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SB 3799

Illinois Senate•In Senate Committee

Summary

SB 3799, “INC TX-ENTITY BASE”, was introduced in the Senate on Feb 6, 2026 by Sen. Celina Villanueva (D) with 1 co-sponsor. It was referred to Assignments, and last saw action on May 22, 2026: Senate Committee Amendment No. 1 Rule 3-9(a) / Re-referred to Assignments.

Record

Text

SB 3799 has 1 co-sponsor.

sb3799/introduced.txt
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Full Text of SB3799
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	SB3799 - 104th General Assembly
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			Senate Amendment 001
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		Senate Amendment 001
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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3799
Introduced 2/6/2026, by Sen. Celina Villanueva
SYNOPSIS AS INTRODUCED:
35 ILCS 5/201
Amends the Illinois Income Tax Act. In provisions concerning the entity-level tax, provides that a partnership making an entity-level tax election may elect to determine its tax base using a full distributive share method or an Illinois-sourced income method. Effective immediately.
LRB104 20679 HLH 34178 b
A BILL FOR
		SB3799		LRB104 20679 HLH 34178 b
    AN ACT concerning revenue.
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
    Section 5. The Illinois Income Tax Act is amended by
changing Section 201 as follows:
    (35 ILCS 5/201)
    Sec. 201. Tax imposed.
    (a) In general. A tax measured by net income is hereby
imposed on every individual, corporation, trust and estate for
each taxable year ending after July 31, 1969 on the privilege
of earning or receiving income in or as a resident of this
State. Such tax shall be in addition to all other occupation or
privilege taxes imposed by this State or by any municipal
corporation or political subdivision thereof.
    (b) Rates. The tax imposed by subsection (a) of this
Section shall be determined as follows, except as adjusted by
subsection (d-1):
        (1) In the case of an individual, trust or estate, for
    taxable years ending prior to July 1, 1989, an amount
    equal to 2 1/2% of the taxpayer's net income for the
    taxable year.
        (2) In the case of an individual, trust or estate, for
    taxable years beginning prior to July 1, 1989 and ending
		SB3799	- 2 -	LRB104 20679 HLH 34178 b
    after June 30, 1989, an amount equal to the sum of (i) 2
    1/2% of the taxpayer's net income for the period prior to
    July 1, 1989, as calculated under Section 202.3, and (ii)
    3% of the taxpayer's net income for the period after June
    30, 1989, as calculated under Section 202.3.
        (3) In the case of an individual, trust or estate, for
    taxable years beginning after June 30, 1989, and ending
    prior to January 1, 2011, an amount equal to 3% of the
    taxpayer's net income for the taxable year.
        (4) In the case of an individual, trust, or estate,
    for taxable years beginning prior to January 1, 2011, and
    ending after December 31, 2010, an amount equal to the sum
    of (i) 3% of the taxpayer's net income for the period prior
    to January 1, 2011, as calculated under Section 202.5, and
    (ii) 5% of the taxpayer's net income for the period after
    December 31, 2010, as calculated under Section 202.5.
        (5) In the case of an individual, trust, or estate,
    for taxable years beginning on or after January 1, 2011,
    and ending prior to January 1, 2015, an amount equal to 5%
    of the taxpayer's net income for the taxable year.
        (5.1) In the case of an individual, trust, or estate,
    for taxable years beginning prior to January 1, 2015, and
    ending after December 31, 2014, an amount equal to the sum
    of (i) 5% of the taxpayer's net income for the period prior
    to January 1, 2015, as calculated under Section 202.5, and
    (ii) 3.75% of the taxpayer's net income for the period
		SB3799	- 3 -	LRB104 20679 HLH 34178 b
    after December 31, 2014, as calculated under Section
    202.5.
        (5.2) In the case of an individual, trust, or estate,
    for taxable years beginning on or after January 1, 2015,
    and ending prior to July 1, 2017, an amount equal to 3.75%
    of the taxpayer's net income for the taxable year.
        (5.3) In the case of an individual, trust, or estate,
    for taxable years beginning prior to July 1, 2017, and
    ending after June 30, 2017, an amount equal to the sum of
    (i) 3.75% of the taxpayer's net income for the period
    prior to July 1, 2017, as calculated under Section 202.5,
    and (ii) 4.95% of the taxpayer's net income for the period
    after June 30, 2017, as calculated under Section 202.5.
        (5.4) In the case of an individual, trust, or estate,
    for taxable years beginning on or after July 1, 2017, an
    amount equal to 4.95% of the taxpayer's net income for the
    taxable year.
        (6) In the case of a corporation, for taxable years
    ending prior to July 1, 1989, an amount equal to 4% of the
    taxpayer's net income for the taxable year.
        (7) In the case of a corporation, for taxable years
    beginning prior to July 1, 1989 and ending after June 30,
    1989, an amount equal to the sum of (i) 4% of the
    taxpayer's net income for the period prior to July 1,
    1989, as calculated under Section 202.3, and (ii) 4.8% of
    the taxpayer's net income for the period after June 30,
		SB3799	- 4 -	LRB104 20679 HLH 34178 b
    1989, as calculated under Section 202.3.
        (8) In the case of a corporation, for taxable years
    beginning after June 30, 1989, and ending prior to January
    1, 2011, an amount equal to 4.8% of the taxpayer's net
    income for the taxable year.
        (9) In the case of a corporation, for taxable years
    beginning prior to January 1, 2011, and ending after
    December 31, 2010, an amount equal to the sum of (i) 4.8%
    of the taxpayer's net income for the period prior to
    January 1, 2011, as calculated under Section 202.5, and
    (ii) 7% of the taxpayer's net income for the period after
    December 31, 2010, as calculated under Section 202.5.
        (10) In the case of a corporation, for taxable years
    beginning on or after January 1, 2011, and ending prior to
    January 1, 2015, an amount equal to 7% of the taxpayer's
    net income for the taxable year.
        (11) In the case of a corporation, for taxable years
    beginning prior to January 1, 2015, and ending after
    December 31, 2014, an amount equal to the sum of (i) 7% of
    the taxpayer's net income for the period prior to January
    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
    of the taxpayer's net income for the period after December
    31, 2014, as calculated under Section 202.5.
        (12) In the case of a corporation, for taxable years
    beginning on or after January 1, 2015, and ending prior to
    July 1, 2017, an amount equal to 5.25% of the taxpayer's
		SB3799	- 5 -	LRB104 20679 HLH 34178 b
    net income for the taxable year.
        (13) In the case of a corporation, for taxable years
    beginning prior to July 1, 2017, and ending after June 30,
    2017, an amount equal to the sum of (i) 5.25% of the
    taxpayer's net income for the period prior to July 1,
    2017, as calculated under Section 202.5, and (ii) 7% of
    the taxpayer's net income for the period after June 30,
    2017, as calculated under Section 202.5.
        (14) In the case of a corporation, for taxable years
    beginning on or after July 1, 2017, an amount equal to 7%
    of the taxpayer's net income for the taxable year.
    The rates under this subsection (b) are subject to the
provisions of Section 201.5.
    (b-5) Surcharge; sale or exchange of assets, properties,
and intangibles of organization gaming licensees. For each of
taxable years 2019 through 2027, a surcharge is imposed on all
taxpayers on income arising from the sale or exchange of
capital assets, depreciable business property, real property
used in the trade or business, and Section 197 intangibles (i)
of an organization licensee under the Illinois Horse Racing
Act of 1975 and (ii) of an organization gaming licensee under
the Illinois Gambling Act. The amount of the surcharge is
equal to the amount of federal income tax liability for the
taxable year attributable to those sales and exchanges. The
surcharge imposed shall not apply if:
        (1) the organization gaming license, organization
		SB3799	- 6 -	LRB104 20679 HLH 34178 b
    license, or racetrack property is transferred as a result
    of any of the following:
            (A) bankruptcy, a receivership, or a debt
        adjustment initiated by or against the initial
        licensee or the substantial owners of the initial
        licensee;
            (B) cancellation, revocation, or termination of
        any such license by the Illinois Gaming Board or the
