The State spending limitation for fiscal set forth in subsection (b) and if the Governor has years 2012 through 2015 shall be as follows: (i) for not been presented with a bill or bills passed by the fiscal year 2012, $36,818,000,000; (ii) for fiscal General Assembly to reduce State spending to a year 2013, $37,554,000,000; (iii) for fiscal year level that does not exceed the State spending 2014, $38,305,000,000; and (iv) for fiscal year limitation within 45 calendar days of receipt of the 2015, $39,072,000,000. Auditor General's report, then the Governor may, (c) Notwithstanding any other provision of for the purpose of reducing State spending to a level law to the contrary, the Auditor General shall that does not exceed the State spending limitation examine each Public Act authorizing State spending set forth in subsection (b), designate amounts to be from State general funds and prepare a report no set aside as a reserve from the amounts appropriated later than 30 days after receiving notification of the from the State general funds for all boards, Public Act from the Secretary of State or 60 days commissions, agencies, institutions, authorities, after the effective date of the Public Act, whichever colleges, universities, and bodies politic and is earlier. The Auditor General shall file the report corporate of the State, but not other constitutional with the Secretary of State and copies with the officers, the legislative or judicial branch, the office Governor, the State Treasurer, the State of the Executive Inspector General, or the Executive Comptroller, the Senate, and the House of Ethics Commission. Such a designation must be Representatives. The report shall indicate: (i) the made within 15 calendar days after the end of that amount of State spending set forth in the applicable 45-day period. If the Governor designates amounts Public Act; (ii) the total amount of State spending to be set aside as a reserve, the Governor shall give authorized by law for the applicable fiscal year as of notice of the designation to the Auditor General, the the date of the report; and (iii) whether State State Treasurer, the State Comptroller, the Senate, spending exceeds the State spending limitation set and the House of Representatives. The amounts forth in subsection (b). The Auditor General may placed in reserves shall not be transferred, obligated, examine multiple Public Acts in one consolidated encumbered, expended, or otherwise committed report, provided that each Public Act is examined unless so authorized by law. Any amount placed in within the time period mandated by this subsection reserves is not State spending and shall not be (c). The Auditor General shall issue reports in considered when calculating the total amount of accordance with this Section through June 30, 2015 State spending. Any Public Act authorizing the use or the effective date of a reduction in the rate of tax of amounts placed in reserve by the Governor is imposed by subsections (a) and (b) of Section 201 considered State spending, unless such Public Act of this Act pursuant to this Section, whichever is authorizes the use of amounts placed in reserves in earlier. response to a fiscal emergency under subsection (g).
11 As Amended Through Public Act 100-555
(e) If the Auditor General reports under rather than the January 1 dates found in that Section, subsection (c) that State spending has exceeded the and the day before the effective date of the rate State spending limitation set forth in subsection (b), reduction rather than the December 31 dates found then the Auditor General shall issue a supplemental in that Section. report no sooner than the 61st day and no later than (4) If the rate applicable to the taxpayer the 65th day after issuing the report pursuant to under subsection (b) of Section 201 (without regard subsection (c). The supplemental report shall: (i) to the provisions of this Section) changes during a summarize details of actions taken by the General portion of the taxable year to which that rate is Assembly and the Governor after the issuance of the applied under paragraphs (1) or (2) of this initial report to reduce State spending, if any, (ii) subsection (f), the tax for that portion of the taxable indicate whether the level of State spending has year for purposes of paragraph (1) or (2) of this changed since the initial report, and (iii) indicate subsection (f) shall be determined as if that portion whether State spending exceeds the State spending of the taxable year were a separate taxable year, limitation. The Auditor General shall file the report following the rules set forth in Section 202.5 of this with the Secretary of State and copies with the Act. If the taxpayer elects to follow the rules set Governor, the State Treasurer, the State forth in subsection (b) of Section 202.5, the taxpayer Comptroller, the Senate, and the House of shall follow the rules set forth in subsection (b) of Representatives. If the supplemental report of the Section 202.5 for all purposes of this Section for that Auditor General provides that State spending taxable year. exceeds the State spending limitation, then the rate of tax imposed by subsections (a) and (b) of Section (g) Notwithstanding the State spending 201 is reduced as provided in this Section beginning limitation set forth in subsection (b) of this Section, on the first day of the first month to occur not less the Governor may declare a fiscal emergency by than 30 days after issuance of the supplemental filing a declaration with the Secretary of State and report. copies with the State Treasurer, the State Comptroller, the Senate, and the House of (f) For any taxable year in which the rates Representatives. The declaration must be limited to of tax have been reduced under this Section, the tax only one State fiscal year, set forth compelling imposed by subsections (a) and (b) of Section 201 reasons for declaring a fiscal emergency, and shall be determined as follows: request a specific dollar amount. Unless, within 10 (1) In the case of an individual, trust, or calendar days of receipt of the Governor's estate, the tax shall be imposed in an amount equal declaration, the State Comptroller or State Treasurer to the sum of (i) the rate applicable to the taxpayer notifies the Senate and the House of Representatives under subsection (b) of Section 201 (without regard that he or she does not concur in the Governor's to the provisions of this Section) times the taxpayer's declaration, State spending authorized by law to net income for any portion of the taxable year prior address the fiscal emergency in an amount no to the effective date of the reduction and (ii) 3% of greater than the dollar amount specified in the the taxpayer's net income for any portion of the declaration shall not be considered "State spending" taxable year on or after the effective date of the for purposes of the State spending limitation. reduction. (h) As used in this Section: (2) In the case of a corporation, the tax shall "State general funds" means the General be imposed in an amount equal to the sum of (i) the Revenue Fund, the Common School Fund, the rate applicable to the taxpayer under subsection (b) General Revenue Common School Special Account of Section 201 (without regard to the provisions of Fund, the Education Assistance Fund, and the this Section) times the taxpayer's net income for any Budget Stabilization Fund. portion of the taxable year prior to the effective date of the reduction and (ii) 4.8% of the taxpayer's net "State spending" means (i) the total amount income for any portion of the taxable year on or after authorized for spending by appropriation or the effective date of the reduction. statutory transfer from the State general funds in the applicable fiscal year, and (ii) any amounts the (3) For any taxpayer for whom the rate has Governor places in reserves in accordance with been reduced under this Section for a portion of a subsection (d) that are subsequently released from taxable year, the taxpayer shall determine the net reserves following authorization by a Public Act. income for each portion of the taxable year For the purpose of this definition, "appropriation" following the rules set forth in Section 202.5 of this means authority to spend money from a State Act, using the effective date of the rate reduction
12 As Amended Through Public Act 100-555
general fund for a specific amount, purpose, and If the taxpayer elects specific accounting time period, including any supplemental under this subsection, there shall be taken into appropriation or continuing appropriation, but does account in computing base income for each of the 2 not include reappropriations from a previous fiscal portions of the taxable year only those items earned, year. For the purpose of this definition, "statutory received, paid, incurred or accrued in each such transfer" means authority to transfer funds from one period. The standard exemption provided by Section State general fund to any other fund in the State 204 shall be divided between the respective periods treasury, but does not include transfers made from in amounts which bear the same ratio to the total one State general fund to another State general fund. exemption allowable under Section 204 (determined without regard to this Section) as the total number "State spending limitation" means the of days in each such period bears to the total number amount described in subsection (b) of this Section of days in the taxable year. The election provided by for the applicable fiscal year. this subsection shall be made in such manner and at Sec. 202. Net Income Defined. such time as the Department may by forms or regulations prescribe, but shall be made not later In general. For purposes of this Act, a than the due date (including any extensions thereof) taxpayer's net income for a taxable year shall be that for the filing of the return for the taxable year, and portion of his base income for such year which is shall be irrevocable. (Source: P.A. 86-18.) allocable to this State under the provisions of Article 3, less the standard exemption allowed by Section Sec. 202.4. Net Income Attributable To 204 and the deduction allowed by Section 207. The Period Prior To July 1, (Source: P.A. 85-731.) 1993 And Net Income Attributable To The Period Sec. 202.3. Net Income Attributable To After June 30, 1993. The Period Prior To July 1, 1989 And Net Income (Section repealed). (Source: P.A. 86-18; 87-17; Attributable To The Period Section repealed by P.A. 88-89.) After June 30, 1989. Sec. 202.5. Net income attributable to the (a) In general. With respect to the taxable period beginning prior to the year of a taxpayer beginning prior to July 1, 1989 first day of a month and ending and ending after June 30, 1989, net income for the after the last day of the period after June 30, 1989 shall be that amount preceding month. which bears the same ratio to the taxpayer's net (a) In general. With respect to the taxable income for the entire taxable year as the number of year of a taxpayer beginning prior to the first day of days in such year after June 30, 1989 bears to the a month and ending after the last day of the total number of days in such year, and the net preceding month, net income for the period after the income for the period prior to July 1, 1989 shall be last day of the preceding month, is that amount that that amount which bears the same ratio to the bears the same ratio to the taxpayer's net income for taxpayer's net income for the entire taxable year as the entire taxable year as the number of days in that the number of days in such year prior to July 1, 1989 taxable year after the last day of the preceding bears to the total number of days in such year. month bears to the total number of days in that (b) Election to attribute income and taxable year, and the net income for the period prior deduction items specifically to the respective to the first day of the month is that amount that bears portions of a taxable year prior to July 1, 1989 and the same ratio to the taxpayer's net income for the after June 30, 1989. In the case of a taxpayer with a entire taxable year as the number of days in that taxable year beginning prior to July 1, 1989 and taxable year prior to the first day of the month bears ending after June 30, 1989, the taxpayer may elect, to the total number of days in that taxable year. in lieu of the procedure established in subsection (a) (b) Election to attribute income and of this Section, to determine net income on a deduction items specifically to the respective specific accounting basis for the 2 portions of his portions of a taxable year prior to the first day of a taxable year: month and ending after the last day of the preceding (i) from the beginning of the taxable year month. In the case of a taxpayer with a taxable year through June 30, 1989, and beginning prior to the first day of a month and ending after the last day of the preceding month, the (ii) from July 1, 1989 through the end of taxpayer may elect, instead of the procedure the taxable year.
13 As Amended Through Public Act 100-555
established in subsection (a) of this Section, to Sec. 203. Base income defined. determine net income on a specific accounting basis (a) Individuals. for the 2 portions of the taxable year: (1) In general. In the case of an individual, (1) from the beginning of the taxable year base income means an amount equal to the through the last day of that apportionment period; taxpayer's adjusted gross income for the taxable and year as modified by paragraph (2). (2) from the first day of the next (2) Modifications. The adjusted gross apportionment period through the end of the taxable income referred to in paragraph (1) shall be year. modified by adding thereto the sum of the following The election provided by this subsection amounts: must be made in the form and manner that the (A) An amount equal to all amounts paid Department requires by rule, and must be made no or accrued to the taxpayer as interest or dividends later than the due date (including any extensions during the taxable year to the extent excluded from thereof) for the filing of the return for the taxable gross income in the computation of adjusted gross year, and is irrevocable. income, except stock dividends of qualified public (c) If the taxpayer elects specific utilities described in Section 305(e) of the Internal accounting under subsection (b): Revenue Code; (1) there shall be taken into account in (B) An amount equal to the amount of tax computing base income for each of the 2 portions of imposed by this Act to the extent deducted from the taxable year only those items earned, received, gross income in the computation of adjusted gross paid, incurred or accrued in each such period; income for the taxable year; (2) for purposes of apportioning business (C) An amount equal to the amount income of the taxpayer, the provisions in Article 3 received during the taxable year as a recovery or shall be applied on the basis of the taxpayer's full refund of real property taxes paid with respect to the taxable year, without regard to this Section; taxpayer's principal residence under the Revenue Act of 1939 and for which a deduction was (3) the exemption provided by Section 204 previously taken under subparagraph (L) of this shall be divided between the respective periods in paragraph (2) prior to July 1, 1991, the retrospective amounts which bear the same ratio to the total application date of Article 4 of Public Act 87-17. In exemption allowable under Section 204 (determined the case of multi-unit or multi-use structures and without regard to this Section) as the total number farm dwellings, the taxes on the taxpayer's principal of days in each period bears to the total number of residence shall be that portion of the total taxes for days in the taxable year; the entire property which is attributable to such (4) for purposes of this subsection, net principal residence; income may not be negative for either of the two (D) An amount equal to the amount of the portions of the taxable year and positive for the capital gain deduction allowable under the Internal other; if net income for one portion of the taxable Revenue Code, to the extent deducted from gross year would be positive and net income for the other income in the computation of adjusted gross portion would otherwise be negative, the net income income; for the entire taxable year shall be attributed to the portion of the taxable year with positive net income (D-5) An amount, to the extent not and the net income for the other portion of the included in adjusted gross income, equal to the taxable year shall be zero; and amount of money withdrawn by the taxpayer in the taxable year from a medical care savings account (5) the net loss carryforward deduction for and the interest earned on the account in the taxable the taxable year under Section 207 may not exceed year of a withdrawal pursuant to subsection (b) of combined net income of both portions of the taxable Section 20 of the Medical Care Savings Account year, and shall be used against the net income of the Act or subsection (b) of Section 20 of the Medical portion of the taxable year from the beginning of the Care Savings Account Act of 2000; taxable year through the last day of the preceding month before any remaining amount is used against (D-10) For taxable years ending after the net income of the latter portion of the taxable December 31, 1997, an amount equal to any eligible year. remediation costs that the individual deducted in
14 As Amended Through Public Act 100-555
computing adjusted gross income and for which the Revenue Code) with respect to the stock of the same individual claims a credit under subsection (l) of person to whom the interest was paid, accrued, or Section 201; incurred. (D-15) For taxable years 2001 and This paragraph shall not apply to the thereafter, an amount equal to the bonus following: depreciation deduction taken on the taxpayer's (i) an item of interest paid, accrued, or federal income tax return for the taxable year under incurred, directly or indirectly, to a person who is subsection (k) of Section 168 of the Internal subject in a foreign country or state, other than a Revenue Code; state which requires mandatory unitary reporting, to (D-16) If the taxpayer sells, transfers, a tax on or measured by net income with respect to abandons, or otherwise disposes of property for such interest; or which the taxpayer was required in any taxable year (ii) an item of interest paid, accrued, or to make an addition modification under incurred, directly or indirectly, to a person if the subparagraph (D-15), then an amount equal to the taxpayer can establish, based on a preponderance of aggregate amount of the deductions taken in all the evidence, both of the following: taxable years under subparagraph (Z) with respect to that property. (a) the person, during the same taxable year, paid, accrued, or incurred, the interest to a If the taxpayer continues to own property person that is not a related member, and through the last day of the last tax year for which the taxpayer may claim a depreciation deduction for (b) the transaction giving rise to the interest federal income tax purposes and for which the expense between the taxpayer and the person did not taxpayer was allowed in any taxable year to make a have as a principal purpose the avoidance of Illinois subtraction modification under subparagraph (Z), income tax, and is paid pursuant to a contract or then an amount equal to that subtraction agreement that reflects an arm's-length interest rate modification. and terms; or The taxpayer is required to make the (iii) the taxpayer can establish, based on addition modification under this subparagraph only clear and convincing evidence, that the interest paid, once with respect to any one piece of property; accrued, or incurred relates to a contract or agreement entered into at arm's-length rates and (D-17) An amount equal to the amount terms and the principal purpose for the payment is otherwise allowed as a deduction in computing base not federal or Illinois tax avoidance; or income for interest paid, accrued, or incurred, directly or indirectly, (i) for taxable years ending on (iv) an item of interest paid, accrued, or or after December 31, 2004, to a foreign person who incurred, directly or indirectly, to a person if the would be a member of the same unitary business taxpayer establishes by clear and convincing group but for the fact that foreign person's business evidence that the adjustments are unreasonable; or activity outside the United States is 80% or more of if the taxpayer and the Director agree in writing to the foreign person's total business activity and (ii) the application or use of an alternative method of for taxable years ending on or after December 31, apportionment under Section 304(f). 2008, to a person who would be a member of the Nothing in this subsection shall preclude same unitary business group but for the fact that the the Director from making any other adjustment person is prohibited under Section 1501(a)(27) from otherwise allowed under Section 404 of this Act for being included in the unitary business group because he or she is ordinarily required to apportion business any tax year beginning after the effective date of this income under different subsections of Section 304. amendment provided such adjustment is made pursuant to regulation adopted by the Department The addition modification required by this and such regulations provide methods and standards subparagraph shall be reduced to the extent that by which the Department will utilize its authority dividends were included in base income of the under Section 404 of this Act; unitary group for the same taxable year and received by the taxpayer or by a member of the taxpayer's (D-18) An amount equal to the amount of unitary business group (including amounts included intangible expenses and costs otherwise allowed as in gross income under Sections 951 through 964 of a deduction in computing base income, and that the Internal Revenue Code and amounts included in were paid, accrued, or incurred, directly or gross income under Section 78 of the Internal indirectly, (i) for taxable years ending on or after
15 As Amended Through Public Act 100-555
December 31, 2004, to a foreign person who would preponderance of the evidence, both of the be a member of the same unitary business group but following: for the fact that the foreign person's business activity (a) the person during the same taxable year outside the United States is 80% or more of that paid, accrued, or incurred, the intangible expense or person's total business activity and (ii) for taxable cost to a person that is not a related member, and years ending on or after December 31, 2008, to a person who would be a member of the same unitary (b) the transaction giving rise to the business group but for the fact that the person is intangible expense or cost between the taxpayer and prohibited under Section 1501(a)(27) from being the person did not have as a principal purpose the included in the unitary business group because he or avoidance of Illinois income tax, and is paid she is ordinarily required to apportion business pursuant to a contract or agreement that reflects income under different subsections of Section 304. arm's-length terms; or The addition modification required by this (iii) any item of intangible expense or cost subparagraph shall be reduced to the extent that dividends were included in base income of the paid, accrued, or incurred, directly or indirectly, unitary group for the same taxable year and received from a transaction with a person if the taxpayer establishes by clear and convincing evidence, that by the taxpayer or by a member of the taxpayer's the adjustments are unreasonable; or if the taxpayer unitary business group (including amounts included and the Director agree in writing to the application in gross income under Sections 951 through 964 of or use of an alternative method of apportionment the Internal Revenue Code and amounts included in gross income under Section 78 of the Internal under Section 304(f); Revenue Code) with respect to the stock of the same Nothing in this subsection shall preclude person to whom the intangible expenses and costs the Director from making any other adjustment were directly or indirectly paid, incurred, or otherwise allowed under Section 404 of this Act for accrued. The preceding sentence does not apply to any tax year beginning after the effective date of this the extent that the same dividends caused a amendment provided such adjustment is made reduction to the addition modification required pursuant to regulation adopted by the Department under Section 203(a)(2)(D-17) of this Act. As used and such regulations provide methods and standards in this subparagraph, the term "intangible expenses by which the Department will utilize its authority and costs" includes (1) expenses, losses, and costs under Section 404 of this Act; for, or related to, the direct or indirect acquisition, use, maintenance or management, ownership, sale, (D-19) For taxable years ending on or after exchange, or any other disposition of intangible December 31, 2008, an amount equal to the amount property; (2) losses incurred, directly or indirectly, of insurance premium expenses and costs otherwise from factoring transactions or discounting allowed as a deduction in computing base income, transactions; (3) royalty, patent, technical, and and that were paid, accrued, or incurred, directly or copyright fees; (4) licensing fees; and (5) other indirectly, to a person who would be a member of similar expenses and costs. For purposes of this the same unitary business group but for the fact that subparagraph, "intangible property" includes the person is prohibited under Section 1501(a)(27) patents, patent applications, trade names, from being included in the unitary business group trademarks, service marks, copyrights, mask works, because he or she is ordinarily required to apportion trade secrets, and similar types of intangible assets. business income under different subsections of Section 304. The addition modification required by This paragraph shall not apply to the this subparagraph shall be reduced to the extent that following: dividends were included in base income of the unitary group for the same taxable year and received (i) any item of intangible expenses or costs by the taxpayer or by a member of the taxpayer's paid, accrued, or incurred, directly or indirectly, unitary business group (including amounts included from a transaction with a person who is subject in a in gross income under Sections 951 through 964 of foreign country or state, other than a state which requires mandatory unitary reporting, to a tax on or the Internal Revenue Code and amounts included in measured by net income with respect to such item; gross income under Section 78 of the Internal Revenue Code) with respect to the stock of the same or person to whom the premiums and costs were (ii) any item of intangible expense or cost directly or indirectly paid, incurred, or accrued. The paid, accrued, or incurred, directly or indirectly, if preceding sentence does not apply to the extent that the taxpayer can establish, based on a the same dividends caused a reduction to the
16 As Amended Through Public Act 100-555
addition modification required under Section withdrawal or refund of moneys from a qualified 203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this tuition program under Section 529 of the Internal Act. Revenue Code administered by the State that is not used for qualified expenses at an eligible education (D-20) For taxable years beginning on or institution, an amount equal to the contribution after January 1, 2002 and ending on or before component of the nonqualified withdrawal or refund December 31, 2006, in the case of a distribution that was previously deducted from base income from a qualified tuition program under Section 529 under subsection (a)(2)(y) of this Section, provided of the Internal Revenue Code, other than (i) a that the withdrawal or refund did not result from the distribution from a College Savings Pool created beneficiary's death or disability; under Section 16.5 of the State Treasurer Act or (ii) a distribution from the Illinois Prepaid Tuition Trust (D-23) An amount equal to the credit Fund, an amount equal to the amount excluded from allowable to the taxpayer under Section 218(a) of gross income under Section 529(c)(3)(B). For this Act, determined without regard to Section taxable years beginning on or after January 1, 2007, 218(c) of this Act; in the case of a distribution from a qualified tuition (D-24) For taxable years ending on or after program under Section 529 of the Internal Revenue December 31, 2017, an amount equal to the Code, other than (i) a distribution from a College deduction allowed under Section 199 of the Internal Savings Pool created under Section 16.5 of the State Revenue Code for the taxable year; Treasurer Act, (ii) a distribution from the Illinois Prepaid Tuition Trust Fund, or (iii) a distribution and by deducting from the total so from a qualified tuition program under Section 529 obtained the sum of the following amounts: of the Internal Revenue Code that (I) adopts and (E) For taxable years ending before determines that its offering materials comply with December 31, 2001, any amount included in such the College Savings Plans Network's disclosure total in respect of any compensation (including but principles and (II) has made reasonable efforts to inform in-state residents of the existence of in-state not limited to any compensation paid or accrued to qualified tuition programs by informing Illinois a serviceman while a prisoner of war or missing in action) paid to a resident by reason of being on residents directly and, where applicable, to inform active duty in the Armed Forces of the United States financial intermediaries distributing the program to and in respect of any compensation paid or accrued inform in-state residents of the existence of in-state to a resident who as a governmental employee was qualified tuition programs at least annually, an amount equal to the amount excluded from gross a prisoner of war or missing in action, and in respect income under Section 529(c)(3)(B). of any compensation paid to a resident in 1971 or thereafter for annual training performed pursuant to For the purposes of this subparagraph (D- Sections 502 and 503, Title 32, United States Code 20), a qualified tuition program has made reasonable as a member of the Illinois National Guard or, efforts if it makes disclosures (which may use the beginning with taxable years ending on or after term "in-state program" or "in-state plan" and need December 31, 2007, the National Guard of any other not specifically refer to Illinois or its qualified state. For taxable years ending on or after December programs by name) (i) directly to prospective 31, 2001, any amount included in such total in participants in its offering materials or makes a respect of any compensation (including but not public disclosure, such as a website posting; and (ii) limited to any compensation paid or accrued to a where applicable, to intermediaries selling the out- serviceman while a prisoner of war or missing in of-state program in the same manner that the out-of- action) paid to a resident by reason of being a state program distributes its offering materials; member of any component of the Armed Forces of the United States and in respect of any (D-21) For taxable years beginning on or compensation paid or accrued to a resident who as a after January 1, 2007, in the case of transfer of governmental employee was a prisoner of war or moneys from a qualified tuition program under missing in action, and in respect of any Section 529 of the Internal Revenue Code that is compensation paid to a resident in 2001 or thereafter administered by the State to an out-of-state program, by reason of being a member of the Illinois National an amount equal to the amount of moneys Guard or, beginning with taxable years ending on or previously deducted from base income under after December 31, 2007, the National Guard of any subsection (a)(2)(Y) of this Section; other state. The provisions of this subparagraph (E) (D-22) For taxable years beginning on or are exempt from the provisions of Section 250; after January 1, 2009, in the case of a nonqualified
17 As Amended Through Public Act 100-555
(F) An amount equal to all amounts allocable to interest and disallowed as deductions by included in such total pursuant to the provisions of Section 265(1) of the Internal Revenue Code; and Sections 402(a), 402(c), 403(a), 403(b), 406(a), (ii) for taxable years ending on or after August 13, 407(a), and 408 of the Internal Revenue Code, or 1999, Sections 171(a)(2), 265, 280C, and included in such total as distributions under the 832(b)(5)(B)(i) of the Internal Revenue Code, plus, provisions of any retirement or disability plan for for taxable years ending on or after December 31, employees of any governmental agency or unit, or 2011, Section 45G(e)(3) of the Internal Revenue retirement payments to retired partners, which Code and, for taxable years ending on or after payments are excluded in computing net earnings December 31, 2008, any amount included in gross from self employment by Section 1402 of the income under Section 87 of the Internal Revenue Internal Revenue Code and regulations adopted Code; the provisions of this subparagraph are pursuant thereto; exempt from the provisions of Section 250; (G) The valuation limitation amount; (N) An amount equal to all amounts included in such total which are exempt from (H) An amount equal to the amount of any taxation by this State either by reason of its statutes tax imposed by this Act which was refunded to the or Constitution or by reason of the Constitution, taxpayer and included in such total for the taxable treaties or statutes of the United States; provided year; that, in the case of any statute of this State that (I) An amount equal to all amounts exempts income derived from bonds or other included in such total pursuant to the provisions of obligations from the tax imposed under this Act, the Section 111 of the Internal Revenue Code as a amount exempted shall be the interest net of bond recovery of items previously deducted from premium amortization; adjusted gross income in the computation of taxable (O) An amount equal to any contribution income; made to a job training project established pursuant (J) An amount equal to those dividends to the Tax Increment Allocation Redevelopment included in such total which were paid by a Act; corporation which conducts business operations in a (P) An amount equal to the amount of the River Edge Redevelopment Zone or zones created deduction used to compute the federal income tax under the River Edge Redevelopment Zone Act, and credit for restoration of substantial amounts held conducts substantially all of its operations in a River under claim of right for the taxable year pursuant to Edge Redevelopment Zone or zones. This Section 1341 of the Internal Revenue Code or of any subparagraph (J) is exempt from the provisions of itemized deduction taken from adjusted gross Section 250; income in the computation of taxable income for (K) An amount equal to those dividends restoration of substantial amounts held under claim included in such total that were paid by a of right for the taxable year; corporation that conducts business operations in a (Q) An amount equal to any amounts federally designated Foreign Trade Zone or Sub- included in such total, received by the taxpayer as Zone and that is designated a High Impact Business an acceleration in the payment of life, endowment located in Illinois; provided that dividends eligible or annuity benefits in advance of the time they for the deduction provided in subparagraph (J) of would otherwise be payable as an indemnity for a paragraph (2) of this subsection shall not be eligible terminal illness; for the deduction provided under this subparagraph (K); (R) An amount equal to the amount of any federal or State bonus paid to veterans of the Persian (L) For taxable years ending after Gulf War; December 31, 1983, an amount equal to all social security benefits and railroad retirement benefits (S) An amount, to the extent included in included in such total pursuant to Sections 72(r) and adjusted gross income, equal to the amount of a 86 of the Internal Revenue Code; contribution made in the taxable year on behalf of the taxpayer to a medical care savings account (M) With the exception of any amounts established under the Medical Care Savings subtracted under subparagraph (N), an amount equal Account Act or the Medical Care Savings Account to the sum of all amounts disallowed as deductions Act of 2000 to the extent the contribution is accepted by (i) Sections 171(a) (2), and 265(2) of the Internal by the account administrator as provided in that Act; Revenue Code, and all amounts of expenses
18 As Amended Through Public Act 100-555
(T) An amount, to the extent included in taxpayer because of his or her status as a victim of adjusted gross income, equal to the amount of persecution for racial or religious reasons by Nazi interest earned in the taxable year on a medical care Germany or any other Axis regime or as an heir of savings account established under the Medical Care the victim and (ii) items of income, to the extent Savings Account Act or the Medical Care Savings includible in gross income for federal income tax Account Act of 2000 on behalf of the taxpayer, other purposes, attributable to, derived from or in any way than interest added pursuant to item (D-5) of this related to assets stolen from, hidden from, or paragraph (2); otherwise lost to a victim of persecution for racial or religious reasons by Nazi Germany or any other (U) For one taxable year beginning on or Axis regime immediately prior to, during, and after January 1, 1994, an amount equal to the total immediately after World War II, including, but not amount of tax imposed and paid under subsections limited to, interest on the proceeds receivable as (a) and (b) of Section 201 of this Act on grant insurance under policies issued to a victim of amounts received by the taxpayer under the Nursing persecution for racial or religious reasons by Nazi Home Grant Assistance Act during the taxpayer's Germany or any other Axis regime by European taxable years 1992 and 1993; insurance companies immediately prior to and (V) Beginning with tax years ending on or during World War II; provided, however, this after December 31, 1995 and ending with tax years subtraction from federal adjusted gross income does ending on or before December 31, 2004, an amount not apply to assets acquired with such assets or with equal to the amount paid by a taxpayer who is a self- the proceeds from the sale of such assets; provided, employed taxpayer, a partner of a partnership, or a further, this paragraph shall only apply to a taxpayer shareholder in a Subchapter S corporation for health who was the first recipient of such assets after their insurance or long-term care insurance for that recovery and who is a victim of persecution for taxpayer or that taxpayer's spouse or dependents, to racial or religious reasons by Nazi Germany or any the extent that the amount paid for that health other Axis regime or as an heir of the victim. The insurance or long-term care insurance may be amount of and the eligibility for any public deducted under Section 213 of the Internal Revenue assistance, benefit, or similar entitlement is not Code, has not been deducted on the federal income affected by the inclusion of items (i) and (ii) of this tax return of the taxpayer, and does not exceed the paragraph in gross income for federal income tax taxable income attributable to that taxpayer's purposes. This paragraph is exempt from the income, self-employment income, or Subchapter S provisions of Section 250; corporation income; except that no deduction shall (Y) For taxable years beginning on or after be allowed under this item (V) if the taxpayer is January 1, 2002 and ending on or before December eligible to participate in any health insurance or 31, 2004, moneys contributed in the taxable year to long-term care insurance plan of an employer of the a College Savings Pool account under Section 16.5 taxpayer or the taxpayer's spouse. The amount of the of the State Treasurer Act, except that amounts health insurance and long-term care insurance excluded from gross income under Section subtracted under this item (V) shall be determined 529(c)(3)(C)(i) of the Internal Revenue Code shall by multiplying total health insurance and long-term not be considered moneys contributed under this care insurance premiums paid by the taxpayer times subparagraph (Y). For taxable years beginning on or a number that represents the fractional percentage of after January 1, 2005, a maximum of $10,000 eligible medical expenses under Section 213 of the contributed in the taxable year to (i) a College Internal Revenue Code of 1986 not actually Savings Pool account under Section 16.5 of the State deducted on the taxpayer's federal income tax Treasurer Act or (ii) the Illinois Prepaid Tuition return; Trust Fund, except that amounts excluded from (W) For taxable years beginning on or after gross income under Section 529(c)(3)(C)(i) of the January 1, 1998, all amounts included in the Internal Revenue Code shall not be considered taxpayer's federal gross income in the taxable year moneys contributed under this subparagraph (Y). from amounts converted from a regular IRA to a For purposes of this subparagraph, contributions Roth IRA. This paragraph is exempt from the made by an employer on behalf of an employee, or provisions of Section 250; matching contributions made by an employee, shall be treated as made by the employee. This (X) For taxable year 1999 and thereafter, subparagraph (Y) is exempt from the provisions of an amount equal to the amount of any (i) Section 250; distributions, to the extent includible in gross income for federal income tax purposes, made to the
19 As Amended Through Public Act 100-555
(Z) For taxable years 2001 and thereafter, The taxpayer is allowed to take the for the taxable year in which the bonus depreciation deduction under this subparagraph only once with deduction is taken on the taxpayer's federal income respect to any one piece of property. tax return under subsection (k) of Section 168 of the This subparagraph (AA) is exempt from Internal Revenue Code and for each applicable the provisions of Section 250; taxable year thereafter, an amount equal to "x", where: (BB) Any amount included in adjusted gross income, other than salary, received by a driver (1) "y" equals the amount of the in a ridesharing arrangement using a motor vehicle; depreciation deduction taken for the taxable year on the taxpayer's federal income tax return on property (CC) The amount of (i) any interest income for which the bonus depreciation deduction was (net of the deductions allocable thereto) taken into taken in any year under subsection (k) of Section account for the taxable year with respect to a 168 of the Internal Revenue Code, but not including transaction with a taxpayer that is required to make the bonus depreciation deduction; an addition modification with respect to such transaction under Section 203(a)(2)(D-17), (2) for taxable years ending on or before 203(b)(2)(E-12), 203(c)(2)(G-12), or 203(d)(2)(D- December 31, 2005, "x" equals "y" multiplied by 30 7), but not to exceed the amount of that addition and then divided by 70 (or "y" multiplied by 0.429); modification, and (ii) any income from intangible and property (net of the deductions allocable thereto) (3) for taxable years ending after taken into account for the taxable year with respect December 31, 2005: to a transaction with a taxpayer that is required to make an addition modification with respect to such (i) for property on which a bonus transaction under Section 203(a)(2)(D-18), depreciation deduction of 30% of the adjusted basis 203(b)(2)(E-13), 203(c)(2)(G-13), or 203(d)(2)(D- was taken, "x" equals "y" multiplied by 30 and then 8), but not to exceed the amount of that addition divided by 70 (or "y" multiplied by 0.429); and modification. This subparagraph (CC) is exempt (ii) for property on which a bonus from the provisions of Section 250; depreciation deduction of 50% of the adjusted basis (DD) An amount equal to the interest was taken, "x" equals "y" multiplied by 1.0. income taken into account for the taxable year (net The aggregate amount deducted under this of the deductions allocable thereto) with respect to subparagraph in all taxable years for any one piece transactions with (i) a foreign person who would be of property may not exceed the amount of the bonus a member of the taxpayer's unitary business group depreciation deduction taken on that property on the but for the fact that the foreign person's business taxpayer's federal income tax return under activity outside the United States is 80% or more of subsection (k) of Section 168 of the Internal that person's total business activity and (ii) for Revenue Code. This subparagraph (Z) is exempt taxable years ending on or after December 31, 2008, from the provisions of Section 250; to a person who would be a member of the same unitary business group but for the fact that the (AA) If the taxpayer sells, transfers, person is prohibited under Section 1501(a)(27) from abandons, or otherwise disposes of property for being included in the unitary business group because which the taxpayer was required in any taxable year he or she is ordinarily required to apportion business to make an addition modification under income under different subsections of Section 304, subparagraph (D-15), then an amount equal to that but not to exceed the addition modification required addition modification. to be made for the same taxable year under Section If the taxpayer continues to own property 203(a)(2)(D-17) for interest paid, accrued, or through the last day of the last tax year for which the incurred, directly or indirectly, to the same person. taxpayer may claim a depreciation deduction for This subparagraph (DD) is exempt from the federal income tax purposes and for which the provisions of Section 250; taxpayer was required in any taxable year to make (EE) An amount equal to the income from an addition modification under subparagraph (D- intangible property taken into account for the 15), then an amount equal to that addition taxable year (net of the deductions allocable thereto) modification. with respect to transactions with (i) a foreign person who would be a member of the taxpayer's unitary business group but for the fact that the foreign
20 As Amended Through Public Act 100-555
person's business activity outside the United States (B) An amount equal to the amount of tax is 80% or more of that person's total business imposed by this Act to the extent deducted from activity and (ii) for taxable years ending on or after gross income in the computation of taxable income December 31, 2008, to a person who would be a for the taxable year; member of the same unitary business group but for (C) In the case of a regulated investment the fact that the person is prohibited under Section company, an amount equal to the excess of (i) the 1501(a)(27) from being included in the unitary net long-term capital gain for the taxable year, over business group because he or she is ordinarily (ii) the amount of the capital gain dividends required to apportion business income under designated as such in accordance with Section different subsections of Section 304, but not to 852(b)(3)(C) of the Internal Revenue Code and any exceed the addition modification required to be amount designated under Section 852(b)(3)(D) of made for the same taxable year under Section the Internal Revenue Code, attributable to the 203(a)(2)(D-18) for intangible expenses and costs taxable year (this amendatory Act of 1995 (Public paid, accrued, or incurred, directly or indirectly, to Act 89-89) is declarative of existing law and is not a the same foreign person. This subparagraph (EE) is new enactment); exempt from the provisions of Section 250; (D) The amount of any net operating loss (FF) An amount equal to any amount deduction taken in arriving at taxable income, other awarded to the taxpayer during the taxable year by than a net operating loss carried forward from a the Court of Claims under subsection (c) of Section taxable year ending prior to December 31, 1986; 8 of the Court of Claims Act for time unjustly served in a State prison. This subparagraph (FF) is exempt (E) For taxable years in which a net from the provisions of Section 250; and . operating loss carryback or carryforward from a taxable year ending prior to December 31, 1986 is (GG) For taxable years ending on or after an element of taxable income under paragraph (1) of December 31, 2011, in the case of a taxpayer who subsection (e) or subparagraph (E) of paragraph (2) was required to add back any insurance premiums of subsection (e), the amount by which addition under Section 203(a)(2)(D-19), such taxpayer may modifications other than those provided by this elect to subtract that part of a reimbursement subparagraph (E) exceeded subtraction received from the insurance company equal to the modifications in such earlier taxable year, with the amount of the expense or loss (including expenses following limitations applied in the order that they incurred by the insurance company) that would have are listed: been taken into account as a deduction for federal income tax purposes if the expense or loss had been (i) the addition modification relating to the uninsured. If a taxpayer makes the election provided net operating loss carried back or forward to the for by this subparagraph (GG), the insurer to which taxable year from any taxable year ending prior to the premiums were paid must add back to income December 31, 1986 shall be reduced by the amount the amount subtracted by the taxpayer pursuant to of addition modification under this subparagraph this subparagraph (GG). This subparagraph (GG) is (E) which related to that net operating loss and exempt from the provisions of Section 250. which was taken into account in calculating the base income of an earlier taxable year, and (b) Corporations. (ii) the addition modification relating to the (1) In general. In the case of a corporation, net operating loss carried back or forward to the base income means an amount equal to the taxable year from any taxable year ending prior to taxpayer's taxable income for the taxable year as December 31, 1986 shall not exceed the amount of modified by paragraph (2). such carryback or carryforward; (2) Modifications. The taxable income For taxable years in which there is a net referred to in paragraph (1) shall be modified by operating loss carryback or carryforward from more adding thereto the sum of the following amounts: than one other taxable year ending prior to (A) An amount equal to all amounts paid December 31, 1986, the addition modification or accrued to the taxpayer as interest and all provided in this subparagraph (E) shall be the sum distributions received from regulated investment of the amounts computed independently under the companies during the taxable year to the extent preceding provisions of this subparagraph (E) for excluded from gross income in the computation of each such taxable year; taxable income;
21 As Amended Through Public Act 100-555
(E-5) For taxable years ending after in gross income pursuant to Sections 951 through December 31, 1997, an amount equal to any eligible 964 of the Internal Revenue Code and amounts remediation costs that the corporation deducted in included in gross income under Section 78 of the computing adjusted gross income and for which the Internal Revenue Code) with respect to the stock of corporation claims a credit under subsection (l) of the same person to whom the interest was paid, Section 201; accrued, or incurred. (E-10) For taxable years 2001 and This paragraph shall not apply to the thereafter, an amount equal to the bonus following: depreciation deduction taken on the taxpayer's (i) an item of interest paid, accrued, or federal income tax return for the taxable year under incurred, directly or indirectly, to a person who is subsection (k) of Section 168 of the Internal subject in a foreign country or state, other than a Revenue Code; state which requires mandatory unitary reporting, to (E-11) If the taxpayer sells, transfers, a tax on or measured by net income with respect to abandons, or otherwise disposes of property for such interest; or which the taxpayer was required in any taxable year (ii) an item of interest paid, accrued, or to make an addition modification under incurred, directly or indirectly, to a person if the subparagraph (E-10), then an amount equal to the taxpayer can establish, based on a preponderance of aggregate amount of the deductions taken in all the evidence, both of the following: taxable years under subparagraph (T) with respect to that property. (a) the person, during the same taxable year, paid, accrued, or incurred, the interest to a If the taxpayer continues to own property person that is not a related member, and through the last day of the last tax year for which the taxpayer may claim a depreciation deduction for (b) the transaction giving rise to the interest federal income tax purposes and for which the expense between the taxpayer and the person did not taxpayer was allowed in any taxable year to make a have as a principal purpose the avoidance of Illinois subtraction modification under subparagraph (T), income tax, and is paid pursuant to a contract or then an amount equal to that subtraction agreement that reflects an arm's-length interest rate modification. and terms; or The taxpayer is required to make the (iii) the taxpayer can establish, based on addition modification under this subparagraph only clear and convincing evidence, that the interest paid, once with respect to any one piece of property; accrued, or incurred relates to a contract or agreement entered into at arm's-length rates and (E-12) An amount equal to the amount terms and the principal purpose for the payment is otherwise allowed as a deduction in computing base not federal or Illinois tax avoidance; or income for interest paid, accrued, or incurred, directly or indirectly, (i) for taxable years ending on (iv) an item of interest paid, accrued, or or after December 31, 2004, to a foreign person who incurred, directly or indirectly, to a person if the would be a member of the same unitary business taxpayer establishes by clear and convincing group but for the fact the foreign person's business evidence that the adjustments are unreasonable; or activity outside the United States is 80% or more of if the taxpayer and the Director agree in writing to the foreign person's total business activity and (ii) the application or use of an alternative method of for taxable years ending on or after December 31, apportionment under Section 304(f). 2008, to a person who would be a member of the same unitary business group but for the fact that the Nothing in this subsection shall preclude person is prohibited under Section 1501(a)(27) from the Director from making any other adjustment otherwise allowed under Section 404 of this Act for being included in the unitary business group because any tax year beginning after the effective date of this he or she is ordinarily required to apportion business amendment provided such adjustment is made income under different subsections of Section 304. pursuant to regulation adopted by the Department The addition modification required by this subparagraph shall be reduced to the extent that and such regulations provide methods and standards dividends were included in base income of the by which the Department will utilize its authority unitary group for the same taxable year and received under Section 404 of this Act; by the taxpayer or by a member of the taxpayer's (E-13) An amount equal to the amount of unitary business group (including amounts included intangible expenses and costs otherwise allowed as
22 As Amended Through Public Act 100-555
a deduction in computing base income, and that (ii) any item of intangible expense or cost were paid, accrued, or incurred, directly or paid, accrued, or incurred, directly or indirectly, if indirectly, (i) for taxable years ending on or after the taxpayer can establish, based on a December 31, 2004, to a foreign person who would preponderance of the evidence, both of the be a member of the same unitary business group but following: for the fact that the foreign person's business activity (a) the person during the same taxable year outside the United States is 80% or more of that paid, accrued, or incurred, the intangible expense or person's total business activity and (ii) for taxable cost to a person that is not a related member, and years ending on or after December 31, 2008, to a person who would be a member of the same unitary (b) the transaction giving rise to the business group but for the fact that the person is intangible expense or cost between the taxpayer and prohibited under Section 1501(a)(27) from being the person did not have as a principal purpose the included in the unitary business group because he or avoidance of Illinois income tax, and is paid she is ordinarily required to apportion business pursuant to a contract or agreement that reflects income under different subsections of Section 304. arm's-length terms; or The addition modification required by this (iii) any item of intangible expense or cost subparagraph shall be reduced to the extent that paid, accrued, or incurred, directly or indirectly, dividends were included in base income of the from a transaction with a person if the taxpayer unitary group for the same taxable year and received establishes by clear and convincing evidence, that by the taxpayer or by a member of the taxpayer's unitary business group (including amounts included the adjustments are unreasonable; or if the taxpayer in gross income pursuant to Sections 951 through and the Director agree in writing to the application or use of an alternative method of apportionment 964 of the Internal Revenue Code and amounts under Section 304(f); included in gross income under Section 78 of the Internal Revenue Code) with respect to the stock of Nothing in this subsection shall preclude the same person to whom the intangible expenses the Director from making any other adjustment and costs were directly or indirectly paid, incurred, otherwise allowed under Section 404 of this Act for or accrued. The preceding sentence shall not apply any tax year beginning after the effective date of this to the extent that the same dividends caused a amendment provided such adjustment is made reduction to the addition modification required pursuant to regulation adopted by the Department under Section 203(b)(2)(E-12) of this Act. As used and such regulations provide methods and standards in this subparagraph, the term "intangible expenses by which the Department will utilize its authority and costs" includes (1) expenses, losses, and costs under Section 404 of this Act; for, or related to, the direct or indirect acquisition, use, maintenance or management, ownership, sale, (E-14) For taxable years ending on or after exchange, or any other disposition of intangible December 31, 2008, an amount equal to the amount property; (2) losses incurred, directly or indirectly, of insurance premium expenses and costs otherwise from factoring transactions or discounting allowed as a deduction in computing base income, transactions; (3) royalty, patent, technical, and and that were paid, accrued, or incurred, directly or copyright fees; (4) licensing fees; and (5) other indirectly, to a person who would be a member of similar expenses and costs. For purposes of this the same unitary business group but for the fact that subparagraph, "intangible property" includes the person is prohibited under Section 1501(a)(27) patents, patent applications, trade names, from being included in the unitary business group trademarks, service marks, copyrights, mask works, because he or she is ordinarily required to apportion trade secrets, and similar types of intangible assets. business income under different subsections of Section 304. The addition modification required by This paragraph shall not apply to the this subparagraph shall be reduced to the extent that following: dividends were included in base income of the unitary group for the same taxable year and received (i) any item of intangible expenses or costs paid, accrued, or incurred, directly or indirectly, by the taxpayer or by a member of the taxpayer's from a transaction with a person who is subject in a unitary business group (including amounts included in gross income under Sections 951 through 964 of foreign country or state, other than a state which the Internal Revenue Code and amounts included in requires mandatory unitary reporting, to a tax on or gross income under Section 78 of the Internal measured by net income with respect to such item; Revenue Code) with respect to the stock of the same or person to whom the premiums and costs were
23 As Amended Through Public Act 100-555
directly or indirectly paid, incurred, or accrued. The policyholders' share of tax-exempt interest of a life preceding sentence does not apply to the extent that insurance company under Section 807(a)(2)(B) of the same dividends caused a reduction to the the Internal Revenue Code (in the case of a life addition modification required under Section insurance company with gross income from a 203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this decrease in reserves for the tax year) or Section Act; 807(b)(1)(B) of the Internal Revenue Code (in the case of a life insurance company allowed a (E-15) For taxable years beginning after deduction for an increase in reserves for the tax December 31, 2008, any deduction for dividends year); the provisions of this subparagraph are paid by a captive real estate investment trust that is exempt from the provisions of Section 250; allowed to a real estate investment trust under Section 857(b)(2)(B) of the Internal Revenue Code (J) An amount equal to all amounts for dividends paid; included in such total which are exempt from taxation by this State either by reason of its statutes (E-16) An amount equal to the credit or Constitution or by reason of the Constitution, allowable to the taxpayer under Section 218(a) of treaties or statutes of the United States; provided this Act, determined without regard to Section that, in the case of any statute of this State that 218(c) of this Act; exempts income derived from bonds or other (E-17) For taxable years ending on or after obligations from the tax imposed under this Act, the December 31, 2017, an amount equal to the amount exempted shall be the interest net of bond deduction allowed under Section 199 of the Internal premium amortization; Revenue Code for the taxable year; (K) An amount equal to those dividends and by deducting from the total so included in such total which were paid by a obtained the sum of the following amounts: corporation which conducts business operations in a River Edge Redevelopment Zone or zones created (F) An amount equal to the amount of any under the River Edge Redevelopment Zone Act and tax imposed by this Act which was refunded to the conducts substantially all of its operations in a River taxpayer and included in such total for the taxable Edge Redevelopment Zone or zones. This year; subparagraph (K) is exempt from the provisions of (G) An amount equal to any amount Section 250; included in such total under Section 78 of the (L) An amount equal to those dividends Internal Revenue Code; included in such total that were paid by a (H) In the case of a regulated investment corporation that conducts business operations in a company, an amount equal to the amount of exempt federally designated Foreign Trade Zone or Sub- interest dividends as defined in subsection (b) (5) of Zone and that is designated a High Impact Business Section 852 of the Internal Revenue Code, paid to located in Illinois; provided that dividends eligible shareholders for the taxable year; for the deduction provided in subparagraph (K) of paragraph 2 of this subsection shall not be eligible (I) With the exception of any amounts for the deduction provided under this subparagraph subtracted under subparagraph (J), an amount equal (L); to the sum of all amounts disallowed as deductions by (i) Sections 171(a) (2), and 265(a)(2) and (M) For any taxpayer that is a financial amounts disallowed as interest expense by Section organization within the meaning of Section 304(c) 291(a)(3) of the Internal Revenue Code, and all of this Act, an amount included in such total as amounts of expenses allocable to interest and interest income from a loan or loans made by such disallowed as deductions by Section 265(a)(1) of the taxpayer to a borrower, to the extent that such a loan Internal Revenue Code; and (ii) for taxable years is secured by property which is eligible for the River ending on or after August 13, 1999, Sections Edge Redevelopment Zone Investment Credit. To 171(a)(2), 265, 280C, 291(a)(3), and determine the portion of a loan or loans that is 832(b)(5)(B)(i) of the Internal Revenue Code, plus, secured by property eligible for a Section 201(f) for tax years ending on or after December 31, 2011, investment credit to the borrower, the entire amounts disallowed as deductions by Section principal amount of the loan or loans between the 45G(e)(3) of the Internal Revenue Code and, for taxpayer and the borrower should be divided into the taxable years ending on or after December 31, 2008, basis of the Section 201(f) investment credit any amount included in gross income under Section property which secures the loan or loans, using for 87 of the Internal Revenue Code and the this purpose the original basis of such property on
24 As Amended Through Public Act 100-555
the date that it was placed in service in the River from a corporation that is not created or organized Edge Redevelopment Zone. The subtraction under the laws of the United States or any state or modification available to taxpayer in any year under political subdivision thereof, including, for taxable this subsection shall be that portion of the total years ending on or after December 31, 1988, interest paid by the borrower with respect to such dividends received or deemed received or paid or loan attributable to the eligible property as deemed paid under Sections 951 through 964 of the calculated under the previous sentence. This Internal Revenue Code, exceed the amount of the subparagraph (M) is exempt from the provisions of modification provided under subparagraph (G) of Section 250; paragraph (2) of this subsection (b) which is related to such dividends, and including, for taxable years (M-1) For any taxpayer that is a financial ending on or after December 31, 2008, dividends organization within the meaning of Section 304(c) received from a captive real estate investment trust; of this Act, an amount included in such total as plus (ii) 100% of the amount by which dividends, interest income from a loan or loans made by such included in taxable income and received, including, taxpayer to a borrower, to the extent that such a loan for taxable years ending on or after December 31, is secured by property which is eligible for the High 1988, dividends received or deemed received or Impact Business Investment Credit. To determine paid or deemed paid under Sections 951 through 965 the portion of a loan or loans that is secured by of the Internal Revenue Code and including, for property eligible for a Section 201(h) investment taxable years ending on or after December 31, 2008, credit to the borrower, the entire principal amount of dividends received from a captive real estate the loan or loans between the taxpayer and the investment trust, from any such corporation borrower should be divided into the basis of the specified in clause (i) that would but for the Section 201(h) investment credit property which provisions of Section 1504 (b) (3) of the Internal secures the loan or loans, using for this purpose the Revenue Code be treated as a member of the original basis of such property on the date that it was affiliated group which includes the dividend placed in service in a federally designated Foreign recipient, exceed the amount of the modification Trade Zone or Sub-Zone located in Illinois. No provided under subparagraph (G) of paragraph (2) taxpayer that is eligible for the deduction provided of this subsection (b) which is related to such in subparagraph (M) of paragraph (2) of this dividends. This subparagraph (O) is exempt from subsection shall be eligible for the deduction the provisions of Section 250 of this Act; provided under this subparagraph (M-1). The subtraction modification available to taxpayers in (P) An amount equal to any contribution any year under this subsection shall be that portion made to a job training project established pursuant of the total interest paid by the borrower with respect to the Tax Increment Allocation Redevelopment to such loan attributable to the eligible property as Act; calculated under the previous sentence; (Q) An amount equal to the amount of the (N) Two times any contribution made deduction used to compute the federal income tax during the taxable year to a designated zone credit for restoration of substantial amounts held organization to the extent that the contribution (i) under claim of right for the taxable year pursuant to qualifies as a charitable contribution under Section 1341 of the Internal Revenue Code; subsection (c) of Section 170 of the Internal (R) On and after July 20, 1999, in the case Revenue Code and (ii) must, by its terms, be used of an attorney-in-fact with respect to whom an for a project approved by the Department of interinsurer or a reciprocal insurer has made the Commerce and Economic Opportunity under election under Section 835 of the Internal Revenue Section 11 of the Illinois Enterprise Zone Act or Code, 26 U.S.C. 835, an amount equal to the excess, under Section 10-10 of the River Edge if any, of the amounts paid or incurred by that Redevelopment Zone Act. This subparagraph (N) is interinsurer or reciprocal insurer in the taxable year exempt from the provisions of Section 250; to the attorney-in-fact over the deduction allowed to (O) An amount equal to: (i) 85% for that interinsurer or reciprocal insurer with respect to taxable years ending on or before December 31, the attorney-in-fact under Section 835(b) of the 1992, or, a percentage equal to the percentage Internal Revenue Code for the taxable year; the allowable under Section 243(a)(1) of the Internal provisions of this subparagraph are exempt from the Revenue Code of 1986 for taxable years ending after provisions of Section 250; December 31, 1992, of the amount by which (S) For taxable years ending on or after dividends included in taxable income and received December 31, 1997, in the case of a Subchapter S
25 As Amended Through Public Act 100-555
corporation, an amount equal to all amounts of If the taxpayer continues to own property income allocable to a shareholder subject to the through the last day of the last tax year for which the Personal Property Tax Replacement Income Tax taxpayer may claim a depreciation deduction for imposed by subsections (c) and (d) of Section 201 federal income tax purposes and for which the of this Act, including amounts allocable to taxpayer was required in any taxable year to make organizations exempt from federal income tax by an addition modification under subparagraph (E- reason of Section 501(a) of the Internal Revenue 10), then an amount equal to that addition Code. This subparagraph (S) is exempt from the modification. provisions of Section 250; The taxpayer is allowed to take the (T) For taxable years 2001 and thereafter, deduction under this subparagraph only once with for the taxable year in which the bonus depreciation respect to any one piece of property. deduction is taken on the taxpayer's federal income This subparagraph (U) is exempt from the tax return under subsection (k) of Section 168 of the provisions of Section 250; Internal Revenue Code and for each applicable taxable year thereafter, an amount equal to "x", (V) The amount of: (i) any interest income where: (net of the deductions allocable thereto) taken into account for the taxable year with respect to a (1) "y" equals the amount of the transaction with a taxpayer that is required to make depreciation deduction taken for the taxable year on an addition modification with respect to such the taxpayer's federal income tax return on property transaction under Section 203(a)(2)(D-17), for which the bonus depreciation deduction was 203(b)(2)(E-12), 203(c)(2)(G-12), or 203(d)(2)(D- taken in any year under subsection (k) of Section 7), but not to exceed the amount of such addition 168 of the Internal Revenue Code, but not including modification, (ii) any income from intangible the bonus depreciation deduction; property (net of the deductions allocable thereto) (2) for taxable years ending on or before taken into account for the taxable year with respect December 31, 2005, "x" equals "y" multiplied by 30 to a transaction with a taxpayer that is required to and then divided by 70 (or "y" multiplied by 0.429); make an addition modification with respect to such and transaction under Section 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or 203(d)(2)(D- (3) for taxable years ending after 8), but not to exceed the amount of such addition December 31, 2005: modification, and (iii) any insurance premium (i) for property on which a bonus income (net of deductions allocable thereto) taken depreciation deduction of 30% of the adjusted basis into account for the taxable year with respect to a was taken, "x" equals "y" multiplied by 30 and then transaction with a taxpayer that is required to make divided by 70 (or "y" multiplied by 0.429); and an addition modification with respect to such transaction under Section 203(a)(2)(D-19), Section (ii) for property on which a bonus 203(b)(2)(E-14), Section 203(c)(2)(G-14), or depreciation deduction of 50% of the adjusted basis Section 203(d)(2)(D-9), but not to exceed the was taken, "x" equals "y" multiplied by 1.0. amount of that addition modification. This The aggregate amount deducted under this subparagraph (V) is exempt from the provisions of subparagraph in all taxable years for any one piece Section 250; of property may not exceed the amount of the bonus (W) An amount equal to the interest depreciation deduction taken on that property on the income taken into account for the taxable year (net taxpayer's federal income tax return under of the deductions allocable thereto) with respect to subsection (k) of Section 168 of the Internal transactions with (i) a foreign person who would be Revenue Code. This subparagraph (T) is exempt a member of the taxpayer's unitary business group from the provisions of Section 250; but for the fact that the foreign person's business (U) If the taxpayer sells, transfers, activity outside the United States is 80% or more of abandons, or otherwise disposes of property for that person's total business activity and (ii) for which the taxpayer was required in any taxable year taxable years ending on or after December 31, 2008, to make an addition modification under to a person who would be a member of the same subparagraph (E-10), then an amount equal to that unitary business group but for the fact that the addition modification. person is prohibited under Section 1501(a)(27) from being included in the unitary business group because he or she is ordinarily required to apportion business
26 As Amended Through Public Act 100-555
income under different subsections of Section 304, (3) Special rule. For purposes of paragraph but not to exceed the addition modification required (2) (A), "gross income" in the case of a life to be made for the same taxable year under Section insurance company, for tax years ending on and 203(b)(2)(E-12) for interest paid, accrued, or after December 31, 1994, and prior to December 31, incurred, directly or indirectly, to the same person. 2011, shall mean the gross investment income for This subparagraph (W) is exempt from the the taxable year and, for tax years ending on or after provisions of Section 250; December 31, 2011, shall mean all amounts included in life insurance gross income under (X) An amount equal to the income from Section 803(a)(3) of the Internal Revenue Code. intangible property taken into account for the taxable year (net of the deductions allocable thereto) (c) Trusts and estates. with respect to transactions with (i) a foreign person (1) In general. In the case of a trust or who would be a member of the taxpayer's unitary estate, base income means an amount equal to the business group but for the fact that the foreign taxpayer's taxable income for the taxable year as person's business activity outside the United States modified by paragraph (2). is 80% or more of that person's total business activity and (ii) for taxable years ending on or after (2) Modifications. Subject to the December 31, 2008, to a person who would be a provisions of paragraph (3), the taxable income member of the same unitary business group but for referred to in paragraph (1) shall be modified by the fact that the person is prohibited under Section adding thereto the sum of the following amounts: 1501(a)(27) from being included in the unitary business group because he or she is ordinarily (A) An amount equal to all amounts paid required to apportion business income under or accrued to the taxpayer as interest or dividends during the taxable year to the extent excluded from different subsections of Section 304, but not to gross income in the computation of taxable income; exceed the addition modification required to be made for the same taxable year under Section (B) In the case of (i) an estate, $600; (ii) a 203(b)(2)(E-13) for intangible expenses and costs trust which, under its governing instrument, is paid, accrued, or incurred, directly or indirectly, to required to distribute all of its income currently, the same foreign person. This subparagraph (X) is $300; and (iii) any other trust, $100, but in each such exempt from the provisions of Section 250; case, only to the extent such amount was deducted in the computation of taxable income; (Y) For taxable years ending on or after December 31, 2011, in the case of a taxpayer who (C) An amount equal to the amount of tax was required to add back any insurance premiums imposed by this Act to the extent deducted from under Section 203(b)(2)(E-14), such taxpayer may gross income in the computation of taxable income elect to subtract that part of a reimbursement for the taxable year; received from the insurance company equal to the amount of the expense or loss (including expenses (D) The amount of any net operating loss incurred by the insurance company) that would have deduction taken in arriving at taxable income, other been taken into account as a deduction for federal than a net operating loss carried forward from a income tax purposes if the expense or loss had been taxable year ending prior to December 31, 1986; uninsured. If a taxpayer makes the election provided (E) For taxable years in which a net for by this subparagraph (Y), the insurer to which operating loss carryback or carryforward from a the premiums were paid must add back to income taxable year ending prior to December 31, 1986 is the amount subtracted by the taxpayer pursuant to an element of taxable income under paragraph (1) of this subparagraph (Y). This subparagraph (Y) is subsection (e) or subparagraph (E) of paragraph (2) exempt from the provisions of Section 250; and of subsection (e), the amount by which addition (Z) The difference between the modifications other than those provided by this nondeductible controlled foreign corporation subparagraph (E) exceeded subtraction dividends under Section 965(e)(3) of the Internal modifications in such taxable year, with the Revenue Code over the taxable income of the following limitations applied in the order that they taxpayer, computed without regard to Section are listed: 965(e)(2)(A) of the Internal Revenue Code, and (i) the addition modification relating to the without regard to any net operating loss deduction. net operating loss carried back or forward to the This subparagraph (Z) is exempt from the provisions taxable year from any taxable year ending prior to of Section 250. December 31, 1986 shall be reduced by the amount
27 As Amended Through Public Act 100-555
of addition modification under this subparagraph subtraction modification under subparagraph (R), (E) which related to that net operating loss and then an amount equal to that subtraction which was taken into account in calculating the base modification. income of an earlier taxable year, and The taxpayer is required to make the (ii) the addition modification relating to the addition modification under this subparagraph only net operating loss carried back or forward to the once with respect to any one piece of property; taxable year from any taxable year ending prior to (G-12) An amount equal to the amount December 31, 1986 shall not exceed the amount of otherwise allowed as a deduction in computing base such carryback or carryforward; income for interest paid, accrued, or incurred, For taxable years in which there is a net directly or indirectly, (i) for taxable years ending on operating loss carryback or carryforward from more or after December 31, 2004, to a foreign person who than one other taxable year ending prior to would be a member of the same unitary business December 31, 1986, the addition modification group but for the fact that the foreign person's provided in this subparagraph (E) shall be the sum business activity outside the United States is 80% or of the amounts computed independently under the more of the foreign person's total business activity preceding provisions of this subparagraph (E) for and (ii) for taxable years ending on or after each such taxable year; December 31, 2008, to a person who would be a member of the same unitary business group but for (F) For taxable years ending on or after the fact that the person is prohibited under Section January 1, 1989, an amount equal to the tax 1501(a)(27) from being included in the unitary deducted pursuant to Section 164 of the Internal business group because he or she is ordinarily Revenue Code if the trust or estate is claiming the required to apportion business income under same tax for purposes of the Illinois foreign tax different subsections of Section 304. The addition credit under Section 601 of this Act; modification required by this subparagraph shall be (G) An amount equal to the amount of the reduced to the extent that dividends were included capital gain deduction allowable under the Internal in base income of the unitary group for the same Revenue Code, to the extent deducted from gross taxable year and received by the taxpayer or by a income in the computation of taxable income; member of the taxpayer's unitary business group (including amounts included in gross income (G-5) For taxable years ending after pursuant to Sections 951 through 964 of the Internal December 31, 1997, an amount equal to any eligible Revenue Code and amounts included in gross remediation costs that the trust or estate deducted in income under Section 78 of the Internal Revenue computing adjusted gross income and for which the Code) with respect to the stock of the same person trust or estate claims a credit under subsection (l) of to whom the interest was paid, accrued, or incurred. Section 201; This paragraph shall not apply to the (G-10) For taxable years 2001 and following: thereafter, an amount equal to the bonus depreciation deduction taken on the taxpayer's (i) an item of interest paid, accrued, or federal income tax return for the taxable year under incurred, directly or indirectly, to a person who is subsection (k) of Section 168 of the Internal subject in a foreign country or state, other than a Revenue Code; and state which requires mandatory unitary reporting, to a tax on or measured by net income with respect to (G-11) If the taxpayer sells, transfers, such interest; or abandons, or otherwise disposes of property for which the taxpayer was required in any taxable year (ii) an item of interest paid, accrued, or to make an addition modification under incurred, directly or indirectly, to a person if the subparagraph (G-10), then an amount equal to the taxpayer can establish, based on a preponderance of aggregate amount of the deductions taken in all the evidence, both of the following: taxable years under subparagraph (R) with respect (a) the person, during the same taxable to that property. year, paid, accrued, or incurred, the interest to a If the taxpayer continues to own property person that is not a related member, and through the last day of the last tax year for which the (b) the transaction giving rise to the interest taxpayer may claim a depreciation deduction for expense between the taxpayer and the person did not federal income tax purposes and for which the have as a principal purpose the avoidance of Illinois taxpayer was allowed in any taxable year to make a
28 As Amended Through Public Act 100-555
