Illinois-2021-HB2889-Introduced

102ND GENERAL ASSEMBLY State of Illinois 2021 and 2022 HB2889

Introduced , by Rep. Adam Niemerg

SYNOPSIS AS INTRODUCED:

35 ILCS 5/201

Amends the Illinois Income Tax Act. Reduces the rate of tax on individuals, trusts, and estates from 4.95% to 3.75%. Effective immediately.

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FISCAL NOTE ACT MAY APPLY

A BILL FOR

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1 AN ACT concerning revenue.

2 Be it enacted by the People of the State of Illinois,

3 represented in the General Assembly:

4 Section 5. The Illinois Income Tax Act is amended by

5 changing Section 201 as follows:

6 (35 ILCS 5/201)

7 (Text of Section without the changes made by P.A. 101-8,

8 which did not take effect (see Section 99 of P.A. 101-8))

9 Sec. 201. Tax imposed.

10 (a) In general. A tax measured by net income is hereby

11 imposed on every individual, corporation, trust and estate for

12 each taxable year ending after July 31, 1969 on the privilege

13 of earning or receiving income in or as a resident of this

14 State. Such tax shall be in addition to all other occupation or

15 privilege taxes imposed by this State or by any municipal

16 corporation or political subdivision thereof.

17 (b) Rates. The tax imposed by subsection (a) of this

18 Section shall be determined as follows, except as adjusted by

19 subsection (d-1):

20 (1) In the case of an individual, trust or estate, for

21 taxable years ending prior to July 1, 1989, an amount

22 equal to 2 1/2% of the taxpayer's net income for the

23 taxable year.

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1 (2) In the case of an individual, trust or estate, for

2 taxable years beginning prior to July 1, 1989 and ending

3 after June 30, 1989, an amount equal to the sum of (i) 2

4 1/2% of the taxpayer's net income for the period prior to

5 July 1, 1989, as calculated under Section 202.3, and (ii)

6 3% of the taxpayer's net income for the period after June

7 30, 1989, as calculated under Section 202.3.

8 (3) In the case of an individual, trust or estate, for

9 taxable years beginning after June 30, 1989, and ending

10 prior to January 1, 2011, an amount equal to 3% of the

11 taxpayer's net income for the taxable year.

12 (4) In the case of an individual, trust, or estate,

13 for taxable years beginning prior to January 1, 2011, and

14 ending after December 31, 2010, an amount equal to the sum

15 of (i) 3% of the taxpayer's net income for the period prior

16 to January 1, 2011, as calculated under Section 202.5, and

17 (ii) 5% of the taxpayer's net income for the period after

18 December 31, 2010, as calculated under Section 202.5.

19 (5) In the case of an individual, trust, or estate,

20 for taxable years beginning on or after January 1, 2011,

21 and ending prior to January 1, 2015, an amount equal to 5%

22 of the taxpayer's net income for the taxable year.

23 (5.1) In the case of an individual, trust, or estate,

24 for taxable years beginning prior to January 1, 2015, and

25 ending after December 31, 2014, an amount equal to the sum

26 of (i) 5% of the taxpayer's net income for the period prior

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1 to January 1, 2015, as calculated under Section 202.5, and

2 (ii) 3.75% of the taxpayer's net income for the period

3 after December 31, 2014, as calculated under Section

4 202.5.

5 (5.2) In the case of an individual, trust, or estate,

6 for taxable years beginning on or after January 1, 2015,

7 and ending prior to July 1, 2017, an amount equal to 3.75%

8 of the taxpayer's net income for the taxable year.

9 (5.3) In the case of an individual, trust, or estate,

10 for taxable years beginning prior to July 1, 2017, and

11 ending after June 30, 2017, an amount equal to the sum of

12 (i) 3.75% of the taxpayer's net income for the period

13 prior to July 1, 2017, as calculated under Section 202.5,

14 and (ii) 4.95% of the taxpayer's net income for the period

15 after June 30, 2017, as calculated under Section 202.5.

16 (5.4) In the case of an individual, trust, or estate,

17 for taxable years beginning on or after July 1, 2017 and

18 ending prior to January 1, 2021, an amount equal to 4.95%

19 of the taxpayer's net income for the taxable year.

20 (5.5) In the case of an individual, trust, or estate,

21 for taxable years beginning prior to January 1, 2021, and

22 ending after December 31, 2020, an amount equal to the sum

23 of (i) 4.95% of the taxpayer's net income for the period

24 prior to January 1, 2021, as calculated under Section

25 202.5, and (ii) 3.75% of the taxpayer's net income for the

26 period after December 31, 2020, as calculated under

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1 Section 202.5.

2 (5.6) In the case of an individual, trust, or estate,

3 for taxable years beginning on or after January 1, 2021,

4 an amount equal to 3.75% of the taxpayer's net income for

5 the taxable year.

6 (6) In the case of a corporation, for taxable years

7 ending prior to July 1, 1989, an amount equal to 4% of the

8 taxpayer's net income for the taxable year.

9 (7) In the case of a corporation, for taxable years

10 beginning prior to July 1, 1989 and ending after June 30,

11 1989, an amount equal to the sum of (i) 4% of the

12 taxpayer's net income for the period prior to July 1,

13 1989, as calculated under Section 202.3, and (ii) 4.8% of

14 the taxpayer's net income for the period after June 30,

15 1989, as calculated under Section 202.3.

16 (8) In the case of a corporation, for taxable years

17 beginning after June 30, 1989, and ending prior to January

18 1, 2011, an amount equal to 4.8% of the taxpayer's net

19 income for the taxable year.

20 (9) In the case of a corporation, for taxable years

21 beginning prior to January 1, 2011, and ending after

22 December 31, 2010, an amount equal to the sum of (i) 4.8%

23 of the taxpayer's net income for the period prior to

24 January 1, 2011, as calculated under Section 202.5, and

25 (ii) 7% of the taxpayer's net income for the period after

26 December 31, 2010, as calculated under Section 202.5.

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1 (10) In the case of a corporation, for taxable years

2 beginning on or after January 1, 2011, and ending prior to

3 January 1, 2015, an amount equal to 7% of the taxpayer's

4 net income for the taxable year.

5 (11) In the case of a corporation, for taxable years

6 beginning prior to January 1, 2015, and ending after

7 December 31, 2014, an amount equal to the sum of (i) 7% of

8 the taxpayer's net income for the period prior to January

9 1, 2015, as calculated under Section 202.5, and (ii) 5.25%

10 of the taxpayer's net income for the period after December

11 31, 2014, as calculated under Section 202.5.

12 (12) In the case of a corporation, for taxable years

13 beginning on or after January 1, 2015, and ending prior to

14 July 1, 2017, an amount equal to 5.25% of the taxpayer's

15 net income for the taxable year.

16 (13) In the case of a corporation, for taxable years

17 beginning prior to July 1, 2017, and ending after June 30,

18 2017, an amount equal to the sum of (i) 5.25% of the

19 taxpayer's net income for the period prior to July 1,

20 2017, as calculated under Section 202.5, and (ii) 7% of

21 the taxpayer's net income for the period after June 30,

22 2017, as calculated under Section 202.5.

23 (14) In the case of a corporation, for taxable years

24 beginning on or after July 1, 2017, an amount equal to 7%

25 of the taxpayer's net income for the taxable year.

26 The rates under this subsection (b) are subject to the

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1 provisions of Section 201.5.

