Bill Text: IL SB1627 | 2023-2024 | 103rd General Assembly | Introduced
Bill Title: Amends the Illinois Estate and Generation-Skipping Transfer Tax Act. Provides that, for persons dying on or after January 1, 2024, the person's adjusted taxable estate shall not include the value of the decedent's ownership interest in qualified farm property. Provides that certain donations must be made to food banks for property to be considered qualified farm property. Effective immediately.
Spectrum: Bipartisan Bill
Status: (Introduced) 2024-02-01 - Added as Co-Sponsor Sen. Sally J. Turner [SB1627 Detail]
Download: Illinois-2023-SB1627-Introduced.html
| ||||||||||||||||||||
| ||||||||||||||||||||
| ||||||||||||||||||||
| ||||||||||||||||||||
| ||||||||||||||||||||
1 | AN ACT concerning State government.
| |||||||||||||||||||
2 | Be it enacted by the People of the State of Illinois,
| |||||||||||||||||||
3 | represented in the General Assembly:
| |||||||||||||||||||
4 | Section 5. The Illinois Estate and Generation-Skipping | |||||||||||||||||||
5 | Transfer Tax Act is amended by changing Section 2 as follows:
| |||||||||||||||||||
6 | (35 ILCS 405/2) (from Ch. 120, par. 405A-2)
| |||||||||||||||||||
7 | Sec. 2. Definitions.
| |||||||||||||||||||
8 | "Farm property" means real property used primarily for | |||||||||||||||||||
9 | raising or harvesting agricultural or horticultural | |||||||||||||||||||
10 | commodities for commercial sale. | |||||||||||||||||||
11 | "Federal estate tax" means the tax due to the United | |||||||||||||||||||
12 | States with respect
to a taxable transfer under Chapter 11 of | |||||||||||||||||||
13 | the Internal Revenue Code.
| |||||||||||||||||||
14 | "Federal generation-skipping transfer tax" means the tax | |||||||||||||||||||
15 | due to the
United States with respect to a taxable transfer | |||||||||||||||||||
16 | under Chapter 13 of the
Internal Revenue Code.
| |||||||||||||||||||
17 | "Federal return" means the federal estate tax return with | |||||||||||||||||||
18 | respect to the
federal estate tax and means the federal | |||||||||||||||||||
19 | generation-skipping transfer tax
return
with respect to the | |||||||||||||||||||
20 | federal generation-skipping transfer tax.
| |||||||||||||||||||
21 | "Federal transfer tax" means the federal estate tax or the | |||||||||||||||||||
22 | federal
generation-skipping transfer tax.
| |||||||||||||||||||
23 | "Food bank" means a food bank in Illinois that received |
| |||||||
| |||||||
1 | funding from The Emergency Food Assistance Program (TEFAP) in | ||||||
2 | the year in which it received the qualified donation. | ||||||
3 | "Illinois estate tax" means the tax due to this State with | ||||||
4 | respect to a
taxable transfer.
| ||||||
5 | "Illinois generation-skipping transfer tax" means the tax | ||||||
6 | due to this State
with respect to a taxable transfer that gives | ||||||
7 | rise to a federal
generation-skipping transfer tax.
| ||||||
8 | "Illinois transfer tax" means the Illinois estate tax or | ||||||
9 | the Illinois
generation-skipping transfer tax.
| ||||||
10 | "Internal Revenue Code" means, unless otherwise provided, | ||||||
11 | the Internal
Revenue Code of 1986, as
amended from time to | ||||||
12 | time.
| ||||||
13 | "Non-resident trust" means a trust that is not a resident | ||||||
14 | of this State
for purposes of the Illinois Income Tax Act, as | ||||||
15 | amended from time to time.
| ||||||
16 | "Person" means and includes any individual, trust, estate, | ||||||
17 | partnership,
association, company or corporation.
| ||||||
18 | "Qualified heir" means a qualified heir as defined in | ||||||
19 | Section 2032A(e)(1)
of the Internal Revenue Code.
| ||||||
20 | "Qualified donation" means a donation to a food bank of an | ||||||
21 | agricultural or horticultural commodity that is suitable for | ||||||
22 | human consumption and is produced on qualified farm property, | ||||||
23 | a cash equivalent donation to a food bank, or some combination | ||||||
24 | of those types of donations. | ||||||
25 | "Qualified farm property" means farm property: | ||||||
26 | (1) that the decedent had an ownership interest in at |
| |||||||
| |||||||
1 | the time of the decedent's death and for at least 5 years | ||||||
2 | before the decedent's death; and | ||||||
3 | (2) from which the decedent made qualified donations | ||||||
4 | in at least 5 separate calendar years before the | ||||||
5 | decedent's death totaling at least 1% of the farm property | ||||||
6 | yield for the calendar year in which the donation was | ||||||
7 | made, as determined by the federally reported Farm Service | ||||||
8 | Agency acreage. | ||||||
9 | "Resident trust" means a trust that is a resident of this | ||||||
10 | State for
purposes of the Illinois Income Tax Act, as amended | ||||||
11 | from time to time.
| ||||||
12 | "State" means any state, territory or possession of the | ||||||
13 | United States and
the District of Columbia.
