HB3872 Engrossed LRB096 09597 HLH 19758 b
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 Department of Revenue Law of the Civil
5		Administrative Code of Illinois is amended by changing Section
6		2505-310 as follows:
7		(20 ILCS 2505/2505-310) (was 20 ILCS 2505/39b15.2)
8		Sec. 2505-310. Obtaining evidence. The Department has the
9		power to expend sums that the Director deems necessary from
10		contractual services appropriations for the purchase of
11		evidence and for the employment of persons to obtain evidence.
12		The sums shall be advanced to investigators authorized by the
13		Director to expend funds, on vouchers signed by the Director.
14		In addition, the Director is authorized to maintain one or
15		more commercial checking accounts with any State banking
16		corporation or corporations organized under or subject to the
17		Illinois Banking Act for the deposit and withdrawal of moneys
18		to be used solely for the purchase of evidence and for the
19		employment of persons to obtain evidence. No check may be
20		written on nor any withdrawal made from such an account except
21		on the written signature of 2 persons designated by the
22		Director to write those checks and make those withdrawals. No
23		electronic check may be drawn on nor any electronic withdrawal

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1		made from such account by any secure online, Internet, or
2		web-based banking methods or procedures except on the written
3		approval of 2 or more persons designated and authorized by the
4		Director to make such electronic checks or electronic
5		withdrawals. The balance of moneys on deposit in any such
6		account shall not exceed $25,000 $5,000 at any time, nor shall
7		any one check written on or single withdrawal made from any
8		such account exceed $25,000 $5,000.
9		(Source: P.A. 91-239, eff. 1-1-00.)
10		Section 10. The Taxpayers' Bill of Rights Act is amended by
11		changing Section 4 as follows:
12		(20 ILCS 2520/4) (from Ch. 120, par. 2304)
13		Sec. 4. Department responsibilities. The Department of
14		Revenue shall have the following powers and duties to protect
15		the rights of taxpayers:
16		(a) To furnish each taxpayer with a written statement of
17		rights whenever such taxpayer receives a protestable notice, a
18		bill, a claim denial or reduction regarding any tax. Such
19		statement shall explain the rights of such person and the
20		obligations of the Department during the audit, appeals, refund
21		and collections processes.
22		(b) To include on all tax notices an explanation of tax
23		liabilities and penalties.
24		(c) To abate taxes and penalties and interest on any tax

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1		liability that a taxpayer failed to timely report or pay in
2		reliance on assessed based upon erroneous written information
3		or advice given by the Department, any penalty for failure to
4		timely file any return or other document if the taxpayer failed
5		to make a timely filing in reliance on written information or
6		advice given by the Department, and any amount of tax required
7		or allowed by statute to be collected by the taxpayer from
8		another person if the taxpayer failed to collect such tax as
9		the result of erroneous written information or advice given by
10		the Department.
11		(d) To not cancel any installment contracts unless the
12		taxpayer fails to provide accurate financial information,
13		fails to pay any tax or does not respond to any Department
14		request for additional financial information.
15		(e) To place non-perishable property seized for taxes in
16		escrow for safekeeping for a period of 20 days to permit the
17		taxpayer to correct any Department error. If seized property is
18		of a perishable nature and in danger of immediate waste or
19		decay, such property need not be placed in escrow prior to
20		sale.
21		(f) To place seized taxpayer bank accounts in escrow with
22		the bank for 20 days to permit the taxpayer to correct any
23		Department error.
24		(g) To adopt regulations setting standards for setting
25		times and places for taxpayer interviews and to permit any
26		taxpayer to record such interviews.

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1		(h) To pay interest to taxpayers who have made overpayments
2		at the same rate as interest charged on underpayments.
3		(i) To grant automatic extensions to taxpayers in filing
4		income tax returns when such taxpayer has been granted an
5		extension in filing a federal tax return.
6		(j) To annually perform a systematic identification of
7		areas of recurrent taxpayer non-compliances with rules or
8		guidelines and to report its findings and recommendations
9		concerning such non-compliance to the General Assembly in an
10		annual report.
11		(k) In the case of an audit, if no violations are found,
12		the Department shall provide the taxpayer a closing letter
13		acknowledging this and thanking the taxpayer for his, her, or
14		its cooperation. If there are changes, the auditor is required
15		to provide in writing to the taxpayer (i) the audit findings
16		and (ii), unless the taxpayer declines, the audit methods and
17		procedures (but not information concerning audit selection
18		methods). The auditor must, at the request of the taxpayer,
19		provide written information as to what records constitute the
20		minimum requirements for record-keeping. If the auditor
21		recommends changes in the record-keeping process, these
22		recommendations must be provided in writing to the taxpayer.
23		(Source: P.A. 93-951, eff. 1-1-05.)
24		Section 15. The Illinois Income Tax Act is amended by
25		changing Sections 203, 905, and 911 as follows:

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1		(35 ILCS 5/203) (from Ch. 120, par. 2-203)
2		Sec. 203. Base income defined.
3		(a) Individuals.
4		(1) In general. In the case of an individual, base
5		income means an amount equal to the taxpayer's adjusted
6		gross income for the taxable year as modified by paragraph
7		(2).
8		(2) Modifications. The adjusted gross income referred
9		to in paragraph (1) shall be modified by adding thereto the
10		sum of the following amounts:
11		(A) An amount equal to all amounts paid or accrued
12		to the taxpayer as interest or dividends during the
13		taxable year to the extent excluded from gross income
14		in the computation of adjusted gross income, except
15		stock dividends of qualified public utilities
16		described in Section 305(e) of the Internal Revenue
17		Code;
18		(B) An amount equal to the amount of tax imposed by
19		this Act to the extent deducted from gross income in
20		the computation of adjusted gross income for the
21		taxable year;
22		(C) An amount equal to the amount received during
23		the taxable year as a recovery or refund of real
24		property taxes paid with respect to the taxpayer's
25		principal residence under the Revenue Act of 1939 and

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1		for which a deduction was previously taken under
2		subparagraph (L) of this paragraph (2) prior to July 1,
3		1991, the retrospective application date of Article 4
4		of Public Act 87-17. In the case of multi-unit or
5		multi-use structures and farm dwellings, the taxes on
6		the taxpayer's principal residence shall be that
7		portion of the total taxes for the entire property
8		which is attributable to such principal residence;
9		(D) An amount equal to the amount of the capital
10		gain deduction allowable under the Internal Revenue
11		Code, to the extent deducted from gross income in the
12		computation of adjusted gross income;
13		(D-5) An amount, to the extent not included in
14		adjusted gross income, equal to the amount of money
15		withdrawn by the taxpayer in the taxable year from a
16		medical care savings account and the interest earned on
17		the account in the taxable year of a withdrawal
18		pursuant to subsection (b) of Section 20 of the Medical
19		Care Savings Account Act or subsection (b) of Section
20		20 of the Medical Care Savings Account Act of 2000;
21		(D-10) For taxable years ending after December 31,
22		1997, an amount equal to any eligible remediation costs
23		that the individual deducted in computing adjusted
24		gross income and for which the individual claims a
25		credit under subsection (l) of Section 201;
26		(D-15) For taxable years 2001 and thereafter, an

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1		amount equal to the bonus depreciation deduction taken
2		on the taxpayer's federal income tax return for the
3		taxable year under subsection (k) of Section 168 of the
4		Internal Revenue Code;
5		(D-16) If the taxpayer sells, transfers, abandons,
6		or otherwise disposes of property for which the
7		taxpayer was required in any taxable year to make an
8		addition modification under subparagraph (D-15), then
9		an amount equal to the aggregate amount of the
10		deductions taken in all taxable years under
11		subparagraph (Z) with respect to that property.
12		If the taxpayer continues to own property through
13		the last day of the last tax year for which the
14		taxpayer may claim a depreciation deduction for
15		federal income tax purposes and for which the taxpayer
16		was allowed in any taxable year to make a subtraction
17		modification under subparagraph (Z), then an amount
18		equal to that subtraction modification.
19		The taxpayer is required to make the addition
20		modification under this subparagraph only once with
21		respect to any one piece of property;
22		(D-17) An amount equal to the amount otherwise
23		allowed as a deduction in computing base income for
24		interest paid, accrued, or incurred, directly or
25		indirectly, (i) for taxable years ending on or after
26		December 31, 2004, to a foreign person who would be a

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1		member of the same unitary business group but for the
2		fact that foreign person's business activity outside
3		the United States is 80% or more of the foreign
4		person's total business activity and (ii) for taxable
5		years ending on or after December 31, 2008, to a person
6		who would be a member of the same unitary business
7		group but for the fact that the person is prohibited
8		under Section 1501(a)(27) from being included in the
9		unitary business group because he or she is ordinarily
10		required to apportion business income under different
11		subsections of Section 304. The addition modification
12		required by this subparagraph shall be reduced to the
13		extent that dividends were included in base income of
14		the unitary group for the same taxable year and
15		received by the taxpayer or by a member of the
16		taxpayer's unitary business group (including amounts
17		included in gross income under Sections 951 through 964
18		of the Internal Revenue Code and amounts included in
19		gross income under Section 78 of the Internal Revenue
20		Code) with respect to the stock of the same person to
21		whom the interest was paid, accrued, or incurred.
22		This paragraph shall not apply to the following:
23		(i) an item of interest paid, accrued, or
24		incurred, directly or indirectly, to a person who
25		is subject in a foreign country or state, other
26		than a state which requires mandatory unitary

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1		reporting, to a tax on or measured by net income
2		with respect to such interest; or
3		(ii) an item of interest paid, accrued, or
4		incurred, directly or indirectly, to a person if
5		the taxpayer can establish, based on a
6		preponderance of the evidence, both of the
7		following:
8		(a) the person, during the same taxable
9		year, paid, accrued, or incurred, the interest
10		to a person that is not a related member, and
11		(b) the transaction giving rise to the
12		interest expense between the taxpayer and the
13		person did not have as a principal purpose the
14		avoidance of Illinois income tax, and is paid
15		pursuant to a contract or agreement that
16		reflects an arm's-length interest rate and
17		terms; or
18		(iii) the taxpayer can establish, based on
19		clear and convincing evidence, that the interest
20		paid, accrued, or incurred relates to a contract or
21		agreement entered into at arm's-length rates and
22		terms and the principal purpose for the payment is
23		not federal or Illinois tax avoidance; or
24		(iv) an item of interest paid, accrued, or
25		incurred, directly or indirectly, to a person if
26		the taxpayer establishes by clear and convincing

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1		evidence that the adjustments are unreasonable; or
2		if the taxpayer and the Director agree in writing
3		to the application or use of an alternative method
4		of apportionment under Section 304(f).
5		Nothing in this subsection shall preclude the
6		Director from making any other adjustment
7		otherwise allowed under Section 404 of this Act for
8		any tax year beginning after the effective date of
9		this amendment provided such adjustment is made
10		pursuant to regulation adopted by the Department
11		and such regulations provide methods and standards
12		by which the Department will utilize its authority
13		under Section 404 of this Act;
14		(D-18) An amount equal to the amount of intangible
15		expenses and costs otherwise allowed as a deduction in
16		computing base income, and that were paid, accrued, or
17		incurred, directly or indirectly, (i) for taxable
18		years ending on or after December 31, 2004, to a
19		foreign person who would be a member of the same
20		unitary business group but for the fact that the
21		foreign person's business activity outside the United
22		States is 80% or more of that person's total business
23		activity and (ii) for taxable years ending on or after
24		December 31, 2008, to a person who would be a member of
25		the same unitary business group but for the fact that
26		the person is prohibited under Section 1501(a)(27)

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1		from being included in the unitary business group
2		because he or she is ordinarily required to apportion
3		business income under different subsections of Section
4		304. The addition modification required by this
5		subparagraph shall be reduced to the extent that
6		dividends were included in base income of the unitary
7		group for the same taxable year and received by the
8		taxpayer or by a member of the taxpayer's unitary
9		business group (including amounts included in gross
10		income under Sections 951 through 964 of the Internal
11		Revenue Code and amounts included in gross income under
12		Section 78 of the Internal Revenue Code) with respect
13		to the stock of the same person to whom the intangible
14		expenses and costs were directly or indirectly paid,
15		incurred, or accrued. The preceding sentence does not
16		apply to the extent that the same dividends caused a
17		reduction to the addition modification required under
18		Section 203(a)(2)(D-17) of this Act. As used in this
19		subparagraph, the term "intangible expenses and costs"
20		includes (1) expenses, losses, and costs for, or
21		related to, the direct or indirect acquisition, use,
22		maintenance or management, ownership, sale, exchange,
23		or any other disposition of intangible property; (2)
24		losses incurred, directly or indirectly, from
25		factoring transactions or discounting transactions;
26		(3) royalty, patent, technical, and copyright fees;

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1		(4) licensing fees; and (5) other similar expenses and
2		costs. For purposes of this subparagraph, "intangible
3		property" includes patents, patent applications, trade
4		names, trademarks, service marks, copyrights, mask
5		works, trade secrets, and similar types of intangible
6		assets.
7		This paragraph shall not apply to the following:
8		(i) any item of intangible expenses or costs
9		paid, accrued, or incurred, directly or
10		indirectly, from a transaction with a person who is
11		subject in a foreign country or state, other than a
12		state which requires mandatory unitary reporting,
13		to a tax on or measured by net income with respect
14		to such item; or
15		(ii) any item of intangible expense or cost
16		paid, accrued, or incurred, directly or
17		indirectly, if the taxpayer can establish, based
18		on a preponderance of the evidence, both of the
19		following:
20		(a) the person during the same taxable
21		year paid, accrued, or incurred, the
22		intangible expense or cost to a person that is
23		not a related member, and
24		(b) the transaction giving rise to the
25		intangible expense or cost between the
26		taxpayer and the person did not have as a

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1		principal purpose the avoidance of Illinois
2		income tax, and is paid pursuant to a contract
3		or agreement that reflects arm's-length terms;
4		or
5		(iii) any item of intangible expense or cost
6		paid, accrued, or incurred, directly or
7		indirectly, from a transaction with a person if the
8		taxpayer establishes by clear and convincing
9		evidence, that the adjustments are unreasonable;
10		or if the taxpayer and the Director agree in
11		writing to the application or use of an alternative
12		method of apportionment under Section 304(f);
13		Nothing in this subsection shall preclude the
14		Director from making any other adjustment
15		otherwise allowed under Section 404 of this Act for
16		any tax year beginning after the effective date of
17		this amendment provided such adjustment is made
18		pursuant to regulation adopted by the Department
19		and such regulations provide methods and standards
20		by which the Department will utilize its authority
21		under Section 404 of this Act;
22		(D-19) For taxable years ending on or after
23		December 31, 2008, an amount equal to the amount of
24		insurance premium expenses and costs otherwise allowed
25		as a deduction in computing base income, and that were
26		paid, accrued, or incurred, directly or indirectly, to

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1		a person who would be a member of the same unitary
2		business group but for the fact that the person is
3		prohibited under Section 1501(a)(27) from being
4		included in the unitary business group because he or
5		she is ordinarily required to apportion business
6		income under different subsections of Section 304. The
7		addition modification required by this subparagraph
8		shall be reduced to the extent that dividends were
9		included in base income of the unitary group for the
10		same taxable year and received by the taxpayer or by a
11		member of the taxpayer's unitary business group
12		(including amounts included in gross income under
13		Sections 951 through 964 of the Internal Revenue Code
14		and amounts included in gross income under Section 78
15		of the Internal Revenue Code) with respect to the stock
16		of the same person to whom the premiums and costs were
17		directly or indirectly paid, incurred, or accrued. The
18		preceding sentence does not apply to the extent that
19		the same dividends caused a reduction to the addition
20		modification required under Section 203(a)(2)(D-17) or
21		Section 203(a)(2)(D-18) of this Act.
22		(D-20) For taxable years beginning on or after
23		January 1, 2002 and ending on or before December 31,
24		2006, in the case of a distribution from a qualified
25		tuition program under Section 529 of the Internal
26		Revenue Code, other than (i) a distribution from a

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1		College Savings Pool created under Section 16.5 of the
2		State Treasurer Act or (ii) a distribution from the
3		Illinois Prepaid Tuition Trust Fund, an amount equal to
4		the amount excluded from gross income under Section
5		529(c)(3)(B). For taxable years beginning on or after
6		January 1, 2007, in the case of a distribution from a
7		qualified tuition program under Section 529 of the
8		Internal Revenue Code, other than (i) a distribution
9		from a College Savings Pool created under Section 16.5
10		of the State Treasurer Act, (ii) a distribution from
11		the Illinois Prepaid Tuition Trust Fund, or (iii) a
12		distribution from a qualified tuition program under
13		Section 529 of the Internal Revenue Code that (I)
14		adopts and determines that its offering materials
15		comply with the College Savings Plans Network's
16		disclosure principles and (II) has made reasonable
17		efforts to inform in-state residents of the existence
18		of in-state qualified tuition programs by informing
19		Illinois residents directly and, where applicable, to
20		inform financial intermediaries distributing the
21		program to inform in-state residents of the existence
22		of in-state qualified tuition programs at least
23		annually, an amount equal to the amount excluded from
24		gross income under Section 529(c)(3)(B).
25		For the purposes of this subparagraph (D-20), a
26		qualified tuition program has made reasonable efforts

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1		if it makes disclosures (which may use the term
2		"in-state program" or "in-state plan" and need not
3		specifically refer to Illinois or its qualified
4		programs by name) (i) directly to prospective
5		participants in its offering materials or makes a
6		public disclosure, such as a website posting; and (ii)
7		where applicable, to intermediaries selling the
8		out-of-state program in the same manner that the
9		out-of-state program distributes its offering
10		materials;
11		(D-21) For taxable years beginning on or after
12		January 1, 2007, in the case of transfer of moneys from
13		a qualified tuition program under Section 529 of the
14		Internal Revenue Code that is administered by the State
15		to an out-of-state program, an amount equal to the
16		amount of moneys previously deducted from base income
17		under subsection (a)(2)(Y) of this Section.
18		(D-25) For taxable years ending on or after
19		December 31, 2009, any deduction otherwise allowed for
20		the taxable year for compensation from which Illinois
21		income tax is required to be withheld under Article 7
22		of this Act, to the extent the required withholding
23		from such wages has not been paid over to the
24		Department.
25		and by deducting from the total so obtained the sum of the
26		following amounts:

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1		(E) For taxable years ending before December 31,
2		2001, any amount included in such total in respect of
3		any compensation (including but not limited to any
4		compensation paid or accrued to a serviceman while a
5		prisoner of war or missing in action) paid to a
6		resident by reason of being on active duty in the Armed
7		Forces of the United States and in respect of any
8		compensation paid or accrued to a resident who as a
9		governmental employee was a prisoner of war or missing
10		in action, and in respect of any compensation paid to a
11		resident in 1971 or thereafter for annual training
12		performed pursuant to Sections 502 and 503, Title 32,
13		United States Code as a member of the Illinois National
14		Guard or, beginning with taxable years ending on or
15		after December 31, 2007, the National Guard of any
16		other state. For taxable years ending on or after
17		December 31, 2001, any amount included in such total in
18		respect of any compensation (including but not limited
19		to any compensation paid or accrued to a serviceman
20		while a prisoner of war or missing in action) paid to a
21		resident by reason of being a member of any component
22		of the Armed Forces of the United States and in respect
23		of any compensation paid or accrued to a resident who
24		as a governmental employee was a prisoner of war or
25		missing in action, and in respect of any compensation
26		paid to a resident in 2001 or thereafter by reason of

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1		being a member of the Illinois National Guard or,
2		beginning with taxable years ending on or after
3		December 31, 2007, the National Guard of any other
4		state. The provisions of this amendatory Act of the
5		92nd General Assembly are exempt from the provisions of
6		Section 250;
7		(F) An amount equal to all amounts included in such
8		total pursuant to the provisions of Sections 402(a),
9		402(c), 403(a), 403(b), 406(a), 407(a), and 408 of the
10		Internal Revenue Code, or included in such total as
11		distributions under the provisions of any retirement
12		or disability plan for employees of any governmental
13		agency or unit, or retirement payments to retired
14		partners, which payments are excluded in computing net
15		earnings from self employment by Section 1402 of the
16		Internal Revenue Code and regulations adopted pursuant
17		thereto;
18		(G) The valuation limitation amount;
19		(H) An amount equal to the amount of any tax
20		imposed by this Act which was refunded to the taxpayer
21		and included in such total for the taxable year;
22		(I) An amount equal to all amounts included in such
23		total pursuant to the provisions of Section 111 of the
24		Internal Revenue Code as a recovery of items previously
25		deducted from adjusted gross income in the computation
26		of taxable income;

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1		(J) An amount equal to those dividends included in
2		such total which were paid by a corporation which
3		conducts business operations in an Enterprise Zone or
4		zones created under the Illinois Enterprise Zone Act or
5		a River Edge Redevelopment Zone or zones created under
6		the River Edge Redevelopment Zone Act, and conducts
7		substantially all of its operations in an Enterprise
8		Zone or zones or a River Edge Redevelopment Zone or
9		zones. This subparagraph (J) is exempt from the
10		provisions of Section 250;
11		(K) An amount equal to those dividends included in
12		such total that were paid by a corporation that
13		conducts business operations in a federally designated
14		Foreign Trade Zone or Sub-Zone and that is designated a
15		High Impact Business located in Illinois; provided
16		that dividends eligible for the deduction provided in
17		subparagraph (J) of paragraph (2) of this subsection
18		shall not be eligible for the deduction provided under
19		this subparagraph (K);
20		(L) For taxable years ending after December 31,
21		1983, an amount equal to all social security benefits
22		and railroad retirement benefits included in such
23		total pursuant to Sections 72(r) and 86 of the Internal
24		Revenue Code;
25		(M) With the exception of any amounts subtracted
26		under subparagraph (N), an amount equal to the sum of

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1		all amounts disallowed as deductions by (i) Sections
2		171(a) (2), and 265(2) of the Internal Revenue Code of
3		1954, as now or hereafter amended, and all amounts of
4		expenses allocable to interest and disallowed as
5		deductions by Section 265(1) of the Internal Revenue
6		Code of 1954, as now or hereafter amended; and (ii) for
7		taxable years ending on or after August 13, 1999,
8		Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of
9		the Internal Revenue Code; the provisions of this
10		subparagraph are exempt from the provisions of Section
11		250;
12		(N) An amount equal to all amounts included in such
13		total which are exempt from taxation by this State
14		either by reason of its statutes or Constitution or by
15		reason of the Constitution, treaties or statutes of the
16		United States; provided that, in the case of any
17		statute of this State that exempts income derived from
18		bonds or other obligations from the tax imposed under
19		this Act, the amount exempted shall be the interest net
20		of bond premium amortization;
21		(O) An amount equal to any contribution made to a
22		job training project established pursuant to the Tax
23		Increment Allocation Redevelopment Act;
24		(P) An amount equal to the amount of the deduction
25		used to compute the federal income tax credit for
26		restoration of substantial amounts held under claim of

HB3872 Engrossed - 21 - LRB096 09597 HLH 19758 b
1		right for the taxable year pursuant to Section 1341 of
2		the Internal Revenue Code of 1986;
3		(Q) An amount equal to any amounts included in such
4		total, received by the taxpayer as an acceleration in
5		the payment of life, endowment or annuity benefits in
6		advance of the time they would otherwise be payable as
7		an indemnity for a terminal illness;
8		(R) An amount equal to the amount of any federal or
9		State bonus paid to veterans of the Persian Gulf War;
10		(S) An amount, to the extent included in adjusted
11		gross income, equal to the amount of a contribution
12		made in the taxable year on behalf of the taxpayer to a
13		medical care savings account established under the
14		Medical Care Savings Account Act or the Medical Care
15		Savings Account Act of 2000 to the extent the
16		contribution is accepted by the account administrator
17		as provided in that Act;
18		(T) An amount, to the extent included in adjusted
19		gross income, equal to the amount of interest earned in
20		the taxable year on a medical care savings account
21		established under the Medical Care Savings Account Act
22		or the Medical Care Savings Account Act of 2000 on
23		behalf of the taxpayer, other than interest added
24		pursuant to item (D-5) of this paragraph (2);
25		(U) For one taxable year beginning on or after
26		January 1, 1994, an amount equal to the total amount of

HB3872 Engrossed - 22 - LRB096 09597 HLH 19758 b
1		tax imposed and paid under subsections (a) and (b) of
2		Section 201 of this Act on grant amounts received by
3		the taxpayer under the Nursing Home Grant Assistance
4		Act during the taxpayer's taxable years 1992 and 1993;
5		(V) Beginning with tax years ending on or after
6		December 31, 1995 and ending with tax years ending on
7		or before December 31, 2004, an amount equal to the
8		amount paid by a taxpayer who is a self-employed
9		taxpayer, a partner of a partnership, or a shareholder
10		in a Subchapter S corporation for health insurance or
11		long-term care insurance for that taxpayer or that
12		taxpayer's spouse or dependents, to the extent that the
13		amount paid for that health insurance or long-term care
14		insurance may be deducted under Section 213 of the
15		Internal Revenue Code of 1986, has not been deducted on
16		the federal income tax return of the taxpayer, and does
17		not exceed the taxable income attributable to that
18		taxpayer's income, self-employment income, or
19		Subchapter S corporation income; except that no
20		deduction shall be allowed under this item (V) if the
21		taxpayer is eligible to participate in any health
22		insurance or long-term care insurance plan of an
23		employer of the taxpayer or the taxpayer's spouse. The
24		amount of the health insurance and long-term care
25		insurance subtracted under this item (V) shall be
26		determined by multiplying total health insurance and

HB3872 Engrossed - 23 - LRB096 09597 HLH 19758 b
1		long-term care insurance premiums paid by the taxpayer
2		times a number that represents the fractional
3		percentage of eligible medical expenses under Section
4		213 of the Internal Revenue Code of 1986 not actually
5		deducted on the taxpayer's federal income tax return;
6		(W) For taxable years beginning on or after January
7		1, 1998, all amounts included in the taxpayer's federal
8		gross income in the taxable year from amounts converted
9		from a regular IRA to a Roth IRA. This paragraph is
10		exempt from the provisions of Section 250;
11		(X) For taxable year 1999 and thereafter, an amount
12		equal to the amount of any (i) distributions, to the
13		extent includible in gross income for federal income
14		tax purposes, made to the taxpayer because of his or
15		her status as a victim of persecution for racial or
16		religious reasons by Nazi Germany or any other Axis
17		regime or as an heir of the victim and (ii) items of
18		income, to the extent includible in gross income for
19		federal income tax purposes, attributable to, derived
20		from or in any way related to assets stolen from,
21		hidden from, or otherwise lost to a victim of
22		persecution for racial or religious reasons by Nazi
23		Germany or any other Axis regime immediately prior to,
24		during, and immediately after World War II, including,
25		but not limited to, interest on the proceeds receivable
26		as insurance under policies issued to a victim of

HB3872 Engrossed - 24 - LRB096 09597 HLH 19758 b
1		persecution for racial or religious reasons by Nazi
2		Germany or any other Axis regime by European insurance
3		companies immediately prior to and during World War II;
4		provided, however, this subtraction from federal
5		adjusted gross income does not apply to assets acquired
6		with such assets or with the proceeds from the sale of
7		such assets; provided, further, this paragraph shall
8		only apply to a taxpayer who was the first recipient of
9		such assets after their recovery and who is a victim of
10		persecution for racial or religious reasons by Nazi
11		Germany or any other Axis regime or as an heir of the
12		victim. The amount of and the eligibility for any
13		public assistance, benefit, or similar entitlement is
14		not affected by the inclusion of items (i) and (ii) of
15		this paragraph in gross income for federal income tax
16		purposes. This paragraph is exempt from the provisions
17		of Section 250;
18		(Y) For taxable years beginning on or after January
19		1, 2002 and ending on or before December 31, 2004,
20		moneys contributed in the taxable year to a College
21		Savings Pool account under Section 16.5 of the State
22		Treasurer Act, except that amounts excluded from gross
23		income under Section 529(c)(3)(C)(i) of the Internal
24		Revenue Code shall not be considered moneys
25		contributed under this subparagraph (Y). For taxable
26		years beginning on or after January 1, 2005, a maximum

HB3872 Engrossed - 25 - LRB096 09597 HLH 19758 b
1		of $10,000 contributed in the taxable year to (i) a
2		College Savings Pool account under Section 16.5 of the
3		State Treasurer Act or (ii) the Illinois Prepaid
4		Tuition Trust Fund, except that amounts excluded from
5		gross income under Section 529(c)(3)(C)(i) of the
6		Internal Revenue Code shall not be considered moneys
7		contributed under this subparagraph (Y). This
8		subparagraph (Y) is exempt from the provisions of
9		Section 250;
10		(Z) For taxable years 2001 and thereafter, for the
11		taxable year in which the bonus depreciation deduction
12		is taken on the taxpayer's federal income tax return
13		under subsection (k) of Section 168 of the Internal
14		Revenue Code and for each applicable taxable year
15		thereafter, an amount equal to "x", where:
16		(1) "y" equals the amount of the depreciation
17		deduction taken for the taxable year on the
18		taxpayer's federal income tax return on property
19		for which the bonus depreciation deduction was
20		taken in any year under subsection (k) of Section
21		168 of the Internal Revenue Code, but not including
22		the bonus depreciation deduction;
23		(2) for taxable years ending on or before
24		December 31, 2005, "x" equals "y" multiplied by 30
25		and then divided by 70 (or "y" multiplied by
26		0.429); and

HB3872 Engrossed - 26 - LRB096 09597 HLH 19758 b
1		(3) for taxable years ending after December
2		31, 2005:
3		(i) for property on which a bonus
4		depreciation deduction of 30% of the adjusted
5		basis was taken, "x" equals "y" multiplied by
6		30 and then divided by 70 (or "y" multiplied by
7		0.429); and
8		(ii) for property on which a bonus
9		depreciation deduction of 50% of the adjusted
10		basis was taken, "x" equals "y" multiplied by
11		1.0.
12		The aggregate amount deducted under this
13		subparagraph in all taxable years for any one piece of
14		property may not exceed the amount of the bonus
15		depreciation deduction taken on that property on the
16		taxpayer's federal income tax return under subsection
17		(k) of Section 168 of the Internal Revenue Code. This
18		subparagraph (Z) is exempt from the provisions of
19		Section 250;
20		(AA) If the taxpayer sells, transfers, abandons,
21		or otherwise disposes of property for which the
22		taxpayer was required in any taxable year to make an
23		addition modification under subparagraph (D-15), then
24		an amount equal to that addition modification.
25		If the taxpayer continues to own property through
26		the last day of the last tax year for which the

HB3872 Engrossed - 27 - LRB096 09597 HLH 19758 b
1		taxpayer may claim a depreciation deduction for
2		federal income tax purposes and for which the taxpayer
3		was required in any taxable year to make an addition
4		modification under subparagraph (D-15), then an amount
5		equal to that addition modification.
6		The taxpayer is allowed to take the deduction under
7		this subparagraph only once with respect to any one
8		piece of property.
9		This subparagraph (AA) is exempt from the
10		provisions of Section 250;
11		(BB) Any amount included in adjusted gross income,
12		other than salary, received by a driver in a
13		ridesharing arrangement using a motor vehicle;
14		(CC) The amount of (i) any interest income (net of
15		the deductions allocable thereto) taken into account
16		for the taxable year with respect to a transaction with
17		a taxpayer that is required to make an addition
18		modification with respect to such transaction under
19		Section 203(a)(2)(D-17), 203(b)(2)(E-12),
20		203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
21		the amount of that addition modification, and (ii) any
22		income from intangible property (net of the deductions
23		allocable thereto) taken into account for the taxable
24		year with respect to a transaction with a taxpayer that
25		is required to make an addition modification with
26		respect to such transaction under Section

HB3872 Engrossed - 28 - LRB096 09597 HLH 19758 b
1		203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
2		203(d)(2)(D-8), but not to exceed the amount of that
3		addition modification. This subparagraph (CC) is
4		exempt from the provisions of Section 250;
5		(DD) An amount equal to the interest income taken
6		into account for the taxable year (net of the
7		deductions allocable thereto) with respect to
8		transactions with (i) a foreign person who would be a
9		member of the taxpayer's unitary business group but for
10		the fact that the foreign person's business activity
11		outside the United States is 80% or more of that
12		person's total business activity and (ii) for taxable
13		years ending on or after December 31, 2008, to a person
14		who would be a member of the same unitary business
15		group but for the fact that the person is prohibited
16		under Section 1501(a)(27) from being included in the
17		unitary business group because he or she is ordinarily
18		required to apportion business income under different
19		subsections of Section 304, but not to exceed the
20		addition modification required to be made for the same
21		taxable year under Section 203(a)(2)(D-17) for
22		interest paid, accrued, or incurred, directly or
23		indirectly, to the same person. This subparagraph (DD)
24		is exempt from the provisions of Section 250; and
25		(EE) An amount equal to the income from intangible
26		property taken into account for the taxable year (net

HB3872 Engrossed - 29 - LRB096 09597 HLH 19758 b
1		of the deductions allocable thereto) with respect to
2		transactions with (i) a foreign person who would be a
3		member of the taxpayer's unitary business group but for
4		the fact that the foreign person's business activity
5		outside the United States is 80% or more of that
6		person's total business activity and (ii) for taxable
7		years ending on or after December 31, 2008, to a person
8		who would be a member of the same unitary business
9		group but for the fact that the person is prohibited
10		under Section 1501(a)(27) from being included in the
11		unitary business group because he or she is ordinarily
12		required to apportion business income under different
13		subsections of Section 304, but not to exceed the
14		addition modification required to be made for the same
15		taxable year under Section 203(a)(2)(D-18) for
16		intangible expenses and costs paid, accrued, or
17		incurred, directly or indirectly, to the same foreign
18		person. This subparagraph (EE) is exempt from the
19		provisions of Section 250.
20		(b) Corporations.
21		(1) In general. In the case of a corporation, base
22		income means an amount equal to the taxpayer's taxable
23		income for the taxable year as modified by paragraph (2).
24		(2) Modifications. The taxable income referred to in
25		paragraph (1) shall be modified by adding thereto the sum

HB3872 Engrossed - 30 - LRB096 09597 HLH 19758 b
1		of the following amounts:
2		(A) An amount equal to all amounts paid or accrued
3		to the taxpayer as interest and all distributions
4		received from regulated investment companies during
5		the taxable year to the extent excluded from gross
6		income in the computation of taxable income;
7		(B) An amount equal to the amount of tax imposed by
8		this Act to the extent deducted from gross income in
9		the computation of taxable income for the taxable year;
10		(C) In the case of a regulated investment company,
11		an amount equal to the excess of (i) the net long-term
12		capital gain for the taxable year, over (ii) the amount
13		of the capital gain dividends designated as such in
14		accordance with Section 852(b)(3)(C) of the Internal
15		Revenue Code and any amount designated under Section
16		852(b)(3)(D) of the Internal Revenue Code,
17		attributable to the taxable year (this amendatory Act
18		of 1995 (Public Act 89-89) is declarative of existing
19		law and is not a new enactment);
20		(D) The amount of any net operating loss deduction
21		taken in arriving at taxable income, other than a net
22		operating loss carried forward from a taxable year
23		ending prior to December 31, 1986;
24		(E) For taxable years in which a net operating loss
25		carryback or carryforward from a taxable year ending
26		prior to December 31, 1986 is an element of taxable