        Illinois Racing Board;
            (C) a determination by the Illinois Gaming Board
        that transfer of the license is in the best interests
        of Illinois gaming;
            (D) the death of an owner of the equity interest in
        a licensee;
            (E) the acquisition of a controlling interest in
        the stock or substantially all of the assets of a
        publicly traded company;
            (F) a transfer by a parent company to a wholly
        owned subsidiary; or
            (G) the transfer or sale to or by one person to
        another person where both persons were initial owners
        of the license when the license was issued; or
        (2) the controlling interest in the organization
    gaming license, organization license, or racetrack
    property is transferred in a transaction to lineal
    descendants in which no gain or loss is recognized or as a
		SB3799	- 7 -	LRB104 20679 HLH 34178 b
    result of a transaction in accordance with Section 351 of
    the Internal Revenue Code in which no gain or loss is
    recognized; or
        (3) live horse racing was not conducted in 2010 at a
    racetrack located within 3 miles of the Mississippi River
    under a license issued pursuant to the Illinois Horse
    Racing Act of 1975.
    The transfer of an organization gaming license,
organization license, or racetrack property by a person other
than the initial licensee to receive the organization gaming
license is not subject to a surcharge. The Department shall
adopt rules necessary to implement and administer this
subsection.
    (c) Personal Property Tax Replacement Income Tax.
Beginning on July 1, 1979 and thereafter, in addition to such
income tax, there is also hereby imposed the Personal Property
Tax Replacement Income Tax measured by net income on every
corporation (including Subchapter S corporations), partnership
and trust, for each taxable year ending after June 30, 1979.
Such taxes are imposed on the privilege of earning or
receiving income in or as a resident of this State. The
Personal Property Tax Replacement Income Tax shall be in
addition to the income tax imposed by subsections (a) and (b)
of this Section and in addition to all other occupation or
privilege taxes imposed by this State or by any municipal
corporation or political subdivision thereof.
		SB3799	- 8 -	LRB104 20679 HLH 34178 b
    (d) Additional Personal Property Tax Replacement Income
Tax Rates. The personal property tax replacement income tax
imposed by this subsection and subsection (c) of this Section
in the case of a corporation, other than a Subchapter S
corporation and except as adjusted by subsection (d-1), shall
be an additional amount equal to 2.85% of such taxpayer's net
income for the taxable year, except that beginning on January
1, 1981, and thereafter, the rate of 2.85% specified in this
subsection shall be reduced to 2.5%, and in the case of a
partnership, trust or a Subchapter S corporation shall be an
additional amount equal to 1.5% of such taxpayer's net income
for the taxable year.
    (d-1) Rate reduction for certain foreign insurers. In the
case of a foreign insurer, as defined by Section 35A-5 of the
Illinois Insurance Code, whose state or country of domicile
imposes on insurers domiciled in Illinois a retaliatory tax
(excluding any insurer whose premiums from reinsurance assumed
are 50% or more of its total insurance premiums as determined
under paragraph (2) of subsection (b) of Section 304, except
that for purposes of this determination premiums from
reinsurance do not include premiums from inter-affiliate
reinsurance arrangements), beginning with taxable years ending
on or after December 31, 1999, the sum of the rates of tax
imposed by subsections (b) and (d) shall be reduced (but not
increased) to the rate at which the total amount of tax imposed
under this Act, net of all credits allowed under this Act,
		SB3799	- 9 -	LRB104 20679 HLH 34178 b
shall equal (i) the total amount of tax that would be imposed
on the foreign insurer's net income allocable to Illinois for
the taxable year by such foreign insurer's state or country of
domicile if that net income were subject to all income taxes
and taxes measured by net income imposed by such foreign
insurer's state or country of domicile, net of all credits
allowed or (ii) a rate of zero if no such tax is imposed on
such income by the foreign insurer's state of domicile. For
the purposes of this subsection (d-1), an inter-affiliate
includes a mutual insurer under common management.
        (1) For the purposes of subsection (d-1), in no event
    shall the sum of the rates of tax imposed by subsections
    (b) and (d) be reduced below the rate at which the sum of:
            (A) the total amount of tax imposed on such
        foreign insurer under this Act for a taxable year, net
        of all credits allowed under this Act, plus
            (B) the privilege tax imposed by Section 409 of
        the Illinois Insurance Code, the fire insurance
        company tax imposed by Section 12 of the Fire
        Investigation Act, and the fire department taxes
        imposed under Section 11-10-1 of the Illinois
        Municipal Code,
    equals 1.25% for taxable years ending prior to December
    31, 2003, or 1.75% for taxable years ending on or after
    December 31, 2003, of the net taxable premiums written for
    the taxable year, as described by subsection (1) of
		SB3799	- 10 -	LRB104 20679 HLH 34178 b
    Section 409 of the Illinois Insurance Code. This paragraph
    will in no event increase the rates imposed under
    subsections (b) and (d).
        (2) Any reduction in the rates of tax imposed by this
    subsection shall be applied first against the rates
    imposed by subsection (b) and only after the tax imposed
    by subsection (a) net of all credits allowed under this
    Section other than the credit allowed under subsection (i)
    has been reduced to zero, against the rates imposed by
    subsection (d).
    This subsection (d-1) is exempt from the provisions of
Section 250.
    (e) Investment credit. A taxpayer shall be allowed a
credit against the Personal Property Tax Replacement Income
Tax for investment in qualified property.
        (1) A taxpayer shall be allowed a credit equal to .5%
    of the basis of qualified property placed in service
    during the taxable year, provided such property is placed
    in service on or after July 1, 1984. There shall be allowed
    an additional credit equal to .5% of the basis of
    qualified property placed in service during the taxable
    year, provided such property is placed in service on or
    after July 1, 1986, and the taxpayer's base employment
    within Illinois has increased by 1% or more over the
    preceding year as determined by the taxpayer's employment
    records filed with the Illinois Department of Employment
		SB3799	- 11 -	LRB104 20679 HLH 34178 b
    Security. Taxpayers who are new to Illinois shall be
    deemed to have met the 1% growth in base employment for the
    first year in which they file employment records with the
    Illinois Department of Employment Security. The provisions
    added to this Section by Public Act 85-1200 (and restored
    by Public Act 87-895) shall be construed as declaratory of
    existing law and not as a new enactment. If, in any year,
    the increase in base employment within Illinois over the
    preceding year is less than 1%, the additional credit
    shall be limited to that percentage times a fraction, the
    numerator of which is .5% and the denominator of which is
    1%, but shall not exceed .5%. The investment credit shall
    not be allowed to the extent that it would reduce a
    taxpayer's liability in any tax year below zero, nor may
    any credit for qualified property be allowed for any year
    other than the year in which the property was placed in
    service in Illinois. For tax years ending on or after
    December 31, 1987, and on or before December 31, 1988, the
    credit shall be allowed for the tax year in which the
    property is placed in service, or, if the amount of the
    credit exceeds the tax liability for that year, whether it
    exceeds the original liability or the liability as later
    amended, such excess may be carried forward and applied to
    the tax liability of the 5 taxable years following the
    excess credit years if the taxpayer (i) makes investments
    which cause the creation of a minimum of 2,000 full-time
		SB3799	- 12 -	LRB104 20679 HLH 34178 b
    equivalent jobs in Illinois, (ii) is located in an
    enterprise zone established pursuant to the Illinois
    Enterprise Zone Act and (iii) is certified by the
    Department of Commerce and Community Affairs (now
    Department of Commerce and Economic Opportunity) as
    complying with the requirements specified in clause (i)
    and (ii) by July 1, 1986. The Department of Commerce and