2 (b-5) Surcharge; sale or exchange of assets, properties,

3 and intangibles of organization gaming licensees. For each of

4 taxable years 2019 through 2027, a surcharge is imposed on all

5 taxpayers on income arising from the sale or exchange of

6 capital assets, depreciable business property, real property

7 used in the trade or business, and Section 197 intangibles (i)

8 of an organization licensee under the Illinois Horse Racing

9 Act of 1975 and (ii) of an organization gaming licensee under

10 the Illinois Gambling Act. The amount of the surcharge is

11 equal to the amount of federal income tax liability for the

12 taxable year attributable to those sales and exchanges. The

13 surcharge imposed shall not apply if:

14 (1) the organization gaming license, organization

15 license, or racetrack property is transferred as a result

16 of any of the following:

17 (A) bankruptcy, a receivership, or a debt

18 adjustment initiated by or against the initial

19 licensee or the substantial owners of the initial

20 licensee;

21 (B) cancellation, revocation, or termination of

22 any such license by the Illinois Gaming Board or the

23 Illinois Racing Board;

24 (C) a determination by the Illinois Gaming Board

25 that transfer of the license is in the best interests

26 of Illinois gaming;

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1 (D) the death of an owner of the equity interest in

2 a licensee;

3 (E) the acquisition of a controlling interest in

4 the stock or substantially all of the assets of a

5 publicly traded company;

6 (F) a transfer by a parent company to a wholly

7 owned subsidiary; or

8 (G) the transfer or sale to or by one person to

9 another person where both persons were initial owners

10 of the license when the license was issued; or

11 (2) the controlling interest in the organization

12 gaming license, organization license, or racetrack

13 property is transferred in a transaction to lineal

14 descendants in which no gain or loss is recognized or as a

15 result of a transaction in accordance with Section 351 of

16 the Internal Revenue Code in which no gain or loss is

17 recognized; or

18 (3) live horse racing was not conducted in 2010 at a

19 racetrack located within 3 miles of the Mississippi River

20 under a license issued pursuant to the Illinois Horse

21 Racing Act of 1975.

22 The transfer of an organization gaming license,

23 organization license, or racetrack property by a person other

24 than the initial licensee to receive the organization gaming

25 license is not subject to a surcharge. The Department shall

26 adopt rules necessary to implement and administer this

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1 subsection.

2 (c) Personal Property Tax Replacement Income Tax.

3 Beginning on July 1, 1979 and thereafter, in addition to such

4 income tax, there is also hereby imposed the Personal Property

5 Tax Replacement Income Tax measured by net income on every

6 corporation (including Subchapter S corporations), partnership

7 and trust, for each taxable year ending after June 30, 1979.

8 Such taxes are imposed on the privilege of earning or

9 receiving income in or as a resident of this State. The

10 Personal Property Tax Replacement Income Tax shall be in

11 addition to the income tax imposed by subsections (a) and (b)

12 of this Section and in addition to all other occupation or

13 privilege taxes imposed by this State or by any municipal

14 corporation or political subdivision thereof.

15 (d) Additional Personal Property Tax Replacement Income

16 Tax Rates. The personal property tax replacement income tax

17 imposed by this subsection and subsection (c) of this Section

18 in the case of a corporation, other than a Subchapter S

19 corporation and except as adjusted by subsection (d-1), shall

20 be an additional amount equal to 2.85% of such taxpayer's net

21 income for the taxable year, except that beginning on January

22 1, 1981, and thereafter, the rate of 2.85% specified in this

23 subsection shall be reduced to 2.5%, and in the case of a

24 partnership, trust or a Subchapter S corporation shall be an

25 additional amount equal to 1.5% of such taxpayer's net income

26 for the taxable year.

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1 (d-1) Rate reduction for certain foreign insurers. In the

2 case of a foreign insurer, as defined by Section 35A-5 of the

3 Illinois Insurance Code, whose state or country of domicile

4 imposes on insurers domiciled in Illinois a retaliatory tax

5 (excluding any insurer whose premiums from reinsurance assumed

6 are 50% or more of its total insurance premiums as determined

7 under paragraph (2) of subsection (b) of Section 304, except

8 that for purposes of this determination premiums from

9 reinsurance do not include premiums from inter-affiliate

10 reinsurance arrangements), beginning with taxable years ending

11 on or after December 31, 1999, the sum of the rates of tax

12 imposed by subsections (b) and (d) shall be reduced (but not

13 increased) to the rate at which the total amount of tax imposed

14 under this Act, net of all credits allowed under this Act,

15 shall equal (i) the total amount of tax that would be imposed

16 on the foreign insurer's net income allocable to Illinois for

17 the taxable year by such foreign insurer's state or country of

18 domicile if that net income were subject to all income taxes

19 and taxes measured by net income imposed by such foreign

20 insurer's state or country of domicile, net of all credits

21 allowed or (ii) a rate of zero if no such tax is imposed on

22 such income by the foreign insurer's state of domicile. For

23 the purposes of this subsection (d-1), an inter-affiliate

24 includes a mutual insurer under common management.

25 (1) For the purposes of subsection (d-1), in no event

26 shall the sum of the rates of tax imposed by subsections

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1 (b) and (d) be reduced below the rate at which the sum of:

2 (A) the total amount of tax imposed on such

3 foreign insurer under this Act for a taxable year, net

4 of all credits allowed under this Act, plus

5 (B) the privilege tax imposed by Section 409 of

6 the Illinois Insurance Code, the fire insurance

7 company tax imposed by Section 12 of the Fire

8 Investigation Act, and the fire department taxes

9 imposed under Section 11-10-1 of the Illinois

10 Municipal Code,

11 equals 1.25% for taxable years ending prior to December

12 31, 2003, or 1.75% for taxable years ending on or after

13 December 31, 2003, of the net taxable premiums written for

14 the taxable year, as described by subsection (1) of

15 Section 409 of the Illinois Insurance Code. This paragraph

16 will in no event increase the rates imposed under

17 subsections (b) and (d).

18 (2) Any reduction in the rates of tax imposed by this

19 subsection shall be applied first against the rates

20 imposed by subsection (b) and only after the tax imposed

21 by subsection (a) net of all credits allowed under this

22 Section other than the credit allowed under subsection (i)

23 has been reduced to zero, against the rates imposed by

24 subsection (d).

25 This subsection (d-1) is exempt from the provisions of

26 Section 250.

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1 (e) Investment credit. A taxpayer shall be allowed a

2 credit against the Personal Property Tax Replacement Income

3 Tax for investment in qualified property.

4 (1) A taxpayer shall be allowed a credit equal to .5%

5 of the basis of qualified property placed in service

6 during the taxable year, provided such property is placed

7 in service on or after July 1, 1984. There shall be allowed

8 an additional credit equal to .5% of the basis of

9 qualified property placed in service during the taxable

10 year, provided such property is placed in service on or

11 after July 1, 1986, and the taxpayer's base employment

12 within Illinois has increased by 1% or more over the

13 preceding year as determined by the taxpayer's employment

14 records filed with the Illinois Department of Employment

15 Security. Taxpayers who are new to Illinois shall be

16 deemed to have met the 1% growth in base employment for the

17 first year in which they file employment records with the

18 Illinois Department of Employment Security. The provisions

19 added to this Section by Public Act 85-1200 (and restored

20 by Public Act 87-895) shall be construed as declaratory of

21 existing law and not as a new enactment. If, in any year,

22 the increase in base employment within Illinois over the

23 preceding year is less than 1%, the additional credit

24 shall be limited to that percentage times a fraction, the

25 numerator of which is .5% and the denominator of which is

26 1%, but shall not exceed .5%. The investment credit shall

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1 not be allowed to the extent that it would reduce a