income tax, and is paid pursuant to a contract or or accrued. The preceding sentence shall not apply agreement that reflects an arm's-length interest rate to the extent that the same dividends caused a and terms; or reduction to the addition modification required under Section 203(c)(2)(G-12) of this Act. As used (iii) the taxpayer can establish, based on in this subparagraph, the term "intangible expenses clear and convincing evidence, that the interest paid, and costs" includes: (1) expenses, losses, and costs accrued, or incurred relates to a contract or for or related to the direct or indirect acquisition, agreement entered into at arm's-length rates and use, maintenance or management, ownership, sale, terms and the principal purpose for the payment is exchange, or any other disposition of intangible not federal or Illinois tax avoidance; or property; (2) losses incurred, directly or indirectly, (iv) an item of interest paid, accrued, or from factoring transactions or discounting incurred, directly or indirectly, to a person if the transactions; (3) royalty, patent, technical, and taxpayer establishes by clear and convincing copyright fees; (4) licensing fees; and (5) other evidence that the adjustments are unreasonable; or similar expenses and costs. For purposes of this if the taxpayer and the Director agree in writing to subparagraph, "intangible property" includes the application or use of an alternative method of patents, patent applications, trade names, apportionment under Section 304(f). trademarks, service marks, copyrights, mask works, trade secrets, and similar types of intangible assets. Nothing in this subsection shall preclude the Director from making any other adjustment This paragraph shall not apply to the otherwise allowed under Section 404 of this Act for following: any tax year beginning after the effective date of this (i) any item of intangible expenses or costs amendment provided such adjustment is made paid, accrued, or incurred, directly or indirectly, pursuant to regulation adopted by the Department from a transaction with a person who is subject in a and such regulations provide methods and standards foreign country or state, other than a state which by which the Department will utilize its authority requires mandatory unitary reporting, to a tax on or under Section 404 of this Act; measured by net income with respect to such item; (G-13) An amount equal to the amount of or intangible expenses and costs otherwise allowed as (ii) any item of intangible expense or cost a deduction in computing base income, and that paid, accrued, or incurred, directly or indirectly, if were paid, accrued, or incurred, directly or the taxpayer can establish, based on a indirectly, (i) for taxable years ending on or after preponderance of the evidence, both of the December 31, 2004, to a foreign person who would following: be a member of the same unitary business group but for the fact that the foreign person's business activity (a) the person during the same taxable year outside the United States is 80% or more of that paid, accrued, or incurred, the intangible expense or person's total business activity and (ii) for taxable cost to a person that is not a related member, and years ending on or after December 31, 2008, to a (b) the transaction giving rise to the person who would be a member of the same unitary intangible expense or cost between the taxpayer and business group but for the fact that the person is the person did not have as a principal purpose the prohibited under Section 1501(a)(27) from being avoidance of Illinois income tax, and is paid included in the unitary business group because he or pursuant to a contract or agreement that reflects she is ordinarily required to apportion business arm's-length terms; or income under different subsections of Section 304. The addition modification required by this (iii) any item of intangible expense or cost subparagraph shall be reduced to the extent that paid, accrued, or incurred, directly or indirectly, dividends were included in base income of the from a transaction with a person if the taxpayer unitary group for the same taxable year and received establishes by clear and convincing evidence, that by the taxpayer or by a member of the taxpayer's the adjustments are unreasonable; or if the taxpayer unitary business group (including amounts included and the Director agree in writing to the application in gross income pursuant to Sections 951 through or use of an alternative method of apportionment 964 of the Internal Revenue Code and amounts under Section 304(f); included in gross income under Section 78 of the Nothing in this subsection shall preclude Internal Revenue Code) with respect to the stock of the Director from making any other adjustment the same person to whom the intangible expenses otherwise allowed under Section 404 of this Act for and costs were directly or indirectly paid, incurred,
29 As Amended Through Public Act 100-555
any tax year beginning after the effective date of this from self employment by Section 1402 of the amendment provided such adjustment is made Internal Revenue Code and regulations adopted pursuant to regulation adopted by the Department pursuant thereto; and such regulations provide methods and standards (I) The valuation limitation amount; by which the Department will utilize its authority under Section 404 of this Act; (J) An amount equal to the amount of any tax imposed by this Act which was refunded to the (G-14) For taxable years ending on or after taxpayer and included in such total for the taxable December 31, 2008, an amount equal to the amount year; of insurance premium expenses and costs otherwise allowed as a deduction in computing base income, (K) An amount equal to all amounts and that were paid, accrued, or incurred, directly or included in taxable income as modified by indirectly, to a person who would be a member of subparagraphs (A), (B), (C), (D), (E), (F) and (G) the same unitary business group but for the fact that which are exempt from taxation by this State either the person is prohibited under Section 1501(a)(27) by reason of its statutes or Constitution or by reason from being included in the unitary business group of the Constitution, treaties or statutes of the United because he or she is ordinarily required to apportion States; provided that, in the case of any statute of business income under different subsections of this State that exempts income derived from bonds Section 304. The addition modification required by or other obligations from the tax imposed under this this subparagraph shall be reduced to the extent that Act, the amount exempted shall be the interest net dividends were included in base income of the of bond premium amortization; unitary group for the same taxable year and received by the taxpayer or by a member of the taxpayer's (L) With the exception of any amounts subtracted under subparagraph (K), an amount equal unitary business group (including amounts included to the sum of all amounts disallowed as deductions in gross income under Sections 951 through 964 of by (i) Sections 171(a) (2) and 265(a)(2) of the the Internal Revenue Code and amounts included in gross income under Section 78 of the Internal Internal Revenue Code, and all amounts of expenses Revenue Code) with respect to the stock of the same allocable to interest and disallowed as deductions by Section 265(1) of the Internal Revenue Code; and person to whom the premiums and costs were (ii) for taxable years ending on or after August 13, directly or indirectly paid, incurred, or accrued. The 1999, Sections 171(a)(2), 265, 280C, and preceding sentence does not apply to the extent that 832(b)(5)(B)(i) of the Internal Revenue Code, plus, the same dividends caused a reduction to the addition modification required under Section (iii) for taxable years ending on or after December 203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this 31, 2011, Section 45G(e)(3) of the Internal Revenue Code and, for taxable years ending on or after Act; December 31, 2008, any amount included in gross (G-15) An amount equal to the credit income under Section 87 of the Internal Revenue allowable to the taxpayer under Section 218(a) of Code; the provisions of this subparagraph are this Act, determined without regard to Section exempt from the provisions of Section 250; 218(c) of this Act; (M) An amount equal to those dividends (G-16) For taxable years ending on or after included in such total which were paid by a December 31, 2017, an amount equal to the corporation which conducts business operations in a deduction allowed under Section 199 of the Internal River Edge Redevelopment Zone or zones created Revenue Code for the taxable year; under the River Edge Redevelopment Zone Act and conducts substantially all of its operations in a River and by deducting from the total so Edge Redevelopment Zone or zones. This obtained the sum of the following amounts: subparagraph (M) is exempt from the provisions of (H) An amount equal to all amounts Section 250; included in such total pursuant to the provisions of (N) An amount equal to any contribution Sections 402(a), 402(c), 403(a), 403(b), 406(a), made to a job training project established pursuant 407(a) and 408 of the Internal Revenue Code or to the Tax Increment Allocation Redevelopment included in such total as distributions under the Act; provisions of any retirement or disability plan for employees of any governmental agency or unit, or (O) An amount equal to those dividends retirement payments to retired partners, which included in such total that were paid by a payments are excluded in computing net earnings corporation that conducts business operations in a
30 As Amended Through Public Act 100-555
federally designated Foreign Trade Zone or Sub- (1) "y" equals the amount of the Zone and that is designated a High Impact Business depreciation deduction taken for the taxable year on located in Illinois; provided that dividends eligible the taxpayer's federal income tax return on property for the deduction provided in subparagraph (M) of for which the bonus depreciation deduction was paragraph (2) of this subsection shall not be eligible taken in any year under subsection (k) of Section for the deduction provided under this subparagraph 168 of the Internal Revenue Code, but not including (O); the bonus depreciation deduction; (P) An amount equal to the amount of the (2) for taxable years ending on or before deduction used to compute the federal income tax December 31, 2005, "x" equals "y" multiplied by 30 credit for restoration of substantial amounts held and then divided by 70 (or "y" multiplied by 0.429); under claim of right for the taxable year pursuant to and Section 1341 of the Internal Revenue Code; (3) for taxable years ending after (Q) For taxable year 1999 and thereafter, December 31, 2005: an amount equal to the amount of any (i) (i) for property on which a bonus distributions, to the extent includible in gross depreciation deduction of 30% of the adjusted basis income for federal income tax purposes, made to the was taken, "x" equals "y" multiplied by 30 and then taxpayer because of his or her status as a victim of divided by 70 (or "y" multiplied by 0.429); and persecution for racial or religious reasons by Nazi Germany or any other Axis regime or as an heir of (ii) for property on which a bonus the victim and (ii) items of income, to the extent depreciation deduction of 50% of the adjusted basis includible in gross income for federal income tax was taken, "x" equals "y" multiplied by 1.0. purposes, attributable to, derived from or in any way The aggregate amount deducted under this related to assets stolen from, hidden from, or subparagraph in all taxable years for any one piece otherwise lost to a victim of persecution for racial or of property may not exceed the amount of the bonus religious reasons by Nazi Germany or any other Axis regime immediately prior to, during, and depreciation deduction taken on that property on the immediately after World War II, including, but not taxpayer's federal income tax return under subsection (k) of Section 168 of the Internal limited to, interest on the proceeds receivable as Revenue Code. This subparagraph (R) is exempt insurance under policies issued to a victim of from the provisions of Section 250; persecution for racial or religious reasons by Nazi Germany or any other Axis regime by European (S) If the taxpayer sells, transfers, insurance companies immediately prior to and abandons, or otherwise disposes of property for during World War II; provided, however, this which the taxpayer was required in any taxable year subtraction from federal adjusted gross income does to make an addition modification under not apply to assets acquired with such assets or with subparagraph (G-10), then an amount equal to that the proceeds from the sale of such assets; provided, addition modification. further, this paragraph shall only apply to a taxpayer who was the first recipient of such assets after their If the taxpayer continues to own property recovery and who is a victim of persecution for through the last day of the last tax year for which the racial or religious reasons by Nazi Germany or any taxpayer may claim a depreciation deduction for other Axis regime or as an heir of the victim. The federal income tax purposes and for which the amount of and the eligibility for any public taxpayer was required in any taxable year to make assistance, benefit, or similar entitlement is not an addition modification under subparagraph (G- affected by the inclusion of items (i) and (ii) of this 10), then an amount equal to that addition paragraph in gross income for federal income tax modification. purposes. This paragraph is exempt from the The taxpayer is allowed to take the provisions of Section 250; deduction under this subparagraph only once with (R) For taxable years 2001 and thereafter, respect to any one piece of property. for the taxable year in which the bonus depreciation This subparagraph (S) is exempt from the deduction is taken on the taxpayer's federal income provisions of Section 250; tax return under subsection (k) of Section 168 of the Internal Revenue Code and for each applicable (T) The amount of (i) any interest income taxable year thereafter, an amount equal to "x", (net of the deductions allocable thereto) taken into where: account for the taxable year with respect to a transaction with a taxpayer that is required to make
31 As Amended Through Public Act 100-555
an addition modification with respect to such the same foreign person. This subparagraph (V) is transaction under Section 203(a)(2)(D-17), exempt from the provisions of Section 250; 203(b)(2)(E-12), 203(c)(2)(G-12), or 203(d)(2)(D- (W) in the case of an estate, an amount 7), but not to exceed the amount of such addition equal to all amounts included in such total pursuant modification and (ii) any income from intangible to the provisions of Section 111 of the Internal property (net of the deductions allocable thereto) Revenue Code as a recovery of items previously taken into account for the taxable year with respect deducted by the decedent from adjusted gross to a transaction with a taxpayer that is required to income in the computation of taxable income. This make an addition modification with respect to such subparagraph (W) is exempt from Section 250; transaction under Section 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or 203(d)(2)(D- (X) an amount equal to the refund included 8), but not to exceed the amount of such addition in such total of any tax deducted for federal income modification. This subparagraph (T) is exempt from tax purposes, to the extent that deduction was added the provisions of Section 250; back under subparagraph (F). This subparagraph (X) is exempt from the provisions of Section 250; (U) An amount equal to the interest income and taken into account for the taxable year (net of the deductions allocable thereto) with respect to (Y) For taxable years ending on or after transactions with (i) a foreign person who would be December 31, 2011, in the case of a taxpayer who a member of the taxpayer's unitary business group was required to add back any insurance premiums but for the fact the foreign person's business activity under Section 203(c)(2)(G-14), such taxpayer may outside the United States is 80% or more of that elect to subtract that part of a reimbursement person's total business activity and (ii) for taxable received from the insurance company equal to the years ending on or after December 31, 2008, to a amount of the expense or loss (including expenses person who would be a member of the same unitary incurred by the insurance company) that would have business group but for the fact that the person is been taken into account as a deduction for federal prohibited under Section 1501(a)(27) from being income tax purposes if the expense or loss had been included in the unitary business group because he or uninsured. If a taxpayer makes the election provided she is ordinarily required to apportion business for by this subparagraph (Y), the insurer to which income under different subsections of Section 304, the premiums were paid must add back to income but not to exceed the addition modification required the amount subtracted by the taxpayer pursuant to to be made for the same taxable year under Section this subparagraph (Y). This subparagraph (Y) is 203(c)(2)(G-12) for interest paid, accrued, or exempt from the provisions of Section 250. incurred, directly or indirectly, to the same person. (3) Limitation. The amount of any This subparagraph (U) is exempt from the modification otherwise required under this provisions of Section 250; subsection shall, under regulations prescribed by the (V) An amount equal to the income from Department, be adjusted by any amounts included intangible property taken into account for the therein which were properly paid, credited, or taxable year (net of the deductions allocable thereto) required to be distributed, or permanently set aside with respect to transactions with (i) a foreign person for charitable purposes pursuant to Internal Revenue who would be a member of the taxpayer's unitary Code Section 642(c) during the taxable year. business group but for the fact that the foreign (d) Partnerships. person's business activity outside the United States is 80% or more of that person's total business (1) In general. In the case of a partnership, activity and (ii) for taxable years ending on or after base income means an amount equal to the December 31, 2008, to a person who would be a taxpayer's taxable income for the taxable year as member of the same unitary business group but for modified by paragraph (2). the fact that the person is prohibited under Section 1501(a)(27) from being included in the unitary (2) Modifications. The taxable income business group because he or she is ordinarily referred to in paragraph (1) shall be modified by required to apportion business income under adding thereto the sum of the following amounts: different subsections of Section 304, but not to (A) An amount equal to all amounts paid exceed the addition modification required to be or accrued to the taxpayer as interest or dividends made for the same taxable year under Section during the taxable year to the extent excluded from 203(c)(2)(G-13) for intangible expenses and costs gross income in the computation of taxable income; paid, accrued, or incurred, directly or indirectly, to
32 As Amended Through Public Act 100-555
(B) An amount equal to the amount of tax person is prohibited under Section 1501(a)(27) from imposed by this Act to the extent deducted from being included in the unitary business group because gross income for the taxable year; he or she is ordinarily required to apportion business income under different subsections of Section 304. (C) The amount of deductions allowed to The addition modification required by this the partnership pursuant to Section 707 (c) of the subparagraph shall be reduced to the extent that Internal Revenue Code in calculating its taxable dividends were included in base income of the income; provided that no addition shall be required unitary group for the same taxable year and received under this subparagraph (C) for taxable years ending by the taxpayer or by a member of the taxpayer's on or after December 31, 2009, for deductions unitary business group (including amounts included allowed for guaranteed payments to an individual in gross income pursuant to Sections 951 through partner for personal services by that partner; 964 of the Internal Revenue Code and amounts (D) An amount equal to the amount of the included in gross income under Section 78 of the capital gain deduction allowable under the Internal Internal Revenue Code) with respect to the stock of Revenue Code, to the extent deducted from gross the same person to whom the interest was paid, income in the computation of taxable income; accrued, or incurred. (D-5) For taxable years 2001 and This paragraph shall not apply to the thereafter, an amount equal to the bonus following: depreciation deduction taken on the taxpayer's (i) an item of interest paid, accrued, or federal income tax return for the taxable year under incurred, directly or indirectly, to a person who is subsection (k) of Section 168 of the Internal subject in a foreign country or state, other than a Revenue Code; state which requires mandatory unitary reporting, to (D-6) If the taxpayer sells, transfers, a tax on or measured by net income with respect to abandons, or otherwise disposes of property for such interest; or which the taxpayer was required in any taxable year (ii) an item of interest paid, accrued, or to make an addition modification under incurred, directly or indirectly, to a person if the subparagraph (D-5), then an amount equal to the taxpayer can establish, based on a preponderance of aggregate amount of the deductions taken in all the evidence, both of the following: taxable years under subparagraph (O) with respect to that property. (a) the person, during the same taxable year, paid, accrued, or incurred, the interest to a If the taxpayer continues to own property person that is not a related member, and through the last day of the last tax year for which the taxpayer may claim a depreciation deduction for (b) the transaction giving rise to the interest federal income tax purposes and for which the expense between the taxpayer and the person did not taxpayer was allowed in any taxable year to make a have as a principal purpose the avoidance of Illinois subtraction modification under subparagraph (O), income tax, and is paid pursuant to a contract or then an amount equal to that subtraction agreement that reflects an arm's-length interest rate modification. and terms; or The taxpayer is required to make the (iii) the taxpayer can establish, based on addition modification under this subparagraph only clear and convincing evidence, that the interest paid, once with respect to any one piece of property; accrued, or incurred relates to a contract or agreement entered into at arm's-length rates and (D-7) An amount equal to the amount terms and the principal purpose for the payment is otherwise allowed as a deduction in computing base not federal or Illinois tax avoidance; or income for interest paid, accrued, or incurred, directly or indirectly, (i) for taxable years ending on (iv) an item of interest paid, accrued, or or after December 31, 2004, to a foreign person who incurred, directly or indirectly, to a person if the would be a member of the same unitary business taxpayer establishes by clear and convincing group but for the fact the foreign person's business evidence that the adjustments are unreasonable; or activity outside the United States is 80% or more of if the taxpayer and the Director agree in writing to the foreign person's total business activity and (ii) the application or use of an alternative method of for taxable years ending on or after December 31, apportionment under Section 304(f). 2008, to a person who would be a member of the Nothing in this subsection shall preclude same unitary business group but for the fact that the the Director from making any other adjustment
33 As Amended Through Public Act 100-555
otherwise allowed under Section 404 of this Act for This paragraph shall not apply to the any tax year beginning after the effective date of this following: amendment provided such adjustment is made (i) any item of intangible expenses or costs pursuant to regulation adopted by the Department paid, accrued, or incurred, directly or indirectly, and such regulations provide methods and standards from a transaction with a person who is subject in a by which the Department will utilize its authority foreign country or state, other than a state which under Section 404 of this Act; and requires mandatory unitary reporting, to a tax on or (D-8) An amount equal to the amount of measured by net income with respect to such item; intangible expenses and costs otherwise allowed as or a deduction in computing base income, and that (ii) any item of intangible expense or cost were paid, accrued, or incurred, directly or paid, accrued, or incurred, directly or indirectly, if indirectly, (i) for taxable years ending on or after the taxpayer can establish, based on a December 31, 2004, to a foreign person who would preponderance of the evidence, both of the be a member of the same unitary business group but following: for the fact that the foreign person's business activity outside the United States is 80% or more of that (a) the person during the same taxable year person's total business activity and (ii) for taxable paid, accrued, or incurred, the intangible expense or years ending on or after December 31, 2008, to a cost to a person that is not a related member, and person who would be a member of the same unitary (b) the transaction giving rise to the business group but for the fact that the person is prohibited under Section 1501(a)(27) from being intangible expense or cost between the taxpayer and included in the unitary business group because he or the person did not have as a principal purpose the avoidance of Illinois income tax, and is paid she is ordinarily required to apportion business pursuant to a contract or agreement that reflects income under different subsections of Section 304. arm's-length terms; or The addition modification required by this subparagraph shall be reduced to the extent that (iii) any item of intangible expense or cost dividends were included in base income of the paid, accrued, or incurred, directly or indirectly, unitary group for the same taxable year and received from a transaction with a person if the taxpayer by the taxpayer or by a member of the taxpayer's establishes by clear and convincing evidence, that unitary business group (including amounts included the adjustments are unreasonable; or if the taxpayer in gross income pursuant to Sections 951 through and the Director agree in writing to the application 964 of the Internal Revenue Code and amounts or use of an alternative method of apportionment included in gross income under Section 78 of the under Section 304(f); Internal Revenue Code) with respect to the stock of the same person to whom the intangible expenses Nothing in this subsection shall preclude and costs were directly or indirectly paid, incurred the Director from making any other adjustment or accrued. The preceding sentence shall not apply otherwise allowed under Section 404 of this Act for to the extent that the same dividends caused a any tax year beginning after the effective date of this reduction to the addition modification required amendment provided such adjustment is made under Section 203(d)(2)(D-7) of this Act. As used in pursuant to regulation adopted by the Department this subparagraph, the term "intangible expenses and such regulations provide methods and standards and costs" includes (1) expenses, losses, and costs by which the Department will utilize its authority for, or related to, the direct or indirect acquisition, under Section 404 of this Act; use, maintenance or management, ownership, sale, (D-9) For taxable years ending on or after exchange, or any other disposition of intangible December 31, 2008, an amount equal to the amount property; (2) losses incurred, directly or indirectly, of insurance premium expenses and costs otherwise from factoring transactions or discounting allowed as a deduction in computing base income, transactions; (3) royalty, patent, technical, and and that were paid, accrued, or incurred, directly or copyright fees; (4) licensing fees; and (5) other indirectly, to a person who would be a member of similar expenses and costs. For purposes of this the same unitary business group but for the fact that subparagraph, "intangible property" includes the person is prohibited under Section 1501(a)(27) patents, patent applications, trade names, from being included in the unitary business group trademarks, service marks, copyrights, mask works, because he or she is ordinarily required to apportion trade secrets, and similar types of intangible assets; business income under different subsections of Section 304. The addition modification required by
34 As Amended Through Public Act 100-555
this subparagraph shall be reduced to the extent that Personal Property Tax Replacement Income Tax dividends were included in base income of the imposed by subsections (c) and (d) of Section 201 unitary group for the same taxable year and received of this Act including amounts distributable to by the taxpayer or by a member of the taxpayer's organizations exempt from federal income tax by unitary business group (including amounts included reason of Section 501(a) of the Internal Revenue in gross income under Sections 951 through 964 of Code; this subparagraph (I) is exempt from the the Internal Revenue Code and amounts included in provisions of Section 250; gross income under Section 78 of the Internal (J) With the exception of any amounts Revenue Code) with respect to the stock of the same subtracted under subparagraph (G), an amount equal person to whom the premiums and costs were to the sum of all amounts disallowed as deductions directly or indirectly paid, incurred, or accrued. The by (i) Sections 171(a) (2), and 265(2) of the Internal preceding sentence does not apply to the extent that Revenue Code, and all amounts of expenses the same dividends caused a reduction to the allocable to interest and disallowed as deductions by addition modification required under Section Section 265(1) of the Internal Revenue Code; and 203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this (ii) for taxable years ending on or after August 13, Act; 1999, Sections 171(a)(2), 265, 280C, and (D-10) An amount equal to the credit 832(b)(5)(B)(i) of the Internal Revenue Code, plus, allowable to the taxpayer under Section 218(a) of (iii) for taxable years ending on or after December this Act, determined without regard to Section 31, 2011, Section 45G(e)(3) of the Internal Revenue 218(c) of this Act; Code and, for taxable years ending on or after December 31, 2008, any amount included in gross (D-11) For taxable years ending on or after income under Section 87 of the Internal Revenue December 31, 2017, an amount equal to the Code; the provisions of this subparagraph are deduction allowed under Section 199 of the Internal exempt from the provisions of Section 250; Revenue Code for the taxable year; (K) An amount equal to those dividends and by deducting from the total so included in such total which were paid by a obtained the following amounts: corporation which conducts business operations in a (E) The valuation limitation amount; River Edge Redevelopment Zone or zones created under the River Edge Redevelopment Zone Act and (F) An amount equal to the amount of any conducts substantially all of its operations in from a tax imposed by this Act which was refunded to the River Edge Redevelopment Zone or zones. This taxpayer and included in such total for the taxable subparagraph (K) is exempt from the provisions of year; Section 250; (G) An amount equal to all amounts (L) An amount equal to any contribution included in taxable income as modified by made to a job training project established pursuant subparagraphs (A), (B), (C) and (D) which are to the Real Property Tax Increment Allocation exempt from taxation by this State either by reason Redevelopment Act; of its statutes or Constitution or by reason of the Constitution, treaties or statutes of the United States; (M) An amount equal to those dividends provided that, in the case of any statute of this State included in such total that were paid by a that exempts income derived from bonds or other corporation that conducts business operations in a obligations from the tax imposed under this Act, the federally designated Foreign Trade Zone or Sub- amount exempted shall be the interest net of bond Zone and that is designated a High Impact Business premium amortization; located in Illinois; provided that dividends eligible for the deduction provided in subparagraph (K) of (H) Any income of the partnership which paragraph (2) of this subsection shall not be eligible constitutes personal service income as defined in for the deduction provided under this subparagraph Section 1348 (b) (1) of the Internal Revenue Code (M); (as in effect December 31, 1981) or a reasonable allowance for compensation paid or accrued for (N) An amount equal to the amount of the services rendered by partners to the partnership, deduction used to compute the federal income tax whichever is greater; this subparagraph (H) is credit for restoration of substantial amounts held exempt from the provisions of Section 250; under claim of right for the taxable year pursuant to Section 1341 of the Internal Revenue Code; (I) An amount equal to all amounts of income distributable to an entity subject to the
35 As Amended Through Public Act 100-555
(O) For taxable years 2001 and thereafter, This subparagraph (P) is exempt from the for the taxable year in which the bonus depreciation provisions of Section 250; deduction is taken on the taxpayer's federal income (Q) The amount of (i) any interest income tax return under subsection (k) of Section 168 of the (net of the deductions allocable thereto) taken into Internal Revenue Code and for each applicable account for the taxable year with respect to a taxable year thereafter, an amount equal to "x", transaction with a taxpayer that is required to make where: an addition modification with respect to such (1) "y" equals the amount of the transaction under Section 203(a)(2)(D-17), depreciation deduction taken for the taxable year on 203(b)(2)(E-12), 203(c)(2)(G-12), or 203(d)(2)(D- the taxpayer's federal income tax return on property 7), but not to exceed the amount of such addition for which the bonus depreciation deduction was modification and (ii) any income from intangible taken in any year under subsection (k) of Section property (net of the deductions allocable thereto) 168 of the Internal Revenue Code, but not including taken into account for the taxable year with respect the bonus depreciation deduction; to a transaction with a taxpayer that is required to make an addition modification with respect to such (2) for taxable years ending on or before transaction under Section 203(a)(2)(D-18), December 31, 2005, "x" equals "y" multiplied by 30 203(b)(2)(E-13), 203(c)(2)(G-13), or 203(d)(2)(D- and then divided by 70 (or "y" multiplied by 0.429); 8), but not to exceed the amount of such addition and modification. This subparagraph (Q) is exempt from (3) for taxable years ending after Section 250; December 31, 2005: (R) An amount equal to the interest income (i) for property on which a bonus taken into account for the taxable year (net of the depreciation deduction of 30% of the adjusted basis deductions allocable thereto) with respect to was taken, "x" equals "y" multiplied by 30 and then transactions with (i) a foreign person who would be divided by 70 (or "y" multiplied by 0.429); and a member of the taxpayer's unitary business group but for the fact that the foreign person's business (ii) for property on which a bonus activity outside the United States is 80% or more of depreciation deduction of 50% of the adjusted basis that person's total business activity and (ii) for was taken, "x" equals "y" multiplied by 1.0. taxable years ending on or after December 31, 2008, The aggregate amount deducted under this to a person who would be a member of the same subparagraph in all taxable years for any one piece unitary business group but for the fact that the of property may not exceed the amount of the bonus person is prohibited under Section 1501(a)(27) from depreciation deduction taken on that property on the being included in the unitary business group because taxpayer's federal income tax return under he or she is ordinarily required to apportion business subsection (k) of Section 168 of the Internal income under different subsections of Section 304, Revenue Code. This subparagraph (O) is exempt but not to exceed the addition modification required from the provisions of Section 250; to be made for the same taxable year under Section 203(d)(2)(D-7) for interest paid, accrued, or (P) If the taxpayer sells, transfers, incurred, directly or indirectly, to the same person. abandons, or otherwise disposes of property for This subparagraph (R) is exempt from Section 250; which the taxpayer was required in any taxable year to make an addition modification under (S) An amount equal to the income from subparagraph (D-5), then an amount equal to that intangible property taken into account for the addition modification. taxable year (net of the deductions allocable thereto) with respect to transactions with (i) a foreign person If the taxpayer continues to own property who would be a member of the taxpayer's unitary through the last day of the last tax year for which the business group but for the fact that the foreign taxpayer may claim a depreciation deduction for person's business activity outside the United States federal income tax purposes and for which the is 80% or more of that person's total business taxpayer was required in any taxable year to make activity and (ii) for taxable years ending on or after an addition modification under subparagraph (D-5), December 31, 2008, to a person who would be a then an amount equal to that addition modification. member of the same unitary business group but for The taxpayer is allowed to take the the fact that the person is prohibited under Section deduction under this subparagraph only once with 1501(a)(27) from being included in the unitary respect to any one piece of property. business group because he or she is ordinarily
36 As Amended Through Public Act 100-555
required to apportion business income under subtraction modifications, an addition modification different subsections of Section 304, but not to must be made under those subparagraphs for any exceed the addition modification required to be other taxable year to which the taxable income less made for the same taxable year under Section than zero (net operating loss) is applied under 203(d)(2)(D-8) for intangible expenses and costs Section 172 of the Internal Revenue Code or under paid, accrued, or incurred, directly or indirectly, to subparagraph (E) of paragraph (2) of this subsection the same person. This subparagraph (S) is exempt (e) applied in conjunction with Section 172 of the from Section 250; and Internal Revenue Code. (T) For taxable years ending on or after (2) Special rule. For purposes of paragraph December 31, 2011, in the case of a taxpayer who (1) of this subsection, the taxable income properly was required to add back any insurance premiums reportable for federal income tax purposes shall under Section 203(d)(2)(D-9), such taxpayer may mean: elect to subtract that part of a reimbursement (A) Certain life insurance companies. In received from the insurance company equal to the the case of a life insurance company subject to the amount of the expense or loss (including expenses tax imposed by Section 801 of the Internal Revenue incurred by the insurance company) that would have Code, life insurance company taxable income, plus been taken into account as a deduction for federal the amount of distribution from pre-1984 income tax purposes if the expense or loss had been policyholder surplus accounts as calculated under uninsured. If a taxpayer makes the election provided Section 815a of the Internal Revenue Code; for by this subparagraph (T), the insurer to which the premiums were paid must add back to income the (B) Certain other insurance companies. In amount subtracted by the taxpayer pursuant to this the case of mutual insurance companies subject to subparagraph (T). This subparagraph (T) is exempt the tax imposed by Section 831 of the Internal from the provisions of Section 250. Revenue Code, insurance company taxable income; (e) Gross income; adjusted gross (C) Regulated investment companies. In income; taxable income. the case of a regulated investment company subject to the tax imposed by Section 852 of the Internal (1) In general. Subject to the provisions of Revenue Code, investment company taxable paragraph (2) and subsection (b) (3), for purposes of income; this Section and Section 803(e), a taxpayer's gross income, adjusted gross income, or taxable income (D) Real estate investment trusts. In the for the taxable year shall mean the amount of gross case of a real estate investment trust subject to the income, adjusted gross income or taxable income tax imposed by Section 857 of the Internal Revenue properly reportable for federal income tax purposes Code, real estate investment trust taxable income; for the taxable year under the provisions of the (E) Consolidated corporations. In the case Internal Revenue Code. Taxable income may be less of a corporation which is a member of an affiliated than zero. However, for taxable years ending on or group of corporations filing a consolidated income after December 31, 1986, net operating loss carryforwards from taxable years ending prior to tax return for the taxable year for federal income tax December 31, 1986, may not exceed the sum of purposes, taxable income determined as if such corporation had filed a separate return for federal federal taxable income for the taxable year before income tax purposes for the taxable year and each net operating loss deduction, plus the excess of preceding taxable year for which it was a member of addition modifications over subtraction modifications for the taxable year. For taxable years an affiliated group. For purposes of this ending prior to December 31, 1986, taxable income subparagraph, the taxpayer's separate taxable income shall be determined as if the election may never be an amount in excess of the net provided by Section 243(b) (2) of the Internal operating loss for the taxable year as defined in Revenue Code had been in effect for all such years; subsections (c) and (d) of Section 172 of the Internal Revenue Code, provided that when taxable income (F) Cooperatives. In the case of a of a corporation (other than a Subchapter S cooperative corporation or association, the taxable corporation), trust, or estate is less than zero and income of such organization determined in addition modifications, other than those provided by accordance with the provisions of Section 1381 subparagraph (E) of paragraph (2) of subsection (b) through 1388 of the Internal Revenue Code, but for corporations or subparagraph (E) of paragraph without regard to the prohibition against offsetting (2) of subsection (c) for trusts and estates, exceed losses from patronage activities against income
37 As Amended Through Public Act 100-555
from nonpatronage activities; except that a as business income and in a later year is cooperative corporation or association may make an demonstrated to be non-business income, then all election to follow its federal income tax treatment of expenses, without limitation, deducted in such later patronage losses and nonpatronage losses. In the year and in the 2 immediately preceding taxable event such election is made, such losses shall be years related to that asset or business that generated computed and carried over in a manner consistent the non-business income shall be added back and with subsection (a) of Section 207 of this Act and recaptured as business income in the year of the apportioned by the apportionment factor reported by disposition of the asset or business. Such amount the cooperative on its Illinois income tax return filed shall be apportioned to Illinois using the greater of for the taxable year in which the losses are incurred. the apportionment fraction computed for the The election shall be effective for all taxable years business under Section 304 of this Act for the with original returns due on or after the date of the taxable year or the average of the apportionment election. In addition, the cooperative may file an fractions computed for the business under Section amended return or returns, as allowed under this 304 of this Act for the taxable year and for the 2 Act, to provide that the election shall be effective for immediately preceding taxable years. losses incurred or carried forward for taxable years (f) Valuation limitation amount. occurring prior to the date of the election. Once made, the election may only be revoked upon (1) In general. The valuation limitation approval of the Director. The Department shall amount referred to in subsections (a) (2) (G), (c) (2) adopt rules setting forth requirements for (I) and (d)(2) (E) is an amount equal to: documenting the elections and any resulting Illinois net loss and the standards to be used by the Director (A) The sum of the pre-August 1, 1969 appreciation amounts (to the extent consisting of in evaluating requests to revoke elections. Public gain reportable under the provisions of Section 1245 Act 96-932 is declaratory of existing law; or 1250 of the Internal Revenue Code) for all (G) Subchapter S corporations. In the case property in respect of which such gain was reported of: (i) a Subchapter S corporation for which there is for the taxable year; plus in effect an election for the taxable year under (B) The lesser of (i) the sum of the pre- Section 1362 of the Internal Revenue Code, the August 1, 1969 appreciation amounts (to the extent taxable income of such corporation determined in consisting of capital gain) for all property in respect accordance with Section 1363(b) of the Internal of which such gain was reported for federal income Revenue Code, except that taxable income shall take into account those items which are required by tax purposes for the taxable year, or (ii) the net Section 1363(b)(1) of the Internal Revenue Code to capital gain for the taxable year, reduced in either case by any amount of such gain included in the be separately stated; and (ii) a Subchapter S amount determined under subsection (a) (2) (F) or corporation for which there is in effect a federal (c) (2) (H). election to opt out of the provisions of the Subchapter S Revision Act of 1982 and have applied (2) Pre-August 1, 1969 appreciation instead the prior federal Subchapter S rules as in amount. effect on July 1, 1982, the taxable income of such corporation determined in accordance with the (A) If the fair market value of property federal Subchapter S rules as in effect on July 1, referred to in paragraph (1) was readily 1982; and ascertainable on August 1, 1969, the pre-August 1, 1969 appreciation amount for such property is the (H) Partnerships. In the case of a lesser of (i) the excess of such fair market value over partnership, taxable income determined in the taxpayer's basis (for determining gain) for such accordance with Section 703 of the Internal property on that date (determined under the Internal Revenue Code, except that taxable income shall take Revenue Code as in effect on that date), or (ii) the into account those items which are required by total gain realized and reportable for federal income Section 703(a)(1) to be separately stated but which tax purposes in respect of the sale, exchange or other would be taken into account by an individual in disposition of such property. calculating his taxable income. (B) If the fair market value of property (3) Recapture of business expenses on referred to in paragraph (1) was not readily disposition of asset or business. Notwithstanding ascertainable on August 1, 1969, the pre-August 1, any other law to the contrary, if in prior years 1969 appreciation amount for such property is that income from an asset or business has been classified amount which bears the same ratio to the total gain
38 As Amended Through Public Act 100-555
reported in respect of the property for federal (2) for taxable years ending on or after income tax purposes for the taxable year, as the December 31, 1999 and prior to December 31, 2000, number of full calendar months in that part of the $1,650; taxpayer's holding period for the property ending (3) for taxable years ending on or after July 31, 1969 bears to the number of full calendar December 31, 2000, and prior to December 31, months in the taxpayer's entire holding period for 2012, $2,000; the property. (4) for taxable years ending on or after (C) The Department shall prescribe such December 31, 2012 and prior to December 31, 2013, regulations as may be necessary to carry out the $2,050; purposes of this paragraph. (5) for taxable years ending on or after (g) Double deductions. December 31, 2013, $2,050 plus the cost-of-living Unless specifically provided otherwise, adjustment under subsection (d-5). nothing in this Section shall permit the same item to For taxable years ending on or after December 31, be deducted more than once. 1992, a taxpayer whose Illinois base income (h) Legislative intention. exceeds the basic amount and who is claimed as a dependent on another person's tax return under the Except as expressly provided by this Internal Revenue Code shall not be allowed any Section there shall be no modifications or basic amount under this subsection. limitations on the amounts of income, gain, loss or deduction taken into account in determining gross (c) Additional amount for individuals. In income, adjusted gross income or taxable income the case of an individual taxpayer, there shall be for federal income tax purposes for the taxable year, allowed for the purpose of subsection (a), in addition or in the amount of such items entering into the to the basic amount provided by subsection (b), an computation of base income and net income under additional exemption equal to the basic amount for this Act for such taxable year, whether in respect of each exemption in excess of one allowable to such property values as of August 1, 1969 or otherwise. individual taxpayer for the taxable year under Section 151 of the Internal Revenue Code. (Source: P.A. 95-23, eff. 8-3-07; 95-233, eff. 8-16-07; 95-286, eff. 8-20-07; 95-331, eff. 8-21- (d) Additional exemptions for an 07; 95-707, eff. 1-11-08; 95-876, eff. 8-21-08; 96- individual taxpayer and his or her spouse. In the case 45, eff. 7-15-09; 96-120, eff. 8-4-09; 96-198, eff. 8- of an individual taxpayer and his or her spouse, he 10-09; 96-328, eff. 8-11-09; 96-520, eff. 8-14-09; or she shall each be allowed additional exemptions 96-1214, eff. 7-22-10.) as follows: Sec. 204. Standard Exemption. (1) Additional exemption for taxpayer or spouse 65 years of age or older. (a) Allowance of exemption. In computing net income under this Act, there shall be allowed as (A) For taxpayer. An additional exemption an exemption the sum of the amounts determined of $1,000 for the taxpayer if he or she has attained under subsections (b), (c) and (d), multiplied by a the age of 65 before the end of the taxable year. fraction the numerator of which is the amount of the (B) For spouse when a joint return is not taxpayer's base income allocable to this State for the filed. An additional exemption of $1,000 for the taxable year and the denominator of which is the spouse of the taxpayer if a joint return is not made taxpayer's total base income for the taxable year. by the taxpayer and his spouse, and if the spouse has (b) Basic amount. For the purpose of attained the age of 65 before the end of such taxable subsection (a) of this Section, except as provided by year, and, for the calendar year in which the taxable subsection (a) of Section 205 and in this subsection, year of the taxpayer begins, has no gross income and each taxpayer shall be allowed a basic amount of is not the dependent of another taxpayer. $1000, except that for corporations the basic amount (2) Additional exemption for blindness of shall be zero for tax years ending on or after taxpayer or spouse. December 31, 2003, and for individuals the basic amount shall be: (A) For taxpayer. An additional exemption of $1,000 for the taxpayer if he or she is blind at the (1) for taxable years ending on or after end of the taxable year. December 31, 1998 and prior to December 31, 1999, $1,300;
39 As Amended Through Public Act 100-555
(B) For spouse when a joint return is not federal income tax by reason of the Internal filed. An additional exemption of $1,000 for the Revenue Code shall not be determined under section spouse of the taxpayer if a separate return is made 203 of this Act, but shall be its unrelated business by the taxpayer, and if the spouse is blind and, for taxable income as determined under section 512 of the calendar year in which the taxable year of the the Internal Revenue Code, without any deduction taxpayer begins, has no gross income and is not the for the tax imposed by this Act. The standard dependent of another taxpayer. For purposes of this exemption provided by section 204 of this Act shall paragraph, the determination of whether the spouse not be allowed in determining the net income of an is blind shall be made as of the end of the taxable organization to which this subsection applies. year of the taxpayer; except that if the spouse dies (b) Partnerships. A partnership as such during such taxable year such determination shall be shall not be subject to the tax imposed by subsection made as of the time of such death. 201 (a) and (b) of this Act, but shall be subject to the (C) Blindness defined. For purposes of this replacement tax imposed by subsection 201 (c) and subsection, an individual is blind only if his or her (d) of this Act and shall compute its base income as central visual acuity does not exceed 20/200 in the described in subsection (d) of Section 203 of this better eye with correcting lenses, or if his or her Act. For taxable years ending on or after December visual acuity is greater than 20/200 but is 31, 2004, an investment partnership, as defined in accompanied by a limitation in the fields of vision Section 1501(a)(11.5) of this Act, shall not be such that the widest diameter of the visual fields subject to the tax imposed by subsections (c) and (d) subtends an angle no greater than 20 degrees. of Section 201 of this Act. A partnership shall file such returns and other information at such time and (d-5) Cost-of-living adjustment. For in such manner as may be required under Article 5 purposes of item (5) of subsection (b), the cost-of- of this Act. The partners in a partnership shall be living adjustment for any calendar year and for liable for the replacement tax imposed by subsection taxable years ending prior to the end of the 201 (c) and (d) of this Act on such partnership, to subsequent calendar year is equal to $2,050 times the extent such tax is not paid by the partnership, as the percentage (if any) by which: provided under the laws of Illinois governing the (1) the Consumer Price Index for the liability of partners for the obligations of a preceding calendar year, exceeds partnership. Persons carrying on business as partners shall be liable for the tax imposed by (2) the Consumer Price Index for the subsection 201 (a) and (b) of this Act only in their calendar year 2011. separate or individual capacities. The Consumer Price Index for any (c) Subchapter S corporations. A calendar year is the average of the Consumer Price Subchapter S corporation shall not be subject to the Index as of the close of the 12-month period ending tax imposed by subsection 201 (a) and (b) of this Act on August 31 of that calendar year. but shall be subject to the replacement tax imposed The term "Consumer Price Index" means by subsection 201 (c) and (d) of this Act and shall the last Consumer Price Index for All Urban file such returns and other information at such time Consumers published by the United States and in such manner as may be required under Article Department of Labor or any successor agency. 5 of this Act. If any cost-of-living adjustment is not a (d) Combat zone, terrorist attack, and multiple of $25, that adjustment shall be rounded to certain other deaths. An individual relieved from the the next lowest multiple of $25. federal income tax for any taxable year by reason of section 692 of the Internal Revenue Code shall not (e) Cross reference. See Article 3 for the be subject to the tax imposed by this Act for such manner of determining base income allocable to this taxable year. State. (e) Certain trusts. A common trust fund (f) Application of Section 250. Section 250 described in Section 584 of the Internal Revenue does not apply to the amendments to this Section Code, and any other trust to the extent that the made by Public Act 90-613. grantor is treated as the owner thereof under sections Sec. 205. Exempt organizations. 671 through 678 of the Internal Revenue Code shall not be subject to the tax imposed by this Act. (a) Charitable, etc. organizations. The base income of an organization which is exempt from the
40 As Amended Through Public Act 100-555
(f) Certain business activities. A person not 5 taxable years following the excess credit years. otherwise subject to the tax imposed by this Act The credit shall be applied to the earliest year for shall not become subject to the tax imposed by this which there is a liability. If there is credit from more Act by reason of: than one tax year that is available to offset a liability, earlier credit shall be applied first. (1) that person's ownership of tangible personal property located at the premises of a printer Sec. 207. Net Losses. in this State with which the person has contracted (a) If after applying all of the (i) for printing, or modifications provided for in paragraph (2) of (2) activities of the person's employees or Section 203(b), paragraph (2) of Section 203(c) and agents located solely at the premises of a printer and paragraph (2) of Section 203(d) and (ii) the related to quality control, distribution, or printing allocation and apportionment provisions of Article services performed by a printer in the State with 3 of this Act and subsection (c) of this Section, the which the person has contracted for printing. taxpayer's net income results in a loss; (g) A nonprofit risk organization that holds (1) for any taxable year ending prior to a certificate of authority under Article VIID of the December 31, 1999, such loss shall be allowed as a Illinois Insurance Code is exempt from the tax carryover or carryback deduction in the manner imposed under this Act with respect to its activities allowed under Section 172 of the Internal Revenue or operations in furtherance of the powers conferred Code; upon it under that Article VIID of the Illinois (2) for any taxable year ending on or after Insurance Code. December 31, 1999 and prior to December 31, 2003, Sec. 206. Tax Credits For Coal Research such loss shall be allowed as a carryback to each of And Coal Utilization the 2 taxable years preceding the taxable year of Equipment. such loss and shall be a net operating loss carryover to each of the 20 taxable years following the taxable (a) Until January 1, 2005, each corporation year of such loss; and subject to this Act shall be entitled to a credit against the tax imposed by subsections (a) and (b) of Section (3) for any taxable year ending on or after 201 in an amount equal to 20% of the amount December 31, 2003, such loss shall be allowed as a donated to the Illinois Center for Research on Sulfur net operating loss carryover to each of the 12 taxable in Coal. years following the taxable year of such loss, except as provided in subsection (d). (b) Until January 1, 2005, each corporation subject to this Act shall be entitled to a credit against (a-5) Election to relinquish carryback and the tax imposed by subsections (a) and (b) of Section order of application of losses. 201 in an amount equal to 5% of the amount spent (A) For losses incurred in tax years ending during the taxable year by the corporation on prior to December 31, 2003, the taxpayer may elect equipment purchased for the purpose of maintaining to relinquish the entire carryback period with respect or increasing the use of Illinois coal at any Illinois to such loss. Such election shall be made in the form facility owned, leased or operated by the and manner prescribed by the Department and shall corporation. Such equipment shall be limited to be made by the due date (including extensions of direct coal combustion equipment and pollution time) for filing the taxpayer's return for the taxable control equipment necessary thereto. For purposes year in which such loss is incurred, and such of this credit, the amount spent on qualifying election, once made, shall be irrevocable. equipment shall be defined as the basis of the equipment used to compute the depreciation (B) The entire amount of such loss shall be deduction for federal income tax purposes. carried to the earliest taxable year to which such loss may be carried. The amount of such loss which shall For tax years ending on or after December be carried to each of the other taxable years shall be 31, 1987, the credit shall be allowed for the tax year the excess, if any, of the amount of such loss over in which the amount is donated or the equipment the sum of the deductions for carryback or carryover purchased is placed in service, or, if the amount of of such loss allowable for each of the prior taxable the credit exceeds the tax liability for that year, years to which such loss may be carried. whether it exceeds the original liability or the liability as later amended, such excess may be (b) Any loss determined under subsection carried forward and applied to the tax liability of the (a) of this Section must be carried back or carried
41 As Amended Through Public Act 100-555
forward in the same manner for purposes of (2) minus an amount equal to the amount subsections (a) and (b) of Section 201 of this Act as computed under subsection (a), without regard to for purposes of subsections (c) and (d) of Section this subsection (e), minus the amount that would be 201 of this Act. computed under subsection (a) if the taxpayer's federal taxable income were computed without (c) Notwithstanding any other provision of regard to Section 860E of the Internal Revenue this Act, for each taxable year ending on or after Code and without regard to this subsection (e). December 31, 2008, for purposes of computing the loss for the taxable year under subsection (a) of this The modification in this subsection (e) is Section and the deduction taken into account for the exempt from the provisions of Section 250. taxable year for a net operating loss carryover under Sec. 208. Tax Credit For Residential paragraphs (1), (2), and (3) of subsection (a) of this Real Property Taxes. Section, the loss and net operating loss carryover shall be reduced in an amount equal to the reduction Beginning with tax years ending on or after to the net operating loss and net operating loss December 31, 1991, every individual taxpayer shall carryover to the taxable year, respectively, required be entitled to a tax credit equal to 5% of real under Section 108(b)(2)(A) of the Internal Revenue property taxes paid by such taxpayer during the Code, multiplied by a fraction, the numerator of taxable year on the principal residence of the which is the amount of discharge of indebtedness taxpayer. In the case of multi-unit or multi-use income that is excluded from gross income for the structures and farm dwellings, the taxes on the taxable year (but only if the taxable year ends on or taxpayer's principal residence shall be that portion after December 31, 2008) under Section 108(a) of of the total taxes which is attributable to such the Internal Revenue Code and that would have been principal residence. Notwithstanding any other allocated and apportioned to this State under Article provision of law, for taxable years beginning on or 3 of this Act but for that exclusion, and the after January 1, 2017, no taxpayer may claim a denominator of which is the total amount of credit under this Section if the taxpayer's adjusted discharge of indebtedness income excluded from gross income for the taxable year exceeds (i) gross income under Section 108(a) of the Internal $500,000, in the case of spouses filing a joint federal Revenue Code for the taxable year. The reduction tax return, or (ii) $250,000, in the case of all other required under this subsection (c) shall be made taxpayers. after the determination of Illinois net income for the Sec. 208.1. Homeowners’ Tax Relief taxable year in which the indebtedness is Rebate. discharged. (d) In the case of a corporation (other than (a) The Department shall pay a rebate to taxpayers in the amount of the Illinois income tax a Subchapter S corporation), no carryover deduction credit allowed under Section 208 with respect to the shall be allowed under this Section for any taxable taxpayer’s 1999 Illinois income tax return for year ending after December 31, 2010 and prior to residential real property taxes paid on the principal December 31, 2012, and no carryover deduction shall exceed $100,000 for any taxable year ending residence of the taxpayer. The rebate shall not, on or after December 31, 2012 and prior to however, exceed $300 per principal residence. The rebate shall be paid to all eligible taxpayers who December 31, 2014; provided that, for purposes of have filed a 1999 Illinois income tax return on or determining the taxable years to which a net loss before October 17, 2000. may be carried under subsection (a) of this Section, no taxable year for which a deduction is disallowed (b) Before June 30, 2000, the Comptroller under this subsection, or for which the deduction shall order transferred and the Treasurer shall would exceed $100,000 if not for this subsection, transfer $280,000,000 from the Tobacco Settlement shall be counted. Recovery Fund to the Homeowners’ Tax Relief Fund, a special fund in the State Treasury. Subject (e) In the case of a residual interest holder to appropriation, the Department shall make the in a real estate mortgage investment conduit subject to Section 860E of the Internal Revenue Code, the rebate payments out of the Homeowners’ Tax Relief net loss in subsection (a) shall be equal to: Fund. (c) The Department shall certify the names (1) the amount computed under subsection of the taxpayers whose returns were filed on or (a), without regard to this subsection (e), or if that before July 17, 2000 and the rebate amounts to the amount is positive, zero; Comptroller by August 15, 2000. The Comptroller
42 As Amended Through Public Act 100-555
shall mail the rebate warrants to these taxpayers by such information regarding the taxpayer's October 17, 2000. participation in a qualifying TECH-PREP program as the Department of Revenue may require by (d) The Department shall certify the names regulation. of the taxpayers whose returns were filed after July 17, 2000 and on or before October 17, 2000 and the (d) This Section does not apply to those rebate amounts to the Comptroller by November 17, programs with national standards that have been or 2000. The Comptroller shall mail the rebate in the future are approved by the U.S. Department warrants to these taxpayers by December 15, 2000. of Labor, Bureau of Apprenticeship Training or any federal agency succeeding to the responsibilities of (e) Any unencumbered amount in the that Bureau. (Source: P.A. 88-505; 89-399, eff. 8- Homeowners’ Tax Relief Fund on January 1, 2001 20-95.) shall be transferred to the Budget Stabilization Fund, a special fund in the State Treasury, and any Sec. 210. Dependent Care Assistance amount remaining in the Homeowners’ Tax Relief Program Tax Credit. Fund on July 1, 2001 shall be transferred to the (a) Beginning with tax years ending on or Budget Stabilization Fund. after June 30, 1995, each taxpayer who is primarily Sec. 209. Tax Credit for "TECH-PREP" engaged in manufacturing is entitled to a credit youth vocational programs. against the tax imposed by subsections (a) and (b) of Section 201 in an amount equal to 5% of the amount (a) Beginning with tax years ending on or of expenditures by the taxpayer in the tax year for after June 30, 1995, every taxpayer who is primarily which the credit is claimed, reported pursuant to engaged in manufacturing is allowed a credit against Section 129(d)(7) of the Internal Revenue Code, to the tax imposed by subsections (a) and (b) of Section provide in the Illinois premises of the taxpayer's 201 in an amount equal to 20% of the taxpayer's workplace an on-site facility dependent care direct payroll expenditures for which a credit has not assistance program under Section 129 of the Internal already been claimed under subsection (j) of Section Revenue Code. 201 of this Act, in the tax year for which the credit is claimed, for cooperative secondary school youth (b) If the amount of credit exceeds the tax vocational programs in Illinois which are certified liability for the year, the excess may be carried as qualifying TECH-PREP programs by the State forward and applied to the tax liability of the 2 Board of Education because the programs prepare taxable years following the excess credit year. The students to be technically skilled workers and meet credit shall be applied to the earliest year for which the performance standards of business and industry there is a tax liability. If there are credits from more and the admission standards of higher education. than one tax year that are available to offset a The credit may also be claimed for personal services liability, the earlier credit shall be applied first. rendered to the taxpayer by a TECH-PREP student (c) A taxpayer claiming the credit provided or instructor (i) which would be subject to the by this Section shall maintain and record such provisions of Article 7 of this Act if the student or information as the Department may require by instructor was an employee of the taxpayer and (ii) regulation regarding the dependent care assistance for which no credit under this Section is claimed by program for which credit is claimed. When claiming another taxpayer. the credit provided by this Section, the taxpayer (b) If the amount of the credit exceeds the shall provide such information regarding the tax liability for the year, the excess may be carried taxpayer's provision of a dependent care assistance forward and applied to the tax liability of the 2 program under Section 129 of the Internal Revenue taxable years following the excess credit year. The Code. (Source: P.A. 88-505.) credit shall be applied to the earliest year for which Sec. 210.5. Tax credit for employee child there is a tax liability. If there are credits from more care. than one tax year that are available to offset a liability, the earlier credit shall be applied first. (a) Each corporate taxpayer is entitled to a credit against the tax imposed by subsections (a) and (c) A taxpayer claiming the credit provided (b) of Section 201 in an amount equal to (i) for by this Section shall maintain and record such taxable years ending on or after December 31, 2000 information regarding its participation in a and on or before December 31, 2004 and for taxable qualifying TECH-PREP program as the Department years ending on or after December 31, 2007, 30% of may require by regulation. When claiming the credit the start-up costs expended by the corporate provided by this Section, the taxpayer shall provide
43 As Amended Through Public Act 100-555
taxpayer to provide a child care facility for the Department of Commerce and Community Affairs, children of its employees and (ii) for taxable years shall prescribe rules to enforce and administer the ending on or after December 31, 2000, 5% of the provisions of this Section. This Section is exempt annual amount paid by the corporate taxpayer in from the provisions of Section 250 of this Act. providing the child care facility for the children of The credit shall be subject to the conditions its employees. The provisions of Section 250 do not set forth in the Agreement and the following apply to the credits allowed under this Section. If the limitations: 5% credit authorized under item (ii) of this subsection is claimed, the 5% credit authorized (1) The tax credit shall not exceed the under Section 210 cannot also be claimed. Incremental Income Tax (as defined in Section 5-5 of the Economic Development for a Growing To receive the tax credit under this Section Economy Tax Credit Act) with respect to the a corporate taxpayer may either independently project. provide and operate a child care facility for the children of its employees or it may join in a (2) The amount of the credit allowed partnership with one or more other corporations to during the tax year plus the sum of all amounts jointly provide and operate a child care facility for allowed in prior years shall not exceed 100% of the the children of employees of the corporations in the aggregate amount expended by the Taxpayer during partnership. all prior tax years on approved costs defined by Agreement. (b) The tax credit may not reduce the taxpayer's liability to less than zero. If the amount of (3) The amount of the credit shall be the tax credit exceeds the tax liability for the year, determined on an annual basis. Except as applied in the excess may be carried forward and applied to the a carryover year pursuant to Section 211(4) of this tax liability of the 5 taxable years following the Act, the credit may not be applied against any State excess credit year. The credit must be applied to the income tax liability in more than 10 taxable years; earliest year for which there is a tax liability. If there provided, however, that (i) an eligible business are credits from more than one tax year that are certified by the Department of Commerce and available to offset a liability, then the earlier credit Community Affairs under the Corporate must be applied first. Headquarters Relocation Act may not apply the credit against any of its State income tax liability in (c) As used in this Section, "start-up costs" more than 15 taxable years and (ii) credits allowed means planning, site-preparation, construction, to that eligible business are subject to the conditions renovation, or acquisition of a child care facility. As and requirements set forth in Sections 5-35 and 5-45 used in this Section, "child care facility" is limited of the Economic Development for a Growing to a child care facility located in Illinois. Economy Tax Credit Act. (d) A corporate taxpayer claiming the (4) The credit may not exceed the amount credit provided by this Section shall maintain and of taxes imposed pursuant to subsections (a) and (b) record such information as the Department may of Section 201 of this Act. Any credit that is unused require by rule regarding the child care facility for in the year the credit is computed may be carried which the credit is claimed. forward and applied to the tax liability of the 5 Sec. 211. Economic Development for a taxable years following the excess credit year. The Growing Economy Tax Credit. credit shall be applied to the earliest year for which there is a tax liability. If there are credits from more For tax years beginning on or after January than one tax year that are available to offset a 1, 1999, a Taxpayer who has entered an Agreement liability, the earlier credit shall be applied first. under the Economic Development for a Growing Economy Tax Credit Act is entitled to a credit (5) No credit shall be allowed with respect against the taxes imposed under subsections (a) and to any Agreement for any taxable year ending after (b) of Section 201 of this Act in an amount to be the Noncompliance Date. Upon receiving determined in the Agreement. If the Taxpayer is a notification by the Department of Commerce and partnership or Subchapter S corporation, the credit Community Affairs of the noncompliance of a shall be allowed to the partners or shareholders in Taxpayer with an Agreement, the Department shall accordance with the determination of income and notify the Taxpayer that no credit is allowed with distributive share of income under Sections 702 and respect to that Agreement for any taxable year 704 and subchapter S of the Internal Revenue Code. ending after the Noncompliance Date, as stated in The Department, in cooperation with the such notification. If any credit has been allowed
44 As Amended Through Public Act 100-555
with respect to an Agreement for a taxable year Sec. 213. Film production services ending after the Noncompliance Date for that credit. Agreement, any refund paid to the Taxpayer for that Film production services credit. For tax taxable year shall, to the extent of that credit years beginning on or after January 1, 2004, a allowed, be an erroneous refund within the meaning taxpayer who has been awarded a tax credit under of Section 912 of this Act. the Film Production Services Tax Credit Act or (6) For purposes of this Section, the terms under the Film Production Services Tax Credit Act "Agreement", "Incremental Income Tax", and of 2008 is entitled to a credit against the taxes "Noncompliance Date" have the same meaning as imposed under subsections (a) and (b) of Section when used in the Economic Development for a 201 of this Act in an amount determined by the Growing Economy Tax Credit Act. (Source: P.A. Department of Commerce and Economic 91-476, eff. 8-11-99.) Opportunity under those Acts. If the taxpayer is a partnership or Subchapter S corporation, the credit Sec. 212. Earned income tax credit. is allowed to the partners or shareholders in With respect to the federal earned income accordance with the determination of income and tax credit allowed for the taxable year under Section distributive share of income under Sections 702 and 32 of the federal Internal Revenue Code, 26 U.S.C. 704 and Subchapter S of the Internal Revenue Code. 32, each individual taxpayer is entitled to a credit A transfer of this credit may be made by against the tax imposed by subsections (a) and (b) of the taxpayer earning the credit within one year after Section 201 in an amount equal to (i) 5% of the the credit is awarded in accordance with rules federal tax credit for each taxable year beginning on adopted by the Department of Commerce and or after January 1, 2000 and ending prior to Economic Opportunity. December 31, 2012, (ii) 7.5% of the federal tax credit for each taxable year beginning on or after The Department, in cooperation with the January 1, 2012 and ending prior to December 31, Department of Commerce and Economic 2013, (iii) 10% of the federal tax credit for each Opportunity, must prescribe rules to enforce and taxable year beginning on or after January 1, 2013 administer the provisions of this Section. This and beginning prior to January 1, 2017, (iv) 14% of Section is exempt from the provisions of Section the federal tax credit for each taxable year beginning 250 of this Act. on or after January 1, 2017 and beginning prior to The credit may not be carried back. If the January 1, 2018, and (v) 18% of the federal tax amount of the credit exceeds the tax liability for the credit for each taxable year beginning on or after year, the excess may be carried forward and applied January 1, 2018. to the tax liability of the 5 taxable years following For a non-resident or part-year resident, the the excess credit year. The credit shall be applied to amount of the credit under this Section shall be in the earliest year for which there is a tax liability. If proportion to the amount of income attributable to there are credits from more than one tax year that are this State. available to offset a liability, the earlier credit shall be applied first. In no event shall a credit under this (b) For taxable years beginning before Section reduce the taxpayer's liability to less than January 1, 2003, in no event shall a credit under this zero. Section reduce the taxpayer's liability to less than zero. For each taxable year beginning on or after Sec. 214. Tax credit for affordable January 1, 2003, if the amount of the credit exceeds housing donations. the income tax liability for the applicable tax year, (a) Beginning with taxable years ending on then the excess credit shall be refunded to the or after December 31, 2001 and until the taxable taxpayer. The amount of a refund shall not be year ending on December 31, 2021, a taxpayer who included in the taxpayer's income or resources for makes a donation under Section 7.28 of the Illinois the purposes of determining eligibility or benefit Housing Development Act is entitled to a credit level in any means-tested benefit program against the tax imposed by subsections (a) and (b) of administered by a governmental entity unless Section 201 in an amount equal to 50% of the value required by federal law. of the donation. Partners, shareholders of subchapter (c) This Section is exempt from the S corporations, and owners of limited liability provisions of Section 250. companies (if the limited liability company is treated as a partnership for purposes of federal and State income taxation) are entitled to a credit under
45 As Amended Through Public Act 100-555
this Section to be determined in accordance with the income under Sections 702 and 704 and Subchapter determination of income and distributive share of S of the Internal Revenue Code. income under Sections 702 and 703 and subchapter (b) For purposes of this Section, "qualified S of the Internal Revenue Code. Persons or entities wages": not subject to the tax imposed by subsections (a) and (b) of Section 201 and who make a donation under (1) includes only wages that are subject to Section 7.28 of the Illinois Housing Development federal unemployment tax under Section 3306 of the Act are entitled to a credit as described in this Internal Revenue Code, without regard to any dollar subsection and may transfer that credit as described limitation contained in that Section; in subsection (c). (2) does not include any amounts paid or (b) If the amount of the credit exceeds the incurred by an employer for any period to any tax liability for the year, the excess may be carried qualified ex-offender for whom the employer forward and applied to the tax liability of the 5 receives federally funded payments for on-the-job taxable years following the excess credit year. The training of that qualified ex-offender for that period; tax credit shall be applied to the earliest year for and which there is a tax liability. If there are credits for (3) includes only wages attributable to more than one year that are available to offset a service rendered during the one-year period liability, the earlier credit shall be applied first. beginning with the day the qualified ex-offender (c) The transfer of the tax credit allowed begins work for the employer. under this Section may be made (i) to the purchaser of land that has been designated solely for If the taxpayer has received any payment affordable housing projects in accordance with the from a program established under Section 482(e)(1) of the federal Social Security Act with respect to a Illinois Housing Development Act or (ii) to another qualified ex-offender, then, for purposes of donor who has also made a donation in accordance calculating the credit under this Section, the amount with Section 7.28 of the Illinois Housing of the qualified wages paid to that qualified ex- Development Act. offender must be reduced by the amount of the (d) A taxpayer claiming the credit provided payment. by this Section must maintain and record any (c) For purposes of this Section, "qualified information that the Department may require by ex-offender" means any person who: regulation regarding the project for which the credit is claimed. When claiming the credit provided by (1) has been convicted of a crime in this this Section, the taxpayer must provide information State or of an offense in any other jurisdiction, not regarding the taxpayer's donation to the project including any offense or attempted offense that under the Illinois Housing Development Act. would subject a person to registration under the Sex Offender Registration Act; Sec. 216. Credit for wages paid to ex- felons. (2) was sentenced to a period of incarceration in an Illinois adult correctional center; (a) For each taxable year beginning on or after January 1, 2007, each taxpayer is entitled to a and credit against the tax imposed by subsections (a) and (3) was hired by the taxpayer within three (b) of Section 201 of this Act in an amount equal to years after being released from an Illinois adult 5% of qualified wages paid by the taxpayer during correctional center. the taxable year to one or more Illinois residents who are qualified ex-offenders. The total credit (d) In no event shall a credit under this allowed to a taxpayer with respect to each qualified Section reduce the taxpayer's liability to less than ex-offender may not exceed $1500 for all taxable zero. If the amount of the credit exceeds the tax years. For partners, shareholders of Subchapter S liability for the year, the excess may be carried corporations, and owners of limited liability forward and applied to the tax liability of the 5 companies, if the liability company is treated as a taxable years following the excess credit year. The partnership for purposes of federal and State income tax credit shall be applied to the earliest year for taxation, there shall be allowed a credit under this which there is a tax liability. If there are credits for Section to be determined in accordance with the more than one year that are available to offset a determination of income and distributive share of liability, the earlier credit shall be applied first.
