Bill Text: IL HB0357 | 2017-2018 | 100th General Assembly | Introduced


Bill Title: Amends the Illinois Income Tax Act. For taxable years beginning on or after January 1, 2017, reduces the rate of tax to 3% for individuals, trusts, and estates and 4.8% for corporations. Makes corresponding changes concerning the distribution of tax proceeds. Effective immediately.

Spectrum: Slight Partisan Bill (Democrat 3-1)

Status: (Failed) 2019-01-08 - Session Sine Die [HB0357 Detail]

Download: Illinois-2017-HB0357-Introduced.html


100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB0357

Introduced , by Rep. David McSweeney

SYNOPSIS AS INTRODUCED:
35 ILCS 5/201 from Ch. 120, par. 2-201
35 ILCS 5/901 from Ch. 120, par. 9-901

Amends the Illinois Income Tax Act. For taxable years beginning on or after January 1, 2017, reduces the rate of tax to 3% for individuals, trusts, and estates and 4.8% for corporations. Makes corresponding changes concerning the distribution of tax proceeds. Effective immediately.
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FISCAL NOTE ACT MAY APPLY

A BILL FOR

HB0357LRB100 04330 HLH 14336 b
1 AN ACT concerning revenue.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The Illinois Income Tax Act is amended by
5changing Sections 201 and 901 as follows:
6 (35 ILCS 5/201) (from Ch. 120, par. 2-201)
7 Sec. 201. Tax Imposed.
8 (a) In general. A tax measured by net income is hereby
9imposed on every individual, corporation, trust and estate for
10each taxable year ending after July 31, 1969 on the privilege
11of earning or receiving income in or as a resident of this
12State. Such tax shall be in addition to all other occupation or
13privilege taxes imposed by this State or by any municipal
14corporation or political subdivision thereof.
15 (b) Rates. The tax imposed by subsection (a) of this
16Section shall be determined as follows, except as adjusted by
17subsection (d-1):
18 (1) In the case of an individual, trust or estate, for
19 taxable years ending prior to July 1, 1989, an amount equal
20 to 2 1/2% of the taxpayer's net income for the taxable
21 year.
22 (2) In the case of an individual, trust or estate, for
23 taxable years beginning prior to July 1, 1989 and ending

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1 after June 30, 1989, an amount equal to the sum of (i) 2
2 1/2% of the taxpayer's net income for the period prior to
3 July 1, 1989, as calculated under Section 202.3, and (ii)
4 3% of the taxpayer's net income for the period after June
5 30, 1989, as calculated under Section 202.3.
6 (3) In the case of an individual, trust or estate, for
7 taxable years beginning after June 30, 1989, and ending
8 prior to January 1, 2011, an amount equal to 3% of the
9 taxpayer's net income for the taxable year.
10 (4) In the case of an individual, trust, or estate, for
11 taxable years beginning prior to January 1, 2011, and
12 ending after December 31, 2010, an amount equal to the sum
13 of (i) 3% of the taxpayer's net income for the period prior
14 to January 1, 2011, as calculated under Section 202.5, and
15 (ii) 5% of the taxpayer's net income for the period after
16 December 31, 2010, as calculated under Section 202.5.
17 (5) In the case of an individual, trust, or estate, for
18 taxable years beginning on or after January 1, 2011, and
19 ending prior to January 1, 2015, an amount equal to 5% of
20 the taxpayer's net income for the taxable year.
21 (5.1) In the case of an individual, trust, or estate,
22 for taxable years beginning prior to January 1, 2015, and
23 ending after December 31, 2014, an amount equal to the sum
24 of (i) 5% of the taxpayer's net income for the period prior
25 to January 1, 2015, as calculated under Section 202.5, and
26 (ii) 3.75% of the taxpayer's net income for the period

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1 after December 31, 2014, as calculated under Section 202.5.
2 (5.2) In the case of an individual, trust, or estate,
3 for taxable years beginning on or after January 1, 2015,
4 and ending prior to January 1, 2017 January 1, 2025, an
5 amount equal to 3.75% of the taxpayer's net income for the
6 taxable year.
7 (5.3) In the case of an individual, trust, or estate,
8 for taxable years beginning prior to January 1, 2017
9 January 1, 2025, and ending after December 31, 2016
10 December 31, 2024, an amount equal to the sum of (i) 3.75%
11 of the taxpayer's net income for the period prior to
12 January 1, 2017 January 1, 2025, as calculated under
13 Section 202.5, and (ii) 3% 3.25% of the taxpayer's net
14 income for the period after December 31, 2016 December 31,
15 2024, as calculated under Section 202.5.
16 (5.4) In the case of an individual, trust, or estate,
17 for taxable years beginning on or after January 1, 2017
18 January 1, 2025, an amount equal to 3% 3.25% of the
19 taxpayer's net income for the taxable year.
20 (6) In the case of a corporation, for taxable years
21 ending prior to July 1, 1989, an amount equal to 4% of the
22 taxpayer's net income for the taxable year.
23 (7) In the case of a corporation, for taxable years
24 beginning prior to July 1, 1989 and ending after June 30,
25 1989, an amount equal to the sum of (i) 4% of the
26 taxpayer's net income for the period prior to July 1, 1989,

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1 as calculated under Section 202.3, and (ii) 4.8% of the
2 taxpayer's net income for the period after June 30, 1989,
3 as calculated under Section 202.3.
4 (8) In the case of a corporation, for taxable years
5 beginning after June 30, 1989, and ending prior to January
6 1, 2011, an amount equal to 4.8% of the taxpayer's net
7 income for the taxable year.
8 (9) In the case of a corporation, for taxable years
9 beginning prior to January 1, 2011, and ending after
10 December 31, 2010, an amount equal to the sum of (i) 4.8%
11 of the taxpayer's net income for the period prior to
12 January 1, 2011, as calculated under Section 202.5, and
13 (ii) 7% of the taxpayer's net income for the period after
14 December 31, 2010, as calculated under Section 202.5.
15 (10) In the case of a corporation, for taxable years
16 beginning on or after January 1, 2011, and ending prior to
17 January 1, 2015, an amount equal to 7% of the taxpayer's
18 net income for the taxable year.
19 (11) In the case of a corporation, for taxable years
20 beginning prior to January 1, 2015, and ending after
21 December 31, 2014, an amount equal to the sum of (i) 7% of
22 the taxpayer's net income for the period prior to January
23 1, 2015, as calculated under Section 202.5, and (ii) 5.25%
24 of the taxpayer's net income for the period after December
25 31, 2014, as calculated under Section 202.5.
26 (12) In the case of a corporation, for taxable years

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1 beginning on or after January 1, 2015, and ending prior to
2 January 1, 2017 January 1, 2025, an amount equal to 5.25%
3 of the taxpayer's net income for the taxable year.
4 (13) In the case of a corporation, for taxable years
5 beginning prior to January 1, 2017 January 1, 2025, and
6 ending after December 31, 2016 December 31, 2024, an amount
7 equal to the sum of (i) 5.25% of the taxpayer's net income
8 for the period prior to January 1, 2017 January 1, 2025, as
9 calculated under Section 202.5, and (ii) 4.8% of the
10 taxpayer's net income for the period after December 31,
11 2016 December 31, 2024, as calculated under Section 202.5.
12 (14) In the case of a corporation, for taxable years
13 beginning on or after January 1, 2017 January 1, 2025, an
14 amount equal to 4.8% of the taxpayer's net income for the
15 taxable year.
16 The rates under this subsection (b) are subject to the
17provisions of Section 201.5.
18 (c) Personal Property Tax Replacement Income Tax.
19Beginning on July 1, 1979 and thereafter, in addition to such
20income tax, there is also hereby imposed the Personal Property
21Tax Replacement Income Tax measured by net income on every
22corporation (including Subchapter S corporations), partnership
23and trust, for each taxable year ending after June 30, 1979.
24Such taxes are imposed on the privilege of earning or receiving
25income in or as a resident of this State. The Personal Property
26Tax Replacement Income Tax shall be in addition to the income