HB3872 Engrossed - 31 - LRB096 09597 HLH 19758 b
1		income under paragraph (1) of subsection (e) or
2		subparagraph (E) of paragraph (2) of subsection (e),
3		the amount by which addition modifications other than
4		those provided by this subparagraph (E) exceeded
5		subtraction modifications in such earlier taxable
6		year, with the following limitations applied in the
7		order that they are listed:
8		(i) the addition modification relating to the
9		net operating loss carried back or forward to the
10		taxable year from any taxable year ending prior to
11		December 31, 1986 shall be reduced by the amount of
12		addition modification under this subparagraph (E)
13		which related to that net operating loss and which
14		was taken into account in calculating the base
15		income of an earlier taxable year, and
16		(ii) the addition modification relating to the
17		net operating loss carried back or forward to the
18		taxable year from any taxable year ending prior to
19		December 31, 1986 shall not exceed the amount of
20		such carryback or carryforward;
21		For taxable years in which there is a net operating
22		loss carryback or carryforward from more than one other
23		taxable year ending prior to December 31, 1986, the
24		addition modification provided in this subparagraph
25		(E) shall be the sum of the amounts computed
26		independently under the preceding provisions of this

HB3872 Engrossed - 32 - LRB096 09597 HLH 19758 b
1		subparagraph (E) for each such taxable year;
2		(E-5) For taxable years ending after December 31,
3		1997, an amount equal to any eligible remediation costs
4		that the corporation deducted in computing adjusted
5		gross income and for which the corporation claims a
6		credit under subsection (l) of Section 201;
7		(E-10) For taxable years 2001 and thereafter, an
8		amount equal to the bonus depreciation deduction taken
9		on the taxpayer's federal income tax return for the
10		taxable year under subsection (k) of Section 168 of the
11		Internal Revenue Code;
12		(E-11) If the taxpayer sells, transfers, abandons,
13		or otherwise disposes of property for which the
14		taxpayer was required in any taxable year to make an
15		addition modification under subparagraph (E-10), then
16		an amount equal to the aggregate amount of the
17		deductions taken in all taxable years under
18		subparagraph (T) with respect to that property.
19		If the taxpayer continues to own property through
20		the last day of the last tax year for which the
21		taxpayer may claim a depreciation deduction for
22		federal income tax purposes and for which the taxpayer
23		was allowed in any taxable year to make a subtraction
24		modification under subparagraph (T), then an amount
25		equal to that subtraction modification.
26		The taxpayer is required to make the addition

HB3872 Engrossed - 33 - LRB096 09597 HLH 19758 b
1		modification under this subparagraph only once with
2		respect to any one piece of property;
3		(E-12) An amount equal to the amount otherwise
4		allowed as a deduction in computing base income for
5		interest paid, accrued, or incurred, directly or
6		indirectly, (i) for taxable years ending on or after
7		December 31, 2004, to a foreign person who would be a
8		member of the same unitary business group but for the
9		fact the foreign person's business activity outside
10		the United States is 80% or more of the foreign
11		person's total business activity and (ii) for taxable
12		years ending on or after December 31, 2008, to a person
13		who would be a member of the same unitary business
14		group but for the fact that the person is prohibited
15		under Section 1501(a)(27) from being included in the
16		unitary business group because he or she is ordinarily
17		required to apportion business income under different
18		subsections of Section 304. The addition modification
19		required by this subparagraph shall be reduced to the
20		extent that dividends were included in base income of
21		the unitary group for the same taxable year and
22		received by the taxpayer or by a member of the
23		taxpayer's unitary business group (including amounts
24		included in gross income pursuant to Sections 951
25		through 964 of the Internal Revenue Code and amounts
26		included in gross income under Section 78 of the

HB3872 Engrossed - 34 - LRB096 09597 HLH 19758 b
1		Internal Revenue Code) with respect to the stock of the
2		same person to whom the interest was paid, accrued, or
3		incurred.
4		This paragraph shall not apply to the following:
5		(i) an item of interest paid, accrued, or
6		incurred, directly or indirectly, to a person who
7		is subject in a foreign country or state, other
8		than a state which requires mandatory unitary
9		reporting, to a tax on or measured by net income
10		with respect to such interest; or
11		(ii) an item of interest paid, accrued, or
12		incurred, directly or indirectly, to a person if
13		the taxpayer can establish, based on a
14		preponderance of the evidence, both of the
15		following:
16		(a) the person, during the same taxable
17		year, paid, accrued, or incurred, the interest
18		to a person that is not a related member, and
19		(b) the transaction giving rise to the
20		interest expense between the taxpayer and the
21		person did not have as a principal purpose the
22		avoidance of Illinois income tax, and is paid
23		pursuant to a contract or agreement that
24		reflects an arm's-length interest rate and
25		terms; or
26		(iii) the taxpayer can establish, based on

HB3872 Engrossed - 35 - LRB096 09597 HLH 19758 b
1		clear and convincing evidence, that the interest
2		paid, accrued, or incurred relates to a contract or
3		agreement entered into at arm's-length rates and
4		terms and the principal purpose for the payment is
5		not federal or Illinois tax avoidance; or
6		(iv) an item of interest paid, accrued, or
7		incurred, directly or indirectly, to a person if
8		the taxpayer establishes by clear and convincing
9		evidence that the adjustments are unreasonable; or
10		if the taxpayer and the Director agree in writing
11		to the application or use of an alternative method
12		of apportionment under Section 304(f).
13		Nothing in this subsection shall preclude the
14		Director from making any other adjustment
15		otherwise allowed under Section 404 of this Act for
16		any tax year beginning after the effective date of
17		this amendment provided such adjustment is made
18		pursuant to regulation adopted by the Department
19		and such regulations provide methods and standards
20		by which the Department will utilize its authority
21		under Section 404 of this Act;
22		(E-13) An amount equal to the amount of intangible
23		expenses and costs otherwise allowed as a deduction in
24		computing base income, and that were paid, accrued, or
25		incurred, directly or indirectly, (i) for taxable
26		years ending on or after December 31, 2004, to a

HB3872 Engrossed - 36 - LRB096 09597 HLH 19758 b
1		foreign person who would be a member of the same
2		unitary business group but for the fact that the
3		foreign person's business activity outside the United
4		States is 80% or more of that person's total business
5		activity and (ii) for taxable years ending on or after
6		December 31, 2008, to a person who would be a member of
7		the same unitary business group but for the fact that
8		the person is prohibited under Section 1501(a)(27)
9		from being included in the unitary business group
10		because he or she is ordinarily required to apportion
11		business income under different subsections of Section
12		304. The addition modification required by this
13		subparagraph shall be reduced to the extent that
14		dividends were included in base income of the unitary
15		group for the same taxable year and received by the
16		taxpayer or by a member of the taxpayer's unitary
17		business group (including amounts included in gross
18		income pursuant to Sections 951 through 964 of the
19		Internal Revenue Code and amounts included in gross
20		income under Section 78 of the Internal Revenue Code)
21		with respect to the stock of the same person to whom
22		the intangible expenses and costs were directly or
23		indirectly paid, incurred, or accrued. The preceding
24		sentence shall not apply to the extent that the same
25		dividends caused a reduction to the addition
26		modification required under Section 203(b)(2)(E-12) of

HB3872 Engrossed - 37 - LRB096 09597 HLH 19758 b
1		this Act. As used in this subparagraph, the term
2		"intangible expenses and costs" includes (1) expenses,
3		losses, and costs for, or related to, the direct or
4		indirect acquisition, use, maintenance or management,
5		ownership, sale, exchange, or any other disposition of
6		intangible property; (2) losses incurred, directly or
7		indirectly, from factoring transactions or discounting
8		transactions; (3) royalty, patent, technical, and
9		copyright fees; (4) licensing fees; and (5) other
10		similar expenses and costs. For purposes of this
11		subparagraph, "intangible property" includes patents,
12		patent applications, trade names, trademarks, service
13		marks, copyrights, mask works, trade secrets, and
14		similar types of intangible assets.
15		This paragraph shall not apply to the following:
16		(i) any item of intangible expenses or costs
17		paid, accrued, or incurred, directly or
18		indirectly, from a transaction with a person who is
19		subject in a foreign country or state, other than a
20		state which requires mandatory unitary reporting,
21		to a tax on or measured by net income with respect
22		to such item; or
23		(ii) any item of intangible expense or cost
24		paid, accrued, or incurred, directly or
25		indirectly, if the taxpayer can establish, based
26		on a preponderance of the evidence, both of the

HB3872 Engrossed - 38 - LRB096 09597 HLH 19758 b
1		following:
2		(a) the person during the same taxable
3		year paid, accrued, or incurred, the
4		intangible expense or cost to a person that is
5		not a related member, and
6		(b) the transaction giving rise to the
7		intangible expense or cost between the
8		taxpayer and the person did not have as a
9		principal purpose the avoidance of Illinois
10		income tax, and is paid pursuant to a contract
11		or agreement that reflects arm's-length terms;
12		or
13		(iii) any item of intangible expense or cost
14		paid, accrued, or incurred, directly or
15		indirectly, from a transaction with a person if the
16		taxpayer establishes by clear and convincing
17		evidence, that the adjustments are unreasonable;
18		or if the taxpayer and the Director agree in
19		writing to the application or use of an alternative
20		method of apportionment under Section 304(f);
21		Nothing in this subsection shall preclude the
22		Director from making any other adjustment
23		otherwise allowed under Section 404 of this Act for
24		any tax year beginning after the effective date of
25		this amendment provided such adjustment is made
26		pursuant to regulation adopted by the Department

HB3872 Engrossed - 39 - LRB096 09597 HLH 19758 b
1		and such regulations provide methods and standards
2		by which the Department will utilize its authority
3		under Section 404 of this Act;
4		(E-14) For taxable years ending on or after
5		December 31, 2008, an amount equal to the amount of
6		insurance premium expenses and costs otherwise allowed
7		as a deduction in computing base income, and that were
8		paid, accrued, or incurred, directly or indirectly, to
9		a person who would be a member of the same unitary
10		business group but for the fact that the person is
11		prohibited under Section 1501(a)(27) from being
12		included in the unitary business group because he or
13		she is ordinarily required to apportion business
14		income under different subsections of Section 304. The
15		addition modification required by this subparagraph
16		shall be reduced to the extent that dividends were
17		included in base income of the unitary group for the
18		same taxable year and received by the taxpayer or by a
19		member of the taxpayer's unitary business group
20		(including amounts included in gross income under
21		Sections 951 through 964 of the Internal Revenue Code
22		and amounts included in gross income under Section 78
23		of the Internal Revenue Code) with respect to the stock
24		of the same person to whom the premiums and costs were
25		directly or indirectly paid, incurred, or accrued. The
26		preceding sentence does not apply to the extent that

HB3872 Engrossed - 40 - LRB096 09597 HLH 19758 b
1		the same dividends caused a reduction to the addition
2		modification required under Section 203(b)(2)(E-12) or
3		Section 203(b)(2)(E-13) of this Act;
4		(E-15) For taxable years beginning after December
5		31, 2008, any deduction for dividends paid by a captive
6		real estate investment trust that is allowed to a real
7		estate investment trust under Section 857(b)(2)(B) of
8		the Internal Revenue Code for dividends paid;
9		(E-20) For taxable years ending on or after
10		December 31, 2009, any deduction otherwise allowed for
11		the taxable year for compensation from which Illinois
12		income tax is required to be withheld under Article 7
13		of this Act, to the extent the required withholding
14		from such wages has not been paid over to the
15		Department.
16		and by deducting from the total so obtained the sum of the
17		following amounts:
18		(F) An amount equal to the amount of any tax
19		imposed by this Act which was refunded to the taxpayer
20		and included in such total for the taxable year;
21		(G) An amount equal to any amount included in such
22		total under Section 78 of the Internal Revenue Code;
23		(H) In the case of a regulated investment company,
24		an amount equal to the amount of exempt interest
25		dividends as defined in subsection (b) (5) of Section
26		852 of the Internal Revenue Code, paid to shareholders

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1		for the taxable year;
2		(I) With the exception of any amounts subtracted
3		under subparagraph (J), an amount equal to the sum of
4		all amounts disallowed as deductions by (i) Sections
5		171(a) (2), and 265(a)(2) and amounts disallowed as
6		interest expense by Section 291(a)(3) of the Internal
7		Revenue Code, as now or hereafter amended, and all
8		amounts of expenses allocable to interest and
9		disallowed as deductions by Section 265(a)(1) of the
10		Internal Revenue Code, as now or hereafter amended; and
11		(ii) for taxable years ending on or after August 13,
12		1999, Sections 171(a)(2), 265, 280C, 291(a)(3), and
13		832(b)(5)(B)(i) of the Internal Revenue Code; the
14		provisions of this subparagraph are exempt from the
15		provisions of Section 250;
16		(J) An amount equal to all amounts included in such
17		total which are exempt from taxation by this State
18		either by reason of its statutes or Constitution or by
19		reason of the Constitution, treaties or statutes of the
20		United States; provided that, in the case of any
21		statute of this State that exempts income derived from
22		bonds or other obligations from the tax imposed under
23		this Act, the amount exempted shall be the interest net
24		of bond premium amortization;
25		(K) An amount equal to those dividends included in
26		such total which were paid by a corporation which

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1		conducts business operations in an Enterprise Zone or
2		zones created under the Illinois Enterprise Zone Act or
3		a River Edge Redevelopment Zone or zones created under
4		the River Edge Redevelopment Zone Act and conducts
5		substantially all of its operations in an Enterprise
6		Zone or zones or a River Edge Redevelopment Zone or
7		zones. This subparagraph (K) is exempt from the
8		provisions of Section 250;
9		(L) An amount equal to those dividends included in
10		such total that were paid by a corporation that
11		conducts business operations in a federally designated
12		Foreign Trade Zone or Sub-Zone and that is designated a
13		High Impact Business located in Illinois; provided
14		that dividends eligible for the deduction provided in
15		subparagraph (K) of paragraph 2 of this subsection
16		shall not be eligible for the deduction provided under
17		this subparagraph (L);
18		(M) For any taxpayer that is a financial
19		organization within the meaning of Section 304(c) of
20		this Act, an amount included in such total as interest
21		income from a loan or loans made by such taxpayer to a
22		borrower, to the extent that such a loan is secured by
23		property which is eligible for the Enterprise Zone
24		Investment Credit or the River Edge Redevelopment Zone
25		Investment Credit. To determine the portion of a loan
26		or loans that is secured by property eligible for a

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1		Section 201(f) investment credit to the borrower, the
2		entire principal amount of the loan or loans between
3		the taxpayer and the borrower should be divided into
4		the basis of the Section 201(f) investment credit
5		property which secures the loan or loans, using for
6		this purpose the original basis of such property on the
7		date that it was placed in service in the Enterprise
8		Zone or the River Edge Redevelopment Zone. The
9		subtraction modification available to taxpayer in any
10		year under this subsection shall be that portion of the
11		total interest paid by the borrower with respect to
12		such loan attributable to the eligible property as
13		calculated under the previous sentence. This
14		subparagraph (M) is exempt from the provisions of
15		Section 250;
16		(M-1) For any taxpayer that is a financial
17		organization within the meaning of Section 304(c) of
18		this Act, an amount included in such total as interest
19		income from a loan or loans made by such taxpayer to a
20		borrower, to the extent that such a loan is secured by
21		property which is eligible for the High Impact Business
22		Investment Credit. To determine the portion of a loan
23		or loans that is secured by property eligible for a
24		Section 201(h) investment credit to the borrower, the
25		entire principal amount of the loan or loans between
26		the taxpayer and the borrower should be divided into

HB3872 Engrossed - 44 - LRB096 09597 HLH 19758 b
1		the basis of the Section 201(h) investment credit
2		property which secures the loan or loans, using for
3		this purpose the original basis of such property on the
4		date that it was placed in service in a federally
5		designated Foreign Trade Zone or Sub-Zone located in
6		Illinois. No taxpayer that is eligible for the
7		deduction provided in subparagraph (M) of paragraph
8		(2) of this subsection shall be eligible for the
9		deduction provided under this subparagraph (M-1). The
10		subtraction modification available to taxpayers in any
11		year under this subsection shall be that portion of the
12		total interest paid by the borrower with respect to
13		such loan attributable to the eligible property as
14		calculated under the previous sentence;
15		(N) Two times any contribution made during the
16		taxable year to a designated zone organization to the
17		extent that the contribution (i) qualifies as a
18		charitable contribution under subsection (c) of
19		Section 170 of the Internal Revenue Code and (ii) must,
20		by its terms, be used for a project approved by the
21		Department of Commerce and Economic Opportunity under
22		Section 11 of the Illinois Enterprise Zone Act or under
23		Section 10-10 of the River Edge Redevelopment Zone Act.
24		This subparagraph (N) is exempt from the provisions of
25		Section 250;
26		(O) An amount equal to: (i) 85% for taxable years

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1		ending on or before December 31, 1992, or, a percentage
2		equal to the percentage allowable under Section
3		243(a)(1) of the Internal Revenue Code of 1986 for
4		taxable years ending after December 31, 1992, of the
5		amount by which dividends included in taxable income
6		and received from a corporation that is not created or
7		organized under the laws of the United States or any
8		state or political subdivision thereof, including, for
9		taxable years ending on or after December 31, 1988,
10		dividends received or deemed received or paid or deemed
11		paid under Sections 951 through 964 of the Internal
12		Revenue Code, exceed the amount of the modification
13		provided under subparagraph (G) of paragraph (2) of
14		this subsection (b) which is related to such dividends,
15		and including, for taxable years ending on or after
16		December 31, 2008, dividends received from a captive
17		real estate investment trust; plus (ii) 100% of the
18		amount by which dividends, included in taxable income
19		and received, including, for taxable years ending on or
20		after December 31, 1988, dividends received or deemed
21		received or paid or deemed paid under Sections 951
22		through 964 of the Internal Revenue Code and including,
23		for taxable years ending on or after December 31, 2008,
24		dividends received from a captive real estate
25		investment trust, from any such corporation specified
26		in clause (i) that would but for the provisions of

HB3872 Engrossed - 46 - LRB096 09597 HLH 19758 b
1		Section 1504 (b) (3) of the Internal Revenue Code be
2		treated as a member of the affiliated group which
3		includes the dividend recipient, exceed the amount of
4		the modification provided under subparagraph (G) of
5		paragraph (2) of this subsection (b) which is related
6		to such dividends. This subparagraph (O) is exempt from
7		the provisions of Section 250 of this Act;
8		(P) An amount equal to any contribution made to a
9		job training project established pursuant to the Tax
10		Increment Allocation Redevelopment Act;
11		(Q) An amount equal to the amount of the deduction
12		used to compute the federal income tax credit for
13		restoration of substantial amounts held under claim of
14		right for the taxable year pursuant to Section 1341 of
15		the Internal Revenue Code of 1986;
16		(R) On and after July 20, 1999, in the case of an
17		attorney-in-fact with respect to whom an interinsurer
18		or a reciprocal insurer has made the election under
19		Section 835 of the Internal Revenue Code, 26 U.S.C.
20		835, an amount equal to the excess, if any, of the
21		amounts paid or incurred by that interinsurer or
22		reciprocal insurer in the taxable year to the
23		attorney-in-fact over the deduction allowed to that
24		interinsurer or reciprocal insurer with respect to the
25		attorney-in-fact under Section 835(b) of the Internal
26		Revenue Code for the taxable year; the provisions of

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1		this subparagraph are exempt from the provisions of
2		Section 250;
3		(S) For taxable years ending on or after December
4		31, 1997, in the case of a Subchapter S corporation, an
5		amount equal to all amounts of income allocable to a
6		shareholder subject to the Personal Property Tax
7		Replacement Income Tax imposed by subsections (c) and
8		(d) of Section 201 of this Act, including amounts
9		allocable to organizations exempt from federal income
10		tax by reason of Section 501(a) of the Internal Revenue
11		Code. This subparagraph (S) is exempt from the
12		provisions of Section 250;
13		(T) For taxable years 2001 and thereafter, for the
14		taxable year in which the bonus depreciation deduction
15		is taken on the taxpayer's federal income tax return
16		under subsection (k) of Section 168 of the Internal
17		Revenue Code and for each applicable taxable year
18		thereafter, an amount equal to "x", where:
19		(1) "y" equals the amount of the depreciation
20		deduction taken for the taxable year on the
21		taxpayer's federal income tax return on property
22		for which the bonus depreciation deduction was
23		taken in any year under subsection (k) of Section
24		168 of the Internal Revenue Code, but not including
25		the bonus depreciation deduction;
26		(2) for taxable years ending on or before

HB3872 Engrossed - 48 - LRB096 09597 HLH 19758 b
1		December 31, 2005, "x" equals "y" multiplied by 30
2		and then divided by 70 (or "y" multiplied by
3		0.429); and
4		(3) for taxable years ending after December
5		31, 2005:
6		(i) for property on which a bonus
7		depreciation deduction of 30% of the adjusted
8		basis was taken, "x" equals "y" multiplied by
9		30 and then divided by 70 (or "y" multiplied by
10		0.429); and
11		(ii) for property on which a bonus
12		depreciation deduction of 50% of the adjusted
13		basis was taken, "x" equals "y" multiplied by
14		1.0.
15		The aggregate amount deducted under this
16		subparagraph in all taxable years for any one piece of
17		property may not exceed the amount of the bonus
18		depreciation deduction taken on that property on the
19		taxpayer's federal income tax return under subsection
20		(k) of Section 168 of the Internal Revenue Code. This
21		subparagraph (T) is exempt from the provisions of
22		Section 250;
23		(U) If the taxpayer sells, transfers, abandons, or
24		otherwise disposes of property for which the taxpayer
25		was required in any taxable year to make an addition
26		modification under subparagraph (E-10), then an amount

HB3872 Engrossed - 49 - LRB096 09597 HLH 19758 b
1		equal to that addition modification.
2		If the taxpayer continues to own property through
3		the last day of the last tax year for which the
4		taxpayer may claim a depreciation deduction for
5		federal income tax purposes and for which the taxpayer
6		was required in any taxable year to make an addition
7		modification under subparagraph (E-10), then an amount
8		equal to that addition modification.
9		The taxpayer is allowed to take the deduction under
10		this subparagraph only once with respect to any one
11		piece of property.
12		This subparagraph (U) is exempt from the
13		provisions of Section 250;
14		(V) The amount of: (i) any interest income (net of
15		the deductions allocable thereto) taken into account
16		for the taxable year with respect to a transaction with
17		a taxpayer that is required to make an addition
18		modification with respect to such transaction under
19		Section 203(a)(2)(D-17), 203(b)(2)(E-12),
20		203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
21		the amount of such addition modification, (ii) any
22		income from intangible property (net of the deductions
23		allocable thereto) taken into account for the taxable
24		year with respect to a transaction with a taxpayer that
25		is required to make an addition modification with
26		respect to such transaction under Section

HB3872 Engrossed - 50 - LRB096 09597 HLH 19758 b
1		203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
2		203(d)(2)(D-8), but not to exceed the amount of such
3		addition modification, and (iii) any insurance premium
4		income (net of deductions allocable thereto) taken
5		into account for the taxable year with respect to a
6		transaction with a taxpayer that is required to make an
7		addition modification with respect to such transaction
8		under Section 203(a)(2)(D-19), Section
9		203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
10		203(d)(2)(D-9), but not to exceed the amount of that
11		addition modification. This subparagraph (V) is exempt
12		from the provisions of Section 250;
13		(W) An amount equal to the interest income taken
14		into account for the taxable year (net of the
15		deductions allocable thereto) with respect to
16		transactions with (i) a foreign person who would be a
17		member of the taxpayer's unitary business group but for
18		the fact that the foreign person's business activity
19		outside the United States is 80% or more of that
20		person's total business activity and (ii) for taxable
21		years ending on or after December 31, 2008, to a person
22		who would be a member of the same unitary business
23		group but for the fact that the person is prohibited
24		under Section 1501(a)(27) from being included in the
25		unitary business group because he or she is ordinarily
26		required to apportion business income under different

HB3872 Engrossed - 51 - LRB096 09597 HLH 19758 b
1		subsections of Section 304, but not to exceed the
2		addition modification required to be made for the same
3		taxable year under Section 203(b)(2)(E-12) for
4		interest paid, accrued, or incurred, directly or
5		indirectly, to the same person. This subparagraph (W)
6		is exempt from the provisions of Section 250; and
7		(X) An amount equal to the income from intangible
8		property taken into account for the taxable year (net
9		of the deductions allocable thereto) with respect to
10		transactions with (i) a foreign person who would be a
11		member of the taxpayer's unitary business group but for
12		the fact that the foreign person's business activity
13		outside the United States is 80% or more of that
14		person's total business activity and (ii) for taxable
15		years ending on or after December 31, 2008, to a person
16		who would be a member of the same unitary business
17		group but for the fact that the person is prohibited
18		under Section 1501(a)(27) from being included in the
19		unitary business group because he or she is ordinarily
20		required to apportion business income under different
21		subsections of Section 304, but not to exceed the
22		addition modification required to be made for the same
23		taxable year under Section 203(b)(2)(E-13) for
24		intangible expenses and costs paid, accrued, or
25		incurred, directly or indirectly, to the same foreign
26		person. This subparagraph (X) is exempt from the

HB3872 Engrossed - 52 - LRB096 09597 HLH 19758 b
1		provisions of Section 250. (Y)
2		(3) Special rule. For purposes of paragraph (2) (A),
3		"gross income" in the case of a life insurance company, for
4		tax years ending on and after December 31, 1994, shall mean
5		the gross investment income for the taxable year.
6		(c) Trusts and estates.
7		(1) In general. In the case of a trust or estate, base
8		income means an amount equal to the taxpayer's taxable
9		income for the taxable year as modified by paragraph (2).
10		(2) Modifications. Subject to the provisions of
11		paragraph (3), the taxable income referred to in paragraph
12		(1) shall be modified by adding thereto the sum of the
13		following amounts:
14		(A) An amount equal to all amounts paid or accrued
15		to the taxpayer as interest or dividends during the
16		taxable year to the extent excluded from gross income
17		in the computation of taxable income;
18		(B) In the case of (i) an estate, $600; (ii) a
19		trust which, under its governing instrument, is
20		required to distribute all of its income currently,
21		$300; and (iii) any other trust, $100, but in each such
22		case, only to the extent such amount was deducted in
23		the computation of taxable income;
24		(C) An amount equal to the amount of tax imposed by
25		this Act to the extent deducted from gross income in

HB3872 Engrossed - 53 - LRB096 09597 HLH 19758 b
1		the computation of taxable income for the taxable year;
2		(D) The amount of any net operating loss deduction
3		taken in arriving at taxable income, other than a net
4		operating loss carried forward from a taxable year
5		ending prior to December 31, 1986;
6		(E) For taxable years in which a net operating loss
7		carryback or carryforward from a taxable year ending
8		prior to December 31, 1986 is an element of taxable
9		income under paragraph (1) of subsection (e) or
10		subparagraph (E) of paragraph (2) of subsection (e),
11		the amount by which addition modifications other than
12		those provided by this subparagraph (E) exceeded
13		subtraction modifications in such taxable year, with
14		the following limitations applied in the order that
15		they are listed:
16		(i) the addition modification relating to the
17		net operating loss carried back or forward to the
18		taxable year from any taxable year ending prior to
19		December 31, 1986 shall be reduced by the amount of
20		addition modification under this subparagraph (E)
21		which related to that net operating loss and which
22		was taken into account in calculating the base
23		income of an earlier taxable year, and
24		(ii) the addition modification relating to the
25		net operating loss carried back or forward to the
26		taxable year from any taxable year ending prior to

HB3872 Engrossed - 54 - LRB096 09597 HLH 19758 b
1		December 31, 1986 shall not exceed the amount of
2		such carryback or carryforward;
3		For taxable years in which there is a net operating
4		loss carryback or carryforward from more than one other
5		taxable year ending prior to December 31, 1986, the
6		addition modification provided in this subparagraph
7		(E) shall be the sum of the amounts computed
8		independently under the preceding provisions of this
9		subparagraph (E) for each such taxable year;
10		(F) For taxable years ending on or after January 1,
11		1989, an amount equal to the tax deducted pursuant to
12		Section 164 of the Internal Revenue Code if the trust
13		or estate is claiming the same tax for purposes of the
14		Illinois foreign tax credit under Section 601 of this
15		Act;
16		(G) An amount equal to the amount of the capital
17		gain deduction allowable under the Internal Revenue
18		Code, to the extent deducted from gross income in the
19		computation of taxable income;
20		(G-5) For taxable years ending after December 31,
21		1997, an amount equal to any eligible remediation costs
22		that the trust or estate deducted in computing adjusted
23		gross income and for which the trust or estate claims a
24		credit under subsection (l) of Section 201;
25		(G-10) For taxable years 2001 and thereafter, an
26		amount equal to the bonus depreciation deduction taken

HB3872 Engrossed - 55 - LRB096 09597 HLH 19758 b
1		on the taxpayer's federal income tax return for the
2		taxable year under subsection (k) of Section 168 of the
3		Internal Revenue Code; and
4		(G-11) If the taxpayer sells, transfers, abandons,
5		or otherwise disposes of property for which the
6		taxpayer was required in any taxable year to make an
7		addition modification under subparagraph (G-10), then
8		an amount equal to the aggregate amount of the
9		deductions taken in all taxable years under
10		subparagraph (R) with respect to that property.
11		If the taxpayer continues to own property through
12		the last day of the last tax year for which the
13		taxpayer may claim a depreciation deduction for
14		federal income tax purposes and for which the taxpayer
15		was allowed in any taxable year to make a subtraction
16		modification under subparagraph (R), then an amount
17		equal to that subtraction modification.
18		The taxpayer is required to make the addition
19		modification under this subparagraph only once with
20		respect to any one piece of property;
21		(G-12) An amount equal to the amount otherwise
22		allowed as a deduction in computing base income for
23		interest paid, accrued, or incurred, directly or
24		indirectly, (i) for taxable years ending on or after
25		December 31, 2004, to a foreign person who would be a
26		member of the same unitary business group but for the

HB3872 Engrossed - 56 - LRB096 09597 HLH 19758 b
1		fact that the foreign person's business activity
2		outside the United States is 80% or more of the foreign
3		person's total business activity and (ii) for taxable
4		years ending on or after December 31, 2008, to a person
5		who would be a member of the same unitary business
6		group but for the fact that the person is prohibited
7		under Section 1501(a)(27) from being included in the
8		unitary business group because he or she is ordinarily
9		required to apportion business income under different
10		subsections of Section 304. The addition modification
11		required by this subparagraph shall be reduced to the
12		extent that dividends were included in base income of
13		the unitary group for the same taxable year and
14		received by the taxpayer or by a member of the
15		taxpayer's unitary business group (including amounts
16		included in gross income pursuant to Sections 951
17		through 964 of the Internal Revenue Code and amounts
18		included in gross income under Section 78 of the
19		Internal Revenue Code) with respect to the stock of the
20		same person to whom the interest was paid, accrued, or
21		incurred.
22		This paragraph shall not apply to the following:
23		(i) an item of interest paid, accrued, or
24		incurred, directly or indirectly, to a person who
25		is subject in a foreign country or state, other
26		than a state which requires mandatory unitary

HB3872 Engrossed - 57 - LRB096 09597 HLH 19758 b
1		reporting, to a tax on or measured by net income
2		with respect to such interest; or
3		(ii) an item of interest paid, accrued, or
4		incurred, directly or indirectly, to a person if
5		the taxpayer can establish, based on a
6		preponderance of the evidence, both of the
7		following:
8		(a) the person, during the same taxable
9		year, paid, accrued, or incurred, the interest
10		to a person that is not a related member, and
11		(b) the transaction giving rise to the
12		interest expense between the taxpayer and the
13		person did not have as a principal purpose the
14		avoidance of Illinois income tax, and is paid
15		pursuant to a contract or agreement that
16		reflects an arm's-length interest rate and
17		terms; or
18		(iii) the taxpayer can establish, based on
19		clear and convincing evidence, that the interest
20		paid, accrued, or incurred relates to a contract or
21		agreement entered into at arm's-length rates and
22		terms and the principal purpose for the payment is
23		not federal or Illinois tax avoidance; or
24		(iv) an item of interest paid, accrued, or
25		incurred, directly or indirectly, to a person if
26		the taxpayer establishes by clear and convincing

HB3872 Engrossed - 58 - LRB096 09597 HLH 19758 b
1		evidence that the adjustments are unreasonable; or
2		if the taxpayer and the Director agree in writing
3		to the application or use of an alternative method
4		of apportionment under Section 304(f).
5		Nothing in this subsection shall preclude the
6		Director from making any other adjustment
7		otherwise allowed under Section 404 of this Act for
8		any tax year beginning after the effective date of
9		this amendment provided such adjustment is made
10		pursuant to regulation adopted by the Department
11		and such regulations provide methods and standards
12		by which the Department will utilize its authority
13		under Section 404 of this Act;
14		(G-13) An amount equal to the amount of intangible
15		expenses and costs otherwise allowed as a deduction in
16		computing base income, and that were paid, accrued, or
17		incurred, directly or indirectly, (i) for taxable
18		years ending on or after December 31, 2004, to a
19		foreign person who would be a member of the same
20		unitary business group but for the fact that the
21		foreign person's business activity outside the United
22		States is 80% or more of that person's total business
23		activity and (ii) for taxable years ending on or after
24		December 31, 2008, to a person who would be a member of
25		the same unitary business group but for the fact that
26		the person is prohibited under Section 1501(a)(27)

HB3872 Engrossed - 59 - LRB096 09597 HLH 19758 b
1		from being included in the unitary business group
2		because he or she is ordinarily required to apportion
3		business income under different subsections of Section
4		304. The addition modification required by this
5		subparagraph shall be reduced to the extent that
6		dividends were included in base income of the unitary
7		group for the same taxable year and received by the
8		taxpayer or by a member of the taxpayer's unitary
9		business group (including amounts included in gross
10		income pursuant to Sections 951 through 964 of the
11		Internal Revenue Code and amounts included in gross
12		income under Section 78 of the Internal Revenue Code)
13		with respect to the stock of the same person to whom
14		the intangible expenses and costs were directly or
15		indirectly paid, incurred, or accrued. The preceding
16		sentence shall not apply to the extent that the same
17		dividends caused a reduction to the addition
18		modification required under Section 203(c)(2)(G-12) of
19		this Act. As used in this subparagraph, the term
20		"intangible expenses and costs" includes: (1)
21		expenses, losses, and costs for or related to the
22		direct or indirect acquisition, use, maintenance or
23		management, ownership, sale, exchange, or any other
24		disposition of intangible property; (2) losses
25		incurred, directly or indirectly, from factoring
26		transactions or discounting transactions; (3) royalty,

