HB2568 101ST GENERAL ASSEMBLY

LRB101 10619 JLS 55725 b

101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB2568

Introduced , by Rep. Anne Stava-Murray

SYNOPSIS AS INTRODUCED:

New Act

Creates the Corporate Buyback Tax Act. Imposes a tax on the buyback of shares of a publicly held corporation at the rate of 0.25% of the purchase price paid by a corporation for the purchase of its own securities. Applies to publicly held corporations having 100 or more employees. Effective immediately.

A BILL FOR

AN ACT concerning business.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Corporate Buyback Tax Act.

Section 5. Definitions. As used in this Act:

"Corporation" means a publicly held corporation that has, at the time of the transaction, 100 or more employees.

"Department" means the Department of Revenue.

"Purchase" means the purchase by a corporation of its own corporate securities.

Section 10. Tax imposed.

(a) Beginning on July 1, 2020, a tax is imposed upon each corporation that makes a purchase of its own corporate securities in this State. The tax is imposed at the rate of 0.25% of the amount of the purchase.

(b) A corporation subject to the tax under subsection (a) shall apply to the Department (upon a form prescribed and furnished by the Department) for a certificate of registration under this Act.

(c) The Department shall have full power to administer and enforce this Act, to collect all taxes and penalties due under this Act, to dispose of taxes and penalties so collected in the manner provided in this Act, and to determine all rights to credit memoranda, arising on account of the erroneous payment of tax or penalty hereunder.

(d) The tax imposed under this Act shall be in addition to all other taxes imposed by the State of Illinois or by any municipal corporation or political subdivision of the State. Persons subject to the tax imposed by this Act may reimburse themselves for their tax liability under this Act by separately stating the amount of the tax as an additional charge to consumers.

(e) The tax is not imposed with respect to any business in interstate commerce, or otherwise to the extent to which such business may not, under the Constitution and statutes of the United States, be made the subject of taxation by this State.

Section 15. Returns. On or before the 20th day of each calendar month, a corporation is subject to the tax under this Act during the preceding calendar month shall file a return with the Department, stating:

(1) the name of the taxpayer;

(2) the address of the taxpayer's principal place of business;

(3) the amount of tax due;

(4) the signature of the taxpayer; and

(5) such other reasonable information as the Department may require.

If a taxpayer fails to sign a return within 30 days after the proper notice and demand for signature by the Department, the return shall be considered valid and any amount shown to be due on the return shall be deemed assessed.

The taxpayer shall remit the amount of the tax due to the Department at the time the taxpayer files its return.

Section 20. Suspension or revocation of certificates of registration. The Department may, after notice and a hearing as provided in this Act, suspend or revoke the certificate of registration of any person who violates any of the provisions of this Act. Before suspension or revocation of a certificate of registration, the Department shall, within 90 days after noncompliance and at least 7 days prior to the date of the hearing, give the person so accused notice in writing of the charge against him or her, and on the date designated shall conduct a hearing upon this matter. The lapse of such 90-day period shall not preclude the Department from conducting suspension or revocation proceedings at a later date if necessary. Any hearing held under this Section shall be conducted by the Director of Revenue or by any officer or employee of the Department designated, in writing, by the Director of Revenue.

Upon the hearing of any such proceeding, the Director of Revenue, or any officer or employee of the Department designated, in writing, by the Director of Revenue, may administer oaths and the Department may procure by its subpoena the attendance of witnesses and, by its subpoena duces tecum, the production of relevant books and papers. Any circuit court, upon application either of the accused or of the Department, may, by order, require the attendance of witnesses and the production of relevant books and papers, before the Department in any hearing relating to the suspension or revocation of certificates of registration. Upon refusal or neglect to obey the order of the court, the court may compel obedience thereof by proceedings for contempt.

Section 25. Review of Department decisions. Any person aggrieved by any decision of the Department under this Act may, within 20 days after notice of the decision, protest and request a hearing. The Department shall give notice to the person of the time and place fixed for the hearing, hold a hearing in conformity with this Act, and issue its final administrative decision in the matter to the person. In the absence of a protest within 20 days, the Department's decision shall become final without any further determination being made or notice given.

Section 30. Rules. The Department may adopt rules related to the enforcement of this Act.

Section 99. Effective date. This Act takes effect upon becoming law.