Sen. Terry Link
Filed: 5/18/2004
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1 | AMENDMENT TO HOUSE BILL 855
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2 | AMENDMENT NO. ______. Amend House Bill 855 by replacing | ||||||
3 | everything after the enacting clause with the following:
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4 | "Section 5. The Illinois Income Tax Act is amended by | ||||||
5 | changing Sections 303, 701, and 710 as follows:
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6 | (35 ILCS 5/303) (from Ch. 120, par. 3-303)
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7 | Sec. 303. (a) In general. Any item of capital gain or loss | ||||||
8 | ; , and any
item of income from rents or royalties from real or | ||||||
9 | tangible personal
property, interest, dividends, and patent or | ||||||
10 | copyright royalties ;
, and prizes
awarded under the Illinois | ||||||
11 | Lottery Law ; and, for taxable years ending on or after December | ||||||
12 | 31, 2004, any item of income from wagering and gambling | ||||||
13 | winnings from Illinois sources , to the extent such item | ||||||
14 | constitutes
nonbusiness income, together with any item of | ||||||
15 | deduction directly allocable
thereto, shall be allocated by any | ||||||
16 | person other than a resident as provided
in this Section.
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17 | (b) Capital gains and losses. (1) Real property. Capital | ||||||
18 | gains and
losses from sales or exchanges of real property are | ||||||
19 | allocable to this State
if the property is located in this | ||||||
20 | State.
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21 | (2) Tangible personal property. Capital gains and losses | ||||||
22 | from sales
or exchanges of tangible personal property are | ||||||
23 | allocable to this State if,
at the time of such sale or | ||||||
24 | exchange:
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1 | (A) The property had its situs in this State; or
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2 | (B) The taxpayer had its commercial domicile in this State | ||||||
3 | and was not
taxable in the state in which the property had its | ||||||
4 | situs.
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5 | (3) Intangibles. Capital gains and losses from sales or | ||||||
6 | exchanges of
intangible personal property are allocable to this | ||||||
7 | State if the taxpayer
had its commercial domicile in this State | ||||||
8 | at the time of such sale or
exchange.
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9 | (c) Rents and royalties. (1) Real property. Rents and | ||||||
10 | royalties
from real property are allocable to this State if the | ||||||
11 | property is located
in this State.
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12 | (2) Tangible personal property. Rents and royalties from | ||||||
13 | tangible
personal property are allocable to this State:
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14 | (A) If and to the extent that the property is utilized in | ||||||
15 | this State; or
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16 | (B) In their entirety if, at the time such rents or | ||||||
17 | royalties were paid
or accrued, the taxpayer had its commercial | ||||||
18 | domicile in this State and was
not organized under the laws of | ||||||
19 | or taxable with respect to such rents or
royalties in the state | ||||||
20 | in which the property was utilized.
The extent of utilization | ||||||
21 | of tangible personal property in a state is
determined by | ||||||
22 | multiplying the rents or royalties derived from such property
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23 | by a fraction, the numerator of which is the number of days of | ||||||
24 | physical
location of the property in the state during the | ||||||
25 | rental or royalty period
in the taxable year and the | ||||||
26 | denominator of which is the number of days of
physical location | ||||||
27 | of the property everywhere during all rental or royalty
periods | ||||||
28 | in the taxable year. If the physical location of the property
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29 | during the rental or royalty period is unknown or | ||||||
30 | unascertainable by the
taxpayer, tangible personal property is | ||||||
31 | utilized in the state in which the
property was located at the | ||||||
32 | time the rental or royalty payer obtained
possession.
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33 | (d) Patent and copyright royalties.
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34 | (1) Allocation. Patent and copyright royalties are |
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1 | allocable to this
State:
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2 | (A) If and to the extent that the patent or copyright is | ||||||
3 | utilized by the
payer in this State; or
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4 | (B) If and to the extent that the patent or copyright is | ||||||
5 | utilized by the
payer in a state in which the taxpayer is not | ||||||
6 | taxable with respect to such
royalties and, at the time such | ||||||
7 | royalties were paid or accrued, the
taxpayer had its commercial | ||||||
8 | domicile in this State.