2 taxpayer's liability in any tax year below zero, nor may

3 any credit for qualified property be allowed for any year

4 other than the year in which the property was placed in

5 service in Illinois. For tax years ending on or after

6 December 31, 1987, and on or before December 31, 1988, the

7 credit shall be allowed for the tax year in which the

8 property is placed in service, or, if the amount of the

9 credit exceeds the tax liability for that year, whether it

10 exceeds the original liability or the liability as later

11 amended, such excess may be carried forward and applied to

12 the tax liability of the 5 taxable years following the

13 excess credit years if the taxpayer (i) makes investments

14 which cause the creation of a minimum of 2,000 full-time

15 equivalent jobs in Illinois, (ii) is located in an

16 enterprise zone established pursuant to the Illinois

17 Enterprise Zone Act and (iii) is certified by the

18 Department of Commerce and Community Affairs (now

19 Department of Commerce and Economic Opportunity) as

20 complying with the requirements specified in clause (i)

21 and (ii) by July 1, 1986. The Department of Commerce and

22 Community Affairs (now Department of Commerce and Economic

23 Opportunity) shall notify the Department of Revenue of all

24 such certifications immediately. For tax years ending

25 after December 31, 1988, the credit shall be allowed for

26 the tax year in which the property is placed in service,

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1 or, if the amount of the credit exceeds the tax liability

2 for that year, whether it exceeds the original liability

3 or the liability as later amended, such excess may be

4 carried forward and applied to the tax liability of the 5

5 taxable years following the excess credit years. The

6 credit shall be applied to the earliest year for which

7 there is a liability. If there is credit from more than one

8 tax year that is available to offset a liability, earlier

9 credit shall be applied first.

10 (2) The term "qualified property" means property

11 which:

12 (A) is tangible, whether new or used, including

13 buildings and structural components of buildings and

14 signs that are real property, but not including land

15 or improvements to real property that are not a

16 structural component of a building such as

17 landscaping, sewer lines, local access roads, fencing,

18 parking lots, and other appurtenances;

19 (B) is depreciable pursuant to Section 167 of the

20 Internal Revenue Code, except that "3-year property"

21 as defined in Section 168(c)(2)(A) of that Code is not

22 eligible for the credit provided by this subsection

23 (e);

24 (C) is acquired by purchase as defined in Section

25 179(d) of the Internal Revenue Code;

26 (D) is used in Illinois by a taxpayer who is

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1 primarily engaged in manufacturing, or in mining coal

2 or fluorite, or in retailing, or was placed in service

3 on or after July 1, 2006 in a River Edge Redevelopment

4 Zone established pursuant to the River Edge

5 Redevelopment Zone Act; and

6 (E) has not previously been used in Illinois in

7 such a manner and by such a person as would qualify for

8 the credit provided by this subsection (e) or

9 subsection (f).

10 (3) For purposes of this subsection (e),

11 "manufacturing" means the material staging and production

12 of tangible personal property by procedures commonly

13 regarded as manufacturing, processing, fabrication, or

14 assembling which changes some existing material into new

15 shapes, new qualities, or new combinations. For purposes

16 of this subsection (e) the term "mining" shall have the

17 same meaning as the term "mining" in Section 613(c) of the

18 Internal Revenue Code. For purposes of this subsection

19 (e), the term "retailing" means the sale of tangible

20 personal property for use or consumption and not for

21 resale, or services rendered in conjunction with the sale

22 of tangible personal property for use or consumption and

23 not for resale. For purposes of this subsection (e),

24 "tangible personal property" has the same meaning as when

25 that term is used in the Retailers' Occupation Tax Act,

26 and, for taxable years ending after December 31, 2008,

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1 does not include the generation, transmission, or

2 distribution of electricity.

3 (4) The basis of qualified property shall be the basis

4 used to compute the depreciation deduction for federal

5 income tax purposes.

6 (5) If the basis of the property for federal income

7 tax depreciation purposes is increased after it has been

8 placed in service in Illinois by the taxpayer, the amount

9 of such increase shall be deemed property placed in

10 service on the date of such increase in basis.

11 (6) The term "placed in service" shall have the same

12 meaning as under Section 46 of the Internal Revenue Code.

13 (7) If during any taxable year, any property ceases to

14 be qualified property in the hands of the taxpayer within

15 48 months after being placed in service, or the situs of

16 any qualified property is moved outside Illinois within 48

17 months after being placed in service, the Personal

18 Property Tax Replacement Income Tax for such taxable year

19 shall be increased. Such increase shall be determined by

20 (i) recomputing the investment credit which would have

21 been allowed for the year in which credit for such

22 property was originally allowed by eliminating such

23 property from such computation and, (ii) subtracting such

24 recomputed credit from the amount of credit previously

25 allowed. For the purposes of this paragraph (7), a

26 reduction of the basis of qualified property resulting

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1 from a redetermination of the purchase price shall be

2 deemed a disposition of qualified property to the extent

3 of such reduction.

4 (8) Unless the investment credit is extended by law,

5 the basis of qualified property shall not include costs

6 incurred after December 31, 2018, except for costs

7 incurred pursuant to a binding contract entered into on or

8 before December 31, 2018.

9 (9) Each taxable year ending before December 31, 2000,

10 a partnership may elect to pass through to its partners

11 the credits to which the partnership is entitled under

12 this subsection (e) for the taxable year. A partner may

13 use the credit allocated to him or her under this

14 paragraph only against the tax imposed in subsections (c)

15 and (d) of this Section. If the partnership makes that

16 election, those credits shall be allocated among the

17 partners in the partnership in accordance with the rules

18 set forth in Section 704(b) of the Internal Revenue Code,

19 and the rules promulgated under that Section, and the

20 allocated amount of the credits shall be allowed to the

21 partners for that taxable year. The partnership shall make

22 this election on its Personal Property Tax Replacement

23 Income Tax return for that taxable year. The election to

24 pass through the credits shall be irrevocable.

25 For taxable years ending on or after December 31,

26 2000, a partner that qualifies its partnership for a

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1 subtraction under subparagraph (I) of paragraph (2) of

2 subsection (d) of Section 203 or a shareholder that

3 qualifies a Subchapter S corporation for a subtraction

4 under subparagraph (S) of paragraph (2) of subsection (b)

5 of Section 203 shall be allowed a credit under this

6 subsection (e) equal to its share of the credit earned

7 under this subsection (e) during the taxable year by the

8 partnership or Subchapter S corporation, determined in

9 accordance with the determination of income and

10 distributive share of income under Sections 702 and 704

11 and Subchapter S of the Internal Revenue Code. This

12 paragraph is exempt from the provisions of Section 250.