    Community Affairs (now Department of Commerce and Economic
    Opportunity) shall notify the Department of Revenue of all
    such certifications immediately. For tax years ending
    after December 31, 1988, the credit shall be allowed for
    the tax year in which the property is placed in service,
    or, if the amount of the credit exceeds the tax liability
    for that year, whether it exceeds the original liability
    or the liability as later amended, such excess may be
    carried forward and applied to the tax liability of the 5
    taxable years following the excess credit years. The
    credit shall be applied to the earliest year for which
    there is a liability. If there is credit from more than one
    tax year that is available to offset a liability, earlier
    credit shall be applied first.
        (2) The term "qualified property" means property
    which:
            (A) is tangible, whether new or used, including
        buildings and structural components of buildings and
        signs that are real property, but not including land
		SB3799	- 13 -	LRB104 20679 HLH 34178 b
        or improvements to real property that are not a
        structural component of a building such as
        landscaping, sewer lines, local access roads, fencing,
        parking lots, and other appurtenances;
            (B) is depreciable pursuant to Section 167 of the
        Internal Revenue Code, except that "3-year property"
        as defined in Section 168(c)(2)(A) of that Code is not
        eligible for the credit provided by this subsection
        (e);
            (C) is acquired by purchase as defined in Section
        179(d) of the Internal Revenue Code;
            (D) is used in Illinois by a taxpayer who is
        primarily engaged in manufacturing, or in mining coal
        or fluorite, or in retailing, or was placed in service
        on or after July 1, 2006 in a River Edge Redevelopment
        Zone established pursuant to the River Edge
        Redevelopment Zone Act; and
            (E) has not previously been used in Illinois in
        such a manner and by such a person as would qualify for
        the credit provided by this subsection (e) or
        subsection (f).
        (3) For purposes of this subsection (e),
    "manufacturing" means the material staging and production
    of tangible personal property by procedures commonly
    regarded as manufacturing, processing, fabrication, or
    assembling which changes some existing material into new
		SB3799	- 14 -	LRB104 20679 HLH 34178 b
    shapes, new qualities, or new combinations. For purposes
    of this subsection (e) the term "mining" shall have the
    same meaning as the term "mining" in Section 613(c) of the
    Internal Revenue Code. For purposes of this subsection
    (e), the term "retailing" means the sale of tangible
    personal property for use or consumption and not for
    resale, or services rendered in conjunction with the sale
    of tangible personal property for use or consumption and
    not for resale. For purposes of this subsection (e),
    "tangible personal property" has the same meaning as when
    that term is used in the Retailers' Occupation Tax Act,
    and, for taxable years ending after December 31, 2008,
    does not include the generation, transmission, or
    distribution of electricity.
        (4) The basis of qualified property shall be the basis
    used to compute the depreciation deduction for federal
    income tax purposes.
        (5) If the basis of the property for federal income
    tax depreciation purposes is increased after it has been
    placed in service in Illinois by the taxpayer, the amount
    of such increase shall be deemed property placed in
    service on the date of such increase in basis.
        (6) The term "placed in service" shall have the same
    meaning as under Section 46 of the Internal Revenue Code.
        (7) If during any taxable year, any property ceases to
    be qualified property in the hands of the taxpayer within
		SB3799	- 15 -	LRB104 20679 HLH 34178 b
    48 months after being placed in service, or the situs of
    any qualified property is moved outside Illinois within 48
    months after being placed in service, the Personal
    Property Tax Replacement Income Tax for such taxable year
    shall be increased. Such increase shall be determined by
    (i) recomputing the investment credit which would have
    been allowed for the year in which credit for such
    property was originally allowed by eliminating such
    property from such computation and, (ii) subtracting such
    recomputed credit from the amount of credit previously
    allowed. For the purposes of this paragraph (7), a
    reduction of the basis of qualified property resulting
    from a redetermination of the purchase price shall be
    deemed a disposition of qualified property to the extent
    of such reduction.
        (8) Unless the investment credit is extended by law,
    the basis of qualified property shall not include costs
    incurred after December 31, 2018, except for costs
    incurred pursuant to a binding contract entered into on or
    before December 31, 2018.
        (9) Each taxable year ending before December 31, 2000,
    a partnership may elect to pass through to its partners
    the credits to which the partnership is entitled under
    this subsection (e) for the taxable year. A partner may
    use the credit allocated to him or her under this
    paragraph only against the tax imposed in subsections (c)
		SB3799	- 16 -	LRB104 20679 HLH 34178 b
    and (d) of this Section. If the partnership makes that
    election, those credits shall be allocated among the
    partners in the partnership in accordance with the rules
    set forth in Section 704(b) of the Internal Revenue Code,
    and the rules promulgated under that Section, and the
    allocated amount of the credits shall be allowed to the
    partners for that taxable year. The partnership shall make
    this election on its Personal Property Tax Replacement
    Income Tax return for that taxable year. The election to
    pass through the credits shall be irrevocable.
        For taxable years ending on or after December 31,
    2000, a partner that qualifies its partnership for a
    subtraction under subparagraph (I) of paragraph (2) of
    subsection (d) of Section 203 or a shareholder that
    qualifies a Subchapter S corporation for a subtraction
    under subparagraph (S) of paragraph (2) of subsection (b)
    of Section 203 shall be allowed a credit under this
    subsection (e) equal to its share of the credit earned
    under this subsection (e) during the taxable year by the
    partnership or Subchapter S corporation, determined in
    accordance with the determination of income and
    distributive share of income under Sections 702 and 704
    and Subchapter S of the Internal Revenue Code. This
    paragraph is exempt from the provisions of Section 250.
    (f) Investment credit; Enterprise Zone; River Edge
Redevelopment Zone.
		SB3799	- 17 -	LRB104 20679 HLH 34178 b
        (1) A taxpayer shall be allowed a credit against the
    tax imposed by subsections (a) and (b) of this Section for
    investment in qualified property which is placed in
    service in an Enterprise Zone created pursuant to the
    Illinois Enterprise Zone Act or, for property placed in
    service on or after July 1, 2006, a River Edge
    Redevelopment Zone established pursuant to the River Edge
    Redevelopment Zone Act. For partners, shareholders of
    Subchapter S corporations, and owners of limited liability
    companies, if the liability company is treated as a
    partnership for purposes of federal and State income
    taxation, for taxable years ending before December 31,
    2023, there shall be allowed a credit under this
    subsection (f) to be determined in accordance with the
    determination of income and distributive share of income
    under Sections 702 and 704 and Subchapter S of the
    Internal Revenue Code. For taxable years ending on or
    after December 31, 2023, for partners and shareholders of
    Subchapter S corporations, the provisions of Section 251
    shall apply with respect to the credit under this
    subsection. The credit shall be .5% of the basis for such
    property. The credit shall be available only in the
    taxable year in which the property is placed in service in
    the Enterprise Zone or River Edge Redevelopment Zone and
    shall not be allowed to the extent that it would reduce a
    taxpayer's liability for the tax imposed by subsections
		SB3799	- 18 -	LRB104 20679 HLH 34178 b
    (a) and (b) of this Section to below zero. For tax years
    ending on or after December 31, 1985, the credit shall be
    allowed for the tax year in which the property is placed in
    service, or, if the amount of the credit exceeds the tax
    liability for that year, whether it exceeds the original
