Bill Text: IL SB3152 | 2023-2024 | 103rd General Assembly | Introduced
Bill Title: Amends the Illinois Income Tax Act. Creates an income tax deduction for an amount of up to $50,000 per tax year contributed to a small business asset purchase account and all interest earned on such accounts during the tax year. Provides that a "small business asset purchase account" means an account established by a taxpayer, the proceeds of which are used to purchase property used primarily in Illinois for which a federal income tax deduction is claimed under Section 179 of the Internal Revenue Code. Provides an addition modification for amounts withdrawn from a small business asset purchase account that are not used for qualified purchases. Amends the Uniform Penalty and Interest Act to establish a penalty for improper use of moneys in a small business asset purchase account. Effective immediately.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced) 2024-05-03 - Senate Committee Amendment No. 1 Rule 3-9(a) / Re-referred to Assignments [SB3152 Detail]
Download: Illinois-2023-SB3152-Introduced.html
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1 | AN ACT concerning revenue.
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2 | Be it enacted by the People of the State of Illinois, | |||||||||||||||||||||
3 | represented in the General Assembly:
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4 | Section 5. The Illinois Income Tax Act is amended by | |||||||||||||||||||||
5 | changing Section 203 as follows:
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6 | (35 ILCS 5/203) | |||||||||||||||||||||
7 | Sec. 203. Base income defined. | |||||||||||||||||||||
8 | (a) Individuals. | |||||||||||||||||||||
9 | (1) In general. In the case of an individual, base | |||||||||||||||||||||
10 | income means an amount equal to the taxpayer's adjusted | |||||||||||||||||||||
11 | gross income for the taxable year as modified by paragraph | |||||||||||||||||||||
12 | (2). | |||||||||||||||||||||
13 | (2) Modifications. The adjusted gross income referred | |||||||||||||||||||||
14 | to in paragraph (1) shall be modified by adding thereto | |||||||||||||||||||||
15 | the sum of the following amounts: | |||||||||||||||||||||
16 | (A) An amount equal to all amounts paid or accrued | |||||||||||||||||||||
17 | to the taxpayer as interest or dividends during the | |||||||||||||||||||||
18 | taxable year to the extent excluded from gross income | |||||||||||||||||||||
19 | in the computation of adjusted gross income, except | |||||||||||||||||||||
20 | stock dividends of qualified public utilities | |||||||||||||||||||||
21 | described in Section 305(e) of the Internal Revenue | |||||||||||||||||||||
22 | Code; | |||||||||||||||||||||
23 | (B) An amount equal to the amount of tax imposed by |
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1 | this Act to the extent deducted from gross income in | ||||||
2 | the computation of adjusted gross income for the | ||||||
3 | taxable year; | ||||||
4 | (C) An amount equal to the amount received during | ||||||
5 | the taxable year as a recovery or refund of real | ||||||
6 | property taxes paid with respect to the taxpayer's | ||||||
7 | principal residence under the Revenue Act of 1939 and | ||||||
8 | for which a deduction was previously taken under | ||||||
9 | subparagraph (L) of this paragraph (2) prior to July | ||||||
10 | 1, 1991, the retrospective application date of Article | ||||||
11 | 4 of Public Act 87-17. In the case of multi-unit or | ||||||
12 | multi-use structures and farm dwellings, the taxes on | ||||||
13 | the taxpayer's principal residence shall be that | ||||||
14 | portion of the total taxes for the entire property | ||||||
15 | which is attributable to such principal residence; | ||||||
16 | (D) 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 adjusted gross income; | ||||||
20 | (D-5) An amount, to the extent not included in | ||||||
21 | adjusted gross income, equal to the amount of money | ||||||
22 | withdrawn by the taxpayer in the taxable year from a | ||||||
23 | medical care savings account and the interest earned | ||||||
24 | on the account in the taxable year of a withdrawal | ||||||
25 | pursuant to subsection (b) of Section 20 of the | ||||||
26 | Medical Care Savings Account Act or subsection (b) of |
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1 | Section 20 of the Medical Care Savings Account Act of | ||||||
2 | 2000; | ||||||
3 | (D-10) For taxable years ending after December 31, | ||||||
4 | 1997, an amount equal to any eligible remediation | ||||||
5 | costs that the individual deducted in computing | ||||||
6 | adjusted gross income and for which the individual | ||||||
7 | claims a credit under subsection (l) of Section 201; | ||||||
8 | (D-15) For taxable years 2001 and thereafter, an | ||||||
9 | amount equal to the bonus depreciation deduction taken | ||||||
10 | on the taxpayer's federal income tax return for the | ||||||
11 | taxable year under subsection (k) of Section 168 of | ||||||
12 | the Internal Revenue Code; | ||||||
13 | (D-16) If the taxpayer sells, transfers, abandons, | ||||||
14 | or otherwise disposes of property for which the | ||||||
15 | taxpayer was required in any taxable year to make an | ||||||
16 | addition modification under subparagraph (D-15), then | ||||||
17 | an amount equal to the aggregate amount of the | ||||||
18 | deductions taken in all taxable years under | ||||||
19 | subparagraph (Z) with respect to that property. | ||||||
20 | If the taxpayer continues to own property through | ||||||
21 | the last day of the last tax year for which a | ||||||
22 | subtraction is allowed with respect to that property | ||||||
23 | under subparagraph (Z) and for which the taxpayer was | ||||||
24 | allowed in any taxable year to make a subtraction | ||||||
25 | modification under subparagraph (Z), then an amount | ||||||
26 | equal to that subtraction modification. |
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1 | The taxpayer is required to make the addition | ||||||
2 | modification under this subparagraph only once with | ||||||
3 | respect to any one piece of property; | ||||||
4 | (D-17) An amount equal to the amount otherwise | ||||||
5 | allowed as a deduction in computing base income for | ||||||
6 | interest paid, accrued, or incurred, directly or | ||||||
7 | indirectly, (i) for taxable years ending on or after | ||||||
8 | December 31, 2004, to a foreign person who would be a | ||||||
9 | member of the same unitary business group but for the | ||||||
10 | fact that foreign person's business activity outside | ||||||
11 | the United States is 80% or more of the foreign | ||||||
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. The addition modification | ||||||
20 | required by this subparagraph shall be reduced to the | ||||||
21 | extent that dividends were included in base income of | ||||||
22 | the unitary group for the same taxable year and | ||||||
23 | received by the taxpayer or by a member of the | ||||||
24 | taxpayer's unitary business group (including amounts | ||||||
25 | included in gross income under Sections 951 through | ||||||
26 | 964 of the Internal Revenue Code and amounts included |
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1 | in gross income under Section 78 of the Internal | ||||||
2 | Revenue Code) with respect to the stock of the same | ||||||
3 | person to whom the interest was paid, accrued, or | ||||||
4 | incurred. | ||||||
5 | This paragraph shall not apply to the following: | ||||||
6 | (i) an item of interest paid, accrued, or | ||||||
7 | incurred, directly or indirectly, to a person who | ||||||
8 | is subject in a foreign country or state, other | ||||||
9 | than a state which requires mandatory unitary | ||||||
10 | reporting, to a tax on or measured by net income | ||||||
11 | with respect to such interest; or | ||||||
12 | (ii) an item of interest paid, accrued, or | ||||||
13 | incurred, directly or indirectly, to a person if | ||||||
14 | the taxpayer can establish, based on a | ||||||
15 | preponderance of the evidence, both of the | ||||||
16 | following: | ||||||
17 | (a) the person, during the same taxable | ||||||
18 | year, paid, accrued, or incurred, the interest | ||||||
19 | to a person that is not a related member, and | ||||||
20 | (b) the transaction giving rise to the | ||||||
21 | interest expense between the taxpayer and the | ||||||
22 | person did not have as a principal purpose the | ||||||
23 | avoidance of Illinois income tax, and is paid | ||||||
24 | pursuant to a contract or agreement that | ||||||
25 | reflects an arm's-length interest rate and | ||||||
26 | terms; or |
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1 | (iii) the taxpayer can establish, based on | ||||||
2 | clear and convincing evidence, that the interest | ||||||
3 | paid, accrued, or incurred relates to a contract | ||||||
4 | or agreement entered into at arm's-length rates | ||||||
5 | and terms and the principal purpose for the | ||||||
6 | payment is not federal or Illinois tax avoidance; | ||||||
7 | or | ||||||
8 | (iv) an item of interest paid, accrued, or | ||||||
9 | incurred, directly or indirectly, to a person if | ||||||
10 | the taxpayer establishes by clear and convincing | ||||||
11 | evidence that the adjustments are unreasonable; or | ||||||
12 | if the taxpayer and the Director agree in writing | ||||||
13 | to the application or use of an alternative method | ||||||
14 | of apportionment under Section 304(f). | ||||||
15 | Nothing in this subsection shall preclude the | ||||||
16 | Director from making any other adjustment | ||||||
17 | otherwise allowed under Section 404 of this Act | ||||||
18 | for any tax year beginning after the effective | ||||||
19 | date of this amendment provided such adjustment is | ||||||
20 | made pursuant to regulation adopted by the | ||||||
21 | Department and such regulations provide methods | ||||||
22 | and standards by which the Department will utilize | ||||||
23 | its authority under Section 404 of this Act; | ||||||
24 | (D-18) An amount equal to the amount of intangible | ||||||
25 | expenses and costs otherwise allowed as a deduction in | ||||||
26 | computing base income, and that were paid, accrued, or |
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1 | incurred, directly or indirectly, (i) for taxable | ||||||
2 | years ending on or after December 31, 2004, to a | ||||||
3 | foreign person who would be a member of the same | ||||||
4 | unitary business group but for the fact that the | ||||||
5 | foreign person's business activity outside the United | ||||||
6 | States is 80% or more of that person's total business | ||||||
7 | activity and (ii) for taxable years ending on or after | ||||||
8 | December 31, 2008, to a person who would be a member of | ||||||
9 | the same unitary business group but for the fact that | ||||||
10 | the person is prohibited under Section 1501(a)(27) | ||||||
11 | from being included in the unitary business group | ||||||
12 | because he or she is ordinarily required to apportion | ||||||
13 | business income under different subsections of Section | ||||||
14 | 304. The addition modification required by this | ||||||
15 | subparagraph shall be reduced to the extent that | ||||||
16 | dividends were included in base income of the unitary | ||||||
17 | group for the same taxable year and received by the | ||||||
18 | taxpayer or by a member of the taxpayer's unitary | ||||||
19 | business group (including amounts included in gross | ||||||
20 | income under Sections 951 through 964 of the Internal | ||||||
21 | Revenue Code and amounts included in gross income | ||||||
22 | under Section 78 of the Internal Revenue Code) with | ||||||
23 | respect to the stock of the same person to whom the | ||||||
24 | intangible expenses and costs were directly or | ||||||
25 | indirectly paid, incurred, or accrued. The preceding | ||||||
26 | sentence does not apply to the extent that the same |
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1 | dividends caused a reduction to the addition | ||||||
2 | modification required under Section 203(a)(2)(D-17) of | ||||||
3 | this Act. As used in this subparagraph, the term | ||||||
4 | "intangible expenses and costs" includes (1) expenses, | ||||||
5 | losses, and costs for, or related to, the direct or | ||||||
6 | indirect acquisition, use, maintenance or management, | ||||||
7 | ownership, sale, exchange, or any other disposition of | ||||||
8 | intangible property; (2) losses incurred, directly or | ||||||
9 | indirectly, from factoring transactions or discounting | ||||||
10 | transactions; (3) royalty, patent, technical, and | ||||||
11 | copyright fees; (4) licensing fees; and (5) other | ||||||
12 | similar expenses and costs. For purposes of this | ||||||
13 | subparagraph, "intangible property" includes patents, | ||||||
14 | patent applications, trade names, trademarks, service | ||||||
15 | marks, copyrights, mask works, trade secrets, and | ||||||
16 | similar types of intangible assets. | ||||||
17 | This paragraph shall not apply to the following: | ||||||
18 | (i) any item of intangible expenses or costs | ||||||
19 | paid, accrued, or incurred, directly or | ||||||
20 | indirectly, from a transaction with a person who | ||||||
21 | is subject in a foreign country or state, other | ||||||
22 | than a state which requires mandatory unitary | ||||||
23 | reporting, to a tax on or measured by net income | ||||||
24 | with respect to such item; or | ||||||
25 | (ii) any item of intangible expense or cost | ||||||
26 | paid, accrued, or incurred, directly or |
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1 | indirectly, if the taxpayer can establish, based | ||||||
2 | on a preponderance of the evidence, both of the | ||||||
3 | following: | ||||||
4 | (a) the person during the same taxable | ||||||
5 | year paid, accrued, or incurred, the | ||||||
6 | intangible expense or cost to a person that is | ||||||
7 | not a related member, and | ||||||
8 | (b) the transaction giving rise to the | ||||||
9 | intangible expense or cost between the | ||||||
10 | taxpayer and the person did not have as a | ||||||
11 | principal purpose the avoidance of Illinois | ||||||
12 | income tax, and is paid pursuant to a contract | ||||||
13 | or agreement that reflects arm's-length terms; | ||||||
14 | or | ||||||
15 | (iii) any item of intangible expense or cost | ||||||
16 | paid, accrued, or incurred, directly or | ||||||
17 | indirectly, from a transaction with a person if | ||||||
18 | the taxpayer establishes by clear and convincing | ||||||
19 | evidence, that the adjustments are unreasonable; | ||||||
20 | or if the taxpayer and the Director agree in | ||||||
21 | writing to the application or use of an | ||||||
22 | alternative method of apportionment under Section | ||||||
23 | 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 |
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1 | for any tax year beginning after the effective | ||||||
2 | date of this amendment provided such adjustment is | ||||||
3 | made pursuant to regulation adopted by the | ||||||
4 | Department and such regulations provide methods | ||||||
5 | and standards by which the Department will utilize | ||||||
6 | its authority under Section 404 of this Act; | ||||||
7 | (D-19) For taxable years ending on or after | ||||||
8 | December 31, 2008, an amount equal to the amount of | ||||||
9 | insurance premium expenses and costs otherwise allowed | ||||||
10 | as a deduction in computing base income, and that were | ||||||
11 | paid, accrued, or incurred, directly or indirectly, to | ||||||
12 | a 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 |
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1 | stock of the same person to whom the premiums and costs | ||||||
2 | were directly or indirectly paid, incurred, or | ||||||
3 | accrued. The preceding sentence does not apply to the | ||||||
4 | extent that the same dividends caused a reduction to | ||||||
5 | the addition modification required under Section | ||||||
6 | 203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this | ||||||
7 | Act; | ||||||
8 | (D-20) For taxable years beginning on or after | ||||||
9 | January 1, 2002 and ending on or before December 31, | ||||||
10 | 2006, in the case of a distribution from a qualified | ||||||
11 | tuition program under Section 529 of the Internal | ||||||
12 | Revenue Code, other than (i) a distribution from a | ||||||
13 | College Savings Pool created under Section 16.5 of the | ||||||
14 | State Treasurer Act or (ii) a distribution from the | ||||||
15 | Illinois Prepaid Tuition Trust Fund, an amount equal | ||||||
16 | to the amount excluded from gross income under Section | ||||||
17 | 529(c)(3)(B). For taxable years beginning on or after | ||||||
18 | January 1, 2007, in the case of a distribution from a | ||||||
19 | qualified tuition program under Section 529 of the | ||||||
20 | Internal Revenue Code, other than (i) a distribution | ||||||
21 | from a College Savings Pool created under Section 16.5 | ||||||
22 | of the State Treasurer Act, (ii) a distribution from | ||||||
23 | the Illinois Prepaid Tuition Trust Fund, or (iii) a | ||||||
24 | distribution from a qualified tuition program under | ||||||
25 | Section 529 of the Internal Revenue Code that (I) | ||||||
26 | adopts and determines that its offering materials |
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1 | comply with the College Savings Plans Network's | ||||||
2 | disclosure principles and (II) has made reasonable | ||||||
3 | efforts to inform in-state residents of the existence | ||||||
4 | of in-state qualified tuition programs by informing | ||||||
5 | Illinois residents directly and, where applicable, to | ||||||
6 | inform financial intermediaries distributing the | ||||||
7 | program to inform in-state residents of the existence | ||||||
8 | of in-state qualified tuition programs at least | ||||||
9 | annually, an amount equal to the amount excluded from | ||||||
10 | gross income under Section 529(c)(3)(B). | ||||||
11 | For the purposes of this subparagraph (D-20), a | ||||||
12 | qualified tuition program has made reasonable efforts | ||||||
13 | if it makes disclosures (which may use the term | ||||||
14 | "in-state program" or "in-state plan" and need not | ||||||
15 | specifically refer to Illinois or its qualified | ||||||
16 | programs by name) (i) directly to prospective | ||||||
17 | participants in its offering materials or makes a | ||||||
18 | public disclosure, such as a website posting; and (ii) | ||||||
19 | where applicable, to intermediaries selling the | ||||||
20 | out-of-state program in the same manner that the | ||||||
21 | out-of-state program distributes its offering | ||||||
22 | materials; | ||||||
23 | (D-20.5) For taxable years beginning on or after | ||||||
24 | January 1, 2018, in the case of a distribution from a | ||||||
25 | qualified ABLE program under Section 529A of the | ||||||
26 | Internal Revenue Code, other than a distribution from |
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1 | a qualified ABLE program created under Section 16.6 of | ||||||
2 | the State Treasurer Act, an amount equal to the amount | ||||||
3 | excluded from gross income under Section 529A(c)(1)(B) | ||||||
4 | of the Internal Revenue Code; | ||||||
5 | (D-21) For taxable years beginning on or after | ||||||
6 | January 1, 2007, in the case of transfer of moneys from | ||||||
7 | a qualified tuition program under Section 529 of the | ||||||
8 | Internal Revenue Code that is administered by the | ||||||
9 | State to an out-of-state program, an amount equal to | ||||||
10 | the amount of moneys previously deducted from base | ||||||
11 | income under subsection (a)(2)(Y) of this Section; | ||||||
12 | (D-21.5) For taxable years beginning on or after | ||||||
13 | January 1, 2018, in the case of the transfer of moneys | ||||||
14 | from a qualified tuition program under Section 529 or | ||||||
15 | a qualified ABLE program under Section 529A of the | ||||||
16 | Internal Revenue Code that is administered by this | ||||||
17 | State to an ABLE account established under an | ||||||
18 | out-of-state ABLE account program, an amount equal to | ||||||
19 | the contribution component of the transferred amount | ||||||
20 | that was previously deducted from base income under | ||||||
21 | subsection (a)(2)(Y) or subsection (a)(2)(HH) of this | ||||||
22 | Section; | ||||||
23 | (D-22) For taxable years beginning on or after | ||||||
24 | January 1, 2009, and prior to January 1, 2018, in the | ||||||
25 | case of a nonqualified withdrawal or refund of moneys | ||||||
26 | from a qualified tuition program under Section 529 of |
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1 | the Internal Revenue Code administered by the State | ||||||
