103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB3488

 

Introduced 2/9/2024, by Sen. Win Stoller

 

SYNOPSIS AS INTRODUCED:
 
805 ILCS 5/15.35  from Ch. 32, par. 15.35
805 ILCS 5/15.65  from Ch. 32, par. 15.65
805 ILCS 5/15.98 new

    Amends the Business Corporation Act of 1983. Provides that, in the case of a domestic or foreign corporation, no payment is required for a franchise tax that would have been due and payable on or after January 1, 2025. Repeals on January 1, 2026 the provisions in the Act that establish the corporate franchise tax. Directs the Legislative Reference Bureau to prepare a bill effecting necessary changes to conform the statutes to the changes made by the amendatory Act. Effective immediately.


LRB103 37894 HLH 68025 b

 

 

A BILL FOR

 

SB3488LRB103 37894 HLH 68025 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Business Corporation Act of 1983 is amended
5by changing Sections 15.35 and 15.65 and by adding Section
615.98 as follows:
 
7    (805 ILCS 5/15.35)  (from Ch. 32, par. 15.35)
8    (Text of Section from P.A. 102-16 and 103-8)
9    Sec. 15.35. Franchise taxes payable by domestic
10corporations. For the privilege of exercising its franchises
11in this State, each domestic corporation shall pay to the
12Secretary of State the following franchise taxes, computed on
13the basis, at the rates and for the periods prescribed in this
14Act:
15        (a) An initial franchise tax at the time of filing its
16    first report of issuance of shares.
17        (b) An additional franchise tax at the time of filing
18    (1) a report of the issuance of additional shares, or (2) a
19    report of an increase in paid-in capital without the
20    issuance of shares, or (3) an amendment to the articles of
21    incorporation or a report of cumulative changes in paid-in
22    capital, whenever any amendment or such report discloses
23    an increase in its paid-in capital over the amount thereof

 

 

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1    last reported in any document, other than an annual
2    report, interim annual report or final transition annual
3    report required by this Act to be filed in the office of
4    the Secretary of State.
5        (c) An additional franchise tax at the time of filing
6    a report of paid-in capital following a statutory merger
7    or consolidation, which discloses that the paid-in capital
8    of the surviving or new corporation immediately after the
9    merger or consolidation is greater than the sum of the
10    paid-in capital of all of the merged or consolidated
11    corporations as last reported by them in any documents,
12    other than annual reports, required by this Act to be
13    filed in the office of the Secretary of State; and in
14    addition, the surviving or new corporation shall be liable
15    for a further additional franchise tax on the paid-in
16    capital of each of the merged or consolidated corporations
17    as last reported by them in any document, other than an
18    annual report, required by this Act to be filed with the
19    Secretary of State from their taxable year end to the next
20    succeeding anniversary month or, in the case of a
21    corporation which has established an extended filing
22    month, the extended filing month of the surviving or new
23    corporation; however if the taxable year ends within the
24    2-month period immediately preceding the anniversary month
25    or, in the case of a corporation which has established an
26    extended filing month, the extended filing month of the

 

 

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1    surviving or new corporation the tax will be computed to
2    the anniversary month or, in the case of a corporation
3    which has established an extended filing month, the
4    extended filing month of the surviving or new corporation
5    in the next succeeding calendar year.
6        (d) An annual franchise tax payable each year with the
7    annual report which the corporation is required by this
8    Act to file.
9    On or after January 1, 2020 and before prior to January 1,
102021, the first $30 in liability is exempt from the tax imposed
11under this Section. On or after January 1, 2021, and before
12prior to January 1, 2024, the first $1,000 in liability is
13exempt from the tax imposed under this Section. On or after
14January 1, 2024 and before January 1, 2025, the first $5,000 in
15liability is exempt from the tax imposed under this Section.
16The provisions of this Section shall not require the payment
17of any franchise tax that would otherwise have been due and
18payable on or after January 1, 2025. There shall be no refunds
19or proration of franchise tax for any taxes due and payable on
20or after January 1, 2025 on the basis that a portion of the
21corporation's taxable year extends beyond January 1, 2025.
22    This Section is repealed on January 1, 2026.
23(Source: P.A. 102-16, eff. 6-17-21; 103-8, eff. 6-7-23.)
 
24    (Text of Section from P.A. 102-282, 102-558, and 103-8)
25    Sec. 15.35. Franchise taxes payable by domestic

 

 

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1corporations. For the privilege of exercising its franchises
2in this State, each domestic corporation shall pay to the
3Secretary of State the following franchise taxes, computed on
4the basis, at the rates and for the periods prescribed in this
5Act:
6        (a) An initial franchise tax at the time of filing its
7    first report of issuance of shares.
8        (b) An additional franchise tax at the time of filing
9    (1) a report of the issuance of additional shares, or (2) a
10    report of an increase in paid-in capital without the
11    issuance of shares, or (3) an amendment to the articles of
12    incorporation or a report of cumulative changes in paid-in
13    capital, whenever any amendment or such report discloses
14    an increase in its paid-in capital over the amount thereof
15    last reported in any document, other than an annual
16    report, interim annual report or final transition annual
17    report required by this Act to be filed in the office of
18    the Secretary of State.
19        (c) An additional franchise tax at the time of filing
20    a report of paid-in capital following a statutory merger
21    or consolidation, which discloses that the paid-in capital
22    of the surviving or new corporation immediately after the
23    merger or consolidation is greater than the sum of the
24    paid-in capital of all of the merged or consolidated
25    corporations as last reported by them in any documents,
26    other than annual reports, required by this Act to be

 

 