    liability or the liability as later amended, such excess
    may be carried forward and applied to the tax liability of
    the 5 taxable years following the excess credit year. The
    credit shall be applied to the earliest year for which
    there is a liability. If there is credit from more than one
    tax year that is available to offset a liability, the
    credit accruing first in time shall be applied first.
        (2) The term qualified property means property which:
            (A) is tangible, whether new or used, including
        buildings and structural components of buildings;
            (B) is depreciable pursuant to Section 167 of the
        Internal Revenue Code, except that "3-year property"
        as defined in Section 168(c)(2)(A) of that Code is not
        eligible for the credit provided by this subsection
        (f);
            (C) is acquired by purchase as defined in Section
        179(d) of the Internal Revenue Code;
            (D) is used in the Enterprise Zone or River Edge
        Redevelopment Zone by the taxpayer; and
            (E) has not been previously used in Illinois in
        such a manner and by such a person as would qualify for
		SB3799	- 19 -	LRB104 20679 HLH 34178 b
        the credit provided by this subsection (f) or
        subsection (e).
        (3) The basis of qualified property shall be the basis
    used to compute the depreciation deduction for federal
    income tax purposes.
        (4) If the basis of the property for federal income
    tax depreciation purposes is increased after it has been
    placed in service in the Enterprise Zone or River Edge
    Redevelopment Zone by the taxpayer, the amount of such
    increase shall be deemed property placed in service on the
    date of such increase in basis.
        (5) The term "placed in service" shall have the same
    meaning as under Section 46 of the Internal Revenue Code.
        (6) If during any taxable year, any property ceases to
    be qualified property in the hands of the taxpayer within
    48 months after being placed in service, or the situs of
    any qualified property is moved outside the Enterprise
    Zone or River Edge Redevelopment Zone within 48 months
    after being placed in service, the tax imposed under
    subsections (a) and (b) of this Section for such taxable
    year shall be increased. Such increase shall be determined
    by (i) recomputing the investment credit which would have
    been allowed for the year in which credit for such
    property was originally allowed by eliminating such
    property from such computation, and (ii) subtracting such
    recomputed credit from the amount of credit previously
		SB3799	- 20 -	LRB104 20679 HLH 34178 b
    allowed. For the purposes of this paragraph (6), a
    reduction of the basis of qualified property resulting
    from a redetermination of the purchase price shall be
    deemed a disposition of qualified property to the extent
    of such reduction.
        (7) There shall be allowed an additional credit equal
    to 0.5% of the basis of qualified property placed in
    service during the taxable year in a River Edge
    Redevelopment Zone, provided such property is placed in
    service on or after July 1, 2006, and the taxpayer's base
    employment within Illinois has increased by 1% or more
    over the preceding year as determined by the taxpayer's
    employment records filed with the Illinois Department of
    Employment Security. Taxpayers who are new to Illinois
    shall be deemed to have met the 1% growth in base
    employment for the first year in which they file
    employment records with the Illinois Department of
    Employment Security. If, in any year, the increase in base
    employment within Illinois over the preceding year is less
    than 1%, the additional credit shall be limited to that
    percentage times a fraction, the numerator of which is
    0.5% and the denominator of which is 1%, but shall not
    exceed 0.5%.
        (8) For taxable years beginning on or after January 1,
    2021, there shall be allowed an Enterprise Zone
    construction jobs credit against the taxes imposed under
		SB3799	- 21 -	LRB104 20679 HLH 34178 b
    subsections (a) and (b) of this Section as provided in
    Section 13 of the Illinois Enterprise Zone Act.
        The credit or credits may not reduce the taxpayer's
    liability to less than zero. If the amount of the credit or
    credits exceeds the taxpayer's liability, the excess may
    be carried forward and applied against the taxpayer's
    liability in succeeding calendar years in the same manner
    provided under paragraph (4) of Section 211 of this Act.
    The credit or credits shall be applied to the earliest
    year for which there is a tax liability. If there are
    credits from more than one taxable year that are available
    to offset a liability, the earlier credit shall be applied
    first.
        For partners, shareholders of Subchapter S
    corporations, and owners of limited liability companies,
    if the liability company is treated as a partnership for
    the purposes of federal and State income taxation, for
    taxable years ending before December 31, 2023, there shall
    be allowed a credit under this Section to be determined in
    accordance with the determination of income and
    distributive share of income under Sections 702 and 704
    and Subchapter S of the Internal Revenue Code. For taxable
    years ending on or after December 31, 2023, for partners
    and shareholders of Subchapter S corporations, the
    provisions of Section 251 shall apply with respect to the
    credit under this subsection.
		SB3799	- 22 -	LRB104 20679 HLH 34178 b
        The total aggregate amount of credits awarded under
    the Blue Collar Jobs Act (Article 20 of Public Act 101-9)
    shall not exceed $20,000,000 in any State fiscal year.
        This paragraph (8) is exempt from the provisions of
    Section 250.
    (g) (Blank).
    (h) Investment credit; High Impact Business.
        (1) Subject to subsections (b) and (b-5) of Section
    5.5 of the Illinois Enterprise Zone Act, a taxpayer shall
    be allowed a credit against the tax imposed by subsections
    (a) and (b) of this Section for investment in qualified
    property which is placed in service by a Department of
    Commerce and Economic Opportunity designated High Impact
    Business. The credit shall be .5% of the basis for such
    property. The credit shall not be available (i) until the
    minimum investments in qualified property set forth in
    subdivision (a)(3)(A) of Section 5.5 of the Illinois
    Enterprise Zone Act have been satisfied or (ii) until the
    time authorized in subsection (b-5) of the Illinois
    Enterprise Zone Act for entities designated as High Impact
    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
    Act, and shall not be allowed to the extent that it would
    reduce a taxpayer's liability for the tax imposed by
    subsections (a) and (b) of this Section to below zero. The
    credit applicable to such investments shall be taken in
		SB3799	- 23 -	LRB104 20679 HLH 34178 b
    the taxable year in which such investments have been
    completed. The credit for additional investments beyond
    the minimum investment by a designated high impact
    business authorized under subdivision (a)(3)(A) of Section
    5.5 of the Illinois Enterprise Zone Act shall be available
    only in the taxable year in which the property is placed in
    service and shall not be allowed to the extent that it
    would reduce a taxpayer's liability for the tax imposed by
    subsections (a) and (b) of this Section to below zero. For
    tax years ending on or after December 31, 1987, the credit
    shall be allowed for the tax year in which the property is
    placed in service, or, if the amount of the credit exceeds
    the tax liability for that year, whether it exceeds the
    original liability or the liability as later amended, such
    excess may be carried forward and applied to the tax
    liability of the 5 taxable years following the excess
    credit year. The credit shall be applied to the earliest
    year for which there is a liability. If there is credit
    from more than one tax year that is available to offset a
    liability, the credit accruing first in time shall be
    applied first.
        Changes made in this subdivision (h)(1) by Public Act
    88-670 restore changes made by Public Act 85-1182 and
    reflect existing law.
        (2) The term qualified property means property which:
            (A) is tangible, whether new or used, including
		SB3799	- 24 -	LRB104 20679 HLH 34178 b
        buildings and structural components of buildings;
            (B) is depreciable pursuant to Section 167 of the
        Internal Revenue Code, except that "3-year property"
        as defined in Section 168(c)(2)(A) of that Code is not