13 (f) Investment credit; Enterprise Zone; River Edge

14 Redevelopment Zone.

15 (1) A taxpayer shall be allowed a credit against the

16 tax imposed by subsections (a) and (b) of this Section for

17 investment in qualified property which is placed in

18 service in an Enterprise Zone created pursuant to the

19 Illinois Enterprise Zone Act or, for property placed in

20 service on or after July 1, 2006, a River Edge

21 Redevelopment Zone established pursuant to the River Edge

22 Redevelopment Zone Act. For partners, shareholders of

23 Subchapter S corporations, and owners of limited liability

24 companies, if the liability company is treated as a

25 partnership for purposes of federal and State income

26 taxation, there shall be allowed a credit under this

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1 subsection (f) to be determined in accordance with the

2 determination of income and distributive share of income

3 under Sections 702 and 704 and Subchapter S of the

4 Internal Revenue Code. The credit shall be .5% of the

5 basis for such property. The credit shall be available

6 only in the taxable year in which the property is placed in

7 service in the Enterprise Zone or River Edge Redevelopment

8 Zone and shall not be allowed to the extent that it would

9 reduce a taxpayer's liability for the tax imposed by

10 subsections (a) and (b) of this Section to below zero. For

11 tax years ending on or after December 31, 1985, the credit

12 shall be allowed for the tax year in which the property is

13 placed in service, or, if the amount of the credit exceeds

14 the tax liability for that year, whether it exceeds the

15 original liability or the liability as later amended, such

16 excess may be carried forward and applied to the tax

17 liability of the 5 taxable years following the excess

18 credit year. The credit shall be applied to the earliest

19 year for which there is a liability. If there is credit

20 from more than one tax year that is available to offset a

21 liability, the credit accruing first in time shall be

22 applied first.

23 (2) The term qualified property means property which:

24 (A) is tangible, whether new or used, including

25 buildings and structural components of buildings;

26 (B) is depreciable pursuant to Section 167 of the

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1 Internal Revenue Code, except that "3-year property"

2 as defined in Section 168(c)(2)(A) of that Code is not

3 eligible for the credit provided by this subsection

4 (f);

5 (C) is acquired by purchase as defined in Section

6 179(d) of the Internal Revenue Code;

7 (D) is used in the Enterprise Zone or River Edge

8 Redevelopment Zone by the taxpayer; and

9 (E) has not been previously used in Illinois in

10 such a manner and by such a person as would qualify for

11 the credit provided by this subsection (f) or

12 subsection (e).

13 (3) The basis of qualified property shall be the basis

14 used to compute the depreciation deduction for federal

15 income tax purposes.

16 (4) If the basis of the property for federal income

17 tax depreciation purposes is increased after it has been

18 placed in service in the Enterprise Zone or River Edge

19 Redevelopment Zone by the taxpayer, the amount of such

20 increase shall be deemed property placed in service on the

21 date of such increase in basis.

22 (5) The term "placed in service" shall have the same

23 meaning as under Section 46 of the Internal Revenue Code.

24 (6) If during any taxable year, any property ceases to

25 be qualified property in the hands of the taxpayer within

26 48 months after being placed in service, or the situs of

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1 any qualified property is moved outside the Enterprise

2 Zone or River Edge Redevelopment Zone within 48 months

3 after being placed in service, the tax imposed under

4 subsections (a) and (b) of this Section for such taxable

5 year shall be increased. Such increase shall be determined

6 by (i) recomputing the investment credit which would have

7 been allowed for the year in which credit for such

8 property was originally allowed by eliminating such

9 property from such computation, and (ii) subtracting such

10 recomputed credit from the amount of credit previously

11 allowed. For the purposes of this paragraph (6), a

12 reduction of the basis of qualified property resulting

13 from a redetermination of the purchase price shall be

14 deemed a disposition of qualified property to the extent

15 of such reduction.

16 (7) There shall be allowed an additional credit equal

17 to 0.5% of the basis of qualified property placed in

18 service during the taxable year in a River Edge

19 Redevelopment Zone, provided such property is placed in

20 service on or after July 1, 2006, and the taxpayer's base

21 employment within Illinois has increased by 1% or more

22 over the preceding year as determined by the taxpayer's

23 employment records filed with the Illinois Department of

24 Employment Security. Taxpayers who are new to Illinois

25 shall be deemed to have met the 1% growth in base

26 employment for the first year in which they file

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1 employment records with the Illinois Department of

2 Employment Security. If, in any year, the increase in base

3 employment within Illinois over the preceding year is less

4 than 1%, the additional credit shall be limited to that

5 percentage times a fraction, the numerator of which is

6 0.5% and the denominator of which is 1%, but shall not

7 exceed 0.5%.

8 (8) For taxable years beginning on or after January 1,

9 2021, there shall be allowed an Enterprise Zone

10 construction jobs credit against the taxes imposed under

11 subsections (a) and (b) of this Section as provided in

12 Section 13 of the Illinois Enterprise Zone Act.

13 The credit or credits may not reduce the taxpayer's

14 liability to less than zero. If the amount of the credit or

15 credits exceeds the taxpayer's liability, the excess may

16 be carried forward and applied against the taxpayer's

17 liability in succeeding calendar years in the same manner

18 provided under paragraph (4) of Section 211 of this Act.

19 The credit or credits shall be applied to the earliest

20 year for which there is a tax liability. If there are

21 credits from more than one taxable year that are available

22 to offset a liability, the earlier credit shall be applied

23 first.

24 For partners, shareholders of Subchapter S

25 corporations, and owners of limited liability companies,

26 if the liability company is treated as a partnership for

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1 the purposes of federal and State income taxation, there

2 shall be allowed a credit under this Section to be

3 determined in accordance with the determination of income

4 and distributive share of income under Sections 702 and

5 704 and Subchapter S of the Internal Revenue Code.

6 The total aggregate amount of credits awarded under

7 the Blue Collar Jobs Act (Article 20 of Public Act 101-9

8 ~~this amendatory Act of the 101st General Assembly~~) shall

9 not exceed $20,000,000 in any State fiscal year.

10 This paragraph (8) is exempt from the provisions of

11 Section 250.

12 (g) (Blank).

13 (h) Investment credit; High Impact Business.

14 (1) Subject to subsections (b) and (b-5) of Section

15 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall

16 be allowed a credit against the tax imposed by subsections

17 (a) and (b) of this Section for investment in qualified

18 property which is placed in service by a Department of

19 Commerce and Economic Opportunity designated High Impact

20 Business. The credit shall be .5% of the basis for such

21 property. The credit shall not be available (i) until the

22 minimum investments in qualified property set forth in

23 subdivision (a)(3)(A) of Section 5.5 of the Illinois

24 Enterprise Zone Act have been satisfied or (ii) until the

25 time authorized in subsection (b-5) of the Illinois

26 Enterprise Zone Act for entities designated as High Impact

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1 Businesses under subdivisions (a)(3)(B), (a)(3)(C), and

2 (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone

3 Act, and shall not be allowed to the extent that it would

4 reduce a taxpayer's liability for the tax imposed by

5 subsections (a) and (b) of this Section to below zero. The

6 credit applicable to such investments shall be taken in

7 the taxable year in which such investments have been

8 completed. The credit for additional investments beyond

9 the minimum investment by a designated high impact

10 business authorized under subdivision (a)(3)(A) of Section

11 5.5 of the Illinois Enterprise Zone Act shall be available

12 only in the taxable year in which the property is placed in

13 service and shall not be allowed to the extent that it

14 would reduce a taxpayer's liability for the tax imposed by

15 subsections (a) and (b) of this Section to below zero. For

16 tax years ending on or after December 31, 1987, the credit

17 shall be allowed for the tax year in which the property is

18 placed in service, or, if the amount of the credit exceeds

19 the tax liability for that year, whether it exceeds the

20 original liability or the liability as later amended, such

21 excess may be carried forward and applied to the tax

22 liability of the 5 taxable years following the excess

23 credit year. The credit shall be applied to the earliest

24 year for which there is a liability. If there is credit

25 from more than one tax year that is available to offset a

26 liability, the credit accruing first in time shall be

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1 applied first.