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1		patent, technical, and copyright fees; (4) licensing
2		fees; and (5) other similar expenses and costs. For
3		purposes of this subparagraph, "intangible property"
4		includes patents, patent applications, trade names,
5		trademarks, service marks, copyrights, mask works,
6		trade secrets, and similar types of intangible assets.
7		This paragraph shall not apply to the following:
8		(i) any item of intangible expenses or costs
9		paid, accrued, or incurred, directly or
10		indirectly, from a transaction with a person who is
11		subject in a foreign country or state, other than a
12		state which requires mandatory unitary reporting,
13		to a tax on or measured by net income with respect
14		to such item; or
15		(ii) any item of intangible expense or cost
16		paid, accrued, or incurred, directly or
17		indirectly, if the taxpayer can establish, based
18		on a preponderance of the evidence, both of the
19		following:
20		(a) the person during the same taxable
21		year paid, accrued, or incurred, the
22		intangible expense or cost to a person that is
23		not a related member, and
24		(b) the transaction giving rise to the
25		intangible expense or cost between the
26		taxpayer and the person did not have as a

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1		principal purpose the avoidance of Illinois
2		income tax, and is paid pursuant to a contract
3		or agreement that reflects arm's-length terms;
4		or
5		(iii) any item of intangible expense or cost
6		paid, accrued, or incurred, directly or
7		indirectly, from a transaction with a person if the
8		taxpayer establishes by clear and convincing
9		evidence, that the adjustments are unreasonable;
10		or if the taxpayer and the Director agree in
11		writing to the application or use of an alternative
12		method of apportionment under Section 304(f);
13		Nothing in this subsection shall preclude the
14		Director from making any other adjustment
15		otherwise allowed under Section 404 of this Act for
16		any tax year beginning after the effective date of
17		this amendment provided such adjustment is made
18		pursuant to regulation adopted by the Department
19		and such regulations provide methods and standards
20		by which the Department will utilize its authority
21		under Section 404 of this Act;
22		(G-14) For taxable years ending on or after
23		December 31, 2008, an amount equal to the amount of
24		insurance premium expenses and costs otherwise allowed
25		as a deduction in computing base income, and that were
26		paid, accrued, or incurred, directly or indirectly, to

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1		a person who would be a member of the same unitary
2		business group but for the fact that the person is
3		prohibited under Section 1501(a)(27) from being
4		included in the unitary business group because he or
5		she is ordinarily required to apportion business
6		income under different subsections of Section 304. The
7		addition modification required by this subparagraph
8		shall be reduced to the extent that dividends were
9		included in base income of the unitary group for the
10		same taxable year and received by the taxpayer or by a
11		member of the taxpayer's unitary business group
12		(including amounts included in gross income under
13		Sections 951 through 964 of the Internal Revenue Code
14		and amounts included in gross income under Section 78
15		of the Internal Revenue Code) with respect to the stock
16		of the same person to whom the premiums and costs were
17		directly or indirectly paid, incurred, or accrued. The
18		preceding sentence does not apply to the extent that
19		the same dividends caused a reduction to the addition
20		modification required under Section 203(c)(2)(G-12) or
21		Section 203(c)(2)(G-13) of this Act.
22		(G-15) For taxable years ending on or after
23		December 31, 2009, any deduction otherwise allowed for
24		the taxable year for compensation from which Illinois
25		income tax is required to be withheld under Article 7
26		of this Act, to the extent the required withholding

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1		from such wages has not been paid over to the
2		Department.
3		and by deducting from the total so obtained the sum of the
4		following amounts:
5		(H) An amount equal to all amounts included in such
6		total pursuant to the provisions of Sections 402(a),
7		402(c), 403(a), 403(b), 406(a), 407(a) and 408 of the
8		Internal Revenue Code or included in such total as
9		distributions under the provisions of any retirement
10		or disability plan for employees of any governmental
11		agency or unit, or retirement payments to retired
12		partners, which payments are excluded in computing net
13		earnings from self employment by Section 1402 of the
14		Internal Revenue Code and regulations adopted pursuant
15		thereto;
16		(I) The valuation limitation amount;
17		(J) An amount equal to the amount of any tax
18		imposed by this Act which was refunded to the taxpayer
19		and included in such total for the taxable year;
20		(K) An amount equal to all amounts included in
21		taxable income as modified by subparagraphs (A), (B),
22		(C), (D), (E), (F) and (G) which are exempt from
23		taxation by this State either by reason of its statutes
24		or Constitution or by reason of the Constitution,
25		treaties or statutes of the United States; provided
26		that, in the case of any statute of this State that

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1		exempts income derived from bonds or other obligations
2		from the tax imposed under this Act, the amount
3		exempted shall be the interest net of bond premium
4		amortization;
5		(L) With the exception of any amounts subtracted
6		under subparagraph (K), an amount equal to the sum of
7		all amounts disallowed as deductions by (i) Sections
8		171(a) (2) and 265(a)(2) of the Internal Revenue Code,
9		as now or hereafter amended, and all amounts of
10		expenses allocable to interest and disallowed as
11		deductions by Section 265(1) of the Internal Revenue
12		Code of 1954, as now or hereafter amended; and (ii) for
13		taxable years ending on or after August 13, 1999,
14		Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of
15		the Internal Revenue Code; the provisions of this
16		subparagraph are exempt from the provisions of Section
17		250;
18		(M) An amount equal to those dividends included in
19		such total which were paid by a corporation which
20		conducts business operations in an Enterprise Zone or
21		zones created under the Illinois Enterprise Zone Act or
22		a River Edge Redevelopment Zone or zones created under
23		the River Edge Redevelopment Zone Act and conducts
24		substantially all of its operations in an Enterprise
25		Zone or Zones or a River Edge Redevelopment Zone or
26		zones. This subparagraph (M) is exempt from the

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1		provisions of Section 250;
2		(N) An amount equal to any contribution made to a
3		job training project established pursuant to the Tax
4		Increment Allocation Redevelopment Act;
5		(O) An amount equal to those dividends included in
6		such total that were paid by a corporation that
7		conducts business operations in a federally designated
8		Foreign Trade Zone or Sub-Zone and that is designated a
9		High Impact Business located in Illinois; provided
10		that dividends eligible for the deduction provided in
11		subparagraph (M) of paragraph (2) of this subsection
12		shall not be eligible for the deduction provided under
13		this subparagraph (O);
14		(P) An amount equal to the amount of the deduction
15		used to compute the federal income tax credit for
16		restoration of substantial amounts held under claim of
17		right for the taxable year pursuant to Section 1341 of
18		the Internal Revenue Code of 1986;
19		(Q) For taxable year 1999 and thereafter, an amount
20		equal to the amount of any (i) distributions, to the
21		extent includible in gross income for federal income
22		tax purposes, made to the taxpayer because of his or
23		her status as a victim of persecution for racial or
24		religious reasons by Nazi Germany or any other Axis
25		regime or as an heir of the victim and (ii) items of
26		income, to the extent includible in gross income for

HB3872 Engrossed - 66 - LRB096 09597 HLH 19758 b
1		federal income tax purposes, attributable to, derived
2		from or in any way related to assets stolen from,
3		hidden from, or otherwise lost to a victim of
4		persecution for racial or religious reasons by Nazi
5		Germany or any other Axis regime immediately prior to,
6		during, and immediately after World War II, including,
7		but not limited to, interest on the proceeds receivable
8		as insurance under policies issued to a victim of
9		persecution for racial or religious reasons by Nazi
10		Germany or any other Axis regime by European insurance
11		companies immediately prior to and during World War II;
12		provided, however, this subtraction from federal
13		adjusted gross income does not apply to assets acquired
14		with such assets or with the proceeds from the sale of
15		such assets; provided, further, this paragraph shall
16		only apply to a taxpayer who was the first recipient of
17		such assets after their recovery and who is a victim of
18		persecution for racial or religious reasons by Nazi
19		Germany or any other Axis regime or as an heir of the
20		victim. The amount of and the eligibility for any
21		public assistance, benefit, or similar entitlement is
22		not affected by the inclusion of items (i) and (ii) of
23		this paragraph in gross income for federal income tax
24		purposes. This paragraph is exempt from the provisions
25		of Section 250;
26		(R) For taxable years 2001 and thereafter, for the

HB3872 Engrossed - 67 - LRB096 09597 HLH 19758 b
1		taxable year in which the bonus depreciation deduction
2		is taken on the taxpayer's federal income tax return
3		under subsection (k) of Section 168 of the Internal
4		Revenue Code and for each applicable taxable year
5		thereafter, an amount equal to "x", where:
6		(1) "y" equals the amount of the depreciation
7		deduction taken for the taxable year on the
8		taxpayer's federal income tax return on property
9		for which the bonus depreciation deduction was
10		taken in any year under subsection (k) of Section
11		168 of the Internal Revenue Code, but not including
12		the bonus depreciation deduction;
13		(2) for taxable years ending on or before
14		December 31, 2005, "x" equals "y" multiplied by 30
15		and then divided by 70 (or "y" multiplied by
16		0.429); and
17		(3) for taxable years ending after December
18		31, 2005:
19		(i) for property on which a bonus
20		depreciation deduction of 30% of the adjusted
21		basis was taken, "x" equals "y" multiplied by
22		30 and then divided by 70 (or "y" multiplied by
23		0.429); and
24		(ii) for property on which a bonus
25		depreciation deduction of 50% of the adjusted
26		basis was taken, "x" equals "y" multiplied by

HB3872 Engrossed - 68 - LRB096 09597 HLH 19758 b
1		1.0.
2		The aggregate amount deducted under this
3		subparagraph in all taxable years for any one piece of
4		property may not exceed the amount of the bonus
5		depreciation deduction taken on that property on the
6		taxpayer's federal income tax return under subsection
7		(k) of Section 168 of the Internal Revenue Code. This
8		subparagraph (R) is exempt from the provisions of
9		Section 250;
10		(S) If the taxpayer sells, transfers, abandons, or
11		otherwise disposes of property for which the taxpayer
12		was required in any taxable year to make an addition
13		modification under subparagraph (G-10), then an amount
14		equal to that addition modification.
15		If the taxpayer continues to own property through
16		the last day of the last tax year for which the
17		taxpayer may claim a depreciation deduction for
18		federal income tax purposes and for which the taxpayer
19		was required in any taxable year to make an addition
20		modification under subparagraph (G-10), then an amount
21		equal to that addition modification.
22		The taxpayer is allowed to take the deduction under
23		this subparagraph only once with respect to any one
24		piece of property.
25		This subparagraph (S) is exempt from the
26		provisions of Section 250;

HB3872 Engrossed - 69 - LRB096 09597 HLH 19758 b
1		(T) The amount of (i) any interest income (net of
2		the deductions allocable thereto) taken into account
3		for the taxable year with respect to a transaction with
4		a taxpayer that is required to make an addition
5		modification with respect to such transaction under
6		Section 203(a)(2)(D-17), 203(b)(2)(E-12),
7		203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
8		the amount of such addition modification and (ii) any
9		income from intangible property (net of the deductions
10		allocable thereto) taken into account for the taxable
11		year with respect to a transaction with a taxpayer that
12		is required to make an addition modification with
13		respect to such transaction under Section
14		203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
15		203(d)(2)(D-8), but not to exceed the amount of such
16		addition modification. This subparagraph (T) is exempt
17		from the provisions of Section 250;
18		(U) An amount equal to the interest income taken
19		into account for the taxable year (net of the
20		deductions allocable thereto) with respect to
21		transactions with (i) a foreign person who would be a
22		member of the taxpayer's unitary business group but for
23		the fact the foreign person's business activity
24		outside the United States is 80% or more of that
25		person's total business activity and (ii) for taxable
26		years ending on or after December 31, 2008, to a person

HB3872 Engrossed - 70 - LRB096 09597 HLH 19758 b
1		who would be a member of the same unitary business
2		group but for the fact that the person is prohibited
3		under Section 1501(a)(27) from being included in the
4		unitary business group because he or she is ordinarily
5		required to apportion business income under different
6		subsections of Section 304, but not to exceed the
7		addition modification required to be made for the same
8		taxable year under Section 203(c)(2)(G-12) for
9		interest paid, accrued, or incurred, directly or
10		indirectly, to the same person. This subparagraph (U)
11		is exempt from the provisions of Section 250; and
12		(V) An amount equal to the income from intangible
13		property taken into account for the taxable year (net
14		of the deductions allocable thereto) with respect to
15		transactions with (i) a foreign person who would be a
16		member of the taxpayer's unitary business group but for
17		the fact that the foreign person's business activity
18		outside the United States is 80% or more of that
19		person's total business activity and (ii) for taxable
20		years ending on or after December 31, 2008, to a person
21		who would be a member of the same unitary business
22		group but for the fact that the person is prohibited
23		under Section 1501(a)(27) from being included in the
24		unitary business group because he or she is ordinarily
25		required to apportion business income under different
26		subsections of Section 304, but not to exceed the

HB3872 Engrossed - 71 - LRB096 09597 HLH 19758 b
1		addition modification required to be made for the same
2		taxable year under Section 203(c)(2)(G-13) for
3		intangible expenses and costs paid, accrued, or
4		incurred, directly or indirectly, to the same foreign
5		person. This subparagraph (V) is exempt from the
6		provisions of Section 250. (W)
7		(3) Limitation. The amount of any modification
8		otherwise required under this subsection shall, under
9		regulations prescribed by the Department, be adjusted by
10		any amounts included therein which were properly paid,
11		credited, or required to be distributed, or permanently set
12		aside for charitable purposes pursuant to Internal Revenue
13		Code Section 642(c) during the taxable year.
14		(d) Partnerships.
15		(1) In general. In the case of a partnership, base
16		income means an amount equal to the taxpayer's taxable
17		income for the taxable year as modified by paragraph (2).
18		(2) Modifications. The taxable income referred to in
19		paragraph (1) shall be modified by adding thereto the sum
20		of the following amounts:
21		(A) An amount equal to all amounts paid or accrued
22		to the taxpayer as interest or dividends during the
23		taxable year to the extent excluded from gross income
24		in the computation of taxable income;
25		(B) An amount equal to the amount of tax imposed by

HB3872 Engrossed - 72 - LRB096 09597 HLH 19758 b
1		this Act to the extent deducted from gross income for
2		the taxable year;
3		(C) The amount of deductions allowed to the
4		partnership pursuant to Section 707 (c) of the Internal
5		Revenue Code in calculating its taxable income;
6		(D) An amount equal to the amount of the capital
7		gain deduction allowable under the Internal Revenue
8		Code, to the extent deducted from gross income in the
9		computation of taxable income;
10		(D-5) For taxable years 2001 and thereafter, an
11		amount equal to the bonus depreciation deduction taken
12		on the taxpayer's federal income tax return for the
13		taxable year under subsection (k) of Section 168 of the
14		Internal Revenue Code;
15		(D-6) If the taxpayer sells, transfers, abandons,
16		or otherwise disposes of property for which the
17		taxpayer was required in any taxable year to make an
18		addition modification under subparagraph (D-5), then
19		an amount equal to the aggregate amount of the
20		deductions taken in all taxable years under
21		subparagraph (O) with respect to that property.
22		If the taxpayer continues to own property through
23		the last day of the last tax year for which the
24		taxpayer may claim a depreciation deduction for
25		federal income tax purposes and for which the taxpayer
26		was allowed in any taxable year to make a subtraction

HB3872 Engrossed - 73 - LRB096 09597 HLH 19758 b
1		modification under subparagraph (O), then an amount
2		equal to that subtraction modification.
3		The taxpayer is required to make the addition
4		modification under this subparagraph only once with
5		respect to any one piece of property;
6		(D-7) An amount equal to the amount otherwise
7		allowed as a deduction in computing base income for
8		interest paid, accrued, or incurred, directly or
9		indirectly, (i) for taxable years ending on or after
10		December 31, 2004, to a foreign person who would be a
11		member of the same unitary business group but for the
12		fact the foreign person's business activity outside
13		the United States is 80% or more of the foreign
14		person's total business activity and (ii) for taxable
15		years ending on or after December 31, 2008, to a person
16		who would be a member of the same unitary business
17		group but for the fact that the person is prohibited
18		under Section 1501(a)(27) from being included in the
19		unitary business group because he or she is ordinarily
20		required to apportion business income under different
21		subsections of Section 304. The addition modification
22		required by this subparagraph shall be reduced to the
23		extent that dividends were included in base income of
24		the unitary group for the same taxable year and
25		received by the taxpayer or by a member of the
26		taxpayer's unitary business group (including amounts

HB3872 Engrossed - 74 - LRB096 09597 HLH 19758 b
1		included in gross income pursuant to Sections 951
2		through 964 of the Internal Revenue Code and amounts
3		included in gross income under Section 78 of the
4		Internal Revenue Code) with respect to the stock of the
5		same person to whom the interest was paid, accrued, or
6		incurred.
7		This paragraph shall not apply to the following:
8		(i) an item of interest paid, accrued, or
9		incurred, directly or indirectly, to a person who
10		is subject in a foreign country or state, other
11		than a state which requires mandatory unitary
12		reporting, to a tax on or measured by net income
13		with respect to such interest; or
14		(ii) an item of interest paid, accrued, or
15		incurred, directly or indirectly, to a person if
16		the taxpayer can establish, based on a
17		preponderance of the evidence, both of the
18		following:
19		(a) the person, during the same taxable
20		year, paid, accrued, or incurred, the interest
21		to a person that is not a related member, and
22		(b) the transaction giving rise to the
23		interest expense between the taxpayer and the
24		person did not have as a principal purpose the
25		avoidance of Illinois income tax, and is paid
26		pursuant to a contract or agreement that

HB3872 Engrossed - 75 - LRB096 09597 HLH 19758 b
1		reflects an arm's-length interest rate and
2		terms; or
3		(iii) the taxpayer can establish, based on
4		clear and convincing evidence, that the interest
5		paid, accrued, or incurred relates to a contract or
6		agreement entered into at arm's-length rates and
7		terms and the principal purpose for the payment is
8		not federal or Illinois tax avoidance; or
9		(iv) an item of interest paid, accrued, or
10		incurred, directly or indirectly, to a person if
11		the taxpayer establishes by clear and convincing
12		evidence that the adjustments are unreasonable; or
13		if the taxpayer and the Director agree in writing
14		to the application or use of an alternative method
15		of apportionment under Section 304(f).
16		Nothing in this subsection shall preclude the
17		Director from making any other adjustment
18		otherwise allowed under Section 404 of this Act for
19		any tax year beginning after the effective date of
20		this amendment provided such adjustment is made
21		pursuant to regulation adopted by the Department
22		and such regulations provide methods and standards
23		by which the Department will utilize its authority
24		under Section 404 of this Act; and
25		(D-8) An amount equal to the amount of intangible
26		expenses and costs otherwise allowed as a deduction in

HB3872 Engrossed - 76 - LRB096 09597 HLH 19758 b
1		computing base income, and that were paid, accrued, or
2		incurred, directly or indirectly, (i) for taxable
3		years ending on or after December 31, 2004, to a
4		foreign person who would be a member of the same
5		unitary business group but for the fact that the
6		foreign person's business activity outside the United
7		States is 80% or more of that person's total business
8		activity and (ii) for taxable years ending on or after
9		December 31, 2008, to a person who would be a member of
10		the same unitary business group but for the fact that
11		the person is prohibited under Section 1501(a)(27)
12		from being included in the unitary business group
13		because he or she is ordinarily required to apportion
14		business income under different subsections of Section
15		304. The addition modification required by this
16		subparagraph shall be reduced to the extent that
17		dividends were included in base income of the unitary
18		group for the same taxable year and received by the
19		taxpayer or by a member of the taxpayer's unitary
20		business group (including amounts included in gross
21		income pursuant to Sections 951 through 964 of the
22		Internal Revenue Code and amounts included in gross
23		income under Section 78 of the Internal Revenue Code)
24		with respect to the stock of the same person to whom
25		the intangible expenses and costs were directly or
26		indirectly paid, incurred or accrued. The preceding

HB3872 Engrossed - 77 - LRB096 09597 HLH 19758 b
1		sentence shall not apply to the extent that the same
2		dividends caused a reduction to the addition
3		modification required under Section 203(d)(2)(D-7) of
4		this Act. As used in this subparagraph, the term
5		"intangible expenses and costs" includes (1) expenses,
6		losses, and costs for, or related to, the direct or
7		indirect acquisition, use, maintenance or management,
8		ownership, sale, exchange, or any other disposition of
9		intangible property; (2) losses incurred, directly or
10		indirectly, from factoring transactions or discounting
11		transactions; (3) royalty, patent, technical, and
12		copyright fees; (4) licensing fees; and (5) other
13		similar expenses and costs. For purposes of this
14		subparagraph, "intangible property" includes patents,
15		patent applications, trade names, trademarks, service
16		marks, copyrights, mask works, trade secrets, and
17		similar types of intangible assets;
18		This paragraph shall not apply to the following:
19		(i) any item of intangible expenses or costs
20		paid, accrued, or incurred, directly or
21		indirectly, from a transaction with a person who is
22		subject in a foreign country or state, other than a
23		state which requires mandatory unitary reporting,
24		to a tax on or measured by net income with respect
25		to such item; or
26		(ii) any item of intangible expense or cost

HB3872 Engrossed - 78 - LRB096 09597 HLH 19758 b
1		paid, accrued, or incurred, directly or
2		indirectly, if the taxpayer can establish, based
3		on a preponderance of the evidence, both of the
4		following:
5		(a) the person during the same taxable
6		year paid, accrued, or incurred, the
7		intangible expense or cost to a person that is
8		not a related member, and
9		(b) the transaction giving rise to the
10		intangible expense or cost between the
11		taxpayer and the person did not have as a
12		principal purpose the avoidance of Illinois
13		income tax, and is paid pursuant to a contract
14		or agreement that reflects arm's-length terms;
15		or
16		(iii) any item of intangible expense or cost
17		paid, accrued, or incurred, directly or
18		indirectly, from a transaction with a person if the
19		taxpayer establishes by clear and convincing
20		evidence, that the adjustments are unreasonable;
21		or if the taxpayer and the Director agree in
22		writing to the application or use of an alternative
23		method of apportionment under Section 304(f);
24		Nothing in this subsection shall preclude the
25		Director from making any other adjustment
26		otherwise allowed under Section 404 of this Act for

HB3872 Engrossed - 79 - LRB096 09597 HLH 19758 b
1		any tax year beginning after the effective date of
2		this amendment provided such adjustment is made
3		pursuant to regulation adopted by the Department
4		and such regulations provide methods and standards
5		by which the Department will utilize its authority
6		under Section 404 of this Act;
7		(D-9) For taxable years ending on or after December
8		31, 2008, an amount equal to the amount of insurance
9		premium expenses and costs otherwise allowed as a
10		deduction in computing base income, and that were paid,
11		accrued, or incurred, directly or indirectly, to a
12		person who would be a member of the same unitary
13		business group but for the fact that the person is
14		prohibited under Section 1501(a)(27) from being
15		included in the unitary business group because he or
16		she is ordinarily required to apportion business
17		income under different subsections of Section 304. The
18		addition modification required by this subparagraph
19		shall be reduced to the extent that dividends were
20		included in base income of the unitary group for the
21		same taxable year and received by the taxpayer or by a
22		member of the taxpayer's unitary business group
23		(including amounts included in gross income under
24		Sections 951 through 964 of the Internal Revenue Code
25		and amounts included in gross income under Section 78
26		of the Internal Revenue Code) with respect to the stock

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1		of the same person to whom the premiums and costs were
2		directly or indirectly paid, incurred, or accrued. The
3		preceding sentence does not apply to the extent that
4		the same dividends caused a reduction to the addition
5		modification required under Section 203(d)(2)(D-7) or
6		Section 203(d)(2)(D-8) of this Act.
7		(D-10) For taxable years ending on or after
8		December 31, 2009, any deduction otherwise allowed for
9		the taxable year for compensation from which Illinois
10		income tax is required to be withheld under Article 7
11		of this Act, to the extent the required withholding
12		from such wages has not been paid over to the
13		Department.
14		and by deducting from the total so obtained the following
15		amounts:
16		(E) The valuation limitation amount;
17		(F) An amount equal to the amount of any tax
18		imposed by this Act which was refunded to the taxpayer
19		and included in such total for the taxable year;
20		(G) An amount equal to all amounts included in
21		taxable income as modified by subparagraphs (A), (B),
22		(C) and (D) which are exempt from taxation by this
23		State either by reason of its statutes or Constitution
24		or by reason of the Constitution, treaties or statutes
25		of the United States; provided that, in the case of any
26		statute of this State that exempts income derived from

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1		bonds or other obligations from the tax imposed under
2		this Act, the amount exempted shall be the interest net
3		of bond premium amortization;
4		(H) Any income of the partnership which
5		constitutes personal service income as defined in
6		Section 1348 (b) (1) of the Internal Revenue Code (as
7		in effect December 31, 1981) or a reasonable allowance
8		for compensation paid or accrued for services rendered
9		by partners to the partnership, whichever is greater;
10		(I) An amount equal to all amounts of income
11		distributable to an entity subject to the Personal
12		Property Tax Replacement Income Tax imposed by
13		subsections (c) and (d) of Section 201 of this Act
14		including amounts distributable to organizations
15		exempt from federal income tax by reason of Section
16		501(a) of the Internal Revenue Code;
17		(J) With the exception of any amounts subtracted
18		under subparagraph (G), an amount equal to the sum of
19		all amounts disallowed as deductions by (i) Sections
20		171(a) (2), and 265(2) of the Internal Revenue Code of
21		1954, as now or hereafter amended, and all amounts of
22		expenses allocable to interest and disallowed as
23		deductions by Section 265(1) of the Internal Revenue
24		Code, as now or hereafter amended; and (ii) for taxable
25		years ending on or after August 13, 1999, Sections
26		171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the

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1		Internal Revenue Code; the provisions of this
2		subparagraph are exempt from the provisions of Section
3		250;
4		(K) An amount equal to those dividends included in
5		such total which were paid by a corporation which
6		conducts business operations in an Enterprise Zone or
7		zones created under the Illinois Enterprise Zone Act,
8		enacted by the 82nd General Assembly, or a River Edge
9		Redevelopment Zone or zones created under the River
10		Edge Redevelopment Zone Act and conducts substantially
11		all of its operations in an Enterprise Zone or Zones or
12		from a River Edge Redevelopment Zone or zones. This
13		subparagraph (K) is exempt from the provisions of
14		Section 250;
15		(L) An amount equal to any contribution made to a
16		job training project established pursuant to the Real
17		Property Tax Increment Allocation Redevelopment Act;
18		(M) An amount equal to those dividends included in
19		such total that were paid by a corporation that
20		conducts business operations in a federally designated
21		Foreign Trade Zone or Sub-Zone and that is designated a
22		High Impact Business located in Illinois; provided
23		that dividends eligible for the deduction provided in
24		subparagraph (K) of paragraph (2) of this subsection
25		shall not be eligible for the deduction provided under
26		this subparagraph (M);

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1		(N) An amount equal to the amount of the deduction
2		used to compute the federal income tax credit for
3		restoration of substantial amounts held under claim of
4		right for the taxable year pursuant to Section 1341 of
5		the Internal Revenue Code of 1986;
6		(O) For taxable years 2001 and thereafter, for the
7		taxable year in which the bonus depreciation deduction
8		is taken on the taxpayer's federal income tax return
9		under subsection (k) of Section 168 of the Internal
10		Revenue Code and for each applicable taxable year
11		thereafter, an amount equal to "x", where:
12		(1) "y" equals the amount of the depreciation
13		deduction taken for the taxable year on the
14		taxpayer's federal income tax return on property
15		for which the bonus depreciation deduction was
16		taken in any year under subsection (k) of Section
17		168 of the Internal Revenue Code, but not including
18		the bonus depreciation deduction;
19		(2) for taxable years ending on or before
20		December 31, 2005, "x" equals "y" multiplied by 30
21		and then divided by 70 (or "y" multiplied by
22		0.429); and
23		(3) for taxable years ending after December
24		31, 2005:
25		(i) for property on which a bonus
26		depreciation deduction of 30% of the adjusted

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1		basis was taken, "x" equals "y" multiplied by
2		30 and then divided by 70 (or "y" multiplied by
3		0.429); and
4		(ii) for property on which a bonus
5		depreciation deduction of 50% of the adjusted
6		basis was taken, "x" equals "y" multiplied by
7		1.0.
8		The aggregate amount deducted under this
9		subparagraph in all taxable years for any one piece of
10		property may not exceed the amount of the bonus
11		depreciation deduction taken on that property on the
12		taxpayer's federal income tax return under subsection
13		(k) of Section 168 of the Internal Revenue Code. This
14		subparagraph (O) is exempt from the provisions of
15		Section 250;
16		(P) If the taxpayer sells, transfers, abandons, or
17		otherwise disposes of property for which the taxpayer
18		was required in any taxable year to make an addition
19		modification under subparagraph (D-5), then an amount
20		equal to that addition modification.
21		If the taxpayer continues to own property through
22		the last day of the last tax year for which the
23		taxpayer may claim a depreciation deduction for
24		federal income tax purposes and for which the taxpayer
25		was required in any taxable year to make an addition
26		modification under subparagraph (D-5), then an amount

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1		equal to that addition modification.
2		The taxpayer is allowed to take the deduction under
3		this subparagraph only once with respect to any one
4		piece of property.
5		This subparagraph (P) is exempt from the
6		provisions of Section 250;
7		(Q) The amount of (i) any interest income (net of
8		the deductions allocable thereto) taken into account
9		for the taxable year with respect to a transaction with
10		a taxpayer that is required to make an addition
11		modification with respect to such transaction under
12		Section 203(a)(2)(D-17), 203(b)(2)(E-12),
13		203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
14		the amount of such addition modification and (ii) any
15		income from intangible property (net of the deductions
16		allocable thereto) taken into account for the taxable
17		year with respect to a transaction with a taxpayer that
18		is required to make an addition modification with
19		respect to such transaction under Section
20		203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
21		203(d)(2)(D-8), but not to exceed the amount of such
22		addition modification. This subparagraph (Q) is exempt
23		from Section 250;
24		(R) An amount equal to the interest income taken
25		into account for the taxable year (net of the
26		deductions allocable thereto) with respect to

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1		transactions with (i) a foreign person who would be a
2		member of the taxpayer's unitary business group but for
3		the fact that the foreign person's business activity
4		outside the United States is 80% or more of that
5		person's total business activity and (ii) for taxable
6		years ending on or after December 31, 2008, to a person
7		who would be a member of the same unitary business
8		group but for the fact that the person is prohibited
9		under Section 1501(a)(27) from being included in the
10		unitary business group because he or she is ordinarily
11		required to apportion business income under different
12		subsections of Section 304, but not to exceed the
13		addition modification required to be made for the same
14		taxable year under Section 203(d)(2)(D-7) for interest
15		paid, accrued, or incurred, directly or indirectly, to
16		the same person. This subparagraph (R) is exempt from
17		Section 250; and
18		(S) An amount equal to the income from intangible
19		property taken into account for the taxable year (net
20		of the deductions allocable thereto) with respect to
21		transactions with (i) a foreign person who would be a
22		member of the taxpayer's unitary business group but for
23		the fact that the foreign person's business activity
24		outside the United States is 80% or more of that
25		person's total business activity and (ii) for taxable
26		years ending on or after December 31, 2008, to a person

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1		who would be a member of the same unitary business
2		group but for the fact that the person is prohibited
3		under Section 1501(a)(27) from being included in the
4		unitary business group because he or she is ordinarily
5		required to apportion business income under different
6		subsections of Section 304, but not to exceed the
7		addition modification required to be made for the same
8		taxable year under Section 203(d)(2)(D-8) for
9		intangible expenses and costs paid, accrued, or
10		incurred, directly or indirectly, to the same person.
11		This subparagraph (S) is exempt from Section 250. (T)
12		(e) Gross income; adjusted gross income; taxable income.
13		(1) In general. Subject to the provisions of paragraph
14		(2) and subsection (b) (3), for purposes of this Section
15		and Section 803(e), a taxpayer's gross income, adjusted
16		gross income, or taxable income for the taxable year shall
17		mean the amount of gross income, adjusted gross income or
18		taxable income properly reportable for federal income tax
19		purposes for the taxable year under the provisions of the
20		Internal Revenue Code. Taxable income may be less than
21		zero. However, for taxable years ending on or after
22		December 31, 1986, net operating loss carryforwards from
23		taxable years ending prior to December 31, 1986, may not
24		exceed the sum of federal taxable income for the taxable
25		year before net operating loss deduction, plus the excess

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1		of addition modifications over subtraction modifications
2		for the taxable year. For taxable years ending prior to
3		December 31, 1986, taxable income may never be an amount in
4		excess of the net operating loss for the taxable year as
5		defined in subsections (c) and (d) of Section 172 of the
6		Internal Revenue Code, provided that when taxable income of
7		a corporation (other than a Subchapter S corporation),
8		trust, or estate is less than zero and addition
9		modifications, other than those provided by subparagraph
10		(E) of paragraph (2) of subsection (b) for corporations or
11		subparagraph (E) of paragraph (2) of subsection (c) for
12		trusts and estates, exceed subtraction modifications, an
13		addition modification must be made under those
14		subparagraphs for any other taxable year to which the
15		taxable income less than zero (net operating loss) is
16		applied under Section 172 of the Internal Revenue Code or
17		under subparagraph (E) of paragraph (2) of this subsection
18		(e) applied in conjunction with Section 172 of the Internal
19		Revenue Code.
20		(2) Special rule. For purposes of paragraph (1) of this
21		subsection, the taxable income properly reportable for
22		federal income tax purposes shall mean:
23		(A) Certain life insurance companies. In the case
24		of a life insurance company subject to the tax imposed
25		by Section 801 of the Internal Revenue Code, life
26		insurance company taxable income, plus the amount of

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1		distribution from pre-1984 policyholder surplus
2		accounts as calculated under Section 815a of the
3		Internal Revenue Code;
4		(B) Certain other insurance companies. In the case
5		of mutual insurance companies subject to the tax
6		imposed by Section 831 of the Internal Revenue Code,
7		insurance company taxable income;
8		(C) Regulated investment companies. In the case of
9		a regulated investment company subject to the tax
10		imposed by Section 852 of the Internal Revenue Code,
11		investment company taxable income;
12		(D) Real estate investment trusts. In the case of a
13		real estate investment trust subject to the tax imposed
14		by Section 857 of the Internal Revenue Code, real
15		estate investment trust taxable income;
16		(E) Consolidated corporations. In the case of a
17		corporation which is a member of an affiliated group of
18		corporations filing a consolidated income tax return
19		for the taxable year for federal income tax purposes,
20		taxable income determined as if such corporation had
21		filed a separate return for federal income tax purposes
22		for the taxable year and each preceding taxable year
23		for which it was a member of an affiliated group. For
24		purposes of this subparagraph, the taxpayer's separate
25		taxable income shall be determined as if the election
26		provided by Section 243(b) (2) of the Internal Revenue

HB3872 Engrossed - 90 - LRB096 09597 HLH 19758 b
1		Code had been in effect for all such years;
2		(F) Cooperatives. In the case of a cooperative
3		corporation or association, the taxable income of such
4		organization determined in accordance with the
5		provisions of Section 1381 through 1388 of the Internal
6		Revenue Code;
7		(G) Subchapter S corporations. In the case of: (i)
8		a Subchapter S corporation for which there is in effect
9		an election for the taxable year under Section 1362 of
10		the Internal Revenue Code, the taxable income of such
11		corporation determined in accordance with Section
12		1363(b) of the Internal Revenue Code, except that
13		taxable income shall take into account those items
14		which are required by Section 1363(b)(1) of the
15		Internal Revenue Code to be separately stated; and (ii)
16		a Subchapter S corporation for which there is in effect
17		a federal election to opt out of the provisions of the
18		Subchapter S Revision Act of 1982 and have applied
19		instead the prior federal Subchapter S rules as in
20		effect on July 1, 1982, the taxable income of such
21		corporation determined in accordance with the federal
22		Subchapter S rules as in effect on July 1, 1982; and
23		(H) Partnerships. In the case of a partnership,
24		taxable income determined in accordance with Section
25		703 of the Internal Revenue Code, except that taxable
26		income shall take into account those items which are

HB3872 Engrossed - 91 - LRB096 09597 HLH 19758 b
1		required by Section 703(a)(1) to be separately stated
2		but which would be taken into account by an individual
3		in calculating his taxable income.
4		(3) Recapture of business expenses on disposition of
5		asset or business. Notwithstanding any other law to the
6		contrary, if in prior years income from an asset or
7		business has been classified as business income and in a
8		later year is demonstrated to be non-business income, then
9		all expenses, without limitation, deducted in such later
10		year and in the 2 immediately preceding taxable years
11		related to that asset or business that generated the
12		non-business income shall be added back and recaptured as
13		business income in the year of the disposition of the asset
14		or business. Such amount shall be apportioned to Illinois
15		using the greater of the apportionment fraction computed
16		for the business under Section 304 of this Act for the
17		taxable year or the average of the apportionment fractions
18		computed for the business under Section 304 of this Act for
19		the taxable year and for the 2 immediately preceding
20		taxable years.
21		(f) Valuation limitation amount.
22		(1) In general. The valuation limitation amount
23		referred to in subsections (a) (2) (G), (c) (2) (I) and
24		(d)(2) (E) is an amount equal to:
25		(A) The sum of the pre-August 1, 1969 appreciation

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1		amounts (to the extent consisting of gain reportable
2		under the provisions of Section 1245 or 1250 of the
3		Internal Revenue Code) for all property in respect of
4		which such gain was reported for the taxable year; plus
5		(B) The lesser of (i) the sum of the pre-August 1,
6		1969 appreciation amounts (to the extent consisting of
7		capital gain) for all property in respect of which such
8		gain was reported for federal income tax purposes for
9		the taxable year, or (ii) the net capital gain for the
10		taxable year, reduced in either case by any amount of
11		such gain included in the amount determined under
12		subsection (a) (2) (F) or (c) (2) (H).
13		(2) Pre-August 1, 1969 appreciation amount.
14		(A) If the fair market value of property referred
15		to in paragraph (1) was readily ascertainable on August
16		1, 1969, the pre-August 1, 1969 appreciation amount for
17		such property is the lesser of (i) the excess of such
18		fair market value over the taxpayer's basis (for
19		determining gain) for such property on that date
20		(determined under the Internal Revenue Code as in
21		effect on that date), or (ii) the total gain realized
22		and reportable for federal income tax purposes in
23		respect of the sale, exchange or other disposition of
24		such property.
25		(B) If the fair market value of property referred
26		to in paragraph (1) was not readily ascertainable on

HB3872 Engrossed - 93 - LRB096 09597 HLH 19758 b
1		August 1, 1969, the pre-August 1, 1969 appreciation
2		amount for such property is that amount which bears the
3		same ratio to the total gain reported in respect of the
4		property for federal income tax purposes for the
5		taxable year, as the number of full calendar months in
6		that part of the taxpayer's holding period for the
7		property ending July 31, 1969 bears to the number of
8		full calendar months in the taxpayer's entire holding
9		period for the property.
10		(C) The Department shall prescribe such
11		regulations as may be necessary to carry out the
12		purposes of this paragraph.
13		(g) Double deductions. Unless specifically provided
14		otherwise, nothing in this Section shall permit the same item
15		to be deducted more than once.
16		(h) Legislative intention. Except as expressly provided by
17		this Section there shall be no modifications or limitations on
18		the amounts of income, gain, loss or deduction taken into
19		account in determining gross income, adjusted gross income or
20		taxable income for federal income tax purposes for the taxable
21		year, or in the amount of such items entering into the
22		computation of base income and net income under this Act for
23		such taxable year, whether in respect of property values as of
24		August 1, 1969 or otherwise.

