Bill Text: IL HB3157 | 2013-2014 | 98th General Assembly | Enrolled
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Amends the Illinois Income Tax Act. In a Section concerning apportionment of business income, provides that, if the apportionment provisions do not fairly represent the market for the person's goods, services, or other sources of business income (instead of "the extent of a person's business activity in this State"), a person may petition for, or the Director may permit or require, the following: (1) separate accounting; (2) the exclusion of any one or more factors; (3) the inclusion of one or more additional factors; or (4) the employment of any other method to effectuate an equitable allocation and apportionment of the person's business income. Makes changes concerning gains or losses included in the net income of a nonresident partners and shareholders. Makes changes concerning unitary business groups. Makes other changes.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2013-08-16 - Public Act . . . . . . . . . 98-0478 [HB3157 Detail]
Download: Illinois-2013-HB3157-Enrolled.html
Bill Title: Amends the Illinois Income Tax Act. In a Section concerning apportionment of business income, provides that, if the apportionment provisions do not fairly represent the market for the person's goods, services, or other sources of business income (instead of "the extent of a person's business activity in this State"), a person may petition for, or the Director may permit or require, the following: (1) separate accounting; (2) the exclusion of any one or more factors; (3) the inclusion of one or more additional factors; or (4) the employment of any other method to effectuate an equitable allocation and apportionment of the person's business income. Makes changes concerning gains or losses included in the net income of a nonresident partners and shareholders. Makes changes concerning unitary business groups. Makes other changes.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2013-08-16 - Public Act . . . . . . . . . 98-0478 [HB3157 Detail]
Download: Illinois-2013-HB3157-Enrolled.html
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1 | AN ACT concerning revenue.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Income Tax Act is amended by | ||||||
5 | changing Sections 304, 502, and 709.5 as follows:
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6 | (35 ILCS 5/304) (from Ch. 120, par. 3-304)
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7 | Sec. 304. Business income of persons other than residents.
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8 | (a) In general. The business income of a person other than | ||||||
9 | a
resident shall be allocated to this State if such person's | ||||||
10 | business
income is derived solely from this State. If a person | ||||||
11 | other than a
resident derives business income from this State | ||||||
12 | and one or more other
states, then, for tax years ending on or | ||||||
13 | before December 30, 1998, and
except as otherwise provided by | ||||||
14 | this Section, such
person's business income shall be | ||||||
15 | apportioned to this State by
multiplying the income by a | ||||||
16 | fraction, the numerator of which is the sum
of the property | ||||||
17 | factor (if any), the payroll factor (if any) and 200% of the
| ||||||
18 | sales factor (if any), and the denominator of which is 4 | ||||||
19 | reduced by the
number of factors other than the sales factor | ||||||
20 | which have a denominator
of zero and by an additional 2 if the | ||||||
21 | sales factor has a denominator of zero.
For tax years ending on | ||||||
22 | or after December 31, 1998, and except as otherwise
provided by | ||||||
23 | this Section, persons other than
residents who derive business |
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1 | income from this State and one or more other
states shall | ||||||
2 | compute their apportionment factor by weighting their | ||||||
3 | property,
payroll, and sales factors as provided in
subsection | ||||||
4 | (h) of this Section.
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5 | (1) Property factor.
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6 | (A) The property factor is a fraction, the numerator of | ||||||
7 | which is the
average value of the person's real and | ||||||
8 | tangible personal property owned
or rented and used in the | ||||||
9 | trade or business in this State during the
taxable year and | ||||||
10 | the denominator of which is the average value of all
the | ||||||
11 | person's real and tangible personal property owned or | ||||||
12 | rented and
used in the trade or business during the taxable | ||||||
13 | year.
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14 | (B) Property owned by the person is valued at its | ||||||
15 | original cost.
Property rented by the person is valued at 8 | ||||||
16 | times the net annual rental
rate. Net annual rental rate is | ||||||
17 | the annual rental rate paid by the
person less any annual | ||||||
18 | rental rate received by the person from
sub-rentals.
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19 | (C) The average value of property shall be determined | ||||||
20 | by averaging
the values at the beginning and ending of the | ||||||
21 | taxable year but the
Director may require the averaging of | ||||||
22 | monthly values during the taxable
year if reasonably | ||||||
23 | required to reflect properly the average value of the
| ||||||
24 | person's property.
| ||||||
25 | (2) Payroll factor.
| ||||||
26 | (A) The payroll factor is a fraction, the numerator of |
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1 | which is the
total amount paid in this State during the | ||||||
2 | taxable year by the person
for compensation, and the | ||||||
3 | denominator of which is the total compensation
paid | ||||||
4 | everywhere during the taxable year.
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5 | (B) Compensation is paid in this State if:
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6 | (i) The individual's service is performed entirely | ||||||
7 | within this
State;
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8 | (ii) The individual's service is performed both | ||||||
9 | within and without
this State, but the service | ||||||
10 | performed without this State is incidental
to the | ||||||
11 | individual's service performed within this State; or
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12 | (iii) Some of the service is performed within this | ||||||
13 | State and either
the base of operations, or if there is | ||||||
14 | no base of operations, the place
from which the service | ||||||
15 | is directed or controlled is within this State,
or the | ||||||
16 | base of operations or the place from which the service | ||||||
17 | is
directed or controlled is not in any state in which | ||||||
18 | some part of the
service is performed, but the | ||||||
19 | individual's residence is in this State.
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20 | (iv) Compensation paid to nonresident professional | ||||||
21 | athletes. | ||||||
22 | (a) General. The Illinois source income of a | ||||||
23 | nonresident individual who is a member of a | ||||||
24 | professional athletic team includes the portion of the | ||||||
25 | individual's total compensation for services performed | ||||||
26 | as a member of a professional athletic team during the |
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1 | taxable year which the number of duty days spent within | ||||||
2 | this State performing services for the team in any | ||||||
3 | manner during the taxable year bears to the total | ||||||
4 | number of duty days spent both within and without this | ||||||
5 | State during the taxable year. | ||||||
6 | (b) Travel days. Travel days that do not involve | ||||||
7 | either a game, practice, team meeting, or other similar | ||||||
8 | team event are not considered duty days spent in this | ||||||
9 | State. However, such travel days are considered in the | ||||||
10 | total duty days spent both within and without this | ||||||
11 | State. | ||||||
12 | (c) Definitions. For purposes of this subpart | ||||||
13 | (iv): | ||||||
14 | (1) The term "professional athletic team" | ||||||
15 | includes, but is not limited to, any professional | ||||||
16 | baseball, basketball, football, soccer, or hockey | ||||||
17 | team. | ||||||
18 | (2) The term "member of a professional | ||||||
19 | athletic team" includes those employees who are | ||||||
20 | active players, players on the disabled list, and | ||||||
21 | any other persons required to travel and who travel | ||||||
22 | with and perform services on behalf of a | ||||||
23 | professional athletic team on a regular basis. | ||||||
24 | This includes, but is not limited to, coaches, | ||||||
25 | managers, and trainers. | ||||||
26 | (3) Except as provided in items (C) and (D) of |
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1 | this subpart (3), the term "duty days" means all | ||||||
2 | days during the taxable year from the beginning of | ||||||
3 | the professional athletic team's official | ||||||
4 | pre-season training period through the last game | ||||||
5 | in which the team competes or is scheduled to | ||||||
6 | compete. Duty days shall be counted for the year in | ||||||
7 | which they occur, including where a team's | ||||||
8 | official pre-season training period through the | ||||||
9 | last game in which the team competes or is | ||||||
10 | scheduled to compete, occurs during more than one | ||||||
11 | tax year. | ||||||
12 | (A) Duty days shall also include days on | ||||||
13 | which a member of a professional athletic team | ||||||
14 | performs service for a team on a date that does | ||||||
15 | not fall within the foregoing period (e.g., | ||||||
16 | participation in instructional leagues, the | ||||||
17 | "All Star Game", or promotional "caravans"). | ||||||
18 | Performing a service for a professional | ||||||
19 | athletic team includes conducting training and | ||||||
20 | rehabilitation activities, when such | ||||||
21 | activities are conducted at team facilities. | ||||||
22 | (B) Also included in duty days are game | ||||||
23 | days, practice days, days spent at team | ||||||
24 | meetings, promotional caravans, preseason | ||||||
25 | training camps, and days served with the team | ||||||
26 | through all post-season games in which the team |
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1 | competes or is scheduled to compete. | ||||||
2 | (C) Duty days for any person who joins a | ||||||
3 | team during the period from the beginning of | ||||||
4 | the professional athletic team's official | ||||||
5 | pre-season training period through the last | ||||||
6 | game in which the team competes, or is | ||||||
7 | scheduled to compete, shall begin on the day | ||||||
8 | that person joins the team. Conversely, duty | ||||||
9 | days for any person who leaves a team during | ||||||
10 | this period shall end on the day that person | ||||||
11 | leaves the team. Where a person switches teams | ||||||
12 | during a taxable year, a separate duty-day | ||||||
13 | calculation shall be made for the period the | ||||||
14 | person was with each team. | ||||||
15 | (D) Days for which a member of a | ||||||
16 | professional athletic team is not compensated | ||||||
17 | and is not performing services for the team in | ||||||
18 | any manner, including days when such member of | ||||||
19 | a professional athletic team has been | ||||||
20 | suspended without pay and prohibited from | ||||||
21 | performing any services for the team, shall not | ||||||
22 | be treated as duty days. | ||||||
23 | (E) Days for which a member of a | ||||||
24 | professional athletic team is on the disabled | ||||||
25 | list and does not conduct rehabilitation | ||||||
26 | activities at facilities of the team, and is |
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1 | not otherwise performing services for the team | ||||||
2 | in Illinois, shall not be considered duty days | ||||||
3 | spent in this State. All days on the disabled | ||||||
4 | list, however, are considered to be included in | ||||||
5 | total duty days spent both within and without | ||||||
6 | this State. | ||||||
7 | (4) The term "total compensation for services | ||||||
8 | performed as a member of a professional athletic | ||||||
9 | team" means the total compensation received during | ||||||
10 | the taxable year for services performed: | ||||||
11 | (A) from the beginning of the official | ||||||
12 | pre-season training period through the last | ||||||
13 | game in which the team competes or is scheduled | ||||||
14 | to compete during that taxable year; and | ||||||
15 | (B) during the taxable year on a date which | ||||||
16 | does not fall within the foregoing period | ||||||
17 | (e.g., participation in instructional leagues, | ||||||
18 | the "All Star Game", or promotional caravans). | ||||||
19 | This compensation shall include, but is not | ||||||
20 | limited to, salaries, wages, bonuses as described | ||||||
21 | in this subpart, and any other type of compensation | ||||||
22 | paid during the taxable year to a member of a | ||||||
23 | professional athletic team for services performed | ||||||
24 | in that year. This compensation does not include | ||||||
25 | strike benefits, severance pay, termination pay, | ||||||
26 | contract or option year buy-out payments, |
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1 | expansion or relocation payments, or any other | ||||||
2 | payments not related to services performed for the | ||||||
3 | team. | ||||||
4 | For purposes of this subparagraph, "bonuses" | ||||||
5 | included in "total compensation for services | ||||||
6 | performed as a member of a professional athletic | ||||||
7 | team" subject to the allocation described in | ||||||
8 | Section 302(c)(1) are: bonuses earned as a result | ||||||
9 | of play (i.e., performance bonuses) during the | ||||||
10 | season, including bonuses paid for championship, | ||||||
11 | playoff or "bowl" games played by a team, or for | ||||||
12 | selection to all-star league or other honorary | ||||||
13 | positions; and bonuses paid for signing a | ||||||
14 | contract, unless the payment of the signing bonus | ||||||
15 | is not conditional upon the signee playing any | ||||||
16 | games for the team or performing any subsequent | ||||||
17 | services for the team or even making the team, the | ||||||
18 | signing bonus is payable separately from the | ||||||
19 | salary and any other compensation, and the signing | ||||||
20 | bonus is nonrefundable.
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21 | (3) Sales factor.
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22 | (A) The sales factor is a fraction, the numerator of | ||||||
23 | which is the
total sales of the person in this State during | ||||||
24 | the taxable year, and the
denominator of which is the total | ||||||
25 | sales of the person everywhere during
the taxable year.