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1tax imposed by subsections (a) and (b) of this Section and in
2addition to all other occupation or privilege taxes imposed by
3this State or by any municipal corporation or political
4subdivision thereof.
5 (d) Additional Personal Property Tax Replacement Income
6Tax Rates. The personal property tax replacement income tax
7imposed by this subsection and subsection (c) of this Section
8in the case of a corporation, other than a Subchapter S
9corporation and except as adjusted by subsection (d-1), shall
10be an additional amount equal to 2.85% of such taxpayer's net
11income for the taxable year, except that beginning on January
121, 1981, and thereafter, the rate of 2.85% specified in this
13subsection shall be reduced to 2.5%, and in the case of a
14partnership, trust or a Subchapter S corporation shall be an
15additional amount equal to 1.5% of such taxpayer's net income
16for the taxable year.
17 (d-1) Rate reduction for certain foreign insurers. In the
18case of a foreign insurer, as defined by Section 35A-5 of the
19Illinois Insurance Code, whose state or country of domicile
20imposes on insurers domiciled in Illinois a retaliatory tax
21(excluding any insurer whose premiums from reinsurance assumed
22are 50% or more of its total insurance premiums as determined
23under paragraph (2) of subsection (b) of Section 304, except
24that for purposes of this determination premiums from
25reinsurance do not include premiums from inter-affiliate
26reinsurance arrangements), beginning with taxable years ending

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1on or after December 31, 1999, the sum of the rates of tax
2imposed by subsections (b) and (d) shall be reduced (but not
3increased) to the rate at which the total amount of tax imposed
4under this Act, net of all credits allowed under this Act,
5shall equal (i) the total amount of tax that would be imposed
6on the foreign insurer's net income allocable to Illinois for
7the taxable year by such foreign insurer's state or country of
8domicile if that net income were subject to all income taxes
9and taxes measured by net income imposed by such foreign
10insurer's state or country of domicile, net of all credits
11allowed or (ii) a rate of zero if no such tax is imposed on such
12income by the foreign insurer's state of domicile. For the
13purposes of this subsection (d-1), an inter-affiliate includes
14a mutual insurer under common management.
15 (1) For the purposes of subsection (d-1), in no event
16 shall the sum of the rates of tax imposed by subsections
17 (b) and (d) be reduced below the rate at which the sum of:
18 (A) the total amount of tax imposed on such foreign
19 insurer under this Act for a taxable year, net of all
20 credits allowed under this Act, plus
21 (B) the privilege tax imposed by Section 409 of the
22 Illinois Insurance Code, the fire insurance company
23 tax imposed by Section 12 of the Fire Investigation
24 Act, and the fire department taxes imposed under
25 Section 11-10-1 of the Illinois Municipal Code,
26 equals 1.25% for taxable years ending prior to December 31,

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1 2003, or 1.75% for taxable years ending on or after
2 December 31, 2003, of the net taxable premiums written for
3 the taxable year, as described by subsection (1) of Section
4 409 of the Illinois Insurance Code. This paragraph will in
5 no event increase the rates imposed under subsections (b)
6 and (d).
7 (2) Any reduction in the rates of tax imposed by this
8 subsection shall be applied first against the rates imposed
9 by subsection (b) and only after the tax imposed by
10 subsection (a) net of all credits allowed under this
11 Section other than the credit allowed under subsection (i)
12 has been reduced to zero, against the rates imposed by
13 subsection (d).
14 This subsection (d-1) is exempt from the provisions of
15Section 250.
16 (e) Investment credit. A taxpayer shall be allowed a credit
17against the Personal Property Tax Replacement Income Tax for
18investment in qualified property.
19 (1) A taxpayer shall be allowed a credit equal to .5%
20 of the basis of qualified property placed in service during
21 the taxable year, provided such property is placed in
22 service on or after July 1, 1984. There shall be allowed an
23 additional credit equal to .5% of the basis of qualified
24 property placed in service during the taxable year,
25 provided such property is placed in service on or after
26 July 1, 1986, and the taxpayer's base employment within

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1 Illinois has increased by 1% or more over the preceding
2 year as determined by the taxpayer's employment records
3 filed with the Illinois Department of Employment Security.
4 Taxpayers who are new to Illinois shall be deemed to have
5 met the 1% growth in base employment for the first year in
6 which they file employment records with the Illinois
7 Department of Employment Security. The provisions added to
8 this Section by Public Act 85-1200 (and restored by Public
9 Act 87-895) shall be construed as declaratory of existing
10 law and not as a new enactment. If, in any year, the
11 increase in base employment within Illinois over the
12 preceding year is less than 1%, the additional credit shall
13 be limited to that percentage times a fraction, the
14 numerator of which is .5% and the denominator of which is
15 1%, but shall not exceed .5%. The investment credit shall
16 not be allowed to the extent that it would reduce a
17 taxpayer's liability in any tax year below zero, nor may
18 any credit for qualified property be allowed for any year
19 other than the year in which the property was placed in
20 service in Illinois. For tax years ending on or after
21 December 31, 1987, and on or before December 31, 1988, the
22 credit shall be allowed for the tax year in which the
23 property is placed in service, or, if the amount of the
24 credit exceeds the tax liability for that year, whether it
25 exceeds the original liability or the liability as later
26 amended, such excess may be carried forward and applied to

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1 the tax liability of the 5 taxable years following the
2 excess credit years if the taxpayer (i) makes investments
3 which cause the creation of a minimum of 2,000 full-time
4 equivalent jobs in Illinois, (ii) is located in an
5 enterprise zone established pursuant to the Illinois
6 Enterprise Zone Act and (iii) is certified by the
7 Department of Commerce and Community Affairs (now
8 Department of Commerce and Economic Opportunity) as
9 complying with the requirements specified in clause (i) and
10 (ii) by July 1, 1986. The Department of Commerce and
11 Community Affairs (now Department of Commerce and Economic
12 Opportunity) shall notify the Department of Revenue of all
13 such certifications immediately. For tax years ending
14 after December 31, 1988, the credit shall be allowed for
15 the tax year in which the property is placed in service,
16 or, if the amount of the credit exceeds the tax liability
17 for that year, whether it exceeds the original liability or
18 the liability as later amended, such excess may be carried
19 forward and applied to the tax liability of the 5 taxable
20 years following the excess credit years. The credit shall
21 be applied to the earliest year for which there is a
22 liability. If there is credit from more than one tax year
23 that is available to offset a liability, earlier credit
24 shall be applied first.
25 (2) The term "qualified property" means property
26 which:

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1 (A) is tangible, whether new or used, including
2 buildings and structural components of buildings and
3 signs that are real property, but not including land or
4 improvements to real property that are not a structural
5 component of a building such as landscaping, sewer
6 lines, local access roads, fencing, parking lots, and
7 other appurtenances;
8 (B) is depreciable pursuant to Section 167 of the
9 Internal Revenue Code, except that "3-year property"
10 as defined in Section 168(c)(2)(A) of that Code is not
11 eligible for the credit provided by this subsection
12 (e);
13 (C) is acquired by purchase as defined in Section
14 179(d) of the Internal Revenue Code;
15 (D) is used in Illinois by a taxpayer who is
16 primarily engaged in manufacturing, or in mining coal
17 or fluorite, or in retailing, or was placed in service
18 on or after July 1, 2006 in a River Edge Redevelopment
19 Zone established pursuant to the River Edge
20 Redevelopment Zone Act; and
21 (E) has not previously been used in Illinois in
22 such a manner and by such a person as would qualify for
23 the credit provided by this subsection (e) or
24 subsection (f).
25 (3) For purposes of this subsection (e),
26 "manufacturing" means the material staging and production