46 As Amended Through Public Act 100-555
(e) This Section is exempt from the more than one year that are available to offset a provisions of Section 250. liability, the earlier credit shall be applied first. (Source: P.A. 94-1067, eff. 8-1-06.)". Sec. 217. Credit for wages paid to qualified veterans. (d) A taxpayer who claims a credit under this Section for a taxable year with respect to a (a) For each taxable year beginning on or veteran shall not be allowed a credit under Section after January 1, 2007 and ending on or before 217.1 of this Act with respect to the same veteran December 30, 2010, each taxpayer is entitled to a for that taxable year. credit against the tax imposed by subsections (a) and (b) of Section 201 of this Act in an amount equal to Sec. 217.1. Credit for wages paid to 5%, but in no event to exceed $600, of the gross qualified unemployed veterans. wages paid by the taxpayer to a qualified veteran in (a) For each taxable year ending on or after the course of that veteran's sustained employment December 31, 2012 and on or before December 31, during the taxable year. For each taxable year 2016, each taxpayer is entitled to a credit against the beginning on or after January 1, 2010, each taxpayer tax imposed by subsections (a) and (b) of Section is entitled to a credit against the tax imposed by 201 of this Act in the amount equal to 20%, but in subsections (a) and (b) of Section 201 of this Act in no event to exceed $5,000, of the gross wages paid an amount equal to 10%, but in no event to exceed by the taxpayer to a qualified veteran in the course $1,200, of the gross wages paid by the taxpayer to a of that veteran's sustained employment during each qualified veteran in the course of that veteran's taxable year ending on or after the date of hire by sustained employment during the taxable year. For the taxpayer if that veteran was unemployed for an partners, shareholders of Subchapter S corporations, aggregate period of 4 weeks or more during the 6- and owners of limited liability companies, if the week period ending on the Saturday immediately liability company is treated as a partnership for preceding the date he or she was hired by the purposes of federal and State income taxation, there taxpayer. For partners, shareholders of Subchapter S shall be allowed a credit under this Section to be corporations, and owners of limited liability determined in accordance with the determination of companies, if the liability company is treated as a income and distributive share of income under partnership for the purposes of federal and State Sections 702 and 704 and Subchapter S of the income taxation, there shall be allowed a credit Internal Revenue Code. under this Section to be determined in accordance (b) For purposes of this Section: with the determination of income and distributive share of income under Sections 702 and 704 and "Qualified veteran" means an Illinois Subchapter S of the Internal Revenue Code. resident who: (i) was a member of the Armed Forces of the United States, a member of the Illinois (b) For the purposes of this Section: National Guard, or a member of any reserve "Qualified veteran" means an Illinois component of the Armed Forces of the United resident who: (i) was a member of the Armed Forces States; (ii) served on active duty in connection with of the United States, a member of the Illinois Operation Desert Storm, Operation Enduring National Guard, or a member of any reserve Freedom, or Operation Iraqi Freedom; (iii) has component of the Armed Forces of the United provided, to the taxpayer, documentation showing States; (ii) served on active duty on or after that he or she was honorably discharged; and (iv) September 11, 2001; (iii) has provided, to the was initially hired by the taxpayer on or after taxpayer, documentation showing that he or she was January 1, 2007. honorably discharged; and (iv) was initially hired by "Sustained employment" means a period of the taxpayer on or after June 1, 2012. employment that is not less than 185 days during the "Sustained employment" means (i) a taxable year. period of employment that is not less than 185 days (c) In no event shall a credit under this following the date of hire or (ii) in the case of a Section reduce the taxpayer's liability to less than veteran who was unemployed for an aggregate zero. If the amount of the credit exceeds the tax period of 6 months or more during the one-year liability for the year, the excess may be carried period ending on the date the veteran was hired by forward and applied to the tax liability of the 5 the taxpayer, a period of employment that is more taxable years following the excess credit year. The than 30 days following the date of hire. The period tax credit shall be applied to the earliest year for of sustained employment may be completed after which there is a tax liability. If there are credits for
47 As Amended Through Public Act 100-555
the end of the taxable year in which the veteran is applied to the tax liability of the 5 taxable years hired. following the excess credit year. The tax credit shall be applied to the earliest year for which there is a tax A veteran is "unemployed" for a week if he liability. If there are credits for more than one year or she (i) has received unemployment benefits (as that are available to offset a liability, the earlier defined in Section 202 of the Unemployment credit shall be applied first. Insurance Act, including but not limited to federally funded unemployment benefits) for the week, or (ii) (d) A taxpayer claiming the credit under has not been employed since being honorably this Section must maintain and record any discharged. information that the Illinois Student Assistance Commission, the Office of the State Treasurer, or (c) In no event shall a credit under this the Department may require regarding the matching Section reduce a taxpayer's liability to less than contribution for which the credit is claimed. zero. If the amount of credit exceeds the tax liability for the year, the excess may be carried forward and Sec. 219. Historic preservation credit. applied to the tax liability for the 5 taxable years For tax years beginning on or after January following the excess credit year. The tax credit shall 1, 2010 and ending on or before December 31, 2015, be applied to the earliest year for which there is a tax a taxpayer who qualifies for a credit under the liability. If there are credits for more than one year Historic Preservation Tax Credit Pilot Program Act that are available to offset liability, the earlier credit is entitled to a credit against the taxes imposed under shall be applied first. subsections (a) and (b) of Section 201 of this Act as (d) A taxpayer who claims a credit under provided in that Act. If the taxpayer is a partnership this Section for a taxable year with respect to a or Subchapter S corporation, the credit shall be veteran shall not be allowed a credit under Section allowed to the partners or shareholders in 217 of this Act with respect to the same veteran for accordance with the determination of income and that taxable year. distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code. Sec. 218. Credit for student-assistance contributions. If the amount of any tax credit awarded under this Section exceeds the qualified taxpayer's (a) For taxable years ending on or after income tax liability for the year in which the December 31, 2009 and on or before December 30, qualified rehabilitation plan was placed in service, 2020, each taxpayer who, during the taxable year, the excess amount may be carried forward or back makes a contribution (i) to a specified individual as provided in the Historic Preservation Tax Credit College Savings Pool Account under Section 16.5 Pilot Program Act. of the State Treasurer Act or (ii) to the Illinois Prepaid Tuition Trust Fund in an amount matching Sec. 220. Angel investment credit. a contribution made in the same taxable year by an (a) As used in this Section: employee of the taxpayer to that Account or Fund is entitled to a credit against the tax imposed under "Applicant" means a corporation, subsections (a) and (b) of Section 201 in an amount partnership, limited liability company, or a natural equal to 25% of that matching contribution, but not person that makes an investment in a qualified new to exceed $500 per contributing employee per business venture. The term "applicant" does not taxable year. include a corporation, partnership, limited liability company, or a natural person who has a direct or (b) For partners, shareholders of indirect ownership interest of at least 51% in the Subchapter S corporations, and owners of limited profits, capital, or value of the investment or a liability companies, if the liability company is related member. treated as a partnership for purposes of federal and State income taxation, there is allowed a credit "Claimant" means an applicant certified by under this Section to be determined in accordance the Department who files a claim for a credit under with the determination of income and distributive this Section. share of income under Sections 702 and 704 and "Department" means the Department of Subchapter S of the Internal Revenue Code. Commerce and Economic Opportunity. (c) The credit may not be carried back. If "Investment" means money (or its the amount of the credit exceeds the tax liability for equivalent) given to a qualified new business the year, the excess may be carried forward and venture, at a risk of loss, in consideration for an
48 As Amended Through Public Act 100-555
equity interest of the qualified new business venture. provided in this Section, a claimant may claim, as a The Department may adopt rules to permit certain credit against the tax imposed under subsections (a) forms of contingent equity investments to be and (b) of Section 201 of this Act, an amount equal considered eligible for a tax credit under this to 25% of the claimant's investment made directly in Section. a qualified new business venture. In order for an investment in a qualified new business venture to be "Qualified new business venture" means a eligible for tax credits, the business must have business that is registered with the Department applied for and received certification under under this Section. subsection (e) for the taxable year in which the "Related member" means a person that, investment was made prior to the date on which the with respect to the applicant, is any one of the investment was made. The credit under this Section following: may not exceed the taxpayer's Illinois income tax liability for the taxable year. If the amount of the (1) An individual, if the individual and the credit exceeds the tax liability for the year, the members of the individual's family (as defined in excess may be carried forward and applied to the tax Section 318 of the Internal Revenue Code) own liability of the 5 taxable years following the excess directly, indirectly, beneficially, or constructively, credit year. The credit shall be applied to the earliest in the aggregate, at least 50% of the value of the year for which there is a tax liability. If there are outstanding profits, capital, stock, or other credits from more than one tax year that are ownership interest in the applicant. available to offset a liability, the earlier credit shall (2) A partnership, estate, or trust and any be applied first. In the case of a partnership or partner or beneficiary, if the partnership, estate, or Subchapter S Corporation, the credit is allowed to trust and its partners or beneficiaries own directly, the partners or shareholders in accordance with the indirectly, beneficially, or constructively, in the determination of income and distributive share of aggregate, at least 50% of the profits, capital, stock, income under Sections 702 and 704 and Subchapter or other ownership interest in the applicant. S of the Internal Revenue Code. (3) A corporation, and any party related to (c) The minimum amount an applicant the corporation in a manner that would require an must invest in any single qualified new business attribution of stock from the corporation under the venture in order to be eligible for a credit under this attribution rules of Section 318 of the Internal Section is $10,000. The maximum amount of an Revenue Code, if the applicant and any other related applicant's total investment made in any single member own, in the aggregate, directly, indirectly, qualified new business venture that may be used as beneficially, or constructively, at least 50% of the the basis for a credit under this Section is value of the corporation's outstanding stock. $2,000,000. (4) A corporation and any party related to (d) The Department shall implement a that corporation in a manner that would require an program to certify an applicant for an angel attribution of stock from the corporation to the party investment credit. Upon satisfactory review, the or from the party to the corporation under the Department shall issue a tax credit certificate stating attribution rules of Section 318 of the Internal the amount of the tax credit to which the applicant Revenue Code, if the corporation and all such is entitled. The Department shall annually certify related parties own, in the aggregate, at least 50% of that: (i) each qualified new business venture that the profits, capital, stock, or other ownership interest receives an angel investment under this Section has in the applicant. maintained a minimum employment threshold, as defined by rule, in the State (and continues to (5) A person to or from whom there is maintain a minimum employment threshold in the attribution of stock ownership in accordance with State for a period of no less than 3 years from the Section 1563(e) of the Internal Revenue Code, issue date of the last tax credit certificate issued by except that for purposes of determining whether a the Department with respect to such business person is a related member under this paragraph, pursuant to this Section); and (ii) the claimant's "20%" shall be substituted for "5%" whenever "5%" investment has been made and remains, except in appears in Section 1563(e) of the Internal Revenue the event of a qualifying liquidity event, in the Code. qualified new business venture for no less than 3 (b) For taxable years beginning after years. December 31, 2010, and ending on or before December 31, 2021, subject to the limitations
49 As Amended Through Public Act 100-555
If an investment for which a claimant is investment in this State, or both, as determined by allowed a credit under subsection (b) is held by the the Department, and either of the following apply: claimant for less than 3 years, other than as a result (A) it is principally engaged in innovation of a permitted sale of the investment to person who in any of the following: manufacturing; is not a related member, the claimant shall pay to the biotechnology; nanotechnology; communications; Department of Revenue, in the manner prescribed agricultural sciences; clean energy creation or by the Department of Revenue, the aggregate storage technology; processing or assembling amount of the disqualified credits that the claimant products, including medical devices, received related to the subject investment. pharmaceuticals, computer software, computer If the Department determines that a hardware, semiconductors, other innovative qualified new business venture failed to maintain a technology products, or other products that are minimum employment threshold in the State produced using manufacturing methods that are through the date which is 3 years from the issue date enabled by applying proprietary technology; or of the last tax credit certificate issued by the providing services that are enabled by applying Department with respect to the subject business proprietary technology; or pursuant to this Section, the claimant or claimants (B) it is undertaking pre- shall pay to the Department of Revenue, in the commercialization activity related to proprietary manner prescribed by the Department of Revenue, technology that includes conducting research, the aggregate amount of the disqualified credits that developing a new product or business process, or claimant or claimants received related to developing a service that is principally reliant on investments in that business. applying proprietary technology; (e) The Department shall implement a (4) it is not principally engaged in real program to register qualified new business ventures estate development, insurance, banking, lending, for purposes of this Section. A business desiring lobbying, political consulting, professional services registration under this Section shall be required to provided by attorneys, accountants, business submit a full and complete application to the consultants, physicians, or health care consultants, Department. A submitted application shall be wholesale or retail trade, leisure, hospitality, effective only for the taxable year in which it is transportation, or construction, except construction submitted, and a business desiring registration under of power production plants that derive energy from this Section shall be required to submit a separate a renewable energy resource, as defined in Section application in and for each taxable year for which 1 of the Illinois Power Agency Act; the business desires registration. Further, if at any time prior to the acceptance of an application for (5) at the time it is first certified: registration under this Section by the Department (A) it has fewer than 100 employees; one or more events occurs which makes the information provided in that application materially (B) it has been in operation in Illinois for false or incomplete (in whole or in part), the not more than 10 consecutive years prior to the year business shall promptly notify the Department of the of certification; and same. Any failure of a business to promptly provide the foregoing information to the Department may, at (C) it has received not more than the discretion of the Department, result in a $10,000,000 in aggregate investments; revocation of a previously approved application for (5.1) it agrees to maintain a minimum that business, or disqualification of the business employment threshold in the State of Illinois prior from future registration under this Section, or both. to the date which is 3 years from the issue date of The Department may register the business only if all the last tax credit certificate issued by the of the following conditions are satisfied: Department with respect to that business pursuant to (1) it has its principal place of business in this Section; this State; (6) (blank); and (2) at least 51% of the employees (7) it has received not more than employed by the business are employed in this $4,000,000 in investments that qualified for tax State; credits under this Section. (3) the business has the potential for (f) The Department, in consultation with increasing jobs in this State, increasing capital the Department of Revenue, shall adopt rules to
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administer this Section. The aggregate amount of (A) the total number of applicants and the the tax credits that may be claimed under this total number of claimants, including the amount of Section for investments made in qualified new each tax credit certificate awarded to a claimant business ventures shall be limited at $10,000,000 under this Section in the prior calendar year; per calendar year, of which $500,000 shall be (B) the total number of applications from reserved for investments made in qualified new businesses seeking registration under this Section, business ventures which are "minority owned the total number of new qualified business ventures businesses", "female owned businesses", or registered by the Department, and the aggregate "businesses owned by a person with a disability" (as amount of investment upon which tax credit those terms are used and defined in the Business certificates were issued in the prior calendar year; Enterprise for Minorities, Females, and Persons and with Disabilities Act), and an additional $500,000 shall be reserved for investments made in qualified (C) the total amount of tax credit new business ventures with their principal place of certificates sought by applicants, the amount of each business in counties with a population of not more tax credit certificate issued to a claimant, the than 250,000. The foregoing annual allowable aggregate amount of all tax credit certificates issued amounts shall be allocated by the Department, on a in the prior calendar year and the aggregate amount per calendar quarter basis and prior to the of tax credit certificates issued as authorized under commencement of each calendar year, in such this Section for all calendar years. proportion as determined by the Department, provided that: (i) the amount initially allocated by (i) For each business seeking registration the Department for any one calendar quarter shall under this Section after December 31, 2016, the Department shall require the business to include in not exceed 35% of the total allowable amount; and its application the North American Industry (ii) any portion of the allocated allowable amount Classification System (NAICS) code applicable to remaining unused as of the end of any of the first 2 calendar quarters of a given calendar year shall be the business and the number of employees of the rolled into, and added to, the total allocated amount business at the time of application. Each business registered by the Department as a qualified new for the next available calendar quarter. business venture that receives an investment giving (g) A claimant may not sell or otherwise rise to the issuance of a tax credit certificate transfer a credit awarded under this Section to pursuant to this Section shall, for each of the 3 years another person. following the issue date of the last tax credit certificate issued by the Department with respect to (h) On or before March 1 of each year, the such business pursuant to this Section, report to the Department shall report to the Governor and to the Department the following: General Assembly on the tax credit certificates awarded under this Section for the prior calendar (1) the number of employees and the year. location at which those employees are employed, both as of the end of each year; (1) This report must include, for each tax credit certificate awarded: (2) the amount of additional new capital investment raised as of the end of each year, if any; (A) the name of the claimant and the and amount of credit awarded or allocated to that claimant; (3) the terms of any liquidity event occurring during such year; for the purposes of this (B) the name and address (including the Section, a "liquidity event" means any event that county) of the qualified new business venture that would be considered an exit for an illiquid received the investment giving rise to the credit, the investment, including any event that allows the North American Industry Classification System equity holders of the business (or any material (NAICS) code applicable to that qualified new portion thereof) to cash out some or all of their business venture, and the number of employees of respective equity interests. the qualified new business venture; and
(C) the date of approval by the Department of each claimant's tax credit certificate. (2) The report must also include:
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Sec. 221. Rehabilitation costs; qualified (d) As used in this Section, the following historic properties; River Edge terms have the following meanings. Redevelopment Zone. "Qualified expenditure" means all the costs (a) For taxable years beginning on or after and expenses defined as qualified rehabilitation January 1, 2012 and ending prior to January 1, 2022, expenditures under Section 47 of the federal Internal there shall be allowed a tax credit against the tax Revenue Code that were incurred in connection with imposed by subsections (a) and (b) of Section 201 a qualified historic structure. in an amount equal to 25% of qualified expenditures "Qualified historic structure" means a incurred by a qualified taxpayer during the taxable certified historic structure as defined under Section year in the restoration and preservation of a 47 (c)(3) of the federal Internal Revenue Code. qualified historic structure located in a River Edge Redevelopment Zone pursuant to a qualified "Qualified rehabilitation plan" means a rehabilitation plan, provided that the total amount of project that is approved by the Historic Preservation such expenditures (i) must equal $5,000 or more and Agency as being consistent with the standards in (ii) must exceed 50% of the purchase price of the effect on the effective date of this amendatory Act property. of the 97th General Assembly for rehabilitation as adopted by the federal Secretary of the Interior. (b) To obtain a tax credit pursuant to this Section, the taxpayer must apply with the "Qualified taxpayer" means the owner of Department of Commerce and Economic the qualified historic structure or any other person Opportunity. The Department of Commerce and who qualifies for the federal rehabilitation credit Economic Opportunity, in consultation with the allowed by Section 47 of the federal Internal Historic Preservation Agency, shall determine the Revenue Code with respect to that qualified historic amount of eligible rehabilitation costs and expenses. structure. Partners, shareholders of subchapter S The Historic Preservation Agency shall determine corporations, and owners of limited liability whether the rehabilitation is consistent with the companies (if the limited liability company is standards of the Secretary of the United States treated as a partnership for purposes of federal and Department of the Interior for rehabilitation. Upon State income taxation) are entitled to a credit under completion and review of the project, the this Section to be determined in accordance with the Department of Commerce and Economic determination of income and distributive share of Opportunity shall issue a certificate in the amount of income under Sections 702 and 703 and subchapter the eligible credits. At the time the certificate is S of the Internal Revenue Code, provided that issued, an issuance fee up to the maximum amount credits granted to a partnership, a limited liability of 2% of the amount of the credits issued by the company taxed as a partnership, or other multiple certificate may be collected from the applicant to owners of property shall be passed through to the administer the provisions of this Section. If partners, members, or owners respectively on a pro collected, this issuance fee shall be deposited into rata basis or pursuant to an executed agreement the Historic Property Administrative Fund, a special among the partners, members, or owners fund created in the State treasury. Subject to documenting any alternate distribution method. appropriation, moneys in the Historic Property Administrative Fund shall be evenly divided Sec. 222. Live theater production credit. between the Department of Commerce and (a) For tax years beginning on or after Economic Opportunity and the Historic January 1, 2012 and beginning prior to January 1, Preservation Agency to reimburse the Department 2022, a taxpayer who has received a tax credit award of Commerce and Economic Opportunity and the under the Live Theater Production Tax Credit Act is Historic Preservation Agency for the costs entitled to a credit against the taxes imposed under associated with administering this Section. The subsections (a) and (b) of Section 201 of this Act in taxpayer must attach the certificate to the tax return an amount determined under that Act by the on which the credits are to be claimed. The Department of Commerce and Economic Department of Commerce and Economic Opportunity. Opportunity may adopt rules to implement this Section. (b) If the taxpayer is a partnership, limited liability partnership, limited liability company, or (c) The tax credit under this Section may Subchapter S corporation, the tax credit award is not reduce the taxpayer's liability to less than zero. allowed to the partners, unit holders, or shareholders in accordance with the determination of income and
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distributive share of income under Sections 702 and liability. If there are credits from more than one tax 704 and Subchapter S of the Internal Revenue Code. year that are available to offset a liability, the earlier credit shall be applied first. In no event shall a credit (c) A sale, assignment, or transfer of the tax under this Section reduce the taxpayer's liability to credit award may be made by the taxpayer earning less than zero. the credit within one year after the credit is awarded in accordance with rules adopted by the Department Sec. 224. Invest in Kids credit. of Commerce and Economic Opportunity. (a) For taxable years beginning on or after (d) The Department of Revenue, in January 1, 2018 and ending before January 1, 2023, cooperation with the Department of Commerce and each taxpayer for whom a tax credit has been Economic Opportunity, shall adopt rules to enforce awarded by the Department under the Invest in Kids and administer the provisions of this Section. Act is entitled to a credit against the tax imposed under subsections (a) and (b) of Section 201 of this (e) The tax credit award may not be carried Act in an amount equal to the amount awarded under back. If the amount of the credit exceeds the tax the Invest in Kids Act. liability for the year, the excess may be carried forward and applied to the tax liability of the 5 tax (b) For partners, shareholders of years following the excess credit year. The tax credit subchapter S corporations, and owners of limited award shall be applied to the earliest year for which liability companies, if the liability company is there is a tax liability. If there are credits from more treated as a partnership for purposes of federal and than one tax year that are available to offset liability, State income taxation, the credit under this Section the earlier credit shall be applied first. In no event shall be determined in accordance with the may a credit under this Section reduce the taxpayer's determination of income and distributive share of liability to less than zero. income under Sections 702 and 704 and subchapter S of the Internal Revenue Code. Sec. 223. Hospital credit. (c) The credit may not be carried back and (a) For tax years ending on or after may not reduce the taxpayer's liability to less than December 31, 2012, a taxpayer that is the owner of zero. If the amount of the credit exceeds the tax a hospital licensed under the Hospital Licensing liability for the year, the excess may be carried Act, but not including an organization that is exempt forward and applied to the tax liability of the 5 from federal income taxes under the Internal taxable years following the excess credit year. The Revenue Code, is entitled to a credit against the tax credit shall be applied to the earliest year for taxes imposed under subsections (a) and (b) of which there is a tax liability. If there are credits for Section 201 of this Act in an amount equal to the more than one year that are available to offset the lesser of the amount of real property taxes paid liability, the earlier credit shall be applied first. during the tax year on real property used for hospital purposes during the prior tax year or the cost of free (d) A tax credit awarded by the Department or discounted services provided during the tax year under the Invest in Kids Act may not be claimed for pursuant to the hospital's charitable financial any qualified contribution for which the taxpayer assistance policy, measured at cost. claims a federal income tax deduction. (b) If the taxpayer is a partnership or Sec. 225. Credit for instructional Subchapter S corporation, the credit is allowed to materials and supplies. the partners or shareholders in accordance with the For taxable years beginning on and after determination of income and distributive share of January 1, 2017, a taxpayer shall be allowed a credit income under Sections 702 and 704 and Subchapter in the amount paid by the taxpayer during the S of the Internal Revenue Code. A transfer of this taxable year for instructional materials and supplies credit may be made by the taxpayer earning the with respect to classroom based instruction in a credit within one year after the credit is earned in qualified school, or $250, whichever is less, accordance with rules adopted by the Department. provided that the taxpayer is a teacher, instructor, The Department shall prescribe rules to enforce and counselor, principal, or aide in a qualified school for administer provisions of this Section. If the amount at least 900 hours during a school year. of the credit exceeds the tax liability for the year, then the excess credit may be carried forward and The credit may not be carried back and applied to the tax liability of the 5 taxable years may not reduce the taxpayer's liability to less than following the excess credit year. The credit shall be zero. If the amount of the credit exceeds the tax applied to the earliest year for which there is a tax liability for the year, the excess may be carried
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forward and applied to the tax liability of the 5 (c) If the taxpayer is a partnership or taxable years following the excess credit year. The Subchapter S corporation, the credit shall be tax credit shall be applied to the earliest year for allowed to the partners or shareholders in which there is a tax liability. If there are credits for accordance with the determination of income and more than one year that are available to offset a distributive share of income under Sections 702 and liability, the earlier credit shall be applied first. 704 and Subchapter S of the Internal Revenue Code. For purposes of this Section, the term (d) A taxpayer is not entitled to the credit "materials and supplies" means amounts paid for under this Section if the taxpayer receives a Natural instructional materials or supplies that are Disaster Homestead Exemption under Section 15- designated for classroom use in any qualified 173 of the Property Tax Code with respect to the school. For purposes of this Section, the term qualified real property as a result of the natural "qualified school" means a public school or non- disaster. public school located in Illinois. (e) The township assessor or, if the This Section is exempt from the provisions township assessor is unable to certify, the chief of Section 250. county assessment officer of the county in which the property is located, shall certify to the Department a Sec. 226. Natural disaster credit. listing of the properties located within the county (a) For taxable years that begin on or after that have been damaged as a result of the natural January 1, 2017 and begin prior to January 1, 2018, disaster (including the name and address of the each taxpayer who owns qualified real property property owner and the property index number or located in a county in Illinois that was declared a permanent index number (PIN) of each damage State disaster area by the Governor due to flooding property). in 2017 is entitled to a credit against the taxes (f) As used in this Section: imposed by subsections (a) and (b) of Section 201 of this Act in an amount equal to the lesser of $750 (1) "Qualified real property" means real or the deduction allowed (whether or not the property that is: (i) the taxpayer's principal residence taxpayer determines taxable income under or owned by a small business; (ii) damaged during subsection (b) of Section 63 of the Internal Revenue the taxable year as a result of a disaster; and (iii) not Code) with respect to the qualified property under used in a rental or leasing business. Section 165 of the Internal Revenue Code, (2) "Small business" has the meaning given determined without regard to the limitations to that term in Section 1-75 of the Illinois imposed under subsection (h) of that Section. The Administrative Procedure Act. township assessor or, if the township assessor is unable, the chief county assessment officer of the Sec. 250. Sunset Of Exemptions, Credits, county in which the property is located, shall issue a And Deductions. certificate to the taxpayer identifying the taxpayer's (a) The application of every exemption, property as damaged as a result of the natural credit, and deduction against tax imposed by this disaster. The certificate shall include the name and address of the property owner, as well as the Act that becomes law after the effective date of this property index number or permanent index number amendatory Act of 1994 shall be limited by a reasonable and appropriate sunset date. A taxpayer (PIN) of the damaged property. The taxpayer shall is not entitled to take the exemption, credit, or attach a copy of such certificate to the taxpayer's deduction for tax years beginning on or after the return for the taxable year for which the credit is sunset date. Except as provided in subsection (b) of allowed. this Section, if a reasonable and appropriate sunset (b) In no event shall a credit under this date is not specified in the Public Act that creates the Section reduce a taxpayer's liability to less than exemption, credit, or deduction, a taxpayer shall not zero. If the amount of credit exceeds the tax liability be entitled to take the exemption, credit, or for the year, the excess may be carried forward and deduction for tax years beginning on or after 5 years applied to the tax liability for the 5 taxable years after the effective date of the Public Act creating the following the excess credit year. The tax credit shall exemption, credit, or deduction and thereafter; be applied to the earliest year for which there is a tax provided, however, that in the case of any Public Act liability. If there are credits for more than one year authorizing the issuance of tax-exempt obligations that are available to offset liability, the earlier credit that does not specify a sunset date for the exemption shall be applied first. or deduction of income derived from the
54 As Amended Through Public Act 100-555
obligations, the exemption or deduction shall not (B) in the case of a corporation or a terminate until after the obligations have been paid partnership, shall be allocated to this State if the by the issuer. taxpayer had its commercial domicile in this State at the time such item was paid, incurred or accrued. (b) Notwithstanding the provisions of (Source: P.A. 82-609) subsection (a) of this Section, the sunset date of any exemption, credit, or deduction that is scheduled to Sec. 302. Compensation Paid To expire in 2011, 2012, or 2013 by operation of this Nonresidents. Section shall be extended by 5 years. (a) In general. All items of compensation (Source: P.A. 88-660, eff. 9-16-94; 89-460, paid in this State (as determined under Section eff. 5-24-96.) 304(a)(2)(B)) to an individual who is a nonresident at the time of such payment and all items of ARTICLE 3. ALLOCATION AND deduction directly allocable thereto, shall be APPORTIONMENT OF BASE INCOME. allocated to this State. Sec. 301. General Rule. (b) Reciprocal exemption. The Director (a) Residents. All items of income or may enter into an agreement with the taxing deduction which were taken into account in the authorities of any state which imposes a tax on or computation of base income for the taxable year by measured by income to provide that compensation a resident shall be allocated to this State. paid in such state to residents of this State shall be exempt from such tax; in such case, any (b) Part-year residents. All items of income compensation paid in this State to residents of such or deduction which were taken into account in the state shall not be allocated to this State. All computation of base income for the taxable year by reciprocal agreements shall be subject to the a part-year resident shall, for that part of the year the requirements of Section 2505-575 of the part-year resident was a resident of this State, be Department of Revenue Law (20 ILCS 2505/2505- allocated to this State and, for the remaining part of 575). the year, be allocated to this State only to the extent provided by Section 302, 303 or 304 (relating to (c) Cross references. compensation, nonbusiness income and business (1) For allocation of amounts received by income, respectively). nonresidents from certain employee trusts, see (c) Other persons. Section 301(b)(2). (1) In general. Any item of income or (2) For allocation of compensation by deduction which was taken into account in the residents, see Section 301(a). (Source: P.A. 77- computation of base income for the taxable year by 1379.) any person other than a resident and which is Sec. 303. Non-Business Income Of referred to in Section 302, 303 or 304 (relating to Persons Other Than Residents. compensation, nonbusiness income and business income, respectively) shall be allocated to this State (a) In general. Any item of capital gain or only to the extent provided by such section. loss, and any item of income from rents or royalties from real or tangible personal property, interest, (2) Unspecified items. Any item of income dividends, and patent or copyright royalties, and or deduction which was taken into account in the prizes awarded under the Illinois Lottery Law, to the computation of base income for the taxable year by extent such item constitutes nonbusiness income, any person other than a resident and which is not together with any item of deduction directly otherwise specifically allocated or apportioned allocable thereto, shall be allocated by any person pursuant to Section 302, 303 or 304 (including, other than a resident as provided in this Section. without limitation, interest, dividends, items of income taken into account under the provisions of (b) Capital gains and losses. Sections 401 through 425 of the Internal Revenue (1) Real property. Capital gains and losses Code, and benefit payments received by a from sales or exchanges of real property are beneficiary of a supplemental unemployment allocable to this State if the property is located in benefit trust which is referred to in Section this State. 501(c)(17) of the Internal Revenue Code): (2) Tangible personal property. Capital (A) in the case of an individual, trust or gains and losses from sales or exchanges of tangible estate, shall not be allocated to this State; and
55 As Amended Through Public Act 100-555
personal property are allocable to this State if, at the accrued, the taxpayer had its commercial domicile time of such sale or exchange: in this State. (A) The property had its situs in this State; (2) Utilization. or (A) A patent is utilized in a state to the (B) The taxpayer had its commercial extent that it is employed in production, fabrication, domicile in this State and was not taxable in the state manufacturing or other processing in the state or to in which the property had its situs. the extent that a patented product is produced in the state. If the basis of receipts from patent royalties (3) Intangibles. Capital gains and losses does not permit allocation to states or if the from sales or exchanges of intangible personal accounting procedures do not reflect states of property are allocable to this State if the taxpayer utilization, the patent is utilized in this State if the had its commercial domicile in this State at the time taxpayer has its commercial domicile in this State. of such sale or exchange. (B) A copyright is utilized in a state to the (c) Rents and royalties. extent that printing or other publication originates in (1) Real property. Rents and royalties from the state. If the basis of receipts from copyright real property are allocable to this State if the royalties does not permit allocation to states or if the property is located in this State. accounting procedures do not reflect states of utilization, the copyright is utilized in this State if (2) Tangible personal property. Rents and the taxpayer has its commercial domicile in this royalties from tangible personal property are State. allocable to this State: (e) Illinois lottery prizes. Prizes awarded (A) If and to the extent that the property is under the Illinois Lottery Law are allocable to this utilized in this State; or State. Payments received in taxable years ending on (B) In their entirety if, at the time such rents or after December 31, 2013, from the assignment of or royalties were paid or accrued, the taxpayer had a prize under Section 13.1 of the Illinois Lottery its commercial domicile in this State and was not Law are allocable to this State. organized under the laws of or taxable with respect (e-5) Unemployment benefits. to such rents or royalties in the state in which the Unemployment benefits paid by the Illinois property was utilized. The extent of utilization of Department of Employment Security are allocable tangible personal property in a state is determined to this State. by multiplying the rents or royalties derived from such property by a fraction, the numerator of which (f) Taxability in other state. For purposes is the number of days of physical location of the of allocation of income pursuant to this Section, a property in the state during the rental or royalty taxpayer is taxable in another state if: period in the taxable year and the denominator of (1) In that state he is subject to a net income which is the number of days of physical location of tax, a franchise tax measured by net income, a the property everywhere during all rental or royalty franchise tax for the privilege of doing business, or periods in the taxable year. If the physical location a corporate stock tax; or of the property during the rental or royalty period is unknown or unascertainable by the taxpayer, (2) That state has jurisdiction to subject the tangible personal property is utilized in the state in taxpayer to a net income tax regardless of whether, which the property was located at the time the rental in fact, the state does or does not. or royalty payer obtained possession. (g) Cross references. (d) Patent and copyright royalties. (1) For allocation of interest and dividends (1) Allocation. Patent and copyright by persons other than residents, see Section royalties are allocable to this State: 301(c)(2). (A) If and to the extent that the patent or (2) For allocation of nonbusiness income copyright is utilized by the payer in this State; or by residents, see Section 301(a). (Source: P.A. 79- 743.) (B) If and to the extent that the patent or copyright is utilized by the payer in a state in which the taxpayer is not taxable with respect to such royalties and, at the time such royalties were paid or
56 As Amended Through Public Act 100-555
Sec. 304. Business income of persons total compensation paid everywhere during the other than residents. taxable year. (a) In general. (B) Compensation is paid in this State if: The business income of a person other than (i) The individual's service is performed a resident shall be allocated to this State if such entirely within this State; person's business income is derived solely from this (ii) The individual's service is performed State. If a person other than a resident derives both within and without this State, but the service business income from this State and one or more performed without this State is incidental to the other states, then, for tax years ending on or before individual's service performed within this State; or December 30, 1998, and except as otherwise provided by this Section, such person's business (iii) Some of the service is performed income shall be apportioned to this State by within this State and either the base of operations, or multiplying the income by a fraction, the numerator if there is no base of operations, the place from of which is the sum of the property factor (if any), which the service is directed or controlled is within the payroll factor (if any) and 200% of the sales this State, or the base of operations or the place from factor (if any), and the denominator of which is 4 which the service is directed or controlled is not in reduced by the number of factors other than the sales any state in which some part of the service is factor which have a denominator of zero and by an performed, but the individual's residence is in this additional 2 if the sales factor has a denominator of State. zero. For tax years ending on or after December 31, 1998, and except as otherwise provided by this (iv) Compensation paid to nonresident Section, persons other than residents who derive professional athletes. business income from this State and one or more (a) General. The Illinois source income of other states shall compute their apportionment a nonresident individual who is a member of a factor by weighting their property, payroll, and sales professional athletic team includes the portion of the factors as provided in subsection (h) of this Section. individual's total compensation for services (1) Property factor. performed as a member of a professional athletic team during the taxable year which the number of (A) The property factor is a fraction, the duty days spent within this State performing numerator of which is the average value of the services for the team in any manner during the person's real and tangible personal property owned taxable year bears to the total number of duty days or rented and used in the trade or business in this spent both within and without this State during the State during the taxable year and the denominator of taxable year. which is the average value of all the person's real (b) Travel days. Travel days that do not and tangible personal property owned or rented and involve either a game, practice, team meeting, or used in the trade or business during the taxable year. other similar team event are not considered duty (B) Property owned by the person is valued days spent in this State. However, such travel days at its original cost. Property rented by the person is are considered in the total duty days spent both valued at 8 times the net annual rental rate. Net within and without this State. annual rental rate is the annual rental rate paid by the (c) Definitions. For purposes of this person less any annual rental rate received by the subpart (iv): person from sub-rentals. (1) The term "professional athletic team" (C) The average value of property shall be determined by averaging the values at the beginning includes, but is not limited to, any professional and ending of the taxable year but the Director may baseball, basketball, football, soccer, or hockey require the averaging of monthly values during the team. taxable year if reasonably required to reflect (2) The term "member of a professional properly the average value of the person's property. athletic team" includes those employees who are active players, players on the disabled list, and any (2) Payroll factor. other persons required to travel and who travel with (A) The payroll factor is a fraction, the and perform services on behalf of a professional numerator of which is the total amount paid in this athletic team on a regular basis. This includes, but is State during the taxable year by the person for not limited to, coaches, managers, and trainers. compensation, and the denominator of which is the
57 As Amended Through Public Act 100-555
(3) Except as provided in items (C) and (D) included in total duty days spent both within and of this subpart (3), the term "duty days" means all without this State. days during the taxable year from the beginning of (4) The term "total compensation for the professional athletic team's official pre-season services performed as a member of a professional training period through the last game in which the athletic team" means the total compensation team competes or is scheduled to compete. Duty received during the taxable year for services days shall be counted for the year in which they performed: occur, including where a team's official pre-season training period through the last game in which the (A) from the beginning of the official pre- team competes or is scheduled to compete, occurs season training period through the last game in during more than one tax year. which the team competes or is scheduled to compete during that taxable year; and (A) Duty days shall also include days on which a member of a professional athletic team (B) during the taxable year on a date which performs service for a team on a date that does not does not fall within the foregoing period (e.g., fall within the foregoing period (e.g., participation participation in instructional leagues, the "All Star in instructional leagues, the "All Star Game", or Game", or promotional caravans). This promotional "caravans"). Performing a service for a compensation shall include, but is not limited to, professional athletic team includes conducting salaries, wages, bonuses as described in this subpart, training and rehabilitation activities, when such and any other type of compensation paid during the activities are conducted at team facilities. taxable year to a member of a professional athletic team for services performed in that year. (B) Also included in duty days are game days, practice days, days spent at team meetings, This compensation does not include strike promotional caravans, preseason training camps, benefits, severance pay, termination pay, contract or and days served with the team through all post- option year buy-out payments, expansion or season games in which the team competes or is relocation payments, or any other payments not scheduled to compete. related to services performed for the team. (C) Duty days for any person who joins a For purposes of this subparagraph, team during the period from the beginning of the "bonuses" included in "total compensation for professional athletic team's official pre-season services performed as a member of a professional training period through the last game in which the athletic team" subject to the allocation described in team competes, or is scheduled to compete, shall Section 302(c)(1) are: bonuses earned as a result of begin on the day that person joins the team. play (i.e., performance bonuses) during the season, Conversely, duty days for any person who leaves a including bonuses paid for championship, playoff or team during this period shall end on the day that "bowl" games played by a team, or for selection to person leaves the team. Where a person switches all-star league or other honorary positions; and teams during a taxable year, a separate duty-day bonuses paid for signing a contract, unless the calculation shall be made for the period the person payment of the signing bonus is not conditional was with each team. upon the signee playing any games for the team or performing any subsequent services for the team or (D) Days for which a member of a even making the team, the signing bonus is payable professional athletic team is not compensated and is separately from the salary and any other not performing services for the team in any manner, compensation, and the signing bonus is including days when such member of a professional nonrefundable. athletic team has been suspended without pay and prohibited from performing any services for the (3) Sales factor. team, shall not be treated as duty days. (A) The sales factor is a fraction, the (E) Days for which a member of a numerator of which is the total sales of the person in professional athletic team is on the disabled list and this State during the taxable year, and the does not conduct rehabilitation activities at facilities denominator of which is the total sales of the person of the team, and is not otherwise performing everywhere during the taxable year. services for the team in Illinois, shall not be (B) Sales of tangible personal property are considered duty days spent in this State. All days on in this State if: the disabled list, however, are considered to be
58 As Amended Through Public Act 100-555
(i) The property is delivered or shipped to (III) Trademarks and other items of a purchaser, other than the United States intangible personal property governed by this government, within this State regardless of the f. o. paragraph (B-1) are utilized in the state in which the b. point or other conditions of the sale; or commercial domicile of the licensee or purchaser is located. (ii) The property is shipped from an office, store, warehouse, factory or other place of storage in (iii) If the state of utilization of an item of this State and either the purchaser is the United property governed by this paragraph (B-1) cannot be States government or the person is not taxable in the determined from the taxpayer's books and records or state of the purchaser; provided, however, that from the books and records of any person related to premises owned or leased by a person who has the taxpayer within the meaning of Section 267(b) independently contracted with the seller for the of the Internal Revenue Code, 26 U.S.C. 267, the printing of newspapers, periodicals or books shall gross receipts attributable to that item shall be not be deemed to be an office, store, warehouse, excluded from both the numerator and the factory or other place of storage for purposes of this denominator of the sales factor. Section. Sales of tangible personal property are not (B-2) Gross receipts from the license, sale, in this State if the seller and purchaser would be or other disposition of patents, copyrights, members of the same unitary business group but for trademarks, and similar items of intangible personal the fact that either the seller or purchaser is a person property, other than gross receipts governed by with 80% or more of total business activity outside paragraph (B-7) of this item (3), may be included in of the United States and the property is purchased the numerator or denominator of the sales factor for resale. only if gross receipts from licenses, sales, or other (B-1) Patents, copyrights, trademarks, and disposition of such items comprise more than 50% similar items of intangible personal property. of the taxpayer's total gross receipts included in gross income during the tax year and during each of (i) Gross receipts from the licensing, sale, the 2 immediately preceding tax years; provided or other disposition of a patent, copyright, that, when a taxpayer is a member of a unitary trademark, or similar item of intangible personal business group, such determination shall be made on property, other than gross receipts governed by the basis of the gross receipts of the entire unitary paragraph (B-7) of this item (3), are in this State to business group. the extent the item is utilized in this State during the year the gross receipts are included in gross income. (B-5) For taxable years ending on or after December 31, 2008, except as provided in (ii) Place of utilization. subsections (ii) through (vii), receipts from the sale (I) A patent is utilized in a state to the of telecommunications service or mobile extent that it is employed in production, fabrication, telecommunications service are in this State if the manufacturing, or other processing in the state or to customer's service address is in this State. the extent that a patented product is produced in the (i) For purposes of this subparagraph (B- state. If a patent is utilized in more than one state, 5), the following terms have the following the extent to which it is utilized in any one state shall meanings: be a fraction equal to the gross receipts of the licensee or purchaser from sales or leases of items "Ancillary services" means services that produced, fabricated, manufactured, or processed are associated with or incidental to the provision of within that state using the patent and of patented "telecommunications services", including but not items produced within that state, divided by the total limited to "detailed telecommunications billing", of such gross receipts for all states in which the "directory assistance", "vertical service", and "voice patent is utilized. mail services". (II) A copyright is utilized in a state to the "Air-to-Ground Radiotelephone service" extent that printing or other publication originates in means a radio service, as that term is defined in 47 the state. If a copyright is utilized in more than one CFR 22.99, in which common carriers are state, the extent to which it is utilized in any one authorized to offer and provide radio state shall be a fraction equal to the gross receipts telecommunications service for hire to subscribers from sales or licenses of materials printed or in aircraft. published in that state divided by the total of such gross receipts for all states in which the copyright is utilized.