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9 | (2) Utilization.
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10 | (A) A patent is utilized in a state to the extent that it | ||||||
11 | is employed in
production, fabrication, manufacturing or other | ||||||
12 | processing in the state or
to the extent that a patented | ||||||
13 | product is produced in the state. If the
basis of receipts from | ||||||
14 | patent royalties does not permit allocation to
states or if the | ||||||
15 | accounting procedures do not reflect states of
utilization, the | ||||||
16 | patent is utilized in this State if the taxpayer has its
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17 | commercial domicile in this State.
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18 | (B) A copyright is utilized in a state to the extent that | ||||||
19 | printing or
other publication originates in the state. If the | ||||||
20 | basis of receipts from
copyright royalties does not permit | ||||||
21 | allocation to states or if the
accounting procedures do not | ||||||
22 | reflect states of utilization, the copyright
is utilized in | ||||||
23 | this State if the taxpayer has its commercial domicile in
this | ||||||
24 | State.
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25 | (e) Illinois lottery prizes. Prizes awarded under the | ||||||
26 | "Illinois Lottery
Law", approved December 14, 1973, are | ||||||
27 | allocable to this State.
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28 | (e-5) Wagering and gambling winnings. Payments made after | ||||||
29 | December 31, 2004 of winnings from pari-mutuel wagering | ||||||
30 | conducted at a wagering facility licensed under the Illinois | ||||||
31 | Horse Racing Act of 1975 or from gambling games conducted on a | ||||||
32 | riverboat licensed under the Riverboat Gambling Act are | ||||||
33 | allocable to this State.
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34 | (f) Taxability in other state. For purposes of allocation |
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1 | of income
pursuant to this Section, a taxpayer is taxable in | ||||||
2 | another state if:
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3 | (1) In that state he is subject to a net income tax, a | ||||||
4 | franchise tax
measured by net income, a franchise tax for the | ||||||
5 | privilege of doing
business, or a corporate stock tax; or
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6 | (2) That state has jurisdiction to subject the taxpayer to | ||||||
7 | a net income
tax regardless of whether, in fact, the state does | ||||||
8 | or does not.
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9 | (g) Cross references. (1) For allocation of interest and | ||||||
10 | dividends by
persons other than residents, see Section | ||||||
11 | 301(c)(2).
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12 | (2) For allocation of nonbusiness income by residents, see | ||||||
13 | Section
301(a).
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14 | (Source: P.A. 79-743.)
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15 | (35 ILCS 5/701) (from Ch. 120, par. 7-701)
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16 | Sec. 701. Requirement and Amount of Withholding.
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17 | (a) In General. Every
employer maintaining an office or | ||||||
18 | transacting business within this State
and required under the | ||||||
19 | provisions of the Internal Revenue Code to
withhold a tax on:
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20 | (1) compensation paid in this State (as determined | ||||||
21 | under Section
304(a)(2)(B) to an individual; or
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22 | (2) payments described in subsection (b) shall deduct | ||||||
23 | and withhold from
such compensation for each payroll period | ||||||
24 | (as defined in Section 3401 of
the Internal Revenue Code) | ||||||
25 | an amount equal to the amount by which such
individual's
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26 | compensation exceeds the proportionate part of this | ||||||
27 | withholding exemption
(computed as provided in Section | ||||||
28 | 702) attributable to the payroll period
for which such | ||||||
29 | compensation is payable multiplied by a percentage equal
to | ||||||
30 | the percentage tax rate for individuals provided in | ||||||
31 | subsection (b) of
Section 201.
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32 | (b) Payment to Residents. Any payment (including | ||||||
33 | compensation , but not including a payment from which |
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1 | withholding is required under Section 710 of this Act ) to a
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2 | resident
by a payor maintaining an office or transacting | ||||||
3 | business within this State
(including any agency, officer, or | ||||||
4 | employee of this State or of any political
subdivision of this | ||||||
5 | State) and on which withholding of tax is required under
the | ||||||
6 | provisions of the
Internal Revenue Code shall be deemed to be | ||||||
7 | compensation paid in this State
by an employer to an employee | ||||||
8 | for the purposes of Article 7 and Section
601(b)(1) to the | ||||||
9 | extent such payment is included in the recipient's base
income | ||||||
10 | and not subjected to withholding by another state.