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1 of tangible personal property by procedures commonly
2 regarded as manufacturing, processing, fabrication, or
3 assembling which changes some existing material into new
4 shapes, new qualities, or new combinations. For purposes of
5 this subsection (e) the term "mining" shall have the same
6 meaning as the term "mining" in Section 613(c) of the
7 Internal Revenue Code. For purposes of this subsection (e),
8 the term "retailing" means the sale of tangible personal
9 property for use or consumption and not for resale, or
10 services rendered in conjunction with the sale of tangible
11 personal property for use or consumption and not for
12 resale. For purposes of this subsection (e), "tangible
13 personal property" has the same meaning as when that term
14 is used in the Retailers' Occupation Tax Act, and, for
15 taxable years ending after December 31, 2008, does not
16 include the generation, transmission, or distribution of
17 electricity.
18 (4) The basis of qualified property shall be the basis
19 used to compute the depreciation deduction for federal
20 income tax purposes.
21 (5) If the basis of the property for federal income tax
22 depreciation purposes is increased after it has been placed
23 in service in Illinois by the taxpayer, the amount of such
24 increase shall be deemed property placed in service on the
25 date of such increase in basis.
26 (6) The term "placed in service" shall have the same

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1 meaning as under Section 46 of the Internal Revenue Code.
2 (7) If during any taxable year, any property ceases to
3 be qualified property in the hands of the taxpayer within
4 48 months after being placed in service, or the situs of
5 any qualified property is moved outside Illinois within 48
6 months after being placed in service, the Personal Property
7 Tax Replacement Income Tax for such taxable year shall be
8 increased. Such increase shall be determined by (i)
9 recomputing the investment credit which would have been
10 allowed for the year in which credit for such property was
11 originally allowed by eliminating such property from such
12 computation and, (ii) subtracting such recomputed credit
13 from the amount of credit previously allowed. For the
14 purposes of this paragraph (7), a reduction of the basis of
15 qualified property resulting from a redetermination of the
16 purchase price shall be deemed a disposition of qualified
17 property to the extent of such reduction.
18 (8) Unless the investment credit is extended by law,
19 the basis of qualified property shall not include costs
20 incurred after December 31, 2018, except for costs incurred
21 pursuant to a binding contract entered into on or before
22 December 31, 2018.
23 (9) Each taxable year ending before December 31, 2000,
24 a partnership may elect to pass through to its partners the
25 credits to which the partnership is entitled under this
26 subsection (e) for the taxable year. A partner may use the

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1 credit allocated to him or her under this paragraph only
2 against the tax imposed in subsections (c) and (d) of this
3 Section. If the partnership makes that election, those
4 credits shall be allocated among the partners in the
5 partnership in accordance with the rules set forth in
6 Section 704(b) of the Internal Revenue Code, and the rules
7 promulgated under that Section, and the allocated amount of
8 the credits shall be allowed to the partners for that
9 taxable year. The partnership shall make this election on
10 its Personal Property Tax Replacement Income Tax return for
11 that taxable year. The election to pass through the credits
12 shall be irrevocable.
13 For taxable years ending on or after December 31, 2000,
14 a partner that qualifies its partnership for a subtraction
15 under subparagraph (I) of paragraph (2) of subsection (d)
16 of Section 203 or a shareholder that qualifies a Subchapter
17 S corporation for a subtraction under subparagraph (S) of
18 paragraph (2) of subsection (b) of Section 203 shall be
19 allowed a credit under this subsection (e) equal to its
20 share of the credit earned under this subsection (e) during
21 the taxable year by the partnership or Subchapter S
22 corporation, determined in accordance with the
23 determination of income and distributive share of income
24 under Sections 702 and 704 and Subchapter S of the Internal
25 Revenue Code. This paragraph is exempt from the provisions
26 of Section 250.

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1 (f) Investment credit; Enterprise Zone; River Edge
2Redevelopment Zone.
3 (1) A taxpayer shall be allowed a credit against the
4 tax imposed by subsections (a) and (b) of this Section for
5 investment in qualified property which is placed in service
6 in an Enterprise Zone created pursuant to the Illinois
7 Enterprise Zone Act or, for property placed in service on
8 or after July 1, 2006, a River Edge Redevelopment Zone
9 established pursuant to the River Edge Redevelopment Zone
10 Act. For partners, shareholders of Subchapter S
11 corporations, and owners of limited liability companies,
12 if the liability company is treated as a partnership for
13 purposes of federal and State income taxation, there shall
14 be allowed a credit under this subsection (f) to be
15 determined in accordance with the determination of income
16 and distributive share of income under Sections 702 and 704
17 and Subchapter S of the Internal Revenue Code. The credit
18 shall be .5% of the basis for such property. The credit
19 shall be available only in the taxable year in which the
20 property is placed in service in the Enterprise Zone or
21 River Edge Redevelopment Zone and shall not be allowed to
22 the extent that it would reduce a taxpayer's liability for
23 the tax imposed by subsections (a) and (b) of this Section
24 to below zero. For tax years ending on or after December
25 31, 1985, the credit shall be allowed for the tax year in
26 which the property is placed in service, or, if the amount

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1 of the credit exceeds the tax liability for that year,
2 whether it exceeds the original liability or the liability
3 as later amended, such excess may be carried forward and
4 applied to the tax liability of the 5 taxable years
5 following the excess credit year. The credit shall be
6 applied to the earliest year for which there is a
7 liability. If there is credit from more than one tax year
8 that is available to offset a liability, the credit
9 accruing first in time shall be applied first.
10 (2) The term qualified property means property which:
11 (A) is tangible, whether new or used, including
12 buildings and structural components of buildings;
13 (B) is depreciable pursuant to Section 167 of the
14 Internal Revenue Code, except that "3-year property"
15 as defined in Section 168(c)(2)(A) of that Code is not
16 eligible for the credit provided by this subsection
17 (f);
18 (C) is acquired by purchase as defined in Section
19 179(d) of the Internal Revenue Code;
20 (D) is used in the Enterprise Zone or River Edge
21 Redevelopment Zone by the taxpayer; and
22 (E) has not been previously used in Illinois in
23 such a manner and by such a person as would qualify for
24 the credit provided by this subsection (f) or
25 subsection (e).
26 (3) The basis of qualified property shall be the basis

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1 used to compute the depreciation deduction for federal
2 income tax purposes.
3 (4) If the basis of the property for federal income tax
4 depreciation purposes is increased after it has been placed
5 in service in the Enterprise Zone or River Edge
6 Redevelopment Zone by the taxpayer, the amount of such
7 increase shall be deemed property placed in service on the
8 date of such increase in basis.
9 (5) The term "placed in service" shall have the same
10 meaning as under Section 46 of the Internal Revenue Code.
11 (6) If during any taxable year, any property ceases to
12 be qualified property in the hands of the taxpayer within
13 48 months after being placed in service, or the situs of
14 any qualified property is moved outside the Enterprise Zone
15 or River Edge Redevelopment Zone within 48 months after
16 being placed in service, the tax imposed under subsections
17 (a) and (b) of this Section for such taxable year shall be
18 increased. Such increase shall be determined by (i)
19 recomputing the investment credit which would have been
20 allowed for the year in which credit for such property was
21 originally allowed by eliminating such property from such
22 computation, and (ii) subtracting such recomputed credit
23 from the amount of credit previously allowed. For the
24 purposes of this paragraph (6), a reduction of the basis of
25 qualified property resulting from a redetermination of the
26 purchase price shall be deemed a disposition of qualified