HB3872 Engrossed - 94 - LRB096 09597 HLH 19758 b
1		(Source: P.A. 94-776, eff. 5-19-06; 94-789, eff. 5-19-06;
2		94-1021, eff. 7-12-06; 94-1074, eff. 12-26-06; 95-23, eff.
3		8-3-07; 95-233, eff. 8-16-07; 95-286, eff. 8-20-07; 95-331,
4		eff. 8-21-07; 95-707, eff. 1-11-08; 95-876, eff. 8-21-08;
5		revised 10-15-08.)
6		(35 ILCS 5/905) (from Ch. 120, par. 9-905)
7		Sec. 905. Limitations on Notices of Deficiency.
8		(a) In general. Except as otherwise provided in this Act:
9		(1) A notice of deficiency shall be issued not later
10		than 3 years after the date the return was filed, and
11		(2) No deficiency shall be assessed or collected with
12		respect to the year for which the return was filed unless
13		such notice is issued within such period.
14		(b) Substantial omission of items.
15		(1) Omission of more than 25% of income. If the
16		taxpayer omits from base income an amount properly
17		includible therein which is in excess of 25% of the amount
18		of base income stated in the return, a notice of deficiency
19		may be issued not later than 6 years after the return was
20		filed. For purposes of this paragraph, there shall not be
21		taken into account any amount which is omitted in the
22		return if such amount is disclosed in the return, or in a
23		statement attached to the return, in a manner adequate to
24		apprise the Department of the nature and the amount of such
25		item.

HB3872 Engrossed - 95 - LRB096 09597 HLH 19758 b
1		(2) Reportable transactions. If a taxpayer fails to
2		include on any return or statement for any taxable year any
3		information with respect to a reportable transaction, as
4		required under Section 501(b) of this Act, a notice of
5		deficiency may be issued not later than 6 years after the
6		return is filed with respect to the taxable year in which
7		the taxpayer participated in the reportable transaction
8		and said deficiency is limited to the non-disclosed item.
9		(3) Withholding. If a person fails to report on a
10		return withholding in excess of 25% of the amount required
11		to be withheld under Article 7 of this Act and reported on
12		that return, a notice of deficiency may be issued not later
13		than 6 years after the return was filed.
14		(c) No return or fraudulent return.
15		(1) If no return is filed or a false and fraudulent
16		return is filed with intent to evade the tax imposed by
17		this Act, a notice of deficiency may be issued at any time.
18		(2) For taxable years ending on or after December 31,
19		2005, a notice of deficiency may be issued at any time if a
20		corporation that is required to join in the filing of a
21		combined return under Section 502(e) of this Act fails to
22		file a return for that taxable year or fails to join in the
23		filing of a combined return for that taxable year. The
24		notice of deficiency issued pursuant to this paragraph may
25		be issued to either the corporation or the combined group,
26		and the deficiency may not exceed the increase in the tax

HB3872 Engrossed - 96 - LRB096 09597 HLH 19758 b
1		of the combined group resulting from the proper inclusion
2		of that corporation in the combined group.
3		(d) Failure to report federal change. If a taxpayer fails
4		to notify the Department in any case where notification is
5		required by Section 304(c) or 506(b), or fails to report a
6		change or correction which is treated in the same manner as if
7		it were a deficiency for federal income tax purposes, a notice
8		of deficiency may be issued (i) at any time or (ii) on or after
9		August 13, 1999, at any time for the taxable year for which the
10		notification is required or for any taxable year to which the
11		taxpayer may carry an Article 2 credit, or a Section 207 loss,
12		earned, incurred, or used in the year for which the
13		notification is required; provided, however, that the amount of
14		any proposed assessment set forth in the notice shall be
15		limited to the amount of any deficiency resulting under this
16		Act from the recomputation of the taxpayer's net income,
17		Article 2 credits, or Section 207 loss earned, incurred, or
18		used in the taxable year for which the notification is required
19		after giving effect to the item or items required to be
20		reported.
21		(e) Report of federal change.
22		(1) Before August 13, 1999, in any case where
23		notification of an alteration is given as required by
24		Section 506(b), a notice of deficiency may be issued at any
25		time within 2 years after the date such notification is
26		given, provided, however, that the amount of any proposed

HB3872 Engrossed - 97 - LRB096 09597 HLH 19758 b
1		assessment set forth in such notice shall be limited to the
2		amount of any deficiency resulting under this Act from
3		recomputation of the taxpayer's net income, net loss, or
4		Article 2 credits for the taxable year after giving effect
5		to the item or items reflected in the reported alteration.
6		(2) On and after August 13, 1999, in any case where
7		notification of an alteration is given as required by
8		Section 506(b), a notice of deficiency may be issued at any
9		time within 2 years after the date such notification is
10		given for the taxable year for which the notification is
11		given or for any taxable year to which the taxpayer may
12		carry an Article 2 credit, or a Section 207 loss, earned,
13		incurred, or used in the year for which the notification is
14		given, provided, however, that the amount of any proposed
15		assessment set forth in such notice shall be limited to the
16		amount of any deficiency resulting under this Act from
17		recomputation of the taxpayer's net income, Article 2
18		credits, or Section 207 loss earned, incurred, or used in
19		the taxable year for which the notification is given after
20		giving effect to the item or items reflected in the
21		reported alteration.
22		(f) Extension by agreement. Where, before the expiration of
23		the time prescribed in this Section for the issuance of a
24		notice of deficiency, both the Department and the taxpayer
25		shall have consented in writing to its issuance after such
26		time, such notice may be issued at any time prior to the

HB3872 Engrossed - 98 - LRB096 09597 HLH 19758 b
1		expiration of the period agreed upon. In the case of a taxpayer
2		who is a partnership, Subchapter S corporation, or trust and
3		who enters into an agreement with the Department pursuant to
4		this subsection on or after January 1, 2003, a notice of
5		deficiency may be issued to the partners, shareholders, or
6		beneficiaries of the taxpayer at any time prior to the
7		expiration of the period agreed upon. Any proposed assessment
8		set forth in the notice, however, shall be limited to the
9		amount of any deficiency resulting under this Act from
10		recomputation of items of income, deduction, credits, or other
11		amounts of the taxpayer that are taken into account by the
12		partner, shareholder, or beneficiary in computing its
13		liability under this Act. The period so agreed upon may be
14		extended by subsequent agreements in writing made before the
15		expiration of the period previously agreed upon.
16		(g) Erroneous refunds. In any case in which there has been
17		an erroneous refund of tax payable under this Act, a notice of
18		deficiency may be issued at any time within 2 years from the
19		making of such refund, or within 5 years from the making of
20		such refund if it appears that any part of the refund was
21		induced by fraud or the misrepresentation of a material fact,
22		provided, however, that the amount of any proposed assessment
23		set forth in such notice shall be limited to the amount of such
24		erroneous refund.
25		Beginning July 1, 1993, in any case in which there has been
26		a refund of tax payable under this Act attributable to a net

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1		loss carryback as provided for in Section 207, and that refund
2		is subsequently determined to be an erroneous refund due to a
3		reduction in the amount of the net loss which was originally
4		carried back, a notice of deficiency for the erroneous refund
5		amount may be issued at any time during the same time period in
6		which a notice of deficiency can be issued on the loss year
7		creating the carryback amount and subsequent erroneous refund.
8		The amount of any proposed assessment set forth in the notice
9		shall be limited to the amount of such erroneous refund.
10		(h) Time return deemed filed. For purposes of this Section
11		a tax return filed before the last day prescribed by law
12		(including any extension thereof) shall be deemed to have been
13		filed on such last day.
14		(i) Request for prompt determination of liability. For
15		purposes of subsection (a)(1), in the case of a tax return
16		required under this Act in respect of a decedent, or by his
17		estate during the period of administration, or by a
18		corporation, the period referred to in such Subsection shall be
19		18 months after a written request for prompt determination of
20		liability is filed with the Department (at such time and in
21		such form and manner as the Department shall by regulations
22		prescribe) by the executor, administrator, or other fiduciary
23		representing the estate of such decedent, or by such
24		corporation, but not more than 3 years after the date the
25		return was filed. This subsection shall not apply in the case
26		of a corporation unless:

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1		(1) (A) such written request notifies the Department
2		that the corporation contemplates dissolution at or before
3		the expiration of such 18-month period, (B) the dissolution
4		is begun in good faith before the expiration of such
5		18-month period, and (C) the dissolution is completed;
6		(2) (A) such written request notifies the Department
7		that a dissolution has in good faith been begun, and (B)
8		the dissolution is completed; or
9		(3) a dissolution has been completed at the time such
10		written request is made.
11		(j) Withholding tax. In the case of returns required under
12		Article 7 of this Act (with respect to any amounts withheld as
13		tax or any amounts required to have been withheld as tax) a
14		notice of deficiency shall be issued not later than 3 years
15		after the 15th day of the 4th month following the close of the
16		calendar year in which such withholding was required.
17		(k) Penalties for failure to make information reports. A
18		notice of deficiency for the penalties provided by Subsection
19		1405.1(c) of this Act may not be issued more than 3 years after
20		the due date of the reports with respect to which the penalties
21		are asserted.
22		(l) Penalty for failure to file withholding returns. A
23		notice of deficiency for penalties provided by Section 1004 of
24		this Act for taxpayer's failure to file withholding returns may
25		not be issued more than three years after the 15th day of the
26		4th month following the close of the calendar year in which the

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1		withholding giving rise to taxpayer's obligation to file those
2		returns occurred.
3		(m) Transferee liability. A notice of deficiency may be
4		issued to a transferee relative to a liability asserted under
5		Section 1405 during time periods defined as follows:
6		1) Initial Transferee. In the case of the liability of
7		an initial transferee, up to 2 years after the expiration
8		of the period of limitation for assessment against the
9		transferor, except that if a court proceeding for review of
10		the assessment against the transferor has begun, then up to
11		2 years after the return of the certified copy of the
12		judgment in the court proceeding.
13		2) Transferee of Transferee. In the case of the
14		liability of a transferee, up to 2 years after the
15		expiration of the period of limitation for assessment
16		against the preceding transferee, but not more than 3 years
17		after the expiration of the period of limitation for
18		assessment against the initial transferor; except that if,
19		before the expiration of the period of limitation for the
20		assessment of the liability of the transferee, a court
21		proceeding for the collection of the tax or liability in
22		respect thereof has been begun against the initial
23		transferor or the last preceding transferee, as the case
24		may be, then the period of limitation for assessment of the
25		liability of the transferee shall expire 2 years after the
26		return of the certified copy of the judgment in the court

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1		proceeding.
2		(n) Notice of decrease in net loss. On and after August 23,
3		2002, no notice of deficiency shall be issued as the result of
4		a decrease determined by the Department in the net loss
5		incurred by a taxpayer in any taxable year ending prior to
6		December 31, 2002 under Section 207 of this Act unless the
7		Department has notified the taxpayer of the proposed decrease
8		within 3 years after the return reporting the loss was filed or
9		within one year after an amended return reporting an increase
10		in the loss was filed, provided that in the case of an amended
11		return, a decrease proposed by the Department more than 3 years
12		after the original return was filed may not exceed the increase
13		claimed by the taxpayer on the original return.
14		(Source: P.A. 93-840, eff. 7-30-04; 94-836, eff. 6-6-06.)
15		(35 ILCS 5/911) (from Ch. 120, par. 9-911)
16		Sec. 911. Limitations on Claims for Refund.
17		(a) In general. Except as otherwise provided in this Act:
18		(1) A claim for refund shall be filed not later than 3
19		years after the date the return was filed (in the case of
20		returns required under Article 7 of this Act respecting any
21		amounts withheld as tax, not later than 3 years after the
22		15th day of the 4th month following the close of the
23		calendar year in which such withholding was made), or one
24		year after the date the tax was paid, whichever is the
25		later; and

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1		(2) No credit or refund shall be allowed or made with
2		respect to the year for which the claim was filed unless
3		such claim is filed within such period.
4		(b) Federal changes.
5		(1) In general. In any case where notification of an
6		alteration is required by Section 506(b), a claim for
7		refund may be filed within 2 years after the date on which
8		such notification was due (regardless of whether such
9		notice was given), but the amount recoverable pursuant to a
10		claim filed under this Section shall be limited to the
11		amount of any overpayment resulting under this Act from
12		recomputation of the taxpayer's net income, net loss, or
13		Article 2 credits for the taxable year after giving effect
14		to the item or items reflected in the alteration required
15		to be reported.
16		(2) Tentative carryback adjustments paid before
17		January 1, 1974. If, as the result of the payment before
18		January 1, 1974 of a federal tentative carryback
19		adjustment, a notification of an alteration is required
20		under Section 506(b), a claim for refund may be filed at
21		any time before January 1, 1976, but the amount recoverable
22		pursuant to a claim filed under this Section shall be
23		limited to the amount of any overpayment resulting under
24		this Act from recomputation of the taxpayer's base income
25		for the taxable year after giving effect to the federal
26		alteration resulting from the tentative carryback

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1		adjustment irrespective of any limitation imposed in
2		paragraph (l) of this subsection.
3		(c) Extension by agreement. Where, before the expiration of
4		the time prescribed in this section for the filing of a claim
5		for refund, both the Department and the claimant shall have
6		consented in writing to its filing after such time, such claim
7		may be filed at any time prior to the expiration of the period
8		agreed upon. The period so agreed upon may be extended by
9		subsequent agreements in writing made before the expiration of
10		the period previously agreed upon. In the case of a taxpayer
11		who is a partnership, Subchapter S corporation, or trust and
12		who enters into an agreement with the Department pursuant to
13		this subsection on or after January 1, 2003, a claim for refund
14		may be issued to the partners, shareholders, or beneficiaries
15		of the taxpayer at any time prior to the expiration of the
16		period agreed upon. Any refund allowed pursuant to the claim,
17		however, shall be limited to the amount of any overpayment of
18		tax due under this Act that results from recomputation of items
19		of income, deduction, credits, or other amounts of the taxpayer
20		that are taken into account by the partner, shareholder, or
21		beneficiary in computing its liability under this Act.
22		(d) Limit on amount of credit or refund.
23		(1) Limit where claim filed within 3-year period. If
24		the claim was filed by the claimant during the 3-year
25		period prescribed in subsection (a), the amount of the
26		credit or refund shall not exceed the portion of the tax

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1		paid within the period, immediately preceding the filing of
2		the claim, equal to 3 years plus the period of any
3		extension of time for filing the return.
4		(2) Limit where claim not filed within 3-year period.
5		If the claim was not filed within such 3-year period, the
6		amount of the credit or refund shall not exceed the portion
7		of the tax paid during the one year immediately preceding
8		the filing of the claim.
9		(e) Time return deemed filed. For purposes of this section
10		a tax return filed before the last day prescribed by law for
11		the filing of such return (including any extensions thereof)
12		shall be deemed to have been filed on such last day.
13		(f) No claim for refund based on the taxpayer's taking a
14		credit for estimated tax payments as provided by Section
15		601(b)(2) or for any amount paid by a taxpayer pursuant to
16		Section 602(a) or for any amount of credit for tax withheld
17		pursuant to Article 7 may be filed more than 3 years after the
18		due date, as provided by Section 505, of the return which was
19		required to be filed relative to the taxable year for which the
20		payments were made or for which the tax was withheld. The
21		changes in this subsection (f) made by this amendatory Act of
22		1987 shall apply to all taxable years ending on or after
23		December 31, 1969.
24		(g) Special Period of Limitation with Respect to Net Loss
25		Carrybacks. If the claim for refund relates to an overpayment
26		attributable to a net loss carryback as provided by Section

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1		207, in lieu of the 3 year period of limitation prescribed in
2		subsection (a), the period shall be that period which ends 3
3		years after the time prescribed by law for filing the return
4		(including extensions thereof) for the taxable year of the net
5		loss which results in such carryback (or, on and after August
6		13, 1999, with respect to a change in the carryover of an
7		Article 2 credit to a taxable year resulting from the carryback
8		of a Section 207 loss incurred in a taxable year beginning on
9		or after January 1, 2000, the period shall be that period that
10		ends 3 years after the time prescribed by law for filing the
11		return (including extensions of that time) for that subsequent
12		taxable year), or the period prescribed in subsection (c) in
13		respect of such taxable year, whichever expires later. In the
14		case of such a claim, the amount of the refund may exceed the
15		portion of the tax paid within the period provided in
16		subsection (d) to the extent of the amount of the overpayment
17		attributable to such carryback. On and after August 13, 1999,
18		if the claim for refund relates to an overpayment attributable
19		to the carryover of an Article 2 credit, or of a Section 207
20		loss, earned, incurred (in a taxable year beginning on or after
21		January 1, 2000), or used in a year for which a notification of
22		a change affecting federal taxable income must be filed under
23		subsection (b) of Section 506, the claim may be filed within
24		the period prescribed in paragraph (1) of subsection (b) in
25		respect of the year for which the notification is required. In
26		the case of such a claim, the amount of the refund may exceed

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1		the portion of the tax paid within the period provided in
2		subsection (d) to the extent of the amount of the overpayment
3		attributable to the recomputation of the taxpayer's Article 2
4		credits, or Section 207 loss, earned, incurred, or used in the
5		taxable year for which the notification is given.
6		(h) Claim for refund based on net loss. On and after August
7		23, 2002, no claim for refund shall be allowed to the extent
8		the refund is the result of an amount of net loss incurred in
9		any taxable year ending prior to December 31, 2002 under
10		Section 207 of this Act that was not reported to the Department
11		within 3 years of the due date (including extensions) of the
12		return for the loss year on either the original return filed by
13		the taxpayer or on amended return or to the extent that the
14		refund is the result of an amount of net loss incurred in any
15		taxable year under Section 207 for which no return was filed
16		within 3 years of the due date (including extensions) of the
17		return for the loss year.
18		(i) Running of periods of limitation suspended while
19		taxpayer is unable to manage financial affairs due to
20		disability. In the case of an individual, the running of the
21		periods specified in this Section shall be suspended for any
22		period during which the individual is financially disabled. For
23		purposes of this item, an individual is financially disabled if
24		the individual is unable to manage his or her financial affairs
25		by reason of a medically determinable physical or mental
26		impairment of the individual that can be expected to result in

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1		death or which has lasted or can be expected to last for a
2		continuous period of not less than 12 months. An individual is
3		not financially disabled if the individual's spouse or any
4		other person is authorized to act on behalf of the individual
5		in financial matters.
6		(Source: P.A. 94-836, eff. 6-6-06; 95-233, eff. 8-16-07.)
7		Section 20. The Use Tax Act is amended by changing Sections
8		9 and 14 as follows:
9		(35 ILCS 105/9) (from Ch. 120, par. 439.9)
10		Sec. 9. Except as to motor vehicles, watercraft, aircraft,
11		and trailers that are required to be registered with an agency
12		of this State, each retailer required or authorized to collect
13		the tax imposed by this Act shall pay to the Department the
14		amount of such tax (except as otherwise provided) at the time
15		when he is required to file his return for the period during
16		which such tax was collected, less a discount of 2.1% prior to
17		January 1, 1990, and 1.75% on and after January 1, 1990, or $5
18		per calendar year, whichever is greater, which is allowed to
19		reimburse the retailer for expenses incurred in collecting the
20		tax, keeping records, preparing and filing returns, remitting
21		the tax and supplying data to the Department on request. In the
22		case of retailers who report and pay the tax on a transaction
23		by transaction basis, as provided in this Section, such
24		discount shall be taken with each such tax remittance instead

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1		of when such retailer files his periodic return. The discount
2		provided to retailers in this Section shall be allowed on a
3		return only if that retailer possessed a valid certificate of
4		registration issued under Section 6 of this Act or under
5		Section 2a of the Retailers' Occupation Tax Act during the
6		entire reporting period for that return. A retailer need not
7		remit that part of any tax collected by him to the extent that
8		he is required to remit and does remit the tax imposed by the
9		Retailers' Occupation Tax Act, with respect to the sale of the
10		same property.
11		Where such tangible personal property is sold under a
12		conditional sales contract, or under any other form of sale
13		wherein the payment of the principal sum, or a part thereof, is
14		extended beyond the close of the period for which the return is
15		filed, the retailer, in collecting the tax (except as to motor
16		vehicles, watercraft, aircraft, and trailers that are required
17		to be registered with an agency of this State), may collect for
18		each tax return period, only the tax applicable to that part of
19		the selling price actually received during such tax return
20		period.
21		Except as provided in this Section, on or before the
22		twentieth day of each calendar month, such retailer shall file
23		a return for the preceding calendar month. Such return shall be
24		filed on forms prescribed by the Department and shall furnish
25		such information as the Department may reasonably require.
26		The Department may require returns to be filed on a

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1		quarterly basis. If so required, a return for each calendar
2		quarter shall be filed on or before the twentieth day of the
3		calendar month following the end of such calendar quarter. The
4		taxpayer shall also file a return with the Department for each
5		of the first two months of each calendar quarter, on or before
6		the twentieth day of the following calendar month, stating:
7		1. The name of the seller;
8		2. The address of the principal place of business from
9		which he engages in the business of selling tangible
10		personal property at retail in this State;
11		3. The total amount of taxable receipts received by him
12		during the preceding calendar month from sales of tangible
13		personal property by him during such preceding calendar
14		month, including receipts from charge and time sales, but
15		less all deductions allowed by law;
16		4. The amount of credit provided in Section 2d of this
17		Act;
18		5. The amount of tax due;
19		5-5. The signature of the taxpayer; and
20		6. Such other reasonable information as the Department
21		may require.
22		If a taxpayer fails to sign a return within 30 days after
23		the proper notice and demand for signature by the Department,
24		the return shall be considered valid and any amount shown to be
25		due on the return shall be deemed assessed.
26		Beginning October 1, 1993, a taxpayer who has an average

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1		monthly tax liability of $150,000 or more shall make all
2		payments required by rules of the Department by electronic
3		funds transfer. Beginning October 1, 1994, a taxpayer who has
4		an average monthly tax liability of $100,000 or more shall make
5		all payments required by rules of the Department by electronic
6		funds transfer. Beginning October 1, 1995, a taxpayer who has
7		an average monthly tax liability of $50,000 or more shall make
8		all payments required by rules of the Department by electronic
9		funds transfer. Beginning October 1, 2000, a taxpayer who has
10		an annual tax liability of $200,000 or more shall make all
11		payments required by rules of the Department by electronic
12		funds transfer. The term "annual tax liability" shall be the
13		sum of the taxpayer's liabilities under this Act, and under all
14		other State and local occupation and use tax laws administered
15		by the Department, for the immediately preceding calendar year.
16		The term "average monthly tax liability" means the sum of the
17		taxpayer's liabilities under this Act, and under all other
18		State and local occupation and use tax laws administered by the
19		Department, for the immediately preceding calendar year
20		divided by 12. Beginning on October 1, 2002, a taxpayer who has
21		a tax liability in the amount set forth in subsection (b) of
22		Section 2505-210 of the Department of Revenue Law shall make
23		all payments required by rules of the Department by electronic
24		funds transfer.
25		Before August 1 of each year beginning in 1993, the
26		Department shall notify all taxpayers required to make payments

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1		by electronic funds transfer. All taxpayers required to make
2		payments by electronic funds transfer shall make those payments
3		for a minimum of one year beginning on October 1.
4		Any taxpayer not required to make payments by electronic
5		funds transfer may make payments by electronic funds transfer
6		with the permission of the Department.
7		All taxpayers required to make payment by electronic funds
8		transfer and any taxpayers authorized to voluntarily make
9		payments by electronic funds transfer shall make those payments
10		in the manner authorized by the Department.
11		The Department shall adopt such rules as are necessary to
12		effectuate a program of electronic funds transfer and the
13		requirements of this Section.
14		Before October 1, 2000, if the taxpayer's average monthly
15		tax liability to the Department under this Act, the Retailers'
16		Occupation Tax Act, the Service Occupation Tax Act, the Service
17		Use Tax Act was $10,000 or more during the preceding 4 complete
18		calendar quarters, he shall file a return with the Department
19		each month by the 20th day of the month next following the
20		month during which such tax liability is incurred and shall
21		make payments to the Department on or before the 7th, 15th,
22		22nd and last day of the month during which such liability is
23		incurred. On and after October 1, 2000, if the taxpayer's
24		average monthly tax liability to the Department under this Act,
25		the Retailers' Occupation Tax Act, the Service Occupation Tax
26		Act, and the Service Use Tax Act was $20,000 or more during the

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1		preceding 4 complete calendar quarters, he shall file a return
2		with the Department each month by the 20th day of the month
3		next following the month during which such tax liability is
4		incurred and shall make payment to the Department on or before
5		the 7th, 15th, 22nd and last day of the month during which such
6		liability is incurred. If the month during which such tax
7		liability is incurred began prior to January 1, 1985, each
8		payment shall be in an amount equal to 1/4 of the taxpayer's
9		actual liability for the month or an amount set by the
10		Department not to exceed 1/4 of the average monthly liability
11		of the taxpayer to the Department for the preceding 4 complete
12		calendar quarters (excluding the month of highest liability and
13		the month of lowest liability in such 4 quarter period). If the
14		month during which such tax liability is incurred begins on or
15		after January 1, 1985, and prior to January 1, 1987, each
16		payment shall be in an amount equal to 22.5% of the taxpayer's
17		actual liability for the month or 27.5% of the taxpayer's
18		liability for the same calendar month of the preceding year. If
19		the month during which such tax liability is incurred begins on
20		or after January 1, 1987, and prior to January 1, 1988, each
21		payment shall be in an amount equal to 22.5% of the taxpayer's
22		actual liability for the month or 26.25% of the taxpayer's
23		liability for the same calendar month of the preceding year. If
24		the month during which such tax liability is incurred begins on
25		or after January 1, 1988, and prior to January 1, 1989, or
26		begins on or after January 1, 1996, each payment shall be in an

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1		amount equal to 22.5% of the taxpayer's actual liability for
2		the month or 25% of the taxpayer's liability for the same
3		calendar month of the preceding year. If the month during which
4		such tax liability is incurred begins on or after January 1,
5		1989, and prior to January 1, 1996, each payment shall be in an
6		amount equal to 22.5% of the taxpayer's actual liability for
7		the month or 25% of the taxpayer's liability for the same
8		calendar month of the preceding year or 100% of the taxpayer's
9		actual liability for the quarter monthly reporting period. The
10		amount of such quarter monthly payments shall be credited
11		against the final tax liability of the taxpayer's return for
12		that month. Before October 1, 2000, once applicable, the
13		requirement of the making of quarter monthly payments to the
14		Department shall continue until such taxpayer's average
15		monthly liability to the Department during the preceding 4
16		complete calendar quarters (excluding the month of highest
17		liability and the month of lowest liability) is less than
18		$9,000, or until such taxpayer's average monthly liability to
19		the Department as computed for each calendar quarter of the 4
20		preceding complete calendar quarter period is less than
21		$10,000. However, if a taxpayer can show the Department that a
22		substantial change in the taxpayer's business has occurred
23		which causes the taxpayer to anticipate that his average
24		monthly tax liability for the reasonably foreseeable future
25		will fall below the $10,000 threshold stated above, then such
26		taxpayer may petition the Department for change in such

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1		taxpayer's reporting status. On and after October 1, 2000, once
2		applicable, the requirement of the making of quarter monthly
3		payments to the Department shall continue until such taxpayer's
4		average monthly liability to the Department during the
5		preceding 4 complete calendar quarters (excluding the month of
6		highest liability and the month of lowest liability) is less
7		than $19,000 or until such taxpayer's average monthly liability
8		to the Department as computed for each calendar quarter of the
9		4 preceding complete calendar quarter period is less than
10		$20,000. However, if a taxpayer can show the Department that a
11		substantial change in the taxpayer's business has occurred
12		which causes the taxpayer to anticipate that his average
13		monthly tax liability for the reasonably foreseeable future
14		will fall below the $20,000 threshold stated above, then such
15		taxpayer may petition the Department for a change in such
16		taxpayer's reporting status. The Department shall change such
17		taxpayer's reporting status unless it finds that such change is
18		seasonal in nature and not likely to be long term. If any such
19		quarter monthly payment is not paid at the time or in the
20		amount required by this Section, then the taxpayer shall be
21		liable for penalties and interest on the difference between the
22		minimum amount due and the amount of such quarter monthly
23		payment actually and timely paid, except insofar as the
24		taxpayer has previously made payments for that month to the
25		Department in excess of the minimum payments previously due as
26		provided in this Section. The Department shall make reasonable

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1		rules and regulations to govern the quarter monthly payment
2		amount and quarter monthly payment dates for taxpayers who file
3		on other than a calendar monthly basis.
4		If any such payment provided for in this Section exceeds
5		the taxpayer's liabilities under this Act, the Retailers'
6		Occupation Tax Act, the Service Occupation Tax Act and the
7		Service Use Tax Act, as shown by an original monthly return,
8		the Department shall issue to the taxpayer a credit memorandum
9		no later than 30 days after the date of payment, which
10		memorandum may be submitted by the taxpayer to the Department
11		in payment of tax liability subsequently to be remitted by the
12		taxpayer to the Department or be assigned by the taxpayer to a
13		similar taxpayer under this Act, the Retailers' Occupation Tax
14		Act, the Service Occupation Tax Act or the Service Use Tax Act,
15		in accordance with reasonable rules and regulations to be
16		prescribed by the Department, except that if such excess
17		payment is shown on an original monthly return and is made
18		after December 31, 1986, no credit memorandum shall be issued,
19		unless requested by the taxpayer. If no such request is made,
20		the taxpayer may credit such excess payment against tax
21		liability subsequently to be remitted by the taxpayer to the
22		Department under this Act, the Retailers' Occupation Tax Act,
23		the Service Occupation Tax Act or the Service Use Tax Act, in
24		accordance with reasonable rules and regulations prescribed by
25		the Department. If the Department subsequently determines that
26		all or any part of the credit taken was not actually due to the

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1		taxpayer, the taxpayer's 2.1% or 1.75% vendor's discount shall
2		be reduced by 2.1% or 1.75% of the difference between the
3		credit taken and that actually due, and the taxpayer shall be
4		liable for penalties and interest on such difference.
5		If the retailer is otherwise required to file a monthly
6		return and if the retailer's average monthly tax liability to
7		the Department does not exceed $200, the Department may
8		authorize his returns to be filed on a quarter annual basis,
9		with the return for January, February, and March of a given
10		year being due by April 20 of such year; with the return for
11		April, May and June of a given year being due by July 20 of such
12		year; with the return for July, August and September of a given
13		year being due by October 20 of such year, and with the return
14		for October, November and December of a given year being due by
15		January 20 of the following year.
16		If the retailer is otherwise required to file a monthly or
17		quarterly return and if the retailer's average monthly tax
18		liability to the Department does not exceed $50, the Department
19		may authorize his returns to be filed on an annual basis, with
20		the return for a given year being due by January 20 of the
21		following year.
22		Such quarter annual and annual returns, as to form and
23		substance, shall be subject to the same requirements as monthly
24		returns.
25		Notwithstanding any other provision in this Act concerning
26		the time within which a retailer may file his return, in the