2 | that is not used for qualified expenses at an eligible | ||||||
3 | education institution, an amount equal to the | ||||||
4 | contribution component of the nonqualified withdrawal | ||||||
5 | or refund that was previously deducted from base | ||||||
6 | income under subsection (a)(2)(y) of this Section, | ||||||
7 | provided that the withdrawal or refund did not result | ||||||
8 | from the beneficiary's death or disability. For | ||||||
9 | taxable years beginning on or after January 1, 2018: | ||||||
10 | (1) in the case of a nonqualified withdrawal or | ||||||
11 | refund, as defined under Section 16.5 of the State | ||||||
12 | Treasurer Act, of moneys from a qualified tuition | ||||||
13 | program under Section 529 of the Internal Revenue Code | ||||||
14 | administered by the State, an amount equal to the | ||||||
15 | contribution component of the nonqualified withdrawal | ||||||
16 | or refund that was previously deducted from base | ||||||
17 | income under subsection (a)(2)(Y) of this Section, and | ||||||
18 | (2) in the case of a nonqualified withdrawal or refund | ||||||
19 | from a qualified ABLE program under Section 529A of | ||||||
20 | the Internal Revenue Code administered by the State | ||||||
21 | that is not used for qualified disability expenses, an | ||||||
22 | amount equal to the contribution component of the | ||||||
23 | nonqualified withdrawal or refund that was previously | ||||||
24 | deducted from base income under subsection (a)(2)(HH) | ||||||
25 | of this Section; | ||||||
26 | (D-23) An amount equal to the credit allowable to |
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1 | the taxpayer under Section 218(a) of this Act, | ||||||
2 | determined without regard to Section 218(c) of this | ||||||
3 | Act; | ||||||
4 | (D-24) For taxable years ending on or after | ||||||
5 | December 31, 2017, an amount equal to the deduction | ||||||
6 | allowed under Section 199 of the Internal Revenue Code | ||||||
7 | for the taxable year; | ||||||
8 | (D-25) In the case of a resident, an amount equal | ||||||
9 | to the amount of tax for which a credit is allowed | ||||||
10 | pursuant to Section 201(p)(7) of this Act; | ||||||
11 | (D-26) An amount that is withdrawn by the taxpayer | ||||||
12 | from a small business asset purchase account during | ||||||
13 | the taxable year and that is not used for the purchase | ||||||
14 | of qualified property; as used in this subparagraph | ||||||
15 | (D-26), "qualified property" means property that is | ||||||
16 | used predominantly in Illinois and for which a | ||||||
17 | deduction under Section 179 of the Internal Revenue | ||||||
18 | Code is claimed for the tax year in which the amount is | ||||||
19 | withdrawn from the small business asset purchase | ||||||
20 | account; amounts that are subject to the addition | ||||||
21 | modification under this subparagraph (D-26) are also | ||||||
22 | subject to the 10% penalty for ineligible use under | ||||||
23 | Section 3-3.5 of the Uniform Penalty and Interest Act; | ||||||
24 | and by deducting from the total so obtained the sum of the | ||||||
25 | following amounts: | ||||||
26 | (E) For taxable years ending before December 31, |
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1 | 2001, any amount included in such total in respect of | ||||||
2 | any compensation (including but not limited to any | ||||||
3 | compensation paid or accrued to a serviceman while a | ||||||
4 | prisoner of war or missing in action) paid to a | ||||||
5 | resident by reason of being on active duty in the Armed | ||||||
6 | Forces of the United States and in respect of any | ||||||
7 | compensation paid or accrued to a resident who as a | ||||||
8 | governmental employee was a prisoner of war or missing | ||||||
9 | in action, and in respect of any compensation paid to a | ||||||
10 | resident in 1971 or thereafter for annual training | ||||||
11 | performed pursuant to Sections 502 and 503, Title 32, | ||||||
12 | United States Code as a member of the Illinois | ||||||
13 | National Guard or, beginning with taxable years ending | ||||||
14 | on or after December 31, 2007, the National Guard of | ||||||
15 | any other state. For taxable years ending on or after | ||||||
16 | December 31, 2001, any amount included in such total | ||||||
17 | in respect of any compensation (including but not | ||||||
18 | limited to any compensation paid or accrued to a | ||||||
19 | serviceman while a prisoner of war or missing in | ||||||
20 | action) paid to a resident by reason of being a member | ||||||
21 | of any component of the Armed Forces of the United | ||||||
22 | States and in respect of any compensation paid or | ||||||
23 | accrued to a resident who as a governmental employee | ||||||
24 | was a prisoner of war or missing in action, and in | ||||||
25 | respect of any compensation paid to a resident in 2001 | ||||||
26 | or thereafter by reason of being a member of the |
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1 | Illinois National Guard or, beginning with taxable | ||||||
2 | years ending on or after December 31, 2007, the | ||||||
3 | National Guard of any other state. The provisions of | ||||||
4 | this subparagraph (E) are exempt from the provisions | ||||||
5 | of Section 250; | ||||||
6 | (F) An amount equal to all amounts included in | ||||||
7 | such total pursuant to the provisions of Sections | ||||||
8 | 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and | ||||||
9 | 408 of the Internal Revenue Code, or included in such | ||||||
10 | total as distributions under the provisions of any | ||||||
11 | retirement or disability plan for employees of any | ||||||
12 | governmental agency or unit, or retirement payments to | ||||||
13 | retired partners, which payments are excluded in | ||||||
14 | computing net earnings from self employment by Section | ||||||
15 | 1402 of the Internal Revenue Code and regulations | ||||||
16 | adopted pursuant thereto; | ||||||
17 | (G) The valuation limitation amount; | ||||||
18 | (H) 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 | (I) An amount equal to all amounts included in | ||||||
22 | such total pursuant to the provisions of Section 111 | ||||||
23 | of the Internal Revenue Code as a recovery of items | ||||||
24 | previously deducted from adjusted gross income in the | ||||||
25 | computation of taxable income; | ||||||
26 | (J) An amount equal to those dividends included in |
| |||||||
| |||||||
1 | such total which were paid by a corporation which | ||||||
2 | conducts business operations in a River Edge | ||||||
3 | Redevelopment Zone or zones created under the River | ||||||
4 | Edge Redevelopment Zone Act, and conducts | ||||||
5 | substantially all of its operations in a River Edge | ||||||
6 | Redevelopment Zone or zones. This subparagraph (J) is | ||||||
7 | exempt from the provisions of Section 250; | ||||||
8 | (K) An amount equal to those dividends included in | ||||||
9 | such total that were paid by a corporation that | ||||||
10 | conducts business operations in a federally designated | ||||||
11 | Foreign Trade Zone or Sub-Zone and that is designated | ||||||
12 | a High Impact Business located in Illinois; provided | ||||||
13 | that dividends eligible for the deduction provided in | ||||||
14 | subparagraph (J) of paragraph (2) of this subsection | ||||||
15 | shall not be eligible for the deduction provided under | ||||||
16 | this subparagraph (K); | ||||||
17 | (L) For taxable years ending after December 31, | ||||||
18 | 1983, an amount equal to all social security benefits | ||||||
19 | and railroad retirement benefits included in such | ||||||
20 | total pursuant to Sections 72(r) and 86 of the | ||||||
21 | Internal Revenue Code; | ||||||
22 | (M) With the exception of any amounts subtracted | ||||||
23 | under subparagraph (N), an amount equal to the sum of | ||||||
24 | all amounts disallowed as deductions by (i) Sections | ||||||
25 | 171(a)(2) and 265(a)(2) of the Internal Revenue Code, | ||||||
26 | and all amounts of expenses allocable to interest and |
| |||||||
| |||||||
1 | disallowed as deductions by Section 265(a)(1) of the | ||||||
2 | Internal Revenue Code; and (ii) for taxable years | ||||||
3 | ending on or after August 13, 1999, Sections | ||||||
4 | 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the | ||||||
5 | Internal Revenue Code, plus, for taxable years ending | ||||||
6 | on or after December 31, 2011, Section 45G(e)(3) of | ||||||
7 | the Internal Revenue Code and, for taxable years | ||||||
8 | ending on or after December 31, 2008, any amount | ||||||
9 | included in gross income under Section 87 of the | ||||||
10 | Internal Revenue Code; the provisions of this | ||||||
11 | subparagraph are exempt from the provisions of Section | ||||||
12 | 250; | ||||||
13 | (N) An amount equal to all amounts included in | ||||||
14 | such total which are exempt from taxation by this | ||||||
15 | State either by reason of its statutes or Constitution | ||||||
16 | or by reason of the Constitution, treaties or statutes | ||||||
17 | of the United States; provided that, in the case of any | ||||||
18 | statute of this State that exempts income derived from | ||||||
19 | bonds or other obligations from the tax imposed under | ||||||
20 | this Act, the amount exempted shall be the interest | ||||||
21 | net of bond premium amortization; | ||||||
22 | (O) An amount equal to any contribution made to a | ||||||
23 | job training project established pursuant to the Tax | ||||||
24 | Increment Allocation Redevelopment Act; | ||||||
25 | (P) An amount equal to the amount of the deduction | ||||||
26 | used to compute the federal income tax credit for |
| |||||||
| |||||||
1 | restoration of substantial amounts held under claim of | ||||||
2 | right for the taxable year pursuant to Section 1341 of | ||||||
3 | the Internal Revenue Code or of any itemized deduction | ||||||
4 | taken from adjusted gross income in the computation of | ||||||
5 | taxable income for restoration of substantial amounts | ||||||
6 | held under claim of right for the taxable year; | ||||||
7 | (Q) An amount equal to any amounts included in | ||||||
8 | such total, received by the taxpayer as an | ||||||
9 | acceleration in the payment of life, endowment or | ||||||
10 | annuity benefits in advance of the time they would | ||||||
11 | otherwise be payable as an indemnity for a terminal | ||||||
12 | illness; | ||||||
13 | (R) An amount equal to the amount of any federal or | ||||||
14 | State bonus paid to veterans of the Persian Gulf War; | ||||||
15 | (S) An amount, to the extent included in adjusted | ||||||
16 | gross income, equal to the amount of a contribution | ||||||
17 | made in the taxable year on behalf of the taxpayer to a | ||||||
18 | medical care savings account established under the | ||||||
19 | Medical Care Savings Account Act or the Medical Care | ||||||
20 | Savings Account Act of 2000 to the extent the | ||||||
21 | contribution is accepted by the account administrator | ||||||
22 | as provided in that Act; | ||||||
23 | (T) An amount, to the extent included in adjusted | ||||||
24 | gross income, equal to the amount of interest earned | ||||||
25 | in the taxable year on a medical care savings account | ||||||
26 | established under the Medical Care Savings Account Act |
| |||||||
| |||||||
1 | or the Medical Care Savings Account Act of 2000 on | ||||||
2 | behalf of the taxpayer, other than interest added | ||||||
3 | pursuant to item (D-5) of this paragraph (2); | ||||||
4 | (U) For one taxable year beginning on or after | ||||||
5 | January 1, 1994, an amount equal to the total amount of | ||||||
6 | tax imposed and paid under subsections (a) and (b) of | ||||||
7 | Section 201 of this Act on grant amounts received by | ||||||
8 | the taxpayer under the Nursing Home Grant Assistance | ||||||
9 | Act during the taxpayer's taxable years 1992 and 1993; | ||||||
10 | (V) Beginning with tax years ending on or after | ||||||
11 | December 31, 1995 and ending with tax years ending on | ||||||
12 | or before December 31, 2004, an amount equal to the | ||||||
13 | amount paid by a taxpayer who is a self-employed | ||||||
14 | taxpayer, a partner of a partnership, or a shareholder | ||||||
15 | in a Subchapter S corporation for health insurance or | ||||||
16 | long-term care insurance for that taxpayer or that | ||||||
17 | taxpayer's spouse or dependents, to the extent that | ||||||
18 | the amount paid for that health insurance or long-term | ||||||
19 | care insurance may be deducted under Section 213 of | ||||||
20 | the Internal Revenue Code, has not been deducted on | ||||||
21 | the federal income tax return of the taxpayer, and | ||||||
22 | does not exceed the taxable income attributable to | ||||||
23 | that taxpayer's income, self-employment income, or | ||||||
24 | Subchapter S corporation income; except that no | ||||||
25 | deduction shall be allowed under this item (V) if the | ||||||
26 | taxpayer is eligible to participate in any health |
| |||||||
| |||||||
1 | insurance or long-term care insurance plan of an | ||||||
2 | employer of the taxpayer or the taxpayer's spouse. The | ||||||
3 | amount of the health insurance and long-term care | ||||||
4 | insurance subtracted under this item (V) shall be | ||||||
5 | determined by multiplying total health insurance and | ||||||
6 | long-term care insurance premiums paid by the taxpayer | ||||||
7 | times a number that represents the fractional | ||||||
8 | percentage of eligible medical expenses under Section | ||||||
9 | 213 of the Internal Revenue Code of 1986 not actually | ||||||
10 | deducted on the taxpayer's federal income tax return; | ||||||
11 | (W) For taxable years beginning on or after | ||||||
12 | January 1, 1998, all amounts included in the | ||||||
13 | taxpayer's federal gross income in the taxable year | ||||||
14 | from amounts converted from a regular IRA to a Roth | ||||||
15 | IRA. This paragraph is exempt from the provisions of | ||||||
16 | Section 250; | ||||||
17 | (X) For taxable year 1999 and thereafter, an | ||||||
18 | amount equal to the amount of any (i) distributions, | ||||||
19 | to the extent includible in gross income for federal | ||||||
20 | income tax purposes, made to the taxpayer because of | ||||||
21 | his or her status as a victim of persecution for racial | ||||||
22 | or religious reasons by Nazi Germany or any other Axis | ||||||
23 | regime or as an heir of the victim and (ii) items of | ||||||
24 | income, to the extent includible in gross income for | ||||||
25 | federal income tax purposes, attributable to, derived | ||||||
26 | from or in any way related to assets stolen from, |
| |||||||
| |||||||
1 | hidden from, or otherwise lost to a victim of | ||||||
2 | persecution for racial or religious reasons by Nazi | ||||||
3 | Germany or any other Axis regime immediately prior to, | ||||||
4 | during, and immediately after World War II, including, | ||||||
5 | but not limited to, interest on the proceeds | ||||||
6 | receivable as insurance under policies issued to a | ||||||
7 | victim of persecution for racial or religious reasons | ||||||
8 | by Nazi Germany or any other Axis regime by European | ||||||
9 | insurance companies immediately prior to and during | ||||||
10 | World War II; provided, however, this subtraction from | ||||||
11 | federal adjusted gross income does not apply to assets | ||||||
12 | acquired with such assets or with the proceeds from | ||||||
13 | the sale of such assets; provided, further, this | ||||||
14 | paragraph shall only apply to a taxpayer who was the | ||||||
15 | first recipient of such assets after their recovery | ||||||
16 | and who is a victim of persecution for racial or | ||||||
17 | religious reasons by Nazi Germany or any other Axis | ||||||
18 | regime or as an heir of the victim. The amount of and | ||||||
19 | the eligibility for any public assistance, benefit, or | ||||||
20 | similar entitlement is not affected by the inclusion | ||||||
21 | of items (i) and (ii) of this paragraph in gross income | ||||||
22 | for federal income tax purposes. This paragraph is | ||||||
23 | exempt from the provisions of Section 250; | ||||||
24 | (Y) For taxable years beginning on or after | ||||||
25 | January 1, 2002 and ending on or before December 31, | ||||||
26 | 2004, moneys contributed in the taxable year to a |
| |||||||
| |||||||
1 | College Savings Pool account under Section 16.5 of the | ||||||
2 | State Treasurer Act, except that amounts excluded from | ||||||
3 | gross income under Section 529(c)(3)(C)(i) of the | ||||||
4 | Internal Revenue Code shall not be considered moneys | ||||||
5 | contributed under this subparagraph (Y). For taxable | ||||||
6 | years beginning on or after January 1, 2005, a maximum | ||||||
7 | of $10,000 contributed in the taxable year to (i) a | ||||||
8 | College Savings Pool account under Section 16.5 of the | ||||||
9 | State Treasurer Act or (ii) the Illinois Prepaid | ||||||
10 | Tuition Trust Fund, except that amounts excluded from | ||||||
11 | gross income under Section 529(c)(3)(C)(i) of the | ||||||
12 | Internal Revenue Code shall not be considered moneys | ||||||
13 | contributed under this subparagraph (Y). For purposes | ||||||
14 | of this subparagraph, contributions made by an | ||||||
15 | employer on behalf of an employee, or matching | ||||||
16 | contributions made by an employee, shall be treated as | ||||||
17 | made by the employee. This subparagraph (Y) is exempt | ||||||
18 | from the provisions of Section 250; | ||||||
19 | (Z) For taxable years 2001 and thereafter, for the | ||||||
20 | taxable year in which the bonus depreciation deduction | ||||||
21 | is taken on the taxpayer's federal income tax return | ||||||
22 | under subsection (k) of Section 168 of the Internal | ||||||
23 | Revenue Code and for each applicable taxable year | ||||||
24 | thereafter, an amount equal to "x", where: | ||||||
25 | (1) "y" equals the amount of the depreciation | ||||||
26 | deduction taken for the taxable year on the |
| |||||||
| |||||||
1 | taxpayer's federal income tax return on property | ||||||
2 | for which the bonus depreciation deduction was | ||||||
3 | taken in any year under subsection (k) of Section | ||||||
4 | 168 of the Internal Revenue Code, but not | ||||||
5 | including the bonus depreciation deduction; | ||||||
6 | (2) for taxable years ending on or before | ||||||
7 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
8 | and then divided by 70 (or "y" multiplied by | ||||||
9 | 0.429); and | ||||||
10 | (3) for taxable years ending after December | ||||||
11 | 31, 2005: | ||||||
12 | (i) for property on which a bonus | ||||||
13 | depreciation deduction of 30% of the adjusted | ||||||
14 | basis was taken, "x" equals "y" multiplied by | ||||||
15 | 30 and then divided by 70 (or "y" multiplied | ||||||
16 | by 0.429); | ||||||
17 | (ii) for property on which a bonus | ||||||
18 | depreciation deduction of 50% of the adjusted | ||||||
19 | basis was taken, "x" equals "y" multiplied by | ||||||
20 | 1.0; | ||||||
21 | (iii) for property on which a bonus | ||||||
22 | depreciation deduction of 100% of the adjusted | ||||||
23 | basis was taken in a taxable year ending on or | ||||||
24 | after December 31, 2021, "x" equals the | ||||||
25 | depreciation deduction that would be allowed | ||||||
26 | on that property if the taxpayer had made the |
| |||||||
| |||||||
1 | election under Section 168(k)(7) of the | ||||||
2 | Internal Revenue Code to not claim bonus | ||||||
3 | depreciation on that property; and | ||||||
4 | (iv) for property on which a bonus | ||||||
5 | depreciation deduction of a percentage other | ||||||
6 | than 30%, 50% or 100% of the adjusted basis | ||||||
7 | was taken in a taxable year ending on or after | ||||||
8 | December 31, 2021, "x" equals "y" multiplied | ||||||
9 | by 100 times the percentage bonus depreciation | ||||||
10 | on the property (that is, 100(bonus%)) and | ||||||
11 | then divided by 100 times 1 minus the | ||||||
12 | percentage bonus depreciation on the property | ||||||
13 | (that is, 100(1-bonus%)). | ||||||
14 | The aggregate amount deducted under this | ||||||
15 | subparagraph in all taxable years for any one piece of | ||||||
16 | property may not exceed the amount of the bonus | ||||||
17 | depreciation deduction taken on that property on the | ||||||
18 | taxpayer's federal income tax return under subsection | ||||||
19 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
20 | subparagraph (Z) is exempt from the provisions of | ||||||
21 | Section 250; | ||||||
22 | (AA) If the taxpayer sells, transfers, abandons, | ||||||
23 | or otherwise disposes of property for which the | ||||||
24 | taxpayer was required in any taxable year to make an | ||||||
25 | addition modification under subparagraph (D-15), then | ||||||
26 | an amount equal to that addition modification. |