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1 property to the extent of such reduction.
2 (7) There shall be allowed an additional credit equal
3 to 0.5% of the basis of qualified property placed in
4 service during the taxable year in a River Edge
5 Redevelopment Zone, provided such property is placed in
6 service on or after July 1, 2006, and the taxpayer's base
7 employment within Illinois has increased by 1% or more over
8 the preceding year as determined by the taxpayer's
9 employment records filed with the Illinois Department of
10 Employment Security. Taxpayers who are new to Illinois
11 shall be deemed to have met the 1% growth in base
12 employment for the first year in which they file employment
13 records with the Illinois Department of Employment
14 Security. If, in any year, the increase in base employment
15 within Illinois over the preceding year is less than 1%,
16 the additional credit shall be limited to that percentage
17 times a fraction, the numerator of which is 0.5% and the
18 denominator of which is 1%, but shall not exceed 0.5%.
19 (g) (Blank).
20 (h) Investment credit; High Impact Business.
21 (1) Subject to subsections (b) and (b-5) of Section 5.5
22 of the Illinois Enterprise Zone Act, a taxpayer shall be
23 allowed a credit against the tax imposed by subsections (a)
24 and (b) of this Section for investment in qualified
25 property which is placed in service by a Department of
26 Commerce and Economic Opportunity designated High Impact

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1 Business. The credit shall be .5% of the basis for such
2 property. The credit shall not be available (i) until the
3 minimum investments in qualified property set forth in
4 subdivision (a)(3)(A) of Section 5.5 of the Illinois
5 Enterprise Zone Act have been satisfied or (ii) until the
6 time authorized in subsection (b-5) of the Illinois
7 Enterprise Zone Act for entities designated as High Impact
8 Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
9 (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
10 Act, and shall not be allowed to the extent that it would
11 reduce a taxpayer's liability for the tax imposed by
12 subsections (a) and (b) of this Section to below zero. The
13 credit applicable to such investments shall be taken in the
14 taxable year in which such investments have been completed.
15 The credit for additional investments beyond the minimum
16 investment by a designated high impact business authorized
17 under subdivision (a)(3)(A) of Section 5.5 of the Illinois
18 Enterprise Zone Act shall be available only in the taxable
19 year in which the property is placed in service and shall
20 not be allowed to the extent that it would reduce a
21 taxpayer's liability for the tax imposed by subsections (a)
22 and (b) of this Section to below zero. For tax years ending
23 on or after December 31, 1987, the credit shall be allowed
24 for the tax year in which the property is placed in
25 service, or, if the amount of the credit exceeds the tax
26 liability for that year, whether it exceeds the original

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1 liability or the liability as later amended, such excess
2 may be carried forward and applied to the tax liability of
3 the 5 taxable years following the excess credit year. The
4 credit shall be applied to the earliest year for which
5 there is a liability. If there is credit from more than one
6 tax year that is available to offset a liability, the
7 credit accruing first in time shall be applied first.
8 Changes made in this subdivision (h)(1) by Public Act
9 88-670 restore changes made by Public Act 85-1182 and
10 reflect existing law.
11 (2) The term qualified property means property which:
12 (A) is tangible, whether new or used, including
13 buildings and structural components of buildings;
14 (B) is depreciable pursuant to Section 167 of the
15 Internal Revenue Code, except that "3-year property"
16 as defined in Section 168(c)(2)(A) of that Code is not
17 eligible for the credit provided by this subsection
18 (h);
19 (C) is acquired by purchase as defined in Section
20 179(d) of the Internal Revenue Code; and
21 (D) is not eligible for the Enterprise Zone
22 Investment Credit provided by subsection (f) of this
23 Section.
24 (3) The basis of qualified property shall be the basis
25 used to compute the depreciation deduction for federal
26 income tax purposes.

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1 (4) If the basis of the property for federal income tax
2 depreciation purposes is increased after it has been placed
3 in service in a federally designated Foreign Trade Zone or
4 Sub-Zone located in Illinois by the taxpayer, the amount of
5 such increase shall be deemed property placed in service on
6 the date of such increase in basis.
7 (5) The term "placed in service" shall have the same
8 meaning as under Section 46 of the Internal Revenue Code.
9 (6) If during any taxable year ending on or before
10 December 31, 1996, any property ceases to be qualified
11 property in the hands of the taxpayer within 48 months
12 after being placed in service, or the situs of any
13 qualified property is moved outside Illinois within 48
14 months after being placed in service, the tax imposed under
15 subsections (a) and (b) of this Section for such taxable
16 year shall be increased. Such increase shall be determined
17 by (i) recomputing the investment credit which would have
18 been allowed for the year in which credit for such property
19 was originally allowed by eliminating such property from
20 such computation, and (ii) subtracting such recomputed
21 credit from the amount of credit previously allowed. For
22 the purposes of this paragraph (6), a reduction of the
23 basis of qualified property resulting from a
24 redetermination of the purchase price shall be deemed a
25 disposition of qualified property to the extent of such
26 reduction.

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1 (7) Beginning with tax years ending after December 31,
2 1996, if a taxpayer qualifies for the credit under this
3 subsection (h) and thereby is granted a tax abatement and
4 the taxpayer relocates its entire facility in violation of
5 the explicit terms and length of the contract under Section
6 18-183 of the Property Tax Code, the tax imposed under
7 subsections (a) and (b) of this Section shall be increased
8 for the taxable year in which the taxpayer relocated its
9 facility by an amount equal to the amount of credit
10 received by the taxpayer under this subsection (h).
11 (i) Credit for Personal Property Tax Replacement Income
12Tax. For tax years ending prior to December 31, 2003, a credit
13shall be allowed against the tax imposed by subsections (a) and
14(b) of this Section for the tax imposed by subsections (c) and
15(d) of this Section. This credit shall be computed by
16multiplying the tax imposed by subsections (c) and (d) of this
17Section by a fraction, the numerator of which is base income
18allocable to Illinois and the denominator of which is Illinois
19base income, and further multiplying the product by the tax
20rate imposed by subsections (a) and (b) of this Section.
21 Any credit earned on or after December 31, 1986 under this
22subsection which is unused in the year the credit is computed
23because it exceeds the tax liability imposed by subsections (a)
24and (b) for that year (whether it exceeds the original
25liability or the liability as later amended) may be carried
26forward and applied to the tax liability imposed by subsections

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1(a) and (b) of the 5 taxable years following the excess credit
2year, provided that no credit may be carried forward to any
3year ending on or after December 31, 2003. This credit shall be
4applied first to the earliest year for which there is a
5liability. If there is a credit under this subsection from more
6than one tax year that is available to offset a liability the
7earliest credit arising under this subsection shall be applied
8first.
9 If, during any taxable year ending on or after December 31,
101986, the tax imposed by subsections (c) and (d) of this
11Section for which a taxpayer has claimed a credit under this
12subsection (i) is reduced, the amount of credit for such tax
13shall also be reduced. Such reduction shall be determined by
14recomputing the credit to take into account the reduced tax
15imposed by subsections (c) and (d). If any portion of the
16reduced amount of credit has been carried to a different
17taxable year, an amended return shall be filed for such taxable
18year to reduce the amount of credit claimed.
19 (j) Training expense credit. Beginning with tax years
20ending on or after December 31, 1986 and prior to December 31,
212003, a taxpayer shall be allowed a credit against the tax
22imposed by subsections (a) and (b) under this Section for all
23amounts paid or accrued, on behalf of all persons employed by
24the taxpayer in Illinois or Illinois residents employed outside
25of Illinois by a taxpayer, for educational or vocational
26training in semi-technical or technical fields or semi-skilled

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1or skilled fields, which were deducted from gross income in the
2computation of taxable income. The credit against the tax
3imposed by subsections (a) and (b) shall be 1.6% of such
4training expenses. For partners, shareholders of subchapter S
5corporations, and owners of limited liability companies, if the
6liability company is treated as a partnership for purposes of
7federal and State income taxation, there shall be allowed a
8credit under this subsection (j) to be determined in accordance
9with the determination of income and distributive share of
10income under Sections 702 and 704 and subchapter S of the
11Internal Revenue Code.
12 Any credit allowed under this subsection which is unused in
13the year the credit is earned may be carried forward to each of
14the 5 taxable years following the year for which the credit is
15first computed until it is used. This credit shall be applied
16first to the earliest year for which there is a liability. If
17there is a credit under this subsection from more than one tax
18year that is available to offset a liability the earliest
19credit arising under this subsection shall be applied first. No
20carryforward credit may be claimed in any tax year ending on or
21after December 31, 2003.
22 (k) Research and development credit. For tax years ending
23after July 1, 1990 and prior to December 31, 2003, and
24beginning again for tax years ending on or after December 31,
252004, and ending prior to January 1, 2016, a taxpayer shall be
26allowed a credit against the tax imposed by subsections (a) and