59 As Amended Through Public Act 100-555
"Call-by-call Basis" means any method of calling service except it is not exclusively a charging for telecommunications services where the telecommunication service. price is measured by individual calls. "Prepaid telecommunication service" "Communications Channel" means a means the right to access exclusively physical or virtual path of communications over telecommunications services, which must be paid which signals are transmitted between or among for in advance and which enables the origination of customer channel termination points. "Conference calls using an access number or authorization code, bridging service" means an "ancillary service" that whether manually or electronically dialed, and that links two or more participants of an audio or video is sold in predetermined units or dollars of which the conference call and may include the provision of a number declines with use in a known amount. telephone number. "Prepaid Mobile telecommunication "Conference bridging service" does not service" means a telecommunications service that include the "telecommunications services" used to provides the right to utilize mobile wireless service reach the conference bridge. as well as other non-telecommunication services, including but not limited to ancillary services, which "Customer Channel Termination Point" must be paid for in advance that is sold in means the location where the customer either inputs predetermined units or dollars of which the number or receives the communications. declines with use in a known amount. "Detailed telecommunications billing "Private communication service" means a service" means an "ancillary service" of separately telecommunication service that entitles the stating information pertaining to individual calls on customer to exclusive or priority use of a a customer's billing statement. communications channel or group of channels "Directory assistance" means an "ancillary between or among termination points, regardless of service" of providing telephone number the manner in which such channel or channels are information, and/or address information. connected, and includes switching capacity, extension lines, stations, and any other associated "Home service provider" means the services that are provided in connection with the use facilities based carrier or reseller with which the of such channel or channels. customer contracts for the provision of mobile telecommunications services. "Service address" means: "Mobile telecommunications service" (a) The location of the telecommunications means commercial mobile radio service, as defined equipment to which a customer's call is charged and in Section 20.3 of Title 47 of the Code of Federal from which the call originates or terminates, Regulations as in effect on June 1, 1999. regardless of where the call is billed or paid; "Place of primary use" means the street (b) If the location in line (a) is not known, address representative of where the customer's use service address means the origination point of the of the telecommunications service primarily occurs, signal of the telecommunications services first which must be the residential street address or the identified by either the seller's telecommunications primary business street address of the customer. In system or in information received by the seller from the case of mobile telecommunications services, its service provider where the system used to "place of primary use" must be within the licensed transport such signals is not that of the seller; and service area of the home service provider. (c) If the locations in line (a) and line (b) "Post-paid telecommunication service" are not known, the service address means the means the telecommunications service obtained by location of the customer's place of primary use. making a payment on a call-by-call basis either "Telecommunications service" means the through the use of a credit card or payment electronic transmission, conveyance, or routing of mechanism such as a bank card, travel card, credit voice, data, audio, video, or any other information card, or debit card, or by charge made to a telephone or signals to a point, or between or among points. number which is not associated with the origination The term "telecommunications service" includes or termination of the telecommunications service. A such transmission, conveyance, or routing in which post-paid calling service includes computer processing applications are used to act on telecommunications service, except a prepaid the form, code or protocol of the content for wireless calling service, that would be a prepaid purposes of transmission, conveyance or routing
60 As Amended Through Public Act 100-555
without regard to whether such service is referred to call-by-call basis are in this State if either of the as voice over Internet protocol services or is following applies: classified by the Federal Communications (a) The call both originates and terminates Commission as enhanced or value added. in this State. "Telecommunications service" does not include: (b) The call either originates or terminates (a) Data processing and information in this State and the service address is located in this services that allow data to be generated, acquired, State. stored, processed, or retrieved and delivered by an electronic transmission to a purchaser when such (iii) Receipts from the sale of postpaid purchaser's primary purpose for the underlying telecommunications service at retail are in this State transaction is the processed data or information; if the origination point of the telecommunication signal, as first identified by the service provider's (b) Installation or maintenance of wiring or telecommunication system or as identified by equipment on a customer's premises; information received by the seller from its service (c) Tangible personal property; provider if the system used to transport telecommunication signals is not the seller's, is (d) Advertising, including but not limited located in this State. to directory advertising; (iv) Receipts from the sale of prepaid (e) Billing and collection services provided telecommunications service or prepaid mobile to third parties; telecommunications service at retail are in this State (f) Internet access service; if the purchaser obtains the prepaid card or similar means of conveyance at a location in this State. (g) Radio and television audio and video Receipts from recharging a prepaid programming services, regardless of the medium, telecommunications service or mobile including the furnishing of transmission, telecommunications service is in this State if the conveyance and routing of such services by the purchaser's billing information indicates a location programming service provider. Radio and television in this State. audio and video programming services shall include but not be limited to cable service as defined in 47 (v) Receipts from the sale of private USC 522(6) and audio and video programming communication services are in this State as follows: services delivered by commercial mobile radio (a) 100% of receipts from charges imposed service providers, as defined in 47 CFR 20.3; at each channel termination point in this State. (h) "Ancillary services"; or (b) 100% of receipts from charges for the (i) Digital products "delivered total channel mileage between each channel electronically", including but not limited to termination point in this State. software, music, video, reading materials or ring (c) 50% of the total receipts from charges tones. " for service segments when those segments are Vertical service" means an "ancillary between 2 customer channel termination points, 1 of service" that is offered in connection with one or which is located in this State and the other is located more "telecommunications services", which offers outside of this State, which segments are separately advanced calling features that allow customers to charged. identify callers and to manage multiple calls and call (d) The receipts from charges for service connections, including "conference bridging segments with a channel termination point located services". in this State and in two or more other states, and "Voice mail service" means an "ancillary which segments are not separately billed, are in this service" that enables the customer to store, send or State based on a percentage determined by dividing receive recorded messages. "Voice mail service" the number of customer channel termination points does not include any "vertical services" that the in this State by the total number of customer channel customer may be required to have in order to utilize termination points. the "voice mail service". (vi) Receipts from charges for ancillary (ii) Receipts from the sale of services for telecommunications service sold to telecommunications service sold on an individual customers at retail are in this State if the customer's primary place of use of telecommunications services
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associated with those ancillary services is in this network, or cable system. The audience factor for State. If the seller of those ancillary services cannot film or radio programming shall be determined by determine where the associated telecommunications reference to the books and records of the taxpayer or are located, then the ancillary services shall be based by reference to published rating statistics provided on the location of the purchaser. the method used by the taxpayer is consistently used from year to year for this purpose and fairly (vii) Receipts to access a carrier's network represents the taxpayer's activity in this State. or from the sale of telecommunication services or ancillary services for resale are in this State as "Broadcast" or "broadcasting" or follows: "broadcasting services" means the transmission or provision of film or radio programming, whether (a) 100% of the receipts from access fees through the public airwaves, by cable, by direct or attributable to intrastate telecommunications service indirect satellite transmission, or by any other means that both originates and terminates in this State. of communication, either through a station, a (b) 50% of the receipts from access fees network, or a cable system. attributable to interstate telecommunications service "Film" or "film programming" means the if the interstate call either originates or terminates in broadcast on television of any and all performances, this State. events, or productions, including but not limited to (c) 100% of the receipts from interstate end news, sporting events, plays, stories, or other user access line charges, if the customer's service literary, commercial, educational, or artistic works, address is in this State. As used in this subdivision, either live or through the use of video tape, disc, or "interstate end user access line charges" includes, any other type of format or medium. Each episode but is not limited to, the surcharge approved by the of a series of films produced for television shall federal communications commission and levied constitute separate "film" notwithstanding that the pursuant to 47 CFR 69. series relates to the same principal subject and is produced during one or more tax periods. (d) Gross receipts from sales of telecommunication services or from ancillary "Radio" or "radio programming" means the services for telecommunications services sold to broadcast on radio of any and all performances, other telecommunication service providers for events, or productions, including but not limited to resale shall be sourced to this State using the news, sporting events, plays, stories, or other apportionment concepts used for non-resale receipts literary, commercial, educational, or artistic works, of telecommunications services if the information is either live or through the use of an audio tape, disc, readily available to make that determination. If the or any other format or medium. Each episode in a information is not readily available, then the series of radio programming produced for radio taxpayer may use any other reasonable and broadcast shall constitute a separate "radio consistent method. programming" notwithstanding that the series relates to the same principal subject and is produced (B-7) For taxable years ending on or after during one or more tax periods. December 31, 2008, receipts from the sale of broadcasting services are in this State if the (i) In the case of advertising revenue from broadcasting services are received in this State. For broadcasting, the customer is the advertiser and the purposes of this paragraph (B-7), the following service is received in this State if the commercial terms have the following meanings: domicile of the advertiser is in this State. "Advertising revenue" means (ii) In the case where film or radio consideration received by the taxpayer in exchange programming is broadcast by a station, a network, for broadcasting services or allowing the or a cable system for a fee or other remuneration broadcasting of commercials or announcements in received from the recipient of the broadcast, the connection with the broadcasting of film or radio portion of the service that is received in this State is programming, from sponsorships of the measured by the portion of the recipients of the programming, or from product placements in the broadcast located in this State. Accordingly, the fee programming. or other remuneration for such service that is included in the Illinois numerator of the sales factor "Audience factor" means the ratio that the is the total of those fees or other remuneration audience or subscribers located in this State of a received from recipients in Illinois. For purposes of station, a network, or a cable system bears to the this paragraph, a taxpayer may determine the total audience or total subscribers for that station,
62 As Amended Through Public Act 100-555
location of the recipients of its broadcast using the (i) The income-producing activity is address of the recipient shown in its contracts with performed in this State; or the recipient or using the billing address of the (ii) The income-producing activity is recipient in the taxpayer's records. performed both within and without this State and a (iii) In the case where film or radio greater proportion of the income-producing activity programming is broadcast by a station, a network, is performed within this State than without this or a cable system for a fee or other remuneration State, based on performance costs. from the person providing the programming, the (C-5) For taxable years ending on or after portion of the broadcast service that is received by December 31, 2008, sales, other than sales governed such station, network, or cable system in this State by paragraphs (B), (B-1), (B-2), (B-5), and (B-7), is measured by the portion of recipients of the are in this State if any of the following criteria are broadcast located in this State. Accordingly, the met: amount of revenue related to such an arrangement that is included in the Illinois numerator of the sales (i) Sales from the sale or lease of real factor is the total fee or other total remuneration property are in this State if the property is located in from the person providing the programming related this State. to that broadcast multiplied by the Illinois audience (ii) Sales from the lease or rental of factor for that broadcast. tangible personal property are in this State if the (iv) In the case where film or radio property is located in this State during the rental programming is provided by a taxpayer that is a period. Sales from the lease or rental of tangible network or station to a customer for broadcast in personal property that is characteristically moving exchange for a fee or other remuneration from that property, including, but not limited to, motor customer the broadcasting service is received at the vehicles, rolling stock, aircraft, vessels, or mobile location of the office of the customer from which the equipment are in this State to the extent that the services were ordered in the regular course of the property is used in this State. customer's trade or business. Accordingly, in such a case the revenue derived by the taxpayer that is (iii) In the case of interest, net gains (but not less than zero) and other items of income from included in the taxpayer's Illinois numerator of the intangible personal property, the sale is in this State sales factor is the revenue from such customers who if: receive the broadcasting service in Illinois. (a) in the case of a taxpayer who is a dealer (v) In the case where film or radio programming is provided by a taxpayer that is not a in the item of intangible personal property within the network or station to another person for meaning of Section 475 of the Internal Revenue Code, the income or gain is received from a broadcasting in exchange for a fee or other customer in this State. For purposes of this remuneration from that person, the broadcasting subparagraph, a customer is in this State if the service is received at the location of the office of the customer is an individual, trust or estate who is a customer from which the services were ordered in the regular course of the customer's trade or resident of this State and, for all other customers, if business. Accordingly, in such a case the revenue the customer's commercial domicile is in this State. Unless the dealer has actual knowledge of the derived by the taxpayer that is included in the residence or commercial domicile of a customer taxpayer's Illinois numerator of the sales factor is the during a taxable year, the customer shall be deemed revenue from such customers who receive the to be a customer in this State if the billing address of broadcasting service in Illinois. the customer, as shown in the records of the dealer, (B-8) Gross receipts from winnings under is in this State; or the Illinois Lottery Law from the assignment of a (b) in all other cases, if the income- prize under Section 13.1 of the Illinois Lottery Law producing activity of the taxpayer is performed in are received in this State. This paragraph (B-8) this State or, if the income-producing activity of the applies only to taxable years ending on or after taxpayer is performed both within and without this December 31, 2013. State, if a greater proportion of the income- (C) For taxable years ending before producing activity of the taxpayer is performed December 31, 2008, sales, other than sales governed within this State than in any other state, based on by paragraphs (B), (B-1), (B-2), and (B-8) are in this performance costs. State if:
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(iv) Sales of services are in this State if the (b) Insurance companies. services are received in this State. For the purposes (1) In general. Except as otherwise of this section, gross receipts from the performance provided by paragraph (2), business income of an of services provided to a corporation, partnership, or insurance company for a taxable year shall be trust may only be attributed to a state where that apportioned to this State by multiplying such corporation, partnership, or trust has a fixed place of income by a fraction, the numerator of which is the business. If the state where the services are received direct premiums written for insurance upon property is not readily determinable or is a state where the or risk in this State, and the denominator of which is corporation, partnership, or trust receiving the the direct premiums written for insurance upon service does not have a fixed place of business, the property or risk everywhere. For purposes of this services shall be deemed to be received at the subsection, the term "direct premiums written" location of the office of the customer from which the means the total amount of direct premiums written, services were ordered in the regular course of the assessments and annuity considerations as reported customer's trade or business. If the ordering office for the taxable year on the annual statement filed by cannot be determined, the services shall be deemed the company with the Illinois Director of Insurance to be received at the office of the customer to which in the form approved by the National Convention of the services are billed. If the taxpayer is not taxable Insurance Commissioners or such other form as may in the state in which the services are received, the be prescribed in lieu thereof. sale must be excluded from both the numerator and the denominator of the sales factor. The Department (2) Reinsurance. If the principal source of shall adopt rules prescribing where specific types of premiums written by an insurance company consists service are received, including, but not limited to, of premiums for reinsurance accepted by it, the publishing, and utility service. business income of such company shall be apportioned to this State by multiplying such (D) For taxable years ending on or after income by a fraction, the numerator of which is the December 31, 1995, the following items of income sum of (i) direct premiums written for insurance shall not be included in the numerator or upon property or risk in this State, plus (ii) denominator of the sales factor: dividends; amounts premiums written for reinsurance accepted in included under Section 78 of the Internal Revenue respect of property or risk in this State, and the Code; and Subpart F income as defined in Section denominator of which is the sum of (iii) direct 952 of the Internal Revenue Code. No inference premiums written for insurance upon property or shall be drawn from the enactment of this paragraph risk everywhere, plus (iv) premiums written for (D) in construing this Section for taxable years reinsurance accepted in respect of property or risk ending before December 31, 1995. everywhere. For purposes of this paragraph, (E) Paragraphs (B-1) and (B-2) shall apply premiums written for reinsurance accepted in to tax years ending on or after December 31, 1999, respect of property or risk in this State, whether or provided that a taxpayer may elect to apply the not otherwise determinable, may, at the election of provisions of these paragraphs to prior tax years. the company, be determined on the basis of the Such election shall be made in the form and manner proportion which premiums written for reinsurance prescribed by the Department, shall be irrevocable, accepted from companies commercially domiciled and shall apply to all tax years; provided that, if a in Illinois bears to premiums written for reinsurance taxpayer's Illinois income tax liability for any tax accepted from all sources, or, alternatively, in the year, as assessed under Section 903 prior to January proportion which the sum of the direct premiums 1, 1999, was computed in a manner contrary to the written for insurance upon property or risk in this provisions of paragraphs (B-1) or (B-2), no refund State by each ceding company from which shall be payable to the taxpayer for that tax year to reinsurance is accepted bears to the sum of the total the extent such refund is the result of applying the direct premiums written by each such ceding provisions of paragraph (B-1) or (B-2) retroactively. company for the taxable year. The election made by In the case of a unitary business group, such election a company under this paragraph for its first taxable shall apply to all members of such group for every year ending on or after December 31, 2011, shall be tax year such group is in existence, but shall not binding for that company for that taxable year and apply to any taxpayer for any period during which for all subsequent taxable years, and may be altered that taxpayer is not a member of such group. only with the written permission of the Department, which shall not be unreasonably withheld.
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(c) Financial organizations. The average aggregate, determined on a quarterly basis, of the financial organization's loans (1) In general. For taxable years ending to banks in foreign countries, to foreign domiciled before December 31, 2008, business income of a borrowers (except where secured primarily by real financial organization shall be apportioned to this estate) and to foreign governments and other foreign State by multiplying such income by a fraction, the official institutions, as reported for its branches, numerator of which is its business income from agencies and offices within the state on its sources within this State, and the denominator of "Consolidated Report of Condition", Schedule A, which is its business income from all sources. For Lines 2.c., 5.b., and 7.a., which was filed with the the purposes of this subsection, the business income Federal Deposit Insurance Corporation and other of a financial organization from sources within this regulatory authorities, for the year 1980, minus State is the sum of the amounts referred to in subparagraphs (A) through (E) following, but The average aggregate, determined on a excluding the adjusted income of an international quarterly basis, of such loans (other than loans of an banking facility as determined in paragraph (2): international banking facility), as reported by the financial institution for its branches, agencies and (A) Fees, commissions or other offices within the state, on the corresponding compensation for financial services rendered within Schedule and lines of the Consolidated Report of this State; Condition for the current taxable year, provided, (B) Gross profits from trading in stocks, however, that in no case shall the amount bonds or other securities managed within this State; determined in this clause (the subtrahend) exceed the amount determined in the preceding clause (the (C) Dividends, and interest from Illinois minuend); and customers, which are received within this State; (ii) the denominator shall be the average (D) Interest charged to customers at places aggregate, determined on a quarterly basis, of the of business maintained within this State for carrying international banking facility's loans to banks in debit balances of margin accounts, without foreign countries, to foreign domiciled borrowers deduction of any costs incurred in carrying such (except where secured primarily by real estate) and accounts; and to foreign governments and other foreign official (E) Any other gross income resulting from institutions, which were recorded in its financial the operation as a financial organization within this accounts for the current taxable year. State. In computing the amounts referred to in (C) Change to Consolidated Report of paragraphs (A) through (E) of this subsection, any Condition and in Qualification. In the event the amount received by a member of an affiliated group Consolidated Report of Condition which is filed (determined under Section 1504(a) of the Internal with the Federal Deposit Insurance Corporation and Revenue Code but without reference to whether any other regulatory authorities is altered so that the such corporation is an "includible corporation" information required for determining the floor under Section 1504(b) of the Internal Revenue amount is not found on Schedule A, lines 2.c., 5.b. Code) from another member of such group shall be and 7.a., the financial institution shall notify the included only to the extent such amount exceeds Department and the Department may, by regulations expenses of the recipient directly related thereto. or otherwise, prescribe or authorize the use of an (2) International Banking Facility. For alternative source for such information. The taxable years ending before December 31, 2008: financial institution shall also notify the Department should its international banking facility fail to (A) Adjusted Income. The adjusted income qualify as such, in whole or in part, or should there of an international banking facility is its income be any amendment or change to the Consolidated reduced by the amount of the floor amount. Report of Condition, as originally filed, to the extent (B) Floor Amount. The floor amount shall such amendment or change alters the information be the amount, if any, determined by multiplying the used in determining the floor amount. income of the international banking facility by a (3) For taxable years ending on or after fraction, not greater than one, which is determined December 31, 2008, the business income of a as follows: financial organization shall be apportioned to this (i) The numerator shall be: State by multiplying such income by a fraction, the numerator of which is its gross receipts from sources in this State or otherwise attributable to this State's
65 As Amended Through Public Act 100-555
marketplace and the denominator of which is its meaning of subparagraph (a)(3)(C-5)(iv) of this gross receipts everywhere during the taxable year. Section. "Gross receipts" for purposes of this subparagraph (vii) Receipts from the issuance of (3) means gross income, including net taxable gain travelers checks and money orders are from sources on disposition of assets, including securities and in this State if the checks and money orders are money market instruments, when derived from issued from a location within this State. transactions and activities in the regular course of the financial organization's trade or business. The (viii) Receipts from investment assets and following examples are illustrative: activities and trading assets and activities are included in the receipts factor as follows: (i) Receipts from the lease or rental of real or tangible personal property are in this State if the (1) Interest, dividends, net gains (but not property is located in this State during the rental less than zero) and other income from investment period. Receipts from the lease or rental of tangible assets and activities from trading assets and personal property that is characteristically moving activities shall be included in the receipts factor. property, including, but not limited to, motor Investment assets and activities and trading assets vehicles, rolling stock, aircraft, vessels, or mobile and activities include but are not limited to: equipment are from sources in this State to the investment securities; trading account assets; extent that the property is used in this State. federal funds; securities purchased and sold under agreements to resell or repurchase; options; futures (ii) Interest income, commissions, fees, contracts; forward contracts; notional principal gains on disposition, and other receipts from assets contracts such as swaps; equities; and foreign in the nature of loans that are secured primarily by currency transactions. With respect to the real estate or tangible personal property are from investment and trading assets and activities sources in this State if the security is located in this described in subparagraphs (A) and (B) of this State. paragraph, the receipts factor shall include the (iii) Interest income, commissions, fees, amounts described in such subparagraphs. gains on disposition, and other receipts from (A) The receipts factor shall include the consumer loans that are not secured by real or amount by which interest from federal funds sold tangible personal property are from sources in this and securities purchased under resale agreements State if the debtor is a resident of this State. exceeds interest expense on federal funds purchased (iv) Interest income, commissions, fees, and securities sold under repurchase agreements. gains on disposition, and other receipts from (B) The receipts factor shall include the commercial loans and installment obligations that amount by which interest, dividends, gains and other are not secured by real or tangible personal property income from trading assets and activities, including are from sources in this State if the proceeds of the but not limited to assets and activities in the matched loan are to be applied in this State. If it cannot be book, in the arbitrage book, and foreign currency determined where the funds are to be applied, the transactions, exceed amounts paid in lieu of interest, income and receipts are from sources in this State if amounts paid in lieu of dividends, and losses from the office of the borrower from which the loan was such assets and activities. negotiated in the regular course of business is located in this State. If the location of this office (2) The numerator of the receipts factor cannot be determined, the income and receipts shall includes interest, dividends, net gains (but not less be excluded from the numerator and denominator of than zero), and other income from investment assets the sales factor. and activities and from trading assets and activities described in paragraph (1) of this subsection that are (v) Interest income, fees, gains on attributable to this State. disposition, service charges, merchant discount income, and other receipts from credit card (A) The amount of interest, dividends, net receivables are from sources in this State if the card gains (but not less than zero), and other income from charges are regularly billed to a customer in this investment assets and activities in the investment State. account to be attributed to this State and included in the numerator is determined by multiplying all such (vi) Receipts from the performance of income from such assets and activities by a fraction, services, including, but not limited to, fiduciary, the numerator of which is the gross income from advisory, and brokerage services, are in this State if such assets and activities which are properly the services are received in this State within the
66 As Amended Through Public Act 100-555
assigned to a fixed place of business of the taxpayer (E) The presumption of proper assignment within this State and the denominator of which is the of an investment or trading asset or activity provided gross income from all such assets and activities. in subparagraph (D) of paragraph (2) of this subsection may be rebutted upon a showing by the (B) The amount of interest from federal Department, supported by a preponderance of the funds sold and purchased and from securities evidence, that the preponderance of substantive purchased under resale agreements and securities contacts regarding such asset or activity did not sold under repurchase agreements attributable to occur at the fixed place of business to which it was this State and included in the numerator is assigned on the taxpayer's records. If the fixed place determined by multiplying the amount described in of business that has a preponderance of substantive subparagraph (A) of paragraph (1) of this subsection contacts cannot be determined for an investment or from such funds and such securities by a fraction, trading asset or activity to which the presumption in the numerator of which is the gross income from subparagraph (D) of paragraph (2) of this subsection such funds and such securities which are properly does not apply or with respect to which that assigned to a fixed place of business of the taxpayer presumption has been rebutted, that asset or activity within this State and the denominator of which is the is properly assigned to the state in which the gross income from all such funds and such taxpayer's commercial domicile is located. For securities. purposes of this subparagraph (E), it shall be (C) The amount of interest, dividends, presumed, subject to rebuttal, that taxpayer's gains, and other income from trading assets and commercial domicile is in the state of the United activities, including but not limited to assets and States or the District of Columbia to which the activities in the matched book, in the arbitrage book greatest number of employees are regularly and foreign currency transactions (but excluding connected with the management of the investment amounts described in subparagraphs (A) or (B) of or trading income or out of which they are working, this paragraph), attributable to this State and irrespective of where the services of such employees included in the numerator is determined by are performed, as of the last day of the taxable year. multiplying the amount described in subparagraph (4) (Blank). (B) of paragraph (1) of this subsection by a fraction, the numerator of which is the gross income from (5) (Blank). such trading assets and activities which are properly (c-1) Federally regulated exchanges. For assigned to a fixed place of business of the taxpayer taxable years ending on or after December 31, 2012, within this State and the denominator of which is the business income of a federally regulated exchange gross income from all such assets and activities. shall, at the option of the federally regulated (D) Properly assigned, for purposes of this exchange, be apportioned to this State by paragraph (2) of this subsection, means the multiplying such income by a fraction, the investment or trading asset or activity is assigned to numerator of which is its business income from the fixed place of business with which it has a sources within this State, and the denominator of preponderance of substantive contacts. An which is its business income from all sources. For investment or trading asset or activity assigned by purposes of this subsection, the business income the taxpayer to a fixed place of business without the within this State of a federally regulated exchange is State shall be presumed to have been properly the sum of the following: assigned if: (1) Receipts attributable to transactions (i) the taxpayer has assigned, in the regular executed on a physical trading floor if that physical course of its business, such asset or activity on its trading floor is located in this State. records to a fixed place of business consistent with (2) Receipts attributable to all other federal or state regulatory requirements; matching, execution, or clearing transactions, (ii) such assignment on its records is based including without limitation receipts from the upon substantive contacts of the asset or activity to provision of matching, execution, or clearing such fixed place of business; and services to another entity, multiplied by (i) for taxable years ending on or after December 31, 2012 (iii) the taxpayer uses such records but before December 31, 2013, 63.77%; and (ii) for reflecting assignment of such assets or activities for taxable years ending on or after December 31, 2013, the filing of all state and local tax returns for which 27.54%. an assignment of such assets or activities to a fixed place of business is required.
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(3) All other receipts not governed by (A) relative railway operating income from subparagraphs (1) or (2) of this subsection (c-1), to total passenger and total freight service, as reported the extent the receipts would be characterized as to the Interstate Commerce Commission, in the case "sales in this State" under item (3) of subsection (a) of transportation by railroad, and of this Section. (B) relative gross receipts from passenger "Federally regulated exchange" means (i) a and freight transportation, in case of transportation "registered entity" within the meaning of 7 U.S.C. other than by railroad. Section 1a(40)(A), (B), or (C), (ii) an "exchange" or (2) Such business income derived from "clearing agency" within the meaning of 15 U.S.C. transportation by pipeline shall be apportioned to Section 78c (a)(1) or (23), (iii) any such entities this State by multiplying such income by a fraction, regulated under any successor regulatory structure the numerator of which is the revenue miles of the to the foregoing, and (iv) all taxpayers who are person in this State, and the denominator of which members of the same unitary business group as a is the revenue miles of the person everywhere. For federally regulated exchange, determined without the purposes of this paragraph, a revenue mile is the regard to the prohibition in Section 1501(a)(27) of transportation by pipeline of 1 barrel of oil, 1,000 this Act against including in a unitary business cubic feet of gas, or of any specified quantity of any group taxpayers who are ordinarily required to other substance, the distance of 1 mile for a apportion business income under different consideration. subsections of this Section; provided that this subparagraph (iv) shall apply only if 50% or more (3) For taxable years ending on or after of the business receipts of the unitary business group December 31, 2008, business income derived from determined by application of this subparagraph (iv) providing transportation services other than airline for the taxable year are attributable to the matching, services shall be apportioned to this State by using a execution, or clearing of transactions conducted by fraction, (a) the numerator of which shall be (i) all an entity described in subparagraph (i), (ii), or (iii) receipts from any movement or shipment of people, of this paragraph. goods, mail, oil, gas, or any other substance (other than by airline) that both originates and terminates In no event shall the Illinois apportionment in this State, plus (ii) that portion of the person's percentage computed in accordance with this gross receipts from movements or shipments of subsection (c-1) for any taxpayer for any tax year be people, goods, mail, oil, gas, or any other substance less than the Illinois apportionment percentage (other than by airline) that originates in one state or computed under this subsection (c-1) for that jurisdiction and terminates in another state or taxpayer for the first full tax year ending on or after jurisdiction, that is determined by the ratio that the December 31, 2013 for which this subsection (c-1) miles traveled in this State bears to total miles applied to the taxpayer. everywhere and (b) the denominator of which shall (d) Transportation services. For taxable be all revenue derived from the movement or years ending before December 31, 2008, business shipment of people, goods, mail, oil, gas, or any income derived from furnishing transportation other substance (other than by airline). Where a services shall be apportioned to this State in taxpayer is engaged in the transportation of both accordance with paragraphs (1) and (2): passengers and freight, the fraction above referred to shall first be determined separately for passenger (1) Such business income (other than that miles and freight miles. Then an average of the derived from transportation by pipeline) shall be passenger miles fraction and the freight miles apportioned to this State by multiplying such fraction shall be weighted to reflect the taxpayer's: income by a fraction, the numerator of which is the revenue miles of the person in this State, and the (A) relative railway operating income from denominator of which is the revenue miles of the total passenger and total freight service, as reported person everywhere. For purposes of this paragraph, to the Surface Transportation Board, in the case of a revenue mile is the transportation of 1 passenger transportation by railroad; and or 1 net ton of freight the distance of 1 mile for a (B) relative gross receipts from passenger consideration. Where a person is engaged in the and freight transportation, in case of transportation transportation of both passengers and freight, the other than by railroad. fraction above referred to shall be determined by means of an average of the passenger revenue mile (4) For taxable years ending on or after fraction and the freight revenue mile fraction, December 31, 2008, business income derived from weighted to reflect the person's furnishing airline transportation services shall be
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apportioned to this State by multiplying such (1) for tax years ending on or after income by a fraction, the numerator of which is the December 31, 1998 and before December 31, 1999, revenue miles of the person in this State, and the 16 2/3% of the property factor plus 16 2/3% of the denominator of which is the revenue miles of the payroll factor plus 66 2/3% of the sales factor; person everywhere. For purposes of this paragraph, (2) for tax years ending on or after a revenue mile is the transportation of one passenger December 31, 1999 and before December 31, 2000, or one net ton of freight the distance of one mile for 8 1/3% of the property factor plus 8 1/3% of the a consideration. If a person is engaged in the payroll factor plus 83 1/3% of the sales factor; transportation of both passengers and freight, the fraction above referred to shall be determined by (3) for tax years ending on or after means of an average of the passenger revenue mile December 31, 2000, the sales factor. fraction and the freight revenue mile fraction, If, in any tax year ending on or after weighted to reflect the person's relative gross December 31, 1998 and before December 31, 2000, receipts from passenger and freight airline the denominator of the payroll, property, or sales transportation. factor is zero, the apportionment factor computed in (e) Combined apportionment. Where 2 paragraph (1) or (2) of this subsection for that year or more persons are engaged in a unitary business as shall be divided by an amount equal to 100% minus described in subsection (a)(27) of Section 1501, a the percentage weight given to each factor whose part of which is conducted in this State by one or denominator is equal to zero. more members of the group, the business income attributable to this State by any such member or Sec. 305. Allocation Of Partnership members shall be apportioned by means of the Income By Partnerships And Partners Other Than combined apportionment method. Residents. (f) Alternative allocation. If the allocation (a) Allocation of partnership business and apportionment provisions of subsections (a) through (e) and of subsection (h) do not, for taxable income by partners other than residents. The years ending before December 31, 2008, fairly respective shares of partners other than residents in so much of the business income of the partnership represent the extent of a person's business activity in as is allocated or apportioned to this State in the this State, or, for taxable years ending on or after possession of the partnership shall be taken into December 31, 2008, fairly represent the market for account by such partners pro rata in accordance with the person's goods, services, or other sources of business income, the person may petition for, or the their respective distributive shares of such Director may, without a petition, permit or require, partnership income for the partnership's taxable year in respect of all or any part of the person's business and allocated to this State. activity, if reasonable: (b) Allocation of partnership nonbusiness income by partners other than residents. The (1) Separate accounting; respective shares of partners other than residents in (2) The exclusion of any one or more the items of partnership income and deduction not factors; taken into account in computing the business income of a partnership shall be taken into account (3) The inclusion of one or more additional by such partners pro rata in accordance with their factors which will fairly represent the person's respective distributive shares of such partnership business activities or market in this State; or income for the partnership's taxable year, and (4) The employment of any other method allocated as if such items had been paid, incurred or to effectuate an equitable allocation and accrued directly to such partners in their separate apportionment of the person's business income. capacities. (g) Cross reference. For allocation of (c) Allocation or apportionment of base business income by residents, see Section 301(a). income by partnership. Base income of a partnership shall be allocated or apportioned to this State (h) For tax years ending on or after pursuant to Article 3, in the same manner as it is December 31, 1998, the apportionment factor of allocated or apportioned for any other nonresident. persons who apportion their business income to this State under subsection (a) shall be equal to: (c-5) Taxable income of an investment partnership, as defined in Section 1501(a)(11.5) of this Act, that is distributable to a nonresident partner
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shall be treated as nonbusiness income and shall be beneficiaries in proportion to their respective shares allocated to the partner's state of residence (in the of the distributable net income of the estate or trust case of an individual) or commercial domicile (in for its taxable year and allocated to this State. the case of any other person). However, any income (b) Allocation of nonbusiness income by distributable to a nonresident partner shall be treated beneficiaries other than residents. To the extent as business income and apportioned as if such items of estate or trust income and deduction not income had been received directly by the partner if taken into account in computing the business the partner has made an election under Section income of an estate or trust are deemed to have been 1501(a)(1) of this Act to treat all income as business paid, credited or distributed by the estate or trust income or if such income is from investment under Section 306, the respective shares of activity: beneficiaries of the estate or trust, other than (1) that is directly or integrally related to residents, in such items shall be taken into account any other business activity conducted in this State by such beneficiaries in proportion to their by the nonresident partner (or any member of that respective shares of the distributable net income of partner's unitary business group); the estate or trust for its taxable year, and allocated as if such items had been paid, incurred or accrued (2) that serves an operational function to directly to such beneficiaries in their separate any other business activity of the nonresident capacities. partner (or any member of that partner's unitary business group) in this State; or (c) Accumulation and capital gain distributions. In the event that, in any taxable year (3) where assets of the investment of a trust, the trust makes an accumulation partnership were acquired with working capital distribution or a capital gain distribution (both as from a trade or business activity conducted in this defined in Section 665 of the Internal Revenue State in which the nonresident partner (or any Code), the total of the amounts which are included member of that partner's unitary business group) in the income of each beneficiary of such trust, other owns an interest. than a resident, under Sections 668 and 669 of the (d) Cross reference. For allocation of Internal Revenue Code shall be allocated to this partnership income or deductions by residents, see State to the extent that the items of income included Section 301 (a). (Source: P.A. 84-550.) in such distribution were allocated or apportioned to this State in the hands of the trust. Sec. 306. Allocation Or Apportionment Of Income By Estates And (d) Cross references. Trusts. (1) For allocation of amounts received by The items of income and deduction taken nonresidents from certain employee trusts, see into account by an estate or trust in computing its Section 301 (b) (2). base income for a taxable year shall be allocated or (2) For allocation of estate or trust income apportioned to this State to the extent provided by or deductions by residents, see Section 301 (a). Sections 301 through 304 and, to the extent properly (Source: P.A. 84-550.) paid, credited or required to be distributed to beneficiaries for such taxable year, shall be deemed Sec. 308. Allocation Of Subchapter S to have been so paid, credited or distributed pro rata. Corporation Income By (Source: P.A. 76-2402.) Subchapter S Corporations And Shareholders Other Than Sec. 307. Allocation Of Income By Estate Residents. Or Trust Beneficiaries Other Than Residents. (a) Allocation of Subchapter S corporation business income by shareholders other than (a) Allocation of business income by residents. The respective shares of shareholders beneficiaries other than residents. To the extent the other than residents in so much of the business business income of an estate or trust allocated or income of the Subchapter S corporation as is apportioned to this State in the possession of the allocated or apportioned to this State in the hands of estate or trust is deemed to have been paid, credited the Subchapter S corporation shall be taken into or distributed by the estate or trust under Section account by such shareholder pro rata in accordance 306, the respective shares of beneficiaries of the with the requirements of Section 1366 of the estate or trust, other than residents, in such business income shall be taken into account by such
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Internal Revenue Code for the Subchapter S computed for the period determined by such action. corporation's taxable year and allocated to this State. (Source: P.A. 76-261.) (b) Allocation of Subchapter S corporation Sec. 402. Methods Of Accounting. nonbusiness income by shareholders other than (a) Same as federal. For purposes of the tax residents. The respective share of shareholders other imposed by this Act, a person's method of than residents in the items of Subchapter S accounting shall be the same as such person's corporation income and deduction not taken into method of accounting for federal income tax account in computing the business income of the purposes. If no method of accounting has been Subchapter S corporation shall be taken into account regularly used by such person, base and net income by such shareholders pro rata in accordance with the for purposes of this Act shall be computed under requirements of Section 1366 of the Internal such method as in the opinion of the Department Revenue Code for the corporation's taxable year, fairly reflects income. and allocated as if such items had been paid, incurred or accrued directly to such shareholders in (b) Change of accounting method. If a their separate capacities. person's method of accounting is changed for federal income tax purposes, for purposes of this Act (c) Allocation or apportionment of base it shall be similarly changed. (Source: P.A. 76-261.) income by the Subchapter S corporation. Base income of a Subchapter S corporation shall be Sec. 403. Effect Of Determination For allocated or apportioned to this State pursuant to this Federal Purposes. Article 3 in the same manner as it is allocated or (a) Reporting. To the extent not apportioned for any other nonresident. inconsistent with the provisions of this Act or forms (d) This Section shall not apply to any or regulations prescribed by the Department, each corporation for which there is in effect a federal person making a return under this Act shall take into election to opt out of the provisions of the account the items of income, deduction and Subchapter S Revision Act of 1982 and have applied exclusion on such return in the same manner and instead the prior federal Subchapter S rules as in amounts as reflected in such person's federal income effect on July 1, 1982. (Source: P.A. 83-1352.) tax return for the same taxable year. ARTICLE 4. ACCOUNTING. (b) Adjustment. A final determination pursuant to the Internal Revenue Code adjusting any Sec. 401. Taxable Year. item or items of income, deduction or exclusion for (a) In general. For purposes of the tax any taxable year shall be correct for purposes of this imposed by this Act, the taxable year of a person Act to the extent such item or items enter into the shall be the same as the taxable year of such person determination of base income. for federal income tax purposes. The taxable year of (c) Identification of differences. To the any person required to file a return under this Act extent required by forms or regulations prescribed but not under the Internal Revenue Code shall be his by the Department, any person making a return annual accounting period if it is a fiscal or calendar under this Act may be required to indicate the item year, and in all other cases shall be the calendar year. or items of income, deduction and exclusion which (b) Change in taxable year. If the taxable would enter into the determination of base income if year of a person is changed for federal income tax this Act were amended to incorporate the Internal purposes, the taxable year of such person for Revenue Code as amended and in effect for such purposes of the tax imposed by this Act shall be taxable year. (Source: P.A. 81-1405.) similarly changed. In the case of a taxable year for a Sec. 404. Reallocation Of Items. period of less than 12 months, the standard exemption allowed under section 204 shall be (a) If it appears to the Director that any prorated on the basis of the number of days in such agreement, understanding or arrangement exists year to 365. between any persons which causes any person's base income allocable to this State to be improperly or (c) Termination of taxable year for inaccurately reflected, the Director may adjust such jeopardy. Notwithstanding the provisions of items of income and deduction, and any factor taken subsections (a) and (b), if the Department terminates into account in allocating income to this State, to the taxable year of a taxpayer under section 1102 such extent as may reasonably be required to (relating to tax in jeopardy), the tax shall be
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determine the base income of such person properly (2) any deficiency which has not been paid allocable to this State. may be reduced (but not below zero) by the allowance of some or all of the Article 2 credits or (b) The Director may not make an net losses under Section 207 that were not taken into adjustment to base income under this Section that account in computing the tax assessed prior to has the same effect as retroactively applying any January 1, 1999; and amendments to this Act made by Public Act 93- 0840, Public Act 95-0233, or Public Act 95-0707. (3) in the case of any Article 2 credit or net (Source: P.A. 76-261.) loss under Section 207 that, pursuant to this subsection (c), could not be taken into account either Sec. 405 Carryovers in Certain in computing the tax assessed prior to January 1, Acquisitions. 1999 for a taxable year or in reducing a deficiency (a) In the case of the acquisition of assets for that taxable year under paragraph (2) of of a corporation by another corporation described in subsection (c), the allowance of such credit or loss Section 381(a) of the Internal Revenue Code, the in any other taxable year shall not be denied on the acquiring corporation shall succeed to and take into grounds that such credit or loss should not properly account, as of the close of the day of distribution or have been claimed in that taxable year under transfer, all Article 2 credits and net losses under subsection (a) or (b). Section 207 of the corporation from which the assets ARTICLE 5. RECORDS, RETURNS AND were acquired. NOTICES. (b) In the case of the acquisition of assets Sec. 501. Notice Or Regulations of a partnership in a transaction in which the Requiring Records, Statements acquiring partnership is considered to be a And Special Returns. continuation of the partnership from which the assets were acquired under the provisions of Section (a) In general. Every person liable for 708 of the Internal Revenue Code and any any tax imposed by this Act shall keep such records, regulations promulgated under that Section, the render such statements, make such returns and acquiring partnership shall succeed to and take into notices, and comply with such rules and regulations account, as of the close of the day of distribution or as the Department may from time to time prescribe. transfer, all Article 2 credits and net losses under Whenever in the judgment of the Director it is Section 207 of the partnership from which the assets necessary, he may require any person, by notice were acquired. served upon such person or by regulations, to make such returns and notices, render such statements, or (b-5) No limitation under Section 382 of keep such records, as the Director deems sufficient the Internal Revenue Code or the separate return to show whether or not such person is liable for tax limitation year regulations promulgated under under this Act. Section 1502 of the Internal Revenue Code shall apply to the carryover of any Article 2 credit or net (b) Reportable transactions. For each loss allowable under Section 207. taxable year in which a taxpayer is required to make a disclosure statement under Treasury Regulations (c) The provisions of this amendatory Act Section 1.6011-4 (26 CFR 1.6011-4) (including any of the 91st General Assembly shall apply to all taxpayer that is a member of a consolidated group acquisitions occurring in taxable years ending on or required to make such disclosure) with respect to a after December 31, 1986; provided that if a reportable transaction (including a listed taxpayer’s Illinois income tax liability for any transaction) in which the taxpayer participated in a taxable year, as assessed under Section 903 prior to taxable year for which a return is required under January 1, 1999, was computed without taking into Section 502 of this Act, such taxpayer shall file a account all of the Article 2 credits and net losses copy of such disclosure with the Department. under Section 207 as allowed by this Section: Disclosure under this subsection is required to be (1) no refund shall be payable to the made by any taxpayer that is a member of a unitary taxpayer for that taxable year as the result of business group that includes any person required to allowing any portion of the Article 2 credits or net make a disclosure statement under Treasury losses under Section 207 that were not taken into Regulations Section 1.6011-4. Disclosure under this account in computing the tax assessed prior to subsection is required with respect to any January 1, 1999; transaction entered into after February 28, 2000 that becomes a listed transaction at any time, and shall
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be made in the manner prescribed by the (1) Decedents. If an individual is deceased, Department. With respect to transactions in which any return or notice required of such individual the taxpayer participated for taxable years ending under this Act shall be made by his executor, before December 31, 2004, disclosure shall be made administrator, or other person charged with the by the due date (including extensions) of the first property of such decedent. return required under Section 502 of this Act due (2) Individuals under a disability. If an after the effective date of this amendatory Act of the individual is unable to make a return or notice 93rd General Assembly. With respect to required under this Act, the return or notice required transactions in which the taxpayer participated for of such individual shall be made by his duly taxable years ending on and after December 31, authorized agent, guardian, fiduciary or other person 2004, disclosure shall be made in the time and charged with the care of the person or property of manner prescribed in Treasury Regulations Section such individual. 1.6011-4(e). Notwithstanding the above, no disclosure is required for transactions entered into (3) Estates and trusts. Returns or notices after February 28, 2000 and before January 1, 2005 required of an estate or a trust shall be made by the (i) if the taxpayer has filed an amended Illinois fiduciary thereof. income tax return which reverses the tax benefits of (4) Receivers, trustees and assignees for the potential tax avoidance transaction, or (ii) as a corporations. In a case where a receiver, trustee in result of a federal audit the Internal Revenue Service bankruptcy, or assignee, by order of a court of has determined the tax treatment of the transaction and an Illinois amended return has been filed to competent jurisdiction, by operation of law, or reflect the federal treatment. otherwise, has possession of or holds title to all or substantially all the property or business of a (Source: P.A. 76-261.) corporation, whether or not such property or business is being operated, such receiver, trustee, or Sec. 502. Returns and notices. assignee shall make the returns and notices required (a) In general. A return with respect to the of such corporation in the same manner and form as taxes imposed by this Act shall be made by every corporations are required to make such returns and person for any taxable year: notices. (1) for which such person is liable for a tax (c) Joint returns by husband and wife. imposed by this Act, or (1) Except as provided in paragraph (3): (2) in the case of a resident or in the case of (A) if a husband and wife file a joint federal a corporation which is qualified to do business in income tax return for a taxable year ending before this State, for which such person is required to make December 31, 2009, they shall file a joint return a federal income tax return, regardless of whether under this Act for such taxable year and their such person is liable for a tax imposed by this Act. liabilities shall be joint and several; However, this paragraph shall not require a resident to make a return if such person has an Illinois base (B) if a husband and wife file a joint federal income of the basic amount in Section 204(b) or less income tax return for a taxable year ending on or and is either claimed as a dependent on another after December 31, 2009, they may elect to file person's tax return under the Internal Revenue Code, separate returns under this Act for such taxable year. or is claimed as a dependent on another person's tax The election under this paragraph must be made on return under this Act. or before the due date (including extensions) of the return and, once made, shall be irrevocable. If no Notwithstanding the provisions of election is timely made under this paragraph for a paragraph (1), a nonresident (other than, for taxable taxable year: years ending on or after December 31, 2011, a nonresident required to withhold tax under Section (i) the couple must file a joint return under 709.5) whose Illinois income tax liability under this Act for such taxable year, subsections (a), (b), (c), and (d) of Section 201 of (ii) their liabilities shall be joint and this Act is paid in full after taking into account the credits allowed under subsection (f) of this Section several, and or allowed under Section 709.5 of this Act shall not (iii) any overpayment for that taxable year be required to file a return under this subsection (a). may be withheld under Section 909 of this Act or under Section 2505-275 of the Civil Administrative (b) Fiduciaries and receivers. Code of Illinois and applied against a debt of either
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spouse without regard to the amount of the (i) An election properly made pursuant to overpayment attributable to the other spouse; and Section 6015 of the Internal Revenue Code shall constitute an election under this paragraph, provided (C) if the federal income tax liability of that the election shall not be effective until the either spouse is determined on a separate federal individual has notified the Department of the income tax return, they shall file separate returns election in the form and manner prescribed by the under this Act. Department. (2) If neither spouse is required to file a (ii) If no election has been made under federal income tax return and either or both are Section 6015, the individual may make an election required to file a return under this Act, they may under this paragraph in the form and manner elect to file separate or joint returns and pursuant to prescribed by the Department, provided that no such election their liabilities shall be separate or election may be made if the Department finds that joint and several. assets were transferred between individuals filing a (3) If either husband or wife is a resident joint return as part of a scheme by such individuals and the other is a nonresident, they shall file separate to avoid payment of Illinois income tax and the returns in this State on such forms as may be election shall not eliminate the individual's liability required by the Department in which event their tax for any portion of a deficiency attributable to an liabilities shall be separate; but if they file a joint error on the return of which the individual had actual federal income tax return for a taxable year, they knowledge as of the date of filing. may elect to determine their joint net income and file (iii) In determining the separate return a joint return for that taxable year under the amount or portion of any deficiency attributable to provisions of paragraph (1) of this subsection as if an individual, the Department shall follow the both were residents and in such case, their liabilities provisions in subsections (c) and (d) of Section 6015 shall be joint and several. of the Internal Revenue Code. (4) Innocent spouses. (iv) In determining the validity of an (A) However, for tax liabilities arising and individual's election under subparagraph (ii) and in paid prior to August 13, 1999, an innocent spouse determining an electing individual's separate return shall be relieved of liability for tax (including amount or portion of any deficiency under interest and penalties) for any taxable year for which subparagraph (iii), any determination made by the a joint return has been made, upon submission of Secretary of the Treasury, by the United States Tax proof that the Internal Revenue Service has made a Court on petition for review of a determination by determination under Section 6013(e) of the Internal the Secretary of the Treasury, or on appeal from the Revenue Code, for the same taxable year, which United States Tax Court under Section 6015 of the determination relieved the spouse from liability for Internal Revenue Code regarding criteria for federal income taxes. If there is no federal income eligibility or under subsection (d) of Section 6015 of tax liability at issue for the same taxable year, the the Internal Revenue Code regarding the allocation Department shall rely on the provisions of Section of any item of income, deduction, payment, or credit 6013(e) to determine whether the person requesting between an individual making the federal election innocent spouse abatement of tax, penalty, and and that individual's spouse shall be conclusively interest is entitled to that relief. presumed to be correct. With respect to any item that is not the subject of a determination by the Secretary (B) For tax liabilities arising on and after of the Treasury or the federal courts, in any August 13, 1999 or which arose prior to that date, proceeding involving this subsection, the individual but remain unpaid as of that date, if an individual making the election shall have the burden of proof who filed a joint return for any taxable year has with respect to any item except that the Department made an election under this paragraph, the shall have the burden of proof with respect to items individual's liability for any tax shown on the joint in subdivision (ii). return shall not exceed the individual's separate return amount and the individual's liability for any (v) Any election made by an individual deficiency assessed for that taxable year shall not under this subsection shall apply to all years for exceed the portion of the deficiency properly which that individual and the spouse named in the allocable to the individual. For purposes of this election have filed a joint return. paragraph: (vi) After receiving a notice that the federal election has been made or after receiving an election
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under subdivision (ii), the Department shall take no are not required to have the same taxable year. For collection action against the electing individual for taxable years ending on or after December 31, 1993, any liability arising from a joint return covered by taxpayers that are corporations (other than the election until the Department has notified the Subchapter S corporations) and that are members of electing individual in writing that the election is the same unitary business group shall be treated as invalid or of the portion of the liability the one taxpayer for purposes of any original return, Department has allocated to the electing individual. amended return which includes the same taxpayers Within 60 days (150 days if the individual is outside of the unitary group which joined in filing the the United States) after the issuance of such original return, extension, claim for refund, notification, the individual may file a written protest assessment, collection and payment and of the denial of the election or of the Department's determination of the group's tax liability under this determination of the liability allocated to him or her Act. and shall be granted a hearing within the (f) For taxable years ending prior to Department under the provisions of Section 908. If December 31, 2014, the Department may a protest is filed, the Department shall take no promulgate regulations to permit nonresident collection action against the electing individual until individual partners of the same partnership, the decision regarding the protest has become final nonresident Subchapter S corporation shareholders under subsection (d) of Section 908 or, if of the same Subchapter S corporation, and administrative review of the Department's decision nonresident individuals transacting an insurance is requested under Section 1201, until the decision business in Illinois under a Lloyds plan of operation, of the court becomes final. and nonresident individual members of the same (d) Partnerships. Every partnership having limited liability company that is treated as a any base income allocable to this State in partnership under Section 1501 (a)(16) of this Act, accordance with section 305(c) shall retain to file composite individual income tax returns information concerning all items of income, gain, reflecting the composite income of such individuals loss and deduction; the names and addresses of all allocable to Illinois and to make composite of the partners, or names and addresses of members individual income tax payments. For taxable years of a limited liability company, or other persons who ending prior to December 31, 2014, the Department would be entitled to share in the base income of the may by regulation also permit such composite partnership if distributed; the amount of the returns to include the income tax owed by Illinois distributive share of each; and such other pertinent residents attributable to their income from information as the Department may by forms or partnerships, Subchapter S corporations, insurance regulations prescribe. The partnership shall make businesses organized under a Lloyds plan of that information available to the Department when operation, or limited liability companies that are requested by the Department. treated as partnership under Section 1501(a)(16) of this Act, in which case such Illinois residents will be (e) For taxable years ending on or after permitted to claim credits on their individual returns December 31, 1985, and before December 31, 1993, for their shares of the composite tax payments. This taxpayers that are corporations (other than paragraph of subsection (f) applies to taxable years Subchapter S corporations) having the same taxable ending on or after December 31, 1987 and ending year and that are members of the same unitary prior to December 31, 2014. business group may elect to be treated as one taxpayer for purposes of any original return, For taxable years ending on or after amended return which includes the same taxpayers December 31, 1999, the Department may, by of the unitary group which joined in the election to regulation, permit any persons transacting an file the original return, extension, claim for refund, insurance business organized under a Lloyds plan of assessment, collection and payment and operation to file composite returns reflecting the determination of the group's tax liability under this income of such persons allocable to Illinois and the Act. This subsection (e) does not permit the election tax rates applicable to such persons under Section to be made for some, but not all, of the purposes 201 and to make composite tax payments and shall, enumerated above. by regulation, also provide that the income and apportionment factors attributable to the transaction For taxable years ending on or after of an insurance business organized under a Lloyds December 31, 1987, corporate members (other than plan of operation by any person joining in the filing Subchapter S corporations) of the same unitary of a composite return shall, for purposes of business group making this subsection (e) election allocating and apportioning income under Article 3
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of this Act and computing net income under Section due on the return may be (i) treated as being due at 202 of this Act, be excluded from any other income the same time as the income tax obligation, (ii) and apportionment factors of that person or of any assessed, collected, and deposited in the same unitary business group, as defined in subdivision manner as income taxes, and (iii) treated as an (a)(27) of Section 1501, to which that person may income tax liability for all purposes. belong. The individual income tax return For taxable years ending on or after instructions shall include information explaining the December 31, 2008, every nonresident shall be tax imposed under the Use Tax Act and informing allowed a credit against his or her liability under taxpayers how to report and pay their use tax subsections (a) and (b) of Section 201 for any obligations, including specific information on how amount of tax reported on a composite return and to report and pay individual use tax at the same time paid on his or her behalf under this subsection (f). as the individual income tax return is filed. Residents (other than persons transacting an This Section shall not apply to any insurance business organized under a Lloyds plan of amended return. operation) may claim a credit for taxes reported on a composite return and paid on their behalf under Sec. 503. Signing Of Returns And this subsection (f) only as permitted by the Notices. Department by rule. (a) Signature presumed authentic. The fact (f-5) For taxable years ending on or after that an individual's name is signed to a return or December 31, 2008, the Department may adopt notice shall be prima facie evidence for all purposes rules to provide that, when a partnership or that such document was actually signed by such Subchapter S corporation has made an error in individual. If a return is prepared by an income tax determining the amount of any item of income, return preparer for a taxpayer, that preparer shall deduction, addition, subtraction, or credit required sign the return as the preparer of that return and to be reported on its return that affects the liability include his or her PTIN, as defined in the State Tax imposed under this Act on a partner or shareholder, Preparer Oversight Act, on the return. If a return is the partnership or Subchapter S corporation may transmitted to the Department electronically, the report the changes in liabilities of its partners or Department may presume that the electronic return shareholders and claim a refund of the resulting originator has obtained and is transmitting a valid overpayments, or pay the resulting underpayments, signature document pursuant to the rules on behalf of its partners and shareholders. promulgated by the Department for the electronic filing of tax returns, or the Department may (g) The Department may adopt rules to authorize electronic return originators to maintain authorize the electronic filing of any return required the signature documents and associated to be filed under this Section. (Source: P.A. 94- documentation, subject to the Department's right of 1074, eff. 12-26-06; 95-233, eff. 8-16-07.) inspection at any time without notice, rather than Sec. 502.1. Use tax. transmitting those documents to the Department, and the Department may process the return. Beginning with taxable years ending on or after December 31, 2010, individual purchasers with (b) Corporations. A return or notice an annual use tax liability that does not exceed $600 required of a corporation shall be signed by the may, in lieu of the filing and payment requirements president, vice-president, treasurer or any other of Section 10 of the Use Tax Act, file and pay in officer duly authorized so to act or, in the case of a compliance with this Section. limited liability company, by a manager or member. In the case of a return or notice made for a Beginning with taxable years ending on or corporation by a fiduciary pursuant to the provisions after December 31, 2010, the Department shall print of section 502(b)(4), such fiduciary shall sign such on its standard individual income tax form a document. The fact that an individual's name is provision indicating that if the taxpayer's annual signed to a return or notice shall be prima facie individual use tax liability does not exceed $600, he evidence that such individual is authorized to sign or she may report and pay individual use tax liability such document on behalf of the corporation. at the same time as his or her individual income tax liability. If the taxpayer elects to report and pay his (c) Partnerships. A return or notice of a or her individual use tax liability at the same time as partnership shall be signed by any one of the his or her standard individual income tax liability in partners or, in the case of a limited liability accordance with this Section, then the use tax shown company, by a manager or member. The fact that a
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partner's name is signed to a return or notice shall be federal purposes on a return with a due date later prima facie evidence that such individual is than the 15th day of the third month following the authorized to sign such document on behalf of the close of the taxable year, in which case the same due partnership or limited liability company. date shall apply to the corresponding Illinois return. (d) Joint fiduciaries. A return or notice (2) Individuals, partnerships and signed by one of two or more joint fiduciaries will fiduciaries. Except as provided in paragraph (3), comply with the requirements of this Act. The fact individual, partnership and fiduciary returns shall be that a fiduciary's name is signed to such document filed on or before the 15th day of the fourth month shall be prima facie evidence that such fiduciary is following the close of the taxable year, unless, authorized to sign such document on behalf of the subject to the provisions of Section 602, the Director person from whom it is required. grants an extension or extensions of time (not to exceed 6 months in the aggregate) for such filing, (e) Failure to sign a return. If a taxpayer except that a final return of a decedent shall be filed fails to sign a return within 30 days after proper at the time (including any extensions thereof) it notice and demand for signature by the Department, would have been due if the decedent had not died. the return shall be considered valid and any amount shown to be due on the return shall be deemed (3) Certain Exempt Organizations. assessed. Any overpayment of tax shown on the face Organizations which are exempt from the Federal of an unsigned return shall be considered forfeited if income tax by reason of Section 501(a) of the after notice and demand for signature by the Internal Revenue Code who determine base income Department the taxpayer fails to provide a signature for a taxable year under subsection (a) of Section and 3 years have passed from the date the return was 205 (other than an employees' trust described in filed. An overpayment of tax refunded to a taxpayer Section 401(a) of the Internal Revenue Code), shall whose return was filed electronically shall be file returns required by this Act on or before the 15th considered an erroneous refund under Section 912 day of the 5th month following the close of the of this Act if, after proper notice and demand by the taxable year, unless, subject to the provisions of Department, the taxpayer fails to provide a required Section 602, the Director grants an extension or signature document. A notice and demand for extensions of time (not to exceed 6 months in the signature in the case of a return reflecting an aggregate) for such filing. overpayment may be made by first class mail. This (b) Extension of time for filing federal subsection (e) shall apply to all returns filed return. When the taxpayer has been granted an pursuant to the Illinois Income Tax Act since 1969. extension or extensions of time within which to file Sec. 504. Verification. his federal income tax return for any taxable year, the filing of a copy of such extension or extensions Each return or notice required to be filed with the Department shall automatically extend the under this Act shall contain or be verified by a due date of the return with respect to the tax imposed written declaration that it is made under the by this Act for an equivalent period (plus an penalties of perjury. A taxpayer's signing a additional month beyond the federal extension in the fraudulent return under this Act is perjury, as case of corporations) if the requirements of Section defined in Section 32-2 of the Criminal Code of 602 are met. 1961. (Source: P.A. 82-1009.) (c) Extension of time for filing when Sec. 505. Time And Place For Filing abroad. If an individual is living or traveling outside Returns. the United States and Puerto Rico on the 15th day of (a) In general. Returns required by this Act the 4th month following the close of his taxable year shall be filed at such place as the Department may ending on or after December 31, 1983, the return by regulations prescribe. required to be filed under Section 502 of this Act relative to that taxable year shall, in no event, be due (1) Corporations. Except as provided in prior to the 15th day of the 6th month following the paragraph (3), corporate returns shall be filed on or close of that taxable year. In the case of a joint return before the 15th day of the third month following the filed in accordance with Section 502(c), the 2 month close of the taxable year, unless, subject to the extension provided for in this subsection (c) is provisions of Section 602, the Director grants an available if either spouse is living or traveling extension or extensions of time (not to exceed 6 outside the United States and Puerto Rico on the months in the aggregate) for such filing, or unless 15th day of the 4th month following the close of the the income or loss of a taxpayer is reported for taxable year ending on or after December 31, 1983.
