Rep. Mark H. Beaubien Jr.
Filed: 4/3/2008
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1 | AMENDMENT TO HOUSE BILL 4454
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2 | AMENDMENT NO. ______. Amend House Bill 4454, AS AMENDED, by | ||||||
3 | replacing everything after the enacting clause with the | ||||||
4 | following:
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5 | "Section 5. The Illinois Income Tax Act is amended by | ||||||
6 | changing Section 404 as follows:
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7 | (35 ILCS 5/404) (from Ch. 120, par. 4-404)
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8 | Sec. 404. Reallocation of Items.
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9 | (a) If it appears to the Director determines that any | ||||||
10 | agreement, understanding or
arrangement exists between any | ||||||
11 | persons which causes any person's base
income allocable to this | ||||||
12 | State to be improperly or inaccurately reflected,
the Director | ||||||
13 | may adjust such items of income and deduction, and any related | ||||||
14 | apportionment factor
taken into account in allocating that | ||||||
15 | income to this State, to such extent as
may reasonably be | ||||||
16 | required to determine the base income of such person
properly |
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1 | allocable to this State.
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2 | (b) Unless the principal purpose of the agreement, | ||||||
3 | understanding, or arrangement is for the avoidance of a tax on | ||||||
4 | or measured by net income imposed by any State, any adjustment | ||||||
5 | under this Section must be made in accordance with Section 482 | ||||||
6 | of the Internal Revenue Code, as amended, and any applicable | ||||||
7 | federal regulations. For any taxable year, unless established | ||||||
8 | by a preponderance of the evidence to the contrary, an | ||||||
9 | agreement, understanding, or arrangement for the principal | ||||||
10 | purpose of avoidance of a tax on or measured by net income | ||||||
11 | imposed by any State is presumed to exist between one or more | ||||||
12 | members of a unitary business group and a person who would be a | ||||||
13 | member of that unitary business group if not for the | ||||||
14 | prohibitions in item (27) of subsection (a) of Section 1501 of | ||||||
15 | this Act against including in a unitary business group persons | ||||||
16 | who apportion their business incomes under different | ||||||
17 | subsections of Section 304 of this Act or against inclusion in | ||||||
18 | any unitary business group of a person who conducts 80% or more | ||||||
19 | of his or her business activity outside the United States, if | ||||||
20 | that excluded person: | ||||||
21 | (1) has de minimis real or tangible personal property | ||||||
22 | or payroll for the taxable year, as determined for purposes | ||||||
23 | of subsection (a) of Section 304 of this Act; | ||||||
24 | (2) earns a return for the taxable year on all of its | ||||||
25 | real and tangible personal property that is substantially | ||||||
26 | more than the aggregate return earned by the members of the |
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1 | unitary business group on all of real and tangible personal | ||||||
2 | property of the unitary business group; for purposes of | ||||||
3 | this paragraph (2) the return on real and tangible personal | ||||||
4 | property of a person for a taxable year is equal to the | ||||||
5 | base income of that person for that taxable year, divided | ||||||
6 | by that person's real and tangible personal property for | ||||||
7 | that taxable year, as determined for purposes of subsection | ||||||
8 | (a) of Section 304 of this Act; or | ||||||
9 | (3) conducts substantially all of its business | ||||||
10 | activity, as shown by gross receipts for the taxable year, | ||||||
11 | with one or more persons who are members of the unitary | ||||||
12 | business group or who would be members of that unitary | ||||||
13 | business group if not for the prohibitions in item (27) of | ||||||
14 | subsection (a) of Section 1501 of this Act against | ||||||
15 | including in a unitary business group persons who apportion | ||||||
16 | their business incomes under different subsections of | ||||||
17 | Section 304 of this Act or against inclusion in any unitary | ||||||
18 | business group of a person that conducts 80% or more of its | ||||||
19 | business activity outside the United States. | ||||||
20 | (c) The Director may not make an adjustment to base income | ||||||
21 | under this Section that has the same effect as retroactively | ||||||
22 | applying any amendments to this Act made by Public Act 93-0840, | ||||||
23 | Public Act 95-0233, or Public Act 95-0707. | ||||||
24 | (d) Notwithstanding any other rulemaking authority that | ||||||
25 | may exist, neither the Governor nor any agency or agency head | ||||||
26 | under the jurisdiction of the Governor has any authority to |
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1 | make or promulgate rules to implement or enforce the provisions | ||||||
2 | of this amendatory Act of the 95th General Assembly. If, | ||||||
3 | however, the Governor believes that rules are necessary to | ||||||
4 | implement or enforce the provisions of this amendatory Act of | ||||||
5 | the 95th General Assembly, the Governor may suggest rules to | ||||||
6 | the General Assembly by filing them with the Clerk of the House | ||||||
7 | and the Secretary of the Senate and by requesting that the | ||||||
8 | General Assembly authorize such rulemaking by law, enact those | ||||||
9 | suggested rules into law, or take any other appropriate action | ||||||
10 | in the General Assembly's discretion. Nothing contained in this | ||||||
11 | amendatory Act of the 95th General Assembly shall be | ||||||
12 | interpreted to grant rulemaking authority under any other | ||||||
13 | Illinois statute where such authority is not otherwise | ||||||
14 | explicitly given. For the purposes of this paragraph, "rules" | ||||||
15 | is given the meaning contained in Section 1-70 of the Illinois | ||||||
16 | Administrative Procedure Act, and "agency" and "agency head" | ||||||
17 | are given the meanings contained in Sections 1-20 and 1-25 of | ||||||
18 | the Illinois Administrative Procedure Act to the extent that | ||||||
19 | such definitions apply to agencies or agency heads under the | ||||||
20 | jurisdiction of the Governor. | ||||||
21 | (Source: P.A. 76-261.)
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22 | Section 99. Effective date. This Act takes effect upon | ||||||
23 | becoming law.".
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