| |||||||
| |||||||
1 | If the taxpayer continues to own property through | ||||||
2 | the last day of the last tax year for which a | ||||||
3 | subtraction is allowed with respect to that property | ||||||
4 | under subparagraph (Z) and for which the taxpayer was | ||||||
5 | required in any taxable year to make an addition | ||||||
6 | modification under subparagraph (D-15), then an amount | ||||||
7 | equal to that addition modification. | ||||||
8 | The taxpayer is allowed to take the deduction | ||||||
9 | under this subparagraph only once with respect to any | ||||||
10 | one piece of property. | ||||||
11 | This subparagraph (AA) is exempt from the | ||||||
12 | provisions of Section 250; | ||||||
13 | (BB) Any amount included in adjusted gross income, | ||||||
14 | other than salary, received by a driver in a | ||||||
15 | ridesharing arrangement using a motor vehicle; | ||||||
16 | (CC) The amount of (i) any interest income (net of | ||||||
17 | the deductions allocable thereto) taken into account | ||||||
18 | for the taxable year with respect to a transaction | ||||||
19 | with a taxpayer that is required to make an addition | ||||||
20 | modification with respect to such transaction under | ||||||
21 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
22 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
23 | the amount of that addition modification, and (ii) any | ||||||
24 | income from intangible property (net of the deductions | ||||||
25 | allocable thereto) taken into account for the taxable | ||||||
26 | year with respect to a transaction with a taxpayer |
| |||||||
| |||||||
1 | that is required to make an addition modification with | ||||||
2 | respect to such transaction under Section | ||||||
3 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
4 | 203(d)(2)(D-8), but not to exceed the amount of that | ||||||
5 | addition modification. This subparagraph (CC) is | ||||||
6 | exempt from the provisions of Section 250; | ||||||
7 | (DD) An amount equal to the interest income taken | ||||||
8 | into account for the taxable year (net of the | ||||||
9 | 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 | ||||||
12 | for the fact that the foreign person's business | ||||||
13 | activity outside the United States is 80% or more of | ||||||
14 | that person's total business activity and (ii) for | ||||||
15 | taxable years ending on or after December 31, 2008, to | ||||||
16 | a person who would be a member of the same unitary | ||||||
17 | business group but for the fact that the person is | ||||||
18 | prohibited under Section 1501(a)(27) from being | ||||||
19 | included in the unitary business group because he or | ||||||
20 | she is ordinarily required to apportion business | ||||||
21 | income under different subsections of Section 304, but | ||||||
22 | not to exceed the addition modification required to be | ||||||
23 | made for the same taxable year under Section | ||||||
24 | 203(a)(2)(D-17) for interest paid, accrued, or | ||||||
25 | incurred, directly or indirectly, to the same person. | ||||||
26 | This subparagraph (DD) is exempt from the provisions |
| |||||||
| |||||||
1 | of Section 250; | ||||||
2 | (EE) An amount equal to the income from intangible | ||||||
3 | property taken into account for the taxable year (net | ||||||
4 | of the deductions allocable thereto) with respect to | ||||||
5 | transactions with (i) a foreign person who would be a | ||||||
6 | member of the taxpayer's unitary business group but | ||||||
7 | for the fact that the foreign person's business | ||||||
8 | activity outside the United States is 80% or more of | ||||||
9 | that person's total business activity and (ii) for | ||||||
10 | taxable years ending on or after December 31, 2008, to | ||||||
11 | a person who would be a member of the same unitary | ||||||
12 | business group but for the fact that the person is | ||||||
13 | prohibited under Section 1501(a)(27) from being | ||||||
14 | included in the unitary business group because he or | ||||||
15 | she is ordinarily required to apportion business | ||||||
16 | income under different subsections of Section 304, but | ||||||
17 | not to exceed the addition modification required to be | ||||||
18 | made for the same taxable year under Section | ||||||
19 | 203(a)(2)(D-18) for intangible expenses and costs | ||||||
20 | paid, accrued, or incurred, directly or indirectly, to | ||||||
21 | the same foreign person. This subparagraph (EE) is | ||||||
22 | exempt from the provisions of Section 250; | ||||||
23 | (FF) An amount equal to any amount awarded to the | ||||||
24 | taxpayer during the taxable year by the Court of | ||||||
25 | Claims under subsection (c) of Section 8 of the Court | ||||||
26 | of Claims Act for time unjustly served in a State |
| |||||||
| |||||||
1 | prison. This subparagraph (FF) is exempt from the | ||||||
2 | provisions of Section 250; | ||||||
3 | (GG) For taxable years ending on or after December | ||||||
4 | 31, 2011, in the case of a taxpayer who was required to | ||||||
5 | add back any insurance premiums under Section | ||||||
6 | 203(a)(2)(D-19), such taxpayer may elect to subtract | ||||||
7 | that part of a reimbursement received from the | ||||||
8 | insurance company equal to the amount of the expense | ||||||
9 | or loss (including expenses incurred by the insurance | ||||||
10 | company) that would have been taken into account as a | ||||||
11 | deduction for federal income tax purposes if the | ||||||
12 | expense or loss had been uninsured. If a taxpayer | ||||||
13 | makes the election provided for by this subparagraph | ||||||
14 | (GG), the insurer to which the premiums were paid must | ||||||
15 | add back to income the amount subtracted by the | ||||||
16 | taxpayer pursuant to this subparagraph (GG). This | ||||||
17 | subparagraph (GG) is exempt from the provisions of | ||||||
18 | Section 250; | ||||||
19 | (HH) For taxable years beginning on or after | ||||||
20 | January 1, 2018 and prior to January 1, 2028, a maximum | ||||||
21 | of $10,000 contributed in the taxable year to a | ||||||
22 | qualified ABLE account under Section 16.6 of the State | ||||||
23 | Treasurer Act, except that amounts excluded from gross | ||||||
24 | income under Section 529(c)(3)(C)(i) or Section | ||||||
25 | 529A(c)(1)(C) of the Internal Revenue Code shall not | ||||||
26 | be considered moneys contributed under this |
| |||||||
| |||||||
1 | subparagraph (HH). For purposes of this subparagraph | ||||||
2 | (HH), contributions made by an employer on behalf of | ||||||
3 | an employee, or matching contributions made by an | ||||||
4 | employee, shall be treated as made by the employee; | ||||||
5 | (II) For taxable years that begin on or after | ||||||
6 | January 1, 2021 and begin before January 1, 2026, the | ||||||
7 | amount that is included in the taxpayer's federal | ||||||
8 | adjusted gross income pursuant to Section 61 of the | ||||||
9 | Internal Revenue Code as discharge of indebtedness | ||||||
10 | attributable to student loan forgiveness and that is | ||||||
11 | not excluded from the taxpayer's federal adjusted | ||||||
12 | gross income pursuant to paragraph (5) of subsection | ||||||
13 | (f) of Section 108 of the Internal Revenue Code; and | ||||||
14 | (JJ) For taxable years beginning on or after | ||||||
15 | January 1, 2023, for any cannabis establishment | ||||||
16 | operating in this State and licensed under the | ||||||
17 | Cannabis Regulation and Tax Act or any cannabis | ||||||
18 | cultivation center or medical cannabis dispensing | ||||||
19 | organization operating in this State and licensed | ||||||
20 | under the Compassionate Use of Medical Cannabis | ||||||
21 | Program Act, an amount equal to the deductions that | ||||||
22 | were disallowed under Section 280E of the Internal | ||||||
23 | Revenue Code for the taxable year and that would not be | ||||||
24 | added back under this subsection. The provisions of | ||||||
25 | this subparagraph (JJ) are exempt from the provisions | ||||||
26 | of Section 250 ; . |
| |||||||
| |||||||
1 | (KK) (JJ) To the extent includible in gross income | ||||||
2 | for federal income tax purposes, any amount awarded or | ||||||
3 | paid to the taxpayer as a result of a judgment or | ||||||
4 | settlement for fertility fraud as provided in Section | ||||||
5 | 15 of the Illinois Fertility Fraud Act, donor | ||||||
6 | fertility fraud as provided in Section 20 of the | ||||||
7 | Illinois Fertility Fraud Act, or similar action in | ||||||
8 | another state ; and . | ||||||
9 | (LL) For taxable years beginning on or after | ||||||
10 | January 1, 2025, an amount of up to $50,000 per tax | ||||||
11 | year contributed by the taxpayer to a small business | ||||||
12 | asset purchase account during the tax year, plus all | ||||||
13 | interest earned on those accounts during the tax year; | ||||||
14 | as used in this subparagraph (LL), "small business | ||||||
15 | asset purchase account" means an account established | ||||||
16 | by a taxpayer, the proceeds of which are used to | ||||||
17 | purchase property that is used primarily in Illinois | ||||||
18 | and for which a federal income tax deduction is | ||||||
19 | claimed under Section 179 of the Internal Revenue | ||||||
20 | Code.
| ||||||
21 | (b) Corporations. | ||||||
22 | (1) In general. In the case of a corporation, base | ||||||
23 | income means an amount equal to the taxpayer's taxable | ||||||
24 | income for the taxable year as modified by paragraph (2). | ||||||
25 | (2) Modifications. The taxable income referred to in |
| |||||||
| |||||||
1 | paragraph (1) shall be modified by adding thereto the sum | ||||||
2 | of the following amounts: | ||||||
3 | (A) An amount equal to all amounts paid or accrued | ||||||
4 | to the taxpayer as interest and all distributions | ||||||
5 | received from regulated investment companies during | ||||||
6 | the taxable year to the extent excluded from gross | ||||||
7 | income in the computation of taxable income; | ||||||
8 | (B) An amount equal to the amount of tax imposed by | ||||||
9 | this Act to the extent deducted from gross income in | ||||||
10 | the computation of taxable income for the taxable | ||||||
11 | year; | ||||||
12 | (C) In the case of a regulated investment company, | ||||||
13 | an amount equal to the excess of (i) the net long-term | ||||||
14 | capital gain for the taxable year, over (ii) the | ||||||
15 | amount of the capital gain dividends designated as | ||||||
16 | such in accordance with Section 852(b)(3)(C) of the | ||||||
17 | Internal Revenue Code and any amount designated under | ||||||
18 | Section 852(b)(3)(D) of the Internal Revenue Code, | ||||||
19 | attributable to the taxable year (this amendatory Act | ||||||
20 | of 1995 (Public Act 89-89) is declarative of existing | ||||||
21 | law and is not a new enactment); | ||||||
22 | (D) The amount of any net operating loss deduction | ||||||
23 | taken in arriving at taxable income, other than a net | ||||||
24 | operating loss carried forward from a taxable year | ||||||
25 | ending prior to December 31, 1986; | ||||||
26 | (E) For taxable years in which a net operating |
| |||||||
| |||||||
1 | loss carryback or carryforward from a taxable year | ||||||
2 | ending prior to December 31, 1986 is an element of | ||||||
3 | taxable income under paragraph (1) of subsection (e) | ||||||
4 | or subparagraph (E) of paragraph (2) of subsection | ||||||
5 | (e), the amount by which addition modifications other | ||||||
6 | than those provided by this subparagraph (E) exceeded | ||||||
7 | subtraction modifications in such earlier taxable | ||||||
8 | year, with the following limitations applied in the | ||||||
9 | order that they are listed: | ||||||
10 | (i) the addition modification relating to the | ||||||
11 | net operating loss carried back or forward to the | ||||||
12 | taxable year from any taxable year ending prior to | ||||||
13 | December 31, 1986 shall be reduced by the amount | ||||||
14 | of addition modification under this subparagraph | ||||||
15 | (E) which related to that net operating loss and | ||||||
16 | which was taken into account in calculating the | ||||||
17 | base income of an earlier taxable year, and | ||||||
18 | (ii) the addition modification relating to the | ||||||
19 | net operating loss carried back or forward to the | ||||||
20 | taxable year from any taxable year ending prior to | ||||||
21 | December 31, 1986 shall not exceed the amount of | ||||||
22 | such carryback or carryforward; | ||||||
23 | For taxable years in which there is a net | ||||||
24 | operating loss carryback or carryforward from more | ||||||
25 | than one other taxable year ending prior to December | ||||||
26 | 31, 1986, the addition modification provided in this |
| |||||||
| |||||||
1 | subparagraph (E) shall be the sum of the amounts | ||||||
2 | computed independently under the preceding provisions | ||||||
3 | of this subparagraph (E) for each such taxable year; | ||||||
4 | (E-5) For taxable years ending after December 31, | ||||||
5 | 1997, an amount equal to any eligible remediation | ||||||
6 | costs that the corporation deducted in computing | ||||||
7 | adjusted gross income and for which the corporation | ||||||
8 | claims a credit under subsection (l) of Section 201; | ||||||
9 | (E-10) For taxable years 2001 and thereafter, an | ||||||
10 | amount equal to the bonus depreciation deduction taken | ||||||
11 | on the taxpayer's federal income tax return for the | ||||||
12 | taxable year under subsection (k) of Section 168 of | ||||||
13 | the Internal Revenue Code; | ||||||
14 | (E-11) If the taxpayer sells, transfers, abandons, | ||||||
15 | or otherwise disposes of property for which the | ||||||
16 | taxpayer was required in any taxable year to make an | ||||||
17 | addition modification under subparagraph (E-10), then | ||||||
18 | an amount equal to the aggregate amount of the | ||||||
19 | deductions taken in all taxable years under | ||||||
20 | subparagraph (T) with respect to that property. | ||||||
21 | If the taxpayer continues to own property through | ||||||
22 | the last day of the last tax year for which a | ||||||
23 | subtraction is allowed with respect to that property | ||||||
24 | under subparagraph (T) and for which the taxpayer was | ||||||
25 | allowed in any taxable year to make a subtraction | ||||||
26 | modification under subparagraph (T), then an amount |
| |||||||
| |||||||
1 | equal to that subtraction modification. | ||||||
2 | The taxpayer is required to make the addition | ||||||
3 | modification under this subparagraph only once with | ||||||
4 | respect to any one piece of property; | ||||||
5 | (E-12) An amount equal to the amount otherwise | ||||||
6 | allowed as a deduction in computing base income for | ||||||
7 | interest paid, accrued, or incurred, directly or | ||||||
8 | indirectly, (i) for taxable years ending on or after | ||||||
9 | December 31, 2004, to a foreign person who would be a | ||||||
10 | member of the same unitary business group but for the | ||||||
11 | fact the foreign person's business activity outside | ||||||
12 | the United States is 80% or more of the foreign | ||||||
13 | person's total business activity and (ii) for taxable | ||||||
14 | years ending on or after December 31, 2008, to a person | ||||||
15 | who would be a member of the same unitary business | ||||||
16 | group but for the fact that the person is prohibited | ||||||
17 | under Section 1501(a)(27) from being included in the | ||||||
18 | unitary business group because he or she is ordinarily | ||||||
19 | required to apportion business income under different | ||||||
20 | subsections of Section 304. The addition modification | ||||||
21 | required by this subparagraph shall be reduced to the | ||||||
22 | extent that dividends were included in base income of | ||||||
23 | the unitary group for the same taxable year and | ||||||
24 | received by the taxpayer or by a member of the | ||||||
25 | taxpayer's unitary business group (including amounts | ||||||
26 | included in gross income pursuant to Sections 951 |
| |||||||
| |||||||
1 | through 964 of the Internal Revenue Code and amounts | ||||||
2 | included in gross income under Section 78 of the | ||||||
3 | Internal Revenue Code) with respect to the stock of | ||||||
4 | the same person to whom the interest was paid, | ||||||
5 | accrued, or incurred. | ||||||
6 | This paragraph shall not apply to the following: | ||||||
7 | (i) an item of interest paid, accrued, or | ||||||
8 | incurred, directly or indirectly, to a person who | ||||||
9 | is subject in a foreign country or state, other | ||||||
10 | than a state which requires mandatory unitary | ||||||
11 | reporting, to a tax on or measured by net income | ||||||
12 | with respect to such interest; or | ||||||
13 | (ii) an item of interest paid, accrued, or | ||||||
14 | incurred, directly or indirectly, to a person if | ||||||
15 | the taxpayer can establish, based on a | ||||||
16 | preponderance of the evidence, both of the | ||||||
17 | following: | ||||||
18 | (a) the person, during the same taxable | ||||||
19 | year, paid, accrued, or incurred, the interest | ||||||
20 | to a person that is not a related member, and | ||||||
21 | (b) the transaction giving rise to the | ||||||
22 | interest expense between the taxpayer and the | ||||||
23 | person did not have as a principal purpose the | ||||||
24 | avoidance of Illinois income tax, and is paid | ||||||
25 | pursuant to a contract or agreement that | ||||||
26 | reflects an arm's-length interest rate and |
| |||||||
| |||||||
1 | terms; or | ||||||
2 | (iii) the taxpayer can establish, based on | ||||||
3 | clear and convincing evidence, that the interest | ||||||
4 | paid, accrued, or incurred relates to a contract | ||||||
5 | or agreement entered into at arm's-length rates | ||||||
6 | and terms and the principal purpose for the | ||||||
7 | payment is not federal or Illinois tax avoidance; | ||||||
8 | 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 | ||||||
19 | for any tax year beginning after the effective | ||||||
20 | date of this amendment provided such adjustment is | ||||||
21 | made pursuant to regulation adopted by the | ||||||
22 | Department and such regulations provide methods | ||||||
23 | and standards by which the Department will utilize | ||||||
24 | its authority under Section 404 of this Act; | ||||||
25 | (E-13) An amount equal to the amount of intangible | ||||||
26 | expenses and costs otherwise allowed as a deduction in |
| |||||||
| |||||||
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 |
| |||||||
| |||||||
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(b)(2)(E-12) 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 | ||||||
22 | is subject in a foreign country or state, other | ||||||
23 | than a state which requires mandatory unitary | ||||||
24 | reporting, to a tax on or measured by net income | ||||||
25 | with respect to such item; or | ||||||
26 | (ii) any item of intangible expense or cost |
| |||||||
| |||||||
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 | ||||||
19 | the 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 | ||||||
23 | alternative method of apportionment under Section | ||||||
24 | 304(f); | ||||||
25 | Nothing in this subsection shall preclude the | ||||||
26 | Director from making any other adjustment |
| |||||||
| |||||||
1 | otherwise allowed under Section 404 of this Act | ||||||
2 | for any tax year beginning after the effective | ||||||
3 | date of this amendment provided such adjustment is | ||||||
4 | made pursuant to regulation adopted by the | ||||||
5 | Department and such regulations provide methods | ||||||
6 | and standards by which the Department will utilize | ||||||
7 | its authority under Section 404 of this Act; | ||||||
8 | (E-14) For taxable years ending on or after | ||||||
9 | December 31, 2008, an amount equal to the amount of | ||||||
10 | insurance premium expenses and costs otherwise allowed | ||||||
11 | as a deduction in computing base income, and that were | ||||||
12 | paid, accrued, or incurred, directly or indirectly, to | ||||||
13 | a person who would be a member of the same unitary | ||||||
14 | business group but for the fact that the person is | ||||||
15 | prohibited under Section 1501(a)(27) from being | ||||||
16 | included in the unitary business group because he or | ||||||
17 | she is ordinarily required to apportion business | ||||||
18 | income under different subsections of Section 304. The | ||||||
19 | addition modification required by this subparagraph | ||||||
20 | shall be reduced to the extent that dividends were | ||||||
21 | included in base income of the unitary group for the | ||||||
22 | same taxable year and received by the taxpayer or by a | ||||||
23 | member of the taxpayer's unitary business group | ||||||