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1		case of any retailer who ceases to engage in a kind of business
2		which makes him responsible for filing returns under this Act,
3		such retailer shall file a final return under this Act with the
4		Department not more than one month after discontinuing such
5		business.
6		In addition, with respect to motor vehicles, watercraft,
7		aircraft, and trailers that are required to be registered with
8		an agency of this State, every retailer selling this kind of
9		tangible personal property shall file, with the Department,
10		upon a form to be prescribed and supplied by the Department, a
11		separate return for each such item of tangible personal
12		property which the retailer sells, except that if, in the same
13		transaction, (i) a retailer of aircraft, watercraft, motor
14		vehicles or trailers transfers more than one aircraft,
15		watercraft, motor vehicle or trailer to another aircraft,
16		watercraft, motor vehicle or trailer retailer for the purpose
17		of resale or (ii) a retailer of aircraft, watercraft, motor
18		vehicles, or trailers transfers more than one aircraft,
19		watercraft, motor vehicle, or trailer to a purchaser for use as
20		a qualifying rolling stock as provided in Section 3-55 of this
21		Act, then that seller may report the transfer of all the
22		aircraft, watercraft, motor vehicles or trailers involved in
23		that transaction to the Department on the same uniform
24		invoice-transaction reporting return form. For purposes of
25		this Section, "watercraft" means a Class 2, Class 3, or Class 4
26		watercraft as defined in Section 3-2 of the Boat Registration

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1		and Safety Act, a personal watercraft, or any boat equipped
2		with an inboard motor.
3		The transaction reporting return in the case of motor
4		vehicles or trailers that are required to be registered with an
5		agency of this State, shall be the same document as the Uniform
6		Invoice referred to in Section 5-402 of the Illinois Vehicle
7		Code and must show the name and address of the seller; the name
8		and address of the purchaser; the amount of the selling price
9		including the amount allowed by the retailer for traded-in
10		property, if any; the amount allowed by the retailer for the
11		traded-in tangible personal property, if any, to the extent to
12		which Section 2 of this Act allows an exemption for the value
13		of traded-in property; the balance payable after deducting such
14		trade-in allowance from the total selling price; the amount of
15		tax due from the retailer with respect to such transaction; the
16		amount of tax collected from the purchaser by the retailer on
17		such transaction (or satisfactory evidence that such tax is not
18		due in that particular instance, if that is claimed to be the
19		fact); the place and date of the sale; a sufficient
20		identification of the property sold; such other information as
21		is required in Section 5-402 of the Illinois Vehicle Code, and
22		such other information as the Department may reasonably
23		require.
24		The transaction reporting return in the case of watercraft
25		and aircraft must show the name and address of the seller; the
26		name and address of the purchaser; the amount of the selling

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1		price including the amount allowed by the retailer for
2		traded-in property, if any; the amount allowed by the retailer
3		for the traded-in tangible personal property, if any, to the
4		extent to which Section 2 of this Act allows an exemption for
5		the value of traded-in property; the balance payable after
6		deducting such trade-in allowance from the total selling price;
7		the amount of tax due from the retailer with respect to such
8		transaction; the amount of tax collected from the purchaser by
9		the retailer on such transaction (or satisfactory evidence that
10		such tax is not due in that particular instance, if that is
11		claimed to be the fact); the place and date of the sale, a
12		sufficient identification of the property sold, and such other
13		information as the Department may reasonably require.
14		Such transaction reporting return shall be filed not later
15		than 20 days after the date of delivery of the item that is
16		being sold, but may be filed by the retailer at any time sooner
17		than that if he chooses to do so. The transaction reporting
18		return and tax remittance or proof of exemption from the tax
19		that is imposed by this Act may be transmitted to the
20		Department by way of the State agency with which, or State
21		officer with whom, the tangible personal property must be
22		titled or registered (if titling or registration is required)
23		if the Department and such agency or State officer determine
24		that this procedure will expedite the processing of
25		applications for title or registration.
26		With each such transaction reporting return, the retailer

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1		shall remit the proper amount of tax due (or shall submit
2		satisfactory evidence that the sale is not taxable if that is
3		the case), to the Department or its agents, whereupon the
4		Department shall issue, in the purchaser's name, a tax receipt
5		(or a certificate of exemption if the Department is satisfied
6		that the particular sale is tax exempt) which such purchaser
7		may submit to the agency with which, or State officer with
8		whom, he must title or register the tangible personal property
9		that is involved (if titling or registration is required) in
10		support of such purchaser's application for an Illinois
11		certificate or other evidence of title or registration to such
12		tangible personal property.
13		No retailer's failure or refusal to remit tax under this
14		Act precludes a user, who has paid the proper tax to the
15		retailer, from obtaining his certificate of title or other
16		evidence of title or registration (if titling or registration
17		is required) upon satisfying the Department that such user has
18		paid the proper tax (if tax is due) to the retailer. The
19		Department shall adopt appropriate rules to carry out the
20		mandate of this paragraph.
21		If the user who would otherwise pay tax to the retailer
22		wants the transaction reporting return filed and the payment of
23		tax or proof of exemption made to the Department before the
24		retailer is willing to take these actions and such user has not
25		paid the tax to the retailer, such user may certify to the fact
26		of such delay by the retailer, and may (upon the Department

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1		being satisfied of the truth of such certification) transmit
2		the information required by the transaction reporting return
3		and the remittance for tax or proof of exemption directly to
4		the Department and obtain his tax receipt or exemption
5		determination, in which event the transaction reporting return
6		and tax remittance (if a tax payment was required) shall be
7		credited by the Department to the proper retailer's account
8		with the Department, but without the 2.1% or 1.75% discount
9		provided for in this Section being allowed. When the user pays
10		the tax directly to the Department, he shall pay the tax in the
11		same amount and in the same form in which it would be remitted
12		if the tax had been remitted to the Department by the retailer.
13		Where a retailer collects the tax with respect to the
14		selling price of tangible personal property which he sells and
15		the purchaser thereafter returns such tangible personal
16		property and the retailer refunds the selling price thereof to
17		the purchaser, such retailer shall also refund, to the
18		purchaser, the tax so collected from the purchaser. When filing
19		his return for the period in which he refunds such tax to the
20		purchaser, the retailer may deduct the amount of the tax so
21		refunded by him to the purchaser from any other use tax which
22		such retailer may be required to pay or remit to the
23		Department, as shown by such return, if the amount of the tax
24		to be deducted was previously remitted to the Department by
25		such retailer. If the retailer has not previously remitted the
26		amount of such tax to the Department, he is entitled to no

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1		deduction under this Act upon refunding such tax to the
2		purchaser.
3		Any retailer filing a return under this Section shall also
4		include (for the purpose of paying tax thereon) the total tax
5		covered by such return upon the selling price of tangible
6		personal property purchased by him at retail from a retailer,
7		but as to which the tax imposed by this Act was not collected
8		from the retailer filing such return, and such retailer shall
9		remit the amount of such tax to the Department when filing such
10		return.
11		If experience indicates such action to be practicable, the
12		Department may prescribe and furnish a combination or joint
13		return which will enable retailers, who are required to file
14		returns hereunder and also under the Retailers' Occupation Tax
15		Act, to furnish all the return information required by both
16		Acts on the one form.
17		Where the retailer has more than one business registered
18		with the Department under separate registration under this Act,
19		such retailer may not file each return that is due as a single
20		return covering all such registered businesses, but shall file
21		separate returns for each such registered business.
22		Beginning January 1, 1990, each month the Department shall
23		pay into the State and Local Sales Tax Reform Fund, a special
24		fund in the State Treasury which is hereby created, the net
25		revenue realized for the preceding month from the 1% tax on
26		sales of food for human consumption which is to be consumed off

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1		the premises where it is sold (other than alcoholic beverages,
2		soft drinks and food which has been prepared for immediate
3		consumption) and prescription and nonprescription medicines,
4		drugs, medical appliances and insulin, urine testing
5		materials, syringes and needles used by diabetics.
6		Beginning January 1, 1990, each month the Department shall
7		pay into the County and Mass Transit District Fund 4% of the
8		net revenue realized for the preceding month from the 6.25%
9		general rate on the selling price of tangible personal property
10		which is purchased outside Illinois at retail from a retailer
11		and which is titled or registered by an agency of this State's
12		government.
13		Beginning January 1, 1990, each month the Department shall
14		pay into the State and Local Sales Tax Reform Fund, a special
15		fund in the State Treasury, 20% of the net revenue realized for
16		the preceding month from the 6.25% general rate on the selling
17		price of tangible personal property, other than tangible
18		personal property which is purchased outside Illinois at retail
19		from a retailer and which is titled or registered by an agency
20		of this State's government.
21		Beginning August 1, 2000, each month the Department shall
22		pay into the State and Local Sales Tax Reform Fund 100% of the
23		net revenue realized for the preceding month from the 1.25%
24		rate on the selling price of motor fuel and gasohol.
25		Beginning January 1, 1990, each month the Department shall
26		pay into the Local Government Tax Fund 16% of the net revenue

HB3872 Engrossed - 125 - LRB096 09597 HLH 19758 b
1		realized for the preceding month from the 6.25% general rate on
2		the selling price of tangible personal property which is
3		purchased outside Illinois at retail from a retailer and which
4		is titled or registered by an agency of this State's
5		government.
6		Of the remainder of the moneys received by the Department
7		pursuant to this Act, (a) 1.75% thereof shall be paid into the
8		Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
9		and after July 1, 1989, 3.8% thereof shall be paid into the
10		Build Illinois Fund; provided, however, that if in any fiscal
11		year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
12		may be, of the moneys received by the Department and required
13		to be paid into the Build Illinois Fund pursuant to Section 3
14		of the Retailers' Occupation Tax Act, Section 9 of the Use Tax
15		Act, Section 9 of the Service Use Tax Act, and Section 9 of the
16		Service Occupation Tax Act, such Acts being hereinafter called
17		the "Tax Acts" and such aggregate of 2.2% or 3.8%, as the case
18		may be, of moneys being hereinafter called the "Tax Act
19		Amount", and (2) the amount transferred to the Build Illinois
20		Fund from the State and Local Sales Tax Reform Fund shall be
21		less than the Annual Specified Amount (as defined in Section 3
22		of the Retailers' Occupation Tax Act), an amount equal to the
23		difference shall be immediately paid into the Build Illinois
24		Fund from other moneys received by the Department pursuant to
25		the Tax Acts; and further provided, that if on the last
26		business day of any month the sum of (1) the Tax Act Amount

HB3872 Engrossed - 126 - LRB096 09597 HLH 19758 b
1		required to be deposited into the Build Illinois Bond Account
2		in the Build Illinois Fund during such month and (2) the amount
3		transferred during such month to the Build Illinois Fund from
4		the State and Local Sales Tax Reform Fund shall have been less
5		than 1/12 of the Annual Specified Amount, an amount equal to
6		the difference shall be immediately paid into the Build
7		Illinois Fund from other moneys received by the Department
8		pursuant to the Tax Acts; and, further provided, that in no
9		event shall the payments required under the preceding proviso
10		result in aggregate payments into the Build Illinois Fund
11		pursuant to this clause (b) for any fiscal year in excess of
12		the greater of (i) the Tax Act Amount or (ii) the Annual
13		Specified Amount for such fiscal year; and, further provided,
14		that the amounts payable into the Build Illinois Fund under
15		this clause (b) shall be payable only until such time as the
16		aggregate amount on deposit under each trust indenture securing
17		Bonds issued and outstanding pursuant to the Build Illinois
18		Bond Act is sufficient, taking into account any future
19		investment income, to fully provide, in accordance with such
20		indenture, for the defeasance of or the payment of the
21		principal of, premium, if any, and interest on the Bonds
22		secured by such indenture and on any Bonds expected to be
23		issued thereafter and all fees and costs payable with respect
24		thereto, all as certified by the Director of the Bureau of the
25		Budget (now Governor's Office of Management and Budget). If on
26		the last business day of any month in which Bonds are

HB3872 Engrossed - 127 - LRB096 09597 HLH 19758 b
1		outstanding pursuant to the Build Illinois Bond Act, the
2		aggregate of the moneys deposited in the Build Illinois Bond
3		Account in the Build Illinois Fund in such month shall be less
4		than the amount required to be transferred in such month from
5		the Build Illinois Bond Account to the Build Illinois Bond
6		Retirement and Interest Fund pursuant to Section 13 of the
7		Build Illinois Bond Act, an amount equal to such deficiency
8		shall be immediately paid from other moneys received by the
9		Department pursuant to the Tax Acts to the Build Illinois Fund;
10		provided, however, that any amounts paid to the Build Illinois
11		Fund in any fiscal year pursuant to this sentence shall be
12		deemed to constitute payments pursuant to clause (b) of the
13		preceding sentence and shall reduce the amount otherwise
14		payable for such fiscal year pursuant to clause (b) of the
15		preceding sentence. The moneys received by the Department
16		pursuant to this Act and required to be deposited into the
17		Build Illinois Fund are subject to the pledge, claim and charge
18		set forth in Section 12 of the Build Illinois Bond Act.
19		Subject to payment of amounts into the Build Illinois Fund
20		as provided in the preceding paragraph or in any amendment
21		thereto hereafter enacted, the following specified monthly
22		installment of the amount requested in the certificate of the
23		Chairman of the Metropolitan Pier and Exposition Authority
24		provided under Section 8.25f of the State Finance Act, but not
25		in excess of the sums designated as "Total Deposit", shall be
26		deposited in the aggregate from collections under Section 9 of

HB3872 Engrossed - 128 - LRB096 09597 HLH 19758 b
1		the Use Tax Act, Section 9 of the Service Use Tax Act, Section
2		9 of the Service Occupation Tax Act, and Section 3 of the
3		Retailers' Occupation Tax Act into the McCormick Place
4		Expansion Project Fund in the specified fiscal years.
5 Fiscal Year Total Deposit 6 1993 $0 7 1994 53,000,000 8 1995 58,000,000 9 1996 61,000,000 10 1997 64,000,000 11 1998 68,000,000 12 1999 71,000,000 13 2000 75,000,000 14 2001 80,000,000 15 2002 93,000,000 16 2003 99,000,000 17 2004 103,000,000 18 2005 108,000,000 19 2006 113,000,000 20 2007 119,000,000 21 2008 126,000,000 22 2009 132,000,000 23 2010 139,000,000 24 2011 146,000,000 25 2012 153,000,000

HB3872 Engrossed - 129 - LRB096 09597 HLH 19758 b
1 2013 161,000,000 2 2014 170,000,000 3 2015 179,000,000 4 2016 189,000,000 5 2017 199,000,000 6 2018 210,000,000 7 2019 221,000,000 8 2020 233,000,000 9 2021 246,000,000 10 2022 260,000,000 11 2023 and 275,000,000 12 each fiscal year 13 thereafter that bonds 14 are outstanding under 15 Section 13.2 of the 16 Metropolitan Pier and 17 Exposition Authority Act, 18 but not after fiscal year 2042.
19		Beginning July 20, 1993 and in each month of each fiscal
20		year thereafter, one-eighth of the amount requested in the
21		certificate of the Chairman of the Metropolitan Pier and
22		Exposition Authority for that fiscal year, less the amount
23		deposited into the McCormick Place Expansion Project Fund by
24		the State Treasurer in the respective month under subsection
25		(g) of Section 13 of the Metropolitan Pier and Exposition
26		Authority Act, plus cumulative deficiencies in the deposits

HB3872 Engrossed - 130 - LRB096 09597 HLH 19758 b
1		required under this Section for previous months and years,
2		shall be deposited into the McCormick Place Expansion Project
3		Fund, until the full amount requested for the fiscal year, but
4		not in excess of the amount specified above as "Total Deposit",
5		has been deposited.
6		Subject to payment of amounts into the Build Illinois Fund
7		and the McCormick Place Expansion Project Fund pursuant to the
8		preceding paragraphs or in any amendments thereto hereafter
9		enacted, beginning July 1, 1993, the Department shall each
10		month pay into the Illinois Tax Increment Fund 0.27% of 80% of
11		the net revenue realized for the preceding month from the 6.25%
12		general rate on the selling price of tangible personal
13		property.
14		Subject to payment of amounts into the Build Illinois Fund
15		and the McCormick Place Expansion Project Fund pursuant to the
16		preceding paragraphs or in any amendments thereto hereafter
17		enacted, beginning with the receipt of the first report of
18		taxes paid by an eligible business and continuing for a 25-year
19		period, the Department shall each month pay into the Energy
20		Infrastructure Fund 80% of the net revenue realized from the
21		6.25% general rate on the selling price of Illinois-mined coal
22		that was sold to an eligible business. For purposes of this
23		paragraph, the term "eligible business" means a new electric
24		generating facility certified pursuant to Section 605-332 of
25		the Department of Commerce and Economic Opportunity Law of the
26		Civil Administrative Code of Illinois.

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1		Of the remainder of the moneys received by the Department
2		pursuant to this Act, 75% thereof shall be paid into the State
3		Treasury and 25% shall be reserved in a special account and
4		used only for the transfer to the Common School Fund as part of
5		the monthly transfer from the General Revenue Fund in
6		accordance with Section 8a of the State Finance Act.
7		As soon as possible after the first day of each month, upon
8		certification of the Department of Revenue, the Comptroller
9		shall order transferred and the Treasurer shall transfer from
10		the General Revenue Fund to the Motor Fuel Tax Fund an amount
11		equal to 1.7% of 80% of the net revenue realized under this Act
12		for the second preceding month. Beginning April 1, 2000, this
13		transfer is no longer required and shall not be made.
14		Net revenue realized for a month shall be the revenue
15		collected by the State pursuant to this Act, less the amount
16		paid out during that month as refunds to taxpayers for
17		overpayment of liability.
18		For greater simplicity of administration, manufacturers,
19		importers and wholesalers whose products are sold at retail in
20		Illinois by numerous retailers, and who wish to do so, may
21		assume the responsibility for accounting and paying to the
22		Department all tax accruing under this Act with respect to such
23		sales, if the retailers who are affected do not make written
24		objection to the Department to this arrangement.
25		(Source: P.A. 94-793, eff. 5-19-06; 94-1074, eff. 12-26-06.)

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1		(35 ILCS 105/14) (from Ch. 120, par. 439.14)
2		Sec. 14. When the amount due is under $300, any person
3		subject to the provisions hereof who fails to file a return, or
4		who violates any other provision of Section 9 or Section 10
5		hereof, or who fails to keep books and records as required
6		herein, or who files a fraudulent return, or who wilfully
7		violates any rule or regulation of the Department for the
8		administration and enforcement of the provisions hereof, or any
9		officer or agent of a corporation or manager, member, or agent
10		of a limited liability company subject hereto who signs a
11		fraudulent return filed on behalf of such corporation or
12		limited liability company, or any accountant or other agent who
13		knowingly enters false information on the return of any
14		taxpayer under this Act, or any person who violates any of the
15		provisions of Sections 3, 5 or 7 hereof, or any purchaser who
16		obtains a registration number or resale number from the
17		Department through misrepresentation, or who represents to a
18		seller that such purchaser has a registration number or a
19		resale number from the Department when he knows that he does
20		not, or who uses his registration number or resale number to
21		make a seller believe that he is buying tangible personal
22		property for resale when such purchaser in fact knows that this
23		is not the case, is guilty of a Class 4 felony.
24		Any person who violates any provision of Section 6 hereof,
25		or who engages in the business of selling tangible personal
26		property at retail after his Certificate of Registration under

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1		this Act has been revoked in accordance with Section 12 of this
2		Act, is guilty of a Class 4 felony. Each day any such person is
3		engaged in business in violation of Section 6, or after his
4		Certificate of Registration under this Act has been revoked,
5		constitutes a separate offense.
6		When the amount due is under $300, any person who accepts
7		money that is due to the Department under this Act from a
8		taxpayer for the purpose of acting as the taxpayer's agent to
9		make the payment to the Department, but who fails to remit such
10		payment to the Department when due is guilty of a Class 4
11		felony. Any such person who purports to make such payment by
12		issuing or delivering a check or other order upon a real or
13		fictitious depository for the payment of money, knowing that it
14		will not be paid by the depository, shall be guilty of a
15		deceptive practice in violation of Section 17-1 of the Criminal
16		Code of 1961, as amended.
17		When the amount due is $300 or more any person subject to
18		the provisions hereof who fails to file a return or who
19		violates any other provision of Section 9 or Section 10 hereof
20		or who fails to keep books and records as required herein or
21		who files a fraudulent return, or who wilfully violates any
22		rule or regulation of the Department for the administration and
23		enforcement of the provisions hereof, or any officer or agent
24		of a corporation or manager, member, or agent of a limited
25		liability company subject hereto who signs a fraudulent return
26		filed on behalf of such corporation or limited liability

HB3872 Engrossed - 134 - LRB096 09597 HLH 19758 b
1		company, or any accountant or other agent who knowingly enters
2		false information on the return of any taxpayer under this Act
3		or any person who violates any of the provisions of Sections 3,
4		5 or 7 hereof or any purchaser who obtains a registration
5		number or resale number from the Department through
6		misrepresentation, or who represents to a seller that such
7		purchaser has a registration number or a resale number from the
8		Department when he knows that he does not or who uses his
9		registration number or resale number to make a seller believe
10		that he is buying tangible personal property for resale when
11		such purchaser in fact knows that this is not the case, is
12		guilty of a Class 3 felony.
13		When the amount due is $300 or more any person who accepts
14		money that is due to the Department under this Act from a
15		taxpayer for the purpose of acting as the taxpayer's agent to
16		make the payment to the Department, but who fails to remit such
17		payment to the Department when due is guilty of a Class 3
18		felony. Any such person who purports to make such payment by
19		issuing or delivering a check or other order upon a real or
20		fictitious depository for the payment of money, knowing that it
21		will not be paid by the depository shall be guilty of a
22		deceptive practice in violation of Section 17-1 of the Criminal
23		Code of 1961, as amended.
24		Any seller who collects or attempts to collect use tax
25		measured by receipts which such seller knows are not subject to
26		use tax, or any seller who knowingly over-collects or attempts

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1		to over-collect use tax in a transaction which is subject to
2		the tax that is imposed by this Act, shall be guilty of a Class
3		4 felony for each such offense. This paragraph does not apply
4		to an amount collected by the seller as use tax on receipts
5		which are subject to tax under this Act as long as such
6		collection is made in compliance with the tax collection
7		brackets prescribed by the Department in its Rules and
8		Regulations.
9		Any taxpayer or agent of a taxpayer who with the intent to
10		defraud purports to make a payment due to the Department by
11		issuing or delivering a check or other order upon a real or
12		fictitious depository for the payment of money, knowing that it
13		will not be paid by the depository, shall be guilty of a
14		deceptive practice in violation of Section 17-1 of the Criminal
15		Code of 1961, as amended.
16		A prosecution for any act in violation of this Section may
17		be commenced at any time within 6 3 years of the commission of
18		that Act.
19		This Section does not apply if the violation in a
20		particular case also constitutes a criminal violation of the
21		Retailers' Occupation Tax Act.
22		(Source: P.A. 88-480.)
23		Section 25. The Service Use Tax Act is amended by changing
24		Sections 9 and 15 as follows:

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1		(35 ILCS 110/9) (from Ch. 120, par. 439.39)
2		Sec. 9. Each serviceman required or authorized to collect
3		the tax herein imposed shall pay to the Department the amount
4		of such tax (except as otherwise provided) at the time when he
5		is required to file his return for the period during which such
6		tax was collected, less a discount of 2.1% prior to January 1,
7		1990 and 1.75% on and after January 1, 1990, or $5 per calendar
8		year, whichever is greater, which is allowed to reimburse the
9		serviceman for expenses incurred in collecting the tax, keeping
10		records, preparing and filing returns, remitting the tax and
11		supplying data to the Department on request. The discount
12		provided to retailers in this Section shall be allowed on a
13		return only if that retailer possessed a valid certificate of
14		registration issued under Section 6 of this Act or under
15		Section 2a of the Retailers' Occupation Tax Act during the
16		entire reporting period for that return. A serviceman need not
17		remit that part of any tax collected by him to the extent that
18		he is required to pay and does pay the tax imposed by the
19		Service Occupation Tax Act with respect to his sale of service
20		involving the incidental transfer by him of the same property.
21		Except as provided hereinafter in this Section, on or
22		before the twentieth day of each calendar month, such
23		serviceman shall file a return for the preceding calendar month
24		in accordance with reasonable Rules and Regulations to be
25		promulgated by the Department. Such return shall be filed on a
26		form prescribed by the Department and shall contain such

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1		information as the Department may reasonably require.
2		The Department may require returns to be filed on a
3		quarterly basis. If so required, a return for each calendar
4		quarter shall be filed on or before the twentieth day of the
5		calendar month following the end of such calendar quarter. The
6		taxpayer shall also file a return with the Department for each
7		of the first two months of each calendar quarter, on or before
8		the twentieth day of the following calendar month, stating:
9		1. The name of the seller;
10		2. The address of the principal place of business from
11		which he engages in business as a serviceman in this State;
12		3. The total amount of taxable receipts received by him
13		during the preceding calendar month, including receipts
14		from charge and time sales, but less all deductions allowed
15		by law;
16		4. The amount of credit provided in Section 2d of this
17		Act;
18		5. The amount of tax due;
19		5-5. The signature of the taxpayer; and
20		6. Such other reasonable information as the Department
21		may require.
22		If a taxpayer fails to sign a return within 30 days after
23		the proper notice and demand for signature by the Department,
24		the return shall be considered valid and any amount shown to be
25		due on the return shall be deemed assessed.
26		Beginning October 1, 1993, a taxpayer who has an average

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1		monthly tax liability of $150,000 or more shall make all
2		payments required by rules of the Department by electronic
3		funds transfer. Beginning October 1, 1994, a taxpayer who has
4		an average monthly tax liability of $100,000 or more shall make
5		all payments required by rules of the Department by electronic
6		funds transfer. Beginning October 1, 1995, a taxpayer who has
7		an average monthly tax liability of $50,000 or more shall make
8		all payments required by rules of the Department by electronic
9		funds transfer. Beginning October 1, 2000, a taxpayer who has
10		an annual tax liability of $200,000 or more shall make all
11		payments required by rules of the Department by electronic
12		funds transfer. The term "annual tax liability" shall be the
13		sum of the taxpayer's liabilities under this Act, and under all
14		other State and local occupation and use tax laws administered
15		by the Department, for the immediately preceding calendar year.
16		The term "average monthly tax liability" means the sum of the
17		taxpayer's liabilities under this Act, and under all other
18		State and local occupation and use tax laws administered by the
19		Department, for the immediately preceding calendar year
20		divided by 12. Beginning on October 1, 2002, a taxpayer who has
21		a tax liability in the amount set forth in subsection (b) of
22		Section 2505-210 of the Department of Revenue Law shall make
23		all payments required by rules of the Department by electronic
24		funds transfer.
25		Before August 1 of each year beginning in 1993, the
26		Department shall notify all taxpayers required to make payments

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1		by electronic funds transfer. All taxpayers required to make
2		payments by electronic funds transfer shall make those payments
3		for a minimum of one year beginning on October 1.
4		Any taxpayer not required to make payments by electronic
5		funds transfer may make payments by electronic funds transfer
6		with the permission of the Department.
7		All taxpayers required to make payment by electronic funds
8		transfer and any taxpayers authorized to voluntarily make
9		payments by electronic funds transfer shall make those payments
10		in the manner authorized by the Department.
11		The Department shall adopt such rules as are necessary to
12		effectuate a program of electronic funds transfer and the
13		requirements of this Section.
14		If the serviceman is otherwise required to file a monthly
15		return and if the serviceman's average monthly tax liability to
16		the Department does not exceed $200, the Department may
17		authorize his returns to be filed on a quarter annual basis,
18		with the return for January, February and March of a given year
19		being due by April 20 of such year; with the return for April,
20		May and June of a given year being due by July 20 of such year;
21		with the return for July, August and September of a given year
22		being due by October 20 of such year, and with the return for
23		October, November and December of a given year being due by
24		January 20 of the following year.
25		If the serviceman is otherwise required to file a monthly
26		or quarterly return and if the serviceman's average monthly tax

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1		liability to the Department does not exceed $50, the Department
2		may authorize his returns to be filed on an annual basis, with
3		the return for a given year being due by January 20 of the
4		following year.
5		Such quarter annual and annual returns, as to form and
6		substance, shall be subject to the same requirements as monthly
7		returns.
8		Notwithstanding any other provision in this Act concerning
9		the time within which a serviceman may file his return, in the
10		case of any serviceman who ceases to engage in a kind of
11		business which makes him responsible for filing returns under
12		this Act, such serviceman shall file a final return under this
13		Act with the Department not more than 1 month after
14		discontinuing such business.
15		Where a serviceman collects the tax with respect to the
16		selling price of property which he sells and the purchaser
17		thereafter returns such property and the serviceman refunds the
18		selling price thereof to the purchaser, such serviceman shall
19		also refund, to the purchaser, the tax so collected from the
20		purchaser. When filing his return for the period in which he
21		refunds such tax to the purchaser, the serviceman may deduct
22		the amount of the tax so refunded by him to the purchaser from
23		any other Service Use Tax, Service Occupation Tax, retailers'
24		occupation tax or use tax which such serviceman may be required
25		to pay or remit to the Department, as shown by such return,
26		provided that the amount of the tax to be deducted shall

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1		previously have been remitted to the Department by such
2		serviceman. If the serviceman shall not previously have
3		remitted the amount of such tax to the Department, he shall be
4		entitled to no deduction hereunder upon refunding such tax to
5		the purchaser.
6		Any serviceman filing a return hereunder shall also include
7		the total tax upon the selling price of tangible personal
8		property purchased for use by him as an incident to a sale of
9		service, and such serviceman shall remit the amount of such tax
10		to the Department when filing such return.
11		If experience indicates such action to be practicable, the
12		Department may prescribe and furnish a combination or joint
13		return which will enable servicemen, who are required to file
14		returns hereunder and also under the Service Occupation Tax
15		Act, to furnish all the return information required by both
16		Acts on the one form.
17		Where the serviceman has more than one business registered
18		with the Department under separate registration hereunder,
19		such serviceman shall not file each return that is due as a
20		single return covering all such registered businesses, but
21		shall file separate returns for each such registered business.
22		Beginning January 1, 1990, each month the Department shall
23		pay into the State and Local Tax Reform Fund, a special fund in
24		the State Treasury, the net revenue realized for the preceding
25		month from the 1% tax on sales of food for human consumption
26		which is to be consumed off the premises where it is sold

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1		(other than alcoholic beverages, soft drinks and food which has
2		been prepared for immediate consumption) and prescription and
3		nonprescription medicines, drugs, medical appliances and
4		insulin, urine testing materials, syringes and needles used by
5		diabetics.
6		Beginning January 1, 1990, each month the Department shall
7		pay into the State and Local Sales Tax Reform Fund 20% of the
8		net revenue realized for the preceding month from the 6.25%
9		general rate on transfers of tangible personal property, other
10		than tangible personal property which is purchased outside
11		Illinois at retail from a retailer and which is titled or
12		registered by an agency of this State's government.
13		Beginning August 1, 2000, each month the Department shall
14		pay into the State and Local Sales Tax Reform Fund 100% of the
15		net revenue realized for the preceding month from the 1.25%
16		rate on the selling price of motor fuel and gasohol.
17		Of the remainder of the moneys received by the Department
18		pursuant to this Act, (a) 1.75% thereof shall be paid into the
19		Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
20		and after July 1, 1989, 3.8% thereof shall be paid into the
21		Build Illinois Fund; provided, however, that if in any fiscal
22		year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
23		may be, of the moneys received by the Department and required
24		to be paid into the Build Illinois Fund pursuant to Section 3
25		of the Retailers' Occupation Tax Act, Section 9 of the Use Tax
26		Act, Section 9 of the Service Use Tax Act, and Section 9 of the

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1		Service Occupation Tax Act, such Acts being hereinafter called
2		the "Tax Acts" and such aggregate of 2.2% or 3.8%, as the case
3		may be, of moneys being hereinafter called the "Tax Act
4		Amount", and (2) the amount transferred to the Build Illinois
5		Fund from the State and Local Sales Tax Reform Fund shall be
6		less than the Annual Specified Amount (as defined in Section 3
7		of the Retailers' Occupation Tax Act), an amount equal to the
8		difference shall be immediately paid into the Build Illinois
9		Fund from other moneys received by the Department pursuant to
10		the Tax Acts; and further provided, that if on the last
11		business day of any month the sum of (1) the Tax Act Amount
12		required to be deposited into the Build Illinois Bond Account
13		in the Build Illinois Fund during such month and (2) the amount
14		transferred during such month to the Build Illinois Fund from
15		the State and Local Sales Tax Reform Fund shall have been less
16		than 1/12 of the Annual Specified Amount, an amount equal to
17		the difference shall be immediately paid into the Build
18		Illinois Fund from other moneys received by the Department
19		pursuant to the Tax Acts; and, further provided, that in no
20		event shall the payments required under the preceding proviso
21		result in aggregate payments into the Build Illinois Fund
22		pursuant to this clause (b) for any fiscal year in excess of
23		the greater of (i) the Tax Act Amount or (ii) the Annual
24		Specified Amount for such fiscal year; and, further provided,
25		that the amounts payable into the Build Illinois Fund under
26		this clause (b) shall be payable only until such time as the

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1		aggregate amount on deposit under each trust indenture securing
2		Bonds issued and outstanding pursuant to the Build Illinois
3		Bond Act is sufficient, taking into account any future
4		investment income, to fully provide, in accordance with such
5		indenture, for the defeasance of or the payment of the
6		principal of, premium, if any, and interest on the Bonds
7		secured by such indenture and on any Bonds expected to be
8		issued thereafter and all fees and costs payable with respect
9		thereto, all as certified by the Director of the Bureau of the
10		Budget (now Governor's Office of Management and Budget). If on
11		the last business day of any month in which Bonds are
12		outstanding pursuant to the Build Illinois Bond Act, the
13		aggregate of the moneys deposited in the Build Illinois Bond
14		Account in the Build Illinois Fund in such month shall be less
15		than the amount required to be transferred in such month from
16		the Build Illinois Bond Account to the Build Illinois Bond
17		Retirement and Interest Fund pursuant to Section 13 of the
18		Build Illinois Bond Act, an amount equal to such deficiency
19		shall be immediately paid from other moneys received by the
20		Department pursuant to the Tax Acts to the Build Illinois Fund;
21		provided, however, that any amounts paid to the Build Illinois
22		Fund in any fiscal year pursuant to this sentence shall be
23		deemed to constitute payments pursuant to clause (b) of the
24		preceding sentence and shall reduce the amount otherwise
25		payable for such fiscal year pursuant to clause (b) of the
26		preceding sentence. The moneys received by the Department

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1		pursuant to this Act and required to be deposited into the
2		Build Illinois Fund are subject to the pledge, claim and charge
3		set forth in Section 12 of the Build Illinois Bond Act.
4		Subject to payment of amounts into the Build Illinois Fund
5		as provided in the preceding paragraph or in any amendment
6		thereto hereafter enacted, the following specified monthly
7		installment of the amount requested in the certificate of the
8		Chairman of the Metropolitan Pier and Exposition Authority
9		provided under Section 8.25f of the State Finance Act, but not
10		in excess of the sums designated as "Total Deposit", shall be
11		deposited in the aggregate from collections under Section 9 of
12		the Use Tax Act, Section 9 of the Service Use Tax Act, Section
13		9 of the Service Occupation Tax Act, and Section 3 of the
14		Retailers' Occupation Tax Act into the McCormick Place
15		Expansion Project Fund in the specified fiscal years.
16 Fiscal Year Total Deposit 17 1993 $0 18 1994 53,000,000 19 1995 58,000,000 20 1996 61,000,000 21 1997 64,000,000 22 1998 68,000,000 23 1999 71,000,000 24 2000 75,000,000 25 2001 80,000,000

HB3872 Engrossed - 146 - LRB096 09597 HLH 19758 b

1 2002 93,000,000 2 2003 99,000,000 3 2004 103,000,000 4 2005 108,000,000 5 2006 113,000,000 6 2007 119,000,000 7 2008 126,000,000 8 2009 132,000,000 9 2010 139,000,000 10 2011 146,000,000 11 2012 153,000,000 12 2013 161,000,000 13 2014 170,000,000 14 2015 179,000,000 15 2016 189,000,000 16 2017 199,000,000 17 2018 210,000,000 18 2019 221,000,000 19 2020 233,000,000 20 2021 246,000,000 21 2022 260,000,000 22 2023 and 275,000,000 23 each fiscal year 24 thereafter that bonds 25 are outstanding under 26 Section 13.2 of the

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1 Metropolitan Pier and 2 Exposition Authority Act, 3 but not after fiscal year 2042.
4		Beginning July 20, 1993 and in each month of each fiscal
5		year thereafter, one-eighth of the amount requested in the
6		certificate of the Chairman of the Metropolitan Pier and
7		Exposition Authority for that fiscal year, less the amount
8		deposited into the McCormick Place Expansion Project Fund by
9		the State Treasurer in the respective month under subsection
10		(g) of Section 13 of the Metropolitan Pier and Exposition
11		Authority Act, plus cumulative deficiencies in the deposits
12		required under this Section for previous months and years,
13		shall be deposited into the McCormick Place Expansion Project
14		Fund, until the full amount requested for the fiscal year, but
15		not in excess of the amount specified above as "Total Deposit",
16		has been deposited.
17		Subject to payment of amounts into the Build Illinois Fund
18		and the McCormick Place Expansion Project Fund pursuant to the
19		preceding paragraphs or in any amendments thereto hereafter
20		enacted, beginning July 1, 1993, the Department shall each
21		month pay into the Illinois Tax Increment Fund 0.27% of 80% of
22		the net revenue realized for the preceding month from the 6.25%
23		general rate on the selling price of tangible personal
24		property.
25		Subject to payment of amounts into the Build Illinois Fund
26		and the McCormick Place Expansion Project Fund pursuant to the

HB3872 Engrossed - 148 - LRB096 09597 HLH 19758 b
1		preceding paragraphs or in any amendments thereto hereafter
2		enacted, beginning with the receipt of the first report of
3		taxes paid by an eligible business and continuing for a 25-year
4		period, the Department shall each month pay into the Energy
5		Infrastructure Fund 80% of the net revenue realized from the
6		6.25% general rate on the selling price of Illinois-mined coal
7		that was sold to an eligible business. For purposes of this
8		paragraph, the term "eligible business" means a new electric
9		generating facility certified pursuant to Section 605-332 of
10		the Department of Commerce and Economic Opportunity Law of the
11		Civil Administrative Code of Illinois.
12		All remaining moneys received by the Department pursuant to
13		this Act shall be paid into the General Revenue Fund of the
14		State Treasury.
15		As soon as possible after the first day of each month, upon
16		certification of the Department of Revenue, the Comptroller
17		shall order transferred and the Treasurer shall transfer from
18		the General Revenue Fund to the Motor Fuel Tax Fund an amount
19		equal to 1.7% of 80% of the net revenue realized under this Act
20		for the second preceding month. Beginning April 1, 2000, this
21		transfer is no longer required and shall not be made.
22		Net revenue realized for a month shall be the revenue
23		collected by the State pursuant to this Act, less the amount
24		paid out during that month as refunds to taxpayers for
25		overpayment of liability.
26		(Source: P.A. 94-793, eff. 5-19-06; 94-1074, eff. 12-26-06.)