        eligible for the credit provided by this subsection
        (h);
            (C) is acquired by purchase as defined in Section
        179(d) of the Internal Revenue Code; and
            (D) is not eligible for the Enterprise Zone
        Investment Credit provided by subsection (f) of this
        Section.
        (3) The basis of qualified property shall be the basis
    used to compute the depreciation deduction for federal
    income tax purposes.
        (4) If the basis of the property for federal income
    tax depreciation purposes is increased after it has been
    placed in service in a federally designated Foreign Trade
    Zone or Sub-Zone located in Illinois by the taxpayer, the
    amount of such increase shall be deemed property placed in
    service on the date of such increase in basis.
        (5) The term "placed in service" shall have the same
    meaning as under Section 46 of the Internal Revenue Code.
        (6) If during any taxable year ending on or before
    December 31, 1996, any property ceases to be qualified
    property in the hands of the taxpayer within 48 months
    after being placed in service, or the situs of any
		SB3799	- 25 -	LRB104 20679 HLH 34178 b
    qualified property is moved outside Illinois within 48
    months after being placed in service, the tax imposed
    under subsections (a) and (b) of this Section for such
    taxable year shall be increased. Such increase shall be
    determined by (i) recomputing the investment credit which
    would have been allowed for the year in which credit for
    such property was originally allowed by eliminating such
    property from such computation, and (ii) subtracting such
    recomputed credit from the amount of credit previously
    allowed. For the purposes of this paragraph (6), a
    reduction of the basis of qualified property resulting
    from a redetermination of the purchase price shall be
    deemed a disposition of qualified property to the extent
    of such reduction.
        (7) Beginning with tax years ending after December 31,
    1996, if a taxpayer qualifies for the credit under this
    subsection (h) and thereby is granted a tax abatement and
    the taxpayer relocates its entire facility in violation of
    the explicit terms and length of the contract under
    Section 18-183 of the Property Tax Code, the tax imposed
    under subsections (a) and (b) of this Section shall be
    increased for the taxable year in which the taxpayer
    relocated its facility by an amount equal to the amount of
    credit received by the taxpayer under this subsection (h).
    (h-5) High Impact Business construction jobs credit. For
taxable years beginning on or after January 1, 2021, there
		SB3799	- 26 -	LRB104 20679 HLH 34178 b
shall also be allowed a High Impact Business construction jobs
credit against the tax imposed under subsections (a) and (b)
of this Section as provided in subsections (i) and (j) of
Section 5.5 of the Illinois Enterprise Zone Act.
    The credit or credits may not reduce the taxpayer's
liability to less than zero. If the amount of the credit or
credits exceeds the taxpayer's liability, the excess may be
carried forward and applied against the taxpayer's liability
in succeeding calendar years in the manner provided under
paragraph (4) of Section 211 of this Act. The credit or credits
shall be applied to the earliest year for which there is a tax
liability. If there are credits from more than one taxable
year that are available to offset a liability, the earlier
credit shall be applied first.
    For partners, shareholders of Subchapter S corporations,
and owners of limited liability companies, for taxable years
ending before December 31, 2023, if the liability company is
treated as a partnership for the purposes of federal and State
income taxation, there shall be allowed a credit under this
Section to be determined in accordance with the determination
of income and distributive share of income under Sections 702
and 704 and Subchapter S of the Internal Revenue Code. For
taxable years ending on or after December 31, 2023, for
partners and shareholders of Subchapter S corporations, the
provisions of Section 251 shall apply with respect to the
credit under this subsection.
		SB3799	- 27 -	LRB104 20679 HLH 34178 b
    The total aggregate amount of credits awarded under the
Blue Collar Jobs Act (Article 20 of Public Act 101-9) shall not
exceed $20,000,000 in any State fiscal year.
    This subsection (h-5) is exempt from the provisions of
Section 250.
    (i) Credit for Personal Property Tax Replacement Income
Tax. For tax years ending prior to December 31, 2003, a credit
shall be allowed against the tax imposed by subsections (a)
and (b) of this Section for the tax imposed by subsections (c)
and (d) of this Section. This credit shall be computed by
multiplying the tax imposed by subsections (c) and (d) of this
Section by a fraction, the numerator of which is base income
allocable to Illinois and the denominator of which is Illinois
base income, and further multiplying the product by the tax
rate imposed by subsections (a) and (b) of this Section.
    Any credit earned on or after December 31, 1986 under this
subsection which is unused in the year the credit is computed
because it exceeds the tax liability imposed by subsections
(a) and (b) for that year (whether it exceeds the original
liability or the liability as later amended) may be carried
forward and applied to the tax liability imposed by
subsections (a) and (b) of the 5 taxable years following the
excess credit year, provided that no credit may be carried
forward to any year ending on or after December 31, 2003. This
credit shall be applied first to the earliest year for which
there is a liability. If there is a credit under this
		SB3799	- 28 -	LRB104 20679 HLH 34178 b
subsection from more than one tax year that is available to
offset a liability the earliest credit arising under this
subsection shall be applied first.
    If, during any taxable year ending on or after December
31, 1986, the tax imposed by subsections (c) and (d) of this
Section for which a taxpayer has claimed a credit under this
subsection (i) is reduced, the amount of credit for such tax
shall also be reduced. Such reduction shall be determined by
recomputing the credit to take into account the reduced tax
imposed by subsections (c) and (d). If any portion of the
reduced amount of credit has been carried to a different
taxable year, an amended return shall be filed for such
taxable year to reduce the amount of credit claimed.
    (j) Training expense credit. Beginning with tax years
ending on or after December 31, 1986 and prior to December 31,
2003, a taxpayer shall be allowed a credit against the tax
imposed by subsections (a) and (b) under this Section for all
amounts paid or accrued, on behalf of all persons employed by
the taxpayer in Illinois or Illinois residents employed
outside of Illinois by a taxpayer, for educational or
vocational training in semi-technical or technical fields or
semi-skilled or skilled fields, which were deducted from gross
income in the computation of taxable income. The credit
against the tax imposed by subsections (a) and (b) shall be
1.6% of such training expenses. For partners, shareholders of
subchapter S corporations, and owners of limited liability
		SB3799	- 29 -	LRB104 20679 HLH 34178 b
companies, if the liability company is treated as a
partnership for purposes of federal and State income taxation,
for taxable years ending before December 31, 2023, there shall
be allowed a credit under this subsection (j) to be determined
in accordance with the determination of income and
distributive share of income under Sections 702 and 704 and
subchapter S of the Internal Revenue Code. For taxable years
ending on or after December 31, 2023, for partners and
shareholders of Subchapter S corporations, the provisions of
Section 251 shall apply with respect to the credit under this
subsection.
    Any credit allowed under this subsection which is unused
in the year the credit is earned may be carried forward to each
of the 5 taxable years following the year for which the credit
is first computed until it is used. This credit shall be
applied first to the earliest year for which there is a
liability. If there is a credit under this subsection from
more than one tax year that is available to offset a liability,
the earliest credit arising under this subsection shall be
applied first. No carryforward credit may be claimed in any
tax year ending on or after December 31, 2003.
    (k) Research and development credit. For tax years ending
after July 1, 1990 and prior to December 31, 2003, and
beginning again for tax years ending on or after December 31,
2004, and ending prior to January 1, 2032, a taxpayer shall be
allowed a credit against the tax imposed by subsections (a)
		SB3799	- 30 -	LRB104 20679 HLH 34178 b
and (b) of this Section for increasing research activities in