24 | (including amounts included in gross income under | ||||||
25 | Sections 951 through 964 of the Internal Revenue Code | ||||||
26 | and amounts included in gross income under Section 78 |
| |||||||
| |||||||
1 | of the Internal Revenue Code) with respect to the | ||||||
2 | stock of the same person to whom the premiums and costs | ||||||
3 | were directly or indirectly paid, incurred, or | ||||||
4 | accrued. The preceding sentence does not apply to the | ||||||
5 | extent that the same dividends caused a reduction to | ||||||
6 | the addition modification required under Section | ||||||
7 | 203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this | ||||||
8 | Act; | ||||||
9 | (E-15) For taxable years beginning after December | ||||||
10 | 31, 2008, any deduction for dividends paid by a | ||||||
11 | captive real estate investment trust that is allowed | ||||||
12 | to a real estate investment trust under Section | ||||||
13 | 857(b)(2)(B) of the Internal Revenue Code for | ||||||
14 | dividends paid; | ||||||
15 | (E-16) An amount equal to the credit allowable to | ||||||
16 | the taxpayer under Section 218(a) of this Act, | ||||||
17 | determined without regard to Section 218(c) of this | ||||||
18 | Act; | ||||||
19 | (E-17) For taxable years ending on or after | ||||||
20 | December 31, 2017, an amount equal to the deduction | ||||||
21 | allowed under Section 199 of the Internal Revenue Code | ||||||
22 | for the taxable year; | ||||||
23 | (E-18) for taxable years beginning after December | ||||||
24 | 31, 2018, an amount equal to the deduction allowed | ||||||
25 | under Section 250(a)(1)(A) of the Internal Revenue | ||||||
26 | Code for the taxable year; |
| |||||||
| |||||||
1 | (E-19) for taxable years ending on or after June | ||||||
2 | 30, 2021, an amount equal to the deduction allowed | ||||||
3 | under Section 250(a)(1)(B)(i) of the Internal Revenue | ||||||
4 | Code for the taxable year; | ||||||
5 | (E-20) for taxable years ending on or after June | ||||||
6 | 30, 2021, an amount equal to the deduction allowed | ||||||
7 | under Sections 243(e) and 245A(a) of the Internal | ||||||
8 | Revenue Code for the taxable year ; and . | ||||||
9 | (E-21) An amount that is withdrawn by the taxpayer | ||||||
10 | from a small business asset purchase account during | ||||||
11 | the taxable year and that is not used for the purchase | ||||||
12 | of qualified property; as used in this subparagraph | ||||||
13 | (E-21), "qualified property" means property that is | ||||||
14 | used predominantly in Illinois and for which a | ||||||
15 | deduction under Section 179 of the Internal Revenue | ||||||
16 | Code is claimed for the tax year in which the amount is | ||||||
17 | withdrawn from the small business asset purchase | ||||||
18 | account; amounts that are subject to the addition | ||||||
19 | modification under this subparagraph (E-21) are also | ||||||
20 | subject to the 10% penalty for ineligible use under | ||||||
21 | Section 3-3.5 of the Uniform Penalty and Interest Act; | ||||||
22 | and by deducting from the total so obtained the sum of the | ||||||
23 | following amounts: | ||||||
24 | (F) An amount equal to the amount of any tax | ||||||
25 | imposed by this Act which was refunded to the taxpayer | ||||||
26 | and included in such total for the taxable year; |
| |||||||
| |||||||
1 | (G) An amount equal to any amount included in such | ||||||
2 | total under Section 78 of the Internal Revenue Code; | ||||||
3 | (H) In the case of a regulated investment company, | ||||||
4 | an amount equal to the amount of exempt interest | ||||||
5 | dividends as defined in subsection (b)(5) of Section | ||||||
6 | 852 of the Internal Revenue Code, paid to shareholders | ||||||
7 | for the taxable year; | ||||||
8 | (I) With the exception of any amounts subtracted | ||||||
9 | under subparagraph (J), an amount equal to the sum of | ||||||
10 | all amounts disallowed as deductions by (i) Sections | ||||||
11 | 171(a)(2) and 265(a)(2) and amounts disallowed as | ||||||
12 | interest expense by Section 291(a)(3) of the Internal | ||||||
13 | Revenue Code, and all amounts of expenses allocable to | ||||||
14 | interest and disallowed as deductions by Section | ||||||
15 | 265(a)(1) of the Internal Revenue Code; and (ii) for | ||||||
16 | taxable years ending on or after August 13, 1999, | ||||||
17 | Sections 171(a)(2), 265, 280C, 291(a)(3), and | ||||||
18 | 832(b)(5)(B)(i) of the Internal Revenue Code, plus, | ||||||
19 | for tax years ending on or after December 31, 2011, | ||||||
20 | amounts disallowed as deductions by Section 45G(e)(3) | ||||||
21 | of the Internal Revenue Code and, for taxable years | ||||||
22 | ending on or after December 31, 2008, any amount | ||||||
23 | included in gross income under Section 87 of the | ||||||
24 | Internal Revenue Code and the policyholders' share of | ||||||
25 | tax-exempt interest of a life insurance company under | ||||||
26 | Section 807(a)(2)(B) of the Internal Revenue Code (in |
| |||||||
| |||||||
1 | the case of a life insurance company with gross income | ||||||
2 | from a decrease in reserves for the tax year) or | ||||||
3 | Section 807(b)(1)(B) of the Internal Revenue Code (in | ||||||
4 | the case of a life insurance company allowed a | ||||||
5 | deduction for an increase in reserves for the tax | ||||||
6 | year); the provisions of this subparagraph are exempt | ||||||
7 | from the provisions of Section 250; | ||||||
8 | (J) An amount equal to all amounts included in | ||||||
9 | such total which are exempt from taxation by this | ||||||
10 | State either by reason of its statutes or Constitution | ||||||
11 | or by reason of the Constitution, treaties or statutes | ||||||
12 | of the United States; provided that, in the case of any | ||||||
13 | statute of this State that exempts income derived from | ||||||
14 | bonds or other obligations from the tax imposed under | ||||||
15 | this Act, the amount exempted shall be the interest | ||||||
16 | net of bond premium amortization; | ||||||
17 | (K) An amount equal to those dividends included in | ||||||
18 | such total which were paid by a corporation which | ||||||
19 | conducts business operations in a River Edge | ||||||
20 | Redevelopment Zone or zones created under the River | ||||||
21 | Edge Redevelopment Zone Act and conducts substantially | ||||||
22 | all of its operations in a River Edge Redevelopment | ||||||
23 | Zone or zones. This subparagraph (K) is exempt from | ||||||
24 | the provisions of Section 250; | ||||||
25 | (L) An amount equal to those dividends included in | ||||||
26 | such total that were paid by a corporation that |
| |||||||
| |||||||
1 | conducts business operations in a federally designated | ||||||
2 | Foreign Trade Zone or Sub-Zone and that is designated | ||||||
3 | a High Impact Business located in Illinois; provided | ||||||
4 | that dividends eligible for the deduction provided in | ||||||
5 | subparagraph (K) of paragraph 2 of this subsection | ||||||
6 | shall not be eligible for the deduction provided under | ||||||
7 | this subparagraph (L); | ||||||
8 | (M) For any taxpayer that is a financial | ||||||
9 | organization within the meaning of Section 304(c) of | ||||||
10 | this Act, an amount included in such total as interest | ||||||
11 | income from a loan or loans made by such taxpayer to a | ||||||
12 | borrower, to the extent that such a loan is secured by | ||||||
13 | property which is eligible for the River Edge | ||||||
14 | Redevelopment Zone Investment Credit. To determine the | ||||||
15 | portion of a loan or loans that is secured by property | ||||||
16 | eligible for a Section 201(f) investment credit to the | ||||||
17 | borrower, the entire principal amount of the loan or | ||||||
18 | loans between the taxpayer and the borrower should be | ||||||
19 | divided into the basis of the Section 201(f) | ||||||
20 | investment credit property which secures the loan or | ||||||
21 | loans, using for this purpose the original basis of | ||||||
22 | such property on the date that it was placed in service | ||||||
23 | in the River Edge Redevelopment Zone. The subtraction | ||||||
24 | modification available to the taxpayer in any year | ||||||
25 | under this subsection shall be that portion of the | ||||||
26 | total interest paid by the borrower with respect to |
| |||||||
| |||||||
1 | such loan attributable to the eligible property as | ||||||
2 | calculated under the previous sentence. This | ||||||
3 | subparagraph (M) is exempt from the provisions of | ||||||
4 | Section 250; | ||||||
5 | (M-1) For any taxpayer that is a financial | ||||||
6 | organization within the meaning of Section 304(c) of | ||||||
7 | this Act, an amount included in such total as interest | ||||||
8 | income from a loan or loans made by such taxpayer to a | ||||||
9 | borrower, to the extent that such a loan is secured by | ||||||
10 | property which is eligible for the High Impact | ||||||
11 | Business Investment Credit. To determine the portion | ||||||
12 | of a loan or loans that is secured by property eligible | ||||||
13 | for a Section 201(h) investment credit to the | ||||||
14 | borrower, the entire principal amount of the loan or | ||||||
15 | loans between the taxpayer and the borrower should be | ||||||
16 | divided into the basis of the Section 201(h) | ||||||
17 | investment credit property which secures the loan or | ||||||
18 | loans, using for this purpose the original basis of | ||||||
19 | such property on the date that it was placed in service | ||||||
20 | in a federally designated Foreign Trade Zone or | ||||||
21 | Sub-Zone located in Illinois. No taxpayer that is | ||||||
22 | eligible for the deduction provided in subparagraph | ||||||
23 | (M) of paragraph (2) of this subsection shall be | ||||||
24 | eligible for the deduction provided under this | ||||||
25 | subparagraph (M-1). The subtraction modification | ||||||
26 | available to taxpayers in any year under this |
| |||||||
| |||||||
1 | subsection shall be that portion of the total interest | ||||||
2 | paid by the borrower with respect to such loan | ||||||
3 | attributable to the eligible property as calculated | ||||||
4 | under the previous sentence; | ||||||
5 | (N) Two times any contribution made during the | ||||||
6 | taxable year to a designated zone organization to the | ||||||
7 | extent that the contribution (i) qualifies as a | ||||||
8 | charitable contribution under subsection (c) of | ||||||
9 | Section 170 of the Internal Revenue Code and (ii) | ||||||
10 | must, by its terms, be used for a project approved by | ||||||
11 | the Department of Commerce and Economic Opportunity | ||||||
12 | under Section 11 of the Illinois Enterprise Zone Act | ||||||
13 | or under Section 10-10 of the River Edge Redevelopment | ||||||
14 | Zone Act. This subparagraph (N) is exempt from the | ||||||
15 | provisions of Section 250; | ||||||
16 | (O) An amount equal to: (i) 85% for taxable years | ||||||
17 | ending on or before December 31, 1992, or, a | ||||||
18 | percentage equal to the percentage allowable under | ||||||
19 | Section 243(a)(1) of the Internal Revenue Code of 1986 | ||||||
20 | for taxable years ending after December 31, 1992, of | ||||||
21 | the amount by which dividends included in taxable | ||||||
22 | income and received from a corporation that is not | ||||||
23 | created or organized under the laws of the United | ||||||
24 | States or any state or political subdivision thereof, | ||||||
25 | including, for taxable years ending on or after | ||||||
26 | December 31, 1988, dividends received or deemed |
| |||||||
| |||||||
1 | received or paid or deemed paid under Sections 951 | ||||||
2 | through 965 of the Internal Revenue Code, exceed the | ||||||
3 | amount of the modification provided under subparagraph | ||||||
4 | (G) of paragraph (2) of this subsection (b) which is | ||||||
5 | related to such dividends, and including, for taxable | ||||||
6 | years ending on or after December 31, 2008, dividends | ||||||
7 | received from a captive real estate investment trust; | ||||||
8 | plus (ii) 100% of the amount by which dividends, | ||||||
9 | included in taxable income and received, including, | ||||||
10 | for taxable years ending on or after December 31, | ||||||
11 | 1988, dividends received or deemed received or paid or | ||||||
12 | deemed paid under Sections 951 through 964 of the | ||||||
13 | Internal Revenue Code and including, for taxable years | ||||||
14 | ending on or after December 31, 2008, dividends | ||||||
15 | received from a captive real estate investment trust, | ||||||
16 | from any such corporation specified in clause (i) that | ||||||
17 | would but for the provisions of Section 1504(b)(3) of | ||||||
18 | the Internal Revenue Code be treated as a member of the | ||||||
19 | affiliated group which includes the dividend | ||||||
20 | recipient, exceed the amount of the modification | ||||||
21 | provided under subparagraph (G) of paragraph (2) of | ||||||
22 | this subsection (b) which is related to such | ||||||
23 | dividends. For taxable years ending on or after June | ||||||
24 | 30, 2021, (i) for purposes of this subparagraph, the | ||||||
25 | term "dividend" does not include any amount treated as | ||||||
26 | a dividend under Section 1248 of the Internal Revenue |
| |||||||
| |||||||
1 | Code, and (ii) this subparagraph shall not apply to | ||||||
2 | dividends for which a deduction is allowed under | ||||||
3 | Section 245(a) of the Internal Revenue Code. This | ||||||
4 | subparagraph (O) is exempt from the provisions of | ||||||
5 | Section 250 of this Act; | ||||||
6 | (P) An amount equal to any contribution made to a | ||||||
7 | job training project established pursuant to the Tax | ||||||
8 | Increment Allocation Redevelopment Act; | ||||||
9 | (Q) An amount equal to the amount of the deduction | ||||||
10 | used to compute the federal income tax credit for | ||||||
11 | restoration of substantial amounts held under claim of | ||||||
12 | right for the taxable year pursuant to Section 1341 of | ||||||
13 | the Internal Revenue Code; | ||||||
14 | (R) On and after July 20, 1999, in the case of an | ||||||
15 | attorney-in-fact with respect to whom an interinsurer | ||||||
16 | or a reciprocal insurer has made the election under | ||||||
17 | Section 835 of the Internal Revenue Code, 26 U.S.C. | ||||||
18 | 835, an amount equal to the excess, if any, of the | ||||||
19 | amounts paid or incurred by that interinsurer or | ||||||
20 | reciprocal insurer in the taxable year to the | ||||||
21 | attorney-in-fact over the deduction allowed to that | ||||||
22 | interinsurer or reciprocal insurer with respect to the | ||||||
23 | attorney-in-fact under Section 835(b) of the Internal | ||||||
24 | Revenue Code for the taxable year; the provisions of | ||||||
25 | this subparagraph are exempt from the provisions of | ||||||
26 | Section 250; |
| |||||||
| |||||||
1 | (S) For taxable years ending on or after December | ||||||
2 | 31, 1997, in the case of a Subchapter S corporation, an | ||||||
3 | amount equal to all amounts of income allocable to a | ||||||
4 | shareholder subject to the Personal Property Tax | ||||||
5 | Replacement Income Tax imposed by subsections (c) and | ||||||
6 | (d) of Section 201 of this Act, including amounts | ||||||
7 | allocable to organizations exempt from federal income | ||||||
8 | tax by reason of Section 501(a) of the Internal | ||||||
9 | Revenue Code. This subparagraph (S) is exempt from the | ||||||
10 | provisions of Section 250; | ||||||
11 | (T) For taxable years 2001 and thereafter, for the | ||||||
12 | taxable year in which the bonus depreciation deduction | ||||||
13 | is taken on the taxpayer's federal income tax return | ||||||
14 | under subsection (k) of Section 168 of the Internal | ||||||
15 | Revenue Code and for each applicable taxable year | ||||||
16 | thereafter, an amount equal to "x", where: | ||||||
17 | (1) "y" equals the amount of the depreciation | ||||||
18 | deduction taken for the taxable year on the | ||||||
19 | taxpayer's federal income tax return on property | ||||||
20 | for which the bonus depreciation deduction was | ||||||
21 | taken in any year under subsection (k) of Section | ||||||
22 | 168 of the Internal Revenue Code, but not | ||||||
23 | including the bonus depreciation deduction; | ||||||
24 | (2) for taxable years ending on or before | ||||||
25 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
26 | and then divided by 70 (or "y" multiplied by |
| |||||||
| |||||||
1 | 0.429); and | ||||||
2 | (3) for taxable years ending after December | ||||||
3 | 31, 2005: | ||||||
4 | (i) for property on which a bonus | ||||||
5 | depreciation deduction of 30% of the adjusted | ||||||
6 | basis was taken, "x" equals "y" multiplied by | ||||||
7 | 30 and then divided by 70 (or "y" multiplied | ||||||
8 | by 0.429); | ||||||
9 | (ii) for property on which a bonus | ||||||
10 | depreciation deduction of 50% of the adjusted | ||||||
11 | basis was taken, "x" equals "y" multiplied by | ||||||
12 | 1.0; | ||||||
13 | (iii) for property on which a bonus | ||||||
14 | depreciation deduction of 100% of the adjusted | ||||||
15 | basis was taken in a taxable year ending on or | ||||||
16 | after December 31, 2021, "x" equals the | ||||||
17 | depreciation deduction that would be allowed | ||||||
18 | on that property if the taxpayer had made the | ||||||
19 | election under Section 168(k)(7) of the | ||||||
20 | Internal Revenue Code to not claim bonus | ||||||
21 | depreciation on that property; and | ||||||
22 | (iv) for property on which a bonus | ||||||
23 | depreciation deduction of a percentage other | ||||||
24 | than 30%, 50% or 100% of the adjusted basis | ||||||
25 | was taken in a taxable year ending on or after | ||||||
26 | December 31, 2021, "x" equals "y" multiplied |
| |||||||
| |||||||
1 | by 100 times the percentage bonus depreciation | ||||||
2 | on the property (that is, 100(bonus%)) and | ||||||
3 | then divided by 100 times 1 minus the | ||||||
4 | percentage bonus depreciation on the property | ||||||
5 | (that is, 100(1-bonus%)). | ||||||
6 | The aggregate amount deducted under this | ||||||
7 | subparagraph in all taxable years for any one piece of | ||||||
8 | property may not exceed the amount of the bonus | ||||||
9 | depreciation deduction taken on that property on the | ||||||
10 | taxpayer's federal income tax return under subsection | ||||||
11 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
12 | subparagraph (T) is exempt from the provisions of | ||||||
13 | Section 250; | ||||||
14 | (U) If the taxpayer sells, transfers, abandons, or | ||||||
15 | otherwise disposes of property for which the taxpayer | ||||||
16 | was required in any taxable year to make an addition | ||||||
17 | modification under subparagraph (E-10), then an amount | ||||||
18 | equal to that addition modification. | ||||||
19 | If the taxpayer continues to own property through | ||||||
20 | the last day of the last tax year for which a | ||||||
21 | subtraction is allowed with respect to that property | ||||||
22 | under subparagraph (T) and for which the taxpayer was | ||||||
23 | required in any taxable year to make an addition | ||||||
24 | modification under subparagraph (E-10), then an amount | ||||||
25 | equal to that addition modification. | ||||||
26 | The taxpayer is allowed to take the deduction |
| |||||||
| |||||||
1 | under this subparagraph only once with respect to any | ||||||
2 | one piece of property. | ||||||
3 | This subparagraph (U) is exempt from the | ||||||
4 | provisions of Section 250; | ||||||
5 | (V) The amount of: (i) any interest income (net of | ||||||
6 | the deductions allocable thereto) taken into account | ||||||
7 | for the taxable year with respect to a transaction | ||||||
8 | with a taxpayer that is required to make an addition | ||||||
9 | modification with respect to such transaction under | ||||||
10 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
11 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
12 | the amount of such addition modification, (ii) any | ||||||
13 | income from intangible property (net of the deductions | ||||||
14 | allocable thereto) taken into account for the taxable | ||||||
15 | year with respect to a transaction with a taxpayer | ||||||
16 | that is required to make an addition modification with | ||||||
17 | respect to such transaction under Section | ||||||
18 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
19 | 203(d)(2)(D-8), but not to exceed the amount of such | ||||||
20 | addition modification, and (iii) any insurance premium | ||||||
21 | income (net of deductions allocable thereto) taken | ||||||
22 | into account for the taxable year with respect to a | ||||||
23 | transaction with a taxpayer that is required to make | ||||||
24 | an addition modification with respect to such | ||||||
25 | transaction under Section 203(a)(2)(D-19), Section | ||||||
