Sen. James F. Clayborne Jr.

Filed: 2/24/2004

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 2704

2     AMENDMENT NO. ______. Amend Senate Bill 2704 by replacing
3 everything after the enacting clause with the following:
 
4     "Section 5. The Illinois Income Tax Act is amended by
5 changing Sections 304 and 601 as follows:
 
6     (35 ILCS 5/304)  (from Ch. 120, par. 3-304)
7     Sec. 304. Business income of persons other than residents.
8     (a) In general. The business income of a person other than
9 a resident shall be allocated to this State if such person's
10 business income is derived solely from this State. If a person
11 other than a resident derives business income from this State
12 and one or more other states, then, for tax years ending on or
13 before December 30, 1998, and except as otherwise provided by
14 this Section, such person's business income shall be
15 apportioned to this State by multiplying the income by a
16 fraction, the numerator of which is the sum of the property
17 factor (if any), the payroll factor (if any) and 200% of the
18 sales factor (if any), and the denominator of which is 4
19 reduced by the number of factors other than the sales factor
20 which have a denominator of zero and by an additional 2 if the
21 sales factor has a denominator of zero. For tax years ending on
22 or after December 31, 1998, and except as otherwise provided by
23 this Section, persons other than residents who derive business
24 income from this State and one or more other states shall

 

 

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1 compute their apportionment factor by weighting their
2 property, payroll, and sales factors as provided in subsection
3 (h) of this Section.
4     (1) Property factor.
5         (A) The property factor is a fraction, the numerator of
6 which is the average value of the person's real and
7 tangible personal property owned or rented and used in the
8 trade or business in this State during the taxable year and
9 the denominator of which is the average value of all the
10 person's real and tangible personal property owned or
11 rented and used in the trade or business during the taxable
12 year.
13         (B) Property owned by the person is valued at its
14 original cost. Property rented by the person is valued at 8
15 times the net annual rental rate. Net annual rental rate is
16 the annual rental rate paid by the person less any annual
17 rental rate received by the person from sub-rentals.
18         (C) The average value of property shall be determined
19 by averaging the values at the beginning and ending of the
20 taxable year but the Director may require the averaging of
21 monthly values during the taxable year if reasonably
22 required to reflect properly the average value of the
23 person's property.
24     (2) Payroll factor.
25         (A) The payroll factor is a fraction, the numerator of
26 which is the total amount paid in this State during the
27 taxable year by the person for compensation, and the
28 denominator of which is the total compensation paid
29 everywhere during the taxable year.
30         (B) Compensation is paid in this State if:
31             (i) The individual's service is performed entirely
32 within this State;
33             (ii) The individual's service is performed both
34 within and without this State, but the service

 

 

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1 performed without this State is incidental to the
2 individual's service performed within this State; or
3             (iii) Some of the service is performed within this
4 State and either the base of operations, or if there is
5 no base of operations, the place from which the service
6 is directed or controlled is within this State, or the
7 base of operations or the place from which the service
8 is directed or controlled is not in any state in which
9 some part of the service is performed, but the
10 individual's residence is in this State.
11             (iv) Compensation paid to nonresident professional
12 athletes.
13             (a) General. The Illinois source income of a
14 nonresident individual who is a member of a
15 professional athletic team includes the portion of the
16 individual's total compensation for services performed
17 as a member of a professional athletic team during the
18 taxable year which the number of duty days spent within
19 this State performing services for the team in any
20 manner during the taxable year bears to the total
21 number of duty days spent both within and without this
22 State during the taxable year.
23             (b) Travel days. Travel days that do not involve
24 either a game, practice, team meeting, or other similar
25 team event are not considered duty days spent in this
26 State. However, such travel days are considered in the
27 total duty days spent both within and without this
28 State.
29             (c) Definitions. For purposes of this subpart
30 (iv):
31                 (1) The term "professional athletic team"
32 includes, but is not limited to, any professional
33 baseball, basketball, football, soccer, or hockey
34 team.

