HB 4816

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Full Text of HB4816
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	HB4816 - 104th General Assembly
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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB4816
Introduced , by Rep. Joe C. Sosnowski
SYNOPSIS AS INTRODUCED:
35 ILCS 405/2	  from Ch. 120, par. 405A-2
Amends the Illinois Estate and Generation-Skipping Transfer Tax Act. Provides that, for persons dying on or after January 1, 2027, the State tax credit shall be calculated as though the decedent's federal taxable estate did not include the decedent's business interest in a manufacturing business located in this State. Defines "manufacturing business". Effective immediately.
LRB104 17280 HLH 30702 b
A BILL FOR
		HB4816		LRB104 17280 HLH 30702 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 Estate and Generation-Skipping
5Transfer Tax Act is amended by changing Section 2 as follows:
6    (35 ILCS 405/2)  (from Ch. 120, par. 405A-2)
7    Sec. 2. Definitions. In this Act:
8    "Federal estate tax" means the tax due to the United
9States with respect to a taxable transfer under Chapter 11 of
10the Internal Revenue Code.
11    "Federal generation-skipping transfer tax" means the tax
12due to the United States with respect to a taxable transfer
13under Chapter 13 of the Internal Revenue Code.
14    "Federal return" means the federal estate tax return with
15respect to the federal estate tax and means the federal
16generation-skipping transfer tax return with respect to the
17federal generation-skipping transfer tax.
18    "Federal transfer tax" means the federal estate tax or the
19federal generation-skipping transfer tax.
20    "Illinois estate tax" means the tax due to this State with
21respect to a taxable transfer.
22    "Illinois generation-skipping transfer tax" means the tax
23due to this State with respect to a taxable transfer that gives
		HB4816	- 2 -	LRB104 17280 HLH 30702 b
1rise to a federal generation-skipping transfer tax.
2    "Illinois transfer tax" means the Illinois estate tax or
3the Illinois generation-skipping transfer tax.
4    "Internal Revenue Code" means, unless otherwise provided,
5the Internal Revenue Code of 1986, as amended from time to
6time.
7    "Manufacturing business" means a business within the 
8manufacturing sector, as defined in North American Industry 
9Classification System (NAICS) codes 31 through 33.
10    "Non-resident trust" means a trust that is not a resident
11of this State for purposes of the Illinois Income Tax Act, as
12amended from time to time.
13    "Person" means and includes any individual, trust, estate,
14partnership, association, company or corporation.
15    "Qualified heir" means a qualified heir as defined in
16Section 2032A(e)(1) of the Internal Revenue Code.
17    "Resident trust" means a trust that is a resident of this
18State for purposes of the Illinois Income Tax Act, as amended
19from time to time.
20    "State" means any state, territory or possession of the
21United States and the District of Columbia.
22    "State tax credit" means:
23    (a) For persons dying on or after January 1, 2003 and
24through December 31, 2005, an amount equal to the full credit
25calculable under Section 2011 or Section 2604 of the Internal
26Revenue Code as the credit would have been computed and
		HB4816	- 3 -	LRB104 17280 HLH 30702 b
1allowed under the Internal Revenue Code as in effect on
2December 31, 2001, without the reduction in the State Death
3Tax Credit as provided in Section 2011(b)(2) or the
4termination of the State Death Tax Credit as provided in
5Section 2011(f) as enacted by the Economic Growth and Tax
6Relief Reconciliation Act of 2001, but recognizing the
7increased applicable exclusion amount through December 31,
82005.
9    (b) For persons dying after December 31, 2005 and on or
10before December 31, 2009, and for persons dying after December
1131, 2010, an amount equal to the full credit calculable under
12Section 2011 or 2604 of the Internal Revenue Code as the credit
13would have been computed and allowed under the Internal
14Revenue Code as in effect on December 31, 2001, without the
15reduction in the State Death Tax Credit as provided in Section
162011(b)(2) or the termination of the State Death Tax Credit as
17provided in Section 2011(f) as enacted by the Economic Growth
18and Tax Relief Reconciliation Act of 2001, but with the 
19following modifications:
20        (1) the exclusion amount shall be: [recognizing the ]
21    [exclusion amount of only (i)]
22            (A) $2,000,000 for persons dying prior to January
23        1, 2012; [,]
24            (B) [(ii)] $3,500,000 for persons dying on or after
25        January 1, 2012 and prior to January 1, 2013; and [, and]
26            (C) [(iii)] $4,000,000 for persons dying on or after
		HB4816	- 4 -	LRB104 17280 HLH 30702 b
1        January 1, 2013; [,]
2        (2) for persons dying on or after January 1, 2027, the 
3    State tax credit shall be calculated as though the 
4    decedent's federal taxable estate did not include the 
5    decedent's business interest in a manufacturing business 
6    located in this State; and
7        (3) the State tax credit shall be calculated [and] with
8    a reduction to the adjusted taxable estate for any
9    qualified terminable interest property election as defined
10    in subsection (b-1) of this Section.
11    (b-1) The person required to file the Illinois return may
12elect on a timely filed Illinois return a marital deduction
13for qualified terminable interest property under Section
142056(b)(7) of the Internal Revenue Code for purposes of the
15Illinois estate tax that is separate and independent of any
16qualified terminable interest property election for federal
17estate tax purposes. For purposes of the Illinois estate tax,
18the inclusion of property in the gross estate of a surviving
19spouse is the same as under Section 2044 of the Internal
20Revenue Code.
21    In the case of any trust for which a State or federal
22qualified terminable interest property election is made, the
23trustee may not retain non-income producing assets for more
24than a reasonable amount of time without the consent of the
25surviving spouse.
26    "Taxable transfer" means an event that gives rise to a
		HB4816	- 5 -	LRB104 17280 HLH 30702 b
1state tax credit, including any credit as a result of the
2imposition of an additional tax under Section 2032A(c) of the
3Internal Revenue Code.
4    "Transferee" means a transferee within the meaning of
5Section 2603(a)(1) and Section 6901(h) of the Internal Revenue
6Code.
7    "Transferred property" means:
8        (1) With respect to a taxable transfer occurring at
9    the death of an individual, the deceased individual's
10    gross estate as defined in Section 2031 of the Internal
11    Revenue Code.
12        (2) With respect to a taxable transfer occurring as a
13    result of a taxable termination as defined in Section
14    2612(a) of the Internal Revenue Code, the taxable amount
15    determined under Section 2622(a) of the Internal Revenue
16    Code.
17        (3) With respect to a taxable transfer occurring as a
18    result of a taxable distribution as defined in Section
19    2612(b) of the Internal Revenue Code, the taxable amount
20    determined under Section 2621(a) of the Internal Revenue
21    Code.
22        (4) With respect to an event which causes the
23    imposition of an additional estate tax under Section
24    2032A(c) of the Internal Revenue Code, the qualified real
25    property that was disposed of or which ceased to be used
26    for the qualified use, within the meaning of Section
		HB4816	- 6 -	LRB104 17280 HLH 30702 b
1    2032A(c)(1) of the Internal Revenue Code.
2    "Trust" includes a trust as defined in Section 2652(b)(1)
3of the Internal Revenue Code.
4(Source: P.A. 96-789, eff. 9-8-09; 96-1496, eff. 1-13-11;
597-636, eff. 6-1-12; revised 7-24-25.)
6    Section 99. Effective date. This Act takes effect upon
7becoming law.