2 Changes made in this subdivision (h)(1) by Public Act

3 88-670 restore changes made by Public Act 85-1182 and

4 reflect existing law.

5 (2) The term qualified property means property which:

6 (A) is tangible, whether new or used, including

7 buildings and structural components of buildings;

8 (B) is depreciable pursuant to Section 167 of the

9 Internal Revenue Code, except that "3-year property"

10 as defined in Section 168(c)(2)(A) of that Code is not

11 eligible for the credit provided by this subsection

12 (h);

13 (C) is acquired by purchase as defined in Section

14 179(d) of the Internal Revenue Code; and

15 (D) is not eligible for the Enterprise Zone

16 Investment Credit provided by subsection (f) of this

17 Section.

18 (3) The basis of qualified property shall be the basis

19 used to compute the depreciation deduction for federal

20 income tax purposes.

21 (4) If the basis of the property for federal income

22 tax depreciation purposes is increased after it has been

23 placed in service in a federally designated Foreign Trade

24 Zone or Sub-Zone located in Illinois by the taxpayer, the

25 amount of such increase shall be deemed property placed in

26 service on the date of such increase in basis.

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1 (5) The term "placed in service" shall have the same

2 meaning as under Section 46 of the Internal Revenue Code.

3 (6) If during any taxable year ending on or before

4 December 31, 1996, any property ceases to be qualified

5 property in the hands of the taxpayer within 48 months

6 after being placed in service, or the situs of any

7 qualified property is moved outside Illinois within 48

8 months after being placed in service, the tax imposed

9 under subsections (a) and (b) of this Section for such

10 taxable year shall be increased. Such increase shall be

11 determined by (i) recomputing the investment credit which

12 would have been allowed for the year in which credit for

13 such property was originally allowed by eliminating such

14 property from such computation, and (ii) subtracting such

15 recomputed credit from the amount of credit previously

16 allowed. For the purposes of this paragraph (6), a

17 reduction of the basis of qualified property resulting

18 from a redetermination of the purchase price shall be

19 deemed a disposition of qualified property to the extent

20 of such reduction.

21 (7) Beginning with tax years ending after December 31,

22 1996, if a taxpayer qualifies for the credit under this

23 subsection (h) and thereby is granted a tax abatement and

24 the taxpayer relocates its entire facility in violation of

25 the explicit terms and length of the contract under

26 Section 18-183 of the Property Tax Code, the tax imposed

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1 under subsections (a) and (b) of this Section shall be

2 increased for the taxable year in which the taxpayer

3 relocated its facility by an amount equal to the amount of

4 credit received by the taxpayer under this subsection (h).

5 (h-5) High Impact Business construction ~~constructions~~ jobs

6 credit. For taxable years beginning on or after January 1,

7 2021, there shall also be allowed a High Impact Business

8 construction jobs credit against the tax imposed under

9 subsections (a) and (b) of this Section as provided in

10 subsections (i) and (j) of Section 5.5 of the Illinois

11 Enterprise Zone Act.

12 The credit or credits may not reduce the taxpayer's

13 liability to less than zero. If the amount of the credit or

14 credits exceeds the taxpayer's liability, the excess may be

15 carried forward and applied against the taxpayer's liability

16 in succeeding calendar years in the manner provided under

17 paragraph (4) of Section 211 of this Act. The credit or credits

18 shall be applied to the earliest year for which there is a tax

19 liability. If there are credits from more than one taxable

20 year that are available to offset a liability, the earlier

21 credit shall be applied first.

22 For partners, shareholders of Subchapter S corporations,

23 and owners of limited liability companies, if the liability

24 company is treated as a partnership for the purposes of

25 federal and State income taxation, there shall be allowed a

26 credit under this Section to be determined in accordance with

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1 the determination of income and distributive share of income

2 under Sections 702 and 704 and Subchapter S of the Internal

3 Revenue Code.

4 The total aggregate amount of credits awarded under the

5 Blue Collar Jobs Act (Article 20 of Public Act 101-9 ~~this~~

6 ~~amendatory Act of the 101st General Assembly~~) shall not exceed

7 $20,000,000 in any State fiscal year.

8 This subsection (h-5) is exempt from the provisions of

9 Section 250.

10 (i) Credit for Personal Property Tax Replacement Income

11 Tax. For tax years ending prior to December 31, 2003, a credit

12 shall be allowed against the tax imposed by subsections (a)

13 and (b) of this Section for the tax imposed by subsections (c)

14 and (d) of this Section. This credit shall be computed by

15 multiplying the tax imposed by subsections (c) and (d) of this

16 Section by a fraction, the numerator of which is base income

17 allocable to Illinois and the denominator of which is Illinois

18 base income, and further multiplying the product by the tax

19 rate imposed by subsections (a) and (b) of this Section.

20 Any credit earned on or after December 31, 1986 under this

21 subsection which is unused in the year the credit is computed

22 because it exceeds the tax liability imposed by subsections

23 (a) and (b) for that year (whether it exceeds the original

24 liability or the liability as later amended) may be carried

25 forward and applied to the tax liability imposed by

26 subsections (a) and (b) of the 5 taxable years following the

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1 excess credit year, provided that no credit may be carried

2 forward to any year ending on or after December 31, 2003. This

3 credit shall be applied first to the earliest year for which

4 there is a liability. If there is a credit under this

5 subsection from more than one tax year that is available to

6 offset a liability the earliest credit arising under this

7 subsection shall be applied first.

8 If, during any taxable year ending on or after December

9 31, 1986, the tax imposed by subsections (c) and (d) of this

10 Section for which a taxpayer has claimed a credit under this

11 subsection (i) is reduced, the amount of credit for such tax

12 shall also be reduced. Such reduction shall be determined by

13 recomputing the credit to take into account the reduced tax

14 imposed by subsections (c) and (d). If any portion of the

15 reduced amount of credit has been carried to a different

16 taxable year, an amended return shall be filed for such

17 taxable year to reduce the amount of credit claimed.

18 (j) Training expense credit. Beginning with tax years

19 ending on or after December 31, 1986 and prior to December 31,

20 2003, a taxpayer shall be allowed a credit against the tax

21 imposed by subsections (a) and (b) under this Section for all

22 amounts paid or accrued, on behalf of all persons employed by

23 the taxpayer in Illinois or Illinois residents employed

24 outside of Illinois by a taxpayer, for educational or

25 vocational training in semi-technical or technical fields or

26 semi-skilled or skilled fields, which were deducted from gross

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1 income in the computation of taxable income. The credit

2 against the tax imposed by subsections (a) and (b) shall be

3 1.6% of such training expenses. For partners, shareholders of

4 subchapter S corporations, and owners of limited liability

5 companies, if the liability company is treated as a

6 partnership for purposes of federal and State income taxation,

7 there shall be allowed a credit under this subsection (j) to be

8 determined in accordance with the determination of income and

9 distributive share of income under Sections 702 and 704 and

10 subchapter S of the Internal Revenue Code.