 

 

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1                 (2) The term "member of a professional
2 athletic team" includes those employees who are
3 active players, players on the disabled list, and
4 any other persons required to travel and who travel
5 with and perform services on behalf of a
6 professional athletic team on a regular basis.
7 This includes, but is not limited to, coaches,
8 managers, and trainers.
9                 (3) Except as provided in items (C) and (D) of
10 this subpart (3), the term "duty days" means all
11 days during the taxable year from the beginning of
12 the professional athletic team's official
13 pre-season training period through the last game
14 in which the team competes or is scheduled to
15 compete. Duty days shall be counted for the year in
16 which they occur, including where a team's
17 official pre-season training period through the
18 last game in which the team competes or is
19 scheduled to compete, occurs during more than one
20 tax year.
21                     (A) Duty days shall also include days on
22 which a member of a professional athletic team
23 performs service for a team on a date that does
24 not fall within the foregoing period (e.g.,
25 participation in instructional leagues, the
26 "All Star Game," or promotional "caravans").
27 Performing a service for a professional
28 athletic team includes conducting training and
29 rehabilitation activities, when such
30 activities are conducted at team facilities.
31                     (B) Also included in duty days are game
32 days, practice days, days spent at team
33 meetings, promotional caravans, preseason
34 training camps, and days served with the team

 

 

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1 through all post-season games in which the team
2 competes or is scheduled to compete.
3                     (C) Duty days for any person who joins a
4 team during the period from the beginning of
5 the professional athletic team's official
6 pre-season training period through the last
7 game in which the team competes, or is
8 scheduled to compete, shall begin on the day
9 that person joins the team. Conversely, duty
10 days for any person who leaves a team during
11 this period shall end on the day that person
12 leaves the team. Where a person switches teams
13 during a taxable year, a separate duty-day
14 calculation shall be made for the period the
15 person was with each team.
16                     (D) Days for which a member of a
17 professional athletic team is not compensated
18 and is not performing services for the team in
19 any manner, including days when such member of
20 a professional athletic team has been
21 suspended without pay and prohibited from
22 performing any services for the team, shall not
23 be treated as duty days.
24                     (E) Days for which a member of a
25 professional athletic team is on the disabled
26 list and does not conduct rehabilitation
27 activities at facilities of the team, and is
28 not otherwise performing services for the team
29 in Illinois, shall not be considered duty days
30 spent in this State. All days on the disabled
31 list, however, are considered to be included in
32 total duty days spent both within and without
33 this State.
34                 (4) The term "total compensation for services

 

 

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1 performed as a member of a professional athletic
2 team" means the total compensation received during
3 the taxable year for services performed:
4                     (A) from the beginning of the official
5 preseason training period through the last
6 game in which the team competes or is scheduled
7 to compete during that taxable year; and
8                     (B) during the taxable year on a date which
9 does not fall within the foregoing period
10 (e.g., participation in instructional leagues,
11 the "All Star Game," or promotional caravans).
12                 This compensation shall include, but is not
13 limited to, salaries, wages, bonuses as described
14 in this subpart, and any other type of compensation
15 paid during the taxable year to a member of a
16 professional athletic team for services performed
17 in that year. This compensation does not include
18 strike benefits, severance pay, termination pay,
19 contract or option year buy-out payments,
20 expansion or relocation payments, or any other
21 payments not related to services performed for the
22 team.
23                 For purposes of this subparagraph, "bonuses"
24 included in "total compensation for services
25 performed as a member of a professional athletic
26 team" subject to the allocation described in
27 Section 302(c)(1) are: bonuses earned as a result
28 of play (i.e., performance bonuses) during the
29 season, including bonuses paid for championship,
30 playoff or "bowl" games played by a team, or for
31 selection to all-star league or other honorary
32 positions; and bonuses paid for signing a
33 contract, unless the payment of the signing bonus
34 is not conditional upon the signee playing any

 

 