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26 | (B) Sales of tangible personal property are in this |
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1 | State if:
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2 | (i) The property is delivered or shipped to a | ||||||
3 | purchaser, other than
the United States government, | ||||||
4 | within this State regardless of the f. o.
b. point or | ||||||
5 | other conditions of the sale; or
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6 | (ii) The property is shipped from an office, store, | ||||||
7 | warehouse,
factory or other place of storage in this | ||||||
8 | State and either the purchaser
is the United States | ||||||
9 | government or the person is not taxable in the
state of | ||||||
10 | the purchaser; provided, however, that premises owned | ||||||
11 | or leased
by a person who has independently contracted | ||||||
12 | with the seller for the printing
of newspapers, | ||||||
13 | periodicals or books shall not be deemed to be an | ||||||
14 | office,
store, warehouse, factory or other place of | ||||||
15 | storage for purposes of this
Section.
Sales of tangible | ||||||
16 | personal property are not in this State if the
seller | ||||||
17 | and purchaser would be members of the same unitary | ||||||
18 | business group
but for the fact that either the seller | ||||||
19 | or purchaser is a person with 80%
or more of total | ||||||
20 | business activity outside of the United States and the
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21 | property is purchased for resale.
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22 | (B-1) Patents, copyrights, trademarks, and similar | ||||||
23 | items of intangible
personal property.
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24 | (i) Gross receipts from the licensing, sale, or | ||||||
25 | other disposition of a
patent, copyright, trademark, | ||||||
26 | or similar item of intangible personal property, other |
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1 | than gross receipts governed by paragraph (B-7) of this | ||||||
2 | item (3),
are in this State to the extent the item is | ||||||
3 | utilized in this State during the
year the gross | ||||||
4 | receipts are included in gross income.
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5 | (ii) Place of utilization.
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6 | (I) A patent is utilized in a state to the | ||||||
7 | extent that it is employed
in production, | ||||||
8 | fabrication, manufacturing, or other processing in | ||||||
9 | the state or
to the extent that a patented product | ||||||
10 | is produced in the state. If a patent is
utilized | ||||||
11 | in
more than one state, the extent to which it is | ||||||
12 | utilized in any one state shall
be a fraction equal | ||||||
13 | to the gross receipts of the licensee or purchaser | ||||||
14 | from
sales or leases of items produced, | ||||||
15 | fabricated, manufactured, or processed
within that | ||||||
16 | state using the patent and of patented items | ||||||
17 | produced within that
state, divided by the total of | ||||||
18 | such gross receipts for all states in which the
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19 | patent is utilized.
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20 | (II) A copyright is utilized in a state to the | ||||||
21 | extent that printing or
other publication | ||||||
22 | originates in the state. If a copyright is utilized | ||||||
23 | in more
than one state, the extent to which it is | ||||||
24 | utilized in any one state shall be a
fraction equal | ||||||
25 | to the gross receipts from sales or licenses of | ||||||
26 | materials
printed or published in that state |
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1 | divided by the total of such gross receipts
for all | ||||||
2 | states in which the copyright is utilized.
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3 | (III) Trademarks and other items of intangible | ||||||
4 | personal property
governed by this paragraph (B-1) | ||||||
5 | are utilized in the state in which the
commercial | ||||||
6 | domicile of the licensee or purchaser is located.
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7 | (iii) If the state of utilization of an item of | ||||||
8 | property governed by
this paragraph (B-1) cannot be | ||||||
9 | determined from the taxpayer's books and
records or | ||||||
10 | from the books and records of any person related to the | ||||||
11 | taxpayer
within the meaning of Section 267(b) of the | ||||||
12 | Internal Revenue Code, 26 U.S.C.
267, the gross
| ||||||
13 | receipts attributable to that item shall be excluded | ||||||
14 | from both the numerator
and the denominator of the | ||||||
15 | sales factor.
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16 | (B-2) Gross receipts from the license, sale, or other | ||||||
17 | disposition of
patents, copyrights, trademarks, and | ||||||
18 | similar items of intangible personal
property, other than | ||||||
19 | gross receipts governed by paragraph (B-7) of this item | ||||||
20 | (3), may be included in the numerator or denominator of the | ||||||
21 | sales factor
only if gross receipts from licenses, sales, | ||||||
22 | or other disposition of such items
comprise more than 50% | ||||||
23 | of the taxpayer's total gross receipts included in gross
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24 | income during the tax year and during each of the 2 | ||||||
25 | immediately preceding tax
years; provided that, when a | ||||||
26 | taxpayer is a member of a unitary business group,
such |
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1 | determination shall be made on the basis of the gross | ||||||
2 | receipts of the
entire unitary business group.
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3 | (B-5) For taxable years ending on or after December 31, | ||||||
4 | 2008, except as provided in subsections (ii) through (vii), | ||||||
5 | receipts from the sale of telecommunications service or | ||||||
6 | mobile telecommunications service are in this State if the | ||||||
7 | customer's service address is in this State. | ||||||
8 | (i) For purposes of this subparagraph (B-5), the | ||||||
9 | following terms have the following meanings: | ||||||
10 | "Ancillary services" means services that are | ||||||
11 | associated with or incidental to the provision of | ||||||
12 | "telecommunications services", including but not | ||||||
13 | limited to "detailed telecommunications billing", | ||||||
14 | "directory assistance", "vertical service", and "voice | ||||||
15 | mail services". | ||||||
16 | "Air-to-Ground Radiotelephone service" means a | ||||||
17 | radio service, as that term is defined in 47 CFR 22.99, | ||||||
18 | in which common carriers are authorized to offer and | ||||||
19 | provide radio telecommunications service for hire to | ||||||
20 | subscribers in aircraft. | ||||||
21 | "Call-by-call Basis" means any method of charging | ||||||
22 | for telecommunications services where the price is | ||||||
23 | measured by individual calls. | ||||||
24 | "Communications Channel" means a physical or | ||||||
25 | virtual path of communications over which signals are | ||||||
26 | transmitted between or among customer channel |
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1 | termination points. | ||||||
2 | "Conference bridging service" means an "ancillary | ||||||
3 | service" that links two or more participants of an | ||||||
4 | audio or video conference call and may include the | ||||||
5 | provision of a telephone number. "Conference bridging | ||||||
6 | service" does not include the "telecommunications | ||||||
7 | services" used to reach the conference bridge. | ||||||
8 | "Customer Channel Termination Point" means the | ||||||
9 | location where the customer either inputs or receives | ||||||
10 | the communications. | ||||||
11 | "Detailed telecommunications billing service" | ||||||
12 | means an "ancillary service" of separately stating | ||||||
13 | information pertaining to individual calls on a | ||||||
14 | customer's billing statement. | ||||||
15 | "Directory assistance" means an "ancillary | ||||||
16 | service" of providing telephone number information, | ||||||
17 | and/or address information. | ||||||
18 | "Home service provider" means the facilities based | ||||||
19 | carrier or reseller with which the customer contracts | ||||||
20 | for the provision of mobile telecommunications | ||||||
21 | services. | ||||||
22 | "Mobile telecommunications service" means | ||||||
23 | commercial mobile radio service, as defined in Section | ||||||
24 | 20.3 of Title 47 of the Code of Federal Regulations as | ||||||
25 | in effect on June 1, 1999. | ||||||
26 | "Place of primary use" means the street address |
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1 | representative of where the customer's use of the | ||||||
2 | telecommunications service primarily occurs, which | ||||||
3 | must be the residential street address or the primary | ||||||
4 | business street address of the customer. In the case of | ||||||
5 | mobile telecommunications services, "place of primary | ||||||
6 | use" must be within the licensed service area of the | ||||||
7 | home service provider. | ||||||
8 | "Post-paid telecommunication service" means the | ||||||
9 | telecommunications service obtained by making a | ||||||
10 | payment on a call-by-call basis either through the use | ||||||
11 | of a credit card or payment mechanism such as a bank | ||||||
12 | card, travel card, credit card, or debit card, or by | ||||||
13 | charge made to a telephone number which is not | ||||||
14 | associated with the origination or termination of the | ||||||
15 | telecommunications service. A post-paid calling | ||||||
16 | service includes telecommunications service, except a | ||||||
17 | prepaid wireless calling service, that would be a | ||||||
18 | prepaid calling service except it is not exclusively a | ||||||
19 | telecommunication service. | ||||||
20 | "Prepaid telecommunication service" means the | ||||||
21 | right to access exclusively telecommunications | ||||||
22 | services, which must be paid for in advance and which | ||||||
23 | enables the origination of calls using an access number | ||||||
24 | or authorization code, whether manually or | ||||||
25 | electronically dialed, and that is sold in | ||||||
26 | predetermined units or dollars of which the number |
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1 | declines with use in a known amount. | ||||||
2 | "Prepaid Mobile telecommunication service" means a | ||||||
3 | telecommunications service that provides the right to | ||||||
4 | utilize mobile wireless service as well as other | ||||||
5 | non-telecommunication services, including but not | ||||||
6 | limited to ancillary services, which must be paid for | ||||||
7 | in advance that is sold in predetermined units or | ||||||
8 | dollars of which the number declines with use in a | ||||||
9 | known amount. | ||||||
10 | "Private communication service" means a | ||||||
11 | telecommunication service that entitles the customer | ||||||
12 | to exclusive or priority use of a communications | ||||||
13 | channel or group of channels between or among | ||||||
14 | termination points, regardless of the manner in which | ||||||
15 | such channel or channels are connected, and includes | ||||||
16 | switching capacity, extension lines, stations, and any | ||||||
17 | other associated services that are provided in | ||||||
18 | connection with the use of such channel or channels. | ||||||
19 | "Service address" means: | ||||||
20 | (a) The location of the telecommunications | ||||||
21 | equipment to which a customer's call is charged and | ||||||
22 | from which the call originates or terminates, | ||||||
23 | regardless of where the call is billed or paid; | ||||||
24 | (b) If the location in line (a) is not known, | ||||||
25 | service address means the origination point of the | ||||||
26 | signal of the telecommunications services first |
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| |||||||
1 | identified by either the seller's | ||||||
2 | telecommunications system or in information | ||||||
3 | received by the seller from its service provider | ||||||
4 | where the system used to transport such signals is | ||||||
5 | not that of the seller; and | ||||||
6 | (c) If the locations in line (a) and line (b) | ||||||
7 | are not known, the service address means the | ||||||
8 | location of the customer's place of primary use. | ||||||
9 | "Telecommunications service" means the electronic | ||||||
10 | transmission, conveyance, or routing of voice, data, | ||||||
11 | audio, video, or any other information or signals to a | ||||||
12 | point, or between or among points. The term | ||||||
13 | "telecommunications service" includes such | ||||||
14 | transmission, conveyance, or routing in which computer | ||||||
15 | processing applications are used to act on the form, | ||||||
16 | code or protocol of the content for purposes of | ||||||
17 | transmission, conveyance or routing without regard to | ||||||
18 | whether such service is referred to as voice over | ||||||
19 | Internet protocol services or is classified by the | ||||||
20 | Federal Communications Commission as enhanced or value | ||||||
21 | added. "Telecommunications service" does not include: | ||||||
22 | (a) Data processing and information services | ||||||
23 | that allow data to be generated, acquired, stored, | ||||||
24 | processed, or retrieved and delivered by an | ||||||
25 | electronic transmission to a purchaser when such | ||||||
26 | purchaser's primary purpose for the underlying |
| |||||||
| |||||||
1 | transaction is the processed data or information; | ||||||
2 | (b) Installation or maintenance of wiring or | ||||||
3 | equipment on a customer's premises; | ||||||
4 | (c) Tangible personal property; | ||||||
5 | (d) Advertising, including but not limited to | ||||||
6 | directory advertising. | ||||||
7 | (e) Billing and collection services provided | ||||||
8 | to third parties; | ||||||