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1		(35 ILCS 110/15) (from Ch. 120, par. 439.45)
2		Sec. 15. When the amount due is under $300, any person
3		subject to the provisions hereof who fails to file a return, or
4		who violates any other provision of Section 9 or Section 10
5		hereof, or who fails to keep books and records as required
6		herein, or who files a fraudulent return, or who wilfully
7		violates any Rule or Regulation of the Department for the
8		administration and enforcement of the provisions hereof, or any
9		officer or agent of a corporation, or manager, member, or agent
10		of a limited liability company, subject hereto who signs a
11		fraudulent return filed on behalf of such corporation or
12		limited liability company, or any accountant or other agent who
13		knowingly enters false information on the return of any
14		taxpayer under this Act, or any person who violates any of the
15		provisions of Sections 3 and 5 hereof, or any purchaser who
16		obtains a registration number or resale number from the
17		Department through misrepresentation, or who represents to a
18		seller that such purchaser has a registration number or a
19		resale number from the Department when he knows that he does
20		not, or who uses his registration number or resale number to
21		make a seller believe that he is buying tangible personal
22		property for resale when such purchaser in fact knows that this
23		is not the case, is guilty of a Class 4 felony.
24		Any person who violates any provision of Section 6 hereof,
25		or who engages in the business of making sales of service after

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1		his Certificate of Registration under this Act has been revoked
2		in accordance with Section 12 of this Act, is guilty of a Class
3		4 felony. Each day any such person is engaged in business in
4		violation of Section 6, or after his Certificate of
5		Registration under this Act has been revoked, constitutes a
6		separate offense.
7		When the amount due is under $300, any person who accepts
8		money that is due to the Department under this Act from a
9		taxpayer for the purpose of acting as the taxpayer's agent to
10		make the payment to the Department, but who fails to remit such
11		payment to the Department when due is guilty of a Class 4
12		felony. Any such person who purports to make such payment by
13		issuing or delivering a check or other order upon a real or
14		fictitious depository for the payment of money, knowing that it
15		will not be paid by the depository, shall be guilty of a
16		deceptive practice in violation of Section 17-1 of the Criminal
17		Code of 1961, as amended.
18		When the amount due is $300 or more, any person subject to
19		the provisions hereof who fails to file a return, or who
20		violates any other provision of Section 9 or Section 10 hereof,
21		or who fails to keep books and records as required herein or
22		who files a fraudulent return, or who willfully violates any
23		rule or regulation of the Department for the administration and
24		enforcement of the provisions hereof, or any officer or agent
25		of a corporation, or manager, member, or agent of a limited
26		liability company, subject hereto who signs a fraudulent return

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1		filed on behalf of such corporation or limited liability
2		company, or any accountant or other agent who knowingly enters
3		false information on the return of any taxpayer under this Act,
4		or any person who violates any of the provisions of Sections 3
5		and 5 hereof, or any purchaser who obtains a registration
6		number or resale number from the Department through
7		misrepresentation, or who represents to a seller that such
8		purchaser has a registration number or a resale number from the
9		Department when he knows that he does not, or who uses his
10		registration number or resale number to make a seller believe
11		that he is buying tangible personal property for resale when
12		such purchaser in fact knows that this is not the case, is
13		guilty of a Class 3 felony.
14		When the amount due is $300 or more, any person who accepts
15		money that is due to the Department under this Act from a
16		taxpayer for the purpose of acting as the taxpayer's agent to
17		make the payment to the Department, but who fails to remit such
18		payment to the Department when due is guilty of a Class 3
19		felony. Any such person who purports to make such payment by
20		issuing or delivering a check or other order upon a real or
21		fictitious depository for the payment of money, knowing that it
22		will not be paid by the depository, shall be guilty of a
23		deceptive practice in violation of Section 17-1 of the Criminal
24		Code of 1961, as amended.
25		Any serviceman who collects or attempts to collect Service
26		Use Tax measured by receipts or selling prices which such

HB3872 Engrossed - 152 - LRB096 09597 HLH 19758 b
1		serviceman knows are not subject to Service Use Tax, or any
2		serviceman who knowingly over-collects or attempts to
3		over-collect Service Use Tax in a transaction which is subject
4		to the tax that is imposed by this Act, shall be guilty of a
5		Class 4 felony for each offense. This paragraph does not apply
6		to an amount collected by the serviceman as Service Use Tax on
7		receipts or selling prices which are subject to tax under this
8		Act as long as such collection is made in compliance with the
9		tax collection brackets prescribed by the Department in its
10		Rules and Regulations.
11		Any taxpayer or agent of a taxpayer who with the intent to
12		defraud purports to make a payment due to the Department by
13		issuing or delivering a check or other order upon a real or
14		fictitious depository for the payment of money, knowing that it
15		will not be paid by the depository, shall be guilty of a
16		deceptive practice in violation of Section 17-1 of the Criminal
17		Code of 1961, as amended.
18		A prosecution for any Act in violation of this Section may
19		be commenced at any time within 6 3 years of the commission of
20		that Act.
21		This Section does not apply if the violation in a
22		particular case also constitutes a criminal violation of the
23		Retailers' Occupation Tax Act, the Use Tax Act or the Service
24		Occupation Tax Act.
25		(Source: P.A. 90-655, eff. 7-30-98; 91-51, eff. 6-30-99.)

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1		Section 30. The Service Occupation Tax Act is amended by
2		changing Sections 9 and 15 as follows:
3		(35 ILCS 115/9) (from Ch. 120, par. 439.109)
4		Sec. 9. Each serviceman required or authorized to collect
5		the tax herein imposed shall pay to the Department the amount
6		of such tax at the time when he is required to file his return
7		for the period during which such tax was collectible, less a
8		discount of 2.1% prior to January 1, 1990, and 1.75% on and
9		after January 1, 1990, or $5 per calendar year, whichever is
10		greater, which is allowed to reimburse the serviceman for
11		expenses incurred in collecting the tax, keeping records,
12		preparing and filing returns, remitting the tax and supplying
13		data to the Department on request. The discount provided to
14		retailers in this Section shall be allowed on a return only if
15		that retailer possessed a valid certificate of registration
16		issued under Section 6 of this Act or under Section 2a of the
17		Retailers' Occupation Tax Act during the entire reporting
18		period for that return.
19		Where such tangible personal property is sold under a
20		conditional sales contract, or under any other form of sale
21		wherein the payment of the principal sum, or a part thereof, is
22		extended beyond the close of the period for which the return is
23		filed, the serviceman, in collecting the tax may collect, for
24		each tax return period, only the tax applicable to the part of
25		the selling price actually received during such tax return

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1		period.
2		Except as provided hereinafter in this Section, on or
3		before the twentieth day of each calendar month, such
4		serviceman shall file a return for the preceding calendar month
5		in accordance with reasonable rules and regulations to be
6		promulgated by the Department of Revenue. Such return shall be
7		filed on a form prescribed by the Department and shall contain
8		such information as the Department may reasonably require.
9		The Department may require returns to be filed on a
10		quarterly basis. If so required, a return for each calendar
11		quarter shall be filed on or before the twentieth day of the
12		calendar month following the end of such calendar quarter. The
13		taxpayer shall also file a return with the Department for each
14		of the first two months of each calendar quarter, on or before
15		the twentieth day of the following calendar month, stating:
16		1. The name of the seller;
17		2. The address of the principal place of business from
18		which he engages in business as a serviceman in this State;
19		3. The total amount of taxable receipts received by him
20		during the preceding calendar month, including receipts
21		from charge and time sales, but less all deductions allowed
22		by law;
23		4. The amount of credit provided in Section 2d of this
24		Act;
25		5. The amount of tax due;
26		5-5. The signature of the taxpayer; and

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1		6. Such other reasonable information as the Department
2		may require.
3		If a taxpayer fails to sign a return within 30 days after
4		the proper notice and demand for signature by the Department,
5		the return shall be considered valid and any amount shown to be
6		due on the return shall be deemed assessed.
7		Prior to October 1, 2003, and on and after September 1,
8		2004 a serviceman may accept a Manufacturer's Purchase Credit
9		certification from a purchaser in satisfaction of Service Use
10		Tax as provided in Section 3-70 of the Service Use Tax Act if
11		the purchaser provides the appropriate documentation as
12		required by Section 3-70 of the Service Use Tax Act. A
13		Manufacturer's Purchase Credit certification, accepted prior
14		to October 1, 2003 or on or after September 1, 2004 by a
15		serviceman as provided in Section 3-70 of the Service Use Tax
16		Act, may be used by that serviceman to satisfy Service
17		Occupation Tax liability in the amount claimed in the
18		certification, not to exceed 6.25% of the receipts subject to
19		tax from a qualifying purchase. A Manufacturer's Purchase
20		Credit reported on any original or amended return filed under
21		this Act after October 20, 2003 for reporting periods prior to
22		September 1, 2004 shall be disallowed. Manufacturer's Purchase
23		Credit reported on annual returns due on or after January 1,
24		2005 will be disallowed for periods prior to September 1, 2004.
25		No Manufacturer's Purchase Credit may be used after September
26		30, 2003 through August 31, 2004 to satisfy any tax liability

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1		imposed under this Act, including any audit liability.
2		If the serviceman's average monthly tax liability to the
3		Department does not exceed $200, the Department may authorize
4		his returns to be filed on a quarter annual basis, with the
5		return for January, February and March of a given year being
6		due by April 20 of such year; with the return for April, May
7		and June of a given year being due by July 20 of such year; with
8		the return for July, August and September of a given year being
9		due by October 20 of such year, and with the return for
10		October, November and December of a given year being due by
11		January 20 of the following year.
12		If the serviceman's average monthly tax liability to the
13		Department does not exceed $50, the Department may authorize
14		his returns to be filed on an annual basis, with the return for
15		a given year being due by January 20 of the following year.
16		Such quarter annual and annual returns, as to form and
17		substance, shall be subject to the same requirements as monthly
18		returns.
19		Notwithstanding any other provision in this Act concerning
20		the time within which a serviceman may file his return, in the
21		case of any serviceman who ceases to engage in a kind of
22		business which makes him responsible for filing returns under
23		this Act, such serviceman shall file a final return under this
24		Act with the Department not more than 1 month after
25		discontinuing such business.
26		Beginning October 1, 1993, a taxpayer who has an average

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1		monthly tax liability of $150,000 or more shall make all
2		payments required by rules of the Department by electronic
3		funds transfer. Beginning October 1, 1994, a taxpayer who has
4		an average monthly tax liability of $100,000 or more shall make
5		all payments required by rules of the Department by electronic
6		funds transfer. Beginning October 1, 1995, a taxpayer who has
7		an average monthly tax liability of $50,000 or more shall make
8		all payments required by rules of the Department by electronic
9		funds transfer. Beginning October 1, 2000, a taxpayer who has
10		an annual tax liability of $200,000 or more shall make all
11		payments required by rules of the Department by electronic
12		funds transfer. The term "annual tax liability" shall be the
13		sum of the taxpayer's liabilities under this Act, and under all
14		other State and local occupation and use tax laws administered
15		by the Department, for the immediately preceding calendar year.
16		The term "average monthly tax liability" means the sum of the
17		taxpayer's liabilities under this Act, and under all other
18		State and local occupation and use tax laws administered by the
19		Department, for the immediately preceding calendar year
20		divided by 12. Beginning on October 1, 2002, a taxpayer who has
21		a tax liability in the amount set forth in subsection (b) of
22		Section 2505-210 of the Department of Revenue Law shall make
23		all payments required by rules of the Department by electronic
24		funds transfer.
25		Before August 1 of each year beginning in 1993, the
26		Department shall notify all taxpayers required to make payments

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1		by electronic funds transfer. All taxpayers required to make
2		payments by electronic funds transfer shall make those payments
3		for a minimum of one year beginning on October 1.
4		Any taxpayer not required to make payments by electronic
5		funds transfer may make payments by electronic funds transfer
6		with the permission of the Department.
7		All taxpayers required to make payment by electronic funds
8		transfer and any taxpayers authorized to voluntarily make
9		payments by electronic funds transfer shall make those payments
10		in the manner authorized by the Department.
11		The Department shall adopt such rules as are necessary to
12		effectuate a program of electronic funds transfer and the
13		requirements of this Section.
14		Where a serviceman collects the tax with respect to the
15		selling price of tangible personal property which he sells and
16		the purchaser thereafter returns such tangible personal
17		property and the serviceman refunds the selling price thereof
18		to the purchaser, such serviceman shall also refund, to the
19		purchaser, the tax so collected from the purchaser. When filing
20		his return for the period in which he refunds such tax to the
21		purchaser, the serviceman may deduct the amount of the tax so
22		refunded by him to the purchaser from any other Service
23		Occupation Tax, Service Use Tax, Retailers' Occupation Tax or
24		Use Tax which such serviceman may be required to pay or remit
25		to the Department, as shown by such return, provided that the
26		amount of the tax to be deducted shall previously have been

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1		remitted to the Department by such serviceman. If the
2		serviceman shall not previously have remitted the amount of
3		such tax to the Department, he shall be entitled to no
4		deduction hereunder upon refunding such tax to the purchaser.
5		If experience indicates such action to be practicable, the
6		Department may prescribe and furnish a combination or joint
7		return which will enable servicemen, who are required to file
8		returns hereunder and also under the Retailers' Occupation Tax
9		Act, the Use Tax Act or the Service Use Tax Act, to furnish all
10		the return information required by all said Acts on the one
11		form.
12		Where the serviceman has more than one business registered
13		with the Department under separate registrations hereunder,
14		such serviceman shall file separate returns for each registered
15		business.
16		Beginning January 1, 1990, each month the Department shall
17		pay into the Local Government Tax Fund the revenue realized for
18		the preceding month from the 1% tax on sales of food for human
19		consumption which is to be consumed off the premises where it
20		is sold (other than alcoholic beverages, soft drinks and food
21		which has been prepared for immediate consumption) and
22		prescription and nonprescription medicines, drugs, medical
23		appliances and insulin, urine testing materials, syringes and
24		needles used by diabetics.
25		Beginning January 1, 1990, each month the Department shall
26		pay into the County and Mass Transit District Fund 4% of the

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1		revenue realized for the preceding month from the 6.25% general
2		rate.
3		Beginning August 1, 2000, each month the Department shall
4		pay into the County and Mass Transit District Fund 20% of the
5		net revenue realized for the preceding month from the 1.25%
6		rate on the selling price of motor fuel and gasohol.
7		Beginning January 1, 1990, each month the Department shall
8		pay into the Local Government Tax Fund 16% of the revenue
9		realized for the preceding month from the 6.25% general rate on
10		transfers of tangible personal property.
11		Beginning August 1, 2000, each month the Department shall
12		pay into the Local Government Tax Fund 80% of the net revenue
13		realized for the preceding month from the 1.25% rate on the
14		selling price of motor fuel and gasohol.
15		Of the remainder of the moneys received by the Department
16		pursuant to this Act, (a) 1.75% thereof shall be paid into the
17		Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
18		and after July 1, 1989, 3.8% thereof shall be paid into the
19		Build Illinois Fund; provided, however, that if in any fiscal
20		year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
21		may be, of the moneys received by the Department and required
22		to be paid into the Build Illinois Fund pursuant to Section 3
23		of the Retailers' Occupation Tax Act, Section 9 of the Use Tax
24		Act, Section 9 of the Service Use Tax Act, and Section 9 of the
25		Service Occupation Tax Act, such Acts being hereinafter called
26		the "Tax Acts" and such aggregate of 2.2% or 3.8%, as the case

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1		may be, of moneys being hereinafter called the "Tax Act
2		Amount", and (2) the amount transferred to the Build Illinois
3		Fund from the State and Local Sales Tax Reform Fund shall be
4		less than the Annual Specified Amount (as defined in Section 3
5		of the Retailers' Occupation Tax Act), an amount equal to the
6		difference shall be immediately paid into the Build Illinois
7		Fund from other moneys received by the Department pursuant to
8		the Tax Acts; and further provided, that if on the last
9		business day of any month the sum of (1) the Tax Act Amount
10		required to be deposited into the Build Illinois Account in the
11		Build Illinois Fund during such month and (2) the amount
12		transferred during such month to the Build Illinois Fund from
13		the State and Local Sales Tax Reform Fund shall have been less
14		than 1/12 of the Annual Specified Amount, an amount equal to
15		the difference shall be immediately paid into the Build
16		Illinois Fund from other moneys received by the Department
17		pursuant to the Tax Acts; and, further provided, that in no
18		event shall the payments required under the preceding proviso
19		result in aggregate payments into the Build Illinois Fund
20		pursuant to this clause (b) for any fiscal year in excess of
21		the greater of (i) the Tax Act Amount or (ii) the Annual
22		Specified Amount for such fiscal year; and, further provided,
23		that the amounts payable into the Build Illinois Fund under
24		this clause (b) shall be payable only until such time as the
25		aggregate amount on deposit under each trust indenture securing
26		Bonds issued and outstanding pursuant to the Build Illinois

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1		Bond Act is sufficient, taking into account any future
2		investment income, to fully provide, in accordance with such
3		indenture, for the defeasance of or the payment of the
4		principal of, premium, if any, and interest on the Bonds
5		secured by such indenture and on any Bonds expected to be
6		issued thereafter and all fees and costs payable with respect
7		thereto, all as certified by the Director of the Bureau of the
8		Budget (now Governor's Office of Management and Budget). If on
9		the last business day of any month in which Bonds are
10		outstanding pursuant to the Build Illinois Bond Act, the
11		aggregate of the moneys deposited in the Build Illinois Bond
12		Account in the Build Illinois Fund in such month shall be less
13		than the amount required to be transferred in such month from
14		the Build Illinois Bond Account to the Build Illinois Bond
15		Retirement and Interest Fund pursuant to Section 13 of the
16		Build Illinois Bond Act, an amount equal to such deficiency
17		shall be immediately paid from other moneys received by the
18		Department pursuant to the Tax Acts to the Build Illinois Fund;
19		provided, however, that any amounts paid to the Build Illinois
20		Fund in any fiscal year pursuant to this sentence shall be
21		deemed to constitute payments pursuant to clause (b) of the
22		preceding sentence and shall reduce the amount otherwise
23		payable for such fiscal year pursuant to clause (b) of the
24		preceding sentence. The moneys received by the Department
25		pursuant to this Act and required to be deposited into the
26		Build Illinois Fund are subject to the pledge, claim and charge

HB3872 Engrossed - 163 - LRB096 09597 HLH 19758 b
1		set forth in Section 12 of the Build Illinois Bond Act.
2		Subject to payment of amounts into the Build Illinois Fund
3		as provided in the preceding paragraph or in any amendment
4		thereto hereafter enacted, the following specified monthly
5		installment of the amount requested in the certificate of the
6		Chairman of the Metropolitan Pier and Exposition Authority
7		provided under Section 8.25f of the State Finance Act, but not
8		in excess of the sums designated as "Total Deposit", shall be
9		deposited in the aggregate from collections under Section 9 of
10		the Use Tax Act, Section 9 of the Service Use Tax Act, Section
11		9 of the Service Occupation Tax Act, and Section 3 of the
12		Retailers' Occupation Tax Act into the McCormick Place
13		Expansion Project Fund in the specified fiscal years.
14 Fiscal Year Total Deposit 15 1993 $0 16 1994 53,000,000 17 1995 58,000,000 18 1996 61,000,000 19 1997 64,000,000 20 1998 68,000,000 21 1999 71,000,000 22 2000 75,000,000 23 2001 80,000,000 24 2002 93,000,000 25 2003 99,000,000

HB3872 Engrossed - 164 - LRB096 09597 HLH 19758 b

1 2004 103,000,000 2 2005 108,000,000 3 2006 113,000,000 4 2007 119,000,000 5 2008 126,000,000 6 2009 132,000,000 7 2010 139,000,000 8 2011 146,000,000 9 2012 153,000,000 10 2013 161,000,000 11 2014 170,000,000 12 2015 179,000,000 13 2016 189,000,000 14 2017 199,000,000 15 2018 210,000,000 16 2019 221,000,000 17 2020 233,000,000 18 2021 246,000,000 19 2022 260,000,000 20 2023 and 275,000,000 21 each fiscal year 22 thereafter that bonds 23 are outstanding under 24 Section 13.2 of the 25 Metropolitan Pier and 26 Exposition Authority Act,

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1 but not after fiscal year 2042.
2		Beginning July 20, 1993 and in each month of each fiscal
3		year thereafter, one-eighth of the amount requested in the
4		certificate of the Chairman of the Metropolitan Pier and
5		Exposition Authority for that fiscal year, less the amount
6		deposited into the McCormick Place Expansion Project Fund by
7		the State Treasurer in the respective month under subsection
8		(g) of Section 13 of the Metropolitan Pier and Exposition
9		Authority Act, plus cumulative deficiencies in the deposits
10		required under this Section for previous months and years,
11		shall be deposited into the McCormick Place Expansion Project
12		Fund, until the full amount requested for the fiscal year, but
13		not in excess of the amount specified above as "Total Deposit",
14		has been deposited.
15		Subject to payment of amounts into the Build Illinois Fund
16		and the McCormick Place Expansion Project Fund pursuant to the
17		preceding paragraphs or in any amendments thereto hereafter
18		enacted, beginning July 1, 1993, the Department shall each
19		month pay into the Illinois Tax Increment Fund 0.27% of 80% of
20		the net revenue realized for the preceding month from the 6.25%
21		general rate on the selling price of tangible personal
22		property.
23		Subject to payment of amounts into the Build Illinois Fund
24		and the McCormick Place Expansion Project Fund pursuant to the
25		preceding paragraphs or in any amendments thereto hereafter
26		enacted, beginning with the receipt of the first report of

HB3872 Engrossed - 166 - LRB096 09597 HLH 19758 b
1		taxes paid by an eligible business and continuing for a 25-year
2		period, the Department shall each month pay into the Energy
3		Infrastructure Fund 80% of the net revenue realized from the
4		6.25% general rate on the selling price of Illinois-mined coal
5		that was sold to an eligible business. For purposes of this
6		paragraph, the term "eligible business" means a new electric
7		generating facility certified pursuant to Section 605-332 of
8		the Department of Commerce and Economic Opportunity Law of the
9		Civil Administrative Code of Illinois.
10		Remaining moneys received by the Department pursuant to
11		this Act shall be paid into the General Revenue Fund of the
12		State Treasury.
13		The Department may, upon separate written notice to a
14		taxpayer, require the taxpayer to prepare and file with the
15		Department on a form prescribed by the Department within not
16		less than 60 days after receipt of the notice an annual
17		information return for the tax year specified in the notice.
18		Such annual return to the Department shall include a statement
19		of gross receipts as shown by the taxpayer's last Federal
20		income tax return. If the total receipts of the business as
21		reported in the Federal income tax return do not agree with the
22		gross receipts reported to the Department of Revenue for the
23		same period, the taxpayer shall attach to his annual return a
24		schedule showing a reconciliation of the 2 amounts and the
25		reasons for the difference. The taxpayer's annual return to the
26		Department shall also disclose the cost of goods sold by the

HB3872 Engrossed - 167 - LRB096 09597 HLH 19758 b
1		taxpayer during the year covered by such return, opening and
2		closing inventories of such goods for such year, cost of goods
3		used from stock or taken from stock and given away by the
4		taxpayer during such year, pay roll information of the
5		taxpayer's business during such year and any additional
6		reasonable information which the Department deems would be
7		helpful in determining the accuracy of the monthly, quarterly
8		or annual returns filed by such taxpayer as hereinbefore
9		provided for in this Section.
10		If the annual information return required by this Section
11		is not filed when and as required, the taxpayer shall be liable
12		as follows:
13		(i) Until January 1, 1994, the taxpayer shall be liable
14		for a penalty equal to 1/6 of 1% of the tax due from such
15		taxpayer under this Act during the period to be covered by
16		the annual return for each month or fraction of a month
17		until such return is filed as required, the penalty to be
18		assessed and collected in the same manner as any other
19		penalty provided for in this Act.
20		(ii) On and after January 1, 1994, the taxpayer shall
21		be liable for a penalty as described in Section 3-4 of the
22		Uniform Penalty and Interest Act.
23		The chief executive officer, proprietor, owner or highest
24		ranking manager shall sign the annual return to certify the
25		accuracy of the information contained therein. Any person who
26		willfully signs the annual return containing false or

HB3872 Engrossed - 168 - LRB096 09597 HLH 19758 b
1		inaccurate information shall be guilty of perjury and punished
2		accordingly. The annual return form prescribed by the
3		Department shall include a warning that the person signing the
4		return may be liable for perjury.
5		The foregoing portion of this Section concerning the filing
6		of an annual information return shall not apply to a serviceman
7		who is not required to file an income tax return with the
8		United States Government.
9		As soon as possible after the first day of each month, upon
10		certification of the Department of Revenue, the Comptroller
11		shall order transferred and the Treasurer shall transfer from
12		the General Revenue Fund to the Motor Fuel Tax Fund an amount
13		equal to 1.7% of 80% of the net revenue realized under this Act
14		for the second preceding month. Beginning April 1, 2000, this
15		transfer is no longer required and shall not be made.
16		Net revenue realized for a month shall be the revenue
17		collected by the State pursuant to this Act, less the amount
18		paid out during that month as refunds to taxpayers for
19		overpayment of liability.
20		For greater simplicity of administration, it shall be
21		permissible for manufacturers, importers and wholesalers whose
22		products are sold by numerous servicemen in Illinois, and who
23		wish to do so, to assume the responsibility for accounting and
24		paying to the Department all tax accruing under this Act with
25		respect to such sales, if the servicemen who are affected do
26		not make written objection to the Department to this

HB3872 Engrossed - 169 - LRB096 09597 HLH 19758 b
1		arrangement.
2		(Source: P.A. 93-24, eff. 6-20-03; 93-840, eff. 7-30-04;
3		94-1074, eff. 12-26-06.)
4		(35 ILCS 115/15) (from Ch. 120, par. 439.115)
5		Sec. 15. When the amount due is under $300, any person
6		subject to the provisions hereof who fails to file a return, or
7		who violates any other provision of Section 9 or Section 10
8		hereof, or who fails to keep books and records as required
9		herein, or who files a fraudulent return, or who wilfully
10		violates any Rule or Regulation of the Department for the
11		administration and enforcement of the provisions hereof, or any
12		officer or agent of a corporation, or manager, member, or agent
13		of a limited liability company, subject hereto who signs a
14		fraudulent return filed on behalf of such corporation or
15		limited liability company, or any accountant or other agent who
16		knowingly enters false information on the return of any
17		taxpayer under this Act, or any person who violates any of the
18		provisions of Sections 3, 5 or 7 hereof, or any purchaser who
19		obtains a registration number or resale number from the
20		Department through misrepresentation, or who represents to a
21		seller that such purchaser has a registration number or a
22		resale number from the Department when he knows that he does
23		not, or who uses his registration number or resale number to
24		make a seller believe that he is buying tangible personal
25		property for resale when such purchaser in fact knows that this

HB3872 Engrossed - 170 - LRB096 09597 HLH 19758 b
1		is not the case, is guilty of a Class 4 felony.
2		Any person who violates any provision of Section 6 hereof,
3		or who engages in the business of making sales of service after
4		his Certificate of Registration under this Act has been revoked
5		in accordance with Section 12 of this Act, is guilty of a Class
6		4 felony. Each day any such person is engaged in business in
7		violation of Section 6, or after his Certificate of
8		Registration under this Act has been revoked, constitutes a
9		separate offense.
10		When the amount due is under $300, any person who accepts
11		money that is due to the Department under this Act from a
12		taxpayer for the purpose of acting as the taxpayer's agent to
13		make the payment to the Department, but who fails to remit such
14		payment to the Department when due is guilty of a Class 4
15		felony. Any such person who purports to make such payment by
16		issuing or delivering a check or other order upon a real or
17		fictitious depository for the payment of money, knowing that it
18		will not be paid by the depository, shall be guilty of a
19		deceptive practice in violation of Section 17-1 of the Criminal
20		Code of 1961, as amended.
21		When the amount due is $300 or more, any person subject to
22		the provisions hereof who fails to file a return, or who
23		violates any other provision of Section 9 or Section 10 hereof,
24		or who fails to keep books and records as required herein, or
25		who files a fraudulent return, or who wilfully violates any
26		rule or regulation of the Department for the administration and

HB3872 Engrossed - 171 - LRB096 09597 HLH 19758 b
1		enforcement of the provisions hereof, or any officer or agent
2		of a corporation, or manager, member, or agent of a limited
3		liability company, subject hereto who signs a fraudulent return
4		filed on behalf of such corporation or limited liability
5		company, or any accountant or other agent who knowingly enters
6		false information on the return of any taxpayer under this Act,
7		or any person who violates any of the provisions of Sections 3,
8		5 or 7 hereof, or any purchaser who obtains a registration
9		number or resale number from the Department through
10		misrepresentation, or who represents to a seller that such
11		purchaser has a registration number or a resale number from the
12		Department when he knows that he does not, or who uses his
13		registration number or resale number to make a seller believe
14		that he is buying tangible personal property for resale when
15		such purchaser in fact knows that this is not the case, is
16		guilty of a Class 3 felony.
17		When the amount due is $300 or more, any person who accepts
18		money that is due to the Department under this Act from a
19		taxpayer for the purpose of acting as the taxpayer's agent to
20		make the payment to the Department but who fails to remit such
21		payment to the Department when due is guilty of a Class 3
22		felony. Any such person who purports to make such payment by
23		issuing or delivering a check or other order upon a real or
24		fictitious depository for the payment of money, knowing that it
25		will not be paid by the depository shall be guilty of a
26		deceptive practice in violation of Section 17-1 of the Criminal

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1		Code of 1961, as amended.
2		Any serviceman who collects or attempts to collect Service
3		Occupation Tax, measured by receipts which such serviceman
4		knows are not subject to Service Occupation Tax, or any
5		serviceman who collects or attempts to collect an amount
6		(however designated) which purports to reimburse such
7		serviceman for Service Occupation Tax liability measured by
8		receipts or selling prices which such serviceman knows are not
9		subject to Service Occupation Tax, or any serviceman who
10		knowingly over-collects or attempts to over-collect Service
11		Occupation Tax or an amount purporting to be reimbursement for
12		Service Occupation Tax liability in a transaction which is
13		subject to the tax that is imposed by this Act, shall be guilty
14		of a Class 4 felony for each such offense. This paragraph does
15		not apply to an amount collected by the serviceman as
16		reimbursement for the serviceman's Service Occupation Tax
17		liability on receipts or selling prices which are subject to
18		tax under this Act, as long as such collection is made in
19		compliance with the tax collection brackets prescribed by the
20		Department in its Rules and Regulations.
21		A prosecution for any act in violation of this Section may
22		be commenced at any time within 6 3 years of the commission of
23		that act.
24		This Section does not apply if the violation in a
25		particular case also constitutes a criminal violation of the
26		Retailers' Occupation Tax Act or the Use Tax Act.