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1 games for the team or performing any subsequent
2 services for the team or even making the team, the
3 signing bonus is payable separately from the
4 salary and any other compensation, and the signing
5 bonus is nonrefundable.
6         Beginning with taxable years ending on or after
7 December 31, 1992, for residents of states that impose a
8 comparable tax liability on residents of this State, for
9 purposes of item (i) of this paragraph (B), in the case of
10 persons who perform personal services under personal
11 service contracts for sports performances, services by
12 that person at a sporting event taking place in Illinois
13 shall be deemed to be a performance entirely within this
14 State.
15     (3) Sales factor.
16         (A) The sales factor is a fraction, the numerator of
17 which is the total sales of the person in this State during
18 the taxable year, and the denominator of which is the total
19 sales of the person everywhere during the taxable year.
20         (B) Sales of tangible personal property are in this
21 State if:
22             (i) The property is delivered or shipped to a
23 purchaser, other than the United States government,
24 within this State regardless of the f. o. b. point or
25 other conditions of the sale; or
26             (ii) The property is shipped from an office, store,
27 warehouse, factory or other place of storage in this
28 State and either the purchaser is the United States
29 government or the person is not taxable in the state of
30 the purchaser; provided, however, that premises owned
31 or leased by a person who has independently contracted
32 with the seller for the printing of newspapers,
33 periodicals or books shall not be deemed to be an
34 office, store, warehouse, factory or other place of

 

 

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1 storage for purposes of this Section. Sales of tangible
2 personal property are not in this State if the seller
3 and purchaser would be members of the same unitary
4 business group but for the fact that either the seller
5 or purchaser is a person with 80% or more of total
6 business activity outside of the United States and the
7 property is purchased for resale.
8         (B-1) Patents, copyrights, trademarks, and similar
9 items of intangible personal property.
10             (i) Gross receipts from the licensing, sale, or
11 other disposition of a patent, copyright, trademark,
12 or similar item of intangible personal property are in
13 this State to the extent the item is utilized in this
14 State during the year the gross receipts are included
15 in gross income.
16             (ii) Place of utilization.
17                 (I) A patent is utilized in a state to the
18 extent that it is employed in production,
19 fabrication, manufacturing, or other processing in
20 the state or to the extent that a patented product
21 is produced in the state. If a patent is utilized
22 in more than one state, the extent to which it is
23 utilized in any one state shall be a fraction equal
24 to the gross receipts of the licensee or purchaser
25 from sales or leases of items produced,
26 fabricated, manufactured, or processed within that
27 state using the patent and of patented items
28 produced within that state, divided by the total of
29 such gross receipts for all states in which the
30 patent is utilized.
31                 (II) A copyright is utilized in a state to the
32 extent that printing or other publication
33 originates in the state. If a copyright is utilized
34 in more than one state, the extent to which it is

 

 

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1 utilized in any one state shall be a fraction equal
2 to the gross receipts from sales or licenses of
3 materials printed or published in that state
4 divided by the total of such gross receipts for all
5 states in which the copyright is utilized.
6                 (III) Trademarks and other items of intangible
7 personal property governed by this paragraph (B-1)
8 are utilized in the state in which the commercial
9 domicile of the licensee or purchaser is located.
10             (iii) If the state of utilization of an item of
11 property governed by this paragraph (B-1) cannot be
12 determined from the taxpayer's books and records or
13 from the books and records of any person related to the
14 taxpayer within the meaning of Section 267(b) of the
15 Internal Revenue Code, 26 U.S.C. 267, the gross
16 receipts attributable to that item shall be excluded
17 from both the numerator and the denominator of the
18 sales factor.
19         (B-2) Gross receipts from the license, sale, or other
20 disposition of patents, copyrights, trademarks, and
21 similar items of intangible personal property may be
22 included in the numerator or denominator of the sales
23 factor only if gross receipts from licenses, sales, or
24 other disposition of such items comprise more than 50% of
25 the taxpayer's total gross receipts included in gross
26 income during the tax year and during each of the 2
27 immediately preceding tax years; provided that, when a
28 taxpayer is a member of a unitary business group, such
29 determination shall be made on the basis of the gross
30 receipts of the entire unitary business group.
31         (C) Sales, other than sales governed by paragraphs (B)
32 and (B-1), are in this State if:
33             (i) The income-producing activity is performed in
34 this State; or