9 | (f) Internet access service; | ||||||
10 | (g) Radio and television audio and video | ||||||
11 | programming services, regardless of the medium, | ||||||
12 | including the furnishing of transmission, | ||||||
13 | conveyance and routing of such services by the | ||||||
14 | programming service provider. Radio and television | ||||||
15 | audio and video programming services shall include | ||||||
16 | but not be limited to cable service as defined in | ||||||
17 | 47 USC 522(6) and audio and video programming | ||||||
18 | services delivered by commercial mobile radio | ||||||
19 | service providers, as defined in 47 CFR 20.3; | ||||||
20 | (h) "Ancillary services"; or | ||||||
21 | (i) Digital products "delivered | ||||||
22 | electronically", including but not limited to | ||||||
23 | software, music, video, reading materials or ring | ||||||
24 | tones. | ||||||
25 | "Vertical service" means an "ancillary service" | ||||||
26 | that is offered in connection with one or more |
| |||||||
| |||||||
1 | "telecommunications services", which offers advanced | ||||||
2 | calling features that allow customers to identify | ||||||
3 | callers and to manage multiple calls and call | ||||||
4 | connections, including "conference bridging services". | ||||||
5 | "Voice mail service" means an "ancillary service" | ||||||
6 | that enables the customer to store, send or receive | ||||||
7 | recorded messages. "Voice mail service" does not | ||||||
8 | include any "vertical services" that the customer may | ||||||
9 | be required to have in order to utilize the "voice mail | ||||||
10 | service". | ||||||
11 | (ii) Receipts from the sale of telecommunications | ||||||
12 | service sold on an individual call-by-call basis are in | ||||||
13 | this State if either of the following applies: | ||||||
14 | (a) The call both originates and terminates in | ||||||
15 | this State. | ||||||
16 | (b) The call either originates or terminates | ||||||
17 | in this State and the service address is located in | ||||||
18 | this State. | ||||||
19 | (iii) Receipts from the sale of postpaid | ||||||
20 | telecommunications service at retail are in this State | ||||||
21 | if the origination point of the telecommunication | ||||||
22 | signal, as first identified by the service provider's | ||||||
23 | telecommunication system or as identified by | ||||||
24 | information received by the seller from its service | ||||||
25 | provider if the system used to transport | ||||||
26 | telecommunication signals is not the seller's, is |
| |||||||
| |||||||
1 | located in this State. | ||||||
2 | (iv) Receipts from the sale of prepaid | ||||||
3 | telecommunications service or prepaid mobile | ||||||
4 | telecommunications service at retail are in this State | ||||||
5 | if the purchaser obtains the prepaid card or similar | ||||||
6 | means of conveyance at a location in this State. | ||||||
7 | Receipts from recharging a prepaid telecommunications | ||||||
8 | service or mobile telecommunications service is in | ||||||
9 | this State if the purchaser's billing information | ||||||
10 | indicates a location in this State. | ||||||
11 | (v) Receipts from the sale of private | ||||||
12 | communication services are in this State as follows: | ||||||
13 | (a) 100% of receipts from charges imposed at | ||||||
14 | each channel termination point in this State. | ||||||
15 | (b) 100% of receipts from charges for the total | ||||||
16 | channel mileage between each channel termination | ||||||
17 | point in this State. | ||||||
18 | (c) 50% of the total receipts from charges for | ||||||
19 | service segments when those segments are between 2 | ||||||
20 | customer channel termination points, 1 of which is | ||||||
21 | located in this State and the other is located | ||||||
22 | outside of this State, which segments are | ||||||
23 | separately charged. | ||||||
24 | (d) The receipts from charges for service | ||||||
25 | segments with a channel termination point located | ||||||
26 | in this State and in two or more other states, and |
| |||||||
| |||||||
1 | which segments are not separately billed, are in | ||||||
2 | this State based on a percentage determined by | ||||||
3 | dividing the number of customer channel | ||||||
4 | termination points in this State by the total | ||||||
5 | number of customer channel termination points. | ||||||
6 | (vi) Receipts from charges for ancillary services | ||||||
7 | for telecommunications service sold to customers at | ||||||
8 | retail are in this State if the customer's primary | ||||||
9 | place of use of telecommunications services associated | ||||||
10 | with those ancillary services is in this State. If the | ||||||
11 | seller of those ancillary services cannot determine | ||||||
12 | where the associated telecommunications are located, | ||||||
13 | then the ancillary services shall be based on the | ||||||
14 | location of the purchaser. | ||||||
15 | (vii) Receipts to access a carrier's network or | ||||||
16 | from the sale of telecommunication services or | ||||||
17 | ancillary services for resale are in this State as | ||||||
18 | follows: | ||||||
19 | (a) 100% of the receipts from access fees | ||||||
20 | attributable to intrastate telecommunications | ||||||
21 | service that both originates and terminates in | ||||||
22 | this State. | ||||||
23 | (b) 50% of the receipts from access fees | ||||||
24 | attributable to interstate telecommunications | ||||||
25 | service if the interstate call either originates | ||||||
26 | or terminates in this State. |
| |||||||
| |||||||
1 | (c) 100% of the receipts from interstate end | ||||||
2 | user access line charges, if the customer's | ||||||
3 | service address is in this State. As used in this | ||||||
4 | subdivision, "interstate end user access line | ||||||
5 | charges" includes, but is not limited to, the | ||||||
6 | surcharge approved by the federal communications | ||||||
7 | commission and levied pursuant to 47 CFR 69. | ||||||
8 | (d) Gross receipts from sales of | ||||||
9 | telecommunication services or from ancillary | ||||||
10 | services for telecommunications services sold to | ||||||
11 | other telecommunication service providers for | ||||||
12 | resale shall be sourced to this State using the | ||||||
13 | apportionment concepts used for non-resale | ||||||
14 | receipts of telecommunications services if the | ||||||
15 | information is readily available to make that | ||||||
16 | determination. If the information is not readily | ||||||
17 | available, then the taxpayer may use any other | ||||||
18 | reasonable and consistent method. | ||||||
19 | (B-7) For taxable years ending on or after December 31, | ||||||
20 | 2008, receipts from the sale of broadcasting services are | ||||||
21 | in this State if the broadcasting services are received in | ||||||
22 | this State. For purposes of this paragraph (B-7), the | ||||||
23 | following terms have the following meanings: | ||||||
24 | "Advertising revenue" means consideration received | ||||||
25 | by the taxpayer in exchange for broadcasting services | ||||||
26 | or allowing the broadcasting of commercials or |
| |||||||
| |||||||
1 | announcements in connection with the broadcasting of | ||||||
2 | film or radio programming, from sponsorships of the | ||||||
3 | programming, or from product placements in the | ||||||
4 | programming. | ||||||
5 | "Audience factor" means the ratio that the | ||||||
6 | audience or subscribers located in this State of a | ||||||
7 | station, a network, or a cable system bears to the | ||||||
8 | total audience or total subscribers for that station, | ||||||
9 | network, or cable system. The audience factor for film | ||||||
10 | or radio programming shall be determined by reference | ||||||
11 | to the books and records of the taxpayer or by | ||||||
12 | reference to published rating statistics provided the | ||||||
13 | method used by the taxpayer is consistently used from | ||||||
14 | year to year for this purpose and fairly represents the | ||||||
15 | taxpayer's activity in this State. | ||||||
16 | "Broadcast" or "broadcasting" or "broadcasting | ||||||
17 | services" means the transmission or provision of film | ||||||
18 | or radio programming, whether through the public | ||||||
19 | airwaves, by cable, by direct or indirect satellite | ||||||
20 | transmission, or by any other means of communication, | ||||||
21 | either through a station, a network, or a cable system. | ||||||
22 | "Film" or "film programming" means the broadcast | ||||||
23 | on television of any and all performances, events, or | ||||||
24 | productions, including but not limited to news, | ||||||
25 | sporting events, plays, stories, or other literary, | ||||||
26 | commercial, educational, or artistic works, either |
| |||||||
| |||||||
1 | live or through the use of video tape, disc, or any | ||||||
2 | other type of format or medium. Each episode of a | ||||||
3 | series of films produced for television shall | ||||||
4 | constitute separate "film" notwithstanding that the | ||||||
5 | series relates to the same principal subject and is | ||||||
6 | produced during one or more tax periods. | ||||||
7 | "Radio" or "radio programming" means the broadcast | ||||||
8 | on radio of any and all performances, events, or | ||||||
9 | productions, including but not limited to news, | ||||||
10 | sporting events, plays, stories, or other literary, | ||||||
11 | commercial, educational, or artistic works, either | ||||||
12 | live or through the use of an audio tape, disc, or any | ||||||
13 | other format or medium. Each episode in a series of | ||||||
14 | radio programming produced for radio broadcast shall | ||||||
15 | constitute a separate "radio programming" | ||||||
16 | notwithstanding that the series relates to the same | ||||||
17 | principal subject and is produced during one or more | ||||||
18 | tax periods. | ||||||
19 | (i) In the case of advertising revenue from | ||||||
20 | broadcasting, the customer is the advertiser and | ||||||
21 | the service is received in this State if the | ||||||
22 | commercial domicile of the advertiser is in this | ||||||
23 | State. | ||||||
24 | (ii) In the case where film or radio | ||||||
25 | programming is broadcast by a station, a network, | ||||||
26 | or a cable system for a fee or other remuneration |
| |||||||
| |||||||
1 | received from the recipient of the broadcast, the | ||||||
2 | portion of the service that is received in this | ||||||
3 | State is measured by the portion of the recipients | ||||||
4 | of the broadcast located in this State. | ||||||
5 | Accordingly, the fee or other remuneration for | ||||||
6 | such service that is included in the Illinois | ||||||
7 | numerator of the sales factor is the total of those | ||||||
8 | fees or other remuneration received from | ||||||
9 | recipients in Illinois. For purposes of this | ||||||
10 | paragraph, a taxpayer may determine the location | ||||||
11 | of the recipients of its broadcast using the | ||||||
12 | address of the recipient shown in its contracts | ||||||
13 | with the recipient or using the billing address of | ||||||
14 | the recipient in the taxpayer's records. | ||||||
15 | (iii) In the case where film or radio | ||||||
16 | programming is broadcast by a station, a network, | ||||||
17 | or a cable system for a fee or other remuneration | ||||||
18 | from the person providing the programming, the | ||||||
19 | portion of the broadcast service that is received | ||||||
20 | by such station, network, or cable system in this | ||||||
21 | State is measured by the portion of recipients of | ||||||
22 | the broadcast located in this State. Accordingly, | ||||||
23 | the amount of revenue related to such an | ||||||
24 | arrangement that is included in the Illinois | ||||||
25 | numerator of the sales factor is the total fee or | ||||||
26 | other total remuneration from the person providing |
| |||||||
| |||||||
1 | the programming related to that broadcast | ||||||
2 | multiplied by the Illinois audience factor for | ||||||
3 | that broadcast. | ||||||
4 | (iv) In the case where film or radio | ||||||
5 | programming is provided by a taxpayer that is a | ||||||
6 | network or station to a customer for broadcast in | ||||||
7 | exchange for a fee or other remuneration from that | ||||||
8 | customer the broadcasting service is received at | ||||||
9 | the location of the office of the customer from | ||||||
10 | which the services were ordered in the regular | ||||||
11 | course of the customer's trade or business. | ||||||
12 | Accordingly, in such a case the revenue derived by | ||||||
13 | the taxpayer that is included in the taxpayer's | ||||||
14 | Illinois numerator of the sales factor is the | ||||||
15 | revenue from such customers who receive the | ||||||
16 | broadcasting service in Illinois. | ||||||
17 | (v) In the case where film or radio programming | ||||||
18 | is provided by a taxpayer that is not a network or | ||||||
19 | station to another person for broadcasting in | ||||||
20 | exchange for a fee or other remuneration from that | ||||||
21 | person, the broadcasting service is received at | ||||||
22 | the location of the office of the customer from | ||||||
23 | which the services were ordered in the regular | ||||||
24 | course of the customer's trade or business. | ||||||
25 | Accordingly, in such a case the revenue derived by | ||||||
26 | the taxpayer that is included in the taxpayer's |
| |||||||
| |||||||
1 | Illinois numerator of the sales factor is the | ||||||
2 | revenue from such customers who receive the | ||||||
3 | broadcasting service in Illinois.
| ||||||
4 | (C) For taxable years ending before December 31, 2008, | ||||||
5 | sales, other than sales governed by paragraphs (B), (B-1), | ||||||
6 | and (B-2), are in
this State if:
| ||||||
7 | (i) The income-producing activity is performed in | ||||||
8 | this State; or
| ||||||
9 | (ii) The income-producing activity is performed | ||||||
10 | both within and
without this State and a greater | ||||||
11 | proportion of the income-producing
activity is | ||||||
12 | performed within this State than without this State, | ||||||
13 | based
on performance costs.