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1		(Source: P.A. 91-51, eff. 6-30-99.)
2		Section 35. The Retailers' Occupation Tax Act is amended by
3		changing Sections 3 and 13 as follows:
4		(35 ILCS 120/3) (from Ch. 120, par. 442)
5		Sec. 3. Except as provided in this Section, on or before
6		the twentieth day of each calendar month, every person engaged
7		in the business of selling tangible personal property at retail
8		in this State during the preceding calendar month shall file a
9		return with the Department, stating:
10		1. The name of the seller;
11		2. His residence address and the address of his
12		principal place of business and the address of the
13		principal place of business (if that is a different
14		address) from which he engages in the business of selling
15		tangible personal property at retail in this State;
16		3. Total amount of receipts received by him during the
17		preceding calendar month or quarter, as the case may be,
18		from sales of tangible personal property, and from services
19		furnished, by him during such preceding calendar month or
20		quarter;
21		4. Total amount received by him during the preceding
22		calendar month or quarter on charge and time sales of
23		tangible personal property, and from services furnished,
24		by him prior to the month or quarter for which the return

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1		is filed;
2		5. Deductions allowed by law;
3		6. Gross receipts which were received by him during the
4		preceding calendar month or quarter and upon the basis of
5		which the tax is imposed;
6		7. The amount of credit provided in Section 2d of this
7		Act;
8		8. The amount of tax due;
9		9. The signature of the taxpayer; and
10		10. Such other reasonable information as the
11		Department may require.
12		If a taxpayer fails to sign a return within 30 days after
13		the proper notice and demand for signature by the Department,
14		the return shall be considered valid and any amount shown to be
15		due on the return shall be deemed assessed.
16		Each return shall be accompanied by the statement of
17		prepaid tax issued pursuant to Section 2e for which credit is
18		claimed.
19		Prior to October 1, 2003, and on and after September 1,
20		2004 a retailer may accept a Manufacturer's Purchase Credit
21		certification from a purchaser in satisfaction of Use Tax as
22		provided in Section 3-85 of the Use Tax Act if the purchaser
23		provides the appropriate documentation as required by Section
24		3-85 of the Use Tax Act. A Manufacturer's Purchase Credit
25		certification, accepted by a retailer prior to October 1, 2003
26		and on and after September 1, 2004 as provided in Section 3-85

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1		of the Use Tax Act, may be used by that retailer to satisfy
2		Retailers' Occupation Tax liability in the amount claimed in
3		the certification, not to exceed 6.25% of the receipts subject
4		to tax from a qualifying purchase. A Manufacturer's Purchase
5		Credit reported on any original or amended return filed under
6		this Act after October 20, 2003 for reporting periods prior to
7		September 1, 2004 shall be disallowed. Manufacturer's
8		Purchaser Credit reported on annual returns due on or after
9		January 1, 2005 will be disallowed for periods prior to
10		September 1, 2004. No Manufacturer's Purchase Credit may be
11		used after September 30, 2003 through August 31, 2004 to
12		satisfy any tax liability imposed under this Act, including any
13		audit liability.
14		The Department may require returns to be filed on a
15		quarterly basis. If so required, a return for each calendar
16		quarter shall be filed on or before the twentieth day of the
17		calendar month following the end of such calendar quarter. The
18		taxpayer shall also file a return with the Department for each
19		of the first two months of each calendar quarter, on or before
20		the twentieth day of the following calendar month, stating:
21		1. The name of the seller;
22		2. The address of the principal place of business from
23		which he engages in the business of selling tangible
24		personal property at retail in this State;
25		3. The total amount of taxable receipts received by him
26		during the preceding calendar month from sales of tangible

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1		personal property by him during such preceding calendar
2		month, including receipts from charge and time sales, but
3		less all deductions allowed by law;
4		4. The amount of credit provided in Section 2d of this
5		Act;
6		5. The amount of tax due; and
7		6. Such other reasonable information as the Department
8		may require.
9		Beginning on October 1, 2003, any person who is not a
10		licensed distributor, importing distributor, or manufacturer,
11		as defined in the Liquor Control Act of 1934, but is engaged in
12		the business of selling, at retail, alcoholic liquor shall file
13		a statement with the Department of Revenue, in a format and at
14		a time prescribed by the Department, showing the total amount
15		paid for alcoholic liquor purchased during the preceding month
16		and such other information as is reasonably required by the
17		Department. The Department may adopt rules to require that this
18		statement be filed in an electronic or telephonic format. Such
19		rules may provide for exceptions from the filing requirements
20		of this paragraph. For the purposes of this paragraph, the term
21		"alcoholic liquor" shall have the meaning prescribed in the
22		Liquor Control Act of 1934.
23		Beginning on October 1, 2003, every distributor, importing
24		distributor, and manufacturer of alcoholic liquor as defined in
25		the Liquor Control Act of 1934, shall file a statement with the
26		Department of Revenue, no later than the 10th day of the month

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1		for the preceding month during which transactions occurred, by
2		electronic means, showing the total amount of gross receipts
3		from the sale of alcoholic liquor sold or distributed during
4		the preceding month to purchasers; identifying the purchaser to
5		whom it was sold or distributed; the purchaser's tax
6		registration number; and such other information reasonably
7		required by the Department. A distributor, importing
8		distributor, or manufacturer of alcoholic liquor must
9		personally deliver, mail, or provide by electronic means to
10		each retailer listed on the monthly statement a report
11		containing a cumulative total of that distributor's, importing
12		distributor's, or manufacturer's total sales of alcoholic
13		liquor to that retailer no later than the 10th day of the month
14		for the preceding month during which the transaction occurred.
15		The distributor, importing distributor, or manufacturer shall
16		notify the retailer as to the method by which the distributor,
17		importing distributor, or manufacturer will provide the sales
18		information. If the retailer is unable to receive the sales
19		information by electronic means, the distributor, importing
20		distributor, or manufacturer shall furnish the sales
21		information by personal delivery or by mail. For purposes of
22		this paragraph, the term "electronic means" includes, but is
23		not limited to, the use of a secure Internet website, e-mail,
24		or facsimile.
25		If a total amount of less than $1 is payable, refundable or
26		creditable, such amount shall be disregarded if it is less than

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1		50 cents and shall be increased to $1 if it is 50 cents or more.
2		Beginning October 1, 1993, a taxpayer who has an average
3		monthly tax liability of $150,000 or more shall make all
4		payments required by rules of the Department by electronic
5		funds transfer. Beginning October 1, 1994, a taxpayer who has
6		an average monthly tax liability of $100,000 or more shall make
7		all payments required by rules of the Department by electronic
8		funds transfer. Beginning October 1, 1995, a taxpayer who has
9		an average monthly tax liability of $50,000 or more shall make
10		all payments required by rules of the Department by electronic
11		funds transfer. Beginning October 1, 2000, a taxpayer who has
12		an annual tax liability of $200,000 or more shall make all
13		payments required by rules of the Department by electronic
14		funds transfer. The term "annual tax liability" shall be the
15		sum of the taxpayer's liabilities under this Act, and under all
16		other State and local occupation and use tax laws administered
17		by the Department, for the immediately preceding calendar year.
18		The term "average monthly tax liability" shall be the sum of
19		the taxpayer's liabilities under this Act, and under all other
20		State and local occupation and use tax laws administered by the
21		Department, for the immediately preceding calendar year
22		divided by 12. Beginning on October 1, 2002, a taxpayer who has
23		a tax liability in the amount set forth in subsection (b) of
24		Section 2505-210 of the Department of Revenue Law shall make
25		all payments required by rules of the Department by electronic
26		funds transfer.

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1		Before August 1 of each year beginning in 1993, the
2		Department shall notify all taxpayers required to make payments
3		by electronic funds transfer. All taxpayers required to make
4		payments by electronic funds transfer shall make those payments
5		for a minimum of one year beginning on October 1.
6		Any taxpayer not required to make payments by electronic
7		funds transfer may make payments by electronic funds transfer
8		with the permission of the Department.
9		All taxpayers required to make payment by electronic funds
10		transfer and any taxpayers authorized to voluntarily make
11		payments by electronic funds transfer shall make those payments
12		in the manner authorized by the Department.
13		The Department shall adopt such rules as are necessary to
14		effectuate a program of electronic funds transfer and the
15		requirements of this Section.
16		Any amount which is required to be shown or reported on any
17		return or other document under this Act shall, if such amount
18		is not a whole-dollar amount, be increased to the nearest
19		whole-dollar amount in any case where the fractional part of a
20		dollar is 50 cents or more, and decreased to the nearest
21		whole-dollar amount where the fractional part of a dollar is
22		less than 50 cents.
23		If the retailer is otherwise required to file a monthly
24		return and if the retailer's average monthly tax liability to
25		the Department does not exceed $200, the Department may
26		authorize his returns to be filed on a quarter annual basis,

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1		with the return for January, February and March of a given year
2		being due by April 20 of such year; with the return for April,
3		May and June of a given year being due by July 20 of such year;
4		with the return for July, August and September of a given year
5		being due by October 20 of such year, and with the return for
6		October, November and December of a given year being due by
7		January 20 of the following year.
8		If the retailer is otherwise required to file a monthly or
9		quarterly return and if the retailer's average monthly tax
10		liability with the Department does not exceed $50, the
11		Department may authorize his returns to be filed on an annual
12		basis, with the return for a given year being due by January 20
13		of the following year.
14		Such quarter annual and annual returns, as to form and
15		substance, shall be subject to the same requirements as monthly
16		returns.
17		Notwithstanding any other provision in this Act concerning
18		the time within which a retailer may file his return, in the
19		case of any retailer who ceases to engage in a kind of business
20		which makes him responsible for filing returns under this Act,
21		such retailer shall file a final return under this Act with the
22		Department not more than one month after discontinuing such
23		business.
24		Where the same person has more than one business registered
25		with the Department under separate registrations under this
26		Act, such person may not file each return that is due as a

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1		single return covering all such registered businesses, but
2		shall file separate returns for each such registered business.
3		In addition, with respect to motor vehicles, watercraft,
4		aircraft, and trailers that are required to be registered with
5		an agency of this State, every retailer selling this kind of
6		tangible personal property shall file, with the Department,
7		upon a form to be prescribed and supplied by the Department, a
8		separate return for each such item of tangible personal
9		property which the retailer sells, except that if, in the same
10		transaction, (i) a retailer of aircraft, watercraft, motor
11		vehicles or trailers transfers more than one aircraft,
12		watercraft, motor vehicle or trailer to another aircraft,
13		watercraft, motor vehicle retailer or trailer retailer for the
14		purpose of resale or (ii) a retailer of aircraft, watercraft,
15		motor vehicles, or trailers transfers more than one aircraft,
16		watercraft, motor vehicle, or trailer to a purchaser for use as
17		a qualifying rolling stock as provided in Section 2-5 of this
18		Act, then that seller may report the transfer of all aircraft,
19		watercraft, motor vehicles or trailers involved in that
20		transaction to the Department on the same uniform
21		invoice-transaction reporting return form. For purposes of
22		this Section, "watercraft" means a Class 2, Class 3, or Class 4
23		watercraft as defined in Section 3-2 of the Boat Registration
24		and Safety Act, a personal watercraft, or any boat equipped
25		with an inboard motor.
26		Any retailer who sells only motor vehicles, watercraft,

HB3872 Engrossed - 182 - LRB096 09597 HLH 19758 b
1		aircraft, or trailers that are required to be registered with
2		an agency of this State, so that all retailers' occupation tax
3		liability is required to be reported, and is reported, on such
4		transaction reporting returns and who is not otherwise required
5		to file monthly or quarterly returns, need not file monthly or
6		quarterly returns. However, those retailers shall be required
7		to file returns on an annual basis.
8		The transaction reporting return, in the case of motor
9		vehicles or trailers that are required to be registered with an
10		agency of this State, shall be the same document as the Uniform
11		Invoice referred to in Section 5-402 of The Illinois Vehicle
12		Code and must show the name and address of the seller; the name
13		and address of the purchaser; the amount of the selling price
14		including the amount allowed by the retailer for traded-in
15		property, if any; the amount allowed by the retailer for the
16		traded-in tangible personal property, if any, to the extent to
17		which Section 1 of this Act allows an exemption for the value
18		of traded-in property; the balance payable after deducting such
19		trade-in allowance from the total selling price; the amount of
20		tax due from the retailer with respect to such transaction; the
21		amount of tax collected from the purchaser by the retailer on
22		such transaction (or satisfactory evidence that such tax is not
23		due in that particular instance, if that is claimed to be the
24		fact); the place and date of the sale; a sufficient
25		identification of the property sold; such other information as
26		is required in Section 5-402 of The Illinois Vehicle Code, and

HB3872 Engrossed - 183 - LRB096 09597 HLH 19758 b
1		such other information as the Department may reasonably
2		require.
3		The transaction reporting return in the case of watercraft
4		or aircraft must show the name and address of the seller; the
5		name and address of the purchaser; the amount of the selling
6		price including the amount allowed by the retailer for
7		traded-in property, if any; the amount allowed by the retailer
8		for the traded-in tangible personal property, if any, to the
9		extent to which Section 1 of this Act allows an exemption for
10		the value of traded-in property; the balance payable after
11		deducting such trade-in allowance from the total selling price;
12		the amount of tax due from the retailer with respect to such
13		transaction; the amount of tax collected from the purchaser by
14		the retailer on such transaction (or satisfactory evidence that
15		such tax is not due in that particular instance, if that is
16		claimed to be the fact); the place and date of the sale, a
17		sufficient identification of the property sold, and such other
18		information as the Department may reasonably require.
19		Such transaction reporting return shall be filed not later
20		than 20 days after the day of delivery of the item that is
21		being sold, but may be filed by the retailer at any time sooner
22		than that if he chooses to do so. The transaction reporting
23		return and tax remittance or proof of exemption from the
24		Illinois use tax may be transmitted to the Department by way of
25		the State agency with which, or State officer with whom the
26		tangible personal property must be titled or registered (if

HB3872 Engrossed - 184 - LRB096 09597 HLH 19758 b
1		titling or registration is required) if the Department and such
2		agency or State officer determine that this procedure will
3		expedite the processing of applications for title or
4		registration.
5		With each such transaction reporting return, the retailer
6		shall remit the proper amount of tax due (or shall submit
7		satisfactory evidence that the sale is not taxable if that is
8		the case), to the Department or its agents, whereupon the
9		Department shall issue, in the purchaser's name, a use tax
10		receipt (or a certificate of exemption if the Department is
11		satisfied that the particular sale is tax exempt) which such
12		purchaser may submit to the agency with which, or State officer
13		with whom, he must title or register the tangible personal
14		property that is involved (if titling or registration is
15		required) in support of such purchaser's application for an
16		Illinois certificate or other evidence of title or registration
17		to such tangible personal property.
18		No retailer's failure or refusal to remit tax under this
19		Act precludes a user, who has paid the proper tax to the
20		retailer, from obtaining his certificate of title or other
21		evidence of title or registration (if titling or registration
22		is required) upon satisfying the Department that such user has
23		paid the proper tax (if tax is due) to the retailer. The
24		Department shall adopt appropriate rules to carry out the
25		mandate of this paragraph.
26		If the user who would otherwise pay tax to the retailer

HB3872 Engrossed - 185 - LRB096 09597 HLH 19758 b
1		wants the transaction reporting return filed and the payment of
2		the tax or proof of exemption made to the Department before the
3		retailer is willing to take these actions and such user has not
4		paid the tax to the retailer, such user may certify to the fact
5		of such delay by the retailer and may (upon the Department
6		being satisfied of the truth of such certification) transmit
7		the information required by the transaction reporting return
8		and the remittance for tax or proof of exemption directly to
9		the Department and obtain his tax receipt or exemption
10		determination, in which event the transaction reporting return
11		and tax remittance (if a tax payment was required) shall be
12		credited by the Department to the proper retailer's account
13		with the Department, but without the 2.1% or 1.75% discount
14		provided for in this Section being allowed. When the user pays
15		the tax directly to the Department, he shall pay the tax in the
16		same amount and in the same form in which it would be remitted
17		if the tax had been remitted to the Department by the retailer.
18		Refunds made by the seller during the preceding return
19		period to purchasers, on account of tangible personal property
20		returned to the seller, shall be allowed as a deduction under
21		subdivision 5 of his monthly or quarterly return, as the case
22		may be, in case the seller had theretofore included the
23		receipts from the sale of such tangible personal property in a
24		return filed by him and had paid the tax imposed by this Act
25		with respect to such receipts.
26		Where the seller is a corporation, the return filed on

HB3872 Engrossed - 186 - LRB096 09597 HLH 19758 b
1		behalf of such corporation shall be signed by the president,
2		vice-president, secretary or treasurer or by the properly
3		accredited agent of such corporation.
4		Where the seller is a limited liability company, the return
5		filed on behalf of the limited liability company shall be
6		signed by a manager, member, or properly accredited agent of
7		the limited liability company.
8		Except as provided in this Section, the retailer filing the
9		return under this Section shall, at the time of filing such
10		return, pay to the Department the amount of tax imposed by this
11		Act less a discount of 2.1% prior to January 1, 1990 and 1.75%
12		on and after January 1, 1990, or $5 per calendar year,
13		whichever is greater, which is allowed to reimburse the
14		retailer for the expenses incurred in keeping records,
15		preparing and filing returns, remitting the tax and supplying
16		data to the Department on request. Any prepayment made pursuant
17		to Section 2d of this Act shall be included in the amount on
18		which such 2.1% or 1.75% discount is computed. In the case of
19		retailers who report and pay the tax on a transaction by
20		transaction basis, as provided in this Section, such discount
21		shall be taken with each such tax remittance instead of when
22		such retailer files his periodic return. The discount provided
23		to retailers in this Section shall be allowed on a return only
24		if that retailer possessed a valid certificate of registration
25		issued under Section 2a of this Act during the entire reporting
26		period for that return.

HB3872 Engrossed - 187 - LRB096 09597 HLH 19758 b
1		Before October 1, 2000, if the taxpayer's average monthly
2		tax liability to the Department under this Act, the Use Tax
3		Act, the Service Occupation Tax Act, and the Service Use Tax
4		Act, excluding any liability for prepaid sales tax to be
5		remitted in accordance with Section 2d of this Act, was $10,000
6		or more during the preceding 4 complete calendar quarters, he
7		shall file a return with the Department each month by the 20th
8		day of the month next following the month during which such tax
9		liability is incurred and shall make payments to the Department
10		on or before the 7th, 15th, 22nd and last day of the month
11		during which such liability is incurred. On and after October
12		1, 2000, if the taxpayer's average monthly tax liability to the
13		Department under this Act, the Use Tax Act, the Service
14		Occupation Tax Act, and the Service Use Tax Act, excluding any
15		liability for prepaid sales tax to be remitted in accordance
16		with Section 2d of this Act, was $20,000 or more during the
17		preceding 4 complete calendar quarters, he shall file a return
18		with the Department each month by the 20th day of the month
19		next following the month during which such tax liability is
20		incurred and shall make payment to the Department on or before
21		the 7th, 15th, 22nd and last day of the month during which such
22		liability is incurred. If the month during which such tax
23		liability is incurred began prior to January 1, 1985, each
24		payment shall be in an amount equal to 1/4 of the taxpayer's
25		actual liability for the month or an amount set by the
26		Department not to exceed 1/4 of the average monthly liability

HB3872 Engrossed - 188 - LRB096 09597 HLH 19758 b
1		of the taxpayer to the Department for the preceding 4 complete
2		calendar quarters (excluding the month of highest liability and
3		the month of lowest liability in such 4 quarter period). If the
4		month during which such tax liability is incurred begins on or
5		after January 1, 1985 and prior to January 1, 1987, each
6		payment shall be in an amount equal to 22.5% of the taxpayer's
7		actual liability for the month or 27.5% of the taxpayer's
8		liability for the same calendar month of the preceding year. If
9		the month during which such tax liability is incurred begins on
10		or after January 1, 1987 and prior to January 1, 1988, each
11		payment shall be in an amount equal to 22.5% of the taxpayer's
12		actual liability for the month or 26.25% of the taxpayer's
13		liability for the same calendar month of the preceding year. If
14		the month during which such tax liability is incurred begins on
15		or after January 1, 1988, and prior to January 1, 1989, or
16		begins on or after January 1, 1996, each payment shall be in an
17		amount equal to 22.5% of the taxpayer's actual liability for
18		the month or 25% of the taxpayer's liability for the same
19		calendar month of the preceding year. If the month during which
20		such tax liability is incurred begins on or after January 1,
21		1989, and prior to January 1, 1996, each payment shall be in an
22		amount equal to 22.5% of the taxpayer's actual liability for
23		the month or 25% of the taxpayer's liability for the same
24		calendar month of the preceding year or 100% of the taxpayer's
25		actual liability for the quarter monthly reporting period. The
26		amount of such quarter monthly payments shall be credited

HB3872 Engrossed - 189 - LRB096 09597 HLH 19758 b
1		against the final tax liability of the taxpayer's return for
2		that month. Before October 1, 2000, once applicable, the
3		requirement of the making of quarter monthly payments to the
4		Department by taxpayers having an average monthly tax liability
5		of $10,000 or more as determined in the manner provided above
6		shall continue until such taxpayer's average monthly liability
7		to the Department during the preceding 4 complete calendar
8		quarters (excluding the month of highest liability and the
9		month of lowest liability) is less than $9,000, or until such
10		taxpayer's average monthly liability to the Department as
11		computed for each calendar quarter of the 4 preceding complete
12		calendar quarter period is less than $10,000. However, if a
13		taxpayer can show the Department that a substantial change in
14		the taxpayer's business has occurred which causes the taxpayer
15		to anticipate that his average monthly tax liability for the
16		reasonably foreseeable future will fall below the $10,000
17		threshold stated above, then such taxpayer may petition the
18		Department for a change in such taxpayer's reporting status. On
19		and after October 1, 2000, once applicable, the requirement of
20		the making of quarter monthly payments to the Department by
21		taxpayers having an average monthly tax liability of $20,000 or
22		more as determined in the manner provided above shall continue
23		until such taxpayer's average monthly liability to the
24		Department during the preceding 4 complete calendar quarters
25		(excluding the month of highest liability and the month of
26		lowest liability) is less than $19,000 or until such taxpayer's

HB3872 Engrossed - 190 - LRB096 09597 HLH 19758 b
1		average monthly liability to the Department as computed for
2		each calendar quarter of the 4 preceding complete calendar
3		quarter period is less than $20,000. However, if a taxpayer can
4		show the Department that a substantial change in the taxpayer's
5		business has occurred which causes the taxpayer to anticipate
6		that his average monthly tax liability for the reasonably
7		foreseeable future will fall below the $20,000 threshold stated
8		above, then such taxpayer may petition the Department for a
9		change in such taxpayer's reporting status. The Department
10		shall change such taxpayer's reporting status unless it finds
11		that such change is seasonal in nature and not likely to be
12		long term. If any such quarter monthly payment is not paid at
13		the time or in the amount required by this Section, then the
14		taxpayer shall be liable for penalties and interest on the
15		difference between the minimum amount due as a payment and the
16		amount of such quarter monthly payment actually and timely
17		paid, except insofar as the taxpayer has previously made
18		payments for that month to the Department in excess of the
19		minimum payments previously due as provided in this Section.
20		The Department shall make reasonable rules and regulations to
21		govern the quarter monthly payment amount and quarter monthly
22		payment dates for taxpayers who file on other than a calendar
23		monthly basis.
24		The provisions of this paragraph apply before October 1,
25		2001. Without regard to whether a taxpayer is required to make
26		quarter monthly payments as specified above, any taxpayer who

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1		is required by Section 2d of this Act to collect and remit
2		prepaid taxes and has collected prepaid taxes which average in
3		excess of $25,000 per month during the preceding 2 complete
4		calendar quarters, shall file a return with the Department as
5		required by Section 2f and shall make payments to the
6		Department on or before the 7th, 15th, 22nd and last day of the
7		month during which such liability is incurred. If the month
8		during which such tax liability is incurred began prior to the
9		effective date of this amendatory Act of 1985, each payment
10		shall be in an amount not less than 22.5% of the taxpayer's
11		actual liability under Section 2d. If the month during which
12		such tax liability is incurred begins on or after January 1,
13		1986, each payment shall be in an amount equal to 22.5% of the
14		taxpayer's actual liability for the month or 27.5% of the
15		taxpayer's liability for the same calendar month of the
16		preceding calendar year. If the month during which such tax
17		liability is incurred begins on or after January 1, 1987, each
18		payment shall be in an amount equal to 22.5% of the taxpayer's
19		actual liability for the month or 26.25% of the taxpayer's
20		liability for the same calendar month of the preceding year.
21		The amount of such quarter monthly payments shall be credited
22		against the final tax liability of the taxpayer's return for
23		that month filed under this Section or Section 2f, as the case
24		may be. Once applicable, the requirement of the making of
25		quarter monthly payments to the Department pursuant to this
26		paragraph shall continue until such taxpayer's average monthly

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1		prepaid tax collections during the preceding 2 complete
2		calendar quarters is $25,000 or less. If any such quarter
3		monthly payment is not paid at the time or in the amount
4		required, the taxpayer shall be liable for penalties and
5		interest on such difference, except insofar as the taxpayer has
6		previously made payments for that month in excess of the
7		minimum payments previously due.
8		The provisions of this paragraph apply on and after October
9		1, 2001. Without regard to whether a taxpayer is required to
10		make quarter monthly payments as specified above, any taxpayer
11		who is required by Section 2d of this Act to collect and remit
12		prepaid taxes and has collected prepaid taxes that average in
13		excess of $20,000 per month during the preceding 4 complete
14		calendar quarters shall file a return with the Department as
15		required by Section 2f and shall make payments to the
16		Department on or before the 7th, 15th, 22nd and last day of the
17		month during which the liability is incurred. Each payment
18		shall be in an amount equal to 22.5% of the taxpayer's actual
19		liability for the month or 25% of the taxpayer's liability for
20		the same calendar month of the preceding year. The amount of
21		the quarter monthly payments shall be credited against the
22		final tax liability of the taxpayer's return for that month
23		filed under this Section or Section 2f, as the case may be.
24		Once applicable, the requirement of the making of quarter
25		monthly payments to the Department pursuant to this paragraph
26		shall continue until the taxpayer's average monthly prepaid tax

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1		collections during the preceding 4 complete calendar quarters
2		(excluding the month of highest liability and the month of
3		lowest liability) is less than $19,000 or until such taxpayer's
4		average monthly liability to the Department as computed for
5		each calendar quarter of the 4 preceding complete calendar
6		quarters is less than $20,000. If any such quarter monthly
7		payment is not paid at the time or in the amount required, the
8		taxpayer shall be liable for penalties and interest on such
9		difference, except insofar as the taxpayer has previously made
10		payments for that month in excess of the minimum payments
11		previously due.
12		If any payment provided for in this Section exceeds the
13		taxpayer's liabilities under this Act, the Use Tax Act, the
14		Service Occupation Tax Act and the Service Use Tax Act, as
15		shown on an original monthly return, the Department shall, if
16		requested by the taxpayer, issue to the taxpayer a credit
17		memorandum no later than 30 days after the date of payment. The
18		credit evidenced by such credit memorandum may be assigned by
19		the taxpayer to a similar taxpayer under this Act, the Use Tax
20		Act, the Service Occupation Tax Act or the Service Use Tax Act,
21		in accordance with reasonable rules and regulations to be
22		prescribed by the Department. If no such request is made, the
23		taxpayer may credit such excess payment against tax liability
24		subsequently to be remitted to the Department under this Act,
25		the Use Tax Act, the Service Occupation Tax Act or the Service
26		Use Tax Act, in accordance with reasonable rules and

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1		regulations prescribed by the Department. If the Department
2		subsequently determined that all or any part of the credit
3		taken was not actually due to the taxpayer, the taxpayer's 2.1%
4		and 1.75% vendor's discount shall be reduced by 2.1% or 1.75%
5		of the difference between the credit taken and that actually
6		due, and that taxpayer shall be liable for penalties and
7		interest on such difference.
8		If a retailer of motor fuel is entitled to a credit under
9		Section 2d of this Act which exceeds the taxpayer's liability
10		to the Department under this Act for the month which the
11		taxpayer is filing a return, the Department shall issue the
12		taxpayer a credit memorandum for the excess.
13		Beginning January 1, 1990, each month the Department shall
14		pay into the Local Government Tax Fund, a special fund in the
15		State treasury which is hereby created, the net revenue
16		realized for the preceding month from the 1% tax on sales of
17		food for human consumption which is to be consumed off the
18		premises where it is sold (other than alcoholic beverages, soft
19		drinks and food which has been prepared for immediate
20		consumption) and prescription and nonprescription medicines,
21		drugs, medical appliances and insulin, urine testing
22		materials, syringes and needles used by diabetics.
23		Beginning January 1, 1990, each month the Department shall
24		pay into the County and Mass Transit District Fund, a special
25		fund in the State treasury which is hereby created, 4% of the
26		net revenue realized for the preceding month from the 6.25%

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1		general rate.
2		Beginning August 1, 2000, each month the Department shall
3		pay into the County and Mass Transit District Fund 20% of the
4		net revenue realized for the preceding month from the 1.25%
5		rate on the selling price of motor fuel and gasohol.
6		Beginning January 1, 1990, each month the Department shall
7		pay into the Local Government Tax Fund 16% of the net revenue
8		realized for the preceding month from the 6.25% general rate on
9		the selling price of tangible personal property.
10		Beginning August 1, 2000, each month the Department shall
11		pay into the Local Government Tax Fund 80% of the net revenue
12		realized for the preceding month from the 1.25% rate on the
13		selling price of motor fuel and gasohol.
14		Of the remainder of the moneys received by the Department
15		pursuant to this Act, (a) 1.75% thereof shall be paid into the
16		Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
17		and after July 1, 1989, 3.8% thereof shall be paid into the
18		Build Illinois Fund; provided, however, that if in any fiscal
19		year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
20		may be, of the moneys received by the Department and required
21		to be paid into the Build Illinois Fund pursuant to this Act,
22		Section 9 of the Use Tax Act, Section 9 of the Service Use Tax
23		Act, and Section 9 of the Service Occupation Tax Act, such Acts
24		being hereinafter called the "Tax Acts" and such aggregate of
25		2.2% or 3.8%, as the case may be, of moneys being hereinafter
26		called the "Tax Act Amount", and (2) the amount transferred to

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1		the Build Illinois Fund from the State and Local Sales Tax
2		Reform Fund shall be less than the Annual Specified Amount (as
3		hereinafter defined), an amount equal to the difference shall
4		be immediately paid into the Build Illinois Fund from other
5		moneys received by the Department pursuant to the Tax Acts; the
6		"Annual Specified Amount" means the amounts specified below for
7		fiscal years 1986 through 1993:
8 Fiscal Year Annual Specified Amount 9 1986 $54,800,000 10 1987 $76,650,000 11 1988 $80,480,000 12 1989 $88,510,000 13 1990 $115,330,000 14 1991 $145,470,000 15 1992 $182,730,000 16 1993 $206,520,000;
17		and means the Certified Annual Debt Service Requirement (as
18		defined in Section 13 of the Build Illinois Bond Act) or the
19		Tax Act Amount, whichever is greater, for fiscal year 1994 and
20		each fiscal year thereafter; and further provided, that if on
21		the last business day of any month the sum of (1) the Tax Act
22		Amount required to be deposited into the Build Illinois Bond
23		Account in the Build Illinois Fund during such month and (2)
24		the amount transferred to the Build Illinois Fund from the
25		State and Local Sales Tax Reform Fund shall have been less than
26		1/12 of the Annual Specified Amount, an amount equal to the

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1		difference shall be immediately paid into the Build Illinois
2		Fund from other moneys received by the Department pursuant to
3		the Tax Acts; and, further provided, that in no event shall the
4		payments required under the preceding proviso result in
5		aggregate payments into the Build Illinois Fund pursuant to
6		this clause (b) for any fiscal year in excess of the greater of
7		(i) the Tax Act Amount or (ii) the Annual Specified Amount for
8		such fiscal year. The amounts payable into the Build Illinois
9		Fund under clause (b) of the first sentence in this paragraph
10		shall be payable only until such time as the aggregate amount
11		on deposit under each trust indenture securing Bonds issued and
12		outstanding pursuant to the Build Illinois Bond Act is
13		sufficient, taking into account any future investment income,
14		to fully provide, in accordance with such indenture, for the
15		defeasance of or the payment of the principal of, premium, if
16		any, and interest on the Bonds secured by such indenture and on
17		any Bonds expected to be issued thereafter and all fees and
18		costs payable with respect thereto, all as certified by the
19		Director of the Bureau of the Budget (now Governor's Office of
20		Management and Budget). If on the last business day of any
21		month in which Bonds are outstanding pursuant to the Build
22		Illinois Bond Act, the aggregate of moneys deposited in the
23		Build Illinois Bond Account in the Build Illinois Fund in such
24		month shall be less than the amount required to be transferred
25		in such month from the Build Illinois Bond Account to the Build
26		Illinois Bond Retirement and Interest Fund pursuant to Section

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1		13 of the Build Illinois Bond Act, an amount equal to such
2		deficiency shall be immediately paid from other moneys received
3		by the Department pursuant to the Tax Acts to the Build
4		Illinois Fund; provided, however, that any amounts paid to the
5		Build Illinois Fund in any fiscal year pursuant to this
6		sentence shall be deemed to constitute payments pursuant to
7		clause (b) of the first sentence of this paragraph and shall
8		reduce the amount otherwise payable for such fiscal year
9		pursuant to that clause (b). The moneys received by the
10		Department pursuant to this Act and required to be deposited
11		into the Build Illinois Fund are subject to the pledge, claim
12		and charge set forth in Section 12 of the Build Illinois Bond
13		Act.
14		Subject to payment of amounts into the Build Illinois Fund
15		as provided in the preceding paragraph or in any amendment
16		thereto hereafter enacted, the following specified monthly
17		installment of the amount requested in the certificate of the
18		Chairman of the Metropolitan Pier and Exposition Authority
19		provided under Section 8.25f of the State Finance Act, but not
20		in excess of sums designated as "Total Deposit", shall be
21		deposited in the aggregate from collections under Section 9 of
22		the Use Tax Act, Section 9 of the Service Use Tax Act, Section
23		9 of the Service Occupation Tax Act, and Section 3 of the
24		Retailers' Occupation Tax Act into the McCormick Place
25		Expansion Project Fund in the specified fiscal years.