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1    filed in the office of the Secretary of State; and in
2    addition, the surviving or new corporation shall be liable
3    for a further additional franchise tax on the paid-in
4    capital of each of the merged or consolidated corporations
5    as last reported by them in any document, other than an
6    annual report, required by this Act to be filed with the
7    Secretary of State from their taxable year end to the next
8    succeeding anniversary month or, in the case of a
9    corporation which has established an extended filing
10    month, the extended filing month of the surviving or new
11    corporation; however if the taxable year ends within the
12    2-month period immediately preceding the anniversary month
13    or, in the case of a corporation which has established an
14    extended filing month, the extended filing month of the
15    surviving or new corporation the tax will be computed to
16    the anniversary month or, in the case of a corporation
17    which has established an extended filing month, the
18    extended filing month of the surviving or new corporation
19    in the next succeeding calendar year.
20        (d) An annual franchise tax payable each year with the
21    annual report which the corporation is required by this
22    Act to file.
23    On or after January 1, 2020 and before prior to January 1,
242021, the first $30 in liability is exempt from the tax imposed
25under this Section. On or after January 1, 2021 and before
26prior to January 1, 2024, the first $1,000 in liability is

 

 

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1exempt from the tax imposed under this Section. On or after
2January 1, 2024 and before January 1, 2025, the first $5,000 in
3liability is exempt from the tax imposed under this Section.
4The provisions of this Section shall not require the payment
5of any franchise tax that would otherwise have been due and
6payable on or after January 1, 2025. There shall be no refunds
7or proration of franchise tax for any taxes due and payable on
8or after January 1, 2025 on the basis that a portion of the
9corporation's taxable year extends beyond January 1, 2025.
10    This Section is repealed on January 1, 2026.
11(Source: P.A. 102-282, eff. 1-1-22; 102-558, eff. 8-20-21;
12103-8, eff. 6-7-23.)
 
13    (805 ILCS 5/15.65)  (from Ch. 32, par. 15.65)
14    Sec. 15.65. Franchise taxes payable by foreign
15corporations. For the privilege of exercising its authority to
16transact such business in this State as set out in its
17application therefor or any amendment thereto, each foreign
18corporation shall pay to the Secretary of State the following
19franchise taxes, computed on the basis, at the rates and for
20the periods prescribed in this Act:
21        (a) An initial franchise tax at the time of filing its
22    application for authority to transact business in this
23    State.
24        (b) An additional franchise tax at the time of filing
25    (1) a report of the issuance of additional shares, or (2) a

 

 

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1    report of an increase in paid-in capital without the
2    issuance of shares, or (3) a report of cumulative changes
3    in paid-in capital or a report of an exchange or
4    reclassification of shares, whenever any such report
5    discloses an increase in its paid-in capital over the
6    amount thereof last reported in any document, other than
7    an annual report, interim annual report or final
8    transition annual report, required by this Act to be filed
9    in the office of the Secretary of State.
10        (c) Whenever the corporation shall be a party to a
11    statutory merger and shall be the surviving corporation,
12    an additional franchise tax at the time of filing its
13    report following merger, if such report discloses that the
14    amount represented in this State of its paid-in capital
15    immediately after the merger is greater than the aggregate
16    of the amounts represented in this State of the paid-in
17    capital of such of the merged corporations as were
18    authorized to transact business in this State at the time
19    of the merger, as last reported by them in any documents,
20    other than annual reports, required by this Act to be
21    filed in the office of the Secretary of State; and in
22    addition, the surviving corporation shall be liable for a
23    further additional franchise tax on the paid-in capital of
24    each of the merged corporations as last reported by them
25    in any document, other than an annual report, required by
26    this Act to be filed with the Secretary of State, from

 

 

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1    their taxable year end to the next succeeding anniversary
2    month or, in the case of a corporation which has
3    established an extended filing month, the extended filing
4    month of the surviving corporation; however if the taxable
5    year ends within the 2-month period immediately preceding
6    the anniversary month or the extended filing month of the
7    surviving corporation, the tax will be computed to the
8    anniversary or, extended filing month of the surviving
9    corporation in the next succeeding calendar year.
10        (d) An annual franchise tax payable each year with any
11    annual report which the corporation is required by this
12    Act to file.
13    On or after January 1, 2020 and before prior to January 1,
142021, the first $30 in liability is exempt from the tax imposed
15under this Section. On or after January 1, 2021 and before
16January 1, 2025, the first $1,000 in liability is exempt from
17the tax imposed under this Section. The provisions of this
18Section shall not require the payment of any franchise tax
19that would otherwise have been due and payable on or after
20January 1, 2025. There shall be no refunds or proration of
21franchise tax for any taxes due and payable on or after January
221, 2025 on the basis that a portion of the corporation's
23taxable year extends beyond January 1, 2025. This amendatory
24Act of the 103rd General Assembly shall not affect any right
25accrued or established, or any liability or penalty incurred
26prior to January 1, 2025.

 

 

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1    This Section is repealed on January 1, 2026.
2(Source: P.A. 101-9, eff. 6-5-19; 102-16, eff. 6-17-21;
3102-558, eff. 8-20-21; 102-813, eff. 5-13-22.)
 
4    (805 ILCS 5/15.98 new)
5    Sec. 15.98. Preparation of bill. The Legislative Reference
6Bureau shall prepare for introduction in the 2025 spring
7session of the General Assembly a bill effecting such changes
8in the statutes as may be necessary to conform the statutes to
9the changes in law made by this amendatory Act of the 103rd
10General Assembly.
 
11    Section 99. Effective date. This Act takes effect upon
12becoming law.