(805 ILCS 5/15.40) (from Ch. 32, par. 15.40)

Sec. 15.40. Basis for computation of franchise taxes payable by domestic corporations.

(a) The basis for the initial franchise tax payable by a domestic corporation shall be the amount represented in this State, determined in accordance with the provisions of this Section, of its paid-in capital as disclosed by its first report of the issuance of shares.

(b) The basis for an additional franchise tax payable by a domestic corporation, except in the case of a statutory merger or consolidation, shall be the increased amount represented in this State, determined in accordance with the provisions of this Section, of its paid-in capital as disclosed by any report of issuance of additional shares, or of an increase in paid-in capital without the issuance of shares, or of an exchange or reclassification of shares, or of cumulative changes in paid-in capital.

(c) In the case of a statutory merger or consolidation of domestic corporations, the basis for an additional franchise tax payable by the surviving or new corporation shall be the increased amount represented in this State, determined in accordance with the provisions of this Section of the paid-in capital of the surviving or new corporation immediately after the merger or consolidation over the aggregate of the amounts represented in this State of the paid-in capital of the merged or consolidated corporations disclosed by the latest reports filed by those corporations, respectively, with the Secretary of State as required by this Act; provided, however, the basis for a further additional franchise tax payable by the surviving or new corporation shall be determined in accordance with the provisions of this Section, on the paid-in capital of each of the merged or consolidated corporations as last reported by it in any document, other than an annual report, required by this Act to be filed with the Secretary of State, from its taxable year end to the next succeeding anniversary month or, in the case of a corporation that has established an extended filing month, the next succeeding extended filing month of the surviving or new corporation; however if the taxable year ends within the 2 month period immediately preceding the anniversary month or, in the case of a corporation that has established an extended filing month, the next succeeding extended filing month of the surviving or new corporation the tax shall be computed to the anniversary month or, in the case of a corporation that has established an extended filing month, the next succeeding extended filing month of the surviving or new corporation in the next succeeding calendar year.

(d) The basis for the annual franchise tax payable by a domestic corporation shall be the amount represented in this State, determined in accordance with the provisions of this Section, of its paid-in capital on the last day of the third month preceding the anniversary month or, in the case of a corporation that has established an extended filing month, on the last day of the corporation's fiscal year preceding the extended filing month.

(e) For the purpose of determining the amount represented in this State of the paid-in capital of a domestic corporation, the amount represented in this State shall be that proportion of its paid-in capital that the sum of (1) the value of its property located in this State and (2) the gross amount of business transacted by it at or from places of business in this State bears to the sum of (1) the value of all of its property, wherever located, and (2) the gross amount of its business, wherever transacted, except as follows:

(1) If the corporation elects in its annual report in any year to pay its franchise tax upon its entire paid-in capital, all franchise taxes accruing against the corporation for that taxable year shall be computed accordingly until the corporation elects otherwise in an annual report for a subsequent year.

(2) If the corporation fails to file its annual report or final transition annual report in any year within the time prescribed by this Act, the proportion of its paid-in capital represented in this State shall be deemed to be its entire paid-in capital unless its annual report is thereafter filed and its franchise taxes are thereafter adjusted by the Secretary of State in accordance with the provisions of this Act, in which case the proportion shall likewise be adjusted to the same proportion that would have prevailed if the corporation had filed its annual report within the time prescribed by this Act.

(3) In the case of a statutory merger or consolidation that becomes effective either prior to January 1, 1991 or on or prior to the last day of the third month preceding the corporation's anniversary month in 1991, the amount of the paid-in capital represented in this State of the surviving or new corporation immediately after the merger or consolidation, until the filing of the next annual report of such corporation, shall be deemed to be that proportion of the paid-in capital of the surviving or new corporation that the aggregate amounts represented in this State of the sum of the paid-in capital of the merged or consolidated corporations, separately determined, bore to the total of the sum of the paid-in capital of all of the merged or consolidated corporations immediately prior to the merger or consolidation.

(f) For increases in paid-in capital that occur either prior to January 1, 1991 or on or prior to the last day of the third month preceding the corporation's anniversary month in 1991, the proportion corporation on file on the date represented in this State of the paid-in capital of a domestic corporation shall be determined from information contained in the latest annual report of the corporation on file on the date the particular increase in paid-in capital is shown to have been made, or, if no annual report was on file on the date of the increase, from information contained in its articles of incorporation, or, in case of a merger or consolidation that becomes effective either prior to January 1, 1991 or on or prior to the last day of the third month preceding the corporation's anniversary month in 1991, from information contained in the report of the surviving or new corporation of the amount of its paid-in capital following the merger or consolidation. For increases in paid-in capital that occur after both December 31, 1990 and the last day of such third month, the proportion represented in this State of the paid-in capital of a domestic corporation shall be determined from information contained in the latest annual report of the corporation for the taxable period in which the particular increase in paid-in capital is shown to have been made or, if no annual report was on file on the date of the increase, from information contained in its articles of incorporation.

(g) No basis under this Section may consist of any redeemable preference shares sold to the United States Secretary of Transportation under Sections 505 and 506 of Public Law 94-210.

(Source: P.A. 91-464, eff. 1-1-00.)