 

 

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1             (ii) The income-producing activity is performed
2 both within and without this State and a greater
3 proportion of the income-producing activity is
4 performed within this State than without this State,
5 based on performance costs.
6         (D) For taxable years ending on or after December 31,
7 1995, the following items of income shall not be included
8 in the numerator or denominator of the sales factor:
9 dividends; amounts included under Section 78 of the
10 Internal Revenue Code; and Subpart F income as defined in
11 Section 952 of the Internal Revenue Code. No inference
12 shall be drawn from the enactment of this paragraph (D) in
13 construing this Section for taxable years ending before
14 December 31, 1995.
15         (E) Paragraphs (B-1) and (B-2) shall apply to tax years
16 ending on or after December 31, 1999, provided that a
17 taxpayer may elect to apply the provisions of these
18 paragraphs to prior tax years. Such election shall be made
19 in the form and manner prescribed by the Department, shall
20 be irrevocable, and shall apply to all tax years; provided
21 that, if a taxpayer's Illinois income tax liability for any
22 tax year, as assessed under Section 903 prior to January 1,
23 1999, was computed in a manner contrary to the provisions
24 of paragraphs (B-1) or (B-2), no refund shall be payable to
25 the taxpayer for that tax year to the extent such refund is
26 the result of applying the provisions of paragraph (B-1) or
27 (B-2) retroactively. In the case of a unitary business
28 group, such election shall apply to all members of such
29 group for every tax year such group is in existence, but
30 shall not apply to any taxpayer for any period during which
31 that taxpayer is not a member of such group.
32     (b) Insurance companies.
33         (1) In general. Except as otherwise provided by
34 paragraph (2), business income of an insurance company for

 

 

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1 a taxable year shall be apportioned to this State by
2 multiplying such income by a fraction, the numerator of
3 which is the direct premiums written for insurance upon
4 property or risk in this State, and the denominator of
5 which is the direct premiums written for insurance upon
6 property or risk everywhere. For purposes of this
7 subsection, the term "direct premiums written" means the
8 total amount of direct premiums written, assessments and
9 annuity considerations as reported for the taxable year on
10 the annual statement filed by the company with the Illinois
11 Director of Insurance in the form approved by the National
12 Convention of Insurance Commissioners or such other form as
13 may be prescribed in lieu thereof.
14         (2) Reinsurance. If the principal source of premiums
15 written by an insurance company consists of premiums for
16 reinsurance accepted by it, the business income of such
17 company shall be apportioned to this State by multiplying
18 such income by a fraction, the numerator of which is the
19 sum of (i) direct premiums written for insurance upon
20 property or risk in this State, plus (ii) premiums written
21 for reinsurance accepted in respect of property or risk in
22 this State, and the denominator of which is the sum of
23 (iii) direct premiums written for insurance upon property
24 or risk everywhere, plus (iv) premiums written for
25 reinsurance accepted in respect of property or risk
26 everywhere. For purposes of this paragraph, premiums
27 written for reinsurance accepted in respect of property or
28 risk in this State, whether or not otherwise determinable,
29 may, at the election of the company, be determined on the
30 basis of the proportion which premiums written for
31 reinsurance accepted from companies commercially domiciled
32 in Illinois bears to premiums written for reinsurance
33 accepted from all sources, or, alternatively, in the
34 proportion which the sum of the direct premiums written for

 

 