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11 | Notwithstanding any other provision to the contrary, no amount | ||||||
12 | shall be
withheld from unemployment insurance benefit payments | ||||||
13 | made to an individual
pursuant to the Unemployment Insurance | ||||||
14 | Act unless the individual has
voluntarily elected the | ||||||
15 | withholding pursuant to rules promulgated by the
Director of | ||||||
16 | Employment Security.
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17 | (c) Special Definitions. Withholding shall be considered | ||||||
18 | required under
the provisions of the Internal Revenue Code to | ||||||
19 | the extent the Internal Revenue
Code either requires | ||||||
20 | withholding or allows for voluntary withholding the
payor and | ||||||
21 | recipient have entered into such a voluntary withholding | ||||||
22 | agreement.
For the purposes of Article 7 and Section 1002(c) | ||||||
23 | the term "employer" includes
any payor who is required to | ||||||
24 | withhold tax pursuant to this Section.
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25 | (d) Reciprocal Exemption. The Director may enter into an | ||||||
26 | agreement with
the taxing authorities of any state which | ||||||
27 | imposes a tax on or measured by
income to provide that | ||||||
28 | compensation paid in such state to residents of this
State | ||||||
29 | shall be exempt from withholding of such tax; in such case, any
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30 | compensation paid in this State to residents of such state | ||||||
31 | shall be exempt
from withholding.
All reciprocal agreements | ||||||
32 | shall be subject to the requirements of Section
2505-575 of the | ||||||
33 | Department of Revenue Law (20 ILCS
2505/2505-575).
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34 | (e) Notwithstanding subsection (a)(2) of this Section, no |
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1 | withholding
is required on payments for which withholding is | ||||||
2 | required under Section
3405 or 3406 of the Internal Revenue | ||||||
3 | Code of 1954.
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4 | (Source: P.A. 92-846, eff. 8-23-02; 93-634, eff. 1-1-04.)
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5 | (35 ILCS 5/710) (from Ch. 120, par. 7-710)
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6 | Sec. 710. Withholding from lottery , wagering, and gambling | ||||||
7 | winnings. (a) In General. Any person
making a payment to a | ||||||
8 | resident or nonresident of winnings under the Illinois
Lottery | ||||||
9 | Law and not required to withhold Illinois income tax from such | ||||||
10 | payment
under Subsection (b) of Section 701 of this Act because | ||||||
11 | those winnings are
not subject to Federal income tax | ||||||
12 | withholding, must withhold Illinois income
tax from such | ||||||
13 | payment at a rate equal to the percentage tax rate for | ||||||
14 | individuals
provided in subsection (b) of Section 201, provided | ||||||
15 | that withholding is
not required if such payment of winnings is | ||||||
16 | less than $1,000. Any person making a payment after December | ||||||
17 | 31, 2004 to a resident or nonresident of winnings from | ||||||
18 | pari-mutuel wagering conducted at a wagering facility licensed | ||||||
19 | under the Illinois Horse Racing Act of 1975 or from gambling | ||||||
20 | games conducted on a riverboat licensed under the Riverboat | ||||||
21 | Gambling Act must withhold Illinois income tax from that | ||||||
22 | payment at a rate equal to the percentage tax rate for | ||||||
23 | individuals provided in subsection (b) of Section 201, provided | ||||||
24 | that the withholding is not required if the payment of winnings | ||||||
25 | is less than $1,000.
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26 | (b) Credit for taxes withheld. Any amount withheld under | ||||||
27 | Subsection (a)
shall be a credit against the Illinois income | ||||||
28 | tax liability of the person
to whom the payment of winnings was | ||||||
29 | made for the taxable year in which that
person incurred an | ||||||
30 | Illinois income tax liability with respect to those winnings.
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31 | (Source: P.A. 85-731.)
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32 | Section 99. Effective date. This Act takes effect upon |
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1 | becoming law.".
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