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1(b) of this Section for increasing research activities in this
2State. The credit allowed against the tax imposed by
3subsections (a) and (b) shall be equal to 6 1/2% of the
4qualifying expenditures for increasing research activities in
5this State. For partners, shareholders of subchapter S
6corporations, and owners of limited liability companies, if the
7liability company is treated as a partnership for purposes of
8federal and State income taxation, there shall be allowed a
9credit under this subsection to be determined in accordance
10with the determination of income and distributive share of
11income under Sections 702 and 704 and subchapter S of the
12Internal Revenue Code.
13 For purposes of this subsection, "qualifying expenditures"
14means the qualifying expenditures as defined for the federal
15credit for increasing research activities which would be
16allowable under Section 41 of the Internal Revenue Code and
17which are conducted in this State, "qualifying expenditures for
18increasing research activities in this State" means the excess
19of qualifying expenditures for the taxable year in which
20incurred over qualifying expenditures for the base period,
21"qualifying expenditures for the base period" means the average
22of the qualifying expenditures for each year in the base
23period, and "base period" means the 3 taxable years immediately
24preceding the taxable year for which the determination is being
25made.
26 Any credit in excess of the tax liability for the taxable

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1year may be carried forward. A taxpayer may elect to have the
2unused credit shown on its final completed return carried over
3as a credit against the tax liability for the following 5
4taxable years or until it has been fully used, whichever occurs
5first; provided that no credit earned in a tax year ending
6prior to December 31, 2003 may be carried forward to any year
7ending on or after December 31, 2003.
8 If an unused credit is carried forward to a given year from
92 or more earlier years, that credit arising in the earliest
10year will be applied first against the tax liability for the
11given year. If a tax liability for the given year still
12remains, the credit from the next earliest year will then be
13applied, and so on, until all credits have been used or no tax
14liability for the given year remains. Any remaining unused
15credit or credits then will be carried forward to the next
16following year in which a tax liability is incurred, except
17that no credit can be carried forward to a year which is more
18than 5 years after the year in which the expense for which the
19credit is given was incurred.
20 No inference shall be drawn from this amendatory Act of the
2191st General Assembly in construing this Section for taxable
22years beginning before January 1, 1999.
23 (l) Environmental Remediation Tax Credit.
24 (i) For tax years ending after December 31, 1997 and on
25 or before December 31, 2001, a taxpayer shall be allowed a
26 credit against the tax imposed by subsections (a) and (b)

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1 of this Section for certain amounts paid for unreimbursed
2 eligible remediation costs, as specified in this
3 subsection. For purposes of this Section, "unreimbursed
4 eligible remediation costs" means costs approved by the
5 Illinois Environmental Protection Agency ("Agency") under
6 Section 58.14 of the Environmental Protection Act that were
7 paid in performing environmental remediation at a site for
8 which a No Further Remediation Letter was issued by the
9 Agency and recorded under Section 58.10 of the
10 Environmental Protection Act. The credit must be claimed
11 for the taxable year in which Agency approval of the
12 eligible remediation costs is granted. The credit is not
13 available to any taxpayer if the taxpayer or any related
14 party caused or contributed to, in any material respect, a
15 release of regulated substances on, in, or under the site
16 that was identified and addressed by the remedial action
17 pursuant to the Site Remediation Program of the
18 Environmental Protection Act. After the Pollution Control
19 Board rules are adopted pursuant to the Illinois
20 Administrative Procedure Act for the administration and
21 enforcement of Section 58.9 of the Environmental
22 Protection Act, determinations as to credit availability
23 for purposes of this Section shall be made consistent with
24 those rules. For purposes of this Section, "taxpayer"
25 includes a person whose tax attributes the taxpayer has
26 succeeded to under Section 381 of the Internal Revenue Code

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1 and "related party" includes the persons disallowed a
2 deduction for losses by paragraphs (b), (c), and (f)(1) of
3 Section 267 of the Internal Revenue Code by virtue of being
4 a related taxpayer, as well as any of its partners. The
5 credit allowed against the tax imposed by subsections (a)
6 and (b) shall be equal to 25% of the unreimbursed eligible
7 remediation costs in excess of $100,000 per site, except
8 that the $100,000 threshold shall not apply to any site
9 contained in an enterprise zone as determined by the
10 Department of Commerce and Community Affairs (now
11 Department of Commerce and Economic Opportunity). The
12 total credit allowed shall not exceed $40,000 per year with
13 a maximum total of $150,000 per site. For partners and
14 shareholders of subchapter S corporations, there shall be
15 allowed a credit under this subsection to be determined in
16 accordance with the determination of income and
17 distributive share of income under Sections 702 and 704 and
18 subchapter S of the Internal Revenue Code.
19 (ii) A credit allowed under this subsection that is
20 unused in the year the credit is earned may be carried
21 forward to each of the 5 taxable years following the year
22 for which the credit is first earned until it is used. The
23 term "unused credit" does not include any amounts of
24 unreimbursed eligible remediation costs in excess of the
25 maximum credit per site authorized under paragraph (i).
26 This credit shall be applied first to the earliest year for

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1 which there is a liability. If there is a credit under this
2 subsection from more than one tax year that is available to
3 offset a liability, the earliest credit arising under this
4 subsection shall be applied first. A credit allowed under
5 this subsection may be sold to a buyer as part of a sale of
6 all or part of the remediation site for which the credit
7 was granted. The purchaser of a remediation site and the
8 tax credit shall succeed to the unused credit and remaining
9 carry-forward period of the seller. To perfect the
10 transfer, the assignor shall record the transfer in the
11 chain of title for the site and provide written notice to
12 the Director of the Illinois Department of Revenue of the
13 assignor's intent to sell the remediation site and the
14 amount of the tax credit to be transferred as a portion of
15 the sale. In no event may a credit be transferred to any
16 taxpayer if the taxpayer or a related party would not be
17 eligible under the provisions of subsection (i).
18 (iii) For purposes of this Section, the term "site"
19 shall have the same meaning as under Section 58.2 of the
20 Environmental Protection Act.
21 (m) Education expense credit. Beginning with tax years
22ending after December 31, 1999, a taxpayer who is the custodian
23of one or more qualifying pupils shall be allowed a credit
24against the tax imposed by subsections (a) and (b) of this
25Section for qualified education expenses incurred on behalf of
26the qualifying pupils. The credit shall be equal to 25% of

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1qualified education expenses, but in no event may the total
2credit under this subsection claimed by a family that is the
3custodian of qualifying pupils exceed $500. In no event shall a
4credit under this subsection reduce the taxpayer's liability
5under this Act to less than zero. This subsection is exempt
6from the provisions of Section 250 of this Act.
7 For purposes of this subsection:
8 "Qualifying pupils" means individuals who (i) are
9residents of the State of Illinois, (ii) are under the age of
1021 at the close of the school year for which a credit is
11sought, and (iii) during the school year for which a credit is
12sought were full-time pupils enrolled in a kindergarten through
13twelfth grade education program at any school, as defined in
14this subsection.
15 "Qualified education expense" means the amount incurred on
16behalf of a qualifying pupil in excess of $250 for tuition,
17book fees, and lab fees at the school in which the pupil is
18enrolled during the regular school year.
19 "School" means any public or nonpublic elementary or
20secondary school in Illinois that is in compliance with Title
21VI of the Civil Rights Act of 1964 and attendance at which
22satisfies the requirements of Section 26-1 of the School Code,
23except that nothing shall be construed to require a child to
24attend any particular public or nonpublic school to qualify for
25the credit under this Section.
26 "Custodian" means, with respect to qualifying pupils, an