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1 insurance upon property or risk in this State by each
2 ceding company from which reinsurance is accepted bears to
3 the sum of the total direct premiums written by each such
4 ceding company for the taxable year.
5     (c) Financial organizations.
6         (1) In general. Business income of a financial
7 organization shall be apportioned to this State by
8 multiplying such income by a fraction, the numerator of
9 which is its business income from sources within this
10 State, and the denominator of which is its business income
11 from all sources. For the purposes of this subsection, the
12 business income of a financial organization from sources
13 within this State is the sum of the amounts referred to in
14 subparagraphs (A) through (E) following, but excluding the
15 adjusted income of an international banking facility as
16 determined in paragraph (2):
17             (A) Fees, commissions or other compensation for
18 financial services rendered within this State;
19             (B) Gross profits from trading in stocks, bonds or
20 other securities managed within this State;
21             (C) Dividends, and interest from Illinois
22 customers, which are received within this State;
23             (D) Interest charged to customers at places of
24 business maintained within this State for carrying
25 debit balances of margin accounts, without deduction
26 of any costs incurred in carrying such accounts; and
27             (E) Any other gross income resulting from the
28 operation as a financial organization within this
29 State. In computing the amounts referred to in
30 paragraphs (A) through (E) of this subsection, any
31 amount received by a member of an affiliated group
32 (determined under Section 1504(a) of the Internal
33 Revenue Code but without reference to whether any such
34 corporation is an "includible corporation" under

 

 

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1 Section 1504(b) of the Internal Revenue Code) from
2 another member of such group shall be included only to
3 the extent such amount exceeds expenses of the
4 recipient directly related thereto.
5         (2) International Banking Facility.
6             (A) Adjusted Income. The adjusted income of an
7 international banking facility is its income reduced
8 by the amount of the floor amount.
9             (B) Floor Amount. The floor amount shall be the
10 amount, if any, determined by multiplying the income of
11 the international banking facility by a fraction, not
12 greater than one, which is determined as follows:
13                 (i) The numerator shall be:
14                 The average aggregate, determined on a
15 quarterly basis, of the financial organization's
16 loans to banks in foreign countries, to foreign
17 domiciled borrowers (except where secured
18 primarily by real estate) and to foreign
19 governments and other foreign official
20 institutions, as reported for its branches,
21 agencies and offices within the state on its
22 "Consolidated Report of Condition", Schedule A,
23 Lines 2.c., 5.b., and 7.a., which was filed with
24 the Federal Deposit Insurance Corporation and
25 other regulatory authorities, for the year 1980,
26 minus
27                 The average aggregate, determined on a
28 quarterly basis, of such loans (other than loans of
29 an international banking facility), as reported by
30 the financial institution for its branches,
31 agencies and offices within the state, on the
32 corresponding Schedule and lines of the
33 Consolidated Report of Condition for the current
34 taxable year, provided, however, that in no case

 

 

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1 shall the amount determined in this clause (the
2 subtrahend) exceed the amount determined in the
3 preceding clause (the minuend); and
4                 (ii) the denominator shall be the average
5 aggregate, determined on a quarterly basis, of the
6 international banking facility's loans to banks in
7 foreign countries, to foreign domiciled borrowers
8 (except where secured primarily by real estate)
9 and to foreign governments and other foreign
10 official institutions, which were recorded in its
11 financial accounts for the current taxable year.
12             (C) Change to Consolidated Report of Condition and
13 in Qualification. In the event the Consolidated Report
14 of Condition which is filed with the Federal Deposit
15 Insurance Corporation and other regulatory authorities
16 is altered so that the information required for
17 determining the floor amount is not found on Schedule
18 A, lines 2.c., 5.b. and 7.a., the financial institution
19 shall notify the Department and the Department may, by
20 regulations or otherwise, prescribe or authorize the
21 use of an alternative source for such information. The
22 financial institution shall also notify the Department
23 should its international banking facility fail to
24 qualify as such, in whole or in part, or should there
25 be any amendment or change to the Consolidated Report
26 of Condition, as originally filed, to the extent such
27 amendment or change alters the information used in
28 determining the floor amount.
29     (d) Transportation services. Business income derived from
30 furnishing transportation services shall be apportioned to
31 this State in accordance with paragraphs (1) and (2):
32         (1) Such business income (other than that derived from
33 transportation by pipeline) shall be apportioned to this
34 State by multiplying such income by a fraction, the