11 Any credit allowed under this subsection which is unused

12 in the year the credit is earned may be carried forward to each

13 of the 5 taxable years following the year for which the credit

14 is first computed until it is used. This credit shall be

15 applied first to the earliest year for which there is a

16 liability. If there is a credit under this subsection from

17 more than one tax year that is available to offset a liability,

18 the earliest credit arising under this subsection shall be

19 applied first. No carryforward credit may be claimed in any

20 tax year ending on or after December 31, 2003.

21 (k) Research and development credit. For tax years ending

22 after July 1, 1990 and prior to December 31, 2003, and

23 beginning again for tax years ending on or after December 31,

24 2004, and ending prior to January 1, 2027, a taxpayer shall be

25 allowed a credit against the tax imposed by subsections (a)

26 and (b) of this Section for increasing research activities in

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1 this State. The credit allowed against the tax imposed by

2 subsections (a) and (b) shall be equal to 6 1/2% of the

3 qualifying expenditures for increasing research activities in

4 this State. For partners, shareholders of subchapter S

5 corporations, and owners of limited liability companies, if

6 the liability company is treated as a partnership for purposes

7 of federal and State income taxation, there shall be allowed a

8 credit under this subsection to be determined in accordance

9 with the determination of income and distributive share of

10 income under Sections 702 and 704 and subchapter S of the

11 Internal Revenue Code.

12 For purposes of this subsection, "qualifying expenditures"

13 means the qualifying expenditures as defined for the federal

14 credit for increasing research activities which would be

15 allowable under Section 41 of the Internal Revenue Code and

16 which are conducted in this State, "qualifying expenditures

17 for increasing research activities in this State" means the

18 excess of qualifying expenditures for the taxable year in

19 which incurred over qualifying expenditures for the base

20 period, "qualifying expenditures for the base period" means

21 the average of the qualifying expenditures for each year in

22 the base period, and "base period" means the 3 taxable years

23 immediately preceding the taxable year for which the

24 determination is being made.

25 Any credit in excess of the tax liability for the taxable

26 year may be carried forward. A taxpayer may elect to have the

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1 unused credit shown on its final completed return carried over

2 as a credit against the tax liability for the following 5

3 taxable years or until it has been fully used, whichever

4 occurs first; provided that no credit earned in a tax year

5 ending prior to December 31, 2003 may be carried forward to any

6 year ending on or after December 31, 2003.

7 If an unused credit is carried forward to a given year from

8 2 or more earlier years, that credit arising in the earliest

9 year will be applied first against the tax liability for the

10 given year. If a tax liability for the given year still

11 remains, the credit from the next earliest year will then be

12 applied, and so on, until all credits have been used or no tax

13 liability for the given year remains. Any remaining unused

14 credit or credits then will be carried forward to the next

15 following year in which a tax liability is incurred, except

16 that no credit can be carried forward to a year which is more

17 than 5 years after the year in which the expense for which the

18 credit is given was incurred.

19 No inference shall be drawn from Public Act 91-644 ~~this~~

20 ~~amendatory Act of the 91st General Assembly~~ in construing this

21 Section for taxable years beginning before January 1, 1999.

22 It is the intent of the General Assembly that the research

23 and development credit under this subsection (k) shall apply

24 continuously for all tax years ending on or after December 31,

25 2004 and ending prior to January 1, 2027, including, but not

26 limited to, the period beginning on January 1, 2016 and ending

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1 on July 6, 2017 (the effective date of Public Act 100-22) ~~this~~

2 ~~amendatory Act of the 100th General Assembly~~. All actions

3 taken in reliance on the continuation of the credit under this

4 subsection (k) by any taxpayer are hereby validated.

5 (l) Environmental Remediation Tax Credit.

6 (i) For tax years ending after December 31, 1997 and

7 on or before December 31, 2001, a taxpayer shall be

8 allowed a credit against the tax imposed by subsections

9 (a) and (b) of this Section for certain amounts paid for

10 unreimbursed eligible remediation costs, as specified in

11 this subsection. For purposes of this Section,

12 "unreimbursed eligible remediation costs" means costs

13 approved by the Illinois Environmental Protection Agency

14 ("Agency") under Section 58.14 of the Environmental

15 Protection Act that were paid in performing environmental

16 remediation at a site for which a No Further Remediation

17 Letter was issued by the Agency and recorded under Section

18 58.10 of the Environmental Protection Act. The credit must

19 be claimed for the taxable year in which Agency approval

20 of the eligible remediation costs is granted. The credit

21 is not available to any taxpayer if the taxpayer or any

22 related party caused or contributed to, in any material

23 respect, a release of regulated substances on, in, or

24 under the site that was identified and addressed by the

25 remedial action pursuant to the Site Remediation Program

26 of the Environmental Protection Act. After the Pollution

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1 Control Board rules are adopted pursuant to the Illinois

2 Administrative Procedure Act for the administration and

3 enforcement of Section 58.9 of the Environmental

4 Protection Act, determinations as to credit availability

5 for purposes of this Section shall be made consistent with

6 those rules. For purposes of this Section, "taxpayer"

7 includes a person whose tax attributes the taxpayer has

8 succeeded to under Section 381 of the Internal Revenue

9 Code and "related party" includes the persons disallowed a

10 deduction for losses by paragraphs (b), (c), and (f)(1) of

11 Section 267 of the Internal Revenue Code by virtue of

12 being a related taxpayer, as well as any of its partners.

13 The credit allowed against the tax imposed by subsections

14 (a) and (b) shall be equal to 25% of the unreimbursed

15 eligible remediation costs in excess of $100,000 per site,

16 except that the $100,000 threshold shall not apply to any

17 site contained in an enterprise zone as determined by the

18 Department of Commerce and Community Affairs (now

19 Department of Commerce and Economic Opportunity). The

20 total credit allowed shall not exceed $40,000 per year

21 with a maximum total of $150,000 per site. For partners

22 and shareholders of subchapter S corporations, there shall

23 be allowed a credit under this subsection to be determined

24 in accordance with the determination of income and

25 distributive share of income under Sections 702 and 704

26 and subchapter S of the Internal Revenue Code.

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1 (ii) A credit allowed under this subsection that is

2 unused in the year the credit is earned may be carried

3 forward to each of the 5 taxable years following the year

4 for which the credit is first earned until it is used. The

5 term "unused credit" does not include any amounts of

6 unreimbursed eligible remediation costs in excess of the

7 maximum credit per site authorized under paragraph (i).

8 This credit shall be applied first to the earliest year

9 for which there is a liability. If there is a credit under

10 this subsection from more than one tax year that is

11 available to offset a liability, the earliest credit

12 arising under this subsection shall be applied first. A

13 credit allowed under this subsection may be sold to a

14 buyer as part of a sale of all or part of the remediation

15 site for which the credit was granted. The purchaser of a

16 remediation site and the tax credit shall succeed to the

17 unused credit and remaining carry-forward period of the

18 seller. To perfect the transfer, the assignor shall record

19 the transfer in the chain of title for the site and provide

20 written notice to the Director of the Illinois Department

21 of Revenue of the assignor's intent to sell the

22 remediation site and the amount of the tax credit to be

23 transferred as a portion of the sale. In no event may a

24 credit be transferred to any taxpayer if the taxpayer or a

25 related party would not be eligible under the provisions

26 of subsection (i).