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1Illinois resident who is a parent, the parents, a legal
2guardian, or the legal guardians of the qualifying pupils.
3 (n) River Edge Redevelopment Zone site remediation tax
4credit.
5 (i) For tax years ending on or after December 31, 2006,
6 a taxpayer shall be allowed a credit against the tax
7 imposed by subsections (a) and (b) of this Section for
8 certain amounts paid for unreimbursed eligible remediation
9 costs, as specified in this subsection. For purposes of
10 this Section, "unreimbursed eligible remediation costs"
11 means costs approved by the Illinois Environmental
12 Protection Agency ("Agency") under Section 58.14a of the
13 Environmental Protection Act that were paid in performing
14 environmental remediation at a site within a River Edge
15 Redevelopment Zone for which a No Further Remediation
16 Letter was issued by the Agency and recorded under Section
17 58.10 of the Environmental Protection Act. The credit must
18 be claimed for the taxable year in which Agency approval of
19 the eligible remediation costs is granted. The credit is
20 not available to any taxpayer if the taxpayer or any
21 related party caused or contributed to, in any material
22 respect, a release of regulated substances on, in, or under
23 the site that was identified and addressed by the remedial
24 action pursuant to the Site Remediation Program of the
25 Environmental Protection Act. Determinations as to credit
26 availability for purposes of this Section shall be made

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1 consistent with rules adopted by the Pollution Control
2 Board pursuant to the Illinois Administrative Procedure
3 Act for the administration and enforcement of Section 58.9
4 of the Environmental Protection Act. For purposes of this
5 Section, "taxpayer" includes a person whose tax attributes
6 the taxpayer has succeeded to under Section 381 of the
7 Internal Revenue Code and "related party" includes the
8 persons disallowed a deduction for losses by paragraphs
9 (b), (c), and (f)(1) of Section 267 of the Internal Revenue
10 Code by virtue of being a related taxpayer, as well as any
11 of its partners. The credit allowed against the tax imposed
12 by subsections (a) and (b) shall be equal to 25% of the
13 unreimbursed eligible remediation costs in excess of
14 $100,000 per site.
15 (ii) A credit allowed under this subsection that is
16 unused in the year the credit is earned may be carried
17 forward to each of the 5 taxable years following the year
18 for which the credit is first earned until it is used. This
19 credit shall be applied first to the earliest year for
20 which there is a liability. If there is a credit under this
21 subsection from more than one tax year that is available to
22 offset a liability, the earliest credit arising under this
23 subsection shall be applied first. A credit allowed under
24 this subsection may be sold to a buyer as part of a sale of
25 all or part of the remediation site for which the credit
26 was granted. The purchaser of a remediation site and the

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1 tax credit shall succeed to the unused credit and remaining
2 carry-forward period of the seller. To perfect the
3 transfer, the assignor shall record the transfer in the
4 chain of title for the site and provide written notice to
5 the Director of the Illinois Department of Revenue of the
6 assignor's intent to sell the remediation site and the
7 amount of the tax credit to be transferred as a portion of
8 the sale. In no event may a credit be transferred to any
9 taxpayer if the taxpayer or a related party would not be
10 eligible under the provisions of subsection (i).
11 (iii) For purposes of this Section, the term "site"
12 shall have the same meaning as under Section 58.2 of the
13 Environmental Protection Act.
14 (o) For each of taxable years during the Compassionate Use
15of Medical Cannabis Pilot Program, a surcharge is imposed on
16all taxpayers on income arising from the sale or exchange of
17capital assets, depreciable business property, real property
18used in the trade or business, and Section 197 intangibles of
19an organization registrant under the Compassionate Use of
20Medical Cannabis Pilot Program Act. The amount of the surcharge
21is equal to the amount of federal income tax liability for the
22taxable year attributable to those sales and exchanges. The
23surcharge imposed does not apply if:
24 (1) the medical cannabis cultivation center
25 registration, medical cannabis dispensary registration, or
26 the property of a registration is transferred as a result

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1 of any of the following:
2 (A) bankruptcy, a receivership, or a debt
3 adjustment initiated by or against the initial
4 registration or the substantial owners of the initial
5 registration;
6 (B) cancellation, revocation, or termination of
7 any registration by the Illinois Department of Public
8 Health;
9 (C) a determination by the Illinois Department of
10 Public Health that transfer of the registration is in
11 the best interests of Illinois qualifying patients as
12 defined by the Compassionate Use of Medical Cannabis
13 Pilot Program Act;
14 (D) the death of an owner of the equity interest in
15 a registrant;
16 (E) the acquisition of a controlling interest in
17 the stock or substantially all of the assets of a
18 publicly traded company;
19 (F) a transfer by a parent company to a wholly
20 owned subsidiary; or
21 (G) the transfer or sale to or by one person to
22 another person where both persons were initial owners
23 of the registration when the registration was issued;
24 or
25 (2) the cannabis cultivation center registration,
26 medical cannabis dispensary registration, or the

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1 controlling interest in a registrant's property is
2 transferred in a transaction to lineal descendants in which
3 no gain or loss is recognized or as a result of a
4 transaction in accordance with Section 351 of the Internal
5 Revenue Code in which no gain or loss is recognized.
6(Source: P.A. 97-2, eff. 5-6-11; 97-636, eff. 6-1-12; 97-905,
7eff. 8-7-12; 98-109, eff. 7-25-13; 98-122, eff. 1-1-14; 98-756,
8eff. 7-16-14.)
9 (35 ILCS 5/901) (from Ch. 120, par. 9-901)
10 Sec. 901. Collection authority.
11 (a) In general.
12 The Department shall collect the taxes imposed by this Act.
13The Department shall collect certified past due child support
14amounts under Section 2505-650 of the Department of Revenue Law
15(20 ILCS 2505/2505-650). Except as provided in subsections (c),
16(e), (f), (g), and (h) of this Section, money collected
17pursuant to subsections (a) and (b) of Section 201 of this Act
18shall be paid into the General Revenue Fund in the State
19treasury; money collected pursuant to subsections (c) and (d)
20of Section 201 of this Act shall be paid into the Personal
21Property Tax Replacement Fund, a special fund in the State
22Treasury; and money collected under Section 2505-650 of the
23Department of Revenue Law (20 ILCS 2505/2505-650) shall be paid
24into the Child Support Enforcement Trust Fund, a special fund
25outside the State Treasury, or to the State Disbursement Unit

HB0357- 36 -LRB100 04330 HLH 14336 b
1established under Section 10-26 of the Illinois Public Aid
2Code, as directed by the Department of Healthcare and Family
3Services.
4 (b) Local Government Distributive Fund.
5 Beginning August 1, 1969, and continuing through June 30,
61994, the Treasurer shall transfer each month from the General
7Revenue Fund to a special fund in the State treasury, to be
8known as the "Local Government Distributive Fund", an amount
9equal to 1/12 of the net revenue realized from the tax imposed
10by subsections (a) and (b) of Section 201 of this Act during
11the preceding month. Beginning July 1, 1994, and continuing
12through June 30, 1995, the Treasurer shall transfer each month
13from the General Revenue Fund to the Local Government
14Distributive Fund an amount equal to 1/11 of the net revenue
15realized from the tax imposed by subsections (a) and (b) of
16Section 201 of this Act during the preceding month. Beginning
17July 1, 1995 and continuing through January 31, 2011, and
18beginning again on February 1, 2017, the Treasurer shall
19transfer each month from the General Revenue Fund to the Local
20Government Distributive Fund an amount equal to the net of (i)
211/10 of the net revenue realized from the tax imposed by
22subsections (a) and (b) of Section 201 of the Illinois Income
23Tax Act during the preceding month (ii) minus, beginning July
241, 2003 and ending June 30, 2004, $6,666,666, and beginning
25July 1, 2004, zero. Beginning February 1, 2011, and continuing
26through January 31, 2015, the Treasurer shall transfer each

