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| Public Act 097-0709 | ||||
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AN ACT concerning revenue.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Illinois Income Tax Act is amended by | ||||
changing Section 303 as follows:
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(35 ILCS 5/303) (from Ch. 120, par. 3-303)
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Sec. 303. (a) In general. Any item of capital gain or loss, | ||||
and any
item of income from rents or royalties from real or | ||||
tangible personal
property, interest, dividends, and patent or | ||||
copyright royalties, and prizes
awarded under the Illinois | ||||
Lottery Law, to the extent such item constitutes
nonbusiness | ||||
income, together with any item of deduction directly allocable
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thereto, shall be allocated by any person other than a resident | ||||
as provided
in this Section.
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(b) Capital gains and losses. (1) Real property. Capital | ||||
gains and
losses from sales or exchanges of real property are | ||||
allocable to this State
if the property is located in this | ||||
State.
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(2) Tangible personal property. Capital gains and losses | ||||
from sales
or exchanges of tangible personal property are | ||||
allocable to this State if,
at the time of such sale or | ||||
exchange:
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(A) The property had its situs in this State; or
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(B) The taxpayer had its commercial domicile in this State | ||
and was not
taxable in the state in which the property had its | ||
situs.
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(3) Intangibles. Capital gains and losses from sales or | ||
exchanges of
intangible personal property are allocable to this | ||
State if the taxpayer
had its commercial domicile in this State | ||
at the time of such sale or
exchange.
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(c) Rents and royalties. (1) Real property. Rents and | ||
royalties
from real property are allocable to this State if the | ||
property is located
in this State.
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(2) Tangible personal property. Rents and royalties from | ||
tangible
personal property are allocable to this State:
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(A) If and to the extent that the property is utilized in | ||
this State; or
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(B) In their entirety if, at the time such rents or | ||
royalties were paid
or accrued, the taxpayer had its commercial | ||
domicile in this State and was
not organized under the laws of | ||
or taxable with respect to such rents or
royalties in the state | ||
in which the property was utilized.
The extent of utilization | ||
of tangible personal property in a state is
determined by | ||
multiplying the rents or royalties derived from such property
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by a fraction, the numerator of which is the number of days of | ||
physical
location of the property in the state during the | ||
rental or royalty period
in the taxable year and the | ||
denominator of which is the number of days of
physical location | ||
of the property everywhere during all rental or royalty
periods | ||
in the taxable year. If the physical location of the property
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during the rental or royalty period is unknown or | ||
unascertainable by the
taxpayer, tangible personal property is | ||
utilized in the state in which the
property was located at the | ||
time the rental or royalty payer obtained
possession.
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(d) Patent and copyright royalties.
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(1) Allocation. Patent and copyright royalties are | ||
allocable to this
State:
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(A) If and to the extent that the patent or copyright is | ||
utilized by the
payer in this State; or
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(B) If and to the extent that the patent or copyright is | ||
utilized by the
payer in a state in which the taxpayer is not | ||
taxable with respect to such
royalties and, at the time such | ||
royalties were paid or accrued, the
taxpayer had its commercial | ||
domicile in this State.
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(2) Utilization.
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(A) A patent is utilized in a state to the extent that it | ||
is employed in
production, fabrication, manufacturing or other | ||
processing in the state or
to the extent that a patented | ||
product is produced in the state. If the
basis of receipts from | ||
patent royalties does not permit allocation to
states or if the | ||
accounting procedures do not reflect states of
utilization, the | ||
patent is utilized in this State if the taxpayer has its
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commercial domicile in this State.
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(B) A copyright is utilized in a state to the extent that | ||
printing or
other publication originates in the state. If the | ||
basis of receipts from
copyright royalties does not permit | ||
allocation to states or if the
accounting procedures do not | ||
reflect states of utilization, the copyright
is utilized in | ||
this State if the taxpayer has its commercial domicile in
this | ||
State.
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(e) Illinois lottery prizes. Prizes awarded under the | ||
"Illinois Lottery
Law", approved December 14, 1973, are | ||
allocable to this State.
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(e-5) Unemployment benefits. Unemployment benefits paid by | ||
the Illinois Department of Employment Security are allocable to | ||
this State. | ||
(f) Taxability in other state. For purposes of allocation | ||
of income
pursuant to this Section, a taxpayer is taxable in | ||
another state if:
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(1) In that state he is subject to a net income tax, a | ||
franchise tax
measured by net income, a franchise tax for the | ||
privilege of doing
business, or a corporate stock tax; or
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(2) That state has jurisdiction to subject the taxpayer to | ||
a net income
tax regardless of whether, in fact, the state does | ||
or does not.
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(g) Cross references. (1) For allocation of interest and | ||
dividends by
persons other than residents, see Section | ||
301(c)(2).
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(2) For allocation of nonbusiness income by residents, see | ||
Section
301(a).
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(Source: P.A. 79-743.)
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Section 99. Effective date. This Act takes effect July 1, | ||
2012.
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