26 | 203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section |
| |||||||
| |||||||
1 | 203(d)(2)(D-9), but not to exceed the amount of that | ||||||
2 | addition modification. This subparagraph (V) is exempt | ||||||
3 | from the provisions of Section 250; | ||||||
4 | (W) An amount equal to the interest income taken | ||||||
5 | into account for the taxable year (net of the | ||||||
6 | deductions allocable thereto) with respect to | ||||||
7 | transactions with (i) a foreign person who would be a | ||||||
8 | member of the taxpayer's unitary business group but | ||||||
9 | for the fact that the foreign person's business | ||||||
10 | activity outside the United States is 80% or more of | ||||||
11 | that person's total business activity and (ii) for | ||||||
12 | taxable years ending on or after December 31, 2008, to | ||||||
13 | a person who would be a member of the same unitary | ||||||
14 | business group but for the fact that the person is | ||||||
15 | prohibited under Section 1501(a)(27) from being | ||||||
16 | included in the unitary business group because he or | ||||||
17 | she is ordinarily required to apportion business | ||||||
18 | income under different subsections of Section 304, but | ||||||
19 | not to exceed the addition modification required to be | ||||||
20 | made for the same taxable year under Section | ||||||
21 | 203(b)(2)(E-12) for interest paid, accrued, or | ||||||
22 | incurred, directly or indirectly, to the same person. | ||||||
23 | This subparagraph (W) is exempt from the provisions of | ||||||
24 | Section 250; | ||||||
25 | (X) An amount equal to the income from intangible | ||||||
26 | property taken into account for the taxable year (net |
| |||||||
| |||||||
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 | ||||||
4 | for the fact that the foreign person's business | ||||||
5 | activity outside the United States is 80% or more of | ||||||
6 | that person's total business activity and (ii) for | ||||||
7 | taxable years ending on or after December 31, 2008, to | ||||||
8 | a person who would be a member of the same unitary | ||||||
9 | business group but for the fact that the person is | ||||||
10 | prohibited under Section 1501(a)(27) from being | ||||||
11 | included in the unitary business group because he or | ||||||
12 | she is ordinarily required to apportion business | ||||||
13 | income under different subsections of Section 304, but | ||||||
14 | not to exceed the addition modification required to be | ||||||
15 | made for the same taxable year under Section | ||||||
16 | 203(b)(2)(E-13) for intangible expenses and costs | ||||||
17 | paid, accrued, or incurred, directly or indirectly, to | ||||||
18 | the same foreign person. This subparagraph (X) is | ||||||
19 | exempt from the provisions of Section 250; | ||||||
20 | (Y) For taxable years ending on or after December | ||||||
21 | 31, 2011, in the case of a taxpayer who was required to | ||||||
22 | add back any insurance premiums under Section | ||||||
23 | 203(b)(2)(E-14), such taxpayer may elect to subtract | ||||||
24 | that part of a reimbursement received from the | ||||||
25 | insurance company equal to the amount of the expense | ||||||
26 | or loss (including expenses incurred by the insurance |
| |||||||
| |||||||
1 | company) that would have been taken into account as a | ||||||
2 | deduction for federal income tax purposes if the | ||||||
3 | expense or loss had been uninsured. If a taxpayer | ||||||
4 | makes the election provided for by this subparagraph | ||||||
5 | (Y), the insurer to which the premiums were paid must | ||||||
6 | add back to income the amount subtracted by the | ||||||
7 | taxpayer pursuant to this subparagraph (Y). This | ||||||
8 | subparagraph (Y) is exempt from the provisions of | ||||||
9 | Section 250; | ||||||
10 | (Z) The difference between the nondeductible | ||||||
11 | controlled foreign corporation dividends under Section | ||||||
12 | 965(e)(3) of the Internal Revenue Code over the | ||||||
13 | taxable income of the taxpayer, computed without | ||||||
14 | regard to Section 965(e)(2)(A) of the Internal Revenue | ||||||
15 | Code, and without regard to any net operating loss | ||||||
16 | deduction. This subparagraph (Z) is exempt from the | ||||||
17 | provisions of Section 250; and | ||||||
18 | (AA) For taxable years beginning on or after | ||||||
19 | January 1, 2023, for any cannabis establishment | ||||||
20 | operating in this State and licensed under the | ||||||
21 | Cannabis Regulation and Tax Act or any cannabis | ||||||
22 | cultivation center or medical cannabis dispensing | ||||||
23 | organization operating in this State and licensed | ||||||
24 | under the Compassionate Use of Medical Cannabis | ||||||
25 | Program Act, an amount equal to the deductions that | ||||||
26 | were disallowed under Section 280E of the Internal |
| |||||||
| |||||||
1 | Revenue Code for the taxable year and that would not be | ||||||
2 | added back under this subsection. The provisions of | ||||||
3 | this subparagraph (AA) are exempt from the provisions | ||||||
4 | of Section 250 ; and . | ||||||
5 | (BB) For taxable years beginning on or after | ||||||
6 | January 1, 2025, an amount of up to $50,000 per tax | ||||||
7 | year contributed by the taxpayer to a small business | ||||||
8 | asset purchase account during the tax year, plus all | ||||||
9 | interest earned on those accounts during the tax year; | ||||||
10 | as used in this subparagraph (BB), "small business | ||||||
11 | asset purchase account" means an account established | ||||||
12 | by a taxpayer, the proceeds of which are used to | ||||||
13 | purchase property that is used primarily in Illinois | ||||||
14 | and for which a federal income tax deduction is | ||||||
15 | claimed under Section 179 of the Internal Revenue | ||||||
16 | Code. | ||||||
17 | (3) Special rule. For purposes of paragraph (2)(A), | ||||||
18 | "gross income" in the case of a life insurance company, | ||||||
19 | for tax years ending on and after December 31, 1994, and | ||||||
20 | prior to December 31, 2011, shall mean the gross | ||||||
21 | investment income for the taxable year and, for tax years | ||||||
22 | ending on or after December 31, 2011, shall mean all | ||||||
23 | amounts included in life insurance gross income under | ||||||
24 | Section 803(a)(3) of the Internal Revenue Code.
| ||||||
25 | (c) Trusts and estates. |
| |||||||
| |||||||
1 | (1) In general. In the case of a trust or estate, base | ||||||
2 | income means an amount equal to the taxpayer's taxable | ||||||
3 | income for the taxable year as modified by paragraph (2). | ||||||
4 | (2) Modifications. Subject to the provisions of | ||||||
5 | paragraph (3), the taxable income referred to in paragraph | ||||||
6 | (1) shall be modified by adding thereto the sum of the | ||||||
7 | following amounts: | ||||||
8 | (A) An amount equal to all amounts paid or accrued | ||||||
9 | to the taxpayer as interest or dividends during the | ||||||
10 | taxable year to the extent excluded from gross income | ||||||
11 | in the computation of taxable income; | ||||||
12 | (B) In the case of (i) an estate, $600; (ii) a | ||||||
13 | trust which, under its governing instrument, is | ||||||
14 | required to distribute all of its income currently, | ||||||
15 | $300; and (iii) any other trust, $100, but in each such | ||||||
16 | case, only to the extent such amount was deducted in | ||||||
17 | the computation of taxable income; | ||||||
18 | (C) 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 taxable income for the taxable | ||||||
21 | year; | ||||||
22 | (D) The amount of any net operating loss deduction | ||||||
23 | taken in arriving at taxable income, other than a net | ||||||
24 | operating loss carried forward from a taxable year | ||||||
25 | ending prior to December 31, 1986; | ||||||
26 | (E) For taxable years in which a net operating |
| |||||||
| |||||||
1 | loss carryback or carryforward from a taxable year | ||||||
2 | ending prior to December 31, 1986 is an element of | ||||||
3 | taxable income under paragraph (1) of subsection (e) | ||||||
4 | or subparagraph (E) of paragraph (2) of subsection | ||||||
5 | (e), the amount by which addition modifications other | ||||||
6 | than those provided by this subparagraph (E) exceeded | ||||||
7 | subtraction modifications in such taxable year, with | ||||||
8 | the following limitations applied in the order that | ||||||
9 | they are listed: | ||||||
10 | (i) the addition modification relating to the | ||||||
11 | net operating loss carried back or forward to the | ||||||
12 | taxable year from any taxable year ending prior to | ||||||
13 | December 31, 1986 shall be reduced by the amount | ||||||
14 | of addition modification under this subparagraph | ||||||
15 | (E) which related to that net operating loss and | ||||||
16 | which was taken into account in calculating the | ||||||
17 | base income of an earlier taxable year, and | ||||||
18 | (ii) the addition modification relating to the | ||||||
19 | net operating loss carried back or forward to the | ||||||
20 | taxable year from any taxable year ending prior to | ||||||
21 | December 31, 1986 shall not exceed the amount of | ||||||
22 | such carryback or carryforward; | ||||||
23 | For taxable years in which there is a net | ||||||
24 | operating loss carryback or carryforward from more | ||||||
25 | than one other taxable year ending prior to December | ||||||
26 | 31, 1986, the addition modification provided in this |
| |||||||
| |||||||
1 | subparagraph (E) shall be the sum of the amounts | ||||||
2 | computed independently under the preceding provisions | ||||||
3 | of this subparagraph (E) for each such taxable year; | ||||||
4 | (F) For taxable years ending on or after January | ||||||
5 | 1, 1989, an amount equal to the tax deducted pursuant | ||||||
6 | to Section 164 of the Internal Revenue Code if the | ||||||
7 | trust or estate is claiming the same tax for purposes | ||||||
8 | of the Illinois foreign tax credit under Section 601 | ||||||
9 | of this Act; | ||||||
10 | (G) An amount equal to the amount of the capital | ||||||
11 | gain deduction allowable under the Internal Revenue | ||||||
12 | Code, to the extent deducted from gross income in the | ||||||
13 | computation of taxable income; | ||||||
14 | (G-5) For taxable years ending after December 31, | ||||||
15 | 1997, an amount equal to any eligible remediation | ||||||
16 | costs that the trust or estate deducted in computing | ||||||
17 | adjusted gross income and for which the trust or | ||||||
18 | estate claims a credit under subsection (l) of Section | ||||||
19 | 201; | ||||||
20 | (G-10) For taxable years 2001 and thereafter, an | ||||||
21 | amount equal to the bonus depreciation deduction taken | ||||||
22 | on the taxpayer's federal income tax return for the | ||||||
23 | taxable year under subsection (k) of Section 168 of | ||||||
24 | the Internal Revenue Code; and | ||||||
25 | (G-11) If the taxpayer sells, transfers, abandons, | ||||||
26 | or otherwise disposes of property for which the |
| |||||||
| |||||||
1 | taxpayer was required in any taxable year to make an | ||||||
2 | addition modification under subparagraph (G-10), then | ||||||
3 | an amount equal to the aggregate amount of the | ||||||
4 | deductions taken in all taxable years under | ||||||
5 | subparagraph (R) with respect to that property. | ||||||
6 | If the taxpayer continues to own property through | ||||||
7 | the last day of the last tax year for which a | ||||||
8 | subtraction is allowed with respect to that property | ||||||
9 | under subparagraph (R) and for which the taxpayer was | ||||||
10 | allowed in any taxable year to make a subtraction | ||||||
11 | modification under subparagraph (R), then an amount | ||||||
12 | equal to that subtraction modification. | ||||||
13 | The taxpayer is required to make the addition | ||||||
14 | modification under this subparagraph only once with | ||||||
15 | respect to any one piece of property; | ||||||
16 | (G-12) An amount equal to the amount otherwise | ||||||
17 | allowed as a deduction in computing base income for | ||||||
18 | interest paid, accrued, or incurred, directly or | ||||||
19 | indirectly, (i) for taxable years ending on or after | ||||||
20 | December 31, 2004, to a foreign person who would be a | ||||||
21 | member of the same unitary business group but for the | ||||||
22 | fact that the foreign person's business activity | ||||||
23 | outside the United States is 80% or more of the foreign | ||||||
24 | person's total business activity and (ii) for taxable | ||||||
25 | years ending on or after December 31, 2008, to a person | ||||||
26 | who would be a member of the same unitary business |
| |||||||
| |||||||
1 | group but for the fact that the person is prohibited | ||||||
2 | under Section 1501(a)(27) from being included in the | ||||||
3 | unitary business group because he or she is ordinarily | ||||||
4 | required to apportion business income under different | ||||||
5 | subsections of Section 304. The addition modification | ||||||
6 | required by this subparagraph shall be reduced to the | ||||||
7 | extent that dividends were included in base income of | ||||||
8 | the unitary group for the same taxable year and | ||||||
9 | received by the taxpayer or by a member of the | ||||||
10 | taxpayer's unitary business group (including amounts | ||||||
11 | included in gross income pursuant to Sections 951 | ||||||
12 | through 964 of the Internal Revenue Code and amounts | ||||||
13 | included in gross income under Section 78 of the | ||||||
14 | Internal Revenue Code) with respect to the stock of | ||||||
15 | the same person to whom the interest was paid, | ||||||
16 | accrued, or incurred. | ||||||
17 | This paragraph shall not apply to the following: | ||||||
18 | (i) an item of interest paid, accrued, or | ||||||
19 | incurred, directly or indirectly, to a person who | ||||||
20 | is subject in a foreign country or state, other | ||||||
21 | than a state which requires mandatory unitary | ||||||
22 | reporting, to a tax on or measured by net income | ||||||
23 | with respect to such interest; or | ||||||
24 | (ii) an item of interest paid, accrued, or | ||||||
25 | incurred, directly or indirectly, to a person if | ||||||
26 | the taxpayer can establish, based on a |
| |||||||
| |||||||
1 | preponderance of the evidence, both of the | ||||||
2 | following: | ||||||
3 | (a) the person, during the same taxable | ||||||
4 | year, paid, accrued, or incurred, the interest | ||||||
5 | to a person that is not a related member, and | ||||||
6 | (b) the transaction giving rise to the | ||||||
7 | interest expense between the taxpayer and the | ||||||
8 | person did not have as a principal purpose the | ||||||
9 | avoidance of Illinois income tax, and is paid | ||||||
10 | pursuant to a contract or agreement that | ||||||
11 | reflects an arm's-length interest rate and | ||||||
12 | terms; or | ||||||
13 | (iii) the taxpayer can establish, based on | ||||||
14 | clear and convincing evidence, that the interest | ||||||
15 | paid, accrued, or incurred relates to a contract | ||||||
16 | or agreement entered into at arm's-length rates | ||||||
17 | and terms and the principal purpose for the | ||||||
18 | payment is not federal or Illinois tax avoidance; | ||||||
19 | or | ||||||
20 | (iv) an item of interest paid, accrued, or | ||||||
21 | incurred, directly or indirectly, to a person if | ||||||
22 | the taxpayer establishes by clear and convincing | ||||||
23 | evidence that the adjustments are unreasonable; or | ||||||
24 | if the taxpayer and the Director agree in writing | ||||||
25 | to the application or use of an alternative method | ||||||
26 | of apportionment under Section 304(f). |
| |||||||
| |||||||
1 | Nothing in this subsection shall preclude the | ||||||
2 | Director from making any other adjustment | ||||||
3 | otherwise allowed under Section 404 of this Act | ||||||
4 | for any tax year beginning after the effective | ||||||
5 | date of this amendment provided such adjustment is | ||||||
6 | made pursuant to regulation adopted by the | ||||||
7 | Department and such regulations provide methods | ||||||
8 | and standards by which the Department will utilize | ||||||
9 | its authority under Section 404 of this Act; | ||||||
10 | (G-13) An amount equal to the amount of intangible | ||||||
11 | expenses and costs otherwise allowed as a deduction in | ||||||
12 | computing base income, and that were paid, accrued, or | ||||||
13 | incurred, directly or indirectly, (i) for taxable | ||||||
14 | years ending on or after December 31, 2004, to a | ||||||
15 | foreign person who would be a member of the same | ||||||
16 | unitary business group but for the fact that the | ||||||
17 | foreign person's business activity outside the United | ||||||
18 | States is 80% or more of that person's total business | ||||||
19 | activity and (ii) for taxable years ending on or after | ||||||
20 | December 31, 2008, to a person who would be a member of | ||||||
21 | the same unitary business group but for the fact that | ||||||
22 | the person is prohibited under Section 1501(a)(27) | ||||||
23 | from being included in the unitary business group | ||||||
24 | because he or she is ordinarily required to apportion | ||||||
25 | business income under different subsections of Section | ||||||
26 | 304. The addition modification required by this |
| |||||||
| |||||||
1 | subparagraph shall be reduced to the extent that | ||||||
2 | dividends were included in base income of the unitary | ||||||
3 | group for the same taxable year and received by the | ||||||
4 | taxpayer or by a member of the taxpayer's unitary | ||||||
5 | business group (including amounts included in gross | ||||||
6 | income pursuant to Sections 951 through 964 of the | ||||||
7 | Internal Revenue Code and amounts included in gross | ||||||
8 | income under Section 78 of the Internal Revenue Code) | ||||||
9 | with respect to the stock of the same person to whom | ||||||
10 | the intangible expenses and costs were directly or | ||||||
11 | indirectly paid, incurred, or accrued. The preceding | ||||||
12 | sentence shall not apply to the extent that the same | ||||||
13 | dividends caused a reduction to the addition | ||||||
14 | modification required under Section 203(c)(2)(G-12) of | ||||||
15 | this Act. As used in this subparagraph, the term | ||||||
16 | "intangible expenses and costs" includes: (1) | ||||||
17 | expenses, losses, and costs for or related to the | ||||||
18 | direct or indirect acquisition, use, maintenance or | ||||||
19 | management, ownership, sale, exchange, or any other | ||||||
20 | disposition of intangible property; (2) losses | ||||||
21 | incurred, directly or indirectly, from factoring | ||||||
22 | transactions or discounting transactions; (3) royalty, | ||||||
23 | patent, technical, and copyright fees; (4) licensing | ||||||
24 | fees; and (5) other similar expenses and costs. For | ||||||
25 | purposes of this subparagraph, "intangible property" | ||||||
26 | includes patents, patent applications, trade names, |
| |||||||
| |||||||
1 | trademarks, service marks, copyrights, mask works, | ||||||
2 | trade secrets, and similar types of intangible assets. | ||||||
3 | This paragraph shall not apply to the following: | ||||||
4 | (i) any item of intangible expenses or costs | ||||||
5 | paid, accrued, or incurred, directly or | ||||||
6 | indirectly, from a transaction with 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 item; or | ||||||
11 | (ii) any item of intangible expense or cost | ||||||
12 | paid, accrued, or incurred, directly or | ||||||
13 | indirectly, if the taxpayer can establish, based | ||||||
14 | on a preponderance of the evidence, both of the | ||||||
15 | following: | ||||||
16 | (a) the person during the same taxable | ||||||
17 | year paid, accrued, or incurred, the | ||||||
18 | intangible expense or cost to a person that is | ||||||
19 | not a related member, and | ||||||
20 | (b) the transaction giving rise to the | ||||||
21 | intangible expense or cost between the | ||||||
22 | taxpayer and the person did not have as a | ||||||
23 | principal purpose the avoidance of Illinois | ||||||
24 | income tax, and is paid pursuant to a contract | ||||||
25 | or agreement that reflects arm's-length terms; | ||||||
26 | or |
| |||||||
| |||||||
1 | (iii) any item of intangible expense or cost | ||||||
2 | paid, accrued, or incurred, directly or | ||||||
3 | indirectly, from a transaction with a person if | ||||||
4 | the taxpayer establishes by clear and convincing | ||||||
5 | evidence, that the adjustments are unreasonable; | ||||||
6 | or if the taxpayer and the Director agree in | ||||||
7 | writing to the application or use of an | ||||||
8 | alternative method of apportionment under Section | ||||||
9 | 304(f); | ||||||