HB0357- 37 -LRB100 04330 HLH 14336 b
1month from the General Revenue Fund to the Local Government
2Distributive Fund an amount equal to the sum of (i) 6% (10% of
3the ratio of the 3% individual income tax rate prior to 2011 to
4the 5% individual income tax rate after 2010) of the net
5revenue realized from the tax imposed by subsections (a) and
6(b) of Section 201 of this Act upon individuals, trusts, and
7estates during the preceding month and (ii) 6.86% (10% of the
8ratio of the 4.8% corporate income tax rate prior to 2011 to
9the 7% corporate income tax rate after 2010) of the net revenue
10realized from the tax imposed by subsections (a) and (b) of
11Section 201 of this Act upon corporations during the preceding
12month. Beginning February 1, 2015 and continuing through
13January 31, 2017 January 31, 2025, the Treasurer shall transfer
14each month from the General Revenue Fund to the Local
15Government Distributive Fund an amount equal to the sum of (i)
168% (10% of the ratio of the 3% individual income tax rate prior
17to 2011 to the 3.75% individual income tax rate after 2014) of
18the net revenue realized from the tax imposed by subsections
19(a) and (b) of Section 201 of this Act upon individuals,
20trusts, and estates during the preceding month and (ii) 9.14%
21(10% of the ratio of the 4.8% corporate income tax rate prior
22to 2011 to the 5.25% corporate income tax rate after 2014) of
23the net revenue realized from the tax imposed by subsections
24(a) and (b) of Section 201 of this Act upon corporations during
25the preceding month. Beginning February 1, 2025, the Treasurer
26shall transfer each month from the General Revenue Fund to the

HB0357- 38 -LRB100 04330 HLH 14336 b
1Local Government Distributive Fund an amount equal to the sum
2of (i) 9.23% (10% of the ratio of the 3% individual income tax
3rate prior to 2011 to the 3.25% individual income tax rate
4after 2024) of the net revenue realized from the tax imposed by
5subsections (a) and (b) of Section 201 of this Act upon
6individuals, trusts, and estates during the preceding month and
7(ii) 10% of the net revenue realized from the tax imposed by
8subsections (a) and (b) of Section 201 of this Act upon
9corporations during the preceding month. Net revenue realized
10for a month shall be defined as the revenue from the tax
11imposed by subsections (a) and (b) of Section 201 of this Act
12which is deposited in the General Revenue Fund, the Education
13Assistance Fund, the Income Tax Surcharge Local Government
14Distributive Fund, the Fund for the Advancement of Education,
15and the Commitment to Human Services Fund during the month
16minus the amount paid out of the General Revenue Fund in State
17warrants during that same month as refunds to taxpayers for
18overpayment of liability under the tax imposed by subsections
19(a) and (b) of Section 201 of this Act.
20 Beginning on August 26, 2014 (the effective date of Public
21Act 98-1052), the Comptroller shall perform the transfers
22required by this subsection (b) no later than 60 days after he
23or she receives the certification from the Treasurer as
24provided in Section 1 of the State Revenue Sharing Act.
25 (c) Deposits Into Income Tax Refund Fund.
26 (1) Beginning on January 1, 1989 and thereafter, the

HB0357- 39 -LRB100 04330 HLH 14336 b
1 Department shall deposit a percentage of the amounts
2 collected pursuant to subsections (a) and (b)(1), (2), and
3 (3), of Section 201 of this Act into a fund in the State
4 treasury known as the Income Tax Refund Fund. The
5 Department shall deposit 6% of such amounts during the
6 period beginning January 1, 1989 and ending on June 30,
7 1989. Beginning with State fiscal year 1990 and for each
8 fiscal year thereafter, the percentage deposited into the
9 Income Tax Refund Fund during a fiscal year shall be the
10 Annual Percentage. For fiscal years 1999 through 2001, the
11 Annual Percentage shall be 7.1%. For fiscal year 2003, the
12 Annual Percentage shall be 8%. For fiscal year 2004, the
13 Annual Percentage shall be 11.7%. Upon the effective date
14 of this amendatory Act of the 93rd General Assembly, the
15 Annual Percentage shall be 10% for fiscal year 2005. For
16 fiscal year 2006, the Annual Percentage shall be 9.75%. For
17 fiscal year 2007, the Annual Percentage shall be 9.75%. For
18 fiscal year 2008, the Annual Percentage shall be 7.75%. For
19 fiscal year 2009, the Annual Percentage shall be 9.75%. For
20 fiscal year 2010, the Annual Percentage shall be 9.75%. For
21 fiscal year 2011, the Annual Percentage shall be 8.75%. For
22 fiscal year 2012, the Annual Percentage shall be 8.75%. For
23 fiscal year 2013, the Annual Percentage shall be 9.75%. For
24 fiscal year 2014, the Annual Percentage shall be 9.5%. For
25 fiscal year 2015, the Annual Percentage shall be 10%. For
26 all other fiscal years, the Annual Percentage shall be

HB0357- 40 -LRB100 04330 HLH 14336 b
1 calculated as a fraction, the numerator of which shall be
2 the amount of refunds approved for payment by the
3 Department during the preceding fiscal year as a result of
4 overpayment of tax liability under subsections (a) and
5 (b)(1), (2), and (3) of Section 201 of this Act plus the
6 amount of such refunds remaining approved but unpaid at the
7 end of the preceding fiscal year, minus the amounts
8 transferred into the Income Tax Refund Fund from the
9 Tobacco Settlement Recovery Fund, and the denominator of
10 which shall be the amounts which will be collected pursuant
11 to subsections (a) and (b)(1), (2), and (3) of Section 201
12 of this Act during the preceding fiscal year; except that
13 in State fiscal year 2002, the Annual Percentage shall in
14 no event exceed 7.6%. The Director of Revenue shall certify
15 the Annual Percentage to the Comptroller on the last
16 business day of the fiscal year immediately preceding the
17 fiscal year for which it is to be effective.
18 (2) Beginning on January 1, 1989 and thereafter, the
19 Department shall deposit a percentage of the amounts
20 collected pursuant to subsections (a) and (b)(6), (7), and
21 (8), (c) and (d) of Section 201 of this Act into a fund in
22 the State treasury known as the Income Tax Refund Fund. The
23 Department shall deposit 18% of such amounts during the
24 period beginning January 1, 1989 and ending on June 30,
25 1989. Beginning with State fiscal year 1990 and for each
26 fiscal year thereafter, the percentage deposited into the

HB0357- 41 -LRB100 04330 HLH 14336 b
1 Income Tax Refund Fund during a fiscal year shall be the
2 Annual Percentage. For fiscal years 1999, 2000, and 2001,
3 the Annual Percentage shall be 19%. For fiscal year 2003,
4 the Annual Percentage shall be 27%. For fiscal year 2004,
5 the Annual Percentage shall be 32%. Upon the effective date
6 of this amendatory Act of the 93rd General Assembly, the
7 Annual Percentage shall be 24% for fiscal year 2005. For
8 fiscal year 2006, the Annual Percentage shall be 20%. For
9 fiscal year 2007, the Annual Percentage shall be 17.5%. For
10 fiscal year 2008, the Annual Percentage shall be 15.5%. For
11 fiscal year 2009, the Annual Percentage shall be 17.5%. For
12 fiscal year 2010, the Annual Percentage shall be 17.5%. For
13 fiscal year 2011, the Annual Percentage shall be 17.5%. For
14 fiscal year 2012, the Annual Percentage shall be 17.5%. For
15 fiscal year 2013, the Annual Percentage shall be 14%. For
16 fiscal year 2014, the Annual Percentage shall be 13.4%. For
17 fiscal year 2015, the Annual Percentage shall be 14%. For
18 all other fiscal years, the Annual Percentage shall be
19 calculated as a fraction, the numerator of which shall be
20 the amount of refunds approved for payment by the
21 Department during the preceding fiscal year as a result of
22 overpayment of tax liability under subsections (a) and
23 (b)(6), (7), and (8), (c) and (d) of Section 201 of this
24 Act plus the amount of such refunds remaining approved but
25 unpaid at the end of the preceding fiscal year, and the
26 denominator of which shall be the amounts which will be