 

 

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1 numerator of which is the revenue miles of the person in
2 this State, and the denominator of which is the revenue
3 miles of the person everywhere. For purposes of this
4 paragraph, a revenue mile is the transportation of 1
5 passenger or 1 net ton of freight the distance of 1 mile
6 for a consideration. Where a person is engaged in the
7 transportation of both passengers and freight, the
8 fraction above referred to shall be determined by means of
9 an average of the passenger revenue mile fraction and the
10 freight revenue mile fraction, weighted to reflect the
11 person's
12             (A) relative railway operating income from total
13 passenger and total freight service, as reported to the
14 Interstate Commerce Commission, in the case of
15 transportation by railroad, and
16             (B) relative gross receipts from passenger and
17 freight transportation, in case of transportation
18 other than by railroad.
19         (2) Such business income derived from transportation
20 by pipeline shall be apportioned to this State by
21 multiplying such income by a fraction, the numerator of
22 which is the revenue miles of the person in this State, and
23 the denominator of which is the revenue miles of the person
24 everywhere. For the purposes of this paragraph, a revenue
25 mile is the transportation by pipeline of 1 barrel of oil,
26 1,000 cubic feet of gas, or of any specified quantity of
27 any other substance, the distance of 1 mile for a
28 consideration.
29     (e) Combined apportionment. Where 2 or more persons are
30 engaged in a unitary business as described in subsection
31 (a)(27) of Section 1501, a part of which is conducted in this
32 State by one or more members of the group, the business income
33 attributable to this State by any such member or members shall
34 be apportioned by means of the combined apportionment method.

 

 

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1     (f) Alternative allocation. If the allocation and
2 apportionment provisions of subsections (a) through (e) and of
3 subsection (h) do not fairly represent the extent of a person's
4 business activity in this State, the person may petition for,
5 or the Director may require, in respect of all or any part of
6 the person's business activity, if reasonable:
7         (1) Separate accounting;
8         (2) The exclusion of any one or more factors;
9         (3) The inclusion of one or more additional factors
10 which will fairly represent the person's business
11 activities in this State; or
12         (4) The employment of any other method to effectuate an
13 equitable allocation and apportionment of the person's
14 business income.
15     (g) Cross reference. For allocation of business income by
16 residents, see Section 301(a).
17     (h) For tax years ending on or after December 31, 1998, the
18 apportionment factor of persons who apportion their business
19 income to this State under subsection (a) shall be equal to:
20         (1) for tax years ending on or after December 31, 1998
21 and before December 31, 1999, 16 2/3% of the property
22 factor plus 16 2/3% of the payroll factor plus 66 2/3% of
23 the sales factor;
24         (2) for tax years ending on or after December 31, 1999
25 and before December 31, 2000, 8 1/3% of the property factor
26 plus 8 1/3% of the payroll factor plus 83 1/3% of the sales
27 factor;
28         (3) for tax years ending on or after December 31, 2000,
29 the sales factor.
30 If, in any tax year ending on or after December 31, 1998 and
31 before December 31, 2000, the denominator of the payroll,
32 property, or sales factor is zero, the apportionment factor
33 computed in paragraph (1) or (2) of this subsection for that
34 year shall be divided by an amount equal to 100% minus the

 

 

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1 percentage weight given to each factor whose denominator is
2 equal to zero.
3 (Source: P.A. 90-562, eff. 12-16-97; 90-613, eff. 7-9-98;
4 91-541, eff. 8-13-99.)
 