this State. The credit allowed against the tax imposed by
subsections (a) and (b) shall be equal to 6 1/2% of the
qualifying expenditures for increasing research activities in
this State. For partners, shareholders of subchapter S
corporations, and owners of limited liability companies, if
the liability company is treated as a partnership for purposes
of federal and State income taxation, for taxable years ending
before December 31, 2023, there shall be allowed a credit
under this subsection to be determined in accordance with the
determination of income and distributive share of income under
Sections 702 and 704 and subchapter S of the Internal Revenue
Code. For taxable years ending on or after December 31, 2023,
for partners and shareholders of Subchapter S corporations,
the provisions of Section 251 shall apply with respect to the
credit under this subsection.
    For purposes of this subsection, "qualifying expenditures"
means the qualifying expenditures as defined for the federal
credit for increasing research activities which would be
allowable under Section 41 of the Internal Revenue Code and
which are conducted in this State, "qualifying expenditures
for increasing research activities in this State" means the
excess of qualifying expenditures for the taxable year in
which incurred over qualifying expenditures for the base
period, "qualifying expenditures for the base period" means
the average of the qualifying expenditures for each year in
		SB3799	- 31 -	LRB104 20679 HLH 34178 b
the base period, and "base period" means the 3 taxable years
immediately preceding the taxable year for which the
determination is being made.
    Any credit in excess of the tax liability for the taxable
year may be carried forward. A taxpayer may elect to have the
unused credit shown on its final completed return carried over
as a credit against the tax liability for the following 5
taxable years or until it has been fully used, whichever
occurs first; provided that no credit earned in a tax year
ending prior to December 31, 2003 may be carried forward to any
year ending on or after December 31, 2003.
    If an unused credit is carried forward to a given year from
2 or more earlier years, that credit arising in the earliest
year will be applied first against the tax liability for the
given year. If a tax liability for the given year still
remains, the credit from the next earliest year will then be
applied, and so on, until all credits have been used or no tax
liability for the given year remains. Any remaining unused
credit or credits then will be carried forward to the next
following year in which a tax liability is incurred, except
that no credit can be carried forward to a year which is more
than 5 years after the year in which the expense for which the
credit is given was incurred.
    No inference shall be drawn from Public Act 91-644 in
construing this Section for taxable years beginning before
January 1, 1999.
		SB3799	- 32 -	LRB104 20679 HLH 34178 b
    It is the intent of the General Assembly that the research
and development credit under this subsection (k) shall apply
continuously for all tax years ending on or after December 31,
2004 and ending prior to January 1, 2032, including, but not
limited to, the period beginning on January 1, 2016 and ending
on July 6, 2017 (the effective date of Public Act 100-22). All
actions taken in reliance on the continuation of the credit
under this subsection (k) by any taxpayer are hereby
validated.
    (l) Environmental Remediation Tax Credit.
        (i) For tax years ending after December 31, 1997 and
    on or before December 31, 2001, a taxpayer shall be
    allowed a credit against the tax imposed by subsections
    (a) and (b) of this Section for certain amounts paid for
    unreimbursed eligible remediation costs, as specified in
    this subsection. For purposes of this Section,
    "unreimbursed eligible remediation costs" means costs
    approved by the Illinois Environmental Protection Agency
    ("Agency") under Section 58.14 of the Environmental
    Protection Act that were paid in performing environmental
    remediation at a site for which a No Further Remediation
    Letter was issued by the Agency and recorded under Section
    58.10 of the Environmental Protection Act. The credit must
    be claimed for the taxable year in which Agency approval
    of the eligible remediation costs is granted. The credit
    is not available to any taxpayer if the taxpayer or any
		SB3799	- 33 -	LRB104 20679 HLH 34178 b
    related party caused or contributed to, in any material
    respect, a release of regulated substances on, in, or
    under the site that was identified and addressed by the
    remedial action pursuant to the Site Remediation Program
    of the Environmental Protection Act. After the Pollution
    Control Board rules are adopted pursuant to the Illinois
    Administrative Procedure Act for the administration and
    enforcement of Section 58.9 of the Environmental
    Protection Act, determinations as to credit availability
    for purposes of this Section shall be made consistent with
    those rules. For purposes of this Section, "taxpayer"
    includes a person whose tax attributes the taxpayer has
    succeeded to under Section 381 of the Internal Revenue
    Code and "related party" includes the persons disallowed a
    deduction for losses by paragraphs (b), (c), and (f)(1) of
    Section 267 of the Internal Revenue Code by virtue of
    being a related taxpayer, as well as any of its partners.
    The credit allowed against the tax imposed by subsections
    (a) and (b) shall be equal to 25% of the unreimbursed
    eligible remediation costs in excess of $100,000 per site,
    except that the $100,000 threshold shall not apply to any
    site contained in an enterprise zone as determined by the
    Department of Commerce and Community Affairs (now
    Department of Commerce and Economic Opportunity). The
    total credit allowed shall not exceed $40,000 per year
    with a maximum total of $150,000 per site. For partners
		SB3799	- 34 -	LRB104 20679 HLH 34178 b
    and shareholders of subchapter S corporations, there shall
    be allowed a credit under this subsection to be determined
    in accordance with the determination of income and
    distributive share of income under Sections 702 and 704
    and subchapter S of the Internal Revenue Code.
        (ii) A credit allowed under this subsection that is
    unused in the year the credit is earned may be carried
    forward to each of the 5 taxable years following the year
    for which the credit is first earned until it is used. The
    term "unused credit" does not include any amounts of
    unreimbursed eligible remediation costs in excess of the
    maximum credit per site authorized under paragraph (i).
    This credit shall be applied first to the earliest year
    for which there is a liability. If there is a credit under
    this subsection from more than one tax year that is
    available to offset a liability, the earliest credit
    arising under this subsection shall be applied first. A
    credit allowed under this subsection may be sold to a
    buyer as part of a sale of all or part of the remediation
    site for which the credit was granted. The purchaser of a
    remediation site and the tax credit shall succeed to the
    unused credit and remaining carry-forward period of the
    seller. To perfect the transfer, the assignor shall record
    the transfer in the chain of title for the site and provide
    written notice to the Director of the Illinois Department
    of Revenue of the assignor's intent to sell the
		SB3799	- 35 -	LRB104 20679 HLH 34178 b
    remediation site and the amount of the tax credit to be
    transferred as a portion of the sale. In no event may a
    credit be transferred to any taxpayer if the taxpayer or a
    related party would not be eligible under the provisions
    of subsection (i).
        (iii) For purposes of this Section, the term "site"
    shall have the same meaning as under Section 58.2 of the
    Environmental Protection Act.
    (m) Education expense credit. Beginning with tax years
ending after December 31, 1999, a taxpayer who is the
custodian of one or more qualifying pupils shall be allowed a
credit against the tax imposed by subsections (a) and (b) of
this Section for qualified education expenses incurred on
behalf of the qualifying pupils. The credit shall be equal to
25% of qualified education expenses, but in no event may the
total credit under this subsection claimed by a family that is
the custodian of qualifying pupils exceed (i) $500 for tax
years ending prior to December 31, 2017, and (ii) $750 for tax
years ending on or after December 31, 2017. In no event shall a
credit under this subsection reduce the taxpayer's liability
under this Act to less than zero. Notwithstanding any other
provision of law, for taxable years beginning on or after