10 | Nothing in this subsection shall preclude the | ||||||
11 | Director from making any other adjustment | ||||||
12 | otherwise allowed under Section 404 of this Act | ||||||
13 | for any tax year beginning after the effective | ||||||
14 | date of this amendment provided such adjustment is | ||||||
15 | made pursuant to regulation adopted by the | ||||||
16 | Department and such regulations provide methods | ||||||
17 | and standards by which the Department will utilize | ||||||
18 | its authority under Section 404 of this Act; | ||||||
19 | (G-14) For taxable years ending on or after | ||||||
20 | December 31, 2008, an amount equal to the amount of | ||||||
21 | insurance premium expenses and costs otherwise allowed | ||||||
22 | as a deduction in computing base income, and that were | ||||||
23 | paid, accrued, or incurred, directly or indirectly, to | ||||||
24 | a person who would be a member of the same unitary | ||||||
25 | business group but for the fact that the person is | ||||||
26 | prohibited under Section 1501(a)(27) from being |
| |||||||
| |||||||
1 | included in the unitary business group because he or | ||||||
2 | she is ordinarily required to apportion business | ||||||
3 | income under different subsections of Section 304. The | ||||||
4 | addition modification required by this subparagraph | ||||||
5 | shall be reduced to the extent that dividends were | ||||||
6 | included in base income of the unitary group for the | ||||||
7 | same taxable year and received by the taxpayer or by a | ||||||
8 | member of the taxpayer's unitary business group | ||||||
9 | (including amounts included in gross income under | ||||||
10 | Sections 951 through 964 of the Internal Revenue Code | ||||||
11 | and amounts included in gross income under Section 78 | ||||||
12 | of the Internal Revenue Code) with respect to the | ||||||
13 | stock of the same person to whom the premiums and costs | ||||||
14 | were directly or indirectly paid, incurred, or | ||||||
15 | accrued. The preceding sentence does not apply to the | ||||||
16 | extent that the same dividends caused a reduction to | ||||||
17 | the addition modification required under Section | ||||||
18 | 203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this | ||||||
19 | Act; | ||||||
20 | (G-15) An amount equal to the credit allowable to | ||||||
21 | the taxpayer under Section 218(a) of this Act, | ||||||
22 | determined without regard to Section 218(c) of this | ||||||
23 | Act; | ||||||
24 | (G-16) For taxable years ending on or after | ||||||
25 | December 31, 2017, an amount equal to the deduction | ||||||
26 | allowed under Section 199 of the Internal Revenue Code |
| |||||||
| |||||||
1 | for the taxable year; | ||||||
2 | (G-17) An amount that is withdrawn by the taxpayer | ||||||
3 | from a small business asset purchase account during | ||||||
4 | the taxable year and that is not used for the purchase | ||||||
5 | of qualified property; as used in this subparagraph | ||||||
6 | (G-17), "qualified property" means property that is | ||||||
7 | used predominantly in Illinois and for which a | ||||||
8 | deduction under Section 179 of the Internal Revenue | ||||||
9 | Code is claimed for the tax year in which the amount is | ||||||
10 | withdrawn from the small business asset purchase | ||||||
11 | account; amounts that are subject to the addition | ||||||
12 | modification under this subparagraph (G-17) are also | ||||||
13 | subject to the 10% penalty for ineligible use under | ||||||
14 | Section 3-3.5 of the Uniform Penalty and Interest Act; | ||||||
15 | and by deducting from the total so obtained the sum of the | ||||||
16 | following amounts: | ||||||
17 | (H) An amount equal to all amounts included in | ||||||
18 | such total pursuant to the provisions of Sections | ||||||
19 | 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 408 | ||||||
20 | of the Internal Revenue Code or included in such total | ||||||
21 | as distributions under the provisions of any | ||||||
22 | retirement or disability plan for employees of any | ||||||
23 | governmental agency or unit, or retirement payments to | ||||||
24 | retired partners, which payments are excluded in | ||||||
25 | computing net earnings from self employment by Section | ||||||
26 | 1402 of the Internal Revenue Code and regulations |
| |||||||
| |||||||
1 | adopted pursuant thereto; | ||||||
2 | (I) The valuation limitation amount; | ||||||
3 | (J) An amount equal to the amount of any tax | ||||||
4 | imposed by this Act which was refunded to the taxpayer | ||||||
5 | and included in such total for the taxable year; | ||||||
6 | (K) An amount equal to all amounts included in | ||||||
7 | taxable income as modified by subparagraphs (A), (B), | ||||||
8 | (C), (D), (E), (F) and (G) which are exempt from | ||||||
9 | taxation by this State either by reason of its | ||||||
10 | statutes or Constitution or by reason of the | ||||||
11 | Constitution, treaties or statutes of the United | ||||||
12 | States; provided that, in the case of any statute of | ||||||
13 | this State that exempts income derived from bonds or | ||||||
14 | other obligations from the tax imposed under this Act, | ||||||
15 | the amount exempted shall be the interest net of bond | ||||||
16 | premium amortization; | ||||||
17 | (L) With the exception of any amounts subtracted | ||||||
18 | under subparagraph (K), an amount equal to the sum of | ||||||
19 | all amounts disallowed as deductions by (i) Sections | ||||||
20 | 171(a)(2) and 265(a)(2) of the Internal Revenue Code, | ||||||
21 | and all amounts of expenses allocable to interest and | ||||||
22 | disallowed as deductions by Section 265(a)(1) of the | ||||||
23 | Internal Revenue Code; and (ii) for taxable years | ||||||
24 | ending on or after August 13, 1999, Sections | ||||||
25 | 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the | ||||||
26 | Internal Revenue Code, plus, (iii) for taxable years |
| |||||||
| |||||||
1 | ending on or after December 31, 2011, Section | ||||||
2 | 45G(e)(3) of the Internal Revenue Code and, for | ||||||
3 | taxable years ending on or after December 31, 2008, | ||||||
4 | any amount included in gross income under Section 87 | ||||||
5 | of the Internal Revenue Code; the provisions of this | ||||||
6 | subparagraph are exempt from the provisions of Section | ||||||
7 | 250; | ||||||
8 | (M) An amount equal to those dividends included in | ||||||
9 | such total which were paid by a corporation which | ||||||
10 | conducts business operations in a River Edge | ||||||
11 | Redevelopment Zone or zones created under the River | ||||||
12 | Edge Redevelopment Zone Act and conducts substantially | ||||||
13 | all of its operations in a River Edge Redevelopment | ||||||
14 | Zone or zones. This subparagraph (M) is exempt from | ||||||
15 | the provisions of Section 250; | ||||||
16 | (N) An amount equal to any contribution made to a | ||||||
17 | job training project established pursuant to the Tax | ||||||
18 | Increment Allocation Redevelopment Act; | ||||||
19 | (O) An amount equal to those dividends included in | ||||||
20 | such total that were paid by a corporation that | ||||||
21 | conducts business operations in a federally designated | ||||||
22 | Foreign Trade Zone or Sub-Zone and that is designated | ||||||
23 | a High Impact Business located in Illinois; provided | ||||||
24 | that dividends eligible for the deduction provided in | ||||||
25 | subparagraph (M) of paragraph (2) of this subsection | ||||||
26 | shall not be eligible for the deduction provided under |
| |||||||
| |||||||
1 | this subparagraph (O); | ||||||
2 | (P) An amount equal to the amount of the deduction | ||||||
3 | used to compute the federal income tax credit for | ||||||
4 | restoration of substantial amounts held under claim of | ||||||
5 | right for the taxable year pursuant to Section 1341 of | ||||||
6 | the Internal Revenue Code; | ||||||
7 | (Q) For taxable year 1999 and thereafter, an | ||||||
8 | amount equal to the amount of any (i) distributions, | ||||||
9 | to the extent includible in gross income for federal | ||||||
10 | income tax purposes, made to the taxpayer because of | ||||||
11 | his or her status as a victim of persecution for racial | ||||||
12 | or religious reasons by Nazi Germany or any other Axis | ||||||
13 | regime or as an heir of the victim and (ii) items of | ||||||
14 | income, to the extent includible in gross income for | ||||||
15 | federal income tax purposes, attributable to, derived | ||||||
16 | from or in any way related to assets stolen from, | ||||||
17 | hidden from, or otherwise lost to a victim of | ||||||
18 | persecution for racial or religious reasons by Nazi | ||||||
19 | Germany or any other Axis regime immediately prior to, | ||||||
20 | during, and immediately after World War II, including, | ||||||
21 | but not limited to, interest on the proceeds | ||||||
22 | receivable as insurance under policies issued to a | ||||||
23 | victim of persecution for racial or religious reasons | ||||||
24 | by Nazi Germany or any other Axis regime by European | ||||||
25 | insurance companies immediately prior to and during | ||||||
26 | World War II; provided, however, this subtraction from |
| |||||||
| |||||||
1 | federal adjusted gross income does not apply to assets | ||||||
2 | acquired with such assets or with the proceeds from | ||||||
3 | the sale of such assets; provided, further, this | ||||||
4 | paragraph shall only apply to a taxpayer who was the | ||||||
5 | first recipient of such assets after their recovery | ||||||
6 | and who is a victim of persecution for racial or | ||||||
7 | religious reasons by Nazi Germany or any other Axis | ||||||
8 | regime or as an heir of the victim. The amount of and | ||||||
9 | the eligibility for any public assistance, benefit, or | ||||||
10 | similar entitlement is not affected by the inclusion | ||||||
11 | of items (i) and (ii) of this paragraph in gross income | ||||||
12 | for federal income tax purposes. This paragraph is | ||||||
13 | exempt from the provisions of Section 250; | ||||||
14 | (R) For taxable years 2001 and thereafter, for the | ||||||
15 | taxable year in which the bonus depreciation deduction | ||||||
16 | is taken on the taxpayer's federal income tax return | ||||||
17 | under subsection (k) of Section 168 of the Internal | ||||||
18 | Revenue Code and for each applicable taxable year | ||||||
19 | thereafter, an amount equal to "x", where: | ||||||
20 | (1) "y" equals the amount of the depreciation | ||||||
21 | deduction taken for the taxable year on the | ||||||
22 | taxpayer's federal income tax return on property | ||||||
23 | for which the bonus depreciation deduction was | ||||||
24 | taken in any year under subsection (k) of Section | ||||||
25 | 168 of the Internal Revenue Code, but not | ||||||
26 | including the bonus depreciation deduction; |
| |||||||
| |||||||
1 | (2) for taxable years ending on or before | ||||||
2 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
3 | and then divided by 70 (or "y" multiplied by | ||||||
4 | 0.429); and | ||||||
5 | (3) for taxable years ending after December | ||||||
6 | 31, 2005: | ||||||
7 | (i) for property on which a bonus | ||||||
8 | depreciation deduction of 30% of the adjusted | ||||||
9 | basis was taken, "x" equals "y" multiplied by | ||||||
10 | 30 and then divided by 70 (or "y" multiplied | ||||||
11 | by 0.429); | ||||||
12 | (ii) for property on which a bonus | ||||||
13 | depreciation deduction of 50% of the adjusted | ||||||
14 | basis was taken, "x" equals "y" multiplied by | ||||||
15 | 1.0; | ||||||
16 | (iii) for property on which a bonus | ||||||
17 | depreciation deduction of 100% of the adjusted | ||||||
18 | basis was taken in a taxable year ending on or | ||||||
19 | after December 31, 2021, "x" equals the | ||||||
20 | depreciation deduction that would be allowed | ||||||
21 | on that property if the taxpayer had made the | ||||||
22 | election under Section 168(k)(7) of the | ||||||
23 | Internal Revenue Code to not claim bonus | ||||||
24 | depreciation on that property; and | ||||||
25 | (iv) for property on which a bonus | ||||||
26 | depreciation deduction of a percentage other |
| |||||||
| |||||||
1 | than 30%, 50% or 100% of the adjusted basis | ||||||
2 | was taken in a taxable year ending on or after | ||||||
3 | December 31, 2021, "x" equals "y" multiplied | ||||||
4 | by 100 times the percentage bonus depreciation | ||||||
5 | on the property (that is, 100(bonus%)) and | ||||||
6 | then divided by 100 times 1 minus the | ||||||
7 | percentage bonus depreciation on the property | ||||||
8 | (that is, 100(1-bonus%)). | ||||||
9 | The aggregate amount deducted under this | ||||||
10 | subparagraph in all taxable years for any one piece of | ||||||
11 | property may not exceed the amount of the bonus | ||||||
12 | depreciation deduction taken on that property on the | ||||||
13 | taxpayer's federal income tax return under subsection | ||||||
14 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
15 | subparagraph (R) is exempt from the provisions of | ||||||
16 | Section 250; | ||||||
17 | (S) If the taxpayer sells, transfers, abandons, or | ||||||
18 | otherwise disposes of property 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 | If the taxpayer continues to own property through | ||||||
23 | the last day of the last tax year for which a | ||||||
24 | subtraction is allowed with respect to that property | ||||||
25 | under subparagraph (R) and for which the taxpayer was | ||||||
26 | required in any taxable year to make an addition |
| |||||||
| |||||||
1 | modification under subparagraph (G-10), then an amount | ||||||
2 | equal to that addition modification. | ||||||
3 | The taxpayer is allowed to take the deduction | ||||||
4 | under this subparagraph only once with respect to any | ||||||
5 | one piece of property. | ||||||
6 | This subparagraph (S) is exempt from the | ||||||
7 | provisions of Section 250; | ||||||
8 | (T) The amount of (i) any interest income (net of | ||||||
9 | the deductions allocable thereto) taken into account | ||||||
10 | for the taxable year with respect to a transaction | ||||||
11 | with a taxpayer that is required to make an addition | ||||||
12 | modification with respect to such transaction under | ||||||
13 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
14 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
15 | the amount of such addition modification and (ii) any | ||||||
16 | income from intangible property (net of the deductions | ||||||
17 | allocable thereto) taken into account for the taxable | ||||||
18 | year with respect to a transaction with a taxpayer | ||||||
19 | that is required to make an addition modification with | ||||||
20 | respect to such transaction under Section | ||||||
21 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
22 | 203(d)(2)(D-8), but not to exceed the amount of such | ||||||
23 | addition modification. This subparagraph (T) is exempt | ||||||
24 | from the provisions of Section 250; | ||||||
25 | (U) An amount equal to the interest income taken | ||||||
26 | into account for the taxable year (net of the |
| |||||||
| |||||||
1 | 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 | ||||||
4 | for the fact 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(c)(2)(G-12) for | ||||||
16 | interest paid, accrued, or incurred, directly or | ||||||
17 | indirectly, to the same person. This subparagraph (U) | ||||||
18 | is exempt from the provisions of Section 250; | ||||||
19 | (V) An amount equal to the income from intangible | ||||||
20 | property taken into account for the taxable year (net | ||||||
21 | of the deductions allocable thereto) with respect to | ||||||
22 | transactions with (i) a foreign person who would be a | ||||||
23 | member of the taxpayer's unitary business group but | ||||||
24 | for the fact that the foreign person's business | ||||||
25 | activity outside the United States is 80% or more of | ||||||
26 | that person's total business activity and (ii) for |
| |||||||
| |||||||
1 | taxable years ending on or after December 31, 2008, to | ||||||
2 | a person who would be a member of the same unitary | ||||||
3 | business group but for the fact that the person is | ||||||
4 | prohibited under Section 1501(a)(27) from being | ||||||
5 | included in the unitary business group because he or | ||||||
6 | she is ordinarily required to apportion business | ||||||
7 | income under different subsections of Section 304, but | ||||||
8 | not to exceed the addition modification required to be | ||||||
9 | made for the same taxable year under Section | ||||||
10 | 203(c)(2)(G-13) for intangible expenses and costs | ||||||
11 | paid, accrued, or incurred, directly or indirectly, to | ||||||
12 | the same foreign person. This subparagraph (V) is | ||||||
13 | exempt from the provisions of Section 250; | ||||||
14 | (W) in the case of an estate, an amount equal to | ||||||
15 | all amounts included in such total pursuant to the | ||||||
16 | provisions of Section 111 of the Internal Revenue Code | ||||||
17 | as a recovery of items previously deducted by the | ||||||
18 | decedent from adjusted gross income in the computation | ||||||
19 | of taxable income. This subparagraph (W) is exempt | ||||||
20 | from Section 250; | ||||||
21 | (X) an amount equal to the refund included in such | ||||||
22 | total of any tax deducted for federal income tax | ||||||
23 | purposes, to the extent that deduction was added back | ||||||
24 | under subparagraph (F). This subparagraph (X) is | ||||||
25 | exempt from the provisions of Section 250; | ||||||
26 | (Y) For taxable years ending on or after December |
| |||||||
| |||||||
1 | 31, 2011, in the case of a taxpayer who was required to | ||||||
2 | add back any insurance premiums under Section | ||||||
3 | 203(c)(2)(G-14), such taxpayer may elect to subtract | ||||||
4 | that part of a reimbursement received from the | ||||||
5 | insurance company equal to the amount of the expense | ||||||
6 | or loss (including expenses incurred by the insurance | ||||||
7 | company) that would have been taken into account as a | ||||||
8 | deduction for federal income tax purposes if the | ||||||
9 | expense or loss had been uninsured. If a taxpayer | ||||||
10 | makes the election provided for by this subparagraph | ||||||
11 | (Y), the insurer to which the premiums were paid must | ||||||
12 | add back to income the amount subtracted by the | ||||||
13 | taxpayer pursuant to this subparagraph (Y). This | ||||||
14 | subparagraph (Y) is exempt from the provisions of | ||||||
15 | Section 250; | ||||||
16 | (Z) For taxable years beginning after December 31, | ||||||
17 | 2018 and before January 1, 2026, the amount of excess | ||||||
18 | business loss of the taxpayer disallowed as a | ||||||
19 | deduction by Section 461(l)(1)(B) of the Internal | ||||||
20 | Revenue Code; and | ||||||
21 | (AA) For taxable years beginning on or after | ||||||
22 | January 1, 2023, for any cannabis establishment | ||||||
23 | operating in this State and licensed under the | ||||||
24 | Cannabis Regulation and Tax Act or any cannabis | ||||||
25 | cultivation center or medical cannabis dispensing | ||||||
26 | organization operating in this State and licensed |
| |||||||
| |||||||
1 | under the Compassionate Use of Medical Cannabis | ||||||
2 | Program Act, an amount equal to the deductions that | ||||||
3 | were disallowed under Section 280E of the Internal | ||||||
4 | Revenue Code for the taxable year and that would not be | ||||||
5 | added back under this subsection. The provisions of | ||||||
6 | this subparagraph (AA) are exempt from the provisions | ||||||
7 | of Section 250 ; and . | ||||||
8 | (BB) For taxable years beginning on or after | ||||||
9 | January 1, 2025, an amount of up to $50,000 per tax | ||||||
10 | year contributed by the taxpayer to a small business | ||||||
11 | asset purchase account during the tax year, plus all | ||||||
12 | interest earned on those accounts during the tax year; | ||||||
13 | as used in this subparagraph (BB), "small business | ||||||
14 | asset purchase account" means an account established | ||||||
15 | by a taxpayer, the proceeds of which are used to | ||||||
16 | purchase property that is used primarily in Illinois | ||||||
17 | and for which a federal income tax deduction is | ||||||
18 | claimed under Section 179 of the Internal Revenue | ||||||
19 | Code. | ||||||
20 | (3) Limitation. The amount of any modification | ||||||
21 | otherwise required under this subsection shall, under | ||||||
22 | regulations prescribed by the Department, be adjusted by | ||||||
23 | any amounts included therein which were properly paid, | ||||||
24 | credited, or required to be distributed, or permanently | ||||||
25 | set aside for charitable purposes pursuant to Internal | ||||||
26 | Revenue Code Section 642(c) during the taxable year.