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1 (iii) For purposes of this Section, the term "site"

2 shall have the same meaning as under Section 58.2 of the

3 Environmental Protection Act.

4 (m) Education expense credit. Beginning with tax years

5 ending after December 31, 1999, a taxpayer who is the

6 custodian of one or more qualifying pupils shall be allowed a

7 credit against the tax imposed by subsections (a) and (b) of

8 this Section for qualified education expenses incurred on

9 behalf of the qualifying pupils. The credit shall be equal to

10 25% of qualified education expenses, but in no event may the

11 total credit under this subsection claimed by a family that is

12 the custodian of qualifying pupils exceed (i) $500 for tax

13 years ending prior to December 31, 2017, and (ii) $750 for tax

14 years ending on or after December 31, 2017. In no event shall a

15 credit under this subsection reduce the taxpayer's liability

16 under this Act to less than zero. Notwithstanding any other

17 provision of law, for taxable years beginning on or after

18 January 1, 2017, no taxpayer may claim a credit under this

19 subsection (m) if the taxpayer's adjusted gross income for the

20 taxable year exceeds (i) $500,000, in the case of spouses

21 filing a joint federal tax return or (ii) $250,000, in the case

22 of all other taxpayers. This subsection is exempt from the

23 provisions of Section 250 of this Act.

24 For purposes of this subsection:

25 "Qualifying pupils" means individuals who (i) are

26 residents of the State of Illinois, (ii) are under the age of

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1 21 at the close of the school year for which a credit is

2 sought, and (iii) during the school year for which a credit is

3 sought were full-time pupils enrolled in a kindergarten

4 through twelfth grade education program at any school, as

5 defined in this subsection.

6 "Qualified education expense" means the amount incurred on

7 behalf of a qualifying pupil in excess of $250 for tuition,

8 book fees, and lab fees at the school in which the pupil is

9 enrolled during the regular school year.

10 "School" means any public or nonpublic elementary or

11 secondary school in Illinois that is in compliance with Title

12 VI of the Civil Rights Act of 1964 and attendance at which

13 satisfies the requirements of Section 26-1 of the School Code,

14 except that nothing shall be construed to require a child to

15 attend any particular public or nonpublic school to qualify

16 for the credit under this Section.

17 "Custodian" means, with respect to qualifying pupils, an

18 Illinois resident who is a parent, the parents, a legal

19 guardian, or the legal guardians of the qualifying pupils.

20 (n) River Edge Redevelopment Zone site remediation tax

21 credit.

22 (i) For tax years ending on or after December 31,

23 2006, a taxpayer shall be allowed a credit against the tax

24 imposed by subsections (a) and (b) of this Section for

25 certain amounts paid for unreimbursed eligible remediation

26 costs, as specified in this subsection. For purposes of

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1 this Section, "unreimbursed eligible remediation costs"

2 means costs approved by the Illinois Environmental

3 Protection Agency ("Agency") under Section 58.14a of the

4 Environmental Protection Act that were paid in performing

5 environmental remediation at a site within a River Edge

6 Redevelopment Zone for which a No Further Remediation

7 Letter was issued by the Agency and recorded under Section

8 58.10 of the Environmental Protection Act. The credit must

9 be claimed for the taxable year in which Agency approval

10 of the eligible remediation costs is granted. The credit

11 is not available to any taxpayer if the taxpayer or any

12 related party caused or contributed to, in any material

13 respect, a release of regulated substances on, in, or

14 under the site that was identified and addressed by the

15 remedial action pursuant to the Site Remediation Program

16 of the Environmental Protection Act. Determinations as to

17 credit availability for purposes of this Section shall be

18 made consistent with rules adopted by the Pollution

19 Control Board pursuant to the Illinois Administrative

20 Procedure Act for the administration and enforcement of

21 Section 58.9 of the Environmental Protection Act. For

22 purposes of this Section, "taxpayer" includes a person

23 whose tax attributes the taxpayer has succeeded to under

24 Section 381 of the Internal Revenue Code and "related

25 party" includes the persons disallowed a deduction for

26 losses by paragraphs (b), (c), and (f)(1) of Section 267

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1 of the Internal Revenue Code by virtue of being a related

2 taxpayer, as well as any of its partners. The credit

3 allowed against the tax imposed by subsections (a) and (b)

4 shall be equal to 25% of the unreimbursed eligible

5 remediation costs in excess of $100,000 per site.

6 (ii) A credit allowed under this subsection that is

7 unused in the year the credit is earned may be carried

8 forward to each of the 5 taxable years following the year

9 for which the credit is first earned until it is used. This

10 credit shall be applied first to the earliest year for

11 which there is a liability. If there is a credit under this

12 subsection from more than one tax year that is available

13 to offset a liability, the earliest credit arising under

14 this subsection shall be applied first. A credit allowed

15 under this subsection may be sold to a buyer as part of a

16 sale of all or part of the remediation site for which the

17 credit was granted. The purchaser of a remediation site

18 and the tax credit shall succeed to the unused credit and

19 remaining carry-forward period of the seller. To perfect

20 the transfer, the assignor shall record the transfer in

21 the chain of title for the site and provide written notice

22 to the Director of the Illinois Department of Revenue of

23 the assignor's intent to sell the remediation site and the

24 amount of the tax credit to be transferred as a portion of

25 the sale. In no event may a credit be transferred to any

26 taxpayer if the taxpayer or a related party would not be

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1 eligible under the provisions of subsection (i).

2 (iii) For purposes of this Section, the term "site"

3 shall have the same meaning as under Section 58.2 of the

4 Environmental Protection Act.

5 (o) For each of taxable years during the Compassionate Use

6 of Medical Cannabis Program, a surcharge is imposed on all

7 taxpayers on income arising from the sale or exchange of

8 capital assets, depreciable business property, real property

9 used in the trade or business, and Section 197 intangibles of

10 an organization registrant under the Compassionate Use of

11 Medical Cannabis Program Act. The amount of the surcharge is

12 equal to the amount of federal income tax liability for the

13 taxable year attributable to those sales and exchanges. The

14 surcharge imposed does not apply if:

15 (1) the medical cannabis cultivation center

16 registration, medical cannabis dispensary registration, or

17 the property of a registration is transferred as a result

18 of any of the following:

19 (A) bankruptcy, a receivership, or a debt

20 adjustment initiated by or against the initial

21 registration or the substantial owners of the initial

22 registration;

23 (B) cancellation, revocation, or termination of

24 any registration by the Illinois Department of Public

25 Health;

26 (C) a determination by the Illinois Department of

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1 Public Health that transfer of the registration is in

2 the best interests of Illinois qualifying patients as

3 defined by the Compassionate Use of Medical Cannabis

4 Program Act;

5 (D) the death of an owner of the equity interest in

6 a registrant;

7 (E) the acquisition of a controlling interest in

8 the stock or substantially all of the assets of a

9 publicly traded company;

10 (F) a transfer by a parent company to a wholly

11 owned subsidiary; or

12 (G) the transfer or sale to or by one person to

13 another person where both persons were initial owners

14 of the registration when the registration was issued;

15 or

16 (2) the cannabis cultivation center registration,

17 medical cannabis dispensary registration, or the

18 controlling interest in a registrant's property is

19 transferred in a transaction to lineal descendants in

20 which no gain or loss is recognized or as a result of a

21 transaction in accordance with Section 351 of the Internal

22 Revenue Code in which no gain or loss is recognized.

23 (Source: P.A. 100-22, eff. 7-6-17; 101-9, eff. 6-5-19; 101-31,

24 eff. 6-28-19; 101-207, eff. 8-2-19; 101-363, eff. 8-9-19;

25 revised 11-18-20.)