January 1, 2017, no taxpayer may claim a credit under this
subsection (m) if the taxpayer's adjusted gross income for the
taxable year exceeds (i) $500,000, in the case of spouses
filing a joint federal tax return or (ii) $250,000, in the case
		SB3799	- 36 -	LRB104 20679 HLH 34178 b
of all other taxpayers. This subsection is exempt from the
provisions of Section 250 of this Act.
    For purposes of this subsection:
    "Qualifying pupils" means individuals who (i) are
residents of the State of Illinois, (ii) are under the age of
21 at the close of the school year for which a credit is
sought, and (iii) during the school year for which a credit is
sought were full-time pupils enrolled in a kindergarten
through twelfth grade education program at any school, as
defined in this subsection.
    "Qualified education expense" means the amount incurred on
behalf of a qualifying pupil in excess of $250 for tuition,
book fees, and lab fees at the school in which the pupil is
enrolled during the regular school year.
    "School" means any public or nonpublic elementary or
secondary school in Illinois that is in compliance with Title
VI of the Civil Rights Act of 1964 and attendance at which
satisfies the requirements of Section 26-1 of the School Code,
except that nothing shall be construed to require a child to
attend any particular public or nonpublic school to qualify
for the credit under this Section.
    "Custodian" means, with respect to qualifying pupils, an
Illinois resident who is a parent, the parents, a legal
guardian, or the legal guardians of the qualifying pupils.
    (n) River Edge Redevelopment Zone site remediation tax
credit.
		SB3799	- 37 -	LRB104 20679 HLH 34178 b
        (i) For tax years ending on or after December 31,
    2006, a taxpayer shall be allowed a credit against the tax
    imposed by subsections (a) and (b) of this Section for
    certain amounts paid for unreimbursed eligible remediation
    costs, as specified in this subsection. For purposes of
    this Section, "unreimbursed eligible remediation costs"
    means costs approved by the Illinois Environmental
    Protection Agency ("Agency") under Section 58.14a of the
    Environmental Protection Act that were paid in performing
    environmental remediation at a site within a River Edge
    Redevelopment Zone for which a No Further Remediation
    Letter was issued by the Agency and recorded under Section
    58.10 of the Environmental Protection Act. The credit must
    be claimed for the taxable year in which Agency approval
    of the eligible remediation costs is granted. The credit
    is not available to any taxpayer if the taxpayer or any
    related party caused or contributed to, in any material
    respect, a release of regulated substances on, in, or
    under the site that was identified and addressed by the
    remedial action pursuant to the Site Remediation Program
    of the Environmental Protection Act. Determinations as to
    credit availability for purposes of this Section shall be
    made consistent with rules adopted by the Pollution
    Control Board pursuant to the Illinois Administrative
    Procedure Act for the administration and enforcement of
    Section 58.9 of the Environmental Protection Act. For
		SB3799	- 38 -	LRB104 20679 HLH 34178 b
    purposes of this Section, "taxpayer" includes a person
    whose tax attributes the taxpayer has succeeded to under
    Section 381 of the Internal Revenue Code and "related
    party" includes the persons disallowed a deduction for
    losses by paragraphs (b), (c), and (f)(1) of Section 267
    of the Internal Revenue Code by virtue of being a related
    taxpayer, as well as any of its partners. The credit
    allowed against the tax imposed by subsections (a) and (b)
    shall be equal to 25% of the unreimbursed eligible
    remediation costs in excess of $100,000 per site.
        (ii) A credit allowed under this subsection that is
    unused in the year the credit is earned may be carried
    forward to each of the 5 taxable years following the year
    for which the credit is first earned until it is used. This
    credit shall be applied first to the earliest year for
    which there is a liability. If there is a credit under this
    subsection from more than one tax year that is available
    to offset a liability, the earliest credit arising under
    this subsection shall be applied first. A credit allowed
    under this subsection may be sold to a buyer as part of a
    sale of all or part of the remediation site for which the
    credit was granted. The purchaser of a remediation site
    and the tax credit shall succeed to the unused credit and
    remaining carry-forward period of the seller. To perfect
    the transfer, the assignor shall record the transfer in
    the chain of title for the site and provide written notice
		SB3799	- 39 -	LRB104 20679 HLH 34178 b
    to the Director of the Illinois Department of Revenue of
    the assignor's intent to sell the remediation site and the
    amount of the tax credit to be transferred as a portion of
    the sale. In no event may a credit be transferred to any
    taxpayer if the taxpayer or a related party would not be
    eligible under the provisions of subsection (i).
        (iii) For purposes of this Section, the term "site"
    shall have the same meaning as under Section 58.2 of the
    Environmental Protection Act.
    (o) For each of taxable years during the Compassionate Use
of Medical Cannabis Program, a surcharge is imposed on all
taxpayers on income arising from the sale or exchange of
capital assets, depreciable business property, real property
used in the trade or business, and Section 197 intangibles of
an organization registrant under the Compassionate Use of
Medical Cannabis Program Act. The amount of the surcharge is
equal to the amount of federal income tax liability for the
taxable year attributable to those sales and exchanges. The
surcharge imposed does not apply if:
        (1) the medical cannabis cultivation center
    registration, medical cannabis dispensary registration, or
    the property of a registration is transferred as a result
    of any of the following:
            (A) bankruptcy, a receivership, or a debt
        adjustment initiated by or against the initial
        registration or the substantial owners of the initial
		SB3799	- 40 -	LRB104 20679 HLH 34178 b
        registration;
            (B) cancellation, revocation, or termination of
        any registration by the Illinois Department of Public
        Health;
            (C) a determination by the Illinois Department of
        Public Health that transfer of the registration is in
        the best interests of Illinois qualifying patients as
        defined by the Compassionate Use of Medical Cannabis
        Program Act;
            (D) the death of an owner of the equity interest in
        a registrant;
            (E) the acquisition of a controlling interest in
        the stock or substantially all of the assets of a
        publicly traded company;
            (F) a transfer by a parent company to a wholly
        owned subsidiary; or
            (G) the transfer or sale to or by one person to
        another person where both persons were initial owners
        of the registration when the registration was issued;
        or
        (2) the cannabis cultivation center registration,
    medical cannabis dispensary registration, or the
    controlling interest in a registrant's property is
    transferred in a transaction to lineal descendants in
    which no gain or loss is recognized or as a result of a
    transaction in accordance with Section 351 of the Internal
		SB3799	- 41 -	LRB104 20679 HLH 34178 b
    Revenue Code in which no gain or loss is recognized.
    (p) Pass-through entity tax.
        (1) For taxable years ending on or after December 31,
    2021, a partnership (other than a publicly traded
    partnership under Section 7704 of the Internal Revenue
    Code) or Subchapter S corporation may elect to apply the
    provisions of this subsection. A separate election shall
    be made for each taxable year. Such election shall be made
    at such time, and in such form and manner as prescribed by
    the Department, and, once made, is irrevocable.
        (2) Entity-level tax. A partnership or Subchapter S
    corporation electing to apply the provisions of this
    subsection shall be subject to a tax for the privilege of
    earning or receiving income in this State in an amount
    equal to 4.95% of the taxpayer's net income for the
    taxable year.
        (2.1) For taxable years beginning on or after January 
    1, 2026, a partnership making an election under this 
    subsection may elect, in the manner prescribed by the 
    Department, to determine the tax base for the purposes of 
    this subsection under one of the following methods:
            (A) Full distributive share method. The electing 