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Nothing in this subsection (c) shall be construed to resulting therefrom has been assessed or paid, extend the time in which the individual must pay the whichever shall first occur. (Source: P.A. 90-491, tax due under Section 601(a). (Source: P.A. 84- eff. 1-1-98.) 1400.) Sec. 506.5. Returns Based On Substitute Sec. 506. Federal Returns. W-2 Forms. (a) In general. Any person required to For a taxpayer who has received wages make a return for a taxable year under this Act may, from an employer in Illinois, loses or was not at any time that a deficiency could be assessed or a provided a W-2 form, is unable to obtain a duplicate refund claimed under this Act in respect of any item W-2 form from the employer, and subsequently reported or properly reportable on such return or any obtains a substitute W-2 form from the Internal amendment thereof, be required to furnish to the Revenue Service, it shall be presumed that tax was Department a true and correct copy of any return withheld under Article 7 of this Act in an which may pertain to such item and which was filed appropriate amount based on the number of by such person under the provisions of the Internal withholding exemptions used to determine the Revenue Code. federal income tax withholding for the taxpayer if (i) the substitute W-2 form indicates the appropriate (b) Changes affecting federal income tax. amount of federal taxes withheld, (ii) the taxpayer A person shall notify the Department if: files a copy of the substitute W-2 form with his or (1) the taxable income, any item of income her Illinois income tax return, and (iii) the taxpayer or deduction, the income tax liability, or any tax provides a mailing address to which any credit reported in an original or amended federal correspondence or refund, if any, may be sent. income tax return of that person for any year or as (Source: P.A. 88-669, eff. 11-29-94.) determined by the Internal Revenue Service or the Sec. 507. Child Abuse Prevention Fund courts is altered by amendment of such return or as Checkoff. a result of any other recomputation or redetermination of federal taxable income or loss, The Department shall print on its standard and such alteration reflects a change or settlement individual income tax form a provision indicating with respect to any item or items, affecting the that if the taxpayer wishes to contribute to the Child computation of such person's net income, net loss, Abuse Prevention Fund created by Section 4a of or of any credit provided by Article 2 of this Act for "An Act creating the Department of Children and any year under this Act, or in the number of personal Family Services, codifying its powers and duties, exemptions allowable to such person under Section and repealing certain Acts and Sections herein 151 of the Internal Revenue Code, or named", approved June 4, 1963, as amended, he or she may do so by stating the amount of such (2) the amount of tax required to be contribution (not less than $1) on such return and withheld by that person from compensation paid to that such contributions will reduce the taxpayer's employees and required to be reported by that refund or increase the amount of payment to person on a federal return is altered by amendment accompany the return. Failure to remit any amount of the return or by any other recomputation or of increased payment shall reduce the contribution redetermination that is agreed to or finally accordingly. This Section shall not apply to an determined on or after January 1, 2003, and the amended return. alteration affects the amount of compensation subject to withholding by that person under Section If, on October 1 of any year, the total 701 of this Act. contributions made pursuant to this Section do not equal $100,000 or more, the explanations and spaces Such notification shall be in the form of an amended for designating contributions shall be removed from return or such other form as the Department may by the individual income tax return forms for the regulations prescribe, shall contain the person's following and all subsequent years and all name and address and such other information as the subsequent contributions to such fund shall be Department may by regulations prescribe, shall be refunded to the taxpayer. signed by such person or his duly authorized representative, and shall be filed not later than 120 (This Section was repealed by P.A. 92-84 days after such alteration has been agreed to or on July 1, 2002.) (Source: P.A. 86-678.) finally determined for federal income tax purposes or any federal income tax deficiency or refund, tentative carryback adjustment, abatement or credit
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Sec. 507A. Community Health Center Sec. 507E. Assistive Technology For Care Fund Checkoff. Persons With Disabilities Fund Checkoff. The Department shall print on its standard individual income tax form a provision indicating The Department shall print on its standard that if the taxpayer wishes to contribute to the individual income tax form a provision indicating Community Health Center Care Fund created by this that if the taxpayer wishes to contribute to the amendatory Act of 1989, he or she may do so by Assistive Technology for Persons with Disabilities stating the amount of such contribution (not less Fund created by this amendatory Act of 1991, he or than $1) on such return and that such contribution she may do so by stating the amount of that will reduce the taxpayer's refund or increase the contribution, which may not be less than $1, on the amount of payment to accompany the return. Failure return and that the contribution will reduce the to remit any amount of increased payment shall taxpayer's refund or increase the amount of payment reduce the contribution accordingly. This Section required to accompany the return. Failure to remit shall not apply to an amended return. the appropriate increase in the payment shall reduce the contribution accordingly. This Section shall not (This Section was repealed by P.A. 92-84 apply to an amended return. on July 1, 2002.) (Source: P.A. 86-996.) (This Section was repealed by P.A. 92-84 Sec. 507B. Child Care Expansion on July 1, 2002.) (Source: P.A. 87-342.) Program Fund Checkoff. Sec. 507F. Domestic Violence Shelter And The Department shall print on its standard Service Fund Checkoff. individual income tax form a provision indicating that if the taxpayer wishes to contribute to the Child The Department shall print on its standard Care Expansion Program Fund created by this individual income tax form a provision indicating amendatory Act of 1989, he or she may do so by that if the taxpayer wishes to contribute to the stating the amount of such contribution (not less Domestic Violence Shelter and Service Fund, he or than $1) on such return and that such contributions she may do so by stating the amount of the will reduce the taxpayer's refund or increase the contribution (not less than $1) on the return and that amount of payment to accompany the return. Failure the contribution will reduce the taxpayer's refund or to remit any amount of increased payment shall increase the amount of payment to accompany the reduce the contribution accordingly. This Section return. Failure to remit any amount of increased shall not apply to an amended return. payment shall reduce the contribution accordingly. This Section shall not apply to an amended return. (This Section was repealed by P.A. 92-84 on July 1, 2002.) (Source: P.A. 86-995.) (This Section was repealed by P.A. 92-84 on July 1, 2002.) (Source: P.A. 87-342.) Sec. 507C. Youth Drug Abuse Prevention Fund Checkoff. Sec. 507G. United States Olympians Assistance Fund Checkoff. The Department shall print on its standard individual income tax form a provision indicating The Department shall print on its standard that if the taxpayer wishes to contribute to the Youth individual income tax form a provision indicating Drug Abuse Prevention Fund as authorized by this that if the taxpayer wishes to contribute to the amendatory Act of 1991, he or she may do so by United States Olympians Assistance Fund created stating the amount of the contribution (not less than by this amendatory Act of 1991, he or she may do $1) on the return and that the contribution will so by stating the amount of such contribution (not reduce the taxpayer's refund or increase the amount less than $1) on such return and that such of payment to accompany the return. Failure to remit contributions will reduce the taxpayer's refund or any amount of increased payment shall reduce the increase the amount of payment to accompany the contribution accordingly. This Section shall not return. Failure to remit any amount of increased apply to an amended return. payment shall reduce the contribution accordingly. This Section shall not apply to an amended return. (This Section was repealed by P.A. 92-84 on July 1, 2002.) (Source: P.A. 87-342.) (This Section was repealed by P.A. 92-84 on July 1, 2002.) (Source: P.A. 87-342.)
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Sec. 507H. Persian Gulf Conflict Veterans Sec. 507K. Illinois Special Olympics Fund Checkoff. Checkoff. The Department shall print on its standard Beginning with taxable years ending on individual income tax form a provision indicating December 31, 1993, the Department shall print on that if the taxpayer wishes to contribute to the its standard individual income tax form a provision Persian Gulf Conflict Veterans Fund, he or she may indicating that if the taxpayer wishes to contribute do so by stating the amount of the contribution (not to the Illinois Special Olympics Checkoff Fund as less than $1) on the return and that the contributions authorized by this amendatory Act of 1993, he or will reduce the taxpayer's refund or increase the she may do so by stating the amount of the amount of payment to accompany the return. Failure contribution (not less than $1) on the return and that to remit any amount of increased payment shall the contribution will reduce the taxpayer's refund or reduce the contribution accordingly. This Section increase the amount of payment to accompany the shall not apply to an amended return. return. Failure to remit any amount of increased payment shall reduce the contribution accordingly. (This Section was repealed by P.A. 92-84 This Section shall not apply to an amended return. on July 1, 2002.) (Source: P.A. 87-119; 87-895.) (This Section was repealed by P.A. 92-84 Sec. 507I. Literacy Advancement Fund on July 1, 2002.) (Source: P.A. 88-459.) Checkoff. Sec. 507L. Penny Severns Breast, The Department shall print on its standard Cervical, and Ovarian Cancer individual income tax form a provision indicating Research Fund Checkoff. that if the taxpayer wishes to contribute to the Literacy Advancement Fund created by this Beginning with taxable years ending on amendatory Act of 1992, he or she may do so by December 31, 1993, the Department shall print on stating the amount of that contribution, which may its standard individual income tax form a provision not be less than $1, on the return and that the indicating that if the taxpayer wishes to contribute contribution will reduce the taxpayer's refund or to the Penny Severns Breast, Cervical, and Ovarian increase the amount of payment required to Cancer Research Fund as authorized by this accompany the return. Failure to remit the amendatory Act of the 91st General Assembly, he or appropriate increase in the payment shall reduce the she may do so by stating the amount of the contribution accordingly. This Section shall not contribution (not less than $1) on the return and that apply to an amended return. the contribution will reduce the taxpayer's refund or increase the amount of the payment to accompany (This Section was repealed by P.A. 92-84 the return. Failure to remit any amount of increased on July 1, 2002.) (Source: P.A. 87-992.) payment shall reduce the contribution accordingly. Sec. 507J. Ryan White Pediatric And This Section shall not apply to an amended return. Adult AIDS Fund Checkoff. (Source: P.A. 88-85; 88-459; 88-670, eff. 12-2-94; 91-107, eff. 7-13-99.) Beginning with taxable years ending on December 31, 1993, the Department shall print on Sec. 507M. Meals On Wheels Fund its standard individual income tax form a provision Checkoff. indicating that if the taxpayer wishes to contribute If and only if a tax checkoff under this Act to the Ryan White Pediatric and Adult AIDS Fund, administered by the Department on Aging does not as authorized by this amendatory Act of 1993, he or receive $100,000 by October 1, 1993, then she may do so by stating the amount of the beginning with taxable years ending on December contribution (not less than $1) on the return and that 31, 1993, the Department shall print on its standard the contribution will reduce the taxpayer's refund or individual income tax form a provision indicating increase the amount of payment to accompany the that if the taxpayer wishes to contribute to the Meals return. Failure to remit any amount of increased on Wheels Checkoff Fund as authorized by this payment shall reduce the contribution accordingly. amendatory Act of 1993, he or she may do so by This Section shall not apply to any amended return. stating the amount of the contribution (not less than (This Section was repealed by P.A. 92-84 $1) on the return and that the contribution will on July 1, 2002.) (Source: P.A. 88-459.) reduce the taxpayer's refund or increase the amount of payment to accompany the return. Failure to remit any amount of increased payment shall reduce the
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contribution accordingly. This Section shall not contribution accordingly. This Section shall not apply to an amended return. apply to any amended return. (This Section was repealed by P.A. 92-84 (This Section was repealed by P.A. 92-84 on July 1, 2002.) (Source: P.A. 88-459.) on July 1, 2002.) (Source: P.A. 88-666, eff. 9-16- 94.) Sec. 507N. Korean War Memorial Fund Checkoff. Sec. 507Q. Women In Military Service Memorial Fund Checkoff. The Department shall print on its standard individual income tax form a provision indicating The Department shall print on its standard that if the taxpayer wishes to contribute to the individual income tax form a provision indicating Korean War Memorial Fund, as authorized by this that if the taxpayer wishes to contribute to the amendatory Act of 1994, he or she may do so by Women in Military Service Memorial Fund, as stating the amount of the contribution (not less than authorized by this amendatory Act of 1995, he or $1) on the return and that the contribution will she may do so by stating the amount of the reduce the taxpayer's refund or increase the amount contribution (not less than $1) on the return and that of payment to accompany the return. Failure to remit the contribution will reduce the taxpayer's refund or any amount of increased payment shall reduce the increase the amount of payment to accompany the contribution accordingly. This Section shall not return. Failure to remit any amount of increased apply to any amended return. payment shall reduce the contribution accordingly. This Section shall not apply to any amended return. (This Section was repealed by P.A. 92-84 on July 1, 2002.) (Source: P.A. 88-666, eff. 9-16- (This Section was repealed by P.A. 91-833 94.) and P.A. 91-836 on June 16, 2000.) (Source: P.A. 89-230, eff. 1-1-96; 89-324, eff. 8-13-95.) Sec. 507O. Heart Disease Treatment And Prevention Fund Checkoff. Sec. 507R. Mental Health Research Fund Checkoff. The Department shall print on its standard individual income tax form a provision indicating The Department shall print on its standard that if the taxpayer wishes to contribute to the Heart individual income tax form a provision indicating Disease Treatment and Prevention Fund, as that if the taxpayer wishes to contribute to the authorized by this amendatory Act of 1994, he or Mental Health Research Fund, as authorized by this she may do so by stating the amount of the amendatory Act of 1997, he or she may do so by contribution (not less than $1) on the return and that stating the amount of the contribution (not less than the contribution will reduce the taxpayer's refund or $1) on the return and that the contribution will increase the amount of payment to accompany the reduce the taxpayer's refund or increase the amount return. Failure to remit any amount of increased of payment to accompany the return. Failure to remit payment shall reduce the contribution accordingly. any amount of increased payment shall reduce the This Section shall not apply to any amended return. contribution accordingly. This Section shall not apply to any amended return. (This Section was repealed by P.A. 92-84 on July 1, 2002.) (Source: P.A. 88-666, eff. 9-16- (This Section was repealed by P.A. 92-84 94.) on July 1, 2002.) (Source: P.A. 90-171, eff. 7-23- 97.) Sec. 507P. Hemophilia Treatment Fund Checkoff. Sec. 507S. Children’s Cancer Fund Checkoff. The Department shall print on its standard individual income tax form a provision indicating The Department shall print on its standard that if the taxpayer wishes to contribute to the individual income tax form a provision indicating Hemophilia Treatment Fund, as authorized by this that if the taxpayer wishes to contribute to the amendatory Act of 1994, he or she may do so by Children’s Cancer Fund, as authorized by this stating the amount of the contribution (not less than amendatory Act of 1997, he or she may do so by $1) on the return and that the contribution will stating the amount of the contribution (not less than reduce the taxpayer's refund or increase the amount $1) on the return and that the contribution will of payment to accompany the return. Failure to remit reduce the taxpayer's refund or increase the amount any amount of increased payment shall reduce the of payment to accompany the return. Failure to remit any amount of increased payment shall reduce the
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contribution accordingly. This Section shall not (This Section was repealed by P.A. 99-933 apply to any amended return. on January 27, 2017.) (Source: P.A. 90-171, Eff. 7- 23-97.) (This Section was repealed by P.A. 92-84 on July 1, 2002.) (Source: P.A. 90-171, eff. 7-23- Sec. 507W. Korean War Veterans National 97.) Museum and Library Fund checkoff. Sec. 507T. American Diabetes Association Checkoff. Beginning with taxable years ending on or after December 31, 2001, the Department shall print on The Department shall print on its standard its standard individual income tax form a provision individual income tax form a provision indicating indicating that if the taxpayer wishes to contribute that if the taxpayer wishes to contribute to the to the Korean War Veterans National Museum and American Diabetes Association Fund, as authorized Library Fund, as authorized by this amendatory Act by this amendatory Act of 1997, he or she may do of the 92nd General Assembly, he or she may do so so by stating the amount of the contribution (not less by stating the amount of the contribution (not less than $1) on the return and that the contribution will than $1) on the return and that the contribution will reduce the taxpayer's refund or increase the amount reduce the taxpayer's refund or increase the amount of payment to accompany the return. Failure to remit of payment to accompany the return. Failure to remit any amount of increased payment shall reduce the any amount of increased payment shall reduce the contribution accordingly. This Section shall not contribution accordingly. This Section shall not apply to any amended return. apply to any amended return. (This Section was repealed by P.A. 92-84 (This Section was repealed by P.A. 99-576 on July 1, 2002.) (Source: P.A. 90-171, eff. 7-23- on July 15, 2016.) (Source: P.A. 92-651, eff. July 97.) 11, 2002.) Sec. 507U. Prostate Cancer Research Sec. 507X. The Multiple Sclerosis Fund checkoff. Assistance Fund checkoff. The Department shall print on its standard Beginning with taxable years ending on or individual income tax form a provision indicating after December 31, 2002, the Department shall print that if the taxpayer wishes to contribute to the on its standard individual income tax form a Prostate Cancer Research Fund, as authorized by provision indicating that if the taxpayer wishes to this amendatory Act of the 91st General Assembly, contribute to the Multiple Sclerosis Assistance he or she may do so by stating the amount of the Fund, as authorized by this amendatory Act of the contribution (not less than $1) on the return and that 92nd General Assembly, he or she may do so by the contribution will reduce the taxpayer's refund or stating the amount of the contribution (not less than increase the amount of payment to accompany the $1) on the return and that the contribution will return. Failure to remit any amount of increased reduce the taxpayer's refund or increase the amount payment shall reduce the contribution accordingly. of payment to accompany the return. Failure to remit This Section shall not apply to any amended return. any amount of increased payment shall reduce the (Source: P.A. 91-104, eff. 7-13-99.) contribution accordingly. This Section shall not Sec. 507V. National World War II apply to any amended return. Memorial Fund checkoff. (This Section was repealed by P.A. 99-933 The Department shall print on its standard on January 27, 2017.) individual income tax form a provision indicating Sec. 507Y. The Illinois Military Family that if the taxpayer wishes to contribute to the Relief checkoff. National World War II Memorial Fund, as authorized by this amendatory Act of the 91st Beginning with taxable years ending on or General Assembly, he or she may do so by stating after December 31, 2003, the Department shall print the amount of the contribution (not less than $1) on on its standard individual income tax form a the return and that the contribution will reduce the provision indicating that if the taxpayer wishes to taxpayer's refund or increase the amount of payment contribute to the Illinois Military Family Relief to accompany the return. Failure to remit any Fund, as authorized by this amendatory Act of the amount of increased payment shall reduce the 92nd General Assembly, he or she may do so by contribution accordingly. This Section shall not stating the amount of the contribution (not less than apply to any amended return. $1) on the return and that the contribution will
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reduce the taxpayer's refund or increase the amount Sec. 507BB. Asthma and Lung Research of payment to accompany the return. Failure to remit checkoff. (PA 93-0292) any amount of increased payment shall reduce the The Department must print on its standard contribution accordingly. This Section shall not individual income tax form a provision indicating apply to any amended return. (Source: P.A. 95-331, that if the taxpayer wishes to contribute to the eff. 8-21-07.) Asthma and Lung Research Fund, as authorized by Sec. 507Z. World War II Illinois Veterans this amendatory Act of the 93rd General Assembly, Memorial Fund checkoff. he or she may do so by stating the amount of the contribution (not less than $1) on the return and that Beginning with taxable years ending on or the contribution will reduce the taxpayer's refund or after December 31, 2003, the Department shall print increase the amount of payment to accompany the on its standard individual income tax form a return. Failure to remit any amount of increased provision indicating that if the taxpayer wishes to payment reduces the contribution accordingly. This contribute to the World War II Illinois Veterans Section does not apply to an amended return. Memorial Fund, as authorized by this amendatory Act of the 93rd General Assembly, he or she may do Sec. 507CC. The Leukemia Treatment and so by stating the amount of the contribution (not less Education checkoff. (PA 93- than $1) on the return and that the contribution will 0324) reduce the taxpayer's refund or increase the amount The Department shall print on its standard of payment to accompany the return. Failure to remit individual income tax form a provision indicating any amount of increased payment shall reduce the that if the taxpayer wishes to contribute to the contribution accordingly. This Section shall not Leukemia Treatment and Education Fund, as apply to any amended return. The Department shall authorized by this amendatory Act of the 93rd clearly state in its instructions to taxpayers and shall General Assembly, he or she may do so be stating make it clear on the tax return form itself that money the amount of the contribution (not less than $1) on donated to the World War II Illinois Veterans the return and that the contribution will reduce the Memorial Fund will go to fund a World War II taxpayer's refund or increase the amount of payment memorial to Illinois Veterans located in Springfield, to accompany the return. Failure to remit any Illinois and will not go to the World War II amount of increased payment shall reduce the Memorial Fund created to fund a national World contribution accordingly. This Section shall not War II memorial in Washington, D.C. apply to any amended return. (This Section was repealed by P.A. 99-933 Sec. 507DD. The Illinois Veterans' Homes on January 27, 2017.) Fund checkoff. Sec. 507AA. The Lou Gehrig's Disease For taxable years ending on or after (ALS) Research Fund checkoff. December 31, 2004, the Department shall print on (PA 93-0036) its standard individual income tax form a provision Beginning with the taxable year ending on indicating that if the taxpayer wishes to contribute December 31, 2003, the Department shall print on to the Illinois Veterans' Homes Fund, as authorized its standard individual income tax form a provision by this amendatory Act of the 93rd General indicating that if the taxpayer wishes to contribute Assembly, he or she may do so by stating the to the Lou Gehrig's Disease (ALS) Research Fund, amount of the contribution (not less than $1) on the as authorized by this amendatory Act of the 93rd return and that the contribution will reduce the General Assembly, he or she may do so by stating taxpayer's refund or increase the amount of payment the amount of the contribution (not less than $1) on to accompany the return. Failure to remit any the return and that the contribution will reduce the amount of increased payment shall reduce the taxpayer's refund or increase the amount of payment contribution accordingly. This Section shall not to accompany the return. Failure to remit any apply to any amended return. amount of increased payment shall reduce he Sec. 507EE. Pet Population Control Fund contribution accordingly. This Section shall not checkoff. apply to any amended return. The Department must print on its standard individual income tax form a provision indicating that if the taxpayer wishes to contribute to the Pet Population Control Fund, as established in the
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Illinois Public Health and Safety Animal Population Control Act, he or she may do so by stating the Sec. 507HH. Sarcoidosis Research Fund amount of the contribution (not less than $1) on the checkoff. return and that the contribution will reduce the taxpayer's refund or increase the amount of payment The Department shall print on its standard to accompany the return. Failure to remit any individual income tax form a provision indicating amount of increased payment reduces the that if the taxpayer wishes to contribute to the contribution accordingly. This Section does not Sarcoidosis Research Fund, as authorized by apply to any amended return. Public Act 94-141, he or she may do so by The Department of Revenue shall stating the amount of the contribution (not less than determine annually the total amount contributed to $1) on the return and that the contribution will the Fund pursuant to this Section and shall notify the reduce the taxpayer's refund or increase the amount State Comptroller and the State Treasurer of the of payment to accompany the return. Failure to remit amount to be transferred to the Pet Population any amount of increased payment shall reduce the Control Fund, and upon receipt of the notification contribution accordingly. This Section shall not the State Comptroller shall transfer the amount. apply to any amended return. (This Section was repealed by P.A. 99-933 (Source: P.A. 94-141, eff. 1-1-06.) on January 27, 2017.) (Source: P.A. 94-639, eff. 8- Sec. 507II. The Vince Demuzio Memorial 22-05.) Colon Cancer Fund checkoff. Sec. 507FF. Epilepsy Treatment and For taxable years ending on or after Education Grants-in-Aid Fund December 31, 2005, the Department must print on checkoff. its standard individual income tax form a provision The Department must print on its standard indicating that if the taxpayer wishes to contribute individual income tax form a provision indicating to the Vince Demuzio Memorial Colon Cancer that if the taxpayer wishes to contribute to the Fund, as authorized by Public Act 94-142, he or she Epilepsy Treatment and Education Grants-in-Aid may do so by stating the amount of the contribution Fund, as authorized by Public Act 94-73, he or she (not less than $1) on the return and that the may do so by stating the amount of the contribution contribution will reduce the taxpayer's refund or (not less than $1) on the return and that the increase the amount of payment to accompany the contribution will reduce the taxpayer's refund or return. Failure to remit any amount of increased increase the amount of payment to accompany the payment shall reduce the contribution accordingly. return. Failure to remit any amount of increased This Section does not apply to any amended return. payment reduces the contribution accordingly. This (Source: P.A. 94-142, eff. 1-1-06.) Section does not apply to any amended return. Sec. 507JJ. The Autism Research Checkoff (Source: P.A. 94-73, eff. 6-23-05.) Fund checkoff. Sec. 507GG. Diabetes Research Checkoff For taxable years ending on or after Fund checkoff. December 31, 2005, the Department must print on For taxable years ending on or after its standard individual income tax form a provision December 31, 2005, the Department must print on indicating that if the taxpayer wishes to contribute its standard individual income tax form a provision to the Autism Research Checkoff Fund, as indicating that if the taxpayer wishes to contribute authorized by Public Act 94-442, he or she may do to the Diabetes Research Checkoff Fund, as so by stating the amount of the contribution (not less authorized by Public Act 94-107, he or she may do than $1) on the return and that the contribution will so by stating the amount of the contribution (not less reduce the taxpayer's refund or increase the amount than $1) on the return and that the contribution will of payment to accompany the return. Failure to remit reduce the taxpayer's refund or increase the amount any amount of increased payment shall reduce the of payment to accompany the return. Failure to remit contribution accordingly. This Section does not any amount of increased payment shall reduce the apply to any amended return. contribution accordingly. This Section does not (Source: P.A. 94-442, eff. 8-4-05.) apply to any amended return.
(Source: P.A. 94-107, eff. 7-1-05.)
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Sec. 507KK. Blindness Prevention Fund Sec. 507NN. The Heartsaver AED Fund checkoff. checkoff. (P.A. 94-876) For taxable years ending on or after For taxable years ending on or after December 31, 2005, the Department shall print on December 31, 2005, the Department must print on its standard individual income tax form a provision its standard individual income tax form a provision indicating that if the taxpayer wishes to contribute indicating that if the taxpayer wishes to contribute to the Blindness Prevention Fund, as authorized by to the Heartsaver AED Fund, as authorized by this Public Act 94-602, he or she may do so by stating amendatory Act of the 94th General Assembly, he the amount of the contribution (not less than $1) on or she may do so by stating the amount of the the return and that the contribution will reduce the contribution (not less than $1) on the return and that taxpayer's refund or increase the amount of payment the contribution will reduce the taxpayer's refund or to accompany the return. Failure to remit any increase the amount of payment to accompany the amount of increased payment shall reduce the return. Failure to remit any amount of increased contribution accordingly. This Section shall not payment shall reduce the contribution accordingly. apply to any amended return. This Section does not apply to any amended return. (Source: P.A. 94-602, eff. 8-16-05.) (This Section was repealed by P.A. 99-933 on January 27, 2017.)
Sec. 507PP. The lung cancer research Sec. 507LL. The Illinois Brain Tumor checkoff. (Public Act 95-434) Research checkoff. For taxable years ending on or after For taxable years ending on or after December 31, 2007, the Department shall print, on December 31, 2005, the Department shall print on its standard individual income tax form, a provision its standard individual income tax form a provision indicating that, if the taxpayer wishes to contribute indicating that if the taxpayer wishes to contribute to the Lung Cancer Research Fund, as authorized by to the Illinois Brain Tumor Research Fund, as this amendatory Act of the 95th General Assembly, authorized by Public Act 94-649, he or she may do then he or she may do so by stating the amount of so by stating the amount of the contribution (not less the contribution (not less than $1) on the return and than $1) on the return and that the contribution will indicating that the contribution will reduce the reduce the taxpayer's refund or increase the amount taxpayer's refund or increase the amount of payment of payment to accompany the return. Failure to remit to accompany the return. The taxpayer's failure to any amount of increased payment shall reduce the remit any amount of the increased payment reduces contribution accordingly. This Section shall not the contribution accordingly. This Section does not apply to any amended return. apply to any amended return. Sec. 507MM. Supplemental Low-Income Sec. 507QQ. The autoimmune disease Energy Assistance Fund research checkoff. (Public Act checkoff. 95-435) Beginning with taxable years ending on For taxable years ending on or after December 31, 2006, the Department shall print on December 31, 2007, the Department shall print, on its standard individual income tax form a provision its standard individual income tax form, a provision indicating that if the taxpayer wishes to contribute indicating that, if the taxpayer wishes to contribute to the Supplemental Low-Income Energy to the Autoimmune Disease Research Fund, as Assistance Fund as authorized by this amendatory authorized by this amendatory Act of the 95th Act of the 94th General Assembly, he or she may do General Assembly, then he or she may do so by so by stating the amount of the contribution (not less stating the amount of the contribution (not less than than $1) on the return and that the contribution will $1) on the return and indicating that the contribution reduce the taxpayer's refund or increase the amount will reduce the taxpayer's refund or increase the of the payment to accompany the return. Failure to amount of payment to accompany the return. The remit any amount of increased payment shall reduce taxpayer's failure to remit any amount of the the contribution accordingly. This Section shall not increased payment reduces the contribution apply to an amended return. accordingly. This Section does not apply to any (This Section was repealed by P.A. 99-933 amended return. on January 27, 2017.)
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Sec. 507RR. The Healthy Smiles Fund he or she may do so by stating the amount of the checkoff. contribution (not less than $1) on the return and indicating that the contribution will reduce the For taxable years ending on or after taxpayer's refund or increase the amount of payment December 31, 2008, the Department must print on to accompany the return. The taxpayer's failure to its standard individual income tax form a provision remit any amount of the increased payment reduces indicating that if the taxpayer wishes to contribute the contribution accordingly. This Section does not to the Healthy Smiles Fund, as authorized by this apply to any amended return. amendatory Act of the 95th General Assembly, he or she may do so by stating the amount of the (This Section was repealed by P.A. 99-576 contribution (not less than $1) on the return and that on July 15, 2016.) the contribution will reduce the taxpayer's refund or Sec. 507VV. Habitat for Humanity Fund increase the amount of payment to accompany the checkoff. return. Failure to remit any amount of increased payment shall reduce the contribution accordingly. For taxable years ending on or after This Section does not apply to any amended return. December 31, 2010, the Department shall print on its standard individual income tax form a provision (This Section was repealed by P.A. 99-933 indicating that if the taxpayer wishes to contribute on January 27, 2017.) to the Habitat for Humanity Fund as authorized by Sec. 507SS. The hunger relief checkoff. this amendatory Act of the 96th General Assembly, he or she may do so by stating the amount of the For taxable years ending on or after contribution (not less than $1) on the return and that December 31, 2009, the Department shall print, on the contribution will reduce the taxpayer's refund or its standard individual income tax form, a provision increase the amount of the payment to accompany indicating that, if the taxpayer wishes to contribute the return. Failure to remit any amount of increased to the Hunger Relief Fund, as authorized by Public payment shall reduce the contribution accordingly. Act 96-604, then he or she may do so by stating the This Section shall not apply to an amended return. amount of the contribution (not less than $1) on the return and indicating that the contribution will (This Section was repealed by P.A. 99-576 reduce the taxpayer's refund or increase the amount on July 15, 2016.) of payment to accompany the return. The taxpayer's Sec. 507WW. The State parks checkoff. failure to remit any amount of the increased payment reduces the contribution accordingly. This For taxable years ending on or after Section does not apply to any amended return. December 31, 2010, the Department shall print, on its standard individual income tax form, a provision Sec. 507TT. The crisis nursery checkoff. indicating that, if the taxpayer wishes to contribute For taxable years ending on or after to the State Parks Fund, as authorized by this December 31, 2009, the Department shall print, on amendatory Act of the 96th General Assembly, then its standard individual income tax form, a provision he or she may do so by stating the amount of the indicating that, if the taxpayer wishes to contribute contribution (not less than $1) on the return and to the Crisis Nursery Fund, as authorized by Public indicating that the contribution will reduce the Act 96-627, then he or she may do so by stating the taxpayer's refund or increase the amount of payment amount of the contribution (not less than $1) on the to accompany the return. The taxpayer's failure to return and indicating that the contribution will remit any amount of the increased payment reduces reduce the taxpayer's refund or increase the amount the contribution accordingly. This Section does not of payment to accompany the return. The taxpayer's apply to any amended return. failure to remit any amount of the increased (This Section was repealed by P.A. 99-933 payment reduces the contribution accordingly. This on January 27, 2017.) Section does not apply to any amended return. Sec. 507XX. The property tax relief Sec. 507UU. The Illinois Route 66 checkoff. checkoff for veterans with For taxable years ending on or after disabilities. December 31, 2010, the Department shall print, on For taxable years ending on or after its standard individual income tax form, a provision December 31, 2010, the Department shall print, on indicating that, if the taxpayer wishes to contribute its standard individual income tax form, a provision to the Illinois Route 66 Fund, as authorized by this indicating that, if the taxpayer wishes to contribute amendatory Act of the 96th General Assembly, then
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to the Property Tax Relief for Veterans with $1) on the return and indicating that the contribution Disabilities Fund, as authorized by this amendatory will reduce the taxpayer's refund or increase the Act of the 96th General Assembly, then he or she amount of payment to accompany the return. The may do so by stating the amount of the contribution taxpayer's failure to remit any amount of the (not less than $1) on the return and indicating that increased payment reduces the contribution the contribution will reduce the taxpayer's refund or accordingly. This Section does not apply to any increase the amount of payment to accompany the amended return. return. The taxpayer's failure to remit any amount of SB 3320 the increased payment reduces the contribution accordingly. This Section does not apply to any Sec. 507BBB. The Children's Wellness amended return. Charities Fund checkoff. Sec. 507YY. Crime Stoppers checkoff. For taxable years ending on or after December 31, 2012, the Department shall print, on For taxable years ending on or after its standard individual income tax form, a provision December 31, 2011, the Department shall print, on indicating that, if the taxpayer wishes to contribute its standard individual income tax form, a provision to the Children's Wellness Charities Fund, as indicating that, if the taxpayer wishes to contribute authorized by this amendatory Act of the 97th to the Illinois State Crime Stoppers Association General Assembly, then he or she may do so by Fund, as authorized by this amendatory Act of the stating the amount of the contribution (not less than 97th General Assembly, then he or she may do so by $1) on the return and indicating that the contribution stating the amount of the contribution (not less than will reduce the taxpayer's refund or increase the $1) on the return and indicating that the contribution amount of payment to accompany the return. The will reduce the taxpayer's refund or increase the taxpayer's failure to remit any amount of the amount of payment to accompany the return. The increased payment reduces the contribution taxpayer's failure to remit any amount of the accordingly. This Section does not apply to any increased payment reduces the contribution amended return. accordingly. This Section does not apply to any amended return. Sec. 507CCC. The Housing for Families Fund checkoff. Sec. 507ZZ. After-School Rescue Fund checkoff. For taxable years ending on or after December 31, 2012, the Department shall print, on For taxable years ending on or after its standard individual income tax form, a provision December 31, 2011, the Department must print on indicating that, if the taxpayer wishes to contribute its standard individual income tax form a provision to the Housing for Families Fund, as authorized by (i) indicating that if the taxpayer wishes to this amendatory Act of the 97th General Assembly, contribute to the After-School Rescue Fund, as then he or she may do so by stating the amount of authorized by this amendatory Act of the 97th the contribution (not less than $1) on the return and General Assembly, he or she may do so by stating indicating that the contribution will reduce the the amount of the contribution (not less than $1) on taxpayer's refund or increase the amount of payment the return and (ii) stating that the contribution will to accompany the return. The taxpayer's failure to reduce the taxpayer's refund or increase the amount remit any amount of the increased payment reduces of payment to accompany the return. Failure to remit the contribution accordingly. This Section does not any amount of increased payment shall reduce the apply to any amended return. contribution accordingly. This Section does not apply to any amended return. Sec. 507DDD. Special Olympics Illinois and Special Children's Checkoff. Sec. 507AAA. The Childhood Cancer Research Fund checkoff. For taxable years beginning on or after January 1, 2015, the Department shall print on its For taxable years ending on or after standard individual income tax form a provision December 31, 2012, the Department shall print, on indicating that if the taxpayer wishes to contribute its standard individual income tax form, a provision to the Special Olympics Illinois and Special indicating that, if the taxpayer wishes to contribute Children's Charities Checkoff Fund as authorized by to the Childhood Cancer Research Fund, as Public Act 99-423, he or she may do so by stating authorized by this amendatory Act of the 97th the amount of the contribution (not less than $1) on General Assembly, then he or she may do so by the return and that the contribution will reduce the stating the amount of the contribution (not less than
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taxpayer's refund or increase the amount of payment reduce the taxpayer's refund or increase the amount to accompany the return. Failure to remit any of payment to accompany the return. Failure to remit amount of increased payment shall reduce the any amount of increased payment shall reduce the contribution accordingly. This Section shall not contribution accordingly. Notwithstanding any apply to an amended return. For the purpose of this other provision of law, moneys deposited into the Section, the Department of Revenue must distribute Autism Care Fund from contributions under this the moneys as provided in subsection 21.9(b) of the Section shall be used by the Department of Human Illinois Lottery Law: (i) 75% of the moneys to Services to make grants to the Autism Society of Special Olympics Illinois to support the statewide Illinois. This Section does not apply to any amended training, competitions, and programs for future return. Special Olympics athletes; and (ii) 25% of the Sec. 507GGG. Thriving Youth checkoff. moneys to Special Children's Charities to support the City of Chicago-wide training, competitions, For taxable years ending on or after and programs for future Special Olympics athletes. December 31, 2017, the Department must print on its standard individual income tax form a provision Sec. 507EEE. U.S.S. Illinois Commissioning (i) indicating that if the taxpayer wishes to Fund checkoff. contribute to the Thriving Youth Income Tax For taxable years ending on or after Checkoff Fund, as authorized by this amendatory December 31, 2014 and ending on or before Act of the 100th General Assembly, he or she may December 31, 2016, the Department must print on do so by stating the amount of the contribution (not its standard individual income tax form a provision less than $1) on the return and (ii) stating that the (i) indicating that if the taxpayer wishes to contribution will reduce the taxpayer's refund or contribute to the U.S.S. Illinois Commissioning increase the amount of payment to accompany the Fund, a special fund created in the State treasury, for return. Failure to remit any amount of increased the purpose of donating to the U.S.S. Illinois payment shall reduce the contribution accordingly. Commissioning Committee, as authorized by this This Section does not apply to any amended return. amendatory Act of the 99th General Assembly, he Sec. 507HHH. Illinois Police Memorial or she may do so by stating the amount of the checkoff. contribution (not less than $1) on the return and (ii) stating that the contribution will reduce the (a) For taxable years ending on or after taxpayer's refund or increase the amount of payment December 31, 2017, the Department must print on to accompany the return. Failure to remit any its standard individual income tax form a provision amount of increased payment shall reduce the (i) indicating that if the taxpayer wishes to contribution accordingly. Notwithstanding any contribute to the Criminal Justice Information other provision of law, moneys deposited into the Projects Fund, as authorized by this amendatory Act U.S.S. Illinois Commissioning Fund from of the 100th General Assembly, he or she may do so contributions under this Section shall be used by the by stating the amount of the contribution (not less Department of Military Affairs to make grants to the than $1) on the return and (ii) stating that the U.S.S. Illinois Commissioning Committee. This contribution will reduce the taxpayer's refund or Section does not apply to any amended return. increase the amount of payment to accompany the return. Failure to remit any amount of increased This Section is repealed on December 31, payment shall reduce the contribution accordingly. 2017. This Section does not apply to any amended return. Sec. 507FFF. Autism Care Fund checkoff. (b) Moneys deposited into the Criminal For taxable years ending on or after Justice Information Projects Fund under this Section December 31, 2015, the Department must print on shall be distributed equally, as soon as practical but its standard individual income tax form a provision at least on a monthly basis, to the Chicago Police (i) indicating that if the taxpayer wishes to Memorial Foundation Fund, the Police Memorial contribute to the Autism Care Fund, a special fund Committee Fund, and the Illinois State Police created in the State treasury, for the purpose of Memorial Park Fund. Moneys transferred to the donating to the Autism Society of Illinois, as funds shall be used, subject to appropriation, to fund authorized by this amendatory Act of the 99th grants for building and maintaining memorials and General Assembly, he or she may do so by stating parks; holding annual memorial commemorations; the amount of the contribution (not less than $1) on giving scholarships to children of officers killed or the return and (ii) stating that the contribution will catastrophically injured in the line of duty, or those
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interested in pursuing a career in law enforcement; Sec. 509.1. Removal of excess tax checkoff and providing financial assistance to police officers funds. and their families when a police officer is killed or Notwithstanding any provisions of this Act injured in the line of duty. to the contrary, beginning on the effective date of Sec. 508. Transfer Of Checkoff Funds. this amendatory Act of the 95th General Assembly, there may not be more than 15 tax-checkoff funds The Department shall determine on contained on the individual tax return form at any October 1 of each year the total amount contributed one time. Each year, the Department shall determine to the Child Abuse Prevention Fund pursuant to this whether the sum of (i) the number of new tax- Act and shall notify the State Comptroller and the checkoff funds created by the General Assembly State Treasurer of such amount to be transferred to during that year plus (ii) the number of tax-checkoff the Child Abuse Prevention Fund, and upon receipt funds that collected at least $100,000 during the of such notification the State Treasurer and previous year exceeds 15. If so, then the Department Comptroller shall transfer such amount. (Source: shall remove a number of tax-checkoff funds that P.A. 85-731.) were on the return during the previous year that is Sec. 509. Tax checkoff explanations. equal to the sum of items (i) and (ii) minus 15, starting with the tax-checkoff fund that received the (a) All individual income tax return forms least amount of contributions and working upward shall contain appropriate explanations and spaces to until a sufficient number of funds have been enable the taxpayers to designate contributions to removed. The Hunger Relief Fund checkoff the funds to which contributions may be made under established under Section 507SS shall be included this Article 5. among the 15 tax-checkoff funds as provided in (b) Each form shall contain a statement that subsection (d) of Section 509 of this Act. the contributions will reduce the taxpayer's refund For taxable years ending on or after or increase the amount of payment to accompany the December 31, 2012, the Diabetes Research return. Failure to remit any amount of increased Checkoff Fund checkoff contained in Section payment shall reduce the contribution accordingly. 507GG of this Act shall be included on the (c) If, on October 1 of any year, the total individual tax return form notwithstanding the contributions to any one of the funds made under provisions of this Section. The Diabetes Research this Article 5 do not equal $100,000 or more, the Checkoff Fund checkoff shall not be included when explanations and spaces for designating calculating the 15 tax-checkoff fund limitation set contributions to the fund shall be removed from the forth in this Section. individual income tax return forms for the following Sec. 510. Determination of amounts and all subsequent years and all subsequent contributed. contributions to the fund shall be refunded to the taxpayer. This contribution requirement does not The Department shall determine the total apply to the Diabetes Research Checkoff Fund amount contributed to each of the funds under this checkoff contained in Section 507GG of this Act. Article 5 and shall notify the State Comptroller and the State Treasurer of the amounts to be transferred (d) Notwithstanding any other provision of from the General Revenue Fund to each fund, and law, the Department shall include the Hunger Relief upon receipt of such notification the State Treasurer Fund checkoff established under Section 507SS on and Comptroller shall transfer the amounts. the individual income tax form for the taxable year beginning on January 1, 2012. If, on October 1, Sec. 511. Refunds. 2013, or on October 1 of any subsequent year, the Unless the Department is contesting an total contributions to the Hunger Relief Fund individual income tax refund due to any taxpayer, checkoff do not equal $100,000 or more, the the Department shall provide the Comptroller with explanations and spaces for designating authorization for such refund to the taxpayer within contributions to the fund shall be removed from the 120 days of the date on which the return is received individual income tax return forms for the following by the Department, as long as there are available and all subsequent years and all subsequent funds from which to pay such refunds. (Source: P.A. contributions to the fund shall be refunded to the 84-1079.) taxpayer.
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Sec. 512. School District Information. taxpayer's federal income tax liability. For purposes of the Illinois Administrative Procedure Act, the (a) All individual income tax return forms adoption of rules to prescribe a later due date for for tax years ending December 31, 1986 through payment shall be deemed an emergency and December 30, 1995 shall contain an appropriate necessary for the public interest, safety, and welfare. space in which the taxpayer must indicate either (i) the name and number of the high school district in (b) Amount payable. In making payment as which they reside on the date such return is filed, or provided in this section there shall remain payable (ii) the name and number of the unit school district only the balance of such tax remaining due after in which they reside on the date such return is filed. giving effect to the following: Failure of the taxpayer to insert such information (1) Withheld tax. Any amount withheld shall not invalidate the return. during any calendar year pursuant to Article 7 from (b) For all tax years ending December 31, compensation paid to a taxpayer shall be deemed to 1995 and thereafter, the Department shall provide have been paid on account of any tax imposed by the State Board of Education with information on subsections 201(a) and (b) of this Act on such individual income tax receipts by school district taxpayer for his taxable year beginning in such from the data collected by the Geographic calendar year. If more than one taxable year begins Information System maintained by the Department. in a calendar year, such amount shall be deemed to (Source: P.A. 89-21, eff. 7-1-95.) have been paid on account of such tax for the last taxable year so beginning. Sec. 516. Assistance To The Homeless Fund. (2) Estimated and tentative tax payments. Any amount of estimated tax paid by a taxpayer The Department shall print on its standard pursuant to Article 8 for a taxable year shall be individual income tax form a provision indicating deemed to have been paid on account of the tax that if the taxpayer wishes to contribute to the imposed by this Act for such taxable year. Assistance to the Homeless Fund created by this amendatory Act of 1989, he or she may do so by (3) Foreign tax. The aggregate amount of stating the amount of such contribution (not less tax which is imposed upon or measured by income than $1) on such return and that such contributions and which is paid by a resident for a taxable year to will reduce the taxpayer's refund or increase the another state or states on income which is also amount of payment to accompany the return. Failure subject to the tax imposed by subsections 201(a) and to remit any amount of increased payment shall (b) of this Act shall be credited against the tax reduce the contribution accordingly. This Section imposed by subsections 201(a) and (b) otherwise shall not apply to an amended return. (Source: P.A. due under this Act for such taxable year. For taxable 86-960.) years ending prior to December 31, 2009, the aggregate credit provided under this paragraph shall ARTICLE 6. PAYMENTS. not exceed that amount which bears the same ratio Sec. 601. Payment on Due Date of to the tax imposed by subsections 201(a) and (b) Return. otherwise due under this Act as the amount of the taxpayer's base income subject to tax both by such (a) In general. Every taxpayer required to other state or states and by this State bears to his file a return under this Act shall, without total base income subject to tax by this State for the assessment, notice or demand, pay any tax due taxable year. For taxable years ending on or after thereon to the Department, at the place fixed for December 31, 2009, the credit provided under this filing, on or before the date fixed for filing such paragraph for tax paid to other states shall not return (determined without regard to any extension exceed that amount which bears the same ratio to the of time for filing the return) pursuant to regulations tax imposed by subsections 201(a) and (b) otherwise prescribed by the Department. If, however, the due due under this Act as the amount of the taxpayer's date for payment of a taxpayer's federal income tax base income that would be allocated or apportioned liability for a tax year (as provided in the Internal to other states if all other states had adopted the Revenue Code or by Treasury regulation, or as provisions in Article 3 of this Act bears to the extended by the Internal Revenue Service) is later taxpayer's total base income subject to tax by this than the date fixed for filing the taxpayer's Illinois State for the taxable year. The credit provided by income tax return for that tax year, the Department this paragraph shall not be allowed if any creditable may, by rule, prescribe a due date for payment that tax was deducted in determining base income for the is not later than the due date for payment of the taxable year. Any person claiming such credit shall
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attach a statement in support thereof and shall notify quarterly estimated tax payment obligation of the Director of any refund or reductions in the $150,000 or more under Article 8 of this Act shall amount of tax claimed as a credit hereunder all in make all payments required by rules of the such manner and at such time as the Department Department by electronic funds transfer. Beginning shall by regulations prescribe. on October 1, 2000, and for all liability periods thereafter, a taxpayer who has an average annual tax (4) Accumulation and capital gain liability of $200,000 or more under Article 7 of this distributions. If the net income of a taxpayer Act shall make all payments required by rules of the includes amounts included in his base income by Department by electronic funds transfer. Beginning reason of Section 667 of the Internal Revenue Code October 1, 2000, a taxpayer who has an average (relating to accumulation and capital gain quarterly estimated tax payment obligation of distributions by a trust, respectively), the tax $50,000 or more under Article 8 of this Act shall imposed on such taxpayer by this Act shall be make all payments required by rules of the credited with his pro rata portion of the taxes Department by electronic funds transfer. Beginning imposed by this Act on such trust for preceding on October 1, 2002, a taxpayer who has a tax taxable years which would not have been payable liability in the amount set forth in subsection (b) of for such preceding years if the trust had in fact made Section 2505-210 of the Department of Revenue distributions to its beneficiaries at the times and in Law shall make all payments required by rules of the amounts specified in Sections 666 and 669 of the the Department by electronic funds transfer. Internal Revenue Code. The credit provided by this Beginning on October 1, 2002, a taxpayer who has paragraph shall not reduce the tax otherwise due a tax liability in the amount set forth in subsection from the taxpayer to an amount less than that which (b) of Section 2505-210 of the Department of would be due if the amounts included by reason of Revenue Law shall make all payments required by Section 667 of the Internal Revenue Code were rules of the Department by electronic funds transfer. excluded from his or her base income. (b) Any taxpayer who is not required to (c) Cross reference. For application against make payments by electronic funds transfer may tax due of overpayments of tax for a prior year, see make payments by electronic funds transfer with the Section 909. (Source: P.A. 94-247, eff. 1-1-06.) permission of the Department. Sec. 601.1. Payment by electronic funds (c) All taxpayers required to make transfer. payments by electronic funds transfer and any (a) Beginning on October 1, 1993, a taxpayers who wish to voluntarily make payments taxpayer who has an average monthly tax liability of by electronic funds transfer shall make those $150,000 or more under Article 7 of this Act shall payments in the manner authorized by the make all payments required by rules of the Department. Department by electronic funds transfer. Beginning (d) The Department shall notify all October 1, 1993, a taxpayer who has an average taxpayers required to make payments by electronic quarterly estimated tax payment obligation of funds transfer. All taxpayers notified by the $450,000 or more under Article 8 of this Act shall Department shall make payments by electronic make all payments required by rules of the funds transfer for a minimum of one year beginning Department by electronic funds transfer. Beginning on October 1. In determining the threshold amounts on October 1, 1994, a taxpayer who has an average under subsection (a), the Department shall calculate monthly tax liability of $100,000 or more under the averages as follows: Article 7 of this Act shall make all payments required by rules of the Department by electronic (1) the total liability under Article 7 for the funds transfer. Beginning October 1, 1994, a preceding tax year (and, prior to October 1, 2000, taxpayer who has an average quarterly estimated tax divided by 12); or payment obligation of $300,000 or more under (2) for purposes of estimated payments Article 8 of this Act shall make all payments under Article 8, the total tax obligation of the required by rules of the Department by electronic taxpayer for the previous tax year divided by 4. funds transfer. Beginning on October 1, 1995, a taxpayer who has an average monthly tax liability of (e) The Department shall adopt such rules $50,000 or more under Article 7 of this Act shall as are necessary to effectuate a program of make all payments required by rules of the electronic funds transfer and the requirements of this Department by electronic funds transfer. Beginning Section. (Source: P.A. 91-541, eff. 8-13-99; 92-492, October 1, 1995, a taxpayer who has an average eff. 1-1-02.)