| ||||||
14 | (C-5) For taxable years ending on or after December 31, | ||||||
15 | 2008, sales, other than sales governed by paragraphs (B), | ||||||
16 | (B-1), (B-2), (B-5), and (B-7), are in this State if any of | ||||||
17 | the following criteria are met: | ||||||
18 | (i) Sales from the sale or lease of real property | ||||||
19 | are in this State if the property is located in this | ||||||
20 | State. | ||||||
21 | (ii) Sales from the lease or rental of tangible | ||||||
22 | personal property are in this State if the property is | ||||||
23 | located in this State during the rental period. Sales | ||||||
24 | from the lease or rental of tangible personal property | ||||||
25 | that is characteristically moving property, including, | ||||||
26 | but not limited to, motor vehicles, rolling stock, |
| |||||||
| |||||||
1 | aircraft, vessels, or mobile equipment are in this | ||||||
2 | State to the extent that the property is used in this | ||||||
3 | State. | ||||||
4 | (iii) In the case of interest, net gains (but not | ||||||
5 | less than zero) and other items of income from | ||||||
6 | intangible personal property, the sale is in this State | ||||||
7 | if: | ||||||
8 | (a) in the case of a taxpayer who is a dealer | ||||||
9 | in the item of intangible personal property within | ||||||
10 | the meaning of Section 475 of the Internal Revenue | ||||||
11 | Code, the income or gain is received from a | ||||||
12 | customer in this State. For purposes of this | ||||||
13 | subparagraph, a customer is in this State if the | ||||||
14 | customer is an individual, trust or estate who is a | ||||||
15 | resident of this State and, for all other | ||||||
16 | customers, if the customer's commercial domicile | ||||||
17 | is in this State. Unless the dealer has actual | ||||||
18 | knowledge of the residence or commercial domicile | ||||||
19 | of a customer during a taxable year, the customer | ||||||
20 | shall be deemed to be a customer in this State if | ||||||
21 | the billing address of the customer, as shown in | ||||||
22 | the records of the dealer, is in this State; or | ||||||
23 | (b) in all other cases, if the | ||||||
24 | income-producing activity of the taxpayer is | ||||||
25 | performed in this State or, if the | ||||||
26 | income-producing activity of the taxpayer is |
| |||||||
| |||||||
1 | performed both within and without this State, if a | ||||||
2 | greater proportion of the income-producing | ||||||
3 | activity of the taxpayer is performed within this | ||||||
4 | State than in any other state, based on performance | ||||||
5 | costs. | ||||||
6 | (iv) Sales of services are in this State if the | ||||||
7 | services are received in this State. For the purposes | ||||||
8 | of this section, gross receipts from the performance of | ||||||
9 | services provided to a corporation, partnership, or | ||||||
10 | trust may only be attributed to a state where that | ||||||
11 | corporation, partnership, or trust has a fixed place of | ||||||
12 | business. If the state where the services are received | ||||||
13 | is not readily determinable or is a state where the | ||||||
14 | corporation, partnership, or trust receiving the | ||||||
15 | service does not have a fixed place of business, the | ||||||
16 | services shall be deemed to be received at the location | ||||||
17 | of the office of the customer from which the services | ||||||
18 | were ordered in the regular course of the customer's | ||||||
19 | trade or business. If the ordering office cannot be | ||||||
20 | determined, the services shall be deemed to be received | ||||||
21 | at the office of the customer to which the services are | ||||||
22 | billed. If the taxpayer is not taxable in the state in | ||||||
23 | which the services are received, the sale must be | ||||||
24 | excluded from both the numerator and the denominator of | ||||||
25 | the sales factor. The Department shall adopt rules | ||||||
26 | prescribing where specific types of service are |
| |||||||
| |||||||
1 | received, including, but not limited to, publishing, | ||||||
2 | and utility service.
| ||||||
3 | (D) For taxable years ending on or after December 31, | ||||||
4 | 1995, the following
items of income shall not be included | ||||||
5 | in the numerator or denominator of the
sales factor: | ||||||
6 | dividends; amounts included under Section 78 of the | ||||||
7 | Internal
Revenue Code; and Subpart F income as defined in | ||||||
8 | Section 952 of the Internal
Revenue Code.
No inference | ||||||
9 | shall be drawn from the enactment of this paragraph (D) in
| ||||||
10 | construing this Section for taxable years ending before | ||||||
11 | December 31, 1995.
| ||||||
12 | (E) Paragraphs (B-1) and (B-2) shall apply to tax years | ||||||
13 | ending on or
after December 31, 1999, provided that a | ||||||
14 | taxpayer may elect to apply the
provisions of these | ||||||
15 | paragraphs to prior tax years. Such election shall be made
| ||||||
16 | in the form and manner prescribed by the Department, shall | ||||||
17 | be irrevocable, and
shall apply to all tax years; provided | ||||||
18 | that, if a taxpayer's Illinois income
tax liability for any | ||||||
19 | tax year, as assessed under Section 903 prior to January
1, | ||||||
20 | 1999, was computed in a manner contrary to the provisions | ||||||
21 | of paragraphs
(B-1) or (B-2), no refund shall be payable to | ||||||
22 | the taxpayer for that tax year to
the extent such refund is | ||||||
23 | the result of applying the provisions of paragraph
(B-1) or | ||||||
24 | (B-2) retroactively. In the case of a unitary business | ||||||
25 | group, such
election shall apply to all members of such | ||||||
26 | group for every tax year such group
is in existence, but |
| |||||||
| |||||||
1 | shall not apply to any taxpayer for any period during
which | ||||||
2 | that taxpayer is not a member of such group.
| ||||||
3 | (b) Insurance companies.
| ||||||
4 | (1) In general. Except as otherwise
provided by | ||||||
5 | paragraph (2), business income of an insurance company for | ||||||
6 | a
taxable year shall be apportioned to this State by | ||||||
7 | multiplying such
income by a fraction, the numerator of | ||||||
8 | which is the direct premiums
written for insurance upon | ||||||
9 | property or risk in this State, and the
denominator of | ||||||
10 | which is the direct premiums written for insurance upon
| ||||||
11 | property or risk everywhere. For purposes of this | ||||||
12 | subsection, the term
"direct premiums written" means the | ||||||
13 | total amount of direct premiums
written, assessments and | ||||||
14 | annuity considerations as reported for the
taxable year on | ||||||
15 | the annual statement filed by the company with the
Illinois | ||||||
16 | Director of Insurance in the form approved by the National
| ||||||
17 | Convention of Insurance Commissioners
or such other form as | ||||||
18 | may be
prescribed in lieu thereof.
| ||||||
19 | (2) Reinsurance. If the principal source of premiums | ||||||
20 | written by an
insurance company consists of premiums for | ||||||
21 | reinsurance accepted by it,
the business income of such | ||||||
22 | company shall be apportioned to this State
by multiplying | ||||||
23 | such income by a fraction, the numerator of which is the
| ||||||
24 | sum of (i) direct premiums written for insurance upon | ||||||
25 | property or risk
in this State, plus (ii) premiums written | ||||||
26 | for reinsurance accepted in
respect of property or risk in |
| |||||||
| |||||||
1 | this State, and the denominator of which
is the sum of | ||||||
2 | (iii) direct premiums written for insurance upon property
| ||||||
3 | or risk everywhere, plus (iv) premiums written for | ||||||
4 | reinsurance accepted
in respect of property or risk | ||||||
5 | everywhere. For purposes of this
paragraph, premiums | ||||||
6 | written for reinsurance accepted in respect of
property or | ||||||
7 | risk in this State, whether or not otherwise determinable,
| ||||||
8 | may, at the election of the company, be determined on the | ||||||
9 | basis of the
proportion which premiums written for | ||||||
10 | reinsurance accepted from
companies commercially domiciled | ||||||
11 | in Illinois bears to premiums written
for reinsurance | ||||||
12 | accepted from all sources, or, alternatively, in the
| ||||||
13 | proportion which the sum of the direct premiums written for | ||||||
14 | insurance
upon property or risk in this State by each | ||||||
15 | ceding company from which
reinsurance is accepted bears to | ||||||
16 | the sum of the total direct premiums
written by each such | ||||||
17 | ceding company for the taxable year. The election made by a | ||||||
18 | company under this paragraph for its first taxable year | ||||||
19 | ending on or after December 31, 2011, shall be binding for | ||||||
20 | that company for that taxable year and for all subsequent | ||||||
21 | taxable years, and may be altered only with the written | ||||||
22 | permission of the Department, which shall not be | ||||||
23 | unreasonably withheld.
| ||||||
24 | (c) Financial organizations.
| ||||||
25 | (1) In general. For taxable years ending before | ||||||
26 | December 31, 2008, business income of a financial
|
| |||||||
| |||||||
1 | organization shall be apportioned to this State by | ||||||
2 | multiplying such
income by a fraction, the numerator of | ||||||
3 | which is its business income from
sources within this | ||||||
4 | State, and the denominator of which is its business
income | ||||||
5 | from all sources. For the purposes of this subsection, the
| ||||||
6 | business income of a financial organization from sources | ||||||
7 | within this
State is the sum of the amounts referred to in | ||||||
8 | subparagraphs (A) through
(E) following, but excluding the | ||||||
9 | adjusted income of an international banking
facility as | ||||||
10 | determined in paragraph (2):
| ||||||
11 | (A) Fees, commissions or other compensation for | ||||||
12 | financial services
rendered within this State;
| ||||||
13 | (B) Gross profits from trading in stocks, bonds or | ||||||
14 | other securities
managed within this State;
| ||||||
15 | (C) Dividends, and interest from Illinois | ||||||
16 | customers, which are received
within this State;
| ||||||
17 | (D) Interest charged to customers at places of | ||||||
18 | business maintained
within this State for carrying | ||||||
19 | debit balances of margin accounts,
without deduction | ||||||
20 | of any costs incurred in carrying such accounts; and
| ||||||
21 | (E) Any other gross income resulting from the | ||||||
22 | operation as a
financial organization within this | ||||||
23 | State. In computing the amounts
referred to in | ||||||
24 | paragraphs (A) through (E) of this subsection, any | ||||||
25 | amount
received by a member of an affiliated group | ||||||
26 | (determined under Section
1504(a) of the Internal |
| |||||||
| |||||||
1 | Revenue Code but without reference to whether
any such | ||||||
2 | corporation is an "includible corporation" under | ||||||
3 | Section
1504(b) of the Internal Revenue Code) from | ||||||
4 | another member of such group
shall be included only to | ||||||
5 | the extent such amount exceeds expenses of the
| ||||||
6 | recipient directly related thereto.
| ||||||
7 | (2) International Banking Facility. For taxable years | ||||||
8 | ending before December 31, 2008:
| ||||||
9 | (A) Adjusted Income. The adjusted income of an | ||||||
10 | international banking
facility is its income reduced | ||||||
11 | by the amount of the floor amount.
| ||||||
12 | (B) Floor Amount. The floor amount shall be the | ||||||
13 | amount, if any,
determined
by multiplying the income of | ||||||
14 | the international banking facility by a fraction,
not | ||||||
15 | greater than one, which is determined as follows:
| ||||||
16 | (i) The numerator shall be:
| ||||||
17 | The average aggregate, determined on a | ||||||
18 | quarterly basis, of the
financial
organization's | ||||||
19 | loans to banks in foreign countries, to foreign | ||||||
20 | domiciled
borrowers (except where secured | ||||||
21 | primarily by real estate) and to foreign
| ||||||
22 | governments and other foreign official | ||||||
23 | institutions, as reported for its
branches, | ||||||
24 | agencies and offices within the state on its | ||||||
25 | "Consolidated Report
of Condition", Schedule A, | ||||||
26 | Lines 2.c., 5.b., and 7.a., which was filed with
|
| |||||||
| |||||||
1 | the Federal Deposit Insurance Corporation and | ||||||
2 | other regulatory authorities,
for the year 1980, | ||||||
3 | minus
| ||||||
4 | The average aggregate, determined on a | ||||||
5 | quarterly basis, of such loans
(other
than loans of | ||||||
6 | an international banking facility), as reported by | ||||||
7 | the financial
institution for its branches, | ||||||
8 | agencies and offices within the state, on
the | ||||||
9 | corresponding Schedule and lines of the | ||||||
10 | Consolidated Report of Condition
for the current | ||||||
11 | taxable year, provided, however, that in no case | ||||||
12 | shall the
amount determined in this clause (the | ||||||
13 | subtrahend) exceed the amount determined
in the | ||||||
14 | preceding clause (the minuend); and
| ||||||
15 | (ii) the denominator shall be the average | ||||||
16 | aggregate, determined on a
quarterly basis, of the | ||||||
17 | international banking facility's loans to banks in
| ||||||
18 | foreign countries, to foreign domiciled borrowers | ||||||
19 | (except where secured
primarily by real estate) | ||||||
20 | and to foreign governments and other foreign
| ||||||
21 | official institutions, which were recorded in its | ||||||
22 | financial accounts for
the current taxable year.
| ||||||
23 | (C) Change to Consolidated Report of Condition and | ||||||
24 | in Qualification.