HB0357- 42 -LRB100 04330 HLH 14336 b
1 collected pursuant to subsections (a) and (b)(6), (7), and
2 (8), (c) and (d) of Section 201 of this Act during the
3 preceding fiscal year; except that in State fiscal year
4 2002, the Annual Percentage shall in no event exceed 23%.
5 The Director of Revenue shall certify the Annual Percentage
6 to the Comptroller on the last business day of the fiscal
7 year immediately preceding the fiscal year for which it is
8 to be effective.
9 (3) The Comptroller shall order transferred and the
10 Treasurer shall transfer from the Tobacco Settlement
11 Recovery Fund to the Income Tax Refund Fund (i) $35,000,000
12 in January, 2001, (ii) $35,000,000 in January, 2002, and
13 (iii) $35,000,000 in January, 2003.
14 (d) Expenditures from Income Tax Refund Fund.
15 (1) Beginning January 1, 1989, money in the Income Tax
16 Refund Fund shall be expended exclusively for the purpose
17 of paying refunds resulting from overpayment of tax
18 liability under Section 201 of this Act, for paying rebates
19 under Section 208.1 in the event that the amounts in the
20 Homeowners' Tax Relief Fund are insufficient for that
21 purpose, and for making transfers pursuant to this
22 subsection (d).
23 (2) The Director shall order payment of refunds
24 resulting from overpayment of tax liability under Section
25 201 of this Act from the Income Tax Refund Fund only to the
26 extent that amounts collected pursuant to Section 201 of

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1 this Act and transfers pursuant to this subsection (d) and
2 item (3) of subsection (c) have been deposited and retained
3 in the Fund.
4 (3) As soon as possible after the end of each fiscal
5 year, the Director shall order transferred and the State
6 Treasurer and State Comptroller shall transfer from the
7 Income Tax Refund Fund to the Personal Property Tax
8 Replacement Fund an amount, certified by the Director to
9 the Comptroller, equal to the excess of the amount
10 collected pursuant to subsections (c) and (d) of Section
11 201 of this Act deposited into the Income Tax Refund Fund
12 during the fiscal year over the amount of refunds resulting
13 from overpayment of tax liability under subsections (c) and
14 (d) of Section 201 of this Act paid from the Income Tax
15 Refund Fund during the fiscal year.
16 (4) As soon as possible after the end of each fiscal
17 year, the Director shall order transferred and the State
18 Treasurer and State Comptroller shall transfer from the
19 Personal Property Tax Replacement Fund to the Income Tax
20 Refund Fund an amount, certified by the Director to the
21 Comptroller, equal to the excess of the amount of refunds
22 resulting from overpayment of tax liability under
23 subsections (c) and (d) of Section 201 of this Act paid
24 from the Income Tax Refund Fund during the fiscal year over
25 the amount collected pursuant to subsections (c) and (d) of
26 Section 201 of this Act deposited into the Income Tax

HB0357- 44 -LRB100 04330 HLH 14336 b
1 Refund Fund during the fiscal year.
2 (4.5) As soon as possible after the end of fiscal year
3 1999 and of each fiscal year thereafter, the Director shall
4 order transferred and the State Treasurer and State
5 Comptroller shall transfer from the Income Tax Refund Fund
6 to the General Revenue Fund any surplus remaining in the
7 Income Tax Refund Fund as of the end of such fiscal year;
8 excluding for fiscal years 2000, 2001, and 2002 amounts
9 attributable to transfers under item (3) of subsection (c)
10 less refunds resulting from the earned income tax credit.
11 (5) This Act shall constitute an irrevocable and
12 continuing appropriation from the Income Tax Refund Fund
13 for the purpose of paying refunds upon the order of the
14 Director in accordance with the provisions of this Section.
15 (e) Deposits into the Education Assistance Fund and the
16Income Tax Surcharge Local Government Distributive Fund.
17 On July 1, 1991, and thereafter, of the amounts collected
18pursuant to subsections (a) and (b) of Section 201 of this Act,
19minus deposits into the Income Tax Refund Fund, the Department
20shall deposit 7.3% into the Education Assistance Fund in the
21State Treasury. Beginning July 1, 1991, and continuing through
22January 31, 1993, of the amounts collected pursuant to
23subsections (a) and (b) of Section 201 of the Illinois Income
24Tax Act, minus deposits into the Income Tax Refund Fund, the
25Department shall deposit 3.0% into the Income Tax Surcharge
26Local Government Distributive Fund in the State Treasury.

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1Beginning February 1, 1993 and continuing through June 30,
21993, of the amounts collected pursuant to subsections (a) and
3(b) of Section 201 of the Illinois Income Tax Act, minus
4deposits into the Income Tax Refund Fund, the Department shall
5deposit 4.4% into the Income Tax Surcharge Local Government
6Distributive Fund in the State Treasury. Beginning July 1,
71993, and continuing through June 30, 1994, of the amounts
8collected under subsections (a) and (b) of Section 201 of this
9Act, minus deposits into the Income Tax Refund Fund, the
10Department shall deposit 1.475% into the Income Tax Surcharge
11Local Government Distributive Fund in the State Treasury.
12 (f) Deposits into the Fund for the Advancement of
13Education. Beginning February 1, 2015 and until February 1,
142017, the Department shall deposit 1/30 the following portions
15of the revenue realized from the tax imposed upon individuals,
16trusts, and estates by subsections (a) and (b) of Section 201
17of this Act during the preceding month, minus deposits into the
18Income Tax Refund Fund, into the Fund for the Advancement of
19Education. :
20 (1) beginning February 1, 2015, and prior to February
21 1, 2025, 1/30; and
22 (2) beginning February 1, 2025, 1/26.
23 If the rate of tax imposed by subsection (a) and (b) of
24Section 201 is reduced pursuant to Section 201.5 of this Act,
25the Department shall not make the deposits required by this
26subsection (f) on or after the effective date of the reduction.

HB0357- 46 -LRB100 04330 HLH 14336 b
1 (g) Deposits into the Commitment to Human Services Fund.
2Beginning February 1, 2015 and until February 1, 2017, the
3Department shall deposit 1/30 the following portions of the
4revenue realized from the tax imposed upon individuals, trusts,
5and estates by subsections (a) and (b) of Section 201 of this
6Act during the preceding month, minus deposits into the Income
7Tax Refund Fund, into the Commitment to Human Services Fund. :
8 (1) beginning February 1, 2015, and prior to February
9 1, 2025, 1/30; and
10 (2) beginning February 1, 2025, 1/26.
11 If the rate of tax imposed by subsection (a) and (b) of
12Section 201 is reduced pursuant to Section 201.5 of this Act,
13the Department shall not make the deposits required by this
14subsection (g) on or after the effective date of the reduction.
15 (h) Deposits into the Tax Compliance and Administration
16Fund. Beginning on the first day of the first calendar month to
17occur on or after August 26, 2014 (the effective date of Public
18Act 98-1098), each month the Department shall pay into the Tax
19Compliance and Administration Fund, to be used, subject to
20appropriation, to fund additional auditors and compliance
21personnel at the Department, an amount equal to 1/12 of 5% of
22the cash receipts collected during the preceding fiscal year by
23the Audit Bureau of the Department from the tax imposed by
24subsections (a), (b), (c), and (d) of Section 201 of this Act,
25net of deposits into the Income Tax Refund Fund made from those
26cash receipts.

HB0357- 47 -LRB100 04330 HLH 14336 b
1(Source: P.A. 98-24, eff. 6-19-13; 98-674, eff. 6-30-14;
298-1052, eff. 8-26-14; 98-1098, eff. 8-26-14; 99-78, eff.
37-20-15.)
4 Section 99. Effective date. This Act takes effect upon
5becoming law.
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