|
| |||||||
| |||||||
1 | (d) Partnerships. | ||||||
2 | (1) In general. In the case of a partnership, base | ||||||
3 | income means an amount equal to the taxpayer's taxable | ||||||
4 | income for the taxable year as modified by paragraph (2). | ||||||
5 | (2) Modifications. The taxable income referred to in | ||||||
6 | paragraph (1) shall be modified by adding thereto the sum | ||||||
7 | of the following amounts: | ||||||
8 | (A) An amount equal to all amounts paid or accrued | ||||||
9 | to the taxpayer as interest or dividends during the | ||||||
10 | taxable year to the extent excluded from gross income | ||||||
11 | in the computation of taxable income; | ||||||
12 | (B) An amount equal to the amount of tax imposed by | ||||||
13 | this Act to the extent deducted from gross income for | ||||||
14 | the taxable year; | ||||||
15 | (C) The amount of deductions allowed to the | ||||||
16 | partnership pursuant to Section 707 (c) of the | ||||||
17 | Internal Revenue Code in calculating its taxable | ||||||
18 | income; | ||||||
19 | (D) An amount equal to the amount of the capital | ||||||
20 | gain deduction allowable under the Internal Revenue | ||||||
21 | Code, to the extent deducted from gross income in the | ||||||
22 | computation of taxable income; | ||||||
23 | (D-5) For taxable years 2001 and thereafter, an | ||||||
24 | amount equal to the bonus depreciation deduction taken | ||||||
25 | on the taxpayer's federal income tax return for the |
| |||||||
| |||||||
1 | taxable year under subsection (k) of Section 168 of | ||||||
2 | the Internal Revenue Code; | ||||||
3 | (D-6) If the taxpayer sells, transfers, abandons, | ||||||
4 | or otherwise disposes of property for which the | ||||||
5 | taxpayer was required in any taxable year to make an | ||||||
6 | addition modification under subparagraph (D-5), then | ||||||
7 | an amount equal to the aggregate amount of the | ||||||
8 | deductions taken in all taxable years under | ||||||
9 | subparagraph (O) with respect to that property. | ||||||
10 | If the taxpayer continues to own property through | ||||||
11 | the last day of the last tax year for which a | ||||||
12 | subtraction is allowed with respect to that property | ||||||
13 | under subparagraph (O) and for which the taxpayer was | ||||||
14 | allowed in any taxable year to make a subtraction | ||||||
15 | modification under subparagraph (O), then an amount | ||||||
16 | equal to that subtraction modification. | ||||||
17 | The taxpayer is required to make the addition | ||||||
18 | modification under this subparagraph only once with | ||||||
19 | respect to any one piece of property; | ||||||
20 | (D-7) An amount equal to the amount otherwise | ||||||
21 | allowed as a deduction in computing base income for | ||||||
22 | interest paid, accrued, or incurred, directly or | ||||||
23 | indirectly, (i) for taxable years ending on or after | ||||||
24 | December 31, 2004, to a foreign person who would be a | ||||||
25 | member of the same unitary business group but for the | ||||||
26 | fact the foreign person's business activity outside |
| |||||||
| |||||||
1 | the United States is 80% or more of the foreign | ||||||
2 | person's total business activity and (ii) for taxable | ||||||
3 | years ending on or after December 31, 2008, to a person | ||||||
4 | who would be a member of the same unitary business | ||||||
5 | group but for the fact that the person is prohibited | ||||||
6 | under Section 1501(a)(27) from being included in the | ||||||
7 | unitary business group because he or she is ordinarily | ||||||
8 | required to apportion business income under different | ||||||
9 | subsections of Section 304. The addition modification | ||||||
10 | required by this subparagraph shall be reduced to the | ||||||
11 | extent that dividends were included in base income of | ||||||
12 | the unitary group for the same taxable year and | ||||||
13 | received by the taxpayer or by a member of the | ||||||
14 | taxpayer's unitary business group (including amounts | ||||||
15 | included in gross income pursuant to Sections 951 | ||||||
16 | through 964 of the Internal Revenue Code and amounts | ||||||
17 | included in gross income under Section 78 of the | ||||||
18 | Internal Revenue Code) with respect to the stock of | ||||||
19 | the same person to whom the interest was paid, | ||||||
20 | accrued, or incurred. | ||||||
21 | This paragraph shall not apply to the following: | ||||||
22 | (i) an item of interest paid, accrued, or | ||||||
23 | incurred, directly or indirectly, to a person who | ||||||
24 | is subject in a foreign country or state, other | ||||||
25 | than a state which requires mandatory unitary | ||||||
26 | reporting, to a tax on or measured by net income |
| |||||||
| |||||||
1 | with respect to such interest; or | ||||||
2 | (ii) an item of interest paid, accrued, or | ||||||
3 | incurred, directly or indirectly, to a person if | ||||||
4 | the taxpayer can establish, based on a | ||||||
5 | preponderance of the evidence, both of the | ||||||
6 | following: | ||||||
7 | (a) the person, during the same taxable | ||||||
8 | year, paid, accrued, or incurred, the interest | ||||||
9 | to a person that is not a related member, and | ||||||
10 | (b) the transaction giving rise to the | ||||||
11 | interest expense between the taxpayer and the | ||||||
12 | person did not have as a principal purpose the | ||||||
13 | avoidance of Illinois income tax, and is paid | ||||||
14 | pursuant to a contract or agreement that | ||||||
15 | reflects an arm's-length interest rate and | ||||||
16 | terms; or | ||||||
17 | (iii) the taxpayer can establish, based on | ||||||
18 | clear and convincing evidence, that the interest | ||||||
19 | paid, accrued, or incurred relates to a contract | ||||||
20 | or agreement entered into at arm's-length rates | ||||||
21 | and terms and the principal purpose for the | ||||||
22 | payment is not federal or Illinois tax avoidance; | ||||||
23 | 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 |
| |||||||
| |||||||
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 | ||||||
8 | for any tax year beginning after the effective | ||||||
9 | date of this amendment provided such adjustment is | ||||||
10 | made pursuant to regulation adopted by the | ||||||
11 | Department and such regulations provide methods | ||||||
12 | and standards by which the Department will utilize | ||||||
13 | its authority under Section 404 of this Act; and | ||||||
14 | (D-8) 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) |
| |||||||
| |||||||
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(d)(2)(D-7) of | ||||||
19 | this Act. As used in this subparagraph, the term | ||||||
20 | "intangible expenses and costs" includes (1) expenses, | ||||||
21 | losses, and costs for, or related to, the direct or | ||||||
22 | indirect acquisition, use, maintenance or management, | ||||||
23 | ownership, sale, exchange, or any other disposition of | ||||||
24 | intangible property; (2) losses incurred, directly or | ||||||
25 | indirectly, from factoring transactions or discounting | ||||||
26 | transactions; (3) royalty, patent, technical, and |
| |||||||
| |||||||
1 | copyright fees; (4) licensing fees; and (5) other | ||||||
2 | similar expenses and costs. For purposes of this | ||||||
3 | subparagraph, "intangible property" includes patents, | ||||||
4 | patent applications, trade names, trademarks, service | ||||||
5 | marks, copyrights, mask works, trade secrets, and | ||||||
6 | 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 | ||||||
11 | is subject in a foreign country or state, other | ||||||
12 | than a state which requires mandatory unitary | ||||||
13 | reporting, to a tax on or measured by net income | ||||||
14 | with respect 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 |
| |||||||
| |||||||
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 | ||||||
8 | the 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 | ||||||
12 | alternative method of apportionment under Section | ||||||
13 | 304(f); | ||||||
14 | Nothing in this subsection shall preclude the | ||||||
15 | Director from making any other adjustment | ||||||
16 | otherwise allowed under Section 404 of this Act | ||||||
17 | for any tax year beginning after the effective | ||||||
18 | date of this amendment provided such adjustment is | ||||||
19 | made pursuant to regulation adopted by the | ||||||
20 | Department and such regulations provide methods | ||||||
21 | and standards by which the Department will utilize | ||||||
22 | its authority under Section 404 of this Act; | ||||||
23 | (D-9) For taxable years ending on or after | ||||||
24 | December 31, 2008, an amount equal to the amount of | ||||||
25 | insurance premium expenses and costs otherwise allowed | ||||||
26 | as a deduction in computing base income, and that were |
| |||||||
| |||||||
1 | paid, accrued, or incurred, directly or indirectly, to | ||||||
2 | a person who would be a member of the same unitary | ||||||
3 | business group but for the fact that the person is | ||||||
4 | prohibited under Section 1501(a)(27) from being | ||||||
5 | included in the unitary business group because he or | ||||||
6 | she is ordinarily required to apportion business | ||||||
7 | income under different subsections of Section 304. The | ||||||
8 | addition modification required by this subparagraph | ||||||
9 | shall be reduced to the extent that dividends were | ||||||
10 | included in base income of the unitary group for the | ||||||
11 | same taxable year and received by the taxpayer or by a | ||||||
12 | member of the taxpayer's unitary business group | ||||||
13 | (including amounts included in gross income under | ||||||
14 | Sections 951 through 964 of the Internal Revenue Code | ||||||
15 | and amounts included in gross income under Section 78 | ||||||
16 | of the Internal Revenue Code) with respect to the | ||||||
17 | stock of the same person to whom the premiums and costs | ||||||
18 | were directly or indirectly paid, incurred, or | ||||||
19 | accrued. The preceding sentence does not apply to the | ||||||
20 | extent that the same dividends caused a reduction to | ||||||
21 | the addition modification required under Section | ||||||
22 | 203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act; | ||||||
23 | (D-10) An amount equal to the credit allowable to | ||||||
24 | the taxpayer under Section 218(a) of this Act, | ||||||
25 | determined without regard to Section 218(c) of this | ||||||
26 | Act; |
| |||||||
| |||||||
1 | (D-11) For taxable years ending on or after | ||||||
2 | December 31, 2017, an amount equal to the deduction | ||||||
3 | allowed under Section 199 of the Internal Revenue Code | ||||||
4 | for the taxable year; | ||||||
5 | (D-12) An amount that is withdrawn by the taxpayer | ||||||
6 | during the taxable year from a small business asset | ||||||
7 | purchase account and that is not used for the purchase | ||||||
8 | of qualified property; as used in this subparagraph | ||||||
9 | (D-12), "qualified property" means property that is | ||||||
10 | used predominantly in Illinois and for which a | ||||||
11 | deduction under Section 179 of the Internal Revenue | ||||||
12 | Code is claimed for the tax year in which the amount is | ||||||
13 | withdrawn from the small business asset purchase | ||||||
14 | account; amounts that are subject to the addition | ||||||
15 | modification under this subparagraph (D-12) are also | ||||||
16 | subject to the 10% penalty for ineligible use under | ||||||
17 | Section 3-3.5 of the Uniform Penalty and Interest Act; | ||||||
18 | and by deducting from the total so obtained the following | ||||||
19 | amounts: | ||||||
20 | (E) The valuation limitation amount; | ||||||
21 | (F) An amount equal to the amount of any tax | ||||||
22 | imposed by this Act which was refunded to the taxpayer | ||||||
23 | and included in such total for the taxable year; | ||||||
24 | (G) An amount equal to all amounts included in | ||||||
25 | taxable income as modified by subparagraphs (A), (B), | ||||||
26 | (C) and (D) which are exempt from taxation by this |
| |||||||
| |||||||
1 | State either by reason of its statutes or Constitution | ||||||
2 | or by reason of the Constitution, treaties or statutes | ||||||
3 | of the United States; provided that, in the case of any | ||||||
4 | statute of this State that exempts income derived from | ||||||
5 | bonds or other obligations from the tax imposed under | ||||||
6 | this Act, the amount exempted shall be the interest | ||||||
7 | net of bond premium amortization; | ||||||
8 | (H) Any income of the partnership which | ||||||
9 | constitutes personal service income as defined in | ||||||
10 | Section 1348(b)(1) of the Internal Revenue Code (as in | ||||||
11 | effect December 31, 1981) or a reasonable allowance | ||||||
12 | for compensation paid or accrued for services rendered | ||||||
13 | by partners to the partnership, whichever is greater; | ||||||
14 | this subparagraph (H) is exempt from the provisions of | ||||||
15 | Section 250; | ||||||
16 | (I) An amount equal to all amounts of income | ||||||
17 | distributable to an entity subject to the Personal | ||||||
18 | Property Tax Replacement Income Tax imposed by | ||||||
19 | subsections (c) and (d) of Section 201 of this Act | ||||||
20 | including amounts distributable to organizations | ||||||
21 | exempt from federal income tax by reason of Section | ||||||
22 | 501(a) of the Internal Revenue Code; this subparagraph | ||||||
23 | (I) is exempt from the provisions of Section 250; | ||||||
24 | (J) With the exception of any amounts subtracted | ||||||
25 | under subparagraph (G), an amount equal to the sum of | ||||||
26 | all amounts disallowed as deductions by (i) Sections |
| |||||||
| |||||||
1 | 171(a)(2) and 265(a)(2) of the Internal Revenue Code, | ||||||
2 | and all amounts of expenses allocable to interest and | ||||||
3 | disallowed as deductions by Section 265(a)(1) of the | ||||||
4 | Internal Revenue Code; and (ii) for taxable years | ||||||
5 | ending on or after August 13, 1999, Sections | ||||||
6 | 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the | ||||||
7 | Internal Revenue Code, plus, (iii) for taxable years | ||||||
8 | ending on or after December 31, 2011, Section | ||||||
9 | 45G(e)(3) of the Internal Revenue Code and, for | ||||||
10 | taxable years ending on or after December 31, 2008, | ||||||
11 | any amount included in gross income under Section 87 | ||||||
12 | of the Internal Revenue Code; the provisions of this | ||||||
13 | subparagraph are exempt from the provisions of Section | ||||||
14 | 250; | ||||||
15 | (K) An amount equal to those dividends included in | ||||||
16 | such total which were paid by a corporation which | ||||||
17 | conducts business operations in a River Edge | ||||||
18 | Redevelopment Zone or zones created under the River | ||||||
19 | Edge Redevelopment Zone Act and conducts substantially | ||||||
20 | all of its operations from a River Edge Redevelopment | ||||||
21 | Zone or zones. This subparagraph (K) is exempt from | ||||||
22 | the provisions of Section 250; | ||||||
23 | (L) An amount equal to any contribution made to a | ||||||
24 | job training project established pursuant to the Real | ||||||
25 | Property Tax Increment Allocation Redevelopment Act; | ||||||
26 | (M) An amount equal to those dividends included in |
| |||||||
| |||||||
1 | such total that were paid by a corporation that | ||||||
2 | conducts business operations in a federally designated | ||||||
3 | Foreign Trade Zone or Sub-Zone and that is designated | ||||||
4 | a High Impact Business located in Illinois; provided | ||||||
5 | that dividends eligible for the deduction provided in | ||||||
6 | subparagraph (K) of paragraph (2) of this subsection | ||||||
7 | shall not be eligible for the deduction provided under | ||||||
8 | this subparagraph (M); | ||||||
9 | (N) An amount equal to the amount of the deduction | ||||||
10 | used to compute the federal income tax credit for | ||||||
11 | restoration of substantial amounts held under claim of | ||||||
12 | right for the taxable year pursuant to Section 1341 of | ||||||
13 | the Internal Revenue Code; | ||||||
14 | (O) For taxable years 2001 and thereafter, for the | ||||||
15 | taxable year in which the bonus depreciation deduction | ||||||
16 | is taken on the taxpayer's federal income tax return | ||||||
17 | under subsection (k) of Section 168 of the Internal | ||||||
18 | Revenue Code and for each applicable taxable year | ||||||
19 | thereafter, an amount equal to "x", where: | ||||||
20 | (1) "y" equals the amount of the depreciation | ||||||
21 | deduction taken for the taxable year on the | ||||||
22 | taxpayer's federal income tax return on property | ||||||
23 | for which the bonus depreciation deduction was | ||||||
24 | taken in any year under subsection (k) of Section | ||||||
25 | 168 of the Internal Revenue Code, but not | ||||||
26 | including the bonus depreciation deduction; |
| |||||||
| |||||||
1 | (2) for taxable years ending on or before | ||||||
2 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
3 | and then divided by 70 (or "y" multiplied by | ||||||
4 | 0.429); and | ||||||
5 | (3) for taxable years ending after December | ||||||
6 | 31, 2005: | ||||||
7 | (i) for property on which a bonus | ||||||
8 | depreciation deduction of 30% of the adjusted | ||||||
9 | basis was taken, "x" equals "y" multiplied by | ||||||
10 | 30 and then divided by 70 (or "y" multiplied | ||||||
11 | by 0.429); | ||||||
12 | (ii) for property on which a bonus | ||||||
13 | depreciation deduction of 50% of the adjusted | ||||||
14 | basis was taken, "x" equals "y" multiplied by | ||||||
15 | 1.0; | ||||||
16 | (iii) for property on which a bonus | ||||||
17 | depreciation deduction of 100% of the adjusted | ||||||
18 | basis was taken in a taxable year ending on or | ||||||
19 | after December 31, 2021, "x" equals the | ||||||
20 | depreciation deduction that would be allowed | ||||||
21 | on that property if the taxpayer had made the | ||||||
22 | election under Section 168(k)(7) of the | ||||||
23 | Internal Revenue Code to not claim bonus | ||||||
24 | depreciation on that property; and | ||||||
25 | (iv) for property on which a bonus | ||||||
26 | depreciation deduction of a percentage other |
| |||||||
| |||||||
1 | than 30%, 50% or 100% of the adjusted basis | ||||||
2 | was taken in a taxable year ending on or after | ||||||
3 | December 31, 2021, "x" equals "y" multiplied | ||||||
4 | by 100 times the percentage bonus depreciation | ||||||
5 | on the property (that is, 100(bonus%)) and | ||||||
6 | then divided by 100 times 1 minus the | ||||||
7 | percentage bonus depreciation on the property | ||||||
8 | (that is, 100(1-bonus%)). | ||||||
9 | The aggregate amount deducted under this | ||||||
10 | subparagraph in all taxable years for any one piece of | ||||||
11 | property may not exceed the amount of the bonus | ||||||
12 | depreciation deduction taken on that property on the | ||||||
13 | taxpayer's federal income tax return under subsection | ||||||
14 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
15 | subparagraph (O) is exempt from the provisions of | ||||||
16 | Section 250; | ||||||
17 | (P) If the taxpayer sells, transfers, abandons, or | ||||||
18 | otherwise disposes of property for which the taxpayer | ||||||
19 | was required in any taxable year to make an addition | ||||||
20 | modification under subparagraph (D-5), then an amount | ||||||
21 | equal to that addition modification. | ||||||
22 | If the taxpayer continues to own property through | ||||||
23 | the last day of the last tax year for which a | ||||||
24 | subtraction is allowed with respect to that property | ||||||
25 | under subparagraph (O) and for which the taxpayer was | ||||||
26 | required in any taxable year to make an addition |
| |||||||
| |||||||
1 | modification under subparagraph (D-5), then an amount | ||||||
2 | equal to that addition modification. | ||||||
3 | The taxpayer is allowed to take the deduction | ||||||
4 | under this subparagraph only once with respect to any | ||||||
5 | one piece of property. | ||||||
6 | This subparagraph (P) is exempt from the | ||||||
7 | provisions of Section 250; | ||||||