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Sec. 602. Tentative Payments. ARTICLE 7. WITHHOLDING TAX. (a) In general. Pursuant to Section 505, the Sec. 701. Requirement and Amount of Department may promulgate regulations to provide Withholding. automatic extensions of the time for filing a return. (a) In General. Every employer In connection with any other extension provided maintaining an office or transacting business within under Section 505 of the time for filing a return, the this State and required under the provisions of the taxpayer shall file a tentative tax return and pay, on Internal Revenue Code to withhold a tax on: or before the date prescribed by law for the filing of such return (determined without regard to any (1) compensation paid in this State (as extensions of time for such filing), the amount determined under Section 304 (a)(2)(B) to an properly estimated as his tax for the taxable year. individual; or (b) Interest and Penalty. Interest and (2) payments described in subsection (b) penalty on any amount of tax due and unpaid for the shall deduct and withhold from such compensation period of any extension shall be payable as provided for each payroll period (as defined in Section 3401 by the Uniform Penalty and Interest Act. However, of the Internal Revenue Code) an amount equal to if the taxpayer is a member, or, in the case of a joint the amount by which such individual's return, the spouse of a member, of the United States compensation exceeds the proportionate part of this Armed Forces serving in a combat zone and subject withholding exemption (computed as provided in to a filing extension in accordance with a Section 702) attributable to the payroll period for proclamation by the President of the United States which such compensation is payable multiplied by a pursuant to Section 7508 of the Internal Revenue percentage equal to the percentage tax rate for Code, no interest or penalty shall be applicable for individuals provided in subsection (b) of Section the taxable year ending on and after December 31, 201. 1990. (Source: P.A. 87-205; 87-339; 87-895.) (b) Payment to Residents. Sec. 603. Credit Of Overpayments For Taxpayers That Are Members Any payment (including compensation, Of A Unitary Business Group. but not including a payment from which withholding is required under Section 710 of this (Repealed). (Source: Repealed by P.A. 88- Act) to a resident by a payor maintaining an office 195.) or transacting business within this State (including any agency, officer, or employee of this State or of Sec. 604. Payments Not Payable To any political subdivision of this State) and on which Department. withholding of tax is required under the provisions Any payment to the Department which is of the Internal Revenue Code shall be deemed to be made by a check or money order not payable to the compensation paid in this State by an employer to Department shall, within 15 days after receipt an employee for the purposes of Article 7 and thereof, be returned by the Department to the Section 601 (b)(1) to the extent such payment is taxpayer who submitted such check or money order included in the recipient's base income and not or, if the amount of payment is equal to the amount subjected to withholding by another state. owed to the State of Illinois, the Department may Notwithstanding any other provision to the contrary, deposit such check. (Source: P.A. 86-977.) no amount shall be withheld from unemployment insurance benefit payments made to an individual Sec. 605. Payments By Credit Card. pursuant to the Unemployment Insurance Act unless The Department may adopt rules and the individual has voluntarily elected the regulations for payment of taxes due under this Act withholding pursuant to rules promulgated by the by credit card only when the Department is not Director of Employment Security. required to pay a discount fee charged by the credit (c) Special Definitions. card issuer. (Source: P.A. 87-1175; 87-1189.) Withholding shall be considered required Sec. 606. EDGE payment. under the provisions of the Internal Revenue Code A payment includes a payment provided to the extent the Internal Revenue Code either for in subsection (g) of Section 5-15 of the requires withholding or allows for voluntary Economic Development for a Growing Economy withholding the payor and recipient have entered Tax Credit Act. into such a voluntary withholding agreement. For the purposes of Article 7 and Section 1002 (c) the
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term "employer" includes any payor who is required duplicate to each such employee in respect of the to withhold tax pursuant to this Section. compensation paid by such employer to such employee during the calendar year on or before (d) Reciprocal Exemption. January 31 of the succeeding year, or, if his The Director may enter into an agreement employment is terminated before the close of such with the taxing authorities of any state which calendar year, on the date on which the last payment imposes a tax on or measured by income to provide of compensation is made, a written statement in such that compensation paid in such state to residents of form as the Department may by regulation prescribe this State shall be exempt from withholding of such showing the amount of compensation paid by the tax; in such case, any compensation paid in this employer to the employee, the amount deducted and State to residents of such state shall be exempt from withheld as tax, and such other information as the withholding. All reciprocal agreements shall be Department shall prescribe. A copy of such subject to the requirements of Section 2505-575 of statement shall be filed by the employee with his the Department of Revenue Law (20 ILCS return for his taxable year to which it relates (as 2505/2505-575). determined under section 601(b) (1). (Source: P.A. 90-613, eff. 7-9-98.) (e) Notwithstanding subsection (a)(2) of this Section, no withholding is required on payments Sec. 704. Employer's Return and for which withholding is required under Section Payment of Tax Withheld. 3405 or 3406 of the Internal Revenue Code. (a) In general, every employer who deducts (Source: P.A. 90-491, eff. 1-1-98; 91-239, and withholds or is required to deduct and withhold eff. 1-1-00.) tax under this Act prior to January 1, 2008, shall make such payments and returns as provided in this Sec. 702. Amount Exempt From Section. Withholding. (b) Quarter Monthly Payments: Returns. For purposes of this Section an employee Every employer who deducts and withholds or is shall be entitled to a withholding exemption in an required to deduct and withhold tax under this Act amount equal to the basic amount in Section 204(b) shall, on or before the third banking day following for each personal or dependent exemption which he the close of a quarter monthly period, pay to the is entitled to claim on his federal return pursuant to Department or to a depositary designated by the Section 151 of the Internal Revenue Code; plus an Department, pursuant to regulations prescribed by allowance equal to $1,000 for each $1,000 he is the Department, the taxes so required to be deducted entitled to deduct from gross income in arriving at and withheld, whenever the aggregate amount adjusted gross income pursuant to Section 62 of the withheld by such employer (together with amounts Internal Revenue Code; plus an additional previously withheld and not paid to the Department) allowance equal to $1,000 for each $1,000 eligible exceeds $1,000. For purposes of this Section, for subtraction on his Illinois income tax return as Saturdays, Sundays, legal holidays and local bank Illinois real estate taxes paid during the taxable year; holidays are not banking days. A quarter monthly or in any lesser amount claimed by him. Every period, for purposes of this subsection, ends on the employee shall furnish to his employer such 7th, 15th, 22nd and last day of each calendar month. information as is required for the employer to make Every such employer shall for each calendar quarter, an accurate withholding under this Act. The on or before the last day of the first month following employer may rely on this information for the close of such quarter, and for the calendar year, withholding purposes. If any employee fails or on or before January 31 of the succeeding calendar refuses to furnish such information, the employer year, make a return with respect to such taxes in shall withhold the full rate of tax from the such form and manner as the Department may by employee's total compensation. (Source: P.A. 85- regulations prescribe, and pay to the Department or 731; 90-613, eff. 7-9-98.) to a depositary designated by the Department all Sec. 703. Information Statement. withheld taxes not previously paid to the Department. Every employer required to deduct and withhold tax under this Act from compensation of (c) Monthly Payments: Returns. Every an employee, or who would have been required so employer required to deduct and withhold tax under to deduct and withhold tax if the employee's this Act shall, on or before the 15th day of the withholding exemption were not in excess of the second and third months of each calendar quarter, basic amount in Section 204(b), shall furnish in and on or before the last day of the month following
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the last month of each such quarter, pay to the Sec. 704A. Employer's return and Department or to a depositary designated by the payment of tax withheld. Department, pursuant to regulations prescribed by (a) In general, every employer who deducts the Department, the taxes so required to be deducted and withholds or is required to deduct and withhold and withheld, whenever the aggregate amount tax under this Act on or after January 1, 2008 shall withheld by such employer (together with amounts make those payments and returns as provided in this previously withheld and not paid to the Department) Section. exceeds $500 but does not exceed $1,000. Every such employer shall for each calendar quarter, on or (b) Returns. Every employer shall, in the before the last day of the first month following the form and manner required by the Department, make close of such quarter, and for the calendar year, on returns with respect to taxes withheld or required to or before January 31 of the succeeding calendar be withheld under this Article 7 for each quarter year, make a return with respect to such taxes in beginning on or after January 1, 2008, on or before such form and manner as the Department may by the last day of the first month following the close of regulations prescribe, and pay to the Department or that quarter. to a depositary designated by the Department all (c) Payments. With respect to amounts withheld taxes not previously paid to the withheld or required to be withheld on or after Department. January 1, 2008: (d) Annual Payments: Returns. Where the (1) Semi-weekly payments. For each amount of compensation paid by an employer is not sufficient to require the withholding of tax from the calendar year, each employer who withheld or was compensation of any of its employees (or where the required to withhold more than $12,000 during the one-year period ending on June 30 of the aggregate amount withheld is less than $500), the immediately preceding calendar year, payment must Department may by regulation permit such be made: employer to file only an annual return and to pay the taxes required to be deducted and withheld at the (A) on or before each Friday of the time of filing such annual return. calendar year, for taxes withheld or required to be withheld on the immediately preceding Saturday, (e) Annual Return. The Department may, Sunday, Monday, or Tuesday; as it deems appropriate, prescribe by regulation for the filing of annual returns in lieu of quarterly (B) on or before each Wednesday of the returns described in subsections (b) and (c). calendar year, for taxes withheld or required to be (e-5) Annual Return and Payment. On and withheld on the immediately preceding Wednesday, after January 1, 1998, notwithstanding subsections Thursday, or Friday. (b) through (d) of this Section, every employer who Beginning with calendar year 2011, deducts and withholds or is required to deduct and payments made under this paragraph (1) of withhold tax from a person engaged in domestic subsection (c) must be made by electronic funds service employment, as that term is defined in transfer. Section 3510 of the Internal Revenue Code, may comply with the requirements of this Section by (2) Semi-weekly payments. Any employer filing an annual return and paying the taxes required who withholds or is required to withhold more than to be deducted and withheld on or before the 15th $12,000 in any quarter of a calendar year is required day of the fourth month following the close of the to make payments on the dates set forth under item employer's taxable year. The annual return may be (1) of this subsection (c) for each remaining quarter submitted with the employer's individual income tax of that calendar year and for the subsequent calendar return. year. (f) Magnetic Media Filing. Forms W-2 (3) Monthly payments. Each employer, that, pursuant to the Internal Revenue Code and other than an employer described in items (1) or (2) regulations promulgated thereunder, are required to of this subsection, shall pay to the Department, on be submitted to the Internal Revenue Service on or before the 15th day of each month the taxes magnetic media, must also be submitted to the withheld or required to be withheld during the Department on magnetic media for Illinois immediately preceding month. purposes, if required by the Department. (Source: (4) Payments with returns. Each employer P.A. 90-374, eff. 8-14-97; 90-562, eff. 12-16-97.) shall pay to the Department, on or before the due date for each return required to be filed under this
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Section, any tax withheld or required to be withheld electronically must also be submitted to the during the period for which the return is due and not Department on magnetic media or electronically for previously paid to the Department. Illinois purposes, if required by the Department. (d) Regulatory authority. The Department With respect to taxes withheld in 2017 and may, by rule: subsequent calendar years, the Department may, by rule, require that any return (including any amended (1) Permit employers, in lieu of the return) under this Section and any W-2 Form that is requirements of subsections (b) and (c), to file required to be submitted to the Department must be annual returns due on or before January 31 of the submitted on magnetic media or electronically. year for taxes withheld or required to be withheld during the previous calendar year and, if the The due date for submitting W-2 Forms aggregate amounts required to be withheld by the shall be as prescribed by the Department by rule. employer under this Article 7 (other than amounts (g) For amounts deducted or withheld after required to be withheld under Section 709.5) do not December 31, 2009, a taxpayer who makes an exceed $1,000 for the previous calendar year, to pay election under subsection (f) of Section 5-15 of the the taxes required to be shown on each such return Economic Development for a Growing Economy no later than the due date for such return. Tax Credit Act for a taxable year shall be allowed a (2) Provide that any payment required to be credit against payments due under this Section for made under subsection (c)(1) or (c)(2) is deemed to amounts withheld during the first calendar year be timely to the extent paid by electronic funds beginning after the end of that taxable year equal to transfer on or before the due date for deposit of the amount of the credit for the incremental income federal income taxes withheld from, or federal tax attributable to full-time employees of the employment taxes due with respect to, the wages taxpayer awarded to the taxpayer by the Department from which the Illinois taxes were withheld. of Commerce and Economic Opportunity under the Economic Development for a Growing Economy (3) Designate one or more depositories to Tax Credit Act for the taxable year and credits not which payment of taxes required to be withheld previously claimed and allowed to be carried under this Article 7 must be paid by some or all forward under Section 211(4) of this Act as employers. provided in subsection (f) of Section 5-15 of the (4) Increase the threshold dollar amounts at Economic Development for a Growing Economy which employers are required to make semi-weekly Tax Credit Act. The credit or credits may not reduce payments under subsection (c)(1) or (c)(2). the taxpayer's obligation for any payment due under this Section to less than zero. If the amount of the (e) Annual return and payment. Every credit or credits exceeds the total payments due employer who deducts and withholds or is required under this Section with respect to amounts withheld to deduct and withhold tax from a person engaged during the calendar year, the excess may be carried in domestic service employment, as that term is forward and applied against the taxpayer's liability defined in Section 3510 of the Internal Revenue under this Section in the succeeding calendar years Code, may comply with the requirements of this as allowed to be carried forward under paragraph (4) Section with respect to such employees by filing an of Section 211 of this Act. The credit or credits shall annual return and paying the taxes required to be be applied to the earliest year for which there is a tax deducted and withheld on or before the 15th day of liability. If there are credits from more than one the fourth month following the close of the taxable year that are available to offset a liability, employer's taxable year. The Department may allow the earlier credit shall be applied first. Each the employer's return to be submitted with the employer who deducts and withholds or is required employer's individual income tax return or to be to deduct and withhold tax under this Act and who submitted with a return due from the employer retains income tax withholdings under subsection (f) under Section 1400.2 of the Unemployment of Section 5-15 of the Economic Development for a Insurance Act. Growing Economy Tax Credit Act must make a (f) Magnetic media and electronic filing. return with respect to such taxes and retained amounts in the form and manner that the With respect to taxes withheld in calendar Department, by rule, requires and pay to the years prior to 2017, any W-2 Form that, under the Department or to a depositary designated by the Internal Revenue Code and regulations promulgated Department those withheld taxes not retained by the thereunder, is required to be submitted to the taxpayer. For purposes of this subsection (g), the Internal Revenue Service on magnetic media or
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term taxpayer shall include taxpayer and members employer, but the employer shall not be relieved of the taxpayer's unitary business group as defined from liability for penalties or interest otherwise under paragraph (27) of subsection (a) of Section applicable in respect of such failure to deduct and 1501 of this Act. This Section is exempt from the withhold. (Source: P.A. 76-261.) provisions of Section 250 of this Act. No credit Sec. 707. Governmental Employers. awarded under the Economic Development for a Growing Economy Tax Credit Act for agreements If the employer is the United States, or a entered into on or after January 1, 2015 may be state, Territory, or political subdivision thereof, or credited against payments due under this Section. the District of Columbia, or any agency or instrumentality of any one or more of the foregoing, (h) An employer may claim a credit against the return of the amount deducted and withheld payments due under this Section for amounts upon any compensation may be made by any officer withheld during the first calendar year ending after or employee of the United States, or of such state, date on which a tax credit certificate was issued Territory, or political subdivision, or of the District under Section 35 of the Small Business Job Creation of Columbia, or of such agency or instrumentality, Tax Credit Act. The credit shall be equal to the as the case may be, having control of the payment of amount shown on the certificate, but may not reduce such compensation, or appropriately designated for the taxpayer's obligation for any payment due under that purpose. (Source: P.A. 76-261.) this Section to less than zero. If the amount of the credit exceeds the total payments due under this Sec. 709.5. Withholding by partnerships, Section with respect to amounts withheld during the Subchapter S corporations, calendar year, the excess may be carried forward and trusts. and applied against the taxpayer's liability under this (a) In general. For each taxable year ending Section in the 5 succeeding calendar years. The on or after December 31, 2008, every partnership credit shall be applied to the earliest year for which (other than a publicly traded partnership under there is a tax liability. If there are credits from more than one calendar year that are available to offset a Section 7704 of the Internal Revenue Code or liability, the earlier credit shall be applied first. This investment partnership), Subchapter S corporation, and trust must withhold from each nonresident Section is exempt from the provisions of Section partner, shareholder, or beneficiary (other than a 250 of this Act. partner, shareholder, or beneficiary who is exempt Sec. 705. Employer's Liability For from tax under Section 501(a) of the Internal Withheld Taxes. Revenue Code or under Section 205 of this Act, who is included on a composite return filed by the Every employer who deducts and partnership or Subchapter S corporation for the withholds or is required to deduct and withhold tax taxable year under subsection (f) of Section 502 of under this Act is liable for such tax. For purposes of this Act), or who is a retired partner, to the extent assessment and collection, any amount withheld or that partner's distributions are exempt from tax required to be withheld and paid over to the under Section 203(a)(2)(F) of this Act) an amount Department, and any penalties and interest with equal to the sum of (i) the share of business income respect thereto, shall be considered the tax of the of the partnership, Subchapter S corporation, or trust employer. Any amount of tax actually deducted and apportionable to Illinois plus (ii) for taxable years withheld under this Act shall be held to be a special ending on or after December 31, 2014, the share of fund in trust for the Department. No employee shall nonbusiness income of the partnership, Subchapter have any right of action against his employer in S corporation, or trust allocated to Illinois under respect of any money deducted and withheld from Section 303 of this Act (other than an amount his wages and paid over to the Department in allocated to the commercial domicile of the taxpayer compliance or in intended compliance with this Act. under Section 303 of this Act) that is distributable to (Source: P.A. 82-1009.) that partner, shareholder, or beneficiary under Sec. 706. Employer's Failure To Sections 702 and 704 and Subchapter S of the Withhold. Internal Revenue Code, whether or not distributed, (iii) multiplied by the applicable rates of tax for that If an employer fails to deduct and withhold partner, shareholder, or beneficiary under any amount of tax as required under this Act, and subsections (a) through (d) of Section 201 of this thereafter the tax on account of which such amount Act, and (iv) net of the share of any credit under was required to be deducted and withheld is paid, Article 2 of this Act that is distributable by the such amount of tax shall not be collected from the partnership, Subchapter S corporation, or trust and
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allowable against the tax liability of that partner, or by mail to the last known address of the shareholder, or beneficiary for a taxable year ending partnership, S corporation, or trust. on or after December 31, 2014. (3) A partnership, S corporation, or trust (b) Credit for taxes withheld. Any amount that receives a certificate under this subsection (c) withheld under subsection (a) of this Section and properly completed by a nonresident partner, paid to the Department shall be treated as a payment shareholder, or beneficiary shall not be required to of the estimated tax liability or of the liability for withhold any amount from that partner, shareholder, withholding under this Section of the partner, or beneficiary, the payment of which would be due shareholder, or beneficiary to whom the income is under Section 711(a-5) of this Act after the receipt distributable for the taxable year in which that of the certificate and no earlier than 60 days after the person incurred a liability under this Act with Department has notified the partnership, S respect to that income. The Department shall adopt corporation, or trust that the certificate has been rules pursuant to which a partner, shareholder, or revoked. beneficiary may claim a credit against its obligation (4) Certificates received by a partnership, for withholding under this Section for amounts S corporation, or trust under this subsection (c) must withheld under this Section with respect to income be retained by the partnership, S corporation, or trust distributable to it by a partnership, Subchapter S and a record of such certificates must be provided to corporation, or trust and allowing its partners, the Department, in a format in which the record is shareholders, or beneficiaries to claim a credit under available for review by the Department, upon this subsection (b) for those withheld amounts. request by the Department. The Department may, by (c) Exemption from withholding. rule, require the record of certificates to be maintained and provided to the Department (1) A partnership, Subchapter S electronically. (Source: P.A. 95-233, eff. 8-16-07.) corporation, or trust shall not be required to withhold tax under subsection (a) of this Section Sec. 710. Withholding From Lottery with respect to any nonresident partner, shareholder, Winnings. or beneficiary (other than an individual) from whom (a) In General. the partnership, S corporation, or trust has received a certificate, completed in the form and manner (1) Any person making a payment to a prescribed by the Department, stating that such resident or nonresident of winnings under the nonresident partner, shareholder, or beneficiary Illinois Lottery Law and not required to withhold shall: Illinois income tax from such payment under Subsection (b) of Section 701 of this Act because (A) file all returns that the partner, those winnings are not subject to Federal income tax shareholder, or beneficiary is required to file under withholding, must withhold Illinois income tax from Section 502 of this Act and make timely payment of such payment at a rate equal to the percentage tax all taxes imposed under Section 201 of this Act or rate for individuals provided in subsection (b) of under this Section on the partner, shareholder, or Section 201, provided that withholding is not beneficiary with respect to income of the required if such payment of winnings is less than partnership, S corporation, or trust; and $1,000. (B) be subject to personal jurisdiction in (2) In the case of an assignment of a lottery this State for purposes of the collection of income prize under Section 13.1 of the Illinois Lottery Law, taxes, together with related interest and penalties, any person making a payment of the purchase price imposed on the partner, shareholder, or beneficiary after December 31, 2013, shall withhold from the with respect to the income of the partnership, S amount of each payment at a rate equal to the corporation, or trust. percentage tax rate for individuals provided in (2) The Department may revoke the subsection (b) of Section 201. exemption provided by this subsection (c) at any (b) Credit for taxes withheld. Any amount time that it determines that the nonresident partner, withheld under Subsection (a) shall be a credit shareholder, or beneficiary is not abiding by the against the Illinois income tax liability of the person terms of the certificate. The Department shall notify to whom the payment of winnings was made for the the partnership, S corporation, or trust that it has taxable year in which that person incurred an Illinois revoked a certificate by notice left at the usual place income tax liability with respect to those winnings. of business of the partnership, S corporation, or trust (Source: P.A. 85-731.)
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Sec. 711. Payor's Return and Payment of to be a special fund in trust for the Department. No Tax Withheld. payee shall have any right of action against his payor in respect of any money deducted and withheld and (a) In general. Every payor required to paid over to the Department in compliance or in deduct and withhold tax under Section 710 shall be intended compliance with Sections 709.5 or 710 subject to the same reporting requirements (and until January 1, 1989, Sections 708 and 709). regarding taxes withheld and the same monthly and (Source: P.A. 85-299; 85-982.) quarter monthly (weekly) payment requirements as an employer subject to the provisions of Section Sec. 713. Payor's Failure To Withhold. 701. For purposes of monthly and quarter monthly If a payor fails to deduct and withhold any (weekly) payments, the total tax withheld under amount of tax as required under Sections 709.5 or Sections 701 and 710 shall be considered in the 710 and thereafter the tax on account of which such aggregate. amount was required to be deducted and withheld is (a-5) Every partnership, Subchapter S paid, such amount of tax shall not be collected from corporation, or trust required to withhold tax under the payor, but the payor shall not be relieved from Section 709.5 shall report the amounts withheld and liability for penalties or interest otherwise the partners, shareholders, or beneficiaries from applicable in respect of such failure to deduct and whom the amounts were withheld, and pay over the withhold. For purposes of this Section, the tax on amount withheld, no later than the due date (without account of which an amount is required to be regard to extensions) of the tax return of the deducted and withheld is the tax of the individual or partnership, Subchapter S corporation, or trust for individuals who are entitled to a credit under the taxable year. subsection (b) of Section 709.5 or subsection (b) of Section 710 for the withheld tax. (Source: P.A. 85- (b) Information statement. Every payor 299; 85-982.) required to deduct and withhold tax under Section 710 shall furnish in duplicate to each party entitled ARTICLE 8. DECLARATION AND PAYMENT to the credit for such withholding under subsection OF ESTIMATED TAX. (b) of Section 709.5, and subsection (b) of Section Sec. 803. Payment Of Estimated Tax. 710, respectively, on or before January 31 of the succeeding calendar year for amounts withheld (a) Every taxpayer other than an estate, under Section 710 or the due date (without regard to trust, partnership, Subchapter S corporation or extensions) of the return of the partnership, farmer is required to pay estimated tax for the Subchapter S corporation, or trust for the taxable taxable year, in such amount and with such forms as year for amounts withheld under Section 709.5 for the Department shall prescribe, if the amount the taxable year, a written statement in such form as payable as estimated tax can reasonably be expected the Department may by regulation prescribe to be more than (i) $250 for taxable years ending showing the amount of the payments, the amount before December 31, 2001 and $500 for taxable deducted and withheld as tax, and such other years ending on or after December 31, 2001 or (ii) information as the Department may prescribe. A $400 for corporations. copy of such statement shall be filed by the party entitled to the credit for the withholding under (b) Estimated tax defined. The term subsection (b) of Section 709.5, or subsection (b) of "estimated tax" means the excess of: Section 710 with his return for the taxable year to (1) The amount which the taxpayer which it relates. (Source: P.A. 85-299; 85-982.) estimates to be his tax under this Act for the taxable Sec. 712. Payor's Liability For Withheld year, over Taxes. (2) The amount which he estimates to be the sum of any amounts to be withheld on account Every payor who deducts and withholds or of or credited against such tax. is required to deduct and withhold tax under Sections 709.5 or 710 is liable for such tax. For (c) Joint payment. If they are eligible to do purposes of assessment and collection, any amount so for federal tax purposes, a husband and wife may withheld or required to be withheld and paid over to pay estimated tax as if they were one taxpayer, in the Department, and any penalties and interest with which case the liability with respect to the estimated respect thereto, shall be considered the tax of the tax shall be joint and several. If a joint payment is payor. Any amount of tax actually deducted and made but the husband and wife elect to determine withheld under Sections 709.5 or 710 shall be held their taxes under this Act separately, the estimated
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tax for such year may be treated as the estimated tax (2) the amount, if any, of the installment of either husband or wife, or may be divided paid on or before the last date prescribed for between them, as they may elect. payment. (d) There shall be paid 4 equal installments (c) Amount of Required Installments. of estimated tax for each taxable year, payable as (1) Amount. follows: (A) In General. Except as provided in Required Installment: Due Date: paragraphs (2) and (3), the amount of any required 1st April 15 installment shall be 25% of the required annual 2nd June 15 payment. 3rd September 15 4th Individuals: January 15 of the (B) Required Annual Payment. For following taxable year purposes of subparagraph (A), the term "required Corporations: December 15 annual payment" means the lesser of: (e) Farmers. An individual, having gross (i) 90% of the tax shown on the return for income from farming for the taxable year which is the taxable year, or if no return is filed, 90% of the at least 2/3 of his total estimated gross income for tax for such year; such year. (ii) for installments due prior to February (f) Application to short taxable years. The 1, 2011, and after January 31, 2012, 100% of the tax application of this section to taxable years of less shown on the return of the taxpayer for the than 12 months shall be in accordance with preceding taxable year if a return showing a liability regulations prescribed by the Department. for tax was filed by the taxpayer for the preceding taxable year and such preceding year was a taxable (g) Fiscal years. In the application of this year of 12 months; or section to the case of a taxable year beginning on any date other than January 1, there shall be (iii) for installments due after January 31, substituted, for the months specified in subsections 2011, and prior to February 1, 2012, 150% of the tax (d) and (e), the months which correspond thereto. shown on the return of the taxpayer for the preceding taxable year if a return showing a liability (h) Installments paid in advance. Any for tax was filed by the taxpayer for the preceding installment of estimated tax may be paid before the taxable year and such preceding year was a taxable date prescribed for its payment. year of 12 months. The changes in this Section made by this (2) Lower Required Installment where amendatory Act of 1985 shall apply to taxable years Annualized Income Installment is Less Than ending on or after January 1, 1986. (Source: P.A. 86- Amount Determined Under Paragraph (1). 678.) (A) In General. In the case of any required Sec. 804. Failure To Pay Estimated Tax. installment if a taxpayer establishes that the (a) In general. In case of any underpayment annualized income installment is less than the of estimated tax by a taxpayer, except as provided in amount determined under paragraph (1), subsection (d) or (e), the taxpayer shall be liable to (i) the amount of such required installment a penalty in an amount determined at the rate shall be the annualized income installment, and prescribed by Section 3-3 of the Uniform Penalty and Interest Act upon the amount of the (ii) any reduction in a required installment underpayment (determined under subsection (b)) for resulting from the application of this subparagraph each required installment. shall be recaptured by increasing the amount of the next required installment determined under (b) Amount of underpayment. For paragraph (1) by the amount of such reduction, and purposes of subsection (a), the amount of the by increasing subsequent required installments to underpayment shall be the excess of: the extent that the reduction has not previously been (1) the amount of the installment which recaptured under this clause. would be required to be paid under subsection (c), (B) Determination of Annualized Income over Installment. In the case of any required installment, the annualized income installment is the excess, if any, of
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(i) an amount equal to the applicable then dividing the resulting amount by the number of percentage of the tax for the taxable year computed months in the taxable year (3, 5, 6, 8, 9, or 11 as the by placing on an annualized basis the net income for case may be). months in the taxable year ending before the due (3) Notwithstanding any other provision of date for the installment, over this subsection (c), in the case of a federally (ii) the aggregate amount of any prior regulated exchange that elects to apportion its required installments for the taxable year. income under Section 304(c-1) of this Act, the amount of each required installment due prior to (C) Applicable Percentage. June 30 of the first taxable year to which the election In the case of the applies shall be 25% of the tax that would have been following required The applicable shown on the return for that taxable year if the installments: percentage is: taxpayer had not made such election. 1st 22.5% (d) Exceptions. Notwithstanding the 2nd 45% provisions of the preceding subsections, the penalty 3rd 67.5% imposed by subsection (a) shall not be imposed if 4th 90% the taxpayer was not required to file an Illinois (D) Annualized Net Income; Individuals. income tax return for the preceding taxable year, or, For individuals, net income shall be placed on an for individuals, if the taxpayer had no tax liability annualized basis by: for the preceding taxable year and such year was a taxable year of 12 months. The penalty imposed by (i) multiplying by 12, or in the case of a subsection (a) shall also not be imposed on any taxable year of less than 12 months, by the number underpayments of estimated tax due before the of months in the taxable year, the net income effective date of this amendatory Act of 1998 which computed without regard to the standard exemption underpayments are solely attributable to the change for the months in the taxable year ending before the in apportionment from subsection (a) to subsection month in which the installment is required to be (h) of Section 304. The provisions of this paid; amendatory Act of 1998 apply to tax years ending (ii) dividing the resulting amount by the on or after December 31, 1998. number of months in the taxable year ending before (e) The penalty imposed for underpayment the month in which such installment date falls; and of estimated tax by subsection (a) of this Section (iii) deducting from such amount the shall not be imposed to the extent that the Director standard exemption allowable for the taxable year, or his or her designate determines, pursuant to such standard exemption being determined as of the Section 3-8 of the Uniform Penalty and Interest Act last date prescribed for payment of the installment. that the penalty should not be imposed. (E) Annualized Net Income; Corporations. (f) Definition of tax. For purposes of For corporations, net income shall be placed on an subsections (b) and (c), the term "tax" means the annualized basis by multiplying by 12 the taxable excess of the tax imposed under Article 2 of this Act, income over the amounts credited against such tax under Sections 601(b) (3) and (4). (i) for the first 3 months of the taxable year, in the case of the installment required to be paid in (g) Application of Section in case of tax the 4th month, withheld under Article 7. For purposes of applying this Section: (ii) for the first 3 months or for the first 5 months of the taxable year, in the case of the (1) tax withheld from compensation for the installment required to be paid in the 6th month, taxable year shall be deemed a payment of estimated tax, and an equal part of such amount shall be (iii) for the first 6 months or for the first 8 deemed paid on each installment date for such months of the taxable year, in the case of the taxable year, unless the taxpayer establishes the installment required to be paid in the 9th month, and dates on which all amounts were actually withheld, (iv) for the first 9 months or for the first 11 in which case the amounts so withheld shall be months of the taxable year, in the case of the deemed payments of estimated tax on the dates on installment required to be paid in the 12th month of which such amounts were actually withheld; the taxable year,
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(2) amounts timely paid by a partnership, ARTICLE 9. PROCEDURE AND Subchapter S corporation, or trust on behalf of a ADMINISTRATION. partner, shareholder, or beneficiary pursuant to Sec. 901. Collection Authority. subsection (f) of Section 502 or Section 709.5 and claimed as a payment of estimated tax shall be (a) In general. deemed a payment of estimated tax made on the last The Department shall collect the taxes day of the taxable year of the partnership, imposed by this Act. The Department shall collect Subchapter S corporation, or trust for which the income from the withholding is made was certified past due child support amounts under computed; and Section 2505-650 of the Department of Revenue Law. Except as provided in subsections (b), (c), (e), (3) all other amounts pursuant to Article 7 (f), (g), and (h) of this Section, money collected shall be deemed a payment of estimated tax on the pursuant to subsections (a) and (b) of Section 201 of date the payment is made to the taxpayer of the this Act shall be paid into the General Revenue Fund amount from which the tax is withheld. in the State treasury; money collected pursuant to subsections (c) and (d) of Section 201 of this Act (g-5) Amounts withheld under the State shall be paid into the Personal Property Tax Salary and Annuity Withholding Act. An individual Replacement Fund, a special fund in the State who has amounts withheld under paragraph (10) of Treasury; and money collected under Section 2505- Section 4 of the State Salary and Annuity 650 of the Department of Revenue Law (20 ILCS Withholding Act may elect to have those amounts 2505/2505-650) shall be paid into the Child Support treated as payments of estimated tax made on the Enforcement Trust Fund, a special fund outside the dates on which those amounts are actually withheld. State Treasury, or to the State Disbursement Unit (i) Short taxable year. The application of established under Section 10-26 of the Illinois this Section to taxable years of less than 12 months Public Aid Code, as directed by the Department of shall be in accordance with regulations prescribed Healthcare and Family Services. by the Department. The changes in this Section (b) Local Government Distributive Fund. made by Public Act 84-127 shall apply to taxable years ending on or after January 1, 1986. (Source: Beginning August 1, 1969, and continuing P.A. 90-448, eff. 8-16-97; 90-613, eff. 7-9-98.) through June 30, 1994, the Treasurer shall transfer each month from the General Revenue Fund to a Sec. 806. Exemption from penalty. special fund in the State treasury, to be known as the An individual taxpayer shall not be subject "Local Government Distributive Fund", an amount to a penalty for failing to pay estimated tax as equal to 1/12 of the net revenue realized from the tax required by Section 803 if the taxpayer is 65 years imposed by subsections (a) and (b) of Section 201 of age or older and is a permanent resident of a of this Act during the preceding month. Beginning nursing home. For purposes of this Section, "nursing July 1, 1994, and continuing through June 30, 1995, home" means a skilled nursing or intermediate long the Treasurer shall transfer each month from the term care facility that is subject to licensure by the General Revenue Fund to the Local Government Illinois Department of Public Health under the Distributive Fund an amount equal to 1/11 of the net Nursing Home Care Act, the Specialized Mental revenue realized from the tax imposed by Health Rehabilitation Act, or the ID/DD subsections (a) and (b) of Section 201 of this Act Community Care Act, or the MC/DD Act. during the preceding month. Beginning July 1, 1995 and continuing through January 31, 2011, the Sec. 807. EDGE payment. Treasurer shall transfer each month from the A payment includes a payment provided General Revenue Fund to the Local Government for in subsection (g) of Section 5-15 of the Distributive Fund an amount equal to the net of (i) Economic Development for a Growing Economy 1/10 of the net revenue realized from the tax Tax Credit Act. imposed by subsections (a) and (b) of Section 201 of the Illinois Income Tax Act during the preceding month (ii) minus, beginning July 1, 2003 and ending June 30, 2004, $6,666,666, and beginning July 1, 2004, zero. Beginning February 1, 2011, and continuing through January 31, 2015, the Treasurer shall transfer each month from the General Revenue Fund to the Local Government Distributive Fund an
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amount equal to the sum of (i) 6% (10% of the ratio Notwithstanding any provision of law to of the 3% individual income tax rate prior to 2011 the contrary, beginning on the effective date of this to the 5% individual income tax rate after 2010) of amendatory Act of the 100th General Assembly, the net revenue realized from the tax imposed by those amounts required under this subsection (b) to subsections (a) and (b) of Section 201 of this Act be transferred by the Treasurer into the Local upon individuals, trusts, and estates during the Government Distributive Fund from the General preceding month and (ii) 6.86% (10% of the ratio of Revenue Fund shall be directly deposited into the the 4.8% corporate income tax rate prior to 2011 to Local Government Distributive Fund as the revenue the 7% corporate income tax rate after 2010) of the is realized from the tax imposed by subsections (a) net revenue realized from the tax imposed by and (b) of Section 201 of this Act. subsections (a) and (b) of Section 201 of this Act For State fiscal year 2018 only, upon corporations during the preceding month. notwithstanding any provision of law to the Beginning February 1, 2015 and continuing through contrary, the total amount of revenue and deposits July 31, 2017, the Treasurer shall transfer each under this Section attributable to revenues realized month from the General Revenue Fund to the Local during State fiscal year 2018 shall be reduced by Government Distributive Fund an amount equal to 10%. the sum of (i) 8% (10% of the ratio of the 3% individual income tax rate prior to 2011 to the (c) Deposits Into Income Tax Refund 3.75% individual income tax rate after 2014) of the Fund. net revenue realized from the tax imposed by subsections (a) and (b) of Section 201 of this Act (1) Beginning on January 1, 1989 and upon individuals, trusts, and estates during the thereafter, the Department shall deposit a percentage of the amounts collected pursuant to subsections (a) preceding month and (ii) 9.14% (10% of the ratio of and (b)(1), (2), and (3), of Section 201 of this Act the 4.8% corporate income tax rate prior to 2011 to into a fund in the State treasury known as the the 5.25% corporate income tax rate after 2014) of the net revenue realized from the tax imposed by Income Tax Refund Fund. The Department shall subsections (a) and (b) of Section 201 of this Act deposit 6% of such amounts during the period beginning January 1, 1989 and ending on June 30, upon corporations during the preceding month. 1989. Beginning with State fiscal year 1990 and for Beginning August 1, 2017, the Treasurer shall each fiscal year thereafter, the percentage deposited transfer each month from the General Revenue Fund into the Income Tax Refund Fund during a fiscal to the Local Government Distributive Fund an amount equal to the sum of (i) 6.06% (10% of the year shall be the Annual Percentage. For fiscal years ratio of the 3% individual income tax rate prior to 1999 through 2001, the Annual Percentage shall be 7.1%. For fiscal year 2003, the Annual Percentage 2011 to the 4.95% individual income tax rate after shall be 8%. For fiscal year 2004, the Annual July 1, 2017) of the net revenue realized from the Percentage shall be 11.7%. Upon the effective date tax imposed by subsections (a) and (b) of Section of this amendatory Act of the 93rd General 201 of this Act upon individuals, trusts, and estates during the preceding month and (ii) 6.85% (10% of Assembly, the Annual Percentage shall be 10% for the ratio of the 4.8% corporate income tax rate prior fiscal year 2005. For fiscal year 2006, the Annual Percentage shall be 9.75%. For fiscal year 2007, the to 2011 to the 7% corporate income tax rate after Annual Percentage shall be 9.75%. For fiscal year July 1, 2017) of the net revenue realized from the 2008, the Annual Percentage shall be 7.75%. For tax imposed by subsections (a) and (b) of Section 201 of this Act upon corporations during the fiscal year 2009, the Annual Percentage shall be preceding month. Net revenue realized for a month 9.75%. For fiscal year 2010, the Annual Percentage shall be 9.75%. For fiscal year 2011, the Annual shall be defined as the revenue from the tax imposed Percentage shall be 8.75%. For fiscal year 2012, the by subsections (a) and (b) of Section 201 of this Act Annual Percentage shall be 8.75%. For fiscal year which is deposited in the General Revenue Fund, the 2013, the Annual Percentage shall be 9.75%. For Education Assistance Fund, the Income Tax Surcharge Local Government Distributive Fund, the fiscal year 2014, the Annual Percentage shall be Fund for the Advancement of Education, and the 9.5%. For fiscal year 2015, the Annual Percentage shall be 10%. For fiscal year 2018, the Annual Commitment to Human Services Fund during the Percentage shall be 9.8%. For all other fiscal years, month minus the amount paid out of the General the Annual Percentage shall be calculated as a Revenue Fund in State warrants during that same fraction, the numerator of which shall be the amount month as refunds to taxpayers for overpayment of liability under the tax imposed by subsections (a) of refunds approved for payment by the Department and (b) of Section 201 of this Act. during the preceding fiscal year as a result of
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overpayment of tax liability under subsections (a) unpaid at the end of the preceding fiscal year, and and (b)(1), (2), and (3) of Section 201 of this Act the denominator of which shall be the amounts plus the amount of such refunds remaining approved which will be collected pursuant to subsections (a) but unpaid at the end of the preceding fiscal year, and (b)(6), (7), and (8), (c) and (d) of Section 201 of minus the amounts transferred into the Income Tax this Act during the preceding fiscal year; except that Refund Fund from the Tobacco Settlement in State fiscal year 2002, the Annual Percentage Recovery Fund, and the denominator of which shall shall in no event exceed 23%. The Director of be the amounts which will be collected pursuant to Revenue shall certify the Annual Percentage to the subsections (a) and (b)(1), (2), and (3) of Section Comptroller on the last business day of the fiscal 201 of this Act during the preceding fiscal year; year immediately preceding the fiscal year for which except that in State fiscal year 2002, the Annual it is to be effective. Percentage shall in no event exceed 7.6%. The (3) The Comptroller shall order transferred Director of Revenue shall certify the Annual and the Treasurer shall transfer from the Tobacco Percentage to the Comptroller on the last business Settlement Recovery Fund to the Income Tax day of the fiscal year immediately preceding the Refund Fund (i) $35,000,000 in January, 2001, (ii) fiscal year for which it is to be effective. $35,000,000 in January, 2002, and (iii) $35,000,000 (2) Beginning on January 1, 1989 and in January, 2003. thereafter, the Department shall deposit a percentage (d) Expenditures from Income Tax Refund of the amounts collected pursuant to subsections (a) Fund. and (b)(6), (7), and (8), (c) and (d) of Section 201 of this Act into a fund in the State treasury known as (1) Beginning January 1, 1989, money in the Income Tax Refund Fund. The Department shall the Income Tax Refund Fund shall be expended deposit 18% of such amounts during the period exclusively for the purpose of paying refunds beginning January 1, 1989 and ending on June 30, resulting from overpayment of tax liability under 1989. Beginning with State fiscal year 1990 and for Section 201 of this Act, for paying rebates under each fiscal year thereafter, the percentage deposited Section 208.1 in the event that the amounts in the into the Income Tax Refund Fund during a fiscal Homeowners' Tax Relief Fund are insufficient for year shall be the Annual Percentage. For fiscal years that purpose, and for making transfers pursuant to 1999, 2000, and 2001, the Annual Percentage shall this subsection (d). be 19%. For fiscal year 2003, the Annual Percentage (2) The Director shall order payment of shall be 27%. For fiscal year 2004, the Annual Percentage shall be 32%. Upon the effective date of refunds resulting from overpayment of tax liability this amendatory Act of the 93rd General Assembly, under Section 201 of this Act from the Income Tax Refund Fund only to the extent that amounts the Annual Percentage shall be 24% for fiscal year collected pursuant to Section 201 of this Act and 2005. For fiscal year 2006, the Annual Percentage transfers pursuant to this subsection (d) and item (3) shall be 20%. For fiscal year 2007, the Annual of subsection (c) have been deposited and retained Percentage shall be 17.5%. For fiscal year 2008, the Annual Percentage shall be 15.5%. For fiscal year in the Fund. 2009, the Annual Percentage shall be 17.5%. For (3) As soon as possible after the end of fiscal year 2010, the Annual Percentage shall be each fiscal year, the Director shall order transferred 17.5%. For fiscal year 2011, the Annual Percentage and the State Treasurer and State Comptroller shall shall be 17.5%. For fiscal year 2012, the Annual transfer from the Income Tax Refund Fund to the Percentage shall be 17.5%. For fiscal year 2013, the Personal Property Tax Replacement Fund an Annual Percentage shall be 14%. For fiscal year amount, certified by the Director to the Comptroller, 2014, the Annual Percentage shall be 13.4%. For equal to the excess of the amount collected pursuant fiscal year 2015, the Annual Percentage shall be to subsections (c) and (d) of Section 201 of this Act 14%. For fiscal year 2018, the Annual Percentage deposited into the Income Tax Refund Fund during shall be 17.5%. For all other fiscal years, the Annual the fiscal year over the amount of refunds resulting Percentage shall be calculated as a fraction, the from overpayment of tax liability under subsections numerator of which shall be the amount of refunds (c) and (d) of Section 201 of this Act paid from the approved for payment by the Department during the Income Tax Refund Fund during the fiscal year. preceding fiscal year as a result of overpayment of tax liability under subsections (a) and (b)(6), (7), (4) As soon as possible after the end of and (8), (c) and (d) of Section 201 of this Act plus each fiscal year, the Director shall order transferred the amount of such refunds remaining approved but and the State Treasurer and State Comptroller shall transfer from the Personal Property Tax
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Replacement Fund to the Income Tax Refund Fund into the Income Tax Surcharge Local Government an amount, certified by the Director to the Distributive Fund in the State Treasury. Comptroller, equal to the excess of the amount of (f) Deposits into the Fund for the refunds resulting from overpayment of tax liability Advancement of Education. Beginning February 1, under subsections (c) and (d) of Section 201 of this 2015, the Department shall deposit the following Act paid from the Income Tax Refund Fund during portions of the revenue realized from the tax the fiscal year over the amount collected pursuant to imposed upon individuals, trusts, and estates by subsections (c) and (d) of Section 201 of this Act subsections (a) and (b) of Section 201 of this Act deposited into the Income Tax Refund Fund during during the preceding month, minus deposits into the the fiscal year. Income Tax Refund Fund, into the Fund for the (4.5) As soon as possible after the end of Advancement of Education: fiscal year 1999 and of each fiscal year thereafter, (1) beginning February 1, 2015, and prior the Director shall order transferred and the State to February 1, 2025, 1/30; and Treasurer and State Comptroller shall transfer from the Income Tax Refund Fund to the General (2) beginning February 1, 2025, 1/26. Revenue Fund any surplus remaining in the Income If the rate of tax imposed by subsection (a) Tax Refund Fund as of the end of such fiscal year; and (b) of Section 201 is reduced pursuant to Section excluding for fiscal years 2000, 2001, and 2002 201.5 of this Act, the Department shall not make the amounts attributable to transfers under item (3) of deposits required by this subsection (f) on or after subsection (c) less refunds resulting from the earned the effective date of the reduction. income tax credit. (5) This Act shall constitute an irrevocable (g) Deposits into the Commitment to Human Services Fund. Beginning February 1, 2015, and continuing appropriation from the Income Tax the Department shall deposit the following portions Refund Fund for the purpose of paying refunds upon of the revenue realized from the tax imposed upon the order of the Director in accordance with the individuals, trusts, and estates by subsections (a) and provisions of this Section. (b) of Section 201 of this Act during the preceding (e) Deposits into the Education Assistance month, minus deposits into the Income Tax Refund Fund and the Income Tax Surcharge Local Fund, into the Commitment to Human Services Government Distributive Fund. Fund: On July 1, 1991, and thereafter, of the (1) beginning February 1, 2015, and prior amounts collected pursuant to subsections (a) and to February 1, 2025, 1/30; and (b) of Section 201 of this Act, minus deposits into the Income Tax Refund Fund, the Department shall (2) beginning February 1, 2025, 1/26. deposit 7.3% into the Education Assistance Fund in If the rate of tax imposed by subsection (a) the State Treasury. Beginning July 1, 1991, and and (b) of Section 201 is reduced pursuant to Section continuing through January 31, 1993, of the 201.5 of this Act, the Department shall not make the amounts collected pursuant to subsections (a) and deposits required by this subsection (g) on or after (b) of Section 201 of the Illinois Income Tax Act, the effective date of the reduction. (Source: P.A. 94- minus deposits into the Income Tax Refund Fund, 91, eff. 7-1-05; 94-839, eff. 6-6-06; 95-707, eff. 1- the Department shall deposit 3.0% into the Income 11-08; 95-744, eff. 7-18-08; revised 10-23-08.) Tax Surcharge Local Government Distributive Fund in the State Treasury. Beginning February 1, 1993 (h) Deposits into the Tax Compliance and and continuing through June 30, 1993, of the Administration Fund. Beginning on the first day of amounts collected pursuant to subsections (a) and the first calendar month to occur on or after the (b) of Section 201 of the Illinois Income Tax Act, effective date of this amendatory Act of the 98th minus deposits into the Income Tax Refund Fund, General Assembly, each month the Department the Department shall deposit 4.4% into the Income shall pay into the Tax Compliance and Tax Surcharge Local Government Distributive Fund Administration Fund, to be used, subject to in the State Treasury. Beginning July 1, 1993, and appropriation, to fund additional auditors and continuing through June 30, 1994, of the amounts compliance personnel at the Department, an amount collected under subsections (a) and (b) of Section equal to 1/12 of 5% of the cash receipts collected 201 of this Act, minus deposits into the Income Tax during the preceding fiscal year by the Audit Bureau Refund Fund, the Department shall deposit 1.475% of the Department from the tax imposed by subsections (a), (b), (c), and (d) of Section 201 of
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this Act, net of deposits into the Income Tax Refund business assets with the Chicago office of the Fund made from those cash receipts. Department disclosing the name and address of the seller or transferor, the name and address of the Sec. 902. Notice And Demand. purchaser or transferee, the date of the sale or (a) In general. Except as provided in transfer, a copy of the sales contract and financing subsection (b) the Director shall, as soon as agreements which shall include a description of the practicable after an amount payable under this Act property sold or transferred, the amount of the is deemed assessed (as provided in Section 903), purchase price or a statement of other consideration give notice to each person liable for any unpaid for the sale or transfer, and the terms for payment of portion of such assessment, stating the amount the purchase price, and such other information as the unpaid and demanding payment thereof. In the case Department may reasonably require. If the of tax deemed assessed with the filing of a return, purchaser or transferee fails to file the above the Director shall give notice no later than 3 years described notice of sale with the Department within after the date the return was filed. Upon receipt of the prescribed time, the purchaser or transferee shall any notice and demand there shall be paid at the be personally liable to the Department for the place and time stated in such notice the amount amount owed hereunder by the seller or transferor stated in such notice. Such notice shall be left at the but unpaid, up to the amount of the reasonable value dwelling or usual place of business of such person of the property acquired by the purchaser or or shall be sent by mail to the person's last known transferee. The purchaser or transferee shall pay the address. Department the amount of tax, penalties, and interest owed by the seller or transferor under this (b) Judicial review. In the case of a Act, to the extent they have not been paid by the deficiency deemed assessed under Section 903 (a) seller or transferor. The seller or transferor, or the (2) after the filing of a protest, notice and demand purchaser or transferee, at least 10 business days shall not be made with respect to such assessment before the date of the sale or transfer, may notify the until all proceedings in court for the review of such Department of the intended sale or transfer and assessment have terminated or the time for the request the Department to make a determination as taking thereof has expired without such proceedings to whether the seller or transferor owes any tax, being instituted. penalty or interest due under this Act. The (c) Action for recovery of taxes. At any Department shall take such steps as may be time that the Department might commence appropriate to comply with such request. proceedings for a levy under Section 1109, Any order issued by the Department regardless of whether a notice of lien was filed under pursuant to this Section to withhold from the the provisions of Section 1103, it may bring an purchase price shall be issued within 10 business action in any court of competent jurisdiction within days after the Department receives notification of a or without this State in the name of the people of this sale as provided in this Section. The purchaser or State to recover the amount of any taxes, penalties transferee shall withhold such portion of the and interest due and unpaid under this Act. In such purchase price as may be directed by the action, the certificate of the Department showing the Department, but not to exceed a minimum amount amount of the delinquency shall be prima facie varying by type of business, as determined by the evidence of the correctness of such amount, its Department pursuant to regulations, plus twice the assessment and of the compliance by the outstanding unpaid liabilities and twice the average Department with all the provisions of this Act. liability of preceding filings times the number of (d) Sales or transfers outside the usual unfiled returns which were not filed when due, to course of business-Report-Payment of Tax - Rights cover the amount of all tax, penalty, and interest due and duties of purchaser or transferee - penalty. If any and unpaid by the seller or transferor under this Act taxpayer, outside the usual course of his business, or, if the payment of money or property is not sells or transfers the major part of any one or more involved, shall withhold the performance of the of (A) the stock of goods which he is engaged in the condition that constitutes the consideration for the business of selling, or (B) the furniture or fixtures, sale or transfer. Within 60 business days after or (C) the machinery and equipment, or (D) the real issuance of the initial order to withhold, the property, of any business that is subject to the Department shall provide written notice to the provisions of this Act, the purchaser or transferee of purchaser or transferee of the actual amount of all such assets shall, no later than 10 business days after taxes, penalties and interest then due and whether or the sale or transfer, file a notice of sale or transfer of not additional amounts may become due as a result
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of unpaid taxes required to be withheld by an Sec. 903. Assessment. employer, returns which were not filed when due, (a) In general. (1) Returns. The amount of pending assessments and audits not completed. The tax which is shown to be due on the return shall be purchaser or transferee shall continue to withhold deemed assessed on the date of filing of the return the amount directed to be withheld by the initial (including any amended returns showing an increase order or such lesser amount as is specified by the of tax). In the event that the amount of tax is final withholding order or to withhold the understated on the taxpayer's return due to a performance of the condition which constitutes the mathematical error, the Department shall notify the consideration for the sale or transfer until the taxpayer that the amount of tax in excess of that purchaser or transferee receives from the shown on the return is due and has been assessed. Department a certificate showing that no unpaid tax, Such notice of additional tax due shall be issued no penalty or interest is due from the seller or transferor later than 3 years after the date the return was filed. under this Act. Such notice of additional tax due shall not be The purchaser or transferee is relieved of considered a notice of deficiency nor shall the any duty to continue to withhold from the purchase taxpayer have any right of protest. In the case of a price and of any liability for tax, penalty, or interest return properly filed without the computation of the due hereunder from the seller or transferor if the tax, the tax computed by the Department shall be Department fails to notify the purchaser or deemed to be assessed on the date when payment is transferee in the manner provided herein of the due. amount to be withheld within 10 business days after (2) Notice of deficiency. If a notice of the sale or transfer has been reported to the deficiency has been issued, the amount of the Department or within 60 business days after deficiency shall be deemed assessed on the date issuance of the initial order to withhold, as the case provided in section 904(d) if no protest is filed; or, may be. The Department shall have the right to if a protest is filed, then upon the date when the determine amounts claimed on an estimated basis to decision of the Department becomes final. allow for periods for which returns were not filed when due, pending assessments and audits not (3) Federal change. If an amended return or completed, however the purchaser or transferee report is filed with the Department pursuant to shall be personally liable only for the actual amount section 506(b), any deficiency in tax under this Act due when determined. resulting therefrom shall be deemed to be assessed on the date of filing such report or amended return If the seller or transferor has failed to pay and such assessment shall be timely notwithstanding the tax, penalty, and interest due from him any other provisions of this Act. hereunder and the Department makes timely claim therefor against the purchaser or transferee as (4) Payments. Any amount paid as tax or in hereinabove provided, then the purchaser or respect of tax paid under this Act, other than transferee shall pay to the Department the amount so amounts withheld or paid as estimated tax under withheld from the purchase price. If the purchaser or Articles 7 or 8, shall be deemed assessed upon the transferee fails to comply with the requirements of date of receipt of payment, notwithstanding any this Section, the purchaser or transferee shall be other provisions of this Act. personally liable to the Department for the amount (b) Limitations on assessment. No owed hereunder by the seller or transferor up to the deficiency shall be assessed with respect to a taxable amount of the reasonable value of the property year for which a return was filed unless a notice of acquired by the purchaser or transferee. deficiency for such year was issued not later than the Any person who shall acquire any property date prescribed in section 905. (Source: P.A. 84- or rights thereto which, at the time of such 127.) acquisition, is subject to a valid lien in favor of the Sec. 904. Deficiencies And Department, shall be personally liable to the Overpayments. Department for a sum equal to the amount of taxes, penalties and interests, secured by such lien, but not (a) Examination of return. As soon as to exceed the reasonable value of such property practicable after a return is filed, the Department acquired by him. (Source: P.A. 86-923; 86-953.) shall examine it to determine the correct amount of tax. If the Department finds that the amount of tax shown on the return is less than the correct amount, it shall issue a notice of deficiency to the taxpayer
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which shall set forth the amount of tax and penalties 25% of the amount of base income stated in the proposed to be assessed. If the Department finds that return, a notice of deficiency may be issued not later the tax paid is more than the correct amount, it shall than 6 years after the return was filed. For purposes credit or refund the overpayment as provided by of this paragraph, there shall not be taken into Section 909. The findings of the Department under account any amount which is omitted in the return if this subsection shall be prima facie correct and shall such amount is disclosed in the return, or in a be prima facie evidence of the correctness of the statement attached to the return, in a manner amount of tax and penalties due. adequate to apprise the Department of the nature and the amount of such item. (b) No return filed. If the taxpayer fails to file a tax return, the Department shall determine the (2) Reportable transactions. If a taxpayer amount of tax due according to its best judgment and fails to include on any return or statement for any information, which amount so fixed by the taxable year any information with respect to a Department shall be prima facie correct and shall be reportable transaction, as required under Section prima facie evidence of the correctness of the 501(b) of this Act, a notice of deficiency may be amount of tax due. The Department shall issue a issued not later than 6 years after the return is filed notice of deficiency to the taxpayer which shall set with respect to the taxable year in which the forth the amount of tax and penalties proposed to be taxpayer participated in the reportable transaction assessed. and said deficiency is limited to the non-disclosed item. (c) Notice of deficiency. A notice of deficiency issued under this Act shall set forth the (3) Withholding. If an employer omits adjustments giving rise to the proposed assessment from a return required under Section 704A of this and the reasons therefor. In the case of a joint return, Act for any period beginning on or after January 1, the notice of deficiency may be a single joint notice 2013, an amount required to be withheld and to be except that if the Department is notified by either reported on that return which is in excess of 25% of spouse that separate residences have been the total amount of withholding required to be established, it shall issue joint notices to each reported on that return, a notice of deficiency may spouse. be issued not later than 6 years after the return was filed. (d) Assessment when no protest. Upon the expiration of 60 days after the date on which it was (c) No return or fraudulent return. If no issued (150 days if the taxpayer is outside the United return is filed or a false and fraudulent return is filed States), a notice of deficiency shall constitute an with intent to evade the tax imposed by this Act, a assessment of the amount of tax and penalties notice of deficiency may be issued at any time. For specified therein, except only for such amounts as to purposes of this subsection (c), any taxpayer who is which the taxpayer shall have filed a protest with the required to join in the filing of a return filed under Department, as provided in Section 908. (Source: the provisions of subsection (e) of Section 502 of P.A. 87-192; 87-205.) this Act for a taxable year ending on or after December 31, 2013 and who is not included on that Sec. 905. Limitations on Notices of return and does not file its own return for that Deficiency. taxable year shall be deemed to have failed to file a (a) In general. Except as otherwise return; provided that the amount of any proposed provided in this Act: assessment set forth in a notice of deficiency issued under this subsection (c) shall be limited to the (1) A notice of deficiency shall be issued amount of any increase in liability under this Act not later than 3 years after the date the return was that should have reported on the return required filed, and under the provisions of subsection (e) of Section 502 (2) No deficiency shall be assessed or of this Act for that taxable year resulting from collected with respect to the year for which the proper inclusion of that taxpayer on that return. return was filed unless such notice is issued within (d) Failure to report federal change. If a such period. taxpayer fails to notify the Department in any case (b) Substantial omission of items. where notification is required by Section 304(c) or 506(b), or fails to report a change or correction (1) Omission of more than 25% of income. which is treated in the same manner as if it were a If the taxpayer omits from base income an amount deficiency for federal income tax purposes, a notice properly includible therein which is in excess of of deficiency may be issued (i) at any time or (ii) on
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or after August 13, 1999, at any time for the taxable January 1, 2003, a notice of deficiency may be year for which the notification is required or for any issued to the partners, shareholders, or beneficiaries taxable year to which the taxpayer may carry an of the taxpayer at any time prior to the expiration of Article 2 credit, or a Section 207 loss, earned, the period agreed upon. Any proposed assessment incurred, or used in the year for which the set forth in the notice, however, shall be limited to notification is required; provided, however, that the the amount of any deficiency resulting under this amount of any proposed assessment set forth in the Act from recomputation of items of income, notice shall be limited to the amount of any deduction, credits, or other amounts of the taxpayer deficiency resulting under this Act from the that are taken into account by the partner, recomputation of the taxpayer's net income, Article shareholder, or beneficiary in computing its liability 2 credits, or Section 207 loss earned, incurred, or under this Act. The period so agreed upon may be used in the taxable year for which the notification is extended by subsequent agreements in writing made required after giving effect to the item or items before the expiration of the period previously agreed required to be reported. upon. (e) Report of federal change. (g) Erroneous refunds. In any case in which there has been an erroneous refund of tax payable (1) Before August 13, 1999, in any case under this Act, a notice of deficiency may be issued where notification of an alteration is given as at any time within 2 years from the making of such required by Section 506(b), a notice of deficiency refund, or within 5 years from the making of such may be issued at any time within 2 years after the refund if it appears that any part of the refund was date such notification is given, provided, however, induced by fraud or the misrepresentation of a that the amount of any proposed assessment set forth material fact, provided, however, that the amount of in such notice shall be limited to the amount of any any proposed assessment set forth in such notice deficiency resulting under this Act from shall be limited to the amount of such erroneous recomputation of the taxpayer's net income, net loss, refund. or Article 2 credits for the taxable year after giving effect to the item or items reflected in the reported Beginning July 1, 1993, in any case in alteration. which there has been a refund of tax payable under this Act attributable to a net loss carryback as (2) On and after August 13, 1999 , in any provided for in Section 207, and that refund is case where notification of an alteration is given as subsequently determined to be an erroneous refund required by Section 506(b), a notice of deficiency due to a reduction in the amount of the net loss may be issued at any time within 2 years after the which was originally carried back, a notice of date such notification is given for the taxable year deficiency for the erroneous refund amount may be for which the notification is given or for any taxable issued at any time during the same time period in year to which the taxpayer may carry an Article 2 which a notice of deficiency can be issued on the credit, or a Section 207 loss, earned, incurred, or loss year creating the carryback amount and used in the year for which the notification is given, subsequent erroneous refund. The amount of any provided, however, that the amount of any proposed proposed assessment set forth in the notice shall be assessment set forth in such notice shall be limited limited to the amount of such erroneous refund. to the amount of any deficiency resulting under this Act from recomputation of the taxpayer's net (h) Time return deemed filed. For purposes income, Article 2 credits, or Section 207 loss earned, of this Section a tax return filed before the last day incurred, or used in the taxable year for which the prescribed by law (including any extension thereof) notification is given after giving effect to the item or shall be deemed to have been filed on such last day. items reflected in the reported alteration. (i) Request for prompt determination of (f) Extension by agreement. Where, before liability. For purposes of Subsection (a)(1), in the the expiration of the time prescribed in this section case of a tax return required under this Act in respect for the issuance of a notice of deficiency, both the of a decedent, or by his estate during the period of Department and the taxpayer shall have consented administration, or by a corporation, the period in writing to its issuance after such time, such notice referred to in such Subsection shall be 18 months may be issued at any time prior to the expiration of after a written request for prompt determination of the period agreed upon. In the case of a taxpayer liability is filed with the Department (at such time who is a partnership, Subchapter S corporation, or and in such form and manner as the Department trust and who enters into an agreement with the shall by regulations prescribe) by the executor, Department pursuant to this subsection on or after administrator, or other fiduciary representing the
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estate of such decedent, or by such corporation, but expiration of the period of limitation for assessment not more than 3 years after the date the return was against the preceding transferee, but not more than filed. This Subsection shall not apply in the case of 3 years after the expiration of the period of a corporation unless: limitation for assessment against the initial transferor; except that if, before the expiration of the (1)(A) Such written request notifies the period of limitation for the assessment of the Department that the corporation contemplates liability of the transferee, a court proceeding for the dissolution at or before the expiration of such 18- collection of the tax or liability in respect thereof has month period, (B) the dissolution is begun in good been begun against the initial transferor or the last faith before the expiration of such 18-month period, preceding transferee, as the case may be, then the and (C) the dissolution is completed; period of limitation for assessment of the liability of (2)(A) Such written request notifies the the transferee shall expire 2 years after the return of Department that a dissolution has in good faith been the certified copy of the judgment in the court begun, and (B) the dissolution is completed; or proceeding. (3) A dissolution has been completed at the (n) Notice of decrease in net loss. On and time such written request is made. after August 23, 2002, no notice of deficiency shall be issued as the result of a decrease determined by (j) Withholding tax. In the case of returns the Department in the net loss incurred by a taxpayer required under Article 7 of this Act (with respect to in any taxable year ending prior to December 31, any amounts withheld as tax or any amounts 2002 under Section 207 of this Act unless the required to have been withheld as tax) a notice of Department has notified the taxpayer of the deficiency shall be issued not later than 3 years after proposed decrease within 3 years after the return the 15th day of the 4th month following the close of reporting the loss was filed or within one year after the calendar year in which such withholding was an amended return reporting an increase in the loss required. was filed, provided that in the case of an amended (k) Penalties for failure to make return, a decrease proposed by the Department more information reports. A notice of deficiency for the than 3 years after the original return was filed may penalties provided by Subsection 1405.1(c) of this not exceed the increase claimed by the taxpayer on Act may not be issued more than 3 years after the the original return. (Source: P.A. 92-846, eff. 8-23- due date of the reports with respect to which the 02; 93-840, eff. 7-30-04.) penalties are asserted. Sec. 906. Further Notices Of Deficiency (l) Penalty for failure to file withholding Restricted. returns. A notice of deficiency for penalties If a protest has been filed with respect to a provided by Section 1004 of this Act for taxpayer's notice of deficiency issued by the Department with failure to file withholding returns may not be issued respect to a taxable year, and the decision of the more than three years after the 15th day of the 4th Department on such protest has become final, the month following the close of the calendar year in Department shall be barred from issuing a further or which the withholding giving rise to taxpayer's additional notice of deficiency for such taxable year, obligation to file those returns occurred. except in the case of fraud, mathematical error, a (m) Transferee liability. A notice of return that is not considered processable, as the term deficiency may be issued to a transferee relative to is defined in Section 3-2 of the Uniform Penalty and a liability asserted under Section 1405 during time Interest Act, or as provided in section 905(d), (e), or periods defined as follows: (g). (Source: P.A. 89-399, eff. 8-20-95.) (1) Initial Transferee. In the case of the Sec. 907. Waiver Of Restrictions On liability of an initial transferee, up to 2 years after Assessment. the expiration of the period of limitation for The taxpayer at any time, whether or not a assessment against the transferor, except that if a notice of deficiency has been issued, shall have the court proceeding for review of the assessment right to waive the restrictions on assessment and against the transferor has begun, then up to 2 years collection of the whole or any part of any proposed after the return of the certified copy of the judgment assessment under this Act by a signed notice in in the court proceeding. writing filed with the Department in such form as (2) Transferee of Transferee. In the case of the Department may by forms or regulations the liability of a transferee, up to 2 years after the prescribe. (Source: P.A. 76-261.)