In the event the Consolidated Report | ||||||
25 | of Condition which is filed with the
Federal Deposit | ||||||
26 | Insurance Corporation and other regulatory authorities |
| |||||||
| |||||||
1 | is
altered so that the information required for | ||||||
2 | determining the floor amount
is not found on Schedule | ||||||
3 | A, lines 2.c., 5.b. and 7.a., the financial
institution | ||||||
4 | shall notify the Department and the Department may, by
| ||||||
5 | regulations or otherwise, prescribe or authorize the | ||||||
6 | use of an alternative
source for such information. The | ||||||
7 | financial institution shall also notify
the Department | ||||||
8 | should its international banking facility fail to | ||||||
9 | qualify as
such, in whole or in part, or should there | ||||||
10 | be any amendment or change to
the Consolidated Report | ||||||
11 | of Condition, as originally filed, to the extent
such | ||||||
12 | amendment or change alters the information used in | ||||||
13 | determining the floor
amount.
| ||||||
14 | (3) For taxable years ending on or after December 31, | ||||||
15 | 2008, the business income of a financial organization shall | ||||||
16 | be apportioned to this State by multiplying such income by | ||||||
17 | a fraction, the numerator of which is its gross receipts | ||||||
18 | from sources in this State or otherwise attributable to | ||||||
19 | this State's marketplace and the denominator of which is | ||||||
20 | its gross receipts everywhere during the taxable year. | ||||||
21 | "Gross receipts" for purposes of this subparagraph (3) | ||||||
22 | means gross income, including net taxable gain on | ||||||
23 | disposition of assets, including securities and money | ||||||
24 | market instruments, when derived from transactions and | ||||||
25 | activities in the regular course of the financial | ||||||
26 | organization's trade or business. The following examples |
| |||||||
| |||||||
1 | are illustrative:
| ||||||
2 | (i) Receipts from the lease or rental of real or | ||||||
3 | tangible personal property are in this State if the | ||||||
4 | property is located in this State during the rental | ||||||
5 | period. Receipts from the lease or rental of tangible | ||||||
6 | personal property that is characteristically moving | ||||||
7 | property, including, but not limited to, motor | ||||||
8 | vehicles, rolling stock, aircraft, vessels, or mobile | ||||||
9 | equipment are from sources in this State to the extent | ||||||
10 | that the property is used in this State. | ||||||
11 | (ii) Interest income, commissions, fees, gains on | ||||||
12 | disposition, and other receipts from assets in the | ||||||
13 | nature of loans that are secured primarily by real | ||||||
14 | estate or tangible personal property are from sources | ||||||
15 | in this State if the security is located in this State. | ||||||
16 | (iii) Interest income, commissions, fees, gains on | ||||||
17 | disposition, and other receipts from consumer loans | ||||||
18 | that are not secured by real or tangible personal | ||||||
19 | property are from sources in this State if the debtor | ||||||
20 | is a resident of this State. | ||||||
21 | (iv) Interest income, commissions, fees, gains on | ||||||
22 | disposition, and other receipts from commercial loans | ||||||
23 | and installment obligations that are not secured by | ||||||
24 | real or tangible personal property are from sources in | ||||||
25 | this State if the proceeds of the loan are to be | ||||||
26 | applied in this State. If it cannot be determined where |
| |||||||
| |||||||
1 | the funds are to be applied, the income and receipts | ||||||
2 | are from sources in this State if the office of the | ||||||
3 | borrower from which the loan was negotiated in the | ||||||
4 | regular course of business is located in this State. If | ||||||
5 | the location of this office cannot be determined, the | ||||||
6 | income and receipts shall be excluded from the | ||||||
7 | numerator and denominator of the sales factor.
| ||||||
8 | (v) Interest income, fees, gains on disposition, | ||||||
9 | service charges, merchant discount income, and other | ||||||
10 | receipts from credit card receivables are from sources | ||||||
11 | in this State if the card charges are regularly billed | ||||||
12 | to a customer in this State. | ||||||
13 | (vi) Receipts from the performance of services, | ||||||
14 | including, but not limited to, fiduciary, advisory, | ||||||
15 | and brokerage services, are in this State if the | ||||||
16 | services are received in this State within the meaning | ||||||
17 | of subparagraph (a)(3)(C-5)(iv) of this Section. | ||||||
18 | (vii) Receipts from the issuance of travelers | ||||||
19 | checks and money orders are from sources in this State | ||||||
20 | if the checks and money orders are issued from a | ||||||
21 | location within this State. | ||||||
22 | (viii) Receipts from investment assets and | ||||||
23 | activities and trading assets and activities are | ||||||
24 | included in the receipts factor as follows: | ||||||
25 | (1) Interest, dividends, net gains (but not | ||||||
26 | less than zero) and other income from investment |
| |||||||
| |||||||
1 | assets and activities from trading assets and | ||||||
2 | activities shall be included in the receipts | ||||||
3 | factor. Investment assets and activities and | ||||||
4 | trading assets and activities include but are not | ||||||
5 | limited to: investment securities; trading account | ||||||
6 | assets; federal funds; securities purchased and | ||||||
7 | sold under agreements to resell or repurchase; | ||||||
8 | options; futures contracts; forward contracts; | ||||||
9 | notional principal contracts such as swaps; | ||||||
10 | equities; and foreign currency transactions. With | ||||||
11 | respect to the investment and trading assets and | ||||||
12 | activities described in subparagraphs (A) and (B) | ||||||
13 | of this paragraph, the receipts factor shall | ||||||
14 | include the amounts described in such | ||||||
15 | subparagraphs. | ||||||
16 | (A) The receipts factor shall include the | ||||||
17 | amount by which interest from federal funds | ||||||
18 | sold and securities purchased under resale | ||||||
19 | agreements exceeds interest expense on federal | ||||||
20 | funds purchased and securities sold under | ||||||
21 | repurchase agreements. | ||||||
22 | (B) The receipts factor shall include the | ||||||
23 | amount by which interest, dividends, gains and | ||||||
24 | other income from trading assets and | ||||||
25 | activities, including but not limited to | ||||||
26 | assets and activities in the matched book, in |
| |||||||
| |||||||
1 | the arbitrage book, and foreign currency | ||||||
2 | transactions, exceed amounts paid in lieu of | ||||||
3 | interest, amounts paid in lieu of dividends, | ||||||
4 | and losses from such assets and activities. | ||||||
5 | (2) The numerator of the receipts factor | ||||||
6 | includes interest, dividends, net gains (but not | ||||||
7 | less than zero), and other income from investment | ||||||
8 | assets and activities and from trading assets and | ||||||
9 | activities described in paragraph (1) of this | ||||||
10 | subsection that are attributable to this State. | ||||||
11 | (A) The amount of interest, dividends, net | ||||||
12 | gains (but not less than zero), and other | ||||||
13 | income from investment assets and activities | ||||||
14 | in the investment account to be attributed to | ||||||
15 | this State and included in the numerator is | ||||||
16 | determined by multiplying all such income from | ||||||
17 | such assets and activities by a fraction, the | ||||||
18 | numerator of which is the gross income from | ||||||
19 | such assets and activities which are properly | ||||||
20 | assigned to a fixed place of business of the | ||||||
21 | taxpayer within this State and the denominator | ||||||
22 | of which is the gross income from all such | ||||||
23 | assets and activities. | ||||||
24 | (B) The amount of interest from federal | ||||||
25 | funds sold and purchased and from securities | ||||||
26 | purchased under resale agreements and |
| |||||||
| |||||||
1 | securities sold under repurchase agreements | ||||||
2 | attributable to this State and included in the | ||||||
3 | numerator is determined by multiplying the | ||||||
4 | amount described in subparagraph (A) of | ||||||
5 | paragraph (1) of this subsection from such | ||||||
6 | funds and such securities by a fraction, the | ||||||
7 | numerator of which is the gross income from | ||||||
8 | such funds and such securities which are | ||||||
9 | properly assigned to a fixed place of business | ||||||
10 | of the taxpayer within this State and the | ||||||
11 | denominator of which is the gross income from | ||||||
12 | all such funds and such securities. | ||||||
13 | (C) The amount of interest, dividends, | ||||||
14 | gains, and other income from trading assets and | ||||||
15 | activities, including but not limited to | ||||||
16 | assets and activities in the matched book, in | ||||||
17 | the arbitrage book and foreign currency | ||||||
18 | transactions (but excluding amounts described | ||||||
19 | in subparagraphs (A) or (B) of this paragraph), | ||||||
20 | attributable to this State and included in the | ||||||
21 | numerator is determined by multiplying the | ||||||
22 | amount described in subparagraph (B) of | ||||||
23 | paragraph (1) of this subsection by a fraction, | ||||||
24 | the numerator of which is the gross income from | ||||||
25 | such trading assets and activities which are | ||||||
26 | properly assigned to a fixed place of business |
| |||||||
| |||||||
1 | of the taxpayer within this State and the | ||||||
2 | denominator of which is the gross income from | ||||||
3 | all such assets and activities. | ||||||
4 | (D) Properly assigned, for purposes of | ||||||
5 | this paragraph (2) of this subsection, means | ||||||
6 | the investment or trading asset or activity is | ||||||
7 | assigned to the fixed place of business with | ||||||
8 | which it has a preponderance of substantive | ||||||
9 | contacts. An investment or trading asset or | ||||||
10 | activity assigned by the taxpayer to a fixed | ||||||
11 | place of business without the State shall be | ||||||
12 | presumed to have been properly assigned if: | ||||||
13 | (i) the taxpayer has assigned, in the | ||||||
14 | regular course of its business, such asset | ||||||
15 | or activity on its records to a fixed place | ||||||
16 | of business consistent with federal or | ||||||
17 | state regulatory requirements; | ||||||
18 | (ii) such assignment on its records is | ||||||
19 | based upon substantive contacts of the | ||||||
20 | asset or activity to such fixed place of | ||||||
21 | business; and | ||||||
22 | (iii) the taxpayer uses such records | ||||||
23 | reflecting assignment of such assets or | ||||||
24 | activities for the filing of all state and | ||||||
25 | local tax returns for which an assignment | ||||||
26 | of such assets or activities to a fixed |
| |||||||
| |||||||
1 | place of business is required. | ||||||
2 | (E) The presumption of proper assignment | ||||||
3 | of an investment or trading asset or activity | ||||||
4 | provided in subparagraph (D) of paragraph (2) | ||||||
5 | of this subsection may be rebutted upon a | ||||||
6 | showing by the Department, supported by a | ||||||
7 | preponderance of the evidence, that the | ||||||
8 | preponderance of substantive contacts | ||||||
9 | regarding such asset or activity did not occur | ||||||
10 | at the fixed place of business to which it was | ||||||
11 | assigned on the taxpayer's records. If the | ||||||
12 | fixed place of business that has a | ||||||
13 | preponderance of substantive contacts cannot | ||||||
14 | be determined for an investment or trading | ||||||
15 | asset or activity to which the presumption in | ||||||
16 | subparagraph (D) of paragraph (2) of this | ||||||
17 | subsection does not apply or with respect to | ||||||
18 | which that presumption has been rebutted, that | ||||||
19 | asset or activity is properly assigned to the | ||||||
20 | state in which the taxpayer's commercial | ||||||
21 | domicile is located. For purposes of this | ||||||
22 | subparagraph (E), it shall be presumed, | ||||||
23 | subject to rebuttal, that taxpayer's | ||||||
24 | commercial domicile is in the state of the | ||||||
25 | United States or the District of Columbia to | ||||||
26 | which the greatest number of employees are |
| |||||||
| |||||||
1 | regularly connected with the management of the | ||||||
2 | investment or trading income or out of which | ||||||
3 | they are working, irrespective of where the | ||||||
4 | services of such employees are performed, as of | ||||||
5 | the last day of the taxable year.