8 | (Q) The amount of (i) any interest income (net of | ||||||
9 | the deductions allocable thereto) taken into account | ||||||
10 | for the taxable year with respect to a transaction | ||||||
11 | with a taxpayer that is required to make an addition | ||||||
12 | modification with respect to such transaction under | ||||||
13 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
14 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
15 | the amount of such addition modification and (ii) any | ||||||
16 | income from intangible property (net of the deductions | ||||||
17 | allocable thereto) taken into account for the taxable | ||||||
18 | year with respect to a transaction with a taxpayer | ||||||
19 | that is required to make an addition modification with | ||||||
20 | respect to such transaction under Section | ||||||
21 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
22 | 203(d)(2)(D-8), but not to exceed the amount of such | ||||||
23 | addition modification. This subparagraph (Q) is exempt | ||||||
24 | from Section 250; | ||||||
25 | (R) An amount equal to the interest income taken | ||||||
26 | into account for the taxable year (net of the |
| |||||||
| |||||||
1 | 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 | ||||||
4 | for the fact that the foreign person's business | ||||||
5 | activity outside the United States is 80% or more of | ||||||
6 | that person's total business activity and (ii) for | ||||||
7 | taxable years ending on or after December 31, 2008, to | ||||||
8 | a person who would be a member of the same unitary | ||||||
9 | business group but for the fact that the person is | ||||||
10 | prohibited under Section 1501(a)(27) from being | ||||||
11 | included in the unitary business group because he or | ||||||
12 | she is ordinarily required to apportion business | ||||||
13 | income under different subsections of Section 304, but | ||||||
14 | not to exceed the addition modification required to be | ||||||
15 | made for the same taxable year under Section | ||||||
16 | 203(d)(2)(D-7) for interest paid, accrued, or | ||||||
17 | incurred, directly or indirectly, to the same person. | ||||||
18 | This subparagraph (R) is exempt from Section 250; | ||||||
19 | (S) An amount equal to the income from intangible | ||||||
20 | property taken into account for the taxable year (net | ||||||
21 | of the deductions allocable thereto) with respect to | ||||||
22 | transactions with (i) a foreign person who would be a | ||||||
23 | member of the taxpayer's unitary business group but | ||||||
24 | for the fact that the foreign person's business | ||||||
25 | activity outside the United States is 80% or more of | ||||||
26 | that person's total business activity and (ii) for |
| |||||||
| |||||||
1 | taxable years ending on or after December 31, 2008, to | ||||||
2 | a person who would be a member of the same unitary | ||||||
3 | business group but for the fact that the person is | ||||||
4 | prohibited under Section 1501(a)(27) from being | ||||||
5 | included in the unitary business group because he or | ||||||
6 | she is ordinarily required to apportion business | ||||||
7 | income under different subsections of Section 304, but | ||||||
8 | not to exceed the addition modification required to be | ||||||
9 | made for the same taxable year under Section | ||||||
10 | 203(d)(2)(D-8) for intangible expenses and costs paid, | ||||||
11 | accrued, or incurred, directly or indirectly, to the | ||||||
12 | same person. This subparagraph (S) is exempt from | ||||||
13 | Section 250; | ||||||
14 | (T) For taxable years ending on or after December | ||||||
15 | 31, 2011, in the case of a taxpayer who was required to | ||||||
16 | add back any insurance premiums under Section | ||||||
17 | 203(d)(2)(D-9), such taxpayer may elect to subtract | ||||||
18 | that part of a reimbursement received from the | ||||||
19 | insurance company equal to the amount of the expense | ||||||
20 | or loss (including expenses incurred by the insurance | ||||||
21 | company) that would have been taken into account as a | ||||||
22 | deduction for federal income tax purposes if the | ||||||
23 | expense or loss had been uninsured. If a taxpayer | ||||||
24 | makes the election provided for by this subparagraph | ||||||
25 | (T), the insurer to which the premiums were paid must | ||||||
26 | add back to income the amount subtracted by the |
| |||||||
| |||||||
1 | taxpayer pursuant to this subparagraph (T). This | ||||||
2 | subparagraph (T) is exempt from the provisions of | ||||||
3 | Section 250; and | ||||||
4 | (U) For taxable years beginning on or after | ||||||
5 | January 1, 2023, for any cannabis establishment | ||||||
6 | operating in this State and licensed under the | ||||||
7 | Cannabis Regulation and Tax Act or any cannabis | ||||||
8 | cultivation center or medical cannabis dispensing | ||||||
9 | organization operating in this State and licensed | ||||||
10 | under the Compassionate Use of Medical Cannabis | ||||||
11 | Program Act, an amount equal to the deductions that | ||||||
12 | were disallowed under Section 280E of the Internal | ||||||
13 | Revenue Code for the taxable year and that would not be | ||||||
14 | added back under this subsection. The provisions of | ||||||
15 | this subparagraph (U) are exempt from the provisions | ||||||
16 | of Section 250 ; and . | ||||||
17 | (V) For taxable years beginning on or after | ||||||
18 | January 1, 2025, an amount of up to $50,000 per tax | ||||||
19 | year contributed by the taxpayer to a small business | ||||||
20 | asset purchase account during the tax year, plus all | ||||||
21 | interest earned on those accounts during the tax year; | ||||||
22 | as used in this subparagraph (V), "small business | ||||||
23 | asset purchase account" means an account established | ||||||
24 | by a taxpayer, the proceeds of which are used to | ||||||
25 | purchase property that is used primarily in Illinois | ||||||
26 | and for which a federal income tax deduction is |
| |||||||
| |||||||
1 | claimed under Section 179 of the Internal Revenue | ||||||
2 | Code.
| ||||||
3 | (e) Gross income; adjusted gross income; taxable income. | ||||||
4 | (1) In general. Subject to the provisions of paragraph | ||||||
5 | (2) and subsection (b)(3), for purposes of this Section | ||||||
6 | and Section 803(e), a taxpayer's gross income, adjusted | ||||||
7 | gross income, or taxable income for the taxable year shall | ||||||
8 | mean the amount of gross income, adjusted gross income or | ||||||
9 | taxable income properly reportable for federal income tax | ||||||
10 | purposes for the taxable year under the provisions of the | ||||||
11 | Internal Revenue Code. Taxable income may be less than | ||||||
12 | zero. However, for taxable years ending on or after | ||||||
13 | December 31, 1986, net operating loss carryforwards from | ||||||
14 | taxable years ending prior to December 31, 1986, may not | ||||||
15 | exceed the sum of federal taxable income for the taxable | ||||||
16 | year before net operating loss deduction, plus the excess | ||||||
17 | of addition modifications over subtraction modifications | ||||||
18 | for the taxable year. For taxable years ending prior to | ||||||
19 | December 31, 1986, taxable income may never be an amount | ||||||
20 | in excess of the net operating loss for the taxable year as | ||||||
21 | defined in subsections (c) and (d) of Section 172 of the | ||||||
22 | Internal Revenue Code, provided that when taxable income | ||||||
23 | of a corporation (other than a Subchapter S corporation), | ||||||
24 | trust, or estate is less than zero and addition | ||||||
25 | modifications, other than those provided by subparagraph |
| |||||||
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1 | (E) of paragraph (2) of subsection (b) for corporations or | ||||||
2 | subparagraph (E) of paragraph (2) of subsection (c) for | ||||||
3 | trusts and estates, exceed subtraction modifications, an | ||||||
4 | addition modification must be made under those | ||||||
5 | subparagraphs for any other taxable year to which the | ||||||
6 | taxable income less than zero (net operating loss) is | ||||||
7 | applied under Section 172 of the Internal Revenue Code or | ||||||
8 | under subparagraph (E) of paragraph (2) of this subsection | ||||||
9 | (e) applied in conjunction with Section 172 of the | ||||||
10 | Internal Revenue Code. | ||||||
11 | (2) Special rule. For purposes of paragraph (1) of | ||||||
12 | this subsection, the taxable income properly reportable | ||||||
13 | for federal income tax purposes shall mean: | ||||||
14 | (A) Certain life insurance companies. In the case | ||||||
15 | of a life insurance company subject to the tax imposed | ||||||
16 | by Section 801 of the Internal Revenue Code, life | ||||||
17 | insurance company taxable income, plus the amount of | ||||||
18 | distribution from pre-1984 policyholder surplus | ||||||
19 | accounts as calculated under Section 815a of the | ||||||
20 | Internal Revenue Code; | ||||||
21 | (B) Certain other insurance companies. In the case | ||||||
22 | of mutual insurance companies subject to the tax | ||||||
23 | imposed by Section 831 of the Internal Revenue Code, | ||||||
24 | insurance company taxable income; | ||||||
25 | (C) Regulated investment companies. In the case of | ||||||
26 | a regulated investment company subject to the tax |
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1 | imposed by Section 852 of the Internal Revenue Code, | ||||||
2 | investment company taxable income; | ||||||
3 | (D) Real estate investment trusts. In the case of | ||||||
4 | a real estate investment trust subject to the tax | ||||||
5 | imposed by Section 857 of the Internal Revenue Code, | ||||||
6 | real estate investment trust taxable income; | ||||||
7 | (E) Consolidated corporations. In the case of a | ||||||
8 | corporation which is a member of an affiliated group | ||||||
9 | of corporations filing a consolidated income tax | ||||||
10 | return for the taxable year for federal income tax | ||||||
11 | purposes, taxable income determined as if such | ||||||
12 | corporation had filed a separate return for federal | ||||||
13 | income tax purposes for the taxable year and each | ||||||
14 | preceding taxable year for which it was a member of an | ||||||
15 | affiliated group. For purposes of this subparagraph, | ||||||
16 | the taxpayer's separate taxable income shall be | ||||||
17 | determined as if the election provided by Section | ||||||
18 | 243(b)(2) of the Internal Revenue Code had been in | ||||||
19 | effect for all such years; | ||||||
20 | (F) Cooperatives. In the case of a cooperative | ||||||
21 | corporation or association, the taxable income of such | ||||||
22 | organization determined in accordance with the | ||||||
23 | provisions of Section 1381 through 1388 of the | ||||||
24 | Internal Revenue Code, but without regard to the | ||||||
25 | prohibition against offsetting losses from patronage | ||||||
26 | activities against income from nonpatronage |
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1 | activities; except that a cooperative corporation or | ||||||
2 | association may make an election to follow its federal | ||||||
3 | income tax treatment of patronage losses and | ||||||
4 | nonpatronage losses. In the event such election is | ||||||
5 | made, such losses shall be computed and carried over | ||||||
6 | in a manner consistent with subsection (a) of Section | ||||||
7 | 207 of this Act and apportioned by the apportionment | ||||||
8 | factor reported by the cooperative on its Illinois | ||||||
9 | income tax return filed for the taxable year in which | ||||||
10 | the losses are incurred. The election shall be | ||||||
11 | effective for all taxable years with original returns | ||||||
12 | due on or after the date of the election. In addition, | ||||||
13 | the cooperative may file an amended return or returns, | ||||||
14 | as allowed under this Act, to provide that the | ||||||
15 | election shall be effective for losses incurred or | ||||||
16 | carried forward for taxable years occurring prior to | ||||||
17 | the date of the election. Once made, the election may | ||||||
18 | only be revoked upon approval of the Director. The | ||||||
19 | Department shall adopt rules setting forth | ||||||
20 | requirements for documenting the elections and any | ||||||
21 | resulting Illinois net loss and the standards to be | ||||||
22 | used by the Director in evaluating requests to revoke | ||||||
23 | elections. Public Act 96-932 is declaratory of | ||||||
24 | existing law; | ||||||
25 | (G) Subchapter S corporations. In the case of: (i) | ||||||
26 | a Subchapter S corporation for which there is in |
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1 | effect an election for the taxable year under Section | ||||||
2 | 1362 of the Internal Revenue Code, the taxable income | ||||||
3 | of such corporation determined in accordance with | ||||||
4 | Section 1363(b) of the Internal Revenue Code, except | ||||||
5 | that taxable income shall take into account those | ||||||
6 | items which are required by Section 1363(b)(1) of the | ||||||
7 | Internal Revenue Code to be separately stated; and | ||||||
8 | (ii) a Subchapter S corporation for which there is in | ||||||
9 | effect a federal election to opt out of the provisions | ||||||
10 | of the Subchapter S Revision Act of 1982 and have | ||||||
11 | applied instead the prior federal Subchapter S rules | ||||||
12 | as in effect on July 1, 1982, the taxable income of | ||||||
13 | such corporation determined in accordance with the | ||||||
14 | federal Subchapter S rules as in effect on July 1, | ||||||
15 | 1982; and | ||||||
16 | (H) Partnerships. In the case of a partnership, | ||||||
17 | taxable income determined in accordance with Section | ||||||
18 | 703 of the Internal Revenue Code, except that taxable | ||||||
19 | income shall take into account those items which are | ||||||
20 | required by Section 703(a)(1) to be separately stated | ||||||
21 | but which would be taken into account by an individual | ||||||
22 | in calculating his taxable income. | ||||||
23 | (3) Recapture of business expenses on disposition of | ||||||
24 | asset or business. Notwithstanding any other law to the | ||||||
25 | contrary, if in prior years income from an asset or | ||||||
26 | business has been classified as business income and in a |
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1 | later year is demonstrated to be non-business income, then | ||||||
2 | all expenses, without limitation, deducted in such later | ||||||
3 | year and in the 2 immediately preceding taxable years | ||||||
4 | related to that asset or business that generated the | ||||||
5 | non-business income shall be added back and recaptured as | ||||||
6 | business income in the year of the disposition of the | ||||||
7 | asset or business. Such amount shall be apportioned to | ||||||
8 | Illinois using the greater of the apportionment fraction | ||||||
9 | computed for the business under Section 304 of this Act | ||||||
10 | for the taxable year or the average of the apportionment | ||||||
11 | fractions computed for the business under Section 304 of | ||||||
12 | this Act for the taxable year and for the 2 immediately | ||||||
13 | preceding taxable years.
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14 | (f) Valuation limitation amount. | ||||||
15 | (1) In general. The valuation limitation amount | ||||||
16 | referred to in subsections (a)(2)(G), (c)(2)(I) and | ||||||
17 | (d)(2)(E) is an amount equal to: | ||||||
18 | (A) The sum of the pre-August 1, 1969 appreciation | ||||||
19 | amounts (to the extent consisting of gain reportable | ||||||
20 | under the provisions of Section 1245 or 1250 of the | ||||||
21 | Internal Revenue Code) for all property in respect of | ||||||
22 | which such gain was reported for the taxable year; | ||||||
23 | plus | ||||||
24 | (B) The lesser of (i) the sum of the pre-August 1, | ||||||
25 | 1969 appreciation amounts (to the extent consisting of |
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1 | capital gain) for all property in respect of which | ||||||
2 | such gain was reported for federal income tax purposes | ||||||
3 | for the taxable year, or (ii) the net capital gain for | ||||||
4 | the taxable year, reduced in either case by any amount | ||||||
5 | of such gain included in the amount determined under | ||||||
6 | subsection (a)(2)(F) or (c)(2)(H). | ||||||
7 | (2) Pre-August 1, 1969 appreciation amount. | ||||||
8 | (A) If the fair market value of property referred | ||||||
9 | to in paragraph (1) was readily ascertainable on | ||||||
10 | August 1, 1969, the pre-August 1, 1969 appreciation | ||||||
11 | amount for such property is the lesser of (i) the | ||||||
12 | excess of such fair market value over the taxpayer's | ||||||
13 | basis (for determining gain) for such property on that | ||||||
14 | date (determined under the Internal Revenue Code as in | ||||||
15 | effect on that date), or (ii) the total gain realized | ||||||
16 | and reportable for federal income tax purposes in | ||||||
17 | respect of the sale, exchange or other disposition of | ||||||
18 | such property. | ||||||
19 | (B) If the fair market value of property referred | ||||||
20 | to in paragraph (1) was not readily ascertainable on | ||||||
21 | August 1, 1969, the pre-August 1, 1969 appreciation | ||||||
22 | amount for such property is that amount which bears | ||||||
23 | the same ratio to the total gain reported in respect of | ||||||
24 | the property for federal income tax purposes for the | ||||||
25 | taxable year, as the number of full calendar months in | ||||||
26 | that part of the taxpayer's holding period for the |
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1 | property ending July 31, 1969 bears to the number of | ||||||
2 | full calendar months in the taxpayer's entire holding | ||||||
3 | period for the property. | ||||||
4 | (C) The Department shall prescribe such | ||||||
5 | regulations as may be necessary to carry out the | ||||||
6 | purposes of this paragraph.
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7 | (g) Double deductions. Unless specifically provided | ||||||
8 | otherwise, nothing in this Section shall permit the same item | ||||||
9 | to be deducted more than once.
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10 | (h) Legislative intention. Except as expressly provided by | ||||||
11 | this Section there shall be no modifications or limitations on | ||||||
12 | the amounts of income, gain, loss or deduction taken into | ||||||
13 | account in determining gross income, adjusted gross income or | ||||||
14 | taxable income for federal income tax purposes for the taxable | ||||||
15 | year, or in the amount of such items entering into the | ||||||
16 | computation of base income and net income under this Act for | ||||||
17 | such taxable year, whether in respect of property values as of | ||||||
18 | August 1, 1969 or otherwise. | ||||||
19 | (Source: P.A. 102-16, eff. 6-17-21; 102-558, eff. 8-20-21; | ||||||
20 | 102-658, eff. 8-27-21; 102-813, eff. 5-13-22; 102-1112, eff. | ||||||
21 | 12-21-22; 103-8, eff. 6-7-23; 103-478, eff. 1-1-24; revised | ||||||
22 | 9-26-23.)
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23 | Section 10. The Uniform Penalty and Interest Act is |
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1 | amended by adding Section 3-3.5 as follows:
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2 | (35 ILCS 735/3-3.5 new) | ||||||
3 | Sec. 3-3.5. Penalty for improper use of proceeds of Small | ||||||
4 | Business Asset Purchase Account. A penalty of 10% of the | ||||||
5 | amount withdrawn from a small business asset purchase account, | ||||||
6 | as defined in Section 203 of the Illinois Income Tax Act, | ||||||
7 | during a tax year that is used for purchases of property for | ||||||
8 | which a deduction under Section 179 of the Internal Revenue | ||||||
9 | Code is not claimed for the tax year in which the amount is | ||||||
10 | withdrawn, or purchases of property for which the deduction | ||||||
11 | under Section 179 of the Internal Revenue Code is claimed that | ||||||
12 | is not used predominantly in Illinois.
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