| ||||||
14 | "State tax credit" means:
| ||||||
15 | (a) For persons dying on or after January 1, 2003 and
| ||||||
16 | through December 31, 2005, an amount
equal
to the full credit | ||||||
17 | calculable under Section 2011 or Section 2604 of the
Internal | ||||||
18 | Revenue
Code as the credit would have been computed and | ||||||
19 | allowed under the Internal
Revenue
Code as in effect on | ||||||
20 | December 31, 2001, without the reduction in the State
Death | ||||||
21 | Tax
Credit as provided in Section 2011(b)(2) or the | ||||||
22 | termination of the State Death
Tax Credit
as provided in | ||||||
23 | Section 2011(f) as enacted by the Economic Growth and Tax | ||||||
24 | Relief
Reconciliation Act of 2001, but recognizing the | ||||||
25 | increased applicable exclusion
amount
through December 31, | ||||||
26 | 2005.
|
| |||||||
| |||||||
1 | (b) For persons dying after December 31, 2005 and on or | ||||||
2 | before December 31,
2009, and for persons dying after December | ||||||
3 | 31, 2010, an amount equal to the full
credit
calculable under | ||||||
4 | Section 2011 or 2604 of the Internal Revenue Code as the
credit | ||||||
5 | would
have been computed and allowed under the Internal | ||||||
6 | Revenue Code as in effect on
December 31, 2001, without the | ||||||
7 | reduction in the State Death Tax Credit as
provided in
Section | ||||||
8 | 2011(b)(2) or the termination of the State Death Tax Credit as | ||||||
9 | provided
in
Section 2011(f) as enacted by the Economic Growth | ||||||
10 | and Tax Relief Reconciliation
Act of
2001, but recognizing the | ||||||
11 | exclusion amount of only (i) $2,000,000 for persons dying | ||||||
12 | prior to January 1, 2012, (ii) $3,500,000 for persons dying on | ||||||
13 | or after January 1, 2012 and prior to January 1, 2013, and | ||||||
14 | (iii) $4,000,000 for persons dying on or after January 1, | ||||||
15 | 2013, and with reduction to the adjusted taxable estate for | ||||||
16 | any qualified terminable interest property election as defined | ||||||
17 | in subsection (b-1) of this Section. For persons dying on or | ||||||
18 | after January 1, 2024, for the purposes of computing the State | ||||||
19 | tax credit, the person's adjusted taxable estate shall not | ||||||
20 | include the value of the person's ownership interest in | ||||||
21 | qualified farm property.
| ||||||
22 | (b-1) The person required to file the Illinois return may | ||||||
23 | elect on a timely filed Illinois return a marital deduction | ||||||
24 | for qualified terminable interest property under Section | ||||||
25 | 2056(b)(7) of the Internal Revenue Code for purposes of the | ||||||
26 | Illinois estate tax that is separate and independent of any |
| |||||||
| |||||||
1 | qualified terminable interest property election for federal | ||||||
2 | estate tax purposes. For purposes of the Illinois estate tax, | ||||||
3 | the inclusion of property in the gross estate of a surviving | ||||||
4 | spouse is the same as under Section 2044 of the Internal | ||||||
5 | Revenue Code. | ||||||
6 | In the case of any trust for which a State or federal | ||||||
7 | qualified terminable interest property election is made, the | ||||||
8 | trustee may not retain non-income producing assets for more | ||||||
9 | than a reasonable amount of time without the consent of the | ||||||
10 | surviving spouse.
| ||||||
11 | "Taxable transfer" means an event that gives rise to a | ||||||
12 | state tax credit,
including any credit as a result of the | ||||||
13 | imposition of an
additional tax under Section 2032A(c) of the | ||||||
14 | Internal Revenue Code.
| ||||||
15 | "Transferee" means a transferee within the meaning of | ||||||
16 | Section 2603(a)(1)
and Section 6901(h) of the Internal Revenue | ||||||
17 | Code.
| ||||||
18 | "Transferred property" means:
| ||||||
19 | (1) With respect to a taxable transfer occurring at | ||||||
20 | the death of an
individual, the
deceased individual's | ||||||
21 | gross estate as defined in Section 2031 of the
Internal | ||||||
22 | Revenue Code.
| ||||||
23 | (2) With respect to a taxable transfer occurring as a | ||||||
24 | result of a
taxable termination as defined in Section | ||||||
25 | 2612(a) of the Internal Revenue Code,
the taxable amount | ||||||
26 | determined under Section 2622(a) of the Internal Revenue
|
| |||||||
| |||||||
1 | Code.
| ||||||
2 | (3) With respect to a taxable transfer occurring as a | ||||||
3 | result of a
taxable distribution as defined in Section | ||||||
4 | 2612(b) of the Internal Revenue Code,
the taxable amount | ||||||
5 | determined under Section 2621(a) of the Internal Revenue
| ||||||
6 | Code.
| ||||||
7 | (4) With respect to an event which causes the | ||||||
8 | imposition of an
additional estate tax under Section | ||||||
9 | 2032A(c) of the Internal Revenue Code,
the
qualified real | ||||||
10 | property that was disposed of or which ceased to be used | ||||||
11 | for
the qualified use, within the meaning of Section | ||||||
12 | 2032A(c)(1) of the Internal
Revenue Code.
| ||||||
13 | "Trust" includes a trust as defined in Section 2652(b)(1) | ||||||
14 | of the Internal
Revenue Code.
| ||||||
15 | (Source: P.A. 96-789, eff. 9-8-09; 96-1496, eff. 1-13-11; | ||||||
16 | 97-636, eff. 6-1-12 .)
| ||||||
17 | Section 99. Effective date. This Act takes effect upon | ||||||
18 | becoming law.
|