| ||||||
6 | (4) (Blank). | ||||||
7 | (5) (Blank). | ||||||
8 | (c-1) Federally regulated exchanges. For taxable years | ||||||
9 | ending on or after December 31, 2012, business income of a | ||||||
10 | federally regulated exchange shall, at the option of the | ||||||
11 | federally regulated exchange, be apportioned to this State by | ||||||
12 | multiplying such income by a fraction, the numerator of which | ||||||
13 | is its business income from sources within this State, and the | ||||||
14 | denominator of which is its business income from all sources. | ||||||
15 | For purposes of this subsection, the business income within | ||||||
16 | this State of a federally regulated exchange is the sum of the | ||||||
17 | following: | ||||||
18 | (1) Receipts attributable to transactions executed on | ||||||
19 | a physical trading floor if that physical trading floor is | ||||||
20 | located in this State. | ||||||
21 | (2) Receipts attributable to all other matching, | ||||||
22 | execution, or clearing transactions, including without | ||||||
23 | limitation receipts from the provision of matching, | ||||||
24 | execution, or clearing services to another entity, | ||||||
25 | multiplied by (i) for taxable years ending on or after | ||||||
26 | December 31, 2012 but before December 31, 2013, 63.77%; and |
| |||||||
| |||||||
1 | (ii) for taxable years ending on or after December 31, | ||||||
2 | 2013, 27.54%. | ||||||
3 | (3) All other receipts not governed by subparagraphs | ||||||
4 | (1) or (2) of this subsection (c-1), to the extent the | ||||||
5 | receipts would be characterized as "sales in this State" | ||||||
6 | under item (3) of subsection (a) of this Section. | ||||||
7 | "Federally regulated exchange" means (i) a "registered | ||||||
8 | entity" within the meaning of 7 U.S.C. Section 1a(40)(A), (B), | ||||||
9 | or (C), (ii) an "exchange" or "clearing agency" within the | ||||||
10 | meaning of 15 U.S.C. Section 78c (a)(1) or (23), (iii) any such | ||||||
11 | entities regulated under any successor regulatory structure to | ||||||
12 | the foregoing, and (iv) all taxpayers who are members of the | ||||||
13 | same unitary business group as a federally regulated exchange, | ||||||
14 | determined without regard to the prohibition in Section | ||||||
15 | 1501(a)(27) of this Act against including in a unitary business | ||||||
16 | group taxpayers who are ordinarily required to apportion | ||||||
17 | business income under different subsections of this Section; | ||||||
18 | provided that this subparagraph (iv) shall apply only if 50% or | ||||||
19 | more of the business receipts of the unitary business group | ||||||
20 | determined by application of this subparagraph (iv) for the | ||||||
21 | taxable year are attributable to the matching, execution, or | ||||||
22 | clearing of transactions conducted by an entity described in | ||||||
23 | subparagraph (i), (ii), or (iii) of this paragraph. | ||||||
24 | In no event shall the Illinois apportionment percentage | ||||||
25 | computed in accordance with this subsection (c-1) for any | ||||||
26 | taxpayer for any tax year be less than the Illinois |
| |||||||
| |||||||
1 | apportionment percentage computed under this subsection (c-1) | ||||||
2 | for that taxpayer for the first full tax year ending on or | ||||||
3 | after December 31, 2013 for which this subsection (c-1) applied | ||||||
4 | to the taxpayer. | ||||||
5 | (d) Transportation services. For taxable years ending | ||||||
6 | before December 31, 2008, business income derived from | ||||||
7 | furnishing
transportation services shall be apportioned to | ||||||
8 | this State in accordance
with paragraphs (1) and (2):
| ||||||
9 | (1) Such business income (other than that derived from
| ||||||
10 | transportation by pipeline) shall be apportioned to this | ||||||
11 | State by
multiplying such income by a fraction, the | ||||||
12 | numerator of which is the
revenue miles of the person in | ||||||
13 | this State, and the denominator of which
is the revenue | ||||||
14 | miles of the person everywhere. For purposes of this
| ||||||
15 | paragraph, a revenue mile is the transportation of 1 | ||||||
16 | passenger or 1 net
ton of freight the distance of 1 mile | ||||||
17 | for a consideration. Where a
person is engaged in the | ||||||
18 | transportation of both passengers and freight,
the | ||||||
19 | fraction above referred to shall be determined by means of | ||||||
20 | an
average of the passenger revenue mile fraction and the | ||||||
21 | freight revenue
mile fraction, weighted to reflect the | ||||||
22 | person's
| ||||||
23 | (A) relative railway operating income from total | ||||||
24 | passenger and total
freight service, as reported to the | ||||||
25 | Interstate Commerce Commission, in
the case of | ||||||
26 | transportation by railroad, and
|
| |||||||
| |||||||
1 | (B) relative gross receipts from passenger and | ||||||
2 | freight
transportation, in case of transportation | ||||||
3 | other than by railroad.
| ||||||
4 | (2) Such business income derived from transportation | ||||||
5 | by pipeline
shall be apportioned to this State by | ||||||
6 | multiplying such income by a
fraction, the numerator of | ||||||
7 | which is the revenue miles of the person in
this State, and | ||||||
8 | the denominator of which is the revenue miles of the
person | ||||||
9 | everywhere. For the purposes of this paragraph, a revenue | ||||||
10 | mile is
the transportation by pipeline of 1 barrel of oil, | ||||||
11 | 1,000 cubic feet of
gas, or of any specified quantity of | ||||||
12 | any other substance, the distance
of 1 mile for a | ||||||
13 | consideration.
| ||||||
14 | (3) For taxable years ending on or after December 31, | ||||||
15 | 2008, business income derived from providing | ||||||
16 | transportation services other than airline services shall | ||||||
17 | be apportioned to this State by using a fraction, (a) the | ||||||
18 | numerator of which shall be (i) all receipts from any | ||||||
19 | movement or shipment of people, goods, mail, oil, gas, or | ||||||
20 | any other substance (other than by airline) that both | ||||||
21 | originates and terminates in this State, plus (ii) that | ||||||
22 | portion of the person's gross receipts from movements or | ||||||
23 | shipments of people, goods, mail, oil, gas, or any other | ||||||
24 | substance (other than by airline) that originates in one | ||||||
25 | state or jurisdiction and terminates in another state or | ||||||
26 | jurisdiction, that is determined by the ratio that the |
| |||||||
| |||||||
1 | miles traveled in this State bears to total miles | ||||||
2 | everywhere and (b) the denominator of which shall be all | ||||||
3 | revenue derived from the movement or shipment of people, | ||||||
4 | goods, mail, oil, gas, or any other substance (other than | ||||||
5 | by airline). Where a taxpayer is engaged in the | ||||||
6 | transportation of both passengers and freight, the | ||||||
7 | fraction above referred to shall first be determined | ||||||
8 | separately for passenger miles and freight miles. Then an | ||||||
9 | average of the passenger miles fraction and the freight | ||||||
10 | miles fraction shall be weighted to reflect the taxpayer's: | ||||||
11 | (A) relative railway operating income from total | ||||||
12 | passenger and total freight service, as reported to the | ||||||
13 | Surface Transportation Board, in the case of | ||||||
14 | transportation by railroad; and
| ||||||
15 | (B) relative gross receipts from passenger and | ||||||
16 | freight transportation, in case of transportation | ||||||
17 | other than by railroad.
| ||||||
18 | (4) For taxable years ending on or after December 31, | ||||||
19 | 2008, business income derived from furnishing airline
| ||||||
20 | transportation services shall be apportioned to this State | ||||||
21 | by
multiplying such income by a fraction, the numerator of | ||||||
22 | which is the
revenue miles of the person in this State, and | ||||||
23 | the denominator of which
is the revenue miles of the person | ||||||
24 | everywhere. For purposes of this
paragraph, a revenue mile | ||||||
25 | is the transportation of one passenger or one net
ton of | ||||||
26 | freight the distance of one mile for a consideration. If a
|
| |||||||
| |||||||
1 | person is engaged in the transportation of both passengers | ||||||
2 | and freight,
the fraction above referred to shall be | ||||||
3 | determined by means of an
average of the passenger revenue | ||||||
4 | mile fraction and the freight revenue
mile fraction, | ||||||
5 | weighted to reflect the person's relative gross receipts | ||||||
6 | from passenger and freight
airline transportation.
| ||||||
7 | (e) Combined apportionment. Where 2 or more persons are | ||||||
8 | engaged in
a unitary business as described in subsection | ||||||
9 | (a)(27) of
Section 1501,
a part of which is conducted in this | ||||||
10 | State by one or more members of the
group, the business income | ||||||
11 | attributable to this State by any such member
or members shall | ||||||
12 | be apportioned by means of the combined apportionment method.
| ||||||
13 | (f) Alternative allocation. If the allocation and | ||||||
14 | apportionment
provisions of subsections (a) through (e) and of | ||||||
15 | subsection (h) do not , for taxable years ending before December | ||||||
16 | 31, 2008, fairly represent the
extent of a person's business | ||||||
17 | activity in this State, or, for taxable years ending on or | ||||||
18 | after December 31, 2008, fairly represent the market for the | ||||||
19 | person's goods, services, or other sources of business income, | ||||||
20 | the person may
petition for, or the Director may, without a | ||||||
21 | petition, permit or require, in respect of all or any part
of | ||||||
22 | the person's business activity, if reasonable:
| ||||||
23 | (1) Separate accounting;
| ||||||
24 | (2) The exclusion of any one or more factors;
| ||||||
25 | (3) The inclusion of one or more additional factors | ||||||
26 | which will
fairly represent the person's business |
| |||||||
| |||||||
1 | activities or market in this State; or
| ||||||
2 | (4) The employment of any other method to effectuate an | ||||||
3 | equitable
allocation and apportionment of the person's | ||||||
4 | business income.
| ||||||
5 | (g) Cross reference. For allocation of business income by | ||||||
6 | residents,
see Section 301(a).
| ||||||
7 | (h) For tax years ending on or after December 31, 1998, the | ||||||
8 | apportionment
factor of persons who apportion their business | ||||||
9 | income to this State under
subsection (a) shall be equal to:
| ||||||
10 | (1) for tax years ending on or after December 31, 1998 | ||||||
11 | and before December
31, 1999, 16 2/3% of the property | ||||||
12 | factor plus 16 2/3% of the payroll factor
plus
66 2/3% of | ||||||
13 | the sales factor;
| ||||||
14 | (2) for tax years ending on or after December 31, 1999 | ||||||
15 | and before December
31,
2000, 8 1/3% of the property factor | ||||||
16 | plus 8 1/3% of the payroll factor plus 83
1/3%
of the sales | ||||||
17 | factor;
| ||||||
18 | (3) for tax years ending on or after December 31, 2000, | ||||||
19 | the sales factor.
| ||||||
20 | If, in any tax year ending on or after December 31, 1998 and | ||||||
21 | before December
31, 2000, the denominator of the payroll, | ||||||
22 | property, or sales factor is zero,
the apportionment
factor | ||||||
23 | computed in paragraph (1) or (2) of this subsection for that | ||||||
24 | year shall
be divided by an amount equal to 100% minus the | ||||||
25 | percentage weight given to each
factor whose denominator is | ||||||
26 | equal to zero.
|
| |||||||
| |||||||
1 | (Source: P.A. 96-763, eff. 8-25-09; 97-507, eff. 8-23-11; | ||||||
2 | 97-636, eff. 6-1-12 .)
| ||||||
3 | (35 ILCS 5/502) (from Ch. 120, par. 5-502)
| ||||||
4 | Sec. 502. Returns and notices.