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1 Fiscal Year Total Deposit 2 1993 $0 3 1994 53,000,000 4 1995 58,000,000 5 1996 61,000,000 6 1997 64,000,000 7 1998 68,000,000 8 1999 71,000,000 9 2000 75,000,000 10 2001 80,000,000 11 2002 93,000,000 12 2003 99,000,000 13 2004 103,000,000 14 2005 108,000,000 15 2006 113,000,000 16 2007 119,000,000 17 2008 126,000,000 18 2009 132,000,000 19 2010 139,000,000 20 2011 146,000,000 21 2012 153,000,000 22 2013 161,000,000 23 2014 170,000,000 24 2015 179,000,000 25 2016 189,000,000

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1 2017 199,000,000 2 2018 210,000,000 3 2019 221,000,000 4 2020 233,000,000 5 2021 246,000,000 6 2022 260,000,000 7 2023 and 275,000,000 8 each fiscal year 9 thereafter that bonds 10 are outstanding under 11 Section 13.2 of the 12 Metropolitan Pier and 13 Exposition Authority Act, 14 but not after fiscal year 2042.
15		Beginning July 20, 1993 and in each month of each fiscal
16		year thereafter, one-eighth of the amount requested in the
17		certificate of the Chairman of the Metropolitan Pier and
18		Exposition Authority for that fiscal year, less the amount
19		deposited into the McCormick Place Expansion Project Fund by
20		the State Treasurer in the respective month under subsection
21		(g) of Section 13 of the Metropolitan Pier and Exposition
22		Authority Act, plus cumulative deficiencies in the deposits
23		required under this Section for previous months and years,
24		shall be deposited into the McCormick Place Expansion Project
25		Fund, until the full amount requested for the fiscal year, but
26		not in excess of the amount specified above as "Total Deposit",

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1		has been deposited.
2		Subject to payment of amounts into the Build Illinois Fund
3		and the McCormick Place Expansion Project Fund pursuant to the
4		preceding paragraphs or in any amendments thereto hereafter
5		enacted, beginning July 1, 1993, the Department shall each
6		month pay into the Illinois Tax Increment Fund 0.27% of 80% of
7		the net revenue realized for the preceding month from the 6.25%
8		general rate on the selling price of tangible personal
9		property.
10		Subject to payment of amounts into the Build Illinois Fund
11		and the McCormick Place Expansion Project Fund pursuant to the
12		preceding paragraphs or in any amendments thereto hereafter
13		enacted, beginning with the receipt of the first report of
14		taxes paid by an eligible business and continuing for a 25-year
15		period, the Department shall each month pay into the Energy
16		Infrastructure Fund 80% of the net revenue realized from the
17		6.25% general rate on the selling price of Illinois-mined coal
18		that was sold to an eligible business. For purposes of this
19		paragraph, the term "eligible business" means a new electric
20		generating facility certified pursuant to Section 605-332 of
21		the Department of Commerce and Economic Opportunity Law of the
22		Civil Administrative Code of Illinois.
23		Of the remainder of the moneys received by the Department
24		pursuant to this Act, 75% thereof shall be paid into the State
25		Treasury and 25% shall be reserved in a special account and
26		used only for the transfer to the Common School Fund as part of

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1		the monthly transfer from the General Revenue Fund in
2		accordance with Section 8a of the State Finance Act.
3		The Department may, upon separate written notice to a
4		taxpayer, require the taxpayer to prepare and file with the
5		Department on a form prescribed by the Department within not
6		less than 60 days after receipt of the notice an annual
7		information return for the tax year specified in the notice.
8		Such annual return to the Department shall include a statement
9		of gross receipts as shown by the retailer's last Federal
10		income tax return. If the total receipts of the business as
11		reported in the Federal income tax return do not agree with the
12		gross receipts reported to the Department of Revenue for the
13		same period, the retailer shall attach to his annual return a
14		schedule showing a reconciliation of the 2 amounts and the
15		reasons for the difference. The retailer's annual return to the
16		Department shall also disclose the cost of goods sold by the
17		retailer during the year covered by such return, opening and
18		closing inventories of such goods for such year, costs of goods
19		used from stock or taken from stock and given away by the
20		retailer during such year, payroll information of the
21		retailer's business during such year and any additional
22		reasonable information which the Department deems would be
23		helpful in determining the accuracy of the monthly, quarterly
24		or annual returns filed by such retailer as provided for in
25		this Section.
26		If the annual information return required by this Section

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1		is not filed when and as required, the taxpayer shall be liable
2		as follows:
3		(i) Until January 1, 1994, the taxpayer shall be liable
4		for a penalty equal to 1/6 of 1% of the tax due from such
5		taxpayer under this Act during the period to be covered by
6		the annual return for each month or fraction of a month
7		until such return is filed as required, the penalty to be
8		assessed and collected in the same manner as any other
9		penalty provided for in this Act.
10		(ii) On and after January 1, 1994, the taxpayer shall
11		be liable for a penalty as described in Section 3-4 of the
12		Uniform Penalty and Interest Act.
13		The chief executive officer, proprietor, owner or highest
14		ranking manager shall sign the annual return to certify the
15		accuracy of the information contained therein. Any person who
16		willfully signs the annual return containing false or
17		inaccurate information shall be guilty of perjury and punished
18		accordingly. The annual return form prescribed by the
19		Department shall include a warning that the person signing the
20		return may be liable for perjury.
21		The provisions of this Section concerning the filing of an
22		annual information return do not apply to a retailer who is not
23		required to file an income tax return with the United States
24		Government.
25		As soon as possible after the first day of each month, upon
26		certification of the Department of Revenue, the Comptroller

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1		shall order transferred and the Treasurer shall transfer from
2		the General Revenue Fund to the Motor Fuel Tax Fund an amount
3		equal to 1.7% of 80% of the net revenue realized under this Act
4		for the second preceding month. Beginning April 1, 2000, this
5		transfer is no longer required and shall not be made.
6		Net revenue realized for a month shall be the revenue
7		collected by the State pursuant to this Act, less the amount
8		paid out during that month as refunds to taxpayers for
9		overpayment of liability.
10		For greater simplicity of administration, manufacturers,
11		importers and wholesalers whose products are sold at retail in
12		Illinois by numerous retailers, and who wish to do so, may
13		assume the responsibility for accounting and paying to the
14		Department all tax accruing under this Act with respect to such
15		sales, if the retailers who are affected do not make written
16		objection to the Department to this arrangement.
17		Any person who promotes, organizes, provides retail
18		selling space for concessionaires or other types of sellers at
19		the Illinois State Fair, DuQuoin State Fair, county fairs,
20		local fairs, art shows, flea markets and similar exhibitions or
21		events, including any transient merchant as defined by Section
22		2 of the Transient Merchant Act of 1987, is required to file a
23		report with the Department providing the name of the merchant's
24		business, the name of the person or persons engaged in
25		merchant's business, the permanent address and Illinois
26		Retailers Occupation Tax Registration Number of the merchant,

HB3872 Engrossed - 205 - LRB096 09597 HLH 19758 b
1		the dates and location of the event and other reasonable
2		information that the Department may require. The report must be
3		filed not later than the 20th day of the month next following
4		the month during which the event with retail sales was held.
5		Any person who fails to file a report required by this Section
6		commits a business offense and is subject to a fine not to
7		exceed $250.
8		Any person engaged in the business of selling tangible
9		personal property at retail as a concessionaire or other type
10		of seller at the Illinois State Fair, county fairs, art shows,
11		flea markets and similar exhibitions or events, or any
12		transient merchants, as defined by Section 2 of the Transient
13		Merchant Act of 1987, may be required to make a daily report of
14		the amount of such sales to the Department and to make a daily
15		payment of the full amount of tax due. The Department shall
16		impose this requirement when it finds that there is a
17		significant risk of loss of revenue to the State at such an
18		exhibition or event. Such a finding shall be based on evidence
19		that a substantial number of concessionaires or other sellers
20		who are not residents of Illinois will be engaging in the
21		business of selling tangible personal property at retail at the
22		exhibition or event, or other evidence of a significant risk of
23		loss of revenue to the State. The Department shall notify
24		concessionaires and other sellers affected by the imposition of
25		this requirement. In the absence of notification by the
26		Department, the concessionaires and other sellers shall file

HB3872 Engrossed - 206 - LRB096 09597 HLH 19758 b
1		their returns as otherwise required in this Section.
2		(Source: P.A. 94-1074, eff. 12-26-06; 95-331, eff. 8-21-07.)
3		(35 ILCS 120/13) (from Ch. 120, par. 452)
4		Sec. 13. When the amount due is under $300, any person
5		engaged in the business of selling tangible personal property
6		at retail in this State who fails to file a return, or who
7		files a fraudulent return, or any officer, employee or agent of
8		a corporation, member, employee or agent of a partnership, or
9		manager, member, agent, or employee of a limited liability
10		company engaged in the business of selling tangible personal
11		property at retail in this State who, as such officer,
12		employee, agent, manager, or member is under a duty to file a
13		return, or any officer, agent or employee of a corporation,
14		member, agent, or employee of a partnership, or manager,
15		member, agent, or employee of a limited liability company
16		engaged in the business of selling tangible personal property
17		at retail in this State who files or causes to be filed or
18		signs or causes to be signed a fraudulent return filed on
19		behalf of such corporation or limited liability company, or any
20		accountant or other agent who knowingly enters false
21		information on the return of any taxpayer under this Act, is
22		guilty of a Class 4 felony.
23		Any person who or any officer or director of any
24		corporation, partner or member of any partnership, or manager
25		or member of a limited liability company that: (a) violates

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1		Section 2a of this Act or (b) fails to keep books and records,
2		or fails to produce books and records as required by Section 7
3		or (c) willfully violates a rule or regulation of the
4		Department for the administration and enforcement of this Act
5		is guilty of a Class A misdemeanor. Any person, manager or
6		member of a limited liability company, or officer or director
7		of any corporation who engages in the business of selling
8		tangible personal property at retail after the certificate of
9		registration of that person, corporation, limited liability
10		company, or partnership has been revoked is guilty of a Class A
11		misdemeanor. Each day such person, corporation, or partnership
12		is engaged in business without a certificate of registration or
13		after the certificate of registration of that person,
14		corporation, or partnership has been revoked constitutes a
15		separate offense.
16		Any purchaser who obtains a registration number or resale
17		number from the Department through misrepresentation, or who
18		represents to a seller that such purchaser has a registration
19		number or a resale number from the Department when he knows
20		that he does not, or who uses his registration number or resale
21		number to make a seller believe that he is buying tangible
22		personal property for resale when such purchaser in fact knows
23		that this is not the case is guilty of a Class 4 felony.
24		Any distributor, supplier or other reseller of motor fuel
25		registered pursuant to Section 2a or 2c of this Act who fails
26		to collect the prepaid tax on invoiced gallons of motor fuel

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1		sold or who fails to deliver a statement of tax paid to the
2		purchaser or to the Department as required by Sections 2d and
3		2e of this Act, respectively, shall be guilty of a Class A
4		misdemeanor if the amount due is under $300, and a Class 4
5		felony if the amount due is $300 or more.
6		When the amount due is under $300, any person who accepts
7		money that is due to the Department under this Act from a
8		taxpayer for the purpose of acting as the taxpayer's agent to
9		make the payment to the Department, but who fails to remit such
10		payment to the Department when due is guilty of a Class 4
11		felony.
12		Any seller who collects or attempts to collect an amount
13		(however designated) which purports to reimburse such seller
14		for retailers' occupation tax liability measured by receipts
15		which such seller knows are not subject to retailers'
16		occupation tax, or any seller who knowingly over-collects or
17		attempts to over-collect an amount purporting to reimburse such
18		seller for retailers' occupation tax liability in a transaction
19		which is subject to the tax that is imposed by this Act, shall
20		be guilty of a Class 4 felony for each such offense. This
21		paragraph does not apply to an amount collected by the seller
22		as reimbursement for the seller's retailers' occupation tax
23		liability on receipts which are subject to tax under this Act
24		as long as such collection is made in compliance with the tax
25		collection brackets prescribed by the Department in its Rules
26		and Regulations.

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1		When the amount due is $300 or more, any person engaged in
2		the business of selling tangible personal property at retail in
3		this State who fails to file a return, or who files a
4		fraudulent return, or any officer, employee or agent of a
5		corporation, member, employee or agent of a partnership, or
6		manager, member, agent, or employee of a limited liability
7		company engaged in the business of selling tangible personal
8		property at retail in this State who, as such officer,
9		employee, agent, manager, or member is under a duty to file a
10		return and who fails to file such return or any officer, agent,
11		or employee of a corporation, member, agent or employee of a
12		partnership, or manager, member, agent, or employee of a
13		limited liability company engaged in the business of selling
14		tangible personal property at retail in this State who files or
15		causes to be filed or signs or causes to be signed a fraudulent
16		return filed on behalf of such corporation or limited liability
17		company, or any accountant or other agent who knowingly enters
18		false information on the return of any taxpayer under this Act
19		is guilty of a Class 3 felony.
20		When the amount due is $300 or more, any person engaged in
21		the business of selling tangible personal property at retail in
22		this State who accepts money that is due to the Department
23		under this Act from a taxpayer for the purpose of acting as the
24		taxpayer's agent to make payment to the Department but fails to
25		remit such payment to the Department when due, is guilty of a
26		Class 3 felony.

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1		Any person whose principal place of business is in this
2		State and who is charged with a violation under this Section
3		shall be tried in the county where his principal place of
4		business is located unless he asserts a right to be tried in
5		another venue.
6		Any taxpayer or agent of a taxpayer who with the intent to
7		defraud purports to make a payment due to the Department by
8		issuing or delivering a check or other order upon a real or
9		fictitious depository for the payment of money, knowing that it
10		will not be paid by the depository, shall be guilty of a
11		deceptive practice in violation of Section 17-1 of the Criminal
12		Code of 1961, as amended.
13		A prosecution for any act in violation of this Section may
14		be commenced at any time within 6 3 years of the commission of
15		that act.
16		(Source: P.A. 87-879; 88-480.)
17		Section 45. The Uniform Penalty and Interest Act is amended
18		by changing Section 3-3 as follows:
19		(35 ILCS 735/3-3) (from Ch. 120, par. 2603-3)
20		Sec. 3-3. Penalty for failure to file or pay.
21		(a) This subsection (a) is applicable before January 1,
22		1996. A penalty of 5% of the tax required to be shown due on a
23		return shall be imposed for failure to file the tax return on
24		or before the due date prescribed for filing determined with

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1		regard for any extension of time for filing (penalty for late
2		filing or nonfiling). If any unprocessable return is corrected
3		and filed within 21 days after notice by the Department, the
4		late filing or nonfiling penalty shall not apply. If a penalty
5		for late filing or nonfiling is imposed in addition to a
6		penalty for late payment, the total penalty due shall be the
7		sum of the late filing penalty and the applicable late payment
8		penalty. Beginning on the effective date of this amendatory Act
9		of 1995, in the case of any type of tax return required to be
10		filed more frequently than annually, when the failure to file
11		the tax return on or before the date prescribed for filing
12		(including any extensions) is shown to be nonfraudulent and has
13		not occurred in the 2 years immediately preceding the failure
14		to file on the prescribed due date, the penalty imposed by
15		Section 3-3(a) shall be abated.
16		(a-5) This subsection (a-5) is applicable to returns due on
17		and after January 1, 1996 and on or before December 31, 2000. A
18		penalty equal to 2% of the tax required to be shown due on a
19		return, up to a maximum amount of $250, determined without
20		regard to any part of the tax that is paid on time or by any
21		credit that was properly allowable on the date the return was
22		required to be filed, shall be imposed for failure to file the
23		tax return on or before the due date prescribed for filing
24		determined with regard for any extension of time for filing.
25		However, if any return is not filed within 30 days after notice
26		of nonfiling mailed by the Department to the last known address

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1		of the taxpayer contained in Department records, an additional
2		penalty amount shall be imposed equal to the greater of $250 or
3		2% of the tax shown on the return. However, the additional
4		penalty amount may not exceed $5,000 and is determined without
5		regard to any part of the tax that is paid on time or by any
6		credit that was properly allowable on the date the return was
7		required to be filed (penalty for late filing or nonfiling). If
8		any unprocessable return is corrected and filed within 30 days
9		after notice by the Department, the late filing or nonfiling
10		penalty shall not apply. If a penalty for late filing or
11		nonfiling is imposed in addition to a penalty for late payment,
12		the total penalty due shall be the sum of the late filing
13		penalty and the applicable late payment penalty. In the case of
14		any type of tax return required to be filed more frequently
15		than annually, when the failure to file the tax return on or
16		before the date prescribed for filing (including any
17		extensions) is shown to be nonfraudulent and has not occurred
18		in the 2 years immediately preceding the failure to file on the
19		prescribed due date, the penalty imposed by Section 3-3(a-5)
20		shall be abated.
21		(a-10) This subsection (a-10) is applicable to returns due
22		on and after January 1, 2001. A penalty equal to 2% of the tax
23		required to be shown due on a return, up to a maximum amount of
24		$250, reduced by any tax that is paid on time or by any credit
25		that was properly allowable on the date the return was required
26		to be filed, shall be imposed for failure to file the tax

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1		return on or before the due date prescribed for filing
2		determined with regard for any extension of time for filing.
3		However, if any return is not filed within 30 days after notice
4		of nonfiling mailed by the Department to the last known address
5		of the taxpayer contained in Department records, an additional
6		penalty amount shall be imposed equal to the greater of $250 or
7		2% of the tax shown on the return. However, the additional
8		penalty amount may not exceed $5,000 and is determined without
9		regard to any part of the tax that is paid on time or by any
10		credit that was properly allowable on the date the return was
11		required to be filed (penalty for late filing or nonfiling). If
12		any unprocessable return is corrected and filed within 30 days
13		after notice by the Department, the late filing or nonfiling
14		penalty shall not apply. If a penalty for late filing or
15		nonfiling is imposed in addition to a penalty for late payment,
16		the total penalty due shall be the sum of the late filing
17		penalty and the applicable late payment penalty. In the case of
18		any type of tax return required to be filed more frequently
19		than annually, when the failure to file the tax return on or
20		before the date prescribed for filing (including any
21		extensions) is shown to be nonfraudulent and has not occurred
22		in the 2 years immediately preceding the failure to file on the
23		prescribed due date, the penalty imposed by Section 3-3(a-10)
24		shall be abated.
25		(a-15) In addition to any other penalties imposed by law
26		for the failure to file a return, a penalty of $100 shall be

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1		imposed for failure to file a transaction reporting return
2		required by Section 3 of the Retailers' Occupation Tax Act and
3		Section 9 of the Use Tax Act on or before the date a return is
4		required to be filed. This penalty shall be imposed regardless
5		of whether the return when properly prepared and filed would
6		result in the imposition of a tax.
7		(b) This subsection is applicable before January 1, 1998. A
8		penalty of 15% of the tax shown on the return or the tax
9		required to be shown due on the return shall be imposed for
10		failure to pay:
11		(1) the tax shown due on the return on or before the
12		due date prescribed for payment of that tax, an amount of
13		underpayment of estimated tax, or an amount that is
14		reported in an amended return other than an amended return
15		timely filed as required by subsection (b) of Section 506
16		of the Illinois Income Tax Act (penalty for late payment or
17		nonpayment of admitted liability); or
18		(2) the full amount of any tax required to be shown due
19		on a return and which is not shown (penalty for late
20		payment or nonpayment of additional liability), within 30
21		days after a notice of arithmetic error, notice and demand,
22		or a final assessment is issued by the Department. In the
23		case of a final assessment arising following a protest and
24		hearing, the 30-day period shall not begin until all
25		proceedings in court for review of the final assessment
26		have terminated or the period for obtaining a review has

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1		expired without proceedings for a review having been
2		instituted. In the case of a notice of tax liability that
3		becomes a final assessment without a protest and hearing,
4		the penalty provided in this paragraph (2) shall be imposed
5		at the expiration of the period provided for the filing of
6		a protest.
7		(b-5) This subsection is applicable to returns due on and
8		after January 1, 1998 and on or before December 31, 2000. A
9		penalty of 20% of the tax shown on the return or the tax
10		required to be shown due on the return shall be imposed for
11		failure to pay:
12		(1) the tax shown due on the return on or before the
13		due date prescribed for payment of that tax, an amount of
14		underpayment of estimated tax, or an amount that is
15		reported in an amended return other than an amended return
16		timely filed as required by subsection (b) of Section 506
17		of the Illinois Income Tax Act (penalty for late payment or
18		nonpayment of admitted liability); or
19		(2) the full amount of any tax required to be shown due
20		on a return and which is not shown (penalty for late
21		payment or nonpayment of additional liability), within 30
22		days after a notice of arithmetic error, notice and demand,
23		or a final assessment is issued by the Department. In the
24		case of a final assessment arising following a protest and
25		hearing, the 30-day period shall not begin until all
26		proceedings in court for review of the final assessment

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1		have terminated or the period for obtaining a review has
2		expired without proceedings for a review having been
3		instituted. In the case of a notice of tax liability that
4		becomes a final assessment without a protest and hearing,
5		the penalty provided in this paragraph (2) shall be imposed
6		at the expiration of the period provided for the filing of
7		a protest.
8		(b-10) This subsection (b-10) is applicable to returns due
9		on and after January 1, 2001 and on or before December 31,
10		2003. A penalty shall be imposed for failure to pay:
11		(1) the tax shown due on a return on or before the due
12		date prescribed for payment of that tax, an amount of
13		underpayment of estimated tax, or an amount that is
14		reported in an amended return other than an amended return
15		timely filed as required by subsection (b) of Section 506
16		of the Illinois Income Tax Act (penalty for late payment or
17		nonpayment of admitted liability). The amount of penalty
18		imposed under this subsection (b-10)(1) shall be 2% of any
19		amount that is paid no later than 30 days after the due
20		date, 5% of any amount that is paid later than 30 days
21		after the due date and not later than 90 days after the due
22		date, 10% of any amount that is paid later than 90 days
23		after the due date and not later than 180 days after the
24		due date, and 15% of any amount that is paid later than 180
25		days after the due date. If notice and demand is made for
26		the payment of any amount of tax due and if the amount due

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1		is paid within 30 days after the date of the notice and
2		demand, then the penalty for late payment or nonpayment of
3		admitted liability under this subsection (b-10)(1) on the
4		amount so paid shall not accrue for the period after the
5		date of the notice and demand.
6		(2) the full amount of any tax required to be shown due
7		on a return and that is not shown (penalty for late payment
8		or nonpayment of additional liability), within 30 days
9		after a notice of arithmetic error, notice and demand, or a
10		final assessment is issued by the Department. In the case
11		of a final assessment arising following a protest and
12		hearing, the 30-day period shall not begin until all
13		proceedings in court for review of the final assessment
14		have terminated or the period for obtaining a review has
15		expired without proceedings for a review having been
16		instituted. The amount of penalty imposed under this
17		subsection (b-10)(2) shall be 20% of any amount that is not
18		paid within the 30-day period. In the case of a notice of
19		tax liability that becomes a final assessment without a
20		protest and hearing, the penalty provided in this
21		subsection (b-10)(2) shall be imposed at the expiration of
22		the period provided for the filing of a protest.
23		(b-15) This subsection (b-15) is applicable to returns due
24		on and after January 1, 2004 and on or before December 31,
25		2004. A penalty shall be imposed for failure to pay the tax
26		shown due or required to be shown due on a return on or before

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1		the due date prescribed for payment of that tax, an amount of
2		underpayment of estimated tax, or an amount that is reported in
3		an amended return other than an amended return timely filed as
4		required by subsection (b) of Section 506 of the Illinois
5		Income Tax Act (penalty for late payment or nonpayment of
6		admitted liability). The amount of penalty imposed under this
7		subsection (b-15)(1) shall be 2% of any amount that is paid no
8		later than 30 days after the due date, 10% of any amount that
9		is paid later than 30 days after the due date and not later
10		than 90 days after the due date, 15% of any amount that is paid
11		later than 90 days after the due date and not later than 180
12		days after the due date, and 20% of any amount that is paid
13		later than 180 days after the due date. If notice and demand is
14		made for the payment of any amount of tax due and if the amount
15		due is paid within 30 days after the date of this notice and
16		demand, then the penalty for late payment or nonpayment of
17		admitted liability under this subsection (b-15)(1) on the
18		amount so paid shall not accrue for the period after the date
19		of the notice and demand.
20		(b-20) This subsection (b-20) is applicable to returns due
21		on and after January 1, 2005.
22		(1) A penalty shall be imposed for failure to pay,
23		prior to the due date for payment, any amount of tax the
24		payment of which is required to be made prior to the filing
25		of a return or without a return (penalty for late payment
26		or nonpayment of estimated or accelerated tax). The amount

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1		of penalty imposed under this paragraph (1) shall be 2% of
2		any amount that is paid no later than 30 days after the due
3		date and 10% of any amount that is paid later than 30 days
4		after the due date.
5		(2) A penalty shall be imposed for failure to pay the
6		tax shown due or required to be shown due on a return on or
7		before the due date prescribed for payment of that tax or
8		an amount that is reported in an amended return other than
9		an amended return timely filed as required by subsection
10		(b) of Section 506 of the Illinois Income Tax Act (penalty
11		for late payment or nonpayment of tax). The amount of
12		penalty imposed under this paragraph (2) shall be 2% of any
13		amount that is paid no later than 30 days after the due
14		date, 10% of any amount that is paid later than 30 days
15		after the due date and prior to the date the Department has
16		initiated an audit or investigation of the taxpayer, and
17		20% of any amount that is paid after the date the
18		Department has initiated an audit or investigation of the
19		taxpayer; provided that the penalty shall be reduced to 15%
20		if the entire amount due is paid not later than 30 days
21		after the Department has provided the taxpayer with an
22		amended return (following completion of an occupation,
23		use, or excise tax audit) or a form for waiver of
24		restrictions on assessment (following completion of an
25		income tax audit); provided further that the reduction to
26		15% shall be rescinded if the taxpayer makes any claim for

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1		refund or credit of the tax, penalties, or interest
2		determined to be due upon audit, except in the case of a
3		claim filed pursuant to subsection (b) of Section 506 of
4		the Illinois Income Tax Act or to claim a carryover of a
5		loss or credit, the availability of which was not
6		determined in the audit. For purposes of this paragraph
7		(2), any overpayment reported on an original return that
8		has been allowed as a refund or credit to the taxpayer
9		shall be deemed to have not been paid on or before the due
10		date for payment and any amount paid under protest pursuant
11		to the provisions of the State Officers and Employees Money
12		Disposition Act shall be deemed to have been paid after the
13		Department has initiated an audit and more than 30 days
14		after the Department has provided the taxpayer with an
15		amended return (following completion of an occupation,
16		use, or excise tax audit) or a form for waiver of
17		restrictions on assessment (following completion of an
18		income tax audit).
19		(3) The penalty imposed under this subsection (b-20)
20		shall be deemed assessed at the time the tax upon which the
21		penalty is computed is assessed, except that, if the
22		reduction of the penalty imposed under paragraph (2) of
23		this subsection (b-20) to 15% is rescinded because a claim
24		for refund or credit has been filed, the increase in
25		penalty shall be deemed assessed at the time the claim for
26		refund or credit is filed.

HB3872 Engrossed - 221 - LRB096 09597 HLH 19758 b
1		(c) For purposes of the late payment penalties, the basis
2		of the penalty shall be the tax shown or required to be shown
3		on a return, whichever is applicable, reduced by any part of
4		the tax which is paid on time and by any credit which was
5		properly allowable on the date the return was required to be
6		filed.
7		(d) A penalty shall be applied to the tax required to be
8		shown even if that amount is less than the tax shown on the
9		return.
10		(e) This subsection (e) is applicable to returns due before
11		January 1, 2001. If both a subsection (b)(1) or (b-5)(1)
12		penalty and a subsection (b)(2) or (b-5)(2) penalty are
13		assessed against the same return, the subsection (b)(2) or
14		(b-5)(2) penalty shall be assessed against only the additional
15		tax found to be due.
16		(e-5) This subsection (e-5) is applicable to returns due on
17		and after January 1, 2001. If both a subsection (b-10)(1)
18		penalty and a subsection (b-10)(2) penalty are assessed against
19		the same return, the subsection (b-10)(2) penalty shall be
20		assessed against only the additional tax found to be due.
21		(f) If the taxpayer has failed to file the return, the
22		Department shall determine the correct tax according to its
23		best judgment and information, which amount shall be prima
24		facie evidence of the correctness of the tax due.
25		(g) The time within which to file a return or pay an amount
26		of tax due without imposition of a penalty does not extend the

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1		time within which to file a protest to a notice of tax
2		liability or a notice of deficiency.
3		(h) No return shall be determined to be unprocessable
4		because of the omission of any information requested on the
5		return pursuant to Section 2505-575 of the Department of
6		Revenue Law (20 ILCS 2505/2505-575).
7		(i) If a taxpayer has a tax liability that is eligible for
8		amnesty under the Tax Delinquency Amnesty Act and the taxpayer
9		fails to satisfy the tax liability during the amnesty period
10		provided for in that Act, then the penalty imposed by the
11		Department under this Section shall be imposed in an amount
12		that is 200% of the amount that would otherwise be imposed
13		under this Section.
14		(Source: P.A. 92-742, eff. 7-25-02; 93-26, eff. 6-20-03; 93-32,
15		eff. 6-20-03; 93-1068, eff. 1-15-05.)
16		Section 50. The Criminal Code of 1961 is amended by
17		changing Section 28-2 as follows:
18		(720 ILCS 5/28-2) (from Ch. 38, par. 28-2)
19		Sec. 28-2. Definitions.
20		(a) A "gambling device" is any clock, tape machine, slot
21		machine or other machines or device for the reception of money
22		or other thing of value on chance or skill or upon the action
23		of which money or other thing of value is staked, hazarded,
24		bet, won or lost; or any mechanism, furniture, fixture,

HB3872 Engrossed - 223 - LRB096 09597 HLH 19758 b
1		equipment or other device designed primarily for use in a
2		gambling place. A "gambling device" does not include:
3		(1) A coin-in-the-slot operated mechanical device
4		played for amusement which rewards the player with the
5		right to replay such mechanical device, which device is so
6		constructed or devised as to make such result of the
7		operation thereof depend in part upon the skill of the
8		player and which returns to the player thereof no money,
9		property or right to receive money or property.
10		(2) Vending machines by which full and adequate return
11		is made for the money invested and in which there is no
12		element of chance or hazard.
13		(3) A crane game. For the purposes of this paragraph
14		(3), a "crane game" is an amusement device involving skill,
15		if it rewards the player exclusively with merchandise
16		contained within the amusement device proper and limited to
17		toys, novelties and prizes other than currency, each having
18		a wholesale value which is not more than $25.
19		(4) A redemption machine. For the purposes of this
20		paragraph (4), a "redemption machine" is (1) a
21		single-player or multi-player amusement device involving a
22		game, the object of which is throwing, rolling, bowling,
23		shooting, placing, or propelling a ball or other object
24		into, upon, or against a hole or other target or (2) a
25		device of any kind or character used by the public that is
26		designed and manufactured for bonafide amusement or

HB3872 Engrossed - 224 - LRB096 09597 HLH 19758 b
1		entertainment purposes, the operation of which requires
2		the payment of or the insertion of coins, bills, other
3		money, tokens, tickets, chips, debit cards, or similar
4		objects, provided that all of the following conditions are
5		met:
6		(A) The device awards the player only with the
7		right to replay the device or with awards, tokens, or
8		tickets redeemable for noncash merchandise. For the
9		purpose of this item (A), "merchandise" does not
10		include cash or alcoholic beverages. The outcome of the
11		game is predominantly determined by the skill of the
12		player.
13		(B) The award of the prize is based solely upon the
14		player's achieving the object of the game or otherwise
15		upon the player's score.
16		(C) Only merchandise prizes are awarded.
17		(B) (D) The wholesale value of prizes awarded in
18		lieu of tickets or tokens for single play of the device
19		does not exceed $25.
20		(C) (E) The redemption value of each ticket, token,
21		or other representation tickets, tokens, and other
22		representations of value, which may be accumulated by
23		players to redeem prizes of greater value, does not
24		exceed the amount charged for a single play of the
25		device. However, if multiple tickets, tokens, and
26		other representations of value are awarded for a single

HB3872 Engrossed - 225 - LRB096 09597 HLH 19758 b
1		play of the device, the total value of all tickets,
2		tokens, and other representations of value awarded may
3		not exceed the amount charged for a single play of the
4		device.
5		This paragraph (4) does not apply to any game or device
6		classified by the United States government as requiring a
7		federal gaming tax stamp under applicable provisions of the
8		Internal Revenue Code.
9		(a-5) "Internet" means an interactive computer service or
10		system or an information service, system, or access software
11		provider that provides or enables computer access by multiple
12		users to a computer server, and includes, but is not limited
13		to, an information service, system, or access software provider
14		that provides access to a network system commonly known as the
15		Internet, or any comparable system or service and also
16		includes, but is not limited to, a World Wide Web page,
17		newsgroup, message board, mailing list, or chat area on any
18		interactive computer service or system or other online service.
19		(a-6) "Access" and "computer" have the meanings ascribed to
20		them in Section 16D-2 of this Code.
21		(b) A "lottery" is any scheme or procedure whereby one or
22		more prizes are distributed by chance among persons who have
23		paid or promised consideration for a chance to win such prizes,
24		whether such scheme or procedure is called a lottery, raffle,
25		gift, sale or some other name.
26		(c) A "policy game" is any scheme or procedure whereby a

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1		person promises or guarantees by any instrument, bill,
2		certificate, writing, token or other device that any particular
3		number, character, ticket or certificate shall in the event of
4		any contingency in the nature of a lottery entitle the
5		purchaser or holder to receive money, property or evidence of
6		debt.
7		(Source: P.A. 95-676, eff. 6-1-08.)
8		Section 99. Effective date. This Act takes effect upon
9		becoming law.
HB3872 Engrossed - 227 - LRB096 09597 HLH 19758 b 1 INDEX 2 Statutes amended in order of appearance 3 20 ILCS 2505/2505-310 was 20 ILCS 2505/39b15.2 4 20 ILCS 2520/4 from Ch. 120, par. 2304 5 35 ILCS 5/203 from Ch. 120, par. 2-203 6 35 ILCS 5/905 from Ch. 120, par. 9-905 7 35 ILCS 5/911 from Ch. 120, par. 9-911 8 35 ILCS 105/9 from Ch. 120, par. 439.9 9 35 ILCS 105/14 from Ch. 120, par. 439.14 10 35 ILCS 110/9 from Ch. 120, par. 439.39 11 35 ILCS 110/15 from Ch. 120, par. 439.45 12 35 ILCS 115/9 from Ch. 120, par. 439.109 13 35 ILCS 115/15 from Ch. 120, par. 439.115 14 35 ILCS 120/3 from Ch. 120, par. 442 15 35 ILCS 120/13 from Ch. 120, par. 452 16 35 ILCS 510/1 from Ch. 120, par. 481b.1 17 35 ILCS 510/8 from Ch. 120, par. 481b.8 18 35 ILCS 510/14 from Ch. 120, par. 481b.14 19 35 ILCS 510/15 from Ch. 120, par. 481b.15 20 35 ILCS 735/3-3 from Ch. 120, par. 2603-3 21 720 ILCS 5/28-2