5     (35 ILCS 5/601)  (from Ch. 120, par. 6-601)
6     Sec. 601. Payment on Due Date of Return.
7     (a) In general. Every taxpayer required to file a return
8 under this Act shall, without assessment, notice or demand, pay
9 any tax due thereon to the Department, at the place fixed for
10 filing, on or before the date fixed for filing such return
11 (determined without regard to any extension of time for filing
12 the return) pursuant to regulations prescribed by the
13 Department. If, however, the due date for payment of a
14 taxpayer's federal income tax liability for a tax year (as
15 provided in the Internal Revenue Code or by Treasury
16 regulation, or as extended by the Internal Revenue Service) is
17 later than the date fixed for filing the taxpayer's Illinois
18 income tax return for that tax year, the Department may, by
19 rule, prescribe a due date for payment that is not later than
20 the due date for payment of the taxpayer's federal income tax
21 liability. For purposes of the Illinois Administrative
22 Procedure Act, the adoption of rules to prescribe a later due
23 date for payment shall be deemed an emergency and necessary for
24 the public interest, safety, and welfare.
25     (b) Amount payable. In making payment as provided in this
26 section there shall remain payable only the balance of such tax
27 remaining due after giving effect to the following:
28         (1) Withheld tax. Any amount withheld during any
29 calendar year pursuant to Article 7 from compensation paid
30 to a taxpayer shall be deemed to have been paid on account
31 of any tax imposed by subsections 201(a) and (b) of this
32 Act on such taxpayer for his taxable year beginning in such
33 calendar year. If more than one taxable year begins in a

 

 

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1 calendar year, such amount shall be deemed to have been
2 paid on account of such tax for the last taxable year so
3 beginning.
4         (2) Estimated and tentative tax payments. Any amount of
5 estimated tax paid by a taxpayer pursuant to Article 8 for
6 a taxable year shall be deemed to have been paid on account
7 of the tax imposed by this Act for such taxable year.
8         (3) Foreign tax. The aggregate amount of tax which is
9 imposed upon or measured by income and which is paid by a
10 resident for a taxable year to another state or states on
11 income which is also subject to the tax imposed by
12 subsections 201(a) and (b) of this Act shall be credited
13 against the tax imposed by subsections 201(a) and (b)
14 otherwise due under this Act for such taxable year. The
15 aggregate credit provided under this paragraph shall not
16 exceed that amount which bears the same ratio to the tax
17 imposed by subsections 201(a) and (b) otherwise due under
18 this Act as the amount of the taxpayer's base income
19 subject to tax both by such other state or states and by
20 this State bears to his total base income subject to tax by
21 this State for the taxable year. For purposes of this
22 subsection, no compensation received by a resident which
23 qualifies as compensation paid in this State as determined
24 under Section 304(a)(2)(B) shall be considered income
25 subject to tax by another state or states. The credit
26 provided by this paragraph shall not be allowed if any
27 creditable tax was deducted in determining base income for
28 the taxable year. Any person claiming such credit shall
29 attach a statement in support thereof and shall notify the
30 Director of any refund or reductions in the amount of tax
31 claimed as a credit hereunder all in such manner and at
32 such time as the Department shall by regulations prescribe.
33         (4) Accumulation and capital gain distributions. If
34 the net income of a taxpayer includes amounts included in

 

 

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1 his base income by reason of Section 668 or 669 of the
2 Internal Revenue Code (relating to accumulation and
3 capital gain distributions by a trust, respectively), the
4 tax imposed on such taxpayer by this Act shall be credited
5 with his pro rata portion of the taxes imposed by this Act
6 on such trust for preceding taxable years which would not
7 have been payable for such preceding years if the trust had
8 in fact made distributions to its beneficiaries at the
9 times and in the amounts specified in Sections 666 and 669
10 of the Internal Revenue Code. The credit provided by this
11 paragraph shall not reduce the tax otherwise due from the
12 taxpayer to an amount less than that which would be due if
13 the amounts included by reason of Sections 668 and 669 of
14 the Internal Revenue Code were excluded from his base
15 income.
16     (c) Cross reference. For application against tax due of
17 overpayments of tax for a prior year, see Section 909.
18 (Source: P.A. 92-826, eff. 8-21-02.)".