| ||||||
5 | (a) In general. A return with respect to the taxes imposed | ||||||
6 | by this
Act shall be made by every person for any taxable year:
| ||||||
7 | (1) for which such person is liable for a tax imposed | ||||||
8 | by this Act,
or
| ||||||
9 | (2) in the case of a resident or in the case of a | ||||||
10 | corporation which
is qualified to do business in this | ||||||
11 | State, for which such person is
required to make a federal | ||||||
12 | income tax return, regardless of whether such
person is | ||||||
13 | liable for a tax imposed by this Act. However, this | ||||||
14 | paragraph
shall not require a resident to make a return if | ||||||
15 | such person has
an
Illinois base income of the basic amount | ||||||
16 | in Section 204(b) or
less and is either claimed as a | ||||||
17 | dependent on
another person's tax return under the Internal | ||||||
18 | Revenue Code, or is
claimed as a dependent on another | ||||||
19 | person's tax return under this Act.
| ||||||
20 | Notwithstanding the provisions of paragraph (1), a | ||||||
21 | nonresident (other than, for taxable years ending on or after | ||||||
22 | December 31, 2011, a nonresident required to withhold tax under | ||||||
23 | Section 709.5) whose Illinois income tax liability under | ||||||
24 | subsections (a), (b), (c), and (d) of Section 201 of this Act | ||||||
25 | is paid in full after taking into account the credits allowed |
| |||||||
| |||||||
1 | under subsection (f) of this Section or allowed under Section | ||||||
2 | 709.5 of this Act shall not be required to file a return under | ||||||
3 | this subsection (a).
| ||||||
4 | (b) Fiduciaries and receivers.
| ||||||
5 | (1) Decedents. If an individual is deceased, any return | ||||||
6 | or notice
required of such individual under this Act shall | ||||||
7 | be made by his
executor, administrator, or other person | ||||||
8 | charged with the property of
such decedent.
| ||||||
9 | (2) Individuals under a disability. If an individual is | ||||||
10 | unable
to make a return or notice required under this Act, | ||||||
11 | the return or notice
required of such individual shall be | ||||||
12 | made by his duly authorized agent,
guardian, fiduciary or | ||||||
13 | other person charged with the care
of the person or | ||||||
14 | property of such individual.
| ||||||
15 | (3) Estates and trusts. Returns or notices required of | ||||||
16 | an estate
or a trust shall be made by the fiduciary | ||||||
17 | thereof.
| ||||||
18 | (4) Receivers, trustees and assignees for | ||||||
19 | corporations. In a
case where a receiver, trustee in | ||||||
20 | bankruptcy, or assignee, by order of a
court of competent | ||||||
21 | jurisdiction, by operation of law, or otherwise, has
| ||||||
22 | possession of or holds title to all or substantially all | ||||||
23 | the property or
business of a corporation, whether or not | ||||||
24 | such property or business is
being operated, such receiver, | ||||||
25 | trustee, or assignee shall make the
returns and notices | ||||||
26 | required of such corporation in the same manner and
form as |
| |||||||
| |||||||
1 | corporations are required to make such returns and notices.
| ||||||
2 | (c) Joint returns by husband and wife.
| ||||||
3 | (1) Except as provided in paragraph (3): | ||||||
4 | (A) if a husband and wife file a
joint federal | ||||||
5 | income tax return for a taxable year ending before | ||||||
6 | December 31, 2009, they shall file a joint
return under | ||||||
7 | this Act for such taxable year and their liabilities | ||||||
8 | shall be
joint and several; | ||||||
9 | (B) if a husband and wife file a joint federal | ||||||
10 | income tax return for a taxable year ending on or after | ||||||
11 | December 31, 2009, they may elect to file separate | ||||||
12 | returns under this Act for such taxable year. The | ||||||
13 | election under this paragraph must be made on or before | ||||||
14 | the due date (including extensions) of the return and, | ||||||
15 | once made, shall be irrevocable. If no election is | ||||||
16 | timely made under this paragraph for a taxable year: | ||||||
17 | (i) the couple must file a joint return under | ||||||
18 | this Act for such taxable year, | ||||||
19 | (ii) their liabilities shall be joint and | ||||||
20 | several, and | ||||||
21 | (iii) any overpayment for that taxable year | ||||||
22 | may be withheld under Section 909 of this Act or | ||||||
23 | under Section 2505-275 of the Civil Administrative | ||||||
24 | Code of Illinois and applied against a debt of | ||||||
25 | either spouse without regard to the amount of the | ||||||
26 | overpayment attributable to the other spouse; and |
| |||||||
| |||||||
1 | (C) if the federal income tax liability of either | ||||||
2 | spouse is
determined on a separate federal income tax | ||||||
3 | return, they shall file separate
returns under this | ||||||
4 | Act.
| ||||||
5 | (2) If neither spouse is required to file a federal | ||||||
6 | income tax
return and either or both are required to file a | ||||||
7 | return under this Act,
they may elect to file separate or | ||||||
8 | joint returns and pursuant to such
election their | ||||||
9 | liabilities shall be separate or joint and several.
| ||||||
10 | (3) If either husband or wife is a resident and the | ||||||
11 | other is a
nonresident, they shall file separate returns in | ||||||
12 | this State on such
forms as may be required by the | ||||||
13 | Department in which event their tax
liabilities shall be | ||||||
14 | separate; but if they file a joint federal income tax | ||||||
15 | return for a taxable year, they may elect to determine | ||||||
16 | their
joint net income and file a joint return for that | ||||||
17 | taxable year under the provisions of paragraph (1) of this | ||||||
18 | subsection as if both were residents and
in such case, | ||||||
19 | their liabilities shall be joint and several.
| ||||||
20 | (4) Innocent spouses.
| ||||||
21 | (A) However, for tax liabilities arising and paid | ||||||
22 | prior to August 13,
1999, an innocent spouse shall be | ||||||
23 | relieved of
liability for tax
(including interest and | ||||||
24 | penalties) for any taxable year for which a joint
| ||||||
25 | return has been made, upon submission of proof that the | ||||||
26 | Internal Revenue
Service has made a determination |
| |||||||
| |||||||
1 | under Section 6013(e) of the Internal
Revenue Code, for | ||||||
2 | the same taxable year, which determination relieved | ||||||
3 | the
spouse from liability for federal income taxes.
If | ||||||
4 | there is no federal income tax liability at issue for | ||||||
5 | the
same taxable year, the Department shall rely on the | ||||||
6 | provisions of Section
6013(e) to determine whether the | ||||||
7 | person requesting innocent spouse abatement of
tax, | ||||||
8 | penalty, and interest is entitled to that relief.
| ||||||
9 | (B) For tax liabilities arising on and after August | ||||||
10 | 13, 1999 or which arose prior to that date, but remain | ||||||
11 | unpaid as of that date, if
an individual
who filed a | ||||||
12 | joint return for any taxable year has made an election | ||||||
13 | under this
paragraph, the individual's liability for | ||||||
14 | any tax shown on the joint return
shall not exceed the | ||||||
15 | individual's separate return amount and the | ||||||
16 | individual's
liability for any deficiency assessed for | ||||||
17 | that taxable year shall not exceed
the portion of the | ||||||
18 | deficiency properly allocable to the individual. For
| ||||||
19 | purposes of this paragraph:
| ||||||
20 | (i) An election properly made pursuant to | ||||||
21 | Section 6015 of the Internal
Revenue Code shall | ||||||
22 | constitute an election under this paragraph, | ||||||
23 | provided that
the election shall not be effective | ||||||
24 | until the individual has notified the
Department | ||||||
25 | of the election in the form and manner prescribed | ||||||
26 | by the Department.
|
| |||||||
| |||||||
1 | (ii) If no election has been made under Section | ||||||
2 | 6015, the individual
may make an election under | ||||||
3 | this paragraph in the form and manner prescribed by
| ||||||
4 | the Department, provided that no election may be | ||||||
5 | made if the Department finds
that assets were | ||||||
6 | transferred
between individuals filing a joint | ||||||
7 | return as part of a scheme by such
individuals to | ||||||
8 | avoid payment of Illinois income tax and the | ||||||
9 | election shall not
eliminate the individual's | ||||||
10 | liability for any portion of a deficiency
| ||||||
11 | attributable to an error on the return of which the | ||||||
12 | individual had actual
knowledge as of the date of | ||||||
13 | filing.
| ||||||
14 | (iii) In determining the separate return | ||||||
15 | amount or portion of any
deficiency attributable | ||||||
16 | to an individual, the Department shall follow the
| ||||||
17 | provisions in subsections (c) and (d) of Section | ||||||
18 | 6015 of the Internal Revenue Code.
| ||||||
19 | (iv) In determining the validity of an | ||||||
20 | individual's election under
subparagraph (ii) and | ||||||
21 | in determining an electing individual's separate | ||||||
22 | return
amount or portion of any deficiency under | ||||||
23 | subparagraph (iii), any determination
made by the | ||||||
24 | Secretary of the Treasury, by the United States Tax | ||||||
25 | Court on
petition for review of a determination by | ||||||
26 | the Secretary of the Treasury, or on
appeal from |
| |||||||
| |||||||
1 | the United States Tax Court under Section 6015 of
| ||||||
2 | the Internal
Revenue Code regarding criteria for | ||||||
3 | eligibility or under subsection (d) of
Section | ||||||
4 | 6015
of the Internal Revenue Code regarding the | ||||||
5 | allocation of any item of income,
deduction, | ||||||
6 | payment, or credit between an individual making | ||||||
7 | the federal election
and that individual's spouse | ||||||
8 | shall be conclusively presumed to be correct.
With | ||||||
9 | respect to any item that is not the subject of a | ||||||
10 | determination by the
Secretary of the Treasury or | ||||||
11 | the federal courts, in any proceeding
involving | ||||||
12 | this subsection, the
individual making the | ||||||
13 | election shall have the burden of proof with | ||||||
14 | respect to
any item except that the Department | ||||||
15 | shall have the burden of proof with respect
to | ||||||
16 | items in subdivision (ii).
| ||||||
17 | (v) Any election made by an individual under | ||||||
18 | this subsection shall
apply to all years for which | ||||||
19 | that individual and the spouse named in the
| ||||||
20 | election have filed a joint return.
| ||||||
21 | (vi) After receiving a notice that the federal | ||||||
22 | election has been made
or after receiving an | ||||||
23 | election under subdivision (ii), the Department | ||||||
24 | shall
take no collection action against the | ||||||
25 | electing individual for any liability
arising from | ||||||
26 | a joint return covered by the election until the |
| |||||||
| |||||||
1 | Department has
notified the electing individual in | ||||||
2 | writing that the election is invalid or of
the | ||||||
3 | portion of the liability the Department has | ||||||
4 | allocated to the electing
individual. Within 60 | ||||||
5 | days (150 days if the individual is outside the | ||||||
6 | United
States) after the issuance of such | ||||||
7 | notification, the individual may file a
written | ||||||
8 | protest of the denial of the election or of the | ||||||
9 | Department's
determination of the liability | ||||||
10 | allocated to him or her and shall be granted a
| ||||||
11 | hearing within the Department under the provisions | ||||||
12 | of Section 908. If a
protest is filed, the | ||||||
13 | Department shall take no collection action against | ||||||
14 | the
electing individual until the decision | ||||||
15 | regarding the protest has become final
under | ||||||
16 | subsection (d) of Section 908 or, if | ||||||
17 | administrative review of the
Department's decision
| ||||||
18 | is requested under Section 1201, until the | ||||||
19 | decision of the court becomes
final.
| ||||||
20 | (d) Partnerships. Every partnership having any base income
| ||||||
21 | allocable to this State in accordance with section 305(c) shall | ||||||
22 | retain
information concerning all items of income, gain, loss | ||||||
23 | and
deduction; the names and addresses of all of the partners, | ||||||
24 | or names and
addresses of members of a limited liability | ||||||
25 | company, or other
persons who would be entitled to share in the | ||||||
26 | base income of the
partnership if distributed; the amount of |
| |||||||
| |||||||
1 | the distributive share of
each; and such other pertinent | ||||||
2 | information as the Department may by
forms or regulations | ||||||
3 | prescribe. The partnership shall make that information
| ||||||
4 | available to the Department when requested by the Department.
| ||||||
5 | (e) For taxable years ending on or after December 31, 1985, | ||||||
6 | and before
December 31, 1993, taxpayers
that are corporations | ||||||
7 | (other than Subchapter S corporations) having the
same taxable | ||||||
8 | year and that are members of the same unitary business group
| ||||||
9 | may elect to be treated as one taxpayer for purposes of any | ||||||
10 | original return,
amended return which includes the same | ||||||
11 | taxpayers of the unitary group which
joined in the election to | ||||||
12 | file the original return, extension, claim for
refund, | ||||||
13 | assessment, collection and payment and determination of the
| ||||||
14 | group's tax liability under this Act. This subsection (e) does | ||||||
15 | not permit the
election to be made for some, but not all, of | ||||||
16 | the purposes enumerated above.