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Sec. 908. Procedure On Protest. of such request by mailing such denial to the taxpayer by certified or registered mail. If rehearing (a) Time for protest. Within 60 days (150 or Departmental review is granted, as soon as days if the taxpayer is outside the United States) practicable after such rehearing or Departmental after the issuance of a notice of deficiency, the review, the Department shall issue a notice of final taxpayer may file (i) a protest against the proposed decision as provided in subsection (b). assessment with the Department or (ii) a petition with the Illinois Independent Tax Tribunal, as (d) Finality of decision. If the taxpayer fails provided in this subsection (a). Prior to July 1, 2013, to file a timely protest or petition under subsection a written protest against the proposed assessment (a) of this Section, then the Department's notice of shall be filed with the Department in such form as deficiency shall become a final assessment at the the Department may by regulations prescribe, end of the 60th day after the date of issuance of the setting forth the grounds on which such protest is notice of deficiency (or the 150th day if the taxpayer based. If such a protest is filed, the Department shall is outside the United States). If the taxpayer files a reconsider the proposed assessment and, if the protest with the Department, and the taxpayer does taxpayer has so requested, shall grant the taxpayer not elect to be subject to the provisions of the Illinois or his authorized representative a hearing. Independent Tax Tribunal Act of 2012, then the action of the Department on the taxpayer's protest On and after July 1, 2013, all protests of a shall become final: notice of deficiency that are subject to the jurisdiction of the Illinois Independent Tax Tribunal (1) 30 Days after issuance of a notice of shall be filed by petition pursuant to the Illinois decision as provided in subsection (b); or Independent Tax Tribunal Act of 2012. (2) if a timely request for rehearing was With respect to protests filed with the made, upon the issuance of a denial of such request Department prior to July 1, 2013 that are otherwise or the issuance of a notice of final decision as subject to the jurisdiction of the Illinois Independent provided in subsection (c). Tax Tribunal, the taxpayer may elect to be subject After the issuance of a final assessment, or to the provisions of the Illinois Independent Tax a notice of deficiency which becomes final without Tribunal Act of 2012 at any time on or after July 1, the necessity of actually issuing a final assessment 2013, but not later than 30 days after the date on as provided in this Section, the Department, at any which the protest was filed. If made, the election time before such assessment is reduced to judgment, shall be irrevocable. may (subject to rules of the Department) grant a (b) Notice of decision. With respect to rehearing (or grant departmental review and hold an protests filed with the Department that are not original hearing if no previous hearing in the matter subject to the provisions of the Illinois Independent has been held) upon the application of the person Tax Tribunal Act of 2012, as soon as practicable aggrieved. Pursuant to such hearing or rehearing, the after such reconsideration and hearing, if any, the Department shall issue a revised final assessment to Department shall issue a notice of decision by such person or his legal representative for the mailing such notice by certified or registered mail. amount found to be due as a result of such hearing Such notice shall set forth briefly the Department's or rehearing. findings of fact and the basis of decision in each case If the taxpayer files a petition with the decided in whole or in part adversely to the Illinois Independent Tax Tribunal, or otherwise taxpayer. elects to be subject to the provisions of the Illinois (c) Request for rehearing. With respect to Independent Tax Tribunal Act of 2012, then the protests filed with the Department that are not Department's decision will become final as provided subject to the provisions of the Illinois Independent in that Act. Tax Tribunal Act of 2012, within 30 days after the Sec. 909. Credits And Refunds. mailing of a notice of decision, the taxpayer may file with a Department a written request for rehearing in (a) In general. In the case of any such form as the Department may by regulations overpayment, the Department, within the applicable prescribe, setting forth the grounds on which period of limitations for a claim for refund, may rehearing is requested. In any such case, the credit the amount of such overpayment, including Department shall, in its discretion, grant either a any interest allowed thereon, against any liability in rehearing or Departmental review unless, within 10 respect of the tax imposed by this Act, regardless of days of receipt of such request, it shall issue a denial whether other collection remedies are closed to the
110 As Amended Through Public Act 100-555
Department on the part of the person who made the Illinois Independent Tax Tribunal, as provided by overpayment and shall refund any balance to such Section 910. person or credit any balance to that person pursuant (f) Effect of denial. A denial of a claim for to an election under subsection (b) of this Section. refund becomes final 60 days after the date of (b) Credits against estimated tax. The issuance of the notice of such denial except for such Department shall prescribe regulations providing amounts denied as to which the claimant has filed a for a taxpayer election on an original return, an protest with the Department or a petition with the amended return, or otherwise for the crediting Illinois Independent Tax Tribunal, as provided by against the estimated tax for any taxable year of the Section 910. amount determined by the taxpayer or the (g) An overpayment of tax shown on the Department to be an overpayment of the tax face of an unsigned return shall be considered imposed by this Act for a preceding taxable year. forfeited to the State if after notice and demand for (c) Interest on overpayment. Interest shall signature by the Department the taxpayer fails to be allowed and paid at the rate and in the manner provide a signature and 3 years have passed from the prescribed in Section 3-2 of the Uniform Penalty date the return was filed. An overpayment of tax and Interest Act upon any overpayment in respect of refunded to a taxpayer whose return was filed the tax imposed by this Act. For purposes of this electronically shall be considered an erroneous subsection, no amount of tax, for any taxable year, refund under Section 912 of this Act if, after proper shall be treated as having been paid before the date notice and demand by the Department, the taxpayer on which the tax return for such year was due under fails to provide a required signature document. A Section 505, without regard to any extension of the notice and demand for signature in the case of a time for filing such return. return reflecting an overpayment may be made by first class mail. This subsection (g) shall apply to all (d) Refund claim. Every claim for refund returns filed pursuant to this Act since 1969. shall be filed with the Department in writing in such form as the Department may by regulations (h) This amendatory Act of 1983 applies to prescribe, and shall state the specific grounds upon returns and claims for refunds filed with the which it is founded. Department on and after July 1, 1983. (Source: P.A. 89-399, eff. 8-20-95.) (e) Notice of denial. As soon as practicable after a claim for refund is filed, the Department shall Sec. 910. Procedure On Denial Of Claim examine it and either issue a notice of refund, For Refund. abatement or credit to the claimant or issue a notice (a) Time for protest. Within 60 days after of denial. If the Department has failed to approve or the denial of the claim, the claimant may file (i) a deny the claim before the expiration of 6 months protest with the Department or (ii) a petition with from the date the claim was filed, the claimant may the Illinois Independent Tax Tribunal, as provided nevertheless thereafter file with the Department a in this subsection (a). A written protest against such written protest in such form as the Department may denial shall be filed with the Department in such by regulation prescribe, provided that, on or after form as the Department may by regulations July 1, 2013, protests concerning matters that are prescribe, setting forth the grounds on which such subject to the jurisdiction of the Illinois Independent protest is based. If such a protest is filed, the Tax Tribunal shall be filed with the Illinois Department shall reconsider the denial and, if the Independent Tax Tribunal and not with the taxpayer has so requested, shall grant the taxpayer Department. If the protest is subject to the or his authorized representative a hearing. With jurisdiction of the Department, the Department shall respect to protests filed with the Department prior to consider the claim and, if the taxpayer has so July 1, 2013 that would otherwise be subject to the requested, shall grant the taxpayer or the taxpayer's jurisdiction of the Illinois Independent Tax authorized representative a hearing within 6 months Tribunal, the taxpayer may elect to be subject to the after the date such request is filed. provisions of the Illinois Independent Tax Tribunal On and after July 1, 2013, if the protest Act of 2012 on or after July 1, 2013, but not later would otherwise be subject to the jurisdiction of the than 30 days after the date on which the protest was Illinois Independent Tax Tribunal, the claimant may filed. If made, the election shall be irrevocable. elect to treat the Department's non-action as a denial A claimant who, on or after July 1, 2013, of the claim by filing a petition to review the wishes to protest a denial that is subject to the Department's administrative decision with the jurisdiction of the Illinois Independent Tax Tribunal
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shall do so by filing a petition with the Illinois Department's decision will become final as provided Independent Tax Tribunal pursuant to the Illinois in that Act. Independent Tax Tribunal Act of 2012. Sec. 911. Limitations on Claims for (b) Notice of decision. With respect to Refund. protests that are subject to the jurisdiction of the (a) In general. Except as otherwise Department, if the taxpayer has not made an election provided in this Act: to be subject to the provisions of the Illinois Independent Tax Tribunal Act of 2012, then as soon (1) A claim for refund shall be filed not as practicable after such reconsideration and later than 3 years after the date the return was filed hearing, if any, the Department shall issue a notice (in the case of returns required under Article 7 of of decision by mailing such notice by certified or this Act respecting any amounts withheld as tax, not registered mail. Such notice shall set forth briefly later than 3 years after the 15th day of the 4th month the Department's findings of fact and the basis of following the close of the calendar year in which decision in each case decided in whole or in part such withholding was made), or one year after the adversely to the claimant. date the tax was paid, whichever is the later; and (c) Request for rehearing. Within 30 days (2) No credit or refund shall be allowed or after the mailing of a notice of decision as provided made with respect to the year for which the claim in subsection (b), the claimant may file with the was filed unless such claim is filed within such Department a written request for rehearing in such period. form as the Department may by regulations prescribe, setting forth the grounds on which (b) Federal changes. rehearing is requested. In any such case, the (1) In general. In any case where Department shall, in its discretion, grant either a notification of an alteration is required by Section rehearing or Departmental review unless, within 10 506 (b), a claim for refund may be filed within 2 days of receipt of such request, it shall issue a denial years after the date on which such notification was of such request by mailing such denial to the due (regardless of whether such notice was given), claimant by certified or registered mail. If rehearing but the amount recoverable pursuant to a claim filed or Departmental review is granted, as soon as under this Section shall be limited to the amount of practicable after such rehearing or Departmental any overpayment resulting under this Act from review, the Department shall issue a notice of final recomputation of the taxpayer's net income, net loss, decision as provided in subsection (b). or Article 2 credits for the taxable year after giving (d) Finality of decision. If the taxpayer fails effect to the item or items reflected in the alteration to file a timely protest or petition under subsection required to be reported. (a) of this Section, then the Department's notice of (2) Tentative carryback adjustments paid deficiency shall become a final assessment at the before January 1, 1974. If, as the result of the end of the 60th day after the date of issuance of the payment before January 1, 1974 of a federal notice of deficiency. If the protest is subject to the tentative carryback adjustment, a notification of an jurisdiction of the Department, and the taxpayer alteration is required under Section 506 (b), a claim does not elect to be subject to the provisions of the for refund may be filed at any time before January Illinois Independent Tax Tribunal Act of 2012, then 1, 1976, but the amount recoverable pursuant to a the action of the Department on the claimant's claim filed under this Section shall be limited to the protest shall become final: amount of any overpayment resulting under this Act (1) 30 days after issuance of a notice of from recomputation of the taxpayer's base income decision as provided in subsection (b); or for the taxable year after giving effect to the federal alteration resulting from the tentative carryback (2) If a timely request for rehearing was adjustment irrespective of any limitation imposed in made, upon the issuance of a denial of such request paragraph (l) of this subsection. or the issuance of a notice of final decision as (c) Extension by agreement. Where, before provided in subsection (c). the expiration of the time prescribed in this section If the taxpayer files a petition with the for the filing of a claim for refund, both the Illinois Independent Tax Tribunal, or otherwise Department and the claimant shall have consented elects to be subject to the provisions of the Illinois in writing to its filing after such time, such claim Independent Tax Tribunal Act of 2012, then the may be filed at any time prior to the expiration of the period agreed upon. The period so agreed upon
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may be extended by subsequent agreements in loss carryback as provided by Section 207, in lieu of writing made before the expiration of the period the 3 year period of limitation prescribed in previously agreed upon. In the case of a taxpayer subsection (a), the period shall be that period which who is a partnership, Subchapter S corporation, or ends 3 years after the time prescribed by law for trust and who enters into an agreement with the filing the return (including extensions thereof) for Department pursuant to this subsection on or after the taxable year of the net loss which results in such January 1, 2003, a claim for refund may be filed by carryback (or, on and after August 13, 1999, with the partners, shareholders, or beneficiaries of the respect to a change in the carryover of an Article 2 taxpayer at any time prior to the expiration of the credit to a taxable year resulting from the carryback period agreed upon. Any refund allowed pursuant to of a Section 207 loss incurred in a taxable year the claim, however, shall be limited to the amount beginning on or after January 1, 2000, the period of any overpayment of tax due under this Act that shall be that period that ends 3 years after the time results from recomputation of items of income, prescribed by law for filing the return (including deduction, credits, or other amounts of the taxpayer extensions of that time) for that subsequent taxable that are taken into account by the partner, year), or the period prescribed in subsection (c) in shareholder, or beneficiary in computing its liability respect of such taxable year, whichever expires under this Act. later. In the case of such a claim, the amount of the refund may exceed the portion of the tax paid within (d) Limit on amount of credit or refund. the period provided in subsection (d) to the extent of (1) Limit where claim filed within 3-year the amount of the overpayment attributable to such period. If the claim was filed by the claimant during carryback. On and after August 13, 1999, if the the 3-year period prescribed in subsection (a), the claim for refund relates to an overpayment amount of the credit or refund shall not exceed the attributable to the carryover of an Article 2 credit, or portion of the tax paid within the period, of a Section 207 loss, earned, incurred (in a taxable immediately preceding the filing of the claim, equal year beginning on or after January 1, 2000), or used to 3 years plus the period of any extension of time in a year for which a notification of a change for filing the return. affecting federal taxable income must be filed under subsection (b) of Section 506, the claim may be filed (2) Limit where claim not filed within 3- within the period prescribed in paragraph (1) of year period. If the claim was not filed within such 3- subsection (b) in respect of the year for which the year period, the amount of the credit or refund shall notification is required. In the case of such a claim, not exceed the portion of the tax paid during the one the amount of the refund may exceed the portion of year immediately preceding the filing of the claim. the tax paid within the period provided in subsection (e) Time return deemed filed. For purposes (d) to the extent of the amount of the overpayment of this section a tax return filed before the last day attributable to the recomputation of the taxpayer's prescribed by law for the filing of such return Article 2 credits, or Section 207 loss, earned, (including any extensions thereof) shall be deemed incurred, or used in the taxable year for which the to have been filed on such last day. notification is given. (f) No claim for refund or credit based on (h) Claim for refund based on net loss. On the taxpayer's taking a credit for estimated tax and after August 23, 2002, no claim for refund shall payments as provided by Section 601(b)(2) or for be allowed to the extent the refund is the result of an any amount paid by a taxpayer pursuant to Section amount of net loss incurred in any taxable year 602(a) or for any amount of credit for tax withheld ending prior to December 31, 2002 under Section pursuant to Article 7 may be filed unless a return 207 of this Act that was not reported to the was filed for the tax year not more than 3 years after Department within 3 years of the due date (including the due date, as provided by Section 505, of the extensions) of the return for the loss year on either return which was required to be filed relative to the the original return filed by the taxpayer or on taxable year for which the payments were made or amended return or to the extent that the refund is the for which the tax was withheld. The changes in this result of an amount of net loss incurred in any subsection (f) made by this amendatory Act of 1987 taxable year under Section 207 for which no return shall apply to all taxable years ending on or after was filed within 3 years of the due date (including December 31, 1969. extensions) of the return for the loss year. (Source: P.A. 91-541, eff. 8-13-99; 92-846, eff. 8-23-02.) (g) Special Period of Limitation with Respect to Net Loss Carrybacks. If the claim for (i) Periods of limitation suspended while refund relates to an overpayment attributable to a net taxpayer is unable to manage financial affairs due to
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disability. In the case of an individual, the running a refund arising from the filing of a joint return, the of the periods specified in this Section shall be taxpayer's spouse. suspended during any period when that individual is (b) In general. Except as provided in financially disabled. subsection (c) of this Section, a tax officer may: For purposes of this subsection (i), an (1) certify to the Director the existence of a individual is financially disabled if that individual is taxpayer's delinquent income tax liability; and unable to manage his or her financial affairs by reason of a medically determinable physical or (2) request the Director to withhold any mental impairment of the individual that can be refund to which the taxpayer is entitled. expected to result in death, or which has lasted or (c) Comity. A tax officer may not certify or can be expected to last for a continuous period of not request the Director to withhold a refund unless the less than 12 months. laws of the claimant state: An individual shall not be treated as (1) allow the Director to certify an income financially disabled during any period when that individual's spouse or any other person is authorized tax liability; to act on behalf of that individual with respect to (2) allow the Director to request the tax financial matters. officer to withhold the taxpayer's tax refund; and Sec. 911.1. (3) provide for the payment of the refund to the State of Illinois. If the Department withholds any refund due under this Act because of any other liability to (d) Certification. A certification by a tax the State and if the return for which such refund is officer to the Director shall include: due is a joint return for a taxable year ending before December 31, 2009, the taxpayer who jointly filed (1) the full name and address of the such return and who is not liable to the State shall taxpayer and any other names known to be used by be entitled to that portion of the refund attributable the taxpayer; to himself or herself. (Source: P.A. 85-473.) (2) the social security number or federal tax Sec. 911.2. Refunds withheld; tax claims identification number of the taxpayer; of other states. (3) the amount of the income tax liability; (a) Definitions. In this Section the and following terms have the meanings indicated. (4) a statement that all administrative and "Claimant state" means any state or the judicial remedies and appeals have been exhausted District of Columbia that requests the withholding or have lapsed and that the assessment of tax, of a refund pursuant to this Section and that extends interest, and penalty has become final. a like comity for the collection of taxes owed to this (e) Notification. As to any taxpayer due a State. refund, the Director shall: "Income tax" means any amount of income (1) notify the taxpayer that a claimant state tax imposed on taxpayers under the laws of the State has provided certification of the existence of an of Illinois or the claimant state, including additions income tax liability; to tax for penalties and interest. (2) inform the taxpayer of the tax liability "Refund" means a refund of overpaid certified, including a detailed statement for each income taxes imposed by the State of Illinois or the taxable year showing tax, interest, and penalty; claimant state. (3) inform the taxpayer that failure to file a "Tax officer" means a unit or official of the protest in accordance with subsection (f) of this claimant state, or the duly authorized agent of that Section shall constitute a waiver of any demand unit or official, charged with the imposition, against this State for the amount certified; assessment, or collection of state income taxes. (3.5) inform the taxpayer that the refund "Taxpayer" means any individual person has been withheld and that the tax liability has been identified by a claimant state under this Section as paid to the claimant state as provided in subsection owing taxes to that claimant state, and in the case of (i) of this Section;
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(4) provide the taxpayer with notice of an (j) Determination that withholding cannot opportunity to request a hearing to challenge the be made. After receiving a certification from a tax certification; and officer, the Director shall notify the claimant state if the Director determines that a withholding cannot be (5) inform the taxpayer that the hearing made. may be requested (i) pursuant to Section 910 of this Act, or (ii) with the tax officer, in accordance with (k) Director's authority. The Director shall the laws of the claimant state. have the authority to enter into agreements with the tax officers of claimant state relating to: (f) Protest of withholding. A taxpayer may protest the withholding of a refund pursuant to (1) procedures and methods to be Section 910 of this Act (except that the protest shall employed by a claimant state with respect to the be filed within 30 days after the date of the operation of this Section; Director's notice of certification pursuant to (2) safeguards against the disclosure or subsection (e) of this Section). inappropriate use of any information obtained or (g) Certification as prima facie evidence. If maintained pursuant to this Section that identifies, the taxpayer requests a hearing pursuant to Section directly or indirectly, a particular taxpayer; 910 of this Act, the certification of the tax officer (3) a minimum tax debt, amounts below shall be prima facie evidence of the correctness of which, in light of administrative expenses and the taxpayer's delinquent income tax liability to the efficiency, shall, in the Director's discretion, not be certifying state. subject to the withholding procedures set forth in (h) Rights of spouses to refunds from joint this Section. returns. If a certification is based upon the tax debt (l) Remedy not exclusive. The collection of only one taxpayer and if the refund is based upon procedures prescribed by this Section are in addition a joint personal income tax return for a taxable year to, and not in substitution for, any other remedy ending before December 31, 2009, the nondebtor available by law. (Source: P.A. 92-492, eff. 1-1-02; spouse shall have the right to: 92-826, eff. 8-21-02.) (1) notification, as provided in subsection Sec. 911.3. Refunds withheld; order of (e) of this Section; honoring requests. (2) protest, as to the withholding of such The Department shall honor refund spouse's share of the refund, as provided in withholding requests in the following order: subsection (f) of this Section; and (1) a refund withholding request to collect (3) payment of his or her share of the an unpaid State tax; refund, provided the amount of the overpayment refunded to the spouse shall not exceed the amount (2) a refund withholding request to collect of the joint overpayment. certified past due child support amounts under Section 2505-650 of the Department of Revenue (i) Withholding and payment of refund. Law of the Civil Administrative Code of Illinois; Upon receipt of a request for withholding in accordance with subsection (b) of this Section, the (3) a refund withholding request to collect Director shall: any debt owed to the State; (1) withhold any refund that is certified by (4) a refund withholding request made by the tax officer; the Secretary of the Treasury of the United States, or his or her delegate, to collect any tax liability (2) pay to the claimant state the entire arising from Title 26 of the United States Code; refund or the amount certified, whichever is less; (4.5) a refund withholding request made by (3) pay any refund in excess of the amount the Secretary of the Treasury of the United States, certified to the taxpayer; and or his or her delegate, to collect any nontax debt (4) if a refund is less than the amount owed to the United States as authorized under certified, withhold amounts from subsequent subsection (i-1) of Section 10 of the Illinois State refunds due the taxpayer, if the laws of the claimant Collection Act of 1986; state provide that the claimant state shall withhold (5) a refund withholding request pursuant subsequent refunds of taxpayers certified to that to Section 911.2 of this Act; and state by the Director.
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(6) a refund withholding request to collect are offered as proof, the Director must certify that certified past due fees owed to the Clerk of the those computer print-outs are true and exact Circuit Court as authorized under Section 2505-655 representations of records properly entered into of the Department of Revenue Law of the Civil standard electronic computing equipment, in the Administrative Code of Illinois. regular course of the Department's business, at or reasonably near the time of the occurrence of the Sec. 912. Recovery Of Erroneous facts recorded, from trustworthy and reliable Refund. information. Such reproduced copy shall, without An erroneous refund shall be considered a further proof, be admitted into evidence before the deficiency of tax on the date made, and shall be Department or in any legal proceeding. deemed assessed and shall be collected as provided Sec. 915. Immunity Of Witnesses. in sections 903 and 904. (Source: P.A. 76-261.) No person shall be excused from testifying Sec. 913. Access To Books And Records. or from producing any books, papers, records or All books and records and other papers and memoranda in any investigation or upon any documents which are required by this Act to be kept hearing, when ordered to do so by the Department shall, at all times during business hours of the day, or any officer or employee thereof, upon the ground be subject to inspection by the Department or its that the testimony or evidence, documentary or duly authorized agents and employees. (Source: otherwise, may tend to incriminate him or subject P.A. 89-399, eff. 8-20-95.) him to a criminal penalty, but no person shall be prosecuted or subjected to any criminal penalty for, Sec. 914. Conduct Of Investigations And or on account of, any transaction made or thing Hearings. concerning which he may testify or produce For the purpose of administering and evidence, documentary or otherwise, before the enforcing the provisions of this Act, the Department, Department or an officer or employee thereof; or any officer or employee of the Department provided, that such immunity shall extend only to a designated, in writing, by the Director may hold natural person who, in obedience to a subpoena, investigations and hearings concerning any matters gives testimony under oath or produces evidence, covered by this Act that are not otherwise delegated documentary or otherwise, under oath. No person so to the Illinois Independent Tax Tribunal, and may testifying shall be exempt from prosecution and examine any books, papers, records or memoranda punishment for perjury committed in so testifying. bearing upon such matters, and may require the (Source: P.A. 76-261.) attendance of any person, or any officer or employee Sec. 916. Production Of Witnesses And of such person, having knowledge of such matters, Records. and may take testimony and require proof for its information. In the conduct of any investigation or (a) Subpoenas. The Department or any hearing, neither the Department nor any officer or officer or employee of the Department designated in employee thereof shall be bound by the technical writing by the Director, shall at its or his or her own rules of evidence, and no informality in any instance, or on the written request of any other party proceeding, or in the manner of taking testimony, to the proceeding, issue subpoenas requiring the shall invalidate any order, decision, rule or attendance of and the giving of testimony by regulation made or approved or confirmed by the witnesses, and subpoenas duces tecum requiring the Department. The Director, or any officer or production of books, papers, records or memoranda. employee of the Department authorized by the All subpoenas and subpoenas duces tecum issued Director shall have power to administer oaths to under this Act may be served by any person of full such persons. The books, papers, records and age. memoranda of the Department, or parts thereof, may (b) Fees. The fees of witnesses for be proved in any hearing, investigation, or legal attendance and travel shall be the same as the fees proceeding by a reproduced copy thereof or by a of witnesses before a Circuit Court of this State, computer print-out of Department records, under the such fees to be paid when the witness is excused certificate of the Director. If reproduced copies of from further attendance. When the witness is the Department's books, papers, records or subpoenaed at the instance of the Department or any memoranda are offered as proof, the Director must officer or employee thereof, such fees shall be paid certify that those copies are true and exact copies of in the same manner as other expenses of the such records on file with the Department. If Department, and when the witness is subpoenaed at computer print-outs of records of the Department
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the instance of any other party to any such (b) Public information. Nothing contained proceeding the Department may require that the cost in this Act shall prevent the Director from of service of the subpoena or subpoenas duces publishing or making available to the public the tecum and the fee of the witness be borne by the names and addresses of persons filing returns under party at whose instance the witness is summoned. In this Act, or from publishing or making available such case, the Department, in its discretion, may reasonable statistics concerning the operation of the require a deposit to cover the cost of such service tax wherein the contents of returns are grouped into and witness fees. A subpoena or subpoena duces aggregates in such a way that the information tecum so issued shall be served in the same manner contained in any individual return shall not be as a subpoena issued out of a court. disclosed. (c) Judicial enforcement. Any Circuit (c) Governmental agencies. The Director Court of this State, upon the application of the may make available to the Secretary of the Treasury Department or any officer or employee thereof, or of the United States or his delegate, or the proper upon the application of any other party to the officer or his delegate of any other state imposing a proceeding may, in its discretion, compel the tax upon or measured by income, for exclusively attendance of witnesses, the production of books, official purposes, information received by the papers, records or memoranda and the giving of Department in the administration of this Act, but testimony before the Department or any officer or such permission shall be granted only if the United employee thereof conducting an investigation or States or such other state, as the case may be, grants holding a hearing not otherwise delegated to the the Department substantially similar privileges. The Illinois Independent Tax Tribunal, by an attachment Director may exchange information with the for contempt, or otherwise, in the same manner as Department of Healthcare and Family Services and production of evidence may be compelled before the the Department of Human Services (acting as Court. successor to the Department of Public Aid under the Department of Human Services Act) for the purpose Sec. 917. Confidentiality and of verifying sources and amounts of income and for information sharing. other purposes directly connected with the (a) Confidentiality. Except as provided in administration of this Act and the Illinois Public Aid this Section, all information received by the Code. The Director may exchange information with Department from returns filed under this Act, or the Director of the Department of Employment from any investigation conducted under the Security for the purpose of verifying sources and provisions of this Act, shall be confidential, except amounts of income and for other purposes directly for official purposes within the Department or connected with the administration of this Act and pursuant to official procedures for collection of any Acts administered by the Department of State tax or pursuant to an investigation or audit by Employment Security. The Director may make the Illinois State Scholarship Commission of a available to the Illinois Industrial Commission delinquent student loan or monetary award or information regarding employers for the purpose of enforcement of any civil or criminal penalty or verifying the insurance coverage required under the sanction imposed by this Act or by another statute Workers' Compensation Act and Workers' imposing a State tax, and any person who divulges Occupational Diseases Act. 1971. The Director may any such information in any manner, except for such exchange information with the Illinois Department purposes and pursuant to order of the Director or in on Aging for the purpose of verifying sources and accordance with a proper judicial order, shall be amounts of income for purposes directly related to guilty of a Class A misdemeanor. However, the confirming eligibility for participation in the provisions of this paragraph are not applicable to (i) programs of benefits authorized by the Senior the Department of Healthcare and Family Services Citizens and Persons with Disabilities Property Tax (formerly Department of Public Aid), State's Relief and Pharmaceutical Assistance Act. The Attorneys, and the Attorney General for child Director may exchange information with the State support enforcement purposes and (ii) a licensed Treasurer's Office and the Department of attorney representing the taxpayer where an appeal Employment Security for the purpose of or a protest has been filed on behalf of the taxpayer. implementing, administering, and enforcing the If it is necessary to file information obtained Illinois Secure Choice Savings Program Act. The pursuant to this Act in a child support enforcement Director may exchange information with the State proceeding, the information shall be filed under seal. Treasurer's Office for the purpose of administering
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the Uniform Disposition of Unclaimed Property Act ending on or after December 31, 1987, the Director or successor Acts. may make available to the Director or principal officer of any Department of the State of Illinois, The Director may make available to any information that a person employed by such State agency, including the Illinois Supreme Court, Department has failed to file returns under this Act which licenses persons to engage in any occupation, or pay the tax, penalty and interest shown therein. information that a person licensed by such agency For purposes of this paragraph, the word has failed to file returns under this Act or pay the "Department" shall have the same meaning as tax, penalty and interest shown therein, or has failed provided in Section of the State Employees Group to pay any final assessment of tax, penalty or interest Insurance Act of 1971. due under this Act. The Director may make available to any State agency, including the Illinois (d) The Director shall make available for Supreme Court, information regarding whether a public inspection in the Department's principal bidder, contractor, or an affiliate of a bidder or office and for publication, at cost, administrative contractor has failed to file returns under this Act or decisions issued on or after January 1, 1995. These pay the tax, penalty, and interest shown therein, or decisions are to be made available in a manner so has failed to pay any final assessment of tax, that the following taxpayer information is not penalty, or interest due under this Act, for the disclosed: limited purpose of enforcing bidder and contractor (1) The names, addresses, and certifications. For purposes of this Section, the term identification numbers of the taxpayer, related "affiliate" means any entity that (1) directly, entities, and employees. indirectly, or constructively controls another entity, (2) is directly, indirectly, or constructively (2) At the sole discretion of the Director, controlled by another entity, or (3) is subject to the trade secrets or other confidential information control of a common entity. For purposes of this identified as such by the taxpayer, no later than 30 subsection (a), an entity controls another entity if it days after receipt of an administrative decision, by owns, directly or individually, more than 10% of the such means as the Department shall provide by rule. voting securities of that entity. As used in this The Director shall determine the appropriate extent subsection (a), the term "voting security" means a of the deletions allowed in paragraph (2). In the security that (1) confers upon the holder the right to event the taxpayer does not submit deletions, the vote for the election of members of the board of Director shall make only the deletions specified in directors or similar governing body of the business paragraph (1). The Director shall make available for or (2) is convertible into, or entitles the holder to public inspection and publication an administrative receive upon its exercise, a security that confers decision within 180 days after the issuance of the such a right to vote. A general partnership interest is administrative decision. The term "administrative a voting security. decision" has the same meaning as defined in Section 3-101 of Article III of the Code of Civil The Director may make available to any Procedure. Costs collected under this Section shall State agency, including the Illinois Supreme Court, be paid into the Tax Compliance and Administration units of local government, and school districts, Fund. information regarding whether a bidder or contractor is an affiliate of a person who is not (e) Nothing contained in this Act shall collecting and remitting Illinois Use taxes, for the prevent the Director from divulging information to limited purpose of enforcing bidder and contractor any person pursuant to a request or authorization certifications. made by the taxpayer, by an authorized representative of the taxpayer, or, in the case of The Director may also make available to information related to a joint return, by the spouse the Secretary of State information that a corporation filing the joint return with the taxpayer. (Source: which has been issued a certificate of incorporation P.A. 89-507, eff. 7-1-97; 90-491, eff. 1-1-98.) by the Secretary of State has failed to file returns under this Act or pay the tax, penalty and interest Sec. 918. Place Of Hearings. shown therein, or has failed to pay any final assessment of tax, penalty or interest due under this All hearings provided for in this Act and not otherwise delegated to the Illinois Independent Act. An assessment is final when all proceedings in Tax Tribunal with respect to or concerning a court for review of such assessment have terminated taxpayer having his residence or commercial or the time for the taking thereof has expired without domicile in this State shall be held at the such proceedings being instituted. For taxable years Department's office nearest to the location of such
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residence or domicile, except that if the taxpayer has (B) rescinding the penalty would promote his residence or commercial domicile in Cook compliance with the requirements of this Act and County, such hearing shall be held in Cook County. effective tax administration. If the taxpayer does not have his residence or A determination made under this commercial domicile in this State, such hearing subparagraph (3) may be reviewed in any shall be held in Cook County. administrative or judicial proceeding. ARTICLE 10. PENALTIES AND INTEREST. (4) Coordination with other penalties. The Sec. 1001. Failure to File Tax Returns. penalty imposed by this subsection is in addition to any penalty imposed by this Act or the Uniform (a) Failure to file tax return. In case of Penalty and Interest Act. The doubling of penalties failure to file any tax return required under this Act and interest authorized by the Illinois Tax on the date prescribed therefor, (determined with Delinquency Amnesty Act (P.A. 93-26) are not regard to any extensions of time for filing) there applicable to the reportable penalties under shall be added as a penalty the amount prescribed by subsection (b). Section 3-3 of the Uniform Penalty and Interest Act. (c) The total penalty imposed under (b) Failure to disclose reportable subsection (b) of this Section with respect to any transaction. Any taxpayer who fails to include on taxable year shall not exceed 10% of the increase in any return or statement any information with respect net income (or reduction in Illinois net loss under to a reportable transaction that is required under Section 207 of this Act) that would result had the Section 501(b) of this Act to be included with such taxpayer not participated in any reportable return or statement shall pay a penalty in the amount transaction affecting its net income for such taxable determined under this subsection. Such penalty shall year. (Source: P.A. 93-840, eff. 7-30-04.) be deemed assessed upon the date of filing of the return for the taxable year in which the taxpayer Sec. 1002. Failure To Pay Tax. participates in the reportable transaction. A taxpayer (a) Negligence. If any part of a deficiency shall not be considered to have complied with the is due to negligence or intentional disregard of rules requirements of Section 501(b) of this Act unless the and regulations (but without intent to defraud) there disclosure statement filed with the Department shall be added to the tax as a penalty the amount includes all of the information required to be prescribed by Section 3-5 of the Uniform Penalty disclosed with respect to a reportable transaction and Interest Act. pursuant to Section 6011 of the Internal Revenue Code, the regulations promulgated under that (b) Fraud. If any part of a deficiency is due statute, and regulations promulgated by the to fraud, there shall be added to the tax as a penalty Department under Section 501(b) of this Act. the amount prescribed by Section 3-6 of the Uniform Penalty and Interest Act. (1) Amount of penalty. Except as provided in paragraph (2), the amount of the penalty under (c) Nonwillful failure to pay withholding this subsection shall be $15,000 for each failure to tax. If any employer, without intent to evade or comply with the requirements of Section 501(b). defeat any tax imposed by this Act or the payment thereof, shall fail to make a return and pay a tax (2) Increase in penalty for listed withheld by him at the time required by or under the transactions. In the case of a failure to comply with provisions of this Act, such employer shall be liable the requirements of Section 501(b) with respect to a for such taxes and shall pay the same together with "listed transaction", the penalty under this the interest and the penalty provided by Sections 3- subsection shall be $30,000 for each failure. 2 and 3-3, respectively, of the Uniform Penalty and (3) Authority to rescind penalty. The Interest Act and such interest and penalty shall not Department may rescind all or any portion of any be charged to or collected from the employee by the penalty imposed by this subsection with respect to employer. any violation, if: (d) Willful failure to collect and pay over (A) the violation is with respect to a tax. Any person required to collect, truthfully reportable transaction other than a listed transaction, account for, and pay over the tax imposed by this and Act who willfully fails to collect such tax or truthfully account for and pay over such tax or willfully attempts in any manner to evade or defeat the tax or the payment thereof, shall, in addition to
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other penalties provided by law, be liable for the and Interest Act for the period from such date to the penalty imposed by Section 3-7 of the Uniform date of payment of such amount, except that if a Penalty and Interest Act. waiver of restrictions under Section 907 on the assessment and collection of such amount has been (e) Penalties assessable. filed, and if notice and demand by the Director for (1) In general. Except as otherwise the payment of such amount is not made within 30 provided in this Act or the Uniform Penalty and days after the filing of such waiver, interest shall not Interest Act, the penalties provided by this Act or by be imposed on such amount for the period beginning the Uniform Penalty and Interest Act shall be paid immediately after such 30th day and ending with the upon notice and demand and shall be assessed, date of notice and demand. collected, and paid in the same manner as taxes and (b) Interest treated as tax. Interest any reference in this Act to the tax imposed by this prescribed under this Section on any tax, including Act shall be deemed also to refer to penalties tax withheld by an employer, or on any penalty, provided by this Act or by the Uniform Penalty and shall be deemed assessed upon the assessment of the Interest Act. tax or penalties to which such interest relates and (2) Procedure for assessing certain shall be collected and paid on notice and demand in penalties. For the purposes of Article 9 any penalty the same manner as tax. Any reference in this Act to under Section 804(a) or Section 1001 shall be the tax imposed by this Act shall be deemed also to deemed assessed upon the filing of the return for the refer to interest imposed by this Section on such tax. taxable year. (c) Exception as to estimated tax. This (3) Procedure for assessing the penalty for Section shall not apply to any failure to pay failure to file withholding returns or annual estimated tax required by Section 803. (Source: P.A. transmittal forms for wage and tax statements. The 87-205.) penalty imposed by Section 1004 will be asserted by Sec. 1004. Failure To File Withholding the Department's issuance of a notice of deficiency. Returns Or Annual If taxpayer files a timely protest, the procedures of Transmittal Forms For Wage Section 908 will be followed. If taxpayer does not And Tax Statements. file a timely protest, the notice of deficiency will constitute an assessment pursuant to subsection (c) In addition to any other penalties imposed of Section 904. by this Act, a taxpayer failing to file a quarterly return or the annual transmittal form for wage and (4) Assessment of penalty under Section tax statements required by Section 704 or 1005(a). The penalty imposed under Section regulations promulgated thereunder shall incur a 1005(a) shall be deemed assessed upon the penalty for each such failure as prescribed by assessment of the tax to which such penalty relates Section 3-3 of the Uniform Penalty and Interest Act. and shall be collected and paid on notice and (Source: P.A. 87-205.) demand in the same manner as the tax. Sec. 1005. Penalty For Underpayment Of (f) Determination of deficiency. For Tax. purposes of subsections (a) and (b), the amount shown as the tax by the taxpayer upon his return (a) In general. If any amount of tax shall be taken into account in determining the required to be shown on a return prescribed by this amount of the deficiency only if such return was Act is not paid on or before the date required for filed on or before the last day prescribed by law for filing such return (determined without regard to any the filing of such return, including any extensions of extension of time to file), a penalty shall be imposed the time for such filing. (Source: P.A. 89-379, eff. in the manner and at the rate prescribed by the 1-1-96.) Uniform Penalty and Interest Act. Sec. 1003. Interest On Deficiencies. (b) Reportable transaction penalty. If a taxpayer has a reportable transaction (a) In general. If any amount of tax understatement for any taxable year, there shall be imposed by this Act, including tax withheld by an added to the tax an amount equal to 20% of the employer, is not paid on or before the date amount of that understatement. This penalty shall be prescribed for payment of such tax (determined deemed assessed upon the assessment of the tax to without regard to any extensions), interest on such which such penalty relates and shall be collected and amount shall be paid in the manner and at the rate prescribed in Section 3-2 of the Uniform Penalty
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paid on notice and demand in the same manner as (i) The relevant facts affecting the tax the tax. treatment of the item are adequately disclosed in accordance with Section 501(b) of this Act. A (1) Reportable transaction understatement. taxpayer failing to adequately disclose in For purposes of this Section, the term "reportable accordance with Section 501(b) shall be treated as transaction understatement" means the sum of meeting the requirements of this subparagraph (i) if subparagraphs (A) and (B): the penalty for that failure was rescinded under (A) The product of (i) the amount of the Section 1001(b)(3) of this Act; increase (if any) in Illinois net income, as (ii) There is or was substantial authority for determined by reference to the amount of post- such treatment; and apportioned income that results from a difference between the proper tax treatment of an item to which (iii) The taxpayer reasonably believed that this subsection applies and the taxpayer's treatment such treatment was more likely than not the proper of that item (as shown on the taxpayer's return of treatment. tax), including an amended return filed prior to the (C) Rules relating to reasonable belief. For date the taxpayer is first contacted by the purposes of subparagraph (B), a taxpayer shall be Department regarding the examination of the return, treated as having a reasonable belief with respect to and (ii) the applicable tax rates under Section 201 of the tax treatment of an item only if such belief meets this Act. the requirements of this subparagraph (C): (B) Special rules in the case of carrybacks (i) Such belief must be based on the facts and carryovers. The penalty for an understatement and law that exist at the time the return of tax that of income attributable to a reportable transaction includes that tax treatment is filed; applies to any portion of an understatement for a year to which a loss, deduction, or credit is carried (ii) Such belief must relate solely to the that is attributable to a reportable transaction for that taxpayer's chances of success on the merits of that year in which the carryback or carryover of the loss, treatment and does not take into account the deduction, or credit arises (the "loss or credit year"). possibility that the return will not be audited, that the treatment will not be raised on audit, or that the (2) Items to which subsection applies. This treatment will be resolved through settlement if it is subsection shall apply to any item which is raised; and attributable to either of the following: (i) any listed transaction as defined in Treasury Regulations (iii) Such belief is not solely based on the Section 1.6011-4, and (ii) any reportable transaction opinion of a disqualified tax advisor or on a as defined in Treasury Regulations Section 1.6011- disqualified opinion. 4 (other than a listed transaction) if a significant purpose of the transaction is the avoidance or (5) Definitions. evasion of federal income tax. (A) Disqualified tax advisor. The term "disqualified tax advisor" is a tax advisor that meets (3) Subsection (b) shall be applied by any of the following conditions: substituting "30%" for "20%" with respect to the portion of any reportable transaction understatement (I) Is a material advisor who participates in with respect to which the requirements of (4)(B)(i) the organization, management, promotion, or sale of of this subsection are not met. the transaction or who is related (within the meaning of Sections 267(b) or 707(b)(1) of the Internal (4) Reasonable cause exception. Revenue Code) to any person who so participates; (A) In general. No penalty shall be imposed under this subsection with respect to any (II) Is compensated directly or indirectly portion of a reportable transaction understatement if by a material advisor with respect to the transaction; it is shown that there was a reasonable cause for (III) Has a fee arrangement with respect to such portion and that the taxpayer acted in good the transaction that is contingent on all or part of the faith with respect to such portion. intended tax benefits from the transaction being sustained; or (B) Special rules. Subparagraph (A) does not apply to any reportable transaction (including (IV) As determined under regulations listed transaction) unless all of the following prescribed by either the Secretary of the Treasury requirements are met: for federal income tax purposes or the Department,
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has a continuing financial interest with respect to the to which such penalty relates and shall be collected transaction. and paid in the same manner as such interest. The penalty imposed by this subsection is in addition to (B) Disqualified opinion. The term any penalty imposed by this Act or the Uniform "disqualified opinion" means an opinion that meets Penalty and Interest Act. For purposes of this any of the following conditions: subsection and subsection (d) of this Section, the (I) Is based on unreasonable factual or legal term "potential tax avoidance transaction" means assumptions (including assumptions as to future any tax shelter as defined in Section 6111 of the events); Internal Revenue Code. This subsection shall apply to taxable years ending on and after December 31, (II) Unreasonably relies on 2004, except that the penalty may also be imposed representations, statements, findings, or agreements with respect to any taxable year for which the of the taxpayer or any other person; limitations period on assessment has not expired as (III) Does not identify and consider all of January 1, 2005 that is attributable to a relevant facts; or transaction in which the taxpayer has entered into after February 28, 2000 and before December 31, (IV) Fails to meet any other requirement as 2004, which transaction becomes a listed either the Secretary of the Treasury for federal transaction (as defined in Treasury Regulations income tax purposes or the Department may Section 1.6011-4(b)(2)) at any time. prescribe. (d) 150% interest rate. For taxable years (C) Material Advisor. The term "material ending on and after July 1, 2002, for any notice of advisor" shall have substantially the same meaning deficiency issued before the taxpayer is contacted by as the same term is defined under Treasury the Internal Revenue Service or the Department Regulations Section 301.6112-1, (26 CFR regarding a potential tax avoidance transaction, the 301.6112-1) and shall include any person that is a taxpayer is subject to interest as provided under material advisor for federal income tax purposes Section 3-2 of the Uniform Penalty and Interest Act, under such regulation. but with respect to any deficiency attributable to a (6) Effective date. This subsection shall potential tax avoidance transaction, the taxpayer is apply to taxable years ending on and after December subject to interest at a rate of 150% of the otherwise 31, 2004, except that a reportable transaction applicable rate. understatement shall include an understatement (as (e) Coordination with other penalties. determined under paragraph (1)) with respect to any Except as provided in regulations, the penalties taxable year for which the limitations period on imposed by this Section are in addition to any other assessment has not expired as of January 1, 2005 penalty imposed by this Act or the Uniform Penalty that is attributable to a transaction which the and Interest Act. The doubling of penalties and taxpayer has entered into after February 28, 2000 interest authorized by the Illinois Tax Delinquency and before December 31, 2004 that becomes a listed Amnesty Act (P.A. 93-26), are not applicable to the transaction (as defined in Treasury Regulations reportable transaction penalties and interest under Section 1.6011-4(b)(2) at any time. subsections (b), (c), and (d). (c) 100% interest penalty. If a taxpayer has (Source: P.A. 87-205.) been contacted by the Internal Revenue Service or the Department regarding the use of a potential tax Sec. 1006. Frivolous Returns. avoidance transaction with respect to a taxable year In addition to any other penalty provided and has a deficiency with respect to such taxable by this Act there is imposed a penalty of $500 upon year or years, there shall be added to the tax any individual who files a purported return that does attributable to the potential tax avoidance not contain information from which the substantial transaction (determined as described in subsection correctness of the stated tax liability can be (b)(1) of Section 1005) an amount equal to 100% of determined or contains information indicating that the interest assessed under the Uniform Penalty and the stated tax liability is substantially incorrect and Interest Act (determined without regard to such conduct is due to a desire to delay or impede subsection (f) of Section 3-2 of such Act) for the the administration of this Act or is due to a position period beginning on the last date prescribed by law that is frivolous. This Section is applicable to returns for the payment of such tax and ending on the date filed for taxable years ending on or after December of the notice of deficiency. Such penalty shall be 31, 1987. (Source: P.A. 85-299.) deemed assessed upon the assessment of the interest
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Sec. 1007. Failure to register tax shelter applied for purposes of this Act, involves a or maintain list. statement described in Section 6700(a)(2)(A) of the Internal Revenue Code, as applied for purposes of (a) Penalty Imposed. Any person that fails this Act, the amount of the penalty imposed under to comply with the requirements of Section 1405.5 this Section shall be the greater of $10,000 or 50% shall incur a penalty as provided in subsection (b). of the gross income received (or to be received) A person shall not be in compliance with the from any person to whom such statement is requirements of Section 1405.5 unless and until the furnished that is required to file a return under required return has been filed and that return Section 502 of this Act. contains all of the information required to be included by the Secretary under federal law. ARTICLE 11. LIENS AND JEOPARDY ASSESSMENT. (b) Amount of Penalty. The following penalties apply: Sec. 1101. Lien For Tax. (1) Except as provided in paragraph (2), the (a) If any person liable to pay any tax penalty imposed under subsection (a) with respect to neglects or refuses to pay the same after demand, the any failure is $15,000. amount (including any interest, additional amount, addition to tax, or assessable penalty, together with (2) If the failure is with respect to a listed any costs that may accrue in addition thereto) shall transaction under subsection (c) of Section 1405.5, be a lien in favor of the State of Illinois upon all the penalty shall be $100,000. property and rights to property, whether real or (3) In the case of each failure to comply personal, belonging to such person. with the requirements of subsection (a) or (b) Unless another date is specifically fixed subsection (b) of Section 1405.6, the penalty shall by law, the lien imposed by subsection (a) of this be $15,000. Section shall arise at the time the assessment is made (4) If the failure is with respect to a listed and shall continue until the liability for the amount transaction under subsection (c) of Section 1405.6, so assessed (or a judgment against the taxpayer the penalty shall be $100,000. arising out of such liability) is satisfied or becomes unenforceable by reason of lapse of time. (c) Authority to rescind penalty. The Department may rescind all or any portion of any (c) Deficiency procedure. If the lien arises penalty imposed by this subsection with respect to from an assessment pursuant to a notice of any violation, if deficiency, such lien shall not attach and the notice referred to in this section shall not be filed until all (1) the violation is with respect to a proceedings in court for review of such assessment reportable transaction other than a listed transaction, have terminated or the time for the taking thereof and has expired without such proceedings being (2) rescinding the penalty would promote instituted. compliance with the requirements of this Act and (d) Notice of lien. The lien created by effective tax administration. assessment shall terminate unless a notice of lien is (d) Coordination with other penalties. The filed, as provided in section 1103 hereof, within 3 penalty imposed by this Section is in addition to any years from the date all proceedings in court for the penalty imposed by this Act or the Uniform Penalty review of such assessment have terminated or the and Interest Act. (Source: P.A. 93-840, eff. 7-30- time for the taking thereof has expired without such 04.) proceedings being instituted. Where the lien results from the filing of a return without payment of the Sec. 1008. Promoting tax shelters. tax or penalty shown therein to be due, the lien shall Except as herein provided, the provisions terminate unless a notice of lien is filed within 3 of Section 6700 of the Internal Revenue Code shall years from the date such return was filed with the apply for purposes of this Act as if such Section Department. For the purposes of this subsection (d), applied to an Illinois deduction, credit, exclusion a tax return filed before the last day prescribed by from income, allocation or apportionment rule, or law, including any extension thereof, shall be other Illinois tax benefit. Notwithstanding Section deemed to have been filed on such last day. The time 6700(a) of the Internal Revenue Code, if an activity limitation period on the Department's right to file a with respect to which a penalty imposed under notice of lien shall not run (1) during any period of Section 6700(a) of the Internal Revenue Code, as time in which the order of any court has the effect of
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enjoining or restraining the Department from filing exists, he may protest within 20 days after being such notice of lien, or (2) during the term of a notified by the Department of the filing of such repayment plan that taxpayer has entered into with jeopardy assessment lien and request a hearing, the Department, as long as taxpayer remains in whereupon the Department shall hold a hearing in compliance with the terms of the repayment plan. conformity with the provisions of section 908 and, pursuant thereto, shall notify the taxpayer of its (Source: P.A. 86-905.) decision as to whether or not such jeopardy Sec. 1102. Jeopardy Assessments. assessment lien will be released. (Source: P.A. 83- 358.) (a) Jeopardy assessment and lien. Sec. 1103. Filing and Priority of Liens. (1) Assessment. If the Department finds that a taxpayer is about to depart from the State, or (a) Filing in the State Tax Lien Registry. to conceal himself or his property, or to do any other Nothing in this Article shall be construed to give the act tending to prejudice or to render wholly or partly Department a preference over the rights of any bona ineffectual proceedings to collect any amount of tax fide purchaser, holder of a security interest, or penalties imposed under this Act unless court mechanics lienor, mortgagee, or judgment lien proceedings are brought without delay, or if the creditor arising prior to the filing of a regular notice Department finds that the collection of such amount of lien or a notice of jeopardy assessment lien in the will be jeopardized by delay, the Department shall State Tax Lien Registry. For purposes of this give the taxpayer notice of such findings and shall Section, the term "bona fide," shall not include any make demand for immediate return and payment of mortgage of real or personal property or any other such amount, whereupon such amount shall be credit transaction that results in the mortgagee or the deemed assessed and shall become immediately due holder of the security acting as trustee for unsecured and payable. creditors of the taxpayer mentioned in the notice of lien who executed such chattel or real property (2) Filing of lien. If the taxpayer, within 5 mortgage or the document evidencing such credit days after such notice (or within such extension of transaction. Such lien shall be inferior to the lien of time as the Department may grant), does not comply general taxes, special assessments and special taxes with such notice or show to the Department that the heretofore or hereafter levied by any political findings in such notice are erroneous, the subdivision of this State. Department may file a notice of jeopardy assessment lien in the State Tax Lien Registry and (b) Filing in the State Tax Lien Registry. In shall notify the taxpayer of such filing. Such case title to land to be affected by the notice of lien jeopardy assessment lien shall have the same scope or notice of jeopardy assessment lien is registered and effect as a statutory lien under this Act. The under the provisions of "An Act concerning land taxpayer is liable for any administrative fee imposed titles," approved May 1, 1897, as amended, such by the Department by rule in connection with the notice shall also be filed in the State Tax Lien State Tax Lien Registry. The filing fees shall be paid Registry, and the Department shall not have a to the Department in addition to payment of the tax, preference over the rights of any bona fide penalty, and interest included in the amount of the purchaser, mortgagee, judgment creditor or other lien. lien holder arising prior to the registration of such notice. (b) Termination of taxable year. In the case of a tax for a current taxable year, the Director shall (c) Index. The Department of Revenue declare the taxable period of the taxpayer shall maintain a State Tax Lien Index of all tax liens immediately terminated and his notice and demand filed in the State Tax Lien Registry as provided for for a return and immediate payment of the tax shall by the State Tax Lien Registration Act. relate to the period declared terminated, including (d) (Blank). therein income accrued and deductions incurred up to the date of termination if not otherwise properly (e) The taxpayer is liable for any filing fees includible or deductible in respect of such taxable imposed by the Department for filing the lien in the year. State Tax Lien Registry and any filing fees imposed by the Department for the release of that lien. The (c) Protest. If the taxpayer believes that he filing fees shall be paid to the Department in does not owe some or all of the amount for which addition to payment of the tax, penalty, and interest the jeopardy assessment lien against him has been included in the amount of the lien. filed, or that no jeopardy to the revenue in fact