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1 (Text of Section with the changes made by P.A. 101-8,

2 which did not take effect (see Section 99 of P.A. 101-8))

3 Sec. 201. Tax imposed.

4 (a) In general. A tax measured by net income is hereby

5 imposed on every individual, corporation, trust and estate for

6 each taxable year ending after July 31, 1969 on the privilege

7 of earning or receiving income in or as a resident of this

8 State. Such tax shall be in addition to all other occupation or

9 privilege taxes imposed by this State or by any municipal

10 corporation or political subdivision thereof.

11 (b) Rates. The tax imposed by subsection (a) of this

12 Section shall be determined as follows, except as adjusted by

13 subsection (d-1):

14 (1) In the case of an individual, trust or estate, for

15 taxable years ending prior to July 1, 1989, an amount

16 equal to 2 1/2% of the taxpayer's net income for the

17 taxable year.

18 (2) In the case of an individual, trust or estate, for

19 taxable years beginning prior to July 1, 1989 and ending

20 after June 30, 1989, an amount equal to the sum of (i) 2

21 1/2% of the taxpayer's net income for the period prior to

22 July 1, 1989, as calculated under Section 202.3, and (ii)

23 3% of the taxpayer's net income for the period after June

24 30, 1989, as calculated under Section 202.3.

25 (3) In the case of an individual, trust or estate, for

26 taxable years beginning after June 30, 1989, and ending

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1 prior to January 1, 2011, an amount equal to 3% of the

2 taxpayer's net income for the taxable year.

3 (4) In the case of an individual, trust, or estate,

4 for taxable years beginning prior to January 1, 2011, and

5 ending after December 31, 2010, an amount equal to the sum

6 of (i) 3% of the taxpayer's net income for the period prior

7 to January 1, 2011, as calculated under Section 202.5, and

8 (ii) 5% of the taxpayer's net income for the period after

9 December 31, 2010, as calculated under Section 202.5.

10 (5) In the case of an individual, trust, or estate,

11 for taxable years beginning on or after January 1, 2011,

12 and ending prior to January 1, 2015, an amount equal to 5%

13 of the taxpayer's net income for the taxable year.

14 (5.1) In the case of an individual, trust, or estate,

15 for taxable years beginning prior to January 1, 2015, and

16 ending after December 31, 2014, an amount equal to the sum

17 of (i) 5% of the taxpayer's net income for the period prior

18 to January 1, 2015, as calculated under Section 202.5, and

19 (ii) 3.75% of the taxpayer's net income for the period

20 after December 31, 2014, as calculated under Section

21 202.5.

22 (5.2) In the case of an individual, trust, or estate,

23 for taxable years beginning on or after January 1, 2015,

24 and ending prior to July 1, 2017, an amount equal to 3.75%

25 of the taxpayer's net income for the taxable year.

26 (5.3) In the case of an individual, trust, or estate,

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LRB102 11374 HLH 16707 b

1 for taxable years beginning prior to July 1, 2017, and

2 ending after June 30, 2017, an amount equal to the sum of

3 (i) 3.75% of the taxpayer's net income for the period

4 prior to July 1, 2017, as calculated under Section 202.5,

5 and (ii) 4.95% of the taxpayer's net income for the period

6 after June 30, 2017, as calculated under Section 202.5.

7 (5.4) In the case of an individual, trust, or estate,

8 for taxable years beginning on or after July 1, 2017 and

9 ending prior to January 1, 2021 ~~and beginning prior to~~

10 ~~January 1, 2021~~, an amount equal to 4.95% of the

11 taxpayer's net income for the taxable year.

12 (5.5) In the case of an individual, trust, or estate,

13 for taxable years beginning prior to January 1, 2021, and

14 ending after December 31, 2020, an amount equal to the sum

15 of (i) 4.95% of the taxpayer's net income for the period

16 prior to January 1, 2021, as calculated under Section

17 202.5, and (ii) 3.75% of the taxpayer's net income for the

18 period after December 31, 2020, as calculated under

19 Section 202.5.

20 (5.6) In the case of an individual, trust, or estate,

21 for taxable years beginning on or after January 1, 2021,

22 an amount equal to 3.75% of the taxpayer's net income for

23 the taxable year.

24 ~~(5.5) In the case of an individual, trust, or estate,~~

25 ~~for taxable years beginning on or after January 1, 2021,~~

26 ~~an amount calculated under the rate structure set forth in~~

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LRB102 11374 HLH 16707 b

1 ~~Section 201.1.~~

2 (6) In the case of a corporation, for taxable years

3 ending prior to July 1, 1989, an amount equal to 4% of the

4 taxpayer's net income for the taxable year.

5 (7) In the case of a corporation, for taxable years

6 beginning prior to July 1, 1989 and ending after June 30,

7 1989, an amount equal to the sum of (i) 4% of the

8 taxpayer's net income for the period prior to July 1,

9 1989, as calculated under Section 202.3, and (ii) 4.8% of

10 the taxpayer's net income for the period after June 30,

11 1989, as calculated under Section 202.3.

12 (8) In the case of a corporation, for taxable years

13 beginning after June 30, 1989, and ending prior to January

14 1, 2011, an amount equal to 4.8% of the taxpayer's net

15 income for the taxable year.

16 (9) In the case of a corporation, for taxable years

17 beginning prior to January 1, 2011, and ending after

18 December 31, 2010, an amount equal to the sum of (i) 4.8%

19 of the taxpayer's net income for the period prior to

20 January 1, 2011, as calculated under Section 202.5, and

21 (ii) 7% of the taxpayer's net income for the period after

22 December 31, 2010, as calculated under Section 202.5.

23 (10) In the case of a corporation, for taxable years

24 beginning on or after January 1, 2011, and ending prior to

25 January 1, 2015, an amount equal to 7% of the taxpayer's

26 net income for the taxable year.

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LRB102 11374 HLH 16707 b

1 (11) In the case of a corporation, for taxable years

2 beginning prior to January 1, 2015, and ending after

3 December 31, 2014, an amount equal to the sum of (i) 7% of

4 the taxpayer's net income for the period prior to January

5 1, 2015, as calculated under Section 202.5, and (ii) 5.25%

6 of the taxpayer's net income for the period after December

7 31, 2014, as calculated under Section 202.5.

8 (12) In the case of a corporation, for taxable years

9 beginning on or after January 1, 2015, and ending prior to

10 July 1, 2017, an amount equal to 5.25% of the taxpayer's

11 net income for the taxable year.

12 (13) In the case of a corporation, for taxable years

13 beginning prior to July 1, 2017, and ending after June 30,

14 2017, an amount equal to the sum of (i) 5.25% of the

15 taxpayer's net income for the period prior to July 1,

16 2017, as calculated under Section 202.5, and (ii) 7% of

17 the taxpayer's net income for the period after June 30,

18 2017, as calculated under Section 202.5.

19 (14) In the case of a corporation, for taxable years

20 beginning on or after July 1, 2017 ~~and beginning prior to~~

21 ~~January 1, 2021~~, an amount equal to 7% of the taxpayer's

22 net income for the taxable year.

23 ~~(15) In the case of a corporation, for taxable years~~

24 ~~beginning on or after January 1, 2021, an amount equal to~~

25 ~~7.99% of the taxpayer's net income for the taxable year.~~

26 The rates under this subsection (b) are subject to the

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