For taxable years ending on or | ||||||
17 | after December 31, 1987, corporate members
(other than | ||||||
18 | Subchapter S corporations) of the same unitary business group
| ||||||
19 | making this subsection (e) election are not required to have | ||||||
20 | the same taxable
year.
| ||||||
21 | For taxable years ending on or after December 31, 1993, | ||||||
22 | taxpayers that are
corporations (other than Subchapter S | ||||||
23 | corporations) and that are members of
the same unitary business | ||||||
24 | group shall be treated as one taxpayer for purposes
of any | ||||||
25 | original return, amended return which includes the same | ||||||
26 | taxpayers of the
unitary group which joined in filing the |
| |||||||
| |||||||
1 | original return, extension, claim for
refund, assessment, | ||||||
2 | collection and payment and determination of the group's tax
| ||||||
3 | liability under this Act.
| ||||||
4 | (f) For taxable years ending prior to December 31, 2014, | ||||||
5 | the The Department may promulgate regulations to permit | ||||||
6 | nonresident
individual partners of the same partnership, | ||||||
7 | nonresident Subchapter S
corporation shareholders of the same | ||||||
8 | Subchapter S corporation, and
nonresident individuals | ||||||
9 | transacting an insurance business in Illinois under
a Lloyds | ||||||
10 | plan of operation, and nonresident individual members of the | ||||||
11 | same
limited liability company that is treated as a partnership | ||||||
12 | under Section 1501
(a)(16) of this Act, to file composite | ||||||
13 | individual income tax returns
reflecting the composite income | ||||||
14 | of such individuals allocable to Illinois
and to make composite | ||||||
15 | individual income tax payments. For taxable years ending prior | ||||||
16 | to December 31, 2014, the The Department may
by regulation also | ||||||
17 | permit such composite returns to include the income tax
owed by | ||||||
18 | Illinois residents attributable to their income from | ||||||
19 | partnerships,
Subchapter S corporations, insurance businesses | ||||||
20 | organized under a Lloyds
plan of operation, or limited | ||||||
21 | liability companies that are treated as
partnership under | ||||||
22 | Section 1501(a)(16) of this Act, in which case such
Illinois | ||||||
23 | residents will be permitted to claim credits on their | ||||||
24 | individual
returns for their shares of the composite tax | ||||||
25 | payments. This paragraph of
subsection (f) applies to taxable | ||||||
26 | years ending on or after December 31, 1987 and ending prior to |
| |||||||
| |||||||
1 | December 31, 2014 .
| ||||||
2 | For taxable years ending on or after December 31, 1999, the | ||||||
3 | Department may,
by regulation, also permit any persons | ||||||
4 | transacting an insurance business
organized under a Lloyds plan | ||||||
5 | of operation to file composite returns reflecting
the income of | ||||||
6 | such persons allocable to Illinois and the tax rates applicable
| ||||||
7 | to such persons under Section 201 and to make composite tax | ||||||
8 | payments and shall,
by regulation, also provide that the income | ||||||
9 | and apportionment factors
attributable to the transaction of an | ||||||
10 | insurance business organized under a
Lloyds plan of operation | ||||||
11 | by any person joining in the filing of a composite
return | ||||||
12 | shall, for purposes of allocating and apportioning income under | ||||||
13 | Article
3 of this Act and computing net income under Section | ||||||
14 | 202 of this Act, be
excluded from any other income and | ||||||
15 | apportionment factors of that person or of
any unitary business | ||||||
16 | group, as defined in subdivision (a)(27) of Section 1501,
to | ||||||
17 | which that person may belong.
| ||||||
18 | For taxable years ending on or after December 31, 2008, | ||||||
19 | every nonresident shall be allowed a credit against his or her | ||||||
20 | liability under subsections (a) and (b) of Section 201 for any | ||||||
21 | amount of tax reported on a composite return and paid on his or | ||||||
22 | her behalf under this subsection (f). Residents (other than | ||||||
23 | persons transacting an insurance business organized under a | ||||||
24 | Lloyds plan of operation) may claim a credit for taxes reported | ||||||
25 | on a composite return and paid on their behalf under this | ||||||
26 | subsection (f) only as permitted by the Department by rule.
|
| |||||||
| |||||||
1 | (f-5) For taxable years ending on or after December 31, | ||||||
2 | 2008, the Department may adopt rules to provide that, when a | ||||||
3 | partnership or Subchapter S corporation has made an error in | ||||||
4 | determining the amount of any item of income, deduction, | ||||||
5 | addition, subtraction, or credit required to be reported on its | ||||||
6 | return that affects the liability imposed under this Act on a | ||||||
7 | partner or shareholder, the partnership or Subchapter S | ||||||
8 | corporation may report the changes in liabilities of its | ||||||
9 | partners or shareholders and claim a refund of the resulting | ||||||
10 | overpayments, or pay the resulting underpayments, on behalf of | ||||||
11 | its partners and shareholders.
| ||||||
12 | (g) The Department may adopt rules to authorize the | ||||||
13 | electronic filing of
any return required to be filed under this | ||||||
14 | Section.
| ||||||
15 | (Source: P.A. 96-520, eff. 8-14-09; 97-507, eff. 8-23-11.)
| ||||||
16 | (35 ILCS 5/709.5)
| ||||||
17 | Sec. 709.5. Withholding by partnerships, Subchapter S | ||||||
18 | corporations, and trusts. | ||||||
19 | (a) In general. For each taxable year ending on or after | ||||||
20 | December 31, 2008, every partnership (other than a publicly | ||||||
21 | traded partnership under Section 7704 of the Internal Revenue | ||||||
22 | Code or investment partnership), Subchapter S corporation, and | ||||||
23 | trust must withhold from each nonresident partner, | ||||||
24 | shareholder, or beneficiary (other than a partner, | ||||||
25 | shareholder, or beneficiary who is exempt from tax under |
| |||||||
| |||||||
1 | Section 501(a) of the Internal Revenue Code or under Section | ||||||
2 | 205 of this Act, who is included on a composite return filed by | ||||||
3 | the partnership or Subchapter S corporation for the taxable | ||||||
4 | year under subsection (f) of Section 502 of this Act), or who | ||||||
5 | is a retired partner, to the extent that partner's | ||||||
6 | distributions are exempt from tax under Section 203(a)(2)(F) of | ||||||
7 | this Act) an amount equal to the sum distributable share of (i) | ||||||
8 | the share of business income of the partnership, Subchapter S | ||||||
9 | corporation, or trust apportionable to Illinois plus (ii) for | ||||||
10 | taxable years ending on or after December 31, 2014, the share | ||||||
11 | of nonbusiness income of the partnership, Subchapter S | ||||||
12 | corporation, or trust allocated to Illinois under Section 303 | ||||||
13 | of this Act (other than an amount allocated to the commercial | ||||||
14 | domicile of the taxpayer under Section 303 of this Act) that is | ||||||
15 | distributable to of that partner, shareholder, or beneficiary | ||||||
16 | under Sections 702 and 704 and Subchapter S of the Internal | ||||||
17 | Revenue Code, whether or not distributed, (iii) multiplied by | ||||||
18 | the applicable rates of tax for that partner , or shareholder , | ||||||
19 | or beneficiary under subsections (a) through (d) of Section 201 | ||||||
20 | of this Act , and (iv) net of the share of any credit under | ||||||
21 | Article 2 of this Act that is distributable by the partnership, | ||||||
22 | Subchapter S corporation, or trust and allowable against the | ||||||
23 | tax liability of that partner, shareholder, or beneficiary for | ||||||
24 | a taxable year ending on or after December 31, 2014 . | ||||||
25 | (b) Credit for taxes withheld. Any amount withheld under | ||||||
26 | subsection (a) of this Section and paid to the Department shall |
| |||||||
| |||||||
1 | be treated as a payment of the estimated tax liability or of | ||||||
2 | the liability for withholding under this Section of the | ||||||
3 | partner, shareholder, or beneficiary to whom the income is | ||||||
4 | distributable for the taxable year in which that person | ||||||
5 | incurred a liability under this Act with respect to that | ||||||
6 | income.
The Department shall adopt rules pursuant to which a | ||||||
7 | partner, shareholder, or beneficiary may claim a credit against | ||||||
8 | its obligation for withholding under this Section for amounts | ||||||
9 | withheld under this Section with respect to income | ||||||
10 | distributable to it by a partnership, Subchapter S corporation, | ||||||
11 | or trust and allowing its partners, shareholders, or | ||||||
12 | beneficiaries to claim a credit under this subsection (b) for | ||||||
13 | those withheld amounts.
| ||||||
14 | (c) Exemption from withholding. | ||||||
15 | (1) A partnership, Subchapter S corporation, or trust | ||||||
16 | shall not be required to withhold tax under subsection (a) | ||||||
17 | of this Section with respect to any nonresident partner, | ||||||
18 | shareholder, or beneficiary (other than an individual) | ||||||
19 | from whom the partnership, S corporation, or trust has | ||||||
20 | received a certificate, completed in the form and manner | ||||||
21 | prescribed by the Department, stating that such | ||||||
22 | nonresident partner, shareholder, or beneficiary shall: | ||||||
23 | (A) file all returns that the partner, | ||||||
24 | shareholder, or beneficiary is required to file under | ||||||
25 | Section 502 of this Act and make timely payment of all | ||||||
26 | taxes imposed under Section 201 of this Act or under |
| |||||||
| |||||||
1 | this Section on the partner, shareholder, or | ||||||
2 | beneficiary with respect to income of the partnership, | ||||||
3 | S corporation, or trust; and | ||||||
4 | (B) be subject to personal jurisdiction in this | ||||||
5 | State for purposes of the collection of income taxes, | ||||||
6 | together with related interest and penalties, imposed | ||||||
7 | on the partner, shareholder, or beneficiary with | ||||||
8 | respect to the income of the partnership, S | ||||||
9 | corporation, or trust. | ||||||
10 | (2) The Department may revoke the exemption provided by | ||||||
11 | this subsection (c) at any time that it determines that the | ||||||
12 | nonresident partner, shareholder, or beneficiary is not | ||||||
13 | abiding by the terms of the certificate. The Department | ||||||
14 | shall notify the partnership, S corporation, or trust that | ||||||
15 | it has revoked a certificate by notice left at the usual | ||||||
16 | place of business of the partnership, S corporation, or | ||||||
17 | trust or by mail to the last known address of the | ||||||
18 | partnership, S corporation, or trust. | ||||||
19 | (3) A partnership, S corporation, or trust that | ||||||
20 | receives a certificate under this subsection (c) properly | ||||||
21 | completed by a nonresident partner, shareholder, or | ||||||
22 | beneficiary shall not be required to withhold any amount | ||||||
23 | from that partner, shareholder, or beneficiary, the | ||||||
24 | payment of which would be due under Section 711(a-5) of | ||||||
25 | this Act after the receipt of the certificate and no | ||||||
26 | earlier than 60 days after the Department has notified the |
| |||||||
| |||||||
1 | partnership, S corporation, or trust that the certificate | ||||||
2 | has been revoked. | ||||||
3 | (4) Certificates received by a the partnership, S | ||||||
4 | corporation, or trust under this subsection (c) must be | ||||||
5 | retained by the partnership, S corporation, or trust and a | ||||||
6 | record of such certificates must be provided to the | ||||||
7 | Department, in a format in which the record is available | ||||||
8 | for review by the Department, upon request by the | ||||||
9 | Department. The Department may, by rule, require the record | ||||||
10 | of certificates to be maintained and provided to the | ||||||
11 | Department electronically.
| ||||||
12 | (Source: P.A. 97-507, eff. 8-23-11.)
|