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Sec. 1104. Duration Of Lien. (2) to the extent that such lien shall become unenforceable; The lien provided herein shall continue for 20 years from the date of filing the notice of lien (3) to the extent that the amount of such under the provisions of section 1103 unless sooner lien is paid by the person whose property is subject released, or otherwise discharged. The provisions of to such lien, together with any interest and penalty this amendatory Act of 1984 shall apply to any lien which may become due under this Act between the which has not expired on or before the effective date date when the notice of lien is filed and the date of this amendatory Act of 1984. (Source: P.A. 83- when the amount of such lien is paid; 1416.) (4) to the extent that there is furnished to Sec. 1105. Release of Liens. the Department on a form to be approved and with a surety or sureties satisfactory to the Department a (a) In general. Upon payment by the bond that is conditioned upon the payment of the taxpayer to the Department in cash or by guaranteed amount of such lien, together with any interest remittance of an amount representing the filing fees which may become due under this Act after the and charges for the lien and the filing fees and notice of lien is filed, but before the amount thereof charges for the release of that lien, the Department is fully paid; shall release all or any portion of the property subject to any lien provided for in this Act and file (5) to the extent and under the that complete or partial release of lien in the State circumstances specified in this Section. Tax Lien Registry if it determines that the release A certificate of complete or partial release will not endanger or jeopardize the collection of the of any lien shall be held conclusive that the lien amount secured thereby. upon the property covered by the certificate is (b) Judicial determination. If on judicial extinguished to the extent indicated by such review the final judgment of the court is that the certificate. taxpayer does not owe some or all of the amount Such release of lien shall be issued to the secured by the lien against him, or that no jeopardy person, or his agent, against whom the lien was to the revenue exists, the Department shall release obtained and shall contain in legible letters a its lien to the extent of such finding of nonliability, statement as follows: or to the extent of such finding of no jeopardy to the revenue. The taxpayer shall, however, be liable for FOR THE PROTECTION OF THE the filing fee imposed by the Department to file the OWNER, THIS RELEASE SHALL BE lien and the filing fee imposed to release the lien. FILED IN THE STATE TAX LIEN The filing fees shall be paid to the Department. REGISTRY. (c) Payment. The Department shall also (e) Filing. When a certificate of complete release its jeopardy assessment lien against the or partial release of lien issued by the Department is taxpayer whenever the tax and penalty covered by filed in the State Tax Lien Registry, the Department such lien, plus any interest which may be due and an shall permanently attach the certificate of release to amount representing the filing fee to file the lien and the notice of lien or notice of jeopardy assessment the filing fee imposed to release that lien, are paid lien and shall enter the certificate of release and the by the taxpayer to the Department in cash or by date in the "State Tax Lien Index" on the line where guaranteed remittance. the notice of lien or notice of jeopardy assessment lien is entered. (d) Certificate of release. The Department shall issue a certificate of complete or partial release Sec. 1106. Nonliability For Costs. of the lien upon payment by the taxpayer to the Department in cash or by guaranteed remittance of The Department shall not be required to furnish any bond nor to make a deposit for or pay an amount representing the filing fee imposed by the any costs or fees of any court or officer thereof in Department to file the lien and the filing fee imposed any legal proceedings pursuant to the provisions of to release that lien: this Act. (Source: P.A. 83-358; 83-889.) (1) to the extent that the fair market value of any property subject to the lien exceeds the Sec. 1107. Claim To Property. amount of the lien plus the amount of all prior liens Whenever any process, issued from any upon such property; court for the enforcement or collection of any liability created by this Act, shall be levied by any
125 As Amended Through Public Act 100-555
sheriff or other authorized person upon any personal warrant. The term "levy" includes the power of property, and such property shall be claimed by any distraint and seizure by any means. In any case in person other than the defendant as exempt from which the warrant to levy has been issued, the enforcement of a judgment thereon by virtue of the sheriff or other person to whom the warrant was exemption laws of this State, then it shall be the duty directed may seize and sell such property or rights of the person making such claim to give notice in to property. Such warrant shall be returned to the writing of his claim and of his or her intention to Department together with the money collected by prosecute the same, to the sheriff or other person virtue thereof within the time therein specified, within 10 days after the making of the levy. On which shall not be less than 20 nor more than 90 receiving such notice, the sheriff or other person days from the date of the warrant. The sheriff or shall proceed in accordance with the provisions of other person to whom such warrant is directed shall Part 2 of Article XII of the Code of Civil Procedure, proceed in the same manner as prescribed by law in as amended. The giving of such notice within the respect to the enforcement against property upon 10-day period shall be a condition precedent to any judgments by a court, and shall be entitled to the judicial action against the sheriff or other authorized same fees for his services in executing the warrant, person for wrongfully levying, seizing or selling the to be collected in the same manner. The Department, property and any such person who fails to give or some officer, employee or agent designated by it, notice within the time shall be forever barred from is hereby authorized to bid for and purchase any bringing any judicial action against such sheriff or property sold under the provisions hereof. No other person for injury or damages to or conversion proceedings for a levy under this Section shall be of said property. (Source: P.A. 83-346.) commenced more than 20 years after the latest date for filing of the notice of lien under the provisions Sec. 1108. Foreclosure On Real Property. of Section 1103, without regard to whether such In addition to any other remedy provided notice was actually filed. for by the laws of this State, and provided that no Any officer or employee of the Department hearing or proceedings for review provided by this designated in writing by the Director is authorized Act shall be pending, and the time for the taking to serve process under this Section to levy upon thereof shall have expired, the Department may accounts or other intangible assets of a taxpayer held foreclose in the circuit court any lien on real by a financial organization, as defined in Section property for any tax or penalty imposed by this Act 1501 of this Act. In addition to any other provisions to the same extent and in the same manner as in the of this Section, any officer or employee of the enforcement of other liens. Such proceedings to Department designated in writing by the Director foreclose shall not be instituted more than 5 years may levy upon the following property and rights to after the filing of the notice of lien under the property belonging to a taxpayer: contractual provisions of Section 1103. The process, practice payments, accounts and notes receivable and other and procedure for such foreclosure shall be the same evidences of debt, and interest on bonds, by serving as provided in the Civil Practice Law, as amended. a notice of levy on the person making such payment. (Source: P.A. 82-783.) Levy shall not be made until the Department has Sec. 1109. Demand And Seizure. caused a demand to be made on the taxpayer in the manner provided above. In addition to any other In addition to any other remedy provided provisions of this Section, any officer or employee for by the laws of this State, if the tax imposed by of the Department designated in writing by the this Act is not paid within the time required by this Director, may levy upon the salary, wages, Act, the Department, or some person designated by commissions and bonuses of any employee, it, may cause a demand to be made on the taxpayer including officers, employees, or elected officials of for the payment thereof. If such tax remains unpaid the United States as authorized by Section 5520a of for 10 days after such demand has been made and the Government Organization and Employees Act no proceedings have been taken to review the same, (5 U.S.C. 5520a), but not upon the salary or wages the Department may issue a warrant directed to any of officers, employees, or elected officials of any sheriff or other person authorized to serve process, state other than this State, by serving a notice of levy commanding the sheriff or other person to levy upon on the employer, as defined in Section 701(d). Levy the property and rights to property (whether real or shall not be made until the Department has caused a personal, tangible or intangible) of the taxpayer, demand to be made on the employee in the manner without exemption, found within his jurisdiction, for provided above. The provisions of Section 12-803 the payment of the amount thereof with the added of the Code of Civil Procedure relating to maximum penalties, interest and the cost of executing the
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compensation subject to collection under wage of this Act, or as subsequently amended, shall apply deduction orders shall apply to all levies made upon for purposes of this Act as if such sections were set compensation under this Section. To the extent of forth herein in their entirety. (Source: P.A. 76-261.) the amount due on the levy, the employer or other ARTICLE 12. JUDICIAL REVIEW. person making payments to the taxpayer shall hold any non-exempt wages or other payments due or Sec. 1201. Administrative Review Law which subsequently come due. The levy or balance Illinois Independent Tax due thereon is a lien on wages or other payments due Tribunal Act of 2012. at the time of the service of the notice of levy, and such lien shall continue as to subsequent earnings The provisions of the Administrative Review Law, and the rules adopted pursuant thereto, and other payments until the total amount due upon shall apply to and govern all proceedings for the the levy is paid, except that such lien on subsequent judicial review of final actions of the Department earnings or other payments shall terminate sooner if referred to in Sections 908 (d) and 910 (d). Such the employment relationship is terminated or if the notice of levy is rescinded or modified. The final actions shall constitute "administrative employer or other person making payments to the decisions" as defined in Section 3-101 of the Code taxpayer shall file, on or before the return dates of Civil Procedure. stated in the notice of levy (which shall not be more Notwithstanding any other provision of often than bimonthly) a written answer under oath law, on and after July 1, 2013, the provisions of the to interrogatories, setting forth the amount due as Illinois Independent Tax Tribunal Act of 2012, and wages or other payments to the taxpayer for the the rules adopted pursuant thereto, shall apply to and payment periods ending immediately prior to the govern all proceedings for the judicial review of appropriate return date. A lien obtained hereunder final administrative decisions of the Department that shall have priority over any subsequent lien obtained are subject to that Act, as defined in Section 1-70 of pursuant to Section 12-808 of the Code of Civil the Illinois Independent Tax Tribunal Act of 2012. Procedure, except that liens for the support of a spouse or dependent children shall have priority Sec. 1202. Venue. over all liens obtained hereunder. Except as otherwise provided in the Illinois In any case where property or rights to Independent Tax Tribunal Act of 2012, the Circuit property have been seized by an officer of the Court of the county wherein the taxpayer has his Illinois Department of State Police, or successor residence or commercial domicile, or of Cook agency thereto, under the authority of a warrant to County in those cases where the taxpayer does not levy issued by the Department of Revenue, the have his residence or commercial domicile in this Department of Revenue may take possession of and State, shall have power to review all final may sell such property or rights to property and the administrative decisions of the Department in Department of Revenue may contract with third administering the provisions of this Act. persons to conduct sales of such property or rights Sec. 1203. Service, Certification And to the property. In the conduct of such sales, the Dismissal. Department of Revenue shall proceed in the same manner as is prescribed by law for proceeding (a) Service. Service upon the Director or against property to enforce judgments which are the Assistant Director of summons issued in an entered by a circuit court of this State. If, in the action to review a final administrative decision of Department of Revenue's opinion, no offer to the Department shall be service upon the purchase at such sale is acceptable and the State's Department. interest would be better served by retaining the (b) Certification. The Department shall property for sale at a later date, then the Department certify the record of its proceedings if the taxpayer may decline to accept any bid and may retain the pays to it the sum of 75¢ per page of testimony taken property for sale at a later date. (Source: P.A. 89- before the Department and 25¢ per page of all other 399, eff. 8-20-95.) matters contained in such record, except that these Sec. 1110. Redemption By State. charges may be waived where the Department is satisfied that the aggrieved party is a poor person The provisions of sections 5g and 5h of the who cannot afford to pay such charges. Retailers' Occupation Tax Act (relating to time for redemption by the State of real estate sold at judicial (c) Dismissal. If payment for such record is or execution sale) as in effect on the effective date not made by the taxpayer within 30 days after notice from the Department or the Attorney General of the
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cost thereof, the court in which the proceeding is violation of Section 17-1 of the Criminal Code of pending, on motion of the Department, shall dismiss 1961, as amended. Any person whose commercial the complaint and shall enter judgment against the domicile or whose residence is in this State and who taxpayer and in favor of the Department in is charged with a violation under this Section shall accordance with the final action of the Department, be tried in the county where his commercial together with interest on any deficiency to the date domicile or his residence is located unless he asserts of entry of the judgment, and also for costs. (Source: a right to be tried in another venue. A prosecution P.A. 76-261.) for any act in violation of this Section may be commenced at any time within 5 years of the Sec. 1204. Modification Of Assessment. commission of that act. (Source: P.A. 84-221.) An assessment reviewed under this Article ARTICLE 14. MISCELLANEOUS PROVISIONS. shall be deemed confirmed or abated consistent with the final decision in such proceeding. (Source: P.A. Sec. 1401. Promulgation Of Rules And 76-261.) Regulations. ARTICLE 13. CRIMES. (a) In general. The Department is authorized to make, promulgate and enforce such Sec. 1301. Willful And Fraudulent Acts. reasonable rules and regulations, and to prescribe Any person who is subject to the provisions such forms, relating to the administration and of this Act and who willfully fails to file a return, or enforcement of the provisions of this Act, as it may who files a fraudulent return, or who willfully deem appropriate. attempts in any other manner to evade or defeat any (b) Group administration for taxpayers that tax imposed by this Act or the payment thereof, or are members of a unitary business group. any accountant or other agent who knowingly enters false information on the return of any taxpayer (1) For taxable years ending before under this Act, shall, in addition to other penalties, December 31, 1993, the Department shall make, be guilty of a Class 4 felony for the first offense and promulgate and enforce such reasonable rules and a Class 3 felony for each subsequent offense. Any regulations, and prescribe such forms as it may person who is subject to this Act and who willfully deem appropriate, to permit all of the taxpayers that violates any rule or regulation of the Department for are corporations (other than Subchapter S the administration and enforcement of this Act or corporations) having the same taxable year and that who fails to keep books and records as required in are members of the same unitary business group to this Act is, in addition to other penalties, guilty of a elect to be treated as one taxpayer for purposes of Class A misdemeanor. Any person whose any original return, amended return which includes commercial domicile or whose residence is in this the same taxpayers of the unitary group which State and who is charged with a violation under this joined in the election to file the original return, Section shall be tried in the county where his extension, claim for refund, assessment, collection commercial domicile or his residence is located and payment and determination of the group's tax unless he asserts a right to be tried in another venue. liability under this Act. For taxable years ending on A prosecution for any act in violation of this Section or after December 31, 1987, corporate members may be commenced at any time within 5 years of the (other than Subchapter S corporations) of the same commission of that act. (Source: P.A. 88-480; 88- unitary business group making an election to be 669, eff. 11-29-94.) treated as one taxpayer are not required to have the same taxable year. The rules, regulations and forms Sec. 1302. Willful Failure To Pay Over. promulgated under this subsection (b) shall not Any person who accepts money that is due permit the election to be made for some, but not all, to the Department under this Act from a taxpayer for of the purposes enumerated above. the purpose of acting as the taxpayer's agent to make (2) For taxable years ending on or after the payment to the Department, but who willfully December 31, 1993, the Department shall make, fails to remit such payment to the Department when promulgate and enforce such reasonable rules and due, shall be guilty of a Class A misdemeanor. Any regulations, and prescribe such forms as it may such person who purports to make such payment by deem appropriate, to require all taxpayers that are issuing or delivering a check or other order upon a corporations (other than Subchapter S corporations) real or fictitious depository for the payment of and that are members of the same unitary business money, knowing that it will not be paid by the groups to be treated as one taxpayer for purposes of depository, shall be guilty of a deceptive practice in any original return, amended return, which includes
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the same taxpayers of the unitary group which Department may, upon its own motion, substitute joined in filing the original return, extension, claim such legal representative in the proceeding pending for refund, assessment, collection and payment and before the Department for the person who died or determination of the group's tax liability under this became under legal disability. (Source: P.A. 83- Act. 706.) (c) Offset among taxpayers that are Sec. 1404. Appointment Of Secretary Of members of a unitary business group. For taxable State As Agent For Service Of years for which returns were filed prior to the Process. applicable date of Section 502(f), the Department (a) In general. Any person who incurs tax shall make, promulgate and enforce such reasonable liability under this Act, and who removes from this rules and regulations, and prescribe such forms as it State or conceals his whereabouts, shall be deemed may deem appropriate, to permit a taxpayer that is a thereby to appoint the Secretary of State of Illinois member of a unitary business group to elect, within his agent for service of process or notice in any the applicable period of limitation as provided in judicial or administrative proceeding under this Act. Section 911, to credit any overpayment due the Such process or notice shall be served by the taxpayer for a taxable year against the liability for Department on the Secretary of State by leaving, at the same taxable year of one or more other taxpayers the office of the Secretary of State at least 15 days that are members of the same unitary business group before the return day of such process or notice, a true for that taxable year, except that when an audit has and certified copy thereof, and by sending to the been conducted by the Department, overpayments taxpayer by registered or certified mail, a like and determined by the Department to be due a taxpayer true certified copy with an endorsement thereon of may be credited against the liability of one or more the service upon said Secretary of State, addressed other members of the same unitary group for any to such taxpayer at his last known address. year within the period covered by the audit. Such regulations shall include rules which provide that (b) Validity. Service of process or notice in the amount of the overpayment taken as a credit by the manner and under the circumstances provided in a taxpayer under this Section shall be treated, for all this section, shall be of the same force and validity purposes under this Act, as having been paid by such as if served upon the taxpayer personally within this taxpayer at the time such payment was made. State. Proof of such service upon the taxpayer in this (Source: P.A. 88-195.) State through the Secretary of State, his agent, and by mailing to the last known address of the taxpayer Sec. 1402. Notice. may be made in such judicial or administrative Whenever notice is required by this Act, proceeding by the affidavit of the Director, or by his such notice may, if not otherwise provided, be given duly authorized representative who made such or issued by mailing it by first-class mail addressed service, with a copy of the process or notice that was to the person concerned at his last known address. so served attached to such affidavit. (Source: P.A. Notice to a person who is under a legal disability or 76-261.) deceased, shall be mailed to his last known address Sec. 1405. Transferees. or, if the Department has received notice of the existence of a fiduciary for such person or his estate, The liability of a transferee of property of to such fiduciary. (Source: P.A. 76-261.) a taxpayer for any tax, penalty or interest due the Department under this Act, shall be assessed, paid Sec. 1403. Substitution Of Parties. and collected in the same manner and subject to the Whenever any proceeding provided by this same provisions as in the case of the tax to which Act is begun before the Department, either by the the liability relates, except that the period of Department or by a person subject to this Act, and limitations for the issuance of a notice of deficiency such person thereafter dies or becomes a person with respect to such liability shall be as provided in under legal disability before such proceeding is Section 905 (m). The term "transferee" includes concluded, the legal representative of the deceased donee, heir, legatee and distributee and bulk or of the person under legal disability shall notify purchasers under Section 902 (d). (Source: P.A. 84- the Department of such death or legal disability. The 1308.) legal representative, as such, shall then be Sec. 1405.1. Information Reports: substituted by the Department for such person. If the legal representative fails to notify the Department of (a) Rents and royalties. Any person his appointment as such legal representative, the maintaining an office or transacting business in
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Illinois and required under Sections 6041 and (2) the payment is made pursuant to a 6050N of the Internal Revenue Code of 1986 to written contract requiring the rendition of personal report to the U.S. Secretary of the Treasury services; payments made to another person shall not also be (3) the sum of the payment and other required to file with the Department copies of those payments required to be made under the contract reports. The person shall maintain, in a format during the same calendar year by the payor exceed available for review by the Department, copies of $1000; and the reports that include a payment of $1,000 or more which is, in whole or part, for one or more of the (4) the performance of the personal following: services specified in the contract will necessitate the presence at sometime in Illinois of a particular (1) rents and royalties for real property individual or group of individuals; provided that no located in Illinois; reporting will be required if there is certification that (2) rents and royalties for tangible personal the individual or, if appropriate, group of individuals property if the tangible personal property was is composed solely of Illinois residents, and further physically located in Illinois at any time during the provided that no reporting will be required if there rental period; is certification that the individual or, if appropriate, group of individuals is employed by a person (3) royalties paid on a patent which is maintaining an office in Illinois. employed in production, fabrication, manufacturing, or other processing in Illinois; (b) Information required to be maintained. The information to be maintained in a format in (4) royalties paid on a patented product which the information is available for review by the which is produced in Illinois; and Department shall specify the identifying numbers of (5) royalties paid on a copyright to persons receiving the payments made under the compensate the holder of the copyright for printing contract for personal services, the names of the or other publication which originates in Illinois. persons receiving the payments, the addresses of the persons receiving the payments, and the aggregate (b) The Department of Revenue shall amount of payments made to each person. The obtain from the United States Agricultural information shall also specify the identifying Stabilization and Conservation Service and the number, name, and address of the payor. Illinois Department of Agriculture a list of non- resident owners of record of Illinois farmland. The (c) Every person required to maintain Department of Revenue shall utilize this list for the information under subsection (a) shall furnish to purpose of aiding the Department in determining the each person with respect to whom the information is Illinois tax liability under this Act of such non- required a copy of the information maintained for resident owners. (Source: P.A. 89-399, eff. 8-20- Department inspection. 95.) Where the payment is made to a person or Sec. 1405.2. Information Reports For persons other than the individual or group of Payments Made Under individuals whose presence in Illinois was Contracts For Personal necessitated by the contract, the written statement Services: furnished to the payment recipients shall state that such persons shall in turn inform the individuals (a) Payments made on or after January 1, whose presence in Illinois was required, or their 1989, under contracts for personal services. Any employer if such individuals were employed, that person maintaining an office or transacting business the payment has been reported to the Department of in Illinois shall maintain a record, in a format in Revenue. which the record is available to review by the Department, of all payments made under contracts The written statement required under the for personal services. Payments which meet all of preceding sentence shall be furnished to the person the following criteria are considered payments made on or before January 31 of the year following the under contracts for personal services: calendar year for which the report under subsection (a) was required to be made. (1) the payment is made in the ordinary course of the trade or business of the payor; (d) Penalties. Any person required to provide copies of information to persons to whom payments are made under subsection (c) of this
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Section who fails to do so shall be subject to the individuals receiving the prize or award, the written penalty prescribed by Section 3-4 of the Uniform statement furnished to the payment recipients shall Penalty and Interest Act. (Source: P.A. 89-399, eff. state that such persons shall in turn inform the 8-20-95.) individuals receiving the prize or award, or their employer if such individuals were employed, that Sec. 1405.3. Information Reports For the payment has been reported to the Department of Payments Made For Prizes Revenue. And Awards. The written statement required under the (a) Payments made on or after January 1, preceding sentence shall be furnished to the person 1989, for prizes or awards. Any person maintaining on or before January 31 of the year following the an office or transacting business in Illinois shall calendar year for which the report under subsection maintain a record, in a format in which the record is (a) was required to be made. subject to review by the Department, of all payments, whether cash or non-cash, made as prizes (d) Penalties. Any person required to or awards. Payments which meet all of the following provide copies of information to persons to whom criteria are considered payments of prizes or awards: payments are made under subsection (c) of this Section who fails to do so shall be subject to the (1) the payment is made in the ordinary penalty prescribed by Section 3-4 of the Uniform course of the trade or business of the payor, Penalty and Interest Act. (Source: P.A. 89-399, eff. (2) the payment is in complete or partial 8-20-95.) satisfaction of a prize or award in excess of $1000 Sec. 1405.4. Tax Refund Inquiries; won by a particular individual or group of Response. individuals for themselves or their sponsors as a result of their participation and relative The Department of Revenue shall establish performance, or the participation and relative procedures to inform taxpayers of the status of their performance of an animal or motor vehicle which refunds and shall provide a response to each inquiry they own, in any contest staged wholly in Illinois concerning refunds under this Act within 10 days provided that no reporting will be required if there after receiving the inquiry. (Source: P.A. 89-89, eff. is certification that the individual or group of 6-30-95.) individuals receiving the prize or award is composed Sec. 1405.5. Registration of tax shelters. solely of Illinois residents, and further provided that no reporting will be required if there is certification (a) Federal tax shelter. Any material that the individual or group of individuals is advisor required to make a return under Section employed by a person maintaining an office in 6111 of the Internal Revenue Code with respect to a Illinois. reportable transaction shall send a duplicate of the return to the Department not later than the day on (b) Information required to be maintained. which the return is required to be filed under federal The information to be maintained in a format in law. which the information is available for review by the Department shall specify the identifying numbers of (b) (Blank). persons receiving the prize or award, the names of the persons receiving the prize or award, the (c) Transactions subject to this Section. The provisions of this Section apply to any addresses of the persons receiving the prize or reportable transaction having a nexus with this award, and the aggregate amount of payments or the State. For returns that must be filed under this fair market value of the non-cash prize or award received by each person. The information shall also Section on or after January 1, 2008, a reportable specify the identifying number, name, and address transaction has nexus with this State if, at the time the transaction is entered into, the transaction has of the payor. one or more investors that is an Illinois taxpayer. For (c) Every person required to maintain returns that must be filed under this Section prior to information under subsection (a) shall furnish to January 1, 2008, a tax shelter has a nexus with this each person with respect to whom such information State if it satisfies any of the following conditions: is required to be maintained a copy of the (1) is organized in this State; (2) is doing business in information maintained for Department inspection. this State; or (3) is deriving income from sources in this State. Where the payment is made to a person or persons other than the individual or group of
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(d) (Blank). (Source: P.A. 93-840, eff. 7- prescribed for securing proper identification of such 30-04.) other person. Sec. 1405.6. Investor lists. (b) Limitation. (a) Federal abusive tax shelter. Any person (1) Except as provided in paragraph (2), a required to maintain a list under Section 6112 of the return of any person with respect to his liability for Internal Revenue Code shall furnish a duplicate of tax, or any statement or other document in support such list to the Department not later than the earlier thereof, shall not be considered for purposes of of the time such list is required to be furnished to the paragraphs (2) and (3) of subsection (a) as a return, Internal Revenue Service for inspection under statement, or other document with respect to another Section 6112 of the Internal Revenue Code or the person. date of written request by the Department. (2) For purposes of paragraphs (2) and (3) (b) (Blank). of subsection (a), a return of an estate or trust with respect to its liability for tax, and any statement or (c) Transactions subject to this Section. other document in support thereof, shall be The provisions of this Section apply to any considered as a return, statement, or other document reportable transaction having a nexus with this with respect to each beneficiary of such estate or State. For lists that must be filed with the trust. Department on or after January 1, 2008, a reportable transaction has nexus with this State if, at the time (c) Requirement of information. For the transaction is entered into, the transaction has purposes of this section, the Department is one or more investors that is an Illinois taxpayer. For authorized to require such information as may be lists that must be filed with the Department prior to necessary to assign an identifying number to any January 1, 2008, a reportable transaction has nexus person. (Source: P.A. 76-261.) with this State if, at the time the transaction is: Sec. 1407. Amounts Less Than $1. (1) Organized in this State; (a) Payments, refunds, etc. The (2) Doing Business in this State; or Department may by regulations provide that if a total amount of less than $1 is payable, refundable (3) Deriving income from sources in this or creditable, such amount may be disregarded or, State. (Source: P.A. 93-840, eff. 7-30-04.) alternatively, shall be disregarded if it is less than 50 Sec. 1406. Identifying Numbers. cents and shall be increased to $1 if it is 50 cents or more. (a) Supplying of identifying numbers. When required by regulations prescribed by the (b) Rounding. The Department may by Department: regulations provide that any amount which is required to be shown or reported on any return or (1) Inclusion in returns. Any person other document under this Act shall, if such amount required under this Act to make a return, statement, is not a whole-dollar amount, be increased to the or other document shall include in such return, nearest whole-dollar amount in any case where the statement, or other document such identifying fractional part of a dollar is 50 cents or more, and number as may be prescribed for securing proper decreased to the nearest whole-dollar amount where identification of such person. the fractional part of a dollar is less than 50 cents. (2) Furnishing number to other persons. (Source: P.A. 76-261.) Any person with respect to whom a return, Sec. 1408. Administrative Procedure Act - statement, or other document is required under this Application. Act to be made by another person shall furnish to such other person such identifying number as may Except as otherwise provided in the Illinois be prescribed for securing his proper identification. Independent Tax Tribunal Act of 2012, the Illinois Administrative Procedure Act is hereby expressly (3) Furnishing number of another person. adopted and shall apply to all administrative rules Any person required under this Act to make a return, and procedures of the Department of Revenue under statement, or other document with respect to another this Act, except that (1) paragraph (b) of Section 5- person shall request from such other person, and 10 of the Illinois Administrative Procedure Act does shall include in any such return, statement, or other not apply to final orders, decisions and opinions of document, such identifying number as may be the Department, (2) subparagraph (a)2 of Section 5-
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10 of the Illinois Administrative Procedure Act does and who is not required to treat income received not apply to forms established by the Department for from the real estate investment trust as unrelated use under this Act, and (3) the provisions of Section business taxable income under Section 512 of the 10-45 of the Illinois Administrative Procedure Act Internal Revenue Code; regarding proposals for decision are excluded and (c) a listed Australian property trust, if no not applicable to the Department under this Act. more than 50% of the voting power or value of the ARTICLE 15. DEFINITIONS AND RULES OF beneficial interest or shares of that trust, at any time INTERPRETATION. during the last half of the taxable year, is owned or controlled, directly or indirectly, by a single person; Sec. 1501. Definitions. (d) an entity organized as a trust, provided (a) In general. When used in this Act, a listed Australian property trust described in where not otherwise distinctly expressed or subparagraph (c) owns or controls, directly or manifestly incompatible with the intent thereof: indirectly, or constructively, 75% or more of the (1) Business income. The term "business voting power or value of the beneficial interests or income" means all income that may be treated as shares of such entity; or apportionable business income under the (e) an entity that is organized outside of the Constitution of the United States. Business income laws of the United States and that satisfies all of the is net of the deductions allocable thereto. Such term following criteria: does not include compensation or the deductions allocable thereto. For each taxable year beginning (1) at least 75% of the entity's total asset on or after January 1, 2003, a taxpayer may elect to value at the close of its taxable year is represented treat all income other than compensation as business by real estate assets (as defined in Section income. This election shall be made in accordance 856(c)(5)(B) of the Internal Revenue Code, thereby with rules adopted by the Department and, once including shares or certificates of beneficial interest made, shall be irrevocable. in any real estate investment trust), cash and cash equivalents, and U.S. Government securities; (1.5) Captive real estate investment trust: (2) the entity is not subject to tax on (A) The term "captive real estate amounts that are distributed to its beneficial owners investment trust" means a corporation, trust, or or is exempt from entity-level taxation; association: (3) the entity distributes at least 85% of its (i) that is considered a real estate taxable income (as computed in the jurisdiction in investment trust for the taxable year under Section which it is organized) to the holders of its shares or 856 of the Internal Revenue Code; certificates of beneficial interest on an annual basis; (ii) the certificates of beneficial interest or (4) either (i) the shares or beneficial shares of which are not regularly traded on an interests of the entity are regularly traded on an established securities market; and established securities market or (ii) not more than (iii) of which more than 50% of the voting 10% of the voting power or value in the entity is power or value of the beneficial interest or shares, at held, directly, indirectly, or constructively, by a any time during the last half of the taxable year, is single entity or individual; and owned or controlled, directly, indirectly, or (5) the entity is organized in a country that constructively, by a single corporation. has entered into a tax treaty with the United States; (B) The term "captive real estate or investment trust" does not include: (ii) during its first taxable year for which it (i) a real estate investment trust of which elects to be treated as a real estate investment trust more than 50% of the voting power or value of the under Section 856(c)(1) of the Internal Revenue beneficial interest or shares is owned or controlled, Code, a real estate investment trust the certificates directly, indirectly, or constructively, by: of beneficial interest or shares of which are not regularly traded on an established securities market, (a) a real estate investment trust, other than but only if the certificates of beneficial interest or a captive real estate investment trust; shares of the real estate investment trust are (b) a person who is exempt from taxation regularly traded on an established securities market under Section 501 of the Internal Revenue Code, prior to the earlier of the due date (including
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extensions) for filing its return under this Act for credit union, currency exchange, cooperative bank, that first taxable year or the date it actually files that small loan company, sales finance company, return. investment company, or any person which is owned by a bank or bank holding company. For the purpose (C) For the purposes of this subsection of this Section a "person" will include only those (1.5), the constructive ownership rules prescribed persons which a bank holding company may acquire under Section 318(a) of the Internal Revenue Code, and hold an interest in, directly or indirectly, under as modified by Section 856(d)(5) of the Internal the provisions of the Bank Holding Company Act of Revenue Code, apply in determining the ownership 1956 (12 U.S.C. 1841, et seq.), except where of stock, assets, or net profits of any person. interests in any person must be disposed of within (D) For the purposes of this item (1.5), for certain required time limits under the Bank Holding taxable years ending on or after August 16, 2007, Company Act of 1956. the voting power or value of the beneficial interest (B) For purposes of subparagraph (A) of or shares of a real estate investment trust does not this paragraph, the term "bank" includes (i) any include any voting power or value of beneficial entity that is regulated by the Comptroller of the interest or shares in a real estate investment trust Currency under the National Bank Act, or by the held directly or indirectly in a segregated asset Federal Reserve Board, or by the Federal Deposit account by a life insurance company (as described Insurance Corporation and (ii) any federally or State in Section 817 of the Internal Revenue Code) to the chartered bank operating as a credit card bank. extent such voting power or value is for the benefit of entities or persons who are either immune from (C) For purposes of subparagraph (A) of taxation or exempt from taxation under subtitle A of this paragraph, the term "sales finance company" the Internal Revenue Code. has the meaning provided in the following item (i) or (ii): (2) Commercial domicile. The term "commercial domicile" means the principal place (i) A person primarily engaged in one or from which the trade or business of the taxpayer is more of the following businesses: the business of directed or managed. purchasing customer receivables, the business of making loans upon the security of customer (3) Compensation. The term receivables, the business of making loans for the "compensation" means wages, salaries, express purpose of funding purchases of tangible commissions and any other form of remuneration personal property or services by the borrower, or the paid to employees for personal services. business of finance leasing. For purposes of this (4) Corporation. The term "corporation" item (i), "customer receivable" means: includes associations, joint-stock companies, (a) a retail installment contract or retail insurance companies and cooperatives. Any entity, charge agreement within the meaning of the Sales including a limited liability company formed under Finance Agency Act, the Retail Installment Sales the Illinois Limited Liability Company Act, shall be Act, or the Motor Vehicle Retail Installment Sales treated as a corporation if it is so classified for Act; federal income tax purposes. (b) an installment, charge, credit, or similar (5) Department. The term "Department" contract or agreement arising from the sale of means the Department of Revenue of this State. tangible personal property or services in a (6) Director. The term "Director" means transaction involving a deferred payment price the Director of Revenue of this State. payable in one or more installments subsequent to the sale; or (7) Fiduciary. The term "fiduciary" means a guardian, trustee, executor, administrator, (c) the outstanding balance of a contract or receiver, or any person acting in any fiduciary agreement described in provisions (a) or (b) of this capacity for any person. item (i). (8) Financial organization. A customer receivable need not provide for payment of interest on deferred payments. A sales (A) The term "financial organization" finance company may purchase a customer means any bank, bank holding company, trust receivable from, or make a loan secured by a company, savings bank, industrial bank, land bank, customer receivable to, the seller in the original safe deposit company, private banker, savings and transaction or to a person who purchased the loan association, building and loan association,
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customer receivable directly or indirectly from that December 31, 1996, to all original returns, to all seller. amended returns filed no later than 30 days after the effective date of this amendatory Act of 1996, and (ii) A corporation meeting each of the to all notices issued on or before the effective date following criteria: of this amendatory Act of 1996 under subsection (a) (a) the corporation must be a member of an of Section 903, subsection (a) of Section 904, "affiliated group" within the meaning of Section subsection (e) of Section 909, or Section 912. A 1504(a) of the Internal Revenue Code, determined taxpayer that is a "financial organization" that without regard to Section 1504(b) of the Internal engages in any transaction with an affiliate shall be Revenue Code; a "financial organization" for all purposes of this Act. (b) more than 50% of the gross income of the corporation for the taxable year must be interest (E) For all tax years beginning on or before income derived from qualifying loans. A December 31, 1996, a taxpayer that falls within the "qualifying loan" is a loan made to a member of the definition of a "financial organization" under corporation's affiliated group that originates subparagraphs (B) or (C) of this paragraph, but who customer receivables (within the meaning of item does not fall within the definition of a "financial (i)) or to whom customer receivables originated by organization" under the Proposed Regulations a member of the affiliated group have been issued by the Department of Revenue on July 19, transferred, to the extent the average outstanding 1996, may irrevocably elect to apply the Proposed balance of loans from that corporation to members Regulations for all of those years as though the of its affiliated group during the taxable year do not Proposed Regulations had been lawfully exceed the limitation amount for that corporation. promulgated, adopted, and in effect for all of those The "limitation amount" for a corporation is the years. For purposes of applying subparagraphs (B) average outstanding balances during the taxable or (C) of this paragraph to all of those years, the year of customer receivables (within the meaning of election allowed by this subparagraph applies only item (i)) originated by all members of the affiliated to the taxpayer making the election and to those group. If the average outstanding balances of the members of the taxpayer's unitary business group loans made by a corporation to members of its who are ordinarily required to apportion business affiliated group exceed the limitation amount, the income under the same subsection of Section 304 of interest income of that corporation from qualifying this Act as the taxpayer making the election. No loans shall be equal to its interest income from loans election allowed by this subparagraph shall be made to members of its affiliated groups times a fraction under a claim filed under subsection (d) of Section equal to the limitation amount divided by the 909 more than 30 days after the effective date of this average outstanding balances of the loans made by amendatory Act of 1996. that corporation to members of its affiliated group; (F) Finance Leases. For purposes of this (c) the total of all shareholder's equity subsection, a finance lease shall be treated as a loan (including, without limitation, paid-in capital on or other extension of credit, rather than as a lease, common and preferred stock and retained earnings) regardless of how the transaction is characterized for of the corporation plus the total of all of its loans, any other purpose, including the purposes of any advances, and other obligations payable or owed to regulatory agency to which the lessor is subject. A members of its affiliated group may not exceed 20% finance lease is any transaction in the form of a lease of the total assets of the corporation at any time in which the lessee is treated as the owner of the during the tax year; and leased asset entitled to any deduction for depreciation allowed under Section 167 of the (d) more than 50% of all interest-bearing Internal Revenue Code. obligations of the affiliated group payable to persons outside the group determined in accordance with (9) Fiscal year. The term "fiscal year" generally accepted accounting principles must be means an accounting period of 12 months ending on obligations of the corporation. the last day of any month other than December. This amendatory Act of the 91st General (9.5) Fixed place of business. The term Assembly is declaratory of existing law. "fixed place of business" has the same meaning as that term is given in Section 864 of the Internal (D) Subparagraphs (B) and (C) of this Revenue Code and the related Treasury regulations. paragraph are declaratory of existing law and apply retroactively, for all tax years beginning on or before
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(10) Includes and including. The terms (viii) options for the purchase or sale of any "includes" and "including" when used in a definition of the securities, currencies, contracts, or financial contained in this Act shall not be deemed to exclude instruments described in items (i) to (vii), inclusive; other things otherwise within the meaning of the (ix) regulated futures contracts; term defined. (x) commodities (not described in Section (11) Internal Revenue Code. The term 1221(a)(1) of the Internal Revenue Code) or futures, "Internal Revenue Code" means the United States forwards, and options with respect to such Internal Revenue Code of 1954 or any successor law commodities, provided, however, that any item of a or laws relating to federal income taxes in effect for physical commodity to which title is actually the taxable year. acquired in the partnership's capacity as a dealer in (11.5) Investment partnership. such commodity shall not be a qualifying investment security; (A) The term "investment partnership" means any entity that is treated as a partnership for (xi) derivatives; and federal income tax purposes that meets the (xii) a partnership interest in another following requirements: partnership that is an investment partnership. (i) no less than 90% of the partnership's (12) Mathematical error. The term cost of its total assets consists of qualifying "mathematical error" includes the following types of investment securities, deposits at banks or other errors, omissions, or defects in a return filed by a financial institutions, and office space and taxpayer which prevents acceptance of the return as equipment reasonably necessary to carry on its filed for processing: activities as an investment partnership; (A) arithmetic errors or incorrect (ii) no less than 90% of its gross income computations on the return or supporting schedules; consists of interest, dividends, and gains from the sale or exchange of qualifying investment securities; (B) entries on the wrong lines; and (C) omission of required supporting forms (iii) the partnership is not a dealer in or schedules or the omission of the information in qualifying investment securities. whole or in part called for thereon; and (B) For purposes of this paragraph (11.5), (D) an attempt to claim, exclude, deduct, or the term "qualifying investment securities" includes improperly report, in a manner directly contrary to all of the following: the provisions of the Act and regulations thereunder any item of income, exemption, deduction, or credit. (i) common stock, including preferred or debt securities convertible into common stock, and (13) Nonbusiness income. The term preferred stock; "nonbusiness income" means all income other than business income or compensation. (ii) bonds, debentures, and other debt securities; (14) Nonresident. The term "nonresident" means a person who is not a resident. (iii) foreign and domestic currency deposits secured by federal, state, or local (15) Paid, incurred and accrued. The terms governmental agencies; "paid", "incurred" and "accrued" shall be construed according to the method of accounting upon the (iv) mortgage or asset-backed securities basis of which the person's base income is computed secured by federal, state, or local governmental under this Act. agencies; (16) Partnership and partner. The term (v) repurchase agreements and loan "partnership" includes a syndicate, group, pool, joint participations; venture or other unincorporated organization, (vi) foreign currency exchange contracts through or by means of which any business, and forward and futures contracts on foreign financial operation, or venture is carried on, and currencies; which is not, within the meaning of this Act, a trust or estate or a corporation; and the term "partner" (vii) stock and bond index securities and includes a member in such syndicate, group, pool, futures contracts and other similar financial joint venture or organization. securities and futures contracts on those securities;
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The term "partnership" includes any entity, (D) An irrevocable trust, the grantor of including a limited liability company formed under which was domiciled in this State at the time such the Illinois Limited Liability Company Act, trust became irrevocable. For purpose of this classified as a partnership for federal income tax subparagraph, a trust shall be considered irrevocable purposes. to the extent that the grantor is not treated as the owner thereof under Sections 671 through 678 of the The term "partnership" does not include a Internal Revenue Code. syndicate, group, pool, joint venture, or other unincorporated organization established for the sole (21) Sales. The term "sales" means all purpose of playing the Illinois State Lottery. gross receipts of the taxpayer not allocated under Sections 301, 302 and 303. (17) Part-year resident. The term "part-year resident" means an individual who became a (22) State. The term "state" when applied resident during the taxable year or ceased to be a to a jurisdiction other than this State means any state resident during the taxable year. Under Section of the United States, the District of Columbia, the 1501(a)(20)(A)(i) residence commences with Commonwealth of Puerto Rico, any Territory or presence in this State for other than a temporary or Possession of the United States, and any foreign transitory purpose and ceases with absence from this country, or any political subdivision of any of the State for other than a temporary or transitory foregoing. For purposes of the foreign tax credit purpose. Under Section 1501(a)(20)(A)(ii) under Section 601, the term "state" means any state residence commences with the establishment of of the United States, the District of Columbia, the domicile in this State and ceases with the Commonwealth of Puerto Rico, and any territory or establishment of domicile in another State. possession of the United States, or any political subdivision of any of the foregoing, effective for tax (18) Person. The term "person" shall be years ending on or after December 31, 1989. construed to mean and include an individual, a trust, estate, partnership, association, firm, company, (23) Taxable year. The term "taxable year" corporation, limited liability company, or fiduciary. means the calendar year, or the fiscal year ending For purposes of Section 1301 and 1302 of this Act, during such calendar year, upon the basis of which a "person" means (i) an individual, (ii) a corporation, the base income is computed under this Act. (iii) an officer, agent, or employee of a corporation, "Taxable year" means, in the case of a return made (iv) a member, agent or employee of a partnership, for a fractional part of a year under the provisions of or (v) a member, manager, employee, officer, this Act, the period for which such return is made. director, or agent of a limited liability company who (24) Taxpayer. The term "taxpayer" means in such capacity commits an offense specified in any person subject to the tax imposed by this Act. Section 1301 and 1302. (25) International banking facility. The (18A) Records. The term "records" term international banking facility shall have the includes all data maintained by the taxpayer, same meaning as is set forth in the Illinois Banking whether on paper, microfilm, microfiche, or any Act or as is set forth in the laws of the United States type of machine-sensible data compilation. or regulations of the Board of Governors of the (19) Regulations. The term "regulations" Federal Reserve System. includes rules promulgated and forms prescribed by (26) Income Tax Return Preparer. the Department. (A) The term "income tax return preparer" (20) Resident. The term "resident" means: means any person who prepares for compensation, (A) an individual (i) who is in this State for or who employs one or more persons to prepare for other than a temporary or transitory purpose during compensation, any return of tax imposed by this Act the taxable year; or (ii) who is domiciled in this State or any claim for refund of tax imposed by this Act. but is absent from the State for a temporary or The preparation of a substantial portion of a return transitory purpose during the taxable year; or claim for refund shall be treated as the preparation of that return or claim for refund. (B) The estate of a decedent who at his or her death was domiciled in this State; (B) A person is not an income tax return preparer if all he or she does is (C) A trust created by a will of a decedent who at his death was domiciled in this State; and (i) furnish typing, reproducing, or other mechanical assistance;
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(ii) prepare returns or claims for refunds for the steps involved in the production of natural the employer by whom he or she is regularly and resources, which might include exploration, mining, continuously employed; refining, and marketing); and, in either instance, the members are functionally integrated through the (iii) prepare as a fiduciary returns or claims exercise of strong centralized management (where, for refunds for any person; or for example, authority over such matters as (iv) prepare claims for refunds for a purchasing, financing, tax compliance, product line, taxpayer in response to any notice of deficiency personnel, marketing and capital investment is not issued to that taxpayer or in response to any waiver left to each member). of restriction after the commencement of an audit of (B) In no event, for taxable years ending that taxpayer or of another taxpayer if a prior to December 31, 2017, shall any unitary determination in the audit of the other taxpayer business group include members which are directly or indirectly affects the tax liability of the ordinarily required to apportion business income taxpayer whose claims he or she is preparing. under different subsections of Section 304 except (27) Unitary business group. that for tax years ending on or after December 31, 1987 this prohibition shall not apply to a holding (A) The term "unitary business group" company that would otherwise be a member of a means a group of persons related through common unitary business group with taxpayers that apportion ownership whose business activities are integrated business income under any of subsections (b), (c), with, dependent upon and contribute to each other. (c-1), or (d) of Section 304. If a unitary business The group will not include those members whose group would, but for the preceding sentence, include business activity outside the United States is 80% or members that are ordinarily required to apportion more of any such member's total business activity; business income under different subsections of for purposes of this paragraph and clause Section 304, then for each subsection of Section 304 (a)(3)(B)(ii) of Section 304, business activity within for which there are two or more members, there the United States shall be measured by means of the shall be a separate unitary business group composed factors ordinarily applicable under subsections (a), of such members. For purposes of the preceding two (b), (c), (d), or (h) of Section 304 except that, in the sentences, a member is "ordinarily required to case of members ordinarily required to apportion apportion business income" under a particular business income by means of the 3 factor formula of subsection of Section 304 if it would be required to property, payroll and sales specified in subsection use the apportionment method prescribed by such (a) of Section 304, including the formula as subsection except for the fact that it derives business weighted in subsection (h) of Section 304, such income solely from Illinois. As used in this members shall not use the sales factor in the paragraph, for taxable years ending before computation and the results of the property and December 31, 2017, the phrase "United States" payroll factor computations of subsection (a) of means only the 50 states and the District of Section 304 shall be divided by 2 (by one if either Columbia, but does not include any territory or the property or payroll factor has a denominator of possession of the United States or any area over zero). The computation required by the preceding which the United States has asserted jurisdiction or sentence shall, in each case, involve the division of claimed exclusive rights with respect to the the member's property, payroll, or revenue miles in exploration for or exploitation of natural resources. the United States, insurance premiums on property For taxable years ending on or after December 31, or risk in the United States, or financial organization 2017, the phrase "United States", as used in this business income from sources within the United paragraph, means only the 50 states, the District of States, as the case may be, by the respective Columbia, and any area over which the United worldwide figures for such items. Common States has asserted jurisdiction or claimed exclusive ownership in the case of corporations is the direct or rights with respect to the exploration for or indirect control or ownership of more than 50% of exploitation of natural resources, but does not the outstanding voting stock of the persons carrying include any territory or possession of the United on unitary business activity. Unitary business States. activity can ordinarily be illustrated where the activities of the members are: (1) in the same general (C) Holding companies. line (such as manufacturing, wholesaling, retailing (i) For purposes of this subparagraph, a of tangible personal property, insurance, "holding company" is a corporation (other than a transportation or finance); or (2) are steps in a corporation that is a financial organization under vertically structured enterprise or process (such as
138 As Amended Through Public Act 100-555
paragraph (8) of this subsection (a) of Section 1501 the holding company and one or more of the unitary because it is a bank holding company under the business groups, the dependence of the holding provisions of the Bank Holding Company Act of company and one or more of the unitary business 1956 (12 U.S.C. 1841, et seq.) or because it is owned groups upon each other, or the contributions by a bank or a bank holding company) that owns a between the holding company and one or more of controlling interest in one or more other taxpayers the unitary business groups, the holding company ("controlled taxpayers"); that, during the period that may petition the Director, under the procedures includes the taxable year and the 2 immediately provided under Section 304(f), for permission to preceding taxable years or, if the corporation was include all base income and factors of the holding formed during the current or immediately preceding company only with members of a unitary business taxable year, the taxable years in which the group apportioning their business income under one corporation has been in existence, derived subsection of subsections (a), (b), (c), or (d) of substantially all its gross income from dividends, Section 304. If the petition is granted, the holding interest, rents, royalties, fees or other charges company shall be included in a unitary business received from controlled taxpayers for the provision group only with persons apportioning their business of services, and gains on the sale or other disposition income under the selected subsection of Section 304 of interests in controlled taxpayers or in property until the Director grants a petition of the holding leased or licensed to controlled taxpayers or used by company either to be included in more than one the taxpayer in providing services to controlled unitary business group under subparagraph (C) or to taxpayers; and that incurs no substantial expenses include its base income and factors only with other than expenses (including interest and other members of a unitary business group apportioning costs of borrowing) incurred in connection with the their business income under a different subsection acquisition and holding of interests in controlled of Section 304. taxpayers and in the provision of services to (E) If the unitary business group members' controlled taxpayers or in the leasing or licensing of accounting periods differ, the common parent's property to controlled taxpayers. accounting period or, if there is no common parent, (ii) The income of a holding company the accounting period of the member that is which is a member of more than one unitary expected to have, on a recurring basis, the greatest business group shall be included in each unitary Illinois income tax liability must be used to business group of which it is a member on a pro rata determine whether to use the apportionment method basis, by including in each unitary business group provided in subsection (a) or subsection (h) of that portion of the base income of the holding Section 304. The prohibition against membership in company that bears the same proportion to the total a unitary business group for taxpayers ordinarily base income of the holding company as the gross required to apportion income under different receipts of the unitary business group bears to the subsections of Section 304 does not apply to combined gross receipts of all unitary business taxpayers required to apportion income under groups (in both cases without regard to the holding subsection (a) and subsection (h) of Section 304. company) or on any other reasonable basis, The provisions of this amendatory Act of 1998 consistently applied. apply to tax years ending on or after December 31, 1998. (iii) A holding company shall apportion its business income under the subsection of Section 304 (28) Subchapter S corporation. The term used by the other members of its unitary business "Subchapter S corporation" means a corporation for group. The apportionment factors of a holding which there is in effect an election under Section company which would be a member of more than 1362 of the Internal Revenue Code, or for which one unitary business group shall be included with there is a federal election to opt out of the provisions the apportionment factors of each unitary business of the Subchapter S Revision Act of 1982 and have group of which it is a member on a pro rata basis applied instead the prior federal Subchapter S rules using the same method used in clause (ii). as in effect on July 1, 1982. (iv) The provisions of this subparagraph (30) Foreign person. The term "foreign (C) are intended to clarify existing law. person" means any person who is a nonresident alien individual and any nonindividual entity, regardless (D) If including the base income and of where created or organized, whose business factors of a holding company in more than one activity outside the United States is 80% or more of unitary business group under subparagraph (C) does the entity's total business activity. not fairly reflect the degree of integration between
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(b) Other definitions. (1) Words denoting number, gender, and so forth, when used in this Act, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof: (A) Words importing the singular include and apply to several persons, parties or things; (B) Words importing the plural include the singular; and (C) Words importing the masculine gender include the feminine as well. (2) "Company" or "association" as including successors and assigns. The word "company" or "association", when used in reference to a corporation, shall be deemed to embrace the words "successors and assigns of such company or association", and in like manner as if these last- named words, or words of similar import, were expressed. (3) Other terms. Any term used in any Section of this Act with respect to the application of, or in connection with, the provisions of any other Section of this Act shall have the same meaning as in such other Section. (Source: P.A. 95-233, eff. 8- 16-07; 95-707, eff. 1-11-08.) Sec. 1502. Arrangement And Captions. No inference, implication, or presumption of legislative construction shall be drawn or made by reason of the location or grouping of any particular Section or provision of this Act, nor shall any caption be given any legal effect. (Source: P.A. 76-261.) ARTICLE 16. SEVERABILITY. Sec. 1601. Severability. Any clause, sentence, section, provision or part of this Act or the application thereof to any person or circumstance shall be adjudged to be unconstitutional, the remainder of this Act or its application to persons or circumstances other than those to which it is held invalid, shall not be affected thereby. (Source: P.A. 76-261.) ARTICLE 17. EFFECTIVE DATE Sec. 1701. Effective Date. This Act shall take effect August 1, 1969. (Source: P.A. 76-261.)
140 As Amended Through Public Act 100-555