        partnership shall compute and pay tax on the full 
        distributive share of net income allocable to each 
        partner who is an Illinois resident, notwithstanding 
        the apportionment provisions of Section 304. The 
		SB3799	- 42 -	LRB104 20679 HLH 34178 b
        apportioned business income shall be used solely for 
        determining the tax due on behalf of nonresident 
        partners.
            (B) Illinois-sourced income method. The electing 
        partnership shall compute and pay tax only on that 
        portion of each partner's distributive share of net 
        income that is derived from or attributable to sources 
        within this State, determined in accordance with 
        Section 304 and the rules adopted under that Section.
        The election under this paragraph (2.1) shall be made 
    annually and shall apply to all partners of the 
    partnership for the taxable year. The method elected shall 
    be irrevocable for that taxable year. The Department shall 
    prescribe the manner and form of the election under this 
    paragraph (2.1).
        (3) Net income defined.
            (A) In general. For purposes of paragraph (2), the
        term net income has the same meaning as defined in
        Section 202 of this Act, except that, for tax years
        ending on or after December 31, 2023, a deduction
        shall be allowed in computing base income for
        distributions to a retired partner to the extent that
        the partner's distributions are exempt from tax under
        Section 203(a)(2)(F) of this Act. In addition, the
        following modifications shall not apply:
                (i) the standard exemption allowed under
		SB3799	- 43 -	LRB104 20679 HLH 34178 b
            Section 204;
                (ii) the deduction for net losses allowed
            under Section 207;
                (iii) in the case of an S corporation, the
            modification under Section 203(b)(2)(S); and
                (iv) in the case of a partnership, the
            modifications under Section 203(d)(2)(H) and
            Section 203(d)(2)(I).
            (B) Special rule for tiered partnerships. If a
        taxpayer making the election under paragraph (1) is a
        partner of another taxpayer making the election under
        paragraph (1), net income shall be computed as
        provided in subparagraph (A), except that the taxpayer
        shall subtract its distributive share of the net
        income of the electing partnership (including its
        distributive share of the net income of the electing
        partnership derived as a distributive share from
        electing partnerships in which it is a partner).
        (4) Credit for entity level tax. Each partner or
    shareholder of a taxpayer making the election under this
    Section shall be allowed a credit against the tax imposed
    under subsections (a) and (b) of Section 201 of this Act
    for the taxable year of the partnership or Subchapter S
    corporation for which an election is in effect ending
    within or with the taxable year of the partner or
    shareholder in an amount equal to 4.95% times the partner
		SB3799	- 44 -	LRB104 20679 HLH 34178 b
    or shareholder's distributive share of the net income of
    the electing partnership or Subchapter S corporation, but
    not to exceed the partner's or shareholder's share of the
    tax imposed under paragraph (1) which is actually paid by
    the partnership or Subchapter S corporation. If the
    taxpayer is a partnership or Subchapter S corporation that
    is itself a partner of a partnership making the election
    under paragraph (1), the credit under this paragraph shall
    be allowed to the taxpayer's partners or shareholders (or
    if the partner is a partnership or Subchapter S
    corporation then its partners or shareholders) in
    accordance with the determination of income and
    distributive share of income under Sections 702 and 704
    and Subchapter S of the Internal Revenue Code. If the
    amount of the credit allowed under this paragraph exceeds
    the partner's or shareholder's liability for tax imposed
    under subsections (a) and (b) of Section 201 of this Act
    for the taxable year, such excess shall be treated as an
    overpayment for purposes of Section 909 of this Act.
        (5) Nonresidents. A nonresident individual who is a
    partner or shareholder of a partnership or Subchapter S
    corporation for a taxable year for which an election is in
    effect under paragraph (1) shall not be required to file
    an income tax return under this Act for such taxable year
    if the only source of net income of the individual (or the
    individual and the individual's spouse in the case of a
		SB3799	- 45 -	LRB104 20679 HLH 34178 b
    joint return) is from an entity making the election under
    paragraph (1) and the credit allowed to the partner or
    shareholder under paragraph (4) equals or exceeds the
    individual's liability for the tax imposed under
    subsections (a) and (b) of Section 201 of this Act for the
    taxable year.
        (6) Liability for tax. Except as provided in this
    paragraph, a partnership or Subchapter S making the
    election under paragraph (1) is liable for the
    entity-level tax imposed under paragraph (2). If the
    electing partnership or corporation fails to pay the full
    amount of tax deemed assessed under paragraph (2), the
    partners or shareholders shall be liable to pay the tax
    assessed (including penalties and interest). Each partner
    or shareholder shall be liable for the unpaid assessment
    based on the ratio of the partner's or shareholder's share
    of the net income of the partnership over the total net
    income of the partnership. If the partnership or
    Subchapter S corporation fails to pay the tax assessed
    (including penalties and interest) and thereafter an
    amount of such tax is paid by the partners or
    shareholders, such amount shall not be collected from the
    partnership or corporation.
        (7) Foreign tax. For purposes of the credit allowed
    under Section 601(b)(3) of this Act, tax paid by a
    partnership or Subchapter S corporation to another state
		SB3799	- 46 -	LRB104 20679 HLH 34178 b
    which, as determined by the Department, is substantially
    similar to the tax imposed under this subsection, shall be
    considered tax paid by the partner or shareholder to the
    extent that the partner's or shareholder's share of the
    income of the partnership or Subchapter S corporation
    allocated and apportioned to such other state bears to the
    total income of the partnership or Subchapter S
    corporation allocated or apportioned to such other state.
        (8) Suspension of withholding. The provisions of
    Section 709.5 of this Act shall not apply to a partnership
    or Subchapter S corporation for the taxable year for which
    an election under paragraph (1) is in effect.
        (9) Requirement to pay estimated tax. For each taxable
    year for which an election under paragraph (1) is in
    effect, a partnership or Subchapter S corporation is
    required to pay estimated tax for such taxable year under
    Sections 803 and 804 of this Act if the amount payable as
    estimated tax can reasonably be expected to exceed $500.
        (10) The provisions of this subsection shall apply
    only with respect to taxable years for which the
    limitation on individual deductions applies under Section
    164(b)(6) of the Internal Revenue Code.
(Source: P.A. 103-9, eff. 6-7-23; 103-396, eff. 1-1-24;
103-595, eff. 6-26-24; 103-605, eff. 7-1-24; 104-453, eff.
12-12-25.)
    Section 99. Effective date. This Act takes effect upon
		SB3799	- 47 -	LRB104 20679 HLH 34178 b
becoming law.

Amends the Illinois Income Tax Act. In provisions concerning the entity-level tax, provides that a partnership making an entity-level tax election may elect to determine its tax base using a full distributive share method or an Illinois-sourced income method. Effective immediately.

Sponsors

Sen. Celina Villanueva (D) sponsors SB 3799, and 1 member has co-sponsored it.

Committees

SB 3799 went before 2 committees: Assignments and Revenue.

Assignments
Assignments
Referred to · Feb 6, 2026
Revenue
Revenue
Referred to · Feb 24, 2026

History

SB 3799 has taken 13 actions since Feb 6, 2026, the latest on May 22, 2026.

ChamberAction
May 22, 2026
Senate
Rule 3-9(a) / Re-referred to Assignments
May 22, 2026
Senate
Senate Committee Amendment No. 1 Rule 3-9(a) / Re-referred to Assignments
May 15, 2026
Senate
Rule 2-10 Committee/3rd Reading Deadline Established As May 22, 2026
May 1, 2026
Senate
Added as Co-Sponsor Sen. Chris Balkema
Apr 28, 2026
Senate
Senate Committee Amendment No. 1 Assignments Refers to Revenue

Votes

SB 3799 has not gone to a roll call.

Source: ilga.gov · legiscan.com